[Report] European RWE Utilities Key Players & Strategies Market Research, Trends, Analysis

CHAPTER 1 INTRODUCTION
- Utility competition is starting to transcend national borders, but a single EU market place remains distant
- Larger utilities need to find a suitable geographical arena in which to pursue their ambitions
- The emergence of pan-European suppliers is an ideal for now, the reality is the emergence of geographic competitive arenas
CHAPTER 2 DATAMONITORS EUROPEAN UTILITY SCORECARD
- E.ON leads the Datamonitor European Utility Ranking, RWE ranks seventh out of the 12 companies benchmarked
- RWEs supply assets and financial strength push up its score on Datamonitors European Utility Scorecard, to 42* out of 100
- RWE is concentrated in the NWE and CEE European competitive arenas
- RWE is active in 3 of the 5 competitive arenas for generation and crosses over in two of those for supply
- RWE is the third largest supplier of end user volumes for power and gas across 32 European markets, with 4.0%* market share
CHAPTER 3 POWER SUPPLY VOLUMES AND MARKET SHARES
- RWEs has expanded into the CEE market and retained an MEU focus duplicating its German sector weighting
- RWE commands the third highest market share, 4.8%* across the EU 32 markets
- RWEs geographic spread of power volumes stretches across 2 competitive arenas, that of NWE and Central Europe
- RWE currently has no power volume across the Nordic region, a region dominated by Vattenfall, E.ON and Nordic regional suppliers
- RWEs power volume across the NWE region totals 204TWh, second behind E.ON, with MEU accounting for 43% of sale volumes
- RWEs power volume across CEE totals 33TWh, behind CEZ and E.ON, with a greater weighting towards the MEU sector
- RWE currently has no significant power volumes across the WMed region, a region dominated by EDF, Enel and Endesa
- RWEs presence in the UK and German markets combine to account for over 80% of their end user volumes
- RWE has sizeable market share in one leading competitive market, the UK, as assessed by Datamonitors MCI rating
- RWEs power supply revenues total €16,420m, with 50% of this contribution made from supplying MEU customers
- RWEs market presence in the UK underperforms its share of contribution from supply, where the opposite is true in Germany
CHAPTER 4 GAS SUPPLY VOLUMES AND MARKET SHARES
- RWEs gas supply volumes are concentrated in the CCE and NWE regions, aligning with its power activities in these markets
- RWE has attained a 3.3%* market share across the EU 32 markets for end user gas supply volumes
- RWEs geographic spread of gas volumes matches that of its power spread across Northern and Central Eastern Europe
- RWE has no gas volumes sales across the Nordic region, a market that is still immature, with only E.ON and oil majors active
- RWEs gas volumes across the NWE region totals 232TWh, with wholesale volumes making up 2 of every 5 volumes sold
- RWE is the leading European gas player in the CEE arena with total gas volumes of 120.7TWh, far ahead of its peers
- RWE has no gas volumes across the WMed region, an arena dominated by national players, primarily GDF, Eni and Gas Natural
- RWE is active in 5 gas supply markets, where the Czech and German gas markets are largest for I&C, whereas in RES it is the UK market
- RWE is active in only one of the leading competitive markets, as assessed by Datamonitors MCI rating - that of the UK
- RWEs gas supply revenues total €6,305m, sourcing the majority of its revenues from NWE markets and by the RES and MEU sectors
- The UK and German market make up 43% of gas volume supplied but account for an estimated 59% of gas revenues for RWE
CHAPTER 5 GENERATION CAPACITY AND MARKET SHARE
- RWE is the fourth largest generator across Europe, with its German assets driving its market share, with coal being its dominant fuel
- RWE ranks as the fourth largest European generator across Europe, with just under 35GW of capacity
- RWEs geographic power plant spread is concentrated in the NWE competitive arena
- RWEs has no power plant assets across the Nordic region, a region dominated by Vattenfall, E.ON, Fortum and Statkraft
- RWEs plant capacity across the NWE region totals 34GW, only 2.7GW behind the largest player, E.ON
- RWE only assets in CEE are coal plants in Hungary, totalling 697 MW, below that of other new entrants, EDF, Electrabel and Vattenfall
