Company Presentation March 2019
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EVN – energy company and environmental services provider March 2019 2 Agenda EVN at a glance Business development FY 2017/18) Back-up information Company presentation, March 2019 , Integrated .usiness model as .asis for our value chain 0eneration Networks 1rade and Customers 2) Environment 1hermal 1,771 M2) 3enewa.le 591 Electricity supply Electricity ,.4m) Drinking water M2) 1) 142,105 km) supply Electricity Natural gas 0.,m) Natural gas 2astewater Natural gas 7eating 0.1m) 14,012 km) treatment Storage 7eat 7eat Drinking water 0.5m) 1hermal waste Natural gas 875 km) utilisation 1) 1hereof ,,5 M2 wind power as of Decem.er 2018) 2) Num.er of customers in .rackets Foreign markets in the energy .usiness : Bulgaria: Electricity distri.ution networks, electricity supply, generation and heat : Macedonia: Electricity distri.ution networks, electricity supply and generation : Selected activities in 0ermany, Croatia and Al.ania Company presentation, March 2019 4 7igh share of regulated and sta.le .usiness EU3 571.8m 73% of EBITDA from regulated and stable business in FY 2017/18) Regulated business in Lower Austria Electricity distri.ution networks Natural gas distri.ution networks ,8% Stable business in Lower Austria 2ind generation 2ater supply 2.,%) 7eat 5.9%) 2aste incineration 4.0%) 19% Ca.le 1V and telecommunication 4.5%) Earnings contri.ution from Burgenland 7olding 1.7%) Regulated business in SEE 15% Electricity distri.ution networks Unregulated business Electricity supply 0eneration 7eat Energy trade and supply 27% International environmental projects Storage of natural gas as well as E&A of oil and natural gas EBI1DA share in 2017/18 Company presentation, March 2019 5 Sustaining high share of sta.le income from regulated network .usiness Investments in electricity networks : New construction or eBpansion of transformer stations : EBpansion of 110 kV power lines : Smart meter Investments in gas networks : 3eplacement of AVC gas pipelines C future 3AB growth ,-4% p.a. Company presentation, March 2019 5 3egulated .usiness in Austria Network Electricity Natural gas Comments 3egulatory authority E-Control 0m.7 E-Control 0m.7 Start of the regulatory period 01.01.2019 01.01.2018 NeBt regulatory adjustment 01.01.2024 01.01.202, Adjustment of 2ACC and productivity factors Duration of the regulatory period 5 years 5 years 3egulatory method 3evenue caps 3evenue caps Annual investments are added to the 3AB in the 3AB EU3m) Annually adjusted Annually adjusted following year − New 3AB as of 2019): − New 3AB as of 2018): 5.20% 5.20% Set for length of regulatory period 2ACC pre-taB, nominal) − EBisting 3AB of DSO − EBisting 3AB of DSO with 7igher 2ACC for eBisting 3AB of DSO with a.ove- with average average efficiency: average efficiency such as EVN/NetE NF) efficiency: 4.88% 4.88% 0ains from cost reductions remain with the 0eneral productivity factor 0.95% 0.57% company during the regulatory period Network operator price indeB consists of consumer Inflation Annual adjustment Annual adjustment price indeB and wage increase indeB Company presentation, March 2019 7 Dynamic eBpansion of windpower capacity in Lower Austria Alanned eBpansion of wind capacity M2) 1) : Aipeline of approved projects : Feed-in tariffs in Austria fiBed for 1, years 1) Su.ject to appropriate framework conditions Company presentation, March 2019 8 Clear and prudent strategy for unregulated activities 1hermal plants as reserve capacity : Strong demand for network sta.ilisation in Austria and southern 0ermany : Contract with transmission grid operator Maintain strong anchorage in domestic supply .usiness : EVN .rand stands for high Huality energy products and services : Supply security and focus on customers form EVNIs key promises Company presentation, March 2019 9 Strong market position in Austria EVN‘s electricity market share Electricity market shares Gas market shares in Gas market shares in in Lower Austria in the Austrian market Lower Austria the Austrian market EVN: 9% EVN: 6% EVN: 33% EVN: 66% EAA & Aartners: 17% EAA & Aartners: 8% Market size: 8.6 TWh 63 TWh 17 TWh 97 TWh Churn rates in Lower Austria %, incl. tariff changes .y customers) Market shares refer to FY 2017/18J EVN holds a 45% stake in EAA & Aartners Source market shares: E-Control 2018, annual report and company num.ers Source churn rates: E-Control, market statistics – consumer attitude/churn rates electricity and gas according to network areas Company presentation, March 2019 10 Continuous efforts to achieve further operating improvements in SEE Improvement of grid efficiency Commitment to supply security Investment strategy for SEE : EBpansion and upgrading of network infrastructure to continuously reduce network losses : 3eplacement of metres to further improve collection rates Ongoing efforts for adeHuate regulatory framework and electricity market design Company presentation, March 2019 11 Environmental services .usiness adds sta.ility and further diversifies EVNIs .usiness