Republic of Austria
Republic of Austria
Investor Information – February 2015
Austrian Treasury
Republic of Austria
Agenda
1.
General Overview – Austria‘s favourable fundamentals
2.
Funding Strategy Republic of Austria
Investor Information, February 2015
3
24
2
Republic of Austria
Austria – Key Data and Facts
Austria
Euro-Zone
84
2.758
0.5%
0.2%
GDP per capita 2013 (EUR)
38.054
29.339
Net financial assets
per private household (EUR)
92.615
84.750
Unit Labour Costs1
(2000 – 2013, average yearly
change)
1.46%
1.68%
Area (sq. km ‘000)
Population growth
(2013 – 2016, average yearly
change)
 Euro-Zone (EU19)
 EU28
Source: Eurostat, OECD
1) in nominal terms
Investor Information, February 2015
1. Austria‘s favourable fundamentals
3
Republic of Austria
Austria – Key Data and Facts
in %
Austria
Euro-Zone
Real GDP growth
0.2
0.4
0.5
-0.5
0.8
1.3
Inflation (HICP)
2.1
1.7
1.8
1.4
0.4
-0.1
Unemployment
4.9
5.0
5.3
12.0
11.6
11.2
Current Account Balance
2.3
2.4
2.7
2.4
2.5
2.6
Budget Balance (Maastricht)
-1.5
-2.8
-1.9
-2.9
-2.6
-2.2
Structural Budget Balance
-1.3
-1.0
-1.0
-1.2
-1.0
-1.2
Debt to GDP
81.2
86.5
85.6
93.1
94.3
94.4
2013
2014
2015
2013
2014
2015
Year
Source: Data on Austria: Federal Ministry of Finance, October 2014 Austrian Institute of Economic Research, December 2014 / EC – Winter Forecast, February 2015
Data on Euro-Zone: EC – Winter Forecast, February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
4
Republic of Austria
Austria – GDP and Exports
Composition of Austrian GDP1
2013
EUR 322 bn
Consumption
74%
Investments
23%
Net exports
3%
Exports
53%
Imports
50%
Geographic Distribution2
Imports
Asia Australia
0%
12%
America
5%
Africa
2%
EUOthers
EU-28
10%
71%
Exports
America
8%
Africa
1%
EUOthers
11%
Asia
10%
Australia
1%
EU-28
69%
Eurozone: 57.8%
Eurozone: 51.9%
Europe:
Europe:
81.5%
80.3%
Source: 1) Statistics Austria as of September 2014
2) Statistics Austria as of June 2014
Investor Information, February 2015
1. Austria‘s favourable fundamentals
5
Republic of Austria
Composition of the Austrian GDP Low exposure to financial sector (4.1% of GDP)
Other service
activities
Education; human 2.5%
health and social
work activities
10.9%
Agriculture, forestry
and fishing
1.3%
Mining and
quarrying;
manufacturing
16.9%
Public
administration
4.6%
Electricity; water
supply; sewerage
and waste
management
2.6%
Other
administrative and
support service
activities
8.3%
Construction
5.6%
Real estate
activities
8.7%
Wholesale and
retail trade
11.1%
Financial
intermediation
4.1%
Source: Statistics Austria as of September 2014
Investor Information, February 2015
Information and
communication
2.9%
Transportation
5.2%
Accommodation
and food service
activities
4.5%
1. Austria‘s favourable fundamentals
6
Republic of Austria
Ratings Overview
Long Term
Short Term
Outlook
Moody‘s
Aaa
P-1
Stable
Standard & Poors
AA+
A-1+
Stable
Fitch
AA+
F1+
Stable
DBRS
AAA
R-1 (high)
Stable
Sustainability Country Rating
Sustainalytics
Ranked 9th out of 171 countries worldwide
oekom research
Ranked 8th out of 57 countries worldwide
