EnBW made good progress in the previous financial year in implementing its 2020 business strategy, while it reported that its adjusted EBITDA in 2014 was 2.6% lower than in previous year.
As a result of expectations of a continued fall in electricity prices, it was however necessary to make significant write-downs on the EnBW power plant portfolio and electricity supply contracts, the company said. This led to a Group net loss of 451 million euros.
The EnBW Chief Executive Officer Frank Mastiaux thus made a distinction when commenting on the result: “Due to our efficiency measures, we were able to achieve a respectable operating result despite the difficult conditions. However, this was overshadowed by the high write-downs on our power plant portfolio and the resulting Group net loss. In addition, we see room for improvement in the implementation of some of our growth projects, especially those in the areas of sales and renewable energies. We will take action to remedy this situation.”
EnBW is expecting continued difficult conditions for the current financial year. Furthermore, energy policy decisions are expected that could have an impact on business performance. These primarily include the clarification of the future role of conventional generation and clarification of important issues relating to phasing out nuclear power and the expansion of the transmission grids.
According to Mastiaux , EnBW is ready to use its expertise to contribute to finding a solution to these issues. But the company also has clear expectations. “The large energy companies were certainly not the pioneers of the German Energiewende but I can now clearly state that at EnBW we have been doing our homework. We have adapted our strategy, our structure, our culture and our budget to the Energiewende and its requirements. We are ready and willing to act. It is now up to the politicians to catch up and to deliver on their task: Making clear decisions and defining a reliable framework in which we can operate.”
Despite the renewed burdens on the energy sector and the uncertainties surrounding energy policy, EnBW also aims to achieve an operating result of 0 to -5 percent below the previous year in 2015. In the process, the company will focus, amongst other things, on the rapid expansion of wind power.
As a result of the commissioning of the offshore wind farm Baltic 2 and a number of onshore projects, the installed wind power will more than double in 2015 by 455 megawatts to 790 megawatts. The result in the area of renewable energies is set to improve by at least 20 percent, EnBW said.
The area of sales will also be strengthened with a new structure and will benefit from new products and business models, according to the CEO. This should be reflected in an increase in earnings of between 10 and 20 percent. In the regulated and largely stable grids business, the level of investment will be increased to over 560 million euros. The Generation and Trading segment is anticipated to decline by between 15 percent and 25 percent due to continued falling wholesale prices.
“Our goals are ambitious,” underlined Mastiaux in conclusion, “and the market will not give anything away for free. Therefore, we will also fully concentrate on the implementation of our strategy in 2015. When it comes to the restructuring of EnBW, we are well on course but there is still a long way to go. And until we get there our motto remains: perform and deliver.”
Image: EnBW