EVN AG — Call Transcript 2013

Feb 28, 2013

EVN Conference Call Q. 1 2012/13 Results

February 28th, 2013

• Biomass district heating plant in Steyr supplies customers with heat and electricity
• First construction phase of the natural gas transport pipeline Westschiene completed
• EVN Netz GmbH acquired a 15%-stake in AGGM Austria Gas Grid Management AG
• Contract awarded for planning and construction of three further wastewater treatment plants in Romania
• Emission of promissory note loans of EUR 121.5m
• On-going share buyback programme extended and repurchase volume increased by further 1,000,000 shares
• Prior-year figures were adjusted due to IAS 19 (2011)
• Outlook 2012/13: results from operating activities and Group net profit are expected to be below prior-year figures

	EU Rm	2 0 1 2 / 1 3 Q 1	/– + i % n
R e v e n u e		7 9 4. 0	4. 3 –
E B I T D A		1 7 3. 5	0. 5 –
E B I T		6. 2 1 1	3 4.
l l i i F t n a n c a r e s u s		1 1. 7 –	–
f G i t t r o p n e p r o u		7 1. 5	2 8 1. –
h f l f N t e c a s o r o m w i i i i t t t o p e r a n g a c e s v		5 4. 7	–
	EU R
i h E a r n n g s p e r s a r e		0. 0 4	2 1. 5 –

Decrease in revenue

• Energy business: Temperature and economic related drop
• Environmental Services business: Scheduled completion of large projects in prior year

Stable EBITDA and higher EBIT

• Lower procurement costs for energy
• Higher other operating income
• Impairment charge in the prior year

Financial results dropped

Negative earnings contribution by EconGas

Group net profit below prior year

Prior year adjusted due to IAS 19 (2011)

EU Rm	2 0 2 1 1 / 1 ( d ) j. a	2 0 2 1 1 / 1	/– +
l P e r s o n n e e x p e n s e s	3 2. 6 1 –	3 2 9. 1 –	6. 1 5
E B I T D A	4 7 4. 5	4 5 8. 0	1 6. 5
E B I T	2 2 3. 2	2 0 6. 7	1 6. 5
I t t n e r e s e p e n s e s x	1 0 4. 4 –	8 7. 9 –	1 6. 5 –
l l i i F t n a n c a r e s s u	3 6. 5	3. 0 5	6. 1 5 –
f f i i P t t t r o a e r n c o m e a x	2 3 3. 8	2 3 3. 8	–
f i G t t r o u p n e p r o	1 9 4. 9	1 9 4. 9	–

EU Rm	2 0 1 1 / 1 2 ( d ) Q j. 1 a	2 0 1 1 / 1 2 Q 1	/– +
l P e r s o n n e e x p e n s e s	7 3. 8 –	8 0. 5 –	6. 7
E B I T D A	1 7 4. 3	1 6 7. 6	6. 7
E B I T	1 1 1. 4	1 0 4. 7	6. 7
I t t n e r e s e p e n s e s x	2 6. 4 –	2 2. 2 –	–4 1
l l i i F t n a n c a r e s u s	1 3. 1	1 7. 3	–4 1
f f i i P t t t r o a e r n c o m e a x	1 0 3. 8	1 0 1. 9	1. 9
f i G t t r o u p n e p r o	9 1. 4	8 9. 5	1. 9

2011/12 (adj.): no impact on Group net profit

Change of disclosure of interest component of the provisions for pensions and severance payments between personnel expenses and financial results

Q. 1 2011/12 (adj.): slight impact on Group net profit

• Change of disclosure of interest component of the provisions for pensions and severance payments between
• personnel expenses and financial results
• Adjustment due to corridor method

EBITDA development by segments

• Generation: lower electricity production of thermal power plants due to unfavourable market price development and prior year was positively effected by the power request from Germany
• Energy Trade and Supply: drop in sales of marketed natural gas volumes, price reduction due to lower additional costs for renewable electricity and termination of the cooperation agreement with Begas
• Network Infrastructure Austria: stable earnings
• Energy Supply SEE: tariff adjustments

