Consistent implementation of Alpiq restructuring programme

Alpiq delivered solid operating results for the first half of 2012. As announced, revenue, EBITDA and EBIT declined year-on-year due to the expiry at the end of 2011 of high-margin contracts, as well as changed framework conditions and the measures launched to focus business. In an environment that remained highly challenging and fraught with uncertainty, revenue dropped by 4.3 per cent to CHF 6.5 billion. EBITDA before charges for exceptional items amounted to CHF 503 million, corresponding to a reduction of 13.4 per cent versus the prior-year period, while EBIT fell by 14.5 per cent to CHF 266 million and Group profit was 31.1 per cent lower at CHF 126 million. The fact that the first six months of 2012 ended with a solid operating result despite various negative factors is due to reliable power generation, coupled with optimised marketing, successful wholesaling activities, the positive trend in the energy services business both in Switzerland and abroad, and the cost savings already achieved.

Exceptional items weigh down results The results are weighed down by non-recurring exceptional items, as a consequence of which Alpiq has recorded a loss of CHF 36 million for the first half-year. These exceptional items cover impairments and provisions related to the unexpected cancellation of long-term energy delivery agreements by Romanian state-controlled energy producer Hidroelectrica, the withdrawal from retail business in Italy, and a further reduction in the fair value of the interest in Italian energy company A2A.

Simplified business model reduces costs and risks Alpiq made significant progress in the restructuring programme launched in November 2011. The business model and organisation have been greatly simplified, and the programme aimed at annual cost savings of CHF 100 million is proceeding according to plan. At the same time the risks related to the trading business have been significantly reduced. The company has also generated proceeds of around CHF 500 million from divestments, having sold the interest in Edipower and the energy transmission technology (ETT) business unit of the Alpiq Anlagentechnik Group (AAT). The sale of the ETT business is expected to be completed in the third quarter of 2012. As part of its move to focus business, Alpiq has also reduced sales activities in the international business, disposed of Finnish company Energiakolmio, and decided to withdraw from retail business in Italy and sales in Spain at the end of the year. The Spreetal power station in Germany will cease operating at the end of the year. Alpiq is also preparing to dispose of additional assets in the capital-intensive area of new renewable energies outside Switzerland. The company is also conducting negotiations on the sale of part of its stake in Nant de Drance pumped storage power station and has agreed in principle to sell a stake in one of its combined-cycle power plants. 

Environment remains challenging The environment remains highly challenging. Alpiq expects the stable trend in the operating business to continue, but for the aforementioned reasons and as already announced it expects to close the 2012 financial year with a much lower result than in 2011. The measures in place have laid the foundations for restoring the company's financial equilibrium, strengthening its earning power and achieving the targeted substantial reduction in debt. 

Changes on the Executive Board The Board of Directors has appointed Patrick Mariller as new CFO and member of the Executive Board. Patrick Mariller has been Head of Corporate Planning & Controlling and Deputy CFO of Alpiq since 2009. With his long track record in the energy business, comprehensive market know-how and financial expertise, and excellent management skills, the 45-year-old Swiss convinced the Board of Directors in the course of the extensive selection process. Kurt Baumgartner, 63, will retire as planned after 37 successful years in the service of the Alpiq Group and, since 1992, as a member of the Executive Board and CFO. The dossier will be handed over on 1 October 2012. The Board of Directors and Executive Board would like to take this opportunity to extend their sincerest thanks to Kurt Baumgartner for his valuable services and tireless commitment to the company. Jasmin Staiblin will take up her new position as CEO of Alpiq on 1 January 2013, following which Hans E. Schweickardt, who has been CEO ad interim since 4 November 2011, will once more concentrate on his mandate as Chairman of the Board of Directors.

*Average number of full-time equivalents (FTE)