VERBUND AG — Earnings Release 2014

Oct 29, 2014

News Details

Ad-hoc | 29 October 2014 08:00

VERBUND AG: results for quarters 1-3/2014: result better than expected due to successful sale of French CCGTs

VERBUND AG / Key word(s): 9-month figures/Interim Report

29.10.2014 08:00

Dissemination of an Ad hoc announcement, transmitted by DGAP - a service of
EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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VERBUND continues to operate in a challenging environment. Economic growth
is stagnating, as is electricity consumption. In addition, negative energy
market effects are aggravating the situation of European energy suppliers:
overcapacities and market distortion resulting from public subsidies are
directly impacting business performance.

A key step in counteracting this situation is to successfully restructure
thermal power plant generation, which is progressing rapidly. At the start
of October, VERBUND reached agreement with international investor KKR on
selling the French Pont-Sur-Sambre and Toul combined cycle gas turbine
power plants. The sale puts a stop to the negative earnings contributions
and cash outflows from these power plants. Our withdrawal from Sorgenia in
Italy was already finalised at the end of July. It is expected that the
creditor banks will take over the company. Thus VERBUND will divest itself
of its 46% share by the end of the year. In Austria, the Dürnrohr hard coal
power plant will be closed as planned following closure of the
Neudorf-Werndorf oil-fired district heating plant. The temporary shutdown
of the Mellach CCGT has been postponed due to a temporary injunction
ordered by a Styrian court.

In quarters 1-3/2014, results were considerably lower than in the previous
year, but still better than expected. The primary reason for the
significant decrease was that the 2013 results had received a very
substantial boost from the sale of Turkish activities and the concurrent
purchase of hydropower plants in Germany. Results were also negatively
impacted by the further decline in electricity sales prices, a lower water
supply than in the previous year and impairment losses on the Romanian wind
farms. Tax effects related to the sale of the French CCGTs had a positive
impact. EBITDA decreased by 42.8% to EUR633.0m and the Group result dropped
by 86.4% to EUR63.8m. After adjustment for non-recurring effects, EBITDA
declined by 25.4% to EUR688.1m and the adjusted Group result fell by 48.5%
to EUR174.2m.

VERBUND has raised its earnings forecast due to the better-than-expected
water supply in the third quarter and margins from the electricity business
as well as additional cost reductions. Based on average own generation from
hydropower in the fourth quarter, it is anticipated that EBITDA will amount
to approximately EUR770m and the Group result to approximately EUR85m in
financial year 2014. The planned payout ratio for 2014 remains at
approximately 50% of the Group result of approximately EUR190m after
adjustment for non-recurring effects.

Key figures Unit Q1-3/2013 Q1-3/2014 Change
Revenue EURm 2,406.3 2,059.9 -14.4%
EBITDA EURm 1,107.4 633.0 -42.8%
Operating result EURm 125.2 205.7 64.3%
Group result EURm 468.9 63.8 -86.4%
Earnings per share EUR 1.35 0.18 -86.4%
EBIT margin % 5.2 10.0 -
EBITDA margin % 46.0 30.7 -
Cash flow from
operating activities EURm 672.7 612.2 -9.0%
Free cash flow
after dividend EURm 506.1 -133.6 -
Gearing % 71.0 76.1 -

Since 1 January 2014, IFRS 11 "Joint Arrangements" has replaced the
previous rules under IAS 31 "Interests in Joint Ventures". As a result of
the new rules, the interest in Ennskraftwerke Aktiengesellschaft is to be
classified as a joint operation. The figures already reported have
therefore been restated.
Although the result attributable to the French combined cycle gas turbine
power plants is to be presented separately from continuing operations in
accordance with IFRS 5, to enhance comparability, the key figures relate to
the combined result from the Group's continuing and discontinued
operations.
Additional information and the interim report for quarters 1-3/2014 is
available at www.verbund.com > Investor Relations > Latest financial
results.

Contact:
Andreas Wollein
Head of Group Finance and Investor Relations
T.: +43 (0)5 03 13 - 52604
F.: +43 (0)5 03 13 - 52694
mailto:investor-relations@verbund.com

29.10.2014 The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
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Language: English
Company: VERBUND AG
Am Hof 6A
1010 Wien
Austria
Phone: 0043-1-53113-52616
Fax: 0043-1-53113-52694
E-mail: investor@verbund.com
Internet: www.verbund.com
ISIN: AT0000746409
WKN: 877738
Indices: ATX
Listed: Wien (Amtlicher Handel / Official Market)

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