Market environment and performance
Economic development in Europe fell short of expectations during the course of the year due to the Ukraine crisis and the related sanctions against Russia, while growth in the USA continued to gain momentum. This growing gap between the European and US economies was also reflected in divergent central bank policies. While the US Federal Reserve (Fed) announced its plans to gradually end the previous support measures, the European Central Bank (ECB) followed a series of three cuts in the prime lending rate from 0.50% to the current level of 0.05% at the beginning of October by announcing its intention to launch a securities purchase programme. This measure is designed primarily to provide relief for bank balance sheets and to stimulate economic growth through an increase in lending.
Developments on the international stock markets were positive, in spite of the on-going difficult environment, and included a number of new historical highs. The German benchmark index DAX rose by 10.2% from October 2013 to September 2014, while the US Dow Jones index increased 12.7%. The performance of Vienna’s benchmark index ATX presented a different picture with a loss of 12.8% during this same period. The difficult market climate for utility companies also had a negative influence on the EVN share, which declined by 10.3%. In comparison, the DJ Euro Stoxx Utilities, the relevant industry index for EVN, rose by 23.2%. The EVN share closed the 2013/14 financial year at EUR 10.125, which reflects a market capitalisation of EUR 1.82bn as of 30 September 2014. The average daily turnover in EVN shares declined year-on-year to 45,167 (single counting), which represents an annual trading volume of EUR 120.4m (single counting) for EVN shares and 0.53% of the total trading volume on the Vienna Stock Exchange. EVN was weighted at 0.87% in the ATX Prime at the end of September 2014.
Share buyback programme
The 85th Annual General Meeting on 16 January 2014 authorised the Executive Board of EVN AG to repurchase the company‘s bearer shares for the purpose of distribution to employees of the company or its subsidiaries. This authorisation covers the repurchase of up to 10% of the share capital of EVN AG during a period of 30 months. At the same time, the resolution of the Annual General Meeting on 19 January 2012 authorising a share buyback by EVN AG was terminated prematurely on 16 January 2014. This resolution had resulted in the repurchase of 1,640,030 EVN shares over the Vienna Stock Exchange between 6 June 2012 and 15 January 2014, which represent 0.91% of share capital. On 16 January 2014, based on the authorisation of the 85th Annual General Meeting, the Executive Board approved a share buyback programme with a term ending on 30 September 2014; this programme was extended from 30 September 2014 to 30 June 2015 based on a resolution by the Executive Board. The new share buyback programme led to the repurchase of 117,500 shares by 30 September 2014, which equal 0.06% of share capital. EVN AG held 1,939,992 treasury shares as of 30 September 2014, including the shares repurchased in earlier years, which represent approx. 1.1% of share capital.
Strategy for the use of financial resources and dividend
EVN’s strategy includes establishing a balance between current investment projects and attractive dividends for shareholders. This strategy is reflected in a targeted payout rate of 40% of Group net profit over the long term. The Executive Board will make a recommendation to the 86th Annual General Meeting on 15 January 2015, calling for the payment of a EUR 0.42 dividend per share for the 2013/14 financial year.
The 85th Annual General Meeting on 16 January 2014 approved the payment of a dividend totalling EUR 74.8m, or EUR 0.42 per eligible share, to the shareholders of EVN AG for the 2012/13 financial year. The ex-dividend day was 21 January 2014, and the payment to shareholders was made on 24 January 2014.
|Share price at 30 September||EUR||10.13||11.29|
|Total shareholder return||%||-6.6||8.1|
|Dow Jones Euro Stoxx Utilities performance||%||23.20||0.50|
|Value of shares traded2)||EURm||120||136|
|Average daily turnover2)||Shares||45,167||50,544|
|Share of total turnover2)||%||0.53||0.74|
|Market capitalisation at 30 September||EURm||1,821||2,031|
|WBI (Vienna Stock Exchange Index) weighting||%||2.29||2.47|
|Earnings per share3)||EUR||-1.68||0.61|
|Dividend per share||EUR||0.424)||0.42|
|Cash flow per share3) 5)||EUR||1.90||3.01|
|Book value per share3)||EUR||14.80||17.26|
|Price/earnings per share||X||-||18.4|
|Price/cash flow per share5)||X||5.3||3.7|
|Price/book value per share||X||0.8||0.7|
|1) The figures for the prior year were adjusted retrospectively according to IAS 8 (see note 2. Reporting accoding to IFRS).|
2) Vienna Stock Exchange, counted once
3) Shares outstanding at 30 September
4) Proposal to the Annual General Meeting
5) Gross cash flow
- Details on the current Debt Issuance Programme can be found on the EVN Website under www.evn.at/financial-strategy.