E.On Se S/Adr

Hello everyone and welcome to our 9 months 24 results call. Thank you for taking the time to join us. I'm Björn Siggemann, part of the IR team and will be moderating the call today. Unfortunately, Iris is not able to join us due to sickness. I'm, however, pleased to be here together with our CFO, Nadja Jacobi, who will give an update on our financials. As always, we will leave enough room for your questions after the presentation. With that, Nadja, over to you.

Thank you, Björn. and a warm welcome to all of you from my side. Let me walk you through our solid nine-month financials. To start, here are my three key messages for today. First, in the first nine months of the year, we have achieved an EBITDA of €6.7 billion and an adjusted net income of €2.2 billion, both in line with our expectations. These results cover 75% of the respective guidance midpoints for the full year. This puts us in a comfortable position to achieve our guidance, which we fully confirm. From an underlying operational perspective, our results show a year-over-year EBITDA expansion in the low triple-digit million euro range. This is a continuation of our operational delivery in H1 and puts us well in line with our full-year growth targets. Second, investment-driven earnings growth and operational execution remain the key underlying growth drivers across all our segments. Our planned investments are developing well and increased 20% year over year. Our supply chain strategy, which entails high standardization and long-term visibility to our diversified supplier base, it continues to be the right one. We procure the right materials and components at competitive prices and remain confident in our ability to meet our capex targets. Third, our nine-month E&D outturn of around 41 billion euro provides a solid foundation not only for our current investment plans but also for future potential increases if returns are sufficiently attractive. Let's now move on to the details of our nine-month EBTA development. Our adjusted EBTA reduced by €1.1 billion because of positive timing and run-off impacts in 2023. Adjusting for these, we see a solid low triple-digit million increase building upon the growth trajectory we have already seen through H1. Looking into the nine-month year-over-year drivers, let me start with energy networks. We have seen significant EBITDA growth driven by our accelerating investments into the regulated asset base across all regions. In our largest market, Germany, additional growth came from positive inflation indexation of our regulatory revenues. The underlying growth is compensated by various timing effects, both in 2023 and 2024. In our second largest market, Sweden, WAP-driven growth was supported by the significant increase in regulatory work in 2024. The impact from these two continuing positive drivers was slightly dampened due to the end of network loss recoveries, which we received in 2023. In Central Eastern Europe, investment-driven earnings growth was offset by the adjustment in accounting for our Slovakian operations to a net equity basis, resulting in a technical EBITDA reduction. In South Eastern Europe, our successful regulatory management led to year-over-year growth largely due to further network loss recoveries. To make our underlying operational performance more visible to you going forward, we are currently considering to adjust for the value-neutral timing impacts in our energy networks business. If and when we will introduce this will be decided in the next coming months. Moving on to our energy infrastructure solution business. Our investment-driven growth is progressing well in this segment with a 48% increase in investments compared to last year. On a nine-month basis, underlying growth is still overcompensated by the 2023 runoff earnings, as well as lower volumes in our district heating and cooling business due to warmer temperatures, both related to H1. In energy retail, we have now already achieved slightly more than €1.7 billion EBTA in the first nine months of this year, and we are well on track for our full year guidance. The year-over-year drop in EBITDA is caused by last year's positive one-offs, which were concentrated in the first nine months of 2023. As a reminder, the 2023 one-offs came from procurement optimization benefits and the UK tariff deficit recovery. Our B2B performance in the UK remains particularly strong this year, slightly overcompensating for the lower volumes due to warmer temperatures in H1. Let me conclude by reiterating that our nine-month results put us well on track to achieve our 2024 guidance. Moving on to slide four. No surprises in the adjusted net income development for our nine-month results. The bottom line essentially follows EBTA development. All earnings elements below EBTA are in line with our expectations. When looking at our underlying adjusted net income, we are well on track for our promised underlying growth for the full year. Let us now move on to our economic net debt development. When it comes to investment spending, our execution remains strong. Our group capital fill rate now stands at 65%, which is around four percentage points ahead of nine months 2023. Economic net debt turned out broadly flattish versus H1, driven by operating cash flow more than covering investment spending. In the third quarter, pensions moved up by a low to mid triple-digit million euro, mainly due to the fall in rates between the end of Q2 and Q3. With a year-to-date cash conversion ratio of 73%, we are well on track for our full-year cash conversion expectation of around 90%. Our pension provisions and asset retirement obligations are sensitive to the movement in risk-free rates. If rates were to stay unchanged at the end of Q3, I would expect economic net debt to come in slightly above $41 billion at year-end. To conclude, our solid E&D path continues to confirm our view of having strong balance sheet capacity to fund our current investment program and a potential future upgrade provided that regulatory conditions improve. Finally, I would like to close the presentation by fully confirming our guidance. The key points you should take away from today are, first, our solid nine months performance supports 2024 earnings expectations, particularly within the energy networks and energy retail segments. We continue to expect the energy infrastructure solution segment to be in the lower half of our 550 to 650 million euro guidance range due to the lower district heating and cooling volumes driven by warmer weather in H1. However, we also continue to expect the other segments to compensate for the temporary effects in energy infrastructure solutions. To sum it up, we still see the midpoint of our group guidance range as the best estimate for our full year results. Second, our investment ramp-up is progressing well, which fully supports the delivery of our mid-term targets. Finally, our balance sheet remains healthy. We will continue to focus on attractive value creation via organic growth opportunities while rewarding our shareholders with a growing dividend. With that, back to you, Björn, for the Q&A.

