Earnings call transcript: E.ON sees strong growth in Q1 2025

E.ON SE reported robust financial performance in Q1 2025, with a significant increase in adjusted net income and a strong operational outlook. The company’s stock showed a slight decline of 0.42% in recent trading, reflecting broader market volatility rather than specific company performance. With a market capitalization of €43.6 billion and an attractive P/E ratio of 8.58, InvestingPro analysis suggests the stock is slightly overvalued at current levels. E.ON remains optimistic, confirming its full-year guidance and continuing to focus on infrastructure investments and climate goals.

Key Takeaways

• Adjusted net income surged by 1,822% in Q1 2025.
• Capital expenditure increased by 13%, supporting infrastructure growth.
• Economic net debt stands at approximately 44 billion euros.
• E.ON confirmed its full-year 2025 and 2028 outlook.
• Stock price decreased by 0.42% amid market volatility.

Company Performance

E.ON demonstrated strong performance in the first quarter of 2025, driven by strategic investments and favorable weather conditions. The company continues to leverage its position as the largest distribution company, focusing on digitalization and grid expansion to meet European climate goals. With a beta of 0.75 and an impressive YTD return of 30.53%, E.ON’s resilience against macroeconomic challenges underscores its robust business model. InvestingPro data reveals a strong Financial Health Score of 2.83 (GOOD), supported by consistent dividend growth of 7.84% and a current yield of 3.73%.

Financial Highlights

• Adjusted EBITDA: 3.2 billion euros
• Adjusted net income: 1.3 billion euros, a 1,822% increase
• Economic net debt: Approximately 44 billion euros
• Capital expenditure: Increased by 13%

Outlook & Guidance

E.ON confirmed its full-year 2025 and 2028 outlook, targeting a return on equity of at least 8% post-tax. The company anticipates regulatory clarity on returns by year-end and expects grid fee subsidies to support electrification efforts. Continued investment in grid infrastructure remains a priority. Analyst consensus maintains a Buy rating with a score of 1.71, according to InvestingPro, which offers comprehensive analysis including 12+ additional ProTips and detailed valuation metrics in its Pro Research Report.

Executive Commentary

Nadia Jacobi, CFO, emphasized the company’s resilience, stating, "Our business model proves to be very resilient and robust against these macroeconomic developments." She also highlighted E.ON’s commitment to shareholder returns through organic growth and increasing dividends.

Risks and Challenges

• Macroeconomic uncertainty and market volatility could impact financial performance.
• Regulatory changes in grid fees and tariffs may affect future earnings.
• Competitive pressures in the energy sector could challenge market share.
• Climate change and environmental regulations require ongoing adaptation.

E.ON’s strategic focus on infrastructure and climate goals positions it well for future growth, despite the challenges of a volatile market environment.

Full transcript - E.ON SE (EOAN) Q1 2025:

Iris, Host/Moderator, E.ON: Good morning, everyone. Dear analysts and investors, a warm welcome from my side to our first quarter twenty twenty five earnings call. I am here with our CFO, Nadia Jacobi, who will present our results. As always, we will leave enough room for your questions at the end. With that, over to you, Nadia.

Nadia Jacobi, CFO, E.ON: Thank you, Iris, and a warm welcome from my side as well. Since our full year results, much has happened from a global macroeconomic perspective. With Liberation Day, a spill off tariff announcement resulted in recessionary fears and high volatility in equity markets globally. But with the suspension of tariffs between The U. S.

And several countries, a relatively quick recovery has started during the last days. In this period of uncertainty, we have seen that our business model proves to be very resilient and robust against these macroeconomic developments. In Germany, we had federal elections and the new coalition government was formed swiftly. There are encouraging signs of positive momentum for the German economy as well as the energy transition. On the regulatory side, we expect the framework and methodologies for the fifth regulatory period in Germany for power to be developed by the end of twenty twenty five.

However, history has shown that time lines can sometimes slip. We expect the first regulatory consultation documents to be published in the coming weeks and months. We will then be able to provide you with our assessment. Let us now leave any further discussions on macroeconomic or political topics for the Q and A session later and instead turn to our business. I have four messages for today.

