EBM is well positioned with new strategy
EBM's Management Team has made good use of the past year and created the conditions for positioning EBM as a successful player in the energy market. With its new strategy, the company is well positioned to face the coming challenges and take opportunities provided by the deregulation of the market and energy turnaround.
The energy supply market has changed significantly and remains challenging. At the 116th Assembly of Delegates yesterday, EBM's managers explained that the energy business is facing increasingly challenging macroeconomic conditions and how they were responding to this development. Wholesale electricity prices have halved since 2008 on the European market and the basic supply with its secure and favourable prices has become a less attractive option as a result. The profits from EBM's low-priced electricity procurement are therefore dwindling and the fact that industrial customers turned from the regulated, price-protected basic supply to the competition is resulting in further shrinking margins.
In view of these developments, EBM launched far-reaching strategic and structural restructuring measures back in 2012 and at the same time increased its efforts to become more efficient. EBM is thus focussing on its core business in the areas grid, energy, heat, renewable energies and energy efficiency. In 2013, ongoing measures were also launched for increasing the operating result by CHF 20 million per year in order to strengthen the company's financial basis.
The new supply strategy, which was launched three years ago, is also on track. EBM will clearly achieve its interim target of selling 35% renewable energies to customers by 2015. The company has managed to achieve this, in particular, by offering its customers EBM STANDARD as their basic supply since 2014 – in other words electricity originating entirely from renewable energy sources and certified as "naturemade basic". Customers have responded well to this offer. Since changing the product portfolio, 87% of customers receive the renewable standard electricity, corresponding to 535 Gigawatt hours (GWh). 2% of customers chose EBM GRÜN (9 GWh) and 11% EBM GRAU (455 GWh).
Back to profit
The 243 delegates with voting rights approved the annual report and financial statements 2013, which closed with a profit of CHF 4.7 million (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 the EBM pension fund from a defined benefit to define contribution plan on 1 January 2014. Operating income (EBIT) developed less favourably, with this figure dropping to CHF 13.3 million (previous year: CHF 20.5 million). The EBIT margin decreased from 5.5% to 3.3% as a result. This decline is primarily due to the considerably shrinking margins in the electricity business. This decrease in operating income was on the cards already last year and was also the reason for EBM implementing various restructuring measures.
The delegates approved the actions of the members of the Board of Directors. CHF 1 million from the cooperative's profits were added to the EBM energy fund. EBM uses this fund to support successful cooperative members who invest in renewable energies or plan to use energy more efficiently. The delegates' proposals for a more transparent annual report and waiver of delegates' remuneration in 2015 were rejected by the Assembly of Delegates.
Alex Kummer, President of the Board of Directors, provided information on the transparency of EBM's annual report when discussing the subject of corporate governance. He emphasised that "in a nutshell, the term refers to the principles of responsible company management" with "lean structures, transparency and a good balance between management and control". In terms of transparency, he pointed out that EBM provides detailed information on the he Board of Directors, Management and remuneration policy in the 2013 annual financial statements. Detailed figures for the core business segments are also stated as well as additions and disposals of customers qualified to enter the market. This level of additional information is outstanding compared with the company's competitors.
In view of EBM's strategic and structural restructuring, the Board of Directors also concluded that it can contribute to increasing efficiency and saving costs. Plans are to halve the size of EBM's Board of Directors from 26 seats today to 13 at the Assembly of Delegates in 2015, and to reduce it again thereafter to only 9 members by 2018. In view of this decision, the members of the Board of Directors Xavier Caitucoli, Ursula Jäggi-Baumann, Richard Jauslin and Nicole Nüssli-Kaiser already waived their right to re-election this year. Ernst Alabor and Peter Meschberger could no longer be re-elected as they had reached the statutory age limit. The position of Hans-Ulrich Zumbühl, who passed away on 20 April 2014, was not filled again. The Board of Administration now counts just 18 members as a result. The delegates approved the positions of five members of the Board of Directors for another term until 2018: Alex Kummer (Laufen), Urs Grütter (Arlesheim), Kurt Henzi (Dornach), Rudolf Mohler (Oberwil) and Peter Müller (Reinach). The re-election of these members proceeded smoothly.
- Dominik Baier, Head of Communication and Legal, phone: +41 61 415 44 58, e-mail firstname.lastname@example.org