E.ON SE

Good morning, everyone. Dear analysts and investors, a warm welcome from my side to our full year 2024 results call. I am here with Leo and Nadja, who will present our results. As always, we will leave enough room for your questions afterwards. With that, over to you, Leo.

Thank you, Iris. Warm welcome to all of you also from my side. Our full year 2024 earnings reporting comes at a really exciting time. We just had a federal election last weekend here in Germany, and the EU Commission is right today communicating on the Clean Industrial Deal. So really an interesting moment in time to also have the full year numbers. So both events are very important for Germany and for Europe. Both will likely offer new positive impulses for the energy transition. And why am I convinced of that despite all the challenges? Because we need now more focus on economic growth and competitiveness. to make the next update to the energy transition a success. And I expect exactly such a renewed focus to be a priority in both Berlin and Brussels. And we'll leave enough time in the Q&A to discuss politics if you want. But now I would rather turn to our business. I have four messages for you. One, we have delivered what we promised. In parallel, we have invested into the future in getting stronger. Our growth case is intact. And lastly, it delivers value to our shareholders. So let's explore that a little bit. We delivered on our guidance for 2024, as promised, based on strong operational and financial performance. And at the same time, we have delivered also the CapEx growth story, which is the basis for future earnings growth. But second, we have not only delivered the financial numbers, but we have also done that in a way that makes us stronger. We have strengthened the foundation of our energy leadership and future growth paths, and we have done this through continued standardization, digitization, automation of all our businesses. And that creates the base for further value creation as well as the efficiency of the entire energy system. And we have also launched a new chapter in our flexible offerings to our customers in energy retail. Third, the growth case is intact. Despite all the discussions around the energy transition, the future of the energy transition, the growth requirements, the demand for our products in energy retail, the demand for our infrastructure, in networks and in heat and energy infrastructure solutions is intact, and that provides upside potential given the right investment conditions for additional capex, especially in the regulated business. And we remain focused on creating long-term value for our shareholders. Our updated ambitious guidance is an evidence of this commitment. So let me go briefly into that. On the financial delivery, We had challenging conditions in 23 and they continued in 24. The war of Ukraine is now three years running, still ongoing. Economy is weak, interest rates and energy prices stayed volatile and we saw rising geopolitical risks, especially in the last weeks, evident for everybody. And despite this challenging environment, our operational and financial performance remained strong. We have delivered the group earnings with an adjusted EBITDA of €9 billion, reaching the upper end of our guidance. We've also set a new benchmark for our investments, which increased year over year by €1 billion to €7.5 billion, up from €6.5 billion last year. And this demonstrates that our growth momentum continues to accelerate, driven primarily by those networks' investments. We have successfully added around 500,000 new connections and installed more than 6,000 digital substations in 2024, and this is contributing to an increase in RAP effective investments of over 16% in 2024, and Nadia will go into the details of our earning performance later. On the second message, we have delivered the numbers while at the same time becoming stronger. Indeed, we have not only delivered what we promised, but we have pushed forward to become stronger for the next years, especially through digitization. In our energy networks business, this means standardizing assets, leveraging state-of-the-art technology, and streamlining processes. You can digitize if you standardize before, and not only the hardware, but also your internal processes. To date, we have standardized over 90% of the core components used in the power grid built out for our German distribution network operators. This is not only, this on top of allowing us to digitize is also the base for our strong supply chain performance and the de-risking of our future CapEx plan. It allows us to achieve a higher level of automation, because if we standardize, we can digitize, then we can automate in almost all our processes. In 2024, for example, we doubled the number of users of our enterprise asset management system, which optimizes the build-out and the maintenance of our grid. 80% of our German RAP is now managed on this one digital platform, and this year we have started to roll it out to our international grid companies. Last year, our first local network companies also switched to our new standardized meter-to-cash platform to achieve a higher efficiency level for customer billing processes. And this boosted, for example, our automation rate for a change of supplier to 99%. And additionally, we have also continued to roll out our future EonGrid platform. grid connection solution, iConnect, in our largest distribution network operator, Westnets. A key part of this solution is our successful Envalio platform, which is already in use in more than 60 distribution network operators worldwide. So again, you standardize so that you can digitize, so that you can automate, so that you become more efficient. All these solutions