DGAP-News

VERBUND AG: results for quarters 1-3/2016: sound earnings performance and raised earnings outlook for 2016

DGAP-News: VERBUND AG / Key word(s): 9-month figures/Quarter Results
VERBUND AG: results for quarters 1-3/2016: sound earnings performance and
raised earnings outlook for 2016

09.11.2016 / 07:58
The issuer is solely responsible for the content of this announcement.

---------------------------------------------------------------------------

Since bottoming out in early 2016, wholesale electricity prices in the
European energy markets have recovered, mainly due to a rise in prices for
primary energy sources. Conditions in the energy market remain challenging,
however.

Implementation of the programme approved by the VERBUND Executive Board
with a view to further reducing debt has been consequently continued. The
measures under the programme to reduce costs and increase efficiency
include significantly reducing capital expenditure, freezing costs at 2015
levels through to 2019 and reducing the payout ratio for 2016 to around
30%. This already had a positive impact on VERBUND's rating. Moody's and
Standard & Poor's left their rating at Baa2 and BBB respectively, but
raised the outlook from negative to stable.

Compared with the previous year, earnings were on a positive trend in
quarters 1-3/2016: both EBITDA and the Group result, adjusted and
unadjusted, showed a sharp increase. The year-on-year improvement in water
supply had a positive impact on earnings. Represented by a hydro
coefficient of 1.01, this was up 7 percentage points compared to the level
in quarters 1-3/2015 and 1% above the long-term average. Earnings were also
boosted by the settlement of various outstanding issues between VERBUND and
EconGas related to gas deliveries for the Mellach combined cycle gas
turbine power plant, the implementation of measures under the programme to
reduce costs and increase efficiency, and higher (adjusted) contributions
from the regulated Grid segment. The further decrease in average
electricity sales prices, on the other hand, had a negative impact on
earnings performance. These fell from EUR35.0/MWh at year-end to EUR30.6/
MWh.
EBITDA increased by 11.5% to EUR809.7m in total. The Group result was up by
48.7% on the prior-year quarters to EUR339.9m. Overall, however, earnings
for quarters 1-3/2016 were impacted by positive non-recurring effects.
After adjusting for these non-recurring effects, the Group result rose by
12.7% to EUR276.4m and adjusted EBITDA by 2.8% to EUR698.4m.

Earnings outlook for 2016 raised
Given the positive trend in earnings in quarters 1-3/2016, we are raising
our earnings forecast for the full year. Assuming an average water supply
and average wind supply in the fourth quarter of 2016, we are expecting
EBITDA of approximately EUR980m and a Group result of approximately EUR385m
for financial year 2016. The planned payout ratio for 2016 will amount to
around 30% of the Group result of approximately EUR315m after adjustment
for non-recurring effects.

KPIs
                          Unit                Q1-3/2015  Q1-3/2016  Change
Revenue                   EURm                  2,106.5    2,122.8    0.8%
EBITDA                    EURm                    726.1      809.7   11.5%
Operating result          EURm                    386.4      466.4   20.7%
Group result              EURm                    228.7      339.9   48.7%
Earnings per share        EUR                      0.66       0.98   48.7%
EBIT margin               %                        18.3       22.0       -
EBITDA margin             %                        34.5       38.1       -
Cash flow from operating  EURm                    581.6      657.6   13.1%
activities
Free cash flow before     EURm                    552.2      489.8  -11.3%
dividends
Gearing                   %                        68.9       59.4       -

Further information and the interim report for quarters 1-3/2016 are
available at www.verbund.com > Investor Relations > Latest financial
results.

Contact:
Andreas Wollein
Head of Group Finance and Investor Relations
T.: [phone] - 52604
F.: [phone] - 52694
mailto:[e-mail]


---------------------------------------------------------------------------

09.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de

---------------------------------------------------------------------------

Language: English
Company: VERBUND AG
Am Hof 6A
1010 Wien
Austria
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Internet: www.verbund.com
ISIN: AT0000746409
WKN: 877738
Indices: ATX
Listed: Foreign Exchange(s) Wien (Amtlicher Handel / Official
Market)


End of News DGAP News Service
---------------------------------------------------------------------------

518753 09.11.2016