20171108 9m 2017 results - e.on · relation to court case & kfk solution ... thereof...

9M 2017 Results

8th November 2017

Solid 9M 2017: well on track to achieve FY 2017 target E.ON 9M 2017 results

Solid EBIT development: + 13% Q3 2017 vs Q3 2016

Adj. Net Income up ~50% YoY

Economic Net Debt reduced to €19.7 bn (vs. €21.5 bn in H1 2017)

FY 17 guidance confirmed: EBIT €2.8-3.1 bn, Adj. Net Income €1.2-1.45 bn

Highlights

2

641

965

Adj. Net Income EBITDA EBIT

3,540

2,117 2,311

3,640

9M 2017 9M 2016

Key Financials1

€ m

1. Adjusted for non operating effects

– Lower prices & volumes, additional depreciation of asset retirement costs (ARC)

+ End of nuclear fuel tax, one-off effects in relation to court case & KFK solution

+ Higher regulated revenues in Germany and CEE

+ Tariff increases in Sweden

+ Price increases in Germany and UK – Higher costs (e.g. ECO2), PPM3 cap,

competitive dynamics in UK, Energy procurement crisis in Romania (Q1 2017)

– Arkona book gain in Q2 2016 (offshore)

Catch-up continues in Q3 2017

12

221

165

9M 2017 2.117

Corp. Functions & Other,

Consolidation -142

Renewables -61

Customer Solutions

-195

Energy Networks

9M 2016 w/o div. operations

2.282

EBIT1 9M 2017 vs. 9M 2016 € m

1. Adjusted for non operating effects, 2. Energy Company Obligation (ECO) 3. Prepayment Meter (PPM)

3

E.ON 9M 2017 results

Energy Networks

Customer Solutions

Renewables

Preussen Elektra

Key 9M Effects

Adjusted Net Income supported by lower interest accretion and taxes

9M 2017 € m

~€ 55m decline yoy mainly due to lower interest income

1. Adjusted for non operating effects, 2. Without interest accretion of nuclear provisions 4


EPS (€ per share)

965

Minorities -191

Income Taxes -386

Adjusted Net Income1

Profit before Taxes1 1.542

Other interest expenses -53

Interest on fin. assets/

liabilities2

-522

Group EBIT1 2.117

Tax rate of 25% (vs. 32% in 9M 2016)

~€600m improvement yoy mainly due to significant lower interest accretion of nuclear provisions and other interest expenses

Adjusted net income up 51% over prior year

€0.46

END improves significantly due to high cash flow and refund of nuclear fuel tax

+6.6

END 9M 2017

-19.7

-4.9

-3.6

-11.2

Others Divestments Pensions

0.4

10.2

0.2

Dividend

-0.5

ABB5

1.35

AROs6

-2.2

KFK payment to government

fund4

-10.3

Cash impact of NFT refund3

3.4

OCF2 Investments END FY 2016

-26.3 -0.9

-4.0

-21.4

0.6

3.5

€ bn

END1 9M 2017 vs. FY 2016

1. Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS ARO’s. 2. OCF adjusted for KFK and NFT effects, 3. Nuclear Fuel Tax (NFT) including positive interest income effect, before taxes and payment to minorities 4. Kommission zur Überprüfung der Finanzierung des Kernenergieausstiegs (KFK), 5. Accelerated Book Build (ABB), 6. Includes transfer of nuclear storage liabilities to government fund