First, E. ON delivered a strong operational and financial performance in Q1, which puts us firmly on track to deliver our full year guidance. Our adjusted EBITDA reached €3,200,000,000 and our adjusted net income came in at around €1,300,000,000 an increase of 1822%, respectively. Second, our increased earnings were mainly driven by investment backed growth, strong operational execution, timing effects from network loss recoveries, especially in Southeastern Europe and higher volumes from normalized weather conditions. We have accelerated our CapEx spending by around 13% year over year with a predominant share going to our Energy Networks business.

Our planned CapEx ramp up and our EBITDA contribution are on track in terms of expected quarterly fill rates across all our business segments. Third, our economic net debt outturn of around €44,000,000,000 in the first quarter shows the typical Q1 cash flow seasonality based on the working capital pattern of our business model. And finally, we fully confirm our short- and long term guidance, including our dividend policy. So, let us move on to our Q1 year over year adjusted EBITDA bridge. All segments contributed to the earnings growth.

Starting with Energy Networks, we saw an adjusted EBITDA increase driven by the accelerated investments in our regulated asset base across all business regions. In Southeastern Europe, a large contribution to our earnings growth came from the expected network loss recoveries and higher volumes. Moving on to our Energy Infrastructure Solutions business. The growth in adjusted EBITDA was driven by higher weather related volumes and an improved asset availability. The commissioning of new projects added to the growth.

In our Energy Retail business, we also delivered a strong first quarter. Increased earnings came from year over year higher volumes due to weather compared to the record warm temperatures in Q1 twenty twenty four. In addition, our U. K. B2B business continued its strong performance in Q1, which we expect to normalize over the course of the year.

Moving to adjusted net income, which came in at around €1,300,000,000 All P and L elements below adjusted EBITDA developed in line with our expectations. As a result, we are well on track for our full year 2025 guidance, supporting the promised high single digit underlying adjusted net income growth. As announced during our full year reporting, we are now providing pro form a figures for adjusted EBITDA and adjusted net income, which will exclude value neutral timing effects in our Energy Networks segment. You may find the figures as part of the appendix to this presentation. For Q1 twenty twenty five, our adjusted EBITDA contains in total a positive mid double digit million euro amount of value neutral timing effects, mainly relating to network loss and volume recoveries in our Southeastern Europe segment.

With our full year 2025 reporting in February year, we will then also adjust our outlook for 2026 and the years thereafter. Looking at the development of our economic net debt, I would like to highlight three key points. First, our promised CapEx ramp up is progressing well. We continue to be fully focused on ensuring a frictionless execution by closely managing our operations and supply chain. And so far, we are well on track.

Second, the typical negative operating cash flow in Q1 reflects the usual seasonal pattern of our working capital. Third, our balance sheet remains solid and S and P and Moody’s have recently confirmed our ratings. As communicated before, we have additional balance sheet capacity in line with our rating commitment to a strong BBB, Baa, enabling us to fund further investments to support a successful European energy transition. However, as we have emphasized before, attractive regulatory conditions remain a prerequisite for that. Let me now conclude today’s presentation with my key takeaways.

First, the strong Q1 outturn firmly supports our expecting earnings delivery for 2025. Second, our investment ramp up is progressing well, underpinning our midterm targets. Third, our balance sheet remains solid. We will continue to focus on delivering an attractive total shareholder return based on value creative organic growth and an annually growing dividend per share. Finally, we fully confirm our full year 2025 guidance and 2028 outlook, including our dividend policy.

And with that, back to you, Erez.

Iris, Host/Moderator, E.ON: Thank you very much, Natya. And with that, we will start our Q and A session. Let me briefly remind you all, please stick to two questions each so that most of you can have a go. And we will start today with Alberto. Hi, Alberto.

Let us please have your first question.