• All rating reports available online at www.oebfa.at
Investor Information, February 2015
1. Austria‘s favourable fundamentals
7
Republic of Austria
Austria’s High Institutional Strength
Worldbank Governance Indicators 2013
2.5
2
Rule of Law
Government Effectiveness
Voice and Accountability
Political Stability & Absence of Violence
• Rule of Law:
ranked 6 out of 215 countries
worldwide
• Political Stability & Absence
of Violence:
ranked 10 out of 215 countries
worldwide
1.5
1
• Voice and Accountability:
ranked 11 out of 215 countries
worldwide
0.5
• Government Effectiveness:
ranked 16 out of 215 countries
worldwide
0
Note: Values range from -2.5 (weak) to +2.5 (strong)
Investor Information, February 2015
1. Austria‘s favourable fundamentals
8
Republic of Austria
Austria’s Favourable Fiscal Position
Austria’s Government Debt Ratio lower than Euro Area and European average
% of GDP
110
Forecast
100
90
80
70
60
50
40
30
20
10
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Austria
Euro area
EU
Source: Data on Austria: Statistics Austria, November 2014 / Federal Ministry of Finance, October 2014
Data on EU28 & Euro-Zone: EC – Winter Forecast, February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
9
Republic of Austria
Austria’s Favourable Fiscal Position
Budget deficit
% of GDP
0
-1
-2
-3
-4
-5
-6
-7
Legally binding medium-term expenditure
ceilings and implemented debt brake
greatly improve budgetary discipline
Forecast
-8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Austria
Euro area
EU
More details on the federal budget reform: https://english.bmf.gv.at/budget-economic-policy/The-Austrian-Federal-Budget-Reform.html
Source: Data on Austria: Statistics Austria, November 2014 / Federal Ministry of Finance, October 2014
Data on EU28 & Euro-Zone: EC – Winter Forecast, February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
10
Republic of Austria
Public Debt/GDP - Europe
Euro area
Non-euro area countries
% of GDP
% of GDP
Estonia
Luxembourg
Latvia
Lithuania
Slovakia
Finland
Netherlands
Malta
Slovenia
Germany
Austria
Spain
France
Euro area
Cyprus
Belgium
Ireland
Italy
Portugal
Greece
10.1
9.8
2013
23.6
22.7
2014e
38.2
40.4
39.0
41.3
54.6
53.6
56.0
58.9
68.6
69.5
69.5
68.6
70.4
82.2
76.9
74.2
81.2
86.5
92.1
98.3
92.2
95.3
93.1
94.3
102.2
107.5
104.5
106.4
123.3
110.8
127.9
131.9
128.0
128.9
174.9
176.3
220 200 180 160 140 120 100 80 60 40 20
Bulgaria
18.3
27.0
2013
2014e
Romania
38.0
38.7
Sweden
38.6
41.4
Denmark
45.1
45.0
Czech Republic
45.7
44.1
55.7
48.6
Poland
Croatia
75.7
81.4
Hungary
77.3
77.7
EU
87.1
88.4
United Kingdom
87.2
88.7
0
120
100
80
60
40
20
0
Source: Data on Austria: Federal Ministry of Finance, October 2014
Data on EU28 & Euro-Zone: EC – Winter Economic Forecast, February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
11
Republic of Austria
Public Debt/GDP - International
Forecast
% of GDP
250
245.1
243.2
245.5
200
150
105.6
104.2
100
93.1
81.2
133.0
131.9
127.9
92.2
86.5
76.9
95.3
94.3
97.1
94.4
105.1
85.6
74.2
71.9
50
0
2013
Austria
2014e
Euro area
Germany
France
2015e
Italy
U.S.
