EVN Company presentation
September 2012 2
Agenda
EVN at a glance Investments and projects Financial performance Q. 1–3 2011/12 Financial performance 2010/11 EVN at a glance 3
EVN at a glance
Profile Key metrics (2010/11) - Leading integrated Energy and Environmental Generation Services company serving customers in Lower Austria, SEE and CEE - Electricity generation capacity: 1,873 MW (thermal: 1,434 MW; renewable: 439 MW) - Key business areas: electricity, gas, heating, drinking water supply, wastewater treatment, - Production mix: 77% thermal, 23% renewable waste incineration - Coverage ratio: 16.3% - Group net profit (2010/11): EUR 189.7m (–8.4%) Networks - Net cash flow from operating activities - Electricity: 134,308 km (2010/11): EUR 522.0m (+4.6%) - Gas: 13,630 km - Employees (2010/11): 8,250, ~70% abroad - Heating: 602 km - Rating: A3, stable (Moody’s) BBB+, stable (Standard & Poor’s) Energy supply - Customers: 3.7 million Contribution by business segments - Sales volume: 28.8 TWh Revenues1) EBITDA1) Environment Generation Environmental Generation 3% Network al Services 7% Environmental Services Services Infrastructure 14% 12% Austria - 0.5 million drinking water customers in Lower Austria 16% Energy - Waste incineration plants of 500,000 tons p.a. in Lower Supply Austria and 360,000 tons p.a. in Moscow Energy Supply EUR 2,729.2m SEE EUR 471.4m 18% Network SEE Infrastructure - More than 93 drinking and wastewater plants servicing 29% Austria 39% about 14 million customers throughout Europe
Energy Trade Energy and Supply Trade 40% and Supply 1) Pre consolidation adjustments 22% EVN at a glance 4
EVN at a glance – active in 21 countries
Key geographic areas - Lower Austria and Germany - South Eastern Europe (SEE) - Central and Eastern Europe (CEE)
Activities - Lower Austria: Energy business: full integration Environmental services business: drinking water supply, wastewater treatment, waste incineration - SEE: Electricity and heat distribution as well as gas operation - CEE: drinking water supply, wastewater treatment and waste incineration EVN at a glance 5
Business segments
Generation Energy Supply South East Europe - Production (2010/11): 3,000 GWh - Electricity distribution and supply business in BG, MK - Efficient and flexible thermal fleet (coal, gas, oil) - ~13 TWh sales volume - Sizeable renewable energy portfolio - Heat generation and sales in Bulgaria - Projects in Austria, Albania and Bulgaria - Project to build/operate natural gas network in Croatia
Network Infrastructure Austria Environmental Services - Electricity and gas distribution networks in Lower - AT: drinking water supply, wastewater treatment, Austria waste incineration - Cable TV and telecommunication networks in - International project business: drinking water supply, Lower Austria and Burgenland wastewater treatment, waste incineration - 18 Central and Eastern and SEE countries
Energy Trade and Supply Strategic Investments and Other Business - Sourcing of electricity and primary energy - VERBUND - Sales to end customers in AT and GER -RAG - Trading on wholesale markets - Burgenland Holding - Heat generation and sales in AT - ~15–16 TWh sales volumes p.a. EVN at a glance 6
EVN – strategic priorities
1 Selective generation asset growth Increase coverage ratio from 20% to 40%–60% Increase renewable generation from 30% to 50%
2 Market leadership in Austrian More than 60% of revenues and more than 80% supply business of EBITDA from stable core Austrian business Maintain high level of efficiency and profitability of regulated operations
3 Required proven upside in SEE Constant review of profitability for SEE region Continue improvements in SEE
4 Track record in environmental Competitive business model through integration services business Successful participation in more than 90 projects
5 Capitalise on strategic investments Review of strategic stakes with focus on cash flow contribution and multi-utility strategy
6 Capital discipline and credit rating Focus on enhanced credit standing Shareholder returns with review of CAPEX and ROI by business segments EVN at a glance 7
Implementation of strategic goals in 2010/11 and 2011/12
Expansion of renewable energy in Lower Austria and abroad - Wind: Four wind parks in Lower Austria (54 MW) Kavarna, Bulgaria (16 MW) - Hydro: Acquisition of 13% of VERBUND Innkraftwerke GmbH in Bavaria Capacity increase of existing small hydro power plants in Lower Austria Clear majority (70%) in the hydropower project “Gorna Arda” in Bulgaria Start of the trail operations of the first part of Ashta in Albania (25 MW) - Photovoltaic/biomass: Expansion of biomass capacity in the home market (> 60 in Austria) Completion of EVN’s largest photovoltaic plant in Bulgaria
Key investments in security of supply - Start of operation of the gas transportation pipeline “Südschiene” and construction begin of “Westschiene” in Lower Austria - Construction begin of the gas grid expansion in Zadar, Croatia - First household customers connected to EVN gas grid on June 1st, 2012 - Start-up of the cogeneration plant in Plovdiv, Bulgaria EVN at a glance 8
1 Increase coverage ratio and diversify generation portfolio
Coverage ratio Increase coverage ratio long-term to 70% 40%–60% on Group level Market entrance 60% Bulgaria - Hold coverage ratio in CWE 50% Market entrance 40% Macedonia - Increase coverage ratio in SEE 69% 30% 56% 40%- 20% 40% 29% 60% 21% 10% 19% 18% 18% 16% Diversify generation portfolio 0% 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 long- - Increase renewable generation term up to 50% of output Generation mix - Focus on wind in Austria and CWE 100% 23% 80% 32% 32% 36% 36% 35% - Focus on hydro in SEE 50% 60%
