Yahoo Finance E.ON SE (PNK:EONGY) Q3 2023 Earnings Call Transcript
E.ON SE (PNK:EONGY) Q3 2023 Earnings Call Transcript November 8, 2023
Iris Eveleigh: Hello, everyone. The analysts and investors, welcome to our Nine Months Results Call. Thank you for taking the time to join us. Today I'm here together with our CFO, Marc Spieker, who will give an update on our financials. As always, we will leave enough room for your questions after the presentation. With that, over to you Marc.
Marc Spieker: Thank you, Iris, and a warm welcome to everyone from my side as well. With our nine results, we continue to deliver strong earnings in both our businesses Energy Networks and Customer Solutions. On top, we have progressed very well on the execution of our CapEx acceleration plan. Let me take you through the highlights of the third quarter step-by-step. First, we are successfully ramping up our delivery capacity in our Energy Networks business. In the first nine months of this year, we invested 40% more year-over-year. And with that, we are ahead of our own delivery targets for the first three quarters. This outperformance enables us to increase our target for the full year. We now expect to invest €300 million more in our Energy Networks business compared to our originally communicated target.
An overhead view of a powerful electricity transmission tower with in motion cables.
More importantly, this achievement sends a very strong signal. We are ready to scale up our CapEx program even further and meaningfully in the coming years, if regulatory conditions set the right economic incentives. Second, organic growth and operational excellence have been the cornerstones of our strong earnings delivery also this year. The solid execution substantially derisks the delivery also of our midterm targets. Third, we grow based on an increasingly healthy balance sheet. As promised in our H1 call, we managed to lower our economic net debt to around €34 billion in the third quarter based on seasonally strong quarterly operating cash flow. Our strong balance sheet provides one of the preconditions for further organic investment acceleration in the future.
Finally, we confirm our 2023 earnings outlook, while increasing our CapEx guidance. We keep a cautious stance on our assumptions for the remaining winter months or maybe I should say weeks, maintaining a sizable earnings buffer. For our investors, this means we will deliver financially whatever comes. And if nothing comes, we will deliver more. Let us now look at the details of our nine months earnings on Page 3. Our adjusted EBITDA came in at €7.8 billion, roughly €2.5 billion above the prior year's nine-month core EBITDA. In our Energy Networks business, growth came mainly from CapEx-driven RAB expansion in all countries. Additionally, in Germany, we're still seeing temporary upside from lower-than-expected redispatch costs and other timing effects.
As explained in the past, all of these effects economically neutral will turn back over the future years as explained. In Europe, we observed the continued recovery of network losses, which has been only partly offset by lower-than-expected volumes in some of our Central Eastern European markets. In the Customer Solutions business, we achieved an adjusted EBITDA growth of around €1.6 billion. This significant year-over-year increase contains both recurring and non-recurring elements. When it comes to the recurring effects, we observed an improved market environment throughout Europe. Our fast adaptation to volatile commodity markets, including our energy procurement optimization activities is changing the way we operate in retail. Supported by churn rates that remain well below precrisis levels in most of our markets and a slower market reopening our nine-month EBITDA looks distinctly strong.
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