Quarterly Report • May 13, 2020
Quarterly Report
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| At a glance 8 4 | |
|---|---|
| Report of the Executive Board 8 5 | |
| Investor relations 8 8 | |
| Interim Group management report 10 | |
| Business performance 10 | |
| Opportunity and risk management 18 | |
| Segment report 20 | |
| Events after the reporting date 26 | |
| Consolidated interim financial statements 27 | |
| Income statement 27 | |
| Statement of comprehensive income 28 | |
| Balance sheet 29 | |
| Cash flow statement 30 | |
| Statement of changes in equity 32 | |
| Selected explanatory notes 34 | |
| Responsibility statement of the legal representatives 51 |
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Revenue | €m | 1,208.4 | 1,257.3 | 4.0% |
| EBITDA | €m | 348.0 | 331.0 | –4.9% |
| EBITDA adjusted | €m | 348.0 | 331.0 | –4.9% |
| Operating result | €m | 258.3 | 236.2 | –8.5% |
| Group result | €m | 178.1 | 156.5 | –12.1% |
| Group result adjusted | €m | 178.1 | 156.6 | –12.1% |
| Earnings per share | € | 0.51 | 0.45 | –12.1% |
| EBIT margin | % | 21.4 | 18.8 | – |
| EBITDA margin | % | 28.8 | 26.3 | – |
| Cash flow from operating activities | €m | 379.8 | 298.2 | –21.5% |
| Additions to property, plant and equipment | €m | 48.1 | 88.2 | 83.4% |
| Free cash flow before dividends | €m | 305.6 | 150.2 | –50.9% |
| Free cash flow after dividends | €m | 305.6 | 150.2 | –50.9% |
| Average number of employees | 2,749 | 2,819 | 2.5% | |
| Electricity sales volume | GWh | 15,099 | 15,176 | 0.5% |
| Hydro coefficient | 1.21 | 1.09 | – |
| Unit | 31/12/2019 | 31/3/2020 | Change | |
|---|---|---|---|---|
| Total assets | €m | 11,838.6 | 12,124.8 | 2.4% |
| Equity | €m | 6,568.0 | 6,844.5 | 4.2% |
| Equity ratio (adjusted) | % | 57.7 | 58.7 | – |
| Net debt | €m | 2,256.1 | 2,104.2 | –6.7% |
| Gearing | % | 34.4 | 30.7 | – |
The situation in the energy market changed quite suddenly in quarter 1/2020 due to the COVID-19 crisis. Neither the real economy nor the financial economy has been able to escape the effects of COVID-19, and even the energy markets are feeling the consequences of the global pandemic. Following the outbreak of the crisis in Europe, prices for CO2 emission rights fell due to declining electricity production and an oversupply of CO2 emission rights. A massive drop in demand from industry and business caused prices for coal, natural gas and crude oil to drop as well, in some cases quite substantially. The decline in demand also negatively impacted wholesale prices for electricity. However, thanks to our low debt levels and strategy for hedging VERBUND's own electricity generation, the Company continues to be well positioned for 2020 despite the difficult energy landscape. In quarter 1/2020, for example, we recorded a satisfactory business trend despite the coronavirus crisis.
After the outbreak of the COVID-19 crisis, we temporarily scaled back some of our investment projects. This permitted us to focus our resources on security of supply and operation-critical projects, especially projects and actions relating to flood protection and ensuring grid security. At present, the project sites are being ramped up again insofar as possible while adhering to safety precautions.
With respect to managing the crisis, we at VERBUND responded early to safeguard security of supply – but without compromising the health of our employees as our top priority. The personnel operating our power plants have been separated in accordance with regularly practiced scenarios, and teams have been split up. To avoid unnecessary contact, autonomous "work islands" have been set up at the plants. Our decades-long experience with operating our plants remotely from a central location has paid off in this respect. Personnel are also on standby to perform repairs at any time. This is a system that has worked well for many years. To maintain operations, we immediately put measures in place to allow staff to work from home and to physically separate employees, among other things. With respect to electricity trading and sales to large-scale customers, we are still executing trades via our online customer platform while working from home. Physically distanced teams continue to control power plant operations and market own generation on a short term basis at our headquarters and at our crisis centre. All of the measures have been implemented in compliance with our strict standards for data protection and IT security. Our high level of digitalisation has also proven useful in terms of operating the power grid during the current crisis. In addition to APG's smart remote grid operation concept, which makes it possible to split up teams, nearly all non-operational processes can be handled remotely. This ensures the highest possible levels of efficiency, even while personnel are working from home.
For example, we succeeded in safeguarding an uninterrupted supply of electricity for Austria and for our customers, in using hedging strategies to make up for falling electricity prices and in maintaining our solvency via credit lines. The supply of power to our customers is guaranteed: until further notice, VERBUND will not cancel any electricity contracts with households or small businesses (up to 100,000 kWh) for non-payment. Customers will merely be sent reminders of their outstanding amounts. Our success in reducing our own debt and our solid credit rating are proving advantageous during these unusual times. We are thus well positioned for the coming months. Nonetheless, we are carefully monitoring events and reassessing the situation on an ongoing basis.
We plan to adhere to our capital expenditure programme and our strategy for the coming three years notwithstanding the crisis. In future, we will focus more heavily on expanding electricity generation from new renewable energy sources. VERBUND's streamlined strategy envisages that by 2030 a total of 20–25% of the electricity we generate will come from new renewable sources of energy. For this reason, VERBUND established a new subsidiary at the end of financial year 2019, VERBUND Green Power GmbH. Openfield solar installations and onshore wind farms will thus grow in importance for VERBUND. The project pipeline is already well filled, and the projects included are currently in either the evaluation or processing stages. This also applies to the potential acquisition of a stake in Gas Connect Austria GmbH. We are currently carefully reviewing a possible acquisition of 51% in the Austrian operator of a longdistance natural gas pipeline grid.
The following additional projects are either still on the agenda or were completed/implemented in quarter 1/2020 during the COVID-19 crisis: we concluded the rehabilitation measures at the Altenwörth and Ottensheim-Wilhering hydropower plant despite the difficult conditions. With an output of 2 bn kWh each year, the Altenwörth plant on the Danube River is Austria's largest run-of-river hydropower plant. The immediate availability of electricity generated from the Danube and the plant's stable output is especially important in the current situation. In Mellach, the district heating power plant discontinued coal-fired electricity generation after 34 years of operation. This also signifies the end of electricity production from coal in Austria and represents another major milestone in VERBUND's decarbonisation strategy. The grid support contract with Austrian Power Grid (APG) still runs until 2021. In addition, hydrogen was produced at the Mellach site using high-temperature electrolysis for the first time ever in quarter 1/2020. This marks the start of an ambitious pilot project to research how hydrogen can be produced and used in actual operations. We are testing the use of climate-neutral hydrogen to partially replace the fossil fuel of natural gas in real-world power plant operations. The research is being performed by VERBUND in cooperation with Graz University of Technology and plant manufacturer Sunfire and is set to run for three years. Afterwards, VERBUND will continue to operate the research facility in Mellach as dictated by the requirements of the control power market.
VERBUND reported good results for quarter 1/2020 despite the COVID-19-related changes in the operating environment. EBITDA fell only slightly (by 4.9%) to €331.0m. The Group result was down 12.1% on the prior-year period to €156.5m. Earnings benefitted from the rise in wholesale electricity prices on the futures markets during the relevant hedging period. By contrast, prices declined on the spot markets in quarter 1/2020, due in part to the effects of the coronavirus crisis. Water supply was at a good level in quarter 1/2020. The hydro coefficient for the run-of-river hydropower plants came to 1.09, or 9 percentage points above the long-term average, but 12 percentage points below the figure for quarter 1/2019. Generation from our annual storage power plants increased substantially in quarter 1/2020, however. In summary, the EBITDA contributions from the Hydro, New renewables and Sales segments increased, while the contributions from the Grid and All other segments decreased.
We have adjusted our earnings forecast to account for the effects of the COVID-19 crisis. Based on expectations of average levels of own generation from hydropower and wind power in quarters 2–4/2020 as well as the opportunities and risks identified, we are now projecting EBITDA of between approximately €1,090m and €1,250m and a Group result of between approximately €470m and €560m in financial year 2020.
In conclusion, we would like to thank our employees for their tireless efforts in these difficult times. It is only thanks to their quick, careful and efficient actions that it has been possible to guarantee security of supply all across Austria.
Contact: Andreas Wollein Head of Group Finance, M&A and Investor Relations Tel.: +43 (0)50 313-52604 E-mail: [email protected] The stock markets got off to a good start in 2020. While the coronavirus was still mostly confined to China and Italy, some of the US exchanges posted record highs. Indeed, the financial markets remained unaffected by the pandemic for a surprisingly long time. However, once it was clear that the crisis would have a major impact on Europe and the US as well, stock prices began plummeting on all trading venues from the end of February 2020. At present, growth forecasts are being continually revised downward despite massive interventions on the part of central banks, a temporary halt to the trade war between the US and China and establishment of various government emergency assistance programmes. Listed companies are issuing profit warnings as a matter of course. It can currently be assumed that the economy will be in a downturn until at least the end of 2020.
The US benchmark index Dow Jones Industrial Average ended quarter 1/2020 down 23.2%. The situation on the Eurostoxx 50 was similar, with the index recording significant losses in quarter 1/2020 to end the first quarter down 25.6% compared with year-end 2019. The Japanese benchmark index Nikkei 225 ended the quarter with a loss of 20.0%, representing a slight improvement compared with 31 December 2019. Share prices in the emerging markets performed in line with the exchanges in the US and Europe. The MSCI Emerging Markets Index, for instance, saw massive price declines and ended quarter 1/2020 down 23.9%.
Next scheduled dates: Record date for Annual General Meeting: 6 June 2020 Annual General Meeting: 16 June 2020
In quarter 1/2020, VERBUND shares continued on their ascending trajectory from the start of the year until mid-February, when the outbreak of the coronavirus in Europe put an abrupt end to the upward trend. The shares lost massive ground until mid-March 2020, after which they began easing slightly higher. By the end of quarter 1/2019, the share price had transitioned into sideways movement. VERBUND shares ended quarter 1/2020 at €33.0 as at 31 March 2020, down 26.2% compared with year-end 2019. The Group's shares thus outperformed the Austrian ATX (–37.2%), but underperformed the DJ STOXX Utilities sector index (–12.7%).
