E.ON SE

XETRA:EOAN

Earnings Call Analysis

Solid Q1 Performance and Future Growth

In the first quarter of 2024, the company's adjusted EBITDA rose by 1% year-over-year to €2.7 billion. Investment expenditure increased by 25%, supporting midterm growth targets. Economic net debt showed expected seasonality, and the balance sheet remained robust with a confirmed strong BBB BAA rating. Energy Infrastructure Solutions was reported as a stand-alone segment, emphasizing future growth opportunities from decarbonization and electrification. The leadership change was also highlighted, with Marc Spieker moving to COO and Nadia Jakobi taking over as CFO starting in June.

Introduction and Management Changes

In the first quarter of 2024, the company welcomed analysts and investors to its financial results call. This call marked the final earnings call for Marc Spieker as CFO before transitioning to the role of Chief Operating Officer, Commercial. Nadia Jakobi will take over as CFO in June, joining future earnings calls starting from the H1 results.

Key Financial Highlights

The company’s Q1 results were in line with expectations. The adjusted EBITDA stood at €2.7 billion, marking a 1% year-over-year increase despite the absence of significant positive one-offs from the previous year. There was a slight decline in the Energy Networks business, mainly due to the unwinding of positive regulatory effects from 2023 and higher-than-expected costs from upstream networks in Germany.

Capital Expenditure and Debt

The company’s planned CapEx ramp-up is progressing well, with a nearly 25% year-over-year increase in spending. Q1 economic net debt showed typical seasonality, influenced by final outflows related to the unwinding of positive one-off working capital effects from 2022. Despite this, the company’s strong balance sheet has been reaffirmed by rating agencies, ensuring additional balance sheet capacity for future investments.

Energy Infrastructure Solutions

Highlighting the long-term growth path of the Energy Infrastructure Solutions business, this segment will now be reported as a stand-alone entity. The company has ambitious plans for this segment, expecting a 13% annual EBITDA growth from 2023 to 2028, driven by new project commissioning and supported by digitalization and modular standard building blocks.

Energy Retail Performance

The Energy Retail segment saw a significant year-over-year increase in EBITDA, mainly due to positive price adjustments since Q1 last year and improvements in the UK B2B segment. However, these gains were partially offset by the absence of previous procurement optimization benefits and lower weather-driven volumes.

Operational and Strategic Focus

Operational excellence continues to be a priority, with high asset availability supported by digitalization efforts. The company’s strategy includes standardizing offerings in a modular way to scale solutions, with 80% of the €5 billion CapEx plan for the next five years dedicated to growth investments. The company also ensures that any new project delivers an internal rate of return spread over WACC between 120 to 350 basis points.

Outlook and Guidance

For 2024, the company expects stable price outlooks, passing fundamental costs onto customers. It has reiterated its commitment to achieving a cash conversion rate of around 90% for 2024, with an anticipated return to 100% post-2024. The company confirmed its growth targets and plans to continue delivering an attractive total shareholder return while ensuring excellent operational and financial performance.

Conclusion

The company's strong Q1 performance reinforces its confidence in achieving its 2024 earnings targets. With a solid financial position and a clear focus on operational excellence and strategic growth, the company is well-placed to capitalize on opportunities in the energy sector, ensuring sustainable and profitable growth in the years ahead.

Earnings Call Transcript 2024-Q1

[Iris Eveleigh, executive]

Hello, everyone. Dear analysts and investors, welcome to our First Quarter 2024 Financial Results Call. Thank you for taking the time to join us today. I'm here with Marc Spieker, for whom this will be the last earnings call as CFO before he takes over his new role as Chief Operating Officer, Commercial. Marc, thank you very much for our successful earnings calls together. At the same time, I'm excited to have Nadia taking over as CFO in June, and I'm looking forward to having her join the earnings calls from our H1 results onwards. As for today's call, as usual, we will leave enough room for your questions after the presentation. With that, over to you, Marc.

