Capital Markets Story March 2021 including FY 2020 financials Our purpose
Energy fuels human progress. At E.ON, we’re doing everything we can to make the future better and to enable our networks and energy solutions to connect people with one another. E.ON business model fully focused on the energy transition
Non-Core activities Core activities: Customer centric energy infrastructure
Up-stream & Power & Gas Supply Power Generation distribution business
E.ON fully focusing on the energy transition
Employees 2020 Dividend per share 2020 Group EBIT 2020 Adj. Net Income 2020 78,126 €0.47 ~€3.8bn ~€1.6bn
3 E.ON’s two core businesses
Energy Networks Customer Solutions
~€35bn Regulated Asset Base ~53m customers across Europe2 Germany €22.4bn Germany 13.9m Sweden €4.8bn UK 10.3m3 CEE & Turkey €7.7bn1 Other ~28m
~78 GW renewables capacity ~33% of adj. EBIT4 from decentral connected to E.ON networks energy infrastructure
~20% of renewable assets in Europe Market leading positions with 4x Top 1 and 3x Top 2 in energy retail connected to E.ON networks
1. 100% view for Slovakia and Turkey 2. Including at-equity participations; earnings of Customer Solutions business of Croatia, Slovenia and VSEH allocated to Energy Networks due to size 3. To standardize reporting, the definition of customers was adjusted 4. Adjusted for non-operating effects, FY 2020 4 Table of contents
1 FY 2020 update ………………..……………..……………………………………………………… 6
2 Investment highlights……………………...……………………………………………………… 22
3 Appendix ……………………………...……………………………………………………………………… 48 FY 2020 update Key focus areas of our new CEO
Growth Sustainability Digitalization
• Grow power RAB by 4-5% p.a. • Make ESG an anchoring • Apply technologies to until 2023 and beyond theme in everything we do radically change the way we • Grow Energy Infrastructure • Define clear path to net zero operate Solutions EBIT by 15% by 2040 • Drive innovative & digital (CAGR 2021-2023) • Increase transparency on business models • Capitalize on opportunities E.ON’s sustainability efforts • Achieve cost leadership from EU recovery and Green through digital platforms deal
>65% Listed on >GBP100m German onshore A list New: UK EBIT target 2021 connected to E.ON grid 7 Successful target delivery based on resilient business
EBIT1 Highlights € bn
~4.0 ✓ Strong operational performance in FY 2020 initial 3.9-4.1 ✓ Zero economic Covid and weather impact due Expected ~0.2 to recoverable earnings effect in networks Covid impact ~€300m 3.8 ✓ 2020 EBIT at top end of guidance range updated 3.6-3.8 ✓ Dividend proposal for FY 2020: €0.47/share
Guidance FY 20202 FY 2020 Recoverable Adj. FY 2020 in Networks
1. Adjusted for non-operating effects. 2. Initial EBIT guidance €3.9-4.1bn given at CMD 2020; Updated EBIT guidance of €3.6-3.8bn given in H1 2020 results presentation including Covid effect. 8 FY 2020 EBIT at upper end of guidance
EBIT1 FY 2020 vs. FY 2019 pro forma Key drivers € m FY 2019 • Covid-related lower volumes 4,065 – pro forma >-€200m Energy –• Germany: weather-related lower volumes recoverable volume Energy • -246 effects from Covid Networks – Sweden: lower WACC in new regulatory period Networks (~-€130m) and weather +• CEE & Turkey: strong operational performance Customer ~-€150m -87 Covid impact Solutions (sell-backs, volumes & bad debt) –• Covid: sell-back, volumes (B2B) & bad debt Corp. Functions Customer -3 –• Weather impact on volumes & Other, Cons. Solutions +• UK: restructuring benefits Non-Core +47 +/–• PreussenElektra: higher achieved prices, FY 2020 3,776 higher depreciation from purchase of Non-Core production rights +/–• Turkey Generation: Strong operational 1. Adjusted for non-operating effects; pro forma figures FY 2019, not audited performance, FX impact; one-off effect 9 Adjusted Net Income in line with EBIT development
FY 2020 € m
Group EBIT1 3,776
Economic -1,078 2 interest result Interest expense down by >€200m Profit 2,698 before Taxes1
Income taxes -653 Tax rate at ~24%
Minorities -407
Adjusted 1,638 Net Income1 0.63 EPS (€ per share) 1. Adjusted for non-operating effects 2. Versus FY 2019 pro-forma 10 Economic Net Debt (END) improved due to strong Operating Cash Flow and divestments
€ bn
-8.7 -8.8 -8.1 Asset Retirement Obligations (ARO) Driven by strong -8.6 Pension provisions asset performance Net financial position and additional contributions -24.0
+0.1 -0.5 +0.5 -0.4 -40.7 -24.6 -0.3 +1.6
-42.1 END OCF Net Investments Pensions2 Other (incl. AROs) END 1 9M 2020 4Q 2020 4Q 2020 FY 2020 11 1. Net of divestments 2. Actuarial interest rates for German pensions at 0.8% (vs. 1.0% @ YTD 30.09.2020), for UK pensions at 1.4% (vs. 1.6% @ YTD 30.09.2020) Attractive Group earnings growth driven by core business
EBIT1 Mid-term outlook core EBIT1 € bn CAGR 3.8–4.0
3.8 0.4
3.3 11-13% Core CAGR
2020 2021 2022 2023 2021-2023
Guidance: Core Non-Core2 1. Adjusted for non-operating effects 2. In 2023 Non-Core consists of Enerjisa Üretim only – no production of PreussenElektra 12 Earnings growth resulting from both Energy Networks and Customer Solutions
Energy Networks EBIT1 Mid-term outlook1 Customer Solutions EBIT1 Mid-term outlook1 € bn € bn 0.8-1.0 3.3 2.9-3.1 0.7 0.5 0.4 0.1 0.1
2.2 0.4
2020 2021 2021-2023 -0.1 2021 2021-2023
2020
Guidance: Germany Sweden CEE & Turkey Guidance: Germany UK Benelux Other 1. Adjusted for non-operating effects 13 Strong double digit EPS growth
Adjusted Net Income1 Earnings per share1 Mid-term outlook1 € bn € CAGR 1.7-1.9 1.6
0.63 0.65-0.73
Payout ratio 76% 12-14% 2020 2021 2020 2021 2021-2023
Refinancing benefits until 2023 of ~€150m2
1. Adjusted for non-operating effects 2. Amount of refinancing benefits depends largely on refinancing conditions at time of bond issuance 14 80-85% of investments aligned with EU taxonomy
Investments 2021 Investments 2021-2023 € bn € bn
~80% 80-85% 1 EU taxonomy 1 EU taxonomy ~4.9 aligned2 ~14 aligned2
Energy Networks Customer Solutions Other3
1. Cash-effective investments including Corporate Functions & Other and Non-Core 2. Based on EU taxonomy eligible Capex 3. Corporate Functions & Other and Non-Core 15 E.ONs sustainability focus in financing
Second Party Opinion • New Green Bond Framework fully aligned with EU Taxonomy1 ✓ and ICMA Green Bond Principles
• E.ON is the largest corporate Green Bond issuer in Germany with €4.6bn Green Bonds outstanding
2021 expected below annual funding range • Annual funding needs of €2-4bn • Going forward >50% of funding by EU Taxonomy aligned Green Bonds
• Sustainability linked Revolving Credit Facility of €3.5 billion • Margin partially linked to ESG ratings2 (“green RCF”)
1. Draft delegated act as published in November 2020 2. ESG ratings of three established ESG rating agencies: MSCI, ISS ESG and Sustainalytics 16 Clear set of deleveraging measures
Economic Net Debt € bn FY 2020 “Beat the • Further outperform the provisions by ~€0.5bn until 2022 -8.7 provisions”
“Focus on the • Asset performance to outperform the liability -8.1 long end” • Interest rate sensitivity of GER pensions1: +50bps → - ~€1.5bn
• Working Capital optimization program of ~€1.0bn “Manage for 2 cash” • ~100% Cash conversion rate -24.0 • Disposal proceeds ~€1.5bn (e.g. restructuring Hungary, disposal Belgium) -40.7 • Settlement of nuclear lawsuits: Cash inflow of ~€500m3 expected
Asset Retirement Obligations Pensions Net financial position
1. Net sensitivity of DBO and assumed interest rate sensitivity of German plan assets. UK pension obligations largely funded 2. Cash Conversion Rate (CCR) = (OCF bIT+ 17 provision utilization nuclear)/EBITDA 3. Including compensation for frustrated investments of €42.5m Accelerated progress towards debt factor target of 4.8x – 5.2x
Debt factor1
Guidance range for 5.9x debt factor of 4.8x-5.2x in line with rating target
Strong 5.2x BBB/Baa rating target 4.8x
2020 2021 2022 2023
1. Economic Net Debt/EBITDA, EBITDA adjusted for non-operating effects. Based on interest rates as of March 22, 2021 with pension discount rates of 1.2% and 1.8% for Germany and the UK respectively 18 Dividend commitment fully in line with deleveraging
EPS1 above DPS growth… …lowers payout ratio… … allowing deleveraging and sustainable dividend growth
5.9x Strong BBB/Baa rating target 76% Payout ratio 4.8x - 5.2x
2021 2022 2023 2020 2023 2020 2022 2023
1. Adjusted for non-operating effects 19 Strong mid-term delivery plan updated until 2023
Dividend per share (DPS) growth up to 5% p.a.
