VERBUND results for 2015

3/9/2016Vienna

Increased earnings despite lower sales prices and reduced water supply

VERBUND’s income trend was positive in the financial year 2015. EBITDA increased by 9.9% to €888.7m and the Group result rose to €207.7m, or 64.7% over the previous year’s figure. Adjusted for non-recurring effects, EBITDA declined by just 5.7% to €838.8m despite the lower sales prices and a drop of nine percentage points in the water supply compared to the previous year. The nearly stable EBITDA level was predominantly supported by additional income from marketing control power and congestion management as well as the Group’s programme to reduce costs and increase efficiency. The adjusted Group result rose by 24.5% to €268.9m, mainly due to the improvement in financial result and lower income taxes.

VERBUND continued to be faced with a challenging operating environment in 2015. Low economic growth and greater energy efficiency mean that electricity consumption is growing at a lower rate. At the same time, capacities for electricity generation are increasing, especially in the area of renewable energy. Primary energy prices have fallen massively, and wholesale electricity prices have dropped accordingly. The process of transitioning to carbon-free generation is moving along. Moreover, the volatile nature of energy generated from renewable sources means that greater flexibility is needed in electricity generation and in grid operations. All of these factors have a direct impact on VERBUND’s business trend.

In financial year 2015, VERBUND continued implementing the measures put in place to deal with the upheavals in the European electricity market. These included continuing thermal restructuring by decommissioning the Dürnrohr coal-fired power plant, finalising the sales of the combined cycle gas turbine power plants in France and disposing of the Group’s equity interest in Sorgenia in Italy. VERBUND concluded its programme to reduce costs and increase efficiency, which had been ongoing since 2013 and resulted in total savings of €177m, or €47m more than originally projected.

The Group’s income trend was positive in financial year 2015. EBITDA increased by 9.9% to
€888.7m and the Group result rose to €207.7m, or 64.7% over the previous year’s figure. In both years, however, the income trend was massively impacted by non-recurring effects. In 2015, these related in particular to the impairment loss recognised on the Mellach combined cycle gas turbine power plant and the reversal of provisions due to legal settlements in the Grid segment. Adjusted for these non-recurring effects, EBITDA declined by just 5.7% to €838.8m despite the lower sales prices and a drop of nine percentage points in the water supply compared to the previous year.
The nearly stable EBITDA level was predominantly supported by additional income from marketing control power and congestion management as well as the Group’s programme to reduce costs and increase efficiency. The adjusted Group result rose by 24.5% to €268.9m, mainly due to the improvement in financial result and lower income taxes.

Customer focus and energy-related services
VERBUND is continuously expanding its range of innovative power products and energy-related services. VERBUND was the first retail partner to introduce  the TESLA Energy powerwall to the Austrian market in mid 2015. In autumn the company started delivering the VERBUND Eco-Home, a smart home solution for control, comfort and safety for private customers. Troughout the year appx. 23,000 customers have opted for the carbon-neutral fuel VERBUND-plus-gas. Right at the beginning of 2016, VERBUND-GETEC Energiecontracting started the professional thermal management for eight plants in Vorarlberg and now supplies industrial parks, residential buildings and a nursing home with heat. In Austria VERBUND has a market share of 7% in the household segment and a market share of 20% in the business and industrial sector. In Germany, the company is a leading green power provider for resellers and large customers.

Dividend for 2015
A dividend of €0.30 per share for financial year 2015 will be proposed to the Annual General Meeting on 13 April 2016. This corresponds to a payout ratio of 50.2% based on the reported Group result or a payout ratio of 38.8% based on the adjusted Group result. 

Outlook for 2016
On the basis of average own generation from hydropower, EBITDA is expected to reach approximately €750m and Group result to reach approximately €230m for financial year 2016. 

Given the decline in prices on the electricity futures market in recent weeks, however, the management of VERBUND AG is reviewing additional options for increasing free cash flow. These include significant measures in the areas of growth and maintenance CAPEX, future dividend policy and cost reduction. 
 
Key figures Unit 2014** 2015 Change in %
Revenue* €m 2,880.4 2,969.6 3.1
EBITDA €m 808.8 888.7 9.9
Operating result €m 384.4 410.6 6.8
Group result €m 126.1 207.7 64.7
Earnings per share 0.36 0.60 64.7
EBIT margin* % 13.3 13.8
EBITDA margin* % 28.1 29.9
Cash flow from operating activities €m 717.6 674.0 -6.1
Free cash flow after dividend €m -133.6 392.7
Net debt/EBITDA X 5.0 4.1
(Proposed) dividend per share 0.29 0.30 3.4
* The calculation was adjusted retrospectively in accordance with IAS 8 in financial year 2015 with effect from 1 January 2014. ** The calculation of the key performance indicators includes profit/loss after tax from discontinued operations.
Further information and the integrated annual report for 2015 is available at www.verbund.com > Investor Relations > Latest financial results.
Ingun Metelko Ingun Metelko

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