Financial Review
In financial year 2024, Alpiq Group again generated a very good result, despite an increasingly nervous market shaped by continued geopolitical event risks in the last months of the year. All three value chain elements – Assets, Trading and Origination – contributed positively to the result. This was achieved by a continued focus on Alpiq’s core business and value creation along the value chain, together with reinforced risk management practices to account for the new market dynamics.
Thanks to the very good business results, Alpiq further increased its net cash and equity ratio compared with the previous year. This very solid financial position enabled Alpiq to repay a bond of CHF 260 million that matured in July 2024 without refinancing, and to fully repay the public hybrid bond of CHF 650 million from its own funds in mid-November. Despite these repayments, Alpiq is in a very strong position to continue the company’s strategic development. The flexibility in the financing of strategic growth is additionally enhanced by two new unsecured committed Revolving Credit Facilities, for a total amount of CHF 3.6 billion.
With its flexible asset base, Alpiq contributes to the integration of continuously growing wind and solar capacity in most European markets. As part of the strategy confirmed by Alpiq’s Board of Directors at the end of 2023, Alpiq will continue to focus on flexibility and its key role in the energy markets. Alpiq strengthened its position as a provider of flexibility to the energy system with several acquisitions during financial year 2024. In April, it acquired a majority stake in the Finnish hydrogen pioneer P2X Solutions. P2X Solutions is a Power-to-X developer with a focus on the production and distribution of green hydrogen and synthetic fuels. In June, Alpiq made its first investment in battery energy storage systems (BESS) with the purchase of a 30 MW battery project in Finland. The project is under construction and is expected to enter into operation in 2025. In November, Alpiq acquired a BESS project in France: the large-scale battery is expected to go into operation in 2026 with an output of 100 MW and a capacity of 200 MWh. These promising investments will enable the integration of intermittent renewables and contribute to security of supply.
To enable transparent presentation of the Group results before non-operating effects, the consolidated income statement is presented as a pro forma statement. The commentary on financial performance relates to a view of operating EBITDA, EBIT and net income before non-operating effects. The non-operating effects are detailed in the section “Alternative performance measures of Alpiq”.
Alpiq Group: results of operations (before non-operating effects)
Adjusted net revenue decreased in line with energy prices to CHF 6,365.7 million (CHF 2,030.4 million less than the previous year). The adjusted EBITDA of CHF 962.4 million was CHF 221.4 million below the previous year. All three value chain elements – Assets, Trading and Origination – contributed positively to this very good result.
Consolidated income statement (pro forma statement before and after non-operating effects)
2024 | 2023 | |||||
CHF million | Results of operations before non-operating effects | Non-operating effects | Results under IFRS | Results of operations before non-operating effect | Non-operating effects | Results under IFRS |
Net revenue | 6,365.7 | 277.3 | 6,643.0 | 8,396.1 | 562.6 | 8,958.8 |
Own work capitalised | 3.9 | 3.9 | 5.0 | 5.0 | ||
Other operating income | 20.4 | 20.4 | 19.3 | 19.3 | ||
