Financial capital is extremely important, both for the current operations of the TAURON Group, as well as its expansion in the future. The sources of financing are: the company's equity, funds generated from business operations and liabilities. Currently, the Group is implementing a number of capital-intensive investment projects, mainly in the electricity distribution and generation lines of business, investing more than PLN 4.7 billion per annum.

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The TAURON Group is financing its operations by generating approximately PLN 3.5 billion in EBITDA per annum. The Group’s subsidiaries use external financing in the form of loans and bond issues, as well as special-purpose funds, research programs and other instruments supporting modern, environmentally friendly investment projects. Due to the tightening of the policy with respect to the financing of investments in the conventional energy, the banks’ unwillingness to finance the entities from the coal industry and entities with companies using coal within their structures, is visible. Also due to the above, the Group is implementing a responsible environmental policy under the ESG formula, which will affect the ability to obtain external financing.

TAURON has been active on the financial markets for a long time, acquiring financing from available instruments, including loans, bond issues on the domestic and the European markets. In accordance with the Strategy in force and the Strategic Directions Update adopted, the Group takes into account changes in the market and regulatory environment. The introduction of new options to the Strategy is the basis for the safe and sustainable transition of the Group, and it also increases the investment potential for the development of renewable energy sources. The experience gained and the active acquisition of financing by TAURON on the financial market, i.e. hybrid bonds or Eurobonds. as well as financing taking into account the sustainability indicators, will be of significant importance in the Group’s transition.

TAURON is generating financial results that enable its further expansion and implementation of strategic projects. In spite of changes in the business environment, growing revenues and cost optimization allow the Company to continue to maintain a stable result and the net debt to EBITDA ratio at a safe level.

Key data on the capital

Table Key data on the TAURON Group’s financial capital in 2018 and 2019
Key data on the capital 2019 2018
Equity [PLN million] 19,093 18,428
Fixed assets [PLN million] 35,052 32,596
Distribution Segment’s RAB [PLN million] 17,470 16,940
Generations assets value [PLN million] 15,212 12,713
Net debt [multiple] 2,8x 2,5x
Capital expenditures [PLN million] 4,128 3,838

Management of the return on capital

  • maintaining financial stability thanks to activities aimed at optimizing expenses and the structure of assets,
  • implementation of the investment program and rationalizing the capital expenditures incurred,
  • steadfast implementation of the financing optimization plan,
  • developed capital partnership as part of the Corporate Venture Capital initiatives,
  • new products and services as well as business models being implemented,
  • increasing the share of revenue from the regulated market (capacity market),
  • cooperation with banks and financial institutions,
  • searching for optimal sources of financing,
  • preferential loans to finance environmental investment projects,
  • financial risk hedging,
  • efficient liquidity management through the cash pooling service.

Results achieved

Results achieved by the TAURON Group in 2018 and 2019 as part of the management of the return on financial capital
Results achieved: 2019 2018
Sales revenue [PLN million] 19,558 18,122
EBITDA [PLN million] 3,599 3,492
EBITDA margin [%] 18.4% 19.3%
Cash flow from operating activities [PLN million] 2,036 2,223
Net debt/EBITDA ratio [multiple] 2.8x 2.5x
Net profit [PLN million] (12) 207
Long term rating* BBB BBB
* On 17 April 2019, Fitch ratings agency affirmed TAURON Polska Energia’s long term foreign and local currency ratings of “BBB” with a stable outlook

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