Q2 2026 E.ON SE Earnings Call

August 12, 2026

Speaker #1: Hello everyone, and welcome to our H1 2026 earnings call. I'm here with Leo and Nadia, who will present our half-year results. As with every occasion, we will leave enough room at the end for your questions. With that, I hand over to you, Leo.

Iris Eveleigh: Hello everyone, and welcome to our H1 2026 earnings call. I am here with Leo and Nadia, who will present our half-year results. As with every occasion, we will leave enough room at the end for your questions. With that, I hand over to you, Leo.

Speaker #2: Thank you, Iris. A warm welcome to all of you, also from my side. Today, again, we have an overall simple message, and what you are actually used to from E.ON.

[Company Representative] (E.ON): Thank you, Iris. A warm welcome to all of you also from my side. Today, again, we have an overall simple message and what you are actually used to from E.ON. We keep delivering our operational and financial promises, and the momentum and outlook for electrification and grid infrastructure remains positive. First, we have strong H1 results. We are fully on track to deliver our full-year 2026 guidance. Second, grid capacity is the key enabler for the next phase of the energy transition. Rising demand from changing customer behavior, renewables, batteries, data centers, puts especially the distribution grid at the center of the energy transition. A positive for E.ON. Third, operational excellence is a prerequisite for sustainable growth at scale. Our standardization, digitization, and innovation measures enable efficient CapEx deployment and higher grid utilization, which supports an efficient system and therefore an affordable electrification. Again, a positive for us.

Leo Birnbaum: Thank you, Iris. A warm welcome to all of you also from my side. Today, again, we have an overall simple message and what you are actually used to from E.ON. We keep delivering our operational and financial promises, and the momentum and outlook for electrification and grid infrastructure remains positive. First, we have strong H1 results. We are fully on track to deliver our full-year 2026 guidance. Second, grid capacity is the key enabler for the next phase of the energy transition. Rising demand from changing customer behavior, renewables, batteries, data centers, puts especially the distribution grid at the center of the energy transition. A positive for E.ON. Third, operational excellence is a prerequisite for sustainable growth at scale. Our standardization, digitization, and innovation measures enable efficient CapEx deployment and higher grid utilization, which supports an efficient system and therefore an affordable electrification. Again, a positive for us.

Speaker #2: We keep delivering on our operational and financial promises, and the momentum and outlook for electrification in grid infrastructure remain positive. So first, we have strong H1 results.

Speaker #2: We are fully on track to deliver our full-year 2026 guidance. Second, grid capacity is the key enabler for the next phase of the energy transition. Rising demand from changing customer behavior, renewables, batteries, and data centers puts the distribution grid especially at the center of the energy transition.

Speaker #2: A positive for E.ON. Third, operational excellence is a prerequisite for sustainable growth at scale. Our standardization, digitization, and innovation measures enable efficient capital deployment and higher grid utilization.

Speaker #2: Which supports an efficient system, and therefore, an affordable electrification—again, a positive for us. And fourth, policy direction is shifting from target setting to actual implementation, supporting the outlook for our growth case.

[Company Representative] (E.ON): Fourth, policy direction is shifting from target setting to actual implementation, supporting the outlook for our growth case. On my first messages, a few details. H1 results came in strongly with an adjusted EBITDA of EUR 5.4 billion and an adjusted net income of EUR 1.9 billion. CapEx momentum continued with investments substantially exceeding depreciations. As always, Nadia will walk you through later through the details of our financial performance. As usual also, let me now point out a few examples of our operation delivery in the last month. In our Energy Networks business, we connected additional 5 gigawatts of renewables to the E.ON grids in the first 6 months of this year in Germany, and we further accelerated the smart meter rollout up 25% over the same period. By the way, the expansion of renewables is not limited to Germany.

Leo Birnbaum: Fourth, policy direction is shifting from target setting to actual implementation, supporting the outlook for our growth case. On my first messages, a few details. H1 results came in strongly with an Adjusted EBITDA of EUR 5.4 billion and an adjusted net income of EUR 1.9 billion. CapEx momentum continued with investments substantially exceeding depreciations. As always, Nadia will walk you through later through the details of our financial performance. As usual also, let me now point out a few examples of our operation delivery in the last month. In our Energy Networks business, we connected additional 5GW of renewables to the E.ON grids in the first six months of this year in Germany, and we further accelerated the smart meter rollout up 25% over the same period. By the way, the expansion of renewables is not limited to Germany.

Speaker #2: So, on my first measures, messages, a few details. H1 results came in strongly, with an adjusted EBITDA of €5.4 billion and an adjusted net income of €1.9 billion.

Speaker #2: CapEx momentum continued, with investment substantially exceeding depreciations. And as always, Nadia will walk you through the details of our financial performance later. As usual, let me now point out a few examples of our operational delivery in the last month.

Speaker #2: In our Energy Networks business, we connected an additional 5 gigawatts of renewables to the E.ON grids in the first six months of this year in Germany.

Speaker #2: And we further accelerated the smart meter rollout, up 25% over the same period. And by the way, the expansion of renewables is not limited to Germany.

Speaker #2: We had a similar number outside Germany also connected to our grids. In our energy retail business, our bidirectional charging product for electric vehicles, which we offer together with BMW, won an energy award in the category 'Innovative Energy Infrastructure Projects.'

[Company Representative] (E.ON): We had a similar number outside Germany also connected to our grids. In our Energy Retail business, our bidirectional charging product for electric vehicles, which we offer together with BMW, won an energy award in the category Innovative Energy Infrastructure Projects. The product marks the first commercial offering for end customers in Germany to integrate vehicles as steerable components into the energy market. Or said differently, we turn household flexibility into a scalable grid asset. On my second message, the rising demand for grid connections from further electrifications, connection of renewables, batteries, and data centers, highlights the progressing need to expand, modernize, and reinforce the power distribution grid. It is all, again, it is a clear positive for E.ON. Energy security objectives to achieve geopolitical independence from fossil fuels, accelerate and broaden the electrification demand, and add to the energy transition objectives. We see that also on the European legislative scale.

Leo Birnbaum: We had a similar number outside Germany also connected to our grids. In our Energy Retail business, our bidirectional charging product for electric vehicles, which we offer together with BMW, won an energy award in the category Innovative Energy Infrastructure Projects. The product marks the first commercial offering for end customers in Germany to integrate vehicles as steerable components into the energy market. Or said differently, we turn household flexibility into a scalable grid asset. On my second message, the rising demand for grid connections from further electrifications, connection of renewables, batteries, and data centers, highlights the progressing need to expand, modernize, and reinforce the power distribution grid. It is all, again, it is a clear positive for E.ON. Energy security objectives to achieve geopolitical independence from fossil fuels, accelerate and broaden the electrification demand, and add to the energy transition objectives.

Speaker #2: And the product marks the first commercial offering for end customers in Germany to integrate vehicles as steerable components into the energy market. Or, said differently, we turn household flexibility into a scalable grid asset.

Speaker #2: On my second message, the rising demand for grid connections from further electrifications connection of renewables, batteries, and data centers highlights the progressing need to expand modernize and reinforce the power distribution grid.

Speaker #2: It's all, again, a clear positive for E.ON. Energy security objectives to achieve geopolitical independence from fossil fuels accelerate and broaden electrification demand and add to the energy transition objectives. We see that also on the European legislative scale.

Leo Birnbaum: We see that also on the European legislative scale.

Speaker #2: But while the first phase of the energy transition was about building renewable generation, the second phase is about integrating it. This means ensuring that every kilowatt-hour produced can actually be used.

[Company Representative] (E.ON): But whilst the first phase of the energy transition was about building renewable generation, the second phase is about integrating it, which means ensuring that every kilowatt hour produced can actually be used. That is a different task. It is more complex, more decentralized, more digital, and it puts the distribution grid at the center of the energy transition. Let me give you two examples which illustrate the continuously growing demand for network connections. Let me start again with battery storage. Requests across our German business for battery storage connections increased by more than 30% in the H1 of this year from an already very high base. In this very period alone, we have committed 10 gigawatts of additional battery capacity to be connected to our grids. This lifts our total commitments to 26 gigawatts, around one quarter of Germany's peak load.

Leo Birnbaum: But whilst the first phase of the energy transition was about building renewable generation, the second phase is about integrating it, which means ensuring that every kilowatt hour produced can actually be used. That is a different task. It is more complex, more decentralized, more digital, and it puts the distribution grid at the center of the energy transition. Let me give you two examples which illustrate the continuously growing demand for network connections. Let me start again with battery storage. Requests across our German business for battery storage connections increased by more than 30% in the H1 of this year from an already very high base. In this very period alone, we have committed 10 gigawatts of additional battery capacity to be connected to our grids. This lifts our total commitments to 26 gigawatts, around one quarter of Germany's peak load.

Speaker #2: And that is a different task. It's more complex, more decentralized, more digital. And it puts the distribution center, a distribution grid, at the center of the energy transition.

Speaker #2: Let me give you two examples which illustrate the continuously growing demand for network connections. Let me start again with battery storage. Requests across our German business for battery storage connections increased by more than 30% in the first half of this year, from an already very high base.

Speaker #2: In this very period alone, we have committed 10 gigawatts of additional battery capacity to be connected to our grids. This lifts our total commitments to 26 gigawatts.

Speaker #2: Around one quarter of Germany's peak load. As a second example, changing customer behaviors are also supporting demand for grid infrastructure. German EV registrations are up 50%, and heat pump applications are up around 35% year over year.

[Company Representative] (E.ON): As a second example, changing customer behaviors also supporting demand for grid infrastructure. German EV registrations are up 50% and heat pumps applications around 35% year over year, driven by continued geopolitical uncertainty and improving economics of such solutions for our customers. The economics are becoming increasingly compelling. EVs already offer an advantage in total cost of ownership of around 13%, and heat pumps can reduce heating costs by up to 19%. This brings me to my third message. Operational excellence is a prerequisite for sustainable growth, and E.ON is all focused on delivering that. Considering the scale of the required infrastructure, investments for electrifications, the necessary grid build-out needs to be executable and efficient to ensure that the energy transition stays affordable. The task is to manage execution on an industrial scale within a complex system and with efficient use of the capital and the resources.

Leo Birnbaum: As a second example, changing customer behaviors also supporting demand for grid infrastructure. German EV registrations are up 50% and heat pumps applications around 35% year over year, driven by continued geopolitical uncertainty and improving economics of such solutions for our customers. The economics are becoming increasingly compelling. EVs already offer an advantage in total cost of ownership of around 13%, and heat pumps can reduce heating costs by up to 19%. This brings me to my third message. Operational excellence is a prerequisite for sustainable growth, and E.ON is all focused on delivering that. Considering the scale of the required infrastructure, investments for electrifications, the necessary grid build-out needs to be executable and efficient to ensure that the energy transition stays affordable. The task is to manage execution on an industrial scale within a complex system and with efficient use of the capital and the resources.

Speaker #2: Driven by continued geopolitical uncertainty and improving economics of such solutions for our customers. The economics are becoming increasingly compelling. EVs already offer an advantage in total cost of ownership of around 13%, and heat pumps can reduce heating costs by up to 19%.

Speaker #2: This brings me to my third message: operational excellence is a prerequisite for sustainable growth, and E.ON is fully focused on delivering that. Considering the scale of the required infrastructure investments for electrification, the necessary grid build-out needs to be executable and efficient to ensure that the energy transition stays affordable.

Speaker #2: And this task—the task is to manage execution on an industrial scale, within a complex system, and with efficient use of capital and resources.

Speaker #2: And that requires consistent standardization, process optimization, digitization, and innovative ideas. We have put our focus exactly on these aspects. We operate in a complex system, and the scale of the digital transformation and process optimization is significant.

[Company Representative] (E.ON): That requires consistent standardization, process optimization, digitization, and innovative ideas. We have put our focus exactly on these aspects. We operate in a complex system, and the scale of the digital transformation and process optimization is significant. This means continuous optimization and learning remain integral part of the execution process, and let me share a few examples here as well. Scarce grid connection capacity requires a more efficient allocation approach. Some of our regional DSOs are working intensively on a new pilot project. They look for ways how connection capacities can be allocated in a more targeted and system-serving approach for connection requests with large power consumption needs. We will communicate in more detail about this approach very soon. For batteries, our flexible connection agreements enable faster connections while aligning storage operation with actual grid conditions.

Leo Birnbaum: That requires consistent standardization, process optimization, digitization, and innovative ideas. We have put our focus exactly on these aspects. We operate in a complex system, and the scale of the digital transformation and process optimization is significant. This means continuous optimization and learning remain integral part of the execution process, and let me share a few examples here as well. Scarce grid connection capacity requires a more efficient allocation approach. Some of our regional DSOs are working intensively on a new pilot project. They look for ways how connection capacities can be allocated in a more targeted and system-serving approach for connection requests with large power consumption needs. We will communicate in more detail about this approach very soon. For batteries, our flexible connection agreements enable faster connections while aligning storage operation with actual grid conditions.

Speaker #2: This means continuous optimization and learning remain an integral part of the execution process. And let me share a few examples here as well. SCARS grid connection capacity requires a more efficient allocation approach.

Speaker #2: Some of our regional DSOs are working intensively on a new pilot project. They believe capacities can be allocated in a more targeted and system-serving approach.

Speaker #2: For connection requests with large power consumption needs, we will communicate in more detail about this approach very soon. For batteries, our flexible connection agreements enable faster connections while aligning storage operation with actual grid conditions.

Speaker #2: This is important, as batteries need to be connected in a controlled, system-serving way. Without prioritization, local signals, and the consideration of grid constraints, they can also block capacity for years.

[Company Representative] (E.ON): This is important as batteries need to be connected in a controlled system-serving way. Without prioritization, local signals, and the consideration of grid constraints, they can also block capacity for years. Therefore, we have developed a pilot concept for a flexible connection agreement together with our partner, ECO STOR, and we are now rolling it out across our German network operators during 2026. What this shows you that innovation can also happen in the way that we actually run our processes, and obviously this needs support also from the regulator and from the legislator. We are doing even more. We are also harmonizing and modernizing our network control systems across our German grid companies. System operation is the digital brain of the grid.

