VERBUND Integrated Annual Report
This report combines our annual financial report
and our sustainability report.
How should this report be used?
The information in this integrated report focuses
on the main aspects of economic, environmental
and social performance. Additional information
about the content presented here can be found
• in the Disclosures on Management Approach
(DMA) at www.verbund.com >
Investor Relations > Financial reports,
• in the GRI and TCFD Content Index at
www.verbund.com > About VERBUND >
Responsibility > Non-financial Information,
• in the NFI download at www.verbund.com >
About VERBUND > Responsibility >
Non-financial Information and
• on other web pages referred to separately.
GRI indicators, SDGs and TCFD references in the
margin notes point to the corresponding content
in the text.
The Integrated Annual Report is also available
online at www.verbund.com > Investor Relations
> Financial reports.
The use of computing software may lead to
rounding differences in the addition of rounded
amounts and the calculation of percentages.
Design concept for charts and tables
Column/bar width
Wide columns or bars represent
measurement parameters that can be
physically counted.
Examples: MW, GWh, employees
Medium columns or bars represent
aggregate amounts.
Examples: €k, €m, €bn
Narrow columns or bars represent
amounts in euros per unit.
Examples: €/share, €/MWh
Lines or dotted lines represent shares,
quotients or indices.
Examples: dividend yield in %,
indexed share price, GDP growth in %
Colours
Current year
Neutral
Previous years
Budgeted figures
VERBUND
Emphasis
Economic performance
Unit 2017 2018 2019 2020 2021
Revenue
1, 4
€m 2,913.2 2,671.1 3,895.0 3,449.8 4,776.6
EBITDA €m 922.3 864.2 1,183.5 1,292.8 1,579.0
Adjusted EBITDA
2
€m 899.7 863.5 1,183.5 1,292.8 1,579.0
Operating result (EBIT) €m 400.1 655.1 865.9 921.9 1,266.8
Operating result before effects
from impairment tests €m 581.0 536.9 819.3 914.0 1,161.7
Group result €m 301.4 433.2 554.8 631.4 873.6
Adjusted Group result
2
€m 354.5 342.2 549.0 610.4 798.6
Total assets
4
€m 11,283.6 11,704.8 11,838.6 11,987.7 17,111.6
Equity
4
€m 5,690.8 5,941.0 6,568.0 6,807.4 6,362.9
Net debt €m 2,843.8 2,560.7 2,256.1 1,881.2 3,510.8
Additions to property, plant and equipment €m 231.0 292.5 438.9 628.5 842.8
Cash flow from operating activities
4
€m 640.6 664.1 1,204.3 1,182.1 98.2
Free cash flow before dividends
4
€m 416.1 415.3 817.4 582.1 – 1,010.1
Free cash flow after dividends €m 293.5 237.2 639.3 299.5 – 1,329.5
EBITDA margin
1, 4
% 31.7 32.4 30.4 37.5 33.1
EBIT margin
1, 4
% 13.7 24.5 22.2 26.7 26.5
Return on capital employed (ROCE)
1, 4
% 4.2 5.6 7.8 9.6 11.4
Return on equity (ROE)
4
% 5.4 8.2 10.2 10.7 15.0
Equity ratio (adjusted)
4
% 52.4 52.7 57.7 58.6 38.2
Gearing % 50.0 43.1 34.4 27.4 55.2
Net debt/EBITDA X 3.1 3.0 1.9 1.5 2.2
FFO/Net debt (net debt coverage) % 30.0 28.7 44.3 57.7 36.6
Gross debt coverage (FFO) % 28.1 25.7 41.0 52.6 31.9
Gross interest cover (FFO) X 8.1 7.3 11.9 19.4 24.9
Closing price € 20.15 37.24 44.74 69.85 98.90
Market capitalisation €m 6,998.7 12,937.8 15,543.4 24,267.0 34,359.4
Earnings per share € 0.87 1.25 1.60 1.82 2.51
Cash flow per share € 1.84 1.91 3.47 3.40 0.28
Carrying amount per share
3
€ 14.58 15.27 16.95 17.71 15.72
Price/earnings ratio (last trading day) X 23.22 29.87 28.02 38.43 39.33
Price/cash flow ratio X 10.93 19.48 12.91 20.53 350.03
Price/book value ratio
3
X 1.38 2.44 2.64 3.95 6.29
(Proposed) dividend per share € 0.42 0.42 0.69 0.75 1.05
Dividend yield % 2.1 1.1 1.5 1.1 1.1
Payout ratio from Group result
5
% 48.4 33.7 43.2 41.3 41.8
Entity value/EBITDA X 10.7 17.9 15.0 20.2 24.0
Average number of employees Number 2,819 2,742 2,772 2,870 3,184
Electricity sales volume GWh 58,518 58,908 62,179 62,741 58,896
Hydro coefficient X 0.99 0.94 1.01 1.01 0.95
New renewables coefficient X 1.03 0.90 1.01 1.00 0.91
1
calculation adjusted retrospectively in accordance with IAS 8 in financial year 2019 with effect from 1 January 2018 //
2
adjusted for extraordinary effects //
3
calculation adjusted retrospectively in
accordance with IAS 8 in financial year 2017 //
4
calculation adjusted retrospectively in accordance with IAS 8 in financial year 2021 with effect from 1 January 2020 //
5
payout ratio calculated on the
basis of the adjusted Group result amounts to 45.7% for the 2021 reporting period (previous year: 42.7%)
Five-year comparison
Environmental performance
Unit 2017 2018 2019 2020 2021
Hydropower generation
1
GWh 29,687 28,684 30,660 31,525 29,340
Wind power generation GWh 952 834 929 924 839
Solar power generation GWh – – – 1 2
Thermal power generation GWh 2,227 1,611 1,596 1,033 1,125
Share of generation from renewables % 93 95 95 97 96
Specific GHG emissions
(Scope 1/total electricity generated)
2
g CO
2
e/kWh 41 34 32 19 14
Emissions avoided through
renewable generation
3
kt CO
2
23,666 22,411 24,071 24,726 22,055
Social performance
Unit 2017 2018 2019 2020 2021
Number of employees under labour law
4
Number 2,819 2,784 2,843 2,980 3,497
Training per employee
5
Hours 36.0 33.6 40.0 20.0 26.4
Lost time injury frequency (LTIF)
6
Number 10.1 5.4 6.4 5.6 6.8
Proportion of women % 17.5 17.6 17.8 18.3 19.3
Average duration of employment
7
Years 18.8 18.1 17.6 16.1 15.0
Employee turnover rate
8
% 2.8 2.1 2.0 1.5 2.4
1
incl. purchase rights //
2
Scope 1 excl. GCA. Total electricity generated incl. purchase rights excluding electricity generated for district heating; preliminary data prior to audit //
3
calculation using the share of thermal
generation based on ENTSO-E mix //
4
as at 31 December, excl. members of the Executive Board and employees in partial retirement //
5
incl. executives and long-term agency staff, excl. apprentices, apprentices in
post-qualification retention period (Behaltefristen), employees seconded to third parties and those on long-term leave; excluding safety instruction //
6
ratio of workplace injuries from the first day of leave to million
working hours; excl. injuries requiring only first aid measures and excl. fatal injuries. The basis for calculating the working hours is defined for the industry at 1,740 working hours per year; incl. external contractors
from 2018. //
7
Personnel from acquired and newly consolidated companies are included in the duration of employment with the acquired/consolidated company and no longer in the duration of employment with the
VERBUND Group.
//
8
excl. retirements, incl. employees leaving during their probationary period
Basic information
Share capital (€) 347,415,686
Shares (number) 347,415,686
Official quotation
Vienna VER
Information systems
Bloomberg VER AV
Reuters VERB.VI
ISIN AT0000746409
GRI 102-7
Capital market calendar 2022
Event Date
Annual result 2021 17 March 2022
Publication of Integrated Annual Report 17 March 2022
Record date for Annual General Meeting 15 April 2022
Annual General Meeting 25 April 2022
Ex-dividend date 2 May 2022
Record date for dividends 3 May 2022
Dividend payment date 13 May 2022
Interim report quarter 1/2022 12 May 2022
Interim report quarters 1– 2/2022 28 July 2022
Interim report quarters 1– 3/2022 3 November 2022
VERBUND
Annual Financial Report 2021
Part 1 – Group ............................................................................................................................................................... 4
Group management report ........................................................................................................................................................ 43
Consolidated financial statements ...................................................................................................................................... 189
Part 2 – Parent company.................................................................................................................................... 337
Management report ................................................................................................................................................................... 345
Annual financial statements ................................................................................................................................................... 397
Part 3 – Statement of all legal representatives ..................................................................................... 435
Contents
Part 1
Group
ANNUAL FINANCIAL REPORT - GROUP 5
This Integrated Annual Report contains the Group management report published by VERBUND for
financial year 2021, the Group report on non-financial information (NFI Report) and the Group’s
consolidated financial statements, including the notes to the consolidated financial statements. The
principles of fair enterprise management followed by VERBUND are laid out in the Corporate
Governance Report. This Integrated Annual Report thus not only presents the Group’s financial and
legal information but also deals with further aspects of sustainability and proper conduct of business
operations.
The report covers the activities of all of the companies included in the Group’s consolidated financial
statements. It also includes sustainability reporting. Changes in reporting from the prior-year period are
noted in the respective sections. Significant events occurring at unconsolidated companies are likewise
presented to provide a complete picture of the Group.
The reporting period comprises the 2021 calendar year. The most recent preceding integrated annual
report (for financial year 2020) was published on 17 March 2021. To ensure that our report is up to date,
we also report in the Group management report on any major events occurring at VERBUND
between
31 December 2021 and authorisation of the annual report for issue on 17 February 2022. Supplementary
information on sustainability topics is available in our Disclosures on Management Approach (DMA)
document and on the VERBUND website at www.verbund.com > About VERBUND > Responsibility >
Non-financial Information.
Integrated report focuses on stakeholder interests
Investors, owners, customers, employees and other interest groups all require different types of
information. The relevant information was collected in 2019 in an extensive stakeholder survey and is
summarised in the VERBUND materiality matrix. The sustainability-related contributions to
VERBUND’s integrated annual report are updated annually on the basis of the materiality analysis
conducted in accordance with the Global Reporting Initiative (GRI), the stakeholder survey, internal
media analyses and material topics relating to stakeholder engagement.
Reporting pursuant to the Austrian Sustainability and Diversity Improvement Act (NaDiVeG)
and Article 8 of the EU Taxonomy Regulation
VERBUND’s NFI Report prepared in accordance with Section 267a of the Austrian Commercial Code
(Unternehmensgesetzbuch, UGB), which is included in this Integrated Annual Report, compiles the
disclosures required by the Austrian Sustainability and Diversity Improvement Act (Nachhaltigkeits-
und Diversitätsverbesserungsgesetz, NaDiVeG), which implements Directive 2014/95/EU (Non-
financial Reporting (NFR) Directive) regarding the disclosure of non-financial and diversity
information. These relate in particular to environmental matters, social and employee-related matters,
respect for human rights and anti-corruption and bribery matters.
Starting in 2022, VERBUND is also required to disclose information on environmentally sustainable
revenues, capital expenditures (CAPEX) and operational expenditures (OPEX) pursuant to the
EU Taxonomy Regulation for financial year 2021. This reporting requirement is complied with through
the Materiality section of the Non-Financial Report.
The Group’s auditor reviewed the NFI Report for completeness and recorded the outcome in an
Independent Assurance that was presented to the Supervisory Board. The scope of the audit did not
include the disclosures required by the EU taxonomy because the final delegated act was not yet
effective at the time the audit was commissioned.
Information about the integrated
report
GRI 102-45
GRI 102-48
GRI 102-50
GRI 102-51
GRI 102-52
GRI 102-46
The materiality analysis
is presented in the
Materiality section
102-56
6
The Supervisory Board reviewed the NFI Report and reports on its findings to the General Meeting
held in the year following the reporting period.
Standards and guidelines
All data and calculations taken for this Integrated Annual Report are based on national and
international standards as well as on guidelines for financial reporting (including the International
Financial Reporting Standards, IFRSs) and sustainability reporting (the Global Reporting Initiative
Standards, GRI, and the G4 Electric Utilities Sector Disclosures). This report was prepared in
accordance with the “Core” option of the 2016 GRI Standards and the 2018 GRI Standards (relating to
GRI 303: Water and Effluents and GRI 403: Occupational Health and Safety) and the 2020 GRI Standards
(relating to GRI 306: Waste). The current GRI table of contents including the TCFD Index is published
on the VERBUND website: www.verbund.com > About VERBUND
> Responsibility > Non-financial
Information.
Information about the methods, standards and factors used and the assumptions made in the
calculation of key performance indicators (KPIs) is available from the Group’s Investor Relations and
Corporate Responsibility departments at any time upon request.
The margins of this report include references to GRI disclosures as well as to VERBUND’s
contributions to the respective Sustainable Development Goals (SDGs) set by the UN. The “TCFD”
references in the margins point to information on how VERBUND is implementing the
recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) to manage its
climate-related financial risk exposure.
GRI 102-32
GRI 102-54
GRI 102-55
ANNUAL FINANCIAL REPORT - GROUP 7
VERBUND is one of the signatories to the United Nations Global Compact and as such supports the
UN’s 2030 Agenda for Sustainable Development. This Integrated Annual Report doubles as VERBUND’s
UN Global Compact Communication on Progress Report.
External audit
The content of the consolidated financial statements, the Group management report and the NFI
Report was subjected to an external audit by independent auditor Deloitte Audit Wirtschafts-
prüfungs GmbH.
VERBUND’s power plant app
Visit the virtual world of VERBUND using your mobile device. You can find the app for Android and iOS
devices at www.verbund.com/app. We invite you to gain an exciting virtual insight into the world of
VERBUND that will open up fresh perspectives for you. You can also dive into the VERBUND world
directly by scanning the QR code in the margin.
GRI 102-56
See: Independent
Assurance and
Independent Auditor’s
Report
8
Ladies and Gentlemen,
The VERBUND Group delivered a very strong performance in 2021. The financial year was marked by a
huge rise in wholesale electricity prices in Europe, which are a key value driver for VERBUND’s
performance. This trend can be attributed to two main factors.
First, the strong commitment of the EU member states to achieving comprehensive decarbonisation
of the energy system caused prices for European emission allowances to soar. On 14 July 2021, the
European Commission thus took further clear decisions as part of its Fit for 55 package targeting a 55%
reduction in all of the EU’s greenhouse gas emissions by 2030 compared with 1990 levels.
Second, prices for primary energy sources such as natural gas and coal – key elements in the
formation of wholesale electricity prices in Europe and prices of emission allowances – rose sharply
in 2021. Reasons for these increases were the worldwide hunger for energy, especially in Asian countries
(above all in China), below-average gas storage inventories in Europe, unfavourable weather conditions
and the delay in putting the Nord Stream 2 gas pipeline into operation. VERBUND benefited
considerably from these trends and from the strong demand for companies with a clearly sustainable
positioning. The income trend in 2021 was therefore very positive, and the performance of VERBUND
shares with gains of 41.6% underpinned the Group’s attractiveness in an environment that prioritises
climate change mitigation and sustainability.
VERBUND strategy revised in 2021 in response to global decarbonisation efforts. VERBUND
overhauled its corporate strategy in 2021 in response to the national and global decarbonisation efforts.
This led to three strategic focus areas being defined: strengthening VERBUND’s integrated positioning
in its home market, ranging from renewable electricity generation, to electricity transmission, up to
sales to customers of electricity produced from renewable energy sources; expanding renewable
electricity generation in Europe; and positioning VERBUND as a player in the development of a
European hydrogen economy.
Strengthening VERBUND’s integrated positioning in its home market. VERBUND’s integrated
positioning in its home market comprises its core business of efficient, environmentally friendly
generation of electricity from hydropower in addition to the transmission and sale of electricity and gas.
VERBUND will progressively combine electricity generation from renewables with flexibility products
for an increasingly volatile electricity market. In mid-June 2021, construction began on the Reißeck lake
plateau in Carinthia for the Reißeck II plus pumped storage power plant. The Limberg III pumped
storage power plant, construction of which started in September 2021, will be pivotal in achieving
Austria’s ambitious climate targets.
To facilitate the energy transition, VERBUND also invests in the expansion of transmission networks
such as the 380-kV Salzburg line between St. Peter in Upper Austria and the Tauern grid hub in Salzburg
or the 380-kV Weinviertel line, as well as in numerous large substations to ensure security of supply and
further integrate the new renewable electricity generation into the energy system of tomorrow. Our
subsidiary Austrian Power Grid AG (APG) is implementing the €3.5bn network development plan for
the power grid over a ten-year period because a secure electricity supply is the bedrock of a state-of-the-
art, sustainable and digital society. Assisted by our subsidiary Gas Connect Austria GmbH (GCA), we
are enhancing the gas grid so that it is in shape for what lies ahead and for subsequent transportation of
green hydrogen, a key element in the complete decarbonisation of the energy system of the future.
Acquiring a 51% stake in GCA enabled VERBUND to sharpen its risk profile by strengthening its
Report of the Executive Board
GRI 102-14
ANNUAL FINANCIAL REPORT - GROUP 9
regulated business, but also put the Group in an ideal position for sector coupling and development of a
green hydrogen system. Combined with VERBUND’s renewable generation portfolio, the highly
sophisticated transport infrastructure of GCA is capable of making an important and valuable
contribution to the achievement of climate targets.
Expansion of new renewable electricity generation. Electricity generation from onshore wind
power and solar power in Europe is another growth area. In our efforts to drive forward the energy
transition, we are also looking beyond our national borders. Going forward, VERBUND will therefore
purchase and develop renewable projects in other European markets as well. With this approach we
aim to generate around 20–25% of our electricity from new renewable sources of energy by 2030.
In quarter 2/2021, for example, VERBUND kicked off an energy cooperation with Visiolar GmbH in
Germany with the stated goal of producing energy in a sustainable and carbon-neutral manner.
In addition, VERBUND acquired the Illora solar project in southern Spain at the end of 2021. The
photovoltaic farm with a planned total output of around 148 MWp is expected to come on stream in the
first half of 2022.
Hydrogen – a market of tomorrow. Green electricity is not the sole solution for decarbonisation.
Large amounts of greenhouse gas emissions come from sectors that are not easy to electrify. Green
hydrogen provides a key to achieving this. In future, this climate-neutral energy source will be used in
industrial processes, as a fuel in freight transport and as a storage medium. VERBUND is looking to
carve out a niche for itself in Europe’s nascent hydrogen economy and expand its value chain – towards
production, transportation and storage as well as the distribution of green hydrogen. However, for
demand for green hydrogen to be met, the necessary infrastructure needs to be created, followed at a
later stage by hydrogen imports. We are therefore currently evaluating promising projects and are
participating in projects to create a European hydrogen import corridor.
Sustainability focal points in 2021 – green finance, new Code of Conduct, gender balance and
Climate Impact Day.
As a long-standing pioneer in green finance, VERBUND brought a world first
onto the market in 2021, once again leading the way in the field of sustainable finance. The Green &
Sustainability-linked Bond that the international media referred to as a “super green bond” combined
four sustainable elements for the first time, generating huge international demand in a capital market
increasingly driven by sustainability criteria. The proceeds of the bond will be invested exclusively in
sustainable projects, the Group is additionally committed to achieving long-term sustainability goals,
the bond was EU taxonomy compliant for the first time, and it was placed solely with sustainable
investors.
As an expression of its business ethics, VERBUND a number of years ago set itself the goal of engaging
in fair, transparent and sustainable business practices. This goal also forms the basis for VERBUND’s
completely revised Code of Conduct released in December 2021. In addition, numerous actions were
developed and implemented in 2021 within the scope of the Gender Balance project. For example, the
proportion of female executives was increased from 9.0% to 13.5%. Furthermore, a gender balance
network was installed and accessibility initiatives contributed to the inclusion of people with
disabilities. The first-ever Climate Impact Day was held on 21 September 2021 with VERBUND
participating as a cooperation partner. The aim of this initiative is to create awareness among the
general public and in companies of the topics of sustainability and climate change and its mitigation. A
team of VERBUND YoungStars – an existing network of employees under the age of 35 – organised an
internal day on this matter so that all VERBUND employees could attend.
10
VERBUND’s encouraging business and share price performance in 2021. VERBUND saw a
significant improvement in the results posted for financial year 2021. EBITDA climbed by 22.1% to
€1,579.0m. The Group result surged by 38.3% to €873.6m compared with the same period of the
previous year. The hydro coefficient for the run-of-river power plants dropped to 0.95, or 6 percentage
points below the prior-year figure and 5 percentage points below the long-term average. Generation
from our annual storage power plants fell by 6.9% in quarters 1–4/2021 versus 2020. Generation from
hydropower thus decreased by 2,185 GWh compared with the previous year. However, the marked
increase in wholesale electricity prices on the spot markets and the prices for short-term futures gave a
boost to earnings – unlike futures market prices, which declined in the period under review.
Consequently, the average sales price obtained for our own generation from hydropower rose
significantly by €10.2/MWh to €54.8/MWh. The first-time consolidation of Gas Connect Austria GmbH
(GCA), the regulated gas transmission and distribution system operator in Austria acquired with effect
from 31 May 2021, also made a positive contribution to earnings.
VERBUND shares turned in a very encouraging performance in financial year 2021. With gains of
41.6%, the shares outperformed the ATX (+38.9%) and the STOXX Europe 600 Utilities (+5.4%).
Dividend and outlook. We plan to propose a dividend of €1.05 per share for financial year 2021 at the
Annual General Meeting to be held on 25 April 2022. The payout ratio calculated on the basis of the
adjusted Group result thus amounts to 45.7% for 2021 (or 41.8% based on the reported Group result).
Corporate strategy sends a strong signal. Our goal in revising our corporate strategy is to send a
strong signal and take VERBUND from success to success. Actively shaping the future of energy is front
and centre of this strategy. We are continuously working on innovations, new areas of business and
acquisitions. This, however, is only possible with the hard work and commitment of our staff.
ANNUAL FINANCIAL REPORT - GROUP 11
A big thank-you therefore goes especially to our employees, who are working so hard in the
persistently challenging COVID-19 environment amid the upheaval in the energy markets, as well as to
all our customers, investors, suppliers and cooperation partners, who are taking the next steps forward
with us in this taxing decade!
Mag. Dr. Michael Strugl MBA
Dr. Peter F. Kollmann
Mag. Dr. Achim Kaspar
12
As Austria’s leading energy utility, VERBUND took advantage of the energy market climate and
generated outstanding results once again in financial year 2021 despite the ongoing COVID-19
pandemic. The Group succeeded in strengthening its profitability and in successfully continuing its
sustainable development. The Supervisory Board actively monitored and supported this strong
performance.
Performance of duties
In financial year 2021, the Supervisory Board discharged the responsibilities and exercised the powers
incumbent upon it by virtue of the law and the Articles of Association at seven plenary meetings, which
due to the preventive measures against COVID-19 were held as video or teleconferences. The overall
attendance rate for all Supervisory Board members was 98%. The Chairman additionally kept in regular
contact with the Board members to discuss matters of importance as they arose. The Executive Board
provided the Supervisory Board with regular and comprehensive real-time information, both verbally
and in writing, on all relevant matters relating to the performance as well as the position and strategy of
the Group and all significant Group companies; information was also provided on the Group’s risk
position and its risk management activities.
The Supervisory Board advised the Executive Board on key questions concerning the future,
particularly as regards the Group’s structure and strategy, and regularly discussed the implementation
of the strategy with the Executive Board. Major investment and acquisition projects were among the
main topics discussed. The Supervisory Board monitored and supported the Executive Board’s
management activities continuously based on its extensive reporting. Supervision took place in the
context of open and constructive meetings between the Executive Board and the Supervisory Board and
revealed no grounds for objection. The main resolutions adopted by the Supervisory Board are
presented in the 2021 Consolidated Corporate Governance Report. Between meetings, the Chairman of
the Supervisory Board conversed regularly with the Chairman of the Executive Board and also held a
number of discussions with individual members of the Executive Board.
Change in the General Committee of the Supervisory Board
MMag. Thomas Schmid stepped down as member and Chairman of the Supervisory Board on
8 June 2021 with immediate effect. His position was not filled in the reporting period. The Supervisory
Board subsequently appointed Mag. Martin Ohneberg as Chairman and Mag. Christa Schlager as
2nd Vice-Chairwoman. There were no other changes in the composition of the Supervisory Board.
Code of Corporate Governance, Supervisory Board Committees
As a leading listed Group, VERBUND made an early commitment to adhere to the Austrian Code of
Corporate Governance (Österreichischer Corporate Governance Kodex, ÖCGK). VERBUND’s
Supervisory Board views compliance with the Code as obligatory and endeavours to consistently
conform to the provisions relating to the Supervisory Board. In this spirit, we have achieved essential
compliance with the rules relating to the Supervisory Board’s collaboration with the Executive Board
and within the Supervisory Board itself.
In addition, the Supervisory Board again discussed at length possible conflicts of interest when
dealing with the approval of contracts with companies where individual Supervisory Board members
are related parties. No conflicts of interest were identified that would require any action to be
undertaken beyond that taken at the meetings.
Report of the Supervisory Board
GRI 102-26
ANNUAL FINANCIAL REPORT - GROUP 13
The Strategy Committee of the Supervisory Board is responsible above all for coordinating corporate
strategy with the Executive Board, conducting the annual strategy review and supervising any
modifications to be made. During the reporting period, the Strategy Committee held three meetings for
the purpose of voting on the implementation of the Group’s strategy and to discuss individual topics of
strategic relevance. The Project Committee formed as a sub-committee of the Strategy Committee also
met on one occasion.
The Supervisory Board’s Audit Committee met three times during the financial year now ended.
It dealt above all with the quarterly financial statements, the budget and preparation of the resolution to
approve the annual financial statements, as well as with the appointment of the auditor and
examination of the auditor’s work. In addition, the Audit Committee concentrated on opportunity and
risk management as well as the commercial integration of equity interests and on the audits performed
by Internal Audit.
The newly established Sustainability Committee addresses in particular the topics of sustainability,
the New Green Deal, decarbonisation, the energy transition, climate action and environmental
protection. It is responsible for the development of appropriate strategies and implementation
measures as well as for the annual review of the sustainability strategy and goals. The Sustainability
Committee held four meetings in financial year 2021 to discuss various specific areas of emphasis in
addition to fundamental objectives and reporting.
In accordance with the Code of Corporate Governance and the rules of procedure, three other
committees – an Emergencies Committee, a Nomination Committee and a Remuneration Committee –
were again formed in the financial year now ended. The Remuneration Committee held two meetings to
discuss in particular target agreements and the achievement of targets for the variable remuneration for
the Executive Board as well as the 2020 remuneration report. The Nomination Committee and the
Emergencies Committee did not meet in the reporting period.
Further information on the composition, work procedures and meetings of the Supervisory Board
and its committees is contained in the Group’s Consolidated Corporate Governance Report for 2021.
Information on the remuneration paid to the Supervisory Board members can be found in the
remuneration report that the Executive Board and the Supervisory Board jointly prepared for
presentation to the Annual General Meeting in April 2022 in accordance with Section 78c of the
Austrian Stock Corporation Act (Aktiengesetz, AktG).
Annual financial statements and consolidated financial statements
The annual financial statements, together with the management report, the consolidated financial
statements prepared in accordance with the International Financial Reporting Standards (IFRSs) and
the Group management report for financial year 2021 were audited by Deloitte Audit Wirtschafts-
prüfungs GmbH and issued with an unqualified auditor’s report. The auditor prepared the additional
report required to be made to the Audit Committee under Article 11 of the Regulation on the statutory
audit of public-interest entities and reported its findings in writing. The auditor found that the Executive
Board had provided the explanations and evidence requested and that the book-keeping, annual
financial statements and consolidated financial statements fulfilled the legal requirements and, in
conformity with generally accepted accounting principles, gave a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the Group. The auditor also
14
confirmed that the management report and the Group management report were consistent with the
annual financial statements and the consolidated financial statements.
Following in-depth examination and discussion by the Audit Committee and the Supervisory Board,
the Supervisory Board approved the annual financial statements for financial year 2021 as presented by
the Executive Board. As a result, they are final for the purposes of Section 96(4) AktG. The management
report prepared by the Executive Board was approved, as was the proposal for the appropriation of
profit. The Supervisory Board also approved the consolidated financial statements and the Group
management report along with the consolidated corporate governance report submitted by the
Executive Board and the separate Non-Financial Report. There were no grounds for any material
objections.
In conclusion, the Supervisory Board would like to thank the Executive Board and all of the Group’s
employees for their successful work in 2021. Their tireless efforts in exceptional circumstances ensured
an uninterrupted supply of electricity in Austria. The Supervisory Board would also like to thank the
Group’s shareholders, customers and business partners for their trust.
Vienna, March 2022
Mag. Martin Ohneberg
Chairman of the Supervisory Board
18
VERBUND’s 2030 strategy
The coming years will be decisive for the switch to renewable energy sources. Earth’s well-being is an
important issue for VERBUND. “Our power for a green future” is our vision of how we will live up not only
to our economic responsibility but also to our social responsibility as Austria’s leading electricity company.
Europe needs to rapidly broaden its renewables base if the energy transition is to succeed. Demand
for flexibility products is growing, and storage systems and grids need to be expanded. Efforts must also
be made to advance decarbonisation, decentralisation and digitalisation.
Against this backdrop, the Group’s strategy was updated in 2021 and three strategic focus areas were
defined: strengthening the integrated domestic market, expanding new renewables in Europe and
positioning VERBUND as a European hydrogen player.
Strengthening the integrated domestic market
Strengthen VERBUND’s position as an integrated utility (in terms of generation, transportation and
sale) and a leading producer of hydroelectricity as the basis for further growth as well as a
decarbonisation partner in Austria and Germany by:
• expanding its position as an efficient, leading producer of hydroelectricity by maintaining the value of
existing hydropower plants, optimising the flexible generation portfolio and commercially exploiting
existing opportunities to grow hydropower;
• growing the stable electricity and gas infrastructure;
• contributing to security of supply in Austria by providing flexibility products (including congestion
management and control power);
• combining electricity generation from renewables with flexibility products to ensure reliable supply
with renewable energy sources around the clock; and
• acting as an innovative partner in the development of sustainable solutions for companies,
commercial enterprises and households in the fields of e-mobility, solar power and battery storage.
Expanding renewables in Europe
Significantly expand wind and photovoltaic installations in Europe to diversify technological and
geographical risks and ensure potentially attractive returns (goal: renewables should make up 20–25%
of total electricity generation by 2030) by:
• conducting structured M&A deals and forging partnerships in established markets;
• focusing on proprietary development in Eastern Europe; and
• strengthening VERBUND’s role as a leading producer of green electricity by constructing photovoltaic
installations in the industrial, commercial and consumer sectors.
TCFD
ANNUAL FINANCIAL REPORT - GROUP 19
Positioning VERBUND as a European hydrogen player
Green hydrogen is the key to the energy transition and decarbonisation and a pioneering field in which
VERBUND will play a vital role by:
• deepening existing customer relationships with leading industrial companies in local hydrogen
production; and
• expanding the value chain in the medium term for international hydrogen generation, marketing and
transportation and importing green hydrogen into Central Europe.
By focusing on these strategic areas, VERBUND is positioning itself as a profitable electricity
generation company that is leading the way in decarbonising Europe at the same time. The individual
focus areas will also give a substantial boost to the SDGs (Sustainable Development Goals) Affordable
and clean energy (SDG 7), Industry, innovation and infrastructure (SDG 9), Responsible consumption
and production (SDG 12) and Climate action (SDG 13).
VERBUND’s 2030 strategy guides the actions of the entire Group. This is ensured by setting binding
operational targets for all stages in the value chain.
Corporate objectives
The following medium-term corporate objectives have been defined based on the materiality analysis
performed and the VERBUND strategy:
Material topics Corporate objectives
Increasing enterprise value
1
Financial stability: Net debt/EBITDA < 3.0
Return on capital: ROCE > 9.0%
2
Target/ensure an A-level rating
Security of supply
Maintain value and expand generation and grid capacity
Strengthening the integrated
domestic market: hydropower
Rehabilitate existing hydropower plants and build new ones
Provide flexible generation units
Strengthening the integrated
domestic market: grid
Implement network development plan for electricity
Implement network development plan for gas
Strengthening the integrated
domestic market: sales
Build up battery flexibility products
Develop innovative solutions for industrial and commercial customers such as
photovoltaic installations and e-mobility products
Growth in the consumer market
Customer Loyalty Index: 75 points
Expanding green electricity
generation in Europe
20–25% of all electricity generated by 2030 to come from wind and solar power
Accelerated growth through structured M&A deals
Proprietary development of renewables in Eastern Europe
Positioning VERBUND as a
European hydrogen player
Construct customer-focused H
2
generation facilities
Participate in international transport routes to import H
2
into Central Europe
Long-term business development of international H
2
production combined with
renewable generation
GRI 102-14
TCFD
20
Material topics Corporate objectives
Innovation
Implement the VERBUND start-up engagement programme and develop it
further, focusing on building a start-up investment portfolio
Develop and launch new flagship projects/initiatives throughout the strategic
innovation areas
Digitalisation,
information security
and data protection
Implement projects focused on rolling out digital solutions throughout the
Group’s value chain
Implement further measures to improve the hybrid world of work
Reach all employees with relevance for awareness of data and information
security
Implement the planned information security projects to further increase the
degree of cybersecurity maturity
Climate action
Reduce Scope 1 emissions by 16% by 2030 (2015–2030)
Reduce Scope 3 emissions from electricity sales to end consumers by 5% by
2030 (2020–2030)
Resource and energy consumption
Implement economic efficiency measures developed from energy audits
Reduce volumes of work materials in use by 10% by 2025
Environmental protection and
conservation
Invest around €280m by 2027 in environmental measures at rivers such as fish
passes and restoration
Increase number of fish passes to 77 by 2025
Continue ISO 14001 certification of existing sites and incorporate new sites
Occupational health and safety
Lost time injury frequency (LTIF) 5 by 2025
Progressive ISO 45001 certification of all VERBUND sites by 2025
Attractive employer
Employee turnover rate < 5%
38.5 hours of training per employee/year
35 new apprentices each year
Diversity and inclusion in the
Group
Proportion of women > 20%
Ensure balanced employee age structure
(benchmark: employed wage and salary earners by age group in Austria)
Fulfil statutory quotas for the employment of people with disabilities (currently
4% in Austria and 5% in Germany)
Compliance
100% participation rate in mandatory compliance training
Implement a digital whistleblowing platform by 2022
1
based on existing asset and value chain structure
2
does not apply to regulated activities
ANNUAL FINANCIAL REPORT - GROUP 21
International capital market environment in 2021
Stock markets rebounded in 2021 in the wake of the market distortions caused by the COVID-19
pandemic in 2020. In spite of supply difficulties due to logistics issues and a shortage of precursors amid
full order books and new mutations of the virus, a significant economic upswing could be observed.
After the different lockdowns, consumers were again increasingly eager to invest in consumer goods
and services. The economy and the capital market were also bolstered by the extensive, unprecedented
monetary and fiscal policy measures taken by central banks and governments. Rising inflation, due in
particular to a huge surge in energy prices, and geopolitical conflicts between Russia and the United
States and between the United States and China had a negative impact.
The US Dow Jones Industrial stock index ended 2021 up 18.7% after reaching a new all-time high.
The Eurostoxx 50 performed even better, posting gains of 21.0% compared with the end of 2020. Japan’s
Nikkei 225 index turned in a far worse performance by comparison, closing the year up 4.9%. Share
price performance in the emerging markets was significantly weaker. The MSCI Emerging Markets
Index finished 2021 down 4.6% on the 2020 year-end figure. In contrast, the ATX delivered an
impressive performance in 2021 following the tremendous COVID-19-related slump in 2020, closing the
year with gains of 38.9%. The index finished trading in 2021 at 3,861.1 points.
VERBUND shares
VERBUND shares performed very encouragingly again in 2021 in spite of the ongoing global COVID-19
pandemic and thus continued the growth trend seen in 2020. The performance of VERBUND shares in
quarter 1/2021 was characterised by high inflows and outflows in exchange traded funds (ETFs) related
to clean energy. In quarter 2/2021, the shares benefited from a steady improvement in the energy
market environment. This trend continued in quarters 3–4/2021, fuelled primarily by rising gas and coal
prices, as well as high prices for emission allowances. VERBUND shares thus reached a new all-time
high of €106.2 on 22 December 2021. They closed financial year 2021 trading at €98.9, an increase of
41.6% on the last trading day of 2020. This significant increase was caused by the considerable
improvement in the energy market climate for renewable energy producers and by the Group’s
sustainable positioning. VERBUND shares marginally outperformed the Austrian ATX in a year in which
the ATX posted overall gains of 38.9% and also significantly outperformed the European STOXX Europe
600 Utilities sector index, which was up 5.4% in 2020. With a market capitalisation of €34.4bn,
VERBUND was once again Austria’s largest listed company at the end of 2021 by a large margin.
Investor relations
Upcoming dates:
Record date for
Annual General Meeting:
15 April 2022
Annual General Meeting:
25 April 2022
Ex-dividend date:
2 May 2022
Record date for
dividends:
3 May 2022
Dividend payment date:
13 May 2022
Results for
quarter 1/2022:
12 May 2022
44.7
69.9
98.9
19 20 21
Closing prices
VERBUND shares €/share
21
22
KPIs – shares
Unit 2020 2021 Change
Share price high € 69.9 106.2 52.0%
Share price low € 29.0 59.6 –
Closing price € 69.9 98.9 41.6%
Performance % 56.1 41.6 –
Market capitalisation €m 24,267.0 34,359.4 41.6%
ATX weighting % 10.7 11.0 –
Value of shares traded €m 4,742.1 7,753.0 63.5%
Shares traded per day Shares 417,949 401,333 – 4.0%
Investor relations team activities in 2021
Active, open communication with investors, analysts and individual shareholders during road shows,
conference calls and in one-on-one conversations is important to VERBUND. The ongoing COVID-19
crisis as well as sharp increases in wholesale prices for electricity and the relevant prices for primary
energy sources required increased communications activities that took place almost exclusively in
virtual formats. The IR team participated in several virtual road shows in Europe and the United States
in 2021, as well as in major investor conferences. Together with the Executive Board, the team briefed
investors from all over the world on VERBUND’s key performance indicators and its operational and
strategic performance.
Comprehensive information is available on the “Investor Relations” pages of the website at
www.verbund.com – including the annual and interim reports, financial calendar and events, current
press releases, presentations and Excel spreadsheets as well as documents relating to VERBUND’s
Annual General Meetings in past years.
VERBUND shares are covered by 14 renowned Austrian and international investment banks, thus
ensuring their visibility in the capital market. The following investment banks covered VERBUND as at
31 December 2021:
180
140
100
60
20
VERBUND share price: relative performance 2021
+41.6%
+38.9%
+5.4%
1/1/ 1/2/ 1/3/ 1/4/ 1/5/ 1/6/ 1/7/ 1/8/ 1/9/ 1/10/ 1/11/ 1/12/
STOXX Europe 600 Utilities
ATX
VERBUND
IR contact:
Andreas Wollein
Head of Group Finance
and Investor Relations
Tel.: +
43 (0)50 313-
52604
E-mail: investor-
relations@verbund.com
ANNUAL FINANCIAL REPORT - GROUP 23
Alpha Value (Nicolas Bouthors)
Bank of America (Mikel Zabala)
Barclays (Peter Crampton)
Berenberg Bank (Lawson Steele)
Citigroup (Piotr Dzieciolowski)
Credit Suisse (Wanda Serwinowska)
Deutsche Bank (Olly Jeffery)
Erste Group (Petr Bártek)
HSBC (Adam Dickens)
Kepler Cheuvreux (Ingo Becker)
Oddo BHF (Louis Boujard)
Raiffeisen Bank International (Teresa Schinwald)
Société Générale (Lueder Schumacher)
Stifel (Martin Tessier)
Current ratings
As at 31 December 2021, VERBUND’s ratings were as follows:
• Standard & Poor’s: A/stable outlook
• Moody’s: A3/stable outlook
VERBUND in sustainability indices and sustainability rankings
The trend towards sustainable investments continued to gain traction in 2021. This is due for one thing
to numerous European and international sustainable finance initiatives such as the EU taxonomy, the
Sustainable Finance Disclosure Regulation (SFDR) and the International Platform on Sustainable
Finance (IPSF). For another, companies that operate sustainably are considered to be more resilient and
resistant to risk long term in what are still turbulent times (precipitated by COVID-19, production
bottlenecks, supply chain risks). This also benefited VERBUND’s sustainable business model and led to
excellent results in sustainability ratings.
VERBUND rose to B+ in the ISS ESG rating (previously ISS-oekom), putting it among the top three
companies in the electric utility sector. This improvement was achieved thanks not least to the
continued very good rating for environmental management and VERBUND’s strong focus on renewable
energy.
The environmental management and strong corporate governance action also prompted the
US financial services provider MSCI to raise VERBUND’s rating to AAA, the top grade.
In the Carbon Disclosure Project (CDP) rating VERBUND also achieved a very good A– rating once
more in 2021, placing it among the top Austrian companies and above the global and European average
(B–/B) and the energy sector average of B. In EcoVadis, VERBUND achieved the gold standard with
70 out of 100 points, as in preceding years.
Only the Sustainalytics rating deteriorated slightly to 18.9 out of 100 points (2020: 18.1; note: the
lower, the better) due to the higher sector risk for electric utilities, which VERBUND cannot influence;
however, this rating is still in the low-risk range. Thanks to improved internal sustainability
management performance, which results in a lower management risk (which VERBUND can influence),
the increased sector risk was cushioned.
For more information on
the rating, please refer to
the section on Finance >
Financing
24
VERBUND was the company with the largest market capitalisation
in 2021 in Vienna’s leading index, the ATX.
VERBUND was included in the following sustainability indices as at 31 December 2021:
• VÖNIX (VBV Austrian sustainability index);
• Ethibel Sustainability Index (ESI) Excellence Europe; and
• FTSE4Good Index Series
See also:
www.voenix.at
Consolidated
Corporate Governance Report
26
Corporate governance – framework
VERBUND AG is a listed stock corporation domiciled in Austria. Its corporate governance framework is
derived from Austrian and European law, including, in particular, stock corporation and capital market
law, the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) and the regulations governing
employee co-determination, the Company’s Articles of Association, the rules of procedure for the
Company’s Boards and, finally, the Austrian Code of Corporate Governance (Österreichischer
Corporate Governance Kodex, ÖCGK).
Declaration of commitment to the Austrian Code of
Corporate Governance
Declaration of conformity
VERBUND has declared its unconditional commitment to the Austrian Code of Corporate Governance
(ÖCGK). The Executive Board and Supervisory Board see it as their primary duty to comply with all of
the rules of the Code as fully as possible and to maintain and continue to develop the Group’s high
internal standards. The Code was applied during financial year 2021 as amended in January 2021 and
was adhered to in accordance with the explanatory notes in this report. Active implementation of the
requirements of the Code is intended to ensure responsible management and control of the Group
directed at sustainable, long-term value creation and to create a high level of transparency for all
stakeholders. VERBUND
will continue to actively adhere to the Code as amended during financial
year 2022. Applying it as fully as possible is an essential building block for strengthening the trust placed
in the Group by shareholders, business partners, employees and the general public.
Evaluation
In accordance with C Rule 62 of the Austrian Code of Corporate Governance (ÖCGK), compliance with
the Code and the accuracy of the related reporting is evaluated externally by an independent auditor at
regular intervals. The last such evaluation was carried out for 2019 and resulted in a positive report. The
next evaluation is planned for financial year 2022.
Scope of reporting
A consolidated corporate governance report is presented as required under statutory provisions. As a
combined report, it also includes the report in accordance with Section 243c of the Austrian
Commercial Code (UGB), and key items of this report are expanded beyond the listed parent company
to include the entire Group. Opinion 22 of the Austrian Financial Reporting and Auditing Committee
(AFRAC) has been followed with respect to the requirements on content.
Consolidated
Corporate Governance Report
in accordance with Section 267b of the Austrian Commercial Code (UGB)
The Austrian Code of
Corporate Governance
as amended is available
from the website of the
Austrian Working Group
for Corporate
Governance at
www.corporate-
governance.at
ANNUAL FINANCIAL REPORT - GROUP 27
This Consolidated Corporate Governance Report includes not only the disclosures required by law
but also the additional content as intended by the Code of Corporate Governance. In addition, further
information is provided on the relevant indicators under the Global Reporting Initiative (GRI), the
global standard on sustainability reporting.
Detailed information on the composition and work procedures of the Executive Board, the
Supervisory Board and the Supervisory Board’s committees is provided in the sections entitled
Executive Board and Supervisory Board.
This Corporate Governance Report no longer contains information on the remuneration of the
Executive Board and the Supervisory Board. Please refer to the separate remuneration report which is to
be submitted to the Annual General Meeting and is published on the website.
Further information on the bodies Executive Board, Supervisory Board and Annual General Meeting
and on their interactions is available in the document entitled Disclosures on Management Approach
(DMA) at www.verbund.com > Investor Relations > Financial reports.
Deviations
VERBUND complies with almost all the rules in the Austrian Code of Corporate Governance, including
the R Rules. The deviations applied in financial year 2021 are the same as those applied in the previous
year. From a total of 83 rules in the Code, there are slight deviations in the application of only two
C Rules which are to some extent the result of legislative circumstances. In accordance with the “comply
or explain” principle, these deviations are explained below:
C Rule 2:
The principle of “one share – one vote” is generally adhered to with respect to VERBUND shares. The
sole exception is based on a restriction on voting rights embodied in the “federal constitutional act
regulating the ownership structure of enterprises in the Austrian electricity industry” and in the
provision of the Articles of Association based on this. The exception is worded as follows: “With the
exception of regional authorities and companies in which regional authorities hold an interest of at least
51%, the voting rights of each shareholder at the Annual General Meeting are restricted to 5% of the
share capital.”
C Rule 45:
The rule according to which Supervisory Board members may not assume any functions on the boards
of other companies that are competitors of the Group was adhered to by all the members of the
Supervisory Board, with two exceptions.
The two Supervisory Board members in question each carry out leading functions on boards in
companies which are shareholders of VERBUND AG. If there is a conflict of interest with them in a
specific case, then the chairperson will institute appropriate measures (e.g. withholding of certain
documents or information, abstention from voting or departure from the meeting). This was required
once for a single agenda item in the reporting period.
28
Executive Board
Composition of the Executive Board
In financial year 2021, the Executive Board was composed of three members.
Since 1 January 2021, the Executive Board comprises Mag. Dr. Michael Strugl MBA (Chairman),
Dr. Peter F. Kollmann and Mag. Dr. Achim Kaspar.
The Executive Board
Name Year of birth
Date of initial
appointment
End of current term
of office
CEO Mag. Dr. Michael Strugl MBA
Chairman
1963 1/1/2019 31/12/2023
Dr. Peter F. Kollmann
Member of the Executive Board
1962 1/1/2014 31/12/2023
Mag. Dr. Achim Kaspar
Member of the Executive Board
1965 1/1/2019 31/12/2023
Board functions of Executive Board members within the Group
Name Group company Function
Mag. Dr. Michael
Strugl MBA
VERBUND Energy4Business GmbH
Austrian Power Grid AG
VERBUND Hydro Power GmbH
VERBUND Green Power GmbH
VERBUND Energy4Customers GmbH
VERBUND Thermal Power GmbH
Ennskraftwerke AG
Gas Connect Austria GmbH
Supervisory Board
Annual General Meeting
Supervisory Board
Supervisory Board
Annual General Meeting
Annual General Meeting
Annual General Meeting
Supervisory Board
Annual General Meeting
Supervisory Board
Supervisory Board
Chairman
Chairman
Member
Chairman
Chairman
Vice-Chairman
Chairman
Chairman
Chairman
Vice-Chairman
Vice-Chairman
Dr. Peter F. Kollmann Austrian Power Grid AG
VERBUND Hydro Power GmbH
VERBUND Services GmbH
VERBUND Energy4Business GmbH
VERBUND Green Power GmbH
Gas Connect Austria GmbH
Supervisory Board
Supervisory Board
Annual General Meeting
Supervisory Board
Annual General Meeting
Supervisory Board
Chairman
Member
Chairman
Vice-Chairman
Member
Chairman
GRI 102-18
GRI 405-1
GRI 102-25
ANNUAL FINANCIAL REPORT - GROUP 29
Board functions of Executive Board members within the Group
Name Group company Function
Mag. Dr. Achim
Kaspar
Ennskraftwerke AG
VERBUND Hydro Power GmbH
VERBUND Innkraftwerke GmbH
Grenzkraftwerke GmbH
Innwerk AG
Donaukraftwerke Jochenstein AG
Österreichisch-Bayerische Kraftwerke AG
VERBUND Thermal Power GmbH
VERBUND Green Power GmbH
VERBUND Services GmbH
Supervisory Board
Supervisory Board
Supervisory Board
Shareholders’ Meeting
Supervisory Board
Annual General Meeting
Supervisory Board
Supervisory Board
Supervisory Board
Supervisory Board
Annual General Meeting
Annual General Meeting
Annual General Meeting
Member
Vice-Chairman
Chairman
Chairman
Chairman
Chairman
Chairman
Chairman
Chairman
Vice-Chairman
Vice-Chairman
Chairman
Vice-Chairman
Supervisory Board appointments of Executive Board members outside the Group
Name Company Function
Dr. Peter F. Kollmann Telekom Austria AG Member
Mag. Dr. Achim Kaspar KELAG-Kärntner Elektrizitäts-
Aktiengesellschaft
1
Member
1
As at 31 December 2021, VERBUND held a 35.17% equity interest in KELAG.
Work procedures and allocation of responsibilities
The Executive Board manages the Group’s business activities and represents the Group externally.
The rules of procedure for the Executive Board govern the allocation of responsibilities and how the
members of the Executive Board are to work together. In addition, they lay down the Executive Board’s
duties to notify and report, and contain a list of measures that require approval by the Supervisory
Board. The measures requiring approval also include material transactions proposed by the Group’s
main subsidiaries. Effective 1 January 2021, minor additions were made to the rules of procedure in
regard to the representation of the chairperson of the Executive Board in the event that he or she is
unable to attend.
The allocation of responsibilities within the Executive Board is part of the rules of procedure and
defines the range of duties of the Executive Board members without prejudice to the overall
responsibility of the Executive Board.
30
Allocation of responsibilities
Mag. Dr. Michael Strugl MBA Chairman; corporate development (incl. mergers & acquisitions),
corporate office (incl. legal affairs, corporate affairs, compliance & audit),
strategic human resources, corporate innovation & new business,
communications, hydrogen business
Business, customers, ventures
Dr. Peter F. Kollmann Financial management and Investor relations, group controlling,
corporate accounting and risk management
Services, power grid and gas grid
Mag. Dr. Achim Kaspar Digitalisation, information security and IT, corporate responsibility
Renewable hydropower generation, new renewables generation, thermal
generation, tourism
Supervisory Board
The Supervisory Board has also explicitly affirmed its commitment to the Austrian Code of Corporate
Governance. Consequently, the Code, together with the Austrian Stock Corporation Act (Aktiengesetz,
AktG) and the Austrian Commercial Code (UGB), the Austrian Labour Constitutional Act (Arbeits-
verfassungsgesetz, ArbVG), the Company’s Articles of Association and the rules of procedure for the
Executive Board and Supervisory Board, has become the basis for the Supervisory Board’s actions.
The statutory provisions specify that the Supervisory Board is comprised of members elected by the
Annual General Meeting in accordance with the requirements of the Austrian Stock Corporation Act
(shareholder representatives) and members appointed by the employee representatives.
Personal details, chairpersons and other Board functions
The Supervisory Board is led by a chairperson. The chairperson along with two vice-chairpersons are
elected each year by the Supervisory Board from among its members.
As at 31 December 2021, the Supervisory Board has a total of 14 members: nine shareholder
representatives elected by the Annual General Meeting and five employee representatives appointed by
the Works Council.
On 8 June 2021, MMag. Thomas Schmid resigned his position as a Member and Chairman of the
Supervisory Board with immediate effect. The Supervisory Board subsequently appointed Mag. Martin
Ohneberg as Chairman. There were no further changes to the composition of the Supervisory Board.
GRI 102-18
GRI 102-22
GRI 102-23
GRI 102-24
ANNUAL FINANCIAL REPORT - GROUP 31
Name
Year of birth
Date of initial
appointment
End of current
term of office
MMag. Thomas Schmid
Chairman (until 8/6/2021)
1975 30/4/2019 8/6/2021
Mag. Martin Ohneberg
Chairman (from 22/9/2021)
1st Vice-Chairman (until 22/9/2021)
Managing partner of HENN Industrial Group GmbH & Co KG,
HENN GmbH and HENN GmbH & Co KG;
Member of the boards of directors of Aluflexpack AG,
Switzerland (president), and Montana Aerospace AG,
Switzerland (vice-president); member of the supervisory
boards of VARTA AG, Germany, and
Getzner Werkstoffe Holding GmbH, Austria
1971 30/4/2019 AGM 2024
Mag. Dr. Christine Catasta
1st Vice-Chairwoman (from 22/9/2021)
2nd Vice-Chairwoman (until 22/9/2021)
Member of the management board and director (authorised
representative) of Österreichische Beteiligungs AG
(until 31/1/2022);
Member of the supervisory boards of OMV AG
(vice-chairwoman), Telekom Austria AG (member),
Bundesimmobiliengesellschaft m.b.H. (chairwoman),
ARE Austrian Real Estate GmbH (chairwoman), Austrian
Airlines AG (member), ÖLH Österreichische Luftverkehrs-
Holding-GmbH (member) and Casinos Austria AG (member)
1958 16/6/2020 AGM 2024
Mag. Christa Schlager
2nd Vice-Chairwoman (from 22/9/2021)
Head of the economic policy department at the
Vienna Chamber of Labour;
Member of the supervisory board of Österreichische
Forschungsförderungsgesellschaft mbH (member)
1969 16/6/2020 AGM 2023
Dr. Susan Hennersdorf
CEO cresc. gmbH;
Member of the supervisory board of Tele Columbus AG
(member until June 2021)
1967 16/6/2020 AGM 2022
Prof. Dr. Barbara Praetorius
Professor at the University of Applied Sciences (HTW) Berlin
Member of the supervisory board of Berliner Wasserbetriebe
(BWB) AöR (member)
1964 16/6/2020 AGM 2022
Mag. Jürgen Roth
Managing partner at Tank Roth GmbH;
Member of the supervisory board of ICS
Internationalisierungscenter Steiermark GmbH (chairman) and
ELG (Erdöl-Lagergesellschaft m.b.H.);
Member of the European Economic and Social Committee
1973 22/4/2015 AGM 2023
Dipl.-Ing. Eckhardt Rümmler
Member of the supervisory board of PreussenElektra GmbH,
Germany (member)
1960 16/6/2020 AGM 2024
32
Name
Year of birth
Date of initial
appointment
End of current
term of office
Mag. Stefan Szyszkowitz
Spokesman of the managing board of EVN AG;
Member of the supervisory boards of Burgenland Holding
Aktiengesellschaft (chairman), EVN Macedonia AD (chairman),
RAG-Beteiligungs-Aktiengesellschaft (chairman),
RAG Austria AG (chairman), Energie Burgenland AG
(vice-chairman), Netz Niederösterreich GmbH (vice-chairman);
Member of the supervisory boards of Österreichische Post AG
(member) and Wiener Börse AG (member)
1964 23/4/2018 AGM 2023
Dipl.-Ing. Peter Weinelt
Managing director of Wiener Stadtwerke GmbH and Wiener
Stadtwerke Planvermögen GmbH;
Member of the supervisory boards of Wien Energie GmbH
(chairman), Wiener Netze GmbH (chairman), Bestattung und
Friedhöfe Wien GmbH (chairman), WienIT GmbH (chairman),
EVN AG (member), Burgenland Holding Aktiengesellschaft
(member) and Wiener Gesundheitsverbund (member)
1966 5/4/2017 AGM 2023
Supervisory Board appointments or comparable roles in publicly traded companies and other significant companies have been listed in relation to (ancillary) functions. Full-time
functions are listed where appropriate
.
Employee representatives
Name Year of birth
Date of initial
appointment
Kurt Christof
Chairman of the Central Works Council
Member of the supervisory boards of
Stadtwerke Voitsberg GmbH and Sparkasse
Voitsberg/Köflach Bankaktiengesellschaft
1964 since
8/3/2004
appointed by the
employee
representatives
Doris Dangl
Chairwoman of the Central Works Council
Chairwoman of the Group’s employee representatives
1963 since
5/4/2018
appointed by the
employee
representatives
Dr. Isabella Hönlinger
Chairwoman of the Works Council
1971 since
1/9/2016
appointed by the
employee
representatives
Ing. Wolfgang Liebscher
Chairman of the Central Works Council
1966 since
1/11/2013
appointed by the
employee
representatives
Veronika Neugeboren
Chairwoman of the Works Council
1967 since
30/4/2019
appointed by the
employee
representatives
The appointment of employee representatives by the Group’s employee representatives is for an unlimited period and can be revoked at any time.
Of the Supervisory Board members, 21% are between the ages of 30 and 50 and 79% are over 50.
Independence
Back in 2010, the Supervisory Board of VERBUND AG defined the following criteria for its
independence (pursuant to C Rule 53 of the Austrian Code of Corporate Governance (ÖCGK)):
ANNUAL FINANCIAL REPORT - GROUP 33
• The Supervisory Board member shall not have served as a member of the Executive Board or as a
member of the senior management staff of the Company or one of its subsidiaries in the past five
years.
• The Supervisory Board member shall not maintain or have maintained in the past year any business
relationships with the Company or one of its subsidiaries to an extent that would be significant to the
member of the Supervisory Board. This shall also apply to relationships with companies in which the
member of the Supervisory Board has a material economic interest, but not to exercising functions on
the boards of the Group. The approval of individual transactions by the Supervisory Board pursuant
to L Rule 48 shall not automatically mean that the person is deemed not to be independent.
• The Supervisory Board member shall not have acted as auditor of the Company or have owned a
share in the audit firm or have worked there as an employee in the past three years.
• The Supervisory Board member shall not be a member of the managing board of another company in
which a member of the Executive Board of the Company is a supervisory board member.
• The Supervisory Board member may not remain on the Supervisory Board for more than 15 years.
This shall not apply to Supervisory Board members who are shareholders with a direct equity interest
in the Company or who represent the interests of such a shareholder.
• The Supervisory Board member shall not be a close relative (direct descendant, spouse, life partner,
parent, uncle, aunt, sibling, niece or nephew) of a member of the Executive Board or of persons who
hold one of the aforementioned positions.
Based on these guidelines for independence (Annex to the Austrian Code of Corporate Governance),
all nine shareholder representatives have issued a written statement on their independence. Seven of
them have declared their independence, and two members of the Supervisory Board have classified
themselves as not being independent (with respect to only the “relationships with related parties”
criterion).
In addition, the following shareholder representatives in the Supervisory Board meet the criteria for
independence contained in C Rule 54 (not representing the interests of a shareholder with a stake
exceeding 10%): Ohneberg, Hennersdorf, Praetorius, Roth, Rümmler and Schlager. Both quotas
required for independence by Rule 53 and Rule 54 of the Code are thus met.
Meetings of the Supervisory Board
Seven plenary meetings of the Supervisory Board were held during financial year 2021. Due to
preventive measures in place in response to the COVID-19 pandemic, only the Chairman and
individual members of the Supervisory Board were physically in attendance at the meetings, while the
majority of the Supervisory Board members participated remotely by telephone or video. The overall
attendance rate for all Supervisory Board members (including remote attendees) was 98%. No member
of the Supervisory Board attended fewer than half of the meetings in person (including virtual
attendance).
In addition to coordinating the ongoing strategic direction of the Company with the Executive Board,
the Supervisory Board focused on decisions relating to the following topics in particular during the
reporting period:
• consolidated financial statements and annual financial statements of VERBUND AG for 2020;
• proposals for resolutions for the Annual General Meeting;
34
• proposal for profit appropriation in accordance with Section 96(1) of the Austrian Stock Corporation
Act (AktG);
• election of the General Committee of the Supervisory Board and constitution of the committees;
• appointment of the auditor;
• appointment of managing directors in subsidiaries;
• Limberg III pumped storage power plant project;
• Gratkorn power plant project on the Mur River – increase in total project cost;
• wind and solar power projects;
• acquisition of a stake in SMATRICS (EMPA) and sale of 25.1% to EnBW;
• H2 Töging hydrogen project – investment approval;
• approval of agreements with entities that are related parties of Supervisory Board members; and
• approval of the Group budget for 2022.
(Please also refer to the activities focused upon by the Supervisory Board’s committees.)
Each year during the audit of the financial statements, the auditor provides the Supervisory Board
with a separate report on the reliability of the risk management system. The report from the auditor also
details sustainability risks in the same manner as in the written quarterly reports on operating risk
management that the Supervisory Board discusses at each of its meetings.
In addition to the meetings of the Supervisory Board and its committees (see below), there were
regular discussions and teleconferences between the Chairman of the Supervisory Board and the
Chairman of the Executive Board, and several discussions were held with individual members of the
Executive Board.
Evaluation of Supervisory Board activity
The performance of the Supervisory Board is evaluated annually during the Annual General Meeting, at
which the shareholders vote to approve the actions of the Supervisory Board. At the 74th Annual
General Meeting on 20 April 2021, the actions of all Supervisory Board members were formally
approved.
In light of the highly detailed self-evaluation carried out with the help of external moderators in
late 2020, which included interviews with all members of the Supervisory Board and the Executive
Board and an in-depth discussion of the results, a formal evaluation was not carried out in the year
under review following the Chairman’s departure. However, the Supervisory Board meetings included
an ongoing discussion on how to improve the board’s activities. Another structured self-evaluation is
planned for next year.
Composition and work procedures of the committees
In accordance with the provisions of the rules of procedure for the Supervisory Board (as amended on
16 June 2020), the Supervisory Board shall, following the Annual General Meeting, annually elect the
members of an Audit Committee, a Strategy Committee, an Emergencies Committee, a Remuneration
Committee, a Nomination Committee and a Sustainability Committee. In addition, it can form
temporary or permanent committees specifically for certain projects and topics.
Each chairperson of a committee is required to report to the Supervisory Board on the work of the
committee he or she chairs and on its decisions. In urgent cases, the chairperson of a committee is
required to report in advance to the Chairman of the Supervisory Board.
GRI 102-28
ANNUAL FINANCIAL REPORT - GROUP 35
Audit Committee
The Audit Committee was established pursuant to Section 92(4a) of the Austrian Stock Corporation Act
(AktG) and, in accordance with the rules of procedure for the Supervisory Board, consists of four
Supervisory Board members elected by the shareholders and two employee representatives in
accordance with Section 92(4) AktG. The chairperson and vice-chairperson of the committee are
elected from among its members.
The Audit Committee performs the tasks under Section 92(4a) AktG and Rule 40 of the Austrian Code
of Corporate Governance (ÖCGK). It has the financial expert required by law and by the Code at its
disposal, who is also the chairperson of the committee.
Members of the Audit Committee
Name Function
Mag. Dr. Christine Catasta Chairwoman
Mag. Martin Ohneberg Vice-Chairman
Mag. Jürgen Roth Member
Mag. Christa Schlager Member
Doris Dangl Employee representative
Kurt Christof Employee representative
The Supervisory Board’s Audit Committee met three times during financial year 2021. The activities
of the Audit Committee focused on:
• preparing the resolution on the consolidated financial statements for 2020 and the annual financial
statements of VERBUND AG for 2020 including appropriation of profit;
• proposal for the election of the auditor;
• acknowledgement of the semi-annual financial statements for 2021;
• audit process and 2021 audit areas of emphasis (auditor);
• SAP status report;
• commercial integration of companies/interests;
• audit and non-audit services performed by the auditor;
• acknowledgement of the reports of the Executive Board;
• 2022 budget and financial report;
• acknowledgement of the audit programme and audit reports of the Internal Audit department; and
• risks and opportunities.
Strategy Committee
A Strategy Committee has been established in accordance with the applicable rules of procedure. It is
comprised of five members of the Supervisory Board elected by the shareholders and three employee
representatives in accordance with Section 92(4) AktG. The chairperson and vice-chairperson of the
committee are elected from among its members.
The Strategy Committee is responsible for developing a corporate strategy in collaboration with the
Executive Board and for the annual review of strategy and support of any adaptive measures and the
handling of specific strategic topics. Furthermore, it addresses issues that are not to be handled by the
entire Supervisory Board in consideration of competition-related aspects and conflicts of interest.
36
To this end, the Strategy Committee met three times during the reporting period. In addition, the
Project Committee established by the Strategy Committee as a subcommittee met once.
Members of the Strategy Committee
Name Function
Mag. Martin Ohneberg Chairman
Dipl.-Ing. Eckhardt Rümmler Vice-Chairman
Mag. Dr. Christine Catasta Member
Dr. Susan Hennersdorf Member
Prof. Dr. Barbara Praetorius Member
Doris Dangl Employee representative
Ing. Wolfgang Liebscher Employee representative
Veronika Neugeboren Employee representative
Emergencies Committee
An emergencies committee (Rule 39 of the Austrian Code of Corporate Governance (ÖCGK)) is a
committee for decision-making in urgent situations. The chairperson is required to make the necessary
preparations for rapid decision-making on matters that fall within the remit of the Emergencies
Committee or are referred to that committee for a decision (convening a meeting at short notice, video
conferences). The grounds for urgency must be stated. The Emergencies Committee makes decisions
on all matters where an immediate Supervisory Board decision is needed to gain economic advantages
or fend off the threat of financial damage.
The Emergencies Committee is comprised of four members of the Supervisory Board elected by the
shareholders and two employee representatives in accordance with Section 92(4) AktG. The
chairperson and vice-chairperson of the committee are elected from among its members.
The committee did not meet during the reporting period.
Members of the Emergencies Committee
Name Function
Mag. Martin Ohneberg Chairman
Mag. Dr. Christine Catasta Vice-Chairwoman
Dipl.-Ing. Eckhardt Rümmler Member
Mag. Christa Schlager Member
Doris Dangl Employee representative
Kurt Christof Employee representative
Remuneration Committee
Pursuant to its rules of procedure, the Supervisory Board is required to appoint a Remuneration
Committee in accordance with the Austrian Code of Corporate Governance (ÖCGK) consisting of the
chairperson of the Supervisory Board and the two vice-chairpersons. The Supervisory Board has
permanently assigned responsibility for the following matters to this committee:
• contracts with members of the Executive Board;
• determination of Executive Board member remuneration;
ANNUAL FINANCIAL REPORT - GROUP 37
• decisions on management bonuses and premiums for members of the Executive Board; and
• regular review of the remuneration policy for members of the Executive Board.
Members of the Remuneration Committee
Name Function
Mag. Martin Ohneberg Chairman
Mag. Dr. Christine Catasta Vice-Chairwoman
Mag. Christa Schlager Member
The Remuneration Committee has the remuneration expert required by Rule 43 of the Austrian Code
of Corporate Governance (ÖCGK) at its disposal, as both Mag. Martin Ohneberg and Mag. Dr. Christine
Catasta meet this requirement.
The Remuneration Committee met two times during 2021. The meetings dealt with the agreements
on targets and level of target achievement for the Executive Board’s variable remuneration components
as well as the 2020 remuneration report to be submitted to the Annual General Meeting.
Nomination Committee
In accordance with its rules of procedure, the Supervisory Board shall appoint a Nomination
Committee comprised of the chairperson of the Supervisory Board and three other members of the
Supervisory Board elected by the shareholders plus two employee representatives in accordance with
Section 92(4) AktG. The chairperson of the Supervisory Board chairs the committee, and the committee
elects the vice-chairperson.
The Nomination Committee submits proposals to the Supervisory Board on appointments to the
Executive Board and is responsible for preparing the election of Supervisory Board members. The
Nomination Committee is required to take account of the fact that a candidate’s final nomination for
the Executive Board must take place before the nominee’s 65th birthday.
Members of the Nomination Committee
Name Function
Mag. Martin Ohneberg Chairman
Mag. Dr. Christine Catasta Vice-Chairwoman
Mag. Jürgen Roth Member
Mag. Christa Schlager Member
Doris Dangl Employee representative
Ing. Wolfgang Liebscher Employee representative
The Nomination Committee did not meet during the reporting period.
Sustainability Committee
With the amendment of the rules of procedure on 16 June 2020, the Supervisory Board established a
permanent Sustainability Committee for the first time. In accordance with the rules of procedure, it is
comprised of four members of the Supervisory Board elected by the shareholders and two employee
representatives in accordance with Section 92(4) AktG. The chairperson and vice-chairperson of the
committee are elected from among its members.
38
The Sustainability Committee is responsible for the following tasks in particular:
• discussion of the topics of sustainability, New Green Deal, decarbonisation, energy transition, climate
change and environmental protection;
• development of suitable strategies and measures for implementation; and
• annual review of sustainability strategy and targets and support of any adaptive measures.
Members of the Sustainability Committee
Name Function
Prof. Dr. Barbara Praetorius Chairwoman
Dipl.-Ing. Eckhardt Rümmler Vice-Chairman
Mag. Jürgen Roth Member
Mag. Christa Schlager Member
Doris Dangl Employee representative
Dr. Isabella Hönlinger Employee representative
The Sustainability Committee met four times in financial year 2021. In addition to fundamental
objectives, the meetings dealt in particular with the reporting of sustainability topics and specific areas
of emphasis (e.g. security of supply and climate action, occupational safety, green finance, corporate
carbon footprint).
Contracts requiring consent – conflicts of interest
In financial year 2021, the following contracts and/or transactions approved by the Supervisory Board of
VERBUND AG in accordance with the Austrian Stock Corporation Act (AktG) and the Austrian Code of
Corporate Governance (Rule 49) existed between the VERBUND Group and individual Supervisory
Board members or companies with which Supervisory Board members have close relationships:
Supervisory Board member Mag. Stefan Szyszkowitz
A number of contractual relationships, some of which have been in place for many years, exist between
VERBUND and the EVN Group, of which Mag. Stefan Szyszkowitz is spokesman of the managing board.
Most of these relationships had already been entered into before Mag. Szyszkowitz became a member of
the Supervisory Board. The business transacted under these contracts and their volume are reported to
the Supervisory Board on an annual basis. In financial year 2021, an order volume totalling €582k was
processed on the basis of the existing contracts (excluding transactions with grid subsidiary APG).
These primarily involved electricity and grid purchases for various VERBUND companies. In addition,
there are agreements concerning VERBUND Innkraftwerke GmbH and contractual relationships for the
supply of electricity with ENERGIEALLIANZ Austria GmbH, in which EVN holds a 45% interest.
Supervisory Board member Dipl.-Ing. Peter Weinelt
A number of contractual relationships, some of many years standing, exist between VERBUND and the
Wiener Stadtwerke Group, of which Dipl.-Ing. Peter Weinelt is managing director. Most of these had
already been entered into before Dipl.-Ing. Peter Weinelt became a member of the Supervisory Board.
The business transacted under these contracts and their volume are reported to the Supervisory Board
on an annual basis. In financial year 2021, an order volume totalling €818k was processed on the basis of
GRI 102-25
ANNUAL FINANCIAL REPORT - GROUP 39
the existing contracts (excluding transactions with grid subsidiary APG). These primarily involved grid
purchases for VERBUND companies. Two individual transactions (< €210k) were completed under the
EFET general electricity trading agreement between VERBUND Energy4Business GmbH and Wien
Energie. In addition, there are agreements concerning VERBUND Innkraftwerke GmbH and contractual
relationships for the supply of electricity with ENERGIEALLIANZ Austria GmbH, in which Wiener
Stadtwerke holds a 45% interest. During the reporting period, the Supervisory Board approved a
cooperation agreement granting VERBUND Thermal Power GmbH the right to participate in hydrogen
testing at a gas turbine of Wien Energie for a fee of €1m to cover costs.
In financial year 2021, the Supervisory Board again looked at possible (other) conflicts of interest
involving Supervisory Board members that could arise in particular as a result of activities or equity
interests in the energy sector or in companies competing with the VERBUND Group or individual
projects. Supervisory Board members reported no conflicts of interest on their parts. According to the
assessment of the Supervisory Board, there are no fundamental conflicts of interest that would require
further measures. Should such conflicts arise, suitable measures, such as
abstention from voting or from
providing advice and voting on individual agenda items, will have to be implemented promptly.
An expert opinion obtained after the 2018 report from the Austrian Court of Audit confirms that the
Group has taken adequate and suitable measures to manage potential conflicts of interest in the
Supervisory Board in an appropriate manner.
Annual General Meeting
At the Annual General Meeting, which is held at least once a year, shareholders exercise their rights and
their voting power. Under their right to request information and propose motions, all shareholders have
the opportunity to engage in dialogue with the Executive Board and the Supervisory Board and to
express their opinions and state their concerns.
The main tasks and responsibilities of the Annual General Meeting include deciding on the
appropriation of profit, electing the Supervisory Board, electing the auditor, formally approving the
actions of the Executive Board and the Supervisory Board and making amendments to the Articles of
Association.
The 74
th
Annual General Meeting of VERBUND AG was held on 20 April 2021 as a virtual annual
general meeting due to the COVID-19 ban on face-to-face events. The agenda and resolutions adopted
for this Annual General Meeting and the voting results can be viewed on the website at
www.verbund.com > Investor Relations > General Meeting.
Further information on
the Annual General
Meeting is available in
the Disclosures on
Management Approach
(DMA) at
www.verbund.com >
Investor Relations >
Financial reports
40
Diversity concept for appointments to the Executive Board and
Supervisory Board
(Section 243c(2)(3) of the Austrian Commercial Code, UGB)
Studies indicate that mixed teams achieve better results and are more effective and innovative than
homogeneous groups. This is also true for a company’s boards. When members of the Executive Board
and the Supervisory Board are being appointed, in order to get maximum benefit from different
perspectives for entrepreneurial decisions the following principles shall therefore be applied in addition
to the general and company-specific requirements for specialised and personal qualifications:
Supervisory Board
The relevant aspects of a diverse composition of the Supervisory Board include the age of its members
and the duration of their membership in the Supervisory Board, balanced representation of men and
women, internationality and a balance in the education and career backgrounds of its members.
Age:
The aim is to achieve a balanced age structure among members in which the difference between
the oldest and the youngest member shall be approximately ten years in order to allow input from the
different views of the generations. No Supervisory Board member may remain on the Supervisory Board
for more than 15 years. Both criteria were fulfilled in the reporting period.
Gender representation: Since the election of the new Supervisory Board at the Annual General
Meeting on 16 June 2020, seven women are members of the Supervisory Board of VERBUND AG (four
shareholder representatives and three employee representatives). This share of 50% (overall) not only
complies with the statutory quota requiring 30% of the less-represented gender on the supervisory
board (women, in the case of VERBUND), it also complies with the federal government’s decision
from 2011 according to which women will make up at least 35% of the shareholder representatives on
supervisory boards of state-owned companies.
Internationality: The Supervisory Board shall have an appropriate number of members (at least three)
who spent a significant part of their professional career abroad or have many years of experience in
international business. This requirement was met in the reporting period, particularly with the election
of three members from Germany reinforcing the internationality.
Educational and career background: The goal is a Supervisory Board made up of members with the
widest possible range of educational backgrounds and experiences from different professional careers.
On the Supervisory Board, at least one member of the Supervisory Board shall contribute proven skills
and expertise in each of the following areas:
• law, capital markets, industry expertise, specialist technical knowledge, finance expertise, expertise in
the area of sales, digitalisation and innovation, experience with regulated companies, financial
experience and experience in strategic projects (e.g. M&A), experience in the areas of sustainability,
environment and stakeholder management.
GRI 405-1
GRI 103-2
SDG 5
ANNUAL FINANCIAL REPORT - GROUP 41
These diversity criteria were amply taken into account in the election of the new Supervisory Board at
the Annual General Meeting on 16 June 2020, particularly the aspects of gender, internationality and
specialist expertise.
Executive Board
The relevant aspects of a diverse composition of the Executive Board include a balance in the
educational and career backgrounds, internationality and the duration of its unchanged composition.
Educational and career background:
In addition to extensive managerial experience and
comprehensive industry knowledge, members of the Executive Board shall have a sound education and
relevant professional experience in either the technical or the commercial/administrative area.
Gender representation: The aim for the medium term is to have one female member on the Executive
Board.
Internationality: Some members of the Executive Board shall have spent a significant part of their
professional career abroad or have many years of experience in international business.
Duration of the composition: The composition and division of responsibilities of the Executive Board
shall not remain unchanged for more than ten years.
The Supervisory Board took these aspects into account in appointing the members of the Executive
Board in 2018.
Measures for the advancement of women
(Section 243c(2)(2) of the Austrian Commercial Code, UGB)
In accordance with its commitment to sustainable management, VERBUND addresses issues of social
relevance such as equal opportunity in the workplace. VERBUND
treats all its employees equally,
regardless of their gender, age, religious beliefs, disability, culture, skin colour, social origins, sexual
orientation or nationality. Decisive action is taken against any form of discrimination or harassment.
Since the selection of Supervisory Board members is solely the responsibility of the Annual General
Meeting and depends on delegates being appointed as employee representatives, the Executive Board
has no influence on whether there are any women on the Supervisory Board of VERBUND AG. With
Christine Catasta, Susan Hennersdorf, Barbara Praetorius and Christa Schlager as well as the employee
representatives Doris Dangl, Isabella Hönlinger and Veronika Neugeboren, the Supervisory Board of
VERBUND AG has seven women members, which equates to a female membership of 50%.
As at 31 December 2021, 15 women held management positions within the Group (first and second
levels of management). The percentage of women in management positions is therefore 13.5%. The
percentage of women among employees throughout the Group is 19.3%. One female executive has
worked part time since 2012.
In order to ensure that the Company diversity management system is permanently integrated into
and further developed within the Group, all equal opportunity agendas will be fully executed by the
Diversity & Inclusion manager.
GRI 405-1
Detailed information on
measures to advance
women can be found in
the annual report in the
Human resources
section
42
VERBUND promotes women through a variety of measures, listed here as examples:
• Under the VERBUND diversity strategy, particular emphasis is placed on the dimension of gender, for
which targets and measures are defined and implemented.
• The Executive Board emphasises non-discrimination within the Group. Numerous measures were
developed in 2021 as part of the Gender Balance project and have already been implemented.
• A Gender Balance Network was founded in order to define the parameters, internal structures and
responsibilities (including the local points of contact) to allow for and nurture a debate on the topic of
gender equity as a facet of a modern and supportive corporate culture.
• Since 2017, executives from the top level of management have also been measured against targets set
to promote the equal treatment of women.
• The VERBUND women’s network addresses the ongoing development of a sustainable strategy for the
equal treatment of men and women within VERBUND.
• Each year, VERBUND
awards a scholarship to highly qualified women studying technical subjects.
• VERBUND
takes part in Take Your Daughter to Work Day to promote technical careers to girls while
they are still at school and awaken their interest in the fascinating technical professions.
• In 2021, VERBUND
received the Work and Family Audit certificate for the fifth time.
• On a regular basis, VERBUND
prepares an income report comparing the salaries of men and women.
Vienna, 17 February 2022
Executive Board
Michael Strugl
Chairman of the Executive Board
of VERBUND AG
Peter F. Kollmann
CFO, member of the Executive Board
of VERBUND AG
Achim Kaspar
Member of the Executive Board
of VERBUND AG
Group management report
44
The Group management report relates to the consolidated financial statements of VERBUND. These
were prepared in accordance with Section 245a(1) of the Austrian Commercial Code (Unternehmens-
gesetzbuch, UGB) in compliance with the International Financial Reporting Standards (IFRSs) as
endorsed by the European Union. We assume no liability for any links or references to external sources
contained in the Group management report.
In lieu of including a non-financial statement in the management report, VERBUND has opted to
prepare a separate non-financial report in accordance with Section 267a UGB. This report on non-
financial information (NFI Report) is presented as a separate chapter in the Integrated Annual Report.
General conditions
Prices for primary energy sources rose steeply in financial year 2021. In spite of this, the economy
experienced a significant recovery compared with the previous year. Oil prices increased by more than
60%, gas prices by 390%, coal prices by around 65%, and even prices for emission allowances doubled
in 2021. This in turn led to a sharp rise in prices for electrical energy on both the spot and futures
markets.
Overall demand for electricity in Austria increased again in 2021 as the economic rebounded.
However, domestic electricity generation was down against 2020, leading to a deterioration in net
imports.
Actively shaping the future of energy
is front and centre of VERBUND’s new strategy.
General economic environment
Significant recovery in the global economy in 2021
The global economy saw significant expansion again in 2021 after the sharp slump in 2020 due to
COVID-19. The International Monetary Fund (IMF) put global growth at 5.9%, but also noted that
countries with access to vaccines were growing at different rates to those without. Along with the
COVID-19 pandemic, supply chain issues as well as rising commodity prices and the related increase in
inflation posed major challenges to economic growth.
According to the IMF, economic output rose by 5.6% in the United States and by 5.2% in the euro area,
with the countries in Europe that had experienced the sharpest downturns in 2020 showing
comparatively higher growth in 2021 (Italy and France, for example). For Germany the IMF anticipated
a comparatively smaller increase of 2.7% in 2021.
Besides the above-mentioned issues, economic growth in the coming years will depend to a large
extent on the evolution of the COVID-19 pandemic. If more aggressive mutations of the virus emerge,
leading to lockdowns, the key indicators can be expected to deteriorate compared with 2021.
ANNUAL FINANCIAL REPORT - GROUP 45
For Austria, the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschafts-
forschung, WIFO) predicted economic growth of 4.1% for 2021 and 5.2% for 2022. Although the
economic upswing was heterogeneous from sector to sector, overall it was extremely strong. However, in
the second half of 2021, supply bottlenecks, rising commodity prices and further lockdowns had a
dampening effect. The labour market also recovered rapidly in spite of weaker growth in the tourism
sector.
Energy market environment
Electricity consumption up amid lower power generation in Austria
Austria’s electricity consumption (less pumped storage consumption, including grid loss and own use
of electricity by power plants) in 2021 was up 3.4% year-on-year at 71.2 TWh, principally on the back of
the economic recovery. With the exception of January, February and October, electricity consumption
in the remaining months of 2021 was higher than in the previous year. The biggest increase in
consumption, of 15.2%, was in April 2021.
Generation of electricity from hydropower was down by as much as 5.5% on the 2020 figure. By
contrast, generation from thermal power plants in Austria rose by 2.1% year-on-year in 2021
(+0.3 TWh).
Electricity generation from wind power plants also declined in 2021 due to lower wind supply
after 2020. Generation volumes in 2021 were down by 1.0%. In contrast to 2020, there was a decrease in
other generation (–5.3%). This figure includes other renewable energy sources (excluding biomass,
which falls into the category of thermal generation) and from plants that cannot yet be allocated for
statistical purposes. Overall, at 69.0 TWh, electricity production in Austria in 2021 was down 3.3% on the
prior-year figure.
Net imports likewise deteriorated year-on-year in 2021 owing to lower generation volumes amid an
increase in demand. In 2021, electricity imports rose by 7.8% and electricity exports fell by 15.2%, giving
net imports of –7.5 TWh.
Oil prices recover compared with 2020
The price of Brent crude oil (front month) was around $71/bbl in 2021 compared with approximately
$43/bbl in 2020. This represents an increase of more than 60%.
After oil prices had tanked in 2020 in connection with the COVID-19 crisis (–33%), in 2021 the oil
market saw an equally strong recovery in prices when a rebound in demand triggered by the economic
recovery was met with only a halting increase in supply, especially from OPEC+ countries. The steep
rise in gas and coal prices also drove oil prices sharply higher, as oil now increasingly came into
consideration as a substitute energy source.
46
Surge in gas prices
Prices on the spot market at the European NCG trading point (from 1 October 2020 THE – Trading Hub
Europe) averaged around €47/MWh in 2021, which was €37/MWh or 390% higher year-on-year.
In futures trading, invoiced amounts for supplier contracts for the coming year (NCG front year) were
around €34/MWh in 2021 – approximately €20/MWh or 146% higher than prices for front year in 2020.
This price rally was mainly attributable to the incipient economic recovery with increased demand for
gas (primarily in Asia), but also to supply problems and insufficient gas storage facilities in Europe.
The conflict between Russia and Ukraine caused additional strain in the European gas market.
Increase in steam coal prices
Steam coal prices also surged in 2021 compared with the previous year. Coal prices on the futures
market (ARA front year) were up $37/t (64%) on the prior year at an average of $95/t.
Coal prices on the spot market also rose sharply. Averaging $122/t in 2021, these were 144% higher
than the average listing in the previous year.
There are several reasons for this price increase. In Europe, the steep rise in gas prices and weak
renewable electricity generation led to increased coal-fired power generation, while in Asia the
economic recovery resulted in strong growth in demand. This was met with faltering supply, especially
in China. Following several catastrophic mining accidents, a new mining safety campaign was declared.
As a result, but also due to flooding in coal-producing regions, coal production slowed down
significantly.
100
80
60
20
0
Coal, oil and gas price performance €/MWh thermal
2017 2018 2019 2020 2021
Average monthly prices, futures market (front year) Source: ICE, EEX
40
Fuel oil 1.0%
Coal ARA
Gas NCG
ANNUAL FINANCIAL REPORT - GROUP 47
Rising carbon prices
After 2020, a year dominated by the COVID-19 crisis, a significant recovery was also observed on the
CO
2
market in 2021: while prices were just shy of €35/t at the beginning of the year (forward market
front year), they rose during the year to reach around €80/t at year-end. Reasons for this price increase
were the EU’s stricter climate targets, the economic recovery, and higher CO
2
emissions related to the
sharp rise in coal-fired power generation as a consequence of surging gas prices and weak wind power
generation. In 2021, CO
2
prices averaged €54/t, more than twice the average level of €25/t in 2020.
Sharp price increase in the market for wholesale electricity
In 2021, the market for wholesale electricity was affected by a sharp price increase, both on the spot
market and on the futures market. The two markets were impacted by the steep rise in CO
2
and primary
energy prices and by the rebound in demand for electricity in Europe.
The average price for base load electricity deliveries in the Austrian market area on EPEX Spot, the
European electricity exchange spot market, was up 222% year-on-year to €107/MWh in 2021.
At €127/MWh, peak-load prices were also 219% higher than the 2020 average. The average price for
immediate base load electricity deliveries in the German market area in 2021 was €97/MWh (up 218%
on the previous year), and the price for peak-load energy was €116/MWh (up 208%). From
September 2021 onwards, the average base spot price in the German market area was well over
€100/MWh, rising to more than €200/MWh in December 2021. This constituted a historic high. Prices in
Austria during this period were significantly higher again.
In the futures market at the European Energy Exchange (EEX), base load for 2022 (front year base)
was traded at an average price of €91/MWh in 2021 in the Austrian market area and peak load (front
year peak) was traded at €110/MWh. This represented an increase of over 110% year-on-year. In the
German market area, front year base traded at an average of €88/MWh and front year peak at
€107/MWh in 2021, an increase of around 120%.
300
240
180
60
Spot market electricity price performance (Base) in €/MWh
120
Base AT
Base DE
0
2017 2018 2019 2020 2021
Until 30/9/2018 Market area Germany/Austria, starting 1/10/2018 Market area Germany and Austria shown separately; monthly average prices Source: EPEX Spot
TCFD
25.2
25.1
54.0
19 20 21
CO
2
emission allowance
prices €/t CO
2
EUA Front-Year-Future;
Average yearly prices
Source: IC
E
21
48
VERBUND sells most of the electricity it generates in advance on the futures markets so as to reduce
short-term selling and price risks. The price trend in the futures market in 2021 had only a minor
influence on revenue in the reporting period.
Political and regulatory framework
EU energy policy
European Climate Law
The main aim of the European Green Deal – the central European strategy document for energy and
climate policy – unveiled back in 2019 is to increase the EU’s climate targets for 2030 and 2050. The
Union’s ambitious objective has also been enshrined in law with the European Climate Law adopted
in 2021. The European Commission raised its target for 2030 from a 40% reduction in greenhouse gas
emissions to a 55% cut (1990 baseline), while the target reduction for 2050 has been increased from 80%
to 95% on the path to net climate neutrality (1990 baseline).
Fit for 55 legislative package
In mid-July 2021 the European Commission provided more details on the implementation and structure
of the target trajectory for achieving this reduction in greenhouse gases in a comprehensive legislative
package entitled “Fit for 55”. The package comprises twelve legislative proposals and other non-
legislative statements. A reform of the EU ETS is central to achievement of the targets; this will increase
the linear reduction factor (reduction of the number of emission allowances issued each year)
from 2.2% p.a. to 4.2% p.a. and lead to a one-time overall reduction of the available emission
allowances. The total number of free allowances allocated will also be reduced at a faster pace. Shipping
will be integrated into the EU ETS from 2026 and separate emissions trading systems for road transport
and buildings will be introduced. As regards the amendment to the Renewable Energy Directive
(RED3), the European Commission intends to raise the EU final energy consumption target for
renewables from 32% at present to 40% in 2030. More ambitious 2030 renewables sub-targets have been
defined for transport (13% greenhouse gas intensity reduction) and for heating and cooling (annual
binding increase of 1.1 percentage point in the share of renewables). For renewable hydrogen, it is
proposed that the rules for the production of green hydrogen from electrolysis, which under the current
300
240
180
60
0
Futures market electricity price performance (Base) in €/MWh
2017 2018 2019 2020 2021
2017 Market area Germany/Austria; starting 2018 Market area Germany and Austria shown separately, the axis refers
to the period of trading, delivery in the following year; monthly average prices
Source: EEX
120
Front-Year-Base AT
Front-Year-Base DE
TCFD
ANNUAL FINANCIAL REPORT - GROUP 49
RED2 are applicable exclusively to the transport sector, be extended to all final hydrogen consumption
sectors. Furthermore, the draft RED3 provides for a 50% renewable share in hydrogen consumption in
industry by 2030. The Energy Efficiency Directive also seeks to introduce a higher target for reducing
primary (39%) and final (36%) energy consumption by 2030, up from the current target of 32.5% (for
both primary and final consumption). This will be reflected in a higher annual obligation on member
states to achieve annual energy savings of 1.5% in end-use consumption (currently set at 0.8%).
Another central component of the package is the proposal for a carbon border adjustment
mechanism, i.e. a type of CO
2
countervailing duty for carbon-intensive sectors. The European
Commission is pushing for the legislation to be passed by 2023 to allow enough time to reach the
2030 targets.
Sustainable Finance Taxonomy Regulation
In April, the European Commission published the delegated act setting out technical screening criteria
for the environmental objectives of climate change mitigation and adaptation based on the Sustainable
Finance Taxonomy Regulation. According to the technical screening criteria, all electricity generated
from wind power and solar energy shall be considered sustainable within the meaning of the taxonomy.
In principle, this likewise applies to electricity generated from hydropower, but the delegated act
requires further proof of the sustainability of hydropower plants. At the time the report was published,
the European Commission was proposing to classify investments in electricity generation from nuclear
and gas-fired power plants as sustainable under certain circumstances. The proposal is currently being
examined by the European Council and the European Parliament. In July, the European Commission
also published a delegated act with details on reporting requirements for companies from 2022 onwards
arising from the Taxonomy Regulation.
IPCEI Hydrogen – Important Projects of Common European Interest
In August 2021 Austria submitted a pre-notification to the European Commission with a selection of
Austrian hydrogen projects as part of the IPCEI industrial policy initiative. If awarded IPCEI status by
the European Commission, the projects could be given preferential treatment in terms of public
funding. Austria has earmarked €125m for this from the funds it receives under the EU growth initiative
Recovery & Resilience Fund. The pre-notification document names three VERBUND projects
(Carbon2Product Austria and two modular sub-projects of Green Hydrogen@Blue Danube). The award
of a subsidy cannot be inferred from the pre-notification.
Hydrogen and Decarbonised Gas Market Package
The European Commission released its Hydrogen and Decarbonised Gas Market Package (also known
as the gas package) in mid-December 2021. A sister package to the Fit for 55 package, it addresses the
integration of decarbonised gases (blue hydrogen produced from natural gas plus CCS/CCU) as well as
low-carbon gases (nuclear hydrogen). The Hydrogen and Decarbonised Gas Market Package presents a
unified nomenclature for hydrogen that classifies hydrogen according to its method of production
(renewable or fossil origin) and its final CO
2
life cycle emissions. The future use of gas infrastructure is
also addressed. In addition, specific regulations for the construction and operation of hydrogen
networks are proposed. These are supplemented by regulations on the conversion of existing gas grid
infrastructure.
50
New legal framework for the energy sector in Austria
Renewable Energy Development Act approved
The Renewable Energy Development Act (Erneuerbaren-Ausbau-Gesetz, EAG) was approved by the
Austrian National Council on 7 July 2021. The EAG will serve to implement the goal of 100% of
electricity generated from renewables by 2030 (national balance). Technology-specific expansion
trajectories are envisaged for this. The annual subsidy volume (three-year average) is not expected to
exceed €1bn. The EAG stipulates that renewable energy contributions shall be capped for low-income
households. For hydropower plants, the EAG largely provides for subsidies granted by means of
administratively determined market premiums, i.e. up to 25 MW (or, in the case of larger plants, for the
first 25 MW) for new construction, expansion and rehabilitation projects. The total annual contract
award volume is 100 MW, with 20 MW being put out to tender together with the wind power projects
due to objections by the European Commission under state aid law. To be eligible for funding,
rehabilitation projects must achieve an increase of 5% in mean energy capability/maximum electrical
capacity for plants up to 1 MW, and an increase of 3% for plants above 1 MW.
Photovoltaic installations with a capacity of 10 kWp or higher will be subsidised via tenders for market
premiums; investment grants are also possible for plants with a capacity of up to 1 MWp. A subsidy
reduction of 25% is provided for open-field solar installations on grassland or on land used for
agricultural purposes (with exceptions). Wind power plants with a capacity of 1 MW or higher will be
subsidised in 2022 via an administrative allocation and from 2023 via tenders for market premiums. A
location differentiation model is planned so that less profitable locations can also be expanded.
A local area (NE 6, NE 7) and a regional area (NE 5, partly NE 4) are defined as territorial limitations
for renewable energy communities (RECs). These will particularly be exempted from the grid fees of the
upstream grid levels, but will also enjoy other benefits.
The EAG also provides for subsidies for generation facilities in the field of renewable gases. Among
other things, investment subsidies of €40m per year will be made available for green hydrogen
production plants. Tariff relief and exemptions from end-user charges for electrolysis (similar to the
exemption from tariffs and end-user charges for pumped storage that will be granted in the future for
15 years) have also been defined.
Ecosocial tax reform
A proposal for ecosocial tax reform was presented in autumn 2021. The project envisaged in the
government programme provides for progressive national carbon pricing of sectors outside the EU
Emissions Trading Scheme (buildings, transport, sections of industry) from 1 July 2022, offset by a
substantial relief mechanism. Carbon will be priced at €30/t in July 2022, rising to €55/t by 2025. In 2026,
the price is to be aligned with the EU ETS. Reimbursement will be made by easing the burden of labour
and pensions (e.g. wage tax reduction), by reducing the pressure on the economy (e.g. reduction of
corporate income tax) and through other compensation mechanisms such as regional bonuses.
The amendments of the Energy Efficiency Act (Energieeffizienzgesetz, EEffG) and the Electricity
Industry and Organisation Act (Elektrizitätswirtschafts- und -organisationsgesetz, ElWOG) for
implementation of the Clean Energy Package were not presented in 2021. The Austrian Climate Change
Act (Klimaschutzgesetz, KSG) and the amended Environmental Impact Assessment Act (Umwelt-
verträglichkeitsprüfungsgesetz, UVP-G) are also not expected until 2022. Likewise, a decision on the
Austrian hydrogen strategy was not made in 2021.
TCFD
ANNUAL FINANCIAL REPORT - GROUP 51
New legal framework for the energy sector in Germany
The Climate Change Act passed by the German Bundestag in summer 2021 ushered in stricter
requirements for mitigating climate change and made the goal of achieving greenhouse gas neutrality
by 2045 binding. Accompanying the bill, Germany’s federal government adopted an emergency
programme to underpin the ambitious goals.
Emissions are to be cut by 65% by 2030 (1990 baseline). An 88% reduction in greenhouse gases is
targeted for 2040. New ambitious targets have also been defined in the individual sectors of the
economy such as transport and energy. Besides the ambitious expansion targets, changes in approval
procedures are also expected to accelerate the expansion of renewables. In future, power plant
upgrades will face fewer hurdles. This could make it easier to replace existing wind power plants with
new ones. Looking ahead, only the question of whether the replacement of the plant will bring about an
improvement for the environment will be decisive for approval.
The new federal government that took office in December 2021 will continue on the path to climate
neutrality in 2045 and aims to achieve the climate targets by moving ahead with the expansion of
renewables and a climate check for all draft legislation. Going forward, achievement of targets will be
reviewed on the basis of a multi-year national account of climate action policy.
TCFD
52
Finance
Factors affecting the result
Wholesale electricity prices
VERBUND contracted for most of its own electricity generation for 2021 on the futures market back
in 2019 and 2020. Ever since the split of the joint German-Austrian price zone in October 2018, separate,
higher prices have prevailed in Austria. Prices for AT 2021 front-year base load contracts (traded
in 2020) averaged €42.8/MWh, and prices for DE 2021 front-year base load contracts averaged
€40.2/MWh. Futures market prices thus decreased year-on-year by 16.4% (AT) and 16.0% (DE).
Front-year peak load (AT) contracts traded at an average of €52.0/MWh and front-year peak load (DE)
contracts traded at an average of €49.0/MWh. Futures market prices in this area thus also decreased
year-on-year by 16.3% (AT) and 14.9% (DE). The declines are mainly attributable to the COVID-19
pandemic.
Following the sharp drop in the previous year due to COVID-19, wholesale trading prices for
electricity on both the Austrian and German spot markets rallied significantly in quarters 1–4/2021.
Prices for base load electricity increased by an average of 222.4% to €106.8/MWh in Austria and by
217.9% to €96.8/MWh in Germany. Prices for peak load rose by 218.7% to €127.3/MWh in Austria and by
208.3% to €115.5/MWh in Germany. These massive increases can be attributed to the sharp rise in CO
2
and primary energy prices.
Water supply
The water supply in rivers is of particular significance for VERBUND since around 94% of its electricity is
produced using hydropower. Water supply is measured by means of a hydro coefficient, with the value
of 1.00 representing the long-term average. In the 2021 reporting period, the hydro coefficient for run-
of-river and pondage power plants was 0.95, which is 5 percentage points lower than the long-term
average and 6 percentage points below the prior-year level (1.01). The hydro coefficients for the
individual quarters differed substantially as follows: quarter 1: 0.99 (previous year: 1.09), quarter 2: 0.93
(0.86), quarter 3: 1.03 (1.05) and quarter 4: 0.83 (1.11).
27
32
44
48
40
17 18 19 20 21
Futures prices €/MWh
Futures prices traded in the year before supply. The years stated are the respective years of supply.
2017 – 2018: Market area Gemany/Austria. Starting 2019: Market area Germany or Austria respectively.
Spot prices: 1/1/2017 – 30/9/2018 Market area Germany/Austria, starting 1/10/2018 Market area Germany or Austria respectively. Average prices.
Spot market prices €/MWh
Source: EEX, EPEX Spot
Front Year Base DE Front Year Base AT Spot Base DE Spot Base AT
27
32
47
51
43
17 18 19 20 21
34
44
38
30
97
17 18 19 20 21
34
46
40
33
107
17 18 19 20 21
21 21 21 21
ANNUAL FINANCIAL REPORT - GROUP 53
Electricity supply and sales volumes
VERBUND’s own generation decreased by 2,176 GWh, or 6.5% in quarters 1–4/2020 to 31,306 GWh
compared with the same period in 2020. Generation from hydropower decreased by 2,185 GWh
compared with the previous year. The hydro coefficient for the run-of-river power plants dropped to
0.95, or 6 percentage points below the prior-year figure and 5 percentage points below the long-term
average. Generation from our annual storage power plants fell by 6.9% in quarters 1–4/2021 versus 2020.
The effects from increasing reservoir levels and a slightly lower inflow outweighed the higher generation
from turbining.
The volume of electricity generated by VERBUND’s wind power installations in quarters 1–4/2021
was 84 GWh lower in the reporting period than in the previous year due to the low wind supply in all
markets (Austria, Germany, Romania). Electricity generated by photovoltaic installations stood at
2.1 GWh in 2021.
By contrast, generation from thermal power plants increased by 91 GWh in quarters 1–4/2021.
The Mellach combined cycle gas turbine power plant produced 437 GWh more electricity in the
reporting period than in the prior-year reporting period due to market-driven operations for district
heating production in quarter 4/2021, in spite of the plant’s reduced use for congestion management.
The Mellach district heating power plant, which since the end of quarter 1/2020 has been used solely in
gas operation, was deployed for only a brief period and generated 345 GWh less electricity.
Purchases of electricity from third parties for trading and sales fell by 2,126 GWh. By contrast,
electricity purchased from third parties to cover grid loss and control power volumes increased by
587 GWh.
2017 2018 2019 2020 2021
Hydro coefficient (monthly averages)
long-term average
2.0
1.5
0.0
1.0
0.5
long-term maximum
since 1926
long-term minimum
since 1926
54
Group electricity supply GWh
2020 2021 Change
Hydropower
1
31,525 29,340 – 6.9%
Wind power 924 839 – 9.1%
Solar power 1 2 –
Thermal power 1,033 1,125 8.8%
Own generation 33,482 31,306 – 6.5%
Electricity purchased for trading and sales 29,918 27,793 – 7.1%
Electricity purchased for grid loss and
control power volumes 3,588 4,175 16.4%
Electricity supply 66,989 63,274 – 5.5%
1
incl. purchase rights
VERBUND’s electricity sales volume fell by 3,845 GWh in quarters 1–4/2021. Electricity volumes
delivered to consumers rose by 636 GWh. In the wake of the COVID-19-related decline in the previous
year, the numbers of both domestic and foreign customers rose. As at 31 December 2021, our residential
customer base comprised approximately 527,000 electricity and gas customers. By contrast, sales to
resellers fell by 2,116 GWh year-on-year, mainly due to lower delivery volumes in Austria. Electricity
deliveries to trading firms decreased by 2,366 GWh due to lower spot trading volumes. Own use of
electricity rose by 61 GWh. This increase is attributable above all to increased operation of the Group’s
power plants in turbining mode.
Group electricity sales volume and own use GWh
2020 2021 Change
Consumers 13,568 14,204 4.7%
Resellers 29,009 26,893 – 7.3%
Traders 20,164 17,799 – 11.7%
Electricity sales volume 62,741 58,896 – 6.1%
Own use 3,327 3,388 1.8%
Control power volume 921 990 7.5%
Total electricity sales volume and own use 66,989 63,274 – 5.5%
Approximately 56% of the electricity sold by VERBUND in quarters 1–4/2021 went to the Austrian
market (previous year: around 55%). International trading and sales activities focused on the German
market, which accounted for around 81% of all volumes sold abroad in 2021.
ANNUAL FINANCIAL REPORT - GROUP 55
Electricity sales by country GWh
2020 2021 Change
Austria 34,469 33,185 – 3.7%
Germany 23,098 20,798 – 10.0%
France 4,284 4,191 – 2.2%
Romania 875 669 – 23.5%
Other 15 53 –
Electricity sales volume 62,741 58,896 – 6.1%
Financial performance
Result €m
2020 2021 Change
EBITDA 1,292.8 1,579.0 22.1%
Adjusted EBITDA 1,292.8 1,579.0 22.1%
Operating result 921.9 1,266.8 37.4%
Group result 631.4 873.6 38.3%
Adjusted Group result 610.4 798.6 30.8%
Earnings per share in € 1.82 2.51 38.3%
(Proposed) dividend per share in € 0.75 1.05 40.0%
Income trend
VERBUND saw a significant improvement in the results posted for financial year 2021. EBITDA climbed
by 22.1% to €1,579.0m. The Group result surged by 38.3% to €873.6m compared with the same period of
the previous year. The hydro coefficient for the run-of-river power plants dropped to 0.95, or
6 percentage points below the prior-year figure and 5 percentage points below the long-term average.
Generation from our annual storage power plants fell by 6.9% in quarters 1–4/2021 versus 2020.
Generation from hydropower thus decreased by 2,185 GWh compared with the previous year. However,
the marked increase in wholesale electricity prices on the spot markets and the prices for short-term
futures gave a boost to earnings – unlike futures market prices, which declined in the period under
review. Consequently, the average sales price obtained for our own generation from hydropower rose
significantly by €10.2/MWh to €54.8/MWh. The first-time consolidation of Gas Connect Austria GmbH
(GCA), the regulated gas transmission and distribution system operator in Austria acquired with effect
from 31 May 2021, likewise made a positive contribution to earnings.
