DGAP-News: E.ON SE: E.ON delivers solid operating earnings

DGAP-News: E.ON SE / Key word(s): Half Year Results E.ON SE: E.ON delivers solid operating earnings in core business 10.08.2016 / 07:30 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- E.ON delivers solid operating earnings in core business - Adjusted EBIT in core business up 15 percent to EUR1.7 billion - Adjusted Group EBIT of EUR2 billion 6 percent below prior-year figure - Impairment charges (EUR2.9 billion) and provisions for contingent losses EUR0.9 billion) at Uniper lead to significant net loss for E.ON of EUR-3.0 billion - Full-year 2016 forecast affirmed: adjusted EBIT expected to be between EUR2.7 and EUR3.1 billion, adjusted net income between EUR0.6 and EUR1 billion - Economic net debt rises to EUR24.8 billion relative to pro forma year- end 2015 figure for new E.ON of EUR21.3 billion Overview E.ON concluded the first half of the year with solid operating results in its core business. Adjusted EBIT in the core business (Energy Networks, Customer Solutions, and Renewables) of just under EUR1.7 billion was EUR200 million, or 15 percent, above the prior-year figure (EUR1.5 billion). Adjusted Group EBIT, which includes the Non-Core Business segment and discontinued operations, declined by 6 percent to EUR2 billion but was in line with our expectations. Adjusted net income declined by EUR232 million, or 28 percent, to EUR604 million. The primary reasons for this were high tax payments relating to earlier reporting periods and the fact that the prior-year figure includes the earnings of businesses that have since been divested. If these prior- year earnings are factored out, adjusted net income would have declined only by about 8 percent, despite the high tax rate. Impairment charges on power stations and gas-storage facilities and provisions for contingent losses totaling EUR3.8 billion at Uniper led to a significant net loss of just over EUR3 billion at E.ON. E.ON affirms its forecast for full-year 2016. The company expects Group adjusted EBIT of EUR2.7 to EUR3.1 billion and adjusted net income of EUR0.6 to EUR1 billion. Economic net debt rose to EUR24.8 billion relative to the pro forma figure of EUR21.3 billion for year-end 2015 that E.ON released in April. Alongside the dividend payment for 2015 and the capital endowment for Uniper, the primary reason was an increase in provisions for pensions resulting from a further decline in interest rates. Operating cash flow before interest and taxes increased by 21 percent to EUR2.3 billion, mainly because of an improved cash-conversion rate, which at 80 percent was in line with the company's E.ON Focus financial framework. Segment performance Energy Networks' adjusted EBIT declined by EUR73 million to EUR872 million owing to the absence of positive one-off items recorded in the prior year. Customer Solutions' adjusted EBIT increased by EUR131 million to EUR659 million. Adjusted EBIT in Germany decreased by 6 percent to EUR164 million because of the transfer of the wholesale business. Adjusted EBIT in the United Kingdom increased from EUR218 million to EUR291 million owing to lower costs in conjunction with government-mandated energy-efficiency measures and in procurement. Renewables' adjusted EBIT rose by EUR53 million to EUR254 million. Although Onshore Wind/Solar's adjusted EBIT decreased primarily owing to negative price effect and positive one-offs in the prior year. Offshore Wind/Other's adjusted EBIT rose by EUR150 million, mainly because Amrumbank West and Humber Gateway wind farms were fully operational for the entire period in the current year. Adjusted EBIT at Non-Core Business declined by EUR131 million to EUR283 million, mainly because of the decommissioning of Grafenrheinfeld nuclear power station and declining market prices. Lower expenditures for the nuclear-fuel tax in 2016 had a positive impact on adjusted EBIT. Uniper spinoff right on schedule At the company's Annual Shareholders Meeting in Essen on June 8, about 99.7 percent of E.ON shareholders voted in favor on spinning off a 53.35-percent majority stake in Uniper. Because no lawsuits have been filed against the Annual Shareholders Meeting's decision, from today's perspective nothing stands in the way of the next steps toward Uniper's stock-market listing in September. The work to prepare the Uniper stock prospectus is on schedule. In addition to JP Morgan and Morgan Stanley as Global Coordinators, E.ON has also mandated Citigroup for flowback management. The stock-market listing will automatically make E.ON shareholders Uniper shareholders as well. The allocation ratio is 10:1. This means that for each ten shares of E.ON stock, shareholders will receive an additional one share of Uniper stock. Shareholders will then be free to decide whether they want to retain their E.ON and Uniper stock or to adjust their portfolio. With greater flexibility to manage their assets, they can decide whether to put their faith in the future development of E.ON, Uniper, or both companies. The spinoff will give the two companies greater strategic and entrepreneurial room for maneuver as well. E.ON and Uniper will be able to focus entirely on their respective markets, which differ considerably. The new E.ON's three core businesses (energy networks, customer solutions, and renewables) are geared toward the new energy world, whereas Uniper's businesses (power generation and energy trading) are geared toward the conventional energy world. 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 conform them to future events or developments. --------------------------------------------------------------------------- 10.08.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: E.ON SE Brüsseler Platz 1 45131 Essen Germany Phone: +49 (0)201-184 00 E-mail: info@eon.com Internet: www.eon.com ISIN: DE000ENAG999 WKN: ENAG99 Indices: DAX, EURO STOXX 50 Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated Unofficial Market in Tradegate Exchange; Mailand End of News DGAP News Service --------------------------------------------------------------------------- 491015 10.08.2016