Leo Birnbaum: This is important as batteries need to be connected in a controlled system-serving way. Without prioritization, local signals, and the consideration of grid constraints, they can also block capacity for years. Therefore, we have developed a pilot concept for a flexible connection agreement together with our partner, ECO STOR, and we are now rolling it out across our German network operators during 2026. What this shows you that innovation can also happen in the way that we actually run our processes, and obviously this needs support also from the regulator and from the legislator. We are doing even more. We are also harmonizing and modernizing our network control systems across our German grid companies. System operation is the digital brain of the grid.

Speaker #2: Therefore, we have developed a pilot concept for a flexible connection agreement together with our partner Ecostore, and we are now rolling it out across our German network operators during 2026.

Speaker #2: What this shows you is that innovation can also happen in the way that we actually run our processes, and obviously, this needs support also from the regulator and from the legislator.

Speaker #2: But we are doing even more. We are also harmonizing and modernizing our network control systems across our German grid companies. System operation is the digital brain of the grid.

[Company Representative] (E.ON): A standardized and smarter SCADA landscape enables us to make faster, more secure, less dependent operations without external providers, and we are better able to scale new functionalities. The first companies will go live on the new system starting January 2027. At the same time, we are making our grids more observable and more controllable. In Germany, we have already exceeded 1.2 million installed intelligent metering systems, and we are operating more than 30,000 smart secondary substations. The one gives us visibility on the low voltage, the other one on the medium voltage. With this, we are on track to reach 20% controllability in medium voltage by year-end and already have more than 20% observability in the low voltage area. Why does this matter?

Leo Birnbaum: A standardized and smarter SCADA landscape enables us to make faster, more secure, less dependent operations without external providers, and we are better able to scale new functionalities. The first companies will go live on the new system starting January 2027. At the same time, we are making our grids more observable and more controllable. In Germany, we have already exceeded 1.2 million installed intelligent metering systems, and we are operating more than 30,000 smart secondary substations. The one gives us visibility on the low voltage, the other one on the medium voltage. With this, we are on track to reach 20% controllability in medium voltage by year-end and already have more than 20% observability in the low voltage area. Why does this matter?

Speaker #2: A standardized and smarter SCADA landscape enables us to make faster, more secure, and less dependent operations without external providers, and we are better able to scale new functionalities.

Speaker #2: The first companies will go live on the new system starting January 2027. At the same time, we're making our grids more observable and more controllable.

Speaker #2: In Germany, we have already exceeded 1.2 million installed intelligent metering systems. And we are operating more than 30,000 smart secondary substations. The one gives us visibility on the low voltage, the other one on the medium voltage.

Speaker #2: With this, we are on track to reach 20% controllability in medium voltage by year-end, and already have more than 20% observability in the low voltage area.

Speaker #2: And why does this matter? Because only if we digitize across all voltage levels and measure real utilization can we use all available capacity efficiently before building new lines.

[Company Representative] (E.ON): Because only if we digitize across all voltage levels and measure real utilization, we can use all available capacity efficiently before building new lines or new substations or new transformers. Our analysis platform, GridLens, which we built, makes this tangible. It shows actual and historic grid utilization and helps us to allocate CapEx where it's really needed. In our Energy Retail business, our connected assets under management have doubled over the last 6 months, supported by more than 30 live partnerships. Flex propositions constantly grow across 6 markets, and this expands our installed asset base and creates a foundation for future flexibility services and additional value creation so that also our customers can benefit from the energy transition. This brings me to my final message. Policy focus is shifting from setting targets to actual implementations, and this creates a supportive outlook for our growth case, which again, is a positive.

Leo Birnbaum: Because only if we digitize across all voltage levels and measure real utilization, we can use all available capacity efficiently before building new lines or new substations or new transformers. Our analysis platform, GridLens, which we built, makes this tangible. It shows actual and historic grid utilization and helps us to allocate CapEx where it's really needed. In our Energy Retail business, our connected assets under management have doubled over the last 6 months, supported by more than 30 live partnerships. Flex propositions constantly grow across 6 markets, and this expands our installed asset base and creates a foundation for future flexibility services and additional value creation so that also our customers can benefit from the energy transition. This brings me to my final message. Policy focus is shifting from setting targets to actual implementations, and this creates a supportive outlook for our growth case, which again, is a positive.

Speaker #2: Or new substations or new transformers. Our analysis platform, GridLens, which we built, makes this tangible. It shows actual and historic grid utilization and helps us to allocate CapEx where it's really needed.

Speaker #2: In our energy retail business, our connected assets under management have doubled over the last six months, supported by more than 30 live partnerships. Flex propositions constantly grow across six markets, and this expands our installed asset base and creates a foundation for future flexibility services and additional value creation, so that our customers can also benefit from the energy transition.

Speaker #2: This brings me to my final message. Policy focus is shifting from setting targets to actual implementation, and this creates a supportive outlook for our growth case—which again is a positive.

Speaker #2: A recent survey conducted by our E.ON Foundation showed that European societies support the energy transition, but they have clear expectations: it also needs to be affordable, reliable, and executable—not only sustainable.

[Company Representative] (E.ON): A recent survey conducted by our E.ON Foundation showed that European societies support the energy transition, but they have clear expectations. It also needs to be affordable and reliable and executable, not only sustainable. The recent policy packages on the European and on the national scale are pointing in this direction. On the European level, the EU Grids Package puts faster permitting procedures, stronger recognition of grids as critical infrastructure, and clearer rules for objective and transparent prioritization of connections requests into the focus. We think that this is the right approach. Efficient grids are the precondition for further electrification, integration of renewables, and security of supply. The EU Electrification Action Plan, published this summer, targets a doubling in the share of electricity and final energy consumption from today, 23% to 46% by 2040.

Leo Birnbaum: A recent survey conducted by our E.ON Foundation showed that European societies support the energy transition, but they have clear expectations. It also needs to be affordable and reliable and executable, not only sustainable. The recent policy packages on the European and on the national scale are pointing in this direction. On the European level, the EU Grids Package puts faster permitting procedures, stronger recognition of grids as critical infrastructure, and clearer rules for objective and transparent prioritization of connections requests into the focus. We think that this is the right approach. Efficient grids are the precondition for further electrification, integration of renewables, and security of supply. The EU Electrification Action Plan, published this summer, targets a doubling in the share of electricity and final energy consumption from today, 23% to 46% by 2040.

Speaker #2: And the recent policy packages on the European and on the national scale are pointing in this direction. On the European level, the EU Grids Package puts faster permitting procedures, stronger recognition of grids as critical infrastructure, and clearer rules for objective and transparent prioritization of connection requests into focus.

Speaker #2: And we think that this is the right approach. Efficient grids are the precondition for further electrification, integration of renewables, and security of supply. The EU Electrification Action Plan published this summer targets a doubling in the share of electricity in final energy consumption from today's 23% to 46% by 2040.

Speaker #2: Even if those targets are not read as literal targets, they are also not legislative. They can be seen as a signpost for the desired direction of travel and are clearly supportive for our infrastructure business on the electricity side.

[Company Representative] (E.ON): Even if those targets are not read as literal targets, they are also not legislative, they can be seen as a signpost for the desired direction of travel and clearly supportive for our infrastructure business on the electricity side. The same objectives can be seen in Germany. The German Grid Package contains provisions for capacity-restricted network areas and active grid capacity management instead of the current first come, first served logic. The distribution grid package strengthens the emphasis on acceleration of permitting processes for grid build-out. The amendment of the Renewable Energy Law targets to move from pure volume growth to a stronger market integration of PV and a shift in support mechanisms towards systems efficiency, cost-effectiveness, and security of supply. Overall, the objectives and fundamental principles of all these different legislative proposals go in the right direction.

Leo Birnbaum: Even if those targets are not read as literal targets, they are also not legislative, they can be seen as a signpost for the desired direction of travel and clearly supportive for our infrastructure business on the electricity side. The same objectives can be seen in Germany. The German Grid Package contains provisions for capacity-restricted network areas and active grid capacity management instead of the current first come, first served logic. The distribution grid package strengthens the emphasis on acceleration of permitting processes for grid build-out. The amendment of the Renewable Energy Law targets to move from pure volume growth to a stronger market integration of PV and a shift in support mechanisms towards systems efficiency, cost-effectiveness, and security of supply. Overall, the objectives and fundamental principles of all these different legislative proposals go in the right direction.

Speaker #2: And the same objectives can be seen in Germany. The German grid package contains provisions for capacity-restricted network areas and active grid capacity management instead of the current first-come, first-served logic.

Speaker #2: The distribution grid package strengthens the emphasis on acceleration of permitting processes for grid build-out. The amendment of the Renewable Energy Law targets moving from pure volume growth to a stronger market integration of PV, and a shift in support mechanisms towards system efficiency, cost-effectiveness, and security of supply.

Speaker #2: Overall, the objectives and fundamental principles of all these different legislative proposals go in the right direction. The second half of the energy transition needs to be considered in its entirety to remain executable and affordable.

[Company Representative] (E.ON): The second half of the energy transition needs to be considered in its entirety to stay executable and affordable. We need an efficient and future-proof connection regime and effective steering incentives to avoid unnecessary complexity and costs. In any case, what is clear is that the distribution grids stay in the center of the second phase of the energy transition. The policy direction reinforces the case for sustained grid investments, and we are now obviously looking forward to see what the final legislation will really contain. Let me conclude with the key messages you should take away from my introduction. First, E.ON continues to deliver. Second, grid capacity is the critical enabler for the energy transition, and E.ON is all about grids and customer solutions.

Leo Birnbaum: The second half of the energy transition needs to be considered in its entirety to stay executable and affordable. We need an efficient and future-proof connection regime and effective steering incentives to avoid unnecessary complexity and costs. In any case, what is clear is that the distribution grids stay in the center of the second phase of the energy transition. The policy direction reinforces the case for sustained grid investments, and we are now obviously looking forward to see what the final legislation will really contain. Let me conclude with the key messages you should take away from my introduction. First, E.ON continues to deliver. Second, grid capacity is the critical enabler for the energy transition, and E.ON is all about grids and customer solutions.

Speaker #2: We need an efficient and future-proof connection regime and effective steering incentives to avoid unnecessary complexity and costs. In any case, what is clear is that the distribution grids stay at the center of the second phase of the energy transition.

Speaker #2: The policy direction reinforces the case for sustained grid investments, and we are now obviously looking forward to seeing what the final legislation will really contain.

Speaker #2: So let me conclude with the key messages you should take away from my introduction. First, E.ON continues to deliver. Second, grid capacity is the critical enabler for the energy transition, and E.ON is all about grids and customer solutions around that.

[Company Representative] (E.ON): Around that, we continue to standardize, digitize, and optimize how we execute in our growth program and policy objectives point in the right direction, and we look forward to the final design. The momentum and the outlook continues to be positive. A successful energy transition requires significantly more network investments. What we now need as a closing remark is obviously an appropriate policy framework and an attractive, predictable, and reliable network regulation. We need long-term planning certainty and financial attractiveness to support this further expansion of critical infrastructure. As said, we stand ready to invest if conditions are sufficiently attractive. With that, let me hand over to Nadia. Nadia?

Leo Birnbaum: Around that, we continue to standardize, digitize, and optimize how we execute in our growth program and policy objectives point in the right direction, and we look forward to the final design. The momentum and the outlook continues to be positive. A successful energy transition requires significantly more network investments. What we now need as a closing remark is obviously an appropriate policy framework and an attractive, predictable, and reliable network regulation. We need long-term planning certainty and financial attractiveness to support this further expansion of critical infrastructure. As said, we stand ready to invest if conditions are sufficiently attractive. With that, let me hand over to Nadia. Nadia?

Speaker #2: We continue to standardize, digitize, and optimize how we execute in our growth program, and policy objectives point in the right direction. We look forward to the final design.

Speaker #2: So the momentum and the outlook continues to be positive. A successful energy transition requires significantly more network investments. And what we now need, as a closing remark, is obviously an appropriate policy framework and an attractive, predictable, and reliable network regulation.

Speaker #2: We need long-term planning certainty and financial attractiveness to support this further expansion of critical infrastructure assets. We stand ready to invest if conditions are sufficiently attractive.

Speaker #2: And with that, let me hand over to Nadia. Nadia.

Speaker #1: Thank you, Leo, and a warm welcome to all of you from my side as well. Since we last spoke, the volatility in global energy and commodity markets has remained high.

Nadia Jakobi: Thank you, Leo, and a warm welcome to all of you from my side as well. Since we last spoke, the volatility in global energy and commodity market has remained high as geopolitical tensions in the Middle East continued. Against this backdrop, our strong H1 performance once again demonstrates the resilience of our business model in a world of increased geopolitical uncertainty. We are well-positioned to capture the long-term structural growth opportunities, particularly through our investments in power grids. This resilience enables us to continue with our investments in the energy transition and to deliver on our capital market promises. With that, let me take you through our financial performance for the H1 2026. Here are my four key messages for today. First, E.ON delivered a strong operational and financial performance in the H1 of the year.

Speaker #1: As geopolitical tensions in the Middle East continued, after the—against this backdrop, our strong H1 performance once again demonstrates the resilience of our business model in a world of increased geopolitical uncertainty.

Speaker #1: We are well positioned to capture the long-term structural growth opportunities, particularly through our investments in power grids. This resilience enables us to continue with our investments in the energy transition and to deliver on our capital market promises.

Speaker #1: With that, let me take you through our financial performance for the first half of 2026. Here are my four key messages for today. First, E.ON delivered a strong operational and financial performance in the first half of the year.

Speaker #1: Adjusted EBITDA reached €5.4 billion, slightly above the prior-year level, while adjusted net income amounted to €1.9 billion. With these results, we remain fully on track to deliver our full-year guidance.

Nadia Jakobi: Adjusted EBITDA reached EUR 5.4 billion, slightly above the prior year level, while adjusted net income amounted to EUR 1.9 billion. With these results, we remain fully on track to deliver our full-year guidance. Second, our investment momentum remains firmly intact. Investments continue to materially exceed depreciation, with the bulk of our investment allocated to our German power networks business. Third, our balance sheet remains strong. Economic net debt stood at EUR 46.7 billion at the end of H1, showing the normal seasonal pattern of our business. It reflects the annual dividend payment and continued investment activity, partly offset by strong operating cash flow generation in Q2. Finally, we fully confirm our short and midterm guidance, including our dividend policy. Let us move on to the details of our H1 adjusted EBITDA development, which increased by around EUR 70 million year over year to EUR 5.4 billion on group level.

