Growth Focus Discipline Creating the future of energy - - PowerPoint PPT Presentation

Creating the future of energy

June 2018

Discipline Focus Growth

http://www.energyfortomorrow.eu/

• Focus: Europe’s first energy player with exclusive downstream focus
• Unique downstream footprint: RAB and customer numbers rise >60%1
• Earnings quality: network EBIT share rises to ~80%1
• Strong synergies: fading nuclear earnings overcompensated by €600-

800m synergies

• Attractive dividends: aiming to deliver absolute annual dividend

growth

• EPS accretion: from second year after closing
• Solid capital structure: high commitment to strong BBB rating
• Limited cash impact: acquisition of RWE‘s 76.8% in innogy via asset

exchange; attractive offer to minority shareholders

Future E.ON ~371, 3 Engie Iberdrola Enel

• Nat. Grid

~501 Iberdrola Engie Enel Future E.ON

Regulated Asset Base (RAB € bn) Regulated Asset Base (RAB € bn) Customer Numbers (m) Customer Numbers (m)

Iberdrola2

• Nat. Grid2

Engie2 Enel2 ~51 Future E.ON

EBIT (€ bn) EBIT (€ bn)



Creating the future of energy

      

• 1. Future E.ON pro-forma EBIT 2017 (innogy data based on public information), 2. Bloomberg Data, 3. RABs from

different regulatory regimes are not directly comparable due to significant methodical differences. 2

Creating two focused energy companies

E.ON E.ON

RWE RWE

Future E.ON Future E.ON

RWE RWE

16.67%

Target structure Target structure Structure today Structure today

~77% innogy ~77% innogy

3

Acquisition of innogy via innovative asset exchange

innogy

76.8% (RWE) 23.2% (Min. share- holders)

Total equity value: ~€22bn

16.67% Stake in Future E.ON (~€3.7bn) E.ON & innogy Renewables & Other Assets (~€13.5bn)1 Cash payment to E.ON (- €1.5bn) Offer price and innogy dividend for 2017 and ’18 (~€5.2bn) 1. Acquisition of RWE‘s 76.8% stake in innogy via asset exchange 2. RWE to get in exchange:

• 16.67% in new E.ON via 20% capital increase against

contribution in kind (authorized capital)

• E.ON‘s and innogy‘s renewables businesses4
• Additional assets: E.ON’s minority stakes in two RWE
• perated nuclear power plants2, innogy’s gas storage

business and minority participation in Kelag 3. RWE receives innogy dividends for 2017 and 2018 4. Net cash payment from RWE to E.ON of €1.5bn3 5. Attractive cash offer to minority shareholder in innogy with total value of €40.00 per share (offer price (€36.76) plus FY 2017 dividend of €1.60 per share, plus expected dividend of €1.64 per share for FY 2018)

Asset exchange (limited cash impact) Cash element

• 1. Equity value for transfer perimeter, 2. Gundremmingen C (25% stake) and Emsland (12.5% stake), 3. Payment to balance asset valuation, 4. Excludes 20% in Rampion and

certain onshore capacity indirectly held by E.ON and innogy.

Innogy dividends (~€1.4bn) Renewables 11x EV/EBITDA

4

Upper end of guidance +58% YoY Leverage target of 3.9x achieved before monetization of Uniper Payout ratio increased 2x since start of new E.ON 3-4% EBIT CAGR3 5-10% EPS CAGR3

Transacting from a position of strength

EBIT €3.1bn1 EBIT €3.1bn1 ANI €1.4bn1 ANI €1.4bn1 END €19.2bn1 END €19.2bn1 Dividend Dividend Mid-term Growth Mid-term Growth

   

Group EBITDA

~€8bn2

Customer Solutions

>31m Customers1

~50m Customers2

Energy Networks

~€23bn RAB1, 4

~€37bn RAB2, 4

€5bn1

• 1. E.ON standalone 2017 reported, 2. Future E.ON pro-forma 2017 (innogy data based on public information),
• 3. 2018-2020 based on existing portfolio (E.ON standalone), 4. RABs from different regulatory regimes are not

directly comparable due to significant methodical differences.

Regulated Non-regulated

E.ON today Future E.ON (’17) E.ON today (’17) E.ON standalone



5

Sweden1 ~€4bn ~1m

• ~7m1

NL/BE

• ~4m2

Germany3 ~€20bn ~14m CEE3 ~€11bn4 ~13m Turkey1 ~€1bn ~9m

Unique downstream position across Europe

Energy Networks (RAB) Customer Solutions (number of customers)

Southern Europe

• ~1m3
• 1. E.ON 2017 reported, 2. innogy

2017 reported, 3. Future E.ON pro- forma 2017 (innogy data based on public information), 4. RABs from different regulatory regimes are not directly comparable due to significant methodical differences.

Excludes npower UK customers subject to transaction with SSE

UK

6

Focus, scale and efficiency pre-requisite for success

Digitization Electrification

New culture & capabilities

Empowered customers De- carbonization

• Future E.ON’s unique downstream positioning fully

captures benefits of energy mega trends

• Creating markets for customers through our

products, services, technologies

• “Go to” partner for politicians and regulators in

designing the energy transition

• Combining innovation power to enhance

development of state-of-the-art products

• Synergies improve cost position and roll-out speed
• Innovative services levered on significantly higher

customer number Mega trends accelerate and reinforce each other Mega trends accelerate and reinforce each other Focus, scale and efficiency needed in New Energy World Focus, scale and efficiency needed in New Energy World

7

Spin-off Uniper & reset of E.ON

2016 2018 2020 and beyond



Position of strength Position of strength

• Robust portfolio
• Strong financial & operational delivery
• Balance sheet headroom

 

Transition year Transition year

Acceleration of strategy execution

Unique strategic position Unique strategic position

• Focus on high-performance

regulated networks and state-of-the-art customer solutions

• Reduction of portfolio

complexity

• Enhanced earnings quality:

~80% of EBIT1 is regulated

• Aiming to deliver absolute

annual dividend growth

• Focus on high-performance

regulated networks and state-of-the-art customer solutions

• Reduction of portfolio

complexity

• Enhanced earnings quality:

~80% of EBIT1 is regulated

• Aiming to deliver absolute

annual dividend growth



• 1. Future E.ON pro-forma 2017 (innogy data based on public information).

8

Potential for premium valuation Potential for premium valuation

3 4 5 6 7 8 9 10 11 12

Value creation for shareholders

Instant redeployment of capital

Renewables1

Platform for high Synergies (€600-800m) Platform for high Synergies (€600-800m)

Shareholder value creation

• 1. Enterprise value (schematic)

Renewables 11x EV/EBITDA innogy acquisition at ~10x EV/EBITDA

Realization of valuation premium

9

Integration of innogy provides for strong synergy potential

2019 2020 2021 2022

Estimated synergies (€ m)2 Estimated synergies (€ m)2 Synergy focus1, 2 Synergy focus1, 2

€600-800m ~55% ~25% ~5%

• Strong synergy potential of €600-800m
• 10-15% of controllable costs
• ~5000 FTEs affected (~7% of employee

base)

• Strong synergy potential of €600-800m
• 10-15% of controllable costs
• ~5000 FTEs affected (~7% of employee

base)

Corporate Functions & IT Energy Networks Energy Sales & Customer Solutions

~100%

• 1. Synergy split (€ million), 2. Future E.ON pro-forma 2017 (innogy data based on public information).

