VERBUND AG,

Transcription

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2 VERBUND Full year results 2016 Vienna, 08/03/2017

3 Full year results 2016 Page 3

4 At a glance Influencing factors Water supply at the level of long-term average and 7%-points above FY2015, decreased production from annual storage reservoirs ( 5.0%) Reduction of average achieved contract prices from 35.0 to 31.0 /MWh ( 11,4% vs. 2015) despite recovery of wholesale electricity prices in the second half-year of 2016 Restructuring of thermal power plants successfully continued (settlement of all outstanding matters with EconGas GmbH and Energie Steiermark AG respectively) Significant one-offs (e.g. settlement of outstanding matters regarding the gas delivery contract for CCGT Mellach and regarding the agreement with Energie Steiermark to supply district heating, impairments windparks Romania) Additional income from the grid segment on an adjusted basis and the program to reduce costs and increase efficiency as well as lower interest expenses. Results and cash flows EBITDA 1,044.2m (+17.5%); Adjusted EBITDA 894.5m (+6.6%) Group result 424.4m (+104.3%); Adjusted Group result 325.9m (+21.2%) Operating cash flow 804.3m (+19.3%); Free cash flow before dividend 580.7m (+5.3%) Dividend 2016 Dividend proposal 2016: 0.29/share ( 17.1%) Pay-out ratio of 23.7% (30.9% on adjusted Group result) Page 4

5 Higher hydro production and increased own generation; declining contract price Hydro coefficient (run-of-river) Hedging volumes / TWh longterm average FY 2015: 35.0/MWh Q1 Q2 Q3 Q (0.93) 2016 (1.00) Electricity supply 58,855 GWh (+3,618 GWh, +6.5%) Hydropower: 29,809 GWh (+1,711 GWh, +6.1%) Generation from storage power: 4,403 GWh ( 230 GWh) Thermal Power: 1,351 GWh ( 908 GWh, 40.2%) CCGT Mellach: 641 GWh ( 127 GWh) Wind/Solar: 835 GWh ( 47 GWh, 5.4%) Purchase from third parties: 26,861 (+2,862 GWh) /12/ /3/ /6/16 Achieved contract price Open volumes /9/ /12/16 Hedged volumes 1 Hydro production excluding volumes for holders of interests (at cost) and volumes resulting from pumping. Page 5

6 Thermal restructuring successfully continued Dürnrohr hard coal power plant Dürnrohr stopped electricity generation as of Mellach hard coal power plant 20/12/2016: Settlement of all outstanding matters associated with the agreement with Energie Steiermark to supply district heating to the city of Graz Construction of a boiler plant to satisfy district heating supply agreement, thereby having the option to close the hard coal power plant even earlier than in 2020 CCGT Mellach Court confirmed legal opinion of VERBUND no obligation to keep CCGT Mellach as reserve plant 24/8/2016: Resolution of all outstanding matters related to gas deliveries for CCGT Mellach (Expected) results contribution excl. one-offs Austria m 2014A 2015A 2016A 2017E EBITDA VERBUND is evaluating all options for the Mellach power plants site Page 6

7 Additional income from the grid (on an adjusted basis) Local GAAP: stable earnings and cash flows Cost coverage for investments without a timelag, cost coverage for operational expenditures with a timelag of 2 years Return (WACC 2017: 6.42% pre tax) on the regulated asset base (RAB 2017: 1,189m) Differences between revenues and planned revenues compensated by a regulatory account Annual cost review; WACC set for a 5-year period if market conditions do not change significantly IFRS: volatile earnings Revenue surpluses or shortfalls are not utilised/compensated via the regulatory account No rate provisions or asset line items (receivables from the regulatory system) are recognised Different depreciation/amortisation basis, useful lives and capitalisation of borrowing costs under IFRS and local GAAP Volatility from: balancing energy, auctioning off of cross-border grid capacites, congestion management services Grid EBIT FY2016/ m 248 Grid FY 2016/ km Voltage Level Route length System length 380-kV 1,153 2, kV 1,615 3, kV 659 1, kV (cable) 3 6 RAB x WACC Local GAAP EBIT Control energy Capacity Congestion auctions management Others IFRS EBIT Depreciation IFRS EBITDA Total 3,430 6,970 Page 7

