Corporate Governance Roadshow. November/December 2017

Transcription

1 Corporate Governance Roadshow November/December 2017

2 Agenda Back Up

3 Key Achievements in 2017 Nuclear de-risking completed: transfer of ~ 10bn to government fund finalizes KFK 1 solution Nuclear fuel tax (NFT) refund paves way to potential over-achievement of leverage target Payout ratio raised for the second time in 2017 (minimum of 65% 2 ) bn capital increase KFK solution finalized NFT decision Announcement of Fortum offer for Uniper shares H1 17 results % 9M17 results +7% E.ON Stoxx Utilities 19bn RAB Energy Networks Customer Solutions >22m Customers Across Europe 6 GW Renewable capacity delivered Renewables 1.7bn EBIT in bn EBIT in bn EBIT in Kommission zur Überprüfung des Kernenergieausstiegs (KFK) 2. Based on Adjusted Net Income, from FY 2018 (payable in 2019) onwards; Specification of Range with FY17 3 3

4 E.ON s Two-Tier Governance Structure Special features of an SE Supervisory Board German Co-Determination Act not applicable to SE, instead agreement on the involvement of employees More flexibility regarding size and composition of Supervisory Board, especially regarding internationality of employee representatives 4

5 E.ON Supervisory Board: Experienced, Diverse and Independent 18 Board Members 9 Shareholder Representatives Member of the E.ON Supervisory Board for 14 9 Employee Representatives 1-5 Years Years Years Age Place of birth Work experience gained 1 67% 33% 44% 56% <65 Germany Outside Germany 1 Other Company 2 Other Companies >2 Other Companies 5 1. Only Shareholder Representatives

6 E.ON Supervisory Board Shareholder Representatives Prof. Dr. Ulrich Lehner Deputy Chairman Born 1946, Germany Member since 2003 Extensive leadership and supervisory board experience Andreas Schmitz Born 1960, Germany Particular expertise in financial analysis and capital markets Erich Clementi Born 1958, Italy Expert in digital transformation and strategy Dr. Karen de Segundo Born 1946, Netherlands Member since 2008 In-depth knowledge of energy market and regulated industries experience Dr. Karl-Ludwig Kley Chairman of the Supervisory Board Born 1951, Germany Extensive leadership and supervisory board experience Carolina Dybeck Happe Born 1972, Sweden Profound experience in finance and digital transformation of products and services Baroness Denise Kingsmill, CBE Born 1947, New Zealand Member since 2011 Comprehensive legal and compliance expertise and expertise in regulated businesses Dr. Theo Siegert Born 1947, Germany Member since 2007 Recognised expert in accounting and financial governance, strategy and compliance Ewald Woste Born 1960, Germany Extensive expertise in the energy sector 6

7 E.ON Supervisory Board Employee Representatives Clive Broutta Born 1960, United Kingdom Member since 2014 Expert in HSE and Sustainability Tibor Gila Born 1967, Hungary Experience in Energy grids and HR Fred Schulz Born 1962, Germany Member since 2014 Experience in grid operations and HR management Silvia Šmátralová Born 1950, Slovakia Practical experience in the fields of accounting and procurement Andreas Scheidt Deputy Chairman of the Supervisory Board Born 1964, Germany Member since 2015 In-depth knowledge of the energy business Thies Hansen Born 1970, Germany Member since 2015 Profound expertise in technical aspects of the Energy Business, especially grids Eugen Gheorghe Luha Born 1957, Romania Member since 2012 Profound expertise in the gas business Elisabeth Wallbaum Born 1975, Germany Expertise in Energy generation and IT-based process control Albert Zettl Born 1966, Germany Background in the fields of grid management, grid distribution 7

8 Nomination Process of New Candidates Step 1 - Define requirement profile Step 2 Step 2 Step Step 3 3 Step 4 Step 4 Skills Industry knowledge Functional expertise Diversity International work experience Representation of Women Age diversity Experience Work experience in other companies Different functions Leadership roles Other Independence Max. age Max. # of terms Sufficient time Etc. Nomination committee consults on potential candidates based on requirement profile. Supervisory board presents appointment proposal at annual shareholders meeting where decision is up for vote. Skill matrix Diversity concept Self imposed composition targets Selection results are being presented to all supervisory board members. 8