1 1 Group EBIT growth Group EPS growth 8-10% CAGR 12-14% CAGR
Average cash conversion Capital structure with strong 2 rate of 100% BBB/Baa rating
1. Adjusted for non-operating effects, 2021-2023. 2. Excluding provision utilization for nuclear decommissioning, average for 2021-2023 20 Guidance overview
€ bn FY 2020 2021 2021-2023 EBITDA1 6.905 7.2-7.4 2-3% CAGR Energy Networks 5.199 5.0-5.2 Customer Solutions 1.006 1.4-1.6 Non-Core 0.925 0.8-1.0 Corporate Functions & Other -0.225 ~-0.2 EBIT1 3.776 3.8-4.0 8-10% CAGR Core EBIT 3.363 11-13% CAGR Energy Networks 3.253 2.9-3.1 Customer Solutions 0.454 0.8-1.0 Non-Core 0.413 0.2-0.4 Corporate Functions & Other -0.344 ~-0.3 ANI1 1.638 1.7-1.9 12-14% CAGR EPS1 €0.63 €0.65-0.73 12-14% CAGR Dividend €0.47 up to 5% p.a. up to 5% p.a. Capex2 4.171 ~4.9 ~14 Energy Networks 3.386 ~3.3 ~10.3 Customer Solutions 0.790 ~1.0 ~2.8 Debt factor 5.9x 4.8x-5.2x
1. Adjusted for non-operating effects 2. Cash-effective investments including Corporate Functions & Other and Non-Core 21 Investment highlights Why invest in E.ON?
We commit to a sustainable dividend per share growth of up to 5% annually until 2023 and further 1 growth beyond
We are the green investment opportunity and we Dividend enable the energy transition growth 2 Customer centric energy We focus on customer centric energy infrastructure infrastructure 3 which is the core of our resilient portfolio
Sustainability Performance Performance culture is part of our DNA and we 4 continuously deliver on operational excellence 23 We commit to annually grow the dividend, also beyond 2023
Dividend per share €
1 0.43 0.46 0.47 0.30 0.21
2016 2017 2018 2019 2020 2021 2022 2023 Growth beyond ✓ We delivered… …and will continue to deliver 1. Proposal to 2021 AGM 24 Why invest in E.ON?
Dividend growth
Customer centric energy infrastructure
Sustainability Performance
25 Net zero is the new normal – E.ON is driving carbon reduction
Global challenges E.ON’s contribution Focus SDGs5
IPCC1 long term goal to limit global Avoided emissions together with our clients
warming to 1.5°C 2020: ~100m tons CO2
German greenhouse gas emissions to be cut 2 One out of five renewable by 55% by 2030 assets in Europe3 connected to E.ON’s grids
Green Deal: The EU will be climate neutral E.ON will become carbon neutral4 by 2050 by 2040
1. Intergovernmental Panel on Climate Change 2. Pre Green Deal 3. Considering EU27 4. Carbon neutrality by 2040 (Scope 1 and 2), 75% carbon reduction by 2030 (Scope 1 and 2), 50% carbon reduction (Scope 3) by 2030, carbon neutrality by 2050 (including Scope 3). Base year: 2019 pro forma 5. UN Sustainable Development Goals 26 Achievements across all sustainability dimensions
2020: reduction in Scope 1 & 2 & CO2 7% Significant progress in integrating ~100m tons of CO2 avoided with our clients climate & non-financial risks
80-85% Reporting integrated EU taxonomy aligned capex (2021-23)1 ✓
>65% German onshore & >50% German renewables connected to E.ON grid Listed on prestigious CDP A-list
female representation in management board2 20% Preparation to receive validation 21% women managers
New remuneration system3 aligned with ESG targets ✓ Paper published Just transition
1. Based on EU taxonomy eligible capex 2. From April 1, 2021 3. Proposal for vote at 2021 AGM 27 We take sustainability as our guiding principle
WE enable Europe to become carbon WE foster a diverse and neutral inclusive culture
-75%1 by 2030 Scope 1 & 2 CO2 -100%1 by 2040 32% proportion of women in management positions2 by 2026 -50%1 by 2030 Scope 3 -100%1 by 2050
WE care for our people Reduction of serious incidents and fatalities frequency to 0.1 by 20253
1. With reference to 2019 figures: Scope 1: 3.88m tons CO2eq, Scope 2: 4.82m tons CO2eq and Scope 3: 120.27m tons CO2eq 2. Reflection of overall proportion of women in the workforce 3. Serious incidents and fatalities frequency (SIF) was 0.12 in 2020 28 Decentralization means digitalization and efficiency potential
The complexity within DSOs is increasing ... Decentralization drives system complexity E.ON provides digital solutions to capitalize on it
Energy Management System EnergieMonitor & Klima-Navi Regional Energy Market Customer Smart Home Transparency about CO2-footprint and CO Footprint interface Storage 2 App impact of energy transition to (data usage) municipalities and customers
Asset Control Systems Local Energy System
Predictive System Predictive Maintenance Maintenance Flexibility Network Data-driven decisions with Data, AI Control operation Center (data distribution) machine learning and artificial Asset Automated Grid intelligence Monitoring Planning Generation Network Buildings Grid Smartification Physical Intelligent substation and sensors assets (data generation) E-mobility collects real-time data from networks to Broadband enhance grid management 29 Why invest in E.ON?
