Creating the future of energy. March 2019

Transcription

1 Growth Focus Discipline Creating the future of energy March 2019

2 Disclaimer This presentation contains information relating to E.ON Group ("E.ON") that must not be relied upon for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for any other purpose. By accessing this document you agree to abide by the limitations set out in this document as well as any limitations set out on the webpage of E.ON SE on which this presentation has been made available. This document is being presented solely for informational purposes. It should not be treated as giving investment advice, nor is it intended to provide the basis for any evaluation or any securities and should not be considered as a recommendation that any person should purchase, hold or dispose of any shares or other securities. The information contained in this presentation may comprise financial and similar information which is neither audited nor reviewed and should be considered preliminary and subject to change. Some of the information presented herein is based on statements by third parties. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purpose whatsoever. This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON 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 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. Neither E.ON nor any respective agents of E.ON undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any information or to correct any inaccuracies in any such information. Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals orinterim totals or differences orif numbers are put in relation) in this presentation may not correspond in all cases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts.

3 Strong delivery of FY 2018 results Highlights Key Financials 1 Top end of 2018 guidance range achieved Dividend 2018 increases >40% to 0.43/share m 3,074 2, bn bn 19.2! Preparation of takeover of innogy fully on track Upgrading network capex to fuel accelerated RAB growth 1,427 1, bn 16.6! Predictability Outlook confirmed, commitment to annual DPS growth! Visibility Fixed dividend of 0.46/share to be proposed for Adjusted for non operating effects EBIT FY 2017 FY 2018 Adj. Net Income Guidance Range Economic Net Debt 3

4 Continuous track record of delivery EBIT 1 vs. guidance Adj. Net Income 1 vs. guidance Deleveraging achieved Significant reduction of END 3.1bn bn 3.1bn bn 3.0bn bn 0.9bn 1.4bn bn 1.5bn bn 26.3bn ~ 10bn 19.2bn 16.6bn bn 5.3x 3.9x 3.4x Guidance Range 1. Adjusted for non operating effects. 4

5 E.ON standalone Accelerating power RAB growth Germany Sweden Czech Republic Power RAB ( m) Targeting upper end of growth range % +10% +8% +6% New Old Power Power RAB RAB 1 ( m) 1,2 New growth range % +30% +15% +25% +11% +15% +11% New Old Power RAB ( m) 1 New growth range % +25% +20% +16% +12% New Old ~8.0 ~ 8bn ~8.3 ~3.7 ~1.5 ~3.5 ~ Based on constant FX rates (SEK/EUR 2018: 10.26; CZK/EUR 2018: 25.65) 2. Growth includes revaluation of RAB from 2020 onwards according to new methodology (due to change in depreciation times). Effect ca. ~ 0.5bn in

6 E.ON standalone Capex split 2019 & 2020 Capex Capex Growth Increase in capex drives long-term EBIT growth ~ 3.6bn ~ 3.7bn Focus Capex focused on Energy Networks and infrastructure-like Customer Solutions Discipline Strict adherence to capital return targets (e.g. Group ROCE target 8-10%) Energy Networks Renewables Customer Solutions 1. Gross capex, not including divestments 6

7 E.ON standalone Customer Solutions with profitable customer growth outside UK Customer numbers EBIT Performance programs (upgraded) UK ~22m ~22m 479m 413m Cost Impact ~ 120m impact ~ 150m impact Germany +2% CS UK Other +1% CS ex UK +17% >2020 Growing customer base outside UK More than 100,000 additional customers in Germany In the UK, best performance among the Big Six in terms of customer numbers 1 Improving EBIT outside UK UK decline mainly caused by regulatory interventions and restructuring costs Pro-actively working on next wave of performance measures Programs in Germany and UK with target to offset margin pressure UK program already expanded during 2018 to mitigate SVT price cap impact 1. Source: Q Cornwall report 7

8 E.ON standalone Group guidance for FY 2019 Guidance FY 2019 ( bn) Guidance FY 2019 ( bn) Dividend ( /share) 0.46 EBIT 1 Actuals FY 2018 ( bn) 3.0 Adjusted Net Income 1 Actuals FY 2018 ( bn) 1.5 Proposed dividends 2 Dividend ( /share) Adjusted for non operating effects 2. Fixed dividend proposals to AGM to be paid in following year 8

