Capital Markets Story - October 2020
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Capital Markets Story
October 2020
Table of contents 1 H1 2020 Update ………………..……………..……………………………………………………… 4 2 CMD: Strategic Update ….…….……………….…..…………………………………………… 16 3 CMD: Financial Update ..………………...……………………………………………………… 39 4 Appendix …………………………..……………..………………………………………………………… 54
H1 2020 Update
High visibility despite Covid-19, mid-term targets E.ON H1 2020 results
confirmed
✓ 2020 EBIT guidance updated to €3.6 – 3.8bn reflecting
largely recoverable expected Covid-19 effects until year end1
✓ Strong operational performance in H1 2020 Dividend
despite adverse weather conditions growth
Customer centric
✓ Mid-term targets confirmed and investment energy
proposition further underpinned infrastructure
✓ Dividend guidance confirmed Sustainability Performance
1. Assuming no further severe lockdowns in our major markets
4
European recovery program and Green Deal will boost E.ON H1 2020 results
our growth potential
Maximum grants for each member Additional investment Hydrogen as strategic long-term
state under EU Recovery and opportunities to foster growth in growth pillar
Resilience Facility energy infrastructure
Italy 63.4
€500m €9bn public funds for
Poland 26.8 additional German hydrogen ramp up
Germany 21.5
investments
50 projects in E.ON‘s H 2
Romania 13.5 project pipeline
(3-5%)
Other E.ON
4-5% Being active in multiple parts
38.6 € bn
Markets
of H2 value chain offers
power RAB CAGR
E.ON markets total: >€160bn until 2022
large opportunities
5
Further milestones of innogy integration delivered E.ON H1 2020 results
No Covid-19 impact on net synergy1 targets Delivering on transaction and integration
€m
~740 ~780
✓ Squeeze-out completed
~310
✓ Closing 2 completed
~125
40 ✓ ✓ All remedies successfully executed or signed
✓
2019 2020 2021 2022 2024 achieving higher proceeds than planned
✓ First wave of voluntary leave program
successfully completed
✓ Further waves to start end 2020/2021
✓
1. Net accretive to EBIT, EBIT adjusted for non operating effects and before implementation costs (implementation costs not included in adjusted EBIT) 6
Digitalization at E.ON as core value driver E.ON H1 2020 results
Energy Networks Customer Solutions
Cooperation with SAP Germany: Substantial ramp up of contracts to digital platform
All German
• E.ON and SAP plan new cloud based million contracts
contracts migrated1
technology platform
~4
• New industry standard for network operations ~1
• Significant reduction in network IT cost by Mar 20 Jun 20 Sep 20 Dec 20 Dec 22
process re-design and digitization
UK: npower customer migration started in July 2020 as scheduled
million contracts All E.ON UK
contracts migrated
All npower
contracts migrated
> 0.1 > 0.4 > 0.8
1. E.ON and innogy core brand Aug 20 Oct 20 Dec 20 Q2 21 H2 22 7
Guidance 2020 update for Covid-19 impact in line with E.ON H1 2020 results
Q1 communication, now providing visibility until year end
EBIT1,2 Key takeaways:
€m 4,100 4,100
–
3,900
–
3,900
Volumes,
recoverable
• Covid-19 impact materialized as indicated
3,800
100 “lower end”
–
~150 3,600 •• Effects now specified versus Q1 guidance largely
~50 3,700
Sell-backs: “high
double-digit million“
recoverable
Bad debt &
Bad debt: “low
Volumes
double-digit million“
• No additional unexpected impact
on Customer Solutions
•• Updated guidance now covers Covid-19 impact
for the remainder of the year2
Guidance as of Covid included Guidance as Further Covid-19 Updated
March 2020 in Q1 guidance of May 2020 impact until YE guidance 2020
Covid-19 Energy Networks Covid-19 Customer Solutions
1. Adjusted for non-operational effects 2. Assuming no further severe lockdowns in our major markets 8
No further significant Covid-19 impact expected E.ON H1 2020 results
until year end
Energy Networks: Power demand down since Customer Solutions: Key metrics for payment
Covid-19 breakout behavior as of 31st July
110% Germany relative to 20191 Government Change of Day of
100% intervention payment behavior sales
90% ∕
○-~10% GER
80% UK
70% NL
60%
March April May June
unchanged/low slight change/medium worsened/high
Q1 assumptions re-confirmed:
• Payment behavior: No major change across E.ON markets
• H1 2020: Volumes down by ~10%: ~€100m impact
• Working capital increase due to Covid-19 ~€100 million only,
• FY 2020: Gradual recovery would add additional ~€50m due to active receivables management
impact for remainder of the year
• Bad debt: Covid-19 related total Group bad debt provision low to
• Volume related effects recoverable in 2022 – 20242 mid double-digit million Euro level at the end of Q2 2020
1. Source: entso-e 2. Period for recovery of lower revenues in 2020 in Germany 9Strong EBIT development despite Covid-19 impact and E.ON H1 2020 results
mild weather
EBIT1 H1 2020 vs. H1 2019 pro forma Key drivers
€m
H1 2019 –• Covid-19-related lower volumes
2,323
pro forma Energy
–• Germany: weather-related lower volumes
~-100 Networks
Energy
-251 Covid-19 impact –• Sweden: lower WACC in new regulatory
Networks (volumes) period
Customer ~-100
Solutions
+14 Covid-19 impact –• Covid-19: sell-back of volumes (B2B) &
(sell-backs, volumes bad debt
& bad debt) Customer
Corp. Functions
+80 Solutions –• Weather impact on volumes
& Other, Cons.
