Financial year 2019 was a very important and gratifying year for us. Important because we adopted additional key strategic objectives that will have positive effects for the future of the Group. Gratifying because we again delivered a highly respectable economic performance, which confirms our chosen strategy. We firmly believe that as a utility that almost exclusively uses renewable energy sources we are ideally positioned for a decarbonised, decentralised and digitalised future of energy.
The improvements in the energy market climate, especially the sharp rise in average sales prices for electricity and higher prices for CO2 emission rights, fuelled the results trend in 2019. This in turn was rewarded by the capital market and in addition to the strong performance of VERBUND shares, which were trading 20.1% higher in 2019, resulted in two rating upgrades for VERBUND AG. S&P increased its rating for VERBUND AG from A-/stable outlook to A/stable outlook. Moody's raised its rating from Baa1/positive outlook to A3/stable outlook. As a result, VERBUND is one of Europe's best-rated utilities.
The results posted by VERBUND for financial year 2019 are highly encouraging. All of the Group's management KPIs saw a considerable improvement. This growth is mainly due to a sharp rise in average sales prices attributable to higher price levels for wholesale electricity. The average sales price for our own generation from hydropower increased by €9.7/MWh to €39.0/MWh. Generation from hydropower was also up year-on-year. The hydro coefficient for the run-of-river power plants came to 1.01, or 7 percentage points above the prior-year figure and 1 percentage point above the long-term average. The earnings contribution from the Grid segment likewise improved compared with the prior-year reporting period as a result of higher temporary additional revenue.
EBITDA, the operating result before depreciation and amortisation, increased by 36.9% to €1,183.5m and the Group result was up 28.1% on the previous year to €554.8m. Adjusted for non-recurring effects, EBITDA rose by 37.1% and the Group result climbed by as much as 60.4% to €549.0m. The Group's financial performance also saw a marked improvement. Cash flow from operating activities surged by 81.3% to €1,204.3m and the free cash flow after dividends reached a record figure of €639.3m. This financial strength enabled us to reduce our debt level. Net debt/EBITDA as at 31 December 2019 stood at 1.9, putting us in the group of top-performing European utilities. The Group also achieved record figures in terms of profitability and returns. The return on capital employed (ROCE) and return on equity improved to 7.8% and 10.2%, respectively. The EBITDA margin is a gratifying 30.4%.
Dividend for 2019
A dividend of €0.69 per share for financial year 2019 will be proposed at the Annual General Meeting to be held on 28 April 2020. The payout ratio for 2019 will amount to 43.2% based on the reported Group result, or 43.7% after adjustment for non-recurring effects.
Outlook for 2020
On the basis of average own generation from hydropower and wind power as well as the existing opportunities and risks, VERBUND expects EBITDA of approximately €1,150m to €1,340m and a Group result of approximately €510m to €630m for financial year 2020.
For 2020, VERBUND is planning a dividend payout ratio of 40% to 50% of the Group result of approximately €510m to €630m after adjustment for non-recurring effects.
|Earnings per share
|Cash flow from operating activities
|Free cash flow before dividends
|Free cash flow after
|Performance of VERBUND shares
|(Proposed) dividend per share
|Greenhouse gas emissions
Scope 1 direct
emissions (Scope 1/
total electricity generated)
* The calculation was adjusted retrospectively in accordance with IAS 8 in financial year 2019 with effect from 1 January 2018.
** The value for 2018 was adjusted retrospectively.
Further information and non-financial indicators can be found in the 2019 Integrated Annual Report available at www.verbund.com > Investor Relations > Latest financial results.
Head of Group Finance, M&A and Investor Relations
T.: +43 (0)5 03 13 - 52604
F.: +43 (0)5 03 13 - 52694
18.03.2020 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