Yeah, thank you, Natia. Just a few words in the beginning, ahead of the Q&A, as usual, two question rule per person, and then let's kick it off. I'm just being told that Harry Weybert from Exxon, you're the first one. Please.

Hi, morning, everyone. Hi, Nadia. Hi. Thanks for taking my questions. Right. So I hope you can hear me OK. So two, please. So firstly, I guess an obvious one, but the election and how that might impact things. I think you mentioned just a second ago that you still felt there was room to raise capex if you had the right regulatory returns. Could the election change that or jeopardize it? And do you think a CDU led government would be open to higher capex? and ultimately, I guess, higher grid fees, which I think they're trying to subsidize or proposing to subsidize in future. So that's the first one. And then secondly, you mentioned that you're looking at adjusting your earnings to timing differences. I presume there's quite a lot of work that you would still need to do on that to figure out where things land. But just at the moment, directionally, if we think about next year's earnings and future years after that, Would you expect that adjustment to be a positive or a negative one? I mean, clearly this year and last year it would be negative, but I'd be interested to know where we stand or how many timing effects you have in your budgets for future years. Thank you.

Thank you, Harry.

Yeah. Thank you, Harry. So I take your first question first. Of course, that has been a lot of turmoil in the last couple of last 10 days. But we feel where we will set up. Also, when, you know, we have been disclosing quite often that we have got this NAP, this National Development Plan for grids, and that we have got some 50% headroom towards this national allocation plan. So we feel that there is still quite a lot of room to go before we actually would see our investment program endangered, which we don't do. We have been looking in very much detail into what the CDU proposes, and we see a lot of positive things in that. Very clearly, there was this point around reducing network fees, but that by no means mean that sort of our shareholder remuneration or the returns would be cut, but it would be just a subsidization from the government for the grid fees and sort of taking funds from CO2 levies and using that for lower grid fees, which we clearly support. If you look a bit deeper into what has been discussed over the last days, and then also the interviews that Jens Spahn has given, and if you look into the details of the paper of the CDU, you can see that there is, even to the opposite, a clear stance that the returns for grids need to increase to a level that is comparable to other grid infrastructure in Europe and is clearly superior to Bond Leals, etc. So if you look into these kind of interviews, you can see that there is a stressing the point that it is beneficial to increase returns on the grid side in order to help the energy transition. In general, we also think it's very positive when you look into... You know, we have... I think a couple of things, more pragmatic approach that is in the CDU paper, more pragmatic, more cost efficient, market economy based, technology open, that all in totality lead to a more affordable energy system, which is then overall getting sort of more better social acceptance benefits. for the energy transition, which we then also clearly support. And other elements around grid digitalization, we feel that is anyway what we are pursuing, but we also think it's very positive that this is being stressed.

The second one was on timing differences and the normalization.

