European Utilities Key Player Profiles: Edison

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
European Utilities Key Player Profile: Edison 2
Datamonitor's Key Player Scorecard examines 31 leading utilities drawn from across Europe's competitive arenas 4
Key Players dominate power generation capacity market share in the Wmed competitive arena 5
Key Players dominate power generation output market share in the Wmed and CEE competitive arenas 6
Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate power supply volume market share 7
Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate gas volume market share 8
The Key Player Scorecard assesses utilities across four pillars: Performance, Scale, Growth and Exposure 9
The Performance pillar combines 5 financial metrics to measure business performance 10
The Scale pillar combines financial and operational metrics to measure the size of a utility 11
The Growth pillar measures the rate of growth of a utility's financial and energy resources 12
The Exposure pillar combines both operational and financial measurements of risk 13
Edison scores 24.7/100 on Datamonitor's European Utility Scorecard and ranks 27 out of the 31 Key Players covered 14
Edison underperforms the Key Player average in each of the four pillars 16
Edison achieves an overall ranking of 27, with a utility score of 24.7 21
Edison scores higher in Performance and Growth, but less so in Exposure and Scale 22
Edison underperforms, yet with an average level of risk 23
Edison underperforms the Key Player average and the top ten utilities in both Scale and Growth 24
Edison's Performance ranking of 25 is lifted only slightly by an above average operating profit margin 25
Edison's weakest Performance metrics are return on fixed assets and return on investment 26
Edison underperforms the Key Player average in return on sales and fixed assets, and operating profit margin 27
Edison also scores below the Key Player average on return on investment and energy volume 28
Edison underperforms the Key Player average in Scale, with a rank of 21 29
In Scale, Edison ranks 21 with a score of 1.6 30
In terms of generation capacity Edison ranks 16, with 6.6 GW 31
Edison's gas supply volume is 1.25 times its power supply volume, making it one of the most balanced integrated utilities 32
Edison has a less than one percent share of Key Player power customers 33
At 53 TWh, Edison ranks 13 in terms of power volume 34
Edison supplies less than one percent of Key Player gas customers 35
Edison lags the Key Player average in terms of gas volume, with a rank of 14 36
Edison ranks 19 and 22 in terms of revenue and net income respectively 37
Edison's low Growth ranking of 27 is due to underperformance in all but profit growth 38
Edison's profit growth ranks 6 amongst all Key Players 39
Edison's price earnings ratio is just above the Key Player median 40
From 2001 to 2005, Edison's annual profit growth (28.6%) far exceeded its revenue growth (8.4%) 41
Edison's operating cash flow (-55.2%) and gas supply volume (-38.1%) have declined dramatically from 2004 to 2005 42
Edison's Exposure ranking of 22 can be attributed to high debt leverage and very poor operating cash flow growth 43
But for its gas NTR, Edison lags the Key Player average on Exposure metrics 44
Edison's gas supply obligations outweigh its gas equity position, resulting in a gas NTR of -85% 45
Edison's power NTR deficit of -36.6% results in a rank of 20 46
Edison is more highly leveraged than many top ten utilities 47
Edison has a debt to equity ratio of 154.2% 48
Edison's operating cash flow has declined at twice the rate of its energy volume 49
Edison's operations are centred in Italy 50
Gas is the main source of Edison's power generation capacity, followed by hydro power 51
Edison's power customers are in Italy, and the company a less than one percent market share of Key Player power customers 52
Edison focuses on large customers and wholesale markets, resulting in a small market share of Key Player gas customers 53
APPENDIX 54
Databook 54
Definitions 73
Definitions 73
Datamonitor Consulting 73
List of Tables
Table 1: The Key Players are drawn from across a diverse range of markets 3
Table 2: The Performance pillar combines 5 financial metrics to measure business performance 10
Table 3: The Scale pillar combines financial and operational metrics to measure the size of a utility 11
Table 4: The Growth pillar measures the rate of growth of a utility's financial and energy resources 12
Table 5: The Exposure pillar combines both operational and financial measurements of risk 13
Table 6: Edison scores 24.7/100 on Datamonitor's European Utility Scorecard and ranks 27 out of the 31 Key Players covered 15
Table 7: Edison lags the average score in each pillar 17
