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360T - Workshop in Praha

360T - Workshop in Praha. Alpiq Holding Ltd, 6th October 2009 André Boppart, Corporate Treasury + Insurance. André Boppart Treasury Manager of Alpiq Holding AG since February 1, 2007 Responsibilities :

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360T - Workshop in Praha

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  1. 360T - Workshop in Praha Alpiq Holding Ltd, 6th October 2009 André Boppart, Corporate Treasury + Insurance

  2. André Boppart • Treasury Manager of Alpiq Holding AG • since February 1, 2007 • Responsibilities: • act as in-house bank for intercompany transactions such as financing, hedging, cash-pooling usw. • optimize short-term liquidity • assure and maintain an efficient payment system • assure a sound liquidity forecast • work on project

  3. Alpiq Holding AGFacts and figuers • CHF 16‘032 Mio. annual turnover in 2007 • CHF 1‘800 Mio. EBITA in 2007 • Energy production of approx. 20 TWh in 2007 53% produced in Switzerland  Energy production by fossil (41.5%), hydraulic (28.5%), nuclear (29.0%) and renewable energy (1.0%) • More than 10‘000 employees

  4. Organization of corporate treasury Alpiq Holding AGCorp. Treasury TradingLocal Treasury Switzerland Local Treasury WestLocal Treasury EastLocal Treasury Energy Services Local Treasury • Milano, Italy • Paris, France • Madrid, Spain • Oslo, Norway for: S, N, DK and FIN • Prague, Czech Rep. for:GR, A, PL, CZ, SK, HU, RO, LV, BG, SCG, AL, usw. • GAH, Heidelberg • AIT Zürich • Total approx. 100 independent companies accross Alpiq World • 24 Swiss companies reporting to Olten, Lausanne or Zürich • 70 companies/legal entities located in Europe

  5. Corporate Treasury in facts and figures External transactions Internal transactions • Maintaining ca. 40 bank relations • Bonds ca. 2’150 Mio. • Private placements ca. 550 Mio. • Committed credit lines ca. 400 Mio. • Uncommitted credit lines ca. 350 Mio. • FX transactions and Swaps ca. 2’500 Mio. p.a. • Parent company guarantees ca. 1’500 Mio. • Bank guarantees ca. 300 Mio. • Insurance premiums ca. 20 Mio. • Equity • Intercompany loans • Subordinated ic-loans • Various cash-pooling facilities • Committed ic-credit lines • Letter of credit transaction • FX hedging • Project financing • Damage processing • Insurance coverage Corporate Treasury & Insurance all amounts in CHF

  6. Treasury CEE Center Main tasks • Guarantees • Cash and liquidity management • FX Hedging • Relations with banks • Reporting • More than 25 bank accounts managed • Petty Cash • Planned agenda: • Bank Guarantees • