EVN AG — Investor Presentation 2019

Jan 1, 2020

EVN – energy company and environmental services provider

January 2020

EVN at a glance

• Business development (FY 2017/18)
• Back-up information

Integrated business model as basis for our value chain

2) Number of customers in brackets

Foreign markets in the energy business

• − Bulgaria: Electricity distribution networks, electricity supply, generation and heat
• − North Macedonia: Electricity distribution networks, electricity supply and generation
• − Selected activities in Germany, Croatia and Albania

High share of regulated and stable business

Company presentation, January 2020

Sustaining high share of stable income from regulated network business

• Investments in electricity networks

  • − New construction or expansion of transformer stations and substations
  • − Expansion of 110 kV power lines
  • − Smart meter

• Investments in gas networks

  • − Replacement of PVC gas pipelines
• Ø future RAB growth 3-4% p.a.

k Ne tw or	le ic i E tr ty c	l g Na tu ra as	Co ts m m en
la ho i Re to t ty g u ry au r	l b E- Co Gm H tro n	l b E- Co Gm H tro n
f he la io d S ta t o t to r re g u ry p er	0 1. 0 1. 2 0 1 9	0 1. 0 1. 2 0 1 8
la d j Ne t r to tm t x eg u ry a us en	0 1. 0 1. 2 0 2 4	0 1. 0 1. 2 0 2 3	f fa d j d du iv i A W A C C tm t o t ty to us en an p ro c c rs
f he la d Du ion io t t to ra o re g u ry p er	5 y ea rs	5 y ea rs
la ho d Re to t g u ry m e	Re ve nu e c ap s	Re ve nu e c ap s
( ) R A B E U Rm	l ly d d j An te nu a a us	l ly d d j An te nu a a us	l d de d he he An inv R A B in tm ts to t t nu a es en ar e a fo l low ing y ea r
( l ) W A C C ina ta p re- x, no m	( f ) Ne R A B 2 0 1 9 w as o : − 5. 2 0 % f Ex is ing R A B o D S O t − h a i t ve ra g e w f f ic ien % 4. 8 8 e cy :	( f ) Ne R A B 2 0 1 8 w as o : − 5. 2 0 % f h Ex is ing R A B o D S O i t t w − f f ic ien av er ag e e cy : % 4. 8 8	fo f r len h o la io d Se t t to r g eg u ry p er he fo f h a bo H ig W A C C is ing R A B o D S O i t t r r e x w ve Ö f f ic ien ( h a ) E V N / Ne N tz av er ag e e cy su c s
l p du fa Ge iv i t ty to ne ra ro c c r	0. 9 % 5	0. 6 % 7	fro du h he Ga ins ion in i t r t t t m co s e c s r em a w du ing he la io d t to co m p an y r re g u ry p er
f la ion In t	l a d j An tm t nu a us en	l a d j An tm t nu a us en	k o de f c ice in is Ne tw to ts or p er a r p r x c on s o on su m er de d w de ice in inc in p r x a n ag e rea se x

Dynamic expansion of wind power capacity

• 500 MW target until year-end 20231)
  • − Pipeline of approved and developed projects in Lower Austria
  • − Feed-in tariffs in Austria fixed for 13 years
• Development of EVN's installed wind capacity (in MW)

Strong market position in Austria

Market shares refer to FY 2017/18; EVN holds a 45% stake in EAA & Partners

Source market shares: E-Control 2018, annual report and company numbers

Source churn rates: E-Control, market statistics –consumer attitude/churn rates electricity and gas according to network areas

Company presentation, January 2020

Continuous efforts to achieve further operating improvements in SEE

Improvement of grid efficiency

• Number of customers

  • − Bulgaria: 1.8m

• − North Macedonia: 0.9m

• Commitment to supply security
• Investment strategy for SEE
  • − Expansion and upgrading of network infrastructure to continuously reduce network losses
  • − Replacement of metres to further improve collection rates

Drinking water business in Lower Austria – stable earnings contribution and future growth area

• Largest regional drinking water supplier
  • − 0.6m drinking water customers
  • − Supra-regional pipeline networks and local water supply networks
  • − Operation of 4 natural filter plants to reduce the hardness of water by natural means
• Expansion of cross-regional pipeline networks (until 2030)
  • − ~EUR 165m total investments
  • − ~300 km additional pipelines

International environmental projects further diversify EVN's business mix

Sludge drying and thermal sludge treatment plant project Tubli (Bahrain)

• International project business
  • − WTE Wassertechnik GmbH (Germany)
  • − Planning and construction of plants for drinking water supplies, wastewater disposal and thermal waste incineration
  • − Operation and financing (upon request)
  • − 7 projects under construction (Poland, Lithuania, Romania, Croatia Bahrain)1)
• Plants for thermal utilisation of sewage sludge as area with high future potential

Significant contribution to EVN's net profit from strategic investments

1) Contribution to EVN's net profit in FY 2018/19

Verbund AG

• − #1 electricity producer in Austria and #2 hydropower producer in Europe with 8.2 GW installed capacity
• Burgenland Holding AG
  • − Holds a 49% stake in Energie Burgenland (#1 green energy producer in Austria, distribution networks, sale of energy)
• RAG Austria AG
  • − ~6bn m3 storage capacity for natural gas

• High share of earnings from regulated and stable business
• Continuous strengthening and expansion of domestic regulated and stable activities
  • − Networks, wind generation, heating, drinking water supply
• Benefit from solid home market
  • − Maintain strong anchorage in the supply business despite growing competition
• Robustness of integrated business model
• Commitment to stable dividend policy

• 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

EVN share

Shareholder structure (as of 30 September 2019)

	2 0 8 9 1 / 1	2 0 8 1 7 / 1
d d ha ( ) iv i D E U R e n p e r s re	1) 0. 0. 0 3 4 7 +	1) 0. 0. 0 3 4 4 +
( ) Pa io % t t ou ra y	2 9. 4	3 2. 9
d d l d ( ) D iv i ie % e n y	3. 1	2. 8
	3 0. 0 9. 2 0 9 1
ha ( ) S ic E U R re p r e	6. 1 1 4
ke l ( ) i is io M E U Rm t t t a r c a p a a n	2, 9 0 3

1) Bonus dividend of EUR 0.03 per share; 2018/19 FY: proposal to AGM

According to federal and provincial laws, the Province of Lower Austria is required to hold a stake of at least 51% in EVN

EVN at a glance

• Business development (FY 2017/18)
• Back-up information

Key financials (FY 2018/19)

	2 0 8 9 F Y 1 / 1	/– +
	E U R m	%
R e v e n u e	2, 2 0 4. 0	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 i i F t n a n c a r e s u s	-2 9. 9	9. 1 5
l G t t r o u p n e r e s u	3 0 2. 4	1 8. 8
h f l f N t e c a s o r o m w
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) E i i t t q r a o u y	5 5. 6	3. 3
	E U R
h i E a r n n g s p e r s a r e	0 1. 7	8. 1 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 Verbund Innkraftwerke due to valuation effects
• EBIT and Group net result above previous year
  • − Positive effects from impairment testing

Key energy business indicators (FY 2018/19)

	2 0 1 8 / 1 9	/– +
	h G W	%
l i i i l E t t t e c r c y g e n e r a o n v o u m e s	5, 5 9 4	1. 2
b l R e n e a e e n e r g s o r c e s w y u	2, 3 1 5	4. 6
h l T e r m a e n e r g s o r c e s y u	3, 2 7 9	-1 0
k d i i b i l N t t t e w o r s r u o n v o u m e s
l i i E t t e c r c y	2 2, 7 3 4	1. 0
l N t a u r a g a s	1 6, 0 8 0	-6 1
l l d E t n e r g s a e s o m e s o e n y v u
t c u s o m e r s
l i i E t t e c r c y	1 9, 9 2 4	8. 2
h f d i A G t t e r e o u s r a a n e r m a n y	7, 9 4 1	1 2. 2
f h h S E E t t t e r e o o a s e r n r o p e u u	1 1, 9 8 3	5. 7
l N t a u r a g a s	5, 0 8 3	-1 8
H t e a	2, 1 9 6	-1 0