Yes. So, Harry, I hope you will understand that you will need to bear with us on that topic. We are now in the process of deciding if and when we are going to do it. At this point, we are not disclosing any impacts. that would have on our key figures.

Okay. Thank you. Fair enough. And thanks for the comments on the politics. Thanks.

Thank you, Harry. Then next question comes from UBS. Wanda Sevinowska, over to you.

Hi. Hi, Nadja. Two questions from me. The first one is on the nuclear. There's a lot of noise in Germany. If and your old nuclear will be back. So can you please comment from the technical point of view? Is it feasible? I mean, what have you done so far on ESA-2? What would be needed? And at the second part of the question, would it be still a fit for E.ON supply in Germany or would you be interested in running one nuclear asset in Germany? And the second question, sorry for coming back to CDU, CSU. I think in the paper they were also mentioning some cost efficiencies to make things. I think it's all about cost, right? So do you expect more scrutiny from the regulator around cap expense or cost efficiencies? Because we all know this is a very important part of your earnings. That would be appreciated. Any comments from you?

Yeah, on the nuclear side, I think that has been discussed a lot in previous calls, and we can just say we stand by what we have been saying earlier, that there is no economic, sensible way of bringing the plants back. Yeah, I understand that you would also, you know, you have now specifically asked for technical, you know, I would just leave it as that, you know, even if things could theoretically, technically be possible, if it's not economically sensible, there's no point in doing it. So then the second question, question would be around cost efficiency. So we looked in depth into the cost efficiency topics. And I think what was very clear is, you know, currently we have got huge waste from the redispatch cost. And by a higher digitalization, more investment in that, that can surely then go away. Then secondly, we have a lot of cost inefficiencies by ideologically saying, okay, it needs to be this way and without having market-based systems. And then, you know, cost efficiency, you know, we as a big and performance-orientated company, we have benefits in our cost efficiency. And if you ask me if anything, I think that is going to improve our comparable cost efficiency to the smaller operators because with more investment into digitalization, that is, of course, from a... cost digression point of view, of course, more beneficial for the big ones. So therefore, I don't see any negative headwinds coming from that to us, if anything positive.

Thank you very much.

Thank you, Wanda. The next question comes from Goldman, Alberto. Hi. Up to you.

Good morning. Good morning. Thank you for taking my two questions. The first one is on networks. You know, I really appreciate the comment by CDU as well about properly remunerating networks. So I wanted to ask you quite a broad question. Can you please tell us what is, in your view, an appropriate rate of returns, particularly for Germany networks? Is the return of 7% pre-tax on new investments the right one also, the existing assets, or is perhaps the 7% falling short of what you think it should be? And can you maybe give us an update of where we stand on the court case with the regulator? I understand there's a public hearing before Christmas. Can we get a decision? Is it next year? Can there be a settlement? So just broadly on the terms. The second one is quite specific on numbers. To me, what I noticed was perhaps the networks were a little bit lower than what I thought and retail was better. And I have two questions here to try and understand and clarify the underlying numbers. The first point is, can you tell us the weather effect that was a headwind this year by division? I was calculating 150, 200 million headwind, but I'm not quite sure. Now, if there is a weather effect, the underlying numbers are clearly much stronger. And also, I think this year you were supposed to release like 400 million of provisions or so in networks. Where do we stand on that? Did you do three quarters up until today or did you do less? So we're going to see higher network profits in the last quarter. I stop here and thank you for your patience.

Thank you, Alberto. Magically condensed to questions.

Yeah, I was about to say that. So the first question sounded for me a bit like more like two questions, but never mind. Yellow card, apologies. Yeah. So I think, you know, on the specific return requirements, you know that we are sort of addressing our demands directly with the regulator and don't necessarily go via our earnings call. But what I can say is you know that we have got this very strict value creation criteria, i.e., that we have 150 to 200 basis points surplus over on the top of our pre-tax cost of capital. And of course, our largest entity, Germany, lives up to these expectations as well. So therefore, if you combine that, you know as well that we've got for further increasing our investment program, that we would need to be able to adhere to the strict return criteria also under a larger capex envelope. As you know that we've got some elements in our EBITDA that not necessarily scale with higher investments. That would then imply that the overall function, the overall return function needs to work. So that's that.