The Group result for financial years 2020 and 2021 was also influenced by non-recurring effects. These
were mainly effects from impairment tests and, in the financial result, the measurement of an obligation
to return an interest. Overall, non-recurring income of €75.0m was recorded in the Group result in
financial year 2021 (2020: €21.0m). Adjusted for these non-recurring effects, the Group result rose by
30.8% to €798.6m.
56
Dividend
A dividend of €1.05 per share for financial year 2021 will be proposed to the Annual General Meeting on
25 April 2022. The payout ratio calculated on the basis of the reported Group result amounts to 41.8% for
2021 and the payout ratio calculated on the basis of the Group result after adjusting for non-recurring
effects is 45.7%. In 2020, a dividend of €0.75 per share was paid out to shareholders; the payout ratio
amounted to 41.3% of the reported Group result or 42.7% of the adjusted Group result.
Revenue €m
2020 2021 Change
Electricity revenue 2,814.0 3,833.3 36.2%
Grid revenue 497.3 735.0 47.8%
Other revenue 138.4 208.4 50.5%
Revenue 3,449.8 4,776.6 38.5%
Electricity revenue
VERBUND’s electricity revenue rose by €1,019.2m to €3,833.3m in 2021. The sharp increase in electricity
revenue can be attributed to the massive increase in wholesale electricity prices. The average sales price
obtained for our own generation from hydropower rose significantly by €10.2/MWh to €54.8/MWh. This
increase is attributable to markedly higher prices on the spot markets as well as to the prices for short-
term futures on the wholesale electricity market, unlike futures market prices, which declined in the
period under review. In terms of quantities, electricity sales volumes decreased by 3,845 GWh, or 6.1%,
year-on-year.
Grid revenue
Grid revenue rose by €237.7m year-on-year to €735.0m in 2021. The revenue increase at Austrian Power
Grid AG (APG) of €113.9m is primarily due to an increase in revenue from balancing services and to
higher revenue from the auctioning off of cross-border capacity. An increase in national tariff revenue
resulting from volume effects was also recorded. This contrasted with a decrease in international
revenue from grid usage fees attributable to inter-TSO compensation. The first-time consolidation of
Gas Connect Austria GmbH (GCA), the regulated gas transmission and distribution system operator in
Austria acquired with effect from 31 May 2021, also increased grid revenue.
Other revenue and other operating income
Other revenue climbed by €69.9m to €208.4m. District heating revenue rose significantly due to the
inception of the new agreement to supply district heating from the Mellach combined cycle gas turbine
power plant as at 1 October 2021. Higher revenue from gas deliveries and emission allowances also had
a positive effect, as did the first-time consolidation of Gas Connect Austria GmbH and SMATRICS
GmbH & Co KG. Income from the sale of green electricity certificates declined, however. Other
operating income rose by €19.9m to €97.4m. This is largely due to the income from insurance
compensation assured in connection with the incident on 12 December 2017 that occurred at the
Baumgarten gas station operated by Gas Connect Austria GmbH. Own work capitalised also rose.
0.69
0.75
1.05
19 20 21
Dividend per share €
21
ANNUAL FINANCIAL REPORT - GROUP 57
Expenses €m
2020 2021 Change
Expenses for electricity, grid, gas and
certificates purchases 1,404.4 2,612.6 86.0%
Fuel expenses and other
usage-/revenue-dependent expenses 78.8 250.1 –
Personnel expenses 347.6 383.7 10.4%
Other operating expenses 276.3 318.3 15.2%
Expenses for electricity, grid, gas and certificates purchases
Expenses for electricity, grid, gas and certificates purchases increased by €1,208.2m to €2,612.6m. The
volume of electricity purchased from third parties for trading and sales as well as for grid losses and
control power declined by a total of 1,539 GWh. By contrast, higher procurement prices arising from
higher overall price levels for wholesale electricity gave rise to a significant increase in expenses.
Expenses for electricity purchases thus increased by €1,149.5m compared with the previous year.
Expenses for grid purchases fell by €4.7m and expenses for gas purchases climbed by €54.9m.
Fuel expenses
Fuel and other usage-/revenue-dependent expenses rose by €171.3m to €250.1m. There was a marked
increase in gas expenses due in particular to the sharp rise in gas prices. Production was also up year-
on-year (for details please refer to the section entitled Electricity supply and sales volumes). In addition,
the higher expenses for emission allowances, which were likewise attributable to the significant price
increases, pushed up expenses. By contrast, the discontinuation of coal-fired generation at the Mellach
district heating power plant with effect from 31 March 2020 resulted in the elimination of coal expenses.
Personnel expenses
Personnel expenses were up €36.1m year-on-year to €383.7m. The increase essentially resulted from the
consolidation of Gas Connect Austria GmbH and SMATRICS GmbH & Co KG with 383 employees in all.
In addition, the hiring of additional staff required for the implementation of strategic growth projects
raised personnel expenses, as did the 1.5% increase in pay rates under the collective bargaining
agreement.
Other operating expenses
Other operating expenses rose by €42.1m to €318.3m. This increase is primarily due to the consolidation
of Gas Connect Austria GmbH. Other contributory factors were the rise in goods and services purchased
for third-party maintenance of power plants and line systems, higher IT expenses and higher legal,
audit and consulting expenses.
Measurement and recognition of energy derivatives
Starting in the 2021 reporting period, the result from the measurement of energy derivatives and the
result from the recognition of futures to which hedge accounting in accordance with IFRS 9 is not
applied are no longer presented under revenue and electricity, grid, gas and certificates purchases but
combined in a separate item entitled Measurement and recognition of energy derivatives.
58
The 2021 reporting period shows a gain of €269.7m (previous year: loss of €127.4m). The gain was
mainly due to a surplus from positive recognitions of futures purchases on the stock exchange resulting
from the sharp increase in electricity prices. Futures are recognised on the fulfilment or cascading of the
contract. The products are replaced by equivalent positions in quarterly or monthly futures after the last
trading day of the product in question.
EBITDA
As a result of the above-mentioned factors, EBITDA increased by 22.1% to €1,579.0m.
Depreciation and amortisation
Amortisation of intangible assets and depreciation of property, plant and equipment rose by €38.5m to
€417.3m. Along with the first-time consolidation of Gas Connect Austria GmbH, this is due in particular
to an increase in the investment volume.
Impairment losses
Impairment losses of €9.9m mainly concerned the goodwill of Gas Connect Austria GmbH in the
amount of €8.8m. The impairment losses in financial year 2020 of €25.0m had essentially related to the
Mellach combined cycle gas turbine power plant (€14.9m) and the Gries run-of-river power plant
(€5.6m). Further details on impairment testing are presented in the notes to the consolidated financial
statements.
Reversal of impairment losses
Reversals of impairment losses of €115.0m, which are mostly attributable to assumptions of higher
electricity prices, resulted primarily from the reversal of impairment losses recognised on the wind
farms in Romania (€58.3m), the Mellach combined cycle gas turbine power plant (€24.5m), the
Malta/Reißeck storage power plant group (€11.7m) and the Zemm-Ziller storage power plant group
(€9.0m). The reversals of impairment losses of €32.9m in financial year 2020 had been attributable to
the reversal of impairment losses recognised on the wind farms in Romania. Further details on
impairment testing are presented in the notes to the consolidated financial statements.
48
33
115
19 20 21
Reversal of
impairment losses €m
21
ANNUAL FINANCIAL REPORT - GROUP 59
Financial result €m
2020 2021 Change
Result from interests accounted for using
the equity method 28.8 34.8 20.8%
Other result from equity interests 10.3 19.5 90.0%
Interest income 32.1 38.4 19.5%
Interest expenses – 81.0 – 77.8 – 4.0%
Other financial result 32.8 – 15.8 –
Impairment losses 0.0 – 18.3 –
Reversals of impairment losses 3.4 16.8 –
Financial result 26.4 – 2.4 –
Result from interests accounted for using the equity method
The result from interests accounted for using the equity method rose by €6.0m to €34.8m. This increase
is mainly due to the earnings contributions from KELAG-Kärntner Elektrizitäts-Aktiengesellschaft.
Other result from equity interests
The other result from equity interests increased by €9.3m year-on-year to €19.5m. This increase resulted
mainly from the non-recurring effect arising from the transitional consolidation of SMATRICS GmbH &
Co KG. Further details on the consolidation of SMATRICS GmbH & Co KG effective 30 September 2021
can be found in the notes.
37
28
35
19 20 21
Equity result - domestic €m
21
Equity method accounting
60
Interest income and expenses
Interest income increased by €6.3m to €38.4m compared with 2020 on account of the recognition of
default interest through profit or loss. Interest expenses fell by €3.2m to €77.8m, due in particular to the
decrease in interest payments on bonds. The positive effects from the repayments of principal in
financial year 2020 outweighed the negative effects from the issuance of a €500m bond in April 2021.
Interest expenses from credit facilities also decreased as a result of scheduled repayments.
Other financial result
The other financial result fell by €48.6m to €–15.8m. This decrease can be attributed primarily to the
measurement of an obligation to return an interest (€–56.2m) relating to the Jochenstein power plant on
the Danube River. Conversely, the measurement of securities funds through profit or loss in accordance
with IFRS 9 had a positive effect (€+9.4m).
Impairment losses and reversals of impairment losses in the financial result
The impairment losses of €18.3m resulted from the impairment loss recognised on Trans Austria
Gasleitung GmbH. As in the previous year, the reversal of impairment losses of €16.8m (2020: €3.4m)
resulted from the reversal of the impairment loss recognised on Ashta Beteiligungsverwaltung GmbH.
Further details on impairment testing are presented in the notes to the consolidated financial
statements.
Financial result
The financial result consequently declined by €28.8m, falling from €26.4m to €–2.4m.
Group result
After taking account of an effective tax rate of 22.1% and non-controlling interests in the amount of
€111.5m, the Group result amounted to €873.6m. This represents an increase of 38.3% compared with
the previous year. Earnings per share amounted to €2.51 (2020: €1.82) for 347,415,686 shares. The Group
result after adjustment for non-recurring effects was €798.6m, corresponding to an increase of 30.8% on
the prior-year period.
555
631
874
19 20 21
Group result €m
21
ANNUAL FINANCIAL REPORT - GROUP 61
Financial position
Consolidated balance sheet (condensed) €m
2020 Percent 2021 Percent Change
Non-current assets 11,285.3 94% 12,877.4 75% 14.1%
Current assets 702.3 6% 4,234.1 25% –
Assets 11,987.7 100% 17,111.6 100% 42.7%
Equity 6,807.4 57% 6,362.9 37% – 6.5%
Non-current liabilities 4,045.4 34% 4,404.4 26% 8.9%
Current liabilities 1,134.8 9% 6,344.2 37% –
Equity and liabilities 11,987.7 100% 17,111.6 100% 42.7%
Assets
The rise in non-current assets compared with 31 December 2020 is mainly attributable to the increase
in property, plant and equipment due in particular to the first-time consolidation of Gas Connect
Austria GmbH as at 31 May 2021. The other additions to property, plant and equipment of €842.8m were
reduced by depreciation of €375.3m. The main additions to property, plant and equipment related to
capital expenditure for the Austrian transmission network and replacement investments at Austrian and
German hydropower plants. The increase in current assets is primarily due to substantially higher
positive fair values for derivative hedging transactions in the electricity business resulting from the
sharp increase in wholesale prices for electricity, as well as to higher trade receivables and receivables
for guarantees in electricity trading.
Equity and liabilities
The decrease in equity is largely attributable to considerable negative effects from the measurement of
cash flow hedges recognised in other comprehensive income, resulting in particular from the sharp
increase in wholesale prices for electricity, as well as to the dividend payment by VERBUND AG. These
were offset by the profit for the period generated in quarters 1–4/2021 and by higher equity attributable
to non-controlling interests as a result of the first-time consolidation of Gas Connect Austria GmbH,
which increased equity. The increase in current and non-current liabilities was primarily the result of
sharply higher negative fair values for derivative hedging transactions in the electricity business arising
from the steep rise in wholesale prices for electricity, higher current borrowings from banks, the Green
and Sustainability-linked Bond issued in quarters 1–4/2021 and higher financial liabilities in
connection with the acquisition of Gas Connect Austria GmbH.
SDG 8
62
Cash flows
Cash flow statement (condensed) €m
2020 2021 Change
Cash flow from operating activities 1,182.1 98.2 – 91.7%
Cash flow from investing activities – 596.8 – 1,105.3 85.2%
Cash flow from financing activities – 580.8 1,276.5 –
Change in cash and cash equivalents 4.6 269.4 –
Cash and cash equivalents at the end of the period 49.2 318.6 –
Cash flow from operating activities
Cash flow from operating activities amounted to €98.2m in the 2021 reporting period, down €1,084.0m
on the prior-year figure. In addition to changes in working capital and significantly higher income tax
payments, the difference was chiefly due to considerably higher margining payments for hedging
transactions in electricity trading provided as security for open positions held with exchange clearing
houses.
Cash flow from investing activities
Cash flow from investing activities amounted to €–1,105.3m in the 2021 reporting period (2020:
€–596.8m). The change compared with the previous year is mainly attributable to the acquisitions of
Gas Connect Austria GmbH (€–230.5m) and SMATRICS GmbH & Co KG (€–16.7m), as well as to a
higher cash outflow from capital expenditure for intangible assets and property, plant and equipment
(€–251.7m).
Cash flow from financing activities
Cash flow from financing activities amounted to €1,276.5m in the 2021 reporting period, a change of
€+1,857.3m. The main reason for the change was higher net inflows associated with money market
transactions (€+1,395.2m) and the higher cash inflow from the assumption of financial liabilities
(€+489.1m). The higher dividend payouts (€–36.8m) and the increased cash outflow from the repayment
of financial liabilities (€–12.0m) had an offsetting effect.
ANNUAL FINANCIAL REPORT - GROUP 63
Key performance indicators and financial governance
VERBUND’s principal management KPIs are net debt/EBITDA and free cash flow. VERBUND uses
ROCE to measure value creation. Starting from the 2019 reporting period, ROCE will now only be
calculated for VERBUND’s unregulated business activities, with retroactive effect from 2018.
Net debt/EBITDA and free cash flow
The development of the KPIs net debt/EBITDA and free cash flow in 2021 is shaped to a large extent by
the sharp increase in wholesale electricity prices and the resulting high security deposits for the
exchange-traded futures contracts for hedging own production of electricity.
The ratio of net debt to EBITDA was 2.2 at 31 December 2021 (2020: 1.5). The deterioration was
mainly attributable to higher net debt, resulting primarily from higher current borrowings from banks.
Information on the change in EBITDA is presented in the Finance section.
Free cash flow after dividends amounted to €–1,329.5m at the end of the reporting period (2020:
€299.5m). The change is chiefly due to a substantially lower operating cash flow (for more information
see the Finance section), increased capital expenditure on property, plant and equipment and
consolidated subsidiaries, and higher dividend payments compared with 2020.
Return on capital employed (ROCE)
ROCE is an indicator of the profitability of the Group’s operating assets. ROCE for VERBUND’s
unregulated business activities at the end of 2021 was 11.4% (2020: 9.6%). The objective is for this figure
to exceed 9.0% in the long term. ROCE is calculated by dividing net operating profit after tax (NOPAT) by
average capital employed.
NOPAT equates to operating profit before financing costs, including the result from equity interests
net of income tax. At the end of financial year 2021, NOPAT for VERBUND’s unregulated business
activities was €870.0m (2020: €665.9m). The increase is mostly due to the change in profit before tax and
is explained in the Finance section.
Capital employed corresponds to average total assets, net of those assets that do not contribute to
performance or commercialisation, and less non-interest-bearing debt. Average capital employed for
VERBUND’s unregulated business activities amounted to €7,624.1m at the end of 2021 (2020:
€6,936.4m). The Group return exceeded the weighted average cost of capital (WACC) of the Group’s
unregulated business activities in 2021 (31 December 2021: 4.00%).
1.9
1.5
2.2
19 20 21
Net debt/EBITDA
21
7.8
9.6
11.4
19 20 21
ROCE
21
64
Gearing
Gearing is determined as follows:
Interest-bearing net debt (condensed) €m
2020 2021 Change
Financial liabilities 858.5 2,849.4 –
Interest-bearing provisions 880.1 825.7 – 6.2%
Other interest-bearing liabilities 322.3 345.4 7.2%
Cross-border leasing 0.1 0.1 5.0%
Cash and cash equivalents – 49.1 – 318.4 –
Securities – 129.0 – 138.5 –
Other liquid financial assets – 1.7 – 52.8 –
Interest-bearing net debt 1,881.2 3,510.8 86.6%
Equity 6,807.4 6,362.9 – 6.5%
Gearing ratio 27.4% 55.2% –
ANNUAL FINANCIAL REPORT - GROUP 65
Financing
Financing strategy
In today’s volatile energy market environment, VERBUND bases its financing strategy on three pillars:
1. safeguarding liquidity and ensuring suitable liquidity reserves; 2. securing a solid credit rating over
the long term; and 3. implementing innovative financial transactions in the field of green finance.
Safeguarding liquidity and ensuring suitable liquidity reserves
For VERBUND, ensuring that liquidity is available at all times has the highest priority. As at
31 December 2021, VERBUND had an ESG-linked syndicated loan in the amount of €500.0m at its
disposal that had not been drawn down. The loan, which was taken out with twelve domestic and
international banks with good credit ratings, matures in 2023 with two additional extension options of
one year in each case. VERBUND also had access to committed lines of credit amounting to €300m and
uncommitted lines of credit amounting to approximately €2,345.0m at the end of 2021. As at
31 December 2021, €1,430.0m of these credit lines had been drawn down.
VERBUND is an innovation leader in green finance and has been
instrumental in developing the green finance market.
Securing a solid, long-term credit rating
The better a company’s credit rating, the easier and more inexpensive it is to benefit from full access to
international capital markets. Having a solid credit rating gives VERBUND access to various financing
instruments, among other things, in the capital market. As at 31 December 2021, VERBUND had a long-
term rating of A with a stable outlook from Standard & Poor’s (S&P) and a rating of A3 with a stable
outlook from Moody’s. For the long term, VERBUND is aiming for a solid “A” category rating. VERBUND
is therefore focusing primarily on optimising free cash flow and on the two key rating-related
performance indicators of FFO/net debt and RCF/net debt.
Implementing innovative financial transactions in the field of green finance
Green finance has very high priority for VERBUND because the entire strategy is focused on
sustainability and this area is decisive in the international arena and a cornerstone of the national
climate strategy. VERBUND will continue to position itself as a pioneer in a future decarbonised energy
market.
Following a number of innovative transactions in recent years such as the issuance of the first green
bond in the German-speaking region, the world’s first green Schuldschein over a digital platform and
the first syndicated loan whose margin structure is linked exclusively to VERBUND’s ESG rating
(sustainability rating) over the term of the loan, a Green & Sustainability-linked Bond was issued in 2021
that combines all four available sustainable components in green finance in a single transaction:
TCFD
As at 31/12/2021:
S&P: A/stable outlook
Moody’s: A3/stable
outlook
Green finance initiatives:
green bond, digital green
Schuldschein, ESG-
linked loan and Green &
Sustainability-linked
Bond
TCFD
66
1. Use of proceeds (classic project-specific green bond)
2. EU taxonomy aligned (the projects must be aligned with the EU Taxonomy Regulation as at the date
of issue)
3. Sustainable link (margin dependency relating to the achievement of the Group’s sustainability goals)
4. UN Principles for Responsible Investments (strong preference for sustainable investors in accordance
with a transparency requirement in bookbuilding).
Specifically, VERBUND is planning to use the proceeds exclusively for “green” projects conforming to
the VERBUND Green Financing Framework. Developed at the beginning of 2021, this Framework is
consistent with the current (as of the issue date) draft of the EU Taxonomy Delegated Act and the EU
Green Bond Standard. It was also drawn up in accordance with the ICMA Green Bond Principles and
the ICMA Sustainability-linked Bond Principles. The proceeds from this bond will be used to finance
the rehabilitation and expansion of a hydropower plant in Germany and high-voltage power line
projects in Austria. ISS ESG, a leading global sustainability rating agency, rated the quality of the Green
Financing Framework very positively in a second party opinion. In addition, VERBUND commits to
expanding both the newly installed production output exclusively in the areas of hydropower, wind
power and solar power by at least 2,000 MW (KPI 1) and the installation of additional transformer
capacity (necessary for feeding the renewable electricity into the high-voltage grid) by at least
12,000 MVA (KPI 2). Both of these targets are very ambitious. If one of the targets is not achieved by
31 December 2032, the coupon payments of the bond will increase by 0.25% p.a. for the remaining term
of the bond (as also detailed in the bond terms).
In the period from 1 January 2021 to 31 December 2021, the values for KPI 1 increased by 43 MW * to a
total of 8,735 MW (basis 31 December 2020: 8,692 MW *) and the values for KPI 2 by 1,150 MVA to a total
of 31,960 MVA.
As at 31 December 2021, VERBUND’s borrowing portfolio was composed as follows: 34.7% bonds and
65.3% loans.
The following key performance indicators refer to purely external financial liabilities, excluding
former cross-border leasing transactions, exclusive financial guarantees and exclusive limited
partnership interests. The carrying amount of VERBUND’s financial liabilities was €2,849.4m as at
31 December 2021. The entire amount was financed in euros. A total of 43.9% of these financial
liabilities had fixed interest rates and 56.1% had variable interest rates. As at 31 December 2021, the
duration of all liabilities was 4.4 years and the average term to maturity was 4.7 years. The effective
interest rate was 1.68%.
Repayments of principal and repayment structure
In financial year 2021, principal payments of €30m were made on long-term borrowings. A total of €25m
will fall due in 2022 and €25m is scheduled to be repaid in 2023.
* corrected values
1.1
0.9
2.8
19 20 21
Financial liabilities €bn
21
Carrying amounts
ANNUAL FINANCIAL REPORT - GROUP 67
25 25
672
20
12
10
110
10
542
2022 2023 2024 2025 2026 2027 2028 2029 >2029
Repayments €m
68
Hydro
Generation of electricity from hydropower is reported in the Hydro segment. VERBUND is one of
Europe’s biggest producers of hydroelectricity and around 94% of the total electricity VERBUND
generated in 2021 came from hydropower. Especially in Austria, hydropower is the basis for generating
electricity from renewable energy sources. It has many advantages: it is renewable, clean, reliable and
flexible and delivers high-value peak load and base load power. VERBUND’s strong hydropower base
with a very extensive portfolio provides an outstanding competitive basis to meet the needs of the
energy market of the future in a cost-effective manner.
Flexible pumped storage power plants are indispensable for ensuring
integration of volatile new renewable energy sources into the power grid.
Business performance
KPIs – Hydro segment
Unit 2020 2021 Change
Total revenue €m 1,267.4 1,465.5 15.6%
EBITDA €m 926.8 1,106.0 19.3%
Result from interests accounted for
using the equity method €m 0.7 0.3 –
Capital employed €m 5,985.3 5,920.6 – 1.1%
The increase in total revenue and EBITDA is mainly due to higher average prices obtained for
electricity. Generation from both storage power plants and run-of-river power plants declined. The
hydro coefficient for the run-of-river power plants was 0.95 (Q1–4/2020: 1.01).
The reduction in capital employed was mainly due to higher deferred tax liabilities and a decrease in
property, plant and equipment, which was offset by higher current receivables.
Segment report
ANNUAL FINANCIAL REPORT - GROUP 69
Energy supply
Energy generation overview
Electricity generation
Number
1
Maximum
electrical
capacity
in MW
1
Mean energy
capability in
GWh
3
2019
Generation in
GWh
2020
Generation in
GWh
2021
Generation in
GWh
4
Hydropower
2
129 8,307 29,141 30,660 31,525 29,340
1
as at 31 December 2021 //
2
incl. purchase rights //
3
mean energy capability includes generation from natural inflow //
4
generation from natural inflow (run-of-river and storage
power plants) as well as from pumping/turbining
As at the end of 2021, VERBUND electricity from hydropower came from 92 run-of-river power plants
and 23 storage power plants. We also held purchase rights at 14 run-of-river power plants owned by
Ennskraftwerke AG. The mean energy capability – i.e. annual generation potential assuming an average
water supply (standard year) – was 29,141 GWh.
In the 2021 reporting period, the hydro coefficient for run-of-river and pondage power plants was
0.95, which is below the long-term average and also below the figure for the previous year (1.01). The
hydro coefficients for the individual quarters differed substantially as follows: quarter 1: 0.99 (previous
year: 1.09), quarter 2: 0.93 (0.86), quarter 3: 1.03 (1.05) and quarter 4: 0.83 (1.11).
Generation from our annual storage power plants fell by 6.9% in quarters 1–4/2021 compared with
the prior year. The effects from increasing reservoir levels and a slightly lower inflow outweighed the
higher generation from turbining.
VERBUND’s hydropower plants had a capacity of 8,307 MW (maximum electrical capacity =
maximum capacity for sustained operations) as at 31 December 2021.
Capacity changes 2020–2023
1
MW
2020 2021 2022 2023
Hydropower
2
8,267 8,307 8,417 8,467
1
as at 31 December of each year //
2
incl. purchase rights3
The capacity changes in the hydropower segment in 2021 are attributable to the commissioning of the
completed rehabilitation projects for the Malta Oberstufe and Salza power plants. Additional increases
in mean energy capability and capacity are expected for the coming years due to new construction
projects and rehabilitations.
Availability of hydropower plants
The availability of hydropower plants was affected in 2021 by the large number of ongoing
rehabilitations and new construction projects.
Overall, the Austrian power plants of VERBUND Hydro Power GmbH (run-of-river and storage power
plants) had average availability of 91.9% in 2021. This availability level is lower than the mean for the last
five years (93.7%); the ongoing overhaul of the generator sets at the storage power plants had a
particularly significant impact here.
GRI EU1
GRI EU2
SDG 7
GRI EU10
GRI EU1
SDG 7
GRI EU30
SDG 7
70
The Grenzkraftwerke power plants on the Inn and Danube rivers (Bavaria/Austria) achieved overall
availability of 92.6% in 2021, falling short of the average for the last five years of 93.2%.
The Bavarian run-of-river power plants operated by VERBUND Innkraftwerke GmbH also achieved
an overall availability level of 85.6% in 2021, which was significantly lower than the average of 91.2% for
the last five years. This was principally due to the decommissioning of the existing power plant in
connection with the new construction project at the Töging site.
Operational management under COVID-19
Coping with the COVID-19 pandemic dominated operations once more in 2021. It prompted the crisis
management function of VERBUND Hydro Power GmbH (VHP) to draw up its own matrix of COVID-19
measures with four degrees of protection. Each degree of protection entails measures in relation to
masking, access rules, remote working, specifications on the organisation of collaboration (separation
of teams) and limits on the numbers of participants in work meetings. This ensured reliable operations
at the hydropower plants at all times.
New power plant projects
New construction of the Gratkorn power plant on the Mur River
The investment decision was taken in December 2020 for the Gratkorn power plant on the Mur River, as
a partner project between VHP (50%) and Energie Steiermark Green Power GmbH (50%) with a
maximum electrical capacity of 11 MW and a mean energy capability of 54.2 GWh.
After the construction decision had been taken, public briefings on the project as well as the planned
construction measures were initiated, and a “construction platform” was installed for maintaining
regular contact with the local communities.
Following the detailed planning, the initial preparatory construction work (including the clearing)
began in autumn 2021. The actual construction phase is due to start in quarter 1/2022. Commissioning
is scheduled for early 2024. An investment grant for the project under the Green Electricity Act (Öko-
stromgesetz, ÖSG) and a COVID-19 investment premium have been assured.
While the power plant is being built, a number of measures will also be implemented for the region.
These include improvement of flood protection, enhancement of the cycle path network and a new
crossing of the Mur River for pedestrians and cyclists.
Construction of the new Reißeck II plus pumped storage power plant
The investment decision for the Reißeck II plus project was also taken in December 2020 and
construction began in May 2021. Construction progressed according to plan, which meant that in 2021
all drifts were fully constructed and the caverns were completely excavated. Commissioning is
scheduled for November 2023.
The Reißeck II plus project will expand and improve the existing power plant system in the Reißeck
group through the construction of a 45 MW pumped storage power plant to facilitate the transfer of the
stored contents from Great Mühldorf Lake to the existing upper reservoirs and thereby optimise the
system.
GRI 413-1
ANNUAL FINANCIAL REPORT - GROUP 71
Construction of the new Limberg III pumped storage power plant
Limberg III is a twin project to the existing Limberg II pumped storage power plant. Two pump-turbines
with a total capacity of 480 MW will be built in a separate power plant cavern and the Limberg Dam will
also be raised to increase storage capacity in addition to flexibility.
The investment decision for this project was taken in March 2021 and initial construction activities
began only a month later. Commissioning is scheduled for 2025.
After the construction decision was taken, VERBUND notified the local community about the
construction measures and set up a central communications department for ongoing enquiries.
Here, too, construction progressed according to plan, with boring of the drainage tunnel and
excavation of the starter tunnel for the tunnel boring machine, among other things, being completed
in 2021.
In connection with this large construction site, a raft of environmental measures are also being
implemented such as obtaining land-use permissions for a European nature reserve called Alpine
Alluvial Plain Drossen, restoration of storage areas using a special seed-sod combination technique and
restoration of areas from the 1950s construction period.
Other new construction projects
In addition to the new construction projects described above, VERBUND continued work on the
Spiegelwald small-scale power plant in the Zillertal Valley in 2021. Other power plant projects are at the
planning stage. The public will be engaged in accordance with the principles of stakeholder
management described in the section entitled Sustainable planning and stakeholder management.
The planned Stegenwald power plant on the central Salzach River, a project that is being
implemented in collaboration with Salzburg AG, will have a capacity of 14.5 MW and a mean energy
capability of 72 GWh. Work on this project in 2021 focused on advancing the approval procedure. In
addition to the notification of water rights approval and approval under forestry legislation, approval
under nature conservation law has now also been obtained in the first instance. However, the Salzburg
Ombudsman for the environment objected to this ruling. The proceedings are now pending in the State
Administrative Court.
The Group is giving further consideration to implementing an ecological innovation project at the
Tittmoning basin of the Salzach River near the German-Austrian border entailing a combination of river
restoration for riverbed stabilisation plus river enhancement for the creation of habitats and energy use
(run-of-river power plant). In 2021, the preparatory work continued to focus on an initial site on the
Lower Salzach, where the integration of innovative compact turbines into the ramp structure required
to stabilise the riverbed will generate around 30 GWh of green electricity.
Also on the border between Bavaria and Austria, VERBUND continues to work hard on obtaining
approval for the Riedl energy store, an efficient pumped storage power plant with 300 MW of flexible
capacity. The completely revised documentation required for approval was submitted to the
responsible district administrative office in Passau at the beginning of December. After a further
completeness check has been performed, the documents should be made available to the public
in 2022.
72
Expansion and rehabilitation projects
Modernisation and expansion of the Inn power plant in Töging/Jettenbach
The project comprises construction of a new power plant and weir, raising the sealing capacity of the
Inn channel and implementing flood protection measures at the Jettenbach reservoir. On completion, it
is expected to increase total generation by 139 GWh to a total of 696 GWh and installed capacity by
32.4 MW to 117.7 MW. Construction began in 2018 and commissioning is scheduled for 2022.
Concrete construction work at the Jettenbach weir site was essentially completed by the end of 2021
with a bridge over the inlet structure and a control building. Installation of the weir locks began in
autumn 2021 and will continue into spring 2022. The shell of the Mittergars pumping station was
likewise completed in 2021.
At the Töging power plant site, concrete construction work had also been essentially completed by the
end of 2021, generator sets 1 and 2 had been installed and a pressure test had already been successfully
carried out in November 2021. Final installation of generator set 3 is under way. Decommissioning of
the existing power plant took place on schedule in September 2021.
The project is accompanied by a variety of protective, preventative and compensatory environmental
measures. These include standing water bodies used as spawning habitats and fish habitats, grassland
development along the embankments to promote biodiversity, establishment of reptile habitats and
structural and hydromorphological improvements. Measures to permanently maintain the
environmental function at the Jettenbach reservoir were kicked off in summer 2021. Based on the
agreement with the Free State of Bavaria, supplementary environmental measures for the diversion
channel are being developed and implemented in cooperation with the water management authorities.
However, the project information events held alternately in Jettenbach and Töging since the start of
construction had to be significantly curtailed in March 2020 for safety reasons in compliance with the
COVID-19 restrictions. In 2021, for example, residents, political representatives and educational
institutions could only visit the sites on personal invitation. The public hotline as the first point of
contact for residents was available year-round.
Talks with the residents affected by the increase in the groundwater level were continued.
Furthermore, negotiations on a compensation agreement are being held with residents in relation to
flood protection measures.
Modernisation of the Bösdornau power plant
Modernisation work at the Bösdornau power plant in connection with the construction of the Tuxbach
diversion tunnel began in quarter 2/2021. Owing to complications with a neighbouring landowner, the
commissioning targeted for the end of 2021 was postponed until 2022. Further restoration and
compensatory measures will be completed in 2022 and 2023.
Rehabilitation projects
Ybbs-Persenbeug rehabilitation
Austria’s oldest Danube power plant at Ybbs-Persenbeug has been undergoing progressive
modernisation since 2012. After the three main generators at the North power plant had been replaced
by 2018, modernisation of the three remaining generator sets of the South power plant began in
autumn 2019. Renovation of the first main generator and thus the last of the six vertical generator sets to
be replaced commenced in September 2021. Once the rehabilitation measures have been completed
ANNUAL FINANCIAL REPORT - GROUP 73
in 2022, the plant will have an additional mean energy capability of 77 GWh and an additional
maximum electrical capacity of 18 MW.
Ottensheim-Wilhering rehabilitation project
In the Ottensheim-Wilhering rehabilitation project, the first of nine generator sets to be refurbished
(generator set 5) was successfully commissioned in July 2021. Renovation work on generator set 2
commenced in September 2021. Once the rehabilitation measures have been completed in 2029 for all
nine generator sets, the plant will have an additional mean energy capability of 56 GWh and an
additional maximum electrical capacity of 45 MW.
Kaprun-Oberstufe rehabilitation projects
In the Kaprun-Oberstufe rehabilitation project, the first of two generator sets to be refurbished was
successfully put into operation in July 2021. Renovation of the second generator set then began. On
completion of the work in 2022, turbining capacity will increase by 48 MW, pumping capacity by 30 MW
and mean energy capability by 10 GWh.
Malta power plant group rehabilitation programme
The Malta rehabilitation programme consists of sub-projects to rehabilitate the Malta-Oberstufe and
the Malta-Hauptstufe stations and to replace the existing Hattelberg pumping station with a new
pumping station in Reißeck. On completion of all work in 2022, the turbining capacity of the above-
mentioned plants will increase by 40 MW, the pumping capacity by 232.3 MW and the mean energy
capability by 2 GWh.
The Malta-Oberstufe sub-project was essentially completed in December 2021 with the
commissioning of the second of two generator sets. Commissioning of the Reißeck pumping station,
construction of which began in November 2020, is now planned for quarter 1/2022. And in the Malta-
Hauptstufe sub-project, renovation of the first of two pumps was completed in summer 2021. Overhaul
of the second pump is planned for 2022.
Ering-Frauenstein rehabilitation project
In the Ering-Frauenstein rehabilitation project, renovation of the first of three generator sets to be
refurbished (generator set 3) began in September 2021. Once the rehabilitation measures have been
completed in 2024, the plant will have an additional mean energy capability of 50 GWh and an
additional maximum electrical capacity of 21 MW.
Additional rehabilitation projects in the planning stages
In the other rehabilitation projects, including those in the Gerlos I, Arnstein, Laufnitzdorf and Roßhag
power plants, planning and design work continued and implementation measures began.
74
Environmental measures: excellent track record in restoration maintained
VERBUND Hydropower expects to incur total costs of over €280m for implementing the requirements of
the EU Water Framework Directive in force from the time measures were initiated in 2021 up to 2027.
This is in addition to its ongoing expenses for operation and maintenance, particularly in relation to
monitoring and conservation of the fish passes built. Selected nature conservation activities are
presented on the VERBUND website and the EU-funded LIFE projects each have their own project
website with relevant information for the public.
The most extensive individual project carried out in 2021 was the completion of the work for the LIFE
project entitled “Passability and habitat enhancement at the Altenwörth power plant”.
Furthermore, the fish pass at the Ferlach-Maria Rain power plant on the Drau River was completed,
which is in fact the highest in Europe. The main technical construction work to create passability began
at the Feistritz-Ludmannsdorf power plant. Once this measure is completed, the Drau will be passable
along its length from the state border to Paternion.
Fish passability on the Mur River has been almost completely achieved. In addition, fish passes were
put into operation in 2021 on the Inn River at the Nussdorf power plant and on the Enns River at the
Staning (Ennskraftwerke) power plant. As of the end of 2021, a total of 66 power plant sites now have
fish passes, meeting the goal of increasing the number of fish passes by 50% from 2015 to 2021.
Work has also focused on planning additional generously sized, predominantly semi-natural fish
passes on the Danube River, the Inn River to the German border and the Inn River in Bavaria (which are
combined, among others, in the two LIFE projects entitled “Bluebelt Danube-Inn” and “Riverscape
Lower Inn”), as well as on monitoring the fish ladders already constructed.
Fish passes
2019 2020 2021
Locations Number 54 62 66
The technical possibilities for limiting hydropeaking at the storage and pumped storage power plants
of VERBUND Hydropower are currently being evaluated in detailed feasibility studies, particularly at the
Salzach, Enns and Teigitsch rivers. Multiple research projects focused on extensively investigating
outstanding issues relating to EU Water Framework Directive specifications. Through the Christian
Doppler Laboratory for Sediment Research and Management, for example, the Vienna University of
Natural Resources and Life Sciences is systematically reviewing options for improving river
sedimentation along the bodies of water impacted by power plants in Austria. The project will continue
for several years. In the ÖkoResch project, the Vienna University of Natural Resources and Life Sciences
is evaluating the opportunities and limitations of residual flow release in high mountain areas in pilot
projects and providing scientific support for hydropeaking tests. Initial specific implementation projects
for reducing hydropeaking effects are planned for 2022.
Sustainable planning and stakeholder management
In all major projects, VERBUND Hydropower considers the responsibility to society and the
environment right from the start. Great importance is placed during all stages of planning and
implementation on executing construction work with the utmost consideration and ensuring that the
effects of plant operation on the environment are minimal. In all projects, a strong focus is placed on
dialogue with citizens (beginning as early as the planning stage). Wherever possible, VERBUND also
GRI EU13
GRI 304-1
A description of
conservation measures
at VERBUND can be
found in the
Environmental
performance section and
at www.verbund.com >
About VERBUND >
Responsibility >
Environment
SDG 15
GRI 102-43
GRI 103-2
GRI 413-1
ANNUAL FINANCIAL REPORT - GROUP 75
seeks to leverage synergies in planning and execution to provide direct advantages for those affected
(for example by improving local flood protection installations and through appropriate transportation
infrastructure).
Regrettably, 2021 was once again severely impacted by the COVID-19 pandemic. Forums for personal
interaction, including local resident briefings, meetings with mayors and tourism associations, as well
as local council information sessions and other stakeholder dialogue formats, which number among
VERBUND’s standard communication tools, had to be scaled back significantly or postponed until
further notice in 2021. This included the open days, which VERBUND Hydropower considers important
opportunities for companies and local residents to come in contact largely outside of projects.
In project and stakeholder communication, many participants have now developed a routine of
exchanging information over video conferences. Where absolutely necessary or useful, the information
needs of individual stakeholders were also met in 2021 in small groups under appropriate conditions –
VERBUND was also able to contribute to the INNsieme River Experience Day at the Ering-Frauenstein
power plant.
Information on the major projects is also provided on the VERBUND website, and there are separate
websites for the LIFE projects. Efforts in this regard were further intensified and communication in
social media intensified. Compliance with the most stringent environmental standards is reviewed
periodically by internal and external auditors during regular operations.
Examination of the flooding on the Drau River in 2012
A total of around 90 civil proceedings for possible damages are still pending in Austria and Slovenia as a
result of the Drau flooding in 2012. The Slovenian proceedings are still in the first-instance evidentiary
stage.
Constructive measures to reduce noise emissions at the Malta-Hauptstufe power plant
Through the implementation of technical measures, the noise emissions from the Malta-Hauptstufe
pumped storage power plant had been reduced by 2018 to such an extent that possible health hazards
have been and are ruled out. This was confirmed in 2018 through measurements by local residents and
subsequently in expert reports.
As part of the rehabilitation of the Malta-Hauptstufe project that is currently being implemented, the
existing pumps will be replaced by new, more efficient, quieter pumps to be able to reduce these
emissions even further. The first of two pumps was modernised in the first half of 2021. Initial
measurements point to a further significant improvement in the situation. A report testing the noise
levels has been commissioned for the first pump. Overhaul of the second pump is planned for 2022.
Hydro Consulting
Since 2017, VERBUND has been progressively developing and setting up its Hydro Consulting operating
segment based on the comprehensive experience of VERBUND Hydropower’s highly skilled team of
experts. In addition to increasing profit, this operating segment’s activities are primarily focused on
maintaining and/or expanding VERBUND’s core competencies in the field of hydropower while gaining
additional insights that will benefit the Group’s own installations.
Moreover, the specific expertise of VERBUND Hydropower will contribute to efficient, safe, and
socially and environmentally compatible implementation of projects worldwide, thus furthering the
sustainable development of hydropower. In the selection of projects, importance is also attached
GRI 102-44
GRI 413-1
76
accordingly to compliance with international standards (e.g. World Bank, IHA) concerning
sustainability.
A total of 14 service contracts with an order backlog of around €11m (2021–2025) were processed in 2021.
Of particular note are the ongoing technical project management contract for the construction of the
89 MW joint power plant on the Inn River on the border between Tyrol and Switzerland plus several
orders for the Xayaburi and Luang Prabang large-scale power plants on the Mekong River in Laos.
The management agreement for the Manara pumped storage power plant to be built (156 MW) was
also signed in February 2021. VERBUND Hydro Power GmbH (VHP) will contribute its operating
expertise to this construction project.
In addition, several smaller orders were processed such as consultations for renovation activities in
Germany, an assessment of the condition of a power plant in Mexico and plant inspections for
customers in Austria, New Zealand and Iceland.
ANNUAL FINANCIAL REPORT - GROUP 77
New renewables
VERBUND aims to make a significant contribution to the Austrian and European climate and energy
strategy. Its goal is therefore to accelerate profitable growth in electricity generation from wind and solar
power. By 2030, the portfolio is expected to account for around 20–25% of VERBUND’s total generation
(around 3% as at 31 December 2021).
VERBUND aims to generate around 20–25% of the Group’s
total electricity generation from new renewables by 2030.
Business performance
KPIs – New renewables segment
Unit 2020 2021 Change
Total revenue €m 110.6 126.4 14.3%
EBITDA €m 58.9 53.3 – 9.5%
Result from interests accounted for
using the equity method €m 0.1 0.3 –
Capital employed €m 419.5 455.2 8.5%
The New renewables segment was expanded in the 2021 reporting period to include VERBUND
Green Power Photovoltaik GmbH in Germany as well as the photovoltaic farms in Spain acquired in
quarter 4/2021 that are currently under construction.
The increase in total revenue resulted primarily from higher average prices achieved in spite of lower
generation volumes at the wind farms. In addition to higher expenses for electricity purchases
attributable to a sharp increase in procurement prices, the decrease in EBITDA is due above all to
negative earnings contributions from the companies included in the basis of consolidation in 2021 for
the first time. The new renewables coefficient was 0.91 (Q1–4/2020: 1.00).
The change in capital employed mainly resulted from the rise in property, plant and equipment and
higher current receivables, which were offset by higher current liabilities.
78
Energy supply
Energy generation overview
Electricity generation
Number
1
Maximum
electrical capacity
in MW/MWp
1
2019
Generation in
GWh
2020
Generation in
GWh
2021
Generation in
GWh
Wind power 153
2
418 929 924 839
Solar power
4
5
3
3 – 1 2
Total 422 929 925 841
1
as at 31 December 2021 //
2
refers to the number of wind farms //
3
refers to the number of solar farms //
4
excl. leased/contracted installations
VERBUND generated 841 GWh of electricity from the renewable energy sources of wind and solar
power in financial year 2021, down on the previous year’s level of 925 GWh. The decrease in generation
(–84 GWh) is attributable to a lower wind supply and to bearing damage on a turbine at the Ellern wind
farm (Germany). Photovoltaic installations generated around 2 GWh in 2021.
The electrical capacity of VERBUND’s wind power installations as at 31 December 2021 was 418 MW,
while the capacity of its photovoltaic installations was 3.4 MWp (excluding installations for industrial
customers).
Capacity changes 2020–2023
1
MW/MWp
2020 2021 2022 2023
Wind power 418 418 418 418
Solar power 2 3 155
2
155
Total 420 421 573 573
1
as at 31 December of each year, excluding B2B PV projects //
2
2022 expansion includes the acquisition of open-field solar installations in Spain in the amount of 148 MW.
Capacity changes in VERBUND’s wind and solar power projects are shown based on the current
investment plan for the next year and include all existing installations that had been put into operation
by 31 December 2021.
Solar and wind power
With wind power plants and photovoltaic installations in Austria, Germany and Romania, VERBUND
has 421 MW of installed capacity at its disposal. The average technical availability of the wind power
plants in 2021 was 96.9%, while that of the photovoltaic installations was 100.0%.
In the field of operations management, the annual safety day was held for operational personnel in
compliance with strict COVID-19 protocols. In addition to safety instructions by safety officers, the plant
supervisors received practical fire safety training on site.
Alongside the current construction projects (see below), in terms of project development and asset
acquisition intensive work continued on the implementation of the wind power and solar power project
pipeline in and outside Austria.
In Austria, VERBUND analysed projects at different stages of development as well as possible
collaborations with project development partners in the financial year now ended, some of which it
completed. Further open fields of around 59 hectares were acquired for photovoltaic installations.
GRI EU1
GRI EU2
SDG 7
GRI EU10
GRI EU1
SDG 7
GRI EU30
GRI EU1
SDG 7
ANNUAL FINANCIAL REPORT - GROUP 79
Another project partnership to develop large-scale open-field solar installations in Brandenburg was
agreed with JLW/Visiolar at the end of 2020. The appendix to the agreement pertaining to the spaces of
up to approximately 1,400 hectares to be developed was signed in April 2021. In recent months, the
internal project structure has been established and development of individual projects from the
portfolio has been advanced. The first project is to go into operation in 2024, subject to regulatory
approvals.
Several projects were also assessed in Spain in the financial year now ended. First, VERBUND looked
into purchasing plants under construction with a capacity of around 148 MWp. A purchase agreement
for these was signed at the end of November 2021. Commissioning of the plants is scheduled for the first
half of 2022.
Another project was a cooperation agreement for the development of open-field solar installations
with a potential capacity of up to 100 MWp. As of the date of this report, the negotiations were still
ongoing.
Selected investment projects
Mitterkirchen saw the commissioning of a 1.7 MWp open-field solar installation in mid-
September 2021. This project is a single-axis tracking photovoltaic demonstration system in the
megawatt range for optimised use of space on land owned by VERBUND Hydro Power GmbH (VHP).
Besides optimising the use of space, the project also focuses on cost effectiveness, the impact of
mechanical moving components on maintenance work and future uses of solar applications in the
agricultural sector. Final acceptance of the installation is scheduled for January 2022 at the latest.
By order of VERBUND Energy4Business GmbH (VEB), VERBUND Green Power GmbH (VGP) was
once again tasked in 2021 with the construction as well as the maintenance and monitoring of open-
field and rooftop solar installations at industrial customers in Austria.
Research and special projects
Smart Operation of Wind Turbines under Icing Conditions (SOWINDIC)
The SOWINDIC research project targets a significant reduction in unplanned production losses under
icing conditions as well as balancing energy volumes through research into a completely new,
innovative method of rotor blade heating of wind turbines.
Database information system (DBIS)
The DBIS project entails developing a scalable IT platform solution for automated monitoring of all of
the wind farms and photovoltaic installations that VERBUND operates. The objective is to maximise
process automation of the data flow including innovative data processing of the individual assets up to
validated final reports and maintenance work carried out. This will help to foster efficient operation and
effective maintenance. At the end of 2021, the project was in the implementation phase. Operation is
slated to commence in May 2022.
GRI EU10
80
Environmental measures
At the Bruck-Göttlesbrunn wind farm, an expert conducts ornithological monitoring annually in order
to examine the effects on the habitat and the breeding behaviour of various bird species. The most
recent monitoring did not reveal any abnormalities. Noise emission and noise pollution readings at the
wind power plants after commissioning ensured that the surrounding area is not adversely impacted to
a significant degree.
Introduction of an environmental management system certified to ISO 14001 and environmental
certification of the operation of the Austrian wind farms additionally ensure that the most stringent
environmental standards are maintained over the entire life cycle of the wind power plants.
Since 2020, the photovoltaic installations that came on stream in Austria have been included in the
scope of the environmental management system and certified.
Stakeholder management
VERBUND places strong emphasis on engaging with the local population in the development and
operation of wind farms and photovoltaic installations. At the Bruck/Leitha wind farm, guided tours of a
wind turbine with an observation platform are offered. This gives interested individuals a unique
opportunity to gain an alternate perspective on wind power. In addition, VERBUND is currently working
on financial citizen participation models for Austria and Germany based on a model that has already
been developed for wind power.
SDG 15
GRI 304-1
Additional information
on ecological measures
can be found in the
Environmental
performance section
GRI
413-1
ANNUAL FINANCIAL REPORT - GROUP 81
Sales
The Sales segment combines all of VERBUND’s trading and sales activities. Through its trading in
electricity, gas, guarantees of origin, emission allowances and transport capacity as well as in innovative
green electricity and flexibility products, VERBUND has taken a strong presence in the most important
Over-the-Counter (OTC) markets and in the exchange markets in Europe. This also gives VERBUND a
decisive competitive advantage in regard to optimally marketing its products. The expertise VERBUND
has acquired strengthens its position in the electricity market and enables the Group to respond
promptly to changes in the market. This makes VERBUND a leading provider of flexibility and green
electricity products as well as comprehensive services for the energy markets in Austria as well as in
Germany.
The focus of VERBUND’s electricity trading is on the following areas: optimising utilisation of its own
power plants; achieving the best possible results from marketing the Group’s own generation;
optimising electricity purchasing; and securing sales. VERBUND furnishes its customers with energy
market expertise in the form of new products and services. Thus VERBUND assists customers with
marketing their facilities for renewable energy and offers them – for example – flexibility products to
reduce their risk exposure arising from balancing energy. In addition, VERBUND allows its customers to
participate directly in the balancing services and intraday markets. Products and services relating to
solar power, electromobility, batteries and hydrogen expand the offerings, and VERBUND customers
are supported in actively participating in the energy transition.
The core markets of VERBUND’s sales activities are Austria and Germany. In Austria, VERBUND
supplies the household/agriculture and commercial segments with electricity generated almost entirely
from hydropower. In both Austria and in Germany, VERBUND also delivers to industrial enterprises and
resellers.
Business performance
KPIs – Sales segment
Unit 2020 2021 Change
Total revenue €m 2,738.5 3,865.5 41.2%
EBITDA €m 75.5 59.6 – 21.1%
Result from interests accounted for
using the equity method €m – 0.2 – 2.0 –
Capital employed €m 168.2 1,609.0 –
The rise in total revenue is mainly attributable to significantly higher prices in the electricity market
and is offset by correspondingly higher expenses for the purchase of electricity. The reduction in
EBITDA is due, among other things, to a lower result from the measurement of derivatives for the
electricity and gas sector and to higher prices for purchasing gas for consumers, while primarily the
earnings contributions of flexibility products increased.
The rise in capital employed is mostly attributable to higher deferred tax assets, higher trade
receivables and guarantees in electricity trading.
TCFD
82
Electricity trading and sales
An established partner in the European energy market
Changes and trends in the European electricity markets and conditions are increasing the complexity of
marketing the power plant portfolio because of rising demands for flexibility, greater decentralisation
and more stringent requirements for efficient management and the long-term marketing of generation
facilities. At the same time, the demands of trading partners and customers are also rising in the areas of
asset marketing, flexibility management, supply of electrical energy and green electricity marketing.
Here VERBUND serves as an asset optimiser, offering a comprehensive range of customised products
and services in the energy market. The range extends from plant use optimisation and market access to
flexible marketing and hedging offers, as well as forecasting and regulatory services.
VERBUND’s customers primarily include European wholesale partners, other energy trading
companies, resellers and municipal utilities, as well as major consumers. The customer portfolio of
VERBUND Energy4Business GmbH (VEB) also comprises grid and power plant operators and
producers of electricity from renewable sources, particularly in the areas of wind, solar power and
small-scale hydropower.
Optimal marketing of VERBUND’s own generation
In view of the momentum in the energy markets and volatility in electricity prices, VEB is optimising its
marketing activities so as to secure and market the Group’s own generation as effectively as possible.
Marketing activities primarily focus on the characteristics of the Group’s power plants. They also take
account of seasonal fluctuations in the water supply and follow dynamic hedging concepts that respond
to market price fluctuations, with the aim of ensuring stable results.
VEB ensures market-driven management and optimisation of the use of all VERBUND power plants.
The precise inflow and weather forecasts required for this are prepared using models, some of which
were developed within the Group. Optimisation calculations using the appropriate electricity pricing
models round off the system landscape to enable the best possible marketing of assets.
All trading activities take place within the framework of a comprehensive, strict set of rules and
regulations concerning risk that are regularly updated.
VERBUND uses its expertise for marketing renewables
VERBUND is pursuing an ambitious growth strategy in its wind and solar power activities. The
marketing of new renewable energy sources on behalf of third-party plants is designed to support this
growth. These activities focus in particular on wind power, small-scale hydropower and solar power.
VERBUND’s market share in Austria has grown and its market share in Germany has been maintained
in recent years in spite of strong price pressure and intense competition. In Luxembourg, VERBUND is
still the market leader in marketing electricity from wind power.
ANNUAL FINANCIAL REPORT - GROUP 83
Marketing of green electricity – an important component of the product portfolio
VERBUND’s product portfolio includes trading in emission allowances and guarantees of origin (green
electricity). In Austria and Germany, VERBUND is one of the leading providers of certified renewable
generation (hydropower from Austria and Germany) and supplies more than 160 municipal utilities and
resellers in these markets with its premium product – H2Ö electricity.
Dynamic markets call for flexibility products
VERBUND is one of the leading providers of production flexibility with its storage and pumped storage
power plants. The highly flexible power plants allow the near-term capacity adjustments to be made
that the market requires as the share of volatile new renewable energy sources grows. In addition,
system services such as primary, secondary and tertiary control are provided when needed by Austrian
Power Grid (APG), the control area manager, to ensure short-term balancing between generation and
consumption. VERBUND also supplies power plant output for grid services such as provision of reactive
power, fault management and black-start capability.
Along with the Mellach combined cycle gas turbine power plant (Mellach CCGT), the pumped
storage power plants are also used for congestion management. To this end, APG demands congruent
modes of operation from the different power plant operators to allow unfavourable load flows in the
European high voltage grid to be prevented or balanced out.
Independent of marketing generation, VERBUND also offers customers a “virtual power plant”
product to enable them to combine the flexibility of their smaller generation facilities and market it at
short notice or hedge portfolios against fluctuations in electricity prices.
Innovative services and products
VERBUND provides customers with various products and services for marketing and purchasing
electrical energy. These include stock market access to the intraday, spot and futures markets,
forecasting services, management of balancing groups, integrated portfolio management and regulatory
services.
For a number of years, VERBUND has offered a central B2B customer platform called VISION for
web-based communication with the Group’s large customers in the areas of customer service and
energy-related solutions. Additional features and improvements are continually being implemented.
VERBUND’s activities focus on continuing to systematically develop the digitalisation and
automation strategy for electricity trading. Here, emphasis is placed on needs-based customer solutions
(e.g. the VISION platform) and development of innovative systems and projects in fields such as new
storage systems (green hydrogen, batteries), e-mobility and innovative energy technologies.
Photovoltaic – the power of the sun and the bedrock for additional VERBUND growth
VEB works with industrial customers to develop and construct photovoltaic installations – either as
rooftop systems or as open-field solar installations – whose power customers can use directly for their
own purposes. Based on this concept, photovoltaic projects totalling around 25 MWp were completed
or nearly completed in 2021, a significant increase over the previous year. Significant expansion is
planned for subsequent years.
Activities in the solar power segment have been heavily impacted by the Renewable Energy
Development Act (Erneuerbaren-Ausbau-Gesetz, EAG) along with the related investment subsidies and
the sharp rise in prices for components due to higher raw material and freight costs.
84
Intelligent and flexible solutions for the energy market and VERBUND’s customers
The future of energy is becoming more decentralised, small scale and renewable. In other words, it is
becoming more flexible. This in turn calls for more intelligent and flexible solutions. Innovative,
customised flexibility products from VERBUND give suppliers, industrial and service companies and
producers of green electricity access to the energy market while also securing the power grid.
Industrial flexibility assets are marketed separately on the control power and intraday market through
VERBUND-power pool, which concentrates the largest portfolio of industrial loads and producers as
well as green electricity plants in Austria across all industries. VERBUND supports industrial companies
in generating added revenue while retaining full operational autonomy. This also serves to stabilise the
power grid while making a significant contribution to integrating renewable energy into the energy
system.
The reorganisation of the energy infrastructure requires new, intelligent and cross-sectoral solutions
with the highest standards of flexibility and availability. Battery storage units support conventional
energy storage (pumped storage and storage power plants). Under the EU-funded project SYNERG-E,
VEB put nine industrial-scale battery storage units into operation at ultra-fast charging stations in
Austria and Germany in 2021. The batteries are used to cap peak loads at fast EV charging stations and
to market control power. In autumn 2020, VEB acquired a battery storage project in Germany with a
capacity of 10 MW which was commissioned in 2021 and now provides grid support. Three additional
projects of this type with a total capacity of 52.5 MW were acquired in 2021, all of which will be
commissioned in 2022. One further battery project with an industrial customer will also be completed
in quarter 1/2022.
Electromobility picks up speed – expanding the range
In 2021, VEB further expanded its range of products and services for industrial customers and serves as
the marketing point of contact within the VERBUND Group for business and industrial customers.
SMATRICS supports this organisation by operating the charge controller system and is responsible for
implementation of construction projects and the technical operation of charging stations.
In addition to services related to electromobility, special focus is placed on integrating charging
infrastructures with photovoltaic installations, on storage systems and on other large-scale consumers
by means of intelligent energy management on site at the respective industrial customer. By bundling
products and services in this way, VEB offers a comprehensive product portfolio beyond the actual
electromobility service, which enables it to differentiate itself from the competition. Industrial
customers have a single point of contact for multiple topics, who is responsible for implementing
several products and services tailored to their site.
Business charging offers industrial customers a contracting model under which VEB assumes all of
the services required from structural inspections, through planning and construction, to monthly
invoicing.
Contracts covering this attractive range of products and services have already been entered into and
were implemented with several customers in 2021. Significant expansion of this operating segment is
planned in 2022.
ANNUAL FINANCIAL REPORT - GROUP 85
Electricity sales
100% hydropower with outstanding service for consumers
In the 2021 “Service Champions” study, VERBUND achieved “Gold” status in its household/agriculture
and commercial segments for the seventh time in a row. VERBUND managed to come out ahead of
46 other electricity providers and take first place. VERBUND also shone in the “Industry Monitor 2021”
study. More than 325,000 customer opinions were collected in the extensive online survey. In terms of
customer satisfaction, VERBUND ranked the highest of all electricity and gas providers and was named
the 2021 industry champion. VERBUND also won Austria’s “Energy Transition Award” in the
“Electricity” category. This award is in recognition of the commitment of the DACH region’s energy
providers to the energy transition.
VERBUND also felt the effects of the ongoing COVID-19 crisis and volatile activities in the energy
market in its efforts to acquire new customers. Cuts were evident in direct sales in particular. At the end
of the year, around 447,000 customers in the household/agriculture and commercial segments were
receiving VERBUND electricity generated from 100% Austrian hydropower. Market share in the
household segment amounted to around 8% in 2021. Climate-neutral natural gas from VERBUND was
supplied to approximately 80,000 customers in the household/agriculture and commercial segments
in 2021.
Guarantees of origin for electricity from VERBUND power plants
VERBUND is a pioneer when it comes to guarantees of origin for electricity. In 1999, VERBUND became
the first Austrian utility to have all of the hydroelectricity it generates certified by the TÜV SÜD
inspection authority. VERBUND thus played a key role in developing the guarantee of origin scheme for
electricity in Austria. As a neutral institution, TÜV SÜD uses its seal of approval to certify that VERBUND
hydropower plants generate green electricity and feed it into the grid in appropriate quantities and in
the quality required by consumers (industrial, household/agricultural customers and commercial
customers), resellers (municipal utilities and energy providers) and traders.
The transition in the energy sector calls for
innovative solutions for tomorrow, today.
In 2020, VERBUND’s entire electricity generation from hydropower certified by TÜV SÜD amounted
to
21,919 GWh in Austria and 4,028 GWh in Germany. The figures for 2021 are not yet available because
TÜV SÜD does not publish its calculations until the second quarter of the year following the reporting
period. The net calculations from TÜV SÜD essentially correspond to gross generation from
hydropower, less own use, easement agreement and power for pumping.
With the electricity generated at Austrian and German power plants certified by TÜV SÜD, VERBUND
is one of the region’s largest suppliers of green electricity.
GRI EU3
GRI 417-1
500
519
527
19 20 21
End customers k
Household/agriculture and commercial
21
86
Electricity labelling in Austria
In Austria, the electricity label is displayed on the consumer’s electricity bill. In 2020, 99.98% of the
electricity VERBUND supplied in its household/agriculture and commercial segments came from
hydropower. VERBUND also supplied electricity generated from photovoltaic installations owned by
other VERBUND customers to its customers in these segments in 2020. Rounded off, this share accounts
for 0.02% and was reported separately in the electricity label.
A total of 73.32% of the electricity VERBUND supplied in its business and industrial segments in 2020
came from renewable energy sources. Of the guarantees of origin issued, 53.06% related to electricity
from hydropower, 9.35% to electricity from wind power, 5.75% to electricity from solid or liquid biomass,
1.71% to electricity from solar energy, 3.41% to electricity from biogas and 0.04% to other renewable
energy sources. The remaining 26.68% related to natural gas.
The Austrian Electricity Industry and Organisation Act of 2010 (Elektrizitätswirtschafts- und
organisationsgesetz, ElWOG 2010) and the Electricity Labelling Regulation (Stromkennzeichnungs-
verordnung, SKV) form the legal basis for electricity labelling in Austria. The Austrian electricity
labelling model is an evidence-based system. All electricity volumes delivered to consumers in a
calendar year must be assigned guarantees of origin (ban on “grey” electricity).
Electricity labelling in Germany
VERBUND supplies industrial customers in Germany through VERBUND Energy4Business (VEB) from
Austria as well as directly through VERBUND Energy4Business Germany (VEB-DE).
In Germany, the following laws comprise the legal framework governing electricity labelling:
Section 42 of the Energy Industry Act (Energiewirtschaftsgesetz, EnWG) for electricity delivered and
Section 78 of the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG) for the
mandatory disclosure of electricity subsidised in accordance with the EEG.
In regard to the electricity mix described below, it should be noted that demand for certified
electricity is low among industrial customers in Germany. Therefore, the electricity supplied to those
customers reflects the overall German generation mix, which includes electricity from coal-fired and
nuclear power plants in addition to electricity from wind and solar power.
VERBUND Energy4Business GmbH (VEB)
The origin of the electricity volumes supplied by Energy4Business GmbH to business and industrial
customers in Germany in 2020 breaks down as follows: 0% renewable energy (financed through the EEG
levy), 22.7% electricity from renewable energy with guarantees of origin, not financed through the EEG
levy, 3.5% other fossil fuels, 18.4% natural gas, 36.6% coal and 18.8% nuclear energy.
VERBUND Energy4Business GmbH Germany (VEB-DE)
The origin of the electricity volumes supplied by VERBUND Energy4Business GmbH Germany
(VEB-DE) to business and industrial customers in Germany in 2020 breaks down as follows: 0%
renewable energy (financed through the EEG levy), 25.5% electricity from renewable energy with
guarantees of origin, not financed through the EEG levy), 2% other fossil fuels, 18% natural gas, 36% coal
and 18.5% nuclear energy.
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SDG
12
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SDG 12
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417-1
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12
ANNUAL FINANCIAL REPORT - GROUP 87
Climate-neutral natural gas
As a full-service energy provider, VERBUND has offered climate-neutral natural gas since 2014. In the
case of climate-neutral natural gas products, the emissions resulting from the use of natural gas are
offset by the subsidisation and expansion of renewable projects. One example of this is the Ashta
hydropower plant in Albania. This has been officially confirmed by TÜV NORD, an independent
technical inspection authority in Germany.
A total of 1.4 TWh of natural gas was sold in the reporting period. Carbon offsets for these sales
amounted to 249 kt CO
2
e.
Attractive photovoltaic and electromobility range
Residential customers benefit from VERBUND expertise in photovoltaic installations for the home.
Around 800 new customers were acquired for rental photovoltaic services in 2021. VERBUND also
successfully launched its eCharging product in late 2021. Beginning in October 2021, VERBUND has
offered a complete charging package for charging at home and on the road conveniently from a single
source. In doing so, VERBUND has positioned itself as a full-service provider for all topics related to
energy and sustainability.
Customer satisfaction and customer relationships
Continued strong customer satisfaction and loyalty
In cooperation with a market research firm, VERBUND conducts an annual survey of residential and
commercial customers on the topic of customer experience management. The survey is designed to be
representative and covers numerous topics. It polls customers of VERBUND and customers of
competitors within the energy market.
Overall, consumers in Austria were satisfied with their current energy providers in 2021 – whether in
terms of their overall satisfaction or the aspects of recommendations, the likelihood that they would
choose the same provider again or their assessment of how trustworthy the companies were. Though
the differences were minor, VERBUND customers gave us a better rating as an energy provider than
other providers. We saw similar results for loyalty to VERBUND: our competitors had a loyalty index of
approximately 71. In the residential customer sector, VERBUND’s rating was just over 74 out of
100 points. The commercial customer sector showed similar results: our competitors were rated around
69, while VERBUND scored significantly higher at 73.
VERBUND also scored higher in customer relationships. Survey results of 2.2 showed that perceived
appreciation in the household and commercial customer segments were each at the upper end of the
scale. Good customer service, provision of information at regular intervals and free energy days were
among the reasons for the favourable opinions. VERBUND customers spoke particularly highly of the
loyalty bonus programme, prize draws and the customer referral programme.
Customer support
VERBUND’s identity as a leading energy provider in Austria includes providing a comprehensive range
of services. Competent and friendly customer advisors can be reached at VERBUND’s freephone
customer service number (+43(0) 800 210 210) from anywhere in Austria from Monday to Friday
between 7:00 a.m. and 8:00 p.m. to answer any questions existing customers might have and to support
potential customers in switching electricity and natural gas providers.
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1,083
1,211
1,412
19 20 21
Gas sold in GWh
21
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VERBUND’s online services do justice to the trend towards self-service, rounding off VERBUND’s
range of services. The VERBUND website at www.verbund.at provides an overview of the Group’s
product portfolio, details on facilitating the switch to VERBUND, offers for existing customers and
answers to frequently asked questions.
Energy consulting
Throughout all federal states of Austria, certified energy consultants are available free of charge to
support clients of Caritas in connection with the VERBUND Electricity Relief Fund. These consultants
provide valuable tips on saving energy to support needy people in sustainably lowering their energy
costs. The commitment in connection with the Caritas Electricity Relief Fund is just one of many
examples of how VERBUND fulfils its social responsibility. More on this topic can be found in the
section entitled Stakeholder engagement and social responsibility.
Late payment
When customers encounter difficulties in paying their bills, VERBUND assists them by offering payment by
instalments, calculated without adding default interest. Customers who are in payment arrears are given
notice via a three-step reminder system before the energy supply account is terminated due to late payment.
In 2021, the electricity or natural gas supply accounts of around 8,707 household and commercial
customers had to be terminated. This equates to a decrease of 5% in account terminations compared
with 2020 (9,200).
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ANNUAL FINANCIAL REPORT - GROUP 89
Grid
The Grid segment comprises the activities of Austrian Power Grid AG (APG) and Gas Connect
Austria GmbH (GCA).
Austrian Power Grid (APG), VERBUND’s independent grid subsidiary, operates Austria’s national
electrical grid. APG’s infrastructure ensures a reliable supply of electricity, making it one of the lifelines
of Austria, its residents and businesses. The APG grid encompasses a route length of around 3,400 km
and is operated, maintained and continually adjusted to the growing needs of the economy and society
by a team of around 700 specialists. The capacity of the APG grid is pivotal to the success of the energy
transition and to the electrification of society, the economy and the industrial sector, and is the basis for
a sustainable safe supply of electricity in Austria. APG thus also bears responsibility for transforming the
overall system of the energy market. With an investment volume of €374m for expanding and upgrading
the grid infrastructure in 2021, APG is providing a powerful stimulus to the domestic economy.
The main projects include the Salzburg, Weinviertel and Germany lines and the Upper Austria (Central
region) Electric Transmission Infrastructure project.
Gas Connect Austria (GCA) is an Austrian operator of gas transmission and distribution pipelines
and, as such, plays a key role in the Austrian and Central European energy supply. Effective
31 May 2021, VERBUND holds a 51% stake in independent grid operator Gas Connect Austria. Starting
from the Baumgarten hub, GCA operates a state-of-the-art, powerful high-pressure network with
connections to Germany, Slovakia, Slovenia and Hungary, as well as domestic storage and production
facilities. There are five compressor stations, 56 metering and transfer stations and over 100 transfer
measuring points along the approximately 900 km-long pipeline system. The core task is the marketing
of transport capacity for domestic supply and at the international border points. Along with Trans
Austria Gasleitung (TAG) GmbH, GCA operates the import and distribution station at Baumgarten an
der March, through which around 40 billion m
3
of gas flow annually.
Business performance
KPIs – Grid segment
Unit 2020 2021 Change
Total revenue €m 730.4 1,246.9 70.7%
EBITDA €m 232.4 331.3 42.6%
Result from interests accounted for
using the equity method €m 0.1 0.2 –
Capital employed €m 1,651.6 2,647.8 60.3%
Starting from 31 May 2021, the Grid segment also comprises Gas Connect Austria GmbH and Austrian
Gas Grid Management AG.
Total revenue increased – besides the companies included for the first time – due in particular to an
increase in revenue from balancing services, higher national grid usage fees and higher revenue from
the auctioning off of cross-border capacity. The rise in EBITDA is primarily attributable to the earnings
contributions from Gas Connect Austria GmbH and Austrian Gas Grid Management AG.
The increase in capital employed mainly resulted from the rise in property, plant and equipment and
the result from interests accounted for using the equity method in connection with the first-time
90
consolidation of Gas Connect Austria GmbH, as well as from the rise in property, plant and equipment
through the net investment by APG, offset by higher non-interest-bearing debt.
AUSTRIAN POWER GRID AG (APG)
Technical developments
APG power grid data
Voltage level Power lines
Route length/km
Power lines
System length/km
Substations/grid
switching stations
Overhead power lines
380-kV 1,156 2,584
220-kV 1,613 3,206
110-kV 654 1,167
Cable
110-kV 6 11
Total 3,428 6,966 65
Operational developments
As the control area manager in Austria, APG is responsible for identifying bottlenecks in the
transmission network and taking appropriate countermeasures. These necessitated grid measures and
redispatching at the power plants in the past financial year 2021.
The dynamic developments in the energy market in Europe – especially in connection with the
expansion of wind and solar power generation – are giving rise to volatile load flows. Since the required
grid expansion is not keeping pace with these developments due to protracted administrative processes,
congestion is occurring both within and outside of the APG grid. The above-mentioned intervention in
the power plant portfolio (redispatching) is necessary to prevent congestion in the existing grid
infrastructure.
As a result of the decrease in long-range electricity transmission and the very good water supply in the
months critical to grid performance, relatively little redispatching was required in the APG grid in 2021.
In 2021, power plants in Austria were widely used for managing grid congestion outside of Austria
(mainly in Germany). A large share of the redispatch quantities were attributable to these measures in
the past year (see Redispatch quantities table below).
Redispatch quantities
2019 2020 2021
Redispatch quantities (in GWh)
1
2,417.4 1,455.2 1,800.0
1
only volumes from increased production
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ANNUAL FINANCIAL REPORT - GROUP 91
Contractual safeguarding of systemically important power plants – maintaining reserve
capacity to prevent congestion
System security in APG’s power grid depends to a large extent on the availability of flexible power plants
and reducible consumers in Austria. However, due to the difficult market situation this availability is
inadequate and must be contractually safeguarded to ensure that it can be used for necessary
redispatch activation. To safeguard the necessary redispatch capacity, the availability of the required
power plants has been contractually safeguarded by APG in close consultation with E-Control. In this
regard, the new statutory regulations in accordance with Sections 23(a) ff. of the Austrian Electricity
Industry and Organisation Act (ElWOG) (as amended in the Federal Legal Gazette I [BGBl] No. 17/2021)
have applied since October 2021. As of mid-September 2021, grid reserve requirements of up to
3,235 MW have been contractually secured for the period from October 2021 to the end of
September 2022. The contracted reserve capacity was regularly used for redispatching in 2021.
Impact of the COVID-19 pandemic on APG and grid operation
A new phase of managing the COVID-19 challenges began upon completion of the company
vaccination campaign on 8 July 2021. The guidelines on APG safeguards as an integral part of a new
works agreement were updated to reflect current conditions, though the measures currently in effect are
still aligned with the Austrian federal government’s traffic light system for the federal states. APG’s crisis
management was wound up on 9 July 2021. A COVID-19 taskforce will now track the appropriateness of
further internal precautions. The established structure of contact tracing will be kept in place for
monitoring of positive, precautionary and suspected cases. Contact to people who test positive or
people from risk areas will be traced back as far as possible using transmission chains. In the event of
suspected contact, employees will be promptly informed and will work exclusively from home.
Interruptions to supply
One interruption to supply occurred in the APG grid in 2021, affecting consumers for around ten
minutes. The effects on consumers of a component failure in APG’s transmission network are
quantified using the “megawatt hours (MWh) not supplied” indicator. Counting of the supply
interruption duration starts from the time supply to consumers is interrupted if this can be clearly
attributed to a preceding fault in the transmission network.
In 2021, APG transmitted around 45,349 GWh at grid level 1 (380-kV and 220-kV). A total of 1.9 MWh,
i.e. 0.000004% of the volume transmitted, was not supplied. There was one such interruption affecting
consumers in 2020, two in 2019 and one in 2018.
Electricity transmission and grid loss
In financial year 2021, the transmission volume at grid level 1 (380-kV and 220-kV grid) increased by
1.1% over the previous year. Domestic delivery came to 32,453 GWh. Based on the reported
transmission schedules of the Austrian and international market participants, the APG control area
imported 29,292.5 GWh and exported 19,725.5 GWh in 2021. This results in an import surplus of
9,567.04 GWh.
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For further information
on the transmission
network, visit
www.apg.at
92
Electricity transmission and transmission losses
Unit 2019 2020 2021
Electricity transmitted
1
GWh 46,731 44,863 45,349
Grid loss
1
GWh 758 731 674
Grid loss as a percentage of
electricity transmitted % 1.62 1.63 1.49
1
grid level 1
Projects and stakeholder management
As the transmission system operator, APG is required by law to maintain and expand the power grid
infrastructure in a forward-looking manner in line with the requirements of security of supply and the
electricity market.
Since 2011, APG has been legally required to prepare a Network Development Plan. This plan
provides information on which important transmission infrastructures will have to be built or expanded
in the next ten years (in accordance with Section 37 of the Austrian Electricity Industry and
Organisation Act (ElWOG) of 2010).
The 2021 APG Network Development Plan (NDP 2021) provides for structured expansion of Austria’s
grid. In particular, the projects and measures included in the plan focus on managing trends in the
energy market (primarily the integration of renewables and new power plants into the grid, grid
connections for distribution system operators, the Renewable Energy Development Act (EAG) and
climate change targets, market integration, etc.). In addition to 20 new (green field) substations, the
plan calls for additional expansions to existing switching stations, general overhauls of 220-kV lines and
further expansion of the 380-kV grid (e.g. completion of the 380-kV ring). These projects will ensure
high-performance integration of renewable energy generation in eastern Austria and strengthen
western Austria’s link to the pumped storage power plants along with a strong connection to the load
centres in Austria and to the neighbouring countries.
Four APG line projects have been classified by the European Commission as TEN (Trans-European
Networks for Energy) projects and within the scope of the European Energy Infrastructure Regulation as
projects of common interest (PCIs), which makes them priority projects. In addition, the line projects in
the NDP 2021 have been coordinated on a pan-European basis as part of the Ten-Year Network
Development Plan (TYNDP) of the European Network of Transmission System Operators for Electricity
(ENTSO-E).
APG’s 2021 Network Development Plan provides for gross investments of around €3.5bn by 2031.
These investments will serve to develop the grid infrastructure capable of providing secure electricity
transmission in Austria going forward. In 2021, APG invested a total of €374.1m (gross) in intangible
assets and property, plant and equipment (2020: €379.7m).
The largest investments in 2021 were as follows:
Investments in grid expansion
€m
380-kV Salzburg line St. Peter–Tauern grid hub 169.4
Weinviertel grid area 59.5
Reschen Pass project 17.1
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ANNUAL FINANCIAL REPORT - GROUP 93
Maintenance CAPEX
€m
Conductor replacement on the 220-kV line from Tauern to Weißenbach 15.3
New construction of substation replacements 23.2
Modernisation of secondary technology (control system/protection/counting) 7.5
APG’s top-priority line construction projects currently under construction include the Salzburg line,
the Weinviertel line, the Germany line and the Reschen Pass project. The environmental impact
assessment (EIA) process was initiated for the Upper Austria (Central region) Electric Transmission
Infrastructure project in late November 2021.
Support within the project environment
Direct communication with target groups is a key pillar of APG’s overall communication strategy. By
utilising 360-degree communication tools, ranging from stakeholder newsletters through specific
project websites to our social media presence, we are absolutely customer-centric in all areas of
communication. Topics at the forefront here are the secure supply of electricity, achievement of climate
and energy targets, integration of new players into the energy system, the macroeconomic effects of
APG’s investment programme, specific fields of innovation and, of course, our specific investment
projects. APG addresses in detail the multifaceted expectations, opinions and needs of the involved
stakeholders. This involves applying the most up-to-date tools used for qualitative and quantitative
social research. In 2021, the communications support within the project environment was subject to the
limited options under COVID-19. Personal dialogue – including via video conference – with the
project’s stakeholders within the region (municipal representatives, landowners, opinion leaders,
representatives of public initiatives and other stakeholders) formed the central pillar for creating
acceptance for the respective project. Acceptance among the regional population and among the
parties involved on a legal basis is an essential foundation for timely approval and for subsequently
carrying out the project implementation and is therefore crucial for secure electricity supply and
achieving climate and energy targets. We were able to foster a constructive and cooperative climate by
communicating proactively, quickly, and transparently in a manner tailored to the specific target groups
and by treating the various different local stakeholder groups respectfully. The positive effects of this
method were particularly apparent in the long-disputed Salzburg line project. The foundation for this
was laid in a separate 2021 project communication strategy, which is based on the principles of the APG
strategy. This will also form the basis for the project communication in the years to come.
Salzburg line
Commissioning of the 114 km-long 380-kV Salzburg line between the Salzburg and Tauern substations
represents a significant step in the highly efficient connection of load centres and metropolitan areas to
the major (pumped storage) power plant sites in Austria. The Salzburg line makes it possible for plants
in eastern Austria feeding in renewable energy (wind and solar power in particular) to interact with the
pumped storage power plants and thus to store surplus renewable energy generation and provide
balancing services in the event of deviations in the forecast. Meeting the climate targets and other
targets of the Austrian federal government in the electricity sector would not be possible without the
Salzburg line.
94
The project has been in the implementation phase since October 2019 and construction is
progressing on schedule. The Austrian Supreme Administrative Court granted final approval of the
project in October 2020. Commissioning of the Salzburg line is planned for quarter 2/2025. Due to
massive delays in the approval process and in order to offset the negative effects resulting from the delay
in commissioning, APG was compelled to introduce added emergency measures aimed at improving
grid security and reducing congestion management.
In addition to the measures previously introduced, the conductors were therefore replaced on the
220-kV line from Tauern to Weissenbach in 2021 since the delays in the Salzburg line have also pushed
back the planned general overhaul of this now 70-year-old line.
Germany line
The 380-kV Germany line between St. Peter and the Austrian national border represents the
construction of a high-performance interconnector on an optimised route. Dismantling the two existing
220-kV lines will alleviate the burden on local residential areas for the long term. The project will
facilitate enhanced interaction of renewable energy in north-western Europe and Germany with the
Austrian load centres and pumped storage power plants. The Germany line will therefore make a major
contribution to the European energy transition.
APG has already started construction of the nearly 3 km-long 380-kV line to the national border.
However, commissioning is not planned until 2026–2027 due to delays in the approval process on the
German side.
Weinviertel line
The integration of renewable energy – primarily wind power – in the Weinviertel region necessitates
replacement of the 220-kV line originally built in the 1950s. The new Weinviertel line is a key project for
expanding wind power in eastern Lower Austria. APG has thus been constructing a new, highly efficient
380-kV line since 2019 on an optimised route from the Seyring junction to the new Zaya substation and
a 220-kV connection to the Austrian national border. Construction measures on the line and on the
substation are progressing as scheduled and commissioning of the new Weinviertel line will take place
in summer 2022. The old 220-kV line, which was in need of renovation, will subsequently be
dismantled. This will ease the burden on residential areas as well as on important nature reserves and
bird sanctuaries in the long term and allow them to be used in another way.
Electricity supply in central Upper Austria
Central Upper Austria is currently supplied with electricity via a 110-kV line. However, this supply will
be insufficient to meet the future requirements of the region and the Linz metropolitan area. Electricity
consumption in central Upper Austria will grow in the years to come due to the dynamic trends in the
area. These include, in particular, the growth of the economic area, the progressing electrification and
process conversions in the industrial sector related to decarbonisation (especially
in regard to
electricity-based steel manufacturing) and a growing number of consumers. Furthermore, Austria’s
commitment to expanding renewable electricity with the Renewable Energy Development Act (EAG)
and the required transport of green electricity necessitate expansion of the region’s electricity
infrastructure.
Construction of a 220-kV supply ring is planned to replace the 110-kV grid supply. Going forward, this
220-kV ring will link the Ernsthofen, Pichling, Hütte Süd, Wegscheid and Kronstorf APG substations.
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ANNUAL FINANCIAL REPORT - GROUP 95
The grid operators’ design includes new construction of replacements for existing lines, conversion of
substations from 110 kV to 220 kV on line sections already designed accordingly, along with expansion
and renovation projects in a total of eight substations. Switching to the 220-kV voltage level will make it
possible to transmit more electric power and energy, creating a secure, efficient and powerful electricity
supply for central Upper Austria.
The project was submitted for the environmental impact assessment (EIA) in late November 2021.
Project implementation – after approval has been granted – should take place from 2024 until
2030–2031. Gradual commissioning of individual construction phases is scheduled to begin in 2026
(e.g. the 220-/110-kV Hütte Süd substation).
Reschen Pass project
Built in 1953, APG’s connecting line currently in place between Austria (Lienz) and Italy (Soverzene) is
now far from being able to handle the requirements of today’s European electricity market. Increasing
hydropower generation in Austria’s western Alpine region (with mainly pumped storage power plants),
the further expansion of wind power and the developments in the energy market in Italy (including
massive expansion of renewable energy projects) require higher capacities between Austria and Italy.
Establishing a new 220-kV connection from Nauders/Reschen Pass to Premadio (i.e. to the Lombardy
region) will create another connection between the APG and TERNA transmission networks with greater
capacity. Construction is on schedule and the project is slated to come on stream in late autumn 2023.
Other projects and maintenance CAPEX
APG has also earmarked extensive maintenance CAPEX for the modernisation and reinforcement of
substations and lines at the 220- and 110-kV grid level (see also APG’s Network Development
Plan 2021). Considerations on the reinforcement and expansion of existing switching stations lead to
extensive maintenance measures, particularly for old systems, or, in the case of technical and economic
improvements, often to new construction of replacement switching stations. Extensive maintenance
measures and, above
all, general overhauls of old 220-kV lines are required as well. Maintenance CAPEX
and grid modernisation projects for existing switching stations and lines – in addition to the grid
expansion investments called for under the grid development projects – will also require allocation of
significant resources in the years to come.
Sustainable habitat management
For line projects, APG also underscores environmental protection and sustainability in addition to
focusing on the technical and economic criteria. This involves taking into consideration the varied
expectations and requirements of the authorities, the landowners, the community, different
stakeholders (e.g. agriculture and forestry, tourism, environmental protection) and the technical
requirements.
Back in 1997, APG initiated a research project for ecological and economical route maintenance. In
this project, four model routes were analysed by different disciplines to determine their environmental
and socio-economic value as well as their ecological integration into the landscape. With the
“sustainable habitat management” project the content of this work was developed further, expanded to
APG’s entire transmission network and integrated into operational route management. Consequently,
APG already has more than 20 years of experience in sustainable route and habitat management for
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Additional information
on conservation is
available at www.apg.at
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Please refer to the DMA
for details on sustainable
route management
96
overhead lines and makes a significant contribution to the use of line routes as habitats for species of
plants and animals.
Savings from wind marketing
To reduce imbalances in the green balancing group and in the entire APG control area, APG has been
marketing volumes arising from deviations in the forecast of green electricity generation on the
European intraday market on behalf of Abwicklungsstelle für Ökostrom AG (OeMAG) since 2015. As a
result, the OeMAG balancing group saved around €11.9m in balancing energy in 2021. In addition,
marketing electricity from wind power generated further indirect savings of €7.4m in 2021 due to lower
activation of balancing services by APG. Marketing electricity from wind power generated total savings
of around €19.3m in the financial year now ended, proving the added value of efficient, market-based
solutions.
Vertical market integration
APG takes innovative measures to implement simplified, transparent and non-discriminatory inclusion
of small-scale, decentralised generation and consumption facilities for APG’s products (balancing
services, congestion management, grid reserve). Extensive coordination is ongoing in this regard with
distribution system operators, market participants and selected partners within the industrial sector.
A prototype for participating in the balancing services market is set to be put into operation in
spring 2022.
Developments in the international markets
In terms of opening up the balancing services markets internationally, the cooperations APG initiated in
the past are still considered to be models within Europe. International cooperations with other
transmission system operators (TSOs) give Austrian balancing services providers access to a larger
market, even without the need for further prequalification, since their balancing services can also be
accepted abroad. At the same time, this bolsters liquidity in the balancing services market, leading to
cost savings with respect to the overall system. Meanwhile, several other European TSOs want to join
these cooperations (particularly the automatic frequency restoration reserves cooperation between
APG and the German TSOs) because of these positive effects.
In regard to the wholesale markets, the link to the day-ahead market at the borders with Hungary and
the Czech Republic was implemented in 2021. Continuous intraday trading was also expanded to the
border with Italy. Thus, by implication, cross-border capacities can be efficiently tendered on the
electricity markets at all APG borders – with the exception of Switzerland. Linking these electricity
markets has further improved the trade opportunities for Austrian market participants and ensured
maximum liquidity for the Austrian marketplace.
ANNUAL FINANCIAL REPORT - GROUP 97
GAS CONNECT AUSTRIA GMBH (GCA)
Business performance
Financial year 2021 was characterised by strong fluctuations in energy prices for electricity and gas as
well as in prices for emission allowances. Gas transport in GCA’s transmission network held little
benefit for customers due to minimal price spreads at the European gas hubs. Delays in commissioning
the Nord Stream 2 natural gas pipeline have intensified the pressure on the EU gas market. Because of
the decision by Germany’s Federal Network Agency, the positive effects of Nord Stream 2 will not be felt
until the first half of 2022. As a result, revenue from the sale of transport capacities in the transmission
pipeline remained below expectations in 2021. In contrast, revenue from distribution network activities
and from the service business showed a favourable trend. Expectations were exceeded in both of these
segments in the past financial year.
A three-fold increase in the price of electricity and gas since the beginning of the year drove up the
expenses for the power required for compression. Various cost cutting measures and the
COVID-19-related restrictions on travel and meetings along with the resulting lower expenses for travel
and training helped to offset this increase. Insurance compensation promised in connection with the
incident in Baumgarten on 12 December 2017, payment of which is expected to be received in 2022, had
a positive effect reported in the income statement.
The interest in TAG GmbH accounted for using the equity method performed worse than projected
due to the high gas prices.
Marketing capacity
Gas Connect Austria always keeps its sights on the satisfaction of its customers and continually works to
adapt products and services to the requirements of the market. The focus is on developing innovative
and flexible transport solutions as well as on professional and customer-oriented key account
management. Regular customer satisfaction studies are conducted to assess the quality of the services
and to subsequently introduce measures aimed at continuous improvement. In 2021, the number of
transport customers on the transmission pipeline was similar to that of the previous years. At a rate of
an average 24 auctions per hour in 2021, a similar number of capacity auctions were conducted on the
PRISMA booking platform and on the RBP (Regional Booking Platform).
The transport volumes marketed in 2021 were slightly below the volumes for 2020. This decrease is
due mainly to lower demand caused by the overall gas flow situation in Europe along with the
bankruptcies of several transport customers.
Grid development
The network development plan secures the future of Baumgarten as an energy hub. In January 2020,
E-Control approved GCA’s network development plan for the first time without further requirements. In
its new network development plan, GCA has placed emphasis on innovation projects relating to
renewable gases, and a possible future Austrian hydrogen transport network is being outlined together
with Austrian Gas Grid Management AG (AGGM) and TAG.
Within the scope of the European Ten-Year Network Development Plan (TYNDP 2020), GCA also
defined its future focus and its willingness to actively contribute to the energy transition. In its capacity
as a distribution system operator, GCA submitted the Power-to-Gas for Austria (P2G4A) project in
regard to the TYNDP 2020. The TYNDP 2022 is currently in preparation.
98
Technical data
GCA power grid data
Pipelines
System length/km
DN Number of stations
Transmission pipeline
West-Austria gas pipeline (WAG) 384.3 DN 800-1200 3 CS, 1 SS, 9 M/TS
Penta-West gas pipeline 94.5 DN 700 1 CS, 3 M/TS
Hungaria-Austria gas pipeline (HAG) 45.7 DN 700 1 M/TS
Süd-Ost gas pipeline (SOL) 26.1 DN 500 2 M/TS
Various, e.g. KIP 13.4 DN 500 1 M/TS
Distribution network
Primary distribution system (PDS) 309.7 DN 80-1200 1 CS, 40 M/TS
Total 873.7
Abbreviations: substations (SS), compressor stations (CS), metering and transfer stations (M/TS), diameter nominal (DN)
Installed compressor capacity
System Site Capacity in MW
WAG (West Austria gas pipeline) Baumgarten (LA) 43,480
WAG Kirchberg (LA) 25,000
WAG Rainbach (UA) 36,700
Penta-West gas pipeline Neustift (LA) 22,200
PDS Baumgarten CS OGG 17,700
Total – 145,080
Abbreviations: primary distribution system (PDS), compressor station (CS)
Operational developments
Ongoing operations and maintenance
Maximum technical transport capacity was available in 2021 with no restrictions. Machine availability
(measured in compressor units) was at nearly 89%. All regulatory and statutory maintenance
requirements were conducted. Expanded to include all of GCA’s maintenance plans, the level of
fulfilment amounted to nearly 97%. Especially in light of the challenging conditions due to the
COVID-19 pandemic, this represents a highly satisfactory performance.
ANNUAL FINANCIAL REPORT - GROUP 99
Dispatching (system management)
GCA’s dispatching centre ensures smooth and efficient management of gas flows in the pipeline
systems around the clock. Here, too, the COVID-19 pandemic presented particular challenges in the
24/7 operation of commercial and physical dispatching. Specific safety concepts were used to avoid
potential infections within the teams and guarantee safe and reliable operations.
Strict safety and quality standards
As a gas transmission network operator, Gas Connect Austria’s highest priority is safe and reliable
supply. The company relies on strict safety and quality standards to live up to this responsibility, day in
and day out. In 2021, GCA achieved certification for its information and IT security in accordance with
the cybersecurity framework of ISO 27001. For quality assurance purposes, Gas Connect Austria
established an integrated management system in alignment with international ISO standards many
years ago, and the system is regularly reviewed by an external certification service.
Gas Connect Austria is certified in accordance with the following management systems:
• ISO 9001 Quality Management System
• ISO 14001 Environmental Management System
• ISO 50001 Energy Management System
• ISO 45001 Occupational Health and Safety Management System
• ISO 27001 Information Security Management System
Projects and stakeholder management
The key investments in the project area are related to replacement investments to maintain the existing
gas grid.
Abbreviations: metering station (MS), primary distribution system (PDS)
The complete reconstruction of the Oberkappel metering station dominates activities in the
transmission pipeline segment. This metering and transfer station of the West Austria Gas pipeline
guarantees safe transport of gas and metering at the border crossing between Austria and Germany. As
part of the modernisation work necessitated by the station’s age, the metering technology was brought
up to the state of the art with ultrasonic meters including new gas quality measurement equipment.
Adaptations for cleaning the gas (new filter separators), for safety (new venting system) and operation
(new regulating valves) were also implemented. The project was completed on schedule in
quarter 3/2021.
In the distribution network segment, the main project is the reconstruction of the primary
distribution system (PDS) hub in the Baumgarten station. The PDS hub connects the transmission
pipelines with the Austrian distribution network in the Baumgarten station. Several sections of the plant
had been impacted by mechanical and thermal effects in an incident that occurred in December 2017.
SDG 8
Maintenance CAPEX €m
Transmission pipeline segment: revamp of Oberkappel MS
20.3
Distribution network segment: construction of new PDS hub 19.1
Distribution network segment: G00-011 pipe modernisation 29.6
100
Based on an in-depth study, a decision was made to build a new, improved PDS hub according to the
state of the art. The project will be completed on schedule in quarter 4/2022.
It is important to us to maintain good contact and amicable relations with communities, landowners
and farmers directly affected by the project, as well as with local residents and interest groups (such as
chambers of agriculture) at our sites (stations) and along our pipeline routes.
GCA assumes responsibility for the necessary intervention and impacts on nature, the environment
and mankind and for the resulting accompanying and compensatory measures. In construction, these
include compliance with the “Guidelines for proper soil recultivation of agricultural and forestry land”,
implementation of environmental construction supervision and controlling of non-native and invasive
species. Viewpoints and representations are substantiated by third-party experts or by means of
reference projects. The scenario in which a project is initiated and its benefits for specific interest
groups and the general public are communicated in detail.
The employees of GCA’s Right of Way department act as the general point of contact around the clock
for all kinds of information, from inspection requests (reports of damage) to suggestions and
complaints. Neighbouring property owners and interested parties can also visit GCA
in person or get in
touch by phone, e-mail or letter or through social media.
An annual survey and assessment of consequential damage (growth damage as a result of thermal
output) is conducted with representatives of the responsible chambers of agriculture as well as with
individual farmers. The damages determined in this way are then mostly settled by way of crop damage
meetings. In the event of more complex damages, home visits are made to the claimants.
Support for local youth
Since 2010, Gas Connect Austria has partnered with the Austrian Youth Book Club (Österreichischer
Buchklub der Jugend). Various projects have been implemented throughout the years including
Children Exploring History (“Kinder erforschen Geschichte”), Reading Community (“Lesegemeinde”)
with reading theatre, workshops and numerous book donations to promote the joy of reading among
the young people of GCA’s neighbouring communities. The Reading Community project was initiated
in the Styrian municipality of Strass in 2021 (GCA operates the SOL pipeline in Styria).
Sustainable route management
The gas grid of gas subsidiary GCA leads through different landscapes in Lower Austria, Upper Austria,
Burgenland, Styria, Carinthia and Vienna. Depending on the region, the climate, the naturally occurring
circumstances and the type of use by humans, the route types to be found along GCA’s pipeline routes
include routes through forests, grasslands and farmland. The pipeline routes not only contain the
pipelines, but also provide valuable habitats for flora and fauna.
When planning the construction of new pipeline routes, the aim is always to avoid sensitive areas
(nature reserves, bird sanctuaries, biotopes, natural and archaeological monuments, etc.). If this is not
possible, GCA consults with experts from different fields to define extensive measures for limiting
interference in the natural environment, for example ecological site supervision, compliance with
guidelines for proper soil recultivation, reforestation, official monitoring, control of non-native and
invasive species, ground squirrel relocation and wildlife corridors.
GRI 413-1
ANNUAL FINANCIAL REPORT - GROUP 101
Innovation, research and development
Gas Connect Austria works continually on new technological developments and improvements to the
status quo. To this end, new technologies and concepts aimed at improving safety and availability and
increasing efficiency are regularly implemented.
Safety
In conjunction with a technology partner, further progress in 2021 was made in digitalising pipeline
safety in the form of continuous monitoring based on fibre optic technology. Advances were made in
the field of drone research, which in addition to stationary cameras can be used for monitoring facilities,
as well as in satellite-based monitoring.
Furthermore, Gas Connect Austria is investigating opportunities for continuously available fire
detection using infrared cameras and the potential connection to a central fire reporting system. Parallel
to the fire detection system, the possibility of continuous gas detection using laser technology is being
tested further in pilot projects.
Route monitoring using satellite image analysis is another innovation in pipeline safety. A pilot
project conducted in cooperation with external partners was completed, after which the possibilities of
this innovative technology were explored and assessed on selected sections of pipeline.
The role of hydrogen in the future
In order to specifically address the issue of hydrogen compatibility in the transport system, an external
consulting firm was commissioned to conduct a study in 2021 for developing a specific implementation
plan along with the cost of implementation based on two specific pipelines.
Additionally, GCA is a member of Hydrogen Europe, the Clean Hydrogen Alliance and the European
Hydrogen Backbone initiative, where it participates in numerous working groups planning the future
hydrogen network. Many routes for importing hydrogen into Austria were also evaluated by the World
Energy Council.
Beyond that, GCA submitted an IPCEI (Important Project of Common European Interest) in the field
of hydrogen (H2EART). This focuses on the conversion of the pipeline network for hydrogen, the
construction of hydrogen pipelines to large-scale consumers and establishment of the Baumgarten
station as a European hydrogen hub. Since 2021, the project has been a key element of numerous other
European IPCEIs. Furthermore, a preliminary study is being developed for the Power2Gas4Austria
project, a sector coupling project by GCA and APG.
Reducing methane emissions
For many years, GCA has continually implemented measures to reduce methane emissions and
participates in the United Nations international environmental programme culminating in the Oil and
Gas Methane Partnership (OGMP) initiative. In 2021, OGMP certified Gas Connect Austria as meeting
the gold standard (highest level) of methane reporting.
In order to minimise methane emissions at the GCA plants as far as possible, an acoustic detection
camera was acquired in 2021. The camera has delivered highly encouraging results in operational tests
and was also used for detecting compressed air leaks. Based on the positive results, additional cameras
will be purchased for other maintenance sites in order to test for leakage in the systems during
maintenance activities or when new equipment is being put into operation. This represents an
important contribution to reducing methane emissions.
SDG 9
102
At the Rainbach compressor station, a feasibility study was prepared for a recompression unit to
recapture methane released from natural gas compressors during venting when the system is shut
down. The goal is to reduce methane emissions during maintenance activities.
Future developments
Security of supply -– forward-looking energy sources
Gaseous energy, currently in the form of natural gas, but also in future in the form of renewable gases,
plays an important role in security of supply. Gas is used in households, businesses, energy-intensive
industry, mobility and freight transport. It covers over 20% of domestic energy requirements and is
reliably available 24 hours a day, 365 days a year. Gas can be stored in large quantities and can thus
compensate for the fluctuations in solar, wind and hydropower and relieves the load on the electricity
grids when required. Gas can also be produced renewably in the form of biogas, synthetic methane or
green hydrogen. Gaseous energy will be indispensable for the chemical industry and the steel industry
in future. GCA is actively working to prepare the gas grid for transporting renewable gases. Laws
currently allow “only” 4% of hydrogen in electricity generated from gas (or up to 10% in regulated
exceptional circumstances), which equates to 6 TWh in the Austrian transmission network. This will be
gradually increased across Europe in the years to come. GCA welcomes this progress and could already
quickly achieve 10% compatibility with minimal modifications.
Contribution to the energy transition
GCA has been involved in the decarbonisation of the gas grid for many years. From 2014 to 2017, the
“Wind2Hydrogen” pilot plant at the Auersthal site was used to test how electricity from wind power
plants can be converted to hydrogen via electrolysis and fed into the gas grid. The mixing of hydrogen
into the gas grid is called blending. A highly energy-efficient process for re-extracting the hydrogen from
the gas pipeline in its pure form – called deblending – has been developed together with the Vienna
University of Technology (TU) as part of the “HylyPure” project.
Development of the company
In 2022, GCA will continue its efforts to reinforce Austria’s position as the central European gas hub for
the long term. Accordingly, those activities will be continued which are aimed at bringing in binding
market demand for the projects currently being implemented with the goal of supplying added capacity.
In the years to come, sustained demand for natural gas is anticipated throughout Europe – on one hand
because of the coal phase-out and, on the other hand, to serve as a backbone for volatile electricity
production from renewable energy (Dunkelflaute).
Upcoming initiatives and parameters at the European and even at the national level will define the
framework and the challenges for the gas infrastructure in general and, in particular, the role of Gas
Connect Austria in the energy transition on the path to decarbonisation by 2040 and 2050. Various
studies demonstrate effectively that the use of pipelines represents the most cost-efficient option for
transporting gases (biogas, hydrogen, synthetic methane) within Europe. That transport becomes 50%
more efficient if existing pipelines are used. The GCA grid is capable of transporting different renewable
gases and is thus, by definition, not a fossil grid but rather a transport opportunity for renewable energy
already in existence today.
ANNUAL FINANCIAL REPORT - GROUP 103
In this period up to 2050, renewable gases such as biogas and hydrogen from green electricity and
synthetic methane (including from imports) will play an additional role in utilising the capacity of the
gas infrastructure. Furthermore, because of the transit character of its pipelines, it is important for GCA
to consider the climate and energy plans of neighbouring countries. This will help to ensure that it will
have the corresponding range of products and services available (to meet demand that changes over
time). The currently untapped potential of carbon capture and storage at the place of consumption may
also become more interesting. In the years to come, Gas Connect Austria will focus on being involved in
designing the future role of the gas infrastructure in a decarbonised environment and within the
framework of the international gas infrastructure associations ENTSOG and GIE, as well as FGW at a
national level.
This will serve to anchor the perception and significance of GCA as a critical infrastructure company
and the contribution its gas grid will make in the energy transition within the relevant community of
stakeholders and decision-makers.
The partnership initiated in 2014 with the Czech grid operator N4G will be continued by further
advancing the development of a direct connection between the Czech Republic and Austria at the
transmission pipeline level in line with market requirements. The commercial and technical planning
has been completed and a corresponding project proposal considered. Binding market demand in the
form of an auction is planned for 2022.
In addition, GCA is working with FGSZ on projects to increase the sales potential. For July 2022,
preparations are underway to market various offer levels for transport capacities at the Hungarian-
Austrian cross-border point Mosonmagyaróvár.
Gas Connect Austria has also joined forces with other grid and storage operators and with producers
for the H2EU+Store project, which generates renewable hydrogen in Western Ukraine and brings it
through Slovakia by pipeline to Austria, where it is stored and then transported to the German industrial
sector. This is the first time that the entire value chain ranging from generation to transportation to
consumption is united under a single project. H2Global also aims to secure the funding for producers
and consumers by means of long-term purchase agreements.
104
All other segments
“All other segments” is a combined heading under which the Thermal generation, Services and Equity
interests segments are brought together (because they are below the quantitative thresholds). Electricity
and heat generation from gas is reported under the Thermal generation segment. The primarily intra-
Group business activities of VERBUND Services GmbH are reported under the Services segment.
Interests accounted for using the equity method which have not been allocated to any other segment
are reported under the Equity interests segment. As at the reporting date of 31 December 2021, this only
comprised the equity interest in KELAG-Kärntner Elektrizitäts-Aktiengesellschaft.
Business performance
KPIs – All other segments
Unit 2020 2021 Change
Total revenue €m 184.8 383.4 –
EBITDA €m 37.9 72.5 91.1%
Result from interests accounted for
using the equity method €m 28.1 36.0 27.8%
Capital employed €m 412.6 512.6 24.2%
The sharp rise in total revenue and EBITDA stemmed mainly from the increased use of the
Mellach CCGT in quarter 4/2021 which, as a consequence of higher sales prices, led to higher revenue
and correspondingly higher gas usage. The result from interests accounted for using the equity method
was generated by KELAG-Kärntner Elektrizitäts-Aktiengesellschaft.