miB Sta.le earnings contri.ution from activities in Lower Austria : Largest regional drinking water supplier supra-regional pipeline networks and local water supply networks) International project .usiness : Alanning and construction of plants for drinking water supplies, wastewater disposal and thermal waste incineration : Operation and financing upon reHuest) : 5 projects under construction 1) 1) As of ,1.12.2018 Company presentation, March 2019 12 Significant contri.ution to EVNKs net profit from strategic investments Ver.und A0 12.5,% : L1 electricity producer in Austria and EUR 18.4m 1) L2 hydropower producer in Europe with 8.2 02 installed capacity 7,.5,% Burgenland 7olding A0 EUR 11.6m 1) : 7olds a 49% stake in Energie Burgenland L1 green energy producer in Austria, regional network and energy 50.0,% distri.utor) EUR 39.8m 1) 3A0 Austria A0 : L2 oil & gas producer in Austria, one of 1) Contri.ution to EVNIs net profit in FY 2017/18 the largest gas storage operators in CE with 5.8.n mM working gas capacity Company presentation, March 2019 1, Ney messages to our shareholders 7igh share of earnings from regulated and sta.le .usiness Continuous strengthening and eBpansion of domestic regulated and sta.le activities : Networks, wind generation, heating, drinking water supply Benefit from solid home market : Maintain strong anchorage in the supply .usiness despite growing competition 3o.ustness of integrated .usiness model Commitment to sta.le dividend policy Company presentation, March 2019 14 Outlook for 2018/19 Development of 0roup net result 0roup net result for 2017/18 positively influenced .y valuation of hedges EBpected 0roup net result for 2018/19 in the range of EU3 150m to EU3 180m Factors that could influence the 0roup net result include : 3egulatory .ackground : Aroceedings currently in progress in Bulgaria : 3emaining proceeding over the 2alsum 10 power plant project : Arogress on activities in Moscow Company presentation, March 2019 15 EVN share Shareholder structure 2017/18 2016/17 Dividend per share EU3) 0.44 O 0.0, 1) 0.44 O 0.0, 1) as of ,1 Decem.er 2018) Aayout ratio %) ,2.8 ,,., Dividend yield %) 2.8 ,.5 31.12.2018 Share price EU3) 12.58 Market capitalisation EU3m) 2,25, 1) Bonus dividend of EU3 0.0, per share According to federal and provincial laws, the Arovince of Lower Austria is reHuired to hold a stake of at least 51% in EVN Company presentation, March 2019 15 Agenda EVN at a glance Business development FY 2017/18) Back-up information Company presentation, March 2019 17 Ney financials FY 2017/18) FY 2017/18 O/– Decline in revenue EU3m % Revenue 2,072.5 -5.5 : 1hermal electricity generation .elow high EBITDA 571.8 -5.9 prior year level and reduced natural gas Depreciation and amortisation -258., 1.5 trading activities Effects from impairment tests -20.5 81.7 EBIT ,92.9 1,., : 1emperature-related drop in revenue in Financial results -,7.2 -7,.9 South Eastern Europe Group net result 254.5 1.4 : Decline from international project .usiness Lower EBI1DA Net cash flow from operating activities 50,.5 18.5 : Decreased operating eBpenses 1) ,55.4 17., Investments : Increase in results from eHuity accounted Net de.t 95,.7 -20.5 investees due to valuation effects of hedges % at EVN N0 2) EHuity ratio 52., ,.5 Improvement in EBI1 and 0roup net result : Arior year influenced .y impairment losses 1) In intangi.le assets and property, plant and eHuipment 2) Changes reported in percentage points Company presentation, March 2019 18 Ney energy .usiness indicators FY 2017/18) 2017/18 O/– Increased renewa.le generation 02h % Electricity generation volumes 5,525 -8.8 : 0ood water flows and continuous 3enewa.le energy sources 2,21, 5.7 eBpansion of wind power capacities 1hermal energy sources ,,,1, -15.5 Network distribution volumes Decline in thermal production Electricity 22,520 -0.4 Natural gas 17,125 -8.8 1emperature-related decrease in Energy sales volumes to end network distri.ution and energy customers sales volumes Electricity 18,41, -0.7 thereof Austria and 0ermany 7,080 9.0 thereof South Eastern Europe 11,,,, -5.0 Natural gas 5,178 -9.9 7eat 2,219 -,.2 Company presentation, March 2019 19 EBI1DA development .y segments FY 2017/18) Segment 2017/18 +/– Comment EU3m % 7igher renewa.le electricity generationJ 0eneration 12,.7 19.2 supply of entire thermal capacity 1.090 M2) to secure network sta.ility 1emperature-related decline in natural gas and heat sales volumesJ Energy 80.8 -20.5 valuation effects from hedges Networks 25,.4 -1,.5 Negative price and volume effects 1emperature-related decline in network and energy sales volumesJ South East Europe 104.5 -,7.5 prior year positively influenced .y non-recurring effect from settlement with Bulgarian NEN Less dynamic development of international project .usinessJ Environment ,0.1 - prior year affected .y negative non-recurring effect valuation allowance on inventories) Company presentation, March 2019 20 Agenda EVN at a glance Business development FY 2017/18) Back-up information Company presentation, March 2019 21 Ney financials P.