Alberto, Analyst, Unknown: Thank you for taking the question. Good morning, Iris, and good morning, Nadia. I’ll take the two. The first one is, thank you for pointing out the network losses and volume recovery, but that number, I think, in the appendix is $45,000,000 and only $17,000,000 of net income. So my question here is, you have delivered 45% of the midpoint of your guidance.

I know it’s relatively early in the year, but we are kind of close to six months. And why not having a more positive tone on full year guidance? Is there anything that worries you? Or it’s just simply not practiced by E. ON to amend the guidance of Q1, let’s wait and see that’s discussed in August?

That’s the first question. The second question is, Nadia, you said something very interesting, which is the first regulatory document could be published in the next weeks and months. I was going to ask you, do you believe this document will include an explicit allowed return proposal for the next period? And what would be your mark to market calculation? Perhaps it’s easier to talk ROE.

I know the regulator maybe wants to go to a loud WACC, but to make it comparable with the current period. If you can tell us what would be, you think, a fair ROE level or what assumptions you would be using you would be suggesting the regulator could use, that would be extremely helpful. Thank you so much.

Nadia Jacobi, CFO, E.ON: Thank you, Alberto. Yes. Thanks, Alberto. Thanks for the question. So you are absolutely right.

We had a strong Q1. But then you need to be aware when you look at when I look now at my Q1 and what has happened over the first couple of months in the year, there is not that much that has actually changed. And we have communicated our guidance a bit more than two months ago. So that’s not that radical changes that you can expect in these two months. So when you look at what happened, which we didn’t know before, so whether our turn is very broadly in line, Yes, there might be a bit of an overall colder Q1 than normal.

But when you then look at what happened now in April and May, that was also indicated by some of our competitors, There was an actually warmer. So I would say, from a volume perspective, that is broadly in line. And then as you as we’ve been highlighting, strong Q1, but we also experienced some slight customer losses because of rescheduling of our customer acquisition campaigns, which we have now more to the back of the year. So that’s why we are comfortably positioned in our guidance range of 9.6% to 9.8%, but no major changes that would now give the need to change that. So then coming to your second question.

Second question, yes, we are expecting some of the consultation. We had the pre consultation that was published in January. Now we are but that was not really the official kick start of the consultation process. We now expect the consultation paper on the overall framework, new regulatory framework, to be published in the next week. And then we assume that some of the methodologies around the cost of debt and equity returns will then come in the next couple of months.

And we have been always highlighting that what we are asking for is internationally competitive returns. We need to achieve our value creation spread of 150 to 200 basis points. We clearly also phrase our ambition to have an ROE of at least 8% post tax is something that we would raise as demand, which is something which is internationally competitive. And when you look at what we when you look at the German CapEx ramp up that we’re requiring here and the amount of CapEx that we want to spend, it is clearly no way why German regulatory return should be any less than other European regulatory regimes would offer.

Iris, Host/Moderator, E.ON: Thank you, Nadia.

Alberto, Analyst, Unknown: Very clear. Thank you.

Iris, Host/Moderator, E.ON: And the second the next question comes from Wanda from UBS. Hi, Wanda.

Wanda, Analyst, UBS: Hi, Aris. Hi, Nadia. I have two questions from me. The first one is on the German Energy Minister. There is a new person coming from E.

ON. Where do you expect the Energy Minister to put priority on? For example, she talked about the reality check for the renewables. Is it do you expect any slowing the renewables connections? Would it put any risk to your CapEx?

So I know it’s still early days, but any high level comments would be appreciated. And the second question is on retail. Nadia, you mentioned April was pretty mild. Centrica flagged its British Gas residential was negatively impacted by warmer weather in April. Should we see it as a read across to E.

ON? Is there any risk to profitability of the business of retail? Thanks a lot.

Nadia Jacobi, CFO, E.ON: Yes. Thanks, Wanda, for your questions. So first of all, we are, of course, exceptionally sad to see Katharina leaving on the one hand side because she’s been a great manager to our business. But of course, we are also exceptionally happy for her and also for our country that we have such a strong person like her now in this new role. I think what the new government has highlighted is exactly in line with our expectations.