- RWE has a small renewable presence in the WMed region, a region dominated by EDF in France, Enel in Italy and Endesa in Spain
- RWE has a 3.5% and a 0.5% market share of total and renewables generation capacity across the EU 32 markets respectively
- RWEs fuel mix is weighted towards the thermal fuels of coal, gas and oil, evident from its deviation from the average EU 32 fuel mix
- Germany and the UK account for over 97% of RWEs market penetration for generation assets across Europe
- RWEs generation output totals 165TWh, driven by a thermal fuel mix, across the NWE arena
CHAPTER 6 STRUCTURAL HEDGE - POWER
- Datamonitor uses generation and supply market shares to determine if companies are generally long or short in power
- RWE is long in its NTR*, by 96.1TWh, as is the trend with most other European players, generally being long by over 30TWh
- Expressing the NTR as a percentage, RWE additional 96.1TWh makes the company long by 138%
- RWE NTR* is structurally long in NWE and particularly Germany, while short across all CEE markets it is active in
- Currently energy companies with higher market share are structurally long and profitable
CHAPTER 7 STRUCTURAL HEDGE - GAS
- European utilities gas equity and gas supply market shares determine if these companies are generally long or short in gas
- RWE is short in its NTR* gas position, at 106.3TWh, where the trend for the leading energy companies remains being significantly short
- A handful of energy companies outside the Oil and Gas majors have equity gas, where RWEs 106.3TWh makes the company short by 83%
CHAPTER 8 BASE FINANCIALS OVERVIEW
- RWE is highly geared, and though revenues have increased the focus will be to drive out earnings from its acquired assets
- RWEs revenues in 2004 exceeded €42bn, only exceeded by E.ON and EDF from the major power players
- Over the last five years RWEs revenues have grown at a CAGR of 14%, however earnings have fallen back by 9.5% CAGR
- RWEs PE ratio is at the top end for the sector, aided by meeting stated cost reductions and benefiting from higher wholesale prices
- RWEs gearing is 2.2x earnings, the highest amongst its competitors, the company has leveraged itself to finance acquisitions across Europe
- RWEs free cash flow amounts to €1.5bn, credible amongst its competitors, but half the sum that EDF, E.ON and Endesa have available
CHAPTER 9 APPENDIX
- Understanding Datamonitors European Utility Scorecard rating, focusing on competitive sectors of generation, equity gas and retail volumes
- Scoring methodology
- Scorecard rating component breakdowns and scoring metrics and measures
- Data methodology
- The MCI Index shows how attractive a particular market is to new entrants in terms of the competitive environment
- The MCI Index is calculated by deriving a weighted average of scores over 9 key metrics
- Glossary of terms
- Future readings
- SPP writing team
- How to contact experts in your industry
- List of Tables
  - Table 1: Datamonitors European Utility Scores and ranking for the 12 benchmarked companies
  - Table 2: RWE Competitive Arenas matrix, 2005
  - Table 3: Scoring rating matrix for Datamonitors European Utility Scorecard
- List of Figures
  - Figure 1: 32 European markets divided into 5 regional competitive arenas
  - Figure 2: RWEs Datamonitor European Utility Scorecard, 2005
  - Figure 3: Companies matrix by value chain focus and competitive arena, 2005
  - Figure 4: Top twelve power and gas supply volume market shares across 32 European markets, 2005
  - Figure 5: Leading players power supply volumes (GWh) market share across EU 32 markets, 2005
  - Figure 6: Weighting between I&C and residential power volumes for the key players across EU 32 markets, 2005
  - Figure 7: Power volumes supplied across the EU32 markets by sector and competitive arena, 2005
  - Figure 8: Power volumes supplied in the Nordic competitive arena by company, 2005
  - Figure 9: Power volumes supplied in the NWE competitive arena by company, 2005
  - Figure 10: Power volumes supplied in the CEE competitive arena by company, 2005
  - Figure 11: Power volumes supplied in the WMed competitive arena by company, 2005
  - Figure 12: RWEs power supply volumes (GWh) RES country breakdown, 2005
  - Figure 13: RWEs power supply volumes (GWh) I&C country breakdown, 2005
  - Figure 14: Scores and geographical distribution of 13 power markets assessed by Datamonitors MCI Index rating, 2005
