E.ON SE

Earnings Release • Mar 14, 2012

News Details

Corporate | 14 March 2012 07:29

E.ON AG: Past the worst

E.ON AG / Key word(s): Liquidity Problem

14.03.2012 / 07:29

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* 2011 EBITDA of EUR9.3 billion, underlying net income of EUR2.5 billion

* Debt reduced by a further EUR2 billion

* Management to propose dividend of EUR1 per share for 2011 financial year

* 2012 forecast: EBITDA expected to increase to EUR9.6 to EUR10.2 billion,
underly-ing net income to be between EUR2.3 and EUR2.7 billion

* 2013 forecast: EBITDA expected to be EUR11.6 to EUR12.3 billion,
underlying net income EUR3.2 to EUR3.7 billion

* Successful expansion of growth businesses: renewables, upstream gas,
Russia, and outside Europe

E.ON AG continued its consolidation course in a difficult business
environment in 2011 and is past the worst. At the presentation of the
company's annual results, CEO Johannes Teyssen was cautiously optimistic
about where E.ON stands. 'We made good progress implementing our strategy.
E.ON 2.0, our efficiency-enhancement pro-gram, is on course. We're pleased
by the significant earnings growth in renewables, power generation in
Russia, and gas production. This demonstrates that we defined the right
growth businesses. We also made progress establishing operations outside
Europe. Our planned entry into Brazil's power generation market will be a
first impor-tant step, and we expect others to follow shortly. For 2012, we
expect to post an earn-ings increase that will continue in subsequent
years.'

E.ON's 2011 results were in line with its expectations. Sales rose by 22
percent year on year to about EUR113 billion. The increase was due in
particular to higher sales at the company's Trading unit.

E.ON's EBITDA of about EUR9.3 billion was 30 percent below the prior-year
figure. The principal reasons for the decline were an EUR2.5 billion
adverse effect relating the imme-diate shutdown of nuclear power stations
in Germany and the nuclear-fuel tax, a roughly EUR1 billion earnings
reduction from E.ON's power generation business in Europe, and a roughly
EUR0.7 earnings reduction in the gas wholesale business due to continued
margin pressure.

The earnings performance of E.ON's growth businesses continued to be
positive. The Renewables unit grew its EBITDA by 21 percent to around
EUR1.5 billion, mainly be-cause of an increase in installed wind and solar
capacity. Earnings in Russia improved by nearly 50 percent to about EUR0.6
billion, owing primarily to an increase in generating capacity and wider
power margins. Upstream gas earnings rose to roughly EUR0.8 billion due to
positive price and volume effects. In addition, E.ON's ongoing
efficiency-enhancement programs delivered lasting earnings effects totaling
EUR0.4 billion.

Teyssen emphasized that E.ON generates a significant portion of its
earnings in very stable businesses. The overall share of regulated as well
as quasi-regulated and long-term contracted business amounted to about 50
percent of EBITDA in 2011. 'These stable earnings streams give us a strong
foundation for running our business soundly even in difficult times, for
successfully meeting current and future challenges, and for tapping new,
profitable growth business,' Teyssen said. For example, E.ON plans to
invest EUR7 billion in renewables over the next five years, of which just
over EUR2 billion will go towards new offshore wind farms in Germany, the
United Kingdom, and Sweden.

E.ON's underlying net income declined by nearly 50 percent year on year to
about EUR2.5 billion, mainly because of the decline in EBITDA. Amortization
was at the prior-year level, and economic interest expense improved due to
the reduction in net debt.

E.ON's investments in property, plant, and equipment, intangible assets,
and share-holdings amounted to roughly EUR6.5 billion in 2011, about EUR1.8
billion less than in the prior year.

At EUR6.6 billion, E.ON's cash provided by operating activities of
continuing operations was considerably below the prior-year figure of
EUR10.6 billion. The main reasons for the decline were cash-effective items
in conjunction with the decrease in EBITDA, a non-recurring adverse effect
relating to the refunding of pension assets, and overall negative
working-capital effects.

The E.ON Group's economic net debt stood at EUR36.4 billion at year-end
2011, EUR1.3 billion less than at year-end 2010. Its net financial position
improved by more than EUR2 billion.

E.ON anticipates that its 2012 EBITDA will be between EUR9.6 billion and
EUR10.2 billion and that underlying net income will be between EUR2.3 and
EUR2.7 billion. This implies a conservative assumption for the gas supply
and sales business. It continues to plan to pay a dividend of EUR1.10 per
share for the 2012 financial year.

For 2013, E.ON continues to expect EBITDA of EUR11.6 to EUR12.3 billion and
underlying net income of EUR3.2 to EUR3.7 billion. It continues to plan to
pay a dividend of at least EUR1.10 per share for the 2013 financial year.

Note:
Effective year-end 2011, E.ON adjusted the designations for a number of its
financial figures. What it formerly called 'adjusted EBITDA' and 'adjusted
EBIT' are 'EBITDA' and 'EBIT'; 'adjusted net income' is now 'underlying net
income.'
In all cases, only the designation was changed, not the definition.

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This press release 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 AG 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.

End of Corporate News

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Language: English
Company: E.ON AG
E.ON-Platz 1
40479 Düsseldorf
Germany
Phone: +49 (0)211 4579-0
Fax: +49 (0)211 45 79-5 01
E-mail: investorrelations@eon.com
Internet: www.eon.com
ISIN: DE000ENAG999
WKN: ENAG99
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX; Mailand

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