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Share price high | € | 45.1 | 50.1 | 11.1% |
| Share price low | € | 38.0 | 29.0 | –23.7% |
| Closing price | € | 42.8 | 33.0 | –22.8% |
| Performance | % | 14.9 | –26.2 | – |
| Market capitalisation | €m | 14,862.4 | 11,471.7 | –22.8% |
| ATX weighting | % | 6.4 | 7.0 | – |
| Value of shares traded | €m | 1,266.6 | 1,451.8 | 14.6% |
| Shares traded per day | Shares | 473,853 | 549,625 | 16.0% |
| Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|
| Hydropower1 | 7,107 | 6,776 | –4.7% |
| Wind power | 297 | 315 | 6.2% |
| Thermal power | 385 | 576 | 49.6% |
| Own generation | 7,789 | 7,667 | –1.6% |
| Electricity purchased for trading and sales | 7,394 | 7,559 | 2.2% |
| Electricity purchased for grid loss and | |||
| control power volumes | 881 | 1,052 | 19.3% |
| Electricity supply | 16,064 | 16,277 | 1.3% |
incl. purchase rights
VERBUND's own generation decreased by 122 GWh to 7,667 GWh as at the end of quarter 1/2020, a drop of 1.6% compared with quarter 1/2019. Generation from hydropower decreased by 331 GWh in comparison with the prior-year reporting period. The hydro coefficient for the run-of-river hydropower plants came to 1.09, or 12 percentage points below the prior-year figure and 9 percentage points above the long-term average. Generation from annual storage power plants increased substantially (+13.9%) in quarter 1/2020 due to increased lowering of water levels and increased turbining.
Hydro coefficient (monthly averages)
VERBUND's wind power installations generated 19 GWh more electricity in quarter 1/2020 than in the prior-year period, mainly due to windier conditions in Romania and Germany.
Generation from thermal power plants increased by 191 GWh in quarter 1/2020. The Mellach combined cycle gas turbine power plant produced 146 GWh more electricity in the reporting period due to increased use for congestion management compared with the prior year. Generation at the Mellach coal-fired power plant rose by 45 GWh. Purchases of electricity from third parties for trading and sales increased by 164 GWh in quarter 1/2020, and electricity purchased from third parties for grid losses and control power was up 170 GWh.
| Group electricity sales volume and own use | GWh | ||
|---|---|---|---|
| Q1/2019 | Q1/2020 | Change | |
| Consumers | 3,416 | 3,521 | 3.1% |
| Resellers | 6,539 | 6,850 | 4.8% |
| Traders | 5,144 | 4,805 | –6.6% |
| Electricity sales volume | 15,099 | 15,176 | 0.5% |
| Own use | 700 | 861 | 23.0% |
| Control power | 266 | 240 | –9.5% |
| Electricity sales volume and own use | 16,064 | 16,277 | 1.3% |
VERBUND's electricity sales volume rose by 213 GWh, or 1.3%, in quarter 1/2020. Most of the increase was attributable to higher sales to resellers (+311 GWh) and consumers. The rise in sales to resellers was due above all to increased deliveries to cover grid losses within Austria. Electricity volumes delivered to consumers rose by 106 GWh due to higher international sales. As at 31 March 2020, our residential customer base comprised approximately 515,000 electricity and gas customers. Electricity deliveries to traders declined by 339 GWh, mainly as a result of reduced spot market sales. Own use of electricity rose by 161 GWh in quarter 1/2020. The increase was attributable above all to increased operation of the Group's power plants in turbining mode.
| Electricity sales by country | GWh | ||
|---|---|---|---|
| Q1/2019 | Q1/2020 | Change | |
| Austria | 8,030 | 8,078 | 0.6% |
| Germany | 6,060 | 5,824 | –3.9% |
| France | 849 | 1,048 | 23.5% |
| Others | 160 | 226 | 41.1% |
| Electricity sales volume | 15,099 | 15,176 | 0.5% |
Approximately 53% of the electricity sold by VERBUND in quarter 1/2020 went to the Austrian market. International trading and sales activities focused on the German market, which accounted for around 82% of all volumes sold abroad in the quarter now ended.
Futures prices traded in the year before supply. The years stated are the respective years of supply. 2016–2018: Market area Germany/Austria. Starting 2019: Market area Germany or Austria respectively. Spot prices 2016–2018: Market area Germany/Austria. Starting 2019: Market area Germany or Austria respectively. Average prices. Source: EEX, EPEX Spot
VERBUND contracted for most of its own generation for 2020 on the futures market back in 2018 and 2019. Ever since the split of the joint German-Austrian price zone in October 2018, separate, higher prices have prevailed in Austria. Prices for AT 2020 front-year base load contracts (traded in 2019) averaged €51.2/MWh in 2019, and prices for DE 2019 front-year base load contracts averaged €47.8/MWh. This represents an increase in futures market prices of 9.9% (AT) and 9.0% (DE) compared with the previous year. Front-year peak load (AT) contracts averaged €62.1/MWh in 2019 and front-year peak load (DE) contracts traded at an average of €57.7/MWh, representing a year-on-year increase of 9.3% and 6.9% respectively. The increases were primarily due to the sharp rise in the price of CO2 emission rights on the market.
On both the Austrian and German spot markets, the COVID-19 pandemic pushed down wholesale trading prices for electricity in quarter 1/2020 to well below the prior-year level. Average prices for base load electricity declined by 30.0% to €31.5/MWh in Austria and by 35.0% to €26.6/MWh in Germany. Average peak-load prices were down by 28.6% to €38.0/MWh in Austria and by 29.4% to €35.0/MWh in Germany.
| €m | ||
|---|---|---|
| Q1/2019 | Q1/2020 | Change |
| 1,208.4 | 1,257.3 | 4.0% |
| 348.0 | 331.0 | –4.9% |
| 258.3 | 236.2 | –8.5% |
| 178.1 | 156.5 | –12.1% |
| 0.51 | 0.45 | –12.1% |
VERBUND's electricity revenue rose by €53.6m to €1,060.1m in quarter 1/2020. In terms of quantities, electricity sales volumes increased by 77 GWh, or 0.5%, year-on-year. Revenue also benefitted from the rise in wholesale electricity prices on the futures markets. By contrast, prices on the spot markets declined significantly in quarter 1/2020, due in part to the effects of the coronavirus crisis.
Grid revenue decreased by €9.8m to €142.7m in quarter 1/2020 compared with the same period in 2019. The decline was largely attributable to lower domestic grid revenue as a result of tariff reductions. However, increases in revenues from balancing services as well as from cross-border capacity auctions had a positive impact.
Other revenue rose by €5.2m to €54.5m. Higher revenue from the sale of green electricity certificates was counteracted by slightly lower revenue from the sale of emission rights. Other operating income increased by €5.3m to €15.5m, primarily due to an increase in own work capitalised.
Expenses for electricity, grid, gas and certificates purchases increased by €40.3m to €759.1m. A total of 335 GWh more electricity was purchased from third parties for trading and sales as well as for grid loss and control power volumes. Higher procurement prices arising from the overall rise in price levels for wholesale electricity also caused expenses to rise. Expenses for electricity purchases therefore increased by €46.1m compared with quarter 1/2019. Expenses for grid purchases decreased by €0.6m and expenses for gas purchases by €4.1m.
Fuel and other usage-/revenue-dependent expenses rose by €10.8m to €39.4m. The increase in gas consumption attributable to greater use of the Mellach combined cycle gas turbine power plant for congestion management (for details please refer to the section entitled Electricity supply and sales volumes) was partially offset by a decrease in the price of gas. Coal expenses increased as a result of greater use of the Mellach coal-fired plant. The higher fuel expenses were also due in particular to higher expenses for emission rights attributable to the increase in generation and the surge in CO2 prices.
Personnel expenses increased by €7.1m year-on-year to €87.1m. The higher expenses resulted from the inclusion of VERBUND Trading & Sales Deutschland GmbH in the Group's consolidated financial statements, a 2.6% increase in collective wages and the hiring of additional employees to carry out strategic growth projects.
Other operating expenses rose by €13.0m to €56.2m. The increase was due to a rise in goods and services purchased from third parties, higher legal, audit and consulting expenses and higher IT and advertising expenses.
As a consequence of the above-mentioned factors, EBITDA decreased by 4.9% to €331.0m.
Amortisation of intangible assets and depreciation of property, plant and equipment rose by €5.0m to €94.7m. The increase was mainly due to accelerated depreciation being charged on the Braunau and Schärding power plants based on their gradual rehabilitation as well as a usage-based increase in depreciation charged on the Mellach CCGT as a result of its increased use for congestion management.
The result from interests accounted for using the equity method decreased by €2.6m to €10.1m. This line item essentially contains the earnings contributions from KELAG in the amount of €10.3m (Q1/2019: €9.8m).
Interest income decreased by €0.6m to €7.9m compared with quarter 1/2019. Interest expenses declined by €9.2m to €21.5m, due in particular to lower interest on bonds as a result of higher repayments of principal in financial year 2019.
The other financial result decreased by €13.4m to €–7.2m in quarter 1/2020, mainly as a result of the measurement of securities funds through profit or loss in accordance with IFRS 9.
After taking account of an effective tax rate of 22.2% and non-controlling interests in the amount of €19.6m, the Group result amounted to €156.5m. This represents a decrease of 12.1% compared with the previous year. Earnings per share amounted to €0.45 (Q1/2019: €0.51) for 347,415,686 shares.
| Consolidated balance sheet (condensed) €m |
|||||
|---|---|---|---|---|---|
| 31/12/2019 | Share | 31/3/2020 | Share | Change | |
| Non-current assets | 11,061.9 | 93% | 11,067.1 | 91% | 0.0% |
| Current assets | 776.7 | 7% | 1,057.7 | 9% | 36.2% |
| Total assets | 11,838.6 | 100% | 12,124.8 | 100% | 2.4% |
| Equity | 6,568.0 | 55% | 6,844.5 | 56% | 4.2% |
| Non-current liabilities | 4,107.4 | 35% | 4,140.0 | 34% | 0.8% |
| Current liabilities | 1,163.2 | 10% | 1,140.3 | 9% | –2.0% |
| Equity and liabilities | 11,838.6 | 100% | 12,124.8 | 100% | 2.4% |
VERBUND's non-current assets increased slightly from the level as at 31 December 2019. With respect to property, plant and equipment, additions of €88.2m were offset by depreciation of €83.8m. The main additions to property, plant and equipment related to investments in the Austrian transmission grid and replacement investments at Austrian and German hydropower plants. The increase in current assets resulted above all from higher positive fair values for derivative hedging transactions in electricity trading.
The increase in equity compared with 31 December 2019 was mainly attributable to the profit for the period generated in quarter 1/2020 and the positive impact of the measurement of cash flow hedges on other comprehensive income. The changes in current and non-current liabilities was primarily the result of higher negative fair values for derivative hedging transactions in electricity trading, whereas repayments of financial liabilities had a counteracting effect.
| Cash flow statement (condensed) | €m | ||
|---|---|---|---|
| Q1/2019 | Q1/2020 | Change | |
| Cash flow from operating activities | 379.8 | 298.2 | –21.5% |
| Cash flow from investing activities | –279.9 | –147.9 | –47.1% |
| Cash flow from financing activities | –31.0 | –85.9 | – |
| Change in cash and cash equivalents | 68.8 | 64.4 | –6.5% |
| Cash and cash equivalents as at 31/3/ | 108.2 | 109.0 | 0.8% |
Cash flow from operating activities amounted to €298.2m in quarter 1/2020, down €81.5m on the prioryear figure. In addition to changes in working capital, the difference was chiefly due to margining payments for hedging transactions in electricity trading provided as security for open positions held with exchange clearing houses. The hydro coefficient was 1.09 in quarter 1/2020, down from 1.21 in quarter 1/2019.