9 Terms of Six Shareholder Representatives end in Dr. Karl-Ludwig Kley Prof. Dr. Ulrich Lehner Erich Clementi Carolina Dybeck Happe Baroness Denise Kingsmill Andreas Schmitz Dr. Karen de Segundo Dr. Theo Siegert Ewald Woste 9

10 Efficient Cooperation in Board Committees Presidial Committee Prepares the supervisory board s personnel decisions and presents proposal regarding management remuneration Advises the Board of Management on e.g. strategic developments Audit and Risk Committee Monitors the accounting process and internal control systems Examines effectiveness of internal control and risk management systems Members Dr. Karl-Ludwig Kley, Chairman Prof. Dr. Ulrich Lehner, Deputy Chairman Andreas Scheidt, Deputy Chairman Fred Schulz Members Dr. Theo Siegert, Chairman Fred Schulz Thies Hansen Andreas Schmitz Investment and Innovation Committee Approves among others investment, M&A and financing transactions Advises the Management on innovation and business opportunities Members Dr. Karen de Segundo, Chair Albert Zettl, Deputy Chairman Clive Broutta Carolina Dybeck Happe Eugen-Gheorghe Luha Ewald Woste Nomination Committee Recommends to the Supervisory Board candidates for election to the Supervisory Board by the Annual Shareholders Meeting Members Dr. Karl-Ludwig Kley, Chairman Prof. Dr. Ulrich Lehner, Deputy Chairman Dr. Karen de Segundo Shareholder Representatives Employee Representatives 10

11 High Level of Dedication Supervisory Board 6 Annual Meetings 1 Supervisory Board Presidial Presidial Committee + 7 Annual Meetings 1 Audit and Risk Committee + 4 Annual Meetings 1 Investment and Innovation Committee + 5 Annual Meetings 1 Nomination Committee + 2 Annual Meetings 1 Attendance of Supervisory Board and committee meetings Supervisory Board member Meetings Committee Audit and Risk Committee Finance and Investment Committee Nomination Committee Executive Board: 26 Meetings in Meetings refer to actual frequency of meetings in

12 Efficiency Review to Continuously Improve Supervisory Board Work The Supervisory Board conducts an efficiency review of its work on a two year basis, in line with the German Corporate Governance Codex. All Supervisory Members fill out a detailed questionnaire to provide feedback. The Chairman conducts bilateral meetings with each Supervisory Board Member and follows up on their remarks. The review is considered a very valuable tool as it enables open discussion, mitigates conflicts and builds the basis for continuous improvement. 12

13 Remuneration System Closely Aligns Management and Shareholders Interest New remuneration system approved by AGM 2016 (91% approval); in place since January 1st, Both variable compensation elements were adjusted and share ownership guidelines were introduced. The level of base salary and total compensation as well as the level of pension benefits remained constant. New Compensation Elements Base Salary Criteria: EPS, individual and team performance Payout: Cash Cap: 200% of target value Zero payout at underperformance Yearly contribution max. 21% of pensionable income + Bonus (STI) + Long-Term Incentive (LTI) + Pension Share Ownership Guidelines (SOG) Criteria: relative TSR vs. STOXX Europe 600 Utilities and absolute share price Payout: Cash Cap: 200% of target value Zero payout at underperformance Mandatory share ownership: CEO: 200% of base salary Other board members: 150% of base salary 13

14 Rationale The Short-Term Bonus (STI) The STI combines the group s financial target (EPS) with individual targets. STI Basic Functionality Target Achievement STI Target Value x Company Performance Individual Performance = Actual EPS vs. Budget 1 x Team targets & indiv. targets Multiplier from STI Actual Value (Cap at 200% of Target Value) Cash Payout EPS is the basis for dividend payout, thus closely aligns executive incentives and shareholder interest. EPS is one of E.ON s key performance indicators, reflects E.ON s business strategy appropriately and serves as an indicator of E.ON s profitability. The multiplier ensures the flexibility to adjust payouts according to individual performance The EPS target for each year is set by the Supervisory Board, taking into account the approved budget.