Update on court case.

Update on court case. Yeah, I said it yesterday a bit. You know, there was this one update that we had over the course of the last quarter, which was the X-Gen, which is the... 0.91%, which was consulted at now at 0.91%, which was fully in line with our expectations. Other than that, there is honestly no further update, as we've been saying the last couple of calls. We see the results of the court case coming in 2025. We have a clear process on the RP5 in Germany, where we expect sort of the first framework, at the beginning of 2005, but then more clarity around the parameterization of the different elements over the course of 2025. So there is really no news on that. So sort of we are following up on what we have been saying and disclosing earlier. Then on your detailed question, and knowing that you do the numbers always very well, you know, yes, I think we highlighted it in the first half. We had some elements in there, some lower volumes driven by weather in the networks area, and also some higher upstream network cost. So as these are value neutral, and they're not the largest numbers, but as they are value neutral and we are still targeting for the midpoint of our guidance, you could then see that there might be a small surplus on the underlying growth for the fully on the energy network segment.

Thank you. Thank you, Alberto. With that, next question comes from James Brand from Deutsche Bank. Hi, James.

Hello. Hi, good morning. A couple of questions for me. Firstly, on the kind of regulatory reform process or the process of regulators going through, thinking about regulation for the next regulatory period, I think there's been quite a few, at least some consultation papers already. I was wondering whether you could just kind of summarize for us where you think the debate is at the moment, whether you think there are any kind of developments that regulators bring up that would be interesting in terms of the path of regulation, where it's going. And then the second question, obviously, even without increasing your capex envelope even further, the capex you're spending on networks is ramping up very materially. It's kind of almost doubling from where it was like a year or two ago to where it will be in a year or two. How are you finding the supply chain? Because that's something People ask about a bit more for transmission distribution, but do you think the supply chain's there? Are there any bottlenecks? Is there anything you're having to do to try and build up the supply chain before you can ramp up the CapEx? Just your thoughts on that would be really interesting. Thanks.

Yeah, I think, James, coming to your first question, you know, we see the discussion with the regulator as very constructive. To maybe highlight two elements that is what is currently being discussed is that we sort of return the return regime to a simpler VAC system. And the second element is sort of how do we manage to get a bankable return framework to ensure that we have, you know, that also the smaller DSOs can actually finance the energy transition. So that would be two elements. And, of course, you know about CANU and the things around faster depreciation of our gas assets. Yeah, and then when it comes to supply chain, I think I can just reiterate what we have been saying. We have been focusing on securing our supplies very early on. We started with that as part of the Edison project that was announced three years ago. have long-term framework agreements. We have really secured basically everything for 2025 and 2026. We are a very large off-taker of the supplies. That's why we really count on the three things. We give very long-term visibility. to our suppliers. We have a very diversified supplier portfolio, and we really look into standardization to make it easier for our suppliers, sort of reducing number of pylons from more than 100 to 20 different sorts or reducing the number of transformers from 100 to... types, 220 types, and then, you know, via sort of this massive scale down of variants, we can then also make sure that we are in a position to secure our supplies early on. So that's why we are very confident that this is not going to be a limiting factor for our build-out plans. Great. Thank you very much.

Thank you, James. Then next question comes from Pujarini Ghosh from Bernstein. Hi.

And thanks for taking my questions. So if I go back to the elections and specifically your thoughts on the potential slowdown in renewables build-out, which is probably being hinted at in the position paper, do you see any implications of that on your future CapEx plans? And my second question on the numbers slightly. So Nadia, you just mentioned that if rates were to remain where they were at nine months, net debt would be slightly higher than 41 billion by year end. Was that correct? And does it imply a subtle change from the H1 guidance, which was around the level of H1 by year end?