Cash flow from investing activities amounted to €–147.9m in quarter 1/2020 (Q1/2019: €–279.9m). The change compared with quarter 1/2019 was mainly due to the lower net cash outflow from capital expenditure for investments (€+205.7m). The higher cash outflow from capital expenditure for intangible assets and property, plant and equipment (€–73.7m) had an offsetting effect.
Cash flow from financing activities amounted to €–85.9m in quarter 1/2020, representing a difference of €54.9m. The change was mainly due to a higher cash outflow from money market transactions (€–53.9m) and a higher cash outflow from the repayments of lease liabilities (€–3.0m). A reduction in the cash outflow from the repayment of financial liabilities (€+2.1m) had a counteracting effect.
Fluctuations in the operating result may be caused primarily by fluctuating levels of electricity generated from hydropower, which arise in particular because hydrological conditions cannot be controlled. Towards the end of quarter 1/2020, the oil price dispute in combination with the COVID-19 crisis led to a steep drop in electricity prices. Fluctuations in the marketing of control power and congestion management can lead to higher earnings volatility, as can any additional revenue arising from regulatory impacts on grid operations. In addition, changes in the operating environment and ongoing judicial proceedings could necessitate measurement-related adjustments to VERBUND's assets as well as changes in provisions.
During the present COVID-19 crisis, the overriding goal is to maintain a secure supply of electricity in Austria with respect to both production and transmission. VERBUND's tried-and-tested crisis management organisation and the VERBUND crisis management team are working in close cooperation with state crisis and disaster management units to guarantee supply. The health of VERBUND workers is extremely important to us. All personnel deployed at our power plants and control centres have been split up into physically separate teams, and most administrative employees are now working from home. VERBUND is currently preparing an internal analysis of the risks posed by the crisis and their effects, both long- and short-term. The impact on short-term electricity prices is already clearly evident. A reduction in electricity consumption can also be seen in the transmission grid based on temporary declines in revenue from grid usage fees. The multi-year projections do not foresee any impact on earnings due to regulation. The total impact of the crisis will depend on how long specific branches of industry remain shut down and the extent of the resulting decline in demand as well as the course the imminent global recession will take. Moreover, it is possible that the COVID-19 pandemic will lead to delays and/or postponements of projects until 2021, on both the generation side and the transmission side.
The potential extent of fluctuation in the financial result is determined by the following factors: the volatility of investment income, measurement effects on the balance sheet arising from changes in market prices and interest rates, and potential expenses from collateral provided being called in.
All else remaining equal, a change in the factors shown below would be reflected in the planned Group result for full-year 2020 as follows (based on the hedging status as at 31 March 2020 for generation volumes and interest rates):
Generation from hydropower is reported under the Hydro segment.
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Total revenue | €m | 267.1 | 279.8 | 4.8% |
| EBITDA | €m | 198.5 | 200.4 | 1.0% |
| Result from interests accounted for | ||||
| using the equity method | €m | 3.2 | 0.2 | –93.0% |
| Capital employed | €m | 6,174.6 | 6,052.8 | –2.0% |
EBITDA for the Hydro segment increased slightly over the prior-year level, due mainly to a rise in the average prices obtained for electricity sales compared with the previous year and in spite of a decrease in generation output. The hydro coefficient was 1.09 in quarter 1/2020, down from 1.21 in quarter 1/2019. The result from interests accounted for using the equity method was largely made up of the earnings contribution from Ashta Beteiligungsverwaltung GmbH.
Capital employed declined by €121.8m to €6,052.8m, due primarily to changes in working capital.
In a few specific cases, the COVID-19 pandemic led to minor delays in ongoing new build and expansion projects in March 2020. Work on all projects has now resumed with the proper health-related protocols having been put in place (e.g. splitting up teams, taking the necessary safety precautions).
Starting in early March 2020, the Tuxbach expansion project was impacted by travel restrictions affecting workers from Italy. It was therefore necessary to temporarily halt work from 17 to 31 March. Work on the project resumed in the second week of April as mentioned above. Commissioning will be postponed by around four weeks (until quarter 3/2020) due to the delays as well as ongoing travel restrictions.
Owing to restrictions on movement, the Töging/Jettenbach expansion and renovation project experienced minor delays in certain supply chains for components as well as limitations in the availability of construction personnel in quarter 1/2020. The floodwater discharge system at weir field 3 was nonetheless approved for operation during the reporting period, and work on the Jettenbach and Fraham dams was completed. As at the end of March 2020, construction work was progressing on schedule despite the aforementioned restrictions.
Regarding the Ybbs rehabilitation project, it was possible to continue with the assembly work on schedule in quarter 1/2020, albeit under more difficult conditions. Concerning the project to build a new power plant in Graz, the planned increase in VERBUND's investment to 25.1% has now been approved by the competition authority.
We report on our wind and solar power activities in the New renewables segment.
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Total revenue | €m | 27.4 | 38.6 | 40.8% |
| EBITDA | €m | 20.2 | 22.4 | 10.8% |
| Result from interests accounted for | ||||
| using the equity method | €m | 0.1 | 0.0 | –39.3% |
| Capital employed | €m | 410.4 | 421.9 | 2.8% |
EBITDA rose by €2.2m to €22.4m. The increase was due mainly to increased production in Romania compared with the prior year and higher income from the sale of Romanian green electricity certificates. Wind supply increased from 1.00 in quarter 1/2019 to 1.07 in quarter 1/2020.
Capital employed was up €11.5m to €421.9m. The increase was due above all to additions to property, plant and equipment and changes in working capital.
The goal of VERBUND is to grow its wind and solar power operations and to make a significant contribution to the Austrian and European climate and energy strategy. To this end, VERBUND established a subsidiary under the name of VERBUND Green Power GmbH at the end of 2019. In the wind energy sector, VERBUND Green Power GmbH focuses on onshore installations. In the solar power sector, the primary focus is on large-scale, full feed-in installations. VERBUND Green Power is responsible for managing the Group's wind power portfolio and carrying out project development. VERBUND's long-term objective is to set up a profitable onshore wind and solar portfolio that will account for approximately 20–25% of VERBUND's overall generation by 2030.
Rooftop solar installations are presently being installed on a number of buildings at the Greifenstein, Altenwörth and Melk plants (Lower Danube plant group). The installations will have a capacity of around 400 kWp. In addition, a 1.3 MWp open-field solar installation is being built in the municipality of Ludmannsdorf, directly next to the Feistritz-Ludmannsdorf hydropower plant. Alongside the current construction projects, VERBUND also put together an extensive wind and solar project pipeline during the first three months of 2020. The pipeline includes projects both in Austria and abroad that are currently either being subjected to a thorough analysis or are in the processing stage.
Responsibility for the Company's 50% investment in SOLAVOLTA, a VERBUND subsidiary, was transferred from VERBUND Solutions GmbH to VERBUND Green Power GmbH.
The Sales segment comprises VERBUND's trading and sales activities. As a result of the Downstream project, the Energy services segment, which was previously reported under All other segments, has also been integrated into the Sales segment.
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Total revenue | €m | 997.4 | 1,042.5 | 4.5% |
| EBITDA | €m | 19.1 | 20.9 | 9.0% |
| Result from interests accounted for | ||||
| using the equity method | €m | –0.3 | –0.5 | 63.2% |
| Capital employed | €m | 202.3 | 94.1 | –53.5% |
EBITDA for the Sales segment rose by €1.7m year-on-year to €20.9m. Higher earnings contributions from the consumer business were the main reason for the increase.
Capital employed was down €108.3m on the prior-year level. The decrease was mainly due to changes in working capital, which were offset by higher levels of non-interest-bearing debt.
To take maximum advantage of the changes occurring in the design of the electricity market, which can be summarised by the keywords of decarbonisation, decentralisation and digitalisation, VERBUND restructured its sales activities in the context of the Downstream project. The organisational restructuring of the Sales segment was completed in quarter 1/2020. The Downstream project aimed not only to hone sales skills but also to combine projects in the fields of distributed generation and storage in order to take better advantage of the benefits of an integrated value chain, to position VERBUND as a competent, fullspectrum energy manager vis-a-vis customers and to secure additional earnings contributions over the long term.
The merger of VERBUND Energy4Business GmbH (the absorbing company, formerly VERBUND Trading GmbH) with VERBUND affiliate VERBUND Sales GmbH (after the consumer business was spun off) and VERBUND Solutions GmbH was executed in connection with the realignment. As a result, all of VERBUND's trading activities, the marketing of VERBUND's own generation and the industrial customer business/B2B activities are now part of the same company, along with projects and new business models from the Solutions business area.
VERBUND Energy4Business GmbH focuses on two core areas: first, optimum marketing of VERBUND's own generation, supplemented by trading activities; and second, sales and distribution activities, including the solutions business.
The company's electricity trading activities mainly involve hedging generation on the wholesale markets, marketing flexibility options, optimising balancing energy operations, handling intraday trading and marketing balancing services and congestion management.
Sales activities continue to focus on expanding VERBUND's position as one of the leading providers of innovative green electricity and flexibility products as well as energy services and on marketing renewable energy (particularly wind, solar and small-scale hydropower). VERBUND's product portfolio, i.e. the market segment it serves, is being broadened to include industrial customers, which were previously supplied by VERBUND Sales GmbH. The focus here is on new business models for marketing and distributing solar power generating facilities for (or in cooperation with) business customers. VERBUND is working together with OMV to construct Austria's biggest open-field solar power plant at an OMV location in the Weinvertel region of Austria. The plant will have a capacity of 14 MWp. An expanded range of products and services will be supplemented by innovative projects and cooperation models involving large-scale batteries/battery storage units and hydrogen.
The VERBUND Power Pool registered a significant increase in revenue from demand response operations in quarter 1/2020 compared with quarter 1/2019. The rise in revenue was attributable to the cancellation of the mixed price system for allocating balancing energy from automatic frequency restoration reserves (aFRR) effective 31 July 2019. Compared with quarter 4/2019, however, revenue declined somewhat due to the introduction of a joint process between Austria and Germany for setting capacity prices for aFRR as well as to the fact that February and March tend to be lower-revenue months.
Regarding the EU-funded, SYNERG-E industrial-scale battery project, the second battery storage unit was put into commercial operation at the Innsbruck site at the end of quarter 1/2020. The batteries are currently being used to cap load peaks at ultra-E fast charging stations. In quarter 2/2020, the batteries will also be used in the marketing of control power. Another three units are expected to be ready for operation in Austria and Germany in quarter 2/2020.
VERBUND succeeded in raising gross acquisitions by 3% in quarter 1/2020 compared with quarter 1/2019. As at 31 March 2020, the Company's customer base comprised approximately 515,000 customers. VERBUND's successful autumn campaign, which ran from October 2019 until the end of January 2020, accounted for a large share of new acquisitions in January and February. Gross acquisitions declined in the second half of March, mainly due to the effects of the COVID-19 pandemic.
In quarter 1/2020, SMATRICS (VERBUND share: 40%) further expanded on its position as a leading international e-mobility supplier with a focus on infrastructure, provision of services and IT.
