E.ON AG (ENAKF) 2019年年度報告「OTC」.pdf

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1、Annual Report2019E.ON Group Financial Highlights in millions20192018+/-%Sales1 41,48430,084+38Adjusted EBITDA1,25,5584,840+15 Regulated business3(%)6557+84 Quasi-regulated and long-term contracted business3(%)1321-84 Merchant business3(%)2222Adjusted EBIT1,23,2352,989+8 Regulated business3(%)7058+12

2、4 Quasi-regulated and long-term contracted business3(%)1120-94 Merchant business3(%)1922-34Net income/loss1,8083,524-49Net income/loss attributable to shareholders of E.ON SE1,5663,223-51Adjusted net income1,21,5361,505+2Investments15,4923,523+56Cash provided by operating activities12,9652,853+3Cash

3、 provided by operating activities before interest and taxes14,4074,087+8Economic net debt(at year-end)139,43016,580+138Equity13,0858,518+54Total assets98,56654,324+81ROCE(%)18.410.4-2.04Employees(at year-end)178,94843,302+82 Percentage of female employees3332+1.04 Average age4242Earnings per share5,

4、6()0.681.49-54Adjusted net income per share1,5,6()0.670.69-3Dividend per share7()0.460.43+7Dividend payout1,199932+291Includes until September 18,2019,the discontinued operations in the Renewables segment(see Note 4 to the Consolidated Financial Statements).2Adjusted for non-operating effects.3E.ON

5、and innogys definitions of regulated,quasi-regulated businesses,and so forth were harmonized and the prior-year figures adjusted accordingly.4Change in percentage points.5Attributable to shareholders of E.ON SE.6Based on shares outstanding(weighted average).7For the respective financial year;the 201

6、9 figure represents managements dividend proposal.Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other Information4 Report of the Supervisory Board10 Strategy and Objectives14 Combined Group Mana

7、gement Report14 Corporate Profile14 Business Model17 Management System18 Innovation20 Business Report20 Macroeconomic and Industry Environment23 Business Performance24 Earnings Situation29 Financial Situation33 Asset Situation34 E.ON SEs Earnings,Financial,and Asset Situation36 Other Financial and N

8、on-Financial Performance Indicators36 Analyzing Value Creation37 Employees40 Forecast Report42 Risk and Chances Report50 Business Segments57 Internal Control System for the Accounting Process59 Disclosures Regarding Takeovers62 Corporate Governance Report62 Corporate Governance Declaration70 Compens

9、ation Report88 Separate Combined Non-Financial Report 104 Consolidated Financial Statements104 Consolidated Statements of Income105 Consolidated Statements of Recognized Income and Expenses106 Consolidated Balance Sheets108 Consolidated Statements of Cash Flows110 Statement of Changes in Equity112 N

10、otes210 List of Shareholdings 230 Other Information230 Declaration of the Management231 Independent Auditors Report238 Independent Practitioners Report on Non-Financial Reporting240 Members of the Supervisory Board242 Members of the Management Board243 Summary of Financial Highlights245 Financial Ca

11、lendarContentsReport of the Supervisory Board4Report of the Supervisory BoardDear Shareholders,The year 2019 was characterized predominantly by the takeover of innogy SE.The closing of the transaction in September marked the beginning of a new chapter in E.ONs history.The Supervisory Board would lik

12、e to thank the Management Board and all employees for the enormous efforts that were and are connected with the transaction as well as the integration.In the 2019 financial year the Supervisory Board carefully performed all its duties and obligations under law,the Companys Articles of Association,an

13、d its own rules and procedures.The Supervisory Board advised the Management Board intensively about the Companys management and continually monitored the Management Boards activities,assuring itself that the Companys management was legal,pur-poseful,and orderly.At four regular and two extraordinary

14、meetings,it addressed all issues relevant to the Company.On a regular basis,the shareholder representatives and the employee representatives made separate preparations for these meetings with the participation of one or all members of the Management Board.Two Supervisory Board members were unable to

15、 attend individual Supervisory Board meetings in 2019.Apart from that,all members attended all meetings.The Management Board regularly provided the Supervisory Board with timely and comprehensive information about significant business transactions in both written and oral form.At the meetings of the

16、 full Supervisory Board and its committees,the Supervisory Board had sufficient opportunity to actively discuss the Management Boards reports,motions,and proposed resolutions.After thoroughly examining and discussing the resolutions proposed by the Management Board,the Supervisory Board voted on the

17、m when it was required by law,the Companys Articles of Association,or the Supervisory Boards rules and procedures.In addition,there was a regular exchange of information between the Chairman of the Supervisory Board and the members of the Management Board,in particular the Chairman,during the entire

18、 financial year.In the case of particularly pertinent issues,the Chairman of the Supervisory Board was kept informed at all times.Helikewise maintained contact with the members of the Supervisory Board outside of board meetings.Takeover of innogy SE and Far-reaching Asset Swap with RWEThe Supervisor

19、y Board dealt with the status of the innogy SE takeover at all of its meetings in 2019 and adopted any necessary resolutions.The Management Board kept the Supervisory Board continually informed about a variety of related matters,including the status of the voluntary public takeover offer,the merger-

20、control procedure,and the progress of the integration preparations and measures.In this context,the Supervisory Board also discussed the European Commissions antitrust conditions for selected markets in which E.ON operates and,where necessary,adopted resolutions.In addition,the Supervisory Board exa

21、mined the options for the legal integration of innogy SE and adopted corresponding resolutions.Likewise in the context of the innogy SE takeover,the Supervisory Board carried out its expansion to 20 members and made personnel decisions regarding the composition of the E.ON Management Board.Dr.Karl-L

22、udwig Kley,Chairman of the Supervisory Board5Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other InformationCorporate Governance In the declaration of compliance issued at the end of the year,th

23、e Super-visory Board and the Management Board declared that E.ON is in full compliance with the recommendations of the“Government Commission German Corporate Governance Code”dated February 7,2017,published by the Federal Ministry of Justice and for Consumer Protection in the official section of the

24、Federal Gazette(Bundesanzeiger),since the last annual declaration in December 2018,with two exceptions regarding the recommendations in Section 7.1.2,Sentence 3,and Section 4.2.3,Para-graph 2,Sentence 8.The current version of the declaration of compliance as well as earlier versions are published on

25、line at .In the 2019 financial year,two members of the Innovation and Sustain-ability Committee(formerly:Investment and Innovation Committee)had a conflict of interest in conjunction with a possible transaction owing totheir position with another company.In accordance with Supervisory Board rules,th

26、e members made this known prior to the meeting on March 11,2019,and did not take part in the committees adoption of a resolution.In addition,in his capacity as Chairman of the RWE AG Manage-ment Board,Rolf Martin Schmitz had conflicts of interest in relation to certain operational matters and for th

27、is reason did not participate in the discussion of selected agenda items.Otherwise,the Supervisory Board isaware of no indications of conflicts of interest involving members of the Management Board or the Supervisory Board.In the 2019 financial year,three comprehensive education and training session

28、s on selected operating and non-operating issues of E.ONs busi-ness were conducted for Supervisory Board members.Furthermore,an on-boarding program gave new members of the Supervisory Board the opportunity to receive a comprehensive introduction to the Companys business operations.In 2019 the Superv

29、isory Board conducted a regularly scheduled efficiency review of the Supervisory Boards work.An online questionnaire and one-on-one conversations with the Chairman of the Supervisory Board provided the Supervisory Board members with the opportunity to evaluate the efficiency of the Supervisory Board

30、s work and to make suggestions for improving it.The findings were used to design specific measures to improve the Supervisory Boards work,which are being implemented on an ongoing basis.They relate primarily to the Supervisory Board devoting more attention to selected strategic and operational issue

31、s,technological and industry-specific trends,and the monitoring of E.ONs competitive environment.In addition,the Supervisory Board appointed some members to serve as theme sponsors for selected operational themes.Other Key Topics of the Supervisory Boards Discussions Policy and regulatory developmen

32、ts in countries in which E.ON is active constituted another key topic of the Supervisory Boards discussions.Alongside the overall and economic policy situation in the individual countries,the Supervisory Board focused primarily on the developments in European and German energy policy and their respe

33、ctive consequences for E.ONs business areas.Furthermore,in the context of the Groups current operating business,the Supervisory Board addressed in detail the impact of low interest rates on E.ON,the general business situation of the Group and its compa-nies,national and international energy markets,

34、as well as the currencies that are important to E.ON.It discussed E.ON SEs and the E.ON Groups asset,financial,and earnings situation,future dividend policy,workforce developments,and earnings opportunities and risks.In addition,the Supervisory Board and the Management Board thoroughly discussed the

35、 E.ON Groups medium-term plan for 20202022.The Supervisory Board was provided with information on a regular basis about the Companys health,(occupational)safety,and environ-mental performance(in particular,key accident indica-tors)as well as current customer numbers,customer satisfaction,and the num

36、ber of apprentices.Further-more,the Supervisory Board dealt comprehensively with the Companys future energy-procurement strategy.In addition,the Supervisory Board discussed E.ONs future funding needs and,where necessary,adopted resolutions.It also discussed E.ONs current and future rating situation

37、with the Management Board on a reg-ular basis.Finally,it examined and approved the Groups non-financial reporting(“CSR”).6Furthermore,the Supervisory Board extended its competency profile to include the category of sustainability dimensions:environmental,social,and governance(“ESG”).The targets for

38、the Supervisory Boards compo-sition,including a competency profile and a diversity concept,with regard to Item 5.4.1 of the German Corporate Governance Code and Section 289f,Paragraph 2,Item 6 of the German Commercial Code and the status of their achievement are available in the Corporate Governance

39、 Declaration on pages at 65 and 66.Committee Work To fulfill its duties carefully and efficiently,the Supervisory Board has created the committees described in detail below.In the 2019 financial year the Executive Committee met eight times.All members took part in all of the committees meetings.At i

40、ts meetings,the committee discussed in detail the planned takeover of innogy and the related antitrust conditions and,in accordance with the authority granted by the Supervisory Board,adopted the necessary resolutions regarding the legal integration of innogy SE.In addition,it discussed significant

41、personnel matters,especially those relating to Management Board com-pensation and Dr.-Ing.Birnbaums appointment to the innogy SE Manage-ment Board;where necessary,it adopted resolutions.Furthermore,it prepared the Supervisory Boards resolutions regarding the composition of the E.ON SE Management Boa

42、rd and adopted a resolution based on the Management Boards proposal to change its members respective areas of responsibility.Additionally,the Executive Committee was periodically informed about the progress toward the Management Boards targets for2019.Finally,the Executive Committee thoroughly discu