Speaker #1: Second, our investment momentum remains firmly intact. Investments continue to materially exceed depreciation, with the bulk of our investments allocated to our German power networks business.

Speaker #1: Third, our balance sheet remains strong. Economic net debt stood at €46.7 billion at the end of H1, showing the normal seasonal pattern of our business.

Speaker #1: It reflects the annual dividend payment and continued investment activity, partly offset by strong operating cash flow generation in Q2. And finally, we fully confirm our short- and mid-term guidance, including our dividend policy.

Speaker #1: Let us move on to the details of our H1 adjusted EBITDA development, which increased by around €70 million year over year to €5.4 billion at group level.

Speaker #1: Looking at the business segments and Energy Networks, we delivered a broadly stable earnings performance year over year, fully in line with our expectations. Our continued investments in our regulated asset base provided earnings growth across all business regions.

Nadia Jakobi: Looking at the business segments and Energy Networks, we delivered a broadly stable earnings performance year-over-year, fully in line with our expectations. Our continued investments in our regulated asset base provided earnings growth across all business regions. We also benefited from positive FX effects in our European markets, particularly in Sweden and Hungary. This was partly offset by the known negative structural effects. These included portfolio changes following the deconsolidation of one of our regional utility investments in Germany, NEW AG, as well as the disposal of the Czech Gas network. In addition, we saw higher costs to support the continued expansion of our networks business. In Energy Infrastructure Solutions, we had strong 19% earnings growth year-over-year, mainly driven by the commissioning of new projects for industrial customers and the continued pass-through of higher procurement costs from previous years.

Speaker #1: We also benefited from positive FX effects in our European markets, particularly in Sweden and Hungary. This was partly offset by the known negative structural effects.

Speaker #1: These included portfolio changes following the deconsolidation of one of our regional utility investments in Germany, NEW, as well as the disposal of the Czech gas network.

Speaker #1: In addition, we saw higher costs to support the continued expansion of our Networks business. In Energy Infrastructure Solutions, we had strong 19% earnings growth year over year, mainly driven by the commissioning of new projects for industrial customers and the continued impact of higher procurement costs from previous years.

Speaker #1: In Energy Retail, we saw a slight earnings decrease compared to last year. This development was expected and reflects the impact of the deconsolidation of NEW in Germany.

Nadia Jakobi: In Energy Retail, we saw a slight earnings decrease compared to the last year. This development was expected and reflects the impact of the deconsolidation of NEW AG in Germany. In the UK, the performance of our B2B business had continued to normalize, while we have seen positive effects from higher average margins compared to the prior year on fixed price contracts in our B2C business. Let us now turn to our Adjusted Net Income, which increased by around 5% year-over-year to EUR 1.9 billion. All major P&L elements below EBITDA developed in line with our expectations. As highlighted during the Q1 call, financing expenses are expected to increase over the course of the year. This is mainly driven by two factors. First, higher net debt because of significant investments, and second, higher refinancing costs by maturing low coupon bonds.

Speaker #1: In the UK, the performance of our B2B business has continued to normalize, while we have seen positive effects from higher average margins compared to the prior year on fixed price contracts in our B2C business.

Speaker #1: Let us now turn to our adjusted net income, which increased by around 5% year over year to €1.9 billion. Our major P&L elements below EBITDA developed in line with our expectations.

Speaker #1: As highlighted during the Q1 call, financing expenses are expected to increase over the course of the year. This is mainly driven by two factors.

Speaker #1: First, higher net debt because of significant investments. And second, higher refinancing costs due to maturing low-coupon bonds. Looking ahead, the current development in adjusted net income is therefore expected to normalize over the winter of 2026.

Nadia Jakobi: Looking ahead, the current development in Adjusted Net Income is therefore expected to normalize over the remainder of 2026. Overall, we remain well on track to achieve our full-year Adjusted Net Income guidance for 2026. Looking at the development of our economic net debt, which increased to EUR 46.7 billion at the end of the quarter, I would like to highlight four key points. First, the development of economic net debt was fully in line with a typical seasonal pattern. While the dividend payment in May and our ongoing investments increased, these effects were partly offset by strong operating cash flow and the reduction in provisions in Q2. Second, our investment spending continues to demonstrate disciplined execution. The H1 CapEx fill rate stood at around 34%, in line with our expectations. We remain on track to deliver our full-year investment guidance of around EUR 8.7 billion.

Speaker #1: Overall, we remain well on track to achieve our full-year adjusted net income guidance for 2026. Looking at the development of our economic net debt, which increased to €46.7 billion at the end of the quarter, I would like to highlight four key points.

Speaker #1: First, the development of economic net debt was fully in line with the typical seasonal pattern. While the dividend payment in May and our ongoing investments did indeed increase net debt, these effects were partly offset by strong operating cash flow and the reduction in provisions in Q2.

Speaker #1: Second, our investment spending continues to demonstrate disciplined execution. The H1 CapEx fill rate stood at around 34%, in line with our expectations. We remain on track to deliver our full-year investment guidance of around €8.7 billion. This amount does not include the Over transaction. As a reminder, our network investment profile is weighted towards the fourth quarter, which typically accounts for around 40% of annual CapEx.

Nadia Jakobi: This amount does not include the Ovo transaction. As a reminder, our network investment profile is weighted towards the fourth quarter, which typically accounts for around 40% of annual CapEx. Third, our strong balance sheet remains a key pillar of our investment case, with all three rating agencies continuing to affirm our comfortable balance sheet position in the last few months. This validates what we have consistently communicated. Our investment program is fully funded within our current balance sheet capacity, and in addition, we continue to see substantial additional headroom to fund further value accretive growth if the conditions are right. Fourth, this brings me back to the need for an attractive regulatory framework in Germany. The proposed seven-year averaging methodology for determining the RP5 cost of debt for existing assets would not adequately reflect current and expected refinancing costs.

Speaker #1: Third, our strong balance sheet remains a key pillar of our investment case, with all three rating agencies continuing to affirm our comfortable balance sheet position in the last few months.

Speaker #1: This validates what we have consistently communicated: Our investment program is fully funded within our current balance sheet capacity, and, in addition, we continue to see substantial additional headroom to fund further value-accretive growth if the conditions are right.

Speaker #1: Fourth, this brings me back to the need for an attractive regulatory framework in Germany. The proposed seven-year averaging methodology for determining the RP5 cost of debt for existing assets would not directly reflect current and expected refinancing costs.

Speaker #1: For gas network investments, we expect a first draft of the VAC assumptions in the next stage. The resulting cost of debt allowance will probably not cover our financing costs and will include additional low-interest years compared to power.

Nadia Jakobi: For gas network investments, we expect a first draft of the WACC assumptions in the next days. The resulting cost of debt allowance will probably not cover our financing costs and will include additional low interest years compared to power. However, the financial impact on E.ON should remain limited as depreciation in our gas networks business exceeds investment levels, resulting in declining refinancing needs. In addition, most of our regulatory asset base relates to power networks, which have grown significantly and are expected to continue expanding. In any case, it is essential that the regulator set an internationally competitive remuneration for power networks, including a cost of debt allowance that covers refinancing costs. This is fundamental to attracting the investment needed for the energy transition. Let me conclude the financial section with three key takeaways.

Speaker #1: However, the financial impact on E.ON should remain limited, as depreciation in our gas networks business exceeds investment levels, resulting in declining refinancing needs. In addition, most of our regulatory asset base relates to power networks, which have grown significantly and are expected to continue expanding.

Speaker #1: In any case, it is essential that the regulator set an internationally competitive remuneration for power networks, including a cost of debt allowance that covers refinancing costs.

Speaker #1: This is fundamental to attracting the investment needed for the energy transition. Let me conclude the financial section with three key takeaways. First, we once again demonstrated the strength of our business model in a volatile environment, delivering a strong first half of 2026 with adjusted EBITDA and adjusted net income fully in line with expectations.

Nadia Jakobi: First, we once again demonstrated the strength of our business model in a volatile environment, delivering a strong H1 2026 with adjusted EBITDA and adjusted net income fully in line with expectations. Second, our investment-backed growth story is progressing well. We continue to invest significantly above depreciation with disciplined execution and a clear focus on value creation. Third, our balance sheet remains strong and provides a strong foundation for our current investment program with additional capacity for further growth. However, realizing this opportunity hinges on obtaining sufficient certainty that the RP5 regulatory parameters in Germany will be strengthened and finalized as expected. Finally, we fully confirm our full year 2026 guidance and our 2030 outlook, including our dividend policy. With that, let me hand back to Iris.

Speaker #1: Second, our investment-backed growth story is progressing well. We continue to invest significantly above depreciation, with disciplined execution and a clear focus on value creation.

Speaker #1: Third, our balance sheet remains strong and provides a solid foundation for our current investment program, with additional capacity for further growth. However, realizing this opportunity hinges on obtaining sufficient certainty that the RP5 regulatory parameters in Germany will be strengthened and finalized as expected.

Speaker #1: Finally, we fully confirm our full-year 2026 guidance and our 2030 outlook, including our dividend policy. And with that, let me hand back to Iris.

Speaker #2: Thank you, Nadia. And with that, we will start our Q&A. As always, a short reminder to please stick to two questions each. We will start today with the first question coming from Wanda from UBS.

Iris Eveleigh: Thank you, Nadia. With that, we will start our Q&A. As always, a short reminder to please stick to two questions each. We will start today with the first question coming from Wanda, from UBS. Hi, Wanda.

Speaker #2: Hi, Wanda.

Speaker #3: Hi, hopefully you can hear me. I have two questions and one clarification, if I may. The first question is on the UK retail market.

[Analyst] (UBS): Hi. Hopefully you can hear me.

Nadia Jakobi: Yes.

[Analyst] (UBS): Just two questions and one clarification, if I may. The first question is on the UK retail market. Can you give us some numbers color on the bad debt? This is a real issue in the B2C in the UK. Bad debt can raise to GBP 7 billion, and you are growing into that market following the Ovo acquisition. Your peer, Centrica, they provide the market with bad debt charges, trade receivables, and provisions. I would really appreciate if you could share some numbers around bad debt in the UK. The second question is: Can you talk about the direction of travel of the talks with the German regulator? We are waiting for the proposal for gas WACC at some point this or next month, but any qualitative comment on the talks would be much appreciated. Just one clarification on the guidance.

Speaker #3: Can you give us some numbers, color, on the bad debt? I mean, this is a real issue in the B2C in the UK. Bad debt can rise to £7 billion.

Speaker #3: And you are growing into that market following the E.ON acquisition. Your P&L entry card, they provide the market with bad debt charges, trade receivables, and provisions.

Speaker #3: So, I would really appreciate it if you could share some numbers around bad debt in the UK. The second question is: can you talk about the direction of travel of the talks with the German regulator?

Speaker #3: We are waiting for the proposal for Gaswax at some point this or next month, but any qualitative comments on the talks would be much, much appreciated.

Speaker #3: And just one clarification on the guidance. Nadia, is the midpoint of the range still the best point, or should we look at the top half?

[Analyst] (UBS): Nadia, is the midpoint of the range the best point, or should we look at the top half? Thanks a lot.

Speaker #3: Thanks a lot.

Speaker #2: Thank you, Wanda.

Nadia Jakobi: Thank you, Wanda.

Speaker #4: Also Nadia.

[Company Representative] (E.ON): Also Nadia.

Leo Birnbaum: Also Nadia.

Speaker #1: Okay, so then I have got, I think it was three questions, yeah. So, on the UK bad debt, as we have already said in some of our last meetings, the UK team and E.ON Next have been working hard on what we call account health over the last couple of years, where we are firm that we are industry-leading in the UK.

Nadia Jakobi: Okay. I have got, I think it was three questions. On the UK bad debt, as we have already said in some of our last meetings, the UK team and E.ON Next have been working hard on what we call account health over the last couple of years, where we are firm that we are industry leading in the UK on our bad debt management. What does that mean, account health? First of all, we looked at debt segmentation activity, so that we say, "Well, what are struggling customer groups?" Then we sort of offer early interventions to help.

Speaker #1: On our bad debt management. So what does that mean? Account health. So first of all, we looked at debt segmentation activity. So that we say, what are struggling customer groups and then we sort of offer early interventions to help.

Speaker #1: Secondly, we also have a very active management on our direct debit payment adequacy; i.e., we look very carefully at which is the right level of the bill to avoid bill shocks, which is then also, of course, helpful not to run into bad debt issues.

Nadia Jakobi: Secondly, we also have a very active management on our direct debit payment adequacy, i.e., we look very carefully, which is the right level of the bill to avoid bill shocks, which is then also, of course, helpful not to run into bad debt issues. Thirdly, we have got a debt management improvement system, which also allows a better foresight on bad debt risk and allows early interventions. We are not disclosing the exact number, but we are confident, and we have been seeing from the past couple of years that we are industry leading in this segment, and that is for us a sign of our operational excellence in this field, which we, of course, also intending to transfer to the overall customer base once we have closed the transaction. Second question was with regards to the regulation.

Speaker #1: And secondly, we have—thirdly, we have got a debt management improvement system, which also allows better foresight on bad debt risk and allows early interventions.

Speaker #1: So we are not disclosing the exact number, but we are confident, and we have seen over the past couple of years that we are industry-leading in this segment. That, for us, is a sign of our operational excellence in this field.

Speaker #1: Which we, of course, are also intending to transfer to the overall customer base once we have closed the transaction. Second question was with regards to the regulation.

Speaker #1: So we expect the first draft of the consolidation for the gas VAC in the next days, so not that long to go. Of course, first of all, we will assess that from a gas perspective, because, as you know, we are operating the gas networks business.

Nadia Jakobi: We expect the first draft of the consultation for the gas WACC in the next days. Not that long to go. Of course, first of all, we will assess that from a gas perspective, because as you know, we are operating a gas networks business in Germany. But of course, we also look into what that means for the different parts of the WACC from the power side. When you look at for thought, of course, of debt first, as gas is determined one year earlier than power, we will have one year more of the low interest rate years, i.e., 2019 to 2025, whereas in power we will have most likely then 2020 to 2026. Then on the cost of equity. Cost of equity is also including three very relevant parameters. First of all, the risk-free rate.

Speaker #1: In Germany, but of course, we also look into what that means for the different parts of the WACC from the power side. So when you look at, for sort of cost of debt first, as gas is determined one year earlier than power, we will have one year more of the low interest rate years, i.e., '19 to '25, whereas in power, we will have most likely then '20 to '26.

Speaker #1: Then on the cost of equity—you know, cost of equity also includes three very relevant parameters. First of all, the risk-free rate. This is using a five-year averaging period, i.e., for gas, that's going to be 2022 to 2025, whereas for others it's 2021 to 2025.

Nadia Jakobi: This is using a five-year averaging period, i.e., for gas, that is going to be 2022 to 2025, whereas 2021 to 2025. For electricity, that is going to be 2022 to 2026. So we will also see improvements there. On the market risk premium, we expect to actually get some certain read-across from the determination, because that is looking back 100 years, and to have one year more or less in 100 years for a market risk premium shouldn't swing the needle. On the beta factor, we don't know yet at all how both the peer group or the time series will comply, and therefore, we also don't know what kind of read-across possibilities they are going to be on power. As you highlighted, that is going to be quite interesting. First of all, for our small gas business, what that means for that.

Speaker #1: And for electricity, that's going to be 2022 to 2026, so we will also see improvements there. On the market risk premium, we expect to actually get some certain read-across from the determination, because that's looking back, like, 100 years, and to have one year more or less in 100 years for market risk premium shouldn't swing the needle.

Speaker #1: And on the beta factor, we don't know yet at all how either the peer group or the time series will comply. And therefore, we also don't know what kind of read-across possibilities there are going to be on power.

Speaker #1: So, as you highlighted, that's going to be quite interesting. First of all, for our small gas business, what that means for us. And secondly, not from the nameplate numbers—because there we see quite a bit of differences—but maybe also from the subtext, from the publication, we might get some insights into the power determination.

Nadia Jakobi: Secondly, not from the nameplate numbers, because there we see quite a bit of differences, but maybe also from the subtext, from the publication, we might get some insights into the power determination, but we do not know at this point in time.

Speaker #1: But we don't know at this point in time.

[Company Representative] (E.ON): It may be fair to add, it is the beginning of the consultation.

Speaker #4: And maybe fair to add, it’s the beginning of the consultation. And then at the end of the year, beginning of next year, we will know a little bit more on all the stuff that you just mentioned.

Leo Birnbaum: It may be fair to add, it is the beginning of the consultation.

Nadia Jakobi: Yes.

[Company Representative] (E.ON): Then at the end of the year, beginning of the next year, we will know a little bit more on all the stuff that you just mentioned.

Leo Birnbaum: Then at the end of the year, beginning of the next year, we will know a little bit more on all the stuff that you just mentioned.

Speaker #1: Exactly. It's the typical pattern: first consultation, and the final determination for the gas VAC is then after we and the whole industry have sent in our feedback, which is going to be at the back end of the year.

Nadia Jakobi: Exactly. As the typical pattern, first consultation and the final determination for the gas WACC is then after we and the whole industry have set in our feedback, is going to be at the back end of the year. Then to your third question, as you know from the past, as long as we do not specifically highlight, you could always assume that the midpoint is the best estimate from the very small guidance range that we get.

Speaker #1: And then to the third question: as long as you know from the past, as long as we don't specifically highlight, you can always assume that the midpoint is the best estimate from the very small guidance range that we give.

Speaker #2: Thank you, Nadia. And with that, we come to the questions from Harry. Hi, Harry.

Iris Eveleigh: Thank you, Nadia.

Nadia Jakobi: Thank you very much.

Iris Eveleigh: And with that, we come to the questions from Harry. Hi, Harry.

Speaker #5: Hello, everyone. Hi, thanks for taking my question. I have two questions. So, the first one is on the German government distribution package, which Leah—you talked a little bit about in the opening remarks, but I wanted to dig into it a bit more.

[Analyst] (Exane BNP Paribas): Hello, everyone. Hi, thanks for taking my question. First one's on the German distribution grid package, which, Lea, you talked a little bit about in the opening remarks, but I wanted to dig into it a bit more. I think from the coalition agreement, it focused on two things, permitting, which you mentioned, and it also mentioned financing. We were all trying to figure out what that actually means. I wondered if you could flesh out a bit, what do you actually expect from the German distribution grid package, and when do you expect that it's likely to be passed? If the financing element applies to you, could that change anything? Or if it applies perhaps to the municipal operators, could that create some more opportunities for you to provide services to them if they're able to raise their CapEx?

[Analyst]: Hello, everyone. Hi, thanks for taking my question. First one's on the German distribution grid package, which, Lea, you talked a little bit about in the opening remarks, but I wanted to dig into it a bit more. I think from the coalition agreement, it focused on two things, permitting, which you mentioned, and it also mentioned financing. We were all trying to figure out what that actually means. I wondered if you could flesh out a bit, what do you actually expect from the German distribution grid package, and when do you expect that it's likely to be passed? If the financing element applies to you, could that change anything? Or if it applies perhaps to the municipal operators, could that create some more opportunities for you to provide services to them if they're able to raise their CapEx?

Speaker #5: So, I think from the coalition agreement, it focused on two things: permitting, which you mentioned, and it also mentions financing. And we were all trying to figure out what that actually means.

Speaker #5: So, I wondered if you could flesh out a bit what you actually expect from the German government distribution package, and when you expect that it's likely to be passed?

Speaker #5: And if the financing element applies to you, could that change anything? Or if it applies perhaps to the municipal operators, could that create some more opportunities for you to provide services to them if they're able to raise their capex?

Speaker #5: So, just interested in a bigger exploration of that package. And then, following on from or building on Rhonda's question, the gas draft — Nadia, you mentioned that there might be some elements of it which read across to power.

[Analyst] (Exane BNP Paribas): So just interested in a bigger exploration of that package. Then following on from, or developing on Rhonda's question, the gas draft. Nadia, you mentioned that there might be some elements of it which read across to power. Could you just be a little bit more explicit about what parts of the gas draft you are most focused on to read across to power? Is it the allowed return? Is it statements in there on how they are going to treat OPEX, et cetera? Just to help us a little bit when it is released, on what is important for you and what might drive your views on it, apropos power. Thank you.

[Analyst]: So just interested in a bigger exploration of that package. Then following on from, or developing on Rhonda's question, the gas draft. Nadia, you mentioned that there might be some elements of it which read across to power. Could you just be a little bit more explicit about what parts of the gas draft you are most focused on to read across to power? Is it the allowed return? Is it statements in there on how they are going to treat OPEX, et cetera? Just to help us a little bit when it is released, on what is important for you and what might drive your views on it, apropos power. Thank you.

Speaker #5: Could you just be a little bit more explicit about which parts of the gas draft you're most focused on to read across to power?

Speaker #5: Is it the allowed return? Are there statements in there about how they're going to treat opex, et cetera? Just to help us a little when it's released, on what's important for you and what might drive your views on it, apropos power.

Speaker #5: Thank you.

Speaker #4: Yeah. So Harry, I'll take the first question on the distribution package. Since it's actually quite confusing, all these different packages at the European and national levels, we have—I think on page 16 in the pack—we have put together the timeline of the different packages, so that you have an idea of when it might materialize.

[Company Representative] (E.ON): Well, Harry, I take the first question on the distribution package. Since it is actually quite confusing, all these different packages on the European and national level, we have, I think on page 16 in the pack, we have put you the timeline of the different packages so that you have an idea when it might materialize. The first message is that the German distribution grid package is the second package, which should happen after the German grid package. Actually, we as E.ON, we advocate strongly for doing step 1 first and then step 2, rather than discussing everything forever and never getting to a conclusion on anything. So in the German distribution grid package, you rightly pointed out speed and financing as the two, let me call it, subtopics.

Leo Birnbaum: Well, Harry, I take the first question on the distribution package. Since it is actually quite confusing, all these different packages on the European and national level, we have, I think on page 16 in the pack, we have put you the timeline of the different packages so that you have an idea when it might materialize. The first message is that the German distribution grid package is the second package, which should happen after the German grid package. Actually, we as E.ON, we advocate strongly for doing step 1 first and then step 2, rather than discussing everything forever and never getting to a conclusion on anything. So in the German distribution grid package, you rightly pointed out speed and financing as the two, let me call it, subtopics.

Speaker #4: And so, the first message is the German distribution grid package is the second package, which should happen after the German grid package. And actually, we as E.ON, we advocate strongly for doing step one first and then step two, rather than discussing everything forever and never getting to a conclusion on anything.

Speaker #4: So, in the German distribution grid package, you rightly pointed out speed and financing as the two, let me call it, subtopics. Permitting—we think what happens here is that there is an acknowledgment that the speed of permitting needs to be accelerated, not only on the transmission system operator level, but also especially on the high voltage level, the 110 kV, which is part of the distribution.

[Company Representative] (E.ON): Permitting, we think what happens here is that there is an acknowledgment that the speed of permitting needs to be accelerated not only on the TSO level, but also on the especially high voltage level, the 110 kV, which is part of the distribution, actually in most European markets. If we do not accelerate the high voltage level, we will actually struggle to follow the dynamic development in the energy transition. So I give just one example. The data center boom that we have seen over the last 5 years happens mostly in the 110 kV level. Now, if we have a speed of development, which is accelerating year over year, and we have an average permit time of 8 years, we are just not going to be able to react fast enough to the needs of our customers.

Leo Birnbaum: Permitting, we think what happens here is that there is an acknowledgment that the speed of permitting needs to be accelerated not only on the TSO level, but also on the especially high voltage level, the 110 kV, which is part of the distribution, actually in most European markets. If we do not accelerate the high voltage level, we will actually struggle to follow the dynamic development in the energy transition. So I give just one example. The data center boom that we have seen over the last 5 years happens mostly in the 110 kV level. Now, if we have a speed of development, which is accelerating year over year, and we have an average permit time of 8 years, we are just not going to be able to react fast enough to the needs of our customers.

Speaker #4: Actually, in most European markets, and if we do not accelerate at the high voltage level, we will actually struggle to follow the dynamic development in the energy transition.

Speaker #4: So, just one example: the data center boom that we have seen over the last five years happens mostly at the 110 kV level.

Speaker #4: Now, if we have a speed of development which is, you know, accelerating year over year, and we have an average permit time of eight years, we're just not going to be able to react fast enough to the needs of our customers.

Speaker #4: So the fact that now also the high voltage level is being included in making it faster—not only the acceleration, which so far was mostly focused on transmission—is a clear positive, and will enable us to react faster to the needs of our customers.

[Company Representative] (E.ON): The fact that now also the high voltage level is being included in making it faster, not only so far the acceleration was mostly focused on transmission, is a clear positive and will enable us to react faster to the need of our customers. On the financing side, actually, E.ON has low expectations. We do not want state money. We want a regulation which is sufficient to attract the private capital, which is clearly out there. If we can actually make that work, then we are fine. But now there are other players in the market which have no direct access to capital markets. For them, there might be financing opportunities provided by the state in whatever structure.

Leo Birnbaum: The fact that now also the high voltage level is being included in making it faster, not only so far the acceleration was mostly focused on transmission, is a clear positive and will enable us to react faster to the need of our customers. On the financing side, actually, E.ON has low expectations. We do not want state money. We want a regulation which is sufficient to attract the private capital, which is clearly out there. If we can actually make that work, then we are fine. But now there are other players in the market which have no direct access to capital markets. For them, there might be financing opportunities provided by the state in whatever structure.

Speaker #4: On the financing side, actually, E.ON has low expectations. We do not want state money. We want a regulation which is sufficient to attract the private capital, which is clearly out there.

Speaker #4: And if we can actually make that work, then we are fine. But now, there are other players in the market who have no direct access to capital markets.

Speaker #4: And for them, there might be financing opportunities provided by the state in whatever structure. Now, for us, the only thing is, we as E.ON do not want to have a distortion of competition by the state offering conditionalities which are better than what we can achieve in the capital markets.

[Company Representative] (E.ON): Now, for us, the only thing is we as E.ON, we do not want to have a distortion of competition by the state offering conditionalities which are better than what we can achieve in the capital markets. But I am actually confident that this will be the case. If not, then we will either apply for the money ourselves, which would certainly trigger some reactions, or we will sue against that, which would also trigger some reactions. So much on the distribution grid package. But again, we think that it is more end of the year, first focus should be on the Grid Package. For the gas draft,

Leo Birnbaum: Now, for us, the only thing is we as E.ON, we do not want to have a distortion of competition by the state offering conditionalities which are better than what we can achieve in the capital markets. But I am actually confident that this will be the case. If not, then we will either apply for the money ourselves, which would certainly trigger some reactions, or we will sue against that, which would also trigger some reactions. So much on the distribution grid package. But again, we think that it is more end of the year, first focus should be on the Grid Package. For the gas draft,

Speaker #4: But I'm actually confident that this will be the case. And if not, then we will either apply for the money ourselves—which would certainly trigger some reactions—or we'll sue against that, which would also trigger some reactions.

Speaker #4: So much on the distribution package. But again, we think that it's more end of the year—first focus should be on the grid package.

Speaker #4: And for the gas draft.

Nadia Jakobi: Yeah. For the gas draft, that will only include information regarding the Gas WACC, everything regarding cost allowance, et cetera. We do not assume to give specific insights into that. As we try to allude to, I think we will get from the number, as such, we will only get a real insight into the MRP. For the other elements on the cost of equity, there is a different time series, for example, for both cost of debt for existing assets and also for the cost of equity. On the cost of debt, you know there is this assumption that for power, as we have an increasing amount of CapEx in the whole industry, that there will be a specific weighting that the later years will have higher weightings. On the gas side, we have not seen an increased investment activity over the last years.

Speaker #1: Yeah. So for the gas draft, that will only include information regarding the gas VAC, everything regarding cost allowance, et cetera. We don't assume to give specific insights into that.

Speaker #1: And then, as we tried to allude to, I think we will get from this name, from the number as such, we will only get a real insight into the MRP.

Speaker #1: And then, for the other elements on the cost of equity, we, you know, there is a different time series for both the cost of debt for existing assets, and also for the cost of equity.