For business customers, the company provides services along the entire e-mobility value chain. In addition to planning and project development – including rolling out around 190 locations for a major German utility – SMATRICS built out its portfolio of standard products. The portfolio includes products for charging station operators and mobility service providers alike.
SMATRICS succeeded in winning Austrian national public service broadcaster Österreichischer Rundfunk (ORF) as a customer for its new "Company Charging" product, which enables charging on site at the business location. In addition to its over 450 own charging stations, SMATRICS presently operates several thousand charging points for and on behalf of customers. It has developed a proprietary IT system (charVIS) to ensure efficient operations. Among other use cases, the system is sold to charging station operators as a software as a service product. SMATRICS has also begun developing and implementing solutions designed to comply with the requirements of calibration law. The company moreover closed a deal with renowned Austrian telecommunications company A1 in addition to forming partnerships with various leasing companies.
The Grid segment comprises the activities of Austrian Power Grid AG (APG).
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Total revenue | €m | 211.4 | 210.9 | –0.2% |
| EBITDA | €m | 97.6 | 84.2 | –13.7% |
| Result from interests accounted for | ||||
| using the equity method | €m | 0.0 | 0.0 | – |
| Capital employed | €m | 1,394.8 | 1,478.4 | 6.0% |
EBITDA declined by €13.4m to €84.2m, due above all to lower revenue from grid usage fees.
Capital employed was up €83.6m on the prior-year level to €1,478.4m. The primary cause of the increase was a rise in the net investment in property, plant and equipment, which was offset by a higher level of non-interest-bearing debt.
As in previous quarters, action had to be taken at Austrian power plants in quarter 1/2020 in order to manage congestion both within and outside of the APG grid.
The 2020 cost calculation process did not commence until March of the current financial year, and the initial list of requirements is currently being processed. The requirements are essentially the same as in the previous year.
Approximately 500 APG employees have been working from home ever since 15 March 2020, and all construction projects have been temporarily halted. However, all necessary maintenance and repairs are still being carried out.
To protect our employees while ensuring security of supply, special hygiene and safety protocols have been put in place for all employees working at the main and backup control centres and all manned network nodes, including splitting up teams at various locations, among other measures. The situation in the APG power grid can be described as stable despite the load decline all across Europe. By the start of April, the load decline in Austria had reached approximately 14%. The situation is somewhat strained due to the lower water supply at the end of March/beginning of April 2020 and low wind feed-in, given that electricity is still being transported despite everything. Although low load demand in the distribution grid causes voltage peaks at times, APG is able to use grid control techniques to manage the situation. On the market side, there were no notable developments to report.
"All other segments" is a combined heading under which the Thermal generation segment, Services segment and Equity interests segment are brought together given that they are below the quantitative thresholds.
| Unit | Q1/2019 | Q1/2020 | Change | |
|---|---|---|---|---|
| Total revenue | €m | 63.3 | 68.4 | 8.0% |
| EBITDA | €m | 17.6 | 8.9 | –49.4% |
| Result from interests accounted for | ||||
| using the equity method | €m | 9.8 | 10.3 | 5.8% |
| Capital employed | €m | 487.6 | 493.3 | 1.2% |
EBITDA fell by €8.7m to €8.9m in quarter 1/2020. The decline was mainly attributable to the lower EBITDA recorded in the Thermal generation segment, primarily due to the non-recurrence of positive effects in the previous year arising from changes in provisions. The result from interests accounted for using the equity method slightly exceeded the prior-year level and was generated by KELAG-Kärntner Elektrizitäts-Aktiengesellschaft.
Capital employed increased marginally to €493.3m due mainly to changes in working capital.
In quarter 1/2020, the Mellach combined cycle gas turbine power plant was operated for the sole purpose of guaranteeing security of supply in connection with congestion management. The Mellach district heating power plant was utilised to fulfil district heating quotas for the greater Graz area. The plant ceased coal-fired operations as at 31 March 2020.
In future, the Mellach plant will be fuelled only by gas and be operated exclusively for congestion avoidance. Establishment of the Mellach site as a centre of innovation will also continue with the development and implementation of a variety of projects (a data centre, battery storage units, hightemperature electrolysis, etc.).
For VERBUND Services GmbH, quarter 1/2020 was notably impacted by the outbreak of the COVID-19 crisis. VERBUND Services GmbH shares primary responsibility for crisis management within the Group and for the operation of critical infrastructure. In the face of the present crisis, the company demonstrated its resilience in the supply of services based on its high level of employee dedication and the availability of the necessary core skills and technologies as well as its many years of close cooperation with the Group.
VERBUND Services GmbH accomplished the following key achievements in this context: starting on Day 1 of the crisis, remote working was implemented on a large scale across the Group by putting an IT infrastructure in place that was robust enough to allow approximately 1,500 employees to work from home. This necessitated providing a sufficient number of mobile devices and adding capacity with respect to secure VPN tunnels and tokens – all of which had to occur in compliance with VERBUND's strict safety guidelines. The infrastructure established permitted immediate remote access to all operationcritical applications such as SAP and the e-procurement system. A critical factor in the success of the measures was taking advantage of the existing customer help desk service hotline to actively assist employees in transitioning to their new work environment.
In facility management, the past weeks have focused on identifying the best possible methods for preventing exposure to COVID-19. Critical workplace areas at more than 50 of VERBUND's power plant and administrative office locations are disinfected regularly. In addition, a crisis response team is on call 24/7 for any necessary decontamination.
VERBUND Services GmbH's remaining service processes were operating at full capacity during the last weeks of quarter 1/2020. This especially related to compliance-critical processes such as the quarterly close and payroll accounting. Major projects such as Downstream SAP integration, and the Green Power project were likewise continued. However, a number of urgent, special crisis management projects had to be carried out on top of regular operations.
KELAG's contribution to the result from interests accounted for using the equity method was €10.3m in quarter 1/2020 (Q1/2019: €9.8m). Given that numerous industrial operations had to be shut down due to the coronavirus crisis, overall electricity consumption dropped around 10% below the normal level for this time of year. Gas consumption is stable, and district heating sales have thus far seen only minor pandemic-related declines. KELAG is currently working tirelessly on various scenarios, which also involves evaluating strategies and measures for counteracting the effects of the coronavirus crisis.
There were no events requiring disclosure between the reporting date of 31 March 2020 and authorisation for issue on 30 April 2020.
of VERBUND
| €m | |||
|---|---|---|---|
| In accordance with IFRSs | Notes | Q1/20191 | Q1/2020 |
| Revenue | 1,208.4 | 1,257.3 | |
| Electricity revenue | 1 | 1,006.6 | 1,060.1 |
| Grid revenue | 1 | 152.5 | 142.7 |
| Other revenue | 1 | 49.3 | 54.5 |
| Other operating income | 10.2 | 15.5 | |
| Expenses for electricity, grid, gas and certificates purchases | 2 | –718.8 | –759.1 |
| Fuel expenses and other usage-/revenue-dependent expenses | 3 | –28.6 | –39.4 |
| Personnel expenses | 4 | –80.0 | –87.1 |
| Other operating expenses | –43.2 | –56.2 | |
| EBITDA | 348.0 | 331.0 | |
| Depreciation and amortisation | 5 | –89.7 | –94.7 |
| Impairment losses | 0.0 | –0.1 | |
| Operating result | 258.3 | 236.2 | |
| Result from interests accounted for using | |||
| the equity method | 6 | 12.7 | 10.1 |
| Other result from equity interests | 1.0 | 0.8 | |
| Interest income | 7 | 8.5 | 7.9 |
| Interest expenses | 8 | –30.7 | –21.5 |
| Other financial result | 9 | 6.2 | –7.2 |
| Financial result | –2.2 | –9.8 | |
| Profit before tax | 256.0 | 226.4 | |
| Taxes on income | –56.8 | –50.2 | |
| Profit for the period | 199.2 | 176.2 | |
| Attributable to the shareholders of VERBUND AG (Group result) |
178.1 | 156.5 | |
| Attributable to non-controlling interests | 21.1 | 19.6 | |
| Earnings per share in €2 | 0.51 | 0.45 |
1 The comparative figures were adjusted retrospectively in accordance with IAS 8. // 2 Diluted earnings per share correspond to basic earnings per share.
| €m | |||
|---|---|---|---|
| In accordance with IFRSs | Notes | Q1/2019 | Q1/2020 |
| Profit for the period | 199.2 | 176.2 | |
| Remeasurements of net defined benefit liability | 2.2 | –0.6 | |
| Other comprehensive income from interests accounted for using the equity method |
–5.0 | –5.6 | |
| Total of items that will not be reclassified subsequently to the income statement |
–2.9 | –6.2 | |
| Differences from currency translation | –3.2 | –1.7 | |
| Measurements of cash flow hedges | 212.8 | 145.4 | |
| Other comprehensive income from interests accounted for using the equity method |
0.0 | –0.8 | |
| Total of items that will be reclassified subsequently to the income statement |
209.6 | 142.8 | |
| Other comprehensive income before tax | 206.7 | 136.6 | |
| Taxes on income relating to items that will not be reclassified subsequently to the income statement |
–0.5 | 0.1 | |
| Taxes on income relating to items that will be reclassified subsequently to the income statement |
–53.2 | –36.3 | |
| Other comprehensive income after tax | 153.0 | 100.4 | |
| Total comprehensive income for the period | 352.2 | 276.6 | |
| Attributable to the shareholders of VERBUND AG | 331.0 | 257.0 | |
| Attributable to non-controlling interests | 21.3 | 19.6 |
| €m | |||
|---|---|---|---|
| In accordance with IFRSs | Notes | 31/12/2019 | 31/3/2020 |
| Non-current assets | 11,061.9 | 11,067.1 | |
| Intangible assets | 652.0 | 660.3 | |
| Property, plant and equipment | 9,110.8 | 9,113.5 | |
| Right-of-use assets | 133.4 | 127.1 | |
| Interests accounted for using the equity method | 332.2 | 335.4 | |
| Other equity interests | 11 | 138.1 | 139.1 |
| Investments and other receivables | 11 | 695.4 | 691.8 |
| Current assets | 776.7 | 1,057.7 | |
| Inventories | 10 | 34.3 | 14.7 |
| Trade receivables, other receivables and securities | 11 | 697.8 | 934.1 |
| Cash and cash equivalents | 11 | 44.6 | 109.0 |
| Total assets | 11,838.6 | 12,124.8 | |
| €m | |||
| In accordance with IFRSs | Notes | 31/12/2019 | 31/3/2020 |
| Equity | 6,568.0 | 6,844.5 | |
| Attributable to the shareholders of VERBUND AG | 5,887.8 | 6,144.7 | |
| Attributable to non-controlling interests | 680.2 | 699.8 | |
| Non-current liabilities | 4,107.4 | 4,140.0 | |
| Financial liabilities | 11 | 1,256.6 | 1,254.8 |
| Provisions | 912.2 | 905.4 | |
| Deferred tax liabilities | 757.3 | 808.9 | |
| Contributions to building costs and grants | 754.1 | 747.5 | |
| Other liabilities | 11 | 427.2 | 423.3 |
| Current liabilities | 1,163.2 | 1,140.3 | |
| Financial liabilities | 11 | 310.8 | 243.2 |
| Provisions | 38.6 | 38.7 | |
| Current tax liabilities | 106.1 | 123.7 | |
| Trade payables and other liabilities | 11 | 707.7 | 734.8 |
Total equity and liabilities 11,838.6 12,124.8
| €m | ||
|---|---|---|
| Notes | Q1/2019 | Q1/2020 |
| 199.2 | 176.2 | |
| 89.7 | 94.8 | |
| –6.0 | 8.0 | |
| –12.7 | –10.1 | |
| –0.1 | 0.2 | |
| 3.8 | 8.0 | |
| –4.8 | –6.6 | |
| 5.9 | –5.4 | |
| 275.1 | 265.1 | |
| 6.7 | 19.7 | |
| 180.5 | –66.8 | |
| –102.8 | 62.7 | |
| 20.3 | 17.7 | |
| 379.8 | 298.2 | |
Cash flow from operating activities includes income taxes paid of €18.3m (Q1/2019: €11.7m), interest paid of €3.0m (Q1/2019: €3.2m), interest received of €0.0m (Q1/2019: €0.0m) and dividends received of €1.0m (Q1/2019: €1.2m).
