EQS-News: VERBUND AG: 2023 annual results: VERBUND posts encouraging business performance in 2023

EQS-News: VERBUND AG / Key word(s): Annual Results
   VERBUND AG: 2023 annual results: VERBUND posts encouraging business
   performance in 2023

   14.03.2024 / 07:58 CET/CEST
   The issuer is solely responsible for the content of this announcement.

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   The VERBUND Group’s strategic and economic development in 2023 took place
   in a highly complex environment that was impacted in no small measure by
   geopolitical turmoil and macro- and microeconomic factors, along with
   sector-specific developments and regulatory/political decisions. Overall,
   2023 was a very successful year for our Group, and as a strong, resilient
   company with a good positioning we can look ahead to financial year 2024
   with optimism. The military conflicts between Russia and Ukraine as well
   as in the Middle East changed the structure of Europe’s energy supply with
   primary fuels, which in turn affected the electricity price trends in the
   European wholesale markets. Not only did increased procurement of
   non-Russian gas keep purchase prices high, but price volatility also rose
   due to growing uncertainty about future developments. In addition, rising
   inflation combined with repeated interest rate hikes and a slowdown in
   economic growth weighed on performance in the sector and VERBUND’s own
   performance. Higher financing and procurement costs impacted investing
   activities and eroded the profitability of new projects. Furthermore, the
   sharp rise in electricity and gas prices was passed on to customers only
   in part and with a time lag, and also led to discussions about changing
   the electricity market design and taxation of windfall profits. With these
   difficult conditions as a backdrop, the energy sector is still in the
   midst of a transformation of the energy system towards decarbonised
   generation of electricity using new renewable sources of energy. Expansion
   of the domestic power grid along with further research and integration of
   storage technologies into the energy system are absolutely essential for
   developing these more volatile forms of generation and rising to the
   energy transition challenge.

   VERBUND’s strong business performance in 2023

   VERBUND considerably increased its results of operations and significantly
   improved all relevant KPIs. EBITDA climbed by 42.1% year-on-year to
   €4,490.5m. The reported Group result rose by 32.0% to €2,266.1m and the
   Group result after adjustment for non-recurring effects was up 49.1%
   (non-recurring effects in 2023: €–349.7m; 2022: €–37.9m). At 0.98, the
   hydro coefficient for the run-of-river power plants was 2 percentage
   points below the long-term average, but 12 percentage points above the
   comparative prior-year figure. Generation from the annual storage power
   plants was up 9.6% year-on-year in 2023. Generation from hydropower thus
   increased by 3,755 GWh to 30,509 GWh. The sharp rise in wholesale
   electricity prices on the futures markets that were relevant for the
   reporting period also gave earnings a large boost. By contrast, prices on
   the spot markets declined in 2023. The average sales price achieved for
   own generation from hydropower climbed by €52.0/MWh to €167.1/MWh.
   Furthermore, higher generation from photovoltaic installations and wind
   power plants, especially from the commissioning of new power plant
   capacity in Spain, had a positive effect, as did significantly higher
   earnings contributions from Gas Connect Austria GmbH and Austrian Power
   Grid AG in the Grid segment. This stood in contrast to the reduction in
   earnings caused by a significant decrease in thermal generation, the lower
   contribution from flexibility products and the negative earnings
   contribution from the Sales segment attributable – among other things – to
   high procurement costs for electricity that were not passed on to
   consumers in full. The measures to tax windfall profits likewise had an
   aggregate negative impact of around €95m on EBITDA.

   Higher dividend

   A dividend of €4.15 per share for financial year 2023 will be proposed to
   the Annual General Meeting on 30 April 2024. This dividend breaks down
   into a regular dividend of €3.40 per share plus a special dividend of
   €0.75 per share. The one-off special dividend will allow shareholders to
   participate in the Group’s extraordinarily positive business performance
   for financial year 2023 by means of a higher payout. The payout ratio
   (regular dividend plus special dividend) for 2023 will be 63.6% of the
   reported Group result or 55.1% of the Group result after adjusting for
   non-recurring effects. The payout ratio for 2023 relating to the regular
   dividend will be 45.2% based on the Group result after adjustment for
   non-recurring effects.

   Forecast for 2024

   Based on expectations of average levels of own generation from hydropower,
   wind power and solar power as well as the opportunities and risks
   identified, VERBUND expects EBITDA of between around €2,600m and €3,300m
   and a Group result of between around €1,300m and €1,750m in financial
   year 2024. VERBUND’s planned payout ratio for the financial year 2024 is
   between 45% and 55% of the Group result of between around €1,300m and
   €1,750m, after adjusting for non-recurring effects.

   The earnings forecast and the information on the expected payout ratio are
   contingent on VERBUND not being impacted by any further measures to
   partially tax windfall profits at energy companies.

    

   KPIs                                         Unit     2022     2023 Change
   Revenue*                                       €m 10,346.1 10,449.5   1.0%
   EBITDA                                         €m  3,160.7  4,490.5  42.1%
   Operating result                               €m  2,626.2  3,501.9  33.3%
   Group result                                   €m  1,717.0  2,266.1  32.0%
   Earnings per share                              €     4.94     6.52  32.0%
   EBIT margin*                                    %     25.4     33.5      –
   EBITDA margin*                                  %     30.5     43.0      –
   Cash flow from operating                       €m  2,019.9  5,083.0      –
   activities*
   Free cash flow before                          €m    452.1  3,651.6      –
   dividends*
   Free cash flow after                           €m    –25.7  2,098.1      –
   dividends
   Net debt/EBITDA                                 X      1.2      0.4      –
   Performance of VERBUND shares                   %    –20.5      6.9      –
   (Proposed) dividend per share                   €     2.44     3.40  39.3%
   (Proposed) special dividend                     €     1.16     0.75 –35.3%
   per share
   Share of generation from                        %     95.6     97.8   2.4%
   renewables
   Specific GHG emissions (Scope g CO[2]e/kWh            16.8      7.9 –53.0%
   1/total electricity
   generated)**

   * calculation adjusted retrospectively in accordance with IAS 8 in
   financial year 2021 with effect from 1 January 2020

   ** from electricity generation and transmission (excl. GCA) as a
   percentage of total electricity generated (incl. purchase rights, excl.
   electricity generated for district heating). Preliminary figures before
   ETS audit

    

   Additional information on the non-financial KPIs can be found in the
   Integrated Annual Report 2023, available on the website www.verbund.com >
   About VERBUND > Investor Relations > Latest financial results.

    

   Contact: Andreas Wollein
   Head of Group Finance and Investor Relations
   T.: +43 (0)5 03 13 - 52604
   F.: +43 (0)5 03 13 - 52694
   mailto:investor-relations@verbund.com

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   14.03.2024 CET/CEST This Corporate News was distributed by EQS Group AG.
   www.eqs.com

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   Language:    English
   Company:     VERBUND AG
                Am Hof 6A
                1010 Wien
                Austria
   Phone:       0043-1-53113-52604
   Fax:         0043-1-53113-52694
   E-mail:      investor-relations@verbund.com
   Internet:    www.verbund.com
   ISIN:        AT0000746409
   WKN:         877738
   Indices:     ATX
   Listed:      Vienna Stock Exchange (Official Market)
   EQS News ID: 1858343


    
   End of News EQS News Service


   1858343  14.03.2024 CET/CEST

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