Ladies and
gentlemen, welcome to the conference of Sabon 18. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. And after the presentation, there will be an opportunity to ask questions. May I now hand you over to Peter Coleman, who will lead you through this conference.
Please go
ahead. Thank you. Ladies and gentlemen, Andreas Wallen and I would like to welcome Thank you to our presentation for the full year 2020 numbers. And let me thank you for joining today's conference call. Before we move into the analysis of our business development, let me make a few general comments about the business year 2020.
The year 2020 was characterized by, obviously, COVID-nineteen pandemic issues And severe repercussions on the economy and the markets. The energy market environment drastically deteriorated due to low demand, Oversupply of CO2 certificates and decreased prices for coal, gas and oil. However, the situation improved. And in the second half of twenty twenty, Fabund was able to present very respectable numbers despite the crisis. We saw an increase of 56.1 percent in our share price in 2020, making Verbund by far the most valuable company in the Austrian Stock Index, ATX.
This confirms the positive effect of our measures taken in the past, which, as you know, focused on strengthening the free cash flow And reducing debt levels. The rating agencies SMP and Moody's recently affirmed our rating At single A stable and A3 stable. With these ratings, Savun is among the top performers Regarding its rating levels in the utility sector. Because of our very clear Sustainable position and consistent implementation of comprehensive measures in the past, Verbund was able to prove the resilience At the beginning, let me highlight the most important influencing factors for results development in 2020. The water supply determining the generation from our run upriver hydropower plants The contributions from the Hydro and Sales segment were higher than in 2019, whereas the contributions from the Grid segment, the Renewables segment And all our segments were lower compared to last year.
The last influencing factor I would like to mention are slightly higher contributions From our flexibility products, the impact of these influencing factors and the key figures of Verbum's In 2020 are as follows. Reported and adjusted EBITDA increased by 9.2% To EUR 1,292,000,000, the reported group results increased by 13.8% €631,000,000 and the adjusted group result increased by 11.2% to €610,000,000 The operating cash flow is very strong at a level of $1,190,000,000 being only 1.1% lower Then in full year 2019, so basically the same. The free cash flow after dividend was positive at a level of 299.5%, but 53% lower than in full year 2019. The change is mainly due to higher investments in potential assets and higher dividend payments compared to 2019. The free cash flow allowed us to reduce the debt level further.
Net debt decreased by 16.6% to EUR 1,880,000,000. Based on the strong results, we will propose a dividend of EUR 0.75 Per share in our AGM on the 20th April, which reflects a payout ratio of 41.3% on our reported group results End of 42.7 percent on the adjusted group results. In the following charts, I will explain the influencing factors on our results development in more detail. Let me start with the analysis of our generation volumes. After a good Q1 in 2020, we saw very low hydro volumes in the second quarter, followed by above average levels In Q3 and Q4.
For the full year, at 1.01, the hurdle coefficient was exactly the same level as in 2019 and 1 percentage point above the long term average. The generation of annual storage Power plants increased significantly by close to 15% in the quarters 1 to 4 2020. Therefore, our own production from hydropower slightly increased by 864 gigawatt hours or 2.8% compared to 2019. Generation from a thermal power plant was down by 34% to 5 36 gigawatt hours. Our CCGT Mella produced 201 gigawatt hours less electricity in the reporting period Due to lower congestion management, the Malak District Heating Power Plants, which has been used exclusively in gas operations since the end of the Q1 2020, we reported a reduction of 3 35 gigawatt hours.
Now the generation from wind power slightly decreased by 5 gigawatt hours or very small, 0.6% due to less favorable wind conditions in Austria. Generation from TV amounted to approximately 1 gigawatt hour in 2020. Now the second important influencing factor on our results are the average achieved contract prices. In 2020, based on our hedging strategy, we achieved an average contract price for our hydro generation of €44,600,000 compared to €39 for 2019. Please note that based on our hedging strategy, We price the maturity of the volumes up to 1.5 years in advance.
