E.ON AG Annual Report 2020

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FY2020 Annual Report · E.ON AG

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Annual Report

2020

E.ON Group at a Glance

€ in millions

Sales1

Adjusted EBITDA1, 2

– Regulated business (%)

– Quasi-regulated and long-term contracted business (%)

– Merchant business (%)

Adjusted EBIT1, 2

– Regulated business (%)

– Quasi-regulated and long-term contracted business (%)

– Merchant business (%)

Net income/loss

Net income/loss attributable to shareholders of E.ON SE

Adjusted net income1, 2

Investments1

Cash provided by operating activities1

Cash provided by operating activities before interest and taxes1

Economic net debt (at year-end)1

Equity

Total assets

ROCE (%)1

Employees (at year-end)1

– Percentage of female employees

– Average age

Earnings per share4, 5 (€)

Adjusted net income per share1, 4, 5 (€)

Dividend per share6 (€)

Dividend payout

2020

60,944

6,905

2019

41,284

5,564

3,776

3,220

1,270

1,017

1,638

4,171

5,313

5,948

40,736

9,055

95,385

6.2

1,792

1,550

1,526

5,492

2,965

4,407

38,895

13,248

98,080

8.3

78,126

78,948

0.39

0.63

0.47

0.68

0.67

0.46

1,225

1,199

+/- %

+48

+24

+83

-93

+13

+17

+93

-83

-13

-29

-34

-24

+79

+35

-32

-3

-2.13

-1

-13

–

-43

-6

1Includes until September 18, 2019, the discontinued operations in the Renewables segment (see Note 5 to the Consolidated Financial Statements).
2Adjusted for non-operating effects.
3Change in percentage points.
4Attributable to shareholders of E.ON SE.
5Based on shares outstanding (weighted average).
6For the respective financial year; the 2020 figure represents management’s dividend proposal.

• Merger squeeze-out of innogy’s remaining minority

shareholders concluded

• European Commission’s conditions for innogy

takeover completely fulfilled

• Transfer of innogy bonds to E.ON concluded

• Adjusted EBIT and adjusted net income
within forecast range revised in August 2020

• 2021 adjusted EBIT expected to be between
€3.8 and €4.0 billion, 2021 adjusted
net income between €1.7 and €1.9 billion

• Proposed dividend of €0.47 per share for

the 2020 financial year

• Annual growth of dividend per share

of up to 5 percent through the dividend for the
2023 financial year targeted

• Ambitious climate targets decided—E.ON

climate-neutral by 2050

Contents

4 Report of the Supervisory Board

12 Strategy and Objectives

18 Combined Group Management Report

Innovation
Business Report

Corporate Profile
Business Model
Special Events in the Reporting Period

20
20
20
24 Management System
25
28
28 Macroeconomic and Industry Environment
31
32
37
41
42
48
49
49
50
54
57
65
67
70
80

Business Performance
Earnings Situation
Financial Situation
Asset Situation
Business Segments
E.ON SE’s Earnings, Financial, and Asset Situation
Other Financial and Non-financial Performance Indicators
– ROCE
– Employees
Forecast Report
Risks and Chances Report
Internal Control System for the Accounting Process
Disclosures Regarding Takeovers
Corporate Governance Declaration
Compensation Report

98 Separate Combined Non-Financial Report

116 Consolidated Financial Statements

118
119
120
121
122
124
126
126
140
141
142
142

E.ON SE and Subsidiaries Consolidated Statements of Income
E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses
E.ON SE and Subsidiaries Balance Sheets–Assets
E.ON SE and Subsidiaries Balance Sheets–Equity and Liabilities
E.ON SE and Subsidiaries Consolidated Statements of Cash Flows
Statement of Changes in Equity
Notes
(1) Summary of Significant Accounting Policies
(2) New Standards and Interpretations
(3) Impact of the Covid-19 Pandemic
(4) Scope of Consolidation
(5) Acquisitions, Disposals and Discontinued Operations

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

149
149
149
151
151
152
155
158
159
159
168
171
171
172
172
174
174
175
175
177
184
187
192
193
194
194
198
208
210
211
216
217
218

(6) Revenues
(7) Own Work Capitalized
(8) Other Operating Income and Expenses
(9) Cost of Materials
(10) Financial Results
(11) Income Taxes
(12) Personnel-Related Information
(13) Other Information
(14) Earnings per Share
(15) Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
(16) Companies Accounted for under the Equity Method and Other Financial Assets
(17) Inventories
(18) Receivables and Other Assets
(19) Liquid Funds
(20) Capital Stock
(21) Additional Paid-in Capital
(22) Retained Earnings
(23) Changes in Other Comprehensive Income
(24) Non-controlling Interests
(25) Provisions for Pensions and Similar Obligations
(26) Miscellaneous Provisions
(27) Liabilities
(28) Contingent Liabilities and Other Financial Obligations
(29) Litigation and Claims
(30) Supplemental Cash Flow Disclosures
(31) Derivative Financial Instruments and Hedging Transactions
(32) Additional Disclosures on Financial Instruments
(33) Leasing
(34) Transactions with Related Parties
(35) Segment Reporting
(36) Compensation of Supervisory Board and Management Board
(37) Subsequent Events
(38) List of Shareholdings Pursuant to Section 313 (2) HGB

236 Other Information

Declaration of the Management Board
238
Independent Auditor’s Report
239
Independent Practitioner’s Report on Non-financial Reporting
246
Boards
248
Supervisory Board (and Information on Other Directorships)
248
250 Management Board (and Information on Other Directorships)
251
253

Summary of Financial Highlights
Financial Calendar

Report of the
Supervisory Board

Report of the Supervisory Board

Dr. Karl-Ludwig Kley,
Chairman of the Supervisory Board

Dear Shareholders,

For E.ON, 2020 was characterized by two events: the integration of innogy SE and
the Covid-19 pandemic. The squeeze-out of the remaining innogy minority share-
holders was completed in June. As a result of this, the legal integration of innogy
was concluded as well. In addition, the antitrust requirements for the divestment
of parts of the Company were successfully completed. The Covid-19 pandemic
presented the company with major challenges-both in the market and in terms of
internal processes and procedures, which were successfully overcome. The Super-
visory Board would like to thank the Management Board and all employees for all
the special efforts that were and are connected with these matters.

In the 2020 financial year the Supervisory Board carefully performed all its duties
and obligations under law, the Company’s Articles of Association, and its own rules
and procedures. It advised the Management Board in detail about the Company’s
management and continually monitored the Management Board’s activities,
assuring itself that the Company’s management was legal, purposeful, and orderly.
At four regular meetings and one extraordinary meeting, it addressed all issues
relevant to the Company. In addition, it carried out one written resolution procedure.
On a regular basis, the shareholder representatives and the employee representa-
tives made separate preparations for these meetings with the participation of one
or all members of the Management Board. Three Supervisory Board members were
unable to attend individual Supervisory Board meetings in 2020. Apart from that,
all members attended all meetings.

The Management Board regularly provided the Supervisory Board with timely
and comprehensive information about significant business transactions in both
written and oral form. At the meetings of the full Supervisory Board and its com-
mittees, the Supervisory Board had sufficient opportunity to actively discuss the
Management Board’s reports, motions, and proposed resolutions. After thoroughly
examining and discussing the resolutions proposed by the Management Board,
the Super visory Board voted on them when it was required by law, the Company’s
Articles of Association, or the Supervisory Board’s rules and procedures. Further-
more, the Supervisory Board also met on a recurring basis without the Management
Board being present.

In addition, there was a regular exchange of information between the Chairman of
the Supervisory Board and the members of the Management Board, in particular
the Chairman, during the entire financial year. In the case of particularly pertinent
issues, the Chairman of the Supervisory Board was kept informed at all times. He
likewise maintained contact with the members of the Supervisory Board outside
of board meetings.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Board, in both cases effective April 1, 2021, and adopted the corresponding
resolutions. It also discussed and adopted resolutions on extending the
appointment of Thomas König and Karsten Wildberger as members of
the Management Board.

Policy and regulatory developments in countries in which E.ON is active
constituted another key topic of the Supervisory Board’s discussions.
Alongside the overall and economic policy situation in the individual
countries, the Supervisory Board focused primarily on the developments
in European and German energy policy, particularly in conjunction with
the various economic stimulus packages, the EU’s recovery plan, and their
respective consequences for E.ON’s business areas.

Furthermore, in the context of the Group’s current operating business,
the Supervisory Board addressed in detail the impact of low interest rates
on E.ON, the general business situation of the Group and its companies,
national and international energy markets, as well as the currencies that
are important to E.ON. It discussed E.ON SE’s and the E.ON Group’s asset,
financial, and earnings situation, dividend policy, workforce developments,
and earnings opportunities and risks. The Supervisory Board and the
Management Board thoroughly discussed the E.ON Group’s medium- term
plan for 2021–2023. The Supervisory Board was provided with informa-
tion on a regular basis about the Company’s health, (occupational) safety,
and environmental performance (in particular, key accident indicators
and the Covid-19 infection rate in the Group) as well as current customer
numbers, customer satisfaction, and the number of apprentices. Further-
more, the Supervisory Board dealt with E.ON’s corporate strategy and
capital market communications.

In addition, the Supervisory Board established a procedure for the periodic
evaluation of related-party transactions and delegated responsibility for
monitoring to the Audit and Risk Committee. It also discussed E.ON’s
future funding needs and, where necessary, adopted resolutions. Finally,
it addressed E.ON’s current sustainability strategy and examined and
approved the Group’s non-financial reporting (“CSR”).

Covid-19 Pandemic

From March 2020 onward, the Executive Committee
supported the Management Board in managing the
Covid-19 risks. The risks and countermeasures were
discussed in detail with the Management Board at six
extraordinary meetings. From March 2020 onward,
the Supervisory Board and/or its Executive Committee
continually received reports on the Covid-19 pandemic’s
impact on E.ON’s business and business processes.

In particular, the importance of ensuring business- critical
activities was presented and discussed. Furthermore, the
macroeconomic repercussions as well as scenarios for
policy decisions were addressed, but possible business
opportunities arising from the Covid-19 pandemic were
analyzed as well. In view of the Covid-19 pandemic, from
March 2020 onward the meetings of the Supervisory
Board and its committees largely took place virtually.

innogy Integration

At several meetings in 2020 and by means of special
reports, the Management Board informed the Super-
visory Board and also the Executive Committee about
the progress of the integration preparations and
measures as well as the squeeze-out of the remaining
innogy minority shareholders. In this context, the
Supervisory Board also discussed the disposals in con-
junction with the European Commission’s antitrust
conditions and, where necessary, adopted resolutions.

Other Key Topics of the Supervisory
Board’s Discussions

In addition, the Supervisory Board prepared and dis-
cussed major personnel matters, in particular the depar-
ture of Johannes Teyssen effective March 31, 2021,
the appointment of Leonhard Birnbaum as Chairman
of the Management Board, and the appointment of
Victoria Ossadnik as a member of the Management

Report of the Supervisory Board

Corporate Governance

In the declaration of compliance issued at the end of the year, the Supervisory Board and the Manage-
ment Board declared that E.ON is in full compliance with the recommendations of the “Government
Commission German Corporate Governance Code” dated December 16, 2019, published by the Federal
Ministry of Justice and Consumer Protection in the official section of the Federal Gazette (Bundesanzeiger)
on March 20, 2020. The Supervisory Board and the Management Board also declared that E.ON has
been in full compliance with the recommendations of the “Government Commission German Corporate
Governance Code” dated February 7, 2017, published by the Federal Ministry of Justice and Consumer
Protection in the official section of the Federal Gazette (Bundesanzeiger) on April 24, 2017. since the last
annual declaration in December 2019. The current version of the declaration of compliance as well as
earlier versions are published online at www.eon.com.

In the 2020 financial year, Rolf Martin Schmitz, in his capacity as Chairman of the RWE AG Management
Board, had conflicts of interest in relation to certain operational matters and for this reason did not
participate in the discussion of individual agenda items. Otherwise, the Supervisory Board is aware of
no indications of conflicts of interest involving members of the Supervisory Board.

In the 2020 financial year, education and training sessions on selected operating and non-operating
issues of E.ON’s business were conducted for Supervisory Board members only on a limited basis because
of the Covid-19 pandemic. An on-boarding program gave new members of the Supervisory Board the
opportunity to receive a comprehensive introduction to the Company’s business operations. The focus
was on the current status of the regulatory environment and strategic growth areas in the network busi-
ness as well as strategic priorities in the customer solutions business.

The targets for the Supervisory Board’s composition, including a competency profile and a diversity con-
cept, with regard to Recommendation C.1 of the German Corporate Governance Code and Section 289f,
Paragraph 2, Item 6 of the German Commercial Code and the status of their achievement are available in
the Corporate Governance Declaration on pages 73 and 74.

Committee Work

To fulfill its duties carefully and efficiently, the Supervisory Board has created the committees described
in detail below.

In the 2020 financial year the Executive Committee met twelve times and carried out one written reso-
lution procedure. One member was unable to attend one meeting. Apart from that, all members took part
in all of the committee’s meetings. At its extraordinary meetings, the committee discussed, in particular,
the Covid-19 pandemic’s impact and approved the squeeze-out of the remaining innogy minority share-
holders. Furthermore, it prepared the resolutions the Supervisory Board adopted in December 2020
regarding the personnel decisions relating to the Management Board. In this context, it also adopted a
resolution on Management Board members’ respective areas of responsibility. Additionally, the Executive
Committee was periodically informed about the progress toward the Management Board’s targets for
2020 and dealt with the new version of the Management Board’s compensation plan. Finally, the Executive
Committee thoroughly discussed the medium-term plan for the period 2021–2023.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

The Innovation and Sustainability Committee met five
times. One member was unable to attend one meeting.
Apart from that, all members attended all of the com-
mittee’s meetings. The matters addressed by the com-
mittee included E.ON’s climate strategy and activities
relating to sustainability. Furthermore, in particular
E.ON’s approach to innovation as well as organic and
inorganic growth options were topics of discussion.

The Audit and Risk Committee met five times in 2020.
One member was unable to attend one meeting. Apart
from that, all members attended all meetings. The
committee conducted a thorough review, in particular
of the 2019 Financial Statements of E.ON SE (prepared
in accordance with the German Commercial Code), the

E.ON Group’s 2019 Consolidated Financial Statements (prepared in
accordance with International Financial Reporting Standards, or “IFRS”),
and the 2020 intermediate financial reports of E.ON SE. The committee
discussed the recommendation for selecting an independent auditor
for the 2020 financial year as well as the intermediate financial reports
and assigned the tasks for the independent auditor’s auditing services,
established the audit priorities, determined the independent auditor’s
compensation and reviewed the independent auditor‘s qualifications (for
example, by assessing the quality of the independent audit) and verified
the auditor’s qualifications and independence in line with the recommen-
dations of the German Corporate Governance Code. The committee also
assured itself that the independent auditor has no conflicts of interest.
In addition, the committee addressed other matters assigned to it by law,
the Company’s Articles of Association, or the Supervisory Board’s rules
and procedures, in particular Internal Audit’s activities and reports,

Overview of the Attendance of Supervisory Board Members at Meetings of the Supervisory Board
and Its Committees

Supervisory Board member

Supervisory Board

Executive
Committee

Audit and Risk
Committee

Innovation and
Sustainablility
Committee

Nomination
Committee

5/5

4/5

5/5

4/5

5/5

3/3

0/0

5/5

4/5

3/3 8

5/5

12/12

–

11/12

5/5 8

–

7/7

–

5/5 6

12/12

–

12/12

–

5/5 7

–

5/5

–

5/5

–

5/5

–

4/5

5/5

–

2/2 8

–

5/5

–

5/5

1/1 8

5/5

–

5/5 5

5/5

4/5

–

1/1 8

0/0

–

0/0

–

Kley, Dr. Karl-Ludwig

Clementi, Erich

Dybeck Happe, Carolina

Fröhlich, Klaus

Grillo, Ulrich

Schmitz, Andreas

Schmitz, Dr. Rolf Martin

Segundo, Dr. Karen de

Wilkens, Deborah

Woste, Ewald

Scheidt, Andreas3

Broutta, Clive1

Krebber, Monika

Luha, Eugen-Gheorghe

May, Stefan

Pelouch, Miroslav4

Pinczésné Márton, Szilvia

Pöhls, René

Schmitz, Christoph2

Schulz, Fred

Wallbaum, Elisabeth

Zettl, Albert

1Member until January 31, 2020.
2Member since February 1, 2020.
3Member until May 28, 2020.
4Member since May 28, 2020.
5Committee member since February 5, 2020.
6Committee member since May 28, 2020.
7Committee member until December 31, 2020.
8Participation(s) as a guest.

Report of the Supervisory Board

accounting issues, risk management, and developments in the area of com-
pliance. Furthermore, the committee thoroughly discussed the Combined
Group Management Report and the proposal for profit appropriation and
prepared the relevant recommendations for the Supervisory Board and
reported them to the Supervisory Board. On the basis of the quarterly
risk reports, the committee noted that no risks were identified that might
jeopardize the existence of the Company or individual segments. Further-
more, the committee addressed in detail the Company’s cybersecurity
and cyber risks as well as the upcoming change of the independent audi-
tor in 2021.

Committee chairpersons reported the agenda and results of their respec-
tive committee’s meetings to the full Supervisory Board on a regular basis.
Information about the committees’ composition and responsibilities is in
the Corporate Governance Declaration on pages 74 to 77.

Examination and Approval of the Financial Statements,
Approval of the Consolidated Financial Statements,
Proposal for Profit Appropriation for the Year Ended
December 31, 2020

PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
Düsseldorf, audited and submitted an unqualified opinion on the Consoli-
dated Financial Statements of E.ON SE prepared in accordance with
IFRS and the Combined Group Management Report for the year ended
December 31, 2020. The IFRS Consolidated Financial Statements
exempt E.ON SE from the requirement to publish Consolidated Financial
Statements in accordance with German law.

The Supervisory Board reviewed and, at its annual-results meeting on
March 23, 2021, thoroughly discussed—in the presence of the indepen-
dent auditor and with knowledge of, and reference to, the Independent
Auditor’s Report and the results of the preliminary review by the Audit and
Risk Committee—E.ON SE’s Financial Statements prepared in accordance
with the German Commercial Code, Consolidated Financial Statements,
and Combined Group Management Report as well as the Management
Board’s proposal for profit appropriation. The independent auditor was
available for supplementary questions and answers. After concluding
its own examination, the Supervisory Board determined that there are no
objections to the findings. It therefore acknowledged and approved the
Independent Auditor’s Report. In addition, the Supervisory Board reviewed
and approved the Separate Combined Non-Financial Report.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

The Supervisory Board approved the Financial Statements of E.ON SE
prepared by the Management Board and the Consolidated Financial
Statements. The Financial Statements are thus adopted. The Super-
visory Board agrees with the Combined Group Management Report
and, in particular, with its statements concerning the Company’s
future development.

The Supervisory Board examined the Management Board’s proposal
for profit appropriation, which includes a cash dividend of €0.47 per
ordinary share, also taking into consideration the Company’s liquidity
and its finance and investment plans. After examining and weighing
all arguments, the Supervisory Board agrees with the Management
Board’s proposal for profit appropriation.

Personnel Changes on the Management Board

There were no personnel changes on the E.ON SE Management Board
in 2020. Page 250 of this report shows E.ON SE Management Board
members’ respective areas of responsibility as of year-end 2020.

Personnel Changes on the Supervisory Board

Clive Broutta ended his service on the Supervisory Board at the con-
clusion of January 31, 2020, owing to the United Kingdom’s depar-
ture from the European Union. Christoph Schmitz was appointed to
succeed him effective February 1, 2020. Effective the end of the
2020 Annual Shareholders Meeting, Andreas Scheidt ended his ser-
vice on the Supervisory Board, and Miroslav Pelouch was appointed
to the Supervisory Board. Effective December 31, 2020, Carolina
Dybeck Happe stepped down from the Audit and Risk Committee,
and Ulrich Grillo was elected to succeed her. Pages 248 to 249 of
this report provide an overview of all members of the Supervisory
Board as of December 31, 2020.

Essen, March 23, 2021
The Supervisory Board

Best wishes,

Dr. Karl-Ludwig Kley
Chairman

Strategy and
Objectives

Strategy and Objectives

E.ON’s Strategy: Leading Partner for the
Sustainable and Digital Energy World

Sustainability
In 2020, E.ON adjusted its strategic course by identifying rele-
vant environmental, social, and governance (“ESG”) aspects that
are important for sustainable action in both a business and a
social context: climate protection, health and safety, diversity
and inclusion, as well as good corporate governance. Since
E.ON also factors ESG aspects into its operating decisions and
management processes, integrating sustainability into its cor-
porate strategy is a logical step. E.ON’s Sustainability Council,
together with the Supervisory Board’s Innovation and Sustain-
ability Committee, has developed the following key topics and
corresponding mission statements:

WE enable Europe to become carbon-neutral
Climate protection is a key driver for future growth, because
operating networks is part of E.ON’s core business. Distribution
networks in particular serve as a platform for the energy transi-
tion and the many possibilities associated with it, such as pro-
viding sustainable solutions for customers and helping cities,
companies, and residential customers become climate-neutral.
In March 2020, E.ON also set ambitious climate targets. E.ON
intends to reduce its Scope 1 and Scope 2 emissions (those a
company can influence directly) by 75 percent by 2030 and then
to become climate-neutral in 2040. E.ON aims to reduce its
Scope 3 emissions by 50 percent by 2030 and by 100 percent
by 2050. Sustainable energy is therefore a strategic focus area
for E.ON.

WE care for our people and foster a diverse, inclusive culture
Diversity, especially social diversity, characterizes the people at
E.ON and is the basis for sustainable innovation, continuous
improvement, business success, and growth. Diversity should be
promoted and enhanced, especially with regard to experience,
education, nationality, and the proportion of women in manage-
ment positions. E.ON has set the goal of improving the health
and safety of its employees and business partners and preventing
accidents.

WE take sustainability as the guiding principle in business
Sustainability guides E.ON’s actions. The integration of sustain-
ability into E.ON’s management processes is therefore a logical
step. It ensures that E.ON’s strategic and operating decisions,
business activities, and external communications reflect E.ON’s
claim to be Europe’s leading sustainable energy company. ESG
aspects have therefore already been part of many processes,
including those designed to reduce risks and gain access to capital
markets, which are increasingly geared toward green financing
(see E.ON’s Green Bond Framework on page 38).

More detailed information about sustainability at E.ON is available
in the Separate Combined Non-Financial Report (which starts on
page 100 of this report) and in the comprehensive Sustainability
Report at www.eon.com.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Energy Networks
Energy networks, which interconnect all sectors of the economy
and ensure supply security to customers across Europe, are
the backbone of a successful energy transition. The successful
integration of innogy has made E.ON the leading distribution
system operator (“DSO”) in Northern and Central Europe.
E.ON’s regulated asset base (“RAB”) totals about €34.9 billion,
and the regulated business generates about 80 percent of its
income. This gives E.ON a central role to play in the energy tran-
sition’s success. After all, the energy system can only become
climate-neutral if energy networks are expanded early and
sufficiently and are systematically digitized.

Network investments rose to around €3.4 billion in 2020. They
enabled the ongoing expansion of the Company’s RAB, made
its networks more digital, and ensured asset integrity. Growth
in the network business, which is driven largely by the energy
transition, can be divided into three areas. The first is renewables
integration. E.ON has already connected 78 GW of renewables
capacity to its networks in Europe. The second is the construction
boom and capacity expansion at E.ON’s customers along with
the ongoing electrification of the transport and heating sectors,
which leads to more network connections. Each year, E.ON makes
tens of thousands of new electricity and gas grid connections.
In addition, large industrial customers with key technologies
—such as electromobility, battery manufacturing, and data cen-
ters—are being connected to E.ON’s networks. The capacity of
such connections is similar to that of a major city. Together with
energy supplier Mainova and transmission system operator
TenneT, E.ON is investing €750 million in and around Frankfurt
to enable the power grid to meet the metropolitan area’s grow-
ing energy needs. The third growth area consists of necessary

E.ON’s Principles for Achieving a Climate-friendly, Innovative,
and Digital Future
The main trends shaping the new energy world are decarboniza-
tion, decentralization, and digitization. E.ON’s strategic objective
is to accelerate progress toward a climate-friendly future by
means of smart and robust energy infrastructure and to set inter-
national standards for innovation and digital technology. The three
principles for achieving this objective are integration, efficiency,
and growth.

With regard to the innogy integration, E.ON is right on course
to achieve the announced synergies of roughly €740 million by
2022. The integration of innogy’s various organizational units
into the E.ON Group has nearly been completed. The first sprinter
phase was successful; many employees left the Company volun-
tarily under the socially responsible mechanisms agreed on with
employee representatives.

As for higher efficiency, digitization is the central element of
E.ON’s strategy. By creating a digitization remit on the Manage-
ment Board, E.ON has underscored this issue’s fundamental
importance for the ongoing transformation of the entire energy
industry and the E.ON Group.

E.ON’s growth strategy, which will receive additional support
from European economic stimulus packages, foresees extensive
investments in the Company’s two core businesses: energy net-
works and customer solutions. About 90 percent of investments
across both businesses will go toward energy infrastructure.
Around 75 percent of investments will be in the network busi-
ness. Innovation and R&D are the key to sustainable growth in
an increasingly complex energy world and are central to E.ON’s
growth strategy. In the long term, E.ON considers green hydro-
gen in particular to be a strategic growth business and is actively
helping establish Europe’s hydrogen economy. This growth
strategy is designed to further enhance the resilience of E.ON’s
business model and to give the Company a good starting position
for the decade ahead.

Strategy and Objectives

investments in network maintenance and modernization. E.ON
is already using smart operating equipment, sensors, and actu-
ators as well as artificial intelligence to optimize grid utilization
and thus to make the energy transition as efficient as possible.

The efficiency of all E.ON DSOs in Germany is above average.
Seven out of nine DSOs have an efficiency rating of 100 percent,
three of which receive an efficiency bonus for “super efficiency.”
Two E.ON DSOs in Sweden also have an efficiency rating of
100 percent, another has a rating of 93 percent. E.ON DSOs
therefore significantly surpass the Swedish industry average of
87 percent.

In the summer of 2020, E.ON forged an alliance with SAP to build
a cloud-based platform that will further improve network billing.
E.ON intends for the new platform to handle the processes for
around 15 million network customers in Germany by year-end
2023. By standardizing the core processes of network operations,
the platform will deliver lasting improvements in service quality
and customer satisfaction, while reducing costs by about
40 percent over the long term. In Sweden, E.ON is a pioneer in
innovative flexibility services: SWITCH, the Company’s digital
trading platform there, enables companies whose power require-
ments are temporarily higher to buy capacity from companies
whose requirements are lower. In Hungary, E.ON has developed
an innovative, cost-effective mobile battery storage system.
Its purpose is to reduce temporary grid congestion, promote
distributed generation, increase grid flexibility, and enable
energy communities.

In addition, E.ON aims to propel the decarbonization of gas
grids by admixing green gases. E.ON subsidiary Hansewerk,
for example, is conducting a demonstration project in which
a 1 MW combined-heat-and-power plant is fueled entirely with
100 percent hydrogen. The plant, whose gas turbines were
modified to burn hydrogen, supplies heat to Othmarschen,
a suburb of Hamburg. The purpose is to show how, in the future,
green hydrogen—whose production was powered by surplus
wind energy—can be used to generate climate-friendly electricity
and heat.

Customer Solutions
E.ON’s Customer Solutions segment focuses on two established
businesses: on the one hand, Energy Infrastructure Solutions
(“EIS”); on the other, power and gas sales along with new cus-
tomer solutions. EIS is a largely capital-intensive, long-term
business that provides solutions for industrial, commercial, munic-
ipal, and community customers. Power and gas sales is a scalable
business model with low capital requirements. It focuses on
households and small and medium-sized enterprises. New cus-
tomer solutions comprise a variety of distributed energy systems
for households. These include solar panels, heating devices,
energy storage systems, smart home technologies, and eMobility
solutions.

E.ON has set a target for its EIS business to continue to grow
and to become the preferred partner for innovative energy
solutions. E.ON offers a comprehensive portfolio of solutions

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

customers are to be migrated by year-end 2022. E.ON’s busi-
ness of supplying electricity and gas to commercial customers
is sharpening its focus, which reduces its risk portfolio.

The global eMobility market is growing exponentially in response
to emission restrictions, government subsidies, and carmakers’
strong commitment to electric vehicles. E.ON aims for its network
business to leverage the attractive infrastructure potential of
this growth by making new connections and expanding network
utilization. To enhance Customer Solutions’ competitive advan-
tage, E.ON intends to focus its future eMobility activities on the
development of charging infrastructure solutions and operations.

Finance Strategy

The section of the Combined Group Management Report entitled
“Financial Situation” contains explanatory information about
E.ON’s finance strategy.

People Strategy

The section of the Combined Group Management Report entitled
“Employees” contains explanatory information about the main
components of E.ON’speople strategy as well as statements
about diversity at E.ON.

Additional information about sustainability is available in the
Separate Combined Non-Financial Report (on pages 100 to 115
of this report) and in the Sustainability Report published sepa-
rately at www.eon.com.

for energy efficiency, decarbonization of heat production,
embedded power generation, and other energy services for cities
and districts and for commercial and industrial buildings. E.ON
can already build on a strong customer base in Germany, Sweden,
and Poland, while the United Kingdom, Italy, the Netherlands,
and East-Central Europe offer opportunities for additional growth.
EIS’s asset portfolio consists of heat, steam, and cooling plants,
district heating networks (19 TWh), and embedded generating
units at industrial customers (12 TWh). The district heating
networks have a system length of more than 5,000 kilometers
and integrate a total of 4,100 generating units in 14 countries.
In the United Kingdom, for example, E.ON helps its customers
develop and implement innovative and cost-effective solutions
to decarbonize the heat supply of new housing developments.

Electricity and gas sales—encompassing around 53 million cus-
tomers across Europe—are a key part of E.ON’s portfolio (includes
customers in Turkey and ZSE‘s customers in Slovakia). This busi-
ness remains clearly focused on profitable net customer growth.
To achieve this at competitive costs, E.ON is systematically dig-
itizing and also optimizing its operating models and processes.
The Company is conducting two major digital transformation pro-
grams in its largest markets. First, around 4 million customers
in Germany were migrated to innovative, digital platforms in
2020. The objective is for digital platforms to serve all customers
of innogy and E.ON’s core brands in Germany by the end of 2022.
Second, E.ON is currently building an entirely new business in
the United Kingdom: E.ONNext, which is based on Kraken Technol-
ogies’ innovative technology platform. Customer centricity and
cost efficiency are at the core of E.ONNext’s business model. The
migration of innogy’s residential and commercial customers to
the new E.ONNext digital platform is scheduled to be completed
by the end of the first half of 2021. All of E.ON UK’s residential

Combined Group
Management Report

20 Corporate Profile
20 Business Model
20 Special Events in the Reporting Period
24 Management System
25

Innovation

28 Business Report
28 Macroeconomic and Industry Environment
31 Business Performance
32 Earnings Situation
37
Financial Situation
41 Asset Situation
42 Business Segments
48 E.ON SE’s Earnings, Financial, and Asset Situation
49 Other Financial and Non-financial Performance Indicators
49 – ROCE
50 – Employees

Forecast Report

57 Risks and Chances Report

Internal Control System for the Accounting Process

67 Disclosures Regarding Takeovers

70 Corporate Governance Declaration

80 Compensation Report

Corporate Profile

Renewables
Substantially all of the operations in this segment were classified
as discontinued operations effective June 30, 2018, and decon-
solidated effective September 18, 2019. Certain business oper-
ations were not transferred to RWE and were reassigned to other
segments (see “Special Events in the Reporting Period” below).
This refers in particular to e.disnatur operations in Germany and
Poland as well as a 20-percent stake in Rampion offshore wind
farm in the United Kingdom (on Rampion, see Notes 5 and 37 to
the Consolidated Financial Statements). This segment consisted
of onshore wind, offshore wind, and solar farms. E.ON planned,
built, operated, and managed renewable generation assets.

Non-Core Business
This segment consists of the E.ON Group’s non-strategic activities.
This applies to the operation and dismantling of nuclear power
stations in Germany (which is managed by the PreussenElektra
unit) and the generation business in Turkey.

Special Events in the Reporting Period

Resolution Adopted for Personnel Changes in the E.ON SE
Management Board Effective April 1, 2021
In December 2020, the E.ON SE Supervisory Board resolved to
appoint Leonhard Birnbaum as Chairman of the Company’s
Management Board and CEO effective April 1, 2021. Birnbaum
will succeed Johannes Teyssen. Teyssen joined the Group in 1989,
has been a member of the Management Board since 2004, and
has led E.ON for more than ten years.

As part of the succession plan for the Group’s top leadership,
the Supervisory Board also announced that Victoria Ossadnik,
currently CEO of E.ON Energie Deutschland GmbH, will be
appointed to the E.ON SE Management Board effective April 1,
2021. Ossadnik, who joined the E.ON Group in April 2018,
previously spent seven years at Microsoft Corporation, where
she most recently led its global Enterprise Service Data and
Artificial Intelligence organization. In the future, she will be
responsible for the E.ON Group’s digitization.

Corporate Profile

Business Model

E.ON is an investor-owned energy company with approximately
78,000 employees led by Corporate Functions in Essen. The Group
has two operating segments: Energy Networks and Customer
Solutions. Non-strategic operations are reported under Non-Core
Business. In the prior year the Group also had a Renewables
segment (see commentary below).

Corporate Functions
Corporate Functions’ main task is to lead the E.ON Group. This
involves charting E.ON’s strategic course and managing and
funding its existing business portfolio. Corporate Functions’ tasks
include optimizing E.ON’s overall business across countries and
markets from a financial, strategic, and risk perspective and
conducting stakeholder management.

Energy Networks
This segment consists of E.ON’s power and gas distribution
networks and related activities. It is subdivided into three regional
markets: Germany, Sweden, and East-Central Europe/Turkey
(which consists of the Czech Republic, Hungary, Romania, Poland,
Croatia, Slovakia, and the stake in Enerjisa Enerji in Turkey, which
is accounted for using the equity method). This segment’s main
tasks include operating its power and gas networks safely and
reliably, carrying out all necessary maintenance and repairs, and
expanding its power and gas networks, which frequently involves
adding customer connections and the connection of renewable
energy generation assets.

Customer Solutions
This segment serves as the platform for working with E.ON’s
customers to actively shape Europe’s energy transition. This
includes supplying customers in Europe (excluding Turkey) with
power, gas, and heat as well as with products and services that
enhance their energy efficiency and autonomy and provide
other benefits. E.ON’s activities are tailored to the individual
needs of customers across all categories: residential, small and
medium-sized enterprises, large commercial and industrial,
sales partners, and public entities. E.ON’s main presence in this
business is in Germany, the United Kingdom, the Netherlands,
Belgium, Sweden, Italy, the Czech Republic, Hungary, Romania,
and Poland. Businesses that provide innovative solutions (like
E.ON Business Solutions and the eMobility business) are also
part of this segment.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Changes in Segment Reporting
The innogy takeover successfully closed in 2019. Effective
January 1, 2020, innogy’s operations are no longer managed
and disclosed as a separate segment but rather integrated into
Energy Networks, Customer Solutions, and Corporate Functions/
Other. innogy’s network businesses were assigned to Energy
Networks. Its power and gas sales along with new customer
solutions (such as eMobility services) are reported at Customer
Solutions. Corporate Functions/Other includes innogy’s corporate
functions and internal services. After substantially all of the
Renewables segment was transferred to RWE, its remaining
businesses are reported at Energy Networks in Germany,
Customer Solutions in the United Kingdom, and Corporate
Functions/Other.

Customer Solutions’ Germany unit now includes the heating
business formerly disclosed at its Other unit. In addition, three
E.ON Business Solutions companies were transferred from
Customer Solutions’ Other unit to its United Kingdom unit. Where
necessary, the prior-year figures were adjusted accordingly.

Merger Squeeze-out of innogy’s Remaining Minority
Shareholders Concluded
On March 4, 2020, the Extraordinary General Meeting of
innogy SE adopted a resolution to transfer the remaining minority
shareholders’ innogy stock. The merger squeeze-out adopted at
the meeting took effect when the transfer resolution and merger
were entered into the Commercial Register on June 2, 2020. In
early June 2020 cash compensation totaling €2.4 billion was paid
to minority shareholders. The resulting reduction in Group equity
mainly affected the retained earnings of E.ON SE shareholders.

At the conclusion of the squeeze-out, the €5 billion in acquisition
financing E.ON originally arranged, which had been reduced to
€1.75 billion in August 2018, was cancelled.

Accounting of innogy Acquisition Finalized
The accounting of the innogy acquisition was finalized in the third
quarter of 2020. New insights gained by September 18, 2020,
into the amount of acquisition costs and acquired assets,
including goodwill and liabilities, led to retrospective adjustments,
including resulting changes to the Consolidated Balance Sheets
at December 31, 2019. Goodwill increased by €197 million
relative to the figure recorded at year-end 2019, mainly because
of changes in the valuation of certain assets acquired in the
takeover.

Transfer of innogy Bonds to E.ON Concluded
On August 13, 2020, E.ON launched transactions to harmonize
the new E.ON Group’s funding structure. These transactions
involve E.ON offering innogy bondholders the option to change
the debtor of roughly €11.5 billion in bonds to E.ON. The offer
gave innogy bondholders the option to hold bonds that have the
same status as current E.ON bonds. It will also ensure that all
debt investors are treated equally. The transaction was completely
concluded in November 2020. 99.95 percent of outstanding
innogy bonds were successfully transferred.

European Commission’s Conditions for innogy Takeover Fulfilled
With regard to the innogy takeover, the European Commission,
among other things, imposed conditions requiring the disposal
of certain E.ON and innogy businesses in Eastern Europe.

To fulfill one of these conditions, on July 10, 2020, E.ON and
MVM Group signed an agreement regarding the sale of innogy
Česká republika a.s. and thus innogy SE’s entire electricity and
gas retail business in the Czech Republic. Pursuant to IFRS 5,
E.ON had already reclassified these innogy operations in the
Czech Republic as discontinued operations effective Septem-
ber 30, 2019. The transaction was cleared by the European
Commission at the end of October and subsequently closed on
October 30, 2020.

Corporate Profile

Another of the European Commission’s conditions was the sale
of E.ON Energie Deutschland’s heating electricity business in
Germany. The portfolio of contracts consists of all special con-
tracts with customers supplied with heating electricity and, if
such customers also procure household electricity for which there
is a separate meter at the same premises, the corresponding
household electricity contract. In preparation for the sale, the
portfolio of contracts was separated into two newly founded
companies, E.ON Heizstrom Nord GmbH (“EHN”) and E.ON
Heizstrom Süd GmbH (“EHS”). Pursuant to IFRS 5, due to the
obligation to sell these operations, E.ON had reclassified the
heating electricity business as a disposal group effective Septem-
ber 30, 2019. The sale of EHN and EHS closed on April 28, 2020.

In addition, on September 23, 2020, E.ON sold its subsidiary
E.ON Energiakereskedelmi Kft. (“EKER”), which operates its
non-regulated retail electricity business for commercial cus-
tomers in Hungary, to Audax Renovables. Pursuant to IFRS 5,
E.ON had already reclassified EKER’s business as a disposal
group effective September 30, 2019, owing to its obligation to
dispose of these operations.

Previously E.ON had withdrawn from the operation of a number
of electric-vehicle charging stations located along motorways
in Germany. By closing these transactions E.ON completely ful-
filled the antitrust conditions in conjunction with the innogy
takeover.

Acquisition of Stake in VSE Holding Successfully Completed
In August 2020 E.ON completed the acquisition of 49 percent
of the shares in VSE Holding (“VSEH”) from RWE. Extensive
decision-making powers over VSEH’s business operations give
E.ON a controlling influence pursuant to IFRS. VSEH is there-
fore fully consolidated and accounted for using the acquisition
method in accordance with IFRS 3 (see Note 5 to the Consoli-
dated Financial Statements). The purchase price to be paid to
RWE was not cash-effective in the 2020 financial year. It was
offset against an open receivable in conjunction with the acqui-
sition of RWE’s innogy stake, which closed on September 18,
2019. The transaction therefore had no material impact on cash
flow in the 2020 financial year.

Operations during the Covid-19 Pandemic
E.ON’s top priorities during the Covid-19 pandemic are a secure
energy supply and the safety of employees and customers. E.ON’s
power, gas, and heat networks, which secure the energy supply
in large parts of Europe, continue to run stably, even under
these difficult conditions. E.ON was able to draw on previously
prepared pandemic and crisis plans, which it implemented
accordingly. This included updating risk assessments, adjusting
rules in line with government regulations, and conducting
timely communications to promote transparency and aware-
ness regarding the Covid-19 pandemic and E.ON’s response
measures. This made it possible to maintain all key functions.
The most important measures included strict adherence to
hygiene and social-distancing rules as well as the isolation of
particularly sensitive work areas, such as network control cen-
ters. In addition, technicians who do field work on the network
have special equipment to minimize the risk of infection.

In addition, E.ON SE Management Board members used various
information channels on Connect, E.ON’s intranet platform, to
share their views on the pandemic and explain its impact on every-
day working life as well as on the Company. The purpose was
to inform employees swiftly and comprehensively. Connect not
only provided information about the measures taken to contain
the Covid-19 pandemic. It also created interactive opportunities
for employees to ask questions and to discuss them in town hall
meetings. Furthermore, helping employees deal with the impact
of the pandemic was and remains one of E.ON‘s priorities. Where
possible, the Company therefore made use of all forms of flexible
working arrangements (such as home office and variable work-
ing hours) in order to accommodate employees’ personal circum-
stances and needs. Covid-19 also made it necessary to adjust
meeting formats. Most meetings were held virtually and still are.
In addition, managers have paid even more attention than usual
to their employees’ well-being and, when needed, have pointed
them toward company assistance and support services, such as
a confidential social counseling service. This was ensured in
several ways, including additional communications and individual
coordination at the management level.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Nord Stream Stake Transferred to Contractual Trust
Arrangement (“CTA”)
E.ON Beteiligungen GmbH held all of the shares of PEG Infra-
struktur AG (“PEGI”) and thus an indirect, 15.5-percent stake in
Nord Stream AG. Nord Stream AG, a project company founded
in 2005, owns and operates two offshore gas pipelines, each
with a length of 1,224 kilometers, that transport natural gas from
Russia to Germany. In a contract dated December 18, 2019,
E.ON Beteiligungen GmbH sold all of its PEGI shares and thus
its indirect stake in Nord Stream AG to E.ON Pension Trust e.V.
(“EPT”) with effect and for the account of the trust assets of
MEON Pensions GmbH & Co. KG (“MEON”). The shares were
transferred at the end of 2019. The purchase price of €1.1 billion
was paid at the start of 2020.

Agreement on Strategic Partnership with Kraken Technologies
In March 2020 E.ON reached a contractual agreement on a
strategic partnership with Kraken Technologies, a subsidiary of
Octopus Energy. The strategic partnership, E.ONNext, uses
Kraken Technologies’ technology platform and will transform
E.ON UK’s business with residential and small and medium
enterprise customers.

E.ON and Kraken Technologies will further improve the platform
in order to offer outstanding customer service founded on the
principles of customer orientation, simplicity, transparency, and
cost-efficiency. In the first phase, npower’s customers are cur-
rently being migrated to the new platform; E.ON UK’s customers
will be migrated in the second phase. By the end of December
2020, nearly 70 percent of npower’s residential customer con-
tracts had been transferred to E.ONNext.

Sale of Real Estate Assets
Fully consolidated E.ON Group companies E.ON NA Capital, Inc.
and E.ON RE Investments LLC transferred real estate assets in
the amount of roughly US$288 million to other entities in 2020;
US$265 million was transferred to the trust assets of E.ON
Pension Trust e.V., which is not fully consolidated. The payments
of the purchase price were made primarily in 2020.

As many European countries relaxed the restrictions on public
life and the economy in the summer of 2020, E.ON too took steps
to enable many of its employees to return to their jobs respon-
sibly. The third quarter of 2020 saw a renewed rise in Covid-19
infections across Europe that continued into the fourth quarter
and, in many cases, exceeded the peaks that had been recorded
during the lockdown in the spring of 2020. This resulted in
many cities and regions being classified as high-risk areas,
which in such cases led to additional restrictions on daily life.
E.ON is continuously analyzing the risk situation resulting from
the Covid-19 pandemic and, if necessary, will take additional
measures to contain the pandemic’s impact.

During the Covid-19 pandemic, E.ON temporarily shortened
work schedules, particularly in the United Kingdom, and availed
itself of related government support, which for the E.ON Group
is, on balance, negligible. Nevertheless, the employment situa-
tion at E.ON has remained very stable over the course of the
Covid-19 crisis. In this regard, there have been no noteworthy
longer-term effects on employment in the E.ON Group.

Other impacts of the Covid-19 pandemic on E.ON’s business
are described in the Business Report, the Forecast Report, and
the Risks and Chances Report.

Corporate Bonds Issued
In 2020 E.ON issued various corporate bonds totaling €5 billion.
The high level of investor demand enabled E.ON to secure
favorable interest terms across all maturities (month of issuance
in parenthesis):

• €750 million bond maturing in December 2023
with a coupon of 0 percent per year (January)

• €1 billion green bond maturing in September 2027
with a coupon of 0.375 percent per year (January)

• €500 million bond maturing in December 2030
with a coupon of 0.75 percent per year (January)

• €750 million bond maturing in October 2025
with a coupon of 1 percent per year (April)

• €1 billion bond maturing in April 2023

with a coupon of 0.375 percent per year (May)
• €500 million bond maturing in February 2028
with a coupon of 0.75 percent per year (May)

• €500 million green bond maturing in August 2031
with a coupon of 0.875 percent per year (May).

Corporate Profile

Acquisition of Residual Power Output Rights
In 2020 a total of 19 TWh of residual power output rights were
acquired from the company that operates Krümmel nuclear
power plant (“NPP”) and transferred to Grohnde (3 TWh in
October 2020), Isar II (6 TWh in February 2020), and Brokdorf
(5 TWh each in February and December 2020), NPPs managed
by PreussenElektra. The legal framework ensures the supply of
all NPPs operated by E.ON with additional amounts of residual
power output (for more information, see pages 61 and 62 of
the Risk and Chances Report as well as Notes 29 and 37 to the
Consolidated Financial Statements).

Reorganization of E.ON’s Business in Hungary
In early October 2019 E.ON acquired EnBW’s 27-percent
stake in ELMŰ Nyrt. (“ELMŰ”) and ÉMÁSZ Nyrt. (“ÉMÁSZ”).
Subsequently, E.ON, MVM Magyar Villamos Művek Zrt.
(“MVM,” a shareholder of ELMŰ and ÉMÁSZ), and Opus Global
Nyrt. (“Opus”) signed a framework agreement. This agreement
enables E.ON to give itself a balanced and optimized portfolio
in Hungary that will also make it possible to swiftly integrate
innogy’s operations there.

The agreement is expected to be fully implemented in 2021
after clearance by the relevant agencies. This will give MVM
100 percent of distribution operator ÉMÁSZ, ÉMÁSZ Hálózati
Kft. (“ÉMÁSZ DSO“), and a 25-percent stake in E.ON Hungária
Zrt. (including the innogy holding companies, ELMÜ Zrt. and
ÉMÁSZ Zrt.). In addition, Opus is to acquire current E.ON sub-
sidiary E.ON Tiszántúli Áramhálózati Zrt. (“E.ON ETI”). Pursuant
to IFRS 5, ÉMÁSZ DSO as well as E.ON ETI were reclassified as
a disposal group effective December 31, 2020. E.ON ETI assets
and liabilities had already been reclassified as a disposal group
in 2019.

New Central Commodity Procurement Entity, E.ON Energy
Markets, Founded
On October 1, 2020, newly founded E.ON Energy Markets GmbH
(“EEM”) began operating as the Group’s commodity procurement
entity. EEM gives affiliated Group companies access to outside
trading markets (which have previously been conducted decen-
trally) and bundles the resulting risks. Alongside innogy Commod-
ities GmbH, EEM provides market access for E.ON’s portfolio in
Germany. In the future, EEM will handle power and gas procure-
ment for other E.ON companies in Germany and elsewhere.

Management System

E.ON’s corporate strategy aims to deliver sustainable growth in
shareholder value. E.ON has in place a Group-wide planning and
controlling system to assist its in planning and managing the
Group as a whole and its individual businesses with an eye to
increasing their value. This system ensures that E.ON’s financial
resources are allocated efficiently. E.ON strives to enhance its
sustainability performance efficiently and effectively as well.
It embeds these expectations progressively more deeply into
its organization—across all organizational entities and all pro-
cesses—by means of binding Group-wide policies (for more
information, see the Separate Combined Non-Financial Report
on pages 100 to 115).

Key Performance Indicators
In the 2020 financial year, E.ON’s most important key perfor-
mance indicators (“KPIs”) for managing its operating business
were adjusted EBIT and cash-effective investments. Other KPIs
for managing the E.ON Group are cash-conversion rate, adjusted
net income, earnings per share (based on adjusted net income),
and debt factor. In the prior year, the Combined Group Manage-
ment Report’s presentation of sales and the KPIs relevant for
management control also included the results of discontinued
operations in the Renewables segment that were deconsolidated
effective September 18, 2019. Pages 34 to 36 of the Combined
Group Management Report and Note 35 to the Consolidated
Financial Statements contain reconciliations of these indicators
to the disclosures in the E.ON SE and Subsidiaries Consolidated
Statements of Income, Consolidated Balance Sheets, and Con-
solidated Statements of Cash Flows.

Adjusted earnings before interest and taxes (“adjusted EBIT”) is
E.ON’s most important KPI for purposes of internal management
control and as an indicator of its businesses’ long-term earnings
power. The E.ON Management Board is convinced that adjusted
EBIT is the most suitable KPI for assessing operating performance
because it presents a business’s operating earnings independently
of non-operating factors, interest, and taxes. The adjustments
include net book gains, certain restructuring expenses, impair-
ment charges and reversals, the marking to market of derivatives,
and other non-operating earnings (see the explanatory infor-
mation on pages 34 to 36 of the Combined Group Management
Report and in Note 35 to the Consolidated Financial Statements).

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

In addition, the effects of the subsequent valuation of hidden
reserves and liabilities that were identified as part of the pur-
chase-price calculation and allocation for the innogy transaction
are disclosed separately.

Cash-effective investments are equal to the investment expen-
ditures shown in the E.ON Group’s Consolidated Statements
of Cash Flows. In the prior year, these included the investments
of discontinued operations in the Renewables segment until they
were deconsolidated effective September 18, 2019.

Cash-conversion rate is equal to operating cash flow before inter-
est and taxes divided by adjusted EBITDA. It indicates whether
E.ON’s operating earnings are generating enough liquidity. The
expenditures for the dismantling of nuclear power stations that
are included in operating cash flow before interest and taxes are
not factored into cash-conversion rate. To balance out fluctuations
that result primarily from payments around the balance-sheet
date, E.ON will manage its cash-conversion rate by means of a
target figure over the three years of the medium-term plan.

Adjusted net income is an earnings figure after interest income,
income taxes, and non-controlling interests that has likewise
been adjusted to exclude non-operating effects (see the explan-
atory information on page 36 of the Combined Group Manage-
ment Report).

E.ON manages its capital structure by means of its debt factor
(see the section entitled Finance Strategy on page 37). Debt
factor is equal to economic net debt divided by adjusted EBITDA
and is therefore a dynamic debt metric. Economic net debt
includes net financial debt as well as pension and asset-retire-
ment obligations.

Other KPIs
Alongside E.ON’s most important financial management KPIs,
the Combined Group Management Report includes other financial
and non-financial KPIs to present the performance of E.ON’s
operating business and as part of E.ON’s responsibility for all its
stakeholders: employees, customers, shareholders, bond inves-
tors, and the countries in which the Group operates. Operating
cash flow, power and gas passthrough and sales volume, and
selected employee information are examples of other KPIs.

In addition, some KPIs are important for E.ON as a customer-
focused company. For example, E.ON’s ability to acquire new
customers and retain existing ones is crucial to the Company’s
success. Net promoter score (“NPS”) measures customers’ will-
ingness to recommend E.ON to a friend or colleague. Our The
Sustainability Report and the Separate Combined Non-Financial
Report describe how NPS fits into the Company’s management
approach.

However, these other KPIs are not the focus of the ongoing
management of E.ON’s businesses.

Innovation

Innovations are an important element of E.ON’s business oper-
ations. The transition of today’s energy system toward a distrib-
uted, digital, and sustainable energy world goes hand in hand
with the use of new technologies and the development of new,
innovative business models. E.ON’s focus is on its core busi-
nesses: energy networks, regulated and market-based energy
infrastructure, and customer solutions for its commercial and
residential customers. Innovations in these businesses make a
significant contribution to E.ON’s future and competitiveness
and the implementation of the energy transition in Europe.

In a distributed energy system, E.ON will be even more of an
energy service provider for its business partners and customers.
In a world in which every household and every company can
be an energy producer, roles established over many years will
change. Tomorrow’s customers will be partners who may be
energy producers and traders as well as energy consumers. At
the same time, more and more renewable power will be fed into
the grid. These parallel trends—more market participants and
more renewables feed-in—pose significant technical and organi-
zational challenges for grid management. Increasingly, managing
distributed feed-in requires new technologies like artificial intel-
ligence. In addition, E.ON’s innovation activities are focusing
increasingly on the Internet of Things (“IoT”) and corresponding
data processing systems. The purpose is to give E.ON the
capability in the future to manage a much more complex energy
system that can no longer be controlled by humans alone.

Corporate Profile

In 2020 Group Innovation adopted a new 360-degree innovation
approach. It combines E.ON’s own innovation activities and
outside collaborations in a single entity. This strengthens E.ON’s
partnerships with other innovative and global companies, start-
ups, universities, other institutions, and thought leaders. The
new 360-degree innovation approach has the following core
elements:

Forging Strategic Partnership with Startups, Blue Chips, and
Technology Companies
Together with innovative partners, E.ON is exploring which
technologies, applications, platforms, and services will become
relevant in the future and can provide the best and most sus-
tainable solution for customers. Partnering with startups, tech-
nology groups, and other innovative companies in the years
ahead will enable E.ON to differentiate itself from competitors
much more by means of innovation than productivity gains.
E.ON already uses cross-industry knowledge sharing as a catalyst
for progress and to accelerate the energy transition. In 2020,
E.ON business units concluded commercial agreements totaling
€12 million with 24 start-ups from E.ON’s investment platform
to test new technologies and their customer acceptance in its
operating business. If test results are successful, these solutions
can be deployed at other E.ON business units, enabling E.ON to
tap new growth areas for future business. E.ON focuses on
areas like sustainability, customer centricity, eMobility, and IoT
services for the digitization of its network and sales businesses.

Partnering with Universities and Other Scientific Institutions
Together with the E.ON Energy Research Center at RWTH
Aachen University, E.ON is pursuing a wide range of research
and development activities to identify technology trends at
an early stage and assess their economic potential for the Com-
pany’s future business. E.ON and the E.ON Energy Research
Center launched 12 new joint projects and 14 studies in 2020.
The knowledge gained from them can be integrated more quickly
into E.ON’s ongoing innovation projects at its business units.
The annual budget for the partnership with RWTH amounts to
approximately €2 million. E.ON is also in contact with other

leading scientific institutions and universities in Germany in
order to help shape the implementation of the country’s energy
transition. In addition, E.ON contributes its expertise to state-
ments of the German science academies on policy, technological,
and regulatory issues. In this way, E.ON and its partners also
support the implementation of the European Green Deal, whose
purpose is to make the European Union’s economy climate-
neutral by 2050.

Expanding and Integrating In-house Innovations into E.ON’s
Existing Business
E.ON is one of Europe’s largest distribution system operators and
energy suppliers. It is therefore well placed to play a key role
in shaping the energy transition. Sector integration is expanding
the energy supply business beyond its traditional boundaries.
This is already enabling E.ON to establish new businesses in
industry, transport, buildings, and infrastructure. E.ON’s innova-
tive solutions are already helping a variety of industries embrace
green growth and develop individually tailored solutions for
industrial and residential customers. As part of this effort, Group
Innovation conducts projects in four main areas: industrial
automation and electrification, energy grids and city solutions,
connected mobility, and connected lifestyle.

IElectrix is a pilot project for innovative energy concepts in the
distributed and digital energy system of the future. It is part of
European Horizon 2020, the European Union’s largest research
and innovation initiative. E.ON is responsible for the technical
management of IElectrix, which will run for three and a half years.
In IElectrix, E.ON is testing mobile storage systems for distribu-
tion grids in Germany and demonstrating their advantages in
a real-world setting. E.ON’s IElectrix project partners—E.ON
Hungária in Hungary, Stadtwerke Güssing in Austria, and Tata
Power in India—are conducting real-word demonstrations in
their countries. The purpose of all these demonstration projects
is to yield test results, by 2022, on the possibilities for making

Report of the Supervisory Board
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Consolidated Financial Statements
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Inventions and Patents
Partnerships and research and pilot projects of today become
E.ON’s innovations of tomorrow. These ideas also lead to a large
number of inventions that result in patent applications. To protect
intellectual property, E.ON has made patenting an integral part
of its innovation strategy.

E.ON’s Equity Investment and Partnership Platform
To help shape tomorrow’s decarbonized, distributed, and digital
energy system, it is important to have access to the latest tech-
nologies and business models as well as entrepreneurs and
startups in the world’s leading innovation hubs. In 2020 E.ON
founded Future Energy Ventures, a new equity investment and
partnership platform that secures E.ON’s access to outside
innovation and combines E.ON and innogy’s co-investment port-
folios. Future Energy Ventures has offices in Palo Alto (USA),
Tel Aviv (Israel), and Berlin and Essen (Germany). It invests in
digital and digitally enabled technologies and business models
that have the potential to fundamentally change and shape the
energy system of the future.

Toward a Global Innovation Network
E.ON supports its development of new business models by
establishing networks. In 2020 the Company further expanded
its international partnerships with leaders from other industries
as well as leading universities, institutions, and startups. In
October 2020, for the first time more than 5,000 participants
from 63 nations took part in E.ON’s virtual Energy Innovation
Days conference. The conference focused on the challenges
facing the energy industry and the use of innovation to shape
a sustainable energy world.

greater use of renewable electricity in the immediate vicinity
of its production. After successful piloting of the technologies,
all major elements of energy control can be brought together:
energy storage, locally generated renewable energy, smart grid
control, flexibility services, and new commercial marketing
models. IElectrix’s objective is to demonstrate that storage
systems can give distribution grids greater flexibility, thereby
enhancing grid stability and supply security. IElectrix is one of
the ways E.ON is making a significant contribution to developing
technical solutions for a more environmentally friendly and
resilient energy supply in all regions of Europe: for cities and
districts as well as remote, rural areas.

The future of mobility is another key innovation area for E.ON.
In order for eMobility to become established in the marketplace,
E.ON considers improvements in charging infrastructure and
the use of new storage options to be key challenges. E.ON’s
innovation team is testing new technologies to increase the
quality of charging processes. The technologies include artificial
intelligence, robotics, and new approaches to distributed energy
management. One result is OMNe, an innovative digital tool
that provides E.ON’s business customers with comprehensive
advice on enlarging their charging infrastructure for electric
vehicles (“EVs”). With the percentage of EVs in fleets growing
continually, E.ON’s digital advice tool meets the demand for
swiftly adding significant charging infrastructure. However,
installing EV charging stations changes a facility’s power con-
sumption and load profile. Finding the most cost-effective solu-
tion requires a comprehensive view that takes into account all
variables: the number of vehicles, parking duration, load profile,
grid connection, and a company’s energy consumption targets.
OMNe enables any company to plan the installation or expansion
of charging infrastructure in just a few minutes.

Group-wide Transparency on Innovation Activities
In order to continually leverage innovations to generate growth
businesses for E.ON, Group Innovation initiates cross-divisional
innovation and competence networks, which ensure that new
innovative business activities are undertaken throughout the
E.ON Group. In 2020 E.ON developed a new reporting system
for this purpose, the Innovation Dashboard, which provides
comprehensive transparency on all central innovation activities
and product developments and displays information on their
current status quo and expected monetization. It yields real-time
insights for monitoring innovation performance and thus serves
as an improved database for decision-making.

Business Report

Macroeconomic and Industry Environment

Macroeconomic Environment
After growing moderately in 2019, the global economy slumped
significantly in 2020, contrary to the original growth forecasts
from 2019. The global Covid-19 pandemic was mainly respon-
sible. The large number of possible scenarios for the pandemic’s
spread makes it difficult to forecast global economic development
in 2021 as well. Amid a global recession, the unemployment rate
in OECD countries rose sharply. The closure of national borders
intended to slow the spread of Covid-19 restricted freedom
of movement, which had an adverse impact on global economic
development. Industry, commerce, and trade had to reduce pro-
duction worldwide in 2020. The degree of reduction depended
on the pandemic’s spread and the restrictions on employees
and consumers, which varied by country and region. As a result,
energy consumption declined worldwide. For example, the
European Network of Transmission System Operators for Elec-
tricity (“ENTSO-E”) reported that Germany’s total electricity
demand fell by 3 percent relative to 2019, Britain’s by 6 percent,
Spain and France’s by 5 percent, and Italy’s by fully 8 percent.

GDP Growth in Real Terms in 2020

Annual change in percent

-11.3

Germany

United
Kingdom

Netherlands

Sweden

Euro zone

OECD

World

-5.5

-4.6

-3.2

-7.5

-5.5

-4.2

-12

-10

-8

-6

-4

-2

Source: OECD, 2020.

Alongside the pandemic, the Brexit negotiations were a key fac-
tor in 2020. The Brexit transition period, which was supposed
to provide time to work out exit arrangements, concluded at the
end of December 2020. Effective the beginning 2021, the United
Kingdom is no longer part of the EU single market. Shortly before
this, the European Union and the United Kingdom concluded
a trade and cooperation agreement that, among other things,
avoids tariffs.

Energy Policy and Regulatory Environment
Global
The United States’ withdrawal from the Paris Climate Agree-
ment initiated by the President Donald Trump became official
on November 4, 2020. One of the world’s largest industrialized
nations and carbon emitters was therefore no longer part of the
global climate dialogue. However, shortly after the new President,
Joseph Biden, took office in January 2021, the United States
rejoined the Paris Climate Agreement. Biden had indicated prior
to his inauguration his intention of continuing the fight against
climate change.

The pandemic necessitated the postponement of the United
Nations Framework Convention on Climate Change, 26th Confer-
ence of the Parties (“COP 26”) in Glasgow, which was originally
scheduled for November 2020. COP 26 is now scheduled to
begin on November 1, 2021. In addition, EU representatives and
Chinese delegates had been planning to hold talks in Glasgow
with the aim of bringing the People’s Republic of China closer
to the Paris Climate Agreement. In September 2020 President
Xi Jinping made a surprise announcement that China—one of the
world’s largest emitters of greenhouse gases (“GHGs”)—would
strive for carbon neutrality by 2060. This announcement itself
is a sign of progress in international climate-protection efforts.

Europe
In March 2020 the European Commission proposed a draft
European Climate Law as part of the European Green Deal. The
draft initially foresaw a 40-percent reduction in GHG emissions
by 2030 and climate neutrality by 2050. Following an evaluation
of the GHG reduction target in September, the Commission
proposed a higher target of at least 55 percent by 2030. The
European Commission is currently developing strategies and
proposals as a basis for implementing the measures necessary
to reach this target. These include a European structural and
investment fund, a hydrogen strategy, and the 2030 climate
target plan.

Report of the Supervisory Board
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Germany held the EU Council Presidency in the second half of
2020. Work focused on the fight against the Covid-19 pandemic
and its impact, the crafting of a multiannual financial framework,
future relations with the United Kingdom, climate protection,
digitization, and Europe’s global role.

In December 2020 the European Parliament and EU Council
finally agreed on the €1.82 trillion financial framework for 2021
to 2027 and the €750 billion EU economic stimulus package. The
latter’s purpose is to help member states’ economies recover from
the repercussions of the Covid-19 pandemic. The Green Deal,
which was unveiled at the end of 2019 and aims to reduce the
European Union’s net GHG emissions to zero, is the centerpiece
of the EU’s Covid-19 recovery package. The EU heads of state
and government also endorsed the 55-percent reduction target.

Germany
The German government took a number of steps during 2020 to
mitigate the economic slump resulting from the Covid-19 pan-
demic. For example, in March the Bundestag passed legislation
that applied to ongoing obligations, such as electricity and gas
supply contracts. The legislation allows residential customers
and small businesses to suspend payments for electricity and
gas for three months if they can demonstrate that they face eco-
nomic hardship as a result of the Covid-19 pandemic. In early
June 2020 the German government adopted a €130 billion
economic stimulus package for 2020 and 2021. It reduced the
value-added tax in the second half of 2020 and allocates funds
to energy, climate protection, and green mobility. Beginning in
2021, €11 billion alone will be used to stabilize the renewables
surcharge. The federal rebate for the purchase of an electric
vehicle was doubled, and an additional €2.5 billion is earmarked
to support the expansion of charging infrastructure. Other aid
measures for trade and industry were enacted amid the restric-
tions on public life imposed in November and December 2020.

The climate action program adopted by the German federal
government at the end of 2019, which included the pricing of
carbon emissions in the building and transport sectors, was
amended in November 2020. The Fuel Emissions Trading Act
(German abbreviation: “BEHG”) steepened the rate of increase
for carbon allowances in particular. The starting price will be
€25 per metric ton of carbon dioxide in 2021. This will gradually
increase to €55 per metric ton in 2025. Proceeds from the BEHG
will be used primarily to reduce the renewables surcharge.

Through the use of BEHG proceeds and general budget funds,
the renewables surcharge is to be capped at 6.5 cents per kWh
in 2021 and 6 cents per kWh in 2022.

In June 2020 the German federal government announced its
national hydrogen strategy, which aims to develop a market
for hydrogen produced, in particular, from renewable sources.
Its purposes are to help Germany achieve its climate targets
and to incentivize investment in technologies suitable for export.
It provides roughly €7 billion in funding, which will go toward,
among other things, installing up to 5 GW of electrolysis capacity
by 2030. Another €2 billion is to be made available for interna-
tional partnerships.

The Coal Exit Act (German abbreviation: “KAusG”) adopted in
August 2020 provides for the phaseout of coal-fired power
generation in Germany by 2038. It includes a coal-replacement
bonus, which is intended to promote the conversion of newer
power plants in particular to gas (combined heat and power).
E.ON plans to shut down its few remaining coal-fired power
plants as early as year-end 2030.

The Renewable Energy Sources Act (German abbreviation: “EEG”),
which was amended at the end 2020, provides details on the
expansion and promotion of renewables. Among other things, it
includes growth trajectories for the construction of renewables
facilities. The amendment also contains regulations for the con-
tinued operation of renewables facilities whose subsidies would
have expired on January 1, 2021.

On September 29, 2020, the Federal Constitutional Court issued
a ruling: the judges of the First Senate called on lawmakers to
make the compensation mechanism for the nuclear phaseout
clear and legally robust and at the same time to regulate the
handling of prorated residual power output rights. This could
affect E.ON’s business.

United Kingdom
The United Kingdom exited the European Union effective Feb-
ruary 1, 2020. Effective the close of December 31, 2020, it is
no longer part of the EU’s single market. This will not have a
significant impact on E.ON’s business in the United Kingdom.
The Brexit debate dominated Britain’s political agenda, as did
the Covid-19 pandemic, which resulted in the U.K. economy
contracting by around 11 percent in 2020.

Business Report

Nevertheless, combating climate change remains a high priority
for the British government. In March 2020, for example, it
announced subsidies for low-carbon heating systems and for the
decarbonization of district heating networks. Up to £3 billion in
investments are planned for 2020 and 2021 under green stim-
ulus plans called the Green Homes Grant and the Public Sector
Decarbonization Program. In November 2020 the Prime Minister
published a Ten-Point Plan for a Green Industrial Revolution,
which includes the installation of 600,000 heat pumps per year
from 2028 onward and a ban on the sale of new gasoline and
diesel cars from 2030 onward. The United Kingdom also adopted
an ambitious 68 percent emissions reduction target for 2030.
The retail price cap introduced by the U.K. government is expected
to be reviewed by Ofgem, the U.K. energy regulator, in the second
half of 2021. The final decision on the price cap rests with the
government.

Netherlands/Belgium
Numerous government support measures, including tax breaks
and loan guarantees for companies, limited the Covid-19 pan-
demic’s impact on the Dutch economy. The Netherlands’ main
energy policy issue of 2020 was the implementation of the cli-
mate agreement (Dutch: “Klimaatakkoord”) adopted in 2019.
The agreement consists of a set of measures to make the Nether-
lands more sustainable by 2030 (target: a 49-percent reduction
in carbon emissions). It encompasses the expansion of renew-
ables, the phaseout of fossil energy production, and a more sus-
tainable approach to the environment. The measures include
building insulation and the use of gases made from renewable
sources. The Energy Act and the Heat Act, which are to establish
the rules for the country’s future energy supply, were still being
drafted at the time of this report’s preparation and are not
expected to be completed before the election of members of
the second chamber, which is planned for the second half of
March 2021.

Italy
The Italian central government responded to the outbreak of
the Covid-19 pandemic by issuing numerous decrees aimed
at mitigating financial repercussions (such as from business
closures) for companies and households. The measures included
a temporary disconnection ban for insolvent electricity customers
with low consumption.

The “Milleproroghe” decree of December 30, 2019, which was
adopted as Law No. 8 on February 28, 2020, transposed into
national law the provisions of the EU Renewable Energy Direc-
tive II aimed at promoting the use of renewable energy. The
degree also postponed the liberalization of Italy’s energy market.

Sweden
The contact restrictions imposed by Sweden at the start of the
Covid-19 pandemic were less strict than those of other countries.
One result of this was a smaller reduction in energy demand.

The government, which was formed at the start of 2019, created
the Swedish Climate Policy Council, consisting of eight ministers
and chaired by the prime minister. The council’s purpose is to
ensure that Sweden becomes the first country to stop using fossil
fuels. The Ministry of the Environment and Energy is currently
working on an electrification strategy. The Ministry of Infrastruc-
ture established an electrification committee for the transport
sector, which will be active until the end of 2022. In April 2020
a waste-incineration tax took effect; its purpose is to increase
revenues from environmental taxes. In addition, the formation
of a parliamentary majority continues with regard to certain
aspects of electricity grid regulation.

East-Central Europe
The Covid-19 pandemic considerably weakened the Czech
economy. The introduction of a new energy law was announced
but is not expected to take effect until January 2023. The gov-
erning party’s goal remains to support the completion of a
nuclear power plant that will secure the country’s energy supply
over the long term.

Hungary’s government and parliament adopted and reaffirmed
climate and energy strategies and plans with targets for 2030 and
2050. These include phasing out coal production by 2030 and
achieving climate neutrality in 2050. The start of the regulatory
period for energy networks, originally scheduled for January 1,
2021, was postponed until March 31, 2021. The government
continues to foresee the introduction of smart meters and a
plan for the mandatory implementation of energy-saving and
energy-efficiency measures.

Report of the Supervisory Board
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Business Performance

The 2020 financial year was shaped by the Covid-19 pandemic.
Factoring in countermeasures, the impact of the Covid-19 pan-
demic adversely affected the Group’s 2020 earnings by a figure
in the low to mid three-digit million euro range. These effects
occurred mainly at the U.K. sales business and the network
business in Germany. They consist primarily of lower sales and
an increase in other operating expenses. Despite these challenges,
E.ON’s operating business delivered a solid performance.

Sales of €60.9 billion were €19.7 billion above the prior-year
figure. The increase resulted largely from the inclusion of the
innogy Group for the entire year.

Adjusted EBIT for the E.ON Group of about €3.8 billion was
about €0.6 billion above the prior-year level and thus below the
forecast range of €3.9 to €4.1 billion. Adjusted net income of
€1.6 billion was slightly above the prior-year level and thus like-
wise below the forecast range of €1.7 to €1.9 billion. Earnings
per share, which are based on adjusted net income, amounted to
€0.63 in the reporting period (prior year: €0.67). These results
are principally attributable to the Covid-19 pandemic’s economic
repercussions. Adjusted EBIT and adjusted net income are both
within the forecast ranges that were adjusted in August 2020.

In addition, E.ON recorded a cash-conversion rate of 91 percent
in the 2020 financial year. Cash-conversion rate is equal to
operating cash flow before interest and taxes (€5.9 billion)
divided by adjusted EBITDA (€6.9 billion), without factoring
in payments for the dismantling of nuclear power stations
(roughly -€0.4 billion). E.ON continues to expect to achieve an
average cash-conversion rate of 95 percent for the 2020 to
2022 financial years.

In view of the Covid-19 countermeasures, Poland postponed the
imposition of consumer fees, which were to be part of the estab-
lishment of a capacity market, from October 2020 to January
2021. During 2020 Poland’s government adopted a number of
what it called Covid-19 safeguards, including tax exemptions
and the granting of microcredit and loans to businesses. In Sep-
tember the government and miners’ unions reached a tentative
agreement to close the country’s coal mines by 2049.

Croatia is expected to amend legislation relating to energy effi-
ciency and renewable energy in 2021. Important developments
in the energy sector relate to the gas market: an LNG terminal
became operational on January 1, 2021, and in April 2021 the
residential gas market is supposed to be opened to competition.

In March 2020 a new government was formed in Slovenia under
Prime Minister Janez Janša after the previous prime minister
and government resigned in January 2020. In October the gov-
ernment presented a draft for a new Electricity Supply Act to
transpose the EU electricity market directives into national law.
This was followed in November by draft legislation to promote
renewable energy. Neither draft was enacted by the end of 2020,
and the consultations had not been completed at the time of
this report’s preparation.

Romania’s economy too was adversely affected by the Covid-19
pandemic. The government and state agencies responded, for
example, by awarding subsidies to small and medium-sized enter-
prises. In 2020 Romania’s parliament passed two amendments
to the Energy Law that have implications for the activities of
distribution system operators. These include the obligation to
connect customers and to speed up the grid-connection process.
The gas market was liberalized effective July 1, 2020 (which
affects wholesale and retail prices). This was followed by the
liberalization of the electricity market effective January 2021.
The government unveiled a new energy strategy in November
2020 but had not yet adopted it by the time of this report’s
preparation.

Business Report

Cash-effective investments of €4.2 billion were significantly
below the prior-year figure of €5.5 billion and the €4.5 billion
forecast for 2020 in the E.ON 2019 Annual Report. This deviation
from the original forecast is attributable to subsequent purchase-
price reductions in conjunction with the innogy acquisition. These
payments for E.ON’s account reduce cash-effective investments.
Including this effect, cash-effective investments were within the
forecast range that was adjusted in August 2020.

Cash provided by operating activities of continuing and discon-
tinued operations of €5.3 billion was considerably above the
prior-year level (€3 billion). The inclusion of the innogy Group
for the entire year was the principal reason.

Acquisitions, Disposals, and Discontinued Operations in 2020
In 2020 E.ON executed the following significant transactions and
made the following reclassifications pursuant to IFRS 5. Note 5
to the Consolidated Financial Statements contains detailed infor-
mation about them:

• Accounting of innogy acquisition concluded
• Acquisition of a 49-percent stake in VSE Holding
• Disposal of innogy’s sales business in the Czech Republic
• Disposal of the heating electricity business in Germany
• Disposal of E.ON’s non-regulated commercial electricity

end-customer business in Hungary

• Disclosure of the 20-percent stake in Rampion offshore

wind farm as an asset held for sale

• Disclosure of both E.ON ETI and ÉMÁSZ DSO as a disposal

group

• Disposal of real estate assets.

Cash provided by investing activities of continuing operations
included cash-effective disposal proceeds totaling €2.8 billion
in 2020 (prior year: €0.3 billion).

Earnings Situation

Sales
E.ON’s sales in 2020 increased by €19.7 billion year on year to
€60.9 billion.

Energy Networks’ sales of €18.3 billion surpassed the prior- year
figure by €6.2 billion. This is principally attributable to the inclu-
sion of innogy operations, primarily in Germany (+€5.4 billion).

Customer Solutions’ sales rose by €16.5 billion to €48.3 billion.
This increase likewise resulted mainly from the inclusion of
innogy, in particular in Germany (+€9.6 billion), the United King-
dom (+€4.5 billion), and the Netherlands/Belgium (+€2 billion).

Substantially all of the Renewables segment was transferred to
RWE in September 2019. Its operations that remain at E.ON
are disclosed in other segments (see page 21). Effective 2020
the Renewables segment therefore no longer exists.

Sales at Non-Core Business increased significantly year on year,
in particular because PreussenElektra benefitted from higher
sales prices. This was partially offset by a decline in sales
resulting from the transfer of stakes in power stations to RWE
in September 2019.

Sales recorded at Corporate Functions/Other of €2.7 billion
were €1.9 billion above the prior-year figure. The increase is
mainly attributable to in-house services performed for innogy
companies and to E.ON Energy Markets and innogy Commod-
ities GmbH (see page 24), the Company’s entities for energy
procurement, which are reported at this segment.

Sales1, 2

€ in millions

Energy Networks

Customer Solutions

Renewables

Non-Core Business

Corporate Functions/Other

Consolidation

E.ON Group

Fourth quarter

2020

5,252

2019

4,970

13,996

14,845

–

360

1,749

-3,727

17,630

–

308

300

-2,537

17,886

+/- %

-6

–

+17

+483

–

-1

2020

18,284

48,342

–

1,388

2,702

-9,772

60,944

2019

12,098

31,794

948

1,174

784

-5,514

41,284

Full year

+/- %

+51

+52

–

+18

+245

–

+48

1Includes the discontinued operations in the Renewables segment until September 18, 2019. Sales from continuing operations amounted to €40.8 billion in 2019.
2Adjustment of prior-year figures in the context of “failed-own-use”-accounting with no impact on earnings.

Other Line Items from the Consolidated Statements of Income
Own work capitalized of €680 million was 40 percent above
the prior-year figure of €487 million. The increase is mainly
attributable to the inclusion of innogy for the entire year for the
first time. Own work capitalized consisted predominantly of
ongoing and completed IT projects as well as network invest-
ments.

Other operating income totaled €8,907 million in 2020 (prior
year: €5,367 million). Income from currency-translation effects
of €1,064 million and income from derivative financial instru-
ments of €5,906 million were considerably above the prior-year
figures (€327 million and €3,378 million, respectively). Corre-
sponding amounts resulting from currency-translation effects
and derivative financial instruments are recorded under other
operating expenses. The sale of equity interests and securities
resulted in income of €411 million (prior year: €525 million).

Costs of materials of €47,147 million were substantially above
the prior-year level of €31,434 million. Personnel costs rose by
€1,765 million, from €4,101 million to €5,866 million. These
developments resulted mainly from the inclusion, for the first
time, of the innogy Group for the entire year in 2020.

Depreciation charges rose from €2,489 million in 2019 to
€4,166 million in 2020. This change mainly reflects the inclusion
of innogy for part of 2019 and all of 2020. Planned depreciation
charges in 2020 were recorded primarily at Energy Networks in
Germany; impairment charges, principally in connection with
the restructuring of the network business in Hungary, which is
recorded at Energy Networks’ East-Central Europe unit.

Other operating expenses increased by 44 percent, from
€7,570 million to €10,919 million, chiefly because expenditures
relating to derivative financial instruments (including changes
in currency rates) rose by €1,488 million to €5,787 million.
Expenditures relating to currency-translation effects were also
higher, increasing by €216 million to €641 million.

Income from companies accounted for under the equity method
of €408 million was slightly below the prior-year figure of
€421 million. Higher earnings from innogy subsidiaries resulting
from their inclusion, for the first time, for the entire year were
more than offset by the absence of equity income from the stake
in Nord Stream, which was transferred to the CTA at the end of
2019 (see page 23), and by the low earnings contributions from
the shareholdings in Turkey.

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Adjusted EBIT
For the purpose of internal management control and as the most
important indicator of businesses’ long-term earnings power,
E.ON uses earnings before interest and taxes that have been
adjusted to exclude non-operating effects (“adjusted EBIT”).
The prior-year figure includes the operating earnings of the dis-
continued operations in the Renewables segment prior to their
deconsolidation on September 18, 2019.

The core business’s adjusted EBIT in 2020 rose significantly
—by €509 million—year on year. Energy Networks’ adjusted
EBIT was €752 million above the prior-year level. The inclusion
of innogy’s operations in Germany was the principal reason.
A lower regulated return in Sweden was the primary counter-
vailing factor. In addition, earnings in Germany declined owing
to milder weather and Covid-19 pandemic’s repercussions.
However, these effects will be largely offset in subsequent years.

Adjusted EBIT at Customer Solutions rose by €104 million year
on year. The inclusion of innogy businesses, particularly in Ger-
many and the Netherlands/Belgium, contributed to the increase.
Adjusted EBIT also rose primarily because of significant cost
savings in the previous E.ON business in the United Kingdom.
These items were partially offset primarily by the negative
earnings of innogy’s U.K. operations and weather- related effects
at the previous E.ON sales business in Germany and the United
Kingdom. In addition, the repercussions of Covid-19 had an
adverse impact on earnings, primarily in Germany and the United
Kingdom.

Corporate Functions/Other’s adjusted EBIT declined by
€47 million year on year to -€350 million, especially because
of the inclusion of innogy’s corporate functions for the entire
reporting period. Another adverse factor was that the prior-year
figure included earnings on the stake in Nord Stream AG, which
was transferred to the CTA at the end of 2019.

The E.ON Group’s adjusted EBIT was €556 million above the
prior-year figure. The increase resulted primarily from the afore-
mentioned items in the core business and at Non-Core Business.
PreussenElektra’s adjusted EBIT was slightly higher, in particular
because of higher sales prices, which were partially offset by
higher expenditures for residual power output rights and a decline
in earnings resulting from the transfer of stakes in power plants
to RWE. By contrast, equity earnings from Enerjisa Üretim in
Turkey declined significantly.

Business Report

Adjusted EBIT

€ in millions

Energy Networks

Customer Solutions

Renewables

Corporate Functions/Other

Consolidation

Adjusted EBIT from core business

Non-Core Business

E.ON Group adjusted EBIT

Full year

+/- %

+30

–

-16

–

+18

+13

+17

2020

3,253

454

–

-350

3,363

413

3,776

20191

2,501

350

301

-303

2,854

366

3,220

2020

922

–

-32

973

115

Fourth quarter

20191

+/- %

907

290

–

-222

-3

972

-74

–

+86

–

+188

1,088

1,012

1Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
accordingly.

E.ON generates a large portion of its adjusted EBIT in very stable
businesses. Regulated, quasi-regulated, and long-term con-
tracted businesses accounted for the overwhelming proportion
of E.ON’s adjusted EBIT in 2020.

E.ON’s regulated business consists of operations in which reve-
nues are largely set by law and based on costs. The earnings on
these revenues are therefore extremely stable and predictable.

E.ON’s quasi-regulated and long-term contracted business
consists of operations in which earnings have a high degree of
predictability because key determinants (price and/or volume)
are largely set for the medium to long term. Examples include
the operation of industrial customer solutions with long-term
supply agreements and the operation of heating networks.

Merchant activities are all those that cannot be subsumed
under either of the other two categories.

Reconciliation to Adjusted Earnings Metrics
Like net income, EBIT (earnings before interest and taxes) is
affected by non-operating items, such as the marking to market
of derivatives. Adjusted EBIT has been adjusted to exclude
non-operating effects. The adjustments include net book gains,
certain restructuring expenses, impairment charges and reversals,
the marking to market of derivatives, the subsequent valuation
of hidden reserves and liabilities identified as part of the purchase-
price calculation and allocation for the innogy transaction, and
other non-operating earnings.

Derived from adjusted EBIT, adjusted net income is an earnings
figure after interest income, income taxes, and non-controlling
interests that likewise has been adjusted to exclude non-oper-
ating effects. The adjustments include the aforementioned items
as well as interest expense/income not affecting net income
(in each case after taxes and non-controlling interests). Non-
operating interest expense/income also includes effects from
the resolution of the difference between the nominal and fair
value of innogy bonds.

The disclosures in the Consolidated Statements of Income are
reconciled to the adjusted earnings metrics below.

Reconciliation to Adjusted EBIT
E.ON recorded net income attributable to shareholders of E.ON SE
of €1 billion and corresponding earnings per share of €0.39. In
the prior year E.ON recorded net income of about €1.6 billion
and earnings per share of €0.68.

Pursuant to IFRS 5, income/loss from discontinued operations,
net, is reported separately in the Consolidated Statements of
Income. In the 2020 financial year, this item includes negative
effects from the subsequent adjustment of certain components
of the purchase price in conjunction with the innogy acquisition
and positive earnings from innogy’s sales business in the Czech
Republic (including deconsolidation results). The prior-year
figure primarily includes the earnings from the discontinued
operations at Renewables. Alongside the operating earnings
of discontinued operations, this figure contains items resulting
from the deconsolidation. In this context, items previously recog-
nized in equity were recorded in income. This figure also includes
the earnings from the transitional consolidation of Rampion
wind farm following the reduction in E.ON’s stake to 20 percent.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

E.ON’s tax expense on continuing operations rose from €43 mil-
lion to €871 million. The tax rate on net income from continuing
operations increased from 6 percent to 40 percent. The main
reason for the high tax rate in the period under review was a
one-off item related to the revaluation of deferred tax assets in
the first half of 2020, which was partially offset by taxes for
prior years. Tax-relief effects on non-operating earnings and the
release of tax provisions and liabilities for prior years led to a
lower tax rate in 2019.

Financial results of -€0.7 billion were significantly below the prior-
year level. The inclusion of innogy and the marking to market
of securities held for trading purposes, which is disclosed in non-
operating earnings, had an adverse effect. This could not be fully
offset by a reduction in adverse items relating to the valuation
of non-current provisions and income for prior years. Financial
results also include a positive effect of €328 million resulting
from the resolution of the difference between the nominal and
fair value of innogy bonds (see also page 37).

Net book gains were significantly lower than in the prior year. In
2020 they consist primarily of deconsolidation gains in conjunc-
tion with the fulfilment of EU conditions relating to the innogy
transaction (see pages 21 and 22). The prior-year figure princi-
pally reflects the deconsolidation of the Company’s stake in PEGI,
the parent company of Nord Stream. Income from the sale of
securities was lower than in the prior year as well.

Restructuring expenses were significantly lower than in 2019
and, as in the prior year, consisted primarily of expenditures in
conjunction with the integration of innogy. The 2020 figure also
includes restructuring expenditures for the U.K. retail business.

The marking to market of derivatives in the 2020 financial
year resulted in a positive effect of €1,128 million (prior year:
-€630 million). Positive items in 2020 resulted primarily from
hedging against price fluctuations, in particular at Customer
Solutions and at Corporate Functions/Other due to the central
energy procurement entities, which are reported at the latter
(see page 23).

Reconciliation to Adjusted EBIT

€ in millions

Net income/loss

Attributable to shareholders of E.ON SE
Attributable to non-controlling interests

Income/Loss from discontinued operations, net

Income/Loss from continuing operations

Income taxes

Financial results

Income/Loss from continuing operations before financial results and income taxes

Income/Loss from equity investments

EBIT

Non-operating adjustments

Net book gains (-)/losses (+)
Restructuring expenses
Effects from derivative financial instruments
Impairments (+)/Reversals (-)
Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction
Other non-operating earnings

Reclassified businesses of Renewables2 (adjusted EBIT)

Adjusted EBIT

Impairments (+)/Reversals (-)

Scheduled depreciation and amortization

Reclassified businesses of Renewables2
(scheduled depreciation and amortization, impairment charges and reversals)

Adjusted EBITDA

Fourth quarter

2020

20191

60
15
45

159

206

427

-21

406

682
-40
266
-798
473
328
453

–

1,088

830

–

1,939

-513
-551
38

696

183

-311

-63

-3

-66

1,078
-398
640
556
260
162
-142

–

1,012

745

–

1,822

2020

1,270
1,017
253

1,310

871

702

2,883

2,901

875
-258
656
-1,128
557
802
246

–

3,776

3,102

–

6,905

Full year

20191

1,792
1,550
242

-1,063

729

587

1,359

1,417

1,503
-366
819
630
260
317
-157

300

3,220

2,006

271

5,564

Business Report

In the 2020 financial year, E.ON recorded impairment charges
principally at Energy Networks in Hungary (owing mainly to the
current restructuring of the business there; see page 23), at
Customer Solutions in the United Kingdom (mainly for software
in conjunction with ongoing restructuring measures), and the
Netherlands/Belgium (in particular as part of the planned dis-
posal of the sales business in Belgium). In the prior-year E.ON
recorded impairment charges primarily at Customer Solutions
in the United Kingdom (in particular because of the decision
made at that time to restructure E.ON and innogy’s U.K. sales
business).

Items resulting from the subsequent valuation of hidden reserves
and liabilities as part of the preliminary purchase-price allocation
until September 18, 2020, and newly recorded items resulting
from the valuation of innogy’s financial assets are disclosed sep-
arately. The latter were fully balanced out by year-end 2020.

The decline in other operating earnings is partially attributable to
valuation effects for repurchase obligations pursuant to IAS 32,
non-current provisions, and realized earnings from hedging
transactions for certain currency risks.

Reconciliation to Adjusted Net Income

Reconciliation to Adjusted Net Income
Adjusted net income of €1,638 million was 7 percent above the
prior-year figure of €1,526 million. Besides the above-described
effects in the reconciliation to adjusted EBIT, this reconciliation
includes following items:

Interest income/expenses includes non-operating items. These
rose by €0.3 billion year on year. The prior-year figure primarily
reflects items from the valuation of non-current provisions. The
current-year figure includes, in particular, amounts from the
resolution of the difference between the nominal and fair value
of innogy bonds as well as income for prior years. This was par-
tially offset by valuation effects on securities held for trading
purposes.

The tax rate on continuing operations was 24 percent (prior year:
26 percent).

Non-controlling interests’ share of operating earnings rose sig-
nificantly year on year, principally because of the innogy takeover.

Fourth quarter

Full year

€ in millions

2020

20191

Income/Loss from continuing operations before financial results and income taxes

Income/Loss from equity investments

EBIT

Non-operating adjustments

Reclassified businesses of Renewables2 (adjusted EBIT)

Adjusted EBIT

Net interest income/loss

Non-operating interest expense (+)/income (-)

Reclassified businesses of Renewables2 (operating interest expense)

Operating earnings before taxes

Taxes on operating earnings

Operating earnings attributable to non-controlling interests

Reclassified businesses of Renewables2 (taxes and minority interests on operating earnings)

Adjusted net income

427

-21

406

682

–

1,088

-185

-57

–

846

-190

-107

–

549

-63

-3

-66

1,078

–

1,012

-62

-231

–

719

-199

-171

–

349

2020

2,883

2,901

875

–

3,776

-720

-358

–

2,698

-653

-407

–

1,638

20191

1,359

1,417

1,503

300

3,220

-645

-33

-123

2,419

-580

-317

1,526

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Economic Net Debt
Compared with the year-end 2019 figure of €38.9 billion, eco-
nomic net debt rose by €1.8 billion to €40.7 billion.

The increase in financial liabilities to €30.7 billion relative to
year-end 2019 is mainly attributable to E.ON SE’s issuance of
€5 billion in bonds (see page 23). The issuance proceeds were
used in part to finance the squeeze-out of innogy SE’s minority
shareholders and to repay, on schedule, bonds that had matured
(innogy SE: €750 million; E.ON International Finance B.V.:
€1.4 billion).

E.ON’s net financial position increased by -€1.1 billion relative
to year-end 2019 to roughly -€24 billion. E.ON SE’s dividend
payout, investment expenditures, and cash compensation for
innogy SE’s minority shareholders as part of the squeeze-out
(see page 21) were largely offset by items that included operating
cash flow, the sales proceeds from the transfer of the (indirect)
stake in Nord Stream AG to the CTA (see page 23), and the sales
required under the antitrust clearance, in particular of innogy’s
sales business in the Czech Republic (see page 21).

Despite an increase in plan assets, provisions for pensions were
higher, due mainly to a significant reduction in actuarial interest
rates, which led to an increase in defined benefit obligations.

Economic Net Debt

€ in millions

Liquid funds

Non-current securities

Financial liabilities2

FX hedging adjustment

Net financial position

Provisions for pensions

Asset-retirement obligations3

Economic net debt

December 31

20191

3,602

2,354

2020

4,795

1,887

-30,720

-28,947

166

-23,956

-22,825

-8,088

-8,692

-7,201

-8,869

-40,736

-38,895

1Certain adjustments to the preliminary accounting of the innogy acquisition, which was
provisional until September 18, 2020, must be presented retroactively to the acquisition date.
The prior-year figures were adjusted accordingly.
2Bonds issued by innogy are recorded at their nominal value. The figure shown in the
Consolidated Balance Sheets is €2.1 billion higher (year-end 2019: €2.5 billion higher).
3This figure is not the same as the asset-retirement obligations shown in the Consolidated
Balance Sheets (€10,194 million at December 31, 2020; €10,571 million at December 31,
2019). This is because economic net debt is calculated in part based on the actual amount
of E.ON’s obligations.

Financial Situation

Finance Strategy
E.ON’s finance strategy focuses on capital structure. At the
forefront of this strategy is ensuring that E.ON always has
access to capital markets commensurate with its debt level.

With its target capital structure E.ON aims to sustainably secure
a strong BBB/Baa rating.

E.ON manages its capital structure using debt factor, which
is equal to economic net debt divided by adjusted EBITDA; it is
therefore a dynamic debt metric. Economic net debt includes
not only financial liabilities but also provisions for pensions and
asset-retirement obligations.

The low interest-rate environment continued. In some cases this
led to negative real interest rates on asset-retirement obligations.
As in prior years, provisions therefore exceeded the actual amount
of asset-retirement obligations at year-end 2020 without fac-
toring in discounting and cost-escalation effects. This limits the
relevance of economic net debt as a key figure. E.ON wants eco-
nomic net debt to serve as a useful key figure that aptly depicts
E.ON’s debt situation. In the case of material provisions affected
by negative real interest rates, E.ON has therefore used the
aforementioned actual amount of the obligations instead of the
balance-sheet figure to calculate economic net debt since year-
end 2016.

Pursuant to IFRS valuation standards, innogy’s financial liabili-
ties at the time of initial consolidation were recorded at their
fair value. This fair value is significantly higher than the original
nominal value because interest-rate levels have declined since
innogy’s bonds were issued. The purchase-price allocation
yielded a difference between the nominal value and the fair
value, which results in additional liabilities of €2.1 billion at
year-end 2020. This amount will be recorded in financial earn-
ings as a reduction in expenditures and spread out over the
maturity period of the respective bonds. These balance-sheet
and earnings effects do not alter the interest and principal pay-
ments. To manage economic net debt, E.ON continues to use
the nominal amount of financial liabilities, which deviates from
the figure shown in its balance sheets.

E.ON aims to reduce its debt factor to around 5 over the medium
term. As anticipated, the debt factor of 5.9 at year-end 2020
was above this medium-term target. E.ON expects to achieve a
debt factor of around 5 over the medium term, in particular by
earnings increases in its core business and the leveraging of
synergies identified in conjunction with the innogy transaction.

Business Report

Funding Policy and Initiatives
The key objective of E.ON’s funding policy is for the Company to
have access to a variety of financing sources at all times. E.ON
achieves this objective by using different markets and debt
instruments to maximize the diversity of its investor base. E.ON
issues bonds with tenors that give its debt portfolio a balanced
maturity profile. Moreover, large-volume benchmark issues
may in some cases be combined with smaller issues, private
placements, and/or promissory notes. Furthermore, from 2019
onward E.ON has issued green bonds and has since established
them in its financing mix. In the future, E.ON intends to cover
more than 50 percent of its annual financing requirements with
green bonds.

At the beginning of March 2021, E.ON presented a new green
bond framework. In addition to compliance with the ICMA Green
Bond Principles, which until now set the standard for green
bonds on the capital market, the new E.ON framework is one
of the first in Europe to meet the criteria of the EU Taxonomy
Regulation on sustainable economic activities. The EU Taxonomy
Regulation defines which economic activity is to be classified
as ecologically sustainable and thus sets a Europewide standard
for sustainable investments. E.ON’s green bond framework is
geared toward sustainable projects in both Energy Networks and
Customer Solutions.

