EVN AG — Investor Presentation 2018

Dec 13, 2018

EVN conference call Annual results 2017/18

13 December 2018

Highlights 2017/18

• Group net result above normal level for second year in succession due to non-recurring effects
• − Positive non-cash effect from higher valuation of hedges as of 30 September 2018
• Increase of renewable electricity generation by 5.7%
• Volume and price effects weigh on natural gas distribution business in Lower Austria
• Significantly milder temperatures especially in South Eastern Europe
• 73% EBITDA from regulated and stable activities
• − 56% in Austria, 17% in South Eastern Europe
• Dividend proposal to 90th Annual General Meeting
• − EUR 0.44 plus bonus dividend of EUR 0.03 per share

Key financials 2017/18

	FY 2017/18	+/–
	EURm	%
Revenue	2,072.6	-6.5
EBITDA	671.8	-6.9
Depreciation and amortisation	-258.3	1.5
Effects from impairment tests	-20.6	81.7
EBIT	392.9	13.3
Financial results	-37.2	-73.9
Group net result	254.6	1.4

Net cash flow from
operating activities	603.5	18.6
Investments1)	356.4	17.3
Net debt	963.7	-20.6
	%
Equity ratio2)	52.3	3.5

1) In intangible assets and property, plant and equipment

2) Changes reported in percentage points

Decline in revenue

• − 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

• − Decreased operating expenses
• − Increase in results from equity accounted investees due to valuation effects of hedges at EVN KG

Improvement in EBIT and Group net result

− Prior year influenced by impairment losses

Solid balance sheet structure, reduced net debt

• Reduction of net debt to EUR 963.7m (30 September 2017: EUR 1,213.2m)
• Gearing decreased from 38.5% to 23.5%

EBITDA development by segments

Generation

	FY 2017/18	+/–
Electricity generation volumes	GWh	%
Total	4,794	-9.2
Renewable energy sources	1,771	4.5
Thermal energy sources	3,023	-15.7
	FY 2017/18	+/–
Financial performance	EURm	%
Revenue	270.6	12.8
EBITDA	123.7	19.2
EBIT	78.4	–

The Generation Segment includes the thermal waste utilisation plant in Zwentendorf/Dürnrohr since Q. 4 2017/18

Increased renewable generation

− Good 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
• − Prior year influenced from impairment losses

Energy

Sales volumes to	FY 2017/18	+/–
end customers	GWh	%
Electricity	7,080	9.0
Natural gas	5,083	-10.2
Heat	2,011	-2.5

	FY 2017/18
Financial performance	EURm	+/– %
Revenue	478.6	-8.0
EBITDA	80.8	-20.6
EBIT	57.4	-22.3

Different development of energy sales volumes

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

• − Provision for onerous contracts related to marketing of own electricity production
• − Positive contrary effect from valuation gains on hedges at EVN KG

Networks

Network distribution	FY 2017/18	+/–
volumes	GWh	%
Electricity	8,565	1.3
Natural gas1)	16,927	-9.2

	FY 2017/18	+/–
Financial performance	EURm	%
Revenue	554.4	-2.2
EBITDA	253.4	-13.5
EBIT	142.6	-19.7

1) Including network sales to EVN's power stations

Different development of 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
• − New regulatory period for natural gas distribution networks as of 1 January 2018

EBITDA and EBIT declined y-o-y

− Increased operating expenses (higher upstream costs and costs for third party services)

South East Europe

Key energy business	FY 2017/18	+/–
indicators	GWh	%
Electricity generation volumes	385	-11.6
Network distribution volumes	13,955	-1.5
Electricity sales volumes	11,333	-6.0
Heat sales volumes	208	-10.2

	FY 2017/18	+/–
Financial performance	EURm	%
Revenue	902.8	-5.8
EBITDA	104.6	-37.5
EBIT	40.2	-50.4

Business development suffers from milder winter

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

Decline in EBITDA and EBIT

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

Environment

	FY 2017/18	+/–
Financial performance	EURm	%
Revenue	150.0	-24.0
EBITDA	30.1	–
EBIT	9.3	–
Financial results	-10.4	–
Result before income tax	-1.1	95.2

Decline in revenue

− Less dynamic development of international project business

EBITDA and EBIT above prior year

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

Cash flows

	FY 2017/18	+/–
	EURm	in %
Gross cash flow	560.3	-2.1
Net cash flow from operating activities	603.5	18.6
Net cash flow from investing activities	-457.1	–
Net cash flow from financing activities	-153.5	65.1
Net change in cash and cash
equivalents	-7.1	–

Increase in CF from operating activities

• − Strong operating performance
• − 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 payments
• − Scheduled repayments of loans

Outlook for 2018/19

Development of Group net result Group net result for 2017/18

• positively influenced by valuation of hedges
• Expected Group net result for 2018/19 in the range of EUR 160m to EUR 180m
• Factors that could influence the Group net result include
• − Regulatory background
• − Proceedings currently in progress in Bulgaria
• − Remaining proceeding over the Walsum 10 power plant project
• − Progress on activities in Moscow

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.