Principles of the consolidated interim financial statements
Principles of the consolidated interim financial statements
The consolidated interim financial statements as of 30 June 2009 were prepared in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting". The financial statements are based on the unchanged accounting principles of the Alpiq Group as presented in the last Annual Report. The interim financial statements are not audited.
As of 1 January 2009, the following International Financial Reporting Standards (IFRS) guidelines respectively IFRIC interpretations became effective and were applied by the Alpiq Group:
- IAS 1 rev.: Presentation of Financial Statements (1.1.2009)
- IAS 23 rev.: Borrowing Costs (1.1.2009)
- IAS 1 and IAS 32 amendments: Puttable Financial Instruments and Obligations Arising on Liquidation (1.1.2009)
- IAS 39 and IFRS 7 amendments: Disclosures relating to the Reclassification of Financial Assets (1.7.2008)
- IAS 27 and IFRS 1 amendments: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate (1.1.2009)
- IFRS 2 amendment: Vesting Conditions and Cancellations (1.1.2009)
- IFRS 8: Operating Segments (1.1.2009)
- IFRIC 13: Customer Loyalty Programmes (1.7.2008)
- IFRIC 15: Agreements for the Construction of Real Estate (1.1.2009)
- IFRIC 16: Hedges of a Net Investment in a Foreign Operation (1.10.2008)
In addition, besides the amendments stated above, the IASB and IFRIC have decided on and declared as mandatory numerous other marginal adjustments of guidelines in the standards. By the majority, they are applicable as of 1.1.2009.
The application of these new rules did not have a significant impact on the results and the financial situation of the Alpiq Group.
Explanatory note 1: Foreign currencies
The consolidated financial statements are presented in Swiss francs. For currency conversions the following exchange rates were applied:
| Unit | Conversion date 30.06.2008 | Conversion date 31.12.2008 | Conversion date 30.06.2009 | Average 2008/1 | Average 2009/1 | |
|---|---|---|---|---|---|---|
| 1 | USD | 1.02 | 1.07 | 1.08 | 1.05 | 1.13 |
| 1 | EUR | 1.606 | 1.485 | 1.527 | 1.606 | 1.506 |
| 100 | HUF | 0.68 | 0.56 | 0.56 | 0.63 | 0.52 |
| 100 | CZK | 6.72 | 5.53 | 5.90 | 6.38 | 5.55 |
| 100 | PLN | 47.91 | 35.75 | 34.29 | 46.05 | 33.70 |
| 100 | NOK | 20.05 | 15.23 | 16.93 | 20.20 | 16.94 |
Explanatory note 2: Segment reporting (shortened)
| 2008/1 CHF million | Energy | Energy Services | Other | Transactions between the segments and other effects | Total |
|---|---|---|---|---|---|
| External revenue from energy sales / order completion | 5 376 | 1 008 | - 17 | 6 367 | |
| External gains on trading standard products and financial energy transactions | 12 | 12 | |||
| Total external revenue | 5 388 | 1 008 | - 17 | 6 379 | |
| EBIT | 420 | 58 | 478 | ||
| Net investments in tangible fixed and intangible assets | 176 | 27 | 7 | - 41 | 169 |
| Employees 1 | 1 762 | 7 728 | 1 | 9 491 | |
| 2009/1 CHF million | Energy | Energy Services | Other | Transactions between the segments and other effects | Total |
|---|---|---|---|---|---|
| 1 Average number of full-time equivalent employees | |||||
| External revenue from energy sales / order completion | 6 153 | 967 | 2 | - 28 | 7 094 |
| External gains on trading standard products and financial energy transactions | 2 | 2 | |||
| Total external revenue | 6 155 | 967 | 2 | - 28 | 7 096 |
| EBIT | 483 | 28 | - 6 | 505 | |
| Net investments in tangible fixed and intangible assets | 266 | 22 | 3 | - 29 | 262 |
| Employees 1 | 2 256 | 8 294 | 1 | 10 551 | |
In line with IFRS guidelines, Alpiq (former Atel) has published annual segment reportings in both the half-year and in the annual report since 1999, based on the internal reporting for the two business segments Energy and Energy Services. In relation with the merger of Atel and EOS, the Group is currently introducing a financial information system adapted to the new Group structure. This project is expected to be completed by the end of 2009. Alpiq's internal reporting to the decision makers for the financial year 2009 is thus generated on the basis of the information available (Energy and Energy Services). The activities of EOS and Emosson taken over in 2009 have been integrated into the Energy segment.