The rise in capital employed is chiefly attributable to the increased equity interest in KELAG-Kärntner
Elektrizitäts-Aktiengesellschaft due to the positive result from interests accounted for using the equity
method and higher property, plant and equipment, resulting in particular from the reversals of
impairment losses recognised on the Mellach CCGT in quarter 4/2021 and from higher current
receivables.
Thermal generation
At the end of 2021, VERBUND operated one thermal power plant at the Mellach/Werndorf site;
operations were suspended for one thermal power plant and one boiler unit. Going forward, the
Mellach site with Austria’s most cutting-edge combined cycle gas turbine power plant will be
instrumental in maintaining security of supply in Austria and will serve as a bridge technology to a
lower-carbon energy future.
ANNUAL FINANCIAL REPORT - GROUP 105
Energy supply
Energy generation overview
Electricity generation
Number
1
Maximum
electrical capacity
in MW
1
2019
Generation in
GWh
2020
Generation in
GWh
2021
Generation in
GWh
Mellach CCGT (natural gas) 1 848 888 687 1,124
Mellach district heating
power plant (hard coal)
– – 681 – –
Mellach district heating
power plant
(hard coal/natural gas)
2
1 165 – 346 1
Total 2 1,013 1,569 1,033 1,125
1
as at 31 December 2021 //
2
reduction in output from 246 MW to 165 MW in April 2020 due to conversion to natural gas
Generation from thermal power (net) rose by 8.8% to 1,124.8 GWh in the 2021 reporting period. The
increase is due to greater generation at the Mellach combined cycle gas turbine power plant (CCGT).
The Mellach district heating plant phased out coal-fired electricity generation in 2020 and generated
only 1 GWh for congestion management purposes. At 304.3 GWh in 2021, generation of district heating
was 37.3% lower than in the prior-year reporting period. There were no district heating deliveries in
winter 2020/21.
Capacity changes
The maximum electrical capacity of VERBUND’s thermal power plants – the Mellach CCGT and the
Mellach district heating power plant – totalled 1,013 MW as at 31 December 2021. Generator 10 of the
Mellach CCGT was contracted for congestion management purposes. Beginning on 1 October 2021,
generator 20 of the Mellach CCGT was contracted by Energie Steiermark Wärme GmbH to supply
district heating to Graz and the surrounding area. Operations were suspended at the Mellach district
heating power plant beginning in October 2021.
Restructuring of the thermal segment
With the exception of the fly ash facility, the dismantling work at the former Werndorf power plant site
was completed in 2021.
At the Dürnrohr site, dismantling of the former VERBUND Thermal Power plants began in 2021.
Partial dismantling is planned. In cooperation with the power plant partners, a concept is being
developed to voluntarily secure and renovate the N64 contaminated areas at the Moosbierbaum
industrial site.
Socially responsible solutions were found for VERBUND employees working at all plant sites
currently in the process of being decommissioned or that have already been shut down.
Availability of existing thermal power plants
The average time availability of the thermal power plants (Mellach CCGT and Mellach district heating
power plant) was 92.6% in financial year 2021. This is slightly lower than the prior-year figure of 92.7%.
The level of reliability averaged 95.2% and thus was lower than the prior-year figure (2020: 98.1%).
GRI EU1
GRI EU2
GRI EU1
GRI EU30
106
Other project topics
In the project for the Werndorf gas boiler plant, damage occurred again at the end of 2020. An analysis
of the damage and its causes was carried out in 2021, and the further steps to be taken were largely
agreed with the general contractor.
The ambitious research project HOTFLEX kicked off at the Mellach power plant site in 2019
continued in financial year 2021. A pilot plant for high-temperature electrolysis and fuel cell operations
was constructed on the premises of the gas turbine power plant. A test programme and operation in
electrolysis mode followed in 2021. The project will continue in 2022.
In future, projects for decarbonisation of thermal generation will be developed, tested and
implemented at the Mellach/Werndorf power plant site. This is already occurring in the HOTFLEX,
Hy
2
Power, RECPP, GreenDealCO
2
and HyTechonomy projects, for example, and in a cooperation on a
hydrogen field test. The existing infrastructure at the site and the operational expertise can be used for
these. The objective of the projects is to gradually reduce the specific carbon emissions per generated
MWh of electricity and heat. The competencies related to hydrogen are now bundled in a separate
Group division due to restructuring measures.
The projects Hy
2
Power, aimed at developing a technology concept for a power plant to provide grid
services, and Re-Purposing Coal Power Plants (RECPP), aimed at developing a strategy for subsequent
use of coal-fired power plants in the energy transition, were continued in 2021. In addition, the
HyTechonomy project for the further development of key technologies for hydrogen and the
GreenDealCO
2
project for the integration of power-to-fuel plants in former coal-fired power plants were
launched in 2021.
Achievement of the targets defined for VERBUND Thermal Power GmbH & Co KG (VTP) was
confirmed in the last external sustainability audit. An external extension audit was completed for the
environmental management system (in line with ISO 14001:2015 and in accordance with the EMAS
Directive) in September 2021.
Work continues at the decommissioned St. Andrä site on a sustainable solution for the soda ash found
there. Utilisation at the decommissioned Zeltweg site is continuing.
Allocation and purchase of emission allowances
Direct CO
2
emissions from VERBUND’s thermal power plants are subject to European emissions trading
(EU ETS). In other words, a valid allowance must be acquired for every tonne of CO
2
emitted. Free
allocations of emission allowances amounted to just 28.5 kt CO
2
in 2021, as only a small portion of the
free allocations went to district heating plants in the fourth phase of ETS. For VERBUND, this amounted
to just 6.5% of the quantity needed for its emissions totalling 431.9 kt CO
2
. Emission allowances were
acquired through auctions or in the market to cover the remaining share of 93.5%. This decrease in the
number of CO
2
emission allowances needed is attributable to the discontinuation of coal-fired
electricity generation in the Mellach district heating plant and the expiry of the old agreement to supply
district heating.
GRI EU5
Additional information
on emissions can be
found in the
Environmental
performance section
ANNUAL FINANCIAL REPORT - GROUP 107
KPIs – direct CO
2
emissions from thermal power plants
Unit 2019 2020 2021
CO
2
emissions from thermal
power plants
1
kt CO
2
1,068 648 432
Free allocations of emission
allowances kt CO
2
53 42 29
1
preliminary figures before ETS audit
Services
In financial year 2021, the following services were provided in key fields of activity by VERBUND
Services GmbH (VSE) as a shared service organisation of VERBUND:
• coordination of Group crisis management;
• provision of IT and telecommunication services (e.g. landline telephony, mobile communications,
ship radio and company radio systems, radio relay systems, fibre-optic data networks, industry TV,
fire protection equipment, IT standard client including data back-up, licence provision, application
development, help desk services, data centre operations, etc.);
• general services: facility management, office management, cleaning services, catering, Vienna vehicle
fleet service;
• procurement;
• management accounting and operations: ERP SAP systems, corporate organisation, commercial
services;
• financial accounting; and
• human resources services and payroll.
In quarters 1–4/2021, the COVID-19 pandemic presented challenges for VERBUND throughout the
Group and therefore also for VERBUND Services GmbH. With its core competencies, VERBUND
Services GmbH plays a role in securing the electricity supply (as part of the critical infrastructure) and
makes significant contributions to VERBUND’s Group crisis management. A variety of services were
provided by Group crisis management, in particular the Group situation report, the Group management
report, the safety equipment and the self-tests. In addition, Group crisis management is responsible for
coordinating the operation of the COVID-19 test facility at VERBUND’s corporate headquarters at
Am Hof in Vienna and the coordination of company vaccination stations for COVID-19 vaccinations –
after all, some 1,700 people have taken advantage of the latter. VERBUND Services GmbH provides staff
both for the test facility and for the vaccination stations.
Facility management optimally maintained the COVID-19 prevention measures. Critical workspaces
at more than 50 of VERBUND’s power plant and administrative office locations were disinfected
regularly and furnished with protective equipment. Measures were taken in line with the strategic
security concept to increase building security at corporate headquarters.
In the commercial processes, the stability and performance of the system availability in SAP was
ensured without interruption. Additionally, the commercial processes were further improved with the
successful introduction of electronic processing of incoming post and the implementation of a specially
developed tool for workflow-supported online contract generation in SAP. In the SAP Excellence
project, the migration to SAP S/4 Hana is on schedule. The design phase was successfully completed in
108
adherence to the project schedule and the project budget. The implementation phase will start at the
beginning of 2022 and is expected to last until early 2024 (ERP) or early 2025 (BW).
In human resources services, the requirements necessitated by the COVID-19 pandemic continued to
be implemented. These included assumption of crisis unit functions and ongoing processing of claims
against VERBUND and government grants related to COVID-19 such as special care arrangements and
risk groups, as well as processing of quarantines, potential contacts and absences related to COVID-19.
In addition, continuous changes in the law were implemented, examples being the amendment of the
commuter allowance calculation and the allowance for working from home. There was also a focus on
system automation to improve security in the event of changes to banking connections and to allow
fully automated calculations in negotiations for reduced working hours. Furthermore, around
270 employees in Germany were switched over to electronic payslips. VUM Verfahren Umwelt
Management GmbH with around 50 employees was acquired as a new customer for the payroll services
department. For another customer that had relocated, an app solution was implemented for
subsidisation of lunches including conclusion of a works agreement.
In IT services, the relocation measures necessitated by the new data centre were finished on schedule
and the go-live was completed without business interruptions. Further progress was also made in the
implementation of additional projects related to information security. The experiences of remote
working from home were the basis for the newly initiated plans and projects for supporting the new
culture of work.
In telecommunications, telephone systems were replaced and the access control systems needed to
implement zone concepts were set up at VERBUND Hydro Power GmbH (VHP) in the designated plant
areas. Furthermore, the project to replace the client switches was commenced to improve the
performance and IT security of the data network. Modification of the dense wavelength division
multiplexing (DWDM) network also continued, and the replacement of the transmission technology for
the data transfer network was commissioned or started.
ANNUAL FINANCIAL REPORT - GROUP 109
Equity interests
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft
At €36.0m, the contribution from KELAG to the result from interests accounted for using the equity
method was up in 2021 compared with the prior-year figure (2020: €28.1m)
1
. Among other things, the
increase year-on-year was attributable to significantly higher sales prices and good water supply. The
dividend attributable to VERBUND for 2021 was €17.6m. As at 31 December 2021, VERBUND held a
35.17% equity interest in KELAG.
KELAG generates electricity from 100% renewable energy and along with VERBUND is among the
major Austrian producers of hydroelectricity. It also operates in the field of wind power and implements
selected solar power projects. KELAG generates district heating mostly from industrial waste heat and
biomass and the remainder from natural gas.
1
KELAG accounting adjusted retrospectively in accordance with IAS 8
39
28
36
19 20 21
Equity result - KELAG €m
21
Equity method accounting
110
Opportunity and risk management
The risk management system in place at VERBUND is based on international standards such as COSO II
and ISO 31000. VERBUND’s risk management system is structured to ensure comprehensive coverage
of potential areas of risk and opportunity, while uniform, Group-wide principles form the basis for
standardised treatment of risks and opportunities.
Due in particular to the energy transition, which poses challenges for the energy industry as a whole,
both processes and products of the Group-wide risk management system are regularly adapted to
changes in internal and external requirements. Each year, VERBUND’s auditor reviews and confirms the
effectiveness and maturity level of the Enterprise Risk Management based on the recommendations
contained in the ISO 31000 reference model.
Further development
In financial year 2021, VERBUND’s risk management activities focused, among other things, on further
developing the risk-return approach for the Group (mainly in connection with planned projects and
investments) and the multi-year risk horizon for risk inherent in current business operations, as well as
on identifying and evaluating strategic risks and expanding the risk-bearing capacity concept. A stress
test analysis was also introduced, which in future will be carried out once a year or as required. Our risk
reporting processes have also been revised and expanded as part of this process.
Under this approach, VERBUND’s risk management agendas currently extend to activities aimed at
supporting strategic decision-making processes as well as to project management and the management
of current operations.
Significant opportunities and risks as well as measures
The table below provides an overview of the main risks identified within VERBUND, classifies them as
opportunity or risk categories and presents possible risk mitigation measures.
Category Description/measures Impact on earnings
Financial statements impact Opportunity Risk
Value adjustment
Increase/decrease in assets (impairment losses/reversal of
impairment losses on power plants as well as carrying
amounts of equity interests) and provisions recognised to
account for changes in the (energy) market and economic
environment (long-term electricity price forecasts), the cost
of capital and other assumptions for calculations
(e.g. remaining lifetime expectation, pension obligations)
Measures:
- Conclusion of long-term agreements
(customers, grid support)
X X
Price risk Opportunity Risk
Price variation
Difference between expected (projected) and realised sales
prices
X X
GRI 102-11
ANNUAL FINANCIAL REPORT - GROUP 111
Category Description/measures Impact on earnings
Measures:
- Pricing-in strategy
- Conclusion of long-term supply agreements
- Options transactions
Volume risk Opportunity Risk
Fluctuations in volume
Water/wind/PV
TCFD
Difference between expected and actual production
volume from water/wind/PV generation – necessary short-
term purchase or sale of energy volumes
Measures:
- Balancing on the short-term futures and spot markets
- Weather derivatives or weather insurance products
X X
Contribution margin risk –
power grid
Planning risk in relation to the products grid usage,
congestion management, grid loss and control power in
the Grid segment
Measures:
- Discussion/agreement with regulators
- International collaborations
X X
Contribution margin risk –
gas grid
Planning risks: revenue (transmission pipeline, distribution
network), energy costs and maintenance expense
Measures:
- Continuous monitoring
X X
Flexible products
Variation in the contribution margin from congestion
management, control power, intraday trading and
pumping/turbining at the storage power plants
Measures:
- Participation in tenders for the provision of capacity for
short-term and multiple-year stability of grid operation
- Optimisation of trading activity
X X
Asset/infrastructure risk Opportunity Risk
Asset/infrastructure risk Potential effects of outages, damage and consequential
losses on power plants
Measures:
- Maintenance
- Audits
- Insurance policies
X
Legal risk Opportunity Risk
Pending legal disputes Litigation risk from various pending legal actions/
legal disputes
Measures:
- Legal advice
- Financial provisions
- Insurance policies
- Out-of-court talks
X X
Regulatory risk
TCFD
Opportunities and risks arising from changes in the
political, legal or regulatory environment
Measures:
- Increased collaboration with national and international
interest groups, associations and authorities
X X
112
Category Description/measures Impact on earnings
Financial risk Opportunity Risk
Counterparty risk Payment default by business partners
Measures:
- Requesting of recent business reports
- Realisation of existing collateral
- Strict scoring of business partners based on a
conservative system for evaluating credit ratings
- Regular monitoring
X
Securities risk Currency gains/losses on investment positions (e.g. funds)
Measures:
- Monitoring through regular value-at-risk calculations
X X
Equity interest risk Holding gains/losses, deviations in the profit/dividend
targets for equity interests
Measures:
- Monitoring and early warning systems
X X
Rating risk Changes in the rating lead to lower or higher refinancing
costs
Measures:
- Ongoing assessment of projects for impact on ratings
X X
Interest rate risk Rising or falling interest expenses/interest income due to
changing market interest rates
Measures:
- Hedging instruments
- Long-term fixed-interest agreements
X X
Contingent liabilities Financial losses caused by crystallisation of contingent
liabilities (e.g. liabilities, guarantees)
Measures:
- Selective issue of contingent liabilities
- Continuous monitoring
X
Operational risk Opportunity Risk
Flood risk
TCFD
Possible effects of a flood on third parties and the Group’s
own plants
Measures:
- Structural protection measures
- Regular training sessions and courses (e.g. as part of
crisis management)
- Insurance policies
X
Cyber risk
Deliberate, targeted IT-based attack on data and IT
systems. Possible consequences include loss of control
(security of supply), data theft and cyber extortion
Measures:
- Internal Group projects to improve security of IT
systems and IT infrastructure
- Insurance policies
X
ANNUAL FINANCIAL REPORT - GROUP 113
Category Description/measures Impact on earnings
Compliance risk
Violations of internal and external regulations (such as
financial market compliance and competition law)
Measures:
- Compliance training, annual risk analysis
- Defined processes, regulations and code of conduct in
relation to compliance and competition law
X
Project risk Opportunity Risk
Project risk
Exceeding of or failure to meet projections with regard to
time, costs and quality
Measures:
- Pre-project analysis, project management, project
management accounting and project monitoring
- Optimisation of contractual arrangements
X X
Other risks Opportunity Risk
Reputational risk Negative economic effects caused by damage to the
Group’s reputation
Measures:
- Brand Monitor
- Internal and external communication and strict
compliance guidelines
X
Strategic risk Opportunity Risk
Technology/
innovation risk
Negative/positive effects from technological innovations
and changing customer needs
Measures:
- Intensive collaboration with external research projects
- Agile adaptation to new technologies
- Investment in in-house research and development
X X
Strategic risk
business model
TCFD
Negative/positive effects on the business model caused by
changes in conditions in the energy market or in climatic,
legal or macroeconomic conditions
Measures:
- Regular monitoring
- Holding of regular strategy meetings
X X
Current opportunities and risks 2021
The material drivers of opportunities and risks in the 2021 financial year are in the following risk
categories: volume risk, price risk, project risk, financial risk and operational risk.
114
Volume opportunities/volume risks
VERBUND’s plants are highly exposed to weather events which cannot be influenced. This is
particularly true for VERBUND’s hydropower plants and wind and solar farms as well as APG’s high-
voltage lines.
Hydropower generation is subject to the seasonally fluctuating water supply of the catchment areas.
Options to compensate for these effects by means of the (annual) storage power plants of VERBUND
Hydro Power (VHP) are very limited. Little rainfall and a resulting poor water supply characterised
quarter 4/2021 in particular. As a result, the generation volume was below the long-term average in the
months of October to December 2021. Throughout all of 2021, generation from wind power was also
below the long-term average due to the low wind supply.
Over the long term, changes in the climate can have a lasting effect on the water/wind supply and
photovoltaic output, which may cause greater seasonal or annual deviations in generation to occur in
the future. In order to counter this trend and to diversify potential risks, VERBUND relies on
maintaining the value of existing hydropower plants and expanding promising new ones in tandem
with increasing generation from wind and solar farms.
Electricity price opportunities/electricity price risks
In addition to the risks of fluctuations in output, electricity price trends also represent a significant risk
and opportunity factor for VERBUND. In order to reduce the risk potential, long-term agreements were
entered into with customers in some cases. However, changing conditions can influence the
profitability of some of these agreements, particularly in the long term, and necessitate adaptations.
Electricity prices generally rose in 2021, while a significant increase in volatility was observable on the
electricity markets particularly in the second half of the year. Higher electricity prices more than offset
the negative effects of lower generation volumes.
In addition to other factors, rising carbon prices had a significant effect on electricity prices in
financial year 2021. Around 96% of VERBUND’s output was generated from carbon-free renewable
energy sources which are thus not part of the European Union’s Emissions Trading System (ETS).
Accordingly, rising/falling ETS prices also have a positive/negative impact on VERBUND’s financial
performance.
Project opportunities/project risks
The ongoing construction boom, scarcity of raw materials, supply chain problems and inflation resulted
in price increases in 2021, which for VERBUND also meant rising costs for various construction projects.
Previously concluded fixed price contracts provided a partial buffer to these negative effects. Supply
chain problems also caused delays in the implementation of various other projects, such as in the area
of IT infrastructure.
Financial opportunities/financial risks
Expiring government support measures related to COVID-19, other measures aimed at containing the
pandemic such as lockdowns and restrictions, and higher prices for consumer goods and energy
resulted in a slight increase in the default and counterparty risk in 2021. In order to minimise the risk
potential, VERBUND
relies on an established system of credit limits and a strict scoring of business
partners based on a system for evaluating credit ratings and regular monitoring of credit risk.
GRI 201-2
SDG 13
TCFD
GRI 201-2
TCFD
ANNUAL FINANCIAL REPORT - GROUP 115
Operational opportunities/operational risks
In many sectors and areas, the COVID-19 crisis resulted in a shift to increased remote working
arrangements. Cyber criminals are increasingly attempting to capitalise on this situation, which also
raised this potential threat in 2021. VERBUND
responds to the heightened challenges (mainly from the
perspective of critical infrastructure) by continually improving the existing security mechanisms.
VERBUND counteracts risks from cyber space by implementing preventive security strategies, internal
projects to increase the security of IT systems and IT infrastructure, as well as internal guidelines and
correspondingly defined and secured processes.
Continuous improvement of risk management
is of great importance to VERBUND.
Strategic opportunities and risks
Climate change, changes in the legal environment, technological developments and changes in the
market environment can have a major impact on a company’s business model and strategy (as
described above to some extent). Close examination of medium- and long-term strategic risks at an
early stage is therefore important to ensure successful continuation of the direction in which the Group
is moving. The relevant strategic risks at VERBUND are therefore continuously identified and assessed.
This proactive management of long-term risks allows their effects on the Group to be limited
accordingly and opportunities for additional growth to be consciously exploited.
Risk-bearing capacity
One success factor is secure access to the capital market. The concept for the risk-bearing capacity is
focused on two areas: on one hand, identifying the effects of organic and inorganic projects on the
Group’s credit rating and, on the other hand, determining whether future medium- to long-term
scenarios jeopardise the Group’s target credit rating.
TCFD
116
Forecast – performance in financial year 2022 (sensitivity)
All else remaining equal, a change in the factors shown below would be reflected in the projected Group
result for 2022 as follows (based on the hedging status as at 31 December 2021 for generation and
interest rate):
+/–1% in generation from hydropower plants: €+/–24.5m
+/–1% in generation from wind power: €+/–1.0m
+/–1€/MWh in wholesale electricity prices (renewable generation): €+/–5.1m
+/–1 percentage point in interest rates: €–/+12.0m
Internal control and risk management system
In accordance with Section 243a(2) of the Austrian Commercial Code (Unternehmensgesetzbuch,
UGB), the internal control and risk management systems for the accounting process must be described.
VERBUND’s internal control system includes all measures for ensuring the reliability, effectiveness and
profitability of this process, as well as compliance with external regulations. The structure of the risk
management system is explained in detail in the Disclosures on Management Approach (DMA) and the
risk position in the section of this VERBUND Integrated Annual Report 2021 entitled Opportunity and
risk management.
Organisational framework
VERBUND’s Group management acts in accordance with the principles defined in the corporate
philosophy. The Executive Board bears responsibility for developing and implementing the entire
internal control and risk management system. The Supervisory Board’s Audit Committee monitors its
effectiveness.
Basic principles of the internal control and risk management system
VERBUND’s extensive financial reporting process is governed by Group-wide guidelines and
requirements. The performance, monitoring and supervision of business transactions are segregated
from each other. This ensures that no single employee can act alone in performing all the process steps
of a transaction from beginning to end. A review of authorisations is integrated into the process for
technical processing of transactions. Compliance with and the effectiveness of these checks is reviewed
on a periodic basis. Based on VERBUND’s process map, business processes and the risks they entail are
systematically analysed and documented, as are checks of the financial reporting process. The
operational structure, the process map and the checks are documented regularly in ARIS (the process
modelling tool) and published on the intranet (incl. risk control matrix). VERBUND’s organisational
structure is continually adapted to address changing internal and external conditions.
Reporting in compliance with unbundling provisions
VERBUND’s quarterly reports and the VERBUND integrated annual report consolidate information
from the management accounting, corporate accounting, financial management and risk management
functions as well as from the area of corporate responsibility. All reports are based on uniform Group-
GRI 102-11
GRI 103-2
Corporate philosophy on
www.verbund.com >
About VERBUND >
Company >
Corporate philosophy
GRI 103-3
ANNUAL FINANCIAL REPORT - GROUP 117
wide rules for preparation and measurement. The liberalised European energy market requires an
unbundling of the grid from the generation, trading and sales of formerly integrated electric utilities.
VERBUND subsidiary Austrian Power Grid (APG) has therefore been operating in the electricity market
since 2012 as an independent transmission system operator. An external equal treatment officer
monitors compliance with the unbundling provisions specified in the contract. VERBUND AG acquired
a 51% stake in Gas Connect Austria GmbH (GCA) effective 31 May 2021. VERBUND subsidiary GCA
performs the duties of an independent transmission system operator in the gas market and continues to
be subject to the statutory unbundling provisions. Compliance is monitored by an external equal
treatment officer.
Periodic monitoring
Internal Audit reviews the handling of business processes and the internal control and risk management
system. The individual audits are performed according to the audit schedule approved by the
VERBUND Executive Board and are supplemented by special audits. The audit reports include
recommendations and measures. A periodic follow-up ensures implementation of the proposed
improvements. APG, as an independent transmission system operator for electricity, and GCA, as an
independent transmission system operator for gas, have each had their own internal audit function
since March 2012 and February 2012, respectively.
118
Shareholder structure and capital information
in accordance with Section 243a(1) of the Austrian Commercial Code (UGB)
1. At the reporting date of 31 December 2021, the called and paid-in share capital of VERBUND AG
comprised:
170,233,686 no-par value shares (bearer shares category A), equivalent to 49% of share capital;
177,182,000 no-par value shares (registered shares category B), equivalent to 51% of share capital,
authenticated by an interim certificate deposited with the Federal Ministry of Finance and made out
in the name of the Republic of Austria. A total of 347,415,686 shares were in circulation at the
reporting date. With the exception of the voting restriction described under point 2, all shares bear the
same rights and obligations.
2. In accordance with constitutional law, which regulates the ownership structure of companies in the
Austrian electricity sector (Federal Law Gazette I (BGBl) 1998/143(2)) and also forms the basis for the
Company’s Articles of Association, the following voting restriction applies: “With the exception of
regional authorities and companies in which regional authorities hold an interest of at least 51%, the
voting rights of each shareholder at the Annual General Meeting are restricted to 5% of the share
capital.” VERBUND AG
is unaware of any other restrictions that affect voting rights or the transfer of
shares.
3. The shareholder structure of VERBUND AG is largely defined by the majority holding of the Republic
of Austria. In accordance with constitutional law, 51% of the share capital is owned by the Republic of
Austria. A syndicate of the state energy companies Wiener Stadtwerke GmbH and EVN AG owns more
than 25% of the share capital. More than 5% of the share capital is owned by TIWAG-Tiroler
Wasserkraft AG. Less than 20% of the share capital is in free float.
4. There are no shares with special control rights.
5. VERBUND does not offer any employee participation programmes.
6. In accordance with the rules of procedure for the Supervisory Board, the last nomination to the
Executive Board must be prior to the nominee’s 65th birthday. Pursuant to the Austrian Code of
Corporate Governance (ÖCGK), a Nomination Committee has been established within the
Supervisory Board and prepares the content for the appointment of Executive Board members on
behalf of the entire Supervisory Board. VERBUND AG complies with the rules of the Code with
respect to the appointment and dismissal of the members of the Executive Board and the Supervisory
Board. Apart from the above, there are no other regulations not derived directly from law that relate to
the members of the Executive Board and the Supervisory Board, or to the amendment of the Articles
of Association.
GRI 102-25
Shareholder structure %
EVN and Wiener
Stadtwerke syndicate
Free float Republic
of Austria
TIWAG
51
> 25
> 5
< 20
ANNUAL FINANCIAL REPORT - GROUP 119
7. There are no authorisations of the Executive Board within the meaning of Section 243a(1)(7) UGB.
8. The Company is also not involved in any significant agreements that contain provisions referring to
the stipulations under Section 243a(1)(8) UGB. Furthermore, a public takeover bid is improbable
under constitutional law.
9. There are no compensation agreements within the meaning of Section 243a(1)(9) UGB.
The Consolidated Corporate Governance Report, which is included in the VERBUND Integrated Annual
Report 2021, is available on the VERBUND website.
Consolidated Corporate
Governance Report
available at
www.verbund.com >
Investor Relations >
Financial reports
120
Innovation, research and development
KPIs – innovation, research & development (IR&D)
Unit 2019 2020 2021
Number of IR&D projects Number 80 91 127
Total project volume
1
€m 192.6 257.0 266.4
of which EU projects
1
€m 118.2 152.2 103.5
Total VERBUND share
1
€m 58.7 77.6 110.4
Annual VERBUND expenses
2
€m 10.7 9.5 11.3
Annual VERBUND investment
2
€m 6.8 4.1 2.4
1
over the entire duration of the projects //
2
Beginning in 2020, expenses and investments are reported separately and previous years are adjusted.
International agreements on climate change, the European Commission’s Fit for 55 plan, national
strategies and programmes and the commitment of civil society are clear indications that the energy
transition away from fossil fuels to renewable energy sources is in full swing – even in spite of the
continuing COVID-19 crisis.
Research, development and innovation contribute significantly to implementing climate action
projects and initiatives. VERBUND also assumes responsibility in this context and demonstrates this
with its strategic commitment to innovative technologies and business models for decarbonisation.
These efforts are supported by cooperations with universities and research institutes, businesses and
start-ups in Austria and internationally.
Focus on electromobility: green electricity as the basis for climate-friendly mobility
For the latest generation of electric cars, VERBUND is relying on the expansion of a high-performance
charging infrastructure network through its investment in SMATRICS-EnBW. In conjunction with
European partners, a network of charging opportunities is being established along European mobility
corridors. The interoperable network thus provides cross-border mobility services based on electricity
from renewable energy. The high-performance charging network is being built under the Central
European Ultra Charging (CEUC) project – co-funded by the European Commission – in Austria and
with partners in Italy and South-Eastern Europe. The eCharge4Drivers research project is testing and
demonstrating potential applications for intelligent charging services with funds from the European
research programme Horizon 2020. In addition to publicly accessible charging infrastructure,
VERBUND is focusing on innovative charging solutions for private individuals and corporate customers.
This centres on the smart link between energy provision and management using charging solutions in
each respective environment.
Focus on new storage: batteries as the link between generation and consumption
VERBUND relies on innovation and research projects in the field of new storage systems to address the
growing share of volatile renewable energy sources in the power grid and local consumers and to
combine different generation and storage technologies at a regional level.
In the Blue Battery research project successfully implemented in 2020, an industrial-scale battery
storage unit was integrated into an existing hydropower plant with the objective of being able to create a
Frequency Containment Reserve (FCR) which is available within a matter of seconds. The efficiency
GRI EU-DMA,
formerly EU8
SDG 7
SDG 9
SDG 17
SDG 11
ANNUAL FINANCIAL REPORT - GROUP 121
and availability of the power plant will be significantly improved by the corresponding longer useful life
of the turbines.
In the European innovation project SYNERG-E, the focus is on the interface between the energy and
mobility sectors. The electricity infrastructure faces challenges as charging output power rises up to
1 MW for high-performance charging infrastructure. This challenge is being addressed by
implementing local battery storage at electric vehicle charging stations in the SYNERG-E project.
Intelligent management of batteries and the charging processes at the respective site makes it possible
to balance out the load peaks generated by the charging process for electric cars. In addition, the
stationary battery storage is bundled virtually in order to provide grid services. A total of nine high-
performance charging sites in Austria and Germany will be equipped with local battery storage in this
project funded by the European Commission.
Working together with partners, VERBUND is prioritising green hydrogen
with the goal of further advancing decarbonisation of the industrial and
mobility sectors.
Focus on green hydrogen: a game changer in the energy sector
Working together with partners, VERBUND is prioritising green hydrogen with the goal of further
advancing decarbonisation of the industrial and mobility sectors.
Launched in 2017, the H2FUTURE project, co-funded by the Fuel Cells and Hydrogen Joint
Undertaking (FCH JU), implemented a proton exchange membrane (PEM) electrolyser with a capacity
of 6 MW together with research project partners. The demonstration facility first produced green
hydrogen in 2019. Numerous potential applications were subsequently demonstrated with the plant.
One of these was the provision of grid services by the plant. In addition, tests were conducted to
maximise hydrogen production. Green hydrogen is produced primarily for use in steelmaking. The
H2FUTURE research project was ultimately successfully completed at the end of 2021 and the findings
it generated were then incorporated into subsequent projects.
At a national level, VERBUND is a partner of WIVA Power & Gas, the hydrogen initiative of the
Austrian model region, subsidised by the Austrian Climate and Energy Fund. The focus of the WIVA
projects in which VERBUND is involved is on production and use of green hydrogen in industrial
companies or for storage in storage facilities. Under the WIVA project H2Pioneer, VERBUND is
coordinating a research project aimed at the utilisation of green hydrogen in the semiconductor industry.
In the Carbon to Product Austria (C2PAT) innovation project, VERBUND is collaborating with
partners from the industrial sector – Lafarge, Borealis and OMV – to test the use of green hydrogen in a
circular economy project.
VERBUND is setting another focus in new hydrogen technologies with the HOTFLEX project. In this
project, a new hydrogen technology is being tested at VERBUND’s Mellach site together with partners
from research and industry and with the support of the Austrian research funding agency
Österreichische Forschungsförderungsgesellschaft (FFG) and the Fuel Cells and Hydrogen Joint
122
Undertaking (FCH JU). The high-temperature electrolysis/fuel cell system with rated power of 150 kW is
the core of the research plant.
The cooperation with Zillertaler Verkehrsbetriebe is focused on the use of hydrogen in the
transportation sector. In late 2023, the narrow-gauge railway in the Zillertal Valley is scheduled to begin
trial operation powered by hydrogen. The green hydrogen to be used for this will be produced with
renewable electricity from VERBUND’s power plants in the Zillertal Valley.
In the Green Hydrogen@Blue Danube innovation project, VERBUND is taking a major step towards
bringing the hydrogen activities to the international stage. The goal is to work with international
partners in establishing a European hydrogen value chain reaching from the production using
renewable energy sources, through transport, to the buyers. In 2021, the project’s implementation focus
was on developing regional hydrogen hubs together with customers. In the course of this, VERBUND is
participating in the ongoing IPCEI (Important Projects of Common European Interest) process and is
networking with hydrogen initiatives in Europe.
Focus on biodiversity: fish passes ensure habitat connectivity at run-of-river power plants
Working together with partners, valuable habitats were connected to each other at VERBUND’s
Altenwörth and Greifenstein power plants on the Danube River as part of the LIFE Network Danube
Plus project, safeguarding accessibility for migrating fish and water organisms and creating new
habitats in the Krems and Kamp rivers.
Lower Austria’s longest fish pass at more than 12.5 km in length has been constructed in Altenwörth.
The fish pass connects restoration projects on the Danube and its tributaries, thereby fostering the
biodiversity in the Danube. A total of 575,000 m
3
of gravel and fine sediment was relocated during the
work. The excavated material was used locally near the river’s old course.
In addition to the fish pass, as a power plant operator VERBUND is working with the market
municipality of Kirchberg am Wagram to improve the bathing quality of the old course of the Danube at
Altenwörth. An artificial biotope was constructed on the left bank of the old course in order to filter out
and reduce the excess quantity of nutrients. This is intended to reduce the growth of algae to a natural
level.
During construction of the Greifenstein power plant, the water balance of the neighbouring
floodplain was secured by means of a system of artificial reservoirs. Today, this system of channels is a
protected area with an abundance of typical plants and animals. With a total of four fish passes, the
channel system is now accessible for fish and the Schmida and Göllersbach rivers have been
reconnected to the Danube.
SDG 15
ANNUAL FINANCIAL REPORT - GROUP 123
Focus on new renewables: intelligent management of wind and solar farms
VERBUND is focused on new renewables and specifically on solar and wind power. As part of this,
research and development projects addressing preventative maintenance and intelligent plant
management are being implemented.
The objective of the Smart Operation of Wind Turbines under Icing Conditions (SOWINDIC) research
project is the significant reduction of unplanned ice-related production losses and balancing energy
volumes through research into a completely new and innovative operation method for heating the rotor
blades of wind turbines. Sponsored through the sixth tender of the Austrian Climate and Energy Fund’s
energy research programme, the project will extend over 36 months. Project partners of the research
project comprise the Austrian Institute of Technology (AIT), the University of Vienna’s Institute of
Mathematics and its Data Science@Uni Vienna research platform, along with Meteotest AG.
The database information system (DBIS) project aims to develop a scalable IT platform solution for
automated monitoring of all VERBUND Green Power wind and solar farms currently in operation. In
this project, the highest degree of process automation was developed for the data stream including an
innovative method which was developed in house for processing data related to the individual assets
encompassing validated final reports and completed maintenance assignments. In this way, DBIS
contributes to the efficient operation and maintenance of VERBUND Green Power’s plants. The project
entered the implementation phase in 2021. It is expected to go live in May 2022.
One of the first single-axis tracking photovoltaic demonstration systems was realised in the megawatt
range in the project entitled “Single-axis tracking photovoltaic installation (Mitterkirchen)”. The
objective of the project is to optimise the use of space at VERBUND Hydropower’s Wallsee/
Mitterkirchen power plant site. Besides optimising the use of space, the project also focuses on cost
effectiveness, the impact of mechanical moving components on maintenance work and future uses of
solar applications in the agricultural sector.
Focus on digitalisation: Digital Hydro Power Plant – hydropower 4.0
In view of the promising options for further digitalisation in the field of hydropower, the Digital Hydro
Power Plant project aims to systematically develop and evaluate digital testing systems in practical
application at the Rabenstein pilot plant. The range of topics extends from platform solutions for a
multitude of areas, smart sensor designs, mobile assistance systems, artificial intelligence, digital twins,
drones and 3D printing to innovative inspection devices. Digital solutions will contribute to further
improvements in operations and the maintenance of hydropower plants, the transfer and broadening of
expert knowledge, and personal and plant safety. Initial solutions are already being used outside of the
pilot power plant. The diverse solutions developed by VERBUND in the Digital Hydro Power Plant
project were presented in the course of an event attended by international experts in 2021.
Innovations in the power grid: Vertical Market Integration
As the control area manager, Austrian Power Grid (APG) is responsible to keep consumption of
electrical energy in balance with generation at any given moment in Austria. In order to achieve the
target anchored in the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz, EAG) of
generating all electricity from renewable energy sources by 2030 (national balance), the share of volatile
generation facilities is being greatly increased. To maintain the balance between generation and
consumption in the future as well, comprehensive utilisation of existing and new flexibility options is
essential.
124
In the project Vertical Market Integration, APG is working with its implementation partner EQUIGY
to facilitate low-threshold, standardised, transparent and non-discriminatory integration of flexibility
services into the automatic frequency restoration reserves. By using the EQUIGY ecosystems, existing
functionalities can be accessed and new developments will follow an internationally standardised
format. This streamlines consistent market access for flexibility providers in several countries, helping
to bring new providers to the market more efficiently. Furthermore, since multiple grid operators
cooperate for development, costs are kept low for the market and subsequently also for consumers.
This innovative integration model for automatic frequency restoration reserves is also expected to
serve as a basis for other applications in future such as congestion management. Meanwhile, a concept
for comprehensive utilisation of flexibility services is currently being developed with industry partners.
A first draft of this joint model will be coordinated with regulatory authorities in 2021.
ABS for the power grid (ABS4TSO)
Large rotating msses of turbines and generators in hydropower plants and thermal plants creates inertia
in the power grid, which counters sudden changes in grid frequency. Due to the rapidly growing share
of inverter-based feed-in from wind and solar farms without that inherent inertia, new services are
required to stabilise grid frequency.
A joint effort between the Vienna University of Technology (TU), the Austrian Institute of Technology
(AIT) and VERBUND developed a 1 MW/500 kWh battery storage system for this purpose which is
capable of providing highly dynamic system services with specific parameterisation options for the
inverter. The field test in APG’s substation in southeast Vienna began in 2021 following in-depth
functional testing in the AIT laboratory.
BVLOS drone flights for rapid incident inspections
From time to time, high and ultra-high voltage lines have to be temporarily shut down due to critical
incidents. Lines must be inspected for damage or foreign objects before being put back into operation.
Long-distance drones equipped with high-resolution cameras can be automated to fly along the
routes and inspect lines beyond the visual line of sight (BVLOS) of a pilot. Collected images are
provided to experts for examination. In the future, routine inspections can be assisted by this approach
as well.
In cooperation with SmartDigital, APG conducted two automated drone flights along 100 km of 380-
kV high voltage lines in 2021. The flight was able to be tracked from the operation centre using live view
and live radar technology. Trials for a future night flight were also conducted.
ANNUAL FINANCIAL REPORT - GROUP 125
Outlook
According to the International Monetary Fund (IMF), the global economy showed a strong recovery
in 2021 with growth of around 5.9% despite the ongoing COVID-19 pandemic. The IMF likewise
forecasts strong growth for 2022 of 4.4%, which is also significantly above the growth rates for 2018 and
2019. Because of the difficulty of forecasting the further progression of the pandemic and the challenges
from supply chain problems combined with high commodity prices and the associated higher inflation
rates, these strong growth rates are also to be considered with a high degree of uncertainty.
In 2021, the economy (+4.1%) and the labour market recovered significantly in Austria as well, and the
Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO) expects
even stronger growth in 2022 at +5.2%, although the uncertainty referenced above applies here, too.
Along with the economic recovery and slower growth in supplies, commodity prices rose
significantly. This particularly impacted the price of gas with an increase of +390% over the previous
year. Average carbon prices for 2021 doubled compared with the previous year due to the EU’s more
stringent climate targets, the economic recovery and higher carbon emissions as a result of the sharp
rise in coal-fired electricity generation. These trends were reflected in significant price increases on
both the spot and futures markets.
The planned expansion of volatile new renewables generation is making VERBUND’s generation
portfolio in the core markets more significant. Base load power plants (run-of-river hydropower),
flexibly accessible storage and pumped storage power plants and a highly efficient combined cycle gas
turbine power plant (Mellach CCGT), which serves as a bridge technology for maintaining domestic
security of supply, are helping to make it possible to expand new renewables and to support the target
of 100% renewable energy by 2030. VERBUND also plays a role in achieving the target of carbon-free
electricity generation through organic and inorganic growth in new renewables in new markets. APG,
VERBUND’s wholly owned subsidiary, owns and operates the transmission network in Austria and
therefore plays a major role in connection with grid security in Austria and in the European electricity
network. Gas Connect Austria GmbH (GCA), in which VERBUND has held a 51% stake since 31 May
2021, is an independent Austrian gas transmission and distribution system operator and, as such, plays
a key role in the Austrian and Central European energy supply. As an integrated energy company,
VERBUND’s innovative products and services provide consumers with solutions for the future of
energy.
126
Investment plan 2022–2024
VERBUND’s updated investment plan for the period 2022–2024 provides for capital expenditure in the
amount of €3,059m. Of that total, around €2,075m will be spent on growth CAPEX and around €985m on
maintenance CAPEX. Most of the growth CAPEX (approximately €831m) will go towards expanding the
regulated Austrian high-voltage grid. In addition, VERBUND will be investing mainly in projects related
to new renewables, in selected hydropower plant projects as well as in increasing the efficiency of
existing power plants. The investments will mostly involve VERBUND’s domestic markets of Austria and
Germany. In financial year 2022, VERBUND plans to invest a total of approximately €877m, around
€507m of which will be invested in growth and around €370m in maintenance.
Dividend
VERBUND plans to distribute a dividend of €1.05 per share for financial year 2021. The payout ratio for
2021 will thus amount to 45.7% based on the adjusted Group result.
Earnings projection for 2022
VERBUND’s earnings performance is significantly influenced by the following factors: wholesale prices
for electricity, the Group’s own generation from hydropower and wind power, the contribution to
earnings from flexibility products and ongoing developments in the energy market. Around 69% of the
planned own generation for 2022 was already contracted as at 31 December 2021. The price obtained
for this was approximately €24.2/MWh above the sales price achieved in 2021.
Given the still precarious COVID-19 situation in many countries, geopolitical uncertainties and high
volatility in the key factors influencing VERBUND’s results, the outlook remains highly uncertain.
SDG 8
877
1,142
1,041
22E 23E 24E
Investment plan €m
24E
ANNUAL FINANCIAL REPORT - GROUP 127
Events after the reporting date
On 20 January 2022, the Austrian National Council approved the eco-social tax reform in its third
reading. Corporate income tax will be lowered from 25% at present to 24% beginning in 2023 and to 23%
beginning in 2024. The revaluation of deferred tax necessitated by these changes will result in income of
approximately €60m which is not taken into account in these financial statements.
Vienna, 17 February 2022
Executive Board
Michael Strugl
Chairman of the Executive Board
of VERBUND AG
Peter F. Kollmann
CFO, member of the Executive Board
of VERBUND AG
Achim Kaspar
Member of the Executive Board
of VERBUND AG
Report on non-financial information
(NFI Report)
ANNUAL FINANCIAL REPORT - GROUP 129
VERBUND takes its social responsibility as Austria’s leading utility and an important player in the
European electricity market very seriously. Back in 1994, VERBUND was one of the first companies in
Austria to prepare an environmental report, thus pre-empting the trend towards reporting on
environmental factors. That annual publication was followed in 2002 by VERBUND’s first sustainability
report. From then until 2014, a sustainability report was published annually as a supplement to the
annual report. Since 2015, VERBUND has published an integrated annual report in response to the
rising demand from different groups of stakeholders for comprehensive company information. The
annual sustainability report is now included in VERBUND’s integrated annual report.
The Austrian Sustainability and Diversity Improvement Act (Nachhaltigkeits- und Diversitäts-
verbesserungsgesetz, NaDiVeG), which entered into force on 6 December 2016, stipulates that large
public interest entities must publish non-financial information starting in financial year 2017.
VERBUND uses the Global Reporting Initiative (GRI) for this purpose. Consequently, the present report
was also prepared in accordance with the GRI Standards as well as the G4 Sector Disclosures for
“Electric Utilities”, Core option.
Starting in 2022, VERBUND is also required to disclose information on environmentally sustainable
revenues, capital expenditures (CAPEX) and operational expenditures (OPEX) pursuant to the
EU Taxonomy Regulation for financial year 2021. This reporting requirement is complied with through
the Materiality section of the Non-Financial Report.
This report covers the activities of all of the companies included in the Group’s consolidated financial
statements. Significant events occurring at unconsolidated companies are also reported to provide a
complete picture of the Group. The reporting period comprises the 2021 calendar year.
Sustainability information has been subjected to an external review in the scope specified by the
Independent Assurance. The GRI and TCFD Index indicate where information on sustainability at
VERBUND can be found. As provided for in the GRI guidelines, we have refrained from including
information on topics of minor relevance in this Integrated Annual Report. Supplementary information
on sustainability topics is available in our Disclosures on Management Approach (DMA) document and
on the VERBUND website.
VERBUND’s business model
VERBUND is one of the largest producers of hydroelectricity in Europe and makes a significant
contribution to maintaining security of supply in Austria. Its value chain comprises the generation,
transportation, trading and sale of electrical energy and other energy sources as well as the provision of
energy services. VERBUND’s sustainable business model revolves around the generation of carbon-free
electricity from hydropower, wind power and solar power, as well as the electricity and gas grid. Details
are provided in the segment reporting on the Hydro and Renewable generation segments. The segment
reporting on the Grid segment also contains key information on sustainability. All ongoing projects and
current events from financial year 2021 are presented here in a condensed format and supplemented by
information on selected activities relating to the environment and society. For further details and
background information, please refer to the additional sources referenced in the margins.
Since VERBUND operates in Europe, we regard Europe as a single region/regulatory regime.
VERBUND’s main business sites are located in Austria and Germany. Maps of the power plant sites and
grid facilities are provided at the end of this report.
Report on non-financial information
GRI 102-52
in accordance with Section 267a of the Austrian Commercial Code (UGB)
GRI 102-54
GRI 102-45
GRI 102-50
GRI 102-56
Further information is
available at
www.verbund.com >
About VERBUND >
Responsibility >
Non-financial
Information
GRI
102-2
GRI 102-4
GRI 102-6
130
Materiality
Materiality analysis
VERBUND conducted a comprehensive update to the materiality analysis in 2019. The goal was to
identify the opinions and expectations of the different stakeholder groups in Austria and Germany and
to use this information to derive material topics for VERBUND’s operations.
In 2021, due to the acquisition of Gas Connect Austria (GCA), VERBUND’s material topics were
reconciled and reviewed in comparison with those of GCA. This reconciliation and review process was
conducted in externally facilitated workshops with experts from VERBUND and GCA. The workshops
evaluated 15 topics from the areas of the environment, the economy, social and governance from the
stakeholder perspective and based on their social and environmental impact. CGA’s material topics
identified in this way were then reconciled and reviewed alongside VERBUND’s material topics. The
workshop results showed that CGA’s material topics correspond to VERBUND’s. Particularly important
for both companies are the topics of security of supply, occupational safety, innovation, compliance and
transparency.
The material topics were adapted for the 2019 stakeholder survey to account for new international
requirements from investors and sustainability ratings, trends and technologies, and were expanded
from twelve to 20 topics. The 20 topics identified were assigned to four areas: environment and energy,
economics, social and governance.
ENVIRONMENT AND
ENERGY ECONOMICS SOCIAL GOVERNANCE
Waste and waste water Information security and
data protection
Occupational health and
safety
Compliance and
transparency
Biodiversity Innovation Attractive employer Corporate governance
Renewable energy Customer relations Diversity and inclusion Stakeholder engagement
Climate change Security of supply Commitment to society International commitment
Resource and energy
consumption
Increasing enterprise
value
Sustainable supply chain
Human rights
The analysis was conducted in two stages (a quantitative survey and qualitative interviews). The
assessment of the economic, environmental and social impact was deliberately excluded from the
survey and is not included in the materiality matrix. From VERBUND’s perspective, it serves no purpose
to mix the topics of “stakeholder interests” and “impact”, as they are based on different assessment
criteria. The added value is greater with separate reporting of the material topics and stakeholder
interests in the materiality matrix and the measured impacts in the “Impact of activity” section. This
reduces the complexity of the topic and takes its high relevance into account.
GRI 102-46
GRI 102-49
GRI 102-47
ANNUAL FINANCIAL REPORT - GROUP 131
The quantitative survey was conducted by means of a questionnaire querying the expectations of the
stakeholder groups in relation to the 20 material topics. Both internal (employees, Works Council,
Supervisory Board) and external stakeholders (corporate customers, representatives of industry and
professional associations, neighbouring communities, suppliers, science and research, politics and
public authorities, capital market, media) had the opportunity to complete the questionnaire. The
survey collected responses from 255 people to questions about VERBUND’s current performance level
in respect of the material topics and on the future need for action by VERBUND concerning these
topics.
The qualitative survey was conducted in the form of personal in-depth interviews with
46 representatives from all internal and external stakeholder groups. This format made it possible to
collect responses on a more granular level and in particular to gauge the individual understanding of
each topic. The interview contents covered, among other things, general knowledge about VERBUND’s
activities in the field of sustainability with a focus on social and environmental aspects, as well as
VERBUND’s role in achieving Austria’s climate goals.
The chart below summarises the results of the survey. It shows VERBUND’s current performance
level compared to the future need for action from the stakeholders’ point of view. The further out a topic
is mapped, the better it is already being handled or the more important it is for the future. The chart
shows that all of the topics offer potential for the future. From the stakeholders’ perspective, special
focus should be placed on the topics of renewable energy, climate change, innovation, security of
supply, attractive employer, compliance and transparency.
GRI 102-43
SDG 4
SDG 7
SDG 9
SDG 13
SDG 15
SDG 16
132
Specifically, stakeholders would like to see more investment in the expansion of new renewable
energy sources (particularly solar and wind), innovative cooperation projects to develop new storage
technologies (e.g. hydrogen), as well as a decentralised supply of electricity, including digital solutions.
In addition, they still expect the security of supply to be maintained and hope that VERBUND will
increase its commitment to society and take steps to create more awareness for the topic of
sustainability. In order to be fit for the future, VERBUND should also continue working to become an
attractive, dynamic and modern employer. The stakeholders consider VERBUND to be an important
pioneer company in the fight against climate change, one that is capable of making a key contribution to
achieving the climate targets. VERBUND can achieve these things mainly because of its position at the
vanguard in the area of sustainability and because of its environmentally friendly and safe
implementation of services in the field of renewable energy.
Shown below are the material topics for VERBUND and the SDGs and GRI disclosures assigned to
them. All material topics are relevant within the organisation.
GRI 102-44
SDG 4
SDG 9
SDG 13
SDG 15
SDG 17
GRI 102-47
ANNUAL FINANCIAL REPORT - GROUP 133
MATERIAL TOPIC AT
VERBUND/SDG
GRI STANDARDS
SECTOR
SUPPLEMENTS
ADDITIONAL
INFORMATION
Environment and
energy
Waste and waste water
(SDG 6)
GRI 303: Water and Effluents
GRI 306: Waste
Biodiversity
(SDG 15)
GRI 304: Biodiversity Number of fish passes
Renewable energy
(SDG 7, SDG 13)
GRI 201: Economic Performance
Expansion and efficiency
improvement of
hydropower, wind power
and solar power
Climate change
(SDG 13)
GRI 305: Emissions EU5 Emissions avoided through
generation from renewable
energy sources
Resource and energy
consumption
(SDG 7, SDG 12)
GRI 301: Materials
GRI 302: Energy
GRI 303: Water and Effluents
Percentage of sites certified
to ISO 14001/EMAS
Economics
Information security and
data protection
GRI 418: Customer Privacy
Innovation
(SDG 7, SDG 9, SDG 11,
SDG 17)
Innovation, Research and
Development
EU DMA,
formerly EU8
Number of R&D projects,
VERBUND’s annual expense
Customer relations
(SDG 12)
GRI 102: Stakeholder Engagement EU3, EU27
Security of supply
(SDG 7, SDG 9, SDG 12)
EU1, EU2, EU4,
EU10, EU28,
EU29, EU30
Risk and crisis management
Increasing enterprise
value
(SDG 7, SDG 8)
GRI 201: Economic Performance
GRI 203: Indirect Economic
Impacts
EU10, EU11,
EU21
Financial governance
Social
Occupational health and
safety
(SDG 3)
GRI 403: Occupational Health and
Safety
Attractive employer
(SDG 4, SDG 8)
GRI 102: Organisational Profile
GRI 201: Economic Performance
GRI 401: Employment
GRI 402: Labour/Management
Relations
Percentage of university
graduates, employee survey
Diversity and inclusion
(SDG 5, SDG 10)
GRI 405: Diversity and
Equal Opportunity
1
134
MATERIAL TOPIC AT
VERBUND/SDG
GRI STANDARDS
SECTOR
SUPPLEMENTS
ADDITIONAL
INFORMATION
Commitment to society
(SDG 1, SDG 4, SDG 11)
GRI 203: Infrastructure Investments
and Services Supported
VERBUND Empowerment
Fund run by Diakonie
VERBUND Electricity Relief
Fund run by Caritas
VERBUND Climate School,
VERBUND Electricity School
Sustainable supply chain
(SDG 12)
GRI 204: Procurement Practices
GRI 308: Supplier Environmental
Assessment
GRI 414: Supplier Social
Assessment
EU18
Governance
Compliance and
transparency
(SDG 16)
GRI 205: Anti-corruption
GRI 206: Anti-competitive
Behaviour
GRI 307: Environmental
Compliance
GRI 406: Non-discrimination
GRI 415: Public Policy
GRI 419: Socioeconomic
Compliance
Corporate governance
(SDG 16)
GRI 102: Statement from Senior
Decision-makers
GRI 405: Diversity and Equal
Opportunity
Stakeholder engagement
(SDG 12, SDG 17)
GRI 413: Local Communities
GRI 102: Stakeholder Engagement
International
commitment
(SDG 17)
Sustainable Development
Goals, UN Global Compact
Human rights
(SDG 16)
GRI 414: Supplier Social
Assessment
Group policy on human rights,
commitment to the UN Global
Compact
1
report on information about wage equality only in the year in which the two-year income report was released
Impact of activity
VERBUND is committed to the precautionary principle aimed at preventing or mitigating possible risks
to the environment and the health of people, animals and plants.
The tables below provide an overview of the significant impact of the activity of VERBUND as well as
of how the related risks are managed within the meaning of the Austrian Sustainability and Diversity
Improvement Act (NaDiVeG). VERBUND’s material topics have been assigned to the following five
categories: environmental matters, social matters, employee matters, respect for human rights, anti-
corruption and bribery matters. The most significant impacts, risks and opportunities are regularly
assessed by VERBUND’s sustainability team (at least every two years). The findings of the assessment
are reported to the Corporate Responsibility Committee. More detailed information can be found in the
GRI 102-11
GRI 102-15
For more information,
please refer to the
section entitled
Opportunity and risk
management
TCFD
ANNUAL FINANCIAL REPORT - GROUP 135
sections entitled Environmental performance, Human resources, Stakeholder engagement and social
responsibility, Human rights, Occupational health and safety, and Supply chain.
Environmental matters: Waste and waste water, biodiversity, renewable energy, climate change,
resource and energy consumption
Impact of activity Significant environmental impact under normal operations, principally due to the
effect of hydropower plants on habitats in relation to river morphology and
biodiversity and the effect of thermal power plants in relation to airborne emissions.
Significant risks Under normal operations, no significant risks to the plants with potentially negative
effects for the environment; the likelihood that these risks will arise is minimised by
operating the facilities in compliance with the laws.
Management of the risks Certified environmental management systems; for extreme events (severe flooding,
earthquakes, etc.) there are specific contingency plans and a crisis management
team.
Social matters:
Security of supply, increase in enterprise value, customer relations,
innovation, information security and data protection, stakeholder
engagement, commitment to society, international commitment
Impact of activity System security in the Austrian transmission network; direct economic value
generated and distributed (wages and salaries, taxes, dividends, interest, capital
expenditure); safe, affordable products and services for customers; consideration of
concerns of stakeholders; long-term participation in social and education-related
activities.
Significant risks Failure of critical infrastructure; risks involving information security, cyber security and
data protection.
Management of the risks Group-wide organisational structures for opportunity and risk management as well as
crisis management; implementation and refinement of Group-wide information
security and data protection management systems (ISMS, DPMS).
Employee-related matters: Occupational health and safety, attractive employer, diversity and inclusion
Impact of activity Performance-based, productive corporate actions for securing the core business over
the long term and exploiting new business opportunities with the goal of
safeguarding and ideally creating skilled employment.
Significant risks
Risks can be minimised through extensive personnel management and continuous
further development of the high safety standards as well as through the development
of socially acceptable solutions (in the case of job cuts) in conjunction with the
employee representatives.
Management of the risks Group-wide management systems for occupational safety and occupational health
management; incorporation of the employee representatives; personnel development;
diversity strategy and concept; Gender Balance project; demographic and knowledge
management; employer branding.
136
Respect for human rights: Human rights, sustainable supply chain, occupational health and safety,
diversity and inclusion
Impact of activity As a signatory to the UN Global Compact, VERBUND exercises a positive influence
on its business partners in and outside Austria and on its employees.
Significant risks
The aspects of equal opportunity and freedom of association have been identified as
human rights issues in the direct sphere of influence; there are no significant risks
here.
Consulting activities in emerging markets give rise to a risk of human rights being
violated by third parties. Risks in the upstream supply chain cannot be entirely ruled
out, which is why due diligence must be exercised in procurement.
Management of the risks Code of Conduct prescribes equal opportunity; sanctions will be imposed for
violations of the Code of Conduct; diversity management encourages equal
opportunities for all people; workplace training sessions on the corporate values will
be provided; hot spot analysis of the supply chain; regular evaluation of corporate
policies, Group policy on human rights and instructions for Procurement; Supplier
Code of Conduct as integral part of contract; review of the integrity of business
partners prior to collaboration on projects.
Anti-corruption and
bribery matters:
Compliance and transparency, corporate governance
Impact of activity Use of fair business practices has a positive impact on society.
Significant risks The annual Group-wide compliance risk survey collects information on significant
corruption risks.
Management of the risks Group-wide management system for compliance and Group-wide opportunity and
risk management, reviews of the integrity of business partners, compliance training.
Disclosures pursuant to Art. 8 of the EU Taxonomy Regulation
Based on this Regulation and the previously published delegated act, VERBUND evaluated which of the
Group’s activities are associated with economic activities that qualify as environmentally sustainable
economic activities. In a first step, the activities listed in the Regulation and classified as essentially
taxonomy-eligible were identified. Taxonomy eligibility means that these economic activities may make
a substantial contribution to at least one of the six EU environmental objectives if they meet defined
criteria, although such criteria have only been published for the first two EU environmental objectives:
climate change mitigation and climate change adaptation. The other EU environmental objectives
relate to the topics of sustainable use and protection of water and marine resources, transition to a
circular economy, pollution prevention and control, and protection and restoration of biodiversity and
ecosystems. Based on the evaluation carried out, these include the following VERBUND activities:
• Electricity generation using solar photovoltaic technology;
• Electricity generation from wind power;
• Electricity generation from hydropower;
• Transmission and distribution of electricity;
• Storage of electricity; and
• Transmission and distribution networks for renewable and low-carbon gases
The aforementioned activities may potentially contribute substantially to both the EU environmental
objective of climate change mitigation and the EU environmental objective of climate change
adaptation. For VERBUND, fighting climate change through the energy transition is paramount, which
For a brief description of
the activities,
see section entitled
VERBUND at a glance
ANNUAL FINANCIAL REPORT - GROUP 137
is why these activities are allocated to the EU environmental objective of climate change mitigation.
This avoids double-counting of the reported contributions.
VERBUND is required to disclose the proportion of its total revenue, capital expenditures (capex) and
operational expenditures (OPEX) associated with activities included in the taxonomy for financial
year 2021. From financial year 2022, the share of taxonomy-aligned activities that fully meet the
technical, environmental and social criteria of the Regulation and the delegated acts is also to be
reported.
Information on taxonomy-eligible revenue
Group revenue has been allocated to the individual economic activities:
•
The revenue of the Hydro segment has been allocated to the economic activities “electricity
generation from hydropower” (run-of-river power plants and daily and weekly storage facilities that
are not pumped storage power plants) and “storage of electricity” (pumped storage power plants).
• The revenue of the New renewables segment has been allocated per production technology to the
economic activities “electricity generation using solar photovoltaic technology” and “electricity
generation from wind power”.
• The revenue from the Grid segment has been allocated to the economic activities “transmission and
distribution of electricity” (APG’s power grid) and “transmission and distribution networks for
renewable and low-carbon gases” (GCA’s gas grid).
• To avoid double-counting, revenue from the Sales segment (electricity trading and sales) has not been
taken into account. Excluded from this are activities related to battery storage systems, which have
been allocated to the economic activity “storage of electricity”.
Revenue is defined in accordance with the definition under IFRS 15.
138
Revenue – taxonomy-eligible activities for the EU environmental objective of
climate change mitigation
Unit 2021 Relative share
Electricity generation using solar photovoltaic technology €m 0.1 0.0%
Electricity generation from wind power €m 125.4 2.6%
Electricity generation from hydropower €m 1,068.6 22.4%
Transmission and distribution of electricity (E) €m 1,086.3 22.7%
Storage of electricity (E) €m 288.5 6.0%
Transmission and distribution networks for renewable and
low-carbon gases €m 129.1 2.7%
Total taxonomy-eligible activities €m 2,698.1 56.5%
Total taxonomy non-eligible activities €m 2,078.6 43.5%
Total €m 4,776.6 100.0%
E = enabling activity
The largest share of taxonomy-eligible revenue comes from the Hydro segment (relates to the
categories of electricity generation from hydropower and storage of electricity), followed by the Grid
segment.
Information on taxonomy-eligible capital expenditures (CAPEX)
The allocation of capital expenditures to economic activities is consistent with that for revenue. The
capital expenditures are part of VERBUND’s multi-year investment plan, which was approved by the
Group’s Supervisory Board.
The definition of capital expenditures conforms to the definitions provided in IAS 16 and IAS 38.
CAPEX – taxonomy-eligible activities for the EU environmental objective of
climate change mitigation
Unit 2021 Relative share
Electricity generation using solar photovoltaic technology €m 114.4 14.0%
Electricity generation from wind power €m 0.2 0.0%
Electricity generation from hydropower €m 168.4 20.6%
Transmission and distribution of electricity (E) €m 338.6 41.3%
Storage of electricity (E) €m 133.0 16.2%
Transmission and distribution networks for renewable and
low-carbon gases €m 38.7 4.7%
Total taxonomy-eligible activities €m 793.3 96.8%
Total taxonomy non-eligible activities €m 25.9 3.2%
Total €m 819.2 100.0%
E = enabling activity
The main share of the taxonomy-eligible CAPEX stems from the Grid segment, followed by the Hydro
segment. The investments relate to expansion and maintenance CAPEX.
For information on the
investment plan please
refer to the Outlook
section
ANNUAL FINANCIAL REPORT - GROUP 139
Companies that have issued environmentally sustainable bonds or debt securities to finance certain
defined taxonomy-aligned activities must also publish the CAPEX KPI, which has been adjusted for
taxonomy-aligned capital expenditures financed with these bonds or debt securities. Due to the
transitional provision for financial year 2021, this share shall only be reported by VERBUND from
financial year 2022.
Information on taxonomy-eligible operational expenditures (OPEX)
The allocation of operational expenditures to economic activities is consistent with that for revenue and
capital expenditures.
In accordance with the Regulation, only specific types of operational expenditures may be taken into
consideration. These include maintenance expenses as well as directly attributable research and
development expenses that do not constitute capital expenditures. Overhead costs may not be taken
into consideration. Maintenance expenses are by far the largest attributable operational expenditures
incurred in the operation of power plants and grids, and these have been included in the calculation of
the KPI. The allocation of other taxonomy-eligible operational expenditures to individual economic
activities requires additional analysis and evaluation instruments in the accounting systems that are
currently being developed.
The definition of operational expenditures conforms to the definitions provided in IAS 16 and IAS 38.
OPEX – taxonomy-eligible activities for the EU environmental objective of
climate change mitigation
Unit 2021 Relative share
Electricity generation using solar photovoltaic technology €m 0.1 0.1%
Electricity generation from wind power €m 5.6 5.4%
Electricity generation from hydropower €m 45.6 43.4%
Transmission and distribution of electricity (E) €m 22.7 21.6%
Storage of electricity (E) €m 16.9 16.1%
Transmission and distribution networks for renewable and
low-carbon gases €m 6.8 6.5%
Total taxonomy-eligible activities €m 97.7 93.1%
Total taxonomy non-eligible activities €m 7.3 6.9%
Total €m 104.9 100%
E = enabling activity
The largest share of the taxonomy-eligible OPEX comes from the Hydro segment, followed by the Grid
segment.
Sustainable topics and projects in 2021
Code of Conduct for Sustainable Business
In 2021, the VERBUND Code of Conduct and the sustainability mission statement were
comprehensively updated and revised. Among other things, this took into account the increased
interest of external stakeholders and internal developments, e.g. VERBUND’s 2030 strategy, the
For further information
on green finance please
refer to the Financing
section
140
updating of the 2019 stakeholder survey and the implementation of the Supplier Code of Conduct. The
inter-disciplinary project team recognised the numerous synergies between the existing Code of
Conduct and the sustainability mission statement. An innovative approach was therefore selected and
the two documents were combined to form the new “Code of Conduct for Sustainable Business”. The
Code covers the following action areas: our ethical corporate governance, our commitment to the
climate and environmental, our way of working, our economic responsibility and our contribution to
society. With a clearly defined channel for submitting reports and reporting violations of the rules, and
including specific practical examples, it serves the Group, the Executive Board, the management and
the employees as a set of guidelines for responsible conduct. Sustainability and responsible conduct
towards society, the environment and the economy go hand in hand.
Sustainable supplier assessment
VERBUND is conscious of its responsibility within the supply chain, which is why we are working
intensively on this topic. As the next step in the further development of its sustainable supplier
management system, VERBUND has therefore been working since 2021 on the implementation of a new
rating system for assessing the sustainability performance of suppliers. To this end, VERBUND is
working with an external provider whose ESG ratings are to be used for the sustainability assessment in
future. Rollout will initially be to VERBUND’s top 100 suppliers. In the medium term, additional
strategic supplier groups will be included using a risk-based approach.
Climate Impact Day
In 2021, VERBUND took part in Climate Impact Day (CID), which was organised for the first time by
start-up company Glacier. The aim of this day is to promote the topic of sustainability and to raise
awareness for climate change mitigation both in the community and within the Group. VERBUND also
organised a day for its employees dedicated to climate change and its mitigation. This gave employees
an opportunity to learn about VERBUND’s solutions for mitigating climate change, such as e-mobility
and solar power, and about the topic of climate change risks, and to test their knowledge in a quiz and a
game of climate bingo.
Definition of report content
Based on the material topics relating to sustainability that have been defined with the help of relevant
stakeholder groups and supplemented by the topics discussed in the public arena through the media,
once per year VERBUND compiles the non-financial content to be reported in the integrated annual
report. VERBUND also reviews the completeness of the topic selection based on the issues and standard
disclosures specified in the Sustainability and Diversity Improvement Act (NaDiVeG) and the
GRI Standards.
GRI 102-46
ANNUAL FINANCIAL REPORT - GROUP 141
Stakeholder engagement and social responsibility
VERBUND’s corporate success is based on its good relationships with its customers, employees,
neighbours, business partners and owners, as well as with political stakeholders, public authorities,
interest groups and NGOs.
VERBUND strives to achieve regular engagement with all relevant stakeholder groups. In doing so,
VERBUND supplies information via various channels on developments in energy and climate policy,
engages in discourse on current and future challenges in the energy market and proposes constructive
solutions.
VERBUND also provides expertise in processes that are important for society as a whole. In 2021
VERBUND was involved in particular in the discussions on the Austrian Renewable Energy
Development Act Package, the EU’s Fit for 55 package of legislative initiatives and the topic of
sustainable finance.
Relationships with VERBUND’s stakeholders are planned and managed centrally at the holding
company. Operational implementation of the measures is handled by the respective departments
within VERBUND and by the VERBUND subsidiaries, depending on the stakeholders in question.
Infrastructure projects that directly affect the space where people live are a particularly sensitive
matter. In order to guarantee the quality of communications in these projects, VERBUND’s basic
principles are laid down in the form of a corporate guideline. This guideline must be adhered to with
respect to all investment and construction plans and projects implemented by VERBUND in Austria and
abroad that impact the public, as well as in joint projects. Key elements of the guideline are the
provision of early and detailed information to those affected, along with an invitation to engage in open
discussion.
VERBUND places great value on keeping all parties concerned informed promptly and throughout all
phases of a project (the planning phase, the environmental impact assessment and the construction
phase). For each project, therefore, a communication roadmap is defined outlining all activities relating
to the communication measures, from identification of the parties concerned to the time schedule and
responsibilities to the budget. Major suppliers and general contractors involved in the project are also
included in the project communications.
The contact at the project site for all kinds of information (from tour requests to suggestions and
complaints) is either the responsible regional communications manager or the responsible project
head. The contact details for the responsible person will be published in all media.
Selected stakeholder activities in 2021
The established VERBUND stakeholder formats were also successfully continued in 2021. These
included, for example, the morning talks, the VERBUND Energy Breakfast, the Hydropower Dialogue
with district administrators in Bavaria, the dialogue with environmental organisations and the EU
energy forums. Due to the measures implemented to combat the COVID-19 pandemic, some individual
formats were switched to online events, depending on the pandemic situation, while others were
postponed until a later date or had to be cancelled altogether, such as the VERBUND Day in Brussels,
stakeholder visits as part of the “One day at VERBUND” event and all events planned in association with
the Munich Energy Club.
GRI 102-43
Please refer to the DMA
for fundamentals of
stakeholder
management
Please refer to the DMA:
“Endorsement of
external initiatives”
GRI 102-43
GRI 103-2
GRI 103-3
GRI 413-1
142
VERBUND provides information on developments in energy and climate
policy, engages in discourse and proposes constructive solutions.
VERBUND also maintains constant contact with affected stakeholder groups at its sites. Throughout
the entire dialogue process, formal legal positions had been consciously pushed into the background in
past years. The restrictions imposed due to the COVID-19 pandemic have made the otherwise
customary civil dialogue more difficult. In spite of these obstacles, virtual citizens’ meetings were held
for the first time and simple videos of construction sites were increasingly used. Events at power plants
such as the popular open days had to be cancelled, however.
In summer 2021, site visits with small groups of local residents were organised at the large
construction site of the Altenwörth fish pass project to explain the local impacts of closures of popular
cycle paths.
Advocacy of interests
VERBUND closely followed the developments and changes in the regulatory framework at EU level as
well as in Austria and Germany again in 2021. In terms of content, the focus was on the following topics
in 2021: the review and adoption of the Renewable Energy Development Act Package in Austria, the
European Commission’s comprehensive Fit for 55 package of legislative initiatives for the
implementation of the European Green Deal, activities in the area of green finance, as well as active
participation in numerous consultation processes on European strategy and policy projects relating to
energy and climate policy.
Please refer to the Disclosures on Management Approach (DMA) for more information on advocacy of
interests, memberships and support for external initiatives by VERBUND.
Social responsibility
VERBUND assumes responsibility for a society that perceives readily available electricity generated
from clean sources as a quality-of-life factor and trusts in the security of supply. In fulfilling its shared
responsibility to society, VERBUND also supports a number of charitable organisations and reinforces
children’s awareness of using energy carefully.
For information on
VERBUND’s position on
important topics, please
refer to
www.verbund.com >
About VERBUND >
Company >
Advocacy of interests
SDG
1
SDG
4
SDG
7
SDG
17
ANNUAL FINANCIAL REPORT - GROUP 143
Caritas and Diakonie
The VERBUND Electricity Relief Fund in collaboration with Caritas provides assistance quickly with no
red tape and, above all, for the long term, by offering immediate financial assistance to pay outstanding
electricity bills, professional on-site energy consulting and a free exchange service for old, inefficient
electrical appliances.
Since the project began in 2009, the VERBUND Electricity Relief Fund in collaboration with Caritas
has offered assistance to a total of 6,075 households with 15,200 people altogether living in these
households.
KPIs – VERBUND Electricity Relief Fund run by Caritas
Unit 2019 2020 2021
Interim financing Number 345 320 510
Interim financing € 55,500 45,000
35,000
Energy consultations Number 515 521 432
Appliances exchanged Number 149 328 353
In 2021, 96 people with disabilities received immediate assistance from the VERBUND Empowerment
Fund run by Diakonie. The total amount provided by VERBUND was €266,000. The VERBUND
Empowerment Fund run by Diakonie has made it possible, in times of great uncertainty, to build new
and innovative “bridges of communication” and therefore to consistently provide non-verbal people
with LIFEtool counselling and support.
KPIs – VERBUND Empowerment Fund run by Diakonie
Unit 2019 2020 2021
Individual assistance Number 105 95 96
Consultations Number 731 740 765
VERBUND Climate School in Hohe Tauern National Park
The ongoing pandemic led to a far-reaching decline in bookings for the classroom offering of climate
courses. The online offering at www.klima.schule was therefore further optimised and revised – also in
light of the investment in digital teaching tools – with the aim of offering teachers and students valuable
and at the same time fascinating content to address the topics of climate, climate change and climate
change mitigation.
VERBUND Electricity School kindles enthusiasm for technology
VERBUND helps teachers to make their physics lessons exciting and interactive by providing a range of
physics teaching materials. Once again, the strict protective measures at the power plant sites scarcely
allowed for any power plant tours for school groups in 2021. The offer remains in the medium term,
however. In contrast, the editorial traineeship with the daily newspaper “Die Presse” is continuing. As in
the previous year, 30 school classes from all over Austria participated in this initiative. VERBUND
presents the thematic world of energy.
More information on
VERBUND initiatives
with Caritas and
Diakonie is available at
www.verbund.com >
About VERBUND >
Responsibility >
Social issues >
Corporate citizenship
GRI 203-1
SDG 7
SDG 11
VERBUND Climate
School in the DMA and
online:
https://klima.schule/
GRI 203-1
VERBUND Electricity
School on the VERBUND
website and in the DMA
GRI 203-1
144
VERBUND COLLECTION
In 2021, the prestigious art institution Photographer’s Gallery in London curated the “Feminist Avant-
Garde” exhibition from the VERBUND COLLECTION as one of the five most important exhibitions in its
history on the occasion of its 50th anniversary. The exhibition of the same name has been touring
across Europe for more than ten years now and has already been hosted by Rome, Madrid, Brussels,
Hamburg, London, Vienna, Karlsruhe and Brno. The issues addressed by this exhibition include the
reduction of women to the role of mother/housewife/wife, the feeling of being trapped and wanting to
break free, questioning beauty ideals and female role-playing. The exhibition was last shown in the
Lentos Art Museum in Linz from September 2021 to January 2022. From May 2022 it will be shown in
the Museum of Contemporary Art Vojvodina in Novi Sad, Serbia, on the occasion of the European
Capital of Culture.
The second curatorial focus of the VERBUND COLLECTION is on artworks dedicated to the
“Perception of Spaces and Places”. This subject area brings together 300 works by 71 artists and has
already been on show at the MAK Museum of Applied Arts in Vienna, the BOZAR Centre for Fine Arts in
Brussels and the Museum der Moderne in Salzburg.
In addition to museums, the VERBUND COLLECTION also exhibits its works in the “Vertikale
Galerie” in the stairwell of VERBUND’s headquarters at “Am Hof”.
Compliance
New Code of Conduct as basis for the compliance management system
As an expression of its business ethics, VERBUND set itself the goal of engaging in fair, transparent and
sustainable business practices. A Group-wide compliance management system (CMS) was established
a number of years ago for this reason. This system is based on VERBUND’s Code of Conduct and is
intended to assist with implementing the Code and complying with its provisions.
This Code of Conduct, which forms part of the Group’s corporate philosophy, was fundamentally
revised and rewritten in the 2021 reporting period. In addition to updates and various clarifications, the
content was also expanded, and specific examples of responsible behaviour by employees were added.
Furthermore, the Code of Conduct was also combined with the sustainability mission statement. This
also resulted in the new name “Code of Conduct for Sustainable Business”, which is a very good
expression of the fundamental importance of sustainability for the Group.
Compliance guidelines explain the Code of Conduct in more detail. In addition, they provide for a
compliance organisation for the entire VERBUND Group. This organisation encompasses the whole
Group and consists of a Group-wide compliance team under the leadership of a full-time Chief
Compliance Officer. The Executive Board and Supervisory Board regularly receive written compliance
reports and verbal ad hoc information on demand.
Communication measures and whistleblower system
The Group continued to actively refine its compliance management system (CMS) in financial
year 2021, in spite of the COVID-19 restrictions. This refinement process was underpinned in particular
by Group-wide communication measures, such as standardised compliance meetings with Group
executives as well as continuous internal and external exchange of information.
GRI 103-1
GRI 103-2
The VERBUND Code of
Conduct can be viewed
at www.verbund.com >
About VERBUND >
Company >
Corporate philosophy
For further information
on the compliance
management system,
please refer to the DMA
ANNUAL FINANCIAL REPORT - GROUP 145
However, an effective CMS requires not only measures for prevention, but also facilities that help
ensure that the Group is informed of compliance breaches and can respond appropriately. This is the
only way to avoid damage to the Group. The whistleblower system in place at VERBUND will have an
added electronic reporting channel from the start of 2022. This new digital whistleblower platform will
now also enable two-way communication with anonymous whistleblowers. It is available to employees
and to external stakeholders for certain topics.
Compliance risk survey
As in prior years, a systematic Group-wide compliance risk survey was conducted in 2021. All divisions
of the VERBUND holding company and the principal consolidated subsidiaries were involved in the
survey in their capacity as risk owners. The 20 risk owners also included the new subsidiary Gas
Connect Austria GmbH (GCA), which was integrated into the compliance management system in the
course of the reporting year.
The risk owners carried out a qualitative compliance risk assessment based on the criteria of
materiality, probability of occurrence and maturity of existing measures using a standardised
questionnaire. The COVID-19 crisis did not have any particular effects on the compliance risk situation
and no additional risks were identified.
Following the evaluation of these risk analyses, an overall appraisal was carried out using a risk-based
approach. This provided the basis for defining the risk areas for which the specific, targeted compliance
measures being focused on are developed and implemented. This is to avoid any potential damage to
the Group. The findings of the compliance risk survey were incorporated into the Group’s risk
management. An annual update to the risk survey is planned for subsequent years.
As part of this process, the corruption risks, in particular, in all areas of the Group were examined and
documented in 2021. The findings indicated no significant risk of corruption for VERBUND.
Training, consulting and provision of information
VERBUND’s compliance management system focuses on preventive measures. In this vein, conducting
training sessions and presentations, providing one-on-one consulting on numerous occasions and
disseminating information on specific matters were important focal points of VERBUND’s compliance
work again in 2021. The Chief Compliance Officer and the compliance officers of the Group companies
provided information on correct conduct in person, by phone or by e-mail in response to all of the over
210 queries received. The most frequently mentioned topics were invitations, participation in events,
gifts and other benefits, as well as the handling of confidential information and potential conflicts of
interest. Even though the number of enquiries was down slightly due to the COVID-19 situation (with
temporarily cancelled events and a closed restaurant trade), management and employees nevertheless
demonstrated a high level of sensitivity to compliance issues.
In order to further improve the ability to deal with such matters, the compliance rules were addressed
in a tailored training programme throughout the Group. The Chief Compliance Officer held 17 training
sessions in the reporting year (mainly via video conference due to COVID-19). Target groups were
various departments of the holding company and subsidiaries of VERBUND, as well as new employees
and new executives. In addition, there were special training sessions by external instructors on the topic
of competition law. The compliance officers at the subsidiaries also held 46 training sessions.
The intranet-based e-training programme was once again a key pillar of the training programme
in 2021. The compliance e-learning programme comprises the courses on compliance basics, anti-
Digital VERBUND
whistleblower platform:
verbund.integrityline.
com
GRI 205-1
SDG 16
GRI 102-17
GRI 205-2
146
corruption and financial market compliance and has been integrated into the Group-wide Learning
Management System (LMS), along with the related surveys. All Group executives and all employees at the
holding company as well as those in departments that are particularly affected (e.g. Key Account
Management, Trading, Purchasing) are required to complete the relevant online surveys on an annual basis.
Another highly effective instrument for strengthening the compliance culture was a qualitative non-
financial sub-target in the target agreements for the executives. This required executives to discuss key
compliance issues or topics with their employees at least once during the current year, e.g. within the
scope of a regular meeting, a division or department meeting. All executives of the Group met this
requirement.
VERBUND not only briefs all of its Board members and employees on anti-corruption strategies and
measures internally but also provides information to all external stakeholders via its website. In
addition, compliance and anti-corruption topics are communicated to suppliers over the ASTRAS
electronic supplier platform and via the General Terms and Conditions of Purchase Orders. The Group’s
own Supplier Code of Conduct has also been in force since 2020; this formulates VERBUND’s
requirements for its contractors with respect to sustainability and compliance and along with the
general terms and conditions is a binding part of all of the Group’s orders in the procurement process.
Conversely, VERBUND also received several requests from business partners in the reporting year to accept
their codes of conduct. The Compliance department reviewed the relevant requirements in each case.
Business partner integrity checks
Integrity and trust form the basis for cooperation with all business partners. VERBUND therefore
commits not only itself but also its business partners to fairness and transparency and incorporates
them into its CMS.
The most important business partner compliance measures include standardised business partner
integrity checks, which have been implemented throughout the VERBUND Group for several years now.
They are used to actively manage integrity risks. Aside from fulfilling legal requirements, VERBUND’s
primary aim is to safeguard the Group’s reputation. The results of the analysis underpin the more
extensive assessment of business partners. The processes for the business partner integrity checks were
further developed and clarified in the reporting year.
No contracts with business partners had to be terminated due to corruption-related breaches in 2021.
Prevention of corruption and compliance incidents
VERBUND’s objective is to avoid any compliance incidents. Corruption prevention therefore plays a key
role in the VERBUND CMS. The topic of corruption prevention was therefore once again the subject of
the extensive internal communication and training measures in financial year 2021. A total of
2,081 individuals (equivalent to around 55% of all of VERBUND’s employees, including executives)
received training on the subject of anti-corruption, around two-thirds of whom via the compliance e-
learning programme. Of the executives, 74 (100%) completed the online training. Apart from receiving
reports on strategies and measures to combat corruption, the members of the Supervisory Board did
not take part in any further training in 2021.
When implementing the Anti-corruption Policy, the Chief Compliance Officer ensures strict
compliance with the rules relating to giving and receiving benefits, gifts and invitations in particular. He
monitors whether mandatory value limits and authorisations are being observed and whether the
documentation requirements are met. He is supported in this by the officers at the individual Group
Further information on
the Supplier Code of
Conduct can be found in
the Supply Chain section
GRI 205-3
GRI 205-2
ANNUAL FINANCIAL REPORT - GROUP 147
companies. In the reporting period, the Chief Compliance Officer approved around 30 cases involving
the giving or receiving of invitations or participation in events and denied three of these.
Four reports (two of them external) on cases of alleged or suspected compliance breaches were
received by the Group in 2021 and were investigated immediately where possible. In two of these
reports, however, the allegations were too unsubstantiated or too vague, despite enquiries, making it
impossible to address the content. In the other cases, investigations were unable to verify the suspicious
circumstances. No violations or cases of corruption were identified. There were also no claims against
the Group or its employees in the reporting period.
One suspected case of discrimination was also reported to the Diversity and Inclusion Manager in the
financial year under review. This matter was investigated and it was determined that no discrimination
had taken place. Discussions were held with the parties affected/involved, facts were presented and
solutions were worked out for the affected parties.
VERBUND encourages dialogue with all political parties and their organisations. This does not extend
to support for political parties and their delegates or election candidates, however. VERBUND makes no
financial donations to political parties, grass-roots political organisations or holders of political office.
Financial market compliance and market abuse law
VERBUND has developed a comprehensive set of regulations along with an internal organisational
structure – both in place for many years now – that are designed to comply with EU market abuse and
insider trading laws and the Austrian regulations, particularly stock corporation and stock exchange
law. The aim is to prevent the misuse of inside information.
In the 2021 reporting period, an increasing number of project-related areas of confidentiality were
established based on the Group’s growth strategy. There were three occasions where inside information
had to be published as ad hoc disclosures.
Legal compliance
In December 2020, VERBUND AG was served with an action for restraint brought by a competitor
before the Commercial Court of Vienna, together with an application for the issuance of a temporary
injunction. This action filed under the Federal Act against Unfair Competition (Bundesgesetz gegen den
unlauteren Wettbewerb, UWG) was based on alleged misleading price comparison advertising
(presentation of a cost saving as an example calculation). VERBUND AG submitted its response to the
action as well as its comments on the application for a temporary injunction within the deadline
specified. In August 2021 the application for a temporary injunction was dismissed with final effect,
since there was no deception in the opinion of the court. The main proceedings were terminated by way
of a suspension agreement.
Almost exactly four years after an accident in Baumgarten an der March on 12 December 2017, in
which one person was killed, 22 others were injured and major property damage was caused, the trial
began on 13 December 2021 at Korneuburg Regional Court. A total of twelve individuals are charged
with causing death due to negligence resulting in a fire. Two of the accused are employees of Gas
Connect Austria (GCA). The counsel for the prosecution also requested the court to impose fines on
four companies based on the Austrian Law on the Responsibility of Associations
(Verbandverantwortlichkeitsgesetz), including GCA. Due to numerous objections against the COVID-19
measures set by the judge, initially only the opening statements of the lawyers were presented. At the
start of January 2022 it was still unclear when the proceedings would be continued.
GRI 102-17
GRI 205-3
GRI 406-1
GRI
415-1
GRI 102-25
SDG
16
GRI 417-3
148
There were neither proceedings nor incidents of non-compliance or complaints filed against
VERBUND in the 2021 reporting period with regard to the following disclosures based on the standards
of the Global Reporting Initiative: GRI 206-1 (Legal actions for anti-competitive behaviour, anti-trust
and monopoly practices), GRI 416-2 (Incidents of non-compliance concerning the health and safety
impacts of products and services), GRI 417-2 (Incidents of non-compliance concerning product and
service information and labelling) and GRI 419-1 (Non-compliance with laws and regulations in the
social and economic area).
For information on the examination of the flooding on the Drau River in 2012 and the associated
proceedings, please refer to the Hydro section. For information on GRI 307-1 (Non-compliance with
environmental laws and regulations), please refer to the Environmental performance section.
GRI 206-1
GRI 416-2
GRI 417-2
GRI 419-1
GRI 307-1
ANNUAL FINANCIAL REPORT - GROUP 149
Environmental performance
In all of its fields of activity, VERBUND is committed to taking a responsible approach to the
environment. The VERBUND environmental mission and a Group-wide environmental management
policy guarantee that the requirements of internal and external stakeholders concerning professional
environmental management are taken into consideration.
The Environment executive order and additional environmental provisions define the framework for
the systematic planning, execution and measurement of and reporting on VERBUND’s environmental
achievements. Existing structures, processes and responsibilities in environmental management ensure
compliance with legal requirements, nationally and internationally accepted regulations and the
Group’s own standards. For this, VERBUND has established a decision-making body at the highest
management level and a working team made up of in-house environmental experts.
International standards form the basis for the Group-wide collection and reporting of VERBUND
environmental data. Detailed information on the standards applied and applicable factors is available
from VERBUND’s Investor Relations or Corporate Responsibility departments on request.
Impacts on the environment
The impacts – both positive and negative – that the VERBUND generation portfolio has on the
environment are a key issue in VERBUND’s environmental management systems. There are two
primary ways in which normal operation of VERBUND’s plants has a detrimental impact on the
environment: through the effect of hydropower plants on habitats in relation to river morphology and
biodiversity and through the effect of thermal power plants in relation to airborne emissions. The
VERBUND plants themselves present no significant risks with potentially negative effects for the
environment. By operating the facilities in compliance with the laws, VERBUND further minimises the
likelihood that these risks will arise. For extreme events (severe flooding, earthquakes, etc.) VERBUND
has specific contingency plans and a crisis management team.
Certification of environmental management systems
VERBUND engages external auditors to audit and certify its environmental management systems at
generation and grid facilities and at major administrative sites in accordance with ISO 14001. This
applies to sites of consolidated companies, excluding wind power plants if the operating company is
certified and sites in which VERBUND has a share of < 51% and where another co-owner is responsible
for management. The Mellach thermal generation facilities are also validated in accordance with the
EMAS Regulation. A separate environmental statement is published annually on VERBUND’s website
for these facilities. This means that 100% of VERBUND’s sites have been certified since 2017. The
objective is to continue with ISO 14001 certification at existing sites and to add new sites. New facilities
are therefore incorporated into the environmental management system as quickly as possible after
commissioning and included in the scope of the certificate for the next audit.
GRI 103-2
For further information
on the management
approach, please refer to
the DMA and
www.verbund.com >
About VERBUND >
Responsibility >
Environment
SDG 16
GRI 103-1
GRI 103-3
Please refer to
DMA section entitled
Crisis management
GRI 103-2
Certificates and
environmental
statements are available
at www.verbund.com >
About VERBUND >
Responsibility >
Environment >
Environmental
management
For details see NFI
download
150
Generation and use of power
In 2021, 96.4% of electricity generated at VERBUND originated from hydropower, wind power and solar
power, and 3.6% from thermal generation. VERBUND’s total energy consumption decreased to
18.9 million gigajoules (GJ) in 2021 from 19.5 million GJ in 2020, with a 6% reduction in total generation.
Fossil fuels accounted for 42% of total use of power at 8 million GJ. Only the fossil fuel natural gas was
used for thermal generation to generate electricity for grid support for congestion management
purposes as well as for district heating. Therefore, neither hard coal nor sewage sludge (biomass as a
substitute fuel) is used from 2021 onwards. In addition, natural gas will be used in the gas compressor
stations to operate GCA’s gas grid. Around 51% more natural gas was used in 2021 than in 2020 (2020:
5.2 million GJ; 2021: 7.9 million GJ). The volume of fuels used for the vehicle fleet and equipment
amounted to 0.06 million GJ (2020: 0.06 million GJ), corresponding to around 0.7% of the total use of
power from fossil fuels.
Internal electricity consumption by VERBUND comprises grid purchases for administration, power
plants, pumps and grid facilities. In 2021, the share of electricity purchased was 58% of total use of
power. At around 10.9 million GJ of electricity, mainly for pumping and turbining and for compensating
grid losses, a slightly higher volume of electricity was drawn from the grid than in financial year 2020.
Over 72% of this electricity came from renewable energy sources.
The key performance indicator energy intensity, which is expressed as the ratio of the Group’s power
use to the volume of electricity and district heating generated, remained the same in 2021, at
0.16 GWh/GWh (2020: 0.16 GWh/GWh). VERBUND’s target of a 25% reduction in energy intensity by
2021 (2015 baseline) was achieved between 2019 and 2021, largely thanks to the rapid phase-out of
generation from hard coal, the implementation of measures to improve efficiency and the increase in
renewable generation.
GRI 302-1
For further information
on generation, please
see the sections entitled
Hydro, New renewables
and All other segments;
for further information
on the use of power,
please refer to the DMA
and NFI download
SDG 12
GRI 302-3
ANNUAL FINANCIAL REPORT - GROUP 151
KPIs – generation and energy
Unit 2019 2020 2021
Generation
Electricity generation (net, total)
1
GWh 33,159 33,482 31,306
Share of generation from renewables % 95 97 96
Generation of district heating (net) GWh 789 486 304
Direct use of power total
2
GJ 24,239,101 19,488,089 18,880,407
Total fuels from non-renewable
sources
GJ 14,277,133 9,161,226 7,983,925
Hard coal GJ 7,305,244 3,861,230 0
Natural gas GJ 6,906,302 5,237,540 7,926,514
Fuels
3
GJ 65,587 62,456 57,410
Total fuels from renewable sources GJ 5,615 2,107 0
Electricity (grid purchase)
4
GJ 9,950,037 10,318,314 10,888,822
District heating/cooling
(grid purchase)
GJ 6,315 6,443 7,661
Energy intensity
5
GWh/GWh 0.20 0.16 0.16
1
incl. purchase rights //
2
Own power used in all operating segments. Fuels calculated based on heat units //
3
2020: adjusted due to late reports //
4
volume drawn from the grid
for consumption in power plants, administration, gas grid, electricity used for pumping and electricity purchased for grid losses in the transmission network (all grid levels); 2019
and 2020: retrospective adjustment of data //
5
excl. GCA
Use of materials
Materials VERBUND uses include additives and consumables for effluent treatment and for energy
generation in the power plants and for the grid facilities.
Total material requirements fell by 78% year-on-year. This decrease is primarily attributable to
reduced use of additives and consumables at the Mellach site in 2021. The material intensity for thermal
generation has been reduced by 97% since 2015. VERBUND therefore achieved its goal of an 80% drop
in this figure by 2021 (2015 base year) by switching from generation from hard coal to natural gas and
through the use of the new waste water treatment system.
KPIs – use of materials
Unit 2019 2020 2021
Total use of materials t 5,026 1,889 421
Use of additives and consumables t 5,006 1,879 406
Use of copier paper t 20 10 15
GRI 302-1
GRI 302-3
GRI 301-1
For further information
on the use of materials,
please refer to the DMA
and environmental
statements
SDG 12
152
Greenhouse gas emissions
The Group’s focus on electricity generation from renewable energy is a crucial factor both for
VERBUND and its customers for reducing and avoiding greenhouse gas emissions. Of the electricity
generated at VERBUND in 2021, 96.4% was generated from hydropower, solar power and wind power.
As it is still necessary to use thermal power plants to provide grid support and district heating, the
remaining 3.6% share of generation came from thermal power plants. VERBUND ceased using hard coal
in April 2020 and now uses only natural gas.
VERBUND’s GHG reporting meets the criteria of the Greenhouse Gas Protocol (GHG Protocol) and,
with publication in 2021, also those of EN ISO 14064-1:2018. Under both these standards, GHG
emissions are divided into three scopes. Scope 1 emissions are all direct emissions generated from
internal company activities and activities at VERBUND. Scope 2 emissions are generated indirectly from
internal electricity and district heating consumption and from grid losses. Scope 3 emissions, from the
consumption-based perspective, comprise other indirect GHG emissions in the upstream and
downstream value chain.
In 2021, the carbon footprint was recalculated and the scope of reporting was expanded as part of the
Corporate Carbon Footprint project. The comprehensive revaluation was carried out based on the
enhanced business model, new areas of business, the expansion of generation facilities for renewable
energy and the application of the ISO standard. A direct comparison of any historical publication of
GHG-related data is only possible for VERBUND’s Scope 1 emissions, which are subject to the EU ETS.
For other GHG emissions, a recalculation was carried out in some cases, and a complete initial
calculation for others. GHG emissions from the operation of GCA’s gas grid have been included in the
data collection since June 2021.
VERBUND has already ceased using lignite (2006), oil (2015) and hard coal (2020) as fuel and counts
as one of the early movers among electric utilities. VERBUND has continuously reduced its CO
2
emissions from thermal power plants since 2005, which fall under the European Emissions Trading
System (EU ETS). Between 2005 (3.8 million tonnes CO
2
) and 2021 (0.4 million tonnes CO
2
) VERBUND
reduced its ETS emissions by 88%. VERBUND is thus contributing to the avoidance and reduction of
emissions as well as to SDG 13 “Climate action”. By reducing thermal production volumes and switching
fuels to natural gas, VERBUND has also massively reduced its airborne emissions (dust, NOx, SO
2
). The
Group fell just slightly short of achieving its target to reduce VERBUND-specific direct GHG emissions
(Scope 1) to below 10 g CO
2
e per kWh of total electricity generated, with these emissions amounting to
14 g CO
2
e per kWh.
Due to the transformation of the energy sector and the implementation of VERBUND’s strategy, the
business model that has evolved with it, and new calculation methods, there is a new GHG emission
forecast for VERBUND for the years ahead. VERBUND has been and will continue to be perceived in
Austria as a reliable partner for securing supply. In the area of security of supply, VERBUND
is trusted
by the
the population and has a responsibility in this respect. VERBUND tries to meet these needs at the
best by generating electricity from hydropower, wind power and solar power, also with the Mellach site
and as an operator of electricity and gas transmission networks. Use of the state-of-the-art Mellach
combined cycle gas turbine power plant is therefore necessary to continue to provide and maintain a
secure domestic supply. On the one hand, the Mellach power plant is called upon as a grid reserve for
the necessary congestion management and, on the other, it serves to supply district heating for the
greater Graz area. Consequently, the use of the thermal power plant and the associated emissions are
dependent on external factors and cannot be influenced by VERBUND.
GRI 305-1
GRI 305-2
GRI 305-3
GRI 305-4
GRI 305-5
For additional
information on
greenhouse gas
emissions, please refer
to the DMA and NFI
download and to the
CDP climate change
rating
SDG 13
TCFD
GRI 103-3
ANNUAL FINANCIAL REPORT - GROUP 153
The climate targets based on this are as follows: by 2030, direct Scope 1 GHG emissions are to be
reduced relative to 2015 (around 1.8 million tonnes CO
2
e) by 16% to around 1.5 million tonnes CO
2
e. In
electricity trading, VERBUND contributes to emissions avoidance for its customers with its green
electricity products, as VERBUND sells and delivers electricity with a guarantee of origin from
renewable sources. In this connection, VERBUND provides its customers with comprehensive advice
and raises their awareness on the topic of green electricity. VERBUND is aiming to reduce the upstream
GHG emissions from the sale of purchased electricity to consumers to around 3.5 million tonnes CO
2
e
by 2030 compared with base year 2020 (around 3.7 million tonnes CO
2
e), with simultaneous growth of
5%. By doing so, VERBUND will also contribute to the EU-wide objective of reducing GHG emissions by
55% from 1990 to 2030.
VERBUND’s management worked intensively on the revision of
its corporate strategy in 2021 in response to
national and global decarbonisation efforts.
VERBUND includes CO
2
, CH
4
and SF
6
emissions in its direct Scope 1 GHG emissions. This volume
decreased by around 31% in 2021 from 0.65 million tonnes to 0.45 million tonnes CO
2
e due to the
suspended district heating supply contract. A total of 95% of these emissions are CO
2
emissions from the
use of natural gas in the Mellach power plant and 1.5% in gas compressor stations in the gas grid, which
fall under the EU ETS. There are no direct emissions from the generation of electricity using renewable
energy sources.
The remaining Scope 1 emissions do not fall under the EU ETS. The share of process emissions was
1.5%. Less than 1% of the emissions originated from the use of fuels in our own vehicle fleet and a
further less than 1% were caused by volatile SF
6
and CH
4
emissions from grid facilities. Direct
greenhouse gas emissions from the consumption of fuel by the vehicle fleet have been offset through
CO
2
-certificates since 2020. VERBUND has been working on the electrification of its vehicle fleet for
years. In 2021 an internal regulation entered into force which stipulates that only vehicles with zero-
carbon drive technologies may be purchased as company vehicles in future, such as all-electric cars or
hydrogen vehicles.
The specific value of own emissions from electricity and district heating generation and electricity
transmission amounted to just 14 g CO
2
e/kWh of total electricity generation in 2021. The GHG intensity
in 2021 was therefore once again significantly below the specific value for direct CO
2
emissions of the
Austrian production mix in 2020 according to the Association of Issuing Bodies (AIB), at 111 g CO
2
/kWh.
VERBUND is therefore even further below the value of the European generation mix according to the
International Energy Agency (IEA) of 233 g CO
2
/kWh, 21% of which consists of nuclear power
generation, however. VERBUND, on the other hand, achieves its entire specific emission value without
any nuclear power generation. These comparisons show how successful VERBUND has been in its drive
to achieve nuclear-free decarbonisation of its electricity generation. VERBUND’s strategic focus
envisages a further increase in generation from renewable energy, which will serve to further improve
this figure.
GRI 305-1
GRI 305-4
154
The KPI emissions avoided through renewable generation shows the emissions that would
theoretically be generated if all of VERBUND’s own generation from renewable energy sources were to
be produced in thermal power plants. This is calculated based on average thermal generation emissions
in Europe in accordance with the IEA of around 731 g CO
2
/kWh. In 2021, emissions avoided amounted
to around 22 million tonnes of CO
2
.
KPIs – greenhouse gas emissions Scope 1
Unit 2019 2020 2021
Scope 1 direct emissions
1
kt CO
2
e 1,073 654 454
Specific Scope 1 emissions
2
g CO
2
e/kWh 32 20 14
Emissions avoidance:
Greenhouse gas emissions avoided
through renewable generation
3
kt CO
2
24,071 24,726 22,055
1
preliminary figures before ETS audit; 2020: adjusted due to late reports //
2
from electricity generation and transmission (excl. GCA) based on total electricity generated
(incl. purchase rights excl. electricity generated for district heating); 2020: adjusted due to late reports //
3
calculated using emissions from thermal generation in Europe based
on IEA values
Indirect emissions from electricity supply in Scope 2 purchases arise from grid losses, from electricity
consumption (grid purchases) and from district heating and cooling. Two different figures are reported
for these: a location-based figure and a market-based figure. In the Corporate Carbon Footprint project,
the Scope 2 emissions were recalculated based on the quantities of electricity used for pumping that
were actually consumed and corresponding emissions were accounted for in Scope 3 in accordance
with the life cycle assessment.
The location-based figure is calculated using the carbon emission factor of the local power grid.
Therefore, this figure will only change if there are modifications in the quantities of electricity
purchased and/or changes in the European generation landscape. VERBUND’s location-based figure in
Scope 2 amounted to 0.15 million tonnes CO
2
e in 2021 (2020: 0.18 million tonnes CO
2
e).
The market-based figure, however, can be reduced through strategic procurement of electricity
generated from sources with lower emissions per kWh purchased. For several years now, VERBUND has
exclusively used electricity with guarantees of origin from 100% renewable energy to operate pumped
storage power plants, which has helped it to substantially reduce its market-based emissions. The figure
is consistently low compared with previous years and was 0.26 million tonnes CO
2
e for 2021.
KPIs – greenhouse gas emissions Scope 2
1
Unit 2019 2020 2021
Scope 2 indirect emissions
(market-based) kt CO
2
e 272 265 255
Scope 2 indirect emissions
(location-based) kt CO
2
e 175 176 146
1
2019 and 2020: adjusted due to new calculation method
GRI 305-2
GRI 102-48
ANNUAL FINANCIAL REPORT - GROUP 155
Within the Corporate Carbon Footprint project, a significance assessment was carried out for all
Scope 3 categories to determine the significant indirect emissions for VERBUND in the entire value
chain. From 2020, the reporting on VERBUND’s upstream emissions includes purchased goods and
services, capital goods, fuel and energy-related activities and, as previously, business trips. As before,
fuel and energy-related activities consist of upstream emissions from fuel usage, and, from 2020, also
location-based emissions from VERBUND’s internal electricity consumption and from electricity sales
to end consumers. Most GHG emissions from the total volume of upstream GHG emissions of
3.7 million tonnes CO
2
e in 2021 (2020: 4.09 million tonnes CO
2
e) are attributable to this category. The
emissions from the combustion of natural gas by customers, which are compensated by VERBUND,
continue to be reported as downstream activities. These amounted to 0.22 million tonnes CO
2
e in 2020
and to 0.25 million tonnes CO
2
e in 2021.
