Ratios
Free cash flow
Cash flow from operating activities less net investments in property, plant and equipment.
Funds from Operations / Net Debt
Profit after taxation –adjusted for incidental items and fair-value movements– plus depreciation of property plant and equipment and non-current intangible assets as a percentage of net debt.
Interest cover
The 12-month net result –adjusted for incidental items and fair-value movements– plus depreciation of property, plant and equipment and non-current intangible assets, plus net financial income and expense, divided by net financial income and expense.
Net investments
Capital expenditures less contributions received from third parties.
Pay-out ratio
The part of the profit after taxation that will be distributed as dividend.
Return on Invested Capital (ROIC)
Profit after taxation as a percentage of invested capital.
Solvency
Shareholders’ equity as a percentage of total assets.
Working capital
Inventories plus trade receivables and other short-term receivables and accruals less short-term liabilities (non- interest-bearing) and other short-term liabilities and accruals.
List of definitions
Capacity charge
The capacity charge is the amount that is charged for the transportation of gas and electricity, depending on the capacity of the customer’s connection. This charge is passed on by the grid manager via the supplier to the customer.
CO2 emission right
A right to emit a predetermined quantity of CO2 during a certain period. Any organisation operating one or more installations that emit CO2 is required to apply for an emission permit. This permit is granted by the Dutch emission authority (Nederlandse Emissieautoriteit or NEa).
Combined Heat and Power (CHP)
An alternative to the classical supply of electricity and heating is the local co-generation of heating and electricity: an engine powers a generator for the production of electricity; the released heat is used for heating purposes. This is referred to as combined heat and power generation (CHP). If properly implemented, CHP can lead to energy savings.
Credit spread
Credit spread is the difference between the rate of return on a bond and that on a benchmark (i.e. mid swap) used by the market. This difference can be attributed to the risk profile of the company issuing the bond.
Cross border lease
A cross border lease is a structured financial transaction by virtue of which a business sells the user rights to certain tangible fixed assets to a foreign company, only to lease these assets back.
Degree days
The unit of measurement that indicates the number of fictitious days that the average 24-hour temperature (T) lies below the reference temperature of 18 °C. T is derived from 24-hour observations (UT) of the Netherlands Meteorological Office (KNMI). If T is higher than 18 °C, then the number of degree days is zero.
District heating
A comfortable and environmentally-friendly supply of energy that makes use of residual heat. The generation of electricity or the burning of waste or biomass releases a great deal of heat. Nuon utilises this heat for the district heating network. The central generation of heat means that the emission of harmful gases, such as CO2, is significantly reduced.
DTe Office of Energy Regulation (Directie Toezicht Energie)
DTe is a directorate of the Netherlands Competition Authority (NMa) and is in charge of implementing and supervising compliance with the Electricity Act 1998 and the Gas Act.
Energy Tax (formerly known as: Regulerende Energiebelasting)
This is a tax on the use of energy. The Energy Tax (or ecotax) is levied on environmentally-unfriendly sources of energy: nuclear energy and energy generated by means of fossil fuels. Green energy does not pollute and is therefore exempt from ecotax.
ECP (Euro Commercial Paper)
A Euro Commercial Paper is a short-term bill with terms of two years at maximum. ECP is issued in international money markets by businesses.
EMTN programme (Euro Medium Term Note programme)
A flexible bond programme used to issue debt securities. The size, currency and terms to maturity of the outstanding bonds depend on Nuon’s borrowing requirements.
Free domain
The free domain comprises the following activities:
- The construction, maintenance, renewal and management of connections for gas;
- The provision of metering installations;
- The construction, maintenance, renewal and management of electricity connections of more than 1 MVA and for specific customer groups.
FTE (Full Time Equivalent)
Equivalent of the number of employees with a full working week.
Heating assets
The assets used for the production of electricity and heating (see also Combined heat and power).
Mid-swap
The mid swap rate can be defined as the rate (or rates) equivalent to a series of current, observable and objective Euro interest rate swap mid (inbetween bid/offer) rates (derived from the relevant zero coupon curve) that relates to the term of the future liability cash flows.
When determining the mid swap rate, separate zero coupon discount rates should apply to cash flows of different outstanding terms. To the extent that such an approach is not feasible in practice, a single rate may be used such that, when applied to all cash flows, the resulting present value is expected to be materially the same as the sum of the present values of the separate cash flows discounted at an appropriate zero coupon rate.
NEa Dutch Emission Authority (Nederlandse Emissieautoriteit)
Is the competent authority that enforces the law on trade in NOx and CO2 emission rights. The activities of the Nea are made up of permit issuing, keeping records of the balance of emission rights and supervising. NEa supervises the trade in emission rights and manages the CO2 and NOx Emission Trade Registers, which contains all the Dutch account balances of emission rights. Trade via the NEa is therefore not possible. Instead, companies trade among themselves or via trade platforms.
New market model
This model arranges, among other things, the large-scale roll-out of digital meters under the direction of the grid manager. In the future every small consumer will pay a capacity-related grid charge and energy will be delivered to households and small business customers on the basis of the supplier model. Henceforth, the supplier will also select the metering company for the customer.
Regulated domain
The statutory tasks that are laid down in the law in respect of the management of electricity and gas networks. This concerns:
- The construction, maintenance, renewal and management of connections to the electricity network of less than 1 Megawatt;
- The construction, maintenance, renewal and management of gas and electricity networks;
- The transportation of gas and electricity;
- The effective assurance of the safety and reliability of the networks;
- The promotion of the safe use of equipment and installations that consume electricity and gas;
- The facilitation of the free market to enable, among other things, switches to other suppliers.
Spark spread
The difference between the market price of raw materials for the production of energy in our gas-fired (spark) and coal-fired (dark) power stations and the market price of electricity.
Sufferance tax
Direct tax that is levied on the possession of objects under, on or above municipal land that is intended for public services.
Supplier model
A system where a consumer or small business customer receives all his energy services from one supplier. The supplier is the sole point of contact for the customer. The customer only receives a bill from the supplier. This bill includes the transportation costs of the grid manager and, if applicable, the costs for using the meter. The supplier and grid manager make water-tight arrangements about the settlement of transportation costs, the sharing of responsibilities, and hold-harmless payment by the consumer.
Value at Risk (VaR)
The term Value at Risk is a method for approximating the maximum loss of a portfolio, where the maximum loss is not exceeded with a given probability during a defined period. To calculate the VaR for commodity risk management purposes, Nuon makes use of Monte Carlo simulations, where the VaR indicates the loss based on market value that arises from a change in market prices, under normal circumstances, on 1 day and which is expected to be exceeded only 5% of the time.
Whistleblower facility
This is the procedure for dealing with suspected abuse, including abuses relating, for instance, to a serious offence, defeating the ends of justice or endangering public health. Whistleblowers who report an instance of abuse may not be faced with retaliatory action in any way. This facility has been in place since 1 January 2001.
