Quarterly Report • Nov 11, 2020
Quarterly Report
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| Nine months | |||
|---|---|---|---|
| € in millions | 2020 | 2019 | +/- % |
| Power passthrough (billion kWh) | 234.0 | 137.0 | +71 |
| Gas passthrough (billion kWh) | 140.1 | 94.3 | +49 |
| Power sales (billion kWh) | 252.3 | 103.0 | +145 |
| Gas sales (billion kWh) | 241.4 | 97.1 | +149 |
| Sales1 | 43,314 | 23,398 | +85 |
| Adjusted EBITDA1, 2 | 4,966 | 3,742 | +33 |
| Adjusted EBIT1, 2 | 2,688 | 2,208 | +22 |
| Net income/Net loss | 1,210 | 2,305 | -48 |
| Net income/Net loss attributable to shareholders of E.ON SE | 1,002 | 2,101 | -52 |
| Adjusted net income1, 2 | 1,089 | 1,177 | -7 |
| Investments1 | 2,374 | 4,018 | -41 |
| Cash provided by operating activities1 | 3,688 | 1,625 | +127 |
| Cash provided by operating activities before interest and taxes1 | 4,063 | 2,735 | +49 |
| Economic net debt (September 30 and December 31)1 | 42,092 | 38,895 | +8 |
| Earnings per share3, 4 (€) | 0.38 | 0.96 | -60 |
| Adjusted net income per share1, 3, 4 (€) | 0.42 | 0.54 | -22 |
| Shares outstanding (weighted average; in millions) | 2,607 | 2,188 | +19 |
1Includes the discontinued operations in the Renewables segment until September 18, 2019.
2Adjusted for non-operating effects.
3Based on shares outstanding (weighted average). 4Attributable to shareholders of E.ON SE.
E.ON's operating business delivered a solid performance in the first nine months of 2020. Sales and earnings were higher due to the innogy takeover, whereas the COVID-19 pandemic's economic repercussions had an adverse impact on E.ON's operations. Sales rose by €19.9 billion year on year to €43.3 billion. Nine-month adjusted EBIT in E.ON's core businesses of €2,390 million was 27 percent above the prior-year figure of €1,882 million. The E.ON Group's current-year adjusted EBIT rose by 21 percent relative to the prior-year period, from €2,208 million to €2,688 million. Adjusted net income of €1,089 million was 7 percent below the prior-year figure of €1,177 million.
These figures' development in the first three quarters of 2020 mainly reflects the inclusion of innogy operations, which were only contained in the prior year from September 18 onward. The transfer of substantially all of the renewables business to RWE was a countervailing factor.
The innogy takeover successfully closed in 2019. Effective January 1, 2020, innogy's operations are no longer managed and disclosed as a separate segment but rather integrated into Energy Networks, Customer Solutions, and Corporate Functions/Other. innogy's network businesses were assigned to Energy Networks. Its power and gas sales along with new customer solutions (such as eMobility services) are reported at Customer Solutions. Corporate Functions/Other includes innogy's corporate functions and internal services. After substantially all of the Renewables segment was transferred to RWE, its remaining businesses are reported at Energy Networks in Germany, Customer Solutions in the United Kingdom, and Corporate Functions/Other. Customer Solutions' Germany unit now includes the heating business formerly disclosed at its Other unit. In addition, three E.ON Business Solutions companies were transferred from Customer Solutions' Other unit to its United Kingdom unit. Where necessary, the prior-year figures were adjusted accordingly.
On March 4, 2020, the Extraordinary General Meeting of innogy SE adopted a resolution to transfer the remaining minority shareholders' innogy stock. The merger squeeze-out adopted at the meeting took effect when the transfer resolution and merger were entered into the Commercial Register on June 2, 2020. In early June cash compensation totaling €2.4 billion was paid to minority shareholders. In addition, minority shareholders' -€0.2 billion stake in innogy SE was subtracted from Group equity and the shareholders' ratio was adjusted. The resulting difference of €2.6 billion was offset against retained earnings of E.ON SE shareholders.
At the conclusion of the squeeze-out, the €5 billion in acquisition financing E.ON originally arranged, which had been reduced to €1.75 billion in August 2018, was cancelled.
In the first nine months of 2020 E.ON issued various corporate bonds totaling €5 billion. The high level of investor demand enabled E.ON to secure favorable interest terms across all maturities (month of issuance in parenthesis):
On August 13, 2020, E.ON launched transactions to harmonize the new E.ON Group's funding structure. These transactions involve E.ON offering innogy bondholders the option to change the debtor of roughly €11.5 billion in bonds to E.ON. The offer gave innogy bondholders the option to hold bonds that have the same status as current E.ON bonds. It will also ensure that all debt investors are treated equally. The transactions are expected to be completely concluded in the fourth quarter of 2020.
In March 2020 E.ON reached a contractual agreement on a strategic partnership with Kraken Technologies, a subsidiary of Octopus Energy. The strategic partnership, E.ON Next, uses Kraken Technologies' technology platform and will transform E.ON UK's business with residential and small and medium enterprise customers.
E.ON and Kraken Technologies will further improve the platform in order to offer outstanding customer service founded on the principles of customer orientation, simplicity, transparency, and cost-efficiency. In the first phase, npower's customers are currently being migrated to the new platform; E.ON UK's customers will be migrated in the second phase.
E.ON Beteiligungen GmbH held all of the shares of PEG Infrastruktur AG ("PEGI") and thus an indirect, 15.5-percent stake in Nord Stream AG. Nord Stream AG, a project company founded in 2005, owns and operates two offshore gas pipelines, each with a length of 1,224 kilometers, that transport natural gas from Russia to Germany. In a contract dated December 18, 2019, E.ON Beteiligungen GmbH sold all of its PEGI shares and thus its indirect stake in Nord Stream AG to E.ON Pension Trust e.V. ("EPT") with effect and for the account of the trust assets of MEON Pensions GmbH & Co. KG ("MEON"). The shares were transferred at the end of 2019. The purchase price of €1.1 billion was paid at the start of 2020.
Fully consolidated E.ON Group companies E.ON NA Capital, Inc. and E.ON RE Investments LLC sold real estate assets in the amount of roughly US\$248 million to EPT, which is not fully consolidated, in the second and third quarters of 2020. The payments were received primarily in the third quarter of 2020.
E.ON's top priorities during the COVID-19 pandemic remain a secure energy supply and the safety of employees and customers. E.ON's power, gas, and heat networks, which secure the energy supply in large parts of Europe, continue to run stably, even under these difficult conditions. E.ON was able to draw on previously prepared pandemic and crisis plans, which it implemented accordingly. This has made it possible to maintain all key functions. The most important measures included strict adherence to hygiene and social-distancing rules as well as the isolation of particularly sensitive work areas, such as network control centers. In addition, technicians who do field work on the network have special equipment to minimize the risk of infection. In many parts of the company, E.ON made arrangements for a large proportion of employees to work from home, enabling the provision of customer service as well.
