Values. to Us, Management Means Creating Values: for People, Society and the Environment

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Values. to Us, Management Means Creating Values: for People, Society and the Environment Values. To us, management means creating values: for people, society and the environment. Annual Report 2012 Design concept for charts and tables The depiction of charts and tables corresponds to the concept of “SIMPLE, UNIFORM, CLEAR” from Roman Griesfelder (aspektum gmbh). They are prepared according to the recommendations of Prof. Rolf Hichert. Column/bar width Wide columns or bars represent measure- ment parameters that can be physically counted. Examples: MW, GWh, employees Medium columns or bars represent aggregated values. Examples: €k, €m, €bn Narrow columns or bars represent values in euros per unit. Examples: €/share, €/MWh Lines or dotted lines represent shares, quotients or indices. Examples: Dividend yield in %, indexed share price, GDP growth in % Colours Current year Neutral Previous years Targets VERBUND Emphasis Five-year comparison VERBUND Group 2012 Unit 2008 2009 2010 2011 2012 Revenue1 €m 3,744.7 3,483.1 3,307.9 3,027.7 3,174.3 Operating result2 €m 1,138.6 1,042.3 828.5 1,030.0 900.2 Operating result before effects from impairment tests2 €m 1,138.6 1,042.3 828.5 827.8 955.9 EBITDA2 €m 1,321.8 1,251.5 1,059.2 1,069.5 1,233.9 Group result2 €m 686.6 644.4 400.8 355.8 389.3 Balance sheet total €m 8,293.8 10,345.2 11,291.0 11,859.3 12,387.3 Equity2 €m 3,128.1 3,409.7 4,372.4 4,919.1 5,099.4 Net debt2, 5, 6 €m 2,753.2 4,788.9 4,233.9 4,050.1 3,311.7 Additions to property, plant and equipment €m 440.3 471.9 635.7 581.4 680.3 Cash flow from operating activities €m 934.2 968.0 778.2 829.9 1,034.7 Free cash flow €m – 187.5 – 1,075.7 – 355.8 43.6 272.6 EBITDA margin1, 2 % 35.3 35.9 32.0 35.3 38.9 Return on sales (EBIT margin)1, 2 % 30.4 29.9 25.0 34.0 28.4 Return on capital employed (ROCE)2, 5 % 16.7 12.9 8.2 6.9 6.3 Return on equity (ROE)2 % 27.3 22.4 12.9 10.0 10.0 Equity ratio (adjusted)2 % 41.3 34.3 39.9 43.0 42.6 Gearing2 % 88.0 140.4 96.8 82.3 64.9 Gross debt coverage (FFO)2 % 36.3 20.2 17.6 19.5 20.6 Gross interest cover (FFO)2, 3 X 7.1 4.8 3.6 3.9 4.5 Share price high € 59.30 38.13 32.12 32.47 23.00 Share price low € 29.74 23.73 24.24 17.91 14.50 Closing price € 32.56 29.71 27.88 20.74 18.76 Market capitalisation €m 10,034.99 9,156.62 9,685.95 7,203.66 6,517.52 Earnings per share2, 4 € 2.23 2.09 1.28 1.02 1.12 Cash flow per share4 € 3.03 3.14 2.49 2.39 2.98 Carrying amount per share2 € 9.30 10.12 11.62 12.42 12.83 Price/earnings ratio (last trading day)2 X 14.61 14.21 21.71 20.25 16.74 Price/cash flow ratio4 X 10.74 9.46 11.18 8.68 6.30 Price/book value ratio2 X 3.50 2.94 2.40 1.67 1.46 (Proposed) dividend per share € 1.05 1.00 0.55 0.55 0.60 Special dividend per share € – 0.25 – – – Dividend yield % 3.22 4.21 1.97 2.65 3.20 Payout ratio2 % 47.13 59.79 47.67 53.71 53.54 Enterprise value/EBITDA2 X 9.7 11.1 13.1 10.5 8.0 Average number of employees 2,541 2,820 3,015 3,045 3,100 Electricity sales volume1 GWh 56,057 51,289 55,729 46,887 47,483 Hydro coefficient 1.01 1.06 0.99 0.89 1.11 1 The key figures were adjusted to reflect the changes in accounting treatment for energy derivatives in the wholesale portfolio. The change was implemented retrospectively effective 1 January 2011 in accordance with IAS 8. The values for the years prior to 2011 have not been adjusted. // 2 The key figures were adjusted to reflect the (early application of) changes in accounting treatment for employee benefits in accordance with IAS 19 (2011). The change was implemented retrospectively effective 1 January 2011 in accordance with IAS 8. The values for the years prior to 2011 have not been adjusted. // 3 Interest expenses without the profit shares attributable to the limited partners // 4 For calculating the earnings per share and the cash flow per share, the average number of shares was determined exactly to the day. // 5 Key figures were revised. The previous year’s values were adjusted. // 6 Net debt is calculated as at the balance sheet date. As a result of the planned asset swap of the Turkish equity interest for shares in German hydropower plants, net debt will increase in subsequent periods after the closing due to the addition of the German hydropower plants. Investor relations Shareholder structure % (Proposed) dividend per share € Free float Republic of Austria 1.25 TIWAG < 20 1.05 0.55 0.55 0.60 > 5 51 08 09 10 11 12 In 2009 there was a special dividend of €0.25 per share. > 25 Dividend yield % EVN and Wiener Stadtwerke syndicate 4.21 3.22 3.20 2.65 1.97 Basic information Share capital (€) 347,415,686 Stock (shares) 347,415,686 08 09 10 11 12 In 2009 there was a special dividend of €0.25 per share. Official quotation Vienna VER Capital market calendar 2013 Event Date Information systems Annual result 2012 06/03/2013 Bloomberg VER AV Publication of Annual Report 06/03/2013 Reuters VERB.VI Annual general meeting 17/04/2013 ISIN AT0000746409 Dividend ex-date 24/04/2013 Interim Report quarter 1/2013 02/05/2013 Rating agencies Dividend payment date 07/05/2013 Standard & Poor's A–/stable outlook Interim Report quarter 1– 2/2013 31/07/2013 Moody's A2/negative outlook Interim Report quarter 1– 3/2013 29/10/2013 VERBUND Annual Report 2012 Contents Report of the Executive Board ......................................................................................................... 