display

Is Leonhard Birnbaum Germany's best-paid storyteller now?

When Johannes Teyssen handed over the head of the E.on Group to the ex-McKinsey man on the occasion of the presentation of the balance sheet, it almost seemed that this task was at the top of the successor's job description.

Because Teyssen handed over the house to E.on "well ordered", as his successor Birnbaum also praised.

Teyssen had successfully completed Germany's largest corporate transaction with rival RWE and completed the restructuring of the energy giant.

The deleveraging was achieved ahead of time, the nuclear phase-out was completed without a loss, and the profit is now at the upper end of the forecast.

The new at the top of E.on: Leonhard Birnbaum takes over the chief position from Johannes Teyssen

Source: dpa

There is only one thing that Birnbaum has to do now: to beat the drum for the share.

Because that is the less beautiful part of Teyssen's legacy: While RWE shares have increased in value by more than 40 percent in the past three years, E.on shares are still bobbing at the level of then.

display

Since the large market division with the former rival in the area, E.on investors have had to believe that they are on the losing side.

Source: WORLD infographic

"Now it is important to convey the strengths of the new group to the markets", was Teyssen's work assignment to his successor: "We have to convey to the shareholders the potential that lies in the infrastructure and in the customer solutions."

The network area does not spark any course fantasies

An uncomfortable job for Birnbaum.

Because although the internal strength of the new E.on Group is undeniably great, it should not be easy to convey this to the outside world.

Ultimately, E.on decided in the huge swap deal with RWE for the not so easy to grasp parts of the energy business.

display

Back then, RWE received all of its power plants and now produces green electricity for the energy transition.

Everyone can imagine something under this.

E.on, on the other hand, operates “infrastructure” and offers “customer solutions”.

While the latter can hardly be imagined by a layperson, the network area is regulated by the state and therefore does not spark any price fantasies among investors.

E.on may now have the largest power grid on the European continent with a length of 1.5 million kilometers.

But what good does it do if investors believe that exciting things only happen in front of and behind the cable, but not in the cable?

Birnbaum is young enough to let actions speak for themselves

Teyssen promised not to "walk through the scenes as a ghost" after his departure.

But he gave Birnbaum some formulation aids: "The most interesting thing about the energy transition is taking place in the grids," he said to the departing CEO.

"Our grids are the actual platform for the energy transition, we reach 53 million customers with them."

Johannes Teyssen stops at E.on.

The less beautiful part of his legacy is the stock bobbing in front of it

Source: picture alliance / dpa

display

But Birnbaum is not the type to be just heralds of old fame and barkers on the stock exchange.

The 54-year-old German-Italian is still young enough to let deeds speak for themselves.

Born in Ludwigshafen in the shadow of the BASF chimneys, his studies to become a chemical engineer were practically mapped out.

After working as a scientist at the Karlsruhe Research Center, he went to the oil metropolis of Houston in the USA for the McKinsey consultancy, where he became chief strategist on the RWE board in 2008 and moved to E.on in 2013.

As CEO of the green power division Innogy, he organized the demanding division of the company between E.on and RWE.

No quick price drops

Birnbaum takes over the management of the largest energy transition service provider with European ambitions.

In Germany alone, E.on supplies around 14 million customers via a 700,000-kilometer power grid.

The plans also include a climate-friendly heat supply using hydrogen and synthetic fuels.

The group subsidiary Preussen-Elektra, in which the remaining E.on nuclear power plants are operated, will lose its right to exist with the shutdown of the plants at the end of next year.

Customers cannot expect noticeable price reductions quickly, as Teyssen said when he left: In the long term, however, the price will decline.

There will be "a great flood of renewable energies".

"That has to lower household prices."

His successor sees it similarly.

New renewable systems would “be cheaper than existing conventional systems in a few years”.

Then the price development will "automatically tip over".

display

E.on wants to achieve 780 million euros in recurring savings through the Innogy takeover by 2024.

Of this, 130 million euros had already been realized by the end of 2020.

Eon closed last year with an adjusted net profit of 1.6 billion euros, after 1.5 billion euros on a pro forma basis in 2019. The bottom line was around 1.3 billion euros in 2020.

In the medium term, Eon wants to cut around 10,000 of its currently 79,000 jobs.

A large part of the jobs are to be cut in the sales business in Great Britain, where the group wants to be in the black for the first time this year.