15 Rationale The Long-Term Incentive (LTI) The Performance Share Plan is based on the comparison of the relative total shareholder return (TSR) with an industry index. Performance Share Plan Basic Functionality Target Achievement over 4 Years LTI target value divided by fair market value per share 1 Initial number of granted share units x Relative TSR performance TSR of the E.ON share compared to the companies of the STOXX Europe 600 Utilities index (Cap at 150%) x Share price + dividends = Final payout in cash (Cap: 200% of target value) The Performance Share Plan is aligned with the capital market perspective by focusing on share price development as well as dividends paid and strengthens shareholder-oriented culture. Relative TSR is a well-established and accepted performance measure from an investor s point of view, focusing on absolute share price performance and comparison with peers. 1. The fair market value per share unit at grant date is determined by applying methods accepted in financial mathematics, taking into account the expected future payout, and hence, the volatility and risk associated with performance share plan. 15

16 Key Takeaways The supervisory board actively controls and guides E.ON s strategic transformation. E.ON is well positioned to succeed in the new energy world with effective governance structures. E.ON s supervisory board is qualified, experienced and highly committed. E.ON s remuneration system strongly aligns management board with shareholder interests. E.ON s corporate governance structure provides an efficient framework to support and control management in times of significant change. 16

17 Back up

18 Back up Supervisory Board Remuneration The Chairman of the Supervisory Board receives fixed compensation of 440,000. The Deputy Chairmen, 320,000. Other members of the Supervisory Board receive compensation of 140,000. The Chairman of the Audit and Risk Committee receives an additional 180,000. The members of the Audit and Risk Committee, an additional 110,000. Other committee chairmen receive an additional 140,000; committee members, an additional 70,

19 Back up E.ON s Authorized and Conditional capital max. 460m EUR (~21% of share capital) Authorized Capital Conditional Capital with subscription rights without subscription rights Contribution in cash and / or in kind Contribution in kind Contribution in cash Up to 460m EUR (460m shares; ~ 21% of share capital) Up to 20% of share capital Up to 10% of share capital Up to 175m EUR (175m shares, ~ 8% of share capital) max. 10% of share capital max. 20% of share capital Authorizations renewed in 2017, now valid until 2022, no change in comparison to E.ON considers these capital authorizations part of a company s standard finance tool box. 19

20 Back up CV s of Shareholder Representatives Dr. Karl-Ludwig Kley Chairman of the Supervisory Board Born 1951, Germany Prof. Dr. Ulrich Lehner Deputy Chairman of the Supervisory Board Born 1946, Germany Member since 2003 Erich Clementi Born 1958, Italy In 1982, he began his career with Bayer AG, where he initially worked in Corporate Finance and later became assistant to the Chairman of the Management Board. He was Chief Financial Officer of Bayer in Japan, Head of the Pharmaceutical Division Sales and Marketing Overseas, Head of the Pharmaceutical Division of Bayer s Italian subsidiary and later served as Head of Finance and Investor Relations of Bayer AG until From 1998 to 2006, Dr. Kley was a member of the Executive Board of Deutsche Lufthansa AG, where he served as Chief Financial Officer, before joining Merck KGaA as a member and Vice Chairman of the Executive Board in From April 2007 until April 2016 he was Chairman of the Executive Board and CEO of Merck KGaA. Professor Lehner began his career in 1975 as a tax consultant and auditor at KPMG AG in Düsseldorf, before he joined Henkel KGaA in After a short period of working in the Controlling function of Friedrich Krupp GmbH, he returned to Henkel in In 1991, he was appointed Managing Director of Henkel Asia Pacific, and in 1995, member of the Management Committee and Vice President Finance/Logistics of Henkel AG & Co. KGaA. From 2000 to 2008, he served as Chairman of the Management Board of Henkel AG & Co. KGaA. Mr. Clementi began his career with IBM in Italy in Initially, he held various positions in IBM s sales, marketing & engineering functions in Eastern Europe and Germany, before he was appointed Vice President Enterprise Systems Group for Europe, the Middle East and Africa in the United Kingdom. In 2003, he moved to the United States, where he first held the position of General Manager, was then appointed Vice President Strategy & General Manager Enterprise Initiatives and, prior to his current position, Senior Vice President & Group Executive Global Technology Services in the United States. Since 2015, Mr. Clementi has been Senior Vice President IBM Global Markets and Chairman Europe. Other supervisory board seats * BMW AG 1) * Deutsche Lufthansa AG (Chairman) 1) + Verizon Communications Inc. 1) Other supervisory board seats * Deutsche Telekom AG (Chairman) 1) * ThyssenKrupp AG (Chairman) 1) * Porsche Automobil Holding SE 1) + Henkel AG & Co. KGaA 1) Other supervisory board seats None The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations, 1) Listed Company 20