As many European countries relaxed the restrictions on public life and the economy in the summer, E.ON too took steps to enable many of its employees to return to their jobs responsibly. The third quarter saw a renewed rise in COVID-19 infections across Europe that continued into October and November and, in many cases, exceeded the peaks recorded during the lockdown in the spring. This resulted in many cities and regions being classified as high-risk areas, which in such cases led to additional selective restrictions on daily life. E.ON is continuously analyzing the risk situation resulting from the COVID-19 pandemic and, if necessary, will take additional measures. In addition, E.ON temporarily shortened work schedules, particularly in the United Kingdom, and availed itself of related government support, which for the E.ON Group is, on balance, negligible.
Other impacts of the COVID-19 pandemic on E.ON's business are described in Earnings Situation, the updated Forecast Report, and the updated Risks and Chances Report.
With regard to the innogy takeover, the European Commission, among other things, imposed conditions requiring the disposal of certain E.ON and innogy businesses in Eastern Europe.
To fulfill one of these conditions, on July 10, 2020, E.ON and MVM Group signed an agreement regarding the sale of innogy Česká republika a.s. and thus innogy SE's entire electricity and gas retail business in the Czech Republic. Pursuant to IFRS 5, E.ON had already reclassified these innogy operations in the Czech Republic as discontinued operations effective September 30, 2019. At the balance-sheet date, a comparison of the book value of these operations in the Czech Republic with their fair value less disposal costs resulted in no need for additional impairment charges. The transaction was cleared by the European Commission at the end of October and subsequently closed on October 30, 2020. The parties agreed not to disclose the purchase price.
Another of the European Commission's conditions was the sale of E.ON Energie Deutschland's heating electricity business in Germany. The portfolio of contracts consists of all special contracts with customers supplied with heating electricity and, if such customers also procure household electricity for which there is a separate meter at the same premises, the corresponding household electricity contract. In preparation for the sale, the portfolio of contracts was separated into two newly founded companies, E.ON Heizstrom Nord GmbH ("EHN") and E.ON Heizstrom Sü d GmbH ("EHS"). Pursuant to IFRS 5, due to the obligation to sell these operations, E.ON had reclassified the heating electricity business as a disposal group effective September 30, 2019. The sale of EHN and EHS closed on April 28, 2020.
In addition, on September 23, 2020, E.ON sold its subsidiary E.ON Energiakereskedelmi Kft. ("EKER"), which operates its nonregulated retail electricity business for commercial customers in Hungary, to Audax Renovables. The parties agreed not to disclose the purchase price. Pursuant to IFRS 5, E.ON had already reclassified EKER's business as a disposal group effective September 30, 2019, owing to its obligation to dispose of these operations.
By closing these transactions E.ON completely fulfilled the antitrust conditions in conjunction with the innogy takeover. Previously E.ON had withdrawn from the operation of a number of electric-vehicle charging stations located along motorways in Germany
In August 2020 E.ON completed the acquisition of 49 percent of the shares in VSE Holding ("VSE") from RWE. Extensive decision-making powers over VSE's business operations give E.ON a controlling influence pursuant to IFRS. VSE is therefore fully consolidated and accounted for using the acquisition method in accordance with IFRS 3. The parties to the agreement agreed not to disclose the price for the acquisition of the stake. The purchase price to be paid to RWE was not cash-effective. It was offset against an open receivable in conjunction with the acquisition of RWE's innogy stake, which closed on September 18, 2019. The transaction therefore had no material impact on current-year cash flow.
The accounting of the innogy acquisition was finalized in the third quarter of 2020. New insights gained by September 18, 2020, into the amount of acquisition costs and acquired assets, including goodwill and liabilities, led to retrospective adjustments, including resulting changes to the Consolidated Balance Sheets at December 31, 2019. Goodwill increased by €197 million relative to the figure recorded at year-end 2019, mainly because of changes in the valuation of certain assets acquired in the takeover.
E.ON's nine-month sales increased by €19.9 billion year on year to €43.3 billion.
Energy Networks' sales of €13 billion surpassed the prior-year figure by €5.9 billion. This is principally attributable to the inclusion of innogy operations, primarily in Germany (+€5.4 billion).
Customer Solutions' sales rose by €17.4 billion to €34.3 billion. This increase likewise resulted mainly from the inclusion of innogy, in particular in Germany (+€10 billion), the United Kingdom (+€4.8 billion), and the Netherlands/Belgium (+€2 billion).
Substantially all of the Renewables segment was transferred to RWE in September 2019. Its operations that remain at E.ON are disclosed in other segments (see page 3). Effective 2020 the Renewables segment therefore no longer exists.
Sales at Non-Core Business increased significantly year on year, in particular because PreussenElektra benefitted from higher sales prices. This was partially offset by a decline in sales resulting from the transfer of stakes in power stations to RWE in September 2019.
Sales recorded at Corporate Functions/Other of €0.9 billion were €0.5 billion above the prior-year figure. The increase is mainly attributable to services performed for innogy companies (such as IT, commodity procurement, and so forth).
| Third quarter | Nine months | ||||||
|---|---|---|---|---|---|---|---|
| € in millions | 2020 | 2019 | +/- % | 2020 | 2019 | +/- % | |
| Energy Networks | 4,245 | 2,622 | +62 | 13,032 | 7,128 | +83 | |
| Customer Solutions | 9,820 | 5,126 | +92 | 34,346 | 16,949 | +103 | |
| Renewables | – | 254 | – | – | 948 | – | |
| Non-Core Business | 332 | 301 | +10 | 1,028 | 866 | +19 | |
| Corporate Functions/Other | 285 | 206 | +38 | 953 | 484 | +97 | |
| Consolidation | -1,871 | -1,125 | -66 | -6,045 | -2,977 | -103 | |
| E.ON Group | 12,811 | 7,384 | +73 | 43,314 | 23,398 | +85 |
1Includes the discontinued operations in the Renewables segment until September 18, 2019. Sales from continuing operations amounted to €22.9 billion in the first nine months of 2019. 2Includes effects resulting from failed-own-use contracts; prior-year figures were adjusted accordingly.
For the purpose of internal management control and as the most important indicator of businesses' long-term earnings power, E.ON uses earnings before interest and taxes that have been adjusted to exclude non-operating effects ("adjusted EBIT"). The prior-year figure includes the operating earnings of the discontinued operations in the Renewables segment prior to their deconsolidation on September 18, 2019.
The core business's nine-month adjusted EBIT rose significantly—by €508 million—year on year. Factoring in countermeasures, the impact of the COVID-19 pandemic adversely affected the Group's current-year earnings by a figure in the low three-digit million euro range. These effects occurred mainly at the U.K. sales business and the network business in Germany. They consist primarily of lower sales and an increase in other operating expenses.