Speaker #1: And on the cost of debt, you know, there is this assumption that for power, as we have an increasing amount of capex in the whole industry, that there will be a specific rating, and that the later years will have higher ratings.

Speaker #1: On the gas side, we haven't seen increased investment activity over the last years. So, there we would rather assume that this is more spread equally over the years, and that would then also be something where you cannot take the direct number for cost of debt for existing assets.

Nadia Jakobi: So there we would rather assume that this is more spread equal over the years, and that would be then also something where you cannot take the direct number for cost of debt for existing assets. But there would not be that much read-across opportunities on that.

Speaker #1: But there wouldn't be that much read-across opportunities on that.

[Analyst] (Exane BNP Paribas): Okay, understood. So just to clarify, it is just the cost. It is the returns that are relevant, but you expect some quite significant modifications of power, right?

[Analyst]: Okay, understood. So just to clarify, it is just the cost. It is the returns that are relevant, but you expect some quite significant modifications of power, right?

Speaker #5: Okay, understood. So just to clarify, it's not just the cost, it's the returns that are relevant, but you expect some quite significant modifications of power, right?

Speaker #1: Yeah. I think, logically, from the methodology and also from the different states that both power and gas have in the relevance of the energy transition.

Nadia Jakobi: Yeah. I think logically from the methodology, but also from the different stages that both power and gas have in the relevance of the energy transition.

Speaker #5: Got it. And sorry to stretch things out, but, yeah, just to follow up on the Grids package, if you did see a significant improvement in the pace of permitting, what would that mean on the ground for you?

[Analyst] (Exane BNP Paribas): Got it. Sorry to stretch things out, but just to follow up on the Grid Package, if you did see a significant improvement in the pace of permitting, what would that mean on the ground for you? Do you think that could allow you to get more done to accelerate things? Are there financial implications of that, if that is passed by the end of the year?

[Analyst]: Got it. Sorry to stretch things out, but just to follow up on the Grid Package, if you did see a significant improvement in the pace of permitting, what would that mean on the ground for you? Do you think that could allow you to get more done to accelerate things? Are there financial implications of that, if that is passed by the end of the year?

Speaker #5: Do you think that could allow you to get more done to accelerate things? Are there financial implications of that if that's passed by the end of the year?

Speaker #4: Yeah. So first, we assume that the package—so right now, we have only an intention, and let me call it, what is it, 34-point plan on the table, which needs to be put into a legislative package, which then can enter the parliamentary process, which we expect only for next year.

[Company Representative] (E.ON): Yeah. First, we assume that the package. Right now we have only an intention and, let me call it, what is it, 34-point plan on the table, which needs to be put into a legislative package, which then can enter the parliamentary process, which we expect only for next year. The current timeline, as we have fleshed out in the backup, would indicate that we get this distribution grid package somewhere in 2027. Then obviously, if permitting becomes faster, that has no immediate impact, because for the existing permitting processes, you probably need to finish them as you have started them. But for the next project, it would allow us to allocate less engineering resources. Probably we would have more engineers to do useful stuff rather than lengthy procedures.

Leo Birnbaum: Yeah. First, we assume that the package. Right now we have only an intention and, let me call it, what is it, 34-point plan on the table, which needs to be put into a legislative package, which then can enter the parliamentary process, which we expect only for next year. The current timeline, as we have fleshed out in the backup, would indicate that we get this distribution grid package somewhere in 2027. Then obviously, if permitting becomes faster, that has no immediate impact, because for the existing permitting processes, you probably need to finish them as you have started them. But for the next project, it would allow us to allocate less engineering resources. Probably we would have more engineers to do useful stuff rather than lengthy procedures.

Speaker #4: So, the current timeline would indicate, as we have fleshed out in the backup, that we get this distribution grid package somewhere in 2027.

Speaker #4: And then, obviously, if permitting becomes faster, that has no immediate impact because, for the existing permitting processes, you probably need to finish them as you have started them.

Speaker #4: But for the next projects, it would allow us to allocate fewer engineering resources. So, probably, we would have more engineers to do useful stuff rather than lengthy procedures.

Speaker #4: And it would allow us to then accelerate, you know, in the years afterwards, and then again, especially if combined with the acceptable regulatory package.

[Company Representative] (E.ON): It would allow us to then to accelerate, then in the years afterwards, and then again, especially if combined with acceptable regulatory package. That is a bit the timeline.

Leo Birnbaum: It would allow us to then to accelerate, then in the years afterwards, and then again, especially if combined with acceptable regulatory package. That is a bit the timeline.

Speaker #4: So that's a bit of the timeline.

Speaker #5: Got it. Very clear. Thank you.

[Analyst] (Exane BNP Paribas): Got it. Very clear. Thank you.

[Analyst]: Got it. Very clear. Thank you.

Speaker #1: Thank you. And with that, we come to the next question. Goldman. Hi, Alberto.

Iris Eveleigh: Thank you. With that, we come to the next question from Alberto from Goldman. Hi, Alberto.

Speaker #6: Thank you. Iris, hi. Good morning—and, well, afternoon. Thank you for taking my two questions. The first one is on guidance. You've done 70% of the full-year midpoint already in H1.

[Analyst] (Goldman): Thank you. Yes. Hi, good morning and afternoon. Thank you for taking my two questions. The first one is on guidance. You have done 70% of full year midpoint already in H1. So basically, you are guiding EUR 900 million essentially net income for H2. Last year, you did EUR 1.1 billion. Because you had some value neutral timing effects last year, would you be able to provide maybe a bridge between H2 2025 and H2 2026 as you see it today? Because I am really struggling not to be EUR 2.93 billion, let us say, to see EUR 2.93 billion, given what you just reported right now. I was trying to see what I am missing. Is it you being overly prudent, perhaps, and then maybe you give us an update in November again. The second question is, again, going to this German distribution grid package.

Speaker #6: So basically, you're guiding €900 million, essentially in net income for H2. Last year, you did €1.1 billion. So, because you had some value-neutral timing effects last year, would you be able to provide maybe a bridge between H2 2025 and H2 2026 as you see it today?

Speaker #6: Because I'm really struggling not to be €2.93 billion, let's say, to see €2.93 billion given what you just reported right now. So I was trying to see what I'm missing.

Speaker #6: Or is it you being overly prudent, perhaps, and then maybe you give us an update in November again? So the second question is, again going to this German distribution grid package—I understood from the economic reform package that the coalition put out in the summer that there was also going to be, essentially, a sort of infrastructure plan in power distribution.

[Analyst] (Goldman): I understood from the economic reform package that the coalition put out in the summer, that there was going to be also essentially a sort of an infrastructure plan in power distribution. Should we also expect a hard CapEx number from this German package by year-end? If so, when can we assume that you can start embedding that CapEx number in your business plan, even though the parliamentary approval is next year? Does it mean we need to wait for March 2028 for you to embed all of this into your business plan, or can that happen sooner? Do you have enough visibility sooner? Thank you.

Speaker #6: So, should we also expect a hard capex number from this German package by year-end? And if so, when can we assume that you can start embedding that capex number in your business plan, even though the parliamentary approval is next year?

Speaker #6: Does it mean we need to wait for March 28th for you to embed all of this into your business plan, or can that happen sooner?

Speaker #6: So do you have enough visibility sooner? Thank you.

Speaker #4: Sure. I'll continue with the grid package and then the Army guidance again to Nadia. So first, on the infrastructure plan—first, we don't know what the final package will really contain, Alberto.

[Company Representative] (E.ON): I continue with the Grid Package and then the ANI guidance again to Nadia. First, on the infrastructure plan. We do not know what the final package will really contain, Alberto. I just mentioned that a list of 32 points was mentioned, what should or maybe could potentially be in the distribution grids package. But actually, I do not assume that we will get a detailed infrastructure plan that provides a CapEx number from the legislative package. I assume we will get that from the grid development plan, which we do anyway, irrespective of the grid distribution package.

Leo Birnbaum: I continue with the Grid Package and then the ANI guidance again to Nadia. First, on the infrastructure plan. We do not know what the final package will really contain, Alberto. I just mentioned that a list of 32 points was mentioned, what should or maybe could potentially be in the distribution grids package. But actually, I do not assume that we will get a detailed infrastructure plan that provides a CapEx number from the legislative package. I assume we will get that from the grid development plan, which we do anyway, irrespective of the grid distribution package.

Speaker #4: I just mentioned that, you know, a list of 32 points was mentioned—what should or maybe could potentially be in the distribution grids package.

Speaker #4: But actually, I do not assume that we will get a detailed infrastructure plan that provides a capex number from the legislative package. I assume we will get that from the grid development plan, which we do anyway, irrespective of the grid distribution package.

Speaker #4: So, what we're currently doing in 2026 is that we are working on a revision of the nets and victims plan, the grid development plan, on the German level.

[Company Representative] (E.ON): What we are currently doing in 2026 is that we are working on a revision of the Netzentwicklungsplan, the grid development plan, on the German level, which is deriving the development needs, the investment needs of the German grid, and it is a process run by the TSOs and really the large DSOs, especially E.ON. It covers actually the high voltage and the extremely high voltage, so the 110 kV upwards. It does not cover medium voltage and low voltage. This revision of the process will deliver a number somewhere at the end of 2026. Probably that number will be higher than the number of 2024, but only for the 110 kV. It does not really say something about the total investment needs of E.ON, again, as I said, because it does not cover the lower voltage levels.

Leo Birnbaum: What we are currently doing in 2026 is that we are working on a revision of the Netzentwicklungsplan, the grid development plan, on the German level, which is deriving the development needs, the investment needs of the German grid, and it is a process run by the TSOs and really the large DSOs, especially E.ON. It covers actually the high voltage and the extremely high voltage, so the 110 kV upwards. It does not cover medium voltage and low voltage. This revision of the process will deliver a number somewhere at the end of 2026. Probably that number will be higher than the number of 2024, but only for the 110 kV. It does not really say something about the total investment needs of E.ON, again, as I said, because it does not cover the lower voltage levels.

Speaker #4: Which is deriving the development needs, the investment needs of the German grid. And it's a process run by the TSOs and really the large DSOs, especially E.ON.

Speaker #4: And it actually covers the high voltage and the extremely high voltage, so the 110 kV and upwards. It does not cover medium voltage and low voltage.

Speaker #4: Now, this revision of the process will deliver a number somewhere at the end of 2026. Probably that number will be higher than the number of 2024, but only for the 110 kV.

Speaker #4: It doesn't really say anything about the total investment needs of E.ON, again, as I said, because it doesn't cover the lower voltage levels. But anyway, I think the key point is that investment needs are going up because requests for grid infrastructure are increasing, and because the grid is already experiencing, you know, kind of being at the limits of what it can do.

[Company Representative] (E.ON): But in any way, I think the key point is, investment needs are going up because requests for grid infrastructure are going up, and because the grid is already experiencing, kind of like being at the limits of what it can do. For us, I can only see upside coming from that. We will incorporate the high voltage level developments into our investment plans because we are obliged to do so. The grid development plan is a legal basis for us, for our own investment plans, so we will incorporate that. But on the other side, the real increase of the total investment, that depends on the regulation, and that depends on how we include the other voltage levels. On that side, the Grid Development Package is not as important as you might see at the first moment in time, but here comes the connection.

Leo Birnbaum: But in any way, I think the key point is, investment needs are going up because requests for grid infrastructure are going up, and because the grid is already experiencing, kind of like being at the limits of what it can do. For us, I can only see upside coming from that. We will incorporate the high voltage level developments into our investment plans because we are obliged to do so. The grid development plan is a legal basis for us, for our own investment plans, so we will incorporate that. But on the other side, the real increase of the total investment, that depends on the regulation, and that depends on how we include the other voltage levels. On that side, the Grid Development Package is not as important as you might see at the first moment in time, but here comes the connection.

Speaker #4: So for us, I can only see upside coming from that. We will incorporate the high-voltage level developments into our investment plans because we are obliged to do so.

Speaker #4: The grid development plan is a legal basis for us for our own investment plans, so we will incorporate that. But on the other side, the real increase of the total investment—that depends on the regulation, and that depends on how we include the other voltage levels.

Speaker #4: So that's why, on that side, the grid development package is not as important as you might see at the first moment in time, but here comes the connection.

Speaker #4: Obviously, the 110 kV is the part, you know, is what is covered in the grid development plan. And that is covered also by the permitting acceleration that we expect.

[Company Representative] (E.ON): Obviously, the 110 kV is the part, is what is covered in the grid development plan, and that is covered also by the permitting acceleration that we expect.

Leo Birnbaum: Obviously, the 110 kV is the part, is what is covered in the grid development plan, and that is covered also by the permitting acceleration that we expect.

Speaker #1: So regarding the army development, you know, first of all, you know, also on the EBDA side, we have also that the past oversight is stronger in H1 than in H2 as part of the normal seasonal pattern.

Nadia Jakobi: Regarding the ANI development, first of all, also on the EBITDA side, we have also in the past always had a stronger H1 than H2 as part of the normal seasonal pattern. Then, as I have just said to Wanda, we are expecting the midpoint to be the best estimate. You have been seeing that we have been already done some significant part of our refinancing over the course of the year, and some of the low-maturing, low interest rate bonds have matured, and we had to finance that at attractive, but at current market price levels.

Speaker #1: Then we know, as I have just said to Wanda, we are expecting the midpoint to be the best estimate. You have been seeing that we have been already done some significant part of our refinancing over the course of the year.

Speaker #1: And some of the low-maturing, low-interest-rate bonds have matured. And we had to refinance that at attractive, but current market price levels.

Speaker #1: You have seen that when you look at Q1, we had an increase in net income quarter over quarter of 7%. That has now started to normalize, going down to 5%.

Nadia Jakobi: You have seen that when you look at Q1, we had an ANI increase, adjusted net income increase, quarter-over-quarter of 7% that has now started to normalize to go down to 5%, and we expect that to continue to be broadly flat than by year-end, mainly due to the fact that interest expenses will increase.

Speaker #1: And we expect that to continue to be broadly flat by year-end, mainly due to the fact that interest expenses will increase.

Speaker #6: And yes, sorry, if you allow me—am I wrong in understanding that flat growth versus last year would be essentially over a billion, like $1.1 billion, though, in the second half of net income?