43、ssed the medium-term plan for the period 20202022.The Innovation and Sustainability Committee(formerly:Investment and Innovation Committee)met five times and carried out one written reso-lution procedure in 2019.All members took part in all of the committees meetings and procedures.The matters addre

44、ssed by the committee included the investment in Big Raymond wind farm in the United States and the Management Boards planned refinancing of the syndicated credit facility.Furthermore,in particular E.ONs approach to innovation and inorganic growth options were topics of discussion.Finally,in conjunc

45、tion with the ESG sustainability dimensions,the committee addressed in detail the Groups climate strategy and its activities related to sustainability.The Audit and Risk Committee met four times in 2019.All members took part in all meetings.The committee conducted a thorough review,in particular of

46、the 2018 Financial Statements of E.ON SE(prepared in accordance with the German Commercial Code),the E.ON Groups 2018 Consolidated Financial Statements(prepared in accordance with Interna-tional Financial Reporting Standards,or“IFRS”),and the 2019 intermediate financial reports of E.ON SE.The commit

47、tee discussed the recommen-dation for selecting an independent auditor for the 2019 financial year as well as the intermediate financial reports and assigned the tasks for the Report of the Supervisory Boardindependent auditors auditing services,established the audit priorities,determined the indepe

48、ndent auditors compensation,and verified the auditors qualifications and independence in line with the recommendations of the German Corporate Governance Code.The com-mittee also assured itself that the independent auditor has no conflicts of interest and did the preparatory work for the Supervisory

49、 Boards decision regarding the man-datory rotation of the independent auditor.In addition,the committee addressed other matters assigned to it by law,the Companys Articles of Association,or the Supervisory Boards rules and procedures,in particular Internal Audits activities and reports,accounting is

50、sues,risk management,and developments in the area of compliance.Furthermore,the committee thoroughly discussed the Combined Group Management Report and the proposal for profit appropriation and prepared the relevant recommendations for the Supervisory Board and reported them to the Supervisory Board

51、.On the basis of the quarterly risk reports,the committee noted that no risks were identified that might jeopardize the existence of the Company or individual segments.The Nomination Committee carried out one written resolution procedure in 2019 regarding the court appointment of the new shareholder

52、 representatives to the Supervisory Board.All members of the committee took part.Committee chairpersons reported the agenda and results of their respective committees meetings to the full Supervisory Board on a regular basis.Information about the committees composition and responsibilities is in the

53、 Corporate Governance Declaration on pages 67 to 68.An overview of Supervisory Board members attendance at meetings of the Supervisory Board and its committees can also be found there.7Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Repo

54、rt Consolidated Financial Statements Other InformationExamination and Approval of the Financial Statements,Approval of the Consolidated Financial Statements,Proposal for Profit Appropriation for the Year Ended December 31,2019 PricewaterhouseCoopers GmbH,Wirtschaftsprfungs-gesellschaft,Dsseldorf,aud

55、ited and submitted an unqualified opinion on the Consolidated Financial State-ments of E.ON SE prepared in accordance with IFRS and the Combined Group Management Report for the year ended December 31,2019.The IFRS Consolidated Financial Statements exempt E.ON SE from the require-ment to publish Cons

56、olidated Financial Statements in accordance with German law.The Supervisory Board reviewed and,at its annual-results meeting on March 24,2019,thoroughly discussedin the presence of the independent auditor and with knowledge of,and reference to,the Independent Audi-tors Report and the results of the

57、preliminary review by the Audit and Risk CommitteeE.ON SEs Financial Statements prepared in accordance with the German Commercial Code,Consolidated Financial Statements,and Combined Group Management Report as well as the Management Boards proposal for profit appropriation.The independent auditor was

58、 available for supplemen-tary questions and answers.After concluding its own examination,the Supervisory Board determined that there are no objections to the findings.It therefore acknowledged and approved the Independent Auditors Report.In addition,the Supervisory reviewed and approved the Separate

59、 Combined Non-Financial Report.The Supervisory Board approved the Financial State-ments of E.ON SE prepared by the Management Board and the Consolidated Financial Statements.The Finan-cial Statements are thus adopted.The Supervisory Board agrees with the Combined Group Management Report and,in parti

60、cular,with its statements concerning the Companys future development.The Supervisory Board examined the Management Boards proposal for profit appropriation,which includes a cash dividend of 0.46 per ordinary share,also taking into consideration the Companys liquidity and its finance and investment p

61、lans.After examining and weighing all arguments,the Supervisory Board agrees with the Management Boards proposal for profit appropriation.Personnel Changes on the Management BoardThere were no personnel changes on the E.ON SE Management Board in 2019.Page 242 of this report shows E.ON SE Management

62、Board members respective areas of responsibility as of year-end 2019.Personnel Changes on the Supervisory BoardIn line with the 2019 Annual Shareholders Meetings resolution to expand the Supervisory Board from 14 to 20 members,the court appointed Ulrich Grillo,Dr.Rolf Martin Schmitz,and Deborah Wilk

63、ens to the Super-visory Board as shareholder representatives effective October 1,2019.Stefan May,Monika Krebber,and Ren Phls were elected to the Super-visory Board as employee representatives effective September 24,2019.Furthermore,on the employee side Clive Broutta ended his service on the Supervis

64、ory Board at the conclusion of January 31,2020,owing to the United Kingdoms departure from the European Union.Christoph Schmitz was elected to succeed him effective February 1,2020.Pages 240 to 241 of this report provide an overview of all members of the Supervisory Board as of December 31,2019.Esse

65、n,March 24,2020The Supervisory BoardBest wishes,Dr.Karl-Ludwig Kley ChairmanStrategy and Objectives10In addition to strengthening our core businesses,the innogy takeover will enable us to leverage substantial synergies of about 740 million by 2022,thereby making important prog-ress toward our effici

66、ency targets.We expect the systematic optimization and digitization of our business processes to deliver additional efficiency gains.Our growth strategy calls for extensive investments in both business segments.The main focus will be on Energy Networks,in which we will invest about 3.2 billion in 20

67、20.We plan to invest about 0.9 billion in Customer Solutions.Here,funds will mainly go toward City Energy Solutions and our business of providing solutions to industrial customers.We expect additional growth to come from the innovation activities in our retail and network operations as well as inves

68、tments in startups(these are described in greater detail in the Innovation chapter of the Combined Group Management Report).Energy NetworksThe integration of innogy will result in E.ON operating regulated distribution networks in eight European countries,making it one of Europes biggest distribution

69、 system operator(“DSO”).Excluding innogy,E.ON has a regulated asset base(“RAB”)of 21 billion.Energy Networks principal objectives are to con-tinually enhance its efficiency and to increase its RAB.All four of E.ONs DSOs in Germany achieved efficiency rates of 100percent.innogys DSOs had a weighted-a

70、verage efficiency rate of 98.4 percent.The further increase in the investment budget for our networks will secure their asset integrity and expend their RAB.Distribution networks connect our customers with one another and provide the backbone for a successful energy transition.Our focus is on evolvi

71、ng from a pure DSO to a smart platform provider.The digitization of distribution networks plays an important role here.For example,around 2,700 smart substations entered service at E.ON and innogys DSOs in Germany.They will help ensure that tomorrows smart grid operates reliably despite increasing c

72、omplexity and variable feed-in.A cooperative arrangement with a startup called envelio gives E.ON the ability to transmit information about a network connection directly to market par-ticipants,which will greatly simplify the planning of distributed generating units.Strategy and ObjectivesOur Strate

73、gy:Leading Partner for the New Energy WorldDecarbonization,decentralization,and digitization profoundly shaped the energy market in 2019 and will continue to do so in the decade ahead.We use these trends to enhance our position as a leading player in Europes energy market,to successfully tap new bus

74、inesses,and to make our processes more efficient.Our objective is to systematically focus the Company on the new energy world of increasingly empowered and proactive customers.We will create new markets for our customers by providing them with new products,services,and technologies.We will be policy

75、makers and regulators partner of choice for the energy transition.Our efforts will be guided by our principles of integration,focus,efficiency,and growth.We began integrating innogy SE last year and,after the squeeze-out and acquisition of its remaining stock,will accelerate this process in the curr

76、ent year.Our focus is on combining the respec-tive organizational entities in line with our Target Operating Model.We will use benchmarking analyses to further optimize business units core processes or reorganize them to reflect best practices.Going forward,our business operations will focus on the

77、key segments of the new energy world:regulated,highly efficient energy networks and innovative customer solutions.The acqui-sition of innogy SE significantly strengthened these segments.After the transaction is completed,the new E.ON will be the first European player to focus exclusively on municipa

78、l,commercial,and residential customers and will generate a large part of its EBIT with regulated businesses.The combination of energy net-works and customer solutions fits with the trend that,in an increasingly distributed and digital energy world,these business segments are converging.For example,s

79、mart meters make it possible to improve the coordination of energy networks and provide the basis for new sales offerings,such as time-based electricity tariffs and energy-trading options for distributed generating units.Strategy and Objectives11Report of the Supervisory BoardStrategy and Objectives

80、 Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other InformationTogether with innogy,E.ON will also make significant investments to expand its broadband activities.By expanding its network offiber-to-the-home broadband connections,E.ON will bring hi

81、gh-speed Internet with broad bandwidth to rural areas as well.Customer SolutionsThe integration of innogy will give the new E.ON a customer base of 40 million(including 19 million innogy customers),making it one of Europes biggest end-customer suppliers.Enerjisa Enerji,our equity interst in Turkey,s

82、upplies an additional 10 million customers.Our objective in power and gas sales is to further strengthen our competitive position through maximal cost-efficiency,innovation,and relentless customer orientation.Digitization will be decisive here as well:going forward,highly efficient digital systems w

83、ill make it possible for us to achieve lasting reductions in our oper-ating costs.Our objective for new customer solutions that go beyond power and gas sales is to continually improve and renew our portfolio of products and services for innovative heat solutions,energy efficiency,distributed generat

84、ion and storage,and sustainable mobility solutions.This will enable E.ON to become the partner of choice for public,commercial,and residential customers:Several projects exemplified how E.ON is implementing its strategy of helping customers become more sustainable.An international paper manufacturer

85、 chose E.ON to install a biomass-fired combined-heat-and-power(“CHP”)plant in Hrth,a suburb of Cologne,Germany.The plant will supply heat to the paper mill and feed renewable power into the public grid.We also installed an advanced material and energy recycling system in Hgbytorp outside Stockholm,S

86、weden.It will help ensure that one of Swedens fastest-growing regions can be supplied with climate-neutral heat,power,and biogas.In addition,a multinational packaging producer awarded E.ON a major contract to install a CHP plant at its facility in Kent in the United Kingdom.The plant,which is expect