Total revenue and other income | 6,390.0 | 277.3 | 6,667.3 | 8,420.3 | 562.6 | 8,983.1 |
Energy and inventory costs | – 5,001.5 | 147.1 | – 4,854.4 | – 6,852.1 | 59.4 | – 6,792.7 |
Employee costs | – 246.2 | – 246.2 | – 228.2 | – 228.2 | ||
Other operating expenses | – 179.8 | – 179.8 | – 156.2 | – 156.2 | ||
Earnings before interest, tax, depreciation and amortisation (EBITDA) | 962.4 | 424.4 | 1,386.9 | 1,183.8 | 622.0 | 1,806.0 |
Depreciation, amortisation and impairment | – 114.5 | – 114.5 | – 112.4 | – 112.4 | ||
Earnings before interest and tax (EBIT) | 847.9 | 424.4 | 1,272.3 | 1,071.5 | 622.0 | 1,693.6 |
Share of results of partner power plants and other associates | – 7.4 | – 7.4 | – 23.3 | – 23.3 | ||
Finance costs | – 122.7 | – 122.7 | – 144.2 | – 144.2 | ||
Finance income | 34.5 | 34.5 | 47.4 | 47.4 | ||
Earnings before tax (EBT) | 752.3 | 424.4 | 1,176.7 | 951.4 | 622.0 | 1,573.5 |
Income tax expense | – 146.5 | – 86.8 | – 233.3 | – 131.9 | – 106.0 | – 237.9 |
Net income | 605.7 | 337.6 | 943.4 | 819.5 | 516.0 | 1,335.6 |
2024: Results of operations by segment
CHF million | Assets | Trading | Origination | Other 1 | Alpiq Group |
Net revenue | 4,069.7 | 3,274.6 | 4,714.6 | – 5,415.9 | 6,643.0 |
Non-operating effects | – 20.5 | – 10.9 | – 247.2 | 1.3 | – 277.3 |
Adjusted net revenue | 4,049.2 | 3,263.7 | 4,467.4 | – 5,414.6 | 6,365.7 |
Other income | 31.4 | 2.1 | 0.9 | – 10.2 | 24.3 |
Adjusted total revenue and other income | 4,080.7 | 3,265.8 | 4,468.3 | – 5,424.8 | 6,390.0 |
Energy and other costs | – 2,961.4 | – 3,235.6 | – 4,381.8 | 5,298.5 | – 5,280.4 |
Non-operating effects | – 147.1 | – 147.1 | |||
Adjusted energy and other costs | – 3,108.6 | – 3,235.6 | – 4,381.8 | 5,298.5 | – 5,427.5 |
Adjusted EBITDA | 972.1 | 30.1 | 86.5 | – 126.3 | 962.4 |
Depreciation, amortisation and impairment | – 101.9 | – 0.1 | – 2.8 | – 9.7 | – 114.5 |
Adjusted depreciation, amortisation and impairment | – 101.9 | – 0.1 | – 2.8 | – 9.7 | – 114.5 |
Adjusted EBIT | 870.1 | 30.1 | 83.7 | – 136.0 | 847.9 |
1The segment results are carried over to the Alpiq Group's consolidated figures by including the units with limited market operations (Corporate), Group consolidation effects as well as other reconciliation items. For more details, please refer to note 2.1 of the notes to the consolidated financial statements.
2023: Results of operations by segment
CHF million | Assets | Trading | Origination | Other 1 | Alpiq Group |
Net revenue | 4,074.9 | 3,154.0 | 6,510.6 | – 4,780.8 | 8,958.8 |
Non-operating effects | – 402.9 | – 79.7 | – 79.8 | – 0.3 | – 562.6 |
Adjusted net revenue | 3,672.0 | 3,074.3 | 6,430.8 | – 4,781.1 | 8,396.1 |
Other income | 31.5 | 1.1 | 0.4 | – 8.8 | 24.3 |
Adjusted total revenue and other income | 3,703.6 | 3,075.4 | 6,431.2 | – 4,789.9 | 8,420.3 |
Energy and other costs | – 2,605.0 | – 3,020.7 | – 6,262.3 | 4,710.9 | – 7,177.1 |
Non-operating effects | – 59.0 | – 0.4 | – 59.4 | ||
Adjusted energy and other costs | – 2,664.0 | – 3,021.1 | – 6,262.3 | 4,711.0 | – 7,236.4 |
Adjusted EBITDA | 1,039.6 | 54.3 | 168.9 | – 78.9 | 1,183.8 |
Depreciation, amortisation and impairment | – 99.5 | – 0.4 | – 3.1 | – 9.4 | – 112.4 |
Adjusted depreciation, amortisation and impairment | – 99.5 | – 0.4 | – 3.1 | – 9.4 | – 112.4 |
Adjusted EBIT | 940.1 | 53.8 | 165.8 | – 88.2 | 1,071.5 |
1The segment results are carried over to the Alpiq Group's consolidated figures by including the units with limited market operations (Corporate), Group consolidation effects as well as other reconciliation items. For more details, please refer to note 2.1 of the notes to the consolidated financial statements.