feed into one standardized data platform, and that allows us to leverage our scale even further with innovative AI applications based on digital twins, et cetera. For example, we're using AI for predicting bottlenecks in our high-grid voltage system. A high-voltage grid system already invests in it as a pilot. Driven by the achievements in digitization, we were able to increase our CapEx over the past three years by 70%, increasing the CapEx efficiency per employee by roughly 11% year over year. That's a productivity progress that few can actually match. It just shows how much digitization needs to be core of our strategy. of our growth strategy, especially in a growth strategy, it is so important. Now let me also talk how we are an innovative playmaker in our energy retail business to meet the evolving customer needs. There we have further strengthened our digital backbone for the customer journey. We have migrated an additional 5 million accounts to an updated digital sales platform in 2024. And we handled two out of three customers fully digitally, which is a significant increase versus the past. That also translates into an enhanced customer experience facilitating an improvement of our net promoter scores by on average 13 points per country in critical journeys like iComplain. And this improvement in customer interactions is key in making our customers happy so that they actually stick with us. The excellence in our operations is evidenced by the loyalty of our customers. Seven out of 10 customers stay with E.ON for more than three years, trusting our brand and our excellent offerings. We have also created the first momentum to tap into the upcoming opportunities in the flex business, where we benefit from our large and loyal customer base. And it's clear that this is essential because in the new energy world, price volatility increases as we more frequently experience hours of scarcity, obviously with no sun, like night and no wind, but also hours with immense electricity production and a surplus. And both phenomena are completely unrelated to when the energy is actually needed. And our goal is to empower our customers to turn such fluctuations on the supply side from a challenge into an opportunity for them to actually benefit from that also financially. And we have therefore launched first flexibility propositions and are testing these with customers in our core markets. And on top, we also own the critical technology needed for this transformation. For example, our GridX home energy management platform, which has already achieved an annual market share of 10% in Europe in 2024, and which is growing three times faster than the market. And it all translates into our claim, we make new energy work. Now, you might wonder, is this growth case intact? And our answer is, it is intact. It even has significant upside potential. The energy transition remains a key underlying growth driver for additional network investments for the foreseeable future. And as you can see from the chart, there's still actually significant upside potential for additional network CapEx compared to our investment plan. And this is not only according to our own company view, but is also documented by basically all external institutions, even when considering a more pragmatic political approach to net zero ambitions. So, to make it very clear, we are absolutely sure that no matter what actually happens in the political space in Brussels or Berlin, it will not lead to scenarios where we have no additional growth potential. Now, however, To accelerate and benefit from that additional growth potential, there are two conditions which we need. And the first one is we need to make sure that this additional investments, this energy transition is affordable to maintain societal acceptance for this transition. And that is clear because obviously all these investments require a significant financial resource and to keep the energy system affordable for all, electrification and a more pragmatic approach to net zero target is key. When electrification increases, electricity consumption will rise, allowing systems cost to be spread over a broader base, which will actually ensure affordability and acceptance also going forward. And the second critical factor is obviously a regulatory framework that ensures attractive network investment returns, and only international competitive returns will attract sufficient capital to ensure a scaling of the grid infrastructure to avoid rising energy system costs going forward. And this is why we believe the system case is intact, but it has a precondition. And that brings me to my final point. We've upgraded our financial framework and Nadja will go into more detail on that. We still provide guidance up to 2028 as we have visibility for that period and I might say only for that period and not for 29. Our dividend growth target remains unchanged and attractive up to 5% per annum while we manage a major growth program and pursue attractive investment opportunities in Germany and across Europe. We maintain our strict value creation criteria as a key principle. Our increased capex envelope of 43 billion euro fully meets our strict investment criteria and we expect to keep our 2028 capex levels beyond our guidance period. But whether we can accelerate our CapEx spending further will depend on the attractiveness of returns, as I just said, in the next regulatory period for power in Germany, which starts in 2029. If, as we expect, returns, allowed returns, are sufficiently economically attractive, we could lift our CapEx run rate already in 27, 28. And Nadja will now guide you through the details of our financial performance in 2024 and the updated financial framework. Nadja, over to you.

