E.on Se · XETR:EOAN
E.on — Investor Presentation (November 2015)
48 slides from E.on's investor presentation, Nov 12, 2015
Slide 1: Capital Market Story
Capital Market Story November 2015
Slide 2: Key priorities
Key priorities Execution of spin-off preparation well on track and many important milestones already achieved Finalizing important projects and entering the harvesting phase Preparing further organic growth opportunities for future E.ON Visual of One2two project 1
Slide 3: E.ON to split into two publicly listed companies
E.ON to split into two publicly listed companies E.ON to spin off a majority stake in Uniper, its power & gas up- and midstream businesses, to its shareholders Uniper Intention to divest remaining stake in Uniper over the medium term post spin-off Empowering Shaping Spin-off expected to be cus
Slide 4: Two very different energy worlds emerging
Two very different energy worlds emerging Conventional energy world Central Transmission System-centric generation Security of supply Upstream Commodity markets Global/regional perspective Large scale, central Conventional technologies Energy efficiency Heat New energy world Distributed ge
Slide 5: Two leading companies for two energy worlds
Two leading companies for two energy worlds1 Uniper Generation German Nuclear Renewables Upstream Hydro Wind/Solar/Other Global Commodities Distribution Global Commodities E&P Germany Customer Other EU Countries Russia Power Generation Solutions Turkey Brazil German Nuclear Distinct opportunities, m
Slide 6: Accelerating E.ON's transformation
Accelerating E.ON’s transformation Strategic Operational Financial Stronger and more Improves alignment Optimizes the focused companies between rewards and financial profiles of results each company to More responsive to enable distinct changing customer Simplifies organiza- investment and
Slide 7: Business portfolio of future E.ON
Business portfolio of future E.ON1 Renewables Distribution Customer Solutions ~4.0 GW capacity >1 million km networks ~33 million ~15 GW global pipeline ~26m grid customers sales customers Europe onshore 1.1 GW Germany 440,000 km UK 7.7m Europe offshore 0.5 GW Sweden 137,000 km Germany 6.3m US onsho
Slide 8: Strategy of future E.ON
Strategy of future E.ON Renewables Internationally leading Stronger growth in wind on- and offshore provider of large and mid- Expand and build in new geographies scale wind & PV solutions Significantly improve position in solar PV Distribution Benchmark for network Higher investments in net
Slide 9: Business portfolio of Uniper
Business portfolio of Uniper1 Upstream2 Global Commodities Power Generation Russia 41 GW of capacity3 Production 37.3 mm boe Coal supply 29 m t Germany 11.8 GW Gas LTCs 35 bcm UK 7.5 GW Gas storage 9 bcm Sweden 6.5 GW LNG regas 4.7 bcm Other Europe 5.0 GW Russia 9.9 GW Among the top in European powe
Slide 10: Strategy of Uniper
Strategy of Uniper Strong base Strong future Upside potential Attractive power and Contributing to Capacity mechanisms gas portfolio, among security of supply in across Europe the top in Europe power and gas to ETS revitalization Germany and Europe Excellent reputation in Commodity marke
Slide 11: Proposition for customers, employees and other stakeholders
Proposition for customers, employees and other stakeholders Uniper Empowering customers Shaping markets Retains and attracts employees as it offers Offers employees opportunities in a opportunities in a growing market and with leading company with significant upside a clear purpose potential R
Slide 12: Financial indications
Financial indications Schematic selected key balance sheet items Key messages E.ON today Capital structure Financial liabilities Most existing financial debt at E.ON, incl. all bonds Pension provisions Uniper to raise additional financial debt Liquid funds Nuclear provisions with E.ON but also
Slide 13: Dividend during transition phase