Assets
With an adjusted EBITDA of CHF 972.1 million, the result of the value chain element Assets was CHF 67.5 million below the previous year. Lower energy prices and less volatility had a negative effect on the result; this effect was noticeable across all main operating markets and ancillary services. Given these market conditions, the performance of the value chain element was very good: it benefited from the stronger collaboration throughout the entire value chain, thanks to increased production at most power plants and also to the adjusted asset hedging strategy, which made optimal use of the flexible production portfolio. Higher production was driven in particular by much higher inflows in Switzerland and an increased dispatch of the flexible thermal assets in Italy.
Trading
Against the backdrop of an extraordinary previous year of high prices and trading opportunities, the result of the value chain element Trading was CHF 24.2 million lower. Nevertheless, the contribution of an adjusted EBITDA of CHF 30.1 million is the result of Alpiq’s commitment to trading, even in difficult market conditions.
Origination
The value chain element Origination achieved a solid result in 2024 with an adjusted EBITDA of CHF 86.5 million, thanks to customer proximity and balanced portfolio management. The result was CHF 82.4 million lower than the previous year due to reduced volatility and market price levels. In Germany, France and Spain, the market access portfolios for third-party owned assets improved due to an increased focus on the flexibility that can be provided through these portfolios.
Alternative performance measures of Alpiq
To measure and present its operating performance, Alpiq also uses alternative performance measures through to the level of “Net income”. Alpiq makes adjustments to the IFRS results for non-operating effects which Alpiq does not consider part of results of operations.
These performance measures do not have a standardised definition in IFRS. This can therefore limit comparability with such measures as defined by other companies. These performance measures are presented in a pro forma statement in order to give investors a deeper understanding of how Alpiq’s management measures the performance of the Group. However, they are no substitute for IFRS performance measures.
Overview of non-operating effects
Fair value changes (accounting mismatch) | Development of decommissioning and waste disposal funds | Total non-operating effects | ||||
CHF million | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
Net revenue | 287.0 | 566.6 | – 9.7 | – 4.0 | 277.3 | 562.6 |
Total revenue and other income | 287.0 | 566.6 | – 9.7 | – 4.0 | 277.3 | 562.6 |
Energy and inventory costs | 147.1 | 59.4 | 147.1 | 59.4 | ||
Earnings before interest, tax, depreciation and amortisation (EBITDA) | 287.0 | 566.6 | 137.4 | 55.4 | 424.4 | 622.0 |
Earnings before interest and tax (EBIT) | 287.0 | 566.6 | 137.4 | 55.4 | 424.4 | 622.0 |
Earnings before tax (EBT) | 287.0 | 566.6 | 137.4 | 55.4 | 424.4 | 622.0 |
Income tax expense | – 64.2 | – 98.4 | – 22.6 | – 7.6 | – 86.8 | – 106.0 |
Net income | 222.9 | 468.2 | 114.8 | 47.8 | 337.6 | 516.0 |
Alpiq has defined the following categories of non-operating effects:
Fair value changes (accounting mismatch)
Negative fair value changes of energy derivatives entered into to hedge future power production as well as energy procurement and energy delivery contracts do not reflect operating performance because they are economically linked with the changes in value of the hedged transactions. Rising forward prices cause the future production volumes and power purchase agreements to increase in value and the corresponding hedges to lose value. According to IFRS guidelines, the fair value changes of financial hedges between the last and the current balance sheet date have to be recognised in the reporting year. As the future production volumes and the power purchase agreements are not measured at fair value and positive changes in value therefore cannot be recognised in the reporting year, this results in an accounting mismatch.
