focused disciplined striving - e.on · 10% yoy improvement due to bond repayment in january 17% yoy...

Focused Disciplined Striving

H1 2016 results 10 August 2016

Solid operating performance in challenging environment

2

EBIT1

Underlying

Net Income1

H1 2016 Highlights H1 2016 vs. H1 2015

H1 2016

€2.0 bn

1.9 2.0

H1 2015

€2.1 bn

€0.6 bn

H1 2016 H1 2015

0.6

€0.8 bn

0.7

Divested Operations

Spin-off approved by AGM (99.7%)

EBIT1,2 up by ~€0.1 bn;

Core EBIT1 up by ~€0.2 bn

FY 16 Outlook confirmed

€3.9 bn disc. op. loss mainly driven

by Uniper impairments

BBB+ / Baa1 Rating affirmed

1. Adjusted for non operating effects

2. Excluding divested operations in H1 2015

Spin-off approved by AGM

1 Jan 2016

E.ON and Uniper

organizational

separate

Carve-out

effective

Employees

allocated to

both

companies

Binding tax

rulings

obtained

26 Apr 2016

8 Jun 2016

September 2016 AGM decision

99.7%

approval rate Pre-Listing

Roadshows &

capital market

communication

Capital market day

Equity story, incl.

strategy, KPIs,

dividend policy,

capital structure

AGM invitation

Spin-off report:

detailed financial

& legal

documentation

3

Listing of

BaFin approval of

Uniper

prospectus

Publication of

Uniper

prospectus (incl.

H1 2016 figures)

Energy Networks: regulatory update for Germany

Removal of regulatory time-lag for investments via

yearly true-up of regulated asset base

In exchange, expansion factor to be abolished

Bonus revenue for very high efficiency scores

Overall earnings impact limited

Modernized incentive regulation ordinance Review of allowed return on equity (RoE)

Highlights Highlights

Start of consultation for RoE for next regulatory

period starting 2018/19 with initial proposal of

6.91%

Final RoE determination expected for September

Final decision early August Allowed RoE for post 2005 investments in %

2008 2011 2016

Consultation

Determination

7.82

9.29 9.05

8.20

6.91 ?

4

Customer Solutions: Challenges in the UK

Increasing competition by new market entrants

E.ON well positioned with industry-leading NPS

score

Rigorous focus on operating costs, customer

retention programs, customer satisfaction

Competitive landscape CMA final report


Removal of the “simpler choices” components

positive

Introduction of price cap for prepayment customers

negative

Majority of measures shall enter into force in April

2017

Published end of June

5

Number of suppliers and market shares B2C power & gas

40

30

20

10

50%

100%

Small &

Medium

Large Nu

mb

er

of

su

pp

liers

Mark

et

sh

are

(re

d l

ine)

2012 2013 2014 2015 2016

Source: Cornwall Energy

Renewables: We continue to deploy capabilities

385 MW offshore windfarm in German Baltic Sea

Final investment decision taken in April

Expected to be fully operational in 2019

Rampion Colbeck’s Corner

Arkona Twin Forks

278 MW onshore windfarm in Illinois featuring 139

turbines

Expected to be fully operational in late 2017

400 MW offshore windfarm in English Channel

1/3 of 116 mono-pile foundations already installed

Fully on track for completion in 2018

200 MW onshore windfarm in Texas

Fully operational since May 2016

20th E.ON windfarm in the US

6

Key takeaways

Spin-off preparations nearing the

finishing line; listing expected for

September

KFK discussions are progressing

Core businesses well positioned but

also exposed to competitive and

regulatory dynamics especially in

medium term perspective

Future E.ON will continue to have

absolutely strict focus on financial

discipline and proper capital allocation

7

H1 2016 EBIT ~€100 million above previous year

8 1. Adjusted for non operating effects

73

53

131

131

214

113

Corp.

