In 2014 E.ON recorded EBITDA of €8.3 billion (prior year: €9.2 billion), underlying net income of €1.6 billion (€2.1 billion), and operating cash flow from continuing operations of €6.3 billion, which was roughly on par with the 2013 figure.
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All figures are within the anticipated range. The earnings performance reflects the persistently difficult situation on energy markets in Germany and Europe as well as currency-translation effects and portfolio changes. On the cost side, by year-end 2014 the company had already achieved its target for reducing annual controllable costs under its E.ON 2.0 program, which was launched in 2011 and continues to the end of this year.
Impairment charges, most of which had already been announced in December, led to a net loss attributable to shareholders of €3.2 billion. The charges were recorded chiefly at E.ON's generation business in the United Kingdom, Sweden, and Italy. At the Annual Shareholders Meeting on May 7, management will propose a dividend of 50 cents per share, which corresponds to a total dividend payout of about €1 billion and a payout ratio of 60 percent of underlying net income.
Alongside the cost savings delivered by the E.ON 2.0 program, EBITDA benefited from improved earnings at the Generation, Renewables, and Exploration & Production segments. The Renewables segment's wind and solar business performed particularly well (+20 percent).
The first turbines of E.ON's two new wind farms in the North Sea, Humber Gateway and Amrumbank West, have started to produce electricity. When fully operational, the two farms will have an aggregate capacity of 500 megawatts. The Generation segment benefited primarily from special effect in Germany and Italy.
As anticipated, EBITDA was lower at the Germany, Other EU Countries, and Global Commodities segments. In Germany, Hungary, and the Czech Republic the divestments made in 2013 took full effect in the 2014 financial year. Currency-translation effects (primarily in Sweden and Russia) and the new regulation period for the German electricity network business (which began in 2014) also had an adverse impact on earnings. ■