E.on Se (OTC:EONGY) Q1 2026 Earnings Call Transcript

E.on Se (OTC:EONGY) Q1 2026 Earnings Call Transcript May 13, 2026

E.on Se beats earnings expectations. Reported EPS is $0.597, expectations were $0.4949.

Iris Eveleigh: Good morning, everyone. Dear analysts and investors, a warm welcome from my side to our first quarter 2026 earnings call. I’m here with our CFO, Nadia Jakobi, who will present our results. As always, we will leave enough room for your questions at the end. With that, over to you, Nadia.

Nadia Jakobi: Thank you, Iris, and a warm welcome from my side as well. Only 2.5 months ago, we presented our full year 2025 results to you and updated our outlook until 2030. Today, I will give you an update how we performed in the first quarter. The last months have been marked by a volatile macro environment by geopolitical turmoil. The ongoing U.S.-Iran tensions drive commodity prices higher and increased market volatility. Our results demonstrate our ability to effectively and successfully deal with market turbulence as we have shown before during the COVID and the energy crises caused by the Ukraine war. The resilience and defensiveness of our unique business model positions us as a safe haven in an increasingly volatile world.

Most of our EBITDA is generated in regulated energy networks, where earnings are largely protected against volume and price risks. Strong secular growth trends make us nearly independent of economic cycles. Our predominantly European supplier base and procurement leave us largely unaffected by U.S. tariff developments. Around 98% of our supply spending is within Europe. Our energy infrastructure business is supported by long-term contracts and price adjustment mechanisms, which provide inflation protection and commodity prices pass-through. And for our Energy Retail business, we have a robust risk management framework and hedging regime in place and have no direct exposure to the Middle East or any directly affected markets. Before I move to our Q1 results, I would also like to share a few words on our OVO acquisition, which was announced on Monday.

This transaction provides us with a unique opportunity to acquire a highly synergistic portfolio. It represents a highly complementary fit to our existing U.K. business. We see 3 key value drivers. The combination will allow us to drive material economies of scale by optimizing custom operations and offering innovative products to a broader customer base. It strengthens our U.K. market position and enables further development of a customer-centric and digital energy business. Customers are increasingly expecting simple, digital, sustainable, and affordable energy solutions. This transaction strengthens our ability to deliver exactly that at scale. From a financial perspective, the transaction supports our long-term earnings growth and cash generation.

It creates additional financial headroom to further support our investment capacity in regulated networks and delivers a positive EPS impact. We have approached this transaction with clear financial discipline and a strong focus on integration planning from Day 1. With our track record of turning around underperforming U.K. businesses, we possess the necessary knowledge and capabilities to carry it through successfully. We are excited about the opportunities ahead and are confident that this combination will create long-term value for our customers and shareholders. That said, let me now turn to our results for the first quarter of this year with my 4 key messages. First, E.ON delivered a strong operational, financial performance, which puts us firmly on track to achieve our full-year guidance.

Q&A Session

Our adjusted EBITDA reached EUR 3.3 billion, and our adjusted net income came in at around EUR 1.3 billion. This links into my second message. Our growth trajectory is progressing well. Our investments continue to materially exceed depreciation. Most of our investments are allocated to our German Power Networks business to further enhance the energy transition. Third, our balance sheet remains strong. Economic net debt of around EUR 46 billion in the first quarter reflects the typical Q1 cash flow seasonality driven by the working capital pattern of our business model. And finally, we fully confirm our guidance, including our dividend policy. Let us move on to our Q1 year-over-year adjusted EBITDA bridge. Starting with Energy Networks, adjusted EBITDA was broadly stable year-over-year.

Continued investments in our regulated asset base supported earnings growth across all business regions. This was offset by negative structural effects mainly from deconsolidating one of our regional utility participations in Germany, NEW AG, and the sale of our Czech Gas Networks business. In addition, we saw higher costs to support the continued expansion of our Networks business. We have continued our track record of operational excellence even as network complexity has increased significantly. Beginning of this month, Germany experienced exceptionally high solar generation, a peak generation of around 46 gigawatts coincided with low holiday demand of only around 43 gigawatts. This led to prolonged periods of sharply negative power prices at times reaching almost minus EUR 500 per megawatt hour.

