Annual figures 2009

Highlights

• Net turnover increased 9% to EUR 5.1 billion in 2009 (2008: EUR 4.7 billion).
• Net profit decreased to EUR 200 million (2008: EUR 492 million), primarily due to lower interest income and decreased trading results compared to high results in 2008.
• Incidental costs related to unbundling and strategic projects impacted operating expenses; this was partly offset by the success of ongoing cost reduction.
• Despite high churn rates in the retail market, the number of customers in the Netherlands remained stable. Customer satisfaction increased compared to last year. The number of customers in Belgium increased.

Nuon's CEO Øystein Løseth about the results: "Our overall results in 2009 are lower than the results we achieved previous year. Nevertheless, we achieved robust results from our core activities. We managed to keep the service to our customers on a high level and were successful in our day-to-day business. This despite the fact we faced the biggest changes in the history of our company last year. The organisation was split and we found our partner Vattenfall. We look forward to our first full year as part of Vattenfall."

* Excluding Nuon Germany staff (289 FTE’s on 31 December 2008)

Net turnover 2009

Net turnover increased to EUR 5,112 million (2008: EUR 4,677 million). This increase was due to higher average rates for gas and electricity in 2009 compared to 2008, the full year inclusion of revenues from the gas production activities we acquired mid-2008, higher electricity volumes supplied to customers, and the consolidation of Nuon Germany’s sales and industry park activities as of the beginning of the year. The latter resulted from the legal transfer of these activities in the light of the unbundling. The increase in turnover was offset by a decrease in trading results in the wake of less volatile commodity markets and therefore fewer business opportunities. The annual results of the trading business typically depend on the price volatility of traded commodities, such as power, gas, oil and coal.

The total volume of electricity supplied in the Benelux in 2009 increased by 2.5% to 24.8  TWh (2008: 24.2 TWh). Gas supplies decreased by 0.9% to 5.0 billion m3  (2008: 5.1 billion m3) year-on-year due to the relatively mild weather conditions in the spring and autumn of 2009. On average, the electricity and gas rates in the consumer markets were higher compared to the previous year, despite the price decreases on 1 July 2009. As of 1 July 2009, our variable gas and electricity rates for the Dutch consumer markets decreased by approximately 4.5% for electricity and 36% for gas. The drop in gas rates is due to the falling prices of oil since the autumn of 2008. As gas and oil prices are interlinked, the decrease in oil prices has a delayed effect on gas prices. At the end of 2009, we announced the 2010 rates for Dutch consumers, representing a decrease of 23% in the variable rate for electricity, and an increase of 1% in the gas rate.

Operating profit 2009

Operating profit (EBIT) decreased to EUR 196 million in 2009. This figure includes net incidental  losses of EUR 238 million (2008: EUR 399 million, including net incidental losses of EUR 249 million). Excluding these items, operating profit decreased to EUR 434 million in 2009 (2008: EUR 648 million). Operating profit benefited from higher margins on electricity, due to an increase in sales volumes and a higher margin on electricity production. Our operating profit was also positively influenced by our gas production activities for the first whole year and the prolonged success of cost reduction measures, including the reduction in external personnel. However, these increases were offset by lower trading results. Total gas margin decreased, due to higher purchase prices for gas and relatively mild weather conditions throughout the year. The margin on heat and other activities was impacted by a decrease in the margin of our industry park services due to the economic downturn. These items were only partly offset by higher sales and margins from our value added services (insulation, installation and security services).

Incidental expenses associated with the unbundling and strategic partnering processes as well as general salary rise in mid-2009 in line with the collective labour agreement led to an increase of our 2009 operating expenses. These were also affected by the operating expenses of new group companies, mainly our gas production activities, and the consolidation of the sales and industry park activities of Nuon Germany as of the beginning of the year. These effects out weighted the impact of successful cost reduction programs and a decrease in externally hired staff thanks to an ongoing focus on efficiency and cost cuts.

Incidental items included in the results

Nuon’s results were impacted by the following incidental items:

The incidental items during the financial year 2009 resulted in a net charge of EUR 121 million (2008: EUR 93 million charge).

The item 'One-off impact of change in treatment of own use contracts' relates to a change in the way derivatives contracts that are held for the company’s own use (i.e. sourcing for our plants and sales to customers) are treated. This change was driven by the synchronisation of Nuon’s accounting principles to those of Vattenfall as well as by the impact of the integration of our trading and sourcing activities and strategies with those of Vattenfall. This has resulted in a change in the way derivative contracts held for own use are regarded. The one-off impact of this change in treatment was a non-cash loss of EUR 411 million.

Fair value movements on instruments other than those held for trading purposes reflect those movements on instruments that based on current accounting policies are valued at fair value and distort a proper analysis of the underlying results.

In 2009, we completed the filing of our tax assessments for the years 2005-2008, resulting in total tax benefits of EUR 70 million.

Number of customers in the Netherlands and Belgium

Competition in the Dutch consumer market intensified in 2009, which impacted churn levels in the Dutch market. Despite this, we were successful in retaining our customers and attracting new customers: the number of electricity and gas supply contracts in the Dutch consumer market remained stable at 2.3 million and 1.9 million respectively. The number of electricity customers in Belgium increased by about 25,000 in 2009 to over 300,000.

