European Utilities Key Player Profiles: Gazprom

Table of Contents

• CATALYST
• SUMMARY
• METHODOLOGY
• ANALYSIS
  • European Utilities Key Player Profile: Gazprom
  • Key Player Scorecard examines 31 leading utilities drawn from across Europe' s competitive arenas
    • Key Players dominate power generation capacity market share in the Wmed competitive arena
    • Key Players dominate power generation output market share in the Wmed and CEE competitive arenas
    • Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate power supply volume market share
    • Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate gas volume market share
  • The Key Player Scorecard assesses utilities across four pillars: Performance, Scale, Growth and Exposure
    • The Performance pillar combines 5 financial metrics to measure business performance
    • The Scale pillar combines financial and operational metrics to measure the size of a utility
    • The Growth pillar measures the rate of growth of a utility' s financial and energy resources
    • The Exposure pillar combines both operational and financial measurements of risk
  • Gazprom scores 54.9/100 on Datamonitor' s European Utility Scorecard and ranks 1 out of the 31 Key Players covered
    • Gazprom tops the Key Player scorecard
    • Gazprom achieves an overall ranking of 1, with a utility score of 54.9
    • Gazprom' s strong Scale and Exposure scores contributes to its overall high ranking
    • Gazprom has an above average level of Performance, yet a lower than average level of risk
    • In terms of Scale, Gazprom far surpasses the Key Player average, while in Growth it is also a leading Key Player
  • Gazprom' s Performance rank of 11 is due mainly to its strong return on sales and operating profit margin
    • Gazprom' s overall financial Performance score of 12.1 is just above the Key Player average of 10.9
    • Gazprom' s operating profit margin is 25.9%, compared to the Key Player average of 19.7%
    • Gazprom underperforms the Key Player average in both return on investment and return on energy volume
  • Gazprom tops the Scale pillar, attaining a score of 15.8
    • In terms of Scale, Gazprom ranks 1
    • Gazprom has a 30% share of Key Player gas customers
    • Gazprom has a 54.4% market share of Key Player gas supply volume
    • Gazprom ranks 6 and 1 in terms of revenue and net income respectively
  • Despite topping all Key Players in profit growth, Gazprom' s ranks 4 in the Growth pillar
    • Gazprom' s operating cash flow and power volume growth metrics are below average, resulting in a Growth ranking of 4
    • Gazprom price earnings ratio of 63 suggests that its share price is overvalued relative to the other Key Players
    • From 2001 to 2005, Gazprom' s annual profit growth (77.8%) outpaced its revenue growth (7.6%)
    • From 2004 to 2005, Gazprom' s cash flow growth of 52.3% surpassed its gas volume growth of 3%
  • Gazprom has a positive gas NTR, leading to an Exposure ranking of 2
    • With the largest gas equity holding of all Key Players, Gazprom has the highest positive gas NTR
    • With gas equity amounting to 6,000 TWh, Gazprom maintains a slightly positive (long) NTR position
    • Gazprom is lightly leveraged, with a debt to equity ratio of 20.1%
    • Gazprom ranks 7 in of debt leverage
    • Gazprom' s operating cash flow growth has exceeded its growth in energy volume
  • Gazprom markets its gas principally in the NWE competitive arena, though Germany is its largest single market
    • Although Germany accounts for the bulk of Gazprom' s gas sales, the company has a presence across Europe
    • With the second highest number of gas customers, Gazprom has a 30% share of Key Player gas customers
• APPENDIX
  • Databook
  • Definitions
  • List of Tables
    • Table 1: The Key Players are drawn from across a diverse range of markets
    • Table 2: The Performance pillar combines 5 financial metrics to measure business performance
    • Table 3: The Scale pillar combines financial and operational metrics to measure the size of a utility
    • Table 4: The Growth pillar measures the rate of growth of a utility' s financial and energy resources
    • Table 5: The Exposure pillar combines both operational and financial measurements of risk
    • Table 6: Gazprom scores 54.9/100 on Datamonitor' s European Utility Scorecard and ranks 1 out of the 31 Key Players covered
    • Table 7: Gazprom scores 12.1/25 on the Performance pillar, and ranks 11 out of 31 on this measurement