+• UK: restructuring benefits
Non-Core -4
+/–• PreussenElektra: higher achieved prices,
H1 2020 2,162 2,162 ~€2.4bn (excl. Covid-19) Non-Core higher depreciation from purchase of
production rights
–• Turkey Generation: one-off effect in
H1 2020
1. Adjusted for non operating effects; pro forma figures H1 2019, not audited 10Adjusted Net Income in line with EBIT development E.ON H1 2020 results
H1 2020
€m
Group EBIT1 2,162
Economic
-559
interest result
Profit
1,603
before Taxes1
Income taxes -401 Tax rate at ~25%
Minorities -269
0.36 EPS (€ per share)
Adjusted
933
Net Income1
1. Adjusted for non operating effects 11Temporary Economic Net Debt (END) increase largely due E.ON H1 2020 results
to squeeze-out and timing effects
€ bn
-8.9 -8.8
-7.2 -8.0
Asset Retirement Obligations (ARO)
Pension provisions
Net financial position
-23.4
-26.2
-1.7 +1.1 -1.5
-38.9 +1.2 -0.8
-39.4 +0.5 -1.6
-0.9 -43.1
END Transaction END OCF Net Transaction Transfer of Dividend Pensions5 Other END
FY 2019 adjustment1 FY 2019 H1 20202 Investments effects4 Nord Stream1 (incl. AROs) H1 2020
adjusted H1 20203 into CTA
1. Adjustment of the underlying interest rate for selected leases 2. Excl. transactional effects 3. Net of divestments 4. Transaction effects include merger squeeze-out, 12
locked-box and sale of German heating customer business 5. Actuarial interest rates for German pensions at 1.2% (vs. 1.3% @ FY 2019), for UK pensions at 1.6% (vs. 2.0% @
FY 2019)Rating target re-confirmed, positive END effects above E.ON H1 2020 results
initial expectations
Leverage factor1 Selected END effects 2020-20223
• 95% Cash conversion rate4
Strong BBB/Baa rating target ↑• Working Capital optimization program &
ARO5 reduction ~+€1.5bn (before: ~+€1bn)
5.6x (ARO reduction: ~€200m already achieved 2019)
• Nord Stream 1 transfer to pension fund executed ~+€1bn
~5x
• Transaction effects +/-€0bn (before: -€0.5bn)
Remedies, merger squeeze-out, locked box, restructuring Hungary
• Integration costs up to ~-€1bn
2019 2022
pro forma2
1. Economic Net Debt/EBITDA, EBITDA adjusted for non-operating effects 2. Reflecting transaction adjustment (END FY 2019 reduced by ~€0.5bn) 3. Negative effect 13
indicates increase of Economic Net Debt and vice versa 4. Excluding provision utilization for nuclear decommissioning, average for 2020-2022 5. Asset Retirement ObligationsUpdated Group outlook 2020 E.ON H1 2020 results
Group Guidance
EBITDA1: €6.8-7.0bn EBIT1: €3.6-3.8bn ANI1: €1.5-1.7bn Capex2: ~€4.2bn
(€7.1-7.3 bn) (€3.9-4.1bn) (€1.7-1.9bn) (~€4.5bn)
Segment Guidance1
Energy Networks Customer Solutions Non-Core
EBITDA: €5.0-5.2bn (€5.2-5.4bn) EBITDA: €1.0-1.2bn ✓ EBITDA: €0.8-1.0bn ✓
EBIT: €3.1-3.3bn (€3.3-3.5bn) EBIT: €0.4-0.6bn ✓ EBIT: €0.3-0.5bn ✓
Capex: ~€3.4bn Capex: ~€0.8bn ✓
1. Adjusted for non operating effects, assuming no further severe lockdowns in our major markets 2. Includes transaction related effects; cash effective capex outlook 14
excluding transaction related effects amounts to ~€4.6bnGuidance overview E.ON H1 2020 results
Change in guidance vs. Q1
€ bn 2019 pro forma3 20204 2020-20224
EBITDA1 6.904 6.8-7.0 5-6% CAGR
Energy Networks 5.364 5.0-5.2
Customer Solutions 1.126 1.0-1.2
Non-Core 0.617 0.8-1.0
Corporate Functions & Other -0.203 ~-0.3
EBIT1 4.065 3.6-3.8 11-13% CAGR
Energy Networks 3.499 3.1-3.3
Customer Solutions 0.541 0.4-0.6
Non-Core 0.366 0.3-0.5
Corporate Functions & Other -0.341 ~-0.4
ANI1 1.573 1.5-1.7 17-22% CAGR
EPS1 €0.60 €0.58-0.65 17-22% CAGR
Dividend €0.46 up to 5% p.a. up to 5% p.a.
Capex2 4.435 ~4.25 ~13
Energy Networks 3.149 ~3.4 ~9.7
Customer Solutions 1.008 ~0.8 ~2.7
Leverage 5.6x ~5x
1. Adjusted for non operating effects 2. Cash effective investments 3. Pro forma figures FY 2019, not audited, reflecting transaction adjustment 4. Assuming no further
15
severe lockdowns in our major markets 5. Includes transaction related effects; capex outlook excluding transaction related effects amounts to ~€4.6bnStrategic Update
Why invest in E.ON?
1 We commit to a sustainable dividend per share
growth of up to 5% annually until 2022 and further
growth beyond
Dividend
growth
2 We are the green investment opportunity and we
enable the energy transition
Customer centric
energy
infrastructure 3 We focus on customer centric energy infrastructure
which is the core of our resilient portfolio
Sustainability Performance
4 Performance culture is part of our DNA and we
continuously deliver on operational excellence
17Why invest in E.ON?
Dividend
growth
Customer centric
energy
infrastructure
Sustainability Performance
18Net zero is the new normal – E.ON is driving carbon reduction
Global challenges E.ON’s contribution Focus SDGs5
IPCC1 long term goal to limit global Avoided emissions together with our clients
warming to 1.5°C 2019: >100m tons CO2
German greenhouse gas emissions to be cut
One out of five renewable
by 55% by 2030
2
assets in Europe3 connected to E.ON’s grids
Green Deal: The EU will be climate neutral E.ON will become carbon neutral4
by 2050 by 2040
1. Intergovernmental Panel on Climate Change 2. Pre Green Deal 3. Considering EU27 4. Carbon neutrality by 2040 (Scope 1 and 2), 75% carbon reduction by 2030 19
(Scope 1 and 2), 50% reduction of Scope 3 emissions by 2030, carbon neutrality by 2050 (including Scope 3). Base year: 2019 pro forma 5. UN Sustainable Development
GoalsDecarbonization means deep electrification
European1 energy demand 2015 vs. 2050… … with huge impact on energy infrastructure
TWh
Increase of electricity demand (+90%)
~12,500 • Deep electrification of different sectors and
-40% ~7,000
decentral generation creates the need for
substantial grid investments
• Substitution of fossil fuel consumption through
green electricity
+90%
~67% Reduction of total energy demand (-40%)
~20%
2015 2050 • Major decarbonization goals provide business
opportunities for energy efficiency products and
services
Power Other
1. Considering EU27, Source: https://www.eea.europa.eu/data-and-maps/figures/primary-and-final-energy-consumption (energy demand)/ http://inrestruct.com/wp- 20
content/uploads/2015/04/Practical-guide-to-a-low-carbon-Europe-2050.pdf (power demand)Decentralization means digitalization and efficiency potential
The complexity within DSOs is increasing ...
Decentralization drives system complexity E.ON provides digital solutions to capitalize on it
Energy Management System
Regional Energy Market
EnergieMonitor & Klima-Navi
Customer Smart Home Transparency about CO2-footprint and
interface Storage
CO2 Footprint
impact of energy transition to
App
(data usage)
municipalities and customers
Asset Control Systems Local Energy System
Predictive
Maintenance
System
Flexibility
Predictive Maintenance
Network
operation Data, AI Control Data-driven decisions with
Center
(data distribution) machine learning
Asset Automated Grid
Monitoring Planning
Generation Network Buildings Grid Smartification
Physical Intelligent substation collects real-time
assets
(data generation) E-mobility data from our networks to enhance grid
Broadband management
21Why invest in E.ON?
