Foreword from the chair of the board of directors and the CEO
Further innovations and an ever-growing number of exciting third-party contracts set the tone in 2018. When it comes to capitalising on its assets, to some extent Repower has already been able to take advantage of the improved conditions on the market. The creation of Repower Renewable, a new joint venture encompassing renewable energy plants and projects in Italy, underscores Repower’s strategy of investing exclusively in renewable generation assets. Operating income (EBIT) was higher than the previous year at CHF 35 million.
In its core business, Repower was already able to capitalise to some extent on better market conditions and profitably exploit price volatility in its own trading activities. The company was also able to further extend its position as a service provider in the electricity and gas business, as well as its sales business in Italy. In 2018 Repower continued to focus on rigorously positioning itself as a sales and service organisation; as in 2017, these efforts were successful. Repower won third-party contracts worth around 15 million francs, making a significant contribution to the successful financial year. Since the launch of its Customer Value Centre in December 2018, Repower has been even more focused on its customers. It has also driven digitalisation efforts further ahead: thanks to a completely new digital distribution channel, customers in Italy can now get quick and easy flat quotes for electricity and gas packages. The company has also continued to develop and refine its existing SMARTPOWER, EASYASSET, ENERGYSPACE and REPRICER products (more on products here).
Repower Renewable, Repower Italy’s new subsidiary, is part of a systematic strategy to invest exclusively in renewable generation assets. One wind farm acquired from Elettrostudio Energia is still under construction. Once this installation is completed, Repower Renewable’s generation assets will together have a total capacity of 85 megawatts and produce 170 gigawatt hours annually. Repower has enhanced its product range with the addition of SUN@HOME, a solution for using and storing energy from the sun that also enables customers to optimise their consumption of their own energy. In 2018 Repower entered into new partnerships promising to yield beneficial synergies; they included Minergie, Jaguar and SwissPass. In the coming years Repower will continue to invest in the future and in product innovations revolving around the needs of customers.
The market environment remained challenging in 2018; one of the challenges was volatility, including volatility in the EUR/CHF exchange rate. The positive but volatile development of prices led to uncertainty in the market. Prices can be expected to continue to recover in the next few years. In the context of amendments to the Electricity Supply Act, in October the Swiss Federal Council again debated the full liberalisation of the Swiss electricity market. Repower would welcome complete liberalisation, but not over-regulation. In Italy a general recovery in the renewable energy market is expected. Repower has responded to this development with the establishment of Repower Renewable.
Despite the difficult market conditions, Repower again recorded positive results in 2018. At CHF 2.1 billion, Repower’s 2018 total operating revenues were 13 per cent up on the previous year’s figure. At CHF 35 million, operating income (EBIT) was higher than in 2017 and significantly better than the expectations communicated with the half-year results. The main reasons for this were positive results in generation, trading and sales thanks to improved market conditions in both Switzerland and Italy, and the unexpectedly strong performance of the Teverola combined cycle gas turbine plant in Italy. The good results were likewise helped by revenues of 15.1 million francs from third-party contracts in Switzerland. Last but not least, cost-awareness and efforts on the part of staff also made a positive contribution.
The equity ratio is a solid 43 per cent. There was a significant year-on-year increase in cash flow from operating activities to CHF 55 million; this figure exceeded investment by a clear margin.
total operating revenues in 2018
operating income (EBIT) in 2018
The people who work for Repower are at the heart of the progress without which the business could not have developed last year. We would like to express our warm thanks for their contribution. We would also like to thank our customers, partners and shareholders for the trust they have placed in us.
OUTLOOK AND OBJECTIVES
Conditions on the market remain challenging, not least thanks to the volatile EUR/CHF exchange rate. In the next few years electricity prices can be expected to remain at a positive level for Repower, creating the basis for solid growth prospects. All in all, Repower can look to the future with confidence. The reorganisation is bearing fruit, and we anticipate an even greater number of third-party contracts next year. A healthy balance sheet creates the basis for a positive outlook. Electromobility continues to gather pace, and with it the development of new and existing products. SMARTPOWER, Repower’s intelligent all-in package for future-proof smart metering and energy management, makes a concrete contribution to the goals of Energy Strategy 2050, and was evolved further in 2018. Repower maintains and modernises its grids and production facilities on an ongoing basis. In the next few years there will be considerable investment in generation assets in the Valposchiavo in particular. For 2019 Repower anticipates operating results higher than 2018 levels.