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First Quarter 2012 Results
Marcus Schenck, CFOMay 09, 2012
Cleaner & better energy
1
Financials
EBITDA1: +9% to €3.8bn
EBIT1: +10% to €2.8bn
Underlying net income1: +27% to €1.7bn
Underlying EPS1 2: 0.87 €/share
Operating cash flow: -51% to €0.4bn
Economic net debt: €-1.2bn to €-37.6bn
Q1 2012Financialhighlights
Outlook 2012:
EBITDA1: €9.6bn – €10.2bn (unchanged)
Underlying net income1: €2.3bn – €2.7bn (unchanged)
2013 & 2015: Unchanged
Outlook
1. Adjusted for extraordinary effects2. Based on number of shares outstanding (1.905 billion)
Positive start into 2012
2
MarketsEnergy markets Hedging (as per end March, 2012)
Sideways development of commodities and power prices
~ 54 €/MWh 1
~ 55 €/MWh 1
~ 43 €/MWh 1
~ 44 €/MWh 1
Nordic: Outright power hedging
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2014
2013
2012
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2014
2013
2012
= percentage band of generation hedged
Central Europe: Outright power hedging
~ 54 €/MWh 1
~ 44 €/MWh 1
30
40
50
60
70
2011 2012
€/M
Wh
EEX
UK
Nordpool
Spain
European wholesale power - next-year baseload forwards
0
10
20
30
40
50
2011 2012
€/M
Wh
0
30
60
90
120
150Germangas importpriceNCG Gas
CO2 - €/t
Brent -RHS $/bbl
Oil price and European gas prices
3
OperationsKey E.ON developments
Good progress on strategy implementation but some operational challenges
Elgin Franklin currently not producing; uncertainty on timing of restart
Delay of Skarv start up into Q4
Exploration &Production
Good wind load factor across regions and technologies
Average (net) load factor ~37% for E.ON’s global wind fleetRenewables
Brokdorf nuclear power plant in unplanned extended maintenance halt
No impact on Q1 but negative impact over Q2-Q4 compared to 2011Generation
MPX signing in April; deal expected to close at end of Q2
JV to deliver 11+GW 1 of efficient new capacity for Brazilian power marketOutside Europe
1. E.ON net capacity share ~33%
4
Key drivers of group EBITDA1,2 Q1 2012 vs. Q1 2011
1. Adjusted for extraordinary effects2. Individual effects rounded
Gas renegotiations with substantial positive impact
0
+9.9
01.01.2011-31.03.2011
01.01.2012-31.03.2012
3,470
- 250
+ 340
+ 70
+ 30
+ 20
+ 50
+ 70
3,770
EBITDA Q1/2011
Power: Price and volume effects
Other
Gas: Infrastructure revaluation effects
Trading: Proprietary trading
EBITDA Q1/2012
Russia: Increase in generation capacity
Gas: Reduced losses in supply & sales
UK: Portfolio and sales effects
First quarter in € million
-30 E&P: Lower production volumes
5
E.ON Group – From EBITDA1 to net income (1/2)First quarter in € million
--902-939Depreciation/Amortization/Impairments
+93,4703,770EBITDA1
-773-19Mark-to-market valuation of derivatives
--117-39Restructuring and cost-management expenses
-263,1232,309Income/Loss from continuing operations before income taxes
--276-60Other non-operating earnings
-67592Net book gains
--500-496Economic interest expense (net)
+102,5682,831EBIT1
+/- %20112012
Economic interest expense (+4)For detail see chart 24
Net book gains (-583)Prior year book gains mainly related to disposal of remaining Gazprom shares
Restructuring (+78)
1. Adjusted for extraordinary effects
6
Of which
-174157Non-controlling interests
-2,2671,719Attributable to shareholders of E.ON AG
-232,4411,876Net income
-1327Income/Loss from discontinued operations, net
-242,4281,849Income/Loss from continuing operations
--695-460Income taxes
-263,1232,309Income/Loss from continuing operations before income taxes
+/- %20112012
Income tax rateLower income tax and tax rate driven by earnings development, especially in Exploration & Production
E.ON Group – From EBITDA1 to net income (2/2)First quarter in € million
1. Adjusted for extraordinary effects
7
E.ON Group – Underlying net income1First quarter in € million
-2822% of EBT1
+132,0682,335EBT (earnings before tax)1
+271,3151,665Underlying net income1
--500-496Economic interest expense (net)
--587-517Income taxes on EBT1
-153
-939
3,770
2012
-166
-902
3,470
2011
-Non-controlling interests
-Depreciation/Amortization recognized in EBIT1
+9EBITDA1
+/- %
1. Adjusted for extraordinary effects
8
Operating cash flow – Reconciliation1
Impact of withholding tax payment to be fully recouped in H2
+9.9
01.01.2011-31.03.2011
01.01.2012-31.03.2012
Operating cash flow Q1/2011
Higher cash-effective EBITDA
Other
Optimization & Trading: Lower WC2 from gas and coal business
Russia & Czech Republic: One-off regulatory effect in 2011
Operating cash flow Q1/2012
UK: Absence of cash effective pension funding in 2011
Generation UK: Lower coal inventory
Region Germany: Settlement of EEG payables
Group: Lower interest payments
Subtotal operating cash flow Q1/2012
Withholding tax payments
910
+ 300
+ 150
- 200
+ 300
2,090
450
+ 290
+ 210
+ 210
- 130
-1,640
1. Individual effects rounded2.Working capital
First quarter in € million
9
E.ON Group – Economic net debtMarch 31, 2012, in € billion
Investments Operatingcash flow
Pension obligations Other
Divestments
-0.7+0.4
-1.2
+0.1
-36.4
Dec 31, 2011
-37.6
+0.2
Mar 31, 2012
Net debt development driven by extraordinarily low operating cash flow
10
2012 Outlook1
Range: €9.6bn – €10.2bn (unchanged)EBITDA2
Range: €2.3bn – €2.7bn (unchanged)Underlying net income2
Outlook 2012 unchanged1. Based on current portfolio2. Adjusted for extraordinary effects