Table 8: Edison scores 1.6/25 on the Scale pillar, and ranks 21 out of 31 on this measurement 18
Table 9: Edison scores 6.6/25 on the Growth pillar, and ranks 27 out of 31 on this measurement 19
Table 10: Edison scores 8.2/25 on the Exposure pillar, and ranks 22 out of 31 on this measurement 20
Table 11: Edison's Performance ranking of 25 is lifted only slightly by an above average operating profit margin 25
Table 12: Edison underperforms the Key Player average in Scale, with a rank of 21 29
Table 13: Edison's low Growth ranking of 27 is due to underperformance in all but profit growth 38
Table 14: Edison's Exposure ranking of 22 can be attributed to high debt leverage and very poor operating cash flow growth 43
Table 15: Return on fixed assets 54
Table 16: Return on sales 55
Table 17: Operating profit margin 56
Table 18: Return on energy volume 57
Table 19: Return on investment 58
Table 20: Generation Capacity / EU25 market total 59
Table 21: Power Supply Volume / EU25 market total 60
Table 22: Gas Supply Volume / EU25 market total 61
Table 23: Net income / Net income of 94 leading utilities 62
Table 24: Revenue / Revenue of 94 leading utilities 63
Table 25: Revenue growth, 2001-2005 CAGR 64
Table 26: Profit growth, 2001-2005 CAGR 65
Table 27: Growth in operating cash flow, 2004 to 2005 66
Table 28: Gas supply volume growth, 2004-2005 67
Table 29: Growth in power supply volume, 2004 to 2005 68
Table 30: Power NTR / Power supply volume 69
Table 31: Gas NTR / Gas supply volume 70
Table 32: Debt leverage 71
Table 33: Growth in operational cash flow - Growth in energy volume 72
List of Figures
Figure 1: Datamonitor's Key Player Scorecard examines 31 leading utilities drawn from across Europe's competitive arenas 4
Figure 2: Key Players dominate power generation capacity market share in the Wmed competitive arena 5
Figure 3: Key Players dominate power generation output market share in the Wmed and CEE competitive arenas 6
Figure 4: Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate power supply volume market share 7
Figure 5: Despite ongoing industry consolidation, in no competitive arenas do Key Players dominate gas volume market share 8
Figure 6: Edison achieves an overall ranking of 27, with a utility score of 24.7 21
Figure 7: Edison scores higher in Performance and Growth, but less so in Exposure and Scale 22
Figure 8: Edison underperforms, yet with an average level of risk 23
Figure 9: Edison underperforms the Key Player average and the top ten utilities in both Scale and Growth 24
Figure 10: Edison's weakest Performance metrics are return on fixed assets and return on investment 26
Figure 11: Edison underperforms the Key Player average in return on sales and fixed assets, and operating profit margin 27
Figure 12: Edison also scores below the Key Player average on return on investment and energy volume 28
Figure 13: In Scale, Edison ranks 21 with a score of 1.6 30
Figure 14: In terms of generation capacity Edison ranks 16, with 6.6 GW 31
Figure 15: Edison's gas supply volume is 1.25 times its power supply volume, making it one of the most balanced integrated utilities 32
Figure 16: Edison has a less than one percent share of Key Player power customers 33
Figure 17: At 53 TWh, Edison ranks 13 in terms of power volume 34
Figure 18: Edison supplies less than one percent of Key Player gas customers 35
Figure 19: Edison lags the Key Player average in terms of gas volume, with a rank of 14 36
Figure 20: Edison ranks 19 and 22 in terms of revenue and net income respectively 37
Figure 21: Edison's profit growth ranks 6 amongst all Key Players 39
Figure 22: Edison's price earnings ratio is just above the Key Player median 40
Figure 23: From 2001 to 2005, Edison's annual profit growth (28.6%) far exceeded its revenue growth (8.4%) 41
Figure 24: Edison's operating cash flow (-55.2%) and gas supply volume (-38.1%) have declined dramatically from 2004 to 2005 42
Figure 25: But for its gas NTR, Edison lags the Key Player average on Exposure metrics 44
Figure 26: Edison's gas supply obligations outweigh its gas equity position, resulting in a gas NTR of -85% 45
Figure 27: Edison's power NTR deficit of -36.6% results in a rank of 20 46
Figure 28: Edison is more highly leveraged than many top ten utilities 47
Figure 29: Edison has a debt to equity ratio of 154.2% 48
Figure 30: Edison's operating cash flow has declined at twice the rate of its energy volume 49
Figure 31: Gas is the main source of Edison's power generation capacity, followed by hydro power 51
Figure 32: Edison's power customers are in Italy, and the company a less than one percent market share of Key Player power customers 52
Figure 33: Edison focuses on large customers and wholesale markets, resulting in a small market share of Key Player gas customers 53