So there is a very clear commitment to both the German and the European climate goals. But then there’s also a clear commitment to do that in a cost efficient way so that we have a minimization of system cost. We she has already highlighted that the reduction of price of electricity is important, I. E, the reduction of the electricity tax was to the European minimum was already highlighted in order to force the electrification as the most attractive form of decarbonization. And there was a very is overall a very clear commitment to the speed up of grid expansion.

So to that question, I’ve there was a clear commitment to the targets. But of course, as we’ve been also highlighting, it only makes sense to build up renewables in a way that are actually helping and supporting the decarbonization. And sometimes, we have been seeing also overbuild. So there is no contradiction in that. To your second question.

I didn’t want to highlight now any specific risk because, as you know, we are now have been implementing approach to sort of have also volume hedges in so have hedges in place to have a good portfolio optimization around our Energy Retail business. So that’s why we, by no means, wanted to indicate now any specific additional risk. I just wanted to highlight, yes, there might be a bit of a positive impact in Q1. When you look at the weather conditions, but that is sort of partially then compensated by what we have been seeing in April. So that we are overall in line when it comes to our weather condition assumptions and the earnings impact of that.

Iris, Host/Moderator, E.ON: Thank you. So the next question comes from Harry Wyburt. Hi, Harry.

Harry Wyburt, Analyst, Unknown: Hi, everyone. Hi, Nadi. So a couple for me, please. First one is on policy and specifically on grid fees. So there’s been various proposals coming through about subsidizing grid fees and then reallocating who pays for them.

So proposals for instance to generators to pay grid fees. So I wondered if you could help us by just in brief terms setting out what’s been proposed. Could you confirm the basic assumption that this wouldn’t impact your overall revenues? And do you think this is a good thing or a bad thing for you? Does it make it potentially easier for you to invest more and not necessarily have the impact of that investment being fully felt by energy bill pairs in Germany?

And then the second one also policy related that there was a separate proposal to cut some grid fee subsidies to certain power plants in Germany. And I believe that CHPs in particular potentially were going to be impacted by that. Is that something we should be caring about from the perspective of your CHPs in your ICE division? Thank you.

Iris, Host/Moderator, E.ON: Thank you, Harry.

Nadia Jacobi, CFO, E.ON: Yes. So coming to your first questions, I think there is exactly what our how we’ve been highlighting that before. So I assume that is now regarding the subsidization of the TSO grid fees. And for us, that’s clearly a positive. It’s a means of on top of the electricity tax topic that I’ve highlighted earlier, that is another means of actually reducing electricity prices.

And that’s why and the reason why that’s done over the TSO network fees is because it’s sort of the easiest operationalization of that topic because then they have a direct feed to of this lower TSO cost with the benefit to the customers. So we see that as a clear positive because sort of it fosters more electrification. It fosters this sort of virtuous circle of more electrification means then more shoulders can bear the increased overall cost for DSOs and DSOs that are factored into the customer bills and with more electrification that is then actually being leveled out. So exactly as we have indicated before, no change in that, and we see that as a very, very clear positive. Then there was an additional thing, and I don’t know whether you have referred to that.

There was a federal so our BNETsR published a first discussion paper on the redefinition of the grid fee system, which is sort of highlighting that also some of the grid customers, like, for example, the renewable operators should take a share in that. It’s now very early stage, but we are, in overall terms, we are always supporting all initiatives that bring grid fees to those who cause the increase in grid investments, and that’s why we are sort of directionally positive on that. Okay. So then we have got the other topic on avoided grid fees. That is sort of equally very, very early stages.

There might be a small impact in our Energy Infrastructure Solutions business, but that has been just first highlighted by the BNET R and is now in discussion. That would be far too early to say what is exactly the outcome of that and what would be the impact from us.

Harry Wyburt, Analyst, Unknown: Okay. You, Nadia. And just to clarify, the grid fee, do you know how much the subsidy is going to be? And is it going to be funded through the Climate and Transformation Fund?