Energy Networks' adjusted EBIT was €890 million above the prioryear level. The inclusion of innogy's operations in Germany was the principal reason. A lower regulated return in Sweden was the primary countervailing factor. In addition, sales in Germany declined owing to weather factors and COVID-19's repercussions.
Adjusted EBIT at Customer Solutions rose by €137 million year on year. The inclusion of innogy businesses, particularly in Germany and the Netherlands/Belgium, contributed to the increase. Adjusted EBIT also rose primarily because of significant cost savings at the previous E.ON business in the United Kingdom. These items were partially offset primarily by the negative
| Third quarter | Nine months | |||||
|---|---|---|---|---|---|---|
| € in millions | 20201 | 2019 | +/- % | 2020 | 2019 | +/- % |
| Energy Networks | 679 | 393 | +73 | 2,331 | 1,441 | +62 |
| Customer Solutions | -102 | -11 | – | 378 | 241 | +57 |
| Renewables | – | 45 | – | – | 301 | – |
| Corporate Functions/Other | -132 | -20 | – | -318 | -109 | – |
| Consolidation | 1 | 3 | – | -1 | 8 | – |
| Adjusted EBIT from core business | 446 | 410 | +9 | 2,390 | 1,882 | +27 |
| Non-Core Business | 57 | 81 | -30 | 298 | 326 | -9 |
| E.ON Group adjusted EBIT | 503 | 491 | +2 | 2,688 | 2,208 | +22 |
1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous quarters were adjusted accordingly.
earnings of innogy's U.K. operations and weather-related effects at the previous E.ON sales business in Germany and the United Kingdom. In addition, the repercussions of COVID-19 had an adverse impact on earnings, primarily in Germany and the United Kingdom.
Substantially all of the Renewables segment was transferred to RWE in September 2019. Its operations that remain at E.ON are disclosed in other segments (see page 3). Effective 2020 the Renewables segment therefore no longer exists.
Corporate Functions/Other's adjusted EBIT declined by €209 million year on year to -€318 million,especially because of the inclusion of innogy's corporate functions for the entire reporting period. Another adverse factor was that the prior-year figure included earnings on the stake in Nord Stream AG, which was transferred to the CTA at the end of 2019.
The E.ON Group's adjusted EBIT was €480 million above the prior-year figure. The increase resulted primarily from the aforementioned items in the core business. Non-Core Business's earnings were below the prior-year level. PreussenElektra's adjusted EBIT was slightly higher, in particular because of higher sales prices, which were partially offset by higher expenditures for residual power output rights and a decline in earnings resulting from the transfer of stakes in power plants to RWE. By contrast, equity earnings from Enerjisa Üretim in Turkey declined significantly. Operating improvements were more than offset by adverse currency-translation effects due to the significant weakening of the Turkish lira and impairment charges for certain legacy projects.
Like net income, EBIT (earnings before interest and taxes) is affected by non-operating items, such as the marking to market of derivatives. Adjusted EBIT has been adjusted to exclude nonoperating effects. The adjustments include net book gains, certain restructuring expenses, impairment charges and reversals, the marking to market of derivatives, the subsequent valuation of hidden reserves and liabilities identified as part of the purchaseprice calculation and allocation for the innogy transaction, and other non-operating earnings.
Derived from adjusted EBIT, adjusted net income is an earnings figure after interest income, income taxes, and non-controlling interests that likewise has been adjusted to exclude non-operating effects. The adjustments include the aforementioned items as well as interest expense/income not affecting net income (after taxes and non-controlling interests). Non-operating interest expense/income also includes effects from the resolution of the difference between the nominal and fair value of innogy bonds.
The disclosures in the Consolidated Statements of Income are reconciled to the adjusted earnings metrics below.
E.ON recorded net income attributable to shareholders of E.ON SE of €1 billion and corresponding earnings per share of €0.38. In the prior-year period E.ON recorded net income of €2.1 billion and earnings per share of €0.96.
Pursuant to IFRS 5, income/loss from discontinued operations, net, is reported separately in the Consolidated Statements of Income. In the first nine months of 2020, this item includes negative effects from the subsequent adjustment of certain components of the purchase price in conjunction with the innogy acquisition and positive earnings from innogy's sales business in the Czech Republic. The prior-year figure primarily includes the earnings from the discontinued operations at Renewables. Alongside the operating earnings of discontinued operations, this figure contains items resulting from the deconsolidation. In this context, items previously recognized in equity were recorded in income. This figure also includes the earnings from the transitional consolidation of Rampion wind farm following the reduction in E.ON's stake to 20 percent.
E.ON's tax expense on continuing operations rose from €354 million to €712 million. The tax rate on net income from continuing operations declined from 39 percent to 36 percent. The main reason for the high tax rate in the period under review was a one-off item related to the revaluation of deferred tax assets in the first half of 2020, which was partially offset by taxes for prior years. The high tax rate in the prior-year period is mainly attributable to expenditures that do not reduce tax exposure.
Financial results were at the prior-year level. A reduction in adverse items relating to the valuation of non-current provisions and income for prior years led to an increase in financial results. The inclusion of innogy and the marking to market of securities held for trading purposes, which is disclosed in non-operating earnings, had a countervailing effect. Financial results also include a positive effect of €249 million resulting from the resolution of the difference between the nominal and fair value of innogy bonds.
Net book gains were significantly higher than in the prior-year period, principally because of the disposal of substantial parts of the heating electricity business in Germany and EKER in Hungary (see page 5).
| Third quarter | Nine months | |||
|---|---|---|---|---|
| € in millions | 20201 | 2019 | 2020 | 2019 |
| Net income/loss Attributable to shareholders of E.ON SE Attributable to non-controlling interests |
641 620 21 |
1,763 1,716 47 |
1,210 1,002 208 |
2,305 2,101 204 |
| Income/Loss from discontinued operations, net | -25 | -1,550 | 38 | -1,759 |
| Income/Loss from continuing operations | 616 | 213 | 1,248 | 546 |
| Income taxes | 24 | 109 | 712 | 354 |
| Financial results | 219 | 129 | 496 | 522 |
| Income/Loss from continuing operations before financial results and income taxes | 859 | 451 | 2,456 | 1,422 |
| Income/Loss from equity investments | -16 | 19 | 39 | 61 |
| EBIT | 843 | 470 | 2,495 | 1,483 |
| Non-operating adjustments Net book gains (-)/losses (+) Restructuring expenses Effects from derivative financial instruments Impairments (+)/Reversals (-) Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction Other non-operating earnings |
-340 -59 85 -399 68 145 -180 |
-13 51 89 -263 – 155 -45 |
193 -218 390 -330 84 474 -207 |
425 32 179 74 – 155 -15 |
| Reclassified businesses of Renewables2 (adjusted EBIT) | – | 34 | – | 300 |
| Adjusted EBIT | 503 | 491 | 2,688 | 2,208 |
| Impairments (+)/Reversals (-) | 3 | -3 | 6 | 2 |
| Scheduled depreciation and amortization | 781 | 459 | 2,272 | 1,261 |
| Reclassified businesses of Renewables2 (scheduled depreciation and amortization, impairment charges and reversals) |
– | 85 | – | 271 |
| Adjusted EBITDA | 1,287 | 1,032 | 4,966 | 3,742 |
1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous quarters were adjusted accordingly.