And as you know, €1, plus or minus, And the power price has a sensitivity of approximately €25,000,000 in our EBITDA line. Now on the next page, we talk about our flexibility products. That is, of course, one of the major trends in the new energy world, Volatility in the European grid system is exacerbated by the massive build out of renewables With our very flexible asset base consisting of CO2 free, low cost pump storage power plants and the most modern CPG in Austria, We're very well positioned to benefit from this trend. 2020 ended slightly higher than 2019 In terms of Flexibility Products, with the results, contributions amounting to approximately EUR 122,000,000 We saw lower contributions from congestion management and provision of control reserves energy but higher results from pumping And intra day trading. Please also note that since October 2018, our CCG Demelak has been put into A strategic reserve mechanism in Austria under which we'll receive a fixed capacity payment and a payment for the generation.
As a consequence, we have changed what used to be an unpredictable volatile cash flow against the secure stable cash flow for a period of 3 years. For 2021, we guide on a Relatively conservative stage of an EBITDA contribution of approximately EUR 90,000,000 from Flexibility Products. Now next page on the grid. The Austrian high voltage grid With a system length of 7,000 kilometers and interconnected capacities with 7 neighboring countries It's strategically of high importance for the group because of its growing importance in the European grid system and, of course, because of its regulated character. However, under IFRS, in contrast to local GAAP, we have a volatility in our results contribution, Which we cannot avoid.
What are
the main differences? Revenue, surpluses or shortfalls under IFRS Are not utilized or compensated via the so called regulatory accounts. Under IFRS, no rate provisions or asset line items I recognize and IFRS uses different depreciation and amortization basis, useful lives and capitalization of foreign costs In comparison to local GAAP. So what you see here is we show you the comparison between local GAAP and IFRS so that you have the numbers in the most transparent way. Please note that the current regulatory period started on the 1st January 2018 With a WACC of 4.88 percent pretax for existing assets and 5.2 percent pretax, including And investment markets on U.
S. Assets, therefore, on average, approximately 5%. The regulatory period lasts from 2018 to 2022, and the regulatory asset base for 2021 is Approximately EUR 1,900,000,000 with a very strong increasing trend. The next slide shows the nonrecurring effects in 2020. There were No one offs in the EBITDA section, neither in 2019 nor in 2020.
In 2020, we had negative nonrecurring effects related to impairments of our MENAZE CCGT And the Austrian hydro power plants, Greece and Graz, that amounted to EUR 25,000,000 in total. The reversal of impairments related to our wind power plants in Romania with a positive EUR 32,900,000. In total, the operating results showed nonrecurring effects of SEK 7,900,000. Then of course, we have the initial consolidation of our Smetrix Mobility Plus, which caused a positive nonrecurring effect of 1,900,000 And in other results from equity interest, we have a nonrecurring effect of EUR 4,300,000 Related to retrospective revenue received from the sale of Sogenia, our Italian participation, which we sold years ago. We also had a large positive nonrecurring effect in the other financial results Related to the measurement of an obligation to return an interest in the hydropower plant, Jokenstein, which amounted to SEK 32,900,000, There was also a reversal of an impairment for our hydropower plant, Asta, in Albania amounting to EUR 3,400,000.
In total, the financial results show nonrecurring effects of €41,800,000 then with a change in the tax qualification Of an electricity purchase right and the effects due to the nonrecurring effects mentioned before led to an overall effect of 29,300,000 in taxes. After considering the impacts from the nonrecurring effects on minorities, The nonrecurring effects on the group result level amounted to EUR 21,000,000. Now I would like to hand over to Andreas, who will take you through our key figures and Our financial liabilities, please enclose.
Yes. Thank you, Peter. So going quickly through the development of the key figures, Let me first start with EBITDA. So as highlighted, reported EBITDA increased 9.2 percent to EUR 1,293,000,000. The reported group result Increased by 13.8 percent to €631,400,000 The group result development We're influenced by one off effects adjusted for this one off effects.
The adjusted group per site increased by 11.2 percent to €610,000,000 The positive overall development is mainly a result of the higher contribution The hydro segment due to higher average achieved concrete prices stemming from increased forward price levels at the wholesale markets. In addition, the increased production from hydropower contributed positively. The sales segment also showed a positive development, mainly due to some extraordinary valuation effects And the contributions from the grid segment and from all other segments have a negative effect due to the reasons mentioned by Peter before in the chart. The EBITDA margin is very attractive. It increased from 30.4% to 40%.