Dividend
growth
Customer centric
energy
infrastructure
Sustainability Performance
22E.ON transformed into Europe’s energy infrastructure powerhouse E.ON’s strategy implementation accelerated by innogy takeover Long-term 2x 2x ~80% Integration ~€740m energy infrastructure Regulated Asset Base1 customer accounts regulated earnings bundling of synergies delivery of annual net substitutes increasingly with benefits for for the benefit of our synergies by 2022 merchant renewable credit rating2 customers assets 1. German RAB 2. Based on 2020 EBIT, EBIT adjusted for non operating effects 23
Infrastructure is at the heart of E.ON’s capital allocation
~10%
Energy Retail
Customer Solutions1 retail2 investments4
Decentral energy
infrastructure3
~90%
Infrastructure
Energy Networks1 Regulated energy networks investments4
1. IFRS segments used in external reporting 2. Includes Energy Sales and Services and New Solutions 3. Includes City Energy Solutions and B2B Solutions 24
4. Excludes investments in Corporate Functions & Other and Non-CoreEnergy transition driving multi-decade investment
opportunities
Industry investments in German power distribution networks excluding Green Deal upside
€ bn
Drivers
6.7
4.7
2.5
2010
2009 2020 2030 2050
Source: Historic values: Bundesnetzagentur Monitoringbericht 2019. Future outlook: dena-Leitstudie Integrierte Energiewende 25
1. Assuming 2% inflation beyond 2020E.ON is the leading energy network company in
Northern and Central Europe
E.ON Regulated Asset Base (RAB) – regional split
€ bn
Total RAB1, 2
33.2 Sweden Germany CEE2 &Turkey2
Power RAB Gas RAB
3.8 21.9 7.6
1. RAB is the value of all distribution assets determined by the regulator. In general, RABs from different regulatory regimes are not directly comparable due to significant
26
methodical differences. These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network connections.
Central Eastern Europe including: Czech Republic, Hungary, Poland, Romania, Slovakia 2. 100% view for Slovakia and TurkeyLong-term RAB growth with further upside potential
E.ON Regulated Asset Base1 growth
€ bn
Power
33.2 4-5% • Multi-decade growth potential
CAGR2 stemming from mega-trends
Gas
Power 27.7
• Optimizing our existing gas asset
base with limited investment needs
• Future growth option from hydrogen
Gas 5.5
2019 2022 Beyond
1. RAB is the value of all distribution assets determined by the regulator. In general, RABs from different regulatory regimes are not directly comparable due to significant
27
methodical differences. These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network
connections, including 100% view for Turkey and Slovakia. Constant year-end 2019 FX-rates 2. Relates to power RABGas distribution with stable earnings and limited capex
Gas activities closely coupled with power business Limited capex spent on gas
~90% of German gas network business is ~5% of Group capex is spent
1
linked to electricity concessions on our gas business
The role of gas in German heating market2 Future potential for industry and transport
37% 37%
Other
14%
50%
26% District heating
Gas
H2
37%
Existing connections New-builds
1. Cash effective investments, average for 2020-2022 2. Source: BDEW 2020
28Four years of regulatory stability
Regulatory periods per country
2020 2021 2022 2023 2024 2025 2026 2027 2028
Germany (Gas)
Slovakia1
Turkey
Poland
Czech Republic1
Hungary
Romania
70%2 of the Energy Networks
Germany
(Power)
EBIT is highly visible until 2024
Sweden
1. Length of upcoming regulatory period still under discussion 2. Based on 2019 pro forma EBIT, adjusted for non operating effects
29Exemplary earnings components beyond allowed return
Opex efficiencies Regulatory cost
Actual opex vs.
allowed opex
recognition Total
Allowed RAB
growth
= regulated
return
Capex efficiencies
Outperformance of standard
Special incentives
E.g. reliability and
earnings
prices set by regulator network losses
Allowed return Additional earnings components in our markets
30Leveraging strong partnerships and core competencies to
drive additional businesses
Long-term partnerships with municipalities … … create a competitive edge for additional businesses
Technical grid services Smart meters
Non-concession- Concession-
based RAB based RAB
e.g. O&M e.g. installation
~1/3 ~2/3
RAB
Broadband Water and waste-water
€21.9bn1
e.g. new customer e.g. supply and
connections operations
>9,000 … including other areas benefitting from our partnerships
concessions in Germany City Energy Solutions (CES)
Local heating and cooling solutions for
municipalities, districts and single sites
1. German power and gas RAB
31Earnings growth from reducing carbon emissions via
decentral energy infrastructure
Low temperature heating Large B2B solutions/district
and cooling grids heating grids
Top 2
E.g. ectogrid: zero emission On-site generation solutions
energy hybrid system with up Average contract duration: 15-40 years
to 20% cost savings
market position in
Sweden and Germany1
~25%
City quarter solutions
Integrated energy concepts
Single/multi-site solutions
Decentralized sustainable local energy
CAGR
EBIT 2020-20222
e.g. Werksviertel Munich
solutions (e.g. PV at Audi in Győr, Hungary)
Average contract duration: 20-40 years
1. City Energy Solutions, based on heating volumes sold 2. City Energy Solutions and B2B Solutions, EBIT adjusted for non operating effects
32Customer numbers B2B & B2C
Stable customer base (m)1 Thereof: electricity customers (m)1
Customer accounts -0.2%
+0.0% 41.2 41.1
52.2 52.2 11.6 11.6
6.6 6.5
2.6 2.5
13.9 13.8 10.5 10.5
9.8 9.9
10.9 10.7 FY 2019 H1 2020
4.6 4.6 Thereof: gas customers (m)1
11.0 +0.9% 11.1
13.0 13.1 2.3 2.3
4.2 4.2
9.8 9.9 2.0 2.1
2.5 2.6
FY 2019 H1 2020
FY 2019 H1 2020
Germany 2 UK3 Benelux4 Other Turkey
1. Including at-equity participations; Customer Solutions business of Croatia and Slovenia allocated to Energy Networks due to size 2. 2019 adjusted due to the disposal of 33
substantial parts of the heating customer business 3. To standardize reporting, the definition of customers was adjusted 4. 2019 adjusted for the acquisition of the Dutch
energy utility VandeBron.Why invest in E.ON?
Dividend
growth
Customer centric
energy
infrastructure
Sustainability Performance
34Performance culture is part of our DNA
Transaction related synergies npower & E.ON customers migrated Operational excellence
onto new platform E.ONnext
✓ Synergy delivery on track EBIT1 development Continuous improvement
GBP m
~100m
✓ 5% achieved in 2019
Digitalization & innovation
2019 2022 2023 >2023
✓ Measures validated and Earnings improvement: Combined
delivery de-risked EBIT1 of at least GBP100m in 2022 Regulatory outperformance
and improvement beyond
✓ €740m confirmed target Free cash flow will be Customer satisfaction
by 2022 positive2 from 2023 onwards
Top priorities Performance culture
1. Adjusted for non operating effects 2. After smart meter investments
35Synergy delivery fully on track
Estimated transaction related net synergies1 of ~€740m Synergy delivery by division
~100%
27%
~45%
53%
~20%
5% ✓ 20%
2019 2020 2021 2022
1. Start of voluntary 1. Full integration of 1. Synergies in Energy Customer Solutions
leave program headquarter Networks
Energy Networks
2. External budget cut 2. Organizational 2. Integration of
3. Optimization of IT integration of customer portfolios Central Functions, IT and Other
services Customer Solutions 3. Consolidation of IT
businesses landscape
1. Net accretive to EBIT, EBIT adjusted for non operating effects and before implementation costs (implementation costs not included in adjusted EBIT)
36Renewal of IT architecture to drive operational excellence
in Customer Solutions
Germany: Digital Attacker UK: Migration to new platform ensures higher profitability
Continuous ramp up of contracts to new Step 1 Step 2
platform (schematic) Migration of npower’s B2C and Migration of E.ON’s B2C and
SME customers onto E.ONnext SME customers onto E.ONnext
15m
10m
5m
• Combined EBIT of at least GBP100m in 2022
2020 2025 • Compared to previous plan: EBIT improvement 2023
by more than GBP50m and more than GBP100m
• Already today at competitive Cost-to-Serve level beyond 20231
• Ambition: reduction to market leading level at • Free cash flow positive from 2023 onwards2
low teens (€/customer)
• Total restructuring charges3 remain at up to GBP500m
1. Compared to business plan announced in November 2019 2. After smart meter investments 3. Majority to be shown in non operating result
37E.ON’s performance culture adds sustainable
value to businesses and customers
German power network efficiency scores Sweden power network efficiency scores
>€600m additional revenues 100%
in regulatory period1 E.ON grids
100%
Very efficient
85%
95%
Industry average 94%
Efficient
70%
8/9 E.ON grids 1/9 E.ON grids
8/9 E.ON networks obtain a 100% efficiency score, All E.ON grids considered very efficient, with 2/3
with 3 obtaining a super efficiency bonus being 100% efficient
1. Based on ~€4bn allowed power cost base relevant for efficiency factor
38Financial Update
We commit to annually grow the dividend per share by up to 5%
Dividend per share (DPS)
€0.43 €0.46
€0.30
€0.21
Growth beyond
2016
✓ 2017
✓ 2018
✓ 2019
✓ 2020 2021 2022
40E.ON’s 2020-2022 delivery plan confirmed
Dividend per share (DPS) growth up to 5% p.a.
