E.ON SE

Ladies and gentlemen, welcome to the webcast of Aeon SE. At our customer's request, this conference will be recorded. After the presentation, you have the opportunity to ask questions via the telephone line. If you have a question for the speakers, please dial 0 and 1 on your telephone keypad to enter the queue. If any participant has difficulties hearing the conference, please press star key followed by 0 on your telephone for operator assistance. May I now hand you over to Martina Boga, who will lead you through this conference. Please go ahead.

Thank you. Dear analysts and investors, welcome to our H1 results presentation. Thank you for joining via telephone or webcast. Today, I'm here with our CEO, Leo, and our CFO, Mark. Marina can't join today in person as she is enjoying an extended summer break after the birth of her second child. She will be back with us in September. Leo will guide you through the highlights of the first half of 2021, while Marc will give you an update on our financial performance and the outlook for the remainder of the year. As usual, we will only highlight the main messages to leave enough room for your questions. With that, over to you, Leo.

Thank you, Martina. Good morning and a warm welcome also from my side. This is my last conference call back in March. I've passed already my first 100 days, actually a little bit more in the office. And I can truly say that I took over a great company with great people. And I can say that not only because we have again delivered an operationally very strong quarter, but on top, we have mastered a huge challenge due to the floods in our German grid areas. And I will elaborate a little bit on that in a second. Actually, all of our businesses performed well in the second quarter based upon excellent operations and the remaining impact from the pandemic is in line with our expectations. And we are well progressing on the synergy delivery in the first half of 2021. On top, we are now including the already communicated effects from the adoption of the legal settlement of the nuclear production rights issue. We do not only see the majority of the financial impact in the sharp increase of our year-over-year development of EBIT and adjusted net income in the H1 figures, but we also adjusted 2021 full-year outlook today. The total 600 million EBIT impact brings our 2021 target now into the range of 4.4 to 4.6 billion euros. And we upgrade also our outlook on adjusted net income, respectively, and now target for a range of 2.4 to 2.5 billion euros. And Mark will elaborate on this topic later, and he will also explain how this translates into our midterm outlook, which is basically not changed by this technical effect. With that, our midterm delivery plan, the synergy target of 780 million by 2024, and our dividend commitment will not change. But now before moving to my standard topics, let me draw your attention on a very important topic on the next page. And normally we do not include any pictures in capital market update calls, but this time we do. We have all heard and you've all seen how in mid-July large parts of western Germany in the Rhineland and other European countries have been hit hard by heavy rainfalls that resulted actually in catastrophic floods. In Germany, many cities and villages have been destroyed and 180 people actually lost their lives. I traveled personally to the affected areas, and I can only tell you that the TV pictures don't do the situation any justice. It's actually really shocking if you are on the ground. The water has obviously also destroyed gas and power lines, converters, substations, and other important energy infrastructure operated and owned mainly by one of our DSOs. We had around 200,000 people without access to energy in peak times. The reaction, however, was very strong. In overnight measures, we have mobilized more than 1,000 colleagues and a lot of devices across all our German entities who have all provided immediate aid in the affected areas. Our experience with weather events, our excellent operations, and our widespread reach across Germany proved to be a strength in crisis management. And let me take this opportunity despite this being an investor call again to thank all my employees who did such a stellar job and really went to the limits of what was possible. And we have by now basically reconnected all customers somehow to the energy infrastructure with a few exceptions. But why is this maybe also important for you? Well, obviously first because it just shows again that access to energy matters. And one values more what one doesn't have. And so this is, again, what we have seen in the crisis. Infrastructure is now really valued. And this event is a clear signal also that E.ON is investing into important things that matter. And resilient and sustainable infrastructure is more important than ever. And obviously, it also shows that we are a good operator for such infrastructure with the skills to actually run them in this. benchmark way. And that brings me now straight to my strategic focus areas on the next slide. When I first announced my top priorities, I focused on three themes that will have the biggest impact on the future of our company, i.e., sustainability, digitalization, and growth. And today, I can share that we are progressing on all three items. First, sustainability. Our sustainability footprint is continuously improving. We put a special focus on biodiversity next to climate action. We've decided to manage our grid corridors in an ecological way and will turn around 70,000 hectares along our 13,000 kilometers of high-voltage power lines into valuable biotopes and habitats. The affected area is equal to the size of more than 100,000 soccer fields, so that's the target which we gave ourselves, 100,000 soccer fields of biodiversity. Also, E.ON became a partner of the United Nations Environmental Program, UNEP, which has proclaimed the Decade on Ecosystem Restoration. We have developed an online platform as part of this partnership with UNEP that gives the UN Decade a digital home. On this platform, initiatives from all over the world can present their projects, networks, and gain supporters for the protection and restoration of ecosystems. Being a part of UNEP fills us with pride, but at the same time, it's also an obligation to consistently implement sustainability in everything we do ourselves. Second, digitization. It's about to become the inherent DNA of our business, and we are creating digital-first mindsets throughout the complete organization. And together with partners, we are delivering on our digital roadmap, which we have defined in more detail, with focusing on cloudification. And the aim is to make IT processes more flexible to