40% 77% 68% 68% 64% 64% 65% 20% 50%
0% 05/06 06/07 07/08 08/09 09/10 10/11 long-term
Conventional power generation Renewables EVN at a glance 9
1 Ongoing projects to double generation output by 2020
2.845 119 192 53 173 25 410 84 128
1.873
1.820 2.746 1.583 1.608 1.692 1.410 1.000 (Pro-rata installed capacity, MW) capacity, (Pro-rata installed
Status quo 2010/11 Walsum, Wind parks 1) Ashta, Gorna Arda, Devoll, Others 2) Germany (partly financed) Albania Bulgaria Albania (financed) (financed)
Project Walsum Wind parks1) Ashta Gorna Arda Devoll Others2)
Fuel type Hard coal Wind Hydro Hydro Hydro Various Pro-rata investment (EURm) 402 173 105 350 400 n/a Expected COD 2013 2011/13 2013 2019 2016/19 n/a
1) Includes Austrian wind parks as well as Kavarna wind park 2) Contains smaller hydro power plants in Austria, cogeneration power plant in Plovdiv, Bulgaria EVN at a glance 10
2 Majority of revenues and EBITDA generated in domestic and regulated businesses
Revenue breakdown by segments 2010/111) Geographic revenue breakdown2)
Generation 3.000 Environmental 2,752.1 2,729.2 3% Network 2,727.0 Services Infrastructure 2.500 32% 31% 31% 12% Austria International: 40% 16% _ 2.000 6% 7% 9%
EURm 1.500
1.000 Energy Supply 62% 62% 60% SEE 500 29% Energy Trade 0 and Supply 08/09 09/10 10/11 40% Austria CEE SEE Share of regulated EBITDA3) Geographic EBITDA breakdown2)
500 471.4 500 471.4 450 416.6 416.6 373.3 373.4 24% 400 35% 400 Regulated: 53% 21% 350 39% 35% 20% 300 300 250 18% _
EURm 200 18% 17% EURm 200 150 76% 80% 79% 100 46% 47% 44% 100 50 0 08/09 09/10 10/11 0 08/09 09/10 10/11 Unregulated business Regulated international business Austria International Regulated domestic business 1) Pre consolidation adjustments 2) International business includes Energy Supply South East Europe and the international project business of the Environmental Services Segment 3) The regulated domestic business includes mainly the Network Infrastructure Austria (excl. cable and telecom activities) and the regulated international business Energy Supply South East Europe EVN at a glance 11
2 Regulated business in Austria
Network Electricity Gas Comments
Reset date 1 Jan 2014 1 Jan 2013 Next reset of WACC and (Regulatory period length) (4 years) (5 years) X factor Capex retrospectively RAB (EUR m) Not public Not public monitored each year Set for length of regulatory WACC (pre-tax, nominal) 7.0% 7.0% period X factor the same for all X factor – sector (Xgen) 1.95% 1.95% companies Additional X factor is company X factor – company specific 0.25% 0.00% specific
Inflation Set annually Set annually Network Operator Price Index
50% of the efficiency gains during one regulatory period are passed on to end customers.
Source: E-Control 2010, company information EVN at a glance 12
3 Regulated business in SEE
Electricity Bulgaria Macedonia SEWRC ERC Regulatory authority (State Energy and Water (Energy Regulatory Regulatory Commission) Commission) Reset date 1 Jul 2013 1 Jan 2015 (Regulatory period length) (5 years) (3 years)
RAB (EUR m) Not public Not public
WACC (pre-tax, nominal) 12.0% 6.7265%
Accepted grid losses 15.0% 14.0%
X factor Yes No
Source: Regulators in Bulgaria (SEWRC) and in Macedonia (ERC) EVN at a glance 13
3 Regulated business in South Eastern Europe
EVN buys energy from public provider at Bulgaria regulated prices and sells to end-customers at Market entry in 2005 regulated prices Bulgaria:
Plovdiv - District heating plant in Plovdiv - Sales volumes (2010/11): 8,163 GWh
Macedonia: Macedonia - Entire electricity distribution network run by EVN Market entry in 2006 - Sales volumes (2010/11): 5,233 GWh Croatia: Skopje - Project to build and operate natural gas network in Zadar, Sibenik and Split - Customer potential: 130,000 households EVN at a glance 14
3 Upside potential from SEE market development
Illustrative electricity sales Electricity prices for Improvement of volumes per customer1) households (EUR cent/kWh) grid efficiency
25 120%
100% 20 100% 80% 80% 15
60% 54% 24% 10 22% 21% 17% 17% 18% 40% 15% 16% 14% 13% 13% 12% 12% 5 20%
0% 0 04/05 05/06 06/07 07/08 08/09 09/10 10/11
EU-27 Grid losses, BG Grid losses, MK Austria Bulgaria Germany EVN in Bulgaria Macedonia EVN in Austria Macedonia Czech Republic EVN in Lower 2008/09 2009/10 2010/11
1) In %, basis: Lower Austria = 100% EVN at a glance 15
4 Competitive business model through integration of environmental services business
Successful participation in 93 projects in 18 countries since 1983
Strong demand for infrastructure projects set to continue
Contract volume of EUR 1.3bn with attractive return potential from international projects
Underpinned by stable contributions from drinking water supply and wastewater treatment businesses EVN at a glance 16
5 Capitalising on strategic investments and at-equity stakes
12.63% # 1 electricity producer in Austria with 8.6 GW installed capacity
50.03% # 2 oil and gas producer in Austria, one of the largest gas storage operators in Central Europe with 5bn m³ working gas capacity by 2011
73.63% # 1 green energy producer in Austria with 242 MW installed capacity and local gas distributor