In these challenging conditions of high system volatility, all of our DSOs were able to maintain full system stability. This effort was also recognized positively by the regulator. Moving on to our Energy Infrastructure Solutions business. Here, we have seen positive earnings effects from the commissioning of new projects and the pass-through of higher procurement costs related to previous years. In Energy Retail, we delivered a strong first quarter. We saw slight earnings increase in Q1, driven by temporary effects from phasing of price adjustments in our German business, which we expect to normalize over the course of the year. In addition, the performance of our U.K. B2B business has continued to normalize as expected. Our adjusted net income came in as expected at around EUR 1.3 billion.

All P&L items below adjusted EBITDA developed in line with our expectations in Q1. Looking ahead, the current development in adjusted net income is expected to be offset over the course of the year by higher interest expenses. As stated in February, we expect an increase in interest expenses this year, driven by higher net debt levels from ongoing investments and higher refinancing costs for maturing low coupon bonds. A portion of this is already visible in Q1. Overall, we remain well on track to achieve our full year adjusted net income 2026 guidance. Looking at the development of our economic net debt, I would like to highlight 4 key points. First, our promised investment growth trajectory is progressing, and we are well on track to deliver our full year targets.

Second, the negative operating cash flow in the first quarter reflects the typical seasonal working capital pattern of our business and is expected to reverse over the course of the year. Third, we are well-advanced in executing our 2026 funding plan. Ahead of recent market volatility, we secured EUR 1.6 billion in the Eurobond market and a further EUR 1.4 billion from investors outside the Eurobond market even during the volatile period. This brings us to a total funding of EUR 3 billion at attractive spreads, covering more than half of our 2026 requirements and underlining both resilience and increasing diversification of our funding base. And finally, our balance sheet remains strong, and we continue to see substantial extra balance sheet capacity over the guidance horizon.

And this has just been confirmed yesterday by S&P and Fitch, while affirming our BBB+ ratings with stable outlook. Let me conclude today’s presentation with my key takeaways. First, we delivered the first quarter as promised even against the backdrop of geopolitical uncertainty and elevated market volatility. The strong Q1 outturn firmly supports our expected guidance delivery for 2026. Second, our growth trajectory, especially in Power Networks, is progressing well and continues to drive the energy transition in Europe. Third, our balance sheet remains strong. We will continue to focus on delivering an attractive total shareholder return based on value-creative organic growth and an annually growing dividend per share. Finally, we fully confirm our full year 2026 guidance and 2030 outlook.

And with that, back to you, Iris.

Iris Eveleigh: Thank you, Nadia. And with that, we will start our Q&A session. [Operator Instructions] And with that, the first question comes from Julius Nickelsen from Bank of America.

Julius Nickelsen: My 2 questions. The first one is on OVO. So you said that the deal will be EPS accretive by 2030. But could you maybe shed a little bit more light in earlier years? Is there any adjustment necessary to the intermediate 2028 guidance? So that would be useful. And then the second one is on German regulation, specifically the OpEx adjustment factor paper, which came out in April. Would you say that this document materially increases your visibility on regulation now or there are still missing pieces? Or put the question another way, are you internally now able to quantify the impact of this factor? Or is there still some missing pieces that you would need to actually have like a sense on what it could do to your numbers?

Nadia Jakobi: So thanks for the questions. So first of all, let me highlight again, we are very happy to have been able to conclude this transaction. I will give you a bit more insight into the earnings impact. So over the overall guidance period, the cumulative ANI impact is broadly neutral, especially — expect 2028 to be negatively impacted by integration and restructuring expenses. And then ANI contribution will be then positive from 2029 onwards. And the last guidance year, as we have already highlighted before, 2030, we will see a high double-digit million positive impact. Let me maybe briefly explain why that is. We have this time very consciously decided to not put restructuring expenses into non-operating earnings but include that in our operating results. And secondly, also that you have got purchase price allocation effects from the depreciation of that from the customer book, that is also included…

Julius Nickelsen: Hello? It seems like you dropped out, Nadia.

