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E.ON AG Analyst
Conference
Presentation by Dr. Erhard Schipporeit
December 7, 2000
Group Performance (1)
€ in millions (pro forma)
9 months 20009 months 1999
Group external sales
+/- %
69,855
50,020
+40
1,895
2,073
-9
1,255
1,818
-31
Oil
226
-44
-
Chemicals
507
377
+34
-543
-583
+7
53
106
-50
556
321
+73
-159
78
-
Group internal operating profit
Electricity
Telecommunications
Real Estate
Other Activities
E.ON AG/consolidation
Group Performance (2)
€ in millions (pro forma)
9 months 20009 months 1999
+/- %
Group internal operating
1,895
2,073
-9
profit
4,558
2,245
+103
-135
-204
+34
387
268
+44
365
179
+104
7,070
4,561
+55
-3,051
-1,553
-96
4,019
3,008
+34
-311
-93
-234
3,708
2,915
+27
Net book gains
Cost-management and
restructuring expenses
Other non-operating earnings
Foreign E&P taxes
Pretax income
Income taxes
Income after taxes
Minority interests
Electricity - Power supplied
kWh in millions
9 months 20009 months 1999
+/- %
Standard-rate customers
23,005
21,005
+9.5
Special-rate customers
39,825
36,886
+8.0
Distributors
87,088
71,846
+21.2
14,450
6,606
+118.7
6,119
3,291
+85.9
156,036
133,129
+17.2
thereof foreign utilities
thereof traders
Total power supplied
Electricity - Key figures
in millions (pro forma)
9 months 2000 9 months 1999
Sales
thereof electricity taxes
Internal operating profit
Production/Sales volume
Power supplied
Power generated
+/- %
€
€
9,132
9,756
-6
304
176
+73
1,255
1,818
-31
kWh
kWh
156,036
133,129
+17
90,081
81,858
+10
Electricity - German industrial power prices
in Pf/kWh
16.000
14.000
12.000
13.497 13.453
11.244 11.244 11.262 11.262 11.262 11.257 11.248 11.236
11.236 11.236 11.249
10.000
8.000
6.000
4.000
2.000
0
Nov 99 Dec 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00 Oct 00 Nov 00
Source: VIK - Industrial customers with power consumption between 100 kW/1,600 h and 25,000 kW/7000 h
Oil - Key figures (1)
€ in millions
9 months 2000 9 months 1999
Sales
thereof petroleum taxes
Internal operating profit
+/- %
20,226
8,035
+152
6,932
2.838
+144
226
-44
-
38,996
39,339
-1
769
901
-15
29,178
23,948
+22
3,838
3,205
+20
Production/Sales volume
Crude oil production in 1,000 bbl
Natural gas production in million m3
Pretroleum products sales volume in 1,000 t
Petrochemical products sales volume in 1,000 t
Oil - Key figures (2)
€ in millions
9 months 20009 months 1999
Internal operating profit
226
-44
171
-2
90
31
-35
-73
Average crude oil price ($/barrel)
28.0
15.8
Refinery margins ($/ton)
24.8
14.6
Upstream
Downstream
Other
Chemicals - Key figures
€ in millions (pro forma)
9 months 2000 9 months 1999
Sales
Internal operating profit
•
Bouyant global demand
•
Favorable currency effects
•
Higher product prices
•
€131 million in synergy effects
+/- %
14,821
11,427
+30
507
377
+34
Telecommunications - Key figures
€ in millions (pro forma)
9 months 2000 9 months 1999
Sales
Internal operating profit
+/- %
264
188
+40
-543
-583
+7
•
Sale of activities with high startup losses (Otelo and E-Plus)
•
Interest income on sales proceeds
•
Booming mobile communications market leads to higher customer acquisition costs
Real Estate - Key figures
€ in millions
9 months 2000 9 months 1999
Sales
Internal operating profit
+/- %
832
771
+8
53
106
-50
•
Higher maintenance and modernization expenditures
•
Higher interest expenses
•
Fewer housing units sold
Other Activities - Key figures
€ in millions (pro forma)
9 months 2000 9 months 1999
+/- %
Distribution/Logistics
Sales
19,330
15,711
+23
396
255
+55
2,530
2,040
+24
180
191
-6
1,891
1,553
+22
50
48
+4
Sales
654
475
+38
Internal operating profit
-70
-173
+60
Internal operating profit
Aluminum
Sales
Internal operating profit
Packaging*
Sales
Internal operating profit
Silicon Wafers
* including Schmalbach-Lubeca and excluding Gerresheimer Glas
Outlook for full year 2000
• Pretax income: up considerably year-on year
• Group internal operating profit: to show slight improvement on nine-month performance
• Electricity: preliminary indications of a trend shift in power prices; internal operating
profit
still markedly below prior year‘s level
• Oil: internal operating profit up substantially year-on-year
• Chemicals: internal operating profit to distinctly exceed previous year‘s performance
• Telecommunications: significant startup losses, though at a lower level than in 1999
• Real Estate: internal operating profit to surpass 1999 figure
• Other Activities: internal operating profits expected to be higher - in some cases quite
considerably higher - year-on-year
US GAAP
• Purchase accounting creates €6bn of goodwill
• Market-value approach allocates €5bn to Telecommunications Division
• Sale of Orange reduces goodwill by €1bn
• Exercising put option for VIAG Interkom interest would reduce goodwill
by an
additional €4bn
• Earnings impact of amortization of goodwill negligible: higher long-term
earnings potential
• Market-value approach results in lower gains from disposals
Value-based management
• Return on Capital Employed (ROCE) to be central performance metric
• Guarantees high degree of transparency and increases
comprehensibility
• ROCE facilitates comparisons with competitors