it's on us
Capital Markets Story
March 2024
We are the playmaker of the green energy transition in Europe
Energy Networks
We operate the largest energy distribution grid in Europe being the backbone of the green energy transition and the most critical infrastructure for society
Top-3 markets
Regulated asset base1
- Germany: €25.6bn
- Sweden: €6.4bn
- Czech Republic: €2.6bn
Energy Infrastructure Solutions
Industries and cities face major energy supply challenges on their way to climate neutrality. We provide infrastructure solutions to support their decarbonization
Top-3 markets
Adj. EBITDA2
- Germany: €0.15bn
- UK: €0.16bn
- Sweden: €0.15bn
Energy Retail
We are helping millions of private households and enterprises on their individual green pathway to a net-zero future, providing energy to 47m customers2
Top-3markets3 Customers/electricity market share2
- Germany: 14m (25%)
- UK: 9m (18%)
- Netherlands: 4m (24%)
Capital Markets Story | 1. Total regulated asset base (power and gas) as per 31-Dec-2023 (see full definition on page 8) 2. As per 31-Dec-2023 3. Excluding equity participations Turkey & | 2 |
Slovakia |
We are uniquely positioned across the utility value chain focusing on electricity distribution and clean energy infrastructure
Large-scale | Power & Gas Transmission | Power & Gas Distribution | Supply & Services |
Generation | |||
Energy Networks (75%1)
Energy Infrastructure Solutions (10%1)
No activities and no legacy assets | Energy Retail (15%1) |
Capital Markets Story | 1. Illustrative average EBITDA share of total Group EBITDA over 2024-2028 plan | 3 |
New political reality fully backing secular growth momentum
Accelerated political targets | Operational growth momentum becoming evident | ||||||||||||
Share of renewables in EU energy consumption1 | Network connection requests in German E.ON networks | ||||||||||||
43% | +33% | 420k | +75% | ||||||||||
32% | 240k | ||||||||||||
Old 2030 | New 2030 | 2022 | 2023 | ||||||||||
target | target | ||||||||||||
Decarbonization targets for EU buildings2 | Investments into Energy Infrastructure Solutions |
50% | 60% | +20% | €684m | +30% |
€523m | ||||
Old 2030 | New 2030 | 2022 | 2023 | |
target | target | |||
Capital Markets Story | 1. European Commission revised Renewable Energy Directive 2023 2. Energy Performance of Buildings Directive | 4 |
Our investment case: Five reasons to invest in E.ON
Energy Networks | Energy Infrastructure | Energy Retail | Strategic Foundation | Financial Strategy |
Solutions |
Long-term growth in a | Growth acceleration | Reliable returns and | Digitalization and | Focus on value- |
regulated environment | from contracted | attractive cash | sustainability as | creation and |
infrastructure | generation | strategic backbones | shareholder returns |
Growth opportunities | Best-in-class energy | Healthy cashflows from | Pioneering the digital | Clear value-creation |
from the green energy | infrastructure | a capital light business, | transformation of the | focus and solid financial |
transition well into the | portfolio capitalizing | further expanded by | energy sector and | headroom ensuring an |
2030s and a regulated | upon decarbonization | cross-selling new | applying strict | attractive shareholder |
business nature provide | needs of cities and | solutions addressing the | sustainability criteria as | return outlook including |
for a steady and | industries | rising electrification | the core foundation for | dividends and earnings |
profitable earnings | demand | steering the company | growth | |
growth path |
Capital Markets Story | 5 |
Our business and financial strategy provide for attractive shareholder returns supported by a strong balance sheet
Financial capacity | Operational growth | Earnings growth | Shareholder renumeration |
Strong | 10% RAB | High-single-digit | Up to 5% |
BBB/Baa rating | growth p.a. | EBITDA and EPS growth | DPS growth |
€5-10bn extra balance sheet capacity | RAB CAGR 2022-2028 | Underlying CAGR 2023-2028 | p.a. 2023-2028 |
Capital Markets Story | 6 |
Energy Networks
Our distribution networks are vital to a successful green energy transition
~75%
EBITDA share4
Total RAB1,2 €42bn | |
Power: €36bn | |
Gas: €6bn | Gas |
FY2023 | |
Power | |
25.66.410.0
Germany | Sweden | CEE2,3 and Turkey2 |
Empowerment of the Energy Transition
~€3.8bn
RAB-effective investment, annual average 2024-2028
- Integration of expanding renewables
- Connection of new customer use cases
- Dynamization of the networks
Asset modernization
~€1.8bn
RAB-effective investment, annual average 2024-2028
Gas
~€0.5bn
RAB-effective investment, annual average 2024-2028
~20% of capex for digitalization5
Smartification of infrastructure, creating observability and controllability of the grid
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.
Capital Markets Story | These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network connections | 2. 100% view for Slovakia and Turkey | 8 |
3. Central Eastern Europe including Czech Republic, Hungary, Poland, Romania, Slovakia 4. Illustrative average EBITDA share of total Group EBITDA over 2024-2028 plan 5. Share of digitalization | |||
to RAB-effective investments in assets, annual average
Investment program is boosting our RAB growth to industry leading levels across core markets
E.ON power RAB development1 | Power RAB development key countries1 |
€bn | €bn |
~10% CAGR | 55 | |||||||
2022-2028 | Germany2 | |||||||
29 | 31 | 36 | ||||||
51 | ||||||||
28 | 29 | 33 | Sweden | |||||
2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
Czech | |
Fully consolidated RAB | Republic |
RAB from international participations Turkey & Slovakia |
~10% | |||
~34 | CAGR | ||
~19 | ~21 | 2022-2028 | |
2022 | 2023 | 2028 | |
~8% | |||
~5 | ~6 | ~8 | CAGR |
2022-2028 | |||
2022 | 2023 | 2028 | |
~9% | |||
~2 | ~2 | ~4 | CAGR |
2022-2028 | |||
2022 | 2023 | 2028 |
Capital Markets Story | 1. Total regulated asset base (power) as per 31-Dec-2023 (see full definition on page 8) 2. Assuming constant number of network concessions | 9 |
Regulated business' nature provides a predictable and profitable
earnings growth path with low country risk
Energy Networks
EBITDA1 in €bn
+7%
Underlying EBITDA CAGR
2023-2028
~8.3
6.6 6.7-6.9
One offs/ | ||||
Timing | 8.4 | |||
Underlying | ||||
6.0 | 6.3 | |||
2023 | ||||
2023 | 2024 | 2028 |
Highly predictable earnings profile with German and Swedish regulatory cycle matching mid-term plan horizon
Energy Networks returns
- Immediate guaranteed return on investments
- Long-terminfrastructure assets
- Regulatory stability over up to 5 years
- Positively geared towards inflation
- Digitization investments supporting efficiencies
- Ability to operationally outperform
Value creation spread of
150-200bps2
Energy Networks investments in AAA rated countries
Germany~72%4
AAA stable3
Sweden~9%4
AAA stable3
Czech | ~8%4 |
Republic | |
AA- stable3 |
Capital Markets Story | 1. Adjusted for non-operating effects | 2. Average 2024-28 ROCE over pre-tax cost of capital | 10 |
3. Credit Rating by Standard & Poor's | 4. RAB-effective investment share 2024-28 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
E.ON SE published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 17:04:01 UTC.