increase the operational efficiency and to accelerate the development of new solutions and services for customers and employees. Also, within the businesses we are constantly delivering with the help of digitization, we have accelerated our migration, which brings us now to 9.5 million accounts that are operated by our new safe platform in the UK and Germany, and this will help us to achieve our ambitious targets within the customer solution sector. Third, we see a strong political momentum which translates into future growth options for EOS. In July, the European Commission released their plan to accelerate the energy transition within the EU. The FIT455 program is fully in line with our growth ambitions that puts our customer-centric energy infrastructure right in the center of its aspirations. Our activities are fully aligned with the focus areas of the FIT455, high ambitions on renewables, green hydrogen targets, energy efficiency, charging infrastructure, simplification of permitting procedures, et cetera, only to name a few of the 13 themes announced by the EU Commission. Let me just briefly elaborate on one of these areas in more detail, green hydrogen. I'm utterly convinced that green hydrogen will become the second pillar of decarbonization, especially with the shorter timeframe to achieve 100% dynamic neutrality by 2045. And I'm also convinced that hydrogen will be relevant much quicker than previously anticipated for the decarbonization of traditional industries, but also for midsize companies and for the heat transition. Therefore, E.ON, as an operator of gas assets and with a long-lasting history in the solution business, can play a decisive role to make this happen. And this is why I've joined the COO Alliance for Europe's Recovery, Reform, and Resilience to take responsibility in the cross-sector alliance to support the European Green Deal. So more to come for E.ON. And this is, for me, the conclusion. to the delivery amongst all our operational priorities, we are making excellent progress at our strategic review. I'm really looking forward to present the outcome of it to you on November 23rd. Now, let's leave the future and return into the present, and let me point out your focus again to the existing business. As many of you have noticed, the German regulator, the Bundesnetagentur, or in short, BNSR, has published an initial proposal and started its consultation on the return on equity for the fourth regulatory page. The value that BNSR has announced, based on the conducted expert opinion, is a minimum return on equity of 4.59% pretext, which is a decline of more than two percentage points compared to the return of the current period of A quite heavy reduction that will take the return on equity to a non-competitive level in comparison to international regulatory systems. Especially when comparing the BNSR numbers to similar decisions that were taken by other national regulators lately like in France or the UK, the proposal must be considered very low and more precisely significantly too low. As expected, the risk-free rate, the 10-year average of the German yield, has been significantly reduced. At the same time, the market risk premium and the risk factor beta have been marginally reduced as well, which, according to the latest economic research, makes no sense. From our point of view, the market risk premium has been set way too low. It should be set at a minimum at least the average of European energy regulation. For Germany, a market risk premium of 6.5 to 7.5 has been calculated by Value Trust on behalf of BDAW, which is a value that seems more appropriate. I can also point out positive development in that context. The consultation documents that were published by the BNSR do not propose a fixed actual value, but a minimum value, including some room for improvement. They actually mention a range of 25 basis points. But let me be crystal clear, 4.59% with or without additional 25 basis points is unacceptably low. A return at that level is not at all sufficient to support the investments that are urgently needed to support the energy transition in Germany. And at this point, I still trust in the BNSR that they will determine an appropriate level to support the energy transition, which is of the highest priority for German society. Let me point out also the process from here. The consultation will be held in written form only and is closing on the 25th of August. The consultation is public. That means any interested party, including investors and research analysts, can and should participate to send their opinion on the proposed value to BNSR. In two of the last three regulatory periods, the proposed number has been considerably increased after the consultation. That's why I'm still rather optimistic for the outcome. We expect the final determination to be published by BNiTSR most likely in October. So let's leave energy networks here, and let me now turn to the solution activities on the next page. We actually often talk in detail about our commodity retail portfolio. Therefore, today, I will share more details about our non-commodity business as a teaser for Capital Market Day later in the year. Let me start with our energy infrastructure solutions business. Across our markets, we are targeting to invest around 500 million euros this year. On top of completion of our large growth initiatives in Sweden, we will execute on small and mid-sized decentral energy solution projects mainly in Germany, Sweden, and the UK to deliver on our ambitious targets. All of this will translate to a strong earnings target north of 200 million in 21, which represents a 40% year-over-year increase. Post-21, we target a growth of around 15% per annum until 2023. Next to our infrastructure-like solutions, EIS, Mark highlighted in the Q1 presentation how our future energy home business is gaining momentum. As a reminder, this business is including all of our residential energy solutions in the area of home heating and home energy management, PV and storage, and on top, our e-mobility utilities. Revenues have surged by 30 percent, 3-0 percent compared to the first half of 2020. Also on the earnings side, increasing demand for sustainable solutions is bearing fruit, and we have recorded a surplus of around $30 million on EBIT level in the first half compared to the first half of 2020. In absolute terms, the earnings contribution might still look low, but it's actually very positive for a strongly growing business to show positive momentum at all, and that in a positive territory. We have clearly entered a route now that is currently pointing only to one direction, further growth. So much for that. And now Mark will present the financial highlights of the period. Mark, over to you.