08.02.2018 | Group management focusing on the international customer business

The CEO visits Axpo U.S. and E-world

Axpo's international business generates a substantial contribution to company profits and is growing in importance: The area of international energy marketing and procurement for customers in various segments has developed very positively. Axpo U.S., which was founded in 2016, is progressing as planned, as Axpo CEO Andrew Walo recently determined at the business review meeting in New York. At E-world in Essen he met customers from all over Europe.

The previous financial year 2016/17 confirmed that Axpo's strategy is a success. Thanks to diversification, the expansion of renewable energies, and the focus on the international customer business, Axpo was able to reduce its dependency on the power price. In the future, additional power-price independent business fields will be developed.

Local presence is the “non plus ultra”

Trading & Sales, an area which has continuously generated positive earnings, plays an important role here. Gross profit rose from Euros 316 million in FY 2014/15, to Euros 336 million in 2015/16, to Euros 376 Million in 2016/17. These figures are the result of long-term strategic planning, reports Domenico De Luca, Head of Axpo Trading & Sales: "We have been consistently aligning our energy trading and customer business to growth and profits for many years. The continuous expansion of our presence in the markets has enhanced customer relationships, and in the long-term this is the foundation to grow and develop additional income sources."

A local presence is particularly advantageous in the origination business with tailored customer solutions. Specialists are at work at all Axpo's international locations and offer individual solutions for the marketing and procurement of power, natural gas and energy certificates. They are familiar with the local conditions and precisely understand what customers need.

Axpo U.S. reports its progress to the CEO

Taking local presence literally, CEO Andrew Walo met with the team responsible for the US business for the first time in the last week of January at the subsidiary in New York for a business review meeting. Together with Domenico De Luca and other members of management at Axpo Trading, the CEO flew across the pond for two days to get a first hand impression of Axpo U.S. business activities, which were launched two years ago, and to find out about the current business situation and plans for the next two years. Plans include the expansion of the product range with structured and tailored customers solutions - and the entry into other markets in the relatively scattered energy landscape in the USA.

The office of Axpo US is located at 270 Madison Avenue in New York City.

A local presence is particularly advantageous in the origination business with tailored customer solutions. Specialists are at work at all Axpo's international locations and offer individual solutions for the marketing and procurement of power, natural gas and energy certificates. They are familiar with the local conditions and precisely understand what customers need.

Axpo U.S. reports its progress to the CE

Taking local presence literally, CEO Andrew Walo met with the team responsible for the US business for the first time in the last week of January at the subsidiary in New York for a business review meeting. Together with Domenico De Luca and other members of management at Axpo Trading, the CEO flew across the pond for two days to get a first hand impression of Axpo U.S. business activities, which were launched two years ago, and to find out about the current business situation and plans for the next two years. Plans include the expansion of the product range with structured and tailored customers solutions - and the entry into other markets in the relatively scattered energy landscape in the USA.

Andrew Walo, Domenico De Luca, Lukas Gubler and Harald Gauck visit the US Team with Jeremy Wodakow.

At the division meeting with the CEO, Managing Director Jeremy Wodakow explained where the focus of the origination business lies: "We provide our customers with comprehensive energy solutions. The offering is particularly interesting for producers, consumers and other market players in the US energy markets. We also procure energy for customers and offer risk management solutions for the energy business."

With success: After Jeremy Wodakow's team initially concentrated on the PJM market on the East Coast, a few weeks ago the first deal was concluded in the Texan market (ERCOT). Andrew Walo is pleased: "The gradual geographic expansion of activities to other energy markets within the USA is the same approach that we have been applying in Europe. The current results as well as the high expertise and passion of our team in New York make me optimistic that we will be successful in our newest market.

What motivates customers?

Over the years, Axpo has developed to become a leading international player in energy trading and origination. This is also inherent to the fact that customers know exactly what they have with Axpo. The international customer base includes industrial companies, producers, energy supply companies, SME's, as well as market players from the area of renewable energies. Many of them traditionally meet at the beginning of February at E-world in Essen, Europe's leading energy trade fair.

Andrew Walo did not want to miss the opportunity to talk directly with customers from the different countries at the fair: "Axpo is now present locally in 27 countries and active in 39 markets. E-world is the ideal place for me to meet the different customers from all over Europe, identify their needs, talk about the current trends, and in the best case initiate new business activities."

Taking the opportunity: Andrew Walo in conversation with Kjetil Holm, Head Origination Nordic from Oslo.

Special attention is on renewable energies, particularly wind power: Axpo markets energy from customer plants with an installed capacity of some 14,000 MW. As a result the company is among the leading marketers of renewable energies in Europe - and intends to strengthen this position. So it was clear that meetings with existing and potential customers from the wind energy area were at the top of the agenda during the CEO's visit to Essen.

E-world generates sales

Among Axpo's industrial customers, "Rheinwerk" in Neuss, Germany's largest aluminium smelter, has been a constant for some years. Over the years, Axpo Germany concluded several longterm power supply agreements with the subsidiary of Norwegian Norsk Hydro ASA: Between 2021 and 2025, the aluminium smelter will procure 2.2 TWh (2,200,000 MWh) of electricity at a base load of 250 megawatts (MW), which corresponds to a total financial volume in the three-digit million range. Carsten Münch, Head of Axpo Germany, reports: "We initiated this deal years ago at E-world in a meeting with the customer’s management. Our meeting at the fair was a decisive factor that enabled us to conclude the agreement with Norsk Hydro shortly afterwards."

Whether the concentrated presence of Axpo management at E-world will lead to new contracts again this year will become apparent in the upcoming months.

In discussion with a representative of Argus Media (left to right): Christoph Sutter, Carsten Münch and Domenico De Luca.

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