| €m | |||
|---|---|---|---|
| In accordance with IFRSs | Notes | Q1/2019 | Q1/2020 |
| Cash outflow from capital expenditure for intangible assets | |||
| and property, plant and equipment | –74.5 | –148.2 | |
| Cash inflow from the disposal of intangible assets and | |||
| property, plant and equipment | 0.2 | 0.1 | |
| Cash outflow from capital expenditure for investments | –19.0 | –1.1 | |
| Cash inflow from the disposal of investments | 18.3 | 1.2 | |
| Cash inflow from the disposal of subsidiaries and interests | |||
| accounted for using the equity method and other equity | |||
| interests | 0.1 | 0.0 | |
| Cash outflow from capital expenditure for current investments | –205.0 | 0.0 | |
| Cash inflow from the disposal of current investments | 0.0 | 0.0 | |
| Cash flow from investing activities | –279.9 | –147.9 | |
| Cash outflow from money market transactions | –11.1 | –65.0 | |
| Cash outflow from the repayment of financial liabilities | |||
| (excluding money market transactions) | –10.8 | –8.8 | |
| Cash outflow from the repayment of lease liabilities | –9.1 | –12.2 | |
| Cash flow from financing activities | –31.0 | –85.9 | |
| Change in cash and cash equivalents | 68.8 | 64.4 | |
| Cash and cash equivalents as at 1/1/ | 39.3 | 44.6 | |
| Change in cash and cash equivalents | 68.8 | 64.4 | |
| Cash and cash equivalents as at 31/3/ | 108.2 | 109.0 | |
| In accordance with IFRSs | Called and paid in share capital |
Capital reserves | Retained earnings |
Remeasure ments of net defined benefit liability |
|
|---|---|---|---|---|---|
| Notes | |||||
| As at 1/1/2019 | 347.4 | 954.3 | 4,525.4 | –284.8 | |
| Profit for the period | – | – | 178.1 | – | |
| Other comprehensive income | – | – | 0.0 | –3.6 | |
| Total comprehensive income for the period |
– | – | 178.1 | –3.6 | |
| Other changes in equity | – | – | 0.2 | 0.0 | |
| As at 31/3/2019 | 347.4 | 954.3 | 4,703.7 | –288.3 | |
| As at 1/1/2020 | 347.4 | 954.3 | 4,933.7 | –388.7 | |
| Profit for the period | – | – | 156.5 | – | |
| Other comprehensive income | – | – | 0.0 | –6.0 | |
| Total comprehensive income for the period |
– | – | 156.5 | –6.0 | |
| Other changes in equity | – | – | –0.1 | 0.0 | |
| As at 31/3/2020 | 347.4 | 954.3 | 5,090.1 | –394.6 | |
| €m | ||||||
|---|---|---|---|---|---|---|
| Total equity | Equity attributable to non-controlling interests |
Equity attributable to the share holders of VERBUND AG |
Measure ments of cash flow hedges |
Measure ments of financial instruments |
Difference from currency translation |
|
| 5,941.0 | 635.7 | 5,305.3 | –228.4 | –1.3 | –7.4 | |
| 199.2 | 21.1 | 178.1 | – | – | – | |
| 153.0 | 0.1 | 152.9 | 159.6 | 0.0 | –3.2 | |
| 352.2 | 21.3 | 331.0 | 159.6 | 0.0 | –3.2 | |
| 0.2 | 0.0 | 0.2 | 0.0 | 0.0 | 0.0 | |
| 6,293.5 | 657.0 | 5,636.5 | –68.8 | –1.3 | –10.6 | |
| 6,568.0 | 680.2 | 5,887.8 | 49.5 | 3.2 | –11.7 | |
| 176.2 | 19.6 | 156.5 | – | – | – | |
| 100.4 | –0.1 | 100.5 | 108.2 | 0.0 | –1.7 | |
| 276.6 | 19.6 | 257.0 | 108.2 | 0.0 | –1.7 | |
| –0.1 | 0.0 | –0.1 | 0.0 | 0.0 | 0.0 | |
| 6,844.5 | 699.8 | 6,144.7 | 157.7 | 3.2 | –13.4 |
Basic principles
These consolidated interim financial statements of VERBUND for the period ended 31 March 2020 have been prepared in accordance with the International Financial Reporting Standards (IFRSs) applicable to interim financial statements as adopted by the European Union.
The condensed format of VERBUND's consolidated interim financial statements is consistent with IAS 34 "Interim Financial Reporting"; for further information and disclosures please refer to VERBUND's consolidated financial statements for the year ended 31 December 2019, which form the basis for these consolidated interim financial statements of VERBUND.
Basis of consolidation
Newly applicable or applied accounting
standards
VERBUND Solutions GmbH (VSO) and VERBUND Sales GmbH (VSA) were merged with VERBUND Trading GmbH (VTR) under merger agreements dated 2 March 2020. At the same time, the company name of VTR was changed to VERBUND Energy4Business GmbH (VEB). The merger of VSO with VEB was entered in the commercial register on 4 March 2020, and the merger of VSA with VEB was entered in the commercial register on 7 March 2020.
With the exception of the IASB's new accounting standards described below, the same accounting policies were applied in these consolidated interim financial statements of VERBUND as in VERBUND's consolidated financial statements as at 31 December 2019.
The use of computing software may lead to rounding differences in the addition of rounded amounts and the calculation of percentages.
| Standard or interpretation | Published by the IASB (endorsed by the EU) |
Mandatory application for VERBUND |
Material effects on the consolidated interim financial statements of VERBUND |
|
|---|---|---|---|---|
| IAS 1 and IAS 8 |
Amendments: Definition of Material |
31/10/2018 (29/11/2019) |
1/1/2020 | None |
| IFRS 3 | Amendments: Definition of a Business |
22/10/2018 (expected Q2/2020) |
1/1/2020 | Depending on the structure of any future transactions, the acquisition of power plants in the form of a share deal is more likely to be classified as the acquisition of a group of assets |
| IFRS 9, IAS 39 and IFRS 7 |
Interest Rate Benchmark Reform |
26/9/2019 (15/1/2020) |
1/1/2020 | see below |
| Various | Amendments to References to the Conceptual Framework in IFRS Standards |
29/3/2018 (29/11/2019) |
1/1/2020 | None |
The IASB published the amendments to IFRS 9, IAS 39 and IFRS 7 in September 2019, thus completing Phase 1 of the Interest Rate Benchmark Reform project. These Phase 1 amendments provide for a temporary exemption from the application of specific hedge accounting requirements to hedging relationships directly affected by the IBOR reform. Owing to the exemptions, the uncertainties associated with the IBOR reform generally do not lead to the termination of hedge accounting. In this context, it can be assumed that the reference interest rates on which the underlying transaction and hedging instruments are based will not be changed by the IBOR reform. However, any ineffectiveness must still be recognised through profit or loss.
At VERBUND, future payments from variable-interest financial liabilities are hedged by means of interest rate swaps in order to reduce the cash flow risk resulting from an increase in market interest rates. The underlying variable market interest rate is the 6-month EURIBOR. The notional amount of interest rate swaps directly affected by the IBOR reform was €86.1m as at 31 March 2020. Following the completed changeover of the EURIBOR to a transaction-based calculation method as of Q4/2019, the EURIBOR as a reference interest rate is BMR-compliant and therefore does not lead to any changes to existing contracts.
In addition, there are interest rate swaps for the corresponding financial liabilities in connection with the prematurely terminated cross-border leasing transactions in order to avoid risk. The reference interest rate for the financial liability as well as the interest rate swaps is USD LIBOR. However, hedge accounting is not applied to these financial instruments.
Therefore, as things stand at present, no significant effects arising from the IBOR reform are expected.
The balance sheet presentation of contracts to buy or sell non-financial assets in connection with IFRS 9 was discussed at the meeting of the IFRS Interpretations Committee held in March 2019. Due to the IFRIC non-agenda decision that ensued, the presentation in the income statement of the measurement result of energy derivatives was changed. The measurement result of derivatives offset in revenue was allocated retroactively to purchase and sales contracts and presented accordingly in the income statement under revenue or in the procurement costs. The change in accounting policy was carried out retrospectively in accordance with IAS 8 by adjusting all comparative figures. The following adjustments apply for prior-year periods:
| Adjustments to income statement items | €m |
|---|---|
| Q1/2019 | |
|---|---|
| Revenue | 245.2 |
| Expenses for electricity, grid, gas and certificates purchases | – 245.2 |
| EBITDA | 0 |
Change in an accounting policy
VERBUND has reorganised its internal group management as a result of the business expansion in the fields of wind and solar power, the restructuring of sales activities as part of the Downstream project and changes in company law.
As of quarter 1/2020, the Renewable generation segment reported in the past is divided into the Hydro and New renewables segments. Generation from hydropower is reported in the Hydro segment. Business activities relating to wind and solar power are combined in the New renewables segment. As a consequence of the Downstream project, the Energy services segment, which was previously reported under All other segments, is now integrated into the Sales segment. All other segments are reported unchanged.
VERBUND classifies New renewables as a reportable segment even though it falls below the quantitative thresholds, because management believes that information on the business activities relating to new renewable energy sources is useful for the readers of the financial statements and expects to see strong growth in this segment in future.
EBITDA in the total column corresponds to EBITDA in the income statement. Therefore, the reconciliation to profit before tax can be taken from the income statement. Transactions between segments are carried out at arm's length. All segment data are measured in accordance with IFRSs.
In the past, goodwill was allocated in the amount of €287.0m to the (former) Renewable generation segment, which was assigned in its entirety to the new Hydro segment during the reorganisation of internal group management. The reallocation of goodwill was carried out on the basis of the relative carrying amounts before the restructuring of internal group management.