The EBIT margin increased to 28.5% from 22%. Based on this The positive developmental results will be proposed to the shareholders in our AGM on April 20, a dividend per share Of €0.75 or 0 point 7 $5 which corresponds to a payout ratio of 41.3 on the reported group result and the payout ratio of 42.7% on the adjusted group result. If we move on to the next slide, let's turn to the development of the cash flow. The operating cash flow In 2020, slightly decreased to a level of €1,191,000,000 The reason for the slight decrease It was higher tax payments compared to last year, whereas lower interest payments had a positive effect. The additions to tangible assets also increased to EUR628,000,000.
This increase was caused by CapEx for Greek projects and maintenance CapEx related to hydropower plants. The main projects The 380 kilowatt line in Austria and the hydropower plant in Turfring in the southern parts of Germany. The free cash flow before dividends was highly positive. Before dividends, it was at the level of €590,900,000 After dividends, that's €299,500,000 And of course, this positive development or this positive free cash flow after dividend That's the reason why we again could improve our leverage situation. So the net debt Degals decreased from €2,300,000,000 to €1,900,000,000 and corresponding net debt EBITDA went down to 1 point 5.
Next slide shows the development of the financial liabilities. So the debt Maturity profile shows only a very small repayment this year of around €30,000,000 The next is in 2024. We have to repay an outstanding bond in the amount of €500,000,000 As always, we have sufficient liquidity backup with a €500,000,000 syndicated loan facility, which is undrawn. And we also have a substantial amount of uncommitted lines. The total amount of the financial liabilities went Significantly, the arm is now far below €1,000,000,000 so at the level of €859,000,000 The average interest rate on our debt is 2.31%, still a decline in Crane, of course.
And yes, 100% of our financial liabilities are denominated in euros. A last word on the rating Levels, so I think we had 2 confirmations. So S and P as well as Moody's Confirmed the rating the attractive rating levels of ProFound at a I see a flat stable outlook and a 3 stable outlook. So we are still among the best rated utilities in this sector. And I think this was clearly a positive signal confirming, let's say, our current positioning and strategy.
Let me pass on now to Peter again for explaining the CapEx plan.
Yes. Thank you, Andreas. This is an important page. As you can see, we have increased our CapEx plan To almost EUR 2,300,000,000, the main part of the growth CapEx, Approximately SEK 728,000,000 will be invested into the regulated grid business, especially into our 380 kV sales for a line in order to increase the capacity to integrate new renewables and better address the volatility And concession and the grid system, in addition for whom is also investing into new renewable projects and selected hydropower plants. The investments related to Austria and Germany, basically, the new renewable projects And hydropower, in addition to the growth CapEx, we are planning to invest around $884,000,000 into maintenance And substance, CapEx between 20212023.
So that's approximately EUR 300,000,000 per year. Now on the next page through our Acquisition of Gasconet Austria. As you know, Gasconet Austria is the Austrian gas transmission operator, where we are acquiring 51%. I'd like to mention that we expect the closing of the transaction to take place in the first half year of twenty twenty one. We discussed the strategic rationale for the acquisition in previous conference calls but can certainly It's very important that these implications are not yet reflected in the figures So for bonds, they will only be considered after the closing.
So when we Come to the outlook at the end of our results presentation. As you know, key parameters for development Of our operational business are prices in hydro volumes. At the end of 2020, we had hedged approximately 66% is so far hydro generation at an average price of EUR 44, which is The average achieved price would be at the level of EUR 46.2 approximately EUR 1.6 above the 2020 level. We've also hedged approximately 15% of our hydro generation at an average price of EUR 44.6 for EUR 20.2. The mark to market valuation shows a level of around EUR 63 for this year.