87、ed to enter service in 2021,will reduce carbon emissions by 36,000 metric tons per year.SustainabilityGood corporate governance,corporate social responsibility,and environmental responsibility are essential for E.ON to generate sustainable business value over the long term.E.ON has there-fore decide

88、d to be climate-neutral with regard to Scope 1 and Scope 2 emissions by 2040.To underscore E.ONs commitment to sustainability,the Management Board has also pledged E.ONs support for the UN Sustainable Development Goals(“SDGs”).Our success at embracing sustainability is reflected in our performance i

89、n environmental,social,and governance(“ESG”)ratings.Leading sustainability rating agencies like MSCI and Sustainalytics gave us high ratings.A sustainable energy supply is also the objective of Green Gas from Green Power,an E.ON initiative to reduce carbon emissions in heat generation,transport,and

90、industry.The German Federal Ministry for Economic Affairs and Energy selected the initiative for funding under its Real-life Laboratory for the Energy Transi-tion project.Our energy-transition laboratory will involve installing and operating a power-to-gas(“P2G”)plant.The purpose is to test and refi

91、ne intelligent combinations of various technologies for renewable energy production,conversion,storage,and dis-tribution in order to further propel decarbonization(for further details about sustainability,see the Separate Combined Non-Financial Report).Finance StrategyThe section of the Combined Gro

92、up Management Report entitled Financial Situation contains explanatory information about our finance strategy.People StrategyThe section of the Combined Group Management Report entitled Employees contains explanatory information about our people strategy.Combined Group Management Report innogy takeo

93、ver closed Adjusted EBIT and adjusted net income within the forecast rangefor 2019 that was adjusted in November owing to changesin E.ONs setup As anticipated,economic net debt significantly higher due to the innogy takeover 2020 adjusted EBIT expected to be between 3.9 and 4.1 billion,2020 adjusted

94、 net income between 1.7 and 1.9 billion Proposed dividend of 0.46 per share for the 2019 financial year Annual growth of dividend per share of up to 5 percent through the dividend for the 2022 financial year decided14Corporate Profilethe United Kingdom,Sweden,Italy,the Czech Republic,Hungary,and Rom

95、ania.E.ON Business Solutions,which provides cus-tomers with turn-key distributed-energy solutions,is also part of this segment.innogys sales business is not reported here in the 2019 financial year.innogyThis segment consists in particular of the network and sales busi-nesses as well as the corporat

96、e functions and internal services of the innogy Group,which E.ON took over in September 2019.innogy operates its network business primarily in Germany,Poland,Hungary,and Croatia.Its sales business is engaged principally in Germany,the United Kingdom,the Netherlands,Belgium,Hungary,and Poland.This se

97、gment does not contain innogys renewables and gas-storage businesses or its stake inAustrian energy utility KELAG,which are still to be transferred to RWE.RenewablesThis segment consists of onshore wind,offshore wind,and solar farms.E.ON planned,built,operated,and managed renewable generation assets

98、.Their output was marketed in several ways:inconjunction with renewable incentive programs,under long-term electricity supply agreements with key customers,and directly to the wholesale market.Substantially all of the opera-tions in this segment were classified as discontinued operations effective J

99、une 30,2018,and deconsolidated effective Septem-ber 18,2019(more information is available on pages 15,27,and 28 of the Combined Group Management Report and in Note 4 to the Consolidated Financial Statements).Certain busi-ness operations of e.disnatur in Germany and Poland as well asa 20-percent stak

100、e in Rampion offshore wind farm in the United Kingdom were not transferred to RWE and continued to be reported here in the 2019 financial year.Non-Core Business This segment consists of the E.ON Groups non-strategic activities.This applies to the operation and dismantling of nuclear power stations i

101、n Germany(which is managed by our PreussenElektra unit)and the generation business in Turkey.Corporate ProfileBusiness ModelE.ON is an investor-owned energy company with approximately 79,000 employees.Led by corporate headquarters in Essen,our operations are segmented into four operating units:Energ

102、y Networks,Customer Solutions,innogy,and Renewables.Our non-strategic operations are reported under Non-Core Business.Corporate HeadquartersCorporate headquarters main task is to lead the E.ON Group.This involves charting E.ONs strategic course and managing and funding its existing business portfoli

103、o.Corporate headquarters tasks include optimizing E.ONs overall business across countries and markets from a financial,strategic,and risk perspective and conducting stakeholder management.Energy NetworksThis segment consists of our power and gas distribution net-works and related activities.It is su

104、bdivided into three regional markets:Germany,Sweden,and East-Central Europe/Turkey(which consists of the Czech Republic,Hungary,Romania,Slo-vakia,and Turkey).This segments main tasks include operating its power and gas networks safely and reliably,carrying out any necessary maintenance and repairs,a

105、nd expanding its power and gas networks,which frequently involves adding customer connections.innogys network business is not reported here in the 2019 financial year.Customer SolutionsThis segment serves as the platform for working with our customers to actively shape Europes energy transition.This

106、 includes supplying customers in Europe(excluding Turkey)withpower,gas,and heat as well as with products and services that enhance their energy efficiency and autonomy and provide other benefits.Our activities are tailored to the individual needs of customers across all categories:residential,small

107、and medium-sized enterprises,large commercial and industrial,and public entities.E.ONs main presence in this business is in Germany,15Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other Informat

108、ionSpecial Events in the Reporting PeriodAcquisition of RWEs innogy Stake ClosedThe 76.8-percent stake in innogy previously held by RWE was transferred to E.ON on September 18,2019.In late September E.ON also completed the voluntary public takeover offer to innogys minority shareholders,thereby acqu

109、iring a further 9.4percent of innogy stock.Together with the 3.8 percent of innogy stock acquired on-market,E.ON holds 90 percent of allinnogy stock and thus fulfills the necessary requirement for amerger squeeze-out(Note 4 to the Consolidated Financial Statements contains additional details of the

110、transaction).RenewablesPursuant to IFRS 5,the operations in the Renewables segment transferred as part of the transaction with RWE were reported as discontinued operations effective June 30,2018.For the purpose of internal management control,these operations were fully included in the relevant key p

111、erformance indicators until Septem-ber 18,2019.In addition,the scheduled depreciation charges required by IFRS 5 and the carrying amount of these discontinued operations were recorded in equity and disclosed accordingly.This Annual Reports presentation of sales and the key perfor-mance indicators re

112、levant for management control therefore also includes the results of discontinued operations in the Renewables segment.Pages 27 and 28 of the Combined Group Management Report and Note 34 to the Consolidated Financial Statements contain reconciliations of these indicators to the disclosures in the E.

113、ON SE and Subsidiaries Consolidated State-ments of Income,Consolidated Balance Sheets,and Consolidated Statements of Cash Flows.E.ON Supervisory Board Enlarged,Composition of E.ON Management Board UnchangedAs decided at E.ONs Annual Shareholders Meeting in May 2019,after the closure of the innogy ta

114、keover E.ON increased the E.ON Supervisory Board to 20 members.E.ON appointed RWE CEO Rolf Martin Schmitz,entrepreneur Ulrich Grillo,and U.S.management consultant Deborah B.Wilkens as shareholder representatives.In addition,Monika Krebber,Stefan May,and Ren Phls joined the E.ON Supervisory Board as

115、employee repre-sentatives.The leadership of the new E.ON remains in the hands of the current members of the Companys Management Board.Restructuring Measures Initiated,including in Germany and the United KingdomIn conjunction with the innogy takeover,E.ON announced that it would make up to 5,000 jobs

116、 redundant Group-wide.Before this backdrop,in May 2019 the Collective Bargaining Agreement for the Future and Job Security was concluded with employee repre-sentatives and two trade unions,ver.di and IGBCE.The collective bargaining agreement will initially apply to personnel changes and adjustment i

117、nitiatives carried out in Germany as a result of the integration of the innogy Group into the E.ON Group.Among other things,it includes provisions for severance payments for employees who leave voluntarily,early retirement arrangements,and the possibility of transfer to a special company for further

118、 employment and qualifications.These measures were further specified by the end of the year 2019 and they have been available for selection at selected locations since February 2020.In late November 2019 E.ON announced proposals to restructure npower.These proposals call for npowers residential and

119、small and medium-size enterprise customers(“B2C”)to be gradually combined with E.ON UKs B2C customers on a shared IT plat-form.In addition,in February 2020 npower and E.ON UK con-cluded an agreement on the sale of npowers B2C customer contracts.Furthermore,the plan is for npowers business with indus

120、trial and commercial customers to be carved out.npowers remaining operations will be restructured over the next two years.This includes closing most npower offices and thus reducing staff.Framework Agreement Signed with MVM and Opus to Reorganize Business in HungariaIn early October 2019 E.ON acquir

121、ed EnBWs 27-percent stake in ELM Nyrt.(“ELM”)and MSZ Nyrt.(“MSZ”).Subse-quently,E.ON,MVM Magyar Villamos Mvek Zrt.(“MVM,”a shareholder of ELM and MSZ),and Opus Global Nyrt.(“Opus”)signed a framework agreement.Under the agreement,E.ON intends to give itself a balanced and optimized portfolio in Hun-g

122、ary that will also make it possible to swiftly integrate innogys operations there.16Corporate ProfileCoromatic AcquisitionOn July 11,2019,E.ON concluded the acquisition of 100 percent of Coromatic,a leading Sweden-based provider of facility-critical services.The EQT Group was the seller.Coromatic ha

123、s its head-quarters in Stockholm and about 500 employees.The company has more than 5,000 customers in Scandinavia in a wide variety of sectors,such as data centers,healthcare,the public sector,transportation,manufacturing,telecommunications,finance,and retail.The parties agreed not to disclose the p

124、urchase price.For the E.ON Group as a whole,the transaction volume is insignificant.Nord Stream Stake Transferred to Contractual Trust ArrangementE.ON Beteiligungen GmbH held all of the shares of PEG Infra-struktur AG(“PEGI”)and thus an indirect,15.5-percent stake in Nord Stream AG.Nord Stream AG,a

125、project company founded in 2005,owns and operates two offshore gas pipelines,each with a length of 1,224 kilometers,that transport natural gas from Russia to Germany.In a contract dated December 18,2019,E.ON Beteiligungen GmbH sold all of its PEGI shares and thus its indirect stake in Nord Stream AG

126、 to E.ON Pension Trust e.V.(“EPT”)with effect and for the account of the trust assets of MEON Pensions GmbH&Co.KG(“MEON”).The shares were transferred at the end of the year(for more information,see Note 4 to the Consolidated Financial Statements).Transfer of Residual Power Output RightsIn July 2019,

127、10 TWh of residual power output rights was acquired from Krmmel nuclear power station and transferred to Grohnde nuclear power station,which is operated by Preussen-Elektra.The legal framework ensures that Grohnde and the other nuclear power stations operated by E.ON have a supply ofother residual p

128、ower output rights.The agreement is expected to be fully implemented in 2021.This will give MVM 100 percent of distribution operator MSZ and a 25-percent stake in E.ON Hungria,which will then be ELMs sole owner.In addition,Opus will be owner of current E.ON subsidy E.ON Tiszntli ramhlzati Zrt.(“E.ON

129、 ETI”).Syndicated Credit Facility with ESG Component ConcludedIn October 2019 E.ON concluded a new 3.5 billion syndicated credit facility with a term of five years and two options to extend the maturity by one year each.In addition,the volume can be increased by up to 0.75 billion during the facilit

130、ys lifetime.The facility replaced two previously existing syndicated credit facili-ties:E.ON SEs 2.75 billion facility and innogy SEs 2 billion facility.The credit margin is linked in part to the development of certain ESG ratings,which also gives E.ON financial incentives to pursue a sustainable co

131、rporate strategy.Green Bonds IssuedIn August 2019 E.ON issued two 750 million Green Bonds that mature in 2024 and 2030,respectively.High investor demand enabled E.ON to secure favorable interest terms with coupons of 0 percent and 0.35 percent per year,respectively.A Green Bond is a fixed-interest s

132、ecurity whose issuance proceeds are used to fund sustainable infrastructure and energy-efficiency projects.More Corporate Bonds IssuedIn October 2019 E.ON issued two more 750 million bonds.High investor demand enabled E.ON to secure favorable interest terms for both maturities(2022 and 2026)with cou

133、pons of 0 percent and 0.25 percent per year,respectively.Following the first Green Bond in August,this was another placement of a bond with a zero-percent coupon.In addition,in November 2019 E.ON issued a 500 million bond with a 12-year maturity and a coupon of 0.625 percent per year.In December 201

134、9 E.ON issued another 500 million bond with a three-year maturity and a coupon of 0 percent per year.17Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other InformationIFRS 16 LeasesWe apply IFRS

135、16 Leases for the first time effective the start of2019.It supersedes IAS 17 Leases and IFRIC 4 Determining whether an Arrangement Contains a Lease.The application of IFRS 16s main impact on our Consolidated Balance Sheets is an increase in fixed assets(due to the capitalization of right-of-use asse

136、ts)and of financial liabilities(due to the disclosure of the corresponding lease liabilities).Initial application resulted in lease liabilities of 0.8 billion and right-of-use assets of roughly 0.8 billion,based on existing accruals and deferrals.In each case,0.3 billion of the amount was recorded a

137、t the discontinued oper-ations at Renewables.In the Consolidated Statements of Income,the application of IFRS 16 in the year under review resulted in depreciation charges on right-of-use assets of 0.1 billion and a decline in other operating expenses of likewise 0.1 billion.The resulting earnings ef

138、fect was insignificant(Note 2 to the Consolidated Financial Statements contains more information about the aforementioned reclassification effects resulting from the initial application of IFRS 16).Right-of-use assets and corresponding leasing liabilities both totaled 3.1 billion at December 31,2019

139、.Leasing liabilities are recorded under economic net debt.In addition,leasing agree-ments resulted in cash outflow of 0.4 billion in 2019.Of this,0.1 billion was recorded under operating cash flow,0.3 billion under cash provided by financing activities.Note 32 to the Consolidated Financial Statement

140、s contains more information about the effects of the initial application of IFRS 16.Management SystemOur corporate strategy aims to deliver sustainable growth in shareholder value.We have in place a Group-wide planning and controlling system to assist us in planning and managing E.ON as a whole and

141、our individual businesses with an eye to increas-ing their value.This system ensures that our financial resources are allocated efficiently.We strive to enhance our sustainability performance efficiently and effectively as well.We embed these expectations progressively more deeply into our organiza-

142、tionacross all organizational entities and all processesby means of binding Group-wide policies that set minimum standards(for more information,see the Separate Combined Non-Financial Report on pages 88 to 101).Key Performance IndicatorsFor the 2019 financial year,E.ONs most important key perfor-man

143、ce indicators(“KPIs”)for managing its operating business are adjusted EBIT and cash-effective investments.Other KPIs for managing the E.ON Group are cash-conversion rate,ROCE,adjusted net income,earnings per share(based on adjusted net income),and debt factor.The Combined Group Management Reports pr

144、esentation of sales and the KPIs relevant for manage-ment control also includes the results of discontinued operations in the Renewables segment that were deconsolidated effective September 18,2019(for more information,see page 15 of the Combined Group Management Report).Pages 27 and 28 of the Combi

145、ned Group Management Report and Note 34 to the Con-solidated Financial Statements contain reconciliations of these indicators to the disclosures in the E.ON SE and Subsidiaries Con-solidated Statements of Income,Consolidated Balance Sheets,and Consolidated Statements of Cash Flows.E.ON plans to make

146、 changes to the KPIs for the 2020 financial year.These are likewise described below.Adjusted earnings before interest and taxes(“adjusted EBIT”)isE.ONs most important KPI for purposes of internal manage-ment control and as an indicator of its businesses long-term earnings power.The E.ON Management B

147、oard is convinced that adjusted EBIT is the most suitable KPI for assessing operating performance because it presents a businesss operating earnings independently of non-operating factors,interest,and taxes.Theadjustments include net book gains,certain restructuring expenses,impairment charges and r

148、eversals,the marking to market of derivatives,and other non-operating earnings(see the explanatory information on pages 27 and 28 of the Combined Group Management Report and in Note 34 to the Consolidated Financial Statements).In addition,the effects of the subsequent valuation of hidden reserves an

149、d liabilities that were identified as part of the purchase-price calculation and allocation for the innogy transaction are disclosed separately.18Corporate ProfileOther KPIsAlongside our most important financial management KPIs,the Combined Group Management Report includes other financial and non-fi

150、nancial KPIs to present the performance of E.ONs operating business and part of E.ONs responsibility for all our stakeholders:our employees,customers,shareholders,bond investors,and the countries in which we operate.Operating cash flow,power and gas passthrough,and selected employee information are

151、examples of other KPIs.In addition,some KPIs are important for E.ON as a customer-focused company.For example,we see our ability to acquire new customers and retain existing ones as crucial to our companys success.Net promoter score(“NPS”)measures customers willingness to recommend E.ON to a friend

152、or colleague.Our Sustainability Report and the Separate Combined Non-Financial Report describe how NPS fits into our management approach.However,these other KPIs are not the focus of the ongoing management of our businesses.Innovation E.ONs innovation activities reflect its strategy of focusing sys-

153、tematically on the new energy world of empowered and proactive customers,renewables and distributed energy,energy efficiency,local energy systems,and digital solutions.The innovation activities in the Group therefore have the following focus areas:Retail and end-customer solutions:develop new busine

154、ss models for distributed-energy supply for end-customers and industry,energy efficiency,sustainable city and city-district solution,and mobility Infrastructure and energy networks:develop energy-storage and energy-distribution solutions for an increasingly distrib-uted and volatile generation syste

155、mCash-effective investments are equal to the investment expen-ditures shown in the E.ON Groups Consolidated Statements ofCash Flows.These include the investments of discontinued operations in the Renewables segment until they were decon-solidated effective September 18,2019.Cash-conversion rate is e

156、qual to operating cash flow before inter-est and taxes divided by adjusted EBITDA.It indicates whether E.ONs operating earnings are generating enough liquidity.From the 2020 financial year onward,the expenditures for the dismantling of nuclear power stations that are included in oper-ating cash flow

157、 before interest and taxes will no longer be fac-tored into cash-conversion rate.To balance out fluctuations that result primarily from payments around the balance-sheet date,E.ON will manage its cash-conversion rate by means of a target figure over the three years of the medium-term plan.Return on

158、capital employed(“ROCE”)assesses the value perfor-mance of E.ONs operating business.ROCE is a pretax total return on capital and is defined as the ratio of adjusted EBIT to annual average capital employed.From the 2020 financial year onward,ROCE will not be factored into components of the E.ON SE Ma

159、n-agement Boards compensation.In the 2020 financial year,ROCE is therefore no longer one of E.ONs most important KPIs.In the future,it will instead be reported as one of E.ONs other KPIs.Adjusted net income is an earnings figure after interest income,income taxes,and non-controlling interests that h

160、as likewise been adjusted to exclude non-operating effects(see the explan-atory information on pages 27 and 28 of the Combined Group Management Report).E.ON manages its capital structure by means of its debt factor(see the section entitled Finance Strategy on page 29).Debt factor is equal to economi

161、c net debt divided by adjusted EBITDA and is therefore a dynamic debt metric.Economic net debt includes net financial debt as well as pension and asset-retire-ment obligations.19Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Cons

162、olidated Financial Statements Other Information Energy intelligence and energy systems:study potentially fundamental changes to energy systems and the role of data in the new energy world Renewables generation:increase the cost-effectiveness of existing wind and solar assets and study new renewables

163、 technologies;E.ONs renewables business along with its innovation activities regarding renewables was transferred to RWE in September 2019.Strategic Co-Investments We want to identify promising energy technologies of the future that will enhance our palette of offerings for our millions of customers

164、 around Europe and will make us a pacesetter in the operation of smart energy systems.We select new busi-nesses that offer the best opportunities for partnerships,com-mercialization,and equity investments.Our investments focus on strategic technologies and business models that enhance our ability to

165、 lead the move toward distributed,sustainable,and innovative energy offerings.These arrangements benefit new technology companies and E.ON,since we gain access to their new business models and have a share in the value growth.In 2019 we invested in Vinli and HoloBuilder and made a number of follow-u

166、p investments in our portfolio.Vinli,a U.S.-based startup,has developed software and a data analysis platform for mobility solutions.The software solution not only collects and clearly structures data from vehicles connected to the system.It can also generate results-oriented insights that enable la

167、rge vehicle fleet operators,automakers,and service providers to make the advantages of eMobility economical.HoloBuilder,a startup with roots in Aachen and based in San Francisco,has developed a cloud solution that not only enables virtual construction site inspections and 360 live streaming from con

168、struction sites but also time travel:construction man-agers,business customers,and contractors can fast-forward and rewind at any time and thus better track construction prog-ress.Another feature is the virtual measurement of distances at a construction site.The images for the software are provided

169、bya 360 camera in conjunction with the JobWalk app,which employees can use on site to activate the camera and document the project.Going forward,E.ON will use HoloBuilders solution for projects to install network equipment(such as substations and switchgears)and for large city energy projects.We bel