10

~80%2

~65%1

Non-regulated Regulated

E.ON today Future E.ON Share of regulated network earnings (EBIT) Share of regulated network earnings (EBIT)

Attractive earnings & dividend profile secured long-term

Synergies to over-compensate fading nuclear earnings Synergies to over-compensate fading nuclear earnings

1 2 3 4 5 6 E.ON stand-alone EBIT development3 Enlarged E.ON 2018 2019 2020 2021 2022

• 1. E.ON 2017 reported, 2. Future E.ON pro-forma 2017 (innogy data based on public information), 3. Schematic illustration.

11

Future E.ON‘s key financials

EBITDA EBITDA EPS EPS EBIT EBIT ~€8bn1 ~€5bn1 EPS accretion from second year after completion Dividend Dividend Aiming to deliver absolute annual dividend growth (fixed dividend for 2018: €0.433)

Customer Solutions Energy Networks Non-Core

~80% regulated2

• 1. Future E.ON pro-forma 2017 (innogy data based on public information), 2. Future E.ON pro-forma EBIT 2017 (innogy data based on public information),

pie chart does not account for corporate functions & others, 3. Fixed for FY2018 (paid in 2019). 12

• Nuclear provisions: ~€0.9bn
• AROs (Renewables): ~€0.9bn
• Tax equity liabilities

(Renewables): ~€0.6bn

• Pension provisions

(Renewables): ~€0.4bn

Pro forma economic net debt

Economic Net Debt 2017 ~19.2 ~10.6 ~3.6 ~5.0

E.ON today1 (€ bn)

Economic Net Debt 2017 ~35 Asset-retirement obligations Provisions for pensions Net financial position

• 1. E.ON 2017 reported, 2. Future E.ON pro-forma 2017 (innogy data based on public information), 3. E.ON will address structural subordination post closing,
• 4. Nord Stream I stake.

~5 + Monetization of Uniper shares + Transfer of NS14 into CTA

( ) Further deleveraging measures to be realized in ‘18 (€ bn)

Includes:

• Acquisition of 23.2% minority shares
• €1.5bn cash payment from RWE

Future E.ON2, 3 (€ bn) ~€2.8bn debt transferred to RWE ~€2.8bn debt transferred to RWE

13

Investor agreement with RWE ensures equal treatment of shareholders

Preamble

• RWE to act purely as financial investor

Corporate Governance Shareholder structure and rights

• Right to nominate one Supervisory Board member
• Not allowed to increase stake above 16.67%
• Not allowed to sell to an E.ON competitor

14

2019 2019 2018 2018 2021 2021 2020 2020

• 1. Payment to balance asset valuation, 2. Transfers of E.ON minority shares in the two RWE-operated nuclear power plants Gundremmingen (25% stake) and

Emsland (12.5% stake) to RWE.

1st Closing

• E.ON becomes ≥76.8%

shareholder in innogy

• RWE becomes 16.67%

shareholder in E.ON (20% capital increase)

• €1.5bn cash payment to E.ON1
• Transfer of other assets2

1st Closing

• E.ON becomes ≥76.8%

shareholder in innogy

• RWE becomes 16.67%

shareholder in E.ON (20% capital increase)

• €1.5bn cash payment to E.ON1
• Transfer of other assets2

2nd Closing

• Transfer of E.ON and innogy RES Assets
• Transfer of Kelag participation and gas storage assets of

innogy

2nd Closing

• Transfer of E.ON and innogy RES Assets
• Transfer of Kelag participation and gas storage assets of

innogy

Voluntary public takeover offer (PTO)

(late April – early July) Extended offer period (mid July)

Voluntary public takeover offer (PTO)

(late April – early July) Extended offer period (mid July)

Clear path to obtain full control, irrespective of PTO acceptance rate

Antitrust approvals Full legal integration Integration & synergies

15

Transaction Update 1 – Official offer period has started

• Compensation payment based on IDW S11

valuation in case of DPLTA2 or squeeze-out or

• “Guaranteed dividend” in case of DPLTA or
• Shares in merged NewCo

Alternatives for innogy minority shareholders that do not tender Alternatives for innogy minority shareholders that do not tender Compensation payment could be lower than offer value  In DPLTA case synergy value will not be considered Guaranteed dividend could be structured akin to a bond with yield reflecting current low interest rate environment Shares in NewCo  No cash compensation at all E.ON will have control post closing, irrespective of offer acceptance rate

Incentive structure for high acceptance rate in place

Highly attractive offer for innogy minority shareholders Highly attractive offer for innogy minority shareholders

• Total offer value €38.40 (= €40.00 pre 2017

dividend of €1.60 paid in April 2018)

• 28% premium to innogy’s last share price

unaffected by general takeover speculations (22 February 2018)

• 23% premium to average broker target price before

announcement

• Offer value reflects value of innogy stand-alone and

part of the potential synergies resulting from full integration into E.ON

• 1. Valuation standard of the Institute of Public Auditors in Germany, 2. Domination and profit and loss transfer agreement

16

Transaction Update 2 – Merger control proceedings

Pre-notification Pre-notification

Simplified overview of process steps of EU merger control proceedings

(possible (partial) referrals to national authorities not taken into account1) Preparations Preparations Phase I (25 working days) Phase I (25 working days) Phase II (90 working days + extensions) 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

≈ May 2018 Not before mid-2019

Expected EU Commission clearance decision Presentation of potential concerns regarding market segments

• 1. Federal Cartel Office Germany, CMA, CEE

17

Investment highlights

Starting from position of strength: Creating the future of energy Unique downstream positioning with ~80% regulated earnings1

Focus

Aiming to deliver absolute annual dividend growth

Growth

Renewables value crystallization and €600-800m synergies High commitment to strong BBB rating

Discipline

• 1. Future E.ON pro-forma 2017 (innogy data based on public information).

18

Q1 2018 Results

May 8th, 2018

Discipline Focus Growth

E.ON standalone

Strong Q1 2018

Strong EBIT development: +24% Q1 2018 vs. low base in Q1 2017

• Adj. Net Income increased +38% YoY

FY 2018 guidance confirmed: EBIT €2.8-3.0 bn, Adj. Net Income €1.3-1.5 bn Voluntary PTO2 to innogy minority shareholders formally launched Highlights Highlights

525 1,038 1,517 727 1,284 1,715

• Adj. Net Income

EBITDA EBIT Q1 2018 Q1 2017

Key Financials1 Key Financials1

€ m

• 1. Adjusted for non operating effects, 2. Public Takeover Offer.

E.ON standalone

20

Operational update

• 1. Higher Regional Court of Düsseldorf (Oberlandesgericht – OLG), 2. Return on Equity, 3. German Federal Court of Justice (Bundesgerichtshof – BGH).