So maybe I take the second one first. No, that means that underlying, that means from a cash point of view, we are guiding to exactly the same area, but it's just, you know, the... the interest rates affecting the AROs and the pensions that make the difference. So there is not a subtle change in that element. Then coming to your first point, you know, I think when it comes to the build-out plans for 2020, From our perspective, the build-out plans are fully intact. You know, you've got the 2030 climate targets that have been ratified by the EU. And then, you know, there is no change that can be actually done by a potential new German government. Then you then look into sort of the most likely constellation, you know, CDU-led government or most likely coalition to be CDU and SPD. You can see that they're sort of basically pretty much in line, you know, what they are saying. Yeah, I'm, yeah. We are very confident for our CapEx program, as I indicated earlier. We have done a significant haircut, and we don't only do this growth in grids. You know, we have the build-outs, we have the current build-outs for renewables, but the grid now needs to follow, you know, what we have been seeing as redispatch cost. So it is highly economically sensible, you know, after this huge ramp-up of renewables first, that we now go and make up the pace also on the grid side. Yeah, okay.

Thank you, Bojarini. Then the next question comes from Maike Becker from HSBC. Hi, Maike.

Hi, thank you for taking my questions. I have two. Would you mind sharing with us your updated outlook on your main retail markets in the UK and Germany? How is competition developing? How do you feel about your outlooks for margins in those markets? And the second question is a little bit broader also on Germany. But it starts with the build out of the transmission system. And maybe if you have views, if that is going according to plan, or if that is maybe delayed, if you would share that with us, that would be great. And if there are then maybe implications for you. For example, if, I don't know, offshore wind is behind target and an offshore build out is slower and we're looking more to solar and onshore, to more investments on the distribution side versus the TSO? Or is it the opposite? If they're not the TSO investments, then there are also some things you can't do. If you have any views on that topic, that would be great. Thank you.

Yeah. So coming to your first question, Michael. So... So the retail business is developing absolutely in line with our expectations. We haven't seen any bigger changes on the market. You know, in the UK, there was some increase in market churn, but in no way comparable to the past due to the new announcement of the price cap. You know, as you know, as we are providing attractive offerings to our customers, market churn means both things. You know, we could lose more customers, but we can also gain more customers. So that is, in principle, a neutral thing. In Germany, we've seen some very high churn in the market in the first quarter that has been normalizing now. But of course, there is still the usual normal business environment with churn happening. And as we say, we are... We are having attractive offers. We are one of the largest in the market. We have got a portfolio effect. So market share increasing also means that we can actually gain customers. And if you can look at our H1 numbers, we actually – we are sort of broadly in line, and we actually increased our customer numbers a bit in the Netherlands. Then, yeah, so when it comes to TSO – Yeah, so there is, you know, large investments for the TSOs. And, you know, I understand your question a bit, you know, if there was less offshore, if that would then mean even more connection for onshore and solar. Yeah, you know, I don't want to speculate on that. I know that I currently have... more than enough opportunity to invest. So that will just then potentially even more increase our opportunities to invest. Then when it comes to... You know, I think what we highlighted in some instances, we are actually limited by how much a TSO invests, for example, when it comes to connection points. You know, we discussed about that we have six gigawatts of data centers that we want to connect it in some area due to the connection points and TSOs. takes that long, has that much backlog, that is actually sometimes hindering us to sort of invest to the full potential because that's the limiting factor for us.

Great. Thank you so much. Very helpful.

Thank you, Michael. Next question comes from Siti. Piotr, hi. Over to you.

Hi. Good morning, everybody. I have one follow-up on the supply division and the other I have on the grid fees. So with regards to the supply, I wanted to ask you if you can take us through the bridge between the 24 and 25. What is that in 25? you know you had a B2B large benefit in the first quarter of in UK this year and so on so market is looking basically for a flat margin and I just would like to get some kind of a hint from you whether that's a right assessment of the situation given somewhat small rising competition pressure and this special kind of a B2B benefit in the first half of the year so that's the question number one and the second question I wanted to ask you about the grid fees how Because you're talking about the 10% of the RAB increase in Germany, grid fees, I guess that's including a dispatching cost. They've been rising 10% a year over the last five years. So I just wanted to understand how do you think the grid fees within the bill will increase based on your kind of a, for your customers across your business plan until 28?

