Report
Expert Corporate Governance Service (ECGS)
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Innogy - AGM 30 April 2019

General: Supervisory Board member Marc Tüngler is Chief Managing Director of DSW, the local partner of ECGS. Furthermore, Supervisory Board members Dr. Rolf Pohlig and Ulrich Grillo are members of the Presidency of DSW. This report has been prepared using standard ECGS guidelines.

In February 2018, RWE announced a complex EUR 43bn deal to sell Innogy to E.ON, see section 3.1 for details.

Item 2: The dividend proposed by the Boards is covered by adjusted free cash flow but not by earnings. Last year, we raised our concerns over the fact that the dividend was not covered by neither EPS nor adjusted free cash flow. We note, however, that Innogy's dividend policy is linked to adjusted net income. Based on this dividend policy and the fact that the Company already pays out only a decreased dividend, we recommend supporting the dividend proposal for this year.

Item 7: In line with the legal requirements for Societas Europaeas (SE's) and the Company's Articles of Association, the employees within an SE have the right to make a proposal for representatives of employees on the Supervisory Board of Innogy SE. We recommend to oppose the election of Stefan May due to insufficient independent representation on the Board (30%) but note that the AGM is bound to the proposals for appointment of employee representatives.

Underlying
Innogy SE

Innogy SE is a Germany-based company, which is primarily involved in the utilities industry. The Company operates as a provider of electricity and natural gas. The Company's operations are divided into three segments, namely Renewables, Grid and Infrastructure and Retail. The Company operates plants for electricity generation and production from renewable energy sources. The Company is active in Germany, the Netherlands, Austria, Poland, Romania, Croatia, Slovakia, Slovenia, the United Kingdom, among others.

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Proxinvest
Proxinvest

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