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    VER   AT0000746409

VERBUND AG

(VER)
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Verbund : Interim report quarters 1-2/2021

07/29/2021 | 02:07am EDT

Creating sustainable value. Renewable energy powered

by VERBUND.

Interim report quarters 1-2/2021

INTERIM FINANCIAL REPORT Contents

3

Contents

At a glance ..................................................................................................................................................................

4

Report of the Executive Board ............................................................................................................................

5

Investor relations .....................................................................................................................................................

8

Interim Group management report ...............................................................................................................

10

Business performance .................................................................................................................................

10

Opportunity and risk management .......................................................................................................

18

Outlook ..............................................................................................................................................................

19

Segment report ...............................................................................................................................................

20

Events after the reporting date .................................................................................................................

28

Consolidated interim financial statements ................................................................................................

29

Income statement ..........................................................................................................................................

29

Statement of comprehensive income ....................................................................................................

30

Balance sheet ..................................................................................................................................................

31

Statement of changes in equity ................................................................................................................

32

Cash flow statement .....................................................................................................................................

34

Selected explanatory notes ........................................................................................................................

36

Responsibility statement of the legal representatives ............................................................................

53

4

At a glance

  • Water supply in quarters 1-2/2021 down on the long-term average at 0.96, but slightly higher than in quarters 1- 2/2020.
  • Average sales prices obtained for our own generation from hydropower up €2.2/MWh to €46.6/MWh.
  • Results for the quarters improved: EBITDA (+ 2.5 %) and Group result (+ 4.5 %) up.
  • Strong performance of VERBUND shares in quarters 1- 2/2021 (+11.2 %) - significantly better than the STOXX Europe 600 Utilities (-2.9 %) but below the ATX (+22.4 %).
  • Acquisition of a 51 % stake in Gas Connect Austria GmbH completed as at 31 May 2021 - free cash flow before dividends therefore negative, net debt up.
  • Earnings forecast for 2021 improved due to strong energy market environment: EBITDA projected to reach between approximately €1,310m and €1,410m and the Group result to between approximately €590m and €660m based on expectations of average levels of own generation from hydropower and wind power in quarters 3- 4/2021 as well as the opportunities and risks identified.

KPIs

Unit

Q1- 2/2020

Q1- 2/2021

Change

Revenue

€m

1,714.0

1,001.4

- 41.6 %

EBITDA

€m

639.0

654.9

2.5 %

EBITDA adjusted

€m

639.0

654.9

2.5 %

Operating result

€m

435.2

459.1

5.5 %

Group result

€m

310.4

324.5

4.5 %

Group result adjusted

€m

301.0

315.2

4.7 %

Earnings per share

0.89

0.93

4.5 %

EBIT margin

%

25.4

45.8

-

EBITDA margin

%

37.3

65.4

-

Cash flow from operating activities

€m

584.6

426.4

- 27.1 %

Additions to property, plant and equipment

€m

202.9

248.0

22.2 %

Free cash flow before dividends

€m

319.7

- 141.5

- 144.2 %

Free cash flow after dividends

€m

268.1

- 473.1

- 276.5 %

Performance of VERBUND shares

%

- 10.9

11.2

-

Average number of employees

2,830

3,011

6.4 %

Electricity sales volume

GWh

30,938

28,632

- 7.5 %

Hydro coefficient

0.95

0.96

-

New renewables coefficient

1.06

0.91

-

Unit

31/12/2020

30/6/2021

Change

Total assets

€m

12,054.2

13,669.2

13.4 %

Equity

€m

6,873.9

6,897.4

0.3 %

Equity ratio (adjusted)

%

59.1

52.1

-

Net debt

€m

1,881.2

2,642.8

40.5 %

Gearing

%

27.4

38.3

-

INTERIM FINANCIAL REPORT Report of the Executive Board

5

Report of the Executive Board

Dear Shareholders,

All in all, we can look back at quarter 2/2021 as a good one. The Group turned in a very satisfactory business performance, the energy market environment continued to improve apace and the Group's long-term positioning across all segments fits seamlessly with the energy sector's increasingly ambitious decarbonisation goals within the EU and in Austria. These positive environmental factors bolster the Group's share price performance. VERBUND's shares were trading at €77.7 as at 30 June 2021, up 11.2 %. The value of VERBUND based on market capitalisation was therefore €27.0bn at the end of quarter 2/2021. This puts the Group at the pinnacle of the ATX by a large margin and makes it one of the largest utilities in Europe - a clear signal that the capital market takes a positive view of the Group's strategy and positioning.

The energy market environment, which is vitally important for our business, continued to improve in the reporting period. Prices for European CO2 emission rights, which are crucial for the switch from carbon-intensivecoal-fired power generation to lower-carbongas-fired power generation, and the prices for primary energy sources, which determine the wholesale price of electricity in Europe, increased significantly. Wholesale electricity prices in Europe, one of the main value drivers of VERBUND's business performance, reached a twelve-year high in quarter 2/2021.

The strong commitment of the EU member states to achieving comprehensive decarbonisation of the energy system provided support here, prompting the European Commission to make further clear decisions on 14 July 2021 as part of the Fit for 55 package aimed at accelerating decarbonisation of the energy system in Europe. It is expected that these decisions will continue to have a positive effect on the energy market environment for VERBUND. The objective is to achieve a 55 % drop in all of the EU's greenhouse gas emissions by 2030 (1990 baseline).

These positive developments in the energy market environment will greatly benefit VERBUND's business model. VERBUND is ideally positioned in this environment as a hydropower producer with an increasing share of new renewables. Our strategy envisages that by 2030 a total of 20-25 % of the electricity VERBUND generates will come from new renewable sources of energy in Europe. The Renewable Energy Development Act (Erneuerbaren-Ausbau-Gesetz, EAG), passed by the Austrian parliament in early July 2021, provides for extensive decarbonisation and climate neutrality by 2040 and thus creates the framework for achieving this ambitious goal. In addition to its activities relating to electricity and gas grids, which also need to be expanded on a large scale to achieve the ambitious climate targets, as well as in electricity trading and sales, VERBUND will move into new fields of application that will play an important role in the successful implementation of the energy transition over the coming years. Examples are the development of a green hydrogen system, the advancement of electromobility and the development of storage systems. VERBUND is thus making a vital contribution to the implementation of Austria's climate strategy.

To realise VERBUND's sustainable strategy at an operational level, we made important decisions and pushed ahead with our projects in quarter 2/2021:

Flexible power plants are necessary to ensure the integration of volatile new renewable energy sources into the power grid. VERBUND will invest around half a billion euros in this area. In mid-June 2021, for example, construction of the Reißeck II+ pumped storage power plant started on the Reißeck lake plateau in Carinthia. VERBUND is currently investing €160 million in the modernisation and expansion of the Malta-Reißeck power plant group in Carinthia, in order to be able to temporarily store the increased

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Verbund AG published this content on 29 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 06:06:14 UTC.


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Last Close Price 87,90 €
Average target price 70,31 €
Spread / Average Target -20,0%
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Michael Strugl Chairman-Management Board & CEO
Peter F. Kollmann Chief Financial Officer
Martin Ohneberg Chairman-Supervisory Board
Karl Stadler Head-Corporate Governance & Compliance
JŘrgen Roth Independent Member-Supervisory Board
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