04/06/2021 | Press release | Distributed by Public on 04/06/2021 02:02
Response from the CEO
Eneco CEO As Tempelman responds: 'On behalf of the Management Board, I want to express my heartfelt gratitude and appreciation for the tremendous mental resilience and dedication that our employees have shown. Thanks to their wonderful care for each other and for our customers, we managed to maintain a low accident rate and a high customer satisfaction, and that remains paramount in everything that we do, now and in the future.'
The impact of the Covid pandemic showed most clearly in the electricity markets, where sales went down. This was due to a decrease of electricity demand in the business segment, because of empty offices, but also less travel, for example with NS Dutch railways. Therefore we had to sell back energy volumes at lower market prices. Additionally, there is the expected increase of credit risk, as the number of bankruptcy's will most likely increase this year.
Despite these developments, Eneco had a solid year. It saw a strong improvement in its results in 2020. Operating profit (EBIT) was up by 23% to €163 million (2019: €132 million) and EBITDA rose to €484 million (2019: €428 million). Net profit increased by no less than 48% to €118 million (2019: €80 million), in part because new wind assets were operational throughout the year and the participating interests performed better. Gross margin increased by 2% to €1,094 million (2019: €1,071 million).
Eneco delivered this performance despite the adverse effects of the weather and the coronavirus crisis on revenue (€4.148 billion compared with €4.332 billion in 2019). The warm weather depressed gas sales and previously purchased gas had to be sold at a lower price on the forward markets. Although electricity revenue also fell in Belgium and the Netherlands, this was offset by new customers in Germany following the acquisition of E.ON Heizstrom. Eneco maintained its sound cost management in 2020. Expenditure was little changed despite the growth in operations and a slight increase in the workforce (2020: 2,849 FTEs; 2019: 2,802 FTEs).
Our customers' interests come first in everything we do, now and in the future. Eneco is helping its customers by further professionalising and digitising its services, and last year we continued to improve our online customer services. The new online Eneco Omschakelaar transition service advises customers on what their next step should be when they are improving their home's sustainability. Eneco's technicians now use Eneco Home to help customers to make the switch to sustainable energy solutions such as solar panels and smart central heating applications. We have also updated the MijnEneco personal environment so customers can now make all the necessary arrangements for maintenance to their devices. Our partnership with participating interest Suniverse has been expanded, with a view to easy and affordable energy-efficient home solutions, and in Germany we have successfully taken over and integrated 260,000 customers from E.On Heizstrom.
Besides entering into excellent contracts in the business market, including with bol.com and with Borealis in Belgium, we also introduced ZonnigLaden, which transforms parking spaces into green charging stations with solar roofs, and started offering charging stations in 2020 in partnership with ANWB. To help us provide our customers with new and innovative solutions, we have initiated a digital transformation, and we are making investments to modernise our technology and IT infrastructure.
Most sustainable large electricity supplier
In 2020, we adopted Hollandse Wind&Zon as our default solution for consumers and SME customers. This helped Eneco to become the first major energy supplier to score an 8.1 out of 10 on the annual ranking that Wise, Natuur & Milieu and the Dutch Consumers' Association publish of sustainable electricity suppliers.
Eneco also recorded some amazing performances in terms of sustainable generation, which will help us to further consolidate our position. Key highlights are the now operational offshore wind farm Borssele III&IV, and winning the contracts for the Hollandse Kust Noord offshore wind farm and the Maasvlakte 2 wind farm. In total, we added 202 MW in sustainable capacity, installed capacity and sustainability improvements to our heat sources. Of course we are also very happy to be chosen to construct the heat grids in Schiedam's Groenoord district and Rotterdam's Bospolder-Tussendijken district, as part of the transition to gas-free homes.
In 2020 Eneco once again invested more than in the previous year: €385 million compared with €343 million in 2019. The digitalisation of Eneco is evident in this with €33 million being invested in ICT systems. The largest share of the investment was in offshore and onshore wind farms, notably Seamade off the Belgian coast and Borssele III & IV off the coast of Zeeland, both of which started full production in 2021. On land, investment was in the Delfzijl, Zeewolde and Kabeljauwbeek wind farms in the Netherlands. €15 million was invested in solar farms. There was also investment in making the heating business more sustainable. A second BioHeat Installation was built in Utrecht (€34 million), while €75 million was invested in maintaining and expanding various heating grids.
The environment in which Eneco operates is a dynamic one. To continue to lead the way in the energy transition, we also devoted a great deal of focus to updating our business strategy. Although our mission is essentially still the same, we have made some clear choices and we will focus on three pillars: customers and assets, and integrating the two.
We will provide our customers with even better assistance through smart, affordable and clean energy solutions, including electric vehicles, heat pumps and heat grids. To achieve the integration, we will focus on using smart flex solutions to balance supply and demand, for example by converting surplus wind energy into heat, controlled remotely from our trading room. Of course we will also continue to invest in sustainable generation. Our ambition is to nearly double our Eneco-owned capacity to 3200 MW by 2025. In everything that we do, we choose to be a responsible enterprise. We take our role in society very seriously, and we endeavour to have a positive impact on the wellbeing of people and nature.
For more information, see: www.eneco.com/news-and-figures/