EVN AG — Investor Presentation 2014

Aug 28, 2014

EVN Conference Call Q. 1–3 2013/14 Results

28 August 2014

• Initial application of IFRS 10–12
• Q. 1–3 2013/14 financial statements were prepared in accordance with new consolidation standards
• Standards are mandatory for all companies which prepare their consolidated financial statements according to IFRS
• Three companies of EVN 's scope of consolidation are affected

Company	So far – IAS 31	Future – IFRS 11	Effects on the group financial statements
EVN Energievertrieb GmbH & Co KG	Company included on a proportionate basis (100 percent)	at Equity	 Assets and liabilities of the companies are not reported anymore  At equity investment will be included in the balance sheet in the amount of the proportionate equity
EnergieAllianz Austria GmbH	Company included on a proportionate basis (45 percent)	at Equity	 Earnings contribution is reported in the position "Results from equity accounted investees with operational nature" under the results of operating activities (EBIT)
STEAG-EVN Walsum 10	at Equity	joint operation – Line by line accounting (49 percent)	 Derecognition of the at equity investment  Proportional reporting of all assets and liabilities in the balance sheet  Proportional reporting of all P&L positions; in comparison the at equity result in the amount of profit after tax will no longer be displayed

• Energy business negatively influenced by price and quantity effects
• Lower results from operating activities before impairment tests
• New tariff scenarios led to reduced mid term expectations resulting in impairments; nevertheless, positive EBIT contribution achieved (impairments excluded)
• Negative Group net result
• Strong operating cash flow

Key financials

	EURm	2013/14 Q. 1–3	+/– in %
Revenue		1,514.4	–8.7
Results from at equity investees		108.9	16.0
EBITDA		377.0	–23.1
Results before impairments		186.2	–40.8
Impairments		–209.2	–
EBIT		–23.0	–
Financial results		–9.8	82.2
Group net result		–44.7	–
Net cash flow from operating activities		367.2	–6.6
	EUR
Earnings per share		–0.25	–

Year-on-year decline in revenue

• Previous regulatory price reductions in Bulgaria and Macedonia
• Negative "one-off" due to Bulgarian price decision on 1 July 2014
• Temperature-related quantity effects in the energy business
• Reduced processed orders in int. projects

Decreased EBITDA and Result before impairments

Despite lower OPEX

Impairments driven by SEE investments

Increase in financial results

Strong net cash flow from operating activities

Solid balance sheet structure

• Equity ratio 40.5%
• Non-current liabilities increased due to the EUR 150.0m loan from EIB
• Current liabilities decreased mainly due to bond redemption
• Net debt reduced by EUR 167.0m to EUR 1,642.6m
• Gearing declined from 58.6% to 57.6%

Financial results

Structure of financial result in EURm; development in %

Increase in financial results

• Improvement by EUR 45.2m to EUR –9.8m
• Absence of negative one-off effect from WEEV in the previous year
• Higher dividend payment of EUR 40.1m from Verbund AG
• Increased interest expenses due to Duisburg-Walsum

EBITDA development by segments

Generation

		2013/14	+/–
Electricity generation volumes	GWh	Q. 1–3	in %
Total		1,809	–20.6
Renewable energy sources		1,126	–10.2
Thermal energy sources		683	–33.4

Financial performance	EURm
Revenue		139.3	52.7
Results from at equity investees		1.4	–
EBITDA		58.6	–
EBIT		8.2	–

Decreased power generation

• Lowered production from renewables due to reduced water flows
• Inspection related production decline in Dürnrohr

Year-on-year increase in EBITDA and EBIT

• Revenue increase in spite of challenging energy sector conditions
• Commissioning of Walsum
• Results from at equity accounted investees increased
• Absence of last year's negative one-off effects
• Increase in operating expenses and depreciation due to commissioning of Walsum

Energy Trade and Supply

End customer price adjustment1)
Electricity and natural gas	1.10.2013	–3.6%
Sales volumes to end customers	GWh	2013/14 Q. 1–3	+/– in %
Electricity		5,207	–6.3
Natural gas		5,038	–15.6
Heat		1,545	–2.4

Financial performance	EURm
Revenue		355.3	11.1
Results from at equity investees		51.1	47.7
EBITDA		81.1	87.5
EBIT		69.4	–

Decrease in sales volumes

• Lower sales volumes by EnergieAllianz
• Mostly temperature-related reduction in sales volumes of electricity, natural gas and heat

Year-on-year increase in EBITDA and EBIT

• Increased revenues
• Lower sales volumes more than offset by new marketing of Walsum generation
• Results from at equity accounted investees increased
• Mainly affected by absence of last year's negative one-off effects
• Increase in operating expenses
• Depreciation remains nearly unchanged

