Index of this chapter Notes to the consolidated income statement
All amounts in millions of euros unless stated otherwise.
Revenues from energy sales and energy-related activities
2017 | 2016 | |
|---|---|---|
Electricity | 1,776 | 1,198 |
Gas | 1,184 | 1,088 |
District heat | 270 | 252 |
Energy-related activities | 79 | 104 |
Total | 3,309 | 2,642 |
Total revenue for 2017 included transmission charges of some €200 million invoiced on behalf of grid operators and some €200 million of environmental and other levies and taxes from operations in Germany.
Other revenues
Other revenues are mainly proceeds from recharges of costs, sales of CO2 rights and income from the disposal of interests in subsidiaries and joint operations.
Employee benefits
2017 | 2016 | |
|---|---|---|
Wages and salaries | 170 | 153 |
Social security contributions | 24 | 17 |
Pension contributions | 18 | 17 |
Other employee benefits | 30 | 24 |
Total | 242 | 211 |
Total employee benefits were €258 million (2016: €236 million). €7 million (2016: €8 million) of employee benefits have been capitalised. As their nature is directly related to revenue, employee benefits of €9 million (2016: €17 million) have been recognised as part of the cost of energy sales and energy-related activities.
Headcount
The table below shows average headcount during the year of continued and discontinued operations expressed in full-time equivalents (FTE):
FTE | 2017 | 2016 |
|---|---|---|
Energy company Eneco (continued operations) | 3,049 | 2,882 |
Stedin (discontinued operations)1 | - | 1,455 |
Total | 3,049 | 4,337 |
of whom, working outside the Netherlands | 792 | 266 |
- 1 from 1 July 2016, Stedin is no longer part of the Group
Remuneration Board of Management and Supervisory Board
The remuneration policy for the Board of Management as proposed by the Supervisory Board was approved at the General Meeting of Shareholders of the then Eneco Holding N.V. on 20 May 2005 and applies unchanged to the Group.1 The remuneration of the Board of Management is set by the Supervisory Board on the recommendation of the Remuneration, Selection and Appointments Committee. The Remuneration Report for 2017 is published on the Eneco website.
The remuneration of the members of the Board of Management consists of a fixed salary and a variable salary. The variable salary amounts to 20% of the total salary. In 2017 the variable remuneration of the members of the Board of Management was again dependent on performance criteria. The four main criteria for the variable salary are largely in line with the strategic themes and are:
• Financial results (EBITDA);
• Revenue from new products and services (including Toon, HeatWinner, Jedlix, Luminext);
• New shareholders (performance criterion for the CEO and CFO), organic and acquisition-based growth (performance criterion for the CSGO) and Operational Excellence (performance criterion for the COO);
• Strengthening staff numbers, development and co-operation of Eneco Group’s senior management.
The pension entitlements of the members of the Board of Management come under Eneco’s standard pension plan. Since 1 January 2015, tax facilities for accrual of pension entitlements have been limited to an indexed maximum gross annual salary of €103,317. As a result, the short-term contribution to pensions for the part of the gross salary over €103,317 has taken a different form and is presented in the Other column.
The current employment contracts with the members of the Board of Management are for an unlimited time with a period of notice for the company (N.V. Eneco Beheer) of four months. Each member of the Board of Management has been appointed for a period of four years. Messrs Rameau, Dubbeld and Van de Noort are entitled to a payment of 12 months salary and Mr de Haas to a payment of 24 months salary if dismissed by the company.2 This arrangement was applied to Mr Van der Linden in 2016.