[Marc Spieker, executive]

Thank you, Iris, and a warm welcome from my side as well. I will save my goodbye words for later. Let us straight dive into the Q1 results, and let me start with highlighting the key messages for today. First message, Q1 came out in line with our expectations for all businesses. Key drivers of our slight EBITDA and net income increase, we're investing back earnings growth and strong operational execution more than offsetting the unwind of prior year one-off and timing effects.

Second message. Our planned CapEx ramp-up is progressing well. We have accelerated again our spending by almost 25% year-over-year and are well on track in terms of quarterly fill rates across all business segments.

Third message, our Q1 economic net debt came in as expected, showing the typical Q1 cash flow seasonality and the final outflows related to the unwinding of the positive one-off working capital effects that we have been reporting to you as of our 2022 results, and I'll come back to that later.

Fourth and final message, we have a strong conviction in the relevant and long-term growth path of our Energy Infrastructure Solutions business. To make our ambitions more visible, we are moving the business into a stand-alone segment from this quarter onwards as announced. Finally, our guidance is fully confirmed.

On to our Q1 EBITDA development. Our adjusted EBITDA came in at EUR 2.7 billion, up 1% year-over-year despite the lack of significant positive impacts from one-offs that we had seen in the prior year quarter. As expected, our Energy Networks business is slightly down in Q1 due to unwinding positive regulatory account effects of 2023, such as the benefit from lower redispatch costs, as well as slightly higher-than-expected costs from upstream networks in Germany. Additionally, we have changed the accounting for our Slovakian VSE business, to an equity consolidation, which leads to a technical reduction in EBITDA in our Central Eastern Europe business, no impact on net income.

All those effects are economically neutral and they were largely offset by strong [ RAB ] driven earnings growth across all regions and the positive uplift of regulatory parameters in Sweden. Regarding network losses, Sweden and Slovakia have now completed their recoveries, while additional recoveries are now only happening in Southern Eastern Europe. You may have noted that we have now split our reporting of the CEE and Turkey segment into Central Eastern Europe and Southeastern Europe. This shall give you more transparency on our geographically well-diversified portfolio of networks businesses. The Central Eastern Europe segment covers Czech Republic, Poland and Slovakia. The Southeastern Europe segment includes our activities in Hungary, Romania and Turkey.

Moving on to Energy Infrastructure Solutions. New project commissioning is leading to EBITDA growth, as you would expect, supporting our 13% EBITDA accumulated average growth rate target from 2023 to 2028. This development is masked in Q1 by the absence of a positive one-off effect from last year and by changed intra-year maintenance schedule with a stronger focus on Q1 this year. With a change in maintenance schedule, we are partly mitigating also the negative effects from mild weather that we have been observing during the first quarter. In Energy Retail, the significant year-over-year EBITDA increase was primarily driven by positive price adjustments since Q1 last year. Additionally, we benefited from the improvement in our B2B segment in the U.K., which is successfully continuing its margin over volume strategy.

Those positive effects were partially offset by the lack of procurement optimization benefits that we had seen in Q1 last year and it's a very favorable commodity price background last year and lower weather-driven volumes in Q1. Corporate Functions and Other segments saw an expected slight EBITDA decline driven by the lower results from our Turkish generation business due to the development of commodity prices also in Turkey.

Moving on to our adjusted net income, which showed an increase of 2% which broadly follows the year-over-year EBITDA development. All earnings elements below EBITDA have developed in line with our expectations. The share of minority income sits at around 19% for the first quarter, as expected. And with that, materially below prior year. We expect this share to continue to go down and be lower for the full year as we communicated in our full year 2023 earnings release. Looking at the development of our economic net debt, I would like to highlight 3 points.

First, our promised CapEx ramp-up is being executed like clockwork. We increased our Q1 investment spending by close to 25% year-over-year. I can assure you that we continue to be fully focused on ensuring a frictionless ramp up, managing closely our operations and supply chains. So far, we do not see any critical bottleneck on the horizon.