13.0% VERBUND- 13 river-run plants with 312 MW installed capacity Innkraftwerke GmbH (EVN stake: 41 MW)
16.51% # 1 distributor and business-to-business natural gas supplier in Austria with export quota of above 50% EVN at a glance 17
5 Current contribution to net profit from investments
130 116.3 Strategic investments provide a significant contribution to EVN’s profit 110 25.0 94.0 - RAG and VERBUND are the main 89.4 contributors 90 23.1 22.1 - Income from RAG increased by 36% from EUR 44.3m in 2009/10 to EUR 60.4m in 70 50.1 _ 9.4 2010/11
EURm 42.1 - Contribution from VERBUND decreased 50 due to lower dividend payment in 2010/11 - Contribution from Others decreased due 30 60.4 to impairment for the hydropower project 44.3 32.2 Ashta (EUR –21.3m) 10
-3.4 -3.1 -2.5 -10 08/09 09/10 10/11
RAG BEWAG, BEGAS VERBUND Others EVN at a glance 18
1) 5 RAG – Rohölaufsuchungs AG
Shareholder structure Revenue breakdown by segments
E.ON 450 381.2 Ruhrgas 400 339.8 E&P 1% EVN 350 50% GmbH 1% 18% 30% 300 22% 250 31% 23% 200 EURm 150 Steirische 100 54% 50% Gas- Wärme 50 GmbH 0 1) Salzburg 10% 2010 2011 AG 10% Other revenues EBITDA, EBIT and Net profit Oil sales & stockpiling of CER 200 Gas storage 180 Gas sales 160 179.2 140 149.9 120 100
EURm 80 132,7 60 111,0 96,7 40 79,1 20 0 2010 2011
EBIT EBITDA Net profit
1) Growth in of 51.6% in gas storage business from EUR 76m to EUR 116n based in substantial increase of capacities by start of Haidach and 7fields (now total capacity volume of about 5bn m³) 2) CER = Compulsory Emergency Reserves EVN at a glance 19
1) 5 RAG – Rohöl-Aufsuchungs AG
Production statistics 2011 Core areas of business - Oil and natural gas E&P Gas production million m³ 270.5 - Gas storage Gas sales2) million m³ 695.0 Concessions Gas reserves million m³ 4,300 - Austria (5,414 km²) Oil production t 124,190 - Germany (3,136 km²) - Hungary (7,022 km²) Oil reserves t 877,000 - Poland (2,951 km²) Oil tank storage capacity t 260,000 Storage facilities (Salzburg, Upper Austria) - Haidach (JV with Gazprom and Total storage capacity Wingas; 2,656 million m³) Working gas - Aigelsbrunn (100 million m³) volume million m³ 5,001 - Puchkirchen (1,080 million m³) - 7Fields (JV with E.ON; 1) Source: RAG 1,165 million m³) 2) Sales of produced, swapped and traded gas EVN at a glance 20
6 Strengthening of liquidity position
Capital increase of EVN AG by 10% to EUR 330m in October/November 2010 - Net proceeds of EUR 175.5m from capital increase
Issuance of a corporate bond in October 2011 - EUR 300m - Replacement of existing corporate bond - Tenor: 10.5 years, Coupon: 4.25%
Issuance of two private placements in March 2012 - EUR 100m and EUR 25m - Tenor: 20 years, Coupon: 4.125%
Refinancing syndicated revolving credit facility of EUR 500m in June 2012
Financial flexibility through committed credit lines of EUR 175m (as per June 30th, 2012) EVN at a glance 21
6 Solid capital structure Increase in net debt and gearing ratio due to and rating supports ongoing investments in Austria and SEE Net debt can be easily covered by financial 1.739,3 1.800 100% assets available for sale 1.579,2 1.600 1.458,2 Financial policy going forward based on 1.400 80% selected key ratios (on an unadjusted basis): 1.200 60% _ 1.000 - Equity ratio >40% (30.9.2011: 46.2%) 800 56%
EURm 50% 40% 600 48% - Net debt coverage (FFO) ≥ 23%
Gearing (%) (30.9.2011: 38.2%) 400 20% - Interest cover (FFO) ≥ 5x 200 (30.9.2011: 7.6x) 0 0% 09/10 10/11 Q. 1-3 11/12 - EVN intends to increase its dividend payout ratio up to 40% mid-term and to above 40% longer- Net financial debt Gearing term
Rating Dividend per share 0,5 0.41 100% 0.37 0.40 S&P: BBB+ / stable 0,4 80% Moody’s: A3 / stable 0,3 60%
EUR 0,2 40% EVN aims at preserving a competitive 38.5% 0,1 33.9% 34.7% 20% investment grade credit rating ratio Payout 0,0 0% 08/09 09/10 10/11
Dividend per share Payout ratio EVN at a glance 22
6 Debt maturity profile
1.400 1,283.0 Issue of a new corporate bond
1.200 - EUR 300.0m (10.5 ys; coupon 4.25%) 1.000 - Redemption of corporate bond 733,0 (EUR 257.4m) 800
__ Issue of private placements
600 EURm - EUR 125.0m 424.0 (20.0 ys; coupon 4.125%) 400 Refinancing of syndicated loan 235,0 550,0 200 130.0 103.0 - EUR 500.0m (5 ys) 20.0 189,0 Committed bilateral credit lines of 0 11/12 12/13 13/14 14/15 >2015 EUR 175.0m
Bank debt Bonds Share of fixed interest debt: 76.0% Average financing costs: 4.2% EVN at a glance 23
Development of electricity and primary energy prices
90
80 forward 70
60 electricity (base) 50
40 crude oil
EUR/MWh 30 gas procurement
20 coal 10
0 2007 2008 2009 2010 2011 2012 2013
Slightly decrease in electricity and coal prices Increase of gas prices Average price in euros for crude oil (Brent) at the level of the peak in 2008 EVN at a glance 24
Outlook 2011/12
Assumptions EVN‘s expectations - Stable end customers business - Operating results can match prior-year level development - Financial results above previous year’s level - Negative spreads between primary energy and electricity prices - Group net profit comparable to prior-year level - Stable order book in Environmental Services segment and no negative EVN‘s ambitions impact due to economic downturn - Competitive investment grade credit rating Key ratios (on an adjusted basis): Equity ratio: >40% Net debt coverage (FFO): >23% Interest Cover (FFO): >5x - Capex discipline - Cash contribution from South Eastern Europe and EVN‘s investments - Attractive dividend policy EVN at a glance 25
Financial figures