Dividend during transition phase 0.60 0.50 €/share €/share Dividend of 0.50 €/share for 2014 and 2015 intended Fixed dividend to bridge transition phase Fixed dividend to remove uncertainty stemming from divestments 2013 2014 2015 paid in paid in to be paid 20141 20151 in 2016 0.50 €/share div
Slide 14: Spin off – Key milestones
Spin off – Key milestones Q2 2015 Organization & H2 2015 steering concepts for Reconfiguration 1 Jan 2016 both companies of transaction defined, e.g. structure Both companies May 2016 operationally Organizational Carve-out to be modified independent AGM invitation 8 June 2016 set-up and segmenta
Slide 15: Headquarters and management teams
Headquarters and management teams Uniper Headquarters: Essen Headquarters: Düsseldorf Management team: Management team: Johannes Teyssen Michael Sen Klaus Schäfer Christopher Delbrück Chief Executive Officer Chief Financial Officer Chief Executive Officer Chief Financial Officer Bernhard Reutersberg
Slide 16: Strategy and business developments
Strategy and business developments Disciplined investing in growth areas Renewables: continue to strengthen offshore position Distribution: strong foundations for steady growth Customer Solutions: empowering customers Generation: capacity markets gaining momentum 15
Slide 17: Disciplined investing in growth areas
Disciplined investing in growth areas Capex 2012-20151 2014 capex of €4.6bn, ~8% €bn 8 lower than initially planned 2015 capex planned at ~€4.3bn, 6 including additional capex announced in December 4 2015 capex in Wind & Solar, Distribution Networks and 2 Customers Solutions ~€3.1bn, up ~€0.4b
Slide 18: Renewables: continue to strengthen offshore position
Renewables: continue to strengthen offshore position Humber Gateway Amrumbank West 219 MW 288 MW COD in September COD in early October Two months ahead of In time and schedule and budget below budget Rampion Arkona 400 MW and 116 turbines Up to maximum capacity of 385 MW Final inve
Slide 19: Distribution: strong foundations for steady growth
Distribution: strong foundations for steady growth Regulatory asset base Current regulatory discussion Germany Distribution capex vs. €bn Network regulator BNetzA published regulatory depreciation major report “Incentive Regulation 2.0” 1.5 Example of attractive reform proposal: carry-over mecha
Slide 20: Customer Solutions: empowering customers
Customer Solutions: empowering customers Evolution of customer numbers (in million) Customer numbers: Focus on margins rather than volumes 8.2 8.0 7.7 UK First rise of customer numbers in Germany for 6.3 6.2 6.3 Germany many years European base expected to be stable, strong 9.4 9.4 9.4 Other f
Slide 21: Generation: capacity markets gaining momentum
Generation: capacity markets gaining momentum Hedging & achieved prices Regulatory developments Hedging Central Europe Capacity markets 60 €/MWh EU Commission to develop reference model E.ON for Capacity Remuneration Mechanisms 45 achieved /hedged UK 30 prices Auction for 2018-19 capacity in D
Slide 22: Backup
Backup Outlook Financials Economic net debt Dividend Operations Nuclear IR contacts Reporting calendar & Important links 21
Slide 23: Outlook
Outlook 2015 outlook €bn 2014A 2 2015E EBITDA 1 8.4 7.0 – 7.6 Depreciation 3.7 Economic interest expense 1.6 Taxes 1.1 Non-controlling interests 0.4 Underlying net income 1 1.6 1.4 – 1.8 1. Adjusted for extraordinary effects 22 2. 2014 EBITDA reflecting the treatment of the Regional Unit Spa
Slide 24: Outlook
Outlook 2015 EBITDA1 outlook per unit €bn 2014A 2015E Main drivers Germany 1.8 Organic improvements and weather normalization Organic improvements and weather normalization Other EU Countries 2 1.8 vs. margin pressure in Hungary and divestments Hydro: lower hydro prices, lower volumes (due to Re
Slide 25: Financials