Second, we have seen the typical operating cash outflow in Q1, which is driven by our seasonal business patterns in both Energy Retail and Energy Networks, specifically Energy Networks in Germany. As expected, this outflow was slightly amplified by the final unwind of our 2022 one-off working capital benefits. It's a long time ago, not everyone may remember, but our 2022 full year cash conversion set at a very benign 151%, significantly above the 100% we normally target. And as communicated in March for 2024, we are foreseeing a conversion rate of around 90%. And with that, the final reversal of these positive working capital effects from 2022 after 2024, we expect cash conversion to then swing back to the guided 100%.

Third message on END, our strong balance sheet position has recently been confirmed by 2 of our rating agencies. We have received a rating upgrade by Standard & Poor's and a full rating confirmation by Moody's. As communicated before, in line with our commitment to a strong BBB BAA rating, we have additional balance sheet capacity to fund further investments needed for a successful European energy transition if regulatory conditions further improve. Considering the balance sheet, it is also worth highlighting that we have already issued EUR 3.3 billion of bonds in the first quarter. With that, we have already fully covered our funding needs for 2024 and partially already prefunded 2025.

Moving on to Energy Infrastructure Solutions. As announced, we will report this business as a stand-alone segment from this quarter onwards. Strategically and with a view to future growth, this segment is all about exploiting the huge business opportunities from decarbonization and to a large extent, electrification of the heating sector. The segment comprises our activities in designing, building, owning, operating and optimizing sustainable energy infrastructure assets for cities and business customers. Our solutions are based on modular standard building blocks, which are configured and digitally connected to fit specific customer needs.

Technologically, our offerings include firstly, renewable on and offsite generation assets like photovoltaic and wind. Secondly, gas or biomass-fired heat and power engines. Thirdly, heat pumps and geothermal solutions. Fourthly, waste heat recovery technologies. And finally, high- and low-temperature heating and cooling grids. From a business point of view, we distinguish 2 clusters within Energy Infrastructure Solutions. First cluster is district heating and cooling, which is about running low-carbon heating and cooling networks in urban areas. Second business area is our industrial and commercial solutions business, offering on-site energy infrastructure for industrial and commercial customers.

We have decided to also include our U.K. smart metering business in this segment, while technologically, obviously different in nature, it is a quasi-regulated business and hence, of similar nature when it comes to financial visibility and resilience. Let me remind you of some more financial and business characteristics relevant for our Energy Infrastructure Solutions business. Geographically, we are present in 15 countries, the key ones being Germany, Sweden and the U.K. Our pan-European coverage and strong regional anchoring represent a unique advantage to address our customers' needs for locally optimized energy infrastructure. Our strategy to standardize our offerings in a modular way will allow us to scale our solutions.

Therefore, out of the EUR 5 billion CapEx plan for the next 5 years, 80% will be dedicated to growth investments. Through long-term contracts with customers, commodity price volatility and inflation are effectively passed through, for instance, via price escalation clauses. We ensure that any new project is targeted to deliver an internal rate of return spread over WACC of between 120 to 350 basis points. Furthermore, our rigorous focus on operational excellence ensures high asset availability. This is supported by digitalization, which helps to steer, monitor and effectively maintain and optimize the fleet of more than 6,000 assets. We expect annual EBITDA growth of 13% on average. Keep in mind that the municipal heat transition across Europe is still at an early stage. So there is more -- much more to come, but too soon for us to quantify what the impact will be over time.

Let me close today's presentation with Slide 8 what you essentially should take away from us today. First, extremely solid Q1 outturn supports our expected earnings delivery for 2024. Second, our investment ramp-up is progressing well, which fully underpins the delivery of our midterm organic growth targets. Third, our balance sheet remains very healthy. 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. And with that, let me move to a personal note.

