- Adjusted EBITDA & Net Income Full-year 2025 adjusted EBITDA €9.8 billion, net income €3 billion, both at upper guidance range.
- Investments Growth Year-over-year investment increase of 13% to €8.5 billion, supporting regulated asset base expansion.
- 2030 Guidance Update CapEx raised to €48 billion (from €43 billion), targeting €13 billion adjusted EBITDA and €3.8 billion net income by 2030.
- Energy Networks Growth Underlying EBITDA growth of 6% annually until 2030, driven by €40 billion in grid investments (90% of total CapEx).
- Balance Sheet Capacity €5-10 billion available for strategic investments, with €4.5 billion annual flexibility for outer-year projects.
Growth Drivers and Investment Plans
E.ON's growth case is robust, driven by a secular growth trend in energy networks, with a focus on grid expansion and modernization, data centers, e-trucks, and renewable energy sources. The company has rolled forward its guidance to 2030, increasing its 5-year CapEx envelope from €43 billion to €48 billion. E.ON expects to deliver more than 6% earnings growth, with an attractive total shareholder return, including a reliable dividend growth commitment of up to 5% per year. The company's Energy Networks segment is expected to drive growth, with underlying EBITDA growth of around 6% per year to 2030.
Regulatory Environment and Challenges
E.ON is seeking regulatory improvements on cost of debt, cost of equity, and benchmarking. The company is awaiting clarity on two key points: the OpEx adjustment factor and the draft for gas distribution. E.ON criticizes the benchmarking, particularly regarding redispatching costs, which are included as influenceable costs. The company's operational benchmarking does not reflect its efforts, with 1/3 of the network investments, 70% of wind power, and 50% of solar power. As E.ON's management believes, the necessary investments will be made because they are beneficial for Germany and its customers.
Retail Business and Future Prospects
On the retail side, E.ON guides for growth, despite past performance being impacted by high prices and revenue normalization. The company targets 3-5% B2C margins and expects stable EBITDA from 2025 to 2026. E.ON plans to lay digital foundations for future flexibility products, which will ramp up in late 2026. Growth is expected to materialize in 2027 and 2028. Analysts estimate next year's revenue growth at 4.1%, indicating a positive outlook for the company's retail business.
Valuation and Return on Investment
With an EV/EBITDA ratio of 7.82 and a ROE of 16.7%, E.ON's valuation seems reasonable. The company's ROIC is 5.47%, indicating a decent return on investment. The Net Debt / EBITDA ratio is 3.22, which is manageable. Overall, E.ON's financial performance, growth drivers, and valuation metrics suggest a stable and attractive investment opportunity.