VERBUND (VER) Q3 2024 earnings summary

Executive summary

• EBITDA fell 26% to €2,625.2m and group result dropped 30% to €1,387.2m for Q1-3/2024, mainly due to lower electricity prices despite higher hydropower output.

• Hydropower output increased, with the hydro coefficient at 1.07, 7–14 percentage points above the prior year, boosting generation 12.8% year-over-year.

• Investments continued in hydropower, grid expansion, and renewables, including major projects in Austria and acquisitions in Italy.

• Share price declined 11.4% YTD, underperforming the ATX and STOXX Europe 600 Utilities indices.

• Flooding and storms in Q3 2024 highlighted climate change impacts and affected operations.

Financial highlights

• Revenue decreased from €9,789.9m to €8,548.2m year-over-year; EBITDA margin improved to 45.0% from 36.3%.

• Operating cash flow declined 44% to €2,332.8m; free cash flow after dividends was negative at -€392.5m.

• Net debt increased 34.8% to €2,370.1m; gearing rose to 22.2% from 15.7% at 2023 year-end.

• Depreciation increased 10% to €427m due to asset acquisitions and grid investments.

• Additions to property, plant, and equipment were €719.7m, down 27% year-over-year.

Outlook and guidance

• 2024 EBITDA guidance raised to €3,200m–€3,400m; group result expected at €1,700m–€1,800m, assuming average Q4 generation.

• Payout ratio planned at 45–55% of adjusted group result (€1,800m–€1,900m).

• Sensitivities: ±1% hydro generation impacts group result by ±€3.1m; ±1% wind/PV by ±€0.4m; ±€1/MWh in wholesale price by €0.7m.