Nadia Jakobi: I dropped out? Since when? Can you hear me now, Julius?

Julius Nickelsen: Yes. Maybe it was just me, but I couldn’t hear anything for the last 30 seconds.

Unknown Analyst: It wasn’t just you.

Nadia Jakobi: Okay. So then if it was everybody, we will — I will just start again and say, okay, look, total guidance period, cumulative ANI impact is broadly neutral, 2028 specifically will be affected by integration and restructuring expenses. ANI and EPS will be positive from 2029 onwards, and then we will reach in 2030 an ANI impact of a high double-digit million-euro impact. Reason — and now we have reason for why that is sort of negatively affected in 2028 is because we have consciously decided not to put the restructuring expenses into nonoperating earnings but leave that in the operational result. And second point is that from the purchase price allocation, we expect depreciation of the customer book, which will be also affecting the results.

So then going over to OpEx factor, yes, you’re right, Julius. We received in April, BNetzA has published some information, which is not legally binding. Generally, it’s a good instrument, which we welcome. It’s also good and previously discussed, there were thresholds for the OpEx adjustment factor that are now no longer discussed. What we are critical about is that account foresees an introduction of a 2-year time lag for recognizing the OpEx adjustment factor that deviates from the original proposal and from our perspective, lacks any economic justification. You asked then about can we now calculate it already and that is currently not the case from what we see here. The mechanism is very closely linked to benchmarking, and the final shape depends on the benchmarking results.

And of course, the benchmarking results will be only available in 2028. So the main key parameters remain uncertain. And that’s why at this point in time; we are not able to assess the financial impact from the OpEx adjustment factor.

Iris Eveleigh: With that, we come to the next question from Harry Wyburd from Exane.

Harry Wyburd: So 2 for me. So first, another one on OVO. Can we just talk a bit about the balance sheet rationale? And for me, it’s not a deal I would have expected you to do because you’re so focused on the core distribution business in Germany and there’s headroom to raise CapEx there. So why did you do this deal? Was it just too good to pass up? Did you feel like you had — your procurement operation gave you some kind of advantage? So just why this deal now? And does it preserve your EUR 5 billion to EUR 10 billion of spare balance sheet headroom? Or is it even accretive to that? Or does it affect in any way your ability to raise CapEx on distribution later? So that’s the first one. The second one is on AccelerateEU and Iran and what I think we all hope is going to be an accelerated pace of electrification as a result of all of that.

And is there any opportunity to use that as a catalyst to come to quicker agreement on returns with the regulator, perhaps with the assistance of the government? Because my perception is that, we’re slightly stuck in the mud for the next couple of years. You’ve got this trickle of OpEx adjustment factor, the gas regulatory review, but there’s nothing coming up in the next 12 months unless I’m missing something that would be decisive and allow you to go ahead and raise your investment. So could you go to the government or the regulator and say, given AccelerateEU, can you give us some early clarity and then we can go faster? Is that something that’s plausible? Or do we have to wait for a few years now to see the final CapEx envelope?

Nadia Jakobi: Thanks, Harry, for the questions. So maybe starting with the last part of the first question. We — as we have indicated, this transaction will actually provide us with a headroom increase of a high 3-digit million-euro impact and therefore, is by no means restricting any investments in the regulated asset base, but exactly the opposite. So it was — it is a rare attractive opportunity that presented itself to us to acquire a highly synergistic portfolio. It will strengthen our U.K. market position and will enable further development of a customer-centric and increasingly digital energy business. And it will — there’s really this synergy case that we are after. And we have the retail business for its earnings generation, but also very much for its cash flow contribution.