With regard to the year to date hydro situation, we have to report a hydro position Of 1.03 for today, which is 3 percentage points above the long term average. Now on the basis of the aforementioned developments, the guidance for the full year 2021 an EBITDA of approximately €1,080,000,000 to €1,300,000,000 and a group result of approximately €450,000,000 to €590,000,000 This, of course, under the assumption of average hydro and wind generation for 2021 As well as the chances and risks, which we have within the group being dependent on a number of external factors Which we cannot influence. For the financial year 2021, Fagun plans to pay out Between 45% 55% of the group results after adjustments for nonrecurring effects of between approximately EUR 450,000,000 to EUR 590,000,000. Now again, please note that this guidance does not reflect The financial implications from the plant acquisition of the 51% stake in Gasconet Austria. Now as always at this point, I would like to give you the sensitivities.
A deviation of plusminus 1% in the generation from hydropower had an impact of around €8,000,000 on the group results as a consequence of the fact that we have already hedged quite a lot. For 2021, a deviation of plusminus 1% in the generation from Wi Fi has an impact Of relatively small, €500,000 and a deviation of plusminus €1,000,000 in the wholesale price Has an impact of plusminus €5,800,000 in the group results. Now with that, I would like to hand over to the conference organizers and to the Q and A.
And the first question is from Wanda Sabinowska,
Hi, good morning. Wanda from Nioska Trading Street. Three questions for me, if I may. The first one is on your 2020 EBITDA guidance, which seems to be a bit light because if I take 2020 as a starting point, are you having EUR 50,000,000 From a higher achieved power price, if you mark to market, €50,000,000 from GCA. I know there is a
€50,000,000 heading from the lower grid on it
and 30,000,000 €1,000,000 heading from the lower grid earnings €30,000,000 heading from the flexibility. But I just struggle to see why €1300 is the top end of your guidance. Am I missing something? Is it a higher corporate cost? What I'm missing here?
The second point is on your dividend. You decided to pay only 33% payout ratio for 2020. It is a kind of lower half of the guidance. At the same time, you're writing the payout ratio for next year. So my question is why didn't you increase the payout ratio 50% for 2020, I mean, it wouldn't be a massive impact on your cash flow, if you could help me to understand that.
And the 3rd one is on the renewables law in Austria. Has there been any update? When or where can we see any update? What do you And when can we see finally a very good breathing more than a few megawatts of the new capacity given your 2,030 targets? Thank you very much.
Yes, Randall, thank you. I will start with the first one, which is a very logical question, And I will go through the items why we have Something you already mentioned on the grid, we have a lower contribution. There are basically two reasons. The first one is That we have a very large regulatory account of around 315,000,000 For today, we are decreasing the regulatory accounts to around EUR 280,000,000 So that is €35,000,000 right there, which has an impact. At the same time, we will have A lower contribution from the grid because of congestion management.
Let me remind you that in 2020, We had lower expenses on concession management. As a result of that, the IFRS numbers were higher than we had originally Expect that. Now we also think that flexibility products are going to come down By, as you have seen before, quite a significant number. And then, of course, as we have a very Large plan in terms of growth and CapEx and investments in a lot of different areas, The grid side, then of course, hydro, new renewables, we're working on a number of hydrogen projects. Our cost OpEx has gone up by approximately €40,000,000 between personnel and Other operating expenses.
So when you take all that together, you get to the delta which you were looking for. Now in terms of the dividend, we have increased our dividend For the year 2020 to EUR 0.75 you might remember that The previous dividend was €0.69 So we were basically guided by giving you A linear development in our dividend payments, so when you go all the way back to 2016, you will see that every year We have paid higher dividend in absolute numbers. We have increased again here between 2019 2020. And we also want to show you a dividend increase in 2021, which is the reason why we have Increased our payout ratio from the original range of 40 to 50 to 45 to 55 to give us more flexibility to increase the payout ratio if necessary. The third point was on the renewables.
If I understood you correctly, you were looking for an update in terms of the Renewables framework, I cannot give you an update because The entire law still has to go through parliament before it will finally Be published with all its specifics and details We'll probably be around the summer, so please bear with us on the law. But I can tell you, and this is something I've already said last I don't think that the law will have a huge impact on us In terms of renewable build out, we could get we could have some impact On pump storage and possibly on smaller hydro, but there we don't have any details. But in terms of PV and wind, as far as I see it today, it is a modest focus on smaller PV installations, I think retail and smaller companies Should be incentivized to build small PV on the roofs.