Segment information from the previous year has been adjusted to reflect this revised segment structure.
| €m | |||||||
|---|---|---|---|---|---|---|---|
| Hydro | New renewables |
Sales | Grid | All other segments |
Recon ciliation/ consoli dation |
Total Group |
|
| Q1/2020 | |||||||
| External revenue | 24.2 | 28.6 | 982.7 | 204.6 | 15.0 | 2.2 | 1,257.3 |
| Internal revenue | 255.6 | 10.0 | 59.8 | 6.3 | 53.4 | –385.1 | 0.0 |
| Total revenue | 279.8 | 38.6 | 1,042.5 | 210.9 | 68.4 | –382.9 | 1,257.3 |
| EBITDA | 200.4 | 22.4 | 20.9 | 84.2 | 8.9 | –5.8 | 331.0 |
| Depreciation and amortisation |
–53.4 | –6.2 | –0.3 | –29.3 | –4.9 | –0.6 | –94.7 |
| Effects from impairment tests (operating result) |
0.0 | 0.0 | 0.0 | 0.0 | –0.1 | 0.0 | –0.1 |
| Other material non-cash items |
10.9 | 0.0 | 6.2 | 2.7 | –0.6 | 5.7 | 25.0 |
| Result from interests accounted for using the equity method |
0.2 | 0.0 | –0.5 | 0.0 | 10.3 | 0.0 | 10.1 |
| Capital employed | 6,052.8 | 421.9 | 94.1 | 1,478.4 | 493.3 | 110.9 | 8,651.3 |
| of which carrying amount of interests accounted for using the equity method |
3.0 | 1.5 | 9.3 | 1.5 | 320.2 | 0.0 | 335.4 |
| Additions to intangible assets and property, plant and equipment |
54.4 | 0.2 | 1.8 | 40.9 | 2.8 | 0.1 | 100.3 |
| Additions to interests accounted for using the equity method |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| €m | |||||||
|---|---|---|---|---|---|---|---|
| Hydro | New renewables |
Sales | Grid | All other segments |
Recon ciliation/ consoli dation |
Total Group |
|
| Q1/2019 | |||||||
| External revenue | 23.5 | 18.7 | 945.8 | 204.5 | 14.3 | 1.6 | 1,208.4 |
| Internal revenue | 243.6 | 8.7 | 51.6 | 6.9 | 49.0 | –359.8 | 0.0 |
| Total revenue | 267.1 | 27.4 | 997.4 | 211.4 | 63.3 | –358.3 | 1,208.4 |
| EBITDA | 198.5 | 20.2 | 19.1 | 97.6 | 17.6 | –5.1 | 348.0 |
| Depreciation and amortisation |
–51.1 | –6.1 | –0.3 | –28.7 | –3.1 | –0.4 | –89.7 |
| Effects from impairment tests (operating result) |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other material non-cash items |
14.3 | 0.0 | –1.2 | 7.7 | 9.0 | 0.0 | 29.8 |
| Result from interests accounted for using the equity method |
3.2 | 0.1 | –0.3 | 0.0 | 9.8 | 0.0 | 12.7 |
| Capital employed | 6,174.6 | 410.4 | 202.3 | 1,394.8 | 487.6 | 421.4 | 9,091.1 |
| of which carrying amount of interests accounted for using the equity method |
2.8 | 1.4 | 10.6 | 1.4 | 311.7 | 0.0 | 327.9 |
| Additions to intangible assets and property, plant and equipment |
28.3 | 0.0 | 0.2 | 19.8 | 1.2 | 0.3 | 49.9 |
| Additions to interests accounted for using the equity method |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Revenue | €m | ||||||
|---|---|---|---|---|---|---|---|
| Q1/2019 | Q1/2020 Domestic Domestic |
Q1/2019 Foreign |
Q1/2020 Foreign |
Q1/2019 Total |
Q1/2020 Total |
Change | |
| Electricity revenue resellers | 14.5 | 14.8 | 4.7 | 6.8 | 19.1 | 21.6 | 12.9% |
| Electricity revenue traders | 0.0 | 0.0 | 2.7 | 0.9 | 2.7 | 0.9 | –66.3% |
| Electricity revenue – Hydro segment |
14.5 | 14.9 | 7.3 | 7.7 | 21.9 | 22.5 | 3.0% |
| Electricity revenue resellers | 0.0 | 0.0 | 10.1 | 0.0 | 10.1 | 0.0 | –100.0% |
| Electricity revenue traders | 5.1 | 4.6 | 0.0 | –0.1 | 5.1 | 4.4 | –12.4% |
| Electricity revenue consumers | 0.0 | 0.0 | 0.0 | 15.4 | 0.0 | 15.4 | n.a. |
| Electricity revenue – New renewables segment |
5.1 | 4.6 | 10.1 | 15.3 | 15.2 | 19.8 | 30.6% |
| Electricity revenue resellers | 293.7 | 183.3 | 87.9 | 186.0 | 381.6 | 369.3 | –3.2% |
| Electricity revenue traders | 92.4 | 93.7 | 249.9 | 308.4 | 342.4 | 402.0 | 17.4% |
| Electricity revenue consumers | 136.1 | 93.7 | 59.5 | 92.6 | 195.6 | 186.3 | –4.8% |
| Electricity revenue – Sales segment |
522.2 | 370.7 | 397.4 | 586.9 | 919.6 | 957.6 | 4.1% |
| Electricity revenue resellers | 30.0 | 35.6 | 18.3 | 23.0 | 48.3 | 58.6 | 21.5% |
| Electricity revenue traders | 1.7 | 1.4 | 0.0 | 0.1 | 1.7 | 1.5 | –10.3% |
| Electricity revenue – Grid segment |
31.7 | 37.1 | 18.2 | 23.1 | 49.9 | 60.1 | 20.5% |
| Total electricity revenue | 573.5 | 427.2 | 433.1 | 632.9 | 1,006.6 | 1,060.1 | 5.3% |
| Grid revenue electric utilities | 99.6 | 89.1 | 6.2 | 5.5 | 105.8 | 94.5 | –10.6% |
| Grid revenue industrial customers |
1.9 | 1.0 | 0.0 | 0.0 | 1.9 | 1.0 | –46.6% |
| Grid revenue other | 10.0 | 12.5 | 34.9 | 34.6 | 44.9 | 47.2 | 5.1% |
| Total grid revenue – Grid segment |
111.4 | 102.6 | 41.1 | 40.1 | 152.5 | 142.7 | –6.4% |
| Other revenue – Hydro segment |
1.6 | 1.7 | 1.3% | ||||
| Other revenue – New renewables segment |
3.5 | 8.8 | |||||
| Other revenue – Sales segment | 26.2 | 25.1 | –4.2% | ||||
| Other revenue – Grid segment | 2.1 | 1.8 | –13.9% | ||||
| Other revenue – All other segments |
14.3 | 15.0 | 4.7% | ||||
| Other revenue – reconciliation | 1.6 | 2.2 | 39.8% | ||||
| Total other revenue | 49.3 | 54.5 | 10.5% | ||||
| Total revenue | 1,208.4 | 1,257.3 | 4.0% |
(1) Revenue
| Expenses for electricity, grid, gas and certificates purchases | €m | |||
|---|---|---|---|---|
| Expenses for | Q1/2019 | Q1/2020 | Change | |
| Expenses for electricity purchases | ||||
| (including control power) | 689.9 | 736.0 | 6.7% | |
| Expenses for gas purchases | 17.1 | 13.0 | –24.0% | |
| Expenses for grid purchases (system use) | 9.3 | 8.6 | –6.9% | |
| Purchases of emission rights (trade) | 0.9 | 1.0 | 6.5% | |
| Purchases of proof of origin and green electricity certificates | 1.5 | 0.4 | –70.7% | |
| Expenses for electricity, grid, gas and certificates purchases |
718.8 | 759.1 | 5.6% | |
| Fuel expenses and other usage-/revenue-dependent expenses | €m | |||
| Q1/2019 | Q1/2020 | Change | ||
| Fuel expenses | 17.0 | 26.8 | 57.8% | |
| Emission rights acquired in exchange for consideration | 6.6 | 10.1 | 54.3% | |
| Other revenue-dependent expenses | 5.1 | 2.5 | –50.6% | |
| Fuel expenses and other usage-/revenue-dependent | ||||
| expenses | 28.6 | 39.4 | 37.8% | |
| Personnel expenses | €m | |||
| Q1/2019 | Q1/2020 | Change | ||
| Wages and salaries | 62.0 | 67.5 | 8.9% | |
| Expenses for social security contributions as required by | ||||
| law as well as income-based charges and compulsory | ||||
| contributions | 13.8 | 14.9 | ||
| 7.9% | ||||
| Other social expenses | 0.9 | 0.9 | 0.0% | |
| Subtotal | 76.8 | 83.4 | 8.6% | |
| Expenses for termination benefits | 0.5 | 0.3 | –44.1% | |
| Expenses for pensions and similar obligations | 2.8 | 3.4 | 24.5% | |
| Personnel expenses | 80.0 | 87.1 | 8.8% | |
| Depreciation and amortisation | €m | |||
| Q1/2019 | Q1/2020 | Change | ||
| Depreciation of property, plant and equipment | 79.3 | 83.8 | 5.7% | |
| Depreciation of right-of-use assets Amortisation of intangible assets |
8.6 1.8 |
8.8 2.2 |
1.8% 19.4% |
Domestic Domestic Foreign Foreign
Income or expenses 9.6 9.9 3.8% 3.1 0.2 –94.5%
Expenses for electricity, grid, gas and certificates
Fuel expenses and other usage/ revenue-dependent
Personnel expenses
Depreciation and amortisation
| Result from interests | |
|---|---|
| accounted for using | |
| the equity method |
| Interest income | €m | (7) | ||
|---|---|---|---|---|
| Q1/2019 | Q1/2020 | Change | Interest income | |
| Interest from investments under closed items on the | ||||
| balance sheet | 7.5 | 7.5 | –0.1% | |
| Other interest and similar income | 1.0 | 0.4 | –58.1% | |
| Interest income | 8.5 | 7.9 | –13.8% | |
| Interest expenses | €m | (8) | ||
| Q1/2019 | Q1/2020 | Change | Interest expenses | |
| Interest on financial liabilities under closed items on the | ||||
| balance sheet | 7.5 | 7.5 | –0.1% | |
| Interest on bonds | 12.3 | 4.3 | –65.0% | |
| Interest on other liabilities from electricity supply | ||||
| commitments | 3.9 | 3.7 | –4.5% | |
| Interest on bank loans | 2.3 | 2.2 | –6.9% | |
| Interest on a share redemption obligation | 1.2 | 2.1 | 80.0% | |
| Net interest expense on personnel-related liabilities | 3.1 | 1.6 | –49.2% | |
| Interest on other non-current provisions | 0.5 | 0.3 | –47.7% | |
| Interest on leases | 0.3 | 0.2 | –3.9% | |
| Profit or loss attributable to limited partners | 0.1 | 0.0 | –120.9% | |
| Repayment of non-current financial liabilities from capital | ||||
| shares attributable to limited partners1 | –1.0 | 0.0 | 100.0% | |
| Borrowing costs capitalised in accordance with IAS 23 | –0.7 | –1.4 | –93.6% | |
| Other interest and similar expenses | 8.8 | 8.6 | –2.8% | |
| Interest expenses | 30.7 | 21.5 | –30.0% |
1 In quarter 1/2019 VERBUND acquired interests in the ten wind farms and two infrastructure companies in the Hunsrück area of Rhineland-Palatinate previously held by the other limited partners. This reduced the capital shares attributable to limited partners presented under non-current financial liabilities
| Other financial result | €m | ||
|---|---|---|---|
| Q1/2019 | Q1/2020 | Change | |
| Income from securities and loans | 0.5 | 0.5 | 0.6% |
| Measurement of derivatives in the finance area | –0.2 | 0.4 | n.a. |
| Foreign exchange losses | –0.1 | 0.1 | n.a. |
| Change in expected credit losses | –0.1 | 0.0 | 167.1% |
| Income from disposal of financial instruments | 0.6 | 0.0 | –100.0% |
| Foreign exchange gains | 0.1 | –0.1 | n.a. |
| Measurement of non-derivative financial instruments | 5.3 | –8.0 | n.a. |
| Other | 0.1 | –0.1 | –176.8% |
| Other financial result | 6.2 | –7.2 | 139.6% |
(9) Other financial result
| (10) | Inventories | €m | ||
|---|---|---|---|---|
| Inventories | 31/12/2019 | 31/3/2020 | Change | |
| Inventories of primary energy sources held for generation |
22.5 | 3.3 | –85.5% | |
| Emission rights held for trading | 4.4 | 6.4 | 45.8% | |
| Measurements of emission rights held for trading | 2.8 | 0.3 | –90.7% | |
| Fair value of emission rights held for trading | 7.2 | 6.6 | –8.1% | |
| Proof of origin and green electricity certificates | 0.4 | 0.2 | –42.6% | |
| Other | 4.2 | 4.6 | 8.9% | |
| Inventories | 34.3 | 14.7 | –57.3% | |
The measurement benchmark for inventories of natural gas and emission rights held for trading by VERBUND is the fair value less costs to sell in accordance with the exemption provided for raw materials and commodity broker-traders (brokerage exemption). The stock exchange price for front-month gas forwards on the Central European Gas Hub (CEGH) or NetConnect Germany (NCG) is the relevant price for inventories of natural gas held for trading. The fair value of emission rights held for trading corresponds to the price quoted on the European Energy Exchange (EEX). The fair values are thus based on Level 1 measurements.