[Analyst] (Goldman): Alicia, sorry, if you allow me. Am I wrong in understanding flat growth versus last year would be essentially over EUR 1 billion, like EUR 1.1 billion, though, in the second half of net income? That is why it sounds. Or if we want to go away from numbers, are we in agreement that sticking to the midpoint, if there are no unforeseen events, most likely is very prudent?

Speaker #6: So that's why it's some—or, if we want to go away from numbers, are we in agreement that sticking to the midpoint, if there are no unforeseen events, most likely is very prudent?

Nadia Jakobi: I do not go there. I can just reiterate what I have said earlier, that with what we know now, the midpoint is the best estimate.

Speaker #1: I don't go—I don't go there. I can just reiterate what I have said earlier, i.e., that, you know, with what we know now, the midpoint is the best estimate.

Speaker #6: I tried. Thank you so much.

[Analyst] (Goldman): I tried. Thank you so much.

Speaker #1: Thank you, Alberto. And with that, we come to the next question, which comes from James Brand from Deutsche Bank. Hi, James.

Iris Eveleigh: Thank you, Alberto. With that, we come to the next question, which comes from James Brand, from Deutsche Bank. Hi, James.

Speaker #7: Right. Hi. Good afternoon—sorry, good morning, everyone. I'll stick to two questions and try not to make them any kind of two- or three-parters.

James Brand: Right. Hi. Good afternoon. Sorry. Good morning, everyone. I will stick to two questions, I think, and try not to make them any kind of two or three parters. Just on connections, there has been a lot of discussion around connections today. Obviously, I note the answer to one of the earlier questions, which is, it is not just about the direct cost of connection because it puts more pressure on the overall system and therefore you and that is close to capacity, and therefore you need more investment in the overall system. If we are just literally thinking about the connections CapEx, I was wondering if you could tell us, roughly what proportion of your overall CapEx is directly going into connections. So we can do the kind of obvious times two at some point. Again, noting that there will be kind of tangential CapEx that will come alongside that.

Speaker #7: The, just on connections, there's been a lot of discussion around connections today and obviously I kind of note the answer to one of the earlier questions, which is it's not just about the direct cost of connection because it puts more pressure on the overall system and therefore you and that's close to capacity and therefore you need more investment in the overall system.

Speaker #7: But if we're just literally thinking about the connections CapEx, I was wondering if you could tell us, like, roughly what proportion of your overall CapEx is directly going into connections.

Speaker #7: So we can do the kind of obvious times two at some point, but again, noting that there'll be kind of tangential CapEx that will come alongside that.

James Brand: Again, noting that there will be kind of tangential CapEx that will come alongside that. That is the first question. There has also been quite a few questions on the gas WACC consultation. I guess my question for you would be, obviously, you said that you are looking for kind of a clear signal from the regulator that the outcome of the regulatory review process as a whole is going to be acceptable, and you have kind of said at points that if we got that clear signal, we could step up CapEx earlier. This is obviously the focal point for the people looking at this year is this consultation on gas. You have also said at the same time that there is not necessarily that much read across.

Speaker #7: That's the first question. And then there's also been quite a few questions on the Gas WACC consultation, and I guess my question for you would be: obviously, you've said that you are looking for a clear signal from the regulator that the outcome of the regulatory review process as a whole is going to be acceptable, and you've kind of set the point that if we got that clear signal, we could step up capex earlier.

James Brand: That is the first question. There has also been quite a few questions on the gas WACC consultation. I guess my question for you would be, obviously, you said that you are looking for kind of a clear signal from the regulator that the outcome of the regulatory review process as a whole is going to be acceptable, and you have kind of said at points that if we got that clear signal, we could step up CapEx earlier. This is obviously the focal point for the people looking at this year is this consultation on gas. You have also said at the same time that there is not necessarily that much read across. So my question is it feasible that there could actually be enough in this gas WACC consultation that would give you the visibility that you feel like you need to increase CapEx?

Speaker #7: And this is obviously the focal point that people are looking at this year—this consultation on gas. But you've also said at the same time that there isn't necessarily that much read-across.

Speaker #7: So my question is, is it feasible that there could actually be enough in this GasWAG consultation that would give you the visibility that you feel you need to increase capex?

James Brand: So my question is it feasible that there could actually be enough in this gas WACC consultation that would give you the visibility that you feel like you need to increase CapEx? And if that was to come, what would that mean exactly? That would mean a really good beta, an equity risk premium or something else? Thanks.

Speaker #7: And if that was to come, what would that mean exactly? That would mean a really good beta and equity risk premium, or something else?

James Brand: And if that was to come, what would that mean exactly? That would mean a really good beta, an equity risk premium or something else? Thanks.

Speaker #7: Thanks.

Speaker #4: Yeah, James, on the connections—indeed, you pointed out correctly that it’s not only about the connection; it’s also usually the reinforcement behind the connection point that is really the bottleneck.

[Company Representative] (E.ON): Well, James, on the connections, indeed, you pointed out correctly that it is not only about the connection, it is also usually the reinforcement behind the connection point that is really the bottleneck. For example, you take data centers. Our ability to connect data centers is less driven by the fact whether we can actually put a switch yard in place. The real point is we partially need, for example, additional feed-in points from the transmission grid into the high voltage grids to then provide power to the data center. So what needs to happen beyond the connection is then a reinforcement of the 110 kV, then a reinforcement of the connection between the 110 kV and the TSO. So it is absolutely right, as you pointed out, that there is more to it. Now, just a few additional numbers.

Leo Birnbaum: Well, James, on the connections, indeed, you pointed out correctly that it is not only about the connection, it is also usually the reinforcement behind the connection point that is really the bottleneck. For example, you take data centers. Our ability to connect data centers is less driven by the fact whether we can actually put a switch yard in place. The real point is we partially need, for example, additional feed-in points from the transmission grid into the high voltage grids to then provide power to the data center. So what needs to happen beyond the connection is then a reinforcement of the 110 kV, then a reinforcement of the connection between the 110 kV and the TSO. So it is absolutely right, as you pointed out, that there is more to it. Now, just a few additional numbers.

Speaker #4: For example, you take data centers—our ability to connect data centers is less driven by the fact of whether we can actually put a, you know, a switchyard in place.

Speaker #4: The real point is we partially need, for example, additional feed-in points from the transmission grid into the high-voltage grids to then provide power to the data center.

Speaker #4: And so, what needs to happen beyond the connection is then a reinforcement of the 110 kV, then a reinforcement of the connection between the 110 kV and the TSO.

Speaker #4: So it's absolutely right as you pointed out that, you know, it's like there's more to it. Now, just a few additional numbers when we're looking at connections, only at connections, grid connections in Germany, we are seeing that they're continuing on the high level that we have already seen last year.

[Company Representative] (E.ON): When we are looking at connections, only at connections, grid connections in Germany, we are seeing that they are continuing on the high level that we have already seen last year. We had connections around 200,000 this year in Germany of new assets, which is roughly half of what we had last year. But if you look at the connection requests, we actually see an increase in connection requests, which points to a higher need going forward. Now, we do not know what the percentage is of the pure cost, the cost percentages of the pure connection versus the reinforcement. Let me just explain to you with an example why that is the case. If we, for example, look at our northern German grid in Schleswig-Holstein, between the Baltic Sea and the North Sea, we are roughly doubling all the transformation stations.

Leo Birnbaum: When we are looking at connections, only at connections, grid connections in Germany, we are seeing that they are continuing on the high level that we have already seen last year. We had connections around 200,000 this year in Germany of new assets, which is roughly half of what we had last year. But if you look at the connection requests, we actually see an increase in connection requests, which points to a higher need going forward. Now, we do not know what the percentage is of the pure cost, the cost percentages of the pure connection versus the reinforcement. Let me just explain to you with an example why that is the case. If we, for example, look at our northern German grid in Schleswig-Holstein, between the Baltic Sea and the North Sea, we are roughly doubling all the transformation stations.

Speaker #4: We had connections of around 200,000 new assets this year in Germany, which is roughly half of what we had last year. But if you look at the connection requests, we actually see an increase in connection requests, which points to a higher need going forward.

Speaker #4: Now, we do not know what the percentage is of the pure cost—the cost percentages of the pure connection versus the reinforcement. And let me just explain to you with an example why that is the case.

Speaker #4: If we, for example, look at our northern German grid in Schleswig-Holstein between the Baltic Sea and the Northern Sea, we are roughly doubling all the transforming all the transformation stations.

Speaker #4: It's clear that all these transformation stations, this doubling is part of that is reinforcement and part of that is at the same time providing the ability for somebody to connect.

[Company Representative] (E.ON): It is clear that all these transformation stations, this doubling, part of that is reinforcement, and part of that is at the same time providing the ability for somebody to connect. Now, if you ask me how much of the doubling now goes to connection, because I really do not know. We do not account for it. However, if we have now more customers coming in and we are obliged to connect them, then actually the direct connection cost would go up, but we would keep the CapEx number stable, and then we would do a push reinforcement out. So it is not that if connection goes up by 20%, the respective cost item goes up and our investment envelope goes up. We keep our investment envelope constant in the planning period, and then we reshuffle a little bit.

Leo Birnbaum: It is clear that all these transformation stations, this doubling, part of that is reinforcement, and part of that is at the same time providing the ability for somebody to connect. Now, if you ask me how much of the doubling now goes to connection, because I really do not know. We do not account for it. However, if we have now more customers coming in and we are obliged to connect them, then actually the direct connection cost would go up, but we would keep the CapEx number stable, and then we would do a push reinforcement out. So it is not that if connection goes up by 20%, the respective cost item goes up and our investment envelope goes up. We keep our investment envelope constant in the planning period, and then we reshuffle a little bit.

Speaker #4: Now, if you ask me how much of the doubling now goes to connection, I really don't know. Yeah. And we do not account for it.

Speaker #4: However, if we now have more customers coming in and we are obliged to connect them, then actually the direct connection cost would go up, but we would keep their capex number, you know, stable, and then they would do a push reinforcement out.

Speaker #4: So, it's not that if connections go up by 20%, the respective cost item goes up and our investment envelope goes up. We keep our investment envelope constant in the planning period.

Speaker #4: And then we reshuffle a little bit. We would then, for example, probably do less modernization to make sure that we still can do the capacity expansion.

[Company Representative] (E.ON): We would then, for example, do probably less modernization to make sure that we still can do the capacity expansion. Obviously, we can do that only for a limited period of time.

Leo Birnbaum: We would then, for example, do probably less modernization to make sure that we still can do the capacity expansion. Obviously, we can do that only for a limited period of time.

Speaker #4: Obviously, we can do that only for a limited period of time.

Speaker #1: Yeah. And if you have a sort of waterfall park, you could say grid buildout including new connections is approximately two-thirds of the capex envelope, and approximately one-third is replacing and risk mitigation in our current envelope.

Nadia Jakobi: Yeah. If you have sort of waterfall park, you could say grid built out, including new connections, approximately two thirds of the CapEx envelope and approximately one third is replacing and risk mitigation in our current envelope.

Speaker #1: Okay. Then yes, gas whack. So when you look at the gas whack, you know, you summarized correctly that we from the nominal number, we just have an immediate we expect immediate read across only from the market risk premium.

Nadia Jakobi: Okay.

[Company Representative] (E.ON): Gas WACC.

Leo Birnbaum: Gas WACC.

Nadia Jakobi: Yes, Gas WACC. When you look at the Gas WACC, you summarized correctly that from the nominal numbers, we expect immediate read-across only from the market risk premium, because all other numbers, we might get a read-across how the methodology has been utilized. From the number, we do not expect a direct read-across. What we do not know how much read-across is in the overall publication, i.e., there might be the opportunity that there are more hints on the methodology, also how the electricity grid charges will be computed. As you remember, when you look back at the end of last year, we were a bit disappointed that we got less clarity on how exactly the different elements are being computed, and there might be an opportunity to get some more out of that.

Speaker #1: Because all other numbers we might get a read across how the methodology has been utilized, but from the number, we don't expect a direct read across.

Speaker #1: We also don’t know how much read-across is in the overall publication, i.e., there might be the opportunity that there are more hints on the methodology, also how the electricity grid charges will be computed.

Speaker #1: As you remember, when you look back at the end of last year, we were a bit disappointed that we got less clarity on how exactly the different elements are being computed, and there might be—there might be—an opportunity to get some more out of that.

Speaker #1: And to summarize, and that's I guess what we always said: when we increase our capex envelope, it's very much looking at the overall scheme, and is very much path-dependent.

Nadia Jakobi: To summarize, and that is, I guess, what we always said, when we increase our CapEx envelope is very much looking at the overall scheme and is very much path dependent here. First of all, at this point, we still have this one negative with the seven-year lookback period, and first then it needs to be overcompensated by some more positive elements, in order for us to get security black on white that there is going to be a positive regulatory scheme in place. It is like the overall. Of course, as you know, we very thoroughly analyze the Gas publication, which is due in the next few days, and then we will take our decisions from there.

Speaker #1: You know, first of all, at this point, we still have this one negative with the seven-year look-back period. And first, then it needs to be overcompensated by some more positive elements.

Speaker #1: In order for us to get security, black on white, that there’s going to be a positive regulatory scheme in place. But it’s like the overall—and, of course, before, you know, we will—as you know, we will very thoroughly analyze the gas publication, which is due in the next few days.

Speaker #1: And then we will take our decisions from there.

Speaker #5: Great. Thank you very much.

[Company Representative] (E.ON): Great. Thank you very much.

Leo Birnbaum: Great. Thank you very much.

Speaker #1: Thank you, James. With that, we come to the next question from Louis from Otto. Hi, Louis.

Iris Eveleigh: Thank you, James. With that, we come to the next question from Louis from Oddo. Hi, Louis.

Speaker #6: Yes, hi. Good morning, and thank you for the presentation and for taking my question. Maybe the first one regarding the grid connection again: requests increased by approximately 20% year-on-year.

[Analyst] (Oddo): Yes, hi. Good morning, and thank you for the presentation and taking my question. Maybe the first one regarding the grid connection again, request increased by approximately 20% year-on-year. What proportion of this requested capacity do you realistically expect to result in actual completed connection? Does the trend is in line with what you expected, for instance, last year? Maybe in parallel to this question, to what extent the flexible connection agreement can increase the utilization of existing grid capacity? Can you quantify the network investment that could be deferred as a result of the flexible connection agreement? My second question would be more straightforward on Energy Infrastructure Solutions. You delivered 19% EBITDA growth. How much came from structural investment debt growth, and how much could be seen as a temporary weather and procurement effect? Thank you very much.

