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2021/05/03 / Erste Group Research

Verbund: Credit metrics and ESG goals well on track

Verbund reported good figures for the 2020 financial year despite the pandemic. Profitability was significantly above the segment average (Stoxx 600 Utilities) and above the peer median. Net debt has been declining continuously since 2015. As a result, all credit ratios improved again in 2020. Due to the good financial profile coupled with a strong market positioning and a stable business model, Verbund's rating was recently confirmed by the agencies Moody's (A3, stable) and S&P (A, stable).

Verbund acquired OMV's 51% share in Gas Connect Austria in 2020. The signing of the contracts took place in September 2020, the closing will take place in 2Q 2021, subject to regulatory approvals.

For the 2021 financial year, management expects EBITDA of EUR 1,080-1,300mn (2020: EUR 1,293mn) and net income of EUR 450-590mn (2020: EUR 631mn). The dividend payout ratio for 2021 is expected to be between 45-55%. For the period 2021-23, investments of EUR 2,257mn are planned in the core markets of Austria and Germany. Around 60% of this is to be accounted for by growth investments.

With the bond issued in March 2021, Verbund remained true to its pioneering role in sustainable financing. The bond includes several ESG features at once: It is green, linked to sustainability and the first bond ever to be in line with the EU taxonomy. In addition, ambitious ESG targets are consistently pursued and transparently presented. Details can be found in a separate ESG chapter in the report.

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General information

AuthorErste Group Research
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria
Currency in focusEuro
Sector in focus-


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