EVN AG

Good morning, ladies and gentlemen, and welcome to EVN's conference call for the first quarter 2025-26 financial year. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Alexandra Wittmann.

Good morning, everybody, to EVN's conference call on the results for the first quarter of our current financial year.

At first glance, today's results are fully in line with expectations, but they also show how important EVN's diversification is. Our diversified business model helped to offset challenges caused by difficult framework conditions. Our generation segment suffers from below average wind and hydro conditions. Price levels for the marketing of own production also declined year on year. The contributions from the equity consolidated companies, RAC and Burgenland Energy, were also lower. RAC's results returned to a normalized level after last year's exceptional performance. These negative developments were contrasted by, above all, a substantially better performance of the network segment, which reflects the organic growth from growing investments into the electricity grid. The implementation of our CAPEX program is in full swing. I confirm that we are committed to invest about a billion euros per annum until 2030. We are also well on track to reach our expansion targets as is evidenced by the progress made during Q1. As of end December, total wind capacity increased to 561 MW installed capacity. Our 2030 target is 770 MW. PV increased to 133 MWp. Here, the target is 300 MW. And our battery storage is currently at 12 MW and shall increase to 300 by the end of the decade. We just completed the procurement for a 70 megawatt battery storage facility, which we aim to commission by year end 27, and we then operate for flexibility management with our own in-house software. Concerning the WTE sale, I can confirm AG AG AG AG the environment segment no longer exists. Until closing of the sale, the discontinued operations are subject to IFRS 5 disclosure and are included in all other segments. Our Austrian drinking water supply business, which concerns pipeline infrastructure, has been assigned to the network segment. It accounts for 1.6% of Group EBITDA. Today, In about an hour, the annual general meeting for the previous financial year will take place. As you know, we will propose to the AGM the payment of a dividend of 90 cents per share. Ex-dividend date is the 2nd of March and dividend payment date is the 5th of March. On the next slide, I will take you through the main financial developments in the reporting period. Revenue rose by 3.3% year-on-year to 831 million euros. The main reasons were positive regulatory price effects from the network companies in Lower Austria and Bulgaria. In contrast, there was a drop in revenue from renewable generation due to price and volume effects. In addition, the reserve capacity contract for the Thais gas-fired power plants with the Austrian Transmission Grid operation APG was not extended. Last year, other operating income included the insurance compensation payments related to the slot damages. This year, there is a positive effect of 10 million euros from the badwill associated with the acquisition of a fiber infrastructure company. This acquisition will further strengthen our internet and telecommunication business. The cost of electricity purchases from third parties and primary energy expenses increased due to higher upstream network costs and higher procurement costs in the heating business. This increase was contrasted by lower procurement costs and reduced quantities of natural gas. The cost of materials and services declined as last year was impacted by slot-related repair costs. The rise in personnel expenses reflects the increase in workforce and adjustment according to the collective bargaining agreements. Other operating expenses rose due to an increase in receivables write-offs. The share of results from ad equity accounted investees dropped by about half, mainly due to the declines at RAC and Bunland Energy that I already mentioned. The further improvement in EVN KG's supply business was strengthened by a new provision for the social tariffs required under Austria's new electricity laws. In total, group EVDA was down by 2% year-on-year to 247 million euros. Scheduled depreciation and amortization increased by 8%, reflecting our high investment programs. Group EBIT declined by 8% and totaled 153 million euros. Financial results improved to minus 11 million euros. The reversal of the tax provision, which was made after the termination of a tax audit, led to a positive tax effect. In total, we generated a group net result of 127 million euros in the reporting period, which represents an increase by 10%. Now let's move on to the next slide, which provides information regarding the group's balance sheet structure. As of the end of December, EVN's net debt increased to 1.3 billion euros with a gearing of 19.7%. This comes mainly from effects at quarter end due to higher energy bill receivables during the heating season. Our financial flexibility remains secure and solid. EVN holds contractually committed ungrown credit lines in the amount of 770 million euros. Now, on the next slide, I will walk you through the developments in our segments. For the energy segment, please keep in mind that last year we had a positive one-off in our heating business. Against this backdrop, there are three main developments in this segment. 