21 Back up CV s of Shareholder Representatives Carolina Dybeck Happe Born 1972, Sweden Baroness Denise Kingsmill, CBE Born 1947, New Zealand Member since 2011 Andreas Schmitz Born 1960, Germany At the beginning of her career, Ms. Dybeck Happe held various positions with EF Education First Ltd. in the United States, Switzerland and Russia. From 2000 to 2002, she was Chief Financial Officer of Establish AB in Sweden. In 2002, she joined ASSA ABLOY in Germany as Chief Financial Officer for the German-speaking regions; in 2007, she went to ASSA ABLOY in the United Kingdom, where she served as Chief Financial Officer for Europe, the Middle East and Africa. In 2011 she went to Trelleborg AB in Sweden, where she served as Chief Financial Officer. Since 2012 she is in her current position as Chief Financial Officer of ASSA ABLOY AB, a publicly listed company in Sweden. At the beginning of her career, Baroness Kingsmill worked as a marketing manager in the textile and fashion industry in London and Paris. In 1980, she passed the bar exam and began her work as a solicitor in London. From 1997 to 2003, she was Deputy Chairman of the UK Competition Commission. During her time at the Commission, she chaired many regulatory inquiries into various sectors. She undertook two inquiries for the UK government into pay and recruitment of women as well as human capital management. In the year 2000, Baroness Kingsmill was awarded a CBE (Commander of the Order of the British Empire), and in 2006, she was appointed as a member of the House of Lords, where she is a member of the Economic Affairs Committee. Mr. Schmitz began his career with HSBC Trinkaus & Burkhardt AG in Until 2000, he held various positions in the corporate clients business and in investment banking. From 2000 to 2002, he was a member of the extended management board, in charge of Investment Banking and, since 2001, additionally in charge of Debt Capital Markets. From 2002 to 2004, he was a personally liable partner, responsible for Corporate & Investment Banking and Debt Capital Markets, before he was appointed Spokesman of the Personally Liable Partners. From 2006 to 2015, he was Chairman of the Management Board, and since June 2015, he has been Chairman of the Supervisory Board of HSBC Trinkaus & Burkhardt AG. Other supervisory board seats ASSA ABLOY 1) 9 Internal memberships: + ASSA ABLOY Asia Holding AB (Chair), + ASSA ABLOY East Europe AB (Chair), + ASSA ABLOY Entrance Systems AB (Chair), + ASSA ABLOY Financial Services AB (Chair), + ASSA ABLOY Finans AB (Chair), + ASSA ABLOY IP AB (Chair), + ASSA ABLOY Kredit AB (Chair), + ASSA ABLOY Mobile Services AB (Chair) Other supervisory board seats + Inditex S.A. 1) + International Consolidated Airlines Group S.A. 1) + Monzo Bank Ltd. (Chairman) + Telecom Italia S.p.A. 1) Other supervisory board seats * HSBC Trinkaus & Burkhardt AG (Chairman) 1) * Scheidt & Bachmann GmbH (Chairman) * KfW The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations, 1) Listed Company 21