    • Table 8: Gazprom scores 15.8/25 on the Scale pillar, and ranks 1 out of 31 on this measurement
    • Table 9: Gazprom scores 11.3/25 on the Growth pillar, and ranks 4 out of 31 on this measurement
    • Table 10: Gazprom scores 15.6/25 on the Exposure pillar, and ranks 2 out of 31 on this measurement
    • Table 11: Gazprom' s Performance rank of 11 is due mainly to its strong return on sales and operating profit margin
    • Table 12: Gazprom tops the Scale pillar, attaining a score of 15.8
    • Table 13: Despite topping all Key Players in profit growth, Gazprom' s ranks 4 in the Growth pillar
    • Table 14: Gazprom has a positive gas NTR, leading to an Exposure ranking of 2
    • Table 15: Return on fixed assets
    • Table 16: Return on sales
    • Table 17: Operating profit margin
    • Table 18: Return on energy volume
    • Table 19: Return on investment
    • Table 20: Generation Capacity / EU25 market total
    • Table 21: Power Supply Volume / EU25 market total
    • Table 22: Gas Supply Volume / EU25 market total
    • Table 23: Net income / Net income of 94 leading utilities
    • Table 24: Revenue / Revenue of 94 leading utilities
    • Table 25: Revenue growth, 2001-2005 CAGR
    • Table 26: Profit growth, 2001-2005 CAGR
    • Table 27: Growth in operating cash flow, 2004 to 2005
    • Table 28: Gas supply volume growth, 2004-2005
    • Table 29: Growth in power supply volume, 2004 to 2005
    • Table 30: Power NTR / Power supply volume
    • Table 31: Gas NTR / Gas supply volume
    • Table 32: Debt leverage
    • Table 33: Growth in operational cash flow - Growth in energy volume
  • List of Figures
    • Figure 1: Datamonitor' s Key Player Scorecard examines 31 leading utilities drawn from across Europe' s competitive arenas
    • Figure 2: Key Players dominate power generation capacity market share in the Wmed competitive arena
    • Figure 3: Key Players dominate power generation output market share in the Wmed and CEE competitive arenas
    • Figure 4: Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate power supply volume market share
    • Figure 5: Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate gas volume market share
    • Figure 6: Gazprom achieves an overall ranking of 1, with a utility score of 54.9
    • Figure 7: Gazprom' s strong Scale and Exposure scores contributes to its overall high ranking
    • Figure 8: Gazprom has an above average level of Performance, yet a lower than average level of risk
    • Figure 9: In terms of Scale, Gazprom far surpasses the Key Player average, while in Growth it is also a leading Key Player
    • Figure 10: Gazprom' s overall financial Performance score of 12.1 is just above the Key Player average of 10.9
    • Figure 11: Gazprom' s operating profit margin is 25.9%, compared to the Key Player average of 19.7%
    • Figure 12: Gazprom underperforms the Key Player average in both return on investment and return on energy volume
    • Figure 13: In terms of Scale, Gazprom ranks 1
    • Figure 14: Gazprom has a 30% share of Key Player gas customers
    • Figure 15: Gazprom has a 54.4% market share of Key Player gas supply volume
    • Figure 16: Gazprom ranks 6 and 1 in terms of revenue and net income respectively
    • Figure 17: Gazprom' s operating cash flow and power volume growth metrics are below average, resulting in a Growth ranking of 4
    • Figure 18: Gazprom price earnings ratio of 63 suggests that its share price is overvalued relative to the other Key Players
    • Figure 19: From 2001 to 2005, Gazprom' s annual profit growth (77.8%) outpaced its revenue growth (7.6%)
    • Figure 20: From 2004 to 2005, Gazprom' s cash flow growth of 52.3% surpassed its gas volume growth of 3%
    • Figure 21: With the largest gas equity holding of all Key Players, Gazprom has the highest positive gas NTR
    • Figure 22: With gas equity amounting to 6,000 TWh, Gazprom maintains a slightly positive (long) NTR position
    • Figure 23: Gazprom is lightly leveraged, with a debt to equity ratio of 20.1%
    • Figure 24: Gazprom ranks 7 in of debt leverage
    • Figure 25: Gazprom' s operating cash flow growth has exceeded its growth in energy volume
    • Figure 26: Although Germany accounts for the bulk of Gazprom' s gas sales, the company has a presence across Europe
    • Figure 27: With the second highest number of gas customers, Gazprom has a 30% share of Key Player gas customers