9 E.ON standalone E.ON FOCUS Framework for Our basis for steering the company Capital Structure Strong BBB/Baa Return ROCE % Cash Cash conversion rate 2 80 % EBIT 3 Group + 3-4% (CAGR) EPS 3 Group % (CAGR) Dividend Annual DPS growth Fixed dividend 2019: Executive Compensation Closely linked to EPS target achievement and relative TSR 4 (in addition: share ownership obligations) 1. Based on EBIT (= pre-tax), 2. OCF bit divided by EBITDA, 3. Adjusted for non operating effects, FY 2018 guidance range as basis for medium-term outlook (CAGR), 4. Total Shareholder Return, 5. Fixed for FY 2019 (paid in 2020). 9

10 Transacting from a position of strength E.ON today E.ON today ( 18) Future E.ON ( 18) EBIT 3.0bn 1 ANI 1.5bn 1 END 16.6bn 1 Dividend Growth Regulated Top end of guidance Top end of guidance (+5% YoY) Leverage target of 3.4x achieved Committed to annual DPS growth: 0.43 for for 2019 Non-regulated 3-4% EBIT CAGR % EPS CAGR 3 E.ON standalone 1. E.ON standalone 2018 reported, 2. Future E.ON pro-forma 2018 (innogy data based on public information), based on existing portfolio (E.ON standalone), 4. RABs from different regulatory regimes are not directly comparable due to significant methodical differences. Group EBITDA 5bn 1 Energy Networks ~ 20bn RAB 1, 4 Customer Solutions ~ 8bn 2 ~ 34bn RAB 2, 4 >31m ~53m Customers 1 Customers 2 10

11 Takeover of innogy progressing well Antitrust approval process Preparation of integration of innogy into E.ON E.ON filed official notification with EU Commission end of January EU Commission initiated Phase II investigations on 8 th March Approvals for RWE part of transaction already received after Phase I Fully on track for closing during second half of 2019 Joint preparation work intensifying Work on future operating model nearly completed Synergies Target of m net synergies by 2022 confirmed 11

12 Schematic merger control proceedings Simplified overview of process steps of EU merger control proceedings (possible (partial) referrals to national authorities not taken into account 1 ) May 2018 Official filing of transaction with EU Commission on 31 st January 2019 Presentation of potential concerns regarding market segments Not before mid-2019 Expected EU Commission clearance decision Preparations Pre-notification Phase I (25 working days) Phase II (90 working days + extensions) Drafting notification documents Discussing draft notification, responding to information requests Finalizing notification Assessing notification Obtaining additional information requests Analyzing market segments in detail Negotiating potential conditions 1. Federal Cartel Office Germany, CMA, CEE 12

13 E.ON standalone Financial Liabilities Liquidity Sources (as of FY 2018) bn Liquid funds Non-current securities Maturity profile (as of end FY 2018) 1 bn 4.8 Syndicated loan (undrawn) 2.75 / $ Commercial Paper programs (undrawn) Acquisition facility (undrawn) 10 / EUR GBP USD JPY Other Bonds and promissory notes issued by E.ON SE and E.ON International Finance B.V. (fully guaranteed by E.ON SE) 13

14 Funding plan bn Indicative funding needs Financing considerations Funding public takeover offer and purchase of RWE s loan to innogy is covered by existing cash and RWE s payment 2019 funding needs: expected to be 2-3 billion 1.75 billion undrawn acquisition facility available E.ON maturities AROs innogy maturities 1 2 Maturities ( bn) E.ON ~1.1 ~1.4 ~0.8 innogy 2 ~2.0 ~0.8 ~1.7 Regular funding volumes determined by - refinancing of upcoming maturities - utilization of asset retirement obligations Future annual funding needs estimated: 2-4 billion 1. Asset retirement obligations ( AROs ) : Indicative utilization of 0.5 billion p.a. 2. Incl. senior bonds and 2019 RWE intercompany loan based on innogy s Fixed Income Investor Update 1 st June