KPIs – greenhouse gas emissions Scope 3
Unit 2019 2020 2021
Scope 3 upstream indirect
emissions
1
kt CO
2
e n.a. 4,089 3,699
Scope 3 downstream indirect
emissions
2
kt CO
2
e 198 221 249
1
initial assessment and recalculation Scope 3, 2020; previous years not comparable //
2
preliminary data prior to TÜV inspection
Airborne emissions
The table “KPIs – airborne emissions” shows other emissions from VERBUND’s thermal power plants
and, from June 2021, also from GCA’s gas grid, as absolute amounts.
The phase-out of thermal generation from hard coal at the Mellach site eliminated sulphur dioxide
emissions (SO
2
emissions) from April 2020. The reduction target was thus met in 2021. Dust emissions
were also reduced to zero. Nitrogen oxide (NO
x
) emissions decreased by 57%. Carbon monoxide (CO)
emissions declined by a total of 21% compared with 2020.
In the period from 2015 to 2021, NO
x
emissions were reduced by 85% and dust emissions by 100%.
The targets to reduce NO
x
emissions by 80% and dust emissions by 90% were therefore achieved.
KPIs – airborne emissions
Unit 2019 2020 2021
CO t 65 47 37
SO
2
t 112 51 0
NO
X
t 475 285 122
Dust t 11 11 0
GRI 305-3
GRI 102-48
GRI 305-7
For further information,
please refer to the DMA
SDG 3
SDG 13
156
Conservation and biodiversity
Some VERBUND power plants and grid facilities are located in nature conservation areas or other
protected areas. The following table contains the disclosures on the sites by type of protected area.
Information on the geographical location of the power plants is published on the VERBUND website.
The locations of the protected areas can be found on the Austrian and Bavarian geodata portals.
Rehabilitation measures implemented at water bodies and the construction of fish passes to re-
establish river continuity are making an important contribution to the preservation and promotion of
biodiversity. Current examples of investments in ecology and biodiversity in the vicinity of VERBUND
hydropower plants can be found in the Hydro section and information on wind and solar power
projects can be found in the New renewables section. The wide range of measures that VERBUND has
already implemented and those that are still at the planning stage in the areas of conservation and
biodiversity are presented on the web pages of the respective LIFE projects, on the APG website and on
the VERBUND website.
KPIs – conservation and biodiversity (as of 2020)
Unit
Sites in protected areas
1
Sites in Natura 2000 areas ha 3,656
Sites in Ramsar areas ha 783
Sites in national parks ha 82
Sites in conservation areas ha 1,164
1
excl. GCA; data collected in 2020, update planned for 2022
Water and effluents
Water withdrawals at VERBUND sites totalled 66.6 million m in 2021 and were therefore 43% lower
than the figure of 116.7 million m recorded in 2020. Approximately 87% of this total volume of water
was used as cooling water in our Mellach CCGT. This share is withdrawn from the surface water, used
for cooling and returned chemically unchanged. Around 13% are volumes of service water. Only 0.3% of
the total water volume withdrawn is actually consumed.
Details on treatment methods used and the water quality, including the review of the main
substances of concern and compliance with limits, are published for the thermal power plants in the
annual environmental statement. Compliance with the limits for effluent treatment plants at all other
sites is also monitored. In 2021 limits were found to have been exceeded to a minor extent at five sites.
The causes were analysed and appropriate countermeasures have already been put in place to ensure
compliance again.
In order to determine whether sites are located in areas with a water stress level above 40%, the
location of VERBUND operating sites was compared with the location of areas of high or extremely high
water stress as defined in the Aqueduct Water Risk Atlas of the World Resource Institute (WRI). This
comparison found that all VERBUND operating sites are located in areas which were below the
threshold of 40%.
The KPI water intensity as a percentage of total electricity generated decreased by 77% compared with
2015. The target reduction of 50% by 2021 was overachieved in 2020 and 2021.
GRI 304-1
GRI EU13
For more on the topic of
biodiversity, please refer
to the DMA and
information provided at
www.verbund.com
www.apg.at
www.life-traisen.at
www.life-netzwerk-
donau.at
For current projects and
environmental measures
see the Hydro and
New renewables
segment reports
SDG 15
GRI 303-3 (2018)
GRI 303-4 (2018)
GRI 303-4 EU-ADD
GRI 303-5 (2018)
For more on the topic of
water, please refer to the
DMA and information
provided at
www.verbund.com
SDG 6
ANNUAL FINANCIAL REPORT - GROUP 157
KPIs – water input and output
Unit 2019 2020 2021
Total water withdrawal by source 1,000 m
3
162,017 116,706 66,663
from surface water 1,000 m
3
152,869 107,023 58,127
from groundwater and well water 1,000 m
3
9,044 9,573 8,396
from public water supply 1,000 m
3
104 110 140
Total water discharge 1,000 m
3
161,575 116,483 66,473
of which cooling water returned
from thermal power plants into
surface water
1,000 m
3
151,401 105,763 57,077
other water discharge 1,000 m
3
10,173 10,720 9,396
Water discharge by quality
1
1,000 m
3
161,575 116,483 66,473
fresh water discharge
(< 1,000 mg/l TDS) 1,000 m
3
161,541 116,465 66,473
other water discharge
(> 1,000 mg/l TDS) 1,000 m
3
34 18 0
Water consumption 1,000 m
3
443 223 191
Water intensity as a percentage of
total electricity generated
1,000 m
3
/GWh 4.9 3.5 2.1
1
2019 and 2020: amounts adjusted; TDS = total dissolved solids
Waste and by-products
At approximately 173 kt, the total waste volume was 38.8 kt higher in 2021 than the volume recorded
in 2020. This increase is mainly attributable to the approximately 52% higher volume of non-hazardous
waste from projects. At 79%, this category also accounted for the highest proportion of the total volume
and resulted from increased project activities. Waste was mainly disposed of during the course of the
many construction activities and dredging. Around 5% of the total volume was attributable to non-
hazardous waste from ongoing operations.
Hazardous waste accounted for just 1% of the total waste volume, at 1,500 tonnes. A lower level of
waste generation from projects of 600 tonnes was recorded in this category in the year under review. A
total of 2.5 tonnes was attributable to electrical materials containing PCBs.
The mass of screened debris collected totalled 26.7 kt in 2021, thus accounting for 15% of the total
volume of waste. This volume of waste depends primarily on water supply and on the occurrence of
flooding in the reporting period. It is not caused by power plant operations and therefore cannot be
prevented or influenced by VERBUND.
VERBUND’s Mellach district heating power plant, which used coal-fired generation up until 31 March
2020, produced ash and gypsum, which qualify as by-products as defined by the Austrian Waste
Management Act (Abfallwirtschaftsgesetz, AWG). These can be almost completely recycled as
secondary raw materials. The gypsum had already been sold in 2020. In 2021, a further 20,000 tonnes of
fly ash that was temporarily stored in a silo was disposed of, leaving around 2,000 tonnes in stock at the
end of the year. In addition, the partial softening of the treatment of the cooling water in the Mellach
CCGT results in calcareous mud. This calcareous mud goes to the cement works as a raw material
additive. At approximately 20.1 kt, the volume of by-products supplied in 2021 was around 52% below
the figure for 2020.
GRI 306-3 (2020)
GRI 306 EU-ADD
For more on the topic of
waste, please refer to the
DMA
SDG 12
158
KPIs – waste and by-products
Unit 2019 2020 2021
Total waste
1
kt 102.2 134.2 173.0
Total hazardous waste kt 1.0 6.1 1.5
from ongoing operations kt 0.8 0.9 0.9
from projects kt 0.3 5.2 0.6
Total non-hazardous waste kt 74.7 98.0 144.9
from ongoing operations kt 10.3 7.8 8.0
from projects kt 64.4 90.1 136.9
Screened debris – hydropower plants kt 26.4 30.2 26.7
By-products
by-products – thermal power plants kt 41.3 42.3 20.1
1
2020: waste volumes adjusted due to late reports
Other environmental KPIs
No environmental fines were imposed in 2021, nor were any environmental fines incurred in 2019 or 2020.
Further details on environmental KPIs are available in the NFI download and in the Environment
section of the VERBUND website.
Further information on
the topic of environment
is available in the NFI
download and at
www.verbund.com
GRI 307-1
SDG 16
ANNUAL FINANCIAL REPORT - GROUP 159
Human resources
VERBUND’s employees make a vital contribution to the Group’s success. Their commitment and
entrepreneurial actions enable continuous further development and implementation of VERBUND’s
strategy.
After financial year 2020, which was dominated by the global COVID-19 pandemic, financial
year 2021, which was also defined by the COVID-19 crisis, showed how the dedication of VERBUND’s
employees contributes to the Group’s success. Thanks to their commitment, flexibility and
entrepreneurial action, VERBUND continued to cope well with the crisis. In spite of the restrictions due
to the pandemic, the majority of VERBUND’s projects have gone ahead, enabling VERBUND to
continue to consistently pursue its strategy.
Crisis management
As an Austrian industry leader and an operator of critical infrastructure, VERBUND has a responsibility
to be as best prepared as possible for crisis situations and to take the appropriate action quickly in case
of emergency. Like 2020, 2021 was an exceptional year and showed that the good preparation of the
established crisis management system paid off.
Aside from protecting the health of all of its employees, VERBUND’s priority was to maintain the
electricity supply and ensure continuity of the necessary business processes. Although the pandemic
created an exceptional situation worldwide for the second year in succession, the challenges brought by
COVID-19 in the past financial year were successfully overcome once again with a professional and
flexible crisis management system. The crisis teams met on a regular basis and the protection concepts
were adapted according to the current infection situation. The measures were implemented in close
cooperation with the relevant stakeholders and were accompanied by transparent communication.
New works agreement on home office and mobile working
Based on the extensive experience with remote working due to the COVID-19 pandemic, the Group
agreement on remote working that has been in place since 2004 was replaced with a modern set of rules
on home office and mobile working. The new regulations, which were drawn up in successful
collaboration with the employee representatives, have set a milestone in the direction of modern
working and more flexible working conditions – even after the pandemic. The aim is to increase
VERBUND’s attractiveness as an employer in future, too. It is particularly significant that mobile
working brings another new, flexible and location-independent form of carrying out work.
Personnel planning and management
VERBUND uses a contemporary and user-friendly planning and reporting instrument for employee
data. This integrated personnel and expense planning system ensures a transparent personnel planning
process. Consistent and strict personnel planning also promotes efficient use of resources.
160
VERBUND’s central personnel management function has the authority to issue guidelines
concerning all personnel management matters in the Group. Focal points of the activities include
personnel planning and development, personnel controlling, recruitment, personnel marketing and
employer branding, labour and social law, company pension management, employer representation in
interactions with employee representatives, compensation and benefits, and strategic guidelines
relating to occupational health care, as well as diversity and inclusion management.
VERBUND uses a variety of methods such as external audits, internal reviews and analyses of KPIs
including the observation of internal and external benchmarks to assess the effectiveness of these
management approaches. Based on the results of these feedback and performance review processes,
compliance with the guidelines is regularly reviewed and adapted as needed.
Types of employment and benefits offered
VERBUND operates nearly exclusively in Central Europe, a region which has high standards in terms of
labour law and social welfare. VERBUND generally offers permanent contracts to all of its employees.
Temporary employment contracts are only entered into when there are objective reasons for doing so
(e.g. to replace employees on parental leave). VERBUND seeks to retain employees for the long term.
Apart from probationary periods, fixed-term employment contracts are only used in exceptional cases.
The majority of employment contracts at VERBUND are therefore open-ended. Various working-time
models, including full-time, part-time and part-time during parental leave, accommodate the different
phases of an employee’s life while meeting the requirements of the labour market. Around 25% of part-
time employees are men. Temporary workers are also hired to cover capacity peaks, during project work
and for temporary leave replacements.
VERBUND provides all of its employees, regardless of the working-time model, with a number of
voluntary benefits and benefits under collective bargaining agreements. These include a pension fund,
supplementary health insurance, discounted lunches, child benefits and health checks.
Employment of highly and very highly qualified employees entails corresponding personnel costs.
VERBUND therefore offers remuneration in line with the market and according to employees’
performance. To meet this commitment, we have had a performance-based remuneration model in
place since 2010. This model uses targets based on both individual performance and the Group’s
profitability and ensures fair pay at all levels.
Strategic personnel planning project
Various challenges were identified in strategic personnel planning and the planning of the long-term
quantitative framework was considered. Implementation of the corporate strategy with the planned
growth and the capacities for digitalisation also presents VERBUND with challenges, such as the
development of new areas of business (for example in connection with renewable energy and
e-mobility). This requires responsible building-up of resources. Other European energy companies are
also faced with the same task.
At the same time, VERBUND must deal with the effects of demographic change within the Group and
in the external market. In view of the rapidly changing demands on the world of work, the focus in 2021
was also on the qualitative change in the relevant occupational groups for VERBUND. The changes in
activities and skills were assessed in a long-term analysis up to 2030. Resulting longer-term needs for
action in the areas of training, analysis of potential and employee development were identified and
strategies were developed for meeting these needs in the specific occupational groups. This will ensure
GRI 103-2
SDG 5
SDG 8
SDG 16
GRI 103-3
For information on age
and gender, see the
Diversity management
section
GRI 102-8
SDG 3
GRI 102-41 and EU
DMA: Freedom of
association and
collective bargaining as
well as the Human rights
section
GRI 401-2
For information on
labour management
relations, including
minimum notice periods
regarding operational
changes, please refer to
the DMA
ANNUAL FINANCIAL REPORT - GROUP 161
that the necessary resources can be guaranteed, taking demographic changes, labour market trends and
gender balance into account. The specific measures in the areas of employee development, employer
branding and apprenticeship training are already being implemented. With early definition of coverage
strategies and responsible management of existing and future human resources capacity, VERBUND
aims to maintain and enhance its attractiveness as an employer for women and generations to come.
162
KPIs – employees
Unit 2019 2020 2021
Average number of employees Number 2,772 2,870 3,184
Number of employees under labour
law
1
Number 2,843 2,980 3,497
of which in Austria Number 2,476 2,602 3,118
of which in Germany Number 355 366 367
of which in other European countries Number 12 12 12
Full-time employees Number 2,663 2,790 3,282
Part-time employees Number 180 190 215
New employee hires Number 205 296 326
Employee turnover excluding
retirements Number 58 45 83
Employee turnover rate excluding
retirements Percent 2.0 1.5 2.4
Employee turnover including
retirements Number 146 174 189
Employee turnover rate including
retirements Percent 5.1 5.8 5.4
Average duration of employment
2
Years 17.6 16.1 15.0
Percentage of university graduates Percent 26.5 28.2 30.9
1
as at 31 December, excl. members of the Executive Board and employees in partial retirement //
2
Personnel from acquired and newly consolidated companies are included in
the duration of employment with the acquired/consolidated company and no longer in the duration of employment with the VERBUND Group.
Refocusing of employer image – employer branding
Demographic effects, the increasing complexity in the fields of work in the energy market and the future
cultural transformation of VERBUND also necessitate extensive refocusing of the Group’s positioning as
an employer. A distinctive, differentiated employer brand is crucial for this.
The brand essence of the current employer brand was sharpened in 2020, key positioning statements
were developed and a clear differentiating feature from established companies was defined with the
aim of continuing efficient, high-quality recruitment and strengthening employee retention and the
identification of VERBUND employees with the Group. The intention is to thus improve VERBUND’s
reputation as an attractive employer and to increase the number of applicant fits.
Under the new slogan #lead (ing) the way, a new employer campaign was rolled out in 2021, starting
with the apprentices target group. Emotive job stories were created for this and employer videos were
produced about the power plants.
The development of clear communication messages for the main target groups of students
(apprentices), graduates and experts achieved an even better response.
Anchoring of the #lead (ing) the way slogan internally has also been driven forward by measures such
as the job ambassador programme, ongoing training programmes as well as publications on the
intranet. The implementation was geared to the current COVID-19 situation and tailored primarily to
digital media.
Existing measures, with the strategic focus on maintaining long-term contact with top-performing
students from the Vienna University of Technology (TU) and on measures for the advancement of
women, were also continued in 2021. COVID-19 continued to make it more difficult to hold events such
GRI 102-8
GRI 401-1
ANNUAL FINANCIAL REPORT - GROUP 163
as Take Your Daughter to Work Day in Vienna, the Women in Technology (“Frauen in die Technik,” FIT)
initiative and Girls! Tech up in 2021. The selection process for awarding the VERBUND women’s
scholarship was held virtually. This allowed VERBUND to give three highly qualified and committed
female technicians additional personal and professional training beyond their everyday university life
once again in 2021.
Recruitment – virtual, but not impersonal
Developments in connection with COVID-19 also made it more difficult to follow the usual recruitment
process at VERBUND. As normal face-to-face contact was not possible, other measures were taken to
continue interviewing applicants and select them for VERBUND. Dealing with the challenges of COVID-
19 made it even clearer that the recruitment process needs to be flexible and that digital solutions offer
crucial advantages, particularly in times of crisis.
During the COVID-19 crisis, a comprehensive digital recruitment and onboarding process made it
possible to recruit staff for VERBUND without any face-to-face contact. As before, all applications were
processed and video interviews were held in place of the traditional in-person interviews.
A large number of the career fairs were also held virtually. The new online-only framework offered
virtual trade fair booths, video presentations and many different networking possibilities.
The continuous efforts to maintain the high level of professionalism of recruitment quality, even at
this challenging time, were validated in 2021, when VERBUND was once again acknowledged in the
Careers Best Recruiters study and awarded the silver seal. This award with a special focus on crisis
resilience demonstrated that VERBUND overcame the challenges of 2021 professionally.
Personnel development
The area of personnel development also required many flexible solutions in 2021 due to the COVID-19
crisis. In 2021 each VERBUND employee nevertheless took part in 26 hours of training on average.
Personnel development in financial year 2021 focused on training in the areas of safety, technology
and mandatory compliance training.
Due to the pandemic, many events could not be attended in person as planned in 2021. Measures for
which a virtual format was not feasible due to the nature of the training (e.g. first aid courses, working at
height, etc.) had to be either postponed or cancelled altogether. The majority of events were switched to
a virtual format. Virtual workshops and webinars are usually in a highly condensed form, due to their
online format, and are therefore often significantly shorter than in-person events. This had an effect on
the number of training hours again in 2021, which, as in the previous year, only amounted to around
50% of training hours in a normal year.
GRI 404-2
GRI 404-1
SDG 4
164
KPIs – skills development
Unit 2019 2020 2021
Continuing education per employee
(total workforce)
1
Hours 40.0 20.0 26.4
Continuing education per employee
(without executive function)
Hours 38.8 19.2 25.2
Continuing education per executive Hours 82.9 48.0 54.4
Continuing education hours for
women
Hours 35.4 21.6 28.8
Continuing education hours for men Hours 41.6 19.2 25.6
Employee performance review ratio Percent 88.4 94.5 96.5
Apprentices, total Number 156 164 182
of which new apprentices taken on Number 45 51 45
1
incl. executives and long-term agency staff, excl. apprentices, apprentices in post-qualification retention period (Behaltefristen), employees seconded to third parties and those
on long-term leave; excluding safety instruction
Digital learning
The consistent digitalisation of learning in recent years has created the ideal basis for being able to
respond quickly and efficiently to the new challenges presented by the COVID-19 virus. The Learning
Management System (LMS), which went online at the start of 2020, laid the foundations for digital
learning formats and created a platform for virtual training and continuing education. Digital
continuing education formats have already been offered before now in the form of e-training courses.
Employees were already familiar with digital learning, which made the transition easier. Numerous e-
training courses were added during the COVID-19 crisis, which were available to employees free of
charge. There were also own productions on VERBUND-specific topics and new offerings, as well as
acquisitions and cooperations with various providers. This expanded the portfolio to include topics
such as personal development, software programmes and digitalisation.
Numerous events that would have been attended in person were also held virtually as webinars.
Regardless of whether it is new software that is being introduced, a team workshop or a health topic,
VERBUND can design and host a webinar on it. The great advantage of this is that it is possible to
prepare content and make it available to employees a lot faster (than is the case for classroom training).
In addition, during the “COVID-free period” (period when measures were relaxed) a number of face-to-
face events were held again in compliance with strict safety requirements. The main focus at these
events was to protect our employees.
New environmental conditions require a variety of new methods. Therefore, even more formats of
content delivery are available, and these are also continuously growing. Comic-style explanatory videos
were increasingly used here to explain complex content. In addition, acquisitions were made that
include the compilation of reference books and give employees the opportunity to listen to these via
podcasts.
The onboarding of new employees was mainly accomplished via virtual workshops in 2021, due to the
COVID situation. During the “COVID-free period” the onboarding workshop was also conducted in
person and a number of power plant tours for the new employees were possible in the summer months.
The global COVID-19 pandemic likewise restricted personnel development, executives and
employees in their daily lives in 2021 and presented them with new challenges. As a company
GRI 404-1
GRI 404-3
SDG 4
GRI 404-2
ANNUAL FINANCIAL REPORT - GROUP 165
VERBUND found new ways to do things. The people within the Group grew together on both a personal
and a professional level during this time and are well prepared to face the challenges ahead.
Apprenticeship training
Particularly in times of crisis, one of our core tasks is the safe operation and continuous maintenance of
VERBUND’s plants. In order to optimally manage the ongoing generational shift in power plant
operations, VERBUND has trained new apprentices every year since 1983. Apprentices at VERBUND
learn two professions at once – electrical engineering and metalworking – over a period of four years,
with excellent prospects for the future. The high quality of our apprenticeship training is most evident in
the outstanding achievements seen in the final apprenticeship examinations.
The apprenticeship at VERBUND is as attractive to girls as it is to boys, which is reflected by the fact
that it has once again received the amaZone Award for outstanding performance in training girls and
women in technology. Every year, the best businesses demonstrate that women apprentices are an
enrichment to every workplace and embracing their presence wholeheartedly can serve the common
good. This sets an example of modern, innovative worlds of work beyond traditional gender stereotypes.
To give the young people an even more emotive and more authentic insight into the working
environment of VERBUND’s power plants, the employer positioning was redefined together with the
apprentices and a new campaign was developed under the slogan #lead (ing) the way. A strong sense of
identification, pride and loyalty was achieved within the Group through the intensive involvement of
various sites and the employees in the development of employer values, as well as regional job stories
and content production. The campaign includes advertising materials, such as flyers, posters and social
media posts as well as site-specific landing pages.
Further development of the corporate culture
Employee survey – Great Place to Work
Great Place to Work has been recognising the best employers for 30 years. In 2020, VERBUND
participated for the first time in the company-wide Trust Index© employee survey run by the
organisation Great Place to Work®. The Trust Index© employee survey provides a comprehensive site
assessment of the perceived quality and attractiveness of the workplace culture. Around 74% of the
workforce answered a variety of questions on the subjects of credibility, respect, fairness, pride, team
spirit and trust and classified VERBUND as a consistently good and attractive employer.
Another Culture Audit© was also conducted at the start of the year. This involved answering open
questions on all relevant aspects of human resources and cultural work that make up a successful
workplace culture.
In the Culture Audit© these human resources measures and programmes were evaluated in
comparison with the best employers from the current benchmark study. In its analysis of the human
resources tools used, Great Place to Work® identified nine areas that distinguish the best employers from
other employers in respect of their human resources work: Hiring/integrating, Celebrating/team
activities, Sharing, Inspiring (targets/strategy/values), Speaking, Listening, Thanking, Developing,
Caring.
The cultural evaluation conducted by the Culture Audit© shows that VERBUND’s human resources
and cultural work encompasses a large number of high-quality programmes and measures and that
VERBUND has an employee-focused workplace culture. The personnel measures taken by VERBUND
More information
available at
www.verbund.com >
About VERBUND >
Responsibility >
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Added benefits for
employees
166
in the above areas were rated as above average in comparison with all companies that participated in
the benchmark study.
The only area in which VERBUND was rated below average compared with the other benchmark
study participants was in recognising special achievements of employees. In the areas of developing,
caring and team spirit, VERBUND was even ranked well above the average of the best employers.
If the Culture Audit© rating is directly contrasted with the results of the employee survey, this
provides an indication that the personnel measures are only partly perceived by the employees in their
day-to-day lives. These measures need to be communicated better and the relevant processes need to
be made more transparent.
Awards
Thanks to the high level of participation in the survey and the thoroughly positive assessment by
employees as well as the positive cultural evaluation by the Culture Audit©, VERBUND was certified this
year as a “Great Place to Work”. In addition, VERBUND placed 7th in the X-Large category of the GREAT
40 and is thus one of “Austria’s Best Employers 2021” and is also on the list of Best Workplaces in
Europe™ 2021, holding 40th place in the Large category.
Top level: Mindset project
The results of the Great Place to Work survey and the analysis as part of the Gender Balance project
show that there is a strong desire for change among employees. Top-level executives have taken this as
an opportunity to jointly launch a personnel and team development process as part of the Mindset
project.
The aim is to strengthen the identity and the team character and to jointly drive forward personal
development. The focus of this project is to be catalysts and drivers of the change: to be an agile team
supporting VERBUND’s path as a leading company in the energy transition.
Appropriate employee development measures will promote cooperation and establish a common
content-related and personal focus. All of these are important prerequisites for accelerating cultural
change.
This year’s management conference was also based on this new approach and was held entirely in the
spirit of the slogan #lead (ing) the way, with the aim of promoting clarity, building closeness and
inspiring trust.
The format of this year’s management conference was thus designed together with the top-level
executives. Based on the slogan #lead (ing) the way, the entire conference was organised by the
Executive Board together with top-level management. The new culture, born from the initiatives of the
Executive Board and in the Mindset project conducted by top-level management, was actively
showcased at the conference and experiences from these projects were shared.
New formats, a lot of joint work in breakouts and the use of a round stage in the middle allowed for
direct contact and thus created a sense of connection and closeness, trust and openness. The executives
from top-level management took a leading role in various sessions throughout the conference –
including as sports coaches during the morning sports programme.
There were also some changes in the communication about the conference. For instance, right on day
one of the conference there was a post on the intranet about first impressions of the conference and a
message from the CEO to the employees about the strategic focus (CEO talk, recorded during the
conference) and a “side views” video on the management conference.
ANNUAL FINANCIAL REPORT - GROUP 167
Competency model
Shaping the future at VERBUND also means shaping a future of competency. VERBUND is addressing
this issue with its fundamentally redefined competency model. The competency model provides the
framework for a large number of personnel development processes. VERBUND has therefore made it its
mission to anchor several innovations at the same time in order to make employees at VERBUND fit for
the future. Five areas of competency and a total of 30 competencies show what is important in
cooperation at VERBUND.
The competency model therefore makes a distinction between basic competencies and future
competencies. Basic competencies are competencies that tend to be conducive to performance in the
here and now and are more short-term and operative in nature. Their purpose is to ensure efficient and
effective business processes. However, future competencies are also relevant for each employee. These
focus more on the (re-)design in the medium and long-term future. They increase the Group’s ability to
learn and adapt.
In addition, executives in particular are considered based on a separate, additional set of
competencies. In the best-case scenario, executives can act as a kind of catalyst or supporter. They
therefore help to make the aforementioned competencies a reality.
The strategic focus in personnel development is strengthened by the implementation and stringent
application of the competency model in the various processes relating to personnel development and
personnel work. Under the new name “competency check”, the new competencies are now also
included in the performance review. Furthermore, all processes are being updated and adapted to the
new competency model, for example the documents for the performance review, the inclusion of the
competency areas in the selection decision for internal and external audit procedures, as well as initial
adjustments to the 270-degree feedback process. Targeted competency development is also taken into
consideration in the creation of the management development programme.
Maintaining a work-life balance
VERBUND places great emphasis on maintaining a work-life balance at all times. VERBUND has been
doing the “berufundfamilie” audit (Work and Family Audit) since 2009, receiving its fourth certification
in 2021. Particularly during the COVID-19 pandemic, flexible working is a high priority. The conclusion
of the new works agreement on home office and mobile working laid a good foundation for these forms
of working. Many other measures to achieve a better work-life balance were planned or implemented as
part of the Group-wide Gender Balance project (see Gender Balance). VERBUND has set itself a
number of objectives for the next audit cycle, including to further improve the communication about
services and offers, to take a closer look at the topic of caring for relatives, and to continue to promote
the flexible working culture.
168
Diversity management
VERBUND considers diversity management both holistically and in individual dimensions and takes
both aspects into account. The diversity strategy defined in 2016 was endorsed in 2018 with the
ZukunftVIELFALT® certification and in 2019 with the implementation of planned measures placing
particular emphasis on the dimensions of age, gender and disability. The focus from 2020 to 2021 was
on gender balance. However, since diversity can by no means be reduced to gender, the focus was
turned in autumn 2021 to another sub-sector of diversity management: people with disabilities. It is not
just the social responsibility that VERBUND clearly sees as a company that is crucial here, but above all
the firm conviction that diversity makes VERBUND more successful and more resilient. VERBUND aims
to support this by making VERBUND more accessible (for more details please refer to the accessibility
management content) and creating more incentives for people with disabilities employed by
VERBUND.
The aim of this is to expand the circle of diversity bit by bit and to give a better reflection of the reality
of our society, because as a company VERBUND in no way wants to neglect the success factors of
diversity and inclusion. VERBUND therefore renewed its ZukunftVIELFALT® certification in 2021. The
individual dimensions of diversity were examined in a Group-wide process, focal points were set and
new objectives were agreed in line with current priority areas. This also solidified the next goal referred
to above – namely, to employ more people with disabilities at VERBUND over the next three years. In
addition, executives continue to be set diversity targets so as to ensure continuous implementation.
Communication on the other dimensions of diversity management is also being developed further.
Focus on gender
KPIs – gender dimension
Unit 2019 2020 2021
Men Number 2,336 2,436 2,822
Women Number 507 544 675
Total proportion of women Percent 17.8 18.3 19.3
Proportion of women among new
employee hires
Percent 22.9 20.6 26.4
Proportion of women among
executives
Percent 9.0 9.0 13.5
Proportion of women among
apprentices
Percent 3.8 6.7 9.3
Although the proportion of women in a technology-focused company like VERBUND is traditionally
low, VERBUND has been advocating for more gender balance in recent years and has been successful in
this endeavour. The development of the KPIs showed only a small increase in the percentage of women
in the various divisions, however. The Executive Board thus resolved to assign this topic strategic
relevance and engaged renowned consulting firm Beekhuis Performance Culture to start the Gender
Balance project in 2020. To begin with, a multi-dimensional corporate analysis was carried out. This
analysis consisted of four parts. As part of the process analysis, VERBUND’s processes were reviewed
with respect to equality. The KPI analysis then showed how gender balance is reflected in the KPIs. In
an online survey all employees were able to give their opinion on equality at VERBUND – more than
1,100 employees took part. In the focus group surveys (which had more than 170 participants), the
SDG 10
GRI 405-1
Information on diversity
on the Executive Board
and Supervisory Board
can be found in the
Corporate Governance
Report
ANNUAL FINANCIAL REPORT - GROUP 169
VERBUND culture was examined more specifically with regard to gender balance. The analysis
identified the key issues for change in the corporate culture that bring the greatest and fastest added
value in achievement of gender balance. The first of these is the development of the KPIs and the
second is the development of the corporate culture. The target to increase the current proportion of
women from 19.3% to a total of 20% by 2025 is expected to be achieved by 2025. The proportion of
women at management level is also to be increased to 20%. A detailed quota calculation showed, based
on strategic personnel planning and labour market data, how the proportion of women can be
increased to 20% by 2025, and forms the basis for the annual targets for the individual operating
segments. The actual development will be continuously monitored. Based on the status quo in 2021, the
Group is currently on course to achieve its targets.
A change in the corporate culture can only be achieved by developing different approaches.
Specifically, several working groups developed measures on key issues for the entire Group in 2021.
A clear objective and the stipulation of results criteria ensured efficient implementation.
The following
key focus areas have already been implemented: fixed quotas for new hires; projects and committees;
expansion of flexibility with respect to working hours and home office; increased communication on job
vacancies, tools and internal processes; webinars for executives and employees; new gender rules that
include all genders. By firmly anchoring these main focus areas, VERBUND aims to bring about a lasting
change in the corporate culture and thus appeal to people of different talents in the labour market. This
will ensure recruitment of qualified personnel in the long term.
VERBUND once again prepared an income report in 2021, which analyses the salaries of men and
women by occupational group. This report shows that there are hardly any differences in the salaries
between men and women with the same collective agreement classification. This can be attributed to
strict compliance with the classifications of the collective agreement as well as standardised payment
based on our performance-based remuneration scheme. Nevertheless, socio-political and cultural
aspects such as more part-time work among women, a small number of women in technical
professions, and the difficulty women experience in advancing to higher-paid (management) positions
are still also discernible at VERBUND.
VERBUND did not report a ratio of men’s and women’s salaries in 2021, as a detailed analysis based
on a new framework (new model structure) is planned for 2022. Based on these recalculations we
expect to achieve even better quality and comparability of results.
Focus on people with disabilities
VERBUND assumes its social responsibility to offer equal opportunities and has set itself the goal of
continuing to fulfil the quotas stipulated in the Austrian Disabled Persons Employment Act
(Behinderteneinstellungssgesetz, BEinstG) and to recruit and employ people with disabilities even
beyond that. Together with the accessibility management programme, the diversity management
programme continually works towards improving the employment of people with disabilities.
GRI 405-2
SDG 5
SDG 8
GRI 405-1
170
VERBUND meets the statutory quotas stipulated for the employment of people with disabilities. For
VERBUND, the mandatory quota is 144. As of 31 December 2021, VERBUND employed 149 people who
qualify. However, as a further decline is expected in the next few years due to numerous retirements, the
focus in 2022 is to be entirely on people with disabilities – existing employees are to be sensitised and
informed and new talent is to be recruited.
For further information on the topic of accessibility, please refer to the section entitled Occupational
health and safety.
Focus on age
VERBUND strives to achieve a balanced age structure. The objectives in managing the demographic
change are keeping knowledge in the Group and maintaining the loyalty of VERBUND’s top performers.
KPIs – age dimension, total
Unit 2019 2020 2021
Total average age Years 43.3 42.2 41.6
< 30 years Percent 19.3 21.1 21.5
30–50 years Percent 41.5 43.3 46.0
> 50 years Percent 39.2 35.6 32.5
KPIs – age dimension, executives
Unit 2019 2020 2021
< 30 years Percent 0.0 0.0 0.0
30–50 years Percent 47.2 48.3 50.5
> 50 years Percent 52.8 51.7 49.9
The demographic trend observed for many years continued during the reporting period. Around 7%
of VERBUND employees will retire in the next five years. Over the next ten years, around 21% will retire.
It remains important to VERBUND to manage the generation change well and thus retain and expand
the knowledge within the Group. As part of its strategic personnel planning, VERBUND identified the
most critical areas in 2021 and defined coverage strategies for these areas. To this end, quantitative and
qualitative needs for change were considered and specific measures were derived, the majority of which
are already being implemented.
In order to keep employees healthier for longer in the work process, the health management team at
VERBUND is being expanded further. For more information on this, please refer to the section entitled
Occupational health and safety.
GRI 405-1
GRI EU15
For disclosures on
pension obligations,
please refer to the notes
SDG 10
ANNUAL FINANCIAL REPORT - GROUP 171
In 2020 the YoungStars network for employees under the age of 35 was created by a group of young
employees. This gives employees under 35 the opportunity to network across the entire Group, to
contribute ideas, to exchange ideas and to purposefully help shape the corporate culture. For this to be
realised, there are regular (virtual) events (for employees to get to know each other and the different
areas of activity at VERBUND better), discussion forums with executives and opportunities to exchange
ideas at informal after-work meet-ups. The first-ever YoungStars Convention was held in 2021, at which
the young employees were able to engage in direct dialogue with the Executive Board and executives
and were inspired by short motivational presentations.
172
Occupational health and safety
Healthy and motivated employees are very important to the Group’s success. Occupational health and
safety are therefore also key pillars of VERBUND. Work-related injuries, occupational diseases and
work-related illnesses are counteracted with targeted measures to protect employees. VERBUND
applies high occupational health and safety standards to protect its own employees and staff employed
by external contractors. In addition to complying with the prevailing legal requirements and obligations,
high priority is given to providing safe and healthy working conditions, eliminating hazards, and
mitigating risks.
Health protection during the COVID-19 pandemic
In accordance with VERBUND’s protection targets formulated in connection with its continuity,
contingency and crisis management plans, protecting the health of employees during the COVID-19
pandemic has utmost priority.
Along with the regulations based on prevailing legal requirements, additional, appropriate protective
measures were also defined in accordance with the principles of hazard prevention so as to reduce the
risk of infection from COVID-19. When being defined, the protective measures were ranked by order of
importance based on the STOP principle. The hazards are countered by substitution or risk avoidance,
as well as by technical, organisational and personal measures. In addition to preventing contact among
staff by staggering shifts, splitting teams and having staff work remotely where possible, installing
Plexiglas partitions and ensuring compliance with social distancing rules and hygiene measures,
VERBUND also required staff to wear personal protective equipment such as mouth and nose coverings
or filter masks, safety glasses or goggles, disposable gloves and hazmat suits (which the Group provided
to employees). The topic of antigen and PCR tests was drafted in the form of a test strategy. Antigen and
PCR tests are carried out on an ongoing basis depending on the situation.
Regulations were put in place for the most important work situations (such as business trips,
attending or hosting events, working on construction sites), and appropriate protection plans were
developed for larger, busier sites and continuously adapted to the prevailing situation. The respective
regulations and protective measures were also applicable to any external contractors working at
VERBUND sites.
To prevent infection and the further spread of the virus, a comprehensive testing strategy was also
developed in collaboration with the occupational health service, with various test procedures such as
swab tests in testing lanes and screening tests through to personal saliva tests. These COVID-19 rapid
antigen tests have been carried out at VERBUND since November 2020 as a support measure to mitigate
risks. Key cornerstones in the fight against the pandemic in 2021 were as follows: the offer and
administration of company COVID-19 vaccinations (two-dose basic immunisation and third booster
vaccination) as well as testing for neutralising antibodies. The focus of the free vaccination campaign for
employees in 2020 was on flu and pneumococcal vaccinations to protect against additional infections.
GRI 103-1
SDG 3
For more information
please refer to the
Human resources
section
ANNUAL FINANCIAL REPORT - GROUP 173
KPIs – occupational safety
Unit 2019 2020 2021
Fatal injuries (total) Number 0 0 0
Fatal injuries (own staff) Number 0 0 0
Fatal injuries (external contractors) Number 0 0 0
Fatal injury frequency (total) 0.0 0.0 0.0
Fatal injury frequency (own staff) 0.0 0.0 0.0
Fatal injury frequency
(external contractors) 0.0 0.0 0.0
Serious injuries (total) Number 0 1 0
Serious injuries (own staff) Number 0 1 0
Serious injuries (external contractors) Number 0 0 0
Serious injury frequency (total) 0.0 0.1 0.0
Serious injury frequency (own staff) 0.0 0.2 0.0
Serious injury frequency
(external contractors) 0.0 0.0 0.0
Injuries (total) Number 56 55 75
Injuries (own staff) Number 36 34 35
Injuries (external contractors) Number 20 21 40
Lost time injury frequency/LTIF (total)
1
6.4 5.6 6.8
Lost time injury frequency/LTIF
(own staff)
1
6.1 5.6 5.3
Lost time injury frequency/LTIF
(external contractors)
1
7.0 5.6 9.1
No. of hours worked (total) Hours 8,802,247 9,861,859 11,021,160
No. of hours worked (own staff) Hours 5,945,580 6,083,040 6,613,740
No. of hours worked
(external contractors) Hours 2,856,667 3,778,819 4,407,420
Injury severity (total)
2
22.8 18.3 24.0
Total injury-related days lost (total) Days 1,275 1,008 1,799
1
ratio of workplace injuries from first day of leave to 1 million working hours; excluding injuries only requiring first aid and excluding fatal injuries. The basis for calculating the
working hours is defined for the industry at 1,740 working hours per year. //
2
average lost days per injury
Accidents in 2021
The calculation of occupational safety KPIs is based on the number of VERBUND employees under
labour law, including employees in partial retirement, temporary staff and all employees of
proportionately consolidated equity interests, regardless of the type of consolidation over which
VERBUND exercises a controlling influence. On this basis for calculation, VERBUND had
3,801 employees at the end of 2021. This figure included 176 temporary workers, 173 semi-retired
employees as well as the entire workforces of Ennskraftwerke Aktiengesellschaft, VUM Verfahren
Umwelt Management GmbH, VERBUND
Tourismus GmbH, Lestin & Co. Tauch- Bergungs- und
Sprengunternehmen Gesellschaft m.b.H, Energji Ashta Shpk and the newly consolidated companies
Gas Connect Austria GmbH and SMATRICS GmbH & Co KG. All employees are covered by appropriate
management systems for health and safety; 25% thereof are employees who work at companies with an
externally certified management system in accordance with ISO 45001.
GRI 403-9 (2018)
GRI 103-3
GRI 102-8
GRI 403--8
174
LTIF is used as an international KPI. This enables a comparison with national and international
companies. To allow the use of external contractors to be evaluated as well, VERBUND has also tracked
their hours worked at all work sites since 2018 and reports the number of accidents in the “Lost time
injury frequency/LTIF (external contractors)” KPI.
Thus, the number of accidents among our own staff continued on a positive trend in 2021. The
accident rate remained constant compared with 2020, in spite of an increasing number of projects. In
terms of accident severity, values also fell significantly compared with 2020.
The rapidly increasing number of projects with a greater risk of accidents, such as efficiency
improvement programmes and new power plant construction, was highly noticeable from an increase
in the LTIF at external contractors, however. In order to be able to properly interpret the number of
accidents, absolute accident figures must be considered in relation to the number of employees and lost
days per accident. The accident frequency and injury severity can then be derived from this. VERBUND
engages external contractors for clearly defined construction, overhaul and maintenance contracts in
particular. The employees at these firms are subject to the same safety regulations as VERBUND
personnel. These persons therefore receive the same safety briefings. Contractors awarded work related
to the construction of plants are responsible for managing their own work. However, they are also
required to comply with the safety standards prescribed by VERBUND and are briefed in accordance
with VERBUND’s rules.
In comparison with other electric utilities in Austria, the total accident frequency of 6.8 (LTIF
including external contractors) in 2021 indicates that VERBUND remains on the right track. The
medium-term corporate goal is an LTIF ≤ 5. Improvement measures are identified and implemented
based on the analysis of accidents within the Group and involving external contractors. As in previous
years, neither third-party fault nor organisational shortcomings were identified as the cause of any
work-related injuries in 2021. This shows that safety standards within the Group are very high and that
safeguards for employees are being implemented as best possible.
GRI 103-3
ANNUAL FINANCIAL REPORT - GROUP 175
Injury type
Unit 2019 2020 2021
Impairment of sensory functions
(own staff) Number 2 0 1
Impairment of sensory functions
(external contractors) Number 0 0 0
Unconsciousness, circulatory failure
(own staff) Number 0 0 0
Unconsciousness, circulatory failure
(external contractors) Number 0 0 0
Electrification (own staff) Number 1 1 0
Electrification (external contractors) Number 0 0 0
Foreign object injury (own staff) Number 0 2 1
Foreign object injury
(external contractors) Number 0 2 2
Skin injury, wound (own staff) Number 11 9 11
Skin injury, wound (external contractors) Number 6 9 10
Bone fracture (own staff) Number 5 6 5
Bone fracture (external contractors) Number 0 1 13
Multiple types of injury (own staff) Number 2 0 2
Multiple types of injury
(external contractors) Number 1 0 2
Contusion, bruising (own staff) Number 7 7 7
Contusion, bruising
(external contractors) Number 4 3 7
Other and unknown injury types
(own staff) Number 0 1 1
Other and unknown injury types
(external contractors) Number 1 1 1
Burn, scald, chemical burn, freezing
(own staff) Number 1 1 1
Burn, scald, chemical burn, freezing
(external contractors) Number 1 0 0
Poisoning (own staff) Number 0 0 0
Poisoning (external contractors) Number 0 0 0
Loss of body part (own staff) Number 0 0 0
Loss of body part (external contractors) Number 0 0 0
Sprain, pull, dislocation, ligament tear,
meniscus injury, torn muscle (own staff) Number 7 7 6
Sprain, pull, dislocation, ligament tear,
meniscus injury, torn muscle
(external contractors) Number 7 5 6
GRI 403-9 (2018)
176
Serious injuries are counted as those injuries from which employees cannot recover within six
months to the extent that their state of health prior to the injury is regained. These include, for example,
complicated fractures right through to limb amputations. The following were identified at VERBUND as
general work-related hazards with risks that could have very serious consequences or cause irreversible
damage to health or result in death: hazardous work materials, atmospheres with oxygen deficiency,
falls on level ground and from heights, electrocution and work on live parts, drowning, cut injuries from
hand-held chainsaws, high-pressure jets, harmful noise and mechanical injuries. The most frequent
causes of injury in serious accidents in recent years were trapping and crushing, falls on level ground,
falls and falling objects. There were no workplace accidents resulting in serious injury in financial
year 2021. In the reporting period, there were also 13 accidents involving VERBUND personnel on the
way to or from work – one of which was a serious motorbike accident – as well as one commuting
accident involving external staff.
The risks to the health and safety of employees are identified and assessed as part of the workplace
evaluation. Based on this evaluation, measures are defined to prevent hazards and then the
implementation of these measures and their effectiveness is monitored. A review and, if necessary, an
adjustment of the evaluation shall take place if there are any changes in circumstances, but also after
accidents at work in particular. Employees are briefed accordingly about frequently occurring accident
risks.
Accident prevention
Preventive measures are based on the analyses of work-related injury statistics at VERBUND. As in 2020,
the annual continuing education measures for 2021 were heavily influenced by COVID-19. The planned
focus topic “Working on the water” was partially implemented depending on the region and partly
postponed until 2022.
Every year, as was the case in financial year 2021, legally mandated safety briefings are successfully
completed by close to 100% of the workforce, either in person or via an e-learning programme that
includes a final test. COVID-19 likewise posed a considerable challenge for the individual events with
respect to briefings. The maximum permitted number of participants had to be continuously adjusted
in line with the current COVID-19 case numbers. Some of the briefings were also held as video
conferences.
In the area of occupational safety, VERBUND has a large number of internal and national regulations
in place that are continually updated and promptly amended as soon as changes in the law come into
effect. These regulations relate to the following topics, for example: management of working materials,
accident reporting and behaviour after an accident occurs, briefings and instruction, fire safety,
personal protective equipment, coordination on construction sites and in projects and dealing with
external contractors, occupational health and safety documentation as well as coordination and
responsibilities of the occupational health service. These regulations are intended to guarantee that the
same standards are available and applied throughout the Group.
Safety culture
Occupational health and safety has reached a high technical level at VERBUND thanks to the great
efforts made and extensive measures implemented in recent years. The accident KPIs for the last five
years until 2017 stagnated at an average LTIF value of ten. This figure was reduced significantly to below
GRI 403-9 (2018)
GRI 403-2 (2018)
Details on the evaluation
can be found in the
DMA
GRI 103-2
GRI 403-5 (2018)
ANNUAL FINANCIAL REPORT - GROUP 177
seven when the “We Live Safety” project was launched. The aim of this project, in addition to protection
of technical workers, is to invest in the further development of behaviour-based occupational safety.
Besides numerous workshops for executives, 36 safety coaches from all areas were trained, who have
the task of conveying to their colleagues the idea of behaviour-based occupational safety as well as the
importance of setting a good example.
This project has been continued as a permanent project since 2020. In addition to ongoing activities,
core areas are increased safety communication, installation and use of a wide range of tools, such as a
near miss database, safety walks by executives, the introduction of a safety award, a calendar of
occupational safety issues for 2022, a sub-project entitled “five minutes for safety” or the new regulation
for the evaluation of workplace accidents, and much more.
Healthy and motivated employees are very important to the Group’s success.
Promoting health among employees
The “Fit and Healthy at VERBUND” initiative is designed to promote a healthy lifestyle among
employees. On the one hand, the aim is to increase general health awareness, while, on the other hand,
specific measures are offered that enable everyone to become proactive about their own health. Ideally,
these are free offers which employees can take advantage of directly at their workplace.
As in the previous year, another focus in 2021 was on medical check-ups. Together with a preventive
medicine association, health roads consisting of a cardiovascular check-up, a physical check-up and a
nutrition check were offered during working hours directly at external site locations in the federal
provinces of Lower Austria and Carinthia. Another focus was mental health, as stress awareness and
resilience are important, particularly during a pandemic. In cooperation with the training department,
various webinars on the subject of mental health were offered to executives and employees.
Due to the COVID-19 pandemic, fitness programmes were only offered in an online format. A diverse
range of online training sessions were held, including bodyweight exercises and spinal gymnastics, with
video recordings for later use. The online offering was also expanded to include webinars on the subject
of healthy eating, online visual training sessions and face-to-face workshops on correct lifting and
carrying.
A new introduction in 2021 was an app-based motivation platform, which was used to run regular
challenges to promote movement and health and to raise awareness for various sustainability issues.
VERBUND participated in the Companies Challenge Austria 2021 via this platform, where minutes of
exercise had to be collected, and took third place.
GRI 403-6 (2018)
For further information
on health management,
please refer to the DMA
178
Accessibility
Breaking down barriers is an important aspect for the inclusion of people with disabilities. The
accessibility management programme at VERBUND addresses the three main topics of structural
accessibility, digital accessibility and everyday accessibility in the mind.
In addition, recommendations for accessible building at VERBUND, including an overview of the
legal foundations and standards, as well as instructions for implementing structural accessibility
beyond legal requirements were published internally in 2021.
The establishment of a Digital Accessibility Team (DAT) made accessible information and
communication technologies another focal area in 2021. The aim of the exchange and cooperation
between different specialist departments in the Digital Accessibility Team is to build appropriate
expertise, identify needs for improvement, assist with the implementation and develop Group-wide
standards.
There was also the annual Purple Light Up Day, the international day raisjng awareness for people
with disabilities, which was held on 3 December 2021. On this day, parts of VERBUND’s corporate
headquarters at “Am Hof” in Vienna and the Nußdorf joint power plant in Vienna were lit up purple in
support of the global campaign and as a visible sign of the inclusion of people with disabilities. For
further information on the focus on people with disabilities, please refer to the Human resources
section
ANNUAL FINANCIAL REPORT - GROUP 179
Digitalisation, information security and data protection
Digitalisation
The topic of digitalisation is the focus of activities in all of VERBUND’s operating segments, with the
goal of making internal and external services and processes efficient. Digital innovations, skills and
abilities are continually evaluated and developed further. Potential for greater digitalisation is being
unlocked in all areas, from generation through trading to sales. Digital solutions are the catalyst for a
successful energy future in Austria.
The Digitalisation master plan had further digital projects added to it in financial year 2021 and
includes projects from the categories of digitalisation, auto machine learning, big data, digital workforce
management, digitalisation in power plants and modern working practices. This master plan thus
encompasses all strategically relevant digitalisation projects in the Group and serves to help plan and
coordinate digital innovations.
The Digital Deep Dive initiative started in financial year 2020 was completed in 2021. The goal of this
initiative was to continuously identify further potential for digitalisation within VERBUND using new
approaches and dynamic methods. This project generated further digital follow-up projects, such as the
development of an employee app for VERBUND Thermal Power and the establishment of an aerial
drone strategy.
Projects within the scope of Hydropower 4.0, such as the Digital Hydro Power Plant and the Digital
Workforce Management projects, have allowed additional technologies for the digitalisation of energy
generation (including the flight over the Drossen Dam in Kaprun using an aerial drone) to be tested and
implemented.
Furthermore, the first projects on the use of auto machine learning for automation were successfully
completed in quarter 4/2020. Back-testing confirmed the success of this method.
The first big data platform was also established at VERBUND in December 2020. The necessary tools
and a strategic data governance committee were established in 2021 to manage data assets (“meta-
data catalogue”) and create a data map. The combination of big data and auto machine learning
technologies will enable VERBUND to achieve a higher degree of automation of business processes in
the future.
Modern Work@VERBUND is an initiative started by an interdisciplinary, cross-company core team
with the aim of creating a new, open, transparent and trusting culture of cooperation (cooperation,
networking and exchange) throughout the entire Group. In Phase I, after interviews and management
consultations had taken place, the action areas for specific initiatives were defined. Three specific
initiatives were then planned and implemented in Phase II. Phase III of the project commenced in 2021.
The well-established team shall continue to be the contact and sparring partner for projects and
measures in the Modern Work environment (e.g. gender balance, MS365, etc.) and shall communicate
the measures implemented in Phase II and establish and integrate these further within the Group.
Information security
Information security is a high priority at VERBUND and extends through all areas of the Group. A key
role in this is also played by the obligations arising for critical infrastructure companies under the
Network and Information Security Act (Netz- und Informationssystemsicherheitsgesetz, NISG). In
summer 2020, several VERBUND companies were identified by official notices as “operators of an
essential service”. In the 2021 reporting period, the central information security management system
180
was once again certified to ISO 27001 and ISO 27019. In addition, the security measures required by the
Network and Information Security Act (NISG) were also audited by an external agency for the first time.
Digitalisation projects at VERBUND are always carried out with information security in mind.
Information security is therefore a key driver of progress and makes an essential contribution to the
achievement of the objectives of the Group’s strategy.
The Information Security department established in 2019 was also expanded. In addition to
safeguarding infrastructure operations, this department thus also ensured the implementation in 2021
of the Information Security master plan adopted by VERBUND’s Executive Board in 2019. The aim of
the entire programme is to maintain but also continuously increase the degree of maturity in all areas of
information security.
The Security Operation Center (SOC) plays a central role in achieving this objective and in countering
the significant increase in cybercrime. The SOC was therefore expanded further, the visibility of
attempted cyberattacks on VERBUND was further increased and contingency plans were developed.
The sphere of action encompasses not only the entire IT landscape, but also the systems for electricity
generation.
Due to the rapid establishment of the Information Security department since 2019 and the speedy
progress with the master plan projects, VERBUND was well prepared for the COVID-19 pandemic. New
and state-of-the art working methods such as remote working have already been used in project
implementation. Information security was therefore at no point in jeopardy, even with the ongoing
COVID-19 pandemic. As in 2020, and even with extensive access restrictions at VERBUND sites, at least
two members of staff from the Information Security department were always present at the corporate
headquarters in order to be able to respond on the ground in an emergency. The security awareness
programme was also intensively pursued to make all employees aware of the security risks in the
working environment at home and to protect them against possible attacks.
Data protection
VERBUND takes the implementation of the provisions of the EU General Data Protection Regulation
(GDPR) very seriously.
An integrated data protection management system has been established internally and includes all
Group companies. The Group Data Protection Officer manages and coordinates all of the Group’s data
protection-related matters and is supported in this by the data protection officers at the individual
companies.
The data protection tool TOM&PIA developed by VERBUND supports the data protection officers in
updating the records of processing activities, protecting the rights of data subjects and managing the
notifications to the supervisory authority. This tool is now also offered to other external companies as
software as a service.
ANNUAL FINANCIAL REPORT - GROUP 181
In financial year 2021, 30 enquiries from data subjects were processed and responded to. There were
no cases of personal data breaches that had to be reported to the supervisory authority and no cases of
data leaks, data theft or data loss in connection with customer data.
Due to COVID-19, the mandatory awareness and training programme was restricted to online
channels and therefore to an e-training course and the proprietary online courses “Stories of
TOM&PIA”.
Human rights
VERBUND is aware of its responsibility to protect human rights in all Group divisions and in any other
areas within its sphere of influence. This holistic responsibility is defined in the internal guideline on
respect for human rights. As a result, VERBUND respects all types of civil, political, economic, social and
cultural rights. VERBUND also considers human rights to include adherence to laws and standards
pertaining to the environment, occupational safety, health and compliance. Information on the topic of
human rights can therefore also be found in other sections of this Integrated Annual Report.
All executives and all employees at VERBUND are responsible for respecting human rights and
reporting any violations to the Chief Compliance Officer. One case of suspected discrimination was
reported in 2021. Any significant incidents of environmental pollution and severe deficiencies in
occupational health and safety must be reported to the head of the Corporate Responsibility
department. There were no such reports in 2021.
Human rights at VERBUND
VERBUND is committed to ensuring due diligence in the protection of human rights in all Group
divisions. To this end, VERBUND provides safe and healthy working conditions and relies on preventive
measures to minimise hazards and risks in the work environment. Forced and compulsory labour, and
child labour in particular, are forbidden.
Under freedom of association and collective bargaining, employees can communicate openly about
working conditions and have the right to join a union. They earn wages and salaries that allow them and
their families to have a dignified life. VERBUND rejects any form of discrimination, bullying and sexual
harassment and works with all people regardless of gender, age, disability, religious beliefs, culture, skin
colour, education, social background, sexual orientation or nationality. For VERBUND, protection of the
environment is also an important part of human rights. Human rights that are at risk from damage to
the environment include the right to a reasonable standard of living and the right to health.
Human rights in VERBUND’s sphere of influence
Even in its cooperation with business partners and within its supply chain, VERBUND is concerned with
the protection of all human rights. Human rights are therefore an important aspect of the Supplier Code
of Conduct. However, due to VERBUND’s activities in some regions, challenges can arise in the area of
human rights. Special attention is required in the event of conflicts, political instability, failure of the
rule of law and lack of civil rights. In an environment of corrupt structures, extreme poverty, natural
disasters or proximity to vulnerable groups, extreme caution must be exercised in entering into or
maintaining business relationships with customers or suppliers. To ensure this, VERBUND carries out
GRI 418-1
GRI 103-2
SDG 1
SDG 4
SDG 10
Please refer to the DMA
for detailed information
on the principles
Additional information
on discrimination cases
can be found in the
Compliance section
Details on this topic can
be found in the Human
resources and
Compliance sections as
well as in the DMA
The compliance
management system is
also described in the
DMA
GRI
414-1
182
business partner integrity checks prior to commencing cooperation in projects, supplier discussions
and regular hot spot analyses within the supply chain, among other things.
Supply chain
The supply chain at VERBUND is characterised by the construction of new power plants and the
investment, management and maintenance measures for existing properties and technical facilities.
Depending on the investment or maintenance programme planned, the main services purchased
involve construction and construction-related work as well as electromechanical technology. Services
are also outsourced in the following areas, among others: other maintenance-related services,
information and communications technology, customer service, communications and marketing.
Procurement of primary energy (gas) for thermal generation is another component in the supply chain.
Most of VERBUND’s procurement volume is transacted using formal tenders via an electronic
supplier and tendering portal. When registering on this portal, potential suppliers are also required to
complete a questionnaire on the topics of sustainability, compliance, environmental protection and
occupational safety. These and other topics such as organisational governance, anti-corruption, fair
competition, human rights, labour practices, health, information security and data protection,
protection of intellectual property and supply chain are also defined in a Supplier Code of Conduct
(SCoC).
At the end of 2021 there was a total of around 6,000 potential suppliers registered on the supplier
portal. Around 600 were added in the reporting year, 52% of whom had already responded to the
questionnaire by the reporting date on 31 December 2021. The questionnaire must be completed in full
in order to participate in VERBUND’s tendering process.
Procurement statistics
1
The number of suppliers commissioned by VERBUND in financial year 2021 totalled around 5,100.
VERBUND placed 95% of its order volume in its core markets of Austria and Germany. The remaining
5% of orders were awarded to suppliers in other countries (mainly within the EU). In 2021, orders
totalling around €815m were placed with suppliers in 32 countries.
Supply chain
excl. APG, GCA
GRI 102-9
GRI 102-10
For details on the supply
chain and supplier
assessment, please refer
to the DMA
GRI 308-1
GRI 414-1
SDG 12
GRI 204-1
ANNUAL FINANCIAL REPORT - GROUP 183
Procurement statistics
1
Unit 2019 2020 2021
Commissioned suppliers
(number rounded) Number 4,700 4,800 5,100
Order volume €m 480 430 815
Austria % 58 80 76
Germany % 34 15 19
Rest of the world % 8 5 5
1
excl. APG, GCA
We assume responsibility in our supply chain and
demand the same from our suppliers.
Sustainable supplier management
Sustainable management does not end at VERBUND’s door, which is why VERBUND also sets high
economic, social and environmental standards in its supply chain. Attention is paid to this in our
collaboration with suppliers and in our procurement processes. Due to the integration of the SCoC into
supplier contracts, VERBUND suppliers are bound to behave responsibly and ethically. In supplier
meetings VERBUND enters into dialogue with selected suppliers to identify risks and build a mutual
understanding of sustainability issues such as occupational safety, the environment, compliance and
human rights. In 2021, there were discussions with suppliers on the topics of occupational health and
safety and photovoltaics.
Going forward, VERBUND intends to place even greater emphasis on the sustainability performance
of its suppliers. VERBUND has therefore been working since 2021 on refining the sustainability
assessment of its suppliers, which is to be based in future on the ESG ratings of a renowned rating
agency. This will also indicate to suppliers areas in which there is potential for development and
improvement with respect to sustainability aspects in their supply chain. Rollout will initially be to the
top 100 suppliers. In the medium term, additional strategic supplier groups will be included using a
risk-based approach.
To minimise risks in the supply chain, VERBUND suppliers are also subject to integrity checks (ICs).
These ICs are carried out prior to a possible award of a contract when certain thresholds are reached.
The aim of ICs is to ensure that all statutory requirements are met at both the EU and national levels and
to safeguard VERBUND’s good reputation. By performing ICs, VERBUND fulfils its corporate due
diligence obligations and actively takes preventive measures to prevent financial crime, corruption and
money laundering. Furthermore, to ensure compliance with the requirements of the Network and
Information Security Act (NISG), the suppliers are evaluated for certain projects with respect to their
need for protection and a cyber risk rating is obtained.
GRI 103-2
184
Vienna, 17 February 2022
Executive Board
Michael Strugl
Chairman of the Executive Board
of VERBUND AG
Peter F. Kollmann
CFO, member of the Executive Board
of VERBUND AG
Achim Kaspar
Member of the Executive Board
of VERBUND AG
ANNUAL FINANCIAL REPORT - GROUP 185
Courtesy Translation of the Audit Report of the
Independent Assurance on Non-Financial Reporting*
Introduction
We performed procedures to obtain limited assurance, if the consolidated non-financial report as of
December 31, 2021 was prepared in accordance with the reporting criteria. The reporting criteria
include the Sustainability Reporting Standards GRI Standards: Core option issued by the Global
Sustainability Standards Board (GSSB) and the reporting requirements mentioned in § 267a UGB
(NaDiVeG).
Responsibility of the management
The preparation of the report in accordance with the reporting criteria as well as the selection of the
scope of the engagement is the responsibility of the management of VERBUND AG. The reporting
criteria include the Sustainability Reporting Standards GRI Standards: Core option issued by the Global
Sustainability Standards Board (GSSB) and the reporting requirements mentioned in § 267a UGB
(NaDiVeG).
This responsibility includes the selection and application of appropriate methods for preparing the
report, making assumptions and estimates of individual non-financial disclosures that are plausible
under the given circumstances. The responsibility of the management further includes the internal
controls, which have been determined as necessary by management for the preparation of a
consolidated non-financial report free from misstatement, whether due to fraud or error.
Responsibility of the auditor
Our responsibility is to express a limited assurance opinion on the consolidated non-financial report
based on our review, whether all the reporting requirements mentioned in the Sustainability Reporting
Standards GRI Standards: Core option issued by the Global Sustainability Standards Board (GSSB) and
§ 267a UGB (NaDiVeG) are met.
It should be noted that, in line with our contract, we did not perform any audit procedures regarding
disclosures under Art. 8 of the Taxonomy Regulation.
We conducted our engagement in accordance with the International Standard on Assurance
Engagements ISAE 3000 (Revised), “Assurance Engagements Other Than Audits or Reviews of Historical
Financial Information” issued by the International Auditing and Assurance Standards Board (IAASB) in
order to obtain limited assurance on the subject matters.
ISAE 3000 (Revised) requires us to plan and perform the engagement in a way that enables us to
obtain limited assurance that nothing has come to our attention that causes us to believe that the
consolidated non-financial report has not, in any material aspect been prepared in accordance with the
reporting criteria of GRI Standards: Core option and § 267a UGB (NaDiVeG).
In a limited assurance engagement, the evidence-gathering procedures are more limited than in a
reasonable assurance engagement and therefore, less assurance can be obtained. The choice of audit
procedures lies in the due discretion of the auditor.
As part of our audit, we have performed, inter alia, the following audit procedures and other activities
as far as they are relevant to the limited assurance engagement:
Independent Assurance
GRI 102-56
186
• Interview of the employees named by VERBUND AG regarding the sustainability strategy, the
sustainability principles and the sustainability management
• Interviewing employees of VERBUND AG to assess the methods of data collection, data processing
and internal controls
• Matching the non-financial disclosures shown in the consolidated non-financial report with the
calculation documents provided
• Site visit at the wind farm Bruck an der Leitha
• Conducting a media analysis
• Furthermore, we conducted procedures with regard to whether the reporting requirements of
§ 267a UGB are met with the consolidated nonfinancial report.
The objective of our engagement is neither an audit of financial statements nor an auditor's review of
financial statements. Likewise, neither the detection and clarification of criminal offences, such as
embezzlement or other acts of breach of trust and administrative offenses, nor the assessment of the
effectiveness and efficiency of the management is the object of our engagement.
Summarized Conclusion
Based on our work, nothing has come to our attention that causes us to believe that the consolidated
non-financial report has not, in any material aspects, been prepared in accordance with the reporting
criteria of the Sustainability Reporting Standards GRI Standards: Core option issued by the Global
Sustainability Board (GSSB).
Furthermore, nothing has come to our attention that causes us to believe that the reporting
requirements of § 267a UGB (NaDiVeG) are not met with the consolidated non-financial report.
It should be noted that, in line with our contract, we did not perform any audit procedures regarding
disclosures under Art. 8 of the Taxonomy Regulation.
ANNUAL FINANCIAL REPORT - GROUP 187
Engagement approach
The basis for this engagement are the “General Conditions of Contract for the Public Accounting
Professions”, as issued by the Chamber of Tax Advisers and Auditors in Austria (according to annex). In
accordance with chapter 7 of these terms and conditions, our liability shall be limited to intent and
gross negligence. In cases of gross negligence, the maximum liability is limited to a maximum of five
times the fee. This amount constitutes a total maximum liability cap, which may only be utilized once
up to this maximum amount, even if there is more than one claimant or more than one claim has been
asserted.
Vienna
February 25, 2022
Deloitte Audit Wirtschaftsprüfungs GmbH
(signed by:)
Mag. Walter Müller
Austrian Certified Public Accountant
*) Attention: This letter has been translated from German to English for referencing purposes only. Please refer to the officially legally binding version as written and signed in
German. Only the German version is the legally binding version.
Consolidated financial statements
190
Income statement ........................................................................................................ 191
Statement of comprehensive income ........................................................................... 192
Balance sheet ............................................................................................................... 193
Cash flow statement .................................................................................................... 194
Statement of changes in equity .................................................................................... 196
Notes ............................................................................................................................ 198
1. General information on the preparation of the financial statements ................................................. 198
2. Discretionary judgements and key assumptions concerning the future ........................................... 208
3. Performance in the financial year .......................................................................................................... 209
4. Non-current assets ................................................................................................................................... 226
5. Financial instrumen ts .............................................................................................................................. 251
6. Working capital ........................................................................................................................................ 267
7. Equity ........................................................................................................................................................ 270
8. Liabilities ................................................................................................................................................... 271
9. Provisions .................................................................................................................................................. 278
10. Taxes .......................................................................................................................................................... 288
11. Risk management .................................................................................................................................... 289
12. Capital management ............................................................................................................................... 299
13. Other .......................................................................................................................................................... 299
14. Responsibility statement of the legal representatives .......................................................................... 318
Independent Auditor’s Report ...................................................................................... 319
Contents of the consolidated
financial statements
of VERBUND
191ANNUAL FINANCIAL REPORT - GROUP
€k
In accordance with IFRSs Notes 2020
1
2021
Revenue 3,449, 789 4,776,633
Electricity revenue 3.2.1 2,814,033 3,8 33,260
Grid revenue 3.2.1 497,310 734,988
Other revenue 3.2.2 138,446 208,386
Other operating income 3.2.3 77,536 97,414
Expenses for electricity, grid, gas and certificate purchases 3.2.4 –1,404,388 –2,612,55 5
Fuel expenses and other usage-/revenue-dependent expenses 3.2.5 –78,788 –250,134
Personnel expenses 3.2.6 –347,634 –38 3,733
Other operating expenses 3.2.7 –276,279 –318,332
Measurement and realisation of energy derivatives 3.2.8 –127,443 269,667
EBITDA 1,292, 793 1,578,959
Depreciation and amortisation 3.2.9 –378,767 –417,269
Impairment losses
2
3.2.10 –24,964 –9,869
Reversal of impairment loss
2
3.2.10 32,876 115,009
Operating result 921,938 1,266,830
Result from interests accounted for using the equity method 3.2.11 28,835 34,837
Other result from equity interests 3.2.12 10,279 19,534
Interest income 3.2.13 32,127 38,381
Interest expenses 3.2.14 –81,030 –77,814
Other financial result 3.2.15 32,803 –15,836
Impairment losses 3.2.16 0 –18,297
Reversals of impairment losses 3.2.16 3,386 16,817
Financial result 26,400 –2,378
Profit before tax 948,338 1,264,452
Taxes on income 3.2.17 –238,874 –279 ,365
Profit for the period 709,464 985,087
Attributable to shareholders of VERBUND AG (Group result) 631,427 873,556
Attributable to non-controlling interests 78,036 111,531
Earnings per share in €
3
3.2.18 1.82 2.51
1
Comparative figures for the period from 1 January to 31 December 2020 were adjusted retrospectively in accordance with IAS 8.//
2
The impairment losses and reversals of
impairment losses have been reduced by the amount of any change in related deferred contributions to building costs and government grants. //
3
Diluted earnings per share
correspond to basic earnings per share.
Income statement
of VERBUND
192
€k
In accordance with IFRSs Notes 2020
1
2021
Profit for the period 709,464 985,087
Remeasurements of the net defined benefit liability 9.2 13,804 8 6,476
Measurements of financial instruments 3.3.1, 5.1 6,040 23,471
Other comprehensive income from interests accounted for
using the equity method
2
4.5.1 –8,990 5,076
Total of items that will not be reclassified subsequently
to the income statement 10 ,854 115,022
Differences from currency translation 3.3.1 –3,585 –3,466
Measurements of cash flow hedges 3.3.1, 5.1 –171,406 –1,8 19,916
Other comprehensive income from interests accounted for
using the equity method
3
3.3.1 –644 –11,937
Total of items that will be reclassified subsequently
to the income statement –175,634 –1,835,319
Other comprehensive income before tax –164,781 –1,720,296
Taxes on income relating to items that will not be reclassified
subsequently to the income statement
3.3.2 –4,808 –2 7,899
Taxes on income relating to items that will be reclassified
subsequently to the income statement 3.3.2 42,851 454,97 9
Other comprehensive income after tax –1 26,737 –1,293,217
Total comprehensive income for the period 582,726 –308 ,129
Attributable to shareholders of VERBUND AG (Group result) 503,047 –428,019
Attributable to non-controlling interests 79,679 119,889
1
The comparative figures were adjusted retrospectively in accordance with IAS 8. //
2
deferred taxes included therein in the 2021 reporting period: €– 2.0 m
(previous year: €–
3
deferred taxes included therein in the 2021 reporting period: €4.0 m (€0.2 m)
Statement of comprehensive income
of VERBUND
193ANNUAL FINANCIAL REPORT - GROUP
€k
In accordance with IFRSs Notes 1/1/2020
1
31/12/2020
1
31/12/2021
Non-current assets 11,001,064 11,285,338 12,877,427
Intangible assets 4.1 652,045 668,157 788,750
Property, plant and equipment 4.2 9,110,760 9,407,623 10,672,047
Right-of-use assets 4.3 133,425 110,663 103,826
Interests accounted for using the equity method 4.5 271,313 282,724 404,053
Other equity interests 4.6, 5.1 138,103 145,748 177,12 8
Investments and other receivables 4.7, 5.1 695,418 670,422 695,813
Deferred tax assets 10.0 0 0 35,8 11
Current assets 776,723 702,331 4,234,145
Inventories 6.1 34,320 33,036 49,918
Trade receivables, other current receivables and securities 6.2, 5.1 697,768 620,091 3,865,664
Cash and cash equivalents 6.3 44,635 49,203 318,562
Assets 11,777,787 11,987, 668 17,111,572
€k
In accordance with IFRSs Notes 1/1/2020
1
31/12/2020
1
31/12/2021
Equity 6,507,168 6,807,399 6,362,949
Attributable to the shareholders of VERBUND AG 7.1–7.4 5,887,804 6,151,179 5,461,640
Attributable to non-controlling interests 7.5 619,364 656,220 901,309
Non-current liabilities 4,107,390 4,045,421 4,404,426
Financial liabilities 5.1, 8.1 1,256,572 1,202,154 1,834,155
Provisions 9.0 912,247 886,219 832,928
Deferred tax liabilities 10.2 757,299 797,055 486,851
Contributions to building costs and grants 4.2.2 754,107 760,992 788,378
Other liabilities 5.1, 8.2 427,164 399,001 462,114
Current liabilities 1,163,2 29 1,134,848 6,344,197
Financial liabilities 5.1, 8.1 310,804 84,056 1,462,453
Provisions 9.0 38,589 39,586 44,650
Current tax liabilities 10.1 106,104 197,407 222,384
Trade payables and other liabilities 5.1, 6.4 707,732 813,798 4,614,709
Equity and liabilities 11,777,787 11,987, 668 17,111,572
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
Balance sheet
of VERBUND
194
€k
In accordance with IFRSs Notes 2020
1
2021
Profit or loss for the period 709,464 985,087
Amortisation of intangible assets and depreciation of property,
plant and equipment (net of reversals of impairment losses) 372,210 301,551
Impairment losses on investments
(net of reversals of impairment losses) –590 –6 ,533
Result from interests accounted for using the equity method
(net of dividends received) –19,766 –29,39 3
Result from the disposal of non-current assets 2,852 –2,9 01
Change in non-current provisions and deferred tax liabilities 63,933 –2,943
Change in contributions to building costs and grants 6,884 2 7,386
Other non-cash expenses and income –74,411 –81
Subtotal 1,060,577 1,272,174
Change in inventories 1,284 –9,895
Change in trade receivables and other receivables –10,962 –2,696,192
Change in trade payables and other liabilities 38,949 1,513,183
Change in current provisions and current tax liabilities 92,300 18,893
Cash flow from operating activities
2
1
The comparative figures were adjusted retrospectively in accordance with IAS 8. //
2
Cash flow from operating activities includes €238.2 m in taxes paid on income (previous
year: €68.5 m), €17.9m in interest paid (previous year: €2 8.5 m), €2. 1 m in interest received (previous year: €0.1 m) and €13 .1 m in dividends received (previous year: €15 .6 m).
Cash flow statement
of VERBUND
195ANNUAL FINANCIAL REPORT - GROUP
€k
In accordance with IFRSs Notes 2020
1
2021
Cash outflow from capital expenditure for intangible assets and
property, plant and equipment
–602,357 –854,044
Cash inflow from the disposal of intangible assets and
property, plant and equipment 2,284 2,749
Cash outflow from capital expenditure for investments –83,458 –4,462
Cash inflow from the disposal of investments 86,721 7,437
Cash inflow (outflow) from capital expenditure for subsidiaries 0 –247,203
Cash outflow from capital expenditure for interests accounted
for using the equity method and other equity interests 0 –9,800
Cash flow from investing activities –596,810 –1,105,324
Cash inflow from money market transactions 0 1,430,235
Cash outflow from money market transactions –14,961 –50,000
Cash inflow from the assumption of financial liabilities
(excluding money market transactions) 0 489,075
Cash outflow from the repayment of financial liabilities
(excluding money market transactions) –233,908 –245,9 42
Cash outflow from the repayment of lease liabilities –49,361 –27,523
Dividends paid 3.4.1 –282,540 –319 ,324
Cash flow from financing activities –580,769 1,276, 520
Change in cash and cash equivalents 4,569 269,359
Cash and cash equivalents as at 1/1 44,63 5 49,203
Change in cash and cash equivalents 4,569 269,359
Cash and cash equivalents as at 31/12 49,203 318,562
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
196
In accordance with IFRSs Called and
paid-in
share capital
Capital
reserves
Retained
earnings
Remeasure-
ments of
net defined
benefit
liability
Notes to the annual financial statements 7.0 7.0 7.0 9.2
Carrying amount as at 1/1/2020 347,416 954,327 4,933,750 –388,655
Adjustment IAS 8
1
Adjusted carrying amount as at 1/1/2020 34 7,416 954,327 4,933,750 –388,655
Profit or loss for the period – – 631,427 –
Other comprehensive income – – 0 –98
Total comprehensive income for the period – – 631,427 –98
Change in the basis of consolidation – – 139 0
Dividends – – –239,717 –
Other changes in equity – – –94 0
Carrying amount as at 31/12/2020 347,416 954,327 5,325,505 –388,753
Carrying amount as at 1/1/2021 347,416 954,327 5,325,505 –388,753
Profit or loss for the period – – 873,556 –
Other comprehensive income – – 0 60,931
Total comprehensive income for the period – – 873,556 60,931
Change in the basis of consolidation – – –1,104 0
Dividends – – –260,562 –
Other changes in equity – – 59 0
Carrying amount as at 31/12/2021 347,416 954,327 5,937,454 –32 7,822
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
Statement of changes in equity
of VERBUND
197ANNUAL FINANCIAL REPORT - GROUP
€k
Differences
from currency
translation
Measurement
of financial
instruments
Measurement
of cash flow
hedges
Equity
attributable
to the
shareholders
of
VERBUND AG
Equity
attributable
to non-
controlling
interests
Total equity
7.0 3.3, 4.5 – 4.7,5.1 3.3, 5.1 7.0
–11,694 3,165 49,497 5,887,804 680,205 6,568,010
–11,694 3,165 49,497 5,887,804 619,364 6,507,168
–3,547 4,530 –129,265 –128,380 1,643 –126,737
–3,547 4,530 –1 29,265 503,047 79, 679 582,726
–15,241 7,694 –79,768 6,151,179 656,220 6,807,399
–15,241 7,694 –79,768 6,151,179 656,220 6,807,399
–3,352 17,834 –1,376,988 –1,301,575 8,358 –1,293,217
–3,352 17,834 –1,376,988 –428,019 119,889 –308 ,129
–18,507 25,528 –1,456,756 5,461,640 901,3 09 6,362,949
198
1. General information on the preparation of the
financial statements
1.1 Reporting company
commercial register at the Commercial Court of Vienna under number FN 76023z.
1.2 Financial reporting principles
VERBUND prepares its consolidated financial statements in accordance with Section 245a(1) of the
Austrian Commercial Code (Unternehmensgesetzbuch, UGB) in compliance with International
Financial Reporting Standards (IFRSs) as endorsed by the European Union. The additional
requirements of Section 245a(1) Austrian Commercial Code (UGB) were also satisfied. The separate
financial statements of the subsidiaries included in the consolidated financial statements are based on
uniform accounting policies. The reporting date is 31 December 2021 for all consolidated subsidiaries.
The consolidated financial statements are prepared in thousands of euros (€k) (with the exception of
the notes to the annual financial statements, in which amounts are generally indicated in millions of
euros (€m)). Rounding differences can arise when adding rounded amounts and when calculating
percentages.
All material companies controlled by VERBUND AG (subsidiaries) are included in the consolidated
financial statements of VERBUND by means of consolidation. Inclusion in the consolidated financial
statements begins when control is achieved and ends when it ceases. Subsidiaries are initially
consolidated using the acquisition method.
Joint ventures and associates that are directly or indirectly substantially influenced by VERBUND AG
are accounted for using the equity method. Investees accounted for using the equity method are
recognised with their proportional IFRS profit or loss taken from (consolidated) interim or annual
financial statements for which the reporting date is not more than three months prior to VERBUND’s
reporting date.
Intra-Group transactions, receivables, liabilities and intercompany profits are eliminated taking
account of deferred taxes. With respect to intra-Group business acquisitions and mergers of joint
ventures, the historical carrying amounts of the acquired entity are carried forward to the new entity, i.e.
they are not remeasured at fair value.
Notes to the consolidated
financial statements
of VERBUND
Basic principles
Consolidation
methods
199ANNUAL FINANCIAL REPORT - GROUP
In the case of investees that are controlled together with another joint operator, if VERBUND has
rights to the assets attributable to the investee as well as obligations for its liabilities, VERBUND
recognises its share of the assets and liabilities and/or revenue and expenses.
A list of all of VERBUND’s subsidiaries, joint ventures and associates is presented in
the section entitled
Group structure. The group of subsidiaries, joint ventures and associates included in the consolidated
financial statements changed as follows in the 2021 reporting period:
Basis of consolidation
Consolidation Accounted for using
the equity method
Accounted for as a
joint operation
As at 31/12/2020 24 8 1
Change in consolidation method 1 – 1 0
Additions from business acquisitions 2 2 0
Other additions 3 0 0
As at 31/12/2021 30 9 1
of which domestic companies 15 8 1
of which foreign companies 15 1 0
In the course of a business acquisition, a 51% stake in GCA was acquired and consolidated for the first
time on 31 May 2021 (see Business acquisitions). Austrian Gas Grid Management AG (AGGM), a
subsidiary of GCA, was likewise consolidated for the first time as part of this transaction. The equity
interest in Trans Austria Gasleitung GmbH (TAG) held by GCA was included using the equity method
due to the latter’s significant influence over the investee.
SMATRICS GmbH & Co KG (SMATRICS), which was previously consolidated using equity method
accounting, was consolidated (see Business acquisitions) after the acquisition of a 20% stake from
Siemens Aktiengesellschaft Österreich effective 30 July 2021 and a 40% stake from OMV
Downstream GmbH effective 30 September 2021. The general partnership of SMATRICS, E-Mobility
Provider Austria GmbH, also acquired as part of this transaction was not consolidated due to
immateriality. The 49% equity interest in SMATRICS EnBW GmbH held by SMATRICS was included
using the equity method due to the latter’s significant influence over the investee.
VERBUND Green Power Deutschland Photovoltaik GmbH, which was previously not consolidated
due to immateriality, was consolidated for the first time in quarter 1/2021.
The other additions relate to three Spanish companies – Watt Development SPV 5 S.L.U., Watt
Development SPV 6 S.L.U. and Watt Development SPV 7 S.L.U. – which were consolidated for the first
time effective 30 November 2021.
The previously consolidated subsidiary VERBUND Trading Romania S.R.L. was deconsolidated on
1 July 2021 due to the realignment of business activities.
Basis of
consolidation
200
Acquisition of 51% stake in Gas Connect Austria GmbH
VERBUND acquired a 51% stake in GCA from OMV Gas Logistics Holding GmbH effective 31 May 2021.
The agreed purchase price for OMV’s 51% stake in GCA was €238.7m. VERBUND also assumed GCA’s
outstanding liabilities to OMV of around €212.2m.
GCA is responsible for the operation and construction of high-pressure natural gas pipelines in Austria. In
addition, the entity is responsible for the marketing and preparation of transportation capacities to the
border crossing points and for transportation capacities for natural gas needed in Austria.
The acquisition of this stake will not only sharpen VERBUND’s business profile as the owner and
operator of critical infrastructure and have a positive impact on its KPIs; it will in particular put the
Group in an ideal position for sector coupling with the potential for a future hydrogen economy. In
combination with VERBUND’s renewable generation portfolio, GCA’s transportation infrastructure can
make an important and valuable contribution to the achievement of climate targets. The company is
assigned to the Grid segment.
The final fair values of the identifiable assets and liabilities of the GCA subgroup were broken down as
follows at the acquisition date:
Assets acquired and liabilities assumed €m
Fair value at the
acquisition date
Concessions, rights, licences 25.9
Land and buildings 100.3
Machinery 88.7
Gas pipelines 412.6
Office and plant equipment 57.3
Plants under construction and projects 37.4
Right-of-use assets 4.3
Interests accounted for using the equity method 94.7
Other equity interests 5.2
Other investments 7.9
Non-current other receivables
1
46.7
Inventories 6.3
Trade receivables and current other receivables
2
22.4
Cash and cash equivalents 8.2
Total assets acquired 918.0
Business
acquisitions
201ANNUAL FINANCIAL REPORT - GROUP
Assets acquired and liabilities assumed €m
Fair value at the
acquisition date
Non-current financial liabilities 147.0
Non-current provisions 61.8
Deferred tax liabilities 62.1
Non-current liabilities to affiliated companies 153.0
Non-current other liabilities 11.9
Current provisions 7.4
Current financial liabilities 0.6
Current liabilities to affiliated companies 60.0
Trade payables and current other liabilities 40.4
Total liabilities assumed 544.2
Total identifiable net assets at fair value (100%) 373.8
Share of net assets (51%) 190.6
Goodwill
3
48.1
Total consideration transferred 238.7
of which in cash 238.7
1
The TAG profit participation right with respect to material assets was subjected to an impairment test on 31 December 2021 and subsequently written down by €3.5m. //
2
For
trade receivables and current other receivables, the carrying amounts represented a realistic estimate of their fair values (due to the short maturities); they also correspond to the
gross value of the receivables. //
3
Goodwill in the amount of €48.1m was subjected to an impairment test in accordance with IAS 36 on 31 December 2021 and subsequently
written down by €8.8m. (See section 4.4.1 Impairment testing of goodwill).
The goodwill resulting from the transaction relates primarily to the potential from the transportation
of hydrogen.
VERBUND’s new subsidiaries contributed €129.1m to VERBUND’s revenue from the time of initial
consolidation to the reporting date 31 December 2021; their contribution to VERBUND’s profit for the
period was €14.2m. If the business acquisition had taken place at the beginning of the reporting period,
the new subsidiaries would have contributed €215.1m in revenue and €38.3m in net profit for the period
to the corresponding line items of VERBUND’s income statement.
In light of the complexity of the accounting policy issues in connection with this transaction, which is
to be assessed in its entirety, the initial accounting treatment of this business acquisition was classified
as “provisional” in the consolidated financial statements published since 31 May 2021. The
measurement of the acquired assets and deferred tax liabilities and the presentation of equity
investments was adjusted as at 31 December 2021.
202
Effect of the adjustment on the acquired assets and liabilities
classified as “provisional” €m
Intangible assets 18.2
Property, plant and equipment – 17.2
Right-of-use assets – 16.4
Associates – 46.7
Other non-current receivables 46.7
Equity interest – 0.3
Total assets acquired – 15.8
Deferred tax liabilities 37.3
Total liabilities assumed 37.3
Total identifiable net assets at fair value 21.5
Goodwill 27.1
Acquisition of 100% stake in SMATRICS GmbH & Co KG
VERBUND acquired 40% of the interest in SMATRICS from OMV Downstream GmbH effective
30 September 2021. Thus, following the acquisition of the 20% stake from SIEMENS Aktiengesellschaft
already carried out on 30 July 2021, VERBUND increased its equity interest in SMATRICS to 100%. The
agreed purchase price for OMV’s 40% interest in SMATRICS was €19.6m. VERBUND also assumed the
outstanding liabilities of SMATRICS to OMV in the amount of around €3.6m.
SMATRICS is a leading full-service provider for charging solutions, software products and services
along the entire electromobility value chain. The acquisition of the interest in SMATRICS is intended to
boost VERBUND’s positioning in the electromobility market. In addition, the concentration and further
expansion of SMATRICS as a technology company and service provider is to be expedited. The
company is assigned to the Sales segment.
203ANNUAL FINANCIAL REPORT - GROUP
The fair value of the identifiable assets and liabilities of SMATRICS as at the acquisition date of the
OMV stake was as follows:
Assets acquired and liabilities assumed €m
Fair value at the
acquisition date
Concessions, rights, licences 0.0
Machinery 0.0
Office and plant equipment 0.1
Interests accounted for using the equity method 12.5
Inventories 0.7
Trade receivables and current other receivables
1
4.1
Cash and cash equivalents 2.9
Total assets acquired 20.4
Non-current other liabilities 0.0
Current provisions 2.0
Current liabilities to affiliated companies 7.3
Trade payables and current other liabilities 2.6
Total liabilities assumed 11.9
Total identifiable net assets at fair value (100%)
8.5
Consideration transferred (40% stake)
2
19.6
Fair value equity interest 29.4
Subtotal 49.0
Goodwill (100%) 40.5
1
For trade receivables and current other receivables, the carrying amounts represented a realistic estimate of their fair values (due to the short maturities); they also correspond
to the gross value of the receivables. //
2
The consideration was transferred entirely in cash.
The goodwill resulting from the transaction can be attributed primarily to the area of electromobility
currently being established. SMATRICS will realise economies of scale with an increase in medium-
term with new customers and is expected to generate a profit in the medium term.
The consolidation difference between the carrying amount and fair value of the previously held
interest in SMATRICS in the amount of around €11.9m arising in the course of the transitional
consolidation was recorded as income in the other result from equity interests.
VERBUND’s new subsidiary contributed €10.0m to VERBUND’s revenue from the time of initial
consolidation to the reporting date 31 December 2021; its contribution to VERBUND’s profit or loss for
the period was €–
51k. If the business acquisition had taken place at the beginning of the reporting
period, the new subsidiary SMATRICS would have contributed around €18.8m in revenue and a net loss
of €–
2.9m for the period to the corresponding line items of VERBUND’s income statement.
204
In the separate financial statements of Group companies, all transactions denominated in foreign
currency are measured at the spot exchange rate on the transaction date. Monetary balance sheet items
are subsequently measured at the respective spot exchange rate at the reporting date. Exchange gains
and losses are recognised through profit or loss under other financial result.
The Group’s reporting currency is the euro. The functional currency of VERBUND AG, the
consolidated subsidiaries (with the exception of VERBUND Wind Power Romania SRL) and all
investees accounted for using the equity method is the euro. For the consolidated financial statements
of VERBUND, the annual financial statements of the Romanian subsidiary are translated into euros
using the functional currency method.
Assets and liabilities of foreign Group companies with a functional currency other than the euro are
translated using the foreign exchange reference rate of the European Central Bank (ECB) or exchange
rates published by local national central banks prevailing at the reporting date. Expenses and income
are translated at average monthly exchange rates. Differences arising from translation at exchange rates
prevailing at the reporting date are recognised in other comprehensive income and shown as a separate
item in equity.
The exchange rates underlying the currency translation changed as follows:
Foreign exchange rates used for currency translation
31/12/2020 31/12/2021 2020 2021
Country Currency Closing rate Closing rate Average rate Average rate
Romania €1 = RON 4.8694 4.9481 4.8370 4.9202
Regulatory assets and liabilities result from temporarily higher/lower revenue due to the grid tariffs set
by the regulator. With its Grid operating segment, VERBUND is subject to such a rate structure
regulated by Energie-Control Austria für die Regulierung der Elektrizitäts- und Erdgaswirtschaft
(E-Control). If the general criteria for recognition under IFRSs are not met, neither regulatory assets nor
regulatory liabilities are recognised in the consolidated financial statements of VERBUND.
Currency translation
Regulatory assets
and liabilities
205ANNUAL FINANCIAL REPORT - GROUP
In the 2021 reporting period, the following new or amended standards and interpretations had to be
applied for the first time or were applied early by VERBUND:
Newly applicable or applied accounting standards
Standard or interpretation Published by the
IASB (endorsed
by the EU)
Mandatory
application for
VERBUND
Material effects on the
consolidated financial
statements of VERBUND
IFRS 4 Extension of the Temporary
Exemption from Applying
IFRS 9
25/6/2020
(15/12/2020)
1/1/2021 None
IFRS 16 COVID-19-Related Rent
Concessions Beyond
30 June 2021
30/8/2021
(31/8/2021)
1/4/2021 None
IFRS 9,
IAS 39,
IFRS 7,
IFRS 4 and
IFRS 16
Interest Rate Benchmark
Reform – Phase 2
27/8/2020
(13/1/2021)
1/1/2021 None
New accounting standards not yet applicable or applied
The IASB has also issued new standards that were not applied by VERBUND in the 2021 reporting
period because they have either not yet been endorsed by the European Union or their application was
not yet mandatory:
New accounting standards not yet applicable or applied
Standard or interpretation Published by the
IASB (endorsed
by the EU)
1
Mandatory
application for
VERBUND
Expected material effects
on the consolidated
financial statements
of VERBUND
IAS 1 Amendment:
Classification of Liabilities as
Current or Non-current
23/1/2020
(open)
1/1/2023 None
IAS 1 and
IFRS
Practice
Statement 2
Amendment:
Disclosure of Accounting
Policies and Making
Materiality Judgements
12/2/2021
(open)
1/1/2023 None
IAS 8
Definition of Accounting
Estimates
12/2/2021
(open)
1/1/2023 None
Newly applicable or
applied accounting
standards
206
New accounting standards not yet applicable or applied
Standard or interpretation Published by the
IASB (endorsed
by the EU)
1
Mandatory
application for
VERBUND
Expected material effects
on the consolidated
financial statements
of VERBUND
IAS 12 Amendment: Deferred Tax
related to Assets and
Liabilities arising from a Single
Transaction
7/5/2021
(open)
1/1/2023 None
IFRS 17 Insurance Contracts 9/12/2021
(open)
1/1/2023 None
IFRS 3 Reference to the Conceptual
Framework
14/5/2020
(28/6/2021)
1/1/2022 None
IAS 16 Amendments: Property, Plant
and Equipment –
Proceeds before Intended Use
14/5/2020
(28/6/2021)
1/1/2022 None
IAS 37 Amendment: Onerous
Contracts –
Cost of Fulfilling a Contract
14/5/2020
(28/6/2021)
1/1/2022 None
Various
Annual Improvements to IFRS
Standards 2018– 2020
14/5/2020
(28/6/2021) 1/1/2022 None
1
Basis: EU Endorsement Status Report from 28 December 2021
The effects of climate change on the measurement of VERBUND’s assets are evaluated in regular
intervals, whereby VERBUND works with scenarios focusing on meteorology and hydrology. The
climate-based scenario analysis directly affects VERBUND’s strategy in that the investment programme
focuses on the construction of regenerative power plants, the expansion of transmission networks and
steps to increase efficiency at existing power plants. No significant measurement effects as a result of
changes in the quantities relevant for energy production have been identified to date in connection with
the evaluated climate scenarios. Estimates and assumptions made when the targeted carbon neutrality
is implemented politically in the gas sector influence the measurement of relevant assets.
Effect of climate
change
207ANNUAL FINANCIAL REPORT - GROUP
Valuation effects of energy derivatives
As a result of the significantly higher prices on the electricity and gas market in the second half of 2021,
there were considerable distortions in the presentation of these line items in the income statement due
to the resulting valuation effects both in revenue as well as in procurement expenses. In order to
continue providing a true and fair view and to ensure comparability with the financial statements of
companies in the same or similar industries, the presentation of the valuation results of energy
derivatives recognised through profit or loss in accordance with IFRS 9 was adjusted. The measurement
gains or losses from energy derivatives previously presented in revenue and procurement expenses are
now shown separately in the new line item Measurement and realisation of energy derivatives. The
change in accounting methods was applied retrospectively in accordance with IAS 8 by adjusting all
comparative information.
Adjustment amounts €m
2020
Before
adjustment
Adjustment 2020
After adjustment
Revenue 3,234.6 215.2 3,449.8
Expenses for electricity, grid, gas and
certificate purchases – 1,316.6 – 87.8 – 1,404.4
Measurement and realisation of energy derivatives 0.0 – 127.4 – 127.4
Effect of the adjustment on EBITDA 0.0 0.0 0.0
Adjustment amounts €m
2021
Before
adjustment
Adjustment
2021
After adjustment
Revenue 896.9 3,879.8 4,776.6
Expenses for electricity, grid, gas and
certificate purchases 1,536.9 – 4,149.4 – 2,612.6
Measurement and realisation of energy derivatives 0.0 269.7 269.7
Effect of the adjustment on EBITDA 0.0 0.0 0.0
Investment in KELAG-Kärntner Elektrizitäts-Aktiengesellschaft
accounted for using the equity method
VERBUND AG holds a direct investment (80.54%) in VERBUND Hydro Power GmbH (VHP) and at the
same time an indirect investment in the same company via the consolidated equity interest in
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft (KELAG) accounted for using the equity method.
As a result of this cross-shareholding and the associated reciprocal interests, the interest in VHP that
flows indirectly back to the VERBUND Group via the investment in KELAG (corresponds to 3.52%) is
eliminated in order to avoid recognising this interest twice in the result accounted for using the equity
method. The change was applied retrospectively in accordance with IAS 8 by adjusting all comparative
figures.
Adjustments in
accordance with
IAS 8
208
Adjustment amounts €m
1/1/2020
Before
adjustment
Adjustment 1/1/2020
After
adjustment
Interests accounted for using the equity method (balance sheet) 332.2 – 60.8 271.3
Attributable to non-controlling interests (balance sheet) 680.2 – 60.8 619.4
Effect of the adjustment on the Group result 0.0 0.0 0.0
Adjustment amounts €m
31/12/2020
Before
adjustment
Adjustment 31/12/2020
After
adjustment
Result from interests accounted for using the equity method
(income statement)
43.3 – 14.5 28.8
Attributable to non-controlling interests (income statement) – 92.5 14.5 – 78.0
Attributable to non-controlling interests (balance sheet) 722.8 – 66.5 656.2
Interests accounted for using the equity method (balance sheet) 349.3 – 66.5 282.7
Effect of the adjustment on profit or loss for the period 723.9 – 14.5 709.5
Effect of the adjustment on the Group result 0.0 0.0 0.0
2. Discretionary judgements and key assumptions concerning the future
Preparers of financial statements are granted various options in connection with the application of
IFRSs. For this reason, the management must make discretionary decisions as well as estimates and
assumptions regarding future developments that can have a significant influence on amounts shown in
these consolidated financial statements. The amounts actually realised can differ from the amounts
recognised based on the decisions and assumptions that were made. Estimates and the underlying
assumptions are regularly reviewed and adjusted if necessary.
The following discretionary decisions and assumptions regarding the future have a significant
influence on the financial statements:
Discretionary decisions and assumptions regarding the future
Assessment of the terms of leases Section 4.3
Determination of the discount rate for impairment testing Section 4.4
Determination of the expected cash flows for impairment testing of goodwill Section 4.4.1
Determination of the expected cash flows for impairment testing of power plants Section 4.4.2
Determination of the discount rate for the measurement of pensions and
similar obligations as well as statutory termination benefits
Section 9.2
Determination of measurement parameters for other provisions Section 9.3
Determination of the likelihood of contingent liabilities Section 13.1
Evaluation of whether other entities are controlled or jointly managed by VERBUND or whether
VERBUND can exert a significant influence on another entity and/or whether an entity represents
a joint operation of VERBUND
Section 13.4
209ANNUAL FINANCIAL REPORT - GROUP
3. Performance in the financial year
3.1 Segment reporting
In accordance with Section 8(3) of the Austrian Electricity Industry and Organisation Act
(Elektrizitätswirtschafts- und -organisationsgesetz, ElWOG), integrated electricity companies must
publish separate balance sheets and income statements for electricity generation, electricity trading
and supply activities, transmission activities and distribution activities. However, in accordance with
IFRS 8, VERBUND’s segment reporting is to be oriented towards internal management and reporting
(management approach). Therefore the definition of the operating segments and the contents of the
report corresponds to the structure of internal reporting to the Executive Board as the primary decision-
maker:
Definition of operating segments
Hydro Hydropower generation technology
New renewables Wind and photovoltaic generation technologies
Sales Trading and sales activities
Grid Activities of Austrian Power Grid AG (APG), Gas Connect Austria GmbH (GCA)
and Austrian Gas Grid Management AG (AGGM)
All other segments
Thermal generation Electricity and thermal generation of VERBUND Thermal Power GmbH & Co
KG from natural gas
Services Intra-Group business activities of VERBUND Services GmbH
Equity interests Equity interest in KELAG-Kärntner Elektrizitäts-Aktiengesellschaft
Segments that do not exceed the quantitative thresholds are summarised in the category
All other segments. The Reconciliation/consolidation column includes the activities of VERBUND AG
and VERBUND Finanzierungsservice GmbH as well as unconsolidated equity interests that have not
been allocated to a segment and consolidations which must be carried out at Group level.
The following key performance indicators are reported for the control and management of the
operating segments:
Key performance indicators – segment reporting
EBITDA Internal measurement of the performance of each operating segment.
Transactions between operating segments are carried out at arm’s length.
Result from interests accounted
for using the equity method
Assessment of the Equity interests segment
Capital employed Total assets less those assets that do not (yet) contribute to the performance
and commercialisation processes and less non-interest-bearing debt.
Other material non-cash items include measurement effects from energy derivatives, the reversal of
contributions to building costs, non-cash changes in provisions and write-downs of primary energy
sources in inventory.
All segment data are measured in accordance with IFRSs.
210
Operating segment data €m
Hydro New
renewables
Sales Grid All other
segments
Recon-
ciliation/
consoli-
dation
Total
Group
2021
External revenue 101.2 96.0 3,316.8 1,215.4 44.1 3.1 4,776.6
Internal revenue 1,364.3 30.4 548.7 31.5 339.3 – 2,314.1 0.0
Total revenue 1,465.5 126.4 3,865.5 1,246.9 383.4 – 2,311.0 4,776.6
EBITDA 1,106.0 53.3 59.6 331.3 72.5 – 43.8 1,579.0
Depreciation – 217.6 – 26.6 – 2.0 – 153.4 – 14.6 – 3.1 – 417.3
Effects from impairment
tests (operating result) 32.2 57.7 0.0 0.0 24.0 – 8.8 105.1
Other material non-cash
items 35.3 0.1 – 31.3 11.2 – 15.9 1.5 0.8
Result from interests
accounted for using the
equity method 0.3 0.3 – 2.0 0.2 36.0 0.0 34.8
Effects from impairment
tests
(financial result) 16.8 0.0 0.0 – 18.3 0.0 0.0 – 1.5
Capital employed 5,920.6 455.2 1,609.0 2,647.8 512.6 31.9 11,177.0
of which carrying
amount of interests
accounted for using the
equity method
22.1 1.5 12.5 77.9 289.9 0.0 404.1
Additions to intangible
assets and property,
plant and equipment
1
320.5 114.4 12.1 405.4 12.9 3.1 868.3
Additions to interests
accounted for using the
equity method
2
0.0 0.0 9.8 0.0 0.0 0.0 9.8
1
excl. additions from business acquisitions in the amount of €722.5m //
2
excl. additions from business acquisitions in the amount of €107.2m
211ANNUAL FINANCIAL REPORT - GROUP
Operating segment data
1
€m
Hydro New
renewables
Sales Grid All other
segments
Recon-
ciliation/
consoli-
dation
Total
Group
2020
External revenue 109.6 85.8 2,529.1 701.1 21.2 3.0 3,449.8
Internal revenue 1,157.7 24.8 209.5 29.3 163.6 – 1,584.9 0.0
Total revenue 1,267.4 110.6 2,738.5 730.4 184.8 – 1,581.9 3,449.8
EBITDA 926.8 58.9 75.5 232.4 37.9 – 38.8 1,292.8
Depreciation – 214.5 – 24.7 – 1.6 – 118.4 – 16.4 – 3.2 – 378.8
Effects from impairment
tests (operating result) – 8.8 32.9 0.0 0.0 – 16.1 0.0 7.9
Other material
non-cash items 56.0 0.0 – 2.6 7.9 5.5 1.5 68.3
Result from interests
accounted for using the
equity method 0.7 0.1 – 0.2 0.1 28.1 0.0 28.8
Effects from impairment
tests (financial result) 3.4 0.0 0.0 0.0 0.0 0.0 3.4
Capital employed 5,985.3 419.5 168.2 1,651.6 412.6 44.7 8,681.9
of which carrying
amount of interests
accounted for using the
equity method
5.0 1.3 9.7 1.4 265.4 0.0 282.7
Additions to intangible
assets and property, plant
and equipment 251.9 5.6 10.1 371.7 13.1 3.9 656.3
Additions to interests
accounted for using the
equity method 0.0 0.0 0.0 0.0 0.0 0.0 0.0
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
212
EBITDA in the total column corresponds to EBITDA in VERBUND’s income statement. Therefore, the
reconciliation to profit before tax can be taken from the income statement.