External funding is generally carried out by E.ON SE, and the
funds are subsequently on-lent in the Group. In the past, external
funding was also carried out by the Company’s Dutch finance
subsidiary, E.ON International Finance B.V. (“EIF”), under guar-
antee of E.ON SE, and by innogy SE and innogy Finance B.V.
under guarantee of innogy SE. As part of the process of inte-
grating the innogy Group, E.ON harmonized the E.ON Group’s
funding structure. It offered innogy bondholders the option to
change the debtor of their bonds to E.ON by means of consent
solicitations or conversion offers. This offer was accepted for
99.95 percent of the bond volume. All bonds transferred now
have E.ON SE as debtor or guarantor (with EIF as issuer). In 2020
E.ON paid back in full maturities of €2.2 billion. E.ON issued
new debt totaling €5 billion (see page 23).

December 31

2020

2019

26.9
18.4
7.2
0.8
0.3
0.2

0.0

3.8

30.7

24.6
15.6
7.6
0.9
0.3
0.2

0.0

0.1

4.8

29.5

Financial Liabilities

€ in billions

Bonds1
EUR
GBP
USD
JPY
Other currencies

Promissory notes

Commercial paper

Other liabilities

Total

1Includes private placements.

With the exception of a U.S.-dollar-denominated bond issued in
2008, all of E.ON SE and EIF’s currently outstanding bonds were
issued under a Debt Issuance Program (“DIP”). Similarly, innogy
and innogy Finance B.V. bonds were formerly issued under the
former innogy Group’s DIP. A DIP simplifies a company’s ability
to issue debt to investors in public and private placements in
flexible time frames. E.ON SE’s DIP was last updated in March
2020 with a total volume of €35 billion, of which about €16 bil-
lion was utilized at year-end 2020. E.ON SE intends to renew
the DIP in 2021.

In addition to its DIP, E.ON has a €10 billion Commercial Paper
(“CP”) program and a US$10 billion CP program, under which it
can issue short-term notes. At year-end 2020 E.ON had no CP
outstanding (prior year: €50 million).

E.ON also has access to a five-year, €3.5 billion syndicated
credit facility, which was concluded on October 24, 2019, and
which includes two options to extend the facility, in each case
for one year. The first option to extend the facility for another
year was exercised in October 2020. The credit margin is linked,
among other things, to the development of certain ESG ratings,
which gives E.ON financial incentives to pursue a sustainable
corporate strategy. The ESG ratings are set by three renowned
agencies: ISS ESG, MSCI ESG Research, and Sustainalytics.
The facility serves as a reliable, ongoing general liquidity reserve
for the E.ON Group and can be drawn on as needed. The credit
facility is made available by 21 banks which constitute E.ON’s
core group of banks.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Maturity Profile of Bonds Issued by E.ON SE, E.ON International Finance B.V., and innogy Finance B.V.

€ in billions

At December 31, 2020

12.0

10.0

8.0

6.0

4.0

2.0

2021

2022

2023

2024

2025

2026

2027

2028

2029+

In conjunction with the acquisition of innogy SE, on April 6, 2018,
E.ON originally secured a €5 billion acquisition facility, that it
partially cancelled down to €1.75 billion in August 2018. At the
conclusion of the squeeze-out, the facility was cancelled in
June 2020; the facility was undrawn.

E.ON will continue to take into account the trust of rating
agencies, investors, and banks by means of a clear strategy and
transparent communications and therefore holds events that
include an annual informational meeting for its core group of
banks.

Alongside financial liabilities, E.ON has, in the course of its busi-
ness operations, entered into contingencies and other financial
obligations. These include, in particular, guarantees, obligations
from legal disputes and damage claims, as well as current and
non-current contractual, legal, and other obligations. Notes 27,
28, and 32 to the Consolidated Financial Statements contain
more information about E.ON’s bonds as well as liabilities, con-
tingencies, and other commitments.

E.ON’s creditworthiness has been assessed by Standard & Poor’s
(“S&P”) and Moody’s with long-term ratings of BBB and Baa2,
respectively. The outlook for both ratings is stable. In both cases
the ratings were based on the expectation that, over the near
to medium term, E.ON will be able to maintain a debt ratio
commensurate with these ratings. S&P’s and Moody’s short-
term ratings are unchanged at A-2 and P-2, respectively.

E.ON SE Ratings

Moody’s

Standard & Poor’s

Long term

Short term

Outlook

Baa2

BBB

P-2

A-2

Stable

Investments
The E.ON Group’s cash-effective investments in 2020 were
below the prior-year level. Factoring out the reporting-year and
prior-year payments in conjunction with the innogy transaction
(see commentary under Corporate Functions/Other on page 40),
there would have been a significant increase in investments in
the core business. The E.ON Group invested about €4.4 billion
in property, plant, and equipment and intangible assets (prior
year: €3.8 billion). Share investments totaled -€0.2 billion versus
€1.7 billion in the prior year.

Investments

€ in millions

Energy Networks

Customer Solutions

Renewables

Corporate Functions/Other

Consolidation

Investments in core business

Non-Core Business

E.ON Group investments

2020

3,386

790

–

-278

-2

3,896

275

4,171

2019

2,384

1,008

563

1,329

5,285

207

5,492

+/- %

+42

-22

–

-26

+33

-24

Business Report

Energy Networks’ investments increased by 42 percent year on
year, from €2.4 billion to €3.4 billion. Investments in Germany
rose significantly, primarily because of the inclusion of innogy
operations. In addition, the increase reflected in particular new
connections. Investments in new connections and maintenance
were made in Sweden as well. Investments in East-Central
Europe/Turkey were also above the prior-year level. The inclusion
of innogy’s operations in Hungary and Poland as well as VSE
Holding was one of the factors.

Customer Solutions invested €0.2 billion less than in the prior
year. Investments in Sweden declined significantly year on year
owing to the completion of the Högbytorp project. In addition,
the prior-year figure included payments to acquire Coromatic,
a leading provider of critical building infrastructure in Scandina-
via. Investments in the United Kingdom were significantly lower
as well, primarily because of postponed investments for smart
meters. By contrast, the inclusion of innogy’s operations in
Germany and Poland resulted in higher investments. In addition,
E.ON Business Solutions invested in significantly more distrib-
uted-generation projects than in the prior year.

After the transfer of substantially all of the Renewables segment
to RWE in September 2019 and its remaining operations to
other E.ON segments, effective 2020 the Renewables segment
therefore no longer exists.

Subsequent purchase-price reductions in conjunction with the
innogy acquisition had a positive impact on investments recorded
at Corporate Functions/Other in 2020. Because these payments
are for E.ON’s account, they reduce investments. The prior-year
figure primarily reflects payments in conjunction with the public
takeover offer and for the acquisition of additional innogy stock
on-market.

Investments at Non-Core Business were €68 million above the
prior-year level. The prior-year figure reflects, in particular, pay-
ments in conjunction with the innogy transaction recorded at
PreussenElektra. By contrast, PreussenElektra’s investments to
acquire residual power output rights were higher than in the
prior year.

Cash Flow
Cash provided by operating activities of continuing and discon-
tinued operations before interest and taxes of €5.9 billion was
significantly above the prior-year level (€4.4 billion). Energy Net-
works recorded an increase of €1.9 billion year on year thanks
to positive working capital effects at the previous E.ON network
business and the inclusion, for the first time, of innogy’s network
operations for the entire year.

Customer Solutions’ cash flow of €0.4 billion was below the
prior-year level, mainly due to the inclusion of innogy’s operations
in the United Kingdom and to the changes in segment reporting,
which, for comparative purposes, were also made to the prior
year (see page 21). The absence of Renewables’ €0.2 billion con-
tribution relative to the prior year was another factor.

Cash provided by operating activities of continuing and dis-
continued operations also rose because of lower tax payments
(+€0.8 billion), whereas higher interest payments on innogy’s
debt had a negative impact (-€0.1 billion).

Cash provided by investing activities of continuing and discon-
tinued operations totaled -€1.9 billion versus -€5.8 billion in
2019. Expenditures were recorded in the prior year for the acqui-
sition of innogy stock, whereas in the 2020 financial year cash
provided by investing activities benefited from a subsequent
purchase-price payment from RWE. In addition, the payment
received in the first quarter of 2020 for the indirect stake in
Nord Stream AG that was transferred to the CTA in 2019, the
sale of innogy’s sales business in the Czech Republic, an advance
payment in connection with the agreed-on sale of the stake in
Rampion, and the sale of substantial parts of the heating electricity
business in Germany had a positive impact on cash provided by
investing activities.

Cash Flow1

€ in millions

Operating cash flow

Operating cash flow before interest and taxes2

Cash provided by (used for) investing
activities

Cash provided by (used for) financing
activities

2020

5,313

5,948

2019

2,965

4,407

-1,864

-5,820

-2,624

792

1From continuing and discontinued operations.
2Excluding the innogy business in the Czech Republic reclassified in accordance with IFRS 5
and deconsolidated on October 30, 2020.

Cash provided by financing activities of continuing and discon-
tinued operations of -€2.6 billion was €3.4 billion below the
prior-year figure of +€0.8 billion, principally because of payments
in conjunction with the compensation of innogy SE’s remaining
minority shareholders and E.ON SE’s higher dividend payout
relative to the prior year.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

reflects the merger squeeze-out of innogy SE’s remaining minority
shareholders (see page 21). Equity was also reduced by the
dividend payout totaling €1.6 billion, the remeasurement of
pension obligations, and other items not affecting net income
recorded under other comprehensive income. By contrast, net
income for the 2020 financial year served to increase equity.

Non-current debt rose by €2.8 billion, or 5 percent, chiefly
because of the development of non-current bonds and an
increase in pension obligations.

Current debt of €24.7 billion was 5 percent below the figure
at year-end 2019. The reason was the deconsolidation of debt
that had previously been reclassified pursuant to IFRS 5 at
innogy’s business in the Czech Republic, the heating electricity
business in Germany, and a business in Hungary. The repayment
of financial liabilities was another factor.

Dec. 31,
2020

75,484

19,901

95,385

9,055

61,761

24,569

95,385

100

Dec. 31,
2019

75,786

22,294

98,080

13,248

58,982

25,850

98,080

100

Asset Situation

Total assets and liabilities of roughly €95.4 billion were
€2.7 billion, or 3 percent, below the figure at year-end 2019.
Non-current assets declined by €0.3 billion year on year to
€75.5 billion. This is mainly attributable to an increase in assets
and preliminary goodwill from the acquisition of VSE Holding.
A reduction in financial assets, particularly companies accounted
for using the equity method and non-current securities, had a
countervailing effect.

Current assets declined by €2.4 billion, or 11 percent, from
€22.3 billion to roughly €19.9 billion. This resulted mainly from
a decline in other operating assets and the deconsolidation of
assets that had been reclassified as assets held for sale pursuant
to IFRS 5: innogy’s business in the Czech Republic, the heating
electricity business in Germany, and a business in Hungary. This
was partially offset by an increase in liquid funds.

The equity ratio (including non-controlling interests) at year-
end 2020 was 9 percent, which is 5 percentage points lower
than at year-end 2019. The reduction in the equity ratio mainly

Consolidated Assets, Liabilities, and Equity

€ in millions

Non-current assets

Current assets

Total assets

Equity

Non-current liabilities

Current liabilities

Total equity and liabilities

Additional information about E.ON’s asset situation is contained
in Notes to the Consolidated Financial Statements.

Business Report

Business Segments

Energy Networks
Power and Gas Passthrough
Power and gas passthrough in Germany in 2020 rose significantly
owing to the inclusion of innogy operations. Gas passthrough of
the previous E.ON network business was at the prior-year level,

whereas its power passthrough declined, in part because of the
Covid-19 pandemic.

Power passthrough in Sweden was almost unchanged from the
prior year.

Energy Passthrough

Billion kWh

Fourth quarter

Power

Line loss, station use, etc.

Gas

Full year

Power

Line loss, station use, etc.

Gas

Germany

Sweden

East-Central Europe/
Turkey

2020

2019

2020

2019

2020

2019

2020

64.4

2.0

60.6

226.9

7.1

170.6

62.4

1.9

54.3

144.2

4.8

118.5

9.5

0.3

–

34.7

1.1

–

9.8

0.3

–

35.5

1.1

–

17.8

0.9

16.1

64.1

3.9

46.2

16.5

1.0

14.4

46.0

2.9

44.5

91.7

3.2

76.7

325.7

12.1

216.8

Total

2019

88.7

3.2

68.7

225.7

8.8

163.0

The inclusion of innogy’s network business in Hungary and Poland
and the acquisition of VSE Holding Slovakia led to a significant
structural increase in East-Central Europe/Turkey’s power pass-
through. Gas passthrough rose slightly owing to the inclusion of
the innogy business in Croatia. Power and gas passthrough at
the previous E.ON network business was at the prior-year level.

System Length and Network Customers
E.ON’s power system in Germany was about 705,000 kilometers
long, roughly the same as in 2019. As in the prior year, at year-
end it had about 15.1 million connection points for power in its
service territory. E.ON’s gas system was around 104,000 kilo-
meters long and had 1.8 million connection points, likewise
essentially unchanged from 2019.

The length of E.ON’s power system in Sweden was roughly
139,000 kilometers (prior year: 138,000 kilometers). The
number of customers in the power distribution system was
about 1.1 million (prior year: about 1 million).

E.ON operates electricity networks in East-Central Europe/
Turkey with a total system length of 322,000 kilometers and
supplies about 9.7 million network customers. System length
and the number of network customers are thus significantly
higher than the prior-year figures of 296,000 kilometers and
9 million. The increase is principally attributable to the acquisition
of VSE Holding. Gas networks operated by E.ON are roughly
48,000 kilometers long (prior year: roughly 46,000 kilometers).
This increase is primarily attributable to the acquisition of two
distribution system operators in Croatia, which are not material
for the Group as a whole. The number of gas network customers
was unchanged at around 2.6 million.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Sales and Adjusted EBIT
Energy Networks’ sales and adjusted EBIT in 2020 were
significantly above the prior-year level, in particular due to
the inclusion of innogy operations.

In Sweden sales and adjusted EBIT in 2020 were significantly
below the prior-year level. Lower network fees in conjunction with
the start of the new regulatory period constituted the primary
reason for the decline in sales and earnings.

Sales and adjusted EBIT in Germany were €14.6 billion and
€2.2 billion, respectively. As described above, the year-on-year
increase is principally attributable to the inclusion of innogy
operations. Sales at the previous E.ON network business were
at the prior-year level. A decline in power passthrough was
offset by non-recurring regulatory items. By contrast, adjusted
EBIT of the previous E.ON network business declined slightly
owing in part to mild weather and Covid-19. However, these
effects will be largely offset in subsequent years.

Sales and adjusted EBIT in East-Central Europe/Turkey rose sig-
nificantly, likewise because of the innogy takeover. The previous
E.ON operations’ sales and earnings were slightly higher.

Energy Networks

€ in millions

Fourth quarter

Sales

Adjusted EBITDA1

Adjusted EBIT1

Full year

Sales

Adjusted EBITDA1

Adjusted EBIT1

Germany

Sweden

East-Central Europe/
Turkey

2020

2019

2020

2019

2020

2019

2020

4,102

1,028

626

14,563

3,628

2,182

4,031

958

592

9,161

2,313

1,455

240

137

889

529

371

276

183

145

1,024

692

539

910

296

200

2,832

1,042

700

663

262

170

5,252

1,461

922

1,913

18,284

12,098

789

507

5,199

3,253

3,794

2,501

Total

2019

4,970

1,403

907

1Includes effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
accordingly.

Total

2019

26.4

29.1

37.1

92.6

15.5

Business Report

Customer Solutions
Power and Gas Sales Volume
This segment’s power sales in 2020 increased by 154.9 billion kWh
to 369 billion kWh. Its gas sales rose by 124.3 billion kWh to
381.6 billion kWh. The inclusion of innogy operations for the first
time for the entire year was the main reason.

Power Sales

Billion kWh

Fourth quarter

Residential and SME

I&C

Sales partners

Customer groups

Wholesale market

Total

Full year

Residential and SME

I&C

Sales partners

Customer groups

Wholesale market

Total

Gas Sales

Billion kWh

Fourth quarter

Residential and SME

I&C

Sales partners

Customer groups

Wholesale market

Total

Full year

Residential and SME

I&C

Sales partners

Customer groups

Wholesale market

Total

1The line item “wholesale market” includes changes made retroactively.
2Excludes E.ON Business Solutions.

Germany

United Kingdom1

Netherlands/
Belgium

Other2

2020

2019

2020

2019

2020

2019

2020

2019

2020

7.7

6.7

20.2

34.6

20.3

54.9

31.5

30.9

72.5

134.9

61.4

196.3

9.6

9.5

36.3

55.4

3.3

58.7

21.0

20.3

40.8

82.1

12.7

94.8

6.3

8.1

0.6

15.0

3.9

18.9

22.4

31.5

2.2

56.1

20.5

76.6

6.5

9.1

0.6

16.2

5.0

21.2

18.1

18.9

0.6

37.6

8.7

46.3

2.3

1.7

–

4.0

2.2

6.2

7.6

6.2

–

13.8

6.5

20.3

2.1

–

4.2

4.9

9.1

2.4

2.3

–

4.7

4.9

9.6

8.1

7.1

2.2

17.4

3.5

20.9

30.6

29.4

3.8

63.8

12.0

75.8

8.2

8.4

0.2

16.8

2.3

24.4

23.6

23.0

71.0

29.9

19.1

100.9

108.1

25.3

28.3

0.7

54.3

9.1

63.4

92.1

98.0

78.5

268.6

100.4

369.0

66.8

69.8

42.1

178.7

35.4

214.1

Germany

United Kingdom1

Netherlands/
Belgium

Other2

2020

2019

2020

2019

2020

2019

2020

2019

2020

14.5

7.9

14.6

37.0

13.6

50.6

40.7

25.2

45.3

111.2

44.5

155.7

15.1

8.6

36.3

60.0

4.8

64.8

27.3

18.2

37.5

83.0

11.7

94.7

16.5

18.3

2.7

2.3

21.5

11.3

32.8

49.1

10.3

6.8

66.2

27.7

93.9

3.8

2.5

24.6

13.2

37.8

39.5

10.1

2.5

52.1

13.2

65.3

5.4

7.6

–

13.0

9.1

22.1

21.6

26.6

–

48.2

25.8

74.0

9.4

5.2

–

14.6

24.1

38.7

9.7

5.9

–

15.6

24.1

39.7

10.6

6.2

0.5

17.3

1.0

18.3

29.6

21.2

1.4

52.2

5.8

58.0

Total

2019

52.0

24.5

39.4

115.9

44.3

9.2

6.9

0.6

16.7

2.2

47.0

24.4

17.4

88.8

35.0

18.9

123.8

160.2

27.7

23.3

1.6

52.6

5.0

57.6

141.0

104.2

83.3

53.5

277.8

103.8

381.6

57.5

41.6

203.3

54.0

257.3

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

numbers in Romania were the principal reasons for the decline
in power sales to I&C customers. Power sales to I&C customers
in Sweden were higher thanks to new sales contracts. Power
sales to sales partners increased significantly as well, mainly
because of a new customer relationship at the previous E.ON
sales business in Hungary. Power sales to the wholesale market
rose, primarily because of an increase in reselling in the Czech
Republic and Italy. This was partially offset by a decline in whole-
sale market sales in Sweden.

Other’s gas sales were 0.4 billion kWh higher. The inclusion of
innogy operations in Hungary and Poland had a positive impact,
whereas gas sales in nearly all other previous E.ON regions
declined. Gas sales to residential and SME customers were
slightly above the prior-year level. Slightly higher customer
numbers and cold weather in Romania were the primary reasons.
Gas sales to I&C customers decreased, principally because of
a decline in customer numbers in Romania, the sale of the LPG
business in Sweden in the second quarter of 2019, and deterio-
rated market conditions in Italy and the Czech Republic due to
Covid-19. Gas sales to the wholesale market were at the prior-
year level. Higher reselling in Italy was offset by lower sales
volume in Sweden.

Customer Numbers
This segment’s fully consolidated companies had about 40.7 mil-
lion customers at year-end 2020, nearly at the prior- year level
of 41.1 million. The sale of the heating electricity reduced the
number of customers in Germany to 13.9 million (prior year:
14.2 million). Customer numbers in the United Kingdom declined
from 10.9 to 10.3 million amid the ongoing restructuring of the
sales business. There were losses among power as well as gas
customers. By contrast, the customer base grew in the Nether-
lands/Belgium, mainly through new acquisitions; this unit had
4.6 million customers at year-end 2020 (prior year: roughly
4.3 million). The total number of customers in the other countries
where this segment operates rose from 11.8 to 11.9 million,
principally because of the successful acquisition of residential
and SME customers in Romania.

The sales business in Germany increased its power sales to
196.3 billion kWh relative to 2019 owing primarily to the inclu-
sion of innogy operations. On balance, the previous E.ON sales
business in Germany sold more power as well. Power sales to
residential and small and medium enterprise (“SME”) customers
were below the prior-year level due to the sale of the heating
electricity business. Power sales to industrial and commercial
(“I&C”) customers declined year on year, primarily because of
changes in the customer portfolio and the repercussions of
Covid-19. Power sales to the wholesale market were significantly
above the prior-year level, mainly owing to reselling related to
Covid-19 and to the optimization of the procurement portfolio.
Gas sales of 155.7 billion kWh were 61 billion kWh above the
prior-year level, principally because of the inclusion of innogy
operations. The previous E.ON business’s gas sales to residential
and SME customers and to I&C customers decreased owing
to weather factors. Gas sales to I&C customers also declined
because of changes in the customer portfolio. The optimization
of the procurement portfolio led to a significant increase in gas
sales to the wholesale market.

Power sales in the United Kingdom increased to 76.6 billion kWh
in 2020, owing in particular to the inclusion of innogy operations.
The previous E.ON business’s sales to residential and SME
customers and I&C customers declined, mainly because of the
Covid-19 pandemic. Gas sales in the United Kingdom rose sig-
nificantly as well (+44 percent), primarily because of innogy
operations. Covid-19’s repercussions led to lower gas sales at
the previous E.ON U.K. business. In addition, warmer weather
in 2020 had an adverse impact on gas sales to residential and
SME customers.

The Netherlands/Belgium unit, which consists exclusively
of originally innogy business operations, sold 20.3 billion kWh
of power and 74 billion kWh of gas in 2020 (prior year: 9.6 bil-
lion kWh and 39.7 billion kWh, respectively).

Power sales at the Other unit rose by 12.4 billion kWh, primarily
owing to the inclusion of innogy operations in Hungary and
Poland. Power sales in the other previous E.ON regions declined.
Power sales to residential and SME customers were below the
prior-year level, particularly in Italy. The impact of Covid-19 in
the Czech Republic, Hungary, and Italy along with lower customer

Business Report

Customer Solutions

€ in millions

Fourth quarter

Sales1

Adjusted EBITDA2

Adjusted EBIT2

Full year

Sales1

Adjusted EBITDA2

Adjusted EBIT2

Germany

United Kingdom

Netherlands/
Belgium

2020

2019

2020

2019

2020

2019

2020

Other

2019

2020

Total

2019

6,669

7,033

3,917

4,299

154

116

436

377

-96

-127

-113

-162

940

933

2,470

2,580

13,996

14,845

114

223

469

290

22,550

12,906

13,993

9,645

2,959

991

8,840

8,252

48,342

31,794

546

412

427

308

-129

-106

152

307

276

111

1,006

454

789

350

1Adjustment of prior-year figures in the context of “failed-own-use”-accounting with no impact on earnings.
2Includes the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
accordingly.

Sales and Adjusted EBIT
Customer Solutions’ sales of €48.3 billion in 2020 were about
52 percent more than in the prior year. Adjusted EBIT rose by
€104 million.

The increase in sales in Germany is primarily attributable to the
inclusion of innogy operations and to higher sales volume on the
wholesale market and the passthrough of cost components at
the previous E.ON business. The sale of the heating electricity
business in Germany had an adverse impact. Adjusted EBIT was
significantly higher due to the inclusion of innogy operations.
The decline in the previous E.ON business’s adjusted EBIT was
mainly caused by Covid-19 and weather factors.

Sales in the United Kingdom were likewise significantly above
the prior-year level due to the inclusion of innogy operations.
Sales declined at the previous E.ON business, primarily owing to
weather factors and lower consumption resulting from Covid-19.
Adjusted EBIT was significantly lower than in the prior year.
This is attributable to the aforementioned decline in sales at the
previous E.ON business and the inclusion of innogy operations.
By contrast, cost savings had a positive impact.

Sales and adjusted EBIT in the Netherlands/Belgium were
€3 billion and €80 million, respectively (prior year: €1 billion
and €37 million, respectively). The year-on-year increase is
principally attributable to the inclusion of this unit for the first
time for the entire year.

Other’s sales rose by €588 million, principally because of the
inclusion of innogy operations. By contrast, sales in the previous
E.ON regions declined. Lower prices in Italy and Hungary were
the primary reasons. Adjusted EBIT decreased by €20 million
to €91 million, mainly because of effects resulting from the
Covid-19 pandemic in the Czech Republic and Hungary as well as
the inclusion of innogy’s business with new customer solutions.
This was partially offset by items that included the contribution
from innogy operations in Poland.

Non-Core Business
Fully Consolidated and Attributable Generating Capacity
As in the prior-year, PreussenElektra’s fully consolidated and
attributable generating capacity at year-end 2020 totaled
3,828 MW and 3,319 MW, respectively.

PreussenElektra’s Power Generation
Power procured (owned generation and purchases) in the 2020
financial year was 2.8 billion kWh below the prior-year level.
The year-on-year decline is primarily attributable to the transfer
of minority stakes in Gundremmingen and Emsland nuclear
power stations to RWE.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

PreussenElektra

2020

2019

7.4

0.4
–
0.4

7.8

–

7.8

28.4

1.4
–
1.4

29.8

-0.1

29.7

7.7

0.2
–
0.2

7.9

–

7.9

30.1

2.5
0.9
1.6

32.6

-0.1

32.5

Power Generation

Billion kWh

Fourth quarter

Owned generation

Purchases

Jointly owned power plants
Third parties

Total

Station use, line loss, etc.

Power sales

Full year

Owned generation

Purchases

Jointly owned power plants
Third parties

Total

Station use, line loss, etc.

Power sales

Sales and Adjusted EBIT
Sales at Non-Core Business of €1,388 million were €214 million
above the prior-year figure. Adjusted EBIT increased by
€47 million to €413 million.

PreussenElektra’s sales rose year on year, mainly because of
higher sales prices. The absence of sales from Gundremmingen
and Emsland was a countervailing factor.

Adjusted EBIT was significantly above the prior-year level.
Higher sales prices were the principal factor in the significant
increase in PreussenElektra’s adjusted EBIT. They were partially
offset by the absence of earnings from stakes in nuclear power
stations that had been transferred and by higher expenditures
for residual power output rights. By contrast, equity earnings on
E.ON’s stake in Enerjisa Üretim declined significantly. Operating
improvements were more than offset by currency-translation
effects resulting from the weakening of the Turkish lira and by
impairment charges on certain legacy projects.

Non-Core Business

€ in millions

Fourth quarter

Sales

Adjusted EBITDA

Adjusted EBIT

Full year

Sales

Adjusted EBITDA

Adjusted EBIT

PreussenElektra

Generation Turkey

2020

2019

2020

2019

2020

360

253

112

1,388

895

383

308

120

1,174

543

292

–

360

256

115

1,388

925

413

Total

2019

308

124

1,174

617

366

Business Report

E.ON SE’s Earnings, Financial, and Asset
Situation

E.ON SE prepares its Financial Statements in accordance with
the German Commercial Code, the SE Ordinance (in conjunction
with the German Stock Corporation Act), and the Electricity and
Gas Supply Act (Energy Industry Act).

Balance Sheet of E.ON SE (Summary)

December 31

2020

2019

€ in millions

Intangible assets

Property, plant, and equipment

Financial assets

Non-current assets

Receivables from affiliated companies

Other receivables and assets

Liquid funds

Current assets

Accrued expenses

Asset surplus after offsetting of benefit
obligations

Total assets

Equity

Provisions

Bonds

Liabilities to affiliated companies

Other liabilities

Deferred income

–

45,067

45,077

5,934

1,522

1,460

8,916

45,688

45,749

10,798

648

2,646

14,092

59,911

10,643

1,236

11,621

35,683

467

261

The change in financial assets is mainly attributable to an
increase in loans to affiliated companies. The increase in receiv-
ables from affiliated companies and liabilities to affiliated
companies resulted from the assumption of innogy SE’s cash
and cash equivalents accounts.

The change in equity mainly reflects the fact that net income
was higher in 2020 than in the prior year. The decline in other
liabilities resulted from the transfer of innogy SE’s renewables
business, its gas-storage business, and its stake in Austrian
energy utility KELAG Kärntner Elektrizitäts- Aktiengesellschaft to
RWE in 2020, which fulfilled the obligation to RWE disclosed
in the prior year. Deferred income includes premiums from the
transfer of non-current innogy SE bonds to E.ON SE.

The issuance of bonds with a total nominal value of €5,000 mil-
lion and the €1,186 million increase in liquid funds were the
main items affecting the Company’s financial situation.

Information on treasury shares can be found in Note 20 to the
Consolidated Financial Statements.

Income Statement of E.ON SE (Summary)

54,031

€ in millions

9,728

1,061

6,000

31,040

6,195

Income from equity interests

Interest income/loss

Other expenditures and income

Taxes

Net income

Profit carryforward from the prior year

2020

2,405

-624

309

2,114

–

2019

1,620

-127

-763

789

121

300

Total equity and liabilities

59,911

54,031

Net income transferred to retained earnings

As in the prior year, E.ON’s earnings, financial, and asset situa-
tion in the 2020 financial year was influenced primarily by the
agreement reached between E.ON and RWE on March 12, 2018,
to transfer business operations and the integration of innogy.

Net income available for distribution

2,124

1,210

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

The complete Financial Statements of E.ON SE, with an unqual-
ified opinion issued by the auditor, PricewaterhouseCoopers
GmbH, Wirtschaftsprüfungsgesellschaft, Düsseldorf, will be
announced in the Bundesanzeiger. The Financial Statements of
E.ON SE are available on the internet at www.eon.com.

Other Financial and Non-financial Performance
Indicators

ROCE
ROCE is a pretax total return on capital and is defined as the
ratio of adjusted EBIT to annual average capital employed.

Annual average capital employed represents the interest-bearing
capital invested in E.ON’s operating business. It is calculated
by subtracting non-interest-bearing available capital from non-
current and current operating assets. Depreciable non-current
assets are included at their book value. Goodwill from acquisitions
is included at acquisition cost, as long as this reflects its fair
value. In order to better depict intraperiod fluctuations in average
capital employed, annual average capital employed is calculated
as the arithmetic average of the amounts at the beginning of the
year and the end of the year.

Significant changes to E.ON’s portfolio during the course of the
year were factored into average capital employed. Consequently,
the innogy Group’s assets and debt relevant for capital employed
were included effective the end of September 2019. The com-
ponents of capital employed attributable to the discontinued
operations at Renewables transferred to RWE were included
until the end of September 2019 (footnote 4 of the ROCE table
below contains more information).

Annual average capital employed does not include the marking
to market of other share investments and derivatives. The
purpose of excluding these items is to provide us with a more
consistent picture of E.ON’s ROCE performance.

E.ON SE is the parent company of the E.ON Group. As such, its
earnings situation is affected by income from equity interests.
The increase in income from equity interests reflects, in partic-
ular, profit transfers of €3,384 million from E.ON Beteiligungen
GmbH and €267 million from E.ON Finanzanlagen GmbH. The
profit transfer from E.ON Beteiligungen GmbH includes the
gain of €2,821 million from the merger of innogy SE into E.ON
Verwaltungs SE (which now does business as innogy SE). How-
ever, this gain was almost entirely offset by impairment charges
on equity interests recorded at innogy SE. Income from equity
interests was adversely affected primarily by expenditures from
loss transfers of €1,282 million. These were mainly attributable
to a subsidiary that recorded significant impairment charges on
equity interests in affiliated companies.

The improvement in net interest income mainly reflects tax-
related interest income. The negative balance of other income
and expenses in 2020 resulted from €209 million in expenses
for purchased third-party services, €153 million in personnel-
related expenses, €131 million in consulting services and
€128 million in net expenses from currency hedging. The final
settlement of the overall transaction with RWE resulted in a total
expense of €97 million at E.ON SE after internal passthrough.

In the year under review, on balance the Company’s income taxes
yielded tax income of €309 million, which encompasses the
year under review as well as prior years. Applying the minimum
tax rate resulted in corporate taxes and solidarity surcharges
totaling about €2 million in 2020. The Company did not record
expenditures for trade taxes. For previous years the Company
recorded tax income of €311 million.

At the Annual Shareholders Meeting in 2021, the Management
Board will propose that net income available for distribution
be used to pay a dividend of €0.47 per ordinary share and the
remaining amount of €899 million to be brought forward as
retained earnings. Management’s proposal for the use of net
income available for distribution is based on the number of ordi-
nary shares on March 15, 2021, the date the Financial State-
ments of E.ON SE were prepared.

The E.ON SE Management Board has decided on a dividend
policy that foresees annual growth in the dividend per share of
up to 5 percent through the dividend for the 2023 financial
year. E.ON will aim for an annual increase in dividend per share
after this as well.

Business Report

ROCE Performance in 2020
ROCE decreased from 8.3 percent in 2019, to 6.2 percent in
2020 owing mainly to the increase in average capital employed.
The primary reasons are the inclusion of the innogy Group’s
assets for the first time for the entire year (including goodwill
from the purchase-price allocation) and the innogy Group’s debt.

innogy operations are fully included in capital employed, whereas
the synergies associated with the transaction will only emerge
over time. E.ON therefore assumes that ROCE will increase in
the future.

The table below shows the E.ON Group’s ROCE and its derivation.

ROCE

€ in millions

Property, plant, and equipment, right-of-use assets, intangible assets, and goodwill1

Shares in affiliated and associated companies and other share investments

Non-current assets

Inventories

Other non-interest-bearing assets/liabilities, including deferred income and deferred tax assets2

Current assets

Non-interest-bearing provisions3

Capital employed in continuing and discontinued operations4

Annual average capital employed in continuing and discontinued operations4

Adjusted EBIT5

ROCE6

2020

61,148

6,266

67,414

1,131

-5,818

-4,687

-3,408

59,319

60,870

3,776

6.2%

20194

59,950

6,963

66,913

1,252

-2,187

935

-3,557

62,421

38,678

3,220

8.3%

1Depreciable non-current assets are included at their book value. Goodwill from acquisitions is included at acquisition cost, as long as this reflects its fair value.
2Examples of other non-interest-bearing assets/liabilities include income tax receivables and liabilities.
3Non-interest-bearing provisions include current provisions, such as those relating to sales and procurement market obligations. In particular, they do not include provisions for pensions or
nuclear-waste management.
4As a rule, weighted capital employed is the arithmetical average of capital employed at the beginning and the end of the year. To adequately portray the innogy takeover in September 2019, capital
employed in 2019 was weighted on the basis of a number of month-end figures. This calculation reflected the following parameters:
a) Capital employed of continuing operations at December 31, 2018: €29.4 billion (includes the discontinued operations at Renewables).
b) Capital employed of continuing operations at June 30, 2019, projected to September 30, 2019, on the basis of net investments and depreciation charges: €32.4 billion (includes the discontinued

operations at Renewables).

c) Capital employed of continuing operations at October 1, 2019: €61.7 billion (includes innogy and excludes the discontinued operations at Renewables).
d) Capital employed of continuing operations at December 31, 2019: €62.4 billion (includes innogy and excludes the businesses transferred to RWE). Due to retroactive changes in innogy’s

purchase-price allocation, this value was adjusted retrospectively.
75 percent of the average of parameters a) and b) is factored into average capital employed, as is 25 percent of the mean of parameters c) and d).

5Adjusted for non-operating effects; for purposes of internal management control, adjusted EBIT includes the adjusted EBIT from the operations at Renewables classified as discontinued operations
and deconsolidated in September 2019.
6ROCE = adjusted EBIT divided by average capital employed.

Employees
Integration of innogy
Following the legal integration of the innogy Group, a major
focus in 2020 was on the transfer of innogy employees to their
respective E.ON target companies. These transfers were imple-
mented on schedule at the predefined transition dates and were
thus almost completed in 2020.

To implement these transfers, E.ON concluded numerous
agreements with trade unions and employee representatives at
the collective-bargaining and company level. The negotiations
were conducted under challenging conditions owing to the
Covid-19 pandemic. However, E.ON’s proven social partnership

made it possible to hold constructive discussions and to find
suitable solutions that address the interests of employees who
will be affected by the upcoming change process. The afore-
mentioned cooperation between the Company and employee
representatives also made it possible to find socially responsible
solutions for the redundancies resulting from the innogy inte-
gration. Numerous employees made use of the jointly defined
mechanisms for voluntarily departing the Group.

E.ON has a long tradition of maintaining a constructive, mutually
trusting partnership with employee representatives. This rela-
tionship lays the foundation for a successful social partnership,
particularly in a continually changing business environment.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

In 2008 E.ON publicly affirmed its commitment to fairness and
respect by signing the German Diversity Charter, which now has
about 3,500 signatories. E.ON therefore belongs to a large net-
work of companies committed to diversity, tolerance, fairness,
and respect. E.ON assumed innogy’s membership in the German
Diversity Charter and has thus been an active member since 2020.

E.ON’s approach to promoting diversity is holistic, encompassing
all dimensions of diversity. In 2020 the Company again imple-
mented numerous measures to promote diversity at E.ON.
Fostering female managers’ career development remains an
important dimension. E.ON set an ambitious target to increase
the proportion of women in management positions. Over the
long term, E.ON wants the proportion of women in management
positions Group-wide to be roughly the same as the proportion
of women in its overall workforce. At year-end 2020, 32 percent
of E.ON employees were women. E.ON will increase the propor-
tion of women in its talent pool accordingly.

Support mechanisms that address employees’ differing needs
have for years been firmly established at the E.ON Group.
Examples include mentorship programs for next-generation
managers, coaching, training to prevent unconscious bias,
support for childcare, and flexible work schedules.

Also, E.ON is continuing innogy’s membership in Initiative
Women into Leadership (“IWiL”), a non-profit initiative based
in Germany. innogy was one of IWiL’s founding members. The
initiative’s purpose is to recruit outstanding personalities from
various social spheres—including business, culture, the media,
and science—to serve as mentors to support highly qualified and
successful women on their way to the top.

More information about E.ON’s compliance with Germany’s Law
for the Equal Participation of Women and Men in Leadership
Positions in the Private Sector and the Public Sector can be found
in the Corporate Governance Declaration on pages 70 to 79.

People Strategy
In 2020 E.ON also focused on the development of its new Group
People Strategy (“GPS”), which will serve as the compass to
guide the Company’s ongoing transformation and promote its
lasting success amid a rapidly changing world. The development
process reflected, in particular, the innogy integration, which
necessitated a review and modification of E.ON and innogy’s
previous people strategies. The new GPS sets four people prior-
ities for the entire Group: Future of Work, Diversity and Inclusion,
Sustainability, and Leadership. These priorities will guide E.ON’s
human resources activities for the next three years. The new GPS
will be brought to life by Group-wide and unit-level people activ-
ities, especially by means of existing Group-wide initiatives, such
as Grow@E.ON, a competency model for the professional and
personal development of the Company’s employees and man-
agers. GPS’s implementation is flexible and modular to accom-
modate the differences between business units.

Diversity
Going forward, diversity will remain a key element of E.ON’s com-
petitiveness. Diversity and a mutually appreciative corporate
culture promote creativity and innovation. Diversity is also a core
E.ON value. E.ON brings together a diverse team of people who
differ by nationality, age, gender, religion, sexual orientation and
identity, and/or ethnic origin and social background. E.ON specifi-
cally fosters and utilizes diversity and creates an inclusive work
environment. This is an important factor in business success:
only a company that embraces diversity and knows how to ben-
efit from it will be able to remain an attractive employer.

In addition, a diverse workforce enables E.ON to do an even
better job of meeting customers’ specific needs and requirements.
As far back as 2006 E.ON issued a Group Policy on Equal Oppor-
tunity and Diversity. In late 2016 E.ON along with the SE Works
Council of E.ON SE renewed this commitment to diversity. In
April 2018 the E.ON Management Board, the German Group
Works Council, and the Group representation for severely disabled
persons signed the Shared Understanding of Implementing
Inclusion at E.ON, creating an important foundation for integrating
people with disabilities into the organization.

Business Report

Workforce Figures
At year-end 2020 the E.ON Group had 78,126 employees world-
wide, almost unchanged (-1 percent) from year-end 2019.
E.ON also had 2,494 apprentices and 231 board members and
managing directors worldwide.

Employees1

Headcount

Energy Networks

Customer Solutions

Corporate Functions/Other

Core business

Non-Core Business

E.ON Group

December 31

2020

40,764

31,463

4,029

2019

38,814

33,038

5,218

76,256

77,070

1,870

1,878

78,126

78,948

+/- %

-5

-23

-1

–

-1

1Does not include board members, managing directors, or apprentices.

The increase in Energy Networks’ headcount is chiefly attributable
to the acquisition of VSEH in Slovakia. The filling of vacancies to
expand the business and to meet regulatory requirements (in
Germany, predominantly with apprentices who had successfully

Employees by Country1

completed their training), the reintegration of certain IT functions,
and other structural effects also contributed to the increase.
The transfer of employees to Customer Solutions was a counter-
vailing factor.

The decline in the number of employees at Customer Solutions
mainly reflects restructuring projects, principally in the United
Kingdom. This was partially offset by acquisitions in the Nether-
lands and elsewhere as well as the transfer of employees from
Corporate Functions/Other and Energy Networks.

The number of employees at Corporate Functions/Other declined
significantly owing primarily to structural effects, such as the
transfer of employees to other segments, in part because of the
separation of innogy SE into subcompanies and their transfer
to the operating segments, as well as the restructuring of IT
functions. The sale of a company in Poland was another factor.

Geographic Profile
At year-end, 40,328 employees, or 52 percent of all employees,
were working outside Germany, almost unchanged from year-
end 2019 (51 percent).

Germany

United Kingdom

Hungary

Romania

Netherlands

Czech Republic

Sweden

Poland

Other2

Total

1Figures do not include board members, managing directors, or apprentices.
2Includes Slovakia, Italy, Philippines, USA, Denmark, and other countries.
3Full-time equivalent.

Dec. 31,
2020

37,798

12,216

7,943

6,710

3,288

2,952

2,355

1,816

3,048

Headcount

Dec. 31,
2019

38,336

14,368

8,129

6,579

2,888

2,930

2,286

2,018

1,414

Dec. 31,
2020

36,090

11,682

7,918

6,559

2,840

2,937

2,331

1,802

3,009

FTE3

Dec. 31,
2019

36,510

13,737

8,104

6,410

2,628

2,913

2,263

2,003

1,385

78,126

78,948

75,168

75,953

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Gender and Age Profile, Part-time Staff
At the end of 2020, 32 percent of the Company’s workforce
were women, roughly at the prior-year level (33 percent).

Proportion of Female Employees

Percentages

Energy Networks

Customer Solutions

Corporate Functions/Other

Core business

Non-Core Business

E.ON Group

2020

2019

At year-end 2020 the average member of the E.ON Group
workforce was about 42 years old and had worked for the
Company for 14 years.

Employees by Age

Percentages at year-end

30 and younger

31 to 50

51 and older

2020

2019

A total of 9,530 employees, or 12 percent of the E.ON Group
workforce, were on a part-time schedule. Of these, 6,439, or
68 percent, were women.

The turnover rate resulting from voluntary terminations averaged
3.5 percent across the organization, slightly lower than in the
prior year (4.6 percent).

Apprenticeships
E.ON continues to place great emphasis on vocational training
for young people. The E.ON Group had 2,395 apprentices and
work-study students in Germany at year-end 2020. As in the
prior year, this represented 6 percent of E.ON’s total workforce
in Germany.

Apprentices in Germany

At year-end

Energy Networks

Customer Solutions

Corporate Functions/Other

Core business

Non-Core Business

E.ON Group

E.ON provides vocational training in 28 careers and also offers
training and practically oriented work-study programs in 35 degree
areas in order to meet its own needs for skilled workers and to
take targeted action to address the consequences of demographic
change. In addition, E.ON offers young people the opportunity
to receive training to qualify for an apprenticeship.

Headcount

Percentage of workforce

2020

2,098

199

2,356

2,395

2019

2,149

206

2,416

2,456

2020

2019

7.6

0.8

5.4

6.2

2.0

6.0

8.0

0.8

4.4

6.2

2.1

6.0

Forecast Report

Business Environment

Macroeconomic Situation
Despite the availability of vaccines and countries’ various vacci-
nation strategies, the Covid-19 pandemic seems unlikely to end
in the near future. For the time being, therefore, the current
phase of economic weakness can be expected to continue. This
applies to the energy industry as well. For example, electricity
consumption declined in 2020. Compared with other industries,
however, the economic repercussions in the energy sector were
marginal.

The pandemic’s barely predictable course makes precise eco-
nomic forecasts almost impossible. In addition, forecasts must
be assessed in temporal relation to the pandemic’s course.
For example, in September 2020 (when infection rates were
relatively low) the ifo institute predicted that Germany would
achieve GDP growth of 5.1 percent in 2021. In December, amid
a renewed lockdown, it revised its growth forecast for 2021 to
4.2 percent.

The German Council of Economic Experts’ annual report,
published in December 2020, forecasts tepid economic growth
of around 0.5 percent in the first months of 2021. For the
remainder of the year, it expects Germany’s economy to grow
by 3.7 percent. Germany’s GDP for 2021 would thus be just
below the pre-crisis level of 2019 (GDP 2019: €3.44 trillion).

The European Commission’s autumn economic forecast
published in November 2020 predicted that the EU’s GDP will
shrink by 7.4 percent in 2020. In February 2021 the Commission
forecast euro zone GDP growth of 3.8 percent for both 2021
and 2022. Furthermore, the EU as a whole is expected to grow by
3.7 percent in 2021 and 3.9 percent in 2022. The EU economy
is expected to reach its pre-crisis level from 2019 (EU28 GDP:
€13.94 trillion) by mid-2022, resulting mainly from increased
growth in the second half of 2021 and in 2022. The International
Monetary Fund expects global GDP growth of 5.5 percent in
2021.

General Statement of E.ON’s Future
Development

The integration of innogy successfully completed the E.ON
Group’s restructuring. Nevertheless, the next few years will
reflect the new E.ON’s ongoing efforts to build on this foundation
to propel Europe’s energy transition in the digital age. From
April 2021 onward, Leonhard Birnbaum will become E.ON’s new
CEO and oversee the continuation of its strategy. The smooth
transition at the top of the Company sets the stage for a seam-
less implementation of operating tasks. The focus will be on
expanding E.ON’s business segments in order to generate addi-
tional growth. Europe’s economic stimulus packages give E.ON
additional support. Around €60 billion of funding is earmarked
for climate projects across E.ON’s markets. These projects will
promote decarbonization and thus the achievement of the EU’s
climate targets.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Anticipated Earnings Situation

Forecast Earnings Performance
Despite the ongoing pandemic, E.ON expects the Group’s 2021
adjusted EBIT to be between €3.8 and €4 billion and its 2021
adjusted net income to be between €1.7 and €1.9 billion, or
€0.65 to €0.73 per share (based on 2,607 million shares out-
standing). In addition, the plan calls for the E.ON Group to
achieve a cash-conversion rate of roughly 100 percent on aver-
age for the 2021 to 2023 financial years (without factoring in
the expenditures for the decommissioning of nuclear power
stations). This metric will benefit significantly over the planning
period from the Company’s initiative to further optimize work-
ing capital.

Forecast by segment:

Adjusted EBIT1

€ in billions

Energy Networks

Customer Solutions

Corporate Functions/Other

Non-Core Business

E.ON Group

1Adjusted for non-operating effects.

2021 (forecast)

2.9 to 3.1

0.8 to 1.0

about -0.3

0.2 to 0.4

3.8 to 4.0

Another focus following the innogy takeover will be on con-
tinuing to leverage synergies of around €740 million annually
from the end of 2022 onward. E.ON will also further articulate
its sustainability strategy. Combining all of E.ON’s U.K. sales
businesses in a new company, E.ONNext,, will continue in 2021
as well. The new company will have state-of-the-art processes
and an agile IT platform. The transfer of energy customers in
Germany to a new digital platform will continue throughout 2021.
This segment remains committed to its IT and digital agenda.
This agenda’s special significance was underscored by the
appointment of Victoria Ossadnik to the E.ON Management Board
effective April 1, 2021. She will be responsible for the Group’s
digitalization. The focus will be on developing advanced, power-
ful support systems and continually safeguarding of E.ON’s IT
systems against cyberattacks. Energy Networks will make
significant IT investments in 2021 to meet customers’ different
demands and to continually make E.ON’s networks—the back-
bone of the energy transition across Europe—more advanced
and smarter.

E.ON needs to achieve these objectives and implement these
measures in a challenging economic environment. Low interest
rates and keen competition for networks and customers are
part of E.ON’s daily business. Uncertainty remains regarding the
future course of the Covid-19 pandemic and its economic impact.
Although the energy industry and E.ON have proven resilient,
there may be additional financial consequences depending on
how the pandemic progresses. For example, the demand for
electricity and gas could affect sales volume and prices, while
there could be implications from customers and enterprise
partners’ reduced ability to pay.

Forecast Report

E.ON expects Energy Networks’ earnings to be temporarily lower
in 2021, mainly because of temporarily higher expenditures at
the networks in Germany. Declining earnings in Hungary due
to planned business disposals will continue to have an adverse
impact. Also, new regulatory periods start in the Czech Republic,
Hungary, and Turkey. The low interest-rate environment affects
regulatory rates of return, but this will largely be offset by changes
in the respective regulatory schemes and good operating results.
The business in Slovakia acquired from RWE at year-end 2020
will make a positive, full-year contribution. In addition, the net-
work business will continue to benefit from additional investments
in its regulated asset base.

Customer Solutions’ earnings will be significantly above the
prior-year level. The Company expects a positive performance in
all of this segment’s markets, especially through the leveraging
of synergies. In particular, the ongoing restructuring in the
United Kingdom will serve to increase earnings. In addition, E.ON
assumes that the earnings decline in 2020 as a result of the
Covid-19 pandemic—in particular due to resales and lower sales
volumes, especially to industrial customers—will largely dis-
appear in the 2021 financial year. The underlying operating
business will perform according to plan as well. The anticipated
improvement in customer numbers and margins in the cus-
tomer solutions business in Germany is particularly noteworthy.

The plan calls for earnings at Corporate Functions/Other to be
above the prior-year figure. The implementation of planned
synergies will have a positive impact.

Non-Core Business’s earnings will be below the prior-year level.
Higher costs to procure for residual power output rights and
slightly lower sales prices will reduce earnings.

Anticipated Financial Situation

Planned Funding Measures
In addition to planned investments for 2021 and the dividend
for 2020, in 2021 E.ON will make payments for bonds that
have matured. Over the course of the year, these payments will
be funded with available liquid funds and the issuance of debt.

Dividend
The E.ON SE Management Board decided to continue the current
dividend policy, which foresees annual growth in the dividend
per share of up to 5 percent through the dividend for the 2023
financial year. E.ON will aim for an annual increase in dividend
per share after this as well.

Planned Investments
E.ON plans to make cash-effective investments of about
€4.9 billion in 2021. E.ON will continue its strategy aimed at
delivering sustainable growth. Capital allocation will of course
continue to be selective and disciplined.

Cash-Effective Investments: 2021 Plan

Energy Networks

Customer Solutions

Corporate Functions/Other

Non-Core Business

Total

€ in billions

Percentages

3.3

1.0

0.2

0.4

4.9

100

Energy Networks’ investments will consist in particular of
numerous individual investments to maintain and, above all,
to expand networks, switching equipment, and metering and
control technology in order to continue to ensure the reliable
and uninterrupted transmission and distribution of electricity.

Customer Solutions’ investments will mainly go toward the heat
business and solutions for industrial and commercial customers
in Sweden, Germany, and the United Kingdom. E.ON will also
invest in IT, metering and upgrade projects, and integrated
energy solutions.

Non-Core Business’s investments will include investments to
acquire residual power output rights. Those at Corporate Func-
tions/ Other will encompass investments in Group-wide IT infra-
structure and a planned payment from the innogy acquisition.

Risks and Chances Report

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Risks and Chances Report

Enterprise Risk Management System in the
Narrow Sense

Group
Decision-Making
Bodies

Risk
Committee

E.ON SE
Management
Board

Steer

E.ON SE
Supervisory
Board

Audit and Risk
Committee

Group

Central Enterprise Risk Management

Units and
Departments

Customer
Solutions

Energy
Networks

Non-Core
Business

Corporate
Functions

Local Risk Committees

I
n
t
e
r
n
a
l

A
u
d
i
t

Govern
and
Consolidate

Identify,
Evaluate
and
Manage

Objective

E.ON’s Enterprise Risk Management (“ERM”) provides the
management of all units as well as the E.ON Group with a fair
and realistic view of the risks and chances resulting from their
planned business activities. It provides:

E.ON’s ERM is based on a centralized governance approach
which defines standardized processes and tools covering the
identification, evaluation, countermeasures, monitoring, and
reporting of risks and chances. Overall governance is provided
by Group Risk Management on behalf of the E.ON SE Risk
Committee.

• meaningful information about risks and chances to the busi-
ness, thereby enabling the business to derive individual
risks/chances as well as aggregate risk profiles within the
time horizon of the medium-term plan (three years)

All risks and chances have an accountable member of the Man-
agement Board, have a designated risk owner who remains
operationally responsible for managing that risk/chance, and
are identified in a dedicated bottom-up process.

• transparency on risk exposures in compliance with legal
requirements including KonTraG, BilMoG, and BilReG.

The innogy business operations acquired by E.ON are now fully
integrated into E.ON’s adequate, effective, and audited compre-
hensive framework for managing chances and risks.

Risks and Chances Report

Scope

E.ON’s risk management system in the broader sense has a
total of four components:

• an internal monitoring system
• a management information system
• preventive measures
• the ERM, which is a risk management system in the narrow

sense.

The purpose of the internal monitoring system is to ensure the
proper functioning of business processes. It consists of organi-
zational preventive measures (such as policies and work
instructions) and internal controls and audits (particularly by
Internal Audit).

The E.ON internal management information system identifies
risks early so that steps can be taken to actively address them.
Reporting by the Controlling, Finance, and Accounting depart-
ments as well as Internal Audit reports are of particular impor-
tance in early risk detection.

General Measures to Limit Risks

E.ON takes the following general preventive measures to limit
risks.

Managing Legal and Regulatory Risks
E.ON engages in intensive and constructive dialog with govern-
ment agencies and policymakers in order to manage the risks
resulting from the E.ON Group’s policy, legal, and regulatory
environment. Furthermore, the Company strives to conduct
proper project management so as to identify early and minimize
the risks attending new-build projects.

E.ON attempts to minimize the operational risks of legal
proceedings and ongoing planning processes by managing
them appropriately and by designing appropriate contracts
beforehand.

Managing Operational and IT Risks
To limit operational and IT risks, E.ON continually improves
its network management and the optimal asset dispatch of its
assets. At the same time, E.ON implements operational and
infrastructure improvements that will enhance the reliability of
its generation assets and distribution networks, even under
extraordinarily adverse conditions. In addition, E.ON has factored
the operational and financial effects of environmental risks into
its emergency plan. They are part of a catalog of crisis and sys-
tem-failure scenarios prepared for the Group by the Incident and
Crisis Management team.

E.ON IT systems are maintained and optimized by qualified E.ON
Group experts, outside experts, and a wide range of technologi-
cal security measures. In addition, the E.ON Group has in place
a range of technological and organizational measures to counter
the risk of unauthorized access to data, the misuse of data, and
data loss.

Managing Health, Safety, and Environmental (“HSE”), Human
Resources (“HR”), and Other Risks
The following are among the comprehensive measures E.ON
takes to address such risks (also in conjunction with operational
and IT risks):

• systematic employee training, advanced training, and quali-

fication programs for employees

• further refinement of production procedures, processes,

and technologies

• regular facility and network maintenance and inspection
• company guidelines as well as work and process instructions
• quality management, control, and assurance
• project, environmental, and deterioration management
• crisis-prevention measures and emergency planning.

Should an accident occur despite the measures taken, E.ON has
a reasonable level of insurance coverage.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Note 31 to the Consolidated Financial Statements contains
detailed information about the use of derivative financial instru-
ments and hedging transactions. Note 32 describes the general
principles of E.ON’s risk management and applicable risk metrics
for quantifying risks relating to commodities, credit, liquidity,
interest rates, and currency translation.

Enterprise Risk Management (“ERM”)

E.ON’s ERM, which is the basis for the risks and chances
described in the next section, encompasses:

• systematic risk and chance identification

• risk and chance analysis and evaluation

• management and monitoring of risks and chances by

analyzing and evaluating countermeasures and preventive
systems

• documentation and reporting.

As required by law, E.ON’s ERM’s effectiveness is reviewed
regularly by Corporate Audit. In compliance with the provisions
of Section 91, Paragraph 2, of the German Stock Corporation
Act relating to the establishment of a risk-monitoring and early
warning system, E.ON has a Risk Committee for the E.ON Group
and for each of its business units. The Risk Committee’s mission
is to achieve a comprehensive view of E.ON’s risk exposure at
the Group and unit level and to actively manage risk exposure in
line with E.ON’s risk strategy.

The ERM applies to all fully consolidated E.ON Group companies
and all companies valued at equity whose book value is greater
than €50 million. E.ON takes an inventory of its risks and chances
at each quarterly balance-sheet date.

To promote uniform financial reporting Group-wide, E.ON has
in place a central, standardized system that enables effective
and automated risk reporting. Company data are systematically
collected, transparently processed, and made available for
analysis both centrally and decentrally at the units.

Managing Market Risks
E.ON uses a comprehensive sales-management system and
intensive customer management to manage margin risks.

In order to limit exposure to commodity price risks, E.ON con-
ducts systematic risk management. The key elements of the
Company’s risk management are, in addition to binding Group-
wide policies and a Group-wide reporting system, the use of
quantitative key figures, the limitation of risks, and the strict
separation of functions between departments. Furthermore,
E.ON utilizes derivative financial instruments that are commonly
used in the marketplace. These instruments are transacted with
financial institutions, brokers, power exchanges, and third parties
whose creditworthiness is monitored on an ongoing basis. E.ON
local sales units and the remaining generation operations have
set up local risk management under central governance standards
to monitor these underlying commodity risks and to minimize
them through hedging.

Managing Strategic Risks
E.ON has comprehensive preventive measures in place to
manage potential risks relating to acquisitions and investments.
These measures include, in addition to the relevant company
guidelines and manuals, comprehensive due diligence, legally
binding contracts, a multi-stage approvals process, and share-
holding and project controlling. Comprehensive post-acquisition
projects also contribute to successful integration.

Managing Finance and Treasury Risks
This category encompasses credit, interest-rate, currency, tax,
and asset-management risks and chances. E.ON uses system-
atic risk management to monitor and control its interest-rate
and currency risks and manage these risks using derivative and
non-derivative financial instruments. Here, E.ON SE plays a
central role by aggregating risk positions through intragroup
transactions and hedging these risks in the market. Due to
E.ON SE’s intermediary role, its risk position is largely closed.

In the context of Group-wide credit risk management E.ON
systematically assesses and monitors the creditworthiness
of its business partners on the basis of Group-wide minimum
standards. E.ON manages credit risk by taking appropriate
measures, which include obtaining collateral and setting limits.
The E.ON Group’s Risk Committee is regularly informed about
credit risks. A further component of E.ON’s risk management
is a conservative investment strategy for financial funds and a
broadly diversified portfolio.

Risks and Chances Report

Risks and Chances

Methodology
E.ON’s IT-based system for reporting risks and chances has the
following risk categories:

Risk Category

Legal and regulatory risks

Operational and IT risks

HSE, HR, and other

Market risks

Strategic risks

Finance and treasury risks

Examples

Policy and legal risks and chances, regulatory risks, risks from public consent processes

IT and process risks and chances, risks and chances relating to the operation of generation
assets, networks, and other facilities, new-build risks

Health, safety, and environmental risks and chances

Risks and chances from the development of commodity prices and margins and from changes
in market liquidity

Risks and chances from investments and disposals

Credit, interest-rate, foreign-currency, tax, and asset-management risks and chances

E.ON uses a multistep process to identify, evaluate, simulate,
and classify risks and chances. Risks and chances are generally
reported on the basis of objective evaluations. If this is not
possible, estimates by in-house experts are used. The evaluation
measures a risk/chance’s financial impact on the current earnings
plan while factoring in risk-reducing countermeasures. The
evaluation therefore reflects the net risk.

For quantifiable risks and chances, E.ON then evaluates the
likelihood of occurrence and the potential loss or damage. In
the commodity business, for example, commodity prices can
rise or fall. This type of risk is modeled with a normal distribution.
Modeling is supported by a Group-wide IT-based system.
Extremely unlikely events—those whose likelihood of occurrence
is 5 percent or less—are classified as tail events. Tail events are
not included in the simulation described below.

This statistical distribution makes it possible for E.ON’s internal
risk management system to conduct a Monte Carlo simulation
of these risks. This yields an aggregated risk distribution that is
quantified as the deviation from the Company’s current earnings
plan for adjusted EBIT.

E.ON uses the 5th and 95th percentiles of this aggregated
risk distribution as the worst case and best case, respectively.
Statistically, this means that with this risk distribution there is
a 90-percent likelihood that the deviation from the Company’s
current earnings plan for adjusted EBIT will remain within these
extremes.

The last step is to assign, in accordance with the 5th and
95th percentiles, the aggregated risk distribution to impact
classes—low, moderate, medium, major, and high—according to
their quantitative impact on planned adjusted EBIT. The impact
classes are shown in the table below.

Impact Classes

Low

Moderate

Medium

Major

High

x < €10 million

€10 million ≤ x < €50 million

€50 million ≤ x < €200 million

€200 million ≤ x < €1 billion

x ≥ €1 billion

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

General Risk Situation
The table below shows the average annual aggregated risk posi-
tion (aggregated risk distribution) across the time horizon of the
medium-term plan for all quantifiable risks and chances (excluding
tail events) for each risk category based on E.ON’s most import-
ant financial key performance indicator, adjusted EBIT.

Risk Category

Risk category

Legal and regulatory risks

Operational and IT risks

HSE, HR, and other

Market risks

Strategic risks

Finance and treasury risks

Worst case (5th percentile)

Best case (95th percentile)

Major

Medium

Low

Major

Medium

Major

Low

Medium

Moderate

Medium

The E.ON Group has major risk positions in the following cate-
gories: legal and regulatory risks as well as market risks. As a
result, the aggregate risk position of E.ON SE as a Group is major.
In other words, the E.ON Group’s average annual adjusted EBIT
risk ought not to exceed -€200 million to -€1 billion in 95 percent
of all cases.

The E.ON Group’s overall risk situation at the end of 2020 was
influenced primarily by the ongoing Covid-19 pandemic. The
main Covid-19 risk factors in the sales business are volume and
price effects as well as credit losses. In addition, the customer
solutions business could encounter delays in planned projects,
while residential and business customers’ demand for various
products is declining amid economic uncertainty.

The network business could also experience a decline in sales
volume and credit losses which result in lower earnings. The
difference with the network business is that volume-driven
declines in sales will largely be recovered in subsequent years.
In addition, PreussenElektra’s business could be adversely
affected by the introduction of a ban or a limitation of work
contracts due to Covid-19.

Risks and Chances by Segment
PreussenElektra
PreussenElektra’s business is substantially influenced by regu-
lation. In general, regulation can result in risks for its remaining
operating and dismantling activities. One example is the
Fukushima nuclear accident. Policy measures taken in response
to such events could have a direct impact on the further opera-
tion of a nuclear power plant (“NPP”) or trigger liabilities and
significant payment obligations stemming from the solidarity
obligation agreed on among German NPP operators. Further-
more, new regulatory requirements, such as additional manda-
tory safety measures or delays in dismantling, could lead to
production outages and higher costs. In addition, there may
be lawsuits that fundamentally challenge the operation of
NPPs. Regulation can also require an increase in provisions for
dismantling. These factors could pose major risks for E.ON.

On December 6, 2016, Germany’s Federal Constitutional Court
in Karlsruhe ruled that the thirteenth amended version of the
Atomic Energy Act (“the Act”) is fundamentally constitutional.
The Act’s only unconstitutional elements are that certain NPP

Risks and Chances Report

Legal and Regulatory Risks
The political, legal, and regulatory environment in which the
E.ON Group does business is a source of risks, such as the
continued uncertainty that Brexit poses for the collaboration
between certain E.ON business units. This could confront E.ON
with direct and indirect consequences that could lead to possible
financial disadvantages. New risks—but also opportunities—arise
from energy-policy decisions at the European and national level.
Foremost among them are the European Commission’s Green
Deal, which was presented in 2019 and revised and expanded
in late 2020, and the German federal government’s decision
to phase out conventional, hard-coal- and lignite-fired power
generation (the Coal Phaseout Law of August 2020). The achieve-
ment of these objectives will require legal and regulatory
implementation measures that themselves would pose new
risks for certain E.ON Group business operations.

In the wake of the economic and financial crisis in many EU mem-
ber states, interventionist policies and regulations have been
adopted in recent years, such as additional taxes and additional
reporting requirements (for example, EMIR, MAR, REMIT,
MiFID2). The relevant agencies monitor compliance with these
regulations closely. This leads to attendant risks for E.ON’s
operations. The same applies to price moratoriums, regulated
price reductions, and changes to support schemes for renew-
ables, which could pose risks to, as well as create opportunities
for, E.ON’s operations in the respective countries.

There may also be final risks from obligations arising from
regulatory requirements following the Uniper split. This risk
category also includes major risks arising from possible litigation,
fines, and claims, governance and compliance issues, as well
as risks and chances related to contracts and permits. Changes
to this environment can lead to considerable uncertainty with
regard to planning and, under certain circumstances, to impair-
ment charges but can also create chances. This results in a
major risk and chance position.

operators will be unable to produce their electricity allotment
from 2002 and that it contains no mechanism for compensating
operators for investments to extend NPP operating lifetimes.
Lawmakers established a compensation mechanism in the six-
teenth amended version of the Act. This version did not become
law owing to a ruling by the Federal Constitutional Court on
September 29, 2020. Lawmakers thus remain obliged to intro-
duce a new mechanism. In addition, NPPs need to acquire
residual power output rights in order to operate until their closure
dates prescribed by law. In accordance with the agreement
published at the beginning of March 2021 between the respon-
sible federal ministries and the four NPP operators, it is also
provided in particular that the residual power output rights
corresponding to the ownership stake in the joint power plants
with Vattenfall are to be transferred free of charge to Preussen-
Elektra and can be used for generation in the Group’s own
power plants. The effectiveness of this agreement is still sub-
ject to legal implementation. The additional quantities required
to operate the NPPs until the final date stipulated by the Act
have to be purchased. These matters could yield major chances
and major risks.

Customer Solutions
The E.ON Group’s operations subject it to certain risks relating to
legal proceedings, ongoing planning processes, and regulatory
changes. But these risks also relate, in particular, to legal actions
and proceedings concerning contract and price adjustments to
reflect market dislocations or (including as a consequence of the
energy transition) an altered business climate in the power and
gas business, alleged price-rigging, and anticompetitive practices.
This could pose a major risk.

Energy Networks
The operation of energy networks is subject to a large degree
of government regulation. New laws and regulatory periods
cause uncertainty for this business. In addition, matters related
to Germany’s Renewable Energy Sources Act, such as issues
regarding solar energy, can cause temporary fluctuations in cash
flow and adjusted EBIT. This could create major chances as well
as pose a major risk. The rapid growth of renewables is also
creating new risks for the network business. For example, insol-
vencies among renewables operators or feed-in tariffs unduly
paid by grid operators lead to court or regulatory proceedings.

Risks and Chances by Category
E.ON’s major risks and chances by risk category are described
below. Also described are major risks and chances stemming
from tail events as well as qualitative risks that would impact
adjusted EBIT by more than €200 million. Risks and chances
that would affect planned net income and/or cash flow by more
than €200 million are included as well.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Company’s business decisions and public relations. E.ON’s
objective is to minimize reputational risks and garner public
support so that the Company can continue to operate its busi-
ness successfully. These matters do not result in a major risk or
chance position.

In the past, predecessor entities of E.ON SE conducted mining
operations, resulting in obligations in North Rhine-Westphalia
and Bavaria. E.ON SE can be held responsible for damage. This
could lead to major individual risks that E.ON currently only
evaluates qualitatively.

Market Risks
E.ON’s units operate in an international market environment that
is characterized by general risks relating to the business cycle.
In addition, the entry of new suppliers into the marketplace along
with more aggressive tactics by existing market participants
and reputational risks have created a keener competitive environ-
ment for the Company’s sales business in and outside Germany,
which could reduce margins. However, market developments
could also have a positive impact on E.ON’s business. Such fac-
tors include wholesale and retail price developments, customer
churn rates, and temporary volume effects in the network busi-
ness. This results in a major risk position and a medium chance
position in this category.

The demand for electric power and natural gas is seasonal, with
E.ON’s operations generally experiencing higher demand during
the cold-weather months of October through March and lower
demand during the warm-weather months of April through
September. As a result of these seasonal patterns, E.ON’s sales
and results of operations are higher in the first and fourth quar-
ters and lower in the second and third quarters. Sales and results
of operations for all of E.ON’s energy operations can be negatively
affected by periods of unseasonably warm weather during the
autumn and winter months. E.ON expects seasonal and weath-
er-related fluctuations in sales and results of operations to con-
tinue. Periods of exceptionally cold weather—very low average
temperatures or extreme daily lows—in the fall and winter months
can have a positive impact owing to higher demand for electricity
and natural gas.

E.ON’s portfolio of physical assets, long-term contracts, and
end-customer sales is exposed to uncertainty resulting from
fluctuations in commodity prices. After the Uniper spinoff, E.ON
established its own procurement organization for its sales busi-
ness and ensured market access for the output of its remaining
energy production in order to manage the remaining commodity
risks accordingly.

Operational and IT Risks
The operational and strategic management of the E.ON Group
relies heavily on complex information technology and complex
operation technology (“OT”). This includes risks and chances in
conjunction with information security and the security of oper-
ating processes in E.ON’s business segments.

Cybersecurity and the continuous protection of IT and OT systems
against cyberattacks is a focus area of E.ON’s risk management.
Examples include the analysis of attacks on the systems of the
network business (which could affect the operation of E.ON’s
critical infrastructure), on the sales business (which could result
in the loss of customer data), and on internal systems (which
E.ON uses to control commercial processes in all its business
segments). It is important that the operating units and the Cyber-
security and Enterprise Risk Management divisions jointly and
proactively evaluate and manage risks for E.ON.

Technologically complex production facilities are used in the
production and distribution of energy, resulting in major risks
from procurement and logistics, construction, operations and
maintenance of assets as well as general project risks. In the
case of PreussenElektra, this also includes dismantling activities.
E.ON’s operations in and outside Germany face major risks of
a power failure, power-plant shutdown, and higher costs and
additional investments resulting from unanticipated operational
disruption or other problems. Operational failures or extended
production stoppages of facilities or components of facilities as
well as environmental damage could negatively impact earnings,
affect the cost situation, and/or result in the imposition of fines.
In unlikely cases, this could lead to a high risk. Overall, it results
in a medium risk position and a low chance position in this cate-
gory. General project risks can include a delay in projects and
increased capital requirements.

E.ON could also be subject to environmental liabilities associated
with its power generation operations that could materially
and adversely affect its business. In addition, new or amended
environmental laws and regulations may result in cost increases
for E.ON.

HSE, HR, and Other Risks
Health and occupational safety are important aspects of E.ON’s
day-to-day business. The Company’s operating activities can
therefore pose risks in these areas and create social and environ-
mental risks and chances. In addition, E.ON’s operating business
potentially faces risks resulting from human error and employee
turnover. It is important that E.ON act responsibly along its
entire value chain and that we communicate consistently,
enhance the dialog, and maintain good relationships with key
stakeholders. E.ON actively considers environmental, social,
and corporate-governance issues. These efforts support the

Risks and Chances Report

Strategic Risks
E.ON’s business strategy involves acquisitions and investments
in its core business as well as disposals. This strategy depends in
part on the ability to successfully identify, acquire, and integrate
companies that enhance, on acceptable terms, the Company’s
energy business. In order to obtain the necessary approvals for
acquisitions, E.ON may be required to divest other parts of its
business or to make concessions or undertakings that affect its
business. In addition, there can be no assurance that E.ON will
be able to achieve the returns expected from any acquisition or
investment. It is also possible that E.ON will not be able to realize
its strategic ambition of enlarging its investment pipeline and
that significant amounts of capital could be used for other oppor-
tunities. Furthermore, investments and acquisitions in new
geographic areas or lines of business require E.ON to become
familiar with new sales markets and competitors and to address
the attending business risks.

In the case of planned disposals, E.ON faces the risk of disposals
not taking place or being delayed and the risk that E.ON receives
lower-than-anticipated disposal proceeds. In addition, after
transactions close E.ON could face major liability risks resulting
from contractual obligations.

The overall risk and chance position in this category was not
major at the balance-sheet date.

Finance and Treasury Risks
E.ON is exposed to credit risk in its operating activities and
through the use of financial instruments. Credit risk results from
non-delivery or partial delivery by a counterparty of the agreed
consideration for services rendered, from total or partial failure
to make payments owed on existing accounts receivable, and
from replacement risks in open transactions. For example, E.ON’s
historical connection with Uniper and RWE continues to pose
a major, albeit unlikely, risk. In addition, in unlikely cases joint
and several liability for jointly operated power plants could lead
to a major risk.

E.ON’s international business operations expose it to risks from
currency fluctuation. One form of this risk is transaction risk,
which arises when payments are made in a currency other than
E.ON’s functional currency. Another form of risk is translation
risk, which arises when currency fluctuations lead to accounting
effects when assets/liabilities and income/expenses of E.ON

companies outside the euro zone are translated into euros and
entered into E.ON’s Consolidated Financial Statements. Positive
developments in foreign-currency rates can also create chances
for E.ON’s operating business.

E.ON faces earnings risks from financial liabilities and interest-
rate derivatives that are based on variable interest rates and
from asset-retirement obligations.

Refinancing terms on debt capital markets depend in part on
rating agencies’ credit ratings. Rating agencies Moody’s and S&P
have given E.ON a strong investment-grade rating. E.ON has
contracts that would trigger additional collateral requirements
if certain rating levels were not met. Consequently, significant
rating downgrades could lead to additional liquidity requirements.
On the other hand, positive business performance or further
debt reduction could have a positive impact on E.ON’s rating.

In addition, the price changes and other uncertainty relating to
the current and non-current investments E.ON makes to cover
its non-current obligations (particularly pension and asset-
retirement obligations) could, in individual cases, be major.

Declining or rising discount rates could lead to increased or
reduced provisions for pensions and asset-retirement obligations,
including non-current liabilities. This can create a high balance-
sheet risk for E.ON.

In principle, E.ON could also encounter tax risks and chances.

This category’s overall risk and chance position is not major.

Management Board’s Evaluation of the Risk
and Chances Situation

The overall risk and chances situation of the E.ON Group’s oper-
ating business at year-end 2020 improved relative to year-end
2019 owing to legal and regulatory risks and opportunities from
a possible agreement on the transfer of residual power output
rights. Although the average annual risk for the E.ON Group’s
adjusted EBIT is classified as major and despite the expansion of
its risk and chance position through the innogy transaction, from
today’s perspective E.ON does not perceive any risk profile that
could threaten the existence of E.ON SE, the E.ON Group or
individual segments.

Internal Control System
for the Accounting Process

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Disclosures Pursuant to Section 289,
Paragraph 4, and Section 315, Paragraph 4 of
the German Commercial Code on the Internal
Control System for the Accounting Process

General Principles

E.ON applies Section 315e, Paragraph 1, of the German Commer-
cial Code and prepares its Consolidated Financial Statements
in accordance with International Financial Reporting Standards
(“IFRS”) and the interpretations of the IFRS Interpretations
Committee that were adopted by the European Commission for
use in the EU as of the end of the fiscal year and whose appli-
cation was mandatory as of the balance-sheet date (see Note 1
to the Consolidated Financial Statements). Energy Networks
(Germany, Sweden, and East-Central Europe/Turkey), Customer
Solutions (Germany, United Kingdom, Netherlands/Belgium,
Other), Non-Core Business, and Corporate Functions/Other are
the Company’s IFRS-reportable segments.

E.ON SE prepares its Financial Statements in accordance with
the German Commercial Code, the SE Ordinance (in conjunction
with the German Stock Corporation Act), and the German
Energy Act.

E.ON prepares a Combined Group Management Report which
applies to both the E.ON Group and E.ON SE.

Accounting Process

All companies included in the Consolidated Financial Statements
must comply with E.ON’s uniform Accounting and Reporting
Guidelines for the Annual Consolidated Financial Statements and
the Interim Consolidated Financial Statements. These guidelines
describe applicable IFRS accounting and valuation principles.
They also explain accounting principles typical in the E.ON Group,
such as those for provisions for nuclear-waste management,
the treatment of financial instruments, and the treatment of
regulatory obligations. E.ON continually analyzes amendments
to laws, new or amended accounting standards, and other import-
ant pronouncements for their relevance to, and consequences
for, the Consolidated Financial Statements and, if necessary,
update its guidelines and systems accordingly.

Corporate Functions defines and oversees the roles and respon-
sibilities of various Group entities in the preparation of E.ON SE’s
Financial Statements and the Consolidated Financial Statements.
These roles and responsibilities are described in a Group Policy
document.

E.ON Group companies are responsible for preparing their
financial statements in a proper and timely manner. They
receive substantial support from Business Service Centers in

Regensburg, Germany; Cluj, Romania; and Kraków, Poland.
E.ON SE combines the financial statements of subsidiaries
belonging to its scope of consolidation into its Consolidated
Financial Statements using standard consolidation software.
Group Accounting is responsible for conducting the consolidation
and for monitoring adherence to the guidelines for scheduling,
processes, and contents. Monitoring by means of system-based
automated controls is supplemented by manual checks.

In conjunction with the year-end closing process, additional
qualitative and quantitative information relevant for accounting
is compiled. Furthermore, dedicated quality-control processes
are in place for all relevant departments to discuss and ensure
the completeness of important information on a regular basis.

E.ON SE’s Financial Statements are prepared with SAP software.
The accounting and preparation processes are divided into
discrete functional steps. Bookkeeping processes have largely
been outsourced to E.ON’s Business Service Centers. Cluj has
the primary responsibility for processes relating to subsidiary
ledgers and several bank activities. Regensburg has the principal
responsibility for processes relating to the general ledgers. Auto-
mated or manual controls are integrated into each step. Defined
procedures ensure that all transactions and the preparation of
E.ON SE’s Financial Statements are recorded, processed, assigned
on an accrual basis, and documented in a complete, timely, and
accurate manner. Relevant data from E.ON SE’s Financial State-
ments are, if necessary, adjusted to conform with IFRS and then
transferred to the consolidation software system using SAP-
supported transfer technology.

The following explanations about E.ON’s internal control
system (“ICS”) and its general IT controls apply equally to the
Consolidated Financial Statements and to E.ON SE’s Financial
Statements. Page 67 contains information about the innogy
Group’s internal control system, which has not yet been adapted
to E.ON’s internal control system.

Internal Control System

The management of each unit in the E.ON Group is legally
responsible for establishing and maintaining an adequate and
effective internal control system (“ICS”). The ICS department
at Corporate Audit is responsible for the oversight and coordina-
tion of the overall ICS process in order to ensure an effective
ICS in the E.ON Group. For this purpose, the ICS department at
Corporate Audit provides the ICS framework and the necessary
tools. An ICS Business Partner (“ICS BP”) is assigned to each unit
which is of particular importance to the E.ON Group and there-
fore in the ICS documentation scope. The ICS BP is responsible

Internal Control System for the Accounting Process

for coordinating and monitoring the unit’s ICS activities and
advises and supports management in implementing an effective
internal control system. The unit’s management remains respon-
sible for the appropriateness and effectiveness of the imple-
mented ICS. The ICS BP concept ensures a uniform approach as
well as consistent and efficient collaboration and fosters con-
tinuous improvement through extensive information-sharing in
the Group.

E.ON’s ICS Framework
E.ON’s ICS is based on the globally recognized COSO framework
from May 2013 (COSO: The Committee of Sponsoring Organi-
zations of the Treadway Commission).

The ICS Principles, which define the minimum requirements for
an effective internal control system, are a key component of
E.ON’s ICS. They contain overarching principles such as autho-
rization, segregation of duties, and master data management as
well as specific requirements for managing potential risks in
various areas and processes, such as supplier monitoring, project
management, invoice verification, and payments. All fully con-
solidated companies and majority-owned units are subject to
the ICS Principles.

In addition to the ICS Principles, certain units of special impor-
tance to the E.ON Group must fulfill several additional ICS
requirements for selected processes. These requirements relate
to the documentation and assessment of the relevant processes
and controls—the ICS model—as well as reporting to Corporate
Audit. The ICS model, which incorporates company- and indus-
try-specific aspects, defines potential risks for accounting
(financial reporting) at the operating units, serves as a checklist,
and provides guidance for the establishment of internal controls
as well as their documentation and implementation, and is thus
an integral part of the accounting processes.

A functionally managed digital organization and third-party
service providers provide IT and digital services for the E.ON
Group. IT systems used for accounting are subject to the internal
control system framework, which includes IT general controls,
such as access controls, segregation of duties, processing con-
trols, measures to prevent the intentional and unintentional falsi-
fication of the programs, data, and documents as well as controls
related to supplier monitoring. The documentation of the IT
general controls is stored in E.ON’s documentation system.

Each year, qualitative criteria and quantitative materiality aspects
are used to determine which financial-reporting processes and
controls must be documented and assessed by which E.ON units.

E.ON units in the ICS documentation scope use a central docu-
mentation system (SAP-GRC) for this purpose. The system
contains the scope, detailed documentation requirements, the
assessment requirements for process owners, and the final
Sign-Off process.

Management Self-Assessment and Control Tests
After E.ON units have documented their processes and controls,
the individual process owners conduct an annual assessment
of the design and the operational effectiveness of the controls
embedded in these processes. This is known as a management
self-assessment.

In addition, the effectiveness of the internal controls is audited
by Internal Audit. These audits are conducted based on a risk-
oriented audit plan. Any identified deficiencies are reported to
the relevant companies.

Furthermore, the general IT controls, the controls of the Business
Service Centers in Regensburg and Cluj, the controls of the
Human Resources Service Center in Germany (E.ON Country
Hub Germany GmbH), and the controls of the Pension Service
Company in Germany (Energie Pensions-Management GmbH)
were audited as part of the audit of the Group’s Consolidated
Financial Statements.

Sign-Off Process
Based on the self-assessment result and internal and external
audit findings, the respective management of the unit conducts
the final Sign-Off. The final step of the internal evaluation pro-
cess is the submission of a formal written declaration confirming
the ICS’s effectiveness (ICS Sign-Off). The Sign-Off process is
conducted at all levels of the Group companies before E.ON SE,
as the final step, conducts it for the Group as a whole. The Chair-
man of the E.ON SE Management Board and the Chief Financial
Officer perform the final Sign-Off for the E.ON Group.

Disclosures Regarding Takeovers

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

The purpose of the ICS framework and the annual ICS process
is to provide sufficient assurance to prevent error or fraud from
resulting in material misrepresentations in the Financial State-
ments, the Combined Group Management Report, the Half-Year
Financial Report, and the Quarterly Statements.

Corporate Audit regularly informs the E.ON SE Supervisory
Board’s Audit & Risk Committee about the ICS over financial
reporting and about any significant deficiencies identified in
the E.ON Group’s various processes.

innogy’s Internal Control System and its
Integration into E.ON’s ICS Framework

innogy’s ICS Framework
A dedicated unit within the Accounting & Reporting division,
Corporate Internal Controls (“CIC”), was responsible for designing
and monitoring the ICS of the previous innogy Group. CIC was
supported in the implementation, design, and monitoring by
ICS coordinators and the employees responsible for ICS at the
respective units.

In 2020, the testing of the effectiveness of the implemented
controls for accounting was performed as part of the annual
ICS process, which is part of innogy companies’ established ICS.
In addition to the ICS Coordinators, ICS testers were appointed
and/or responsible for testing the appropriateness and effective-
ness of the internal control system of the respective units in the
ICS scope. Essentially, ICS testers are employees from Account-
ing, Internal Audit, and/or are requested from external auditing
firms. Once the centrally performed risk assessment was done
taking the external audit scope in account, an overview about
the controls in scope of the testing is provided to the respective
ICS tester. The testing process and assessment of the controls
is conducted technically in SAP-GRC.

Unlike for the accounting process, for Finance, HR, procurement,
IT, Tax, Retail Billing, and Grid Billing only the ICS quality standards
were reviewed by the persons responsible for the ICS as part
of the management self-assessment. Likewise, analogous to the
above-described EON ICS principles, innogy’s ICS quality stan-
dards generally reflect the minimum ICS standards.

The results of the management self-assessment are included
in the ICS year-end report concerning the effectiveness of the
entire E.ON Group’s internal control system and are reported to
E.ON’s Management Board.

Integration of innogy Companies into the E.ON ICS Framework
As part of innogy’s integration into the E.ON Group, CIC started
to report to E.ON Corporate Audit from July 1, 2020, onward.
Effective November 1, 2020, CIC’s tasks relating to the design
and monitoring of innogy companies’ ICS were taken over by
E.ON Corporate Audit’s ICS department.

For the 2020 financial year, the Chief Executive Officer (“CEO”)
and Chief Financial Officer (“CFO”) of the former innogy affiliates
who directly reported to innogy SE or E.ON SE were, in the con-
text of the 2020 Consolidated Financial Statements, for the first
time responsible for formally acknowledging their responsibility
as well as the effectiveness of the ICS for their respective units.
This formal Sign-Off process was performed in the same way as
the E.ON Sign-Off ICS process was performed and included only
innogy companies in the ICS scope. However, the innogy ICS
framework including the design and monitoring function was still
applicable in 2020. Furthermore, a comprehensive ICS integra-
tion program was initiated to integrate innogy companies in the
ICS documentation scope into E. ON’s risk catalog (ICS model).
From the beginning of 2021, E.ON’s ICS framework is applicable
to all innogy companies in the ICS scope without exception.

Disclosures Pursuant to Section 289a,
Paragraph 1, and Section 315a, Paragraph 1,
of the German Commercial Code and Explana-
tory Report

Composition of Share Capital

The share capital totals €2,641,318,800 and consists of
2,641,318,800 registered shares without nominal value. Each
share of stock grants the same rights and one vote at a Share-
holders Meeting.

Restrictions on Voting Rights or the Transfer of
Shares

Shares acquired by an employee under the Company-sponsored
employee stock purchase program are subject to a blackout
period that begins the day ownership of such shares is trans-
ferred to the employee and that ends on December 31 of the
next calendar year plus one. As a rule, an employee may not sell
such shares until the blackout period has expired. The employee
stock purchase program was not offered in 2020.

Pursuant to Section 71b of the German Stock Corporation Act
(known by its German abbreviation, “AktG”), the Company’s
treasury shares give it no rights, including no voting rights.

Disclosures Regarding Takeovers

Legal Provisions and Rules of the Company’s
Articles of Association Regarding the Appoint-
ment and Dismissal of Management Board
Members and Amendments to the Articles of
Association

Pursuant to the Company’s Articles of Association, the Manage-
ment Board consists of at least two members. The Supervisory
Board decides on the number of members as well as on their
appointment and dismissal.

The Supervisory Board appoints members to the Management
Board for a term not exceeding five years; reappointment is per-
missible. If several persons are appointed as members of the
Management Board, the Supervisory Board may appoint one of
the members as Chairperson of the Management Board. If there
is a vacancy on the Management Board for a required member,
the court makes the necessary appointment upon petition by
a concerned party in the event of an urgent matter. The Super-
visory Board may revoke the appointment of a member of the
Management Board and of the Chairperson of the Management
Board for serious cause (for further details, see Sections 84
and 85 of the AktG).

Resolutions of the Shareholders Meeting require a majority of
the valid votes cast unless mandatory law or the Articles of
Association explicitly prescribe otherwise. An amendment to
the Articles of Association requires a two-thirds majority of the
votes cast or, in cases where at least half of the share capital is
represented, a simple majority of the votes cast unless manda-
tory law explicitly prescribes another type of majority.

The Supervisory Board is authorized to decide by resolution on
amendments to the Articles of Association that affect only their
wording (Section 10, Paragraph 7, of the Articles of Association).
Furthermore, the Supervisory Board is authorized to revise the
wording of Section 3 of the Articles of Association upon utiliza-
tion of authorized or conditional capital.

Management Board’s Power to Issue or Buy
Back Shares

Pursuant to a resolution of the Shareholders Meeting of May 28,
2020, the Management Board is authorized, until May 27, 2025,
to have the Company acquire treasury shares. The shares acquired
and other treasury shares that are in possession of or to be
attributed to the Company pursuant to Sections 71a et seq. of
the AktG must altogether at no point account for more than
10 percent of the Company’s share capital.

At the Management Board’s discretion, the acquisition may be
conducted:

• through a stock exchange

• by means of a public offer directed at all shareholders or a

public solicitation to submit offers

• by means of a public offer or a public solicitation to submit
offers for the exchange of liquid shares that are admitted to
trading on an organized market, within the meaning of the
German Securities Purchase and Takeover Law, for Company
shares

• by the use of derivatives (put or call options or a combination

of both).

These authorizations may be utilized on one or several occasions,
in whole or in partial amounts, in pursuit of one or more objec-
tives by the Company and also by its affiliated companies or by
third parties for the Company’s account or one of its affiliates’
account.

With regard to treasury shares that will be, or have been, acquired
based on the aforementioned authorization and/or prior autho-
rizations by the Shareholders Meeting, the Management Board
is authorized, subject to the Supervisory Board’s consent and
excluding shareholder subscription rights, to use these shares
—in addition to a disposal through a stock exchange or an offer
granting a subscription right to all shareholders—as follows:

• to be sold and transferred against cash consideration

• to be sold and transferred against contributions in kind

• to be used in order to satisfy the rights of creditors of bonds
with conversion or option rights or, respectively, conversion
obligations issued by the Company or its Group companies

• to be offered, with or without consideration, for purchase

and transferred to individuals who are or were employed by
the Company or one of its affiliates as well as to board mem-
bers of affiliates of the Company

• to be used for the purpose of a scrip dividend where share-

holders may choose to contribute their dividend entitlement
to the Company in the form of a contribution in kind in
exchange for new shares.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

become standard market practice. More information about
financial liabilities is contained in the section of the Combined
Group Management Report entitled Financial Situation and in
Note 27 to the Consolidated Financial Statements.

Settlement Agreements between the Company
and Management Board Members or Employees
in the Case of a Change-of-Control Event

In the event of a premature loss of a Management Board posi-
tion due to a change-of-control event, the service agreements
of Management Board members entitle them to severance and
settlement payments (see the detailed presentation in the
Compensation Report).

To the extent that the Company has agreed to settlement pay-
ments for Management Board members in the case of a change
of control, the purpose of such agreements is to preserve the
independence of Management Board members.

A change-of-control event would also result in the early payout
of virtual shares under the E.ON Share Matching Plan and the
E.ON Performance Plan. The vesting period of the last tranche of
the E.ON Share Matching Plan ends in March 2021. Afterward,
therefore there can only be early payouts under the E.ON Perfor-
mance Plan, but no longer under the E.ON Share Matching Plan.

Other Disclosure Relevant to Takeovers

The Company has been notified about the following direct or
indirect interests in its share capital that exceed 10 percent of
the voting rights:

• notification on December 10, 2020, by RWE Aktiengesell-

schaft for 15 percent of the voting rights

Stock with special rights granting power of control has not
been issued. In the case of stock given by the Company to
employees, employees exercise their rights of control directly
and in accordance with legal provisions and the provisions of
the Articles of Association, just like other shareholders.

In addition, the Management Board is authorized to cancel trea-
sury shares, without such cancellation or its implementation
requiring an additional resolution by the Shareholders Meeting.

These authorizations may be utilized on one or several occa-
sions, in whole or in partial amounts, separately or collectively,
including with respect to treasury shares acquired by affiliated
companies or companies majority-owned by the Company or by
third parties for their account or the Company’s account.

In each case, the Management Board will inform the Share-
holders Meeting about the utilization of the aforementioned
authorization, in particular about the reasons for and the purpose
of the acquisition of treasury shares, the number of treasury
shares acquired, the amount of the registered share capital
attributable to them, the portion of the registered share capital
represented by them, and their equivalent value.

By shareholder resolution adopted at the Annual Shareholders
Meeting of May 28, 2020, the Management Board was autho-
rized, subject to the Supervisory Board’s approval, to increase,
until May 27, 2025, the Company’s share capital by a total of
up to €528 million through one or more issuances of new regis-
tered no-par-value shares against contributions in cash and/or
in kind (authorized capital pursuant to Sections 202 et seq. of the
AktG; “Authorized Capital 2020”). Subject to the Supervisory
Board’s approval, the Management Board is authorized to exclude
shareholders’ subscription rights.

At the Annual Shareholders Meeting of May 28, 2020, share-
holders approved a conditional increase of the Company’s share
capital (with the option to exclude shareholders’ subscription
rights) up to the amount of €264 million (“Conditional Capital
2020”). Note 20 to the Consolidated Financial Statements con-
tains more information about Conditional Capital 2020.

Significant Agreements to Which the Company
Is a Party That Take Effect on a Change of Control
of the Company Following a Takeover Bid

The underlying contracts of debt issued since 2007 contain
change-of-control clauses that give the creditor the right of
cancellation. This applies, inter alia, to bonds issued by E.ON SE
and E.ON International Finance B.V. and guaranteed by E.ON SE,
promissory notes issued by E.ON SE, and other instruments
such as credit contracts. Granting change-of-control rights to
creditors is considered good corporate governance and has

Corporate Governance Declaration

Corporate Governance Declaration in Accor-
dance with Section 289f and Section 315d of
the German Commercial Code

Declaration Made in Accordance with Section
161 of the German Stock Corporation Act by
the Management Board and the Supervisory
Board of E.ON SE

The Board of Management and Supervisory Board declare that
the recommendations of the “Government Commission on the
German Corporate Governance Code” (version of February 7,
2017) published by the Federal Ministry of Justice and Consumer
Protection in the official section of the Federal Gazette on
April 24, 2017, have been fully complied with since the last
declaration was issued in December 2019.

The Board of Management and Supervisory Board further declare
that the recommendations of the “Government Commission on
the German Corporate Governance Code” (version dated Decem-
ber 16, 2019) published by the Federal Ministry of Justice and
Consumer Protection in the official section of the Federal Gazette
on March 20, 2020, are complied with in full.

In the past financial year, the Management Board and Super-
visory Board paid close attention to E.ON’s compliance with the
former and new German Corporate Governance Code’s recom-
mendations and suggestions. They determined that E.ON SE
fully complies, or will comply, with all of the Code’s recommen-
dations and also with nearly all of its suggestions.

Transparent Management
Transparent management is a high priority of the Management
Board and Supervisory Board. E.ON’s shareholders, all capital
market participants, financial analysts, shareholder associations,
and the media regularly receive up-to-date information about
the situation of, and any material changes to, the Company. E.ON
primarily uses the Internet to provide equal access to compre-
hensive and timely information.

E.ON SE issues reports about its and the E.ON Group’s situation
and earnings by the following means:

• Annual Report and Annual Finance Statements
• Half-Year Financial Report and Quarterly Statements
• Annual press conferences
• Press releases
• Telephone conferences held on release of the quarterly and

Essen, December 15, 2020

annual results

• Numerous discussions with financial analysts in and outside

Germany

• Periodic events for investors.

A financial calendar lists the dates on which the Company’s
periodic financial reports are released.

The Company issues ad hoc statements about information that
could have a significant impact on the price of E.ON stock.

The financial calendar and ad hoc statements are available on
the Internet at www.eon.com.

For the Supervisory Board of E.ON SE:
Dr. Karl-Ludwig Kley
(Chairman of the Supervisory Board of E.ON SE)

For the Board of Management of E.ON SE:
Dr. Johannes Teyssen
(Chairman of the Board of Management of E.ON SE)

This declaration and those of the previous five years are contin-
uously available to the public on the Company’s Internet page
at www.eon.com.

Relevant Information about Management
Practices

Corporate Governance
E.ON views good corporate governance as a central foundation
of responsible and value-oriented management, efficient
collaboration between the Management Board and the Super-
visory Board, transparent disclosures, and appropriate risk
management.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Description of the Functioning of the
Management Board and Supervisory Board
and of the Composition and Functioning of
Their Committees

Management Board
The E.ON SE Management Board manages the Company’s
businesses, with all its members bearing joint responsibility for
its decisions. It determines the Group’s objectives, corporate
policy, organizational setup, and, in consultation with the Super-
visory Board, its fundamental strategic direction.

