Group Presentation 2014 March 2014
Jun 20, 2015
Group Presentation 2014
March 2014
2 | Group Presentation 2014
Content
1 Vattenfall key data, owner’s assignment and history
2 Financial and sustainability targets
3 Organisational structure
4 Strategic focus areas
5 Investment plan
6 Generation volume and capacity per region
This is Vattenfall
• One of Europe’s largest electricity producers
• 100%-owned by the Swedish state
• Main markets: Nordic countries, Germany, Netherlands
• Vattenfall also has operations in:UK (mainly within wind power)
• Main products:Electricity, Heat, Gas
• Operations span the entire energy value chain:Production, Distribution, Trading, Sales and energy advice
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Key data 2013
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Key facts
Net sales 171,684 MSEK
(19,379 MEUR*)
Underlying operating profit 27,900 MSEK
(3,149 MEUR*)
Reported operating profit -6,453 MSEK
(-728 MEUR*)
Electricity generation 181.7 TWh
Sales of electricity 203.3 TWh
Sales of heat 30.2 TWh
Sales of gas 55.8 TWh
Number of employees (FTE) 31,819
Number of customers:
Electricity 6.2 million
Gas 1.9 million
Electricity network 4.3 millionExchange rate EUR/SEK 8.8591. Values in EUR shown only to facilitate comparisons between SEK and EUR
Electricity generation
Vattenfall produces electricity and heat from six energy sources:
Hydro Nuclear Coal Wind Biomass Gas
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Articles of association and core values
The object for the Company’s activities is to generate a market rate of return by operating a commercial energy business that enables the company to be among the leaders in developing environmentally sustainable energy production.
The owner’s assignment Core values
Safety
Performance
Cooperation
History of Vattenfall
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2010–2013Consolidation phase
2000–2009Major expansion in Europe
1950–2000Organic growth and national market deregulation
1909Founding of The Swedish StatePower Board
1951Inauguration of Harsprånget,
A hydro power plant in Sweden
1970–1980Construction of 12 nuclearreactors in Sweden
1999–2009Acquisitions in Germany,Poland and the Netherlands
2010Inauguration of UK offshorewind farm Thanet
2011–2012Divestments of non-core operationsin Belgium, Finland and Poland
1909–1916First large hydro power plants:
Porjus, Olidan, Älvkarleby, Sweden
1909–1950Part of developing the Swedish energy system
From a domestic Swedish hydro power generator to an European energy company
Financial targets and outcome 2013
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Metric Target Outcome FY 2013
Return on Capital Employed (ROCE)
9%-2.1%
(9.2% excl. IAC*)
Net debt/Equity 50-90% 81.8%
FFO/Adjusted net debt 22-30% 19.6%
Dividend pay-out 40-60% Zero dividend pay-out
* IAC = items affecting comparability
Sustainability targets and outcome 2013
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Metric Target Outcome FY 2013
Lower CO2 exposureVattenfall will reduce the company’s CO2 exposure to 65 million tonnes by 2020 from
93.7 million tonnes in 2010.
CO2 emissions in 2013 totalled 88.4 million tonnes.
Growth in renewable electricity generation
Vattenfall’s rate of growth of installed renewable capacity will be higher than the average rate of growth for ten defined countries in northern and central Europe. The target pertains to new, renewable capacity in the form of solar power, wind power and biomass. Hydro power is not included.
Vattenfall’s growth rate was 9.1%.
Estimated growth rate for the defined reference countries is 11-15%
Energy efficiencyVattenfall’s short-term target for 2014 is to save an average of 1 GWh per day, for a total of 365 GWh in 2014.
Decision made for target for 2014.
Nordic• Sticking to harmonized EU approach to
energy market regulation market provides the investment incentives
• Distributed generation and demand side participation less cost competitive in the Nordics compared with Continental
• General oversupply and low prices on the continent increasingly affecting Nordic market
Vattenfall has reorganized the Group into two regions
Continental/UK• Increasingly national approach to
energy market regulation regulator provides the investment incentives
• Energiewende (Germany)• New Energy Deal (Netherlands)• Energy Market Reform (UK)
• Increased cost competitiveness of solar energy and demand side participation in Germany. Change is faster than expected
• Effective 1 January 2014 the Group was reorganized in two regions: Nordic and Continental/UK
• The new organisational structure enables the regions to focus on their respective topics and opens up for opportunities for risk-sharing in the Continental operations over time
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Organisational structure as from January 2014
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CEO
Nordic Continental/UK
Wind
Distribution Distribution
Sales Sales
Hydro Mining & Generation
Ringhals Heat
Forsmark Renewables
Decomm. & Waste Nuclear
Projects
Corporate Staff Functions
Asset Optimization and Trading
Chief Financial Officer
Operations Support
Vattenfall’s five strategic focus areas
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• Work for a more efficient electricity market. Encourage the development of interconnectors.
• Manage implications of the EU Water Directive.
• Renewables growth
• Optimise the operational lifetime of existing nuclear power
reactors.
Strong Nordic
Position
• Rate of growth of new installed capacity to be higher than the average rate of growth for ten defined countries in northern and central Europe. This must be balanced against limited financial resources and a growing surplus capacity in the Nordic market.
Reduce CO 2 exposure from 88.4 billion tonnes in 2013 to 65 billion tonnes by 2012:
• Partnering/risk sharing
• Co-firing of biomass with coal
• Fuel switching.
• Lower operating hours in fossil plants due to more renewables
Vattenfall aspires to be perceived as a “Smart Energy Enabler” - meeting changing customer demands by developing current downstream business and prudently developing new profitable business models.
• Reduce cost level by a further SEK 4.5 billion by 2015.
• Continue to pursue Operational Excellence.
• Optimise maintenance investments.
• Divest or decommission non- core/non-performing assets.
Growth in renewables
Define measures to
reduce Vattenfall’s
CO2 exposure
Offer smart and
sustainable energy
solutions
Stronger focus on
Operational Excellence and cost-
cutting
Sustainable Heat and Electricity Production
Sustainable Consumption
Sustainable Financial Performance
1 2 3 4 5
Investment plan 2014-2018
Electricity networks
Heating networks
Gas storage
IT
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Generation volume and installed capacity per region
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Group total generation (2013) Electricity 181.7 TWhHydro 35.6 TWhNuclear 51.9 TWhFossil 87.9 TWhWind 3.9 TWhBiomass, waste 2.4 TWhHeat 30.2 TWh(Gas sales 55.8 TWh)
Continental
/UK
20 374
14%0%
81%
4% 1%
Nordic
18 732
45%
37%
13%3% 2%
HydroNuclearFossilWindBiomass, waste
Continental
/UK
89
3% 0%
92%
2% 2%
Nordic
93
35%
56%
6% 2%
Electricity generation, TWh
Electricity capacity, MW
Heat
Electricity
Gas
Continental/UKNordic
Volume, TWh