EVN AG — Call Transcript 2018

May 30, 2018

EVN conference callHY. 1 2017/18 results

30 May 2018

Highlights HY. 1 2017/18

• Solid development of business
• Significantly milder temperatures especially in South Eastern Europe
• Increase of renewable electricity generation by 13.1%
• Favourable water conditions and continuing commissioning of windparks
• Dynamic expansion of windpower capacities on track
• Continuing high demand for electricity from thermal generation to support network stability
• 1,090 MW under contract during the winter half-year 2017/18 for southern Germany
• 430 MW already contracted to stabilise the networks in Austria in summer 2018
• Ratings in A-range confirmed; Moody's raised outlook to positive

Key financials HY. 1 2017/18

	H Y. 1 2 0 1 7 / 1 8	/– +
	E U Rm	%
Re ve nu e	1, 2 4 6. 0	-4 9
E B I T D A	0. 8 4 7	-2 1
d De ia io is io t t t p re c n a n a m o r a n	-1 2 9. 9	1. 1
f fe fro im irm E t t t t c s m p a e n e s s	-0 6	9 8. 1
E B I T	3 4 0. 3	6. 5
l re l ina ia F t nc su s	-2 5. 1	1. 1
l G t t ro p ne re su u	2 2 9. 4	-1 9

f fro h low Ne t c a s m
ing iv i ie t t t o p e ra a c s	2 5 3. 9	-3 2
1) Inv t t e s m e n s	1 3 6. 0	2 3. 8
d b Ne t t e	1, 1 2 8. 2	-1 3. 0
	%
2) Eq i io ty t ra u	5 0. 8	5. 2

1)In intangible assets and property, plant and equipment

2)Changes reported in percentage points

Revenue below previous year

• Thermal electricity generation below high prior year level and reduced natural gas trading activities
• Temperature-related drop in revenue in South Eastern Europe
• Decline from international project business

Lower EBITDA

• Two contrasting one-offs in prior year
• Decreased operating expenses

EBIT above previous year

Impairment loss to planned Gorna Arda hydropower project in prior year

Moderate reduction y-o-y in Group net result

Conference call HY. 1 2017/18 results ³

Solid balance sheet structure, reduced net debt

• Reduction of net debt to EUR 1,128.2m (30 September 2017: EUR 1,213.2m)
• Gearing decreased from 38.5% to 32.9%

EBITDA development by segments

Conference call HY. 1 2017/18 results

Generation

	H Y 1 2 0 1 7 / 1 8	/– +
l i i i lu E t t t e c r c y g e n e r a o n v o m e s	G h W	%
l T t o a	2, 9 3 8	-2 0. 2
b l R e n e w a e e n e r g y s o u r c e s	9 4 8	1 2. 9
h l T e r m a e n e r g y s o u r c e s	9 9 1, 1	-3 0. 0

	H Y 1 2 0 1 7 / 1 8	/– +
l f i i F n a n c a p e r o r m a n c e	E U Rm	%
R e v e nu e	1 5 7. 6	9. 7
E B I T D A	1 0 4. 2	3 5. 1
E B I T	8 0. 4	–

Increased renewable generation

Strong water flows and continuous expansion of windpower capacities

Decline in thermal production

Increased revenue

• Higher renewable generation
• Positive effects from contractual reserve capacities for network stability

Improvements in EBITDA and EBIT

• Lower expenses for primary energy carriers
• Impairment loss to planned Gorna Arda hydropower project in prior year

Energy

l l S t a e s v o u m e s o	H Y 1 2 0 1 7 / 1 8	/– +
d t e n c s o m e r s u	h G W	%
l i i E t t e c r c y	3, 7 4 8	5. 6
l N t a r a g a s u	4, 3 6 5	-4 8
H t e a	1, 4 5 2	2. 7

	2 0 8 H Y 1 1 7 / 1	/– +
f i i l F n a n c a p e r o r m a n c e	E U Rm	%
R e v e n u e	3 3 2. 2	-3 6
E B I T D A	8 5. 7	-7 8
E B I T	7 6. 0	-9 0

Different development of energy sales volumes

• Higher electricity and heat sales volumes
• Weather-related decline in natural gas sales volumes

Revenue dropped y-o-y

• Decrease in marketing of own thermal generation
• Reduced natural gas trading activities

