[Report] European Nuon European 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, Nuon ranks twelfth out of the 12 companies benchmarked
- Nuons supply assets and financial strength limit its score on Datamonitors European Utility Scorecard, to 27* out of 100
- Nuon is concentrated in the NWE European competitive arena and has a small supply asset presence in the WMed
- Nuon is active in 2 of the 5 competitive arenas for power generation but is present in only one arena for demand assets
- Nuon currently does not break into the top twelve suppliers of end user volumes for power and gas across 32 European markets*
CHAPTER 3 POWER SUPPLY VOLUMES AND MARKET SHARES
- Nuon markets of interests is expected to remain within the NWE arena, and the Benelux in particular, seeking I&C volume growth
- Nuon commands the tenth highest market share, 1.1%* across the EU 32 markets
- Nuons geographic spread of power volumes is limited to only one competitive arena, NWE
- Nuon has no power volumes across the Nordic region, a region dominated by Vattenfall, E.ON and Nordic regional suppliers
- Nuons power volumes across the NWE region totals 39TWh, some way behind the leading players in this arena
- Nuon currently has no power volumes sales across the CEE region, where CEZ, E.ON and RWE are the leading suppliers
- Nuon currently has no significant power volumes across the WMed region, a region dominated by incumbents, i.e. EDF and Enel
- Nuon supplies the vast majority of power volumes in the Netherlands, with this complimented by low volumes in Belgium
- The Netherlands is forecast to follow a more competitive path according to Datamonitors MCI Index, where Nuon is an incumbent
- Nuons power supply revenues total €3,869m, with an even spread of contributions demand assets across MEU, SME and RES
- Nuon derives the same proportion of revenue from each national market as the proportion of power supplied to each national market
CHAPTER 4 GAS SUPPLY VOLUMES AND MARKET SHARES
- Nuon historically has secured gas sales in the Dutch RES and SME market, but is now establishing a presence in Belgium
- Nuon has a 1.5%* market share across the EU 32 markets for end user gas supply volumes
- Nuon geographic spread of gas volumes matches that of its power spread, thus is only active in the NWE competitive arena
- Nuon has no gas volumes sales across the Nordic region, a market that is still immature, with only E.ON and oil majors active
- Nuons gas volumes across the NWE region totals 111TWh, with an even distribution across MEU, SME and RES supply
- Nuon has no gas volume sales across the CEE region, which is dominated by the Russian gas major, Gazprom
- Nuon has no gas volumes sales across the WMed region, an arena dominated by national players, primarily GDF, Eni and Gas Natural
- Nuon is active in 2 markets, where over 95% of its gas volumes for both RES and I&C supply are attributed to its home market
- The Benelux markets will exhibit quicker market competitiveness, as assessed by Datamonitor, markets of primary interest for Nuon
- Nuons gas supply revenues total €2,925m, sourcing all its revenues from the NWE markets
CHAPTER 5 GENERATION CAPACITY AND MARKET SHARE
- Nuon power demand assets are concentrated in the Netherlands, with Belgium and NWE a key market for the company
- Nuon ranks as the tenth largest European generator across Europe of the 12 leading players, with 4GW of capacity
- Nuons geographic power plant spread is concentrated in the NWE competitive arena, with small renewable assets in the WMed
- Nuon has no power plant assets across Nordic region, a region dominated by Vattenfall, E.ON, Fortum and Statkraft
- Nuons plant capacity across the NWE region totals 4GW, all but 40MW are located in the Netherlands
- Nuon has no power plant assets in the CEE region, a region dominated by CEZ, with EDF, Electrabel, Vattenfall and RWE active
- Nuon has small renewable presence in the WMed region, a region dominated by EDFs in France, Enel in Italy and Endesa in Spain
- Nuon has a 0.4% and a 0.4% market share of total and renewables generation capacity across the EU 32 markets respectively
- Nuons fuel mix is diverse across thermals, nuclear and renewables, where gas and renewables strongly deviate from EU 32 averages
- Nuons Dutch capacity accounts for 93% of its country power assets, with marginal power supply assets in Spain and Belgium
- Nuons generation output totals 19.5TWh, driven by its gas and coal plants, dominated by its assets in the Netherlands
CHAPTER 6 STRUCTURAL HEDGE - POWER
- Datamonitor uses generation and supply market shares to determine if companies are generally long or short in power
- Nuon is well balanced in its NTR*, 2TWh short, the trend with most other European players is generally being long, greater than 30TWh
- Expressing the NTR as a percentage, Nuons 2.0TWh deficit makes the company short by 9%