Thank you, Leo. And a warm welcome to all of you from my side. I'm happy to share with you the details of our 2024 financial performance and our outlook until 2028. My four key messages for today are, first, We delivered on our financial promises. Leo just gave you the numbers. An adjusted EBITDA of 9 billion euro, achieving the upper end of the guidance range. An adjusted net income of 2.9 billion euro, reaching the midpoint. A record high investment level, growing total capex by 16% year over year to reach 7.5 billion euro, which exceeds the guided 7.2 billion euro. Second. We are continuing with our investment strategy with a clear commitment to value creation. We ensure that across all our segments, every euro spent creates value for our shareholders. We have increased our energy network's five-year capex plan by 1 billion euro. This is in line with the 2024 regulatory improvement we achieved in Germany through an accelerated depreciation of our gas grids. This underlines that good regulatory visibility has been and remains the only prerequisite for investments and not the outcome of the court case in Germany on ROE. Third, we introduced a strong new guidance for 2025 and an improved outlook for 2028. This is driven primarily by our energy networks business. We are committed to delivering high single-digit annual growth in our underlying adjusted EBITDA and adjusted net income between 2024 and 2028. For now, we keep 2028 as the guidance year. To roll our outlook forward, we first need to achieve a sufficient degree of visibility on the key regulatory parameters for the next regulatory period for power networks in Germany starting in 2029. The German regulator Bundesnetzagentur has started a transparent pre-consultation. However, it is still too early to have clarity on crucial elements of the new return framework. And fourth, our strong balance sheet provides a solid foundation for value-creative organic growth and increasing distributions to our shareholders. Let us now move on to our 2024 year-over-year adjusted EBTA performance bridge. Our adjusted EBTA came in at the upper end of the guidance range. The 8% growth in our underlying adjusted EBTA exceeded our expectations. This was driven by a stronger growth in our energy networks business. Here, we saw a significant EBITDA increase through accelerated investments into our regulated asset base across all regions. In our largest market, Germany, additional growth came from the positive inflation indexation of our regulatory revenues. The underlying growth was offset by timing factors in 2023 and 2024. In our second largest market, Sweden, we benefited from WAP-driven growth and the increase in the regulatory WEC in 2024, overcompensating the end of network loss recoveries in 2023. In Central Eastern Europe, investment-driven earnings growth was offset by the adjustment in accounting for our Slovakian operations to an equity basis, resulting in a technical adjusted EBITDA reduction. In Southeastern Europe, our successful regulatory management led to year-over-year growth, largely due to higher volumes and network loss recoveries. Moving on to our energy infrastructure solution business, where we ended on par with the prior year. As communicated, we landed in the lower half of the guidance range due to mainly temperature-related volume impacts in the first half of the year. In energy retail, we delivered another strong year and finished at the upper end of the guidance range while keeping our customer base stable. This achievement was made possible mainly by our successful core B2C energy sales business. Also, our B2B performance in the UK was exceptionally strong in 2024. Earnings impacts for milder temperatures at the beginning of the year were broadly offset by an overall positive weather impact in the last quarter. The year-over-year drop in adjusted EBTA was caused by the positive one-offs of 700 million euro in 2023. Moving on to the next slide. Our adjusted net income came in at 2.9 billion euro at the midpoint of our guidance range. The underlying growth of 7% follows the strong EBTA development. DNA increased more than foreseen as we decided to bring forward some of our digitalization investments. Our balance sheet remains strong. With around 41 billion euro of economic net debt, our leverage factor landed at a comfortable 4.5 times. As a reminder, the debt factor was lower last year due to large run-offs. However, we are and will stay comfortably below our up to five times promise. This was supported by a cash conversion rate of 90%, coming in fully as expected. For the period 2024 to 2028, we continue to expect cash conversion to reach 100% on average. Our balance sheet continues to serve as a solid basis for our organic growth. We accelerate capex spending by 16% year-over-year, enabled by higher WAP-effective spending in energy networks, strong spending on new projects and energy infrastructure solutions, including a large-scale battery project in the UK, as well as growing digital spend in our energy retail business. When it comes to our investment strategy, we remain strictly committed to our value creation criteria, 150 to 200 basic points ROCE over VAC spread for our entire energy networks business, a 120 to 350 basis point IRR spread for our project and energy infrastructure solutions, and a 3 to 5% B2C margin along with a 5 billion euro cash contribution in energy retail. For energy networks, we saw regulatory improvements from the so-called Carnot 2.0 regulatory changes in 2024, facilitating the acceleration of the regulatory depreciation of our gas assets. This allows us to recoup cash from our gas networks earlier, enabling us to increase