Financials Financial highlights €m FY 2013 1 FY 2014 2 % YoY 9M 2014 9M 2015 % YoY Sales 119,688 111,556 -7 89,328 81,348 -9 EBITDA 3 9,191 8,337 -9 7,128 6,637 -7 EBIT 3 5,624 4,664 -17 4,455 3,912 -12 Underlying net income 3 2,126 1,612 -24 1,901 1,435 -25 Operating cash flow 6 6,260 6,253 - 5,341
Slide 26: FY 2014 EBITDA and EBIT by unit
Financials FY 2014 EBITDA and EBIT by unit €m EBITDA 1 EBIT 1 FY 2013 2 FY 2014 % YoY FY 2013 2 FY 2014 % YoY Generation 1,936 2,215 +14 1,017 1,201 +18 Renewables 1,464 1,500 +2 1,014 1,044 +3 Global Commodities 311 21 -93 192 -75 - Exploration & Production 1,070 1,136 +6 560 498 -11 Germany 2,387
Slide 27: First nine months 2015 EBITDA and EBIT by unit
Financials First nine months 2015 EBITDA and EBIT by unit €m EBITDA 1 EBIT 1 9M 2014 9M 2015 % YoY 9M 2014 9M 2015 % YoY Generation 1,553 1,057 -32 843 522 -38 Renewables 1,107 923 -17 764 628 -18 Global Commodities 444 259 -42 373 181 -52 Exploration & Production 942 714 -24 459 222 -52 Germany 1,2
Slide 28: 2014 EBITDA development
Financials 2014 EBITDA development 1,2,3 €bn FY 2013 9.2 E&P 0.1 E.ON 2.0 0.4 Renewables (EC&R) 0.1 Nuclear fuel tax 0.2 Disposals -0.6 FX effects -0.2 German regulation -0.3 Region Czechia -0.2 Power price and volume effect -0.2 Gas optimization -0.1 Other -0.1 FY 2014 8.4 1. Adjusted for extraordi
Slide 29: EBITDA development first nine months 2015
EBITDA development first nine months 2015 First nine months 2015 EBITDA development 1,2,3 (in €bn) 9M 2014 6.5 New capacities 0.1 Region Germany 0.2 Power portfolio -0.5 -1.2 E&P -0.2 Disposals -0.3 Other -0.4 9M 2015 5.4 Earnings trends in main effects continued, first positive impacts of capacity
Slide 30: Underlying net income
Financials Underlying net income €m FY 2013 2 FY 2014 3 %YoY 9M 2014 4 9M 2015 4 % YoY YoY EBITDA 1 9,191 8,337 -9 6,528 5,361 -18 -1,167 Depreciation/amortization -3,567 -3,673 - -2,682 -2,437 - - recognized in EBIT 1 EBIT 1 5,624 4,664 -17 3,846 2,924 -24 -922 Economic interest expense -1,874 -1,6
Slide 31: More than half of EBITDA from stable businesses
Financials More than half of EBITDA from stable businesses EBITDA1 split 100% Stable businesses make up Progressive around 53% of E.ON’s 80% portfolio mix hedging and risk reduction 60% In addition, the risk-profile of our merchant activities 40% Stable benefits from early hedging businesses and
Slide 32: Full year 2014 cash balance
Financials Full year 2014 cash balance €bn 2014 operating cash flow 6.3 Cash effective investments -4.6 Dividends (post scrip) -0.8 Free cash flow 0.9 Dividends to non-controlling interests -0.2 Build & sell proceeds +0.8 Cash balance 1.5 Adjustment 2014 nuclear tax -0.4 Adjusted cash balance 1.1 31
Slide 33: Economic net debt
Economic net debt Economic net debt €m 31 Dec 2013 3 31 Dec 2014 30 Sep 2015 Liquid funds 7,814 6,067 7,728 Non-current securities 4,444 4,781 4,837 Financial liabilities -22,724 -19,667 -17,785 Adjustment FX hedging 1 -46 34 261 Net financial position -10,512 -8,785 -4,959 Provisions for pensions -
Slide 34: FY 2014 economic net debt development
Economic net debt FY 2014 economic net debt development €bn December 31, 2013 -21.7 -10.5 -32.2 1 Dividends -1.0 Net financial position Provisions and other Investments -4.6 Other -2.5 Pension obligations -2.2 Divestments +2.8 Operating cash flow 2 +6.3 December 31, 2014 -24.6 -8.8 -33.4 1. Figures
Slide 35: Economic net debt development first 9M
Economic net debt Economic net debt development first 9M 2015 First nine months 2015 (in €bn) END END Provisions NFP 2014 OCF CAPEX B&S Dividend Divest Pensions Others 2015 NFP Provisions Pensions Pensions: -5.6 bn -4.6 bn ARO: ARO: -19.0 bn -18.6 bn Cash Balance: 2.3 bn -23.2 -24.6 5.7 1.0 2.4 0.1
Slide 36: Strong liquidity and well-balanced maturity profile
Economic net debt Strong liquidity and well-balanced maturity profile Liquidity and financial flexibility1 Maturity Profile1,2 5 Revolving credit facility 5 (undrawn) 4 Liquid funds 3 & non-current 12.6 2.7 2.3 securities 0.0 1.2 2 Liquidity 2015 2016 2017 2018 1 Bond & promissory notes maturities 0