In 2020 the Management Board consisted of five members.
It had one Chairman. No Management Board member has more
than two supervisory board memberships in listed non-Group
companies or on the supervisory bodies of non-Group companies
that require a similar commitment. No member of the Manage-
ment Board has reached the general retirement age. The Man-
agement Board has in place policies and procedures for the
business it conducts and, in consultation with the Supervisory
Board, has assigned areas of responsibility to its members.

The Management Board reports to the Supervisory Board on a
regular, timely, and comprehensive basis on all relevant issues,
particularly those relating to strategy, planning, business devel-
opment, risk situation, risk management, and compliance. It
also submits the Group’s investment, finance, and personnel
plan for the next financial year as well as the medium-term plan
to the Supervisory Board, generally at the last meeting of each
financial year.

The Chairman of the Management Board informs, without
undue delay, the Chairman of the Supervisory Board of import-
ant events that are of fundamental significance in assessing
the Company’s situation, development, and management and
of any defects that have arisen in the Company’s monitoring
systems. Transactions and measures requiring the Supervisory
Board’s approval are also submitted to the Supervisory Board
in a timely manner.

Managers’ Transactions
Persons with executive responsibilities, in particular members
of E.ON SE’s Management Board and Supervisory Board, and
persons closely related to them, must disclose certain dealings
in E.ON stock or bonds, related derivates, or other related finan-
cial instruments pursuant to Article 19 of the EU Market Abuse
Regulation in conjunction with Section 26, Paragraph 2, of the
German Securities Trading Act. There were no such dealings in
the 2020 financial year.

Compliance
The goal of compliance at E.ON is to prevent or at least detect and
put a stop to corporate misconduct. It is E.ON’s responsibility
never to deceive, lie to, or otherwise deliberately harm its custom-
ers, business partners, or other stakeholders. Strict compliance
with laws and company policies is therefore the foundation of
good corporate governance.

E.ON has in place a compliance management system (“CMS”) to
mitigate the risk of compliance violations. The CMS is based on
a number of widely recognized practices, including the promotion
of a compliance culture. This encompasses an active commit-
ment to compliance targets, the identification and analysis of
compliance risks, and the design of a risk-adequate compliance
program and a compliance organization.

E.ON‘s Supplier Code and its Code of Conduct (both of which
are available in the languages of all countries in which the Com-
pany operates) focus on the guiding principle, “Doing the right
thing.” They provide easy-to-understand guidance, in particular
human rights, anti-corruption, fair competition, and compliant
relationships with business partners. The Code of Conduct also
contains an integrity test that employees can use to check
whether their assessment of a situation is in compliance with
E.ON principles and values. Every employee in the E.ON Group
is obliged to act in accordance with the Code of Conduct’s rules.
The Code is therefore part of E.ON employees’ duties under their
employment contract. Employees and third parties can report
violations of the Code of Conduct—anonymously, if they wish—
by means of a whistle-blower hotline. The Code of Conduct and
the Supplier Code are published on www.eon.com. They are
supplemented by ten Group-wide People Guidelines which
explain in greater detail how employees can be sure that they
are doing things right.

Corporate Governance Declaration

Members of the Management Board are required to promptly
report conflicts of interest to the Chairman of the Supervisory
Board and the Chairman of the Management Board and to
inform the other members of the Management Board. Members
of the Management Board may only assume other corporate
positions, particularly appointments to the supervisory boards
of non-Group companies, with the consent of the Executive
Committee of the Supervisory Board. There were no conflicts of
interest involving members of the E.ON SE Management Board
in the year under review. Dr.-Ing. Leonhard Birnbaum was also
a member of the Management Board of the previously publicly
listed innogy SE until it was merged into the entity formerly
known as E.ON Verwaltungs SE (which now does business as
innogy SE) on June 2, 2020. During this time, Dr.-Ing. Birnbaum
did not participated in the adoption of resolutions or the other gov-
ernance matters on the E.ON SE Management Board that posed
a potential conflict of interest between E.ON SE and innogy SE.

Any material transactions between the Company and members
of the Management Board, their relatives, or entities with which
they have close personal ties require the consent of the Execu-
tive Committee of the Supervisory Board. No such transactions
took place in the reporting period.

The Management Board has no board committees but has
established a number of committees that support it in the
fulfillment of its tasks. The members of these committees are
senior representatives of various departments of E.ON SE
whose experience, responsibilities, and expertise make them
particularly suited for their committee’s tasks. Among these
committees are the following:

The Management Board has established a Disclosure Committee
and an Ad Hoc Committee for issues relating to financial
disclosures. These committees ensure that all information is
disclosed in a correct and timely fashion.

A Risk Committee ensures the correct application and implemen-
tation of the legal requirements of Section 91 of the German
Stock Corporation Act (known by its German abbreviation, “AktG”).
This committee monitors the E.ON Group’s risk situation and
its risk-bearing capacity and devotes particular attention to the
early identification of developments that could potentially
threaten the Company’s continued existence. In this context,

the Risk Committee also deals with risk-mitigation strategies
(including hedging strategies). In collaboration with relevant
departments, the committee ensures and refines the implemen-
tation of, and compliance with, company policies regarding
commodity risks, credit risks, and enterprise risk management.

Supervisory Board
To ensure that, after the acquisition of the majority of the shares
of innogy SE, innogy’s employees are represented without delay
on the Supervisory Board of E.ON SE as the Group’s parent
company, the Supervisory Board was enlarged to 20 members
for a limited period of time. Effective the conclusion of the
2023 Annual Shareholders Meeting, the size of the Supervisory
Board will again be set at 12 members. Pursuant to E.ON SE’s
Articles of Association, the Supervisory Board is composed of
an equal number of shareholder and employee representatives.
The shareholder representatives are elected by the shareholders
at the Annual Shareholders Meeting; the Supervisory Board
nominates candidates for this purpose. The Annual Shareholders
Meeting decides on the elections by individual vote. Pursuant
to the agreement regarding employees’ involvement in E.ON SE,
the other currently ten members of the Supervisory Board are
appointed by the SE Works Council, with the provision that at
least three different countries are represented and one member
is selected by a trade union that is represented at E.ON SE or
one of its subsidiaries in Germany. Persons are not eligible as
Supervisory Board members if they:

•

(as stipulated by the AktG) are already supervisory board
members in ten commercial companies that are required by
law to form a supervisory board,

• are legal representatives of an enterprise controlled by the

Company,

• are legal representatives of another corporation whose
supervisory board includes a member of the Company’s
Management Board, or

• were a member of the Company’s Management Board in the
past two years, unless the person concerned is nominated
by shareholders who hold more than 25 percent of the Com-
pany’s voting rights.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

In view of recommendation C.1 of the German Corporate Gov-
ernance Code, dated December 16, 2019, and Section 289f,
Paragraph 2, Item 6, of the German Commercial Code, the
Supervisory Board defined specific targets for its composition,
including a diversity concept and a competency profile for the
entire Supervisory Board, that go beyond the applicable legal
requirements. They are as follows:

“The composition of the Supervisory Board of E.ON SE shall
comply with the specific SE requirements and Germany’s Stock
Corporation Act, and with the recommendations of the German
Corporate Governance Code.

a) In this context, the following general objectives shall be
observed:

• Given a total number of 20 Supervisory Board members, the
shareholder representatives believe that at least six of them
should be independent of the Company and the Management
Board. Members shall be deemed to be independent if they
have no personal or business relationship with the Company
or its Management Board, where such relationship may give
rise to a material and not merely temporary conflict of inter-
ests. In assessing the independence of its members from the
Company and its Management Board, the shareholder repre-
sentatives shall consider in particular whether a Supervisory
Board member or a close family member was a member of
the Company’s Management Board in the two years prior to
appointment, currently has (or until the year of appointment
had) a significant business relationship with the Company or
one of its affiliates, either directly or as a shareholder or corpo-
rate officer of a company outside the Group, is a close family
member of a Management Board member, or has been a
member of the Supervisory Board for more than 12 years.

• The Chairman of the Supervisory Board, the Chairman of the
Audit and Risk Committee and the Chairman of the Executive
Committee shall be independent of the Company and the
Management Board.

The members of the E.ON SE Supervisory Board fulfill these
requirements. Pursuant to the AktG, at least one member of the
Supervisory Board must have special knowledge and experience
in the application of accounting principles and internal control
processes and be familiar with the auditing of financial statements.
The Supervisory Board believes that, in particular, Andreas
Schmitz meets this requirement. It also believes that its mem-
bers in their entirety are familiar with the sector in which the
Company operates.

The Supervisory Board oversees the Company’s management
and advises the Management Board on an ongoing basis. The
Management Board requires the Supervisory Board’s prior
approval for significant transactions and measures, such as the
Group’s investment, finance, and personnel plans; the acquisition
or sale of companies, equity interests, parts of companies
(with the exception of equity investments), or asset investments
whose fair value or, in the absence of a fair value, whose book
value exceeds €300 million; financing measures that exceed
€1 billion and have not been covered by Supervisory Board
resolutions regarding finance plans; and the conclusion, amend-
ment, or termination of affiliation agreements. The Supervisory
Board examines the Financial Statements of E.ON SE, the
Management Report, and the proposal for profit appropriation
and, on the basis of the Audit and Risk Committee’s preliminary
review, the Consolidated Financial Statements and the Separate
Combined Non-financial Report. The Supervisory Board provides
to the Annual Shareholders Meeting a written report on the
results of this examination.

The Supervisory Board has established rules and procedures
for itself, which are available on the Company’s Internet page.
It holds at least four regular meetings in each financial year.
Its rules and procedures include mechanisms by which, if neces-
sary, a meeting of the Supervisory Board or one of its committees
can be called at any time at the request of a Management Board
member. Shareholder representatives and employee represen-
tatives can prepare for Supervisory Board meetings separately.
In the event of a tie vote on the Supervisory Board, the Chairman
has the tie-breaking vote.

Furthermore, in September 2020 it was stipulated in the
Supervisory Board’s rules and procedures that the Supervisory
Board will hold executive sessions on a regular basis; that is,
to meet without the Management Board.

Corporate Governance Declaration

• The Supervisory Board shall not include more than two former

• Four Supervisory Board members shall have international

members of the Board of Management.

• Members of the Supervisory Board must not have seats on

the boards of, or act as consultants for, any of the Company’s
major competitors or have a personal relationship with one of
its competitors.

• Supervisory Board membership shall be limited to no more

than 15 years.

• All Supervisory Board members must have sufficient time
available to perform their duties on the boards of various
companies. Persons who are not members of the management
board of a listed company should only be eligible as members
of E.ON’s Supervisory Board if they do not have seats on a
total of more than five supervisory boards of listed non-Group
companies or exercise a similar function; being a chairperson
of a supervisory board counts twice. Persons who are members
of the board of management of a listed company should only
be eligible as members of E.ON’s Supervisory Board if they do
not have seats on a total of more than two supervisory boards
of listed non-Group companies, exercise a comparable function,
and are not the chairperson of the supervisory board of a
listed non-Group company.

experience, i.e. they shall have spent, for instance, many years
of their professional career outside Germany.

c) In addition, the following skills profile shall apply; especially
the Nominations Committee will strive to apply the skills profile
when preparing nominations of candidates for the shareholders’
representatives to be proposed to the Annual General Meeting.

• The shareholders’ representatives should have leadership

experience in companies or other large organizations by the
majority. At least four members shall have experience, as
management or supervisory board members, in the strategic
management or supervision of listed organizations and shall be
familiar with the functioning of capital and financial markets.

• At least two members shall be familiar, in particular, with

innovation, disruption and digitization and the associated new
business models and cultural change.

• At least four members shall have specific expertise in the
businesses and markets that are particularly relevant for
E.ON. This includes in particular the energy sector, the sales
and retail business, regulated industries, new technology as
well as relevant customer sectors.

b) In addition, the Supervisory Board has adopted the following
diversity concept so as to ensure a balanced structure of the Super-
visory Board in terms of age, gender, personality, educational
background and professional experience.

•

In the search for qualified Supervisory Board members, due
consideration shall be given to diversity. When preparing
nominations for the election of Supervisory Board members,
due consideration shall be given in each case to the question
as to whether complementary academic profiles, professional
and life experience, a balanced age mix, various personalities
and a reasonable gender balance benefit the Supervisory
Board’s work. In this context, care shall be taken to ensure
that a gender quota of 30 percent will be achieved; this shall
apply to the Supervisory Board as a whole and to the share-
holders’ and employees’ representatives separately.

• At least two independent representatives of the shareholders
shall have expertise in the fields of accounting, risk manage-
ment and auditing of financial statements.

• At least two members shall be familiar with legal and compli-
ance, HR, IT and sustainability, more specially in the dimensions
of environmental protection, social, and governance (“ESG”).”

Current Composition of the Supervisory Board
a) The Supervisory Board believes that all of its members—thus
in particular the Chairmen of the Supervisory Board and the
Chairpersons of all its committees—are independent. No former
Management Board member or a close family member of a
Management Board members sits on the Supervisory Board.
Furthermore, no Supervisory Board member currently has or
had in the year up to his or her appointment, either directly or as

• As a rule, members of the Supervisory Board shall not hold
office beyond the age of 75; they should not be older than
72 years when they are elected.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

c) In their entirety, the members bring a wide range of specific
knowledge to committee work and have special expertise in
one or more businesses and markets relevant to the Company.
In view of continually changing business requirements, the Super-
visory Board will continue to identify necessary competencies
early to ensure that it has them. The Supervisory Board believes
that the requirements of the Supervisory Board’s competency
profile are met by the current members of the Supervisory Board.

Current CVs of Supervisory Board members are published on
the Company’s Internet page.

The Supervisory Board has established the following committees
and defined rules and procedures for them:

The Executive Committee consists of six members: the Super-
visory Board Chairman, his two Deputies, another member
elected at the recommendation of employee representatives,
and two more members elected at the recommendation of
shareholder representatives. It prepares the meetings of the
Supervisory Board and advises the Management Board on
matters of general policy relating to the Company’s strategic
development. In urgent cases (in other words, if waiting for the
Supervisory Board’s prior approval would materially prejudice
the Company), the Executive Committee acts on the full Super-
visory Board’s behalf. In addition, a key task of the Executive
Committee is to prepare the Supervisory Board’s personnel
decisions and resolutions for setting the respective total com-
pensation of individual Management Board members within
the meaning of Section 87, AktG.

Furthermore, it is responsible for the conclusion, alteration, and
termination of the service agreements of Management Board
members and for presenting the Supervisory Board with a pro-
posal for a resolution on a clear and comprehensible compen-
sation plan for the Management Board and its periodic review.
In addition, it prepares the Supervisory Board’s decision on the
Group’s investment, financial, and personnel plan for the next
financial year. It also deals with corporate-governance matters
and reports to the Supervisory Board, generally once a year, on
the status and effectiveness of, and possible ways of improving,
the Company’s corporate governance and on new requirements
and developments in this area.

a shareholder or in a responsible role in a company outside the
Group, a significant business relationship with the Company or
one of its affiliates. No Supervisory Board members exercises
any executive or advisory functions for major competitors, has
a personal relationship with a major competitor, or has been a
Supervisory Board member of more than 15 years. The Super-
visory Board’s assessment considered the fact that Karen de
Segundo has been a Supervisory Board member since 2008
and is thus the only member to have been a member for more
than 12 years. In view of the changes in the composition of
the Management Board and Supervisory Board in recent years,
Ms. de Segundo continues to maintain the objective detachment
from the Company and its Management Board necessary to
perform her monitoring role. Furthermore, she does not and has
not at any time in the past had a significant business or personal
relationship with the Company, one of its affiliates, or the
Management Board, either directly or as a shareholder or in a
responsible capacity in a company outside the Group. She is
therefore independent within the meaning of the German Cor-
porate Governance Code.

The Supervisory Board believes that in the case of no Super-
visory Board member there are specific indications of relevant
situations or relationships that could give rise to a conflict of
interests. During the year at most three, and since July 2020
only two, management board members of a listed company sit
on the Supervisory Board: Klaus Fröhlich, who was a member
of the Board of Management of Bayerische Motoren Werke
Aktiengesellschaft until June 2020, Rolf Martin Schmitz, Chair-
man of the Board of Management of RWE Aktiengesellschaft,
and Carolina Dybeck Happe, who has been CFO of General
Electric Company since March 2020. In addition, these Super-
visory Board members had no more than two seats on the
supervisory boards of non-Group listed companies or exercised
comparable functions. None of the other Supervisory Board
members had seats on more than five supervisory boards of
non-Group listed companies or exercised comparable functions.

b) In its current composition the Supervisory Board meets the
objectives of its diversity concept. The Supervisory Board’s
composition of women and men complies with the legal require-
ments for minimum percentages; separate compliance with
the statutory gender quota occurred from the 2018 Annual
Shareholders Meeting. The age range of the Supervisory Board
is currently 45 to 74 years. At least four members have inter-
national experience.

Corporate Governance Declaration

In addition, the Executive Committee advises the Management
Board on all issues of Group financing and investment planning.
It decides on behalf of the Supervisory Board on the approval of
the acquisition and disposition of companies, equity interests,
and parts of companies whose value exceeds €300 million but
does not exceed €600 million. Furthermore, the Management
Board must present to the Executive Committee investments if,
in the case of a fixed-asset investment of more than €300 mil-
lion, the Management Board is convinced that the approved
investment amount will be surpassed by more than 10 percent
or if the Management Board perceives that the investment is
no longer economic; that is, that it will no longer achieve its cost
of capital. Additionally, the Executive Committee decides on
behalf of the Supervisory Board on the approval of financing
measures whose value exceeds €1 billion but not €2.5 billion if
such measures are not covered by the Supervisory Board’s res-
olutions regarding finance plans. If the value of any such trans-
actions or measures exceeds the aforementioned thresholds,
the committee prepares the Supervisory Board’s decision. Finally,
the Executive Committee prepares decisions on transactions
with members of the Management Board and Supervisory Board,
represents the Company vis-à-vis the Management Board, and
is responsible for approving the assignment of task areas to
individual Management Board members and for other activities
of a Management Board member.

The Audit and Risk Committee consists of six members. The
Supervisory Board believes that, in their entirety, the members
of the Audit and Risk Committee are familiar with the sector in
which the Company operates. According to the AktG, the Audit
and Risk Committee must include one Supervisory Board mem-
ber who has expertise in accounting or auditing. The Supervisory
Board believes that in particular Andreas Schmitz fulfills this
requirement. Pursuant to the recommendations of the German
Corporate Governance Code, dated December 16, 2019, the
Chairman of the Audit and Risk Committee should have special
knowledge and experience in the application of accounting prin-
ciples and internal control processes and be familiar with the
auditing of financial statements. In addition, this person should
be independent; in others words, in particular not a former
Management Board member whose service on the Management
Board ended less than two years ago and not simultaneously
the Supervisory Board Chairman. The Supervisory Board believes
that the Chairman of the Audit and Risk Committee, Andreas
Schmitz, fulfills these requirements.

In particular, the Audit and Risk Committee deals with the audit-
ing of financial statements, the monitoring of the accounting
process, the effectiveness of risk management as well as the
independent audit and compliance. The committee’s monitoring

of risk management encompasses reviewing the effectiveness
of the internal control system, the internal risk management
system, and the internal audit system. The Audit and Risk Com-
mittee deals in particular with the audit of the financial state-
ments, the monitoring of the financial reporting process, the
effectiveness of risk management, and the audit of the financial
statements and compliance. Part of the risk management
review is the review of the effectiveness of the internal control
system, the internal risk management system and the internal
audit system. The Audit and Risk Committee deals with Internal
Audit’s activities and the definition of the audit priorities on a
regular basis.

The committee also prepares the Supervisory Board’s decision
on the approval of the Financial Statements of E.ON SE and the
Consolidated Financial Statements. It is responsible for the
preliminary review of the Financial Statements of E.ON SE, the
Management Report, the Consolidated Financial Statements,
the Combined Group Management Report and the proposal for
profit appropriation as well as—if these are not already part of
the (Combined Group) Management Report—the Separate
Non-financial Report and the Separate Combined Non-financial
Report. It discusses the half-yearly reports and quarterly state-
ments or financial reports with the Management Board prior
to their publication. The effectiveness of the internal controls
(including for the financial disclosures) at E.ON SE and the Group’s
units is tested by Internal Audit as part of a risk-oriented audit
plan. The audit of the internal controls is also part of the audit
of the Consolidated Financial Statements. The Audit and Risk
Committee may commission an external review of the contents
of the Non-financial Statement or the Separate Non-financial
Report or the Combined Non-financial Statement or the Separate
Combined Non-financial Report.

In addition, the Audit and Risk Committee prepares the proposal
on the selection of the Company’s independent auditor for
the Annual Shareholders Meeting and makes a substantiated
proposal, which in cases where the audit mandate is put out
to tender includes at least two candidates. In order to ensure the
auditor’s independence, prior to making its selection proposal,
the Audit and Risk Committee secures a statement from the
proposed auditor detailing any facts that could lead to the audit
firm being excluded for independence reasons or otherwise
conflicted. In addition, the committee deals with issues relating
to the issuance of the audit mandate to the independent auditor,
the definition of the audit priorities, and the agreement regarding
the independent auditor’s fees as well as any additional services
performed by the independent auditor. The Audit and Risk
Committee assesses the quality of the independent audit on a
regular basis.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

In being assigned the audit task, the independent auditor agrees to:

• promptly inform the Chairman of the Audit and Risk Com-

mittee should any facts arise during the course of the audit
that could lead to the audit firm being excluded for indepen-
dence reasons or otherwise conflicted, unless such facts are
resolved

The Audit and Risk Committee and Executive Committee meet
at regular intervals and when specific circumstances require it
under their rules and procedures. The Nomination Committee
and the Innovation and Sustainability Committee meet as needed.
The Report of the Supervisory Board (on pages 8 to 10) contains
information about the activities of the Supervisory Board and
its committees in the year under review.

• promptly inform the Chairman of the Audit and Risk Commit-
tee of anything it becomes aware of during the course of the
audit that is of relevance to the Supervisory Board’s duties

The Supervisory Board’s committees have the following
composition:

•

inform the Chairman of the Audit and Risk Committee, or to
note in the audit report, if the audit has led to findings that
contradict the Declaration of Compliance with the German
Corporate Governance Code issued by the Management
Board and the Supervisory Board.

The Audit and Risk Committee decides on the approval of related-
party transactions and deals with the internal procedure for
assessing market conformity and the execution of related-party
transactions in the ordinary course of business.

The Innovation and Sustainability Committee consists of six
members. It advises the Management Board on all innovation
issues and growth opportunities. The focus is on opportunities
that could deliver significant growth in sales and profit within
the foreseeable future. These types of opportunities could range
from new business models, markets, products, and services to
innovative solutions that tangibly improve the customer experi-
ence, employees’ daily work, or processes. The Innovation and
Sustainability Committee advises the Management Board on
E.ON’s digital transformation with the aim of making the Com-
pany more automated, leaner, and more data-driven. The com-
mittee also addresses issues relating to E.ON’s HR agenda that
help employees adopt a growth and innovation mentality, such
as engagement, capabilities, work methods of the future, and
cultural change. In addition, the committee advises the Supervi-
sory Board and the Management Board on environmental, social,
governance (“ESG”), and sustainability issues.

The Nomination Committee consists of three shareholder rep-
resentative members. Its Chairman is the Chairman of the Super-
visory Board. Its task is to recommend to the Supervisory Board,
taking into consideration the Supervisory Board’s targets for its
composition, suitable candidates for election to the Supervisory
Board by the Annual Shareholders Meeting.

Executive Committee
Dr. Karl-Ludwig Kley, Chairman
Christoph Schmitz, Deputy Chairman
(since May 28, 2020)
Andreas Scheidt, Deputy Chairman
(until May 28, 2020)
Erich Clementi
Ulrich Grillo
Fred Schulz
Albert Zettl

Audit and Risk Committee
Andreas Schmitz, Chairman
Fred Schulz, Deputy Chairman
Carolina Dybeck Happe (until December 31, 2020)
Ulrich Grillo (since January 1, 2021)
René Pöhls
Elisabeth Wallbaum
Deborah Wilkens

Innovations and Sustainability Committee
Dr. Karen de Segundo, Chairwoman
Stefan May, Deputy Chairman
Clive Broutta (until January 31, 2020)
Klaus Fröhlich
Monika Krebber (since February 5, 2020)
Eugen-Gheorghe Luha
Ewald Woste

Nomination Committee
Dr. Karl-Ludwig Kley, Chairman
Erich Clementi, Deputy Chairman
Dr. Karen de Segundo

Corporate Governance Declaration

Report on the Supervisory Board’s Self-evaluation
In the year under review, the Supervisory Board conducted a
regularly scheduled self-assessment (efficiency review) of the
Supervisory Board’s work. An online questionnaire provided the
Supervisory Board members with the opportunity to evaluate
the efficiency of the Supervisory Board’s work and to make
suggestions for improving it. The findings were used to design
specific measures to improve the Supervisory Board’s work,
which are being implemented on an ongoing basis. They relate
primarily to the Supervisory Board devoting more attention to
the assessment and ex post analysis of investment decisions and
the analysis of industry-specific technology trends.

Shareholders and Annual Shareholders Meeting

E.ON SE shareholders exercise their rights and vote their shares
at the Annual Shareholders Meeting. The convening of the
Annual Shareholders Meeting and the reports and documents
required by law for the Annual Shareholders Meeting, including
the Annual Report, are published on the Company’s Internet
page together with the agenda and the explanation of the con-
ditions of participation, shareholders’ rights, and any counter-
motions and election proposals submitted by shareholders. The
Company’s financial calendar, which is published in the Annual
Report, in the quarterly statements or financial reports, and on
the Internet at www.eon.com, regularly informs shareholders
about important Company dates.

At the Annual Shareholders Meeting, shareholders may vote
their shares themselves, through a proxy of their choice, or
through a Company proxy who is required to follow the share-
holder’s voting instructions.

Due to the Covid-19 pandemic, the 2020 E.ON SE Annual Share-
holders Meeting was not held as an in-person event in order to
protect the Company’s shareholders and employees. Instead,
pursuant to the rules of the AktG it was held as a virtual Annual
Shareholders Meeting without the physical participation of
shareholders or their proxies.

As stipulated by German law, the Annual Shareholders Meeting
votes to select the Company’s independent auditor.

The EU Regulation on Statutory Audit introduced an obligation
for the statutory auditor and/or firm to be rotated periodically.
Such a rotation will be carried out for the 2021 financial year.
After the conclusion of the legally mandated multistage review
process and on the basis of the Audit and Risk Committee’s rec-
ommendation, the Supervisory Board recommended to the 2020

Annual Shareholders Meeting to appoint Pricewaterhouse-
Coopers GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, to
be independent auditor and Group independent auditor for the
2020 financial year and to audit the Condensed Consolidated
Interim Financial Statements and Interim Group Management
Reports for the 2020 financial year and to appoint KPMG AG
Wirtschaftsprüfungsgesellschaft to be independent auditor and
to audit the Condensed Consolidated Interim Financial State-
ments and Interim Group Management Report for the first quar-
ter of 2021. The Supervisory Board intends to recommend to
the 2021 Annual Shareholders Meeting to appoint KPMG AG
Wirtschaftsprüfungsgesellschaft to be independent auditor and
Group independent auditor and to audit the Condensed Consol-
idated Interim Financial Statements and Interim Group Manage-
ment Reports for the 2021 financial year and the first quarter of
the 2022 financial year.

At the Annual Shareholders Meeting on May 28, 2020, Price-
waterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft,
was selected to be E.ON SE’s independent auditor for the 2020
financial year and to audit the Condensed Consolidated Interim
Financial Statements and Interim Group Management Reports
for the 2020 financial year. The independent auditors with sign-
ing authority for the Annual Financial Statements of E.ON SE and
the Consolidated Financial Statements are Markus Dittmann
(since the 2014 financial year) and Aissata Touré (since the 2015
financial year). In accordance with the recommendation, KPMG
AG Wirtschaftsprüfungsgesellschaft, Düsseldorf, was selected
to audit the Condensed Consolidated Interim Financial Statements
for the first quarter of the 2021 financial year.

Women and Men in Leadership Positions
Pursuant to Section 76, Paragraph 4, and
Section 111, Paragraph 5, of the German
Stock Corporation Act

In the year under review, the Management Board consisted of
five men. In December 2016 the Supervisory Board set a new
target of 20 percent for the proportion of women on the Man-
agement Board and a deadline of December 31, 2021, for imple-
mentation. This target will be met from April 1, 2021, onward.
Due to Dr. Teyssen’s departure from the Management Board, the
Supervisory Board adopted a resolution to appoint, conditionally,
Dr. Victoria Ossadnik as a new Management Board member
effective the conclusion of April 1, 2021. From April 2021
onward, the Board of Management will therefore consist of
four men and one woman.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

• Attention shall be paid to diversity when appointing mem-
bers of the Management Board. For the Supervisory Board,
diversity means, in particular, different complementary
academic profiles, professional and personal experience,
personalities, as well as internationality and a reasonable age
and gender structure. The Supervisory Board has therefore
adopted a target quota of 20 percent for the share of women
on the Management Board; this target shall be achieved by
December 31, 2021.

• The appointment period of a member of the Management
Board shall end, at the latest, at the end of the month on
which the Management Board member reaches the general
retirement age.

Achievement of Objectives
With the exception of the target quota regarding the share
of women, which is to be achieved by December 31, 2021, the
composition of the Management Board already meets the
appointment objectives described above. From the appointment
of Dr. Victoria Ossadnik effective April 1, 2021, onward, all of
the above-described appointment objectives will be met.

Long-term Succession Plan
In consultation with the Executive Committee and the Manage-
ment Board, the Supervisory Board is in charge of long-term
succession planning for the Management Board. Appointment
decisions are made on the basis of specific requirement profiles
for Management Board members.

In addition to its own experience, the Supervisory Board draws
on the expertise of outside consultants to ensure that the Com-
pany’s succession planning is appropriate and creates value.

The Supervisory Board is informed on a regular basis (once a
year) by the Management Board on the progress in talent iden-
tification and development as well as succession planning for
top executives on the basis of the qualifications required for
business success and the continually evolving personnel develop-
ment processes. It discusses the respective status accordingly.

In May 2017 the Management Board set a new target of 30 per-
cent for the proportion of women in the first level of manage-
ment below the Management Board and a target of 35 percent
for the second level of management below the Management
Board. The deadline for achieving both targets is June 30, 2022.
At year-end 2020, the proportion of women in first and second
levels of management below the Management Board was
34.6 percent and 26.7 percent, respectively.

For all other E.ON Group companies concerned, targets and
deadlines pursuant to the Law for the Equal Participation of
Women and Men in Leadership Positions in the Private Sector
and the Public Sector were set for the proportion of women on
these companies’ supervisory board and management board or
team of managing directors as well as in the next two levels of
management. As a rule, the deadline for achieving these targets
is June 30, 2022.

Diversity Concept and Long-term Succession
Plan for the Management Board

At its meeting in December 2017 the E.ON SE Supervisory
Board adopted a resolution on the following succession planning/
diversity concept for the Management Board:

With regard to the Management Board’s composition, the
Supervisory Board of E.ON SE has developed a diversity concept
that considers the recommendations of the German Corporate
Governance Code.

Diversity Concept
The diversity concept consists of the following items:

• When appointing members of the Management Board, the
candidates’ outstanding professional qualifications, long-
term leadership experience and past performance, as well as
value- driven management shall be of paramount importance.
Members shall be capable of taking forward-looking strate-
gic decisions. In particular, they shall be capable of managing
businesses sustainably and of ensuring that they are consis-
tently focused on customer needs.

• The Management Board as a whole must have expertise and
experience in the energy sector as well as in the fields of
finance and digitization.

• The members of the Management Board shall be leaders
and as such shall act as role models for the employees
through their own performance and conduct.

Compensation Report

This compensation report describes the basic features of the
compensation plans for members of the E.ON SE Management
Board and Supervisory Board and provides information about
the compensation granted and paid in 2020. It applies the pro-
visions of accounting standards for capital-market-oriented
companies (the German Commercial Code, German Accounting
Standards, and International Financial Reporting Standards)
and the recommendations of the German Corporate Governance
Code dated December 16, 2019. For the purpose of transparent
presentation in the interests of corporate governance, the indi-
vidualized disclosure of compensation will continue to be based
on the model tables of the German Corporate Governance Code
dated February 7, 2017. In accordance with the transitional pro-
vision of Section 26j, Paragraph 2, of the Introductory Act to the
German Stock Corporation Act (“EGAktG”), a compensation report
will be prepared for the first time for the 2021 financial year in
accordance with the requirements introduced in Section 162
of the German Stock Corporation Act (“AktG”) as part of the Act
Implementing the Second Shareholders’ Rights Directive
(“ARUG II”).

Basic Features of the Management Board
Compensation Plan

The Management Board compensation plan that took effect on
January 1, 2017, is supposed to create an incentive for success-
ful and sustainable corporate governance and to link the com-
pensation of Management Board members with the Company’s
short-term and long-term performance while also factoring in
their individual performance. The plan’s parameters are there-
fore transparent, performance-based, and aligned with the
Company’s business success; variable compensation is based
predominantly on multi-year metrics. In order to align manage-
ment’s and shareholders’ interests and objectives, long-term
variable compensation is based not only on the development of
E.ON’s stock price in absolute terms but also on a comparison
with competitors. Share ownership guidelines further strengthen
E.ON’s capital-market orientation and shareholder culture.

on a regular basis and, if necessary, makes adjustments. It con-
siders the provisions of the German Stock Corporation Act and
follows the German Corporate Governance Code’s recommen-
dations. In its review of the compensation plan’s market confor-
mity and the appropriateness of compensation levels, the
Supervisory Board was supported by an external compensation
expert. For the review of appropriateness of the compensation
levels of Management Board members in a market comparison
(horizontal comparison), the peer group includes the companies
listed in the DAX.

The compensation plan that took effect on January 1, 2017,
was presented to the 2016 Annual Shareholders Meeting and
approved by a majority of 91.14 percent.

In view of the regulatory changes resulting from the Act on the
Implementation of the Second Shareholder Rights Directive
(“ARUG II”) and the new version of the German Corporate Gover-
nance Code, which took effect on March 20, 2020, the Super-
visory Board reviewed and revised the Management Board’s
current compensation plan. The Supervisory Board will submit
the revised compensation plan to the 2021 Annual Sharehold-
ers Meeting for approval. It will be explained in detail in the invi-
tation to the 2021 Annual Shareholders Meeting and is to come
into force for all Management Board members effective Janu-
ary 1, 2022.

Dr.-Ing. Birnbaum was appointed Chairman of the innogy SE
Management Board effective October 11, 2019. This appoint-
ment ended with the entry of the transfer resolution and the
merger of innogy SE into E.ON Verwaltungs SE into the Commer-
cial Register on June 2, 2020. During his tenure at innogy SE,
Dr.-Ing. Birnbaum also remained, as in the prior year, as Chief
Operating Officer—Integration a member of the E.ON SE Manage-
ment Board and therefore had a dual mandate within the mean-
ing of Section 88, Paragraph 1, Sentence 2 of the German Stock
Corporation Act (see pages 92 and 93 for details). The compen-
sation modalities that apply to Dr.-Ing. Birnbaum due to his dual
mandate are explained in detail in the section entitled “Total
Compensation in 2020” on page 92.

The Supervisory Board approves the Executive Committee’s
proposal for the Management Board’s compensation plan.
It reviews the plan and the appropriateness of the Management
Board’s total compensation as well as the individual components

The following table provides a summary overview of the indi-
vidual components of the Management Board’s compensation
as well as their respective metrics and parameters:

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Summary Overview of Compensation Components1

Compensation component

Metric/Parameter

Non-performance-based
compensation

Base salary

• Management Board Chairman: €1,240,000
• Management Board members: €700,000–€800,000

Fringe benefits

Chauffeur-driven company car, telecommunications equipment, insurance premiums, medical examination

Performance-based compensation

Annual bonus

• Target bonus (target amount of the bonus at 100 percent target attainment):

– Target amount for Management Board Chairman: €1,417,500
– Target amount for Management Board members: €675,000–€825,000

• Cap: 200 percent of target bonus
• Amount of bonus depends on:

– Company performance: actual earnings per share (“EPS”) versus budget
– Individual performance factor: collective performance and individual performance

(up/down or “bonus/malus adjustment”)

• Annual bonus corresponds to 45 percent of performance-based compensation

Possibility of special
compensation

May be awarded, at the Supervisory Board’s discretion, for outstanding achievements as part of the annual bonus
as long as the total bonus remains under the cap

Long-term variable compensation:
E.ON Share Matching Plan (granted
until 2016)

• Granting of virtual shares of E.ON stock with a four-year vesting period

– Target amount for Management Board Chairman: €1,260,000 (excluding LTI components from annual bonuses)
– Target amount for Management Board members: €600,000–€733,333 (excluding LTI components from annual

bonuses)

• Cap: 200 percent of the target amount
•

Number of virtual shares: 1/3 from the annual bonus (LTI component) + base matching (1:1) + performance
matching (1:0 to 1:2) depending on ROCE during the vesting period
Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
on the dividend payments during the four-year vesting period

•

Long-term variable compensation:
E.ON Performance Plan
(granted from 2017)

Pension benefits

Final-salary-based benefits2

Contribution-based benefits

Other compensation provisions

Share Ownership Guidelines

• Granting of virtual shares of E.ON stock with a four-year vesting period

– Target amount for Management Board Chairman: €1,732,500
– Target amount for Management Board members: €825,000–€1,008,333
Final number of virtual shares depends on E.ON stock’s TSR relative to the TSR of companies in the STOXX®
Europe 600 Utilities index; ¼ of TSR performance is locked in annually

•

• Allocation limit; that is, the maximum number of virtual shares: 150 percent
•

Value development depends on the 60-day average price of E.ON stock price at the end of the vesting period and
on the dividend payments during the four-year vesting period

• Cap: 200 percent of the target amount
•

Annual target amount corresponds to 55 percent of performance-based compensation

• Lifelong pension payment equaling a maximum of 75 percent of fixed compensation from the age of 60
•

Pension payments for widows and children equaling 60 percent and 15 percent, respectively, of pension entitlement

• Virtual contributions equaling a maximum of 21 percent of fixed compensation and target bonus
• Virtual contributions capitalized using interest rate based on long-term German treasury notes
• Payment of pension account balance from age 62 as a lifelong pension, in installments, or in a lump sum

• Obligation to buy and hold E.ON stock until the end of service on the Management Board
•

Investment in E.ON stock equaling a percentage of base compensation:
– 200 percent (Management Board Chairperson)
– 150 percent (other Management Board members)
Until the required investment is reached, obligation to invest net payouts from long-term compensation in E.ON stock

•

Settlement cap

Maximum of two years’ total compensation or the total compensation for the remainder of the service agreement

Settlement for change-of-control

Settlement equal to two target salaries (base compensation, target bonus, and fringe benefits),
reduced by up to 20 percent

Non-compete clause

Clawback rule

For six months after termination of service agreement, prorated compensation equal to base compensation and
target bonus, at a minimum 60 percent of most recently received compensation

The Supervisory Board’s right pursuant to Section 87, Paragraph 2 of the German Stock Corporation Act to reduce
compensation if the Company’s situation deteriorates

1Deviating compensation modalities apply to Dr.-Ing. Birnbaum for this time period due to his dual mandate, which existed until June 1, 2020. They are described in the section “Total Compensation
in 2020.”
2Only applies to Dr. Johannes Teyssen.

Compensation Report

Components and Compensation Structure

Non-Performance-Based Compensation

The compensation of Management Board members consists
of a fixed base salary, an annual bonus, and long-term variable
compensation. The components account for the following
percentages of target compensation (that is, compensation in
the case of 100 percent target attainment):1

No revisions were made to non-performance-based compensa-
tion relative to the previous financial year.

Management Board members receive their fixed compensation
in twelve monthly payments.

Management Board members receive a number of contractual
fringe benefits, including the use of a chauffeur-driven company
car. The Company also provides them with the necessary tele-
communications equipment, covers costs that include those for
a periodic medical examination, and pays the premium for an
accident insurance policy.

Performance-Based Compensation

Likewise, no revisions were made to performance-based com-
pensation relative to the previous financial year.

55 percent of performance-based compensation depends on
the attainment of long-term targets, ensuring that the variable
compensation is sustainable under the criteria of Section 87 of
the German Stock Corporation Act.

Annual Bonus

Management Board members’ annual bonus (45 percent of the
performance-based compensation) consists of a cash payment
made after the end of the financial year.

The amount of the annual bonus is determined by the degree
to which certain performance targets are attained. The target-
setting mechanism consists of company performance targets
and individual performance targets.

30%
Base salary

31%
Bonus
(annual)

39%
E.ON Performance
Plan (multi-year)

1Not including fringe, other, and pension benefits.

The following graphic provides an overview of the compensation
plan for Management Board members:

Variable compensation
(~ 70%)

E.ON Performance Plan
(LTI)—stock-based

55%

Depends on:
TSR performance
relative to
peer companies

Granting
of virtual
shares (with
performance
requirement)

Bonus (STI)

45%

Depends on:
EPS versus budget
Individual
performance

Paid out after
the conclusion
of the financial
year

Non-performance-
based compensation
(~ 30%)

Base salary

Share ownership guidelines

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Bonus
(Target
amount)

Company Performance
0–200%

• Actual EPS vs. budget:

Target attainment

200%

150%

100%

50%

-37.5% Budget +37.5% EPS

Individual Performance Factor
50–150%

Assessment of Management Board
member’s performance based on:

• Management Board’s
overall performance

• Individual performance

(bonus/malus adjustment)

Bonus
Capped at 200% of
the target amount

100%
Paid out in cash

The company performance is assessed on the basis of earnings
per share (“EPS”), E.ON’s key performance indicator. EPS used
for this purpose is derived from adjusted net income as disclosed
in the Annual Report. The EPS target for each year is set by the
Supervisory Board, taking into account the approved budget.
Because the budget is derived from the Company’s corporate
strategy, no specific target figures are disclosed ex ante for
competitive reasons. The target is fully achieved if actual EPS is
equal to the target. If actual EPS is 37.5 percent or more below
the target, this constitutes zero percent attainment. If actual
EPS is 37.5 percent or more above the target, this constitutes
200 percent attainment. Linear interpolation is used to trans-
late intermediate EPS figures into percentages.

The Supervisory Board determines the degree to which Man-
agement Board members have attained the targets of their indi-
vidual performance factors, giving adequate consideration to
their individual and collective contributions. The factors range
between 50 and 150 percent. The amount of the bonus can
therefore be adjusted up or down depending on performance
(in the sense of a “bonus/malus adjustment”).

The targets for individual performance factors are set at the
beginning of each financial year. No specific target figures are
disclosed ex ante for competitive reasons. The Supervisory
Board may also factor in, for example, strategic targets, quanti-
tative and qualitative customer targets as well as performance
indicators for the Company’s core businesses or matters such
as health, safety, and environment and personnel management.

In addition, the Supervisory Board may, as part of the annual
bonus, grant Management Board members special compensation
for outstanding attainments. In assigning Management Board
members their individual performance factors and in granting
special compensation, the Supervisory Board pays attention to
the criteria of Section 87 of the German Stock Corporation Act
and of the German Corporate Governance Code.

As before, the maximum bonus that can be attained (including any
special compensation) is 200 percent of the target bonus (cap).

Compensation Report

Long-Term Variable Compensation

In the 2020 financial year, long-term variable compensation
consisted of tranches from several financial years granted under
two different plans. First, tranches of the E.ON Performance
Plan—Performance Plan, first tranche (2017–2020), second
tranche (2018–2021), third tranche (2019–2022), and fourth
tranche (2020–2023)—were granted in 2017, 2018, 2019,
and 2020. The vesting period of the first tranche of the E.ON
Performance Plan ended at the close of the 2020 financial year.
Payment will be made in April 2021. Second, the last tranches
of the E.ON Share Matching Plan—Share Matching Plan, fourth
tranche (2016–2020) and the LTI components of the bonus from
2016 Share Matching Plan, fifth tranche (2017–2021)—were
granted in 2016. The vesting period of the fourth tranche of the
E.ON Share Matching Plan ended in March 2020. Payment was
made in April 2020.

E.ON Performance Plan (Granted from 2017)

Management Board members receive stock-based, long-term
variable compensation under the E.ON Performance Plan, which
replaced the previous E.ON Share Matching Plan as the Compa-
ny’s new long-term compensation plan effective January 1, 2017.
Each tranche of the E.ON Performance Plan has a vesting period
of four years to serve as a long-term incentive for sustainable
business performance. Vesting periods start on January 1.

The Supervisory Board grants virtual shares to each member
of the Management Board in the amount of the contractually
agreed-on target amount. The conversion into virtual shares is

based on the fair market value on the date when the shares are
granted. The fair market value is determined by applying methods
accepted in financial mathematics, taking into account the
expected future payout, and hence, the volatility and risk asso-
ciated with the E.ON Performance Plan. The number of granted
virtual shares may change in the course of the four-year vesting
period depending on the total shareholder return (“TSR”) of
E.ON stock compared with the TSR of the companies in a peer
group (“relative TSR”).

TSR is the yield of E.ON stock. It takes into account the stock
price, including the assumption that dividends are reinvested,
and is adjusted to exclude changes in capital. The peer group
used for relative TSR will be the companies in E.ON’s peer index,
the STOXX® Europe 600 Utilities.

During a tranche’s vesting period, E.ON’s TSR performance is
measured once a year in comparison with the companies in the
peer group and set for that year. E.ON SE’s TSR performance
in a given year determines the final number of one fourth of the
virtual shares granted at the beginning of the vesting period.
For this purpose, the TSRs of all companies are ranked, and
E.ON SE’s relative position is determined based on the percentile
reached. Target attainment is 100 percent if E.ON SE’s TSR is
equal to the median of the peer group. The lower threshold is the
25th percentile; a TSR performance below this threshold would
reduce the number of virtual shares granted by one quarter. If
E.ON’s performance is at or above the 75th percentile (upper cap),
the quarter of virtual shares granted for that particular year
increases to a maximum of 150 percent. Linear interpolation is
used to translate intermediate figures into percentage.

Initial Number
of Virtual Shares
Granted

TSR Performance Relative to
Peer Group
TSR of E.ON stock compared with the companies
of the STOXX® Europe 600 Utilities index (annual lock-in)

Target attainment

Stock Price
+
Dividends

Payout Amount
Capped at 200%
of target amount

200%

175%

150%

125%

100%

75%

50%

25%

Percentile
achieved
by E.ON

25th percentile
Lower
threshold

50th percentile
(Median)
Target amount

75th percentile
Upper
threshold

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

The resulting number of virtual shares at the end of the vesting
period is multiplied by the average price of E.ON stock in the
last 60 days prior to the end of the vesting period. This amount
is increased by the dividends distributed on E.ON stock during
the vesting period and then paid out. The sum of the payouts
is capped at 200 percent of the contractually agreed-on target
amount.

E.ON Share Matching Plan (Granted until 2016)

Until the introduction of the new compensation plan on January 1,
2017, Management Board members received stock-based com-
pensation under the E.ON Share Matching Plan. Until the begin-
ning of the 2016 financial year, the Supervisory Board decided,
based on the Executive Committee’s recommendation, on the
allocation of a respective new tranche for the current financial
year, including the respective targets and the number of virtual
shares granted to individual members of the Management Board.
To serve as a long-term incentive for sustainable business
performance, each tranche had a vesting period of four years.
The tranche started on April 1 of each year.

of their bonus. The determination of the LTI component took
into consideration the overall target attainment of the old com-
pensation plan’s bonus for the preceding financial year. The
number of virtual shares was calculated on the basis of the
amount of the LTI component and E.ON’s average stock price
during the last 60 days prior to the four-year vesting period.
Furthermore, Management Board members could receive, on the
basis of annual Supervisory Board decisions, a base matching
of additional non-vested virtual shares in addition to the virtual
shares that resulted from their LTI component. In addition,
Management Board members could, depending on the company
performance during the vesting period, receive performance
matching of up to two additional non-vested virtual shares per
share that resulted from base matching.

The arithmetical total target amount allocated at the start of
the vesting period, which began on April 1 of the year in which
a tranche was allocated, was therefore the sum of the value of
the LTI component, base matching, and performance matching
(depending on the degree of attainment of a predefined com-
pany performance target).

ROCE
4-year
average in %

Stock price
plus
dividends

€

Performance
matching

Base
matching

1/3: LTI
component

Vesting period: 4 years

Following the Supervisory Board’s decision to allocate a new
tranche, Management Board members initially received vested
virtual shares equivalent to the amount of the LTI component

For the purpose of performance matching, the company perfor-
mance metric for tranches granted from 2013 to 2015 was ini-
tially E.ON’s average ROACE during the four-year vesting period
compared with a target rate of return set in advance by the
Supervisory Board for the entire period at the time it allocated
a new tranche. Pursuant to a Supervisory Board resolution,
from the 2016 financial year onward these performance targets
were based on ROCE. In view of the Uniper spinoff, this adjust-
ment was necessary because the ROACE targets were based
on old planning figures that did not foresee the Uniper spinoff.
Furthermore, from the start of 2016, the Company no longer
used ROACE as a key performance indicator and it was therefore
no longer available. In addition, the anticipated reduction in
E.ON’s stock price resulting from the Uniper spinoff had to be
factored in by means of a conversion method.

Compensation Report

Extraordinary events are not factored into the determination
of target attainment for company performance. Depending on
the degree of target attainment for the company performance
metric, each virtual share resulting from base matching may be
matched by zero to two additional virtual shares at the end of
the vesting period. If the predetermined company performance
target is fully attained, Management Board members receive
one additional virtual share for each virtual share resulting from
base matching. Linear interpolation is used to translate inter-
mediate figures.

At the end of the vesting period, the virtual shares held by
Management Board members are assigned a cash value based
on E.ON’s average stock price during the last 60 days prior to
the end of the vesting period. To each virtual share is then added
the aggregate per-share dividend paid out during the vesting
period. This total—cash value plus dividends—is then paid out.
Payouts are capped at 200 percent of the arithmetical total
target amount.

The last complete tranche of the E.ON Share Matching Plan
(LTI components of prior-year bonus as well as base and perfor-
mance matching) was granted in the 2016 financial year and
ran through March 2020 (Share Matching Plan, fourth tranche
[2016–2020]). Because the old compensation plan was in effect
until year-end 2016, in 2017 Management Board members
were granted virtual shares based on the LTI components of their
bonuses for the 2016 financial year under the terms of the E.ON
Share Matching Plan. This tranche runs through 2021 (Share
Matching Plan, fifth tranche [2017–2021]).

Overall Cap

Management Board members’ annual compensation has an
overall cap. This means that the sum of the individual compen-
sation components in one year may not exceed 200 percent of
the total agreed-on target compensation, which consists of
base salary, target bonus, and the target amount of long-term
variable compensation. The cap increases in accordance with
the amounts of fringe benefits and company pension benefits
from the respective financial year.

Share Ownership Guidelines

To strengthen E.ON’s capital-market focus and shareholder-
oriented culture, effective 2017 share ownership guidelines
apply to Management Board members. The guidelines obligate
Management Board members to invest in E.ON stock equaling
200 percent of base compensation (for the Management Board
Chairperson) and 150 percent of base compensation (for the
other Management Board members), to demonstrate that they
have done so, and to hold the stock until the end of their service
on the Management Board.

Until the required investment is reached, Management Board
members are obligated to invest amounts equivalent to the net
payouts from their long-term compensation in actual E.ON
stock. At December 31, 2020, the Management Board fulfilled
the share ownership guidelines at a rate of 98.22 percent.

Chairperson:
200% of base
compensation

Other Management
Board members:
150% of base
compensation

Base
compensation

Pension Entitlements

Members appointed to the Management Board since 2010 are
enrolled in the “Contribution Plan E.ON Management Board,”
which is a contribution-based pension plan.

Pension account

Capital contributions

Term in years

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

The Company makes virtual contributions to Management Board
members’ pension accounts in an amount equal to a percentage
of their pensionable income (base salary and annual bonus).
The contribution percentage is at most 21 percent. The annual
contribution consists of a fixed base percentage (16 percent)
and a matching contribution (5 percent). The requirement for the
matching contribution to be granted is that the Management
Board member contributes, at a minimum, the same amount by
having it withheld from his compensation. The company-funded
matching contribution is suspended if and as long as the E.ON
Group’s ROCE is less than its cost of capital for three years in a
row. The contributions are capitalized using actuarial principles
(based on a standard retirement age of 62) and placed in Man-
agement Board members’ pension accounts. The interest rate
used for each year is based on the return of long-term German
treasury notes. At the age of 62 at the earliest, a Management
Board member (or his survivors) may choose to have the pension
account balance paid out as a lifelong pension, in installments,
or in a lump sum. Individual Management Board members’ actual
resulting pension entitlement cannot be calculated precisely in
advance. It depends on a number of uncertain parameters, in
particular the changes in their individual salary, their total years
of service, the attainment of company targets, and interest rates.
For a Management Board member enrolled in the plan at the
age of 50, the company-financed, contribution-based pension
payment is currently estimated to be between 30 and 35 percent
of his or her base salary (without factoring in pension benefits
accrued prior to being appointed to the Management Board).

The Company has agreed to a pension plan based on final salary
for the Management Board Chairman, Dr. Johannes Teyssen,
who was appointed to the Management Board before 2010.
Following the end of his service for the Company, Dr. Johannes
Teyssen is entitled to receive lifelong monthly pension payments.
Dr. Johannes Teyssen’s pension entitlements provide for annual
pension payments equal to 75 percent of his annual base salary.
The full amount of any pension entitlements from earlier employ-
ment is offset against these payments. In addition, in the case

of a Management Board member’s death, the pension plan
includes benefits for the widow and each orphan that are equal
to 60 percent and 15 percent, respectively, of the deceased’s
pension entitlement. Together, pension payments to a widow and
children may not exceed 100 percent of the deceased Manage-
ment Board member’s pension.

The vesting of Management Board members’ pension entitle-
ments (both contribution-based and final-salary-based pension
plans) is governed by the provisions of the German Occupational
Pensions Improvement Act (“BetrAVG”).

The Supervisory Board reviews, on a regular basis, the benefits
level of Management Board members and the resulting annual
and long-term expense and, if necessary, adjusts the payments.

Settlement Payments for Termination of
Management Board Duties

In line with the German Corporate Governance Code’s recom-
mendation, the service agreements of Management Board
members include a settlement cap. Under the cap, settlement
payments in conjunction with a termination of Management
Board duties may not exceed the value of two years’ total com-
pensation. In addition, no more than the remaining term of the
member’s service agreement is to be compensated.

In the event of a premature loss of a Management Board position
due to a change of control, Management Board members are
entitled to settlement payments. The change-of-control agree-
ments stipulate that a change in control exists in three cases:
a third party acquires at least 30 percent of the Company’s voting
rights, thus triggering the automatic requirement to make an
offer for the Company pursuant to Germany’s Stock Corporation
Takeover Law; the Company, as a dependent entity, concludes
a corporate agreement; the Company is merged with a non-
affiliated company. Management Board members are entitled

Compensation Report

to a settlement payment if, within 12 months of the change of
control, their service agreement is terminated by mutual consent,
expires, or is terminated by them (in the latter case, however,
only if their position on the Management Board is materially
affected by the change in control). Management Board members’
settlement payment consists of their base salary and target bonus
plus fringe benefits for two years. The settlement payments
for Management Board members may not exceed 100 percent
of the above-described settlement cap.

The service agreements of Management Board members
include a non-compete clause. For a period of six months after
the termination of their service agreement, Management Board
members are contractually prohibited from working directly
or indirectly for a company that competes directly or indirectly
with the Company or its affiliates. Management Board members
receive a compensation payment for the period of the non-
compete restriction. The prorated payment is based on 100 per-
cent of their target compensation (without long-term variable
compensation) but is, at a minimum, 60 percent of their most
recently received compensation.

Management Board Compensation in 2020

The Supervisory Board reviewed the Management Board’s
compensation plan and the components of individual members’
compensation. It determined that the Management Board’s
compensation is appropriate from both a horizontal and vertical
perspective and passed a resolution on the performance-based
compensation described below. It made its determination of
customariness from a horizontal perspective by comparing the
compensation with that of companies of a similar size. For this
purpose, the companies listed in the DAX were included in the
peer group. The Supervisory Board’s review of appropriateness
also included a vertical comparison of the Management Board’s
compensation with that of the Company’s top management and
the rest of its workforce. In the Supervisory Board’s view, in the
2020 financial year there was no reason to adjust the Manage-
ment Board members’ target compensation.

The 2020 Bonus

Based on the company performance and the individual perfor-
mance factor, the annual bonuses of Management Board mem-
bers for the 2020 financial year totaled €4.4 million (prior year:
€6.0 million).

To determine the company performance for the 2020 financial
year, actual EPS based on adjusted net income was compared
with the target value (budget) set by the Supervisory Board
before the start of the financial year. In the 2020 financial year,
E.ON’s earnings were affected by the following special situation:
due in particular to the repercussions of the Covid-19 pandemic
in conjunction with an exceptionally mild winter, electricity and
gas consumption remained below the budget. This led to lower
sales volumes in the sales business as well as lower transport
volumes in the network.

In the 2020 financial year, actual transport volumes in E.ON’s
electricity and gas networks in Germany were significantly below
the forecast values. The volume-weighted bandwidths of the
deviations between forecast values and actual values across all
of the E.ON Group’s large distribution system operators in
Germany in the past years lies in average between -1.4 percent
and +1.4 percent. However, there are no significant deviations
in the long-term volume-weighted average. The exceptionally
high volume-weighted deviation of -2.7 percent in the 2020
financial year resulted in a €220 million reduction in earnings.

Nevertheless, due to the regulatory mechanisms relevant for
E.ON the reductions in revenue caused by forecast shortfalls
(higher forecast values than actual values) in the 2020 financial
year will be almost fully offset in subsequent years. The approved
revenue caps will be earned over time regardless of the transport
volumes. Consequently, failure to correct these revenue short-
falls in the 2020 financial year related to the network business
would result in the Management Board being unjustifiably placed
in a worse position: the revenue shortfalls would lead to a lower
level of attainment of the company targets for the 2020 financial
year due to the negative deviation from plan, whereas the off-
setting additional revenues as described above would not lead to

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

a correspondingly higher level of target attainment in subsequent
years due to its budgeting. The Supervisory Board therefore
decided to take these special effects from the network business
into account when calculating and determining target attainment.
With this adjustment, target attainment for company perfor-
mance is 85 percent. This adjustment is also taken into account
when determining target attainment for employees whose com-
pany performance is determined on the basis of EPS.

In the new compensation plan submitted to the 2021 Annual
Shareholders Meeting for approval, the Supervisory Board has
provided that it can take into account corresponding effects
that remain in the network business without economic impact
for E.ON.

The revenue shortfall in the sales business will not be adjusted
and will therefore affect the 2020 bonus without restriction.
No correction is planned here in the future either.

In determining the individual performance factor, the Super-
visory Board discussed and assessed the Management Board’s
overall performance as well as the individual performance of
Management Board members on the basis of predetermined
targets.

Taking into account the company performance and the individual
performance factor set by the Supervisory Board for the 2020
financial year, total target attainment for the 2020 bonus is
102 percent.

Individual Performance Factor

2020 targets

Assessment

Individual and collective targets, particularly
regarding the following topics:

Supervisory Board’s assessment:

Integration of innogy SE

•
• Nuclear dismantling
• Growth opportunities at the network business
• Sustainability strategy

The Supervisory Board’s assessment of the efforts and successes in connection with
the full integration of innogy SE was particularly positive. The progress in nuclear
dismantling at PreussenElektra and the securing of new growth opportunities in the
network businesses represent additional extraordinarily positive aspects. The suc-
cessful development of a comprehensive sustainability strategy was also a positive
factor in the assessment of individual performance.

Target attainment

120%

Long-term Variable Compensation Allocated in
2020

The Supervisory Board issued the fourth tranche of the E.ON
Performance Plan (2020–2023) for the 2020 financial year and
granted Management Board members virtual shares of E.ON
stock.

The value performance of this tranche will be determined by the
performance of E.ON stock, per-share dividends, and TSR per-
formance relative to the companies in its peer index, the STOXX®
Europe 600 Utilities, for the years 2020 through 2023. The actual
payments made to Management Board members in 2024 may
deviate, under certain circumstances considerably, from the
calculated figures disclosed here.

Fourth Tranche of the E.ON Performance Plan (2020–2023)
The present value assigned to the virtual shares of E.ON stock
at the time of granting on January 1, 2020—€7.88 per share—is
shown in the following tables entitled “Stock-based Compen-
sation” and “Total Compensation of the Management Board.”

Compensation Report

The long-term variable compensation of Management Board
members resulted in the following expenses in 2020:

Stock-based Compensation

€

Dr. Johannes Teyssen

Dr.-Ing. Leonhard Birnbaum2

Thereof pro rata “LTI innogy” (2020–2021)3
Thereof substitute payment “LTI innogy” (2019–2021)

Dr. Thomas König

Dr. Marc Spieker

Dr. Karsten Wildberger

Total

Value of virtual shares
at time of granting

2020

2019

1,732,500

1,133,743
125,410
–

825,000

1,083,333
–
75,000

825,000

Number of virtual
shares granted

Expense (+)/Income (-)1

2020

219,861

127,962
0
–

104,696

2019

2020

2019

259,357

1,925,176

2,277,079

150,949
–
0

123,503

1,245,902
125,410
–

470,219

698,881

840,207

1,400,308
–
75,000

288,515

529,777

870,727

5,341,243

5,290,833

661,911

780,815

5,180,385

5,366,406

1Expense pursuant to IFRS 2 for performance rights and virtual shares existing in 2019 and 2020, respectively.
2Number of shares based on the third and fourth tranches, respectively, of the E.ON Performance Plan in the amount of the target amount of €1,008,333 and an IFRS 2 expense of €1,120,492.
3No figure for virtual shares disclosed because no virtual shares were granted. See the explanation regarding Dr.-Ing. Birnbaum on page 92.

Long-term variable compensation granted for the 2020 financial
year totaled €5.2 million. Note 12 to the Consolidated Financial
Statements contains additional details about stock-based
compensation.

Allocated 2020 Long-term Variable
Compensation

The fourth tranche of the E.ON Share Matching Plan granted
in 2016 ended on March 31, 2020. The payment was made in
April 2020.

Fourth Tranche of the E.ON Share Matching Plan (2016–2020)
The fourth tranche of the E.ON Share Matching Plan was cal-
culated on the basis of the attainment of the ROCE target and
the development of the stock price during the vesting period.

The performance metric of the fourth tranche of the E.ON Share
Matching Plan, Group ROCE, was considerably influenced by
the closing of the innogy SE takeover and by innogy’s entry into
E.ON SE’s scope of consolidation. The transaction’s effects could
not yet be reflected in the Group ROCE target set in 2016 for

the fourth tranche of the Share Matching Plan. To ensure that
target setting remains consistent and ambitious, the Supervisory
Board decided at its due discretion to subsequently adjust the
key figure used to determine target attainment. This means that
the unchanged ROCE target was measured against ROCE based
on E.ON’s former corporate structure prior to the transaction;
in other words, without innogy SE but with departing businesses
like E.ON Climate & Renewables and certain PreussenElektra
shareholdings. For departing businesses, the last available fore-
cast figures were used; for the other components, actual figures
at the end of the financial year.

Average ROCE determined on this basis during the four-year
vesting period was 10.2 percent. The target return for the fourth
tranche of the E.ON Share Matching Plan was 9.6 percent,
resulting in an overall target attainment of 162 percent for
company performance. In view of this target attainment, the
average price of E.ON stock in the last 60 days prior to the end
of the vesting period of €10.11, and the amount of dividends
totaling €1.57 that resulted for E.ON stock during the vesting
period, a total of €6.1 million was paid to the members of the
Management Board.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Management Board Pensions in 2020

The following table provides an overview of the current pension
obligations to Management Board members, the additions to
provisions for pensions, and the cash value of pension obligations
for the 2020 financial year. The cash value of pension obligations

is calculated pursuant to IFRS and the German Commercial
Code. An actuarial interest rate according to IFRS of 0.8 percent
(prior year: 1.3 percent) was used for discounting; the actuarial
interest rate pursuant to the German Commercial Code was
2.30 percent (prior year: 2.71 percent).

Pensions of Management Board Members Pursuant to IFRS

Current pension entitlement at December 31

Additions to provisions for pensions

Cash value at December 31

As a percentage
of annual base
compensation

In absolute terms (€)

(€)

Thereof interest cost (€)

(€)

2019

(€)

2019

Dr. Johannes Teyssen

Dr.-Ing. Leonhard Birnbaum1, 2
(E.ON SE)

Dr.-Ing. Leonhard Birnbaum3
(innogy SE)

Dr. Thomas König1

Dr. Marc Spieker1

Dr. Karsten Wildberger1

2020

–

2019

2020

2019

2020

2019

2020

2019

2020

930,000

1,276,716

1,410,074

365,816

525,001

30,808,106

28,139,682

–

357,170

245,953

24,571

29,011

2,913,120

1,890,048

–

195,667

–

195,667

287,461

213,076

250,553

209,825

314,108

277,975

35,530

16,631

15,579

44,685

3,194,925

2,733,075

17,223

1,612,838

1,279,272

14,393

1,558,531

1,198,385

1“Contribution Plan E.ON Management Board.”
2The prior-year figure for Dr.-Ing. Birnbaum refers to his passive employment relationship with E.ON SE on December 31, 2019. For 2020, the entire year is presented (including the final amount) based on his
reinstated employment with E.ON SE.
3From October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum’s innogy SE pension entitlement was borne by E.ON SE.

Pensions of Management Board Members Pursuant to the German Commercial Code

Current pension entitlement at December 31

Additions to provisions for pensions

Cash value at December 31

As a percentage
of annual base
compensation

In absolute terms (€)

(€)

Thereof interest cost (€)

Dr. Johannes Teyssen

Dr.-Ing. Leonhard Birnbaum1, 2
(E.ON SE)

Dr.-Ing. Leonhard Birnbaum3
(innogy SE)

Dr. Thomas König1

Dr. Marc Spieker1

Dr. Karsten Wildberger1

2020

–

2019

2020

2019

2020

2019

2020

2019

2020

930,000

2,098,992

564,476

597,806

689,983

24,158,256

22,059,264

–

862,044

332,111

42,778

40,010

2,440,578

1,578,534

–

172,476

–

172,476

397,348

403,263

239,670

292,176

286,769

373,061

63,517

26,884

26,533

62,291

2,741,146

2,343,798

22,465

1,231,703

19,453

1,265,855

992,033

979,086

1“Contribution Plan E.ON Management Board.”
2The prior-year figure for Dr.-Ing. Birnbaum refers to his passive employment relationship with E.ON SE on December 31, 2019. For 2020, the entire year is presented (including the final amount) based on his
reinstated employment with E.ON SE.
3Voluntary supplemental disclosure. From October 11, 2019, onward, 50 percent of the contribution to Dr.-Ing. Birnbaum’s innogy SE pension entitlement was borne by E.ON SE.

Pursuant to IFRS and the German Commercial Code, the cash
values of Management Board pensions for which provisions are
required increased as of December 31, 2020, relative to year-end
2019. This resulted in part from increases in the number of years
of service. Another reason is that the actuarial interest rate for
discounting was below the prior-year figure.

Compensation Report

Total Compensation in 2020

The total compensation of the members of the Management
Board in the 2020 financial year amounted to €14.1 million,
about 9.6 percent below the prior-year figure of €15.6 million
based on the Management Board’s total compensation disclosed
in the 2019 Annual Report.

At his own request, Dr. Teyssen’s appointment as Chairman
of the Management Board as well as his service agreement will
be terminated early, by mutual consent, effective at the close of
March 31, 2021, instead of the original term until December 31,
2021.

Compensation Modalities of
Dr.-Ing. Birnbaum’s Dual Mandate

Alongside his appointment as a member of the E.ON Manage-
ment Board and his duties as Chief Operating Officer—Integra-
tion, Dr.-Ing. Birnbaum was also appointed as Chairman of the
innogy SE Management Board from October 11, 2019 (dual
mandate within the meaning of Section 88, Paragraph 1, Sen-
tence 2 of the German Stock Corporation Act). During this period,
Dr.-Ing. Birnbaum received compensation from innogy SE only
pursuant to a newly concluded service agreement with the
company. The compensation-related clauses of his service
agreement with E.ON SE were suspended for the duration of his
service as Chairman of the innogy SE Management Board.

Due to the merger of innogy SE into E.ON Verwaltungs SE on
June 2, 2020, and the resulting expiration of his position on the
innogy SE Management Board, an amical termination of his
existing service agreement with innogy SE was agreed effective
the close of June 1, 2020 (the day before the entry of the
merger into E.ON Verwaltung SE’s commercial register). As of
June 2, 2020, the previously suspended parts of his service
agreement with E.ON SE were reinstated, and Dr.-Ing. Birnbaum
again receives his compensation exclusively from his service
agreement with E.ON SE.

In the 2020 financial year, Dr.-Ing. Birnbaum’s compensation
until the end of his service agreement with innogy SE at the
close of June 1, 2020, had the following modalities:

Dr.-Ing. Birnbaum continued to receive base compensation of
€800,000 for a full financial year.

On a pro rata basis until the end of his service agreement with
innogy SE at the close of June 1, 2020, Dr.-Ing. Birnbaum received
an innogy SE bonus with a target bonus of €1,025,000 for a full
financial year (“bonus innogy”). As a result of the reinstatement
of his suspended portions of his service agreement with E.ON SE,
Dr.-Ing. Birnbaum was granted, for the 2020 financial year on a
pro rata basis, an E.ON SE bonus with a target amount of
€825,000 for a full financial year.

In the 2020 financial year, the “bonus innogy” was based on the
attainment of collective and individual targets that were set by
the innogy SE Supervisory Board before the start of the financial
year. Target attainment of the “bonus innogy” is determined by
the Supervisory Board at its due discretion on the basis of these
targets and can be between 0 percent and 180 percent. To depict
the operating business performance of innogy SE, adjusted
EBIT and adjusted net income were defined as collective finan-
cial performance criteria and, for example, the management of
the network and sales business while achieving the economic
targets was defined as individual targets for Dr.-Ing. Birnbaum.
In addition, the Supervisory Board defined collective targets for
ensuring business continuity as well as the successful integra-
tion of innogy SE into the E.ON Group.

Dr.-Ing. Birnbaum continues to participate in the E.ON Perfor-
mance Plan, which is described on page 84. This plan was con-
tinued analogously by innogy SE—that is, based on E.ON SE’s
capital market performance—and granted with a target amount
of €1,008,333 per year.

To reflect the increase in his responsibilities and the bigger and
special challenges he faced, Dr.-Ing. Birnbaum was also granted,
proportionately until the end of his service agreement with
innogy SE at the close of June 1, 2020, long-term variable com-
pensation with a target value of €300,000 (for a full financial
year), which depends exclusively on innogy SE’s performance
(“LTI innogy”). The vesting period of the “LTI innogy” is two years.
Target attainment is determined by the Supervisory Board at
its due discretion on the basis of predefined targets and can be
between 0 percent and 200 percent. The basis for the “innogy
LTI” granted in the 2020 financial year was the management of
innogy SE as an E.ON Group company, taking into account the
interests of the other shareholders and, in this regard, in partic-
ular the planned integration into E.ON SE.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Dr.-Ing. Birnbaum’s appointment as Chairman of the innogy SE
Management Board ended on June 2, 2020. For this period, the
innogy SE Supervisory Board set a target attainment of 100 per-
cent for the “bonus innogy” and the “LTI innogy.” The payments
resulting from target attainment are calculated proportionately
for the period of his appointment and are made in accordance
with the agreed on contractual terms and conditions after the end
of the respective regular vesting period. The E.ON Performance
Plan granted to Dr.-Ing. Birnbaum in the 2020 financial year has
been taken over and continued by E.ON SE.

In addition, Dr.-Ing. Birnbaum continued to participate in the
“Contribution Plan E.ON Management Board,” a contribution-
based pension plan. This plan was suspended at E.ON SE until
Dr.-Ing. Birnbaum’s service agreement with E.ON SE took effect
again and was continued and administered by innogy SE during
this period. Dr.-Ing. Birnbaum retained his accrued entitlements
from E.ON SE. The pension entitlement vis-à-vis innogy SE
accrued by Dr.-Ing. Birnbaum during his service as Chairman of
the innogy SE Management Board was transferred to E.ON SE
after Dr.-Ing. Birnbaum’s departure from the innogy SE Manage-
ment Board pursuant to an agreement between Dr.-Ing. Birnbaum,
innogy SE, and E.ON SE.

costs consisted of the following compensation components
(in each case until the termination of the service agreement at
the close of June 1, 2020): 50 percent of base compensation;
100 percent of the payment of the tranche of the E.ON Perfor-
mance Plan granted on January 1, 2020, forward; 50 percent
of the contributions made by innogy SE to the “Contribution Plan
E.ON Management Board.”

The cost allocation for the 2020 financial year is as follows:

Cost Allocation of Dr.-Ing. Leonhard Birnbaum’s
Compensation during His Dual Mandate in the
2020 Financial Year

Percentages

Base compensation

Benefits

2020 E.ON bonus

2020 innogy bonus

E.ON Performance Plan (2020–2023)

“LTI innogy” (2020–2021)

Company pension entitlements

E.ON SE

innogy SE

–

100

–

100

–

100

–

100

–

100

For Dr.-Ing. Birnbaum’s duties as a member of the E.ON SE
Management Board for the duration of the dual mandate,
E.ON SE reimbursed innogy SE, for the costs of his duties that
are attributable to E.ON SE. Pursuant to the service agreement
between innogy SE and Dr.-Ing. Birnbaum, these reimbursed

Total Compensation of the Management Board

The individual members of the Management Board had the
following total compensation:

Total Compensation of the Management Board

Fixed annual
compensation

€

2020

2019

2020

Bonus

2019

Dr. Johannes Teyssen

1,240,000

1,445,850

1,984,500

Dr.-Ing. Leonhard Birnbaum2

Thereof innogy SE

800,000
335,556

800,000
88,406

918,209
428,484

1,137,309
241,788

Dr. Thomas König

Dr. Marc Spieker

700,000

688,500

945,000

700,000

688,500

945,000

Dr. Karsten Wildberger

700,000

688,500

945,000

Other compensation

Value of stock-based
compensation granted1

Total

2019

2020

34,684

23,101
11,698

46,233

52,699

51,010

2019

2020

2019

2020

40,791

1,732,500

4,453,034

4,997,791

27,116
4,519

1,133,743
125,4104

1,083,333
75,0003

2,875,053
901,148

3,047,758
409,713

44,264

825,000

2,259,733

2,514,264

48,607

825,000

2,266,199

2,518,607

61,983

825,000

2,264,510

2,531,983

Total

4,140,000

4,429,559

5,956,809

207,727

222,761

5,341,243

5,290,833

14,118,529

15,610,403

1The present value assigned to the virtual shares of E.ON stock at the time of granting for the fourth tranche of the E.ON Performance Plan was €7.88 per share.
2See the explanation regarding Dr.-Ing. Birnbaum on page 92.
3Dr.-Ing. Birnbaum received the substitute payment “LTI innogy” with long-term incentive effect (2019–2021) in the amount of €75,000.
4In accordance with his service agreement, Dr.-Ing. Birnbaum received “LTI innogy” with long-term incentive effect (2020–2021) in the amount of €300,000 per year. “LTI innogy” is granted on a prorated basis
corresponding with the end of the service agreement between Dr.-Ing. Birnbaum and innogy SE on June 1, 2020.

Compensation Report

For the purpose of transparent presentation in the interests of
corporate governance, the individualized disclosure of compen-
sation will, voluntarily, continue to be based on the model tables
of the German Corporate Governance Code of February 7, 2017.

The following table shows the compensation granted and
allocated in 2020 in the format recommended by the German
Corporate Governance Code:

Table of Compensation Granted and Allocated

€

Fixed compensation

Fringe benefits

Total

Dr. Johannes Teyssen
(Chairman of the Management Board and Chief Executive Officer)

Compensation granted

Compensation allocated

2019

2020

2020
(min.)

2020
(max.)1, 2

2019

2020

1,240,000

40,791

34,684

40,791

34,684

1,280,791

1,274,684

1,280,791

1,274,684

One-year variable compensation

Multi-year variable compensation

– Share Matching Plan, third tranche (2015–2019)
– Share Matching Plan, fourth tranche (2016–2020)
– Performance Plan, third tranche (2019–2022)
– Performance Plan, fourth tranche (2020–2023)

1,417,500

1,732,500
–
–
1,732,500
–

1,732,500
–
–
–
1,732,500

–

–
–
–
–
–

2,835,000

1,984,500

1,445,850

3,465,000
–
–
–
3,465,000

2,254,138
2,254,138
–
–
–

3,295,219
–
3,295,219
–
–

Total

Service cost

Total compensation

4,430,791

4,424,684

1,274,684

7,574,684

5,519,429

6,015,753

885,073

910,900

885,073

910,900

5,315,864

5,335,584

2,185,584

8,485,584

6,404,502

6,926,653

1The maximum amount disclosed under compensation granted represents the sum of the contractual (individual) caps for the various elements of the compensation of Management Board members.
2The overall cap on Management Board compensation, which was introduced in the 2013 financial year and is described on page 86, applies as well.

Table of Compensation Granted and Allocated

€

Fixed compensation

Thereof innogy SE3

Fringe benefits

Thereof innogy SE3

Total

Dr.-Ing. Leonhard Birnbaum
(Member of the Management Board and Chief Operating Office—Integration)

Compensation granted

Compensation allocated

2019

2020

800,000
88,406

27,116
4,519

800,000
335,556

23,101
11,698

2020
(min.)

800,000
335,556

23,101
11,698

2020
(max.)1, 2

800,000
335,556

23,101
11,698

2019

2020

800,000
88,406

27,116
4,519

800,000
335,556

23,101
11,698

827,116

823,101

827,116

823,101

One-year variable compensation4

Thereof innogy SE4, 5

Multi-year variable compensation

– Share Matching Plan, third tranche (2015–2019)
– Share Matching Plan, fourth tranche (2016–2020)
– Performance Plan, third tranche (2019–2022)
– Substitute payment “LTI innogy” (2019–2021)3
– Performance Plan, fourth tranche (2020–2023)6
– “LTI innogy” (2020–2021)3

869,932
230,274

1,083,333
–
–
1,008,333
75,000
–
–

908,607
428,484

1,133,743
–
–
–
–
1,008,333
125,410

–
–

–
–
–
–
–
–
–

1,731,517
771,271

2,267,486
–
–
–
–
2,016,666
250,820

1,137,309
241,788

1,387,150
1,312,150
–
–
75,000
–
–

918,209
428,484

1,917,882
–
1,917,882
–
–
–
–

Total

Service cost

Thereof innogy SE3, 7

Total compensation

2,780,381

2,865,451

823,101

4,822,104

3,351,575

3,659,192

412,609
195,667

332,599
–

412,609
195,667

332,599
–

3,192,990

3,198,050

1,155,700

5,154,703

3,764,184

3,991,791

1, 2See the footnotes on page 94.
3See the explanation regarding Dr.-Ing. Birnbaum on page 92.
4The maximum innogy cap is 180 percent; the maximum E.ON cap is 200 percent.
5In 2019: from October 11 to December 31, 2019; in 2020: from January 1 to June 1, 2020.
6Granted initially by E.ON SE and transferred, with debt-discharging effect, to E.ON SE effective the end of the employee relationship with innogy SE.
7For October 11, 2019, to June 1, 2020, 50 percent of the contribution to Dr.-Ing. Birnbaum’s innogy SE pension entitlement were borne by E.ON SE.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Table of Compensation Granted and Allocated

€

Fixed compensation

Fringe benefits

Total

Dr. Thomas König
(Member of the Management Board and Chief Operating Officer—Networks)

Compensation granted

Compensation allocated

2019

2020

2020
(min.)

2020
(max.)1, 2

2019

2020

700,000

44,264

46,233

44,264

46,233

744,264

746,233

744,264

746,233

One-year variable compensation

Multi-year variable compensation

675,000

825,000
–
–
825,000
–

825,000
–
–
–
825,000

–

–
–
–
–
–

1,350,000

945,000

688,500

1,650,000
–
–
–
1,650,000

–
–
–
–
–

Total

Service cost

Total compensation

1, 2See the footnotes on page 94.

Table of Compensation Granted and Allocated

€

Fixed compensation

Fringe benefits

Total

2,244,264

2,246,233

746,233

3,746,233

1,689,264

1,434,733

168,391

251,931

168,391

251,931

2,412,655

2,498,164

998,164

3,998,164

1,857,655

1,686,664

Dr. Marc Spieker
(Member of the Management Board and Chief Financial Officer)

Compensation granted

Compensation allocated

2019

2020

2020
(min.)

2020
(max.)1, 2

2019

2020

700,000

48,607

52,699

48,607

52,699

748,607

752,699

748,607

752,699

One-year variable compensation

Multi-year variable compensation

675,000

825,000
–
–
825,000
–

825,000
–
–
–
825,000

–

–
–
–
–
–

1,350,000

945,000

688,500

1,650,000
–
–
–
1,650,000

–
–
–
–
–

Total

Service cost

Total compensation

1, 2See the footnotes on page 94.

2,248,607

2,252,699

752,699

3,752,699

1,693,607

1,441,199

192,602

233,922

192,602

233,922

2,441,209

2,486,621

986,621

3,986,621

1,886,209

1,675,121

Compensation Report

Table of Compensation Granted and Allocated

€

Fixed compensation

Fringe benefits

Total

Dr. Karsten Wildberger
(Member of the Management Board and Chief Operating Officer—Commercial)

Compensation granted

Compensation allocated

2019

2020

2020
(min.)

2020
(max.)1, 2

2019

2020

700,000

61,983

51,010

61,983

51,010

761,983

751,010

761,983

751,010

One-year variable compensation

Multi-year variable compensation

675,000

825,000
–
–
825,000
–

825,000
–
–
–
825,000

–

–
–
–
–
–

1,350,000

945,000

688,500

1,650,000
–
–
–
1,650,000

–
–
–
–
–

896,214
–
896,214
–
–

Total

Service cost

Total compensation

1, 2See the footnotes on page 94.

2,261,983

2,251,010

751,010

3,751,010

1,706,983

2,335,724

263,582

298,529

263,582

298,529

2,525,565

2,549,539

1,049,539

4,049,539

1,970,565

2,634,253

As in the prior year, E.ON SE and its subsidiaries granted no
loans to, made no advance payments to, nor entered into any
contingencies on behalf of the members of the Management
Board in the 2020 financial year. Page 250 contains additional
information about the members of the Management Board.

Payments Made to Former Members of the
Management Board

Total payments made to former Management Board members
and to their beneficiaries amounted to €12.8 million (prior
year: €10.8 million). Provisions of €166.8 million (prior year:
€161.3 million)—pursuant to IFRS—have been provided for
pension obligations to former Management Board members
and their beneficiaries.

Compensation System for the Supervisory
Board

The compensation of Supervisory Board members is deter-
mined by the Annual Shareholders Meeting and governed by
Section 15 of the Company’s Articles of Association. The pur-
pose of the compensation system is to enhance the Supervisory
Board’s independence for its oversight role. Furthermore, there
are a number of duties that Supervisory Board members must
perform irrespective of the Company’s financial performance.
Supervisory Board members—in addition to being reimbursed
for their expenses—therefore receive fixed compensation and
compensation for committee duties.

The Chairman of the Supervisory Board receives fixed compen-
sation of €440,000; the Deputy Chairmen, €320,000. The
other members of the Supervisory Board receive compensation

of €140,000. The Chairman of the Audit and Risk Committee
receives an additional €180,000; the members of the Audit and
Risk Committee, an additional €110,000. Other committee
chairmen receive an additional €140,000; committee members,
an additional €70,000. Members serving on more than one com-
mittee receive the highest applicable committee compensation
only. In contradistinction to the compensation just described,
the Chairman and the Deputy Chairmen of the Supervisory Board
receive no additional compensation for their committee duties.
In addition, Supervisory Board members are paid an attendance
fee of €1,000 per day for meetings of the Supervisory Board
or its committees. Individuals who were members of the Super-
visory Board or any of its committees for less than an entire
financial year receive pro rata compensation.

Supervisory Board Compensation in 2020

The total compensation of the members of the Supervisory Board
in the 2020 financial year amounted to €5.3 million (prior year:
€4.3 million). The main reason for the increase in total compen-
sation relative to the 2019 financial year is that the Annual
Shareholders Meeting passed a resolution on May 14, 2019, to
increase, owing to the acquisition of a majority stake in innogy SE,
the size of the E.ON SE Supervisory Board by six members to a
total of 20 members during the course of the year. Consequently,
the newly appointed Supervisory Board members served for a
full year for the first time in the 2020 financial year. In addition,
the work of the Supervisory Board was, on balance, once again
intensified. As in the prior year, no loans or advance payments
were granted to Supervisory Board members by the Company.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

Supervisory Board Compensation

Supervisory Board
compensation

Compensation for
committee duties

Attendance fees

Supervisory Board
compensation from
affiliated companies

€

2020

2019

2020

2019

2020

2019

2020

2019

2020

Total

2019

Dr. Karl-Ludwig Kley

440,000

Erich Clementi

320,000

Andreas Scheidt
(until May 28, 2020)

Christoph Schmitz
(since February 1, 2020;
Deputy Chairman
since May 28, 2020)

Clive Broutta
(until January 31, 2020)

133,333

320,000

248,333

–

15,000

12,000

17,000

14,000

8,000

13,000

–

10,000

–

11,667

140,000

5,833

70,000

–

Klaus Fröhlich

140,000

70,000

9,000

Ulrich Grillo
(since October 1, 2019)

140,000

35,000

70,000

17,500

14,000

Carolina Dybeck Happe

140,000

110,000

9,000

Monika Krebber (since
September 24, 2019)

140,000

46,667

64,167

–

Eugen-Gheorghe Luha

140,000

70,000

Szilvia Pinczésné Márton

140,000

–

9,000

5,000

8,000

3,000

9,000

2,000

8,000

6,000

–

455,000

452,000

337,000

334,000

–

141,333

333,000

–

258,333

–

17,500

218,000

219,000

218,000

998

224,000

56,498

–

259,000

60,250

32,548

273,417

81,215

–

219,000

218,000

145,000

146,000

Stefan May (since
September 24, 2019)

Miroslav Pelouch
(since May 28, 2020)

René Pöhls (since
September 24, 2019)

140,000

46,667

70,000

17,500

7,000

2,000

63,583

29,962

280,583

96,129

93,333

–

3,000

–

96,333

–

140,000

46,667

110,000

27,500

10,000

3,000

89,927

42,448

349,927

119,615

Andreas Schmitz

140,000

180,000

14,000

Dr. Rolf Martin Schmitz
(since October 1, 2019)

140,000

35,000

–

5,000

2,000

–

334,000

–

145,000

37,000

Fred Schulz

140,000

110,000

19,000

16,000

23,993

17,856

292,993

283,856

Dr. Karen de Segundo

140,000

8,000

Elisabeth Wallbaum

140,000

110,000

10,000

140,000

35,000

110,000

27,500

11,000

140,000

70,000

9,000

8,000

9,000

3,000

8,000

–

288,000

260,000

259,000

1,164

261,000

66,664

15,000

23,000

234,000

241,000

140,000

70,000

16,000

13,000

23,800

20,000

249,800

243,000

3,486,667

2,865,001

1,360,000

1,090,000

217,000

161,000

276,553

167,976

5,340,220

4,283,977

Deborah Wilkens
(since October 1, 2019)

Ewald Woste

Albert Zettl

Total

Other

The Company has taken out D&O insurance for Management
Board and Supervisory Board members. In accordance with
the German Stock Corporation Act, this insurance includes
a deductible of 10 percent of the respective damage claim for
Management Board and Supervisory Board members. The
deductible has a maximum cumulative annual cap of 150 percent
of a member’s annual fixed compensation.

Separate Combined
Non-Financial Report

100 Purpose and Scope

100 Business Model

100 General Information

101 Annual Sustainability Report

102 Sustainability Ratings and Rankings

102 Approach to Health, Safety, and the Environment (“HSE”)

102 Aspect 1: Environmental Matters

105 Aspect 2: Employee Matters

109 Aspect 3: Social Matters

112 Aspect 4: Human Rights

114 Aspect 5: Anti-Corruption

Separate Combined Non-Financial Report

100

Separate Combined Non-Financial Report

Purpose and Scope

The purpose of this separate Combined Non-Financial Report is
to comply with the reporting requirements of the German CSR
Directive Implementation Act (Section 315c in conjunction with
Sections 289c to 289e of the German Commercial Code). It
applies to both the E.ON Group and E.ON SE (hereinafter: “E.ON”).
In addition to general information, the report contains informa-
tion on the five mandatory aspects: the environment, employees,
social matter, human rights, and anti-corruption. This informa-
tion is for the reporting period January 1 to December 31, 2020.
The report encompasses all subsidiaries that are fully consolidated
in E.ON’s Consolidated Financial Statements. Any deviations
from this are indicated.

The innogy takeover successfully closed in 2019. Effective
January 1, 2020, innogy’s operations are no longer managed
and disclosed as a separate segment but rather integrated into
Energy Networks, Customer Solutions, and Corporate Functions/
Other. E.ON’s current strategy was subjected to a verification
process early in 2020. It was affirmed to be a suitable strategic
framework for the energy-policy, social, and technological
challenges that currently prevail. Nevertheless, E.ON intends to
use the period through year-end 2021—while continuing to
integrate innogy—to sharpen the company’s focus in line with
its current and reaffirmed strategy, analyze exogenous factors,
and determine their impact on strategic development. One key
area for strategic focus is sustainability.

The policies mentioned below issue instructions, set minimum
standards, assign responsibilities, and define management tools for
the various non-financial issues. They are reviewed on an ongoing
basis. Group policies are binding for all companies in which
E.ON holds a majority stake and for projects and partnerships
for which E.ON has operational responsibility. Contractors and
suppliers are also required to meet E.ON’s minimum standards.

The innogy takeover in 2019 did not result in E.ON’s guidelines
and policies becoming automatically binding for innogy. innogy
units met these requirements in 2020 because similar policies
applied to them. After revising E.ON’s guidelines in 2020, effec-
tive January 1, 2021, the new E.ON has a largely uniform set of
policies. With a small number of exceptions, these guidelines
and policies apply to all Group companies including the former
innogy companies.

The business operations at the Renewables segment that was
transferred to RWE are included in E.ON’s key performance
indicators (“KPIs”) until late September 2019. A separate innogy
segment, consisting mainly of network and sales businesses,
became part of the E.ON Group on 18 September 2019. Conse-
quently, last year’s reporting included a number of innogy KPIs
after this date, most of which were presented separately from
E.ON KPIs. This year, the 2019 KPIs of E.ON and innogy were
aggregated in order to foster comparability and transparency.
As a rule, KPIs include both entities from 2019 on. Any exceptions
due to time frames, availability of data, and internal collating and
reporting processes are clearly indicated. 2020 figures, however,
refer to the scope of the new E.ON without exception.

Business Model

E.ON’s two core businesses, Energy Networks and Customer
Solutions, promote the sustainable development of the energy
industry. Detailed information about E.ON’s business model can
be found in the Combined Group Management Report.

General Information

E.ON strives to always do business responsibly and therefore
monitors all material impacts of its business operations. E.ON
considers not only financial aspects but also environmental,
social, and governance (“ESG”) issues along its value chain. The
systematic consideration of non-financial issues enables E.ON
to identify opportunities and risks for its business development
early. In addition to investors’ expectations, E.ON takes into
account the expectations of other key stakeholders like customers
and employees.

In 2020 E.ON’s materiality assessment consisted of a three-step
process to determine which non-financial issues are essential
for understanding E.ON’s business performance, financial results,
and situation and to evaluate the impact of its business opera-
tions. The process also identified focus dimensions that form the
core of the E.ON Group’s new sustainability strategy. In the first
step, E.ON evaluated the events and developments that affected
the Company in 2020, including the innogy integration and the
Covid-19 pandemic. Also, E.ON conducted an in-depth analysis
of its ESG performance based on ESG ratings and an examination
of competitors’ best practices. Second, E.ON conducted
13 interviews with outside experts about a variety of topics,

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such as climate change, health and safety, and social issues.
The E.ON Sustainability Council, on which there were a number
of personnel changes in 2020, was involved in the third and final
step. The members completed a survey in which they assessed
the relevance of each of the United Nations’ Sustainable Develop-
ment Goals (“SDGs”) for E.ON and subsequently participated

in a workshop to discuss the results of the desk research, the
expert interviews, and the survey. The workshop validated the
research results and defined a set of focus dimensions on which
E.ON‘s sustainability strategy is based. The materiality analysis
identified good corporate governance and the following non-
financial issues as material for E.ON.

E.ON’s Material Issues Subsumed under the Five Mandatory Aspects

Environmental matters

• Climate protection

Employee matters

Social matters

Human rights

Anti-corruption

• Occupational health and safety
• Working conditions and employee development
• Diversity and inclusion

• Security of supply
• Customer loyalty

• Human rights and supplier management

• Compliance and anti-corruption

E.ON’s approach to each issue and its progress in 2020 are
explained in the following sections. E.ON takes a compre-
hensive approach to occupational health and safety (Aspect 2:
employee matters) and environmental management, which is
explained below. The description of all approaches is guided by
the Global Reporting Initiative’s Sustainability Reporting Stan-
dards (“GRI SRS”), in particular GRI standard 103: Management
Approach 2016.

Diversity and inclusion were identified as material issues in
2020 and became part of E.ON’s new sustainability strategy.
The Employees chapter from page 50 of the Combined Group
Management Report contains more information.

Since 2018, E.ON’s management of non-financial risks has been
aligned with the five mandatory aspects. In 2020 E.ON focused
in particular on human rights and environmental and climate
matters in order to prepare to comply with possible new regula-
tory requirements in these areas. The climate risk assessment
was organizationally integrated into the Group’s Enterprise Risk
Management (“ERM”) system in October 2020 and will be a
standard ERM process from 2021 onward. Based on this, the
content of the climate risk assessment will be further developed.
E.ON also made significant progress in further integrating non-
financial risks into its broader risk management processes. The
process and findings of the non-financial risk analysis for 2020
were presented to, and approved by, the E.ON Group Risk Com-
mittee on December 8, 2020. The findings indicated that, on

balance, as of year-end 2020 E.ON had no reportable non-
financial net risk exposure. Information about E.ON’s financial
risks and chances can be found in the Risk and Chances Report
in the Combined Group Management Report for the 2020
financial year.

E.ON’s sustainability efforts are guided by internationally recog-
nized standards, which provide orientation and help ensure that
E.ON considers all essential aspects of responsible corporate
governance. E.ON has been committed to the ten principles of
the United Nations Global Compact (“UNGC”) since 2005. Its
sustainability activities also support the achievement of the
United Nations’ SDGs. In particular, E.ON helps provide access
to affordable, reliable, sustainable, and clean energy, supports
cities and communities to become sustainable, and helps protect
the earth’s climate.

Annual Sustainability Report

E.ON has published a Sustainability Report annually since 2004.
The report, which has been based on GRI standards since 2005,
serves as E.ON’s annual Communication on Progress to the UNGC.
It describes the issues that are material to E.ON’s stakeholders
and to E.ON as a company as well as how these issues are
addressed. It also reports on topics not included in this Combined
Non-Financial Report for reasons of materiality and contains
information about E.ON’s sustainability strategy and organization.

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102

Sustainability Ratings and Rankings

E.ON’s commitment to transparency includes subjecting its
sustainability performance to independent, detailed assessments
by specialized agencies and capital-market analysts. The findings
of these assessments provide important guidance to investors
and to E.ON. They help E.ON identify its strengths and weak-
nesses and further improve its performance. The Sustainability
Channel on E.ON’s corporate website contains a list of current
sustainability ratings and rankings and E.ON’s performance.

Approach to Health, Safety, and the
Environment (“HSE”)

E.ON’s HSE organization centrally manages all activities for
the material issues of climate protection, environmental manage-
ment, and occupational health and safety. E.ON’s overarching
HSE policy and the Function Policy “Sustainability and HSE” as
well as binding HSE standards set minimum standards, assign
responsibilities, and define management tools and reporting
pathways. These policies are binding across E.ON.