The reconciliation from the total amount for capital employed to VERBUND’s total assets results as
follows:
Reconciliation from capital employed to total assets €m
2020 2021
Capital employed 8,681.9 11,177.0
Assets not used in the performance and commercialisation process 929.6 3,599.6
Non-interest-bearing debt 2,376.2 2,335.0
Total assets of VERBUND 11,987.7 17,111.6
Under IFRS 8, entity-wide disclosures include geographical segment reporting for revenue (based on
the point of delivery) and non-current assets. In addition, information on major customers must be
provided. Disclosures regarding revenue are presented in section 3.2.1 Revenue. VERBUND does not
have any customers for whom revenue equals or exceeds 10% of total revenue.
Geographical segment reporting: non-current assets €m
2020 2021
Intangible assets and property, plant and equipment 10,075.8 11,460.8
of which in Austria 7,287.6 8,476.4
of which in Germany 2,627.0 2,673.0
of which in other EU countries 161.2 311.5
Interests accounted for using the equity method 282.7 404.1
of which in Austria 280.7 385.1
of which in other countries
1
2.0 19.0
1
This includes the equity interest in (Austrian) Ashta Beteiligungsverwaltung GmbH, which holds the equity interest in the Albanian entity Energji Ashta Shpk.
Reconciliation
Entity-wide
disclosures
213ANNUAL FINANCIAL REPORT - GROUP
3.2 Notes to the income statement
VERBUND primarily generates revenue from contracts with customers from the delivery of electricity
and gas, by operating the Austrian transmission network and the long-distance gas pipeline and gas
distribution network. The accounting policies for this revenue are presented in the tables below:
Revenue from contracts with customers
Period allowed
for payment
Significant
financing
components
Market participants from energy exchanges, traders and electric utilities 20 days No
Industrial customers 14– 60 days No
Commercial customers 14 days No
Household customers 14 days No
Revenue from operating the Austrian long-distance gas pipeline and
gas distribution network 15 days No
Revenue from operating the Austrian electricity transmission network 14 days No
3.2.1
Revenue
214
Measurement of contracts with customers in accordance with IFRS 15
Type of
contract
Contracts with customers for
the delivery of electricity and
gas
Contracts with customers as a
result of operating the
Austrian electricity
transmission network
Contracts with customers as a
result of operating the
Austrian long-distance gas
pipeline and gas distribution
network
Performance/
counter-
performance
As a rule, the consideration
received for the contracts for
the delivery of electricity and
gas comprises a capacity price
and an energy price. The
capacity price is independent
of volume, whereas the energy
price depends on the volume
of electricity and gas
purchased.
The services include mainly
system, control power and
balancing energy as well as
congestion management and
redispatch services. The
consideration received for
these services depends largely
on the electricity consumed by
the customers and/or the costs
incurred by VERBUND for each
of these services.
The services include the
marketing and provision of
transportation capacities at the
border crossing points, i.e.
entry and exit capacities, of
transportation capacities for
natural gas needed in Austria
as well as dispatching and
other services.
Revenue
recognition
Revenue is recognised as soon
as the control over the goods
and/or services is transferred to
the customers. Control is
transferred over the period in
which the service is rendered.
Revenue is realised in the
amount in which VERBUND
has fulfilled its obligations with
respect to the delivery of
electricity and gas (i.e. the
customer could purchase
electricity and/or gas at any
given time and/or has done so)
and a right to invoice the
service already rendered has
been established.
Revenue is realised in the
amount in which VERBUND
has a right to invoice the
services already rendered.
Control is transferred over the
period in which the service is
rendered.
Revenue is realised in the
amount in which VERBUND
has a right to invoice the
services already rendered.
Control is transferred over the
period in which the service is
rendered.
Special
circumstances
With some contracts to deliver
electricity and gas, the
customers are also billed for
grid costs. Since VERBUND
does not have any control over
the grid services prior to the
transfer to the customers,
VERBUND should be regarded
as an agent with respect to
these services. Therefore, no
revenue is recognised for the
grid services.
none none
215ANNUAL FINANCIAL REPORT - GROUP
Revenue by segment €m
2020 2021 2020 2021 2020 2021
Domestic Domestic Foreign Foreign Total Total
Electricity revenue resellers 64.2 56.3 35.2 35.4 99.5 91.8
Electricity revenue traders 0.2 0.4 3.6 2.9 3.8 3.2
Electricity revenue –
Hydro segment 64.4 56.7 38.8 38.3 103.2 95.0
Electricity revenue resellers 0.0 0.0 0.0 0.0 0.0 0.0
Electricity revenue traders 14.2 11.3 0.2 29.1 14.4 40.4
Electricity revenue consumers 0.0 0.0 40.7 38.5 40.7 38.5
Electricity revenues –
New renewables segment
14.2 11.3 40.9 67.6 55.1 78.9
Electricity revenue resellers 521.8 801.1 401.0 527.3 922.8 1,328.5
Electricity revenue traders 308.2 740.1 677.5 143.0 985.7 883.0
Electricity revenue consumers 290.5 560.0 265.7 425.5 556.2 985.5
Electricity revenue – Sales segment 1,120.5 2,101.2 1,344.2 1,095.8 2,464.7 3,197.0
Electricity revenue resellers 127.1 115.2 57.1 331.5 184.2 446.7
Electricity revenue traders 6.3 7.7 0.6 7.9 6.8 15.6
Electricity revenue – Grid segment 133.4 122.9 57.7 339.4 191.0 462.3
Electricity revenue –
All other segments
0.0 0.0 0.0 0.0 0.0 0.0
Electricity revenue – reconciliation 0.0 0.0 0.0 0.0 0.0 0.0
Total electricity sales revenue 1,332.5 2,292.2 1,481.5 1,541.1 2,814.0 3,833.3
Grid revenue electric utilities 322.0 442.0 22.0 8.3 344.0 450.3
Grid revenue industrial customers 3.9 7.1 0.0 0.0 3.9 7.1
Grid revenue other 39.8 105.8 109.7 171.8 149.4 277.6
Total grid revenue – Grid segment 365.7 554.9 131.6 180.1 497.3 735.0
Other revenue –
Hydro segment
6.4 6.2
Other revenues –
New renewables segment
30.7 17.1
Other revenue – Sales segment 64.4 119.7
Other revenue – Grid segment 12.8 18.1
Other revenue – All other segments 21.2 44.1
Other revenue – reconciliation 3.0 3.1
Total of other revenue 138.4 208.4
Total revenue 3,449.8 4,776.6
In the 2021 reporting period, €4.4m (previous year: €2.6m) in valuations and realisations of derivative
financial instruments in the trading area was recognised as revenue. To present business performance
more accurately, revenue from energy trading is shown as a net amount, i.e. amounts realised and
measured are each presented net of expenses. As a result, €–
1,718.6m (previous year: €2,258.3m) in
expenses was presented as a net amount in electricity revenue and €663.4m (previous year: €572.1m) in
other revenue.
216
Other revenue €m
2020 2021
Sale of gas 41.9 75.0
Sale of proof of origin and green electricity certificates 45.4 39.8
District heating deliveries 16.2 39.7
Consulting or planning services as well as other services 17.4 20.0
Other 17.5 33.9
Other revenue 138.4 208.4
Other operating income €m
2020 2021
Changes in inventory and own work capitalised 41.8 54.9
Income from (insurance) compensation
1
1.8 20.3
Various goods and services 7.0 10.8
Disposal of property, plant and equipment and intangible assets 1.7 2.6
Rent and lease income 4.5 2.1
Other 20.8 6.9
Other operating income 77.5 97.4
1
Income from insurance compensation was recognised in the amount of €17.5m in the 2021 reporting period due to property damage as a consequence of an accident on the
grounds of the Baumgarten natural gas station in 2017.
Expenses for electricity, grid, gas and certificate purchases €m
2020 2021
Expenses for electricity purchases 1,314.2 2,463.7
Expenses for gas purchases 28.2 83.2
Expenses for grid purchases (system use) 59.5 54.8
Expenses for proof of origin and green electricity certificate purchases 2.0 1.7
Purchase of emission rights (trade) 0.4 9.3
Expenses for electricity, grid, gas and certificate purchases 1,404.4 2,612.6
Fuel expenses and other usage-/revenue-dependent expenses €m
2020 2021
Use of natural gas 27.4 192.8
Other revenue-dependent expenses 19.0 24.8
Emission rights acquired in exchange for consideration 14.9 23.9
Use of coal 16.8 0.0
Other usage-dependent expenses 0.8 8.6
Fuel expenses and other usage-/revenue-dependent expenses 78.8 250.1
3.2.2
Other revenue
3.2.3
Other operating
income
3.2.4
Expenses for
electricity, grid, gas
and certificate
purchases
3.2.5
Fuel expenses and
other usage-
/revenue-dependent
expenses
217ANNUAL FINANCIAL REPORT - GROUP
Personnel expenses €m
2020 2021
Wages and salaries 264.0 290.3
Expenses for social security contributions as required by law
as well as income-based charges and compulsory contributions 58.2 65.2
Other social expenses 3.4 5.2
Subtotal 325.6 360.7
Expenses for pensions and similar obligations 17.9 18.7
Expenses for termination benefits 4.2 4.3
Personnel expenses 347.6 383.7
The pension fund contributions to the defined contribution investment and risk association
amounted to €7.6m (previous year: €7.2m) in the 2021 reporting period. Expenses for termination
benefits included a total of €2.7m (previous year: €2.2m) in contributions to an employee pension fund.
Other operating expenses €m
2020 2021
Third-party maintenance of power plants and line systems 87.8 104.9
Other third-party services received 29.9 45.4
IT expenses 25.9 34.9
Legal, consulting and audit expenses 19.2 19.9
Advertising expenses 15.4 16.1
Costs for personnel provided 14.9 14.1
Compensation payments 12.9 10.2
Material costs for motor vehicle operation and maintenance 6.0 6.7
Expenses for supervision by E-Control 11.7 14.1
Travel expenses, advanced training 6.3 7.5
Operating costs 5.0 5.3
Purchased telecommunication services 4.9 4.0
Fees 4.4 7.6
Insurance 4.0 4.9
Membership fees 2.9 3.1
Concession fees 2.7 2.7
Usage fees 2.3 3.3
Expenses from the disposal of property, plant and equipment and
intangible assets 1.2 1.6
Other 18.9 12.0
Other operating expenses 276.3 318.3
3.2.6
Personnel expenses
3.2.7
Other operating
expenses
218
Measurement and realisation of energy derivatives €m
2020 2021
Realisation futures – 49.7 1.041.7
of which positive 174.5 2.129.7
of which negative – 224.2 – 1.088.0
Valuations – 77.7 – 772.0
of which positive 297.4 3.030.7
of which negative – 375.1 – 3.802.7
Measurement and realisation of energy derivatives – 127.4 269.7
Depreciation and amortisation €m
2020 2021
Depreciation of property, plant and equipment 334.7 375.3
Depreciation of right-of-use assets 35.5 29.6
Amortisation of intangible assets 8.7 12.4
Depreciation and amortisation 378.8 417.3
Impairment losses and reversals of impairment losses €m
2020 2021
Romanian wind farms
1
32.9 58.3
Mellach combined cycle gas turbine power plant
1
– 15.3 25.2
Deferred grants for the Mellach combined cycle gas turbine power plant
1
0.4 – 0.7
Malta and Reisseck storage group
2
0.0 11.7
Zemm-Ziller storage group
2
0.0 9.0
Gries run-of-river power plant
2
– 6.6 6.6
Deferred contributions to building costs for the Gries run-of-river power
plant
2
1.0 – 1.1
Contributions to building costs for the Graz power plant on the Mur River
2
– 3.2 6.0
Goodwill of Gas Connect Austria GmbH
3
0.0 – 8.8
Other – 1.2 – 1.1
Impairment losses and reversals of impairment losses 7.9 105.1
1
See section 4.4.2 Impairment testing of power plants for details regarding the changes in value of the Romanian wind farms as well as the Mellach combined cycle gas turbine
power plant. //
2
The recoverability of the run-of-river power plants and contributions to building costs for the Gries and Graz run-of-river power plants as well as the Malta,
Reisseck and Zemm-Ziller storage groups had to be tested in the 2021 reporting period as a result of updated electricity price forecasts as well as updated discount rates.
//
3
See section 4.4.1 Impairment testing of goodwill for details regarding changes in the value of goodwill associated with Gas Connect Austria.
The result from interests accounted for using the equity method can be attributed mainly to KELAG,
which operates business lines providing electricity, gas and heat.
3.2.8
Measurement of
energy derivatives
3.2.9
Depreciation and
amortisation
3.2.10
Impairment losses
and reversals of
impairment losses
3.2.11
Result from interests
accounted for using
the equity method
219ANNUAL FINANCIAL REPORT - GROUP
Other result from equity interests €m
2020 2021
Income from the disposal of equity interests and unconsolidated subsidiaries 4.3 12.0
Income from equity interests and unconsolidated subsidiaries 6.5 8.1
Expenses arising from equity interests and unconsolidated subsidiaries – 0.6 – 0.5
Other result from equity interests 10.3 19.5
Interest income €m
2020 2021
Interest from investments under closed items on the balance sheet 30.3 30.9
Interest from money market transactions 0.3 0.7
Other interest and similar income 1.6 6.7
Interest income 32.1 38.4
Interest expenses €m
2020 2021
Interest for financial liabilities under closed items on the balance sheet 30.3 30.9
Interest for other liabilities from electricity supply commitments 14.6 13.7
Interest for bonds 12.1 10.9
Interest for bank loans 8.4 7.5
Interest on a share redemption obligation 7.7 6.5
Net interest expense on personnel-related liabilities 6.3 5.6
Interest for other non-current provisions 1.2 1.2
Borrowing costs capitalised in accordance with IAS 23 – 5.1 – 4.9
Other interest and similar expenses 5.7 6.4
Interest expenses 81.0 77.8
Other financial result €m
2020 2021
Measurement of an obligation to return an interest
1
32.9 – 23.3
Income from securities and loans 2.2 3.7
Measurement of derivatives in the finance area 1.4 2.4
Foreign exchange gains 0.0 0.1
Foreign exchange losses – 0.2 – 0.1
Change in expected credit losses – 4.2 0.0
Other 0.6 1.4
Other financial result 32.8 – 15.8
1
The obligation to transfer the 50% interest in Donaukraftwerk Jochenstein AG to the Free State of Bavaria without exchange of consideration is measured at amortised cost.
The expected fair value of the interest at the transfer date (31 December 2050) is calculated periodically and discounted based on the original effective interest rate
(corresponding to the weighted average cost of capital at the acquisition date). Changes in the expected fair value of the interest are recognised in the other financial result (see
section 8.2 Non-current other liabilities).
3.2.12
Other result from
equity interests
3.2.13
Interest income
3.2.14
Interest expenses
3.2.15
Other financial result
220
As a rule, the changes in value of derivative financial instruments related to closed items on the
balance sheet, and the liabilities measured at fair value through profit or loss are, in principle, also
recognised in the other financial result. However, the effects on profit or loss of these two items balance
each other out and were therefore not included in the above table.
The reversal of impairment losses in the financial result was related to the interest in Ashta
Beteiligungsverwaltung GmbH accounted for using the equity method in both the 2021 reporting
period as well as in the previous year. The updated electricity price forecasts and the discount rates
adjusted as at 31 December 2021 were the reason for an impairment test.
Impairment testing of Ashta Beteiligungsverwaltung GmbH
31/12/2020 31/12/2021
Cash-generating unit VERBUND and EVN AG joint venture that
holds 100% of the interest in Energji Ashta
Shpk, which in turn operates a two-stage
hydromatrix power plant (installed capacity:
53 MW) in Albania
VERBUND and EVN AG joint venture that
holds 100% of the interest in Energji Ashta
Shpk, which in turn operates a two-stage
hydromatrix power plant (installed
capacity: 53 MW) in Albania
Triggering event for
(a reduction in)
impairment
Updated electricity price forecasts and
updated discount rate
Updated electricity price forecasts and
updated discount rate
Basis for recoverable
amount
Value in use Value in use
Valuation technique Net present value approach (DCF method) Net present value approach (DCF method)
Derivation of cash flow Budgets of Energji Ashta Shpk Budgets of Energji Ashta Shpk
Volume The annual output corresponding to the
mean energy capability of 242 GWh
The annual output corresponding to the
mean energy capability of 242 GWh
Price 2021– 2028: Electricity prices based on
purchase agreement with KESH 2029–
2043: Internal price forecasts
2022– 2028: Electricity prices based on
purchase agreement with KESH 2029–
2043: Internal price forecasts
Planning period Detailed planning phase: 1 year; rough
planning phase: 22 years (long-term
reinvestment, repair and maintenance
cycles for hydropower plants)
Detailed planning phase: 1 year; rough
planning phase: 21 years (long-term
reinvestment, repair and maintenance
cycles for hydropower plants)
Key measurement
assumptions
Electricity price forecasts and discount rate Electricity price forecasts and discount
rate
After-tax discount rate
1
WACC after taxes (2021– 2028):
9.75%WACC after taxes (2029– 2043):
10.75%
WACC after taxes (2022– 2028):
7.75%WACC after taxes (2029– 2043):
8.50%
Recoverable amount €2.0m €18.9m
Reversal of
impairment losses
during the period
€3.4m €16.8m
1
The implicit pre-tax interest rate determined through a process of iteration amounted to 9.37% (previous year: 11.60%) in the 2021 reporting period.
3.2.16
Impairment losses
and reversals of
impairment losses
221ANNUAL FINANCIAL REPORT - GROUP
Sensitivity analysis for Ashta Beteiligungsverwaltung GmbH 31/12/2021
1
Value assigned
to the key
measurement
assumption
Change in key
measurement
assumptions
Effects on the
carrying
amounts of
assets
Electricity price
2
€73.2 per MWh ± 5%
€+ 2.9m
€– 2.9m
After-tax discount rate 7.75% (8.5%) ± 0.25 PP
€+ 1.0m
€– 1.0m
1
In the sensitivity analysis, one key measurement assumption was changed at a time while the other inputs were held constant. In reality, however, changes to the key
measurement assumptions can also occur simultaneously. This can result in the amplification or (at least partial) neutralisation of the effects. //
2
The electricity price shown
relates to the year 2030. The sensitivity analysis varies the price of electricity steadily over time up to the planning horizon.
Sensitivity analysis for Ashta Beteiligungsverwaltung GmbH 31/12/2020
1
Value assigned
to the key
measurement
assumption
Change in key
measurement
assumptions
Effects on the
carrying
amounts of
assets
Electricity price
2
€62.2 per MWh ± 5%
€+ 5.3m
€– 5.3m
After-tax discount rate 9.75% (10.75%) ± 0.25 PP
€+ 1.9m
€– 1.9m
1
In the sensitivity analysis, one key measurement assumption was changed at a time while the other inputs were held constant. In reality, however, changes to the key
measurement assumptions can also occur simultaneously. This can result in the amplification or (at least partial) neutralisation of the effects. //
2
The electricity price shown
relates to the year 2030. The sensitivity analysis varies the price of electricity steadily over time up to the planning horizon.
222
The impairment loss in the financial result was related to the interest in TAG accounted for using the
equity method in both the 2021 reporting period. Major changes in the energy industry environment, in
particular the significant increase in electricity and gas prices, prompted an impairment test.
Impairment testing of Trans Austria Gasleitung GmbH
31/12/2021
1
Cash-generating unit Trans Austria Gasleitung GmbH, Austrian transmission network operator
Basis for recoverable
amount
Fair value (Level 3) less costs of disposal
Valuation technique Net present value approach (DCF method)
Derivation of cash flow Trans Austria Gasleitung GmbH budgets (based primarily on near-market data)
Volume Capacity bookings
Price Tariffs published by the regulator by regulation
Planning period Detailed planning phase: 5 years;
rough planning phase: 5 years plus regulatory asset base (RAB) as exit value
Key measurement
assumptions
Regulatory interest rate of the RAB
After tax discount rate Determination of discount rate in consideration of regulatory conditions
Recoverable amount €51.6m
Impairment losses in
the period
€– 18.3m
1
impairment test on 31 December 2021, after the initial recognition of Trans Austria Gasleitung GmbH as part of the acquisition of Gas Connect Austria GmbH
effective 31 May 2021
Sensitivity analysis for Trans Austria Gasleitung GmbH 31/12/2021
Value assigned
to the key
valuation
assumption
Change in key
valuation
assumptions
Effects on the
carrying
amounts of
assets
After tax discount rate (see table above) ± 0.25 PP
€– 0.9m
€+ 0.9m
223ANNUAL FINANCIAL REPORT - GROUP
The corporate income tax rate applying to VERBUND AG is 25.0%. The following income tax rates are
applied by consolidated subsidiaries (depending on the country in which they are located):
Income tax rates applicable to subsidiaries %
2020 2021
Austria 25.0 25.0
Germany – partnerships
1
28.6 28.6
Spain – 25.0
Germany – corporations
1
24.23– 32.98 24.23– 32.43
Romania 16.0 16.0
1
The corporate income tax rate shown also includes the solidarity surcharge and municipal trade tax. The trade tax depends on the local multiplier, which varies from one
municipality to another.
Beginning with the 2005 reporting period, VERBUND took advantage of the option to form a group of
companies for tax purposes as granted by the legislature; VERBUND AG is the tax group parent. The tax
benefit resulting from the amortisation of goodwill (Section 9(7) of the 1988 Corporate Income Tax Act
(Körperschaftsteuergesetz, KStG)) within the corporate group is treated as a temporary difference for
shares in subsidiaries (outside basis difference).
Taxes on Income €m
2020 2021
Current tax expenses
1
155.1 250.0
Future tax expense for subsequent taxation of transfers of losses from
foreign members of the tax group
4.2 5.2
Deferred income tax expenses 79.6 24.1
Taxes on income 238.9 279.4
1
Current tax expenses include adjustments from prior periods in the amount of €– 1.2m (previous year: €– 4.6m).
3.2.17
Taxes on income
224
The reasons for the difference between VERBUND’s computed and recognised tax expense are as
follows:
Tax reconciliation €m
2020 2021
Computed income tax expense 237.1 316.1
Tax-exempt investment income – 6.1 – 9.4
Differing tax rates – 4.5 – 8.9
Differences from partnerships 0.9 – 6.5
Interests accounted for using the equity method – 2.7 – 4.3
Impairment testing of equity-accounted and other interests – 0.8 – 4.2
Net income not taxed due to a lack of realisability – 4.6 1.5
Amortisation of goodwill for tax purposes – 2.9 – 2.9
Goodwill amortisation IFRS 0.0 2.2
Other line items < €2m 1.7 – 1.2
Income tax expenses for the period 218.0 282.3
Income tax expenses or income from prior periods (current and deferred) 20.9 – 2.9
Recognised income tax expenses 238.9 279.4
Effective tax rate 25.2% 22.1%
Determination of earnings per share €m
2020 2021
Profit or loss for the period 709.5 985.1
Profit or loss for the period attributable to non-controlling interests – 78.0 – 111.5
Group result 631.4 873.6
Weighted average number of shares in circulation 347,415,686 347,415,686
Earnings per share in €
1
1.82 2.51
1
There were no options on the issue of new shares or other facts or circumstances that could have a diluting effect; therefore, basic and diluted earnings per share were the
same.
3.2.18
Earnings per share
225ANNUAL FINANCIAL REPORT - GROUP
3.3 Notes to the statement of comprehensive income
Reclassification adjustments to the income statement €m
2020 2021
Measurement gains or losses recognised in equity – 3.6 – 3.5
Differences from currency translation – 3.6 – 3.5
Measurement gains or losses recognised in equity
1
– 92.7 – 1,897.4
Reclassification adjustment to the income statement – 78.7 77.5
Measurement of cash flow hedges – 171.4 – 1,819.9
Measurement gains or losses recognised in equity – 0.6 – 11.9
Other comprehensive income from interests accounted for
using the equity method
– 0.6 – 11.9
Other comprehensive income – 175.6 – 1,835.3
1
The comparative figures were adjusted retrospectively in accordance with IAS 8. //
2
Of which €– 4.9m (previous year: €– 2.8m) relates to costs from hedging with options (see
section 5.2 Accounting treatment of hedging relationships).
Taxes on other comprehensive income €m
2020 2020 2020 2021 2021 2021
Before
taxes
Taxes
After
taxes
Before
taxes
Taxes
After
taxes
Remeasurements of
net defined benefit liability 13.8 – 3.3 10.5 86.5 – 22.0 64.4
Measurement of financial instruments 6.0 – 1.5 4.5 23.5 – 5.9 17.6
Other comprehensive income from
interests accounted for
using the equity method – 9.0 – – 9.0 5.1 – 5.1
Total of items that will not be
reclassified subsequently to the
income statement 10.9 – 4.8 6.0 115.0 – 27.9 87.1
Differences from currency translation – 3.6 – – 3.6 – 3.5 – – 3.5
Measurement of cash flow hedges – 171.4 42.9 – 128.6 – 1,819.9 455.0 – 1,364.9
Other comprehensive income from
interests accounted for
using the equity method – 0.6 – – 0.6 – 11.9 – – 11.9
Total of items that will be reclassified
subsequently to the income statement
– 175.6 42.9 – 132.8 – 1,835.3 455.0 – 1,380.3
Other comprehensive income – 164.8 38.0 – 126.7 – 1,720.3 427.1 – 1,293.2
3.3.1
Reclassification
adjustments to the
income statement
3.3.2
Taxes on other
comprehensive
income
226
3.4 Notes to the cash flow statement
The indirect method has been used to prepare VERBUND’s cash flow statement. The composition of
cash and cash equivalents can be seen in section 6 Working capital.
Outstanding items with respect to current liabilities arose in connection with additions to intangible
assets and property, plant and equipment in the amount of €137.5m (previous year: €127.3m).
Additional information on cash flow from financing activities
€m
2020 2021
Dividends paid to the shareholders of VERBUND AG – 239.7 – 260.6
Dividends paid to non-controlling interests – 42.8 – 58.8
4. Non-current assets
4.1 Intangible assets
Goodwill
Goodwill is not to be systematically amortised; instead, it is to be tested for impairment at least once per
year in accordance with IAS 36 (see section 4.4.1 Impairment testing of goodwill). In addition, a quality-
oriented analysis of whether there is any indication of impairment is conducted on the reporting date
for all consolidated interim financial statements.
Other intangible assets
Purchased intangible assets are measured in accordance with IAS 38 at cost less straight-line
amortisation and any impairment losses if their useful life is not classified as indefinite. The useful lives
are mainly between 10 and 20 years. Software is amortised over four years.
Research and development costs
Development costs were capitalised in the amount of €2.4m (previous year: €4.1m) in accordance with
IAS 38. Expenses for research in the total amount of €11.3m (previous year: €9.5m) were recognised in
profit or loss in the 2021 reporting period.
3.4.1
Additional
information on cash
flow from financing
activities
227ANNUAL FINANCIAL REPORT - GROUP
Emission rights
Emission rights are accounted for in accordance with the accounting policies set forth in IAS 38, IAS 20
and IAS 37 at fair value (rights allotted without exchange of consideration) or at cost (purchased rights).
For emission rights allotted without exchange of consideration, an item of deferred income is
recognised in the amount of their fair value for the grant received that is then reversed to profit or loss
under fuel expenses when the emission rights are used, amortised or sold. The obligation to return is
taken into account by means of an other liability. If cover is insufficient, VERBUND recognises an
additional provision in the amount of the fair value of the missing emission rights.
Emission rights held for trading by VERBUND are measured through profit or loss under other
revenue. According to the brokerage exemption for raw materials and commodity dealers, the
measurement benchmark is fair value less costs to sell.
Intangible assets €m
Concessions,
rights, licences
Goodwill Total
2021
Cost as at 1/1 183.0 766.8 949.8
Foreign exchange differences – 0.1 0.0 – 0.1
Additions from business acquisitions 63.4 88.5 151.9
Additions 25.5 0.0 25.5
Disposals – 6.9 0.0 – 6.9
Reclassifications 0.9 0.0 0.9
Cost as at 31/12 265.8 855.3 1,121.1
Accumulated amortisation as at 1/1 102.5 179.1 281.7
Additions from business acquisitions 37.4 0.0 37.4
Depreciation 12.4 0.0 12.4
Impairment losses 0.0 8.8 8.8
Reversals of impairment losses – 6.6 0.0 – 6.6
Disposals – 1.2 0.0 – 1.2
Accumulated amortisation as at 31/12 144.5 187.9 332.4
Net carrying amount as at 31/12 121.3 667.4 788.7
Net carrying amount as at 1/1 80.5 587.7 668.1
4.1.1
Intangible assets
228
Intangible assets €m
Concessions,
rights, licences
Goodwill Total
2020
Cost as at 1/1 162.5 766.8 929.3
Foreign exchange differences – 0.1 0.0 – 0.1
Additions 27.8 0.0 27.8
Disposals – 7.1 0.0 – 7.1
Reclassifications – 0.1 0.0 – 0.1
Cost as at 31/12 183.0 766.8 949.8
Accumulated amortisation as at 1/1 98.1 179.1 277.2
Depreciation 8.7 0.0 8.7
Impairment losses 3.2 0.0 3.2
Reversals of impairment losses – 0.4 0.0 – 0.4
Disposals – 7.0 0.0 – 7.0
Accumulated amortisation as at 31/12 102.5 179.1 281.7
Net carrying amount as at 31/12 80.5 587.7 668.1
Net carrying amount as at 1/1 64.4 587.7 652.1
4.2 Property, plant and equipment
Property, plant and equipment is measured at cost (including decommissioning and dismantling costs
required to be capitalised) less straight-line depreciation and any impairment losses. In addition to
direct material and production costs, the cost of internally manufactured plant and equipment also
includes appropriate indirect material and production costs. Borrowing costs are capitalised for
qualifying assets. VERBUND’s average monthly borrowing costs in the 2021 reporting period were
around 1.9% (previous year: around 2.5%).
Depreciation charges on depreciable property, plant and equipment are based on the expected useful
lives of its components. Specifically, the following useful lives are applied:
Useful life
In years
Residential, office, plant and other plant facilities 10– 50
Hydroplant buildings 20– 100
Gas pipelines 30
Machinery 10– 80
Electrical installations 3– 50
Power lines 50
Office and plant equipment 4– 10
The expected useful life of hydropower plants is determined independently from the terms of water
rights permits because it is presumed that these permits will be reissued when they expire. Based on
experience, this also applies for those Bavarian run-of-river power plants with existing reversion rights
229ANNUAL FINANCIAL REPORT - GROUP
for the benefit of the Free State of Bavaria. The expected useful life of the Jochenstein power plant on
the Danube was also determined independent of the existing obligation to return the power plant in
2050 (see section 8.2 Non-current other liabilities), since it is expected that VERBUND will also be the
owner and operator of the Jochenstein power plant on the Danube even after the year 2050.
In accordance with IAS 36, the recoverability of property, plant and equipment is tested when
indicators of impairment are identified (see section 4.4 Impairment of non-financial assets).
Property, plant and equipment €m
Land
and
build-
ings
Machin-
ery
Electri-
cal
instal-
lations
Power
lines
Office
and
plant
equip-
ment
Gas
pipe-
lines
Plants
under
con-
struc-
tion and
projects
Total
2021
Cost as at 1/1 7,788.3 4,603.6 3,696.2 1,535.9 202.8 0.0 856.5 18,683.0
Foreign exchange
differences – 0.5 – 4.5 – 0.1 0.0 0.0 0.0 0.0 – 5.1
Additions from
business acquisitions
149.1 182.6 7.8 0.0 187.8 754.5 39.3 1,321.0
Additions 21.6 32.9 65.9 19.4 21.2 10.7 671.2 842.8
Disposals – 9.9 – 33.4 – 51.6 – 0.9 – 8.5 – 0.4 – 0.6 – 105.3
Reclassifications 44.3 112.5 193.0 3.8 – 151.6 – 4.1 – 198.4 – 0.4
Cost as at 31/12 7,992.8 4,893.6 3,911.1 1,558.2 251.7 760.8 1,367.9 20,735.9
Accumulated depreciation
as at 1/1 3,280.5 2,675.6 2,343.9 825.8 149.4 0.0 0.3 9,275.4
Foreign exchange
differences 0.0 – 2.3 0.0 0.0 0.0 0.0 0.0 – 2.3
Additions from business
acquisitions 48.8 101.4 0.2 0.0 130.3 341.9 1.9 624.5
Depreciation 96.2 98.7 121.9 30.1 13.6 14.8 0.0 375.3
Impairment losses 0.3 0.2 0.1 0.0 0.0 0.0 0.5 1.1
Reversals of impairment
losses – 46.4 – 53.1 – 9.3 – 1.0 0.0 0.0 – 0.4 – 110.2
Disposals – 9.5 – 30.6 – 51.0 0.0 – 8.4 – 0.3 0.0 – 99.8
Reclassifications 0.1 65.8 44.5 0.0 – 109.8 – 4.5 3.9 0.0
Accumulated depreciation
as at 31/12
3,370.0 2,855.6 2,450.2 854.9 175.1 351.9 6.2 10,063.8
Net carrying amount
as at 31/12
4,622.8 2,038.0 1,461.0 703.3 76.5 408.9 1,361.6 10,672.1
Net carrying amount
as at 1/1 4,507.8 1,928.0 1,352.3 710.1 53.4 0.0 856.2 9,407.6
4.2.1
Property, plant and
equipment
230
Property, plant and equipment €m
Land and
buildings
Machin-
ery
Electrical
instal-
lations
Power
lines
Office
and plant
equip-
ment
Plants
under
construc-
tion and
projects
Total
2020
Cost as at 1/1 7,678.9 4,566.4 3,614.2 1,398.6 191.6 639.0 18,088.5
Foreign exchange
differences – 0.6 – 5.3 – 0.1 0.0 0.0 0.0 – 6.0
Change in the basis of
consolidation
0.0 0.0 0.0 0.0 0.3 0.0 0.3
Additions 42.3 22.2 53.9 37.6 15.7 456.7 628.5
Disposals – 5.2 – 1.2 – 14.8 0.0 – 5.3 – 1.8 – 28.4
Reclassifications 72.8 21.4 43.0 99.8 0.4 – 237.4 0.1
Cost as at 31/12 7,788.3 4,603.6 3,696.2 1,535.9 202.8 856.5 18,683.0
Accumulated depreciation
as at 1/1 3,189.2 2,608.8 2,242.0 797.5 139.3 0.9 8,977.7
Foreign exchange
differences – 0.2 – 3.1 – 0.1 0.0 0.0 0.0 – 3.4
Depreciation 91.9 87.3 112.7 27.8 14.9 0.0 334.7
Impairment losses 8.3 10.7 3.2 0.5 0.0 0.4 23.1
Reversals of
impairment losses – 4.1 – 27.7 – 0.8 0.0 0.0 0.0 – 32.5
Disposals – 4.7 – 0.4 – 13.2 0.0 – 5.2 – 1.0 – 24.4
Accumulated depreciation
as at 31/12 3,280.5 2,675.6 2,343.9 825.8 149.4 0.3 9,275.4
Net carrying amount
as at 31/12 4,507.8 1,928.0 1,352.3 710.1 53.4 856.2 9,407.6
Net carrying amount
as at 1/1 4,489.7 1,957.6 1,372.1 601.0 52.3 638.0 9,110.8
231ANNUAL FINANCIAL REPORT - GROUP
Additions €m
2020 2021
380-kV Salzburg line 109.6 166.2
New Töging power plant 66.4 78.4
Weinviertel grid area 64.7 59.5
Kaprun-Limberg III power plant 14.4 41.8
Malta power plant: increase in efficiency 15.7 28.7
Reißeck pumping station 2.3 21.2
Reschenpass line 7.0 17.1
General line renovations 3.0 15.4
General overhaul of substations 23.2 14.3
Automation of hydropower plants 35.6 13.9
Y
bbs power plant modernisation 14.0 13.0
Efficiency increase of Kaprun power plant 14.4 11.8
Ottensheim efficiency increase 2.1 9.1
General overhaul of 220-kV St. Peter-Ernsthofen line 33.8 0.0
Mayrhofen power plant: impeller modernisation, Lower Tuxbach diversion 17.8 0.0
Villach South substation: 220/110-kV grid support 13.6 0.0
Other additions each < €10.0m) 190.9 352.4
Total additions to property, plant and equipment 628.5 842.8
Additions
€m
Government grants
Government investment grants do not reduce the cost of assets for which they were granted, but instead
lead to the recognition of an item of deferred income in the amount of their fair value. Amounts recognised
as deferred income are reversed to profit or loss over the expected useful life of the respective asset.
Contributions to building costs
Contributions to building costs that are provided in particular by provincial energy companies entitled
to purchase electricity, for example for power plant projects, lead to the recognition of a liability. With
the payment of the contribution to building costs, the entities entitled to purchase electricity receive the
opportunity to purchase a volume of electricity equal to their share in exchange for reimbursement of
the production costs. The liability is therefore reversed to profit or loss under revenue either over the
contractual term or (for lack of such) over the useful life of the plant. The amount reversed to revenue
was €25.1m (previous year: €25.8m) in the reporting period.
Contributions to building costs and grants €m
2020 2021
Contributions to building costs 719.8 744.1
Government grants 41.2 44.2
Contributions to building costs and grants 761.0 788.4
4.2.2
Contributions to
building costs and
grants
232
4.3 Leases
VERBUND’s leases include mainly arrangements regarding the provision of power plants, buildings,
land, lines and vehicles.
Initial recognition of leases
At the inception of a contract, VERBUND assesses whether the contract is or contains a lease. If it is a
lease, a right-of-use asset is capitalised at the commencement date and a lease liability is recognised.
The amount of the right-of-use asset when the contract is first recognised corresponds to the amount of
the lease liability, adjusted, among other things, for any direct costs on the part of the lessee, advance
payments, lease incentives or dismantling obligations. The carrying amount of the lease liability is
derived by discounting the lease payments expected during the term of the lease, expected payments
from residual value guarantees, exercise prices for purchase options (if it is reasonably likely that the
option will be exercised) and the payment of any penalties for the early termination of the contract
(if it is likely that the lease will be terminated early). The carrying amount is discounted at the interest
rate implicit in the lease if that rate can be readily determined. Otherwise, the carrying amount is
discounted based on VERBUND’s incremental borrowing rate.
Determination of the term of leases
Determining the term of a lease when a clear fixed term has not been agreed in advance can be fraught
with measurement uncertainties. All facts and circumstances that represent an economic incentive for
the exercise of a renewal option and/or the non-exercise of a termination option are taken into account
when determining the term. For land leases in particular, contracts are frequently concluded for as long
as the leased power plant or line is expected to continue to function at its present level or in the form of
an indefinite lease. In these cases, the presumed duration of the lease is oriented on the expected useful
life of the power plant or line.
Subsequent measurement of leases
The right-of-use asset is depreciated systematically based on the shorter period of the useful life of the
asset or the remaining term of the lease. The lease liability is marked up for accruing interest and
reduced by lease payments.
Right-of-use assets €m
Land and
buildings
Electrical
installations
Power lines
Operating and
office
equipment
Total
As at 1/1/2021 85.9 7.8 14.0 3.0 110.7
Additions 15.6 0.4 5.5 2.0 23.5
Depreciation – 27.7 – 0.5 0.0 – 1.4 – 29.6
Disposals – 0.7 0.0 0.0 – 0.1 – 0.7
As at 31/12/2021 73.1 7.7 19.5 3.6 103.8
233ANNUAL FINANCIAL REPORT - GROUP
Right-of-use assets €m
Land and
buildings
Electrical
installations
Power lines Operating and
office
equipment
Total
As at 1/1/2020 115.9 8.1 6.3 3.1 133.4
Additions 5.3 0.2 7.7 1.4 14.6
Depreciation – 33.7 – 0.5 0.0 – 1.2 – 35.5
Disposals – 1.6 0.0 0.0 – 0.2 – 1.9
As at 31/12/2020 85.9 7.8 14.0 3.0 110.7
Amounts from leases recognised in profit or loss €m
2020 2021
Expense from unwinding of the discount of lease liability 1.0 1.0
Variable lease payments that were not recognised in the lease liability 0.5 0.1
Expenses from underlying assets of low value 0.1 0.1
Variable payments that are not factored into the measurement of the lease liability in accordance
with IFRS 16 relate in particular to lease contracts for wind farms in Austria. Such payments are
expected in subsequent years in a similar volume as in the reporting period.
Expected cash outflows as at 31/12/2021 €m
Maturity 2022 2023 2023– 2025 from 2026
Lease liabilities 9.3 8.2 17.2 78.4
Cash outflows on liabilities in accordance with IFRS 7 9.3 8.2 17.2 78.4
Expected cash outflows as at 31/12/2020 €m
Maturity 2021 2022 2022– 2024 from 2025
Lease liabilities 23.9 7.0 15.2 76.3
Cash outflows on liabilities in accordance with IFRS 7 23.9 7.0 15.2 76.3
234
4.4 Recoverability of non-financial assets
Recoverability of intangible assets and property, plant and equipment
Under IAS 36, the carrying amounts, in particular, of intangible assets and property, plant and
equipment are tested for impairment if there are indications thereof. An impairment test is to be
conducted at least once per year for goodwill, intangible assets with an indefinite useful life and
intangible assets that are not yet available for use (see section 4.4.1 Impairment testing of goodwill).
Determination of the discount rate
The discount rate is an after-tax interest rate that reflects current market estimates, the time value of
money and the specific risks associated with the asset (or cash-generating unit); the corresponding pre-
tax interest rate is determined iteratively.
The weighted average capital costs (WACC) are applied to determine recoverable amounts using net
present value methods. The weighting of the return on equity and the cost of debt was derived from an
adequate peer group. The return on equity is determined from a reference rate, market risk premium
and beta factor using the capital asset pricing model (CAPM). The cost of debt before tax corresponds to
the return on debt instruments traded on the market with an equivalent risk of default and matching
maturities. Corresponding premiums are taken into account in order to adequately depict country risks.
In view of the volatile financial market environment, the development of capital costs (and in particular
country risk premiums) is under continuous observation.
Determination of fair value
Fair values are to be determined primarily based on market prices and can, for example, be based on
existing binding offers, secondary price formation on active markets or comparable recent transactions
within the industry according to the measurement hierarchy in IFRS 13. If fair value cannot be
determined based on market prices, valuation techniques based on a net present value approach
(discounted cash flow method) are used. Future investments to enhance or improve performance and
restructuring expenditures are taken into account when determining fair value. Price listings for energy
futures are used in pricing as long as there is a liquid market. Accordingly, the most recent price listings
are applied to the average price forecasts of two reputable information service providers in the energy
market by means of linear interpolation.
The excess financial return expected in the period after the end of the applicability of the price
forecasts in the energy market (= terminal value phase) is taken into account by way of terminal value
calculation, whereby the calculation is based on an assumption that the excess financial return will
grow at a rate of 2%.
235ANNUAL FINANCIAL REPORT - GROUP
Determination of value in use
As a rule, value in use is determined using net present value methods (discounted cash flow method).
Prices are determined using price listings for energy futures and the VERBUND Energy Market Model
(VEMM). The VEMM is an energy simulation tool for the development of medium- and long-term
electricity and natural gas price scenarios for energy markets. Cash flows are generally derived from the
recent medium-term plans approved by management.
The excess financial return expected in the period after the end of the applicability of the price
forecasts in the VEMM (= terminal value phase) is taken into account by way of terminal value
calculation, whereby the calculation is based on an assumption that the excess financial return will
grow at a rate of 2%.
Recognition of impairment losses and reversals of impairment losses
If the reasons for impairment no longer apply in a subsequent period, a reversal is to be recognised in
profit or loss. Both impairment losses as well as reversals of impairment losses are recognised in profit
or loss, presented in the income statement and segment reporting as impairment losses and/or
reversals of impairment losses and explained in the notes.
4.4.1 Impairment testing of goodwill
For the purpose of impairment testing, VERBUND’s goodwill was allocated to the following cash-
generating units or groups of cash-generating units:
Goodwill €m
2020 2021
Hydro operating segment 287.0 287.0
Sales operating segment 13.0 13.0
Inn River power plant group 126.6 126.6
Grenzkraftwerke power plant group 161.1 161.1
Gas Connect Austria
1
– 39.3
SMATRICS GmbH & Co KG
1
– 40.5
Goodwill 587.7 667.4
1
Details regarding the goodwill recognised for the first time in the 2021 reporting period can be found in the section entitled Business acquisitions.
236
Impairment testing of goodwill for the Hydro segment
31/12/2020 31/12/2021
Group of cash
generating units
All hydraulic energy power plants of
VERBUND plus goodwill and deferred tax
accruals
All hydraulic energy power plants of
VERBUND plus goodwill and deferred tax
accruals
Basis for
recoverable amount
Value in use Value in use
Valuation technique Sum-of-the-parts measurement based on a
net present value approach (DCF method)
Sum-of-the-parts measurement based on a
net present value approach (DCF method)
Derivation of cash flow Budgets of VERBUND
(based primarily on near-market data)
Budgets of VERBUND
(based primarily on near-market data)
Volume Average expected generation of the
respective power plants
Average expected generation of the
respective power plants
Price Internal price forecasts and power plant-
specific premiums or discounts (for
example, the sale of guarantees of origin)
Internal price forecasts and power plant-
specific premiums or discounts (for
example, the sale of guarantees of origin)
Planning period Detailed planning phase: up to a maximum
of 6 years depending on the specific power
plant; rough planning phase: up to a
maximum of 24 years depending on the
specific power plant; subsequent terminal
value phase following rough planning phase
depending on the specific power plant
Detailed planning phase: up to a maximum
of 6 years depending on the specific
power plant; rough planning phase: up to
a maximum of 23 years depending on the
specific power plant; subsequent terminal
value phase following rough planning
phase depending on the specific power
plant
Key measurement
assumptions
Electricity price, discount rate Electricity price, discount rate
After tax discount rate WACC: 4.00% to 8.50% depending on the
location
1
WACC: 4.00% to 8.50% depending on the
location
1
Impairment loss
during the period
1
– –
1
In 2021 the implicit input tax interest rate determined through a process of iteration amounted to 4.82%– 9.37% (previous year: 4.37%– 11.60%). //
2
Management believes the
carrying amount of the Hydro segment’s assets including goodwill will not exceed the recoverable amount as a result of potential changes in the key measurement assumptions.
237ANNUAL FINANCIAL REPORT - GROUP
Impairment testing of goodwill for the Sales segment
31/12/2020 31/12/2021
Group of cash
generating units
All of VERBUND’s sales activities plus
goodwill
All of VERBUND’s sales activities plus
goodwill
Basis for
recoverable amount
Value in use Value in use
Valuation technique Sum-of-the-parts measurement based on a
net present value approach (DCF method)
Sum-of-the-parts measurement based on a
net present value approach (DCF method)
Derivation of cash flow Budgets of VERBUND
(based primarily on near-market data)
Budgets of VERBUND
(based primarily on near-market data)
Volume Expected trading and distribution volumes Expected trading and distribution volumes
Price Expected trading and distribution volumes Expected trading and distribution volumes
Planning period Detailed planning phase of 6 years followed
by a terminal value phase
Detailed planning phase of 6 years
followed by a terminal value phase
Key measurement
assumptions
Expected trading and distribution volumes
as well as trading and sales margins
Expected trading and distribution volumes
as well as trading and sales margins
After tax discount rate WACC after taxes 4.00% WACC after taxes: 4.00%– 10.00%
1
Impairment loss
during the period
2
– –
1
The implicit input tax interest rate determined through a process of iteration amounted to 5.60– 12.00% (previous year: 5.29%) //
2
Management believes the carrying amount of
the Renewable generation segment’s assets including goodwill will not exceed the recoverable amount as a result of potential changes in the key measurement assumptions.
238
Impairment testing of goodwill for the Inn River power plant group
31/12/2020 31/12/2021
Group of cash
generating units
Run-of-river power plants of the Inn River
power plant group
1
that also each represent
a cash-generating unit, plus goodwill and
deferred tax accruals
Run-of-river power plants of the Inn River
power plant group
1
that also each
represent a cash-generating unit, plus
goodwill and deferred tax accruals
Basis for recoverable
amount
Value in use Value in use
Valuation technique Net present value approach (DCF method) Net present value approach (DCF method)
Derivation of cash flow VERBUND Innkraftwerke GmbH budgets
(based mainly on near-market data)
VERBUND Innkraftwerke GmbH budgets
(based mainly on near-market data)
Volume Annual output corresponding to the mean
energy capability of 1,855 or 1,975 GWh
(after conclusion of the Töging
modernisation project)
Annual output corresponding to the mean
energy capability of 1,855 or 1,994 GWh
(after conclusion of the Töging
modernisation project)
Price Internal price forecasts; discounts for
generation characteristics and the
hydrological forecast and availability risk;
premium for additional proceeds from the
sale of guarantees of origin (derived from
quoted price); consideration of the water
charges based on official notices; estimate
of the maintenance costs by the managers
responsible
Internal price forecasts; discounts for
generation characteristics and the
hydrological forecast and availability risk;
premium for additional proceeds from the
sale of guarantees of origin (derived from
quoted price); consideration of the water
charges based on official notices; estimate
of the maintenance costs by the managers
responsible
Planning period Detailed planning phase: 6 years;
rough planning phase: 24 years followed
by a terminal value phase
Detailed planning phase: 6 years;
rough planning phase: 23 years followed
by a terminal value phase
Key measurement
assumptions
Electricity price, discount rate Electricity price, discount rate
After tax discount rate WACC: 3.75%
2
WACC: 4.00%
2
Impairment losses
during the period
3
– –
1
The Inn River power plant group comprises the following run-of-river power plants: Aubach, Feldkirchen, Gars, Jettenbach II, Neuötting, Perach, Rosenheim, Stammham,
Teufelsbruck, Töging and Wasserburg. //
2
The implicit input tax interest rate determined through a process of iteration amounted to 4.82% (previous year: 4.37%). //
3
Management believes the carrying amount of the Inn River power plant group assets including goodwill will not exceed the recoverable amount as a result of potential changes
in the key measurement assumptions.
239ANNUAL FINANCIAL REPORT - GROUP
Impairment testing of goodwill for the Grenzkraftwerke run-of-river power plant group
1
31/12/2020 31/12/2021
Group of cash
generating units
Run-of-river power plants of the
Grenzkraftwerke run-of-river power plant
group
2
that each represent a cash-
generating unit plus goodwill and deferred
tax accruals
Run-of-river power plants of the
Grenzkraftwerke run-of-river power plant
group
2
that each represent a cash-
generating unit plus goodwill and deferred
tax accruals
Basis for recoverable
amount
Value in use Value in use
Valuation technique Net present value approach (DCF method) Net present value approach (DCF method)
Derivation of cash flow Grenzkraftwerke GmbH’s budgets
(based primarily on near-market data)
Grenzkraftwerke GmbH’s budgets
(based primarily on near-market data)
Volume The annual output corresponding to the
mean energy capability of 3,957 GWh
The annual output corresponding to the
mean energy capability of 3,957 GWh
Price Internal price forecasts; discounts for
generation characteristics and the
hydrological forecast and availability risk;
premium for additional proceeds from the
sale of guarantees of origin (derived from
quoted price); consideration of the water
charges based on official notices (GER);
estimate of the maintenance costs by the
managers responsible
Internal price forecasts; discounts for
generation characteristics and the
hydrological forecast and availability risk;
premium for additional proceeds from the
sale of guarantees of origin (derived from
quoted price); consideration of the water
charges based on official notices (GER);
estimate of the maintenance costs by the
managers responsible
Planning period Detailed planning phase: 6 years;
rough planning phase: 24 years followed
by a terminal value phase
Detailed planning phase: 6 years;
rough planning phase: 23 years followed
by a terminal value phase
Key measurement
assumptions
Electricity price, discount rate Electricity price, discount rate
After tax discount rate Austria: WACC: 4.00%
3
Germany: WACC: 3.75%
Austria: WACC: 4.25%
3
Germany: WACC: 4.00%
Impairment loss
during the period
4
– –
1
The following notes relate to the second step of the two-step impairment test of the Grenzkraftwerke run-of-river power plant group. The recoverability of the individual run-of-
river power plants was tested in the first step. //
2
The Grenzkraftwerke run-of-river power plant group comprises the following power plants: Braunau-Simbach, Egglfing-
Obernberg, Ering-Frauenstein, Jochenstein, Nußdorf, Oberaudorf-Ebbs, Passau-Ingling and Schärding-Neuhaus. //
3
In 2020 the implicit input tax interest rate determined
through a process of iteration amounted to 5.16%–
5.24% (previous year: 4.70%– 4.78%). //
4
According to management, the carrying amount of the Grenzkraftwerke power
plant group (less deferred tax liabilities) plus goodwill does not exceed the recoverable amount as a result of possible changes in key measurement assumptions.
240
Impairment testing of goodwill for Gas Connect Austria
31/12/2021
1,2
Group of cash
generating units
Gas Connect Austria GmbH (GCA), Austrian Gas Grid Management AG (AGGM), Trans
Austria Gasleitung GmbH (TAG), TAG profit participation right with respect to material
assets plus goodwill less deferred tax accruals
Basis for recoverable
amount
Fair value (Level 3) less costs of disposal
Valuation technique Net present value approach (DCF method)
Derivation of cash flow Gas Connect Austria GmbH budgets (based primarily on near-market data)
Volume Capacity bookings
Price Tariffs published by the regulator by regulation
Planning period
Detailed planning phase: 6 years; rough planning phase: 33 years plus regulatory asset
base (RAB) as exit value
Key measurement
assumptions
Regulatory interest rate of the RAB
After tax discount rate Determination of discount rate in consideration of regulatory conditions
Recoverable amount €852.7m
Impairment losses
during the period
€– 8.8m
1
Goodwill impairment test on 31 December 2021, after the acquisition of GCA effective 31 May 2021. //
2
The following notes relate to the second step of the two-step
impairment test of the GCA group of cash-generating units. The recoverability of the GCA units, including AGGM, the equity interest in TAG and the TAG profit participation right
with respect to material assets were tested in the first step.
Sensitivity analysis for Gas Connect Austria 31/12/2021
Value assigned
to the key
valuation
assumption
Change in key
valuation
assumptions
Effects on the
carrying
amounts of
assets
After tax discount rate (see table above) ± 0.25 PP
€– 10.0m
€+ 10.0m
241ANNUAL FINANCIAL REPORT - GROUP
Impairment testing of goodwill for SMATRICS GmbH & Co KG
31/12/2021
1
Cash-generating unit SMATRICS GmbH & Co KG, full-service provider for electromobility charging solutions
Basis for recoverable
amount
Value in use
Valuation technique Net present value approach (DCF method)
Derivation of cash flow SMATRICS GmbH & Co KG budgets (based primarily on near-market data)
Volume Electric vehicle ramp-up
Price Charging rates
Planning period Detailed planning phase: 9 years plus subsequent terminal value phase
Key measurement
assumptions
Electric vehicle ramp-up, discount rate
After tax discount rate WACC: 10.00%
2
Impairment losses
during the period
–
1
Goodwill impairment test on 31 December 2021, after increasing the stake in SMATRICS to 100% and thereby gaining control as at 30 September 2021 //
2
The implicit pre-tax
interest rate determined through a process of iteration amounted to 12.0%.
Sensitivity analysis for SMATRICS GmbH & Co KG 31/12/2021
Value assigned
to the key
valuation
assumption
Change in key
valuation
assumptions
Effects on the
carrying
amounts of
assets
After tax discount rate 10.00% ± 0.25 PP
€– 3.8m
€+ 3.8m
242
4.4.2 Impairment testing of power plants
Impairment test – Romanian wind farm
31/12/2020 31/12/2021
Cash-generating unit Wind farm on the Romanian Black Sea
coast (installed capacity: 226 MW)
Wind farm on the Romanian Black Sea
coast (installed capacity: 226 MW)
Indications of
impairment
Updated electricity price forecasts,
extension of the assumed useful life and
updated discount rate
Updated electricity price forecasts and
discount rate
Basis for
recoverable amount
Value in use Value in use
Valuation technique Net present value approach (DCF method) Net present value approach (DCF method)
Derivation of cash flow VERBUND Wind Power Romania SRL’s
budgets (based primarily on near-market
data)
VERBUND Wind Power Romania SRL’s
budgets (based primarily on near-market
data)
Volume Annually expected electricity generation
volumes of 477 GWh and/or expected sales
opportunities for Romanian green electricity
certificates
Annually expected electricity generation
volumes of 477 GWh and/or expected
sales opportunities for Romanian green
electricity certificates
Price Internal price forecasts; estimates of
maintenance costs based on existing
maintenance agreements
Internal price forecasts; estimates of
maintenance costs based on existing
maintenance agreements
Planning period Detailed planning phase: 6 years
Rough planning phase: 17 years
Detailed planning phase: 6 years
Rough planning phase: 16 years
Key measurement
assumptions
Electricity price, sales opportunities for
green electricity certificates, discount rate
Electricity price, sales opportunities for
green electricity certificates, discount rate
After tax discount rate WACC: 8.00%
1
WACC: 9.00%
1
Recoverable amount €162.4m €245.1m
Reversal of
impairment losses
during the period
€32.9m €58.3m
1
The implicit input tax interest rate determined through a process of iteration amounted to 10.86% (previous year: 8.89%).
243ANNUAL FINANCIAL REPORT - GROUP
Sensitivity analysis for the Romanian wind farm 31/12/2021
1
Value assigned
to the key
valuation
assumption
Change in key
valuation
assumptions
Effects on the
carrying
amounts of
assets
Price of electricity
2
€71.6 per MWh ± 5%
€+ 11.6m
€– 11.1m
Revenue from selling Romanian green
electricity certificates
3
€17.6 per MWh ± 5%
€+ 1.6m
€– 1.5m
After tax discount rate 9.00% ± 0.25 PP
€+ 3.6m
€– 3.5m
1
In the sensitivity analysis, one key measurement assumption was changed at a time while the other factors of influence remained constant. However, in reality changes to the
key measurement assumptions can also occur simultaneously. This can result in the amplification or (at least partial) neutralisation of the effects. //
2
The electricity price shown
relates to the year 2030. The sensitivity analysis varies the price of electricity steadily over time up to the planning horizon. //
3
The stated revenues from the sale of Romanian
green electricity certificates relate to the average over the course of the entire planning period.
Sensitivity analysis for the Romanian wind farm 31/12/2020
1
Value assigned
to the key
valuation
assumption
Change in key
valuation
assumptions
Effects on the
carrying
amounts of
assets
Price of electricity
2
€62.6 per MWh ± 5%
€+ 11.1m
€– 11.1m
Revenue from selling Romanian green electricity
certificates
3
€5.8 per MWh ± 5%
€+ 2.2m
€– 2.2m
After tax discount rate 8.00% ± 0.25 PP
€+ 3.0m
€– 2.9m
1
In the sensitivity analysis, one key measurement assumption was changed at a time while the other inputs were held constant. In reality, however, changes to the key
measurement assumptions can also occur simultaneously. This can result in the amplification or (at least partial) neutralisation of the effects. //
2
The electricity price shown
relates to the year 2030. The sensitivity analysis varies the price of electricity steadily over time up to the planning horizon. //
3
The stated revenues from the sale of Romanian
green electricity certificates relate to the average over the course of the entire planning period.
244
Impairment test – Mellach combined cycle gas turbine power plant
31/12/2020 31/12/2021
Cash-generating unit Combined cycle gas turbine power plant
(installed electrical capacity: 838 MW)
Combined cycle gas turbine power plant
(installed electrical capacity: 838 MW)
Indications of
impairment
Updated electricity and/or gas price
forecasts and updated discount rate
Updated electricity and/or gas price
forecasts and updated discount rate
Basis for
recoverable amount
Value in use Value in use
Valuation technique Net present value approach (DCF method) Net present value approach (DCF method)
Derivation of cash flow VERBUND Thermal Power GmbH & Co KG
budgets (based mainly on
near-market data)
VERBUND Thermal Power GmbH & Co KG
budgets (based mainly on
near-market data)
Volume Optimisation model with primary inputs:
installed capacity, heat extraction
(maximum 400 MW) and efficiency at full
capacity (58.8%)
Optimisation model with primary inputs:
installed capacity, heat extraction
(maximum 400 MW) and efficiency at full
capacity (58.8%)
Price Internal price forecasts; temporarily
expected revenue from the grid reserve,
congestion management, redispatch and
market use, including heat extraction in the
winter for one line (Q4/2021 to Q1/2023);
estimate of operating, maintenance and
downtime costs by the responsible
managers
Internal price forecasts; temporarily
expected revenue from the grid reserve,
congestion management, redispatch and
market use, including heat extraction in
the winter for one line (Q4/2022 to
Q1/2023); estimate of operating,
maintenance and downtime costs by the
responsible managers
Planning period Total capacity averaging around 100,000
equivalent operating hours or until 2040
(dependent on earlier entry)
Total capacity averaging around 100,000
equivalent operating hours or until 2040
(dependent on earlier entry)
Key measurement
assumptions
Discount rate, expected revenue from the
grid reserve, congestion management and
redispatch, development of clean spark
spreads
Discount rate, expected revenue from the
grid reserve, congestion management and
redispatch, development of clean spark
spreads
After tax discount rate WACC: 4.00%
1
WACC: 4.25%
1
Recoverable amount €87.2m €109.9m
Impairment losses
during the period
2
€– 9.3m €+ 24.5m
1
In 2021 the implicit input tax interest rate determined through a process of iteration amounted to 5.67% (previous year: 6.95%). //
2
The increase in value in the 2021 reporting
period was reduced by the change in deferred government grants in the amount of €0.7m (previous year: €0.4m).
245ANNUAL FINANCIAL REPORT - GROUP
Sensitivity analysis for the Mellach combined cycle gas turbine power plant 31/12/2021
1
Value assigned
to the key
measurement
assumption
Change in key
measurement
assumptions
Effects on the
carrying
amounts of
assets
After-tax discount rate 4.25% ± 0.25 PP
€– 1.5m
€+ 1.5m
Temporarily expected revenue from the grid reserve,
congestion management and redispatch –
2
± 10%
€+ 33.9m
€– 33.9m
1
In the sensitivity analysis, one key measurement assumption was changed at a time while the other factors of influence were held constant. In reality, however, changes to the
key measurement assumptions can also occur simultaneously. This can result in the amplification or (at least partial) neutralisation of the effects. //
2
A statement of the value
assigned to the temporarily expected revenue from grid reserve, congestion management and redispatch is omitted because such a statement could harm VERBUND’s position
in the tendering process.
Sensitivity analysis for the Mellach combined cycle gas turbine power plant 31/12/2020
1
Value assigned
to the key
valuation
assumption
Change in key
measurement
assumptions
Effects on the
carrying
amounts of
assets
After-tax discount rate 4.00% ± 0.25 PP
€– 1.7m
€+ 1.7m
Temporarily expected revenue from the grid reserve,
congestion management and redispatch
–
2
± 10%
€+ 26.0m
€– 26.0m
1
In the sensitivity analysis, one key measurement assumption was changed at a time while the other factors of influence were held constant. In reality, however, changes to the
key measurement assumptions can also occur simultaneously. This can result in the amplification or (at least partial) neutralisation of the effects. //
2
A statement of the value
assigned to the temporarily expected revenue from grid reserve, congestion management and redispatch is omitted because such a statement could harm VERBUND’s position
in the tendering process.
4.5 Interests accounted for using the equity method
The carrying amounts of interests accounted for using the equity method are adjusted to reflect changes
in the investee’s net assets in accordance with IAS 28 no later than one quarter following the underlying
changes. If VERBUND’s share of losses from an interest accounted for using the equity method
corresponds to or exceeds the carrying amount of the equity interest, additional losses are only taken
into account and recognised as a liability to the extent that legal or constructive obligations were
undertaken or payments were made for the equity-accounted interest. The carrying amount of the
equity-accounted interest includes the share calculated based on equity method accounting plus all
long-term equity interests that are to be allocated to the net investment in the equity-accounted interest
based on their economic substance.
Net investments in associated companies and joint ventures are tested for objective indications of
impairment at the reporting date. If there are any such indications, an impairment test must be
conducted for interests accounted for using the equity method in accordance with IAS 36.
246
Interests accounted for using the equity method
1
€m
2020 2021
Amortised cost as at 1/1 286.5 294.7
Additions from business acquisitions 0.0 107.2
Additions 0.0 9.8
Dividends – 9.1 – 5.4
Result using equity method accounting 28.8 34.8
Other comprehensive income from equity method accounting – 11.6 – 6.1
Disposals 0.0 – 17.5
Amortised cost as at 31/12 294.7 417.5
Accumulated value adjustments as at 1/1 – 15.2 – 11.8
Impairment losses 0.0 – 18.3
Reversal of impairment losses 3.4 16.8
Accumulated value adjustments as at 31/12 – 11.8 – 13.3
Net carrying amount as at 31/12 282.8 404.1
Net carrying amount as at 1/1 271.3 282.8
Net carrying amount as at 31/12 282.8 404.1
of which interests accounted for using the equity method 282.8 404.1
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
A summary of aggregated financial information for the equity-accounted joint ventures and
associates is presented in section 13.4 Subsidiaries, joint ventures and associates of VERBUND.
4.6 Other equity interests
Equity interests in unconsolidated (for lack of materiality) subsidiaries, associates and joint ventures
not accounted for using the equity method and other equity interests are accounted for in accordance
with IFRS 9. If these equity interests are held for the long term due to strategic considerations, they are
classified as measured at fair value through other comprehensive income (FVOCI). Otherwise they are
classified as measured at fair value through profit or loss (FVPL). The fair value of the equity interests is
derived, depending on the situation, from market quotations, comparable recent transactions,
valuations based on the discounted cash flow or market multiples methods and/or cost.
4.5.1
Interests accounted
for using the
equity method
247ANNUAL FINANCIAL REPORT - GROUP
Other equity interests €m
Interests in
unconsolidated
subsidiaries
Other equity
interests
Total
2021
(Amortised) cost as at 1/1 5.3 133.9 139.2
Change in the basis of consolidation – 0.3 8.6 8.3
Additions from acquisitions of interests and
increased shareholdings 0.0 0.6 0.6
Disposals – 0.2 0.0 – 0.2
(Amortised) cost as at 31/12 4.8 143.1 147.9
Accumulated value adjustments as at 1/1 6.5 0.1 6.6
Fair value measurement in OCI 2.8 19.8 22.6
Accumulated value adjustments as at 31/12 9.3 19.9 29.2
Net carrying amount as at 31/12 14.1 163.0 177.1
Net carrying amount as at 1/1 11.9 134.0 145.8
Other equity interests €m
Interests in
unconsolidated
subsidiaries
Other equity
interests
Total
2020
(Amortised) cost as at 1/1 6.2 132.8 139.0
Change in the basis of consolidation – 0.1 0.0 – 0.1
Additions from acquisitions of interests and
increased shareholdings 0.6 1.1 1.7
Disposals – 1.4 0.0 – 1.4
(Amortised) cost as at 31/12 5.3 133.9 139.2
Accumulated value adjustments as at 1/1 7.5 – 8.4 – 0.9
Fair value measurement in OCI – 1.9 8.5 6.6
Disposals 0.9 0.0 0.9
Accumulated value adjustments as at 31/12 6.5 0.1 6.6
Net carrying amount as at 31/12 11.9 134.0 145.8
Net carrying amount as at 1/1 13.8 124.4 138.1
4.7 Investments and non-current other receivables
Investments and loans are classified based on the provisions of IFRS 9. Acquisitions and disposals of
investments are recognised at the trade date. The carrying amount of financial assets measured at
amortised cost is determined based on the effective interest method in consideration of any
impairment losses. The carrying amount of financial assets measured at fair value in the balance sheet
is derived based on IFRS 13’s fair value hierarchy (see section 5 Financial instruments). The notes
4.6.1
Other equity
interests
248
regarding the closed items on the balance sheet can be found in section 8.1 Financial liabilities as well
as in section 11 Risk management.
Investments and non-current other receivables €m
2020 2021
Investments – closed items on the balance sheet 340.0 376.9
Interest rate swaps – closed items on the balance sheet 87.7 70.3
Other investments and other receivables 242.9 248.7
Total 670.5 695.8
Investments – cross-border leasing and closed items on the balance sheet €m
Securities (loan
stock rights)
under closed
items on the
balance sheet
Other loans
under closed
items on the
balance sheet
Total
2021
Amortised cost as at 1/1 60.7 279.3 340.0
Foreign exchange measurement 4.8 20.1 24.8
Additions 2.6 4.8 7.4
Capitalised interest 0.1 11.1 11.2
Change in expected credit losses 0.0 0.0 0.0
Disposals – 0.4 – 6.1 – 6.5
Amortised cost as at 31/12 67.7 309.2 376.9
of which non-current assets 67.7 309.2 376.9
of which current assets 0.0 0.0 0.0
Investments – cross-border leasing and closed items on the balance sheet €m
Securities (loan
stock rights)
under closed
items on the
balance sheet
Other loans
under closed
items on the
balance sheet
Total
2020
Amortised cost as at 1/1 65.4 303.2 368.6
Foreign exchange measurement – 5.8 – 28.3 – 34.1
Additions 2.6 4.0 6.5
Capitalised interest 0.0 10.9 10.9
Change in expected credit losses 0.0 0.1 0.0
Disposals – 1.4 – 10.6 – 12.0
Amortised cost as at 31/12 60.7 279.3 340.0
of which non-current assets 60.7 279.3 340.0
of which current assets 0.0 0.0 0.0
4.7.1
Investments and
non-current other
receivables
249ANNUAL FINANCIAL REPORT - GROUP
On 31 December 2021, the securities consisted of medium-term notes with a principal amount of
$74.0m (previous year: $71.9m) and an amortised cost of €67.7m (previous year: €60.7m).
Securities in the amount of €67.7m (previous year: €60.7m) and loans in the amount of €309.2m
(previous year: €279.3m) are pledged. The securities and loans all serve banks as collateral for
borrowings.
Other investments and non-current other receivables €m
Loans to
investees
Securities (loan
stock rights)
Other loans Total
2021
Cost as at 1/1 73.7 147.5 5.4 226.8
Additions from business acquisitions 0.0 7.1 0.0 7.1
Additions 0.0 0.0 0.2 0.2
Disposals 0.0 – 1.5 0.0 – 1.5
Reclassifications – 49.1 – 4.3 0.0 – 53.4
Cost as at 31/12 24.6 148.8 5.6 179.1
Accumulated value adjustments
as at 1/1 0.0 – 18.5 0.0 – 18.5
Reversals of impairment losses 0.0 5.6 0.0 5.6
Fair value measurement in OCI 0.0 0.9 0.0 0.9
Disposals 0.0 1.6 0.0 1.6
Accumulated value adjustments
as at 31/12 0.0 – 10.4 0.0 – 10.4
Net carrying amount as at 31/12 24.6 138.4 5.6 168.7
Net carrying amount as at 1/1 73.7 129.0 5.4 208.2
Net carrying amount of other
non-current receivables as at 31/12
1
150.2
Net carrying amount of other
non-current receivables as at 1/1
1
122.3
Net carrying amount total
as at 31/12
318.9
Net carrying amount total
as at 1/1 330.5
1
incl. carrying amount of interest rate swaps – closed items on the balance sheet
250
Other investments and non-current other receivables €m
Loans to
investees
Securities (loan
stock rights)
Other loans Total
2020
Cost as at 1/1 77.2 163.9 5.3 246.6
Additions 0.0 0.3 0.1 0.4
Disposals 0.0 – 16.7 0.0 – 16.7
Reclassifications – 3.5 0.0 0.0 – 3.5
Cost as at 31/12 73.7 147.5 5.4 226.8
Accumulated value adjustments
as at 1/1 – 2.0 – 30.8 0.0 – 32.8
Impairment losses 0.0 – 1.3 0.0 – 1.3
Reversals of impairment losses 0.0 0.5 0.0 0.5
Fair value measurement in OCI 0.0 – 0.7 0.0 – 0.7
Impairment losses on
interests accounted for
using the equity method 2.0 0.0 0.0 2.0
Disposals 0.0 13.8 0.0 13.8
Accumulated value adjustments
as at 31/12
0.0 – 18.5 0.0 – 18.5
Net carrying amount as at 31/12 73.7 129.0 5.4 208.2
Net carrying amount as at 1/1 75.2 133.1 5.3 213.7
Net carrying amount of other
non-current receivables as at 31/12
1
122.3
Net carrying amount of other
non-current receivables as at 1/1
1
116.1
Total net carrying amount as at 31/12 330.5
Total net carrying amount as at 1/1 329.8
1
incl. carrying amount of interest rate swaps – closed items on the balance sheet
Securities in the amount of €138.4m (previous year: €129.0m) primarily include shares of investment
funds to cover employee benefit obligations and were classified as measured at fair value through profit
or loss.
Non-current other receivables contain derivative financial instruments measured at fair value in the
amount of €70.3m (previous year: €87.7m) which relate to financial liabilities under closed items on the
balance sheet.
251ANNUAL FINANCIAL REPORT - GROUP
5. Financial Instruments
5.1 Accounting treatment of financial instruments
Primary financial instruments
For information regarding accounting policies for primary financial instruments see:
• Interests accounted for using the equity method – section 4.5
• Other equity interests – section 4.6
• Investments and non-current other receivables – section 4.7
• Working capital – section 6
• Liabilities – section 8
Derivative financial instruments
Derivative financial instruments are recognised at fair value when the contract is entered into and are
subsequently measured at fair value. As a rule, unrealised remeasurement gains or losses are
recognised in the income statement if the requirements for recognition of hedging relationships (hedge
accounting) in accordance with IFRS 9 are not met (see section 5.2 Accounting treatment of hedging
relationships).
Derivative financial instruments with positive fair values
are recognised under trade receivables as
well as under other receivables and securities, while those with negative fair values
are recognised
under other financial liabilities or trade payables and other liabilities. If a framework agreement with a
netting arrangement has been entered into with a counterparty, the positive and negative fair values of
the transactions for this counterparty for the corresponding periods are netted for accounting purposes
because the aim is to settle on a net basis.
So-called ‘own-use contracts’ are not accounted for as derivative financial instruments, but instead as
executory contracts (own use exemption). If supplier contracts that previously represented own-use
contracts lead to a net settlement within the meaning of IFRS 9, they must be qualified as freestanding
derivatives and recognised at fair value through profit or loss.
252
Carrying amounts and fair values by measurement category 2021 €m
Assets – balance sheet items Measurement
category in
accordance with
IFRS 9
Level Carrying
amount as
at 31/12
Fair value as
at 31/12
Interests in unconsolidated subsidiaries FVOCI 2 13.4 13.4
Interests in unconsolidated subsidiaries FVOCI AC 0.6 0.6
Other equity interests FVOCI 1 29.7 29.7
Other equity interests FVOCI 2 117.0 117.0
Other equity interests FVOCI AC 16.4 16.4
Other equity interests 177.1
Securities FVPL 1 130.4 130.4
Securities FVOCI 3 6.7 6.7
Securities FVOCI AC 1.3 1.3
Securities – closed items on the balance sheet AC 2 67.7 65.4
Other loans – closed items on the balance sheet AC 2 309.2 328.9
Derivatives in the finance area –
closed items on the balance sheet FVPL 2 70.3 70.3
Loans to investees AC 2 24.6 23.8
Other loans AC 2 5.6 6.0
Other FVPL 3 43.5 43.5
Other – – 36.5 –
Other investments and non-current other receivables 695.8
Trade receivables AC – 818.4 –
Receivables from investees AC – 57.6 –
Loans to investees AC 2 49.1 49.6
Other loans AC 2 0.0 0.0
Derivatives in the energy area FVPL 1 31.3 31.3
Derivatives in the energy area FVPL 2 2,226.5 2,226.5
Securities FVPL 1 4.3 4.3
Emission rights – – 31.2 –
Other AC – 609.3 –
Other – – 38.1 –
Trade receivables, other current receivables and
securities 3,865.7
Cash and cash equivalents AC – 318.6 –
Aggregated by measurement category
Financial assets measured at amortised cost AC 2,260.0
Financial assets measured at fair value
through profit or loss FVPL 2,506.2
Financial assets measured at fair value
through other comprehensive income
FVOCI 185.2
5.1.1
Additional
disclosures regarding
financial instruments
in accordance with
IFRS 7
253ANNUAL FINANCIAL REPORT - GROUP
Carrying amounts and fair values by measurement category 2021 €m
Liabilities – balance sheet items
Measure-
ment
category in
accordance
with IFRS 9
Level
Carrying
amount as
at 31/12
Fair value as
at 31/12
Bonds AC 2 990.6 1,019.8
Financial liabilities to banks and to others AC 2 1,858.8 1,740.2
Financial liabilities to banks –
closed items on the balance sheet AC 2 117.1 150.9
Financial liabilities to banks –
closed items on the balance sheet FVPL – D 2 330.1 330.1
Capital shares attributable to limited partners – – 0.0 –
Non-current and current financial liabilities 3,296.6
Electricity supply commitment – – 126.5 –
Obligation to return an interest AC 3 140.4 243.3
Trade payables AC – 2.1 –
Lease liabilities – – 86.0
Other AC – 107.2 –
Non-current other liabilities 462.1
Trade payables AC – 293.6 –
Derivatives in the energy area FVPL 1 117.4 117.4
Derivatives in the energy area FVPL 2 3,755.1 3.755.1
Derivatives in the finance area FVPL 2 5.9 5.9
Lease liabilities – – 8.3
Other AC – 324.8 –
Other – – 109.8 –
Trade payables and other liabilities 4,614.7
Aggregated by measurement category
Financial liabilities measured at amortised cost AC 3,834.5
Financial liabilities measured at fair value
through profit or loss FVPL 3,878.3
Financial liabilities measured at fair value
through profit or loss – designated FVPL – D 330.1
254
Carrying amounts and fair values by measurement category 2020 €m
Assets – balance sheet items
Measure-
ment
category in
accordance
with IFRS 9
Level Carrying
amount as
at 31/12
Fair value as
at 31/12
Interests in unconsolidated subsidiaries FVOCI 2 10.6 10.6
Interests in unconsolidated subsidiaries FVPL 3 0.0 0.0
Interests in unconsolidated subsidiaries FVOCI AC 1.1 1.1
Other equity interests FVOCI 1 24.9 24.9
Other equity interests FVOCI 2 101.5 101.5
Other equity interests FVOCI AC 7.7 7.7
Other equity interests 145.7
Securities FVPL 1 121.8 121.8
Securities FVOCI 3 5.8 5.8
Securities FVOCI AC 1.3 1.3
Securities – closed items on the balance sheet AC 2 60.7 58.5
Other loans – closed items on the balance sheet AC 2 279.3 309.3
Derivatives in the finance area –
closed items on the balance sheet
FVPL 2 87.7 87.7
Loans to investees AC 2 73.7 75.4
Other loans AC 2 5.4 6.1
Other – – 34.7 –
Other investments and non-current other receivables 670.4
Trade receivables AC – 342.7 –
Receivables from investees AC – 39.8 –
Loans to investees AC 2 3.5 3.6
Other loans AC 2 0.1 0.1
Derivatives in the energy area FVPL 1 2.3 2.3
Emission rights – – 15.6 –
Other AC – 42.8 –
Other – – 23.5 –
Trade receivables, other current receivables and
securities
620.1
Cash and cash equivalents AC – 49.2 –
Aggregated by measurement category
Financial assets measured at amortised cost AC 897.1
Financial assets measured at fair value
through profit or loss FVPL 361.7
Financial assets measured at fair value
through other comprehensive income FVOCI 152.9
255ANNUAL FINANCIAL REPORT - GROUP
Carrying amounts and fair values by measurement categories 2020 €m
Liabilities – balance sheet items Measurement
categories in
accordance with
IFRS 9
Level Carrying
amount as
at 31/12
Fair value as
at 31/12
Bonds AC 2 496.8 532.5
Financial liabilities to banks and to others AC 2 361.9 405.0
Financial liabilities to banks –
closed items on the balance sheet AC 2 106.4 148.0
Financial liabilities to banks –
closed items on the balance sheet FVPL – D 2 321.3 321.3
Capital shares attributable to limited partners – – 0.0 –
Non-current and current financial liabilities 1,286.3
Electricity supply commitment – – 138.0 –
Obligation to return an interest AC 3 110.5 209.8
Trade payables AC – 1.7 –
Lease liabilities 75.3
Other AC – 73.5 –
Other non-current liabilities 399.0
Trade payables AC – 224.0 –
Derivatives in the energy area FVPL 1 5.4 5.4
Derivatives in the energy area FVPL 2 236.0 236.0
Derivatives in the finance area FVPL 2 10.7 10.7
Lease liabilities 22.9
Other AC – 241.8 –
Other – – 73.0 –
Trade payables and other liabilities 813.8
Aggregated by measurement categories
Financial liabilities measured at amortised cost AC 1,616.5
Financial liabilities measured at fair value
through profit or loss FVPL 252.0
Financial liabilities held for trading FVPL – D 321.3
For financial liabilities (under closed items on the balance sheet) classified as FVPL in the above table,
the difference between the carrying amount as at 31 December 2021 and the amount that VERBUND
would have to pay upon maturity is €2.9m (previous year: €0.0m). The amount due upon maturity was
translated at the rate (€1=$1) of 1.1326 on the reporting date (previous year: 1.2271). In the event of
insolvency, derivative financial instruments in the finance area (under closed items on the balance
sheet) can be netted against the financial liabilities classified as FVPL (under closed items on the
balance sheet) (see section 11 Risk management).
256
Of the derivative financial instruments in the energy area classified as FVPL in the above table,
positive fair values in the amount of €504.1m (previous year: €29.2m) and negative fair values in the
amount of €2,425.8m (previous year: €129.1m) relate to hedging relationships designated as cash flow
hedges. These fair values represent gross amounts; following the inter-portfolio netting carried out in
accordance with VERBUND’s accounting policies (see section 11.2 Risk management in the energy
area), cash flow hedges can no longer be isolated.
The interests in unconsolidated subsidiaries, other equity interests and other securities classified as
FVOCI in the above table are held for the long term due to strategic considerations. Details regarding
the fair value and the dividend distributions of the individual financial instruments classified as FVOCI
can be taken from the following table:
Details regarding FVOCI equity interests 2021 €m
Fair value as at
31/12/2020
Fair value as
at 31/12/2021
Dividend
31/12/2020
Dividend
31/12/2021
Energie AG Oberösterreich 101.5 117.0 2.8 3.5
Burgenland Holding Aktiengesellschaft 24.9 29.7 1.0 1.0
Verfahren Umwelt Management GmbH 7.0 9.8 0.8 0.8
Wiener Börse AG 5.8 6.7 0.5 0.7
Gestionnaires du Réseau de Transport
d’Électricité (RTE) 4.8 4.8 0.5 0.6
CISMO – 3.7 – 0.4
Other 8.9 13.3 1.0 1.2
257ANNUAL FINANCIAL REPORT - GROUP
Valuation techniques and input factors for determining fair values
Level Financial Instruments Valuation technique Inputs
1 Energy forwards Market approach Settlement price published by the stock
exchange
1 Securities, other equity interest in
Burgenland Holding AG
Market approach Stock exchange price
2 Securities and other loans under closed
items on the balance sheet, long-term
loans, liabilities to banks, bonds and
other financial liabilities
Net present value
approach
Payments associated with the financial
instruments, yield curve, credit risk of
the contracting parties (credit default
swaps or credit spread curves)
2 Interests in unconsolidated subsidiaries,
other equity interest in Energie AG
Oberösterreich and RTE
Market approach Trading multiple, transaction price
2 Unlisted energy forwards Net present value
approach
Forward price curve derived from stock
exchange prices, yield curve, credit risk
of the contracting parties
2 Other assets and liabilities measured at
fair value in the finance area
Net present value
approach
Cash flows already fixed or determined
via forward rates, yield curve, credit risk
of the contracting parties
3 Return obligation (obligation to transfer
back the 50% interest acquired in
Donaukraftwerk Jochenstein AG)
Net present value
approach
Price forecasts for electricity, weighted
average cost of capital after taxes
3 Securities (shares of Wiener Börse AG) Net present value
approach
Expected distribution of profits,
cost of equity
3 Other non-current receivables (TAG profit
participation right with respect to
material assets)
Net present value
approach
Expected distribution of profits,
cost of equity
AC Other shares of unconsolidated
subsidiaries, other equity interests and
securities
– Cost as a best estimate of fair value
–
Cash and cash equivalents, trade
receivables and payables, current other
receivables, other borrowing within
current credit lines as well as current
other liabilities
– Carrying amounts as a best estimate of
fair value
258
Expected cash outflows as at 31/12/2021 €m
Maturity 2022 2023 2024– 2026 From 2027
Bonds 12.0 12.0 521.0 567.5
Financial liabilities to banks 29.4 29.2 68.7 182.7
Financial liabilities to others 1.3 1.3 148.3 0.0
Financial liabilities to banks –
closed items on the balance sheet
1
20.8 19.9 395.3 58.9
Capital shares attributable to limited partners 0.0 0.0 0.0 0.0
Cash outflows on financial liabilities 63.5 62.5 1,133.3 809.1
Trade payables 293.6 0.3 1.4 0.5
Derivatives in the energy area 780.3 301.5 80.1 0.0
Derivatives in the finance area
2
3.1 1.7 1.5 0.0
Other 324.8 80.0 11.6 156.0
Cash outflows on trade payables and other payables 1,401.8 383.5 94.6 156.4
Cash outflows on liabilities in accordance with IFRS 7 1,471.7 446.0 1,227.9 965.5
1
Cash outflows under closed items on the balance sheet have to be seen alongside the corresponding cash inflows from associated investments. //
2
Cash outflows from interest
rate swaps are accounted for as the net cash flow of both legs.
Expected cash outflows as at 31/12/2020 €m
Maturity 2021 2022 2023– 2025 From 2026
Bonds 7.5 7.5 515.0 0.0
Financial liabilities to banks 84.8 29.4 82.1 198.5
Financial liabilities to others 0.0 0.0 0.0 0.0
Financial liabilities to banks –
closed items on the balance sheet
1
16.9 19.2 117.2 320.4
Capital shares attributable to limited partners 0.0 0.0 0.0 0.0
Cash outflows on financial liabilities 109.3 56.1 714.3 518.9
Trade payables 224.0 0.2 1.4 0.3
Derivatives in the energy area 567.5 166.2 60.9 0.0
Derivatives in the finance area
2
4.3 3.1 3.8 0.1
Other 241.8 25.8 12.3 145.9
Cash outflows on trade payables and other payables 1,037.7 195.3 78.4 146.2
Cash outflows on liabilities in accordance with IFRS 7 1,146.9 251.4 792.7 665.1
1
Cash outflows under closed items on the balance sheet have to be seen alongside the corresponding cash inflows from associated investments. //
2
Cash outflows from interest
rate swaps are accounted for as the net cash flow of both legs.
259ANNUAL FINANCIAL REPORT - GROUP
Results by measurement categories
Results in accordance with IFRS 7 comprise mainly impairment losses and reversals of impairment
losses, foreign exchange gains and losses and realised gains or losses on disposal.
Net results by measurement categories €m
2020 2021
Financial assets and liabilities measured at fair value through profit or loss 8.4 – 41.8
Financial assets and liabilities measured at fair value through profit or loss –
designated 21.6 20.6
Financial liabilities measured at amortised cost 45.0 – 21.1
Financial assets measured at amortised cost – 36.8 – 11.3
Financial assets measured at fair value through
other comprehensive income 5.9 23.5
Total interest expenses from financial liabilities measured at amortised cost – 64.1 – 62.1
Total interest income from financial assets measured at amortised cost 33.9 40.0
Components of the net results
Measurement category Notes
Financial assets and liabilities
measured at fair value through
profit or loss
The results arose from the measurement of derivative financial instruments in the
energy area (wholesale and trading) in the operating result (electricity revenue), as
well as from the measurement of (other) derivative and non-derivative financial
instruments in the finance area in the other financial result.
Financial assets and liabilities
measured at fair value through
profit or loss – designated
The results arose from the measurement of financial liabilities to banks (closed
items on the balance sheet). These results have to be seen alongside an equal
amount of opposing results from financial assets and liabilities that are measured
at fair value through profit or loss and net results from financial assets and
liabilities that are measured at cost.
Financial assets and liabilities
measured at cost
The net results relate primarily to financial instruments in connection with closed
items on the balance sheet in the other financial result as well as to valuation
allowances on trade receivables in the operating result.
Total interest expenses were recognised under interest expenses; total interest income was
recognised in part in interest income and in part under other financial result.
260
5.2 Accounting treatment of hedging relationships
VERBUND applies special accounting policies for hedging relationships in the energy area as well as in
the finance area.
5.2.1 Hedging transactions in the energy area
VERBUND employs electricity forward contracts and electricity futures contracts as well as options as
derivatives within the meaning of IFRS 9 as part of cash flow hedges in the energy area. Since the 2020
financial year, options have been used as part of a collar strategy in which a certain price band is to be
hedged for future electricity purchases. The goal of hedging relationships is to reduce the cash flow
volatility resulting from market price fluctuations by hedging the prices for the following transactions:
(1) sale of own generation and marketing of electricity from renewable energy plants not owned by
VERBUND;
(2) reinsurance for electricity deliveries to customers; and
(3) reinsurance for gas deliveries to customers.
The timing and amount of the hedging of future electricity deliveries depends in each case on the
current price trend. As a general rule, the hedges are entered into successively. A portion of the entire
volume anticipated is hedged corresponding to the risk management strategy. As a rule, once the
relevant contractual terms of the electricity futures, forwards and options entered into coincide with
those of the underlying transactions, a qualitative measurement of effectiveness is carried out. As a
general rule, it can be hereby assumed that the changes in the value of the hedging instruments entirely
offset the changes in the future cash flows.
The exception to this rule is hedges of electricity deliveries on a market differing from the place of
delivery. Such hedges have been used since 1 October 2018 as a consequence of the restriction on
unlimited trading on the German-Austrian electricity market. Due to the higher liquidity, the majority
of Austrian electricity deliveries are hedged with German futures market products. The Austrian price is
made up of the German price plus a German/Austrian spread. Thus, German futures market products
are used to hedge the German price component of Austrian electricity deliveries, which is why the key
terms between the hedging instruments and the planned payment flows are in line with one another
even in these cases.
Since the entire risk of a change in the market price for electricity with respect to the hedged item or
the components of the hedged item is hedged, the hedge ratio amounts to 100%. Ineffective portions of
the hedges can result from changes in the counterparty’s or VERBUND’s credit risk and a reduced
volume of the expected electricity delivery.
Accounting treatment of hedging transactions in the energy area
In the case of derivative financial instruments that are designated as cash flow hedges in accordance
with IFRS 9, the portion of the unrealised gains or losses that is determined to be an effective hedge is
recognised in other comprehensive income. In contrast, ineffective portions of the hedge are
recognised in profit or loss. When using options, only the internal value of the options will be
261ANNUAL FINANCIAL REPORT - GROUP
designated within the framework of the hedging relationship and the change in fair value will be
recognised separately as costs of hedging in other comprehensive income.
Unrealised gains or losses are only reclassified (“recycled”) to the income statement when the hedged
item affects profit or loss.
Electricity, gas and CO
2
derivatives not designated as hedging instruments are allocated to the
wholesale portfolio. Fair value changes in (freestanding) electricity and gas derivatives in the wholesale
portfolio that were not designated as hedging instruments are recognised in profit or loss net of
previously realised futures and following the netting of positive and negative fair values.
5.2.2 Hedging transactions in the finance area
Apart from derivative transactions in connection with closed items on the balance sheet, future
payments under financial liabilities bearing interest at a variable rate are hedged by means of interest
rate swaps in order to reduce the cash flow risk associated with an increase in market interest rates.
After the relevant contractual terms (such as term, volumes, market interest rate, etc.) of the interest
rate swaps entered into correspond to those of the underlying transactions, VERBUND conducts a
qualitative measurement of effectiveness. As a general rule, it can be assumed that the changes in the
value of the hedging instruments entirely offset the changes in the future cash flows. Since the entire
risk of an increase in the market interest rate with respect to variable-interest-bearing financial
liabilities is hedged, the hedge ratio amounts to 100%. Ineffective portions of the hedges can only result
from changes in the counterparty’s or VERBUND’s credit risk.
Payments are made on interest rate swaps every six months. The underlying variable market interest
rate is the six-month EURIBOR. The future interest payments hedged by the interest rate swaps occur in
the following five years (2022 to 2026) and will be recognised in profit or loss accordingly.
Accounting treatment of hedging transactions in the finance area
Some of the interest rate swaps are designated as cash flow hedges in accordance with IFRS 9. Those
interest rate swaps that hedge intra-Group financing at the subsidiary level are accounted for as
derivatives measured at fair value through profit or loss in VERBUND’s consolidated financial
statements. With respect to individual closed items on the balance sheet (see section 8.1 Financial
liabilities and section 11 Risk management), the investments result in variable income that is to be seen
alongside fixed expenses. In order to avoid risk, interest rate swaps have been entered into for the
corresponding financial liabilities. These interest rate swaps exhibit a risk profile that perfectly opposes
the corresponding profile of the associated balance sheet items. Therefore, the carrying amount of the
associated financial liabilities is adjusted according to the hedged risk to balance out the fair value
measurement of the interest rate swaps.
The fair value of interest rate swaps corresponds to the amount that VERBUND would receive or have
to pay if the transaction were terminated on the reporting date. When calculating that amount, current
interest rates, yield curves and counterparty credit risk in particular are taken into account (see
section 5 Financial instruments).
262
5.2.3 Information regarding hedging relationships in the
energy and finance areas
Cash flow hedges – Hedging instruments 31/12/2021 €m
Carrying
amount
Balance sheet
item
Notional
amount
Change in the
fair value for
the
measurement
of
ineffectiveness
Hedging costs
recognised in
other
comprehensive
income
Electricity futures,
forwards and options –
sales 16.1 Other receivables 2,388 GWh 52.4 – 2.7
Electricity futures,
forwards and options –
sales – 2,419.8 Other liabilities 23,573 GWh – 2,418.0 – 2.2
Electricity futures and
forwards – purchasing 468.7 Other receivables – 4,756 GWh 460.2 0.0
Electricity futures and
forwards – purchasing – 6.1 Other liabilities – 302 GWh – 6.1 0.0
Gas forwards –
purchasing 18.9 Other receivables – 343 GWh 18.5 0.0
Gas forwards –
purchasing 0.0 Other liabilities 0.0 GWh 0.0 0.0
Interest rate swaps – 3.6 Other liabilities 56.8 2.4 0.0
Cash flow hedges – Hedged items 31/12/2021 €m
Change in the fair
value for the
measurement of
ineffectiveness
Carrying amount
of the reserve for
measurements of
cash flow hedges
Reserve for
hedging costs
included therein
Future electricity
sales volume 2,365.3 – 2,404.0 – 4.9
Future electricity purchases – 454.0 462.6 0.0
Future gas purchases – 18.5 18.9 0.0
Variable-rate
financial liabilities – 2.4 – 3.6 0.0
263ANNUAL FINANCIAL REPORT - GROUP
Cash flow hedges – effects on the statement of
comprehensive income and balance sheet 2021 €m
Gains/
losses
recognised
in other
comprehen-
sive income
Hedging
costs
recognised
in other
comprehen-
sive income
Ineffective
portion of the
hedge
recognised in
profit or loss
Line items of
the statement
of comprehen-
sive income in
which the
ineffective
portion was
recognised
Reclassifica-
tions from
reserves to
profit or loss
Line items of
the statement
of
comprehen-
sive income in
which the
reclassifica-
tion was
recognised
Electricity
futures,
forwards and
options – sales – 2,365.6 – 4.9 0.3 Revenue – 91.7 Revenue
Electricity
futures and
forwards –
purchasing 454.0 0.0 – 0.1
Electricity
purchases 15.1
Electricity
purchases
Gas forwards –
purchasing 18.5 0.0 0.0 Gas purchases 1.0 Gas purchases
Interest rate
swaps – 0.5 0.0 0.0
Other financial
result – 2.0
Interest
expenses
Notional amount and average price and/or interest rate as at 31/12/2021 €m
2022 2023 2024 2025 >2025
Electricity futures, forwards and
options – sales
Notional amount 15,167 GWh
5,712 GWh,
1,752 GWh
by means of
collar options
543 GWh,
1,757 GWh
by means of
collar options 130 GWh 900 GWh
Average hedged price €67.7/MWh
€63.2/MWh,
Collar €38–
€60/MWh
€79.1/MWh,
Collar €60–
€140/MWh €39.3/MWh €39.3/MWh
Electricity futures and forwards –
purchasing
Notional amount – 2,792 GWh – 1,550 GWh – 613 GWh – 103 GWh –
Average hedged price €77.0/MWh €67.1/MWh €69.8/MWh €68.7/MWh –
Gas forwards – purchasing
Notional amount – 235 GWh – 109 GWh – – –
Average hedged price €15.6/MWh €16.3/MWh – – –
Interest rate swaps
Average notional amount 49.5 34.9 20.3 7.9 1.4
Average fixed interest rate 2.6% 2.6% 2.8% 3.1% 3.6%
264
Cash flow hedges – hedging instruments 31/12/2020 €m
Carrying
amount
Balance sheet
item
Notional
amount
Change in the
fair value for
the
measurement
of
ineffectiveness
Hedging costs
recognised in
other
comprehensive
income
Electricity futures,
forwards and options –
sales 3.5 Other receivables 3,384 GWh 0.0 – 1.157
Electricity futures,
forwards and options –
sales – 128.4 Other liabilities 15,845 GWh – 117.3 – 1.692
Electricity futures and
forwards – purchasing 24.3 Other receivables – 3,795 GWh 26.5 0.0
Electricity futures and
forwards – purchasing – 0.7 Other liabilities – 1,063 GWh 0.0 0.0
Gas forwards –
purchasing 1.5 Other receivables – 625 GWh 1.5 0.0
Gas forwards –
purchasing 0.0 Other liabilities – 0.4 GWh 0.0 0.0
Interest rate swaps – 6.0 Other liabilities 71.4 1.6 0.0
Cash flow hedges – Hedged items 31/12/2020 €m
Change in the fair
value for the
measurement of
ineffectiveness
Carrying amount
of the reserve for
measurements of
cash flow hedges
Reserve for
hedging costs
included therein
Future electricity sales volume 117.3 – 124.9 – 2.8
Future electricity purchases – 26.5 23.6 0.0
Future gas purchases – 1.5 1.5 0.0
Variable-rate financial liabilities 1.6 – 6.0 0.0
265ANNUAL FINANCIAL REPORT - GROUP
Cash flow hedges – effects on the statement of
comprehensive income and balance sheet 2020 €m
Gains/
losses
recognised
in other
comprehen-
sive income
Hedging
costs
recognised
in other
comprehen-
sive income
Ineffective
portion of the
hedge
recognised in
profit or loss
Line items of
the statement
of comprehen-
sive income
in which the
ineffective
portion was
recognised
Reclassifica-
tions from
reserves to
profit or loss
Line items of
the statement
of compre-
hensive
income in
which the
reclassifica-
tion was
recognised
Electricity
futures,
forwards and
options – sales – 117.3 – 2.8 0.0 Revenue 88.8 Revenue
Electricity
futures and
forwards –
purchasing 26.5 0.0 0.0
Electricity
purchases – 8.0
Electricity
purchases
Gas forwards –
purchasing 1.5 0.0 0.0 Gas purchases 0.0 Gas purchases
Interest rate
swaps – 0.5 0.0 0.0
Other financial
result – 2.1
Interest
expenses
Notional amount and average price and/or interest rate as at 31/12/2020 €m
2021 2022 2023 2024 >2024
Electricity futures, forwards and
options – sales
Notional amount 14,038 GWh 3,439 GWh 1,752 GWh – –
Average hedged price €41.8/MWh €41.5/MWh Collar 38-60 – –
Electricity futures and forwards –
purchasing
Notional amount – 2,748 GWh – 1,399 GWh – 637 GWh – 74 GWh –
Average hedged price €43.7/MWh €46.7/MWh €48.1/MWh €49.8/MWh –
Gas forwards – purchasing
Notional amount – 282 GWh – 235 GWh – 109 GWh – –
Average hedged price €14.2/MWh €15.6/MWh €16.3/MWh – –
Interest rate swaps
Average notional amount 64.1 49.5 34.9 20.3 5.8
Average fixed interest rate 2.6% 2.6% 2.6% 2.8% 2.9%
266
5.3 Recoverability of financial assets
Valuation allowances are recognised at every reporting date for expected credit losses for financial
assets that were classified as measured at amortised cost (AC) and/or debt instruments that were
classified as measured at fair value through other comprehensive income (FVOCI), receivables under
leases, contract assets and financial guarantee contracts.
The expected credit losses are taken into account in the following stages (see section 11 Risk
management for quantitative disclosures):
Impairment of financial assets
Stage 1 Stage 2 Stage 3
Credit risk:
Low credit risk
(credit risk has not increased
significantly since its initial
recognition)
Elevated credit risk
(credit risk has increased
significantly since its initial
recognition)
Significant financial
difficulties on the part of the
borrower or the issuer
(breach of contract)
Recognition of
loss allowance:
Impairment in the amount of
the 12-month expected
losses
Impairment in the amount of
expected lifetime losses
Impairment in the amount of
expected lifetime losses
Calculation of
interest income:
Based on the effective
interest rate on the gross
carrying amount
Based on the effective
interest rate on the gross
carrying amount
Based on the effective
interest rate on the net
carrying amount
• The credit risk is presumed to be low if the internal rating corresponds to an external investment
grade rating (Standard & Poor’s: > BBB–; Moody’s: > Baa3).
• The credit risk is presumed to have increased significantly if the financial asset is more than 30 days
past due. Reclassifications are carried out in stage 3 as soon as a financial asset has become credit-
impaired, financial assets are more than 90 days overdue or a breach of contract has been
ascertained.
• Probabilities of default and collection rates depending on the rating category serve to determine the
amount of impairment losses to be recognised. The valuation allowance is recognised in the amount
of the present value of the expected credit losses.
For trade receivables, contract assets and receivables under leases, a simplified method is applied to
measure the valuation allowance. For these receivables and assets, a valuation allowance is always
recognised in the amount of the lifetime expected credit loss using a loss allowance table.
267ANNUAL FINANCIAL REPORT - GROUP
6. Working capital
Working capital includes the following balance sheet items:
• inventories;
• trade receivables, current other receivables and securities;
• cash and cash equivalents; and
• trade payables and current other liabilities.
6.1 Inventories and proof of origin and/or
green electricity certificates
Inventories of primary energy sources as well as additives and consumables are measured at the lower
of cost or net realisable value at the reporting date. The use of primary energy sources and raw materials,
additives and consumables is determined using the moving average price method.
Inventories of natural gas held for trading by VERBUND are measured through profit or loss under
other revenue. According to the brokerage exemption for raw materials and commodity dealers, the
measurement benchmark is fair value (Level 1) less costs to sell. The fair value corresponds to the
quoted price for front-month gas forwards on the Central European Gas Hub (CEGH) or NetConnect
Germany (NCG).
Guarantees of origin and green electricity certificates that are held for sale in the normal course of
business are recognised in accordance with IAS 2 and IAS 20. Guarantees of origin and green electricity
certificates are recognised as inventories when the legally enforceable rights are acquired (as a rule,
generation of electricity in certified power plants). Income from the allocation of certificates is
presented under other operating income offset with the change in inventories from the disposal of
certificates. Subsequent measurements are carried out at the lower net realisable value if necessary.
Proceeds from the sale of guarantees of origin or green electricity certificates are recognised under
other revenue.
Inventories €m
2020 2021
Natural gas 2.6 23.1
Coal 0.8 0.0
Inventories of primary energy sources held for generation 3.4 23.1
Emission rights held for trading 14.8 4.8
Measurements of emission rights held for trading 7.8 8.6
Fair value of emission rights held for trading 22.5 13.3
Proof of origin and green electricity certificates 0.3 1.7
Additives and consumables 6.5 11.0
Other 0.3 0.9
Inventories 33.0 49.9
6.1.1
Inventories
268
6.2 Trade receivables, other current receivables and securities
Trade receivables, receivables from unconsolidated subsidiaries and receivables from investees are
classified as measured at amortised cost (AC) and thus accounted for at cost less any impairment losses
(see section 5 Financial assets).
Trade receivables, other current receivables and securities €m
2020 2021 2020 2021
Non-
current
Non-
current
Current Current
Trade receivables 0.0 0.0 342.7 818.4
Receivables from investees 0.0 0.0 39.8 57.6
Other loans – – 0.1 0.0
Loans to investees – – 3.5 49.1
Other receivables and assets 122.3 150.2 234.0 2,940.5
Trade receivables,
other current receivables and securities
122.3 150.2 620.1 3,865.7
Current other receivables include mainly derivatives and hedging instruments from the finance and
energy area as well as temporary investments in the form of money market transactions. In addition,
current other receivables include the portfolio of emission rights (see section 4.1 Intangible assets).
Other receivables with a maturity of more than one year are reported under investments and non-
current other receivables.
