VERBUND Results quarter 1/2015 Vienna, 06/05/2015
Results quarter 1/2015 Page 3
At a glance Influencing factors Water supply 3% above long-term average and 10%-points above Q1/2014 Reduction of average achieved contract prices from 39.1 to 35.5 /MWh Sale of French CCGTs, Sorgenia exit and sale of Bulgarian wind farm successfully finalized Programme to reduce costs and increase efficiency continued Results and cash flows EBITDA 217.8m (+5.2%) Group result 63.4m (+54.9%) Operating cash flow 166.1m ( 4.9%) Free cash flow after dividend 266.3m (Q1/2014: 1.4m) Outlook 2015 Outlook 2015 confirmed: EBITDA approx. 770m, Group result approx. 180m Dividend policy: approx. 50% of adjusted Group result Page 4
Increased production from all sources Hydro coefficient (run-of-river) 1.29 0.96 0.93 0.90 0.90 0.91 long-term average Generation from annual reservoirs/ GWh 454 410 308 334 310 274 January February March Q1/2014 (0.93) Q1/2015 (1.03) January February March Q1/2014 (1,035 GWh) Q1/2015 (1,054 GWh) Electricity supply +1.690 GWh (+14.3%) Electricity supply/ TWh Hydropower: +497 GWh (+8.8%) Generation from storage power: +19 GWh Thermal Power: +357 GWh (+54.4%) Pont-sur-Sambre and Toul 132 GWh CCGT Mellach +115 GWh Wind/Solar: +55 GWh (+24.9%) Purchase from third parties: +780 GWh Hydro power* 6.2 Thermal power 1.0 Wind/solar 0.3 Purchase 6.1 * volumes for holders of interests: 0.8 TWh (at cost) Page 5
Declining contract price; higher sales volume Hedging volumes 1 2015/ TWh FY 2014: 39.1/MWh Sales customers/ TWh Total sales equals to 12.6 TWh 38.1 37.7 36.5 36.2 36.1 35.5 Resellers +18% 6.0 Traders +23% 4.4 25.8 23.1 17.3 12.9 8.0 5.1 Clients 4% 2.2 Sales countries/ TWh Total sales equals to 12.6 TWh 2.5 5.7 9.2 13.8 18.6 21.5 Austria +10% 6.7 Germany +8% 4.4 France +146% 1.3 31/12/13 31/3/14 30/6/14 30/9/14 31/12/2014 31/3/2015 Romania +23% 0.2 Achieved contract price Hedged volumes Others -51% 0.1 Open volumes 1 Own production excluding volumes for holders of interests (at cost), wind/solar and volumes resulting from pumping Page 6
Key financial figures EBITDA/ m Group result/ m +5% +55% 207 218 63 41 Cash flow/ m Operating CF Free CF -5% 175 166 266 Q1/2014 Q1/2015 Q1/2014 Q1/2015 EBITDA, EBIT margin/ % Additions/ m EBITDA Marge EBIT Marge -61% 94 30.4 30.6 to tangible assets (without business combination) 1 Q1/2014 Net debt/ m -5% 4,060 Q1/2015 3,867 37 16.3 17.4 Q1/2014 Q1/2015 Q1/2014 Q1/2015 31.12.2014 31.03.2015 Page 7
Financial liabilities Debt maturity profile/ m 884 739 43 JPY bond 682 Financial liabilities/ bn -13% 3.8 3.3 696 298 252 242 53 38 33 2015 2016 2017 2018 2019 2020 2021 2022 >2022 Q1/2014 Q1/2015 Financial liabilities Book value Financial liabilities: 3,262m Financial ratios Duration: 4.3 years Effective interest rate: 3.86% p.a. Uncommitted lines of credit: 607m Syndicated loan: 500m Interest mix 93% fixed interest rate 7% floating interest rate Currency mix 99% EUR 1% JPY Rating Standard & Poor s: BBB+/stable outlook Moody s: Baa1/negative outlook Page 8
Outlook Payout ratio 2015: approx. 50% based on adjusted Group result of 180m Earnings outlook 2015: EBITDA of around 770m and Group result of around 180m based on an average generation from hydropower Hedging volumes 1 2016/ TWh 34,6 34,6 34,0 Sensitivities 2015 A change of 1% (generation from hydropower/ windpower) or 1/MWh (wholesale price) either way would be reflected as follows in the operating result for 2015, other things being equal: Greater or less generation from hydropower: +/ 6.6m Greater or less generation from windpower : +/ 0.4m Wholesale price: +/ 5.1m 24,6 23,4 1,2 30/9/2014 Achieved contract price Open volumes 2,4 31/12/14 Hedged volumes 19,8 1 Volumes: Own production excluding volumes for holders of interests (at cost), wind/solar and volumes resulting from pumping 6,0 31/3/2015 Page 9
Current developments Page 10