170、ieve the digitization of construction projects offers significant,as yet untapped potential.Partnerships with UniversitiesOur innovation activities include partnering with universities and research institutes to conduct research projects in a variety of areas.The purpose is to study ways to expand t

171、he horizons ofenergy conservation and sustainable energy and to draw on this research to develop new offerings and solutions for cus-tomers.Collaborative work in the E.ON Energy Research Center at RWTH Aachen University focuses ontechnologically advanced electricity networks,innovative heat solution

172、s for buildings and city districts,and new solutions for residential customers and industrial enterprises.20Business ReportBusiness ReportMacroeconomic and Industry EnvironmentMacroeconomic EnvironmentAfter peak growth in 2018,the world economy experienced a downturn in 2019.Ongoing uncertainty abou

173、t Brexit and increasing trade tensions between the United States and China were the dominant features of 2019.As a result,almost all economies slowed,and world trade stagnated.Global economic growth in 2019 is estimated to have declined by 0.8 percentage points year on year to 2.9 percent.COVID-19(C

174、oronavirus)The outbreak and spread of the novel coronavirus has major global implications,including economic and financial implications.E.ON is aware of its responsibility as an operator of critical infra-structure in this context as well.It has established a crisis team which is monitoring current

175、developments so that the Company can,if necessary,expand the measures it has already taken.0120.60.21.21.41.22.31.70.3GermanyItalyEuro zoneSwedenUnited KingdomUSAOECDTurkeyGDP Growth in Real Terms in 2019Annual change in percent Source:OECD,2019.Energy Policy and Regulatory EnvironmentGlobalOn Novem

176、ber 4,2019,the U.S.government under President Donald Trump gave notice that it intends to withdraw from the Paris climate agreement.The one-year transition period until the formal exit will end on November 3,2020,one day after the upcoming presidential election.The 25th UN climate change conference,

177、held in Madrid from December 2 to 15,2019,was largely without result.The dele-gates from just under 200 countries were only able to reach agreement on a minimal compromise.In the final document,countries agreed to review the gap between their existing vol-untary climate targets and what would be nec

178、essary to limit theincrease in global temperatures to below 2 degrees Celsius as foreseen in the Paris agreement.Consequently,key deci-sionssuch as a voluntary commitment by all countries to more climate protection and the design of a global market mechanism for trading in climate-protection certifi

179、cateswere postponed until the next climate summit,which will be held in Glasgow later this year.EuropeFollowing the elections to the European Parliament in May 2019,the European Union elected a new Commission.Commission President Ursula von der Leyen resolved to make climate and environmental issues

180、 her top priority by launching the European Green Deal.Its centerpiece is a legally binding commitment by the EU to achieve climate neutrality by 2050.In addition,the new Commission intends to consider raising the 2030 carbon-reduction targets to 50 to 55 percent.To help achieve them,the Commission

181、will make proposals for an EU emissions trading scheme for the transport and construction sectors(which will eventually be merged with the existing emissions trading scheme),introduce a carbon border tax that conforms with World Trade Organization rules,and review the Energy Tax Directive.21Report o

182、f the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other InformationThe European Green Deal will include a Just Transition Mecha-nism to support regions dependent on fossil fuels.In addition,the Commission w

183、ill launch a Sustainable Europe Investment Plan,mobilizing investments of 1 trillion over the next decade.As part of this effort,it will seek to transform parts of the European Investment Bank into a climate bank and double its funding for climate investment by 2025.The new Commission also intends t

184、o present a new industrial policy and proposals for the ethical regulation of artificial intelligence.The proposals for relations,consultation,and legislation are expected to be published in 2020 and 2021.GermanyThe continuation of the grand coalition means that the climate targets contained in the

185、coalition agreement that followed the 2017 Bundestag elections remain unchanged.One target is for renewables to meet about 65 percent of the countrys gross electricity consumption by 2030.The ambitious action plan for upgrading and expanding energy networks also remains in place.The package of clima

186、te legislation adopted by the German gov-ernment at the end of 2019 focuses on four different areas for achieving the countrys climate targets in 2030.One core ele-ment is the introduction of certificate trading to put a price on carbon emissions in the building and transport sectors.Another is a mi

187、xture of regulatory requirements,financial incentives,and socially motivated compensation mechanisms.The Cabinet Committee on Climate Protection,or Climate Cabinet,will assume responsibility for managing Germanys climate-protec-tion strategy,assesses progress annually,and adjust measures as necessar

188、y.Renewables expansion remains a controversial issue.The governing parties could not agree on additional measures in 2019.Although the Coal Commission presented its final report in January 2019,the federal cabinet did not adopt the corre-sponding draft legislation until January 2020.The Renewable En

189、ergy Sources Act(known by its German abbreviation,“EEG”)is expected to be amended in the first half of 2020.E.ON unequivocally supports the German federal governments 65-percent renewables target.To get there,renewables output would have to roughly double by 2030.Achieving growth of this magnitude r

190、equires making sufficient land available.To garner public support for the energy transition,however,land use is often limited.Examples include minimum setback restrictions for the siting of wind farms and limitations on the installation ofsolar farms.To ensure that targets are reached and that the e

191、nergy transition as a whole is a success,E.ON advocates flexible and ambitious rules for the expansion of wind energy and the construction of solar facilities.A ruling issued by the Federal Supreme Court on July 9,2019,affects E.ONs core network business.It upheld the Federal Network Agencys reducti

192、on of the allowable pretax return on equity for operators of electricity and gas distribution networks from 9.05 percent to 6.91 percent for the third regulatory period.E.ONs distribution system operators(“DSOs”)and roughly 1,100 other companies had filed administrative appeals against the reduction

193、 with the State Superior Court in Dsseldorf.The Federal Ministry of Economics and Energy(“BMWi”)plans to amend the Incentive Regulation Ordinance(“ARegV”)by mid-2020.The amendments principal purpose is to establish stronger economic incentives for efficient congestion management and grid expansion.E

194、.ON could benefit from a revision of the amended ARegVs allowed return on equity.22Business ReportIn November 2019 the federal cabinet approved the master plan for charging infrastructure.It contains measures for rapidly establishing a nationwide,user-friendly charging infrastructure for up to 10 mi

195、llion electric vehicles by 2030.The objective is 1million public charging points,with 50,000 being installed in the next two years.In addition,from 2020 onward 50 million will be made available for residential charging options.Great Britain2019 proved to be a politically turbulent year in Great Brit

196、ain.Parliaments vote on the Brexit agreement,which was originally supposed to be held by March 29,was postponed several times.The exit agreement,known as an Article 50 procedure,was amended to include a“flextension,”which extended the deadline again,this time to January 31,2020.Amid the negotiation

197、of a revised exit agreement,the new Prime Minister,Boris Johnson,was finally able to hold a general election on December 12.Brexit was the elections predominant issue,and a solution for it was foremost in voters minds.Johnson and his party emerged as the elections clear winners.Afterward,Johnson car

198、ried out his conception of the Brexit deal and led Britain out of the European Union on January 31,2020,as planned.The specter of a hard Brexitthat is,Britain exiting without an agreementwas forestalled.There is now a transition period until December 31,2020.During this time,Britain can negotiate an

199、 exit agreement with the European Union but will continue to be treated as an EU member.In principle,both sides are interested in a far-reaching free-trade agreement and very close relations in all policy areas,especially in foreign and security policy.Given the very tight time-frame and the British

200、 governments decision not to extend the transition period under any circumstances,the exit negotiations will be a historic challenge for both sides.In June 2019 the government formally amended the 2008 Cli-mate Change Act to commit to net zero emissions by 2050.Net zero is at the top of the energy a

201、genda.It is becoming increasingly important that measures be designed now to meet the ambitious target,which will help put Britain on the road to decarbonization.Italy In August 2019,18 months after the election,Italy experienced a government crisis.A pro-environment center-left coalition formed a n

202、ew government in September.The new governments energy policy aims to increase renewables generation(with particular emphasis on self-generation systems)and,as part of a Green New Deal,to phase out coal-fired power stations by 2025.In October the national regulatory agency presented a proposal for th

203、e transition to a fully liberalized electricity market for end-consumers.Regulated prices are currently scheduled to expire on July 1,2020.SwedenSwedens energy policy remains focused on the 2016 cross-party energy agreement that foresees a fully renewable electricity system over the long term.The ag

204、reement features a number of climate policies,including a target of 100 percent renewable electricity by 2040.The main policy instrument,the elcertificate market scheme,has resulted in substantial growth in wind power and the conversion of fossil fuel to biomass.Sweden will likely achieve its 2030 r

205、enewables target in the early 2020s.Anew government was formed in January 2019.The coalition agreement contains plans to revise eco-taxes.They include increased taxation of fossil-fueled CHP plants and a planned tax on waste incineration.The new regulatory period for electricity grids began on Janua

206、ry 1,2020.It is anticipated that unused discretionary investments from previous regulatory periods can be carried over to the new period for a certain level of investment.23Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolida

207、ted Financial Statements Other InformationEast-Central EuropeThe Czech government still needs to present a draft law to trans-pose the EU electricity market directive.The Czech Republics National Energy and Climate Plan(“NECP”)will chart the future course of its energy sector in the years ahead.In M

208、arch 2019 Slovakia held presidential elections in which Zuzana aputov was elected the new president.An amended law on support for renewables and high-efficiency cogeneration that introduces feed-in tariffs for new power producers as wellas the exemption of DSOs from the support mechanisms will impac

209、t E.ONs business in Slovakia.Municipal elections held in Hungary on October 13,2019,yielded significant gains for opposition parties.The incumbent mayor of Budapest,supported by the governing Fidesz party,lost to the opposition party candidate after nine years in office.It is unclear how the nationa

210、l government will cooperate with theopposition at the municipal level.The Hungarian government submitted its draft National Energy Strategy 2020 to parliament for approval.The strategy calls for Hungarys electricity sector to be 90 percent carbon-neutral by 2030 by adding more nuclear and renewables

211、 capacity,especially solar.A new Romanian government led by the National Liberal Party was formed on November 4 after parliaments vote of no confidence against the former Social Democratic government.It reinstated residential customers priority access to gas,to which the European Commission responde

212、d by opening infringe-ment proceedings regarding the countrys export ban.Business PerformanceE.ONs operating business delivered a positive performance in 2019.Sales of 41.5 billion were 11.4 billion above the prior-year figure.The increase resulted largely from the takeover of the innogy Group in Se

213、ptember 2019.Adjusted EBIT for the E.ON Group of 3.2 billion was 0.2 billion above the prior-year level and likewise above the range of 2.9to 3.1 billion forecast in the 2018 Annual Report.This is principally attributable to the closing of the innogy transaction.Additional earnings streams from the

