Evn Ag · VIE:EVN
Evn — HSBC Conference (January 2012)
52 slides from Evn's conference presentation, January 2012
Slide 1: EVN Company presentation
EVN Company presentation January 2012 1
Slide 2: Agenda
Agenda 1. EVN at a glance 2. Investments and projects 3. Financial performance 2010/11 1 EVN at a glance 2 3 2
Slide 3: EVN at a glance
EVN at a glance Profile Key metrics (2010/11) > Leading integrated Energy and Environmental Services Generation company serving customers in Lower Austria, South > Electricity generation capacity: 1,873 MW East Europe and Central and Eastern Europe - Thereof thermal: 1,434 MW > Key business areas in
Slide 4: EVN at a glance – active in 21 countries
EVN at a glance – active in 21 countries Key geographic areas > Lower Austria and Germany > South and Eastern Europe (SEE): Bulgaria, Macedonia, Croatia, Albania > Central and Eastern Europe (CEE) Activities in key geographic areas > Lower Austria: > Energy business: full integration > Environmental
Slide 5: Business segments
Business segments Generation > Production (2010/11): 3,000 GWh Energy Supply > Electricity distribution and supply South East business in Bulgaria and Macedonia > Efficient and flexible thermal fleet (coal, Europe > ~13 TWh sales volume gas, oil) supported by sizeable renewable energy portfolio > He
Slide 6: EVN's strategy 2020 ongoing consolidation and selective growth
EVN’s strategy 2020 ongoing consolidation and selective growth > Expand generation capacity - Target a coverage ratio from roughly 20% to 40%-60% - Increase the share of renewable power generation from 30% to 50% - High quality projects in SEE > Maintain market leadership in Austrian supply business
Slide 7: Implementation of strategic goals in 2010/11
Implementation of strategic goals in 2010/11 > Focus on the expansion of renewable energy in Lower Austria and abroad - Acquisition of 13% of VERBUND Innkraftwerke GmbH in Bavaria - New windparks in Lower Austria - Capacity increase of existing small hydro power plants in Lower Austria - Completion
Slide 8: Strengthening of liquidity position and maintaining investment grade credit rating
Strengthening of liquidity position and maintaining of competitive investment grade credit rating 2010/11 > Capital increase of EVN AG by 10% to EUR 330m - The net proceeds from the capital increase of EUR 175.5m primarily benefit • EVN Group’s balance sheet and thereby supporting EVN credit rating
Slide 9: Increase coverage ratio and diversify generation portfolio
Increase coverage ratio and diversify generation portfolio Coverage ratio > Increase coverage ratio long term 70% Market entrance to 40%–60% on Group level 60% Bulgaria - Hold coverage ratio in CWE 50% Market entrance 40% Macedonia - Increase coverage ratio in SEE 68.8% 30% 56.1% 40%- 20% 39.5% 29.2
Slide 10: EVN – an attractive investment opportunity
EVN – an attractive investment opportunity 1 Growing portfolio of high quality generation assets More than 60% of revenues and more than 80% of EBITDA from stable core 2 Austrian business 3 Upside potential in SEE region Diversified business model through integration of Environmental Services 4 busi
Slide 11: Ongoing projects to double generation output by 2020
1 Ongoing projects to double generation output by 2020 Capacity development 2,845 (Pro-rata installed capacity , MW) 119 192 53 173 25 410 84 128 1,873 1,820 2,746 1,583 1,608 1,692 1,410 1,000 Status quo Walsum Wind parks 1) Ashta Gorna Arda Devoll Others 2) 2010/11 (financed) (partly financed) Sel
Slide 12: Vast majority of revenues and EBITDA generated in domestic and regulated businesses
2 Vast majority of revenues and EBITDA generated in domestic and regulated businesses Revenue breakdown by business unit 2010/111) Geographic revenue breakdown2) Enviro nmental Generatio n 3% Netwo rk Services 3,000 2,727.0 2,752.1 2,729.2 Infrastructure 12% A ustria 2,500 16% 38% 38% 40% 2,000 EURm
Slide 13: Regulated business in Austria
2 Regulated business in Austria Network Electricity Gas Comments Reset date 1 Jan 2014 1 Jan 2013 > Next reset of WACC and (Regulatory period length) (4 years) (5 years) X factor > Capex retrospectively RAB (EUR m) Not public Not public monitored each year > Set for length of WACC (pre-tax, nominal)
