“We are pleased with the growth in revenue and margin in the Services business”

BKW has increased revenue by 8 % in the first half of 2021 and with EBIT of CHF 225 million it has again exceeded the record results of the previous year. CFO Ronald Trächsel is particularly pleased with the positive developments in the Services business. “Operationally we are positioned considerably above the sector average,” explains the CFO in the interview.

Roland Trächsel, all three business areas have contributed to the revenue growth of 8 %. Our Services business continues to grow significantly more quickly than the market. Has this growth been generated organically – or is it primarily due to acquisitions?

Roland Trächsel: We generated around a third of the revenue growth of 9 % in the Services business organically. Two thirds can be attributed to acquisitions. In the first half of the year, the Services business in total generated revenue of CHF 737 million.

At the end of the day, how much of this revenue will remain as company profit?

We are very satisfied with the profit performance in the Services business. With a 59 % increase in EBIT over the previous year, we have greatly improved the margin in the Services business. We deploy our broad-based skills with focus in the Services business market and keep our costs under control.

And is this an indication of good margins?

I am pleased with the margins in the Services business, because despite the continued seasonal nature of the business, they have remained at 5 % for the first half – and therefore at the level prior to COVID-19. It should be noted that acquisition costs are included in this EBIT value. If these are neutralized the Services business margin ranges between 7 % and 8 % which is significantly above the sector average.

Electricity market prices have also experienced a sharp increase in 2021. What impact has this had on our income statement?

Thanks to BKW’s approach of reducing risk through hedging, the higher electricity prices do not have any direct impact on the results of the current financial year. We will only see the positive effects of the current increase in electricity prices with a time delay of one or two years. We are currently benefiting from the prices that we have well hedged in 2018. What is also a particularly pleasing development is that we were also able to increase our sales volume in the Energy business in the first half of 2021.

Nevertheless, operating profit in the Energy division decreased – why is that?

Trading delivered record results last year. This year the Trading result will be close to the average. Adjusted to the Trading results, EBIT in the Energy business area would have increased by more than 50 %. However, when viewed over the long term, Trading performance continues to be very attractive. We will benefit from this in the years ahead.

Grid has also improved its operating profit by 11 % to CHF 103 million. BKW’s robust and sustainable business model has proved its worth once again. Its three business areas complement each other well.

That’s correct – BKW is in a robust position. The two growth areas of Services and Energy are supported by the solid and reliable results of the Grid business. The half-year results reinforce the robust position of BKW Group...

... which is attracting more and more attention due to its innovative projects.

Technology and innovation are already important factors for BKW’s markets and products, and this trend will only continue. One example of this is the replacement of a railroad power line for Deutsche Bahn in the Greater Basel Area. The project involved replacing 25 pylons on this line in densely populated areas and in the midst of other infrastructure. The BIM method was used on such a project for the first time in the history of Deutsche Bahn. Three firms from the BKW network, LTB Leitungsbau GmbH, BKW Grid- & Hydro Engineering and the start-up Energy Solutions, are involved in the cross-border project. It is great that our international network is capable of winning such prestige projects.

BKW keeps Deutsche Bahn on track with the BIM method

BKW keeps Deutsche Bahn on track with the BIM method

For the first time, a transmission line in Germany is being planned using the digital Building Information Modelling (BIM) method. The prestige project for the renewal of the traction power line between Muttenz and Haltingen (DE) will be carried out by the BKW Group – thanks to its experience with BIM and its cross-border network.

Outstanding half-year result

Outstanding half-year result

BKW continued its successful growth trajectory in the first half of 2021. It increased both revenue and operating profit (EBIT), this compared to a very strong previous year result. Increasing power prices as well as strong topline performance and margin improvements in the service business were the main drivers.



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