Dividend growth
Customer centric energy infrastructure
Sustainability Performance
30 Infrastructure is at the heart of E.ON’s capital allocation
~10% Energy Retail 2 Customer Solutions1 retail investments4 Decentral energy infrastructure3 ~90% Infrastructure 4 Energy Networks1 Regulated energy networks investments
1. IFRS segments used in external reporting 2. Includes Energy Sales and Services and New Solutions 3. Includes Energy Infrastructure Solutions 4. Excludes investments in Corporate Functions & Other and Non-Core 31 Energy transition driving multi-decade investment opportunities
Industry investments in German power distribution networks excluding Green Deal upside € bn
Drivers
6.7 4.7 2.5
20102009 2020 2030 2050 Source: Historic values: Bundesnetzagentur Monitoringbericht 2019. Future outlook: dena-Leitstudie Integrierte Energiewende 32 1. Assuming 2% inflation beyond 2020 E.ON is the leading energy network company in Northern and Central Europe
E.ON Regulated Asset Base (RAB) – regional split € bn
Total RAB1, 2 34.9 Sweden Germany CEE3,4 &Turkey4
Power RAB Gas RAB 4.8 22.4 7.7
1. RAB is the value of all distribution assets determined by the regulator. In general, RABs from different regulatory regimes are not directly comparable due to significant methodical differences. These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network connections. 33 2. Differences may occur due to rounding 3. Central Eastern Europe including: Czech Republic, Hungary, Poland, Romania, Slovakia 4. 100% view for Slovakia and Turkey Long-term RAB growth with further upside potential
E.ON Regulated Asset Base1 growth € bn Power 34.9 4-5% • Multi-decade growth potential CAGR2 stemming from mega-trends
Gas Power 29.4 • Optimizing our existing gas asset base with limited investment needs • Future growth option from hydrogen Gas 5.5
2020 2023 Beyond
1. RAB is the value of all distribution assets determined by the regulator. In general, RABs from different regulatory regimes are not directly comparable due to significant 34 methodical differences. These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network connections, including 100% view for Turkey and Slovakia. 2. Relates to power RAB, assumes constant year-end 2020 FX-rates, excludes Hungarian restructuring Three years of regulatory stability
Regulatory periods per country 2021 2022 2023 2024 2025 2026 2027 2028
Germany (Gas) Slovakia1 Poland2 Turkey Czech Republic Hungary3 Romania
Germany (Power) ~90% of the Energy Networks EBIT4 is highly visible until 2024
Sweden
1. Length of upcoming regulatory period still under discussion 2. Regulatory period: 2016-2020, prolonged by ‘transition’ year 2021 and most likely also 2022 35 3. Regulatory period power starting Apr 1st, 2021. Regulatory period gas starting Oct 1st, 2021. 4. Based on Energy Networks EBIT 2020, adj. for non-operating effects We successfully manage regulatory reviews
Regulatory updates in CEE & Turkey from 20211 onwards
new WACC: CZ Adjusted RAB -1.4pp ~6.5% (nominal) Increased eligible Capex and Opex new WACC: HU -1.3pp ~3.4% (real) Introduction of regulatory account in Earnings Poland successfully new WACC: Bonus WACC of 1-2pp for smart retained TR -1.3pp ~12.3% (real) investments in Poland and Romania
new WACC: Incentives for grid quality and EU RO +0.7pp ~6.4% (real) funding
1. Romania from April 2020 onwards 36 Energy Networks Germany - Earnings components
Illustrative average EBITDA1 split (2020-2023) Illustrative average EBIT1 split (2020-2023)
Regulated return Regulated return and depreciation2 0 - 10% and depreciation2 0 - 15%
~30% ~10% ~35% ~10% ~50% ~60% ~10% ~10% ~15% ~15%
Regulated income Regulated income from participations4 from participations4
Operational Efficiency Adjacent business3 Other earnings / temporary effects
1. Adjusted for non-operating effects 2. Includes return on RAB, difference between regulatory and IFRS D&A and revenues for grid expansion 3. Adjacent business includes 37 e.g. water business, broadband, smart meter and technical network services 4. Consolidated at-equity / at-cost Exemplary earnings components – more than return on RAB
Illustrative EBIT composition1,2
CAPEX driven Performance driven Timing and other effects Non-regulated
70% - 80% 5% - 10% 5% -10% ~5%
Base allowed Depreciation OPEX performance & Timing effects Other Additional Other EBIT Energy earnings difference incentive earnings (regulated) businesses (non-regulated) Networks (RAB x WACC) (Reg. – IFRS) (Excl. Germany)
1. Consolidated EBIT composition for all Energy Networks countries (excluding Germany and Croatia). 38 2. Turkey, Slovakia ZSE and VSE with 100% view, while excluding CS business. Impact of rising interest rates and inflation on regulated earnings
Time horizon Impact of increasing interest rates and inflation
• Allowed WACCs/RoE are usually adjusted only once per regulatory period Short-term • Inflation-indexation in most countries with t+2 time-lag
• Allowed WACCs/RoE to gradually increase (with start of new regulatory periods) Mid-term due to higher interest rates • Positive effect from inflation-indexation (double digit million effect p.a.)
• Higher allowed WACCs/RoE with start of new regulatory periods in all countries Sensitivities Long-term • Allowed WACCs/RoE : +1% in regulatory return rate leads to triple digit million Euro increase of allowed returns p.a. • Inflation-indexation: +1% in inflation leads to a high double digit million Euro increase p.a.
39 Key events for upcoming 4th German electricity network regulation period
December 2020 August 2021 BNetzA has tendered a Based on experience from the 3rd consultancy opinion on regulatory period we expect the “Wagniszuschlag” BNetzA to publish their preliminary (MRP x ß) decision on the RoE together with the consultancy opinion
Dec 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
May 2021 October/November 2021 Following final RoE The consultancy work should Final decision on the RoE decision be finished according to the for the 4th regulatory BNetzA tender period to be taken by Potential BNetzA appeal process
40 E.ON‘s view on hydrogen
What we want… What we see today… What we are doing…
Provide clean & affordable Hydrogen (H2) will be necessary to Developing 50+ decentral, integrated energy to our customers – today H2 achieve deep decarbonization hydrogen initiatives & projects to and in the future meet customer demand
Shaping the energy transition – H2 will play a significant role in Developing future heating systems by building a smart and flexible inevitable future energy imports to overcome decarbonization challenges energy system which is resilient, secure and efficient Support schemes and targets for Preparing our infrastructure to electrolyzer capacity (40 GW by become hydrogen ready 2030) will accelerate H2 market development in the EU Partnering to shape the energy transition (e.g. Clean Hydrogen Alliance & Ramp-up starts today via setting National Hydrogen Council) right boundary conditions
41 Energy Infrastructure Solutions (EIS) Core part and growth driver of Customer Solutions
Core regions
Growth regions Customers >1.5 m # of plants ~4,100
Heat, chill & steam production ~19 TWh
Electricity production ~12 TWh
Heat, chill, steam grids ~5,000 km
Sales 2020 ~€ 2 bn
EBIT CAGR 2021-2023 ~15% Serving customers all over Europe across 15 countries 42 EIS provides energy solutions to four customer segments based on three business models
Core customer Public & Real estate Commercial Industry segments municipal entities
Core solutions Solutions
Energy Waste heat Local energy Digital Heat Cooling Power efficiency recovery networks services E-mobility
Core business Full service contracting Design, build & operate Operation & maintenance models
43 Future Energy Home (B2C Solutions) New growth area in Customer Solutions
2020 actuals Future Energy Home regions Hardware devices1 installed ~100k
Service & maintenance contracts >1.2m
2 Yearly CO2 savings >325 kt
E.ON Home app customers3 >10,000
Sales 2020 ~€ 0.7 bn
EBIT CAGR 2021-2023 >25% Market leading in Europe serving customers in 10 countries 1. Including PV & battery, heating & cooling devices (boiler, heat pump, AC) 2. Savings by customers due to installed devices 3. Connected customers 44 Future Energy Home and eMobility enable customers to reduce their CO2 footprint with sustainable energy solutions
PV & Storage PV & Storage Sale and installation of PV & battery with service/energy bundles E.ON Home App Battery sales more than doubled in 2020 EV charging Home Heating Home Heating Sale and installation of efficient heating with service & maintenance Heat pump sales more than doubled in 2020 Energy bundles Services & Maintenance E.ON Home app
B2C: Wallbox, services, Home energy management app to control energy flows in the home energy (PV & battery, heat pump, air conditioning, EV charging, smart meter) B2B/Cities: Design, build & eMobility operate charging solution B2C: Wallbox and services with integration in Future Energy Home ecosystem eMobility infrastructure and time-of-use energy tariffs (charge on the road) B2B/cities: Design, build & operate charging solutions Operating >13.000 charging points across Europe 45 Customer numbers B2B & B2C
Customer accounts1 Thereof: electricity customers1 million million -0.2% 41.2 +0.2% 41.3 52.7 52.6 11.6 11.7 6.6 6.2 2.5 2.5 13.8 13.9 10.7 10.8 9.8 10.1 10.9 10.3 FY 2019 FY 2020 4.6 4.6 Thereof: gas customers1 million 11.5 -0.9% 11.3 13.6 13.7 2.2 2.2 4.3 4.1 9.8 10.1 2.1 2.1 FY 2019 FY 2020 2.9 2.9 FY 2019 FY 2020 Germany2 UK3 Benelux4 Other5 Turkey
1. Including at-equity participations, earnings of Customer Solutions business of Croatia, Slovenia and VSEH allocated to Energy Networks due to size 2. 2019 adjusted due to 46 the disposal of substantial parts of the heating customer business 3. To standardize reporting, the definition of customers was adjusted for 2019 4. 2019 adjusted for the acquisition of the Dutch energy utility VandeBron 5. 2019 adjusted due to the disposal of EKER in Hungary and first-time consolidation of VSEH in Slovakia Why invest in E.ON?
Dividend growth
Customer centric energy infrastructure
Sustainability Performance
47 Synergy delivery fully on track
Net synergy targets1 Synergy delivery by division €m ~780 ~740 29% ~310 52%
130✓ 40✓ 19% 2019 2020 2021 2022 2023 2024
Customer Solutions ✓ Transaction completely digested Energy Networks ✓ Central voluntary leave program successfully concluded Central Functions, IT and Other ✓ Future operating model successfully implemented
1. Net accretive to EBIT, EBIT adjusted for non-operating effects and before implementation costs (implementation costs not included in adjusted EBIT) 48 UK transformation ahead of plan
2020 March 2021 2022
Migration of npower B2C + SME ✓
Wind down npower operations
Migration of E.ON UK B2C + SME
Ramp up of E.ON Next
Key achievements Priorities for 2021 • npower wind down ahead of plan • Migrate remaining <10% npower customers • >2 million customer accounts migrated • Wind down all npower operations
• E.ONnext operations initiated • Speed up E.ON UK account migration 49 Renewal of IT architecture to drive operational excellence in Customer Solutions
Germany: Substantial ramp up of contracts to digital platform UK: Over 2mn accounts now migrated to the E.ONnext platform million contracts of E.ON core brand million contracts All E.ON UK contracts >8 migrated All npower ~6.5 ✓ contracts >4.0 ✓ ~4.5 migrated ✓ >2.0 >1.0✓
FY 2020 Mar 21 FY 21 FY 22 FY 2020 Mar 21 Q2 21 FY 22
• Already today at competitive Cost-to-Serve level • High customer satisfaction at E.ONnext with Trustpilot rating of 4.4 (out of 5) • Ambition: reduction to market leading level at low teens (€/customer) • E.ON UK migration starting in Q2 2021
50 E.ON’s performance culture adds sustainable value to businesses and customers
German power network efficiency scores Sweden power network efficiency scores
>€600m additional revenues 100% in regulatory period1 E.ON grids
100% Very efficient 85% 95% Industry average 94%
Efficient 70% 8/9 E.ON grids 1/9 E.ON grids
8/9 E.ON networks obtain a 100% efficiency score, All E.ON grids considered very efficient, with 2/3 with 3 obtaining a super efficiency bonus being 100% efficient
1. Based on ~€4bn allowed power cost base relevant for efficiency factor 51 Appendix
52 E.ON business segmentation
IFRS reporting divisions Energy Networks Customer Solutions Corporate Non-Core Functions & DE SWE CEE1 & TR DE UK Benelux2 Other3 PE4 TR Gen5 Other
Power grid Energy Energy sales and Gas grid Infrastructure services Solutions New Additional businesses (EIS) Solutions
Regulated Decentral energy Energy networks infrastructure retail
Infrastructure
1. Central and Eastern Europe, including Czech Republic, Hungary, Poland, Romania, Slovakia, Croatia and Slovenia 2. Belgium, The Netherlands and Luxemburg 53 3. Including Czech Republic, Hungary, Italy, Poland, Romania, Sweden, Turkey 4. PreussenElektra 5. Turkey Generation Climate targets and progress on GHG emissions E.ON‘s commitment E.ON‘s progress Climate targets communicated GHG emissions development (million metric tons) Scope 1 Scope 2 Scope 3
-10%
Scope -75%1 by 2030 120.1 108.1 1 1 & 2 -100% by 2040 -7% -8% 44.3 4.8 4.5 41.8 3.9 3.6 1.9 70.8 61.3 1.8 4.5 4.2
1.9 1.7 -50%1 by 2030 Scope 3 20192 2020 20192 2020 20192 2020 -100%1 by 2050 Fuel combustion (building heat, company vehicles) Power distribution losses5 Power/heat generation (leased assets) and other3,6 Power and heat generation3,4 Purchased power Purchased goods and services Fugitive emissions Combustion of natural gas sold to end-customers7 Purchased power sold to end-customers7
1. With reference to 2019 figures: Scope 1: 3.88m tons CO2eq, Scope 2: 4.82m tons CO2eq and Scope 3: 120.27m tons CO2eq 2. Prior-year figures have been adjusted due to the subsequent adjustment of certain figures. 3. From 2019 onward, emissions from power and heat generation are divided into emissions from plants owned and operated by E.ON (Scope 1) and emissions from plants leased to, and operated by, customers (Scope 3). 4. The Greenhouse Gas Protocol and DEFRA attribute no direct CO2 emissions to energy generated at renewable facilities and nuclear power stations. This figure includes emissions from power and heat generation from CHP assets leased to B2B customers since 2018. 5. Based on the emission factors of the national electricity mixes for specific regions. 6. Other incl. e.g. employee commuting and business travel 7. Scope 3 emissions from purchased power and the combustion of natural gas sold to end-customers are from energy sold to residential 54 and B2B customers only. Energy sold to sales partners and the wholesale market is not included. Sustainability reporting 2020
Integration Sustainability Report 2020 will Successful integration in content and data collection process innogy be fully consolidated reporting
2019 2020
• In 2020 we intensified our efforts to manage the interface between sustainability Risk Significant progress in integrating and risk management. Management climate and non-financial risks • Climate risk assessment was organizationally integrated into the Group’s & TCFD into risk management processes Enterprise Risk Management (“ERM”).
