Problems of E.on

The Challenge of Energy Revolutions

Jouy-en-Josas, 12th September 2014

Pranav GOYAL

Yusen LUO

Robin SCHRÖDER

Sophie TRIBIUS

Harold MEGDOUD

E.ON’s Symptoms at a Glance

Has E.ON’s Business Model Become Obsolete in the last Years?

140 120 100 80 60 15 40 20 0 2007 -20

Sales Share Price

40 35 30

20

10

Income

2008 2009 2010 2011 2012

5 0 2013 -5





Dramatically decreasing Income margin: from 10.8% in 2009 to 7.5% in 2013  lack of efficiency

Substantial share price drop since ATH 2008: -38.6%  lack of trust

2

E.ON – The Challenge of Energy Revolutions

EUR (share price)

25

Billion EUR

Turbulent Industrial Context

Financial Crisis, Fukushima & Dropping Wholesale Electricity Prices

Regulartory & Economic Outlook

Global Economic disruption „Energiewende“ Gradual phase out of nuclear energy Uncontrolled subsidies of RE

60

25

50

Coal phaseout long run

EPEX SPOT

40

Share price in EUR

20

GDF Suez

30

15

Closing of all nuclear power plants until 2022

20

E.ON

10 07.01.2009 10 07.01.2010 07.01.2011 07.01.2012 07.01.2013 07.01.2014

Intensified CO² regulation

Corporate Strategy

Long-term gas contract with Gazprom (til 2036)

Launch of „E.ON 2.0“

Re-negotiation of Gazprom contract price (-30%)

E.ON – The Challenge of Energy Revolutions

3

Impact of the German Energy Transformation

Diminished Margins through Decreased Wholesale Electricity Prices

Germany’s wholesale electricity market

€ per MWh, July 1st 2014

Oil Oil and old and old plants plants

Gas Coal Coal

Gas

Nuclear Nuclear

Renewables Renewables

Government support for renewable energy sources (subsidies and grid priority) lead to deficit production by gas and oil power plant

E.ON – The Challenge of Energy Revolutions

4

US Coal Export & CO² Emission Certificates Allotment

Short- to Mid-Term Renaissance of Coal-Generated Power Plants ?

Coal import from the US...