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 activities* |
€m |
2,019.9 |
5,083.0 |
– |
| Free cash flow before dividends* |
€m |
452.1 |
3,651.6 |
– |
| Free cash flow after dividends |
€m |
–25.7 |
2,098.1 |
– |
| 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 per share |
€ |
1.16 |
0.75 |
–35.3% |
| Share of generation from renewables |
% |
95.6 |
97.8 |
2.4% |
| Specific GHG emissions (Scope 1/total electricity generated)** |
g CO2e/kWh |
16.8 |
7.9 |
–53.0% |
* 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