[Analyst] (ODDO BHF): Yes, hi. Good morning, and thank you for the presentation and taking my question. Maybe the first one regarding the grid connection again, request increased by approximately 20% year-on-year. What proportion of this requested capacity do you realistically expect to result in actual completed connection? Does the trend is in line with what you expected, for instance, last year? Maybe in parallel to this question, to what extent the flexible connection agreement can increase the utilization of existing grid capacity? Can you quantify the network investment that could be deferred as a result of the flexible connection agreement? My second question would be more straightforward on Energy Infrastructure Solutions. You delivered 19% EBITDA growth. How much came from structural investment debt growth, and how much could be seen as a temporary weather and procurement effect? Thank you very much.

Speaker #6: What proportion of this requested capacity do you realistically expect to result in actual completed connection? And is the trend in line with what you expected, for instance, last year?

Speaker #6: And maybe in parallel to this question: to what extent can the flexible connection agreement increase the utilization of existing grid capacity? And can you quantify the network investment that could be deferred as a result of the flexible connection agreement?

Speaker #6: My second question would be more straightforward—on Energy Infrastructure Solutions. So, you delivered 19% EBITDA growth. How much of that came from structural, investment-led growth, and how much could be seen as a temporary weather and procurement effect?

Speaker #6: Thank you very much.

Speaker #4: Yeah, Louis. On grid connection—so, let me rephrase the grid connection requests that we are receiving. We are assuming that a large share of that will never materialize.

[Company Representative] (E.ON): Yeah, Louis. Let me rephrase. The grid connection requests that we are receiving, we are assuming that a large share of that will never materialize, either because it was speculative from the beginning, and if we can't provide the connection, then the whole project just disappears. If I see, for example, a battery request of several hundred gigawatts, it's clear that we are not going to build several hundred gigawatts of capacity in Germany because there will be no economic case for that. For us, the problem is that we need to process all those requests anyway, knowing that, let me say, 80% of that will just disappear. Maybe 80% is the number to take. If we take, for example, data centers. On data centers, we have requests of around 80.

Leo Birnbaum: Yeah, Louis. Let me rephrase. The grid connection requests that we are receiving, we are assuming that a large share of that will never materialize, either because it was speculative from the beginning, and if we can't provide the connection, then the whole project just disappears. If I see, for example, a battery request of several hundred gigawatts, it's clear that we are not going to build several hundred gigawatts of capacity in Germany because there will be no economic case for that. For us, the problem is that we need to process all those requests anyway, knowing that, let me say, 80% of that will just disappear. Maybe 80% is the number to take. If we take, for example, data centers. On data centers, we have requests of around 80.

Speaker #4: Either because it was speculative from the beginning, and since we can't—and if we can't provide the connection—then the whole project just disappears.

Speaker #4: And therefore, so if I see, for example, battery requests of several hundred gigawatts, it's clear that we are not going to build several hundred gigawatts of capacity in Germany because there will be no economic case for that.

Speaker #4: For us, the problem is that we need to process all those requests anyway, knowing that, let me say, 80% of them will just disappear.

Speaker #4: And maybe 80% is a number to take. So if we take, for example, data centers—on data centers, we have requests of around 80.

Speaker #4: We have given grid connection consent for 13 gigawatts of that, which is then roughly 15%. And we currently have connected one to two gigawatts.

[Company Representative] (E.ON): We have given a grid connection consent of 13 gigawatts of that, which is then roughly 15%, and we currently have connected 1 to 2 gigawatts. So that's the numbers, 80, 15, 1 to 2. If you look at batteries, we have requests of 700 gigawatts. We have given consent to connect to 26 gigawatts, and we have connected 2 gigawatts, with which we are, by the way, the market leader in distribution, clearly in Germany. So that gives you a realistic expectations. On the FCAs, I personally expect that all batteries that will be connected in the future will need to be part of a flexible connection agreement, especially if the batteries do not pay grid fees, which is the current regulation. They should also not burden the capacity of the grid, because otherwise, why would you exempt them from grid fees?

Leo Birnbaum: We have given a grid connection consent of 13 gigawatts of that, which is then roughly 15%, and we currently have connected 1 to 2 gigawatts. So that's the numbers, 80, 15, 1 to 2. If you look at batteries, we have requests of 700 gigawatts. We have given consent to connect to 26 gigawatts, and we have connected 2 gigawatts, with which we are, by the way, the market leader in distribution, clearly in Germany. So that gives you a realistic expectations. On the FCAs, I personally expect that all batteries that will be connected in the future will need to be part of a flexible connection agreement, especially if the batteries do not pay grid fees, which is the current regulation. They should also not burden the capacity of the grid, because otherwise, why would you exempt them from grid fees?

Speaker #4: So that's the numbers: 80, 15, one to two. If you look at batteries, we have requests of 700 gigawatts. We have given consent to connect to 26 gigawatts.

Speaker #4: And we have connected 2 gigawatts, with which we are, by the way, the market leader in distribution—clearly in Germany. So that gives you realistic expectations.

Speaker #4: On the FCAs, I personally expect that all batteries that will be connected in the future will need to be part of a flexible connection agreement, especially if the batteries do not pay grid fees, which is the current regulation.

Speaker #4: They should also not burden the capacity of the grid because, otherwise, why would you exempt them from grid fees? And flexible connection agreements, in the end, do exactly that.

[Company Representative] (E.ON): Flexible connection agreements, in the end, do exactly that. They ask the battery operators to behave in a way that they do not increase the load on the grid, but they actually really improve the situation in the grid. We are not trying to prevent batteries from being connected. Actually, the FCAs will allow more batteries to be connected than without an FCA. Take an example. If you have a 100-megawatt battery which has no FCA, it actually needs 200 megawatts of grid capacity because it can charge 100 and it can feed in and pull 100 megawatts, so it needs 200 megawatts of grid capacity. Whilst if you have an FCA, it needs zero, because then it's grid neutral. Obviously, grid connection will improve by the FCAs. I cannot quantify how much CapEx that will actually then prevent.

Leo Birnbaum: Flexible connection agreements, in the end, do exactly that. They ask the battery operators to behave in a way that they do not increase the load on the grid, but they actually really improve the situation in the grid. We are not trying to prevent batteries from being connected. Actually, the FCAs will allow more batteries to be connected than without an FCA. Take an example. If you have a 100-megawatt battery which has no FCA, it actually needs 200 megawatts of grid capacity because it can charge 100 and it can feed in and pull 100 megawatts, so it needs 200 megawatts of grid capacity. Whilst if you have an FCA, it needs zero, because then it's grid neutral. Obviously, grid connection will improve by the FCAs. I cannot quantify how much CapEx that will actually then prevent.

Speaker #4: They ask the battery operators to behave in a way that they do not increase the load on the grid, but in fact, they really improve the situation in the grid.

Speaker #4: We are not trying to prevent batteries from being connected. Actually, the FCAs will allow more batteries to be connected than without an FCA. And take an example: if you have a 100-megawatt battery, which has no FCA, it actually needs 200 megawatts of grid capacity, because it can charge a hundred—and, you know, it can feed in and pull a hundred megawatts.

Speaker #4: So it needs 200 megawatts of grid capacity, whereas if you have an FCA, it needs zero, because then it's grid-neutral. And so, obviously, grid connection will improve by the FCAs.

Speaker #4: I do not—I cannot quantify how much capex that will actually then prevent that. Depends on what, but it's—it's exact, but it's the right thing to do.

[Company Representative] (E.ON): That depends on what, but it is the right thing to do. Maybe one additional point, flexible connection agreements will become a topic also for non-batteries in the future if we see the current development, because clearly, otherwise, the ability to connect fast will be limited. I think this is a key topic. E.ON is trying to be a playmaker here by putting standards out into the market, which then we can improve jointly together with other market participants, and I think that is for the benefit of all.

Leo Birnbaum: That depends on what, but it is the right thing to do. Maybe one additional point, flexible connection agreements will become a topic also for non-batteries in the future if we see the current development, because clearly, otherwise, the ability to connect fast will be limited. I think this is a key topic. E.ON is trying to be a playmaker here by putting standards out into the market, which then we can improve jointly together with other market participants, and I think that is for the benefit of all.

Speaker #4: And maybe one additional point: flexible connection agreements will become a topic also for non-batteries in the future, if we see the current development, because clearly otherwise the ability to connect fast will be limited.

Speaker #4: So, I think this is a key topic. E.ON is trying to be a playmaker here by putting standards out into the market, which we can then improve jointly together with other market participants, and I think that's for the benefit of all.

Speaker #1: Yeah. Now I will take the ICE question. So, you know, this time shift in the procurement input cost effect, that's approximately $20 million, give or take.

Nadia Jakobi: Yeah. Now I will take the EIS question. This time shift in the procurement input cost effect, that is approximately EUR 20 million, give or take. That is not a one-off effect, but it was just that in the previous years, we were not yet allowed to lift pass through, but the pass through was a bit delayed. That is not a one-off, but an operational effect. But just compared to the baseline of last year, this shows now a more normalized earnings, which was not possible already in last year. The second topic, the remainder is then approximately on organic growth, new projects coming online.

Speaker #1: You know, that is not a one-off effect, but it was just that in previous years we were not yet allowed to pass through. But the pass-through is a bit delayed.

Speaker #1: So, that is not a one-off, but an operational effect. But just compared to the baseline of last year, this shows now a more normalized earnings, which wasn't possible already in last year.

Speaker #1: And the second topic, so the remainder is then approximately on organic growth, new projects coming online. Thank you. And with that, we have a question from Ahmed from Jefferies.

Iris Eveleigh: Thank you. With that, we have the question from Ahmed from Jefferies.

Speaker #5: Yes. Hi. Hi, Leo. Hi. I have two questions. Just on the gas spec, or maybe ultimately getting to a point where you have an overall understanding of the power regulation. It seems like there will be some read across, but then there are elements like the cost of debt approach, potentially elements of the cost of equity such as equity BTAC, et cetera.

[Analyst] (Jefferies): Yes. Hi, Leo. Hi, Nadia. I have two questions. Just on the Gas WACC, or maybe ultimately getting to a point where you have an overall understanding of the power regulation. It seems like there will be some read across, but then there are elements like the cost of debt approach, potentially elements of the cost of equity, such as equity beta, et cetera, that would have limited read across. Obviously, there is the benchmarking aspect that you have mentioned in the past. Firstly, am I right in categorizing that these are some of the key parameters where still more visibility might be required post the Gas WACC update? Do you expect any sort of update on these three key parameters in the next six months or so? That is my first question.

Speaker #5: That would have limited read-across. And obviously, there's sort of the benchmarking aspect that you have mentioned in the past. Firstly, am I right in sort of categorizing that these are some of the key parameters where still more visibility might be required post the gas spec update?

Speaker #5: And do you expect any sort of update on these three key parameters in the next six months or so? So that's my first question.

Speaker #5: And then secondly, just interested in understanding how the current weather situation that we are seeing in parts of your sort of portfolio in the UK, the heat wave, how what's the how should we think about the economic impact of that on the business, if any?

[Analyst] (Jefferies): And then secondly, just interested in understanding how the current weather situation that we are seeing in parts of your portfolio in the UK, the heat wave. How should we think about the economic impact of that on the business, if any? Thank you.

Speaker #5: Thank you.

Speaker #1: Yeah, maybe let me start then on the gas spec. You know, I think we have set out the timelines when we expect more official news to come.

Nadia Jakobi: Yeah. Let me start then on the Gas WACC. I think we have set out the timelines when we expect more official news to come. So we will have the Gas WACC draft consultation now, then final determination by the end of the year. The next year, that is then all moved for one year for power. So we will expect the power draft determination also sometime around mid of the year, and then the final determination at the end of the year. Then the final conclusion on the power side when it comes to cost allowance, when it comes to efficiency factors, when it comes about OpEx adjustment factors and all the respective things that are included in the benchmarking we expect for 2028 for power. But if there is no change, I think we have clearly set out the guidelines or the timelines in all of our IR material.

Speaker #1: So, we will have the gas spec draft consultation now, then final determination by the end of the year. And next year, that's then all moved for one year for power.

Speaker #1: So, we'll expect the power draft determination also sometime around the middle of the year, and then the final determination at the end of the year.

Speaker #1: And then the final conclusion on the power side, when it comes to cost allowance, when it comes to efficiency factors, when it comes about OPEX adjustment factors and all the respective things that are included in the benchmarking, we expect for 2028 for power.

Speaker #1: But there's no change. I think we have clearly set out the guidelines in some of our guidelines, not the timelines, in all of our IR material.

Nadia Jakobi: But if there is no change, I think we have clearly set out the guidelines or the timelines in all of our IR material. And basically, I can confirm that the elements that you have highlighted are some of the very relevant topics, X-gen factor, et cetera. The typical factors that we have been highlighting also in the IR material. But you have summarized it well.

Speaker #1: So, basically, I can confirm that the elements you have highlighted are some of the very relevant topics—gen factor, et cetera. These are the typical factors that we have been highlighting also in the IR material.

Nadia Jakobi: And basically, I can confirm that the elements that you have highlighted are some of the very relevant topics, X-gen factor, et cetera. The typical factors that we have been highlighting also in the IR material. But you have summarized it well.

Speaker #1: But you have summarized it well.

[Company Representative] (E.ON): And on the weather, obviously quite an interesting situation right now. Maybe I focus a little bit on our Southeastern European markets in Hungary and Romania, where the situation is the most challenging one right now regarding the weather. Why? Because those markets are impacted by the heat wave and actually less connected to the overall European grid. Especially when you look at Hungary, you can clearly see it. So the impact for us is limited there. Our key business is first, obviously distribution. As the distribution operators, we are involved into the task forces that the governments have set up to make sure that the situation stays stable. So far, it has been possible to counteract the effect of the less production, for example, by Cernavodă and by Paks with respective demand reduction on the industrial side, voluntary reduction.

