Stedin Group annual report: solid basis for the future

Rotterdam, 23 March 2018 – Stedin Group recorded a solid financial result in its first year as an autonomous and independent network group. Operating income increased in 2017, partly due to the acquisition of grid company DNWG, based in the province of Zeeland. The result includes the one-off effect of the unbundling from Eneco. In the past year, the foundation was laid for Stedin Group's future course by recalibrating the strategy, centred on the energy transition. The focus on present and future grid management and excellent services will be accompanied by an emphasis on collaboration.

Stedin Group is the parent company of grid operators Stedin and Enduris and infrastructure companies Joulz and DNWG Infra. Stedin Group has been operating as an autonomous entity since 1 February 2017, following the unbundling of Eneco into the energy company Eneco and the grid company Stedin. 'It was a challenging first year, in which we took important decisions for our future,' Marc van der Linden, CEO of Stedin Group, comments. Gerard Vesseur, CFO of Stedin Group, adds: 'We achieved a solid financial result, retained our A- credit rating which is necessary for future investments in the energy transition, and made good progress on further improving our operational results, customer satisfaction and the sustainability of our operations.’

Revenue and profit

Vesseur continues: ‘Total operating income rose by € 86 million to € 1,194 million in 2017. The increase was almost wholly attributable to the acquisition of grid company DNWG, in the province of Zeeland, in mid-2017.
Profit after income tax of € 424 million included the one-off impact of the unbundling from Eneco of € 353 million. Operating profit after income tax decreased by € 16 million to a still-solid € 89 million (2016: € 105 million). The decrease reflected one-off costs incurred in connection with the unbundling into energy company Eneco and grid company Stedin, the disposal of CityTec, higher sufferance tax and tariff adjustments in favour of Stedin customers.’ 

 (x € 1 miljoen)   2017    2016
 Totaal bedrijfsopbrengsten   1.194    1.108
 Eenmalig effect afsplitsing Eneco     353        94
 Resultaat na belastingen     424       199
 Resultaat na belastingen uit voortgezette bedrijfsactiviteiten       89       105

Future-proof grids

Stedin Group is clearly seeing that the economy is growing and that more and more people are generating energy themselves or switching to electric transportation. Investments in the electricity and gas grids increased by € 76 million to € 476 million in 2017. Half of those investments were at customers' request. Stedin welcomes this development and expects the number of such requests from customers to continue to grow. At the same time, it is becoming more difficult to ensure that all the additional work is completed on time, due to a growing shortage of engineers. In the past year, Stedin Group entered into cooperation agreements with municipalities and water companies to combine work processes as much as possible. 'This enables us to work more efficiently and jointly limit disturbances for customers,' says Van der Linden.

The supply reliability of the grid operators Stedin and Enduris continued to increase in the past year. On average, customers had no electricity for 16 minutes (2016: 17 minutes) and no gas for 40 seconds (2016: 52 seconds). This is the equivalent of a supply reliability of 99.996%. To step up supply reliability even more, Stedin opened an ultramodern Network Operation Center (NOC) at the end of 2017, which enables even better management and monitoring of the energy grid. More sensors were also placed in the grid in the past year, allowing earlier identification of locations where electricity cables need replacement.  

Strategic choices

‘Stedin Group plays an important facilitating role in the energy transition that is required if we are to achieve the climate goals in the Paris Agreement. In the past year, the foundation was laid for Stedin Group's future course. Facilitating the energy transition is a central theme in the recalibration of our strategy. I firmly believe that focus is crucial in this connection. Our focus is accordingly on future grid management and delivering excellent service.  This drove the choices Stedin Group made in its portfolio in 2017. The business unit CityTec (public lighting) was sold and the Weert grid area was transferred to Enexis. This has created more efficiency and transparency for all stakeholders, such as customers, municipalities and provinces. Choices are as much about what you want to do more of as they are about what you no longer want to do. We therefore looked to strengthen our organisation and are very pleased that DNWG in the province of Zeeland is now part of our group. Zeeland extends our existing service area, which offers potential synergies. The sustainability ambitions of the province of Zeeland also offer many opportunities for increasing the sustainability of energy supply,' Van der Linden observes.

Acceleration through cooperation

'In addition to a focus on grid management and excellent services, cooperation is another pillar that supports our strategy. We can only facilitate the energy transition by joining forces. That's something we already knew, of course, so I mainly want to reconfirm this approach, which is also endorsed by our new mission: 'Working together to create an environment filled with new energy',' says Van der Linden.

‘This is reflected in one of the ways in which Stedin Group aids municipalities, by providing clearer insight into convenient times for replacing the natural gas grid. And with our 'Infrastructural Footprint' method, we support municipalities in assessing the financial implications of possible alternative energy systems. This provides a platform for municipalities to engage in dialogue with local residents about making their district gas-free. As an independent party, we are pleased to help in making the right decisions that are conducive to a reliable, affordable and sustainable energy system. That involves enabling the market to develop products and services that contribute to this. For example, we worked with market parties in 2017 on solutions for grid congestion that arises due to the dependence on weather conditions and to the unpredictability of sustainable energy flows in the system,' Van der Linden comments.

Customer satisfaction

Stedin Group's focus on delivering excellent services has not gone unnoticed. In 2017, 66% of Stedin's customers gave the company a score of 8 or higher. One of the reasons is that we provided greater transparency about the areas in which our customers believe we need to improve. We developed a range of initiatives targeting those areas, leading to performance improvements. An improvement drive at DNWG is visibly producing results; customer satisfaction increased strongly in 2017, by 24% to 7.7.

Increasing numbers of customers have a smart meter at home. In 2017, Stedin Group offered 373,841 smart meters, as planned. There was extensive contact with customers about the smart meter in 2017, partly as a consequence of media coverage, but also of visits to customers to replace smart meters affected by quality issues. This also led to complaints, but in many cases our customer service was able to resolve them. In general, our customers continue to be satisfied with the offer and installation of smart meters. In 2017, 77% of our customers awarded a score of 8 or higher for this.

Annual report 2017 >

About Stedin Group

Working together to create an environment full of new energy: Stedin Group’s workforce of around 4,500 employees endeavours to achieve this goal every day. We believe it is our responsibility to ensure that all our customers have access to sustainable energy where they live, work and do business. As Stedin Group, we are making the energy system more sustainable while keeping it robust and affordable. Grid operators Stedin (Zuid-Holland and Utrecht) and Enduris (Zeeland) and infrastructure specialists Joulz and DNWG Infra work together within Stedin Group to achieve this.

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