And this deal will actually enhance the cash flow contribution and therefore, will be very positive for further growth in the infrastructure business. Second point on AccelerateEU grid package, maybe coming to the last part of the question. So first of all, my judgment would be that it’s a good thing, whether this will now swing the needle in German regulation, who is very much on their own time schedule, I would say every little helps, but I would rather see the upward pressure from the German economy from dissolving the bottlenecks from all the requests that we have for renewable connection, battery connection, and industry connection and customer connection. I would rather see this bottom-up push from all our regional connection requests and also the top-down push from the German politics, i.e., the Ministry of Economics, I would see at this point, more influential for getting faster resolution on the regulation.

So — but overall, AccelerateEU grid package strengthens European resilience to increase incentives for further electrification, which is good. And it very much aligns with our strategy to drive the electrification through Europe. We like the expansion of industrial electricity pricing and electricity tax relief for customers. We like all additional incentives for electrification because we think it’s the right thing. Further details will be worked out in the coming weeks, but we think it’s got a positive impact on our businesses, AccelerateEU good package, but not an immediate impact from my perspective on the regulation.

Harry Wyburd: Okay. And just to clarify, the high triple-digit figure. So we’re basically saying that if it was EUR 5 billion to EUR 10 billion before, it’s maybe sort of EUR 5.8 billion to EUR 10.8 billion now. Is that the right way to think about it on balance sheet headroom as a result of that?

Nadia Jakobi: Yes. If you may say so, that wouldn’t be outside the ranges that I would have given.

Iris Eveleigh: And with that, we come to the next question from Deepa.

Deepa Venkateswaran: Sorry, I’m also going to start with OVO and then ask a boring question on the balance sheet. So on the OVO transaction, I noted that you’ve talked a lot about the technology stack and synergies and so on. So my main question is you are using the Kraken system in the U.K. OVO has been using Kaluza, which are both, apparently, good and comparable. So what is your assumption on the integration? Because presumably you can only extract synergies if all the customers — all the 10 million customers are on the same. So what is your assumption? Will you move the existing E.ON customers to the Kaluza or the other way around? And what do you mean by that digital stack being attractive? So that was the first question on technology and the plan.

Second question on the balance sheet. Just wanted to reconfirm that the overall cash conversion for the full year is around 100%. And would you be able to say where you expect the net debt for the year-end to be? Yes, that’s my second question.

Nadia Jakobi: So as part of E.ON’s acquisition of OVO Energy, E.ON will enter into a long-term license agreement with Kaluza. So as you have highlighted, Kaluza is a scalable, flexible and proven technology platform and simplifies energy billing, reduces costs to serve and enables faster product innovation to facilitate the energy transition. We will conduct an objective assessment of the Kaluza platform, looking at 3 different perspectives. So first, as a core platform for the U.K. energy retail business; second, for E.ON’s businesses in other international markets; and third, as modular components [indiscernible] Kaluza Flex. And then when we’ve looked at all of that, we will then make an objective choice for E.ON U.K.’s one single retail platform.

So synergy delivery is for us agnostic of the platform choice. And as you have highlighted, we will now first assess the platform, and then we will make a decision on to which single platform we will migrate. And then on cash conversion, we have got the same target for cash conversion, i.e., the 100% cash conversion that we had articulated before. And then when it comes to economic net debt, we stick to our year-end guidance of being below or at least — or equal to 5.0 economic net debt. And from today’s perspective, I see no reason to deviate from that.

Iris Eveleigh: With that, we come to the next question that comes from Pavan from JPMorgan.

Pavan Mahbubani: I just have one big picture question, please, Nadia. Can you just give us a reminder of where we stand with the German electricity networks regulation, upcoming milestones that investors should be looking forward to? And a reminder of the outstanding, if you will, key areas of concern between E.ON and BNetzA, whether it’s things on the return or other areas that you’d like to see improve before you have the clarity that we need?

