EVN AG — Call Transcript 2020

Aug 27, 2020

EVN conference call Q. 1-3 2019/20 results

27 August 2020

Highlights Q. 1-3 2019/20

Diversified business model as stabilising factor

• − Recovery of EVN KG
• − EBITDA (+17.9%), EBIT (+20.3%), Group net result (+25.2%)
• − Corona crisis with selective impacts only
• Clear commitment to investment programme
  • − EUR 400m p.a., thereof EUR 300m in Lower Austria
  • − Focus on networks, renewable and drinking water
• Share of renewable electricity generation rises to 59.7% (previous year: 42.6%)
• Achievements in international project business
  • − Three new thermal sludge treatment projects in Germany
  • − Closing for wastewater project in Kuwait

Key financials Q. 1-3 2019/20

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

h f low fro Ne ing iv i ies t c t t t as m op er a a c	2 0 5. 8	-1 3. 8
1) Inv tm ts es en	2 0 1. 1	-8 9
de b Ne t t	1, 0 8 6. 4	8. 6

1) In intangible assets and property, plant and equipment

2) Changes reported in percentage points

Different developments in revenue

• − Positive trend from South East Europe and international project business
• − Decline in thermal generation and in the Network Segments

EBITDA, EBIT and Group net result above previous year

− Recovery of EVN KG

• − Positive one-time effects at RAG and Energie Burgenland
• − Impairment losses already in Q. 2 2019/20 due to increase in country risk premiums in South East Europe caused by the Covid-19 pandemic

Solid balance sheet structure

• Increase of net debt in Q. 1-3 2019/20 includes effect of ~EUR 70m in connection with initial application of IFRS 16
• Strong balance sheet as a basis for future investments (~EUR 400m p.a. over the coming years)

EBITDA development by segments

Conference call Q. 1-3 2019/20 results

Generation

	Q 1- 3 2 0 1 9 / 2 0	/- +
le ic i io lu E t ty t c r g e ne ra n vo m e s	h G W	%
l To ta	2, 3 1 0	-3 8. 5
b le Re ne w a en er g y so ur ce s	1, 4 3 8	-7 8
he l e T rm a ne rg y so ur ce s	8 7 1	-6 0. 3

f in ia l in d ic Ke t y a nc a o rs	E U Rm
Re ve nu e	2 0 8. 1	-2 1. 4
E B I T D A	1 0 0. 8	-2 6. 4
E B I T	4 9. 4	-4 5. 0

Decline in electricity generation

• − Renewable generation slightly lower y-o-y (additional wind capacity, but lower wind and water flows)
• − Lower thermal generation (closure of coalfired power plant in Dürnrohr; less demand for network stabilisation)

Revenue, EBITDA and EBIT below previous year

− Impairment losses already in Q. 2 2019/20 following an increase in the country risk premiums due to Covid-19 (Ashta hydropower plant in Albania and wind park Kavarna in Bulgaria)

Energy

le lu S t a s v o m e s o	Q 1- 3 2 0 1 9 / 2 0	/- +
d t e n cu s o m e rs	h G W	%
lec ic i E tr ty	6, 0 4 4	6. 4
l g Na tu ra as	4, 5 0 8	-3 8
He t a	6 0 1, 7	1. 5

f l d in ia in ic Ke t a nc a o rs y	E U Rm
Re ve nu e	3 1 0. 2	-3 3. 7
E B I T D A	7 2. 9	-
E B I T	5 7. 4	-

Different development of energy sales volumes

• − Increase in electricity sales volumes (positive development in sales to industrial customers)
• − Weather- and competition-related decline in natural gas

Revenue below previous year

− Decline in marketing of own generation

Improvement in EBITDA and EBIT

• − Lower usage of primary energy carriers
• − Recovery of EVN KG

Networks

lu vo m e s h G W
	%
lec E ic i 6, 4 4 4 tr ty	-1 3
l g Na 1 2, 7 6 3 tru a as	-4 0
f in ia l in d ic Ke t y a nc a o rs E U Rm
Re 4 0 3. 5 ve nu e	-4 0
E B I T D A 1 7 1. 1	-8 5
E B I T 7 4. 4	-2 1. 5

Decline in network distribution volumes

• − Decline in electricity consumption caused by Covid-19 (volume effects to be offset in future tariffs according to Austrian regulation)
• − Decline in natural gas due to lower use of thermal power plants for network stabilisation and mild winter

Revenue below previous year

− Negative volume and price effects

EBITDA and EBIT declined y-o-y

South East Europe

bu in Ke y en er g y s es s	Q 1- 3 2 0 1 9 / 2 0	/- +
in d ica to rs	h G W	%
lec ic i ion lum E tr ty t g en er a vo es	3 3 2	-5 7
f r he b le t re o en ew a en er g y	9 9	4. 9
he f he l p lan t t ts re o rm a ow er p	2 3 3	-9 5
k d bu lum Ne is i ion tw tr t or vo es	1 0, 6 0 7	-3 0
lec les lum ic i E tr ty sa vo es	8, 9 8 1	-3 8
les lum He t s a a vo es	1 8 0	-9 1

f in ia l in d ica Ke to y an c rs	E U Rm
Re ve nu e	7 0 6. 1	3. 8
E B I T D A	1 0 5. 1	2 6. 6
E B I T	3 9. 1	4. 4

Network and energy sales volumes declined y-o-y

− Unusually mild temperatures and corona crisis

Improvement in EBITDA and EBIT

• − Reduction in procurement costs for network losses in Bulgaria
• − Impairment losses already in Q. 2 2019/20 following an increase in the country risk premiums due to Covid-19 (Bulgarian district heating company TEZ Plovdiv and customer base in North Macedonia)

Environment

	Q 1- 3 2 0 1 9 / 2 0	/- +
f in ia l in d ica Ke to y an c rs	h G W	%
Re ve nu e	9 9. 6	5 3. 5
E B I T D A	1 4. 1	-3 6. 5
E B I T	3 5.	-6 0. 7
l re l F ina ia ts nc su	-5 6	-2 8. 0
fo l be inc Re t ta su re om e x	-0 3	-

Higher revenue y-o-y

• − Increase in drinking water sales volumes
• − Positive development of international project business

EBITDA and EBIT below prior year

• − Corresponding increase in operating expenses
• − Previous year benefited from positive effects in at equity results

General contractor assignment for thermal sludge treatment projects

• − Berlin contract for WTE Wassertechnik
• − Hanover and Straubing contracts for sludge2energy (joint venture by WTE)

Cash flows

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

CF from operating activities

− Non-cash effective earnings contribution by equity accounted investees

CF from investing activities

• − Equity contribution for Kuwait project and increased investments in cash funds
• − Contrasted by delay of investments due to corona crisis and divestments of securities (R 138 fund)

CF from financing activities

• − Dividend payment for FY 2018/19 and scheduled repayment of financial liabilities
• −EUR 100m green promissory note loan issued in April 2020

• Group net result for 2019/20 is expected to range from EUR 180m to EUR 200m
  • − Assuming average conditions in the energy business environment and a stable situation in connection with the corona crisis during Q. 4 2019/20
• Confirmation of dividend policy
  • − Ordinary dividend of EUR 0.47 per share
• Investment strategy
  • − Approximately EUR 400m p.a. over the next financial years
  • − Thereof approximately EUR 300m will be directed to networks, renewable generation, natural heat and drinking water in Lower Austria
  • − Occasional delays resulting from the lockdown will be recovered as soon as possible

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.