ZSE Group

ZSE Group is a leading energy company in Slovakia. In 2002 it became a part of the German energy group E.ON. On 1st July 2007 Západoslovenská energetika, a.s. (ZSE) established subsidiaries – for the operation of distribution system and for energy trading and sales. This split was based on the European Union Directive on common rules for the internal market in electricity that has been implemented into Slovak legislation by Act No. 656/2004 Coll. on energy.

ZSE Group’s non-current assets are mainly represented by distribution network valued at historical costs (while in individual financial statements of Západoslovenská distribučná, a.s. they were revalued at fair value at unbundling in 2007). Current assets comprise mainly trade receivables related to supply and distribution of electricity.

As a result of dividend pay-out in 2013 from individual ZSE’s retained earnings the equity of the consolidated group has a negative balance at the end of financial year 2013. Increase in non-current liabilities in 2013 is related to the Euro Bond emission in 2013 in nominal value of EUR 630 million. Majority of current liabilities are trade payables related to distribution and sales of electricity.

Key Figures of ZSE Group as of December 31

Key figures of ZSE Group (Západoslovenská energetika, a.s., Západoslovenská distribučná, a.s., ZSE Energia, a.s.,ZSE Development, s.r.o., ZSE Energy Solutions, s.r.o., ZSE Business Services, s.r.o., ZSE MVE, s.r.o.):

EUR Thousand 2016 2015
Non-current assets 771 167 735 785
Current assets 192 827 138 851
Total assets 963 994 874 636

Own equity 3 122 -39 035
Non-current liabilities 752 919 745 638
Current liabilities 207 953 168 033
Total equity and liabilities 963 994 874 636

Revenues 1 001 286 1 009 024
EBIT (Operating income) 145 707 139 355
EBITDA 194 497 186 386

Income 1 027 386 1 035 373
Costs 905 385 918 044
Profit before tax 122 001 117 329
Net profit 98 622 88 071
Total comprehensive income 99 726 88 477

Investments 68 843 81 227
Average number of employees 1 793 1 767

Financing strategy

Financing strategy of ZSE Group reflects to meet criteria set by S&P rating agency in order to preserve the BBB+ rating asigned, i.e. adjusted funds from operations (FFO) to debt.

Financial Leverage Policy

  • The Company’s management and shareholders are committed to maintaining a strong investment grade credit rating and will manage the leverage in a manner consistent with this objective
  • ZSE envisages that aside from the current bond financing no incremental debt will be required
  • In future ZSE intends to remain free cash flow positive

Dividend Policy

  • ZSE's shareholders will target a conservative dividend policy that supports the incremental growth for the Company while also retaining the target credit profile for a strong investment grade rating
  • ZSE has a dividend policy which allows the company to remain free cash flow positive
  • ZSE will keep the flexibility in its dividend policy to offset any negative situations that might affect the cash flow generation capability or its credit profile

Investment Policy

  • The level of maintenance and expansionary investments required are expected to be funded from operating cash flows
  • No transformational M&A anticipated

Liquidity Policies

  • ZSE's management will ensure sufficient access to liquidity in the form of cash and revolving credit facility to maintain a liquidity buffer for operational purposes including debt service requirements
  • ZSE maintains a long-term committed credit facilities of €75.0 m to cover any working capital requirements and other operating requirements
  • Central cash management at the Group level