Generation

l i i i E t t t e c r c y g e n e r a o n		2 0 2 3 1 / 1	/– +
l v o u m e s	h GW	Q 1	i % n
l T t o a		6 7 5	4. 4 –
b l R e n e w a e e n e r g y s o u r c e s		3 2 3	2 7. 7
h l T e r m a e n e r g y s o u r c e s		4 4 2	1 9. 2 –

l f i i F n a n c a p e r o r m a n c e	EU Rm
R e v e n u e		3 3. 5	3. 1 –
E B I T D A		1 6. 9	8. 9 –
E B I T		1 0. 0	–

Lower generation volumes

• Production decline from thermal power plants
• Increase from renewable energy sources

Lower revenue

• Reduction in the option value of thermal power plants
• In the prior year positive effect by the power request by the German Federal Network Agency

EBITDA decrease and EBIT increase

Impairment charge in the prior year

Energy Trade and Supply

End customerprice adjustments1)

l N t a u r a g a s	4/1 /20 11	% 8. 9
	10/ 1/2 01 1	3. 6 %
l i i E t t e c r c y	1/1 /20 12	% 1. 7 –

l l S t a e s o m e s o v u		2 0 1 2 / 1 3	/– +
d t e n c u s o m e r s	GW h	Q 1	i % n
l E i i t t e c r c y		2, 0 0 7	5. 2
l G N t a r a a s u		2, 8 1 5	8 4. –
H t e a		5 7 3	0. 2

i i l f F n a n c a p e r o r m a n c e	EU Rm
R e v e n u e		3 2 2 5.	2. 6 1 –
E B I T D A		3 9. 2	1 1. 6 –
E B I T		3 5. 6	1 3. 2 –

1) Average, household sector (source: EVN)

Diverse sales volumes development

• Lower natural gas: economic weakness and improved energy efficiency
• Higher electricity: business extension of EAA outside of Austria

Revenue drop

• Decrease in sales of marketed natural gas volumes
• Price reduction due to lower additional costs for renewable electricity

EBITDA and EBIT decrease

Financial results influenced by EconGas

f f d ) i j 1 T t t a r s a s m e n s u
l i i E t t e c r c y	1/1 /20 12	–
l N t a u r a g a s	1/1 /20 12	1. 9 % –

k d i i b i N t t t e w o r s r u o n		2 0 2 3 1 / 1	/– +
l v o u m e s	h GW	Q 1	i % n
l i i E t t e c r c y		2, 0 7 9	1. 4
l N G t a u r a a s		4, 9 3 5	5. 4 –

i i l f F n a n c a p e r o r m a n c e	EU Rm
R e v e n u e		2 1 4 1.	2 4. –
E B I T D A		7 8. 2	8. 0
E B I T		5 3. 8	1 1. 3

1) Average, according to the regulator in Austria (E-Control)

2) Including network sales to EVN's power stations

Diverse distribution volumes development

• Electricity: slight increase
• Natural gas: decline due to weaker demand from industrial customers and further reduction in use of EVN's thermal power plants

Revenue drop

Decrease in other revenue due to a decline in invoiced customer projects

EBITDA and EBIT improvement

Energy Supply South East Europe

End customerprice adjustments1)

l i B u g a r a	l i i t t e e c r c y	7/1 /20 12	% 1 3. 6
	h t e a	/20 12 4/1	% 6. 8
		7/1 /20 12	–2 0. 6 %
d i M a c e o n a		1/1 /20 12	) 2 8 % 4.
		8/1 /20 12	) 2 6. % 1

b i K e y e n e r g y u s n e s s		2 0 2 3 1 / 1	/– +
i d i t n c a o r s	h GW	Q 1	i % n
) 3 l d b l i i i i i E t t t. t t e c r c n e s r o n o m e s y u v u		3, 3 8 6	8. 8 –
d b l H i i i t t. t t e a n e s r o n o m e s u v u		7 1	1 7. 3 –
l l i i i E t t t e c r c y g e n e r a o n v o u m e s		9 3	8 6. 5

i i l f F n a n c a p e r o r m a n c e	EU Rm
R e v e n u e		2 6 6. 7	8. 3
E B I T D A		2 6 4.	9 7.
E B I T		8. 9	6. 9