• Social impact of climate action has the power to either accelerate or prevent New climate paper published to Just progress to decarbonize the energy sector support the annual climate- Transition • Just Transition: Just Transition ensures that social issues are taken into related TCFD disclosure and account in moving to a low carbon economy. transparency on Just Transition
• SASB: Industry-specific standards that identify the subset of sustainability- Initiated reporting against SASB SASB related risks and opportunities most likely to affect a company’s financial in Sustainability Report 2020 Reporting condition, operating performance or risk profile (excluded from auditors • Interest in SASB by investors & capital market on the rise assurance)
Focus SDGs of core business Further contribution Impact on E.ON‘s business with strong SDG positive impact on key SDGs 55 E.ON‘s sustainability ratings
Rating: AA Text 1 Rated on a AAA to CCC scale High relative performance E.ON listed on
ESG Risk Rating: 23.6 Text 1 Rated on a 0 to 40+ scale Rank 8 out of 55 in subindustry group Rating: 61 Scored on a 0 to 100 scale Text 1 Rank 19 out of 61 in industry group, highest A List performance level (“Advanced”) Leadership score Rating: C+ Top 5% Text 1 Rated on a D- to A+ scale Decile rank 2 in industry group, high relative performance 56 Building blocks of allowed revenues in Germany
Schematic illustration for 2020 (power & gas) € bn ~21.2 Gas ~1.1 (New) Totex indexed to Gas ~3.4 CPI and subject to Thereof: Thereof: (Old) general and individual ~4.0 power ~8.5 power efficieny targets ~0.7 gas ~1.1 gas
Power ~10.2 (New) ~9.6
~4.7 ~6.5 Power 40% Cap Opex ~3.0 (Old) ~1.7 Capital Costs Regulated asset Debt base2 Regulated equity Total allowed Adjustment of Allowed revenues base1 base cost base revenues, lagged Old assets: current (related to actual (related to regulatory (Totex) recoveries and capital structure, costs; new assets: capital structure, pass-through items historic costs minimum 60%) maximum 40%) 1. Old assets are those capitalized before January 1, 2006. New assets are those capitalized after January 1, 2006. Old assets are indexed up to 40% with asset-specific indices to 57 determine the current costs. Relevant asset base for calculation of allowed return in 2020 is 2016 for power and 2015 for gas 2. Debt base consists of non-interest and interest bearing capital Upcoming regulatory events in the next 3 years
SWE November GER January Regulatory review Determination of PL Start of new regulatory period PL for start of new efficiency factor power period in 2024 (general & individual) for April October / (possible shift to 2023) 4th reg. period by November HU Start of new GER BNetzA End of June January regulatory period Determination November GER of return on GER Submission of cost SVK Start of new POWER equity appraisal to regulatory Determination of (gas/power) BNetzA (power) period revenue cap (EOG) for power by BNetzA
2021 2022 2023
End of June October GER November November GER Submission of GER HU Start of new Determination of Determination cost appraisal regulatory efficiency factor gas of revenue cap GAS to BNetzA (gas) period (general & individual) for (EOG) for gas 4th reg. period by BNetzA by BNetzA
58 Continuous improvement in operative performance increases security of supply
SAIDI1,2 2019 vs. 2020 Power losses5 2019 vs. 2020 Germany Germany TWh
-12 % 6 -1 % 25.0 22.0 7.2 7.1
2019 2020 2019 2020
Sweden Sweden TWh 3 122.0 +20 % 146.0 0 % 1.1 1.1
2019 2020 2019 2020
CEE4 CEE7 TWh 214.0 -14 % 184.0 6 -8 % 4.2 3.9
2019 2020 2019 2020 1. System Average Interruption Duration Index (minutes per year) 2. Figures are for the respective previous year: 2020 for 2019, 2019 for 2018. Prior-year figures were adjusted to reflect a new calculation methodology 3. SAIDI increase due to weather related effects (e.g. a severe hurricane) in summer 2020 4. Calculated as arithmetic average of respective countries. 5. Aggregated 59 values for innogy and E.ON from 2019 onward. 6. Prior-year figures have been adjusted due to the recalculation incl. innogy. 7. CEE covers Czechia, Hungary, Poland, Romania. RAB growth further supported by local drivers
Power RAB development Local drivers € bn 3-5% CAGR • Renewable connections Germany1 17.8 • Major customer projects • Digitalization /modernization 2020 2023 3-5% CAGR • Storm proofing Sweden2 4.8 • Renewable connections • Demand growth 2020 2023 8-10% CAGR • New connections of B2B customers Czech • Modernization Republic2 1.7 • Smartification 2020 2023 1. Assuming constant number of network concessions 2. Constant year-end 2020 FX-rate 60 Almost €60bn of potential EU funding for E.ON markets earmarked for climate – already 200 projects identified
Funding focus matching E.ON’s core activities in customer centric energy infrastructure1 €58.4bn climate Efficient and decarbonized district heating and cooling systems Storage infrastructure earmarking in E.ON markets2 Energy efficiency in the industry sector and for SMEs Infrastructure for renewable energy €31.5bn digital Renovation of private and public buildings Renewable hydrogen earmarking in 200 2 E.ON markets (focus on schools and hospitals) potential Smart and sustainable mobility projects Smart grids identified
Member States Preparation Application Expected funds allocation - Specific (Aug- Dec 2020) (Jan4-Apr 2021) (May-Jun 2021) investment Ongoing engagement of national Submission of NRRPs3 by Timeline and funding instruments areas and governments with the EU Member States to EU vary between Member States, e.g. instruments Commission to draft plans Commission outlining national lengthy and competitive bidding investment and reform agendas procedures possible
1. Under political negotiation, list simplified and not-exhaustive 2. €312.5 bn under Recovery and Resilience Facility (RRF) of which €157.7bn are allocated to E.ON countries; climate earmarking rate of 37% resulting in €58.4bn, digital earmarking of 20% resulting in €31.5bn 3. National Recovery and Resilience Plans 4 According to the draft Regulation, the NRRP submission started 61 officially on Oct 15th, but we expect Member States will submit after the EU legal framework is finalized, so likely starting in January. Source: European Commission Today already 20 percent hydrogen blending in the gas network
Key facts Project rationale
Large scale prototype for Project will be realized in a local 20 % hydrogen blending for the first time subnetwork without technical in a German gas distribution network enhancements First laboratory tests already Proof laboratory test results (many conducted successfully ✓ different devices can be operated with up to 30% hydrogen admixture) in real life heater and other end devices of 400 350 customers tested during the Make E.ON’s gas network project to prove feasibility hydrogen ready
Complete operation will start in 2021
62 Leveraging strong partnerships and core competencies to drive additional businesses
Long-term partnerships with municipalities … … create a competitive edge for additional businesses
Technical grid services Smart meters Non-concession- Concession- based RAB based RAB e.g. O&M e.g. installation ~1/3 ~2/3 RAB Water and waste-water €22.4bn1 Broadband e.g. new customer e.g. supply and connections operations >9,000 … including other areas benefitting from our partnerships concessions in Germany City Energy Solutions (CES) Local heating and cooling solutions for municipalities, districts and single sites
1. German power and gas RAB 63 Network charges are only a small portion of German power price