EBIT1 growth
Group EPS1 growth
Group
11-13% (before: 7-9%) CAGR 17-22% (before: 10-15%) CAGR
cash conversion
Average strong
Capital structure with
rate2of 95% BBB/Baa rating
1. Adjusted for non operating effects; CAGR’s technically adjusted to new 2020 guidance, recovery of Covid-19 effects not yet reflected 2. Excluding provision utilization for 41
nuclear decommissioning, average for 2020-2022Strict capital allocation framework leads to sound
investment profile
Sustainability focus Return framework Capital allocation in line with business priorities
Sustainability criteria: Hurdle rate composition: Indicative hurdle rates2:
✓ Enable energy transition WACC
(country & technology specific)
Supporting SDGs1
6-11%
✓
✓ Reduce customers‘ emissions Project specific risk premium 4-9%
Human rights violations
E.ON Group excess return target
3-8%
Carbon heavy generation
Environmental degradation Hurdle rate
1. UN Sustainable Development Goals 2. Illustrative hurdle rate ranges; post tax. Final hurdle is risk adjusted for each project and might vary 3. Includes New Solutions and
42
Commodity Sales and Services 4. Includes City Energy Solutions and B2B Solutions 5. Excludes investments in Corporate Functions & Other and Non-CoreE.ON allocates ~75% of investments to Energy Networks
Investments 2020 Investments 2020-2022
€ bn € bn
~90%2 ~90%2
infrastructure infrastructure
~4.21 ~131
Energy Networks Customer Solutions Other3
1. Cash effective investments including Corporate Functions & Other and Non-Core, assuming no further severe lockdowns in our major markets, includes transaction related
43
effects; Capex outlook excluding transaction related effects amounts to ~€4.6bn for 2020 2. Based on investments in Energy Networks and Customer Solutions 3. Corporate
Functions & Other and Non-CoreInvestments with strong focus on infrastructure
Energy Networks 2020-2022 Customer Solutions 2020-2022
€ bn € bn
100% ~65%
~9.71 infrastructure
~2.71 infrastructure
B2B Solutions IT driven retail investments
City Energy Solutions New Solutions
Power Gas Other UK smart meter roll-out E-mobility
1. Cash effective investments, assuming no further severe lockdowns in our major markets
44Attractive Group earnings growth
EBITDA1 EBIT1 Outlook1
€ bn € bn CAGR
0.6
6.9
1.1
6.8-7.0
4.1
5-6%
3.6-3.8 EBITDA
0.4
11-13%
0.5
5.4
3.5
EBIT
2019 2020 2019 2020 2020-2022
pro forma pro forma
Guidance: Energy Networks Customer Solutions Corporate Functions & Other Non-Core
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets
45Mid-term growth in Energy Networks earnings backed by
organic RAB growth
EBITDA1 EBIT1 Outlook1
€ bn € bn
5.4
5.0-5.2
1.0 3.5
0.7
3.1-3.3
0.6
0.5
3.7
2.4
2019 2020 2019 2020 2020-2022
pro forma pro forma
Guidance: Germany Sweden CEE & Turkey
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets
46Customer Solutions earnings growth driven by digitalization and
UK turnaround
EBITDA1,2 EBIT1 Outlook1
€ bn € bn
1.0-1.2
1.1
0.5 0.4-0.6
0.3
0.1
0.2 Decentral energy 0.1
infrastructure
0.6 ~30% 0.5
2019 2020 -0.2 2020 2020-2022
pro forma
2019
pro forma
Guidance: Germany UK Benelux Other
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets 2. ~30% EBITDA share relating to decentral energy infrastructure
47Strong EPS growth of 17-22%
Adjusted Net Income1 Earnings per share1 Outlook1
€ bn € CAGR
1.5-1.7
1.6
0.60 0.58-0.65
Payout
17-22%
ratio
77%
2019 2020 2019 2020 2020-2022
pro forma pro forma
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets
48Significant refinancing benefits over the next three years
Bond maturities as of end H1 20201,2
€ bn
Refinancing benefits 17.2
Volume
until 2022 of up to
% Coupon
1.8 ~€200m3
1.5
0.4% 1.3
1.2
5.7% 0.0% 1.1
5.9% 5.6% 0.9
0.8
0.6 0.6 0.0% 3.9%
0.5
6.5% 0.4%
3.2% 0.8% 0.3 0.0% 3.0% 0.0%
3.2% 6.5% 5.5% 0.9%
5.5%
Q4 Q2 Q3 Q3 Q4 Q1 Q2 Q4 Q1 Q2 Q3 >2024
20202 2021 2021 2022 2022 2023 2023 2023 2024 2024 2024
1. Bonds issued by E.ON SE and E.ON International Finance B.V. (fully guaranteed by E.ON SE); bonds issued by innogy SE and innogy Finance B.V. (fully guaranteed by innogy SE)
49
2. Including innogy EIB-loan €645m 3. For entire period 2020 - 2022Green financing is an integral part of our funding strategy
Total investments 2020-2022 To finance our investments we have tapped the
€ bn green bond market …
95% €4.6bn outstanding 4
energy transition
investments2
… and intend to issue more:
131 ~€1bn p.a.