Thermal restructuring Update Exit from thermal portfolio abroad finalized Sale of French CCGTs: closing in Q1/2015 Sorgenia exit: closing in Q1/2015 Thermal portfolio Austria Closure of Dürnrohr hard coal power plant currently under implementation Mellach hard coal power plant will remain in operation to supply district heating to the city of Graz CCGT Mellach injunction by Styrian court further procedure pending Application for the termination of antitrust behaviour filed for the gas supply agreement outcome expected 2016 Gas procurement and payments to EconGas stopped Expected results contribution excl. one-offs France m 2014A 2015E EBITDA -21 0 EBIT -21 0 Group result -38 0 Expected results contribution excl. one-offs Austria m 2014A 2015E EBITDA -75-35 EBIT -79-39 Group result -82-42 Page 11
Cost cutting programme Gradual reduction of 500 FTEs until 2020 by means of partial retirement, package offers and natural churn without replacement Cost cutting targets and results/ m 60 Immediate reduction of cost of maintenance and operations via strictly prioritized asset management and maintenance strategy 30 30 40 70 65 Immediate reduction of other operating expenses via zero base budgeting and tight cost control processes 2013 2014 2015 Strict review of our project portfolio will further reduce the cost of feasibility studies Initial target Actuals / Expected (2015) Page 12
Growth capex 2015 2017: 433m 1 Hydropower Investment volume 71m 430 MW 2 pumped storage power plant Reißeck II (COD: 2015) New construction of run of river power plant Töging in Germany (additional capacity of 25 MW (COD: 2021) Efficiency increase measures 64m (part of maintenance capex) Additional 69 MW, 90 GWh Wind power Investment volume 19m 21 MW in Austria (COD: 2015) Grid Investment volume 334m 380-kV Salzburg line, 220-kV replacement construction 1 includes 10m of investments in participations (e-mobility etc.) 2 VERBUND s share of total capacity: 284 MW hydro storage Page 13
Details to the capex plan Growth capex/ m (total of 433m) 168 137 128 18 5 19 48 Hydropower 93 121 119 Wind power Grid 7 2 1 Others 2015 2016 2017 Maintenance capex/ m (total of 436m) 143 153 140 110 99 95 4 29 1 1 53 44 Hydro Thermal Grid 2015 2016 2017 Page 14
Appendix Page 15
Income statement (continuing and discontinued business) m Q1/2014 Q1/2014 Q1/2014 Q1/2015 continuing discontinued Total Revenue 680,4 670,8 9,6 712,1 Electricity revenue 555,6 546,0 9,6 579,4 Grid revenue 87,5 87,5 0,0 91,6 Other revenue 37,3 37,3 0,0 41,2 Other operating income 12,4 12,3 0,0 14,4 Expenses for electricity purchases & use of fuels -356,6-347,4-9,2-386,4 Other operating & personnel expenses -129,0-121,9-7,1-122,1 Depreciation & amortisation -96,3-96,3 0,0-94,0 Effects from impairment tests -0,1-0,1 0,0 0,0 EBIT 110,7 117,3-6,7 123,8 Result from equity interests & oth. interests 7,9 7,9 0,0 7,6 Interest income/expense -45,5-41,9-3,6-35,5 Other financial result -3,1-3,3 0,2-1,1 Effects from impairment tests 0,0 0,0 0,0 0,0 Effects from business combination 0,0 0,0 0,0 0,0 Financial result -40,8-37,3-3,5-29,0 Taxes -16,5-16,5 0,0-22,0 Group result 40,9 51,1-10,1 63,4 Minorities 12,4 12,4 0,0 9,4 Earnings per share ( ) 0,12 0,15 0,18 Page 16
Balance sheet (short version) m 31.12.2014 31.3.2015 Change Non-current assets 11.167 11.162 0% Current assets 1.071 1.135 6% Assets held for sale 10 0-100% Total assets 12.247 12.298 0% Equity 5.281 5.362 2% Non-current liabilities 5.394 5.462 1% Current liabilities 1.573 1.474-6% Total liabilities 12.247 12.298 0% Page 17
Cash flow statement (short version) m Q1/2014 Q1/2015 Change Cash flow from operating activities 175 166-5% Cash flow from investing activities -147 73 Cash flow from financing activities 86-33 -139% Change in cash and cash equivalents 113 206 82% Cash and cash equivalents at the end of the period 196 248 26% Page 18
Investor relations team Andreas Wollein Head of Group Finance and Investor Relations T +43(0)503 13-52614 andreas.wollein@verbund.com Martin Weikl Investor Relations Manager T +43(0)503 13-52616 martin.weikl@verbund.com Stefan Wallner Investor Relations Manager T +43(0)503 13-52617 stefan.wallner@verbund.com Page 19