EVN IR News
26.02.2016

www.evn.at
www.investor.evn.at

Business development in the first quarter of 2015/16
(1 October 2015 - 31 December 2015)

Highlights

- Increase in electricity generation (+19.9%) through significantly greater use of thermal power plants to support network stability in Austria and Germany

- Weather-related decline in revenues, energy business result stable

- Group net result for the first quarter above prior year

- Cornerstone ceremony for a wastewater purification plant in Prague and completion of construction on two wastewater treatment plant projects in both Poland and Romania

- Reduction of energy prices for electricity and natural gas by an average of 5% each for household customers within the framework of EnergieAllianz Austria as of 1 October 2015; announcement of further reduction in gas price as of May 2016

- Outlook 2015/16: largely stable Group net result expected

Key results

- Revenue: -4.4% to EUR 573.3m

- EBITDA: +0.1% to EUR 185.0m

- EBIT: -1.4% to EUR 119.4m

- Financial result: +31.5% to EUR -16.7m

- Group net result: +7.9% to EUR 78.8m

- Net debt: EUR 1,181.6m (30.09.2015: EUR 1,230.9m)

Energy sector environment

The temperatures in Austria were slightly below the previous year, but again below the long-term average during the first quarter of 2015/16. The winter in Bulgaria brought temperatures that were significantly milder than both the previous year and the long-term average. In contrast, the heating degree total in Macedonia rose by 11.7% after a mild winter in the previous year.

The prices for primary energy carriers (crude oil, natural gas and hard coal) were also lower in year-on-year comparison, as were the forward and spot prices for base load and peak load electricity. The forward prices applicable to the reporting period fell by 6.9% to EUR 34.7 per MWh for base load electricity and by 6.6% to EUR 44.9 per MWh for peak load electricity.

Higher Group net result with stable EBITDA, though slightly lower EBIT

Revenue declined by EUR 26.6m, or 4.4%, year-on-year to EUR 573.3m in the first quarter of 2015/16. Higher revenue from the marketing of the electricity generated in EVN's power plants was unable to fully offset a volume- and price-related revenue decrease in Bulgaria.

The energy business result remained stable during the reporting period based on the volume-related reduction in energy procurement costs. Combined with a decline in operating expenses, among others due to further improvements in collection and cost reduction in South East Europe, EVN generated EBITDA of EUR 185.0m (previous year: EUR 184.8m).

Depreciation and amortisation rose by EUR 2.0m as a result of the Group's investment activity. EBIT totalled EUR 119.4m, which is EUR 1.8m lower than the first quarter of the previous year.

Financial results amounted to EUR -16.7m and are EUR 7.7m higher than the previous year. This change is attributable, above all, to the sale of the property company that holds the sodium hypochlorite plant in
Moscow in the previous year, which reflected the costs to terminate the investment guarantee granted by the Federal Republic of Germany for this project and the costs for the related interest rate hedge. In total, Group net result equalled EUR 78.8m in the first quarter of 2015/16; this represents an increase of EUR 5.8m over the first quarter of the previous year.

Sound balance sheet structure; reduction of net debt

EVN's positive operating results form the basis for a sound balance sheet structure. The equity ratio increased to 41.2% as of 31 December 2015 (30 September 2015: 39.8%). The dividend of EUR 0.42 per share
approved by the 87th Annual General Meeting on 21 January 2016 was paid on 29 January 2016 and is not yet reflected in equity.

Net debt declined EUR 49.3m below the level on 30 September 2015 to EUR 1,181.6m, and gearing fell to 44.3% (30 September 2015: 47.5%).

Developments in the energy and project business

Energy business

The capital expenditure programme announced by EVN in 2013/14, which calls for investments of EUR 1bn in Lower Austria over a period of four years, entered its third year as planned in the first quarter of 2015/16. Roughly 70% of the total programme will be directed to the expansion of the network infrastructure in Lower Austria. Another focus of the investment strategy is the expansion of generation capacities from renewable energy sources. EVN plans to raise its installed windpower capacity from the current level of 250 MW to above 300 MW over the next few years.

EVN's thermal power plants make an important contribution to ensuring supply security in view of the volatile electricity generation from renewable energy sources and the resulting challenges for the electricity networks. The Theiss and Korneuburg thermal power plants are again available to provide reserve capacity for southern Germany during the winter of 2015/16 and, in addition, the Dürnrohr power plant has been used to manage shortages. The use of EVN's power plants to support network stability and ensure supply security in Austria and Germany increased during the reporting period and already exceeded the entire 2014/15 financial year during the first quarter.

EVN's sales company passed on the benefits from lower energy procurement costs in the form of a price reduction. The energy prices for electricity and natural gas were reduced by an average of 5% each for household customers within the framework of EnergieAllianz Austria as of 1 October 2015. Within the framework of EnergieAllianz Austria, the operating prices for natural gas for households will be further
reduced by roughly 7% as of 1 May 2016.

Environmental business

The investments in the Environmental Services Segment are focused primarily on upgrading the water supply infrastructure in Lower Austria, for example through the improvement of the performance capability of the Waldviertel pumping stations and the construction of a natural filter plant in Zwentendorf an der Zaya that reduces the hardness of water by natural means.

In the international project business, EVN worked on realising and finalising eight projects in the Czech
Republic, Poland, Montenegro, Romania and Cyprus. Construction was successfully completed during the first quarter of 2015/16 on two wastewater treatment projects in both Poland and Romania. In the Czech Republic, construction on the renovation and expansion of a wastewater purification plant in Prague started after the receipt of the building permit.

Outlook

Under the assumption of average conditions in the energy environment, the Group net result for 2015/16 is expected to remain largely stable. Factors that could significantly influence the Group net result include the regulatory background, developments in the proceedings related to claims from the tariff decisions in Bulgaria and in connection with the Duisburg-Walsum power plant as well as the progress of the activities in Moscow.

For the complete Letter to Shareholders for the first quarter of 2015/16 see www.investor.evn.at.

Investor Relations, EVN Group

EVN AG
EVN Platz, 2344 Maria Enzersdorf, Austria
investor.relations@evn.at
www.evn.at