- Nuon NTR* is structurally short in NWE, in its two core markets its is 1.5TWh short in the Netherlands and 1TWh short in Belgium
- 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
- Nuon is short in its NTR* gas position, at 74.7TWh, 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, Nuon has none, unlike Centrica, GDF, RWE and E.ON
CHAPTER 8 BASE FINANCIALS OVERVIEW
- Nuon has grown revenues but margins are increasing after a drop in 2002, large debt funding for M&A is inhibited by lower cash flow
- Nuons revenues in 2004 amounted to €4.9bn, less than the other majors, where scale is the overriding factor
- Over the last five years Nuons revenues have grown at a CAGR of 7.2%, earnings have improved since a 2002 fall, recovering with 2.4% CAGR
- Utilities PE ratios are currently performing near or above the sector average
- Nuons gearing is 0.4x earnings, generally debt finance and thus higher gearing by other players has facilitated their acquisitions
- Nuons free cash flow amounts to €0.7bn, distinctly lower than the other major players, but is driven by scale, with less demand assets
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: Nuon 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: Nuon 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 EU 32 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: Nuons power supply volumes (GWh) RES country breakdown, 2005
  - Figure 13: Nuons 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 Nuons size and the geographical distribution of its power market share across EU 32 markets, 2005
  - Figure 16: Nuons power supply volumes revenue breakdown, by sector, 2005
  - Figure 17: Nuons power supply volumes revenue breakdown, by competitive arena, 2005
  - Figure 18: Proportion of revenues vs. end user power volume sales in markets where Nuon has a >2% 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 EU 32 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: Nuons gas supply volumes (GWh) RES country breakdown, 2005
  - Figure 27: Nuons 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 Nuons size and the geographical distribution of its gas market share across EU 32 markets, 2005
  - Figure 30: Nuons gas supply volumes revenue breakdown, by sector, 2005
  - Figure 31: Nuons gas supply volumes revenue breakdown, by competitive arena, 2005
  - Figure 32: Generation capacity (MW) for 12 leading European energy companies across 32 European markets, broken down by fuel type, 2005
  - Figure 33: Generation capacity (MW) across the EU 32 markets by sector and competitive arena, 2005
  - Figure 34: Generation capacity (MW) across the Nordic competitive arena by company, 2005
  - Figure 35: Generation capacity (MW) across the NWE competitive arena by company, 2005
  - Figure 36: Generation capacity (MW) across the CEE competitive arena by company, 2005
  - Figure 37: Generation capacity (MW) across the WMed competitive arena by company, 2005
  - Figure 38: Nuons generation capacity (MW) market share across 32 European markets, 2005
  - Figure 39: Nuons renewable capacity (MW) market share across 32 European markets, 2005
  - Figure 40: Nuons generation fuel mix across its European asset base, 2005
  - Figure 41: Nuons generation fuel mix across its European asset base against EU 32 market proportions, 2005
  - Figure 42: Nuon owned generation capacity (MW) breakdown by country, 2005
  - Figure 43: Nuon generation capacity (MW) market share in each European country, 2005
  - Figure 44: Nuons generation output by fuel type, 2005
  - Figure 45: Nuons generation output breakdown, by competitive arena, 2005
  - Figure 46: Estimated absolute Net Trade Requirements (NTR)* for power, for the benchmarked 12 players, 2005
  - Figure 47: Estimated percentage Net Trade Requirements (NTR)* for power, for the benchmarked 12 players, 2005
  - Figure 48: Nuon generation capacity (MW) market share in each European country, 2005
  - Figure 49: Operating income vs. NTR position for 12 benchmarked players, 2004/2005
  - Figure 50: Estimated absolute Net Trade Requirements (NTR)* for gas, for the 12 benchmarked players, 2005
  - Figure 51: Estimated percentage Net Trade Requirements (NTR)* for gas, for the 12 benchmarked players, 2005
  - Figure 52: Revenue and net income for 12 energy companies benchmarked, 2004
  - Figure 53: Nuons revenue and net income 5 year summary, 2000 - 2004
  - Figure 54: PE ratio for listed companies, for the 12 companies benchmarked, 2004*
  - Figure 55: Debt/Equity ratio for 12 benchmarked companies, 2004
  - Figure 56: Free Cash Flow for the 12 benchmarked companies, 2004
  - Figure 57: Understanding Datamonitors European Utility Scorecard
  - Figure 58: Datamonitors MCI Index scale for market assessment
  - Figure 59: The MCI Index is calculated by deriving a weighted average of scores over 9 key metrics

European Utilities Key Players and Strategies - Nuon

Table of Contents