Total remuneration was as follows:
Remuneration of the Board of Management
x € 1.000 | Gross salary | Variable remuneration | Pension contributions | Other | Total 2017 |
|---|---|---|---|---|---|
J.F. de Haas | 530 | 99 | 30 | 59 | 718 |
C.J. Rameau | 394 | 74 | 26 | 40 | 534 |
G.A.J. Dubbeld | 394 | 74 | 26 | 40 | 534 |
F.C.W. van de Noort1 | 287 | 54 | 20 | 27 | 388 |
M.W.M. van der Linden2 | 33 | - | 2 | 3 | 38 |
Total | 1,638 | 301 | 104 | 169 | 2,212 |
- 1 Appointed at the time of unbundling and so only the costs from February to December 2017 are included.
- 2 Resigned at the time of unbundling and so only the costs for January 2017 are included.
x € 1.000 | Gross salary | Variable remuneration | Pension contributions | Other | Total 2016 |
|---|---|---|---|---|---|
J.F. de Haas | 520 | 82 | 24 | 53 | 679 |
C.J. Rameau | 388 | 64 | 21 | 36 | 509 |
G.A.J. Dubbeld | 388 | 53 | 21 | 36 | 498 |
M.W.M. van der Linden | 379 | 56 | 20 | 32 | 4871 |
Total | 1,675 | 255 | 86 | 157 | 2,173 |
- 1 Amounts are excluding arrangement (€423 thousand).
Remuneration of the Supervisory Board
The remuneration of the chairman of the Supervisory Board is €36,500 per year. The other members of the Supervisory Board each receive an annual fee of €28,700. Members of committees each receive an additional annual payment as follows:
x € 1 | 2017 |
|---|---|
Audit committee | 5,200 |
Remuneration/selection and appointments committee1 | 3,150 |
Future shareholdings supervisory committee (temporary) | 5,200 |
- 1 The Remuneration Committee and the Selection and appointments committee were merged with effect from 1 February 2017.
The fixed expense allowance is €1,150 per annum.
- 1 Members of the Board of Management and Supervisory Board are regarded as key management personnel pursuant to IAS 24 ‘Related Party Disclosures’.
- 2 Part of the original contract of employment.
Share of profit of associates and joint ventures
The associates and joint ventures are included in the 'List of principal subsidiaries, joint operations, joint ventures and associates' in these financial statements.
2017 | 2016 | |
|---|---|---|
Share in net profit | -1 | 7 |
Result on disposal | 1 | - |
Impairment | - | - |
Total | - | 7 |
Financial income
The financial income is mainly interest on a financing agreement formed on arm’s length terms on 27 January 2017 between N.V. Eneco Beheer and the then Eneco Holding N.V. (now Stedin Holding N.V.) and interest income on a loan relating to the financing of a joint venture.
Financial expenses
2017 | 2016 | |
|---|---|---|
Interest expenses | 23 | 7 |
Interest added to provisions | 2 | 2 |
Other | 4 | 1 |
Total | 29 | 10 |
See note 27 ‘Interest-bearing debt’ for the average interest rate on the debt.
Income tax on the result from continuing operations
Eneco Groep N.V. is an autonomous taxpayer for corporate income tax purposes. In addition, the sole subsidiary, N.V. Eneco Beheer heads a fiscal unity for corporate tax purposes which includes almost all of its Dutch subsidiaries. The table below shows the tax on the result from continuing operations:
2017 | 2016 | |
|---|---|---|
Current tax expense | 51 | 31 |
Movements in deferred taxes | -42 | -15 |
Adjustment for prior years movements deferred taxes | - | -2 |
Income tax | 9 | 14 |
In 2017, customer activities in Belgium, mainly supply of energy to retail and business customers, were restructured. The profit for tax purposes made on this was fully offset by losses still available for relief. These transactions led to assets depreciable for tax purposes which cannot be recognised in the Group’s consolidated balance sheet under IFRS rules. As a result, the consolidated 2017 figures include a deferred tax asset of €22 million which has been taken to the result in movements in deferred taxes.
The movements in deferred taxes in the above table include a release of €4 million from the Energy Investment Allowance to be amortised (2016: reduction of €4 million).