22 Back up CV s of Shareholder Representatives Dr. Karen de Segundo Dr. Theo Siegert Ewald Woste Born 1946, Netherlands Member since 2008 Born 1947, Germany Member since 2007 Born 1960, Germany Dr. de Segundo began her career in 1971 when she joined the Royal Dutch / Shell Group, where she initially pursued an international commercial career in the gas and power business as well as in sales and marketing of oil products. She held various positions in five countries before she was appointed as a member of the Shell Brazil Management Board in charge of oil products in In 1996, Dr. de Segundo became External Affairs Director for the Shell Group. In 1998, she was appointed Chief Executive Officer of Shell Gas & Power and Chairman of Shell Coal; and from the year 2000 until 2005, when she left Shell, she served as Chief Executive Officer at Shell Renewables and President of Shell Hydrogen. Other supervisory board seats None Dr. Siegert joined Franz Haniel & Cie. GmbH in 1975 and was appointed Director of Commercial Operations at Haniel Umweltschutz GmbH in In 1986, he became a member of the management of Franz Haniel & Cie. GmbH, before being appointed an ordinary member of the Management Board in In 2005, he served as Chairman of the Management Board of Franz Haniel & Cie. GmbH and then was appointed as Managing Partner of de Haen Carstanjen & Söhne in Düsseldorf. He served as an honorary professor at the University of Munich over a period of twenty years Other supervisory board seats * Henkel AG & Co. KGaA 1) * Merck KGaA 1) + DKSH Holding Ltd. + E. Merck KG The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations, 1) Listed Company Mr. Woste began his professional career as assistant to the management of heroal, before joining Benteler AG as a controller in He has worked in the energy industry since 1992, when he joined the municipal utility of Paderborn. From 1998 to 2003, he was Managing Director of Städtische Werke Nürnberg GmbH and member of the boards of management of Verkehrsaktiengesellschaft Nürnberg and N-ERGIE Aktiengesellschaft. In 2004, he was appointed Chairman of the Board of Management of Mainova AG, and from 2007 to 2014, he served as Chairman of the Board of Management of Thüga Aktiengesellschaft. From 2010 to 2014, he was President of BDEW Bundesverband der Energie- und Wasserwirtschaft e.v. (German Association of Energy and Water Industries). Since 2015, he has provided consultancy services to various companies, including EQT and the Australian financial service provider Macquarie. Other supervisory board seats * Thüringer Energie AG (Chairman) * GASAG AG * GreenCom Networks AG + TEN Thüringer Energienetze GmbH & Co. KG + Energie Steiermark AG + Deutsche Energie-Agentur GmbH (dena) 22

23 Your E.ON Contacts Alexander Karnick T Head of Investor Relations Martina Burger T Manager Investor Relations martina.burger@eon.com Melanie Osterried T Manager Corporate Finance melanie.osterried@eon.com T investorrelations@eon.com 23

24 Financial calendar & important links Financial calendar March 14, 2018 Annual Report 2017 May 8, 2018 Interim Report I: January March 2018 May 9, Annual Shareholders Meeting August 8, 2018 Interim Report II: January June 2018 November 14, 2018 Interim Report III: January September 2018 Important links Presentations Annual Reports Interim Reports Shareholders Meeting Bonds / Creditor Relations

25 Disclaimer This presentation contains information relating to E.ON Group ("E.ON") that must not be relied upon for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for any other purpose. By accessing this document you agree to abide by the limitations set out in this document as well as any limitations set out on the webpage of E.ON SE on which this presentation has been made available. This document is being presented solely for informational purposes. It should not be treated as giving investment advice, nor is it intended to provide the basis for any evaluation or any securities and should not be considered as a recommendation that any person should purchase, hold or dispose of any shares or other securities. This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON 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 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. Neither E.ON nor any respective agents of E.ON undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any information or to correct any inaccuracies in any such information. Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals or interim totals or differences or if numbers are put in relation) in this presentation may not correspond in all cases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts. 25