We announced in March that I would be moving on to take over as a Chief Operating Officer, the responsibility for our Energy Infrastructure and Retail Businesses from June onwards this year. We deliver what we promised. So inevitably, today is my last results call as CFO. It has been close to 8 years as CFO in the Board of Management of E.ON, hundreds of roadshows and exactly 30 results calls. I am not going away, but I will be focused on different things going forward. Great news for you is our investors and analysts that with Nadia Jakobi, I have the best successor I can think of. I know that with her, you, your interest and most importantly, your investments will continue to be in safe hands.

Dear Iris, I would also like to express my thanks to the best Investor Relations team I can think of. And finally, it has been a privilege for me to represent our company in the capital markets. I'm extremely grateful for so many deep and thoughtful conversations during roadshows and other formats. And a big thank you to all of you for that. Before we get too sentimental, there is still business to be done. So let's move on to our Q&A session.

[Iris Eveleigh, executive]

Thank you very much, Marc. And with that, we will start our Q&A session. Let me remind you all briefly, as you all do know, please stick to 2 questions each so that most of you have the chance to ask the questions. If there's anything we can't answer today, then the IR team is always there to also answer further questions from you. With that, the first question comes from Alberto from Goldman Sachs.

[Alberto Gandolfi, analyst]

Good morning, and Marc, thanks for all the help and all the best. We -- I guess we need to lean on you even more on the execution of all these EUR 20 billion CapEx plan. So congratulations, and thank you once more. Two questions on my side. The first one is a border line very boring, but can I understand, please, in the first quarter, what type of nonrecurring items we have in networks and in customer solutions. I'm trying to go to the underlying earnings power. So as I understand, you released some provisions. The weather was very mild, can you tell us if you booked negative and positive network losses, either recovery or cost? That is the first question. I have the feeling the underlying is stronger. That's why I'm asking.

The second question is I've seen a DSO plan that implies that potentially if feasible, which I understand from what you're saying is not, your CapEx plan could be 50% higher than what you presented in March. What underpins the plus 50%. Is it possible you give us a view on what assumptions we would have to flex to have even more investments. Is this driven by power demand, electrification, more renewables, data centers or just to have a fee for [ written ].

[Marc Spieker, executive]

Yes. So Alberto, let me start with the nonrecurring items. Compared to last year, we had a lot of positive one-offs. In Q1 this year is much less impacted by any one-off effect. If you look at our Energy Networks business, I think the remaining piece that we see here is a mid-double-digit million euro amount of final recovery for network losses essentially relating to 2022. So there's still a minor positive one-off in our Energy Networks business.

For Energy Retail, essentially, we talk about weather impact, which you may now call kind of extraordinary one-off or not. It's basically a -- it's a metric risk, which will hit us every year kind of in a positive or negative way in Q1 due to the mild temperatures, actually record mild temperatures. That was the second warmest Q1, I think, during the last 50 years. Not that I recollect that, but what the statistics tell and that was a mid-double-digit million euro negative impact.

So across both segments, then it's a wash net nil impact from one-off essentially. Your question to CapEx spend there is very valid. And with that, you're referring to a publication that we have also done about the initial allocation plan, which is kind of an exercise, which is regularly done by the DSO in close alignment with the German regulator, where basically, on a regular basis, we look at what are actually the political targets for renewables build or for development of the energy system. Germany specifically relevant Easter package, and then it's broken down in a technical way. So what are, if you implement those targets as they are written, what would technically have to be done in order then to allow for these targets to be executed. And in that sense, this 50% upside to which you referred to, is to be taken with special care.

First of all, it just reconfirms what we have been telling our shareholders also with our full year results that when it comes to our network growth plans, there is room for more if economic conditions are right. And this is what we are working on in that sense, there is no change to our communication in our plans that we will continue to be working with the relevant authorities to make sure that economic incentives are the right ones to support this, which is one of the constraints by the way, which this initial allocation plan does not include, but which by legislation is actually given.