Nadia Jakobi: Yes. So I think it’s pretty much unchanged compared to what we have said at the full year conference. We have got now a bit more clarity on the OpEx adjustment factor. And as we highlighted there’s going to be the gas determination with the draft determination for gas in July 2026 and the final decision by the end of the year, which could provide cross reads for power. Final clarity for the WACC for power is expected to be until end of 2027, and some of the remaining regulatory parameters like cost audit will be set in 2028. I think we have reiterated the points in what we don’t like about the current proposal and where we still have open points. So let me go back to what we said in Q3 and in the full year. So 7-year look-back period without mark-to-market adjustment for cost of debt for existing assets is for us unacceptable because we cannot refinance our existing assets on that basis with a 7-year look-back period.

We have a couple of parameters outstanding when it comes to the cost of equity. Think we specifically highlighted points around re-dispatch cost when it comes to the benchmarking, where we are in intensive discussions with the regulator to highlight how that is something which would give a strong disadvantage for those who are enabling the energy transition. And as we indicated earlier, overall, the overall framework must be right for us to earn our value creation spread of 150 basis points to 200 basis points, mostly on pretax WACC. So basically, there is — on top of the OpEx adjustment factor where we’ve got some insights now, there is not more news flow that we received in the last 2.5 months.

Iris Eveleigh: And with that, we move on to Ahmed from Jefferies.

Ahmed Farman: Actually, I’m going to ask both questions on the first quarter results. My first question is you referenced phasing effects within German retail. Could you quantify that for us as to what is the sort of the number in the first quarter for these phasing effects? And when do you expect these to reverse over the course of the year? And then my second question is just on the — very quickly on the D&A and the interest line for the first quarter. Can we see them as sort of good run rates for the full year? Or are there any seasonality effects within — or sort of adjustments within the 1Q number, which we sort of need to bear in mind?

Nadia Jakobi: Yes. Thanks, Ahmed. I think from the German retail business, the phasing effect is a mid-double-digit million-euro effect, which will reverse continuously in the next 3 quarters, which comes through the different timing of price adjustments that we had in — now in Q1. When it comes to the second question, I think on the interest line, I have alluded to that in my presentation that we will see more increases of interest expenses due to the maturing of low or very low interest bonds, which need to be refinanced. And of course, due to the growth trajectory that we are in, we also need to finance that growth on top. And on — I guess on the depreciation side, you will need to take into account that we have, for example, de-consolidated NEW. We have not — we have sold our gas distribution network in Czech, and that’s what affecting that depreciation line.

Ahmed Farman: So maybe just one clarification. All these deconsolidation effects are now through in the first quarter. So just to check sort of all the effects that have come through.

Nadia Jakobi: So I think when you look at the gas grid in Czech Republic, that was sort of very low double-digit million-euro EBITDA effect, what I can — what I know. And then on the NEW effect, that is approximately high double-digit million-euro impact on EBITDA, if that’s the question on that. So I’m not fully — so I don’t now have sort of the details of the depreciation Q1 effect on that, but I guess colleagues can come up with that.

Iris Eveleigh: With that, we move on. The next question comes from Louis from ODDO.

Louis Boujard: Maybe 2 questions as well here on my side, one on OVO and one more general. I think that you mentioned that they have around 70% of customers which are under SVT tariff. Does it create, according to you, greater sensitivity to the future option price cap change? And how would you eventually mitigate that risk in your customer strategy going forward after this acquisition? And maybe another question more general. You repeatedly stressed that you have a resilient business model. And I think that once again in the first quarter, we see that it is indeed the case with reasonable resilience and strong performance in spite of the political and geopolitical environment. What do you see on your side as the biggest external risk for not reaching your target in 2030 today?

Nadia Jakobi: Yes. So we highlighted that 70% of the customer base of OVO is related to SVT because it demonstrates that this is a high-quality durable book with a strong average tenure. So that was the point why we highlighted that point. We don’t see now additional risk from additional price cap because the price cap is doing exactly that. It is U.K. price cap regulation is based on a comparatively short hedging tracker. And the integration and the combination of the businesses will only take place once we have done the platform assessment. So the OVO customers will be continued to be supported by the current agreement, Shell agreement that they are on to get their energy procurement. So I don’t see an increased risk from that.