AROs Pension provisions Net financial position

5


Operating Cash Flow: -3.3

Outlook 2017 confirmed

EBIT1

Adj. Net Income1

Outlook 2017


€1.2-1.45 bn

Effects for the remainder of 2017


6

– Lower hedging prices

– Additional depreciation of asset retirement costs

Energy Networks

Customer Solutions

Renewables

+ Regulatory effects (e.g. pensions), lower maintenance costs

+ Tariff increase in Sweden

+ Positive development in CEE

+ Price increases in Germany & UK, focus on efficiency

– Competitive dynamics in UK

+ Normalizing wind yields

€2.8-3.1 bn

Appendix

Financial Details

Contacts, Calendar & Disclaimer

1

2

8

E.ON 9M 2017 results Appendix: Table of Contents

1

11 Energy Networks 12

Customer Solution

13 Renewables 14 Preussen Elektra

9 Financial Highlights 10

Cash Conversion

15 Financial Appendix

Financial Highlights

€m 9M 2016 9M 2017 % YoY

Sales 28,198 27,937 -1

EBITDA 1 3,640 3,540 -3

EBIT 1 2,311 2,117 -8

Adjusted net income 1 641 965 +51

OCF bIT 3,827 -3,091 -181

Investments 1,981 2,222 +12

Economic net debt ² 26,320 19,699 -25

9


EBIT • Energy Networks: +18% YoY.

Higher regulated revenues in Germany and CEE and tariff increases in Sweden

• Customer Solutions: -36% YoY. Lower margins and increased competitors dynamic

• Renewables: -20% YoY. Arkona book gain in Q2 2016 and lower wind conditions

OCF bIT • Cash provided by operating

activities €6.3 bn below prior-year level

• Key drivers: €10.3 bn payment to nuclear fund (KFK3) (-) and €3.4 bn4 nuclear fuel tax (NFT) refund (+)

Adj. Net Income • €324 m above last years

9M result • Improvement YoY mainly

driven by significant lower interest accretion of nuclear provisions, other interest expenses and a tax rate of 25% (vs. 32% in 9M 2016)

1. Adjusted for non operating effects, 2. Economic net debt as per 31 Dec 2016 and 30 Sept 2017; Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS ARO’s 3. Kommission zur Überprüfung der Finanzierung des Kernenergieausstiegs (KFK) 4. Nuclear Fuel Tax (NFT) including positive interest income effect, before taxes and payment to minorities

1

Investments • Energy Networks: €864 m

(vs. €866 m YoY) • Customer Solutions: €350

m (vs. €392 m YoY) • Renewables: €961 m

(vs. €637 m YoY )

Capex

-2.2

OCF

3.5

Tax Payments

-0.3

Interest Payments

-0.3

OCF bIT4

4.2

Changes in WC

0.9

Cash Adjustments3

-0.2

EBITDA1

3.5

+120%

FCF

1.3

High cash conversion rate2 of 120% supported by strong operating cash flow

9M 2017 € bn

1. Adjusted for non operating effects, 2. Cash Conversion Rate: OCF bIT / EBITDA, adjusted for NFT and KFK effects, 3. Net non cash effective EBITDA items incl. provision utilizations, 4. Adjusted for KFK and NFT effects

10


1

Highlights

Segments: Energy Networks

• Germany:

+ Regulatory effects

+ Lower maintenance costs

• Sweden:

+ Tariff increases

• CEE & Turkey:

+ Tariff increases in Hungary

+ Higher allowed revenues in Czech Republic & Romania

Energy Networks

284

288 345

270

788

+18%

CEE & Turkey

Sweden

Germany

9M 2017

1,417

9M 2016

1,196

638


EBIT1 € m

€m

9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY

Revenue 10,288 10,797 +5 736 831 +13 1,183 1,239 +5 12,207 12,867 +5

EBITDA 1 1,084 1,217 +12 411 467 +14 428 451 +5 1,923 2,135 +11

EBIT 1 638 788 +24 288 345 +20 270 284 +5 1,196 1,417 +18

thereof Equity-method earnings 54 60 +11 0 0 - 47 -7 -115 101 53 -48

OCFbIT 1,809 2,106 +16 398 443 +11 394 424 +8 2,601 2,973 +14

Investments 517 396 -23 180 228 +27 169 240 +42 866 864 -0

TotalGermany Sweden CEE & Turkey

11

E.ON 9M 2017 results D

etai

ls

1

Segments: Customer Solutions

Customer Solutions Highlights

• Germany:

