Corporate news: VERBUND results for quarters 1–3/2019

11/6/2019Vienna

Strong earnings performance increases the Group’s strategic flexibility and confirms VERBUND’s strategy

Developments in the energy market were favourable for VERBUND in quarters 1–3/2019. Against a backdrop of rising wholesale prices for electricity, increasing volatility in electricity grids and a clear trend towards renewable energy, the Group’s strategic positioning is paying off. The Group consequently turned in a very satisfactory performance, recording a marked improvement in its results of operations and management KPIs and continuing its successful debt reduction. The solid strategic foundation combined with strong performance will give the Group greater flexibility for leveraging opportunities for growth in the market and will also increase its resilience to economic downturns.
 
The higher prices on the futures markets for wholesale electricity compared with the prior-year period led to higher average sales prices and contributed significantly to the favourable earnings performance. Earnings for quarters 1–3/2019 were also lifted by increased generation from hydropower and wind power as well as by higher output from thermal power plants. With a hydro coefficient of 1.02, the water supply in rivers was 2 percent above the long-term average and 6 percentage points above the level in quarters 1–3/2018. Generation from the annual storage power plants rose by 0.8%. Output from hydropower plants therefore increased by 1,372 GWh. Earnings also benefited from a higher earnings contribution from the Grid segment due to additional temporary revenue and the good results achieved through the programmes implemented in recent years to reduce costs and increase efficiency. By contrast, revenue from flexibility products declined year-on-year.
 
EBITDA rose by 39.5%, from €678.4m to €946.1m. The reported Group result increased by 59.5%, rising from €282.8m to €450.9m. The Group result after adjustment for non-recurring effects climbed by 63.3% from €277.6m to €453.3m. A significant improvement was also seen in the cash flow from operating activities, which rose by as much as 64.9% to €893.8m and is being used to further reduce the Group’s debt. 
 
Outlook for 2019 adjusted
Assuming an average water supply and an average wind supply in quarter 4/2019, and in light of the opportunities and risks identified, we expect EBITDA to amount to between approximately €1,190m and €1,240m and the Group result to between approximately €540m and €580m for financial year 2019. VERBUND is planning a dividend payout ratio of between 40% and 45% of the Group result for financial year 2019 after adjustment for non-recurring effects.

KPIs Unit Q1-3/2018 Q1-3/2019 Change in %
Revenue €m 2,080.7 2,663.6 28.0
EBITDA €m 678.4 946.1 39.5
Operating result €m 439.9 675.9 53.6
Group result €m 282.8 450.9 59.5
Earnings per share 0.81 1.30 59.5
EBIT margin % 21.1 25.4
EBITDA margin % 32.6 35.5
Cash flow from operating activities €m 542.1 893.8 64.9
Free cash flow after dividends €m 210.9 451.8 114.2
Performance of the VERBUND-share % 110.6 34.8
Gearing % 46.3 36.0
Additional information as well as the Interim Financial Report for quarters 1–3/2019 is available at www.verbund.com > Investor Relations > Latest financial results.

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Andreas Wollein Andreas Wollein

Head of Group Finance, M&A and Investor Relations

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