And then the second, as you highlighted, we are saying, yes, we have got a very resilient business model. The Q1 has developed fully in line with our expectations. that’s why we have — we don’t see now — I, from today’s perspective, don’t see big risk. Of course, we always have some operational risk. We need to deliver on our availabilities. We need to make sure that we develop our customer portfolio. But I wouldn’t now single out some risk, of course, bad debt can increase if the gas prices increase for our customers. On the other hand, we are also benefiting from our long-term setup of professionally managing our commodity portfolio. So I’m confident about the outlook, as I have said in my presentation.

Iris Eveleigh: And with that, we come to James from Deutsche Bank.

James Brand: Congrats on the deal. I had multi-questions, but I’ll keep it to 2. So the first one is just trying to square what you’re saying about the restructuring expenses for OVO. I kind of had in mind that restructuring expenses would be pretty large, like hundreds of millions of euros or pounds or whatever just because obviously, the kind of expectation is you shut down one of the platforms, I presume there’s probably going to be quite a lot of headcount losses, but then you’re saying you’re going to not strip them out as one-offs and overall, it’s going to be kind of neutral over the period from a net income perspective, but only getting up to double-digit million euros at the end. So that kind of seems to imply the restructuring charges could be quite low.

So I guess the question is kind of how should we reconcile that? And is there any more details you can give us in terms of what the restructuring expenses that will be flowing through into the adjusted net income would be? I guess maybe I’m over — was overestimating it. And the second question is on the beta for the German regulatory review. We’ve — everyone’s talked a lot about the risk-free rates, the market risk premium, the cost of debt mechanics, the cost of — the cost cutting or cost allowances, but people haven’t really talked much about beta. And as far as I’m aware, there hasn’t really been much out from the regulator on the beta. So my question is, what’s your expectations? Do you think it will be kind of held broadly in line with what it was previously?

Or should we be expecting it to be reduced?

Nadia Jakobi: Yes, thanks. So we’re expecting total restructuring and integration expenses in a low triple-digit million-euro range across 2026 to 2029. But bear in mind, of course, this is based on the EBITDA impact. So you would assume that from an adjusted net income impact, that would then also, of course, also be tax deductible. Then when it comes to beta is a bit from what I said earlier, yes, on the cost of equity side, we don’t have the insight yet. And as you say, its risk-free rate, it is market risk premium. And it is beta. I think what’s positive in the new regulatory regime is that it is now saying that all the different elements need to be looked at from an integrated perspective, i.e., you cannot just pick and choose different kind of tenures, but it needs to sort of be looked at integratedly and I cannot now say I expect EBITDA to develop in this direction because I don’t now have any more information on that.

As we highlighted — as I highlighted before, there isn’t any additional news flow compared to what we’ve talked about in full year.

Iris Eveleigh: And the next question comes from Alberto.

Alberto Gandolfi: I have 2 non-OVO questions. And the first one, a bit complicated, but hopefully. So you’ve done 48% of full year midpoint guidance. So I was trying to understand what you might see going wrong in the rest of the year for you not to be able to upgrade guidance above the top end. It looks like — I’d love to see if you can comment on that. It looks like you’re trailing above the top end on Energy Networks and perhaps midpoint EBITDA on EIS and energy retail, maybe even a little bit better than that, which together with the lower depreciation would suggest actually you to be above the top end on net income despite refinancing. So I was trying to understand, can you poke holes in these pieces? What I may not be considering because it seems to me you are really trailing above your guidance.

Is it a matter of prudence and we wait and see later in the year? Or there’s something specific that we need to think about? And I’m already accounting for all seasonality here. The second question, a bit broader, but should we expect an Investor Day from E.ON before year-end, maybe to address cost savings plan or any incremental growth, any potential acceleration in electrification we might see from incremental incentives that the EU may start to trickle down in the rest of the European member states?