2Deconsolidated effective September 18, 2019.
Restructuring expenses were significantly higher than in the 2019 reporting period and, as in the prior year, consisted primarily of expenditures in conjunction with the integration of innogy. The current-year figure also includes restructuring expenditures for the U.K. retail business.
At September 30, 2020, the marking to market of derivatives resulted in a positive effect of €330 million (prior year: -€74 million). Positive items in the current year resulted primarily from hedging against price fluctuations, in particular at Customer Solutions.
As part of the innogy integration, the business activity of innogy Consulting GmbH, which is recorded at the Corporate Functions/ Other segment, was ended in order to achieve synergies. Currentyear impairment charges principally reflect the write-down of this shareholding's book value.
Items resulting from the subsequent valuation of hidden reserves and liabilities as part of the preliminary purchase-price allocation until September 18, 2020, and newly recorded items resulting from the valuation of innogy's financial assets are disclosed separately. The latter will be balanced out in subsequent reporting periods.
The increase in other operating earnings is partially attributable to realized earnings from hedging transactions for certain currency risks.
Adjusted net income of €1,089 million was 7 percent below the prior-year figure of €1,177 million. Besides the above-described effects in the reconciliation to adjusted EBIT, this reconciliation includes following items:
Non-operating interest income/expenses rose by €0.5 billion year on year. The prior-year figure primarily reflects items from the valuation of non-current provisions. The current-year figure includes, in particular, amounts from the resolution of the difference between the nominal and fair value of innogy bonds as well as income related to prior years. This was partially offset by valuation effects on securities held for trading purposes.
The tax rate on continuing operations of 25 percent was unchanged from the prior year. The increase in operating earnings before taxes likewise led to a higher tax expense on continuing operations.
Non-controlling interests' share of operating earnings rose significantly year on year, principally because of the innogy takeover.
| Third quarter | Nine months | |||
|---|---|---|---|---|
| € in millions | 20201 | 2019 | 2020 | 2019 |
| Income/Loss from continuing operations before financial results and income taxes | 859 | 451 | 2,456 | 1,422 |
| Income/Loss from equity investments | -16 | 19 | 39 | 61 |
| EBIT | 843 | 470 | 2,495 | 1,483 |
| Non-operating adjustments | -340 | -13 | 193 | 425 |
| Reclassified businesses of Renewables2 (adjusted EBIT) | – | 34 | – | 300 |
| Adjusted EBIT | 503 | 491 | 2,688 | 2,208 |
| Net interest income/loss | -203 | -148 | -535 | -583 |
| Non-operating interest expense (+)/income (-) | -74 | 8 | -301 | 198 |
| Reclassified businesses of Renewables2 (operating interest expense) | – | -33 | – | -123 |
| Operating earnings before taxes | 226 | 318 | 1,852 | 1,700 |
| Taxes on operating earnings | -57 | -79 | -463 | -381 |
| Operating earnings attributable to non-controlling interests | -30 | -11 | -300 | -146 |
| Reclassified businesses of Renewables2 (taxes and minority interests on operating earnings) | – | 64 | – | 4 |
| Adjusted net income | 139 | 292 | 1,089 | 1,177 |
1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous quarters were adjusted accordingly.
2Deconsolidated as of September 18, 2019.
Compared with the year-end 2019 figure of €38.9 billion, E.ON's economic net debt rose by €3.2 billion to €42.1 billion.
The increase in financial liabilities to €31.4 billion relative to year-end 2019 is mainly attributable to E.ON SE's issuance of €5 billion in bonds (see page 3). The issuance proceeds were used in part to finance the squeeze-out of innogy SE's minority shareholders and to repay, on schedule, bonds that had matured (innogy SE: €750 million; E.ON International Finance B.V.: €1.4 billion).
E.ON's net financial position increased by €1.8 billion relative to year-end 2019. E.ON SE's dividend payout, investment expenditures, and cash compensation for innogy SE's minority shareholders as part of the squeeze-out were partially offset by operating cash flow and the sales proceeds from the transfer of the (indirect) stake in Nord Stream AG to the CTA (see page 4).
In addition, economic net debt was adversely affected primarily by the reduction in actuarial interest rates, which led to an increase in defined benefit obligations, and by a reduction in plan assets.
| € in millions | Sep. 30, 2020 |
Dec. 31, 20191 |
|---|---|---|
| Liquid funds | 4,512 | 3,602 |
| Non-current securities | 2,005 | 2,354 |
| Financial liabilities2 | -31,380 | -28,947 |
| FX hedging adjustment | 215 | 166 |
| Net financial position | -24,648 | -22,825 |
| Provisions for pensions3 | -8,616 | -7,201 |
| Asset-retirement obligations4 | -8,828 | -8,869 |
| Economic net debt | -42,092 | -38,895 |
1Certain adjustments to the preliminary accounting of the innogy acquisition, which was provisional until September 18, 2020, must be presented retroactively to the acquisition date. The prior-year figures were adjusted accordingly.
2Bonds issued by innogy are recorded at their nominal value. The figure shown in the Consolidated Balance Sheets is €2.2 billion higher (year-end 2019: €2.5 billion higher). 3Provisions for pensions were calculated using actuarial interest rates of 1 percent for Germany (year-end 2019: 1.3 percent) and 1.6 percent for the United Kingdom (year-end 2019: 2 percent).
4This figure is not the same as the asset-retirement obligations shown in the Consolidated Balance Sheets (€10,464 million at September 30, 2020; €10,571 million at December 31, 2019). This is because economic net debt is calculated in part based on the actual amount of E.ON's obligations.
E.ON's creditworthiness has been assessed by Standard & Poor's ("S&P") and Moody's with long-term ratings of BBB and Baa2, respectively. The outlook for both ratings is stable. Both S&P and Moody's anticipated that, over the near and medium term, E.ON will be able to maintain a debt ratio commensurate with these ratings. S&P's and Moody's short-term ratings are unchanged at A-2 and P-2, respectively.