Accounting mismatch and expected reversals (based on energy prices as of 31 December 2024)
CHF million | |
Accounting mismatch until 31 December 2023 | – 158.0 |
Change in accounting mismatch in 2024 | 287.0 |
Total accounting mismatch at 31 December 2024 | 129.0 |
Of which, will be reversed in 2025 | – 71.7 |
Of which, will be reversed in 2026 | – 45.6 |
Of which, will be reversed in 2027 | – 14.5 |
Of which, will be reversed after 2027 | 2.8 |
Development of decommissioning and waste disposal funds
The operating companies of Switzerland’s nuclear power plants are required to make payments into the decommissioning fund and the waste disposal fund to ensure that decommissioning and waste disposal activities are funded. The investments of these two funds are exposed to market fluctuations and changes in estimates, which cannot be influenced by Alpiq but which do influence electricity procurement costs. The difference between the return actually generated by the funds and the return budgeted by the nuclear power plants of 2.75% is classified and recorded as a non-operating effect.
Consolidated balance sheet and cash flow statement (after non-operating effects)
Total assets amounted to CHF 8.5 billion at 31 December 2024, compared with CHF 10.5 billion at end 2023. Non-current assets were fairly stable compared with the previous year, while current assets declined by CHF 1.8 billion to CHF 4.2 billion driven predominantly by lower energy prices impacting current derivative financial instruments and trade receivables. Cash and cash equivalents remained stable at CHF 1.6 billion and current term deposits decreased by CHF 253.4 million from the previous year to a total of CHF 117.3 million. Net cash increased from CHF 346.6 million at 31 December 2023 to CHF 428.4 million at 31 December 2024, leaving Alpiq in a very solid financial position.
Total equity increased by CHF 165.8 million due to the strong financial performance of Alpiq in 2024, partly offset by the repayment of the hybrid bond, which reduced total equity by CHF 650 million. The equity ratio increased further to 58.3% at year-end 2024 compared with 45.9% at year-end 2023, driven also by the decrease in total assets.
Financial liabilities amounted to CHF 1.2 billion at 31 December 2024 compared with CHF 1.6 billion at 31 December 2023. The decrease was due mainly to a bond repayment with a nominal value of CHF 260 million in 2024. Compared with 31 December 2023, non-current liabilities decreased by CHF 436.7 million to CHF 1.6 billion, while current liabilities decreased by CHF 1.7 billion to CHF 2.0 billion at 31 December 2024. This decrease of total liabilities by CHF 2.1 billion was due predominantly to lower energy prices resulting in lower market values of derivative financial instruments and decreased trade payables.
The positive earnings before tax of CHF 1.2 billion, partly offset by the change in fair value of derivative financial instruments and the change in net working capital, led to positive net cash flows from operating activities of CHF 1.0 billion (previous year CHF 0.6 billion). Net cash flows from investing activities increased by CHF 504.4 million to CHF 195.4 million in 2024, due to the decrease in current term deposits as a result of cash management.
Net cash flows from financing activities amounted to CHF –1.3 billion and were down CHF 1.1 billion on the previous year, driven mainly by the repayment of the hybrid bond of CHF 650 million and of one bond of CHF 260 million in 2024. Overall, the decrease in cash and cash equivalents amounted to CHF 11.8 million and thus remained stable at CHF 1,561.1 million at end 2024 compared with CHF 1,572.9 million at end 2023.
Outlook
In 2025, Alpiq will continue to consistently drive forward the implementation of the strategy, focusing on flexibility and enabling the integration of wind and solar in the energy system. All value chain elements Assets, Trading and Origination are expected to deliver good results in 2025. This is thanks to Alpiq’s strong asset portfolio, well-positioned trading and origination business closely connected to its customers. Alpiq is confident of maintaining its very solid financial position in 2025, with optimal support of value chain operations and implementation of Alpiq’s strategy, further enabling security of supply and a better climate.