European Utilities Key Player Profiles: SSE

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
European Utilities Key Player Profile: SSE 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
SSE scores 28.8/100 on Datamonitor's European Utility Scorecard and ranks 23 out of the 31 Key Players covered 14
SSE's ranking varies widely across the four pillars 16
SSE achieves an overall ranking of 23, with a utility score of 28.8 21
SSE scores well below the Key Player averages on the Growth and Exposure pillars 22
SSE is ahead of the average Key Player in Performance, yet with a slightly higher than average level of risk 23
SSE underperforms the Key Player average on both Scale and Growth 24
SSE Performance rank of 13 is buoyed by strong scores in return on energy volume and return on investment 25
SSE's financial Performance score of 11.6 beats the Key Player average of 10.9 26
SSE beats the Key Player average and some top ten utilities on return on fixed assets, yet lags on other metrics 27
SSE significantly outperforms the Key Player average, and many top ten utilities, on return on energy volume and investment 28
SSE ranks 14 on the Scale pillar, despite a lack of gas supply volume 29
SSE scores below average on each metric, yet ranks above average on all but gas supply volume 30
In generation capacity, SSE ranks 15 with 10 GW 31
SSE is focused wholly on power, with a supply volume of 50 TWh 32
SSE has a 3.6% share of Key Player power customers 33
At 50 TWh, SSE ranks 15 in terms of power volume 34
SSE does not have a gas business 35
SSE ranks 12 and 17 in revenue and net income, respectively 36
SSE's ranks 26 on the Growth pillar, despite a rank of 4 in revenue growth 37
SSE falls well below the Key Player average on the operating cash flow metric 38
SSE has a roughly average price earnings ratio, despite having a below average operating profit margin 39
SSE's average annual revenue growth from 2001-2005 (17.6%) outpaced profit growth of 8.3% 40
From 2004-2005, SSE's operating cash flow declined steeply (-33.4%), despite power supply volume growth of 4.6% 41
SSE's Exposure rank of 24 is affected by a significant decline in operating cash flow 42
Only on the power NTR metric does SSE rank at the Key Player average 43
SSE has a short power NTR of -17.4% 44
SSE's power supply obligations exceed its generation capacity, resulting in a short power NTR of 8,828 GW 45
SSE is heavily leveraged, with a debt to equity ratio of 101.6% 46
SSE ranks 18 of the 31 Key Players in terms of debt leverage 47
SSE's operating cash flow has dropped -33.4%, while power volume has grown by 4.6% 48
SSE operations and customers are UK-based 49
Gas and coal are SSE's main fuels for power generation 50
SSE has a 3.6% share of Key Player power customers 51
APPENDIX 52
Databook 52
Definitions 71
Datamonitor Consulting 71
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: SSE scores 28.8/100 on Datamonitor's European Utility Scorecard and ranks 23 out of the 31 Key Players covered 15
Table 7: SSE scores 11.6/25 on the Performance pillar, and ranks 13 out of 31 on this measurement 17
Table 8: SSE scores 2.6/25 on the Scale pillar, and ranks 14 out of 31 on this measurement 18
Table 9: SSE scores 6.6/25 on the Growth pillar, and ranks 26 out of 31 on this measurement 19
Table 10: SSE scores 8/25 on the Exposure pillar, and ranks 24 out of 31 on this measurement 20
Table 11: SSE Performance rank of 13 is buoyed by strong scores in return on energy volume and return on investment 25
Table 12: SSE ranks 14 on the Scale pillar, despite a lack of gas supply volume 29
Table 13: SSE's ranks 26 on the Growth pillar, despite a rank of 4 in revenue growth 37
Table 14: SSE's Exposure rank of 24 is affected by a significant decline in operating cash flow 42
Table 15: Return on fixed assets 52
Table 16: Return on sales 53
Table 17: Operating profit margin 54
Table 18: Return on energy volume 55
Table 19: Return on investment 56
Table 20: Net income / Net income of 94 leading utilities 57
Table 21: Net income / Net income of 94 leading utilities 58
Table 22: Net income / Net income of 94 leading utilities 59
Table 23: Net income / Net income of 94 leading utilities 60
Table 24: Revenue / Revenue of 94 leading utilities 61
Table 25: Revenue growth, 2001-2005 CAGR 62
Table 26: Profit growth, 2001-2005 CAGR 63
Table 27: Growth in operating cash flow, 2004 to 2005 64
Table 28: Gas supply volume growth, 2004-2005 65
Table 29: Growth in power supply volume, 2004 to 2005 66
Table 30: Power NTR / Power supply volume 67
Table 31: Gas NTR / Gas supply volume 68
Table 32: Debt leverage 69
Table 33: Growth in operational cash flow - Growth in energy volume 70
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: SSE achieves an overall ranking of 23, with a utility score of 28.8 21
Figure 7: SSE scores well below the Key Player averages on the Growth and Exposure pillars 22
Figure 8: SSE is ahead of the average Key Player in Performance, yet with a slightly higher than average level of risk 23
Figure 9: SSE underperforms the Key Player average on both Scale and Growth 24
Figure 10: SSE's financial Performance score of 11.6 beats the Key Player average of 10.9 26
Figure 11: SSE beats the Key Player average and some top ten utilities on return on fixed assets, yet lags on other metrics 27
Figure 12: SSE significantly outperforms the Key Player average, and many top ten utilities, on return on energy volume and investment 28
Figure 13: SSE scores below average on each metric, yet ranks above average on all but gas supply volume 30
Figure 14: In generation capacity, SSE ranks 15 with 10 GW 31
Figure 15: SSE is focused wholly on power, with a supply volume of 50 TWh 32
Figure 16: SSE has a 3.6% share of Key Player power customers 33
Figure 17: At 50 TWh, SSE ranks 15 in terms of power volume 34
Figure 18: SSE does not have a gas business 35
Figure 19: SSE ranks 12 and 17 in revenue and net income, respectively 36
Figure 20: SSE falls well below the Key Player average on the operating cash flow metric 38
Figure 21: SSE has a roughly average price earnings ratio, despite having a below average operating profit margin 39
Figure 22: SSE's average annual revenue growth from 2001-2005 (17.6%) outpaced profit growth of 8.3% 40
Figure 23: From 2004-2005, SSE's operating cash flow declined steeply (-33.4%), despite power supply volume growth of 4.6% 41
Figure 24: Only on the power NTR metric does SSE rank at the Key Player average 43
Figure 25: SSE has a short power NTR of -17.4% 44
Figure 26: SSE's power supply obligations exceed its generation capacity, resulting in a short power NTR of 8,828 GW 45
Figure 27: SSE is heavily leveraged, with a debt to equity ratio of 101.6% 46
Figure 28: SSE ranks 18 of the 31 Key Players in terms of debt leverage 47
Figure 29: SSE's operating cash flow has dropped -33.4%, while power volume has grown by 4.6% 48
Figure 30: Gas and coal are SSE's main fuels for power generation 50
Figure 31: SSE has a 3.6% share of Key Player power customers 51