EVN AG — Earnings Release 2018

Dec 12, 2019

EVN conference callFY 2018/19 results

12 December 2019

• Group net result: EUR 302.4m
• Incl. positive valuation effects of ~EUR 110m after tax
• Sound earnings contributions from wind power and South East Europe Segment
• Negative factors in FY 2018/19 as predicted: rising wholesale prices; reduced volume of network stabilisation; price and volume effects in the Networks Segment
• Expansion of wind power capacity to 367 MW installed capacity
• Investments: EUR 391.4m
• Focus on stable and regulated activities in Lower Austria
• Dividend proposal: EUR 0.50 per share1)

Positive valuation effects of ~EUR 110m after tax

• Effects from impairment tests (triggered by lower market interest rates and higher electricity prices)
• Valuation effects from hedges on EVN AG and EVN KG1)
• Tax effects

Selected pre-tax effects from impairment testing

l h b l d i i i i E t t t t t e c r c p r o c r e m e n r g s, r e n e a e g e n e r a o n a n y u w d h i i i t t t t s r c e a n g a s s e s … … … … … … … … … … … … … … … … … …	E U R 3 5 m
b l d h d i i i C B N M t t s o m e r a s e s n g a r a a n o r a c e o n a u u … … … … … …	E U R 2 3 m
) … 1 b d k f k V I t e r u n n n r a w e r e … … … … … … … … … … … … … … …	E U R 9 2 m
l l W 1 0 t a s m p o e r p a n u w … … … … … … … … … … … … … … … …	E U R 1 3 m -

Key financials in FY 2018/19

	F Y 2 0 1 8 / 1 9	/– +
	E U R m	%
R e v e n u e	2, 2 0 0 4.	6. 0
E B I T D A	6 3 1. 7	-6 0
d i i i i D t t t e p r e c a o n a n a m o r s a o n	-2 6 9. 8	-4 5
f f f E i i t t t t e c s r o m m p a r m e n e s s	4 1. 6	–
E B I T	4 0 3. 5	2. 7
l l F i i t n a n c a r e s s u	-2 9. 9	1 9. 5
l G t t r o u p n e r e s u	3 0 2. 4	1 8. 8

f f h l N t e c a s o w r o m
i i i i t t t o p e r a n g a c v e s	4 2 9. 7	-2 8. 8
1) I t t n v e s m e n s	3 9 1. 4	9. 8
d b N t t e e	9 9 9. 5	3. 7
	%
2) i i E t t q u y r a o	5 5. 6	3. 3
	E U R
h E i a r n n g s p e r s a r e	1. 7 0	1 8. 7

1)In intangible assets and property, plant and equipment

2)Changes reported in percentage points

Different developments in revenue

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

Decline in EBITDA

• Negative earnings contribution from EVN KG (higher procurement costs and valuation of hedges)
• Higher contribution from VerbundInnkraftwerke due to valuation effects

EBIT and Group net result above previous year

Positive effects from impairment testing

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 per year)

EBITDA development by segments

Generation

	2 0 8 9 F Y 1 / 1	/– +
lec lu ic i io E tr ty t g en er a n vo m es	h GW	%
l To ta	4, 8 5 0	1. 2
b le Re ne w a en er g y so ur ce s	1, 9 4 1	9. 6
he l e T rm a ne rg so ur ce s y	2, 9 0 9	-3 8

	F Y 2 0 1 8 / 1 9	/– +
fo in ia l p F an c er rm an ce	EU Rm	%
Re ve nu e	3 3 6. 7	2 3. 7
E B I T D A	2 6 0. 6	–
E B I T	2 1 8. 4	–

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 electricity generation

• Strong y-o-y increase in wind generation
• 430 MW contractual reserve capacity for network stabilisation (last year: 1,090 MW)

Change in Segment reporting for thermal waste utilisation plant1)

• Corresponding changes in p&l
• EBITDA and EBIT above previous year
• Higher earnings contribution from VerbundInnkraftwerke (due to better performance and revaluation)

Energy

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

	2 0 8 9 F Y 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	5 7 3. 5	8. 9 1
E B I T D A	-8 5. 0	–
E B I T	-9 2 7.	–

Different development of energy sales volumes

• Higher electricity sales volumes
• Decline in natural gas and heat sales volumes mainly due to milder weather

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	F Y 2 0 1 8 / 1 9	/– +
l v o u m e s	h G W	%
l i i E t t e c r c y	8, 5 1 1	-0 6
1) l N t a u r a g a s	1 5, 8 3 8	-6 4

	F Y 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	5 3 4. 0	-3 7
E B I T D A	2 0 8. 2	8 -1 7.
E B I T	8 2. 9	9 -4 1.

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

South East Europe

F Y 2 0 1 8 / 1 9	/– +
h G W	%
4 2 5	1 0. 3
1 4, 2 2 3	1. 9
1 1, 9 8 3	5. 7
2 0 9	0. 8

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

• 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
• Improved collection rate of receivables

Environment

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

Achievements in international project business

• Commissioning of one wastewater treatment plant each in Croatia and North Macedonia
• Receipt of six new general contractor assignments

Change in Segment reporting for thermal waste utilisation plant1)

Corresponding changes in p&l

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

Cash flows

F Y 2 0 1 8 / 1 9	/– +
EU Rm	in %
0. 5 5 5	8 -1
4 2 9. 7	-2 8. 8
-2 0 7. 1	5 4. 7
-1 9 1. 0	-2 4. 4
3 1. 5	–

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

• Group net result for 2019/20 is expected to range from EUR 200m to EUR 230m

• Assuming average conditions in the energy business environment
• Y-o-y decline due to positive valuation effects of approximately EUR 110m after tax in 2018/19
• Operating result is therefore expected to remain constant

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.