Explanatory note 3: Business combinations
Business combination of Atel and EOS
In December 2008, the Boards of Directors of Atel Holding, EOS Holding and EDF International have approved the industrial merger of the operating activities of Atel and EOS as well as the bringing in of the energy purchase rights and obligations of the 50 % investment of EDF in Emosson SA. The respective transaction contracts were signed by all parties on 18 December 2008 after close of the stock exchange.
The Extraordinary General Meeting of Atel Holding Ltd of 27 January 2009 has approved all proposals relating to the business combination.
At its constitutive meeting of 27 January 2009, the Board of Directors of Alpiq Holding Ltd. has decided to increase the share capital of Alpiq Holding Ltd. by a total of 5 666 241 fully paid-in registered shares with a nominal value of CHF 10 each from CHF 218 379 180 to CHF 275 041 590. This capital comes from the authorised capital increase, which was approved for purposes such as this by the Extraordinary General Meeting on 7 November 2007.
In return for its assets to bring in, EOS Holding received a total of 4 478 730 fully paid-in registered shares of Alpiq Holding Ltd. with a nominal value of CHF 10 each. In addition, Alpiq made a payment of CHF 1 784.5 million, financed by a short-term acquisition financing limit of CHF 1 000 million and by shareholder loans. Another part was paid from cash available. As of 30 June 2009, CHF 700 million of the short-term acquisition financing limit are already refinanced on a long-term basis by bonds issued.
The assets brought in by EOS concern the following investments:
100.0 % of Energie Ouest Suisse (EOS) SA, Lausanne, including its investments
100.0 % of Avenis SA, Lausanne
100.0 % of EOS Trading SA, Lausanne
31.8 % of Cleuson-Dixence Construction SA, Sion
27.6 % of Hydro Exploitation SA, Sion
20.0 % of Cisel Informatique SA, Matran
For bringing in its assets of Emosson, Electricité de France SA received a total of 1 187 511 fully paid-in registered shares of Alpiq Holding Ltd. with a nominal value of CHF 10 each. With the acquisition of the additional 50 % energy purchase rights of the Emosson power plant, Alpiq gained control over the company. As a consequence, Alpiq has performed a purchase price allocation in accordance with IFRS 3 and fully consolidated the power plant from the date of acquisition. In line with the requirements of IFRS, the existing 50 % investment was increased to fair value. The difference between the existing proportionate equity and the fair value was recorded directly in equity.
On the basis of the valuation of the assets and liabilities to bring in by EOS and Emosson performed in the first half-year 2009, the assets stated on the next page were identified and allocated to the balance sheet positions.
| Activities brought in by EOS | Activities brought in by Emosson | |||
| CHF million | IFRS carrying amounts | Fair values | IFRS carrying amounts | Fair values |
| Tangible fixed assets | 496 | 1 268 | 419 | 1 380 |
| Intangible assets | 443 | 1 601 | ||
| Investments in associates and other financial investments | 873 | 3 569 | ||
| Cash | 252 | 252 | 5 | 5 |
| Other current assets | 447 | 447 | 6 | 6 |
| Provisions and deferred income taxes | - 202 | - 1 054 | - 211 | |
| Financial liabilities | - 709 | - 709 | - 262 | - 262 |
| Other liabilities | - 372 | - 1 126 | - 28 | - 28 |
| Minority interests | - 3 | - 61 | ||
| Net assets | 1 225 | 4 187 | 140 | 890 |
| Existing 50 % share of Atel Holding in Emosson | - 445 | |||
| Net assets excluding shares held by Alpiq Holding | 4 187 | 445 | ||
| Goodwill purchased through acquisition | 149 | 231 | ||
| Compensation by issuing registered shares | - 2 545 | - 675 | ||
| Net cash flow from acquisition: | ||||
| Acquired cash from subsidiaries | 252 | 5 | ||
| Transaction cost | - 7 | - 1 | ||
| Cash payment | - 1 784 | |||
| Liabilities not paid yet (retained warranties, shareholder loans) | 1 070 | |||
| Net cash flow | - 469 | 4 | ||
Goodwill mainly consists of not separately identifiable assets and the synergies expected from the merger.