Composition of average electricity price1 Decarbonization currently not optimally supported, electricity disadvantaged
• Renewables surcharge to be borne by more customers Electricity Renewable • Carbon minimum price or tax procurement, surcharge • Electricity tax to be redesigned retail margin
Further taxes Network and levies charges German power price needs to be ‘cleaned up’ Only 25% 1. Source: BDEW 2021 64 Power demand recovered faster than expected to pre-crisis levels
% Power demand1 110 Start of Covid crisis Dec 31, 2020
100 Germany 90 Ø -2.6% Ø -4.0% 2020 vs. 2019 YTD21 vs. 20192
0 110
100 Netherlands 90 Ø -3.9% Ø -1.4% 2020 vs. 2019 YTD21 vs. 20192 0 110
100
UK 90 Ø -7.0% Ø -3.6% 80 2020 vs. 2019 YTD21 vs. 20192 0 01/20 02/20 03/20 04/20 05/20 06/20 07/20 08/20 09/20 10/20 11/20 12/20 01/21 02/21 03/21 1. Total power demand as trailing weekly average relative to reference year 2019 (Source: ENTSO-E) 2. YTD21 as of March 10, 2021 vs the same period of 2019 65 39 TWh of production rights for PreussenElektra already transferred – terms challenged
Nuclear power plant Krümmel1 88 TWh of production rights (before transfer)
39 TWh ~€27.8/MWh preliminary price
PreussenElektra
Transferred production rights 18 TWh 11 TWh 10 TWh
Grohnde plant Isar II plant Brokdorf plant Production rights secured until August 2021 Production rights secured until August 2021 Production rights secured until June 2021 up to 4 TWh production rights required2 10-15 TWh production rights required2 4-6 TWh production rights required2
1. Krümmel OHG is a joint venture between E.ON and Vattenfall, each party owning 50% equity share 2. Volumes shown after transfer/purchase from Krümmel, excluding minority stakes (16.7% minorities in Grohnde, 20% in Brokdorf and 25% in Isar II), as of January 2021. 66 Settlement of all material remaining nuclear lawsuits at favorable terms
Agreement on costs for production rights
48 TWh €0/MWh
13 TWh € 181m
67 Impact on EBITDA from agreement on the use of production rights depends on timing of settlement; ~€600m EBIT impact
Effects NOT included in 2021 earnings guidance Mechanics: Stop of production rights depreciation1 at moment Key takeaways of settlement with respective increase of cash compensation (cash compensation = EBITDA impact) • EBIT2 impact: ~€600m independent from timing of settlement • EBITDA2 impact: ~€200 to 600m dependent on timing of settlement EBITDA • EBITDA increases per quarter by ~€100m, starting at €200m • ~€450m Adj. Net Income impact independent from Jan-21 Jul-21 Dec-21 timing of settlement • END impact: ~€400m in 2021 and ~€100m in 2022
EBIT impact: EBIT • Expected timing of settlement and inclusion in ~€600m guidance: Q3 2021
Jan-21 Jul-21 Dec-21
Timing of settlement 68 1. For the 48 TWh production volumes that will be transferred for free under the agreement and have not yet been used until timing of settlement 2. Including €42.5m compensation for frustrated investments Strict capital allocation framework leads to sound investment profile
Sustainability focus Return framework Capital allocation in line with business priorities
Sustainability criteria: Hurdle rate composition: Indicative hurdle rates2: ✓ Enable energy transition WACC (country & technology specific) 6-11% ✓ Supporting SDGs1 ✓ Reduce customers‘ emissions Project specific risk premium 4-9%
Human rights violations E.ON Group excess return target 3-8% Carbon heavy generation
Environmental degradation Hurdle rate
1. UN Sustainable Development Goals 2. Illustrative hurdle rate ranges; post tax. Final hurdle is risk adjusted for each project and might vary 3. Includes New Solutions and Energy Sales and Services 4. Includes City Energy Solutions and B2B Solutions 5. Excludes investments in Corporate Functions & Other and Non-Core 69 Regulated earnings split share
EBITDA 20201 • Regulated or quasi € bn regulated Earnings share of ~77% ~77% (Quasi-)regulated earnings • Network operations in countries with strong 6.9 regulatory frameworks
• Customer Solutions and Energy Networks
Energy Networks Customer Solutions Other2 diversified across European countries
1. Adjusted for non-operating effects 2. Other includes Corporate Functions & Other and Non-Core 70 E.ON allocates ~90% of investments to infrastructure
Investments 2021 Investments 2021-2023 € bn € bn
~90%2 ~90%2 infrastructure infrastructure ~4.91 ~141
Energy Networks Customer Solutions Other3
1. Cash-effective investments including Corporate Functions & Other and Non-Core 2. Based on investments in Energy Networks and Customer Solutions 3. Corporate Functions & Other and Non-Core 71 Investments in Customer Solutions also with strong focus on infrastructure
Energy Networks 2021-2023 Customer Solutions 2021-2023 € bn € bn
100% ~70% ~10.31 infrastructure ~2.81 infrastructure
B2B Solutions IT driven retail investments City Energy Solutions New Solutions Power Gas Other UK smart meter roll-out E-mobility 1. Cash-effective investments 72 Networks Capex breakdown 2021-2023
Germany Sweden CEE € bn € bn € bn
7.11 1.21 2.01
~55% ~50% ~60% investment in expansion investment in expansion investment in expansion Maintenance Grid expansion Other
1. Cash-effective investments 73 Funding strategy 2021 expected below annual range • Bond refinancing p.a. Volumes €2-4bn • Cash utilization of asset retirement obligations
• Optimize maturity profile and interest costs preferred Tenors 3-12 years • Redemptions on any single day capped at €1bn
• Going forward, majority of funding via green bonds >50% aligned with EU Taxonomy Green bonds
preferred • Predominantly Euro-based asset base Currencies EUR • Regular and green bonds • Private placements & promissory notes Instrument variety (Schuldscheindarlehen) Diversification • Commercial paper 74 Bond maturities
Bond maturities as of end 20201 € bn Refinancing benefits 15.6 Volume % Coupon until 2023 of up to 1.7 ~€150m2 1.5 0.4% 1.3 1.2 5.7% 0.0% 1.1 5.9% 5.6% 0.8 0.9 3.9% 0.8 0.8 0.6 0.0% 0.5 6.5% 0.4% 0.8% 0.3 0.0% 3.0% 0.0% 1.0% 1.0% 6.5% 5.5% 0.9% 5.5%
Q2 Q3 Q3 Q4 Q1 Q2 Q4 Q1 Q2 Q3 Q2 Q3 >2025 2021 2021 2022 2022 2023 2023 2023 2024 2024 2024 2025 2025 1. Bonds issued by E.ON SE and E.ON International Finance B.V. (fully guaranteed by E.ON SE); bonds issued by innogy Finance B.V. (fully guaranteed by innogy SE) 75 2. Amount of refinancing benefits depends largely on refinancing conditions at time of bond issuance Benchmark bonds of E.ON Group as of March 24, 20211
Volume in millions in Volume in millions in Issuer respective currency Coupon Maturity Issuer respective currency Coupon Maturity E.ON International Finance B.V. 570 GBP 6.500% Apr-21 E.ON International Finance B.V. 850 EUR 1.250% Oct-27 E.ON International Finance B.V. 1,000 EUR 6.500% Aug-21 E.ON SE 500 EUR 0.750% Feb-28 E.ON SE 750 EUR 0.375% Aug-21 E.ON SE 600 EUR 0.100% Dec-28 E.ON International Finance B.V. 500 GBP 5.500% Jul-22 E.ON SE 750 EUR 1.625% May-29 E.ON SE 500 EUR 0.000% Sep-22 E.ON International Finance B.V. 1,000 EUR 1.500% Jul-29 E.ON SE 750 EUR 0.000% Oct-22 E.ON SE 750 EUR 0.350% Feb-30 E.ON International Finance B.V. 2 750 EUR 0.750% Nov-22 E.ON International Finance B.V. 760 GBP 6.250% Jun-30 E.ON SE 1,000 EUR 0.375% Apr-23 E.ON SE 500 EUR 0.750% Dec-30 E.ON International Finance B.V. 488 GBP 5.625% Dec-23 E.ON SE 500 EUR 0.875% Aug-31 E.ON SE 750 EUR 0.000% Dec-23 E.ON SE 500 EUR 0.625% Nov-31 E.ON International Finance B.V. 800 EUR 3.000% Jan-24 E.ON International Finance B.V.3 975 GBP 6.375% Jun-32 E.ON SE 500 EUR 0.875% May-24 E.ON International Finance B.V. 600 EUR 5.750% Feb-33 E.ON SE 750 EUR 0.000% Aug-24 E.ON International Finance B.V. 600 GBP 4.750% Jan-34 E.ON International Finance B.V. 750 EUR 1.000% Apr-25 E.ON International Finance B.V. 900 GBP 5.875% Oct-37 E.ON SE 750 EUR 1.000% Oct-25 E.ON International Finance B.V.4 1,000 USD 6.650% Apr-38 E.ON International Finance B.V. 500 EUR 1.625% May-26 E.ON International Finance B.V. 700 GBP 6.750% Jan-39 E.ON SE 750 EUR 0.250% Oct-26 E.ON International Finance B.V. 1,000 GBP 6.125% Jul-39 E.ON SE 1,000 EUR 0.375% Sep-27