8 Non-recurring effects on P&L in 2016 m Detail Electricty revenue Arbitration verdict EVN & others -8 Other revenue/use of fuels/other operating income Settlement of outstanding matters Mellach 149 Personnel expenses Update of employee benefit assumptions for provisions EBITDA Total Effects from impairment tests CCGT Mellach, hydro power plants, wind farms Romania & others -90 Operating result Total Other financial result Measurement of an obligation to return an interest reg. DKJ & option GKI 31 Reversal of impairments Ashta/Albania 5 Financial result Total Taxes Effects above and goodwill amortization Germany 1 Minorities Effects due to the non-recurring effects above 2 Group result Total Page 8

9 Sale of flexibility products System volatility in the European grid system increasing due to rapid development of new renewables Use of VERBUND power plants supplying flexible products Flexibility products: Control energy: Permanent balance between generation and consumption necessary to ensure grid stability (primary/secondary/tertiary control energy) Congestion management: All measures to prevent/counteract excess load flows Grid system services: Provision of energy/capacity for grid losses, disruption management, black-start capability etc. Intraday trading: Use of short-term volatility within one day to generate additional profits Capacity/cold reserve: Contractual reservation of capacity for grid operators Pumping/reverse operations: Contributions from volumes resulting from pumping FY2015 Actuals FY 2016 Actuals* Guidance FY2017* 148 Mio. 128 Mio. 110 Mio. * including pumping/reverse operations Page 9

10 Cost cutting and efficiency improvement program Target is to strengthen the free cashflow and to deleverage the company Strict cost management policy to ensure that the cost level as of 2015 regarding personnel- and other operating expenses is frozen Further reduction of approx. 211 FTEs until 2021 by means of partial retirement, package offers and natural churn without replacement Significant reduction of growth and maintenance CAPEX program Reduction of payout ratio from 50 % to 30% of adjusted group result for financial year 2016 Page 10

11 Key figures (1) EBITDA/ m Group result/ m , Reported Reported Adjusted Adjusted EBITDA margin, EBIT margin/ % Dividend; Payout ratio from Group result/ ; % (30.9% on adj. Group result) Rep. EBITDA Marge Rep. EBIT Marge Payout ratio Page 11

12 Key figures (2) Operating cash flow/ m Additions/ m to tangible assets (without business combination) Free cash flow before dividend/ m Net debt; Net debt/ebitda/ m; x , , , Net debt/ebitda 2016 Page 12

13 Financial liabilities Debt maturity profile/ m Financial liabilities/ bn > Financial liabilities Book value Financial liabilities: 2,227m Financial ratios Duration: 3.9 years Effective interest rate: 3.7% p.a. Uncommitted lines of credit: approx. 700m Syndicated loan: 500m Interest mix 93% fixed interest rate 7% floating interest rate Currency 100% EUR Rating Standard & Poor s: BBB/stable outlook Moody s: Baa2/stable outlook Page 13

14 Outlook Sensitivities 2017 A change of 1% (generation from hydropower/ windpower) or 1/MWh (wholesale price) either way would be reflected as follows in the group result for 2017, other things being equal: Greater or less generation from hydropower: +/ 4.9m Greater or less generation from windpower: +/ 0.4m Wholesale prices (renewable generation): +/ 4.4m Earnings outlook 2017 EBITDA of around 800m and Group result of around 280m based on an average generation from hydropower and windpower. Hedging volumes / TWh /12/ /3/ /6/ /9/ /12/16 Hedging volumes incl. options / TWh /6/ /12/ /9/ /12/16 Hedging volumes / TWh MtM (20/2/17): 28.8 MtM (20/2/17): 27.4 MtM (20/2/17): Hedged volumes include 0.9 TWh of an average price of 24.8/MWh Achieved contract price Open volumes Hedged volumes 1 Hydro production excluding volumes for holders of interests (at cost) and volumes resulting from pumping. Page 14

