First Read: Verbund "Conference call focused on changes to windfall profit..."

Research evidence excerpt

First Read: Verbund "Conference call focused on changes to windfall profit..."

downside risk to the guidance, in our view. Verbund stated it

has spent c€60m on volumes buyback. Wanda Serwinowska, CFA

Analyst

wanda.serwinowska@ubs.com

Potential changes to the windfall profit tax

+44-20-7568 3980

There has been ongoing discussion within the Austrian government on potential

Mark Freshney

changes to the windfall profit tax (a change to the cap or to the framework). The CFO

stated that many options have been discussed, and it remains unclear which option will mark.freshney@ubs.com

be implemented. The CFO expects the Finance Ministry to continue to target €400m +44-20-7568 3989

contribution from the windfall profit tax from the industry, of which Verbund would

Gonzalo Sanchez-Bordona

contribute c40% (i.e. €160m). This comes on top of the other measures (incl. the social

tariff). gonzalo.sanchez-bordona@ubs.com

+34-91-745 4147

Trading environment remains challenging

Verbund CFO sees the current trading environment as "very difficult" as it is not driven

by the data (supply and demand) but by the daily newsflow and market assumptions

regarding the Middle East conflict. This is in line with comments from Engie and RWE.

During the Q1 results, Engie highlighted more challenging conditions in electricity

markets in both Europe and the US. This resulted in limited opportunities to capture

value from volatility. Comparing the current energy crisis to the one in 2022-23,

Highlights (€m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 10,556 8,375 8,153 8,007 8,000 8,058 8,123 8,195

EBIT (UBS) 3,502 2,726 2,113 1,583 1,582 1,252 1,145 1,333

Net earnings (UBS) 2,616 1,976 1,472 1,021 1,007 774 704 836

EPS (UBS, diluted) (€) 7.53 5.69 4.24 2.94 2.90 2.23 2.03 2.41