1. Only bonds ≥€500m equivalent, all bonds are listed in Luxemburg, with exception of the unlisted USD bond under 144A/Regulation S 2. The bond was increased from €500m 76 to €750m 3. The bond was increased from £850m to £975m 4. Bond issued under rule 144A/Regulation S Maintaining a substantial liquidity buffer is a cornerstone of E.ON’s risk management
• €2.7bn in cash & equivalents Key takeaways Large volume of liquidity1 • €1.1bn in short-term securities • €1.9bn of non-current securities
• A sizeable part of the expected 2021 funding • Extensive liquidity available needs already covered with €0.6bn bond Bond refinancing issuance in Jan. 2021 • Back-up RCF undrawn and • E.ON thereby continues to apply a prudent fully committed liquidity risk management • Liquidity risk minimized • Undrawn €3.5bn Revolving Credit Facility Back-up RCF (RCF), fully committed by 21 banks, no available MAC-clause2 • Extended by one more year until 2025
1. As per FY 2020 2. MAC = Material Adverse Change 77 New Green Bond Framework overview: Framework structure in line with draft EU Green Bond Standard
Process for selection Green assets & Management of External of green green assets Reporting capex use-of-proceeds and capex verification • All projects directly • Electricity Networks (DSO) • E.ON strives to maintain a • Annual reporting on net + contribute to, or enable • Renewable Energy portfolio matching/ proceeds Climate Change Mitigation • Energy Efficiency exceeding outstanding • (Environmental) impact • Eligible green activities • Clean Transportation green bonds reporting considering IFRS balance • Projects will be added on • Reporting in sustainability sheet values or CapEx an on-going basis report (audited2) 1 • DNSH assessment for all • Eligible green portfolio eligible activities monitored by Green Bond • Eligibility assessment Committee overseen by Green Bond committee, chaired by CFO 3 Framework is aligned with the ICMA Green Bond Principles 2018 4 Detailed assessment of full EU Taxonomy alignment in SPO5
1. DNSH: Do no significant harm. 2. Limited assurance. 3. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/ 78 4. EU classification system for environmentally sustainable economic activities, draft delegated act as published in November 2020. 5. SPO: Second party opinion. Green Bond asset and capex categories
Electricity Networks (DSO) Renewable Energy Energy Efficiency Clean Transportation
All distribution infrastructure Renewable energy production Integrated on-site business EV charging stations and 3 and equipment in the inter- and storage including and city energy solutions, supporting infrastructure including but not limited to:3 connected European System1 • Wind power and solar PV as EU Taxonomy compliant • Bioenergy (Biomass, Biogas • District heating and Biofuels) • Production of heating/ + • Hydrogen production, cooling from waste heat Additional assessment on a storage and distribution • Cogeneration of heating/ grid’s ‘greenness’, considering cooling and electricity from new green grid connections or bioenergy and geothermal 2 grid emission factor energy
Green distribution grid activities are the core of E.ON’s Green Bond portfolio
1. E.ON will exclude connections other than wind or solar energy as a proxy for connections of energy production facilities > 100g CO /kWh 2. >67 % of newly connected 2 79 generation capacity in the system <100 gCO2e/kWh (rolling five-year period) or average system grid emissions factor <100g CO2e/kWh 3. Considering relevant emissions thresholds and requirements from the EU Taxonomy PreussenElektra – Further ambition to ‘beat the provisions’
Solid track-record already until 2020 Nuclear Asset Retirement Obligations1 • Bundling of decommissioning activities € bn 2016 2017 2018 2019 2020 • Procurement successes by ‘convoy approach’ • Operational progress according to plan
Further optimization already planned and in execution -9 -8 -10 -10 • Decommissioning preparations starting early • Operational excellence lifting dismantling performance to next level (e.g. by increasing industrialization)
-21
1. In 2017 implementation of KFK solution (transfer of ~€10bn to German government fund) 80 FY 2020 Results Financial Appendix Segment outlook 2021
EBIT1 key drivers 2021 Energy Networks Customer Solutions Non-Core +• Reversal Covid-19 impact in 2020 +• Reversal Covid-19 impact in 2020 PreussenElektra: –• Higher depreciation from purchase Germany: Germany: of production rights2 •– Regulatory cycle +• Synergies ramp-up Sweden: +• Positive customer developments =• Ongoing regulatory period UK: +• Organic RAB growth +• Restructuring UK (target ~100m GBP EBIT) CEE & Turkey: +• Slovakia: Full year contribution of VSEH –• Hungary: Restructuring (disposal ETI /ÉMÁSZ) 1. Adjusted for non-operating effects 2. See page 65 82 Financial highlights E.ON FY 2020 results
FY 2019 € m FY 2020 % YoY pro forma Sales - 60,944 - EBITDA1 6,904 6,905 +0 EBIT1 4,065 3,776 -7 Adjusted Net Income1 1,573 1,638 +4 OCFbIT 4,289 5,948 +39 Investments 4,435 4,171 -6 Economic Net Debt² -38,895 -40,736 -5
1. Adjusted for non-operating effects, pro forma figures FY 2019, not audited 2. Economic Net Debt as per 31 Dec 2020 and 31 Dec 2019, Economic Net Debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs; bonds taken over from innogy are recorded 83 at their nominal value: the amount in the consolidated balance sheets is €2.1 bn higher (FY 2020) Temporary Economic Net Debt (END) increase largely due E.ON FY 2020 results to transaction effects and pensions € bn -8.9 -8.7
-7.2 -8.1 Asset Retirement Obligations (ARO) Pension provisions Net financial position
-23.4 -24.0
+5.2
+1.1 +0.5 -4.3 -38.9 -0.4 -1.6 -39.4 -0.9 -1.0 -40.7 END Transaction END OCF Net Transaction Transfer of Dividend Pensions5 Other END FY 2019 adjustment1 FY 2019 FY 20202 Investments effects4 Nord Stream1 (incl. AROs) FY 2020 adjusted FY 20203 into CTA
1. Adjustment of the underlying interest rate for selected leases 2. Excl. transactional effects 3. Net of divestments 4. Transaction effects include merger squeeze-out, locked-box, sale of German heating customer business, sale of Hungarian non-regulated electricity retail business (EKER), sale of Innogy’s CZ retail business, sale of Rampion 84 5. Actuarial interest rates for German pensions at 0.8% (vs. 1.3% @ FY 2019), for UK pensions at 1.4% (vs. 2.0% @ FY 2019) Cash Conversion Rate1 in FY 2020 at 91% E.ON FY 2020 results
€ bn
91% CCR1 6.9 5.9 0.1 5.3 -0.9 -0.1 -0.7
1.1 -4.2 Group Cash Change in WC OCFbIT Interest Tax payments OCF Capex FCF 3 EBITDA2 adjustments payments
1. Cash Conversion Rate (CCR) = (OCF bIT+ provision utilization nuclear)/EBITDA 2. Adjusted for non-operating effects 3. Incl. non-cash-effective EBITDA items, provision 85 utilizations and payments related to non operating earnings Divisions: Energy Networks E.ON FY 2020 results