Nadia Jakobi: Yes. Thank you, Alberto. So the Q1 has developed fully in line with our expectations. So the irony is, as you highlighted, a bit stronger than last year, but the Q1 also includes some lower earnings contributions from entities with minority interest in 2026, which is just a temporary uplift in adjusted net income. So that might be then one of the [indiscernible] in your thesis. Then on — I think you highlighted the 3 different segments. And in the 3 different segments is also how we’ve indicated they have been all running in the first quarter in line with our expectations, ICE and Energy Retail, but also the Energy Networks business have developed in line with our expectations. So we don’t expect now the full year ANI increase from our Q1 results because the financing costs are expected to rise further and then they bring back the ANI growth year-over-year to be broadly stable.

Yes, second question, Investor Day. Iris, [indiscernible]. So I’m not aware, but maybe Iris said and she hasn’t told me. No. So from today’s point of view, we have not looked at an Investor Day. I think you also asked the question about cost savings in the full year call, where I think Leo has given some answers. Yes, there is cost efficiency improvement potential in our retail business, which is baked into the results. As you can see, we are increasing the result from a midpoint EUR 1.7 billion now to EUR 2.1 billion in 2030, which is quite some increase. Of course, there is always also a potential — there’s always a good point in analyzing whether you get — could gain more from AI. But of course, AI can also produce headwinds because it makes competition more fierce.

So I guess we would stick to the answer that Leo has also given in the full year call when it comes to sort of Investor Day and cost savings. Was there any other thing? I think there’s some other incrementals that were trickling down. I think there I would lean back to the answer I gave earlier, yes, in general, this EU political developments are providing us with tailwind, whether that is concrete enough to make out of that in Investor Day in Q3, I would be a bit skeptical.

Iris Eveleigh: With that, we have a question from Piotr from Citi.

Piotr Dzieciolowski: I have 2. So the question I wanted to ask you, like how do you think about the relation between the rate and your 2030 targets? And I’m specifically referring to the fact that risk-free rates are basically up, I don’t know, 20 basis points since the Iran war. We don’t know which way it goes. But do you think about it that you will be ultimately able to pass through all of this increase, and therefore, we should think about your 2030 as an upward moving target on the bottom line of EBITDA? And then specifically on Germany, do you — does this move of the 25 basis points increase, let’s see if it continues, impact your view where you will end up with the total package on the German regulatory view, apart from the technical mechanical adjustment of the averaging and so on.

But I was just thinking like do you have some number in mind and it’s being changed because of what happened in the market happening. Or do you have more like a floating number in mind?

Nadia Jakobi: So for us, we have given sort of an absolute target for 2030. And I think you have covered it quite well. There are, of course, things that are positive and negative on a 20-basis points variation. So as you know, 20 basis — and we have discussed on the topics around the fixing of the regulated cost of debt in Germany, I think we’ve discussed on that enough. And of course, it becomes more difficult to reach that if you stick to this 7-year average. So we are currently not working with floating ANI guidance. So we would be sticking to sort of a firm ANI guidance. And as I said in the presentation, we are fully confirming our outlook for 2030. And of course, the announced acquisition not being part of that.

Iris Eveleigh: With that, we move on to Rob from Morgan Stanley.

Robert Pulleyn: Just 2 quick questions, if I may, which are really follow-ups from earlier. The first one, just holistically regarding OVO again. Is there any conceptual reason why E.ON cannot turn around the levels of profitability in OVO to where E.ON’s U.K. business currently is? I appreciate, sort of, spreadsheet exercises make anything possible. But from your perspective, can you achieve parity with your current U.K. business? That’s question one. And secondly, you talked earlier about the regulatory cost of debt. Maybe I missed it, but when could we hear an update from the regulator on the allowed cost of debt for your existing assets, which seems to be, if I understand, one of the main sticking points with the regulatory package as it looks today.

