E.ON confirms outlook and sees operating business on track

• Robust nine-month results show business model's strength in Covid-19-pandemic
• Markets recover faster than anticipated
• Medium-term outlook and dividend guidance confirmed; from today's perspective, current selective lockdowns will not impact full-year guidance
• All EU conditions fulfilled, integration proceeding according to plan

E.ON today published its results for the first nine months of the 2020 financial year. The Essen-based energy company delivered a strong operating performance in the third quarter, with a more rapid recovery in its markets than anticipated. From today's perspective, the current selective lockdown measures in E.ON's core markets will not have a material impact on its full-year results. E.ON therefore confirms its results targets for the financial year. The energy networks and customer solutions businesses demonstrated their strength in the Covid-19-pandemic.

E.ON's operating business developed very robustly in the first nine months. As anticipated, nine-month adjusted EBIT declined by about €300 million to €2.7 billion. Adjusted net income decreased from €1.3 billion in the prior year to €1.1 billion.

The decline is predominantly attributable to the adverse impact of the Covid-19-pandemic and unseasonably warm weather at the start of the year. About half of the adverse results effects of Covid-19 will be recorded at the regulated network business. Regulatory mechanisms in the various markets will make it possible to recover a large portion of these effects in 2022 to 2024.

In view of these robust results, E.ON confirms the full-year outlook it revised at mid-year to reflect the corona pandemic's results impact. E.ON continues to expect the Group's 2020 adjusted EBIT to be between €3.6 and €3.8 billion and its adjusted net income to be between €1.5 and €1.7 billion.

E.ON CFO Marc Spieker said: "We've delivered a strong operating performance in the current financial year. The energy networks and customer solutions businesses deliver robust results. Taking timely, prescient action has enabled us and will continue to enable us to limit the pandemic's impact. The sustainable effects are therefore moderate, and our business model has demonstrated its high degree of resilience during the crisis. This gives us the confidence to fully confirm both our medium-term targets and dividend guidance."

Operating performance as planned

The Energy Networks segment in particular put in a stable performance and contributed adjusted EBIT of roughly €2.3 billion to the Group's total earnings. This was about 9 percent less than the pro forma prior-year figure. The reasons included regulatory effects in Sweden and a reduction in volumes due to the Covid-19-pandemic.

The Customer Solutions segment's adjusted EBIT declined to €378 million, which is 10 percent lower than the pro forma prior-year figure. Significant operating improvements, primarily in the United Kingdom, could not fully compensate for the effects of the warmest start to the year since weather records began and of the pandemic.

The digitalization of processes at Customer Solutions is making great strides. To date, E.ON has already migrated one million customer accounts in the United Kingdom to its new digital customer platform. The company expects the transformation in this market to be fully completed by mid-2022. The migration of E.ON's customers in Germany to a new cloud-based digital platform is moving forward as planned as well.

innogy takeover concluded, integration on schedule

The innogy takeover was successfully completed. E.ON swiftly carried out the sale of customer solutions businesses in Hungary and the Czech Republic as well as the heating electricity business in Germany, which were conditions the European Commission had imposed to clear the transaction. In addition, effective October 1, E.ON had migrated about 2.5 million innogy customers to the E.ON brand family. As planned, E.ON will therefore deliver the innogy transaction's planned synergies of about €740 million from 2022 onward and about €780 million from 2024 onward.

Stimulus packages create growth opportunities for E.ON

Of the €750 billion in total funding that the EU will make available for economic recovery in the Covid pandemic, around €60 billion is earmarked for climate-related expenditures in the relevant E.ON markets. This could create growth opportunities and future earnings potential for E.ON. E.ON is already successfully implementing projects co-financed by the EU. Examples include smart grid initiatives on the Czech-Slovak border and the "Danube-InGrid-project" to improve supply security in the border region of Slovakia and Hungary. Projects like these support E.ON's medium-term target of achieving annual growth in its regulated asset base for power of 4 to 5 percent on average.

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 SE does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to align them to future events or developments.