Germany’s E.ON plans to invest $30 billion in core business by 2026

FRANKFURT/DUESSELDORF, Nov 23 (Reuters) – German energy group E.ON (EONGn.DE) plans to invest about 27 billion euros ($30 billion) in its core business, including networks and retail power, by 2026, it said on Tuesday, joining rivals in launching ambitious funding offensives.

Around 22 billion euros will be spent on E.ON’s power and gas distribution network – Europe’s largest – and 5 billion on customer solutions through which E.ON supplies around 50 million customers across the continent.

The investment programme comes a week after RWE (RWEG.DE), Germany’s largest power producer, mapped out a 50 billion euro spending push to expand its renewables capacity as Europe’s energy firms accelerate their green power ambitions. read more

“The decarbonization of Europe’s economies places the energy industry at the threshold of a key decade of growth,” Leonhard Birnbaum, who took over as E.ON’s CEO in April, said ahead of the group’s capital markets day.

“Having roughly 50 million customers in Europe and the continent’s biggest distribution network – which is the backbone of this transition – positions E.ON superbly to seize this opportunity.”

As part of the five-year plan, E.ON is also targeting 2 to 4 billion euros in proceeds from asset sales and partnerships, as well as additional annual savings of 500 million euros by 2026.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for its core business is expected to reach 7.8 billion euros in 2026, which would represent a compound annual growth rate of about 4% from 2021 to 2026, E.ON said.

E.ON also proposed to pay a dividend of 0.49 euros per share for 2021, up from 0.47 euros for 2020, and in line with the Refinitiv consensus.

Its current dividend policy, which foresees an annual growth rate of up to 5%, will be extended by three years until 2026, it said.

($1 = 0.8883 euros)

Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by David Evans, Mark Potter and Ana Nicolaci da Costa

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