The E.ON Management Board and the management of E.ON’s
organizational units are responsible for HSE performance. They
set strategic objectives and adopt policies to promote continual
improvement.They are supported and advised by the HSE division
at Corporate Functions, employee representatives, and the
HSE Council. The council is composed of senior executives and
employee representatives from different business areas and
countries where E.ON operates. It meets at least three times a
year and is chaired by the E.ON Management Board member
responsible for HSE. The units have HSE committees and expert
teams as well. They draw up framework specifications to ensure
that their unit meets its HSE standards. The units also design
HSE improvement plans, which contain specific HSE targets and
programs for one or more years.

E.ON expects its HSE standards to be met further up the value
chain as well, for example by suppliers. New suppliers must
first undergo a qualification process if there is an increased risk
that their business activities could have a negative impact on
HSE. Depending on their size, E.ON sometimes also requires
them to be certified to international environmental and occu-
pational health and safety standards (ISO 14001 or EMAS III;
OHSAS 18001 or ISO 45001) or conducts HSE audits of them.

In 2020 E.ON developed and adopted a Group-wide standard for
HSE risk management. It was approved by the HSE Council and
the HSE function in 2020 and defines the minimum requirements
for identifying, analyzing, evaluating, addressing, and monitoring
HSE risks and opportunities. Its purpose is to ensure shared
understanding and to establish an overarching framework for
managing HSE risks, including sustainability risks.

HSE incidents are reported via PRISMA (Platform for Reporting
on Incident and Sustainability Management and Audits), E.ON’s
Group-wide online incident management system, in five cate-
gories of incidents. They range from 0 (low) to 4 (major). In 2020
the Company took steps for all former innogy units to use
PRISMA from 2021 onward. Pursuant to E.ON’s HSE Standard
on Incident Management, units must use PRISMA to report
category 4 incidents to the HSE division at Corporate Functions
within 24 hours. E.ON systematically investigates and analyzes
incidents depending on their severity and/or potential to result in
an actual incident and uses the findings to take preventive action.

HSE has always been a top priority for the E.ON Management
Board. In 2020 the Management Board and the HSE Council
therefore decided to set personal H&S targets for the top
100 managers and to endorse E.ON’s HSE strategy (“Roadmap
2021–23”), which contains underlying targets for its operating
units, including H&S. The targets for top managers and units
are individual. Their purpose is to further reduce the frequency
of serious incidents and fatalities (“SIF”), with the ultimate aim
of reaching zero harm in the near future. The changes took effect
on January 1, 2021. They make it even more explicit that E.ON’s
HSE performance is integral to its long-term success.

Aspect 1: Environmental Matters

Climate Protection
Climate change and the environmental damage caused by it are
serious and affect nature and humans. The use of fossil fuels is
accompanied by greenhouse gas (“GHG”) emissions. Low-carbon
power generation and the efficient use of energy therefore play
key roles in reducing emissions and limiting global warming. The
transition to a low-carbon economy will require the concerted
efforts of everyone who makes or consumes energy. It poses

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The activities of E.ON’s core businesses reflect the key emerging
energy trends and help protect the earth’s climate. But E.ON
also wants to shrink its own carbon footprint. E.ON measures
the annual carbon emissions from its distributed power and heat
generation and from its business activities that are not directly
related to power generation. It discloses these figures in its sus-
tainability reporting. E.ON factors in upstream and downstream
emissions as well. It calculates emissions using the globally
recognized WRI/WBCSD Greenhouse Gas Protocol Corporate
Accounting and Reporting Standard (“GHG Protocol”). The GHG
Protocol defines three scopes for GHG accounting and reporting.
This improves transparency and provides guidance for different
types of climate policies and business goals. The table below
includes innogy from 2019 onward in order to foster compara-
bility and transparency in the following years. For this reason, the
calculation methods were harmonized in 2020. innogy’s GHG
emissions for 2019, which were initially determined using com-
pany-specific emission factors, were recalculated using the
E.ON Group’s methods and emission factors and then aggregated
with E.ON’s figures. This yielded a consistent baseline for
E.ON’s climate target.

To calculate emissions when primary data are unavailable or of
insufficient quality, the GHG Protocol recommends the use of
secondary data, such as industry-average data or government
statistics. Since spinning off its large-scale fossil-fueled power
generation business in 2016 E.ON has procured its power mainly
from wholesale markets where the source of generation is often
not traceable or information about the source is not reliable.
E.ON therefore uses the official national emission factors of the
countries in which power sold to end-customers is purchased.

challenges for E.ON’s competitiveness, but also creates oppor-
tunities to grow the business. Many countries, communities,
and companies have already embraced climate-friendly energy
production and energy efficiency to achieve their carbon-reduc-
tion targets. E.ON’s strategic focus on energy-efficient customer
solutions and reliable smart grids is fully in line with these
global trends.

GHG emissions can be reduced not only by low-carbon genera-
tion technologies but also by energy conservation and recovery.
E.ON’s energy solutions help its customers use energy more
efficiently and recover energy. E.ON offers individually tailored
solutions to residential, industrial, commercial, and public-sector
customers. Its portfolio includes easy-to-use online energy audits
and apps that help residential customers better understand
their energy consumption. E.ON designs embedded cogeneration
solutions and energy-efficiency plans for commercial customers.
It also develops integrated solutions for cities, district develop-
ers, and real-estate companies that encompass elements like
efficient heating and cooling, low-carbon generation, and smart
energy management. In addition, E.ON offers E-Mobility solu-
tions such as electric-vehicle charging systems for homes and
businesses as well as public charging infrastructure for cities that
help make transport less dependent on fossil fuels and thus less
carbon-intensive.

The Chief Operating Officer—Commercial, who is a member of
the E.ON Management Board, has overall responsibility for
E.ON’s customer-oriented businesses, including solutions enabling
customers to generate their own climate-friendly energy. The
regional units’ sales teams implement and market energy and
E-Mobility solutions for all classes of customers. Cross-regional
teams at Corporate Functions coordinate these activities from a
technical, commercial, and strategic perspective. E.ON Business
Solutions is responsible for designing technical solutions for
commercial customers in Western and Central Europe, the United
Kingdom, and Scandinavia.

Distribution networks like E.ON’s are the backbone of the
energy transition. They facilitate low-carbon power generation
and the deployment of innovative, efficient energy solutions.
Wind farms, solar arrays, battery-storage systems, and other
climate-friendly technologies are connected to E.ON’s distribu-
tion grids. Going forward, smart grids will serve as the platform
for the innovative technologies and business models that are
essential to the energy transition’s success.

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104

CO2 Emissions

Total CO₂ equivalents in million metric tons

Scope 1: Direct emissions from E.ON’s own business operations1

Scope 2: Indirect emissions associated with E.ON’s electricity and heat consumption (location-based)3

Scope 2: Indirect emissions associated with E.ON’s electricity and heat consumption (market-based)3, 4

Scope 3: Indirect emissions from all other business operations1, 5

Total (location-based)

Total (market-based)

2020

3.56

4.49

6.09

108.21

116.26

117.85

2019

3.882

4.822

–

120.272

128.982

–

2018

4.58

2.89

–

61.31

68.78

–

1From 2019 onward, emissions from power and heat generation are divided into emissions from plants owned and operated by E.ON (Scope 1) and emissions from plants leased to, and operated by,
customers (Scope 3). This improves E.ON’s ability to manage its emissions and makes progress toward its targets more transparent.
2Prior-year figures were adjusted owing to changes in methodology and the scope of recalculation, as specified in the text.
3Excludes E.ON’s consumption of district heating due to the immateriality of the quantity compared with the other Scope 2 categories.
4First-time reporting of market-based Scope 2 emissions in 2020.
5Scope 3 emissions from purchased power and the combustion of natural gas sold to end-customers are from energy sold to residential and B2B customers only. Energy sold to sales partners and
the wholesale market is not included.

E.ON’s direct and indirect CO2e emissions totaled 117.85 million
metric tons in 2020, of which 3 percent were direct Scope 1
emissions, 97 percent were indirect Scope 2 and 3 emissions.
Scope 1 emissions decreased by 8 percent year on year, indirect
emissions by about 10 percent.

The 2019 report disclosed Scope 1 emissions for 2019 of
4.91 million metric tons of CO2e for E.ON and 0.87 million metric
tons for innogy. In 2020 E.ON recalculated innogy’s 2019 emis-
sions using E.ON’s emission factors, which are based on the
internationally recognized factors of the International Energy
Agency (“IEA”) and the U.K. Department for Environment, Food,
and Rural Affairs (“DEFRA”).

Scope 2 emissions previously disclosed for 2019 totaled
2.73 million metric tons of CO2e for E.ON and 3.05 million metric
tons for innogy. In 2020 innogy’s 2019 power distribution losses
and purchased power used in buildings and operations were
recalculated using E.ON’s emission factors, which are based on
the IEA’s factors. innogy’s market-based power distribution
losses in 2019 were not available for the 2019 report. They were
calculated for this report using E.ON’s calculation method and
added to the E.ON figure for 2019.

Scope 3 emissions previously disclosed for 2019 amounted to
59.67 million metric tons of CO2e for E.ON and 88.13 million
metric tons for innogy. In 2020 innogy’s 2019 emissions in this
category were likewise recalculated using E.ON’s emission factors,
which here are based on the IEA and DEFRA’s factors as well
as an E.ON-specific emission factor for the recalculation of pur-
chased goods and services. Also, innogy’s figures for purchased
power and combustion of natural gas sold to end-customers
were checked against E.ON’s materiality threshold for reporting
boundaries.

In 2020 the E.ON Management Board set new climate targets
that, in the future, are to serve as KPIs that are relevant for
management purposes. The exact details will be determined in
2021. By reducing its GHG emissions, E.ON intends to become
carbon-neutral by 2040. E.ON plans to reduce its Scope 1 and 2
emissions by 75 percent by 2030 and by 100 percent by 2040
(both relative to 2019). E.ON aims to reduce its Scope 3 emissions
by 50 percent by 2030 and by 100 percent by 2050 (both relative
to 2019). To meet these targets, E.ON has defined measures to
reduce emissions in all three scopes of the GHG Protocol. E.ON
intends to reduce its direct emissions (Scope 1) by updating
and optimizing its gas networks and heat generation business
and indirect emissions (Scope 2) by conserving energy itself and
by reducing line losses in its power network business. E.ON’s
Scope 3 emissions, which occur primarily during the generation
of the power the Company purchases and resells and during the
use of the gas it sells, account for most of E.ON’s carbon foot-
print. E.ON’s main objective for them is to increase the proportion
of renewable energy it provides to its customers. Information
about the progress E.ON makes toward its climate targets is
presented first to the Sustainability Council, which met three
times in 2020. The Chief Sustainability Officer, who chairs the
council, reports the information to the E.ON Management
Board on a regular basis.

E.ON is committed to operating sustainably and has in place the
necessary governance structure to do so. This includes making
steady progress toward its climate targets, effectively managing
its climate-related risks, seizing climate-related opportunities
that fit with its corporate strategy, and reporting transparently
on all these matters. The recommendations of the Task Force on
Climate-related Financial Disclosures (“TCFD”) provide important

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guidance for E.ON’s reporting. Established in 2015, the TCFD
aims to develop consistent, comparable, and accurate climate-
related financial risk disclosures that companies can use to
provide information to investors, lenders, insurers, and other
stakeholders. E.ON became an official TCFD supporter in 2019,
which marks the start of its TCFD reporting below. Going for-
ward, the Company will continue to expand its TCFD reporting.

• Governance

The importance of climate change for E.ON is reflected in the
Company’s governance. The Management Board has overall
responsibility for E.ON’s sustainability strategy, including its
climate targets. The Supervisory Board is informed about
E.ON’s sustainability performance by its Audit and Risk
Committee and by the Management Board. Furthermore, it
established the Innovation and Sustainability Committee in
December 2019.

• Strategy

E.ON’s business operations promote sustainability: its cur-
rent climate agenda includes emission-reduction targets for
2030, 2040, and 2050. The acquisition of innogy’s networks
and customer business substantially strengthened E.ON’s
core businesses and therefore enhances its ability to promote
sustainability. Since climate change could create risks as well
as opportunities for E.ON’s business, the Company reviews
a range of climate scenarios on an ad hoc basis.

• Risk Management

E.ON plans to continually monitor and assess its sustainability,
climate, and other non-financial risks and opportunities and
their potential impact in the short, medium, and long term.
In 2018 E.ON began to integrate the assessment and manage-
ment of these risks more systematically into its overall risk
management. In 2020 E.ON completed the task of organiza-
tionally integrating climate risk assessment into its ERM
process, which will now be the standard ERM process from
2021 onward.

• Metrics and Targets

E.ON’s current climate metrics consist mainly of the emission
figures for its carbon footprint categories (Scope 1, 2, and 3)
and the measurement of progress toward its climate targets
(see above). For all GHG categories relevant for E.ON, E.ON
monitors progress toward these targets on an annual basis
and analyzes progress in greater depth every three years as
part of a trend analysis; the next in-depth analysis will be at
year-end 2022 and use 2019 figures as the baseline.

More detailed information on E.ON’s TCFD reporting can be
found in the “Climate protection” chapter of the 2020 Sustain-
ability Report and in a supplementary document “On course for
net-zero – Supporting paper for E.ON’s decarbonization strategy
and climate-related disclosures 2020”, which is available on
E.ON’s corporate website. Furthermore, additional information
is published in E.ON’s CDP climate disclosure. CDP is one of the
largest international associations of investors that independently
assess the transparency and detail of companies’ climate reporting.

Aspect 2: Employee Matters

Occupational Health and Safety
E.ON is making continuous progress towards establishing a
caring culture at E.ON. This encompasses ensuring its employees’
safety in the workplace, promoting their health, and also support-
ing their mental well-being. Some employees perform potentially
risky tasks, such as working on power distribution networks.
Strict safety standards are therefore of particular importance to
E.ON. First and foremost, accidents endanger employees’ health.
But accidents may also damage property, cause work stoppages,
and harm E.ON’s reputation. In 2020, amid the Covid-19 pan-
demic, all three aspects—safety, health, and well-being—took on
even greater significance. The pandemic posed challenges which
E.ON met in keeping with its Caring Culture.

E.ON’s approach to H&S is proactive and preventive, and the
Company is committed to zero harm. Consequently, the over-
riding objective is to prevent accidents from ever happening.
By signing the Düsseldorf Statement on the Seoul Declaration
on Safety and Health at Work and the Luxembourg Declaration
on Workplace Health Promotion in 2009, E.ON pledged to pro-
mote a culture of prevention.

To live up to E.ON’s commitment to employees’ H&S, its HSE
management assigns responsibilities clearly and sets minimum
standards (see HSE Management below). These apply not
only to E.ON employees but also to contractor employees who
do work on E.ON’s behalf. With few exceptions, all E.ON units
are required to have an H&S management system certified to
ISO 45001 (ISO 45001 replaced OHSAS 18001), a globally
recognized standard for such systems. An annual management
review is an important part of this management system. The
reviews are conducted by the units themselves and are a pre-
requisite for certification to be renewed. If necessary, Group
Audit and HSE at Corporate Functions conduct HSE audits to
determine whether E.ON’s standards are being met. To decide

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106

whether an audit of a unit is necessary, E.ON analyzes its acci-
dents from the previous year as well as current risk assessments.
In addition to audits, performance indicators for lost time,
accidents, and dangerous situations also help E.ON investigate
accident causes and conduct comprehensive risk analyses. The
E.ON Management Board is always informed about severe acci-
dents, developments relating to accidents, and related measures
and programs by means of monthly reports from HSE and peri-
odic consultations with the Senior Vice President for Sustain-
ability & HSE. In addition, the member of the E.ON Management
Board responsible for HSE receives a weekly safety update and
presents it at board meetings. The update contains major inci-
dents that could have led to the death of employees, contractors,
customers, or third parties. E.ON investigates all accidents care-
fully, learns from them, and takes steps to avoid them in the future.

E.ON’s units develop their own H&S improvement plans, which
set H&S targets for one or more years. Many units set annual
targets for combined TRIF. But E.ON’s main focus is on targets
that help it reach its goal of zero accidents. In addition, in 2018
the E.ON Management Board defined a set of four personal
H&S targets for the top 100 executives who report directly to
them. The program was continued in 2019 and again in 2020,
when innogy’s top executives joined it. Its purpose is to further
embed E.ON’s Caring Culture in its daily operations. In 2020
top executives again participated in H&S upskilling workshops
and a Group-wide zero-level measurement to assess E.ON’s HSE
maturity. These actions are intended to reinforce the top 100
executives’ awareness of their personal targets and have already
led to an increase in their activities related to their targets.

The number of at-work traffic accidents in 2020 was 70 percent
lower than in 2019. The improvement may reflect, among other
factors, such as a decrease in at-work traffic due to Covid-19,
a positive effect from the employee-awareness training agreed
on by the top 100 in 2019.

In several countries where E.ON operates, employees who have
questions or concerns about their physical or mental health
can contact a free, independent, and strictly confidential health
advisory service (employee assistance program). In Germany,
this service is a central component of the Group Works Health
Agreement, which was concluded between management and
the Group Works Council in 2015.

The Covid-19 pandemic was a source of uncertainty for employ-
ees. E.ON responded to this situation by providing a wide range
of information and support, both centrally and at the unit level.
In particular, the HSE and HR departments offered webinars,
podcasts, and conversations on concerns and needs. Supervisors
received an updated FAQ document on a regular basis to enable
them to provide the latest information to their teams.

The findings of the incident investigations and HSE audits com-
pleted in 2020 show that E.ON’s H&S management systems are
largely effective. Most of the deficiencies identified were rectified
without delay. However, there remains work to do to ensure that
all new or revised policies and processes as well as other insights
are fully documented and disseminated. This relates in particular
to E.ON’s internal H&S rules at its distribution system operators
(“DSOs”) in Germany and other countries. Isolated safety defi-
ciencies that could put employees, contractors, and members
of the public at risk were found at some E.ON units outside
Germany. The deficiencies were prioritized and are gradually in
the process of being rectified. The audits found that there was a
general need to continually reinforce employees and contractors’
awareness of their responsibility to look after themselves and
each other and to speak up immediately if they perceive a poten-
tial safety risk. On balance, there has been a steady improve-
ment in recent years. E.ON views audits—and the findings and
recommendations they yield—as opportunities to foster contin-
uous improvement.

Total recordable injury frequency (“TRIF”) is E.ON’s key perfor-
mance indicator for safety. It measures the number of recordable
work-related injuries and illnesses per million hours of work.
E.ON has included contractor employees’ in its safety perfor-
mance since 2011 (combined TRIF). The HSE improvement
plans of many of E.ON’s units set annual targets for combined
TRIF as the Group strives to reach the goal of zero accidents.
E.ON’s most direct influence is on reducing the number of acci-
dents involving its own employees. E.ON therefore presents
below its employee TRIF performance for the past three years.

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E.ON employees’ health rate was 96.3 percent in 2020. It
reflects the number of days actually worked in relation to
agreed-on work time. The 2020 figure was again high (2019:
96.0 percent).

Working Conditions and Employee Development
The mission of the Human Resources (“HR”) function is to enable
E.ON to maximize its competitive advantages in the energy
market and to support E.ON’s vision: “Improving people’s lives.”
This is done by attracting the right people and putting them in
the right roles at the right time; by identifying, developing, and
retaining talented employees whom E.ON considers to be its
future leaders; and by helping all people to realize their potential
and be fit for a future that will be increasingly digital. In 2020
the Covid-19 pandemic posed a particular challenge to HR.
Page 22 of the Annual Report contains more information.

The Group People Strategy (“GPS”) provides the compass to guide
the HR-related aspects of E.ON’s transformation and long-term
success amid a rapidly changing world. In 2020 E.ON developed
a new GPS called GPS@E.ON, which was approved by the E.ON
Management Board in December. It sets four People Priorities
for the entire Group: Future of Work, Diversity & Inclusion, Sus-
tainability, and Leadership. GPS@E.ON sets the direction and
provides the compass for group-wide people activities, all of
which need to contribute to the people priorities and their key
ambitions. It will be brought to life by Group-wide and unit-
level people activities, especially by means of existing strategic
initiatives. This process will be flexible and modular to reflect
the differences between business units.

E.ON’s Group-wide competency model, Grow@E.ON, for example,
continues to be a core part of the GPS and is a key enabler for
professional development. Grow@E.ON is integrated into all HR
and people processes. It helps to ensure that E.ON recruits,
retains, places in the right roles, and develops the people who
will continue to drive the Company’s success. E.ON offers a
range of career paths. This ensures that E.ON is an attractive
employer to people who wish to pursue a specialist or a gener-
alist career. Grow@E.ON was updated in 2020 to reflect E.ON

Employee TRIF1

2020

20192

2018

2.4

2.5

1TRIF measures the number of reported fatalities and occupational injuries and illnesses per
million hours of work. It includes injuries that occur during work-related travel that result in
lost time or no lost time and/or that lead to medical treatment, restricted work, or work at a
substitute work station.
2Includes innogy from October 1 to December 31, 2019.

Employee TRIF of 2.4 in 2020 was similar to the 2019 figure (2.5).
Contractor TRIF decreased from 2.5 in 2019 to 2.3 in 2020.
Combined TRIF declined from 2.5 to 2.3, which E.ON views
as reaffirmation of the measures being taken to prevent serious
accidents. Comparability with the prior year is limited, since
innogy was included for only part of 2019.

Regrettably, three contractors and two E.ON employees died
in workplace accidents in 2020. After a fatal accident, E.ON
immediately initiates an investigation to understand the exact
course of events that led to it. In addition, within 24 hours an
initial report must be submitted to the E.ON SE Management
Board member responsible for the unit where the accident
occurred and to the board member responsible for HSE. The
aim is to identify the root causes and to take all necessary
measures to prevent comparable accidents in the future. E.ON
has seen the organization’s awareness of occupational safety
steadily increase for several years while its accident rates have
declined. Nevertheless, serious and even fatal accidents still
occur. E.ON cannot and will not accept this. It has therefore
further intensified its efforts to prevent accidents. For example,
in mid-2020 E.ON subsidiary Westnetz launched a large-scale
occupational safety program. The program is supported by one
of the world’s most recognized consulting firms for safety and
operational risk management. The program’s task force estab-
lished several work streams and initiated in-house and outside
analyses to shed light both on cultural as well as technical/
process-related issues.

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and innogy’s integration process, the updated E.ON Story, HSE
topics, and the digital transformation. As part of the integration
process, all new leaders and employees will be informed about,
and trained in line with, Grow@E.ON. More information on the
innogy integration process is on page 50 of the Annual Report.

A shared corporate culture is crucial for the success of the new
E.ON and the integration process. The new E.ON will inevitably
develop its own culture. The clear intention is to actively shape
this process instead of simply letting it happen. The shared cor-
porate culture is based on five new corporate values that guide
employees’ actions as well as their interactions with each other,
customers, and business partners. More than 250 employees
representing all E.ON and innogy businesses and all countries
where they operate were involved in defining the values: putting
customers first, better together, delivering on promises, exploring
new paths, and behaving mindfully.

In 2018 E.ON decentralized most of its HR activities to bring
them closer to the business. One important function of Group
HR/Executive HR, which remains a part of Corporate Functions,
is the HR management of E.ON’s top 100 leaders. This includes
executive development, placement, succession planning, and
talent pipeline management. Each unit must have in place its
own mechanisms to identify and develop talent and to conduct
local succession planning. It is management’s responsibility to
ensure that all new employees receive a company orientation
as well as training on essential topics like health and safety. For
this purpose, the units may use standardized E.ON eLearning
modules. These and other virtual learning tools as well as courses
and training programs are offered by the People Development
team in Group HR. eLearning is an effective, flexible, and intuitive
way of delivering learning to employees.

The Senior Vice President for HR is regularly asked to report to
the E.ON Management Board meetings about people matters.
The Management Board discusses the current status of the tal-
ent pool on a regular basis. Twice a year the Management Board
receives an overview of the entire talent pool, including lower
levels of management. In addition, E.ON conducts an annual
management review and regularly exchanges views on talented
employees and their development needs at job-family-specific
talent board meetings, which were introduced in 2020.

To ensure E.ON’s people have a consistent framework within
the Company’s decentralized management approach, in 2017
the HR team and the E.ON Management Board developed and
approved People Commitments, which establish twelve principles
that articulate E.ON’s values with respect to its people. These
principles are binding for the entire E.ON Group and are endorsed
by the Works Council of E.ON SE. Units apply these principles
in a way that reflects their particular legal, cultural, and business
environment. The People Commitments encompass a number
of policies and guidelines. Examples include agreements on
remote working and flexible work arrangements, such as home
offices, sabbaticals, part-time work, and special holidays.

E.ON has in place a wide range of measures to make working
at E.ON attractive and to develop its employees. For example,
E.ON’s international transfer policy governs the temporary foreign
deployment of its employees. The average length of a foreign
deployment is two to three years. E.ON also offers vocational
training in numerous careers as well as work-study programs.
One example is the E.ON training initiative, which helps school-
leavers get a start on their careers through internships that pre-
pare them for an apprenticeship as well as school projects and
other programs. E.ON Graduate Programs (“EGP”) recruit highly
qualified university graduates for an 18 to 24-month program
during which they receive a broad overview of E.ON’s business
through three to six deployments in different E.ON units and
departments. E.ON offers the EGP in Sweden, the Czech Republic,
Hungary, and Romania. Due to the restructuring of the U.K.
business, the EGP is on hold in the United Kingdom until 2021.
In Germany E.ON offers a job starter and a work-study program.

E.ON has conducted an annual employee survey since 2014 to
find out how its employees feel about their job, their supervisor,
the work atmosphere in their unit, and other topics. The former
innogy employees have participated in the surveys since 2018.
These surveys, which the Company calls Pulse Checks, include
questions about E.ON’s corporate values and current issues, such
as, in 2020, the Covid-19 pandemic. Employees’ feedback on
E.ON‘s handling of the pandemic was very positive. Employee
Net Promoter Score (“eNPS”) has been an important aspect of
these surveys since 2017. It measures employees’ willingness

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to recommend E.ON as an employer. Since then, eNPS has
improved from -4 to +25. The 2020 survey also included a series
of questions on what E.ON calls its Caring Culture, including
where E.ON could still improve its safety culture as well as its
support for employees’ health and well-being in general. E.ON
analyzes survey feedback carefully to identify areas where the
Company may need to do better.

E.ON has a single, Group-wide process for hiring executives. It
is designed to improve how E.ON fills executive positions, make
hiring more transparent, and ensure equal opportunity. Its main
component is a biweekly placement conference at which talent
leaders from around the Company discuss vacancies and potential
candidates. E.ON’s mechanisms ensure that executives are
engaged in ongoing professional development, that E.ON has a
transparent view of its current talent situation and the needs for
the future, and that leaders across the E.ON Group have develop-
ment opportunities. Since feedback is essential for empowering
people to perform at their best, E.ON also provides employees
with periodic performance and career-development reviews.

E.ON believes that an attractive compensation package includ-
ing appealing and up-to-date fringe benefits is essential for
rewarding its employees. The compensation plans of nearly all
employees contain an element that reflects E.ON’s performance.
This element is typically based on the same key performance
indicators that are also used in the E.ON Management Board’s
compensation plan.

E.ON wants to retain people (and their expertise) and enable
them to grow professionally. One of the objectives is therefore
to develop E.ON’s employees so that management positions
can be filled in-house. Placement conferences have a shared
platform to systematically track how many women participated
in the application process and who ultimately got the job. The
platform also allows E.ON to monitor whether selected candi-
dates are from its development pool and reflect its diversity
targets. In addition, the aforementioned talent boards focus not
only on talent identification and succession but also, in recent
years, on diversity issues, such as increasing the proportion of
women and employees from minority groups in the Company’s
leadership pipeline. E.ON enhanced its commitment to these
issues in 2020 by making diversity a priority in its new Group

People Strategy. The talent boards will enable E.ON to evaluate
the effectiveness of its talent management once enough data
have been collected.

Diversity and Inclusion
Pages 51 to 53 of the Annual Report contain information on
diversity and inclusion at E.ON.

Aspect 3: Social Matters

Security of Supply
One of E.ON’s main goals as an energy company and distribution
grid operator is to ensure that its customers have a secure supply
of electricity. A reliable electricity supply is essential for indus-
trialized countries to be able to maintain their infrastructure and
meet their inhabitants’ needs. For example, industrial customers
that operate a high-precision production facility require a con-
stant network frequency. If frequency fluctuates, machinery can
break down, resulting in additional costs. A power outage can
have serious consequences, and not just for industrial customers.
At companies, government agencies, and households, most
processes are no longer possible without electricity. One of
the challenges in energy supply is that, increasingly, electricity
comes from distributed sources. As a result, electricity is fed
into the network at many different points. Moreover, renewables
feed-in fluctuates because it depends on the weather and other
factors beyond E.ON’s control.

Part of E.ON’s corporate strategy is to adapt its distribution grids
to the emerging distributed energy world. They form a crucial
link between electricity producers and consumers. E.ON’s dis-
tribution grids must function properly and be equipped to meet
the challenges of the new energy world for E.ON to continue to
ensure a reliable electricity supply in the future. For this purpose,
E.ON continually upgrades its existing infrastructure with smart-
grid technology. This enables E.ON to better manage energy
generation, distribution, and storage.

E.ON’s distribution system operators (“DSOs”) are responsible for
the safe and reliable operation of its distribution networks. Their
network control centers oversee network operations. E.ON’s

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DSOs are also responsible for resolving unforeseen outages in
their network territory. In case of widespread outages, E.ON’s
crisis management system stipulates responsibilities and pro-
cesses in accordance with the instructions contained in the
Incident and Crisis Management Policy. A member of the E.ON
Management Board oversees the Energy Networks segment.
Under his leadership, three departments at Corporate Functions
actively manage Energy Networks’ regional units. This includes
strategic development, capital allocation, asset management,
and so forth.

E.ON has in place investment and maintenance plans to maintain
and expand its grids to ensure that all of its network customers
are connected and have a reliable energy supply. E.ON’s DSOs
are responsible for implementing these plans, which encompass
one or more years. Their investment budgets are approved cen-
trally. Final approval comes from the E.ON Management Board
at the end of the annual medium-term planning and budgeting
process. A portion of the investment budgets goes toward making
E.ON’s grids smarter by equipping them with sensors and
command-and-control technology and by augmenting them with
a digital layer. The increasing use of smart-grid technologies
makes it possible to avoid or delay costly investments in conven-
tional networks by, for example, using this technology to maxi-
mize the capacity of existing overhead lines. Investment decisions
always focus on efficiency as well as security of supply. E.ON
chooses the solutions that make the most technical and economic
sense. This is because grid investments affect the grid fees
included in the electricity price paid by customers.

E.ON’s DSOs record all planned and unplanned outages at their
distribution networks. They use these data to calculate the sys-
tem average interruption duration index (“SAIDI”), which mea-
sures the average outage duration per customer per year. E.ON
discloses the SAIDI of its fully consolidated DSOs by country.
The figure for Germany, for example, is the average of E.ON’s
DSOs there. E.ON’s SAIDI in Germany is calculated according to
the method prescribed by the German Federal Network Agency
(known by its German acronym, BNetzA). This calculation is
based on outages that are also verified by the BNetzA. This figure
can therefore be deemed official. All the countries in which E.ON
operates grids now have quality regulations. The respective
regulatory agency reviews and validates grid operators’ outage
reports. The SAIDI figures for a particular country therefore
reflect the methodology stipulated by its regulatory agency.

By the end of the data-collection period, no regulatory agency
had completed the process of validating 2020 outages. Because
this report is supposed to contain final, service-quality figures
that have been officially audited (by the BNetzA in Germany and
the relevant regulatory agencies elsewhere), it publishes figures
for the previous year below.

Although the SAIDI is not used for management control purposes,
it provides important information on the reliability of E.ON’s net-
works. At regular intervals, the DSOs inform the E.ON Manage-
ment Board member responsible for network operations about
their security of supply. All E.ON DSOs include their SAIDI in their
quarterly performance report to the E.ON Management Board.

SAIDI Power1

Minutes per year

Scheduled

Un-
scheduled

Total

Scheduled

Un-
scheduled

Total

Scheduled

Un-
scheduled

2020

2019

Germany

Sweden

Hungary

Czech Republic

Romania

Slovakia2

Poland

117

145

288

143

121

358

146

178

192

646

208

128

154

339

176

100

465

122

187

205

804

255

126

157

262

178

522

2018

Total

191

235

783

266

1Figures are for the respective previous year: 2020 for 2019, 2019 for 2018, and so forth. Prior-year figures were adjusted to reflect a new calculation methodology.
Totals may deviate due to rounding.
2DSO in which E.ON has a 49-percent stake.

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E.ON improved its SAIDI figures for 2020 (based on data from
2019) in all countries except Sweden. In Sweden the customers
were on average more affected by power outages than in the
prior years owing to a hurricane and severe thunderstorms in
the summer. As in previous years, E.ON’s grids in Germany were
the most reliable.

Customer Loyalty
E.ON’s ability to acquire new customers and retain existing ones
is crucial for its business success. Global trends like climate
protection and digitization are not only altering the energy land-
scape. They are also creating new customer needs. E.ON wants
to help meet these needs and accompany its customers on their
sustainability journey. E.ON will only remain successful in the
marketplace by adapting its products and services to these jour-
neys and by continually improving its performance.

E.ON puts customers at the center of everything it does. This
pledge is a corporate value and is embedded in E.ON’s customer
experience principles, brand model, and Grow@E.ON, its Group-
wide competency framework. E.ON’s objective is to continually
enhance customer loyalty and to become a customer-led busi-
ness and the energy-solutions leader in its markets.

E.ON measures customer loyalty by means of Net Promoter
Score (NPS), which was introduced in 2009 and became a
Group-wide program in 2013. NPS indicates customers’ will-
ingness to recommend E.ON and its services. It also helps E.ON
identify which issues are currently of particular importance to
its customers and thus adapt its activities to current customer
needs. There are three types of NPS. Strategic NPS or top-down
NPS compares E.ON’s performance with competitors’ and is
based on the feedback of customers regardless of whether they
have had an interaction with E.ON. Journey NPS measures the
loyalty of customers who have completed a journey with E.ON,
such as transferring their energy service to their new residence
when they move. Touchpoint or bottom-up NPS is based on the
feedback of customers who have had a specific interaction with
E.ON, like talking to a call center agent. NPS is used by the units
in all E.ON’s markets and since September 2020 by the Nether-
lands and Poland as part of the innogy integration. Improvement
targets from 2021 onward will be set for the new markets,

but these market are not included in E.ON’s 2020 NPS figures.
A methodology adopted in 2017 enables E.ON to measure
strategic NPS consistently across all its markets. This, in turn,
makes it possible for E.ON to identify and resolve cross-market
customer issues and also to target areas where it could provide
useful innovations for its customers. The methodology’s auto-
mated reporting eliminates the errors of manual data entry,
thereby improving data quality and auditability.

E.ON defines Group-wide targets for strategic NPS and journey
NPS annually and uses both at the segment and unit level for
management purposes. Strategic NPS is highly significant for
management purposes because of the information collected
about competitors. Beginning in September 2020, the E.ON
Management Board receives a monthly report on NPS perfor-
mance. In addition, the Chief Operating Officer—Commercial
and the regional units’ CEOs discuss NPS and customer issues
at market reviews, which are conducted on a regular basis. The
variable compensation of senior managers has two components:
a company factor and a factor reflecting a manager’s individual
performance. Since 2020, strategic NPS and journey NPS
account for 20 percent of the company factor. In 2020 NPS tar-
get achievement was again not factored into the E.ON Manage-
ment Board’s compensation; however, E.ON began the process
of working out how to do so appropriately. Beyond the NPS
program, each unit has a set of game-changing initiatives in
place to systematically improve its customer experience. They
are sponsored by the respective unit’s CEO and board, whose
members are personally responsible for improving their unit’s
NPS. The initiatives, which are defined annually, may span mul-
tiple years depending on the level of transformation required.
E.ON introduced these initiatives in 2017 and initially called them
CEO-led signature actions.

The Chief Operating Office—Commercial (“COO-C”) at Corpo-
rate Functions coordinates the Company’s brand and marketing
strategy with the aim of further developing and strengthening
the E.ON brand. COO-C supports the energy sales and solutions
businesses for all customer categories, in all markets. The mem-
bers of E.ON’s Customer Experience teams serve as ambassadors

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for customer loyalty in their respective unit. They take the lead
on related projects and activities in their sales territory and share
information about successful programs and service improve-
ments on a monthly basis. E.ON has Customer Experience
teams in Germany, the United Kingdom, Italy, Romania, Sweden,
the Czech Republic, and Hungary. Businesses in the Netherlands
and Poland joined the organization over the course of 2020.

In 2020 E.ON also established a Global Customer Leadership
team consisting of senior customer experience leaders from
across the business as well as representatives of the Customer
and Market Insights team. Its purpose is to strengthen the cus-
tomer’s voice and propel customer centricity in all E.ON markets.
The team, which had its first meeting in September 2020, meets
every two months to review performance, identify areas for
cross-regional collaboration, and define a common customer
narrative for the whole business.

The coronavirus pandemic made 2020 a very challenging year.
The regional units responded swiftly. The uninterrupted supply
of energy was ensured at all times. In addition, E.ON arranged
for debt management processes to be adapted to the changed
requirements. E.ON also launched new digital services to improve
customer access and assistance, despite the closing of customer
centers necessitated by government lockdown policies. A video
chat, for instance, enabled customers to accomplish tasks
without have to go to a company shop.

The Customer Immersion program enables senior managers
and employees to interact directly with residential and business
customers. Its purpose is to bring the customer’s voice into the
organization and enhance employees’ customer orientation.

Our average strategic NPS for residential customers increaed
steadily over the course of 2020 and was at its highest level in
October and December. It was above the competitor average
throughout the year.

Due to the challenges of collecting feedback from small and
medium-sized enterprises (“SME”) customers during the first
pandemic-related lockdown, the Management Board decided
to exclude SME NPS from the overall company factor for 2020.
It’s planned to be included in 2021.

Aspect 4: Human Rights

Human Rights and Supplier Management
E.ON is committed to respecting human rights in all its business
processes. Failure to respect people’s fundamental rights and
needs has serious consequences for those affected and may
damage the Company’s reputation. Compliance with social stan-
dards also plays an important role in the business relationships
with enterprise partners. In addition, there are increasing regu-
latory requirements for corporate transparency and control. For
example, the U.K. Modern Slavery Act obliges E.ON to report
on the steps it takes to prevent international human trafficking.
E.ON’s CEO Johannes Teyssen is also its Chief Sustainability
Officer and Chief Human Rights Officer.

To prevent human rights violations, E.ON adheres to external
standards and defines its own principles and policies. The E.ON
Code of Conduct (see “Aspect 5: Anti-corruption”), a revised
version of which took effect in 2018, obliges all employees to
contribute to a non-discriminatory and safe working environ-
ment and to respect human rights. E.ON’s Human Rights Policy
Statement acknowledges the International Bill of Human Rights
and the Declaration on Fundamental Principles and Rights at
Work of the International Labour Organization (“ILO”) and its
fundamental conventions and makes reference to E.ON’s own
policies, such as the Supplier Code of Conduct. The standards
E.ON is guided by include the Universal Declaration of Human
Rights of the United Nations, the principles of the UN Global
Compact (“UNGC”), and the European Convention for the Pro-
tection of Human Rights. In 2020 the Company incorporated a
section on human rights into a new online training module on
compliance, human rights, and cyber and data security. This
module is mandatory for all employees and conducted annually.
At year-end, 87.3 percent had completed this training.

The standards for human rights and ethical business practices
E.ON requires its suppliers to meet are defined in the Supplier
Code of Conduct, which was updated in 2020 and adopted by
the former innogy’s units. The updated version contains a more
detailed description of corporate social responsibility (“CSR”)
requirements and information about how to contact E.ON’s

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of new suppliers that participated in their first SPR. The total
number of reviews increased by 88 percent. Furthermore, E.ON
again scrutinized its non-fuel suppliers to identify those with
a large carbon footprint and explored ways to encourage their
decarbonization. In 2021 E.ON plans to conduct a more in-depth
analysis of non-fuel suppliers’ climate performance and to
recommend amelioration measures.

The Company is committed to procuring fuels responsibly and
sustainably. Suppliers of solid biomass must, like non-fuel
suppliers, contractually agree to comply with the E.ON Supplier
Code of Conduct. In addition, the E.ON Biomass Purchasing
Amendment defines the Company’s policies and procedures,
which include risk assessments, supplier audits, and provisions
for joint ventures. The amendment is part of all contracts with
biomass suppliers. They must pledge to respect human rights,
safeguard the general living conditions of persons affected by
biomass production, and protect biodiversity and the environment.

Similar to the procuring of solid biomass, E.ON’s Supplier Code of
Conduct is integrated into contracts for procuring uranium and
nuclear fuel assemblies and supplemented by the Nuclear Fuel
Purchasing Amendment and the E.ON Nuclear Fuel Policy which
define further standards. E.ON purchases uranium exclusively
from established suppliers with proven experience. Additionally,
further performance evaluations of fuel-suppliers are conducted
which can include reviews or on-site audits.

E.ON’s goal is to prevent human rights abuses, environmental
damage, and corporate malfeasance by identifying associated
risks along its value chain from a holistic point of view. Periodic
risk assessments enable E.ON to identify violations or suspected
violations. Suppliers with identified violations or suspected vio-
lations are listed in a new KPI (“Suppliers under investigation/
observation”) that was added to Supply Chain’s quarterly
reporting in 2020. In such cases, the Supply Chain Compliance
Officer and the respective Supply Chain Director are notified,
and a process is set in motion to ensure that the situation is
rectified without delay. If it is not, E.ON terminates its business
dealings with the supplier. In 2020 no business dealings were
terminated because no compliance violations were detected.

whistle-blower hotline. The supplier prequalification process
consists of self-registration, formal agreement to adhere to
E.ON’s Supplier Code of Conduct, and a compliance check. Non-
fuel suppliers that are not subject to supplier onboarding must
agree to the Company’s General Terms and Conditions for Pur-
chase Contracts, which are legally binding. These oblige non-
fuel suppliers, among other things, to comply with the Supplier
Code of Conduct and to endorse the UNGC’s principles. In addi-
tion, the Supply Chain Function Policy and Supply Chain Hand-
book define Group-wide principles, processes, and responsibilities
for non-fuel procurement, excluding the exceptional cases
covered under the exception list (such as commodity, financial
and real estate transactions, insurance, taxes).

Onboarding assessments help E.ON do business exclusively
with suppliers committed to its standards. At the end of 2018
E.ON put in place a revised and fully digital supplier onboarding
solution that is integrated into the Company’s enterprise resource
planning system. In 2019 E.ON focused on monitoring existing
and new suppliers to ensure that they comply with its minimum
requirements. In October 2020 units of the former innogy
adopted this supplier onboarding process. Every non-fuel supplier
whose individual transaction volume exceeds €25,000 or whose
health, safety, and environment risk is medium or high must
complete an online onboarding process. In some cases, E.ON
may take additional steps during the supplier onboarding process,
such as conducting a supplier audit to assess, among other
issues, whether the supplier complies with E.ON’s standards for
human rights. As of year-end 2020, 99.3 percent of the E.ON
Group’s purchase order and contract call-offs had completed the
onboarding process (former E.ON units). In addition, E.ON peri-
odically conducts supplier performance reviews (“SPR”) of its key
non-fuel suppliers using five key performance indicators (“KPIs”):
quality, commercial, delivery, processes and innovation, and
CSR; the latter includes the protection of human rights. The
respective results are discussed with each supplier during a
performance review meeting. The outcome of the meeting may
trigger specific actions for the supplier to improve its perfor-
mance in one or more of the KPIs if it wants to continue doing
business with E.ON. At the end of 2019 E.ON and innogy drew
on their respective best practices to harmonize the SPR process.
The harmonized process has been in place since January 1, 2020.
Since then, innogy’s key suppliers were assessed for their ESG
performance as well, an aspect that had not been part of the
former innogy’s SPR. In 2020 E.ON increased the proportion

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E.ON’s employees can report potential violations of human rights
through internal reporting channels or a Group-wide external
whistle-blower hotline. In December 2019 E.ON extended the
hotline service and published the hotline number online. Not
only E.ON employees, but also business partners, their employ-
ees and other third parties can contact this hotline confidentially.
The hotline can process calls in the languages of all countries
in which E.ON operates. Group Compliance forwards the infor-
mation to the relevant department or unit. Depending on the
nature and severity of the potential violation, Group Compliance
may report it immediately to the E.ON Management Board,
notify law enforcement, initiate its own investigation, or take
other appropriate action. In 2020 no violation of human rights
was reported through these channels.

Begun in 2017, the German National Action Plan on Business
and Human Rights (“NAP”) serves as a forum for companies,
trade associations, policymakers, non-governmental organiza-
tions, and academia to promote respect for human rights along
the value chain. The NAP defines guiding principles for embedding
human rights due diligence (“HRDD”) into corporate strategy
and business processes and encourages companies to conduct
voluntary HRDD. In April 2020 E.ON again participated in vol-
untary NAP monitoring, which was organized by the German
government. E.ON first participated in 2019, when it conducted
a rigorous benchmarking and a human rights risk assessment
encompassing 80 percent of its current and anticipated expen-
ditures and in all purchasing categories. In 2020 Supply Chain
designed a systematic process for rolling out a risk matrix devel-
oped in 2019. The purpose of the matrix, which breaks down
risks by country and purchasing category, is to mitigate any
potential risk of human rights violations. In 2021 the Company
plans to review the matrix with regard to the new E.ON’s sup-
pliers (including the former innogy’s suppliers, which were not
included in 2020) and to update it on a regular basis. All of the
above-mentioned activities are embedded into the Group Supply
Chain function’s overall Supplier Relationship Management
(“SRM”) system.

Aspect 5: Anti-Corruption

Compliance and Anti-Corruption
E.ON is committed to combating corruption in all its manifesta-
tions and supports national and international efforts directed
against it. E.ON rejects it as a member of the UN Global Compact
as well. Corruption leads to decisions being made for the wrong
reasons. It can thus impede progress and innovation, distort
competition, and do long-term damage to companies. Employ-
ees, managers, and board members guilty of corruption may be
subject to fines and criminal prosecution. To earn stakeholders’
lasting trust, E.ON closely monitors compliance with laws and
its own policies. If violations occur, E.ON deals with them trans-
parently and, if necessary, takes disciplinary action.

The E.ON Management Board has the ultimate responsibility for
ensuring compliance with applicable laws and for monitoring
compliance risks. The E.ON Group has an effective compliance
management system (“CMS”). The CMS sets uniform Group-
wide minimum standards for certain compliance issues, such
as anti-corruption. Pursuant to a Group-wide policy, the Chief
Compliance Officer (“CCO”), the Group Compliance division,
and the business units’ Compliance Officers are responsible for
refining and optimizing the CMS on a continual basis.

The CCO reports on a quarterly basis to the E.ON Management
Board and to the Supervisory Board’s Audit and Risk Committee
on the status of the CMS’s effectiveness and current develop-
ments and incidents. In the event of serious incidents, the Man-
agement Board and the Audit and Risk Committee are informed
immediately. The same applies to important new laws. Potential
violations are investigated centrally by Group Audit and Group
Compliance.

E.ON’s Code of Conduct focuses on the guiding principle,
“Doing the right thing.” It is supplemented by several People
Guidelines that lay down specific rules (“Doing things right”).

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

115

E.ON employees, but also business partners, their employees
and other third parties can contact the hotline confidentially.
Group Compliance forwards the information to the relevant
department or unit.

E.ONs wants to ensure compliance standards in its supply chain
as well. All non-fuel suppliers and all suppliers of uranium and
solid biomass must therefore sign the Supplier Code of Conduct,
which contains binding standards for ethical business practices.
It was updated in 2020 and adopted by the former innogy units.
In addition, E.ON conducts compliance checks to determine
whether potential suppliers act in accordance with the company’s
values and principles. Also, E.ON subjects potential suppliers
to a prequalification, which involves checking their identity and
integrity to ensure that they meet E.ON’s compliance standards.
It includes searching media reports for references to a supplier
in connection with compliance issues such as corruption and
checking official sanction and terrorism lists. In some cases,
potential suppliers must also complete a questionnaire, which
E.ON evaluates carefully. Prequalification is mandatory for all
new suppliers.

The effectiveness of E.ON’s CMS is the main indicator of the
Company’s compliance performance for purposes of manage-
ment control. All compliance measures, policies, processes,
controls, and so forth are assessed and guided by this criterion.
The CMS’s effectiveness is also monitored by the E.ON Manage-
ment Board, the Supervisory Board’s Audit and Risk Committee,
and Group Audit. The latter, an independent entity, is E.ON’s
third line of defense for monitoring the CMS. The criteria E.ON
uses for monitoring effectiveness include assessing whether
and how prescribed measures are implemented across E.ON.
The Management Board and the Audit and Risk Committee are
convinced that the CMS was again effective in 2020. Their
assessment was based in part on audits as well as surveys and
interviews of employees and stakeholders.

As a compulsory reference, the Code helps employees make
the right decisions in various professional situations and remain
true to the Company’s values. In the preface, the E.ON Manage-
ment Board calls on all employees to act in a correct manner in
order to protect themselves and the Company. The introduction
explains why a Code of Conduct is needed. The main body of
the Code contains comprehensible guidance on all issues that
are of particular concern to E.ON. These include human rights,
anti-corruption, fair competition, and compliant relationships
with business partners. The Code also contains an integrity
check. By answering just a few questions, employees can find
out whether their assessments are in compliance with E.ON
principles and values. The Code clearly states E.ON’s prohibition
against company donations to political parties, political candi-
dates, managers of political offices, and representatives of
public agencies.

Managers and employees of business partners may—within
predefined limits—be invited to events and restaurants, or
receive gifts. The Anti-Corruption People Guideline contains a
decision-making scheme that uses the familiar green, amber,
and red of traffic lights to indicate when accepting or granting
such offers or gifts is permissible, potentially problematic, or
forbidden. Gratuities above a certain threshold, which varies
by country and national regulations, must receive Compliance
Officer approval. Particularly strict requirements apply to invi-
tations and gifts from public, elected, and government officials
and their representatives.

To determine in which functions the risk for some compliance
violations is particularly high, E.ON conducts compliance risk
assessments on a regular basis. Based on their findings, preven-
tive measures are taken.

If employees suspect misconduct or a violation of laws or com-
pany policies, they are instructed to report it immediately. If they
wish, they may do so anonymously through internal reporting
channels or a Group-wide external whistle-blower hotline, which
E.ON operates with a law firm in all E.ON languages. Not only

Consolidated
Financial
Statements

118 E.ON SE and Subsidiaries Consolidated Statements of Income

119 E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses

120 E.ON SE and Subsidiaries Balance Sheets–Assets

121 E.ON SE and Subsidiaries Balance Sheets–Equity and Liabilities

122 E.ON SE and Subsidiaries Consolidated Statements of Cash Flows

124 Statement of Changes in Equity

126 Notes
126
140
141
142
142
149
149
149
151
151
152
155
158
159
159
168
171
171
172
172
174
174
175
175
177
184
187
192
193
194
194
198
208
210
211
216
217
218

(1) Summary of Significant Accounting Policies
(2) New Standards and Interpretations
(3) Impact of the Covid-19 Pandemic
(4) Scope of Consolidation
(5) Acquisitions, Disposals and Discontinued Operations
(6) Revenues
(7) Own Work Capitalized
(8) Other Operating Income and Expenses
(9) Cost of Materials
(10) Financial Results
(11) Income Taxes
(12) Personnel-Related Information
(13) Other Information
(14) Earnings per Share
(15) Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment
(16) Companies Accounted for under the Equity Method and Other Financial Assets
(17) Inventories
(18) Receivables and Other Assets
(19) Liquid Funds
(20) Capital Stock
(21) Additional Paid-in Capital
(22) Retained Earnings
(23) Changes in Other Comprehensive Income
(24) Non-controlling Interests
(25) Provisions for Pensions and Similar Obligations
(26) Miscellaneous Provisions
(27) Liabilities
(28) Contingent Liabilities and Other Financial Obligations
(29) Litigation and Claims
(30) Supplemental Cash Flow Disclosures
(31) Derivative Financial Instruments and Hedging Transactions
(32) Additional Disclosures on Financial Instruments
(33) Leasing
(34) Transactions with Related Parties
(35) Segment Reporting
(36) Compensation of Supervisory Board and Management Board
(37) Subsequent Events
(38) List of Shareholdings Pursuant to Section 313 (2) HGB

E.ON SE and Subsidiaries Consolidated Statements of Income

€ in millions

Sales including electricity and energy taxes

Electricity and energy taxes

Sales 2

Changes in inventories (finished goods and work in progress)

Own work capitalized

Other operating incomes 2

Cost of materials 2

Personnel costs

Depreciation, amortization and impairment charges

Other operating expense s 2

Thereof: Impairments of Financial Assets

Income from companies accounted for under the equity method

Income from continuing operations before financial results and income taxes

Financial results

Income/Loss from equity investments
Income from other securities, interest and similar income
Interest and similar expenses

Income taxes

Income from continuing operations

Income/Loss from discontinued operations, net

Net income

Attributable to shareholders of E.ON SE
Attributable to non-controlling interests

in €

Earnings per share (attributable to shareholders of E.ON SE)—basic and diluted 3

from continuing operations

from discontinued operations

from net income

Weighted-average number of shares outstanding (in millions)

118

2020 1

63,605

-2,661

60,944

680

8,907

2019

42,192

-1,389

40,803

-125

487

5,367

-47,147

-31,434

-5,866

-4,166

-10,919

-317

408

2,883

-702
18
670
-1,390

-871

1,310

-40

1,270
1,017
253

0.41

-0.02

0.39

2,607

-4,101

-2,489

-7,570

-290

421

1,359

-587
58
1,032
-1,677

-43

729

1,063

1,792
1,550
242

0.24

0.44

0.68

2,293

Note

(6)

(7)

(8)

(9)

(12)

(15)

(8)

(10)

(11)

(5)

(14)

1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition until September 18, 2020; the previous year was adjusted
accordingly.
2Adjustment of prior-year figures in the context of “failed-own-use” accounting regarding presentation of sales, cost of materials, other operating income and other operating expenses with no
impact on earnings.
3Based on weighted-average number of shares outstanding.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

119

E.ON SE and Subsidiaries Consolidated Statements of Recognized Income and Expenses

€ in millions

Net income

Remeasurements of defined benefit plans

Remeasurements of defined benefit plans of companies accounted for under the equity method

Income taxes

Items that will not be reclassified subsequently to the income statement

Cash flow hedges

Unrealized changes—hedging reserve
Unrealized changes—reserve for hedging costs
Reclassification adjustments recognized in income

Fair value measurement of financial instruments

Unrealized changes
Reclassification adjustments recognized in income

Currency–translation adjustments

Unrealized changes—hedging reserve /other
Unrealized changes—reserve for hedging costs
Reclassification adjustments recognized in income

Companies accounted for under the equity method

Unrealized changes
Reclassification adjustments recognized in income

Income taxes

Items that might be reclassified subsequently to the income statement

Total income and expenses recognized directly in equity

Total recognized income and expenses (total comprehensive income)

Attributable to shareholders of E.ON SE

Continuing operations
Discontinued operations

Attributable to non-controlling interests

2020 1

1,270

-1,093

-19

217

-895

-358
-464
-42
148

50
52
-2

-214
-300
-1
87

-342
-342
–

-845

-1,740

-470
-579
-497
-82
109

2019

1,792

-146

-36

-171

-453
-438
-3
-12

-1
29
-30

-569
-180
1
-390

-123
-116
-7

-1,138

-1,309

483
211
-333
544
272

E.ON SE and Subsidiaries Balance Sheets–Assets

€ in millions

Goodwill 2

Intangible assets

Right-of-use assets

Property, plant and equipment

Companies accounted for under the equity method

Other financial assets
Equity investments
Non-current securities

Financial receivables and other financial assets

Operating receivables and other operating assets

Deferred tax assets

Income tax assets

Non-current assets

Inventories

Financial receivables and other financial assets

Trade receivables and other operating assets

Income tax assets

Liquid funds

Securities and fixed-term deposits
Restricted cash and cash equivalents
Cash and cash equivalents

Assets held for sale

Current assets

Total assets

120

December 31,

2019 1

17,481

4,138

2,582

2020

17,827

3,855

2,543

36,923

35,750

4,383

3,770
1,883
1,887

622

3,244

2,283

5,232

4,084
1,730
2,354

699

3,592

2,194

75,484

75,786

1,131

445

1,252

490

11,525

14,207

1,003

4,795
1,111
1,016
2,668

1,002

19,901

95,385

1,377

3,602
1,197
511
1,894

1,366

22,294

98,080

Note

(15)

(33)

(15)

(16)

(18)

(11)

(17)

(18)

(11)

(19)

(5)

1Certain adjustments to the preliminary accounting for the innogy acquisition, which was provisional until September 18, 2020, must be presented retrospectively to the acquisition date.
The prior-year figures were adjusted accordingly.
2Includes the preliminary differential amount from the VSE purchase-price allocation (see Note 5).

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

121

Note

(20)

(21)

(22)

(23)

(20)

(24)

(27)

(11)

(25)

(26)

(11)

(27)

(11)

(26)

(5)

December 31,

2019 1

2,641

13,368

-1,927

-3,857

-1,126

9,099

5,632

-1,483

4,149

13,248

27,572

7,940

293

7,201

13,468

2,508

58,982

3,841

16,601

787

4,019

602

25,850

98,080

2020

2,641

13,368

-5,257

-4,701

-1,126

4,925

5,696

-1,566

4,130

9,055

29,423

7,599

362

8,088

13,296

2,993

61,761

3,418

16,215

847

3,904

185

24,569

95,385

E.ON SE and Subsidiaries Balance Sheets–Equity and Liabilities

€ in millions

Capital stock

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income 3

Treasury shares

Equity attributable to shareholders of E.ON SE

Non-controlling interests (before reclassification)

Reclassification related to put options

Non-controlling interests

Equity

Financial liabilities

Operating liabilities

Income tax liabilities

Provisions for pensions and similar obligations

Miscellaneous provisions

Deferred tax liabilities

Non-current liabilities

Financial liabilities

Trade payables and other operating liabilities

Income tax liabilities

Miscellaneous provisions

Liabilities associated with assets held for sale

Current liabilities

Total equity and liabilities

1Certain adjustments to the preliminary accounting for the innogy acquisition, which was provisional until September 18, 2020, must be presented retrospectively to the acquisition date.
The prior-year figures were adjusted accordingly.
2Thereof relating to discontinued operations (December 31, 2020): €17 million; (December 31, 2019): -€43 million.

E.ON SE and Subsidiaries Consolidated Statements of Cash Flows

€ in millions

Net income

Income/Loss from discontinued operations, net

Depreciation, amortization and impairment of intangible assets and of property, plant and equipment

Changes in provisions

Changes in deferred taxes

Other non-cash income and expenses

Gain/Loss on disposal of intangible assets and property, plant and equipment, equity investments and securities (>3 months)

Intangible assets and property, plant and equipment
Equity investments
Securities (>3 months)

Changes in operating assets and liabilities and in income taxes

Inventories
Trade receivables
Other operating receivables and income tax assets
Trade payables
Other operating liabilities and income taxes

Cash provided by (used for) operating activities of continuing operations

Cash provided by (used for) operating activities of discontinued operations

Cash provided by (used for) operating activities (operating cash flow)

Proceeds from disposal of

Intangible assets and property, plant and equipment
Equity investments

Purchases of investments in

Intangible assets and property, plant and equipment
Equity investments 1

Proceeds from disposal of securities (>3 months) and of financial receivables and fixed-term deposits

Purchases of securities (>3 months) and of financial receivables and fixed-term deposits

Changes in restricted cash and cash equivalents

Cash provided by (used for) investing activities of continuing operations

Cash provided by (used for) investing activities of discontinued operations

Cash provided by (used for) investing activities

Payments received/made from changes in capital 2

Cash dividends paid to shareholders of E.ON SE

Cash dividends paid to non-controlling interests

Proceeds from financial liabilities

Repayments of financial liabilities

Cash provided by (used for) financing activities of continuing operations

Cash provided by (used for) financing activities of discontinued operations

Cash provided by (used for) financing activities

122

2020

1,270

4,166

169

495

-229

-328
6
-353
19

-296
104
240
423
-508
-555

5,287

5,313

2,820
234
2,586

-4,171
-4,362
191

2,036

-2,047

-515

-1,877

-1,864

-2,393

-1,199

-364

6,640

-5,308

-2,624

–

-2,624

2019 5

1,792

-1,063

2,489

486

-251

-230

-466
-38
-392
-36

56
129
-867
686
431
-323

2,813

152

2,965

256
192
64

-4,784
-3,241
-1,543

1,803

-2,576

197

-5,104

-716

-5,820

-342

-932

-188

5,824

-3,377

985

-193

792

1Including the settlement payment received from the transfer of business activities with RWE. These payments reduce the investments.
2The decrease is primarily due to the merger-related squeeze-out of the remaining minority shareholders of innogy. No material netting has taken place in either of the years presented here.
5Adjusted prior-year figures.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

123

E.ON SE and Subsidiaries Consolidated Statements of Cash Flows

€ in millions

Net increase/decrease in cash and cash equivalents

Effect of foreign exchange rates on cash and cash equivalents

Cash and cash equivalents at the beginning of the year 3

Cash and cash equivalents of discontinued operations at the beginning of the period

Cash and cash equivalents at the end of the period

Less: Cash and cash equivalents of discontinued operations at the end of the period

Cash and cash equivalents of continuing operations at the end of the period 4

Supplementary information on cash flows from operating activities

Income taxes paid (less refunds)

Interest paid

Interest received

Dividends received

2020

825

-74

1,902

2,667

-1,168

463

488

2019 5

-2,063

-11

3,924

1,916

-14

1,902

-754

-1,219

568

448

3Cash and cash equivalents of continuing operations at the beginning of the period also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal group in
the third quarter of 2019 and €4 million attributable to the sales operations of the heating electricity business in Germany, also reclassified as a disposal group, that were sold in the second quarter
of 2020.
4Cash and cash equivalents of continuing operations at the end of the period of the prior year also include €4 million attributable to the sales operations in Hungary that were reclassified as a disposal
group in the third quarter of 2019 and €4 million attributable to the sales operations of the heating electricity business in Germany, also reclassified as a disposal group.
5Adjusted prior-year figures.

Statement of Changes in Equity

Statement of Changes in Equity 1

€ in millions

Balance as of December 31, 2018

IFRS 16 adjustment

Capital
stock

2,201

124

Changes in accumulated other comprehensive income

Additional
paid-in
capital

Retained
earnings

Currency translation
adjustments

Hedging
reserve/
other

Reserve for
hedging
costs

Fair value
measure-
ment of
financial
instruments

9,862

-2,461

-1,775

Balance as of January 1, 2019

2,201

9,862

-2,460

-1,775

Change in scope of consolidation

-16

-1

Capital increase

Dividends

Share additions/reductions

Net additions/disposals from
reclassification related to put
options

Total comprehensive income

Net income/loss
Other comprehensive income

Remeasurements of defined
benefit plans
Changes in accumulated
other comprehensive
income

Balance as of December 31, 2019

Balance as of January 1, 2020

Change in scope of consolidation

Capital increase

Dividends

Share additions/reductions

Net additions/disposals from
reclassification related to put
options

Total comprehensive income

Net income/loss
Other comprehensive income

Remeasurements of defined
benefit plans
Changes in accumulated
other comprehensive
income

440

3,506

2,641

13,368

-932

133

1,348
1,550
-202

-202

-1,927

-1,199

-2,405

267
1,017
-750

-750

Balance as of December 31, 2020

2,641

13,368

-5,257

1Adjusted prior-year figures.

-689

-2,465

-505

-2,969

Cash flow hedges

Hedging
reserve

-978

-440

-1,418

-332

-1,749

Reserve for
hedging
costs

Equity attributable

to shareholders of

Non-controlling

interests

Reclassification related

Non-controlling

Treasury shares

E.ON SE

(before reclassification)

to put options

-15

-3

-18

-42

-60

-1,126

–

-1,126

5,757

5,758

-17

3,946

-932

133

211

1,550

-1,339

-202

-1,137

9,099

-1,199

-2,405

-579

1,017

-1,596

-750

-846

4,925

3,191

3,192

2,756

-240

-364

272

242

-1

5,632

238

-380

109

253

-144

-145

5,696

-1,053

-430

–

-430

-1,483

-83

interests

2,761

2,762

2,756

-240

-364

272

242

-1

4,149

238

-380

-83

109

253

-144

-145

4,130

Total

8,518

8,520

2,739

3,962

-1,172

-231

-1,053

483

1,792

-1,309

-171

-1,138

13,248

247

-1,579

-2,308

-83

-470

1,270

-1,740

-895

-845

9,055

-1,126

-1,566

-1

-6

Statement of Changes in Equity 1

€ in millions

IFRS 16 adjustment

Capital

stock

2,201

Additional

paid-in

capital

9,862

Retained

earnings

Balance as of December 31, 2018

-2,461

-1,775

Balance as of January 1, 2019

2,201

9,862

-2,460

-1,775

Change in scope of consolidation

-16

-1

440

3,506

Changes in accumulated other comprehensive income

Currency translation

adjustments

Hedging

reserve/

other

Reserve for

hedging

Fair value

measure-

ment of

financial

costs

instruments

Cash flow hedges

Reserve for

hedging

costs

Hedging

reserve

-978

2,641

13,368

Capital increase

Dividends

Share additions/reductions

Net additions/disposals from

reclassification related to put

options

Total comprehensive income

Net income/loss

Other comprehensive income

Remeasurements of defined

benefit plans

Changes in accumulated

other comprehensive

income

Balance as of December 31, 2019

Balance as of January 1, 2020

Change in scope of consolidation

Capital increase

Dividends

Share additions/reductions

Net additions/disposals from

reclassification related to put

options

Total comprehensive income

Net income/loss

Other comprehensive income

Remeasurements of defined

benefit plans

Changes in accumulated

other comprehensive

income

1Adjusted prior-year figures.

-1

-6

-440

-1,418

-332

-1,749

-15

-3

-18

-42

-60

-932

133

1,348

1,550

-202

-1,927

-1,199

-2,405

267

1,017

-750

-689

-2,465

-505

-2,969

Treasury shares

-1,126

–

-1,126

Balance as of December 31, 2020

2,641

13,368

-5,257

-1,126

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

125

Equity attributable
to shareholders of
E.ON SE

Non-controlling
interests
(before reclassification)

Reclassification related
to put options

Non-controlling
interests

5,757

5,758

-17

3,946

-932

133

211
1,550
-1,339

-202

-1,137

9,099

-1,199

-2,405

-579
1,017
-1,596

-750

-846

4,925

3,191

3,192

2,756

-240

-364

272
242
30

-1

5,632

238

-380

109
253
-144

-145

5,696

-430

–

-430

2,761

2,762

2,756

-240

-364

-1,053

272
242
30

-1

4,149

238

-380

-83

109
253
-144

-145

4,130

-1,483

-83

-1,566

Total

8,518

8,520

2,739

3,962

-1,172

-231

-1,053

483
1,792
-1,309

-171

-1,138

13,248

247

-1,579

-2,308

-83

-470
1,270
-1,740

-895

-845

9,055

Notes

126

(1) Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements of E.ON SE, Essen, reg-
istered in the Commercial Register of Essen District Court under
number HRB 28196, have been prepared in accordance with
Section 315e (1) of the German Commercial Code (“HGB”) and
with those International Financial Reporting Standards (“IFRS”)
and IFRS Interpretations Committee interpretations (“IFRIC”)
that were adopted by the European Commission for use in the
EU as of the end of the fiscal year, and whose application was
mandatory as of December 31, 2020.

Principles

The Consolidated Financial Statements of the E.ON Group (“E.ON”
or the “Group”) are generally prepared at cost, with the exception
of financial assets that are measured at fair value through OCI
(FVOCI) and of financial assets and liabilities (including deriva-
tive financial instruments) that are recognized in income and
measured at fair value through profit or loss (FVPL).

Scope of Consolidation
The Consolidated Financial Statements incorporate the finan-
cial statements of E.ON SE and entities controlled by E.ON
(“subsidiaries”). Control exists when E.ON as the investor can
direct the activities relevant to the business performance of
the entity, participate in this business performance in the form
of variable returns and influence the performance and the
related variable returns through its involvement. Control is nor-
mally deemed established if E.ON directly or indirectly holds a
majority of the voting rights in the investee. In structured entities,
control can be established by means of contractual arrangements
if control is not demonstrated through possession of a majority
of the voting rights.

The results of the subsidiaries acquired or disposed of during
the year are included in the Consolidated Statement of Income
from the date of acquisition or until the date of their disposal,
respectively.

If a subsidiary or associate sells shares to a third party, leading
to a reduction in E.ON’s ownership interest in these investees
(“dilution”), and consequently to a loss of control, joint control

or significant influence, gains and losses from these dilutive
transactions are included in the income statement under other
operating income or expenses.

Where necessary, adjustments are made to the subsidiaries’
financial statements to bring their accounting policies into line
with those of the Group. Intercompany receivables, liabilities
and results are eliminated in the consolidation process.

Associated Companies
An associate is an investee over whose financial and operating
policy decisions E.ON has significant influence and that is not
controlled by E.ON or jointly controlled with E.ON. Significant
influence is presumed if E.ON directly or indirectly holds at least
20 percent, but not more than 50 percent, of an entity’s voting
rights.

Interests in associated companies are accounted for using the
equity method.

Interests in associated companies accounted for using the equity
method are reported on the balance sheet at cost, adjusted for
changes in the Group’s share of the net assets after the date of
acquisition and for any impairment charges. Losses that might
potentially exceed the Group’s interest in an associated company
when attributable long-term loans are taken into consideration
are generally not recognized. Any difference between the cost
of the investment and the pro rata remeasured value of its net
assets is recognized in the Consolidated Financial Statements
as part of the carrying amount.

Unrealized gains and losses arising from transactions with
associated companies accounted for using the equity method
are eliminated within the consolidation process on a pro rata
basis if they are material.

Companies accounted for using the equity method are tested for
impairment by comparing the carrying amount with its recover-
able amount. If the carrying amount exceeds the recoverable
amount, the carrying amount is adjusted for this difference. If the
reasons for previously recognized impairment losses no longer
exist, such impairment losses are reversed accordingly.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

127

The financial statements of equity interests accounted for using
the equity method are generally prepared using accounting that
is uniform within the Group.

Joint Ventures
Joint ventures are also accounted for using the equity method.
Unrealized gains and losses arising from transactions with joint-
venture companies are eliminated within the consolidation
process on a pro rata basis if they are material.

Joint Operations
A joint operation exists when E.ON and other investors directly
control an operation, but unlike a joint venture, they do not have
a claim to the changes in net assets from the operation. Instead,
they have direct rights to individual assets or direct obligations
with respect to individual liabilities in connection with the oper-
ation. E.ON recognizes assets and liabilities as well as revenues
and expenses in a joint operation pro rata according to the rights
and obligations attributable to E.ON.

Business Combinations
Business combinations are accounted for using the purchase
method, under which the purchase price is offset against the
proportional share in the acquired company’s net assets. The
values at the acquisition date that corresponds to the date at
which control of the acquired company was attained are used
as a basis. The acquiree’s identifiable assets, liabilities and con-
tingent liabilities are generally recognized at their fair values
irrespective of the extent attributable to non-controlling inter-
ests. The fair values are determined using published exchange or
market prices at the time of acquisition in the case of marketable
securities or commodities, for example, and in the case of land,
buildings and major technical equipment, generally using inde-
pendent expert reports that have been prepared by third parties.
If exchange or market prices are unavailable for consideration,
fair values are derived from market prices for comparable assets
or comparable transactions. If these values are not directly
observable, fair value is determined using appropriate valuation
methods. In such cases, E.ON determines fair value using the
discounted cash flow method by discounting estimated future
cash flows by a weighted-average cost of capital. Estimated
cash flows are consistent with the internal mid-term planning
data for the next three years, followed by two additional years
of cash flow projections, which are extrapolated through the end
of an asset’s useful life using a growth rate based on industry
and internal projections. In certain justified exceptional cases,
a longer detailed planning period is used as the calculation basis.

The discount rate reflects the specific risks inherent in the
acquired activities. In the network area, fair values are generally
determined by means of fair values in kind. The valuation of
customer groups also deviates from the general procedure
described above.

Non-controlling interests can be measured either at cost (partial
goodwill method) or at fair value (full goodwill method). The
choice of method can be made on a case-by-case basis. The
partial goodwill method is generally used within the E.ON Group.

Transactions with holders of non-controlling interests are treated
in the same way as transactions with investors. Should the
acquisition of additional shares in a subsidiary result in a differ-
ence between the cost of purchasing the shares and the carrying
amounts of the non-controlling interests acquired, that difference
must be fully recognized in equity.

Gains and losses from disposals of shares to subsidiaries are
also recognized in equity, provided that such disposals do not
coincide with a loss of control.

Intangible assets must be recognized separately if they are
clearly separable or if their recognition arises from a contractual
or other legal right. Provisions for restructuring measures may
not be recorded in a purchase price allocation. If the purchase
price paid exceeds the proportional share in the net assets at
the time of acquisition, the positive difference is recognized as
goodwill. No goodwill is recognized for positive differences
attributable to non-controlling interests. A negative difference
is recognized in net income.

Foreign Currency Translation
The Company’s transactions denominated in foreign currency are
translated at the current exchange rate at the date of the trans-
action. At each balance sheet date monetary foreign currency
items are adjusted to the exchange rate on the reporting date;
any gains and losses resulting from fluctuations in the relevant
currencies are recognized in net income and reported as other
operating income and other operating expenses, respectively.
Gains and losses from the translation of non-derivative financial
instruments used in hedges of net investments in foreign
operations are recognized in equity as a component of other
comprehensive income. The ineffective portion of the hedging
instrument is immediately recognized in net income.

128

The functional currency as well as the reporting currency of
E.ON SE is the euro. The assets and liabilities of the Company’s
foreign subsidiaries with a functional currency other than the
euro are translated using the exchange rates applicable on the
balance sheet date, while items of the statements of income
are translated using annual average exchange rates. Material
transactions of foreign subsidiaries occurring during the fiscal
year are translated in the financial statements using the exchange
rate at the date of the transaction. Differences arising from
the translation of assets and liabilities compared with the corre-
sponding translation of the prior year, as well as exchange rate
differences between the income statement and the balance
sheet, are reported separately in equity as a component of other
comprehensive income.

Foreign currency translation effects that are attributable to the
cost of monetary financial instruments classified as at fair value
through OCI are recognized in income. In the case of fair-value
adjustments of monetary financial instruments, the foreign cur-
rency translation effects are recognized in equity as a component
of other comprehensive income.

The following table depicts the movements in exchange rates for
the periods indicated for major currencies of countries outside
the European Monetary Union:

Currencies

British pound

Danish krone

Polish złoty

Romanian leu

Swedish krona

Czech crown

Turkish lira

€1, rate at
year-end

€1, annual
average rate

2020

2019

2020

2019

0.90

7.44

4.56

4.87

0.85

7.47

4.26

4.78

0.89

7.45

4.44

4.84

0.88

7.47

4.3

4.75

10.03

10.45

10.48

10.59

26.24

25.41

26.46

25.67

9.11

6.68

8.05

6.36

ISO-
code

GBP

DKK

PLN

RON

SEK

CZK

TRY

Hungarian forint

HUF

363.89 330.53

351.25

325.3

U.S. dollar

USD

1.23

1.12

1.14

1.12

Recognition of Income
a) Revenues
Revenues are generated primarily from the sale of electricity
and gas to retail customers, industrial and commercial cus-
tomers and wholesale markets. Revenues earned from the dis-
tribution of electricity and gas and from deliveries of steam and
heat are also primarily recognized under revenues.

Since the introduction of IFRS 15 with effect from January 1,
2018, revenues no longer include the fees for the promotion of
Renewables because these revenues are netted with the corre-
sponding cost of materials (net disclosure).

Revenues are generally recognized when E.ON fulfills its perfor-
mance obligation by transferring a promised good or service to
a customer. An asset is deemed to be transferred when the cus-
tomer obtains control of the asset. The majority of the E.ON
Group’s performance obligations are fulfilled over time. The rel-
atively subordinate point-in-time revenue recognition occurs
primarily in the “Build & Sell” segment and for so-called linear
products, where a fixed amount of energy is provided to com-
mercial customers at a specific point in time. Revenue is recog-
nized when control is transferred to the customer, which means
that no significant discretionary decisions are required. For all
such revenues, progress is measured using output-based meth-
ods. The methods used appropriately reflect the pattern of trans-
fer of goods to customers or provision of services for customers.
Revenues from the sale of goods and services are measured
using the transaction prices allocated to these goods and services.
They reflect the value of the volume supplied, including an esti-
mated value of the volume supplied to customers between
the date of the last invoice and the end of the period. Monthly
advance payments for B2C customers are generally determined
on the basis of historical consumption data and peak payments
are settled at the end of the year. In B2B, a bottom-up approach
is used to calculate individual rates. E.ON’s sales transactions
generally are not based on any material finance components.
The average target payment period is between 14 and 45 days.
In individual cases, the payment period can also be below the

Notes
Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

129

Newly created goodwill is allocated to those cash-generating
units expected to benefit from the respective business combi-
nation. The cash-generating units to which goodwill is allocated
are generally equivalent to the operating segments, since good-
will is reported, and considered in performance metrics for
controlling, only at that level. If goodwill cannot be allocated
arbitrarily to individual cash-generating units but instead can
only be allocated to groups of cash-generating units, the lowest
level within the unit at which the goodwill is monitored for
internal management purposes then includes several cash-
generating units to which the goodwill relates but to which it
cannot be allocated individually. Goodwill impairment testing
is performed in euro, while the underlying goodwill is always
carried in the functional currency.

In a goodwill impairment test, the recoverable amount of a
cash- generating unit is compared with its carrying amount,
including goodwill. The recoverable amount is the higher of the
cash-generating unit’s fair value less costs to sell and its value in
use. In a first step, E.ON determines the recoverable amount of
a cash-generating unit on the basis of the fair value (less costs
to sell) using generally accepted valuation procedures. Valuation
is performed using the discounted cash flow method unless
market transactions or valuations prepared by third parties for
com parable assets which are higher-level in the fair value hier-
archy according to IFRS 13 are available. If needed, a calculation
of value in use is also performed. Unlike fair value, the value in
use is calculated from the viewpoint of management. In accor-
dance with IAS 36, “Impairment of Assets,” (“IAS 36”) it is
further ensured that restructuring expenses, as well as initial
and subsequent capital investments (where those have not
yet commenced), in particular, are not included in the valuation.

If the carrying amount exceeds the recoverable amount, the
goodwill allocated to that cash-generating unit is adjusted in
the amount of this difference.

If the impairment thus identified exceeds the goodwill allocated
to the affected cash-generating unit, the remaining assets of
the unit must be written down in proportion to their carrying

specified range. This may be the case, for example, if an agree-
ment provides for payment on the fifth calendar day of the fol-
lowing month. Refunds to customers are an exception and are
granted if the customer is disconnected from the power supply
for an extended period of time. Cash bonuses or bonus payments
to customers are recognized as refund liabilities and presented
as a decrease in revenues uniformly over the term of the contract.
As a rule, no warranties are granted in the Core Business. Warran-
ties are only granted in the “Build & Sell” activities.

b) Interest Income
Interest income is recognized pro rata using the effective interest
method.

c) Dividend Income
Dividend income is recognized when the right to receive the
distribution payment arises.

Electricity and Energy Taxes
Electricity and energy taxes are levied on electricity and natural
gas delivered to retail customers and are calculated on the basis
of a fixed tax rate per kilowatt-hour (“kWh”). This rate varies
between different classes of customers. Electricity and energy
taxes payable are deducted from sales revenues on the face
of the income statement if those taxes are levied upon delivery
of energy to the retail customer.

Earnings per Share
Basic (undiluted) earnings per share is computed by dividing the
consolidated net income attributable to the shareholders of the
parent company by the weighted-average number of ordinary
shares outstanding during the relevant period. At E.ON, the com-
putation of diluted earnings per share is identical to that of basic
earnings per share because E.ON SE has issued no potentially
dilutive ordinary shares.

Goodwill and Intangible Assets
Goodwill
Goodwill is not amortized, but rather tested for impairment
at the cash-generating unit level on at least an annual basis.
The term cash-generating unit also always includes groups
of cash- generating units and is referred to in simplified form
as a cash- generating unit. Impairment tests must also be per-
formed between these annual tests if events or changes in
circumstances indicate that the carrying amount of the respec-
tive cash-generating unit might not be recoverable.

130

Intangible assets not subject to amortization or intangible assets
whose use has not yet started are measured at cost and tested
for impairment annually or more frequently if events or changes in
circumstances indicate that such assets may be impaired. More-
over, such assets are reviewed annually to determine whether
an assessment of indefinite useful life remains applicable.

In accordance with IAS 36, the carrying amount of an intangible
asset, whether subject to amortization or not, is tested for
impairment by comparing the carrying value with the asset’s
recoverable amount, which is the higher of its value in use
and its fair value less costs to sell. Should the carrying amount
exceed the corresponding recoverable amount, an impairment
charge equal to the difference between the carrying amount and
the recoverable amount is recognized and reported in income
under “Depreciation, amortization and impairment charges.”

If the reasons for previously recognized impairment losses no
longer exist, such impairment losses are reversed. A reversal
shall not cause the carrying amount of an intangible asset subject
to amortization to exceed the amount that would have been
determined, net of amortization, had no impairment loss been
recognized during the period.

If a recoverable amount cannot be determined for an individual
intangible asset, the recoverable amount for the smallest iden-
tifiable group of assets (cash-generating unit) that the intangible
asset may be assigned to is determined. See Note 15 for addi-
tional information about goodwill and intangible assets.

Research and Development Costs
Under IFRS, expen diture on research is expensed as incurred,
while costs incurred during the development phase of new prod-
ucts, services and technologies are to be recognized as assets
when the general criteria for recognition specified in IAS 38 are
present. In the 2019 and 2020 fiscal years, E.ON capitalized
costs for internally generated software and other technologies
in this context.

amounts. Individual assets may be written down only if their
respective carrying amounts do not fall below the highest of the
following values as a result:

• Fair value less costs to sell
• Value in use, or
• Zero.

Any additional impairment loss that would otherwise have been
allocated to the asset concerned must instead be allocated pro
rata to the remaining assets of the unit.

E.ON performs the annual testing of goodwill for impairment at
the cash-generating unit level in the fourth quarter of each fiscal
year.

Impairment charges on the goodwill of a cash-generating unit
and reported in the income statement under “Depreciation,
amortization and impairment charges” may not be reversed in
subsequent reporting periods.

Intangible Assets
IAS 38, “Intangible Assets,” (“IAS 38”) requires that intangible
assets be amortized over their expected useful lives unless their
lives are considered to be indefinite. Factors such as typical
product life cycles and legal or similar limits on use are taken
into account in the classification.

Acquired intangible assets subject to amortization are classified
as customer relationships and similar assets as well as conces-
sions, industrial property rights, licenses and similar rights (this
category also includes contractual claims). Internally generated
intangible assets subject to amortization are related to software
and are recognized as development costs. Intangible assets
subject to amortization are measured at cost and are generally
amortized using the straight-line method over their expected
useful lives. The useful lives of customer relationships and simi-
lar assets range between 2 and 50 years, and between 3 and
50 years for concessions, industrial property rights, licenses
and similar rights, unless depreciation based on use reflects an
appropriate level of depletion. This latter category includes soft-
ware in particular. Useful lives and amortization methods are
subject to annual verification. Intangible assets subject to amor-
tization are tested for impairment whenever events or changes
in circumstances indicate that such assets may be impaired.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

131

financing arrangement, the respective borrowing costs incurred
for that particular arrangement during the period are used.
For non-specific financing arrangements, a financing rate
uniform within the Group of 3.11 percent was applied for 2020
(2019: 3.86 percent). Other borrowing costs are expensed.

Government Grants
Government investment subsidies do not reduce the acquisition
and production costs of the respective assets; they are instead
reported on the balance sheet as deferred income. They are rec-
ognized in income on a straight-line basis over the associated
asset’s expected useful life.

Government grants are recognized at fair value if the Group
satisfies the necessary conditions for receipt of the grant and
if it is highly probable that the grant will be issued.

Government grants for costs are posted as income over the
period in which the costs are incurred.

Leasing
Lease agreements are accounted for in accordance with IFRS 16,
“Leases” (“IFRS 16”). A lease is an agreement that conveys the
right to use an identified asset for a specified period in exchange
for consideration. A right-of-use asset for an identified asset,
regardless of its formal structure, can arise in many agreements,
e.g., rental, lease and service agreements as well as in the frame-
work of outsourcing transactions. The formal designation of an
agreement is not relevant for the identification of a lease. E.ON is
party to some agreements in which it is the lessor and to others
in which it is the lessee.

Transactions in which E.ON acts as a lessee are accounted for on
the basis of the right-of-use model, irrespective of the economic
(ownership) relationship to the leased asset at the beginning of
the lease term. The option to facilitate the application of IFRS 16.5
is used for low-value leases and for lease agreements with a term
of less than twelve months (short-term leases). Accordingly, there
is no recognition of the right-of-use asset and the lease ability.
Instead, the payments are recognized on a straight-line basis in
income. In line with internal management practice, intragroup
leases are recognized as current expenses in the segment report.

Property, Plant and Equipment
Property, plant and equipment are initially measured at acquisi-
tion or production cost, including decommissioning or resto-
ration cost that must be capitalized, and are depreciated over the
expected useful lives of the components, generally using the
straight-line method, unless a different method of depreciation
is deemed more suitable in certain exceptional cases. The useful
lives of the most significant asset classes of material property,
plant and equipment are presented below:

Useful Lives of Property, Plant and Equipment

Buildings

Technical equipment, plant and machinery

Other equipment, fixtures, furniture and
office equipment

5 to 60 years

2 to 80 years

2 to 30 years

Property, plant and equipment are tested for impairment when-
ever events or changes in circumstances indicate that an asset
may be impaired. In such a case, property, plant and equipment
are tested for impairment according to the principles prescribed
for intangible assets in IAS 36. If the reasons for previously
recognized impairment losses no longer exist, such impairment
losses are reversed and recognized in income. Such reversal
shall not cause the carrying amount to exceed the amount that
would have resulted had no impairment taken place during the
preceding periods.

Subsequent costs arising, for example, from additional or
replacement capital expenditure are only recognized as part of
the acquisition or production cost of the asset, or else—if rele-
vant—recognized as a separate asset if it is probable that the
Group will receive a future economic benefit and the cost can
be determined reliably.

Repair and maintenance costs that do not constitute significant
replacement capital expenditure are expensed as incurred.

Borrowing Costs
Borrowing costs that arise in connection with the acquisition,
construction or production of a qualifying asset from the time of
acquisition or from the beginning of construction or production
until its entry into service are capitalized and subsequently
amortized alongside the related asset. In the case of a specific

132

A lease liability is recognized in the amount of the present value
of the existing payment obligation. Where an arrangement
provides for payments for lease components and non-lease
components, the payments are not separated using the option
under IFRS 16.15 (with the exception of real estate leases);
the lease liability is measured from the total amount of the pay-
ments. Present value is determined by discounting with an
incremental borrowing rate that is equivalent in terms of risk
and term if the implicit interest rate cannot be determined. The
liability is subsequently measured using the effective interest
method. The current portion of the lease liability to be recognized
separately in the balance sheet is measured on the basis of the
repayment portion of the next twelve months included in the
lease payments. A right-of-use asset corresponding with the
lease liability is recognized in the amount of the present value of
the lease liability. The initial recognition of the right-of-use asset
is also increased by the amount of the initial direct costs and
expected costs resulting from asset retirement obligations when
they do not relate to an item from property, plant and equipment;
prepayments increase the amount of the initial recognition and
lease incentives decrease the amount. A right-of-use asset is
subsequently recognized at amortized cost. Amortization is
carried out on a straight-line basis over the shorter of the lease
term or the useful life of the identified asset. An impairment
test is carried out in accordance with IAS 36 if events or changed
circumstances indicate an impairment.

E.ON protects its operational flexibility when concluding leasing
agreements through the use of extension and termination options.
In determining the lease term, E.ON considers all facts and
circumstances that provide an economic incentive to exercise
existing options. The assumed term therefore also includes
periods covered by extension options if it is assumed with reason-
able certainty that they will be exercised. A modification of the
term is taken into account if there is a change with regard to
whether an existing option will be exercised or not with reason-
able certainty.

Lease transactions in which E.ON acts as lessor are classified
as operating or finance leases depending on the distribution of
risks and rewards. If a lease is classified as an operating lease,
E.ON recognizes the identified asset and recognizes the lease

payments as other operating income on a straight-line basis
over the lease term. For finance leases, the identified asset is
derecognized and a receivable is recognized in the amount of
the net investment value. Payments made by the lessee are
treated as a reduction of the lease receivable or interest income.
The income from such arrangements is recognized over the term
of the lease using the effective interest method. Subleases are
classified based on the right-of-use asset under the head lease.

Financial Instruments
Non-derivative Financial Instruments
Non-derivative financial instruments are measured in accordance
with IFRS 9, “Financial Instruments” (“IFRS 9”). They are recog-
nized at fair value, including transaction costs, on the settlement
date when acquired, provided they are not recognized at fair
value through profit and loss.

Financial assets are classified as financial assets measured at
amortized cost (AmC), financial assets measured at fair value
through other comprehensive income (FVOCI) and financial
assets measured at fair value through profit and loss (FVPL) based
on the business model and the characteristics of the cash flows.

If a financial asset is held for the purpose of collecting contractual
cash flows and the cash flows of the financial asset represent
exclusively interest and principal payments, then the financial
asset is measured at amortized cost (AmC).

A financial asset is measured at fair value through other com-
prehensive income (FVOCI) if it is used both to collect contractual
cash flows and for sales purposes and the cash flows of the
financial asset consist exclusively of interest and principal pay-
ments.

Unrealized gains and losses from financial assets measured at
fair value through other comprehensive income (FVOCI), net of
related deferred taxes, are reported as a component of equity
(other comprehensive income) until realized. Realized gains and
losses are determined by analyzing each transaction individually.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

133

Debt instruments that do not exclusively serve to collect contrac-
tual cash flows or to both generate contractual cash flows and
sales revenue, or whose cash flows do not exclusively consist of
interest and principal payments are measured at fair value through
profit and loss (FVPL). For equity instruments that are not held
for trading purposes, E.ON has uniformly exercised the option
of recognizing changes in fair value through profit or loss (FVPL).

Impairments of financial assets are both recognized for losses
already incurred and for expected future credit defaults. The
amount of the impairment loss calculated in the determination
of expected credit losses is recognized on the income statement.

The expected future credit loss is calculated by multiplying the
probability of default by the carrying amount of the financial
asset (exposure at default) and the expected loss ratio (loss given
default). For information on the treatment of impairments under
IFRS 9, please see Note 32.

Non-derivative financial liabilities (including trade payables)
within the scope of IFRS 9 are measured at amortized cost, using
the effective interest method. Initial measurement takes place
at fair value, with transaction costs included in the measurement.
In the subsequent measurement, the residual carrying amount
is adjusted by the amortization and accretion of any premium
or discount remaining until maturity. The premium or discount
is recognized in financial results over its term.

Derivative Financial Instruments and Hedging
Derivative financial instruments and separated embedded deriv-
atives are measured at fair value as of the trading date at initial
recognition. Under IFRS 9, they are classified as at fair value
through profit and loss (FVPL) as long as they are not a compo-
nent of a hedge accounting relationship. Gains and losses from
changes in fair value are immediately recognized in net income.

The instruments primarily used are foreign currency forwards
and cross-currency interest rate swaps, as well as interest rate
swaps. In commodities, the instruments used primarily include
physically and financially settled forwards and options related
to electricity and gas.

As part of fair value measurement in accordance with IFRS 13,
the counterparty risk is also taken into account for derivative
financial instruments. E.ON determines this risk based on a
portfolio valuation in a bilateral approach for both own credit risk

(debt value adjustment) and the credit risk of the corresponding
counterparty (credit value adjustment). The counterparty risks
thus determined are allocated to the individual financial instru-
ments by applying the relative fair value method on a net basis.

E.ON has designated some of these derivatives as part of a
hedging relationship. IFRS 9 sets requirements for the admissi-
bility of hedging instruments and the underlyings, the formal
desig nation and documentation of hedging relationships, the
hedging strategy, as well as fulfilling requirements of effective-
ness in order to qualify for hedge accounting. The designated
hedged items and hedging instruments are subject to the same
risk. This economic relationship ensures that the amounts of the
hedged items and hedging instruments are offset against each
other and that the hedging relationships are therefore effective.
The hedge ratio of the hedges is 1:1. Ineffectiveness arises only
if the measurement parameters of the hedged item and the
hedging instrument differ from one another or in the case of sub-
sequent designation of the hedging instrument. All components
of derivative gains and losses from the measurement of hedge
ineffectiveness are taken into consideration during recognition.

For qualifying fair value hedges, the change in the fair value of
the derivative and the change in the fair value of the hedged
item that is due to the hedged risk(s) are recognized in income.

If a derivative instrument qualifies as a cash flow hedge under
IFRS 9, the effective portion of the hedging instrument’s change
in fair value is recognized in equity (as a component of other
comprehensive income) and reclassified into income in the period
or periods during which the cash flows of the transaction being
hedged affect income. In accordance with IFRS 9, the currency
basis spread (hedging costs) will be separated from the hedging
instrument and reported separately as an excluded component
in accumulated other comprehensive income in the reserve for
hedging costs as a component of equity.

The hedging result is reclassified into income during the period
in which the cash flows of the hedged asset are recognized in
income. The result is recognized imme diately in income if it
becomes probable that the hedged underlying transaction will
no longer occur. For hedging instruments used to establish
cash flow hedges, the change in fair value of the ineffective
portion is recognized immediately in the income statement to
the extent required.

134

Agreements to buy or sell non-financial items that are classified
as own-use contracts under IFRS 9 and that are required to be
accounted for as derivatives (so-called “failed-own-use” contracts)
must be realized or recognized in the balance sheet at the mar-
ket price applicable at the time of physical settlement. In addi-
tion, any income from commodity derivatives arising from the
difference between the contract price and the market price is
recognized in other operating income.

IFRS 7, “Financial Instruments: Disclosures,” (“IFRS 7”) and
IFRS 13 both require comprehensive quantitative and qualitative
disclosures about the extent of risks arising from financial
instruments. Additional information on financial instruments is
provided in Notes 31 and 32.

Non-derivative and derivative financial instruments are netted on
the balance sheet if under IAS 32 E.ON has both an unconditional
right—even in the event of the counterparty’s insolvency—and
the intention to settle offsetting positions simultaneously and/or
on a net basis.

Inventories
Inventories are measured at the lower of acquisition or production
cost and net realizable value. The cost of raw materials, finished
products and goods purchased for resale is determined based on
the average cost method. In addition to production materials and
wages, production costs include material and production over-
heads based on normal capacity. The costs of general adminis-
tration are not capitalized. Inventory risks resulting from excess
and obsolescence are provided for using appropriate valuation
allowances, whereby inventories are written down to net real-
izable value.

Renewable Obligation Certificates (ROCs) and Emission Rights
Renewable Obligation Certificates (ROCs) as well as Emission
rights held under national and international emission-rights
systems for the settlement of obligations are reported as other
operating assets. ROCs and emission rights are capitalized at
cost at the time of acquisition.

A provision is recognized to cover the obligation to submit CO2
emission allowances and ROCs to the respective authorities.
The provision is measured at the carrying amount of the ROCs or
emission rights held or, in the case of a shortfall, at the current
fair value of the ROCs or emission rights needed.

To hedge the foreign currency risk arising from the Company’s
net investment in foreign operations, derivative as well as non-
derivative financial instruments are used. Gains or losses due
to changes in fair value and from foreign currency trans lation
are recognized within equity, as a component of other compre-
hensive income, under currency translation adjustments.

E.ON currently uses hedges in the framework of cash flow hedges
and hedges of a net investment.

Changes in fair value of derivative instruments that are recognized
in income are presented as other operating income or expenses.
Gains and losses from interest-rate derivatives are included in
interest income.

Unrealized gains and losses resulting from the initial measure-
ment of derivative financial instruments at the inception of the
contract are not recognized in income. They are instead deferred
and recognized in income systematically over the term of the
derivative. An exception to the accrual principle applies if unre-
alized gains and losses from the initial measurement are verified
by quoted market prices, observable prices of other current
market transactions or other observable data supporting the val-
uation technique. In this case the gains and losses are recognized
in income.