Japan
Source: Federal Ministry of Finance, October 2014 / IMF – WEO, October 2014 / EC – Winter Economic Forecast, February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
12
Republic of Austria
Federal government - Interest payments 1990-2015
• Absolute level of interest payments relatively stable
• Relative to GDP interest payments are now at around 2.2% and still well below peak levels in 1996
in Mil EUR
in % of GDP
8000
7500
7000
6500
6000
5500
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
4.0%
in % of GDP
3.4%
3.5%
3.0%
2.2%
2.5%
2.0%
1.5%
1.0%
0.5%
2015*
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0.0%
* Federal Budget Act (forecast)
Investor Information, February 2015
1. Austria‘s favourable fundamentals
13
Republic of Austria
Indebtedness of households and corporates
Level of corporate and household indebtedness substantially below Euro-Zone average
in % of GDP
70
Household Debt
Corporate Debt1
in % of GDP
110
68
105
66
64
100
62
95
60
58
90
56
54
85
52
50
2006 2007 2008 2009 2010 2011 2012 2013 2014
AT: % of GDP
80
2006 2007 2008 2009 2010 2011 2012 2013 2014
AT: % of GDP
EA: % of GDP
EA: % of GDP
1
Short- and long-term loans, money and capital market
instruments.
Source: European Central Bank, Austrian National Bank, December 2014
Investor Information, February 2015
1. Austria‘s favourable fundamentals
14
Republic of Austria
Total indebtedness of the real economy
Level of total indebtedness in Austria substantially below most advanced countries
Total debt in % of GDP
Japan
Ireland
Portugal
Netherlands
Greece
Belgium
Sweden
Denmark
Spain
France
Italy
United States
United Kingdom
Norway
Finland
Austria
Hungary
Germany
Slovakia
Czech Republic
Poland
Romania
Russia
Government debt
Corporate debt
Household debt
0
50
100
150
200
250
300
350
400
450
Source: IMF World Economic Outlook, European Commission, BIS, Haver Analytics, National Central Banks, McKinsey Global Institute
Data as of 2Q14 for advanced economies (except government debt); 2013 data for other
Government debt data as of end-2014: EC Winter Forecast February 2015 (for EU countries), IMF World Economic Outlook October 2014 (other countries)
Investor Information, February 2015
1. Austria‘s favourable fundamentals
15
Republic of Austria
Austria’s strong competitive position
Current Account Balance
6.0
5.0
4.0
% of GDP
Austria’s sustainable current account surplus
reflects strong international competitiveness
Forecast
3.0
2.0
1.0
0.0
-1.0
-2.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Austria
Euro area
EU
Source: EC – Winter Forecast, February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
16
Republic of Austria
Austria is an International Net Lender
Net lending (+) / net borrowing (-) of the nation in % of GDP
Greece
Portugal
Spain
United States
United Kingdom
Ireland
France
Italy
EU 28
net capital import
net capital export
Canada
Furthermore Austria has a
positive net international investment position
(2.6% of GDP as of Q3 2014)
Euro area (EA19)
Finland
Austria
Japan
Germany
Netherlands
-10
-8
-6
-4
-2
0
2
in % of GDP (average 2003-2014)
4
6
8
10
Source: European Commission (AMECO), February 2015
Investor Information, February 2015
1. Austria‘s favourable fundamentals
17
Republic of Austria
Age-related expenditure well under control
Age-related expenditure in the euro area (projected change in pp of GDP, 2010-2060)
14
12
10
8
6
4
2
Luxembourg
Slovenia
Belgium
Netherlands
Cyprus
Malta
Slovakia
Finland
Ireland
Germany
Spain
Euro area
Austria
France
Greece
Portugal
Italy
Estonia
0
Austria’s pension reforms have successfully mitigated the demographical issue.