– Lower power margins due to increased TSO2 fees (Q1 2017)

– Lower gas margin due to price decrease in Nov 2016

+ Price increases as per Q2 2017

• UK:

– Higher ECO3 costs & FX weakening

– Price cap on PPM4 customers

– Competitive dynamics

• Other:

– Energy procurement crisis in Romania in Q1 2017

177

227

144

144

93

116

-36%

Other

UK

Germany

9M 2017

353

9M 2016

548

EBIT1 € m

1. Adjusted for non operating effects 2. Transmission system operator (TSO) 3. Energy Company Obligation (ECO) 4. Prepayment meter (PPM)

€m

9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY

Revenue 5,526 5,424 -2 5,676 5,083 -10 4,877 4,972 +2 16,079 15,479 -4

EBITDA 1 192 147 -23 297 218 -27 274 219 -20 763 584 -23

EBIT 1 144 93 -35 227 144 -37 177 116 -34 548 353 -36

thereof Equity-method earnings 0 0 - 0 0 - 8 11 +38 8 11 +38

OCFbIT 352 226 -36 283 229 -19 505 277 -45 1,140 732 -36

Investments 47 42 -11 158 142 -10 187 166 -11 392 350 -11

TotalUKGermany Other

12


etai

ls

1

• Offshore:

– Arkona book gain in Q2 2016

– Lower wind conditions in UK, FX (GBP) weakening

• Onshore:

+ COD of Colbeck’s Corner in May 2016

+ Higher production of US wind farms

– Lower wind conditions in Europe (esp. Italy & UK)

Segments: Renewables

Renewables Highlights

243186

6266

-20%

Offshore/Other

Onshore/Solar

9M 2017

248

9M 2016

309

EBIT1 € m


€m

9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY

Revenue 567 691 +22 455 439 -4 1,022 1,130 +11

EBITDA 1 229 209 -9 355 299 -16 584 508 -13

EBIT 1 66 62 -6 243 186 -23 309 248 -20

thereof Equity-method earnings 11 18 +64

OCFbit 525 540 +3

Investments 637 961 +51

Onshore Wind / Solar Offshore Wind / Others Total

13


etai

ls

1

Segments: PreussenElektra

PreussenElektra Highlights

357345

+3%

9M 2017 9M 2016

– Lower volumes due to Brokdorf outage

– Lower achieved power prices

– Additional depreciation of asset retirement costs (ARC)

+ End of nuclear fuel tax payments in 2016

+ One-off effects in relation to court case & KFK solution

Hedged Prices Germany (€/MWh) as of 30 Sept 2017

EBIT1 € m


€m

9M 2016 9M 2017 % YoY

Revenue 1,068 1,230 +15

EBITDA 1 410 497 +21

EBIT 1 345 357 +3

thereof Equity-method earnings 50 44 -12

OCFbIT 259 -7,069 -2,829

Investments 12 10 -17

PreussenElektra

14


32

28

27

37

2019

2018

2017

2016

94%

62%

100%

Det

ails

100%

1

Adjusted Net Income

€m 9M 2016 9M 2017 % YoY

EBITDA 1 3,640 3,540 -3

Depreciation/amortization -1,329 -1,423 -7

EBIT 1 2,311 2,117 -8

Economic interest expense (net) -1,118 -575 +49

EBT 1 1,193 1,542 +29

Income Taxes on EBT 1 -387 -386 +0

% of EBT 1 -32% -25% -

Non-controlling interests -165 -191 -16

Adjusted net income 1 641 965 +51


15


1

Economic interest expense (net) • Improvement mainly driven

by significant lower interest accretion of nuclear provisions and other interest expenses

Tax rate • Tax rate of 25% (vs. 32%

in 9M 2016)