214、innogy Group were partially offset by the absence of the Renewables segments businesses that were transferred to RWE.Adjusted net income of 1.5 billion was at the prior-year level and thus within the range of 1.4 to 1.6 billion forecast in the 2018 Annual Report.Earnings per share,which are based on

215、 adjusted net income,amounted to 0.67 in the reporting period(prior year:0.69).In addition,adjusted EBIT and adjusted net income were both within the forecast ranges that were adjusted in November 2019 owing to changes in E.ONs setup.In addition,our objective was to record a cash-conversion rate of

216、at least 80 percent.Cash-conversion rate is equal to operating cash flow before interest and taxes(4.4 billion)divided by adjusted EBITDA(5.6 billion).Our cash-conversion rate was therefore roughly 80 percent.Our ROCE was 8.4 percent,within our forecast range of 8 to 10 percent.Investments of 5.5 bi

217、llion were considerably above the prior-year figure of 3.5 billion and the 3.7 billion forecast for 2019in the E.ON 2018 Annual Report.The deviation is likewise attributable to the innogy transaction.Additional investments resulted primarily from the acquisition of innogy SE stock and 24Business Rep

218、ortEarnings SituationSalesE.ON recorded sales of 41.5 billion in 2019,about 11.4 billion more than the prior-year figure.The increase is primarily attrib-utable to the acquisition of the innogy Group in September 2019.In addition,the IFRS Interpretations Committee(“IFRS IC”)clarified the accounting

219、treatment of commodity futures trans-actions that are settled with physical delivery,that cannot beclassified as own-use contracts pursuant to IFRS 9,and that are accounted for as derivatives(failed-own-use contracts).E.ON has applied this change in accounting methods from the start of the 2019 fina

220、ncial year and adjusted the prior-year figures accordingly.The adjustments effects include volatility in reported sales(for more information,see Note 2 to the Con-solidated Financial Statements).Energy Networks sales were at the prior-year level.Customer Solutions sales increased by 1.3 billion.High

221、er power and gas sales volume in Germany was the primary factor.Sales also rose principally because of higher sales prices and sales volume in Italy,the Czech Republic,and Hungary.Substantially all of the Renewables segment was transferred toRWE in September 2019 as part of the innogy transaction.Co

222、nsequently,its sales declined by about 0.2 billion year on year to 1.6 billion.Sales at Non-Core Business declined significantly to 1.2 billion owing to the expiration of supply contracts and the transfer of minority stakes in nuclear power stations to RWE.Sales1,2 in millionsFourth quarterFull year

223、20192018+/-%20192018+/-%Energy Networks2,3142,355-28,8708,769+1Customer Solutions6,5916,286+523,27921,987+6innogy9,52810,444Renewables293541-461,5961,754-9Non-Core Business307411-251,1741,370-14Corporate Functions/Other178144+24622644-3Consolidation-1,238-1,169-6-4,501-4,440-1E.ON Group17,9738,568+1

224、1041,48430,084+381Includes the discontinued operations in the Renewables segment until September 18,2019.Sales from continuing operations amounted to 41 billion in 2019(prior year:29.4 billion).2Includes effects resulting from failed-own-use contracts;we adjusted the prior-year quarters accordingly(

225、see Note 2 to the Consolidated Financial Statements).from the innogy Group since the closing of its takeover by E.ON.By contrast,investments at the Renewables segment declined because substantially all of it was transferred to RWE.In Novem-ber 2019 E.ON adjusted its investment forecast to 6 billion.

226、This figure was not achieved especially because certain payments for the acquisition of additional shares in subsidiaries had to be recorded in cash provided by financing activities.Cash provided by operating activities of continuing and discon-tinued operations of 3 billion was at the prior-year le

227、vel.Acquisitions,Disposals,and Discontinued Operations in 2019In 2019 E.ON executed the following significant transactions and made the following reclassifications pursuant to IFRS 5.Note 4 to the Consolidated Financial Statements contains detailed information about them:Closure of the innogy takeov

228、er Transfer of substantially all of the renewables business and two of PreussenElektras minority stakes to RWE Transfer of PEG Infrastruktur AG(“PEGI”),the parent company of Nord Stream AG,into E.ONs Contractual Trust Arrangement(“CTA”)Reclassification of innogys sales business in the Czech Republic

229、 as a discontinued operation Reclassification of Tiszntli ramhlzati Zrt.as a disposal group.Cash provided by investing activities of continuing operations includes cash-effective disposal proceeds totaling 256 million in 2019(prior year:4,306 million).25Report of the Supervisory BoardStrategy and Ob

230、jectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other Informationcurrency-translation effects amounted to 1,775 million(prior year:1,626 million).Other operating expenses also include expenditures of 725 million resulting from the termination

231、,as part of the initial innogy purchase-price allocation,of own-use contracts recorded as liabilities.Income from companies accounted for under the equity method of 421 million was considerably above the prior-year figure of 269 million.Equity income from the stake in Enerjisa retim Santralleri A.wa

232、s 91 million above the prior-year level.Income also rose through the inclusion of innogys equity interests for the first time.Adjusted EBITIn 2019 adjusted EBIT in our core business surpassed the prior-year figure by 262 million.Energy Networks adjusted EBIT of 1,888 million was at the prior-year le

233、vel.An increase in adjusted EBIT in Germany and Sweden was partially offset by a decrease in East-Central Europe/Turkey.Adjusted EBIT at Customer Solutions decreased significantly(-100 million),particularly because of the new regulatory price caps and a smaller customer base in the United Kingdom.Th

234、e innogy segment recorded adjusted EBIT of 421 million from September 18 to December 31,2019.These earnings are principally attributable to innogys network business,primarily in Germany.As already described,substantially all of the Renewables segment was transferred to RWE in September 2019.Conseque

235、ntly,its adjusted EBIT declined by 174 million year on year.The E.ON Groups adjusted EBIT was 246 million above the prior-year figure.Its core business was characterized by the aforementioned items.Non-Core Businesss adjusted EBIT declined slightly.PreussenElektra was adversely affected by higher de

236、preciation charges,the transfer of minority stakes innuclear power stations to RWE,and longer plant downtimes.These factors were largely offset by higher earnings from the generation business in Turkey.Other Line Items from the Consolidated Statements of IncomeOwn work capitalized of 487 million(pri

237、or year:394 million)mainly reflected the capitalization of work in IT projects and network investments.The increase is mainly attributable to the inclusion of innogy.The aforementioned failed-own-use contracts also affect cost of materials as well as other operating income and expenses.See Note 2 to

238、 the Consolidated Financial Statements for more information.Other operating income rose by 315 million,from 5,334 million to 5,649 million.The increase resulted mainly from higher income from the termination,as part of the initial innogy pur-chase-price allocation,of own-use contracts of 755 million

239、 recorded as liabilities.By contrast,the sale of equity interests and securities declined by 456 million to 612 million.In 2019 this includes 390 million from the sale of PEG Infrastruktur AG,the parent company of Nord Stream AG.Income from the sale of equity interests of 42 million was lower than i

240、n the prior year(91 million).Costs of materials of 32,126 million were significantly above the prior-year level of 22,635 million.The increase is principally attributable to the acquisition of the innogy Group.Personnel costs of 4,101 million were 1,641 million above the figure of 2,460 million.The

241、innogy takeover is the main reason for the increase.This also resulted in higher expenditures for staff restructuring.Depreciation charges rose year on year,from 1,575 million to 2,502 million.The change mainly reflects the inclusion of innogy for the first time.The increase is also attributable to

242、initial appli-cation of IFRS 16 and the resulting depreciation of right-of-use assets.In the year under review,E.ON recorded impairment charges in particular at Energy Networks in Germany for decom-missioning costs of a gas storage facility and at Customer Solu-tions in the United Kingdom.Other oper

243、ating expenses increased by 54 percent,from 4,786 million to 7,355 million.In particular,expenditures relating to derivative financial instruments rose substantially,from 866 million to 2,270 million.Expenditures relating to 26Business ReportE.ON generates a large portion of its adjusted EBIT in ver

244、y stable businesses.Regulated,quasi-regulated,and long-term con-tracted businesses accounted for the overwhelming proportion of our adjusted EBIT in 2019.Our regulated business consists of operations in which revenues are largely set by law and based on costs.The earnings on these revenues are there

245、fore extremely stable and predictable.Our quasi-regulated and long-term contracted business consists of operations in which earnings have a high degree of predict-ability because key determinants(price and/or volume)are largely set for the medium to long term.Examples include the operation of indust

246、rial customer solutions with long-term supply agreements and the operation of heating networks.Our merchant activities are all those that cannot be subsumed under either of the other two categories.Net Income/LossIn 2019 E.ON recorded net income attributable to shareholders of E.ON SE of 1.6 billion

247、 and corresponding earnings per share of 0.68.In the prior year E.ON recorded net income of 3.2billion and earnings per share of 1.49.Pursuant to IFRS 5,income/loss from discontinued operations,net,is reported separately in the Consolidated Statements of Income and,for 2019 and the prior year,includ

248、es primarily the earnings from the discontinued operations at Renewables,which were deconsolidated effective September 18,2019.Alongside the operating earnings of discontinued operations,this figure contains items resulting from the deconsolidation.In this context,items previously recognized in equi

249、ty were recorded in income.This figure also includes the earnings from the transitional consolidation of Rampion wind farm following the reduction in E.ONs stake to 20 percent.Deconsolidation resulted in income of 0.8 billion.Earnings from innogys sales business in the Czech Republic are reported un

250、der this item as well.E.ONs tax expense was 53 million(prior year:46 million).E.ONs tax rate in 2019 was 7 percent(prior year:1 percent).In particular,the release of tax provisions and liabilities for prior years led to a lower tax rate in the year under review and in 2018.In addition,higher tax-fre

251、e income and/or income not subject to tax exposure reduced the tax rate in 2018.The improvement in financial results relative to the prior year mainly reflects positive earnings effects from the marking to market of securities,which were partially offset by negative Adjusted EBIT in millionsFourth q

252、uarterFull year20192018+/-%20192018+/-%Energy Networks463372+241,8881,844+2Customer Solutions8953+68313413-24innogy417421Renewables19238-92347521-33Corporate Functions/Other-73-107-153Consolidation-1-217-18Adjusted EBIT from core business987569+732,8692,607+10Non-Core Business4068-41366382-4Adjusted

253、 EBIT1,027637+613,2352,989+827Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other Information valuation effects relating to non-current provisions.Financial results also include a positive effec