Q. 1–3 EURm 2011/12 2010/11 2009/10 2008/09 2007/08 Revenue 2,256.8 2,729.2 2,752.1 2,727.0 2,397.0 EBITDA 416.2 471.4 416.6 373.4 362.3 Group net profit 222.8 189.7 207.0 177.9 186.9 Net cash flow from operating activities 275.3 522.0 499.3 335.3 382.6 Investments1) 184.9 415.7 394.0 415.7 415.6 Balance sheet total 6,894.7 6,870.4 6,731.2 6,695.4 6,636.3 Equity 3,120.4 3,176.0 3,025.3 3,127.2 3,208.5 Equity ratio 45.3% 46.2% 44.9% 46.7% 48.3% Net debt 1,739.3 1,579.2 1,458.2 1,378.2 1,131.3 Gearing 55.7% 49.7% 48.2% 44.1% 35.3%
1) In intangible assets and property, plant and equipment 26
Agenda
EVN at a glance Investments and projects Financial performance Q. 1–3 2011/12 Financial performance 2010/11 Investments and projects 27
Investments Q. 1–3 2011/121)
260 246.5 1.0 240 Investments down 25.0% 38,3 220 184.9 200 Key investments 3,1 180 15,6 78,6 - Generation: 160 Wind parks in Lower Austria _ 140 69,3 120 9,3 - Network Infrastructure Austria: EURm 100 Construction of Westschiene 9,0 80 79,1 - Energy Trade and Supply: 60 Expansion of heat networks and biomass 74,1 40 capacities in Lower Austria 20 40,2 13,8 - Energy Supply South East Europe: 0 Q. 1-3 10/11 Q. 1-3 11/12 + Cogeneration plant in Plovdiv, Bulgaria + Expansion of the network infrastructure and Strategic Investments and Other Business Environmental Services replacement of metres in SEE Energy Supply South East Europe + Investments in natural gas network in Croatia Energy Trade and Supply Network Infrastructure Austria Generation - Environmental Services: Cogeneration plant in Ljuberzy, Moscow
1) In intangible assets and property, plant and equipment Investments and projects 28
Strategy to double wind capacity by 2015
> EVN’s focus on Lower > Strong negotiating power Generate stable, regulated Austria vis-à-vis turbine suppliers cash flows on a long-term basis > 190 MW installed capacities > Wind park IRR (after tax) 7%–8% Austrian Green Electricity Act Eastern part of Lower Austria =
Legal framework until 2011 Amendment 2012 Attractive on-shore wind region
> Off-take obligation for new > Legal goal to increase Austrian > One of the most attractive regions in plants at fixed feed-in tariffs wind generation capacities from Europe (due to strong wind conditions (13 years) 1,011 MW to 2,000 MW (2020) in the plain Danube and Pannonian area) > Eligibility of new > Increase of annual feed-in tariff renewables projects is constraints to reduce backlog and > “Lower Austrian Renewables subject to annual feed-in achieve capacity growth Roadmap 2030” tariff constraints > Attractive wind feed-in tariffs 2012: Increase wind generation capacities Annual constraints too low EUR 95/MWh in Lower Austria from 550 MW to in the past, creating 1,900 MW (2020) and 3,200 MW substantial backlog of (2030) ready-to-build projects in Austria Investments and projects 29
EVN‘s windpower plants
12 windparks - Gänserndorf west (5 wind turbines) - Gänserndorf north (5 wind turbines) - Neusiedl / Zaya (5 wind turbines) - Prellenkirchen (8 wind turbines) - Japons (7 wind turbines) - Kettlasbrunn (20 wind turbines) - Obritzberg (13 wind turbines) - Markgrafneusiedl (10 wind turbines) - Tattendorf (8 wind turbines) Total capacity: 190 MW - Pöttelsdorf (4 wind turbines) th - Glinzendorf (9 wind turbines)1) - As of September 30 , 2011: 138 MW - Kavarna, Bulgaria (8 wind turbines) Electricity for more than 100,000 households 1) 50:50 JV with Wien Energie AG Investments and projects 30
Hydropower plants in Lower Austria
River Inn - 13% stake in VERBUND-Innkraftwerke GmbH - Capacity: 41 MW (EVN stake)
Schütt - Capacity: 2 MW - 2,700 households - Investments: EUR 9.5m Kleinwasserkraftwerk Schaldorf © VERBUND Schaldorf Total capacity of 278 MW1) - Capacity: 1 MW 70 hydropower plants in total - 1,500 households Electricity for some 165,000 households - Investments: EUR 6m 1) Including purchasing rights from hydropower plants Investments and projects 31
Hydropower plant projects in Albania
Project Ashta on the Drin River - 50:50 JV with VERBUND - Capacity: 50 MW - Generation: ~240 GWh p.a. - Supply of 100,000 households - Concession period: 35 years - Start of operations: 2012/13 - Start of trail operations of the first part in June 2012 (25 MW) Project Devoll Project Ashta on the Drin River - 50:50 JV with Statkraft (Norway) - 3 hydropower plants - Capacity: 275 MW - Generation: ~800 GWh p.a. - Concession period: min. 35 years - Start of operations: 2016/19 Investments and projects 32
Hydropower plant project in Bulgaria
Gorna Arda - 70% EVN stake, 30% NEK - River Arda, South Eastern Bulgaria - Total capacity: 120 MW – 170 MW (depending on particular expansion stage) - Generation: ~350 GWh p.a. - Total investments: up to EUR 500m - Start of operations: 2018/19 Investments and projects 33
Biomass plants in Lower Austria
Expansion of biomass capacity - Hagenbrunn (Investments: EUR 3.6m) - Langenlois (Investments: EUR 2.3m) - Hollabrunn, Waidhofen, Aschbach (acquisitions)
Biomass plants under construction - Steyr (Investments: EUR 36.0m) - Amstetten Total capacity: (Investments: EUR 0.7m) - More than 60 plants - Markt Piesting (Investments: EUR 0.6m) - Thermal capacity: 178 MW - 1.5 million m³ of wood chips - Electricity and heat supply for more than 20,000 households Investments and projects 34
Photovoltaic plants in Bulgaria
Blatets - Start of operations: May 2010 - Total capacity: 836.7 kWp - Investments: EUR 3m
-CO2 savings: 280 t p.a.
