A company in perfect financial health
Our strategy and a financially healthy company go hand in hand. This is necessary for the realisation of our ambitious plans for investment in sustainable energy and energy efficiency concepts. The reverse also applies: with our strategy, we aim to guarantee the long-term strong financial health of our company.
For Eneco, financially sound means having a credit rating of A- and achieving our target with respect to the return on average capital employed (ROACE). The first requirement has been met, because, just like in 2011, our creditworthiness was rated A- by external parties. In the past, we calculated RO(A)CE by dividing earnings before interest and tax (EBIT) by capital employed at 31 December. However, as of 2012, we calculate ROACE by deducting a 25% tax rate from EBIT and dividing the result by the average capital employed for the year. As a result, the comparative figure for 2011 dropped from 6.4 to 5.0%. This adjustment further improves the transparency and control of this KPI. In 2012, we realised a ROACE of 4.1% (excluding impairments on electricity-related fixed assets: 5.1%) while the target was 5.4%. The main reasons for not achieving our goal were the operating results of Eneco and Joulz, which were below expectation. Consequently, cost saving programmes have been initiated during the past year to bring ROACE back to the desired level. The main effects of these programmes are expected to be noticeable as of 2013.