Nadia Jakobi: First of all, for the OVO question, what you need to bear in mind, our U.K. business is not just a B2C retail business, but it’s also including a B2B business and some other elements around that. I think we are also serving Telecom Plus customers, et cetera. So you wouldn’t just be able to pro rata the per customer result that we have been including in our report. So you cannot just take the EBITDA that you see in our annual report and divide that by the customer numbers. And then secondly, as I indicated earlier, we’ll also have effects on the write-down of the customer book, not the write-down, but the depreciation of the customer book, which will not be finalized by the end of 2030 yet. So that would be that.

And yes, it is not only the regulatory cost of debt. It is also the cost of equity, the benchmarking, et cetera. I think we highlight the cost of debt always because it is sort of — it’s a significant part and it is also quite easy to understand that this is sort of not a fair representation of how we can refinance ourselves in the capital market. I think what we have said, the regulatory cost of debt for gas, which is a very, very small part of our German business will be then determined by the end of 2026, most likely if the regulator sticks to their time lines. And then for power, we will have the same in the end of 2027. What we don’t know yet what is the individual weighting of the different years in the averaging of the cost of debt and seeing this big increase in interest from 2020 to now, it is, of course, highly relevant how then the final cost of debt will be determined.

Iris Eveleigh: And with that, we come to the closing questions from Wanda from UBS.

Wierzbicka Serwinowska: Hopefully, you can hear me.

Iris Eveleigh: Yes.

Wierzbicka Serwinowska: Two questions. One on — I mean, two on OVO, apologies. There have been many, many questions on OVO today. Do you expect any cash injection into OVO once the deal is closed, so we can understand if there is more cash or any kind of cash equivalents are going to be put into the OVO business beyond the closing transaction then? And the second one is what makes you so confident about the U.K. retail business? Because this is one of the most competitive markets, right? I mean you are telling us it will be EPS accretive in 4 years’ time from now. The political environment is not the best currently, if you look at the recent local elections. So what am I missing on the U.K. retail?

Nadia Jakobi: So thank you, Wanda, for the question. So we will benefit from the strong E.ON balance sheet and the transaction has a positive on E.ON’s headroom in 2030, as we said, but we will now not disclose any exact cash flows on — in the business plan. So second point, why do we think the U.K. market is a positive? We have been in the U.K. market since 2000, E.ON since 2002, former npower business was in RWE since 2000. So we have been acting in the market. And you’re right, the market was quite difficult, particularly in 2019 and ’20. But what we have shown is that we have consistently been able — so first of all, we’ve done a big integration like this with some of the main leadership still being in place. So we have done all that.

And when you look back into how we have been able to make positive EBITDA contribution in that business in the last years, it almost always had exceeded investor expectations. I think we have seen a lot of reasonable way of how the regulator has now been behaving in the market with things like capital adequacy rules, sort of in prior years, in like 2019, we have seen some unjustifiable benefits for smaller operators who eventually went bust and then needed to be saved by the others in the market. So we are — we see — and we have a very close interaction. We see a very — we see a positive outlook for the market. We have got a very professional relationship with the U.K. regulator for a long time regardless of the political sentiment. So we believe it is an attractive market.

And when it comes now to political speculation, we wouldn’t now speculate on that. I would see in something as fundamental as gas and electricity, I wouldn’t now see that this is then affected by the current political discussions. Thank you all. Maybe it’s also worthwhile for us to sort of demonstrate and show again how we have been able to develop our U.K. business and how we’ve been able to consistently show very positive financial results in the last years. Maybe we can also bring that to the next — some of next quarter’s meetings or some of the other meetings.

Iris Eveleigh: Thank you very much, Wanda, and thank you, Nadia. And thank you, everyone, for your time and participation and interest. If there are any remaining questions, I know some people have their hands up a second time, please reach out to IR. We are happy to follow up with any further questions that might be there. Thank you very much. With that, we close our Q1 call, and have a nice day, everyone. Bye-bye.