Trastikovo - Start of operations: July 2011 - EVN‘s largest photovoltaic park - ~25,000 modules - Total capacity: 1,995 kWp - Generation: ~2.4 GWh p.a. - Investments: EUR 5m
-CO2 savings: 2,000 t p.a. Investments and projects 35
Cogeneration plant in Bulgaria
Plovdiv - Generation of electricity and heat - Start of construction: 2009/10 - Start of operations: December 2011 - Capacity: Electricity: 50 MW Heat: 54 MW - Investments: EUR 50m - Supply of ~33,600 households - Most modern cogeneration plant in the Balkans - Increasing the security of energy supplies Investments and projects 36
Gas supply in Lower Austria
Südschiene - Gänserndorf-Semmering - Completion: July 2011 - Gas pipeline: ~120 km - Investments: EUR 114m
Westschiene - Auersthal-Amstetten - Start of construction: June 2011 - Completion: ~September 2013 - Gas pipeline: 143 km - Investments: EUR 150m Investments and projects 37
Gas supply in Croatia
Concessions to build and operate a natural gas distribution network on the Dalmatian coast - Three counties: Zadar, Split and Sibenik - Concession period: 30 years - Total pipeline length: 1,450 km - ~130,000 households - Start of construction: April 2011 (Zadar) - First household customers connected to EVN gas grid on June 1st, 2012 Investments and projects 38
Waste incineration plants
Dürnrohr, Lower Austria - Line 3 - Start of operation: early 2010 - Total capacity: 500,000 t p.a. of household residual waste, bulky waste, industrial and commercial waste materials treated - State-of-the-art and largest waste incineration plant in Europe - Ecologically best possible waste treatment and transportation of waste and residual waste by train
Moscow - Total capacity: 360,000 t p.a. - Investments: EUR 175m - Start of operation: 2008 - EVN operation: 13 years Investments and projects 39
Waste incineration plant project
Moscow - December 2009: Acceptance of a tender to construct another waste treatment plant in Moscow - Total capacity: 700,000 t p.a. - Investments: EUR 575m - Start of operations: 2014 40
Agenda
EVN at a glance Investments and projects Financial performance Q. 1–3 2011/12 Financial performance 2010/11 Financial performance Q. 1–3 2011/12 41
Business development
2011/12 Change Weather-related revenue EURm Q. 1–3 in % development Revenue 2,256.8 4.3 Stable EBITDA EBITDA 416.2 5.5 - Operating expenses up 4.0% EBIT 226.1 6.1 Higher EBIT Financial results 65.6 5.9 - Impairment loss of EUR 22.2m vs. EUR 17.7m in the prior-year period Group net profit 222.8 7.5 Positive development of Net cash flow from financial results operating activities 275.3 –40.9 - Higher income from investments in equity accounted investees EUR Weather-related decrease of Earnings per share 1.24 6.4 net CF from operating results Financial performance Q. 1–3 2011/12 42
EBITDA development by segments
Generation Energy Trade Network Infrastructure Energy Supply Environmental and Supply Austria South East Europe Services
200 70% 182,4 171,8 173,7 180 60% 160 57,0% 140 46,3% 50% 44,2% 43,3% 120 106,0 45,0% 40%
__ 100 27,6% 76,8 71,6 74,0 30% 80 20,0% Margin (%) EURm 51,9 18,4% 60 45,8 51,4 49,6 14,6% 20% 11,1% 40 10,4% 18,8 7,3% 8,0% 7,5% 48.9 7,8% 25,8 44,9 10% 20 36,3 22,2 34,2 0 0% Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 Q. 1-3 09/10 10/11 11/12 09/10 10/11 11/12 09/10 10/11 11/12 09/10 10/11 11/12 09/10 10/11 11/12
EBITDA Profit before tax EBITDA Margin Generation: power request on the part of the German Federal Network Agency; revision in natural gas price between Gazprom and EconGas; new wind park capacities, higher hydro and wind power production coefficients Energy Supply SEE: weather-related sales volumes increase, higher end customer prices Environmental Services: slightly lower operating expenses Financial performance Q. 1–3 2011/12 43
Generation
Electricity generation 2011/12 Change Reduced use of EVN’s own thermal volumes Q. 1–3 in % power stations (GWh) - Negative spark spreads Total 1,974 –17.2 Revenue increase thermal energy sources 983 –40.1 - Power request by the German renewable energy sources 991 33.4 Federal Network Agency - Revision in natural gas prices Financial performance between Gazprom and EconGas EURm - New wind park capacities Revenue 101.7 49.1 - Higher wind and hydropower production coefficients EBITDA 45.8 – EBIT 8.5 – EBIT increase despite - Impairment losses - Biomass pilot plant EUR 8.0m in Dürnrohr - Wind park Kavarna EUR 9.8m in Bulgaria Financial performance Q. 1–3 2011/12 44
Energy Trade and Supply
1) End customer price adjustments Diverse sales volumes development Natural gas (4/1/2011) +8.9% - Electricity: increase due to business extension of EAA outside of Lower (10/1/2011) +3.6% Austria Electricity (1/1/2012) –1.7% - Natural gas: decrease due to reduced use of EVN‘s own thermal power plants and higher temperatures Sales volumes to end 2011/12 Change customers Q. 1–3 in % - Heat: increase due to large customers (GWh) and higher sale to the district heating transport pipeline in St. Pölten Electricity 5,636 2.3 Natural gas 5,858 –4.9 Revenue decrease Heat 1,472 3.5 - Decrease of end customer price for electricity and adjustments in natural gas prices Financial performance EBITDA decrease EURm Revenue 930.4 –2.3 - Higher procurement costs for electricity EBITDA 74.0 –30.2 - Provision for impending losses related to power plant project Duisburg-Walsum in EBIT 61.6 –35.7 Q2 2011/12
