Main developments in 2012
We are pleased to present the results of our activities during 2012. The company’s performance has been sound across the board, including our financial results, our safety performance and our success in maintaining security of supply. We are particularly pleased that this performance has been achieved on the basis of a focused strategy and through the dedicated teamwork of all Gasunie employees.
Looking back, we can say that in 2012 our financial results were satisfying. We achieved a profit of € 359 million on an invested capital of € 8,675 million.
The Dutch Competition Authority (NMa) has determined that, due to a downward adjustment of the transport tariffs permitted in the past, we need to set off the sum of € 400 million. Of this amount, € 215 million was settled in 2012, while the remaining sum will be settled in 2013.
On 8 November 2012, the Dutch Industrial Appeals Tribunal (CBb) ruled that the method decisions that the NMa adopted in 2011 could remain in force. These method decisions determine the rates that Gasunie Transport Services (GTS) may charge for transport. This means that GTS can continue to maintain the rates established by the NMa for the current regulatory period. The CBb’s ruling has a positive effect, in that it creates greater clarity and stability in the market.
Access to the capital market
Gasunie’s has a long-term credit rating of AA- with a negative outlook from Standard & Poor’s, and A2 with a stable outlook from Moody’s. These credit ratings were not changed during 2012. Particularly during the present financially uncertain times, investors are looking for high-quality investment opportunities. As such, investors tend to prefer corporate bonds issued by companies in the infrastructure and regulated sectors such as our own, and we benefited from this development in 2012. We were able to issue two bonds of € 500 million each under favourable conditions in the public capital market. These bond issues have enabled us to already considerably reduce our refinancing risk for October 2013.
Our financing policy is to maintain a portfolio of loans with a well-balanced maturity profile, aimed at preventing large spikes in the repayment schedule of the outstanding debt. This is one of the reasons why the first bond was issued with a ten-year tenor and the second bond with a three-year tenor. The determination of the optimal maturity of loans will be increasingly aligned within the regulatory framework.
Gasunie has a clear strategy. This is to optimise the value of our existing assets, strengthen our leading position as a cross-border gas infrastructure company in Europe, and facilitate the transition to a more sustainable use of energy. These three aspects of our strategy will be dealt with in more detail in the Strategy section.
Inquiry into the takeover of the BEB network
The Dutch Minister of Finance commissioned an independent inquiry into Gasunie’s takeover of the German BEB network in 2007. The inquiry was made due to the impairments that Gasunie had to take in the years following the acquisition, because of the German regulator setting tariffs at a much lower level than had been foreseen at the time of the acquisition. The inquiry’s findings were published in December 2012. Gasunie gave its full cooperation to the inquiry and supports its recommendations. In fact, we had already implemented many of the recommendations based on our own evaluation of the circumstances.
The Supervisory Board expresses its deep regret that the impairments on the German network turned out to be necessary. Nonetheless, the Supervisory Board considers the BEB network to be of great strategic value, particularly because it contributes to greater liquidity and the more efficient functioning of the market, factors that also benefit consumers in the Netherlands. Moreover, investments in infrastructure are necessarily long-term, with the profits only materialising over the course of time.
To enable fully transparent and unhindered discussion of the inquiry’s findings, three members of Gasunie’s Supervisory Board have declared that they are willing to resign their position, after due consultation with the shareholder and the Executive Board.
Operational excellence can be achieved in a variety of ways. We are currently approaching it through several different initiatives: these include the Transponder programme, the Gasunie Way of Working and the Efficiency Masterplan.
Transponder: adjusted organisational structure
After a period of considerable growth, we have now adjusted our organisational structure to meet the changing demands of the business environment. The main vehicle for this has been our Transponder programme. The most important outcome of Transponder is the introduction, on 1 January 2012, of a new organisational structure, consisting of three business units (GTS, Gasunie Deutschland and Participations & Business Development), each of them accountable for their own results. This has enabled Gasunie to become more efficient.
We provide extensive services in the field of gas infrastructure in Europe, and, in this context, the new organisational structure should also create greater transparency for the shareholder and the regulator, help to safeguard security of supply in the Dutch network, and guarantee financial integrity. The new organisational structure will also help to stimulate a mindset of operational excellence, which is fully in line with the Gasunie Way of Working.
Gasunie Way of Working
The Gasunie Way of Working is essentially the way our employees behave in helping the company achieve its strategy. It forms part of a process of cultural change that started with Transponder. It focuses on giving priority to the general interest of the company, and the mutual provision of constructive feedback. The Gasunie Way of Working, which is based on our core values, is central to our activities. It is the best way of continuing to improve our organisation, boosting operational excellence and taking our service provision to customers and society to the highest level.
Gasunie strives to perform in an optimum way and at the lowest possible cost. That is why we have introduced our organisation-wide Efficiency Masterplan. We continually seek to make more intelligent use of our capacities to make our organisation more effective and efficient. In doing so, we look at the total costs in their overall context. We not only aim for efficiency in relation to operational costs, but also for efficiency in our investments in infrastructure. Here, too, the goal is optimum quality at the lowest possible price. In this way, the aim for greater efficiency fits into the framework of operational excellence.
The Efficiency Masterplan is a three-year plan designed to save, cumulatively and structurally, € 60 million (compared to 2011). We planned to save € 17 million in 2012, and this target was duly reached.