15 Structural subordination E.ON SE E.ON Int. Finance B.V. innogy SE innogy Finance B.V. Bonds Bonds Guaranteed by E.ON SE Bonds Bonds Guaranteed by innogy SE Structural subordination may become a topic post closing To the extent necessary, E.ON has the choice among several mitigants for structural subordination: moving innogy bonds to E.ON level and replacing innogy guarantee with E.ON guarantee upstream guarantee from innogy to E.ON liability management at market E.ON will address structural subordination post closing of the innogy acquisition 15

16 Appendix

17 EBIT development solid despite operational challenges EBIT 1 FY 2018 vs. FY 2017 m FY 2017 Energy Networks Customer Solutions Renewables Corp. Functions & Other, Consolidation Non-Core FY ,989 3, Key FY Effects Energy Networks Customer Solutions Renewables Non-Core Germany: positive one-off effects in Q2 & Q3 2018, reversal of regulatory effects, disposal gas network HH, new regulatory period gas Sweden: power tariff increase, adverse FX dev. +/ +/ +/ + Germany: price increases in Q2 2017, restructuring charges UK: price increases in Q2 2017, competitive dynamics, regulatory effects, restruct. charges +/ Onshore: capacity additions in the US, support scheme expiries Offshore: capacity additions (Rampion), adverse wind conditions (esp. Q4) +/ +/ Preussen Elektra: one-off effects, lower achieved prices, higher volumes due to plant outages in 2017 Turkey: op. improvem., omission of book loss +/ + 1. Adjusted for non operating effects 17

18 E.ON standalone Segment EBIT 1 guidance FY 2019 Energy Networks Customer Solutions bn 0.4bn + + Germany: Further increase in RAB, efficiency scores Sweden: Power tariff increases (already implemented) + Germany & UK: Restructuring charges in 2018 UK: Regulatory interventions (i.e. SVT price cap) Renewables Non-Core bn 0.4bn +/ + Onshore: Capacity additions, support scheme expiries Offshore: Capacity additions (Arkona, Rampion) +/ + PEL 2 : Increased wholesale prices, higher D&A, one-offs Turkey: Operational improvements 1. Adjusted for non operating effects 2. Preussen Elektra 18

19 END decreases mainly due to sale of Uniper stake END 1 FY 2018 vs. FY 2017 bn +2.7 Pension provisions Net financial position END FY 2017 AROs 2.9 OCF Sale of Uniper stake -3.5 Investments -0.9 Dividend Divestments Liquidation of pension scheme in Q results in reduction of pension provisions limited effect on END AROs 0.9 Pensions -0.9 CTA 2 Funding Other END FY Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs 2. Contractual Trust Arrangement 19

20 Pro forma Economic Net Debt 2018 E.ON today 1 ( bn) Future E.ON 2, 3 ( bn) Includes successful monetization of Uniper shares ~16.6 ~ 2.8bn debt transferred to RWE ~32 Includes: Acquisition of 23.2% minority shares 1.5bn cash payment from RWE Further deleveraging measures to be realized in 19 ( bn) ~3.0 ~3.3 Nuclear provisions: ~ 0.9bn AROs (Renewables): ~ 0.9bn + Transfer of NS1 4 into CTA ~1 ~10.3 Tax equity liabilities (Renewables): ~ 0.6bn Economic Net Debt 2018 Pension provisions (Renewables): ~ 0.4bn Economic Net Debt 2018 Net financial position Provisions for pensions Asset-retirement obligations 1. E.ON 2018 reported, 2. Future E.ON pro-forma 2018 (innogy data based on public information), 3. E.ON will address structural subordination post closing, 4. Nord Stream I stake 20

21 Integration of innogy provides for strong synergy potential Estimated net synergies ( m) 2 Synergy focus 1, m ~100% Corporate Functions & IT Energy Sales & Customer Solutions Energy Networks ~55% ~25% ~5% Strong synergy potential of m ~5,000 FTEs affected (~7% of employee base) Synergy split ( million), 2. Future E.ON pro-forma 2018 (innogy data based on public information). 21