E ON : shows strength and reliability in crisis

Essen-based energy company E.ON can look back on a strategically and operationally successful 2019 financial year. 'We achieved all our strategic and operating targets. The focus on energy networks and customer solutions gives the new E.ON a robust business model. Our customers and shareholders can fully rely on E.ON, especially in a time of crisis,' E.ON SE's CEO Johannes Teyssen said at the company's first virtual Annual Shareholders Meeting. Teyssen addressed shareholders via a webcast. The meeting was originally to be held in Essen. The COVID-19 pandemic rendered this impossible. Teyssen emphasized that health and safety are paramount in these unusual times.

The virtual format ensures that E.ON's shareholders can, as usual, pose questions to the Management Board that are answered during the course of the meeting. Voting is online as well. Resolutions adopted in this way are fully valid.

innogy takeover concludes E.ON's corporate transformation

The crisis makes E.ON's high degree of stability and reliability particularly apparent, Teyssen said: 'The COVID-19 crisis reaffirms my conviction that the new E.ON is on the right course. After the innogy takeover, about 80 percent of our earnings are generated in regulated or quasi-regulated businesses, particularly in the network business. The corporate transformation to create the new E.ON by focusing on two growth businesses-energy networks and customer solutions-began in 2014 and was now brought to a strategic conclusion. I'm confident that we'll leverage the resulting synergies that we announced. This will reduce our controllable costs significantly: by about €740 million annually from 2022 onward.'

Strategic and operating targets for 2019 achieved

In the 2019 financial year, E.ON grew its sales to €41.5 billion (prior year: €30.1 billion), thereby again improving its results year on year. The more than €10 billion increase is primarily attributable to the acquisition of a majority stake in innogy in September 2019. Adjusted EBIT rose significantly to €3.2 billion (€3 billion). Adjusted net income of €1.5 billion was at the prior-year level.

Dividend to increase again

Teyssen reaffirmed the E.ON SE Management Board and Supervisory Board's dividend proposal: 'I told you at our last Annual Shareholders Meeting that E.ON will become progressively stronger, more calculable, more predictable. That's precisely what the innogy takeover has done. And so we're standing by the dividend promise we made in conjunction with it. As announced last year, today we propose that our shareholders adopt a resolution to pay a dividend of 46 cents per share for the 2019 financial year, following 43 cents per share for the prior year. That's the fourth consecutive increase. We're thus maintaining our policy of paying an attractive dividend. And we continue to plan to increase the dividend by up to 5 percent annually over the next three years.'

Business model resilient in corona pandemic

Teyssen emphasized that from today's perspective E.ON's business is resilient, including with regard to the corona pandemic. He added, however, that the pandemic has not left E.ON unaffected either; neither its future course nor the scope of its economic repercussions can be fully foreseen. E.ON is therefore monitoring the related risks very carefully and reviewing its assumptions on a regular basis. E.ON's statements about the remainder of the current financial year are cautious. The company nevertheless still anticipates that its adjusted EBIT and adjusted net income will be inside the forecast range. This factors in the measures already taken to combat COVID-19 but not adverse impacts from the remainder of the years that are today not apparent.

Good start to 2020 financial year

The first quarter of 2020 offered little evidence of the pandemic and its implications. Only the final three weeks of the first quarter were affected by the lockdown measures in the markets where E.ON operates. The E.ON Group's sales for the first three months of the year increased from €9.1 billion to €17.7 billion. Adjusted EBIT rose by €285 million to just under €1.5 billion. Adjusted net income was up slightly to €691 million.

Climate protection remains most important challenge

Teyssen stressed that E.ON, despite the corona crisis, will continue to do everything it can to combat climate change and foster a technologically advanced, customer-centric, and climate-friendly energy system. E.ON has made its own climate targets more ambitious. Teyssen said: 'The new E.ON leads by example. We're going to reduce our carbon footprint by 75 percent by 2030 and be carbon-neutral by 2040. In 2019 we partnered with our customers to avoid more than 100 million metric tons of carbon emissions. We're moving forward here too: as a partner in the transition toward a zero-emission society.'

He reaffirmed E.ON's planned investments in critical infrastructure for the energy transition and reiterated the company's commitment to make available an additional €500 million in investments for projects with customers to promote a better energy system and climate protection. 'We want to do our part to spur economic recovery after the crisis. We see interesting and promising projects with our customers in areas like the digital economy and eMobility, to which we want to provide additional support. We believe that accelerating the modernization of environmentally friendly energy infrastructure is a particularly effective way to combine climate protection and local job creation. In addition to our already planned investments, we intend to make available €0.5 billion more over the medium term for these technologies of the future,' Teyssen said.
Reduce costs for customers, accelerate planning processes

Teyssen reiterated his call to make green electricity cheaper and thus to propel the energy transition and reduce costs for consumers. 'Germany's funding scheme for renewables is no longer tenable. Neither from an economic nor from a social perspective. The crisis is now making the long-recognized inadequacies of Germany's Renewable Energy Act even more apparent. That's why I advocate to permanently cap Germany's renewables levy at a maximum of 5 cents per Kilowatt hour and permanently reduce its electricity tax to the EU's minimum rate of 0.05 cents per Kilowatt hour. A family that consumes just over 3,500 Kilowatt hour per year would experience savings of more than €200 on a gross basis. The owner of a bakery business that consumes 50,000 to 60,000 Kilowatt hour per year would save up to €3,000. Medium-sized enterprises would benefit even more. There's now been movement in the policy debate on Germany's electricity tax and the renewables levy. That's good but can only be a start.'

Over the medium term, the decline in these revenues should be replaced by the revenues from Germany's new effective carbon tax. This, Teyssen said, would enhance the incentives for the transition to green electrification. It would promote more investment in sustainability across all sectors of the economy, from mobility to industry. It would also improve the energy infrastructure in cities and communities. In addition, Teyssen called for Germany's planning and consents processes to be revamped: 'It's unacceptable that these processes can last more than five years, like they do today. Germany needs to set a maximum duration for them. This would make the modernization of Germany's infrastructure competitive. This also means that Germany needs to reexamine the cherished right to participate in such processes and to file lawsuits against projects. A limit needs to be set here as well. Because our society must face the future after corona with all its strength and without getting in its own way.'