Functions &

Other,

Consolidation

Renewables Customer

Solutions

H1 2016

2,001

Preussen

Elektra

Energy

Networks

H1 2015

w/o div.

operations

1,908

Divested

Operations

H1 2015

2,122

EBIT1 H1 2016 vs. H1 2015

€ m

Strong Customer Solutions result offsets Networks

Germany:

- Base year for new regulatory period

- Positive non-recurring effects in H1 2015

Sweden:

- Start of the new regulatory period

- H1 2015 burdened by storm costs

CEE:

- Positive effects in Czech Republic and Turkey

compensate for milder winter in Romania

Energy Networks Customer Solutions


Germany:

- Slight decline due to competitive dynamics and

the transfer of wholesale customers

UK:

- Lower ECO2 and procurement costs

- One-off costs in H1 2015

Other:

- Sweden: normalized winter in H1 2016

- Romania & Hungary: organic

improvements

EBIT1 € m

593492

186183

197166

H1 2016 H1 2015

872

Germany

945

-8%

Sweden

CEE & Turkey

175 164

218 291

135

204

+25%

H1 2016 H1 2015

528

Germany

UK

659

Other

EBIT1 € m


2. Energy Company Obligation 9

Strong increase in offshore EBIT contribution

Renewables PreussenElektra



53

150

20151Offshore/Other

+26%

H1 2016

254

H1 2015

201

Onshore/Solar

283

414

-32%

H1 2016 H1 2015

EBIT1 € m EBIT1 € m

Offshore:

- Positive contribution from Humber &

Amrumbank

- Book gain from Arkona stake sale

Onshore:

- Positive one-off effects in H1 2015 (incl. book

gains & hedges)

- Negative price effects in H1 2016

Lower volumes due to Grafenrheinfeld shut-down

Lower achieved power prices compensated by

lower nuclear fuel tax

10

Underlying Net Income affected by high tax rate

11 EPS (€ per share)

H1 2016

€ bn

0.31 Underlying

Net Income

Minorities 0.1

Tax expense 0.5

Profit before

Taxes

Other interest

expenses (incl.

Nuclear AROs)

0.5

Interest on

fin. assets/

liabilities

0.3

Group EBIT

0.6

1.2

2.0

1. Adjusted for non operating effect

2. Without accretion of nuclear provisions

10% YoY improvement due to bond repayment in January

17% YoY weakening driven by valuation effects on other long-term provisions and lower interest capitalization

+26% YoY: 38% tax rate due to aperiodic tax charges

13% YoY decrease mainly driven by German networks development

Cash conversion in line with guidance

12

H1 2016

€ bn

Payments

related to

non-op

earnings

Changes

in NOWC

Non-cash

effective

EBITDA

items

EBITDA1

2.9

Provision

utilization

0.1

FCF

1.3

0.7

OCF

1.6

Tax

Payments

Interest

Payments

OCF bIT

2.3

0.5

0.1 0.1

CAPEX

0.3

Divest

0.3 0.4


2. Cash Conversion Rate: OCFbIT / EBITDA

CCR1: 79%

END increasing mainly due to pension revaluation

13

-0.7

-1.1-1.3

-0.1

-24.8

-2.3-21.3

-5.6-3.3

NFP Provisions

FY 2015

0.1

Inv OCF END

FY

20151

Divest

0.3

Dividend B&S

-23.6

-18.1

END

H1

20161

Others Pensions Provisions

H1 2016

NFP

1.1

1.6

-21.2

-17.9 Pension Discount Rates:

GER 1.4% vs. 2.7%

UK 2.9% vs. 3.8%

ARO

Pensions

ARO

Pensions

€ bn

Economic Net Debt H1 2016 vs. FY 2015

Others include:

- €1 bn Nordstream 1 Transfer

- €0.2 bn Uniper Capital Increase

1. Pro-forma END of Future E.ON

Liquid Funds: €7.8 bn

Non-Current Securities: €4.5 bn

Liquid Funds: €7.2 bn

Non-Current Securities: €4.7 bn

Cash Balance: -€0.7 bn

2016 Outlook confirmed1

€0.6-1.0bn

€4.6-5.0bn

14 1. In transition year 2016 including at-equity contribution of Uniper on an underlying basis after assumed spin-

off & deconsolidation; as of 2017 without Uniper contribution

EBITDA

EBIT

Underlying

Net Income

€2.7-3.1bn

E.ON Focus – our basis for steering the company

Executive compensation

Profit

Group EBIT1

Cash

Cash conversion

rate2

≥ 80 %

Return

ROCE3

8 – 10 %

Growth

EPS4

Capital structure BBB+ / Baa1

Dividend payout 40 – 60 % of Underlying Net Income

E.ON FOCUS – medium-term framework

closely linked to EPS and relative TSR5

(in addition: Share ownership obligations)

≥ 5 - 10 % p.a.

