Evn Ag · VIE:EVN
Evn — Investor Day (October 2023)
48 slides from Evn's investor day presentation, Oct 5, 2023
Slide 1: EVN Capital Markets Day 2023
EVN Capital Markets Day 2023 5 October 2023
Slide 2: Agenda
Agenda Part 1 – Strategy 2030 Stefan Szyszkowitz Part 2 – Energy business Jörg Sollfelner Part 3 – Renewables business Helwig Überacker Part 4 – Grid business Werner Hengst Part 5 – ESG and innovation Andrea Edelmann Part 6 – Financial ambitions 2030 Gerald Reidinger Part 7 – Key messa
Slide 3: Managing expectations for the CMD
Managing expectations for the CMD… Information on FY 2022/23 already public: • The following will be published on 15 December • Full year guidance was confirmed with Q. 1-3 2023 results − Additional information on FY 2022/23 (which just ended on 30 September 2023) − Contribution of the operating act
Slide 4: Part 1 – Strategy 2030
Part 1 – Strategy 2030 Stefan Szyszkowitz
Slide 5: Residual total load in 2030
Residual total load in 2030 Scenario for the residual load in 2030; green: oversupply of electricity; red: electricity shortage Capital Markets Day 2023 5
Slide 6: Creating value by doing the right things
Creating value by doing the right things • Grid expansion • Innovation • Investing in renewable energy • Focus on sustainability – ecologically & economically Capital Markets Day 2023 6
Slide 7: Update on strategic decision for the future of the international project business
Update on strategic decision for the future of the international project business • WTE Wassertechnik is extremely well positioned for further international growth and expansion − Reference of more than 120 projects in 18 countries − Wastewater treatment project Umm Al Hayman (Kuwait): WTE’s largest
Slide 8: Part 2 – Energy business
Part 2 – Energy business Jörg Sollfelner
Slide 9: Electricity for ~3.5m customers in Lower Austria, Bulgaria and North Macedonia
Electricity for ~3.5m customers in Lower Austria, Bulgaria and North Macedonia • Three core markets in electricity: • Estimated growth of electricity demand1) in our three markets until 2030 − Increase in electricity demand despite energy efficiency; heating pumps and e-mobility as growth drivers −
Slide 10: Planning assumptions for wholesale market prices for electricity, natural gas and CO2 until 2030
Planning assumptions for wholesale market prices for electricity, natural gas and CO2 until 2030 • Planning assumptions until 2027: Electricity base in EUR/MWh (nominal) − Forward prices (as of 30 June 2023) • Planning assumptions 2028-2030: 261 − Price scenarios1) 107 122 156 138 116 98 91 90 91 •
Slide 11: High volatility of electricity prices due to fluctuations in wind and photovoltaic production
High volatility of electricity prices due to fluctuations in wind and photovoltaic production • Hourly spot market prices (EPEX) on 2 July 2023 • Growing summer-winter-spread as market trend − Oversupply in wind and photovoltaic production • Results in additional challenges for both − Negative elect
Slide 12: Hedging and price-setting strategies in our energy business
Hedging and price-setting strategies in our energy business • Generation − Hedging strategy for planned renewables generation on a rolling 12-18 months basis for quantities on the free market − Fixed feed-in tariff for wind production (13 or 20 years; opt-out due to favourable market prices) − Natur
Slide 13: Future development of supply business
Future development of supply business • Our future ambition for the supply business − Recovery and return to positive earnings in FY 2023/24 − Mid-term ambition: Supply margin of 3-5% • Strict consumer protection in EU/Austria • Growing demand for short-term tariffs − Innovative tariffs based on sma
Slide 14: Exploiting e-mobility as area for new business potential
Exploiting e-mobility as area for new business potential • EVN currently operates ~2,300 charging points • Focus on destination charging (rather than full area coverage) − EVN was awarded the contract on the construction and operation of charging infrastructure for two large supermarket chains by 20
Slide 15: Part 3 – Renewables business
Part 3 – Renewables business Helwig Überacker
Slide 16: Wind and photovoltaic expansion targets 2030 to be achieved on the back of a strong project pipeline
Wind and photovoltaic expansion targets 2030 to be achieved on the back of a strong project pipeline • Planned wind expansion path until 20301) • Planned PV expansion path until 2030 − Projects in Lower Austria only − Projects in Lower Austria, Bulgaria and North Macedonia • Potential growth in annu
Slide 17: Our success factors in wind generation
Our success factors in wind generation • Strong and well-balanced project pipeline in Lower Austria • Highly skilled and diverse team − Lean core team of ~20 people for project development and execution − Excellent experience in stakeholder management • Continuous increase in turbine capacity − Unde
Slide 18: We are constantly working on innovative solutions to enable efficient renewables generation
We are constantly working on innovative solutions to enable efficient renewables generation • Enable projects through ecological planning and special measures to protect biodiversity − Close cooperation with NGOs and authorities − Species protection measures − Compensation areas and alternative habi