1) Average, household sector (source: EVN) Financial performance Q. 1–3 2011/12 45
Network Infrastructure Austria
1) Tariffs adjustments Diverse distribution sales volumes Electricity (1/1/2012) – - Electricity: at prior-year level Natural gas (1/1/2012) –1.9% - Natural gas: drop due to reduced use of EVN’s own thermal power plants and higher temperature Network distribution volumes 2011/12 Change Adjustment of network tariffs Q. 1–3 in % (GWh) Decrease of EBITDA and EBIT Electricity 5,951 0.3 - Higher procurement costs Natural gas2) 13,356 –6.4 - Higher maintenance and repair costs
Financial performance EURm Revenue 401.1 1.8 EBITDA 173.7 –4.8 EBIT 100.6 –8.6
1) Average, according to the regulator in Austria (E-Control) 2) Including network sales to EVN‘s power stations Financial performance Q. 1–3 2011/12 46
Energy Supply South East Europe
1) Electricity price adjustments Electricity generation increased Bulgaria (7/1/2010) electricity +2.0% by 90.6% (7/1/2011) electricity +1.9% Temperature-related sales volumes (4/1/2011) heat +6.8% increase Macedonia (3/1/2011) +4.9%2) - BG: heating degree +16.5%p (1/1/2012) +4.8%2) - MK: heating degree +19.9%p Network distribution volumes Revenue increase (GWh) - Weather-related hike of sales volumes Electricity3) 10.758 3.8 - Electricity and heat price adjustments 230 5.3 Heat Increase of EBIT from EUR –12.5m Financial performance despite EURm - Higher prices for procured energy Revenue 736.3 16.0 - Increased write-offs of receivables EBITDA 76.8 55.0 EBIT 28.7 –
1) Average, household sector, according to the regulators in Bulgaria (SEWRC) and Macedonia (ERC) 2) EVN Macedonia 3) In Bulgaria and Macedonia energy sales volumes fairly equal present network distribution volumes Financial performance Q. 1–3 2011/12 47
Environmental Services
Financial performance 2011/12 Change Stable revenue Q. 1–3 in % EURm - International project business: stable contribution Revenue 244.3 0.3 - Domestic water supply business: EBITDA 48.9 8.9 increased revenue EBIT 29.2 11.7 - Waste incineration: lower contribution Financial results 7.1 –11.7 Financial results down Profit before income tax 36.3 6.1 - Decreasing interest income related to the ongoing redemption of projects during the operational phase Market entry - Wastewater treatment plant in Prague (CZ) (turn-key project) - Drinking water treatment plant in Serbia (BOOT project) Financial performance Q. 1–3 2011/12 48
Financial results
Financial results increased Q. 1-3 11/12 -2.5 -39,4 82,3 25,1 Higher income from investments in equity accounted investees
Q. 1-3 10/11 -2,9 -30,2 69,4 25,5 Lower interest results - Higher interest expenses - Higher net debt Q. 1-3 09/10 -0.5 -22,2 41,0 53,8 - Slightly higher interest rates EURm_ -50-30-101030507090110 - Lower interest income
Income from investments in equity accounted investees Gain from other investments Total interest results Total other financial results Financial performance Q. 1–3 2011/12 49
Solid capital structure and rating supports
8.000 100%
6.894,7 6.731,2 6.870,4
80% 2.000 100% 6.000 1.739,3 1.579,2 1.458,2 80% 60% 1.500
4.000 44,9% 46,2% 45,3% 60% _ EURm 3.176,0 3.025,3 3.120,4 40% 1.000 55,7% Equity ratio (%) ratio Equity EURm 49,7% 40% 48,2% Gearing (%) 2.000 20% 500 20%
0 0% 0 0% FY 09/10 FY 10/11 Q. 1-3 11/12 FY 09/10 FY 10/11 Q. 1-3 11/12
Total assets Equity Equity ratio Net financial debt Gearing Financial performance Q. 1–3 2011/12 50
Cash flow
2011/12 Change Higher gross CF EURm Q. 1–3 in % - Higher profit before tax Gross cash flow 445.0 4.3 - Higher non-cash earnings components Net cash flow from Decrease of net CF from operating activities 275.3 –40.9 operating activities Net cash flow from - Stronger seasonal effect in working capital investing activities –233.3 45.4 Change of net CF from Net cash flow from investing activities financing activities –25.6 – - Lower investments in intangible assets and Net change in cash property, plant and equipment and cash items 129.1 –17.3 - Lower capital payment for investments in equity accounted investees - Acquisition of additional stake in EVN’s 426,6 Bulgarian subsidiaries Q. 1-3 10/11 246,5 - Sales of current investments in securities
445,0 Decrease of net CF from Q. 1-3 11/12 184,9 financing activities
EURm__ 0 100 200 300 400 500 - Capital increase in the prior-year
Gross cash flow Investments in intangible assets, property, plant and equipment 51
Agenda
EVN at a glance Investments and projects Financial performance Q. 1–3 2011/12 Financial performance 2010/11 Financial performance 2010/11 52
Group results 2010/11
