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Adjusted EBITDA: EUR3.2 billion, an increase of 18% year-over-year.
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Adjusted Net Income: Approximately EUR1.3 billion, up 22% year-over-year.
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CapEx Spending: Increased by around 13% year-over-year, primarily in the Energy Networks business.
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Economic Net Debt: Approximately EUR44 billion, reflecting typical Q1 cash flow seasonality.
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Energy Networks EBITDA Growth: Driven by accelerated investments and network loss recoveries in Southeastern Europe.
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Energy Infrastructure Solutions EBITDA Growth: Higher weather-related volumes and improved asset availability.
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Energy Retail EBITDA Growth: Increased earnings from higher volumes due to weather conditions.
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UK B2B Business Performance: Continued strong performance in Q1.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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E.ON SE (ENAKF) delivered a strong operational financial performance in Q1 2025, with adjusted EBITDA reaching EUR3.2 billion and adjusted net income at EUR1.3 billion, marking increases of 18% and 22%, respectively.
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The company’s increased earnings were driven by investment-backed growth, strong operational execution, and higher volumes from normalized weather conditions.
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E.ON SE (ENAKF) accelerated its CapEx spending by around 13% year-over-year, with a significant portion allocated to the Energy Networks business.
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The company confirmed its short- and long-term guidance, including its dividend policy, and is on track to deliver its full-year 2025 guidance.
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E.ON SE (ENAKF) maintained a solid balance sheet, with S&P and Moody’s confirming its ratings, and has additional balance sheet capacity to fund further investments in the European energy transition.
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E.ON SE (ENAKF) experienced some slight customer losses due to the rescheduling of customer acquisition campaigns, which are now more backloaded in the year.
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The typical negative operating cash flow in Q1 reflects the usual seasonal pattern of the company’s working capital.
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There is uncertainty regarding the regulatory framework and methodologies for the fifth regulatory period in Germany, with potential delays in the timeline.
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The company’s economic net debt stood at around EUR44 billion in Q1, reflecting the typical cash flow seasonality.
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E.ON SE (ENAKF) faces potential risks from regulatory changes, such as the proposed redefinition of grid fee systems and potential impacts on its Energy Infrastructure Solutions business.
Q: Given the strong Q1 performance, why not adopt a more positive tone on full-year guidance? Are there any concerns, or is it simply E.ON’s practice to wait until later in the year to adjust guidance? A: Nadia Jakobi, CFO, explained that while Q1 was strong, there have been no significant changes since the guidance was communicated two months ago. Weather conditions and customer acquisition campaigns are in line with expectations, so there is no immediate need to adjust the guidance range of EUR9.6 billion to EUR9.8 billion.
Q: Will the upcoming regulatory document include an explicit allowed return proposal for the next period, and what would be a fair ROE level? A: Nadia Jakobi stated that the consultation paper on the new regulatory framework is expected soon, with methodologies around cost of debt and equity returns to follow. E.ON is advocating for internationally competitive returns, aiming for an ROE of at least 8% post-tax.
Q: With a new German Energy Minister from E.ON, what priorities do you expect for the Energy Ministry, and could there be risks to your CapEx plans? A: Nadia Jakobi expressed confidence in the new minister’s commitment to climate goals and cost-efficient energy transition. There is a focus on reducing electricity prices and accelerating grid expansion, which aligns with E.ON’s objectives.
Q: How do you view the proposals to subsidize grid fees and reallocate who pays for them? Will this impact your revenues? A: Nadia Jakobi sees the subsidization of TSO grid fees as positive, fostering electrification and reducing electricity prices. The proposals are not expected to impact E.ON’s revenues but rather support the energy transition.
Q: Can you provide more details on the postponement of the customer acquisition campaign in Germany? Was it related to the competitive backdrop? A: Nadia Jakobi clarified that the postponement was a commercial decision, not due to higher churn or competitive pressures. The campaigns were rescheduled to align better with market conditions and pricing strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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