Appendix
12
Global units Regional unitsSupport
functions
Group Management
Generation Renewables Gas Germany Other EUcountries Russia Support
functions1Trading New Build &Technology1
1. Not a reporting segment.
Global units Regional unitsSupport
functions
Generation Renewables Optimization&Trading Germany Other EU
countries Russia Supportfunctions1
Exploration&Production
New Build &Technology1
Group Management
2011
2012
Prop. Trading
Optimization
Transmission/Shareholdings/Other
Change in group structure as per Q1 2012
13
--153-35--137-17Group Management / Other
+9
+31
-3
-4
-12
-
-4
-23
+/-%
3,470
153
941
768
258
-369
396
1,460
2011
3,770
200
911
741
228
197
379
1,131
2012
+1738744Other EU countries
-5549519Germany
+102,5682,831Group total
+17124145Russia
134
125
283
916
2012
186
-434
308
1,250
2011
-28Exploration & Production
-Optimization & Trading
-8Renewables
-27Generation
+/- %EBITDA1 EBIT1
E.ON Group –EBITDA1 and EBIT1 by segmentsFirst quarter in € million
1. Adjusted for extraordinary effects
14
Main effects (in € bn):Nuclear (-0.4)
Lower transfer prices for volumes transferred to trading unit and lower volumes due to nuclear shut downs of Isar 1 and Unterweser, which were still producing in Q1 2011
Steam (-)Main positive: Higher gross margins in France and Spain
CCGT (-)Main positive: First time contribution from new build units Grain and Gönyü
1,131
-50
89
510
582
2012
1,460
-43
51
468
984
2011
-Other/Consolidation
-23EBITDA1
+75CCGT
+9Steam
-41Nuclear
+/- %
EBITDA1 by unit – GenerationFirst quarter in € million
1. Adjusted for extraordinary effects
15
379
174
205
2012
396
174
222
2011
-4EBITDA1
+0Wind, solar and others
-8Hydro
+/- %
Main effects (in € bn):Hydro (-)
Lower prices in Nordic partially offset by overall higher volumes [volumes in Italy and Spain down; volumes in Germany and Nordic up]
Wind and others (-) Higher volumes due to new capacity, better wind and better availabilityPositive prior year one-off not repeatedHigh Q1 2011 prices in US market not repeated
EBITDA1 by unit – RenewablesFirst quarter in € million
1. Adjusted for extraordinary effects
16
Main effects (in € bn):Optimization (+0.4)
Reduced losses in gas supply and sales as a result of contract renegotiations (+0.3)Improved margin in outright portfolio (+0.1)
Proprietary Trading (-)Infrastructure shareholdings / other / consolidation (+0.1)
Revaluation of participations (+0.1)
+65169280Infrastructure sharehodings / other / consolidation
--31-4Proprietary Trading
197
-79
2012
-369
-507
2011
-EBITDA1
-Optimization
+/- %
EBITDA1 by unit – Optimization & TradingFirst quarter in € million
1. Adjusted for extraordinary effects
17
Main effects (in € bn):North sea
Higher prices for gas and liquids more than offset by lower volumes
Yushno RusskojeHigher prices partly offset by higher cost
228
2012
258
2011
-12Exploration & production
+/- %
EBITDA1 by unit – Exploration & ProductionFirst quarter in € million
1. Adjusted for extraordinary effects
18
2012 2011 +/- %
Distribution 595 527 +13
Sales/Other 146 241 -39
EBITDA1 741 768 -4
Main effects (in € bn):Distribution (+0.1)
Mainly driven by higher grid revenues
Sales/Other (-0.1)Absence of positive non-periodic effects in 2012Increased grid tariffs not passed through to customers in first quarter
EBITDA1 by unit – GermanyFirst quarter in € million
1. Adjusted for extraordinary effects
19
Main effects (in € bn):Distribution (-0.3)
UK + Italy: Disposal of Central Networks and E.ON Rete (-0.2)Czechia: Mainly higher cost for renewables compensation (-0.1)
Sales (+0.2)UK: Mainly due to very weak Q1 2011 result and due to price increases in the further course of 2011
-3941911EBITDA1
+15157181Other/Consolidation
302
428
2012
94
690
2011
+221Sales
-38Distribution
+/- %
EBITDA1 by unit – Other EU countriesFirst quarter in € million
1. Adjusted for extraordinary effects
20
200
2012
153
2011
+31Russia
+/- %
Main effects (in € bn):Russia (-)
Mainly driven by higher results from new units not yet productive in first quarter 2011
EBITDA1 by unit – RussiaFirst quarter in € million
1. Adjusted for extraordinary effects
21
