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Investor Presentation – E.On

E.On · Jan 30, 2014 · 58 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Investor Presentation – E.On – slide 1
    E.ONs European distribution business Powering the energy system transformation 30 January 2014
  2. Investor Presentation – E.On – slide 2
    Agenda E.ONs European distribution business Sweden Germany Back-up 2
  3. Investor Presentation – E.On – slide 3
    Overview S D Business overview Map of E.ONs distribution networks Regional Network length Market share Unit (000 km) (in %) Power Gas Power Gas Germany 352 59 19 14 Sweden 134 2 24 60 Hungary 84 18 50 20 Romania 79 20 17 49…
  4. Investor Presentation – E.On – slide 4
    Overview S D Distribution in E.ON group context Position within group context Expected 2013 Distribution EBITDA by region Expected 2013 Group EBITDA 9.2 to 9.3bn 3.2 to 3.4bn Distributed energy Southern Europe & others 11%…
  5. Investor Presentation – E.On – slide 5
    Overview S D Business environment and strategic priorities Business environment Continuously deliver and improve top performance Deliver top performance as basis for good relations with Improving regulatory environment customers…
  6. Investor Presentation – E.On – slide 6
    Overview S D Networks are enablers for new energy systems E.ONs expected total capex Cross-regional synergies: smart metering for renewables integration in millions Regional Number of Roll-out unit smart meters period (in…
  7. Investor Presentation – E.On – slide 7
    Overview S D Distribution capex plan Expected distribution capex by category Expected distribution capex vs. regulatory depreciation p.a. 201416: 1.5bn 1.5 1.0 0.5 Other mandatory Maintenance & replacement…
  8. Investor Presentation – E.On – slide 8
    Overview S D Contribution to group portfolio Pro forma distribution EBITDA* E.ONs mid-term portfolio target Germany Other EU Countries bn Bubble sizes represents 4 EBITDA contribution + Brazil Turkey 3 ECR* Rus- DE* sia…
  9. Investor Presentation – E.On – slide 9
    Agenda E.ONs European distribution business Sweden Germany Back-up 9
  10. Investor Presentation – E.On – slide 10
    Overview S D Energy market overview Market characteristics Market specifics Stable power demand 150TWh Power with central role in energy mix Sound economic development: also heating, e.g. heat pumps Stable 1.2 % GDP growth…
  11. Investor Presentation – E.On – slide 11
    Overview S D Business overview Network area Power Network area Gas Key data 2013 Key data 2013 Network length 134,400 km Network length 1,855 km 1600 km Market share Market share (based on 24% (based on 60% network…
  12. Investor Presentation – E.On – slide 12
    Overview S D Business model distribution Business model Cornerstones Business model Guiding principles Customer orientation Distinct customer focus and efficiency as our core identity Lean process development and automation…
  13. Investor Presentation – E.On – slide 13
    Overview S D Regulation General basics Principles of regulation model Elements of regulation model Quality of supply: requirements on the supply to fulfill good quality criteria (11 outages per customer and year not accepted)…
  14. Investor Presentation – E.On – slide 14
    Overview S D Regulation Building blocks of allowed revenues RAB Based on replacement value (RV) of all physically existing assets irrespective of actual age of assets ( RAB = 84% of RV) (Regulated New investments are included in…
  15. Investor Presentation – E.On – slide 15
    Overview S D Regulation Development of allowed revenues Revenue cap for the period 2012-2015 (accumulated): translates into yearly 38.2bn SEK (in 2010 money)* revenue caps (in nominal terms) bn SEK 10 8 6 4 2 0…
  16. Investor Presentation – E.On – slide 16
    Overview S D Performance Quality Network quality Customers (000) without power after hurricane/storms per day 250 Gudrun 2005 Simone 2013/10/28 Sven 2013/12/05 200 Per 2007 Hilde 2013/11/16 Specific Nordic 150 challenges:…
  17. Investor Presentation – E.On – slide 17
    Overview S D Performance Efficiency Efficiency vs. peers Regulatory benchmarking of local grids Opex / CSV* MSEK Effective contractor management 100 Leverage technical services market via tender process for regional contracts…
  18. Investor Presentation – E.On – slide 18
    Overview S D Enabler of energy system transformation I Renewables network connections DSO compensation for network connections MW 400 2.800 Grid Internal grid Wind farm 350 2.400 Substation 400/130 300 2.000 250 Substation 130/30…
  19. Investor Presentation – E.On – slide 19
    Overview S D Enabler of energy system transformation II Overview: use of smart technologies Case study: dynamic line rating Active management of capacities Starting point: stressed power grid on land, network congestions 1-3% of…
  20. Investor Presentation – E.On – slide 20
    Overview S D Business outlook Opportunities in market consolidation Case study: Kramfors Highly fragmented distribution market with Excellent geographical fit: an island within E.ONs 165 distribution companies with strongly…
