Annual report 2008/09 - Axpo Group

Annual Report Axpo Holding AG
52 – 53
Editorial / 2–3
Interview with the CEO / 4–6
Strategy / 8–10
Markets and perspectives / 12–18
Success factors / 22–29
Corporate governance / 32–47
Annual report / 50–65
Axpo Group made investments
of CHF 510 million
in the reporting year. The
lion’s share of the funds
was used to invest in production
facilities and to
fi nance replacements and
the expansion of the power
plant fl eet and transmission
grids.
Burdened by a challenging
economic environment,
Axpo AG Group’s performance
for the 2008/09
fi nancial year was unsatisfactory.
Consolidated
revenues were up year-onyear,
but the profi t for the
period was substantially
lower than in the previous
year.
Comprehensive information is
available in the separate annual
report of Axpo AG.
Own energy production improves
year-on-year
In the 2008/09 fi nancial year, Axpo
Group’s energy procurement dropped
by 6.5 % from the previous year, primarily
due to a sharp decline in purchases
from third parties and procurement
through trading. On the other
hand, own production from hydroelectric
and conventional (thermal)
power plants as well as new energies
was up 3.2 %. Hydropower production
was up 2.6 % from the previous year,
while nuclear energy production
dropped 1.8 % year-on-year.
Electricity production by the
gas-fi red combined cycle plants in Italy
and electricity generated from renewable
sources posted the biggest
growth at more than 24 % each. The
growth recorded for new renewable
energies was mainly driven by the
acquisition of Axpo Tegra, the former
Tegra Holz + Energie AG, and the
commissioning of new plants for the
generation of electricity from biomass
fermentation and small-scale hydropower
facilities.
Outlook
Axpo Group expects that the energy
market paradigms will remain challenging
in the 2009/10 fi nancial year.
Given the uncertain economy, unstable
regulatory conditions and stagnating
prices in the domestic as well as the international
energy markets, the energy
business is unlikely to see any signifi cant
improvement. Current projects to expand
production and grid capacities will
impact costs, and developments on
the fi nancial markets are adding to the
uncertainty. Against this background,
Axpo Group is likely to fi nd it diffi cult
to repeat its performance for the
2008/09 fi nancial year.
Annual report
of Axpo AG Group
Weighed down by a diffi cult economic
environment, Axpo AG Group’s performance
for the 2008/09 fi nancial year
was unsatisfactory. The Group countered
the negative impact of the energy
and fi nancial market crisis by optimizing
its operating and strategic expenses.
At CHF 2702.6 million, the
consolidated revenues of Axpo AG Group
were up 1.5 % from the previous year
(2007/08 fi nancial year: CHF 2661.8 million).
Earnings before interest and
taxes (EBIT), however, dropped sharply
to CHF 384.6 million (previous year
CHF 600.3 million). The balance sheet
was also burdened by the negative
fi nancial result of CHF –31.9 million after
exceptionals. The main reason for
this is that, despite the noticeable recovery
of the fi nancial markets since
spring, it has not yet been possible to
completely eliminate the impairment
losses of the Federal Decommissioning
and Waste Management Funds for Nuclear
Power Plants that were recognized
in the previous year. The profi t for
the period is CHF 314.8 million (previous
year: CHF 546.5 million). This equals
a substantial year-on-year decline of
42.4 %.
Trading & Sales division
The Trading & Sales division implemented
a far-reaching reorganization
programme in the 2008/09 fi nancial
year, aiming to adapt the organizational
structure to the growing complex -
ity of the international electric ity markets
and to strengthen its specialist
skills and know-how. Other benefi ts of
the new structure include the elimination
of duplication between the trading
and sales teams and the improvement
of the informative value of management
information.