6 Report of the Supervisory Board ..................................................................................................... 9 Strategy ............................................................................................................................................ 11 Investor relations ............................................................................................................................ 13 Consolidated management report ................................................................... 15 Group ............................................................................................................................................... 16 General position ....................................................................................................................... 16 Finances .................................................................................................................................... 22 Human resources ..................................................................................................................... 39 Sustainability ............................................................................................................................ 41 Innovation, research and development ................................................................................. 44 Risk and opportunity management ........................................................................................ 46 Outlook ...................................................................................................................................... 50 Internal control and risk management system ...................................................................... 52 Shareholder structure and capital information ..................................................................... 54 Events after the balance sheet date ........................................................................................ 55 Operating segments ........................................................................................................................ 56 Electricity ................................................................................................................................... 56 Grid ............................................................................................................................................ 65 Equity interests ......................................................................................................................... 70 Consolidated financial statements. .................................................................. 72 Income statement ........................................................................................................................... 73 Statement of comprehensive income .......................................................................................... 74 Balance sheet ................................................................................................................................. 75 Statement of changes in equity ..................................................................................................... 76 Cash flow statement ...................................................................................................................... 78 Notes ............................................................................................................................................... 80 Auditor’s report ............................................................................................................................ 216 Corporate governance report ......................................................................... 218 Glossary ......................................................................................................... 235 6 Report of the Executive Board Dear Shareholders, In the past year, we streamlined VERBUND‘s strategy and took key steps for the Group’s future. In what was probably our most important decision, we will be exchanging our Turkish equity interest for shares in Bavarian hydropower plants from German energy group E.ON. This move will improve our risk profile and strengthen our renewable generation portfolio
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