Slide 37: Conventional generation: earnings drivers
Operations Conventional generation: earnings drivers EBITDA Generation + Hydro Outright hedging 1 €bn €/MWh ~49 2015 ~36 ~39 2016 ~33 2017 2012A 2013A 2014A 2015E ~33 Hydro – Wholesale ~28 Generation – Wholesale 0% 20% 40% 60% 80% 100% Hydro – Non-wholesale Generation – Non-wholesale Central Europe
Slide 38: Retirements of conventional generation capacity
Operations Retirements of conventional generation capacity Capacity retirements since 2012 2014 GW, pro-rata Fiume Santo 1 & 2 Oil 306 MW Jan 2014 Vilvoorde Gas 385 MW Jan 2014 12 Datteln 1-3 Coal 303 MW Mar 2014 10 Lucy 3 Coal 245 MW Mar 2014 3.3 Emile Huchet 5 Coal 330 MW Apr 2014 8 2015
Slide 39: E&P - Oil & Gas production
Operations E&P - Oil & Gas production m boe FY 2013 FY 2014 % YoY 9M 2014 9M 2015 % YoY Skarv 10.0 13.5 +36 11.4 10.3 -9 Njord/Hyme 2.4 2.8 +18 1.3 3.7 +184 Elgin-Franklin 0.6 0.9 +60 0.6 1.2 +84 Babbage 0.8 1.4 +75 1.1 0.9 -13 Huntington 0.8 1.2 +52 1.1 1.0 -14 Rita 0.3 0.7 +196 0.6 0.3 -56 Total N
Slide 40: Nuclear provisions stress test – E.ON's perspective
Nuclear Nuclear provisions stress test – E.ON‘s perspective E.ON nuclear provisions key figures Key messages Post op.; decom. E.ON‘s nuclear provisions are Correctly derived Interim storage In line with IFRS standards Transport, containers, conditioning Based on consistent set of key Storage
Slide 41: Decommissioning and waste management costs
Nuclear Decommissioning and waste management costs Schematic profile of decommissioning and waste All costs after shutdown covered by management cash outs for typical NPP in Germany decommissioning and waste management provisions after shut down (in €m per GW) Main components of the provisions 1
Slide 42: Estimating nuclear provisions in practice
Nuclear Estimating nuclear provisions in practice Key parameters Current cost estimate Timing of cash flows Escalation rate Discount rate 1 Steps to estimate nuclear provisions 1. Estimate decommissioning costs at current prices (current cost estimate) 2. Inflate the current cost estimate at
Slide 43: From costs to provisions
Nuclear From costs to provisions Schematic nuclear provision for a typical NPP Discount rate and escalation rate based on long-term Higher discount rate & averages since early 90s cost escalation rate Discount rates: average of long-term German government bond yields (15- Current cost 30 years u
Slide 44: E.ON's nuclear plants in Germany
Nuclear E.ON’s nuclear plants in Germany Start-up E.ON share Capacity Shutdown year (%) (MW) year Isar 2 1988 75.0 1,410 2022 Active nuclear plants Brokdorf 1986 80.0 1,410 2021 E.ON operator Grohnde 1985 83.3 1,360 2021 Emsland 1988 12.5 1,329 2022 Active nuclear plants Gundremmingen C 1985 25.0 1,
Slide 45: Nuclear provisions
Nuclear Nuclear provisions €m FY 2013 FY 2014 Decommissioning 11,271 11,818 Disposal of nuclear fuel rods and operational waste 5,778 6,035 Advance payments -1,209 -1,286 Total Germany 15,840 16,567 Decommissioning 813 777 Disposal of nuclear fuel rods and operational waste 1,484 1,425 Swedish Nucle
Slide 46: E.ON Investor Relations Contact
E.ON Investor Relations Contact Anke Groth T+49 (211) 45 79 345 Head of IR [email protected] Marc Koebernick T +49 (211) 45 79 239 [email protected] Dr. Stephan Schönefuß T +49 (211) 45 79 4808 [email protected] Oliver Roeder T +49 (211) 45 79 7402 [email protected] Carmen Schne
Slide 47: Reporting calendar & important links
Reporting calendar & important links Reporting calendar March 9, 2016 Annual Report 2015 May 11, 2016 Interim Report: January – March 2016 June 8, 2016 2016 Annual Shareholders Meeting August 10, 2016 Interim Report: January – June 2016 November 9, 2016 Interim Report: January – September 2016 Impor
Slide 48: Disclaimer
Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group Management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between