• Increased renewable generation

  • − Expansion of wind power capacities
  • − High wind flows

• Decline in thermal production

• Network distribution volumes
  • − Increase in electricity supported by South East Europe Segment
  • − Decline in natural gas due to weather effects as well as reduced use of thermal power plants
• Higher electricity sales volumes

EBITDA development by segments

(FY 2018/19)

Se t g m en	2 0 1 8 / 1 9	/– +	Co t m m en
ion Ge t ne ra	EU Rm 2 6 0. 6	% –	he b le lec ig ic i ion H tr ty t r r en ew a e g en era ; f ig he he l w i l isa ion lan h is in Se Q. 4 2 0 1 7 / 1 8; t o t t te t t t to t t rea ss nm en rm a as u p g me n h ig he ing i bu ion fro bu d kra f ke Ve Inn tr t tw r e ar n s c on m r n er
En er g y	-8 5. 0	–	fro f ive im ly bu ine ( lua ion he dg in ) Ne E V N K G t t t g a p ac m su p p s ss va o es
ks Ne tw or	2 0 8. 2	-1 7. 8	lum d f fe Ne ive ice t ts g a vo e a n p r e c
h So t Ea t Eu s ro p e u	3 1 1. 1	2 3 5.	k a d les lum in Inc tw rea se ne or n en er g sa vo es y ; f r im d l lec ion iva b les t te p rov e co ra o ec e
En iro t v nm en	2 6. 8	-1 1. 0	ig f he he l w i l isa ion lan he ion in Re Ge Se Q. 4 t o t t te t t t to t t t as s nm en rm a as u p ne ra g me n 2 0 1 7 / 1 8

Agenda

EVN at a glance

• Business development (FY 2017/18)
• Back-up information

Solid balance sheet structure

(FY 2018/19)

• 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)

Structure of investments1)

(FY 2018/19)

Investment strategy

• − Approximately EUR 400m p.a. over the next financial years
• − Thereof approximately EUR 300m will be directed to networks, renewable generation and drinking water in Lower Austria

1) In intangible assets and property, plant and equipment

Strong operating cash flow

(FY 2018/19)

• Strong operating cash flow due to high share of regulated and stable business

  • − Covers investments

• − Secures attractive dividend payments

• Investment program with a strong focus on RAB-growth
  • − Ø future RAB growth 3-4% p.a.

• Stable dividend policy
• Financial policy
  • − EVN's goal is to maintain solid A category ratings in the future
  • − In order to achieve such ratings, EVN is strictly monitoring the adjusted FFO/Net debt target ratios of both rating agencies
• Credit ratings
  • − Moody's: A1, stable (May 2019)
  • − S&P: A, stable (April 2019)

Well-balanced maturity profile

EUR 492m undrawn, committed credit lines(as of 30.09.2019)

Company presentation, January 2020

Challenging market environment

Source: EVN, December 2019

Company presentation, January 2020

RAG Austria AG

Natural gas storage facility Haidach (Province of Salzburg)

Key financials (FY 2018)

R e v e n u e	E U R m	5 0 9. 4
E B I T	E U R m	6 0. 2

1) Indirectly through RAG-Beteiligungs-Aktiengesellschaft (100%)

• Shareholder structure

  • − EVN AG (50.03%)1)

• − Uniper Exploration & Production GmbH (29.97%)

• − Energie Steiermark Kunden GmbH (10.00%)
• − Salzburg AG (10.00%)
• 100% of RAG earnings are recognised as share of profit of equity accounted investees with operational nature
• 49.97% of RAG earnings assigned to minority interest
• EVN contractually not entitled to exercise a controlling influence over RAG

Company presentation, January 2020

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
• Financial calendar
  • − Next event: Results Q. 1 2019/20, 27 February 2020
  • − www.investor.evn.at/financial-calender

Company presentation, January 2020

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.