Contracts (in particular sales and procurement contracts for
electricity and gas) that are entered into for purposes of receiving
or delivering non-financial items in accordance with E.ON’s
anticipated procurement, sale or use requirements, and held as
such, are classified as own-use contracts. They are not accounted
for as derivative financial instruments at fair value through profit
and loss (FVPL) in accordance with IFRS 9, but as open trans-
actions subject to the rules of IAS 37. Contracts that provide for
net settlement and resales of the quantities to be delivered at
a future date generally cannot, as a rule, be classified as own-
use contracts. Based on forward-looking forecasts of delivery
quantities specified by customer structure and portfolio man-
agement, contracts with physical settlement upon conclusion
are recognized as derivatives for which settlement cannot be
ensured within the scope of ordinary delivery. This “safety buffer”
is reviewed on a regular basis and adjusted if necessary.

Embedded derivatives in own-use contracts must be separated
from the host contract and accounted for as derivatives in accor-
dance with IFRS 9 if the economic characteristics and risks of
these derivatives are not closely related to those of the host
contract. The contract is assessed upon conclusion to determine
whether a derivative is required to be separated. A reassessment
must be carried out if there is a significant change in the terms
of the contract or in the context of business combinations.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

135

Assets Held for Sale and Liabilities Associated with Assets
Held for Sale and Discontinued Operations
Non-current assets and any corresponding liabilities held for sale
and any directly attributable liabilities are recognized separately
from other assets and liabilities in the balance sheet in the line
items “Assets held for sale” and “Liabilities associated with assets
held for sale” if they can be disposed of in their current condition
and if there is sufficient probability of their disposal actually
taking place. The reclassification to the separate balance sheet
items is shown under Changes in scope of consolidation.

Discontinued operations are components of an entity that are
either held for sale or have already been sold and can be clearly
distinguished from other corporate operations, both operationally
and for financial reporting purposes. Additionally, the component
classified as a discontinued operation must represent a major
business line or a specific geographic business segment of the
Group.

Non-current assets that are held for sale either individually or
collectively as part of a disposal group, or that belong to a dis-
continued operation, are no longer depreciated. They are instead
accounted for at the lower of the carrying amount and the fair
value less any remaining costs to sell. If this value is less than
the carrying amount, an impairment loss is recognized.

The income and losses resulting from the measurement of
components held for sale as well as the gains and losses arising
from the disposal of discontinued operations, are reported sep-
arately on the face of the income statement under income/loss
from discontinued operations, net, as is the income from the
ordinary operating activities of these divisions. Prior-year income
statement figures are adjusted accordingly. The relevant assets
and liabilities are reported in a separate line on the balance sheet.
The cash flows of discontinued operations are reported sepa-
rately in the cash flow statement, with prior-year figures adjusted
accordingly. However, there is no reclassification of prior-year
balance sheet line items attributable to discon tinued operations.

Receivables, Contract Assets or Liabilities and Other Assets
A receivable is recognized under IFRS 15 when the goods or
services are delivered, provided that the right to consideration is
unconditional, i.e., is only related to the passage of time. How-
ever, if the right to receive the consideration is contingent upon
conditions other than the passage of time, a contract asset is
recognized. A contract liability under IFRS 15 is recognized when
consideration has been received for an existing IFRS 15 contract
and the right to receive the goods or services still exists in full
or in part. The contractual liability is only reversed with an effect
on revenue when E.ON has performed the corresponding service.
An asset is recognized under other assets under IFRS 15 if the
cost of obtaining the contract is expected to be recovered and
the amortization period is longer than one year. Other assets are
amortized over the estimated term of the contract depending
on how the goods or services to which the costs relate are trans-
ferred to the customer. If the estimated term of the contract is
less than one year, the costs are immediately recognized as an
expense on the income statement. Receivables and other assets
are initially measured at fair value, which generally approximates
nominal value. They are subsequently measured at amortized
cost, using the effective interest method. Trade receivables with-
out a significant financial component are measured upon initial
recognition at their transaction price. Valuation allowances,
included in the reported net carrying amount, are provided for
identifiable individual risks. If the loss of a certain part of the
receivables is probable, valuation allowances are provided to
cover the expected loss. Impairments must also be recognized
for expected future credit losses.

Liquid Funds
Liquid funds include current securities, checks, cash on hand and
bank balances. Bank balances and securities with an original
maturity of more than three months are recognized under secu-
rities and fixed-term deposits. Liquid funds with an original
maturity of less than three months are considered to be cash
and cash equivalents, unless they are restricted.

Restricted cash with a remaining maturity in excess of twelve
months is classified as financial receivables and other financial
assets.

136

Equity Instruments
IFRS defines equity as the residual interest in the Group’s assets
after deducting all liabilities. Therefore, equity is the net amount
of all recognized assets and liabilities.

Share-Based Payment
Share-based payment plans issued in the E.ON Group are
accounted for in accordance with IFRS 2, “Share-Based Payment”
(“IFRS 2”).

E.ON has entered into purchase commitments to holders of
non-controlling interests in subsidiaries. By means of these
agreements, the non-controlling shareholders have the right to
require E.ON to purchase their shares on specified conditions.
None of the contractual obli gations has led to the transfer of
substantially all of the risk and rewards to E.ON at the time of
entering into the contract. In such a case, IAS 32, “Financial
Instruments: Presentation,” (“IAS 32”) requires that a liability be
recognized at the present value of the probable future exercise
price. This amount is reclassified from a separate component
within non-controlling interests and reported separately as a
liability. The reclassification occurs irrespective of the probability
of exercise. The accretion of the liability is recognized as interest
expense. If a purchase commitment expires unexercised, the
liability reverts to non-controlling interests. Any remaining
difference between liabilities and non-controlling interests is
recognized directly in retained earnings.

Where shareholders of entities own statutory, non-excludable
rights of termination (as in the case of German partnerships, for
example), such termination rights require the reclassification of
non-controlling interests from equity into liabilities under IAS 32.
The liability is recognized at the present value of the expected
settlement amount irrespective of the probability of termination.
Changes in the value of the liability are reported within other
oper ating income. Accretion of the share of the results of the
non-controlling shareholders’ share in net income is recognized
in Net interest income/expense.

If E.ON SE or a Group company buys treasury shares of E.ON SE,
the value of the consideration paid, including directly attributable
additional costs (net after income taxes), is deducted from
E.ON SE’s equity until the shares are retired, distributed or resold.
If such treasury shares are subsequently distributed or sold, the
consideration received, net of any directly attributable additional
transaction costs and associated income taxes, is recognized in
equity.

The members of the Management Board of E.ON SE were
granted virtual shares under the E.ON Share Matching Plan for
the last time in 2017.

In fiscal years 2017, 2018, 2019 and 2020, virtual shares were
granted to members of the Management Board of E.ON SE and
certain E.ON Group executives under the E.ON Performance
Plan. The E.ON Performance Plan uses a fair value determined
by an external service provider using a Monte Carlo simulation.

In all cases, these are commitments of the Company which pro-
vide for cash compensation based on the share price performance
at the end of the term. The compensation expense is recognized
in the income statement pro rata over the vesting period.

Provisions for Pensions and Similar Obligations
Measurement of defined benefit obligations in accordance with
IAS 19, “Employee Benefits,” (“IAS 19“) is based on actuarial com-
putations using the projected unit credit method, with actuarial
valuations performed at year-end. The valuation encompasses
both pension obligations and pension entitlements that are
known on the reporting date and economic trend assumptions
such as assumptions on wage and salary growth rates and
pension increase rates, among others, that are made in order
to reflect realistic expectations, as well as variables specific
to reporting dates such as discount rates, for example.

Included in gains and losses from the remeasurements of the
net defined benefit liability or asset are actuarial gains and
losses that may arise especially from differences between esti-
mated and actual variations in under lying assumptions about
demographic and financial variables. Additionally included is the
difference between the actual return on plan assets and the
expected interest income on plan assets included in the net
interest result. Remeasurements effects are recognized in full in
the period in which they occur and are not reported within the
Consolidated Statements of Income, but are instead recognized
within the Statements of Recognized Income and Expenses as
part of equity.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

137

The employer service cost representing the additional benefits
that employees earned under the benefit plan during the fiscal
year is reported under personnel costs; the net interest on the
net liability or asset from defined benefit pension plans deter-
mined based on the discount rate applicable at the start of the
fiscal year is reported under financial results.

Past service cost, as well as gains and losses from settlements,
are fully recognized in the income statement in the period in
which the underlying plan amendment, curtailment or settle-
ment takes place. They are reported under personnel costs.

The amount reported on the balance sheet represents the pres-
ent value of the defined benefit obligations reduced by the fair
value of plan assets. If a net asset position arises from this cal-
culation, the amount is limited to the present value of available
refunds and the reduction in future con tributions and to the
benefit from prepayments of minimum funding requirements.
Such an asset position is recognized as an operating receivable.

Payments for defined contribution pension plans are expensed
as incurred and reported under personnel costs. Contributions
to state pension plans are treated like payments for defined
contribution pension plans to the extent that the obligations
under these pension plans generally correspond to those under
defined contribution pension plans.

Provisions for Asset Retirement Obligations and Other
Miscellaneous Provisions
In accordance with IAS 37, “Provisions, Contingent Liabilities
and Contingent Assets,” (“IAS 37”) provisions are recognized
when E.ON has a legal or constructive present obligation towards
third parties as a result of a past event, it is probable that E.ON
will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. The provision is
recognized at the expected settlement amount. Long-term obli-
gations are reported as liabilities at the present value of their
expected settlement amounts if the interest rate effect (the differ-
ence between present value and repayment amount) resulting
from discounting is material; future cost increases that are fore-
seeable and likely to occur on the balance sheet date at year-end
must also be included in the measurement. Long-term obligations
are generally discounted at the market interest rate applicable

as of the respective balance sheet date, provided that it is not
negative. The accretion amounts and the effects of changes in
interest rates are generally presented as part of financial results.
A reimbursement related to the provision that is virtually certain
to be collected is capitalized as a separate asset. No offsetting
within provisions is permitted. Advance payments remitted are
deducted from the provisions.

Obligations arising from the decommissioning or dismantling of
property, plant and equipment are recognized during the period
of their occurrence at their discounted settlement amounts, pro-
vided that the obligation can be reliably estimated. The carrying
amounts of the respective property, plant and equipment are
increased by the same amounts. In subsequent periods, capital-
ized asset retirement costs are amortized over the expected
remaining useful lives of the assets, and the provision is accreted
to its present value on an annual basis.

Changes in estimates arise in particular from deviations from
original cost estimates, from changes to the maturity or the
scope of the relevant obligation, and also as a result of the reg-
ular adjustment of the discount rate to current market interest
rates. The adjustment of provisions for the decommissioning
and restoration of property, plant and equipment for changes
to estimates is generally recognized by way of a corresponding
adjustment to these assets, with no effect on income. If the
property, plant and equipment concerned have already been
fully depreciated, changes to estimates are recognized within
the income statement.

The estimates for nuclear decommissioning provisions are
derived from studies, cost estimates, legally binding civil agree-
ments and legal information. A material element in the estimates
are the real interest rates applied (the applied discount rate, less
the cost increase rate). The impact on consolidated net income
depends on the level of the corresponding adjustment posted to
property, plant and equipment.

No provisions are established for contingent asset retirement
obligations where the type, scope, timing and associated proba-
bilities cannot be determined reliably.

138

If onerous contracts exist in which the unavoidable costs of
meeting a contractual obligation exceed the economic benefits
expected to be received under the contract, provisions are
established for losses from open transactions. Such provisions
are recognized at the lower of the excess obligation upon per-
formance under the contract and any potential penalties or
compensation arising in the event of non-performance. Obliga-
tions under an open contractual relationship are determined
from a customer perspective.

Contingent liabilities are possible obligations toward third
parties arising from past events that are not wholly within the
control of the entity, or else present obligations toward third
parties arising from past events in which an outflow of resources
embodying economic benefits is not probable or where the
amount of the obligation cannot be measured with sufficient
reliability. Contingent liabilities were not recognized on the
balance sheet.

A more detailed description is not provided for certain contingent
liabilities and contingent receivables, particularly in connection
with pending litigation, as this information could influence
further proceedings.

Where necessary, provisions for restructuring costs are recog-
nized at the present value of the future outflows of resources.
Provisions are recognized once a detailed restructuring plan has
been decided on by management and publicly announced or
communicated to the employees or their representatives. Only
those expenses that are directly attributable to the restructuring
measures are used in measuring the amount of the provision.
Expenses associated with the future operation are not taken
into consideration.

Income Taxes
Under IAS 12, “Income Taxes,” (“IAS 12”) deferred taxes are rec-
ognized on temporary differences arising between the carrying
amounts of assets and liabilities on the balance sheet and their
tax bases (balance sheet liability method). Deferred tax assets
and liabilities are recognized for temporary differences that will
result in taxable or deductible amounts when taxable income is
calculated for future periods, unless those differences are the
result of the initial recognition of an asset or liability in a trans-
action other than a business combination that, at the time of
the transaction, affects neither accounting nor taxable profit/

loss (initial differences). Uncertain tax positions are recognized
at their most likely value. IAS 12 further requires that deferred
tax assets be recognized for unused tax loss carry forwards and
unused tax credits. Deferred tax assets are recognized to the
extent that it is probable that taxable profit will be available
against which the deductible temporary differences and unused
tax losses can be utilized. Each of the corporate entities is
assessed individually with regard to the probability of a positive
tax result in future years. The planning horizon is basically three
to five years in this context. Any existing history of losses is
incorporated in this assessment. For those tax assets to which
these assumptions do not apply, the value of the deferred tax
assets is reduced.

Deferred tax liabilities caused by temporary differences associ-
ated with investments in affiliated and associated companies are
recognized unless the timing of the reversal of such temporary
differences can be controlled within the Group and it is probable
that, owing to this control, the differences will in fact not be
reversed in the foreseeable future.

Deferred tax assets and liabilities are measured using the enacted
or substantively enacted tax rates expected to be applicable for
taxable income in the years in which temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of changes in tax rates and tax law is gener-
ally recognized in net income. Equity is adjusted for deferred
taxes that had previously been recognized directly in equity. The
change is generally recognized in the period in which the material
legislative process is completed.

Deferred taxes for the E.ON Group’s major German companies
are calculated using an aggregate tax rate of 31 percent (2019:
30 percent). This tax rate includes, in addition to the 15 percent
corporate income tax, the solidarity surcharge of 5.5 percent on
the corporate tax and the average trade tax rate of 15 percent
(2019: 14 percent). Foreign subsidiaries use applicable national
tax rates.

To the extent that they are material, income taxes for transaction
costs of an equity transaction are recognized directly in equity
under IAS 12.

Note 11 shows the major temporary differences so recorded.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

139

The estimates and underlying assumptions are reviewed on an
ongoing basis. Adjustments to accounting estimates are recog-
nized in the period in which the estimate is revised if the change
affects only that period, or in the period of the revision and sub-
sequent periods if both current and future periods are affected.

Estimates are particularly necessary for the measurement of
the value of property, plant and equipment and of intangible
assets, especially in connection with purchase price allocations,
the recognition and measurement of deferred tax assets, the
accounting treatment of provisions for pensions and miscella-
neous provisions, for impairment testing in accordance with
IAS 36, for the determination of the fair value of certain financial
instruments, and in the application of IFRS 15. Estimates also
arise from the application of IFRS 16, namely in connection with
the determination of the lease terms and the calculation of the
discount rate.

The underlying principles used for estimates in each of the
relevant topics are outlined in the respective sections.

Additional estimates and assumptions relating to the conse-
quences of Brexit are required. If necessary, known risks have
been taken into account in the balance sheet items concerned.
In our assessment, there is no significant impact on the financial
statements. The expected consequences of Brexit have also
been taken into account in medium and long-term planning.

In addition, estimates and judgments are subject to increased
uncertainty due to the currently unpredictable global impact of
the Covid-19 pandemic. The actual amounts may differ from the
estimates and judgments made; changes may have a material
impact on the financial statements. When the estimates and
judgments were updated, all available information on expected
economic developments and country-specific government
measures was taken into account on the reporting date. However,
since the Covid-19 pandemic is continuously evolving, it is diffi-
cult to predict its duration and the extent of its impact on assets,
liabilities, earnings and cash flows. A quantitative assessment
of the impact of the Covid-19 pandemic in the E.ON Group based
on available knowledge and best information available is pre-
sented in Note 3.

Consolidated Statements of Cash Flows
In accordance with IAS 7, “Cash Flow Statements,” (“IAS 7”) the
Consolidated Statements of Cash Flows are classified in cash
flows from operating, investing and financing activities. Cash
flows from discontinued operations are reported separately in
the Consolidated Statements of Cash Flows. Interest received
and paid, income taxes paid and refunded, as well as dividends
received are classified as operating cash flows, whereas divi-
dends paid are classified as financing cash flows. The purchase
and sale prices respectively paid (received) in acquisitions and
disposals of companies are reported net of any cash and cash
equivalents acquired (disposed of) under investing activities
if the respective acquisition or disposal results in a gain or loss
of control. In the case of acquisitions and disposals that do not,
respectively, result in a gain or loss of control, the corresponding
cash flows are reported under financing activities. The impact on
cash and cash equivalents of valuation changes due to exchange
rate fluctuations is disclosed separately.

Segment Information
In accordance with the so-called management approach required
by IFRS 8, “Operating Segments,” (“IFRS 8”) the internal report-
ing organization used by management for making decisions on
operating matters is used to identify the Company’s reportable
segments. The internal performance measure used as the seg-
ment result is EBIT adjusted to exclude certain non-operating
effects (see Note 35).

Structure of the Consolidated Balance Sheets and Statements
of Income
In accordance with IAS 1, “Presentation of Financial Statements,”
(“IAS 1”) the Consolidated Balance Sheets have been prepared
using a classified balance sheet structure. Assets that will be
realized within twelve months of the reporting date, as well as
liabilities that are due to be settled within one year of the report-
ing date are generally classified as current.

The Consolidated Statements of Income are classified using the
nature of expense method, which is also applied for internal
purposes.

Critical Accounting Estimates and Assumptions;
Critical Judgments in the Application of Accounting Policies
The preparation of the Consolidated Financial Statements
requires management to make estimates and assumptions that
may both influence the application of accounting principles
within the Group and affect the measurement and presentation
of reported figures. Estimates are based on past experience and
on current knowledge obtained on the transactions to be
reported. Actual amounts may differ from these estimates.

140

Amendments to References to the Conceptual Framework
In March 2018, the IASB published Amendments to References
to the Conceptual Framework in IFRS. The EU has transposed
these amendments into European law. The amendments will
be applied for fiscal years beginning on or after January 1, 2020.
The amendments have no impact on E.ON’s Consolidated
Financial Statements.

Amendments to IFRS 9, IAS 39 and IFRS 7, “Interest Rate
Benchmark Reform”
In September 2019, the IASB published amendments to IFRS 9,
IAS 39 and IFRS 7, “Interest Rate Benchmark Reform.” The
Phase 1 amendments of the IASB’s Interest Rate Benchmark
Reform project (IBOR reform) provide for temporary exemption
from applying specific hedge accounting requirements to
hedging relationships that are directly affected by IBOR reform.
The exemptions have the effect that IBOR reform should not
generally cause hedge relationships to be terminated due to
uncertainty about when and how reference interest rates will be
replaced. However, any hedge ineffectiveness should continue
to be recorded in the income statement under both IAS 39 and
IFRS 9. Furthermore, the amendments set out triggers for when
the exemptions will end, which include the uncertainty arising
from IBOR reform.

The EU has transposed these amendments into European law.
The amendments will be applied for fiscal years beginning on
or after January 1, 2020. The amendments have no impact on
E.ON’s Consolidated Financial Statements.

(2) New Standards and Interpretations

Standards and Interpretations Applicable in
2020

The following newly applicable standards and interpretations
have no material effect on E.ON’s Consolidated Financial
Statements.

Amendments to IAS 1 and IAS 8, “Definition of Material”
In October 2018, the IASB published amendments to IAS 1,
“Presentation of Financial Statements” and IAS 8, “Accounting
Policies, Changes in Accounting Estimates and Errors” regard-
ing the definition of material. The amendments standardize
and clarify the definition of material and its application to dis-
closures in financial statements presented in the IFRSs. Addi-
tional examples are also provided. The EU has transposed these
amendments into European law. The amendments will be
applied for fiscal years beginning on or after January 1, 2020.
The amendments have no impact on E.ON’s Consolidated
Financial Statements.

Amendments to IFRS 3, “Definition of a Business”
In October 2018, the IASB published amendments to IAS 3,
“Definition of a Business.” The primary purpose of these amend-
ments is to help distinguish between a business and a group of
assets. A business comprises a group of activities and assets
that involve at least one resource input and one substantive
process that together contribute significantly to the ability to
generate outputs. The IASB has introduced a concentration test
that permits a simplified assessment of whether a set of activi-
ties and assets is a business. It is not a business if substantially
all of the fair value of the gross assets acquired is concentrated
in a single identifiable asset or group of similar identifiable assets,
in which case IFRS 3 does not apply. The EU has transposed
these amendments into European law. The amendments will be
applied for fiscal years beginning on or after January 1, 2020.
The amendments have no impact on E.ON’s Consolidated
Financial Statements.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

141

• Amendments to IFRS 4, “Insurance Contracts—Extension of
the Temporary Exemption from IFRS 9,” published in June
2020, transposed into European law, first-time application
in fiscal year 2021

• Amendments to IFRS 3, IAS 16 and IAS 37 and Omnibus

Standard to Amend Multiple International Financial Reporting
Standards (2018–2020 Cycle), published in January 2020,
not yet transposed into European law, expected first-time
application in fiscal year 2022

• Amendments to IAS 1, “Presentation of Financial Statements:
Classification of Liabilities as Current or Non-Current—Deferral
of the Effective Date,” published in July 2020, not yet trans-
posed into European law, expected first-time application in
fiscal year 2023

Standards and Interpretations Not Yet
Applicable in 2020

The IASB and the IFRS IC have issued the following additional
standards and interpretations. E.ON does not apply these rules
because their application is not yet mandatory in some cases or
their recognition by the EU is still pending in others. Currently,
however, these adjustments are not expected to have a material
impact on the consolidated financial statements of E.ON:

• Amendments to IFRS 16, “Covid-19-Related Rent Con-

cessions–Amendment to IFRS 16,” published in May 2020,
transposed into European law, expected first-time application
in fiscal year 2021

•

IFRS 17, “Insurance Contracts,” published in May 2017,
not yet transposed into European law, expected first-time
application in fiscal year 2021

• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,
“Interest Rate Benchmark Reform—Phase 2,” published in
August 2020, transposed into European law, expected first-
time application in fiscal year 2021

(3) Impact of the Covid-19 Pandemic

The consequences of the Covid-19 pandemic impacted E.ON’s
businesses. Overall, after taking countermeasures into account,
the E.ON Group’s earnings were negatively impacted by the
Covid-19 pandemic in the low to mid triple-digit million euro
range in 2020. These effects are mainly attributable to the UK
sales business and the German network business. They are
mainly reflected in lower revenues and increased other operat-
ing expenses.

In addition to volume and price effects, a slightly increased risk
provision for contingent losses on receivables was also observed
in the sales business. The energy network sector primarily
recorded volume losses, which led to a decline in earnings in
2020. However, in the energy network sector, the declines in
revenue owing to changes in volume in subsequent years will be
largely offset via the regulatory regime. The Covid-19 pandemic
did not generate a triggering event for the E.ON Group to test
goodwill and non-current assets for impairment.

142

In 2020, a total of 54 domestic and 13 foreign associated
companies were consolidated under the equity method
(2019: 78 domestic companies and 15 foreign companies). In
2020, one domestic company reported as joint operations was
presented pro rata on the consolidated financial statements
(2019: one domestic company).

(4) Scope of Consolidation

The number of consolidated companies changed as follows in
2020:

Scope of Consolidation

Consolidated companies
as of January 1, 2019

Additions

Disposals/Mergers

Consolidated companies
as of December 31, 2019

Additions

Disposals/Mergers

Consolidated companies
as of December 31, 2020

Domestic

Foreign

Total

174

171

148

131

203

191

232

228

377

362

(5) Acquisitions, Disposals and Discontinued
Operations

Significant Transactions in 2020

Finalization of Accounting for the innogy Acquisition
Accounting for the innogy acquisition was finalized in the third
quarter of 2020.

Changes in the measurement of assets and liabilities acquired
as part of the innogy merger due to new knowledge acquired
up to September 17, 2020, and thus within the one-year mea-
surement period, were made retroactively to the acquisition
date. Corresponding adjustments for the 2019 financial year
or the reporting date of December 31, 2019, in the balance
sheet, income statement, statement of recognized income and
expenses, and statement of changes in equity also required
adjustments to the disclosures affected by this in the Notes to
the Consolidated Financial Statements. In addition, the innogy
integration also involved a standardization of processes for col-
lecting data relevant to the Notes to the Consolidated Financial
Statements and of procedures for allocating data to the Notes
to the Consolidated Financial Statements; the knowledge gained
in the process was taken into account by making appropriate
adjustments to the disclosures for the 2019 fiscal year. Unless
otherwise noted in individual cases, the adjustments to disclo-
sures for the 2019 fiscal year marked in the Notes to the Consol-
idated Financial Statements result from the matters described
above in connection with the innogy integration.

In March 2018, E.ON had concluded an agreement with RWE
to acquire the network and sales business of innogy. Within this
framework, the 76.8-percent stake in innogy SE held by RWE
was transferred from RWE to E.ON following approval by the
antitrust authorities. The entire Renewables and Gas Storage
business of innogy as well as the 37.9-percent stake that innogy
holds in Austrian energy supplier KELAG will remain within the
RWE Group. The acquisition was concluded through a compre-
hensive transfer of business activities following the approval
of the EU Commission and the competent antitrust authorities
on September 18, 2019. The approval was granted subject to
the conditions of the EU Commission, including the sale of vari-
ous business activities of E.ON and innogy. All conditions were
fulfilled in the course of 2020 (please refer to the section below
entitled “Conditions Imposed by the EU Commission Arising
from the innogy Takeover Fulfilled”).

As consideration for innogy’s network and sales business,
RWE was granted a 16.7-percent shareholding in E.ON SE by
way of a 20-percent capital increase against contribution in
kind from existing authorized capital. RWE has notified E.ON
that it has since reduced its stake to 15 percent. E.ON had also
transferred to RWE most of its Renewables business and the
minority interests held by E.ON subsidiary PreussenElektra in
the Lippe-Ems GmbH and Gundremmingen GmbH nuclear
power plants operated by RWE. E.ON and RWE had also agreed
on a compensatory payment of €1.5 billion from RWE to E.ON.
This payment was offset against E.ON’s payment obligations
and indemnification assets with respect to RWE as part of a
shortened payment procedure.

Notes
Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

143

On March 12, 2018, E.ON had made an offer to the remaining
shareholders of innogy SE to acquire all registered no-par-value
shares of innogy SE in a voluntary public takeover offer. Subse-
quently, a further 9.41 percent of innogy shares were tendered
for a total consideration of €37.59 per share (including an agreed
dividend and share price adjustment).

The purchase price allocation was finalized in the third quarter
of 2020, which is within the adjustment period of up to twelve
months from the completion of the first-time consolidation
granted under IFRS 3.45. The final calculations of the fair values
of the acquired assets and liabilities as of September 18, 2019,
are as follows:

Acquired Net Assets at Fair Value

€ in millions

Concessions, commercial property rights, licenses, and similar rights

Customer relationships and similar items

Advance payments

Right-of-use assets

Property, plant, and equipment

Companies accounted for under the equity method

Other financial assets

Financial receivables and other financial assets

Operating receivables and other operating assets

Deferred tax assets

Non-current assets

Inventories

Receivables and other assets

Trade receivables and other operating assets

Liquid funds

Current assets

Financial liabilities

Operating liabilities

Provisions for pensions and similar obligations

Miscellaneous provisions

Deferred tax liabilities

Non-current liabilities

Financial liabilities

Trade payables and other operating liabilities

Miscellaneous provisions

Current liabilities

Total equity and liabilities

September 18,
2019 adjustments
included until
Dec. 31, 2019

September 18,
2019 adjustments
included until
Sep. 17, 2020

Adjustments

371

1,987

2,128

17,524

2,548

1,097

205

2,068

1,343

29,277

613

713

8,270

2,394

11,990

17,949

3,618

4,384

769

1,388

28,108

1,848

8,890

1,658

12,396

763

–

-442

-94

–

-30

-566

–

-66

–

-66

-378

–

-30

-407

-908

-3

–

-911

686

371

1,987

1,686

17,430

2,548

1,097

205

2,068

1,313

28,711

613

713

8,204

2,394

11,924

17,571

3,619

4,384

769

1,358

27,701

940

8,887

1,658

11,485

1,449

144

The largest change in terms of amount resulted from the fact
that the loan receivable from RWE to innogy SE in the amount of
€0.7 billion, which was acquired by E.ON, is no longer reported
separately as in the 2019 Annual Report, but instead is presented
as part of net assets. This is reflected in the sharp decline in
current financial liabilities. The value of financial liabilities was
also reduced by the fact that a larger portion than originally
assumed was attributable to innogy’s renewables business. The
change in rights of use is the result of the retrospective adjust-

ment to the underlying interest rate for selected leases. This
is accompanied by corresponding adjustments, in particular to
depreciation and amortization and interest expense. Recent
information on the remaining useful lives of acquired network
assets has led to adjustments in the carrying amounts of prop-
erty, plant and equipment. The reduction in trade accounts
receivable is mainly due to receivables in the UK and is mainly
related to an increase in expected credit losses.

Goodwill

€ in millions

Consideration transferred

Fair value of shares in innogy SE that were previously acquired and held on the market

Amount to be allocated as part of the purchase price allocation

Fair value of the negative net assets acquired (including deferred taxes)

Acquisition of RWE’s intragroup receivables from innogy SE 1

Non-controlling shares

Goodwill

1Now allocated to the fair value of net assets acquired.

September 18,
2019 adjustments
included until
Dec. 31, 2019

September 18,
2019 adjustments
included until
Sep. 17, 2020

Adjustments

13,660

949

14,609

-763

-702

2,330

15,474

–

-686

702

143

197

13,698

949

14,647

-1,449

2,473

15,671

The difference in the consideration transferred is due to subse-
quent purchase price adjustments. The goodwill results primarily
from the strategic reorientation of the customer business and
the energy networks as well as from the expected synergies from
the integration of innogy SE into the Group.

By the acquisition date, E.ON had also acquired an additional
3.79 percent of innogy shares on the market. The extraordinary
general shareholders meeting of innogy SE in Essen on March 4,
2020, finally approved the exclusion of the minority shareholders
of innogy SE. With the entry in the commercial register on
June 2, 2020, the merger of innogy SE into E.ON Verwaltungs SE
(subsequently renamed innogy SE) became effective. The fixed
cash settlement was paid out shortly afterwards. A court-
appointed expert auditor has confirmed in accordance with the
requirements of German stock corporation law that the fixed
cash compensation of €42.82 per share is appropriate.

Conditions Imposed by the EU Commission Arising from the
innogy Takeover Fulfilled
As part of the acquisition of innogy, the EU Commission has,
among other things, imposed conditions requiring the disposal
of certain E.ON and innogy businesses in Eastern Europe. To
fulfill these conditions, E.ON and the MVM Group signed an
agreement on July 10, 2020, to sell innogy Česká republika a.s.
and thereby the entire Czech electricity and gas business of
innogy in the retail segment. E.ON had already reported these
activities of innogy in the Czech Republic as discontinued oper-
ations under IFRS 5 as of September 30, 2019. No additional
impairment loss was recognized from the comparison of the
carrying amounts of these discontinued operations and the fair
values less costs to sell as of the balance sheet date. The trans-
action was approved by the European Commission at the end
of October and subsequently completed on October 30, 2020.
The parties have agreed not to disclose the purchase price.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

145

In addition, on September 23, 2020, E.ON sold its subsidiary
E.ON Energiakereskedelmi Kft. (“EKER”)–which is responsible
for E.ON’s non-regulated commercial electricity retail business
in Hungary–to Audax Renovables. The parties have agreed not
to disclose the purchase price. Because of the obligation to dis-
pose of these activities, E.ON has already reported the business
of EKER as a disposal group pursuant to IFRS 5 with effect
from September 30, 2019. With the completion of these trans-
actions, E.ON has fully complied with the antitrust requirements
in connection with the innogy acquisition. E.ON had previously
withdrawn from operating individual charging stations for elec-
tric vehicles on German motorways.

Reorganization of the Hungary Business
At the beginning of October 2019, E.ON acquired the 27-percent
shareholding held by EnBW in ELMŰ Nyrt. (“ELMŰ”) and ÉMÁSZ
Nyrt. (“ÉMÁSZ”). Subsequently, a framework agreement was
concluded between E.ON, MVM Magyar Villamos Művek Zrt.
(“MVM”, a shareholder of ELMŰ and ÉMÁSZ) and Opus Global
Nyrt. (“Opus”). This agreement allows E.ON to create a balanced
and optimized portfolio in Hungary that enables the swift inte-
gration of innogy’s Hungarian operations.

The agreement is expected to be fully implemented in 2021 fol-
lowing clearance by the relevant authorities. Thereafter, MVM
will hold 100 percent of the ÉMÁSZ distribution network opera-
tor ÉMÁSZ, Hálózati Kft. (“ÉMÁSZ DSO”) and a 25-percent stake
in E.ON Hungária Zrt. (including the acquired Innogy holding
companies ELMŰ Zrt. and ÉMÁSZ Zrt.). In addition, Opus will
acquire E.ON’s current subsidiary E.ON Tiszántúli Áramhálózati
Zrt. (“E.ON ETI”). Both the ÉMÁSZ DSO distribution network
provider and E.ON ETI are reported as a disposal group in accor-
dance with IFRS 5 as of December 31, 2020. The activities of
E.ON ETI had already been reported as a disposal group in accor-
dance with IFRS 5 as of December 31, 2019. As of December 31,
2020, the assets, primarily property, plant and equipment and
other assets, totaling €0.3 billion and liabilities totaling €0.1 bil-
lion, primarily liabilities and provisions were reported. At the
ÉMÁSZ DSO, assets of €0.2 billion and liabilities of €0.1 billion
are reported in the disposal group as of December 31, 2020.

In fiscal year 2020, E.ON generated revenues of €57 million
(2019: €19 million), no interest income (2019: €5 million), inter-
est expenses of €7 million (2019: €8 million), and other income/
expenses of €41 million (2019: -€2 million), with the fully con-
solidated companies to be transferred. The following table shows
the main items of the income statement of the discontinued
operation (after allocation of elimination entries) until the date
of deconsolidation:

Income Statement—
Customer Solutions—Czech Republic innogy (Summary)

€ in millions

Sales

Other income

Other expense

Income/Loss from discontinued
operations before income taxes

Income taxes

Income/Loss from discontinued
operations, net

2020

824

-748

110

-19

2019

384

-419

-2

The disposed assets and liabilities related to intangible assets
(€306 million), rights of use (€9 million), property, plant and
equipment (€123 million), other assets (€512 million), provisions
(€1 million) and liabilities (€273 million). The deconsolidation
gains also include the recognition in income of the negative
currency translation effects previously reported in other com-
prehensive income (€-41.8 million).

An additional condition imposed by the EU Commission included
the sale of the German heating electricity business of E.ON
Energie Deutschland. The contract portfolio disposed of includes
all special contracts with customers for the supply of heating
electricity and all special contracts for the supply of household
electricity if household electricity is also purchased at the same
point of consumption and from the same contract partner for
heating electricity with separate metering. In anticipation of the
disposal, the contract portfolio was spun off into two newly
founded companies, E.ON Heizstrom Nord GmbH (“EHN”) and
E.ON Heizstrom Süd GmbH (“EHS”). Because of the obligation
to dispose of these activities, E.ON has already reported its
heating electricity business as a disposal group pursuant to
IFRS 5 with effect from September 30, 2019. The sale of EHN
and EHS was completed on April 28, 2020.

146

Nord Stream
E.ON Beteiligungen GmbH held all of the shares of PEG Infra-
struktur AG (PEGI) and thereby the indirect interest in Nord
Stream AG (15.5 percent). Nord Stream AG, a project company
founded in 2005, owns and operates two pipelines, each
1,224 kilometers long, that transport natural gas from Russia
to Germany. Under an agreement dated December 18, 2019,
E.ON Beteiligungen GmbH sold and transferred all of the shares
of PEGI, and consequently the indirect interest in Nord Stream
AG, to E.ON Pension Trust e.V. (EPT), with effect on and for
account of the trust assets of MEON Pensions GmbH & Co. KG
(MEON). EPT acts as trustee under the Contractual Trust Arrange-
ment (CTA), with MEON as trustor, which has bundled the ben-
efit obligations and the plan assets of companies of the E.ON
Group and is responsible for fulfillment of the acquired benefit
obligations and the investment of the plan assets transferred
for this purpose. There are additional CTA trust agreements with
EPT as trustee with companies of the E.ON Group as trustors.
Based on the assets, as of the end of 2019 MEON, with a volume
of €2.9 billion, is the largest trustor within the framework of the
CTA with EPT. The shares were transferred to PEGI with effect
from the close of December 31, 2019. The deconsolidation gain
in fiscal 2019 amounted to €0.4 billion. The purchase price pay-
ment of €1.1 billion was made on January 15, 2020.

Acquisition of Shares in VSE Holding Successfully Completed
E.ON completed the acquisition of 49 percent of the shares in
Východoslovenská energetika Holding s.a. (VSEH), based in Košice,
Slovakia, from RWE on August 21, 2020. VSEH consists of
various business segments, of which the electricity distribution
segment accounts for the largest share. With the transaction,
E.ON expands the energy network and customer solutions busi-
ness portfolio in Slovakia. Extensive decision-making powers over
the business activities of VSEH result in a controlling influence
in accordance with IFRS 10, so that VSEH and its subsidiaries
are fully consolidated in the E.ON Consolidated Financial State-
ments and an acquisition must be accounted for under IFRS 3.

The consideration transferred for the acquisition of the shares
amounted to €739 million. The purchase price to be paid to RWE
was not cash effective, but was offset against a receivable still
outstanding from the completed acquisition of the innogy shares.
In addition, a compensation payment for the waiver of the right

of first refusal of the Slovakian state was included in the consid-
eration transferred. The transaction therefore had no material
impact on cash flows from investing activities. Acquisition costs
of €2 million incurred were recognized in the income statement
under other operating expenses. The costs were mainly incurred
for consulting services.

The calculations of the fair values of the acquired assets and
liabilities are as follows:

Acquired Net Assets at Fair Value

€ in thousands

Concessions, commercial property rights, licenses,
and similar rights

Customer relationships and similar items

Right-of-use assets

Property, plant, and equipment

Operating receivables and other operating assets

Deferred tax assets

Non-current assets

Inventories

Receivables and other assets

Trade receivables and other operating assets

Liquid funds

Current assets

Financial liabilities

Operating liabilities

Provisions for pensions and similar obligations

Miscellaneous provisions

Deferred tax liabilities

Non-current liabilities

Financial liabilities

Trade payables and other operating liabilities

Miscellaneous provisions

Current liabilities

Total equity and liabilities

August 31, 2020
adjustments
included until
Dec. 31, 2020

5,753

109,448

5,494

778,202

7,971

10,235

917,103

5,071

3,940

108,003

5,812

122,826

223,030

10,390

8,217

–

138,099

379,736

64,695

136,022

22,381

223,098

437,095

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

147

The fair value of the acquired receivables and other assets
amounts to €112 million. These primarily consist of trade
receivables in the amount of €108 million. All receivables are
considered to be fully recoverable.

The identified preliminary goodwill results primarily from the
strategic reorientation of the customer business and the energy
networks as well as from the expected synergies from the inte-
gration of the company into the Group. E.ON has not made the
assumption that the goodwill will be deductible for tax purposes.
The goodwill is determined as follows:

Provisional Goodwill

€ in thousands

Consideration transferred

Fair value of net assets acquired
(including deferred taxes)

Dividend entitlement acquired

Non-controlling shares

Provisional goodwill

August 31, 2020
adjustments
included until
Dec. 31, 2020

739,809

437,095

32,688

222,919

492,945

The dividend right acquired results from a dividend paid by VSEH
to E.ON between the signing and closing dates of the transac-
tion. The non-controlling interest in the amount of €223 million
results from the proportionate allocation of the identifiable net
assets corresponding to the proportion of ownership interest.

The acquisition contributed €276 million to revenue and
€12.2 million to consolidated net income from August 31, 2020,
to December 31, 2020. If the acquisition had been effective
from January 1, 2020, revenue would have totaled €0.8 billion
and the contribution to consolidated net income would have
been €0.1 billion (December 31, 2020).

The purchase price allocation to the identified assets and liabili-
ties is still preliminary. Consequently, changes to the allocation
of the purchase price to the individual assets and liabilities may
still be made within the agreed adjustment period of up to twelve
months from the acquisition date.

Disposal of Real Estate Assets
E.ON NA Capital, Inc. and E.ON RE Investments LLC, fully con-
solidated companies in the E.ON Group, transferred real estate
assets totaling about US$288 million to other entities in 2020,
of which US$265 million was transferred to the trust assets of
E.ON Pension Trust, which is not fully consolidated. The purchase
price payments were primarily made in 2020.

Significant Transactions in 2019

Renewables
In March 2018, E.ON concluded an agreement with RWE to
acquire the network and sales business of innogy. As consider-
ation, E.ON has transferred to RWE, inter alia, most of its
Renewables business. These parts of the Renewables business
to be transferred to RWE were accordingly presented as discon-
tinued operations since June 30, 2018 and were deconsolidated
as of September 18, 2019.

The expenses and income attributable to this were reported
separately on the face of the Group’s income statement under
income/loss from discontinued operations, net. The prior-year
figures were adjusted accordingly. The relevant assets and lia-
bilities were reported in a separate line on the balance sheet;
prior-year figures are not to be adjusted. The cash flows of the
parts of the Renewables business to be transferred are also
reported separately in the cash flow statement and adjusted
accordingly to the prior-year values.

All intragroup receivables, payables, expenses and income
between the companies of the discontinued operation and the
remaining E.ON Group companies will be eliminated. For deliver-
ies, goods and services that were previously intragroup in nature,
but which after the deconsolidation will be carried forward
either between the companies to be transferred or with third
parties, the elimination entries required for the consolidation of
income and expenses were allocated entirely to the discontinued
operation.

The key figures presented in the segment reporting also include
the business activities in the Renewables segment which were
transferred to RWE. These figures are presented as if the trans-
ferred operation had not been reclassified in accordance with
IFRS 5. Note 35 provides additional information and the corre-
sponding reconciliations.

148

Pursuant to IFRS 5.18, the carrying amounts of all of the dis-
continued operation’s assets and liabilities must be measured
in accordance with applicable IFRS immediately before their
reclassification. In the course of this measurement, no material
impairments or need for reversals were recognized. In addition,
the carrying amount of the discontinued operation as a whole
must be tested for impairment by comparing it with the fair value
less costs to sell. The fair value less costs to sell is determined
from the transaction price agreed with RWE for the parts of the
Renewables business to be transferred less the expected trans-
action costs. The comparison did not result in the recognition of
any additional impairment as of the disposal date.

In fiscal year 2019, E.ON generated revenues of €37 million
(2018: €81 million), interest income of €70 million (2018:
€83 million), interest expenses of €1 million (2018: €1 million),
as well as other income of €14 million (2018: €243 million)
and other expenses of €441 million (2018: €1,050 million),
with the fully consolidated companies to be transferred in the
Renewables segment.

The following table shows the main items of the income state-
ment of the discontinued operation in the Renewables segment
(after allocation of elimination entries) until the date of decon-
solidation:

Income Statement—Renewables (Summary) 1

€ in millions

Sales

Other income

Other expense

Income/loss from discontinued operations before
income taxes

Income taxes

Income/Loss from discontinued operations, net

1This does not include the deconsolidation income amounting to €784 million.

2019

481

-125

365

-101

264

The disposed assets and liabilities in the Renewables segment
related to intangible assets (€0.3 billion), right-of-use assets
(€0.3 billion), property, plant and equipment (€8.0 billion), other
assets (€4.2 billion), provisions (€0.8 billion) and liabilities
(€8.3 billion).

The deconsolidation gain results mainly from the recognition in
income of currency translation effects (€0.5 billion) previously
recognized in other comprehensive income.

Since the loss of control, the remaining 40-percent stake in
Rampion Renewables Limited, which itself holds 50 percent of
the Rampion offshore wind farm, has qualified as an associated
company and been included in the consolidated financial state-
ments using the equity method. Due to the decision to sell the
stake to RWE, the investment was reclassified to assets held for
sale as of December 31, 2020.

Minority Interests in Nuclear Power Plants
In addition to the transfer of the majority of the Renewables
business, under the agreement RWE will acquire the minority
interests held by E.ON in the nuclear power plants operated
by RWE, Kernkraftwerke Lippe-Ems GmbH and Kernkraftwerk
Gundremmingen GmbH. The minority interests included in the
Non-Core Business segment and related liabilities were classified
as a disposal group from June 30, 2018. In total, assets in the
amount of €0.2 billion, provisions in the amount of €0.8 billion
and liabilities in the amount of €0.2 billion were transferred to
RWE in September 2019.

Coromatic
On July 11, 2019, the E.ON Group concluded the takeover of
Swedish service provider Coromatic, a leading Nordic supplier
of critical building infrastructure. The seller was the EQT Group.
Coromatic has its registered office in Stockholm and has around
500 employees. The company has more than 5,000 customers
in Scandinavia that are active in a wide variety of industries,
including data centers, healthcare, the public sector, transport,
industry, telecommunications, finance and retail. The parties
agreed not to disclose the purchase price. Overall, the transaction
is not significant for the Group.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

149

total amount of benefit obligations already contracted but still
outstanding (excluding expected contract renewals and expected
new contracts) was €29.4 billion as of December 31, 2020
(December 31, 2019: €20.6 billion). The majority of these bene-
fit obligations are expected to be met within the next three
years. Revenue in the E.ON Group is recognized primarily on an
over-time basis.

Revenues are broken down into intragroup and external revenues
in the segment information (Note 35). They are also broken
down into key regions and technologies. The overview also shows
the effect of revenues on operating cash flow before interest
and taxes.

Other operating income increased by €3,540 million to
€8,907 million (2019: €5,367 million).

Income and expenses from derivative financial instruments
(including currency derivatives) relate to fair value measure-
ment under IFRS 9. Realized gains of €713 million (2019:
€497 million) from acquired innogy derivatives recognized in
the prior year under other income have now been reclassified to
income from derivative financial instruments. In addition, real-
ized income from currency derivatives (€1,679 million > 2019;
€1,534 million) is reported under income from derivative finan-
cial instruments (including currency derivatives).

Corresponding items from derivative financial instruments
(including currency derivatives) are included in other operating
expenses.

(6) Revenues

At €60.9 billion, revenues in 2020 were roughly €20.1 billion
higher than in the previous year, primarily due to the inclusion
of the innogy Group for an entire year for the first time. The pre-
vious year’s revenue figure was adjusted due to a change in pre-
sentation in connection with the application of failed own-use
accounting (decrease of €200 million). Because of the related
adjustments to the cost of materials (decrease of €692 million),
other operating income (decrease of €246 million) and other
operating expenses (increase of €246 million) there was no over-
all effect on earnings.

Revenues recognized in the current reporting period arising
from performance obligations that have been fully or partially
settled in prior reporting periods amounted to €0.4 billion. The

(7) Own Work Capitalized

Own work capitalized amounted to €680 million in 2020
(2019: €487 million) and resulted primarily from capitalized
work performed in connection with ongoing and completed
IT projects and network assets. The increase is primarily due
to the inclusion of innogy for an entire year for the first time.

(8) Other Operating Income and Expenses

The table below provides details of other operating income for
the periods indicated:

Other Operating Income 1

€ in millions

Income from exchange rate differences

Gain on derivative financial instruments
(including currency derivatives)

Gain on disposal of non-current assets and
securities

Gain on the reversal of provisions

Miscellaneous

Total

2020

1,064

2019

327

5,906

3,378

469

1,416

8,907

612

1,032

5,367

1Adjustment of prior-year figures in the context of “failed-own-use” accounting regarding
presentation of sales, cost of materials, other operating income and other operating expenses
with no impact on earnings.

150

The gain on the disposal of property, plant and equipment and
securities consisted primarily of gains on the disposal of the
Heizstrom Nord and Heizstrom Süd companies in the amount of
€160 million. In 2019 there were gains on the disposal of PEGI
in the amount of €390 million. Gains were realized on the sale
of securities in the amount of €23 million (2019: €42 million).

Miscellaneous other operating income included effects from
the reversal of own-use contracts recognized as liabilities in the
amount of €297 million in the framework of the innogy pur-
chase price allocation (2019: €207 million), the proceeds from
transactions outside ordinary business activities in the amount
of €200 million (2019: €243 million), gains on disposals
(€135 million) and rental and lease interest in the amount of
€63 million (2019: €51 million).

Other operating expenses of €10,919 million were 44 percent
above the prior-year level of €7,570 million. Expenditures relating
to derivative financial instruments (including currency derivatives)
increased by €1,488 million to €5,787 million. The realization
gains of €597 million (2019: €419 million) from acquired innogy
derivatives recognized in the previous year under miscellaneous
other expenses have been reclassified to expenses from deriva-
tive financial instruments. In addition, realized expenses from
currency derivatives (€1,917 million > 2019: €1,350 million) are
reported under expenses from derivative financial instruments
(including currency derivatives).

Losses from exchange rate differences in the amount of
€641 million increased by €216 million compared to the prior
year (€425 million).

The following table provides details of other operating expenses
for the periods indicated:

Other Operating Expenses 1

€ in millions

Loss from exchange rate differences

Loss on derivative financial instruments
(including exchange rate changes)

Taxes other than income taxes

Loss on disposal of non-current assets
and securities

Write-down of current assets

Miscellaneous

Total

2020

641

5,787

100

133

317

3,941

10,919

2019

425

4,299

144

290

2,321

7,570

Miscellaneous other operating expenses include effects in the
amount of €563 million from the reversal of own-use contracts
capitalized as part of the innogy purchase price allocation
(2019: €261 million). Also included are consulting and audit
services expenses in the amount of €287 million (2019:
€229 million), advertising and marketing expenses in the amount
of €174 million (2019: €131 million), rents and leases in the
amount of €44 million (2019: €46 million) and services rendered
by third parties, refunds and passing-on charges in the amount
of €722 million (2019: €643 million). This item also includes IT
expenditures in the amount of €396 million (2019: €344 million),
insurance premiums in the amount of €57 million (2019: €43 mil-
lion), travel expenses in the amount of €50 million (2019:
€75 million), contributions and fees in the amount of €99 million
(2019: €53 million) and expenses for decommissioning, recla-
mation, repairs in the amount of €83 million (2019: €74 million).

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

151

Cost of Materials 1

€ in millions

Expenses for raw materials and supplies
and for purchased goods

Expenses for purchased services

Total

2020

2019

31,599

15,548

47,147

20,049

11,385

31,434

was offset by the negative valuation effects of the long-term
provisions. The interest expense from the innogy bonds acquired
is reduced by the reversal of valuation differences between the
nominal value and the fair value of the bonds of innogy SE and
innogy Finance B.V. recognized in the course of initial consolida-
tion in the amount of €328 million. This positive partial effect
is reported under non-operating earnings.

Other interest income consists primarily of income from previ-
ous periods. Other interest expenses include the accretion of
provisions for asset retirement obligations in the amount of
€3 million (2019: €44 million). Also contained in this item is the
net interest cost from provisions for pensions in the amount of
€95 million (2019: €73 million) and financial lease liabilities in
the amount of €154 million (2019: €49 million).

Interest expenses also include €58 million of negative earnings
effects (2019: €29 million) from non- controlling interests in
subsidiaries that have already been fully consolidated and inter-
ests in fully consolidated partnerships, which are to be recog-
nized as liabilities in accordance with IAS 32, and with legal
structures that give their shareholders a statutory right of with-
drawal combined with an entitlement to a settlement payment.

Interest expense was reduced by capitalized interest on debt
totaling €8 million (2019: €13 million).

(9) Cost of Materials

The principal components of expenses for raw materials and
supplies and for purchased goods are the purchase of gas and
electricity. Fuel supply is also included in this line item. Expenses
for purchased services consist primarily of network usage
charges and maintenance costs.

Cost of materials of €47,147 million was significantly higher
than the prior- year level of €31,434 million. The increase is
primarily attributable to the inclusion of the innogy Group for an
entire year for the first time.

(10) Financial Results

The following table provides details of financial results for the
periods indicated:

Financial Results 1

€ in millions

Income/Loss from companies in which
equity investments are held
Fair value through P&L
Other

Impairment charges/reversals on other
financial assets

Income/Loss from equity investments

Income/Loss from securities, interest and
similar income

Amortized cost
Fair value through P&L
Fair value through OCI
Other interest income

Interest and similar expenses

Amortized cost
Fair value through P&L
Other interest expenses

Net interest income/loss

Financial results

1Adjusted prior-year figures.

2020

2019

102
68
34

-84

670
35
296
14
325

-1,390
-658
-320
-412

-720

-702

55
47
8

1,032
439
443
13
137

-1,677
-939
-176
-562

-645

-587

The decrease in financial results relative to the previous year is
primarily attributable to the increased debt resulting from the
inclusion of innogy and the valuation effects of securities mea-
sured at fair value reported in the non-operating result, which

152

(11) Income Taxes

The following table provides details of income taxes, including
deferred taxes, for the periods indicated:

Income Taxes 1

€ in millions

Domestic income taxes

Foreign income taxes

Current taxes

Domestic

Foreign

Deferred taxes

Total income taxes

1Adjusted prior-year figures.

2020

137

239

376

524

-29

495

871

2019

320

-25

295

-445

193

-252

The tax expense in 2020 amounted to €871 million (2019:
€43 million). In 2020, the tax rate was 40 percent (2019: 6 per-
cent). The reason for the high tax rate in the reporting period is
essentially a one-off effect from the valuation of deferred tax
assets in the first half of 2020, which is partially offset by taxes
for previous years. In 2019, tax credit effects on non-operating
earnings and the reversal of tax provisions and liabilities for
previous years led to a reduction in the tax rate.

Of the amount reported as current taxes, €276 million is attrib-
utable to previous years (2019: €309 million).

Deferred taxes resulted from changes in temporary differ-
ences affecting net income, which totaled €200 million (2019:
-€581 million), loss carryforwards of €293 million (2019:
€314 million) and tax credits amounting to €2 million (2019:
€15 million). There were also offsetting changes recognized
directly in equity and disposal effects for deferred taxes from
discontinued operations totaling -€100 million.

Income tax assets amounted to €1,037 million (previous year:
€1,411 million), of which €1,003 million was short-term (previ-
ous year: €1,377 million), while income tax liabilities amounted
to €1,209 million (previous year: €1,080 million), of which
€847 million was short-term (previous year: €787 million).
These items consist primarily of income taxes for the respective
current year and for prior-year periods that have not yet been
definitively examined by the tax authorities.

As of December 31, 2020, €13 million (2019: €32 million) in
deferred tax liabilities were recognized for the differences between
net assets and the tax bases of subsidiaries and associated
companies (outside basis differences). Accordingly, deferred tax
liabilities were not recognized for temporary differences of
€936 million (2019: €538 million) at subsidiaries and associated
companies, as E.ON is able to control the timing of their reversal
and the temporary difference will not reverse in the foreseeable
future.

Changes in tax rates resulted in deferred tax income of
€147 million in total (2019: tax income of €27 million).

Income taxes relating to discontinued operations (see also Note 5)
are reported in the income statement under “Income from
discontinued operations.” In the fiscal year they amounted to
tax expense of €19 million (2019: tax expense of €103 million).

The base income tax rate of 31 percent (2019: 30 percent)
applicable in Germany is composed of corporate income tax
(15 percent), trade tax (15 percent) (2019: 14 percent) and the
solidarity surcharge (1 percent). The income tax rate of 31 per-
cent corresponds to the tax rate applicable to E.ON SE for
2020. The change is based on an adjustment of the trade tax
rate due to the inclusion of the innogy tax group in the income
tax group of E.ON SE. The differences from the effective tax
rate are reconciled as follows:

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

153

2020

€ in millions

in %

€ in millions

2,181

676

-203

-147

-287

-103

127

1,119

-50

-276

871

100,0

31,0

-9,3

-6,7

-13,1

-4,7

5,8

51,3

-2,3

-12,7

0,7

40,0

772

232

228

-27

-140

-377

-51

515

-378

2019

in %

100,0

30,0

27,8

-3,4

-17,6

-47,3

-6,4

64,6

2,1

-47,4

3,0

5,4

December 31, 2020

December 31, 2019

Tax assets

Tax liabilities

Tax assets

Tax liabilities

399

348

209

406

3,109

2,042

2,968

538

–

809

10,867

-3,195

7,672

-5,389

2,283
287

703

723

3,956

131

–

1,649

465

–

691

8,382

–

8,382

-5,389

2,993
676

563

–

170

196

764

3,183

1,878

3,063

824

680

11,356

-2,584

8,772

-6,578

2,194
717

1,046

923

4,125

270

1,231

107

397

–

966

9,086

–

9,086

-6,578

2,508
271

Reconciliation to Effective Income Taxes/Tax Rate 1

Income/Loss from continuing operations before taxes

Expected income taxes

Foreign tax rate differentials

Changes in tax rate/tax law

Tax effects on tax-free income

Tax effects of non-deductible expenses and permanent differences

Tax effects on income from companies accounted for under the equity method

Tax effects of changes in value and non-recognition of deferred taxes

Tax effects of other taxes on income

Tax effects of income taxes related to other periods

Other

Effective income taxes/tax rate

1Adjusted prior-year figures.

Deferred tax assets and liabilities as of December 31, 2020, and
December 31, 2019, break down as shown in the following table:

Deferred Tax Assets and Liabilities 1

€ in millions

Intangible assets

Right-of-use assets

Property, plant and equipment

Financial assets

Inventories

Receivables

Provisions for pensions and similar obligations

Miscellaneous provisions

Liabilities

Loss carryforwards

Tax credits

Other

Subtotal

Changes in value

Deferred taxes (gross)

Netting

Deferred taxes (net)

Current

1Adjusted prior-year figures.

154

Income taxes recognized in other comprehensive income for the
years 2020 and 2019 break down as follows:

Of the deferred taxes reported, a total of -€797 million was
charged directly to equity in 2020 (2019: -€538 million charge).
A further €49 million in current taxes (2019: €49 million)
was also recognized directly in equity. Currency translation
differences with an impact on income tax within this item were
reclassified to other comprehensive income.

Income Taxes on Components of Other Comprehensive Income 1

€ in millions

Cash flow hedges

Securities (IFRS 9)

Currency translation adjustments

Remeasurements of defined benefit plans

Companies accounted for under the equity method

Total

1Adjusted prior-year figures.

Before
income
taxes

-358

-214

-1,093

-361

-1,976

Income
taxes

-11

–

217

-8

236

2020

After
income
taxes

-320

-214

-876

-369

Before
income
taxes

-453

-1

-569

-146

-112

-1,740

-1,281

Income
taxes

-2

-33

-3

-28

2019

After
income
taxes

-444

–

-571

-179

-115

-1,309

In connection with the acquisition of the Slovakian VSEH Group,
deferred tax assets of €10 million and deferred tax liabilities of
€138 million resulted from the purchase price allocation as of
December 31, 2020.

The final purchase price allocation to the acquisition of innogy SE
resulted in deferred tax assets of €1,313 million and deferred
tax liabilities of €1,358 million as of December 31, 2020.

Since January 1, 2004, domestic tax loss carryforwards can only
be offset against a maximum of 60 percent of taxable income,
subject to a full offset against the first €1 million. This minimum
corporate taxation also applies to trade tax loss carry forwards.
The domestic tax loss carryforwards result from adding corpo-
rate tax loss carryforwards amounting to €79 million (2019:
€162 million) and trade tax loss carryforwards amounting to
€1,377 million (2019: €1,773 million).

In connection with the acquisition of the Swedish service pro-
vider Coromatic, deferred tax assets of €4 million and deferred
tax liabilities of €18 million resulted from the purchase price
allocation as of December 31, 2019.

The foreign tax loss carryforwards consist of corporate tax loss
carryforwards amounting to €9,753 million (2019: €8,738 million)
and tax loss carryforwards from local income taxes amounting
to €506 million (2019: €65 million).

The declared tax loss carryforwards as of the dates indicated
are as follows:

Of the foreign tax loss carryforwards, a significant portion
relates to previous years.

Tax Loss Carryforwards

€ in millions

Domestic tax loss carryforwards

Foreign tax loss carryforwards

Total

December 31,

2019

1,935

8,803

10,738

2020

1,456

10,259

11,715

Notes
Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

155

Deferred taxes were not recognized, or no longer recognized,
on a total of €8,433 million (2019: €7,813 million) in tax loss
carryforwards that for the most part do not expire. Deferred
tax assets were not recognized, or no longer recognized, on
non-expiring domestic corporate tax loss carryforwards of
€70 million (2019: €142 million) or on domestic trade tax loss
carryforwards of €1,353 million (2019: €1,742 million).

Deferred tax assets were not recognized, or are no l onger recog-
nized, in the amount of €16,750 million (2019: €12,142 million)
for temporary differences which are recognized in income and
equity.

As of December 31, 2020, and December 31, 2019, E.ON
reported deferred tax assets for companies that incurred losses
in the current or the prior-year period that exceed the deferred
tax liabilities by €387 million and €74 million, respectively. The

basis for recognizing deferred tax assets is an estimate by manage-
ment based on the development of temporary reversal effects
and concrete tax structuring measures of the extent to which it
is probable that the respective companies will achieve taxable
earnings in the future against which the as yet unused tax losses,
tax credits and deductible temporary differences can be offset.

Income tax items are regularly assessed, in particular against
the backdrop of numerous changes in tax laws, tax regulations,
legal decisions and ongoing tax audits. E.ON is responding to this
circumstance, in particular through the application of IFRIC 23,
by continuously identifying and assessing the tax environment
and the resulting effects. The most current information is then
incorporated into the estimate parameters necessary for mea-
suring the tax provisions. Related potential interest rate effects
are also assessed and measured accordingly. They are presented
in separate items.

(12) Personnel-Related Information

Employee Stock Purchase Program

Personnel Costs

The following table provides details of personnel costs for the
periods indicated:

Personnel Costs

€ in millions

Wages and salaries

Social security contributions

Pension costs and other employee benefits

Pension costs

Total

2020

4,635

696

535
518

2019

3,301

436

364
355

5,866

4,101

Personnel costs of €5,866 million were €1,765 million higher
than the prior-year figure of €4,101 million, mainly because of
the inclusion of innogy for a full year for the first time.

Share-Based Payment

The expenses for share-based payment in 2020 (the E.ON Share
Matching Plan, the multi-year bonus and the E.ON Performance
Plan) amounted to €21.7 million (2019: €21.2 million). Expenses
of €4.8 million were also incurred in the 2020 reporting period
in connection with innogy SE’s share-based payment system.

The voluntary employee stock purchase program, which through
2015 provided employees of German Group companies the
opportunity to purchase E.ON shares at preferential terms, was
again suspended in 2020, as it had been from 2016 to 2019.

Long-Term Variable Compensation

Members of the Management Board of E.ON SE and certain
executives of the E.ON Group receive share-based payment
as part of their voluntary long-term variable compensation. The
purpose of such compensation is to reward their contribution
to E.ON’s growth and to further the long-term success of the
Company. This variable compensation component, comprising
a long-term incentive effect along with a certain element of
risk, provides for a sensible linking of the interests of shareholders
and management.

The following discussion includes reports on the E.ON Share
Matching Plan introduced in 2013 and on the E.ON Performance
Plan introduced in 2017.

156

E.ON Share Matching Plan

From 2013 to 2016, E.ON granted virtual shares to members
of the Management Board of E.ON SE and certain executives of
the E.ON Group under the E.ON Share Matching Plan. At the end
of its four-year term, each virtual share was entitled to a cash
payout linked to the final E.ON share price established at that
time. The calculation inputs for this long-term variable compen-
sation package were equity deferral, base matching and perfor-
mance matching.

The equity deferral was determined by multiplying an arithmetic
portion of the beneficiary’s contractually agreed target bonus
by the beneficiary’s total target achievement percentage from
the previous year. The equity deferral was converted into virtual
shares and vested immediately. Beneficiaries were additionally
granted virtual shares in the context of base matching and per-
formance matching. For members of the Management Board of
E.ON SE, the proportion of base matching to the equity deferral
was determined at the discretion of the Supervisory Board; for
all other beneficiaries it was 2:1. The performance- matching
target value at allocation was equal to that for base matching in
terms of amount. Performance matching resulted in a payout
only on achievement of a minimum performance as specified at
the beginning of the term by the Management Board and the
Supervisory Board.

In 2015 and 2016, virtual shares from the third and fourth tranche
were granted in the context of base matching and performance
matching exclusively to members of the Management Board of
E.ON SE. Executives were granted a multi-year bonus, the terms
of which are described further below, instead of the base and
performance matching.

In 2017 virtual shares were granted for the last time under the
E.ON Share Matching Plan, only to members of the Management
Board of E.ON SE and only to the extent of the “equity deferral.”
The total of these allocations is shown below as the fifth tranche
of the E.ON Share Matching Plan. Additional information can be
found on pages 85 and 86 of the compensation report.

A payout generally will not take place until after the end of the
four-year term. This is true even if the beneficiary retires before-
hand, or if the beneficiary’s contract is terminated on operational
grounds or expires during the term. A payout before the end of
the term will take place in the event of a change of control or on

the death of the beneficiary. If the service or employment rela-
tionship ends before the end of the term for reasons within the
control of the beneficiary, all virtual shares—except for those that
resulted from the equity deferral—expire.

At the end of the term, the sum of the dividends paid to the ordi-
nary shareholders during the term is added to each virtual share.
The maximum amount to be paid out to a participant in the fifth
tranche of the E.ON Share Matching Plans is limited to twice
the sum of the equity deferral.

60-day average prices are used to determine both the target
value at issuance and the final price in order to mitigate the
effects of incidental, short-lived price movements.

The plan also contains adjustment mechanisms to eliminate the
effect of events such as interim corporate actions.

The following are the base parameters of the tranches of the
share matching plan active in 2020:

E.ON Share Matching Virtual Shares

Date of issuance

Term

Target value at issuance

5th tranche

Apr. 1, 2017

4 years

€7.17

The 60-day average of the E.ON share price as of the balance
sheet date is used to measure the fair value of the virtual shares.
The provision for the fifth tranche of the E.ON Share Matching Plan
as of the balance sheet date is €3.1 million (2019: €2.2 million).
The expense for the fifth tranche amounted to €0.8 million in the
2020 fiscal year (2019: €0.2 million).

E.ON Performance Plan (EPP)

In 2017, 2018, 2019 and 2020, E.ON granted the members
of the Management Board of E.ON SE and certain executives
of the E.ON Group virtual shares under the E.ON Performance
Plan. The vesting period of each tranche is four years. Vesting
periods start on January 1 of each year.

Notes
Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

157

The beneficiary will receive virtual shares in the amount of the
agreed target. The conversion into virtual shares will be based on
the fair market value on the date when the shares are granted.
The fair market value will be determined by applying methods
accepted in financial mathematics, taking into account the
expected future payout and consequently the volatility and risk
associated with the EPP. The number of virtual shares allocated
may change during the four-year vesting period, depending on
the total shareholder return (“TSR”) of E.ON stock compared
with the TSR of the companies in a peer group (“relative TSR”).

The TSR is the return on E.ON stock, which takes into account
the stock price plus the assumption of reinvested dividends,
adjusted for changes in capital. The peer group used for relative
TSR will be the other companies in E.ON’s peer index, the
STOXX® Europe 600 Utilities. Only companies included in the
STOXX® Europe 600 Utilities for which no takeover offer pursu-
ant to Section 29(1) of the German Securities Acquisition and
Takeover Act (WpÜG) or pursuant to an applicable comparable
regulation of a foreign legal system was or is effective during
the fiscal year in question and in which E.ON does not hold or
did not hold a significant portion of shares during the fiscal year
in question will be taken into consideration for the tranche allo-
cated in 2019. The peer group for the tranche allocated in 2019
is also adjusted for companies that have not been in the index
for the full year.

During a tranche’s vesting period, E.ON’s TSR performance is
measured once a year in comparison with the companies in the
peer group and set for that year. E.ON’s TSR performance in a
given year determines the final number of one fourth of the vir-
tual shares granted at the beginning of the vesting period. For
this purpose, the TSRs of all companies are ranked, and E.ON’s
relative position is determined based on the percentile reached.
If target attainment in a year is below the threshold defined by

the Supervisory Board upon allocation, the number of virtual
shares is reduced by one fourth. If E.ON’s performance is at
the upper cap or above, the fourth of the virtual shares allocated
for the year in question will increase, but to a maximum of
150 percent. Linear interpolation is used to translate interme-
diate figures into percentage.

The resulting number of virtual shares at the end of the vesting
period is multiplied by the average price of E.ON stock in the
final 60 days of the vesting period. This amount is increased by
the dividends distributed on E.ON stock during the vesting
period and then paid out. The sum of the payouts is capped at
200 percent of the agreed target.

The virtual shares are canceled if the employment relationship
of the beneficiary ends before the end of the term for reasons
within the control of the beneficiary. This shall apply in particular
in the event of termination by the beneficiary and in the event
of extraordinary termination for good cause by the Company.
If the employment relationship of the beneficiary is terminated
before retirement, through the end of a limited term or for oper-
ational reasons before the end of the term, the virtual shares do
not expire but are settled at maturity.

If the employment relationship ends before maturity due to death
or permanent invalidity, the virtual shares are settled before
maturity, whereby in this case the average TSR performance of
the fiscal years that have already completely ended is used to
calculate the payment amount. The same shall apply in the case
of a change in control related to E.ON SE and also if the allocating
company leaves the E.ON Group before maturity.

The following are the base parameters of the tranches of the
E.ON Performance Plan active in 2019:

E.ON Performance Plan Virtual Shares

Date of issuance

Term

Target value at issuance

The provision for the first, second, third and fourth tranche of
the E.ON Performance Plan as of the balance sheet date is
€47.5 million (2019: €26.8 million). The expense for the first,
second, third and fourth tranches amounted to €20.8 million
in the 2020 fiscal year (2019: €11.9 million).

4th tranche

3rd tranche

2nd tranche

1st tranche

Jan. 1, 2020

Jan. 1, 2019

Jan. 1, 2018

Jan. 1, 2017

4 years

€7.88

4 years

€6.68

4 years

€6.41

4 years

€5.84

Employees

During 2020, E.ON employed an average of 78,523 persons
(2019: 61,050), not including an average of 2,313 apprentices
(2019: 1,656) and 235 (2019: 178) board members/managing
directors.

The breakdown by segment is shown in the following table:

Employees 1

Headcount

Energy Networks

Customer Solutions

Renewables

Corporate Functions/Other

Employees, core business

Non-Core Business

Total employees, E.ON Group 2

158

2020

39,769

32,589

–

4,300

76,658

1,865

78,523

2019

29,277

25,331

742

3,822

59,172

1,878

61,050

(13) Other Information

German Corporate Governance Code

On December 15, 2020, the Management Board and the Super-
visory Board of E.ON SE made a declaration of compliance
pursuant to Section 161 of the German Stock Corporation Act
(“AktG”). The declaration has been made permanently and
publicly accessible to stockholders on the Company’s Web site
(www.eon.com).

Fees and Services of the Independent Auditor

During 2020 and 2019, the following fees for services provided
by the independent auditor of the Consolidated Financial State-
ments, Pricewaterhouse Coopers (“PwC”) GmbH, Wirtschafts-
prüfungs gesellschaft, (domestic) and by companies in the inter-
national PwC network were recorded as expenses:

Independent Auditor Fees

€ in millions

Financial statement audits

Domestic

Other attestation services

Domestic

Tax advisory services

Domestic

Other services
Domestic

Total

Domestic

2020

32
23

7
6

1
1

2
2

42
32

2019

37
28

4
4

–
–

1
1

42
33

1Figures do not include board members, managing directors, or apprentices.
2innogy is integrated into the E.ON hierarchy.

The auditor’s fees relate to the audit of the Consolidated Financial
Statements and the legally mandated financial statements of
E.ON SE and its affiliates. They also include fees for auditing
reviews of the IFRS interim financial statements and other tests
directly required by the audit. The figure from the previous year
also includes additional auditing services in relation to the innogy
transaction.

The fees for other auditing services include all attestation ser-
vices that are not auditing services and are not used in connection
with the audit. In 2020, these costs are for the legally required
attestation services (e.g., as a result of the Renewable Energy Act
[EEG], the Act on Combined Heat and Power Generation [KWKG])
and for other voluntary attestation services (primarily in con-
nection with new IT systems and data migration as well as spe-
cial auditing services in the course of the transfer of the renew-
able energy business from E.ON to RWE).

The fees for tax consulting services mainly relate to services in
the area of tax compliance.

Fees for other services consist primarily of services in connec-
tion with the transfer of E.ON’s renewables energy business to
RWE, and technical support in connection with the implemen-
tation of transactions and new requirements in the areas of IT
and accounting issues.

In the previous year, the fees indicated took into consideration
the innogy subsidiaries from the acquisition date and the compa-
nies transferred to RWE until the date of deconsolidation.

List of Shareholdings

The list of shareholdings pursuant to Section 313 (2) HGB is an
integral part of these Notes to the Financial Statements and is
presented on pages 218 through 235.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

159

2020

1,310

-250

1,060

-40

-3

-43

1,017

0.41

-0.02

0.39

2,607

2019

729

-189

540

1,063

-53

1,010

1,550

0.24

0.44

0.68

2,293

(14) Earnings per Share

The computation of basic and diluted earnings per share for the
periods indicated is shown below:

Earnings per Share 1

€ in millions

Income/Loss from continuing operations

Less: Non-controlling interests

Income/Loss from continuing operations (attributable to shareholders of E.ON SE)

Income/Loss from discontinued operations, net

Less: Non-controlling interests

Income/Loss from discontinued operations, net (attributable to shareholders of E.ON SE)

Net income/loss attributable to shareholders of E.ON SE

in €

Earnings per share (attributable to shareholders of E.ON SE)

from continuing operations

from discontinued operations

from net income/loss

Weighted-average number of shares outstanding (in millions)

1Adjusted prior-year figures.

The computation of diluted earnings per share is identical to
that of basic earnings per share because E.ON SE has issued no
potentially dilutive ordinary shares.

(15) Goodwill, Intangible Assets, Right-of-use
Assets and Property, Plant and Equipment

The changes in goodwill and intangible assets, in right-of-use
assets, and in property, plant and equipment, are presented in
the tables on the following pages:

160

Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment

Acquisition and production costs

Accumulated depreciation

Net carrying

amounts

Exchange
rate
differences

Changes in
scope of
consolida-
tion

Additions

Disposals

Transfers

€ in millions

Goodwill

Customer relationships and similar items

Concessions, commercial property rights, licenses, and
similar rights

Development expenditures

Advance payments

Intangible assets

Land and buildings

Networks

Storage, e-charging and production capacities

Technical equipment and machine

Fleet, office and business equipment

Right-of-use assets

Real estate and leasehold rights

Buildings

Technical equipment, plant and machinery

Other equipment, fixtures, furniture and office equipment

Advance payments and construction in progress

Property, plant and equipment

Jan. 1, 2020

19,271

2,218

2,742

720

379

6,059

727

1,860

168

2,802

1,111

3,839

55,774

1,234

2,625

64,583

-153

-20

-60

-13

-8

-101

-11

–

-9

-19

-57

-212

-12

-3

-283

493

140

-1

-9

240

379

–

510

199

789

102

260

–

415

100

2,117

134

1,381

3,749

–

-10

-132

-57

-15

-214

-43

-14

–

-7

-36

-100

-17

-22

-625

-56

-7

-727

Dec. 31,
2020

19,611

2,286

3,211

888

334

6,719

779

2,102

178

3,106

1,152

3,980

58,485

1,483

2,569

–

115

152

-222

–

-11

–

-11

129

1,191

-1,465

-32

67,669

-28,833

123

100

-2,381

-30,746

36,923

Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2020

Energy Networks

Customer Solutions

Non-Core Business

€ in millions

Germany

Sweden

ECE/Turkey

Germany

Net carrying amount of goodwill as of January 1, 2020

7,879

Changes resulting from acquisitions and disposals

Impairment charges

Other changes 1

–

Net carrying amount of goodwill as of December 31, 2020

7,879

Growth rate (in %)2, 3

Cost of capital (in %) 2, 3

Other non-current assets 4

Impairment

Reversals

n.a.

-12

–

804

-100

760

–

-139

6,718

–

6,718

0.5

4.7

-53

Nether-
lands/
Belgium

–

-59

–

1,926

–

-103

1,823

–

-112

–

Other

808

-311

–

-20

477

–

-5

1Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal groups.
2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
3Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
4Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.

Exchange

rate

Changes in

scope of

consolida-

Jan. 1, 2020

differences

tion

Additions

Disposals

Transfers

Impairment

Reversals

-1,790

-625

-866

-357

-73

-1,921

-100

-71

-2

-3

-44

-220

-54

-1,727

-26,324

-680

-48

-1

–

-1

–

-3

–

-2

–

-9

–

-10

-15

–

-279

-521

-134

-931

-109

-207

-1

-4

-53

-374

-2

-121

-2,112

-146

–

-7

-47

-1

–

-5

-2

–

-70

-59

-95

-7

-231

-1

–

-1

-2

–

-4

-154

-2

-11

-171

Dec. 31,

2020

-1,784

-945

Dec. 31,

2020

17,827

1,341

-1,328

1,883

-573

-18

-2,864

-204

-274

-2

-6

-77

-563

-58

-1,817

-28,034

-783

-54

315

316

3,855

575

1,828

101

2,543

1,094

2,163

30,451

700

2,515

–

-24

E.ON Group

17,481

565

–

-219

17,827

–

-404

–

106

175

–

345

405

–

PreussenElektra

Generation Turkey

Corporate Functions/Other

–

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

161

Accumulated depreciation

Net carrying
amounts

Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment

Exchange

rate

Changes in

scope of

consolida-

Acquisition and production costs

Jan. 1, 2020

differences

Additions

Disposals

Transfers

Jan. 1, 2020

Exchange
rate
differences

Changes in
scope of
consolida-
tion

Additions

Disposals

Transfers

Impairment

Reversals

-1,790

-625

-866

-357

-73

-1,921

-100

-71

-2

-3

-44

-220

-54

-1,727

-26,324

-680

-48

-1

–

-1

–

-3

-10

–

-2

-15

–

-9

–

-279

-521

-134

-931

-109

-207

-1

-4

-53

-374

-2

-121

-2,112

-146

–

-32

67,669

-28,833

123

100

-2,381

–

106

175

–

345

405

–

-7

-47

-1

–

-5

-2

–

-70

-59

-95

-7

-231

-1

–

-1

-2

–

-4

-154

-2

-11

-171

–

Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2020

Energy Networks

Customer Solutions

Non-Core Business

€ in millions

Germany

Sweden

ECE/Turkey

Germany

PreussenElektra

Generation Turkey

Corporate Functions/Other

–

-24

Customer relationships and similar items

Concessions, commercial property rights, licenses, and

€ in millions

Goodwill

similar rights

Development expenditures

Advance payments

Intangible assets

Land and buildings

Networks

Storage, e-charging and production capacities

Technical equipment and machine

Fleet, office and business equipment

Right-of-use assets

Real estate and leasehold rights

Buildings

Technical equipment, plant and machinery

Other equipment, fixtures, furniture and office equipment

Advance payments and construction in progress

Property, plant and equipment

Net carrying amount of goodwill as of January 1, 2020

7,879

Changes resulting from acquisitions and disposals

Net carrying amount of goodwill as of December 31, 2020

7,879

Impairment charges

Other changes 1

Growth rate (in %)2, 3

Cost of capital (in %) 2, 3

Other non-current assets 4

Impairment

Reversals

19,271

2,218

2,742

720

379

6,059

727

1,860

168

2,802

1,111

3,839

55,774

1,234

2,625

64,583

–

n.a.

-12

–

-153

-20

-60

-13

-8

-101

-11

–

-9

-19

-57

-212

-12

-3

-283

–

tion

493

140

-1

-9

240

379

804

-100

760

–

-139

–

510

199

789

102

260

–

415

100

2,117

134

1,381

3,749

6,718

–

0.5

4.7

-53

–

-10

-132

-57

-15

-214

-43

-14

–

-7

-36

-100

-17

-22

-625

-56

-7

-727

1,926

-103

1,823

–

-112

–

115

152

-222

–

-11

–

-11

129

1,191

-1,465

Nether-

lands/

Belgium

–

-59

–

Dec. 31,

2020

19,611

2,286

3,211

888

334

6,719

779

2,102

178

3,106

1,152

3,980

58,485

1,483

2,569

Other

808

-311

-20

477

–

-5

2Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.

3Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.

4Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.

Dec. 31,
2020

-1,784

-945

Dec. 31,
2020

17,827

1,341

-1,328

1,883

-573

-18

-2,864

-204

-274

-2

-6

-77

-563

-58

-1,817

-28,034

-783

-54

315

316

3,855

575

1,828

101

2,543

1,094

2,163

30,451

700

2,515

-30,746

36,923

E.ON Group

17,481

565

–

-219

17,827

–

-404

162

Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment 1

Acquisition and production costs

Accumulated depreciation

Net carrying

amounts

€ in millions

Goodwill

Customer relationships and similar items

Concessions, commercial property rights, licenses, and
similar rights

Development expenditures

Advance payments

Intangible assets

Land and buildings

Networks

Storage, e-charging and production capacities

Technical equipment and machine

Fleet, office and business equipment

Right-of-use assets 2

Real estate and leasehold rights

Buildings

Technical equipment, plant and machinery

Other equipment, fixtures, furniture and office equipment

Advance payments and construction in progress

Property, plant and equipment 3

Exchange
rate
differences

Jan. 1, 2019

3,847

541

2,303

396

370

3,610

361

387

105

870

539

2,780

40,197

835

1,921

46,272

-16

–

-1

–

-76

-8

-83

1Adjusted prior-year figures.
2New account due to IFRS 16 (see Note 33).
3The first-time application of IFRS 16 resulted in adjustments to the initial inventories.

Additions

Disposals

Transfers

Changes in
scope of
consolida-
tion

15,325

1,750

–

446

1,204

–

2,202

282

1,330

–

1,669

579

983

13,829

295

875

16,561

218

1,489

154

–

286

1,727

116

1,141

3,092

Dec. 31,
2019

19,271

2,218

2,742

720

379

6,059

727

1,860

168

2,802

1,111

3,839

55,774

1,234

2,625

64,583

Exchange

rate

Changes in

scope of

consolida-

Jan. 1, 2019

differences

tion

Additions

Disposals

Transfers

Impairment

Reversals

-1,793

-445

-818

-185

-1,448

–

-58

-1,710

-26,119

-597

-42

-28,526

-5

-3

-1

–

-1

-2

–

-2

–

-8

–

-6

402

-2

–

438

–

-93

-151

-119

–

-363

-78

-60

-1

-2

-45

-186

–

-102

-1,405

-99

–

-1,606

–

-1

-44

-2

-13

-2

-3

–

-1

-6

–

589

-6

612

–

-128

-14

-10

-71

-223

-20

–

-3

-23

-2

-1

-55

-10

-16

-84

–

-47

-816

-14

-7

-884

-14

-3

–

-6

-26

-32

-57

-325

-38

-30

-482

–

-39

-379

259

-213

-372

-8

–

-4

422

-1,274

-777

Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2019 1

Energy Networks

Customer Solutions

Non-Core Business

€ in millions

Germany

Sweden

ECE/Turkey

Germany

Net carrying amount of goodwill as of January 1, 2019

Changes resulting from acquisitions and disposals

Impairment charges

Other changes 2

608

7,271

–

Net carrying amount of goodwill as of December 31, 2019

7,879

Growth rate (in %)3, 4

Cost of capital (in %) 3, 4

Other non-current assets 5

Impairment

Reversals

n.a.

-39

–

-2

–

311

–

183

6,535

–

878

960

–

371

6,718

1,926

–

-2

–

0.5

5.9

-236

PreussenElektra

Generation Turkey

Corporate Functions/Other

E.ON Group

Nether-
lands/
Belgium

–

Other

705

–

-272

493

–

-11

–

106

–

210

–

274

–

Dec. 31,

2019

-1,790

-625

-866

-357

-73

-1,921

-100

-71

-2

-3

-44

-220

-54

-1,727

-26,324

-680

-48

–

-28,833

35,750

Dec. 31,

2019

17,481

1,593

1,876

363

306

4,138

627

1,789

124

2,582

1,057

2,112

29,450

554

2,577

2,054

15,609

-182

17,481

–

-330

179

-179

–

-42

–

1Adjusted prior-year figures.
2Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal groups.
3Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.
4Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.
5Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.

Notes

Goodwill, Intangible Assets, Right-of-use Assets and Property, Plant and Equipment 1

Exchange

rate

Changes in

scope of

consolida-

Acquisition and production costs

Jan. 1, 2019

differences

tion

Additions

Disposals

Transfers

Jan. 1, 2019

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

163

Accumulated depreciation

Net carrying
amounts

Exchange
rate
differences

Changes in
scope of
consolida-
tion

Additions

Disposals

Transfers

Impairment

Reversals

-1,793

-445

-818

-185

–

-1,448

–

-58

-1,710

-26,119

-597

-42

-28,526

-5

-3

-1

–

-1

-2

–

-2

–

-8

–

-6

402

-2

–

438

–

-93

-151

-119

–

-363

-78

-60

-1

-2

-45

-186

–

-102

-1,405

-99

–

-1,606

–

106

–

210

–

274

–

-1

-44

-2

-13

-2

-3

–

-1

-6

–

589

-6

612

–

-128

-14

-10

-71

-223

-20

–

-3

-23

-2

-1

-55

-10

-16

-84

–

Dec. 31,
2019

-1,790

-625

-866

-357

-73

-1,921

-100

-71

-2

-3

-44

-220

-54

-1,727

-26,324

-680

-48

Dec. 31,
2019

17,481

1,593

1,876

363

306

4,138

627

1,789

124

2,582

1,057

2,112

29,450

554

2,577

-28,833

35,750

Changes in Goodwill and in Other Reversals and Impairment Charges by Segment from January 1, 2019 1

Energy Networks

Customer Solutions

Non-Core Business

€ in millions

Germany

Sweden

ECE/Turkey

Germany

PreussenElektra

Generation Turkey

Corporate Functions/Other

E.ON Group

–

179

-179

–

-42

–

2,054

15,609

–

-182

17,481

–

-330

Customer relationships and similar items

Concessions, commercial property rights, licenses, and

446

1,204

€ in millions

Goodwill

similar rights

Development expenditures

Advance payments

Intangible assets

Land and buildings

Networks

Storage, e-charging and production capacities

Technical equipment and machine

Fleet, office and business equipment

Right-of-use assets 2

Real estate and leasehold rights

Buildings

Technical equipment, plant and machinery

Other equipment, fixtures, furniture and office equipment

Advance payments and construction in progress

Property, plant and equipment 3

1Adjusted prior-year figures.

2New account due to IFRS 16 (see Note 33).

3The first-time application of IFRS 16 resulted in adjustments to the initial inventories.

3,847

541

2,303

396

370

3,610

361

387

105

870

539

2,780

40,197

835

1,921

46,272

608

7,271

–

n.a.

-39

–

-16

–

-76

-1

–

-8

-83

-2

–

15,325

1,750

–

2,202

282

1,330

1,669

–

579

983

295

875

13,829

16,561

–

218

1,489

154

–

286

1,727

116

1,141

3,092

–

-2

–

-47

-816

-14

-7

-884

-14

-3

–

-6

-26

-32

-57

-325

-38

-30

-482

878

960

–

0.5

5.9

-236

–

-39

-379

259

-213

-372

-8

–

-4

422

-1,274

-777

Nether-

lands/

Belgium

–

Dec. 31,

2019

19,271

2,218

2,742

720

379

6,059

727

1,860

168

2,802

1,111

3,839

55,774

1,234

2,625

64,583

Other

705

-272

493

–

-11

–

Net carrying amount of goodwill as of January 1, 2019

Changes resulting from acquisitions and disposals

311

183

6,535

Net carrying amount of goodwill as of December 31, 2019

7,879

371

6,718

1,926

Impairment charges

Other changes 2

Growth rate (in %)3, 4

Cost of capital (in %) 3, 4

Other non-current assets 5

Impairment

Reversals

1Adjusted prior-year figures.

2Other changes include effects from intragroup restructuring, transfers, exchange rate differences and reclassifications to assets held for sale. This item also includes impairments on goodwill from disposal groups.

3Presented here are the growth rates and cost of capital for selected cash-generating units whose respective goodwill is material when compared with the carrying amount of all goodwill.

4Energy Networks Germany was valued on the basis of the regulatory asset base, taking into account the upcoming regulatory period for gas in 2018 and for electricity in 2019.

5Other non-current assets consist of intangible assets, right-of-use assets and of property, plant and equipment.

164

Goodwill and Non-current Assets

The changes in goodwill within the segments, as well as the
allocation of impairments and their reversals to each reportable
segment, are presented in the tables on pages 160 through 163.

Impairments
IFRS 3 prohibits the amortization of goodwill. Instead, goodwill
is tested for impairment at least annually at the level of the cash-
generating units. Goodwill must also be tested for impairment
at the level of individual cash-generating units as necessary
between these annual tests if events or changes in circumstances
indicate that the recoverable amount of a par ticular cash-gen-
erating unit might be impaired. Intangible assets subject to
amortization and property, plant and equipment and investments
subject to the application of the equity method (IAS 28) must
generally be tested for impairment whenever there are particular
events or external circumstances indicating the possibility of
impairment.

To perform the impairment tests, the Company first determines
the fair values less costs to sell of its cash-generating units.
Because there were no binding sales transactions or market prices
for the respective cash-generating units in 2020, fair values were
calculated based on discounted cash flow methods.

Valuations are based on the medium-term corporate planning
authorized by the Management Board. The calculations for impair-
ment-testing purposes are generally based on the three planning
years of the medium-term plan plus two additional detailed
planning years. In certain justified exceptional cases, a longer
detailed planning period is used as the calculation basis. The cash
flow assumptions extending beyond the detailed planning period
are determined using sustainable, currency-specific growth
rates based on the analysis of past years and predictions for the
future. In 2020, the sustainable, currency-specific inflation rate
used for the euro area was 0.5 percent (2019: 0.5 percent) unless
a lower growth rate was justified for that cash-generating unit.
The interest rates after taxes used for discounting cash flows
in the annual impairment test are calculated using market data
for each cash-generating unit, and as of December 31, 2020,
ranged between 3.0 and 7.2 percent after taxes (2019: 3.3 and
7.1 percent).

The principal assumptions underlying the determination by
management of recoverable amount are the respective forecasts
for commodity market prices, future electricity and gas prices
in the wholesale and retail markets, E.ON’s investment activity,
changes in the regulatory framework, as well as for rates of

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

165

growth and the cost of capital. These assumptions are based on
external market data from established providers and on internal
estimates. They also appropriately take into account climate-
related impacts on market conditions and macroeconomic link-
ages. For example, impacts of climate targets on CO2 prices and
changing weather conditions (temperature, wind, etc.) are included.

The above discussion applies accordingly to the testing for
impairment of intangible assets and of property, plant and equip-
ment and investments subject to the application of the equity
method (IAS 28), and of groups of these assets. If the goodwill
of a cash-generating unit is combined with assets or groups of
assets for impairment testing, the assets must be tested first.

As in 2019, the goodwill impairment testing performed in 2020
resulted in the recognition of no impairment charges under
IAS 36. However, an impairment loss was recognized on the
portion of goodwill of the Hungarian operations classified as
held for sale under IFRS 5. This required impairment amounted
to approximately €73 million. It is due to the fact that the
expected sales price is below the carrying amount.

The tested goodwill of all cash-generating units whose respec-
tive goodwill as of the balance sheet date is material in relation
to the total carrying amount of all goodwill shows a surplus of

recoverable amounts over the respective carrying amounts and,
therefore, based on current assessment of the economic situa-
tion, only a significant change in the material valuation parame-
ters would necessitate the recognition of goodwill impairment.

Impairments of property, plant and equipment in 2020 totaled
around €171 million, of which around €138 million were in
the Hungarian network business, which is classified as held for
sale under IFRS 5. These impairments became necessary because
the expected disposal price does not fully reflect the carrying
amount. Accordingly, the non-current assets of the unit were
reduced on a pro rata basis in line with their relative carrying
amounts. Around €13 million in impairment losses were recog-
nized in the German Customer Solutions segment on a cash-
generating unit in the B2B heating business. This also affected
technical equipment and machinery due to impairment losses
recognized in line with their carrying amounts since the outlook
has deteriorated. In the German network business, an impair-
ment loss of around €11 million was recognized on property,
plant and equipment. This was largely due to fully impaired
project costs for smart meters, which were capitalized as assets
under construction but later no longer priced in due to the late
market declaration.

166

Approximately €231 million of impairments were recognized
on intangible assets in fiscal year 2020. Of this amount, around
€106 million relates to the Customer Solutions UK segment, in
particular to billing software which will no longer be used in the
future. Impairment losses of around €58 million were recognized
on Essent’s Belgian sales business, which will be sold to the
Belgian energy company Luminus. Following the signing at the
beginning of 2021, the transaction is still subject to approval
by the European Commission. In this context, non-current assets
were reduced on a pro rata basis, resulting in an impairment
being recognized for the carrying amount of customer lists in
particular. In the Customer Solutions Germany segment, impair-
ment losses of around €38 million were recognized, mainly
(€25 million) due to the aforementioned impairment loss on a
cash-generating unit in the Energy Solutions business and the
associated impairment of customer lists. In addition, impairment
losses totaling €24 million were recognized on IT licenses at
Corporate Headquarters. The two largest individual items related
to fully amortized licenses amounting to just under €10 million
and capitalized project costs of around €12 million in connection
with software rollouts (the carrying amounts of the underlying
licenses themselves remained unchanged).

In fiscal year 2020, a total of €2 million in impairments was
charged to right-of-use assets.

Reversals of impairments on property, plant and equipment
recognized in previous years amounted to around €6 million in
2020, significantly influenced by an increase in the value of
assets in the Hungarian network sector due to updated valua-
tion assumptions.

Impairments of property, plant and equipment in 2019 totaled
around €84 million, of which around €38 million were in the
German network business, primarily in connection with the
decommissioning of a gas storage facility, and €38 million at
innogy, primarily due to the optimization and restructuring
of the joint UK business of innogy and E.ON. In this connection,
an impairment loss was recognized for several innogy buildings
in the UK.

In 2019, approximately €223 million of impairments were rec-
ognized on intangible assets. The largest effect in terms of
amount (€159 million) arose at innogy, again mainly from busi-
ness in the UK for the reasons outlined above. Impairments
were recognized in particular for IT infrastructure in the private
customer segment. Wind farms in the UK were also impacted,
with around €55 million. Impairments were recognized primarily
on IT projects that are currently being discontinued because of
a management decision, with the result that they are no longer
expected to generate any economic advantages.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

167

In fiscal year 2019, a total of €23 million in impairments was
charged to right-of-use assets. About €19 million again resulted
from the restructuring at innogy in the UK.

Reversals of impairments on property, plant and equipment and
intangible assets recognized in previous years amounted to
€3 million in 2019, significantly influenced by the positive out-
come of litigation in the UK.

Intangible Assets

Most of the changes presented below are attributable to the
fact that the innogy activities were only included on a pro rata
basis in the 2019 fiscal year (from September 18, 2019, the
date on which control was achieved), while in 2020 they will be
included for a full twelve months.

Right-of-use Assets

In 2020, the Company recorded an amortization expense of
€374 million (2019: €186 million). The majority of the changes
are attributable to the fact that the innogy activities were only
included on a pro rata basis in the 2019 fiscal year (from
September 18, 2019, the date on which control was achieved),
while in 2020 they will be included for a full twelve months.
Impairments on right-of-use assets amounted to €2 million
(2019: €23 million).

Property, Plant and Equipment

Borrowing costs in the amount of €26 million were capitalized
in 2020 (2019: €13 million) as part of the historical cost of
property, plant and equipment.

In 2020, the Company recorded an amortization expense of
€931 million (2019: €363 million). Impairment charges on
intangible assets amounted to €231 million (2019: €223 million).

Depreciation amounted to €2,381 million in 2020 (2019:
€1,606 million).

As in the prior year, no reversals of impairments on intangible
assets were recognized in the reporting year.

The closing balance of intangible assets not subject to amorti-
zation as of December 31, 2020, amounted to €301 million
(2019: €299 million).