Nadia Jacobi, CFO, E.ON: We only know what has been we don’t know more than has been the political intentions. We have the political intentions to have the overall decrease by zero five dollars per kilowatt hour. How exactly that’s going to work and how much exactly of the Climate Transformation Fund is going to be used up for this is going to be part of now the political discussions in the next couple of months. It is clear that the first priority is going to be that the government needs to form a budget for 2025. And then I guess we will know more in the next couple of months how exactly that’s going to pan out.

Harry Wyburt, Analyst, Unknown: Okay, got it. Thank you very much.

Iris, Host/Moderator, E.ON: Thank you, Harry. So the next question comes from Deepa. Hi, Deepa.

Deepa, Analyst, Unknown: Hi. Thank you for taking my question. So my two questions, it’s a follow-up on something you said earlier, Nadia. So could you you mentioned the 8% ROE, and then you mentioned that an update would come in the next week. So is it weeks or week?

And then is the 8% post tax including outperformance? Or is it just the base allowed? So that was the first question of clarification. Second one, where do you forecast your year end net debt to be around roughly if the interest rates hold at what are the levels they are?

Nadia Jacobi, CFO, E.ON: Yes. So first of all, what we said is that that was the first start of the official consultation, which will only be related when for for sort of overall framework conditions, supposed to be started in the next weeks, I. E, not week but weeks, and there will be only also only a part, yes? So that’s why we said in the next weeks and months. So we think that sort of a first part when it comes to the overall framework is going to be published sooner, I.

E, in the next weeks, whereas things around the methodology for WACC system, debt and equity returns, that’s going to be more towards sort of the next month. And sort of the expectation is still that we get more clarity around the ranges of the capital returns by year end as this is the time schedule of the regulator. And as we also highlighted in the speech, of course, these time lines can slip, but it is exactly how Leo and I highlighted that in our full year call. And when it comes to sort of what are the sort of requests, like also all the other DSOs and DSOs are highlighting the requests. That’s what was my answer towards Alberto’s question, that the request towards the capital return on ROE post tax would be the at least 8% that I highlighted earlier.

But that is nothing that is that is sort of when you look at there are sort of several That’s what we assess to be a fair competitive return in comparison to the in comparison to other European infrastructure investments, but that would be related to the capital return.

Deepa, Analyst, Unknown: Okay. So not the outperformance. Okay.

Iris, Host/Moderator, E.ON: And then I think second question was on E and D.

Nadia Jacobi, CFO, E.ON: So E and D, yes. On the E and D side, our cash flow seasonality brings us exactly to the point what we had expected. And we would assume that the economic net debt, everything else being equal, would be above the €44,000,000,000 but approximately in the same ballpark that we have been seeing now.

Deepa, Analyst, Unknown: Thank you.

Iris, Host/Moderator, E.ON: Thank you, Deepa. So the next question comes from James Brand from Deutsche Bank. Hi, James.

James Brand, Analyst, Deutsche Bank: Hi, good morning. Good morning. A couple of questions from me. The first is on the grid charging review. And I read through the paper that came out on Monday.

But I just wanted to ask, is is this a % focused on the kind of end user charging? Or is there any element of this review or the wider review of the government that will touch upon direct elements of the regulation as it impacts on your returns and cost allowances? It looked from that paper that came out on Monday that it was 100% focused on end user cost allocation, or at least that’s how it read to me. But just hoping I could get clarification on that. That’s the first question.

And then the second question, you mentioned the postponement of the customer acquisition campaign in Germany. I was wondering whether you could just give a few more details around that. Why was that delayed? Was it related to the competitive backdrop? And if so, what are you seeing at the moment as the competitive backdrop for Retail?

Thank you very much.

Nadia Jacobi, CFO, E.ON: Maybe let me start with the last bit. So I think from a sort of competitiveness in the business environment, that is absolutely in line with our expectations. And as we highlighted in some of the earlier calls, for us, it is positive that we have got actually attracting customers in a competitive market. This is now more we are sort of making commercial decisions. We had some price increases at the beginning of the year, and we are making commercial decision when our customer acquisition campaigns are best placed.