254、t of 142 million resulting from the difference between the nominal and fair value of bonds issued by innogy and innogy Finance B.V.Net book gains in the 2019 financial year declined significantly.They consist primarily of effects resulting from the deconsolida-tion of PEGI,the parent company of Nord

255、 Stream.The prior-year figure included book gains on the disposal of E.ONs remaining Uniper stake,Hamburg Netz,E.ON Gas Sverige,and,overall,a book loss on the initial public offering of Enerjisa Enerji.In addi-tion,book gains on the sale of securities were below the prior-year figure.Restructuring e

256、xpenses were significantly higher than in the prior year and in 2019 consisted primarily of expenditures in conjunction with the acquisition of innogy.They also include expenditures for the restructuring measures instigated in Ger-many and,from the date of the acquisitions closing,at npower,innogys

257、U.K.sales business.A non-operating effect of-707 million resulted from derivative financial instruments in the 2019 financial year(prior year:+610 million).Negative items in 2019 resulted primarily from hedging against price fluctuations,in particular at Customer Solutions,and from the marking to ma

258、rket of derivatives at the innogy segment.The figure for 2018 was mainly attributable to derivative financial instruments in conjunction with contractual rights and obligations relating to the sale of E.ONs Uniper stake.In addition,non-operating earnings includes,in the line item“Effects from deriva

259、tive financial instruments,”all effects resulting from failed-own-use contracts(for more information,see Note 2 to the Consolidated Financial Statements).Net Income/Loss in millionsFourth quarterFull year2019201820192018Net income/loss1633691,8083,524Attributable to shareholders of E.ON SE1263031,56

260、63,223Attributable to non-controlling interests3766242301Income/Loss from discontinued operations,net26-116-1,064-286Income/Loss from continuing operations1892537443,238Income taxes-306-1525346Financial results32215554669Income/Loss from continuing operations before financial results and income taxe

261、s-853161,3513,953Income/Loss from equity investments-3-245844EBIT-882921,4093,997Non-operating adjustments1,1151101,526-1,521Net book gains(-)/losses(+)-3982-366-857Restructuring expenses6401281964Effects from derivative financial instruments633295707-610Impairments(+)/Reversals(-)2736127561Carryfor

262、ward of hidden reserves(-)and liabilities(+)from the innogy transaction113252Other non-operating earnings-146-260-161-179Reclassified businesses of Renewables1(adjusted EBIT)235300513Adjusted EBIT1,0276373,2352,989Impairments(+)/Reversals(-)64276645Scheduled depreciation and amortization7254141,9861

263、,475Reclassified businesses of Renewables1(scheduled depreciation and amortization,impairment charges and reversals)87271331Adjusted EBITDA1,8161,1655,5584,8401Deconsolidated effective September 18,2019.28In addition to the marking to market of derivatives,the adjust-ments include book gains and boo

264、k losses on disposals,certain restructuring expenses,other material non-operating income and expenses(after taxes and non-controlling interests),and interest expense/income not affecting net income,which consists of the interest expense/income resulting from non-operating effects.Other non-operating

265、 earnings and non-operating inter-est expense also include the subsequent valuation of hidden reserves and liabilities identified as part of the purchase-price calculation and allocation for the innogy transaction.In addition,adjusted net income includes the earnings(adjusted to exclude non-operatin

266、g effects)of the discontinued operations at Renewables,which were deconsolidated effective Septem-ber 18,2019,as if their disclosure and valuation had not been reclassified pursuant to IFRS 5.Pages 15 and 17 of the Com-bined Group Management Report and Notes 4 and 34 to the Consolidated Financial St

267、atements contain more information.In 2019 E.ON recorded impairment charges in particular at Customer Solutions in the United Kingdom,Energy Networks in Germany,and innogy.In the prior year E.ON recorded impairment charges primarily at Customer Solutions in the United Kingdom and E.ON Business Soluti

268、ons.Items resulting from the subsequent valuation of hidden reserves and liabilities as part of the preliminary purchase-price allocation and newly recorded items resulting from the valuation of finan-cial assets at the innogy segment are disclosed separately.The latter will be balanced out in subse

269、quent reporting periods.Other non-operating earnings were at the prior-year level.In 2019 they include,among other items,the positive effect of realized income from hedging transactions for certain currency risks.Adjusted Net IncomeLike EBIT,net income also consists of non-operating effects,such as

270、the marking to market of derivatives.Adjusted net income is an earnings figure after interest income,income taxes,and non-controlling interests that has been adjusted to exclude non-operating effects.Business ReportAdjusted Net Income in millionsFourth quarterFull year2019201820192018Income/Loss fro

271、m continuing operations before financial results and income taxes-853161,3513,953Income/Loss from equity investments-3-245844EBIT-882921,4093,997Non-operating adjustments1,1151101,526-1,521Reclassified businesses of Renewables1(adjusted EBIT)235300513Adjusted EBIT1,0276373,2352,989Net interest incom

272、e/loss-29-191-612-713Non-operating interest expense(+)/income(-)-26453-66174Reclassified businesses of Renewables1(operating interest expense(+)/income(-)-36-123-135Operating earnings before taxes7344632,4342,315Taxes on operating earnings-206-126-586-544Operating earnings attributable to non-contro

273、lling interests-169-54-316-221Reclassified businesses of Renewables1(taxes and minority interests on operating earnings)1144-45Adjusted net income3602971,5361,5051Deconsolidated as of September 18,2019.29Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined

274、 Non-Financial Report Consolidated Financial Statements Other InformationFinancial SituationE.ON presents its financial condition using,among other financial measures,economic net debt,debt factor,and operating cash flow.Finance StrategyOur finance strategy focuses on E.ONs capital structure.Ensurin

275、g that E.ON has unrestricted access to capital markets is at the forefront of this strategy.With our target capital structure we aim to sustainably secure astrong BBB/Baa rating.We manage E.ONs capital structure using debt factor,which isequal to economic net debt divided by adjusted EBITDA;itis the

276、refore a dynamic debt metric.Economic net debt includes not only financial liabilities but also provisions for pensions and asset-retirement obligations.In addition,at year-end 2018 it included the reclassified operations at Renewables that were deconsolidated effective September 18,2019,and the obl

277、igations in conjunction with PreussenElektras divested minority stakes.The low interest-rate environment continued.In some cases this led to negative real interest rates on asset-retirement obligations.As in prior years,provisions therefore exceeded the actual amount of asset-retirement obligations

278、at year-end 2019 without factoring in discounting and cost-escalation effects.This limits the relevance of economic net debt as a key figure.We want economic net debt to serve as a useful key figure that aptly depicts E.ONs debt situation.In the case of material provi-sions affected by negative real

279、 interest rates,we have therefore used the aforementioned actual amount of the obligations instead of the balance-sheet figure to calculate economic net debt since year-end 2016.Pursuant to IFRS valuation standards,innogys financial liabilities at the time of initial consolidation were recorded at t

280、heir fair value.This fair value is significantly higher than the original nomi-nal value because interest-rate levels have declined since innogys bonds were issued.The purchase-price allocation yielded a difference between the nominal value and the fair value,which results in additional liabilities

281、of 2.5 billion at year-end 2019.This amount will be recorded in financial earnings as a reduction in expenditures and spread out over the maturity period of the respective bonds.These balance-sheet and earnings effects donot alter the interest and principal payments.To manage economic net debt,we co

282、ntinue to use the nominal amount of financial liabilities,which deviates from the figure shown in E.ONs balance sheets.E.ON aims to reduce the debt factor to around 5 over the medium term.E.ONs debt factor at year-end 2019 of 7.1 was above our medium-term target of below 4.The informational value of

283、 this key figure at year-end 2019 is very limited,however,because following the closing of the innogy takeover it contains all of the relevant items of innogys debt but only a portion of its adjusted EBITDA,namely from the closure of the takeover to year-end 2019.Economic Net DebtCompared with the f

284、igure recorded at December 31,2018(16.6 billion),E.ONs economic net debt increased by 22.8billion to 39.4 billion.Economic net debt at the balance-sheet date mainly reflects special items.Debt rose in particular owing to the initial consol-idation of innogy operations.This was partially counteracted

285、 bythe deconsolidation of reclassified operations at Renewables and PreussenElektra that were still included in the figure at year-end 2018.In addition,the figure at the balance-sheet date includes cash-effective items relating to the innogy transaction(see pages 31 and 32 for more information).Prov

286、isions for pensions rose,in part because of significantly lower actuarial interest rates,which led to an increase in defined ben-efit obligations despite the positive development of plan assets.Economic net debt in the year under review was also affected by the initial application of IFRS 16(see the

287、 section entitled Special Events in the Reporting Period on page 17).The initial application of IFRS 16 does not have a material impact on E.ONs debt-bearing capacity,because operating lease relationships were already included in its calculation prior to the introduction of IFRS 16.30Business Report

288、was also carried out by our Dutch finance subsidiary,E.ON Inter-national Finance B.V.(“EIF”),under guarantee of E.ON SE and by innogy SE and innogy Finance B.V.under guarantee of innogy SE.In 2019 E.ON paid back in full maturities of 1.1 billion.E.ON issued new debt totaling 4 billion.With the excep

289、tion of a U.S.-dollar-denominated bond issued in 2008,all of E.ON SE and EIFs currently outstanding bonds were issued under a Debt Issuance Program(“DIP”).Similarly,innogy and innogy Finance B.V.bonds were issued under the innogy Groups DIP.A DIP simplifies a companys ability to issue debt to invest

290、ors in public and private placements in flexible time frames.E.ON SEs DIP was last updated in March 2019 with a total volume of 35 billion,of which about 11.8 billion was utilized atyear-end 2019.E.ON SE intends to renew the DIP in 2020.In addition to its DIP,E.ON has a 10 billion European Commercia

291、l Paper(“CP”)program and a$10 billion U.S.CP program under which it can issue short-term notes.At year-end 2019 E.ON had 50 million of CP outstanding(prior year:0).E.ON also has access to a five-year,3.5 billion syndicated credit facility,which was concluded on October 24,2019,and which includes two

292、 options to extend the facility,in each case for one year.The facility replaced two previously existing syndicated credit facilities:E.ON SEs 2.75 billion facility and innogy SEs Financial Liabilities in billionsDecember 3120192018Bonds124.69.0EUR15.64.0GBP7.63.8USD0.90.9JPY0.30.2Other currencies0.2

293、0.1Promissory notes0.00.1Commercial paper0.10.0Other liabilities4.81.6Total29.510.71Includes private placements.Funding Policy and InitiativesThe key objective of our funding policy is for E.ON to have access to a variety of financing sources at all times.We achieve this objective by using different