Other receivables and assets €m
2020 2021 2020 2021
Non-current Non-current Current Current
Derivatives in the energy area 0.0 0.0 152.2 2,257.8
Derivatives in the finance area 87.7 70.3 0.0 0.0
Securities 0.0 0.0 0.0 4.3
Guarantees in electricity trading 0.0 0.0 32.9 597.2
Money market transactions 0.0 0.0 0.0 0.0
Emission rights – – 15.6 31.2
Receivables from tax clearing 0.0 0.0 10.2 22.9
Receivables from accrued interest 0.0 0.0 0.3 0.3
Other 34.7 80.0 22.8 26.8
Other receivables and assets 122.3 150.2 234.0 2,940.5
6.2.1
Trade receivables,
other current
receivables and
securities
269ANNUAL FINANCIAL REPORT - GROUP
6.3 Cash and cash equivalents
Cash and cash equivalents €m
2020 2021
Cash at banks 49.2 318.5
Cash in hand 0.0 0.0
Cash and cash equivalents 49.2 318.6
The lock-in period for all current financial investments reported in cash and cash equivalents was
less than three months at the time the investment was made. Cash and cash equivalents correspond to
the fund of cash and cash equivalents in the cash flow statement as defined in IAS 7.
6.4 Trade payables and current other liabilities
Trade payables and other liabilities
€m
2020 2021
Derivatives in the energy area 241.3 3,872.5
Trade payables 224.0 293.6
Outstanding receipts for investments 127.3 137.5
Other liabilities from electricity and grid deliveries 37.0 76.8
Other liabilities for maintenance expenses 45.5 48.6
Other personnel-related liabilities 37.5 41.2
Liabilities to tax authorities 4.7 35.4
Liabilities to the emissions registry 15.6 26.5
Liabilities to unconsolidated subsidiaries and investees 5.3 21.6
Electricity supply commitment 9.7 11.6
Lease liabilities 22.9 8.3
Derivatives in the finance area 10.7 5.9
Liabilities from social security (including social insurance institutions) 5.0 5.8
Other liabilities for legal, audit and consulting expenses 4.0 4.1
Other 23.1 25.4
Trade payables and other liabilities 813.8 4,614.7
6.3.1
Cash and cash
equivalents
6.4.1
Trade payables and
current other
liabilities
270
7. Equity
Just as in the previous year, the share capital comprised 170,233,686 no-par value shares in the form of
bearer shares (category A) and 177,182,000 no-par value shares in the form of registered shares
(category B). Category B represents 51% of the share capital, authenticated by an interim certificate
deposited with the Federal Ministry of Finance and made out in the name of the Republic of Austria.
The share capital was paid in full.
The amount of €954.3m (previous year: €954.3m), which represents the portion of the reserves not
retained from the profit for the period in previous reporting periods, is recognised under capital
reserves.
Retained earnings comprise the retained profits and the effects on equity attributable to the
shareholders of VERBUND AG from the shift between shareholder groups. Of the retained earnings, the
amount that can be distributed to the shareholders of VERBUND AG is the item presented as profit for
the period in the (separate) annual financial statements of VERBUND AG as at 31 December 2021 that
are prepared in accordance with the Austrian Commercial Code (Unternehmensgesetzbuch, UGB).
Profit for the 2021 financial year that had not yet been approved amounted to €364.8m (previous year:
€260.6m). A dividend of €1.05 per share (previous year: €0.75 per share) will be recommended to the
Annual General Meeting.
The reserve for differences from currency translation includes primarily the currency translation of the
consolidated Romanian subsidiary VERBUND Wind Power Romania SRL.
Non-controlling interests
1
in %
2020 2021
Gas Connect Austria GmbH – 49.00
Austrian Gas Grid Management AG – 74.00
VERBUND Innkraftwerke GmbH 29.73 29.73
VERBUND Hydro Power GmbH 15.94 15.94
VERBUND Wind Power Austria GmbH 19.46 19.46
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
Share capital
Capital reserves
Retained earnings
Reserve for
differences from
currency translation
Non-controlling
interests
271ANNUAL FINANCIAL REPORT - GROUP
8. Liabilities
The notes in this section relate to non-current and current financial liabilities as well as non-current
other liabilities. Details regarding trade payables and current other liabilities are provided in section 6
Working capital.
8.1 Financial liabilities
Financial liabilities are recognised at fair value when the funds are provided. As a rule, this corresponds
to the amount actually received. Any premiums or discounts are allocated over the financing term by
applying the effective interest method and presented on an accrual basis in interest expenses.
Individual financial liabilities originally incurred in connection with cross-border leasing
transactions were classified at fair value through profit or loss upon initial recognition using the fair
value option. As a result, measurement inconsistencies that would have otherwise arisen could be
eliminated.
The closed items on the balance sheet reported under financial liabilities as well as under
investments relate to the cross-border leasing transactions that were terminated early in the years 2009
and 2010. Some of the transactions were terminated in their entirety, i.e. all investments and all
liabilities (A-loans and B-loans) were repaid. Some of the transactions were only partially terminated,
whereby the existing B-loans and the corresponding investments were continued. Therefore, balance
sheet cover remains in place. The accounting balances denominated in foreign currency (US dollar) are
measured at the exchange rate prevailing at the reporting date. Expenses and income from the
measurement correspond to one another both in terms of value as well as with respect to the value date
and are offset. The financial investments and liabilities resulting from the cross-border leasing
transactions that were terminated early continue to be presented separately in the notes to the
consolidated financial statements in order to improve clarity; with the exception of the valuation
allowances recognised for expected credit losses, all items are closed on the balance sheet (see
section 11 Risk management and section 13 Other).
272
Non-current and current financial liabilities
€m
2020 2021 2020 2021
Non-current Non-current Current Current
Bonds 496.0 986.5 0.8 4.1
Financial liabilities to banks 278.6 253.4 83.3 1,458.3
Financial liabilities to others 0.0 147.0 0.0 0.0
Capital shares attributable to
limited partners 0.0 0.0 0.0 0.0
Subtotal 774.5 1,386.9 84.1 1,462.5
Financial liabilities to banks –
closed items on the balance sheet 427.7 447.2 0.0 0.0
Non-current and current
financial liabilities
1,202.2 1,834.1 84.1 1,462.5
Non-current and current financial liabilities
1
€m
2020 2021
Carrying amount as at 1/1 1,111.5 858.5
Borrowings 0.0 489.1
Additions from business acquisitions 0.0 147.6
Net change in money market transactions – 15.0 1,380.2
Changes in capital shares attributable to limited partners 0.0 0.1
Changes in interest accruals – 4.1 4.0
Scheduled repayments – 233.9 – 30.1
Carrying amount as at 31/12 858.5 2,849.4
of which non-current liabilities 774.5 1,386.9
of which current liabilities 84.1 1,462.5
1
excl. financial liabilities from closed items on the balance sheet
8.1.1
Non-current and
current financial
liabilities
273ANNUAL FINANCIAL REPORT - GROUP
Financial liabilities – closed items on the balance sheet €m
2020 2021
Carrying amount as at 1/1 455.9 427.7
Foreign exchange gains or losses – 35.1 22.9
Capitalisation 30.3 30.9
Repayments and/or disposals – 23.8 – 16.9
Market value changes 0.5 – 17.4
Carrying amount as at 31/12 427.7 447.2
of which non-current liabilities 427.7 447.2
VERBUND had no mortgage-backed liabilities as at 31 December 2021 or in the previous year.
274
Non-current and current financial liabilities 2021
Longest
maturity
Issue
volume
Carrying
amount as
at 31/12
1 year or
less
Bonds
Euro currency 2041 1,000.0 990.6 4.3
Total bonds 990.6 4.3
of which at a fixed interest rate 2041 1,000.0 990.6 4.3
Financial liabilities to banks
Euro currency 2037 1,970.0 1,711.8 1,458.3
Total financial liabilities to banks 1,970.0 1,711.8 1,458.3
of which at a fixed interest rate 2037 490.0 260.5 25.8
of which at a variable interest rate 2030 1,480.0 1,451.3 1,432.5
Financial liabilities to others
Euro currency 2024 147.0 147.0 0.0
Total financial liabilities to others 147.0 147.0 0.0
of which at a variable interest rate 2024 147.0 147.0 0.0
Financial liabilities to banks –
closed items on the balance sheet
1
Foreign currencies ($) 2030 447.2
Total financial liabilities to banks –
closed items on the balance sheet 447.2
of which at a fixed interest rate 2030 447.2
Capital shares attributable to limited partners 0.0
Total financial liabilities 3,296.6 1,462.6
1
There is balance sheet cover on the asset side for these financial liabilities.
275ANNUAL FINANCIAL REPORT - GROUP
€m
› 1 to 2
years
› 2 to 3
years
› 3 to 4
years
› 4 to 5
years
› 5 years Weighted
nominal
interest rate
Weighted
effective
interest rate
Fair value
as at 31/12
0.0 496.9 0.0 0.0 489.4 1.20% 1.28% 1,019.8
0.0 496.9 0.0 0.0 489.4 1.20% 1.28% 1,019.8
0.0 496.9 0.0 0.0 489.4 1.20% 1.28% 1,019.8
25.1 25.1 20.1 12.3 170.8 0.11% 2.21% 1,740.2
25.1 25.1 20.1 12.3 170.8 0.11% 2.21% 1,740.2
22.6 22.6 17.6 9.8 162.0 2.29% 2.51% 289.2
2.5 2.5 2.5 2.5 8.8 – 0.28% 0.36% 1,451.0
0.0 147.0 0.0 0.0 0.0 0.90% 0.96% 151.2
0.0 147.0 0.0 0.0 0.0 0.90% 0.96% 151.2
0.0 147.0 0.0 0.0 0.0 0.90% 0.96% 151.2
399.0 48.2 481.0
399.0 48.2 481.0
399.0 48.2 481.0
0.0
25.1 669.0 20.1 411.3 708.4
276
Non-current and current financial liabilities 2020
Longest
maturity
Issue
volume
Carrying
amount as
at 31/12
1 year or
less
Bonds
Euro currency 2024 500.0 496.8 0.9
Total bonds 500.0 496.8 0.9
of which at a fixed interest rate 2024 500.0 496.8 0.9
Financial liabilities to banks
Euro currency 2037 595.0 361.8 83.3
Total financial liabilities to banks 595.0 361.8 83.3
of which at a fixed interest rate 2037 495.0 288.1 30.8
of which at a variable interest rate 2030 100.0 73.8 52.5
Financial liabilities to others
Euro currency 2021 0.1 0.0 0.0
Total financial liabilities to others 0.1 0.0 0.0
of which at a fixed interest rate 2021 0.1 0.0 0.0
Financial liabilities to banks –
closed items on the balance sheet
1
Foreign currencies ($) 2030 0.0 427.7 0.0
Total financial liabilities to banks –
closed items on the balance sheet 0.0 427.7 0.0
of which at a fixed interest rate 2030 0.0 427.7 0.0
Capital shares attributable to limited partners – 0.0 0.0
Total financial liabilities 1,286.3 84.2
1
There is balance sheet cover on the asset side for these financial liabilities.
277ANNUAL FINANCIAL REPORT - GROUP
€m
› 1 to 2
years
› 2 to 3
years
› 3 to 4
years
› 4 to 5
years
› 5 years Weighted
nominal
interest rate
Weighted
effective
interest rate
Fair value
as at 31/12
0.0 0.0 495.9 0.0 0.0 1.50% 1.72% 532.5
0.0 0.0 495.9 0.0 0.0 1.50% 1.72% 532.5
0.0 0.0 495.9 0.0 0.0 1.50% 1.72% 532.5
25.1 25.1 25.1 20.1 183.1 1.94% 2.37% 405.0
25.1 25.1 25.1 20.1 183.1 1.94% 2.37% 405.0
22.6 22.6 22.6 17.6 171.8 2.43% 2.54% 331.0
2.5 2.5 2.5 2.5 11.3 0.04% 0.75% 74.0
0.0 0.0 0.0 0.0 0.0 3.00% 3.02% 0.0
0.0 0.0 0.0 0.0 0.0 3.00% 3.02% 0.0
0.0 0.0 0.0 0.0 0.0 3.00% 3.02% 0.0
0.0 0.0 0.0 95.4 332.3 – – 469.3
0.0 0.0 0.0 95.4 332.3 – – 469.3
0.0 0.0 0.0 95.4 332.3 – – 469.3
0.0 0.0 0.0 0.0 0.0 – –
25.1 25.1 521.0 115.5 515.4
278
8.2 Non-current other liabilities
Non-current other liabilities are accounted for at amortised cost and relate primarily to the following
transactions:
• Obligation to supply electricity under a 20-year electricity supply agreement that was incurred in
connection with the acquisition of Kraftwerksgruppe Inn GmbH (now VERBUND Innkraftwerke
GmbH) in the 2009 reporting period. An unscheduled repayment of 60% of the obligation was made
in 2013 as part of the acquisition of (additional) Bavarian hydropower plant capacities.
• Obligation to transfer the 50% interest in Donaukraftwerk Jochenstein AG to the Free State of Bavaria
without exchange of consideration assumed as part of the acquisition of (additional) Bavarian
hydropower plant capacities.
• Lease liabilities reported as liabilities in accordance with IFRS 16 (see section 4.3 Leases).
Other non-current liabilities €m
2020 2021
Electricity supply commitment 138.0 126.5
Obligation to return an interest 110.5 140.4
Lease liabilities 75.3 86.0
Trade payables 1.7 2.1
Other 73.5 107.2
Other non-current liabilities 399.0 462.1
9. Provisions
9.1 Provisions in the Group
In accordance with IAS 37, provisions are recognised for legal and constructive obligations to external
third parties resulting from past events whose settlement will probably lead to a future outflow of
economic resources. It must be possible to reliably estimate the amount of the obligation. Provisions
are measured at the expected settlement amount.
Non-current provisions set aside to settle claims more than twelve months into the future are
discounted if the present value of the expected settlement amount differs significantly from the nominal
amount. The discount rate is a pre-tax interest rate adjusted to the specific risks of the liability. Accrued
interest amounts are presented as interest expenses; any effects from changes in the interest rate are
recognised in the operating result.
8.2.1
Non-current
other liabilities
279ANNUAL FINANCIAL REPORT - GROUP
Non-current and current provisions can be broken down as follows:
Non-current and current provisions €m
2020 2021 2020 2021
Non-current Non-current Current Current
Provisions for pensions 455.5 429.7 – –
Provisions for obligations
similar to pensions 170.6 143.9 – –
Provisions for termination benefits 125.1 120.1 – –
Provisions for partial retirement 3.5 3.4 1.5 1.5
Other personnel-related provisions 22.0 25.2 21.5 26.9
Other provisions 109.5 110.7 16.6 16.3
Non-current and current provisions 886.2 832.9 39.6 44.7
9.2 Other personnel provisions
Provisions for current pensions, vested pension benefits and similar obligations are determined in
accordance with IAS 19 using the projected unit credit method (PUC method), whereby
remeasurements of the net liability are recognised in other comprehensive income in the year in which
the liability is incurred. With the exception of net interest expense, all expenses (and returns) related to
these obligations are recognised under personnel expenses. Net interest expense is reported under
interest expenses.
These defined benefit obligations are partially covered by pension plan assets at APK Pensions-
kasse AG earmarked for this purpose. Contractual trust arrangements (CTA) were set up in order to
secure the entitlements from the company pension plan for the employees of VERBUND
Innkraftwerke GmbH, Innwerk AG and Grenzkraftwerke GmbH. VERBUND is obligated to provide
additional funding to the extent the obligations are to be fulfilled through the pension fund; there is no
such obligation to provide additional funding for the CTA. Both pension plan assets as well as the
contractual trust arrangements are recognised as plan assets as defined under IAS 19 and offset with the
provision for current pensions and vested pension benefits.
Pension plan assets are invested in compliance with the provisions of the Austrian Pension Fund Act
(Pensionskassengesetz, PKG) and the corresponding regulations of the Austrian Financial Market
Authority (FMA).
Similar obligations relate to employer contributions for supplementary health insurance premiums
to be paid after retirement. The provisions are determined in the same manner as provisions for
pension obligations.
9.1.1
Non-current and
current provisions
280
Existing provisions for pensions and similar obligations as well as obligations from termination benefits
(carrying amount as at 31 December 2021: €693.6m; previous year: €751.2m) were measured based on
assumptions and estimates as at the reporting date. The key factors of influence included the discount
rate, the estimated retirement age and the estimated life expectancy as well as future increases in
salaries and pension benefits:
Actuarial assumptions for pension obligations
2020 2021
Discount rate or expected rate of return from plan assets 0.75% 1.00%
Pension increases 1– 2% 1– 2%
Salary increases 2.75%/2.75% 2.75%/2.75%
Employee turnover none none
Longevity based on mortality table
AVÖ 2018-
P/Heubeck
Mortality Tables
2018 G
AVÖ 2018-
P/Heubeck
Mortality Tables
2018 G
Actuarial assumptions for obligations similar to pensions
2020 2021
Discount rate 0.75% 1.25%
Employee turnover (depending on duration of employment) 0.0%– 4.1% 0%– 4.1%
Trend of contributions based on hospital cost index for new contracts
(with participation)/old contracts (without participation) 2.75%– 6.0% 2.75%– 5.5%
Longevity based on mortality table
AVÖ 2018-
P/Heubeck
Mortality Tables
2018 G
AVÖ 2018-
P/Heubeck
Mortality Tables
2018 G
Actuarial assumptions for termination benefit obligations
2020 2021
Discount rate 0.50% 0.75%
Salary increases 2.75%/2.75% 2.75%/2.75%
Employee turnover (depending on duration of employment) 0.0%– 1.3% 0.0%– 1.3%
Longevity based on mortality table
AVÖ 2018-
P/Heubeck
Mortality Tables
2018 G
AVÖ 2018-
P/Heubeck
Mortality Tables
2018 G
VERBUND is exposed to investment risk, interest rate risk, life expectancy risk and salary risk as well
as the risk of price increases and employee turnover risk based on the existing pension and similar
obligations as well as obligations from statutory termination benefits. The following sensitivity analyses
show the effects resulting from changes in significant actuarial assumptions on the obligations. The
change in the obligation was determined in a manner comparable with the determination of the actual
obligation based on the PUC method in accordance with IAS 19.
9.2.1
Measurement of
pensions and similar
obligations as well
as statutory
termination benefits
281ANNUAL FINANCIAL REPORT - GROUP
Sensitivity analysis for net pension liability 2021
Change in
assumption in
percentage
points or years
If assumption
increases,
change in net
liability of
If assumption
decreases,
change in net
liability of
Discount rate 0.25% – 3.10% 3.27%
Pension increases 0.50% 6.65% – 6.01%
Longevity based on mortality table 1 year 5.65% – 5.54%
Sensitivity analysis for obligations similar to pensions 2021
Change in
assumption in
percentage
points or years
If assumption
increases,
change in
obligation of
If assumption
decreases,
change in
obligation of
Discount rate 0.25% – 3.94% 4.20%
Trend of contributions based on hospital cost index 0.50% 8.35% – 7.46%
Longevity based on mortality table 1 year 7.00% – 6.66%
Sensitivity analysis for termination benefit obligations 2021
Change in
assumption in
percentage
points or years
If assumption
increases,
change in
obligation of
If assumption
decreases,
change in
obligation of
Discount rate 0.25% – 1.91% 1.97%
Salary increases 0.50% 3.87% – 3.68%
Longevity based on mortality table 1 year 0.03% – 0.04%
Sensitivity analysis for net pension liability 2020
Change in
assumption in
percentage
points or years
If assumption
increases,
change in net
liability of
If assumption
decreases,
change in net
liability of
Discount rate ± 0.25 – 3.27% 3.46%
Pension increases ± 0.50 7.01% – 6.31%
Longevity based on mortality table ± 1 year 5.83% – 5.70%
Sensitivity analysis for obligations similar to pensions 2020
Change in
assumption in
percentage
points or years
If assumption
increases,
change in
obligation of
If assumption
decreases,
change in
obligation of
Discount rate ± 0.25 – 4.27% 4.56%
Trend of contributions based on hospital cost index ± 0.50 9.01% – 8.00%
Longevity based on mortality table ± 1 year 7.51% – 7.09%
282
Sensitivity analysis for termination benefit obligations 2020
Change in
assumption in
percentage
points or years
If assumption
increases,
change in
obligation of
If assumption
decreases,
change in
obligation of
Discount rate ± 0.25 – 2.01% 2.08%
Salary increases ± 0.50 4.07% – 3.86%
Longevity based on mortality table ± 1 year 0.11% – 0.12%
Reconciliation from defined benefit obligation to provisions €m
2020 2021 2020 2021
Pension
obligations
Pension
obligations
Obligations
similar to
pensions
Obligations
similar to
pensions
Defined benefit obligation
covered by plan assets 275.2 298.9 – –
Fair value of plan assets – 157.1 – 190.9 – –
Net value of obligations
covered by plan assets
118.1 108.0 – –
Defined benefit obligation
not covered by plan assets
337.4 321.6 170.6 143.8
Carrying amount of provisions
as at 31/12 455.5 429.6 170.6 143.8
Pension expenses €m
2020 2021 2020 2021
Pension
obligations
Pension
obligations
Obligations
similar to
pensions
Obligations
similar to
pensions
Service costs (vested claims) 4.9 4.3 2.9 2.7
Net interest expense 3.5 3.6 1.7 1.3
Pension expenses
(recognised in profit for the period) 8.4 7.9 4.6 4.0
Remeasurements of the net liability – 16.3 – 56.5 – 0.5 – 26.3
Pension expenses
(recognised in total comprehensive
income for the period)
– 7.9 – 48.6 4.1 – 22.3
9.2.2
Provisions for
pensions and similar
obligations
283ANNUAL FINANCIAL REPORT - GROUP
Reconciliation of defined benefit obligation €m
2020 2021 2020 2021
Pension
obligations
Pension
obligations
Obligations
similar to
pensions
Obligations
similar to
pensions
Defined benefit obligation as at 1/1 643.2 612.6 170.9 170.6
Additions from business acquisitions 0.0 75.3 0.0 0.0
Service costs (vested claims) 4.9 4.3 2.9 2.7
Pension payments or contributions to
supplementary health insurance
(benefit payments) – 32.5 – 36.0 – 4.4 – 4.5
Interest expenses 4.7 4.9 1.7 1.3
Remeasurements based on
experience adjustments – 4.2 – 12.0 – 7.1 – 8.3
Remeasurements arising from
changes in demographic assumptions 0.0 0.0 0.0 0.0
Remeasurements arising from
changes in financial assumptions
– 3.5 – 28.6 6.6 – 18.0
Defined benefit obligation as at 31/12 612.6 620.4 170.6 143.8
On 31 December 2021, the weighted average duration of the pension obligation was 13 years (previous
year: 14 years) and that of the obligations similar to pensions was 17 years (previous year: 18 years).
Reconciliation of plan assets €m
2020 2021 2020 2021
Pension
obligations
Pension
obligations
Obligations
similar to
pensions
Obligations
similar to
pensions
Fair value of plan assets as at 1/1 158.7 157.1 – –
Additions from business acquisitions 0.0 30.4 – –
Contributions by VERBUND 0.0 0.2 – –
Payouts (benefit payments) – 11.4 – 14.1 – –
Interest income 1.2 1.4 – –
Other gains (+) or losses (–) 8.6 15.9 – –
Fair value of plan assets as at 31/12 157.1 190.9 – –
The investment and risk association in the pension fund attributable to VERBUND realised a gain of
€17.3m in the 2021 reporting period (previous year: loss of €9.8m). The deficit represents the portion of
pension obligations not covered by plan assets; these relate primarily to direct commitments to pension
recipients. In the 2021 reporting period, current contributions to the pension fund for coverage of
defined contribution plans are expected in the amount of €0.0m (previous year: €0.0m).
284
Plan assets %
2020 2021
Active
market
Unquoted Total
Active
market
Unquoted Total
Shares 41.5 0.0 41.5 41.7 0.0 41.7
Bonds 34.9 0.0 34.9 33.6 0.0 33.6
Money market 11.6 0.0 11.6 7.0 0.0 7.0
Other investments 12.0 0.0 12.0 17.7 0.0 17.7
Total 100.0 0.0 100.0 100.0 0.0 100.0
VERBUND regularly coordinates the general investment guidelines with APK Pensionskasse AG. Risk
management in APK Pensionskasse AG is guided by the provisions of the Austrian Pension Fund Act
(PKG) and the corresponding directives of the Financial Market Authority (FMA).
Employees whose service began on or before 31 December 2002 are entitled to receive a one-time
payment based on statutory provisions in particular when they retire. This obligation is measured in
accordance with IAS 19 based on the PUC method with an accumulation period of 25 years, whereby
remeasurements of the net liability are recognised immediately in other comprehensive income.
The employer is only obligated to make regular contributions for all employees whose service began
after 31 December 2002 in Austria. Such contributions are therefore accounted for as defined
contribution plans in accordance with IAS 19. For these employment contracts, the employer pays
1.53% of the monthly gross salary into an employee pension fund.
The weighted average duration of the obligations from termination benefits is 8 years as at
31 December 2021 (previous year: 8 years).
Analysis of the provisions for termination benefits €m
2020 2021
Provisions for statutory termination benefits 123.8 119.1
Provisions for termination benefits from special agreements
in accordance with social plan
1.3 0.9
Carrying amount of provisions as at 31/12 125.1 120.0
Expenses for termination benefit costs €m
2020 2021
Service costs 0.8 1.0
Net interest expense 1.0 0.6
Expenses for termination benefit costs (recognised in profit for the period) 1.8 1.6
Remeasurements of termination benefits 2.8 – 3.3
Expenses for termination benefit costs (recognised in total comprehensive
income for the period)
4.6 – 1.7
9.2.3
Provisions for
termination benefits
285ANNUAL FINANCIAL REPORT - GROUP
Reconciliation of defined benefit obligation for statutory termination benefits €m
2020 2021
Defined benefit obligation as at 1/1 136.3 123.8
Change in the basis of consolidation 0.0 10.5
Service costs (vested claims) 0.8 1.0
Interest expenses 1.0 0.6
Termination benefits (benefit payments) – 17.1 – 13.5
Remeasurements based on experience adjustments 0.0 – 1.0
Remeasurements arising from changes in demographic assumptions 0.5 0.0
Remeasurements arising from changes in financial assumptions 2.3 – 2.3
Defined benefit obligation as at 31/12 123.8 119.1
The partial retirement obligation is measured in accordance with IAS 19 based on the PUC method,
whereby remeasurements of the net liability are recognised immediately through profit or loss. The
resulting expenses to be recognised are presented under pension expenses.
There are also contractual trust arrangements (CTAs) for the purpose of securing credit balances
from partial retirement models of employees of VERBUND Innkraftwerke GmbH and Innwerk AG.
There is no obligation to provide additional funding. The CTA is recognised as plan assets as defined
under IAS 19 and offset against the provision for partial retirement.
Reconciliation from defined benefit obligation to provisions €m
2020 2021
Defined benefit obligation covered by plan assets 7.8 7.9
Fair value of plan assets – 2.7 – 3.1
Carrying amount of provisions as at 31/12 5.1 4.8
Expenses for partial retirement €m
2020 2021
Service costs 0.8 1.5
Net interest expense 0.0 0.0
Remeasurements 0.4 0.2
Expenses for partial retirement (recognised in profit for the period) 1.2 1.7
Reconciliation of defined benefit obligation €m
2020 2021
Defined benefit obligation as at 1/1 10.2 7.8
Change in the basis of consolidation 0.0 0.3
Service costs (vested claims) 0.8 1.5
Net interest expense 0.0 0.0
Payments for early retirement – 3.7 – 2.3
Remeasurements 0.5 0.6
Defined benefit obligation as at 31/12 7.8 7.9
9.2.4
Provisions for
partial retirement
obligations
286
Reconciliation of plan assets €m
2020 2021
Fair value of plan assets as at 1/1 2.6 2.7
Other gains (+) or losses (–) 0.1 0.4
Fair value of plan assets as at 31/12 2.7 3.1
Plan assets in %
2020 2021
Bonds 100.0 100.0
Total 100.0 100.0
Analysis of other personnel-related provisions €m
2020 2021 2020 2021
Non-current Non-current Current Current
Provision for bonuses
from the performance-based
remuneration system – – 21.3 26.4
Provision for anniversary bonuses 16.5 20.0 – –
Other 5.5 5.2 0.2 0.5
Other personnel-related provisions 22.0 25.2 21.5 26.9
Reconciliation of other personnel-related provisions €m
2020 2021
Carrying amount as at 1/1 42.2 43.5
of which non-current 21.3 22.0
of which current 20.9 21.5
Change in the basis of consolidation 0.0 5.9
New provisions 19.2 20.6
Interest accrued 0.2 0.2
Appropriation – 17.6 – 17.6
Reversal – 0.4 – 0.5
Carrying amount as at 31/12 43.5 52.1
of which non-current 22.0 25.2
of which current 21.5 26.9
9.3 Other provisions
Dismantling and decommissioning obligations
Provisions are recognised at the discounted settlement amounts for obligations resulting from the
dismantling or decommissioning of power plants in the reporting period in which they are incurred; at
the same time, the carrying amounts for the power plants are increased as a general rule (see section 4.2
Property, plant and equipment). In subsequent periods, the capitalised costs for dismantling or
9.2.5
Other personnel-
related provisions
287ANNUAL FINANCIAL REPORT - GROUP
decommissioning are depreciated over the (remaining) useful life of the plants; interest is accrued
annually.
The provisions are measured at the reporting date on the basis of assumptions and estimates. The key
factors of influence were the expected dismantling dates, any possible expert reports to ascertain the
dismantling and decontamination costs or proceeds from the sale of scrap, the valorisation of these
costs and the discount rate of 0.25–
5.43% (previous year: 0.50– 3.73%).
Reconciliation of other provisions 2021 €m
Dismantling and
decontamin-
ation costs
Other Total
Carrying amount as at 1/1/2021 35.9 90.2 126.1
of which non-current 33.3 76.2 109.5
of which current 2.6 14.0 16.6
Change in the basis of consolidation 4.0 2.7 6.6
New provisions 1.3 7.2 8.4
Interest accrued – 0.3 0.4 0.1
Appropriation – 0.9 – 7.6 – 8.5
Reversal – 3.5 – 2.1 – 5.6
Currency translation – 0.1 0.0 – 0.1
Carrying amount as at 31/12/2021 36.3 90.7 127.0
of which non-current 34.4 76.3 110.7
of which current 1.9 14.4 16.3
Reconciliation of other provisions 2020 €m
Dismantling and
decontamin-
ation costs
Other Total
Carrying amount as at 1/1/2020 30.9 76.9 107.8
of which non-current 27.8 65.2 93.0
of which current 3.1 11.7 14.8
New provisions 5.0 20.3 25.3
Interest accrued 0.4 0.7 1.1
Appropriation – 0.1 – 5.8 – 5.9
Reversal – 0.2 – 1.9 – 2.1
Currency translation – 0.1 0.0 – 0.1
Carrying amount as at 31/12/2020 35.9 90.2 126.1
of which non-current 33.3 76.2 109.5
of which current 2.6 14.0 16.6
9.3.1
Other provisions
288
10. Taxes
Current tax liabilities in the 2021 reporting period can be broken down as follows:
Current tax liabilities €m
2020 2021
Taxes on income 196.1 219.5
Other taxes 1.3 2.9
Current tax liabilities 197.4 222.4
Deferred taxes were netted against the same tax authority as follows:
Net deferred tax assets and liabilities €m
2020 2021
Assets
Equity and
liabilities
Assets
Equity and
liabilities
Property, plant and equipment 1.2 835.3 0.3 936.5
Tax-deductible goodwill 0.0 68.7 0.0 82.0
Financial instruments 25.5 1.8 492.4 7.0
Special depreciation for tax purposes 0.0 89.1 0.0 87.9
Provisions for employee benefits relating to
pensions and termination benefits (Sozialkapital) 135.6 0.3 121.0 0.8
Regulatory obligations 0.0 91.7 0.0 98.4
Tax loss carryforwards 120.0 0.0 136.2 0.0
Other line items 36.7 29.2 46.1 34.4
Deferred tax assets/liabilities 319.0 1.116.1 795.9 1.247.0
Netting of deferred tax assets and
liabilities against the same tax authority
– 319.0 – 319.0 – 760.1 – 760.1
Net deferred tax assets and liabilities 0.0 797.1 35.8 486.9
Outside basis differences
At 31 December 2021 (and in the previous year), it could be assumed under present tax rules that the
differences between the tax base of equity interests and the proportionate share of equity (outside basis
differences) of the consolidated subsidiaries, branch offices, associates and joint arrangements
included in VERBUND’s consolidated IFRS financial statements, which result in particular from
retained earnings and uncovered losses, will remain tax-free for the foreseeable future. Therefore, no
tax liability was recognised at 31 December 2021 for temporary differences in the amount of €5,189.5m
(previous year: €4,783.2m) in connection with these equity interests.
289ANNUAL FINANCIAL REPORT - GROUP
11. Risk management
VERBUND also uses primary and derivative financial instruments in both the finance and energy area
for the purpose of risk management.
11.1 Risk management in the finance area
VERBUND is exposed to considerable financial risk in its operating activities and the related financing
transactions. These comprise mainly interest rate and liquidity risks, counterparty risks, price risks from
securities, foreign exchange risks and the risk of a change in VERBUND’s rating.
Therefore, the focus is placed on the identification, analysis and assessment of risks and
opportunities as well as on the determination of measures to be implemented in this context in
VERBUND’s finance area. Own rules were defined in connection with Group policies in order to also
monitor and manage the financial risks accordingly.
The measures for monitoring and managing financial risks include in particular:
• the calculation and assessment of KPIs in line with market conditions with respect to locking in
interest rates, currency diversification and the duration of financial liabilities; and
• the drafting of a continuous liquidity plan on which basis sufficient liquidity is ensured at all times.
The primary financial instruments held by VERBUND include, in particular, investments such as
securities, loans, equity interests, trade receivables, cash at banks, securitised and non-securitised
financial liabilities and trade payables.
The derivative financial instruments used in the finance area comprise the following and are
recognised under the balance sheet items listed:
Derivative financial instruments in other receivables €m
Reference value
1
Positive fair values Positive fair values
31/12/2020 31/12/2021
Interest rate swaps –
closed items on the balance sheet
(fixed interest recipient)
$276.7m
(previous year:
$269.6m) 87.7 70.3
Forward exchange transactions $0.0m
(previous year:
$0.0m) 0.0 0.0
1
The reference value includes the reference basis of the derivative instruments. The actual cash flows only represent a fraction of these values.
Financial
instruments
290
Derivative financial instruments in other liabilities €m
Reference value
1
Negative fair values Negative fair
values
31/12/2020 31/12/2021
Interest rate swaps – hedges
(fixed interest payment)
€56.8m
(previous year:
€71.4m)
6.0 3.6
Interest rate swap relating to
financial liabilities (freestanding)
€90.8m
(previous year:
€106.8m) 4.7 2.3
1
The reference value includes the reference basis of the derivative instruments. The actual cash flows only represent a fraction of these values.
The derivative financial instruments listed serve exclusively to hedge financially against existing
currency and interest rate risks (see section entitled Interest rate risk for notes on the interest rate swaps
entered into for financial liabilities bearing variable interest as well as for intra-Group project financing).
In order to secure sufficient liquidity reserves, a five-year syndicated credit line in the amount of
€500.0m with two renewal options to extend the term for one year each was entered into in the 2018
reporting period. This was granted over VERBUND AG as part of an international banking syndicate.
This credit line was not drawn down. In order to further increase the liquidity reserve as a precautionary
measure in light of the higher volatilities in electricity prices, an agreement was entered into
in December 2021 regarding a short-term revolving credit facility that can be drawn against in the
maximum amount of €300.0m. This line of credit was fully drawn down at the end of the year. In
addition, there are also liquidity reserves in the form of securities and investment funds.
See section 5.1 Accounting treatment of financial instruments regarding contractually agreed
(undiscounted) cash outflows from financial liabilities in accordance with IFRS 7.
The amounts reported on the asset side also represent the maximum credit and default risk. The
counterparty risk in the electricity and grid business as well as in the finance area is measured and
monitored uniformly as part of Group-wide risk management.
Measures to reduce counterparty risk:
Measures to reduce counterparty risk
1 Transactions and investments are carried out principally only with customers with sufficient creditworthiness
(i.e. with external investment grade ratings from an international rating agency or based on an internal credit
review)
2 Assignment of individual limits for each counterparty based on the credit assessment
3 Group-wide monitoring of the individual counterparty limits
4 Observance of counterparty risk as a whole and of the customer structure portfolio based on probabilities
published by international rating agencies
5 Securing sufficient collateral (e.g. advance payments, bank guarantees, letters of comfort) for transactions
entered into
6 Reduction of risk by entering into offsetting agreements (with the exception of operating activities in the
regulated Grid segment, where there are some trade receivables for which the debtor does not meet the
requirements due to obligations to contract)
Liquidity risk
Credit risk
291ANNUAL FINANCIAL REPORT - GROUP
In the 2021 reporting period, a credit insurance policy was in effect for Austria and Germany in the
consumer business area with a 10% deductible. As at 31 December 2021, €114.1m of the trade
receivables (previous year: €34.2m) are covered under this insurance policy; however, there is a
maximum coverage of €10.0m per year.
The table below provides an overview of the material financial instruments with credit risk by credit
rating group:
Financial instruments with credit risk by assigned rating group 2021 €m
Credit
rating
group
Equiva-
lent
Moody’s-
rating
Financial
instruments
– closed
items on
the balance
sheet
Secu-
rities
Non-current
and current
other recei-
vables
1
Trade recei-
vables
Deriva-
tives in the
energy area
Invest-
ments as
well as cash
and cash
equivalents
2
A up to Aa3 247.9 0.0 0.0 20.9 1,034.9 2.4
B up to A3 199.2 7.1 26.6 372.4 428.1 299.2
C1–C3 up to Baa3 0.0 0.0 43.5 203.3 757.2 17.0
D1–D5 below Baa3 0.0 0.0 0.0 20.6 37.6 0.0
Not rated 0.0 135.7 719.6 201.2 0.0 0.0
Total 447.2 142.8 789.6 818.4 2,257.8 318.6
1
incl. receivables from investees and loans to investees //
2
Non-current and current other loans and money market transactions have been summarised as investments in this
presentation.
Financial instruments with credit risk by assigned rating group 2020 €m
Credit
rating
group
Equiva-
lent
Moody’s-
rating
Financial
instruments
– closed
items on
the balance
sheet
Secu-
rities
Non-current
and current
other recei-
vables
1
Trade recei-
vables
Deriva-
tives in the
energy area
Invest-
ments as
well as cash
and cash
equivalents
2
A up to Aa3 223.8 0.0 0.0 16.8 4.0 0.0
B up to A3 203.9 0.0 26.6 109.7 47.3 33.3
C1–C3 up to Baa3 0.0 0.0 0.0 120.6 91.6 21.2
D1–D5 below Baa3 0.0 0.0 0.0 4.3 9.3 0.0
Not rated 0.0 129.0 133.2 91.2 0.0 0.2
Total 427.6 129.0 159.8 342.7 152.2 54.7
1
incl. receivables from investees and loans to investees //
2
Non-current and current other loans and money market transactions have been summarised as investments in this
presentation.
• Securities and loans related to closed items on the balance sheet
These are not exposed to price or foreign exchange risk from VERBUND’s perspective. The
investments were either carried out on the basis of matching currencies and maturities or they were
adjusted to maturity, interest rates and currencies of the corresponding financial liabilities through
corresponding derivatives. The remaining credit risk of the partner in which the investments were
made was minimised by only investing with partners with original first-class ratings (group A).
292
• Other securities
The other securities without assigned ratings are, in particular, domestic investment funds (funds for
institutional investors) acquired to cover personnel-related provisions.
• Trade receivables
The amounts shown as “not rated” result on the one hand from the expansion of the consumer
business, which led to a large number of receivables that individually lie below the de minimis
threshold (< €0.2m). On the other hand, it also includes receivables for which no credit assessments
were carried out due to special circumstances (e.g. legal obligations to accept contracts).
The table below contains information regarding the default risk and recognised expected credit losses
for financial instruments that were classified as measured at amortised cost, with the exception of trade
receivables and receivables from investees, which are primarily also related to trade receivables. For all
financial instruments, the valuation allowance was recognised in the amount of the twelve-month
expected credit loss, because there is a low risk of default.
Expected credit losses 2021 €m
Equiva-
lent
Moody’s-
rating
Proba-
bility of
default
Loss ratio
Gross
carrying
amount
Valuation
allowance
Net
carrying
amount
A up to Aa3 0.02% 0.60% 247.9 0.0 248.0
B up to A3 0.06% 0.70% 155.6 0.1 155.6
C1–C3
up to
Baa3
0.10%–
0.26% 0.80% 0.0 0.0 0.0
Loans portion of a net investment
1
– – – 47.1 0.0 47.1
No recognition of expected
credit losses
2
– – – – – 939.7
Total 1,390.4
1
In their economic substance, non-current loans represent an increase in the net investment in Ashta Beteiligungsverwaltung GmbH (see section 4.5 Interests accounted for
using the equity method). //
2
Guarantees in energy trading in the amount of €597.2m are maintained as a special asset pool, which is why there is no default risk. No expected
credit losses are recognised for the other remaining financial instruments due to the low amount of exposure to default risk, the short term and/or the borrower’s good
creditworthiness.
293ANNUAL FINANCIAL REPORT - GROUP
Expected credit losses 2020 €m
Equiva-
lent
Moody’s-
rating
Proba-
bility of
default
Loss ratio Gross
carrying
amount
Valuation
allowance
Net
carrying
amount
A up to Aa3 0.02% 0.60% 223.8 0.0 223.8
B up to A3 0.07% 0.70% 142.8 0.1 142.8
C1–C3
up to
Baa3
0.12%–
0.26% 0.80% 0.0 0.0 0.0
Loans portion of a net investment
1
– – – 50.6 0.0 50.6
No recognition of expected
credit losses
2
– – – – – 97.3
Total 514.6
1
In their economic substance, non-current loans represent an increase in the net investment in Ashta Beteiligungsverwaltung GmbH (see section 4.5 Interests accounted for
using the equity method). //
2
Guarantees in energy trading in the amount of €33.2m are maintained as a special asset pool, which is why there is no default risk. No expected
credit losses are recognised for the other remaining financial instruments due to the low amount of exposure to default risk, the short term and/or the borrower’s good
creditworthiness.
For trade receivables and receivables from investees that are primarily related to trade receivables,
the credit losses expected over the term are measured using a valuation allowance matrix:
Expected credit losses 2021 €m
Loss ratio Gross carrying
amount
Valuation
allowance
Net carrying
amount
Not past due 0% 837.7 0.0 837.7
1– 30 days past due 0% 4.2 0.0 4.2
31– 120 days past due 10– 50% 4.4 – 0.3 4.1
> 120 days past due 90% 35.7 – 5.8 29.9
Total 882.0 – 6.1 876.0
Expected credit losses 2020 €m
Loss ratio Gross carrying
amount
Valuation
allowance
Net carrying
amount
Not past due 0% 375.3 0.0 375.3
1– 30 days past due 0% 4.0 0.0 4.0
31– 120 days past due 10-– 50% 1.4 – 0.3 1.1
> 120 days past due 90% 5.6 – 3.4 2.2
Total 386.2 – 3.7 382.5
VERBUND regards fluctuations in interest rates as a significant cash flow risk. The portion of financial
liabilities (taking interest rate swaps into account) for which VERBUND was exposed to a corresponding
interest rate risk was 56.0% as at 31 December 2021 (previous year: 9.0%). The increase compared with
the previous year can be attributed to a larger amount of collateral (margin payments) in connection
with electricity trading activities due to increased electricity prices that were financed by way of short-
term, variable-rate money market credit lines.
Interest rate risk
294
A 1.0% increase in the interest rate would result in a decrease of €16.0m p.a. (previous year: €0.8m p.a.)
in profit before taxes with the loan portfolio in existence as at the reporting date, including the money
market transactions. As a rule, hedging instruments are used in an attempt to reduce the effects of
short-term market price fluctuations on profit or loss. However, prolonged negative market price
changes can have a negative impact on performance.
At 31 December 2021, there were interest rate swaps (notional amount: $276.7m; previous year:
$269.6m) related to closed items on the balance sheet. The fair value of these derivatives, together with
the related securities, loans and receivables, in each case form a micro hedge that exactly equates to the
fair value recognised for the related financial liability. The changes in fair value of the interest rate
swaps correspond to the fluctuations in the value of the hedged financial liabilities measured at fair
value induced by changes in interest rates.
At 31 December 2021, there were additional interest rate swaps in a total notional amount of €56.8m
(previous year: €71.4m). These swaps exchange variable interest for a fixed interest rate in order to also
secure the existing low interest level for the long term. These interest rate swaps were designated as
hedging instruments as part of cash flow hedges in accordance with IFRS 9.
In addition, interest rate swaps (from variable to fixed interest) were entered into as part of intra-
Group project financing with a notional value of €90.8m (previous year: €106.8m) for which no hedging
relationships could be presented from a Group perspective (see section 5 Financial instruments). The
average remaining term for the entire portfolio is 4.7 years (previous year: 4.3 years).
There are no assets exposed to significant foreign exchange risks because deliveries are settled almost
entirely in euros; the same generally applies to other primary financial instruments.
Since securities and loans under closed items on the balance sheet as well as the associated liabilities
are denominated exclusively in US dollars, no foreign exchange risk is incurred.
Around 85% of the cross-border leasing transactions originally entered into in the years 1999 to 2001
were terminated early in prior financial years. With respect to the last remaining transaction
(Freudenau) that had an off-balance-sheet structure, the lessee purchase option was exercised in
accordance with Section 19 of the lease agreement (Early Buy-out Option) in 2019. All necessary
contractual termination agreements in connection with this were finally signed on 11 December 2020.
The transaction was terminated on 4 January 2021 and finally settled on 15 December 2021.
Some of the cross-border leasing transactions were terminated early in their entirety, while some
were only partially terminated, whereby the transactions with investors and the associated A-loans were
repaid while the existing B-loans were continued by VERBUND (see section 8.1 Financial liabilities).
Balance sheet cover remains in place for the continued portions. Expenses and income from the
measurement of these items correspond to one another in terms of both value and value date, and are
offset. The reference value of the interest rate swaps amounts to $276.7m (previous year: $269.6m).
The financial assets and liabilities that relate to the closed items on the balance sheet are not shown
as net amounts. In the event of insolvency, the interest rates swaps (€70.3m; previous year: €87.7m) can
be netted against the financial liabilities to banks recognised at fair value (€330.1m; previous year:
€321.3m). The net liability from both of these items therefore amounted to €259.8m as at
31 December 2021 (previous year: €233.6m).
For two transactions ended early in which the financial liabilities were continued, there remains the
risk that it will be necessary to exchange the investing financial institutions or provide additional
Foreign exchange
risk
Risk from cross-
border leasing
transactions
295ANNUAL FINANCIAL REPORT - GROUP
collateral in the event that the rating of the investing financial institutions or of VERBUND falls below a
certain threshold. The ratings of contractual parties as well as VERBUND’s rating exceeded the
contractually agreed thresholds on 31 December 2021. Thus there is currently no need for VERBUND to
switch individual contractual parties or investments. This risk is also reduced not least of all by the
existence of guarantors’ liabilities from regional authorities for specific contractual parties.
11.2 Risk management in the energy area
Within its core business, VERBUND is active in international energy markets and is thus exposed to
market, counterparty and operational risks that have to be seen alongside corresponding opportunities.
Dealing with market risks is managed by means of rule books and the limits established in them.
Counterparty risk is approached using separate guidelines both at the Group level as well as at the level
of the subsidiaries. There is a process manual for the management of operational risks.
The current utilisation of the various limits for market risk (value at risk, stress limit, stop-loss limits
and exposure limits) is monitored, managed and reported on a daily basis, as is the risk position of the
(derivative) financial instruments in the energy area.
At 31 December 2021, derivative financial instruments in the energy area (electricity futures and
electricity forwards as well as gas futures and gas forwards, CO
2
futures and CO
2
forwards) comprised
the following:
Sales and procurement (cash flow hedges) as at 31/12/2021 €m
Positive fair
values
Negative fair
values
Net
Futures 267.6 1,334.8 – 1,067.2
Forwards 229.1 973.7 – 744.5
Options 7.3 117.4 – 110.1
Swaps 0.0 0.0 0.0
Total before netting 504.1 2,425.8 – 1,921.8
of which current 450.9 2,243.2 – 1,792.3
of which non-current 53.2 182.7 – 129.5
of which in other comprehensive income 0.0 0.0 – 1.921.8
296
Wholesale as at 31/12/2021 €m
Positive fair
values
Negative fair
values
Net
Futures 1,489.9 595.6 894.3
Forwards 2,435.8 3,209.9 – 774.1
Swaps 7.4 0.0 7.4
Total before netting 3,933.1 3,805.5 127.6
of which current 3,464.1 3,174.3 289.8
of which non-current 469.0 631.3 – 162.3
Futures already realised 914.8 1,093.7 – 178.8
Total 0.0 0.0 – 51.3
Trading as at 31/12/2021 €m
Positive fair
values
Negative fair
values
Net
Futures 222.7 207.6 15.1
Forwards 4,019.8 4,037.1 – 17.3
Total before netting 4,242.5 4,244.7 – 2.2
of which current 3,824.0 3,824.6 – 0.6
of which non-current 418.5 420.1 – 1.6
Total as at 31/12/2021 €m
Positive fair
values
Negative fair
values
Net
Futures 1,980.2 2,138.0 – 157.8
Forwards 6,684.8 8,220.7 – 1,535.9
Options 7.3 117.4 – 110.1
Swaps 7.4 0.0 7.4
Total before netting 8,679.6 10,476.1 – 1,796.4
Including netting agreements – 6.421.8 – 6,421.8 0.0
Total after netting 2,257.8 4,054.2 – 1,796.4
EEX/ECX clearing variation margins of futures 0.0 – 181.8 181.8
Recognised under other receivables or other liabilities 2,257.8 3,872.5 – 1,614.6
297ANNUAL FINANCIAL REPORT - GROUP
At 31 December 2020, derivative financial instruments in the energy area (electricity futures as well as
electricity forwards and options, gas futures and gas forwards, CO
2
futures and CO
2
forwards)
comprised the following:
Sales and procurement (cash flow hedges) as at 31/12/2020 €m
Positive fair
values
Negative fair
values
Net
Futures 18.1 77.2 – 59.1
Forwards 8.9 46.9 – 38.0
Options 2.3 5.0 – 2.8
Total before netting 29.2 129.1 – 99.9
of which current 23.8 114.2 – 90.4
of which non-current 5.4 14.9 – 9.5
of which in other comprehensive income 0.0 0.0 – 99.9
Wholesale as at 31/12/2020 €m
Positive fair
values
Negative fair
values
Net
Futures 75.0 33.7 41.3
Forwards 129.9 177.3 – 47.4
Swaps 0.1 0.1 – 0.1
Total before netting 205.0 211.2 – 6.1
of which current 159.2 145.1 14.1
of which non-current 45.9 66.1 – 20.2
Futures already realised 31.6 22.7 9.0
Total 2.8
Trading as at 31/12/2020 €m
Positive fair
values
Negative fair
values
Net
Futures 38.1 39.4 – 1.3
Forwards 478.8 479.4 – 0.6
Total before netting 516.9 518.9 – 1.9
of which current 475.6 477.2 – 1.6
of which non-current 41.3 41.6 – 0.3
298
Total as at 31/12/2020 €m
Positive fair
values
Negative fair
values
Net
Futures
131.2 150.4 – 19.1
Forwards 617.7 703.6 – 86.0
Options 2.3 5.0 – 2.8
Swaps 0.1 0.1 – 0.1
Total before netting 751.2 859.1 – 107.9
Including netting agreements – 599.0 – 599.0 0.0
Total after netting 152.2 260.1 – 107.9
EEX/ECX clearing variation margins of futures 0,.0 – 18.8 18.8
Recognised under other receivables or other liabilities 152.2 241.3 – 89.1
Derivative financial instruments in the energy area with positive fair values are recognised under
trade receivables and other receivables; those with negative fair values are recognised under trade
payables and other liabilities. If a framework agreement with a netting clause has been entered into
with a counterparty, the positive and negative fair values of the transactions for this counterparty are
netted for accounting purposes because the aim is to settle on a net basis.
The effects of potential price fluctuations on the electricity market (–
10.0% to + 10.0%) were measured
by means of a sensitivity analysis:
Sensitivity: market price fluctuation of + 10% €m
2020 2021
Effect on operating result (wholesale and trading portfolio) 3.6 – 40.6
Effect on equity (revaluation reserve from cash flow hedges) – 60.9 – 294.3
Sensitivity: market price fluctuation of – 10% €m
2020 2021
Effect on operating result (wholesale and trading portfolio) – 3.6 40.6
Effect on equity (revaluation reserve from cash flow hedges) 60.9 294.3
The future sales and procurement transactions hedged by cash flow hedges will occur over the next
ten years (2022 to 2032) and be recognised in profit or loss accordingly. See section 5 Financial
instruments for further details regarding the electricity futures and forwards designated as cash flow
hedges.
299ANNUAL FINANCIAL REPORT - GROUP
12. Capital management
The objectives of VERBUND’s capital management include:
• safeguarding liquidity and ensuring suitable liquidity reserves;
• optimising the capital structure; and
• securing a solid, long-term credit rating.
As part of its capital management, the Executive Board regularly monitors the following key
performance indicators: net debt/EBITDA, free cash flow (after dividends) and the ROCE of the
unregulated business activities. The Group strives for a net debt/EBITDA ratio of < 3.0, a free cash flow
(after dividends) of > €0.0m and a ROCE of the unregulated business activities of > 9.0% in order to
support the rating. These targets are based on the existing asset and value chain structure.
Net debt/EBITDA
1
€m
2020 2021
Net debt 1,881.2 3,510.8
EBITDA 1,292.8 1,579.0
Net debt/EBITDA 1.5 2.2
Free cash flow after dividends
1
€m
2020 2021
Cash flow from operating activities 1,182.1 98.2
Cash flow from investing activities excluding cash inflows and
outflows from investments and/or disposals in investments – 600.1 – 1,108.3
Free cash flow before dividends 582.1 – 1,010.1
Dividends – 282.5 – 319.3
Free cash flow after dividends 299.5 – 1,329.5
Return on capital employed (ROCE) of non-regulated business segments
1
€m
2020 2021
NOPAT 665.9 870.0
Average capital employed 6,936.4 7,624.1
Return on capital employed (ROCE) of non-regulated business segments 9.6% 11.4%
1
The comparative figures were adjusted retrospectively in accordance with IAS 8.
300
13. Other
13.1 Other obligations and/or entitlements and risks
Contingent liabilities not recognised in VERBUND’s balance sheet are assessed quarterly with respect
to their probability of occurrence. The assessment is carried out by the managers responsible, taking
account of market-related inputs (to the extent possible) and expert opinions (in individual cases).
At 31 March 2021, 100% of the original volume of cross-border leasing transactions had been
terminated. The last remaining transaction at the beginning of the year had an off-balance-sheet
financing structure. This transaction was terminated on 4 January 2021 and finally settled on
15 December 2021. As a result, VERBUND no longer has any liabilities at the Group level.
Pending court proceedings relate mainly to the following matters:
• Flooding of the Drau River in 2012: Claims for damages under civil law amount to €109.3m (previous
year: €109.5m). VERBUND is contesting both the amounts and merits of these claims. No disclosures
have been provided in respect of any contingent liabilities or provisions that may arise in relation to
these claims for damages because it is likely that such note disclosures would seriously prejudice
VERBUND’s position in the proceedings.
• Arbitration proceedings GCA: In January 2020, GCA was informed of the initiation of arbitration
proceedings by a transportation customer under Article 4 of the International Chamber of Commerce
(ICC) Rules of Arbitration. The subject of the proceedings is contracts for the provision of capacities
for the transportation of natural gas. The amount in dispute is approximately €194.0m. No disclosures
have been provided in respect of any contingent liabilities or provisions that may arise in relation to
these claims for damages because it is likely that such note disclosures would seriously prejudice
GCA’s position in these proceedings.
• Amortisation of goodwill for the equity interest in VERBUND Innkraftwerke GmbH claimed for tax
purposes for the years 2014–
2023: The appeal against the notice of assessment remains pending. The
tax benefit for these years (reduction of tax payments in the amount of €7.9m per year) is recognised
in accordance with VERBUND’s accounting policies if it is reasonably likely.
Purchase commitments for property, plant and equipment and intangible assets
as well as other commitments €m
1 year or less › 1 to 5 years › 5 years
Total commitment 867.2 405.3 0.0
In addition, there are further customary purchase contracts for business activities that primarily
include electricity supply agreements. Provincial energy companies have acquired (proportionate)
electricity purchase rights by providing contributions to building costs for power plants. VERBUND is
thereby obligated to deliver a portion of the electricity generated in these power plants to the provincial
energy companies in exchange for reimbursement of contractually-stipulated recognised expenses
(excluding depreciation, amortisation and interest).
Contingent liabilities
Obligations from
cross-border leasing
Court proceedings
pending
Contracts and
purchase
commitments
301ANNUAL FINANCIAL REPORT - GROUP
13.2 Other disclosures
Average number of employees
2020 2021 Change
Salaried employees 2,715 3,018 303
Apprentices 155 166 11
Average number of employees
1
2,870 3,184 314
1
Part-time employees were taken into account proportionately based on their working hours.
The expenses for services provided by the Group auditor refer to VERBUND’s consolidated subsidiaries
that are audited by the Group auditor/the Group auditor’s network; the corresponding expenses for
subsidiaries that are not consolidated due to lack of materiality are not included here. VERBUND’s
Group auditor in both 2021 and 2020 was Deloitte Audit Wirtschaftsprüfungs GmbH.
Expenses for services provided by the Group auditor €k
Deloitte
1
Deloitte
1
2020 2021
Audit services relating to consolidated
and separate financial statements
327.3 391.2
Other assurance services 186.1 285.9
Tax consulting services 0.0 0.0
Other advisory services 69.0 44.0
Total expenses 582.4 721.1
1
Deloitte Audit Wirtschaftsprüfungs GmbH
Additional fees were incurred through the Deloitte network in the amount of €185.6k (previous year:
€164.5k) for audit services relating to the consolidated and separate financial statements.
The following expenses for services by the Group auditor (via the Group auditor’s network) were
incurred by VERBUND’s joint ventures: €27.2k (previous year: €26.8k) for audit services relating to the
consolidated and separate financial statements (of which to Deloitte Audit Wirtschaftsprüfungs GmbH:
€27.2k; previous year: €26.8k).
Average number of
employees
Expenses for
services provided by
the Group auditor
302
13.3 Transactions with related parties
Related parties of VERBUND include:
• all subsidiaries, associates and joint ventures;
• the members of VERBUND’s Executive Board and Supervisory Board as well as companies controlled
or significantly influenced by them or their close family members;
• the Republic of Austria due to its position as the majority shareholder; and
• companies controlled or significantly influenced by the Republic of Austria.
Transactions between related parties are carried out at arm’s length. Transactions with subsidiaries,
joint ventures or associates not included in the basis of consolidation due to a lack of materiality are not
presented owing to their immateriality.
Material transactions with joint ventures accounted for using the equity method had the following effect
on VERBUND’s income statement and balance sheet:
Transactions with joint ventures €m
2020 2021
Income statement
Electricity revenue 0.6 0.1
Other revenue 0.9 0.7
Other operating income 0.8 0.2
Expenses for electricity, grid, gas and certificate purchases – 0.4 – 0.5
Fuel expenses and other usage-/revenue-dependent expenses – 0.7 – 1.3
Other operating expenses – 0.3 – 1.5
Interest income 1.1 1.1
Other financial result 1.8 1.6
Transactions with joint ventures €m
31/12/2020 31/12/2021
Balance sheet
Investments and non-current other receivables 47.1 5.7
Trade receivables, other receivables and securities 7.3 41.8
Contributions to building costs 0.9 0.9
Trade payables and other liabilities 4.0 7.2
Investments at 31 December 2021 included a non-current loan to Energji Ashta Shpk in the amount
of €5.7m (previous year: €47.1m) as well as a current other receivable in the amount of €41.5m (previous
year: €3.5m). Both mainly served the financing of construction services relating to an Albanian
hydropower plant concession.
Transactions with
joint ventures
303ANNUAL FINANCIAL REPORT - GROUP
KELAG has acquired (proportionate) electricity purchase rights by providing contributions to building
costs for power plants on the Danube and Drau rivers and for the Malta and Reißeck power plant
groups. Based on these electricity supply agreements, VERBUND is obligated to deliver a portion of the
electricity generated in these power plants to KELAG in exchange for reimbursement of the
contractually-stipulated recognised expenses (excluding depreciation, amortisation and interest).
Material transactions with associates accounted for using the equity method had the following effect
on VERBUND’s income statement and balance sheet:
Transactions with associates €m
2020 2021
Income statement
Electricity revenue 60.6 59.5
Grid revenue 32.3 36.2
Other revenue 3.3 5.9
Other operating income 10.8 8.9
Expenses for electricity, grid, gas and certificate purchases – 25.3 – 24.5
Other operating expenses – 0.9 – 7.7
Interest income 0.2 0.2
Transactions with associates €m
31/12/2020 31/12/2021
Balance sheet
Trade receivables, other receivables and securities 28.9 24.9
Contributions to building costs 270.0 260.0
Trade payables and other liabilities 0.1 0.6
Details regarding the material transactions:
• Electricity revenue was realised with KELAG (€53.4m; previous year: €45.4m) and OeMAG
Abwicklungsstelle für Ökostrom AG (€6.1m; previous year: €15.2m).
• There was €23.6m in electricity purchases (previous year: €24.4m) primarily from KELAG.
• Grid revenue was only realised with KNG-Kärnten Netz GmbH.
• A total of €8.7m (previous year: €10.2m) of the contributions to building costs were provided by
KELAG in financial year 2021.
Transactions with
associates
304
Electricity deliveries from companies controlled or significantly influenced by the Republic of Austria
amounted to a total of €80.0m (previous year: €66.2m) in the 2021 reporting period. The primary buyers
of this electricity were ÖBB, OMV and Telekom Austria. Electricity purchased from companies
controlled or significantly influenced by the Republic of Austria amounted to a total of €11.5m in the
2021 reporting period (previous year: €4.9m). The electricity was supplied primarily by ÖBB. Gas
trading contracts with OMV and gas deliveries on the part of OMV resulted in a total expense of €69.1m
in other revenue and purchased gas, respectively (previous year: €9.6m).
VERBUND’s expense for monitoring by E-Control amounted to a total of €14.1m (previous year:
€11.7m) in the 2021 reporting period.
Detailed disclosures regarding the boards of VERBUND AG are presented in the Corporate Governance
Report. The following disclosures focus on the remuneration of members of the Executive Board and
the Supervisory Board.
Current remuneration of the Executive Board (incl. variable remuneration) in €
2020 2021
Fixed
remuneration
Variable
remuneration
Fixed
remuneration
Variable
remuneration
Dr. Michael Strugl 685,000 444,935 750,000 480,910
Dr. Peter F. Kollmann 620,000 403,233 620,000 435,813
Dr. Achim Kaspar 475,000 307,563 475,000 332,500
Remuneration of the active Executive Board members amounted to a total of €3,128,810 in the 2021
reporting period (previous year: €4,231,454), including €34,587 (previous year: €51,387) in
remuneration in kind.
Furthermore, €525,000 (previous year: €494,336) in in short-term variable remuneration, €412,500
(previous year: €0) in long-term variable remuneration (LTIP; two year assessment period) as well as
€318,069 (previous year: €0) in compensation in lieu of holiday was paid out in 2021 for a retired
member of the Executive Board. This relates to claims for active service on the Executive Board that
were not finally settled until 2021.
Because it is only possible to ascertain at the end of the year whether targets have been achieved,
short-term variable remuneration components are paid out in the following year. Therefore, the total
amount includes the short-term variable remuneration components granted to the active members of
the Executive Board in the 2021 reporting period for the 2020 reporting period.
The system of variable remuneration was revised beginning with the 2019 reporting period and a
generally three-year Long Term Incentive Programme (LTIP) was agreed in addition to the short-term
targets (one-year goals). For the one-year goals, the percentage rate for total achievement of the targets
in the 2020 financial year is a standard 70% of the relevant fixed remuneration. In the 2020 reporting
period, 60% of the agreement on targets is based on the achievement of the Group result and 40% on
non-financial goals (one-year): expansion of renewable generation (15%), reduction of specific GHG
emissions (5%), strategic human resources planning and the advancement of women as well as
employee satisfaction (10%) and availability of hydropower plants (10%). The total achievement of
targets for 2020 was determined to be 100%.
Transactions with
the Republic of
Austria and
companies under its
controlling influence
Disclosures
regarding the
governing bodies of
the Group
305ANNUAL FINANCIAL REPORT - GROUP
For the one-year goals, the percentage rate for total achievement of the targets beginning in financial
year 2021 is a standard 60% of the relevant fixed remuneration. In the 2021 reporting period, 70% of the
agreement on targets is based on the achievement of the Group result and 30% on non-financial goals
(one-year): expansion of renewable generation (20%) and conclusion of a culture audit (10%).
With respect to the long-term incentive plans (LTIP) for 2019–
2021 and 2020– 2022, a maximum of
55% of the respective fixed salaries (maximum target achievement 100%, variable component 55%) can
be paid out in the form of long-term remuneration based on medium-term performance criteria. The
concrete amount depends not only on the achievement of the objectives, but also on VERBUND’s share
price performance. The duration of the LTIP is three years. In the beginning, the maximum value is
depicted as the current price in phantom shares; the undiscounted amount is paid out in arrears,
depending on the achievement of the targets and the share price at the end of the three-year
assessment period (average daily price of the VERBUND share for the first quarter
following the end of
the plan).
The following performance criteria were defined for LTIP 2019 (assessment period ending 2021): total
shareholder return (25%), EBITDA from growth projects (25%), Free Cashflow (FCF) before dividends
(25%), productivity increase (25%); for LTIP 2020 (assessment period ending 2022), application of total
shareholder return (30%), FCF before dividends (35%) and net debt/EBITDA (35%). In contrast, the LTI
plans for the Executive Board member retiring at the end of 2020 were each concluded with a two-year
assessment period.
Beginning with the 2021 reporting period, a maximum of 78% of the respective fixed salaries
(maximum target achievement 120%, variable component 65%) can be paid out in the form of long-
term remuneration based on medium-term performance criteria. The concrete amount depends not
only on the achievement of the objectives, but also on VERBUND’s share price performance. The
duration of the LTIP is three years. In the beginning, the maximum value is depicted as the current price
in phantom shares; the undiscounted amount is paid out in arrears, depending on the achievement of
the targets and the share price at the end of the three-year assessment period (average price of the
VERBUND share with regard to the three-year assessment period for the respective LTI plan). The
following performance criteria were defined for the LTIP 2021 (assessment period ending 2023): total
shareholder return (30%), FCF before dividends (35%), overhead costs (35%).
A company pension plan has been set up for members of the Executive Board in the form of a defined
contribution pension fund agreement. In the 2021 reporting period, contributions to the pension fund
were paid for the Executive Board in the amount of €184,500 (previous year: €253,000).
In the 2021 reporting period, €391,533 (previous year: €389,323) in pensions was paid out to
beneficiaries. Expenses for pensions and similar obligations for former members of the Executive Board
and their surviving dependants included in the profit or loss for the period amounted to a total of
€28,897 (previous year: €33,108). In addition, remeasurement expenses in the amount of €3,914
(previous year: €107,516) were recognised in other comprehensive income.
Remuneration for members of the Supervisory Board (including the reimbursement of recharged
business/travel expenses) amounted to a total of €391,778 (previous year: €320,010). As in the previous
year, no loans or advances were paid out to members of the Group’s or subsidiaries’ governing bodies.
As in the previous year, VERBUND does not have a stock option programme for either the members of
the Executive Board or senior management staff.
306
13.4 Subsidiaries, joint ventures and associates of VERBUND
The following tables contain condensed financial information for each of the Group’s subsidiaries with
significant, non-controlling interests before intra-Group adjustments:
Subsidiaries with significant, non-controlling interests:
statement of comprehensive income
€m
2020 2021
VERBUND
Hydro
Power
GmbH
Gas Connect
Austria
GmbH
1
VERBUND
Innkraft-
werke
GmbH
VERBUND
Hydro
Power
GmbH
Gas Connect
Austria
GmbH
1
VERBUND
Innkraft-
werke
GmbH
Revenue 954.9 – 94.1 1,137.9 141.3 81.0
Profit after tax from
continuing operations
435.4 – 23.9 584.3 13.3 18.3
Profit for the period 435.4 – 23.9 584.3 13.3 18.3
Ownership interest of
non-controlling interests
15.94% – 29.73% 15.94% 49.00% 29.73%
Profit for the
period attributable to
non-controlling interests 69.4 – 7.1 93.1 6.5 5.5
Other comprehensive income 6.7 – 2.1 32.5 4.3 2.1
Total comprehensive income
for the period 442.2 – 25.9 616.8 17.5 20.4
Ownership interest of
non-controlling interests 15.94% – 29.73% 15.94% 49.00% 29.73%
Total profit or loss for the
period attributable to
non-controlling interests
70.5 – 7.7 98.3 8.6 6.1
1
Gas Connect Austria GmbH was recognised for the first time on 31 May 2021 in the course of a business acquisition.
Subsidiaries with
significant non-
controlling interests
307ANNUAL FINANCIAL REPORT - GROUP
Subsidiaries with significant, non-controlling interests: Balance sheet €m
31/12/2020 31/12/2021
VERBUND
Hydro
Power
GmbH
Gas Connect
Austria
GmbH
1
VERBUND
Innkraft-
werke
GmbH
VERBUND
Hydro
Power
GmbH
Gas Connect
Austria
GmbH
1
VERBUND
Innkraft-
werke
GmbH
Non-current assets 4,669.2 – 846.6 4,804.4 856.0 915.8
Current assets 63.2 – 20.4 251.9 44.1 2.8
Non-current liabilities – 2,096.1 – – 56.4 – 2,089.2 – 428.0 – 62.7
Current liabilities – 92.4 – – 20.7 – 156.6 – 80.2 – 55.6
Net assets 2,543.8 – 789.9 2,810.6 391.8 800.3
Ownership interest of
non-controlling interests 15.94% – 29.73% 15.94% 49.00% 29.73%
Net assets attributable to
non-controlling interests
405.5 – 234.9 448.0 192.0 238.0
1
Gas Connect Austria GmbH was recognised for the first time on 31 May 2021 in the course of a business acquisition.
Subsidiaries with significant, non-controlling interests: Cash flows €m
31/12/2020 31/12/2021
VERBUND
Hydro
Power
GmbH
Gas Connect
Austria
GmbH
1
VERBUND
Innkraft-
werke
GmbH
VERBUND
Hydro
Power
GmbH
Gas Connect
Austria
GmbH
1
VERBUND
Innkraft-
werke
GmbH
Cash flow from
operating activities 466.7 – 59.5 738.0 68.0 49.0
Cash flow from
investing activities – 146.7 – – 70.5 – 188.8 – 28.4 – 80.0
Cash flow from
financing activities
– 320.0 – 11.0 – 549.2 – 39.6 31.0
Change in cash and
cash equivalents 0.0 – 0.0 0.0 0.0 0.0
Dividends paid to
non-controlling interests
48.7 – 3.0 55.8 0.0 3.0
1
Gas Connect Austria GmbH was recognised for the first time on 31 May 2021 in the course of a business acquisition.
There is a shareholder agreement at VERBUND Innkraftwerke GmbH that specifies that the entire
profit for the year is to be approved as net profit for the period and distributed to the shareholders
except in the following cases:
• The shareholders agree unanimously to a different payout ratio.
• The distribution of the entire profit violates statutory provisions.
• The equity as a percentage of assets will fall below 25% at the respective reporting date if the entire
profit is distributed.
• There are insufficient cash and cash equivalents available to distribute the entire profit.
• A distribution of the entire profit would not leave enough cash and cash equivalents for approved
capital expenditure, maintenance and restructuring measures and/or actions that must be taken due
to force majeure, or reserves are to be recognised for the reversal of impairment losses.
308
The tables below show a summary of aggregated financial information for the joint ventures of
VERBUND accounted for using the equity method broken down according to material joint ventures
and joint ventures that are individually immaterial. As a general rule, the reference date for investee
balance sheet data is 30 September 2021 (see section 1.2 Financial reporting principles); the data are
based on disclosed financial statements and/or on data updated to the best of VERBUND’s knowledge.
Individually material joint ventures: Statement of comprehensive income €m
2020 2021
Ashta
Beteiligungs-
verwaltung
GmbH
SMATRICS
GmbH & Co KG
Ashta
Beteiligungs-
verwaltung
GmbH
SMATRICS
GmbH & Co KG
1
Revenue 0.2 6.3 0.1 8.9
Depreciation and amortisation – 0.1 – 1.1 – 0.1 0.2
Interest income 9.3 0.0 8.8 0.0
Interest expense – 5.9 0.0 – 5.5 0.0
Taxes on income – 0.5 0.0 – 0.7 0.0
Profit after tax from
continuing operations
1.2 5.6 0.3 – 3.5
Ownership interest of VERBUND 50.01% 40.00% 50.01% 40– 60%
Profit or loss for the period
attributable to VERBUND 0.6 2.2 0.2 – 2.0
Differences due to the application of
the equity method of accounting 0.0 – 2.4 0.0 0.0
Result from joint ventures accounted
for using the equity method
0.6 – 0.2 0.2 – 2.0
Profit after tax from
continuing operations 1.2 5.6 0.3 – 3.5
Other comprehensive income 0.0 0.0 0.0 0.0
Total comprehensive income
for the period
1.2 5.6 0.3 – 3.5
Ownership interest of VERBUND 50.01% 40.00% 50.01% 40– 60%
Total comprehensive income for the
period attributable to VERBUND
0.6 2.2 0.2 – 2.0
Differences due to the application of
the equity method of accounting 0.0 – 2.4 0.0 0.0
Total comprehensive income for the
period from joint ventures accounted
for using the equity method 0.6 – 0.2 0.2 – 2.0
Dividends received from
j
oint ventures 0.0 0.0 0.0 0.0
1
SMATRICS GmbH & Co KG has been consolidated since the increase in equity interest on 30 September 2021.
At Ashta Beteiligungsverwaltung GmbH, resolutions on the distribution of dividends are to be
unanimously approved with the joint venture partners.
Joint ventures
309ANNUAL FINANCIAL REPORT - GROUP
Individually immaterial joint ventures: Balance sheet €m
31/12/2020 31/12/2021
Ashta
Beteiligungs-
verwaltung
GmbH
SMATRICS
GmbH & Co KG
Ashta
Beteiligungs-
verwaltung
GmbH
SMATRICS
GmbH & Co KG
1
Non-current assets 116.6 12.9 107.2 –
Current assets 7.1 5.1 10.4 –
Non-current liabilities – 87.9 – 0.1 – 4.0 –
Current liabilities – 7.9 – 6.7 – 85.2 –
Net assets 27.9 11.2 28.4 –
Ownership interest of VERBUND 50.01% 40.00% 50.01% –
Net assets attributable to VERBUND 14.0 4.5 14.2 –
Differences due to the application of
the equity method of accounting
– 12.0 5.2 4.8 –
Carrying amount of joint ventures
accounted for using the
equity method 2.0 9.7 19.0 –
1
SMATRICS GmbH & Co KG has been consolidated since the increase in equity interest on 30 September 2021.
Individually material joint ventures: Details regarding net assets €m
31/12/2020 31/12/2021
Ashta
Beteiligungs-
verwaltung
GmbH
SMATRICS
GmbH & Co KG
Ashta
Beteiligungs-
verwaltung
GmbH
SMATRICS
GmbH & Co KG
1
Cash and cash equivalents 0.5 1.6 0.4 –
Non-current financial liabilities 96.0 0.0 – 11.5 –
Current financial liabilities 7.6 0.0 – 85.0 –
1
SMATRICS GmbH & Co KG has been consolidated since the increase in equity interest on 30 September 2021.
Until further notice, there is a cash management agreement in place between VERBUND and Energji
Ashta Shpk (wholly owned subsidiary of Ashta Beteiligungsverwaltung GmbH) with a limit of €9.0m
(previous year: €9.0m). As at 31 December 2021, VERBUND shows a liability to Energji Ashta Shpk in
the amount of €5.2m (previous year: liability of €2.7m).
The equity interest in Ennskraftwerke Aktiengesellschaft (with VERBUND and Energie AG
Oberösterreich each holding 50% of the interest) is to be classified as a joint operation in accordance
with the provisions of IFRS 11. As a result, Ennskraftwerke Aktiengesellschaft is being included in the
consolidated financial statements with the share of assets and liabilities and/or revenue and expenses
attributable to VERBUND. The size of the share is determined based on the relationship of electricity
deliveries to both parties. From a cost-benefit perspective, the assets and liabilities and/or revenue and
expenses of Ennskraftwerke Aktiengesellschaft based on the average ratio of total electricity deliveries
(VERBUND 62% and Energie AG Oberösterreich 38%) are included in VERBUND’s consolidated
financial statements.
Joint operation:
Ennskraftwerke
Aktiengesellschaft
310
The tables below show a summary of aggregated financial information for the associates of VERBUND
accounted for using the equity method broken down according to material associates and individually
immaterial associates. As a general rule, the reference date for investee balance sheet data is
30 September 2021 (see section 1.2 Financial reporting principles); the data are based on disclosed
financial statements and/or on data updated to the best of VERBUND’s knowledge.
Individually material associates: Statement of comprehensive income €m
2020 2021
Trans Austria
Gasleitung
GmbH
1
KELAG-Kärntner
Elektrizitäts-
Aktien-
gesellschaft
2
Trans Austria
Gasleitung
GmbH
1
KELAG-Kärntner
Elektrizitäts-
Aktien-
gesellschaft
2
Revenue – 1,144.1 98.6 1,043.5
Profit after tax from continuing
operations
– 121.1 12.9 154.7
Ownership interest of VERBUND – 35.17% 10.78% 35.17%
Profit or loss for the period
attributable to VERBUND
– 42.6 1.4 54.4
Differences due to the application of
the equity method of accounting
– – 14.5 – 1.3 – 18.4
Share of profit or loss from
associates accounted for using the
equity method – 28.1 0.1 36.0
Profit after tax from
continuing operations
– 121.1 12.9 154.7
Other comprehensive income – – 27.6 0.2 – 16.2
Total comprehensive income
for the period
– 93.5 13.0 138.5
Ownership interest of VERBUND – 35.17% 10.78% 35.17%
Total comprehensive income for the
period attributable to VERBUND
– 32.9 1.4 48.7
Differences due to the application of
the equity method of accounting – – 14.5 0.0 – 18.9
Total comprehensive income for the
period from associates accounted for
using the equity method
– 18.4 1.4 29.8
Dividends received from associates – 8.8 0.0 5.2
1
Trans Austria Gasleitung GmbH was recognised for the first time in the course of a business acquisition on 31 May 2021. //
2
The comparative figures were adjusted
retrospectively in accordance with IAS 8.
KELAG’s resolutions on the distribution of dividends must be approved with a simple majority.
Kärntner Energieholding Beteiligungs GmbH holds 51% of the shares in KELAG and therefore
determines their distribution policy.
Associates
311ANNUAL FINANCIAL REPORT - GROUP
Individually material associates: Balance sheet €m
31/12/2020 31/12/2021
Trans Austria
Gasleitung
GmbH
1
KELAG-Kärntner
Elektrizitäts-
Aktien-
gesellschaft
2
Trans Austria
Gasleitung
GmbH
1
KELAG-Kärntner
Elektrizitäts-
Aktien-
gesellschaft
2
Non-current assets – 1,802.6 612.3 1,947.7
Current assets – 396.3 68.6 940.3
Non-current liabilities – – 954.3 – 307.6 – 1,108.4
Current liabilities – – 293.8 – 119.2 – 739.6
Equity attributable to
non-controlling interests – – 7.7 0.0 – 8.4
Net assets – 943.0 254.2 1,031.6
Ownership interest of VERBUND – 35.17% 10.78% 35.17%
Net assets attributable to VERBUND – 331.6 1.4 362.8
Differences due to the application of
the equity method of accounting – – 66.3 75.1 – 72.8
Carrying amount of
associates accounted for
using the equity method
– 265.4 76.6 289.9
1
Trans Austria Gasleitung GmbH was recognised for the first time on 31 May 2021 in the course of a business acquisition. //
2
The comparative figures were adjusted
retrospectively in accordance with IAS 8.
The following list of Group companies prepared in accordance with Section 245a(1) in conjunction with
Section 265(2) Austrian Commercial Code (UGB) comprises VERBUND’s subsidiaries, joint ventures
and associates. In addition, this list also includes unconsolidated subsidiaries and other joint ventures
and equity interests of VERBUND not accounted for using the equity method with an interest of 20%.
Segment: Hydro
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company’
s share of
equity
VERBUND AG
(VH) –
Hydro activities Vienna CS – – Vienna CS – –
Innwerk AG
(VHP-IW)
Stamm-
ham CS VH 100.00%
Stamm-
ham CS VH 100.00%
VERBUND Hydro
Power GmbH
(VHP) Vienna CS VH 80.54% Vienna CS VH 80.54%
VERBUND
Innkraftwerke
GmbH Töging CS VH 70.27% Töging CS VH 70.27%
List of Group
companies
312
Segment: Hydro
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company’
s share of
equity
Donaukraftwerk
Jochenstein
Aktiengesellschaft Passau CS
VH
VHP-IW
50.00%
50.00% Passau CS
VH
VHP-IW
50.00%
50.00%
Grenzkraftwerke
GmbH Simbach CS
VH
VHP-IW
50.00%
50.00% Simbach CS
VH
VHP-IW
50.00%
50.00%
Österreichisch-
Bayrische
Kraftwerke
Aktiengesellschaft Simbach CS
VH
VHP-IW
50.00%
50.00% Simbach CS
VH
VHP-IW
50.00%
50.00%
Ennskraftwerke
Aktiengesellschaft Steyr JO VH 50.00% Steyr JO VH 50.00%
Kraftwerk Nußdorf
Errichtungs- und
Betriebs GmbH &
Co KG Vienna EM
1
VHP 33.33% Vienna EM
1
VHP 33.33%
Kraftwerk Nußdorf
Errichtungs- und
Betriebs GmbH Vienna EM
1
VHP 33.33% Vienna EM
1
VHP- 33.33%
Ashta
Beteiligungsverwal
tung GmbH (VHP-
AL-HII) Vienna EM
1
VHP 50.01% Vienna EM
1
VHP 50.01%
Energji Ashta Shpk Bushat EM
1
VHP-AL-
HII 100.00% Bushat EM
1
VHP-AL-
HII 100.00%
Lestin & Co Tauch-,
Bergungs- und
Sprengunternehm
en Gesellschaft
m.b.H (LESTIN) Vienna UC VHP 100.00% Vienna UC VHP 100.00%
Lestin & Co Tauch-
und Bergungs-
unternehmen
GmbH Passau UC LESTIN 100.00% Passau UC LESTIN 100.00%
Murkraftwerk Graz
Errichtungs- und
Betriebsg.m.b.H Graz UC VHP 25.10% Graz UC VHP 25.10%
VERBUND
Tourismus GmbH Vienna UC
VHP
LESTIN
99.90%
0.10% Vienna UC
VHP
LESTIN
99.90%
0.10%
313ANNUAL FINANCIAL REPORT - GROUP
Segment: New renewables
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company’
s share of
equity
VERBUND Wind
Power Austria
GmbH (VRP-AT)
Vienna CS VHP 100.00% Vienna CS VHP 100.00%
VERBUND Green
Power Deutschland
GmbH (VGP-DE)
Wörr-
stadt CS VH 100.00%
Wörr-
stadt CS VH 100.00%
VERBUND Green
Power GmbH
(VGP) Vienna CS VH 100.00% Vienna CS VH 100.00%
VERBUND Wind
Power Romania
SRL
Bucha-
rest
CS VH 100.00%
Bucha-
rest
CS VGP 100.00%
VERBUND Green
Power Hunsrück
GmbH & Co. KG
Wörr-
stadt CS VH 100.00%
Wörr-
stadt CS VH 100.00%
Infrastruktur
Oberheimbach I
GmbH & Co. KG
Wörr-
stadt CS VH 85.00%
Wörr-
stadt CS VH 85.00%
Infrastrukturgesell-
schaft Bischheim
GmbH & Co. KG
Wörr-
stadt
CS VH 65.29%
Wörr-
stadt
CS VH 65.29%
VERBUND Green
Power Deutschland
Photovoltaik GmbH
(VGP-DE-PV)
Unter-
föhring UC VGP 100.00%
Schöne-
feld CS VGP 100.00%
Watt Development
SPV 5 S.L.U.
(VGP-ES-IL1) – – – –
Pinos
Puente CS VH 100.00%
Watt Development
SPV 6 S.L.U.
(VGP-ES-IL2)
– – – –
Pinos
Puente
CS VH 100.00%
Watt Development
SPV 7 S.L.U.
(VGP-ES-IL3) – – – – Valencia CS VH 100.00%
Infraestructuras
Comunes de
Illora S.L. – – – –
Barce-
lona UC
VGP-IL1
VGP-IL2
VGP-IL3
20.00%
20.00%
20.00%
SOLAVOLTA
Energie- und
Umwelttechnik
GmbH
Sankt
Marga-
rethen im
Bgld.
EM
1
VGP 50.00%
Sankt
Marga-
rethen im
Bgld.
EM
1
VGP 50.00%
314
Segment: Sales
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
VERBUND AG (VH)
– Sales activities Vienna CS – –
Vienna CS – –
VERBUND
Energy4Business
Germany GmbH Munich CS VEB 100.00%
Munich CS VEB 100.00%
VERBUND
Energy4Business
GmbH (VEB)
Vienna CS VH 100.00%
Vienna CS VH 100.00%
VERBUND Trading
Romania S.R.L.
Bucha-
rest CS
VEB
VH
99.00%
1.00%
Bucha-
rest UC
VEB
VH
99.00%
1.00%
VERBUND
Energy4Customers
GmbH (VEC) Vienna CS VH 100.00%
Vienna CS VH 100.00%
VERBUND
Energy4Flex GmbH
(VEF)
Vienna CS VEB 100.00%
Vienna CS VEB 100.00%
VERBUND
Energy4Future
GmbH (VEE) Vienna CS VEB 100.00%
Vienna CS VEB 100.00%
SMATRICS GmbH
& Co KG Vienna EM
1
VEB 40.00%
Vienna CS VEB 100.00%
SMATRICS EnBW
GmbH
–
–
–
–
Vienna
EQ
SMA-
TRICS
49.00%
VERBUND Trading
Czech Republic
s.r.o., v likvidaci
Prague UC VEB 100.00%
– – – –
VERBUND Trading
Serbia d.o.o. –
u likvidaciji
Belgrade UC VEB 100.00%
Belgrade UC VEB 100.00%
E-Mobility Provider
Austria GmbH Vienna UC VEB 40.00% Vienna UC VEB 100.00%
smart Energy
Services GmbH Vienna UC VEC 50.00% Vienna UC VEC 50.00%
315ANNUAL FINANCIAL REPORT - GROUP
Segment: Grid
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Austrian Power
Grid AG (APG) Vienna CS VH 100.00% Vienna CS VH 100.00%
Gas Connect
Austria GmbH
(GCA)
– – – – Vienna CS VH 51.00%
Austrian Gas Grid
Management AG
(AGGM) – – – – Vienna CS GCA 51.00%
Trans Austria
Gasleitung GmbH
(TAG)
– – – – Vienna EM GCA 15.53%
AGCS Gas Clearing
and Settlement AG – – – – Vienna UC GCA 23.13%
OeMAG
Abwicklungsstelle
für Ökostrom AG Vienna EM APG 24.40% Vienna EM APG 24.40%
VUM Verfahren
Umwelt Manage-
ment GmbH
Klagen-
furt
UC APG 100.00%
Klagen-
furt
UC APG 100.00%
All other segments: Thermal generation
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company’
s share of
equity
VERBUND
Thermal Power
GmbH & Co KG
Neudorf
ob
Wildon CS
VH
VTP
GmbH
100.00%
0.00%
2
Neudorf
ob
Wildon CS
VH
VTP
GmbH
100.00%
0.00%
2
VERBUND
Thermal Power
GmbH
(VTP GmbH)
Neudorf
ob
Wildon
CS VH 100.00%
Neudorf
ob
Wildon
CS VH 100.00%
316
All other segments: Services
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
VERBUND Services
GmbH Vienna CS VH 100.00% Vienna CS VH 100.00%
All other segments: Equity interests
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
VERBUND AG (VH)
– Equity interests Vienna CS – – Vienna CS – –
KELAG-Kärntner
Elektrizitäts-
Aktiengesellschaft
Klagen-
furt
EM VH 35.17%
Klagen-
furt
EM VH 35.17%
Other Group companies
2020 2021
Company
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
Head-
quarters
Consoli-
dation
method
Parent
company
Parent
company
’s share
of equity
VERBUND AG (VH)
– All other activities Vienna CS – – Vienna CS – –
VERBUND
Finanzierungs-
service GmbH
Vienna CS VH 100.00% Vienna CS VH 100.00%
CS = Consolidated subsidiary / EM = Investee accounted for using the equity method / JO = Joint operation, proportionate inclusion of assets and liabilities as well as income
and expenses / UC = Unconsolidated entities due to immateriality or lack of significant influence
1
Joint ventures //
2
VERBUND Thermal Power GmbH holds an interest of < 0.01% as a limited partner of VERBUND Thermal Power GmbH & Co KG.
317ANNUAL FINANCIAL REPORT - GROUP
13.5 Events after the reporting date
The National Council approved the Eco-Social Tax Reform in its third reading on 20 January 2022. The
corporate income tax rate will be decreased from the current 25% to 24% in 2023 and to 23% beginning
in 2024. This is expected to result in around €60.0m in income from the necessary remeasurement of
deferred taxes, which is not reflected in these financial statements.
Vienna, 17 February 2022
Executive Board
Michael Strugl
Chairman of the Executive Board
of VERBUND AG
Peter F. Kollmann
CFO, member of the Executive Board
of VERBUND AG
Achim Kaspar
Member of the Executive Board
of VERBUND AG
318
14. Responsibility statement of the legal representatives
We confirm that, to the best of our knowledge, the consolidated financial statements of VERBUND,
prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
European Union, give a true and fair view of the assets and liabilities, financial position and profit or
loss of VERBUND.
We also confirm that, to the best of our knowledge, the Group management report of VERBUND
presents the development of the business, performance of the business and position of the Group so as
to give a true and fair view of the assets and liabilities, financial position and profit or loss of VERBUND,
and that the Group management report describes the significant risks and uncertainties to which
VERBUND is exposed.
Vienna, 17 February 2022
Executive Board
Michael Strugl
Chairman of the Executive Board
of VERBUND AG
Peter F. Kollmann
CFO, member of the Executive Board
of VERBUND AG
Achim Kaspar
Member of the Executive Board
of VERBUND AG
319ANNUAL FINANCIAL REPORT - GROUP
Report on the Audit of Consolidated Financial Statements
We have audited the consolidated financial statements of VERBUND AG, Vienna, and its subsidiaries
(the Group), which comprise the consolidated balance sheet as at 31 December 2021 as well as the
consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
financial year then ended and the notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements comply with legal requirements
and give a true and fair view of the consolidated financial position as at 31 December 2021, and of the
consolidated financial performance and the consolidated cash flows of the Group for the year then
ended in accordance with International Financial Reporting Standards as adopted by the EU, and the
additional requirements under Section 245a of the Austrian Commercial Code (Unternehmens-
gesetzbuch, UGB).
We conducted our audit in accordance with Regulation (EU) No. 537/2014 (hereinafter referred to as
EU-VO) and Austrian Generally Accepted Auditing Standards. Those standards require the application
of the International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group in accordance with laws and
regulations applicable in Austria, and we have fulfilled our other professional responsibilities in
accordance with these requirements. We believe that the audit evidence we obtained by the date of the
auditor's report is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the financial year under review. These matters
were addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
The following matters were most important for our audit:
• change in presentation in the income statement for energy derivatives;
• acquisition of Gas Connect Austria GmbH – purchase price allocation and subsequent measurement;
and
• reversals of impairment losses on non-current assets.
Change in presentation of energy derivatives in the income statement
Description and issue
Valuation effects from energy derivatives were previously shown either in revenue or in expenses for
electricity, grid, gas and certificate purchases depending on their economic assignment. On the one
hand, the high volatilities on the energy markets in 2021 were responsible for significant distortions in
the aforementioned items, while on the other hand this presentation resulted in significantly limited
comparability with the IFRS financial statements of other major energy groups.
The Company therefore decided to change the accounting method with respect to the presentation of
energy derivatives in the income statement in the consolidated financial statements for the period
Independent Auditor’s Report
(Translation)
Opinion
Basis for opinion
Key audit matters
320
ended 31 December 2021. IFRS permits such a change if it results in reliable and more relevant
information regarding the Group’s financial performance.
The measurement effects from energy derivatives are now stated under the separate line item
Measurement and realisation of energy derivatives in the net amount of €269.6m, whereby revenue
increased by €3,879.8m and expenses for electricity, grid, gas and certificate purchases by €4,149.4m
compared with the previous method of presentation. The prior-year amounts were adjusted
accordingly.
Please refer to the disclosures in the income statement as well as to the detailed notes in the section
entitled Change in accounting policies – valuation effects of energy derivatives in the consolidated
financial statements.
We have determined this to be a key audit matter due to the significance of the adjustments, the
associated influence on the presentation of the Group’s financial performance and the effects on
important key figures associated with the adjusted items in the income statement.
Audit approach
We have evaluated the conditions set out in IFRS for the change in presentation, in particular the
following areas:
• the significance for the presentation of the financial performance in the context of the income
statement;
• the reliability of the information presented in connection with the amended statement;
• the increase in the relevance of the presented information;
• the adjustment of prior-year amounts; and
• the related disclosures in the notes to the consolidated financial statements.
Acquisition of Gas Connect Austria GmbH – purchase price allocation and
subsequent measurement
Description and issue
VERBUND AG acquired 51% of the interest in Gas Connect Austria GmbH for EUR 238.7million on
31 May 2021. Gas Connect Austria operates a long-distance natural gas pipeline and gas distribution
network within Austria and holds long-term equity investments in other natural gas infrastructure and
system companies.
A purchase price allocation was carried out on the acquisition date, whereby goodwill was recognised
in the amount of EUR 48.1million. This goodwill and the non-current assets recognised in connection
with the purchase price allocation were to be subsequently tested for any impairment. Further details
are presented in the notes to the consolidated financial statements in the section entitled Business
acquisitions – acquisition of 51% stake in Gas Connect Austria GmbH.
The valuation models used to carry out the purchase price allocation as well as those used to assess
any impairment losses in connection with subsequent measurement are based on numerous input
factors and assumptions. This is a particularly important key audit matter as a result of the complexity
of the valuation models and the dependency of the results on the estimation of market developments by
the legal representatives.
321ANNUAL FINANCIAL REPORT - GROUP
Audit approach
We have evaluated the purchase price allocation and the subsequent measurement, in particular in the
following areas:
• methodical appraisal of the calculations performed in connection with the purchase price allocation
and the subsequent measurement;
• accuracy of the data transfers and the mathematical correctness of the valuations;
• corroboration of the operational budget, including the underlying assumptions and relevant market
data from the Group’s external as well as internal sources that flowed into the valuations; and
• assessment of the parameters used in determining the discount rate.
Reversals of impairment losses on non-current assets
Description and issue
The Group presents €10,672.0m in property, plant and equipment as at 31 December 2021 that
includes, among other things, hydraulic, thermal and wind power plants. Due to the sharply increased
prices for electricity in 2021, there are indications that impairment losses recognised in the past no
longer apply or have been reduced.
Based on conditions in the financial and energy industry environment, the Group estimated on the
reporting date whether there were any indications for a reversal of impairment losses and consequently
estimated the recoverable amount of individual asset groups and recognised reversals of impairment in
the total amount of €115.0m in 2021. Details regarding this are presented in the consolidated financial
statements in Sections 3.2.10 Impairment losses and reversals of impairment losses and 4.4.2
Impairment testing of power plants.
Numerous inputs flow into the valuation model based on net present value methods applied in the
test for impairment. These include in particular the future development of electricity and primary
energy prices, assumptions regarding developments in the regulatory environment and the effects of
the expansion of renewable energy. This is a particularly important key audit matter as a result of the
complexity of the valuation models and the dependency of the results on the estimation of market
developments by the legal representatives.
Audit approach
We have evaluated the valuations carried out and reversals of impairment losses identified in particular
in the following areas:
• the Company’s assessment for the identification of potential reversals of impairment losses
(“triggering events”);
• corroboration of the cash flows used in connection with the valuation models with company-specific
information, contractual framework as well as the Group’s relevant market data from external as well
as internal sources;
• the mathematical accuracy of the valuation models; and
• assessment of the parameters used in determining the discount rate.
322
Management is responsible for the other information. The other information includes all information in
the integrated annual report as well as supplementary information regarding the integrated annual
report (Disclosures on Management Approach – hereinafter referred to in short as “DMA”), with the
exception of the consolidated financial statements, the Group management report, the independent
auditor’s report and the report on the independent audit of the report on non-financial information. We
received the integrated annual report (not including the report of the Supervisory Board) and the
associated supplement prior to the date of our independent auditor’s report; the report of the
Supervisory Board will be provided to us after this date.
Our opinion regarding the consolidated financial statements does not extend to the other
information, for which we do not provide any assurance. Please refer to the Report on the audit of the
Group management report regarding the information in the Group management report.
In connection with our audit of the consolidated financial statements, it is our responsibility to read
the above-mentioned other information and thereby to evaluate whether it exhibits any significant
discrepancies with respect to the consolidated financial statements or with respect to what we have
learned during the audit or whether the presentation otherwise appears to be materially misstated.
If we arrive at the conclusion that this other information is materially misstated on the basis of the
work that we carried out for the other information received prior to the date of this auditor’s report, we
must report it. We have nothing to report in this regard.
The Company’s management is responsible for the preparation of the consolidated financial
statements that give a fair and true view of the assets, liabilities, financial position and profit or loss of
the Group in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
EU and the additional requirements under Section 245a Austrian Commercial Code (UGB).
Furthermore, the management is responsible for the internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the EU-VO and Austrian Generally Accepted
Auditing Standards, which require the application of the ISAs, will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
Other information
Responsibilities of
management and the
Audit Committee for
the consolidated
financial statements
Auditor’s
responsibilities for
the audit of the
consolidated
financial statements
323ANNUAL FINANCIAL REPORT - GROUP
As part of an audit in accordance with the EU-VO and Austrian Generally Accepted Auditing
Standards, which require the application of the ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit.
In addition:
• We identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• We obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• We evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• We conclude on the appropriateness of the management’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditors’ report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
• We evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that give a true and fair view.
• We obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
324
We communicate with the Audit Committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in the internal
control system that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Audit of the Group Management Report
Pursuant to statutory provisions, the Group management report is to be audited as to whether it is
consistent with the consolidated financial statements and whether it has been prepared in accordance
with the applicable legal requirements.
Management is responsible for the preparation of the Group management report in accordance with
the Austrian Commercial Code.
We conducted our audit in accordance with laws and regulations applicable with respect to the
Group management report.
In our opinion, the accompanying Group management report is prepared in accordance with the
applicable legal requirements, includes appropriate disclosures according to Section 243a Austrian
Commercial Code (UGB) and is consistent with the consolidated financial statements.
In light of the knowledge and understanding of the Group and its environment obtained in the course of
our audit of the consolidated financial statements, we have not identified material misstatements in the
Group management report.
Opinion
Statement
325ANNUAL FINANCIAL REPORT - GROUP
Additional Information Required under Article 10 of the
EU Audit Regulation
We were elected by the Annual General Meeting held on 20 April 2021 as the auditor for the financial
year ended 31 December 2021 and engaged by the Supervisory Board on 25 May 2021 to audit the
annual financial statements. We have been the Group’s auditor continuously since the financial year
ending on 31 December 2007.
We declare that the audit opinion included in the Report on the Audit of the Consolidated Financial
Statements is in line with the additional report to the Audit Committee and complies with Article 11 of
the EU Audit Regulation.
We declare that we have not provided any non-audit-related services in accordance with Article 5(1)
of the EU Audit Regulation and that we maintained our independence from the Group while
conducting our audit.
Engagement Partner
The engagement partner responsible for the audit is Mag. Walter Müller.
Vienna, 18 February 2022
Deloitte Audit Wirtschaftsprüfungs GmbH
Mag. Walter Müller
Austrian Certified Public Accountant
The consolidated financial statements may only be published or duplicated together with our auditor’s report in the version audited by us. This auditor’s report only relates to the
complete consolidated financial statements in German, including the Group management report. Section 281(2) of the Austrian Commercial Code (UGB) applies to versions
differing from the version audited by us.
VERBUND power plants,
APG grid facilities and
GCA pipeline facilities
* Plant certified to ISO 14001
** Plant certified to EMAS
and ISO 14001
Liechtenstein
Switzerland
Italy
Slovenia
Croatia
Hungary
Slovakia
Czech Republic
Germany
V
ERBUND power plants
Liechtenstein
Italy
Switzerland
Germany
Slovenia
Croatia
Hungary
Slovakia
Czech Republic
380 kV line
Project 380 kV line
220 kV line
Project 220 kV line
110 kV line
Not owned by
APG
Transmission system operator
Substation
Project substation
APG
hub
Phase-shifting transformer
(APG)
Rüthi
Prati
Merchant Line
Tarvisio
Glorenza
Vöhringen
Leupolz
swissgrid
TransnetBW
ceps
MAVIR
ELES
A
PG grid facilities
Liechtenstein
Italy
Switzerland
Germany
Slovenia
Croatia
Hungary
Slovakia
Czech Republic
Compressor station
Take-Out station
Competence Center
Entry/Exit Point
WAG, HAG, SOL, Penta West
Primary distribution system PVS
TAG
Arnreit
Gr. Göttfritz
Weitendorf
Rainbach
Kirchberg
Auersthal
Süd Ost gas pipeline
(SOL)
Penta West
Kittsee-Petrzalka
gas pipeline
West Austria
gas pipeline
(WAG)
Hungaria Austria
gas pipeline (HAG)
Bad
Leonfelden
Neustift
Oberkappel
Baumgarten
Trans Austria
gas pipeline (TAG)
GCA pipeline facilities
Glossary
ANNUAL FINANCIAL REPORT - GROUP 333
ACER
Agency for the Cooperation of
Energy Regulators
Adjusted EBITDA
The adjustments include effects from
restructuring expenses arising from
Group-wide cost-cutting programmes as
well as other expenses and income of a
non-recurring or rare nature in EBITDA.
EBITDA from any discontinued
operations is also reflected in adjusted
EBITDA. EBITDA is the most important
internal earnings performance indicator
at VERBUND and an indicator of the
sustainable profitability of its business.
Adjusted Group result
The adjustments include – in addition to
the effects adjusted from adjusted
EBITDA – effects from impairment tests
and effects from business acquisitions,
as well as other expenses and income of
a non-recurring or rare nature (after
taxes and non-controlling interests).
Beyond that, special tax effects are not
taken into account in the adjusted Group
result.
Average number of employees
Calculated according to actual effective
dates of hires and resignations and
number of hours worked.
Balancing services market
Control power is necessary for balancing
out sudden large changes in load – too
much or too little electricity in the grid.
This means that a certain percentage of
power plant capacity is held at the ready
as reserves for rapid stabilisation of the
grid. The control area manager procures
the necessary capacity through market
mechanisms and also compensates the
providers for the quantities of electricity
actually used.
Base (base load)
Base refers to the load profile for
electricity deliveries supplied at a
constant rate throughout 24 hours of
each day of the supply period.
Capital employed
Total assets less those assets that do not
(yet) contribute to performance and
commercialisation processes (mainly
advance payments, plants under
construction (excluding those in the Grid
segment), cash and cash equivalents,
derivative financial instruments in the
energy area, investments and derivative
financial instruments in the energy area
under closed items on the balance
sheet), and less contributions to building
costs as well as other non-interest-
bearing debt. From 2019 onwards, this
ratio is only calculated for VERBUND’s
unregulated business activities.
Cash flow
Net balance of the inflow and outflow of
cash and cash equivalents; made up of
cash flow from operating, investing and
financing activities.
Clean spark spread
Generation margin for electricity from
gas power plants representing the
difference between the electricity price
and the fuel costs (gas) for generating
electricity taking into account the cost of
emission allowances.
Climate-neutral natural gas
CO
2
emissions result from the use of
natural gas by our customers. To achieve
climate neutrality, these emissions must
be saved elsewhere. VERBUND
therefore promotes sustainable and
clean energy generation, such as with
the Ashta hydropower plant in Albania,
thus compensating for the CO
2
emissions for VERBUND natural gas.