Customer Solutions Germany/UK Energy Networks Germany

• OLG1 court decision on allowed RoE2
• Ruling: 6.91% set by BNetzA too low
• Independent expert view: 7.7% adequate
• BNetzA: appeal at last resort BGH3
• General efficiency factor gas
• Reduction from 1.5% to 0.49%
• However, E.ON filed legal complaint
• Calculation method too unreliable
• General efficiency factor power
• Decision by BNetzA in Q3 at the earliest
• Customer numbers continue to grow
• More than 50,000 additional household customers

in Q1

• Following gain of more than 100,000 in Q4 2017

and stabilization in Q2 & Q3 2017

• Managed to reduce churn rate below market

average in UK

• Strategy of innovative tariff offerings and focused

sales channels is bearing fruits

• UK political environment disappointing
• Price cap still pending, many uncertainties remain

E.ON standalone

21

+ PreussenElektra: increased volumes due to

plant outages in Q1 2017 (mainly Brokdorf), positive one-off effects

+ Turkey: omission of book loss from asset sale + Sweden: power tariff increase + Turkey: regulatory improvements

– Germany: reversal of regulatory effects, concession loss Hamburg

+ Germany: price increases as per Q2 2017,

lower gas procurement costs Q1 2018 – UK: competitive dynamics, restructuring costs

• vercomp. price increases as per Q2 2017

+ Onshore & Offshore: capacity additions

(mainly Bruenning’s Breeze & Radford’s Run) – Onshore: subsidy expiries

EBIT 24% above prior year

65 11 133 73 +246 Q1 2018 1,284 Non-core

• Corp. Functions

& Other, Consolidation

Renewables Customer Solutions Energy Networks

• 36

Q1 2017 1,038

EBIT1 Q1 2018 vs. Q1 2017

€ m

• 1. Adjusted for non operating effects

Energy Networks Customer Solutions Renewables

Key Q1 Effects

Non-Core

E.ON standalone

22

• Adj. Net Income 38% above prior year

Q1 2018

€ m

~€ 20m improvement yoy mainly due to refinancing benefits, partly compensated by lower interest income from asset portfolio

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

EPS (€ per share) 727 1,107 1,284 Group EBIT1 Other interest expenses

• 156
• 21

Interest on

• fin. assets/

liabilities2 Adjusted Net Income1 Minorities

• 103

Income Taxes

• 277

Profit before Taxes1

Tax rate of 25% (stable yoy)

€0.34

E.ON standalone

23

END impacted by seasonally low operating cash flow

• 0.7
• 0.1
• 0.7

0.1

• 10.6

OCF Investments 0.2 Divestments 0.7 Pensions Other (CTA2 Funding) 0.1 Other (Remainder)

• 3.6
• 10.7
• 5.0

AROs

• 2.9
• 19.2

END FY 2017

• 0.4

END Q1 2018

• 19.7
• 6.0

€ bn

END1 Q1 2018 vs. FY 2017

• 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,
• 2. Contractual Trust Arrangement.

AROs Net financial position Pension provisions

Liquidation of pension scheme results in reduction

• f pension provisions –

limited effect on END

E.ON standalone

24

Outlook 2018 confirmed

EBIT1

• Adj. Net

Income1 Outlook 2018

• 1. Adjusted for non operating effects

€1.3-1.5 bn

Effects for the remainder of 2018 + PreussenElektra: non-reoccurrence of

• ne-off effects from 2017

– PreussenElektra: lower hedged prices Energy Networks Customer Solutions Renewables

+ Sweden: power tariff increase

– Germany: reversal of regulatory effects, new regulatory period for gas, concession loss Hamburg

+ Germany: non-reoccurrence of a

negative one-off effect in 2017 – Germany & UK: restructuring costs – UK: competitive dynamics

+ Offshore & Onshore: capacity additions

(Bruenning’s Breeze, Radford’s Run, Rampion) – Onshore: subsidy expiries

€2.8-3.0 bn

Non-Core

+/–

E.ON standalone

25

Appendix

E.ON Group Discipline Focus Growth

E.ON standalone

Delivering step by step – Strategy & Operations

Portfolio reset completed

• €3.8bn Uniper disposal:

decision to accept Fortum’s

• ffer
• De-risking: transfer of

nuclear storage liabilities to government

• €0.2bn proceeds:

successful IPO of Enerjisa’s downstream business

• + ~500MW onshore wind

in US in 2017

• + ~130k customer in

Q4 ’171 – turn-around achieved

• €400m delivery of Phoenix

performance program

• ~€0.6bn nuclear

decommissioning savings secured

• ~€1bn total contract value

in B2B new solutions (2017)

• ~200% sales growth in

PV/battery: fastest growing solar company in Germany

• Innovation & digitization:

successful launch of new products

• E-mobility: gaining traction

New culture & capabilities Operational excellence

• 1. Germany and UK

28

E.ON standalone

Each pillar with focused and disciplined growth

Customer Solutions Energy Networks Renewables

• Grow & sustain RAB
• Develop transformative platform
• Drive adjacent businesses

+~€2-3bn E.ON power RAB 2017 2020 ~€19bn ~€21- 22bn

• Energy sales: reinvent with

profitable customer growth

• New solutions: rapidly scale up
• Heat: leverage existing positions

+~2m Total Customer # 2017 2025 ~22m ~24m

• Onshore: grow at scale
• Offshore: leverage existing
• ptions

+~2GW E.ON operated capacity ~6GW ~8GW 2017 2020

29

E.ON standalone

Attractive stand-alone profile

Dividend growth

+40%

2017 2018

€0.30

EPS growth

+5-10% CAGR €0.60 – 0.70

2018 2020

EBIT growth

5.3GW ~8GW 2017 2020

2018 2020

Group CAGR: +3-4% €2.8 – 3.0bn €0.431

30

Aiming to deliver absolute annual dividend growth

• 1. Fixed for FY 2018 (paid in 2019).

E.ON standalone

Core CAGR: +5-6%

Drive value creation Absolute annual dividend growth Sustainable & resilient EPS growth

Customer-led Digitization Operational excellence Capital discipline

E.ON‘s guiding principles

31

E.ON standalone

Strong delivery of financial targets

• 1. Adjusted for non operating effects.

2016 2017 2016 2017

~€7bn €19.2bn 5.3x 3.9x €26.3bn

2016 2017

€2.7- €3.1bn €2.8- €3.1bn €0.6- €1.0bn €1.2- €1.45bn €3.1bn €3.1bn €0.9bn €1.4bn

EBIT1 vs. guidance EBIT1 vs. guidance

• Adj. Net income1 vs. guidance
• Adj. Net income1 vs. guidance

Deleveraging achieved: significant reduction of END Deleveraging achieved: significant reduction of END

Guidance range

32

E.ON standalone

Deleveraging creates balance sheet headroom

Economic net debt

FY 17

~4.4x EBITDA

FY 16 26.3

~5.3x EBITDA

19.2

~3.9x EBITDA

Q2 17 21.5

~5

• 1. Nord Stream 1 stake.