-36,385-37,598Economic net debt
524364Fair value of currency derivatives used for financing transactions1
-17,269-17,359Asset retirement obligations
-28,490-27,484Financial liabilities to banks and third parties
1,5951,640Less prepayments to Swedish nuclear fund
-3,245-3,921Provisions for pensions
-17,990-18,322Net financial position
-29,914-28,935Total financial liabilities
-1,424-1,451Financial liabilities resulting from interests in associated companies and other shareholdings
11,92410,613Total liquid funds and non-current securities
4,9045,165Non-current securities
7,0205,448Liquid funds
Dec 31, 2011Mar 31, 2012
E.ON Group – Economic net debtFirst quarter in € million
1. Net figure; does not include transactions relating to our operating business or asset management
22
+215870Russia
-23177137Maintenance investments
-47292154Other EU countries
-19-25Management Group / Others
+01,1641,164Investments
-1124123Germany
+49871.027Growth
Of which
130
78
357
277
2012
76
92
147
356
2011
+71Exploration & Production
-15Optimization & Trading
+143Renewables
-22Generation
+/- %
E.ON Group – Investments by unitFirst quarter in € million
23
Financial liabilities of the E.ON Groupin € billion
Maturity profile (as of 31 Mar 2012)3
4.84.7Other liabilities2
29.9
0.9
0.8
0.1
0.8
0.3
1.3
2.6
5.0
13.3
23.4
31 Dec 2011
0.7in JPY
0.1other currencies
28.9
0.2
0.8
0.3
1.3
2.5
5.0
13.3
23.2
31 Mar 2012
Promissory notes
Total
in GBP
Commercial Paper
in SEK
in CHF
in USD
in EUR
Bonds1
1) Thereof bonds issued by segments: March 31, 2012: €0.3bn; Dec 31, 2011: €0.3bn2) Thereof other financial liabilities of segments: March 31, 2012: €3.2bn; Dec 31, 2011: €3.2bn3) Bonds and promissory notes issued by E.ON AG or E.ON International Finance B.V. (fully guaranteed by E.ON AG)
0,0
1,0
2,0
3,0
4,0
5,0
2012 2013 2014 2015 2016 2017 2018 2019 2020 ≥2021
€ bn
EUR GBP USD CHF YEN Other
24
- 500
- 18
+81
-198
-40
-325
2011
- 496
-54
+77
-210
-32
-277
2012
+ 4
-36
-4
-12
+8
+48
Delta ‘12 / ’11
Capitalised interests2
Economic interest expense (net)
Other3
Accretion of provisions for retirement obligationand other provisions
Interest cost from provisions for pensions and similar provisions1
Interest from financial assets/liabilities
1. Net of expected return on plan-assets 2. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualified asset.
Borrowing costs are interest and other costs incurred by an entity in connection with the borrowing of funds. (IR-rate: 5%)3. Includes mainly effects from market valuation of interest derivatives and interest cost from tax provisions.
E.ON Group – Economic interest expense (net) First quarter in € million
25
Sascha BibertHead of IR T+49 2 11-45 79-5 42
[email protected] BlankenhornRegions/Sales, SRI, Retail, T +49 2 11-45 79-4 81Facts & Figures [email protected]
François PoulletGeneration, Gas T +49 2 11-45 79-3 32
Marc KoebernickRenewables, Trading T +49 2 11-45 79-2 39
Dr. Stephan SchönefußPolitics & regulation, Regions/Distribution T +49 2 11-45 79-48 08
Aleksandr AksenovOutside Europe, Russia T +49 2 11-45 79-5 54
Carmen SchneiderTechnology & Innovation, Roadshow planning & management, T +49 2 11-45 79-3 45Shareholder ID & Targeting [email protected]
E.ON Investor Relations Contact
26
E.ON IR - Reporting calendar & important links
2013 Annual Shareholders MeetingMay 3, 2013
Dividend PaymentMay 6, 2013
Interim Report I: January – March 2013May 8, 2013
Annual report 2012March 13, 2013
Interim Report III: January – September 2012November 13, 2012
Interim Report II: January – June 2012August 13, 2012
EventDate
http://www.eon.com/en/investors/26658.jspEquity Story
http://www.eon.com/en/investors/42341.jspSegment Stories
http://www.eon.com/en/corporate/1029.jspFacts & Figures
http://www.eon.com/en/corporate/1022.jspInterim Reports
http://www.eon.com/en/corporate/19886.jspAnnual Report
LinkContent
Important links
Reporting calendar
27
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 the actual future results, financial situation, development or performance of the company and the estimates given here. E.ON AG 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.
