The Market Italy segment closed the first half of 2016 with good results. Thanks to innovative products and an extensive nationwide network of sales consultants, Repower in Italy has its finger on the pulse of customer needs and can respond rapidly and proactively when new demand arises.

Sales

In the first half of 2016 the sales business in Italy increased its contribution to earnings on a year-on-year basis. Repower continued to augment and consolidate its network to achieve greater presence throughout Italy with the addition of around 100 new sales consultants.

Since their launch, the innovative Verde Dentro, eFFettiva and VAMPA products have become firmly established in the marketplace and are selling well. As far as Verde Dentro, a green power package including electric transport, was concerned, in the first six months there were clear signs among cus-tomers of a growing trend to pure delivery of TÜV-certified green power. eFFettiva, a tool for measuring and analysing electricity consumption, was refined to keep constantly abreast with customer needs. VAMPA, a thermal imaging service that can help prevent damage to electrical equipment in production plants, has enjoyed a good response in the market in the first few months since its launch, and so far demand is higher than budgeted in the planning phase.

April saw the launch of the second round of Repower's advertising campaign in Italy. In terms of visitors to the company's website the results have been very gratifying so far. The campaign portrays Repower and its consultants as “personal trainers” for businesses wanting to improve their energy efficiency.

Trading in Milan

In the first six months trading in Milan posted a better contribution to earnings than in the prior-year period. The main reason was successful marketing of energy from the Teverola power plant, which saw much better deployment on the ancillary services market than the previous year. Like the trading floor in Poschiavo, the trading team in Milan focused on optimally managing the company's own generation assets. Besides Teverola, in Italy this also includes capacity from the Trans Austria Gas (TAG) pipeline, which Repower trades according to demand in the marketplace.

Generation

As already mentioned the Teverola combined-cycle gas turbine plant was deployed more frequently in the first six months of 2016 than the year before. In line with the strategic realignment announced by the company, Repower is looking into selling its majority interest in the Teverola plant.

Thanks to very favourable wind conditions, total generation at the three wind farms Corleto Perticara (Basilicata), Lucera (Apulia) and Giunchetto (Sicily) was good over the first six months of the year.

EBIT contribution

In the first six months of the year the Market Italy segment's contribution to group operating income (EBIT) came to CHF 28 million (CHF -23 million in the first half of 2015). This includes an impairment gain at the Teverola plant (around CHF 13 million) and impairment on receivables at Sales in Italy (around CHF 3 million).

Innovation

At Repower in Italy a number of innovative projects are currently under way designed to position the company even more firmly as a sales and service organisation able to gear its offerings to changing market needs.

For example, in the first six months of this year the BIG project was driven further ahead. The idea is to add large customers (electricity and gas) to the existing small and medium-sized enterprise segment. Extending the portfolio will give Repower greater scope for exploiting market opportunities in trading.

A new product is DIODA, a range of LED lighting offerings. In the first half of 2016 Repower completed the test phase with select customers. The results were very positive, and the product has now been given the green light for sales consultants to sell it to their end-customers. In the next few months specific training will be given to enable sales staff to give their customers optimum advice.

Last year Repower developed FOCUS, a package for large-scale consumers who were required by law to undergo an analysis to optimise their energy consumption. The statutory deadline for the analysis was in December 2015, so it is all the more gratifying that some companies continued to make voluntary use of the service in the first half of 2016. Repower has also been working on a “FOCUS light” version for small and medium-sized businesses with the intention of launching it in the course of the year.