Secondly, it is a technical plan, which does not take into account practical constraints. And we have seen these practical constraints, particularly playing a role when it comes to permitting, just to mention one, and it would be unrealistic in our view to now assume that they're technically possible in an unconstrained way can be delivered with all the constraints which we have in a practical way. And in that sense, what you should take away is there is a huge potential for E.ON to further invest and accelerate our investments over time. And as just similar to our results, we also have the financial means to do this if the conditions set by the regulators fit.

[Alberto Gandolfi, analyst]

This is very clear. So if you just allow me a comment. You've done essentially if it's clean for Q1, you've done 36% of the midpoint of your guidance in Q1. So it seems you're leaving an easy rest of the year to Nadia from here.

[Marc Spieker, executive]

I take this as a statement, which I'm not commenting on. We move on.

[Iris Eveleigh, executive]

Exactly. So we move on to the next question. Thank you, Alberto. Next question comes from Harry from Exane.

[Harry Wyburd, analyst]

So 2 for me. First, can I dig in a little bit to what's going on in U.K. B2B supply. Why is it that you're earning so much, you made so much in such a short period of time? Do you think this is an industry-wide phenomenon for the whole of the U.K. supply market? Or is it just something that you're doing as E.ON? And can you just help us understand a bit what size of clients are driving this very good performance.

Are we talking about much smaller B2B customers or medium-sized, just a bit of color there would be very helpful. And second one is a bit more strategic and a bit of a follow-on from Alberto's questions on the CapEx. Is there any update or view from you on what your partners are doing or what others are doing in the German DNO market in terms of funding. Because I guess, if we're talking about an already upgraded CapEx plan potentially seeing even much more significant, more upside? And how are your partners going to fund this? And might we get into a situation where you're effectively incentivized to put your investment into your fully-owned DNO subsidiaries and not the ones where you've got partners because, of course, if your partners aren't putting capital in, it's harder for you to make a good return on your investment.

[Marc Spieker, executive]

Just on the second one, when you are referring to partner, could you just specify what partners exactly are you referring to? Are you referring to our co-investors on some of the DSO or are you referring to the [indiscernible]? Okay. Good.

So let me start with the second question. We see across the board an extremely strong alignment between our interest and the interest of our core investors on a DSO level, which are larger municipalities for a number of our German DSOs and there is a very strong focus on all of our sites to make the energy transition work. And if -- also from a funding point of view to make whatever is there needed and possible also then on the level of the DSO side. And generally, we do not see a particularly constraint on that side or a clash of interest nonesoever. On the I&C business in the U.K., it follows our strategy where we had said that in most markets, we want to exit large B2B customers. So to your question, what are the customers? It's large I&C clients. This is not small, medium enterprises.

This is around large industrial and commercial customers. And the U.K. is the only market where we continue to run such a segment at scale. But this is why also strategically, we are very clear on that business, we'll have to be steered on margins and not on volume. So what we have been seeing this business doing is running on a smaller and smaller book and focusing more and more on those customers where we are able then to make a risk-adjusted fair margin if I look at the risk transformation that we're doing for these clients. I don't want to refer and can't refer now to whether that's an industry-wide phenomenon or not. What I can tell you that this is not a one-hit wonder, which has happened now in Q1. It is a development that we have been working for throughout the last 4 years with the continuous effort on managing our customer portfolio in that business.

[Iris Eveleigh, executive]

Next question comes from Deepa from Bernstein.

[Deepa Venkateswaran, analyst]

And Marc, look forward to meeting you in person for your farewell events. So my 2 questions are actually centered around your German networks. So firstly, if I'm not mistaken, you were still awaiting for some more details on the current regulatory period. I was just wondering if you can update if there's been any change on the efficiency factors or anything.

And the second one was looking forward to the next regulatory period, there's obviously a consultation out from the regulator to move to back and reduce the regulatory period. And then there's also the live court case that you have for the current period. So just wondering how you think the negotiations will evolve? And should we assume that if you're successful in the court case, the regulator -- I mean is there quid pro quo between getting a better deal post '29 and leaving some money on the table for existing assets now? Or how would you think of this discussion.