our capex plan by €1 billion to €43 billion. The reinvestment means that we can shift capital from existing gas assets into new power assets, achieving an around 2% higher VAC remuneration. And with that, we fully keep our value creation promise for our overall investments. This demonstrates our readiness to increase investments whenever additional value for our shareholders can be created. As Leo has already stated, we expect to keep at a minimum our 2028 capex levels for the years beyond our guidance period. And if allowed, returns from 2029 onwards are, as we expect, economically attractive. We could potentially lift our capex run rate already in 2027 or 2028. For this, however, we first require regulatory visibility, and as soon as this is provided, we are prepared to respond. Whilst visibility of the key regulatory parameters remains outstanding, we appreciate that the German regulator has started a transparent pre-consultation. The key topics that were outlined in the information document published in January include a move to a simplified VAC approach for capital cost remuneration and for the continuation of a five-year regulatory period, which we support. Turning to our 2028 outlook, we inspect an underlying EBITDA CAGR of 7% for the period 24 to 28, with the corresponding underlying adjusted net income CAGR of 7%. For 2025, we commit for an EBITDA of €9.6 to €9.8 billion and an adjusted income of €2.85 to €3.05 billion. 2025 is expected to benefit from the continued RAP-effective capex growth. Additionally, adjusted EBTA will be boosted by the accelerated depreciation of our gas grids in Germany. For 2028, we targeted EBITDA of more than €11.3 billion and an adjusted net income of around €3.4 billion. The improvement versus our prior outlook is driven by the underlying strength of our energy networks business. Please remember, our adjusted net income is well protected against movements and long-term interest rates. Due to the interest-making mechanism for new investments in our German networks business, a change in financing costs are generally offset by a corresponding change in adjusted EBITDA. During our nine-month results call, we shared that we are considering to present our reported financials excluding value-neutral timing effects to make the underlying performance in our energy networks business more visible. As of Q1 2025, reported numbers will stay in the old format, but we will provide performer figures in the IR materials. With the reporting for full year 2025, our outlook for full year 2026 and beyond will be adjusted for value-neutral timing effects. At this point, we do not expect any major adjustment items beyond the known negative timing factors in 2028 and some continuing network loss recoveries in southeastern Europe in 2025. Let me now share with you how our growth story is supported by all three business segments. The improvement in the 2028 outlook is driven by energy networks. Underlying performance is expected to be particularly strong in Germany, driven by the additional 1 billion euro capex spending and the adjusted EBITDA uplift from the accelerated depreciation of our gas grids. Outside of Germany, regulatory improvement also supports the adjusted EBITDA outcome. Energy infrastructure solution is expected to grow at a CAGR of 11% until 2028. The minor reduction in 2028 adjusted EBITDA outlook is mainly driven by slightly worse than foreign exchange assumptions in the Nordics. For energy retail, we expect the 1.7 billion euro underlying run rate from 2024 to continue into 2025, ramping up to 2 billion euro by 2028. The main growth drivers are firstly capturing opportunities in the flexibility market through innovative products. Secondly, efficiency gains from further digitalization. And thirdly, centralization and advanced optimization of portfolio management. Let's now move to our financing outlook. Our strong balance sheet creates a solid foundation for organic growth and attractive shareholder returns. We remain committed to a strong BBBAA rating. Our additional balance sheet capacity remains unchanged at 5 to 10 billion euro. We maintain our discretionary disposal program of €2 billion. We will continue to opportunistically execute disposals to enter into joint ventures to crystallize value, access funding for growth, or to streamline our portfolio. We have completed around €150 million of disposals in 2024. We are pursuing further transactions with a total amount in the mid-triple-digit million euro range, including the pending Romanian retail transaction. Whilst aiming for guidance neutrality, we cannot fully exclude small impacts on group guidance for EBITDA and adjusted net income for new transactions. This provides us with the flexibility for executing our strategic growth agenda. Finally, I would like to close the presentation today by repeating my four key messages. First, we once again delivered strong results in 2024. Second, we remain fully committed to creating shareholder value through value-creative organic growth and attractive shareholder remuneration. Third, we will use the enhanced regulatory depreciation of our gas quids to increase our 2024 to 2028 investments into the German power web by 1 billion euro. Our 28 adjusted EBITDA and EPS increases to more than €11.3 billion and around €1.30 respectively, bringing our underlying earnings CAGR again into the high single digits. Fourth, our balance sheet remains strong and supports future growth while fully confirming our strong BBBAA rating commitment. If regulatory returns from 2029 onwards are attractive, E.ON will ramp up investments potentially already in the years 2027 and 2028. And with that, over to you, Iris.