So, precisely that volume of CO
2
released through the use of VERBUND
natural gas is balanced out by the
sustained promotion of clean energy
generation.
Closed items on
the balance sheet
Closed items on the balance sheet
include (rolled over) financial liabilities
and related investments from cross-
border leasing transactions that have
been terminated early. Previously,
financial liabilities relating to cross-
border leasing transactions and to the
Republic of Austria, as well as
associated investments, were treated in
the same way.
CO
2
equivalent (CO
2
e)
To facilitate comparisons of the impact
of different greenhouse gases (e.g.
methane, nitrous oxide) on climate
change, these are converted to CO
2
(carbon dioxide) equivalents (CO
2
e)
using the Global Warming Potential
(GWP) factor. Carbon dioxide is the
reference unit for global warming
potential and has a value of 1 CO
2
e.
Methane (CH
4
) has a CO
2
equivalent
of 28; it contributes 28 times more to
global warming than carbon dioxide
over a period of 100 years.
Congestion management
The term “congestion management”
comprises all steps that a transmission
system operator can take to prevent or
eliminate overload caused by congestion
in its grid. These range from grid
measures such as regulating phase-
shifting transformers to market
measures such as redispatch.
Glossary
334
Corporate carbon footprint
(CCF)
Transparent presentation of an
organisation’s direct and indirect
greenhouse gas emissions generated as
a result of its business activities.
Corporate responsibility (CR)
This concept targets sustainable
performance at the Group level and
incorporates economic, environmental
and social aspects into the core
business. Attention is also given to the
impacts arising from business activities
and stakeholder requirements within all
business processes.
Cross-border leasing
Leasing across national borders; the
lessor and lessee are based in different
countries.
Disclosures on
Management Approach (DMA)
Disclosures on management approach
are a Global Reporting Initiative (GRI)
requirement. These explain how the
Group manages the economic,
environmental and social impacts of its
activities on the material Aspects it has
identified. VERBUND combines those
processes and management systems in
one document and publishes it on the
website (www.verbund.com > Investor
Relations > Financial reports).
Earnings before
interest and tax (EBIT)
Operating result.
Earnings before interest, taxes,
depreciation and amortisation
(EBITDA)
Operating result before interest, taxes,
depreciation of property, plant and
equipment and amortisation of
intangible assets and effects from
impairment testing.
EBIT margin
Ratio of earnings before interest and tax
(EBIT) to revenue.
E-Control
(Energie-Control Austria)
Energie-Control GmbH (E-Control) was
established in 2001. On 3 March 2011,
E-Control was transformed into a public
authority (Sections 2 and 43 of the
Energy Regulatory Authorities Act,
Energie-Control-Gesetz). E-Control is
tasked with monitoring and supporting
the implementation of the deregulation
of the Austrian electricity and gas
market and intervening for regulatory
purposes if necessary.
Electricity standard load profile
Standard load profiles (SLP) are used for
electricity customers without recorded
power measurement. SLPs use a
calculated, sufficiently precise forecast
of electricity purchases on a quarter-
hourly basis in place of the non-existent
load profile curve of end users. SLPs are
representative load profiles used for
household, agricultural and commercial
customer groups with electricity
consumption of up to 100,000 kWh per
year, featuring similar usage patterns.
ElWOG
Austrian Electricity Industry and
Organisation Act (Elektrizitäts-
wirtschafts- und -organisationsgesetz,
ElWOG). ElWOG implements the EU’s
Electricity Directive in Austria.
Employee turnover rate
Employee turnover refers to the
percentage of employees who left the
Company due to termination, mutual
agreement, early retirement or
departures during the probationary
period. The percentage is calculated
based on the actual number of
employees as at the reporting date.
Equity method
Method used to account for investees
upon which a significant influence can
be exercised and for joint ventures.
Under the equity method, the carrying
amount of the equity interest is basically
adjusted for changes in the
proportionate share in the investee’s net
assets; the result is a “one-line
consolidation”. The changes are either
recognised in profit or loss or in other
comprehensive income (i.e. directly in
equity).
Equity ratio (adjusted)
Ratio of equity to total capital adjusted
for closed items on the balance sheet.
ESG rating
ESG stands for environmental, social
and governance. It refers to the analysis
and assessment of companies according
to environmental and social aspects as
well as by the management style applied
as opposed to a score based purely on
financial aspects.
Free cash flow after dividends
Operating cash flow plus cash flow from
investing activities excluding cash
inflows and outflows from investments
in or disposals of financial investments,
less dividend payouts; represents cash
available for financing activities (e.g.
repayment of financial liabilities) and
cash inflows and outflows for financial
investments.
ANNUAL FINANCIAL REPORT - GROUP 335
Funds from operations (FFO)
EBITDA plus interest income less
interest expenses and current taxes on
income.
Gearing
Ratio of net debt to equity.
Global Reporting Initiative
(GRI)
The GRI has developed guidelines and
standards for companies to prepare
sustainability reports since 1997 using
an international participative process.
Gross debt
Non-current and current financial
liabilities plus interest-bearing provisions
and other interest-bearing liabilities net
of closed items on the balance sheet.
Gross debt coverage
Ratio of funds from operations (FFO) to
gross debt.
Gross interest cover
Ratio of funds from operations (FFO) to
interest expenses (adjusted for
capitalised borrowing costs, interest
expenses on financial liabilities in
connection with closed items on the
balance sheet and profit or loss
attributable to limited partners).
Hydro coefficient
The hydro coefficient is the quotient of
the actual electricity generation of one
(or a series of) hydropower plant(s) in a
period and the average (calculated
based on historical water supply)
generation potential of the (series of)
hydropower plant(s) in the same period.
This long-term average = 1;
consequently, for example, a hydro
coefficient of 1.1 signifies a 10%
increase in generation.
Inter-TSO compensation (ITC)
ITC is the compensation for
transmission charges relating to cross-
border flows of electricity in
transmission grids.
Maximum electrical capacity
The maximum capacity at which a
power plant can sustain operation under
normal conditions.
Mean energy capability
Average generation potential of a
hydropower plant calculated based on
historical water supply.
NaDiVeG
Austrian Sustainability and Diversity
Improvement Act (Nachhaltigkeits- und
Diversitätsverbesserungsgesetz,
NaDiVeG) for the transposition into
national law of EU Directive 2014/95/EU
regarding the disclosure of non-financial
information and information related to
diversity by certain large companies.
See also NFR Directive.
Net debt
Gross debt less cash and cash
equivalents, short-term investments and
loans as well as securities held in
current and non-current assets.
NFR Directive
The Austrian federal government has
implemented EU Directive 2014/95/EU
for the disclosure of non-financial
information – the NFR Directive – in its
Sustainability and Diversity
Improvement Act (Nachhaltigkeits- und
Diversitätsverbesserungsgesetz,
NaDiVeG), which applies to financial
years beginning after 31 December 2016.
This law requires large public interest
entities with over 500 employees (incl.
listed companies, insurance companies
and banks) to include a non-financial
statement in their management report or
prepare a separate non-financial report.
This statement or non-financial report
includes information on environmental
matters, social and employee-related
matters, respect for human rights and
anti-corruption matters. In addition,
companies required to prepare a
corporate governance report are also
required to include information on their
diversity policy in this report.
Number of employees under
labour law (LLE)
All employment relationships with the
company under labour law. LLE is
measured at the end of the month at
each reporting date. Calculation is based
on headcount including employees on
unpaid leave and excluding members of
the Executive Board, employees in early
retirement and seasonal interns.
Payout ratio
Ratio of (proposed) dividend payment to
Group result.
Peak (peak load)
Peak refers to the load profile for
electricity deliveries supplied at a
constant rate throughout twelve hours
from 8 a.m. until 8 p.m. of each working
day of the supply period.
Performance
Describes the performance of a security
or portfolio, e.g. over a period of one
year.
Primary distribution system
The primary distribution system
connects the distribution network with
the transmission pipelines and the
336
storage systems and is used to supply
natural gas around Austria (length:
approximately 300 kilometres).
RCF/net debt
Retained cash flow (RCF): funds from
operations (FFO) less dividends
distributed.
Redispatch
Redispatching means changing the
operating schedule of power plants in
the short term to prevent or eliminate
grid congestion.
Return on capital employed
(ROCE)
Ratio of net operating profit after tax
(NOPAT) (profit or loss for the period
plus interest from investments under
closed items on the balance sheet and
interest expenses net of any tax effects)
to average capital employed. From 2019
onwards, this ratio is only calculated for
VERBUND’s unregulated business
activities.
Return on equity (ROE)
Ratio of net profit or loss for the period
to average equity.
Sustainable Development Goals
(SDGs)
The 17 goals and 169 sub-goals for
sustainable development set by the UN
member nations, applicable since 2016
for all nations worldwide. Among other
things, these aim to end poverty,
promote the equal treatment of women,
improve healthcare and combat climate
change by the end of 2030.
System Usage Rates Directive
(SNT-VO)
The System Usage Rates Directive
(Systemnutzungstarife-Verordnung,
SNT-VO) dictated the principles for
determining and allocating costs, the
criteria for calculating rates as well as
the rates for grid usage fees. The Energy
Control Commission issued the directive
annually. Since 2012, the E-Control
Commission has issued the System
Usage Rates Directive.
Task Force on Climate-related
Financial Disclosures (TCFD)
The TCFD was established in 2015 by
the Financial Stability Board (FSB).
The Task Force was commissioned to
develop recommendations on climate-
related risk disclosures for use by
companies in demonstrating to the
capital markets their resilience to
climate change. Recommendations have
been developed in four areas
(governance, strategy, risk management,
and metrics and targets) with the
objective of identifying, measuring,
managing and reporting on climate-
related risks and opportunities.
UN Global Compact
The United Nations Global Compact is
the world’s largest corporate social
responsibility (CSR) and sustainable
performance initiative. This global
movement of businesses, policymakers
and civil society aims to make
globalisation more socially just and
environmentally sustainable. Key
elements of the UN Global Compact are
its ten universal Principles and support
of the United Nations’ 17 Sustainable
Development Goals (SDGs).
Value at risk (VaR)
A method applied to calculate the
potential trading position loss arising
from price changes. The loss potential is
calculated based on an assumed
probability (e.g. 95%) and on the basis
of market-oriented price changes.
Variation margin
The variation margin represents the cash
amounts to be paid daily to or from the
futures exchange resulting from the
measurement of open positions held on
the stock exchange. Gains and losses on
the open positions resulting from price
fluctuations versus the previous day can
therefore be offset on a daily basis. The
variation margin thus corresponds to the
unrealised gains or losses on the
portfolio that would be due if the
positions were closed out. The variation
margin and initial margin eliminate the
credit risk for trading participants on the
exchange.
Part 2
Parent company
338
€m, %
2019 2020 2021
Revenue 313.9 350.9 392.6
Earnings before interest and taxes (EBIT) 682.7 476.3 689.4
Earnings before taxes 622.4 437.2 649.3
Net income for the year 619.5 420.5 610.6
Net profit 239.7 260.6 364.8
Total assets 5,157.6 5,202.3 6,020.0
Fixed assets 4,907.8 5,044.5 5,809.9
Capital expenditure for property, plant and equipment 1.2 3.5 2.9
Depreciation of property, plant and equipment 1.6 2.5 2.2
Equity 3,088.1 3,268.8 3,618.9
Return on sales (ROS) 217.5% 135.8% 175.6%
Return on equity (ROE) 23.8% 14.2% 19.9%
Return on investment (ROI) 13.9% 9.2% 13.3%
Return on capital employed (ROCE) 10.4% 7.2% 9.7%
Equity ratio 59.9% 62.8% 60.1%
Debt repayment period 7.3 4.6 4.7
Cash flow from operating activities 293.4 564.3 473.6
Gearing 61.7% 51.2% 58.4%
Working capital – 742.0 – 870.1 – 756.3
Net debt 1,905.5 1,673.7 2,112.8
Current liabilities 1,085.7 981.9 978.9
Current assets 343.7 111.8 222.6
Share price high 55.3 69.9 106.2
Share price low 38.0 29.0 59.6
Closing price 44.7 69.9 98.9
(Proposed) dividend per share 0.69 0.75 1.05
Dividend yield 1.54% 1.07% 1.06%
Average number of employees 132 148 156.8
Group electricity sales volume (GWh)
1
66,292 66,989 63,274
1
incl. system requirements
Three-year comparison
ANNUAL FINANCIAL REPORT – PARENT COMPANY 339
Executive Board
Name Year of birth Date of initial
appointment
End of current
term of office
Mag. Dr. Michael Strugl MBA
CEO and Chairman of the Executive Board
(since 1/1/2021) 1963 1/1/2019 31/12/2023
Dr. Peter F. Kollmann
CFO and Member of the Executive Board 1962 1/1/2014 31/12/2023
Mag. Dr. Achim Kaspar
Member of the Executive Board 1965 1/1/2019 31/12/2023
Supervisory Board
Name Year of birth Date of initial
appointment
End of current
term of office
MMag. Thomas Schmid
Chairman (until 8/6/2021) 1975 30/4/2019 8/6/2021
Mag. Martin Ohneberg
Chairman (from 22/9/2021)
1st Vice-Chairman (until 22/9/2021)
Managing partner of HENN Industrial
Group GmbH & Co KG, HENN GmbH and
HENN GmbH & Co KG; member of the boards of
directors of Aluflexpack AG, Switzerland (president) and
Montana Aerospace AG, Switzerland (vice-president);
member of the supervisory boards of VARTA AG,
Germany, and Getzner Werkstoffe Holding GmbH,
Austria 1971 30/4/2019 AGM 2024
Mag. Dr. Christine Catasta
1st Vice-Chairwoman (from 22/9/2021)
2nd Vice-Chairwoman (until 22/9/2021)
Member of the management board and director
(authorised representative) of Österreichische
Beteiligungs AG (until 31/1/2022); member of the
supervisory boards of OMV AG (vice-chairwoman),
Telekom Austria AG (member),
Bundesimmobiliengesellschaft m.b.H. (chairwoman),
ARE Austrian Real Estate GmbH (chairwoman),
Austrian Airlines AG (member), ÖLH Österreichische
Luftverkehrs-Holding-GmbH (member) and
Casinos Austria AG (member) 1958 16/6/2020 AGM 2024
Mag. Christa Schlager
2nd Vice-Chairwoman (from 22/9/2021)
Head of the economic policy department at the
Vienna Chamber of Labour; member of the supervisory
board of Forschungsförderungsgesellschaft mbH 1969 16/6/2020 AGM 2023
Dr. Susan Hennersdorf
CEO of cresc. gmbH, member of the supervisory board
of Tele Columbus AG (member until June 2021) 1967 16/6/2020 AGM 2022
Board members
340
Name Year of birth Date of initial
appointment
End of current
term of office
Prof. Dr. Barbara Praetorius
Professor at the University of Applied Sciences (HTW)
Berlin, member of the supervisory board of Berliner
Wasserbetriebe (BWB) AöR 1964 16/6/2020 AGM 2022
Mag. Jürgen Roth
Managing partner at Tank Roth GmbH; member of the
supervisory boards of ICS Internationalisierungscenter
Steiermark GmbH (chairman) and ELG
(Erdöl-Lagergesellschaft m.b.H.); member of the
European Economic and Social Committee 1973 22/4/2015 AGM 2023
Dipl.-Ing. Eckhardt Rümmler
Member of the supervisory board of
PreussenElektra GmbH, Germany 1960 16/6/2020 AGM 2024
Mag. Stefan Szyszkowitz
Spokesman of the managing board of EVN AG; member
of the supervisory boards of Burgenland Holding
Aktiengesellschaft (chairman), EVN Macedonia AD
(chairman), RAG-Beteiligungs-Aktiengesellschaft
(chairman), RAG Austria AG (chairman), Energie
Burgenland AG (vice-chairman), Netz Niederösterreich
GmbH (vice-chairman); member of the supervisory
boards of Österreichische Post AG (member) and Wiener
Börse AG (member) 1964 23/4/2018 AGM 2023
Dipl.-Ing. Peter Weinelt
Managing director of Wiener Stadtwerke GmbH and
Wiener Stadtwerke Planvermögen GmbH; member of
the supervisory boards of Wien Energie GmbH
(chairman), Wiener Netze GmbH (chairman), Bestattung
und Friedhöfe Wien GmbH (chairman), WienIT GmbH
(chairman), EVN AG (member), Burgenland Holding
Aktiengesellschaft (member) and Wiener
Gesundheitsverbund (member) 1966 5/4/2017 AGM 2023
Supervisory Board appointments or comparable roles in publicly traded companies and other significant companies have been listed in relation to (ancillary) functions. Full-time
functions are listed where appropriate.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 341
Employee representatives
Name Year of birth Date of initial
appointment
Kurt Christof
Chairman of the Central Works Council
Member of the supervisory boards of Stadtwerke
Voitsberg GmbH and Sparkasse Voitsberg/Köflach
Bankaktiengesellschaft 1964 since 8/3/2004
appointed by the
employee
representatives
Doris Dangl
Chairwoman of the Central Works Council
Chairwoman of the Group’s employee
representatives 1963 since 5/4/2018
appointed by the
employee
representatives
Dr. Isabella Hönlinger
Chairwoman of the Works Council 1971 since 1/9/2016
appointed by the
employee
representatives
Ing. Wolfgang Liebscher
Chairman of the Central Works Council 1966 since 1/11/2013
appointed by the
employee
representatives
Veronika Neugeboren
Chairwoman of the Works Council 1967 since 30/4/2019
appointed by the
employee
representatives
The appointment of employee representatives by the Group’s employee representatives is for an unlimited period and can be revoked at any time.
342
As Austria’s leading energy utility, VERBUND took advantage of the energy market climate and
generated outstanding results once again in financial year 2021 despite the ongoing COVID-19
pandemic. The Group succeeded in strengthening its profitability and in successfully continuing its
sustainable development. The Supervisory Board actively monitored and supported this strong
performance.
Performance of duties
In financial year 2021, the Supervisory Board discharged the responsibilities and exercised the powers
incumbent upon it by virtue of the law and the Articles of Association at seven plenary meetings, which
due to the preventive measures against COVID-19 were held as video or teleconferences. The overall
attendance rate for all Supervisory Board members was 98%. The Chairman additionally kept in regular
contact with the Board members to discuss matters of importance as they arose. The Executive Board
provided the Supervisory Board with regular and comprehensive real-time information, both verbally
and in writing, on all relevant matters relating to the performance as well as the position and strategy of
the Group and all significant Group companies; information was also provided on the Group’s risk
position and its risk management activities.
The Supervisory Board advised the Executive Board on key questions concerning the future,
particularly as regards the Group’s structure and strategy, and regularly discussed the implementation
of the strategy with the Executive Board. Major investment and acquisition projects were among the
main topics discussed. The Supervisory Board monitored and supported the Executive Board’s
management activities continuously based on its extensive reporting. Supervision took place in the
context of open and constructive meetings between the Executive Board and the Supervisory Board and
revealed no grounds for objection. The main resolutions adopted by the Supervisory Board are
presented in the 2021 Consolidated Corporate Governance Report. Between meetings, the Chairman of
the Supervisory Board conversed regularly with the Chairman of the Executive Board and also held a
number of discussions with individual members of the Executive Board.
Change in the General Committee of the Supervisory Board
MMag. Thomas Schmid stepped down as member and Chairman of the Supervisory Board on
8 June 2021 with immediate effect. His position was not filled in the reporting period. The Supervisory
Board subsequently appointed Mag. Martin Ohneberg as Chairman and Mag. Christa Schlager as
2nd Vice-Chairwoman. There were no other changes in the composition of the Supervisory Board.
Code of Corporate Governance, Supervisory Board Committees
As a leading listed Group, VERBUND made an early commitment to adhere to the Austrian Code of
Corporate Governance (Österreichischer Corporate Governance Kodex, ÖCGK). VERBUND’s
Supervisory Board views compliance with the Code as obligatory and endeavours to consistently
conform to the provisions relating to the Supervisory Board. In this spirit, we have achieved essential
compliance with the rules relating to the Supervisory Board’s collaboration with the Executive Board
and within the Supervisory Board itself.
In addition, the Supervisory Board again discussed at length possible conflicts of interest when
dealing with the approval of contracts with companies where individual Supervisory Board members
are related parties. No conflicts of interest were identified that would require any action to be
undertaken beyond that taken at the meetings.
Report of the Supervisory Board
ANNUAL FINANCIAL REPORT – PARENT COMPANY 343
The Strategy Committee of the Supervisory Board is responsible above all for coordinating corporate
strategy with the Executive Board, conducting the annual strategy review and supervising any
modifications to be made. During the reporting period, the Strategy Committee held three meetings for
the purpose of voting on the implementation of the Group’s strategy and to discuss individual topics of
strategic relevance. The Project Committee formed as a sub-committee of the Strategy Committee also
met on one occasion.
The Supervisory Board’s Audit Committee met three times during the financial year now ended.
It dealt above all with the quarterly financial statements, the budget and preparation of the resolution to
approve the annual financial statements, as well as with the appointment of the auditor and
examination of the auditor’s work. In addition, the Audit Committee concentrated on opportunity and
risk management as well as the commercial integration of equity interests and on the audits performed
by Internal Audit.
The newly established Sustainability Committee addresses in particular the topics of sustainability,
the New Green Deal, decarbonisation, the energy transition, climate action and environmental
protection. It is responsible for the development of appropriate strategies and implementation measures
as well as for the annual review of the sustainability strategy and goals. The Sustainability Committee
held four meetings in financial year 2021 to discuss various specific areas of emphasis in addition to
fundamental objectives and reporting.
In accordance with the Code of Corporate Governance and the rules of procedure, three other
committees – an Emergencies Committee, a Nomination Committee and a Remuneration Committee –
were again formed in the financial year now ended. The Remuneration Committee held two meetings to
discuss in particular target agreements and the achievement of targets for the variable remuneration for
the Executive Board as well as the 2020 remuneration report. The Nomination Committee and the
Emergencies Committee did not meet in the reporting period.
Further information on the composition, work procedures and meetings of the Supervisory Board and
its committees is contained in the Group’s Consolidated Corporate Governance Report for 2021.
Information on the remuneration paid to the Supervisory Board members can be found in the
remuneration report that the Executive Board and the Supervisory Board jointly prepared for
presentation to the Annual General Meeting in April 2022 in accordance with Section 78c of the Austrian
Stock Corporation Act (Aktiengesetz, AktG).
Annual financial statements and consolidated financial statements
The annual financial statements, together with the management report, the consolidated financial
statements prepared in accordance with the International Financial Reporting Standards (IFRSs) and
the Group management report for financial year 2021 were audited by Deloitte Audit
Wirtschaftsprüfungs GmbH and issued with an unqualified auditor’s report. The auditor prepared the
additional report required to be made to the Audit Committee under Article 11 of the Regulation on the
statutory audit of public-interest entities and reported its findings in writing. The auditor found that the
Executive Board had provided the explanations and evidence requested and that the book-keeping,
annual financial statements and consolidated financial statements fulfilled the legal requirements and,
in conformity with generally accepted accounting principles, gave a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the Group. The auditor also
confirmed that the management report and the Group management report were consistent with the
annual financial statements and the consolidated financial statements.
344
Following in-depth examination and discussion by the Audit Committee and the Supervisory Board,
the Supervisory Board approved the annual financial statements for financial year 2021 as presented by
the Executive Board. As a result, they are final for the purposes of Section 96(4) AktG. The management
report prepared by the Executive Board was approved, as was the proposal for the appropriation of profit.
The Supervisory Board also approved the consolidated financial statements and the Group
management report along with the consolidated corporate governance report submitted by the
Executive Board and the separate Non-Financial Report. There were no grounds for any material
objections.
In conclusion, the Supervisory Board would like to thank the Executive Board and all of the Group’s
employees for their successful work in 2021. Their tireless efforts in exceptional circumstances ensured
an uninterrupted supply of electricity in Austria. The Supervisory Board would also like to thank the
Group’s shareholders, customers and business partners for their trust.
Vienna, March 2022
Mag. Martin Ohneberg
Chairman of the Supervisory Board
Management report
346
General conditions
Prices for primary energy sources rose steeply in financial year 2021. In spite of this, the economy
experienced a significant recovery compared with the previous year. Oil prices increased by more than
60%, gas prices by 390%, coal prices by around 65%, and even prices for emission allowances doubled
in 2021. This in turn led to a sharp rise in prices for electrical energy on both the spot and futures
markets.
Overall demand for electricity in Austria increased again in 2021 as the economic rebounded.
However, domestic electricity generation was down against 2020, leading to a deterioration in net
imports.
General economic environment
Significant recovery in the global economy in 2021
The global economy saw significant expansion again in 2021 after the sharp slump in 2020 due to
COVID-19. The International Monetary Fund (IMF) put global growth at 5.9%, but also noted that
countries with access to vaccines were growing at different rates to those without. Along with the
COVID-19 pandemic, supply chain issues as well as rising commodity prices and the related increase in
inflation posed major challenges to economic growth.
According to the IMF, economic output rose by 5.6% in the United States and by 5.2% in the euro area,
with the countries in Europe that had experienced the sharpest downturns in 2020 showing
comparatively higher growth in 2021 (Italy and France, for example). For Germany the IMF anticipated a
comparatively smaller increase of 2.7% in 2021.
Besides the above-mentioned issues, economic growth in the coming years will depend to a large
extent on the evolution of the COVID-19 pandemic. If more aggressive mutations of the virus emerge,
leading to lockdowns, the key indicators can be expected to deteriorate compared with 2021.
For Austria, the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschafts-
forschung, WIFO) predicted economic growth of 4.1% for 2021 and 5.2% for 2022. Although the
economic upswing was heterogeneous from sector to sector, overall it was extremely strong. However, in
the second half of 2021, supply bottlenecks, rising commodity prices and further lockdowns had a
dampening effect. The labour market also recovered rapidly in spite of weaker growth in the tourism
sector.
Energy market environment
Electricity consumption up amid lower power generation in Austria
Austria’s electricity consumption (less pumped storage consumption, including grid loss and own use of
electricity by power plants) in 2021 was up 3.4% year-on-year at 71.2 TWh, principally on the back of the
economic recovery. With the exception of January, February and October, electricity consumption in the
remaining months of 2021 was higher than in the previous year. The biggest increase in consumption, of
15.2%, was in April 2021.
Generation of electricity from hydropower was down by as much as 5.5% on the 2020 figure. By
contrast, generation from thermal power plants in Austria rose by 2.1% year-on-year in 2021 (+0.3 TWh).
Electricity generation from wind power plants also declined in 2021 due to lower wind supply after
2020. Generation volumes in 2021 were down by 1.0%. In contrast to 2020, there was a decrease in other
generation (–5.3%). This figure includes other renewable energy sources (excluding biomass, which falls
Report on business performance and
economic position
ANNUAL FINANCIAL REPORT – PARENT COMPANY 347
into the category of thermal generation) and from plants that cannot yet be allocated for statistical
purposes. Overall, at 69.0 TWh, electricity production in Austria in 2021 was down 3.3% on the prior-
year figure.
Net imports likewise deteriorated year-on-year in 2021 owing to lower generation volumes amid an
increase in demand. In 2021, electricity imports rose by 7.8% and electricity exports fell by 15.2%, giving
net imports of –7.5 TWh.
Oil prices recover compared with 2020
The price of Brent crude oil (front month) was around $71/bbl in 2021 compared with approximately
$43/bbl in 2020. This represents an increase of more than 60%.
After oil prices had tanked in 2020 in connection with the COVID-19 crisis (–33%), in 2021 the oil
market saw an equally strong recovery in prices when a rebound in demand triggered by the economic
recovery was met with only a halting increase in supply, especially from OPEC+ countries. The steep rise
in gas and coal prices also drove oil prices sharply higher, as oil now increasingly came into
consideration as a substitute energy source.
Surge in gas prices
Prices on the spot market at the European NCG trading point (from 1 October 2020 THE – Trading Hub
Europe) averaged around €47/MWh in 2021, which was €37/MWh or 390% higher year-on-year. In
futures trading, invoiced amounts for supplier contracts for the coming year (NCG front year) were
around €34/MWh in 2021 – approximately €20/MWh or 146% higher than prices for front year in 2020.
This price rally was mainly attributable to the incipient economic recovery with increased demand for
gas (primarily in Asia), but also to supply problems and insufficient gas storage facilities in Europe. The
conflict between Russia and Ukraine caused additional strain in the European gas market.
Increase in steam coal prices
Steam coal prices also surged in 2021 compared with the previous year. Coal prices on the futures
market (ARA front year) were up $37/t (64%) on the prior year at an average of $95/t.
Coal prices on the spot market also rose sharply. Averaging $122/t in 2021, these were 144% higher
than the average listing in the previous year.
There are several reasons for this price increase. In Europe, the steep rise in gas prices and weak
renewable electricity generation led to increased coal-fired power generation, while in Asia the
economic recovery resulted in strong growth in demand. This was met with faltering supply, especially
in China. Following several catastrophic mining accidents, a new mining safety campaign was declared.
As a result, but also due to flooding in coal-producing regions, coal production slowed down
significantly.
348
Rising carbon prices
After 2020, a year dominated by the COVID-19 crisis, a significant recovery was also observed on the
CO
2
market in 2021: while prices were just shy of €35/t at the beginning of the year (forward market front
year), they rose during the year to reach around €80/t at year-end. Reasons for this price increase were
the EU’s stricter climate targets, the economic recovery, and higher CO
2
emissions related to the sharp
rise in coal-fired power generation as a consequence of surging gas prices and weak wind power
generation. In 2021, CO
2
prices averaged €54/t, more than twice the average level of €25/t in 2020.
Sharp price increase in the market for wholesale electricity
In 2021, the market for wholesale electricity was affected by a sharp price increase, both on the spot
market and on the futures market. The two markets were impacted by the steep rise in CO
2
and primary
energy prices and by the rebound in demand for electricity in Europe.
The average price for base load electricity deliveries in the Austrian market area on EPEX SPOT, the
European electricity exchange spot market, was up 222% year-on-year to €107/MWh in 2021.
At €127/MWh, peak-load prices were also 219% higher than the 2020 average. The average price for
immediate base load electricity deliveries in the German market area in 2021 was €97/MWh (up 218%
on the previous year), and the price for peak-load energy was €116/MWh (up 208%). From
September 2021 onwards, the average base spot price in the German market area was well over
€100/MWh, rising to more than €200/MWh in December 2021. This constituted a historic high. Prices in
Austria during this period were significantly higher again.
In the futures market at the European Energy Exchange (EEX), base load for 2022 (front year base)
was traded at an average price of €91/MWh in 2021 in the Austrian market area and peak load (front
year peak) was traded at €110/MWh. This represented an increase of over 110% year-on-year. In the
German market area, front year base traded at an average of €88/MWh and front year peak at
€107/MWh in 2021, an increase of around 120%.
VERBUND sells most of the electricity it generates in advance on the futures markets so as to reduce
short-term selling and price risks. The price trend in the futures market in 2021 had only a minor
influence on revenue in the reporting period.
Political and regulatory framework
EU energy policy
European Climate Law
The main aim of the European Green Deal – the central European strategy document for energy and
climate policy – unveiled back in 2019 is to increase the EU’s climate targets for 2030 and 2050. The
Union’s ambitious objective has also been enshrined in law with the European Climate Law adopted
in 2021. The European Commission raised its target for 2030 from a 40% reduction in greenhouse gas
emissions to a 55% cut (1990 baseline), while the target reduction for 2050 has been increased from 80%
to 95% on the path to net climate neutrality (1990 baseline).
ANNUAL FINANCIAL REPORT – PARENT COMPANY 349
Fit for 55 legislative package
In mid-July 2021 the European Commission provided more details on the implementation and structure
of the target trajectory for achieving this reduction in greenhouse gases in a comprehensive legislative
package entitled “Fit for 55”. The package comprises twelve legislative proposals and other non-
legislative statements. A reform of the EU Emissions Trading System (EU ETS) is central to achievement
of the targets; this will increase the linear reduction factor (reduction of the number of emission
allowances issued each year) from 2.2% p.a. to 4.2% p.a. and lead to a one-time overall reduction of the
available emission allowances. The total number of free allowances allocated will also be reduced at a
faster pace. Shipping will be integrated into the EU ETS from 2026 and separate emissions trading
systems for road transport and buildings will be introduced. As regards the amendment to the
Renewable Energy Directive (RED3), the European Commission intends to raise the EU final energy
consumption target for renewables from 32% at present to 40% in 2030. More ambitious 2030
renewables sub-targets have been defined for transport (13% greenhouse gas intensity reduction) and
for heating and cooling (annual binding increase of 1.1 percentage point in the share of renewables). For
renewable hydrogen, it is proposed that the rules for the production of green hydrogen from electrolysis,
which under the current RED2 are applicable exclusively to the transport sector, be extended to all final
hydrogen consumption sectors. Furthermore, the draft RED3 provides for a 50% renewable share in
hydrogen consumption in industry by 2030. The Energy Efficiency Directive also seeks to introduce a
higher target for reducing primary (39%) and final (36%) energy consumption by 2030, up from the
current target of 32.5% (for both primary and final consumption). This will be reflected in a higher
annual obligation on member states to achieve annual energy savings of 1.5% in end-use consumption
(currently set at 0.8%).
Another central component of the package is the proposal for a carbon border adjustment
mechanism, i.e. a type of CO
2
countervailing duty for carbon-intensive sectors. The European
Commission is pushing for the legislation to be passed by 2023 to allow enough time to reach the 2030
targets.
Sustainable Finance Taxonomy Regulation
In April, the European Commission published the delegated act setting out technical screening criteria
for the environmental objectives of climate change mitigation and adaptation based on the Sustainable
Finance Taxonomy Regulation. According to the technical screening criteria, all electricity generated
from wind power and solar energy shall be considered sustainable within the meaning of the taxonomy.
In principle, this likewise applies to electricity generated from hydropower, but the delegated act
requires further proof of the sustainability of hydropower plants. At the time the report was published,
the European Commission was proposing to classify investments in electricity generation from nuclear
and gas-fired power plants as sustainable under certain circumstances. The proposal is currently being
examined by the European Council and the European Parliament. In July, the European Commission
also published a delegated act with details on reporting requirements for companies from 2022 onwards
arising from the Taxonomy Regulation.
IPCEI Hydrogen – Important Projects of Common European Interest
In August 2021 Austria submitted a pre-notification to the European Commission with a selection of
Austrian hydrogen projects as part of the IPCEI industrial policy initiative. If awarded IPCEI status by
the European Commission, the projects could be given preferential treatment in terms of public funding.
350
Austria has earmarked €125m for this from the funds it receives under the EU growth initiative
Recovery & Resilience Fund. The pre-notification document names three VERBUND projects
(Carbon2Product Austria and two modular sub-projects of Green Hydrogen@Blue Danube). The award
of a subsidy cannot be inferred from the pre-notification.
Hydrogen and Decarbonised Gas Market Package
The European Commission released its Hydrogen and Decarbonised Gas Market Package (also known
as the gas package) in mid-December 2021. A sister package to the Fit for 55 package, it addresses the
integration of decarbonised gases (blue hydrogen produced from natural gas plus CCS/CCU) as well as
low-carbon gases (nuclear hydrogen). The Hydrogen and Decarbonised Gas Market Package presents a
unified nomenclature for hydrogen that classifies hydrogen according to its method of production
(renewable or fossil origin) and its final CO
2
life cycle emissions. The future use of gas infrastructure is
also addressed. In addition, specific regulations for the construction and operation of hydrogen
networks are proposed. These are supplemented by regulations on the conversion of existing gas grid
infrastructure.
New legal framework for the energy sector in Austria
Renewable Energy Development Act approved
The Renewable Energy Development Act (Erneuerbaren-Ausbau-Gesetz, EAG) was approved by the
Austrian National Council on 7 July 2021. The EAG will serve to implement the goal of 100% of electricity
generated from renewables by 2030 (national balance). Technology-specific expansion trajectories are
envisaged for this. The annual subsidy volume (three-year average) is not expected to exceed €1bn. The
EAG stipulates that renewable energy contributions shall be capped for low-income households. For
hydropower plants, the EAG largely provides for subsidies granted by means of administratively
determined market premiums, i.e. up to 25 MW (or, in the case of larger plants, for the first 25 MW) for
new construction, expansion and rehabilitation projects. The total annual contract award volume is
100 MW, with 20 MW being put out to tender together with the wind power projects due to objections by
the European Commission under state aid law. To be eligible for funding, rehabilitation projects must
achieve an increase of 5% in mean energy capability/maximum electrical capacity for plants up to 1 MW,
and an increase of 3% for plants above 1 MW.
Photovoltaic installations with a capacity of 10 kWp or higher will be subsidised via tenders for market
premiums; investment grants are also possible for plants with a capacity of up to 1 MWp.
A subsidy reduction of 25% is provided for open-field solar installations on grassland or on land used for
agricultural purposes (with exceptions). Wind power plants with a capacity of 1 MW or higher will be
subsidised in 2022 via an administrative allocation and from 2023 via tenders for market premiums.
A location differentiation model is planned so that less profitable locations can also be expanded.
A local area (NE 6, NE 7) and a regional area (NE 5, partly NE 4) are defined as territorial limitations
for renewable energy communities (RECs). These will particularly be exempted from the grid fees of the
upstream grid levels, but will also enjoy other benefits.
The EAG also provides for subsidies for generation facilities in the field of renewable gases. Among
other things, investment subsidies of €40m per year will be made available for green hydrogen
production plants. Tariff relief and exemptions from end-user charges for electrolysis (similar to the
exemption from tariffs and end-user charges for pumped storage that will be granted in the future for
15 years) have also been defined.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 351
Ecosocial tax reform
A proposal for ecosocial tax reform was presented in autumn 2021. The project envisaged in the
government programme provides for progressive national carbon pricing of sectors outside the
EU Emissions Trading Scheme (buildings, transport, sections of industry) from 1 July 2022, offset by a
substantial relief mechanism. Carbon will be priced at €30/t in July 2022, rising to €55/t by 2025. In 2026,
the price is to be aligned with the EU ETS. Reimbursement will be made by easing the burden of labour
and pensions (e.g. wage tax reduction), by reducing the pressure on the economy (e.g. reduction of
corporate income tax) and through other compensation mechanisms such as regional bonuses.
The amendments of the Energy Efficiency Act (Energieeffizienzgesetz, EEffG) and the Electricity
Industry and Organisation Act (Elektrizitätswirtschafts- und -organisationsgesetz, ElWOG) for
implementation of the Clean Energy Package were not presented in 2021. The Austrian Climate
Change Act (Klimaschutzgesetz, KSG) and the amended Environmental Impact Assessment Act
(Umweltverträglichkeitsprüfungsgesetz, UVP-G) are also not expected until 2022. Likewise, a decision
on the Austrian hydrogen strategy was not made in 2021.
New legal framework for the energy sector in Germany
The 2021 Climate Change Act passed by the German Bundestag in summer 2021 ushered in stricter
requirements for mitigating climate change and made the goal of achieving greenhouse gas neutrality by
2045 binding. Accompanying the bill, Germany’s federal government adopted an emergency
programme to underpin the ambitious goals.
Emissions are to be cut by 65% by 2030 (1990 baseline). An 88% reduction in greenhouse gases is
targeted for 2040. New ambitious targets have also been defined in the individual sectors of the
economy such as transport and energy. Besides the ambitious expansion targets, changes in approval
procedures are also expected to accelerate the expansion of renewables. In future, power plant upgrades
will face fewer hurdles. This could make it easier to replace existing wind power plants with new ones.
Looking ahead, only the question of whether the replacement of the plant will bring about an
improvement for the environment will be decisive for approval.
The new federal government that took office in December 2021 will continue on the path to climate
neutrality in 2045 and aims to achieve the climate targets by moving ahead with the expansion of
renewables and a climate check for all draft legislation. Going forward, achievement of targets will be
reviewed on the basis of a multi-year national account of climate action policy.
Finance
Factors affecting the result
Wholesale electricity prices
VERBUND contracted for most of its own electricity generation for 2021 on the futures market back
in 2019 and 2020. Ever since the split of the joint German-Austrian price zone in October 2018, separate,
higher prices have prevailed in Austria. Prices for AT 2021 front-year base load contracts (traded in 2020)
averaged €42.8/MWh, and prices for DE 2021 front-year base load contracts averaged €40.2/MWh.
Futures market prices thus decreased year-on-year by 16.4% (AT) and 16.0% (DE).
352
Front-year peak load (AT) contracts traded at an average of €52.0/MWh and front-year peak load (DE)
contracts traded at an average of €49.0/MWh. Futures market prices in this area thus also decreased
year-on-year by 16.3% (AT) and 14.9% (DE). The declines are mainly attributable to the COVID-19
pandemic.
Following the sharp drop in the previous year due to COVID-19, wholesale trading prices for
electricity on both the Austrian and German spot markets rallied significantly in quarters 1–4/2021.
Prices for base load electricity increased by an average of 222.4% to €106.8/MWh in Austria and by
217.9% to €96.8/MWh in Germany. Prices for peak load rose by 218.7% to €127.3/MWh in Austria and by
208.3% to €115.5/MWh in Germany. These massive increases can be attributed to the sharp rise in CO
2
and primary energy prices.
Water supply
The water supply in rivers is of particular significance for VERBUND since around 94% of its electricity is
produced using hydropower. Water supply is measured by means of a hydro coefficient, with the value
of 1.00 representing the long-term average. In the 2021 reporting period, the hydro coefficient for run-of-
river and pondage power plants was 0.95, which is 5 percentage points lower than the long-term average
and 6 percentage points below the prior-year level (1.01). The hydro coefficients for the individual
quarters differed substantially as follows: quarter 1: 0.99 (previous year: 1.09), quarter 2: 0.93 (0.86),
quarter 3: 1.03 (1.05) and quarter 4: 0.83 (1.11).
Electricity supply and sales volumes
VERBUND’s own generation decreased by 2,176 GWh, or 6.5% in quarters 1–4/2021 to 31,306 GWh
compared with the same period in 2020. Generation from hydropower decreased by 2,185 GWh
compared with the previous year. The hydro coefficient for the run-of-river power plants dropped to
0.95, or 6 percentage points below the prior-year figure and 5 percentage points below the long-term
average. Generation from our annual storage power plants fell by 6.9% in quarters 1–4/2021 versus 2020.
The effects from increasing reservoir levels and a slightly lower inflow outweighed the higher generation
from turbining.
The volume of electricity generated by VERBUND’s wind power installations in quarters 1–4/2021 was
84 GWh lower in the reporting period than in the previous year due to the low wind supply in all markets
(Austria, Germany, Romania). Electricity generated by photovoltaic installations stood at 2.1 GWh
in 2021.
By contrast, generation from thermal power plants increased by 91 GWh in quarters 1–4/2021.
The Mellach combined cycle gas turbine power plant produced 437 GWh more electricity in the
reporting period than in the prior-year reporting period due to market-driven operations for district
heating production in quarter 4/2021, in spite of the plant’s reduced use for congestion management.
The Mellach district heating power plant, which since the end of quarter 1/2020 has been used solely in
gas operation, was deployed for only a brief period and generated 345 GWh less electricity.
Purchases of electricity from third parties for trading and sales fell by 2,126 GWh. By contrast,
electricity purchased from third parties to cover grid loss and control power volumes increased by
587 GWh.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 353
Group electricity supply GWh
2020 2021 Change
Hydropower
1
31,525 29,340 – 6.9%
Wind power 924 839 – 9.1%
Solar power 1 2 –
Thermal power 1,033 1,125 8.8%
Own generation 33,482 31,306 – 6.5%
Electricity purchased for trading and sales 29,918 27,793 – 7.1%
Electricity purchased for grid loss and control power
volumes 3,588 4,175 16.4%
Electricity supply 66,989 63,274 – 5.5%
1
incl. purchase rights
VERBUND’s electricity sales volume fell by 3,845 GWh in quarters 1–4/2021. Electricity volumes
delivered to consumers rose by 636 GWh. In the wake of the COVID-19-related decline in the previous
year, the numbers of both domestic and foreign customers rose. As at 31 December 2021, our residential
customer base comprised approximately 527,000 electricity and gas customers. By contrast, sales to
resellers fell by 2,116 GWh year-on-year, mainly due to lower delivery volumes in Austria. Electricity
deliveries to trading firms decreased by 2,366 GWh due to lower spot trading volumes. Own use of
electricity rose by 61 GWh. This increase is attributable above all to increased operation of the Group’s
power plants in turbining mode.
Group electricity sales volume and own use GWh
2020 2021 Change
Consumers 13,568 14,204 4.7%
Resellers 29,009 26,893 – 7.3%
Retailers 20,164 17,799 – 11.7%
Electricity sales volume 62,741 58,896 – 6.1%
Own use 3,327 3,388 1.8%
Control power volume 921 990 7.5%
Total electricity sales volume and own use 66,989 63,274 – 5.5%
Approximately 56% of the electricity sold by VERBUND in quarters 1–4/2021 went to the Austrian
market (previous year: around 55%). International trading and sales activities focused on the German
market, which accounted for around 81% of all volumes sold abroad in 2021.
354
Electricity sales volume by country GWh
2020 2021 Change
Austria 34,469 33,185 – 3.7%
Germany 23,098 20,798 – 10.0%
France 4,284 4,191 – 2.2%
Romania 875 669 – 23.5%
Other 15 53 -
Electricity sales volume 62,741 58,896 – 6.1%
Financial performance
Revenue and result
Unit 2020 2021
Revenue €k 350,880.6 392,639.9
Earnings before interest and taxes (EBIT) €k 476,339.3 689,381.4
Earnings before taxes €k 437,188.5 649,348.3
Net income for the year €k 420,453.1 610,569.6
Net profit €k 260,561.8 364,786.5
Return on equity (ROE) % 14.2 19.9
Return on investment (ROI) % 9.2 13.3
Return on capital employed (ROCE) % 7.2 9.7
Return on sales (ROS) % 135.8 175.6
Revenue
Revenue from electricity deliveries increased by 10.1% or €28,042.7k. The average futures market prices
obtained for the 2021 supply year for volumes hedged for the long term were below the prior-year level
while, in contrast, the average spot market prices rose again. In the 2021 reporting period, the hydro
coefficient for run-of-river power plants was 5 percentage points below the long-term average and
6 percentage points below the previous year. Overall, this resulted in lower electricity revenue from the
marketing of purchase rights of approximately €1,838.4k. Invoicing for one partner authorised to
purchase electricity was changed at the beginning of financial year 2021 to be directly through
VERBUND Hydro Power GmbH (VHP). The previous year’s electricity revenue still included €3,769.9k in
connection with this partner. Overall, revenue from recharging partners authorised to purchase
electricity fell by €4,403.8k. The increase in the consumer segment amounted to €16,312.6k or 14.1% and
is primarily attributable to the favourable sales trend at higher electricity prices. Revenue from
marketing free volumes, primarily allocated to ÖMAG for the consumer segment, increased by
€17,972.3k or 172.4% to €28,398.3k.
Revenue from gas deliveries saw a price adjustment in mid-2020, which means the average sales price
is higher in 2021 than in 2020. In addition, the customer base grew, resulting in higher delivery volumes.
Consequently, revenue from gas deliveries increased by €10,393.5k, or 29.1%, to €46,102.4k.
Total revenue thus increased by €41,759.3k or 11.9%.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 355
Expenses for electricity purchases
Expenses for the purchase of electricity increased by 20.5%, from €156,905.6k to €189,022.6k. Electricity
purchases from purchase rights are based on reimbursement of costs and are therefore slightly below
the levels of the previous year (€2,288.9k) despite fluctuating volumes. Electricity purchased for the
consumer business is procured at market prices and therefore increased by 39.0% in financial year 2021
in addition to higher sales volumes. Similar to electricity revenue, the change made to invoice partners
authorised to purchase electricity directly through VHP also resulted in a reduction of electricity
purchases. The previous year’s electricity purchases still included €3,769.9k in connection with these
partners.
Expenses for gas purchases
Rising consumer business volume at significantly higher prices increased the expenses for gas
purchases by 77.3%, from €23,213.7k to €41,167.0k. In the previous year, lower prices caused expenses
for gas purchases to fall despite gains in the customer base.
Personnel expenses
Personnel expenses decreased by €1,510.2k, or 5.2%, to €27,310.5k. Factors contributing to an increase
in personnel expenses were the 1.5% increase in salaries and ancillary expenses under the collective
agreement and the biennial pay rises stipulated by the collective agreement as well as an increase of
8.8 average employees to 156.8 employees. Employee benefit expenses fell by €3,164.4k, primarily as a
result of the positive effect of the change in underlying calculation parameters in the amount of
€2,206.5k (previous year: negative effect of €467.9k).
Other operating expenses
Other operating expenses rose by €3,091.1k, or 6.5%, to €50,338.5k. The increase is mainly attributable to
higher IT expenses (€1,430.6k), advertising and market development costs of €732.2k and the rise in the
miscellaneous item in other operating expenses of €2,441.5k. These contrast with lower legal, audit and
consulting expenses of €1,513.2k.
Earnings before taxes
Earnings before taxes increased by €212,159.8k from €437,188.5k to €649,348.3k as a result of the
influencing factors described above and the higher year-on-year financial result of €596,084.7k
(previous year: €376,093.3k).
The financial result changed primarily due to higher impairment loss reversals of equity interests in
the amount of €135,558.6k (previous year: €36,262.7k). Reduced by transfers of losses, investment
income increased by €153,556.4k from €333,574.1k to €487,130.5k. Interest expenses fell by €2,495.1k
from €36,104.0k to €33,608.9k primarily as a result of a reduction in interest for loans and credit facilities
by €1,581.3k and the decrease in interest from Group financing of €859.9k.
356
The financial result includes income from the disposal of equity interests of €4.5k (previous year:
€4,692.3k). Capital procurement costs increased by €3,377.4k, from €3,046.8k to €6,424.2k, due to the
issuance of a new bond.
Financial position
Financial position
Unit 2020 2021
Fixed assets €k 5,044,498.0 5,809,947.4
Current assets €k 62,830.2 119,742.1
Working capital €k – 870,142.6 – 756,273.9
Net debt €k 1,673,709.3 2,112,803.9
Equity €k 3,268,845.0 3,618,852.9
Current liabilities €k 981,938.4 978,887.0
Current assets €k 111,795.8 222,613.1
Average capital employed €k 4,967,150.0 5,336,163.3
Equity ratio % 62.8 60.1
Fixed assets
Intangible assets and property, plant and equipment increased by €331.4k. Additions primarily related
to intangible assets (software) of €216.1k, to office and plant equipment and electrical installations of
€2,060.5k and to investments in buildings of €797.7k. Amortisation of intangible assets and depreciation
of property, plant and equipment amounted to €2,710.4k in the financial year. Carrying amounts of
€32.6k were written off in the financial year.
In accounting for investees, the investments item increased by €420,382.0k. On the one hand, there
were additions to domestic equity interests amounting to €434,301.6k and to foreign equity interests
amounting to €69,261.5k. On the other hand, reversals of impairment losses amounting to €135,558.6k
were recognised for domestic equity interests, and impairment losses of €28,555.5k were recognised for
one domestic equity interest. There was one disposal of €190,184.2k under foreign equity interests.
Other investments increased in total by €344,736.0k. Loans were granted in the amount of €430,338.6k,
while loans of €86,939.0k were repaid. The carrying amount of securities under fixed assets increased by
€1,336.4k due to impairment loss reversals amounting to €1,444.2k, which were partly offset by disposals
totalling €107.8k.
Current assets
The increase of €56,911.9k in current assets resulted mainly from the rise in other receivables from
affiliated companies by the amount of €53,979.7k (adjusted for the prior-year balance of the acquisition
of one subsidiary), of which €52,795.3k concerns the increase in corporate income tax allocations which
are not yet due and €1,000.0k relates to the additional granting of a short-term loan. The increase in
trade receivables amounted to €8,109.3k. This contrasts with a decrease in receivables from the disposal
of one equity interest in the amount of €4,336.3k.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 357
Equity
Due to the net income for the year in the amount of €610,569.6k, reduced by the distribution for
financial year 2020 of €260,561.8k, equity increased to €3,618,852.9k. The equity ratio fell slightly from
62.8% to 60.1%, mainly as a result of one external loan.
Liabilities
Non-current and current liabilities increased by €469,916.0k to €2,150,220.6k. In financial year 2021, one
new loan was taken out in the amount of €500,000.0k (previous year: €0.0k). Repayments to banks in
financial year 2021 amounted to €30,125.0k. Liabilities to affiliated companies fell by €31,351.1k due to
intra-Group invoicing. Trade payables rose by €6,713.9k to €48,406.4k. Other liabilities increased by a
total of €21,385.4k, primarily as a result of the €21,146.7k rise in liabilities to tax authorities.
Financing
Financing strategy
In today’s volatile energy market environment, VERBUND bases its financing strategy on three pillars:
1. safeguarding liquidity and ensuring suitable liquidity reserves; 2. securing a solid credit rating over
the long term; and 3. implementing innovative financial transactions in the field of green finance.
Safeguarding liquidity and ensuring suitable liquidity reserves
For VERBUND, ensuring that liquidity is available at all times has the highest priority. As at
31 December 2021, VERBUND had an ESG-linked syndicated loan in the amount of €500.0m at its
disposal that had not been drawn down. The loan, which was taken out with twelve domestic and
international banks with good credit ratings, matures in 2023 with two additional extension options of
one year in each case. VERBUND also had access to committed lines of credit amounting to €300m and
uncommitted lines of credit amounting to approximately €2,345.0m at the end of 2021. As at
31 December 2021, €1,430.0m of these credit lines had been drawn down.
Securing a solid, long-term credit rating
The better a company’s credit rating, the easier and more inexpensive it is to benefit from full access to
international capital markets. Having a solid credit rating gives VERBUND access to various financing
instruments, among other things, in the capital market. As at 31 December 2021, VERBUND had a long-
term rating of A with a stable outlook from Standard & Poor’s (S&P) and a rating of A3 with a stable
outlook from Moody’s. For the long term, VERBUND is aiming for a solid “A” category rating. VERBUND
is therefore focusing primarily on optimising free cash flow and on the two key rating-related
performance indicators of FFO/net debt and RCF/net debt.
358
Implementing innovative financial transactions in the field of green finance
Green finance has very high priority for VERBUND because the entire strategy is focused on
sustainability and this area is decisive in the international arena and a cornerstone of the national
climate strategy. VERBUND will continue to position itself as a pioneer in a future decarbonised energy
market.
Following a number of innovative transactions in recent years such as the issuance of the first green
bond in the German-speaking region, the world’s first green Schuldschein over a digital platform and
the first syndicated loan whose margin structure is linked exclusively to VERBUND’s ESG rating
(sustainability rating) over the term of the loan, a Green & Sustainability-linked Bond was issued in 2021
that combines all four available sustainable components in green finance in a single transaction:
1. Use of proceeds (classic project-specific green bond);
2. EU taxonomy aligned (the projects must be aligned with the EU Taxonomy Regulation as at the date
of issue);
3. Sustainable link (margin dependency relating to the achievement of the Group’s sustainability goals);
and
4. UN Principles for Responsible Investments (strong preference for sustainable investors in
accordance with a transparency requirement in bookbuilding).
Specifically, VERBUND is planning to use the proceeds exclusively for “green” projects conforming to
the VERBUND Green Financing Framework. Developed at the beginning of 2021, this Framework is
consistent with the current (as of the issue date) draft of the EU Taxonomy Delegated Act and the EU
Green Bond Standard. It was also drawn up in accordance with the ICMA Green Bond Principles and
the ICMA Sustainability-linked Bond Principles. The proceeds from this bond will be used to finance the
rehabilitation and expansion of a hydropower plant in Germany and high-voltage power line projects in
Austria. ISS ESG, a leading global sustainability rating agency, rated the quality of the Green Financing
Framework very positively in a second party opinion. In addition, VERBUND commits to expanding
both the newly installed production output exclusively in the areas of hydropower, wind power and solar
power by at least 2,000 MW (KPI 1) and the installation of additional transformer capacity (necessary for
feeding the renewable electricity into the high-voltage grid) by at least 12,000 MVA (KPI 2). Both of these
targets are very ambitious. If one of the targets is not achieved by 31 December 2032, the coupon
payments of the bond will increase by 0.25% p.a. for the remaining term of the bond.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 359
KPIs – finance
Unit 2020 2021
Cash flow from operating activities €k 564,286.7 473,615.4
Cash flow from investing activities €k – 61,719.0 – 613,008.5
Cash flow from financing activities €k – 502,567.7 139,393.1
Financial result €k 376,093.3 596,084.7
Gearing % 51.2 58.4
Debt repayment period years 4.6 4.7
Compared with the previous year, the financial result increased by €219,991.4k to €596,084.7k. The
main reason for this was the high impairment loss reversals recognised on equity interests in financial
year 2021 amounting to €135,558.6k, whereas in financial year 2020 impairment loss reversals
recognised on equity interests had amounted to only €39,262.7k. Investment income reduced by
transfers of losses increased by €153,556.4k to €487,130.5k. Interest income remained largely the same
(change: €–21.3k). Income from loans increased by €1,123.2k to €36,259.4k. Income from the disposal of
equity interests of €4.5k (previous year: €4,692.3k) was recognised during the financial year.
Distributions from securities amounted to €924.5k in 2021 (previous year: €0.0k). Write-ups of securities
amounted to €1,444.2k (previous year: write-downs of €100.9k).
A sharp increase of €439,094.7k in interest-bearing net debt and the simultaneous sharp increase of
€350,007.8k in equity resulted in a moderate increase in gearing by 7.2 percentage points to 58.4%. The
debt repayment period remained nearly unchanged at 4.7 years (previous year: 4.6 years) due to the
higher cash inflow from earnings before taxes of €510,657.5k (previous year: €417,638.3k) accompanied
by a sharp rise in debt of 24.2% (previous year: 6.6% reduction).
Cash flow statement
The cash flow statement is prepared in accordance with AFRAC position statement 36 (Cash flow
statement in accordance with the Austrian Commercial Code (Unternehmensgesetzbuch, UGB)). Since
VERBUND AG also operates as a holding company, income and expenses from equity interests
continued to be reported under cash flow from operating activities.
(1) Cash flow from operating activities
Cash flow from operating activities is determined using the indirect method and resulted in a cash
inflow of €473,615.4k (previous year: €564,286.7k).
Profit or loss for the period includes investment income impacting the cash flow net of losses
transferred amounting to €487,130.5k (previous year: €333,584.1k).
The change in trade receivables and other receivables is primarily attributable to the increase in trade
receivables in the amount of €8,109.3k and partially offset by a decrease in other accruals and deferrals
of €2,888.4k.
The change in trade payables and other liabilities is mainly the result of the increase in liabilities from
the electricity and gas business of €6,391.2k. Trade payables, excluding the electricity and gas business,
360
rose by €322.8k. Under other liabilities there was a decrease of €544.9k. Liabilities to the tax authorities,
mainly comprising value-added tax, rose by €21,148.1k. Trade payables to affiliated companies fell by
€1,048.4k.
The change in current provisions is mainly attributable to utilisation and partial reversal of provisions
for the consumer business in the amount of €8,525.6k and to lower provisions for outstanding purchase
invoices in the amount of €802.8k. Provisions for personnel expenses rose by €109.7k.
The net liability position arising from income tax payments in the amount of €72,705.8k (previous
year: inflow of €166,956.7k) is attributable to prepayments to the tax authorities of €214,339.0k and other
income taxes such as capital gains taxes of €1,165.0k. Assessments from previous years with a net inflow
of €1,127.4k and the net credit effect of tax allocations from Group members of €141,670.8k had a
counteracting effect.
(2) Cash flow from investing activities
Net cash flow from investing activities consisted of an outflow of €613,008.5k (previous year: outflow of
€61,719.0k), resulting primarily from the repayment of loans in the amount of €86,939.0k (of which
€83,438.3k in loans to affiliated companies). These contrast mainly with the granting of loans in the
amount of €430,338.6k (of which €430,327.9k in loans to affiliated companies) and investments in
affiliated companies in the amount of €311,732.9k. In addition, the Group received subsequent proceeds
of €4,336.3k from the disposal of an investment. Income of €112.3k was generated by intercompany sales
of securities.
Capital expenditure for intangible assets and property, plant and equipment comprised capital
expenditures for office and plant equipment in the amount of €1,476.3k, for buildings in the amount of
€797.7k and for electrical equipment in the amount of €478.5k, as well as investments in software in the
amount of €216.1k.
Dividend distributions from securities generated inflows of €924.5k.
(3) Cash flow from financing activities
As part of the dividend distribution approved for financial year 2020, €260,561.8k was paid out to
shareholders. This was equivalent to a dividend of €0.75 per share. Group clearing resulted in a cash
outflow of €30,302.7k (previous year: cash inflow of €9,731.8k).
Through VERBUND AG’s reduction of debt in previous years, the cash outflows for interest and
similar expenses of €39,617.5k (previous year: €38,679.9k) were held at nearly the same level as in the
2020 financial year.
In financial year 2021, financial liabilities amounting to €30,125.0k were repaid in line with planning.
One new loan was taken out in the amount of €500,000.0k (previous year: €0.0k).
ANNUAL FINANCIAL REPORT – PARENT COMPANY 361
Cash flow statement €k
Notes 2020 2021
Earnings before taxes 437,188.5 649,348.3
Amortisation of intangible assets and depreciation of
property, plant and equipment 2,925.7 2,710.4
Amortisation and reversal of impairment of investments – 39,363.6 – 108,447.3
Result from disposal of non-current assets – 11.3 – 7.4
Other interest and similar income, and interest and
similar expenses – 3,473.8 – 770.4
Change in non-current provisions – 1,913.5 – 3,770.4
Income from the reversal of contributions to building costs – 35.1 – 35.1
Other non-cash expenses and income – 4,881.5 – 4,629.9
Change in inventories – 158.2 – 332.2
Change in trade receivables and other receivables
1
– 5,277.2 – 5,416.5
Change in trade payables and other liabilities
2
2,382.2 26,890.5
Change in current provisions 9,947.8 – 9,218.7
Payments for income taxes 166,956.7 – 72,705.8
Cash flow from operating activities (1) 564,286.7 473,615.4
Cash outflow from capital expenditure on intangible assets
and property, plant and equipment – 3,739.4 – 2,968.7
Cash inflow from the disposal of intangible assets and
property, plant and equipment 28.0 40.0
Cash outflow from capital expenditure on investments – 322,764.3 – 742,071.6
Cash inflow from the disposal of investments 226,716.7 91,387.6
Cash inflow from investments and securities 0.0 924.5
Cash inflow from interest 38,040.0 39,679.6
Cash flow from investing activities (2) – 61,719.0 – 613,008.5
New non-current loans 0.0 500,000.0
Cash outflow from the repayment of financial liabilities
(excluding money market transactions) – 233,902.8 – 30,125.0
Cash inflow (outflow) from increases (decreases)
in Group clearing balances 9,731.8 – 30,302.7
Dividends paid – 239,716.8 – 260,561.8
Cash outflow for interest and similar expenses – 38,679.9 – 39,617.5
Cash flow from financing activities (3) – 502,567.7 139,393.1
Change in cash and cash equivalents 0.0 0.0
Cash and cash equivalents as at 1/1/ 0.0 0.0
Cash and cash equivalents as at 31/12/ 0.0 0.0
1
incl. prepayments, accrued income and deferred tax assets //
2
incl. other accruals and deferred income
362
VERBUND takes its social responsibility as Austria’s leading utility and an important player in the
European electricity market very seriously. Back in 1994, VERBUND was one of the first companies in
Austria to prepare an environmental report, thus pre-empting the trend towards reporting on
environmental factors. That annual publication was followed in 2002 by VERBUND’s first sustainability
report. From then until 2014, a sustainability report was published annually as a supplement to the
annual report. Since 2015, VERBUND has published an integrated annual report in response to the
rising demand from different groups of stakeholders for comprehensive company information.
The annual sustainability report is now included in VERBUND’s integrated annual report.
The Austrian Sustainability and Diversity Improvement Act (Nachhaltigkeits- und Diversitäts-
verbesserungsgesetz, NaDiVeG), which entered into force on 6 December 2016, stipulates that large
public interest entities must publish non-financial information starting in financial year 2017.
VERBUND uses the Global Reporting Initiative (GRI) for this purpose. Consequently, the present report
was also prepared in accordance with the GRI Standards as well as the G4 Sector Disclosures for
“Electric Utilities”, Core option.
Starting in 2022, VERBUND is also required to disclose information on environmentally sustainable
revenues, capital expenditures (CAPEX) and operational expenditures (OPEX) pursuant to the
EU Taxonomy Regulation for financial year 2021. This reporting requirement is complied with through
the Materiality section of the Non-Financial Report in the 2021 Group Integrated Annual Report.
This report covers the activities of all of the companies included in the Group’s consolidated financial
statements. Significant events occurring at unconsolidated companies are also reported to provide a
complete picture of the Group. The reporting period comprises the 2021 calendar year.
Sustainable topics and projects in 2021
Code of Conduct for Sustainable Business
In 2021, the VERBUND Code of Conduct and the sustainability mission statement were
comprehensively updated and revised. Among other things, this took into account the increased interest
of external stakeholders and internal developments, e.g. VERBUND’s 2030 strategy, the updating of the
2019 stakeholder survey and the implementation of the Supplier Code of Conduct. The interdisciplinary
project team recognised the numerous synergies between the existing Code of Conduct and the
sustainability mission statement. An innovative approach was therefore selected and the two
documents were combined to form the new “Code of Conduct for Sustainable Business”.
The Code covers the following action areas: our ethical corporate governance, our commitment to the
climate and environmental, our way of working, our economic responsibility and our contribution to
society. With a clearly defined channel for submitting reports and reporting violations of the rules, and
including specific practical examples, it serves the Group, the Executive Board, the management and the
employees as a set of guidelines for responsible conduct. Sustainability and responsible conduct
towards society, the environment and the economy go hand in hand.
Sustainable supplier assessment
VERBUND is conscious of its responsibility within the supply chain, which is why we are working
intensively on this topic. As the next step in the further development of its sustainable supplier
management system, VERBUND has therefore been working since 2021 on the implementation of a new
rating system for assessing the sustainability performance of suppliers. To this end, VERBUND is
Report on the environment,
research, development and social
aspects
ANNUAL FINANCIAL REPORT – PARENT COMPANY 363
working with an external provider whose ESG ratings are to be used for the sustainability assessment in
future. Rollout will initially be to VERBUND’s top 100 suppliers. In the medium term, additional strategic
supplier groups will be included using a risk-based approach.
Climate Impact Day
In 2021, VERBUND took part in Climate Impact Day (CID), which was organised for the first time by
start-up company Glacier. The aim of this day is to promote the topic of sustainability and to raise
awareness for climate change mitigation both in the community and within the Group. VERBUND also
organised a day for its employees dedicated to climate change and its mitigation. This gave employees
an opportunity to learn about VERBUND’s solutions for mitigating climate change, such as e-mobility
and solar power, and about the topic of climate change risks, and to test their knowledge in a quiz and a
game of climate bingo.
Environmental performance
In all of its fields of activity, VERBUND is committed to taking a responsible approach to the
environment. The VERBUND environmental mission and a Group-wide environmental management
policy guarantee that the requirements of internal and external stakeholders concerning professional
environmental management are taken into consideration.
The Environment executive order and additional environmental provisions define the framework for
the systematic planning, execution and measurement of and reporting on VERBUND’s environmental
achievements. Existing structures, processes and responsibilities in environmental management ensure
compliance with legal requirements, nationally and internationally accepted regulations and the
Group’s own standards. For this, VERBUND has established a decision-making body at the highest
management level and a working team made up of in-house environmental experts.
International standards form the basis for the Group-wide collection and reporting of VERBUND
environmental data. Detailed information on the standards applied and applicable factors is available
from VERBUND’s Investor Relations or Corporate Responsibility departments on request.
Impacts on the environment
The impacts – both positive and negative – that the VERBUND generation portfolio has on the
environment are a key issue in VERBUND’s environmental management systems. There are two primary
ways in which normal operation of VERBUND’s plants has a detrimental impact on the environment:
through the effect of hydropower plants on habitats in relation to river morphology and biodiversity and
through the effect of thermal power plants in relation to airborne emissions. The VERBUND plants
themselves present no significant risks with potentially negative effects for the environment. By
operating the facilities in compliance with the laws, VERBUND further minimises the likelihood that
these risks will arise. For extreme events (severe flooding, earthquakes, etc.) VERBUND has specific
contingency plans and a crisis management team.
Certification of environmental management systems
VERBUND engages external auditors to audit and certify its environmental management systems at
generation and grid facilities and at major administrative sites in accordance with ISO 14001. This
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applies to sites of consolidated companies, excluding wind power plants if the operating company is
certified and sites in which VERBUND has a share of < 51% and where another co-owner is responsible
for management. The Mellach thermal generation facilities are also validated in accordance with the
EMAS Regulation. A separate environmental statement is published annually on VERBUND’s website
for these facilities. This means that 100% of VERBUND’s sites have been certified since 2017. The
objective is to continue with ISO 14001 certification at existing sites and to add new sites. New facilities
are therefore incorporated into the environmental management system as quickly as possible after
commissioning and included in the scope of the certificate for the next audit.
Generation and use of power
In 2021, 96.4% of electricity generated at VERBUND originated from hydropower, wind power and solar
power, and 3.6% from thermal generation. VERBUND’s total energy consumption decreased to
18.9 million gigajoules (GJ) in 2021 from 19.5 million GJ in 2020, with approximately 6% reduction in
total generation.
Fossil fuels accounted for 42% of total use of power at 8 million GJ. Only the fossil fuel natural gas was
used for thermal generation to generate electricity for grid support for congestion management
purposes as well as for district heating. Therefore, neither hard coal nor sewage sludge (biomass as a
substitute fuel) is used from 2021 onwards. In addition, natural gas is used in the gas compressor
stations to operate Gas Connect Austria’s (GCA) gas grid. Around 51% more natural gas was used in 2021
than in 2020 (2020: 5.2 million GJ; 2021: 7.9 million GJ). The volume of fuels used for the vehicle fleet
and equipment amounted to 0.06 million GJ (2020: 0.06 million GJ), corresponding to around 0.7% of
the total use of power from fossil fuels.
Internal electricity consumption by VERBUND comprises grid purchases for administration, power
plants, pumps and grid facilities. In 2021, the share of electricity purchased was 58% of total use of power.
At around 10.9 million GJ of electricity, mainly for pumping and turbining and for compensating grid
losses, a slightly higher volume of electricity was drawn from the grid than in financial year 2020. Over
72% of this electricity came from renewable energy sources.
The key performance indicator energy intensity, which is expressed as the ratio of the Group’s power
use to the volume of electricity and district heating generated, remained the same in 2021, at
0.16 GWh/GWh (2020: 0.16 GWh/GWh). VERBUND’s target of a 25% reduction in energy intensity by
2021 (2015 baseline) was achieved between 2019 and 2021, largely thanks to the rapid phase-out of
generation from hard coal, the implementation of measures to improve efficiency and the increase in
renewable generation.
Use of materials
Materials VERBUND uses include additives and consumables for effluent treatment and for energy
generation in the power plants and for the grid facilities.
Total material requirements fell by 78% year-on-year. This decrease is primarily attributable to
reduced use of additives and consumables at the Mellach site in 2021. The material intensity for thermal
generation has been reduced by 97% since 2015. VERBUND therefore achieved its goal of an 80% drop in
this figure by 2021 (2015 base year) by switching from generation from hard coal to natural gas and
through the use of the new waste water treatment system.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 365
Greenhouse gas emissions
The Group’s focus on electricity generation from renewable energy is a crucial factor for both VERBUND
and its customers for reducing and avoiding greenhouse gas emissions. Of the electricity generated at
VERBUND in 2021, 96.4% was generated from hydropower, solar power and wind power. As it is still
necessary to use thermal power plants to provide grid support and district heating, the remaining 3.6%
share of generation came from thermal power plants. VERBUND ceased using hard coal in April 2020
and now uses only natural gas.
VERBUND’s GHG reporting meets the criteria of the Greenhouse Gas Protocol (GHG Protocol) and,
with publication in 2021, also those of EN ISO 14064-1:2018. Under both these standards, GHG
emissions are divided into three scopes. Scope 1 emissions are all direct emissions generated from
internal company activities and activities at VERBUND. Scope 2 emissions are generated indirectly from
internal electricity and district heating consumption and from grid losses. Scope 3 emissions, from the
consumption-based perspective, comprise other indirect GHG emissions in the upstream and
downstream value chain.
In 2021, the carbon footprint was recalculated and the scope of reporting was expanded as part of the
Corporate Carbon Footprint project. The comprehensive revaluation was carried out based on the
enhanced business model, new areas of business, the expansion of generation facilities for renewable
energy and the application of the ISO standard. A direct comparison of any historical publication of
GHG-related data is only possible for VERBUND’s Scope 1 emissions, which are subject to the EU ETS.
For other GHG emissions, a recalculation was carried out in some cases, and a complete initial
calculation for others. GHG emissions from the operation of GCA’s gas grid have been included in the
data collection since June 2021.
VERBUND has already ceased using lignite (2006), oil (2015) and hard coal (2020) as fuel and counts
as one of the early movers among electric utilities. VERBUND has continuously reduced its CO
2
emissions from thermal power plants since 2005, which fall under the European Emissions Trading
System (EU ETS). Between 2005 (3.8 million tonnes CO
2
) and 2021 (0.4 million tonnes CO
2
) VERBUND
reduced its ETS emissions by 88%. VERBUND is thus contributing to the avoidance and reduction of
emissions as well as to SDG 13 “Climate action”. By reducing thermal production volumes and switching
fuels to natural gas, VERBUND has also massively reduced its airborne emissions (dust, NOx, SO
2
). The
Group fell just slightly short of achieving its target to reduce VERBUND-specific direct GHG emissions
(Scope 1) to below 10 g CO
2
e per kWh of total electricity generated, with these emissions amounting to
14 g CO
2
e per kWh.
Due to the transformation of the energy sector and the implementation of VERBUND’s strategy, the
business model that has evolved with it, and new calculation methods, there is a new GHG emission
forecast for VERBUND for the years ahead. VERBUND has been and will continue to be perceived in
Austria as a reliable partner for securing supply. In the area of security of supply, VERBUND is trusted by
the population and has a responsibility in this respect. VERBUND tries to meet these needs at best
possible by generating electricity from hydropower, wind power and solar power, also with the Mellach
site and as an operator of electricity and gas transmission networks. Use of the state-of-the-art Mellach
combined cycle gas turbine power plant (Mellach CCGT) is therefore necessary to continue to provide
and maintain a secure domestic supply.
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Conservation and biodiversity
Some VERBUND power plants and grid facilities are located in nature conservation areas or other
protected areas. The following table contains the disclosures on the sites by type of protected area.
Information on the geographical location of the power plants is published on the VERBUND website.
The locations of the protected areas can be found on the Austrian and Bavarian geodata portals.
Rehabilitation measures implemented at water bodies and the construction of fish passes to re-
establish river continuity are making an important contribution to the preservation and promotion of
biodiversity. Current examples of investments in ecology and biodiversity in the vicinity of VERBUND
hydropower plants can be found in the Hydro section and information on wind and solar power projects
can be found in the New renewables section. The wide range of measures that VERBUND has already
implemented and those that are still at the planning stage in the areas of conservation and biodiversity
are presented on the web pages of the respective LIFE projects, on the Austrian Power Grid AG (APG)
website and on the VERBUND website.
Water and effluents
Water withdrawals at VERBUND sites totalled 66.6 million m in 2021 and were therefore 43% lower
than the figure of 116.7 million m recorded in 2020. Approximately 87% of this total volume of water
was used as cooling water in our Mellach CCGT. This share is withdrawn from the surface water, used for
cooling and returned chemically unchanged. Around 13% are volumes of service water. Only 0.3% of the
total water volume withdrawn is actually consumed.
Details on treatment methods used and the water quality, including the review of the main substances
of concern and compliance with limits, are published for the thermal power plants in the annual
environmental statement. Compliance with the limits for effluent treatment plants at all other sites is
also monitored. In 2021 limits were found to have been exceeded to a minor extent at five sites. The
causes were analysed and appropriate countermeasures have already been put in place to ensure
compliance again.
In order to determine whether sites are located in areas with a water stress level above 40%, the
location of VERBUND operating sites was compared with the location of areas of high or extremely high
water stress as defined in the Aqueduct Water Risk Atlas of the World Resource Institute (WRI). This
comparison found that all VERBUND operating sites are located in areas which were below the
threshold of 40%.
The KPI water intensity as a percentage of total electricity generated decreased by 77% compared with
2015. The target reduction of 50% by 2021 was overachieved in 2020 and 2021.
Please refer to the 2021 Group Integrated Annual Report (NFI Report) and the VERBUND website for
detailed environmental information as well as further information on generation, use of materials,
energy consumption, waste and by-products, and other environmental KPIs.
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Innovation, research and development
KPIs – IR&D
Unit 2019 2020 2021
Number of IR&D projects Number 80 91 127
Total project volume
1
€m 192.6 257.0 266.4
of which EU projects
1
€m 118.2 152.2 103.5
VERBUND’s total share
1
€m 58.7 77.6 110.4
Annual VERBUND expenses
2
€m 10.7 9.5 11.3
Annual VERBUND investments
2
€m 6.8 4.1 2.4
1
over the entire duration of the projects //
2
the entire beginning in 2020, expenses and investments are reported separately; previous years were adjusted
International agreements on climate change, the European Commission’s Fit for 55 plan, national
strategies and programmes and the commitment of civil society are clear indications that the energy
transition away from fossil fuels to renewable energy sources is in full swing – even in spite of the
continuing COVID-19 crisis.
Research, development and innovation contribute significantly to implementing climate action
projects and initiatives. VERBUND also assumes responsibility in this context and demonstrates this
with its strategic commitment to innovative technologies and business models for decarbonisation.
These efforts are supported by cooperations with universities and research institutes, businesses and
start-ups in Austria and internationally.
Focus on electromobility: green electricity as the basis for climate-friendly mobility
For the latest generation of electric cars, VERBUND is relying on the expansion of a high-performance
charging infrastructure network through its investment in SMATRICS-EnBW. In conjunction with
European partners, a network of charging opportunities is being established along European mobility
corridors. The interoperable network thus provides cross-border mobility services based on electricity
from renewable energy. The high-performance charging network is being built under the Central
European Ultra Charging (CEUC) project – co-funded by the European Commission – in Austria and
with partners in Italy and South-Eastern Europe. The eCharge4Drivers research project is testing and
demonstrating potential applications for intelligent charging services with funds from the European
research programme Horizon 2020. In addition to publicly accessible charging infrastructure,
VERBUND is focusing on innovative charging solutions for private individuals and corporate customers.
This centres on the smart link between energy provision and management using charging solutions in
each respective environment.
Focus on new storage: batteries as the link between generation and consumption
VERBUND relies on innovation and research projects in the field of new storage systems to address the
growing share of volatile renewable energy sources in the power grid and local consumers and to
combine different generation and storage technologies at a regional level.
In the Blue Battery research project successfully implemented in 2020, an industrial-scale battery
storage unit was integrated into an existing hydropower plant with the objective of being able to create a
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Frequency Containment Reserve (FCR) which is available within a matter of seconds. The efficiency and
availability of the power plant will be significantly improved by the corresponding longer useful life of
the turbines.
In the European innovation project SYNERG-E, the focus is on the interface between the energy and
mobility sectors. The electricity infrastructure faces challenges as charging output power rises up to
1 MW for high-performance charging infrastructure. This challenge is being addressed by implementing
local battery storage at electric vehicle charging stations in the SYNERG-E project. Intelligent
management of batteries and the charging processes at the respective site makes it possible to balance
out the load peaks generated by the charging process for electric cars. In addition, the stationary battery
storage is bundled virtually in order to provide grid services. A total of nine high-performance charging
sites in Austria and Germany will be equipped with local battery storage in this project funded by the
European Commission.
Focus on green hydrogen: a game changer in the energy sector
Working together with partners, VERBUND is prioritising green hydrogen with the goal of further
advancing decarbonisation of the industrial and mobility sectors.
Launched in 2017, the H2FUTURE project, co-funded by the Fuel Cells and Hydrogen Joint
Undertaking (FCH JU), implemented a proton exchange membrane (PEM) electrolyser with a capacity
of 6 MW together with research project partners. The demonstration facility first produced green
hydrogen in 2019. Numerous potential applications were subsequently demonstrated with the plant.
One of these was the provision of grid services by the plant. In addition, tests were conducted to
maximise hydrogen production. Green hydrogen is produced primarily for use in steelmaking. The
H2FUTURE research project was ultimately successfully completed at the end of 2021 and the findings it
generated were then incorporated into subsequent projects.
At a national level, VERBUND is a partner of WIVA Power & Gas, the hydrogen initiative of the
Austrian model region, subsidised by the Austrian Climate and Energy Fund. The focus of the WIVA
projects in which VERBUND is involved is on production and use of green hydrogen in industrial
companies or for storage in storage facilities. Under the WIVA project H2Pioneer, VERBUND is
coordinating a research project aimed at the utilisation of green hydrogen in the semiconductor
industry.
In the Carbon to Product Austria (C2PAT) innovation project, VERBUND is collaborating with
partners from the industrial sector – Lafarge, Borealis and OMV – to test the use of green hydrogen in a
circular economy project.
VERBUND is setting another focus in new hydrogen technologies with the HOTFLEX project. In this
project, a new hydrogen technology is being tested at VERBUND’s Mellach site together with partners
from research and industry and with the support of the Austrian research funding agency
Österreichische Forschungsförderungsgesellschaft (FFG) and the FCH JU. The high-temperature
electrolysis/fuel cell system with rated power of 150 kW is the core of the research plant.
The cooperation with Zillertaler Verkehrsbetriebe is focused on the use of hydrogen in the
transportation sector. In late 2023, the narrow-gauge railway in the Zillertal Valley is scheduled to begin
trial operation powered by hydrogen. The green hydrogen to be used for this will be produced with
renewable electricity from VERBUND’s power plants in the Zillertal Valley.
In the Green Hydrogen@Blue Danube innovation project, VERBUND is taking a major step towards
bringing the hydrogen activities to the international stage. The goal is to work with international
ANNUAL FINANCIAL REPORT – PARENT COMPANY 369
partners in establishing a European hydrogen value chain reaching from the production using
renewable energy sources, through transport, to the buyers. In 2021, the project’s implementation focus
was on developing regional hydrogen hubs together with customers. In the course of this, VERBUND is
participating in the ongoing IPCEI (Important Projects of Common European Interest) process and is
networking with hydrogen initiatives in Europe.
Focus on biodiversity: fish passes ensure habitat connectivity at run-of-river power plants
Working together with partners, valuable habitats were connected to each other at VERBUND’s
Altenwörth and Greifenstein power plants on the Danube River as part of the LIFE Network Danube
Plus project, safeguarding accessibility for migrating fish and water organisms and creating new habitats
in the Krems and Kamp rivers.
Lower Austria’s longest fish pass at more than 12.5 km in length has been constructed in Altenwörth.
The fish pass connects restoration projects on the Danube and its tributaries, thereby fostering the
biodiversity in the Danube. A total of 575,000 m
3
of gravel and fine sediment was relocated during the
work. The excavated material was used locally near the river’s old course.
In addition to the fish pass, as a power plant operator VERBUND is working with the market
municipality of Kirchberg am Wagram to improve the bathing quality of the old course of the Danube at
Altenwörth. An artificial biotope was constructed on the left bank of the old course in order to filter out
and reduce the excess quantity of nutrients. This is intended to reduce the growth of algae to a natural
level.
During construction of the Greifenstein power plant, the water balance of the neighbouring floodplain
was secured by means of a system of artificial reservoirs. Today, this system of channels is a protected
area with an abundance of typical plants and animals. With a total of four fish passes, the channel
system is now accessible for fish and the Schmida and Göllersbach rivers have been reconnected to the
Danube.
Focus on new renewables: intelligent management of wind and solar farms
VERBUND is focused on new renewables and specifically on solar and wind power. As part of this,
research and development projects addressing preventative maintenance and intelligent plant
management are being implemented.
The objective of the Smart Operation of Wind Turbines under Icing Conditions (SOWINDIC) research
project is the significant reduction of unplanned ice-related production losses and balancing energy
volumes through research into a completely new and innovative operation method for heating the rotor
blades of wind turbines. Sponsored through the sixth tender of the Austrian Climate and Energy Fund’s
energy research programme, the project will extend over 36 months. Project partners of the research
project comprise the Austrian Institute of Technology (AIT), the University of Vienna’s Institute of
Mathematics and its Data Science@Uni Vienna research platform, along with Meteotest AG.
The database information system (DBIS) project aims to develop a scalable IT platform solution for
automated monitoring of all VERBUND Green Power wind and solar farms currently in operation. In
this project, the highest degree of process automation was developed for the data stream including an
innovative method which was developed in house for processing data related to the individual assets
encompassing validated final reports and completed maintenance assignments. In this way, DBIS
contributes to the efficient operation and maintenance of VERBUND Green Power’s plants. The project
entered the implementation phase in 2021. It is expected to go live in May 2022.
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One of the first single-axis tracking photovoltaic demonstration systems was realised in the megawatt
range in the project entitled “Single-axis tracking photovoltaic installation (Mitterkirchen)”. The
objective of the project is to optimise the use of space at VERBUND Hydropower’s Wallsee/
Mitterkirchen power plant site. Besides optimising the use of space, the project also focuses on cost
effectiveness, the impact of mechanical moving components on maintenance work and future uses of
solar applications in the agricultural sector.
Focus on digitalisation: Digital Hydro Power Plant – hydropower 4.0
In view of the promising options for further digitalisation in the field of hydropower, the Digital Hydro
Power Plant project aims to systematically develop and evaluate digital testing systems in practical
application at the Rabenstein pilot plant. The range of topics extends from platform solutions for a
multitude of areas, smart sensor designs, mobile assistance systems, artificial intelligence, digital twins,
drones and 3D printing to innovative inspection devices. Digital solutions will contribute to further
improvements in operations and the maintenance of hydropower plants, the transfer and broadening of
expert knowledge, and personal and plant safety. Initial solutions are already being used outside of the
pilot power plant. The diverse solutions developed by VERBUND in the Digital Hydro Power Plant
project were presented in the course of an event attended by international experts in 2021.
Innovations in the power grid: Vertical Market Integration
As the control area manager, APG is responsible for keeping consumption of electrical energy in balance
with generation at any given moment in Austria. In order to achieve the target anchored in the
Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz, EAG) of generating all electricity from
renewable energy sources by 2030 (national balance), the share of volatile generation facilities is being
greatly increased. To maintain the balance between generation and consumption in the future as well,
comprehensive utilisation of existing and new flexibility options is essential.
In the Vertical Market Integration project, APG is working with its implementation partner EQUIGY to
facilitate low-threshold, standardised, transparent and non-discriminatory integration of flexibility
services into the automatic frequency restoration reserves. By using the EQUIGY ecosystem, existing
functionalities can be accessed and new developments will follow an internationally standardised
format. This streamlines consistent market access for flexibility providers in several countries, helping to
bring new providers to the market more efficiently. Furthermore, since multiple grid operators
cooperate in the development, costs are kept low for the market and subsequently also for consumers.
This innovative integration model for automatic frequency restoration reserves is also expected to
serve as a basis for other applications in future such as congestion management. Meanwhile, a concept
for comprehensive utilisation of flexibility services is currently being developed with industry partners.
A first draft of this joint model will be coordinated with regulatory authorities in 2021.
ABS for the power grid (ABS4TSO)
Large rotating masses of turbines and generators in hydropower plants and thermal plants create inertia
in the power grid, which counters sudden changes in grid frequency. Due to the rapidly growing share of
inverter-based feed-in from wind and solar farms without that inherent inertia, new services are
required to stabilise grid frequency.
A joint effort between the Vienna University of Technology (TU), the Austrian Institute of Technology
(AIT) and VERBUND developed a 1 MW/500 kWh battery storage system for this purpose which is
ANNUAL FINANCIAL REPORT – PARENT COMPANY 371
capable of providing highly dynamic system services with specific parameterisation options for the
inverter. The field test in APG’s substation in southeast Vienna began in 2021 following in-depth
functional testing in the AIT laboratory.
BVLOS drone flights for rapid incident inspections
From time to time, high and ultra-high voltage lines have to be temporarily shut down due to critical
incidents. Lines must be inspected for damage or foreign objects before being put back into operation.
Long-distance drones equipped with high-resolution cameras can be automated to fly along the
routes and inspect lines beyond the visual line of sight (BVLOS) of a pilot. Collected images are provided
to experts for examination. In the future, routine inspections can be assisted by this approach as well.
In cooperation with SmartDigital, APG conducted two automated drone flights along 100 km of
380-kV high voltage lines in 2021. The flight was able to be tracked from the operation centre using live
view and live radar technology. Trials for a future night flight were also conducted.
Please refer to the 2021 Group Integrated Annual Report for further information as well as additional
details on innovation, research and development.
Digitalisation, information security and data protection
Digitalisation
The topic of digitalisation is the focus of activities in all of VERBUND’s operating segments, with the goal
of making internal and external services and processes efficient. Digital innovations, skills and abilities
are continually evaluated and developed further. Potential for greater digitalisation is being unlocked in
all areas, from generation through trading to sales. Digital solutions are the catalyst for a successful
energy future in Austria.
The Digitalisation master plan had further digital projects added to it in financial year 2021 and
includes projects from the categories of digitalisation, auto machine learning, big data, digital workforce
management, digitalisation in power plants and modern working practices. This master plan thus
encompasses all strategically relevant digitalisation projects in the Group and serves to help plan and
coordinate digital innovations.
The Digital Deep Dive initiative started in financial year 2020 was completed in 2021. The goal of this
initiative was to continuously identify further potential for digitalisation within VERBUND using new
approaches and dynamic methods. This project generated further digital follow-up projects, such as the
development of an employee app for VERBUND Thermal Power and the establishment of an aerial
drone strategy.
Projects within the scope of Hydropower 4.0, such as the Digital Hydro Power Plant and the Digital
Workforce Management projects, have allowed additional technologies for the digitalisation of energy
generation (including the flight over the Drossen Dam in Kaprun using an aerial drone) to be tested and
implemented.
Furthermore, the first projects on the use of auto machine learning for automation were successfully
completed in quarter 4/2020. Back-testing confirmed the success of this method.
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The first big data platform was also established at VERBUND in December 2020. The necessary tools
and a strategic data governance committee were established in 2021 to manage data assets (“meta-data
catalogue”) and create a data map. The combination of big data and auto machine learning
technologies will enable VERBUND to achieve a higher degree of automation of business processes in
the future.
Modern Work@VERBUND is an initiative started by an interdisciplinary, cross-company core team
with the aim of creating a new, open, transparent and trusting culture of cooperation (cooperation,
networking and exchange) throughout the entire Group. In Phase I, after interviews and management
consultations had taken place, the action areas for specific initiatives were defined. Three specific
initiatives were then planned and implemented in Phase II. Phase III of the project commenced in 2021.
The well-established team shall continue to be the contact and sparring partner for projects and
measures in the Modern Work environment (e.g. gender balance, MS365, etc.) and shall communicate
the measures implemented in Phase II and establish and integrate these further within the Group.
Information security
Information security is a high priority at VERBUND and extends through all areas of the Group. A key
role in this is also played by the obligations arising for critical infrastructure companies under the
Network and Information Security Act (Netz- und Informationssystemsicherheitsgesetz, NISG). In
summer 2020, several VERBUND companies were identified by official notices as “operators of an
essential service”. In the 2021 reporting period, the central information security management system
was once again certified to ISO 27001 and ISO 27019. In addition, the security measures required by the
Network and Information Security Act (NISG) were also audited by an external agency for the first time.
Digitalisation projects at VERBUND are always carried out with information security in mind.
Information security is therefore a key driver of progress and makes an essential contribution to the
achievement of the objectives of the Group’s strategy.
The Information Security department established in 2019 was also expanded. In addition to
safeguarding infrastructure operations, this department thus also ensured the implementation in 2021
of the Information Security master plan adopted by VERBUND’s Executive Board in 2019. The aim of the
entire programme is to maintain but also continuously increase the degree of maturity in all areas of
information security.
The Security Operation Center (SOC) plays a central role in achieving this objective and in countering
the significant increase in cybercrime. The SOC was therefore expanded further, the visibility of
attempted cyberattacks on VERBUND was further increased and contingency plans were developed.
The sphere of action encompasses not only the entire IT landscape, but also the systems for electricity
generation.
Due to the rapid establishment of the Information Security department since 2019 and the speedy
progress with the master plan projects, VERBUND was well prepared for the COVID-19 pandemic. New
and state-of-the art working methods such as remote working have already been used in project
implementation. Information security was therefore at no point in jeopardy, even with the ongoing
COVID-19 pandemic. As in 2020, and even with extensive access restrictions at VERBUND sites, at least
two members of staff from the Information Security department were always present at the corporate
headquarters in order to be able to respond on the ground in an emergency. The security awareness
programme was also intensively pursued to make all employees aware of the security risks in the
working environment at home and to protect them against possible attacks.
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Data protection
VERBUND takes the implementation of the provisions of the EU General Data Protection Regulation
(GDPR) very seriously.
An integrated data protection management system has been established internally and includes all
Group companies. The Group Data Protection Officer manages and coordinates all of the Group’s data
protection-related matters and is supported in this by the data protection officers at the individual
companies.
The data protection tool TOM&PIA developed by VERBUND supports the data protection officers in
updating the records of processing activities, protecting the rights of data subjects and managing the
notifications to the supervisory authority. This tool is now also offered to other external companies as
software as a service.
In financial year 2021, 30 enquiries from data subjects were processed and responded to. There were
no cases of personal data breaches that had to be reported to the supervisory authority and no cases of
data leaks, data theft or data loss in connection with customer data.
Due to COVID-19, the mandatory awareness and training programme was restricted to online
channels and therefore to an e-training course and the proprietary online courses “Stories of TOM&PIA”.
Human resources
VERBUND’s employees make a vital contribution to the Group’s success. Their commitment and
entrepreneurial actions enable continuous further development and implementation of VERBUND’s
strategy.
After financial year 2020, which was dominated by the global COVID-19 pandemic, financial
year 2021, which was also defined by the COVID-19 crisis, showed how the dedication of VERBUND’s
employees contributes to the Group’s success. Thanks to their commitment, flexibility and
entrepreneurial action, VERBUND continued to cope well with the crisis. In spite of the restrictions due
to the pandemic, the majority of VERBUND’s projects have gone ahead, enabling VERBUND to continue
to consistently pursue its strategy.
Crisis management
As an Austrian industry leader and an operator of critical infrastructure, VERBUND has a responsibility
to be as best prepared as possible for crisis situations and to take the appropriate action quickly in case
of emergency. Like 2020, 2021 was an exceptional year and showed that the good preparation of the
established crisis management system paid off.
Aside from protecting the health of all of its employees, VERBUND’s priority was to maintain the
electricity supply and ensure continuity of the necessary business processes. Although the pandemic
created an exceptional situation worldwide for the second year in succession, the challenges brought by
COVID-19 in the past financial year were successfully overcome once again with a professional and
flexible crisis management system. The crisis teams met on a regular basis and the protection concepts
were adapted according to the current infection situation. The measures were implemented in close
cooperation with the relevant stakeholders and were accompanied by transparent communication.
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New works agreement on home office and mobile working
Based on the extensive experience with remote working due to the COVID-19 pandemic, the Group
works agreement on remote working that has been in place since 2004 was replaced with a modern set
of rules on home office and mobile working. The new regulations, which were drawn up in successful
collaboration with the employee representatives, have set a milestone in the direction of modern
working and more flexible working conditions – even after the pandemic. The aim is to increase
VERBUND’s attractiveness as an employer in future, too. It is particularly significant that mobile working
brings another new, flexible and location-independent form of carrying out work.
Personnel planning and management
VERBUND uses a contemporary and user-friendly planning and reporting instrument for employee data.
This integrated personnel and expense planning system ensures a transparent personnel planning
process. Consistent and strict personnel planning also promotes efficient use of resources.
VERBUND’s central personnel management function has the authority to issue guidelines concerning
all personnel management matters in the Group. Focal points of the activities include personnel
planning and development, personnel controlling, recruitment, personnel marketing and employer
branding, labour and social law, company pension management, employer representation in
interactions with employee representatives, compensation and benefits, and strategic guidelines
relating to occupational health care, as well as diversity and inclusion management.
VERBUND uses a variety of methods such as external audits, internal reviews and analyses of KPIs
including the observation of internal and external benchmarks to assess the effectiveness of these
management approaches. Based on the results of these feedback and performance review processes,
compliance with the guidelines is regularly reviewed and adapted as needed.
Types of employment and benefits offered
VERBUND operates nearly exclusively in Central Europe, a region which has high standards in terms of
labour law and social welfare. VERBUND generally offers permanent contracts to all of its employees.
Temporary employment contracts are only entered into when there are objective reasons for doing so
(e.g. to replace employees on parental leave). VERBUND seeks to retain employees for the long term.
Apart from probationary periods, fixed-term employment contracts are only used in exceptional cases.
The majority of employment contracts at VERBUND are therefore open-ended. Various working-time
models, including full-time, part-time and part-time during parental leave, accommodate the different
phases of an employee’s life while meeting the requirements of the labour market. Around 25% of part-
time employees are men. Temporary workers are also hired to cover capacity peaks, during project work
and for temporary leave replacements.
VERBUND provides all of its employees, regardless of the working-time model, with a number of
voluntary benefits and benefits under collective bargaining agreements. These include a pension fund,
supplementary health insurance, discounted lunches, child benefits and health checks.
Employment of highly and very highly qualified employees entails corresponding personnel costs.
VERBUND therefore offers remuneration in line with the market and according to employees’
performance. To meet this commitment, we have had a performance-based remuneration model in
place since 2010. This model uses targets based on both individual performance and the Group’s
profitability and ensures fair pay at all levels.
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Strategic personnel planning project
Various challenges were identified in strategic personnel planning and the planning of the long-term
quantitative framework was considered. Implementation of the corporate strategy with the planned
growth and the capacities for digitalisation also presents VERBUND with challenges, such as the
development of new areas of business (for example in connection with renewable energy and e-
mobility). This requires responsible building-up of resources. Other European energy companies are
also faced with the same task.
At the same time, VERBUND must deal with the effects of demographic change within the Group and
in the external market. In view of the rapidly changing demands on the world of work, the focus in 2021
was also on the qualitative change in the relevant occupational groups for VERBUND. The changes in
activities and skills were assessed in a long-term analysis up to 2030. Resulting longer-term needs for
action in the areas of training, analysis of potential and employee development were identified and
strategies were developed for meeting these needs in the specific occupational groups. This will ensure
that the necessary resources can be guaranteed, taking demographic changes, labour market trends and
gender balance into account. The specific measures in the areas of employee development, employer
branding and apprenticeship training are already being implemented. With early definition of coverage
strategies and responsible management of existing and future human resources capacity, VERBUND
aims to maintain and enhance its attractiveness as an employer for women and generations to come.
Refocusing of employer image – employer branding
Demographic effects, the increasing complexity in the fields of work in the energy market and the future
cultural transformation of VERBUND also necessitate extensive refocusing of the Group’s positioning as
an employer. A distinctive, differentiated employer brand is crucial for this.
The brand essence of the current employer brand was sharpened in 2020, key positioning statements
were developed and a clear differentiating feature from established companies was defined with the aim
of continuing efficient, high-quality recruitment and strengthening employee retention and the
identification of VERBUND employees with the Group. The intention is to thus improve VERBUND’s
reputation as an attractive employer and to increase the number of applicant fits.
Under the new slogan #lead (ing) the way, a new employer campaign was rolled out in 2021, starting
with the apprentices target group. Emotive job stories were created for this and employer videos were
produced about the power plants.
The development of clear communication messages for the main target groups of students
(apprentices), graduates and experts achieved an even better response.
Anchoring of the #lead (ing) the way slogan internally has also been driven forward by measures such
as the job ambassador programme, ongoing training programmes as well as publications on the intranet.
The implementation was geared to the current COVID-19 situation and tailored primarily to digital
media.
Existing measures, with the strategic focus on maintaining long-term contact with top-performing
students from the Vienna University of Technology (TU) and on measures for the advancement of
women, were continued in 2021. COVID-19 continued to make it more difficult to hold events such as
Take Your Daughter to Work Day in Vienna, the Women in Technology (“Frauen in die Technik,” FIT)
initiative and Girls! Tech up in 2021. The selection process for awarding the VERBUND women’s
scholarship was held virtually. This allowed VERBUND
to give three highly qualified and committed
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female technicians additional personal and professional training beyond their everyday university life
once again in 2021.
Recruitment – virtual, but not impersonal
Developments in connection with COVID-19 also made it more difficult to follow the usual recruitment
process at VERBUND. As normal face-to-face contact was not possible, other measures were taken to
continue interviewing applicants and select them for VERBUND. Dealing with the challenges of COVID-
19 made it even clearer that the recruitment process needs to be flexible and that digital solutions offer
crucial advantages, particularly in times of crisis.
During the COVID-19 crisis, a comprehensive digital recruitment and onboarding process made it
possible to recruit staff for VERBUND without any face-to-face contact. As before, all applications were
processed and video interviews were held in place of the traditional in-person interviews.
A large number of the career fairs were also held virtually. The new online-only framework offered
virtual trade fair booths, video presentations and many different networking possibilities.
The continuous efforts to maintain the high level of professionalism of recruitment quality, even at
this challenging time, were validated in 2021, when VERBUND was once again acknowledged in
Career’s Best Recruiters study and awarded the silver seal. This award with a special focus on crisis
resilience demonstrated that VERBUND overcame the challenges of 2021 professionally.
Personnel development
The area of personnel development also required many flexible solutions in 2021 due to the COVID-19
crisis. In 2021 each VERBUND employee nevertheless took part in 26 hours of training on average.
Personnel development in financial year 2021 focused on training in the areas of safety, technology
and mandatory compliance training.
Due to the pandemic, many events could not be attended in person as planned in 2021. Measures for
which a virtual format was not feasible due to the nature of the training (e.g. first aid courses, working at
height, etc.) had to be either postponed or cancelled altogether. The majority of events were switched to
a virtual format. Virtual workshops and webinars are usually in a highly condensed form, due to their
online format, and are therefore often significantly shorter than in-person events. This had an effect on
the number of training hours again in 2021, which, as in the previous year, only amounted to around
50% of training hours in a normal year.
Digital learning
The consistent digitalisation of learning in recent years has created the ideal basis for being able to
respond quickly and efficiently to the new challenges presented by the coronavirus. The Learning
Management System (LMS), which went online at the start of 2020, laid the foundations for digital
learning formats and created a platform for virtual training and continuing education. Digital
continuing education formats have already been offered before now in the form of e-training courses.
Employees were already familiar with digital learning, which made the transition easier. Numerous e-
training courses were added during the COVID-19 crisis, which were available to employees free of
charge. There were also own productions on VERBUND-specific topics and new offerings, as well as
acquisitions and cooperations with various providers. This expanded the portfolio to include topics
such as personal development, software programmes and digitalisation.
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Numerous events that would have been attended in person were also held virtually as webinars.
Regardless of whether it is new software that is being introduced, a team workshop or a health topic,
VERBUND can design and host a webinar on it. The great advantage of this is that it is possible to
prepare content and make it available to employees a lot faster (than is the case for classroom training).
In addition, during the “COVID-free period” (period when measures were relaxed) a number of face-to-
face events were held again in compliance with strict safety requirements. The main focus at these
events was to protect our employees.
The new framework requires a variety of new methods. Therefore, even more formats of content
delivery are available, and these are also continuously growing. Comic-style explanatory videos were
increasingly used here to explain complex content. In addition, acquisitions were made that include the
compilation of reference books and give employees the opportunity to listen to these via podcasts.
The onboarding of new employees was mainly accomplished via virtual workshops in 2021, due to the
COVID situation. During the “COVID-free period” the onboarding workshop was also conducted in
person and a number of power plant tours for the new employees were possible in the summer months.
The global COVID-19 pandemic likewise restricted personnel development, executives and
employees in their daily lives in 2021 and presented them with new challenges. As a company
VERBUND found new ways to do things. The people within the Group grew together on both a personal
and a professional level during this time and are well prepared to face the challenges ahead.
Apprenticeship training
Particularly in times of crisis, one of our core tasks is the safe operation and continuous maintenance of
VERBUND’s plants. In order to optimally manage the ongoing generational shift in power plant
operations, VERBUND has trained new apprentices every year since 1983. Apprentices at VERBUND
learn two professions at once – electrical engineering and metalworking – over a period of four years,
with excellent prospects for the future. The high quality of our apprenticeship training is most evident in
the outstanding achievements seen in the final apprenticeship examinations.