Um, Yeah, I of course understand the interest in 2025. You will understand that at this moment not yet disclosing on 2025. What I can say, however, is... Yes, we have seen some extraordinary high positive effect in UK B2B. We are very happy how the business developed. But some of the earnings that have materialized in this year were still contracted at times when we were able to get much higher risk premium. Then we also said that, you know, coming back to Alberto's question, that there were some volume-driven negative effects in our supply business in Q1. So that's what I can highlight with regard to this respect. Yeah. Now, it is very tough for us to guide on the development of grid fees. You know, as we've been discussing earlier, first of all, the big element in there is it's a combined TSO and DSO grid fee. I fully take your point. The redispatch costs are from a price perspective. a downwards development, but it's very hard to predict from a volume perspective because more and more renewables have been connected. How that from a volume perspective, we dispatch can, of course, go up. Yeah. Yeah, I... Yeah, I hope you understand. Because there's not that many variables, we are not disclosing our own view on how our grid fees are going to develop.

Okay, thank you very much.

Thank you.

Thank you, Piotr. So, next question comes from Ahmed Farman from Jefferies. Hi, Ahmed.

Hi, thank you for taking my questions. Two, probably two high-level questions, but So, I mean, you're clearly talking from a position of strength about the need for further investment, but there seems to be a lot of things going in the background. There's the court case, the consultation, German elections, and then you'll have to do some supply chain work for the additional capex above the current base plan. I just want to know if you can give us a sense of the timeline, when you will be able to put this all together for us. Is this something for Taking off of 25, is it for 26 or even earlier? We'll be very interested to know when when when the when the points can become visible for you to turn it into a business plan for us to understand. Number one. Number two on. So it seems like in the context of elections, there's a sort of broader debate about affordability. But we are also talking about more capex, more investments, higher return, both the TSO, DSO level. And, you know, at the same time, it seems to me that generally there's sort of inflation in the component and equipments that go into the grid. Could you just help me, like, what is the, in the context of this elections and the debate, what is the proposal out there that ties these things together? Is it just to simply move? some of the great fees to fund it another way, or are they going to be trade-offs? And we're going to see some sectors getting prioritized, others getting deprioritized. A little bit of perspective on that would be helpful.

Yeah, I think you summarized it. Coming to your first question, you summarized it very well. There needs to be a couple of things that come together. And, you know, we very clearly want to have better visibility on the regulatory framework. And as we have got very strict value creation criteria, you know, the visibility needs to be right in order to commit to a higher CapEx plan. And, you know, you highlighted and we have said, okay, we expect that more regulatory visibility is going to come over the course of the year 2025. Yeah, so we haven't set ourselves a direct timing, but of course, if we could get more visibility into a year, we would not be limited to year-end dates for our year-end call to give updates on that, but we could also do that into a year in the different quarters. Then to your second point, so very, very clearly, this reduction of grid fees that was highlighted in the CDU paper is only about sort of providing more subsidies into... providing more subsidies and sort of via that increase electrification and via that you get also then more people to share on the infrastructure cost so that is a virtuous circle. It was very clearly not that anybody it was very much the opposite saying okay look the return requirements on grid investments and if that is a a bit higher, that is not the big cost of the energy transition. It's rather the opposite, that if it is easier to fund a bigger capex envelope for the whole energy transition, it is then better to provide better returns for the overall funding situation. And if you compare the cost of a higher equity return to the cost of what we are currently affording by redispatch cost, because we have got the bottlenecks, that is a huge gap between the two. Yeah, so when it comes to, you talked about affordability, inflation, and there I would go back to what I said at the beginning of the call. All the points that have been highlighted around market-based, not ideologically, but technology open, pragmatic approaches, that all brings us sort of you know, to a more cost-efficient system. And why that also brings, you know, it is then easier to afford the energy transition.

Understood.

Thank you. That's very clear.

Thank you, Ahmed. So next question comes from Rob from Morning Stanley. Hi, Rob. Over to you. Hi, good morning.