[Marc Spieker, executive]

So where do we have news and where do we essentially looking at the same time line with no -- is expected no further update. So first of all, what we have seen since the full year results is the publication of the efficiency benchmark. And the good news is that E.ON continues to be very efficient, i.e., 100% efficient operator. And I think that underpins our strategic relevance and the efforts that we are doing and continuously focusing on operational excellence also in our Energy Networks business. There hasn't been a further update on then the general efficiency factor. So -- and that stands on the efficiency front. We have now a public confirmation about what we have been working towards any or as an ambition to be fully efficient and we now need to see how the regulator deals with the general efficiency factor. Still, this has not been published yet.

On the consultation, then for the regulatory period starting 2028 for I guess '29 for [ power ], no update essentially, Deepa that is worth relevant sharing here. I think what we continue to look at, first and foremost, is the proposal by the regulator. How to deal with depreciation schedules for existing gas networks. So this was one of the ideas expressed as part of the consultation paper where the regulator also pronounced that they were seeking there a fast solution. So kind of in the pipeline to expect is then a clarification by the regulator on how they intend to deal with existing gas networks, which is obviously also relevant for the energy transition in total. And for a lot of the market players, as you know for us [ gas ] networks has a very small share in our RAB but this is from a regulatory point of view, what we would expect to be the upcoming release. I think that's on the regulatory side.

[Deepa Venkateswaran, analyst]

Just the court case could you comment.

[Marc Spieker, executive]

Court case, also no update. So we haven't seen any -- there hasn't been any specific intervention with the court, no hearing, et cetera. So nothing to update on that side.

[Iris Eveleigh, executive]

With that, we move on to the questions from Wanda from UBS.

[Unknown Analyst]

Marc, all the best, again. Two questions for me. The first one is on your 2024 guidance. I mean, Energy Retail, you had a very strong start into the year. Q1 EBITDA accounts for 50% of the full year guidance. So do you expect any reversal later this year? Or is there any buffer included in the guidance, something similar to what you did at the end of last year. And if there is any buffer, would you be able to quantify it? And the second question is on the UK Retail. In March [indiscernible] launched a discussion paper for the future of price protection, the [indiscernible] collection is upcoming. How do you see the market structure changing as the current one, the price cut doesn't really work.

[Marc Spieker, executive]

So 2024 guidance, Wanda. I think what I would stress is that we are back basically in normal operations. So while the last 2 years have been very much affected by energy crisis and kind of the relief from the energy crisis. We are now more or less back in normal mode. And I think where we can take confidence from is how well we have managed the first quarter, which has been extremely mild. And this double-digit -- mid double-digit million euro negative impact from weather for the second warmest quarter during the last 50 years. That is a quite good performance. But it's too early now to say at this stage what that means for the remainder of the year. So for our guidance, take that we are managing towards the midpoint as usually. And at this stage, there's nothing that I would flag where we are particularly aggressive or conservative in the way how we have set our guidance.

And apart from that, you always know that we deliver what we promise. So -- but the midpoint is what it is at this stage. On U.K. retail, there's not a lot that I would share now in this call except for that what we see is that the U.K. regulator has been much more constructive during the last years reacting to the industry's needs. Think we have also seen this -- of generally seen in Europe, the recognition also of retailers of being a system critical part of the energy value chain. And lastly, what I do see that E.ON specifically is being regarded by politicians and regulators as a company that stands in for the interest of customers and is driving the market to the benefit of the customers.

And this gives us also where there are conversations, I think weighted the relevance in being heard in these discussions. And apart from that, it remains what I've said in the past that the U.K. regulation is very little wiggle room now to become worse because if you look at the results, which many of the operators in the U.K. are still achieving, it's not a marketplace where you could now easily just step in as a regulator and believe that U.K. worsening conditions, I think this is still a game about improving conditions to make these operations economically viable.