| Carrying amounts and fair values by measurement category 31/3/2020 €m |
|||||
|---|---|---|---|---|---|
| Assets – balance sheet items | Measurement category in accordance with IFRS 9 |
Level | Carrying amount |
Fair value | |
| Interests in unconsolidated subsidiaries | FVOCI | 2 | 12.5 | 12.5 | |
| Interests in unconsolidated subsidiaries | FVPL | 3 | 0.5 | 0.5 | |
| Interests in unconsolidated subsidiaries | FVOCI | AC | 0.5 | 0.5 | |
| Other equity interests | FVOCI | 1 | 23.9 | 23.9 | |
| Other equity interests | FVOCI | 2 | 93.9 | 93.9 | |
| Other equity interests | FVOCI | AC | 7.7 | 7.7 | |
| Other equity interests | 139.1 | ||||
| Securities | FVPL | 1 | 117.5 | 117.5 | |
| Securities | FVOCI | 3 | 6.5 | 6.5 | |
| Securities | FVOCI | AC | 1.0 | 1.0 | |
| Securities – closed items on the balance sheet | AC | 2 | 64.3 | 60.6 | |
| Other loans – closed items on the balance sheet | AC | 2 | 296.0 | 339.4 | |
| Derivatives in the finance area – closed items on the balance sheet |
FVPL | 2 | 95.6 | 95.6 | |
| Loans to investees | AC | 2 | 74.5 | 75.5 | |
| Other loans | AC | 2 | 5.3 | 5.9 | |
| Other | – | – | 30.9 | – | |
| Investments and other receivables | 691.8 | ||||
| Trade receivables | AC | – | 349.3 | – | |
| Receivables from investees | AC | – | 34.3 | – | |
| Loans to investees | AC | 2 | 4.0 | 4.1 | |
| Other loans | AC | 2 | 0.1 | 0.1 | |
| Other loans – closed items on the balance sheet | AC | 2 | 0.0 | 0.0 | |
| Derivatives in the energy area | FVPL | 1 | 1.9 | 1.9 | |
| Derivatives in the energy area | FVPL | 2 | 442.6 | 442.6 | |
| Securities | FVPL | 1 | 0.0 | 0.0 | |
| Money market transactions | AC | 2 | 0.0 | 0.0 | |
| Emission rights | – | – | 26.7 | – | |
| Other | AC | – | 38.6 | – | |
| Other | – | – | 36.6 | – | |
| Trade receivables, other receivables and securities | 934.1 | ||||
| Cash and cash equivalents | AC | – | 109.0 | – | |
| Aggregated by measurement category | |||||
| Financial assets at amortised cost | AC | 975.4 | |||
| Financial assets at fair value through profit or loss | FVPL | 658.3 | |||
| Financial assets at fair value through other comprehensive income |
FVOCI | 146.0 |
(11) Additional disclosures regarding financial instruments
| Carrying amounts and fair values by measurement category 31/3/2020 €m |
||||||
|---|---|---|---|---|---|---|
| Liabilities – balance sheet items | Measurement category in accordance with IFRS 9 |
Level | Carrying amount |
Fair value | ||
| Bonds | AC | 2 | 705.3 | 727.9 | ||
| Financial liabilities to banks and to others | AC | 2 | 336.8 | 361.3 | ||
| Financial liabilities to banks – closed items on the balance sheet |
AC | 2 | 112.7 | 155.9 | ||
| Financial liabilities to banks – closed items on the balance sheet |
FVPL – D | 2 | 343.4 | 343.4 | ||
| Capital shares attributable to limited partners | – | – | –0.1 | – | ||
| Non-current and current financial liabilities | 1,498.0 | |||||
| Electricity supply commitment | – | – | 145.4 | – | ||
| Obligation to return an interest | AC | 3 | 137.8 | 265.8 | ||
| Trade payables | AC | – | 1.2 | – | ||
| Deferred income for grants (emission rights) | – | – | 0.0 | – | ||
| Lease liabilities | – | – | 83.4 | – | ||
| Deferred income – cross-border leasing | – | – | 12.0 | – | ||
| Other | AC | – | 43.5 | – | ||
| Non-current other liabilities | 423.3 | |||||
| Trade payables | AC | – | 210.9 | – | ||
| Derivatives in the energy area | FVPL | 2 | 224.0 | 224.0 | ||
| Derivatives in the finance area | FVPL | 2 | 13.1 | 13.1 | ||
| Lease liabilities | – | – | 39.8 | – | ||
| Other | AC | – | 153.5 | – | ||
| Other | – | – | 93.4 | – | ||
| Trade payables and current other liabilities | 734.8 | |||||
| Aggregated by measurement category | ||||||
| Financial liabilities at amortised cost | AC | 1,701.7 | ||||
| Financial liabilities at fair value through profit or loss | FVPL | 237.2 | ||||
| Financial liabilities at fair value through profit or loss – designated |
FVPL – D | 343.4 |
| Carrying amounts and fair values by measurement category 31/12/2019 €m |
||||||
|---|---|---|---|---|---|---|
| Assets – balance sheet items | Measurement category in accordance with IFRS 9 |
Level | Carrying amount |
Fair value | ||
| Interests in unconsolidated subsidiaries | FVOCI | 2 | 12.5 | 12.5 | ||
| Interests in unconsolidated subsidiaries | FVPL | 3 | 0.5 | 0.5 | ||
| Interests in unconsolidated subsidiaries | FVOCI | AC | 0.6 | 0.6 | ||
| Other equity interests | FVOCI | 1 | 23.9 | 23.9 | ||
| Other equity interests | FVOCI | 2 | 93.9 | 93.9 | ||
| Other equity interests | FVOCI | AC | 6.6 | 6.6 | ||
| Other equity interests | 138.1 | |||||
| Securities | FVPL | 1 | 125.6 | 125.6 | ||
| Securities | FVOCI | 3 | 6.5 | 6.5 | ||
| Securities | FVOCI | AC | 1.0 | 1.0 | ||
| Securities – closed items on the balance sheet | AC | 2 | 65.4 | 63.5 | ||
| Other loans – closed items on the balance sheet | AC | 2 | 300.4 | 329.7 | ||
| Derivatives in the finance area – closed items on the balance sheet |
FVPL | 2 | 87.1 | 87.1 | ||
| Loans to investees | AC | 2 | 75.2 | 76.3 | ||
| Other loans | AC | 2 | 5.3 | 5.7 | ||
| Other | – | – | 28.9 | – | ||
| Investments and other receivables | 695.4 | |||||
| Trade receivables | AC | – | 357.8 | – | ||
| Receivables from investees | AC | – | 34.1 | – | ||
| Loans to investees | AC | 2 | 4.3 | 4.5 | ||
| Other loans | AC | 2 | 0.1 | 0.1 | ||
| Other loans – closed items on the balance sheet | AC | 2 | 2.8 | 3.7 | ||
| Derivatives in the energy area | FVPL | 1 | 0.0 | 0.0 | ||
| Derivatives in the energy area | FVPL | 2 | 189.1 | 189.1 | ||
| Securities | FVPL | 1 | 0.0 | 0.0 | ||
| Money market transactions | AC | 2 | 0.0 | 0.0 | ||
| Emission rights | – | – | 30.9 | – | ||
| Other | AC | – | 46.3 | – | ||
| Other | – | – | 32.2 | – | ||
| Trade receivables, other receivables and securities | 697.8 | |||||
| Cash and cash equivalents | AC | – | 44.6 | – | ||
| Aggregated by measurement category | ||||||
| Financial assets at amortised cost | AC | 936.4 | ||||
| Financial assets at fair value through profit or loss | FVPL | 402.4 | ||||
| Financial assets at fair value through other comprehensive income |
FVOCI | 145.1 |
| Carrying amounts and fair values by measurement category 31/12/2019 €m |
||||||
|---|---|---|---|---|---|---|
| Liabilities – balance sheet items | Measurement category in accordance with IFRS 9 |
Level | Carrying amount |
Fair value | ||
| Bonds | AC | 2 | 700.7 | 742.0 | ||
| Financial liabilities to banks and to others | AC | 2 | 410.9 | 452.4 | ||
| Financial liabilities to banks – closed items on the balance sheet |
AC | 2 | 118.4 | 159.6 | ||
| Financial liabilities to banks – closed items on the balance sheet |
FVPL – D | 2 | 337.5 | 337.5 | ||
| Non-current and current financial liabilities | 1,567.4 | |||||
| Electricity supply commitment | – | – | 147.7 | – | ||
| Obligation to return an interest | AC | 3 | 135.7 | 263.2 | ||
| Trade payables | AC | – | 1.2 | – | ||
| Deferred income – cross-border leasing | – | – | 16.0 | – | ||
| Lease liabilities | – | – | 87.1 | |||
| Other | AC | – | 39.4 | – | ||
| Non-current other liabilities | 427.2 | |||||
| Trade payables | AC | – | 225.8 | – | ||
| Derivatives in the energy area | FVPL | 2 | 133.1 | 133.1 | ||
| Derivatives in the finance area | FVPL | 2 | 13.8 | 13.8 | ||
| Lease liabilities | – | – | 46.8 | |||
| Other | AC | – | 215.3 | – | ||
| Other | – | – | 72.9 | – | ||
| Trade payables and current other liabilities | 707.7 | |||||
| Aggregated by measurement category | ||||||
| Financial liabilities at amortised cost | AC | 1,847.4 | ||||
| Financial liabilities at fair value through profit or loss | FVPL | 146.9 | ||||
| Financial liabilities at fair value through profit or loss – designated |
FVPL – D | 337.5 |
Of the derivative financial instruments in the energy area classified as FVPL in the above tables, positive fair values of €283.0m (31 December 2019: €108.3m) and negative fair values of €64.8m (31 December 2019: €35.3m) relate to hedging relationships designated as cash flow hedges. These fair values represent gross amounts; following the inter-portfolio netting carried out in accordance with VERBUND's accounting policies, cash flow hedges can no longer be isolated.
