Repower : 12-18-15 - Repower positions itself for the future

Repower is planning a systematic realignment of its business model to gear up for profound, sustained changes in the energy industry. To this end, Repower's Board of Directors has resolved a strategic repositioning on the following basis:

• Repositioning as an energy services provider, restructuring to become a sales and service organisation on the basis of its core competencies in generation, grid, trading and sales
• Moving the business model forward within the framework of strategic partnerships
• Systematically implementing a national reseller strategy in the Swiss marketplace
• Concentrating on the Swiss and Italian markets, continuing the growth strategy in both countries
• Generating 100% renewable energy
• Looking into various divestments (business in Romania, nuclear interests, Teverola power plant)
• Streamlining the capital structure (delisting and introducing a standard registered share)

The electricity industry has seen a paradigm shift in the wake of new customer needs, a switch to renewables forced by subsidies, and the digitisation of the industry with the advent of smart networks. The energy industry is evolving to become a provider of integrated system services.

Customers are an increasingly active component of the system. The focus is on efficient, environmentally friendly applications and smart connections between electricity usage on the one hand and grids and increasingly decentralised generation systems on the other.

This new market environment is creating opportunities for innovative companies able to reduce their dependency on the absolute price of electricity and successfully adopt new business models and provide new sales, trading, generation and grid solutions. Repower intends to systematically build on its strengths and seize these opportunities. In its 2025 strategy, the company is gearing its efforts even more closely to the market, concentrating its energies and restructuring its organisation. Its traditional fields of business - generation, grid, trading and sales - will serve as the basis for a strategic realignment and a drive to expand the service components. In addition, Repower will continue to generate stable contributions to income from the grid unit.
Evolving into a provider of smart system and grid solutions
Repower intends to push the pace of its endeavours to develop innovative, needs-focused products and services through its own efforts, within the framework of partnerships, and if appropriate by means of targeted acquisitions. The focus will be on products and services adding value for customers delivered in the context of market and technological trends around decentralised generation and storage, control, electric transportation and data management. This way Repower will be able to augment its portfolio of classic energy services and progressively reduce its dependence on the absolute price of electricity. The New Tech unit, set up for this specific purpose, has already successfully brought new products, services and applications to market maturity in Switzerland and Italy.

Focus on Switzerland and Italy, and restructuring to become a service organisation
Repower will focus its activities on its core markets Switzerland and Italy. In line with this, the company is looking into selling its business in Romania.

Repower will position itself as an organisation geared to services and sales. Under this model the generation, trading and grid units will increasingly assume the role of delivering services for defined customer segments in the context of the new sales and distribution organisation focused systematically on its sales markets. Accordingly the organisation will be set up along the lines of a sales organisation value chain.

In Switzerland Repower will systematically move forward with its sales strategy with the aim of positioning itself as a nationwide service provider and harnessing new sales opportunities outside its supply area. To implement this strategy, Repower is looking into in-depth collaboration with Swisspower Energy AG. The two partners are in discussion with the intention of combining their strengths in market development, new product development and innovation, and generating cost synergies.

In Italy Repower will move forward with its growth strategy by reinforcing its sales organisation and expanding its network of agents. The service offering will be further augmented, and will increasingly cover customer needs in energy management, safety, efficiency and mobility.
Activities in Switzerland and Italy will complement each other, and Repower will harness synergies between the two markets.

100% renewable: generation as the basis of the sales business
In the future the generation portfolio will be geared to the needs of the sales business and be based on 100% renewable resources. To this end Repower is looking into selling its interests in nuclear power and its majority interest in the Teverola combined-cycle gas turbine plant in Italy. Great weight will be given to developing the hydropower portfolio, adapting it to profit as much as possible from subsidies under the feed-in remuneration at cost (KEV) scheme.
Repower is also looking into new models for financing hydropower plants enabling investors from outside the industry to be brought in and allowing Repower to increasingly focus on service functions such as construction, operation, maintenance, generation dispatch and energy marketing.

Delisting and simplifying capital structure
For some time now, especially in the wake of growing regulation, it has been apparent that the current listing of two different securities (bearer shares and participation certificates) no longer meets Repower's needs and creates disproportionately high costs. For this reason the Board of Directors has resolved to delist Repower's securities. An application for delisting has been submitted to SIX Swiss Exchange, which has approved the delisting of Repower securities as of the end of April 2016. Following delisting the company will organise off-exchange trading in Repower securities.

The Board of Directors has also resolved to put a motion to Repower's annual general meeting to convert the current bearer shares and participation certificates into standard registered shares on a one-for-one basis. This will harmonise and simplify the company's capital structure. This motion will be voted on at the annual general meeting held in Landquart on 12 May 2016.

Creating the basis for shaping the future in a new environment
With the absolute price of electricity set to remain low, given Repower's long-term agreements the company expects operating income to remain low in the coming years until the step-by-step streamlining of its portfolio has taken place. However, the Board of Directors and Executive Board are convinced that the strategic realignment and the new business model that goes with it will create the basis for the successful positioning of the company in the future.

Contact:
Kurt Bobst
CEO
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Werner Steinmann
Head of Media Relations
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www.repower.com