Thank you very much. Just one quick follow-up. When you said the contracts is going up by €40,000,000 is it something that we should incur Right into our models for the next few years? Or is it just a one off this year? And sorry, I missed the hydro levels year to date.
If
Yes. The hydro levels per se are 1.03 And you should account for the EUR 40,000,000 OpEx increase in your models going forward.
Brilliant. Thanks a lot.
And the next question is from Bodo Schumacher, Societe Generale. Your line is now open. Please go ahead.
Good morning. My first question is also on the great mystery that is your Full year guidance given at the beginning of the year. Did I understand correctly that you have not Included Gas Connect Austria in the guidance numbers you gave us?
Ludo, you have only one question. Is this possible? Only one question, Okay. Only one for now.
I can come up with many sub questions. So basically, if Gasconnek Austria, which you say the expected EBITDA contribution is €65,000,000 So that is not Included in the guidance, the full year guidance you have?
Yes. It's not included in the full year guidance.
So we should really think about the mid range of your guidance as €1,250,000,000 instead of the €1,190,000,000 Do you expect of the EUR 1,190,000,000?
You can, Duhr. But what we will do is, As soon as we have closed and come out with the consolidated numbers, we will give you new guidance, Which basically encompasses both Gasconet Austria and the additional data points which we have at that point in time.
Okay. I mean that's still that's helpful. Thank you. It's still I mean power prices, Carbon, of course, being the main driver here, has moved ahead quite sharply. You're still relatively open for 2021, only 66% hedged.
You already gave the mark to market there. I would So it actually had a slightly bigger impact. It still seems even the midpoint seems Quite conservative given that I think you also said on the Flexibility Products that your guidance is quite conservative. I mean also I'm not quite sure why you Expect flexibility products to come down in the year where we would hopefully see demand Recovery. So maybe you can elaborate a bit on this and then, of course, your view on current pound prices and CO2 prices.
Sure. Well, first of all, on the hedging levels. The hedging levels, if I include today, sort of like the situation part today It's slightly higher. It's already above 70%. And there, the mark to market would be around 46.
Now you're right, Lueder. If CO2 prices go up further, if power prices go up further, I. E, the short forward and the spot prices, which we will then use For 2021, then of course, there is an upside. However, We have seen a lot of volatility within the last few years. We have seen major moves upwards, but we have also seen Huge moves downwards.
So that is something where it remains to be seen. And what we have taken is we have taken the current forward in order to come up with the EUR46. But yes, there is an opportunity. Then in terms of flexibility products, It is very hard, and I'm perfectly fine to admit that. It is very hard to Really determine what concession management would be Even for the next 4 to 6 weeks, let alone for the entire year.
That is, as you can imagine, a discussion we are having with our experts In terms of congestion management, but it depends on so many variables that it is very difficult to say. But what we see is That with the grid build out, which has happened over the last few years, With the 4,900 Megawatts Electricity Frontier Between Germany and Austria, we have seen that there is slightly less pressure on congestion management. That is the reason why we think that Flexibility Products will come down slightly, and we're also predicting slightly lower Pumping and Turbine for this year. So in a combination between those 2, this is where Our assessment is coming from and then we think that in terms of storage, we have used In terms of our optimization of our storage content in the Alps, we have done quite a lot in the last quarter of last year, Which you have seen in the increase, which I have described before, of between 14% 15%. We are estimating for this year that we will use slightly less from our pump storage.
I can't give you a specific number. But if you take all that together with the points I made to Wanda before, this is how you come up with the guidance, Which we have given. But what you said is very important. Those numbers do not include Gasconic Austria.
Thank you. Just one follow-up question, if I may. You said on the grid EBITDA that the regulatory account Has come down by €35,000,000 in or will come down in 2021. Is that Something we should expect on a regular basis, I. E, every year, there should be these headwinds of EUR 35,000,000?
Yes. We have discussed that the regulatory count will be decreased. I wouldn't say that we have to account for SEK 35,000,000 every year. We think that because it has gone up so much, Higher than we expected because the regulator has not included the regulatory account in the last few tariff runs. We actually want the regulatory accounts to be decreased.