Revolving credit facility linked to sustainability ratings:
€3.5bn
Energy Networks Customer Solutions Other3
1. Cash effective investments including Corporate Functions & Other and Non-Core, assuming no further severe lockdowns in our major markets 2. Based on investments in
50
Energy Networks and Customer Solutions 3. Corporate Functions & Other and Non-Core 4. €3.75bn issued by E.ON SE and €0.85bn issued by innogy Finance B.V., including
Green Bond issuance April and May 2020.E.ON’s approach to manage Economic Net Debt
Economic Net Debt
€ bn
H1 2020
“Beat the • 0% real discount rate floor reached: only upside
-8.8
provisions” • Further upside: outperforming provisions by operational excellence
“Focus on the • UK pension obligations largely funded
-8.0 long end” • Sensitivity GER pensions: -50bps +€1.6bn
• Duration of pension obligation ~18 years
-26.2
“Manage for • Sound management of cash flow
cash” • Re-financing benefits from lower interest rates
-43.1
Asset Retirement Obligations Pensions Net financial position
51Rating target re-confirmed, positive END effects above
initial expectations
Leverage factor1 Selected END effects 2020-20223
• 95% Cash conversion rate4
Strong BBB/Baa rating target ↑• Working Capital optimization program &
ARO5 reduction ~+€1.5bn (before: ~+€1bn)
5.6x (ARO reduction: ~€200m already achieved 2019)
• Nord Stream 1 transfer to pension fund executed ~+€1bn
~5x
• Transaction effects +/-€0bn (before: -€0.5bn)
Remedies, merger squeeze-out, locked box, restructuring Hungary
• Integration costs up to ~-€1bn
2019 2022
pro forma2
1. Economic Net Debt/EBITDA, EBITDA adjusted for non-operating effects 2. Reflecting transaction adjustment (END FY 2019 reduced by ~€0.5bn) 3. Negative effect 52
indicates increase of Economic Net Debt and vice versa 4. Excluding provision utilization for nuclear decommissioning, average for 2020-2022 5. Asset Retirement ObligationsDividend commitment fully in line with deleveraging
EPS1 above DPS growth… …lowers payout ratio… … allowing deleveraging and
sustainable dividend growth
5.6x Strong BBB/Baa rating
target
77%
Payout ratio
~5x
2019 2020 2021 2022 2019 2022 2019 2022
pro forma pro forma pro forma
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets
53Appendix
E.ON new segmentation from 2020 onwards
IFRS reporting divisions
Energy Networks Customer Solutions Corporate Non-Core
Functions &
DE SWE CEE1 & TR Benelux2 DE UK Other3 PE4 TR Gen5
Other
Power grid City Energy Energy
Solutions sales and
Gas grid (CES) services
New
Additional businesses B2B Solutions
Solutions
Regulated Decentral energy Energy
networks infrastructure retail
Infrastructure
1. Central and Eastern Europe, including Czech Republic, Hungary, Poland, Romania, Slovakia, Croatia and Slovenia 2. Belgium, The Netherlands and Luxemburg 55
3. Including Czech Republic, Hungary, Italy, Poland, Romania, Sweden 4. PreussenElektra 5. Turkey GenerationE.ON’s strong ESG profile
Environmental Social Governance
Climate neutrality by 2040 Variety of nationalities, cultures,
generations and genders Supervisory
(Scope 1 & 2) & by 2050 Diversity Experienced, diverse and independent
in management & workforce Board
(including Scope 3)1
Avoided emission together with Health & Creation of a work environment
Efficient cooperation in Board
our clients that protects the health and safety
Safety Committees
2019: > 100mtons of customers and employees
Supervisory
Climate Board
Commitment to respect Committees
Driving the energy transition
through decentral & digital
Human human rights, uphold labor Creation of Innovation and
Rights standards, and fight against Sustainability Committee
local networks
corruption
Security of
Energy Networks: High Remuneration system closely
Energy efficiency solutions with our energy
clients to reduce carbon emissions supply
resilience due to high degree Remuneration aligns management’s and
of underground cabling shareholder’s interest
1. Carbon neutrality by 2040 (Scope 1 and 2), 75% carbon reduction by 2030 (Scope 1 and 2), 50% reduction of Scope 3 emissions by 2030, carbon neutrality by 2050 56
(including Scope 3). Base year: 2019 pro formaE.ON’s sustainability awards, ratings and rankings
CDP Score: B
Text 1 Result: AA Text 1
Sector Average: C
Overall ESG Score: 3.2
Overall ESG Score = 81 (Leader Group)
Text 1 Text 1 Sub Sector Average Multiutilities: 2.8
Relative Position 11 out of 192
Industry Average Utilities: 2.7
E.ON is index member1, i.e. one E.ON ranks 4th in the Green Utilities
Text 1 of the 120 most advanced Text 1 Report from Energy Intelligence (EI)
companies in Europe + Eurozone Group
Rating: C+ Text 1 E.ON ranks 6th out of 30
1. Vigeo/EIRIS was acquired by Moody’s in 2019 57Building blocks of allowed revenues in Germany
Schematic illustration for 2019 (power & gas)
€ bn
~21.2
Gas ~1.1
(New) Totex indexed to
Gas ~3.4 CPI and subject to Thereof: Thereof:
(Old) general and individual ~4.0 power ~8.3 power
efficieny targets ~0.7 gas ~1.2 gas
Power ~10.2
(New) ~9.5
~4.7
~6.5 40% Cap Opex ~3.0
Power
(Old)
~1.7 Capital Costs
Regulated asset Debt base2 Regulated equity Total allowed Adjustment of Allowed revenues
base1 base cost base revenues, lagged
(related to actual
Old assets: current (related to regulatory (Totex) recoveries and
costs; new assets: capital structure, capital structure,
minimum 60%) pass-through items
historic costs maximum 40%)
1. Old assets are those capitalized before January 1, 2006. New assets are those capitalized after January 1, 2006. Old assets are indexed up to 40% with asset-specific indices to 58
determine the current costs. Relevant asset base for calculation of allowed return in 2019 is 2016 for power and 2015 for gas 2. Debt base consists of non-interest and interest
bearing capitalEnergy Networks Germany - Earnings components
Illustrative average EBITDA1 split (2019-2020) Illustrative average EBIT1 split (2019-2020)
0% 0%
~5%
Regulated return & depreciation2 ~5%
~10%
Operational efficiency ~5%
Other infrastructure business3
~60% ~10% Additional network-related business4 ~50%
~15%
Other regulated earnings/temporary effects
Income from participations
~10%
~15%
Income from participations portfolio is at-equity/at-cost consolidated
1. Adjusted for non operating effects 2. Includes return on RAB, difference between regulatory and IFRS D&A and revenues for grid expansion 3. Other infrastructure businesses 59
include e.g. water business 4. Additional network-related business includes broadband, smart meter and technical network servicesContinuous improvement in operative
performance increases security of supply
SAIDI1,2 2014 vs. 2019 Power losses2 2014 vs. 2019
Germany Germany
48.0 -40% 4.4 -14%
3.8
29.0
2014 2019 2014 2019
Sweden Sweden
144.0
+18%3 170.0 3.9 -23% 3.0
2014 2019 2014 2019
CEE4 CEE4
336.0 -36% 9.1 -22% 7.1
214.0
2014 2019 2014 2019
1. System Average Interruption Duration Index 2. E.ON stand-alone figures 3. SAIDI increase due to weather related effects in 2019 22 minutes of disturbances (2014-2019), 60
includes: weather effects and other system disturbances 4. Calculated as arithmetic average of respective countriesRAB growth further supported by local drivers
Power RAB development Local drivers
€ bn
3-5% CAGR
• Renewable connections
Germany1 17.3 • Replacement
• Digitalization
2019 2022
3-5% CAGR
• Storm proofing