Operational cash flow and net cash position 2009

The cash flow provided by operational activities in 2009 amounted to EUR 1,655 million, up from EUR 844 million in 2008. This increase was mainly related to the settlement of receivables from our former shareholder totalling approximately EUR 1.5 billion. This effect was partly offset by the lower result and tax payments.

The net cash position amounted to EUR 492 million as at 31 December 2009, compared to a net cash position of EUR 115 million as at year-end 2008. This increase reflects the positive cash flow from operational activities in 2009, partly offset by capital expenditures.

Investments and cash flows 2009

Cash flow used in investing activities decreased to EUR 543 million in 2009 (2008: EUR 961 million). The decrease is due to the acquisition of gas production and insulation activities in 2008. Total investments in fixed assets amounted to EUR 698 million. In addition to regular investments in our existing production capacity and heat networks, investments were made in the Nuon Magnum multi-fuel power station, gas storage facilities in Germany and the Netherlands and in Helianthos (development of solar cell foil). In addition, we acquired incremental interests in gas fields in the North Sea, a combined heat and power (‘CHP’) plant in Almere and we invested in our CO2 capturing pilot in Buggenum.

The cash flow used in financing activities amounted to EUR 585 million in 2009. This cash outflow mainly relates to dividends paid of EUR 211 million as well as a EUR 405 million reimbursement of share premium to our former shareholder. The latter is in accordance with the designations by the Dutch Minister of Economic Affairs in relation to the unbundling approval.

The free cash flow – the cash flow from operating activities less acquisitions, net investments in property, plant and equipment, intangible fixed assets and investments in associates and joint ventures – increased to EUR 982 million in 2009 (2008: a negative free cash flow of EUR 146 million). This was mainly due to the settlement of receivables from our former shareholder.

Shareholders' equity decreased by 26% to EUR 3,400 million at the end of 2009. This decrease mainly relates to the following items: a change in share premium (- EUR 373 million) mainly due to the aforementioned reimbursement, a net change in cash flow hedges (- EUR 368 million) due to fair value movements of derivatives used for hedging, the dividend payment 2008 (- EUR 211 million) to our former shareholder and an accrued annual dividend liability for the Dutch shareholders (- EUR 430 million) which was charged to equity. These equity charges were slightly offset by the addition of this year’s result (EUR 200 million).

Solvency at the end of 2009 decreased to 42.2% compared to 47.7% in 2008, mainly as the result of the accrued annual dividend payment for the Dutch  shareholders (EUR 430 million) which was charged to equity. Excluding this item, solvency is comparable to previous year.

Strategic developments

In 2009, Nuon initiated the construction of the CO2 capture test facility in the coal gasification power plant in Buggenum. Nuon restarted the construction of Nuon Magnum this summer after the necessary permits were received. We also further optimised our gas storage portfolio.

In addition, Nuon announced another large investment project: the development of Beaufort, a Dutch 340 MW offshore windpark for which Nuon received the permit last summer. The acquisition of the CHP plant in Almere in December secures the delivery of heat to our residential heat customers in Almere. After the balance sheet date, Nuon and the German energy company SEWAG announced the intention to sell Nuon Deutschland GmbH to SEWAG. The divestment of Nuon Deutschland is a condition stipulated by the European Commission's competition authority for the approval of Vattenfall's acquisition of N.V. Nuon Energy.

About Nuon

Nuon is an energy company whose 6,000 employees serve around three million consumers, businesses and organisations in the Netherlands and Belgium. Its key commitment is to supply energy that is reliable, affordable and as clean as possible. Nuon produces and supplies gas, electricity, heat and natural cooling and helps customers to reduce their energy use. The company is a subsidiary of Vattenfall AB.

More information

Nuon Press Office
E-mail: pressoffice@nuon.com

• Presentation annual results 2009 (740.84 KB)

For the editors

These results relate to the legal entity Nuon Energy ("Nuon") and are compared with this entity’s results of last year. Last year, these results were consolidated and published with those of the network company, then both forming part of the former n.v. Nuon (now Alliander N.V.).

The results of Nuon include the results of Nuon’s sales and production activities, together with the results of Nuon’s wind and trading activities. With effect from 1 July 2009, the wind and trading activities have been integrated within Vattenfall Business Group Pan Europe and Vattenfall Energy Trading respectively. However, as long as these activities are not legally transferred within the Vattenfall group, the results of these activities will be included in the financial reports of Nuon.

Disclaimer

Parts of this press release contain prospective information. These parts may include unqualified statements on future operating results, government measures, the impact of other regulatory measures on Nuon’s activities, Nuon’s shares and those of its subsidiaries and joint ventures in existing and new markets, industrial and macro-economic trends and Nuon’s performance in these, and statements preceded or followed by or containing words such as 'believes', 'expects', 'anticipates' or similar expressions. These prospective statements are based on the current assumptions concerning future activities and are subject to uncertainties and other known and unknown factors, many of which are beyond Nuon’s control, so that future actual results may differ significantly from these statements.