Ten-year review
Net sales
Operating profit
Funds from operations (FFO) and Free cash flow
Net debt and Interest-bearing liabilities
Return on equity
FFO interest cover
Comments:
The ten-year period has been characterised by strong international growth. From having been essentially a national Swedish utility, through substantial company acquisitions primarily in Germany, Poland and Denmark, Vattenfall has grown to become Europe’s fifth-largest electricity generator and the largest supplier of heat. In 2008, substantial acquisitions were made in wind power in the UK. Value creation during the period has been substantial due to very successful integration and consolidation work, but also due to increased production volumes and higher wholesale electricity prices. Return on equity has varied from 7.3% to 23.2%, and was 13.6% in 2008. The return on net assets has varied from 8.3% to 18.4%, and was 15.1% in 2008. The book value of assets has grown five-fold, from SEK 87 billion to SEK 446 billion. Net sales and operating profit have grown six-fold.
Net debt, which was SEK 27.4 billion in 1999, rose sharply to SEK 75 billion up until 2003, due to borrowings in the bond market in order to finance the extensive acquisitions. Thereafter, net debt was amortised down to SEK 43.7 billion as per 2007, thanks to good profitability and strong cash flows. In 2008 net debt increased to SEK 66 billion, mainly due to larger borrowings as a result of the sharp rise in investments. The net debt/equity ratio was reduced from 81% in 1999 to 54% in 2007, and then rose again in 2008, to 76%. The annual dividend to the owner has increased from SEK 1.5 billion in 1998 to a proposed dividend of SEK 6.9 billion for 2008. For the ten-year period, the average dividend payout was approximately SEK 4.1 billion per year. Investments, including acquisitions, have averaged SEK 21.8 billion per year, and the number of employees quadrupled during the period, from approximately 8,000 to more than 32,000. Electricity sales have risen from approximately 87 TWh to 189 TWh.