Sweden2 3.8 • Renewable connections
• Demand growth
2019 2022
4-6% CAGR
• New connections of B2B customers
Czech
1.6 • Reliability
Republic
• Modernization
2019 2022
1. Assuming constant number of network concessions 2. Excluding RAB re-evaluation following the beginning of new regulatory period 61Network charges are only a small portion of German power price
Composition of average electricity price Decarbonization currently not optimally supported,
electricity disadvantaged
• Renewables surcharge to be borne by more customers
Electricity Renewable
• Carbon minimum price or tax
procurement, surcharge
• Electricity tax to be redesigned
retail margin
Further taxes
Network
and levies
charges German power price needs to be ‘cleaned up’
Only
23%
62EU financing successful for major growth projects across Europe
with up to ~€250 m funding grants
• More than €500m investments planned ACON2,3 1.0/ACON 2.0
• Around 50% approved in EU grants • Increasing cross-border power distribution capacity and
• All projects included in EU PCI1 list grid modernization through implementation of smart grids
Danube InGrid3,4
• Improved security of supply and capacity in the boarder regions
• Implementation of smart grids
Smart Border Initiative3 (SBI)
• Commission a cross-border smart distribution grid at low cost
• Solving network bottlenecks and voltage problems intelligently
1. Project of Common Interest (EU Horizon 2020) 2. Again Connected Networks 3. Projects are part of the 4 th PCI list of EU 4. Danube Intelligent Grid
63City Energy Solutions selected projects
Key figures Project examples
Countries with Högbytorp
CES projects • 50% increase of renewable/recovered energy
>750k customers • 99% efficiency of CHP
• 659 GWh total output
Hanseviertel Lüneburg
~5k installations • 8,100t CO2 savings per year
under management • 90% CHP efficiency
• 88% of heat demand covered by bio natural gas
Werksviertel München
350 heating, cooling • 50% less CO2
& steam networks • 10% lower energy cost
• High level of energy self-sufficiency
Elephant & Castle London
• Inhouse construction management
€1.5bn revenue • 100% renewable heating supply
from 2023 (biogas)
6421 TWh of production rights for PreussenElektra already
transferred - Terms challenged
Nuclear power plant Krümmel1
88 TWh of production rights (before transfer)
21 TWh ~€27.8/MWh preliminary price
PreussenElektra
Transferred
production rights 10 TWh 6 TWh 5 TWh
Grohnde plant Isar II plant Brokdorf plant
Production rights secured until Oct 2020 Production rights secured until Jan 2021 Production rights secured until Jan 2021
5-10 TWh production rights required2 15-20 TWh production rights required2 5-10 TWh production rights required2
1. Krümmel OHG is a joint venture between E.ON and Vattenfall, each party owning 50% equity share 2. Volumes shown after transfer/purchase from Krümmel, excluding
65
minority stakes (16.7% minorities in Grohnde, 20% in Brokdorf and 25% in Isar II)Regulated earnings split share
EBITDA 20201
€ bn
regulated
• Regulated or quasi
Earnings share of ~75%
~75%
(Quasi-)regulated
earnings
strong
• Network operations in countries with
6.8 – 7.0
regulatory frameworks
• Customer Solutions and Energy Networks
Energy Networks Customer Solutions Other2
diversified across European countries
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets 2. Other includes Corporate Functions & Other and Non-Core
66Past delivery on guidance
EBIT1 vs. guidance Adjusted Net Income1 vs. guidance
€ bn € bn
3.1 3.1 3.0 3.2 0.9 1.4 1.5 1.5
2016 2017 2018 2019 2016 2017 2018 2019
reported reported
Guidance range
1. Adjusted for non operating effects
67Networks Capex breakdown 2020-2022
Germany Sweden CEE
€ bn € bn € bn
6.61 1.11 2.01
~50% ~50% ~60%
investment in expansion investment in expansion investment in expansion
Maintenance Grid expansion Other
1. Cash effective investments; assuming no further severe lockdowns in our major markets
68Maintaining a substantial liquidity buffer is a cornerstone of
E.ON’s risk management
• €1.9bn in cash & equivalents Key takeaways
Large volume of
• €1.2bn in short-term securities
liquidity1 • Well-filled liquidity buffer
• €2.4bn of non-current securities
• Funding needs for 2020 already
covered by bonds and revolving
• Early de-risking of refinancing needs for 2020: credit facility
Bond refinancing
All bond maturities covered in January 2020
and squeeze-out • Back-up RCF undrawn and fully
already covered • Funding need for squeeze-out covered by committed
recent bond issues
• Liquidity risk minimized, even in
highly volatile capital markets
Plus further back- • Undrawn €3.5bn Revolving Credit Facility
(RCF), fully committed by 21 banks, no
up RCF available MAC-clause2
1. As per December 2019 2. MAC = Material Adverse Change
69Benchmark bonds of E.ON Group as of July 20201
Volume in millions in Volume in millions in
Issuer respective currency Coupon Maturity Issuer respective currency Coupon Maturity
innogy Finance B.V. 570 GBP 6.500% Apr-21 E.ON SE 1,000 EUR 0.375% Sep-27
innogy Finance B.V. 1,000 EUR 6.500% Aug-21 innogy Finance B.V. 850 EUR 1.250% Oct-27
E.ON SE 750 EUR 0.375% Aug-21 E.ON SE 500 EUR 0.750% Feb-28
innogy Finance B.V. 500 GBP 5.500% Jul-22 E.ON SE 750 EUR 1.625% May-29
E.ON SE 500 EUR 0.000% Sep-22 innogy Finance B.V. 1,000 EUR 1.500% Jul-29
E.ON SE 750 EUR 0.000% Oct-22 E.ON SE 750 EUR 0.350% Feb-30
innogy Finance B.V. 2 750 EUR 0.750% Nov-22 innogy Finance B.V. 760 GBP 6.250% Jun-30
E.ON SE 1,000 EUR 0.375% Apr-23 E.ON SE 500 EUR 0.750% Dec-30
innogy Finance B.V. 488 GBP 5.625% Dec-23 E.ON SE 500 EUR 0.875% Aug-31
E.ON SE 750 EUR 0.000% Dec-23 E.ON SE 500 EUR 0.625% Nov-31
innogy Finance B.V. 800 EUR 3.000% Jan-24 E.ON International Finance B.V.3 975 GBP 6.375% Jun-32
E.ON SE 500 EUR 0.875% May-24 innogy Finance B.V. 600 EUR 5.750% Feb-33
E.ON SE 750 EUR 0.000% Aug-24 innogy Finance B.V. 600 GBP 4.750% Jan-34
innogy Finance B.V. 750 EUR 1.000% Apr-25 E.ON International Finance B.V. 900 GBP 5.875% Oct-37
E.ON SE 750 EUR 1.000% Oct-25 E.ON International Finance B.V.4 1,000 USD 6.650% Apr-38
innogy Finance B.V. 500 EUR 1.625% May-26 E.ON International Finance B.V. 700 GBP 6.750% Jan-39
E.ON SE 750 EUR 0.250% Oct-26 innogy Finance B.V. 1,000 GBP 6.125% Jul-39
innogy also has a €645m, 3.23% coupon, Oct-20 maturity European Investment Bank loan outstanding 1. All bonds ≥€500m equivalent, all bonds are listed in Luxemburg, with
70
exception of the unlisted USD bond under 144A/Regulation S 2. The bond was increased from €500m to €750m 3. The bond was increased from £850m to £975m 4. Bond
issued under rule 144A/Regulation SFunding strategy
Volumes
€2-4bn p.a. • Bond refinancings
• Cash utilization of asset retirement obligations
Tenors
3-12 years preferred • Optimize maturity profile & interest costs
• Redemptions on any single day capped at €1bn
Currencies
EUR preferred • Predominantly Euro-based asset base
• Regular & green bonds
• Private placements & promissory notes
Diversification
Instrument variety (Schuldscheindarlehen)
• Commercial paper
71innogy’s bondholders will be offered to switch to E.ON
• E.ON is and will be the only active issuer going forward Step 1 – Issuer Substitution in Q1 2020
• Rating agencies have attested that the degree of structural
subordination is not significant
innogy SE innogy Finance B.V.