€62 million in research and development costs as defined by
IAS 38 were expensed in 2020 (2019: €68 million).

In addition, write-downs on property, plant and equipment in the
amount of €171 million (2019: €84 million) were made in the
year under review. Reversals of impairments on property, plant
and equipment in the amount of €6 million (2019: €3 million)
were recognized in the reporting year. Differences in the length
of time innogy’s activities were included were once again the
main reason for the significant increase in the figures presented.

168

(16) Companies Accounted for under the Equity
Method and Other Financial Assets

The following table shows the structure of the companies
accounted for under the equity method and the other financial
assets as of the dates indicated:

Companies Accounted for under the Equity Method and Other Financial Assets

€ in millions

E.ON Group

Associates 1

Companies accounted for under the equity method

Equity investments

Non-current securities

Total

4,383

1,883

1,887

8,153

2,651

698

–

3,349

Joint
ventures 1

1,732

181

–

1,913

E.ON Group

Associates 1

5,232

1,730

2,353

9,315

3,280

556

–

3,836

Joint
ventures 1

1,952

155

–

2,107

December 31, 2020

December 31, 2019

1The associates and joint ventures presented as equity investments are associated companies and joint ventures accounted for at cost on materiality grounds.

Companies accounted for under the equity method consist
solely of associates and joint ventures.

Shares in Companies Accounted for under the
Equity Method

The €849 million decrease in the carrying amounts of companies
measured at equity compared with December 31, 2019, was
mainly due to the reclassification of the shares in Rampion
Renewables Ltd. to assets held for sale and negative exchange
rate effects in Turkey.

The amount shown for non-current securities relates primarily
to fixed-income securities.

In 2020, impairment charges on companies accounted for under
the equity method totaled €27 million (2019: €3 million).

The carrying amounts of the immaterial associates accounted
for under the equity method totaled €1,575 million (2019:
€1,905 million), and those of the joint ventures totaled
€946 million (2019: €896 million).

Investment income generated from companies accounted for
under the equity method amounted to €428 million in 2020
(2019: €330 million). Higher distributions, in particular due to
the first-time inclusion of the innogy companies for a full year,
were partially offset by the absence of the Nord Stream AG
distribution.

Impairments on other financial assets amounted to €92 million
(2019: €15 million). The carrying amount of other financial
assets with impairment losses was €13 million as of the end of
the fiscal year (2019: €22 million).

The following table summarizes significant line items of the aggre-
gated statements of comprehensive income of the associates and
joint ventures that are accounted for under the equity method:

Summarized Financial Information for Individually Non-material Associates and Joint Ventures Accounted for
under the Equity Method

€ in millions

Proportional share of net income from continuing operations

Proportional share of other comprehensive income

Proportional share of total comprehensive income

Associates

Joint ventures

2020

2019

2020

2019

126

-3

123

–

169

-6

163

113

114

2020

295

-9

286

Total

2019

201

202

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

169

The Group adjustments shown in the tables mainly relate to
goodwill determined as part of initial recognition, temporary
differences, changes in ownership interests, exchange-rate
effects and effects from the elimination of intragroup profits.

The tables below show significant line items of the aggregated
balance sheets and of the aggregated statements of comprehen-
sive income of the material companies accounted for under the
equity method. The material associates in the E.ON Group are
RheinEnergie AG, Dortmunder Energie- und Wasserversorgung
GmbH, GASAG Berliner Gaswerke AG and, until the end of
December 2020, Rampion Renewables Limited, which was
reclassified as assets held for sale due to the decision to sell it
to RWE.

Material Associates—Balance Sheet Data as of December 31

€ in millions

Non-current assets 1

Current assets

Current liabilities (including provisions)

Non-current liabilities (including provisions)

Equity

Non controlling interests

Ownership interest (in %)

Proportional share of equity

Consolidation adjustments

Carrying amount of equity investment

RheinEnergie AG

Rampion
Renewables Ltd. 2

Dortmunder Energie- und
Wasserversorgung GmbH

GASAG Berliner
Gaswerke AG

2020

3,369

453

524

1,437

1,861

–

2019

3,419

577

563

1,410

2,023

–

2020

–

2019

672

–

703

–

2020

1,438

143

134

1,041

406

–

2019

1,364

154

126

970

422

–

2020

1,940

319

491

1,094

674

2019

1,882

230

542

897

674

20.00

39.93

39.90

36.85

372

166

539

405

166

571

–

281

181

462

162

217

168

226

248

321

248

342

1Undisclosed accruals/provisions from acquisitions are recognized in assets.
2As of December 31, 2020, the investment is reported as an asset held for sale.

Material Associates—Earnings Data

€ in millions

Sales

Net income/loss from continuing operations

Non-controlling interests in the net income/
loss from continuing operations

Net income from discontinued operations

Dividend paid out

Other comprehensive income

Total comprehensive income

Ownership interest (in %)

Proportional share of total comprehensive
income after taxes

Proportional share of net income after taxes

Consolidation adjustments

Equity-method earnings

RheinEnergie AG

Rampion
Renewables Ltd.

Dortmunder Energie- und
Wasserversorgung GmbH

GASAG Berliner
Gaswerke AG

2020

2,479

-10

–

148

-7

-17

2019

694

–

2020

2019

–

-61

-24

–

-18

–

2020

885

–

-17

-3

2019

239

2020

1,209

–

2019

1,253

–

-56

-25

20.00

39.93

39.93 1

39.90

36.85

-3

-2

-4

-6

–

-10

–

-7

-1

–

-9

–

1Rampion Renewables Ltd. holds 50.1 percent on Rampion Offshore Wind Ltd.

170

Enerjisa Enerji A.Ş.

Enerjisa Üretim Santralleri A.Ş.

2020

1,977

752

909

1,013

301

815

807

40.00

323

331

2019

2,678

865

1,097

1,381

560

850

1,065

40.00

426

438

2020

1,359

368

339

537

174

187

525

851

50.00

426

455

2019

1,980

299

467

656

146

319

604

1,156

50.00

578

618

Enerjisa Enerji A.Ş.

Enerjisa Üretim Santralleri A.Ş.

2020

2,387

108

-59

-127

-36

-296

-188

40.00

-75

2019

2,910

143

-67

-250

-54

-113

40.00

2020

1,025

-115

-29

-5

–

-372

-327

50.00

-164

2019

981

137

-106

-51

-16

–

-170

-33

50.00

-16

Presented in the tables below are significant line items of the
aggregated balance sheets and of the aggregated income state-
ments of the joint ventures accounted for under the equity
method, Enerjisa Enerji A.Ş. and Enerjisa Üretim Santralleri A.Ş.

Material Joint Ventures—Balance Sheet Data as of December 31

€ in millions

Non-current assets

Current assets

Current liabilities (including provisions)

Non-current liabilities (including provisions)

Cash and cash equivalents

Current financial liabilities

Non-current financial liabilities

Equity

Ownership interest (in %)

Proportional share of equity

Consolidation adjustments

Carrying amount of equity investment

Material Joint Ventures—Earnings Data

€ in millions

Sales

Net income/loss from continuing operations

Write-downs

Interest income/expense

Income taxes

Dividend paid out

Other comprehensive income

Total comprehensive income

Ownership interest (in %)

Proportional share of total comprehensive income after taxes

Proportional share of net income after taxes

Consolidation adjustments

Equity-method earnings

The material associates and the material joint ventures are active
in diverse areas of the gas and electricity industries. Disclosures
of company names, registered offices and equity interests
as required by IFRS 12 for material joint arrangements and
associates can be found in the list of shareholdings pursuant
to Section 313 (2) HGB (see Note 38).

As of December 31, 2020, the investment in Enerjisa Enerji A.Ş. is
marketable. The pro rata market value amounted to €649 million
as of December 31, 2020 (2019: €522 million). The carrying
amount is €326 million as of December 31, 2020.

Of investments in associates, the shareholdings in companies
with a carrying amount of €137 million (2019: €573 million)
are restricted because it was pledged as collateral for financing
as of the balance sheet date.

There are no further material restrictions apart from those
contained in standard legal and contractual provisions.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

171

The cost of raw materials, finished products and goods purchased
for resale is determined based on the average cost method.

Write-downs totaled €37 million in 2020 (2019: €5 million).
Reversals of write-downs amounted to €12 million in 2020
(2019: €17 million).

The change in inventories compared to December 31, 2019,
is primarily due to the decrease in raw materials and supplies.

No inventories have been pledged as collateral.

December 31, 2020

December 31, 2019

Current

Non-current

Current

Non-current

401

445

7,714

955

2,763

11,525

11,970

245

377

622

–

2,322

350

567

3,244

3,866

440

490

8,364

907

4,906

14,207

14,697

320

379

699

–

2,378

372

834

3,592

4,291

(17) Inventories

The following table provides a breakdown of inventories as of
the dates indicated:

Inventories

€ in millions

Raw materials and supplies

Goods purchased for resale

Work in progress and finished products

December 31,

2020

594

140

397

2019

670

199

383

Total

1,131

1,252

(18) Receivables and Other Assets

The following table lists receivables and other assets by
remaining time to maturity as of the dates indicated:

Receivables and Other Assets 1

€ in millions

Receivables from finance leases 2

Other financial receivables and financial assets

Financial receivables and other financial assets

Trade receivables

Receivables from derivative financial instruments

Contract assets

Other assets

Other operating assets

Trade receivables and other operating assets

Total

1Adjusted prior-year figures.
2See also Note 33.

Receivables within the scope of IFRS 15 primarily consist of
trade receivables. Impairments on receivables within the scope
of IFRS 15 totaled €0.3 billion in 2020 (2019: €0.3 billion).

As of December 31, 2020, other financial assets include
receivables from other owners of jointly owned power plants
of €69 million (2019: €74 million).

The decrease in other operating assets compared with Decem-
ber 31, 2019, is due in particular to the payment of an existing
purchase price receivable from E.ON Pension Trust e. V. in the
course of the sale of the shares in PEG Infrastruktur AG and its
stake in Nord Stream AG. In addition, netting of the purchase

172

price to be paid in connection with the acquisition of shares in
VSEH against a receivable from RWE led to a reduction in other
operating receivables (see Note 5).

The following table shows the opening and closing balances of
contractual assets within the meaning of IFRS 15:

Contract Assets

€ in millions

Balance as of January 1

Balance as of December 31

2020

2019

In addition, the E.ON Group had no contingent assets as of
December 31, 2020, as in the prior year.

In 2020, there was €40 million in restricted cash (2019:
€49 million) with a maturity greater than three months.

Cash and cash equivalents include €2,667 million (2019:
€1,880 million) in checks, cash on hand and balances at financial
institutions with an original maturity of less than three months,
to the extent that they are not restricted.

Other assets under IFRS 15 changed as follows:

Other Assets

€ in millions

Amortization and impairment

Balance as of December 31

(19) Liquid Funds

2020

417

2019

176

386

The following table provides a breakdown of liquid funds by
original maturity as of the dates indicated:

Liquid Funds

€ in millions

Securities and fixed-term deposits

Current securities with an original
maturity greater than 3 months

Restricted cash and cash equivalents

Cash and cash equivalents

Total

December 31,

2019

1,197

511

1,894

3,602

2020

1,111

1,016

2,668

4,795

(20) Capital Stock

The capital stock is subdivided into 2,641,318,800 registered
shares with no par value (no-par-value shares) and amounts to
€2,641,318,800 (2019: €2,641,318,800). The capital stock of
the Company was provided by way of conversion of E.ON AG

into a European Company (SE), through a capital increase carried
out on March 20, 2017, partially using the Authorized Capital
2012, which expired on May 2, 2017, and through a capital
increase registered in the commercial register of the Company
on September 19, 2019, with majority use of the Authorized
Capital 2017.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

173

Subject to the Supervisory Board’s approval, the Management
Board is authorized to exclude shareholders’ subscription rights.

Conditional Capital

At the Annual Shareholders Meeting of May 28, 2020, share-
holders approved a conditional increase of the capital stock
(with the option to exclude shareholders’ subscription rights) in
the amount of up to €264 million (Conditional Capital 2020).
The Conditional Capital 2017 (of up to €175 million) resolved
by the Annual Shareholders Meeting on May 10, 2017, under
what was then agenda item 9, was revoked upon registration of
the resolution on June 17, 2020.

The conditional capital increase will be used to grant registered
no-par-value shares to the holders of convertible bonds or bonds
with warrants, profit participation rights or income bonds (or
combinations of these instruments), in each case with option
rights, conversion rights, option obligations and/or conversion
obligations, which are issued by the Company or a Group com-
pany of the Company as defined by Section 18 of the German
Stock Corporation Act (AktG), under the authorization approved
by the Annual Shareholders Meeting on May 28, 2020, under
agenda item 9, through May 27, 2025. The new shares will be
issued at the conversion or option price to be determined in
accordance with the authorization resolution.

The conditional capital increase will be implemented only to the
extent required to fulfill the obligations arising on the exercise
by holders of option or conversion rights, and those arising from
compliance with the mandatory conversion of bonds with con-
version or option rights, profit participation rights or profit par-
ticipating bonds that have been issued or guaranteed by E.ON SE
or a Group company of E.ON SE as defined by Section 18 AktG
under the authorization approved by the Annual Shareholders
Meeting of May 28, 2020, under agenda item 9, and to the
extent that no cash settlement has been granted in lieu of con-
version or exercise of an option or the Company exercises its
right to grant shares in the Company in whole or in part in lieu
of payment of the cash amount due.

The Conditional Capital 2020 was not used.

Pursuant to a resolution by the Annual Shareholders Meeting
of May 28, 2020, the Management Board is authorized to pur-
chase own shares until May 27, 2025. The shares purchased,
combined with other treasury shares in the possession of the
Company, or attributable to the Company pursuant to Sections
71a et seq. AktG, may at no time exceed 10 percent of its capi-
tal stock. The Management Board was authorized at the afore-
mentioned Annual Shareholders Meeting to cancel any shares
thus acquired without requiring a separate shareholder resolu-
tion for the cancellation or its implementation. The authorization
granted by the Annual Shareholders Meeting on May 10, 2017,
under agenda item 10, to acquire and use own shares is revoked.
The total number of outstanding shares as of December 31, 2020,
was 2,607,369,233 (December 31, 2019: 2,607,369,233).
As of December 31, 2020, E.ON SE held a total of 33,949,567
treasury shares (December 31, 2019: 33,949,567) having a
book value of €1,126 million (equivalent to approximately
1.29 percent or €33,949,567 of the capital stock).

The Company has further been authorized by the Annual Share-
holders Meeting of May 28, 2020, to buy shares using deriva-
tives (put or call options, or a combination of both). When deriv-
atives in the form of put or call options, or a combination of
both, are used to acquire shares, the option transactions must be
conducted with a financial institution or a company operating in
accordance with Section 53 (1) sentence 1 or Section 53b (1)
sentence 1 or (7) of the German Banking Act (KWG) or at market
terms on the stock exchange. No shares were acquired in 2019
using this purchase model.

Neither a scrip dividend nor an employee stock purchase
program was offered in the 2020 fiscal year.

Authorized Capital

By shareholder resolution adopted at the Annual Shareholders
Meeting of May 28, 2020, the Management Board was autho-
rized, subject to the Supervisory Board’s approval, to increase
until May 27, 2025, the Company’s capital stock by a total of up
to €528,000,000 through one or more issuances of new regis-
tered no-par-value shares against contributions in cash and/or
in kind (authorized capital pursuant to Sections 202 et seq. AktG,
Authorized Capital 2020). The authorization of the Management
Board contained in Article 3 (5) of the Articles of Association to
increase the share capital by up to €19,780,200.00 in the period
up to May 9, 2022, with the approval of the Supervisory Board
(Authorized Capital 2017), is revoked.

174

Voting Rights

The following notices pursuant to Section 33 (1) of the German
Securities Trading Act (“WpHG”) concerning changes in voting
rights have been received:

Information on Stockholders of E.ON SE

Reporting entity

Date of notice

Threshold

Achieved, over
or under
threshold

Gained voting
rights on

Voting rights

Allocation

Percentages

Absolute

DWS Investment GmbH,
Frankfurt am Main, Germany

Jan. 15, 2021

BlackRock Inc., Wilmington, USA

Jan. 8, 2021 2

Over

Jan. 12, 2021

Under

Jan. 5, 2021

indirect

3.02

79,741,442 1

4.92

130,004,535 3

RWE Aktiengesellschaft, Essen,
Germany4

The Capital Group Companies
Inc., Los Angeles, USA 5

Canada Pension Plan Investment
Board, Toronto, Canada

Capital Income Builder,
Wilmington, USA

Dec. 10, 2020

15%

Achieved

Dec. 8, 2020

indirect

15.00

396,197,820

Mar. 11, 2021

Jun. 9, 2020

Apr. 3, 2020

Under

Mar. 8, 2021

indirect

4.82

127,283,218

Over

Jun. 5, 2020

direct/indirect

5.02

132,657,936 6

Under

Apr. 1, 2020

direct

4.90

129,538,084

1Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 2 WpHG.
2Voluntary Group notification with threshold impact only at subsidiary level; under 5% threshold per notification of January 7, 2021, with threshold impact on January 4, 2021.
3Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 1 and 2 WpHG.
4Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH.
5Name of shareholder holding 3.0 percent or more of the voting rights as indicated in the voting rights notification received: Capital Income Builder.
6Includes voting rights pursuant to Secs. 33, 34 and instruments pursuant to Sec. 38 (1) No. 2 WpHG.

(21) Additional Paid-in Capital

Additional paid-in capital was unchanged in the fiscal year and
amounts to €13,368 million, unchanged from December 31,
2019.

(22) Retained Earnings

The following table breaks down the E.ON Group’s retained
earnings as of the dates indicated:

Retained Earnings 1

€ in millions

Legal reserves

Other retained earnings

Total

1Adjusted prior-year figures.

December 31,

2020

-5,302

-5,257

2019

-1,972

-1,927

Under German securities law, E.ON SE shareholders may receive
distributions from the balance sheet profit of E.ON SE reported
as available for distribution in accordance with the German
Commercial Code.

As of December 31, 2020, these German-GAAP retained earnings
totaled €2,254 million (2019: €2,254 million). Of this amount,
legal reserves of €45 million (2019: €45 million) are restricted
pursuant to Section 150 (3) and (4) AktG.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

175

The amount of retained earnings available for distribution is
€2,064 million (2019: €2,086 million).

A proposal to distribute a cash dividend for 2020 of €0.47 per
share will be submitted to the Annual Shareholders Meeting. For
2019, shareholders at the May 28, 2020, Annual Shareholders
Meeting voted to distribute a dividend of €0.46 for each dividend-
paying ordinary share. Based on a €0.47 dividend, the total profit
distribution is €1,225 million (2019: €1,199 million).

As of December 31, 2020, these IFRS retained earnings totaled
-€5,257 million (2019: -€1,927 million). Of the decrease,
€2,405 million (2019: +€133 million) is primarily attributable
to equity transactions with non-controlling interests. The dif-
ference between the consideration and the carrying amount of
the non-controlling interests in such transactions is recognized
directly in retained earnings. In the past fiscal year, -€2,375 mil-
lion of this relates to the share increase as part of the innogy
squeeze-out and subsequent purchase price adjustments for a
share addition in Hungary (-€35 million, 2019: -€255 million).

(23) Changes in Other Comprehensive Income

The change in other comprehensive income is primarily the
result of exchange rate differences recognized on the balance
sheet.

The table at right illustrates the share of OCI attributable to
companies accounted for under the equity method.

Share of OCI Attributable to Companies
Accounted for under the Equity Method

€ in millions

Balance as of December 31 (before taxes)

Taxes

2020

-1,921

–

2019

-1,552

-1

Balance as of December 31 (after taxes)

-1,921

-1,553

(24) Non-controlling Interests

Non-controlling interests by segment as of the dates indicated
are shown in the following table:

Non-controlling Interests 1

€ in millions

Energy Networks
Germany
Sweden
ECE/Turkey

Customer Solutions

Germany
UK
Netherlands/Belgium
Other

Non-Core Business

Corporate Functions/Other

E.ON Group

1Adjusted prior-year figures.

December 31,

2019

4,137
3,727
–
410

-416
116
-109
-399
-24

-57

485

2020

3,600
3,052
–
548

280
175
2
2
101

-34

284

4,130

4,149

176

The table below illustrates the share of OCI that is attributable
to non-controlling interests:

Share of OCI Attributable to Non-controlling Interests

€ in millions

Balance as of January 1, 2019

Changes

Balance as of December 31, 2019

Changes

Balance as of December 31, 2020

Cash flow hedges

Available-for-sale
securities

Currency translation
adjustments

Remeasurements of
defined benefit plans

–

-1

–

-129

-82

-8

-90

-249

-221

-179

-400

In compliance with IFRS 12, the following tables include sub-
sidiaries with significant non-controlling interests and provide an
overview of significant items on the aggregated balance sheet
and on the aggregated income statement, and significant cash

flow items. The list of shareholdings pursuant to Section 313 (2)
HGB (see Note 38) contains information on the registered office
of the company and disclosures on equity interests.

Subsidiaries with Material Non-controlling Interests—Balance Sheet Data as of December 31

Schleswig-Holstein
Netz AG

Delgaz Grid S.A.

E.DIS AG 1

Avacon AG 1

€ in millions

2020

2019

2020

2019

Non-controlling interests in equity

Non-controlling interests in equity (in %)

Dividends paid out to non-controlling interests

Operating cash flow

Non-current assets

Current assets

Non-current liabilities

Current liabilities

1Holding Companies without operational business.

306

52.1

–

357

282

50.5

–

205

317

43.5

–

111

313

43.5

–

105

1,694

1,583

1,133

1,081

150

731

451

313

503

739

479

116

433

120

2020

531

1,609

142

2019

523

2020

2019

541

38.5

-44

562

38.5

-63

1,622

1,768

1,649

103

290

Subsidiaries with Material Non-controlling Interests—Earnings Data

€ in millions

2020

2019

2020

2019

2020

2019

2020

2019

Schleswig-Holstein
Netz AG

Delgaz Grid S.A.

E.DIS AG 1

Avacon AG 1

Share of earnings attributable to
non-controlling interests

Sales

Net income/loss

Comprehensive income

1Holding Companies without operational business.

933

886

403

379

113

112

110

109

107

105

148

149

There are no major restrictions beyond those under customary
corporate or contractual provisions.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

177

December 31,

2020

2019

24,164

6,187

22,483

6,222

30,415

28,754

16,179

6,233

15,471

6,154

22,421

21,634

7,985

7,012

-46

7,994
-94
8,088

7,120
-81
7,201

The features and risks of defined benefit plans are shaped by
the general legal, tax and regulatory conditions prevailing in
the respective country. The configurations of the major defined
benefit and defined contribution plans within the E.ON Group
are described in the following discussion.

(25) Provisions for Pensions and Similar
Obligations

The retirement benefit obligations toward the active and former
employees of the E.ON Group, which amounted to €30.4 billion,
were covered by plan assets having a fair value of €22.4 billion
as of December 31, 2020. This corresponds to a funded status
of 74 percent.

Provisions for Pensions and Similar Obligations

€ in millions

Present value of all defined benefit obligations

Germany

United Kingdom

Other countries

Total

Fair value of plan assets

Germany

United Kingdom

Other countries

Total

Net defined benefit liability/asset (-)

Germany

United Kingdom

Other countries

Total

Presented as operating receivables
Presented as provisions for pensions and similar obligations

Description of the Benefit Plans

In addition to their entitlements under government retirement
systems and the income from private retirement planning, most
active and former E.ON Group employees are also covered by
occupational benefit plans. Both defined benefit plans and defined
contribution plans are in place at E.ON. Benefits under defined
benefit plans are generally paid upon reaching retirement age, or
in the event of disability or death.

E.ON regularly reviews the pension plans in place within the
Group for financial risks. Typical risk factors for defined benefit
plans are longevity and changes in nominal interest rates, as well
as inflation developments and rising wages and salaries.

178

Germany
Active employees at the German Group companies are covered by
both cash balance plans and pension plans based on final salary.
Pension plans based on final salary are closed to new hires. All
new hires will receive cash balance plans in accordance with
a capital or pension module system, which, depending on the
pension plan, can provide for alternative payout options of a
prorated single payment and payments of installments in addi-
tion to the payment of a regular pension. The cash balance plans
use different interest rules. Depending on the underlying pension
plan, either interest rates adjusted to market developments
with a fixed lower limit or guaranteed interest rates are used to
determine the capital or pension modules. The benefit expense
for the cash balance plans is determined at different percentage
rates based on the ratio between compensation and the con-
tribution limit in the statutory retirement pension system in
Germany. Employees can additionally choose to defer compen-
sation. Future pension adjustments are either guaranteed at
1 percent per annum or largely track the development of the
inflation rate, usually in a three-year cycle.

To fund the pension plans for the German Group companies, plan
assets were established. The major part of these plan assets is
administered in the form of Contractual Trust Arrangements
(“CTAs”) in accordance with specified investment principles. There
are additional plan assets available through the implementation
channels of the pension fund (“Pensionsfonds”) and smaller
German pension vehicles (“Pensions- und Unterstützungskassen”).
Only the pension fund and the “Pensions kassen” vehicles are
subject to regulatory provisions in relation to the investment of
capital and funding requirements.

United Kingdom
In the United Kingdom, there are various pension plans. In the
past, employees were covered by defined benefit plans, which
for the most part were final-pay plans and make up the majority
of the pension obligations currently reported for the United
Kingdom. Benefit payments to the beneficiaries are adjusted for
inflation on a limited basis. These pension plans were closed
to new hires. Since then, new hires are offered a defined contri-
bution plan. Aside from the payment of contributions, this plan
entails no additional risks for the employer.

Plan assets in the United Kingdom are administered by trust-
ees in independent special-purpose vehicles, most of which are
separate sections of the Electricity Supply Pension Scheme

(ESPS). The trustees are selected by the members of the plan
or appointed by the entity. In that capacity, the trustees are
particularly responsible for the investment of the plan assets.

The Pensions Regulator in the United Kingdom requires that
a so-called “technical valuation” of the plan’s funding status be
performed every three years. The actuarial assumptions under-
lying the valuation are agreed upon by the trustees and E.ON
UK plc. They include presumed life expectancy, wage and salary
growth rates, investment returns, inflationary assumptions and
interest rate levels.

The next technical valuation for the E.ON section will take place
on the reporting date of March 31, 2021. Depending on the
future remeasurement of the technical deficit, two payments of
a maximum of £92 million to the Pension Trust are planned in
2022 and 2023, based on the existing deficit repair plan.

The overall innogy section was split into two sections (Retail sec-
tion and innogy section) at the beginning of 2018. In fiscal year
2020, the innogy section was transferred to RWE as agreed. At
no time was it part of the scope of obligations presented in the
E.ON Group. The technical reassessment of the Retail section rel-
evant to the E.ON Group resulted in a technical funding deficit as
of March 31, 2019, which is to be reduced by annual payments
of £3 million through March 2029.

Other Countries
The remaining pension obligations are divided between Belgium,
the Netherlands, Luxembourg, Sweden, Italy, Poland, Romania,
Slovakia, the Czech Republic and the USA.

The defined benefit plan in the Netherlands consists of commit-
ments made by various employers within the framework of a
sector-specific fund and does not permit a pro rata allocation of
the obligations, plan assets and service cost. The E.ON Group
accordingly accounts for this obligation as a defined contribution
plan. There are no minimum funding requirements in this respect.
Benefits may be reduced or contributions increased if there is
insufficient funding.

From the perspective of the Group, however, the benefit plans
are relatively insignificant in the above-mentioned countries.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

179

Description of the Benefit Obligation

The following table shows the changes in the present value of
the defined benefit obligations for the periods indicated:

Changes in the Defined Benefit Obligations

€ in millions

Total

Germany

United
Kingdom

Other
countries

Total

Germany

United
Kingdom

Other
countries

Defined benefit obligation as of January 1

28,754

22,483

6,222

15,301

10,180

5,080

2020

2019

Employer service cost

Past service cost

Gains (-) and losses (+) on settlements

Interest cost on the present value of the
defined benefit obligations

Remeasurements

Actuarial gains (-)/losses (+) arising from
changes in demographic assumptions
Actuarial gains (-)/losses (+) arising from
changes in financial assumptions
Actuarial gains (-)/losses (+) arising from
experience adjustments

Employee contributions

Benefit payments

Changes in scope of consolidation

Exchange rate differences

Other

338

-6

405

2,352

-16

299

-6

289

1,856

–

2,514

1,968

-146

-1,051

-17

-338

-73

-112

-789

-25

–

-7

-20

–

114

493

-14

541

-34

-259

–

-337

-66

Defined benefit obligation as of December 31

30,415

24,164

6,187

–

-2

–

-3

-1

–

186

-1

389

1,233

-14

1,270

-23

-809

152

-1

239

697

–

721

-24

–

-539

12,016

11,552

294

–

171

–

149

531

-12

543

–

-267

463

294

-96

28,754

22,483

6,222

–

-2

–

-3

–

The actuarial losses shown in the table for the development of
the present value of the defined benefit obligation are primarily
attributable to a decrease in the discount rates used.

The present value is attributable to retirees and their benefi-
ciaries in the amount of €16.2 billion (2019: €15.7 billion), to
former employees with vested entitlements in the amount of
€3.7 billion (2019: €3.4 billion) and to active employees in the
amount of €10.5 billion (2019: €9.7 billion).

Actuarial Assumptions

Percentages

Discount rate

Germany

United Kingdom

Wage and salary growth rate

Germany

2.35

United Kingdom 1

1.90,2.80

1.80,2.90

The actuarial assumptions used to measure the defined benefit
obligations and to compute the net periodic pension cost at
E.ON’s German and UK subsidiaries as of the respective balance
sheet date are as follows:

Pension increase rate

Germany 2

United Kingdom

1.60

2.70

1.60

2.90

December 31,

2020

2019

2018

0.80

1.40

1.30

2.00

2.90

2.50

2.00

1.75

3.20

1Different salary growth rates were applied due to different benefit plans (E.ON: 1.90 percent
[2019: 1.80 percent]; innogy: 2.80 percent [2019: 2.90 percent]).
2The pension increase rate for Germany applies to eligible individuals not subject to an agreed
guarantee adjustment.

180

To measure the E.ON Group’s occupational pension obligations
for accounting purposes, the Company has employed the
current versions of the biometric tables recognized in each
respective country for the calculation of pension obligations:

Actuarial Assumptions (Mortality Tables)

Germany

2018 G versions of the Heubeck biometric tables (2018)

United Kingdom “S2” series base mortality tables with the CMI 2018

projection model for future improvements

Changes in the actuarial assumptions described previously
would lead to the following changes in the present value of the
defined benefit obligations:

Change in the present value of the defined benefit obligations

December 31, 2020

December 31, 2019

+50
-8.17

+25
0.37

+25
2.17

+10
-3.84

-50
9.34

-25
-0.36

-25
-2.09

-10
4.12

+50
-7.85

+25
0.36

+25
2.22

+10
-3.50

-50
9.04

-25
-0.35

-25
-2.10

-10
3.73

The discount rate assumptions used by E.ON reflect the currency-
specific rates available at the end of the respective fiscal year
for high-quality corporate bonds. Interest rates for the EUR and
GBP currency areas have been determined on the basis of the
single equivalent discount rate method. The full interest curve
is used to determine the present value of the defined benefit
obligation, and the IAS 19 discount rate disclosed is determined
retrospectively as the discount rate that leads to the identical
present value of the defined benefit obligation when applied
uniformly.

Sensitivities

Change in the discount rate by (basis points)

Change in percent

Change in the wage and salary growth rate by (basis points)

Change in percent

Change in the pension increase rate by (basis points)

Change in percent

Change in mortality by (percent)

Change in percent

The sensitivities indicated are computed based on the same
methods and assumptions used to determine the present
value of the defined benefit obligations. If one of the actuarial
assumptions is changed for the purpose of computing the sensi-
tivity of results to changes in that assumption, all other actuarial
assumptions are included in the computation unchanged.

When considering sensitivities, it must be noted that the change
in the present value of the defined benefit obligations resulting
from changing multiple actuarial assumptions simultaneously
is not necessarily equivalent to the cumulative effect of the
individual sensitivities.

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

181

Description of Plan Assets and the
Investment Policy

The defined benefit plans are funded by plan assets held in spe-
cially created pension vehicles that legally are distinct from the
Company. The fair value of these plan assets changed as follows:

Changes in the Fair Value of Plan Assets

€ in millions

Total

Germany

United
Kingdom

Other
countries

Total

Germany

United
Kingdom

Other
countries

2020

2019

Fair value of plan assets as of January 1

21,634

15,471

6,154

Interest income on plan assets

Remeasurements

Return on plan assets recognized in equity,
not including amounts contained in the
interest income on plan assets

Employee contributions

Employer contributions

Benefit payments

Changes in scope of consolidation

Exchange rate differences

Other

310

1,254

586

-973

-4

-334

-65

196

695

526

-714

-4

–

-1

114

559

-259

–

-334

-64

Fair value of plan assets as of December 31

22,421

16,179

6,233

–

12,054

7,164

4,880

316

1,101

1,041

-775

7,697

287

-88

168

738

–

631

-507

7,277

–

148

363

410

-267

420

287

-88

21,634

15,471

6,154

–

-1

–

The plan assets include virtually no owner-occupied real estate
or equity and debt instruments issued by E.ON Group companies.
Each of the individual plan asset components has been allocated
to an asset class based on its substance.

182

The plan assets thus classified break down as shown in the
following table:

Classification of Plan Assets

Percentages

Total

Germany

Plan assets listed in an active market

December 31, 2020

United
Kingdom

Other
countries

Total

Germany

December 31, 2019

United
Kingdom

Other
countries

Equity securities (stocks)

Debt securities

Government bonds
Corporate bonds

Other investment funds

Total listed plan assets

Plan assets not listed in an active market

Equity securities not traded on an exchange

Debt securities

Real estate

Qualifying insurance policies

Cash and cash equivalents

Other

Total unlisted plan assets

Total

47
28
18

–

45
20
23

–

100

54
50
4

–

100

–

–
–
–

–

100

–

100

49
27
20

–

49
20
25

–

100

50
45
5

–

100

–

–
–
–

–

100

–

100

The fundamental investment objective for the plan assets is
to provide full coverage of benefit obligations at all times for
the payments due under the corresponding benefit plans. This
investment policy stems from the corresponding governance
guidelines of the Group. An increase in the net defined benefit
liability or a deterioration in the funded status following an
unfavorable development in plan assets or in the present value
of the defined benefit obligations is identified in these guidelines
as a risk. E.ON therefore regularly reviews the development of
the funded status in order to monitor this risk.

To implement the investment objective, the E.ON Group primarily
pursues an investment approach that takes into account the
structure of the benefit obligations. This long-term investment
strategy seeks to manage the funded status, with the result
that any changes in the defined benefit obli gation, especially
those caused by fluctuating inflation and interest rates are, to
a certain degree, offset by simultaneous corresponding changes
in the fair value of plan assets. The investment strategy may
also involve the use of derivatives (for example, interest rate
swaps and inflation swaps, as well as currency hedging instru-
ments) to facilitate the control of specific risk factors of pension

liabilities. In the table above, derivatives have been allocated,
based on their substance, to the respective asset classes. In
order to improve the funded status of the E.ON Group as a whole,
a portion of the plan assets will also be invested in a diversified
portfolio of asset classes that are expected to provide for long-
term returns in excess of those of fixed-income investments and
the discount rate.

The determination of the target portfolio structure for the indi-
vidual plan assets is based on regular asset-liability studies.
In these studies, the target portfolio structure is reviewed in a
comprehensive approach against the backdrop of existing
investment principles, the current funded status, the condition of
the capital markets and the structure of the bene fit obligations,
and is adjusted as necessary. The parameters used in the studies
are additionally reviewed regularly, at least once each year.
Asset managers are tasked with implementing the target port-
folio structure. They are monitored for target achievement on
a regular basis.

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

183

Description of the Pension Cost

The net periodic pension cost for defined benefit plans included
in the provisions for pensions and similar obligations and in
operating receivables is shown in the table below:

Net Periodic Pension Cost

€ in millions

Employer service cost

Past service cost

Gains (-) and losses (+) on settlements

Net interest on the net
defined benefit liability/asset

Total

2020

2019

Total

338

-6

465

Germany

United
Kingdom

Other
countries

299

-6

440

-20

–

Total

186

-1

324

Germany

United
Kingdom

Other
countries

152

-1

254

–

The past service cost is, in particular, derived from the expenses
incurred in the context of restructuring measures. In the UK,
retirees were given the option to draw higher pension benefits
at present in return for foregoing promised future pension
adjustments that exceed the statutory minimum adjustment.
The exercise of the option resulted in the recognition of nega-
tive past service cost in fiscal year 2020.

In addition to the total net periodic pension cost for defined
benefit plans, an amount of €101 million in contributions to
external insurers or similar institutions was paid in 2020 (2019:
€77 million) for defined contribution plans.

Contributions to state plans totaled €0.4 billion (2019: €0.2 billion).

Description of Contributions and Benefit
Payments

Prospective benefit payments under the defined benefit plans
existing as of December 31, 2020, for the next ten years are
shown in the following table:

Prospective Benefit Payments

€ in millions

Total

Germany

United
Kingdom

Other
countries

2021

2022

2023

2024

2025

2026–2030

Total

1,058

1,062

1,084

1,089

1,097

5,634

11,024

811

821

840

841

848

4,369

8,530

245

239

241

245

246

1,247

2,463

184

For the following fiscal year, it is expected that Group-wide
employer contributions to plan assets for new and existing
obligations will amount to a total of €310 million.

The weighted-average duration of the defined benefit obliga-
tions measured within the E.ON Group was 18.7 years as of
December 31, 2020 (2019: 18.4 years).

Changes in the Net Defined Benefit Liability

Description of the Net Defined Benefit Liability

The recognized net liability from the E.ON Group’s defined benefit
plans results from the difference between the present value of
the defined benefit obligations and the fair value of plan assets:

Total

Germany

United
Kingdom

Other
countries

Total

Germany

United
Kingdom

Other
countries

2020

2019

€ in millions

Net liability as of January 1

Net periodic pension cost

Changes from remeasurements

Employer contributions to plan assets

Net benefit payments

Changes in scope of consolidation

Exchange rate differences

Other

7,120

465

1,098

-586

-78

-13

-4

-8

7,012

440

1,161

-526

-75

-21

–

-6

-66

-60

–

-3

-2

Net liability as of December 31

7,994

7,985

-46

(26) Miscellaneous Provisions

The following table lists the miscellaneous provisions as of the
dates indicated:

Miscellaneous Provisions

€ in millions

Nuclear-waste management obligations

Personnel obligations

Obligations from green certificates

Other asset retirement obligations

Supplier-related and customer-related obligations

Environmental remediation and similar obligations

Other

Total

3,247

3,016

–

-3

-1

–

324

132

-1,041

-34

4,319

166

254

-41

-631

-32

4,275

–

171

7,120

7,012

200

168

-410

–

-8

–

-2

–

December 31, 2020

December 31, 2019

Current

Non-current

Current

Non-current

416

594

1,021

563

1,204

3,904

8,974

1,249

756

243

427

1,631

13,296

398

742

1,100

386

1,290

4,019

9,363

1,180

766

110

470

1,563

13,468

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

185

The changes in the miscellaneous provisions are shown in the
table below:

Changes in Miscellaneous Provisions

€ in millions

Nuclear-waste management
obligations

Personnel obligations

Obligations from green
certificates

Other asset retirement
obligations

Supplier-related and cus-
tomer-related obligations

Environmental remediation
and similar obligations

Other

Total

Jan. 1,
2020

Exchange
rate
differences

Changes in
scope of
consolida-
tion

Unwinding
of
discounts

9,761

1,922

1,116

810

496

529

2,853

17,487

–

-12

-63

–

-2

–

-13

-90

–

-26

–

-35

-60

–

Additions

Utilization

Reclassifi-
cations

Reversals

723

-361

-556

1,597

-1,613

-11

–

-87

–

-134

–

-2

-128

100

-62

401

649

-43

-318

3,433

-3,030

-25

-408

-631

Changes
in
estimates

-47

–

Dec. 31,
2020

9,390

1,843

1,037

804

806

485

2,835

-45

17,200

The accretion expense resulting from the changes in provisions
is shown in the financial results (see Note 10). The provision
items are discounted in accordance with the maturities with
interest rates of between 0 and 2.08 percent.

As of December 31, 2020, provisions for nuclear-waste man-
agement obligations exclusively relate to Germany; other provi-
sions mainly relate to euro zone countries and the United King-
dom.

Provisions for Nuclear-Waste Management
Obligations

The provisions for nuclear-waste management obligations as
of December 31, 2020, in the amount of €9.4 billion exclusively
relate to nuclear-power activities in Germany.

The provisions for nuclear-waste management based on nuclear-
power legislation comprise all those nuclear obligations relating
to the disposal of spent nuclear-fuel rods and low-level nuclear
waste and to the retirement and decommissioning of nuclear
power plant components that are determined on the basis of
external studies, external and internal cost estimates and con-
tractual agreements, as well as the supplementary provisions
of the German Act Transferring Responsibility for Nuclear Waste
Storage and the German Disposal Fund Act.

The asset retirement obligations recognized include the anticipated
costs of post- and service operation of the facility, dismantling
costs, and the cost of removal and disposal of the nuclear com-
ponents of the nuclear power plant.

Provisions for the disposal of spent nuclear-fuel rods also com-
prise the contractual costs of finalizing reprocessing and the
associated return of waste to interim storage, as well as costs
incurred for expert handling, including the necessary interim
storage containers and transport to interim storage.

The cost estimates used to determine the provision amounts are
based on studies and analyses performed by external specialists
and are updated annually, provided that the cost estimates are
not based on contractual agreements.

In the following, the provision items after deduction of advance
payments are classified based on technical criteria:

Nuclear-Waste Management Obligations in Germany
(Less Advance Payments)

€ in millions

Retirement and decommissioning

Containers, transports, operational waste,
other

Total

December 31,

2019

8,269

1,492

9,761

2020

7,986

1,404

9,390

Provisions, if they are non-current, are measured at their
settlement amounts, discounted to the balance sheet date.

186

Obligations from Green Certificates

The provisions for Renewables Obligation Certificates (ROCs or
Green Certificates) are an important mechanism for promoting
renewable energies. The ROCs represent a fixed share of Renew-
ables in power sales and can be acquired either from renewable
sources or on the market. During a twelve-month ROC period,
the obligations accrued for this purpose are offset against the
acquired certificates and used.

Provisions for Other Asset Retirement
Obligations

The provisions for other asset retirement obligations consist of
obligations for renewable-energy power plants and infrastruc-
ture. In addition, the provisions for dismantling conventional
plant components in the nuclear power segment, which are
based on legally binding civil agreements and public provisions,
in the amount of €469 million (2019: €475 million) are taken
into account here. Excluding discounting and cost-increase
effects, the amounts for these disposal obligations would be
€343 million. This amount flows into the economic net debt.

The amount of other asset retirement obligations disclosed
under economic net debt, not including the provisions for dis-
mantling conventional plant components in the nuclear power
segment, amounts to €336 million.

Supplier-Related Obligations

Provisions for supplier-related obligations consist of provisions
for potential losses on open purchase contracts, among others.

Customer-Related Obligations

Provisions for customer-related obligations consist primarily of
potential losses on rebates and open sales contracts as well as
from pending meter readings. There was a significant increase
from allocations for onerous contracts in the framework of
pending contracts in the amount of €0.2 billion.

Environmental Remediation and Similar
Obligations

Provisions for environmental remediation refer primarily
to redevelopment protection measures and the rehabilitation
of contaminated sites.

A risk-free discount rate of an average of about 0.0 percent is
used for the measurement of E.ON’s disposal obligations (pre-
vious year: 0.0 percent). As in the prior year, E.ON assumes a
2-percent increase in costs when estimating annual payments.
A change in the discount rate or in the cost increase rate of
0.1 percent would change the amount of the provision recognized
on the balance sheet by approximately €0.1 billion.

Excluding the effects of discounting and cost increases, the
amounts for disposal obligations would be €8,015 million with
average credit terms of approximately 7 years. This amount
flows into the economic net debt.

There were changes in estimates for the nuclear- power business
in 2020 in the amount of -€47 million (2019: €149 million).
This mainly includes the effects from the optimization of
decommissioning and disposal services. €361 million (2019:
€351 million) of this was used, of which €307 million (2019:
€250 million) related to decommissioning nuclear power plants
based on circumstances for which decommissioning and dis-
mantling costs were recognized.

Personnel Obligations

Provisions for personnel costs primarily cover provisions for
early retirement benefits, performance-based compensation
components, restructuring and other deferred personnel costs.
Restructuring provisions were made in Germany and the UK,
in particular:

In connection with the acquisition of innogy, the “Collective
Agreement on the Future and Job Security” was concluded in
2019 with employer associations and unions as well as ver.di
and the Mining, Chemical and Energy Industrial Union. This col-
lective agreement will initially apply to personnel changes and
adjustment measures implemented in Germany as a result of
the integration of the innogy Group into the E.ON Group. Among
other aspects, it includes regulations on severance payments
for employees who voluntarily depart, early retirement and the
possibility of transferring to an Employment and Qualification
Company.

In 2019, E.ON announced proposals to restructure npower. The
implementation of the plan began in 2020, and npower’s house-
hold and small commercial customers (B2C) are being succes-
sively transferred to a common IT platform. The plan calls for
them to be merged with the B2C customers of E.ON UK in 2021.
There are also plans to combine npower’s and E.ON UK’s busi-
ness with industrial and large commercial customers (B2B) on
another joint platform implemented at npower. npower’s remain-
ing activities will be restructured. This includes the closure of
most of npower’s sites and the resulting headcount reduction.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

187

Other

The other miscellaneous provisions consist of certain environ-
mental remediation obligations from predecessor companies
(€0.5 billion), possible obligations from tax-related interest
expense (€0.2 billion), litigation cost risks (€0.2 billion), other

taxes (€0.1 billion), decommissioning and environmental
rehabilitation (€0.1 billion), litigation risks (€0.1 billion), net-
work maintenance obligations (€0.1 billion), and risks from
non-reimbursement of investment costs (€0.1 billion).

(27) Liabilities

The following table provides a breakdown of liabilities:

Liabilities 1

€ in millions

Financial liabilities

Trade payables

Capital expenditure grants

Liabilities from derivatives

Advance payments

Contract liabilities (IFRS 15)

Other operating liabilities

Trade payables and other operating liabilities

Total

1Adjusted prior-year figures.

Financial Liabilities

The following tables present the changes to financial liabilities
in fiscal years 2020 and 2019:

December 31, 2020

December 31, 2019

Current

Non-current

Current

Non-current

3,418

8,064

618

103

838

6,564

16,215

19,633

29,423

–

299

3,679

–

2,965

656

7,599

37,022

3,841

8,782

1,418

489

527

5,361

16,601

20,442

27,572

–

198

3,571

–

2,975

1,196

7,940

35,512

Financial Liabilities

€ in millions

Bonds

Commercial paper

Bank loans/Liabilities to banks

Lease obligations 1

Other financial liabilities

Financial liabilities

1For more information see Note 33.

Cash-
effective

Non-cash-effective

Jan. 1, 2020

Cash flows

Exchange
rate
differences

Changes in
scope of
consolidation

Compound-
ing effect

27,059

2,394

-157

1,138

2,609

557

-50

-794

-332

114

–

-2

-14

-8

31,413

1,332

-181

–

266

-46

233

–

Other

-299

–

-1

350

-17

Dec. 31,
2020

29,019

607

2,615

600

32,841

188

Financial Liabilities 1

€ in millions

Bonds

Commercial paper

Bank loans/Liabilities to banks

Lease obligations 2

Other financial liabilities

Financial liabilities

1Adjusted prior-year figures.
2For more information see Note 33.

Cash-
effective

Non-cash-effective

Jan. 1, 2019

Cash flows

Exchange
rate
differences

Changes in
scope of
consolidation

Compound-
ing effect

8,958

3,021

340

14,737

138

863

463

-150

-392

-292

222

–

-2

200

1,394

1,703

-193

10,422

2,409

408

17,841

–

Other

–

330

–

330

Dec. 31,
2019

27,059

1,138

2,609

557

31,413

Liabilities to financial institutions include, among other items,
collateral received, measured at a fair value of €8 million
(2019: €68 million). This collateral relates to amounts pledged
by banks to limit the utilization of credit lines in connection
with the fair value measurement of derivative trans actions. The
other financial liabilities include, inter alia, financial guarantees
totaling €8 million (2019: €8 million). Also included is collateral
received in connection with goods and services in the amount
of €10 million (2019: €10 million). E.ON can use this collateral
without restriction.

The financial liabilities of innogy recognized at the date of initial
consolidation were marked to market under IFRS. This market
value was considerably higher than the nominal value because
market interest rates had fallen since the bonds were issued.
The difference between the nominal value and the market value
calculated during the preliminary purchase price allocation
totaled €2,121 million as of December 31, 2020. This difference
is not taken into account in the economic net debt.

On August 13, 2020, E.ON launched transactions to harmonize
the new E.ON Group’s funding structure. These transactions
involved E.ON offering innogy bondholders the option to change
the debtor of roughly €11.5 billion in bonds to E.ON. The offer
gave innogy bondholders the option to hold bonds that have the
same status as current E.ON bonds. It will also ensure that all

debt investors are treated equally. The transactions were com-
pletely closed in November 2020. A total of 99.95 percent of
innogy’s outstanding bonds have successfully been transferred.

The following is a description of the E.ON Group’s significant
credit arrangements and debt issuance programs. Included
under “Bonds” are the bonds currently outstanding, including
those issued under the Debt Issuance Program.

Corporate Headquarters
Covenants
The financing activities involve the use of covenants (contractual
obligations) consisting primarily of change-of-control clauses
(right of cancellation upon change of ownership), negative pledges,
pari-passu clauses and cross-default clauses, each referring to
a restricted set of significant circumstances. Financial covenants
(that is, covenants linked to financial ratios) are not employed.
All covenants were adhered to in 2020.

€35 Billion Debt Issuance Program
A Debt Issuance Program simplifies the issuance from time to
time of debt instruments through public and private placements
to investors. The Debt Issuance Program of E.ON SE was
most recently renewed in March 2020, with a total amount of
€35 billion. E.ON SE plans to renew the program in 2021.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

189

At year-end 2020, the following E.ON SE and E.ON Interna-
tional Finance B.V. bonds were outstanding:

Major Bond Issues of E.ON SE and E.ON International Finance B.V. 1

Issuer

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V. 2

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V.

E.ON SE

E.ON International Finance B.V. 3

E.ON International Finance B.V.

E.ON International Finance B.V. 4

E.ON International Finance B.V.

Volume in the
respective currency

570 million GBP

1,000 million EUR

750 million EUR

500 million GBP

500 million EUR

750 million EUR

1,000 million EUR

488 million GBP

750 million EUR

800 million EUR

500 million EUR

750 million EUR

500 million EUR

750 million EUR

1,000 million EUR

850 million EUR

500 million EUR

750 million EUR

1,000 million EUR

750 million EUR

760 million GBP

500 million EUR

975 million GBP

600 million EUR

600 million GBP

900 million GBP

1,000 million USD

700 million GBP

1,000 million GBP

Initial term

Repayment

20 years

13 years

4 years

13 years

4 years

3 years

5 years

3 years

20 years

4 years

10 years

7 years

5 years

8 years

5.5 years

8 years

7 years

7.5 years

10 years

8 years

12 years

11 years

28 years

11 years

12 years

30 years

22 years

30 years

Apr 2021

Aug 2021

Jul 2022

Sep 2022

Oct 2022

Nov 2022

Apr 2023

Dec 2023

Jan 2024

May 2024

Aug 2024

Apr 2025

Oct 2025

May 2026

Oct 2026

Sep 2027

Oct 2027

Feb 2028

May 2029

Jul 2029

Feb 2030

Jun 2030

Dec 2030

Aug 2031

Nov 2031

Jun 2032

Feb 2033

Jan 2034

Oct 2037

Apr 2038

Jan 2039

Jul 2039

Coupon

6.500%

0.375%

5.500%

0.000%

0.750%

0.375%

5.625%

0.000%

3.000%

0.875%

0.000%

1.000%

1.625%

0.250%

0.375%

1.250%

0.750%

1.625%

1.500%

0.350%

6.250%

0.750%

0.875%

0.625%

6.375%

5.750%

4.750%

5.875%

6.650%

6.750%

6.125%

1Listing: All bonds ≥ 500 million EUR are listed in Luxembourg with the exception of the Rule 144A/Regulation S USD bond, which is unlisted.
2The volume of this issue was raised from originally EUR 500 million to EUR 750 million.
3The volume of this issue was raised from originally GBP 850 million to GBP 975 million.
4Rule 144A/Regulation S bond.

Additionally outstanding as of December 31, 2020, were private
placements with a total volume of approximately €1.7 billion
(2019: €1.7 billion).

190

€3.5 Billion Syndicated Revolving Credit Facility
Effective October 24, 2019, E.ON arranged a syndicated revolv-
ing credit facility in the amount of €3.5 billion over an original
term of five years, with two renewal options for one year each.
The first option to extend the credit line by a further year was
exercised in October 2020. The credit margin of the facility is in
part coupled with the development of certain ESG ratings on
which E.ON bases financial incentives for a sustainable corporate
strategy. The ESG ratings are calculated by three prominent
agencies: ISS ESG, MSCI ESG Research, and Sustainalytics. The
facility was granted by 21 banks, which make up E.ON’s core
banking group. The facility has not been drawn; rather, it serves
as the Group’s reliable, long-term liquidity reserve, one purpose
of which is to function as a backup facility for the commercial
paper programs.

Acquisition Financing of €1.75 Billion
In connection with the acquisition of innogy SE, on April 6, 2018,
E.ON originally secured a €5 billion acquisition facility, which
was reduced to €1.75 billion by August 2018. With the comple-
tion of the squeeze-out of the remaining minority shareholders
of innogy, the credit line was terminated in June 2020; the line
was not drawn on.

€10 Billion and $10 Billion Commercial Paper Programs
The euro commercial paper program in the amount of €10 billion
allows E.ON SE to issue from time to time commercial paper
with maturities of up to two years less one day to investors.
The U.S. commercial paper program in the amount of $10 billion
allows E.ON SE to issue from time to time commercial paper
with maturities of up to 366 days and extendible notes with
original maturities of up to 397 days (and a subsequent extension
option for the investor) to investors. As of December 31, 2020,
no commercial paper was outstanding under either the euro
commercial paper program (2019: €50 million) and the U.S.
commercial paper program (2019: €0 million).

The bonds issued by E.ON SE and E.ON International Finance B.V.
(guaranteed by E.ON SE) and innogy Finance B.V. (guaranteed
by innogy SE) have the maturities presented in the table below.
Liabilities denominated in foreign currency include the effects
of economic hedges, and the amounts shown here may there-
fore vary from the amounts presented on the balance sheet.

Bonds Issued by E.ON SE, E.ON International Finance B.V. and innogy Finance B.V.

€ in millions

December 31, 2020

December 31, 2019

Total

27,428

25,011

Due in
2020

–

2,150

Due in
2021

2,384

2,420

Due in
2022

2,656

2,688

Due in
2023

2,642

923

Due between
2024 and
2030

11,084

8,382

Due
after 2030

8,662

8,448

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

191

Financial Liabilities by Segment
The following table breaks down the financial liabilities by
segment:

Financial Liabilities by Segment as of December 311

€ in millions

Energy Networks
Germany
Sweden
ECE/Turkey

Customer Solutions
Germany Sales
UK
Netherlands/Belgium
Other

Non-Core Business

Bonds

Commercial paper

Bank loans/
Liabilities to banks

Lease obligations 2

Other financial
liabilities

Financial liabilities

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

–
–
–
–

–
–
–
–
–

–

–
–
–
–

–
–
–
–
–

–

–
–
–
–

–
–
–
–
–

–

–
–
–
–

–
–
–
–
–

–

464
239
–
225

135
121
–
–
14

–

233
203
–
30

177
92
–
–
85

–

728

2,112
2,016
13
83

2,092
2,002
5
85

322
54
94
46
128

178

315
-11
130
49
147

199

607

1,138

2,615

2,609

241
238
1
2

87
-3
1
2
87

173

600

167
176
–
-9

115
15
14
6
80

2,817
2,493
14
310

544
172
95
48
229

102

2,492
2,381
5
106

607
96
144
55
312

192

29,378

28,228

557

32,841

31,413

Corporate Functions/Other

29,019

27,059

E.ON-Group

29,019

27,059

1Adjusted prior-year figures.
2The previous year included liabilities from finance leases.

Trade Payables and Other Operating Liabilities

Trade payables totaled €8,064 million as of December 31, 2020
(2019: €8,782 million).

binding terms governing such new connections. These grants
are customary in the industry, generally non-refundable and
recognized as revenue in the amount of €360 million according
to the useful lives of the related assets.

Capital expenditure grants of €327 million (2019: €222 million)
have not yet been recognized as revenue. The E.ON Group retains
ownership of the assets. The grants are non-refundable and
are recognized in other operating income over the period of the
depreciable lives of the related assets.

Derivative liabilities totaled €4,297 million as of December 31,
2020 (2019: €4,989 million).

Contractual liabilities under IFRS 15 in the amount of
€3,803 million (2019: €3,502 million) consist primarily of con-
struction grants that were paid by customers for the cost of new
gas and electricity connections in accordance with the generally

Other operating liabilities consist primarily of other tax liabili-
ties in the amount of €1,304 million (2019: €1,276 million)
and interest payable in the amount of €399 million (2019:
€469 million). This item also includes other liabilities to our cus-
tomers from overpayments and refund claims of €506 million
(2019: €284 million) and current personnel liabilities of
€444 million (2019: €385 million). As of December 31, 2020,
liabilities of €637 million arose from the corporate transactions
mentioned in Note 5. Also included in other operating liabilities
are carryforwards of counterparty obligations to acquire addi-
tional shares in already consolidated subsidiaries as well as non-
controlling interests in fully consolidated partnerships with
legal structures that give their shareholders a statutory right of
withdrawal combined with a compensation claim, in the amount
of €2,271 million (2019: €2,069 million).

192

(28) Contingent Liabilities and Other Financial
Obligations

As part of its business activities, E.ON is subject to contingent
liabilities and other financial obligations involving a variety of
underlying matters. These primarily include guarantees, obliga-
tions from litigation and claims (as discussed in more detail in
Note 29), short- and long-term contractual, legal and other
obligations and commitments.

Contingent Liabilities

The fair value of the E.ON Group’s contingent liabilities was
€0.4 billion as of December 31, 2020 (December 31, 2019:
€1.3 billion). This value represents the best estimate of the
expenditure required to settle the present obligation as of the
reporting date and primarily includes contingent liabilities in
connection with contingencies and potential long-term envi-
ronmental remediation measures.

E.ON has issued direct and indirect guarantees and surety bonds
to third parties in connection with its own operations or the
operations of affiliated companies, which may trigger payment
obligations based on the occurrence of certain events. These
instruments include both financial guarantees as well as opera-
tional guarantees, which primarily secure contractual obligations
and benefit obligations for active and former employees.

In addition, E.ON has entered into indemnification agreements,
which as a rule are incorporated in agreements concerning the
disposal of shareholdings and, above all, affect the customary
representations and warranties with relation to liability risks for
environmental damage and contingent tax risks. In some cases,
obligations are covered in the first instance by provisions of the
disposed companies before E.ON itself is required to make any
payments. Guarantees issued by companies that were later sold
by E.ON SE or its legal predecessors are usually included in the
respective final sales contracts in the form of indemnities.

Moreover, E.ON has commitments under which it assumes
joint and several liability arising from its interests in civil-law
companies (“GbR”), non-corporate commercial partnerships
and consortia in which it participates.

The guarantees of E.ON also include items related to the opera-
tion of nuclear power plants. Under the German Nuclear Energy
Act (“Atomgesetz” or “AtG”) and the ordinance regulating the
provision for coverage under the Atomgesetz (“Atomrecht liche
Deckungsvorsorge-Verordnung” or “AtDeckV”) of April 27, 2002,
German nuclear power plant operators are required to provide
nuclear accident liability coverage of up to €2.5 billion per incident.

The coverage requirement is satisfied in part by a standardized
insurance facility in the amount of €255.6 million. The institution
Nuklear Haftpflicht Gesellschaft bürgerlichen Rechts (“Nuklear
Haftpflicht GbR”) now only covers costs between €0.5 million
and €15 million for claims related to officially ordered evacuation
measures. Group companies have agreed to place their sub-
sidiaries operating nuclear power plants in a position to maintain
a level of liquidity that will enable them at all times to meet their
obligations as members of the Nuklear Haftpflicht GbR, in pro-
portion to their shareholdings in nuclear power plants.

To provide liability coverage for the additional €2,244.4 million
per incident required by the above-mentioned amendments,
E.ON Energie AG (“E.ON Energie”) and the other parent compa-
nies of German nuclear power plant operators reached a Soli-
darity Agreement (“Solidarvereinbarung”) on July 11, July 27,
August 21, and August 28, 2001, extended by agreement
dated March 25, April 18, April 28, and June 1, 2011. If an
accident occurs, the Solidarity Agreement calls for the nuclear
power plant operator liable for the damages to receive—after
the operator’s own resources and those of its parent companies
are exhausted— financing sufficient for the operator to meet
its financial obligations. Under the Solidarity Agreement, E. ON
Energie’s share of the liability coverage on December 31, 2020,
was 47.1 percent (prior year: 46.8 percent), plus an additional
5.0 percent charge for the administrative costs of processing
damage claims. This share will change to 35.1 percent starting
from January 1, 2021. Sufficient liquidity has been provided for
and is included within the liquidity plan.

Furthermore, as of December 31, 2020, E.ON is continuing to
provide collateral in the amount of €744.9 million for the former
Group companies transferred to RWE which will be repaid or
assumed by RWE Group companies in the short term. During
the 2020 fiscal year, guarantees amounting to €2,266.4 million
were redeemed as part of the exchange process with RWE.

Other Financial Obligations

In addition to provisions and liabilities carried on the balance
sheet and to reported contingent liabilities, there also are other
mostly long-term financial obligations arising mainly from
contracts entered into with third parties, or on the basis of legal
requirements.

As of December 31, 2020, purchase commitments for invest-
ments in intangible assets and in property, plant and equipment
amounted to €1.7 billion (2019: €1.9 billion). Of these commit-
ments, €1.2 billion are due within one year (2019: €1.2 billion).
The purchase commitment mainly includes financial obligations

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

193

for as yet outstanding investments, in particular in the Energy
Networks Germany and Sweden segments. On December 31,
2020, these obligations totaled €1.3 billion (2019: €1.4 billion).

Additional long-term contractual obligations in place at the
E.ON Group as of December 31, 2020, relate primarily to the
purchase of electricity and natural gas. Financial obligations
under the electricity purchase contracts amount to approximately
€6.8 billion on December 31, 2020 (2019: €6.5 billion), of
which €3.5 billion (2019: €3.7 billion) is due within one year).
Financial obligations under the gas purchase contracts amount
to approximately €4.8 billion on December 31, 2020 (2019:

€4.4 billion). Of this amount, €2.4 billion (2019: €2.4 billion) is
due within one year. Additional purchase commitments as of
December 31, 2020, amounted to approximately €0.6 billion
(2019: €0.6 billion). They include long-term contractual com-
mitments to purchase heat and alternative fuels. Of these
commitments, €0.1 billion (2019: €0.1 billion) are due within
one year.

There are non-material further financial obligations from joint
ventures, from capital obligations concerning the acquisition of
real estate funds held as financial assets and from corporate
actions.

(29) Litigation and Claims

A number of different court actions, governmental investigations
and proceedings, and other claims are currently pending or may
be instituted or asserted in the future against companies of the
E.ON Group. This in particular includes legal actions and proceed-
ings on contract amendments and price adjustments initiated
in response to market upheavals and the changed economic sit-
uation in the electricity and gas sectors (also as a consequence
of the energy transition) and concerning price increases and
anticompetitive practices. The courts and authorities are also
subjecting competitive practices to stricter reviews.

In the Energy Networks segment, Group companies are involved
in proceedings for the award of concessions and in connection
with grid connections and the calculation of the grid fee. Official
regulations and changes in regulatory practice have given rise
to legal disputes. Of particular note here are effects in connection
with the regulatory treatment of capital costs and return on
equity. The national regulatory regimes within Europe are also
subject to changes, some of which have a significant impact on
network operations. Owing to a number of factors, including
regulatory and legal decisions, the regulatory framework has
increased here. However, these regulatory interventions are not
restricted to the network area; distribution activities in the
customer solutions area have also been affected by regulatory
measures.

The changes to the legal and regulatory framework can in some
cases also significantly impact subsidies and remuneration
practices in the area of Renewables, which in turn are the object
of regulatory or court proceedings.

There are also legal proceedings in connection with completed
M&A activities, in particular as a result of the acquisition of
innogy SE.

On April 13, 2017, the Federal Constitutional Court declared
the Nuclear Fuel Tax Act to be incompatible with the Basic Law
and invalid. The nuclear-fuel tax plus interest paid by E.ON was
refunded. Nuclear operators use two models for the calculation
of interest with the German customs authorities, one of which
is used by PreussenElektra. With the 16th amendment to the
German Nuclear Energy Act, the German Federal Government
has implemented the ruling of the German Federal Constitutional
Court on the phase-out of nuclear energy. This amendment
regulated compensation claims for certain investments and
residual volumes of electricity, and created an obligation to offer
these residual volumes at reasonable terms and conditions. In
its ruling of September 29, 2020, the German Federal Constitu-
tional Court determined that the 16th amendment to the Nuclear
Energy Act never entered into force due to a procedural error
on the part of the legislature; for this reason, and also in view of
deficiencies in its content, lawmakers must introduce a new
regulation. PreussenElektra sued Krümmel GmbH & Co. OHG
and Vattenfall Europe Nuclear Energy GmbH with the aim of
transferring, without compensation, the residual volumes of
electricity from the Krümmel nuclear power plant corresponding
to the ownership interest. Based on the understanding between
the responsible German Federal Ministries and the four nuclear
power plant operators published at the beginning of March 2021,
there are also plans to transfer the residual quantities of elec-
tricity corresponding to the legal stake in the power plants jointly
owned with Vattenfall free of charge to PreussenElektra and to
use them for generation in the Group’s own power plants. The
validity of this understanding is still pending its legal implemen-
tation. A price will be agreed for the additional quantities required
to operate the nuclear power plants beyond the end date stipu-
lated under the German Nuclear Energy Act.

194

(30) Supplemental Cash Flow Disclosures

Note 5 provides a detailed presentation of the acquisition of the
shares in innogy. The comparative figures for the previous year
relate to additions and disposals outside the scope of the innogy
transaction.

Not including the acquisition of innogy, E.ON made no external
payments for additions to consolidated equity interests (2019:
€92 million). The only addition was the non-cash acquisition of
the VSEH Group from RWE; the purchase price was €740 million.
The cash acquired totaled €6 million (2019: €16 million).
Assets in the amount of €1,534 million (2019: €166 million)
and provisions and liabilities in the amount of €604 million
(2019: €161 million) were recognized.

The total consideration received by E.ON in 2020 on the disposal
of consolidated equity interests and activities generated cash
inflows of €921 million (2019: €37 million). Cash and cash equiva-
lents sold amounted to €88 million (2019: €32 million). The sale
of the consolidated activities led to reductions of €1,182 million
(2019: €742 million) in assets and €482 million (2019: €10 mil-
lion) in provisions and liabilities. The derecognition of assets and
liabilities primarily relates to the sale of the heating electricity
companies and innogy’s sales business in the Czech Republic.

activities for a full year. Cash flow from operating activities in
the Customer Solutions segment was €0.4 billion below the
prior-year level. This development is mainly attributable to the
first-time inclusion of innogy’s activities in the UK for a full
year and to the change in the presentation of segments, also for
the previous year, for comparative purposes. The contribution
from Renewables decreased compared with the previous year
(-€0.2 billion). Cash provided by operating activities from con-
tinuing and discontinued operations also increased due to lower
tax payments (+€0.8 billion), while higher interest payments
on innogy’s debt had a negative impact (-€0.1 billion).

Cash provided by investing activities from discontinued opera-
tions amounted to -€1.9 billion (2019: -€5.8 billion). Whereas in
the previous year €1.6 billion was reported as a payment for the
acquisition of the innogy shares, the cash flow from investing
activities in the current fiscal year was reduced by an additional
purchase price payment by RWE (€0.4 billion). In addition, the
receipt of payments in the first quarter of 2020 from the trans-
fer of the indirect share in Nord Stream AG to the CTA, which
was already carried out in 2019, the sale of innogy’s sales busi-
ness in the Czech Republic, a prepayment in connection with the
agreed sale of the stake in Rampion and the sale of significant
parts of the heating electricity business in Germany had a posi-
tive impact on investment cash flow.

At €5.9 billion, cash provided by operating activities before
interest and taxes from continuing and discontinued operations
was significantly higher than in the prior year (€4.4 billion). The
Energy Networks segment recorded an increase (+€1.9 billion)
due to positive working capital effects in the former E.ON net-
work business and the first-time inclusion of innogy’s network

At -€2.6 billion, cash provided by financing activities of con-
tinuing and discontinued operations was €3.4 billion less than
the prior-year figure of +€0.8 billion. This was due in particular
to payments in the course of the settlement of the remaining
minority interests at innogy SE and a higher dividend at E.ON SE
compared with the prior year.

(31) Derivative Financial Instruments and
Hedging Transactions

Strategy and Objectives

The Company’s policy generally permits the use of derivatives if
they are associated with underlying assets or liabilities, planned
transactions, or legally binding rights or obligations.

At the E.ON Group, hedge accounting in accordance with IFRS 9
is employed primarily in connection with hedging long-term
liabilities and future financing via interest-rate derivatives and
for hedging long-term foreign currency receivables and payables
and foreign investments via currency derivatives. E.ON also
hedges net investments in foreign operations.

Notes
Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

195

In commodities, potentially volatile future cash flows resulting
primarily from planned purchases and sales of electricity
within and outside of the Group are hedged.

To hedge currency risk, E.ON entered into hedging transactions
in the reporting year in pounds sterling at an average hedging
rate of £0.91/€ (2019: £0.86/€) and in U.S. dollars at an average
hedging rate of US$1.36/€ (2019: US$1.17/€). Hedging trans-
actions were concluded at an average interest rate of 3.43 per-
cent (2019: 3.43 percent) to hedge the interest rate risk in the
euro zone. The average hedging price for hedging electricity
price change risks amounted to €48.06/MWh in the year under
review (2019: €47.10/MWh).

Fair Value Hedges

Cash Flow Hedges

Cash flow hedges are used to protect against the risk arising
from variable cash flows. Interest rate swaps and cross-currency
interest rate swaps are the principal instruments used to limit
interest rate and currency risks. The purpose of these swaps is to
maintain the level of payments arising from long-term interest-
bearing receivables and liabilities and from capital investments
denominated in foreign currency and euro by using cash flow
hedge accounting in the functional currency of the respective
E.ON company.

In order to reduce future cash flow fluctuations arising from
electricity transactions effected at variable spot prices, futures
contracts are concluded and also accounted for using cash flow
hedge accounting.

Fair value hedges are used to protect against the risk from
changes in market values. Gains and losses on these hedges are
generally reported in that line item of the income statement
which also includes the respective hedged items.

The following table presents the carrying amounts of the
hedging instruments and the changes in the fair values of the
hedging instruments and hedged items by hedged risk type:

Carrying Amounts of Hedging Instruments and Changes in Fair Value of Hedging Instruments and Hedged
Items in Connection with Cash Flow Hedges

€ in millions

Currency risk

Interest-rate risk

Electricity price change risk

Carrying amount

Receivables from
derivative financial
instruments

Liabilities from
derivative financial
instruments

Change in the fair value
of the designated portion
of hedging instruments

2020

114

2019

140

2020

105

1,706

2019

1,350

2020

-49

-383

2019

-435

-15

Change in the fair value
of hedged items

2020

2019

379

-17

-8

423

The amount of ineffectiveness for cash flow hedges recorded
for the year ended December 31, 2020, produced an expense of
€5 million (2019: €12 million). Of this amount, €4 million relates
to hedging of interest-rate risk (2019: €12 million).

Gains and losses from the ineffective portions of cash flow hedges
are classified as other operating income or other operating
expenses.

196

Total

Currency risk

Interest-rate
risk

Electricity
price change
risk

-25

-3

-74

-45

-42

-370

–

-379

–

-43

–

-40

–

-992

-438

-3

-12

-1,435

-464

-42

148 2

-52

-1,809

The development of OCI arising from cash flow hedges, broken
down by hedged risk type, is as follows:

Changes in OCI Arising from Cash Flow Hedges

€ in millions

Balance as of January 1, 2019

Unrealized changes—hedging reserve

Unrealized changes—reserve for hedging costs

Reclassification adjustments recognized in income

Companies accounted for under the equity method

Income taxes

Balance as of December 31, 2019 1

Balance as of January 1, 2020

Unrealized changes—hedging reserve

Unrealized changes—reserve for hedging costs

Reclassification adjustments recognized in income

Companies accounted for under the equity method

Income taxes

Balance as of December 31, 2020 1

1As of December 31, 2020, includes -€211 million (2019: -€241 million) from terminated cash flow hedges.
2Of this amount, €19 million relates to hedged cash flows that are no longer expected to occur.

The balance of the OCI arising from cash flow hedges as of
December 31, 2020, contains -€1.5 billion relating to hedging
of interest-rate risk (2019: -€1.2 billion).

Reclassifications recognized in income are generally reported
in that line item of the income statement which also includes
the respective hedged transaction.

The nominal volume of the hedging instruments is presented
in the following table:

Nominal Values of Hedging Instruments in Connection with Cash Flow Hedges

€ in millions

Currency risk

Interest-rate risk

Electricity price change risk

Net Investment Hedges

The Company uses foreign currency forwards, foreign currency
swaps and foreign currency loans to protect the value of its net
investments in its foreign operations denominated in foreign
currency.

The carrying amount of the assets used as hedging instruments
as of December 31, 2020, was €7 million (2019: €27 million) and
the carrying amount of the liabilities used as hedging instruments

<1 year

1–5 years

610

1,045

1,632

500

Maturity

>5 years

1,329

2,750

–

2020

3,571

4,295

Total

2019

1,903

4,304

352

was €1,165 million (2019: €1,220 million). The fair values of
the designated portion of the hedging instruments changed by
€117 million in the reporting period (2019: -€87 million).

As in 2019, no ineffectiveness resulted from net investment
hedges in 2020.

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

197

The development of OCI arising from net investment hedges
is as follows:

The following is a summary of the methods and assumptions
for the valuation of utilized derivative financial instruments in
the Consolidated Financial Statements.

Changes in OCI Arising from Net Investment Hedges

€ in millions

Currency risk

Balance as of January 1, 2019

Unrealized changes—hedging reserve

Unrealized changes—reserve for hedging costs

Reclassification adjustments recognized in income

Income taxes

Balance as of December 31, 2019 1

Balance as of January 1, 2020

Unrealized changes—hedging reserve

Unrealized changes—reserve for hedging costs

Reclassification adjustments recognized in income

Income taxes

Balance as of December 31, 2020 1

-77

-140

565

350

-1

-166

–

265

1As of December 31, 2020, includes -€71 million (2018: -€71 million) from terminated net
investment hedges.

As a rule, reclassifications recognized in income are reported
under other operating income and expenses. The nominal volume
of hedging instruments in net investment hedges amounted to
€4,945 million as of December 31, 2020 (2019: €7,891 million).
Since the currency risk of net investment hedges is hedged
through the ongoing rollover of the hedging instruments, the major-
ity are concluded with a remaining term of less than one year.

Valuation of Derivative Instruments

The fair value of derivative financial instruments is sensitive to
movements in underlying market rates and other relevant vari-
ables. The Company assesses and monitors the fair value of
deri vative instruments on a periodic basis. The fair value to be
determined for each derivative instrument is the price that
would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants on the
measurement date (exit price). E.ON also takes into account the
counterparty credit risk for both own credit risk (debt value
adjustment) and the risk of the corresponding counterparty
(credit value adjustment) when determining fair value. The fair
values of derivative instruments are calculated using common
market valuation methods with reference to available market
data on the measurement date.

• Currency, electricity, gas and oil forward contracts, swaps,
and emissions-related derivatives are valued sep arately at
their forward rates and prices as of the balance sheet date.
Whenever possible, forward rates and prices are based on
market quotations, with any applicable forward premiums
and discounts taken into consideration.

• Market prices for electricity options are valued using standard

option pricing models commonly used in the market.

• The fair values of existing instruments to hedge interest risk
are determined by discounting future cash flows using market
interest rates over the remaining term of the instrument.
Discounted cash values are determined for interest rate, cross-
currency and cross-currency interest rate swaps for each
individual transaction as of the balance sheet date. Interest
income and expenses are recognized in income at the date of
payment or accrual.

• Equity forwards are valued on the basis of the stock prices of
the underlying equities, taking into consideration any timing
components.

• Exchange-traded futures and option contracts are valued
individually at daily settlement prices determined on the
futures markets that are published by their respective clear-
ing houses. Paid initial margins are disclosed under other
assets. Variation margins received or paid during the term of
such contracts are stated under other liabilities or other
assets, respectively.

• Certain long-term energy contracts are valued with the aid
of valuation models that use internal data if market prices
are not available. A hypothetical 10-percent increase or
decrease in these internal valuation parameters as of the
balance sheet date would lead to a theo retical change in
market values of ±€19 million.

198

(32) Additional Disclosures on Financial
Instruments

The carrying amounts of the financial instruments, their grouping
into IFRS 9 measurement categories, their fair values and their
measurement sources by class are presented in the following
table:

Carrying Amounts, Fair Values and Measurement Categories by Class
within the Scope of IFRS 7 as of December 31, 2020

€ in millions

Equity investments

Financial receivables and other financial assets

Receivables from finance leases
Other financial receivables and financial assets

Trade receivables and other operating assets

Trade receivables
Derivatives with no hedging relationships
Derivatives with hedging relationships
Other operating assets

Securities and fixed-term deposits

Cash and cash equivalents

Restricted cash

Assets held for sale

Total assets

Financial liabilities

Bonds
Bank loans/Liabilities to banks
Lease obligations
Other financial liabilities

Trade payables and other operating liabilities

Trade payables
Derivatives with no hedging relationships
Derivatives with hedging relationships
Put option liabilities under IAS 32 2
Other operating liabilities

Liabilities associated with assets held for sale

Carrying
amounts
within the
scope of
IFRS 7

Carrying
amounts
within the
scope of
IFRS 9

Determined
using market
prices
(Level 1)

Derived from
active market
prices
(Level 2)

Fair value

501

862
257
605
482
123

11,407
7,615
3,063
214
515

2,998
1,486
1,512

2,668

1,016

–

19,452

32,528
29,019
607
2,606
296

16,665
7,927
2,404
1,893
2,271
2,170

–

FVPL

n/a

AmC
FVPL

AmC
FVPL
n/a
AmC

FVPL
FVOCI

AmC

AmC
AmC
n/a
AmC

AmC
FVPL
n/a
AmC
AmC

501

257
605
482
123

3,063
214
515

2,998
1,486
1,512

30,963
607
2,576
293

2,404
1,893
2,280
2,136

4
–

100
2
3

2,261
826
1,435

29,752
–

–

85
1
–
–

–

150
–

2,833
212
157

737
660
77

1,211
31

2,204
1,892
–
1,120

Carrying
amounts

1,883

1,067
289
778

14,769
7,714
3,063
214
3,778

2,998

2,668

1,016

1,002

25,403

32,841
29,019
607
2,615
600

23,814
8,064
2,404
1,893
2,271
9,182

185

Total liabilities

56,840

49,193

1FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation
techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
2Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

199

The carrying amounts of cash and cash equivalents and of trade
receivables and trade payables are considered reasonable
estimates of their fair values because of their short maturity.

Where the fair value of a financial instrument can be derived
from an active market without the need for an adjustment,
that value is used as the fair value. This applies in particular to
equities held and to bonds held and issued.

Carrying Amounts, Fair Values and Measurement Categories by Class
within the Scope of IFRS 7 as of December 31, 2019 1

€ in millions

Equity investments

Financial receivables and other financial assets

Receivables from finance leases
Other financial receivables and financial assets

Trade receivables and other operating assets

Trade receivables
Derivatives with no hedging relationships
Derivatives with hedging relationships
Other operating assets

Securities and fixed-term deposits

Cash and cash equivalents

Restricted cash

Assets held for sale

Total assets

Financial liabilities

Bonds
Bank loans/Liabilities to banks
Lease obligations
Other financial liabilities

Trade payables and other operating liabilities

Trade payables
Derivatives with no hedging relationships
Derivatives with hedging relationships
Put option liabilities under IAS 32 3
Other operating liabilities

Liabilities associated with assets held for sale

Carrying
amounts

1,730

1,189
370
819

17,799
8,364
3,022
263
6,150

3,551

1,894

511

1,366

28,040

31,413
27,059
1,138
2,609
607

24,541
8,782
3,476
1,513
2,069
8,701

602

Carrrying
amounts
within the
scope of
IFRS 7

Carrying
amounts
within the
scope of
IFRS 9 2

Determined
using market
prices
(Level 1)

Derived from
active market
prices
(Level 2)

Fair value

455

817
336
481
341
140

13,157
8,176
3,022
263
1,696

3,551
1,936
1,615

1,894

511

20,400

31,120
27,059
1,138
2,598
325

17,496
8,709
3,476
1,513
2,069
1,729

245
214
31

FVPL

n/a

AmC
FVPL

AmC
FVPL
n/a
AmC

FVPL
FVOCI

AmC

AmC
AmC
n/a
AmC

AmC
FVPL
n/a
AmC
AmC

AmC
FVPL

455

336
481
341
140

3,022
263
1,700

3,551
1,936
1,615

29,935
1,147
2,697
325

3,476
1,513
2,069
1,752

214
31

1
–

40
10
3

3,031
1,512
1,519

28,679
70

65
25
–
–

–

160
–

2,570
253
95

520
424
96

1,256
64

3,084
1,488
–
–

Total liabilities

56,556

48,861

1Adjusted prior-year figures.
2FVPL: Fair Value through P&L; FVOCI: Fair Value through OCI; AmC: Amortized Cost. The measurement categories are described in detail in Note 1. The amounts determined using valuation
techniques with unobservable inputs (Level 3 of the fair value hierarchy) correspond to the difference between the total fair values of the two hierarchy levels listed.
3Liabilities from put options include counterparty obligations and non-controlling interests in fully consolidated partnerships (see Note 27).

200

The fair value of shareholdings in unlisted companies and of
debt instruments that are not actively traded, such as loans
received, loans granted and financial liabilities, is determined by
discounting future cash flows. Any necessary discounting takes
place using current market interest rates over the remaining
terms of the financial instruments.

The determination of the fair value of derivative financial instru-
ments is discussed in Note 31.

In 2020, there were no material reclassifications between
Levels 1 and 2 of the fair value hierarchy. At the end of
each reporting period, E.ON assesses whether there might
be grounds for reclassification between hierarchy levels.

The input parameters of Level 3 of the fair value hierarchy for
equity investments are specified taking into account economic
developments and available industry and corporate data (see
also Note 1). A hypothetical 10-percent increase or decrease in
these key internal valuation parameters as of the balance sheet
date would lead to a theoretical change in market values of
+€23 million.

The fair values determined using valuation techniques for financial
instruments carried at fair value are reconciled as shown in the
following table:

Fair Value Hierarchy Level 3 Reconciliation

€ in millions

Equity investments

Derivative financial
instruments

Total

Jan. 1,
2020

389

474

Purchases
(including
additions)

Sales
(including
disposals)

Settlements

Gains/
Losses in
income
statement

Transfers

into
Level 3

out of Level
3

Gains/
Losses in
OCI

Dec. 31,
2020

–

-2

–

-2

–

-16

-19

-54

-73

–

-5

–

-5

428

443

The extent to which the offsetting of financial assets is covered
by netting agreements is presented in the following tables:

Netting Agreements for Financial Assets and Liabilities as of December 31, 2020

€ in millions

Financial assets

Trade receivables

Interest-rate and currency derivatives

Commodity derivatives

Total

Financial liabilities

Trade payables

Interest-rate and currency derivatives

Commodity derivatives

Total

Gross
amount

Amount
offset

Carrying
amount

Conditional
netting
amount
(netting
agreements)

Financial
collateral
received/
pledged

7,615

1,532

2,131

11,278

7,927

3,179

1,506

12,612

–

387

–

387

7,615

1,532

1,744

10,891

7,927

3,179

1,119

12,225

–

769

–

542

Net value

7,615

1,524

972

10,111

7,927

2,203

445

–

976

132

1,108

10,575

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

201

Netting Agreements for Financial Assets and Liabilities as of December 31, 2019

€ in millions

Financial assets

Trade receivables

Interest-rate and currency derivatives

Commodity derivatives

Total

Financial liabilities

Trade payables

Interest-rate and currency derivatives

Commodity derivatives

Total

Gross
amount

Amount
offset

Carrying
amount

Conditional
netting
amount
(netting
agreements)

Financial
collateral
received/
pledged

8,250

1,585

2,378

12,213

8,709

2,802

2,865

14,376

–

678

–

678

8,250

1,585

1,700

11,535

8,709

2,802

2,187

13,698

–

1,064

–

1,029

–

461

178

639

Net value

8,250

1,517

626

10,393

8,709

2,341

980

12,030

The E.ON Group did not net interest-rate and currency derivatives
and non-derivative financial instruments. Compulsory netting
is carried out for commodity derivatives if the netting criteria
pursuant to IAS 32.42 are met cumulatively.

Transactions and business relationships resulting in the deriva-
tive financial receivables and liabilities presented are largely
concluded on the basis of standard contracts that permit the
conditional netting of open transactions in the event that a
counterparty becomes insolvent.

The netting agreements are derived from netting clauses con-
tained in master agreements including those of the International
Swaps and Derivatives Asso ciation (ISDA), the German Master
Agreement for Financial Derivatives Trans actions (DRV), the
European Federation of Energy Traders (EFET) and the Financial
Energy Master Agreement (FEMA).

Collateral pledged to and received from financial institutions in
relation to these liabilities and assets limits the utilization of
credit lines in the fair value measurement of interest-rate and
currency derivatives, and is shown in the table. The collateral for
commodity derivatives presented in the table relates to variation
margin payments.

202

Cash
outflows
2021

Cash
outflows
2022

Cash
outflows
2023–2025

Cash
outflows
from 2026

3,169

3,229

8,152

20,787

–

139

510

274

–

4,092

7,927

8,402

2,167

2,148

20,644

24,736

–

426

–

199

1,087

–

341

1,942

3,705

9,440

23,085

–

712

728

–

913

935

4,433

10,375

–

2,994

3,090

26,175

Cash
outflows
2020

Cash
outflows
2021

Cash
outflows
2022–2024

Cash
outflows
from 2025

3,276

3,427

7,455

20,102

946

454

279

5,013

8,709

5,531

1,724

1,703

17,667

22,680

–

415

–

1,017

–

139

1,909

–

3,889

8,549

22,158

–

673

318

1,012

4,901

–

689

–

692

9,241

–

2,687

2,770

24,928

The following two tables illustrate the contractually agreed
(undiscounted) cash outflows arising from the liabilities included
in the scope of IFRS 7:

Cash Flow Analysis as of December 31, 2020

€ in millions

Bonds

Commercial paper

Bank loans/Liabilities to banks

Lease obligations

Other financial liabilities

Financial guarantees

Cash outflows for financial liabilities

Trade payables

Derivatives (with/without hedging relationships)

Put option liabilities under IAS 32

Other operating liabilities

Cash outflows for trade payables and other operating liabilities

Cash outflows for liabilities within the scope of IFRS 7

Cash Flow Analysis as of December 31, 2019 1

€ in millions

Bonds

Commercial paper

Bank loans/Liabilities to banks

Lease obligations

Other financial liabilities

Financial guarantees

Cash outflows for financial liabilities

Trade payables

Derivatives (with/without hedging relationships)

Put option liabilities under IAS 32

Other operating liabilities

Cash outflows for trade payables and other operating liabilities

Cash outflows for liabilities within the scope of IFRS 7

1Adjusted prior-year figures.

Financial guarantees with a total nominal volume of €8 million
(2019: €8 million) were issued to companies outside of the
Group. This amount is the maximum amount that E.ON would
have to pay in the event of claims on the guarantees. E.ON has
recognized a liability for this in the amount of €8 million (2019:
€8 million).

For financial liabilities that bear floating interest rates, the rates
that were fixed on the balance sheet date are used to calculate
future interest payments for subsequent periods as well. Finan-
cial liabilities that can be terminated at any time are assigned
to the earliest maturity band in the same way as put options that
are exercisable at any time.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

203

In gross-settled derivatives (usually currency derivatives and
commodity derivatives), outflows are accompanied by related
inflows of funds or commodities.

The net gains and losses from financial instruments by IFRS 9
category are shown in the following table:

Net Gains and Losses by Category 1

€ in millions

Financial assets Amortized Cost

Financial liabilities Amortized Cost

Fair value through P&L

Fair value through OCI

Total

1Adjusted prior-year figures.

2020

-275

-449

175

-10

-559

2019

150

-1,059

-628

-1,496

The net result of the category fair value through OCI results in
particular from interest income and proceeds from the sale of
fair value through OCI securities.

In addition to impairments of financial assets, net gains and
losses in the amortized cost category are due primarily to interest
income from financial assets and liabilities, effects from the
currency translation of financial liabilities, as well as effects from
the carrying forward of standstill obligations recognized as a
liability for the acquisition of additional shares in subsidiaries
that have already been consolidated.

The net gains and losses in the fair value through profit or loss
measurement category encompass both the changes in fair value
of equity instruments, from derivative financial instruments and
gains and losses on realiza tion.

Impairments of Financial Assets

Impairment losses on financial assets must be recognized not
only for losses already incurred but also for expected future
credit losses. E.ON takes into account expected future credit
losses of financial assets carried at amortized cost, financial
assets measured at fair value through other comprehensive
income, and receivables from finance leases.

For trade receivables, expected credit losses are recognized over
their entire residual term using the simplified method (lifetime
ECL trade receivables). For other financial assets, E.ON first deter-
mines the credit loss expected within the first twelve months
(stage 1—12 month ECL). In derogation of this, in the event of
a significant increase in the default risk, the expected credit loss
over the entire residual term of the respective instrument is
recognized (stage 2—lifetime ECL). A significant increase in the
default risk is assumed if the internally determined counterparty
risk has been downgraded by at least three levels since initial
recognition. If there are objective indications of an actual default,
an individual impairment loss must be recognized on the income
statement (stage 3—losses already incurred).

E.ON distinguishes between two approaches when calculating
expected future credit losses. If external or internal rating infor-
mation is available, the expected credit loss is determined on
the basis of this data. If no rating information is available, E.ON
determines default ratios on the basis of historical default rates,
taking into account forward-looking information on economic
developments. In the E.ON Group, a default or the classification
of a receivable as uncollectible is assumed after 180 or 360 days,
depending on the region.

In 2020, valuation allowances for trade receivables changed as
shown in the following table:

Valuation Allowances for Trade Receivables 1

€ in millions

Balance as of January 1

Disposals

Write-downs

Other 2

Balance as of December 31

2020

-962

-328

-6

-1,239

2019

-805

136

-288

-5

-962

1Adjusted prior-year figures.
2The item Other includes currency translation differences.

There were no significant changes in valuation allowances in
2020 for other financial assets measured at amortized cost or at
fair value through other comprehensive income, or for receivables
from finance leases.

204

The default risks for financial assets for which rating information
is available can be found in the following table for each rating
grade and separately according to the stages of impairment
existing in 2020:

Credit Risk Exposure for Financial Assets for Which Rating Information Is Available as of December 31, 2020 1

Stage 1 financial assets

Trade receivables

2020

6,061

–

6,130

2019

6,791

–

6,859

2020

2,607

152

605

3,364

2019

1,682

622

2,396

€ in millions

Gross carrying amount investment grade

Gross carrying amount non investment grade

Gross carrying amount default grade

Total

1Adjusted prior-year figures.

The default risks for trade receivables for which no rating infor-
mation is available and the amount of expected credit losses
over the remaining term are shown in the following matrix for
each maturity class:

Credit Risk Exposure for Trade Receivables for Which No Rating Information Is Available as of December 31, 2020 1

€ in millions

Not past-due

Past-due by

up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
more than 180 days including specific valuation allowances

Total

1Adjusted prior-year figures.

Risk Management

Principles
The prescribed processes, responsibilities and actions concerning
financial and risk management are described in detail in internal
risk management guidelines applicable throughout the Group. The
units have developed additional guidelines of their own within
the confines of the Group’s overall guidelines. To ensure efficient
risk management at the E.ON Group, the Trading (Front Office),
Financial Controlling (Middle Office) and Financial Settlement
(Back Office) departments are organized as strictly separate units.
Risk steering and reporting in the areas of interest rates, curren-
cies and credit for banks and liquidity management is performed
by the Financial Controlling department (in the credit area, also
in part by Counterparty Risk Management), while risk steering
and reporting in the area of commodities and in the credit area
for industrial enterprises is performed at Group level by a sepa-
rate department.

Gross carrying amount

Lifetime-ECL

2020

3,681

1,594
312
101
77
172
932

5,275

2019

5,279

1,427
389
130
75
188
645

6,706

2020

2019

952
14
11
10
31
886

987

699
18
10
10
29
632

740

E.ON uses a Group-wide treasury, risk management and report-
ing system. This system is a standard information technology
solution that is fully integrated and is continuously updated.
The system is designed to provide for the analysis and monitor-
ing of the E.ON Group’s exposure to liquidity, foreign exchange
and interest risks. On a Group-wide basis, Financial Controlling/
Counterparty Risk Management monitors and steers credit
risks for banks, and Counterparty Risk Management monitors
and steers corporates of a certain materiality. These activities
are carried out each using a standard software package.

Separate Risk Committees/Steering Groups are responsible for
the maintenance and further development of the strategy set by
the Management Board of E.ON SE with regard to commodity,
treasury and credit risk management policies.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

205

Foreign Exchange Risk Management
E.ON SE is responsible for controlling the currency risks to
which the E.ON Group is exposed.

Because it holds interests in businesses outside of the euro area,
currency translation risks arise within the E.ON Group. Fluctua-
tions in exchange rates produce accounting effects attributable
to the translation of the balance sheet and income statement
items of the foreign consolidated Group companies included in
the Consolidated Financial Statements. Translation risks are
hedged through borrowing in the corresponding local currency,
which may also include shareholder loans in foreign currency.
In addition, derivative and non-derivative financial instruments
are employed as needed. The hedges qualify for hedge accounting
under IFRS as hedges of net investments in foreign operations.
The Group’s translation risks are reviewed at regular intervals
and the level of hedging is adjusted whenever necessary. The
respective debt factor, net assets and the enterprise value
denominated in the foreign currency are the principal criteria
governing the level of hedging.

The E.ON Group is also exposed to operating and financial
transaction risks attributable to foreign currency transactions.
The subsidiaries are respon sible for managing their operating
currency risks and are generally required to hedge their currency
risks through E.ON SE. E.ON SE coordinates hedging throughout
the Group companies and makes use of external derivatives as
needed. It may either directly close out foreign currency positions
that have been tendered, in whole or in part, through external
transactions, or keep the position open within approved limits.
The one-day value-at-risk (95 percent confidence) for transactional
foreign currency positions totaled €0.5 million as of December 31,
2020 (2019: €1.1 million).

Financial transaction risks result from payments originating
from financial receivables and payables. They are generated both
by external financing in a variety of foreign currencies, and by
shareholder loans from within the Group denominated in foreign
currency. Financial transaction risks are generally hedged.

1. Liquidity Management
The primary objectives of liquidity management at E.ON consist
of ensuring ability to pay at all times, the timely satisfaction of
contractual payment obligations and the optimization of costs
within the E.ON Group.

Cash pooling and external financing are largely centralized at
E.ON SE and certain financing companies. Funds are provided
to the other Group companies as needed on the basis of an
“in-house banking” solution.

E.ON SE determines the Group’s financing requirements on the
basis of short- and medium-term liquidity planning. The financing
of the Group is controlled and implemented on a forward-looking
basis in accordance with the planned liquidity requirement or
surplus. Relevant planning factors taken into consideration include
operating cash flow, capital expenditures, divestments, margin
payments and the maturity of bonds and commercial paper.