EBIT1 Drivers € m –• Covid-19-related lower volumes 3,499 Germany –7% 3,253 –• Weather-related lower volumes CEE & Turkey 602 700 539 Sweden 371 Sweden –• Lower WACC in new regulatory period • Higher transmission charges Germany 2,358 2,182 – +• Strong operational performance FY 2019 FY 2020 CEE –• Covid-19-related lower volumes pro forma € m Germany Sweden CEE & Turkey Total FY 2019 FY 2019 FY 2019 FY 2019 FY 2020 % YoY FY 2020 % YoY FY 2020 % YoY FY 2020 % YoY pro forma pro forma pro forma pro forma Revenue - 14,563 - - 889 - - 2,832 - - 18,284 - EBITDA1 3,721 3,628 -2 692 529 -24 951 1,042 +10 5,364 5,199 -3 EBIT1 2,358 2,182 -7 539 371 -31 602 700 +16 3,499 3,253 -7 thereof equity-method earnings - 224 - - 0 - - 142 - - 366 - OCFbIT 2,455 3,614 +47 718 612 -15 1,082 1,016 -6 4,255 5,242 +23 Investments 2,254 2,365 +5 313 353 +13 582 668 +15 3,149 3,386 +8 1. Adjusted for non-operating effects, pro forma figures FY 2019, not audited 86 Divisions: Customer Solutions E.ON FY 2020 results
EBIT1 Drivers € m –• Weather impact on volumes All • Covid-19: sell-back of volumes (B2B) & bad 541 -16% – debt 454
Germany 487 • 412 Germany – Sale of Heizstrom customers (remedy Benelux disposal) 132 80 Other 102 91 UK -180 -129 UK +• Restructuring benefits FY 2019 FY 2020 pro forma
€ m Germany Benelux UK Other Total FY 2019 FY 2019 FY 2019 FY 2019 FY 2019 FY 2020 % YoY FY 2020 % YoY FY 2020 % YoY FY 2020 % YoY FY 2020 % YoY pro forma pro forma pro forma pro forma pro forma Revenue - 22,550 - - 2,959 - - 13,993 - - 8,840 - - 48,342 - EBITDA1 648 546 -16 192 152 -21 -10 1 +110 296 307 +4 1,126 1,006 -11 EBIT1 487 412 -15 132 80 -39 -180 -129 +96 102 91 -11 541 454 -16 thereof equity-method earnings - 4 - - 5 - - 0 - - 7 - - 16 - OCFbIT 71 581 +718 84 115 +37 128 -256 -300 95 286 +201 378 726 +92 Investments 226 238 +5 90 40 -56 211 117 -45 481 395 -18 1,008 790 -22
1. Adjusted for non-operating effects, pro forma figures FY 2019, not audited 87 Non-Core business E.ON FY 2020 results
EBIT1 Drivers +• Higher achieved power prices € m 413 +• Higher production volumes 366 Preussen 13% +• Early payment of Urenco dividend (one-off) Elektra –• Higher depreciation from purchase of Preussen production rights 292 383 Elektra –• Transfer of minority stakes2 to RWE Generation Turkey +• Strong operational performance Turkey 74 30 Generation –• One-off effect in 2020 FY 2019 FY 2020 –• FX effects pro forma
€m PreussenElektra Generation Turkey Total PreussenElektra: Hedged Prices (€/MWh) FY 2019 FY 2019 FY 2019 FY 2020 % YoY FY 2020 % YoY FY 2020 % YoY as of 31 December 2020 pro forma pro forma pro forma Revenue - 1,388 - - - - - 1,388 - 2020 100% 45 EBITDA1 543 895 +65 74 30 -59 617 925 +50 1 EBIT 292 383 +31 74 30 -59 366 413 +13 2021 92% 44 thereof equity-method earnings - 75 - - 30 - - 105 - OCFbIT 313 489 +56 - - - 313 489 +56 2022 57% 45 Investments 207 275 +33 - - - 207 275 +33 1. Adjusted for non-operating effects, pro forma figures FY 2019, not audited 2. NPP Emsland & Gundremmingen C 88 Adjusted Net Income E.ON FY 2020 results
FY 2019 € m FY 2020 % YoY pro forma EBITDA1 6,904 6,905 +0 Depreciation/amortization -2,839 -3,129 -10
EBIT1 4,065 3,776 -7 Economic interest expense (net) -1,304 -1,078 +17
EBT1 2,761 2,698 -2 Income Taxes on EBT1 -724 -653 +10 % of EBT 1 -26% -24% - Non-controlling interests -464 -407 +12
Adjusted Net Income1 1,573 1,638 +4
1. Adjusted for non-operating effects, pro forma figures FY 2019, not audited 89 Reconciliation of EBIT to E.ON FY 2020 results IFRS Net Income € m FY 2019 FY 2020 % YoY
EBITDA1 5,564 6,905 +24 Depreciation/Amortization/Impairments -2,344 -3,129 -33 EBIT1 3,220 3,776 +17 Reclassified businesses of Renewables -300 0 - Interest result -645 -720 -12 Net book gains 366 258 -30 Restructuring -819 -656 +20 Mark-to-market valuation of derivatives -630 1,128 +279 Impairments (net) -260 -557 -114 Other non-operating earnings -160 -1,048 -555 Income/Loss from continuing operations before income taxes 772 2,181 +183 Income taxes -43 -871 -1,926 Income/loss from continuing operations 729 1,310 +80 Income/loss from discontinued operations, net 1,063 -40 -104 Net income/loss 1,792 1,270 -29
Non-controlling interests -242 -253 -5 Net income/loss attributable to shareholders of E.ON SE 1,550 1,017 -34
1. Adjusted for non-operating effects 90 Cash-effective investments1 E.ON FY 2020 results
FY 2019 € m FY 2020 % YoY pro forma Energy Networks 3,149 3,386 +8 Customer Solutions 1,008 790 -22 Corporate Functions & Other 130 -278 -314- Consolidation 0 -2 - Non-Core 148 275 +86 Investments 4,435 4,171 -6
1. Pro forma figures 2019, not audited 91 Economic Net Debt1 E.ON FY 2020 results
€ m 31 Dec 2019 31 Dec 2020 Liquid funds 3,602 4,795 Non-current securities 2,354 1,887 Financial liabilities -28,947 -30,720 Adjustment FX hedging² 166 82 Net Financial Position -22,825 -23,956 Provisions for pensions -7,201 -8,088 Asset retirement obligations -8,869 -8,692 Economic Net Debt -38,895 -40,736
1. Economic Net Debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs; bonds taken over from innogy are recorded at their nominal value: the amount in the consolidated balance sheets is €2.1 bn higher (FY 2020) 2. Net figure; does not 92 include transactions relating to our operating business or asset management Economic interest expense (net) E.ON FY 2020 results
FY 2019 Difference € m FY 2020 pro forma2 (in € m) Interest from financial assets/liabilities -1,075 -1,012 +63 Interest cost from provisions for pensions and similar provisions -125 -95 +30 Accretion of provisions for retirement obligation and similar provisions -77 -9 +68 Construction period interests¹ 13 8 -5 Others -42 30 +71 Net interest result -1,305 -1,078 +227
1. Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified asset. Borrowing cost are interest costs incurred by an entity in connection with the borrowing of funds (interest rate: 93 3.11%) 2. Pro forma figures FY 2019, not audited Financial calendar & important links
Financial calendar
May 11, 2021 Quarterly Statement: January – March 2021
May 19, 2021 2021 Virtual Annual Shareholder Meeting
August 11, 2021 Half-Year Financial Report: January – June 2021
November 10, 2021 Quarterly Statement: January – September 2021
March 16, 2022 Annual Report 2021
Important links
Presentations https://www.eon.com/en/investor-relations/presentations.html
Facts & Figures 2021 https://www.eon.com/content/dam/eon/.../210324_Facts_and_Figures_final.pdf
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
Shareholder Meeting https://www.eon.com/en/investor-relations/shareholders-meeting.html
Green Bond Framework https://www.eon.com/en/investor-relations/bonds/green-bonds.html
Sustainability Report https://www.eon.com/en/ueber-uns/nachhaltigkeit/nachhaltigkeitsbericht.html
94 E.ON‘s Investor Relations Team
Analysts & Institutional Investors
Verena Nicolaus-Kronenberg Daniel Schaller Head of Investor Relations Manager Investor Relations [email protected] [email protected] +49 152 09331400 +49 171 6915869 Event & Roadshow Management
Martina Burger Björn Siggemann Vanessa Brinkmann Manager Investor Relations Manager Investor Relations Assistant Investor Relations [email protected] [email protected] [email protected] +49 151 19773784 +49 175 1996123 +49 152 09340725
Nicola Schwarz Martin Jäger Andreas Thielen Assistant Investor Relations Manager Investor Relations Manager Investor Relations [email protected] [email protected] [email protected] +49 151 16310338 +49 162 2754355 +49 151 67114918
Carmen Mombour Britta Wöhner General Contact: Manager Investor Relations Manager Investor Relations +49 201 184 2806 [email protected] [email protected] [email protected] +49 151 16310345 +49 152 54607527
95 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 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. 96