Thank you. Quite a lot of ground covered already. Can I just clarify two things, hopefully relatively quick? The first one is with the Supreme Court ruling, can we just understand the lay of the land of the outcomes if the Supreme Court rules in favor of the utilities and against the regulator? is it automatic that you get the higher allowed return currently for CapEx on the entire RAB? Or then do we go back to the drawing board to find a compromise rate? I appreciate you don't want to say what that rate might be, but just to understand the range of outcomes and the mechanics would be super helpful. And returning all the way to the start, and I know you wanted to put this to bed, so I apologize for reopening it. You said the economics aren't sensible on nuclear. And so just conceptually for clarity and closure, if the Chancellor of Germany calls and asks for a nuclear restart, what would E.ON ask for to make it economically sensible? Thank you.

Yeah. So I will go for the first one. So if we win, the binnets will need to come back with a new proposal based on the court ruling. Yeah. And to the second, you know, we are not speculating on that. You know, we have been, you know, if then the new chancellor would call, then, yeah, we are not speculating, but we are not, that is now very hypothetically, like a couple of hypotheses in a row, and we wouldn't speculate on that.

Okay, thank you. I'll turn it over then.

Thank you, Rob. So next question comes from Ingo Becker from Kepler Schroeder. Hi, Ingo.

Hi, good morning. Thank you. Can I just ask on your investment prospects, just in case we see bigger change under conservative governments in the US, Europe, Germany, would there be any potential implications for your gas network investments? Maybe will there be additional catch-up needs of maybe lower maintenance that you did in anticipation of moving over to electricity faster? and or even maybe expansion prospects in the gas networks. I know it's early stage, but just wondering if maybe there is more headroom. And a quick follow-up. Could you confirm that the overall 42 billion CapEx plan of yours, which I understand has generally limited lead times, has limited or no stranded cost risk, just in case we see bigger change on the political side? Thank you.

Yeah, we are of course fully aware that the drill, baby drill, demands a new Trump agenda and a focus on gas. For us, we see in Europe still speed up for electrification. We are maintaining our gas distribution networks in a safe way. So that's why, and as you know, the currently foreseen exit dates are 2040 and 2045, and depending on the different states, there is still some way, some quite long distance up until then. And of course, we would need to orderly maintain our gas distribution networks up until then. So I don't really see a big... That being a big, you know, the changes in the U.S. policy, not really anything with a significant impact on us. Yeah, then 42 billion euro CapEx envelope. I don't see a stranded asset risk. As you know, we have a significant haircut compared to the national, compared to the NAP. And currently, we are investing in order to connect renewables, in order to connect new customers. That's approximately 50-50. That goes then hand-in-hand with more electrification. We are investing into sort of the reinforcement. We are investing into the digitalization. I couldn't foresee any market scenario where that wouldn't be sensible to do.

Thank you. Thank you, Ingo. I think the next question and the last question comes from Alberto Gandolfi. Alberto, over to you.

Thank you. I promise it is one. Just trying to gauge the underlying EBITDA for networks for this year. You know, you have a guidance of 6.7, 6.9. And I know there's lots of growth, but I'm trying to understand the underlying number. Am I right in thinking that this year E.ON is going to book extraordinary positives of about 400 million, which is about one year of organic growth? And if it is true you're booking 400 million, how much have you booked in the first nine months? How much is it left? to book so is it evenly spread by quarter the 400 million provision release or is it more you know back and loaded in q4 because if it's the latter k then the numbers are better so that's what i'm trying to figure out thank you so much

You make it hard for me that I now during the call and also need to do hard calculations. So what I can confirm is, you know, when we had our full year results, you know, in the full year results, we said on the EBTA, we are looking for the overall group to some approximately ballpark 300 million year over year underlying growth. And when you then take a low triple-digit million euro sort of negative hit on the regulatory account compared to what we thought at the beginning of the year, that would then increase, and this 300 million were mainly negative, Coming from the networks area, a small part was positive in energy retail and a small negative in corporate headquarters, and retail and corporate headquarters approximately netted themselves out. If you look at the 300 million positive underlying, you would have a small expansion to that compared to the small negative variances, which we've seen in the first half, which would be, of course, positive, you know, which would be recouped via our regulatory account. So the 300 would be then on the network side more 400.

Thank you. Thank you, Alberto. I think then we have answered your questions. If there are any further questions popping up, please feel free to reach out to the IR team. We remain at your disposal. And apart from that, thank you very much for taking the time and dialing in.