Source: European Commission Ageing Report, May 2012
Investor Information, February 2015
1. Austria‘s favourable fundamentals
18
Republic of Austria
Austria‘s population growth outperforms European average
in %
2013 = 100
120
Belgium
115
Austria
Finland
110
France
Netherlands
105
EU28
100
Germany
Spain
95
Portugal
Greece
90
Source: Eurostat, June 2014
Population Projections (main scenario): Assumptions related to fertility, mortality, net international migration as well as the approximated values of life expectancy at birth
Investor Information, February 2015
1. Austria‘s favourable fundamentals
19
Republic of Austria
High Social Stability
Gini coefficient after taxes and transfers
0.50
0.45
0.40
0.35
0.30
0.25
0.20
Austria’s low Gini coefficient indicates a relatively equal income distribution
Source: OECD / Gini (at disposable income, post taxes and transfers 2010), July 2014
Investor Information, February 2015
1. Austria‘s favourable fundamentals
20
Republic of Austria
Austria’s favourable fundamentals
High GDP per capita and low unemployment
Austria’s GDP per capita1:
4th highest in the EU
Austria’s unemployment rate:
2nd Lowest in EU
in % of EU-28 average
in %
150
14
12
Luxembourg: 257
140
10
130
Forecast
8
6
120
4
110
2
100
2004
0
2005
2006
2007
2008
2009
2010
Netherlands
Ireland
Austria
Belgium
Finland
EU 18
2011
Investor Information, February 2015
2013
2001
2003
2005
Austria
Germany
• GDP per capita since 2007 up
from 5th to 4th rank in the EU
Source: European Commission, Eurostat as of December 2014
1) in purchasing power standards
2012
2007
2009
Euro area
2011
2013
2015
EU
• Unemployment rate around half of the
EU-average
• 2nd lowest youth and long-term
unemployment rate in the EU
1. Austria‘s favourable fundamentals
21
Republic of Austria
Innovation Performance
Austria exceeds EU by far
Youth education
attainment level
Community designs
per billion GDP in
PPS
Business R&D
expenditure (% of
GDP)
3.2
2.8
2.4
2.0
1.6
1.2
0.8
0.4
0.0
Community
trademarks
per billion GDP in
PPS
PCT patent
applications
per billion GDP in
PPS
Medium and hightech product exports
(% total product
exports)
SMEs innovating inhouse (% of SMEs)
Innovative SMEs
cooperating with
others (% of SMEs)
Public-private copublications per
million inhabitants
Austria
EU
Source: Eurostat / Note: values for EU normalised to 1
Investor Information, February 2015
1. Austria‘s favourable fundamentals
22
Republic of Austria
Austria
A Safe Haven Core-Eurozone Economy
•
•
•
Diversified and competitive economy (eg ranked 14 out of 186 countries worldwide1)
2nd lowest unemployment in EU
High level of innovation
- R&D expenditure 2013: 2.8% of GDP / among Top-10 worldwide2
•
Strong exports and tourism
- 3rd most diversified export structure (out of 217 countries)3
•
•
•
•
•
•
•
Sustainable current account surplus
Net capital exporting country and positive net international investment position
No housing bubble
High savings ratio / 2nd highest percentage of savers worldwide4
4th richest country in the EU5
3rd out of 162 most peaceful countries in the world 6
Very low vulnerability to climate change / ranked 3 out of 116 countries worldwide7
1)
2)
3)
4)
5)
6)
7)
Euromoney Country Risk Survey, April 2014
Research and Development Expenditures in % of GDP, March 2014 (UNESCO)
UNCTAD Statistics, Concentration and diversification indices of merchandise exports, November 2014
World Development Report 2014 (World Bank)
2013 GDP per capita on purchasing power parities, Eurostat, December 2014
Institute for Economics and Peace, Global Peace Index 2014, August 2014
S&P, May 2014
Investor Information, February 2015
1. Austria‘s favourable fundamentals
23
Republic of Austria
Funding 2015 – around 2% of Eurozone
Total gross funding volume 2005 – 20151
40
Redemptions
35
Net funding volume
30
in bn EUR
25
20
15
10
5
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015e
1) all funding instruments including 10% own quota of the Republic of Austria auctions and pre-funding
Investor Information, February 2015
2. Funding Strategy Republic of Austria
24
Republic of Austria
Funding 2015 - Outlook
Total issuance including all instruments (RAGB, T-bills, EMTN, loans):
2015:
22-24 bn EUR
2014:
28 bn EUR (announced on Dec 5, 2013: 28–30bn EUR)
RAGB issuance 2015:
15–19 bn EUR
RAGB issuance 2014:
22 bn EUR (announced on Dec 5, 2013: 22–26 bn EUR)
2015: one or two syndicated issues
New: FRNs under domestic law / switch to T+2 in the course of 2015
Total portfolio tenor as of end-2015: 7.5 – 8.5 years
Investor Information, February 2015
2. Funding Strategy Republic of Austria
25
Republic of Austria
Auction Calendar 2015
•
•
•
Auction date
Value date
Jan 13
Jan 16
EUR 0.44 bn increase of 1.65% RAGB 2014-2024
EUR 0.66 bn increase of 0.25% RAGB 2014-2019
Feb 10
Feb 13
EUR 0.49 bn increase of 2.40% RAGB 2013-2034
EUR 0.61 bn increase of 1.65% RAGB 2014-2024
Mar 3
Mar 5
Apr 7
Apr 9
May 5
May 7
Jun 9
Jun 11
Jul 7
Jul 9
Aug 4
(Reserve Date)
Aug 6
Sep 1
Sep 3
Oct 6
Oct 8
Nov 3
Nov 5
Dec 15
Dec 17
Volume and tenors are announced one week prior to the auction date at www.oebfa.at
The average tenor of the outstanding debt is 8.6 years (as of January 31, 2015).