Slide 14: Regulated business in South East Europe
2 Regulated business in South East Europe > EVN buys energy from public provider at regulated prices and sells to end-customers at regulated prices Bulgaria Macedonia Market entry in 2005 Market entry in 2006 > Bulgaria: - 1/3 of the Bulgarian electricity market - District heating in Plovdiv Skopje
Slide 15: Upside potential from SEE market development
3 Upside potential from SEE market development Illustrative electricity sales Electricity prices for Improvement of grid volumes per customer (%)1) households (EUR cent/kWh) efficiency (%) 120 25 Upside potential 100 100 20 80 80 15 60 54 24% 22% 21% 10 17% 17% 18% 15% 16% 40 14% 13% 13% 12% 12% 20
Slide 16: Competitive business model through integration in Environmental Services
4 Competitive business model through integration in Environmental Services > Successful participation in 93 projects in 16 countries since 1983 > Strong demand for infrastructure projects set to continue > Contract volume of EUR 1.3bn with attractive return potential from international projects > Un
Slide 17: Internal hedge from investments
5 Internal hedge from investments 12.63% 50.03% 73.6% 49% 49% > #1 electricity producer in > #2 oil and gas producer in Austria > #1 green energy producer in Austria with 8.6 GW installed > One of the largest gas storage Austria with 242 MW installed capacity operators in Central Europe with capacit
Slide 18: Substantial contribution to net profit from investments
5 Substantial contribution to net profit from investments 130 116.3 > Strategic investments provide a significant contribution to EVN’s profit 110 25.0 94.0 89.4 > RAG and VERBUND are the two main 90 contributors 23.1 22.1 > Income from RAG increased by 36% from 70 50.1 9.4 EUR 44.3m in 2009/10 to E
Slide 19: Solid capital structure and rating supports
6 Solid capital structure and rating supports Net financial debt and gearing > Increase in net debt and gearing ratio due to ongoing 1,579.2 investments in Austria and South Eastern Europe 1,600 1,458.2 100% 1,400 1,378.2 > Net debt can be easily covered by financial assets 1,200 80% available for s
Slide 20: Debt maturity profile
6 Debt maturity profile 800 713.1 600 295.9 455.8 EURm__ 400 343.7 285.5 200 257.4 417.2 120.0 125.3 91.0 28.3 170.3 120.0 91.0 97.0 86.3 0 11/12 12/13 13/14 14/15 15/16 >2016 Bank loans Bonds > Redemption of EUR bond with nominal value of EUR 257.4m on December 14th, 2011 > Share of fixed interest
Slide 21: Outlook 2011/12
Outlook 2011/12 > Assumptions - Stable end customers business development - Lower or negative spreads between primary energy and electricity prices - Average temperatures in Lower Austria stable network sales volumes and lower gas and heat supply sales volumes - Stable order book in Environmental Se
Slide 22: Financial figures
Financial figures EURm 2010/11 2009/10 2008/09 2007/08 2006/07 Revenue 2,729.2 2,752.1 2,727.0 2,397.0 2,233.1 EBITDA 471.4 416.6 373.4 362.3 350.7 Group net profit 189.7 207.0 177.9 186.9 227.0 Net cash flow from operating activities 522.0 499.3 335.3 382.6 342.8 Investments1) 415.7 394.0 415.7 415
Slide 23: Agenda
Agenda 1. EVN at a glance 2. Investments and projects 3. Financial performance 2010/11 1 2 Investments and projects 3 23
Slide 24: Investments 2010/11
Investments 2010/111) 500 > Investments up 5.5% 415.7 450 394.0 415.7 > Key investments 400 67.4 48.3 - Generation 68.6 350 • Wind power and small-scale hydro power 300 104.8 112.5 projects in Lower Austria 100.7 EURm_ 250 32.5 25.3 - Network Infrastructure Austria 21.5 200 • Construction of the nat
Slide 25: Investment focus – wind parks
Investment focus – wind parks EVN’s goal Double wind capacity to 300 MW (2015) in Lower Austria EVN’s wind generation activities > Strong negotiating power Generate stable, regulated vis-à-vis turbine suppliers cash flows on a long-term basis > Focus on Lower Austria > Wind farm IRR (after tax) 7%–8
Slide 26: Windpower plants in Lower Austria
Windpower plants in Lower Austria > 9 windparks with 80 windpower facilities - Gänserndorf west (5 windpower facilities) - Gänserndorf north (5 windpower facilities) - Neusiedl / Zaya (5 windpower facilities) - Prellenkirchen (8 windpower facilities) - Japons (7 windpower facilities) - Kettlasbrunn
