VERBUND Performance Quarter 1/2016

5/4/2016Vienna

Positive earnings performance despite continuing difficult market conditions

VERBUND is reporting a positive earnings performance for the quarter 1/2016 despite difficult market conditions. The operating result rose by 4.5% in comparison to the previous year; the EBITDA decreased slightly, by 2%, to €213.5 million. The consolidated results exceed those of the comparable quarter of the previous year by 29.9% with € 82.4 million. The channel flow in the rivers was, with a hydro coefficient of 1.00, within the long-term average and 3% below the level of quarter 1/2015. For the fiscal year 2016, on the basis of average own hydropower generation, the company anticipates an EBITDA of approx. €750 million and consolidated results of approx. €230 million.

During the quarter 1/2016 the general conditions on the European electricity market were exacerbated once again. One of the crucial determining factors for VERBUND's earnings performance is the wholesale price for electricity on the German electricity exchange EEX. Following an already historically low level, it fell dramatically once again around the turn of the year 2015/16. This downturn was due to declining global market prices for coal and the further drop in CO2 prices.

For VERBUND, the strategic focus in the 1st quarter of 2016 was the consistent implementation of our strategy. Measures include an increase in the regulated shares in the company's assets portfolio, and strengthening customer-oriented business with energy-related services and products.

Earnings performance
The earnings performance for quarter 1/2016 was positive:  The operating result rose by 4.5% compared to the previous year; the EBITDA decreased slightly, by 2%, to €213.5 million. The channel flow in the rivers was, with a hydro coefficient of 1.00, within the long-term average and 3% below the level of quarter 1/2015. Hydropower production therefore declined by 212 GWh. Overall, VERBUND's own power generation was, at 6,705 GWh, 10.0% lower than in the first quarter of the previous year, due to considerably lower thermal generation. The unfavourable energy market conditions were reflected in dwindling average selling prices. These negative effects could however be compensated, particularly by a higher result in the grid segment as well as by lower expenditures due to the cost-cutting programmes. The consolidated results exceed those of the comparable quarter of the previous year by 29.9% with €82.4 million. This increase can essentially be traced back to the improved financial results, due particularly to bond repayments in 2015.

Energy services and innovations for household, business and industry customers
At the beginning of 2016, VERBUND GETEC Energiecontracting launched the operation of eight facilities in Vorarlberg. More than 20 business customers are provided with heating from biomass, solar thermal energy and natural gas, and cooling by electricity. Likewise in the 1st quarter was the start of VERBUND's joint venture SOLAVOLTA, with the installation of the first Powerwall, the home battery storage system by TESLA Energy. Compared to the end of 2015, the number of VERBUND electricity and gas customers climbed by 3% in the 1st quarter to about 374,000.

Outlook for 2016 confirmed
For the fiscal year 2016, on the basis of our average hydropower generation, we expect an EBITDA of approx. €750 million and consolidated results of approx. €230 million.

Key figure Unit Q1/2015 Q1/2016 Change in %
Revenue* €m 727.2 806.3 10.9
EBITDA €m 217.8 213.5 -2.0
Operating result €m 123.8 129.4 4.5
Group result €m 63.4 82.4 29.9
Earnings per share 0.18 0.24 29.9
EBIT margin* % 17.0 16.1
EBITDA margin* % 30.0 26.5
Cash flow from operating activities €m 166.1 265.8 60.0
Free cash flow after dividends €m 266.3 216.5 -18.7
Gearing % 72.1 62.4
* The comparative figures have been adjusted retrospectively in accordance with IAS 8.

Further information and the interim financial report for quarter 1/2016 is available at www.verbund.com > Investor Relations > Latest financial results.

Ingun Metelko Ingun Metelko

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