Slide 19: EVN is confident to reach its wind power expansion targets as planned by 2030
EVN is confident to reach its wind power expansion targets as planned by 2030 – albeit some challenges Challenges Success factors − Length of approval − EVN’s strong track process (incl. long record in its home court proceedings) market lower Austria − Acceptance of EVN’s 2030 wind − Strong project
Slide 20: Part 4 – Grid business
Part 4 – Grid business Werner Hengst
Slide 21: Ambitious climate and energy goals 2030 as main challenge for network operators
Ambitious climate and energy goals 2030 as main challenge for network operators • Network capacity (in MW) in Lower Austria requires substantial expansion until 2030 • Main drivers: − Integration of volatile renewables generation from wind and photovoltaics (large-scale and households) − Supply char
Slide 22: The complexity of the energy system will continue to increase
In the next few years, the complexity of the energy system will continue to increase and will place new demands on network operators Network control Integration of e-mobility Sector coupling and demand side E-mobility and intelligent management are essential blocks to ensure management of renewable,
Slide 23: Investment focus on network infrastructure as one of our core strategies 2030
Investment focus on network infrastructure as one of our core strategies 2030 • ~EUR 3 bn Capex in network infrastructure in Lower Austria until 2030 to enable the energy transition • Key investment areas for electricity networks − Modernisation, expansion and digitalisation of infrastructure − Upgr
Slide 24: Regulated business in Austria
Regulated business in Austria Network Electricity Natural gas Comments Regulatory authority Start of the regulatory period 01.01.2019 01.01.2023 Next regulatory adjustment 01.01.2024 01.01.2028 Adjustment of WACC and productivity factors Duration of the regulatory period 5 years 5 years Regulatory m
Slide 25: Part 5 – ESG and innovation
Part 5 – ESG and innovation Andrea Edelmann
Slide 26: EVN's contribution to the Sustainable Development Goals
EVN‘s contribution to the Sustainable Development Goals – Sustainability as basis of EVN‘s mission as a utility company Expansion of drinking Expansion of Concrete CO2 emission water infrastructure to renewable energy reduction targets ensure security and Infrastructure coordinated with the
Slide 27: EVN Climate Initiative – Shaping the energy future with three pillars
EVN Climate Initiative – Shaping the energy future with three pillars CO2 • Science-based targets according to reduction Paris Climate Agreement target • Decarbonisation path until 2034 (well below 2°) • EVN Wasser, kabelplus and EVN’s headquarters Climate have already achieved CO2-neutrality neutra
Slide 28: Five emission reduction targets agreed with and verified by SBTi
Five emission reduction targets agreed with and verified by SBTi (well below 2°C, base year FY 2019, target year FY 2034) • EVN‘s intensity targets − Electricity generation –66% power − Electricity sales sector • EVN‘s absolute targets − Waste incineration –37.5% − District heating other activities
Slide 29: Our ambition for FY 2023/24 – Developing a 1.5°C transition plan
Our ambition for FY 2023/24 – Developing a 1.5°C transition plan Intensity 1 – Target emissions path with climate neutrality 2040 Potential measures − Fuel switch (e.g. to renewable gas or biomass) − H2-ready gas turbines − Further expansion of renewables generation Target path Capital Markets D
Slide 30: Future challenges as business opportunities
Future challenges as business opportunities Scenario for the residual load in 2030; green: oversupply of electricity; red: electricity shortage Capital Markets Day 2023 30
Slide 31: Pilot plants for H2 storage and alternative H2 generation
Pilot plants for H2 storage and alternative H2 generation • RAG’s potential storage capacity: ~6.3bn m3 • Underground sun storage project − World's first project for a seasonal energy storage system with 100% hydrogen in a depleted natural gas reservoir − Project partners: RAG, EVN, research and ind
Slide 32: Sector integration for renewable and secure energy supply
Sector integration for renewable and secure energy supply City of Krems Large-scale PV plant Biomass-fired cogeneration plant Utility-scale battery storage Hot water storage Utility-scale heat pumps Capital Markets Day 2023 32
Slide 33: Highly rated ESG performance underlines EVN's ambitions
Highly rated ESG performance underlines EVN’s ambitions CDP • Industry benchmark: B (Energy utility networks) A-, Leadership Status • Last update: December 2022 EthiFinance • Industry benchmark: 53 (Utilities sector) 64 • Last update: January 2023 Financial Times – EU Climate Leader • Industry bench
Slide 34: Part 6 – Financial ambitions 2030
Part 6 – Financial ambitions 2030 Gerald Reidinger
Slide 35: Ambitions for future performance
Ambitions for future performance The following slides reflect the forward-looking expectations of EVN for future financial performance which are necessarily based on a number of assumptions and estimates about future events and actions, including management’s assessment of opportunities and risks.
