OREANDA-NEWS. “We intend to undertake the largest transaction of Europe’s recent industrial history. It would create nothing less than a new E.ON, a company fully dedicated to the energy future. And at the same time we’re setting Uniper on a good course of its own.” These are the words E.ON CEO Johannes Teyssen used at the company’s Annual Shareholders Meeting today in Essen to describe the idea behind E.ON’s reorganization.

Goal: approval by at least 75 percent of shareholders

Teyssen asked shareholders to approve the spinoff of Uniper, which operates the Group’s conventional energy business, as an independent company. This requires a majority of at least 75 percent of the share capital represented at the time of the vote, which will take place later today after a comprehensive discussion. If the necessary majority is reached, E.ON intends to spin off a 53.35-percent stake in Uniper to its shareholders.

More options for shareholders

The spinoff of Uniper will give shareholders additional options: when it takes effect, each E.ON shareholder will remain a co-owner of E.ON but will also receive one Uniper share for each ten E.ON shares. Shareholders can then decide whether they wish to retain their E.ON and Uniper shares or modify their portfolio. With greater flexibility to manage their assets, they can opt to place their faith in the future performance of E.ON, Uniper, or both companies. E.ON and Uniper will also gain greater room for maneuver: they can focus entirely on their respective very different markets.

Two companies for two energy worlds

The new E.ON focuses on the new energy world and has three core businesses: energy networks, customer solutions, and renewables. These three businesses create an optimal opportunity-and-risk profile, combining the stable earnings of the network business with growth opportunities in customer solutions and renewables. “This setup has a clear business logic and also ensures an optimal opportunity-and-risk profile, since it combines the stable earnings of the network business with growth opportunities in customer solutions and renewables. Together, these three businesses form a balanced and solid foundation from which we intend to tap the many opportunities for creating lasting value and successful growth,” Teyssen said.

Focus on customer orientation

Teyssen spoke primarily about the company’s new focus on the new world of distributed-energy solutions: “I’m firmly convinced that E.ON has every chance to play a key role in shaping this other, new future of energy in Germany, in Europe, and beyond. With local energy networks that serve as a smart platform for the new energy world. With more and increasingly affordable electricity from renewable sources. And with customer solutions that make it possible for households, companies, and communities to have an individually tailored, digitally controlled energy supply. E.ON adopts a radically customer-centric perspective and is committed to partnering with customers to design an affordable, efficient, and sustainable energy world. Our ambition is to improve people’s lives.”

First quarter of 2016 characterized by one-off effects

E.ON’s business environment has deteriorated further in 2016. Nevertheless, the company’s first-quarter results were in line with expectations owing to one-off effects. EBITDA increased from €2.8 billion to €3.1 billion; underlying net income rose to €1.3 billion. The earnings improvement was predominantly attributable to a nonrecurring positive effect: in late March Uniper and Gazprom agreed to new terms for long-term gas supply contracts. This enabled E.ON to release provisions, which it recorded in income in the first quarter. Without this effect, E.ON’s earnings would have been slightly below the figure from the first quarter of the prior year. Factoring in this effect, E.ON expects its full-year 2016 EBITDA to be between €6.4 and €6.9 billion and its underlying net income to be between €1.5 and €1.9 billion.