Alpiq adopts comprehensive restructuring programme

Transcription

1 Foto: ETH Zürich, Tonatiuh Ambrosetti Alpiq adopts comprehensive restructuring programme

2 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 2

3 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 3

4 Earnings plummet recovery only in the mid-term - Surplus production capacities - Low (in some cases negative) margins (peak - base load, electricity - fuel) - Strong Swiss franc - Aversion following Fukushima - Regulatory changes - Recovery from 2014 at the earliest Photo: ETH Zürich, Tonatiuh Ambrosetti 4

5 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 5

6 Alpiq is heavily affected - High dependency on market and exports - Significant share of wholesale - Lucrative contracts due to expire - High debt - No direct or indirect state guarantees - Complex business model 6

7 Alpiq is heavily affected: Earnings plummet compared to the prior-year period Revenue EBITDA EBIT Profit 3% to CHF billion 22% to CHF 832 million 39% to CHF 418 million 57% to CHF 180 million Main reasons: CHF/Euro exchange rate, prices/spreads, Fukushima consequences, hydraulicity CH/Romania 7

8 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 8

9 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 9

10 Focus on Switzerland and profitable niche markets abroad A) Further develop the attractive power plant portfolio B) Focus trading on the marketing of self-generated energy C) Concentrate sales on Switzerland, France, Italy and Romania D) Strengthen the energy efficiency business 10

11 A) Appropriate further development of the attractive power plant portfolio - Switzerland: Focus on hydropower (e.g. Nant de Drance, FMHL+, Navizence) - Switzerland: Lifecycles: Make full use of power generation capacities - Internationally: Focus on profitable power plants, longterm contracts and renewable energies Photo: ETH Zürich, Tonatiuh Ambrosetti 11

12 B) Focus trading on marketing self-generated energy - Concentration on the best possible management/ marketing of proprietary power plants and long-term contracts - Largely refrain from additional trading activities; particularly proprietary trading - Centralised market analysis and other support functions Photo: ETH Zürich, Tonatiuh Ambrosetti 12

13 C) Concentrate sales on Switzerland, France, Italy and Romania: - Switzerland: Affiliated sales partners, selected sales partners => wholesale - France, Romania and Italy => wholesale and large end consumers - Concentration of wholesale activities in Central Europe on efficient procurement (long-term contracts) as well as profitable niches/products => cross-border trading, wholesale 13

14 D) Strengthen the energy efficiency business - Exploit the potential for growth in the energy efficiency business due to energy policy objectives (optimised consumption, building technology/installation, facility management and e-mobility) - Consistently exploit the AIT Group's unique position in combination with the energy business area Photo: ETH Zürich, Tonatiuh Ambrosetti 14

15 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 15

16 Regaining dynamism - Align the structure and business model to the new strategic direction - Consistently simplify the organisation - Drastically reduce interfaces - Shorten decision-making channels - Simplify processes sustainably Photo: ETH Zürich, Tonatiuh Ambrosetti 16

17 Simplify the organisation and reduce costs Decision Result Adjust strategy / business model Reorganisation of Trading & Services A Focus on energy efficiency Dissolve the Energy Services division Move AIT to B Energy Switzerland division Move RES to the area with the greatest potential (International division) C 17

18 Organisation of business divisions General Management General Management Hans E. Schweickardt CEO a.i. Functional divisions Financial Services Kurt Baumgartner* CFO Management Services Benoît Revaz * Business Divisions Energy International Reinhold Frank* Energy Switzerland Michael Wider* Deputy CEO Optimisation & Trading Erik Saether a.i.* Business Units Market Central Europe Peter Dworak Market Switzerland Martin Eschle Portfolio Optimisation & Trading CH Pierre Guesry Market Western Europe Stefano Colombo Nuclear & Thermal Power Generation Michaël Plaschy Portfolio Optimisation & Trading INT Thomas Ruckstuhl Power Generation International Matthias Zwicky Hydro Power Generation Jörg Aeberhard Middle Office & Operations Frédéric Rivier RES Renato Sturani AIT Peter Limacher Finance & Services N.N. Finance & Services Edgar Lehrmann Grid Christian Brunner Finance & Services Daniel Spinnler (*) Member of the Executive Board 18

19 Enhancing earning prospects through cost reduction Objective: - CHF 100 million by the end of 2012 in addition to the CHF 60 million already saved in 2010/11 - Of which CHF 50 million through workforce reduction - And CHF 50 million through additional cost savings (structures, systems, support functions, consultants, etc.) results will be impacted by the expected restructuring costs 19

20 Workforce reduction as a result of the realignment - Jobs structure adjusted to the new business model and new organisation - Around 450 FTEs to be shed in the Energy Segment around half of these in Switzerland - No proportional reduction (not every business area will be equally affected) - Severance plan being prepared 20

21 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 21

22 Restoring the financial balance Package of measures - Enhance earnings prospects - Reduce investments - Generate cash inflows through divestments and reduction in subholdings - Reduce balance sheet risks - This will reduce net debt by the end of 2014 by CHF billion 22

23 Objectives of the financial restructuring 1. Improving results from Ensure capital market capability (rating) 3. Obtain an adequate equity base 4. Remain liquid at all times 5. Concentrate the financial burden on

24 Reduce investments Objective: Reduce investment programme by around CHF 0.7 billion to CHF 1.3 billion - Curtail investments in renewable energies - Concentrate investments in replacements and renovations - Postpone expansion projects - Ensure the continuation of current projects 24

25 Generate cash inflows through divestments and subholdings Objective: Additional cash inflows of around billion in Sale of expendable activities - In progress: AAT and Edipower - Additional divestments being prepared - Reduction in subholdings 25

26 Reduce balance sheet risks Impairments and provisions of around CHF 1.7 billion on assets charged to 2011 financial year - Book losses on planned disposals - Impairments on continuing operations - Impairments due to portfolio streamlining - Provision for restructuring costs 26

27 Effects of the financial restructuring annual results will show a net loss - Future results will be at a lower level - Debt will be significantly reduced - The quality of results and the balance sheet will be substantially improved - Solvency is assured at all times - The financial balance will be restored by 2013/14 27

28 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 28

29 Summary - Current situation and outlooks call for consistent measures > concentrate on the profitable core business > simplify the organisation and reduce costs > restore the financial balance - Organisational adjustments apply immediately - Project organisation adopted; Project Leader: Dr. Günter H. Pfeiffer 29

30 Agenda 1. Fundamental changes are exerting pressure on the electricity industry 2. Alpiq is heavily affected 3. Sweeping measures required Concentrate on the profitable core business Simplify the organisation and reduce costs Restore financial balance 4. Summary 5. Outlook 30

31 Alpiq's positioning - CH: Broad presence in all parts of the country - CH: Uniquely poised for the growth market Energy efficiency (combination of energy/energy services) - EU: established in interesting markets and niches - Attractive power plant portfolio in CH and selected EU countries - Strong in renewable energies thanks to pump storage power plants 31

32 The new Alpiq is ready for the future - Alpiq remains an important source of employment in many Swiss regions (approx. 5,000 jobs in Switzerland also in the future) - Alpiq remains committed to reliable electricity supplies at competitive prices - Alpiq is aware of its responsibility to the economy - With these measures, Alpiq will secure the basis for the company's long-term success in a changing environment - Alpiq is building up strengths in energy efficiency and low-carbon power generation 32

33 Any questions? 33 Photo: ETH Zürich, Tonatiuh Ambrosetti