Vattenfall faces a challenging market outlook. The company has established a strong position, but has to improve operational efficiency and availability, decrease debt levels and reduce its CO2-exposure which today is above the industry average.
After an intensive period of acquisitions to successfully establish Vattenfall as a major European energy company, Vattenfall now enters a phase of consolidation. A cost reduction program will be initiated, aiming at reducing the operational costs by 6 billion SEK (appr. 648 Mio Euro). This will be achieved by cost reductions in purchasing and process improvements in operations and maintenance. A part of this will lead to a reduction of headcount. Vattenfall aims to achieve this through natural attrition. Discussions with the employee organisations have started.
The overall investment program in the next five years (2011-2015) is intended to be limited to 165 billion SEK (appr. 17,8 Mrd. Euro) compared to 201 billion SEK (appr. 21,7 Mrd. Euro) in the current investment program period (2010-2014).
Vattenfall discloses the information provided herein pursuant to the Swedish Securities Market Act.
Potential divestments of geographic positions and assets that do not support the new strategic direction will be investigated. By this, Vattenfall aims to reduce its CO2-exposure and strengthen the company’s balance sheet, enabling Vattenfall to realize further growth in the future. Expansion and growth is foreseen in low C02-emitting power production, such as wind, nuclear, biomass, hydro and in gas power. Vattenfall will continue to be an integrated energy company, focusing on generation while also including distribution, trading and sales and keeping all three products: electricity, heat and gas.
“With the new strategic direction, Vattenfall is taking the next step in the company’s development, says CEO Øystein Løseth. This aims to strengthen Vattenfall’s balance sheet, to increase profit and value creation and to make the company ready for further growth in the future.”
“After a phase of intensive growth, it is now time for consolidation”, says Lars Westerberg, Chairman of the Board of Directors. Vattenfall will reduce its CO2-exposure and be among the leaders in developing environmentally sustainable energy production.”
A business-led organisational structure will be introduced as of January 1, 2011 and is currently discussed with employee representatives. The new organization will result in higher accountability, stronger performance, lower overhead and administrative costs and increased customer focus throughout Vattenfall.
The new Executive Management Group will consist of Øystein Løseth – CEO, Tuomo Hatakka – Production, Huib Morelisse – Asset Development, Harald von Heyden – Asset Optimisation and Trading, Anders Dahl – Renewables, Torbjörn Wahlborg – Distribution and Sales, Jonas Florinus – acting CFO, Lars Gejrot – HR, Elisabeth Ström – External Relations and Communications, and Andreas Regnell – Strategy.
For further information, please contact:
Ivo Banek, Head of Media Relations, telephone: +46 722 098 754
From Vattenfall’s Press Office, telephone: +46 8 739 50 10, [email protected]