Table of Contents
DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS
2
European Utilities Key Player Profile: RWE 2
Datamonitor' s Key
Player Scorecard examines 31 leading utilities drawn from across Europe' s
competitive arenas 4
Key Players dominate power generation capacity market
share in the Wmed competitive arena 5
Key Players dominate power
generation output market share in the Wmed and CEE competitive arenas 6
Despite ongoing industry consolidation, in no competitive arenas do Key
Players dominate power supply volume market share 7
Despite ongoing
industry consolidation, in no competitive arenas do Key Players dominate gas
volume market share 8
The Key Player Scorecard assesses utilities across
four pillars: Performance, Scale, Growth and Exposure 9
The Performance
pillar combines 5 financial metrics to measure business performance 10
The
Scale pillar combines financial and operational metrics to measure the size of
a utility 11
The Growth pillar measures the rate of growth of a utility' s
financial and energy resources 12
The Exposure pillar combines both
operational and financial measurements of risk 13
RWE scores 31.4/100 on
Datamonitor' s European Utility Scorecard and ranks 17 out of the 31 Key
Players covered 14
RWE' s ranking varies widely across the four pillars
16
RWE achieves an overall ranking of 17, with a utility score of 31.4
21
RWE scores well below average on the Performance and Exposure pillars
22
RWE significantly underperforms the Key Player average, yet carries a
higher than average level of risk 23
RWE outperforms the average on Scale,
and scores slightly higher than many top ten utilities on Growth 24
RWE
scores well below average on most Performance metrics, for an overall ranking
of 28 on this pillar 25
Only on operating profit margin does RWE rank
above the Key Player average 26
RWE' s return on fixed assets and return on
sales significantly underperform the Key Player average 27
RWE
significantly underperforms on return on investment and return on energy
volume 28
RWE scores in the top ten in each Scale metric, for an overall
ranking of 6 on this pillar 29
RWE' s best Scale metrics are power supply
volume and generation capacity, where it ranks 4 30
In terms of generation
capacity RWE ranks 4, with 42 GW 31
RWE is an integrated utility, though
gas supply volume is still twice the company' s power supply volume 32
RWE
has 10.5% of Key Player power customers 33
At 228 TWh, RWE ranks 4 in
terms of power supply volume 34
RWE has a 9.5% share of Key Player gas
customers 35
RWE ranks 5 in terms of gas supply volume 36
RWE ranks 5
and 8 in terms of revenue and net income, respectively 37
RWE' s Growth
ranking is 9, despite a decrease in power supply volume 38
RWE outperforms
the Key Player average on profit and gas supply volume growth 39
RWE' s
price earnings ratio is slightly above average (15), while its operating
profit margin is slightly below (21%) 40
From 2001 to 2005, RWE' s average
annual revenue growth (5.6%) lagged profit growth (29.1%) 41
From 2004 to
2005, declining power supply volume (-39.1%) has not balanced an increase in
gas supply volume of 14% 42
RWE is among the most highly leveraged
utilities, contributing to a low Exposure ranking of 28 43
RWE
significantly lags the Key Player average in financial and operational
Exposure 44
RWE' s gas NTR of -94.4% is higher than the Key Player average
of -86.4% 45
RWE' s power NTR deficit is -4.8%, resulting in a ranking of
13 on that metric 46
RWE is among the most highly leveraged Key Players,
with a debt to equity ratio of 490.2% 47
RWE ranks 28 in terms of debt
leverage 48
RWE' s operating cash flow has increased despite a drop in
energy supply volume growth 49
RWE' s operations are focused on Germany and
the UK 50
Coal and gas dominate RWE' s power generation capacity 51
RWE' s power sales are concentrated in Germany and the UK 52
Half of RWE' s
gas supply volume is provided outside of Germany 53
RWE' s generation
capacity is focused on Germany and the UK 54
RWE has a Key Player power
customer market share of 11% 55
RWE has a 9.5% share of Key Player gas
customers 56
APPENDIX 57
Databook 57
Definitions 76
Definitions 76
Datamonitor Consulting 76
List of Tables
Table 1:
The Key Players are drawn from across a diverse range of markets 3
Table
2: The Performance pillar combines 5 financial metrics to measure business
performance 10
Table 3: The Scale pillar combines financial and
operational metrics to measure the size of a utility 11
Table 4: The
Growth pillar measures the rate of growth of a utility' s financial and energy
resources 12
Table 5: The Exposure pillar combines both operational and
financial measurements of risk 13
Table 6: RWE scores 31.4/100 on
Datamonitor' s European Utility Scorecard and ranks 17 out of the 31 Key
Players covered 15
Table 7: RWE scores 7.5/25 on the Performance pillar,
and ranks 28 out of 31 on this measurement 17
Table 8: RWE scores 8.1/25