In the first nine months of 2020, the E.ON Group's cash-effective investments were below the prior-year level. Factoring out the current-year and prior-year payments in conjunction with the innogy transaction (see commentary under Corporate Functions/ Other on page 11), there would have been a significant increase in investments in the core business. The E.ON Group invested about €2.7 billion in property, plant, and equipment and intangible assets (prior year: €2.2 billion). Share investments totaled -€0.3 billion versus €1.8 billion in the prior year.
| Nine months € in millions |
2020 | 2019 | +/- % |
|---|---|---|---|
| Energy Networks | 2,039 | 1,105 | +85 |
| Customer Solutions | 500 | 563 | -11 |
| Renewables | – | 581 | – |
| Corporate Functions/Other | -323 | 1,561 | – |
| Consolidation | -1 | 1 | – |
| Investments in core business | 2,215 | 3,811 | -42 |
| Non-Core Business | 159 | 207 | -23 |
| E.ON Group investments | 2,374 | 4,018 | -41 |
Energy Networks' investments increased by 85 percent year on year, from €1.1 billion to €2 billion. Investments in Germany rose significantly, primarily because of the inclusion of innogy operations. In addition, the increase primarily reflected new connections and network upgrades. Investments in new connections and maintenance were made in Sweden as well. Investments in East-Central Europe/Turkey were also above the prior-year level. The inclusion of innogy's operations in Hungary and Poland was one of the factors.
Customer Solutions invested €0.1 billion less than in the prioryear period. Investments in Sweden declined considerably year on year owing to the completion of the Högbytorp project. In addition, the prior-year figure included payments to acquire Coromatic, a leading provider of critical building infrastructure in Scandinavia. Investments in the United Kingdom were significantly lower as well, primarily because of postponed investments for smart meters. By contrast, the inclusion of innogy's operations in Germany and the Netherlands/Belgium resulted in higher investments.
After the transfer of substantially all of the Renewables segment to RWE in September 2019 and its remaining operations to other E.ON segments, effective 2020 the Renewables segment therefore no longer exists.
The current-year figure recorded at Corporate Functions/Other principally reflects subsequent purchase-price reductions in conjunction with the innogy acquisition. These payments for E.ON's account reduce cash-effective investments. The prioryear figure primarily reflects expenditures for the public takeover offer and for the acquisition of additional innogy stock on-market.
Investments at Non-Core Business were €48 million below the prior-year level. The prior-year figure reflects, in particular, payments in conjunction with the innogy transaction recorded at PreussenElektra. By contrast, PreussenElektra's investments to acquire residual power output rights were higher than in the prior-year period.
Cash provided by operating activities of continuing and discontinued operations before interest and taxes of €4.1 billion was significantly above the prior-year level. Energy Networks recorded an increase of €2.2 billion year on year thanks to positive working capital effects at the previous E.ON network business and the inclusion, for the first time, of innogy's network operations for the entire year.
Customer Solutions' nine-month operating cash flow before interest and taxes was €0.7 billion below the prior-year level, mainly due to the inclusion of innogy's operations in the United Kingdom for the entire year and to the changes in segment reporting, which, for comparative purposes, were also made to the prior year (see page 3).
The absence of Renewables' €0.2 billion contribution was another factor. Costs for corporate functions were higher relative to the prior-year period due to the inclusion of innogy for the first time. This had an adverse impact of €0.3 billion.
Cash provided by operating activities of continuing and discontinued operations rose by €0.8 billion because of lower tax payments (+€0.9 billion), whereas higher interest payments on innogy's debt had a negative impact (-€0.2 billion).
| Nine months € in millions |
2020 | 2019 |
|---|---|---|
| Cash provided by (used for) operating activities (operating cash flow) |
3,688 | 1,625 |
| Operating cash flow before interest and taxes2 |
4,063 | 2,735 |
| Cash provided by (used for) investing activities |
-947 | -4,742 |
| Cash provided by (used for) financing activities |
-2,044 | 962 |
1From continuing and discontinued operations.
2Excludes the innogy business in the Czech Republic reclassified in accordance with IFRS 5.
Cash provided by investing activities of continuing and discontinued operations totaled -€0.9 billion versus -€4.7 billion in the prior-year period. In the prior year, €1.6 billion was reported as payment for the acquisition of innogy stock. In the current financial year, cash provided by investing activities benefited from a subsequent purchase-price payment from RWE (€0.4 billion). In addition, the payment received in the first quarter of 2020 for the indirect stake in Nord Stream AG that was transferred to the CTA in 2019 and the sale of substantial parts of the heating electricity business in Germany had a positive impact on cash provided by investing activities.
Cash provided by financing activities of continuing and discontinued operations of -€2 billion was €3 billion below the prioryear figure of +€1 billion, principally because of payments in conjunction with the compensation of innogy SE's remaining minority shareholders and E.ON SE's higher dividend payout relative to the prior year.
The global spread of COVID-19 has been very dynamic. Forecasts on future economic development therefore remain subject to considerable uncertainty. The extent of economic contraction and recovery will depend crucially on the duration and effectiveness of the containment measures and the success of the measures to mitigate the negative impact on income and employment. The current joint forecast of Germany's leading economic institutes predicts that euro zone GDP will decline by 6.5 percent in 2020. It expects a recovery in 2021 (+5.4 percent) and 2022 (+3.1 percent).
E.ON operates critical infrastructure and supplies roughly 50 million customers. A secure energy supply in Europe is therefore a top priority. E.ON's business model is based in particular on the Energy Networks segment, whose regulated earnings account for a large share of the Group's earnings. Nevertheless, the COVID-19 pandemic poses business risks for E.ON's businesses: lower passthrough at Energy Networks (which principally can lead to temporary earnings declines) and lower sales volume at Customer Solutions (in particular to industrial customers). Customer Solutions' sales-volume risks also pose price risks resulting from resell obligations. There continues to be a risk of credit losses. A special crisis team is continuously monitoring and analyzing the various risks in conjunction with COVID-19. The third and fourth quarters saw a renewed rise in COVID-19 infections across Europe. This resulted in many cities and regions being classified as high-risk areas, which in such cases led to additional restrictions on daily life. From today's perspective, the current selective lockdown measures in E.ON's core markets will not have a material impact on full-year earnings.
The Management Board therefore continues to anticipate that the E.ON Group will achieve the revised forecast, disclosed in the 2020 Interim Report, for its key performance indicators relevant for management purposes. It expects the E.ON Group's adjusted EBIT to be between €3.6 and €3.8 billion. It anticipates 2020 adjusted net income of between €1.5 and €1.7 billion, or €0.58 to €0.65 per share based on an average of around 2,607 million shares outstanding. The Management Board continues to expect that the E.ON Group will achieve a cash-conversion rate of roughly 95 percent on average for the 2020 to 2022 financial years (without factoring in expenditures for the decommissioning of nuclear power plants).
E.ON expects Energy Networks' 2020 adjusted EBIT to be significantly higher than in the prior year due to the takeover of innogy's network business in Germany, Poland, Hungary, and Croatia. The network business in Germany will continue to benefit from investments in its regulated asset base. The new regulatory period in Sweden will have a negative impact on earnings, as will lower network passthrough, especially in Germany. The adverse earnings implications, however, are largely temporary, because the effects of the reduction in passthrough will generally be offset by regulatory mechanisms in subsequent years. Energy Networks' 2020 adjusted EBIT is expected to be between €3.1 and €3.3 billion.