[Iris Eveleigh, executive]

With that, next question comes from Rob Pulleyn from Morgan Stanley.

[Robert Pulleyn, analyst]

I have one question, which is quite high level, Marc. And that is, how does E.ON see power demand over time, given, of course, in 2023 it remains significantly lower than we saw precrisis in 2021. Is this structural loss due to industry. What about electrification trends you've spoken about? And also more recently, the data center demand, which we covered on the full year conference call. So I'd love to know what you think is a good suggestion for the medium-term power demand run rate we should be thinking for E.ON from here across the decade.

[Marc Spieker, executive]

Yes, Rob, it's a very relevant long-term question, but happy to address that. So fundamentally, we are positive about the growth outlook of electricity volumes in our markets. So we expect electricity long term to be on a growth trend. Now when we talk about growth trends in energy, in developed markets, it's never high growth rates, but what we are seeing and expecting is a growth of 1%, 2% annually over time.

And with that, of course, electricity will be the key carrier to replace then a number of primary fuels, specifically, you look at transportation, mineral oil, and if you look at heating mineral oil and gas. So growth outlook for electricity long term. And I think that is also important if you allow me that comment. If you look at the impact on affordability of the energy transition and then you should always keep in mind that all of these investments will be spread over time about much more volumes that will be wheeled in the system and increasingly bidirectional. So increasingly, our customers will also provide their power to the system. And so from that end, we are also confident that this will play out in a decent way.

[Iris Eveleigh, executive]

Next question comes from Piotr from Citi.

[Piotr Dzieciolowski, analyst]

I have 2 questions, really. So firstly, I wanted to ask about the B2B business. Is this just the U.K. situation? Or this is also visible -- I know you don't have exposure, but this is also visible in the German and Benelux market? And why you saw [indiscernible] exclude the option to participate if there are some opportunities. You see the tender where the margin would be extremely high, why wouldn't you participate if the situation is similar in the continent? And second question I wanted to ask about your retail customer. Where are we in the process of passing through the lower falling commodity cost to the end customer deals. So if I were a customer in Germany, what kind of a reduction can I expect for '25, '26 onwards. And that's the question.

[Marc Spieker, executive]

Yes. Let me start with the second one, Piotr. So as you know, we are not giving a mid-long-term guidance on price development as we are a business that passes on the fundamental costs onto our customers. What we do see is that what is relevant for our customers, it's the commodity piece and it's the network charges. What we've seen for this year is from this essentially a stable price outlook. We have always different customer segments that will be then adjusted. We also have market-by-market different hedging windows, so the impact of that can be from a timing point of view, a bit different. But essentially, for example, look at Germany, we have seen very little price adjustments this year. And this is on the back of lower commodity prices and somewhat increasing network tariffs.

So all in all at this stage, limited impact. And then we need to see how commodity prices will develop over time but no further guidance as usual on how we see our end customer tariffs then moving. On the B2B business, we had actually been outspoken on that for the last 3, 4 years that we do not regard large industrial and commercial business as a strategically relevant segment for us. And to your question, therefore, in all other markets, we have moved out of that segment. So we are not running I&C retail businesses in any of the other markets. And the U.K. is the only one, and that is due to the specific situation of the Innogy integration and the Npower piece, which we had there, where we first focused on then kind of moving the E.ON and the Innogy business together on one platform.

It is actually from a branding point of view still running on the Npower brand in the U.K. And this is why this is our only material B2B position and hence, no real read across to any other of our markets, at least what would be relevant for us.

[Iris Eveleigh, executive]

Thank you very much, Marc. And with that, there are no further questions in the round. So I'll take this as a positive that we are delivering what we promised, and we are well on track. If there's anything that comes up after the call, the IR team is always is there to also answer any further questions that may be. With that, yes, I will close today's call.

[Marc Spieker, executive]

Thank you very much.

[Iris Eveleigh, executive]

Talk to you soon. Bye-bye.