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EBM stands its ground in a difficult environment

EBM has left its negative trend behind and is once again generating profit. The strategic measures implemented to focus on the company's core business and streamline its organisation are starting to pay off.

It was the right time for EBM to focus on its core competences," comments CEO Dr. Conrad Ammann with regard to the 2013 financial figures. He primarily refers to the difficult environment in the energy sector. Wholesale electricity prices have halved since 2008. The profit from EBM's low-priced electricity procurement dwindled and the fact industrial customers turned from the regulated, price-protected basic supply to the competition resulted in further shrinking margins.

In response to this situation, EBM decided in 2012 to focus on its core business in the fields of grid, energy, heat, renewable energies and energy efficiency. In March 2013, EBM Telecom was sold to Besonet/Quickline Group and in April 2014, the electrical installation company Schwarz + Partner AG to Alpiq Intec. In order to strengthen its finances, EBM launched further measures for increasing its operating income by CHF 20 million per year. These are being implemented at present. Regrettably, the company had to let 39 of its employees go in September 2013. Thanks to this restructuring, EBM will continue to develop into a "modern, customer-focused and cost-efficient energy supplier," in the words of Conrad Ammann.

The narrower margins in the electricity business had a considerably negative impact on earnings in 2013. Earnings before interest and taxes (EBIT) dropped to CHF 13.3 million (previous year: CHF 20.5 million). EBM holds 13.6% of the shares in the Alpiq power plant park. After incurring significant losses in the past two years, this park generated a balanced result in 2013. EBM Group's consolidated financial statements therefore remained unaffected by third-party results and the Group recorded profit of CHF 4.7 million (previous year: CHF -158.6 million). This figure is CHF 17.4 million down on the result of ordinary operations. The difference is primarily caused by the restructuring of EBM's pension fund, namely the change from defined benefit to define contribution plan, on 1 January 2014 and the drop in the technical interest rate. EBM incurred one-off costs of CHF 19.6 million from these activities.

EBM's core business was successful. In the reporting year, EBM Group's consolidated total sales amounted to CHF 398.1 million, 6.4%, or CHF 23.8 million, up on the previous year. Customers in the EBM grid area consumed 0.9% more electricity in 2013. EBM invested CHF 27 million in developing, replacing and maintaining the electricity grid to ensure secure supplies to the 230,000 people in its grid area. Linking up the numerous newly constructed local photovoltaic plants proved a big challenge for grid operations. At the end of 2013, a total of 1,158 photovoltaic plants with an installed output of 31,330 Kilowatt peak were in operation in EBM's Swiss grid area.

The entire electricity business, including trade, grew by 25% to 2,526.5 million Kilowatt hours (kWh). In 2013, six major customers with an electricity consumption of CHF 16 kWh million left for the open market. In return, EBM managed to acquire five major customers with total electricity consumption of 253 million kWh outside its grid area.

The heat business was expanded further as well and generated sales of CHF 44.8 million (previous year: CHF 41.6 million). In 2013, EBM contracted 167 heat systems in Switzerland, the Alsace and South Germany, which produced a total of 310.2 million kWh of heat and 35.5 kWh of electricity. In February 2013, the UBS Clean Energy Infrastructure Switzerland fund acquired a stake in EBM Wärmeholding AG through a CHF 40 million capital increase. EBM Wärme Group will be able to continue its dynamic development thanks to this measure.

The electricity generated from renewable energies rose to 811 kWh as a result of EBM increasing the number of its plants. This corresponds to a 44% rise year-on-year. EBM therefore produced electricity from renewable energy sources that, in purely mathematical terms, corresponds to the consumption of 200,000 households. The EBIT margin of 22.9% (previous year: 22.1%) shows that the profitability of the renewable energies segment is stable and sustainable.

EBM continues to commit to sustainability and is aiming for a healthy balance between economic purpose, environmental protection and social lobbies in the long term. The company aims for 80% of the energy consumed in the grid area to come from renewable energy sources by 2050. The launch of the new green electricity product "EBM STANDARD" for private and SME customers in January 2014 provides additional support for the production of renewable energy.

EBM Group Key Figures

2013

2012

Sales in CHF million

398.1

374.3

EBIT in CHF million

13.3

20.5

Total assets in CHF million

1,980.2

1,953.9

Equity in % of total capital

76.1

75.9

Electricity business in million kWh (including trade)

2,526.5

2,015.9

Distribution grid transmission in million kWh

1,679.0

1,653.7

Heat production in million kWh

310.2

297.5

Number of electricity customers (recipients)

131,114

130,356

Number of cooperative members

49,975

49,116

Employees (FTE)

557

575

- of which trainees

47

46

2013 EBM key figures by segment

(excluding corporate and services)

Sales

CHF million

EBIT

CHF million

Electricity business

195.5

6.1

Grid

109.0

14.9

Heat

49.5

4.7

Renewable energies

30.9

5.5

Additional information:

  • Joachim Krebs, Head of Corporate Communications, phone: +41 61 415 43 85, e-mail j.krebs@ebm.ch

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