+ Nuclear fuel tax + Accelerated Book Build + Nuc. decommissioning cost savings + Additional measures

~2.9 ~1.4 ~0.6 ~0.6

+ Monetization of Uniper shares + Transfer of NS11 into CTA + Nuc. decommissioning cost savings

and additional measures

Mid-term target

~4.0x EBITDA

headroom Post deleveraging

~3.0x EBITDA

FY 17 19.2

~3.9x EBITDA

Hybrid cancelled Scrip dividend cancelled € bn

Achieved (€ bn) To be finalized (€ bn)

33

E.ON standalone

Disciplined capex drives EBIT growth

2019 2018 2017

EBIT driven up by additional capex (€ bn) EBIT driven up by additional capex (€ bn)

2020 2019 2018

New plan ~€9.5bn net capex1 New plan ~€9.5bn net capex1

~20%

• 1. Capex net of divestments.

EBIT flat within range (€ bn) EBIT flat within range (€ bn)

2020 2019 2018 2.8 3.1 2018 2019 2020

Group EBIT CAGR ~3-4% Core EBIT CAGR ~5-6%

Old plan ~€8bn net capex1 Old plan ~€8bn net capex1

34

E.ON standalone

Capex split 2018-2020

Capex1 2018 Capex1 2018

• 1. Capex net of divestments.

1.0 1.0 1.5 Renewables Energy Networks Customer Solutions ~€ 3.5bn ~€ 9.5bn

Increase in capex drives the 5-6% EBIT growth target of the core business Segments have to compete for capital and against other uses of funds Strict adherence to return targets (ROCE 8-10%)

Growth

Focus

Discipline

35

E.ON standalone

Capex1 2018-2020 Capex1 2018-2020

49% 26% 25%

Sustainable performance - Phoenix & beyond

Fokus (Ger) & SWAT (UK) next wave

Already embarked on the next efficiency projects

• Focus on business operations
• Fokus (CS Ger) & Swat (CS UK) target to fully
• ff-set margin pressure
• Make business model future proof

2018 beyond 2020 2020 2019 EBIT contribution Restructuring costs (upfront)

Gross savings to

• ffset margin

pressure

~€120m savings ~€120m savings ~£100m savings ~£100m savings

Performance culture to be sustainably embedded across all functions

• Focus on central overhead and support functions
• Digitalization to improve processes and customer

experiences

Phoenix measures fully implemented

Total 400m 2018 ~270m 2017 ~130m

36

E.ON standalone

Group guidance FY 2018

EBIT2017 EBIT2017

• Adj. Net Income 2017
• Adj. Net Income 2017
• 1. Adjusted for non operating effects.

37

3.0 2.8 1.5 1.3

EBIT1 (€ bn) EBIT1 (€ bn)

• Adj. Net Income (€ bn)
• Adj. Net Income (€ bn)

€3.1bn €1.4bn

Includes ~€100m restructuring costs in Customer Solutions (UK, Germany)

2017 Actuals 2018 Guidance

E.ON standalone

Guidance range

Delivering step by step – Attractive dividends

Absolute dividend growth 2018: Fixed Dividend

FY 2018 Dividend €0.431 FY 2017 Dividend €0.30 FY 2016 Dividend €0.21

38

Aiming to deliver absolute annual dividend growth

• 1. Fixed for FY2018 (paid in 2019).

E.ON standalone

Return

ROCE1 8 – 10 %

E.ON FOCUS – medium-term framework

Our basis for steering the company

• 1. Based on EBIT (= pre-tax), 2. OCFbIT divided by EBITDA, 3. Adjusted for non-operating effects, FY 2018 guidance range as basis for medium-term
• utlook 2018-2020, 4. Total Shareholder Return, 5. Fixed for FY2018 (paid in 2019).

Cash

Cash conversion rate2 ≥ 80 %

Executive Compensation

Closely linked to EPS target achievement and relative TSR4 (in addition: share ownership obligations)

EPS3,4

Group

+ 5-10%

Absolute dividend growth

Dividend

Payout

Fixed dividend: €0.435

EBIT3

Group

+ 3-4%

Capital Structure

Strong BBB/Baa

E.ON standalone

39

Investment highlights

From deleveraging to focused and disciplined growth Management team with strong shareholder focus

Focus

Deliver sustainable EPS growth and aiming for absolute annual dividend growth

Growth

Strict capital discipline and high-performance culture

Discipline

40

E.ON standalone

Energy Networks Discipline Focus Growth

E.ON standalone

Energy Networks - The heart of E.ON

Power and gas business Power business only

CEE & Turkey €8.5bn3 Sweden €4.0bn Germany €10.7bn ~€23.1bn2 Regulated asset base 20171 CEE & Turkey €0.4bn Sweden €0.5bn ~€1.9bn Germany €1.1bn EBIT4 2017

25 32 71 27 19 12 CEE & Turkey5 Sweden Germany

Market share (%)

349 490 137 2 CEE & Turkey 45 Sweden Germany 60 Gas Power

Grid length (‘000 km) 1

∑ Grid length: 976 ∑ Grid length: 107

• 1. 100% view for Slovakia and Turkey, 2. Differences may occur due to rounding, 3. In Hungary the RAB has been increased in 2017 by €2.8bn due to a system change

towards replacement costs. It was €1.5bn before, 4. Adjusted for non operating effects, 5. Arithmetic average.

~75% of group core

E.ON standalone

42

Energy Networks - Higher capex leads to power RAB growth

2017 2020 2017 2020 2017 2020

Czech Republic Sweden Germany

+6-10% +11-15% +12-16% ~€1.4bn ~€3.8bn ~€8bn

Power RAB Power RAB Power RAB

E.ON standalone

43

Multi-decade RAB growth engine

• Main driver is additional replacement

investments

• Conservative assumptions on Renewables

and E-mobility roll-out

• Acceleration of Renewables build-out
• Smart meter
• E-mobility
• Electrical heating
• Digital layer & fully digital equipment

Cautious planning Cautious planning Potential upsides to “new normal”-level Potential upsides to “new normal”-level +€300m – €400m €1.4bn 2016 2017 €1.4bn €1.7 – 1.8bn Beyond 2020 “New normal”

Disciplined & gradual ramp-up Disciplined & gradual ramp-up

Energy Networks capex1

• 1. Excluding Slovakia and Turkey.

E.ON standalone

44

Major transformation in Energy Networks

Single layer infrastructure (energy) Physical linear network Centralized system Infrastructure ecosystem Decentral, connected multi-layer infrastructure More (semi-) autonomous local energy systems

Energy Network player Energy network operator From Holistic system provider To Physical layer Digital layer Communi- cation layer

Data center EMS Platforms Network control center Smart Home Asset control systems VPP Local grid control Smart Meter Cloud Antenna Wifi Block chain

Future energy network system will need to combine different layers of infrastructure

E.ON standalone

45

Turkey with extraordinary high RAB growth

 Established in 3 high-growth regions  Leading electricity network operator: − 10.5 m connections − 220,000 km network length (20% of market)  Constructive regulatory environment: − Allowed WACC for 2016-2020 regulatory period has been increased to 13.6% from 11.9% (pre-tax, real) − Incentives to outperform capex,

• pex, and theft & loss allowances

 High network investment due to: − Strong power demand growth of >4% p.a. − Need for significant network modernization

in bn TL, nominal

Regions

Target to more than double 2016 RAB by 2020 Target to more than double 2016 RAB by 2020

Downstream Business Downstream Business Market & Regulation Market & Regulation RAB development RAB development

Strongly growing market with highly attractive returns

Ankara Istanbul Adana

>2x

3.8 5.3 2016 2017 2020

E.ON standalone

46

Operational excellence – digitization in practice

Transparent and effective capex allocation Providing a smooth user experience

Asset replacement decisions Asset replacement decisions Digital workforce Digital workforce

Data driven decisions to prioritize replacement activities Low double digit million € added value p.a. potential after full roll-out Expert judgement and local experience Predictive maintenance Predictive maintenance Conventional approach Conventional approach 6-12 % productivity gains Introduce digital application used by every field worker comprising all functionalities necessary in the daily work Introduce digital application used by every field worker comprising all functionalities necessary in the daily work

Tool Tool Impact Impact

E.ON standalone

47

Aspiration to develop the platform for energy transition

Further decentralization and fragmentation lead to a need for local rebalancing Further decentralization and fragmentation lead to a need for local rebalancing

Transformative Platform Transformative Platform

P2P Trading Flex- Markets Local Energy System Regional Energy System

Increasing system responsibility assumed by regional or local network

• perator

Increasing system responsibility assumed by regional or local network

• perator

Energy transition is and will be happening essentially at the DSO-level E.ON standalone

48

Opportunities in adjacent businesses - Broadband

Growing from existing assets Growing from existing assets

E.ON's existing fiber-optic infrastructure E.ON's new fiber-optic infrastructure

A

Local transformer station Fiber-optic cables in every street and to every household Network

• perations

center Business building Mobile cell tower Telco X's backbone Enterprise customer's data center Point of Presence (Switch between backbone and access network)

Extension of existing business Extension of existing business Entering Fiber-to-the-Home (FttH) market Entering Fiber-to-the-Home (FttH) market B New business concept in development New business concept in development

E.ON standalone

49

• Lower allowed returns reflect lower

bond yields

• Benefits from maturing legacy

bonds to be attributed to Energy Networks driving EPS growth

• Lower allowed returns reflect lower

bond yields

• Benefits from maturing legacy

bonds to be attributed to Energy Networks driving EPS growth

EBIT outlook – Stability despite two major regulatory reviews

German pension cost pass through

Positive one-off 2017 2018 2019 2020 €1.9bn Lower allowed returns Higher RAB

+5-10% p.a. €0.60 – 0.70

2018 2020

EPS growth

E.ON standalone

50

Customer Solutions Discipline Focus Growth

E.ON standalone

Energy sales is the anchor of customer solutions

• 1. Excluding Turkey, 2. Total Contract Value, 3. Adjusted for non operating effects, 4. B2C customers in Germany and UK.

E.ON’s market positions E.ON’s market positions Customer

B2B B2C B2M

Customer focused portfolio Customer focused portfolio

Energy Sales

Heat &

New Solutions

EBIT3 2017 €526m Energy Sales EBIT4

B2B ~25% B2C ~75%

Energy Sales is the anchor business Energy Sales is the anchor business

High customer loyalty High customer loyalty

Customer tenure4

> 5y 2-5y < 2y

B2M/Heat: 10% market share in Germany & Sweden B2B Solutions: ~€1bn TCV2 in 2017

Top 3 Top 2 Top 3 Top 3 Top 3 Top 3 Top 10 Top 3

Energy Sales: 22m1 customers in 8 countries

E.ON standalone

52

7 6 5 4

Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 UK B2C customers UK SVT customers 2013 2014 2015 2016 2017 6 8 4 2 UK

E.ON is leading the transformation of energy sales

Standard tariff customer numbers declining Standard tariff customer numbers declining

Customer accounts in m

2016 year of peak margins1 2016 year of peak margins1

% margin

Rigorous cost focus

Reduce cost to acquire and cost to serve dramatically

Attractive products

Innovative and green tariffs complemented by smart meter rollout

Focused sales channels

Protecting revenues

Turnaround in customer numbers

Increasing EBIT into next decade

6.3m

• 1. Final figure for 2017 not yet available: ~5%.

E.ON standalone

53

Increase customer attraction while reducing cost to acquire

Physical channel Digital channel

Product offering and selection of sales channels lead to… Product offering and selection of sales channels lead to… …at the same time reducing costs to acquire …at the same time reducing costs to acquire …increase in customer numbers… …increase in customer numbers…

2025 2017

Sales channels Tariff innovations 200k innovative tariffs sold since June 2017 > 5,000 E.ON Plus products (devices as add-on to tariffs) sold 18% of our customer base with add-on services +100% value-add services contracts in 2017 Scale sales cooperations with big retailers (e.g. Lidl)

• Innovative tariff offering
• Focus on earning customers’ loyalty

Sales push in digital

• From broker site to own website e.g. GER, UK, SWE

Home move journey as acquisition channel ~22m ~24m

E.ON standalone

54

Closing the gap - Cost to serve to be reduced dramatically

Components of cost to serve1

Other Metering & Installation Debt resolution Servicing and Backoffice

SWAT Fokus

Smart Meter Rollout E.ON ambition E.ON

~€120m savings ~€120m savings

€/customer account

~£100m savings ~£100m savings Cost to serve ambition Efficiency programs Measures to reduce cost to serve

• 1. Example UK

Tackling cost to serve and overall cost efficiencies to support earnings

E.ON standalone

55

Re-inventing our customer business with the digital attacker

Cost efficiency Cost efficiency Superior services Superior services Innovative proposition Innovative proposition <€ 10

Market Leading Cost to Serve

Synergies

across regions

1-click

Customer journey

+50 NPS1

Quick response & accurate billing

Single

platform for tariff innovations

Data

driven propositions

Fast

time to market

Self

learning functionality

Market leading

cost of change

Gradual replacement of legacy systems – customer focused with proven stability

• 1. Net Promoter Score

E.ON standalone

56

New Solutions - Strive for leadership with innovative products

• 1. Adjusted for non operating effects

B2B B2B B2M B2M B2C B2C

PV + battery Smart home Smart meter PV + battery Smart home Smart meter

E-mobility E-mobility Product offering Product offering Ambition 2025 Ambition 2025 EBIT1 ~€250-300 m EBIT1 ~€250-300 m EBIT1 ~€200 m EBIT1 ~€200 m EBIT1 >~€50 m EBIT1 >~€50 m EBIT margin > 10% EBIT margin > 10%

District heating City quarter solutions Integrated city energy solutions District heating City quarter solutions Integrated city energy solutions Decentral generation Energy efficiency Flexibility & storage Digital energy solutions Decentral generation Energy efficiency Flexibility & storage Digital energy solutions

E.ON standalone

57

~>2 x

2025 ~2 x 2016 2020 … 2017

Become a leading Energy Service Company

B2B - E.ON to become a leading Energy Service Company in Europe

Ambitious organic growth of TCV1 … Ambitious organic growth of TCV1 … …to translate into EBIT2 over time …to translate into EBIT2 over time

• 1. Total Contract Value, 2. Adjusted for non operating effects.