A re-opening of existing issues is regularly done in order to enhance liquidity.
Investor Information, February 2015
2. Funding Strategy Republic of Austria
26
Republic of Austria
Cornerstones of Funding Strategy
•
Diversity of funding sources (geographically and by instruments)
•
Financial flexibility (e.g. to adress specific investor demand)
•
Capitalizing on scarcity value and strong fundamentals
•
Secondary market liquidity
•
Monthly auctions
•
20+ RAGB primary dealers, 10 ATB dealers
•
One of the lowest debt rollover ratios
•
Conservative debt management strategy
•
around 95% fixed rate
•
< 10% short term debt
•
No foreign currency risk
•
Well-balanced maturity profile
•
Reliability, Transparency, stability-oriented approach
•
Rigorous Investor Relations Program
Investor Information, February 2015
2. Funding Strategy Republic of Austria
27
Republic of Austria
Debt Rollover Ratio among lowest in Euro area
•
•
•
defined as short-term debt stock of the previous year plus maturing mediumand long-term debt in % of GDP - indicator for refinancing-risk
Austria: very low refinancing-risk
Conservative strategy
Others
Sweden
Turkey
UK
Norway
Switzerland
2013
2014f
7.3
8.9
6.5
8.4
3.3
9
7
6
5
3
Source: S&P European Sovereign Issuance Survey, February 2014
Investor Information, February 2015
EU 18
2013
2014f
Average
(2011-2014)
Italy
Portugal
Belgium
Greece
Cyprus
Netherlands
France
Spain
Ireland
Malta
Germany
Finland
Austria
Slovakia
Slovenia
Latvia
Luxembourg
Estonia
Average
19.6
16.5
18.2
17.2
17.8
12.8
13.2
6.9
13.9
7.4
7.9
6.1
6.5
9.1
5.2
1.8
4.4
0.1
10.3
21
22
15
22
24
13
13
15
10
8
7
5
8
4
10
12
0
0
11.6
20
20
19
19
16
14
13
11
10
8
8
7
6
6
5
5
1
0
10
2. Funding Strategy Republic of Austria
28
Republic of Austria
Investor Base / 1
• About 90% of debt held by investors domiciled in Europe
• Over 80% within the Eurozone1
Domestic
Non-domestic
Prior to introduction of EUR
around 70% (=ATS)
30%
After introduction of EUR
around 80% (=EUR)
20%
Distribution by region2
Europe (incl. Austria)
87%
Distribution by category2
Banks
40%
Asia
5%
Asset managers
27%
Americas
5%
Insurance & pension funds
17%
Africa
2%
Central banks & int. org.