294、 markets and debt instruments to maximize the diversity of our investor base.E.ON issues bonds with tenors that give its debt portfolio a balanced maturity profile.Moreover,large-volume benchmark issues may in some cases be combined with smaller issues,private placements,and/or promissory notes.Furt

295、hermore,in 2019 E.ON for the first time issued Green Bonds and,going forward,intends to continue issuing a portion of its bonds as Green Bonds.External funding is generally carried out by E.ON SE,and the funds are subsequently on-lent in the Group.In the past,external funding Economic Net Debt in mi

296、llionsDecember 31,20192018Liquid funds3,6025,423Non-current securities2,3532,295Financial liabilities1-29,482-10,721FX hedging adjustment167-28Net financial position-23,360-3,031Provisions for pensions-7,201-3,261Asset-retirement obligations2-8,869-10,288Economic net debt-39,430-16,580Adjusted EBITD

297、A5,5584,840Debt factor7.13.41Bonds issued by innogy are recorded at their nominal value.The figure shown in the Consolidated Balance Sheets is 2.5 billion higher.2This figure is not the same as the asset-retirement obligations shown in the Consolidated Balance Sheet from continuing and discontinued

298、operations(10,571 million at December 31,2019;11,889 million at December 31,2018).This is because we calculate economic net debt in part based on the actual amount of the obligations.Reconciliation of Economic Net Debt in millionsDecember 3120192018Economic net debt-39,430-16,580Reclassified busines

299、ses of Renewables and PreussenElektra11,961Economic net debt(continuing operations)-39,430-14,6191Deconsolidated effective September 18,2019.31Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other

300、 Information10.08.06.04.02.0202020212022202320242025202620272028+Maturity Profile of Bonds Issued by E.ON SE,E.ON International Finance B.V.,innogy SE,and innogy Finance B.V.in billions At December 31,2019 2 billion facility.The credit margin is linked in part to the development of certain ESG ratin

301、gs,which gives E.ON financial incentives to pursue a sustainable corporate strategy.The ESG ratings are set by three renowned agencies:ISS ESG,MSCI ESG Research,and Sustainalytics.The facility serves as a reliable,ongoing general liquidity reserve for the E.ON Group and can be drawn on as needed.The

302、 credit facility is made available by 21 banks which constitute E.ONs core group of banks.In conjunction with the acquisition of innogy SE,on April 6,2018,E.ON originally secured a 5 billion acquisition facility,but in August 2018 partially cancelled the facility down to 1.75 billion.This credit fac

303、ility is undrawn and remains available to the Group.Alongside financial liabilities,E.ON has,in the course of its busi-ness operations,entered into contingencies and other financial obligations.These include,in particular,guarantees,obligations from legal disputes and damage claims,as well as curren

304、t and non-current contractual,legal,and other obligations.Notes 26,27,and 31 to the Consolidated Financial Statements contain more information about E.ONs bonds as well as liabilities,con-tingencies,and other commitments.E.ONs creditworthiness has been assessed by Standard&Poors(“S&P”)and Moodys wit

305、h long-term ratings of BBB and Baa2,respectively.The outlook for both ratings is stable.In both cases the ratings were based on the expectation that,over the near tomedium term,E.ON will be able to maintain a debt ratio com-mensurate with these ratings.S&Ps and Moodys short-term ratings are unchange

306、d at A-2 and P-2,respectively.E.ON will continue to take into account the trust of rating agen-cies,investors,and banks by means of a clear strategy and trans-parent communications and therefore holds events that include an annual informational meeting for its core group of banks.InvestmentsIn 2019

307、investments in our core business and in the E.ON Group as a whole were significantly above the prior-year level.E.ON invested about 3.8 billion in property,plant,and equipment and intangible assets(prior year:3 billion).Share investments totaled 1.7 billion versus 0.5 billion in the prior year.E.ON

308、SE Ratings Long termShort termOutlookMoodysBaa2P-2Stable Standard&PoorsBBBA-2StableInvestments in millions20192018+/-%Energy Networks1,6551,597+4Customer Solutions724637+14innogy878Renewables7221,037-30Corporate Functions/Other1,30586Consolidation1-3Investments in core business5,2853,354+58Non-Core

309、Business 207169+23E.ON Group investments5,4923,523+5632Business ReportEnergy Networks investments were 58 million above the prior-year level.Investments in Germany rose primarily because of new connections as well as replacements and upgrades.IT investments in Sweden were lower than in 2018.Investme

310、nts in East-Central Europe/Turkey were lower than in 2018,in particular because of the reassignment of investment projects in the Czech Republic between Customer Solutions and Energy Networks relative to the prior year.Customer Solutions invested 87 million more than in the prioryear.The increase re

311、sulted in part from the acquisition of Coromatic in Sweden.The aforementioned reassignment of investment projects in the Czech Republic was an additional reason for the increase in investments relative to the prior year.By contrast,investments in the United Kingdom declined,pri-marily because of low

312、er investments in smart meters.The innogy segments investments totaled 878 million from September 18 to December 31,2019.The biggest share of these funds went toward the expansion and upgrade of network infrastructure in Germany.Alongside maintenance,the focus was on the connection of distributed ge

313、nerating facilities and network expansion in conjunction with the energy transition.Investments at Renewables were 442 million below the prior-year figure.The reason is the departure of those of this segments businesses that were transferred effective September 18,2019,as part of the transaction wit

314、h RWE.Corporate Functions/Others investment rose significantly,in particular because of the innogy transaction.The 2019 figure primarily reflects expenditures for the completion of the public takeover offer and the acquisition of innogy stock on-market.Investments at Non-Core Business were 38 millio

315、n above the prior-year level.The 2019 figure consists in particular of expen-ditures by PreussenElektra in conjunction with the innogy trans-action and the acquisition of residual power output rights.The prior-year figure primarily reflects a capital increase at Enerjisa retim in Turkey,which is acc

316、ounted for using the equity method.Cash FlowCash provided by operating activities of continuing and discon-tinued operations before interest and taxes of 4.4 billion was 0.3 billion above the prior-year figure.Negative working capital the 2019 financial year was more than offset by the inclusion of

317、innogy for the first time.By contrast,cash provided by operating activities of continuing and discontinued operations was only slightly below the prior-year figure due to higher interest and tax payments.Cash provided by investing activities of continuing and discon-tinued operations totaled-5.8 bil

318、lion versus+1 billion in the prior year.The sale of the remaining stake in Uniper SE in the prior year was the main reason,accounting for 3.8 billion of the change.In particular,the acquisition of innogy stock reduced cash provided by investing activities in 2019.The purchase and sale of securities

319、and the change in financial receivables and restricted funds resulted in net cash outflow of 0.6 billion in the 2019 financial year compared with net cash inflow of 0.2 billion in the prior year.Cash provided by financing activities of continuing and discon-tinued operations of+0.8 billion was 3.4 b

320、illion above the prior-year figure of-2.6 billion.This primarily reflects the repayment of bonds in 2018 and the issuance of bonds in 2019.The increase in the dividend payout from 0.9 billion in 2018 to 1.1 billion in 2019 was a countervailing factor.Cash Flow1 in millions20192018Operating cash flow

321、2,9652,853Operating cash flow before interest and taxes24,4074,087Cash provided by(used for)investing activities-5,8201,011Cash provided by(used for)financing activities792-2,6371From continuing and discontinued operations.2Excludes the innogy business in the Czech Republic reclassified pursuant to

322、IFRS 5.33Report of the Supervisory BoardStrategy and Objectives Combined Group Management Report Combined Non-Financial Report Consolidated Financial Statements Other InformationAsset SituationE.ONs asset situation in particular reflects the takeover of innogy operations.Total assets and liabilities

323、 of roughly 98.6 billion were 44.2 billion,or 81 percent,above the figure from year-end 2018.Non-current assets of 76.4 billion were 45.6 billion higher than at year-end 2018.The takeover led mainly to an increase in property,plant,and equipment in the amount of 17.8 billion.In addition,E.ON recorde

324、d preliminary goodwill of 15.5 billion in conjunction with the innogy takeover.Current assets declined by 1.3 billion,or 6 percent,from 23.4 billion to around 22.1 billion.This principally reflects the departure of the Renewables segment from assets held for sale,which reduced current assets by 11.3

325、 billion.A 8.9 billion increase in operating receivables and other operating assets had a countervailing effect.This figure includes 6.6 billion in operating receivables and other operating assets taken over from innogy.E.ONs equity ratio(including non-controlling interests)at year-end 2019 was 13 p

326、ercent,which is 3 percentage points lower than at year-end 2018.A capital increase of subscribed capital was conducted in September 2019.Under preponderant utilization of authorized capital,E.ON increased its share capital from 2,201,099,000 to2,641,318,800 through the issuance of 440,219,800 new re

327、gistered no-par-value shares against contributions in kind.The 3.5 billion change in capital reserves results from the valuation in connection with the capital increase against contributions in kind of innogy SE stock received in excess of the nominal value of the new E.ON SE stock that was issued(4

328、40,219,800).Equity attributable to E.ON SE shareholders was 9.1 billion at year-end 2019.Equity attributable to non-controlling interests amounted to 4 billion.Non-current debt almost doubled relative to year-end 2019.Ason the asset side,the increase reflects the inclusion of innogy operations.In pa

329、rticular,bonds rose by 17.1 billion,of which about 14.3 billion is attributable to innogy.In addition,the initial consolidation of innogy companies and the reduction in actuarial interest rates let to an increase in provisions for pensions.Current debt of 26 billion was 70 percent above the figure a

330、t year-end 2018.As part of the transaction,E.ON took on innogy debt in the amount of 14.5 billion.This increase was partially offset by the deconsolidation of the Renewables segments debt of 2.7 billion that had previously been reclassified pursuant toIFRS 5.Consolidated Assets,Liabilities,and Equit

331、y in millionsDec.31,2019%Dec.31,2018%Non-current assets76,4447830,88357Current assets22,1222223,44143Total assets98,56610054,324100Equity13,085138,51816Non-current liabilities59,4646030,54556Current liabilities26,0172715,26128Total equity and liabilities98,56610054,324100Additional information about

332、 E.ONs asset situation is contained in Notes to the Consolidated Financial Statements.34Business ReportFollowing the clearance issued by the European Commission and the relevant antitrust agencies on September 18,2019,E.ONs earnings,financial,and asset situation in the 2019 financial year was influe

333、nced primarily by the agreement reached between E.ON and RWE on March 12,2018,to transfer business operations.The change in financial assets mainly reflects the addition of the 76.8-percent majority stake in innogy SE and its contribution to a subsidiary.The repayment of the procurement costs and the portion of the distribution of net income from E.ON Beteiligungen GmbH that was not recorded in ea