Change Revenue drop in the energy EURm 2010/11 in % business offset by positive Revenue 2,729.2 –0.8 development in Environmental Services segment EBITDA 471.4 13.2 Higher EBIT due to one-offs EBIT 218.7 16.8 Negative development in financial Financial results 41.8 –50.0 results Group net profit 189.7 – 8.4 - Lower dividend paid by VERBUND Net cash flow from 522.0 4.6 - Decline in interest and other financial operating activities results Strong cash flow generation EUR Decrease of earnings per share Earnings per share 1.07 –16.1 - Lower Group net profit Dividend per share 0.41 2.5 - Increased number of outstanding shares following the capital increase Higher dividend payout ratio Financial performance 2010/11 53
Asset impairments 2010/11
Impairment tests, EURm 2010/11 2009/10 Assumptions used at impairment tests: 1. Gas-fired power plants –38.4 - High gas sourcing costs from long- term supply contracts and the 2. Procurement rights at +31.2 hydropower plants elimination of free CO2 certificates as of 2013 3. TEZ Plovdiv / Gas power plant side in Plovdiv –17.7 - Hydropower plants are gaining importance 4. Others –4.2 –10.7 - Ongoing adverse regulation in the Effects in operating Bulgarian heating business results –29.1 –10.7 - Delay in liberalising the Bulgarian 5. Hydropower project –23.1 market and postponed plans to Ashta construct a gas-fired power plant Effects in financial –23.1 - Lower expectations on proceeds from results the sale of Certified Emission Reductions Financial performance 2010/11 54
EBITDA development by segments
Generation Energy Trade Energy Supply Network Infrastructure Environmental and Supply South East Europe Austria Services 220 60% 191.4 200 190.4 57.6% 180 44.3% 50% 159.1 160 39.1% 39.8% 40% 140 34.0%
_ 120 103.9 33.1% 30% 100 84.2 86.8 EURm
19.9% Margin (%) 80 64.9 69.0 18.3% 17.0% 20% 52.5 57.3 60 52.3 68.954.8 46.5 33.4 8.9% 10.4% 42.0 45.1 32.1 8.0% 40 4.8% 7.4% 10% 2.8% 20
0 0% 08/09 09/10 10/11 08/09 09/10 10/11 08/09 09/10 10/11 08/09 09/10 10/11 08/09 09/10 10/11
EBITDA PBT EBITDA Margin Generation: falling spreads between electricity and primary energy prices Energy Trade and Supply: positiv economic development and one-off effects due to the use of provisions from previous year for impending losses Environmental Services: higher or first-time earnings contribution of new projects Financial performance 2010/11 55
Generation
Electricity generation Change Decrease in energy generation volumes (GWh) 2010/11 in % volumes Total 3,000 –9.2 - Lower power generating volumes at EVN‘s own thermal power stations thereof thermal energy 1,998 –8.5 sources - Lower water flow conditions thereof renewable energy sources 1,002 –10.4 Revenue and EBIT drop
EURm - Declining spreads between electricity and primary energy prices in option Revenue 97.1 –18.2 value of power stations EBITDA 32.1 –38.9 - Impairments: EBIT –3.6 – EUR –38.4m Theiß and Korneuburg EUR +31.2m revaluation of purchase rights at hydropower plant Freudenau Financial performance 2010/11 56
Energy Trade and Supply Higher sales volumes to end customers
1) - Electricity: economic upswing and End customer price adjustments expansion of EnergieAllianz outside Gas (12/1/2009) –7.0% Austria (4/1/2011) +8.9% - Heat: higher sales of steam and heat to key accounts Decrease in revenue despite higher Sales volumes to end 2010/11 Change customers (GWh) in % sales volumes Electricity 7,143 1.8 - Adjustment in gas prices for end Natural gas 6,475 –3.9 customers Heat 1,678 6.9 - Decrease in marketing proceeds from power plants EBITDA and EBIT increase EURm Revenue 1,164.3 –1.9 - Lower primary energy costs due to: EBITDA 103.9 81.5 - One-off effects due to usage of provisions for impending losses EBIT 88.8 – - Reduced purchasing volumes because of reduced operation of own power plants 1) Average, household sector (EVN Source) Financial performance 2010/11 57
Energy Supply South East Europe Sales volumes development - Higher electricity sales volumes in Bulgaria and Macedonia
1) Revenue decrease Electricity price adjustments - Bulgaria: mainly due to changed Bulgaria (7/1/2010) +2.0% reporting of tariff components (effect: (7/1/2011) +1.9% EUR 46.9m) Macedonia (1/1/2010) +5.1% - Macedonia: higher sales volumes and positive price effects in 2010 and 2011 (3/1/2011) +4.9% Decrease in operating expenses
Network distribution 2010/11 Change - Changed reporting of procurement volumes (GWh) in % costs in Bulgaria and usage of Electricity 13,396 1.6 provisions for impending losses in Bulgaria Heat 233 –7.9 - Lower personnel expenses and write- offs of receivables in Macedonia EURm EBIT improvement despite Revenue 834.3 –3.2 86.8 25.8 - Impairment of goodwill at TEZ Plovdiv EBITDA and impairment of property, plant and EBIT 9.7 12.7 equipment of the Plovdiv power plant site totaling EUR 17.7m 1) Average, household sector, according to the regulators in Bulgaria (SEWRC) and Macedonia (ERC) Financial performance 2010/11 58
Network Infrastructure Austria
