Annual Media Conference 2013 | 14 financial year Andrew Walo, CEO Axpo Holding AG Seite 1 Axpo Holding AG Business results for 2013 | 14 Solid operating result in a challenging environment • • • • • • • Operating profit (EBITDA) of CHF 635 million Operating cash flow CHF 765 million Total energy supplied higher at 79.5 billion kWh Origination business grows by around 40% Good result in international energy trading (CHF 142 million) Solid equity of CHF 7.5 billion (equity ratio of 37.2%) Profitability programme contributes CHF 25 million but also: • Value adjustments on power plants and energy supply contracts of CHF 1.5 billion net • Negative business result of CHF –730 million Seite 2 Annual Media Conference | 19.12.2014 | Axpo Holding AG Highlights and milestones 2013 | 14 Seite 3 Annual Media Conference | 19.12.2014 | Axpo Holding AG Our strategic focus 1. Optimisation of core business 2. Exploitation of new areas of business 3. Cost savings 4. Targeted investments Seite 4 Annual Media Conference | 19.12.2014 | Axpo Holding AG Strong trading position • Local presence in more than 20 European markets for 15 years • Strong position in international electricity trading • Strong origination business (around 40% growth) • Second line of business in addition to production Seite 5 Annual Media Conference | 19.12.2014 | Axpo Holding AG Axpo X-REM –information system for wind power plants • X-REM: Renewable Energy Management • Already used successfully in European market (>1,000 MW) • Current focus: wind farm customers in origination business Seite 6 Annual Media Conference | 19.12.2014 | Axpo Holding AG First successes for profitability programme • Savings of CHF 25 million realised in 2013/14 • Measures introduced to optimise costs by CHF 50 million in 2014/15 financial year • Objective: savings of CHF 200 million by 2016/17 financial year • More flexible and efficient structures introduced • Reduction of 300 jobs net by 2016/17 planned, new jobs to be created in profitable areas • First 80 jobs shed in 2014 • New business areas: projects identified and in progress Seite 7 Annual Media Conference | 19.12.2014 | Axpo Holding AG New Executive Board Andrew Walo Martin Schwab Domenico De Luca Andy Heiz Felix Graf CEO Axpo Holding AG CFO Axpo Holding AG Head Business Area Trading & Sales Head Business Area Assets CEO CKW 01.02.2014 01.02.2011 01.10.2014 01.11.2014 01.02.2014 Seite 8 Annual Media Conference | 19.12.2014 | Axpo Holding AG Wind power - Global Tech 1 offshore wind farm • 80 wind power plants installed in Germany's North Sea • Connection to grid & commissioning 2015 • Future Axpo production from wind energy: 700 millions kWh (of which 400 millions kWh by GT1) Seite 9 Annual Media Conference | 19.12.2014 | Axpo Holding AG Linthal 2015 –dam wall completed • • • • • Project on course: grid synchronisation of first machine group (end of 2015) Costs of CHF 2.1 billion are on budget Longest dam wall in Switzerland (more than 1 km) Highest dam in Europe (2,500 m above sea level) Construction of generator gallery ongoing Seite 10 Annual Media Conference | 19.12.2014 | Axpo Holding AG 100 years of Axpo: open house at Linthal 2015 Seite 11 Annual Media Conference | 19.12.2014 | Axpo Holding AG Investments in safety of nuclear power plants • Beznau and Leibstadt nuclear power plants meet the highest safety standards • Beznau is building two autonomous bunkered buildings for emergency diesel generators • 2015: preventive replacement of both reactor pressure vessel closure heads and installation of new information system (Nexis) and simulator Seite 12 Annual Media Conference | 19.12.2014 | Axpo Holding AG Trans Adriatic Pipeline (TAP) • Italian government approves environmental impact assessment • From 2020: first gas should flow to Europe through TAP • Cancellation of south stream confirms Axpo's business case Seite 13 Annual Media Conference | 19.12.2014 | Axpo Holding AG CKW builds data centre for customers • New data centre for large companies and SMEs • Around CHF 20 million investment in data safety in the Central Switzerland economic region • Surface area of 1,200 square metres • To open in 2015 • Ideal location, also for national companies Seite 14 Annual Media Conference | 19.12.2014 | Axpo Holding AG Challenges posed by market and politics Seite 15 Annual Media Conference | 19.12.2014 | Axpo Holding AG Energy markets •Economic growth remains muted •Feed-in of subsidised energy continues to rise •Prices on European wholesale markets remain low •Prices for CO2 certificates remain low in spite of backloading (certificate auctions) •Stable CHF/EUR exchange rate •Persistently low coal prices •Result: price collapse and unprofitable Swiss power plants Seite 16 Annual Media Conference | 19.12.2014 | Axpo Holding AG Development of wholesale prices Wholesale prices for electricity, Germany (EUR/MWh) Monthly forward market prices DE: until 08/2014, monthly price for front year, £ from 2015-2020, the price at which the front years traded in 08/2014 Seite 17 Source: EEX Annual Media Conference | 19.12.2014 | Axpo Holding AG Political parameters •Political and regulatory environment is uncertain •Market liberalisation: will it happen? When? How? •CH/EU bilateral electricity agreement is still unclear •Does the Federal Council's energy strategy guarantee a secure, competitive and environmentally benign supply of energy? •Long-term operating concept endangers safety and destroys value Seite 18 Annual Media Conference | 19.12.2014 | Axpo Holding AG Market opportunities for Axpo in Europe Seite 19 Annual Media Conference | 19.12.2014 | Axpo Holding AG Axpo in Europe –areas of growth • Expansion of wind farm management (currently 12,000 MW of wind power managed by Axpo) • Expansion of end customer business • Further expansion of origination business • Preparation for connection of Linthal 2015 to market Seite 20 Annual Media Conference | 19.12.2014 | Axpo Holding AG Axpo in Europa Axpo Iberia (Madrid) • Biggest portfolio of renewable energies in Spain (installed capacity of more than 7,000 MW) Locations & Services Assets Projects • Biggest marketer of wind power in Spain • Developed X-REM System Seite 21 Annual Media Conference | 19.12.2014 | Axpo Holding AG Axpo in Europa Axpo Italia (Genua) • Trading business and local production plants • Strong retail trade –100,000 entry points • Strong expansion of household segment planned for 2015 • Installed capacity of around 1,800 MW (combined-cycle power plants) • 66 MW output (wind farms) • 1,580 MW output from renewable energies Seite 22 Locations & Services Assets Projects Annual Media Conference | 19.12.2014 | Axpo Holding AG Axpo in Europa Axpo Nordics (Oslo) • Many years of trading experience Locations & Services Assets Projects • Leader in origination business • Customised solutions for wind power industry • Entry into gas business planned Seite 23 Annual Media Conference | 19.12.2014 | Axpo Holding AG Conclusions Seite 24 Annual Media Conference | 19.12.2014 | Axpo Holding AG Axpo is well positioned Solid operating result thanks to: •Wide-ranging measures to improve profitability •Strong trading position in Europe •New strategic focus Seite 25 Annual Media Conference | 19.12.2014 | Axpo Holding AG Fit for the future • Broad-based value chain from production to socket • Successful trading business as second earnings pillar • Axpo’ s expertise allowed the exploitation of good market opportunities in other countries • Financially solid (high equity, net financial assets) • Flexible organisational structure, successful efficiency programme Seite 26 Annual Media Conference | 19.12.2014 | Axpo Holding AG
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