13%
Middle East
1%
Retail
2%
Others
1%
Diversified investor base with Eurozone as home market
(and strong overweight by Austrian investors)
Source: 1) IMF (CPIS) / Austrian National Bank
2) Austrian Treasury estimates: syndicated RAGB issues 2008-2014
Investor Information, February 2015
2. Funding Strategy Republic of Austria
29
Republic of Austria
Investor Base / 2
•
Federal government: at 93% mostly marketable debt
•
Strong domestic wealth
– sustainable current account surplus
– GDP per capita is more than 40% higher than EU-average
•
Facts
– Domestic private sector savings1
gross: 566.6 bn EUR
net: 400.6 bn EUR
– Federal Government Debt at 196.9 bn EUR as of end-January 2015
– Nominal GDP 2014 at 330 bn EUR2
– Domestic investment funds substantially overweight Austrian government
debt against common benchmarks
Source: 1) Austrian National Bank - data as of end Q3 2014
2) Austrian Institute for Economic Research, December 2014
Investor Information, February 2015
2. Funding Strategy Republic of Austria
30
Republic of Austria
Debt Portfolio – Redemption Profile
Well Diversified
25
20
31.12.2013
31.12.2014
15
in bn. EUR
Conservative debt portfolio:
• 8.6 yrs average maturity
• around 95% fixed rate
• among the lowest rollover ratios
worldwide
10
5
0
2071
2069
2067
2065
2063
2061
2059
2057
2055
2053
2. Funding Strategy Republic of Austria
2051
2049
2047
2045
2043
2041
2039
2037
2035
2033
2031
2029
2027
2025
2023
2021
2019
2017
2015
Investor Information, February 2015
31
Republic of Austria
10y Yields - Austria vs. Germany
Yield in %
5.0
4.5
10y Austria benchmark yield
4.0
3.5
3.0
2.5
2.0
10y Germany benchmark yield
1.5
1.0
31.01.15
30.09.14
31.05.14
31.01.14
30.09.13
31.05.13
31.01.13
30.09.12
31.05.12
31.01.12
30.09.11
31.05.11
31.01.11
30.09.10
31.05.10
31.01.10
30.09.09
31.05.09
31.01.09
30.09.08
31.05.08
31.01.08
0.0
30.09.07
0.5
Source: Bloomberg
Investor Information, February 2015
2. Funding Strategy Republic of Austria
32
Republic of Austria
Conclusion – Austria retains Excellent Value
• Strong credit fundamentals, diversified and competitive economy
• Sound financial policies
• High institutional strength
• 2nd lowest unemployment in EU
• Strong exports and tourism
• Sustainable current account surplus
• No bubble in the housing market
• Conservative funding strategy
• Net capital exporting country and positive net international
investment position
Investor Information, February 2015
33
Republic of Austria
Further Information
• www.oebfa.at (Austrian Treasury): auction calendar, debt portfolio, rating reports, etc.
• www.bundesschatz.at (Online retail savings product)
• www.bmf.gv.at (Federal Ministry of Finance): details on the Austrian
budget and Financial Stability Measures
• www.statistik.at (Statistics Austria)
• www.rechnungshof.gv.at/berichte/bundesrechnungsabschluss.html
(Austrian Court of Audit): Reports on the Federal Financial Statements (in German only)
• www.oenb.at (Austrian National Bank)
• www.fiskalrat.at (Austrian Fiscal Advisory Council)
• www.epp.eurostat.ec.europa.eu (Eurostat)
• europa.eu/efc/sub_committee
(EFC Sub-Committee on EU Sovereign Debt Markets)
• www.oekb.at/en/capital-market/government-bonds/pages/default.aspx
(OeKB / Government Bonds page)
Investor Information, February 2015
34
Republic of Austria
Contact
Austrian Treasury
Austria - 1015 Vienna, Seilerstaette 24
Phone: (+43 1) 512 25 11- 0
Web: www.oebfa.at
Reuters: AFFA01…07 Bloomberg: RAGB, AUST
Martha Oberndorfer, CFA, MBA
Managing Director, Treasury / Markets
Capital Markets Contact:
Martin Dymkowski, [email protected], ext. 46
Christoph Frömel, [email protected], ext. 44
Christian Schreckeis, CFA, [email protected], ext. 48
Johannes Stattmann, CFA, [email protected], ext. 37
Markus Stix, [email protected], ext. 22
Günther Wahl, [email protected], ext. 16
Pia Zivanovic-Amann, MBA, [email protected], ext. 47
Investor Information, February 2015
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