Leo Birnbaum: And on the weather, obviously quite an interesting situation right now. Maybe I focus a little bit on our Southeastern European markets in Hungary and Romania, where the situation is the most challenging one right now regarding the weather. Why? Because those markets are impacted by the heat wave and actually less connected to the overall European grid. Especially when you look at Hungary, you can clearly see it. So the impact for us is limited there. Our key business is first, obviously distribution. As the distribution operators, we are involved into the task forces that the governments have set up to make sure that the situation stays stable. So far, it has been possible to counteract the effect of the less production, for example, by Cernavodă and by Paks with respective demand reduction on the industrial side, voluntary reduction.

Speaker #4: And on the weather, obviously, quite an interesting situation right now. Maybe I'll focus a little bit on our southeastern European markets, in Hungary and Romania, where the situation is the most challenging one right now.

Speaker #4: Regarding the weather, why? Because those markets are impacted by the heat wave and are actually less connected to the overall European grid. Especially when you look at Hungary, you can clearly see it.

Speaker #4: So the impact for us is limited there. Our key business is, first, obviously, distribution. Now, as distribution operators, we are involved in the task forces that the governments have set up to make sure that the situation stays stable.

Speaker #4: So far, it has been possible to counteract the effect of the lower production, for example by Chernobod and by Paks, with respective demand reduction on the industrial side—voluntary reduction.

Speaker #4: So we have not been forced to make involuntary reductions, and we have been able to continue to provide power to all our customers. Insofar, the situation has softened a little bit, but it will remain tense.

[Company Representative] (E.ON): We have not been forced to make unvoluntary reductions, and we have been able to continue to provide power to all our customers. Insofar, the situation has softened a little bit, but it will remain tense. The solution for that is a better integration of Southeastern Europe into the European market, which is something that those countries are asking for anyway because they are looking at elevated price levels. We do not see any significant financial impacts on networks and on the retail UK on whether at this point we also see no material impact. In that sense, it is more an operational challenge for us, where we need to be part of the solution, but it is not that we expect any financial impact from that.

Leo Birnbaum: We have not been forced to make unvoluntary reductions, and we have been able to continue to provide power to all our customers. Insofar, the situation has softened a little bit, but it will remain tense. The solution for that is a better integration of Southeastern Europe into the European market, which is something that those countries are asking for anyway because they are looking at elevated price levels. We do not see any significant financial impacts on networks and on the retail UK on whether at this point we also see no material impact. In that sense, it is more an operational challenge for us, where we need to be part of the solution, but it is not that we expect any financial impact from that.

Speaker #4: The solution for that is a better integration of Southeastern Europe into the European market, which is something that those countries are asking for anyway because they are looking at elevated price levels.

Speaker #4: We do not see any significant financial impacts on networks. And on the UK retail, at this point, we also see no material impact. So, in that sense, it's more an operational challenge for us, where we need to be part of the solution.

Speaker #4: But it's not that we expect any financial impact from that.

Speaker #1: Thank you. And with that, we come to the last questions from Piotr from Citi. Before we do that, we'll close the call. Hi, Piotr.

Iris Eveleigh: Thank you.

[Analyst] (Citi): Thank you.

Iris Eveleigh: With that, we come to the last question from Piotr from Citi before we then will close the call. Hi, Piotr.

[Analyst] (Citi): Hi. Good afternoon, everybody, and thank you for squeezing me in. I have two questions, please. First, I wanted to ask Leo about your expectations about how quickly this battery grid connection queue will translate into the real assets on ground and what kind of implications. At what point do you think these batteries could affect the power price formation in a meaningful way that you would, I do not know, change your procurement strategy or reflect it somehow? Just how quickly this 26 gigawatts, which you gave, essentially gets connected, and if, then how much percentage really gets connected? Second, I wanted to ask you, there is a new renewable law in Germany, which, as I understand, gives some kind of a locational factor so that we do not replace renewable assets in congested areas. Does it matter for E.ON network?

Speaker #6: Hi, good afternoon everybody, and thank you for squeezing me in. I have two questions, please. First, I wanted to ask Leo about your expectations for how quickly this battery grid connection queue will translate into real assets on the ground, and what kind of implications there might be.

Speaker #6: At what point do you think these batteries could affect power price formation in a meaningful way that would, I don't know, change your procurement strategy or be reflected somehow?

Speaker #6: I just wonder how quickly this 26 gigawatt, which you gave, essentially gets connected and, if so, then how much percentage really gets connected? And second, I wanted to ask you—there's a new renewable law in Germany which, as I understand, gives some kind of a locational factor so that we don't place renewable assets in congested areas.

Speaker #6: Does it matter for E.ON network? I mean, you have a majority of renewable assets connected. So, I guess congestion typically will happen in your network.

[Analyst] (Citi): You have a majority of renewable assets connected, so I guess congestion typically would happen in your network. Would that lower overall request for renewable connection in your grid? Thank you.

Speaker #6: So would that lower the overall kind of request for renewable connection in your grid? Thank you.

[Company Representative] (E.ON): Two new and great questions at the end, so Piotr, pleasure to take them. First, on the batteries. Here I expect really, at least I do not expect all the projects where we have given a consent to connect to materialize. But I expect that we will see some dynamic development because the grid exemption that I mentioned, the grid fee exemption that I mentioned for batteries is tied to those projects being finished over the next two years. In that sense, there is a clock ticking, and so the project developers have a high incentive to either be very fast or basically they can leave the playground. In that sense, I would expect significant capacities to be added, and they will have an impact on price formation. We can already see that they have a local impact.

Leo Birnbaum: Two new and great questions at the end, so Piotr, pleasure to take them. First, on the batteries. Here I expect really, at least I do not expect all the projects where we have given a consent to connect to materialize. But I expect that we will see some dynamic development because the grid exemption that I mentioned, the grid fee exemption that I mentioned for batteries is tied to those projects being finished over the next two years. In that sense, there is a clock ticking, and so the project developers have a high incentive to either be very fast or basically they can leave the playground. In that sense, I would expect significant capacities to be added, and they will have an impact on price formation. We can already see that they have a local impact.

Speaker #4: To a new and great question at the end. So Piotr, pleasure to take them. First, on the batteries. Here, I expect—or at least I do not expect—all the projects where we have given a consent to connect to materialize.

Speaker #4: But I expect that we will see some dynamic development because the grid exemption that I mentioned, the grid fee exemption that I mentioned for batteries is tied to those projects being finished over the next two years.

Speaker #4: So, in that sense, there is a clock ticking, and so the project developers have a high incentive to either be very fast, or basically they can leave the playground.

Speaker #4: In that sense, I would expect significant capacities to be added, and they will have an impact on price formation. We can already see that they have a local impact.

Speaker #4: If you have a battery in a local grid area, for example, the peak capacity that you need to pull from the TSO goes down, which has an impact on the DSO fees as well.

[Company Representative] (E.ON): If you have a battery in a local grid area, for example, the peak capacity that you need to pull from the TSO goes down, which has an impact on the DSO fees as well. And obviously, if we now add, let us say 15 gigawatts, which I could easily see in the next two years, then 15 gigawatts would clearly have an implication, if not for the total base of price formation, for sure on the shape, and they would actually shift renewables production. So batteries will have an impact in a very short term. And also we, as E.ON, are developing partially a large-scale grid project to make sure that we can use them to optimize our hedging for our customer portfolio.

Leo Birnbaum: If you have a battery in a local grid area, for example, the peak capacity that you need to pull from the TSO goes down, which has an impact on the DSO fees as well. And obviously, if we now add, let us say 15 gigawatts, which I could easily see in the next two years, then 15 gigawatts would clearly have an implication, if not for the total base of price formation, for sure on the shape, and they would actually shift renewables production. So batteries will have an impact in a very short term. And also we, as E.ON, are developing partially a large-scale grid project to make sure that we can use them to optimize our hedging for our customer portfolio.

Speaker #4: So, and obviously, if we now add, let's say, 15 gigawatts—which I could easily see in the next two years—then 15 gigawatts would clearly have an implication, if not for the total base price formation, for sure on the shape, and they would actually shift renewables production.

Speaker #4: So, batteries will have an impact in the very short term. And also, we at E.ON are developing, partially, large-scale grid projects to make sure that we can use them to optimize our hedging for our customer portfolio.

Speaker #4: So in that sense, I would say they're going to come in pretty fast. Also, compared to data centers, for example, and they're going to be significant, and they're going to have an impact on the ability to provide products to customers.

[Company Representative] (E.ON): In that sense, I would say they are going to come in pretty fast, also compared to data centers, for example. They are going to be significant, and they are going to have impact on the ability to provide products to customers. On the renewables, one small correction. The locational factor for renewables with the congested area is actually part of the Grid Package already. It is not part of the Renewable Energy Sources Act revision that is on the way, but it does not really matter. For us, it has impact. Obviously not a financial impact. Because it has no direct impact because we are not renewable developer, as you well know. But it has an impact. It has no financial impact for us, if we need to connect renewables in the wrong place, let me put it this way.

Leo Birnbaum: In that sense, I would say they are going to come in pretty fast, also compared to data centers, for example. They are going to be significant, and they are going to have impact on the ability to provide products to customers. On the renewables, one small correction. The locational factor for renewables with the congested area is actually part of the Grid Package already. It is not part of the Renewable Energy Sources Act revision that is on the way, but it does not really matter. For us, it has impact. Obviously not a financial impact. Because it has no direct impact because we are not renewable developer, as you well know. But it has an impact. It has no financial impact for us, if we need to connect renewables in the wrong place, let me put it this way.

Speaker #4: On the renewables, one small correction: the locational factor for renewables within the congested area is actually part of the grid's package already. It's not part of the Renewables Energy Act revision that's underway, but it doesn't really matter.

Speaker #4: For us, it has impact. I mean, obviously not a financial impact, because it has no direct impact, as we are not a renewable developer, as you well know.

Speaker #4: But it has an impact; it has no financial impact for us. If we need to connect renewables in the wrong place—let me put it this way—what it does, it has no direct impact on us.

[Company Representative] (E.ON): What it does, it has no direct impact on us, but it will increase the system cost because it will lead to additional congestion. This congestion needs to be charged to the customers, and that is the indirect impact that we have. We then need to charge unnecessary costs to our customers. Then we will have build-out obligations afterwards, which are also unnecessary because in the first place, we should not have done it there. I think if we get the location signals, and if we get the change in the policy via the Grid Package, it will actually decrease the bills for our customers, and it will make sure that we allocate the CapEx where it makes most sense, which in the long term will lead to lower cost for everybody. That is in our interest. It is in the interest of our customers.

Leo Birnbaum: What it does, it has no direct impact on us, but it will increase the system cost because it will lead to additional congestion. This congestion needs to be charged to the customers, and that is the indirect impact that we have. We then need to charge unnecessary costs to our customers. Then we will have build-out obligations afterwards, which are also unnecessary because in the first place, we should not have done it there. I think if we get the location signals, and if we get the change in the policy via the Grid Package, it will actually decrease the bills for our customers, and it will make sure that we allocate the CapEx where it makes most sense, which in the long term will lead to lower cost for everybody. That is in our interest. It is in the interest of our customers.

Speaker #4: But it will increase the system cost because it will lead to additional congestion. This congestion needs to be charged to the customers, and that's the indirect impact that we have.

Speaker #4: We then need to charge unnecessary costs to our customers. And then we will have build-out obligations afterwards, which are also unnecessary, because in the first place we shouldn't have done it there.

Speaker #4: So I think if we get the locational signals, and if we get the change in the policy via the grid's package, it will actually decrease the bill for our customers, and it will make sure that we allocate the capex where it makes most sense, which in the long term will lead to lower costs for everybody.

Speaker #4: Now, that's in our interest. It's in the interest of our customers. It's not necessarily in the interest of the renewables developers. So there will be an interesting political debate, and the lobbying is very strong to make that as ineffective as possible.

[Company Representative] (E.ON): It is not necessarily in the interest of the renewables developers. There will be an interesting political debate, and the lobbying is very strong to make that as ineffective as possible. If it is completely ineffective, as I said, then we have the indirect impacts that I just mentioned. But I hope that it will actually be positive because in the long run it is just the right thing.

Leo Birnbaum: It is not necessarily in the interest of the renewables developers. There will be an interesting political debate, and the lobbying is very strong to make that as ineffective as possible. If it is completely ineffective, as I said, then we have the indirect impacts that I just mentioned. But I hope that it will actually be positive because in the long run it is just the right thing.

Speaker #4: If it's completely ineffective, you know, like I said, then we have the indirect impacts that I just mentioned. But I hope that it will actually be positive, because in the long run, it's just the right thing.

Speaker #6: If I can just have a very quick follow-up on this last point. So, I understand if we have a locational signal, there will be less of a demand in your congested areas.

[Analyst] (Citi): If I can have just a very quick follow-up on this last point. I understand if we have a locational signal, there will be less of a demand in your congested areas. But do I understand it correctly that it does not matter for your 5 to 10 billion future extra capital deployment because you have so much demand for different grid connections that you would do some other work other than reconnecting renewables?

Speaker #6: But to understand correctly, it doesn't matter for your €5 to €10 billion future extra capital deployment, because you have so much demand for different grid connections that you would do some other work, other than reconnecting renewables.

Speaker #4: Rather than connecting assets that afterwards would be curtailed, we would connect assets that afterwards produce for customers. But we would not have any reduction anywhere.

[Company Representative] (E.ON): Rather than connecting assets that afterwards would be curtailed, we would connect assets that afterwards produce for customers. We would not have any reduction anywhere.

Leo Birnbaum: Rather than connecting assets that afterwards would be curtailed, we would connect assets that afterwards produce for customers. We would not have any reduction anywhere.

Speaker #1: Thank you. And with these last words, we close the call. Thank you, everyone, for participating and for your interest. If there are any further follow-up questions, please reach out to the IR team.

Iris Eveleigh: Thank you. With these last words, we close the call. Thank you everyone for participating and your interest. If there are any further follow-up questions, please reach out to the IR team. Happy to take those questions. With that, I close the call. Thank you very much everyone, and have a great day. Bye-bye.

Speaker #1: Happy to take those questions. With that, I close the call. Thank you very much, everyone, and have a great day. Bye-bye.

Speaker #4: Thank you.

[Company Representative] (E.ON): Thank you.

Leo Birnbaum: Thank you.

Iris Eveleigh: Bye-bye.

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Q2 2026 E.ON SE Earnings Call

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