+ innogy SE guarantee
• innogy’s ratings will be cancelled in 2020 and innogy’s group
Step 2 – Offer of Bond Transfer in 2020
financial reporting discontinued
• E.ON offers to move all innogy bonds to E.ON level and standards
with ratings and transparent reporting
• Launch expected in H2 innogy Finance B.V. E.ON
+ innogy SE guarantee
72E.ON’s Green Bond Framework
Evaluate & Management External
Use of proceeds Reporting
+
select projects of proceeds verification
• Finance and/or • Project selection based • E.ON will strive to • Allocation and impact
refinance eligible green on eligibility criteria maintain a portfolio reporting after a year
projects in the following • Green bond committee: matching/exceeding • Renewal on an annual
eligible categories: • Sustainability outstanding green bonds basis until full allocation
• Renewable energy • Energy Networks • Projects will be added on of proceeds
• Energy efficiency • Customer Solutions an on-going basis
• Clean transportation • Group Finance
Aligned with the ICMA Green Bond Principles1
Eligible Green Projects are aligned with draft EU taxonomy
1. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/
73PreussenElektra – Further ambition to „beat the provisions“
Solid track-record already until 2019 Nuclear Asset Retirement Obligations1
• Bundling of decommissioning activities € bn
2016 2017 2018 2019
• Procurement successes by „convoy approach“
• Operational progress according to plan
Further optimization already planned and in execution -9
-10 -10
• Decommissioning preparations starting early
• Operational excellence lifting dismantling performance
to next level (e.g. by increasing industrialization)
-21
1. In 2017 implementation of KFK solution (transfer of ~€10bn to German government fund)
74E.ON’s H1 2020 Results
Financial AppendixSegment outlook 2020 remaining year E.ON H1 2020 results
EBIT1 key drivers H2 2020
Energy Networks Customer Solutions Non-Core
Germany & CEE: All regions: PreussenElektra:
–
• Covid-19 related lower volumes ––
• Covid-19 impact •+ Higher hedged prices
Germany: •– Higher depreciation from purchase of
Germany:
production rights
+ Organic RAB growth
•
+
• Positive customer development and
transaction synergy delivery
Sweden:
–
• Disposal of heating customers
–
• Lower allowed WACC
UK:
CEE & Turkey: +
• Operational improvements
•+ Czech Republic: organic RAB growth
•+ Slovakia: acquisition of VSE
+
• Turkey: higher earnings in grid & retail
1. Adjusted for non operating effects, assuming no further severe lockdowns in our major markets
76Financial highlights E.ON H1 2020 results
H1 2019
€m H1 2020 % YoY
pro forma
Sales - 30,503 -
EBITDA1 3,650 3,656 +0
EBIT1 2,323 2,162 -7
Adjusted Net Income 1 1,052 933 -11
OCFbIT 1,057 1,521 +44
Investments 1,582 1,422 -10
Economic Net Debt² -38,903 -43,056 -11
1. Adjusted for non operating effects; pro forma figures H1 2019, not audited 2. Economic Net Debt as per 30 June
2020 and 31 Dec 2019; Economic Net Debt definition takes into account the decommissioning provisions calculated
with a real discount rate of 0.0% as opposed to IFRS AROs; bonds issued by innogy are recorded at their nominal value: 77
the amount in the consolidated balance sheets is €2.4 bn higherCash conversion in H1 seasonally low E.ON H1 2020 results
H1 2020
€ bn
44% CCR1
0.3
3.7
1.5 1.3
0.2
-2.4
-0.4
-1.4 -0.1
Group Cash Change in WC OCFbIT Interest Tax payments OCF Capex FCF
EBITDA2 adjustments3 payments
1. Cash Conversion Rate (CCR): (OCF bIT+ provision utilization nuclear) ÷ EBITDA 2. Adjusted for non operating effects 3. Net non cash effective EBITDA items incl. provision 78
utilizations and payments related to non operating earningsDivisions: Energy Networks E.ON H1 2020 results
EBIT1 Drivers
€m
–•
–13%
Covid-19-related lower volumes
1,903 Germany –• Weather-related lower volumes
CEE & Turkey 316 1,652
262 321
Sweden
186
Sweden
–• Lower WACC in new regulatory period
Germany 1,325
–• Higher transmission charges
1,145
–• Covid-19-related lower volumes
H1 2019 H1 2020
CEE +• Operational improvements
pro forma
€m Germany Sweden CEE & Turkey Total
H1 2019 H1 2019 H1 2019 H1 2019
H1 2020 % YoY H1 2020 % YoY H1 2020 % YoY H1 2020 % YoY
pro forma pro forma pro forma pro forma
Revenue - 7,052 - - 444 - - 1,291 - - 8,787 -
1
EBITDA 1,975 1,841 -7 340 263 -23 486 481 -1 2,801 2,585 -8
1
EBIT 1,325 1,145 -14 262 186 -29 316 321 +2 1,903 1,652 -13
thereof equity-method earnings - 119 - - 0 - - 67 - - 186 -
OCFbIT 749 1,316 +76 323 296 -8 530 449 -15 1,602 2,061 +29
Investments 728 873 +20 135 161 +19 226 264 +17 1,090 1,298 +19
1. Adjusted for non operating effects; pro forma figures H1 2019, not audited 79Divisions: Customer Solutions E.ON H1 2020 results
EBIT1 Drivers
€m –• Weather-related impact on volumes
443 +3% 457
All –• Covid-19: sell-back of volumes (B2B) & bad
debt
280
+• Restructuring benefits
Germany 321 UK +• Positive customer development under E.ON
Benelux 57 brand
Other 74 43
50 77
UK H1 2019 H1 2020
pro forma
€m Germany Benelux UK Other Total
H1 2019 H1 2019 H1 2019 H1 2019 H1 2019
H1 2020 % YoY H1 2020 % YoY H1 2020 % YoY H1 2020 % YoY H1 2020 % YoY
pro forma pro forma pro forma pro forma pro forma
Revenue - 11,188 - - 1,489 - - 7,356 - - 4,493 - - 24,526 -
1
EBITDA 384 339 -12 104 90 -13 83 109 +31 135 178 +32 706 716 +1
EBIT1 321 280 -13 74 57 -23 -2 43 n.a. 50 77 +54 443 457 +3
thereof equity-method earnings - 1 - - 2 - - 0 - - 4 - - 7 -
OCFbIT -314 -485 -54 -135 -74 +45 111 86 -23 158 159 +1 -180 -314 -74
Investments 78 103 +32 20 19 -3 108 52 -52 211 159 -25 417 333 -20
