EVN AG — Call Transcript 2019

Aug 22, 2019

EVN conference call Q. 1-3 2018/19 results

22 August 2019

Highlights Q. 1-3 2018/19

Full-year guidance confirmed

• Group net result for 2018/19 is expected to reflect the upper end of the assumed range of EUR 160m to EUR 180m
• Development in line with expectations
• − Y-o-y comparison influenced by non-recurring positive valuation effect in last year's Q. 3
• − Forecasted negative factors weigh on results: rising wholesale prices; absence of network stabilisation for southern Germany; price and volume effects in the Networks Segment
• Q. 3 earnings supported by sound contributions from wind power and cooler temperatures in May 2019
• 370 MW medium-term expansion target for wind to be met at end of September 2019 (one year earlier than planned)
• Good order level in the international project business

Key financials Q. 1-3 2018/19

	Q 3 2 0 8 9 1- 1 / 1	/– +
	E U Rm	%
Re ve nu e	1, 7 1 2. 6	3. 5
E B I T D A	4 3 5. 7	2 5. 5 -
d a De ia io isa io t t t p re c n a n m or n	1 9 9. 6 -	3. 6 -
f fe fro im irm E ts t te ts c m p a en s	0. 4	–
E B I T	2 3 6. 4	3 9. 0 -
l re l F ina ia ts nc su	1 4. 4 -	2. 0
l Gr t r t ou p ne es u	1 6 8. 2	3 8. 4 -

h f low fro Ne t c as m
ing iv i ies t t t op er a a c	2 3 8. 8	3 2. 1 -
1) Inv tm ts es en	2 2 0. 6	7. 6
de b Ne t t	1, 0 0 0. 4	2. 0 -
	%
2) Eq i io ty t ra u	5 5. 5	3. 8

Different developments in revenue

• Increase in renewable generation and heating business
• Price- and volume-related decline in the Networks Segment

Decline in EBITDA, EBIT and Group net result

Negative earnings contribution from EVN KG (higher procurement costs and valuation of hedges)

1) In intangible assets and property, plant and equipment

2) Changes reported in percentage points

Solid balance sheet structure

• Net debt fluctuates around EUR 1bn after substantial deleveraging over the past years
• Strong balance sheet as a basis for future investments (~EUR 400m p.a. over the coming years)

EBITDA development by segments

Generation

	Q 1- 3 2 0 1 8 / 1 9	/– +
lec ic i io lu E tr ty t g en er a n vo m es	h GW	%
l To ta	3, 3 7 5	0 1.
b le Re ne w a en er g y so ur ce s	9 1, 5 5	0. 1 1
he l e T rm a ne rg y so ur ce s	2, 1 9 4	4. 6 -
	Q 1- 3 2 0 1 8 / 1 9	/– +
l p fo F in ia an c er rm an ce	EU Rm	%
Re ve nu e	2 6 4. 9	2 4. 0
E B I T D A	3 0 1 7.	9. 7
E B I T	8 9. 8	3 5.

The thermal waste utilisation plant in Zwentendorf/Dürnrohr that was previously held in the Environment Segment was assigned to the Generation Segment beginning with Q. 4 2017/18

Decline in electricity generation

• Strong y-o-y increase in wind generation
• Hydrology above long-term average, but below even better previous year
• 430 MW contractual reserve capacity for network stabilisation (last year: 1,090 MW)

Higher revenue y-o-y

Renewable generation benefits from increase in electricity prices

EBITDA and EBIT above previous year

Energy

l l S t a e s v o u m e s o	Q 3 2 0 8 9 1- 1 / 1	/– +
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	6, 0 2 0	1 1. 6
l N t a u r a g a s	6 9 4, 7	2. 5 -
H t e a	3 1, 7 5	0. 4 -

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

Different development of energy sales volumes

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

EBITDA and EBIT below previous year

Sales activities in EVN KG (at equity consolidated with operational nature) suffered from valuation of hedges and higher procurement costs

Networks

k d b i i i N t t t e w o r s r u o n	Q 3 2 0 8 9 1- 1 / 1	/– +
l o m e s v u	h G W	%
l i i E t t e c r c y	6, 5 2 7	0. 7 -
1) l N t a u r a g a s	1 3, 3 0 0	8. 4 -
	Q 3 2 0 8 9 1- 1 / 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 e nu e v	4 2 0. 3	3. 3 -
E B I T D A	1 8 7. 0	1 6. 2 -
E B I T	9 4. 9	2 9. 8 -

1) Including network sales to EVN's power stations

Decline in network distribution volumes

• Slight decline in electricity
• Natural gas affected by reduced use of natural gas-fired power plants and warmer weather

Tariff reductions in 2019

New regulatory periods provide for lower WACC

Revenue below previous year

Negative volume and price effects

EBITDA and EBIT declined y-o-y

South East Europe

bu in Ke e ne rg s e s s y y	Q 3 2 0 8 9 1- 1 / 1	/– +
d in ic t a o r s	h G W	%
le ic i io lu E t ty t c r g e ne ra n vo m e s	3 5 2	1 2. 7
k d is i bu io lu Ne tw t t o r r n vo m e s	1 0, 9 3 9	2. 0
le ic i le lu E t ty c r s a s v o m e s	9, 2 6 9	5. 1
le lu He t a s a s v o m e s	1 9 8	1. 5

	Q 3 2 0 8 9 1- 1 / 1	/– +
in ia l p fo F a nc e r rm a nc e	EU Rm	%
Re ve nu e	6 8 0. 1	3. 9 -
E B I T D A	8 3. 0	1 9. 8
E B I T	3 7. 5	6 6. 3

• Income-neutral change of calculation method for "green electricity mark-up"
• Corresponding decrease in revenue and procurement costs
• Higher network and energy sales volumes
• Improvement in EBITDA and EBIT
• Lower write-offs of receivables

Environment

	Q 1- 3 2 0 1 8 / 1 9	/– +
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	6 4. 9	4 8. 3 -
E B I T D A	2 2. 2	1 1. 7
E B I T	1 3. 5	–
i i l l F t n a n c a r e s u s	4. 4 -	–
l b f i R t t e s u e o r e n c o m e a x	9. 1	–

The thermal waste utilisation plant in Zwentendorf/Dürnrohr that was previously held in the Environment Segment was assigned to the Generation Segment beginning with Q. 4 2017/18

Decline in revenue

Developments in international project business

EBITDA below and EBIT above prior year

Positive impact from wastewater project in Zagreb

Cash flows

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

Cash flow from operating activities and investments (EURm)

CF from operating activities

Changes in working capital

CF from investing activities

• Reduction of investments in cash funds and in securities in R 138 fund
• Y-o-y increase of net investments with a focus on regulated and stable activities

CF from financing activities

• Dividend payments
• Scheduled repayment of financial liabilities

Development of Group net result

• Group net result for 2017/18 positively influenced by valuation of hedges
• Group net result for 2018/19 is expected to reflect the upper end of the assumed range of EUR 160m to EUR 180m

Contact details

Stefan Szyszkowitz, CEO

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

• Phone: +43 2236 200-12473

• 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.