  21. Investor Presentation – E.On – slide 21
    Overview S D Financial outlook Investments in power distribution Earnings in power distribution in bn SEK in bn SEK 4 5 Actuals Actuals Expected Expected 4 3 3 2 2 1 1 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  22. Investor Presentation – E.On – slide 22
    Overview S D Key takeaways Sweden delivers robust earnings resulting from outstanding performance Top performance is the key driver to balance out all stakeholder interests The energy transition is challenging but presents…
  23. Investor Presentation – E.On – slide 23
    Agenda E.ONs European distribution business Sweden Germany Back-up 23
  24. Investor Presentation – E.On – slide 24
    Overview S D Germany Business overview Network overview Key figures E.ON grids Market share Grid P 6.9m 16% customers G 0.8m 5% P 352,000km 19% Grid length G 59,000km 14% Installed RES P 26GW 37% P 3,800 28% Concessions G…
  25. Investor Presentation – E.On – slide 25
    Overview S D Distribution in Regional Unit Germany context 2012 results (in Euro) E.ON Germany thereof Distribution thereof going concern* Sales 40.3 billion 12.7 billion 10.5 billion EBITDA 2.8 billion 1.8 billion 1.4…
  26. Investor Presentation – E.On – slide 26
    Overview S D Concessions E.ON as partner of municipalities Expiring concessions (power & gas) per year Concessions Our business backbone m of allowed revenues Renewal of concessions at least every 20 years 450 400 Many areas have…
  27. Investor Presentation – E.On – slide 27
    Overview S D Regulation General basics Process steps of regulatory system Revenue cap incentive regulation Cost Audit Cost audit and benchmarking once per + every 5 years regulatory period (5 years) Benchmarking Total costs of…
  28. Investor Presentation – E.On – slide 28
    Overview S D Regulation Regulatory schedule Power distribution* Comments 1st regulatory period 2nd regulatory period 3rd Cost of base year 2011 are basis for allowed revenues from 2014 onwards Regulatory cost audit and…
  29. Investor Presentation – E.On – slide 29
    Overview S D Regulation Cost base Composition of cost base Cost base = Allowed Cost structure of efficient system operator OPEX Including actual cost of debt + Allowed Equity financed part of the Regulated Asset Base Return…
  30. Investor Presentation – E.On – slide 30
    Overview S D Performance License to operate Cost efficiency power & gas Quality regulation Best in Class in cost efficiency benchmarking Better quality than required by regulator Power, 2nd regulatory period 100 min/a…
  31. Investor Presentation – E.On – slide 31
    Overview S D Performance Earnings drivers Building blocks of EBITDA Other earnings (e.g. third party business, participations, aperiodic effects) 17% Additional remuneration 12% Allowed profit for grid expansion 59%…
  32. Investor Presentation – E.On – slide 32
    Overview S D Energiewende* E.ON networks as enabler Example E.DIS: RES installed capacity Key challenges in MW 8,000 Distribution grid originally designed to distribute 7000 power up to maximum load RES installed capacity…
  33. Investor Presentation – E.On – slide 33
    Overview S D Energiewende E.ON as innovation pioneer Examples of application of smart technologies Controllable mid-voltage/low-voltage-secondary sub-station Enables an increased in-feed of renewables in low voltage networks by…
  34. Investor Presentation – E.On – slide 34
    Overview S D Political perception of DSO role in Energiewende Rising awareness for situation of DSOs Governments coalition agreement from December 2013 DSOs are the backbone of the Energiewende on the ground because the…
  35. Investor Presentation – E.On – slide 35
    Overview S D Financial outlook CAPEX Earnings Outlook Expected cash-effective investments (bn) Expected EBITDA (bn) 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 2013E* 2014E 2015E 2016E 2013E* 2014E 2015E 2016E RES…
  36. Investor Presentation – E.On – slide 36
    Overview S D Key takeaways Distribution: high-performing business with attractive earnings and moderate risks E.ON networks in Germany are best-in-class The Energiewende is a growth opportunity for us 36
  37. Investor Presentation – E.On – slide 37
    Backup Overview Sweden Germany Other EU Countries Czech Republic Hungary Slovakia Romania Spain IR team and calendar 37
  38. Investor Presentation – E.On – slide 38
    Overview Overview RAB and regulatory periods Regulated asset base 2013/2014 (bn)1 Regulatory periods Germany 10 Power Gas Sweden 9.1 Germany 2014-2018 2013-2017 Spain 0.82 Sweden 2012-2015 2013-2016 Hungary 1.5 Spain 2013-2016…
  39. Investor Presentation – E.On – slide 39
    Sweden Regulation Building blocks of allowed revenues Schematic illustration (power) RAB based on Allowed Capex Opex allowance Pass-through Quality Revenue cap Under-/over- replacement value calculated as based on actual of non-…
  40. Investor Presentation – E.On – slide 40