Slide 27: Hydropower plants in Lower Austria
Hydropower plants in Lower Austria River Inn: > 13% stake in VERBUND Innkraftwerke GmbH > Closing: July 2011 > Capacity: 41 MW (EVN stake) Schütt: © VERBUND > Capacity: 2 MW > 2,700 households > Investments: EUR 9.5m > Completion: July 2011 Schaldorf: > Capacity: 1 MW > 1,500 households > Completion
Slide 28: Hydropower plant projects in Albania
Hydropower plant projects in Albania Project Ashta on the Drin River: > Start of construction: March 2010 > Start of operations: 2013 > Capacity: 50 MW > Generation: approx. 240 GWh p.a. > Concession period: 35 years > 50:50% Joint Venture with VERBUND > Supply of 100,000 households Project Devoll:
Slide 29: Hydropower plant project in Bulgaria (Gorna Arda)
Hydropower plant project in Bulgaria (Gorna Arda) > 70% EVN stake, 30% NEK > River Arda, South East Bulgaria > Start of operations: 2019 > Total capacity: 120 MW – 170 MW (depending on particular expansion stage) > Total investments: up to EUR 500m > Approximately 350 GWh p.a. 1 2 Investments and pr
Slide 30: Photovoltaic plants in Bulgaria
Photovoltaic plants in Bulgaria Blatets: > Beginning of operation: May 2010 > Total Capacity: 836.7 kWp Trastikovo > CO2 savings: 280 t p.a. > Investments: EUR 3m Trastikovo: > Beginning of operation: July 2011 > EVN‘s largest photovoltaic park > Approx. 25,000 modules > Total capacity: 1,995 kWp >
Slide 31: Cogeneration plant in Plovdiv, Bulgaria
Cogeneration plant in Plovdiv, Bulgaria > Generation of electricity and heat > Start of construction: 2009/10 > Start of operations: end 2011 > Capacity: - Electricity: 54 MW - Heat: 50 MW > Investments: EUR 50m > Supply of ~33,600 households > Most modern cogeneration plant in the Balkans > Increas
Slide 32: Gas supply in Lower Austria
Gas supply in Lower Austria „Südschiene“ > Gänserndorf-Semmering > Completion: July 2011 > Gas pipeline: ~120 km > Investments: EUR 114m „Westschiene“: > Auersthal-Amstetten > Start of construction: June 2011 > Completion: ~ September 2013 > Gas pipeline: ~150 km > Investments: EUR 150m 1 2 Investme
Slide 33: Gas supply in Croatia
Gas supply in Croatia > Three concessions to build and operate a gas grid > Three provinces in Zadar, Split and Sibenik > Concession period: 30 years > Start of construction: April 2011 (Zadar) > Total pipeline length: 1,450 km > Approx. 130,000 households 1 2 Investments and projects 3 33
Slide 34: Waste incineration plants
Waste incineration plants Dürnrohr, Lower Austria: > Line 3, Dürnrohr > Start of operation: Early 2010 > Total capacity: 500,000 t p.a. of household residual waste and bulky waste as well as industrial and commercial waste materials treated each year > State-of-the-art and largest waste incineration
Slide 35: Waste incineration plant project
Waste incineration plant project Moscow: > December 2009: Acceptance of a tender to construct another waste treatment plant in Moscow > Investments: EUR 575m > Total capacity: 700,000 t p.a. > Start of operations: 2014 1 2 Investments and projects 3 35
Slide 36: Agenda
Agenda 1. EVN at a glance 2. Investments and projects 3. Financial performance 2010/11 1 2 3 Financial performance 36
Slide 37: Business achievements 2010/11
Business achievements 2010/11 > Stronger positioning in renewable energy - Acquisition of a 13% stake in VERBUND-Innkraftwerke GmbH - Revitalisation of the Schütt small-scale hydropower plant in Lower Austria - Two new wind parks in Lower Austria - New photovoltaic plant in Trastikovo, Bulgaria - Cl
Slide 38: Development of electricity and primary energy prices
Development of electricity and primary energy prices 90 energy prices forward 80 in EUR/MWh 70 electricity (base) 60 50 crude oil 40 30 20 gas procurement 10 coal 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 > Increase in electricity and primary energy prices - Ongoing strong demand in Asian in fi
Slide 39: Group results 2010/11
Group results 2010/11 2010/11 Change > Revenue drop in the energy business EURm 2009/10 Veränd in % offset by positive development in EUR m Environmental Services segment % Revenue 2,729.2 –0.8 Revenue 00.0 –0.0 > Higher EBIT due to one-offs EBITDA 471.4 13.2 EBITDA > Negative development in financi
Slide 40: Asset impairments 2010/11