The apprenticeship at VERBUND is as attractive to girls as it is to boys, which is reflected by the fact
that it has once again received the amaZone Award for outstanding performance in training girls and
women in technology. Every year, the best businesses demonstrate that women apprentices are an
enrichment to every workplace and embracing their presence wholeheartedly can serve the common
good. This sets an example of modern, innovative worlds of work beyond traditional gender stereotypes.
To give the young people an even more emotive and more authentic insight into the working
environment of VERBUND’s power plants, the employer positioning was redefined together with the
apprentices and a new campaign was developed under the slogan #lead (ing) the way. A strong sense of
identification, pride and loyalty was achieved within the Group through the intensive involvement of
various sites and the employees in the development of employer values, as well as regional job stories
and content production. The campaign includes advertising materials, such as flyers, posters and social
media posts as well as site-specific landing pages.
Further development of the corporate culture
Employee survey – Great Place to Work
Great Place to Work has been recognising the best employers for 30 years. In 2020, VERBUND
participated for the first time in the company-wide Trust Index© employee survey run by the
organisation Great Place to Work®. The Trust Index© employee survey provides a comprehensive site
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assessment of the perceived quality and attractiveness of the workplace culture. Around 74% of the
workforce answered a variety of questions on the subjects of credibility, respect, fairness, pride, team
spirit and trust and classified VERBUND as a consistently good and attractive employer.
Another Culture Audit© was also conducted at the start of the year. This involved answering open
questions on all relevant aspects of human resources and cultural work that make up a successful
workplace culture.
In the Culture Audit© these human resources measures and programmes were evaluated in
comparison with the best employers from the current benchmark study. In its analysis of the human
resources tools used, Great Place to Work® identified nine areas that distinguish the best employers from
other employers in respect of their human resources work: Hiring/integrating, Celebrating/team
activities, Sharing, Inspiring (targets/strategy/values), Speaking, Listening, Thanking, Developing,
Caring.
The cultural evaluation conducted by the Culture Audit© shows that VERBUND’s human resources
and cultural work encompasses a large number of high-quality programmes and measures and that
VERBUND has an employee-focused workplace culture. The personnel measures taken by VERBUND in
the above areas were rated as above average in comparison with all companies that participated in the
benchmark study.
The only area in which VERBUND was rated below average compared with the other benchmark
study participants was in recognising special achievements of employees. In the areas of developing,
caring and team spirit, VERBUND was even ranked well above the average of the best employers.
If the Culture Audit© rating is directly contrasted with the results of the employee survey, this provides
an indication that the personnel measures are only partly perceived by the employees in their day-to-
day lives. These measures need to be communicated better and the relevant processes need to be made
more transparent.
Awards
Thanks to the high level of participation in the survey and the thoroughly positive assessment by
employees as well as the positive cultural evaluation by the Culture Audit©, VERBUND was certified this
year as a “Great Place to Work”. In addition, VERBUND placed 7th in the X-Large category of the GREAT
40, making it one of “Austria’s Best Employers 2021”, and is also on the list of Best Workplaces in Europe™
2021, holding 40th place in the Large category.
Competency model
Shaping the future at VERBUND also means shaping a future of competency. VERBUND is addressing
this issue with its fundamentally redefined competency model. The competency model provides the
framework for a large number of personnel development processes. VERBUND has therefore made it its
mission to anchor several innovations at the same time in order to make employees at VERBUND fit for
the future. Five areas of competency and a total of 30 competencies show what is important in
cooperation at VERBUND.
The strategic focus in personnel development is strengthened by the implementation and stringent
application of the competency model in the various processes relating to personnel development and
personnel work. Under the new name “competency check”, the new competencies are now also
included in the performance review. Furthermore, all processes are being updated and adapted to the
new competency model, for example the documents for the performance review, the inclusion of the
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competency areas in the selection decision for internal and external audit procedures, as well as initial
adjustments to the 270-degree feedback process. Targeted competency development is also taken into
consideration in the creation of the management development programme.
Maintaining a work-life balance
VERBUND places great emphasis on maintaining a work-life balance at all times. VERBUND has been
doing the “berufundfamilie” audit (Work and Family Audit) since 2009, receiving its fourth certification
in 2021. Particularly during the COVID-19 pandemic, flexible working is a high priority. The conclusion
of the new works agreement on home office and mobile working laid a good foundation for these forms
of working. Many other measures to achieve a better work-life balance were planned or implemented as
part of the Group-wide Gender Balance project (see Gender Balance). VERBUND has set itself a number
of objectives for the next audit cycle, including to further improve the communication about services
and offers, to take a closer look at the topic of caring for relatives, and to continue to promote the flexible
working culture.
Diversity management
VERBUND considers diversity management both holistically and in individual dimensions and takes
both aspects into account. The diversity strategy defined in 2016 was endorsed in 2018 with the
ZukunftVIELFALT® certification and in 2019 with the implementation of planned measures placing
particular emphasis on the dimensions of age, gender and disability. The focus from 2020 to 2021 was
on gender balance. However, since diversity can by no means be reduced to gender, the focus was
turned in autumn 2021 to another sub-sector of diversity management: people with disabilities. It is not
just the social responsibility that VERBUND clearly sees as a company that is crucial here, but above all
the firm conviction that diversity makes VERBUND more successful and more resilient. VERBUND aims
to support this by making VERBUND more accessible (for more details please refer to the accessibility
management content) and creating more incentives for people with disabilities employed by VERBUND.
The aim of this is to expand the circle of diversity bit by bit and to give a better reflection of the reality
of our society, because as a company VERBUND in no way wants to neglect the success factors of
diversity and inclusion. VERBUND therefore renewed its ZukunftVIELFALT® certification in 2021. The
individual dimensions of diversity were examined in a Group-wide process, focal points were set and
new objectives were agreed in line with current priority areas. This also solidified the next goal referred
to above – namely, to employ more people with disabilities at VERBUND over the next three years. In
addition, executives continue to be set diversity targets so as to ensure continuous implementation.
Communication on the other dimensions of diversity management is also being developed further.
Focus on gender
Although the proportion of women in a technology-focused company like VERBUND is traditionally low,
VERBUND has been advocating for more gender balance in recent years and has been successful in this
endeavour. The development of the KPIs showed only a small increase in the percentage of women in
the various divisions, however. The Executive Board thus resolved to assign this topic strategic relevance
and engaged renowned consulting firm Beekhuis Performance Culture to start the Gender Balance
project in 2020.
A change in the corporate culture can only be achieved by developing different approaches.
Specifically, several working groups developed measures on key issues for the entire Group in 2021.
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A clear objective and the stipulation of results criteria ensured efficient implementation. The following
key focus areas have already been implemented: fixed quotas for new hires; projects and committees;
expansion of flexibility with respect to working hours and home office; increased communication on job
vacancies, tools and internal processes; webinars for executives and employees; new gender rules that
include all genders. By firmly anchoring these main focus areas, VERBUND aims to bring about a lasting
change in the corporate culture and thus appeal to people of different talents in the labour market. This
will ensure recruitment of qualified personnel in the long term.
Focus on people with disabilities
VERBUND assumes its social responsibility to offer equal opportunities and has set itself the goal of
continuing to fulfil the quotas stipulated in the Austrian Disabled Persons Employment Act
(Behinderteneinstellungssgesetz, BEinstG) and to recruit and employ people with disabilities even
beyond that. Together with the accessibility management programme, the diversity management
programme continually works towards improving the employment of people with disabilities.
VERBUND meets the statutory quotas stipulated for the employment of people with disabilities. For
VERBUND, the mandatory quota is 144. As at 31 December 2021, VERBUND employed 149 people who
qualify. However, as a further decline is expected in the next few years due to numerous retirements, the
focus in 2022 is to be entirely on people with disabilities – existing employees are to be sensitised and
informed and new talent is to be recruited.
For further information on the topic of accessibility, please refer to the section entitled Occupational
health and safety.
Focus on age
VERBUND strives to achieve a balanced age structure. The objectives in managing the demographic
change are keeping knowledge in the Group and maintaining the loyalty of VERBUND’s top performers.
The demographic trend observed for many years continued during the reporting period. Around 7%
of VERBUND employees will retire in the next five years. Over the next ten years, around 21% will retire.
It remains important to VERBUND to manage the generation change well and thus retain and expand
the knowledge within the Group. As part of its strategic personnel planning, VERBUND identified the
most critical areas in 2021 and defined coverage strategies for these areas. To this end, quantitative and
qualitative needs for change were considered and specific measures were derived, the majority of which
are already being implemented.
In order to keep employees healthier for longer in the work process, the health management team at
VERBUND is being expanded further. For more information on this, please refer to the section entitled
Occupational health and safety.
Occupational health and safety
Healthy and motivated employees are very important to the Group’s success. Occupational health and
safety are therefore also key pillars of VERBUND. Work-related injuries, occupational diseases and work-
related illnesses are counteracted with targeted measures to protect employees. VERBUND applies high
occupational health and safety standards to protect its own employees and staff employed by external
contractors. In addition to complying with the prevailing legal requirements and obligations, high
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priority is given to providing safe and healthy working conditions, eliminating hazards, and mitigating
risks.
Health protection during the COVID-19 pandemic
In accordance with VERBUND’s protection targets formulated in connection with its continuity,
contingency and crisis management plans, protecting the health of employees during the COVID-19
pandemic has utmost priority.
Along with the regulations based on prevailing legal requirements, additional, appropriate protective
measures were also defined in accordance with the principles of hazard prevention so as to reduce the
risk of infection from COVID-19. When being defined, the protective measures were ranked by order of
importance based on the STOP principle. The hazards are countered by substitution or risk avoidance,
as well as by technical, organisational and personal measures. In addition to preventing contact among
staff by staggering shifts, splitting teams and having staff work remotely where possible, installing
Plexiglas partitions and ensuring compliance with social distancing rules and hygiene measures,
VERBUND also required staff to wear personal protective equipment such as mouth and nose coverings
or filter masks, safety glasses or goggles, disposable gloves and hazmat suits (which the Group provided
to employees). The topic of antigen and PCR tests was drafted in the form of a test strategy. Antigen and
PCR tests are carried out on an ongoing basis depending on the situation.
Regulations were put in place for the most important work situations (such as business trips,
attending or hosting events, working on construction sites), and appropriate protection plans were
developed for larger, busier sites and continuously adapted to the prevailing situation. The respective
regulations and protective measures were also applicable to any external contractors working at
VERBUND sites.
To prevent infection and the further spread of the virus, a comprehensive testing strategy was also
developed in collaboration with the occupational health service, with various test procedures such as
swab tests in testing lanes and screening tests through to personal saliva tests. These COVID-19 rapid
antigen tests have been carried out at VERBUND since November 2020 as a support measure to mitigate
risks. Key cornerstones in the fight against the pandemic in 2021 were as follows: the offer and
administration of company COVID-19 vaccinations (two-dose basic immunisation and third booster
vaccination) as well as testing for neutralising antibodies. The focus of the free vaccination campaign for
employees in 2020 was on flu and pneumococcal vaccinations to protect against additional infections.
Accidents in 2021
The calculation of occupational safety KPIs is based on the number of VERBUND employees under
labour law, including employees in partial retirement, temporary staff and all employees of
proportionately consolidated equity interests, regardless of the type of consolidation over which
VERBUND exercises a controlling influence. On this basis for calculation, VERBUND had
3,801 employees at the end of 2021. This figure included 176 temporary workers, 173 semi-retired
employees as well as the entire workforces of Ennskraftwerke Aktiengesellschaft, VUM Verfahren
Umwelt Management GmbH, VERBUND Tourismus GmbH, Lestin & Co. Tauch-, Bergungs- und
Sprengunternehmen Gesellschaft m.b.H, Energji Ashta Shpk and the newly consolidated companies
Gas Connect Austria GmbH and SMATRICS GmbH & Co KG. All employees are covered by appropriate
management systems for health and safety; 25% thereof are employees who work at companies with an
externally certified management system in accordance with ISO 45001.
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LTIF is used as an international KPI. This enables a comparison with national and international
companies. To allow the use of external contractors to be evaluated as well, VERBUND has also tracked
their hours worked at all work sites since 2018 and reports the number of accidents in the “Lost time
injury frequency/LTIF (external contractors)” KPI.
Thus, the number of accidents among our own staff continued on a positive trend in 2021. The
accident rate remained constant compared with 2020, in spite of an increasing number of projects. In
terms of accident severity, values also fell significantly compared with 2020.
The rapidly increasing number of projects with a greater risk of accidents, such as efficiency
improvement programmes and new power plant construction, was highly noticeable from an increase
in the LTIF at external contractors, however. In order to be able to properly interpret the number of
accidents, absolute accident figures must be considered in relation to the number of employees and lost
days per accident. The accident frequency and injury severity can then be derived from this. VERBUND
engages external contractors for clearly defined construction, overhaul and maintenance contracts in
particular. The employees at these firms are subject to the same safety regulations as VERBUND
personnel. These persons therefore receive the same safety briefings. Contractors awarded work related
to the construction of plants are responsible for managing their own work. However, they are also
required to comply with the safety standards prescribed by VERBUND and are briefed in accordance
with VERBUND’s rules.
In comparison with other electric utilities in Austria, the total accident frequency of 6.8 (LTIF
including external contractors) in 2021 indicates that VERBUND remains on the right track. The
medium-term corporate goal is an LTIF ≤ 5. Improvement measures are identified and implemented
based on the analysis of accidents within the Group and involving external contractors. As in previous
years, neither third-party fault nor organisational shortcomings were identified as the cause of any work-
related injuries in 2021. This shows that safety standards within the Group are very high and that
safeguards for employees are being implemented as best possible.
Serious injuries are counted as those injuries from which employees cannot recover within six months
to the extent that their state of health prior to the injury is regained. These include, for example,
complicated fractures right through to limb amputations. The following were identified at VERBUND as
general work-related hazards with risks that could have very serious consequences or cause irreversible
damage to health or result in death: hazardous work materials, atmospheres with oxygen deficiency,
falls on level ground and from heights, electrocution and work on live parts, drowning, cut injuries from
hand-held chainsaws, high-pressure jets, harmful noise and mechanical injuries. The most frequent
causes of injury in serious accidents in recent years were trapping and crushing, falls on level ground,
falls and falling objects. There were no workplace accidents resulting in serious injury in financial
year 2021. In the reporting period, there were also 13 accidents involving VERBUND personnel on the
way to or from work – one of which was a serious motorbike accident – as well as one commuting
accident involving external staff.
The risks to the health and safety of employees are identified and assessed as part of the workplace
evaluation. Based on this evaluation, measures are defined to prevent hazards and then the
implementation of these measures and their effectiveness is monitored. A review and, if necessary, an
adjustment of the evaluation shall take place if there are any changes in circumstances, but also after
accidents at work in particular. Employees are briefed accordingly about frequently occurring accident
risks.
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Accident prevention
Preventive measures are based on the analyses of work-related injury statistics at VERBUND. As in 2020,
the annual continuing education measures for 2021 were heavily influenced by COVID-19. The planned
focus topic “Working on the water” was partially implemented depending on the region and partly
postponed until 2021.
Every year, as was the case in financial year 2021, legally mandated safety briefings are successfully
completed by close to 100% of the workforce, either in person or via an e-learning programme that
includes a final test. COVID-19 likewise posed a considerable challenge for the individual events with
respect to briefings. The maximum permitted number of participants had to be continuously adjusted in
line with the current COVID-19 case numbers. Some of the briefings were also held as video conferences.
In the area of occupational safety, VERBUND has a large number of internal and national regulations
in place that are continually updated and promptly amended as soon as changes in the law come into
effect. These regulations relate to the following topics, for example: management of working materials,
accident reporting and behaviour after an accident occurs, briefings and instruction, fire safety,
personal protective equipment, coordination on construction sites and in projects and dealing with
external contractors, occupational health and safety documentation as well as coordination and
responsibilities of the occupational health service. These regulations are intended to guarantee that the
same standards are available and applied throughout the Group.
Safety culture
Occupational health and safety has reached a high technical level at VERBUND thanks to the great
efforts made and extensive measures implemented in recent years. The accident KPIs for the last five
years until 2017 stagnated at an average LTIF value of ten. This figure was reduced significantly to below
seven when the “We Live Safety” project was launched. The aim of this project, in addition to protection
of technical workers, is to invest in the further development of behaviour-based occupational safety.
Besides numerous workshops for executives, 36 safety coaches from all areas were trained, who have
the task of conveying to their colleagues the idea of behaviour-based occupational safety as well as the
importance of setting a good example.
This project has been continued as a permanent project since 2020. In addition to ongoing activities,
core areas are increased safety communication, installation and use of a wide range of tools, such as a
near miss database, safety walks by executives, the introduction of a safety award, a calendar of
occupational safety issues for 2022, a sub-project entitled “five minutes for safety” or the new regulation
for the evaluation of workplace accidents, and much more.
Promoting health among employees
The “Fit and Healthy at VERBUND” initiative is designed to promote a healthy lifestyle among
employees. On the one hand, the aim is to increase general health awareness, while, on the other hand,
specific measures are offered that enable everyone to become proactive about their own health. Ideally,
these are free offers which employees can take advantage of directly at their workplace.
As in the previous year, another focus in 2021 was on medical check-ups. Together with a preventive
medicine association, health roads consisting of a cardiovascular check-up, a physical check-up and a
nutrition check were offered during working hours directly at external site locations in the federal
provinces of Lower Austria and Carinthia. Another focus was mental health, as stress awareness and
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resilience are important, particularly during a pandemic. In cooperation with the training department,
various webinars on the subject of mental health were offered to executives and employees.
Due to the COVID-19 pandemic, fitness programmes were only offered in an online format. A diverse
range of online training sessions were held, including bodyweight exercises and spinal gymnastics, with
video recordings for later use. The online offering was also expanded to include webinars on the subject
of healthy eating, online visual training sessions and face-to-face workshops on correct lifting and
carrying.
A new introduction in 2021 was an app-based motivation platform, which was used to run regular
challenges to promote movement and health and to raise awareness for various sustainability issues.
VERBUND participated in the Companies Challenge Austria 2021 via this platform, where minutes of
exercise had to be collected, and took third place.
Accessibility
Breaking down barriers is an important aspect for the inclusion of people with disabilities. The
accessibility management programme at VERBUND addresses the three main topics of structural
accessibility, digital accessibility and everyday accessibility in the mind.
In addition, recommendations for accessible building at VERBUND, including an overview of the
legal foundations and standards, as well as instructions for implementing structural accessibility beyond
legal requirements were published internally in 2021.
The establishment of a Digital Accessibility Team (DAT) made accessible information and
communication technologies another focal area in 2021. The aim of the exchange and cooperation
between different specialist departments in the Digital Accessibility Team is to build appropriate
expertise, identify needs for improvement, assist with the implementation and develop Group-wide
standards.
There was also the annual Purple Light Up Day, the international day raising awareness for people
with disabilities, which was held on 3 December 2021. On this day, parts of VERBUND’s corporate
headquarters at “Am Hof” in Vienna and the Nußdorf joint power plant in Vienna were lit up purple in
support of the global campaign and as a visible sign of the inclusion of people with disabilities. For
further information on the focus on people with disabilities, please refer to the Human resources section.
Human rights
VERBUND is aware of its responsibility to protect human rights in all Group divisions and in any other
areas within its sphere of influence. This holistic responsibility is defined in the internal guideline on
respect for human rights. As a result, VERBUND respects all types of civil, political, economic, social and
cultural rights. VERBUND also considers human rights to include adherence to laws and standards
pertaining to the environment, occupational safety, health and compliance. Information on the topic of
human rights can therefore also be found in other sections of this Integrated Annual Report.
All executives and all employees at VERBUND are responsible for respecting human rights and
reporting any violations to the Chief Compliance Officer. One case of suspected discrimination was
reported in 2021. Any significant incidents of environmental pollution and severe deficiencies in
occupational health and safety must be reported to the head of the Corporate Responsibility department.
There were no such reports in 2021.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 385
Human rights at VERBUND
VERBUND is committed to ensuring due diligence in the protection of human rights in all Group
divisions. To this end, VERBUND provides safe and healthy working conditions and relies on preventive
measures to minimise hazards and risks in the work environment. Forced and compulsory labour, and
child labour in particular, are forbidden.
Under freedom of association and collective bargaining, employees can communicate openly about
working conditions and have the right to join a union. They earn wages and salaries that allow them and
their families to have a dignified life. VERBUND rejects any form of discrimination, bullying and sexual
harassment and works with all people regardless of gender, age, disability, religious beliefs, culture, skin
colour, education, social background, sexual orientation or nationality. For VERBUND, protection of the
environment is also an important part of human rights. Human rights that are at risk from damage to the
environment include the right to a reasonable standard of living and the right to health.
Human rights in VERBUND’s sphere of influence
Even in its cooperation with business partners and within its supply chain, VERBUND is concerned with
the protection of all human rights. Human rights are therefore an important aspect of the Supplier Code
of Conduct. However, due to VERBUND’s activities in some regions, challenges can arise in the area of
human rights. Special attention is required in the event of conflicts, political instability, failure of the rule
of law and lack of civil rights. In an environment of corrupt structures, extreme poverty, natural disasters
or proximity to vulnerable groups, extreme caution must be exercised in entering into or maintaining
business relationships with customers or suppliers. To ensure this, VERBUND carries out business
partner integrity checks prior to commencing cooperation in projects, supplier discussions and regular
hot spot analyses within the supply chain, among other things.
Please refer to the 2021 Group Integrated Annual Report (NFI Report) for further information as well as
additional details on employees, occupational health and safety and human rights.
386
Opportunity and risk management
The risk management system in place at VERBUND is based on international standards such as COSO II
and ISO 31000. VERBUND’s risk management system is structured to ensure comprehensive coverage of
potential areas of risk and opportunity, while uniform, Group-wide principles form the basis for
standardised treatment of risks and opportunities.
Due in particular to the energy transition, which poses challenges for the energy industry as a whole,
both processes and products of the Group-wide risk management system are regularly adapted to
changes in internal and external requirements. Each year, VERBUND’s auditor reviews and confirms the
effectiveness and maturity level of the Enterprise Risk Management based on the recommendations
contained in the ISO 31000 reference model.
Further development
In financial year 2021, VERBUND’s risk management activities focused, among other things, on further
developing the risk-return approach for the Group (mainly in connection with planned projects and
investments) and the multi-year risk horizon for risk inherent in current business operations, as well as
on identifying and evaluating strategic risks and expanding the risk-bearing capacity concept. A stress
test analysis was also introduced, which in future will be carried out once a year or as required. Our risk
reporting processes have also been revised and expanded as part of this process.
Under this approach, VERBUND’s risk management agendas currently extend to activities aimed at
supporting strategic decision-making processes as well as to project management and the management
of current operations.
Current opportunities and risks 2021
The material drivers of opportunities and risks in the 2021 financial year are in the following risk
categories: volume risk, price risk, project risk, financial risk and operational risk.
Volume opportunities/volume risks
VERBUND’s plants are highly exposed to weather events which cannot be influenced. This is
particularly true for VERBUND’s hydropower plants and wind and solar farms as well as APG’s high-
voltage lines.
Hydropower generation is subject to the seasonally fluctuating water supply of the catchment areas.
Options to compensate for these effects by means of the (annual) storage power plants of VERBUND
Hydro Power (VHP) are very limited. Little rainfall and a resulting poor water supply characterised
quarter 4/2021 in particular. As a result, the generation volume was below the long-term average in the
months of October to December 2021. Throughout all of 2021, generation from wind power was also
below the long-term average due to the low wind supply.
Over the long term, changes in the climate can have a lasting effect on the water/wind supply and
photovoltaic output, which may cause greater seasonal or annual deviations in generation to occur in
the future. In order to counter this trend and to diversify potential risks, VERBUND relies on maintaining
the value of existing hydropower plants and expanding promising new ones in tandem with increasing
generation from wind and solar farms.
Report on significant risks and
uncertainties
ANNUAL FINANCIAL REPORT – PARENT COMPANY 387
Electricity price opportunities/electricity price risks
In addition to the risks of fluctuations in output, electricity price trends also represent a significant risk
and opportunity factor for VERBUND. In order to reduce the risk potential, long-term agreements were
entered into with customers in some cases. However, changing conditions can influence the profitability
of some of these agreements, particularly in the long term, and necessitate adaptations.
Electricity prices generally rose in 2021, while a significant increase in volatility was observable on the
electricity markets particularly in the second half of the year. Higher electricity prices more than offset
the negative effects of lower generation volumes.
In addition to other factors, rising carbon prices had a significant effect on electricity prices in
financial year 2021. Around 96% of VERBUND’s output was generated from carbon-free renewable
energy sources which are thus not part of the European Union’s Emissions Trading System (ETS).
Accordingly, rising/falling ETS prices also have a positive/negative impact on VERBUND’s financial
performance.
Project opportunities/project risks
The ongoing construction boom, scarcity of raw materials, supply chain problems and inflation resulted
in price increases in 2021, which for VERBUND also meant rising costs for various construction projects.
Previously concluded fixed price contracts provided a partial buffer to these negative effects. Supply
chain problems also caused delays in the implementation of various other projects, such as in the area
of IT infrastructure.
Financial opportunities/financial risks
Expiring government support measures related to COVID-19, other measures aimed at containing the
pandemic such as lockdowns and restrictions, and higher prices for consumer goods and energy
resulted in a slight increase in the default and counterparty risk in 2021. In order to minimise the risk
potential, VERBUND relies on an established system of credit limits and a strict scoring of business
partners based on a system for evaluating credit ratings and regular monitoring of credit risk.
Operational opportunities/operational risks
In many sectors and areas, the COVID-19 crisis resulted in a shift to increased remote working
arrangements. Cyber criminals are increasingly attempting to capitalise on this situation, which also
raised this potential threat in 2021. VERBUND responds to the heightened challenges (mainly from the
perspective of critical infrastructure) by continually improving the existing security mechanisms.
VERBUND counteracts risks from cyber space by implementing preventive security strategies, internal
projects to increase the security of IT systems and IT infrastructure, as well as internal guidelines and
correspondingly defined and secured processes.
Strategic opportunities and risks
Climate change, changes in the legal environment, technological developments and changes in the
market environment can have a major impact on a company’s business model and strategy (as
described above to some extent). Close examination of medium- and long-term strategic risks at an
early stage is therefore important to ensure successful continuation of the direction in which the Group
is moving. The relevant strategic risks at VERBUND are therefore continuously identified and assessed.
388
This proactive management of long-term risks allows their effects on the Group to be limited
accordingly and opportunities for additional growth to be consciously exploited.
Risk-bearing capacity
One success factor is secure access to the capital market. The concept for the risk-bearing capacity is
focused on two areas: on one hand, identifying the effects of organic and inorganic projects on the
Group’s credit rating and, on the other hand, determining whether future medium- to long-term
scenarios jeopardise the Group’s target credit rating.
Financial instruments
Primary financial instruments include, in particular, investments such as securities, loans and equity
interests, trade receivables, cash at banks, securitised and non-securitised financial liabilities and trade
payables.
Derivative financial instruments serve exclusively as hedges against existing currency and interest rate
risks. The fluctuations in value of these hedging instruments are balanced out by the fluctuations in
value of the hedged items. The change in value of those transactions to which hedge accounting is not
applied is always recognised in profit or loss.
Additional information on the accounting treatment and measurement of financial instruments can
be found in Section IV (2) of the notes.
Please refer to the 2021 Group Integrated Annual Report for further information as well as additional
details on significant risks and opportunities as well as measures.
As at 17 February 2022, no risks were foreseeable for 2022, the effects of which – either individually or in
interaction with other risks – could pose a threat to the continued existence of VERBUND AG.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 389
There were no branch offices in the financial year under review.
Report on branch offices
390
Internal control and risk management system
In accordance with Section 243a(2) of the Austrian Commercial Code (UGB), the internal control and
risk management systems for the accounting process must be described. VERBUND’s internal control
system includes all measures for ensuring the reliability, effectiveness and profitability of this process, as
well as compliance with external regulations. The structure of the risk management system is explained
in detail in the Disclosures on Management Approach (DMA) and the risk position in the section of the
VERBUND Integrated Annual Report 2021 entitled Opportunity and risk management.
Organisational framework
VERBUND’s Group management acts in accordance with the principles defined in the corporate
philosophy. The Executive Board bears responsibility for developing and implementing the entire
internal control and risk management system. The Supervisory Board’s Audit Committee monitors its
effectiveness.
Basic principles of the internal control and risk management system
VERBUND’s extensive financial reporting process is governed by Group-wide guidelines and
requirements. The performance, monitoring and supervision of business transactions are segregated
from each other. This ensures that no single employee can act alone in performing all the process steps
of a transaction from beginning to end. A review of authorisations is integrated into the process for
technical processing of transactions. Compliance with and the effectiveness of these checks is reviewed
on a periodic basis. Based on VERBUND’s process map, business processes and the risks they entail are
systematically analysed and documented, as are checks of the financial reporting process. The
operational structure, the process map and the checks are documented regularly in ARIS (the process
modelling tool) and published on the intranet (including risk control matrix). VERBUND’s
organisational structure is continually adapted to address changing internal and external conditions.
Reporting in compliance with unbundling provisions
VERBUND’s quarterly reports and the VERBUND integrated annual report consolidate information
from the management accounting, corporate accounting, financial management and risk management
functions as well as from the area of corporate responsibility. All reports are based on uniform Group-
wide rules for preparation and measurement. The liberalised European energy market requires an
unbundling of the grid from the generation, trading and sales of formerly integrated electric utilities.
VERBUND subsidiary Austrian Power Grid (APG) has therefore been operating in the electricity market
since 2012 as an independent transmission system operator. An external equal treatment officer
monitors compliance with the unbundling provisions specified in the contract. VERBUND AG acquired
a 51% stake in Gas Connect Austria GmbH (GCA) effective 31 May 2021. VERBUND subsidiary GCA
performs the duties of an independent transmission system operator in the gas market and continues to
be subject to the statutory unbundling provisions. Compliance is monitored by an external equal
treatment officer.
Internal control and risk
management system
in accordance with Section 243a(2) of the Austrian Commercial Code (UGB)
ANNUAL FINANCIAL REPORT – PARENT COMPANY 391
Periodic monitoring
Internal Audit reviews the handling of business processes and the internal control and risk management
system. The individual audits are performed according to the audit schedule approved by the
VERBUND Executive Board and are supplemented by special audits. The audit reports include
recommendations and measures. A periodic follow-up ensures implementation of the proposed
improvements. APG, as an independent transmission system operator for electricity, and GCA, as an
independent transmission system operator for gas, have each had their own internal audit function
since March 2012 and February 2012, respectively.
392
1. At the reporting date of 31 December 2021, the called and paid-in share capital of VERBUND AG
comprised:
170,233,686 no-par value shares (bearer shares category A), equivalent to 49% of share capital; and
177,182,000 no-par value shares (registered shares category B), equivalent to 51% of share capital,
authenticated by an interim certificate deposited with the Federal Ministry of Finance and made out
in the name of the Republic of Austria. There were 347,415,686 shares in circulation at the reporting
date. With the exception of the voting restriction described under point 2, all shares bear the same
rights and obligations.
2. In accordance with constitutional law, which regulates the ownership structure of companies in the
Austrian electricity sector (Federal Law Gazette I (BGBl) 1998/143(2)) and also forms the basis for the
Company’s Articles of Association, the following voting restriction applies: “With the exception of
regional authorities and companies in which regional authorities hold an interest of at least 51%, the
voting rights of each shareholder at the Annual General Meeting are restricted to 5% of the share
capital.” VERBUND AG is unaware of any other restrictions that affect voting rights or the transfer of
shares.
3. The shareholder structure of VERBUND AG is largely defined by the majority holding of the Republic
of Austria. In accordance with constitutional law, 51% of the share capital is owned by the Republic of
Austria. A syndicate of the state energy companies Wiener Stadtwerke GmbH and EVN AG owns more
than 25% of the share capital. More than 5% of the share capital is owned by TIWAG-Tiroler
Wasserkraft AG. Less than 20% of the share capital is in free float.
4. There are no shares with special control rights.
5. VERBUND does not offer any employee participation programmes.
6. In accordance with the rules of procedure for the Supervisory Board, the last nomination to the
Executive Board must be prior to the nominee’s 65th birthday. Pursuant to the Austrian Code of
Corporate Governance (ÖCGK), a Nomination Committee has been established within the
Supervisory Board and prepares the content for the appointment of Executive Board members on
behalf of the entire Supervisory Board. VERBUND AG complies with the rules of the Code with
respect to the appointment and dismissal of the members of the Executive Board and the Supervisory
Board. Apart from the above, there are no other regulations not derived directly from law that relate to
the members of the Executive Board and the Supervisory Board, or to the amendment of the Articles
of Association.
Shareholder structure and capital
information
in accordance with Section 243a(1) of the Austrian Commercial Code (UGB)
ANNUAL FINANCIAL REPORT – PARENT COMPANY 393
7. There are no authorisations of the Executive Board within the meaning of Section 243a(1)(7) of the
Austrian Commercial Code (UGB).
8. The Company is also not involved in any significant agreements that contain provisions referring to
the stipulations under Section 243a(1)(8) of the Austrian Commercial Code (UGB). Furthermore, a
public takeover bid is improbable under constitutional law.
9. There are no compensation agreements within the meaning of Section 243a(1)(9) of the Austrian
Commercial Code (UGB).
The Consolidated Corporate Governance Report, which is included in the VERBUND Integrated Annual
Report 2021, is available on the VERBUND website.
394
Outlook
According to the International Monetary Fund (IMF), the global economy showed a strong recovery
in 2021 with growth of around 5.9% despite the ongoing COVID-19 pandemic. The IMF likewise
forecasts strong growth for 2022 of 4.4%, which is also significantly above the growth rates for 2018 and
2019. Because of the difficulty of forecasting the further progression of the pandemic and the challenges
from supply chain problems combined with high commodity prices and the associated higher inflation
rates, these strong growth rates are also to be considered with a high degree of uncertainty.
In 2021, the economy (+4.1%) and the labour market recovered significantly in Austria as well, and the
Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO)
expects even stronger growth in 2022 at +5.2%, although the uncertainty referenced above applies here,
too.
Along with the economic recovery and slower growth in supplies, commodity prices rose significantly.
This particularly impacted the price of gas with an increase of +390% over the previous year. Average
carbon prices for 2021 doubled compared with the previous year due to the EU’s more stringent climate
targets, the economic recovery and higher carbon emissions as a result of the sharp rise in coal-fired
electricity generation. These trends were reflected in significant price increases on both the spot and
futures markets.
The planned expansion of volatile new renewables generation is making VERBUND’s generation
portfolio in the core markets more significant. Base load power plants (run-of-river hydropower),
flexibly accessible storage and pumped storage power plants and a highly efficient combined cycle gas
turbine power plant (Mellach CCGT), which serves as a bridge technology for maintaining domestic
security of supply, are helping to make it possible to expand new renewables and to support the target of
100% renewable energy by 2030. VERBUND also plays a role in achieving the target of carbon-free
electricity generation through organic and inorganic growth in new renewables in new markets. APG,
VERBUND’s wholly owned subsidiary, owns and operates the transmission network in Austria and
therefore plays a major role in connection with grid security in Austria and in the European electricity
network. Gas Connect Austria GmbH (GCA), in which VERBUND has held a 51% stake since
31 May 2021, is an independent Austrian gas transmission and distribution system operator and, as such,
plays a key role in the Austrian and Central European energy supply. As an integrated energy company,
VERBUND’s innovative products and services provide consumers with solutions for the future of energy.
Investment plan 2022–2024
VERBUND’s updated investment plan for the period 2022–2024 provides for capital expenditure in the
amount of €3,059m. Of that total, around €2,075m will be spent on growth CAPEX and around €985m on
maintenance CAPEX. Most of the growth CAPEX (approximately €831m) will go towards expanding the
regulated Austrian high-voltage grid. In addition, VERBUND will be investing mainly in projects related
to new renewables, in selected hydropower plant projects as well as in increasing the efficiency of
existing power plants. The investments will mostly involve VERBUND’s domestic markets of Austria and
Germany. In financial year 2022, VERBUND plans to invest a total of approximately €877m, around
€507m of which will be invested in growth and around €370m in maintenance.
Report on the expected performance
of the Company
ANNUAL FINANCIAL REPORT – PARENT COMPANY 395
Dividend
VERBUND plans to distribute a dividend of €1.05 per share for financial year 2021. The payout ratio for
2021 will thus amount to 45.7% based on the adjusted Group result.
Earnings projection for 2022
VERBUND’s earnings performance is significantly influenced by the following factors: wholesale prices
for electricity, the Group’s own generation from hydropower and wind power, the contribution to
earnings from flexibility products and ongoing developments in the energy market. Around 69% of the
planned own generation for 2022 was already contracted as at 31 December 2021. The price obtained for
this was approximately €24.2/MWh above the sales price achieved in 2021.
Given the still precarious COVID-19 situation in many countries, geopolitical uncertainties and high
volatility in the key factors influencing VERBUND’s results, the outlook remains highly uncertain.
Based on the forecast at the beginning of the year, VERBUND AG expects clearly positive earnings
before taxes for financial year 2021.
Vienna, 17 February 2022
Executive Board
Mag. Dr. Michael Strugl
Chairman of the
Executive Board
Dr. Peter F. Kollmann
Member of the
Executive Board
Mag. Dr. Achim Kaspar
Member of the
Executive Board
396
Annual financial statements
398
Assets €k
Notes 2020 2021
A. Fixed assets
I. Intangible assets (1) 857.8 534.9
II. Property, plant and equipment 23,592.2 24,246.5
III. Investments (2) 5,020,048.0 5,785,166.0
5,044,498.0 5,809,947.4
B. Current assets
I. Inventories (3) 202.0 534.2
II. Receivables and other assets (4) 62,628.2 119,207.9
of which due in more than one year 97.8 929.8
62,830.2 119,742.1
C. Prepayments and accrued income (5) 60,525.1 64,181.3
D. Deferred tax assets (6) 34,466.7 26,130.2
5,202,319.9 6,020,000.9
Rights of recourse (7) 1,116,440.1 641,007.6
less counter-guarantees from cross-border
leasing – 324,079.5 – 68,884.7
792,360.6 572,122.9
Liabilities €k
Notes 2020 2021
A. Equity
I. Called and paid-in share capital
(8)
347,415.7 347,415.7
II. Capital reserves
(9)
971,720.3 971,720.3
III. Revenue reserves
(10)
1,689,147.3 1,934,930.4
IV. Net profit
(11)
260,561.8 364,786.5
of which profit carried forward
0.0 0.0
3,268,845.0 3,618,852.9
B. Provisions
(12)
252,422.7 250,361.2
C. Liabilities
(13)
1,680,304.6 2,150,220.6
of which due within one year
774,072.2 769,056.9
of which due in more than one year
906,232.4 1,381,163.7
D. Accruals and deferred income
(14)
747.6 566.3
5,202,319.9 6,020,000.9
Contingent liabilities
(15)
1,116,440.1 641,007.6
less counter-guarantees from cross-border
leasing
– 324,079.5 – 68,884.7
792,360.6 572,122.9
Balance sheet
ANNUAL FINANCIAL REPORT – PARENT COMPANY 399
€k
Notes 2020 2021
1. Revenue
(16)
350,880.6 392,639.9
2. Change in total services not yet billable
52.6 75.1
3. Other operating income
(17)
912.7 5,324.3
4. Operating income (subtotal of lines 1 to 3)
351,845.9 398,039.4
5. Expenses for electricity, grid/gas purchases and
purchases of emission allowances and other
purchased production services and other services
– 211,757.0 – 264,416.4
6. Personnel expenses
(18)
– 28,820.7 – 27,310.5
7. Depreciation and amortisation
(19)
– 2,925.7 – 2,710.4
8. Other operating expenses
(20)
– 47,247.4 – 50,338.5
9. Operating result (subtotal of lines 4 to 8)
61,095.2 53,263.6
10. Income from equity interests
337,815.5 486,851.5
11. Income from other securities and loans
classified as financial assets
35,136.1 37,183.8
12. Other interest and similar income
2,490.8 3,351.7
13. Income from the disposal and reversal of
impairment losses on investments
44,055.9 137,007.3
14. Expenses from investments
– 4,254.2 – 28,276.5
15. Interest and similar expenses
– 39,150.9 – 40,033.1
16. Financial result (subtotal of lines 10 to 15)
(21)
376,093.3 596,084.7
17. Earnings before taxes
(subtotal of lines 9 and 16)
437,188.5 649,348.3
18. Taxes on income and profit
(22)
– 16,735.4 – 38,778.7
19. Net income for the year
420,453.1 610,569.6
20. Allocation to revenue reserves
– 159,891.3 – 245,783.1
21. Net profit 260,561.8 364,786.5
Income statement
400
As at
1/1/2021
Additions Disposals Reclassifications
I. Intangible assets
1. Industrial property rights,
electricity purchase rights,
usage fees and similar rights and
benefits as well as licences
derived therefrom 8,348.9 216.1 21.5 0.0
2. Prepayments 37.7 0.0 0.0 – 37.7
8,386.6 216.1 21.5 – 37.7
II. Property, plant and equipment
1. Land, land rights and buildings,
including buildings on
third-party land
a. with residential buildings 77.6 0.0 0.0 0.0
b. with plant and other
plant facilities 28,427.2 797.7 33.2 1,280.2
2. Electrical installations 6,355.7 478.5 35.0 434.8
3. Office and plant equipment 23,008.0 1,518.3 936.8 105.8
4. Prepayments and assets
under construction 1,783.1 63.8 0.0 – 1,783.1
59,651.6 2,858.2 1,005.0 37.7
Property, plant and equipment
and intangible assets 68,038.2 3,074.4 1,026.5 0.0
III. Investments
1. Shares in affiliated companies 3,630,837.2 503,563.1 316,231.8 0.0
2. Loans to affiliated companies 1,266,618.6 430,327.9 83,438.3 0.0
3. Equity interests 282,643.0 0.0 0.0 0.0
4. Loans to equity interests 70,000.0 0.0 0.0 0.0
5. Securities (loan stock rights)
under fixed assets 74,920.4 0.0 110.8 0.0
6. Other loans 50,646.0 10.7 3,500.8 0.0
5,375,665.2 933,901.7 403,281.6 0.0
Fixed assets 5,443,703.4 936,976.1 404,308.1 0.0
Statement of changes in fixed assets
ANNUAL FINANCIAL REPORT – PARENT COMPANY 401
€k
As at 31/12/2021 Accumulated
amortisation and
depreciation as at
31/12/2021
Net carrying
amount as at
31/12/2021
Accumulated
amortisation and
depreciation as at
31/12/2020
Net carrying
amount as at
31/12/2020
8,543.6 8,008.7 534.9 7,528.8 820.1
0.0 0.0 0.0 0.0 37.7
8,543.6 8,008.7 534.9 7,528.8 857.8
77.6 77.6 0.0 77.6 0.0
30,471.8 20,758.1 9,713.8 20,139.3 8,287.9
7,234.1 5,227.5 2,006.6 4,793.0 1,562.7
23,695.3 11,232.9 12,462.4 11,049.6 11,958.5
63.8 0.0 63.8 0.0 1,783.1
61,542.5 37,296.0 24,246.5 36,059.4 23,592.2
70,086.1 45,304.7 24,781.4 43,588.2 24,450.0
3,818,168.5 121,119.3 3,697,049.2 344,947.6 3,285,889.6
1,613,508.3 0.0 1,613,508.3 0.0 1,266,618.6
282,643.0 0.0 282,643.0 9,222.4 273,420.6
70,000.0 0.0 70,000.0 0.0 70,000.0
74,809.6 0.0 74,809.6 1,447.2 73,473.2
47,155.9 0.0 47,155.9 0.0 50,646.0
5,906,285.3 121,119.3 5,785,166.0 355,617.2 5,020,048.0
5,976,371.4 166,424.0 5,809,947.4 399,205.4 5,044,498.0
402
Accumulated
amortisation
and depreciation
as at 1/1/2021
Additions from
amortisation
and depreciation
I. Intangible assets
1. Industrial property rights, electricity purchase rights,
usage fees and similar rights and benefits as well as
licences derived therefrom 7,528.8 497.1
2. Prepayments 0.0 0.0
7,528.8 497.1
II. Property, plant and equipment
1. Land, land rights and buildings, including buildings on
third-party land
a. with residential buildings 77.6 0.0
b. with plant and other plant facilities 20,139.3 625.7
2. Electrical installations 4,793.0 469.1
3. Office and plant equipment 11,049.6 1,118.4
4. Prepayments and assets under construction 0.0 0.0
36,059.4 2,213.3
Property, plant and equipment and intangible assets 43,588.2 2,710.4
III. Investments
1. Shares in affiliated companies 344,947.6 0.0
2. Loans to affiliated companies 0.0 0.0
3. Equity interests 9,222.4 0.0
4. Loans to equity interests 0.0 0.0
5. Securities (loan stock rights) under fixed assets 1,447.2 0.0
6. Other loans 0.0 0.0
355,617.2 0.0
Fixed assets 399,205.4 2,710.4
Statement of changes in amortisation
and depreciation of fixed assets
ANNUAL FINANCIAL REPORT – PARENT COMPANY 403
€k
Disposals Reversal of
impairment
Accumulated
amortisation and
depreciation
as at 31/12/2021
17.2 0.0 8,008.7
0.0 0.0 0.0
17.2 0.0 8,008.7
0.0 0.0 77.6
6.9 0.0 20,758.1
34.6 0.0 5,227.5
935.1 0.0 11,232.9
0.0 0.0 0.0
976.7 0.0 37,296.0
993.9 0.0 45,304.7
126,047.6 126,336.2 121,119.3
0.0 0.0 0.0
0.0 9,222.4 0.0
0.0 0.0 0.0
3.0 1,444.2 0.0
0.0 0.0 0.0
126,050.6 137,002.8 121,119.3
127,044.5 137,002.8 166,424.0
404
€k
Residual term to maturity as at
31/12/2021
< 1 year > 1 year > 5 years Total
Loans
1. Loans to affiliated companies 37,804.2 595,690.8 980,013.3 1,613,508.3
2. Loans to equity interests 20,000.0 50,000.0 0.0 70,000.0
3. Other loans 41,466.9 1,844.4 3,844.6 47,155.9
99,271.1 647,535.2 983,857.9 1,730,664.2
Receivables and other assets
1. Trade receivables 45,639.4 929.8 0.0 46,569.1
2. Receivables from
affiliated companies 71,776.3 0.0 0.0 71,776.3
3. Receivables from investees 124.0 0.0 0.0 124.0
4. Other receivables and assets 738.5 0.0 0.0 738.5
118,278.1 929.8 0.0 119,207.9
Liabilities
1. Bonds 4,253.4 500,000.0 627,823.0 1,132,076.4
2. Liabilities to banks 27,939.4 82,529.2 170,750.0 281,218.6
3. Trade payables 48,406.4 0.0 0.0 48,406.4
4. Liabilities to affiliated companies 662,242.2 0.0 0.0 662,242.2
5. Other liabilities 26,215.4 61.6 0.0 26,277.0
769,056.9 582,590.8 798,573.0 2,150,220.6
Maturity schedule 2021
ANNUAL FINANCIAL REPORT – PARENT COMPANY 405
€k
Residual term to maturity as at
31/12/2020
< 1 year > 1 year > 5 years Total
Loans
1. Loans to affiliated companies 41,438.3 461,455.1 763,725.3 1,266,618.6
2. Loans to equity interests 0.0 70,000.0 0.0 70,000.0
3. Other loans 3,500.0 42,847.4 4,298.5 50,646.0
44,938.3 574,302.5 768,023.8 1,387,264.6
Receivables and other assets
1. Trade receivables 38,362.0 97.8 0.0 38,459.8
2. Receivables from
affiliated companies 16,247.5 0.0 0.0 16,247.5
3. Receivables from investees 123.7 0.0 0.0 123.7
4. Other receivables and assets 7,797.1 0.0 0.0 7,797.1
62,530.4 97.8 0.0 62,628.2
Liabilities
1. Bonds 863.0 500,000.0 127,823.0 628,686.0
2. Liabilities to banks 33,129.5 95,255.1 183,056.6 311,441.3
3. Trade payables 41,642.1 50.4 0.0 41,692.5
4. Liabilities to affiliated companies 693,593.3 0.0 0.0 693,593.3
5. Other liabilities 4,844.2 47.3 0.0 4,891.6
774,072.2 595,352.9 310,879.6 1,680,304.6
Maturity schedule 2020
406
Notes
to the annual financial statements
408
I. General notes
These annual financial statements have been prepared in accordance with the provisions of the
Austrian Commercial Code (Unternehmensgesetzbuch, UGB), as amended.
In the interest of clear presentation, individual line items in the balance sheet and the income
statement have been aggregated. These line items are explained separately in the notes to the annual
financial statements. The individual line items of the balance sheet and income statement are presented
in accordance with VERBUND’s Group-wide requirements with respect to form and substance.
In accordance with Section 223(7) of the Austrian Commercial Code (UGB), balance sheet and
income statement line items with a carrying amount of zero in both the financial year and the previous
year are not reported. The designations of the items have been shortened or expanded to reflect their
actual substance in accordance with Section 223(4) of the Austrian Commercial Code (UGB) to the
extent that this appeared expedient in order to present annual financial statements that are clear and
easy to understand.
If the presentation has changed year-on-year or if the prior-year amounts are not comparable, the
prior-year amounts are adjusted in accordance with Section 223(2) of the Austrian Commercial Code
(UGB) and explained in the corresponding item.
The addition of rounded amounts and the calculation of percentages may lead to rounding
differences due to the use of computing software.
II. Accounting policies
The annual financial statements have been prepared in accordance with Austrian Generally Accepted
Accounting Principles and the general requirement to present a true and fair view of the Company’s
assets, liabilities, financial position and financial performance.
In preparing these annual financial statements, the principle of completeness was adhered to and the
principle of prudence was observed. Measurement was based on the assumption that the Company is a
going concern.
As a rule, depreciable fixed assets are measured at cost less depreciation and amortisation.
Property, plant and equipment and intangible assets used for longer than six months of the financial
year are depreciated or amortised at the full annual rate, whereas those that are used for less than six
months are depreciated or amortised at half the annual rate.
Purchased intangible assets are recognised at cost and – to the extent that they are amortisable –
amortised over their standard useful life.
In addition to direct material and production costs, the cost of internally generated plant and
equipment also includes directly attributable indirect material and production costs. The Company has
chosen not to apply the measurement option relating to the inclusion of social security expenses,
termination benefits or pensions and similar obligations within the meaning of Section 203(3) of the
Austrian Commercial Code (UGB); it has also opted not to capitalise borrowing costs (Section 203(4) of
the Austrian Commercial Code (UGB)). Low-value assets are fully written off in the year of acquisition
and reported as an asset disposal in the subsequent year.
Notes
Fixed assets
ANNUAL FINANCIAL REPORT – PARENT COMPANY 409
Shares in affiliated companies and equity interests are recognised at cost or at the lower fair value.
Depending on the situation in question, the fair values are determined based on market quotations,
comparable recent transactions, measurement using the discounted cash flow method or measurement
using the multiples method. Using the discounted cash flow (DCF) method, the prices are determined
by price quotations for energy futures and long-term electricity price forecasts. The discount rate is an
after-tax interest rate which reflects current market estimates, the time value of money and the specific
risks associated with the investment. Securities and loan stock rights under fixed assets are measured at
cost or at the lower fair value.
Interest-bearing loans are recognised at their nominal amounts. Impairment losses are recognised if
the impairment is expected to be permanent. Receivables with a maturity of more than one year – with
the exception of instalment sales – are reported under financial assets as loans.
VERBUND’s schedule of uniform depreciation and amortisation rates primarily specifies the
following depreciation and amortisation rates for VERBUND AG:
Rate of depreciation/
amortisation in %
Useful life in years
Intangible assets
Rights to telecommunications installations 10 10
Rights to software products 25 4
Other rights 2–25 4–50
Buildings
Residential and office buildings 2 or 3 33.3 or 50
Plant(s) 3–5 20–33.3
Technical installations and machinery
Machinery 3–10 10–33.3
Electrical installations 3–14.3 7–33.3
Telecommunications installations 4–33.3 3–25
Office and plant equipment 10–25 4–10
Services not yet billable are recognised at production cost. Production cost includes direct material and
production costs as well as directly attributable indirect material and production costs. The Company
has chosen not to apply the measurement option concerning the inclusion of social security expenses
and borrowing costs (Sections 203(3) and (4) of the Austrian Commercial Code (UGB)).
Inventories recognised using the moving average price method are measured at cost in accordance
with the strict lower of cost or market value principle.
Receivables and other assets are measured at their principal amount, unless a lower fair value is
required to be recognised in the case of specific identifiable risks. Receivables in foreign currencies are
measured at the mean rate of exchange prevailing at the recognition date or the lower foreign exchange
reference rate of the European Central Bank (ECB) prevailing at the reporting date (unless the exchange
rate is otherwise hedged).
Current assets
410
Cash at banks in foreign currency is also measured using the ECB foreign exchange reference rate in
accordance with the strict lower of cost or market value principle.
Since the 2004 financial year, if tax relief is expected in subsequent years, deferred tax assets are
recognised in accordance with Section 198(9) of the Austrian Commercial Code (UGB) whereby the
deferred taxes attributable to Group members based on tax allocation are presented under the current
result in their balance sheets. The option to recognise deferred taxes for loss carryforwards is applied
from financial year 2016.
This prepayment results from differences between the financial and tax accounts with respect to line
items that can only be deducted as expenses for tax purposes in income statements of future periods.
The underlying tax rate for taxes due in Austria amounts to 25% and for taxes due in Germany, 15.83%.
Provisions take into account all identifiable risks that can be allocated to a financial year that has already
ended and include those amounts that it was necessary to recognise based on the best estimate of the
settlement amount. Provisions with a remaining maturity of more than one year are discounted using a
market interest rate.
Provisions for termination benefits are allocated at the full actuarial amount based on the projected
unit credit (PUC) method typically used in international financial reporting. The accumulation period
for provisions for termination benefits is 25 years. Employees whose service began after 31 December
2002 are no longer entitled to a direct claim against their employer for statutory termination benefits.
For those employment contracts, the employer pays 1.53% of salary monthly into an employee pension
fund in which the contributions are deposited in an account of the employee. Collective bargaining
agreement requirements for energy supply companies which exceed statutory claims are recognised in
provisions for termination benefits.
Due to labour-management agreements and contracts, VERBUND is obligated under certain
conditions to make pension payments to employees after they retire. These defined benefit obligations
are partially covered by pension plan assets earmarked for this purpose by APK Pensionskasse AG. The
provision determined in accordance with the PUC method typically used in international financial
reporting is presented after offset with pension plan assets. The employer is obligated to provide
additional funding to the extent that these defined benefit obligations are required to be fulfilled by APK
Pensionskasse AG.
Provisions for current pensions, vested pension benefits and similar obligations are determined using
the PUC method. The interest expense is shown in the financial result, in line with international practice.
The calculations are based on the updated “AVÖ 2018-P – Actuarial Assumptions for Pension
Insurance”.
Deferred tax assets
Provisions
ANNUAL FINANCIAL REPORT – PARENT COMPANY 411
The calculations as at 31 December 2021 and 2020 have been based on the following assumptions:
%
2020 2021
Interest rate:
Pensions 0.75 1.00
Obligations similar to pension obligations 0.75 1.25
Termination benefits 0.50 0.75
Trend:
Pension increases 2.00 1.75
Salary increases 2.75 2.75
Contributions to obligations similar to pensions – old contracts 6.00 5.50
Contributions to obligations similar to pensions – new contracts 3.75 3.75
Employee turnover 0.00–4.10 0.00–4.10
Retirement age – women 56.5–65 y. 56.5–65 y.
Retirement age – men 61.5–69 y. 61.5–69 y.
Expected non-current return on plan assets 0.75 1.00
The same interest rate is applied to the expected return on plan assets as is used to determine the
corresponding provision. The discount rates differ according to the residual term of the commitments
and in line with the total contained therein (employees and pensioners).
The effects of the changes in parameters are presented in personnel expenses.
Liabilities are recognised at their settlement amount based on the principle of prudence. Trade payables
denominated in foreign currency are measured at the ECB foreign exchange reference rate prevailing at
the reporting date, provided that this rate is higher than the rate prevailing at the time of origination.
Liabilities from bonds and loans denominated in foreign currency are measured at the ECB foreign
exchange reference rate prevailing at the reporting date, provided that this rate is higher than the rate
prevailing at the time of origination. The result of this measurement is presented under the
corresponding liabilities. Discounts, the capital procurement cost and loan commitment fees were
capitalised in financial years 1994 and 2014 and are being repaid as scheduled. The discounts and
capital procurement cost assumed in connection with the merger of VERBUND International Finance
GmbH in 2014 are presented under financial liabilities and are being repaid.
In individual cases of external financing, interest rate swaps (variable for fixed rate) were entered into in
order to hedge cash flows. Individual interest rate swaps (variable for fixed rate) were also entered into
for intra-Group hedging of cash flows and underlying assets.
Liabilities
Derivative financial
instruments
412
VERBUND AG is the parent of the tax group as defined by Section 9(8) of the Austrian Corporate Income
Tax Act (Körperschaftsteuergesetz, KStG) of 1988.
The tax group parent charges (tax allocation rate of 25%) or, in the event of a loss, credits (tax
allocation rate of 25%, 20% or 15% depending on the anticipated date of future profits of the Group
member) the Group members with the corporate income tax amounts attributable to them by means of
a tax allocation. The recharging of the tax allocations results in an adjustment decreasing or increasing
the tax expense in the parent’s income statement.
The tax recharges to Group members are only adjusted for subsequent deviations if these are material.
III. Notes to the balance sheet and to the income statement
The company shares in VERBUND Windpower Romania SRL were contributed to VERBUND Green
Power GmbH on the basis of the contribution and transfer agreement dated 1 October 2021.
A. Fixed assets
For details see separate “Statement of changes in fixed assets”. The base value of land amounts to
€3,340.7k (previous year: €3,340.7k).
(1) I. Intangible assets
The net carrying amount of the rights of use with respect to plants acquired by affiliated companies is
€0.0k (previous year: €0.0k).
(2) III. Investments
The disclosures in accordance with Section 238(1)(4) of the Austrian Commercial Code (UGB) are
presented separately in “Disclosures of equity interests in accordance with Section 238(1)(4) of the
Austrian Commercial Code (UGB)”.
The changes in and structure of equity interests, loans and securities (loan stock rights) classified as
fixed assets are shown separately in the “Statement of changes in fixed assets”.
Loans For details see separate “Maturity schedule”.
Securities (loan stock rights) under fixed assets These consist primarily of Austrian investment
fund units and bonds. Securities under fixed assets in the amount of €0.0k (previous year: €0.0k) are
pledged as collateral.
B. Current assets
(3) I. Inventories €k
2020 2021
Goods 34.3 291.3
Services not yet billable 167.7 242.8
202.0 534.2
Ta xe s o n i n co m e
Matters under
corporate law
Notes on assets
ANNUAL FINANCIAL REPORT – PARENT COMPANY 413
(4) II. Receivables and other assets
For details see separate “Maturity schedule”.
Of the receivables from affiliated companies, €0.0k (previous year: €0.0k) related to trade receivables
and €71,776.3k (previous year: €16,247.5k) to other receivables.
Of the receivables from investees, €15.3k (previous year: €15.0k) related to trade receivables and
€108.7k (previous year: €108.7k) to other receivables.
€k
Other receivables and assets 2020 2021
Receivables from disposals of investments 4,336.3 0.0
Loans and accrued interest income from loans 2,941.7 315.1
Financing contributions 317.3 0.0
Prepayments 47.7 27.2
Tax authorities 33.0 301.8
Payroll 18.6 4.9
Other 102.6 89.4
7,797.1 738.5
(5) C. Prepayments and accrued income €k
2020 2021
Prepayments for electricity purchases 17,680.7 16,347.5
Discounts, flotation costs and commitment fee
relating to bonds and non-current loans 4,322.1 10,866.7
Other 38,522.3 36,967.1
60,525.1 64,181.3
(6) D. Deferred tax assets €k
2020 2021
Social capital 6,501.0 5,410.3
Valuation of fixed assets – 25.2 – 105.4
Special tax deductions – 233.4 – 233.4
Other 28,224.3 21,058.7
Deferred tax receivables (+) respectively liabilities (–) balanced 34,466.7 26,130.2
Deferred tax assets are the result of differences between the financial and taxable result in respect of
line items affected by expenses for tax purposes in income statements of future periods. The calculation
was based on a tax rate of 25%.
Other deferred taxes are related to differences between the financial and tax treatment of the
transaction costs, non-current provisions and accounting for investees.
414
(7) Rights of recourse
Rights of recourse amounted to a total of €641,007.6k (previous year: €1,116,440.1k). In addition to rights
of recourse vis-à-vis Group companies, rights of recourse exist primarily vis-à-vis financial institutions,
state energy companies and regional authorities from cross-border leasing transactions carried out at
VERBUND Hydro Power GmbH in the amount of €68,884.7k (previous year: €324,079.5k). See (15)
Contingent liabilities.
A. Equity
(8) I. Called and paid-in share capital
There were 347,415,686 shares in circulation at the reporting date.
Composition Stock (shares) Proportion
Bearer shares category A 170,233,686 49%
Registered shares category B 177,182,000 51%
Authenticated by an interim certificate made out in the name of the Republic
of Austria (deposited with the Federal Ministry of Finance)
347,415,686 100%
There are no reciprocal equity interests in accordance with Section 241(6) of the Austrian Commercial
Code (UGB).
(9) II. Capital reserves
Capital reserves are made up entirely of allocated capital reserves. The allocated capital reserves and the
statutory reserves amount to a total of €991,604.3k, which is more than 10% of the share capital.
(10) III. Revenue reserves €k
2020 2021
Statutory reserves 19,884.0 19,884.0
Distributable reserves 1,669,263.3 1,915,046.4
1,689,147.3 1,934,930.4
(11) IV. Net profit €k
As at 31/12/2020 260,561.8
Distribution of dividends – 260,561.8
Profit carried forward 0.0
Net profit for the year 610,569.6
Changes in reserves – 245,783.1
As at 31/12/2021 364,786.5
Notes on
equity and liabilities
ANNUAL FINANCIAL REPORT – PARENT COMPANY 415
(12) B. Provisions
1. Provisions for termination benefits €k
2020 2021
Premium reserve based on actuarial calculations 6,430.4 6,063.2
Taxed proportion of provisions 6,430.4 6,063.2
In 2002, the provision permitted under Section 14 of the Austrian Income Tax Act (Einkommen-
steuergesetz, EStG) was transferred tax-free to a reserve qualifying as taxed (Section 124b(68) of the
Austrian Income Tax Act (EStG)).
2. Provisions for pensions €k
2020 2021
Provisions for pension obligations gross 40,778.7 37,033.4
Pension fund assets – 9,936.6 – 10,216.8
Provisions for pension obligations net 30,842.0 26,816.6
of which obligations similar to pensions 7,401.1 6,437.4
3. Provisions for taxes €k
2020 2021
Corporate income tax domestic (including prior reporting periods) 182,682.1 194,558.0
Corporate income tax foreign (including prior reporting periods) 652.8 0.0
Other tax provisions 1,219.1 1,219.1
Deferred tax liabilities 3,611.1 3,209.9
188,165.2 198,987.1
Deferred tax liabilities are the result of differences between the financial and taxable result in respect
of line items affected by expenses for tax purposes in income statements of future periods. The
competent tax authorities are located in Germany and, as a result of this, a tax rate of 15.83% was used
for calculation.
4. Other provisions €k
2020 2021
Electricity/grid purchases 8,525.6 0.0
Trade receivables not yet billed 5,015.2 4,318.1
13,540.8 4,318.1
Of the provisions, €0.0k (previous year: €0.0k) related to affiliated companies.
416
€k
Other personnel-related provisions 2020 2021
Bonuses 7,025.3 8,099.3
Unused holidays 3,477.5 3,066.4
Holiday allowance 1,049.3 1,055.0
Death grant 506.3 427.9
Compensatory time credit 221.0 254.4
Other 1,164.8 1,273.1
13,444.2 14,176.2
(13) C. Liabilities
For details see separate “Maturity schedule”.
Of the liabilities to affiliated companies, €662,118.2k (previous year: €692,420.9k) related to financial
liabilities, while €124.0k (previous year: €0.0k) related to trade liabilities and €0.0k (previous year:
€1,172.4k) to other liabilities.
€k
Other liabilities 2020 2021
From taxes 2,410.0 23,556.6
Related to social security 373.1 374.5
Payroll 86.4 226.3
From financing contributions 65.3 6.2
Other 1,956.8 2,113.3
4,891.6 26,277.0
(14) D. Accruals and deferred income €k
2020 2021
Contributions to building costs 561.3 526.2
From electricity business 53.4 40.0
Other 132.9 0.0
747.6 566.3
Of the accruals and deferred income, €0.0k (previous year: €0.0k) related to affiliated companies.
(15) Contingent liabilities
Contingent liabilities that are recognised below the line are primarily for letters of comfort and liabilities
assumed for subsidiaries as part of the financing that VERBUND AG carries out centrally as well as other
assumptions of liabilities, excluding the contingent liabilities in connection with cross-border leasing
transactions in the total amount of €264,033.9k (previous year: €310,706.7k). Of this, €14,030.4k
(previous year: €60,703.2k) is attributable to affiliated companies and €0.0k (previous year: €0.0k) to
investees.
The subsidiary VERBUND Hydro Power GmbH (VHP) entered into several cross-border leasing
transactions during financial years 1999 to 2001. The figures reported in the balance sheet of VHP are all
ANNUAL FINANCIAL REPORT – PARENT COMPANY 417
denominated in US dollars. For all transactions, there was full balance sheet cover for all obligations by
way of corresponding acquisition of securities or through loans to financial institutions.
Beginning in 2009, and continuing during the 2010 reporting period, about 85% of the original volume
of the transactions was terminated. Some of the transactions were terminated early in their entirety; that
is, all associated liabilities were repaid. However, some of the transactions were only partially
terminated, whereby the transactions with the investors and the associated A-loans were repaid, while
VHP continued the existing B-loans and the corresponding investments.
In regard to the last remaining transaction (Freudenau), which had an off-balance sheet financing
structure, the lessee purchase option granted under section 19 of the lease agreement was exercised
in 2019 (early buy-out option). All of the contractual termination agreements required in connection
with this had been signed by 11 December 2020. The transaction was terminated as at 4 January 2021,
and final settlement took place on 15 December 2021.
In connection with these cross-border leasing transactions, VERBUND AG issued guarantee bonds for
VHP, which for the most part still exist for the liabilities transferred to VHP totalling €376,973.7k
(previous year: €805,733.4k). Of the rights of recourse against the primary debtors, €68,884.7k (previous
year: €324,079.5k) were secured through counter-guarantees from financial institutions, state energy
companies and regional authorities (from guarantors’ liabilities). These counter-guarantees are
presented under total rights of recourse (see note (8)). Thus, a total of €308,089.0k (previous year:
€481,653.9k) remains in contingent liabilities from cross-border leasing transactions after deducting
these counter-guarantees. Minimum ratings for the guarantors are stipulated in the agreements with
lenders and with equity investors.
For two transactions which were terminated early and for which the financial liabilities were
continued, there is still a risk that the investing banks might have to be replaced or additional collateral
may have to be provided if the rating of the investing banks or of VERBUND AG is downgraded below a
certain threshold.
The ratings of the contractual partners as well as the rating of VERBUND AG exceeded the
contractually agreed thresholds as at 31 December 2021. Thus, there is currently no need for
VERBUND AG or VERBUND Hydro Power GmbH to exchange individual contractual parties or
investments. This risk is also mitigated not least by the existence in some cases of guarantors’ liabilities
from regional authorities for individual contractual parties.
VERBUND AG gave a commitment to VERBUND Thermal Power GmbH & Co KG to ensure that the
company has adequate financial means to meet its obligations in a timely manner. The commitment is
limited to a maximum amount of €250.0m and can be terminated by 31 December 2025 at the earliest.
As part of the restructuring of VERBUND’s telecommunications segment, liabilities were assumed for
former tele.ring Telekom Service GmbH and KELAG-Kärntner Elektrizitäts-Aktiengesellschaft.
418
(16) 1. Revenue €k
2020 2021
Revenue from electricity deliveries
Domestic Energy supply companies 9,418.9 4,997.5
Consumers 115,544.4 132,144.2
Other customers 152,494.5 168,358.9
277,457.9 305,500.6
Invoicing of grid tariffs; user and management fees 3,030.7 3,054.4
Other revenue (including gas trading) 70,392.0 84,085.0
350,880.6 392,639.9
(17) 3. Other operating income €k
2020 2021
a) Income from disposal of fixed assets
with the exception of investments 17.2 8.5
b) Income from reversal of provisions 13.0 4,274.7
c) Other 882.5 1,041.2
912.7 5,324.3
Notes to the
income statement
ANNUAL FINANCIAL REPORT – PARENT COMPANY 419
(18) 6. Personnel expenses €k
2020 2021
a) Salaries 24,056.9 23,755.4
b) Expenses for termination benefits and
payments to employee pension funds
Termination benefits 285.3 542.9
Contributions to employee pension funds 254.0 272.4
Change in the provision for termination benefits 148.7 – 397.8
Expenses/income and takeovers/transfers within the Group – 186.4 – 149.1
501.6 268.4
c) Expenses for pensions and similar obligations
Early retirement benefits and pension payments 2,237.4 2,110.9
Change in the provisions for pensions
and similar obligations – 3,189.5 – 4,246.0
Expenses/income and takeovers/transfers within the Group – 63.0 – 28.6
Change in the provisions for early retirement benefits – 30.7 0.0
Pension fund contributions 943.2 877.5
– 102.6 – 1,286.2
d) Expenses for social security contributions as
required by law as well as income-based charges
and compulsory contributions 4,130.8 4,266.3
e) Other social security expenses 234.1 306.6
28,820.7 27,310.5
Interest rate changes for provisions related to termination benefits and pensions and similar
obligations resulted in a positive effect of €2,206.5k in the financial year and a negative effect of €467.9k
in the previous year. The effect of the changes in parameters was recognised in full in the financial year.
(19) 7. Depreciation and amortisation €k
2020 2021
a) Amortisation of intangible assets
and depreciation of property, plant and equipment
Depreciation and amortisation 1,993.0 2,341.4
Immediate write-off of low-value assets in accordance
with Section 13 of the Austrian Income Tax Act (EStG) 932.7 368.9
2,925.7 2,710.4
420
(20) 8. Other operating expenses €k
2020 2021
a) Taxes other than taxes on income 345.4 622.6
b) Other
Advertising and market development costs 9,527.8 10,259.9
IT expenses 4,207.1 5,637.7
Other administrative expenses 5,403.2 5,628.8
Operating costs for buildings, rent and leasing 3,488.6 3,787.9
Legal, audit and consulting expenses 8,959.0 7,445.8
Temporary personnel and provision of personnel 1,658.5 1,783.3
Membership fees 843.4 882.2
Telecommunications services, data services 564.5 593.6
Training and further education 507.5 690.3
Other 11,742.5 13,006.5
46,902.0 49,715.9
47,247.4 50,338.5
(21) 16. Financial result €k
2020 2021
Income from equity interests
from affiliated companies 316,032.0 464,068.9
of which from profit pools 30,749.7 99,977.2
Income from other securities and loans in financial assets
from affiliated companies 32,881.1 34,136.5
Other interest and similar income
from affiliated companies 2,386.4 3,203.7
Income from disposals and impairment loss reversals of investments
disposal of shares in affiliated companies 356.0 0.0
reversal of impairment of shares in affiliated companies 31,638.0 126,336.2
Expenses relating to investments
impairments on affiliated companies 0.0 28,555.5
expenses from affiliated companies 4,241.4 – 279.0
of which from profit pools 4,241.4 – 279.0
Interest and similar expenses
of which interest for long-term personnel provisions 318.2 263.5
from affiliated companies 15,717.1 14,857.2
ANNUAL FINANCIAL REPORT – PARENT COMPANY 421
(22) 18. Taxes on income and profit €k
2020 2021
Consolidated taxes on income
1
132,672.6 216,084.5
Taxes recharged to members of the Group
2
– 151,958.2 – 192,948.1
Future tax expense for subsequent taxation of losses from
foreign members of the tax group
– 3,663.2 7,553.2
Additional amounts/credit notes from previous periods
1
9,955.7 153.8
Change in deferred taxes
1
29,728.5 7,935.3
16,735.4 38,778.7
1
tax rate of 15.83% or 25% //
2
tax allocation rate of 24.25% or 25%
IV. Other disclosures
€k
Material items Total commitment 2022 2022–2026
Rent, lease and insurance agreements
1
4,442.4 21,558.1
Purchase commitments 7,636.5 6,649.1 7,636.5
of which to affiliated companies
1
3.8 19.1
1
The amount of the total commitment cannot be determined due to unspecified contract periods.
There is an electricity supply agreement with Ennskraftwerke Aktiengesellschaft according to which
the energy generated in its power plants, less electricity purchase rights of other participating partners,
must be delivered to VERBUND AG in exchange for reimbursement of the recognised expenses plus a
reasonable return on equity.
There are electricity supply agreements with Österreichisch-Bayerische Kraftwerke Aktiengesellschaft
and Donaukraftwerk Jochenstein Aktiengesellschaft according to which half of the energy generated in
their power plants must be delivered to VERBUND AG in exchange for reimbursement of recognised
expenses plus a reasonable return on equity.
In accordance with an electricity supply agreement, Innwerk AG is obligated to deliver half of the
energy generated in the Ering and Obernberg power plants to VERBUND AG at total production costs
plus an agreed mark-up.
There is an agreement with VERBUND Services GmbH for the invoicing of IT, procurement, financial
accounting, payroll, telecommunications and administrative services.
An agreement has been entered into with VERBUND Finanzierungsservice GmbH for the invoicing of
payment transactions and cash management services.
There are contractor agreements with VERBUND Energy4Business GmbH in the sales segment.
Due to labour-management agreements and contracts, VERBUND is obligated under certain
conditions to make pension payments to employees after they retire. The employer is obligated to
provide additional funding to the extent that these pension obligations are required to be fulfilled by
APK Pensionskasse AG. As a result of the trend on the financial markets, APK Pensionskasse AG
1. Total amount of
other financial
obligations
422
reported an obligation for additional funding in the amount of €0.0k (previous year: €0.0k) to cover
defined benefit obligations.
As at 31 December 2021, one employee had a letter of loyalty granting a higher degree of employment
protection. The prerequisite was 20 years of service at VERBUND and a minimum age of 45.
There are open contribution commitments in the amount of €8,394.0k (previous year: €0.0k) under
accounting for investees.
Finance area
There are interest rate swaps to hedge increases in interest rates for financial liabilities bearing variable
interest with an outstanding principal amount of €56,812.5k (previous year: €71,437.5k) as at
31 December 2021. These interest rate hedges consist of the interest rate swaps and the underlying loans.
As there is a documented hedge strategy and detailed hedge documentation, and ongoing
measurements of effectiveness are conducted, it is not necessary to recognise a separate provision for
onerous contracts for the negative fair values amounting to €3,579.9k (previous year: €5,991.1k). The
future interest payments hedged by these hedging instruments will occur in the following five years
(2022 to 2026) and will be recognised in profit or loss accordingly.
To avoid fluctuations in future cash flows from interest payments for loans granted to Group
companies at variable rates of interest amounting to a total principal amount of €90,825.0k (previous
year: €106,750.0k), interest rate hedges were entered into with banks in late 2012 and during the first half
of 2013. At the same time, the outstanding credit agreements with the Group companies involved in this
hedging transaction were converted to the fixed interest rate terms contractually agreed with the
respective bank. As here, too, there is a documented hedge strategy and detailed hedge documentation,
and ongoing measurements of effectiveness are conducted, recognition of a separate provision for
onerous contracts for the negative fair values is not required. The reporting date measurement of these
transactions resulted in a negative fair value totalling €2,293.2k (previous year: €4,740.6k) as at
31 December 2021.
Average 2020 2021
Salaried employees 148 156.8
€k
2020 2021
Members of the Executive Board, former members
of the Executive Board and their surviving dependants 782.9 608.8
Other employees – 383.9 – 1,626.6
399.0 – 1,017.8
A company pension plan has been set up for members of the Executive Board in the form of a defined
contribution pension fund agreement. In financial year 2021, contributions to the pension fund were
paid for the Executive Board in the amount of €184,500 (previous year: €253,000).
Statutory regulations apply, taking account of the requirements of Rule 27a of the Austrian Code of
Corporate Governance (ÖCGK), with respect to the claims of members of the Executive Board upon
2. Disclosures
regarding financial
instruments
3. Number of
employees
4. Expenses for
termination benefits
and pensions
ANNUAL FINANCIAL REPORT – PARENT COMPANY 423
termination of their position. In financial year 2021, €391,533 was paid out for pensions (previous year:
€389,323).
In the financial year, expenses for pensions and similar obligations for former members of the
Executive Board and their surviving dependants amounted to a total of €32,812 (previous year:
€140,624).
Disclosures regarding the Boards of the Company (members of the Executive Board and the Supervisory
Board) are presented before the management report.
Remuneration of members of the Executive Board
(including variable remuneration) €
Fixed
remuneration
2020
Variable
remuneration
Fixed
remuneration
2021
Variable
remuneration
Mag. Dr. Michael Strugl 685,000 444,935 750,000 480,910
Mag. Dr. Achim Kaspar 475,000 307,563 475,000 332,500
Dr. Peter F. Kollmann 620,000 403,233 620,000 435,813
Remuneration for the current members of the Executive Board totalled €3,128,810 in 2021 (previous
year: €4,231,454); this amount includes €34,587 in payments in kind (previous year: €51,387).
Furthermore, short-term variable remuneration in the amount of €525,000 (previous year: €494,336),
long-term variable remuneration (LTIP; two-year duration) of €412,500 (previous year: €0) and
compensation for unused holidays of €318,069 (previous year: €0) were paid out in 2021 for one former
member of the Executive Board. These relate to claims for the period of active participation on the
Executive Board for which final settlement only occurred in 2021.
Because it is only possible to ascertain at the end of the year whether targets have been achieved,
short-term variable remuneration components are paid out in the following year. Therefore, the total
amount includes the short-term variable remuneration components granted to the current members of
the Executive Board in the 2021 reporting period for the 2020 reporting period.
The system of variable remuneration was revised beginning with the 2019 reporting period and a
generally three-year Long Term Incentive Programme (LTIP) was agreed in addition to the short-term
remuneration (one-year goals). For the one-year goals, the percentage rate for total achievement of the
targets in financial year 2020 is a standard 70% of the relevant fixed remuneration. In the 2020 reporting
period, 60% of the agreement on targets was based on the achievement of the Group result and 40% on
non-financial goals (one-year): expansion of renewable generation (15%), reduction of specific
greenhouse gas emissions (5%), strategic human resources planning and advancement of women, as
well as employee satisfaction (10%) and hydropower plant availability (10%). The total achievement of
targets for 2020 was determined to be 100%.
For the one-year goals, the percentage rate for total achievement of the targets beginning in financial
year 2021 is a standard 60% of the relevant fixed remuneration. In the 2021 reporting period, 70% of the
agreement on targets was based on the achievement of the Group result and 30% on non-financial goals
(one-year): expansion of renewable generation (20%) and completion of the Culture Audit (10%).
With respect to the LTI plans for 2019–2021 and 2020–2022, a maximum of 55% of the respective fixed
remuneration (maximum target achievement of 100%, variable component 55%) can be paid out as
5. Board members
424
long-term remuneration on the basis of medium-term performance criteria. The actual amount
depends not only on the target achievement but also on the performance of VERBUND shares.
The duration of the LTIP is three years. In the beginning, the maximum value is depicted as the current
price in phantom shares; the undiscounted amount is paid out in arrears, depending on the target
achievement and the share price at the end of the three-year assessment period (average daily
VERBUND share price in the first quarter after plan completion).
The following performance criteria were defined for LTIP 2019 (assessment period ending 2021): total
shareholder return (25%), EBITDA from growth projects (25%), FCF before dividends (25%),
productivity increase (25%); for LTIP 2020 (assessment period ending 2022), application of total
shareholder return (30%), FCF before dividends (35%) and net debt/EBITDA (35%). As an exception to
this policy, the LTI plans for the member of the Executive Board departing at the end of 2020 were
concluded with durations of two years.
Beginning in the 2021 reporting period, a maximum of 78% of the respective fixed remuneration
(maximum target achievement of 120%, variable component 65%) can be paid out as long-term
remuneration on the basis of medium-term performance criteria. The actual amount depends not only
on the target achievement but also on the performance of VERBUND shares. The duration of the LTIP is
three years. In the beginning, the maximum value is depicted as the current price in phantom shares;
the undiscounted amount is paid out in arrears, depending on the target achievement and the share
price at the end of the three-year assessment period (average daily VERBUND share price for the three-
year duration of the respective LTI plan). The following performance criteria were defined for LTIP 2021
(assessment period ending 2023): total shareholder return (30%), FCF before dividends (35%) and
overhead costs (35%). As in the previous year, no loans or advances were paid out to any Board
members of the Group or its subsidiaries. As in the previous year, VERBUND does not have a stock
option programme for either the members of the Executive Board or senior management staff.
Remuneration paid to members of the Supervisory Board (including reimbursement of costs/travel
expenses recharged) amounted to a total of €391,778 (previous year: €320,010).
Remuneration scheme for the members of the Supervisory Board (in accordance with Rule 51 of the
Austrian Code of Corporate Governance (ÖCGK)):
€
2020 2021
Chairman/Chairwomen 25,000 25,000
Vice-Chairpersons 15,000 15,000
Member 10,000 10,000
Attendance fee 500 500
This remuneration also applies to work performed in each case in the Audit Committee and the
Strategy Committee. As previously, there is no separate remuneration for work carried out in other
committees.
No loans or advances were paid out to members of the Supervisory Board. All members of the
Supervisory Board are covered by the D&O insurance taken out by VERBUND.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 425
Agreements with members of the Supervisory Board, or with businesses that are closely associated with
individual members of the Supervisory Board, which require consent under Rule 49 of the Austrian
Code of Corporate Governance (ÖCGK):
During financial year 2021, no agreements which were not at arm’s length were entered into with
members of the Supervisory Board or with enterprises with which a member of the Supervisory Board is
associated. Services were rendered for various companies in the VERBUND Group; these contracts were
approved by the Supervisory Board.
VERBUND AG is the parent company within the VERBUND Group and therefore required to prepare
consolidated financial statements. In accordance with Section 238(1)(18) of the Austrian Commercial
Code (UGB), the Company elects not to disclose the expenses for the auditor.
There are profit and loss transfer agreements with VERBUND Energy4Business GmbH, VERBUND
Energy4Customers GmbH, VERBUND Finanzierungsservice GmbH, VERBUND Green Power GmbH
and VERBUND Services GmbH.
In addition to the division into business areas (formal unbundling) that existed as early as financial
year 1999, VERBUND also implemented legal unbundling by establishing independent companies
under corporate law with separate managing entities and accounting departments.
Business transactions as defined by Section 8(3) of the Austrian Electricity Industry and
Organisation Act (Elektrizitätswirtschafts- und -organisationsgesetz, ElWOG) were entered into
specifically with the following companies:
Electricity deliveries Ennskraftwerke Aktiengesellschaft, Innwerk AG, Österreichisch-Bayerische
Kraftwerke Aktiengesellschaft, Donaukraftwerk Jochenstein Aktiengesellschaft, KELAG-Kärntner
Elektrizitäts-Aktiengesellschaft
Electricity and natural gas sales VERBUND Energy4Business GmbH,
VERBUND Energy4Customers GmbH
Telecommunication VERBUND Services GmbH
Services VERBUND Services GmbH
Financing VERBUND Finanzierungsservice GmbH
Provision of personnel VERBUND Hydro Power GmbH, VERBUND Energy4Business GmbH,
VERBUND Services GmbH, VERBUND Energy4Customers GmbH
The Executive Board proposes (in accordance with Section 96(1) of the Austrian Stock Corporation Act
(AktG)) to distribute a dividend of €1.05 per share to 347,415,686 no-par value shares from the
distributable profit of financial year 2021, i.e. a total of €364,786,470.30.
The Austrian National Council approved the Ecosocial tax reform in its third reading on 20 January 2022.
This will give rise to income from deferred tax adjustments of an estimated €4.5 million.
6. Transactions with
related parties
7. Intra-Group
relationships
8. Disclosures in
accordance with
Section 8 of the
Austrian Electricity
Industry and
Organisation Act
(ElWOG)
9. Proposed
appropriation of
profits
10. Events after the
reporting date
426
Result of the documentation of electricity by source Proportion 2021
kWh
Hydropower 99.9% 1,919,464,099
Solar energy 0.1% 2,328,713
Wind power 0.0% 28,742
Total volume of electricity supplied in Austria
to consumers for their own use 100.0% 1,921,821,554
100% of the certificates of origin used
for the documentation come from Austria.
Environmental impact of electricity generation for the volume of
electricity supplied to consumers for their own use
2021
Radioactive waste (mg/kWh) 0.0
CO
2
emissions (g/kWh) 0.0
Vienna, 17 February 2022
Executive Board
Mag. Dr. Michael Strugl
Chairman of the
Executive Board
Dr. Peter F. Kollmann
Member of the
Executive Board
Mag. Dr. Achim Kaspar
Member of the
Executive Board
11. Disclosures in
accordance with
Section 78 of the
Austrian Electricity
Industry and
Organisation Act
(ElWOG)
ANNUAL FINANCIAL REPORT – PARENT COMPANY 427
€k
Head-
quarters
% share-
holding
as at
31/12/2021
Most recent
annual
financial
statements
(+)
(–)
Net
income/loss
for the year
Equity
1
Consolidated affiliated companies
2
Austrian Power Grid AG Vienna 100.00 2021 + 73,922.7 540,826.7
Innwerk AG Stammham 100.00 2021 + 63,494.6 191,060.1
VERBUND Energy4Business GmbH Vienna 100.00 2021 + 53,291.4 330,772.7
VERBUND Energy4Customers
GmbH Vienna 100.00 2021 + 1,945.5 1,316.6
VERBUND Finanzierungsservice
GmbH Vienna 100.00 2021 + 1,160.4 218.1
VERBUND Green Power GmbH Vienna 100.00 2021 + 66,785.2 229,017.7
VERBUND Green Power Hunsrück
GmbH & Co. KG Wörrstadt 100.00 2021 – 163.2 42,466.8
VERBUND Services GmbH Vienna 100.00 2021 + 9,894.8 9,620.6
VERBUND Thermal Power GmbH
Fernitz-
Mellach 100.00 2021 + 94.1 7,555.1
VERBUND Green Power
Deutschland GmbH Wörrstadt 100.00 2021 – 476.3 8,468.8
WATT DEVELOPMENT SPV 5,
S.L.U.
3
Granada 100.00 2021 – 3,764.5 19,739.9
WATT DEVELOPMENT SPV 6,
S.L.U.
3
Granada 100.00 2021 – 3,787.5 19,638.9
WATT DEVELOPMENT SPV 7,
S.L.U.
3
Granada 100.00 2021 – 3,658.7 19,427.2
VERBUND Thermal Power GmbH &
Co KG
Fernitz-
Mellach 99.99 2021 + 85,565.0 126,336.2
Infrastruktur Oberheimbach I GmbH
& Co. KG Wörrstadt 85.00 2021 + 0.0 48.6
VERBUND Hydro Power GmbH Vienna 80.54 2021 + 564,815.7 2,127,046.0
VERBUND Innkraftwerke GmbH Töging 70.27 2021 + 30,734.9 338,979.8
Infrastrukturgesellschaft Bischheim
GmbH & Co. KG Wörrstadt 65.29 2021 + 0.0 42.8
Gas Connect Austria GmbH Vienna 51.00 2021 + 48,798.2 222,648.5
Donaukraftwerk Jochenstein
Aktiengesellschaft Passau 50.00 2021 + 858.7 15,670.8
Grenzkraftwerke Gesellschaft mit
beschränkter Haftung Simbach 50.00 2021 + 2,426.8 20,510.6
Österreichisch-Bayerische
Kraftwerke Aktiengesellschaft Simbach 50.00 2021 + 3,180.2 57,626.5
Associates
Ennskraftwerke Aktiengesellschaft
4
Steyr 50.00 2021 – 1,115.1 26,348.9
KELAG-Kärntner Elektrizitäts-
Aktiengesellschaft
5
Klagenfurt 35.17 2020 + 88,802.3 928,202.4
1
equity as defined by Section 224(3)a of the Austrian Commercial Code (UGB), IFRSs or local law //
2
consolidation in accordance with Sections 253–261 of the Austrian
Commercial Code (UGB)
//
3
annual financial statements in accordance with IFRSs //
4
proportionate consolidation in accordance with Section 262 of the Austrian Commercial
Code (UGB)
//
5
accounted for using the equity method in accordance with Sections 263–264 of the Austrian Commercial Code (UGB)
Disclosures of equity interests
in accordance with Section 238 (1)(4) of the Austrian Commercial Code (UGB)
428
Report on the audit of annual financial statements
Opinion
We have audited the annual financial statements of VERBUND AG, Vienna, which comprise the balance
sheet as at 31 December 2021, the income statement for the financial year then ended and notes to the
annual financial statements.
In our opinion, the accompanying annual financial statements comply with legal requirements and
give a true and fair view of the company’s financial position as at 31 December 2021 and its financial
performance for the year then ended in accordance with Austrian Generally Accepted Accounting
Principles and the special legislation of the Electricity Industry and Organisation Act
(Elektrizitätswirtschafts- und -organisationsgesetz, ElWOG).
Basis for opinion
We conducted our audit in accordance with Regulation (EU) No. 537/2014 (hereinafter referred to as
EU-VO) and Austrian Generally Accepted Auditing Standards. Those standards require the application
of the International Standards on Auditing (ISAs). Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the annual financial statements section of our
report. We are independent of the company in accordance with laws and regulations applicable in
Austria, and we have fulfilled our other professional responsibilities in accordance with these
requirements. We believe that the audit evidence we obtained by the date of the auditor’s report is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the annual financial statements of the financial year under review. These matters were
addressed in the context of our audit of the annual financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Carrying amounts of shares in affiliated companies
Description and issue
As at 31 December 2021, VERBUND AG reported shares in affiliated companies in the amount of
€3,697.0m (previous year: €3,285.9m).
Due to the current financial and energy market environment, the company tested the carrying
amounts of the shares in these affiliated companies. Please refer to sections “II. Accounting policies”
and “(21) 16. Financial result” of the notes to the annual financial statements for details regarding the
impairment tests.
Numerous inputs flow into the valuation model based on net present value methods applied in the
test for impairment. These include in particular the future electricity and primary energy price trends,
assumptions regarding developments in the regulatory environment and the effects of the expansion of
renewable energy. Due to the complexity of the valuation models and the dependence of results on the
assessment of market developments by management, this is a key audit matter.
Independent auditor’s report
(Translation)
ANNUAL FINANCIAL REPORT – PARENT COMPANY 429
Audit approach
We evaluated the valuations carried out in particular in the following areas:
• the company’s assessment for the identification of potential impairment and reversals of impairment
losses;
• corroboration of the cash flows used in connection with the valuation models with company-specific
information, the contractual framework as well as the Group’s relevant market data from external as
well as internal sources;
• the mathematical accuracy of the valuation models; and
• assessment of the parameters used in determining the discount rate.
Other information
Management is responsible for the other information. The other information contains all information in
the annual report (excluding the annual financial statements, the management report and the auditor’s
report thereon). The annual report is expected to be made available to us after the date of the auditor’s
report.
Our opinion regarding the annual financial statements does not extend to the other information, for
which we do not provide any assurance. Please refer to the Report on the audit of the management
report regarding the information in the management report.
In connection with our audit of the annual financial statements, it is our responsibility to read the
above-mentioned other information, as soon as it is available, and thereby to evaluate whether it is
materially inconsistent with the annual financial statements or our knowledge obtained during the audit,
or otherwise appears to be materially misstated.
Responsibilities of management and the audit committee for the annual financial statements
The company’s management is responsible for the preparation of the annual financial statements that
give a fair and true view of the company’s assets, liabilities, financial position and profit or loss in
accordance with Austrian Generally Accepted Accounting Principles and the special legislation of the
Electricity Industry and Organisation Act (Elektrizitätswirtschafts- und -organisationsgesetz, ElWOG).
Furthermore, the management is responsible for the internal controls as management determines is
necessary to prepare the annual financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the annual financial statements, management is responsible for assessing the company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the
company or to cease operations, or has no realistic alternative but to do so.
The audit committee is responsible for overseeing the company’s financial reporting process.
430
Auditor’s responsibilities for the audit of the annual financial statements
Our objectives are to obtain reasonable assurance about whether the annual financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the EU-VO and Austrian Generally Accepted
Auditing Standards, which require the application of the ISAs, will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these annual financial statements.
As part of an audit conducted in accordance with the EU-VO and Austrian Generally Accepted
Auditing Standards, which require the application of the ISAs, we exercise professional judgement and
maintain professional scepticism throughout the audit.
In addition:
• We identify and assess the risks of material misstatement of the annual financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• We obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control.
• We evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• We conclude on the appropriateness of the management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the annual financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the company to cease
to continue as a going concern.
• We evaluate the overall presentation, structure and content of the annual financial statements,
including the disclosures, and whether the annual financial statements represent the underlying
transactions and events in a manner that give a true and fair view.
We communicate with the audit committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in the internal
control system that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical
requirements regarding independence to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
ANNUAL FINANCIAL REPORT – PARENT COMPANY 431
From the matters communicated with the audit committee, we determine those matters that were of
most significance in the audit of the annual financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the management report
Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent
with the annual financial statements and whether it has been prepared in accordance with the
applicable legal requirements.
Management is responsible for the preparation of the management report in accordance with the
Austrian Commercial Code.
We conducted our audit in accordance with laws and regulations applicable with respect to the
management report.
Opinion
In our opinion, the accompanying management report is prepared in accordance with the applicable
legal requirements, includes appropriate disclosures according to Section 243a of the Austrian
Commercial Code (UGB) and is consistent with the annual financial statements.
Statement
In the light of the knowledge and understanding of the company and its environment obtained in the
course of our audit of the annual financial statements, we have not identified material misstatements in
the management report.
432
Additional information required under Article 10 of the EU Audit
Regulation
We were elected by the annual general meeting held on 20 April 2021 as the auditor for the financial year
ended 31 December 2021 and engaged by the supervisory board on 25 May 2021 to audit the annual
financial statements. We have been the company’s auditor continuously since the financial year ending
on 31 December 2007.
We declare that the audit opinion included in the “Report on the audit of annual financial statements”
is in line with the additional report to the audit committee and complies with Article 11 of the EU Audit
Regulation.
We declare that we have not provided any non-audit-related services in accordance with Article 5(1)
of the EU-VO and that we maintained our independence from the company while conducting our audit.
Engagement partner
The engagement partner responsible for the audit is Mag. Walter Müller.
Vienna, 18 February 2022
Deloitte Audit Wirtschaftsprüfungs GmbH
Mag. Walter Müller
Wirtschaftsprüfer
(Austrian Certified Public Accountant)
The annual financial statements
may only be published or
duplicated together with our
auditor’s report in the version
audited by us. This auditor’s report
only relates to the complete annual
financial statements in German,
including the management report.
Section 281(2) of the Austrian
Commercial Code (UGB) applies to
versions differing from the version
audited by us.
Glossary
434
Cash flow
Balance of the inflow and
outflow of cash and cash
equivalents, usually broken
down into cash flow from
operating activities, investing
activities and financing
activities.
Current assets
Current assets (including
current loans and current
prepayments and accrued
income) less current liabilities
(including current accruals and
deferred income).
EBIT
Earnings before interest
(including personnel-related
interest) and taxes.
Equity ratio
Ratio of equity to total capital.
FFO (funds from
operations)
Operating result plus
depreciation and amortisation,
interest income and current
taxes.
Gearing
Ratio of net debt to equity.
Net debt
Interest-bearing debt less cash
and cash equivalents (including
securities and shares held as
current assets), adjusted for the
asset and liability portions of
closed items (e.g. in the case of
cross-border leasing
transactions).
Notional debt repayment
period
Ratio of debt to surplus funds
from earnings after tax.
RCF (retained cash flow)
Funds from operations (FFO)
less dividends paid.
ROCE (return on
capital employed)
Earnings before interest
(including personnel-related
interest) less applicable taxes in
relation to average capital
employed.
ROE (return on equity)
Ratio of earnings before taxes
to equity at the beginning of the
financial year.
ROI (return on
investment)
Earnings before interest
(including personnel-related
interest) and taxes in relation to
total capital at the beginning of
the financial year.
ROS (return on sales)
Ratio of earnings before interest
(including personnel-related
interest) and taxes to revenue.
Glossary
Part 3
Statement of all legal representatives
438
We confirm to the best of our knowledge that the consolidated financial statements give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Group as required by the
applicable accounting standards and that the Group management report gives a true and fair view of
the development and performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties the Group faces.
We confirm to the best of our knowledge that the financial statements of the parent company give a
true and fair view of the assets, liabilities, financial position and profit or loss of the parent company as
required by the applicable accounting standards and that the management report gives a true and fair
view of the development and performance of the business and the position of the parent company,
together with a description of the principal risks and uncertainties the parent company faces.
Vienna, April 2022
The Executive Board
Michael Strugl Peter F. Kollmann Achim Kaspar
Chairman of the Executive Board
of VERBUND AG
CFO, member of the Executive Board
of VERBUND AG
Member of the Executive Board
of VERBUND AG
Statement of all legal representatives
according to para 124 (1) Stock exchange act
VERBUND Wind Power Romania S.R.L.
VERBUND Green Power GmbH
100.00%
50.00%
SOLAVOLTA Energie- und
Umwelttechnik GmbH
100.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Innwerk AG Grenzkraftwerke GmbH
Donaukraftwerk
Jochenstein Aktiengesellschaft
Österreichisch-Bayerische
Kraftwerke Aktiengesellschaft
100.00%
SMATRICS GmbH & Co KG
E-Mobility Provider Austria GmbH
100.00%
100.00%
100.00%
99.00%
VERBUND Energy4Business GmbH
VERBUND Trading Romania S.R.L.
1.00%
100.00%
VERBUND Trading
Serbia d.o.o. - u likvidaciji *)
VERBUND Energy4Flex GmbH
VERBUND Energy4Business
Germany GmbH
VERBUND Energy4Future GmbH
100.00%
100.00%
100.00%
VERBUND Green Power
Deutschland Photovoltaik GmbH
100.00%
C2PAT GmbH & Co KG
25.00%
C2PAT GmbH
25.00%
VERBUND AG
Murkraftwerk Graz
Errichtungs- und BetriebsgmbH
100.00%
33.33%
33.33%
VERBUND Hydro Power GmbH
80.54%
50.01%
Lestin & Co. Tauch-, Bergungs- und
Sprengunternehmen Gesellschaft m.b.H.
Kraftwerk Nußdorf
Errichtungs- und Betriebs GmbH
Kraftwerk Nußdorf
Errichtungs- und Betriebs GmbH & Co KG
99.90%
VERBUND Tourismus GmbH
25.10%
0.10%
Ashta Beteiligungsverwaltung GmbH **)
100.00%
VERBUND Wind Power Austria GmbH
24.40%
100.00%
100.00%
Austrian Power Grid AG
OeMAG Abwicklungsstelle
für Ökostrom AG
VUM Verfahren Umwelt
Management GmbH
50.00%
100.00%
VERBUND Energy4Customers GmbH
smart Energy Services GmbH
20.00%
Equigy B.V.
51.00%
51.00%
15.53%
Gas Connect Austria GmbH
AGGM Austrian Gas Grid
Management AG
Trans Austria Gasleitung GmbH
23.13%
AGCS Gas Clearing and Settlement AG
100.00%
Watt Development SPV7 S.L.U.
100.00%
100.00%
Watt Development SPV6 S.L.U.
Watt Development SPV5 S.L.U. Infraestructuras Comunes de Illora S.L.
20.00%
20.00%
20.00%
Shareholder structure %
EVN and Wiener
Stadtwerke syndicate
Free float Republic
of Austria
TIWAG
51
> 25
> 5
<20
V
ERBUND Group structure
as at 31 December 2021 GRI 102-45
*) in liquidation
**) the company has entered into a proportionate loss absorption agreement with its shareholder(s)
1) VERBUND AG holds a share of approx. 99.9972 % in VERBUND Thermal Power GmbH & Co KG
and VERBUND Thermal Power GmbH holds a share of approx. 0.0028 %.
49.00%
100.00%
65.29%
85.00%
Infrastrukturgesellschaft
Bischheim GmbH & Co. KG
Infrastruktur Oberheimbach I
GmbH & Co. KG
VERBUND Green Power
Deutschland GmbH
VERBUND Innkraftwerke GmbH
100.00%
VERBUND Thermal Power GmbH
100.00%
1)
VERBUND
Thermal Power GmbH & Co KG
100.00%
100.00%
Ennskraftwerke Aktiengesellschaft
KELAG-Kärntner
Elektrizitäts-Aktiengesellschaft
VERBUND Finanzierungsservice GmbH
35.17%
70.27%
SMATRICS EnBW GmbH
50.00%
VERBUND Services GmbH
100.00%
100.00%
Energji Ashta Shpk
Lestin & Co. Tauch- und Bergungsunter-
nehmen Gesellschaft m.b.H. in Liqu. *)
0.00%
1
)
100.00%
VERBUND Green Power
Hunsrück GmbH & Co. KG
Consolidated (100%)
Joint venture,
accounted for
using the
equity method
Not consolidated
Accounted for
using the
equity method
Legend
Proportionately
consolidated
Profit and loss
transfer agreement
EDITORIAL DETAILS
Published by: VERBUND AG
Am Hof 6a, 1010 Vienna, Austria
This Integrated Annual Report was
produced in-house with firesys.
Chart and table concept:
Roman Griesfelder, aspektum gmbh
Creative concept: Brainds Marken und
Design GmbH
Design: Kathi Reidelshöfer, Schreibagentur
Consulting: Ute Greutter, UKcom Finance
Translation and linguistic consulting:
ASI GmbH
Production: Lindenau Productions GmbH
Contact: VERBUND AG
Am Hof 6a, 1010 Vienna, Austria
Phone: +43 (0)50 313-0
Fax: +43 (0)50 313-54191
E-mail: information@verbund.com
Web: www.verbund.com
Commercial register number: FN 76023z
Commercial register court:
Commercial Court of Vienna
VAT No.: ATU14703908
DPR No.: 0040771
Registered office: Vienna, Austria
Investor Relations:
Andreas Wollein
Phone: +43 (0)50 313-52604
E-mail: investor-relations@verbund.com
Group Communications:
Corinna Tinkler
Phone: +43 (0)50 313-53702
E-mail: media@verbund.com
Shareholder structure:
– Republic of Austria (51.0%)
– Syndicate (> 25.0%) consisting of EVN AG
(the shareholders of which are
Niederösterreichische Landes-
Beteiligungsholding GmbH, 51%, and
Wiener Stadtwerke GmbH, 28.4%) and
Wiener Stadtwerke GmbH (the sole
shareholder is the City of Vienna)
– TIWAG-Tiroler Wasserkraft AG (> 5.0%, the
sole shareholder is the province of Tyrol)
– Free float (< 20.0%): no further information
is available concerning owners of shares in
free float.
Legal and statutory limitations of voting
rights:
With the exception of regional authorities
and companies in which regional authorities
hold an interest of at least 51%, the voting
rights of each shareholder at the Annual
General Meeting are restricted to 5% of the
share capital.
Regulatory body/trade associations:
E-Control GmbH/E-Control Kommission
Wirtschaftskammer Österreich
Oesterreichs Energie
Object of the Group:
The Group focus is the generation,
transportation, trading with and sale of
electrical energy and energy from other
sources as well as the provision and
performance of energy services.
Executive Board:
Michael Strugl (Chairman),
Peter F. Kollmann,
Achim Kaspar
Supervisory Board:
Martin Ohneberg (Chairman), Christine
Catasta (Vice-Chairwoman), Christa Schlager
(Vice-Chairwoman), Susan Hennersdorf,
Barbara Praetorius, Jürgen Roth, Eckhardt
Rümmler, Stefan Szyszkowitz, Peter Weinelt,
Kurt Christof, Doris Dangl, Isabella Hönlinger,
Wolfgang Liebscher, Veronika Neugeboren
Specific laws applicable:
Austrian Electricity Industry and
Organisation Act (Elektrizitätswirtschafts-
und organisationsgesetz, ElWOG) with
associated regulations and implementation
laws. The legal bases listed can be accessed
via the legal information system of the
Federal Chancellery of the Republic of
Austria at www.ris.bka.gv.at.
This publication was printed by Bösmüller
Print Management GesmbH & Co KG
(UW No. 779) in accordance with the
Austrian Ecolabel’s Printed Materials
Guideline.
GRI 102-53