1. Adjusted for non operating effects; pro forma figures H1 2019, not audited 80Non-Core business E.ON H1 2020 results
EBIT1 Drivers
€m +• Higher achieved power prices
-2% +•
245 241 Higher production volumes
Preussen
Elektra –• Higher depreciation from purchase of
Preussen production rights
182
Elektra 222 –• Transfer of minority stakes2 to RWE
Generation Turkey
Turkey 63 19 Generation –• One-off effect in H1 2020
H1 2019 H1 2020
pro forma
PreussenElektra: Hedged Prices (€/MWh)
€m PreussenElektra Generation Turkey Total as of 30 June 2020
H1 2019 H1 2019 H1 2019
H1 2020 % YoY H1 2020 % YoY H1 2020 % YoY
pro forma pro forma pro forma
2019 100% 33
Revenue - 696 - - - - - 696 -
1
EBITDA
1
283 461 +63 63 19 -70 346 480 +39 2020 91% 46
EBIT 182 222 +22 63 19 -70 245 241 -2
thereof equity-method earnings - 27 - - 19 - - 46 - 2021 73% 45
OCFbIT 158 251 +59 - - - 158 251 +59
Investments 4 158 - - - - 4 158 - 2022 46% 45
1. Adjusted for non operating effects; pro forma figures H1 2019, not audited 2. NPP Emsland & Gundremmingen C 81Adjusted Net Income E.ON H1 2020 results
H1 2019
€m H1 2020 % YoY
pro forma
EBITDA1 3,650 3,656 +0
Depreciation/amortization -1,327 -1,494 -13
1
EBIT 2,323 2,162 -7
Economic interest expense (net) -542 -559 -3
1
EBT 1,781 1,603 -10
1
Income Taxes on EBT -456 -401 +12
1
% of EBT -26% -25% -
Non-controlling interests -273 -269 +1
1
Adjusted Net Income 1,052 933 -11
1. Adjusted for non operating effects; pro forma figures H1 2019, not audited 82Reconciliation of EBIT to E.ON H1 2020 results
IFRS Net Income
€m H1 2019 H1 2020 % YoY
1
EBITDA 2,710 3,656 +35
Depreciation/Amortization/Impairments -993 -1,494 -50
1
EBIT 1,717 2,162 +26
Reclassified businesses of Renewables -266 0 +100
Interest result -435 -332 +24
Net book gains 19 159 +737
Restructuring -90 -305 -239
Mark-to-market valuation of derivatives -337 -70 +79
Impairments (net) 0 -16 -
Other non-operating earnings -30 -307 -923
Income/Loss from continuing operations before income taxes 578 1,291 +123
Income taxes -245 -682 -178
Income/loss from continuing operations 333 609 +83
Income/loss from discontinued operations, net 209 -63 -130
Net income/loss 542 546 +1
1. Adjusted for non operating effects 83Cash effective investments1 E.ON H1 2020 results
H1 2019
€m H1 2020 % YoY
pro forma
Energy Networks 1,090 1,298 +19
Customer Solutions 417 333 -20
Corporate Functions & Other 72 -365 -610
Consolidation 0 -2 -
Non-Core 4 158 -
Investments 1,582 1,422 -10
1. Pro forma figures H1 2019, not audited 84Economic Net Debt1 E.ON H1 2020 results €m 31 Dec 2019 30 Jun 2020 Liquid funds 3,602 3,342 Non-current securities 2,353 2,079 Financial liabilities -28,955 -31,833 Adjustment FX hedging² 167 165 Net Financial Position -22,833 -26,247 Provisions for pensions -7,201 -7,972 Asset retirement obligations -8,869 -8,837 Economic Net Debt -38,903 -43,056 1. Economic Net Debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs; bonds issued by innogy are recorded at their nominal value: the amount in the consolidated balance sheets is €2.4 bn higher 2. Net figure; does not include transactions 85 relating to our operating business or asset management
Economic interest expense (net)2 E.ON H1 2020 results
H1 2019 Difference
€m H1 2020
pro forma (in € m)
Interest from financial assets/liabilities -466 -526 -60
Interest cost from provisions for pensions and similar provisions -62 -47 +15
Accretion of provisions for retirement obligations and similar provisions -36 -2 +34
Construction period interests¹ 7 4 -3
Others 15 12 -3
Net interest result -542 -559 -17
1. Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified asset.
Borrowing cost are interest costs incurred by an entity in connection with the borrowing of funds (interest rate:
3.86%) 2. Pro forma figures H1 2019, not audited 86E.ON’s Proforma Financials 2019
E.ON’s Proforma Financials1 — 2019
Adjusted EBITDA1 Adjusted EBIT1
€m FY 20192 €m FY 20192
Energy Networks 5,364 Energy Networks 3,499
Germany 3,721 Germany 2,358
Sweden 692 Sweden 539
CEE & Turkey 951 CEE & Turkey 602
Customer Solutions 1,126 Customer Solutions 541
Benelux 192 Benelux 132
Germany 648 Germany 487
UK -10 UK -180
Other 296 Other 102
Corporate Functions/Other -203 Corporate Functions/Other -341
Non-Core business 617 Non-Core business 366
Total 6,904 Total 4,065
1. Adjusted for non operating effects 2. Pro forma, not audited
88E.ON’s Proforma Financials1 — 2019
OCFbIT Investments (cash-effective)
€m FY 20192 €m FY 20192
Energy Networks 4,255 Energy Networks 3,149
Germany 2,455 Germany 2,254
Sweden 718 Sweden 313
CEE & Turkey 1,082 CEE & Turkey 582
Customer Solutions 378 Customer Solutions 1,008
Benelux 84 Benelux 90
Germany 71 Germany 226
UK 128 UK 211
Other 95 Other 481
Corporate Functions/Other -657 Corporate Functions/Other 130
Non-Core business 313 Non-Core business 148
Total 4,289 Total 4,435
1. Adjusted for non operating effects 2. Pro forma, not audited
89E.ON’s Proforma Financials1 — 2019
At-equity contribution to adjusted EBITDA/EBIT1 E.ON Financials P&L
€m FY 20192 €m FY 20192
Energy Networks 349 Adjusted EBITDA1 6,904
Germany 219
Depreciation/amortization recognized in Adjusted
Sweden 0 -2,839
EBIT
CEE & Turkey 130
Adjusted EBIT1 4,065
Customer Solutions 22
Economic interest expense (net) -1,304
Benelux 4
Germany 6 Adjusted EBT1 2,761
UK 0 Income Taxes on Adjusted EBT -724
Other 12 % of Adjusted EBT 26%
Corporate Functions/Other 70 Non-controlling interest on results of operations -464
Consolidation -1
Adjusted Net Income1 1,573
Non-Core business 125
Total 565
1. Adjusted for non operating effects 2. Pro forma, not audited
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