So we think that Possibly. I mean, we don't have an agreement yet with the regulator, but we assume this year, euros 35,000,000. It could be less. And then going forward, what we would like to do is decrease the regulatory count by between EUR 20,000,000 and EUR 25,000,000.
20 to 25. That's great.
Thank you
very much. The
next question is from Tellez of Scheinwright, IFRS Bank International. Your line is now open. Please go ahead.
Yes, thank you. Good morning. As I can hear some reluctance to comment on the Renewables expansion law, I'd rather focus on renewables in general. Your CapEx plan Shams, a marked increase in expenses for new renewables in 2023. Could you shed some light on the pipeline as So these assets are now under high demand.
It's quite a seller's market. Just to give you a feeling, This will be my first question.
Yes, sure. The organic pipeline, As we in this realm have discussed before, it's very challenging. This is not just true for Austria, but it's also for Germany. Just to give you an example, in Germany, around 100 Gigawatts of solar, at least, should be built until 2,030. And if you look at the Annual progress that has been made there, it is not the 10 gigawatts per annum, but it is much, much less.
I think we're going to have a similar issue in Austria. I think that the 12,000 Megawatts that need to be built in Austria until 2,030 In PV, it's a very, very significant number. We're currently at 1700 megawatts, So that is a dramatic increase. And when you know Austria and the Austrian Topographic situation, you will see that this is challenging. As a result of that, we think that our Organic growth in Austria in PV is not going to be a huge number.
It's not going to be very significant. However, We think that on the inorganic side in Germany, but also outside Germany, We will make acquisitions within the next few years, and those acquisitions Should increase our installed capacity significantly.
Thank you.
And another maybe a bit general and philosophical question as well. On its At Power Day this week, VW announced the charging EVs, electric vehicles one day will be for free. So how would you see Sapond in such a potential world, also with respect to your engagement in Smaltrex And also the consensus for Austria that actually 3 20 charging stations would have to be built each day To achieve the 30% electric vehicle target by 2013.
Yes. I think that The plans in terms of charging stations when you look across Europe and the reality with a few Norway being a very well known one, the Netherlands also doing extremely well. But then there are many parts of Europe where the build up of charging stations is very slow. The reason is that the business model Only works if you can really have huge scale, which is why I think that over the next 5 to 10 years, We are going to see a relatively small number of players that are going to run charging stations Across wide geographic regions in order to take advantage of scalability. Our business It's a regional business, very much focused on Austria and Germany.
And we have 2 components of the business. 1 is the managed infrastructure, which is basically everything you need On top of the hardware, and then we have a joint venture together with E and BW for charging stations.
The next question is from Martin Desiles, Dufour. Your line is now open. Please go ahead.
Yes, good morning. I have Two questions. The first one is the following. You indicate €65,000,000 of EBITDA and €1,000,000 in group results in 2021 from GCA. Can you confirm that These numbers factor in the returns of the new regulatory period that Started this year and until 2024, just to be sure that we don't have to adjust another time with lower Returns, I guess.
And the second question, you just said that you still Consider M and A in renewables. It's still on your agenda. But could you give us your view on the Current valuations on the sector, do you think that you will need to wait until there is A further correction of valuations? Or do you think that some deals Could be seen as attractive even today? Thanks.
Yes. On the first one, the regulatory framework is going to be stable. We have for the gas business, We have a regulatory period that is actually longer than the one for APG until 2024. So within the regulatory period, there will not be Any changes? On the second one, now that is a very difficult and highly philosophical question.
The valuation of renewables is complex, if I may say. The key driver for calculating returns on renewables, both Onshore, offshore and TV and of course, hydro as well, but hydro is a little bit different, I can explain it in a second, It's, of course, the power price, the captured price. We know in different regions, we know exactly in different regions How many sun hours we have in Central Europe? It's around 1,000. In Spain, it is around 2,000.
That has a Significant impact on the profitability of solar. On the wind side, we have highly sophisticated measurements. We don't have as much history as with PV looking back, but it is a Pretty good science to look at wind and wind hours. As a result of that, The key parameters for the IRR calculations are obviously the power price, Which determines the cash flow in the future. Then it is the length of your investments.