The table below shows the current tax on continuing operations:
2017 | 2016 | |
|---|---|---|
Profit before income tax | 136 | 117 |
Participation exemption | -6 | -39 |
Non tax-deductible expenses | 13 | 10 |
Depreciation at non-statutory rates | 55 | 48 |
Addition to provisions treated differently for tax purposes | -2 | -10 |
Adjustment prior years results | -6 | -2 |
Result on intra-group transaction | 86 | - |
Foreign loss claw-back | 39 | - |
Other | 1 | 1 |
Taxable profit | 316 | 125 |
Carry forward of losses | -114 | - |
Taxable amount | 202 | 125 |
Nominal tax rate | 25.0% | 25.0% |
Current tax expense | 51 | 31 |
The table below shows the effective tax burden expressed as a percentage of the profit before income tax for continuing operations:
2017 | 2016 | |
|---|---|---|
Nominal tax rate | 25.0% | 25.0% |
Effect of: |
|
|
- Participation exemption | -1.1% | -8.4% |
- Non tax-deductible expenses | 2.4% | 2.1% |
- Tax incentives (Energy Investment Allowance, EIA scheme) | -2.9% | -4.5% |
- Foreign loss claw-back | 7.1% |
|
- Movement on deferred tax assets | -17.1% |
|
- Adjustment of prior years results | -1.1% |
|
- Investment allowances and foreign loss relief | -5.1% |
|
- Other | -0.4% | -2.2% |
Effective tax rate | 6.8% | 12.0% |
Result after tax on discontinued operations
The network and engineering activities (comprising CityTec B.V., Joulz Energy Solutions B.V., Stedin Diensten B.V., Stedin Netbeheer B.V., Utility Connect B.V. and their subsidiaries, the ‘Network Group’), were classified in 2016 as a discontinued operation in view of the unbundling of the then Eneco Holding N.V. (now Stedin Holding N.V.) on 31 January 2017 into an energy company and a network company. These companies were transferred to the then Eneco Holding N.V. in January and July 2016. The consultancy activities (Ecofys) were sold in November 2016. Their net results to the date of disposal have been presented as ‘Result after income tax from discontinued operations’.
The income statement for discontinued operations is summarised below. For 2016, this comprised:
- six months for Stedin Diensten B.V. and Stedin Netbeheer B.V. and their subsidiaries;
- one month for CityTec B.V., Joulz Energy Solutions B.V. and Utility Connect B.V. and their subsidiaries; and
- over ten months for Ecofys Investments B.V.
2016 | |
|---|---|
Revenues from energy sales and energy related activities | 494 |
Purchases of energy and energy related activities | -69 |
Gross margin | 425 |
Other revenues | 48 |
Gross margin and other operating revenues | 473 |
Operating expenses | -356 |
Operating profit | 117 |
Financial income and expenses | -3 |
Profit before income tax | 114 |
Income tax | -25 |
Profit after income tax | 89 |
The disposal of the network and engineering activities in 2016 did not result in an impairment or profit. Ahead of classification as a discontinued operation, there was a test of whether the carrying amount of this asset group should be written down by an impairment. The fair value less the expected costs of transferring the asset group to be disposed of was not below the carrying amount.
The revaluation reserve for the regulated networks was recognised in unrealised gains and losses for the network and engineering activities. This revaluation reserve was released in 2016 to retained earnings. The network and engineering activities do not include unrealised gains and losses that have to be settled though the income statement.
Government grants
Government grants recognised in the result were as follows:
2017 | 2016 | |
|---|---|---|
Environmental Quality of Electricity Production (MEP scheme) | 40 | 81 |
Energy Investment Allowance (EIA scheme) | 4 | 5 |
Stimulation Sustainable Energy Production (SDE scheme) | 94 | 55 |
Other government grants | 1 | 2 |
Total | 139 | 143 |
Government grants relate to continuing operations.
sPrevious paragraph:Notes to the consolidated financial statementssNext paragraph:
Notes to the consolidated balance sheet