Asset impairments 2010/11 Impairment tests, EURm 2010/11 2009/10 Assumptions used at impairment tests: 1. Gas-fired power plants –38.4 1. High gas sourcing costs from long-term supply contracts and the elimination of 2. Procurement rights at free CO2 certificates as of 2013 +31.2 hydropower plants 2
Slide 41: EBITDA development by segments
EBITDA development by segments Generation Energy Trade Energy Supply Network Infrastructure Environmental and Supply South East Europe Austria Services 220 60% 200 191.4 190.4 57.6% 180 44.3% 50% 159.1 160 39.8% 39.1% 40% 140 34.0% Margin (%) EURm_ 120 103.9 33.1% 30% 100 84.2 86.8 80 64.9 69.0 17.0
Slide 42: Generation
Generation Electricity generation 2010/11 Change > Decrease in energy generation volumes volumes (GWh) in % - Lower power generating volumes at EVN‘s Total 3,000 –9.2 own thermal power stations thereof thermal - Lower water flow conditions 1,998 –8.5 energy sources > Revenue and EBIT drop thereof re
Slide 43: Energy Trade and Supply
Energy Trade and Supply 1) End customer price adjustments > Higher sales volumes to end customers Gas (12/1/2009) –7.0% - Electricity: economic upswing and expansion of EnergieAllianz outside Austria (4/1/2011) +8.9% - Heat: higher sales of steam and heat to key accounts Sales volumes to end > Decre
Slide 44: Energy Supply South East Europe
Energy Supply South East Europe 1) Electricity price adjustments > Sales volumes development Bulgaria (7/1/2010) +2.0% - Higher electricity sales volumes in Bulgaria and Macedonia (7/1/2011) +1.9% Macedonia (1/1/2010) +5.1% > Revenue decrease (3/1/2011) +4.9% - Bulgaria: mainly due to changed report
Slide 45: Network Infrastructure Austria
Network Infrastructure Austria 1) Tariffs adjustments > Diverse network distribution volumes Electricity (1/1/2011) +1.0% - Electricity distribution volumes: increase due to economic upswing in the first Gas (1/1/2011) +10.6% half-year 2010/11 - Gas distribution volumes: decrease despite cold weathe
Slide 46: Environmental Services
Environmental Services 2010/11 Change > Revenue increase due to higher or first- EURm in % time full year earnings contribution of Revenue 346.9 21.6 projects EBITDA 68.9 31.8 - Waste incineration plant and sodium hypochlorite plant in Moscow EBIT 42.9 53.2 Profit before income tax 54.8 17.8 > Stron
Slide 47: Financial results 2010/11
Financial results 2010/11 > Financial results dropped by 50% 2008/09 -4.7 -38.5 3 47.4 46.7 50.8 > Earnings contribution from investments fell - Higher results from investments in equity 2009/10 accounted investees -0.8 -31.9 2 54.7 61.6 83.6 • RAG: up from EUR 44.3m to EUR 60.4m • BEWAG/BEGAS: up f
Slide 48: Balance sheet
Balance sheet 2010/11 Change 1) > Increase of total assets EURm in % - Increase in equity accounted Total assets 6,870.4 2.1 investees Equity 3,176.0 5.0 • 13%-stake VERBUND- Innkraftwerke Equity ratio (in %) 46.2 1.3p • Contribution to capital Net debt 1,579.2 8.3 increase of VERBUND AG Gearing (in
Slide 49: Net debt development
Net debt development 1,800 1,579.2 1,600 105.4 1,458.2 -175.5 1,378.2 1,400 1,200 1,000 EURm_ -478.1 -7.0 676.1 800 600 400 200 0 30.9.2009 30.9.2010 Gross cash flow Working Capital, Investments Dividends Capital increase 30.9.2011 Taxes, Others 1 2 3 Financial performance 49
Slide 50: Cash flow
Cash flow 2010/11 Change in > Higher Gross CF EURm % - Lower profit before income tax Gross cash flow 478.1 2.2 - Higher depreciation and amortisation Net cash flow from - Lower non-cash income from investments 522.0 4.6 in equity accounted investees operating activities Net cash flow from - Lower n
Slide 51: Disclaimer
Disclaimer Certain statements made in this presentation may constitute „Forward-Looking Statements” within the meaning of the U.S. federal securities law. Forward-looking information is subject to various known and unknown risks and uncertainties. These include statements concerning our expectations
Slide 52: EVN Investor Relations
EVN Investor Relations Additional Information: Stefan Szyszkowitz Investor information on the web Chief Financial Officer www.evn.at Phone: +43 2236 200-12132 www.investor.evn.at Fax: +43 2236 200-82132 www.responsibility.evn.at E-Mail: stefan.szyszkowitz@evn.at E-Mail: investor.relations@evn.at Klá