2. Price Risks
In the normal course of business, the E.ON Group is exposed to
risks arising from price changes in foreign exchange, interest
rates, commodities and asset management. These risks create
volatility in earnings, equity, debt and cash flows from period
to period. E.ON has developed a variety of strategies to limit or
eliminate these risks, including the use of derivative financial
instruments, among others.

3. Credit Risks
E.ON is exposed to credit risk in its operating activities and
through the use of financial instruments. Uniform credit risk
management procedures are in place throughout the Group to
identify, measure and steer credit risks.

The following discussion of E.ON’s risk management activities
and the estimated amounts generated from value-at-risk (“VaR”)
and sensitivity analyses are “forward- looking statements” that
involve risks and uncertainties. Actual results could differ mate-
rially from those projected due to actual, unforeseeable develop-
ments in the global financial markets. The methods used by the
Company to analyze risks should not be considered forecasts of
future events or losses. For example, E.ON faces certain risks that
are either non-financial or non-quantifiable. Such risks princi-
pally include country risk, oper ational risk, regulatory risk and
legal risk, which are not represented in the following analyses.

206

Interest Risk Management
E.ON is exposed to profit risks arising from floating-rate financial
liabilities. Positions based on fixed interest rates, on the other
hand, are subject to changes in fair value resulting from the
volatility of market rates. E.ON seeks a specific mix of fixed-
interest and floating-rate debt over time. This is influenced,
among other factors, by the type of business model, existing
liabilities as well as the regulatory framework in which E.ON
operates. To manage the interest rate position, several instru-
ments, including derivatives, are deployed.

Since the spinoff of Uniper, E.ON has established procurement
capabilities for its sales business and thus ensured market access
for E.ON’s remaining energy production. In the normal course
of business of the underlying energy production and retail sales
activities, E.ON’s individual management units are exposed to
uncertain commodity market prices, which impacts operating
gains and costs. All external trading on commodity markets
must be related to reducing open commodity positions and be
undertaken in strict accordance with approved commodity
hedging strategies.

With interest rate derivatives included, the share of financial
liabilities with floating interest rates was 10 percent as of
December 31, 2020 (2019: 10 percent). Under otherwise
unchanged circumstances, the volume of financial liabilities with
fixed interest rates, which amounted to €24.5 billion at year-end
2020, would decline to €21.8 billion in 2021 and 2022. The
effective interest rate duration of the financial liabilities, includ-
ing interest rate deriv atives, was 9.4 years as of December 31,
2020 (2019: 10.1 years). The volume-weighted average interest
rate of the financial liabilities, including interest rate deriv atives,
was 3.1 percent as of December 31, 2020 (2019: 3.8 percent).

As of December 31, 2020, the E.ON Group held interest rate
derivatives with a nominal value of €4,320 million (2019:
€4,329 million).

A sensitivity analysis was performed on the Group’s short-term
floating-rate borrowings, including hedges of both foreign
exchange risk and interest risk. This measure is used for internal
risk controlling and reflects the economic position of the E.ON
Group. A one-percentage-point upward or downward change in
interest rates (across all currencies) would raise or lower interest
charges by ±€69.1 million (2019: ±€59.3 million) in the subse-
quent fiscal year.

Commodity Price Risk Management
The E.ON portfolio of physical assets, long-term contracts
and end-customer sales is exposed to substantial risks from
fluc tuations in commodity prices. The principal commodity
prices to which E.ON is exposed relate to electricity, gas, green
and emission certificates.

The objective of commodity risk management is to transact
through physical and financial contracts to optimize the value
of the portfolio while reducing the potential negative deviation
from target EBIT.

Due to the decentralized governance approach and the primary
focus on procurement and purely hedging transactions, the
allocation of risk capital is no longer necessary. The processes
and operational management models within the trading system
are monitored by the local market risk teams and centrally
managed by the Risk Management department. At the end of
2019, the open position from the procurement on the markets
in Germany, the UK, the Czech Republic, Sweden, Romania,
Hungary and the innogy companies for the reporting period from
2020 to 2022 was not more than 4,100 GWh per commodity
in each case. The biggest drivers primarily relate to the special
market conditions in Romania, where hedging activities are
carried out within the approved commodity hedging strategy.

As of December 31, 2020, the E.ON Group primarily held elec-
tricity and gas derivatives with a nominal value of €24,662 million
(2019: €32,831 million).

A key foundation of the commodity risk management system is
the Group-wide Commodity Risk Policy and the corresponding
internal policies of the units. These specify the control principles
for commodity risk management, minimum required standards
and clear management and operational responsibilities.

Commodity risks at the innogy distribution companies are
hedged in accordance with the hedging guidelines of innogy SE.
Commodity risks are hedged using limits. Policies applicable to the
entire Group specify clear structures and processes for handling
commodity risks. They are consistent with the basic requirements
for commodity risk management within the E.ON Group. The
steering approach was harmonized for all innogy portfolios that
fall within the central governance of E.ON SE in the fourth quar-
ter of 2020.

Commodity exposures and risks are reported across the Group
on a monthly basis to the members of the Risk Committee for
both the E.ON and the innogy portfolios. A report on complex
weather risks is prepared once each quarter.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

207

Credit Risk Management
In order to minimize credit risk arising from operating activities
and from the use of financial instruments, the Company enters
into transactions only with counterparties that satisfy the Com-
pany’s internally established minimum requirements. Maximum
credit risk is confined by credit limits based on internal and (where
available) external credit ratings. The setting and monitoring of
credit limits is subject to certain minimum requirements, which
are based on Group-wide credit risk management guidelines.
Long-term operating contracts and asset management trans-
actions are not comprehensively included in this process. They
are monitored separately at the level of the responsible units.

In principle, each Group company is responsible for managing
credit risk in its operating activities. Depending on the nature of
the operating activities and the credit risk, additional credit risk
monitoring and controls are performed both by the units and
by Corporate Headquarters. Regular reports on credit limits,
including their utilization, are submitted to the Risk Committee.
Intensive, standardized monitoring of quantitative and qualitative
early- warning indicators, as well as close monitoring of the
credit quality of counterparties, enable E.ON to act early in order
to minimize risk.

To the extent possible, collateral is negotiated with counterparties
for the purpose of reducing credit risk. Accepted as collateral
are guarantees issued by the respective parent companies, letters
of comfort or evidence of profit and loss transfer agreements
in combination with letters of awareness. To a lesser extent, the
Company also requires bank guarantees and deposits of cash
and securities as collateral to reduce credit risk. Risk-manage-
ment collateral was accepted in the amount of €1,474 million.

The levels and details of financial assets received as collateral
are described in more detail in Notes 19 and 27.

Derivative transactions are generally executed on the basis of
standard agreements that allow for the netting of all open
transactions with individual counterparties. To further reduce
credit risk, bilateral margining agreements are entered into
with selected counterparties. Limits are imposed on the credit
and liquidity risk resulting from bilateral margining agreements
and exchange clearing.

There is no credit risk with respect to the exchange-traded for-
ward and option contracts with an aggregate nominal value of
€2,183 million as of December 31, 2020 (2019: €1,073 million).
For the remaining financial instruments, the maximum risk of
default is equal to their nominal amounts.

At E.ON, liquid funds are normally invested at banks with good
credit ratings, in money market funds with first-class ratings
or in short-term securities (for example, commercial paper) of
issuers with strong credit ratings. Bonds of public and private
issuers are also selected for investment. Group companies that
for legal reasons are not included in the cash pool invest money
at leading local banks. Standardized credit assessment and
limit-setting is complemented by daily monitoring of CDS levels
at the banks and at other significant counterparties.

Asset Management

For the purpose of financing long-term payment obligations,
including those relating to asset retirement obligations (see
Note 26) and cash investments, financial investments totaling
€3.0 billion (2019: €3.5 billion) were held predominantly by
German E.ON Group companies as of December 31, 2020. The
decrease of €0.5 billion is primarily related to the steady reduc-
tion of a subportfolio.

These financial assets are invested on the basis of an accumula-
tion strategy (total-return approach), with investments broadly
diversified across the various asset classes, for example the
money market, bond and equity asset classes, as well as alter-
native asset classes like real estate. The majority of the assets are
held in investment funds managed by external fund managers.
Corporate Asset Management at E.ON SE, which is part of the
Company’s Finance Department, is responsible for continuous
monitoring of overall risks and those concerning individual fund
managers. The three-month VaR with a 98-percent confidence
interval for these financial assets was €218 million (2019:
€109 million). The increase resulted primarily from the signifi-
cant turbulence on the capital market in relation to the corona-
virus crisis.

As of December 31, 2020, Versorgungskasse Energie VVaG was
still in liquidation (VKE i. L.); at that date, it managed €79.3 mil-
lion in financial investments. The company was deconsolidated
on June 30, 2019.

208

As of the balance sheet date of December 31, 2020, right-of-use
assets in the amount of €2,543 million (2019: €2,582 million)
are offset by lease liabilities with a present value of €2,615 mil-
lion (2019: €2,609 million). This is recognized under financial
liabilities (see Note 27); the short-term portion of the lease lia-
bilities totals €342 million (2019: €329 million). The maturity
structure of the future payment obligations from leases is pre-
sented in Note 32.

Due to the simplification provisions used, the recognition of a
right-of-use asset is not necessary for low-value leases and
leases with a term of less than twelve months. Instead, a lease
expense is recognized in these cases. The following amounts
are recognized in the income statement in connection with
leases in the fiscal year:

E.ON as Lessee—Effects within the Income Statement 1

€ in millions

2020

2019

Expenses from short-term leases
(<12 months)

Expense for low-value leases not included
in above short-term leases

Variable lease payments

Interest expense from leasing

Lease income sublease

Gain/Loss from sale and leaseback
transactions

1Adjusted prior-year figures.

154

–

The liabilities from short-term agreements with a term of less
than twelve months entered into for the next fiscal year do not
vary materially from the expenses of the current fiscal year.
The increase in interest expense is mainly due to the fact that
the innogy activities were only included on a pro rata basis in
the past reporting year.

Cash outflows from lease agreements totaled €523 million
(2019: €377 million) in the fiscal year; this will be allocated to
operating cash flow in the amount of €191 million (2019:
€85 million). This includes the lease expense for short-term and
low-value leases as well as the expense from variable lease
payments and interest expense for the period. Payments allo-
cated to payments for the lease liability are recognized in cash
flows from financing activities in the amount of €332 million
(2019: €292 million).

(33) Leasing

E.ON as Lessee

Transactions in which E.ON is the lessee have been recognized
under the right-of-use model pursuant to IFRS 16. The tables in
Note 15 present the changes in the right-of-use assets by asset
class in the reporting year. The conclusion of new agreements,
mainly in the network sector, and the presentation of changes in
estimates and modifications resulted in an addition of €415 million
(2019: €286 million). Impairments of right-of-use assets in
the amount of €563 million (2019: €220 million) are allocated
among the asset classes as follows:

Right-of-use Assets 1

€ in millions

Land and buildings

Networks

Storage and production capacities

Technical equipment and machinery

Fleet, office and business equipment

1Adjusted prior-year figures.

Accumulated
depreciation
2020

Accumulated
depreciation
2019

204

274

100

The majority of this increase is attributable to the fact that the
innogy activities were only included on a pro rata basis in the
2019 fiscal year (from September 18, 2019, the date on which
control was achieved), while in 2020 they will be included for a
full twelve months.

E.ON operates as a lessee in the areas of networks, land and
buildings, and vehicle fleets, in particular. To ensure operative
flexibility, E.ON enters into agreements relating to the exten-
sion and termination of real estate leases, in particular. In deter-
mining the term of the contract, E.ON considers all facts and
circumstances that have an economic influence on the exercise
of the extension option or the non-exercise of the termination
option. In the determination of the lease liability, and correspond-
ingly, of the right-of-use assets, all reasonably certain cash
outflows are taken into consideration. As of December 31, 2020,
potential future cash outflows in the amount of €187 million
(2019: €322 million) were not included in the lease liability as it
is not reasonably certain that the leases will be renewed or not
terminated. Variable lease payments occur in only immaterial
amounts and E.ON does not issue residual value guarantees.
Leases in which E.ON is the lessee but where the lease has not yet
begun result in potential future cash outflows of €236 million
(2019: €556 million). The existing lease liabilities do not contain
any covenant clauses that are linked to financial ratios.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

209

E.ON as Lessor

E.ON enters into leases as lessor to a limited extent. Finance
leases include technical equipment and machinery, in particular
generation plants, that has been transferred to customers for
use. Operating leases include assets that have been transferred
for use, in particular real estate, heat and electricity generation
plants and lines. There are no material risks in connection with
rights retained to the assets temporarily transferred for use,

with the result that risk management strategies, in particular,
are not necessary. Residual-value guarantees are only entered
into on an individual basis for purposes of additional hedging.

The present value of minimum lease payments is recognized
under receivables from finance leases (see Note 18). The short-
term portion totals €44 million (2019: €50 million). There were
no material changes to net investments in the period under
review. The nominal and present values of the lease payments
had the following maturities:

E.ON as Lessor—Finance Leases

€ in millions

Due within 1 year

Due in 1 to 2 years

Due in 2 to 3 years

Due in 3 to 4 years

Due in 4 to 5 years

Due in more than 5 years

Total

Undiscounted
lease payments

Unrealized
interest income

Discounted
non-guaranteed
residual value

Present value
of minimum
lease payments

2020

2019

2020

2019

2020

2019

2020

2019

142

393

143

484

120

129

–

115

289

131

370

The following effects from activity as a lessor are recognized for
the period under review:

leases with variable lease payments. Payments recognized as
financing income from net investments increase operating cash
flow.

E.ON as Lessor—Effects within the Income
Statement

The following payments are expected from existing operating
leases:

€ in millions

Finance lease

Gain/loss on the disposal of assets
Financial income from net investments
Income of variable lease payments

Operating lease

Income from leasing
thereof Income of variable lease
payments

2020

2019

–
29
2

–
11
1

–

Results from the disposal of assets were recognized in income.
Cash flows from operating leases are allocated to cash flow
before interest and taxes. This also applies to flows from finance

E.ON as Lessor—Operating Leases

€ in millions

Due within 1 year

Due in 1 to 2 years

Due in 2 to 3 years

Due in 3 to 4 years

Due in 4 to 5 years

Due in more than 5 years

Total

Undiscounted lease payments

2020

2019

338

123

447

210

Liabilities of E.ON payable to related companies as of Decem-
ber 31, 2020, include €49 million (2019: €60 million) in trade
payables and shareholder loans to operators of jointly-owned
nuclear power plants. These shareholder loans bear interest
at 1.0 percent (2019: 1.0 percent) and have no fixed maturity.
E.ON continues to have in place with these power plants a
cost-transfer agreement and a cost-plus-fee agreement for the
procurement of electricity. The settlement of such liabilities
occurs mainly through clearing accounts.

Under IAS 24, compensation paid to key management personnel
(members of the Management Board and of the Super visory
Board of E.ON SE) must be disclosed.

The total expense for 2020 for members of the Management
Board amounted to €8.8 million (2019: €10.3 million) in short-
term benefits and €2.5 million (2019: €2.6 million) in post-
employment benefits. The cost of post-employment benefits
is equal to the service and interest cost of the provisions for
pensions. Additionally taken into account in 2020 were actuarial
losses of €2.4 million (2019: actuarial losses of €1.4 million).

The expense determined in accordance with IFRS 2 for existing
commitments arising from share-based payment in 2020 was
€5.1 million (2019: €5.4 million).

Provisions for these commitments amounted to €13.4 million
as of December 31, 2020 (2019: €14.5 million).

The members of the Supervisory Board received a total of
€5.3 million for their activity in 2020 (2019: €4.3 million).
Employee representatives on the Supervisory Board were paid
compensation under the existing employment contracts
with subsidiaries totaling €0.8 million (2019: €0.6 million).

Detailed, individualized information on compensation can be
found in the Compensation Report on pages 80 through 97.

(34) Transactions with Related Parties

E.ON exchanges goods and services with a large number of
companies as part of its continuing operations. Some of these
companies are related parties, including associated companies
accounted for under the equity method and their subsidiaries.
Receivables and payables consist primarily of lease obligations
from leaseback models and trade receivables. Joint ventures
and subsidiaries that are not fully consolidated continue to be
accounted for as associated companies. Transactions with related
parties in the reporting year and in the previous year are sum-
marized as follows:

Related-Party Transactions

€ in millions

Income

Associated companies
Joint ventures
Other related parties

Expenses

Associated companies
Joint ventures
Other related parties

Receivables

Associated companies
Joint ventures
Other related parties

Liabilities

Associated companies
Joint ventures
Other related parties

Provisions

Associated companies
Other related parties

2020

1,575
1,058
151
366

1,288
531
143
614

496
236
17
243

1,790
660
104
1,026

27
25
2

2019

676
542
38
96

560
216
107
237

627
456
9
162

1,278
726
177
375

31
26
5

In 2020, E.ON generated income from transactions with related
companies through the delivery of gas and electricity to distrib-
utors and municipal entities, especially municipal utilities. The
relationships with these entities do not generally differ from those
that exist with municipal entities in which E.ON does not have
an interest. Expenses from transactions with related companies
are generated mainly through electricity and gas deliveries as
well as through management fees, IT services and third-party
services.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

211

(35) Segment Reporting

Segment Information

United Kingdom
The segment comprises sales activities and customer solutions
in the UK.

Led by its Corporate Headquarters in Essen, Germany, the E.ON
Group comprises the seven reporting segments described below,
and the Non-Core Business and Corporate Functions/Other, all
of which are reported here in accordance with IFRS 8. The com-
bined segments, which are not separately reportable, in the
East-Central Europe/Turkey Energy Networks unit and the Cus-
tomer Solutions Other unit are of subordinate importance and
have similar economic characteristics with respect to customer
structure, products and distribution channels.

Netherlands/Belgium
The segment comprises sales activities and Customer Solutions
in the Netherlands and Belgium.

Other
This segment combines sales activities and the corresponding
Customer Solutions in Sweden, Italy, the Czech Republic, Hungary,
Romania and Poland. The innovative solutions business (such as
electromobility) is also included here.

Since January 1, 2020, the activities of innogy are no longer
directed and presented as an independent segment, but instead
integrated into the business areas Energy Networks, Customer
Solutions and Group Management/Other. The innogy network
businesses were transferred to the Energy Networks division. The
sale of electricity and gas as well as new customer solutions at
innogy, such as services related to electromobility, are reported
under Customer Solutions. The Corporate Management/Other
area comprises the holding functions and internal service pro-
viders of innogy. In addition to the allocation of the businesses
remaining after the transfer of significant operations to RWE
reported under Renewables, the heating business previously
reported under Customer Solutions Other was transferred to the
Customer Solutions Germany segment and three E.ON Business
Solutions companies were transferred from Customer Solutions
Other to the Customer Solutions UK segment. The prior-year
figures were adjusted accordingly, where necessary.

Energy Networks
Germany
This segment combines the electricity and gas distribution
networks and all related activities in Germany.

Sweden
This segment comprises the electricity networks businesses in
Sweden.

East-Central Europe/Turkey
This segment combines the distribution network activities in the
Czech Republic, Hungary, Romania, Poland, Croatia, Slovakia
and Turkey.

Customer Solutions
Germany
This segment consists of activities that supply our customers in
Germany with electricity and gas and the distribution of specific
products and services in areas for improving energy efficiency
and energy independence. This item also includes the heating
business in Germany.

Renewables
The Renewables segment combined the Group’s activities for
the production of wind power plants (onshore and offshore) as
well as solar farms.

In connection with the takeover of innogy, E.ON will transfer the
majority of its Renewables business to RWE. Since June 30,
2018, the transferred businesses were reported as a discontinued
operation in E.ON’s consolidated financial statements in accor-
dance with IFRS 5 (see Note 5 for further information) and
deconsolidated as of September 18, 2019; accordingly, disclo-
sures for the segment are only included up to this date.

For internal management purposes, these activities therefore
continued to be fully included in the relevant key performance
indicators until they are deconsolidated. The presentation of key
performance indicators and revenue in segment reporting there-
fore also includes the components attributable to discontinued
operations in the Renewables business. Recon ciliations of these
figures to the information in the E.ON Group’s consolidated
income statement and consolidated statement of cash flows
are provided on pages 212, 213 and 215.

The businesses in the Renewables segment remaining after the
transfer of material components to RWE were reported under
Energy Networks Germany, Customer Solutions UK and Corpo-
rate Functions/Other.

Non-Core Business
Non-Core Business comprises the non-strategic activities of
the E.ON Group. This includes the operation and retirement of
the German nuclear power plants, which are managed by the
PreussenElektra operating unit, and the electricity generation
business in Turkey.

Corporate Functions/Other
Corporate Functions/Other contains E.ON SE itself and the
interests held directly by E.ON SE. Additional information
regarding the Uniper Group is provided in Note 4.

212

Financial Information by Business Segment 1

Energy Networks

Germany

Sweden

ECE/Turkey

Germany

United Kingdom

Customer Solutions

Netherlands/
Belgium

Other

Renewables 6

PreussenElektra

Generation Turkey

Other 5

Consolidation

E.ON Group 6

Non-Core Business

Corporate Functions/

€ in millions

External sales

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

10,310

6,565

884

1,018

1,622

875

20,964

12,345

13,989

9,829

2,836

990

8,359

7,923

Intersegment sales

4,253

2,596

1,210

1,038

1,586

561

-184

123

481

329

Sales 2

14,563

9,161

889

1,024

2,832

1,913

22,550

12,906

13,993

9,645

2,959

991

8,840

8,252

Depreciation and
amortization 3

-1,446

-858

-158

-153

-342

-282

Adjusted EBIT

2,182

1,455

371

539

Equity-method
earnings 4

Operating cash flow
before interest and taxes

Investments

224

111

–

3,614

1,745

2,365

1,583

612

353

718

314

1,016

668

700

142

-134

412

-119

308

-130

-129

581

238

328

168

-256

117

-138

-106

-1

467

331

-72

115

-17

112

-216

-165

286

395

111

208

441

507

119

890

487

1Because of the changes in our reporting, the prior-year figure was adjusted accordingly.
2Adjustment of prior-year figures in the context of “failed-own-use” accounting regarding presentation of sales, cost of materials, other operating income and other operating expenses with no impact on earnings.
3Adjusted for non-operating effects.
4Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in income/loss from
companies accounted for using the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.
5Because of subsequent purchase price adjustments by RWE, the Corporate Functions/Other segment recorded negative investments.
6Operating business including the divisions in the Renewables segment reclassified as discontinued operations in accordance with IFRS 5 and deconsolidated as of September 18, 2019.

The following table shows the reconciliation in segment report-
ing of sales to sales in the Consolidated Statement of Income:

Reconciliation of Sales

€ in millions

Sales

1Deconsolidated as of September 18, 2019.

E.ON Group

Reclassified businesses
at Renewables 1

2020

2019

60,944

41,284

2020

–

2019

-481

E.ON Group
(continuing operations)

2020

2019

60,944

40,803

–

518

430

948

-271

301

201

563

2020

1,388

–

2019

1,174

–

1,388

1,174

-512

383

489

275

-251

292

313

207

–

591

2,111

2,702

-122

-350

-511

-278

737

784

-89

-303

-577

1,329

-9,773

-9,772

–

60,944

41,284

-5,514

60,944

41,284

-1

-2

-1

-3,129

-2,344

3,776

3,220

509

495

5,948

4,171

4,407

5,492

Notes

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

213

Financial Information by Business Segment 1

Energy Networks

Customer Solutions

Non-Core Business

Germany

Sweden

ECE/Turkey

Germany

United Kingdom

Other

Renewables 6

PreussenElektra

Generation Turkey

Netherlands/

Belgium

Corporate Functions/
Other 5

Consolidation

E.ON Group 6

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

–

518

430

948

-271

301

201

563

€ in millions

External sales

Depreciation and

amortization 3

Equity-method

earnings 4

Operating cash flow

10,310

6,565

884

1,018

1,622

875

20,964

12,345

13,989

9,829

2,836

990

8,359

7,923

Intersegment sales

4,253

2,596

1,210

1,038

1,586

561

-184

123

481

329

Sales 2

14,563

9,161

889

1,024

2,832

1,913

22,550

12,906

13,993

9,645

2,959

991

8,840

8,252

Adjusted EBIT

2,182

1,455

371

539

-1,446

-858

-158

-153

-342

-282

-134

412

-119

308

-130

-129

224

111

–

before interest and taxes

3,614

1,745

Investments

2,365

1,583

612

353

718

314

1,016

668

581

238

328

168

-256

117

700

142

507

119

890

487

-138

-106

-1

467

331

-72

115

-17

112

-216

-165

286

395

111

208

441

1Because of the changes in our reporting, the prior-year figure was adjusted accordingly.

2Adjustment of prior-year figures in the context of “failed-own-use” accounting regarding presentation of sales, cost of materials, other operating income and other operating expenses with no impact on earnings.

3Adjusted for non-operating effects.

4Under IFRS, impairment charges on companies accounted for using the equity method and impairment charges on other financial assets (and any reversals of such charges) are included in income/loss from

companies accounted for using the equity method and financial results, respectively. These income effects are not part of adjusted EBIT.

5Because of subsequent purchase price adjustments by RWE, the Corporate Functions/Other segment recorded negative investments.

6Operating business including the divisions in the Renewables segment reclassified as discontinued operations in accordance with IFRS 5 and deconsolidated as of September 18, 2019.

2020

1,388

–

2019

1,174

–

1,388

1,174

-512

383

489

275

-251

292

313

207

2020

2019

2020

2019

2020

2019

2020

2019

–

591

2,111

2,702

-122

-350

-511

-278

737

784

-89

-303

-577

1,329

-9,773

-9,772

–

60,944

41,284

-5,514

60,944

41,284

-1

-2

-1

-3,129

-2,344

3,776

3,220

509

495

5,948

4,171

4,407

5,492

The following table shows the reconciliation in segment reporting
of the investments shown in segment reporting to the investments
of continuing operations. The latter correspond to payments for
investments reported in the Consolidated Statements of Cash
Flows.

Reconciliation of Investments

€ in millions

Investments

Reclassified businesses at Renewables 1

Investments from continuing operations

1Deconsolidated as of September 18, 2019.

2020

4,171

–

4,171

2019

5,492

-708

4,784

The following table shows the reconciliation of operating cash
flow before interest and taxes to operating cash flow from
continuing operations:

Reconciliation of Operating Cash Flow 1

€ in millions

2020

2019

Operating cash flow before interest and
taxes

Interest payments

Tax payments

Reclassified innogy business in the
Czech Republic (Operating cash flow)

Operating cash flow

Reclassified businesses at Renewables 2

Reclassified innogy business in the
Czech Republic

Operating cash flow from continuing
operations

1Adjusted prior-year figures.
2Deconsolidated as of September 18, 2019.

5,948

-714

5,313

–

-26

4,407

-740

-754

2,965

-100

-52

5,287

2,813

214

Net book gains decline significantly year-on-year. In 2020, they
mainly comprise deconsolidation gains that arose in connection
with the fulfillment of EU requirements relating to the innogy
transaction (compare pages 21 and 22 of the Combined Group
Management Report). The previous year’s figure included in
particular effects from the deconsolidation of PEGI as parent
company of Nord Stream. In addition, income from the disposal
of securities was lower than in the prior year.

Restructuring expenses were significantly lower than in the 2019
reporting period and, as in the previous year, mainly included
expenses in connection with the integration of innogy. The cur-
rent year also includes expenses for the restructuring of the UK
distribution business.

The marking to market as of the reporting date of derivatives
resulted in a positive effect of €1,128 million in the 2020 fiscal
year (prior year: -€630 million). Positive effects in the 2020
reporting period resulted primarily from hedging price fluctua-
tions, particularly in Customer Solutions, and in Group Manage-
ment/Other due to the commodity procurement for power pro-
curement units included there.

In the 2020 reporting period, impairment losses were recognized
in particular in the areas of energy networks in Hungary (mainly
due to the current restructuring of the business there), Customer
Solutions in the United Kingdom (primarily for software in
connection with the ongoing restructuring measures) and the
Netherlands/Belgium (in particular as part of the planned disposal
of the Belgian distribution business). In the prior year, impairment
losses were recognized primarily in Customer Solutions in the
United Kingdom (in particular due to the restructuring of the UK
distribution business of E.ON and innogy decided at that time).

Effects that are to be initially recognized from the subsequent
measurement of hidden reserves and charges in connection with
the innogy purchase price allocation, which is preliminary until
September 18, 2020, as well as newly recognized effects from the
measurement of financial assets in the innogy segment (which
were fully offset by the end of 2020) are presented separately.

Adjusted EBIT

Adjusted EBIT, a measure of earnings before interest and taxes
(“EBIT”) adjusted to exclude non-operating effects, is used at
E.ON for purposes of internal management control and as the
most important indicator of a business’s sustainable earnings
power.

The E.ON Management Board is convinced that adjusted EBIT is
the most suitable key figure for assessing operating performance
because it presents a business’s operating earnings independently
of non-operating factors, interest, and taxes.

Unadjusted EBIT represents the Group’s income/loss reported in
accordance with IFRS before financial results and income taxes,
taking into account the interest income/expense. To improve its
meaningfulness as an indicator of the sustainable earnings power
of the E.ON Group’s business, unadjusted EBIT is adjusted for
certain non-operating effects.

Operating earnings also include income from investment sub-
sidies for which liabilities are recognized.

The non-operating earnings effects for which EBIT is adjusted
include, in particular, non-operating interest expense/income,
income and expenses from the marking to market of derivative
financial instruments used for hedging and, where material,
book gains/losses, certain restructuring expenses, impairment
charges and reversals recognized in the context of impairment
tests on non-current assets, on equity investments in affiliated or
associated companies and on goodwill, and other contributions
to non-operating earnings. In addition, effects from the valuation
of certain provisions on the balance sheet date are disclosed in
non-operating earnings.

In addition, earnings from discontinued operations and activities
in the Renewables segment that were deconsolidated with effect
from September 18, 2019, adjusted for non-operating effects,
are also included in adjusted EBIT. Pursuant to IFRS 5, equity
carried forward from investments in discontinued operations is
to be terminated. However, this was continued within the frame-
work of internal management and was then also included in
adjusted EBIT. As with the treatment of the effects of the equity
carried forward, depreciation in discontinued operations, which
is generally to be deferred in accordance with IFRS 5, is continued
and carried forward in adjusted EBIT.

Notes
Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

215

The decrease in other non-operating earnings is attributable,
among other things, to measurement effects for repurchase obli-
gations under IAS 32 and non-current provisions, as well as real-
ized effects from hedging transactions for certain currency risks.

The following table shows the reconciliation of earnings before
interest and taxes to adjusted EBIT or adjusted EBITDA:

Reconciliation of Income before Financial Results and Income Taxes

€ in millions

Income/Loss from continuing operations before financial results and income taxes

Income/Loss from equity investments

EBIT

Non-operating adjustments
Net book gains/losses
Restructuring/cost-management expenses
Effects from market valuation derivatives
Impairments (+)/Reversals (-)
Carryforward of hidden reserves (+) and liabilities (-) from the innogy transaction1
Other non-operating earnings

Reclassified businesses of Renewables2 (adjusted EBIT)

Adjusted EBIT

Impairments (+)/Reversals (-)

Scheduled depreciation and amortization

Reclassified businesses of Renewables2 (scheduled depreciation and amortization, impairments and reversals)

Adjusted EBITDA

2020

2,883

2,901

875
-258
656
-1,128
557
802
246

–

3,776

3,102

–

6,905

2019

1,359

1,417

1,503
-366
819
630
260
317
-157

300

3,220

2,006

271

5,564

1Including the effects of retrospective changes in connection with the adjustment of the provisional recognition of the innogy acquisition (see Note 5); the previous year was adjusted accordingly.

2Deconsolidated as of September 18, 2019.

Page 35 of the Combined Group Management Report provides a
more detailed explanation of the reconciliation of adjusted EBIT
to the net income/loss reported in the Consolidated Financial
Statements.

Additional Entity-Level Disclosures

External sales by product break down as follows:

Segment Information by Product

€ in millions

Electricity

Gas

Other

Total

2020

44,871

11,340

4,733

60,944

2019

30,095

8,049

3,140

41,284

The “Other” item consists in particular of revenues generated
from services.

216

The following table breaks down external sales (by customer
and seller location), intangible assets and property, plant and
equipment, as well as companies accounted for under the equity
method, by geographic area:

Geographic Segment Information

Germany

United Kingdom

Sweden

Netherlands/
Belgium

Europe (other)

€ in millions

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

External sales by
location of customer

External sales by
location of seller

32,809

20,198

14,092

9,868

1,953

2,176

2,927

991

9,108

7,767

33,381

20,458

13,989

9,813

1,952

2,138

2,850

1,006

8,720

7,574

Intangible assets

1,582

1,634

Right-of-use assets

2,198

2,191

195

355

126

199

183

399

545

1,466

1,402

156

169

Property, plant and
equipment

Companies accounted
for under the equity
method

25,494

25,067

718

697

5,175

4,762

115

5,440

5,106

3,086

3,192

461

1,178

1,442

–

Other

2019

Total

2020

2019

284

60,944

41,284

295

60,944

41,284

3,855

4,138

2,543

2,582

36,923

35,750

–

4,383

5,232

E.ON’s customer structure resulted in a focus on the Germany
region. Aside from that, there was no major concentration in
any given geographical region or business area. Due to the large
number of customers the Company serves and the variety of

its business activities, there are no indi vidual customers whose
business volume is material compared with the Company’s total
business volume.

(36) Compensation of Supervisory Board and
Management Board

Supervisory Board

Total remuneration to members of the Supervisory Board in
2020 amounted to €5.3 million (2019: €4.3 million).

As in 2019, there were no loans to members of the Supervisory
Board in 2020.

The Supervisory Board’s compensation structure and the
amounts for each member of the Supervisory Board are
presented on page 96 and 97 in the Compensation Report.

Additional information about the members of the Supervisory
Board is provided on pages 248 and 249.

Management Board

Total compensation of the Management Board in 2020 amounted
to €14.1 million (2019: €15.6 million). This consisted of base
salary, bonuses, other compensation elements and share-based
payments.

In 2020, the members of the Management Board were granted
fourth-tranche virtual shares under the E.ON Performance Plan
(2019: third tranche of the E.ON Performance Plan) with
a value of €5.2 million (2019: €5.2 million) and a total number
of shares of 661,911 (2019: 780,815).

Total payments to former members of the Management Board
and their beneficiaries amounted to €12.8 million (2019:
€10.8 million). Provisions of €166.8 million (2019: €161.3 mil-
lion) have been established for the pension obligations to former
members of the Management Board and their beneficiaries.

As in 2019, there were no loans to members of the Management
Board in 2020.

The Management Board’s compensation structure and the indi-
vidual amounts for each member of the Management Board as
well as additional disclosures on the amounts are presented on
pages 80 through 96 in the Compensation Report.

Additional information about the members of the Management
Board is provided on page 250.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

217

(37) Subsequent Events

Disposal of Shares in Rampion Renewables Ltd.

Nuclear Power/Residual Quantities of Electricity

In January 2021, 10 TWh of residual quantities of electricity were
acquired from the operating company of the Krümmel nuclear
power plant and transferred in equal shares to the Grohnde and
Isar II nuclear power plants managed by Preussen Elektra GmbH.
This will allow the plant to continue operating until the summer
of 2021.

At the beginning of March 2021, the responsible German Fed-
eral Ministries announced that the German federal government
had reached an agreement with the four nuclear power plant
operators EnBW, E.ON/PreussenElektra GmbH, RWE and Vatten-
fall on key points concerning the payment of financial compen-
sation due to the accelerated nuclear phase-out after 2011 and
the settlement of all related legal disputes. In particular, the key
points also provide that E.ON/PreussenElektra GmbH can dispose
of the quantities of electricity from the jointly-owned Krümmel
and Brunsbüttel nuclear power plants that arithmetically corre-
spond to its share without payment, i.e., it can use them for
generation in its own power plants. This understanding will only
become effective once it has been transposed into law.

Corporate Bond Issued

In mid-January 2021, E.ON issued a corporate bond with a vol-
ume of €600 million due in December 2028 with a 0.100 percent
coupon.

In 2019, E.ON UK plc sold around 60 percent of its shares in
Rampion Renewables Ltd., Coventry, which has a stake of
around 50 percent in the UK wind farm operator Rampion Off-
shore Wind Ltd., to RWE Renewables UK Ltd., a company of the
RWE Group.

On December 29, 2020, an agreement with RWE AG and RWE
Renewables UK Ltd. was signed, under which E.ON UK plc will
also transfer its remaining 40-percent stake to RWE Renew-
ables UK Ltd. Following the occurrence of a significant part of
the conditions precedent in the first half of March 2021, the
share transfer is to be completed at the beginning of the second
quarter of 2021.

As of December 31, 2020, the investment in Rampion Renew-
ables Ltd. is recognized under “assets held for sale” as a result
of the agreement concluded.

Supplementary Agreements to the Consortium
Agreement at enviaM

Via subsidiaries, E.ON SE holds a stake of approximately 59 per-
cent in enviaM AG. Other major shareholders are two municipal
companies with a combined stake of around 37 percent. Pursu-
ant to a consortium agreement, these municipal shareholders
have had a right of tender since 2002, which could be exercised
in full or in part. This right of tender resulted in recognition as a
liability in accordance with IAS 32 in the E.ON SE consolidated
financial statements. In March 2021, a supplementary agree-
ment to the consortium agreement was negotiated, including the
lapse of this right to tender.

218

(38) List of Shareholdings Pursuant to Section 313 (2) HGB

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

100 Kilowatt Naperőmű Alfa Korlátolt Felelősségű Társaság,
HU, Budapest 2

100 Kilowatt Naperőmű Béta Korlátolt Felelősségű Társaság,
HU, Budapest 2

100 Kilowatt Naperőmű Delta Korlátolt Felelősségű Társaság,
HU, Budapest 2

100 Kilowatt Naperőmű Epszilon Korlátolt Felelősségű Társaság,
HU, Budapest 2

100 Kilowatt Naperőmű Éta Korlátolt Felelősségű Társaság,
HU, Budapest 2

100 Kilowatt Naperőmű Gamma Korlátolt Felelősségű Társaság,
HU, Budapest 2

100 Kilowatt Naperőmű Kappa Korlátolt Felelősségű Társaság,
HU, Budapest 2

2. CR Immobilien-Vermietungsgesellschaft mbH & Co. Objekt
Naumburg KG, DE, Düsseldorf 2, 12

4Motions GmbH, DE, Leipzig 2

A/V/E GmbH, DE, Halle (Saale) 2

Abens-Donau Netz GmbH & Co. KG, DE, Mainburg 6

Abens-Donau Netz Verwaltung GmbH, DE, Mainburg 6

Abfallwirtschaft Dithmarschen GmbH, DE, Heide 6

Abfallwirtschaft Rendsburg-Eckernförde GmbH, DE, Borgstedt 6

Abfallwirtschaft Schleswig - Flensburg GmbH, DE, Schleswig 6

Abfallwirtschaft Südholstein GmbH - AWSH -, DE, Elmenhorst 6

Abwasser und Service Burg, Hochdonn GmbH, DE, Burg 6

Abwasser und Service Mittelangeln GmbH, DE, Satrup 6

Abwasserbeseitigung Nortorf-Land GmbH, DE, Nortorf 6

Abwasserentsorgung Albersdorf GmbH, DE, Albersdorf 6

Abwasserentsorgung Amt Achterwehr GmbH, DE, Achterwehr 6

Abwasserentsorgung Bargteheide GmbH, DE, Bargteheide 6

Abwasserentsorgung Bleckede GmbH, DE, Bleckede 6

Abwasserentsorgung Brunsbüttel GmbH (ABG), DE, Brunsbüttel 6

Abwasserentsorgung Friedrichskoog GmbH, DE, Friedrichskoog 6

Abwasserentsorgung Kappeln GmbH, DE, Kappeln 6

Abwasserentsorgung Kropp GmbH, DE, Kropp 6

Abwasserentsorgung Marne-Land GmbH, DE,
Diekhusen-Fahrstedt 6

Abwasserentsorgung Schladen GmbH, DE, Schladen 6

Abwasserentsorgung Schöppenstedt GmbH, DE, Schöppenstedt 6

Abwasserentsorgung St. Michaelisdonn, Averlak, Dingen,
Eddelak GmbH, DE, St. Michaelisdonn 6

Abwasserentsorgung Tellingstedt GmbH, DE, Tellingstedt 6

Abwasserentsorgung Uetersen GmbH, DE, Uetersen 6

Abwassergesellschaft Bardowick mbH & Co. KG, DE, Bardowick 6

Abwassergesellschaft Bardowick Verwaltungs-GmbH, DE,
Bardowick 6

100.0

0.0

100.0

76.1

50.0

49.0

39.0

33.3

49.0

27.0

49.0

25.0

20.0

49.0

25.1

25.0

49.0

Abwassergesellschaft Gehrden mbH, DE, Gehrden 6

Abwassergesellschaft Ilmenau mbH, DE, Melbeck 6

Abwasserwirtschaft Fichtelberg GmbH, DE, Fichtelberg 6

Abwasserwirtschaft Kunstadt GmbH, DE, Burgkunstadt 6

Ackermann & Knorr Ingenieur GmbH, DE, Chemnitz 2

Airco-Klima Service GmbH, DE, Garbsen 2

AIRCRAFT Klima-, Wärme- Kälte-, Rohrleitungsbau-
Gesellschaft mit beschränkter Haftung, DE, Wolfenbüttel 2

AirSon Engineering AB, SE, Ängelholm 2

Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, DE, Essen 6

Alsdorf Netz GmbH, DE, Alsdorf 1

Alt Han Company Limited, GB, London 6

ANCO Sp. z o.o., PL, Jarocin 2

Aralt BV, BE, Hasselt 1

Artelis S.A., LU, Luxembourg 1

AV Packaging GmbH, DE, Munich 1

Avacon AG, DE, Helmstedt 1

Avacon Beteiligungen GmbH, DE, Helmstedt 1

Avacon Connect GmbH, DE, Laatzen 1

Avacon Hochdrucknetz GmbH, DE, Helmstedt 1

Avacon Natur GmbH, DE, Sarstedt 1

Avacon Netz GmbH, DE, Helmstedt 1

Avon Energy Partners Holdings, GB, Coventry 2

AVU Aktiengesellschaft für Versorgungs-Unternehmen, DE,
Gevelsberg 4

AWOTEC Gebäude Servicegesellschaft mit beschränkter
Haftung, DE, Saarbrücken 6

Bäderbetriebsgesellschaft St. Ingbert mbH, DE, St. Ingbert 6

BAG Port 1 GmbH, DE, Regensburg 2

Balve Netz GmbH & Co. KG, DE, Balve 6

Basking Automation GmbH, DE, Berlin 6

Bayerische Bergbahnen-Beteiligungs-Gesellschaft mbH, DE,
Gundremmingen 1

Bayerische Elektrizitätswerke GmbH, DE, Augsburg 2

Bayerische Ray Energietechnik GmbH, DE, Garching 6

Bayerische-Schwäbische Wasserkraftwerke
Beteiligungsgesellschaft mbH, DE, Gundremmingen 1

Bayernwerk AG, DE, Regensburg 1

Bayernwerk Energiebringer GmbH, DE, Regensburg 2

Bayernwerk Energiedienstleistungen Licht GmbH, DE,
Regensburg 2

Bayernwerk Energietechnik GmbH, DE, Regensburg 2

Bayernwerk Gashochdrucknetz GmbH & Co. KG, DE, Regensburg 1

Bayernwerk Gashochdrucknetz Verwaltungs GmbH, DE,
Regensburg 2

49.0

25.0

30.0

100.0

80.0

100.0

50.0

100.0

21.0

100.0

90.0

0.0

61.5

100.0

50.0

48.0

49.0

100.0

25.1

25.0

100.0

49.0

62.2

100.0

60.0

100.0

1Consolidated affiliated company. · 2Non-consolidated affiliated company for reasons of immateriality (valued at cost). · 3Joint operations pursuant to IFRS 11. · 4Joint ventures pursuant to IFRS 11.
5Associated company (valued using the equity method). · 6Associated company (valued at cost for reasons of immateriality). · 7Investments pursuant to Section 313 (2) No. 5 HGB. · 8This company
exercised its exemption option under Section 264, Paragraph 3 of the German Commercial Code or under Section 264b. · 9Control by virtue of company contract. · 10No control by virtue of company
contract. · 11Significant influence via indirect investments. · 12Structured entity pursuant to IFRS 10 and 12. · 13Affiliated company which is held by E.ON Pension Trust e. V. on behalf of MEON
Pensions GmbH & Co. KG. · 14Other equity investment which is held by E.ON Pension Trust e. V. on behalf of MEON Pensions GmbH & Co. KG.

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

219

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Bayernwerk Natur 1. Beteiligungs-GmbH, DE, Regensburg 2

Bayernwerk Natur GmbH, DE, Unterschleißheim 1

Bayernwerk Netz GmbH, DE, Regensburg 1

Bayernwerk Portfolio Verwaltungs GmbH, DE, Regensburg 1

Bayernwerk Regio Energie GmbH, DE, Regensburg 2

Bayernwerk zweite Portfolio GmbH & Co. KG, DE, Regensburg 2

BETA GmbH, DE, Illingen 2

Beteiligung H1 GmbH, DE, Helmstedt 2

Beteiligung H2 GmbH, DE, Helmstedt 2

Beteiligung N1 GmbH, DE, Helmstedt 2

Beteiligung N2 GmbH, DE, Helmstedt 2

Beteiligungsgesellschaft der Energieversorgungsunternehmen
an der Kerntechnische Hilfsdienst GmbH GbR, DE,
Eggenstein-Leopoldshofen 6

Beteiligungsgesellschaft e.disnatur mbH, DE, Potsdam 2

Beteiligungsgesellschaft Werl mbH, DE, Essen 2

BEW Netze GmbH, DE, Wipperfürth 6

BHL Biomasse Heizanlage Lichtenfels GmbH, DE, Lichtenfels 6

BHO Biomasse Heizanlage Obernsees GmbH, DE, Hollfeld 6

BHP Biomasse Heizwerk Pegnitz GmbH, DE, Pegnitz 6

Bikesquare Srls, IT, Cuneo 6

bildungszentrum energie GmbH, DE, Halle (Saale) 2

Bioenergie Bad Wimpfen GmbH & Co. KG, DE, Bad Wimpfen 2

100.0

44.6

100.0

51.0

61.0

25.1

40.7

46.5

30.0

100.0

51.0

Broadband TelCom Power, Inc., US, Santa Ana 1

Brüggen.E-Netz GmbH & Co. KG, DE, Brüggen 6

Brüggen.E-Netz Verwaltungs-GmbH, DE, Brüggen 6

BTB Bayreuther Thermalbad GmbH, DE, Bayreuth 6

BTB-Blockheizkraftwerks, Träger- und Betreibergesellschaft mbH
Berlin, DE, Berlin 1

BTC Power Cebu Inc., PH, Lapu-Lapu City 2

Budapesti Dísz- és Közvilágítási Korlátolt Felelősségű Társaság,
HU, Budapest 4

Budapesti Elektromos Művek Zrt., HU, Budapest 1

Bützower Wärme GmbH, DE, Bützow 6

Cameleon B.V. i. L., NL, Amsterdam 2

Cegecom S.A., LU, Luxembourg 1

Celle-Uelzen Netz GmbH, DE, Celle 1

Celsium A Sp. z o.o., PL, Skarżysko-Kamienna 2

Celsium DOM Sp. z o.o., PL, Skarżysko-Kamienna 2

Celsium Serwis Sp. z o.o., PL, Skarżysko-Kamienna 2

Celsium Sp. z o.o., PL, Skarżysko-Kamienna 2

Certified B.V., NL, Amsterdam 1

Charge4Europe GmbH, DE, Essen 6

Charge-ON GmbH, DE, Essen 1

CHN Contractors Limited, GB, Coventry 2

CHN Electrical Services Limited, GB, Coventry 2

Bioenergie Bad Wimpfen Verwaltungs-GmbH, DE, Bad Wimpfen 2

100.0

CHN Group Ltd, GB, Coventry 2

Bioenergie Kirchspiel Anhausen GmbH & Co.KG, DE, Anhausen 2

51.0

CHN Special Projects Limited, GB, Coventry 2

Bioenergie Kirchspiel Anhausen Verwaltungs-GmbH, DE,
Anhausen 2

Bioenergie Merzig GmbH, DE, Merzig 2

Bioerdgas Hallertau GmbH, DE, Wolnzach 2

Bioerdgas Schwandorf GmbH, DE, Schwandorf 2

Biogas Ducherow GmbH, DE, Ducherow 2

Biogas Schwalmtal GmbH & Co. KG, DE, Schwalmtal 2

Biogas Steyerberg GmbH, DE, Steyerberg 2

Biogas Wassenberg GmbH & Co. KG, DE, Wassenberg 6

Biogas Wassenberg Verwaltungs GmbH, DE, Wassenberg 6

Biogasanlage Schwalmtal GmbH, DE, Schwalmtal 2

Biomasseverwertung Straubing GmbH, DE, Straubing 6

Bioplyn Rozhanovce, s.r.o., SK, Košice 6

Bio-Wärme Gräfelfing GmbH, DE, Gräfelfing 6

BMV Energie Beteiligungs GmbH, DE, Fürstenwalde/Spree 2

BMV Energie GmbH & Co. KG, DE, Fürstenwalde/Spree 6

Borowski GmbH & Co. KG, DE, Essen 2

Breitband-Infrastrukturgesellschaft Cochem-Zell mbH, DE,
Cochem 6

bremacon GmbH, DE, Bremen 6

100.0

51.0

90.0

100.0

80.0

65.5

100.0

32.4

99.2

90.0

34.0

40.0

100.0

25.6

100.0

20.7

48.0

Citigen (London) Limited, GB, Coventry 1

CM Intressenter AS, NO, Trollåsen 1

Colonia-Cluj-Napoca-Energie S.R.L., RO, Cluj-Napoca 6

COMCO MCS S.A., LU, Luxembourg 2

Coromatic A/S, DK, Roskilde 1

Coromatic AB, SE, Bromma 1

Coromatic AS, NO, Trollåsen 1

Coromatic As a Service AB, SE, Bromma 2

Coromatic Group AB, SE, Bromma 1

Coromatic Group ApS, DK, Odense 1

Coromatic Holding AB, SE, Bromma 1

Coromatic International AB, SE, Bromma 2

Coromatic Tullinge AB, SE, Bromma 2

Cremlinger Energie GmbH, DE, Cremlingen 6

Cuculus GmbH, DE, Ilmenau 6

D E M GmbH, DE, Elsdorf 2

DANEB Datennetze Berlin GmbH, DE, Berlin 2

DD Turkey Holdings S.à r.l., LU, Luxembourg 1

Deine Wärmeenergie GmbH Co. KG, DE, Essen 1

Delgaz Grid S.A., RO, Târgu Mureş 1

Stake (%)

100.0

25.1

33.3

100.0

50.0

100.0

20.0

100.0

97.5

100.0

87.8

100.0

50.0

100.0

33.3

100.0

49.0

20.4

99.9

100.0

56.5

220

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Der Solarbauer - Borowski - Verwaltungs GmbH, DE, Essen 2

DES Dezentrale Energien Schmalkalden GmbH, DE, Schmalkalden 6

Deutsche Gesellschaft für Wiederaufarbeitung von
Kernbrennstoffen AG & Co. oHG, DE, Gorleben 6

DigiKoo GmbH, DE, Essen 2

Discovergy GmbH, DE, Aachen 6

DON-Stromnetz GmbH & Co. KG, DE, Donauwörth 6

DON-Stromnetz Verwaltungs GmbH, DE, Donauwörth 6

Dorsten Netz GmbH & Co. KG, DE, Dorsten 6

Dortmunder Energie- und Wasserversorgung Gesellschaft mit
beschränkter Haftung, DE, Dortmund 5

Drava CHP Plant d.o.o., HR, Zagreb 2

Drivango GmbH i. L., DE, Düsseldorf 2

DUKO Hlinsko, s.r.o., CZ, Hlinsko 6

Dutchdelta Finance S.à r.l., LU, Luxembourg 1

E WIE EINFACH GmbH, DE, Cologne 1

e.dialog Netz GmbH, DE, Potsdam 2

E.DIS AG, DE, Fürstenwalde/Spree 1

E.DIS Bau- und Energieservice GmbH, DE, Fürstenwalde/Spree 2

E.DIS Netz GmbH, DE, Fürstenwalde/Spree 1

e.discom Telekommunikation GmbH, DE, Rostock 1

e.disnatur Erneuerbare Energien GmbH, DE, Potsdam 1

e.disnatur21 Windpark GmbH & Co. KG, DE, Potsdam 2

e.distherm Wärmedienstleistungen GmbH, DE, Potsdam 1

e.kundenservice Netz GmbH, DE, Hamburg 1

E.ON (Cross-Border) Pension Trustees Limited, GB, Coventry 2

E.ON 8. Verwaltungs GmbH, DE, Essen 2

E.ON 9. Verwaltungs GmbH, DE, Essen 2

E.ON 11. Verwaltungs GmbH, DE, Essen 2

E.ON 28. Verwaltungs GmbH, DE, Essen 2

E.ON 29. Verwaltungs GmbH, DE, Essen 2

E.ON 39. Verwaltungs GmbH, DE, Essen 2

E.ON 40. Verwaltungs GmbH, DE, Essen 2

E.ON 42. Verwaltungs GmbH, DE, Essen 2

E.ON 43. Verwaltungs GmbH, DE, Essen 2

E.ON 44. Verwaltungs GmbH, DE, Essen 2

E.ON Áramszolgáltató Korlátolt Felelősségű Társaság, HU,
Budapest 1

E.ON Asist Complet S.A., RO, Târgu Mureş 2

E.ON Asset Management GmbH & Co. EEA KG, DE, Grünwald 1, 8

E.ON Bayern Verwaltungs AG, DE, Essen 2

E.ON Beteiligungen GmbH, DE, Essen 1, 8

E.ON Bioerdgas GmbH, DE, Essen 1

E.ON Biofor Sverige AB, SE, Malmö 1

E.ON Business Services Cluj S.R.L., RO, Cluj-Napoca 1

100.0

33.3

42.5

100.0

24.4

49.0

39.9

100.0

49.0

100.0

67.0

100.0

96.0

100.0

E.ON Business Services Iași S.A., RO, Bucharest 2

E.ON Business Services Regensburg GmbH, DE, Regensburg 1, 8

E.ON Business Solutions GmbH, DE, Essen 1

E.ON Business Solutions S.r.l., IT, Milan 1

E.ON Business Solutions SAS, FR, Levallois-Perret 2

E.ON CDNE. S.p.A., IT, Milan 2

E.ON Česká republika, s.r.o., CZ, České Budějovice 1

E.ON Connecting Energies Limited, GB, Coventry 1

E.ON Control Solutions Limited, GB, Coventry 1

E.ON Country Hub Germany GmbH, DE, Berlin 1, 8

E.ON Danmark A/S, DK, Frederiksberg 1

E.ON Dél-dunántúli Áramhálózati Zrt., HU, Pécs 1

E.ON Dél-dunántúli Gázhálózati Zrt., HU, Pécs 1

E.ON Dialog S.R.L., RO, Șelimbăr 2

E.ON Digital Technology GmbH, DE, Hanover 1

E.ON Digital Technology Hungary Kft., HU, Budapest 2

E.ON Distribuce, a.s. (since 2021 EG.D, a.s.), CZ, České Budějovice 1

E.ON Drive Infrastructure France SAS, FR, Levallois-Perret 2

E.ON Drive Infrastructure GmbH, DE, Essen 1, 8

E.ON Drive Infrastructure Italy S.r.l., IT, Milan 2

E.ON Drive Infrastructure UK Limited, GB, Coventry 2

E.ON edis Contracting GmbH, DE, Fürstenwalde/Spree 2

E.ON edis energia Sp. z o.o., PL, Warsaw 1

E.ON Energia S.p.A., IT, Milan 1

E.ON Energiamegoldások Kft., HU, Budapest 1

E.ON Energiatermelő Kft., HU, Budapest 1

E.ON Energidistribution AB, SE, Malmö 1

E.ON Energie 25. Beteiligungs-GmbH, DE, Munich 2

E.ON Energie 38. Beteiligungs-GmbH, DE, Munich 1

E.ON Energie AG, DE, Düsseldorf 1, 8

E.ON Energie Deutschland GmbH, DE, Munich 1

E.ON Energie Deutschland Holding GmbH, DE, Munich 1

E.ON Energie Dialog GmbH, DE, Potsdam 2

E.ON Energie România S.A., RO, Târgu Mureş 1

E.ON Energie, a.s., CZ, České Budějovice 1

E.ON Energija d.o.o., HR, Zagreb 1

E.ON Energilösningar AB, SE, Malmö 1

E.ON Energy Gas (Eastern) Limited, GB, Coventry 2

E.ON Energy Gas (Northwest) Limited, GB, Coventry 2

E.ON Energy Installation Services Limited, GB, Coventry 1

E.ON Energy Markets GmbH, DE, Essen 1

E.ON Energy Projects GmbH, DE, Munich 1

E.ON Energy Solutions GmbH, DE, Essen 1

E.ON Energy Solutions Limited, GB, Coventry 1

100.0

99.9

100.0

68.2

100.0

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

221

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

E.ON Észak-dunántúli Áramhálózati Zrt., HU, Győr 1

E.ON Fastigheter 2 AB, SE, Malmö 2

E.ON Fastigheter Sverige AB, SE, Malmö 1

E.ON Finanzanlagen GmbH, DE, Düsseldorf 1, 8

E.ON Finanzholding Beteiligungs-GmbH, DE, Berlin 2

E.ON Finanzholding SE & Co. KG, DE, Essen 1, 8

E.ON First Future Energy Holding B.V., NL, Amsterdam 1

E.ON Flash S.R.L., RO, Târgu Mureş 2

E.ON Fünfundzwanzigste Verwaltungs GmbH, DE, Düsseldorf 1, 8

E.ON Gas Mobil GmbH, DE, Essen 2

E.ON Gashandel Sverige AB, SE, Malmö 2

E.ON Gastronomie GmbH, DE, Essen 1, 8

E.ON Gazdasági Szolgáltató Kft., HU, Győr 1

E.ON Group Innovation GmbH, DE, Essen 2

E.ON Gruga Geschäftsführungsgesellschaft mbH, DE, Düsseldorf 1, 8

E.ON Gruga Objektgesellschaft mbH & Co. KG, DE, Essen 1, 8

E.ON Grund&Boden Beteiligungs GmbH, DE, Essen 1

E.ON Grund&Boden GmbH & Co. KG, DE, Essen 1

E.ON Hrvatska d.o.o., HR, Zagreb 1

E.ON Hungária Energetikai Zártkörűen Működő
Részvénytársaság, HU, Budapest 1

E.ON Iberia Holding GmbH, DE, Düsseldorf 1, 8

E.ON impulse GmbH, DE, Essen 1, 8

E.ON Inhouse Consulting GmbH, DE, Essen 2

E.ON Innovation Co-Investments Inc., US, Wilmington 1

E.ON Innovation Hub S.A., RO, Târgu Mureş 2

E.ON Insurance Services GmbH, DE, Essen 2

E.ON INTERNATIONAL FINANCE B.V., NL, Amsterdam 1

E.ON IT UK Limited, GB, Coventry 2

E.ON Italia S.p.A., IT, Milan 1

E.ON Közép-dunántúli Gázhálózati Zrt., HU, Nagykanizsa 1

E.ON Kundsupport Sverige AB, SE, Malmö 1

E.ON Ljubljana d.o.o., SI, Ljubljana 1

E.ON Mälarkraft Värme AB, SE, Örebro 1

E.ON Metering GmbH, DE, Munich 2

E.ON NA Capital Inc., US, Wilmington 1

E.ON Next Energy Limited, GB, Coventry 1

E.ON Next Limited, GB, Coventry 2

E.ON Nord Sverige AB, SE, Malmö 2

E.ON Nordic AB, SE, Malmö 1

E.ON Norge AS, NO, Stavanger 2

E.ON North America Finance, LLC, US, Wilmington 1

E.ON Nutzenergie GmbH, DE, Essen 2

E.ON Pensionsfonds AG, DE, Essen 2

E.ON Pensionsfonds Holding GmbH, DE, Essen 2

100.0

99.9

100.0

99.8

100.0

E.ON Perspekt GmbH, DE, Düsseldorf 2

E.ON Plin d.o.o., HR, Zagreb 1

E.ON Power Plants Belgium BVBA, BE, Mechelen 1

E.ON Produktion Danmark A/S, DK, Frederiksberg 1

E.ON Produzione S.p.A., IT, Milan 1

E.ON Project Earth Limited, GB, Coventry 1

E.ON RAG-Beteiligungsgesellschaft mbH, DE, Düsseldorf 1, 8

E.ON RE Investments LLC, US, Wilmington 1

E.ON Real Estate GmbH, DE, Essen 1

E.ON Rhein-Ruhr Werke GmbH, DE, Essen 2

E.ON România S.R.L., RO, Târgu Mureş 1

E.ON Ruhrgas GPA GmbH, DE, Essen 1, 8

E.ON Ruhrgas Portfolio GmbH, DE, Essen 1, 8

E.ON Sechzehnte Verwaltungs GmbH, DE, Düsseldorf 1, 8

E.ON Service GmbH, DE, Essen 2

E.ON Servicii Clienţi S.R.L., RO, Târgu Mureş 1

E.ON Servicii S.R.L., RO, Târgu Mureş 1

E.ON Slovensko, a.s., SK, Bratislava 1

E.ON Software Development SRL, RO, Bucharest 2

E.ON Solar d.o.o., HR, Zagreb 1

E.ON Solar GmbH, DE, Essen 2

E.ON Solutions GmbH, DE, Essen 1, 8

E.ON Stiftung gGmbH, DE, Essen 2

E.ON Sverige AB, SE, Malmö 1

E.ON Telco, s.r.o., CZ, České Budějovice 2

E.ON Tiszántúli Áramhálózati Zrt., HU, Debrecen 1

E.ON Ügyfélszolgálati Kft., HU, Budapest 1

E.ON UK CHP Limited, GB, Coventry 1

E.ON UK CoGeneration Limited, GB, Coventry 1

E.ON UK Directors Limited, GB, Coventry 2

E.ON UK Energy Markets Limited, GB, Coventry 1

E.ON UK Energy Services Limited, GB, Coventry 2

E.ON UK Heat Limited, GB, Coventry 1

E.ON UK Holding Company Limited, GB, Coventry 1

E.ON UK Industrial Shipping Limited, GB, Coventry 2

E.ON UK Infrastructure Services Limited, GB, Coventry 1

E.ON UK Pension Trustees Limited, GB, Coventry 2

E.ON UK plc, GB, Coventry 1

E.ON UK Property Services Limited, GB, Coventry 2

E.ON UK PS Limited, GB, Coventry 2

E.ON UK Secretaries Limited, GB, Coventry 2

E.ON UK Steven’s Croft Limited, GB, Coventry 1

E.ON UK Trustees Limited, GB, Coventry 2

E.ON US Corporation, US, Wilmington 1

70.0

100.0

222

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

E.ON US Energy LLC, US, Wilmington 1

E.ON US Holding GmbH, DE, Düsseldorf 1, 8

E.ON Varme Danmark ApS, DK, Frederiksberg 1

E.ON Värme Sverige AB, SE, Malmö 1

E.ON Verwaltungs AG Nr. 1, DE, Munich 2

E.ON-CAPNET S.R.L., IT, Milan 2

E+ Operatie Noord-Oost BV, NL, Zwolle 1

E3 Haustechnik GmbH, DE, Magdeburg 2

East Midlands Electricity Distribution Holdings, GB, Coventry 2

East Midlands Electricity Share Scheme Trustees Limited, GB,
Coventry 2

EBERnetz GmbH & Co. KG, DE, Ebersberg 6

EBY Immobilien GmbH & Co KG, DE, Regensburg 2

EBY Port 1 GmbH, DE, Munich 1, 8

EBY Port 3 GmbH, DE, Regensburg 1

ECO2 Solutions Group Limited, GB, Kidderminster 4

Economy Power Limited, GB, Coventry 1

EDT Energie Werder GmbH, DE, Werder (Havel) 2

EE2 Erneuerbare Energien GmbH & Co. KG, DE, Lützen 2

EfD Energie-für-Dich GmbH, DE, Potsdam 6

EFG Erdgas Forchheim GmbH, DE, Forchheim 6

EFR GmbH, DE, Munich 6

EG.D Montáže, s.r.o., CZ, České Budějovice 2

eg.d, s.r.o., CZ, Prague 2

EGD-Energiewacht Facilities B.V., NL, Assen 1

ElbEnergie GmbH, DE, Seevetal 1

ELE - GEW Photovoltaikgesellschaft mbH, DE, Gelsenkirchen 6

ELE Verteilnetz GmbH, DE, Gelsenkirchen 1

Elektrizitätsnetzgesellschaft Grünwald mbH & Co. KG, DE,
Grünwald 6

Elektrizitätswerk Heinrich Schirmer GmbH, DE, Schauenstein 6

Elektrizitätswerk Landsberg Gesellschaft mit beschränkter
Haftung, DE, Landsberg am Lech 2

Elektrizitätswerk Schwandorf GmbH, DE, Schwandorf 2

ELE-RAG Montan Immobilien Erneuerbare Energien GmbH, DE,
Bottrop 6

ELE-Scholven-Wind GmbH, DE, Gelsenkirchen 6

Elmregia GmbH, DE, Schöningen 6

ELMŰ DSO Holding Korlátolt Felelősségű Társaság, HU, Budapest 1

ELMŰ Hálózati Elosztó Kft., HU, Budapest 1

ELMŰ-ÉMÁSZ Energiakereskedő Kft., HU, Budapest 1

Elmű-Émász Energiaszolgáltató Zrt., HU, Budapest 1

ELMŰ-ÉMÁSZ Energiatároló Kft., HU, Budapest 1

ELMŰ-ÉMÁSZ Solutions Kft., HU, Budapest 1

ELMŰ-ÉMÁSZ Telco Kft., HU, Budapest 2

100.0

90.0

100.0

49.0

100.0

49.0

100.0

49.0

24.9

39.9

51.0

100.0

49.0

100.0

49.0

100.0

50.0

30.0

49.0

100.0

ELMŰ-ÉMÁSZ Ügyfélszolgálati Kft., HU, Budapest 1

ÉMÁSZ Hálózati Kft., HU, Miskolc 1

EMG Energimontagegruppen AB, SE, Karlshamn 2

Emscher Lippe Energie GmbH, DE, Gelsenkirchen 1, 9

Energetyka Cieplna Opolszczyzny S.A., PL, Opole 5

Energie BOL GmbH, DE, Ottersweier 6

Energie Mechernich GmbH & Co. KG, DE, Mechernich 6

Energie Mechernich Verwaltungs-GmbH, DE, Mechernich 6

Energie Schmallenberg GmbH, DE, Schmallenberg 6

Energie und Wasser Potsdam GmbH, DE, Potsdam 5

Energie und Wasser Wahlstedt/Bad Segeberg GmbH & Co. KG
(ews), DE, Bad Segeberg 6

Energie Vorpommern GmbH, DE, Trassenheide 6

Energiedirect B.V., NL, Waalre 1

Energiegesellschaft Leimen GmbH & Co.KG, DE, Leimen 2

Energiegesellschaft Leimen Verwaltungsgesellschaft mbH, DE,
Leimen 2

energielösung GmbH, DE, Regensburg 2

energienatur Gesellschaft für Erneuerbare Energien mbH, DE,
Siegburg 6

Energienetz Neufahrn/Eching GmbH & Co. KG, DE,
Neufahrn bei Freising 6

Energienetze Bayern GmbH, DE, Regensburg 1

Energienetze Berlin GmbH, DE, Berlin 1

Energienetze Großostheim GmbH & Co. KG, DE, Großostheim 6

Energienetze Holzwickede GmbH, DE, Holzwickede 6

Energienetze Ingolstadt GmbH, DE, Regensburg 2

Energienetze Schaafheim GmbH, DE, Regensburg 2

Energiepartner Dörth GmbH, DE, Dörth 6

Energiepartner Elsdorf GmbH, DE, Elsdorf 6

Energiepartner Hermeskeil GmbH, DE, Hermeskeil 6

Energiepartner Kerpen GmbH, DE, Kerpen 6

Energiepartner Niederzier GmbH, DE, Niederzier 6

Energiepartner Projekt GmbH, DE, Essen 6

Energiepartner Solar Kreuztal GmbH, DE, Kreuztal 6

Energie-Pensions-Management GmbH, DE, Hanover 2

EnergieRegion Taunus - Goldener Grund - GmbH & Co. KG, DE,
Bad Camberg 6

EnergieRevolte GmbH, DE, Düren 2

Energieversorgung Alzenau GmbH (EVA), DE, Alzenau 6

Energieversorgung Bad Bentheim GmbH & Co. KG, DE,
Bad Bentheim 6

Energieversorgung Bad Bentheim Verwaltungs-GmbH, DE,
Bad Bentheim 6

Energieversorgung Beckum GmbH & Co. KG, DE, Beckum (Westf.) 6

Energieversorgung Beckum Verwaltungs-GmbH, DE,
Beckum (Westf.) 6

100.0

49.9

46.7

49.9

49.0

44.0

35.0

50.1

49.0

100.0

74.9

100.0

44.0

49.0

100.0

25.1

100.0

49.0

40.0

20.0

49.0

40.0

70.0

49.0

100.0

69.5

25.1

34.0

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

223

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Energieversorgung Buching-Trauchgau (EBT) Gesellschaft mit
beschränkter Haftung, DE, Halblech 6

Energieversorgung Guben GmbH, DE, Guben 5

Energieversorgung Horstmar/Laer GmbH & Co. KG, DE, Horstmar 6

Energieversorgung Hürth GmbH, DE, Hürth 6

Energieversorgung Kranenburg Netze GmbH & Co. KG, DE,
Kranenburg 6

Energieversorgung Kranenburg Netze Verwaltungs GmbH, DE,
Kranenburg 6

Energieversorgung Marienberg GmbH, DE, Marienberg 6

Energieversorgung Niederkassel GmbH & Co. KG, DE,
Niederkassel 6

Energieversorgung Oberhausen Aktiengesellschaft, DE,
Oberhausen 5, 11

Energieversorgung Putzbrunn GmbH & Co. KG, DE, Putzbrunn 6

Energieversorgung Putzbrunn Verwaltungs GmbH, DE, Putzbrunn 6

Energieversorgung Sehnde GmbH, DE, Sehnde 6

Energieversorgung Timmendorfer Strand GmbH & Co. KG, DE,
Timmendorfer Strand 2

Energieversorgung Vechelde GmbH & Co. KG, DE, Vechelde 6

Energiewacht Facilities B.V., NL, Zwolle 1

Energiewacht Groep B.V., NL, Meppel 1

Energiewacht N.V., NL, Veendam 1

Energiewacht West Nederland B.V., NL, Assen 1

Energie-Wende-Garching GmbH & Co. KG, DE, Garching 6

Energie-Wende-Garching Verwaltungs-GmbH, DE, Garching 6

Energiewerke Isernhagen GmbH, DE, Isernhagen 6

Energiewerke Osterburg GmbH, DE, Osterburg (Altmark) 6

Energiewerken B.V., NL, Almere 1

energis GmbH, DE, Saarbrücken 1

energis-Netzgesellschaft mbH, DE, Saarbrücken 1

Energotel, a.s., SK, Bratislava 6

Energy Collection Services Limited, GB, Coventry 2

Energy Ventures GmbH, DE, Saarbrücken 2

energy4u GmbH & Co. KG, DE, Siegburg 6

Enerjisa Enerji A.Ş., TR, Istanbul 4

Enerjisa Üretim Santralleri A.Ş., TR, Istanbul 4

enermarket GmbH, DE, Frankfurt am Main 6

ENERVENTIS GmbH & Co. KG, DE, Saarbrücken 6

50.0

45.0

49.0

24.9

25.1

49.0

10.0

50.0

30.0

51.0

49.0

100.0

50.0

49.0

100.0

71.9

100.0

20.0

100.0

49.0

40.0

50.0

60.0

25.1

envia THERM GmbH, DE, Bitterfeld-Wolfen 1

enviaM Beteiligungsgesellschaft Chemnitz GmbH, DE, Chemnitz 1

enviaM Beteiligungsgesellschaft mbH, DE, Essen 1

enviaM Erneuerbare Energien Verwaltungsgesellschaft mbH,
DE, Lützen 2

enviaM Neue Energie Management GmbH, DE, Lützen 2

enviaM Zweite Neue Energie Management GmbH, DE, Lützen 2

eprimo GmbH, DE, Neu-Isenburg 1

EPS Polska Holding Sp. z o.o., PL, Warsaw 1

Erdgasversorgung Industriepark Leipzig Nord GmbH, DE, Leipzig 6

Erdgasversorgung Schwalmtal GmbH & Co. KG, DE, Viersen 6

Erdgasversorgung Schwalmtal Verwaltungs-GmbH, DE, Viersen 6

e-regio GmbH & Co. KG, DE, Euskirchen 5

Ergon Energia S.r.l. in liquidazione, IT, Milan 6

Ergon Overseas Holdings, GB, Coventry 1

Erneuerbare Energien Rheingau-Taunus GmbH, DE,
Bad Schwalbach 6

ErwärmBAR GmbH, DE, Eberswalde 6

eShare.one GmbH, DE, Dortmund 6

ESK GmbH, DE, Dortmund 2

ESN EnergieSystemeNord GmbH, DE, Schwentinental 2

ESN Sicherheit und Zertifizierung GmbH, DE, Schwentinental 2

Essent Belgium N.V., BE, Kontich 1

Essent Energie Verkoop Nederland B.V., NL, 's-Hertogenbosch 1

Essent EnergieBewust Holding B.V., NL, 's-Hertogenbosch 1

Essent Energy Group B.V., NL, Arnhem 1

Essent IT B.V., NL, Arnhem 1

Essent N.V., NL, 's-Hertogenbosch 1

Essent Nederland B.V., NL, Arnhem 1

Essent Retail Energie B.V., NL, 's-Hertogenbosch 1

Essent Rights B.V., NL, 's-Hertogenbosch 1

Essent Sales Portfolio Management B.V., NL, 's-Hertogenbosch 1

Észak-magyarországi Áramszolgáltató Zrt., HU, Miskolc 1

EuroSkyPark GmbH, DE, Saarbrücken 1

EVG Energieversorgung Gemünden GmbH, DE,
Gemünden am Main 6

EVIP GmbH, DE, Bitterfeld-Wolfen 1

evm Windpark Höhn GmbH & Co. KG, DE, Höhn 6

Enervolution GmbH, DE, Bochum 2

100.0

EWIS BV, NL, Ede 1

ENNI Energie & Umwelt Niederrhein GmbH, DE, Moers 5

Ense Stromnetz GmbH & Co. KG, DE, Ense 6

ENTRO GmbH Marktbergel, DE, Marktbergel 6

envia Mitteldeutsche Energie AG, DE, Chemnitz 1

envia SERVICE GmbH, DE, Cottbus 1

envia TEL GmbH, DE, Markkleeberg 1

20.0

25.1

24.2

58.6

100.0

EWR Aktiengesellschaft, DE, Worms 5, 11

EWR Dienstleistungen GmbH & Co. KG, DE, Worms 5

EWR GmbH, DE, Remscheid 5

ews Verwaltungsgesellschaft mbH, DE, Bad Segeberg 6

EWV Baesweiler GmbH & Co. KG, DE, Baesweiler 6

EWV Baesweiler Verwaltungs GmbH, DE, Baesweiler 6

100.0

50.0

40.5

50.0

100.0

25.1

50.0

25.1

100.0

55.0

100.0

51.0

49.0

100.0

33.2

100.0

1.3

25.0

20.0

50.2

45.0

224

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

EWV Energie- und Wasser-Versorgung GmbH, DE, Stolberg/RhId. 1

53.7

EZV Energie- und Service GmbH & Co. KG Untermain, DE,
Wörth am Main 6

EZV Energie- und Service Verwaltungsgesellschaft mbH, DE,
Wörth am Main 6

Falkenbergs Biogas AB, SE, Malmö 2

FAMIS GmbH, DE, Saarbrücken 1

FAMOS - Facility Management Osnabrück GmbH, DE, Osnabrück 6

Fernwärmeversorgung Freising Gesellschaft mit beschränkter
Haftung (FFG), DE, Freising 6

Fernwärmeversorgung Saarlouis- Steinrausch
InvestitionsgeselIschaft mbH, DE, Saarlouis 2

Fernwärmeversorgung Zwönitz GmbH (FVZ), DE, Zwönitz 6

FEV Europe GmbH, DE, Essen 1, 8

FEV Future Energy Ventures Israel Ltd, IL, Tel Aviv 1

FEV GP S.a.r.l, LU, Munsbach 2

FEV US LLC, US, Palo Alto 1

FEVA Infrastrukturgesellschaft mbH, DE, Wolfsburg 6

FIDELIA Holding LLC, US, Wilmington 1

FITAS Verwaltung GmbH & Co. Dritte Vermietungs-KG, DE,
Pullach im Isartal 2

FITAS Verwaltung GmbH & Co. REGIUM-Objekte KG, DE,
Pullach im Isartal 2

Foton Technik Sp. z o.o., PL, Warsaw 1

Fraku Installaties B.V., NL, Venlo 1

Fraku Service B.V., NL, Venlo 1

Free Electrons LLC, US, Palo Alto 2

Freiberger Stromversorgung GmbH (FSG), DE, Freiberg 6

Fresh Energy GmbH i. L., DE, Berlin 2

FSO GmbH & Co. KG, DE, Oberhausen 4

FSO Verwaltungs-GmbH, DE, Oberhausen 6

FUCATUS Vermietungsgesellschaft mbH & Co. Objekt
Recklinghausen Kommanditgsellschaft, DE, Düsseldorf 2

Fundacja innogy w Polsce, PL, Warsaw 2

Future Energy Ventures Fund I SCA SICAV-RAIF, LU, Munsbach 2

Future Energy Ventures GmbH, DE, Berlin 2

Future Energy Ventures Management GmbH, DE, Essen 1, 8

G&L Gastro-Service GmbH, DE, Augsburg 6

Gas- und Wasserwerke Bous - Schwalbach GmbH, DE, Bous 5

GASAG AG, DE, Berlin 5

Gasgesellschaft Kerken Wachtendonk mbH, DE, Kerken 6

GasLINE Telekommunikationsnetz-Geschäftsführungsgesellschaft
deutscher Gasversorgungsunternehmen mbH, DE, Straelen 6

GasLINE Telekommunikationsnetzgesellschaft deutscher
Gasversorgungsunternehmen mbH & Co. KG, DE, Straelen 5

Gas-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg 6

Gas-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf 6

28.9

28.8

65.0

100.0

49.0

50.0

100.0

50.0

100.0

49.0

100.0

90.0

100.0

30.0

52.8

50.0

94.0

100.0

35.0

49.0

36.9

49.0

20.0

25.1

Gas-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG, DE,
Kerpen 6

Gas-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG, DE,
Bergheim 6

Gasnetzgesellschaft Laatzen-Süd mbH, DE, Laatzen 6

Gasnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann 6

Gas-Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG,
DE, Rheda-Wiedenbrück 6

Gas-Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH,
DE, Rheda-Wiedenbrück 6

Gasnetzgesellschaft Warburg GmbH & Co. KG, DE, Warburg 6

Gasnetzgesellschaft Windeck mbH & Co. KG, DE, Siegburg 2

Gasnetzgesellschaft Wörrstadt mbH & Co. KG, DE, Saulheim 6

Gasnetzgesellschaft Wörrstadt Verwaltung mbH, DE, Saulheim 6

Gasversorgung Bad Rodach GmbH, DE, Bad Rodach 6

Gasversorgung Ebermannstadt GmbH, DE, Ebermannstadt 6

Gasversorgung im Landkreis Gifhorn GmbH, DE, Gifhorn 1

Gasversorgung Unterfranken Gesellschaft mit beschränkter
Haftung, DE, Würzburg 5

Gasversorgung Wismar Land GmbH, DE, Lübow 6

GasWacht Friesland Facilities B.V., NL, Leeuwarden 1

Geas Energiewacht B.V., NL, Enschede 1

Gelsenberg GmbH & Co. KG, DE, Düsseldorf 1, 8

Gelsenberg Verwaltungs GmbH, DE, Düsseldorf 2

Gelsenwasser Beteiligungs-GmbH, DE, Munich 2

Gemeindewerke Bissendorf Netze GmbH & Co. KG, DE,
Bissendorf 6

Gemeindewerke Bissendorf Netze Verwaltungs-GmbH, DE,
Bissendorf 6

Gemeindewerke Everswinkel GmbH, DE, Everswinkel 6

Gemeindewerke Gräfelfing GmbH & Co. KG, DE, Gräfelfing 6

Gemeindewerke Gräfelfing Verwaltungs GmbH, DE, Gräfelfing 6

Gemeindewerke Namborn, Gesellschaft mit beschränkter
Haftung, DE, Namborn 6

Gemeindewerke Uetze GmbH, DE, Uetze 6

Gemeindewerke Wedemark GmbH, DE, Wedemark 6

Gemeindewerke Wietze GmbH, DE, Wietze 6

25.1

49.0

25.1

49.0

100.0

49.0

50.0

95.0

49.0

50.0

100.0

49.0

45.0

49.0

Gemeindewerke Windeck GmbH & Co. KG, DE, Siegburg 2

100.0

Gemeinnützige Gesellschaft zur Förderung des E.ON Energy
Research Center mbH, DE, Aachen 6

Gemeinschaftskernkraftwerk Grohnde GmbH & Co. oHG, DE,
Emmerthal 1

Gemeinschaftskernkraftwerk Grohnde Management GmbH,
DE, Emmerthal 2

Gemeinschaftskernkraftwerk Isar 2 GmbH, DE, Essenbach 2

Gemeinschaftskraftwerk Weser GmbH & Co. oHG., DE,
Emmerthal 1

50.0

100.0

83.2

75.0

66.7

90.0

Gasversorgung Wunsiedel GmbH, DE, Wunsiedel 6

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

225

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Geotermisk Operaterselskab ApS, DK, Kirke Saby 6

24.4

HaseNetz GmbH & Co. KG, DE, Gehrde 6

Geothermie-Wärmegesellschaft Braunau-Simbach mbH, AT,
Braunau am Inn 6

Gesellschaft für Energie und Klimaschutz Schleswig-Holstein
GmbH, DE, Kiel 6

Get Energy Solutions Szolgáltató Kft., HU, Budapest 1

GfB, Gesellschaft für Baudenkmalpflege mbH, DE, Idar-Oberstein 6

GfS Gesellschaft für Simulatorschulung mbH, DE, Essen 6

GHD Bayernwerk Natur GmbH & Co. KG, DE, Dingolfing 2

Gichtgaskraftwerk Dillingen GmbH & Co. KG, DE, Dillingen 6

GISA GmbH, DE, Halle (Saale) 6

20.0

33.3

100.0

20.0

41.7

75.0

25.2

23.9

Havelstrom Zehdenick GmbH, DE, Zehdenick 6

HCL Netze GmbH & Co. KG, DE, Herzebrock-Clarholz 6

Heizkraftwerk Zwickau Süd GmbH & Co. KG, DE, Zwickau 6

Heizungs- und Sanitärbau WIJA GmbH, DE,
Bad Neuenahr-Ahrweiler 2

Heizwerk Holzverwertungsgenossenschaft Stiftland eG & Co.
oHG, DE, Neualbenreuth 6

Hennef (Sieg) Netz GmbH & Co. KG, DE, Hennef 6

Hermann Stibbe Verwaltungs-GmbH, DE, Wunstorf 2

HGC Hamburg Gas Consult GmbH, DE, Hamburg 2

GKB Gesellschaft für Kraftwerksbeteiligungen mbH, DE, Cottbus 2

100.0

hmstr GmbH, DE, Saarbrücken 6

GkD Gesellschaft für kommunale Dienstleistungen mbH, DE,
Cologne 6

GNEE Gesellschaft zur Nutzung erneuerbarer Energien mbH
Freisen, DE, Freisen 6

GNS Gesellschaft für Nuklear-Service mbH, DE, Essen 6

GOLLIPP Bioerdgas GmbH & Co. KG, DE, Gollhofen 6

GOLLIPP Bioerdgas Verwaltungs GmbH, DE, Gollhofen 6

Gondoskodás-Egymásért Alapítvány, HU, Debrecen 2

Gottburg Energie- und Wärmetechnik GmbH & Co. KG i. L., DE,
Leck 6

Gottburg Verwaltungs GmbH i. L., DE, Leck 6

GREEN GECCO Beteiligungsgesellschaft mbH & Co. KG, DE,
Troisdorf 6

GREEN GECCO Beteiligungsgesellschaft-Verwaltungs GmbH,
DE, Troisdorf 6

GREEN Gesellschaft für regionale und erneuerbare Energie
mbH, DE, Stolberg/RhId. 6

Green Sky Energy Limited, GB, Coventry 1

Green Solar Herzogenrath GmbH, DE, Herzogenrath 6

Green Urban Energy GmbH, DE, Berlin 6

greenergetic Energie Service GmbH & Co. KG, DE, Bielefeld 2

greenergetic Energie Service Management GmbH, DE, Bielefeld 2

Greenergetic GmbH, DE, Bielefeld 2

greenited GmbH, DE, Hamburg 6

Greenplug GmbH, DE, Hamburg 6

greenXmoney.com GmbH i. L., DE, Neu-Ulm 2

GrønGas Partner A/S, DK, Hirtshals 6

GSH Green Steam Hürth GmbH, DE, Munich 1

GWG Grevenbroich GmbH, DE, Grevenbroich 1

GWG Kommunal GmbH, DE, Grevenbroich 2

Hams Hall Management Company Limited, GB, Coventry 6

HanseGas GmbH, DE, Quickborn 1

HanseWerk AG, DE, Quickborn 1

HanseWerk Natur GmbH, DE, Hamburg 1

Harzwasserwerke GmbH, DE, Hildesheim 5

50.0

49.0

48.0

50.0

100.0

49.9

20.7

49.2

100.0

45.0

50.0

100.0

50.0

49.0

100.0

50.0

100.0

60.0

89.9

44.8

100.0

66.5

100.0

20.8

HOCHTEMPERATUR-KERNKRAFTWERK GmbH (HKG).
Gemeinsames europäisches Unternehmen, DE, Hamm 6

Hof Promotion B.V., NL, Eindhoven 1

Holsteiner Wasser GmbH, DE, Neumünster 6

Home.ON GmbH, DE, Aachen 2

HSL Laibacher GmbH, DE, Wiesen 2

Hub2Go GmbH, DE, Hamburg 6

Huisman Warmtetechniek B.V., NL, Stadskanaal 1

iamsmart GmbH i. L., DE, Essen 2

Improbed AB, SE, Malmö 2

Improvers B.V., NL, 's-Hertogenbosch 1

Improvers Community B.V., NL, Utrecht 1

Induboden GmbH, DE, Düsseldorf 2

Induboden GmbH & Co. Grundstücksgesellschaft oHG, DE, Essen 2

Industriekraftwerk Greifswald GmbH, DE, Kassel 6

Industry Development Services Limited, GB, Coventry 2

InfraServ - Bayernwerk Gendorf GmbH, DE, Burgkirchen a.d.Alz 6

Infrastrukturgesellschaft Stadt Nienburg/Weser mbH, DE,
Nienburg/Weser 6

innogy Benelux Holding B.V., NL, 's-Hertogenbosch 1

innogy Beteiligungsholding GmbH, DE, Essen 1, 8

Innogy Business Services UK Limited, GB, Swindon 1

innogy chargetech GmbH, DE, Essen 2

innogy Commodity Markets GmbH, DE, Essen 1

innogy Consulting & Ventures Americas, LLC, US, Boston 2

innogy Consulting & Ventures Czech Republic s.r.o., CZ, Prague 2

innogy Consulting & Ventures Holdings LLC, US, Boston 2

innogy Consulting & Ventures NL B.V., NL, Eindhoven 2

innogy Consulting & Ventures UK Ltd., GB, London 2

innogy Consulting GmbH, DE, Essen 2

innogy Consulting U.S. LLC, US, Boston 2

innogy Direkt GmbH, DE, Dortmund 1

INNOGY E-MOBILITY LIMITED, GB, London 2

25.1

49.0

25.1

40.0

100.0

50.0

49.0

100.0

25.1

26.0

100.0

50.0

100.0

49.0

100.0

49.0

100.0

50.0

49.9

100.0

226

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

innogy eMobility Solutions GmbH, DE, Dortmund 1

innogy e-mobility US LLC, US, Delaware 1

innogy Energy Belgium BVBA, BE, Hove 1

innogy Finance B.V., NL, 's-Hertogenbosch 1

innogy Fünfzehnte Vermögensverwaltungs GmbH, DE, Essen 2

innogy Hungária Tanácsadó Kft., HU, Budapest 1

innogy Innovation UK Ltd., GB, London 2

innogy International Middle East, AE, Dubai 6

innogy International Participations N.V., NL, 's-Hertogenbosch 1

innogy Middle East & North Africa Ltd., AE, Dubai 2

innogy Neunte Vermögensverwaltungs GmbH, DE, Essen 2

innogy Polska Development Sp. z o.o., PL, Warsaw 2

innogy Polska IT Support Sp. z o.o., PL, Warsaw 1

innogy Polska Operations Sp. z o.o., PL, Warsaw 2

innogy Polska S.A., PL, Warsaw 1

innogy Polska Solutions Sp. z o.o., PL, Warsaw 1

innogy SE, DE, Essen 1

innogy SE Service s.r.o., CZ, Prague 2

innogy Sechzehnte Vermögensverwaltungs GmbH, DE, Essen 2

innogy Slovensko s.r.o., SK, Bratislava 1

innogy Solutions s.r.o., SK, Bratislava 2

innogy South East Europe s.r.o., SK, Bratislava 2

innogy Stoen Operator Sp. z o.o., PL, Warsaw 1

innogy Sustainable Solutions LLC, US, Boston 2

innogy Vierzehnte Vermögensverwaltungs GmbH, DE, Essen 2

innogy Zweite Vermögensverwaltungs GmbH, DE, Essen 1, 8

innogy Zwölfte Vermögensverwaltungs GmbH, DE, Essen 2

innogy.C3 GmbH, DE, Essen 6

INS Insider Navigation Systems GmbH, AT, Vienna 6

Installatietechniek Totaal B.V., NL, Leeuwarden 1

Intelligent Maintenance Systems Limited, GB, Milton Keynes 6

IPP ESN Power Engineering GmbH, DE, Kiel 2

Isar Loisach Stromnetz GmbH & Co. KG, DE, Wolfratshausen 6

Isoprofs B.V., NL, Meijel 1

Isoprofs België BVBA, BE, Hasselt 1

It's a beautiful world B.V., NL, Amersfoort 1

iWATT s.r.o., SK, Košice 2

Jihočeská plynárenská, a.s., CZ, České Budějovice 2

Kalmar Energi Försäljning AB, SE, Kalmar 6

Kalmar Energi Holding AB, SE, Kalmar 4

Kavernengesellschaft Staßfurt mbH, DE, Staßfurt 6

KAWAG AG & Co. KG, DE, Pleidelsheim 6

KAWAG Netze GmbH & Co. KG, DE, Abstatt 6

KAWAG Netze Verwaltungsgesellschaft mbH, DE, Abstatt 6

100.0

49.0

100.0

25.1

20.8

100.0

25.0

51.0

49.0

100.0

80.0

100.0

40.0

50.0

49.0

KDT Kommunale Dienste Tholey GmbH, DE, Tholey 6

Kemkens B.V., NL, Oss 5

Kemsley CHP Limited, GB, Coventry 1

KEN Geschäftsführungsgesellschaft mbH, DE, Neunkirchen 2

KEN GmbH & Co. KG, DE, Neunkirchen 2

Kernkraftwerk Brokdorf GmbH & Co. oHG, DE, Hamburg 1

Kernkraftwerk Brunsbüttel GmbH & Co. oHG, DE, Hamburg 5

Kernkraftwerk Krümmel GmbH & Co. oHG, DE, Hamburg 3

Kernkraftwerk Stade GmbH & Co. oHG, DE, Hamburg 1

Kernkraftwerke Isar Verwaltungs GmbH, DE, Essenbach 1

KEVAG Telekom GmbH, DE, Koblenz 6

KEW Kommunale Energie- und Wasserversorgung
Aktiengesellschaft, DE, Neunkirchen 5

KGW - Kraftwerk Grenzach-Wyhlen GmbH, DE, Munich 1

Kite Power Systems Limited, GB, Chelmsford 6

KlickEnergie GmbH & Co. KG, DE, Neuss 6

KlickEnergie Verwaltungs-GmbH, DE, Neuss 6

Klíma És Hűtéstechnológiai Tervező, Szerelő És Kereskedelmi Kft.,
HU, Budapest 1

Komáromi Kogenerációs Erőmű Kft., HU, Budapest 2

KommEnergie Erzeugungs GmbH, DE, Eichenau 6

KommEnergie GmbH, DE, Eichenau 6

Kommunale Dienste Marpingen Gesellschaft mit beschränkter
Haftung, DE, Marpingen 6

Kommunale Energieversorgung GmbH Eisenhüttenstadt, DE,
Eisenhüttenstadt 6

Kommunale Klimaschutzgesellschaft Landkreis Celle
gemeinnützige GmbH, DE, Celle 6

Kommunale Klimaschutzgesellschaft Landkreis Uelzen
gemeinnützige GmbH, DE, Celle 6

Kommunale Netzgesellschaft Steinheim a. d. Murr GmbH & Co.
KG, DE, Steinheim an der Murr 6