Slide 36: Future value drivers Perspective 2024–2030
Future value drivers Perspective 2024–2030 Segment Energy − Consists of energy supply business Austria, heating business (mainly from biomass) in Austria and energy services − EBIT margin supply business Austria 3-5% − EBIT contribution EUR 45 to 70m p.a. Segment Generation − Production capaciti
Slide 37: Future value drivers /2 Perspective 2024–2030
Future value drivers /2 Perspective 2024–2030 Segment Network − Regulated Asset Base * Regulated WACC − EBIT increase +10% p.a. by 2030 − Development of RAB (in EUR bn; electricity and natural gas distribution networks) RAB growth +50% RAB growth +40% Capital Markets Day 2023 37
Slide 38: Future value drivers /3 Perspective 2024–2030
Future value drivers /3 Perspective 2024–2030 Segment South East Europe − Consists of electricity grid and supply in Bulgaria and North Macedonia, generation in North Macedonia as well as gas grid and supply in Croatia − ROCE >8% p.a. − EBIT between EUR 70 and 90m p.a. All other segments − Stabl
Slide 39: Future value drivers /4 Perspective 2024–2030
Future value drivers /4 Perspective 2024–2030 Segment Environment − Consists of stable water supply business in Austria and international project business − Project business depends on order intake in international project business Forecasted average ranges for in mEUR international project busine
Slide 40: Segment overview – Strategic EBIT targets
Segment overview – Strategic EBIT targets Perspective 2024–2030 Segment Strategic targets on EBIT* Energy EUR 45-70m Generation EBIT margin 30-35% Networks Austria EBIT +10% p.a. South East Europe EUR 70-90m Environment EUR 35-50m All other segments EUR 40-50m * mid- and long-term strategic targets;
Slide 41: Strategic financial KPIs for EVN Group
Strategic financial KPIs for EVN Group Perspective 2024–2030 Perspective 2030* Group net results EUR 400-450m p.a. ROCE >5.5% WACC 5.0% Investments EUR 700-900m p.a. Net Debt / FFO (Funds from Operations) 1.5 – 2.0 * Specific guidance for individual years is communicated separately and included in o
Slide 42: Part 7 – Key messages
Part 7 – Key messages Stefan Szyszkowitz
Slide 43: CMD key messages
CMD key messages Expansion of wind and photovoltaics on track Massive network and infrastructure investments will enhance RAB growth Benefit from all-electricity future Continue decarbonisation path Significantly higher level of Group net results (perspective 2024-2030) Capital Markets Day
Slide 44: Dividend Policy
Dividend Policy Update will follow in December together with publication of Full Report 2022/23 Yearly dividend will be based on a combination of − minimum dividend, and − dividend payout ratio based on Group net results (adjusted for impairments) Capital Markets Day 2023 44
Slide 45: Q&A
Q&A Participants via webcast: Please send your questions via e-mail to: cmd@evn.at
Slide 46: EVN
EVN ENERGY WATER.CIFE-.
Slide 47: EVN's senior management team presenting today
EVN‘s senior management team presenting today • Stefan Szyszkowitz, CEO • Werner Hengst, Managing Director − Master of Law, Master of Business Administration − Master of Business Administration and trained Electrical Engineer − Joined EVN in 1993 − Joined EVN in 1998 − Member of the EVN Executive Bo
Slide 48: Disclaimer
Disclaimer IMPORTANT: Please read the following before continuing. The following applies to this presentation (the Presentation), which has been prepared by EVN AG (the Company) solely for discussion and information purposes in relation to the Company and its subsidiaries (together, the Group), to t