15

1.Adjusted for non operating effects and divested operations in 2015 – without Uniper contribution

2.OCFbIT (Operating cash flow before interest and tax) divided by EBITDA – without Uniper contribution

3.Based on EBIT (= pre tax) – without Uniper contribution

4.Based on Underlying Net Income, compound annual growth rate, adjusted for divested operations in 2015 –

without Uniper contribution

5.Total Shareholder Return

Backup

Financial Highlights

17


2. END FY 2015 refers E.ON going concern, END H1 2016 without Liabilities of Uniper Group (difference to

pro-forma END figure shown on p. 13 reflects €0.7 bn loan to Uniper, which is excluded as intercompany

transaction under IFRS)

3. END as per FY 2015

€bn H1 2015 H1 2016 % YoY

Sales 22.8 20.3 -11

EBITDA 1 3.3 2.9 -12

EBIT 1 2.1 2.0 -5

Underlying net income 0.8 0.6 -25

OCF bIT 2.3 1.9 -18

Investments 1.1 1.3 18

Economic net debt ² 27.7³ 25.5 -8

Underlying Net Income


€m H1 2015 H1 2016 % YoY

EBITDA 1 3,293 2,901 -12

Depreciation/amortization -1,171 -900 -23

EBIT 1 2,122 2,001 -6

Economic interest expense (net) -774 -810 5

EBT 1 1,348 1,191 -12

Income Taxes on EBT 1 -361 -456 26

% of EBT 1 -27% -38% -

Non-controlling interests -151 -131 -13

Underlying net income 836 604 -28

From EBITDA to Net Income


€m H1 2015 H1 2016 % YoY

EBITDA 1 3,293 2,901 -12

Depreciation/Amortization/Impairments -1,171 -900 -23

EBIT 1 2,122 2,001 -6

Economic interest expense (net) -774 -810 5

Net book gains 302 -25 -108

Restructuring -118 -129 9

Mark-to-market valuation of derivatives -152 552 -463

Impairments (net) -118 -44 -63

Other non-operating earnings 5 -23 -6

Income/Loss from continuing operations before income taxes 1,267 1,522 20

Income taxes -281 -567 102

Income/loss from discontinued operations, net 329 -3,884 -1,281

Non-controlling interests 166 105 -37

Net income/loss attributable to shareholders of E.ON SE 1,149 - 3,034 - 364

Energy Networks & Customer Solutions

20

€m

H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY

Revenue 6,297 7,002 11 501 509 2 833 811 -3 7,631 8,322 9

EBITDA 1 856 793 -7 249 279 12 286 286 0 1,391 1,358 -2

EBIT 1 593 492 -17 166 197 19 186 183 -2 945 872 -8

thereof Equity-

method earnings 72 32 -56 0 0 - 38 46 21 110 78 -29

OCFbIT 210 929 342 246 278 13 238 302 27 694 1,509 117

Investments 232 303 31 98 114 16 105 117 11 435 534 23

Germany Sweden CEE & Turkey Total

€m

H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY

Revenue 4,415 4,150 -6 5,205 4,356 -16 3,939 3,491 -11 13,559 11,997 -12

EBITDA 1 201 196 -2 273 338 24 187 269 44 661 803 21

EBIT 1 175 164 -6 218 291 33 135 204 51 528 659 25

thereof Equity-

method earnings 10 0 -100 0 0 - 6 5 -17 16 5 -69

OCFbIT -95 -68 -28 106 136 28 182 481 164 193 549 184

Investments 23 27 17 75 108 44 71 115 62 169 250 48

TotalUKGermany Other

Energy Networks

Customer Solutions


Renewables & PreussenElektra

21

€m

H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY

Revenue 405 347 -14 199 333 67 604 680 13

EBITDA 1 260 172 -34 89 274 208 349 446 28

EBIT 1 150 53 -65 51 201 294 201 254 26

thereof Equity-

method earnings 13 11 -15

OCFbit 251 407 62

Investments 457 473 4

Offshore Wind / Others TotalOnshore Wind / Solar

€m

H1 2015 H1 2016 % YoY

Revenue 1,396 751 -46

EBITDA 1 519 327 -37

EBIT 1 414 283 -32

thereof Equity-

method earnings 40 41 3

OCFbIT 470 361 -23

Investments 8 11 38

PreussenElektra

37

33

272018

2017

2016

83% hedged

Hedged Prices Germany (€/MWh)