We didn’t the churn, we didn’t have any higher churn than we had expected. We just shifted the customer acquisition campaigns where we deemed it more commercially suitable. So that is but that is normal course of business. That is nothing that is against expectations, but how we do business. So one thing to highlight on the needless to say that we are also sort of reviewing this publication of Monday, but that has no return effect.

It is not impacting it is just about the structural grid fees, I. E, how what is sort of the fixed elements, what is the variable elements, etcetera. But the overall grid fees, the return elements and also outperformance elements are not impacted by that.

Speaker 7: Thank you.

Iris, Host/Moderator, E.ON: Thank you. The next question comes from Rob from Morgan Stanley. Hi, Rob.

Rob, Analyst, Morgan Stanley: Hi, good morning. If I can ask just one question on Retail and not about weather. There’s quite significant margin expansion in the first quarter compared to 1Q twenty twenty four, especially in Germany, UK and Netherlands. I was just wondering if you could provide some kind of explanation and, of course, whether that’s some kind of temporary timing effect or whether that’s a new normal, whether it should normalize throughout the rest of the year, given, of course, you’re quite ahead of the run rate from the 1Q contribution? Thanks very much.

Nadia Jacobi, CFO, E.ON: Yes. Thanks, Rob, for the question. So a couple of elements to that. So one is the thing that we highlighted is that we have seen now normalization of weather conditions, which we had already factored into our guidance. So that’s sort of a mid double digit million euro amount when it comes to that kind of normalization.

Then second point, some of the price increases that we did last year were only effective later in the year or later within Q1. So that’s why we see sort of an over proportionate increase in the results. And then the third element that I would highlight is exactly what we have been discussing now just before, that we’ve been pushing some of our customer acquisition campaigns more to the later part of the year than they were in last year. And that’s why we will see some cost increases with regard to that and coming in later. So that’s why, particularly with what we have been highlighting earlier on sort of the overall weather effect up until sort of now April being more neutral in 2025.

We think that sort of the guidance of 1,600,000.0 to €1,800,000 is fine. Or maybe there’s one element that is as well in there. We’ve been still seeing a very strong U. K. B2B performance.

And we have been highlighting before that some of the very positive margin contracts were sort of rolling off over the course of that have been sort of contracted last in the last year or years, rolling off now over the course of 2025. There’s been still quite some positive elements in there in Q1, but some of that is going to roll off now over the course of the remaining year.

Rob, Analyst, Morgan Stanley: All right. Thank you.

Iris, Host/Moderator, E.ON: Thank you. And then we have I don’t know if it’s the last question already, but we have Peter Bistiger from Bank of America. Hi, Peter.

Peter Bistiger, Analyst, Bank of America: Yes. Hi. Two, if I may. So one, just following up on that point on B2B. Just be sort of interested to understand why kind of the pricing or the contracts were particularly good last year and what’s changed to kind of make it worse this year?

So really just sort of trying to understand if genuinely you’re not going to sort of get that benefit for the remainder of this year. And then secondly, I was

Speaker 7: just wondering if there’s been

Peter Bistiger, Analyst, Bank of America: any updates on this German infrastructure fund. Have you been sort of doing any behind the scenes lobbying to try and get or try and secure a share of this. Do you have any better sense now than you did a couple of months ago as to what aspects of your business could benefit from it? So just interested in your views there, please.

Nadia Jacobi, CFO, E.ON: Yes. So thanks, Peter, for the question. So on the B2B side, we have been seeing a big expansion of the margins in compared to the past. And part of that was also attributable that some of the sort of higher pricing and higher risk premia that we are that we were able to secure sort of in the energy crisis or thereafter when we still were on a higher commodity level sort of are now rolling off. But that is not leading us into a position where we don’t think we are still the new normal of the B2B.

U. K. Is still a very attractive business for us. So it is not now that we’re saying, okay, that is now running down to a too low level, but it’s still a very attractive business, but part of the risk premia are rolling off now. Then on the €500,000,000 infrastructure fund, there’s equally not that much more than I can say about that than was actually said in our full year reporting.