1. The operating results of our heating business were on the same level as in the previous year. The decline is due to the absence of the positive one-off. 2. The decline could not be offset by the marketing of own generation as both volumes and prices were lower. 3. and our equity consolidated supply company EVNKT was expected to continue its positive trend from last year. But the upside was strengthened by the provision for the new social service for vulnerable customers in Austria. The provision was roughly 12 million euros. Still, EVNKT's EBITDA contribution was 7.2 million euros. Together, these developments led to an EBITDA of 45 million euros compared to 51 million in the previous year. EBIT came in at 37 million euros. Now let's move on to our generation segment. Electricity generation volumes in this segment declined by 13% year-on-year, mainly due to lower wind and water flows in Austria. Combined with declining market prices, This led to lower revenue and earnings from electricity generation. The new wind paths and repowerings commissioned over the past year could not fully offset these price and volume effects. Thermal generation volumes declined too, as the contract for the supply of reserve capacity from the child power plant ended in September 2025 and was not renewed by APT. We will keep the price plant operational for the time being, but it is not producing for the market either. We plan to apply again for the upcoming period starting on 1st October. Our equity-accounted Investeeverbund Inkraftwerke contributed lower earnings compared to the previous year due to weaker water flows and lower market prices. In total, the segment EBITDA was down by half and stood at 26 million euros. EBIT amounted to 40 million euros. Next is the network segment. The network segment comprises the regulated electricity and gas distribution business in Lower Austria, the internet and telecommunication business in our domestic supply area. As of this financial year, the segment also includes the drinking water business in Lower Austria. It is an unregulated infrastructure business which will see organic growth over the coming years. The internet and telecommunications business acquired a fiber infrastructure company in Q1. The acquisition had a positive effect of 10 million euros in the P&L related to a bad rate. Apart from these factors, segment results are reflecting the ongoing high investments in the network infrastructure business and related rough growth. Due to the higher tariff, EBITDA was up at 127 million euros and EBIT totaled 77 million euros. All in all, a solid first quarter of our regulated business. In line with our strategy 2030 and our CapEx plan, investments in the electricity grid will remain high and will support further rough growth. In recent meetings with investors and the sell side, we received many questions regarding details of our grid investment. Therefore, I would like to share the following slide with you. Until 2030, we will invest up to 470 million euros annually into our electricity networks infrastructure. The split is as follows, based on total grid investments until 2030. 65% will be invested in substations. 20% in the low and medium voltage grid, 5% in high voltage, which means 110 kV, and about 10% in transformer stations. Or in other words, each year we will install 1,000 kilometers of medium and low voltage cables and we will construct 700 new transformer stations until 2030. We will newly construct or expand about 55 substations. All these investments are required to increase our network capacity in order to be able to integrate the growing and volatile renewable generation from wind and TV. Finally, let's move on to the Southeast Europe segment. This segment had a strong Q1. This was supported by, among others, positive regulatory effects in the Bulgarian grid business, as well as higher energy demand in North Macedonia due to colder weather. Segment EBITDA was up by 8 million euros and reached 39 million euros. Segment EBIT was 15 million euros in Q1. As in Lower Austria, we also started constructing large battery storage facilities that are co-located with large PV plants. Around one-third of our 3,300 MW battery storage target for 2030 will be built in Bulgaria and North Macedonia. Let me now continue with the development of our group cash flows. Gross cash flow rose by 9.5% year-on-year to €181 million. The main reason was the lower correction of non-cash earnings components. Cash flow from operating activities totalled €-51 million and was influenced by a seasonal increase in short-term receivables. Cash flow from investing activities amounted to €36. and reflected a substantial increase in investments and a reduction of investments in cash funds. The cash flow from financing activities was minus 6.4 million euros and included schedule repayments. In the previous year, a new bank loan of 50 million euros had been closed. The next change in cash and cash equivalents amounted to minus 21 million euros. Finally, let's come now to the outlook for this current financial year. I confirm our guidance for this financial year. We expect group net results to be within the range of 430 million to 480 million euros. This is under the assumption of a stable regulatory and energy policy environment. Based on our massive investment program of around 1 billion euros per year, We aim for an organic growth of results over the next year. I therefore reiterate our financial ambition for 2030. EBITDA will range between 1.1 and 1.2 billion euros. Based on EBITDA of 900 million euros in the last financial year, this implies an annual growth rate of 8% per annum.