Network Infrastructure Austria

1.1.2014	–9.0%
1.1.2014	7.7%
	2013/14	+/–
GWh		in %
		–0.3
	12,063	–8.1
		Q. 1–3 6,011

Financial performance	EURm
Revenue		390.4	–0.2
EBITDA		191.8	2.4
EBIT		116.2	2.1

Lower distribution volumes

• Electricity: lower demand from households and small businesses almost compensated by higher demand from industrial customers
• Natural gas: temperature-related decrease

Increase in EBITDA and EBIT

• Lower electricity and gas network distribution revenue almost compensated by positive change of assets recognised for the regulatory account
• Slightly higher cable TV and telecommunication revenue
• Year-on-year drop in operating expenses

2) Including network sales to EVN's power stations

End customer price	adjustments1)
Bulgaria	electricity	1.7.2014	0.6%)
		1.1.2014	–1.0%/–10.0%2)
	heat	1.1.2013	5.1%
Macedonia	electricity	1.7.2014	3.5%
		1.7.2013	–3.0%

		2013/14	+/–
Key energy business indicators	GWh	Q. 1–3	in %
Electricity generation volumes		310	–10.6
volumes3) Network distribution		10,002	–0.2
Heat sales volumes to end customers		172	–11.6

Financial performance	EURm
Revenue		661.1	–15.3
EBITDA		8.8	–89.7
EBIT		–230.8	–

Lower electricity generation and distribution volumes

• Decreased rainfall limited hydropower plants production; reduced usage of co-generation plant in Plovdiv
• Weather related decline in heat sales

Drop in EBITDA and EBIT

• Lower sales revenues due to
• Previous regulatory tariff decisions
• Recognition of regulatory liability in Bulgaria
• OPEX decline due to
• Continuous operative improvements
• Recognition of regulatory receivable in Bulgaria
• EUR 193.5m impairments mainly on Bulgarian and Macedonian customer bases and goodwill
• 1) Average, household sector, according to the regulators in Bulgaria (SEWRC) and Macedonia (ERC)
• 2) 1% decrease in day tariffs; 10% decrease in night tariffs
• 3) In Bulgaria and Macedonia energy sales volumes fairly equal present network distribution volumes

		2013/14	+/–
Financial performance	EURm	Q. 1–3	in %
Revenue		134.8	–29.5
EBITDA		37.3	–20.5
EBIT		14.0	–44.9
Financial results		–2.1	–
Profit before income tax		12.0	–53.5

Year-on-year drop in EBITDA and EBIT

• Reduction in revenue
• Decrease in the number of processed orders in the international project business
• Rise in revenue in thermal waste utilisation in Austria
• Expansion of drinking water supply to new communities
• Decline in operating expenses

Business development

• Opening of the wastewater purification plant Mia Milia/Haspolat, Cyprus
• Moscow: guarantee drawn from the Federal Republic of Germany, continued discussions with the city of Moscow

	EURm	2013/14 Q. 1–3	+/– in %
Gross CF		349.3	–29.2
Net CF from operating activities		367.2	–6.4
Net CF from investing activities		–156.5	35.1
Net CF from financing activities		–238.6	–
Net change in cash and cash equivalents		–27.8	–

Operating cash flow and Investments in EURm

Year-on-year decline in gross cash flow

• Negative Group net result, however, mainly due to higher depreciation and amortisation
• Lower non-cash earnings components from equity accounted investees
• Initial recognition of a regulatory receivable

Lower net cash flow from operating activities

Despite higher regulatory liabilities and trade payables and lower income tax payments

Net cash flow from investing activities

• Investments in network infrastructure and production capacities
• Sale of short-term cash funds

Outlook and strategy 2013/14

Outlook 2013/14:

• Negative Group net result
• Due to non-cash effects no impact on expected dividend payment
• EVN's strategy:
• Consolidation of existing business in core markets
• Increase of efficiency
• Continued investment priority in Lower Austria
• EVN's strengths:
• Broad and stable customer base
• Integrated business model

Stefan Szyszkowitz

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

Gerald Reidinger

Head of Finance and Investor Relations Phone: +43 2236 200-12698 Fax: +43 2236 200-82698 E-mail: gerald.reidinger@evn.at

Alexander Sipek

Investor Relations Officer Phone: +43 2236 200-12360 Fax: +43 2236 200-82360 E-mail: alexander.sipek@evn.at

Investor's contact point

www.evn.at www.investor.evn.at www.responsibility.evn.at E-mail: investor.relations@evn.at

EVN AG

Headquarters 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. 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.