E.ON anticipates that Customer Solutions' adjusted EBIT will be significantly above the prior-year level. The inclusion, for the first time, of innogy's customer solutions business—which has operations primarily in Germany, the United Kingdom, the Netherlands, Belgium, Hungary, and Poland—for the entire year will have a positive impact on earnings at this segment. The interventions of the U.K. Competition and Markets Authority,
unseasonably warm weather, and the resulting decline in sales volume—principally in Germany, the Netherlands, Belgium, the United Kingdom, and Sweden—will adversely affect earnings. In addition, the COVID-19 pandemic will influence Customer Solutions' business. In particular, it will have an adverse impact on earnings on sales to industrial and commercial customers and on new and innovative customer solutions. Owing to the decline in sales volume, already contracted amounts were resold at a lower price. E.ON expects Customer Solutions' 2020 adjusted EBIT to be €0.4 to €0.6 billion.
The forecast for Corporate Functions/Other's adjusted EBIT is roughly -€0.4 billion, which is significantly below the prior-year figure, primarily because of the inclusion of innogy's corporate functions. By contrast, cost savings and synergy effects from combining E.ON and innogy's corporate functions will have a positive impact.
E.ON expects Non-Core Business's adjusted EBIT of €0.3 to €0.5 billion to be slightly above the prior-year level. Preussen-Elektra's earnings will reflect, in particular, rising sales prices. This positive development will be partially counteracted by expenditures for residual power output rights.
Planned investments in 2020 at the Energy Networks and Customer Solutions segments will total roughly €4.2 billion. Customer Solutions' investments will amount to €0.8 billion; Energy Networks, €3.4 billion. Non-Core Business will invest €0.2 billion. Corporate Functions/Other's anticipated investments will be -€0.3 billion owing to subsequent purchase-price reductions in conjunction with the innogy acquisition. These payments for E.ON's account reduce cash-effective investments. Consequently, the E.ON Group's planned investments will stand at €4.2 billion.
The Forecast Report contained in the 2019 Annual Report presents our forecast for other key figures for the 2020 financial year. For the E.ON Group there are no material changes to these disclosures.
The Combined Group Management Report contained in the 2019 Annual Report describes in detail E.ON's management system for assessing risks and chances and the measures E.ON takes to limit risks.
The innogy operations that E.ON acquired have now been fully integrated into E.ON's appropriate, effective, audited, and comprehensive framework for managing risks and chances.
The E.ON Group's overall risk profile remains at the level of year-end 2019 with the exception of the following COVID-19 risk scenario. At the end of the first three quarters of 2020, the E.ON Group's overall risk situation remained deteriorated relative to year-end 2019 in view of the COVID-19 pandemic. As the year moved forward, however, the overall risk situation improved relative to the first half of 2020.
The E.ON Group's overall risk situation at the end of the first nine months of 2020 was influenced primarily by the ongoing COVID-19 pandemic. The main COVID-19 risk factors in the sales business are volume and price effects as well as credit losses. The network business could also experience a decline in sales volume and credit losses which result in lower earnings. The difference with the network business is that volume-driven declines in sales will largely be recovered in subsequent years. Preussen Elektra's business could be adversely affected by the introduction of a ban or a limitation of work contracts due to COVID-19.
In sum, from today's perspective no risk positions can be identified that could threaten the existence of E.ON SE, the E.ON Group, or individual segments.
| Third quarter | Nine months | |||
|---|---|---|---|---|
| € in millions | 2020 1 | 2019 | 2020 | 2019 |
| Sales including electricity and energy taxes | 13,132 | 7,446 | 45,102 | 23,497 |
| Electricity and energy taxes | -321 | -180 | -1,788 | -580 |
| Sales 2 | 12,811 | 7,266 | 43,314 | 22,917 |
| Changes in inventories (finished goods and work in progress) | 100 | 9 | 238 | 16 |
| Own work capitalized | 183 | 101 | 413 | 244 |
| Other operating incomes 2 | 1,133 | 1,578 | 6,164 | 2,833 |
| Cost of materials 2 | -10,009 | -5,494 | -33,111 | -17,339 |
| Personnel costs | -1,414 | -757 | -4,255 | -2,081 |
| Depreciation, amortization and impairment charges | -916 | -480 | -2,722 | -1,285 |
| Other operating expense s 2 | -1,150 | -1,866 | -7,925 | -4,194 |
| Income from companies accounted for under the equity method | 121 | 94 | 340 | 311 |
| Income from continuing operations before financial results and income taxes | 859 | 451 | 2,456 | 1,422 |
| Financial results Income/Loss from equity investments Income from other securities, interest and similar income Interest and similar expenses |
-219 -16 92 -295 |
-129 19 158 -306 |
-496 39 514 -1,049 |
-522 61 376 -959 |
| Income taxes | -24 | -109 | -712 | -354 |
| Income from continuing operations | 616 | 213 | 1,248 | 546 |
| Income/Loss from discontinued operations, net | 25 | 1,550 | -38 | 1,759 |
| Net income Attributable to shareholders of E.ON SE Attributable to non-controlling interests |
641 620 21 |
1,763 1,716 47 |
1,210 1,002 208 |
2,305 2,101 204 |
| in € | ||||
| Earnings per share (attributable to shareholders of E.ON SE)—basic and diluted 3 | ||||
| from continuing operations | 0.23 | 0.09 | 0.40 | 0.18 |
| from discontinued operations | 0.01 | 0.68 | -0.02 | 0.78 |
| from net income | 0.24 | 0.77 | 0.38 | 0.96 |
| Weighted-average number of shares outstanding (in millions) | 2,607 | 2,231 | 2,607 | 2,188 |
1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous quarters were adjusted accordingly.
2Failed-own-use contracts are included due to the change in accounting method. The prior year was adjusted accordingly.