1) Tariffs adjustments Diverse network distribution volumes Electricity (1/1/2011) +1.0% - Electricity distribution volumes: Gas (1/1/2011) +10.6% increase due to economic upswing in the first half-year 2010/11 - Gas distribution volumes: decrease Network distribution 2010/11 Change despite cold weather due to lower volumes (GWh) in % sales to EVN‘s own thermal power Electricity 7,754 2.4 stations Natural gas2) 16,415 –11.4 Decrease of EBITDA and EBIT - Higher cost of materials EURm - Higher depreciation Revenue 478.8 –2.1 EBITDA 190.4 –0.5 EBIT 91.7 –3.2
1) Including network sales to EVN‘s power stations 2) Average, according to the regulator in Austria, E-Control Financial performance 2010/11 59
Environmental Services
Change Revenue increase due to higher or EURm 2010/11 in % first-time full year earnings contribution of projects Revenue 346.9 21.6 EBITDA 68.9 31.8 - Waste incineration plant and sodium hypochlorite plant in Moscow EBIT 42.9 53.2 Strong EBITDA and EBIT increase Profit before income tax 54.8 17.8 New business
EUR bn - Concession for wastewater treatment in Slovenia Contract value1) 1.3
1) As of September 30th, 2011 Financial performance 2010/11 60
Financial results 2010/11 Financial results dropped by 50% Earnings contribution from 2008/09 investments fell -4.7 -38.5 47.4 46.7 50.8 - Higher results from investments in equity accounted investees: 2009/10 RAG: -0.8 -31.9 54.7 61.6 83.6 up from EUR 44.3m to EUR 60.4m BEWAG/BEGAS: 2010/11 up from EUR –3.1m to EUR 9.4m 41.8 -6.5 -41.1 26.6 62.9 Impairment for hydropower project Ashta (EUR –21.3m) -50-30-101030507090110130150 - Lower gain from other investments EURm_ VERBUND AG: drop by EUR 28.7m Gain from other investments to EUR 22.1m Income from investments in equity accounted investees Total interest results Drop in total interest results Total other financial results - Higher level of financial liabilities - Higher interest rates Financial performance 2010/11 61
Balance sheet
Change Increase of total assets 2010/11 1) EURm in % - Increase in equity accounted Total assets 6,870.4 2.1 investees Equity 3,176.0 5.0 13%-stake VERBUND-Innkraftwerke Equity ratio (in %) 46.2 1.3p Contribution to capital increase of VERBUND AG Net debt 1,579.2 8.3 Increase in net debt Gearing (in %) 49.7 1.5p - Slightly higher gearing but within EVN framework to maintain competitive investment grade
88.5% 11.5%
Non-current assets Current assets
46.2% 39.5% 14.3%
Equity Non-current liabilities Current liabilities
1) Compared to September 30th, 2010 Financial performance 2010/11 62
Cash flow Higher gross CF - Lower profit before income tax - Higher depreciation and amortisation Change EURm 2010/11 in % - Lower non-cash income from investments in equity accounted investees Gross cash flow 478.1 2.2 - Lower non-current provisions Net cash flow from 522.0 4.6 Increase of net CF from operating operating activities activities Net cash flow from - Decrease of current balance sheet items investing activities –511.6 –11.9 - Higher net cash outflow from investing activities and liabilities Net cash flow from 13.1 –77.1 financing activities Decrease of net CF from investing activities Net change in cash 23.5 – and cash items - Decrease of current securities - Higher capital payment for investments in equity accounted investees
467.7 09/10 - Increase in lease receivables in the 394.0 Environmental Services segment 478.1 10/11 Decrease of net CF from financing 415.7 activities EURm0__ 100 200 300 400 500 - Redemption of liabilities
Gross cash flow - Despite net proceeds of capital increase Investments in property, plant and equipment and intangible assets Financial performance 2010/11 63
Investments 2010/111)
500
415.7 450 415.7 Investments up 5.5% 394.0
400 67.4 48.3 Key investments 68.6 350 - Generation: 104.8 112.5 300 Wind power and small-scale hydro power
_ 100.7 projects in Lower Austria 250 32.5 25.3 EURm 21.5 - Network Infrastructure Austria: 200 Construction of the natural gas transport
150 161.5 160.9 pipelines „Süd- and Westschiene“ 156.5 100 - Energy Trade and Supply: Expansion of heating networks 50 70.8 63.4 48.9 0 - Energy Supply South East Europe: 08/09 09/10 10/11 Expansion of the network infrastructure and replacement of meters Environmental Services Construction of the new cogeneration plant in Energy Supply South East Europe Plovdiv Energy Trade and Supply Network Infrastructure Austria - Environmental Services: Generation Combined cycle heat and power cogeneration plant in Moscow 1) In intangible assets and property, plant and equipment 64
Additional information
Stefan Szyszkowitz Investor information on the web CFO www.evn.at Phone: +43 2236 200-12132 www.investor.evn.at Fax: +43 2236 200-82132 www.responsibililty.evn.at E-mail: [email protected] E-mail: [email protected]
Klára Székffy EVN AG Head of Investor Relations Headquarters Phone: +43 2236 200-12745 EVN Platz Fax: +43 2236 200-82745 2344 Maria Enzersdorf E-mail: [email protected] 65
Disclaimer
Certain statements made in this presentation may constitute „Forward-Looking Statements” within the meaning of the U.S. federal securities law. Forward-looking 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.