That's the end of our presentation and we are looking forward to answering your questions.

Thank you very much. Dear ladies and gentlemen, if you would like to ask a question, please press 9 and star on your telephone. If you would like to withdraw your question, please press 3 and star. So please press 9 and star to register your question now. The first question comes from Patrick Steiner from ODDO.

Mr. Steiner, please go ahead. Good morning. It's Patrick speaking. Thank you very much for taking my question.

I have three, if I may, firstly, on the battery storage pieces. I mean, we're planning to go from 12 to 300 megabytes by 2030. Could you speak a bit about fundamentals, capex, and expected earnings and cash flows? That was the first one. Second one is on TICE after the contract with ABG is ending. Basically, what are the long-term plans on the TICE power plant? And the third one is if you could give a bit more color on the impact of the social tariff for vulnerable customers in Austria. Thanks.

Thank you, Patrick. I will start with the TICE question. First of all, the TICE power plant is or has been fully written off. So when APT didn't extend the contract for reserve capacity last summer, we decided to keep the plant ready for operation for the time being, but without any specific plant to use it for actual generation. Based on this decision, we were able to reduce OPEX to a minimum. And remember, TICE is an energy hub, So we also have PV as well as heat and electricity generation from biomass and steam. So we will build a large battery storage facility there. This means that we need our employees there for other tasks. So we think we can also reduce potential impacts from personnel costs. And we also plan to

apply again for a reserve capacity contract, I think, by October 1st. So then the second question was about the battery, right?

So the battery, the 70 megawatt battery will be installed in TICE, yeah?

And it's a capex volume of around 50 million euros. And your third question was?

Yes, the third question was on the impact of the social tariff for vulnerable customers in Austria.

I touched it briefly. The social tariff is about 12 million euros and it's reflected in the three-year guidance already.

All right, perfect. Thank you very much. That's super helpful.

Thank you, Patrick.

Thank you very much. And the next question comes from Emmanuel Ogioni from Kepler.

You have the floor. Thank you, Monica, everybody.

Thank you for the presentation and for taking my question as well. The first one is on the cash flow. We know that usually in Q1 there is a seasonal negative cash flow, but I wonder if this is fully in line with your expectation for the year and what is your guidance for the debt at the end of this 26 fiscal year. This is the first question. And the second question is a question about The expectation of the change in the market design in Europe, the starting point was the move of the Italian government in its energy bill trust law, but also other, for example, German PM, Prime Minister, other countries, etc., are pushing for stripping out the ETS CO2 allowances to the prices in the formulation of the price of the energy. So this means structurally a lower power price in the coming years even lower than expected and already included in the backwardation of the forward cars so what is your opinion on that if feasible or not and what if also could you remind us the sensitivity of for each 10 euro per megawatt hour change in the in the price of the electricity, which is the impact on your P&L, obviously, before, without considering the aging. Thank you.

Thanks for the question, Emanuele. I will start with the cash flow and the next question. I maybe repeat myself. So for Q1, it's really traditionally low because of the cooler weather conditions and hence also the receivable situation mainly in the grid company increases. So that's not something unusual. We expect a cash flow of around 900 million for the full year. And also on the net debt, it's now 1.3 billion and will be stable this year as we have the impact of the sale of our international project business. Other than that, as we discussed also in Frankfurt, after those years, the net debt will increase by roughly up to 200 million per year. So nothing has changed there. Then your question on the political market, you were referring to mainly CO2 and the pushing out of the target from 2030 to 2040. I think it will affect in the supply, but also positive in generation due to the higher power prices.

Does that cover your question? Okay.

Okay.

Thank you.

Thank you.

Thank you very much. And the next question comes from Peter Crampton from Barclays. Mr. Crampton, please state your question.

Good morning.

Peter Crampton here from Barclays. Thank you for taking my question. It was mainly a bit of kind of an update from EVN. We've had a few European utilities talk about this data center kind of optionality and kind of flagging that they sometimes are in talks for kind of utility sites around potential kind of data center projects. And I was just wondering, given some of the land you own and big presence in Lower Austria, whether there have been any such talks and maybe a little bit of a debate around numbers and expectations. Thank you.

Thanks, Peter. And yes, there are talks around data centers. I think at the moment, the The province of Lower Austria is also working on a zoning concept and we are also in talks of, we are participating in these zoning discussions. We give views on where could be a good location for a data center which ideally is close to an energy hub like, for example, Thais, but also we have at the moment I think 8 to 10 proactive inquiries for data centers we treat them of the first come first serve priority and with a down payment for the grid access and then we have it fixed in our grid expansion plans and depending on if the inquirers get the land and the certification and everything, we will proceed with granting the grid access.

Does that answer your question or did I miss something?

No, I think that's a good answer and obviously highlights the opportunity. Thank you very much.

Thank you very much. At the moment, we have no further questions. Once again, if you would like to ask a question, please press 9 and star on your phone. We would give you a couple of more seconds to see if there's any more questions coming in.

That is not the case.

Thank you very much, and I would like to hand over to Alexandra Wittmann one more time.

Thank you, and thanks for joining today's conference call.

We will publish the results for the first half of the current financial year on Wednesday, 28th of May, and please save the date for our Capital Markets Day, which will be held on the 1st of October in London.

Hope to see you all. Goodbye and have a great day.

Thank you very much for participating in the conference call. This concludes the call.