3Based on weighted-average number of shares outstanding.
| Third quarter | Nine months | |||
|---|---|---|---|---|
| € in millions | 2020 1 | 2019 | 2020 | 2019 |
| Net income | 641 | 1,763 | 1,210 | 2,305 |
| Remeasurements of defined benefit plans | -635 | -380 | -1,329 | -1,231 |
| Remeasurements of defined benefit plans of companies accounted for under the equity method |
– | – | 2 | 1 |
| Income taxes | 86 | 42 | 247 | 123 |
| Items that will not be reclassified subsequently to the income statement | -549 | -338 | -1,080 | -1,107 |
| Cash flow hedges Unrealized changes—hedging reserve Unrealized changes—reserve for hedging costs Reclassification adjustments recognized in income |
-52 -132 17 63 |
-336 -234 -5 -97 |
-271 -336 -27 92 |
-691 -602 -22 -67 |
| Fair value measurement of financial instruments Unrealized changes Reclassification adjustments recognized in income |
19 19 – |
6 17 -11 |
32 33 -1 |
22 50 -28 |
| Currency-translation adjustments Unrealized changes—hedging reserve /other Unrealized changes—reserve for hedging costs Reclassification adjustments recognized in income |
-308 -241 2 -69 |
-578 -176 -12 -390 |
-538 -464 -5 -69 |
-672 -274 -8 -390 |
| Companies accounted for under the equity method Unrealized changes Reclassification adjustments recognized in income |
-156 -156 – |
38 80 -42 |
-349 -349 – |
-67 -25 -42 |
| Income taxes | 12 | 12 | -10 | 27 |
| Items that might be reclassified subsequently to the income statement | -485 | -858 | -1,136 | -1,381 |
| Total income and expenses recognized directly in equity | -1,034 | -1,196 | -2,216 | -2,488 |
| Total recognized income and expenses (total comprehensive income) Attributable to shareholders of E.ON SE Continuing operations Discontinued operations Attributable to non-controlling interests |
-393 -371 -384 13 -22 |
567 578 -344 922 -11 |
-1,006 -1,116 -910 -206 110 |
-183 -268 -1,370 1,102 85 |
1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous quarters were adjusted accordingly.
| € in millions | Sep. 30, 2020 |
Dec. 31, 2019 1 |
|---|---|---|
| Goodwill 2 | 17,873 | 17,759 |
| Intangible assets | 4,083 | 4,138 |
| Right-of-use assets | 2,530 | 2,582 |
| Property, plant and equipment | 36,207 | 35,750 |
| Companies accounted for under the equity method | 4,919 | 5,232 |
| Other financial assets Equity investments Non-current securities |
3,694 1,689 2,005 |
4,084 1,730 2,354 |
| Financial receivables and other financial assets | 689 | 699 |
| Operating receivables and other operating assets | 3,344 | 3,592 |
| Deferred tax assets | 1,907 | 2,194 |
| Income tax assets | 79 | 34 |
| Non-current assets | 75,325 | 76,064 |
| Inventories | 1,468 | 1,252 |
| Financial receivables and other financial assets | 532 | 490 |
| Trade receivables and other operating assets | 10,735 | 14,395 |
| Income tax assets | 979 | 1,377 |
| Liquid funds Securities and fixed-term deposits Restricted cash and cash equivalents Cash and cash equivalents |
4,512 1,066 900 2,546 |
3,602 1,197 511 1,894 |
| Assets held for sale | 1,225 | 1,087 |
| Current assets | 19,451 | 22,203 |
| Total assets | 94,776 | 98,267 |
1Certain adjustments to the preliminary accounting for the innogy acquisition, which was provisional until September 18, 2020, must be presented retrospectively to the acquisition date.
The prior-year figures were adjusted accordingly.
2Includes the preliminary differential amount from the VSE purchase price-allocation (see page 5).
| € in millions | Sep. 30, 2020 |
Dec. 31, 2019 1 |
|---|---|---|
| Capital stock | 2,641 | 2,641 |
| Additional paid-in capital | 13,368 | 13,368 |
| Retained earnings | -5,552 | -1,913 |
| Accumulated other comprehensive income 2 | -4,987 | -3,857 |
| Treasury shares | -1,126 | -1,126 |
| Equity attributable to shareholders of E.ON SE | 4,344 | 9,113 |
| Non-controlling interests (before reclassification) | 5,716 | 5,618 |
| Reclassification related to put options | -1,527 | -1,483 |
| Non-controlling interests | 4,189 | 4,135 |
| Equity | 8,533 | 13,248 |
| Financial liabilities | 29,524 | 27,572 |
| Operating liabilities | 7,968 | 8,042 |
| Income tax liabilities | 275 | 293 |
| Provisions for pensions and similar obligations | 8,616 | 7,201 |
| Miscellaneous provisions | 13,256 | 13,468 |
| Deferred tax liabilities | 2,652 | 2,508 |
| Non-current liabilities | 62,291 | 59,084 |
| Financial liabilities | 4,039 | 3,841 |
| Trade payables and other operating liabilities | 15,481 | 16,686 |
| Income tax liabilities | 852 | 787 |
| Miscellaneous provisions | 3,164 | 4,019 |
| Liabilities associated with assets held for sale | 416 | 602 |
| Current liabilities | 23,952 | 25,935 |
| Total equity and liabilities | 94,776 | 98,267 |
1Certain adjustments to the preliminary accounting for the innogy acquisition, which was provisional until September 18, 2020, must be presented retrospectively to the acquisition date. The prior-year figures were adjusted accordingly.
2Thereof relating to discontinued operations (September 30, 2020): -€128 million, (December 31, 2019): -€36 million.
| Nine months € in millions |
2020 | 2019 |
|---|---|---|
| Net income | 1,210 | 2,305 |
| Income/Loss from discontinued operations, net | 38 | -1,759 |
| Depreciation, amortization and impairment of intangible assets and of property, plant and equipment | 2,722 | 1,285 |
| Changes in provisions | -714 | -108 |
| Changes in deferred taxes | 625 | 250 |
| Other non-cash income and expenses | -381 | -181 |
| Gain/Loss on disposal of intangible assets and property, plant and equipment, equity investments and securities (>3 months) | -216 | -29 |
| Changes in operating assets and liabilities and in income taxes | 378 | -247 |
| Cash provided by (used for) operating activities of continuing operations | 3,662 | 1,516 |
| Cash provided by (used for) operating activities of discontinued operations | 26 | 109 |
| Cash provided by (used for) operating activities (operating cash flow) | 3,688 | 1,625 |
| Proceeds from disposal of Intangible assets and property, plant and equipment Equity investments |
1,510 163 1,347 |
126 65 61 |
| Purchases of investments in Intangible assets and property, plant and equipment Equity investments 1 |
-2,374 -2,678 304 |
-3,437 -1,717 -1,720 |
| Changes in securities, financial receivables and fixed-term deposits | 300 | -285 |
| Changes in restricted cash and cash equivalents | -396 | -562 |
| Cash provided by (used for) investing activities of continuing operations | -960 | -4,158 |
| Cash provided by (used for) investing activities of discontinued operations | 13 | -584 |
| Cash provided by (used for) investing activities | -947 | -4,742 |
| Payments received/made from changes in capital 2 | -2,360 | 36 |
| Cash dividends paid to shareholders of E.ON SE | -1,199 | -932 |
| Cash dividends paid to non-controlling interests | -310 | -170 |
| Changes in financial liabilities | 1,825 | 2,241 |
| Cash provided by (used for) financing activities of continuing operations | -2,044 | 1,175 |
| Cash provided by (used for) financing activities of discontinued operations | – | -213 |
| Cash provided by (used for) financing activities | -2,044 | 962 |
| Net increase/decrease in cash and cash equivalents | 697 | -2,155 |
| Effect of foreign exchange rates on cash and cash equivalents | 5 | 133 |
| Cash and cash equivalents at the beginning of the year 3 |
1,902 | 3,924 |
| Cash and cash equivalents of discontinued operations at the beginning of the period | 14 | 66 |
| Cash and cash equivalents at the end of the period | 2,618 | 1,968 |
| Less: Cash and cash equivalents of discontinued operations at the end of the period | -72 | -20 |
| Cash and cash equivalents of continuing operations at the end of the period 4 | 2,546 | 1,948 |
1Including the settlement payment received from the transfer of business activities with RWE. These payments reduce the investments.