15 Current developments Page 15

16 Price zone Austria/Germany Main generation focus in the North Grid development in Germany! Electricity surplus from north cannot fully be transported to south due to missing grid capacities Discussions on separation of the common price zone Austria/Germany Consequences of a separation: Higher Power Price Increasing total costs Less market liquidity Higher transaction costs Impediment to renewables- and market integration (EUobjectives) Higher market entry barriers Main demand focus in the South Electricity flows Next steps: Decision of the European General Court regarding action for annulment with regard to the ACER opinion pending Decision on appeal by ACER board of appeal pending Decision of ENTSO-E in Q1/2018 expected Ongoing discussions on national and EU-level Page 16

17 CAPEX plan Growth capex/ m (total of 299m) Hydro Grid Others Maintenance capex/ m (total of 455m) Hydro Grid Others The efficiency increase measures in our hydro power plants, which are part of the maintenance capex, will increase our annual output by about 30 GWh. Page 17

18 Appendix Page 18

19 Segment reporting in m Renewable generation Sales Grid All other segments Reconciliation/ consolidation Total Group EBITDA reported One-offs EBITDA adjusted Capital Employed , , , , , ,880.8 Hydro New renewables Trading Sales Energy services Thermal Services Participations Page 19

20 Income statement m Total Total Revenue 2, ,795.9 Electricity revenue 2, ,213.9 Grid revenue Other revenue Other operating income Expenses for electricity purchases & use of fuels -1, ,389.8 Other operating & personnel expenses EBITDA ,044.2 Depreciation & amortisation Effects from impairment tests EBIT Result from equity interests & oth. interests Interest income/expense Other financial result Effects from impairment tests Financial result Taxes Group result Minorities Earnings per share ( ) (Proposed) dividend per share ( ) Page 20

21 Non-recurring effects influence EBITDA in m EBITDA reported 1,044 Settlement of outstanding matters Mellach 149 Arbitration verdict EVN 7 Update of employee benefit assumptions for provisions 8 EBITDA adjusted 895 Page 21

22 Non-recurring effects influence Group result in m Group result reported Impairment CCGT Mellach Impairments windparks Romania Impairments Hydro power plants 10 Reversal of impairment Albania 4 Other impairments 0 Setllement of outstanding matters Mellach 112 Arbitration verdict EVN 4 Update of employee benefit assumptions for provisions Measurement of an obligation to return an interest regarding DKJ & option GKI Tax effect goodwill amortization Group result adjusted 326 Page 22

23 Balance sheet (short version) m Change Non-current assets % Current assets % Non-current assets held for sale 0 0 Total assets % Equity % Non-current liabilities % Current liabilities % Total liabilities % Page 23

24 Cash flow statement (short version) m Change Cash flow from operating activities % Cash flow from investing activities Cash flow from financing activities % Change in cash and cash equivalents % Cash and cash equivalents at the end of the period % Page 24

25 Impairments 2016 Gas exposure Renewables Renewables CCGT Mellach Hydro power plant Gössendorf Hydro power plant Kalsdorf Book value 1/1/ 34 Book value 1/1/ 33 Book value 1/1/ 33 Impairment 16 Impairment 8 Impairment 9 * 1 * 0 * 1 Book value 31/12/ 18 Book value 31/12/ 25 Book value 31/12/ 23 New renewables Interests Others Wind farms in Romania Energie AG m Book value 1/1/ 169 Book value 1/1/ 87 Others 4.3 Impairment 57 Impairment 0 * 5 * 6 Book value 31/12/ 108 Book value 31/12/ 93 * Additions, disposals, reclassifications or depreciations Page 25

26 Investor relations team Andreas Wollein Head of Group Finance, M&A and Investor Relations T +43(0) andreas.wollein@verbund.com Martin Weikl Investor Relations Manager T +43(0) martin.weikl@verbund.com Stefan Wallner Investor Relations Manager T +43(0) stefan.wallner@verbund.com Page 26