Decentral generation Decentral generation Energy efficiency Energy efficiency Flexibility & storage Flexibility & storage Digital energy solutions Digital energy solutions

~ €250-300m 2016 2017 2020 2025 ~+25% CAGR

E.ON standalone

58

B2M – E.ON is a reliable partner for cities and communities

E.ON to benefit from market trends and investments E.ON to benefit from market trends and investments

• 1. Germany, Sweden, UK, 2. Capex net of divestments, including investments for Högbytorp, 3. Adjusted for non operating effects.

Investments with low risk and high return Investments with low risk and high return

Capex2 2018-2020 ROCE > 10% Stable (long-term) earnings 15-20 year contracts 2025 ~€200m 2017

UK Germany Sweden

Heat EBIT3 €m ~€ 800m

ectogrid™

Högbytorp, Stockholm

 > €250m capex project close to Stockholm, COD 2019  100 MW CHP district heating network extension and biogas as part

• f a circular economy project

 Can provide heating and cooling for an entire city, optimising excess heating and cooling  First ectogrid under construction in Lund, Sweden  Patented global solution - available to be sold and integrated in other cities Project examples Project examples

E.ON standalone

59

B2C - E.ON drives the electrification of the home and mobility

PV + battery E.ON SolarCloud E.ON Plus + smart meters E-mobility solutions Home heating

Example: PV + battery growth story Example: PV + battery growth story Translating into decent EBIT in the next decade Translating into decent EBIT in the next decade

~€50m 2017 beyond 2025

E.ON product offering for the electrification of home E.ON product offering for the electrification of home

~3x ~5x 2017 2016 2015 2025 …

EBIT1 €m

PV + battery units sold E.ON – the fastest growing solar company in Germany

• 1. Adjusted for non operating effects

E.ON standalone

60

Temporary high investments for smart meter & IT Temporary high investments for smart meter & IT

Disciplined investment plan to support growth opportunities

Capex1 2018-2020 €2.4bn

• 1. Capex net of divestments, 2. Adjusted for non operating effects.

Heat & New Solutions 2025 … 2020 2018 Restructuring charges 2017 €526m

Customer Solutions EBIT2 2017-2020

Medium-term EBIT development Medium-term EBIT development

Energy Sales Heat & B2B projects Smart meter IT & efficiency Other E-mob

Partially temporary Partially temporary Asset-backed investments Asset-backed investments

E.ON standalone

61

Renewables Discipline Focus Growth

E.ON standalone

Position of strength

~4 GW1 ~3 GW1

Arkona Rampion Morcone

Under construction: ~ 1GW

1.4 GW1 0.6 GW1 0.3 GW1 0.2 GW1 0.2 GW1 0.2 GW1

Stella

€0.5bn EBIT 2017 (~18% of core EBIT) ~95% Long-term contracted

• r hedged until 2020

Strong track record with ~7 GW1 delivered Active in 3 technologies and batteries

1

Highlights Highlights

• 1. Gross capacity

E.ON standalone

63

Growth trend unbroken – RES to dominate global power generation

7 GW Nuclear 17 GW CCGT Onshore 44 GW Offshore 38 GW Utility- scale PV 59 GW

Capacity additions forecast

Annual build rate avg. 2018-’301

Capacity additions forecast

Annual build rate avg. 2018-’301

~300 turbines per week ~300 turbines per week Strong cost decrease Industry trends Industry trends Bid prices per technology

(EUR/MWh)

Bid prices per technology

(EUR/MWh)

55 103 2017 2016 2015 43 66 2016 2015 109 2017

Offshore Onshore

merchant2

Decarbonization

• 1. Bloomberg New Energy Outlook 2017, 2. German Power Baseload forward 2019 (08.03.2018).

E.ON standalone

64

E.ON aims to grow at scale in Onshore

Onshore

+20-25%

Capitalize on attractive ~8 GW pipeline

~5 GW1 2017 2020

Onshore

+20-25%

Capitalize on attractive ~8 GW pipeline

~5 GW1 2017 2020

Offshore

+40%2

Leverage existing

• ptions in Europe

~1 GW1

• 1. Operated capacity, 2. ~400MW net capacity addition. Gross capacity addition: 800MW.
• From boutique

to industrial

• Capex light

Solar PV

E.ON standalone

65

High share of contracted revenues provides stability and visibility

2018 2017 2020 2019

• High earnings stability
• Secure long-term stable off-take

agreements for new investments

• Revenue optimization for assets at the end
• f support scheme

(rolling 3 year hedging)

• Active commercial risk management/value
• ptimization incl. congestion hedging, day-

ahead/intra-day optimization

Long-term contracted Hedged Merchant

High earnings stability and visibility High earnings stability and visibility Clear guiding principles Clear guiding principles

~75% long-term contracted1 ~95% hedged or long-term contracted1

• 1. Average 2017-2020

E.ON standalone

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Integral part of E.ON - Modular value crystallization

Develop & Sell & (Operate) Develop & Sell & (Operate) Build & Sell & Operate Build & Sell & Operate Build & Keep Build & Keep

• Rapid monetization of value
• Capex light
• Additional value from long-term

O&M services

• Rapid monetization of value
• Capex light
• Additional value from long-term

O&M services

• Reduce exposure in certain

geographies

• Additional value from long-term O&M

services

• Reduce exposure in certain

geographies

• Additional value from long-term O&M

services

• Resilient long-term cash flows
• Strong operational capabilities ensure

E.ON being an efficient asset owner

• Resilient long-term cash flows
• Strong operational capabilities ensure

E.ON being an efficient asset owner

Afton Magic Valley 12 Amrumbank

Deal value: ~$100m1 Year: 2016 Sold: 100% Cap.: 50 MW Deal value: ~$100m1 Year: 2016 Sold: 100% Cap.: 50 MW Deal value: ~$650m Year: 2014 Sold: 80% Cap.: 405 MW Deal value: ~$650m Year: 2014 Sold: 80% Cap.: 405 MW Capex: ~€1bn COD: 2015 Cap.: 302 MW Capex: ~€1bn COD: 2015 Cap.: 302 MW

Case studies Case studies Wildcat 13

• 1. InfraRed Capital Partners, 2. Magic Valley 1: 203MW, 3. Wildcat 1: 202MW.