Reconciliation of Adj. EBIT to IFRS Net Income

€m 9M 2016 9M 2017 % YoY

EBITDA 1 3,640 3,540 -3

Depreciation/Amortization/Impairments -1,329 -1,423 -7

EBIT 1 2,311 2,117 -8

Economic interest expense (net) -1,118 -575 +49

Net book gains 1 288 n/a

Restructuring -221 -173 +22

Mark-to-market valuation of derivatives 768 -453 -159

Impairments (net) -44 5 +111

Other non-operating earnings -79 3,298 n/a

Income/Loss from continuing operations before income taxes 1,618 4,507 +179

Income taxes -624 -604 +3

Income/loss from discontinued operations, net -10,293 0 +100

Non-controlling interests -5,351 197 +104

Net income/loss attributable to shareholders of E.ON SE -3,948 3,706 +194



1

16

Cash effective investments by unit


€m 9M 2016 9M 2017 % YoY

Energy Networks 866 864 -0

Customer Solutions 392 350 -11

Renewables 637 961 +51

Corporate Functions & Other 78 42 -46

Consolidation -4 -5 -25

PreussenElektra 12 10 -17

Investments 1,981 2,222 +12


17

1

Economic Net Debt1

1. Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS ARO’s, 2. Net figure; does not include transactions relating to our operating business or asset management


18

1

€m 31 Dec 2016 30 June 2017 30 Sept 2017

Liquid funds 8,573 14,252 5,450

Non-current securities 4,327 3,850 3,801

Financial liabilities -14,227 -14,691 -14,304

Adjustment FX hedging ² 390 311 158

Net financial position -937 3,722 -4,895

Provisions for pensions -4,009 -3,748 -3,586

Asset retirement obligations -21,374 -21,459 -11,218

Economic net debt -26,320 -21,485 -19,699

Economic interest expense (net)

€m 9M 2016 9M 2017 Difference

(in € m)

Interest from financial assets/liabilities -467 -522 -55

Interest cost from provisions for pensions and similar provisions -64 -61 +2

Accretion of provisions for retirement obligation and similar provisions -647 -49 +597

Construction period interests¹ 29 29 +0

Others 31 29 -2

net interest result -1,118 -575 +543

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: 5.6%)

19


1

Financial Liabilities

Split Financial Liabilities

€ bn

30 Sept

2017

Bonds -12.5

in EUR -5.7

in GBP -3.9

in USD -2.5

in JPY -0.2

in other denominations -0.2

Promissory notes -0.4

Commercial papers 0.0

Other liabilities -1.4

Total -14.3

1

20


2018

1.1 1.4

2019

1.8

≥2025

4.8

0.6

2024

0.4

2023 2022

0.8

2020

0.1

2021 2017

2.1

GBP EUR USD Other YEN

Maturity profile (as of end 9M 2017)1

€ bn

1. 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)

E.ON Investor Relations contacts

T +49 (201) 184 2806 [email protected]

Alexander Karnick T+49 (201) 184 28 38

Head of Investor Relations [email protected]

Martina Burger T +49 (201) 184 28 07

Manager Investor Relations [email protected]

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

Manager Investor Relations [email protected]


21

2

mailto:[email protected]



Financial calendar & important links

Financial calendar

March 14, 2018 Annual Report 2017

May 8, 2018 Interim Report I: January – March 2018

May 9, 2018 2018 Annual Shareholders Meeting

August 8, 2018 Interim Report II: January – June 2018

November 14, 2018 Interim Report III: January – September 2018

Important links

Presentations https://www.eon.com/en/investor-relations/presentations.html

Annual Reports https://www.eon.com/en/investor-relations/financial-publications/annual-report.html

Interim Reports https://www.eon.com/en/investor-relations/financial-publications/interim-report.html

Shareholders Meeting https://www.eon.com/en/investor-relations/shareholders-meeting.html

Bonds / Creditor Relations https://www.eon.com/en/investor-relations/bonds.html

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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.

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 or interim totals or differences or if 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.

Disclaimer

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20171108 9m 2017 results - e.on · relation to court case & kfk solution ... thereof...

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