1) Average, household sector, according to the regulators in Bulgaria (SEWRC) and Macedonia (ERC)

• 2) EVN Macedonia
• 3) In Bulgaria and Macedonia energy sales volumes fairly equal present network distribution volumes

Higher electricity generation

Start of production of the new cogeneration plant in January 2012

Weather-related drop in sales volumes

Prior year: extremely cold

Revenue increase

Tariff adjustments

Increase of EBITDA and EBIT

• Despite higher prices for procured electricity, especially the additional costs related to renewable energy
• Higher write-offs of receivables

		2 0 2 3 1 / 1	/– +
i i l f F n a n c a p e r o r m a n c e	EU Rm	Q 1	i % n
R e v e n u e		8 1. 0	3. 7 –
E B I T D A		1 2. 7	1 2. 4 –
E B I T		6. 0	2 4. 3 –
l l F i i t n a n c a r e s s u		2. 8	–
f b f i i P t t r o e o r e n c o m e a x		8. 8	2. 0

Lower revenue

Completion and invoicing of large projects in the prior year

EBITDA and EBIT decrease

Financial results up from EUR 0.7m

Higher income from investments ZOV and ZOV UIP, Croatia

New contract awarded

Three wastewater treatment plants in Romania

Financial results

Income from investments in equity accounted investees

Gain from other investments

Total interest results

Total other financial results

Financial results: EUR –11.7m

• EconGas EUR –20.4m
• High negative spread between long-term, oilbased natural gas purchases and hub price linked sales
• Recognition of a provision for impending losses on contractually agreed, longterm transport and LNG capacity bookings

	EU Rm	2 0 1 2 / 1 3 Q 1	/– + i % n
h f l G r o s s c a s o w		6 1 5 1.	1. 4
h f l f i N t t e c a s o r o m o p e r a n g w i i i t t a c e s v		5 4. 7	–
h f l f N i i t t e c a s o r o m n e s n g w v i i i t t a c v e s		1 3 5. 3 –	3 7. 8 –
f f f h l N i i t e c a s o w r o m n a n c n g i i i t t a c v e s		1 1 1. 6	–
h h d h i N t e c a n g e n c a s a n c a s i t e m s		3 0. 9	–

Gross cash flow

Investments in intangible assets, property, plant and equipment

Higher gross CF

Lower non-cash share of income of equity accounted investees

Increase of net CF fromoperating activities

Weather-related lower year-on-year increase in working capital

Change of net CF from investing activities

• Investment in short-term securities
• Capital payment for investments in equity accounted investees

Increase of net CF from financing activities

Issue of promissory note loans

Investments1)

Generation

Investment volume

Roughly on prior-year level

Investment focus

• Expansion of windpower capacity
• Expansion of district heating networks
• Construction of Westschiene

• Expansion of the network infrastructure and replacement of metres in SEE

• Weak economic growth in Europe

• Ongoing high primary energy prices and low electricity prices
• Decrease of electricity and natural gas network tariffs in Austria
• Mild winter mainly in South Eastern Europe
• Challenging regulatory and politically conditions in Bulgaria

Operating results and Group net profit are expected to be below the prior-year level

Stefan Szyszkowitz

CFOPhone: +43 2236 200-12132Fax: +43 2236 200-82132E-mail:stefan.szyszkowitz@evn.at

Klára Székffy

Head of Investor RelationsPhone: +43 2236 200-12745Fax: +43 2236 200-82745E-mail:klara.szekffy@evn.at

Investor information on the web

www.evn.atwww.investor.evn.atwww.responsibililty.evn.at E-mail: investor.relations@evn.at

EVN AG

Headquarters EVN Platz2344 Maria Enzersdorf

Disclaimer

Certain statements made in this presentation may constitute "Forward-Looking Statements" within the meaning of the U.S. federal securities law. Forward-looking information is subject to various known and unknown risks and uncertainties. These include statements concerning our expectations and other statements that are not historical facts.

The Company believes any such statements are based on reasonable assumptions and reflect the judgement of EVN's management based on factors currently known by it.

No assurance can be given that these forward-looking statements will prove accurate and correct, or that anticipated, projected future results will be achieved.

For additional information regarding risks, investors are referred to EVN's latest Annual report.