EBITDA and EBIT below previous year

Networks

k d i i b i N t t t e w o r s r u o n	2 0 8 H Y 1 1 7 / 1	/– +
l o m e s v u	h G W	%
l E i i t t e c r c y	4, 6 0 8	2. 1
1) l N t a r a g a s u	2, 3 2 0 1	3 -7
	H Y 1 2 0 1 7 / 1 8	/– +
i i l f F n a n c a p e r o r m a n c e	E U Rm	%
R e v e n u e	3 2 2. 8	-0 8
E B I T D A	1 8 3. 3	-3 4
E B I T	1 2 3. 7	-6 5

1) Including network sales to EVN's power stations

Differing network distribution volumes:

• Increase in electricity supported by sound economy
• Decline in natural gas due to the reduced use of thermal power plants in Lower Austria

Revenue below previous year

Negative volume and price effects

EBITDA and EBIT declined y-o-y

• Increased operating expenses due to higher upstream costs for network stabilisation
• New regulatory period for natural gas distribution networks as of 1 January 2018

South East Europe

b i K e y e n e r g y u s n e s s	2 0 8 H Y 1 1 7 / 1	/– +
i d i t n c a o r s	h G W	%
l i i i l E t t t e c r c y g e n e r a o n v o u m e s	1 9 1	-2 8. 0
k d b l N i i i t t t e w o r s r u o n v o u m e s	7, 7 2 1	-2 2
l i i l l E t t e c r c y s a e s v o u m e s	6, 4 0 7	-6 8
l l H t e a s a e s v o u m e s	1 7 8	-1 1. 0

H Y 1 2 0 1 7 / 1 8	/– +
E U Rm	%
5 1 3. 8	-5 2
4 6. 4	-5 6. 3
1 5. 1	-7 9. 8

• Temperature-related decline in network distribution and energy sales volumes
• Revenue dropped y-o-y
• Negative energy-related developments

Decline in EBITDA and EBIT

Prior year positively influenced by nonrecurring effect from settlement with Bulgarian NEK

Environment

	H Y 1 2 0 1 7 / 1 8	/– +
i i l f F n a n c a p e r o r m a n c e	E U Rm	%
R e v e n u e	8 2. 5	-2 2. 1
E B I T D A	6. 1 7	–
E B I T	5. 1	–
l l i i F t n a n c a r e s u s	-0 3	–
l b f R i t t e s u e o r e n c o m e a x	4. 8	–

Decline in revenue

Lower revenue from international project business

EBITDA and EBIT above prior year

Previous year affected by negative nonrecurring effect (valuation allowance on inventories)

Cash flows

	H Y. 1 2 0 1 7 / 1 8	/– +
	EU Rm	in %
h f low Gr os s c as	3 8. 4 4	3. 8
h f low fro ing iv i ies Ne t c t t t as m op era a c	2 5 3. 9	-3 2
f fro h low inv ing iv i ies Ne t c t t t as m es a c	-1 9 6. 7	–
h f low fro f ina ing iv i ies Ne t c t t as m nc a c	-1 1 8. 3	2 7. 3
ha in h d h Ne t c ng e ca s an ca s
len iva ts eq u	-6 1. 1	–

CF from operating activities

• Changes in working capital
• Prior year negatively affected by the arbitration decision for Walsum, however corresponding positive effect was contained in CF from investing activities

CF from investing activities

Higher investments and a rise in shortterm securities

CF from financing activities

• Dividend payment for 2016/17

• Scheduled repayments of loans

• Group net result for 2017/18 should return to a normal level that reflects the average of the 2015/16 and 2016/17 financial years

• Outlook assumes average conditions in the energy business environment
• Factors that could influence the Group net result include
• The regulatory background
• The proceedings currently in progress in Bulgaria
• The remaining proceedings over the Walsum 10 power plant project
• The progress on activities in Moscow
• Presentation of Q. 1–3 2017/18 results
• 23 August 2018

Contact details

Stefan Szyszkowitz, CEO

• IR contact partners:
• Gerald Reidinger
• Matthias Neumüller
• Doris Lohwasser
• Karin Krammer
• IR contact details
• E-mail: investor.relations@evn.at
• Phone: +43 2236 200-12128
• Phone: +43 2236 200-12473

• Phone: +43 2236 200-12867

• Information on the internet

• www.evn.at
• www.investor.evn.at
• www.responsibility.evn.at
• Headquarters of EVN AG
• EVN Platz 2344 Maria Enzersdorf

Disclaimer

Certain statements made in this presentation may constitute "Forward-Looking Statements" within the meaning of the U.S. federal securities law. Forwardlooking 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.