Letter to shareholders
The BKW Group1 has once again exceeded the record result of the previous year, despite the difficult overall economic conditions. In the 2020 financial year sales rose by 9 % to CHF 3.1 billion. Operating profit (EBIT) increased by 10 % to CHF 475 million. BKW also secured a further growth in operating cash flow, which climbed by 24 % to a record-high of CHF 662 million.
The future is renewable, electric and efficient. With the electrification of transportation and the heating sectors, and the increasing trend for decentralised energy generation on building envelopes, the issues of infrastructure, buildings and energy are converging ever closer and complementing each other to create one complete system.
BKW’s successful strategy means it is in a position to offer its customers innovative and economic solutions within this entire system. It has successfully continued the development of the Energy and Grid businesses and built up a strong Services business. Through its technological expertise and system competence, it offers its customers a comprehensive spectrum of products and services. This covers renewable production through the expansion and optimisation of production and supply infrastructure, the planning of urban centres and resource-efficient solutions inside buildings to product offerings involving electro- mobility.
The 2020 results show that the implementation of the strategy is delivering success. Sales, EBIT and operating cash flow have increased once again compared with a very successful previous year. Even adjusted by the one-off effect of the compensation payment from Swissgrid for the former BKW transmission grid, EBIT of CHF 436 million was still higher than the record level from the previous year. This clearly exceeds the guidance issued in the Half-Year Report which was already raised to CHF 400 to 420 million. Net profit from the operating business increased by 22 % to CHF 349 million. The performance of the state fund for decommissioning and disposal was positive in 2020, but perceptibly below the excellent performance in 2019. Due to this difference, 2020 reported net profit was below the level of the previous year. BKW’s market value now exceeds CHF 5 billion for the first time.
Particularly pleasing is the result in the Services business, where sales have risen by over 30 %. Due to the coronavirus situation the rise in EBIT has been more restrained, yet it still grew by 17 %. It now contributes more than CHF 80 million to Group EBIT. Although sales in the Energy business dropped by 11 % due to the decommissioning of the Mühleberg Nuclear Power Plant, the comparative reduction in EBIT was only 4 %. This confirms the positive effect of the Mühleberg shutdown. The decommissioning and dismantling works are proceeding on schedule. Grid operating profit developed steadily – aside from the positive Swissgrid one-off effect.
Further strengthened by this very good result, BKW is in an excellent position to meet the challenges ahead. The market and society are demanding new solutions for a CO2-neutral world. Taking a holistic view of infrastructure, buildings and energy gives us the opportunity to achieve the climate objectives. By drawing on its decades of experience, its technological know-how and comprehensive expertise, BKW is making a significant contribution to sustainable, social and economic development by maintaining the balance between prosperity and the environment. It is fulfilling a growing customer requirement for innovative solutions and is thus creating the basis for the living spaces of the future.
BIM methodology (Building Information Modeling) enables the networked planning, implementation and management of buildings and infrastructures and is becoming increasingly prevalent in the building and construction industry value chain. BKW has established a BIM Competence Centre to pool know-how from the entire Group and create added value for its customers. The systems and services of the Competence Centre are available to all Group companies and their customers.
BKW thinks holistically and is aware of its responsibility regarding sustainable development. This is why it is committed to the principles of the UN Global Compact and to the Sustainable Development Goals of the UN 2030 Agenda. Having considered its wide-ranging business activities, BKW has identified ten of these 17 SDGs in which it can achieve the greatest impact.
The very successful 2020 financial year encourages us to continue on the path we have set. We would like to thank all those who continue to support us: our shareholders, our customers, our suppliers and our partners. We also wish to express our heartfelt thanks to our employees for their commitment to our company. Together we are making an important contribution to overcoming big social challenges such as climate change.
Chairman of the Board
Dr. Suzanne Thoma
1 The BKW Group comprises BKW AG and its Group companies. In order to make this report easier to read, the Group will be referred to as BKW. Where the text relates to BKW AG or BKW Energie AG, this is expressly mentioned.