As Europe's utilities increasingly expand beyond incumbent markets, a broad comparison of financial performance becomes key to understanding where and how certain utilities outperform their peers on basic financial measurements such as profitability. Historic performance, market focus, value chain focus and even sheer size all must be tested as contributing factors to utility profitability.

Scope

A review of financial performance amongst 30 leading utilities across Europe. An analysis of potential driving factors behind profitability. An examination of how the financial performance of 30 leading utilities has changed over time. A review of the market focus of the best and worst performing utilities.

Highlights

Counter-intuitively, an accumulation of strong cash flows over time does not explain profitability levels in 2006. There are as many top performing utilities which saw cash flow fall from 2002 to 2006, as those which saw their level of cash flow increase over that period. On average, the top ten most profitable utilities in 2006 derived 62% of their revenue from markets that can be described as traditional or incumbent markets, substantially less than for the most poorly-performing utilities. Gearing levels amongst utilities do not explain why some utilities are more profitable. Endesa, for instance, has the highest level of debt-to-equity amongst the utilities examined, yet it was the seventh most profitable utility in 2006.

Reasons to Purchase

Examine the relationship between profitability and different utility characteristics. Understand who Europe's best performing utilities are, and what distinguishes them. Benchmark leading European utilities and a range of financial metrics.