Kommunalwerk Rudersberg GmbH & Co. KG, DE, Rudersberg 6

Kommunalwerk Rudersberg Verwaltungs-GmbH, DE, Rudersberg 6

Konnektor B.V., NL, Amsterdam 1

Konsortium Energieversorgung Opel beschränkt haftende oHG,
DE, Karlstein 4, 10

Koprivnica Opskrba d.o.o., HR, Koprivnica 1

Koprivnica Plin d.o.o., HR, Koprivnica 1

Kraftwerk Burghausen GmbH, DE, Munich 1

Kraftwerk Hattorf GmbH, DE, Munich 1

Kraftwerk Marl GmbH, DE, Munich 1

Kraftwerk Plattling GmbH, DE, Munich 1

Kraftwerk Wehrden Gesellschaft mit beschränkter Haftung,
DE, Völklingen 6

KSG Kraftwerks-Simulator-Gesellschaft mbH, DE, Essen 6

KSP Kommunaler Service Püttlingen GmbH, DE, Püttlingen 6

49.0

100.0

65.0

53.6

80.0

33.3

50.0

66.7

100.0

50.0

28.6

100.0

26.6

65.0

100.0

55.0

49.0

25.0

49.0

49.9

100.0

66.7

100.0

33.3

41.7

40.0

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

227

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

KTA Kältetechnischer Anlagenbau GmbH, DE, Garbsen 2

100.0

MEON Verwaltungs GmbH, DE, Essen 2

Kurgan Grundstücks-Verwaltungsgesellschaft mbH & Co. oHG
i.L., DE, Grünwald 2

KVK Kompetenzzentrum Verteilnetze und Konzessionen GmbH,
DE, Cologne 6

90.0

74.9

KWS Kommunal-Wasserversorgung Saar GmbH, DE, Saarbrücken 2

100.0

LandE GmbH, DE, Wolfsburg 1

LANDWEHR Wassertechnik GmbH, DE, Schöppenstedt 2

Lech Energie Gersthofen GmbH & Co. KG, DE, Gersthofen 2

Lech Energie Verwaltung GmbH, DE, Augsburg 2

Lechwerke AG, DE, Augsburg 1

Leitungs- und Kanalservice Bauer GmbH, DE,
Schönbrunn i. Steigerwald 2

Leitungspartner GmbH, DE, Düren 1

Lemonbeat GmbH, DE, Dortmund 2

LEW Anlagenverwaltung Gesellschaft mit beschränkter
Haftung, DE, Gundremmingen 1

LEW Beteiligungsgesellschaft mbH, DE, Gundremmingen 1

LEW Netzservice GmbH, DE, Augsburg 1

LEW Service & Consulting GmbH, DE, Augsburg 1

LEW TelNet GmbH, DE, Neusäß 1

LEW Verteilnetz GmbH, DE, Augsburg 1

LEW Wasserkraft GmbH, DE, Augsburg 1

Licht Groen B.V., NL, Amsterdam 1

Lichtverbund Straßenbeleuchtung GmbH, DE, Helmstedt 2

Lighting for Staffordshire Holdings Limited, GB, Coventry 1

Lighting for Staffordshire Limited, GB, Coventry 1

Liikennevirta Oy, FI, Helsinki 6

Lillo Energy NV, BE, Brussels 6

Limfjordens Bioenergi ApS, DK, Frederiksberg 6

Livisi GmbH, DE, Essen 1

Local Energies, a.s., CZ, Zlín - Malenovice 2

Lößnitz Netz GmbH & Co. KG, DE, Lößnitz 6

LSW Energie Verwaltungs-GmbH, DE, Wolfsburg 6

LSW Holding GmbH & Co. KG, DE, Wolfsburg 5, 10

LSW Holding Verwaltungs-GmbH, DE, Wolfsburg 6

LSW Netz Verwaltungs-GmbH, DE, Wolfsburg 6

Luna Lüneburg GmbH, DE, Lüneburg 6

MAINGAU Energie GmbH, DE, Obertshausen 5

Matrix Control Solutions Limited, GB, Coventry 1

MDE Service GmbH, DE, Gersthofen 6

medl GmbH, DE, Mülheim an der Ruhr 5

Mehr Ampere GmbH, DE, Lappersdorf 6

Melle Netze GmbH & Co. KG, DE, Melle 6

MEON Pensions GmbH & Co. KG, DE, Essen 1, 8

69.6

100.0

89.9

100.0

89.8

60.0

100.0

34.3

50.0

100.0

74.9

57.0

49.0

46.6

100.0

24.9

39.0

25.1

50.0

100.0

MeteringSüd GmbH & Co. KG, DE, Augsburg 6

Midlands Electricity Limited, GB, Coventry 2

MINUS 181 GmbH, DE, Parchim 6

MITGAS Mitteldeutsche Gasversorgung GmbH, DE, Halle (Saale) 1

Mitteldeutsche Netzgesellschaft Gas HD mbH, DE, Halle (Saale) 2

Mitteldeutsche Netzgesellschaft Gas mbH, DE, Halle (Saale) 1

Mitteldeutsche Netzgesellschaft mbH, DE, Chemnitz 2

Mitteldeutsche Netzgesellschaft Strom mbH, DE, Halle (Saale) 1

Mittlere Donau Kraftwerke AG, DE, Landshut 6

MNG Stromnetze GmbH & Co. KG, DE, Lüdinghausen 6

MNG Stromnetze Verwaltungs GmbH, DE, Lüdinghausen 6

Montcogim - Plinara d.o.o., HR, Sveta Nedelja 1

MONTCOGIM-SISAK d.o.o., HR, Sisak 2

Moslavina Plin d.o.o., HR, Kutina 2

Mosoni-Duna Menti Szélerőmű Kft., HU, Budapest 2

Murrhardt Netz AG & Co. KG, DE, Murrhardt 6

MWE Mecklenburgische Wärme- und Energiedienstleistungen
GmbH, DE, Wismar 6

MZEC - OPAŁ Sp. z o.o., PL, Chojnice 2

MZEC SP. z o.o., PL, Szczecin 2

Nadácia VSE Holding, SK, Košice 2

Nahwärme Ascha GmbH, DE, Ascha 2

Naturstrom Betriebsgesellschaft Oberhonnefeld mbH, DE, Koblenz 6

Nebelhornbahn-Aktiengesellschaft, DE, Oberstdorf 6

Nederland Isoleert B.V., NL, Amersfoort 1

Nederland Verkoopt B.V., NL, Amersfoort 1

Netz- und Wartungsservice (NWS) GmbH, DE, Schwerin 2

Netzanschluss Mürow Oberdorf GbR, DE, Bremerhaven 6

Netzgesellschaft Bad Münder GmbH & Co. KG, DE, Bad
Münder 6

Netzgesellschaft Barsinghausen GmbH & Co. KG, DE,
Barsinghausen 6

Netzgesellschaft Bedburg Verwaltungs-GmbH, DE, Bedburg 6

Netzgesellschaft Betzdorf GmbH & Co. KG, DE, Betzdorf 6

Netzgesellschaft Bühlertal GmbH & Co. KG, DE, Bühlertal 6

Netzgesellschaft Elsdorf Verwaltungs-GmbH, DE, Elsdorf 6

Netzgesellschaft Gehrden mbH, DE, Gehrden 6

Netzgesellschaft GmbH & Co. KG Bad Homburg v. d. Höhe, DE,
Bad Homburg v. d. Höhe 6

Netzgesellschaft Grimma GmbH & Co. KG, DE, Grimma 6

Netzgesellschaft Hemmingen mbH, DE, Hemmingen 6

Netzgesellschaft Hennigsdorf Strom mbH, DE, Hennigsdorf 6

Netzgesellschaft Hildesheimer Land GmbH & Co. KG, DE, Giesen 6

Netzgesellschaft Hildesheimer Land Verwaltung GmbH, DE,
Giesen 6

100.0

34.0

100.0

25.1

75.4

100.0

40.0

25.1

100.0

49.0

50.0

100.0

90.0

25.0

20.1

100.0

34.8

49.0

49.9

49.0

45.7

49.0

50.0

49.0

228

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Netzgesellschaft Hohen Neuendorf Strom GmbH & Co. KG, DE,
Hohen Neuendorf 6

Netzgesellschaft Horn-Bad Meinberg GmbH & Co. KG, DE,
Horn-Bad Meinberg 6

Netzgesellschaft Hüllhorst GmbH & Co. KG, DE, Hüllhorst 6

Netzgesellschaft Kelkheim GmbH & Co. KG, DE, Kelkheim 6

Netzgesellschaft Korb GmbH & Co. KG, DE, Korb 6

Netzgesellschaft Korb Verwaltungs-GmbH, DE, Korb 6

Netzgesellschaft Kreisstadt Bergheim Verwaltungs-GmbH, DE,
Bergheim 6

Netzgesellschaft Lauf GmbH & Co. KG, DE, Lauf 6

Netzgesellschaft Lennestadt GmbH & Co. KG, DE, Lennestadt 6

Netzgesellschaft Leutenbach GmbH & Co. KG, DE, Leutenbach 6

Netzgesellschaft Leutenbach Verwaltungs-GmbH, DE, Leutenbach 6

Netzgesellschaft Maifeld GmbH & Co. KG, DE, Polch 6

Netzgesellschaft Maifeld Verwaltungs GmbH, DE, Polch 6

Netzgesellschaft Marl mbH & Co. KG, DE, Marl 6

Netzgesellschaft Osnabrücker Land GmbH & Co. KG, DE, Bohmte 4

Netzgesellschaft Ottersweier GmbH & Co. KG, DE, Ottersweier 6

Netzgesellschaft Panketal GmbH, DE, Panketal 2

Netzgesellschaft Rheda-Wiedenbrück GmbH & Co. KG, DE,
Rheda-Wiedenbrück 6

Netzgesellschaft Rheda-Wiedenbrück Verwaltungs-GmbH, DE,
Rheda-Wiedenbrück 6

Netzgesellschaft Rietberg-Langenberg GmbH & Co. KG, DE,
Rietberg 6

Netzgesellschaft Ronnenberg GmbH & Co. KG, DE, Ronnenberg 6

Netzgesellschaft S-1 GmbH, DE, Helmstedt 2

Netzgesellschaft Schwerin mbH (NGS), DE, Schwerin 6

Netzgesellschaft Stuhr/Weyhe mbH i. L., DE, Helmstedt 2

Netzgesellschaft Südwestfalen mbH & Co. KG, DE, Netphen 6

Netzgesellschaft Syke GmbH, DE, Syke 6

Netzgesellschaft W-1 GmbH, DE, Helmstedt 2

Neumünster Netz Beteiligungs-GmbH, DE, Neumünster 1

NEW AG, DE, Mönchengladbach 1, 9

NEW b_gas Eicken GmbH, DE, Schwalmtal 2

New Cogen Sp. z o.o., PL, Warsaw 2

NEW Netz GmbH, DE, Geilenkirchen 1

NEW Niederrhein Energie und Wasser GmbH, DE,
Mönchengladbach 1

NEW NiederrheinWasser GmbH, DE, Viersen 1

NEW Re GmbH, DE, Mönchengladbach 2

NEW Smart City GmbH, DE, Mönchengladbach 2

NEW Tönisvorst GmbH, DE, Tönisvorst 1

NEW Viersen GmbH, DE, Viersen 1

NEW Windenergie Verwaltung GmbH, DE, Mönchengladbach 2

NEW Windpark Linnich GmbH & Co. KG, DE, Mönchengladbach 2

49.0

49.9

49.0

49.9

25.1

49.9

49.0

25.1

50.0

49.9

100.0

49.0

25.1

49.0

100.0

40.0

100.0

49.0

100.0

50.1

40.0

100.0

95.5

100.0

98.7

100.0

NEW Windpark Viersen GmbH & Co. KG, DE, Mönchengladbach 2

100.0

NFPA Holdings Limited, GB, Newcastle upon Tyne 6

NiersEnergieNetze GmbH & Co. KG, DE, Kevelaer 6

NiersEnergieNetze Verwaltungs-GmbH, DE, Kevelaer 6

NIS Norddeutsche Informations-Systeme Gesellschaft mbH,
DE, Schwentinental 2

NORD-direkt GmbH, DE, Neumünster 2

NordNetz GmbH, DE, Quickborn 2

Novenerg limited liability company for energy activities, HR, Zagreb 6

Novo Innovations Limited, GB, Coventry 2

Npower Business and Social Housing Limited, GB, Swindon 1

Npower Commercial Gas Limited, GB, Swindon 1

Npower Financial Services Limited, GB, Swindon 1

Npower Gas Limited, GB, Swindon 1

Npower Group Limited, GB, Swindon 1

Npower Limited, GB, Swindon 1

Npower Northern Limited, GB, Swindon 1

Npower Northern Supply Limited, GB, Swindon 2

Npower Yorkshire Limited, GB, Swindon 1

Npower Yorkshire Supply Limited, GB, Swindon 1

NRF Neue Regionale Fortbildung GmbH, DE, Halle (Saale) 2

Oberland Stromnetz GmbH & Co. KG, DE, Murnau a. Staffelsee 6

ocean5 Business Software GmbH, DE, Kiel 6

Oebisfelder Wasser und Abwasser GmbH, DE, Oebisfelde 6

Oer-Erkenschwick Netz GmbH & Co. KG, DE, Oer-Erkenschwick 6

OIE Aktiengesellschaft, DE, Idar-Oberstein 1

OMNI Energy Kft., HU, Kiskunhalas 6

OOO E.ON Connecting Energies, RU, Moscow 6

Orcan Energy AG, DE, Munich 6

Oschatz Netz GmbH & Co. KG, DE, Oschatz 2

Oschatz Netz Verwaltungs GmbH, DE, Oschatz 2

Oskarshamn Energi AB, SE, Oskarshamn 4

Ostwestfalen Netz GmbH & Co. KG, DE, Bad Driburg 6

OurGreenCar Sweden AB, SE, Malmö 6

PannonWatt Energetikai Megoldások Zrt., HU, Győr 6

pear.ai Inc., US, San Francisco 6

PEG Infrastruktur AG, CH, Zug 13

Peißenberger Kraftwerksgesellschaft mit beschränkter
Haftung, DE, Peißenberg 2

Peißenberger Wärmegesellschaft mbH, DE, Peißenberg 2

Perstorps Fjärrvärme AB, SE, Perstorp 6

PFALZWERKE AKTIENGESELLSCHAFT, DE,
Ludwigshafen am Rhein 5

PIS Progress Sp. z o.o., PL, Piła 2

Placense Ltd., IL, Caesarea 6

25.0

51.0

100.0

50.0

100.0

33.9

50.2

49.0

100.0

50.0

33.6

74.9

100.0

50.0

25.1

30.0

49.9

40.0

100.0

50.0

26.7

100.0

40.0

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

229

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Plin-Projekt d.o.o., HR, Nova Gradiška 2

Plus Shipping Services Limited, GB, Swindon 1

Portfolio EDL GmbH, DE, Helmstedt 1, 8

Powergen Holdings B.V., NL, Rotterdam 1

Powergen International, GB, Coventry 1

Powergen Limited, GB, Coventry 2

Powergen Luxembourg Holdings S.À R.L., LU, Luxembourg 1

Powergen Power No. 1 Limited, GB, Coventry 2

Powergen Power No. 2 Limited, GB, Coventry 2

Powergen Serang Limited, GB, Coventry 2

Powergen UK Investments, GB, Coventry 2

Powerhouse B.V., NL, Almere 1

Powerhouse Energy Solutions S.L., ES, Madrid 2

prego services GmbH, DE, Saarbrücken 6

PRENU Projektgesellschaft für Rationelle Energienutzung in
Neuss mit beschränkter Haftung, DE, Neuss 6

PreussenElektra GmbH, DE, Hanover 1

Projecta 14 GmbH, DE, Saarbrücken 5

Propan Rheingas GmbH, DE, Brühl 6

Propan Rheingas GmbH & Co Kommanditgesellschaft, DE, Brühl 6

PS Energy UK Limited, GB, Swindon 1

Purena Consult GmbH, DE, Wolfenbüttel 2

Purena GmbH, DE, Wolfenbüttel 1

QDTE GmbH, DE, Sarstedt 2

QKOH GmbH, DE, Sarstedt 6

QSEE GmbH, DE, Sarstedt 2

Qualitas-AMS GmbH, DE, Siegen 2

Rain Biomasse Wärmegesellschaft mbH, DE, Rain 6

Rampion Renewables Limited, GB, Coventry 5

Rauschbergbahn Gesellschaft mit beschränkter Haftung, DE,
Ruhpolding 2

RDE Regionale Dienstleistungen Energie GmbH & Co. KG, DE,
Veitshöchheim 2

RDE Verwaltungs-GmbH, DE, Veitshöchheim 2

Recargo Inc., US, El Segundo 1

Recklinghausen Netzgesellschaft mbH & Co. KG, DE,
Recklinghausen 5

Recklinghausen Netz-Verwaltungsgesellschaft mbH, DE,
Recklinghausen 6

Refarmed ApS, DK, Copenhagen 6

REGAS GmbH & Co KG, DE, Regensburg 6

REGAS Verwaltungs-GmbH, DE, Regensburg 6

REGENSBURGER ENERGIE- UND WASSERVERSORGUNG AG,
DE, Regensburg 6

Regionetz GmbH, DE, Aachen 1, 9

RegioNetzMünchen GmbH & Co. KG, DE, Garching 6

100.0

50.0

100.0

50.0

27.5

29.6

100.0

94.1

100.0

50.0

100.0

64.9

39.9

77.4

100.0

49.9

49.0

20.0

50.0

35.5

49.2

50.0

RegioNetzMünchen Verwaltungs GmbH, DE, Garching 6

Regnitzstromverwertung Aktiengesellschaft, DE, Erlangen 6

Renergie Stadt Wittlich GmbH, DE, Wittlich 6

rEVUlution GmbH, DE, Essen 2

REWAG REGENSBURGER ENERGIE- UND WASSERVER-
SORGUNG AG & CO KG, DE, Regensburg 5

Rhegio Dienstleistungen GmbH, DE, Rhede 6

Rhein-Ahr-Energie Netz GmbH & Co. KG, DE, Grafschaft 6

RheinEnergie AG, DE, Cologne 5

Rheinland Westfalen Energiepartner GmbH, DE, Essen 2

Rhein-Main-Donau GmbH, DE, Landshut 5

Rhein-Sieg Netz GmbH, DE, Siegburg 1

rhenag Rheinische Energie Aktiengesellschaft, DE, Cologne 1

50.0

33.3

30.0

100.0

35.5

24.9

25.1

20.0

100.0

22.5

100.0

66.7

RHENAGBAU Gesellschaft mit beschränkter Haftung, DE, Cologne 2

100.0

RIWA GmbH Gesellschaft für Geoinformationen, DE,
Kempten (Allgäu) 6

R-KOM Regensburger Telekommunikationsgesellschaft mbH &
Co. KG, DE, Regensburg 6

R-KOM Regensburger Telekommunikationsverwaltungs-
gesellschaft mbH, DE, Regensburg 6

RL Besitzgesellschaft mbH, DE, Monheim am Rhein 1

RL Beteiligungsverwaltung beschr. haft. OHG, DE,
Monheim am Rhein 1

RURENERGIE GmbH, DE, Düren 6

Rüthen Gasnetz GmbH & Co. KG, DE, Rüthen 6

RWW Rheinisch-Westfälische Wasserwerksgesellschaft mbH,
DE, Mülheim an der Ruhr 1

S.C. Salgaz S.A., RO, Salonta 2

Safekont GmbH, DE, Munich 2

Safetec Entsorgungs- und Sicherheitstechnik GmbH, DE,
Heidelberg 2

Safetec-Swiss GmbH, CH, Würenlingen 2

Sandersdorf-Brehna Netz GmbH & Co. KG, DE,
Sandersdorf-Brehna 6

SARIO Grundstücks-Vermietungsgesellschaft mbH & Co.
Objekt Würzburg KG, DE, Düsseldorf 2, 12

Scharbeutzer Energie- und Netzgesellschaft mbH & Co. KG, DE,
Scharbeutz 2

SchlauTherm GmbH, DE, Saarbrücken 2

Schleswig-Holstein Netz AG, DE, Quickborn 1

Schleswig-Holstein Netz Verwaltungs-GmbH, DE, Quickborn 1

SEC A Sp. z o.o., PL, Szczecin 2

SEC B Sp. z o.o., PL, Szczecin 2

SEC C Sp. z o.o., PL, Szczecin 2

SEC Chojnice Sp. z o.o, PL, Szczecin 2

SEC Choszczno Sp. z o.o., PL, Choszczno 2

SEC D Sp. z o.o., PL, Szczecin 2

33.3

20.0

100.0

30.1

25.1

79.8

53.8

100.0

49.0

0.0

51.0

75.0

75.5

100.0

230

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

SEC E Sp. z o.o., PL, Szczecin 2

SEC Energia Sp. z o.o., PL, Szczecin 2

SEC F Sp. z o.o., PL, Szczecin 2

SEC G Sp. z o.o., PL, Szczecin 2

SEC H Sp. z o.o., PL, Szczecin 2

SEC I Sp. z o.o., PL, Szczecin 2

SEC J Sp. z o.o., PL, Szczecin 2

SEC K Sp. z o.o., PL, Szczecin 2

SEC L Sp. z o.o., PL, Szczecin 2

SEC M Sp. z o.o., PL, Szczecin 2

SEC N Sp. z o.o., PL, Szczecin 2

SEC NewGrid Sp. z o.o., PL, Szczecin 2

SEC O Sp. z o.o., PL, Szczecin 2

SEC Obrót Sp. z o.o., PL, Szczecin 2

SEC P Sp. z o.o., PL, Szczecin 2

SEC R Sp. z o.o., PL, Szczecin 2

SEC Region Sp. z o.o., PL, Szczecin 2

SEC Serwis Sp. z o.o., PL, Szczecin 2

SEG Solarenergie Guben GmbH & Co. KG, DE, Guben 6

SEG Solarenergie Guben Management GmbH, DE, Lützen 2

Selm Netz GmbH & Co. KG, DE, Selm 6

SEN Solarenergie Nienburg GmbH & Co. KG, DE, Lützen 2

SERVICE plus GmbH, DE, Neumünster 2

SERVICE plus Recycling GmbH, DE, Neumünster 2

Shamrock Energie GmbH, DE, Herne 6

SHW/RWE Umwelt Aqua Vodogradnja d.o.o., HR, Zagreb 6

Siegener Versorgungsbetriebe GmbH, DE, Siegen 6

Skandinaviska Kraft AB, SE, Halmstad 2

Skive GreenLab Biogas ApS, DK, Frederiksberg 6

ŠKO-ENERGO FIN, s.r.o., CZ, Mladá Boleslav 5

ŠKO-ENERGO, s.r.o., CZ, Mladá Boleslav 6

Smart Energy Plattling GmbH, DE, Munich 2

SmartSim GmbH, DE, Essen 6

Söderåsens Bioenergi AB, SE, Malmö 2

Solar Energy Group S.p.A., IT, Pordenone 1

Solar Noord B.V., NL, Stadskanaal 1

Solar Service S.r.l., IT, Pordenone 2

Solar Supply Sweden AB, SE, Karlshamn 2

SolarProjekt Mainaschaff GmbH, DE, Mainaschaff 6

Solnet d.o.o., HR, Zagreb 1

Sønderjysk Biogas Bevtoft A/S, DK, Vojens 6

Sønderjysk Biogas Løgumkloster ApS, DK, Bevtoft 6

SPIE Energy Solutions Harburg GmbH, DE, Hamburg 6

SPX, s.r.o., SK, Zilina 6

Stake (%)

Name, location

Stake (%)

100.0

25.1

100.0

25.1

100.0

40.0

50.0

24.9

100.0

50.0

42.5

21.0

100.0

24.0

63.3

100.0

50.0

100.0

50.0

35.0

33.0

SSW - Stadtwerke St. Wendel GmbH & Co KG., DE, St. Wendel 5

49.5

SSW Stadtwerke St. Wendel Geschäftsführungsgesellschaft mbH,
DE, St. Wendel 6

Stadtentwässerung Schwerte GmbH, DE, Schwerte 6

Städtische Betriebswerke Luckenwalde GmbH, DE, Luckenwalde 6

Städtische Werke Borna GmbH, DE, Borna 6

Städtische Werke Magdeburg GmbH & Co. KG, DE, Magdeburg 5

Städtische Werke Magdeburg Verwaltungs-GmbH, DE,
Magdeburg 6

Städtisches Wasserwerk Eschweiler GmbH, DE, Eschweiler 6

Stadtnetze Neustadt a. Rbge. GmbH & Co. KG, DE,
Neustadt a. Rbge. 6

Stadtnetze Neustadt a. Rbge. Verwaltungs-GmbH, DE,
Neustadt a. Rbge. 6

Stadtversorgung Pattensen GmbH & Co. KG, DE, Pattensen 6

Stadtversorgung Pattensen Verwaltung GmbH, DE, Pattensen 6

Stadtwerk Verl Netz GmbH & Co. KG, DE, Verl 6

Stadtwerke - Strom Plauen GmbH & Co. KG, DE, Plauen 6

Stadtwerke Ahaus GmbH, DE, Ahaus 6

Stadtwerke Aschersleben GmbH, DE, Aschersleben 6

Stadtwerke Aue - Bad Schlema GmbH, DE, Aue-Bad Schlema 6

Stadtwerke Bad Bramstedt GmbH, DE, Bad Bramstedt 6

Stadtwerke Barth GmbH, DE, Barth 6

Stadtwerke Bayreuth Energie und Wasser GmbH, DE, Bayreuth 5

Stadtwerke Bergen GmbH, DE, Bergen 6

Stadtwerke Bernburg GmbH, DE, Bernburg (Saale) 5

Stadtwerke Bitterfeld-Wolfen GmbH, DE, Bitterfeld-Wolfen 6

Stadtwerke Blankenburg GmbH, DE, Blankenburg 6

Stadtwerke Bogen GmbH, DE, Bogen 6

Stadtwerke Burgdorf GmbH, DE, Burgdorf 6

Stadtwerke Dillingen/Saar GmbH, DE, Dillingen 6

Stadtwerke Duisburg Aktiengesellschaft, DE, Duisburg 5

Stadtwerke Dülmen Dienstleistungs- und Beteiligungs-GmbH
& Co. KG, DE, Dülmen 4

Stadtwerke Dülmen Verwaltungs-GmbH, DE, Dülmen 6

Stadtwerke Düren GmbH, DE, Düren 1, 9

Stadtwerke Ebermannstadt Versorgungsbetriebe GmbH, DE,
Ebermannstadt 6

Stadtwerke Eggenfelden GmbH, DE, Eggenfelden 6

Stadtwerke Emmerich GmbH, DE, Emmerich am Rhein 6

Stadtwerke Essen Aktiengesellschaft, DE, Essen 5

Stadtwerke Frankfurt (Oder) GmbH, DE, Frankfurt (Oder) 5

Stadtwerke Garbsen GmbH, DE, Garbsen 6

Stadtwerke Geesthacht GmbH, DE, Geesthacht 6

Stadtwerke Geldern GmbH, DE, Geldern 6

Stadtwerke Gescher GmbH, DE, Gescher 6

49.5

48.0

29.0

36.8

26.7

24.9

49.0

25.1

49.0

36.0

35.0

24.5

36.0

49.0

24.9

49.0

45.0

40.0

30.0

41.0

49.0

20.0

50.0

49.9

25.0

49.0

24.9

29.0

39.0

24.9

49.0

25.1

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

231

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Stadtwerke GmbH Bad Kreuznach, DE, Bad Kreuznach 5

Stadtwerke Goch Netze GmbH & Co. KG, DE, Goch 6

Stadtwerke Goch Netze Verwaltungsgesellschaft mbH, DE, Goch 6

Stadtwerke Haan GmbH, DE, Haan 6

Stadtwerke Husum GmbH, DE, Husum 6

Stadtwerke Kamp-Lintfort GmbH, DE, Kamp-Lintfort 5

Stadtwerke Kerpen GmbH & Co. KG, DE, Kerpen 6

Stadtwerke Kirn GmbH, DE, Kirn/Nahe 6

Stadtwerke Langenfeld GmbH, DE, Langenfeld 6

Stadtwerke Lingen GmbH, DE, Lingen (Ems) 4

Stadtwerke Lübz GmbH, DE, Lübz 6

Stadtwerke Ludwigsfelde GmbH, DE, Ludwigsfelde 6

Stadtwerke Meerane GmbH, DE, Meerane 6

Stadtwerke Merseburg GmbH, DE, Merseburg 5

Stadtwerke Merzig Gesellschaft mit beschränkter Haftung, DE,
Merzig 5

Stadtwerke Neunburg vorm Wald Strom GmbH, DE,
Neunburg vorm Wald 6

Stadtwerke Nordfriesland GmbH, DE, Niebüll 6

Stadtwerke Oberkirch GmbH, DE, Oberkirch 6

Stadtwerke Olching Stromnetz GmbH & Co. KG, DE, Olching 6

Stadtwerke Olching Stromnetz Verwaltungs GmbH, DE, Olching 6

Stadtwerke Parchim GmbH, DE, Parchim 6

Stadtwerke Premnitz GmbH, DE, Premnitz 6

Stadtwerke Pritzwalk GmbH, DE, Pritzwalk 6

Stadtwerke Ratingen GmbH, DE, Ratingen 5

Stadtwerke Reichenbach/Vogtland GmbH, DE,
Reichenbach im Vogtland 6

Stadtwerke Ribnitz-Damgarten GmbH, DE, Ribnitz-Damgarten 6

Stadtwerke Roßlau Fernwärme GmbH, DE, Dessau-Roßlau 6

Stadtwerke Saarlouis GmbH, DE, Saarlouis 5

Stadtwerke Schwarzenberg GmbH, DE, Schwarzenberg/Erzgeb. 6

Stadtwerke Schwedt GmbH, DE, Schwedt/Oder 6

Stadtwerke Siegburg GmbH & Co. KG, DE, Siegburg 6

Stadtwerke Steinfurt, Gesellschaft mit beschränkter Haftung,
DE, Steinfurt 6

Stadtwerke Tornesch GmbH, DE, Tornesch 6

Stadtwerke Unna GmbH, DE, Unna 6

Stadtwerke Velbert GmbH, DE, Velbert 5

Stadtwerke Vilshofen GmbH, DE, Vilshofen 6

Stadtwerke Vlotho GmbH, DE, Vlotho 6

Stadtwerke Wadern GmbH, DE, Wadern 6

Stadtwerke Waltrop Netz GmbH & Co. KG, DE, Waltrop 6

Stadtwerke Weilburg GmbH, DE, Weilburg 6

Stadtwerke Weißenfels Gesellschaft mit beschränkter Haftung,
DE, Weißenfels 6

24.5

25.1

49.9

49.0

25.1

49.0

20.0

40.0

25.0

29.0

24.5

40.0

49.9

24.9

49.9

33.3

49.0

25.2

35.0

49.0

24.8

24.5

39.0

49.0

27.5

37.8

49.0

33.0

49.0

24.0

30.4

41.0

24.9

49.0

25.1

20.0

24.5

Stadtwerke Werl GmbH, DE, Werl 6

Stadtwerke Wesel Strom-Netzgesellschaft mbH & Co. KG, DE,
Wesel 6

Stadtwerke Wismar GmbH, DE, Wismar 5

Stadtwerke Wittenberge GmbH, DE, Wittenberge 6

Stadtwerke Wolfenbüttel GmbH, DE, Wolfenbüttel 6

Stadtwerke Wolmirstedt GmbH, DE, Wolmirstedt 6

Stadtwerke Wülfrath Netz GmbH & Co. KG, DE, Wülfrath 2

Stadtwerke Zeitz Gesellschaft mit beschränkter Haftung, DE, Zeitz 6

STAWAG Abwasser GmbH, DE, Aachen 2

STAWAG Infrastruktur Monschau GmbH & Co. KG, DE, Monschau 2

STAWAG Infrastruktur Monschau Verwaltungs GmbH, DE,
Monschau 2

STAWAG Infrastruktur Simmerath GmbH & Co. KG, DE,
Simmerath 2

STAWAG Infrastruktur Simmerath Verwaltungs GmbH, DE,
Simmerath 2

STEAG Windpark Ullersdorf GmbH & Co. KG, DE, Jamlitz 6

Stibbe Kälte-Klima-Technik GmbH & Co. KG, DE, Garbsen 2

Strom Germering GmbH, DE, Germering 2

Stromnetz Diez GmbH und Co.KG, DE, Diez 6

Stromnetz Diez Verwaltungsgesellschaft mbH, DE, Diez 6

Stromnetz Euskirchen GmbH & Co. KG, DE, Euskirchen 6

Stromnetz Friedberg GmbH & Co. KG, DE, Friedberg 6

Stromnetz Gersthofen GmbH & Co. KG, DE, Gersthofen 6

Stromnetz Günzburg GmbH & Co. KG, DE, Günzburg 6

Stromnetz Günzburg Verwaltungs GmbH, DE, Günzburg 6

Stromnetz Hallbergmoos GmbH & Co. KG, DE, Hallbergmoos 6

Stromnetz Hallbergmoos Verwaltungs GmbH, DE, Hallbergmoos 6

Stromnetz Hofheim GmbH & Co. KG, DE, Hofheim am Taunus 6

Stromnetz Hofheim Verwaltungs GmbH, DE, Hofheim am Taunus 6

Stromnetz Kulmbach GmbH & Co. KG, DE, Kulmbach 6

Stromnetz Kulmbach Verwaltungs GmbH, DE, Kulmbach 6

Stromnetz Neckargemünd GmbH, DE, Neckargemünd 6

Stromnetz Pulheim GmbH & Co. KG, DE, Pulheim 6

Stromnetz Pullach GmbH, DE, Pullach im Isartal 6

Stromnetz Traunreut GmbH & Co. KG, DE, Traunreut 6

Stromnetz Traunreut Verwaltungs GmbH, DE, Traunreut 6

Stromnetz Verbandsgemeinde Katzenelnbogen GmbH & Co.
KG, DE, Katzenelnbogen 6

Stromnetz Verbandsgemeinde Katzenelnbogen Verwaltungs-
gesellschaft mbH, DE, Katzenelnbogen 6

Stromnetz VG Diez GmbH und Co. KG, DE, Altendiez 6

STROMNETZ VG DIEZ Verwaltungsgesellschaft mbH, DE,
Altendiez 6

Stromnetz Weiden i.d.OPf. GmbH & Co. KG, DE, Weiden i.d.OPf. 6

25.1

25.0

49.0

22.7

26.0

49.4

100.0

24.8

100.0

20.8

100.0

90.0

25.1

49.0

49.9

25.1

49.0

232

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

Stromnetz Weilheim GmbH & Co. KG, DE, Regensburg 2

Stromnetz Weilheim Verwaltungs GmbH, DE, Regensburg 2

Stromnetz Würmtal GmbH & Co. KG, DE, Planegg 2

Stromnetz Würmtal Verwaltungs GmbH, DE, Planegg 2

Stromnetze Peiner Land GmbH, DE, Ilsede 6

Stromnetzgesellschaft Bad Salzdetfurth - Diekholzen mbH &
Co. KG, DE, Bad Salzdetfurth 6

Stromnetzgesellschaft Barsinghausen GmbH & Co. KG, DE,
Barsinghausen 6

Strom-Netzgesellschaft Bedburg GmbH & Co. KG, DE, Bedburg 6

Stromnetzgesellschaft Bramsche mbH & Co. KG, DE, Bramsche 6

Stromnetzgesellschaft Datteln GmbH & Co. KG, DE, Datteln 6

Strom-Netzgesellschaft Elsdorf GmbH & Co. KG, DE, Elsdorf 6

Stromnetzgesellschaft Gescher GmbH & Co. KG, DE, Gescher 6

Strom-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG,
DE, Kerpen 6

Strom-Netzgesellschaft Kreisstadt Bergheim GmbH & Co. KG,
DE, Bergheim 6

Stromnetzgesellschaft Mettmann mbH & Co. KG, DE, Mettmann 6

Stromnetzgesellschaft Neuenhaus mbH & Co. KG, DE, Neuenhaus 6

Stromnetzgesellschaft Neuenhaus Verwaltungs-GmbH, DE,
Neuenhaus 6

Stromnetzgesellschaft Neunkirchen-Seelscheid mbH & Co. KG,
DE, Neunkirchen-Seelscheid 6

Stromnetzgesellschaft Schwalmtal mbH & Co. KG, DE,
Schwalmtal 6

Stromnetzgesellschaft Seelze GmbH & Co. KG, DE, Seelze 6

Stromnetzgesellschaft Siegen GmbH & Co.KG, DE, Siegen 6

Strom-Netzgesellschaft Voerde mbH & Co. KG, DE, Voerde 6

Stromnetzgesellschaft Windeck mbH & Co. KG, DE, Siegburg 6

Stromnetzgesellschaft Wunstorf GmbH & Co. KG, DE, Wunstorf 6

Stromversorgung Angermünde GmbH, DE, Angermünde 6

Stromversorgung Penzberg GmbH & Co. KG, DE, Penzberg 6

Stromversorgung Pfaffenhofen a. d. Ilm GmbH & Co. KG, DE,
Pfaffenhofen 6

Stromversorgung Pfaffenhofen a. d. Ilm Verwaltungs GmbH,
DE, Pfaffenhofen 6

49.0

25.1

49.0

25.1

49.0

51.0

49.0

25.1

49.9

49.0

Stromversorgung Ruhpolding Gesellschaft mit beschränkter
Haftung, DE, Ruhpolding 2

100.0

Stromversorgung Unterschleißheim GmbH & Co. KG, DE,
Unterschleißheim 6

Stromversorgung Unterschleißheim Verwaltungs GmbH, DE,
Unterschleißheim 6

Stromverwaltung Schwalmtal GmbH, DE, Schwalmtal 6

strotög GmbH Strom aus Töging, DE, Töging am Inn 6

StWB Stadtwerke Brandenburg an der Havel GmbH & Co. KG,
DE, Brandenburg an der Havel 5

StWB Verwaltungs GmbH, DE, Brandenburg an der Havel 6

49.0

51.0

50.0

36.8

100.0

74.5

100.0

49.0

SüdWasser GmbH, DE, Erlangen 2

Südwestfalen Netz-Verwaltungsgesellschaft mbH, DE, Netphen 6

Südwestsächsische Netz GmbH, DE, Crimmitschau 2

Süwag Energie AG, DE, Frankfurt am Main 1

Süwag Grüne Energien und Wasser AG & Co. KG, DE,
Frankfurt am Main 1

49.0

Süwag Management GmbH, DE, Frankfurt am Main 2

Süwag Vertrieb AG & Co. KG, DE, Frankfurt am Main 1

SVH Stromversorgung Haar GmbH, DE, Haar 6

SVI-Stromversorgung Ismaning GmbH, DE, Ismaning 6

SVO Holding GmbH, DE, Celle 1

SVO Vertrieb GmbH, DE, Celle 1

SVS-Versorgungsbetriebe GmbH, DE, Stadtlohn 4

SWG Glasfaser Netz GmbH, DE, Geesthacht 6

SWL-energis Netzgesellschaft mbH & Co. KG., DE, Saarbrücken 2

SWL-energis-Geschäftsführungs-GmbH, DE, Saarbrücken 2

SWN Stadtwerke Neustadt GmbH, DE, Neustadt bei Coburg 6

SWS Energie GmbH, DE, Stralsund 5

SWT trilan GmbH, DE, Trier 6

SWTE Netz GmbH & Co. KG, DE, Ibbenbüren 5

SWTE Netz Verwaltungsgesellschaft mbH, DE, Ibbenbüren 6

Syna GmbH, DE, Frankfurt am Main 1

Szczecińska Energetyka Cieplna Sp. z o.o., PL, Szczecin 1

Szombathelyi Erőmű Zrt., HU, Budapest 2

Szombathelyi Távhőszolgáltató Kft., HU, Szombathely 6

Tankey B.V., NL, 's-Hertogenbosch 5

Technische Werke Naumburg GmbH, DE, Naumburg (Saale) 6

Tegel Energie GbR, DE, Berlin 6

The Power Generation Company Limited, GB, Coventry 2

Thermondo GmbH, DE, Berlin 6

TNA Talsperren- und Grundwasser-Aufbereitungs- und
Vertriebsgesellschaft mbH, DE, Nonnweiler 6

TRANSELEKTRO, s.r.o., SK, Košice 6

TraveNetz GmbH, DE, Lübeck 5

Triangeln 10 i Norrköping Fastighets AB, SE, Malmö 2

Triangeln 11 AB, SE, Malmö 2

Triangeln 15 i Norrköping Fastighets AB, SE, Malmö 2

Trinkwasserverbund Niederrhein TWN GmbH, DE, Grevenbroich 6

Trocknungsanlage Zolling GmbH & Co. KG, DE, Zolling 6

Trocknungsanlage Zolling Verwaltungs GmbH, DE, Zolling 6

TWE Technische Werke der Gemeinde Ensdorf GmbH, DE,
Ensdorf 6

TWL Technische Werke der Gemeinde Losheim GmbH, DE,
Losheim am See 6

TWM Technische Werke der Gemeinde Merchweiler
Gesellschaft mit beschränkter Haftung, DE, Merchweiler 6

100.0

49.0

100.0

77.6

100.0

50.0

25.1

50.1

100.0

30.0

33.4

100.0

25.1

49.0

26.0

33.0

100.0

66.5

80.0

25.0

42.5

47.0

50.0

100.0

20.3

22.8

25.5

25.1

100.0

33.3

49.0

49.9

49.0

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

233

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

Stake (%)

TWRS Technische Werke der Gemeinde Rehlingen-Siersburg
GmbH, DE, Rehlingen-Siersburg 6

TWS Technische Werke der Gemeinde Saarwellingen GmbH,
DE, Saarwellingen 6

Überlandwerk Krumbach Gesellschaft mit beschränkter
Haftung, DE, Krumbach 1

Überlandwerk Leinetal GmbH, DE, Gronau 6

Überlandwerk Mittelbaden GmbH & Co. KG, DE, Lahr 4

Überlandwerk Mittelbaden Verwaltungs-GmbH, DE, Lahr 6

Ultra-Fast Charging Venture Scandinavia ApS, DK, Copenhagen 6

Umspannwerk Miltzow-Mannhagen GbR, DE, Sundhagen 6

Union Grid s.r.o., CZ, Prague 6

UNTERE ILLER AKTIENGESELLSCHAFT, DE, Landshut 6

Untermain EnergieProjekt AG & Co. KG., DE, Kelsterbach 6

Untermain Erneuerbare Energien GmbH, DE, Raunheim 6

URANIT GmbH, DE, Jülich 4

Utility Debt Services Limited, GB, Coventry 2

Vandebron B.V., NL, Amsterdam 1

Vandebron Energie B.V., NL, Amsterdam 1

Vandebron Services B.V., NL, Amsterdam 1

VEBA Electronics LLC, US, Wilmington 1

VEBACOM Holdings LLC, US, Wilmington 2

Veiligebuurt B.V., NL, Enschede 6

VEM Neue Energie Muldental GmbH & Co. KG, DE, Markkleeberg 6

Versorgungsbetrieb Waldbüttelbrunn GmbH, DE,
Waldbüttelbrunn 6

Versorgungsbetriebe Helgoland GmbH, DE, Helgoland 6

Versorgungskasse Energie (VVaG) i. L., DE, Hanover 6

Versuchsatomkraftwerk Kahl GmbH, DE, Karlstein 6

Verteilnetz Plauen GmbH, DE, Plauen 1

Verteilnetze Energie Weißenhorn GmbH & Co.KG, DE, Weißenhorn 6

Verwaltungsgesellschaft Dorsten Netz mbH, DE, Dorsten 6

Verwaltungsgesellschaft Energie Weißenhorn GmbH, DE,
Weißenhorn 6

Verwaltungsgesellschaft Energieversorgung Timmendorfer
Strand mbH, DE, Timmendorfer Strand 2

Verwaltungsgesellschaft GKW Dillingen mbH, DE, Dillingen 6

Verwaltungsgesellschaft Scharbeutzer Energie- und
Netzgesellschaft mbH, DE, Scharbeutz 2

"Veszprém-Kogeneráció" Energiatermelő Zrt., HU, Budapest 2

Visioncash, GB, Coventry 1

Visualix GmbH, DE, Berlin 6

VKB-GmbH, DE, Neunkirchen 1

Volta Limburg B.V., NL, Schinnen 1

Volta Participaties 1 BV, NL, Schinnen 1

Volta Service B.V., NL, Schinnen 1

35.0

51.0

74.6

48.0

37.8

50.0

26.8

34.0

40.0

49.0

25.0

50.0

100.0

49.9

50.0

49.0

69.6

20.0

100.0

35.0

49.0

35.0

51.0

25.2

51.0

100.0

25.0

50.0

100.0

Volta Solar B.V., NL, Heerlen 1

Volta Solar VOF, NL, Heerlen 1

VOLTARIS GmbH, DE, Maxdorf 6

VSE - Windpark Merchingen GmbH & Co. KG, DE, Saarbrücken 2

VSE - Windpark Merchingen VerwaltungsGmbH, DE, Saarbrücken 2

VSE Agentur GmbH, DE, Saarbrücken 2

VSE Aktiengesellschaft, DE, Saarbrücken 1

VSE Call centrum s.r.o., SK, Košice 2

VSE Ekoenergia, s.r.o., SK, Košice 2

VSE NET GmbH, DE, Saarbrücken 1

VSE Verteilnetz GmbH, DE, Saarbrücken 1

VSE-Stiftung Gemeinnützige Gesellschaft zur Förderung von
Bildung, Erziehung, Kunst und Kultur mbH, DE, Saarbrücken 2

VWS Verbundwerke Südwestsachsen GmbH, DE, Lichtenstein/Sa. 1

Východoslovenská distribucná, a.s., SK, Košice 1

Východoslovenská energetika a.s., SK, Košice 1

Východoslovenská energetika Holding a.s., SK, Košice 1, 9

Wärmeenergie Verwaltungs GmbH, DE, Essen 2

Wärmeversorgung Limburg GmbH, DE, Limburg an der Lahn 6

Wärmeversorgung Mücheln GmbH, DE, Mücheln 6

Wärmeversorgung Schenefeld GmbH, DE, Schenefeld 6

Wärmeversorgung Schwaben GmbH, DE, Augsburg 2

Wärmeversorgung Wachau GmbH, DE, Markkleeberg 6

Wärmeversorgung Würselen GmbH, DE, Stolberg/RhId. 2

Wärmeversorgungsgesellschaft Königs Wusterhausen mbH,
DE, Königs Wusterhausen 2

Wasser- und Abwassergesellschaft Vienenburg mbH, DE, Goslar 6

Wasserkraft Baierbrunn GmbH, DE, Unterschleißheim 6

Wasserkraft Farchet GmbH, DE, Bad Tölz 2

Wasserkraftnutzung im Landkreis Gifhorn GmbH, DE,
Müden/Aller 6

Wasser-Netzgesellschaft Kolpingstadt Kerpen GmbH & Co. KG,
DE, Kerpen 6

Wasserverbund Niederrhein Gesellschaft mit beschränkter
Haftung, DE, Moers 6

Wasserversorgung Main-Taunus GmbH, DE, Frankfurt am Main 6

Wasserversorgung Sarstedt GmbH, DE, Sarstedt 6

Wasserwirtschafts- und Betriebsgesellschaft Grafenwöhr
GmbH, DE, Grafenwöhr 6

Wasserzweckverband der Gemeinde Nalbach, DE, Nalbach 6

WB Wärme Berlin GmbH, DE, Schönefeld 6

WEA Schönerlinde GbR mbH Kiepsch & Bosse &
Beteiligungsges. e.disnatur mbH, DE, Berlin 2

WeAre GmbH, DE, Berlin 6

weeenergie GmbH, DE, Dresden 6

Weissmainkraftwerk Röhrenhof Aktiengesellschaft, DE,
Bad Berneck 2

100.0

60.0

50.0

100.0

51.4

100.0

97.9

100.0

49.0

100.0

50.0

49.0

40.0

100.0

49.0

100.0

50.1

49.0

50.0

60.0

50.0

25.1

38.5

49.0

29.0

49.0

51.0

70.0

20.0

40.0

93.5

234

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Stake (%)

Name, location

WEK Windenergie Kolkwitz GmbH & Co. KG, DE, Kolkwitz 2

Welver Netz GmbH & Co. KG, DE, Welver 6

Wendelsteinbahn Gesellschaft mit beschränkter Haftung, DE,
Brannenburg am Inn 2

Wendelsteinbahn Verteilnetz GmbH, DE, Brannenburg am Inn 2

werkkraft GmbH, DE, Munich 6

Werne Netz GmbH & Co. KG, DE, Werne 6

Westenergie AG, DE, Essen 1

Westenergie Aqua GmbH, DE, Mülheim an der Ruhr 1, 8

Westenergie Breitband GmbH, DE, Essen 1, 8

Westenergie Metering GmbH, DE, Mülheim an der Ruhr 1

Westenergie Rheinhessen Beteiligungs GmbH, DE, Essen 1, 8

Westerwald-Netz GmbH, DE, Betzdorf-Alsdorf 1

Westnetz Asset Komplementär GmbH, DE, Essen 2

Westnetz GmbH, DE, Dortmund 1

Westnetz Immobilien GmbH & Co. KG, DE, Essen 1

Westnetz Kommunikationsleitungen GmbH & Co. KG, DE, Essen 1

WET Windenergie Trampe GmbH & Co. KG, DE, Lützen 2

WEVG Salzgitter GmbH & Co. KG, DE, Salzgitter 1

WEVG Verwaltungs GmbH, DE, Salzgitter 2

WGK Windenergie Großkorbetha GmbH & Co. KG, DE, Lützen 2

whp Tiefbaugesellschaft mbH & Co. KG, DE, Mönchengladbach 2

Willems Koeltechniek B.V., NL, Beek 1

Windenergie Briesensee GmbH, DE, Neu Zauche 6

Windenergie Frehne GmbH & Co. KG, DE, Lützen 6

100.0

49.0

100.0

50.0

49.0

100.0

50.2

75.0

100.0

31.5

41.0

Windenergie Leinetal 2 Verwaltungs GmbH, DE, Freden (Leine) 2

100.0

Windenergie Leinetal GmbH & Co. KG, DE, Freden (Leine) 6

Windenergie Leinetal Verwaltungs GmbH, DE, Freden (Leine) 6

Windenergie Merzig GmbH, DE, Merzig 6

Windenergie Osterburg GmbH & Co. KG, DE, Osterburg (Altmark) 6

Windenergie Osterburg Verwaltungs GmbH, DE, Osterburg
(Altmark) 6

Windenergie Schermbeck-Rüste GmbH & Co.KG, DE, Schermbeck 6

Windenergiepark Heidenrod GmbH, DE, Heidenrod 6

WINDENERGIEPARK WESTKÜSTE GmbH, DE,
Kaiser-Wilhelm-Koog 2

Windkraft Hochheim GmbH & Co. KG, DE, Lützen 2

Windkraft Jerichow-Mangelsdorf I GmbH & Co. KG, DE, Burg 6

26.2

24.9

20.0

49.0

20.3

45.0

80.0

90.0

25.1

Windmüllerei LMP GmbH & Co. KG, DE, Jürgenshagen 2

Windpark Anhalt-Süd (Köthen) OHG, DE, Potsdam 2

Windpark Büschdorf GmbH, DE, Perl 2

Windpark Eschweiler Beteiligungs GmbH, DE, Stolberg/RhId. 6

Windpark Losheim-Britten GmbH, DE, Losheim am See 6

Windpark Lützen GmbH & Co. KG, DE, Lützen 2

Windpark Lützen Infrastruktur GmbH & Co. KG (since 2021
SEW Solarenergie Weißenfels GmbH & Co. KG), DE, Lützen 2

WINDPARK Mutzschen OHG, DE, Potsdam 2

Windpark Naundorf OHG, DE, Potsdam 2

Windpark Nohfelden-Eisen GmbH, DE, Nohfelden 6

Windpark Oberthal GmbH, DE, Oberthal 6

Windpark Paffendorf GmbH & Co. KG, DE, Bergheim 6

Windpark Perl GmbH, DE, Perl 6

Windpark Verwaltungsgesellschaft mbH, DE, Lützen 2

Windpark Wadern-Felsenberg GmbH, DE, Wadern 2

WKH Windkraft Hochheim Management GmbH, DE, Lützen 2

WLN Wasserlabor Niederrhein GmbH, DE, Mönchengladbach 6

WPB Windpark Börnicke GmbH & Co. KG, DE, Lützen 2

WPF Windpark Frankenheim GmbH & Co. KG (since 2021 SPG
Solarpark Guben GmbH & Co. KG), DE, Lützen 2

WPK Windpark Kraasa GmbH & Co. KG, DE, Lützen 2

WTTP B.V., NL, Arnhem 1

WUN Pellets GmbH, DE, Wunsiedel 6

WVG - Warsteiner Verbundgesellschaft mbH, DE, Warstein 6

WVL Wasserversorgung Losheim GmbH, DE, Losheim am See 6

WVM Wärmeversorgung Maßbach GmbH, DE, Maßbach 6

WVW Wasser- und Energieversorgung Kreis St. Wendel
Gesellschaft mit beschränkter Haftung, DE, St. Wendel 6

WWS Wasserwerk Saarwellingen GmbH, DE, Saarwellingen 6

WWW Wasserwerk Wadern GmbH, DE, Wadern 6

xtechholding GmbH, DE, Berlin 6

Zagrebacke otpadne vode d.o.o., HR, Zagreb 4

Zagrebacke otpadne vode-upravljanje i pogon d.o.o., HR, Zagreb 6

Západoslovenská energetika a.s. (ZSE), SK, Bratislava 4

Zenit-SIS GmbH i.L., DE, Düsseldorf 2

ZonnigBeheer B.V., NL, Lelystad 1

Zwickauer Energieversorgung GmbH, DE, Zwickau 5

Stake (%)

100.0

83.3

51.0

55.1

50.0

100.0

77.8

66.7

50.0

35.0

49.0

42.0

100.0

45.0

100.0

25.1

49.9

22.2

28.1

49.0

28.4

48.5

29.0

49.0

100.0

27.0

NotesReport of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

235

Disclosures Pursuant to Section 313 (2) HGB of Companies in Which Equity Investments Are Held
(as of December 31, 2020)

Name, location

Consolidated investment funds

ASF, DE, Düsseldorf 1

HANSEFONDS, DE, Düsseldorf 1

MI-FONDS 178, DE, Frankfurt am Main 1

MI-FONDS F55, DE, Frankfurt am Main 1

MI-FONDS G55, DE, Frankfurt am Main 1

MI-FONDS J55, DE, Frankfurt am Main 1

MI-FONDS K55, DE, Frankfurt am Main 1

OB 2, DE, Düsseldorf 1

OB 5, DE, Düsseldorf 1

Name, location

Investments Pursuant to Section 313 (2) No. 5 HGB

BEW Bergische Energie- und Wasser-Gesellschaft mit beschränkter Haftung, DE, Wipperfürth 7

Energieversorgung Limburg Gesellschaft mit beschränkter Haftung, DE, Limburg an der Lahn 7

e-werk Sachsenwald GmbH, DE, Reinbek 7

Herzo Werke GmbH, DE, Herzogenaurach 7

infra fürth gmbh, DE, Fürth 7

Nord Stream AG, CH, Zug 7, 14

PSI Software AG, DE, Berlin 7

Stadtwerke Bamberg Energie- und Wasserversorgungs GmbH, DE, Bamberg 7

Stadtwerke Detmold GmbH, DE, Detmold 7

Stadtwerke Hof Energie+Wasser GmbH, DE, Hof 7

Stadtwerke Meerbusch GmbH, DE, Meerbusch 7

Stadtwerke Neuss Energie und Wasser GmbH, DE, Neuss 7

Stadtwerke Straubing Strom und Gas GmbH, DE, Straubing 7

Stadtwerke Wertheim GmbH, DE, Wertheim 7

Stadtwerke Willich Gesellschaft mit beschränkter Haftung, DE, Willich 7

SWT Stadtwerke Trier Versorgungs-GmbH, DE, Trier 7

Stake (%)

100.0

Stake (%)

Equity
€ in millions

Earnings
€ in millions

19.5

10.0

16.0

19.9

15.5

17.8

10.0

12.5

19.9

7.4

17.5

19.9

10.0

7.4

18.7

34.0

28.5

30.1

20.3

77.1

3,001.6

85.8

30.1

31.5

22.1

25.3

88.3

15.8

20.5

14.3

55.7

5.3

3.8

4.3

–

424.4

5.0

–

5.8

2.2

–

5.9

10.5

Other
Information

238 Declaration of the Management Board

239

Independent Auditor’s Report

246

Independent Practitioner’s Report on Non-financial Reporting

248 Boards
248 Supervisory Board (and Information on Other Directorships)
250 Management Board (and Information on Other Directorships)

251 Summary of Financial Highlights

253

Financial Calendar

Declaration of the Management Board

238

Declaration of the Management Board

To the best of our knowledge, we declare that, in accordance
with applicable financial reporting principles, the Consolidated
Financial Statements give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group, and
that the Group Management Report, which is combined with
the management report of E.ON SE, provides a fair review of
the development and performance of the business and the
position of the E.ON Group, together with a description of the
principal opportunities and risks associated with the expected
development of the Group.

Essen, March 15, 2021

The Management Board

Teyssen

Birnbaum

König

Spieker

Wildberger

Independent Auditor’s Report

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

239

The following copy of the auditor’s report also includes a “Report
on the audit of the electronic renderings of the financial state-
ments and the management report prepared for disclosure pur-
poses in accordance with § 317 Abs. 3b HGB” (“Separate report
on ESEF conformity“). The subject matter (ESEF documents)
to which the Separate report on ESEF conformity relates is not
attached. The audited ESEF documents can be inspected in or
retrieved from the Federal Gazette.

Independent Auditor’s Report

To E.ON SE, Essen

Report on the Audit of the Consolidated
Financial Statements and of the Group
Management Report

Audit Opinions
We have audited the consolidated financial statements of E.ON SE,
Essen, and its subsidiaries (the Group), which comprise the
consolidated balance sheet as at December 31, 2020, and the
consolidated statement of income, consolidated statement
of recognized income and expenses, consolidated statement
of changes in equity and consolidated statement of cash flows
for the financial year from January 1 to December 31, 2020,
and notes to the consolidated financial statements, including
a summary of significant accounting policies. In addition, we
have audited the group management report of E.ON SE, which is
combined with the Company’s management report, for the
financial year from January 1 to December 31, 2020. In accor-
dance with the German legal requirements, we have not audited
the content of the statement on corporate governance pursuant
to § [Article] 289f HGB [Handelsgesetzbuch: German Commer-
cial Code] and § 315d HGB.

In our opinion, on the basis of the knowledge obtained in the audit,

• the accompanying consolidated financial statements com-

ply, in all material respects, with the IFRSs as adopted by the
EU and the additional requirements of German commercial
law pursuant to § 315e Abs. [paragraph] 1 HGB and, in com-
pliance with these requirements, give a true and fair view of
the assets, liabilities, and financial position of the Group as
at December 31, 2020, and of its financial performance for
the financial year from January 1 to December 31, 2020, and

• the accompanying group management report as a whole
provides an appropriate view of the Group’s position. In all
material respects, this group management report is consis-
tent with the consolidated financial statements, complies
with German legal requirements and appropriately presents
the opportunities and risks of future development. Our audit
opinion on the group management report does not cover the
content of the statement on corporate governance referred
to above.

Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare
that our audit has not led to any reservations relating to the
legal compliance of the consolidated financial statements and
of the group management report.

Basis for the Audit Opinions
We conducted our audit of the consolidated financial statements
and of the group management report in accordance with
§ 317 HGB and the EU Audit Regulation (No. 537/2014, referred
to subsequently as “EU Audit Regulation”) in compliance with
German Generally Accepted Standards for Financial Statement
Audits promulgated by the Institut der Wirtschaftsprüfer [Insti-
tute of Public Auditors in Germany] (IDW). We performed the
audit of the consolidated financial statements in supplementary
compliance with the International Standards on Auditing (ISAs).
Our responsibilities under those requirements, principles and
standards are further described in the “Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements and of
the Group Management Report“ section of our auditor’s report.
We are independent of the group entities in accordance with
the requirements of European law and German commercial and
professional law, and we have fulfilled our other German pro-
fessional responsibilities in accordance with these requirements.
In addition, in accordance with Article 10 (2) point (f) of the EU
Audit Regulation, we declare that we have not provided non-audit
services prohibited under Article 5 (1) of the EU Audit Regulation.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinions on
the consolidated financial statements and on the group manage-
ment report.

Key Audit Matters in the Audit of the Consolidated Financial
Statements
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
consolidated financial statements for the financial year from
January 1 to December 31, 2020. These matters were addressed
in the context of our audit of the consolidated financial state-
ments as a whole, and in forming our audit opinion thereon; we
do not provide a separate audit opinion on these matters.

In our view, the matters of most significance in our audit were
as follows:

1 Subsequent accounting relating to the acquisition of innogy’s

network and sales businesses in financial year 2019

2 Recoverability of goodwill

Our presentation of these key audit matters has been structured
in each case as follows:

1 Matter and issue
2 Audit approach and findings
3 Reference to further information

Independent Auditor’s Report

240

as part of the consideration transferred. We assessed these
pursuant to the contractual bases, the settlement agreement
between E.ON SE and RWE AG in the 2020 financial year
and the payments made. Furthermore, we assessed the final
recognition and measurement of the assets and liabilities
underlying the business combination. This included their
identification, the application of consistent accounting and
measurement policies, and their fair value accounting as of
the date of first-time consolidation. In this context, one focal
point for our audit was to address the final external reports for
the purchase price allocation. As well as assessing the exter-
nal appraiser’s professional qualifications, we also assessed
the appropriateness of, among other things, the models on
which the valuations were based, and the valuation inputs
and assumptions used. Given the special features relating to
the calculation of the fair values in the context of the busi-
ness combination, our internal valuation specialists assisted
in the process. Furthermore, we assessed the calculation of
the final goodwill and its allocation to the cash-generating
units or groups of cash-generating units for the purposes of
impairment testing. Our focus in this context was on the
proper allocation of the goodwill to those cash-generating
units or groups of cash-generating units that are expected
to benefit from the synergies generated by acquiring innogy’s
network and sales businesses. As part of our audit, we criti-
cally assessed the synergy planning underlying the allocation,
the assumptions forming the basis, and the assignment
of direct and indirect synergies. Furthermore, we critically
assessed the methodological approach and verified the mathe-
matical correctness of the model underlying the allocation.
Other focal points of our audit were to assess the disclosures
in the notes required under IFRS 3 and the presentation as
part of segment reporting. In relation to the reorganization of
the segments, we assessed in particular whether the innogy
companies were allocated to the E.ON reporting segments in
accordance with the requirements of IFRS 8.

Hereinafter we present the key audit matters:

1 Subsequent accounting relating to the acquisition of innogy’s

network and sales businesses in financial year 2019
1 Pursuant to the agreements entered into between E.ON

and RWE on March 12, 2018, on September 18, 2019 E.ON
obtained control within the meaning of IFRS 10 of the net-
work and sales businesses of innogy SE. The acquisition was
accounted for as a business combination using the acquisition
method in accordance with IFRS 3. The preliminary fair value
measurement of the identifiable assets acquired and liabilities
assumed, as initially carried out in financial year 2019, was
finalized and retrospectively adjusted at the acquisition date
within the measurement period of one year provided for in
IFRS 3. The new knowledge and information obtained during
the measurement period resulted in an adjustment of the
acquired net assets less non-controlling interests to a total
of EUR -1.0 billion. The consideration transferred, which also
contained a cash payment subject to contractually agreed
price adjustments, was measured in the total amount of
EUR 14.7 billion as of the end of the measurement period.
Consequently, the business combination resulted in goodwill
of EUR 15.7 billion. For the purposes of impairment testing,
in financial year 2020 this was allocated in accordance with
IAS 36 to the existing cash-generating units or groups of
cash-generating units that are expected to benefit from the
synergies generated by the business combination and that
have already included the innogy businesses since the seg-
ments were reorganized as of January 1, 2020.

Due to the highly complex nature of the transaction as a

whole, the associated complex calculation of the consideration
transferred, the estimation uncertainties and the scope of
discretion in measuring the assets acquired and liabilities
assumed, as well as the overall material effect of the amounts
involved in the acquisition on the net assets, liabilities, finan-
cial position and financial performance, the subsequent
accounting relating to the acquisition of innogy’s network
and sales businesses in financial year 2019 was of particular
significance in the context of our audit.

2 As part of our audit, we assessed the effects of the new

knowledge and information obtained within the measure-
ment period in accordance with IFRS 3 on the first-time con-
solidation of innogy as of September 18, 2019. One focus
was on the contractually agreed purchase price adjustments

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

241

annuity. By doing so, expectations about future market
developments and assumptions about the development of
macroeconomic and regulatory drivers as well as the
expected impact of the ongoing COVID-19 pandemic on the
Group’s business are also taken into account. The discount
rate used is the weighted average cost of capital for the
relevant cash-generating unit or group of cash-generating
units in each case. The impairment test determined that no
impairment was necessary on the existing goodwill in financial
year 2020.

The result of this measurement depends to a large extent on
the executive directors’ estimates of the amount of future
cash flows, the discount rate applied and the growth rate.
The assumptions about the long-term development of the
underlying contributions to earnings and the relevant regu-
latory influencing factors are also of particular importance.
Due to the complexity of the measurement and the consid-
erable uncertainties relating to the underlying assumptions,
this matter was of particular significance in the context of
our audit.

2 As part of our audit, we assessed, among other things,

whether the measurement model for performing impairment
testing properly reflects the conceptual requirements of the
relevant standards and whether the calculations in the mod-
els were correctly performed. The critical assessment of the
key assumptions underlying the measurements was the focal
point of our audit. We evaluated the appropriateness of the
future cash flows used for the measurement by reconciling
this data against general and sector-specific market expec-
tations and by comparing it with the current budgets in the
Group investment, finance and HR plan for 2021 prepared
by the executive directors and approved by the supervisory
board on December 15, 2020 as well as the medium-term
planning for financial years 2022 and 2023 prepared by the
executive directors and acknowledged by the supervisory
board. Among other things, we assessed how the long-term

Overall, we were able to satisfy ourselves that the acquisi-

tion was appropriately presented in the financial statements
(including the retrospective adjustments made in financial
year 2020 in the context of the measurement period under
IFRS 3), that the estimates and assumptions made by the
executive directors are substantiated and sufficiently docu-
mented, and that the corresponding disclosures in the notes
are appropriate.

3 The Company’s disclosures relating to subsequent consoli-
dation are contained in notes 5 and 33 to the consolidated
financial statements.

2 Recoverability of goodwill
1 In the consolidated financial statements of E.ON SE as of

December 31, 2020, goodwill amounting to EUR 17.8 billion
is reported under the “Goodwill” balance sheet item. In the
third quarter of 2020, the EUR 15.7 billion in goodwill arising
from the acquisition of innogy’s network and sales businesses
was allocated to the existing cash-generating units or groups
of cash-generating units for the purposes of impairment
testing and subsequently tested for impairment together with
the existing goodwill in the context of the annual impair-
ment test.

Goodwill is tested for impairment on a regular basis in the

fourth quarter of each year, or when there are indications of
impairment, to determine any possible need for write-downs.
The Company allocates goodwill to cash-generating units or
groups of cash-generating units that are generally equivalent
to the E.ON Group’s operating segments. In the context
of the impairment test, the carrying amount of the relevant
cash-generating units or groups of cash-generating units –
including goodwill – is compared with the corresponding
recoverable amount. The basis of valuation in the context of
an impairment test is the present value of the future cash
flows from the cash-generating unit or group of cash-gener-
ating units, which are determined using discounted cash
flow models. The cash flows are based on the E.ON Group’s
medium-term planning for financial years 2021 to 2023.
For the purposes of assessing the recoverability of goodwill,
the three-year detailed planning period is generally extended
by another two years and is then extrapolated based on
assumptions about long-term growth rates in perpetual

Independent Auditor’s Report

242

growth rates used for perpetual annuities were derived
from the observable market data and market expectations,
and reconciled this with the cost of capital applied. We also
assessed the parameters used to determine the discount
rate applied, and evaluated the measurement model. In addi-
tion, we compared the assumptions about the long-term
development of the contributions to earnings and the relevant
regulatory influencing factors against sector-specific expec-
tations. In this context, we also assessed the executive direc-
tors’ estimate as to the impact of the COVID-19 pandemic
on the Group’s business and evaluated how this was taken
into consideration in calculating the future cash flows. Within
the context of our assessment of the recoverability of good-
will, we also evaluated whether the costs for corporate over-
heads were properly determined, allocated, and included in
the impairment tests of the respective cash-generating units
or groups of cash-generating units. Finally, we assessed the
calculation of the carrying amounts of the cash-generating
units or groups of cash-generating units and their comparison
against the respective recoverable amount.

Overall, the valuation parameters and assumptions used by
the executive directors are in line with our expectations and
are also within the ranges considered by us to be reasonable.

3 The Company’s disclosures relating to the recoverability of

goodwill are contained in note 15 to the consolidated financial
statements.

Other Information
The executive directors are responsible for the other information.
The other information comprises the statement on corporate
governance pursuant to § 289f HGB and § 315d HGB.

The other information comprises further the remaining parts
of the annual report – excluding cross-references to external
information – with the exception of the audited consolidated
financial statements, the audited group management report
and our auditor’s report, and the separate non-financial report
pursuant to § 289b Abs. 3 HGB and § 315b Abs. 3 HGB.

Our audit opinions on the consolidated financial statements
and on the group management report do not cover the other
information, and consequently we do not express an audit
opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the
other information and, in so doing, to consider whether the
other information

•

is materially inconsistent with the consolidated financial
statements, with the group management report or our
knowledge obtained in the audit, or

• otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.

Responsibilities of the Executive Directors and the Supervisory
Board for the Consolidated Financial Statements and the Group
Management Report
The executive directors are responsible for the preparation of
the consolidated financial statements that comply, in all material
respects, with IFRSs as adopted by the EU and the additional
requirements of German commercial law pursuant to § 315e
Abs. 1 HGB and that the consolidated financial statements, in
compliance with these requirements, give a true and fair view
of the assets, liabilities, financial position, and financial perfor-
mance of the Group. In addition, the executive directors are
responsible for such internal control as they have determined
necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether
due to fraud or error.

In preparing the consolidated financial statements, the executive
directors are responsible for assessing the Group’s ability to
continue as a going concern. They also have the responsibility
for disclosing, as applicable, matters related to going concern.
In addition, they are responsible for financial reporting based on
the going concern basis of accounting unless there is an inten-
tion to liquidate the Group or to cease operations, or there is no
realistic alternative but to do so.

Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a whole,
provides an appropriate view of the Group’s position and is, in
all material respects, consistent with the consolidated financial
statements, complies with German legal requirements, and

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

243

basis for our audit opinions. The risk of not detecting a mate-
rial misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.

• Obtain an understanding of internal control relevant to the

audit of the consolidated financial statements and of arrange-
ments and measures (systems) relevant to the audit of the
group management report in order to design audit procedures
that are appropriate in the circumstances, but not for the
purpose of expressing an audit opinion on the effectiveness
of these systems.

• Evaluate the appropriateness of accounting policies used by
the executive directors and the reasonableness of estimates
made by the executive directors and related disclosures.

• Conclude on the appropriateness of the executive directors’
use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are
required to draw attention in the auditor’s report to the related
disclosures in the consolidated financial statements and
in the group management report or, if such disclosures are
inadequate, to modify our respective audit opinions. Our
conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to be able to con-
tinue as a going concern.

• Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclo-
sures, and whether the consolidated financial statements
present the underlying transactions and events in a manner
that the consolidated financial statements give a true and
fair view of the assets, liabilities, financial position and finan-
cial performance of the Group in compliance with IFRSs as
adopted by the EU and the additional requirements of German
commercial law pursuant to § 315e Abs. 1 HGB.

appropriately presents the opportunities and risks of future
development. In addition, the executive directors are responsible
for such arrangements and measures (systems) as they have
considered necessary to enable the preparation of a group man-
agement report that is in accordance with the applicable German
legal requirements, and to be able to provide sufficient appropri-
ate evidence for the assertions in the group management report.

The supervisory board is responsible for overseeing the Group’s
financial reporting process for the preparation of the consolidated
financial statements and of the group management report.

Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements and of the Group Management Report
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
whether the group management report as a whole provides an
appropriate view of the Group’s position and, in all material
respects, is consistent with the consolidated financial statements
and the knowledge obtained in the audit, complies with the
German legal requirements and appropriately presents the oppor-
tunities and risks of future development, as well as to issue an
auditor’s report that includes our audit opinions on the consoli-
dated financial statements and on the group management report.

Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with § 317 HGB
and the EU Audit Regulation and in compliance with German
Generally Accepted Standards for Financial Statement Audits
promulgated by the Institut der Wirtschaftsprüfer (IDW) and
supplementary compliance with the ISAs will always detect a
material misstatement. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggre-
gate, they could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of these consolidated
financial statements and this group management report.

We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the
consolidated financial statements and of the group manage-
ment report, whether due to fraud or error, design and per-
form audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a

Independent Auditor’s Report

244

• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express audit opinions on the consolidated
financial statements and on the group management report.
We are responsible for the direction, supervision and perfor-
mance of the group audit. We remain solely responsible for
our audit opinions.

• Evaluate the consistency of the group management report with
the consolidated financial statements, its conformity with
German law, and the view of the Group’s position it provides.

• Perform audit procedures on the prospective information
presented by the executive directors in the group manage-
ment report. On the basis of sufficient appropriate audit evi-
dence we evaluate, in particular, the significant assumptions
used by the executive directors as a basis for the prospective
information, and evaluate the proper derivation of the pro-
spective information from these assumptions. We do not
express a separate audit opinion on the prospective infor-
mation and on the assumptions used as a basis. There is a
substantial unavoidable risk that future events will differ
materially from the prospective information.

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficien-
cies in internal control that we identify during our audit.

We also provide those charged with governance with a state-
ment that we have complied with the relevant independence
requirements, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, the related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most sig-
nificance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter.

Other Legal and Regulatory Requirements

Assurance Report in Accordance with § 317 Abs. 3b HGB on
the Electronic Reproduction of the Consolidated Financial
Statements and the Group Management Report Prepared for
Publication Purposes
Reasonable Assurance Conclusion
We have performed an assurance engagement in accordance
with § 317 Abs. 3b HGB to obtain reasonable assurance
about whether the reproduction of the consolidated financial
statements and the group management report (hereinafter
the “ESEF documents”) contained in the attached electronic file
EON_SE_KA_zLB_ESEF-2020-12-31.zip and prepared for
publication purposes complies in all material respects with the
requirements of § 328 Abs. 1 HGB for the electronic reporting
format (“ESEF format”). In accordance with German legal
requirements, this assurance engagement only extends to the
conversion of the information contained in the consolidated
financial statements and the group management report into the
ESEF format and therefore relates neither to the information
contained within this reproduction nor to any other information
contained in the above-mentioned electronic file.

In our opinion, the reproduction of the consolidated financial
statements and the group management report contained in
the above-mentioned attached electronic file and prepared for
publication purposes complies in all material respects with the
requirements of § 328 Abs. 1 HGB for the electronic reporting
format. We do not express any opinion on the information
contained in this reproduction nor on any other information
contained in the above-mentioned electronic file beyond this
reasonable assurance conclusion and our audit opinion on the
accompanying consolidated financial statements and the
accompanying group management report for the financial year
from January 1 to December 31, 2020 contained in the “Report
on the Audit of the Consolidated Financial Statements and on
the Group Management Report” above.

Basis for the Reasonable Assurance Conclusion
We conducted our assurance engagement on the reproduction
of the consolidated financial statements and the group man-
agement report contained in the above-mentioned attached
electronic file in accordance with § 317 Abs. 3b HGB and the
Exposure Draft of IDW Assurance Standard: Assurance in Accor-
dance with § 317 Abs. 3b HGB on the Electronic Reproduction
of Financial Statements and Management Reports Prepared for
Publication Purposes (ED IDW AsS 410) and the International
Standard on Assurance Engagements 3000 (Revised). Accord-
ingly, our responsibilities are further described below in the
“Group Auditor’s Responsibilities for the Assurance Engagement

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

245

• Evaluate the technical validity of the ESEF documents, i.e.,
whether the electronic file containing the ESEF documents
meets the requirements of the Delegated Regulation (EU)
2019/815 in the version applicable as at the balance sheet
date on the technical specification for this electronic file.

• Evaluate whether the ESEF documents enables a XHTML
reproduction with content equivalent to the audited con-
solidated financial statements and to the audited group
management report.

• Evaluate whether the tagging of the ESEF documents with
Inline XBRL technology (iXBRL) enables an appropriate and
complete machine-readable XBRL copy of the XHTML repro-
duction.

Further Information pursuant to Article 10 of the EU Audit
Regulation
We were elected as group auditor by the annual general meeting
on May 28, 2020. We were engaged by the supervisory board
on June 5, 2020. We have been the group auditor of the E.ON SE,
Essen, without interruption since the Company first met the
requirements as a public-interest entity within the meaning of
§ 319a Abs. 1 Satz 1 HGB in the financial year 1965.

We declare that the audit opinions expressed in this auditor’s
report are consistent with the additional report to the audit
committee pursuant to Article 11 of the EU Audit Regulation
(long-form audit report).

German Public Auditor Responsible for the
Engagement

The German Public Auditor responsible for the engagement is
Aissata Touré.

Düsseldorf, March 16, 2021

PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft

Markus Dittmann
Wirtschaftsprüfer
(German Public Auditor)

Aissata Touré
Wirtschaftsprüferin
(German Public Auditor)

on the ESEF Documents” section. Our audit firm has applied
the IDW Standard on Quality Management: Requirements for
Quality Management in the Audit Firm (IDW QS 1).

Responsibilities of the Executive Directors and the Supervisory
Board for the ESEF Documents
The executive directors of the Company are responsible for the
preparation of the ESEF documents including the electronic
reproduction of the consolidated financial statements and the
group management report in accordance with § 328 Abs. 1
Satz 4 Nr. 1 HGB and for the tagging of the consolidated financial
statements in accordance with § 328 Abs. 1 Satz 4 Nr. 2 HGB.

In addition, the executive directors of the Company are respon-
sible for such internal control as they have considered necessary
to enable the preparation of ESEF documents that are free from
material non-compliance with the requirements of § 328 Abs. 1
HGB for the electronic reporting format, whether due to fraud
or error.

The executive directors of the Company are also responsible
for the submission of the ESEF documents together with the
auditor’s report and the attached audited consolidated financial
statements and audited group management report as well as
other documents to be published to the operator of the German
Federal Gazette [Bundesanzeiger].

The supervisory board is responsible for overseeing the prepa-
ration of the ESEF documents as part of the financial reporting
process.

Group Auditor’s Responsibilities for the Assurance Engagement
on the ESEF Documents
Our objective is to obtain reasonable assurance about whether
the ESEF documents are free from material non-compliance
with the requirements of § 328 Abs. 1 HGB, whether due to
fraud or error. We exercise professional judgment and maintain
professional skepticism throughout the assurance engagement.
We also:

•

Identify and assess the risks of material non-compliance
with the requirements of § 328 Abs. 1 HGB, whether due
to fraud or error, design and perform assurance procedures
responsive to those risks, and obtain assurance evidence
that is sufficient and appropriate to provide a basis for our
assurance conclusion.

• Obtain an understanding of internal control relevant to the
assurance engagement on the ESEF documents in order
to design assurance procedures that are appropriate in the
circumstances, but not for the purpose of expressing an
assurance conclusion on the effectiveness of these controls.

Independent Practitioner’s Report
on Non-financial Reporting

246

Independent Practitioner’s Report on a Limited
Assurance Engagement on Non-financial
Reporting

To E.ON SE, Essen

We have performed a limited assurance engagement on the
combined separate non-financial report pursuant to §§ (Articles)
289b Abs. (paragraph) 3 and 315b Abs. 3 HGB (“Handels-
gesetzbuch”: “German Commercial Code”) of E.ON SE, Essen
(hereinafter the “Company”) for the period from 1 January to
31 December 2020 (hereinafter the “Non-financial Report”).

Responsibilities of the Executive Directors

The executive directors of the Company are responsible for
the preparation of the Non-financial Report in accordance with
§§ 315c in conjunction with 289c to 289e HGB.

This responsibility of Company’s executive directors includes
the selection and application of appropriate methods of non-
financial reporting as well as making assumptions and estimates
related to individual non-financial disclosures which are reason-
able in the circumstances. Furthermore, the executive directors
are responsible for such internal control as they have considered
necessary to enable the preparation of a Non-financial Report
that is free from material misstatement whether due to fraud or
error.

Independence and Quality Control of the Audit
Firm

We have complied with the German professional provisions
regarding independence as well as other ethical requirements.

Our audit firm applies the national legal requirements and
professional standards – in particular the Professional Code
for German Public Auditors and German Chartered Auditors
(“Berufssatzung für Wirtschaftsprüfer und vereidigte Buch-
prüfer“: “BS WP/vBP”) as well as the Standard on Quality Con-
trol 1 published by the Institut der Wirtschaftsprüfer (Institute
of Public Auditors in Germany; IDW): Requirements to quality
control for audit firms (IDW Qualitätssicherungsstandard 1:
Anforderungen an die Qualitätssicherung in der Wirtschafts-
prüferpraxis - IDW QS 1) – and accordingly maintains a compre-
hensive system of quality control including documented policies
and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory
requirements.

Practitioner’s Responsibility

Our responsibility is to express a limited assurance conclusion
on the Non-financial Report based on the assurance engagement
we have performed.

Within the scope of our engagement we did not perform an
audit on external sources of in-formation or expert opinions,
referred to in the Non-financial Report.

We conducted our assurance engagement in accordance with
the International Standard on Assurance Engagements (ISAE)
3000 (Revised): Assurance Engagements other than Audits or
Reviews of Historical Financial Information, issued by the IAASB.
This Standard requires that we plan and perform the assurance
engagement to allow us to conclude with limited assurance
that nothing has come to our attention that causes us to believe
that the Company’s Non-financial Report for the period from
1 January to 31 December 2020 has not been prepared, in all
material aspects, in accordance with §§ 315c in conjunction
with 289c to 289e HGB.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

247

In a limited assurance engagement the assurance procedures
are less in extent than for a reasonable assurance engagement,
and therefore a substantially lower level of assurance is obtained.
The assurance procedures selected depend on the practitioner’s
judgment.

Within the scope of our assurance engagement, we performed
amongst others the following assurance procedures and further
activities:

• Obtaining an understanding of the structure of the sustain-
ability organization and of the stakeholder engagement

•

Inquiries of personnel involved in the preparation of the
Non-financial Report regarding the preparation process, the
internal control system relating to this process and selected
disclosures in the Non-financial Report

•

Identification of the likely risks of material misstatement of
the Non-financial Report

Assurance Conclusion

Based on the assurance procedures performed and assurance
evidence obtained, nothing has come to our attention that
causes us to believe that the Company’s Non-financial Report
for the period from 1 January to 31 December 2020 has
not been prepared, in all material aspects, in accordance with
§§ 315c in conjunction with 289c to 289e HGB.

Intended Use of the Assurance Report

We issue this report on the basis of the engagement agreed with
the Company. The assurance engagement has been performed
for purposes of the Company and the report is solely intended
to inform the Company about the results of the limited assurance
engagement. The report is not intended for any third parties to
base any (financial) decision thereon. Our responsibility lies only
with the Company. We do not assume any responsibility
towards third parties.

• Analytical evaluation of selected disclosures in the Non-

Essen, March 15, 2021

financial Report

PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft

Markus Dittmann
Wirtschaftsprüfer
German public auditor

Hendrik Fink
Wirtschaftsprüfer
German public auditor

• Survey regarding local data gathering and approval of GHG
emissions FY19 in order to obtain an understanding of how
the data has been gathered in the first place and how potential
sources of error have been dealt with (e.g. incomplete or
wrong data)

• Comparison of selected disclosures with corresponding data
in the consolidated financial statements and in the group
management report

• Evaluation of the presentation of the non-financial information

Boards

248

Supervisory Board (and Information on Other Directorships)

Klaus Fröhlich
Former member of the Board of
Management,
Bayerische Motoren Werke AG

Ulrich Grillo
Chairman of the Board of Management,
Grillo-Werke AG

Rheinmetall AG1 (Chairman)
Grillo Zinkoxid GmbH2
Zinacor S.A.2

Carolina Dybeck Happe
Senior Vice President and Chief Financial
Officer, General Electric Company (GE)

Monika Krebber
Deputy Chairperson of the
General Works Council, innogy SE
(until December 31, 2020)

innogy SE2 (until June 2, 2020,

merger into E.ON Verwaltungs SE)

innogy SE2 (since June 2, 2020,
formerly E.ON Verwaltungs SE,
until December 31, 2020)

Eugen-Gheorghe Luha
Chairman of Gaz România
(Romanian Federation of Gas Unions);
Chairman of Romanian
employee representatives;
Member of the SE Works Council, E.ON SE

Dr. Karl-Ludwig Kley
Chairman of the Supervisory Board,
E.ON SE

Bayerische Motoren Werke AG1
Deutsche Lufthansa AG1 (Chairman)

Erich Clementi
Deputy Chairman of the Supervisory
Board, E.ON SE

Deutsche Lufthansa AG1

(since May 5, 2020)

Andreas Scheidt (until May 28, 2020)
Deputy Chairman of the Supervisory
Board, E.ON SE
Unified Service Sector Union, ver.di

Christoph Schmitz
(since February 1, 2020)
Deputy Chairman of the Supervisory
Board, E.ON SE;
Member of the National Executive Board,
Unified Service Sector Union, ver.di;
Director of the Federal Divisions for
Financial Services, Utilities and Waste
Management, Media, Arts and Industry,
Telecommunications and IT

innogy SE2 (since June 2, 2020,
formerly E.ON Verwaltungs SE,
until December 31, 2020)

AXA Konzern AG
Ruhrfestspiele Recklinghausen GmbH

Clive Broutta (until January 31, 2020)
Full-time Representative of the
General, Municipal, Boilermakers,
and Allied Trade Union (GMB)

Stefan May
Deputy Chairman of the E.ON Group
Works Council;
Chairman of the Joint Works Council,
Westenergie AG/Westnetz GmbH
(since October 1, 2020, formerly
Joint Works Council, Westnetz GmbH);
Chairman of the Works Council of the
Münster Region of Westnetz GmbH
innogy SE2 (until June 2, 2020,

merger into E.ON Verwaltungs SE)

innogy SE2 (since June 2, 2020,
formerly E.ON Verwaltungs SE,
until December 31, 2020)

Westenergie AG2

(since October 1, 2020,
formerly innogy Westenergie GmbH)

innogy Westenergie GmbH2
(until September 30, 2020)

E.ON Pensionsfonds AG2

(since May 1, 2020)

Szilvia Pinczésné Márton
Chairperson of the Works Council, E.ON
Dél-dunántúli Áramhálózati Zrt.;
Member of the SE Works Council, E.ON SE

Miroslav Pelouch (since May 28, 2020)
Deputy Chairman of the European Works
Council of E.ON SE;
Chairman of the Association of Grass-
Roots Organisations of the ECHO Energy
Sector Trade Union Federation in E.ON‘s
companies in the Czech Republic;
Member of the Executive Committee of
the ECHO Trade Union Federation

E.ON Energie a.s.2
EG.D a.s.2 (since January 1, 2021,

formerly E.ON Distribuce a.s.)

Unless otherwise indicated, information is as of December 31, 2020, or as of the date on which membership in the E.ON SE Supervisory Board ended.

Directorships/memberships in other statutory supervisory boards.
Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.

1Listed company.
2E.ON Group directorships/memberships.

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

249

René Pöhls
Deputy Chairman of the SE Works
Council, E.ON SE;
Chairman of the SE Works Council,
innogy SE (until June 2, 2020);
Deputy Chairman of the Group Works
Council, E.ON SE ;
Chairman of the Group Works Council,
envia Mitteldeutsche Energie AG;
Chairman of the Joint General Works
Council and the Joint Works Council
Halle/Kabelsketal, envia Mitteldeutsche
Energie AG, MITGAS Mitteldeutsche
Gasversorgung GmbH, Mitteldeutsche
Netzgesellschaft Strom mbH, and
Mitteldeutsche Netzgesellschaft Gas mbH

Fred Schulz
Chairman of the SE Works Council,
E.ON SE;
Deputy Chairman of the E.ON Group
Works Council;
Chairman of the Combined Works
Council, E.DIS AG;
Chairman of the Works Council,
E.DIS Netz GmbH-East Region

E.DIS AG2
Szczecińska Energetyka

Cieplna Sp. z o.o.2

Dr. Karen de Segundo
Attorney

innogy SE2 (until June 2, 2020,

merger into E.ON Verwaltungs SE)
envia Mitteldeutsche Energie AG2

Elisabeth Wallbaum
Expert, SE Works Council E.ON SE and
E.ON Group Works Council

Andreas Schmitz
Attorney

HSBC Trinkaus & Burkhardt AG1

(until December 31, 2020),
(Chairman until November 27, 2020)
Scheidt & Bachmann GmbH (Chairman)
Commerzbank AG

(since January 1, 2021)

Dr. Rolf Martin Schmitz
CEO, RWE AG

RWE Generation SE2 (Chairman)
RWE Power AG2 (Chairman )
RWE Renewables GmbH2
(since October 15, 2020)

RWE Supply & Trading GmbH2
Amprion GmbH (until April 30, 2020)
TÜV Rheinland AG
Jaeger Grund GmbH & Co. KG
(Jaeger Gruppe, Chairman)

Kärntner Energieholding

Beteiligungs GmbH

KELAG-Kärntner Elektrizitäts-AG

Deborah Wilkens
Management consultant

Ewald Woste
Management consultant

Bayernwerk AG2
GASAG AG
GreenCom Networks AG
Deutsche Energie-Agentur GmbH

(dena)

Energie Steiermark AG

Albert Zettl
Deputy Chairman of the SE Works
Council, E.ON SE;
Chairman of the E.ON Group Works
Council;
Chairman of the Division Works Council,
Bayernwerk AG;
Chairman of the Eastern Bavaria Works
Council, Bayernwerk Netz GmbH

Bayernwerk AG2
E.ON Pensionsfonds AG2

(since May 1, 2020)

Versorgungskasse Energie VVaG i. L.

Supervisory Board Committees

Audit and Risk Committee
Andreas Schmitz, Chairman
Fred Schulz, Deputy Chairman
Caroline Dybeck Happe
(until December 31, 2020)
Ulrich Grillo (since January 1, 2021)
René Pöhls
Elisabeth Wallbaum
Deborah Wilkens

Innovation and Sustainability Committee
Dr. Karen de Segundo, Chairperson
Stefan May, Deputy Chairman
Clive Broutta (until January 31, 2020)
Klaus Fröhlich
Monika Krebber (since February 5, 2020)
Eugen-Gheorghe Luha
Ewald Woste

Nomination Committee
Dr. Karl-Ludwig Kley, Chairman
Erich Clementi, Deputy Chairman
Dr. Karen de Segundo

Unless otherwise indicated, information is as of December 31, 2020, or as of the date on which membership in the E.ON SE Supervisory Board ended.

Directorships/memberships in other statutory supervisory boards.
Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.

1Listed company.
2E.ON Group directorships/memberships.

Boards

250

Management Board (and Information on Other Directorships)

Dr. Johannes Teyssen
Born in 1959 in Hildesheim, Germany
Chairman of the Management Board since 2010
Member of the Management Board since 2004
Strategy & Innovation, Human Resources, Communications &
Political Affairs, Legal, Compliance & Corporate Security,
Corporate Culture, Corporate Audit, Sustainability, Health/
Safety, and Environment

innogy SE2 (Chairman, until June 2, 2020,

merger into E.ON Verwaltungs SE)

BP plc.1 (since January 1, 2021)
Nord Stream AG

Dr.-Ing. Leonhard Birnbaum
Born in 1967 in Ludwigshafen, Germany
Member of the Management Board of E.ON SE since 2013
innogy integration project, Nuclear Coordination, Inhouse
Consulting
Member of the Management Board, innogy SE
(Chairman, until June 2, 2020, merger into E.ON Verwaltungs SE)

innogy SE2 (Chairman, since June 2, 2020,

formerly E.ON Verwaltungs SE)

E.ON Italia S.p.A.2 (until June 26, 2020)
Georgsmarienhütte Holding GmbH

Dr. Marc Spieker
Born in 1975 in Essen, Germany
Member of the Management Board since 2017
Finance, Investor Relations, Mergers & Acquisitions, Accounting,
Controlling, Risk Management, Tax, S4 Transformation

E.ON Verwaltungs SE2 (Chairman, until June 1, 2020)
innogy SE2 (until June 2, 2020,

merger into E.ON Verwaltungs SE)

Süwag Energie AG2 (since June 22, 2020)
Westenergie AG2 (since October 1, 2020,

formerly innogy Westenergie GmbH)

innogy Westenergie GmbH2 (from February 13, 2020,

until September 30, 2020)

Nord Stream AG

Dr. Karsten Wildberger
Born in 1969 in Gießen, Germany
Member of the Management Board since 2016
Retail and Customer Solutions, Market Excellence, Energy
Management, Marketing, Digital Transformation & IT

E.ON Digital Technology GmbH2 (Chairman)
E.ON Energie A.S.2 (Chairman)
E.ON Italia S.p.A.2 (since June 26, 2020)
E.ON Sverige AB2
Essent N.V.2 (Chairman, since September 3, 2020)

Dr. Thomas König
Born in 1965 in Finnentrop, Germany
Member of the Management Board since 2018
Energy Networks (including Turkey), Supply Chain

Avacon AG2 (Chairman)
Bayernwerk AG2 (Chairman)
E.DIS AG2 (Chairman, until April 29, 2020)
envia Mitteldeutsche Energie AG2 (since May 7, 2020)
HanseWerk AG2 (Chairman, until April 30, 2020)
Westenergie AG2 (since October 1, 2020,

formerly innogy Westenergie GmbH)

innogy Westenergie GmbH2 (from February 13, 2020,

until September 30, 2020)

E.ON Česká republika s.r.o.2 (Chairman)
EG.D a.s.2 (Chairman, formerly E.ON Distribuce a.s.)
E.ON Hungária Zrt.2 (Chairman)
E.ON Sverige AB2 (Chairman until March 10, 2020)
Rheinenergie AG (since October 1, 2020)
Stadtwerke Essen AG (since June 25, 2020)
Essener Wirtschaftsförderungsgesellschaft mbH

(since June 2, 2020)

Unless otherwise indicated, information is as of December 31, 2020, or as of the date on which membership in the E.ON SE Management Board ended.

Directorships/memberships in other statutory supervisory boards.
Directorships/memberships in comparable domestic and foreign supervisory bodies of commercial enterprises.

1Listed company.
2E.ON Group directorships/memberships.

Summary of Financial Highlights

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

251

Summary of Financial Highlights1, 2

€ in millions

Sales and earnings

Sales

Adjusted EBITDA3

Adjusted EBIT3

Net income/Net loss

Net income/Net loss attributable to shareholders of E.ON SE

Adjusted net income3

Value measures

ROCE (%)

Asset and capital structure

Non-current assets

Current assets

Total assets

Equity

Capital stock
Minority interests without controlling influence

Non-current liabilities

Provisions
Financial liabilities
Other liabilities and other

Current liabilities
Provisions
Financial liabilities
Other liabilities and other

Total assets and liabilities

Cash flow, investments and financial ratios

Cash provided by operating activities of continuing operations4

Cash-effective investments

Equity ratio (%)

Economic net debt (at year-end)

Cash provided by operating activities of continuing operations
as a percentage of sales

Stock and E.ON SE long-term ratings

Earnings per share attributable to shareholders of E.ON SE (€)

Dividend per share5 (€)

Dividend payout

Moody’s

Standard & Poor’s

Employees

Employees at year-end

2016

2017

2018

20196

2020

38,173

37,965

30,084

41,284

60,944

4,939

3,112

-16,007

-8,450

904

4,955

3,074

4,180

3,925

1,427

4,840

2,989

3,524

3,223

1,505

5,564

3,220

1,792

1,550

1,526

6,905

3,776

1,270

1,017

1,638

10.4

10.6

10.4

8.3

6.2

46,296

17,403

63,699

1,287
2,001
2,342

39,287
19,618
10,435
9,234

23,125
12,008
3,792
7,325

63,699

2,961

3,169

40,164

15,786

55,950

6,708
2,201
2,701

35,198
18,001
9,922
7,275

14,044
2,041
3,099
8,904

55,950

-2,952

3,308

30,883

23,441

54,324

8,518
2,201
2,760

30,545
15,706
8,323
6,516

15,261
2,117
1,563
11,581

54,324

2,853

3,523

75,786

22,294

98,080

13,248
2,641
4,149

58,982
20,669
27,572
10,741

25,850
4,019
3,841
17,990

98,080

2,965

5,515

75,484

19,901

95,385

9,055
2,641
4,130

61,761
21,384
29,423
10,954

24,569
3,904
3,418
17,247

95,385

5,313

4,171

26,320

19,248

16,580

38,895

40,736

7.8

–

9.5

7.2

8.7

-4.33

0.21

410

Baa1

BBB+

1.84

0.30

650

Baa2

BBB

1.49

0.43

932

Baa2

BBB

0.68

0.46

1,199

Baa2

BBB

0.40

0.47

1,225

Baa2

BBB

43,138

42,699

43,302

78,948

78,126

1Adjusted for discontinued operations. · 2Line items from the Consolidated Statements of Income for 2016 and line items from the Consolidated Balance Sheets for 2016 were adjusted to exclude
Uniper. · 3Adjusted for non-operating effects. 4From January 1, 2018 to September 18, 2019 Renewables Segment and from September 18, 2019 to October 30, 2020 innogy business in the Czech
Republic included in full in each case. · 5For the respective financial year; the 2020 figure is management’s proposed dividend. · 6Values for 2019 adjusted for subsequent effects from innogy purchase
price allocation and from the disclosure of so-called “failed own use contracts”

252

Contact

E.ON SE
Brüsseler Platz 1
45131 Essen
Germany

T +49 201-184-00
info@eon.com
eon.com

Journalists
T +49 201-184-4236
eon.com/en/about-us/media.html

Analysts, shareholders and bond investors
T +49 201-184-2806
investorrelations@eon.com

Production & Typesetting

Jung Produktion, Düsseldorf

Report of the Supervisory Board
Strategy and Objectives
Combined Group Management Report
Combined Non-Financial Report
Consolidated Financial Statements
Other Information

253

Financial Calendar

May 11, 2021

Quarterly Statement: January – March 2021

May 19, 2021

2021 Annual Shareholders Meeting

August 11, 2021

Half-Year Financial Report: January – June 2021

November 10, 2021

Quarterly Statement: January – September 2021

March 16, 2022

Release of the 2021 Annual Report

May 11, 2022

Quarterly Statement: January – March 2022

May 12, 2022

2022 Annual Shareholders Meeting

August 10, 2022

Half-Year Financial Report: January – June 2022

November 9, 2022

Quarterly Statement: January – September 2022

This Annual Report was published on March 24, 2021.

Only the German version of this Annual Report is legally binding.

This Annual Report contains certain forward-looking statements based on E.ON management’s current assumptions and
forecasts and other currently available information. Various known and unknown risks, uncertainties, and other factors
could lead to material differences between E.ON’s actual future results, financial situation, development, or performance
and the estimates given here. E.ON assumes no liability whatsoever to update these forward-looking statements or to
conform them to future events or developments.

E.ON SE

Brüsseler Platz 1
45131 Essen
Germany
T +49 201-184-00
info@eon.com

eon.com