on the Scale pillar, and ranks 6 out of 31 on this measurement 18
Table 9:
RWE scores 9.5/25 on the Growth pillar, and ranks 9 out of 31 on this
measurement 19
Table 10: RWE scores 6.3/25 on the Exposure pillar, and
ranks 28 out of 31 on this measurement 20
Table 11: RWE scores well below
average on most Performance metrics, for an overall ranking of 28 on this
pillar 25
Table 12: RWE scores in the top ten in each Scale metric, for an
overall ranking of 6 on this pillar 29
Table 13: RWE' s Growth ranking is
9, despite a decrease in power supply volume 38
Table 14: RWE is among the
most highly leveraged utilities, contributing to a low Exposure ranking of 28
43
Table 15: Return on fixed assets 57
Table 16: Return on sales
58
Table 17: Operating profit margin 59
Table 18: Return on energy
volume 60
Table 19: Return on investment 61
Table 20: Generation
Capacity / EU25 market total 62
Table 21: Power Supply Volume / EU25
market total 63
Table 22: Gas Supply Volume / EU25 market total 64
Table 23: Net income / Net income of 94 leading utilities 65
Table 24:
Revenue / Revenue of 94 leading utilities 66
Table 25: Revenue growth,
2001-2005 CAGR 67
Table 26: Profit growth, 2001-2005 CAGR 68
Table 27:
Growth in operating cash flow, 2004 to 2005 69
Table 28: Gas supply volume
growth, 2004-2005 70
Table 29: Growth in power supply volume, 2004 to 2005
71
Table 30: Power NTR / Power supply volume 72
Table 31: Gas NTR /
Gas supply volume 73
Table 32: Debt leverage 74
Table 33: Growth in
operational cash flow - Growth in energy volume 75
List of Figures
Figure 1: Datamonitor' s Key Player Scorecard examines 31 leading utilities
drawn from across Europe' s competitive arenas 4
Figure 2: Key Players
dominate power generation capacity market share in the Wmed competitive arena
5
Figure 3: Key Players dominate power generation output market share in
the Wmed and CEE competitive arenas 6
Figure 4: Despite ongoing industry
consolidation, in no competitive arenas do Key Players dominate power supply
volume market share 7
Figure 5: Despite ongoing industry consolidation, in
no competitive arenas do Key Players dominate gas volume market share 8
Figure 6: RWE achieves an overall ranking of 17, with a utility score of 31.4
21
Figure 7: RWE scores well below average on the Performance and Exposure
pillars 22
Figure 8: RWE significantly underperforms the Key Player
average, yet carries a higher than average level of risk 23
Figure 9: RWE
outperforms the average on Scale, and scores slightly higher than many top ten
utilities on Growth 24
Figure 10: Only on operating profit margin does RWE
rank above the Key Player average 26
Figure 11: RWE' s return on fixed
assets and return on sales significantly underperform the Key Player average
27
Figure 12: RWE significantly underperforms on return on investment and
return on energy volume 28
Figure 13: RWE' s best Scale metrics are power
supply volume and generation capacity, where it ranks 4 30
Figure 14: In
terms of generation capacity RWE ranks 4, with 42 GW 31
Figure 15: RWE is
an integrated utility, though gas supply volume is still twice the company' s
power supply volume 32
Figure 16: RWE has 10.5% of Key Player power
customers 33
Figure 17: At 228 TWh, RWE ranks 4 in terms of power supply
volume 34
Figure 18: RWE has a 9.5% share of Key Player gas customers
35
Figure 19: RWE ranks 5 in terms of gas supply volume 36
Figure 20:
RWE ranks 5 and 8 in terms of revenue and net income, respectively 37
Figure 21: RWE outperforms the Key Player average on profit and gas supply
volume growth 39
Figure 22: RWE' s price earnings ratio is slightly above
average (15), while its operating profit margin is slightly below (21%) 40
Figure 23: From 2001 to 2005, RWE' s average annual revenue growth (5.6%)
lagged profit growth (29.1%) 41
Figure 24: From 2004 to 2005, declining
power supply volume (-39.1%) has not balanced an increase in gas supply volume
of 14% 42
Figure 25: RWE significantly lags the Key Player average in
financial and operational Exposure 44
Figure 26: RWE' s gas NTR of -94.4%
is higher than the Key Player average of -86.4% 45
Figure 27: RWE' s power
NTR deficit is -4.8%, resulting in a ranking of 13 on that metric 46
Figure 28: RWE is among the most highly leveraged Key Players, with a debt to
equity ratio of 490.2% 47
Figure 29: RWE ranks 28 in terms of debt
leverage 48
Figure 30: RWE' s operating cash flow has increased despite a
drop in energy supply volume growth 49
Figure 31: Coal and gas dominate
RWE' s power generation capacity 51
Figure 32: RWE' s power sales are
concentrated in Germany and the UK 52
Figure 33: Half of RWE' s gas supply
volume is provided outside of Germany 53
Figure 34: RWE' s generation
capacity is focused on Germany and the UK 54
Figure 35: RWE has a Key
Player power customer market share of 11% 55
Figure 36: RWE has a 9.5%
share of Key Player gas customers 56
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