100% hedged

100% hedged

Renewables

PreussenElektra


Cash effective investments by unit


€m H1 2015 H1 2016 % YoY

Energy Networks 435 534 23

Customer Solutions 169 250 48

Renewables 457 473 4

Corporate Functions & Other 58 60 3

Consolidation 0 -5 -

PreussenElektra 8 11 38

Investments 1,127 1,323 17

Economic Net Debt

23

1. Net figure; does not include transactions relating to our operating business or asset management

2. Net of Swedish nuclear fund (ARO as of 31 Dec 2015)

3. END 31 Dec 2015 refers E.ON going concern, END 30 June 2016 without Liabilities of Uniper Group

(difference to pro-forma END figure shown on p. 13 reflects €0.7 bn loan to Uniper, which is excluded as

intercompany transaction under IFRS)

€m 31 Dec 2015 30 June 2016

Liquid funds 8,190 7,178

Non-current securities 4,724 4,662

Financial liabilities -17,742 -14,081

Adjustment FX hedging 1 218 388

Net financial position -4,610 -1,853

Provisions for pensions -4,210 -5,574

Asset retirement obligations 2 -18,894 -18,072

Economic net debt -27,714³ -25,499³

Financial Liabilities

24

Split Financial Liabilities1 Maturity profile (as of end H1 2016)2

1. As of 30 Jun 2016 based on Future E.ON

2. Bonds and promissory notes issued by E.ON SE, E.ON International Finance B.V. and E.ON

Beteiligungen GmbH (fully guaranteed by E.ON SE)

€ bn

2018

4.4

0.4

1.4

1.2

2.7

2017

0.1

2016 2020 2019 2021 2022 ≥2024 2023

2.3

€ bn

GBP

USD

EUR

YEN

Other

30 June 2016

Bonds -12.0

in EUR -4.7

in GBP -4.1

in USD -2.7

in CHF 0.0

in SEK 0.0

in JPY -0.2

in other denominations -0.3

Promissory notes -0.4

Commercial papers 0.0

Other liabilities -1.7

Total -14.1

Economic interest expense (net)

1. Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified asset.

Borrowing cost are (virtual) interest costs incurred by an entity in connection with the borrowing of funds.

(interest rate: 5.75%)

2. Includes mainly effects from tax related interest and interest rate changes of other long term provision

25

€m H1 2015 H1 2016 Difference

(in € m)

Interest from financial assets/liabilities -345 -311 35

Interest cost from provisions for pensions and similar provisions -40 -43 -3

Accretion of provisions for retirement obligation and similar provisions -400 -442 -42

Construction period interests¹ 58 19 -39

Other² -46 -33 13

net interest result -774 -810 -36

Martina Burger T +49 (201) 184 28 07

Manager Investor Relations [email protected]

Conny Ripphahn T +49 (201) 184 28 34


E.ON Investor Relations contacts

Dr. Stephan Schönefuß T +49 (201) 184 28 22


Alexander Karnick T+49 (201) 184 28 38

Vice President Investor Relations [email protected]

Florian Floßmann T+49 (201) 184 28 33

Head of Investor Relations [email protected]

26

mailto:[email protected]

mailto:[email protected]

https://workspaces.intranet.eon.com/sites/IR-Test-Zugang/Research/Forms/AllItems.aspx

Financial calendar & important links

Financial calendar

November 9, 2016 Interim Report III: January – September 2016

March 15, 2017 Annual Report 2016

May 10, 2017 Interim Report I: January – March 2017

May 10, 2017 2017 Annual Shareholders Meeting

August 9, 2017 Interim Report II: January – June 2017

Important links

Capital Market Story http://www.eon.com/en/investors/presentations/capital-market-story.html

Other Presentations http://www.eon.com/en/investors/presentations/special-topics.html

Annual Reports http://www.eon.com/en/about-us/publications/annual-report.html

Interim Reports http://www.eon.com/en/about-us/publications/interim-report.html

Shareholders Meeting http://www.eon.com/en/investors/shareholders-meeting.html

Facts & Figures http://www.eon.com/en/about-us/publications/facts-and-figures.html

Creditor Relations http://www.eon.com/en/investors/presentations/bonds.html

27

http://www.eon.com/en/about-us/publications/annual-report.html





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 the actual future results,

financial situation, development or performance of the company and the estimates given here. E.ON SE does

not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to

conform them to future events or developments.

Disclaimer

28

focused disciplined striving - e.on · 10% yoy improvement due to bond repayment in january 17% yoy...

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