VERBUND Annual result 2020

Despite the COVID-19 crisis, financial year 2020 was very pleasing for VERBUND, with very good results and a strong performance by the VERBUND share. This development shows that the sustainable business model works well, particularly in times of crisis, and the company has a high degree of flexibility and resistance to external forces. As supplier with almost 100% renewable energy sources, VERBUND is ideally positioned for a decarbonised, decentralised and digitised energy future.

The environment in which the energy industry operates worsened very rapidly for VERBUND in 2020 due to the COVID-19 pandemic. Wholesale prices for electricity fell after the outbreak of the crisis in Europe due to the lower demand for electricity, an oversupply of CO2 certificates and lower prices for coal, gas and oil. After the situation worsened in the first half of 2020, the underlying conditions of the energy industry improved again from the middle of the year. The wholesale prices for electricity recovered and the prices for coal, gas and CO2 certificates also developed with greater stability from the middle of 2020. 
The good positioning combined with the improved situation in the energy industry was also rewarded accordingly on the capital market. The VERBUND share finished 2020 with annual performance of +56.1%, thereby growing much better than the ATX and the STOXX Europe 600 Utilities. Market capitalisation as at 31 December 2020 was 24.3 billion euros.  VERBUND was therefore the highest valued company on the Vienna Stock Exchange. The rating agencies S&P and Moody’s confirmed the good rating of VERBUND AG with “A/stable outlook” and with “A3/stable outlook” respectively. VERBUND is thus in the group of leading suppliers in Europe. 

Earnings performance

The VERBUND result for financial year 2020 increased despite the negative effects of COVID-19. EBITDA rose by 9.2% to 1,292.8 million euros. The group result rose by 13.8% compared to the previous year to 631.4 million euros. The generation coefficient of the run-of-river power plants was 1.01, at the same level of the previous year and 1 percentage point higher than the long-term average. Generation at the annual storage power plants rose sharply by 14.7% in Q1-4/2020. Generation from hydropower therefore increased by 864 GWh compared to the previous year’s reporting period. Futures market prices on the wholesale market for electricity rose in the relevant hedging period and also had a positive impact on earnings performance. In contrast, spot market prices fell sharply in 2020 – in particular due to the effects of the COVID-19 crisis. The average sales price achieved in the area of own generation from hydropower increased by 5.6 EUR/MWh to 44.6 EUR/MWh on the basis of these developments. The EBITDA contribution in the water segment therefore rose sharply. The EBITDA contribution in the sales segment also increased, while the contributions in the New Renewables, Grid and All other segments declined. The financial result developed very pleasingly, amongst other things due to a sharp reduction in interest expense caused by high repayments in financial years 2019 and 2020. The group results for financial years 2019 and 2020 were also influenced by non-recurring effects. Adjusted for these non-recurring effects, the group result rose by 11.2% to 610.4 million euros. All key figures relevant to control were also improved. Debt was once again significantly reduced, the margins considerably improved and the return on capital employed sharply increased. 

Dividend 2020

The general meeting of 20 April 2020 proposed a dividend of €0.75 per share 
for financial year 2020. The dividend yield for 2020 is 41.3% based on the reported group result and 42.7% based on the group result adjusted for non-recurring effects.

Outlook for 2021

On the basis of average own generation from hydropower and wind power as well as the opportunity and risk situation, VERBUND expects EBITDA of between around 1,080 million euros and 1,300 million euros and a group result of between 450 million euros and 590 million euros for financial year 2021. Financial effects from the planned acquisition of the 51% share in Gas Connect Austria GmbH are not considered in this earnings forecast. For financial year 2021, VERBUND is planning a distribution ratio of between 45 and 55%, based on the group result adjusted for non-recurring effects of between around 450 million euros and 590 million euros.