Due to the small market size, the quoted market price at the date of the exchange does not represent a reliable indicator for the fair value of the Alpiq Holding shares issued. Therefore, in the first half-year 2009 a current valuation was performed based on the same valuation model as used to determine the exchange ratio between the parties involved.
Since the integration into the Alpiq Group, the companies acquired contributed a revenue of CHF 1 252 million and net profit to the Group of CHF 64 million.
If the companies had been acquired as of 1st January 2009, the consolidated revenue would have increased by CHF 266 million respectively the net profit to the Group by CHF 24 million. In the financial year 2008, incorporating the companies would have increased the revenue by CHF 1 670 million respectively the net profit to the Group by CHF 65 million.
Other business combinations
- Energy Services segment: 27.03.2009: 100 % of Rossetto Impianti S.p.A, Verona / IT
The acquisition costs amounted to CHF 9 million and were allocated to balance sheet items as follows:
| Energy Services segment | ||
| Alpiq InTec | ||
| CHF million | Carrying amounts IFRS | Fair values |
| Intangible assets | 3 | |
| Financial assets | 1 | 1 |
| Deferred income tax assets | ||
| Cash | ||
| Other current assets | 15 | 15 |
| Short- and long-term financial liabilities | - 3 | - 3 |
| Other short- and long-term liabilities | - 12 | - 12 |
| Deferred income tax liabilities | ||
| Net assets acquired | 1 | 4 |
| Goodwill purchased through acquisition | 5 | |
| Net cash flow from acquisition: | ||
| Acquired cash from subsidiaries | 0 | |
| Acquisition costs | - 9 | |
| Liabilities not paid yet | 1 | |
| Net cash flow | - 8 | |
The goodwill purchased represents synergies expected from complementing the existing business activity as well as additional benefits expected from the expansion into existing market regions and the development of new products. Since the integration into the Alpiq Group, the contribution to revenue is CHF 7 million. If the acquisition had been performed as of 1st January 2009, the consolidated revenue would have increased by CHF 5 million. In the financial year 2008, incorporating the company would have increased the revenue by CHF 29 million.
In the Energy segment, the Romanian energy services provider EHOL S.R.L. was acquired after the balance sheet date. The purchase was financed with own cash. In the second half-year 2009, the company will be integrated in Alpiq's consolidated financial statements.
Disclosures related to the prior year:
The acquisition costs in the first half-year 2008 amounted to CHF 84 million, while net assets of CHF 57 million were acquired. The resulting goodwill amounted to CHF 27 million. The integrated companies contributed CHF 6 million cash to the Group. On an overall level, a net cash outflow of CHF - 71 million was accounted for.
Explanatory note 4: New bonds issued
In the first half-year 2009, Alpiq Holding Ltd. issued the following bonds:
- Nominal CHF 250 million, 4 % fixed interest with a term from 10.02.2009 to 10.02.2017
- Nominal CHF 200 million, 3 % fixed interest with a term from 10.02.2009 to 10.02.2014
New bond issued after the balance sheet date 30 June 2009:
- Nominal CHF 250 million, 3 1/4 % fixed interest with a term from 03.07.2009 to 03.07.2015
Explanatory note 5: Contingent liabilities and guarantee obligations
The total amount of guarantee obligations in favour of third parties not shown in the balance sheet as of 30 June 2009 has increased to CHF 1 831 million (31.12.2008: CHF 1 629 million).