We have got €100,000,000 1 hundred billion euros earmarked for the Climate and Transformation Fund. We have got €100,000,000,000 earmarked for the 16 states. And there, it’s implicitly earmarked also for the heating transition. And I think the same applies and the same applies what we have been saying earlier. First, I think the budget is going to be the most important thing, and there will not be that from our assumption, there will be not that much new on this €500,000,000 infrastructure fund before the summer break.

I can just reiterate what we said earlier. It’s, of course, very clearly positive that we have the subsidization of from the Climate and Transformation Fund for the TSO grid fees because it sort of takes away the push on affordability. It helps to get acceptance for the transformation. It is also helping for further electrification, both that sort of the industrial demand is coming back and even more sort of we see now further electrification, the growth and electricity demand kicking in. We are, of course, heating transition has been always on our agenda.

In our ICE business, we are preparing for the heating transition. We have we have got this decentral setup in our German ICE business, where we are very well positioned to sort of to go into to go into that. But there is not that much news that I can tell you now compared to what we highlighted two months ago.

Alberto, Analyst, Unknown: Thanks very much.

Iris, Host/Moderator, E.ON: Okay. Then we have a question from Piotr from Citi.

Speaker 7: Hi, good morning, everybody. Thank you for the presentation. So I will have two questions. So the first one, I wanted to go back to this ongoing regulatory review in Germany and ask you about the level of outperformance you expect. Basically, some of the people I talked to, they are a little bit worried that the benchmarking that was done and allowed E.

ON to outperform the smaller DSOs in the country will be somewhat changed so that you will not be compared versus a smaller inefficient, a little bit slower and undercapitalized entities, but there will be a benchmark for yourself as a or the more efficient one, so you will be more compared with the faster running peers. So that’s the first question, how you think about this process and are we going to see the supernormal efficiency kickers that you typically receive and or maybe that will be lowered? And the second question, I have more on the numbers themselves. I’ve noticed then on the Energy Retail Other, which mainly comprises of the Eastern Europe, you reported significantly lower year on year contribution. So I wanted to ask what happened there as I look at some of the Eastern peers, they generally report very good margins on supply.

Thank you very much.

Iris, Host/Moderator, E.ON: Thank you, Piotr.

Nadia Jacobi, CFO, E.ON: Yes. So when it comes to the benchmarking process that it is exactly part of this NEST process that is currently ongoing and where we sort of currently don’t have as a consultation yet. That hasn’t been published yet. And we just need to be bare with us to make comments. We cannot make comments before that has been actually published.

But of course, we will do once as I highlighted in my speech, we will let you know our assessment. But answering it a bit more generally, We are the largest distribution company, and we are benefiting from large digitalization projects. We are the ones who sort of we can really do an industrialization of the supply chain. So in overall terms, I would always see us with our scale and with sort of scale mattering more rather than less. And with our focus on performance management, I would always see ourselves well positioned in a benchmarking process.

But how exactly that’s going to pan out as part of the Nest process, even though we will need to wait a bit more until the consolidation is coming out. So then we had on the other question, we had some, yes, I would say some you’re absolutely right. We have got a high profitability in that segment. We had, Poland, a price cap that started in H1, H2 last year, which is now sort of now kicking in negatively if you have the sort of the year over year comparison. And then we have got some fluctuations in our cost phasing in procurement in the portfolio management function, but there is no underlying negative read across about the profitability of that segment or subsegment from the result.

Speaker 7: Okay.

Iris, Host/Moderator, E.ON: then I think we already come to the last question, and this goes to you again, Rob. I think you only asked one. So that’s then your second one, and that’s then the last question for the call.

Rob, Analyst, Morgan Stanley: Actually, all covered, so I can give you some time back there

Iris, Host/Moderator, E.ON: very

So thank you very much. Then we close the Q and A session. Thank you all very much. If there’s anything you would like to follow-up with from the IR team side, we’re happy to talk to you.

Thank you very much for participating, and have a good day.

Nadia Jacobi, CFO, E.ON: Thank you. Bye bye. Thank you. Bye bye.

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