E.ON standalone

67

Technical/digital excellence to drive down LCOE1

Extension of life-time Improved load factors and availability Transparent and effective capex and

• pex allocation

1

Predictive maintenance roll-out Predictive maintenance roll-out 2017 2018 2019 2020 10% 60% Self-learning algorithms to optimize wind park layout in

• rder to increase

production and reduce wake effects Self-learning algorithms to optimize wind park layout in

• rder to increase

production and reduce wake effects Array layout optimizer Array layout optimizer Turbine selection tailored to site conditions Data driven investment decision Single digit yield increase

E.ON standalone

• 1. Levelized cost of electricity

68

Play at scale in Onshore - Attractive pipeline in Tier 1 geographies

Gross capacity additions 2018-2020 (MW) Gross capacity additions 2018-2020 (MW) Onshore pipeline Onshore pipeline

~5.9 GW

80% PTC 100% PTC Other

Onshore pipeline Onshore pipeline

~1.8 GW

∑~2GW

Nordic Other EU UK

COD 2016 COD 2017 COD 2018 COD 2019 COD 2020

Onshore Offshore1, 2 New Projects (Pre- FID pipeline)

• 1. 2018 COD: Rampion (Gross delivery: 400 MW, EU Offshore), Stella (Gross delivery: 201 MW, US Onshore),
• 2. 2019 COD: Arkona (Gross delivery: 385 MW, EU Offshore), Morcone (Gross delivery: 57 MW, EU Onshore).

E.ON standalone

69

Financial Appendix Discipline Focus Growth

E.ON standalone

Highly stable business profile

Business profile

High share of regulated and long-term contracted earnings (~3/4 of EBITDA)



Predominantly quasi-regulated or contracted earnings in heat operations and Renewables



Remaining merchant exposure in Renewables and PreussenElektra largely hedged



Operations in Energy Networks under stable, well established frameworks in low risk markets with strong regulatory track record



FY EBITDA 20171 ~3/4 from regulated/long-term contracted businesses2

• 1. Adjusted for non operating effects, representation in pie charts excluding Corporate Functions/Other; total figure including Corporate Functions/Other,
• 2. Including Energy Networks and a portion of Renewables and Heat.

15% 16% 56% 13% Renewables PreussenElektra (non-core) Customer Solutions Energy Networks

€5.0bn

E.ON standalone

71

E.ON today – Regulated Energy Networks at the heart

Key financials 2017

Group EBIT1

• Adj. Net Income1

€1.4bn €3.1bn Customer Solutions €1.9bn €1.9bn €0.5bn €0.5bn €0.5bn €0.5bn

• 1. Adjusted for non operating effects, 2. Percentage as of Group EBIT.

Core EBIT1 2017 Share of regulated/ long-term contracted businesses2

Energy Networks Renewables

Regulated/contracted Merchant

Strong pillars with Customer Solutions and Renewables

E.ON standalone

72

2017 yet another year of strong delivery

Highlights Highlights Key Financials1 Key Financials1

€ m

• 1. Adjusted for non operating effects

EBIT

• Adj. Net Income

Economic Net Debt

• 7.1

FY 2017 19.2 FY 2016 26.3

EBIT and Adj. Net Income at the upper end

• f the guidance range
• Adj. Net Income + 58% versus FY 2016

Economic net debt reduced to €19.2bn Dividend 2017 of €0.30/share confirmed

€ m € bn Guidance range EBITDA €2.8-3.1bn, Adj. Net Income 1.2-1.45bn FY 2017 3,074 FY 2016 3,112

+58%

FY 2017 1,427 FY 2016 904

E.ON standalone

73

Q1 2018 – Financial Appendix Discipline Focus Growth

E.ON standalone

Financial Highlights

€m Q1 2017 Q1 2018 % YoY Sales 10,480 9,330

• 11

EBITDA 1 1,517 1,715 +13 EBIT 1 1,038 1,284 +24 Adjusted net income 1 525 727 +38 OCF bIT 1,027 359

• 65

Investments 588 696 +18 Economic net debt ²

• 19,248
• 19,658
• 2

EBIT

• Energy Networks: -5% YoY

Reversal of regulatory effects in Germany and tariff increases in Sweden

• Customer Solutions: +23% YoY

Price increases in Germany 2017, competitive dynamics in the UK

• Renewables: +7% YoY

Capacity additions, partly offset by subsidy expiries

OCF bIT

• Cash provided by operating

activities €0.7 bn below prior- year level

• Key driver: One-off effects in

Working Capital

• Adj. Net Income
• Improves €202 m YoY

Driven by strong EBIT and profiting from refinancing benefits and stable tax rate (25%)

• 1. Adjusted for non operating effects, 2. Economic net debt as per 31 Dec 2017 and

31 Mar 2018; Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs.

Investments

• Energy Networks: €271 m

(vs. €260 m YoY)

• Customer Solutions: €74

m (vs. €64 m YoY)

• Renewables: €180 m

(vs. €251 m YoY )

• Non-Core: €161 m

(vs. €5 m YoY)

E.ON standalone

75

• 0.5

Capex

• 0.7

OCF

0.1

• 1.3

EBITDA1 Change in WC

0.0 0.4

FCF 21% Tax Payments

• 0.1

Interest Payments

• 0.1

OCF bIT

1.7

Cash Adjustments3

Seasonally low CCR2

Q1 2018

€ bn

• 1. Adjusted for non operating effects, 2. Cash Conversion Rate: OCF bIT ÷ EBITDA, 3. Net non cash effective EBITDA items incl. provision utilizations.

E.ON standalone

76

Highlights Highlights

Segments: Energy Networks

• Germany

– Reversal of regulatory effects – New regulatory period gas – Concession loss Hamburg

• Sweden

+ Power tariff increase

• CEE & Turkey

+ Regulatory improvements in Turkey Energy Networks Energy Networks

138 132 151 415 353 131

• 5%

CEE & Turkey Sweden Germany Q1 2018 642 Q1 2017 678

• 1. Adjusted for non operating effects

EBIT1 € m

€m Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Revenue 3,426 2,229

• 35

298 293

• 2

475 432

• 9

4,199 2,954

• 30

EBITDA 1 559 490

• 12

173 190 +10 185 197 +6 917 877

• 4

EBIT 1 415 353

• 15

132 151 +14 131 138 +5 678 642

• 5

thereof Equity-method earnings 16 16 +0

• 22

30 +36 38 46 +21 OCFbIT 720 23

• 97

142 267 +88 152 164 +8 1,014 454

• 55

Investments 98 108 +10 60 55

• 8

102 108 +6 260 271 +4 Total Germany Sweden CEE & Turkey

Details

E.ON standalone

77

Segments: Customer Solutions

Customer Solutions Customer Solutions Highlights Highlights

• Germany Sales

+ Price increases as per Q2 2017 + Lower gas procurement costs

– Restructuring costs

• UK

+ Price increases as per Q2 2017

– Competitive dynamics – Restructuring costs – Price caps (PPM2, vulnerable customers)

121 116 160 148 128 392 Q1 2017 319 38

+23%

Other UK Germany Sales Q1 2018 EBIT1 € m

• 1. Adjusted for non operating effects, 2. Prepayment Meter.