  - Figure 15: Map representing RWEs size and the geographical distribution of its power market share across EU 32 markets, 2005
  - Figure 16: RWEs power supply volumes revenue breakdown, by sector, 2005
  - Figure 17: RWEs power supply volumes revenue breakdown, by competitive arena, 2005
  - Figure 18: Proportion of revenues vs. end user power volume sales in markets where RWE has a >5% volume market share, 2005
  - Figure 19: Leading players gas supply volumes (GWh) market share across EU 32 markets, 2005
  - Figure 20: Weighting between I&C and residential gas volumes for the key players across EU 32 markets, 2005
  - Figure 21: Gas volumes supplied across the EU32 markets by sector and competitive arena, 2005
  - Figure 22: Gas volumes supplied in the Nordic competitive arena by company, 2005
  - Figure 23: Gas volumes supplied in the NWE competitive arena by company, 2005
  - Figure 24: Gas volumes supplied in the CEE competitive arena by company, 2005
  - Figure 25: Gas volumes supplied in the WMed competitive arena by company, 2005
  - Figure 26: RWEs gas supply volumes (GWh) RES country breakdown, 2005
  - Figure 27: RWEs gas supply volumes (GWh) I&C country breakdown, 2005
  - Figure 28: Scores and geographical distribution of 13 gas markets assessed by Datamonitors MCI Index rating, 2005
  - Figure 29: Map representing RWEs size and the geographical distribution of its gas market share across EU 32 markets, 2005
  - Figure 30: RWEs gas supply volumes revenue breakdown, by sector, 2005
  - Figure 31: RWEs gas supply volumes revenue breakdown, by competitive arena, 2005
  - Figure 32: Proportion of revenues vs. end user gas volume sales in markets where RWE has a >5% volume market share, 2005
  - Figure 33: Generation capacity (MW) for 12 leading European energy companies across 32 European markets, broken down by fuel type, 2005
  - Figure 34: Generation capacity (MW) across the EU32 markets by sector and competitive arena, 2005
  - Figure 35: Generation capacity (MW) across the Nordic competitive arena by company, 2005
  - Figure 36: Generation capacity (MW) across the NWE competitive arena by company, 2005
  - Figure 37: Generation capacity (MW) across the CEE competitive arena by company, 2005
  - Figure 38: Generation capacity (MW) across the WMed competitive arena by company, 2005
  - Figure 39: RWEs generation capacity (MW) market share across 32 European markets, 2005
  - Figure 40: RWEs renewable* capacity (MW) market share across 32 European markets, 2005
  - Figure 41: RWEs generation fuel mix across its European asset base, 2005
  - Figure 42: RWEs generation fuel mix across its European asset base against EU 32 market proportions, 2005
  - Figure 43: RWE owned generation capacity (MW) breakdown by country, 2005
  - Figure 44: RWEs generation capacity (MW) market share in each European country, 2005
  - Figure 45: RWEs generation output by fuel type, 2005
  - Figure 46: RWEs generation output breakdown, by competitive arena, 2005
  - Figure 47: Estimated absolute Net Trade Requirements (NTR)* for power, for the benchmarked 12 players, 2005
  - Figure 48: Estimated percentage Net Trade Requirements (NTR)* for power, for the benchmarked 12 players, 2005
  - Figure 49: RWE generation capacity (MW) market share in each European country, 2005
  - Figure 50: Operating income vs. NTR position for 12 benchmarked players, 2004/2005
  - Figure 51: Estimated absolute Net Trade Requirements (NTR)* for gas, for the 12 benchmarked players, 2005
  - Figure 52: Estimated percentage Net Trade Requirements (NTR)* for gas, for the 12 benchmarked players, 2005
  - Figure 53: Revenue and net income for 12 energy companies benchmarked, 2004
  - Figure 54: RWEs revenue and net income 5 year summary, 2000 - 2004
  - Figure 55: PE ratio for listed companies, for the 12 companies benchmarked, 2004*
  - Figure 56: Debt/Equity ratio for 12 benchmarked companies, 2004
  - Figure 57: Free Cash Flow for the 12 benchmarked companies, 2004
  - Figure 58: Understanding Datamonitors European Utility Scorecard
  - Figure 59: Datamonitors MCI Index scale for market assessment
  - Figure 60: The MCI Index is calculated by deriving a weighted average of scores over 9 key metrics

European Utilities Key Players and Strategies - RWE

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