    * ** Regulated asset base* Old assets: current costs New assets: historic costs Debt base (related to actual capital 2.6bn gas 7.4bn power structure, minimum 60%) 40% Cap determine the current costs Regulated Equity base…
  41. Investor Presentation – E.On – slide 41
    Germany Regulation How it works in detail German regulation formula EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St EOt Revenue Cap VPIt Consumer inflation index for the year t for the year t…
  42. Investor Presentation – E.On – slide 42
    Germany Regulation Formula German regulation formula decomposed EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St 1 2 3 4 5 6 Revenue cap = CPI and general Expansion 1 Cost base x 2…
  43. Investor Presentation – E.On – slide 43
    Germany Regulation Breakdown of TOTEX German regulation formula decomposed EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St KAdnb,t Permanently non controllable cost (11 II ARegV)* Yearly…
  44. Investor Presentation – E.On – slide 44
    Germany Regulation Breakdown of TOTEX German regulation formula decomposed EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St KAdnb,t Permanently non-controllable cost Example: 20.- EUR (due to…
  45. Investor Presentation – E.On – slide 45
    Germany Regulation Inflation and general efficiency German regulation formula decomposed EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St VPIt / VPI0 Adjustment for inflation (8 ARegV)* Customer…
  46. Investor Presentation – E.On – slide 46
    Germany Regulation Network expansion German regulation formula decomposed EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St EFt RES growth factor (10 ARegV)* Regulatory instrument for…
  47. Investor Presentation – E.On – slide 47
    Germany Regulation Quality and regulatory account German regulation formula decomposed EOt = KAdnb,t + (KAvnb,0 + (1- Vt) KAb,0) (VPIt / VPI0 PFt) EFt + Qt + (VKt VK0) + St Qt Quality element (19 ARegV)* Introduction in 2012 aiming…
  48. Investor Presentation – E.On – slide 48
    Germany From sales to allowed revenues German distribution Composition of sales* (bn) 11.9 6.5 4.8 0.6 Sales RES Allowed Other surcharge revenues DSOs are legally obliged to purchase all power produced by the renewables…
  49. Investor Presentation – E.On – slide 49
    Czech Republic Overview CZ power Price regulation of distribution Price regulation power - Overview Price regulation power Key cost factors Method: revenue cap Regulated return on RAB (pre-tax): 6.7% Regulation period: 2010-2014 (3rd)…
  50. Investor Presentation – E.On – slide 50
    Czech Republic Overview CZ gas Price regulation of distribution Price regulation gas - Overview Price regulation gas Key cost factors Method: revenue cap Regulated return on RAB (pre-tax): 7.1% Regulation period: 2010-2014 (3rd)…
  51. Investor Presentation – E.On – slide 51
    Hungary Overview HU power Price regulation of distribution Price regulation power - Overview Price regulation power Key cost factors Method: modified price cap with real Regulated return on RAB (pre-tax): 6.23% quantity acceptation…
  52. Investor Presentation – E.On – slide 52
    Hungary Overview HU gas Price regulation of distribution Price regulation gas - Overview Price regulation gas Key cost factors Method: price cap Regulated return on RAB (pre-tax): Regulation period: 2010-2013 period is different for…
  53. Investor Presentation – E.On – slide 53
    Slovakia Overview SK power Price regulation of distribution Price regulation power - Overview Price regulation power Key cost factors Method: price cap Regulated return on RAB (pre-tax): revaluated Regulation period: 2012-2016…
  54. Investor Presentation – E.On – slide 54
    Romania Overview RO power Price regulation of distribution Price regulation power - Overview Price regulation power Key cost factors Method: price cap Regulated return on RAB (pre-tax): 8.5% Regulation period: 2008-2012 (2nd) RAB:…
  55. Investor Presentation – E.On – slide 55
    Romania Overview RO gas Price regulation of distribution Price regulation gas - Overview Price regulation gas Key cost factors Method: price cap Regulated return on RAB (pre-tax): 8.6% Regulation period: 2008-2012 (2nd) RAB:…
  56. Investor Presentation – E.On – slide 56
    Spain Overview ES Price regulation of power distribution Energy Reform launched in July13 in order to tackle the tariff deficit issue in Spain and review system regulated costs. 2013 & 2014 transition regulatory scenario approved. New…
  57. Investor Presentation – E.On – slide 57
    E.ON Investor Relations Contact Dr. Marc Spieker Head of IR T+49 2 11-45 79-3 45 marc.spiekereon.com Peter Blankenhorn Regions/Sales, SRI, Retail, T +49 2 11-45 79-4 81 Facts & Figures peter.blankenhorneon.com Franois Poullet…
  58. Investor Presentation – E.On – slide 58
    E.ON IR - Reporting calendar & important links Reporting calendar Date Event March 12, 2014 Annual Report 2013 April 30, 2014 2014 Annual Shareholders Meeting May 13, 2014 Interim Report I: January March 2014 August 13, 2014…

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