2The decrease is primarily due to the merger-related squeeze-out of the remaining minority shareholders of innogy. No material netting has taken place in either of the years presented here. 3Cash and cash equivalents of continuing operations at the beginning of the period also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal group in the third quarter of 2019 and €4 million attributable to the sales operations of the heating electricity business in Germany, also reclassified as a disposal group, that were sold in the second quarter of 2020.
4Cash and cash equivalents of continuing operations at the end of the period of the prior year also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal group in the third quarter of 2019.
| Energy Networks | Customer Solutions | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine months | Germany | Sweden | ECE/Turkey | Germany | United Kingdom | Netherlands/ Belgium |
Other | |||||||
| € in millions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| External sales | 7,395 | 3,791 | 645 | 744 | 1,027 | 544 | 14,975 | 5,876 | 10,073 | 5,532 | 1,942 | 58 | 6,047 | 5,471 |
| Intersegment sales | 3,066 | 1,339 | 4 | 4 | 895 | 706 | 906 | -3 | 3 | -186 | 77 | – | 323 | 201 |
| Sales | 10,461 | 5,130 | 649 | 748 | 1,922 | 1,250 | 15,881 | 5,873 | 10,076 | 5,346 | 2,019 | 58 | 6,370 | 5,672 |
| Depreciation and amortization 2 |
-1,044 | -492 | -117 | -115 | -246 | -190 | -96 | -60 | -99 | -89 | -56 | -3 | -154 | -108 |
| Adjusted EBIT Equity-method earnings 3 |
1,556 177 |
709 53 |
275 – |
394 – |
500 124 |
338 87 |
296 3 |
115 3 |
-2 – |
59 – |
45 3 |
– 1 |
39 4 |
67 6 |
| Operating cash flow before interest and taxes |
3,082 | 1,015 | 394 | 460 | 737 | 574 | 373 | 308 | -253 | 524 | 41 | 58 | 185 | 152 |
| Investments | 1,352 | 640 | 241 | 197 | 446 | 268 | 152 | 80 | 66 | 141 | 28 | 2 | 254 | 340 |
| Non-Core Business | Corporate Functions/ | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine months | Renewables 5 | PreussenElektra | Generation Turkey | Other 4 | Consolidation | E.ON Group 5 | ||||||
| € in millions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| External sales | – | 518 | 1,028 | 866 | – | – | 184 | -2 | -2 | – | 43,314 | 23,398 |
| Intersegment sales | – | 430 | – | – | – | – | 769 | 486 | -6,043 | -2,977 | 0 | 0 |
| Sales | – | 948 | 1,028 | 866 | – | – | 953 | 484 | -6,045 | -2,977 | 43,314 | 23,398 |
| Depreciation and amortization 2 |
– | -271 | -371 | -167 | – | – | -99 | -40 | 4 | 1 | -2,278 | -1,534 |
| Adjusted EBIT Equity-method earnings 3 |
– – |
301 57 |
271 38 |
256 40 |
27 27 |
70 70 |
-318 12 |
-109 52 |
-1 -2 |
8 1 |
2,688 386 |
2,208 370 |
| Operating cash flow before interest and taxes |
– | 201 | 394 | 80 | – | – | -888 | -633 | -2 | -4 | 4,063 | 2,735 |
| Investments | – | 581 | 159 | 207 | – | – | -323 | 1,561 | -1 | 1 | 2,374 | 4,018 |
1Because of the changes in our reporting, the prior-year figure was adjusted accordingly.
2Adjusted for non-operating effects.
3Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in income/loss from companies accounted for using the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
4Because of subsequent purchase-price adjustments by RWE, the Corporate Functions/Other segment recorded negative investments.
5Operating business including the divisions in the Renewables segment reclassified as discontinued operations in accordance with IFRS 5 and deconsolidated as of September 18, 2019.
The following table shows the reconciliation of the revenues reported in segment reporting to the revenues in the income statement:
| Nine months | E.ON Group | Reclassified businesses at Renewables 1 |
E.ON Group (continuing operations) |
||||
|---|---|---|---|---|---|---|---|
| € in millions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| Sales | 43,314 | 23,398 | – | -481 | 43,314 | 22,917 |
1Deconsolidated as of September 18, 2019.
The following table shows the reconciliation of operating cash flow before interest and taxes to operating cash flow from continuing operations:
| Nine months | ||
|---|---|---|
| € in millions | 2020 | 2019 |
| Operating cash flow before interest and taxes | 4,063 | 2,735 |
| Interest payments | -562 | -409 |
| Tax payments | 161 | -710 |
| Reclassified innogy business in the Czech Republic (operating cash flow) | 26 | 9 |
| Operating cash flow | 3,688 | 1,625 |
| Reclassified businesses at Renewables 1 | – | -100 |
| Reclassified innogy business in the Czech Republic | -26 | -9 |
| Operating cash flow from continuing operations | 3,662 | 1,516 |
1Deconsolidated as of September 18, 2019.
The following table shows the reconciliation of the investments shown in segment reporting to the investments of continuing operations. The latter correspond to payments for investments reported in the Consolidated Statements of Cash Flows.
| Nine months € in millions |
2020 | 2019 |
|---|---|---|
| Investments | 2,374 | 4,018 |
| Reclassified businesses at Renewables 1 | – | -581 |
| Investments from continuing operations | 2,374 | 3,437 |
1Deconsolidated as of September 18, 2019.
| March 24, 2021 | Release of the 2020 Annual Report |
|---|---|
| May 11, 2021 | Quarterly Statement: January – March 2021 |
| May 19, 2021 | 2021 Annual Shareholders Meeting |
| August 11, 2021 | Half-Year Financial Report: January – June 2021 |
| November 10, 2021 | Quarterly Statement: January – September 2021 |
Contact E.ON SE Brüsseler Platz 1 45131 Essen Germany
T +49 201-184-00 [email protected] eon.com
Journalists T +49 201-184-4236 eon.com/en/about-us/media.html
Analysts, shareholders and bond investors T +49 201-184-2806 [email protected]
Only the German version of this Quarterly Statement is legally binding.
This Quarterly Statement was published on November 11, 2020.
This Quarterly Statement may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group 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 SE 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.
Brüsseler Platz 1 45131 Essen Germany T +49 201-184-00 [email protected]
eon.com
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