| Level | Financial instruments | Valuation technique | Input factor |
|---|---|---|---|
| 1 | Energy forwards | Market approach | Settlement price published by the stock exchange |
| 1 | Securities, other equity interest in Burgenland Holding AG |
Market approach | Stock exchange price |
| 2 | Securities and other loans under closed items on the balance sheet, long-term loans, liabilities to banks, bonds and other financial liabilities |
Net present value approach |
Payments associated with the financial instruments, yield curve, credit risk of the contracting parties (credit default swaps or credit spread curves) |
| 2 | Interests in unconsolidated subsidiaries, other equity interests in Energie AG Oberösterreich and HGRT |
Market approach | Trading multiple, transaction price |
| 2 | Non-listed energy forwards | Net present value approach |
Forward price curve derived from stock exchange prices, yield curve, credit risk of the contracting parties |
| 2 | Other financial assets and liabilities measured at fair value through profit or loss in the finance area |
Net present value approach |
Cash flows already fixed or determined via forward rates, yield curve, credit risk of the contracting parties |
| 3 | Return obligation (obligation to transfer back the 50% interest acquired in Donaukraftwerk Jochenstein AG) |
Net present value approach |
Price forecasts for electricity, weighted average cost of capital after taxes |
| 3 | Securities (shares of CEESEG AG) | Net present value approach |
Expected distribution of profits, cost of equity |
| AC | Other interests in unconsolidated subsidiaries, other equity interests and other securities |
– | Cost as a best estimate of fair value |
| – | Cash and cash equivalents, trade receivables and payables, current other receivables, other borrowing within current credit lines as well as current other liabilities |
– | Carrying amounts as a best estimate of fair value |
| Purchase commitments |
Purchase commitments for property, plant and equipment, intangible assets and other services |
€m | ||
|---|---|---|---|---|
| 31/3/2020 | of which due in 2020 |
of which due 2021–2025 |
||
| Total commitment | 1,143.6 | 513.5 | 630.1 |
At 31 March 2020, around 85% of the original volume of cross-border leasing transactions had been terminated. The last remaining transaction has an off-balance sheet financing structure. As at 31 March 2020, VERBUND's secondary liability amounted to €498m (31 December 2019: €519.4m) for the unpaid portion of the lease liability from this cross-border leasing transaction. Of the rights of recourse against the primary debtors, €278.9m (31 December 2019: €308.8m) is secured through counter-guarantees from financial institutions, entities entitled to purchase electricity and regional authorities (from guarantors' liabilities). In addition, €294.7m (31 December 2019: €283.8m) is covered by off-balance sheet investments in zero coupons of the European Investment Bank which are also secured by a guarantee from the Financial Security Assurance Inc. (FSA). Contingent liabilities
There were no significant developments compared with the status described as of 31 December 2019 in connection with the claims for damages asserted in the wake of the flooding of the Drau River in 2012. No disclosures have been provided in respect of any contingent liabilities or provisions because it is likely that such note disclosures would seriously prejudice VERBUND's position in the proceedings. Court proceedings pending
In connection with the amortisation of goodwill for the investment in VERBUND Innkraftwerke GmbH claimed for tax purposes for the years 2014–2023, the appeals against the 2014, 2015, 2016 and 2017 notices of assessment for the group parent remain pending. The tax benefit for these years (reduction of future tax payments in the amount of €8.2m per year) is recognised in accordance with VERBUND's accounting policies if it is reasonably likely to arise.
| Transactions with investees accounted for using the equity method | €m | ||
|---|---|---|---|
| Q1/2019 | Q1/2020 | Change | |
| Income statement | |||
| Electricity revenue | 19.1 | 13.8 | –27.7% |
| Grid revenue | 11.1 | 10.2 | –8.9% |
| Other revenue | 0.1 | –0.6 | n.a. |
| Other operating income | 0.5 | 0.5 | 0.5% |
| Expenses for electricity, grid, gas and certificates | |||
| purchases | –6.1 | –4.9 | 20.1% |
| Other operating expenses | –0.1 | –0.1 | –106.3% |
| Interest income | 0.3 | 0.3 | –8.9% |
| Interest expenses | 0.0 | 0.0 | 16.7% |
| Other financial result | 0.5 | 0.4 | –1.3% |
| Transactions with investees accounted for using the equity method | €m | ||
|---|---|---|---|
| 31/12/2019 | 31/3/2020 | Change | |
| Balance sheet | |||
| Investments and other receivables | 49.2 | 47.9 | –2.5% |
| Trade receivables, other current receivables and securities | 31.8 | 30.4 | –4.6% |
| Contributions to building costs and grants | 272.1 | 270.0 | –0.8% |
| Trade payables and other current liabilities | 6.3 | 3.3 | –47.2% |
Electricity revenue with equity-accounted investees was generated mainly with KELAG (€10.3m; Q1/2019: €14.6m) and with OeMAG (€3.3m; Q1/2019: €4.3m). The electricity revenue was offset by electricity purchases from KELAG in the amount of €4.7m (Q1/2019: €5.9m). Grid revenue was mainly realised with KELAG.
Electricity revenue with companies controlled or significantly influenced by the Republic of Austria amounted to a total of €17.1m (Q1/2019: €16.1m). Electricity was purchased mainly by ÖBB, OMV and Telekom Austria. Electricity purchased from companies controlled or significantly influenced by the Republic of Austria totalled €2.1m (Q1/2019: €0.8m). The electricity was supplied primarily by ÖBB. Gas trading contracts with OMV and gas deliveries on the part of OMV resulted in a total expense of €2.7m in other revenue and purchased gas, respectively (Q1/2019: €5.1m).
VERBUND's expenses for monitoring by E-Control amounted to €2.2m (Q1/2019: €1.7m).
Audit and/or review
These consolidated interim financial statements of VERBUND have been neither audited nor reviewed by an auditor.
Events after the reporting date There were no events requiring disclosure between the reporting date of 31 March 2020 and authorisation for issue on 30 April 2020.
Vienna, 30 April 2020
The Executive Board
Dipl.-Ing. Wolfgang Anzengruber Mag. Dr. Michael Strugl
Dr. Peter F. Kollmann Mag. Dr. Achim Kaspar Member of the Executive Board Member of the Executive Board
Chairman of the Executive Board Vice-Chairman of the Executive Board
We confirm according to the best of our knowledge that the condensed consolidated interim financial statements of VERBUND as at 31 March 2020, prepared in accordance with the accounting standards for interim financial reports under International Financial Reporting Standards (IFRSs), give a true and fair view of the assets and liabilities, financial position and profit or loss of the Group.
We also confirm that the Group interim management report of VERBUND gives a true and fair view of the assets and liabilities, financial position and profit or loss of the Group with respect to the important events during the first three months of the financial year and their effects on the condensed consolidated interim financial statements as at 31 March 2020 as well as with respect to the principal risks and uncertainties in the remaining nine months of the financial year.
Vienna, 30 April 2020
The Executive Board
Dipl.-Ing. Wolfgang Anzengruber Mag. Dr. Michael Strugl Chairman of the Executive Board Vice-Chairman of the Executive Board
Dr. Peter F. Kollmann Mag. Dr. Achim Kaspar Member of the Executive Board Member of the Executive Board
Published by: VERBUND AG Am Hof 6a, 1010 Vienna, Austria
This Interim Report was produced in-house with firesys. Charts and table concept: Roman Griesfelder, aspektum gmbh Creative concept and design: Brainds, Marken und Design GmbH Consulting: Ute Greutter, Ukcom Finance Translation and linguistic consulting: ASI GmbH – Austria Sprachendienst International Printing: VERBUND AG (in-house)
Am Hof 6a, 1010 Vienna, Austria Phone: +43 (0)50 313-0 Fax: +43 (0)50 313-54191 Email: [email protected] Homepage: www.verbund.com Commercial register number: FN 76023z Commercial register court: Commercial Court of Vienna VAT No.: ATU14703908 DPR No.: 0040771 Registered office: Vienna, Austria
Andreas Wollein Phone: +43 (0)50 313-52604 Email: [email protected]
Corinna Tinkler Phone: +43 (0)50 313-53702 Email: [email protected]
– Republic of Austria (51.0%) – Syndicate (> 25.0%) consisting of EVN AG (the shareholders of which are: Niederösterreichische Landes-Beteiligungsholding GmbH, 51%, EnBW Trust e.V., 28.4%) and Wiener Stadtwerke (the sole shareholder is the City of Vienna) – TIWAG-Tiroler Wasserkraft AG (> 5.0%, the sole shareholder is the province of Tyrol) – Free float (< 20.0%): no further information is available concerning owners of shares in free float.
With the exception of regional authorities and companies in which regional authorities hold an interest of at least 51%, the voting rights of each shareholder in the Annual General Meeting are restricted to 5% of the share capital.
E-Control GmbH/E-Control Kommission Bundesministerium für Finanzen Wirtschaftskammer Österreich Oesterreichs Energie
The Group focus is the generation, transportation, trading with and sale of electrical energy and energy from other sources as well as the provision and performance of energy services.
Wolfgang Anzengruber (Chairman), Michael Strugl (Vice-Chairman), Peter F. Kollmann, Achim Kaspar
Thomas Schmid (Chairman), Martin Ohneberg (1st Vice-Chairman), Elisabeth Engelbrechtsmüller-Strauß (2nd Vice-Chairwoman), Harald Kaszanits, Werner Muhm, Susanne Riess, Jürgen Roth, Stefan Szyszkowitz, Christa Wagner, Peter Weinelt, Doris Dangl, Isabella Hönlinger, Kurt Christof, Wolfgang Liebscher, Veronika Neugeboren
Information for customers, partners and the general public about the utilities sector and the Group.
Austrian Electricity Industry and Organisation Act (Elektrizitätswirtschafts- und organisationsgesetz, ElWOG) with associated regulations and implementation laws. The legal bases listed can be accessed via the legal information system of the Federal Chancellery of the Republic of Austria at www.ris.bka.gv.at.
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