€m Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Revenue 2,155 2,013

• 7

2,151 2,391 +11 2,244 2,341 +4 6,550 6,745 +3 EBITDA 1 44 135 +207 184 169

• 8

167 159

• 5

395 463 +17 EBIT 1 38 128 +237 160 148

• 8

121 116

• 4

319 392 +23 thereof Equity-method earnings

• 3

1

• 67

3 1

• 67

OCFbIT

• 178
• 169

+5 9

• 103
• 2
• 76
• 167
• 348
• 108

Investments 3 4 +33 46 40

• 13

15 30 +100 64 74 +16 Total UK Germany Sales Other

Details

E.ON standalone

78

• Offshore/Other

+ UK: Ramp-up capacity additions (Rampion)

• Onshore/Solar

+ US: Capacity additions (Bruenning’s Breeze, Radford’s Run)

– Subsidy expiries

Segments: Renewables

Renewables Renewables Highlights Highlights

61 58 99 113

+7%

Offshore/Other Onshore/Solar Q1 2018 171 Q1 2017 160 EBIT1 € m

• 1. Adjusted for non operating effects

€m Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Revenue 188 234 +24 188 167

• 11

376 401 +7 EBITDA 1 113 97

• 14

136 150 +10 249 247

• 1

EBIT 1 61 58

• 5

99 113 +14 160 171 +7 thereof Equity-method earnings 11 8

• 27

OCFbit 187 228 +22 Investments 251 180

• 28

Onshore Wind / Solar Offshore Wind / Others Total

Details

E.ON standalone

79

Non-core business

Non-core Non-core Highlights Highlights

27 124

• 15
• 51

+133

Generation Turkey Preussen Elektra Q1 2018 109 Q1 2017

• 24
• PreussenElektra

+ Higher volumes due to outages of all plants in Q1 2017 + Positive one-off effects in Q1 2018

– Lower achieved power prices

• Generation Turkey

+ Book loss from asset sale in Q1 2017 PreussenElektra: Hedged Prices (€/MWh) as of 31 March 2018

EBIT1 € m

• 1. Adjusted for non operating effects

29 29 26 32 2020 2019 2018 2017

80% 4% 99%

Details

100%

€m Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Q1 2017 Q1 2018 % YoY Revenue 364 278

• 24
• 364

278

• 24

EBITDA 1 74 159 +115

• 51
• 15

+71 23 144 +526 EBIT 1 27 124 +359

• 51
• 15

+71

• 24

109 +554 thereof Equity-method earnings 26 25

• 4
• 51
• 15

+71

• 25

10 +140 OCFbIT 207 112

• 46
• 207

112

• 46

Investments 5 7 +40 154

• 5

161

• Total

PreussenElektra Generation Turkey

E.ON standalone

80

Adjusted Net Income

€m Q1 2017 Q1 2018 % YoY EBITDA 1 1,517 1,715 +13 Depreciation/amortization

• 479
• 431

+10 EBIT 1 1,038 1,284 +24 Economic interest expense (net)

• 195
• 177

+9 EBT 1 843 1,107 +31 Income Taxes on EBT 1

• 210
• 277
• 32

% of EBT 1

• 25%
• 25%
• Non-controlling interests
• 108
• 103

+5 Adjusted net income 1 525 727 +38

• 1. Adjusted for non operating effects

E.ON standalone

81

Reconciliation of EBIT to IFRS Net Income

€m Q1 2017 Q1 2018 % YoY EBITDA 1 1,517 1,715 +13 Depreciation/Amortization/Impairments

• 479
• 431

+10 EBIT 1 1,038 1,284 +24 Economic interest expense (net)

• 195
• 177

+9 Net book gains 52 104 +100 Restructuring

• 94
• 26

+72 Mark-to-market valuation of derivatives

• 308

191 +162 Impairments (net) 3

• 100

Other non-operating earnings 394

• 87
• 122

Income/Loss from continuing operations before income taxes 890 1,289 +45 Income taxes

• 155
• 256
• 65

Income/loss from continuing operations 735 1,033 +41 Income/loss from discontinued operations, net

• Net income/loss

735 1,033 +41

• 1. Adjusted for non operating effects

E.ON standalone

82

Cash effective investments by unit

• 1. Adjusted for non operating effects

€m Q1 2017 Q1 2018 % YoY Energy Networks 260 271 +4 Customer Solutions 64 74 +16 Renewables 251 180

• 28

Corporate Functions & Other 8 9 +13 Consolidation 1

• Non-Core

5 161

• Investments

588 696 +18

E.ON standalone

83

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 AROs, 2. Net figure; does not include transactions relating to our operating business or asset management. €m 31 Dec 2017 31 Mar 2018 Liquid funds 5,160 4,108 Non-current securities 2,749 2,449 Financial liabilities

• 13,021
• 12,736

Adjustment FX hedging ² 114 166 Net financial position

• 4,998
• 6,013

Provisions for pensions

• 3,620
• 2,924

Asset retirement obligations

• 10,630
• 10,721

Economic net debt

• 19,248
• 19,658

E.ON standalone

84

Economic interest expense (net)

€m Q1 2017 Q1 2018 Difference (in € m) Interest from financial assets/liabilities

• 175
• 156

+19 Interest cost from provisions for pensions and similar provisions

• 21
• 16

+5 Accretion of provisions for retirement obligation and similar provisions

• 17
• 20
• 3

Construction period interests¹ 8 8 +0 Others 10 7

• 3

Net interest result

• 195
• 177

+18

• 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: 5.47%).

E.ON standalone

85

2025 0.0 2024 0.6 2023 0.4 2022 0.1 2021 0.8 2020 1.4 2019 1.1 2018 2.0 4.8 ≥2026 Other JPY USD GBP EUR

Financial Liabilities

Split Financial Liabilities

€ bn

31 Mar 2018 Bonds

• 10.7

in EUR

• 4.0

in GBP

• 3.9

in USD

• 2.4

in JPY

• 0.2

in other denominations

• 0.2

Promissory notes

• 0.4

Commercial papers 0.0 Other liabilities

• 1.6

Total

• 12.7

Maturity profile (as of end Q1 2018)1

€ bn

• 1. Bonds and promissory notes issued by E.ON SE and E.ON International Finance B.V. (fully guaranteed by E.ON SE).

E.ON standalone

86

E.ON Investor Relations contacts

T +49 (201) 184 2806 investorrelations@eon.com

Alexander Karnick T +49 (201) 184 28 38 Head of Investor Relations alexander.karnick@eon.com Martina Burger T +49 (201) 184 28 07 Manager Investor Relations martina.burger@eon.com

• Dr. Stephan Schönefuß

T +49 (201) 184 28 22 Manager Investor Relations stephan.schoenefuss@eon.com Andreas Thielen T +49 (201) 184 28 15 Manager Investor Relations andreas.thielen@eon.com

87

Financial calendar & important links

Financial calendar

August 8, 2018 Half-Year Financial Report: January – June 2018 November 14, 2018 Quarterly Statement: January – September 2018 March 13, 2019 Annual Report 2018 May 13, 2019 Quarterly Statement: January – March 2019

Important links

Presentations

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

Facts & Figures 2018

https://www.eon.com/content/.../presentations/facts-and-figures-2018.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

Bonds / Creditor Relations

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

Transaction Website: http://www.energyfortomorrow.eu/

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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.