You might Remember that we had a time not too long ago when we looked at 20 years, then it was increased to 25 years. Now it is everybody is looking at a life cycle of 35 years. In PV, some people argue that it should be 40 years Because of technical progress and quality of the panels and installations, I think for the year me personally, I think 40 years is too long. We use 35 years now. So and then, of course, it's the discount rate.
It's the WACC. And the WACC For everybody, it has come down a lot. And then all that is framed in a trend, Which is massive and it's which is going in only one direction, and that trend is that every Utility and a lot of financial players are buying renewables. So you're right. The prices have gone up.
They have gone up a lot, but it is very, very difficult to predict what they're going to be in the future. As a result of that, everybody needs to rely on their own models and their own calculations. As we have discussed on this very conference call a few times, we are trying to take a very Entrepreneurial approach, we don't just look at our model and future cash flows. We do a lot of simulations. We look at a lot of different scenarios, and then we come up with numbers, which we think are the appropriate ones In terms of risk return relationship, as a result of that, we have participated in the past in a number of M and A situations.
Sometimes, we have come close to winning. But so far, we have not acquired A big inorganic situation. In the future, we will continue to do so. And if it takes longer to buy because we stick to what we think is the right price, We have many as you can see from our CapEx numbers, we have many opportunities to invest, I. E, into hydro, into the grid, into substance At our hydropower stations and then, of course, into the organic growth in Germany and Austria.
So I just wanted to ask you about this In the 3 projects, this 4.80 megawatts, dollars 4.80,000,000 investment that you discussed in your report. And on the topic of returns, I just want to ask what investment signals are you seeing To support the FID on this quite large investment, and should we think about a certain pump spread range that makes This kind of hydro project is economical. And also if you have more projects of this size in the partner for the next few years Or actually, this is perhaps a special one. And the final one is what the compression Is it for this particular project? I think you're expecting to take a 5 gs this year, but presumably it will take a few years to And whether this is in your 2021 to 2023 CapEx budget or actually falls beyond that horizon?
Yes. Those are very good points, and I will go through them line by line. First of all, just to give you the Versailles perspective, Lindegh 3 is a project we have been working on for a very, very long time, not talking sort of like 5, 6 years, rather decades. Lindbergh, Lindbergh, Lindbergh 3 is, you're right, very complex in terms of building it. It is part Of a set of reservoirs and pumping stations That are all building 1 huge complex in 2,000 meters up in the Alps.
And at the same time, this is exactly where for Gundex sells. Doing those complex hydropower projects without being arrogant, I think we are among the best in the world. And this is something where I'm extremely confident that we are going to build it within the time frame, which we have given you. Now why does it make sense from a business point of view? It is part of this complex system and it allows us with the newest pumps which we're going to use For this 4 80 Megawatt project, to take advantage of Low prices and high prices every second of the day.
So we have the capacity also by Creating a 13,000,000 cubic meters more reservoir, Which comes also with the Lindbergh III project, we are going to we will be able to take advantage of the pump spreads 20 fourseven at a high volume. That is going to optimize our entire Kebron fleet, Which also includes Lindbergh 1 and Lindbergh 2. And the project as a result of that, Particularly within the framework of the energy transformation we're going through, we think is a very significant one For bonds, and it will make sense from a system point of view, From the fact that what the future is going to look like in terms of needing palm storage, But also in terms of its cash flow contribution to the business. Did you have an additional question with regards to Lindbergh?
I think it was on conclusion on whether the CapEx is in your 3 year horizon or falls beyond that.
Yes. Now in terms of the CapEx, only part of the CapEx is included In our figures, I can tell you why. Lindbergh 3 has only been approved yesterday afternoon. We had a supervisory board meeting yesterday, and we have received approval for building inventory. As a result, it has not been fully included into the numbers.
So when you look at the numbers of SEK 2,300,000,000 And if you include Linbrecht 3, the numbers will go up. However, those are 3 year figures And some areas might not be as high as we have originally anticipated because of Lindbergh. So I would not add the full €480,000,000 on top of the existing figures, but a smaller amount.
And there are no further questions. So I hand back to the speakers for closing remarks.
Which we would like to thank you for. I wish you all the best. Stay healthy and look forward to speaking to you soon. Thank you.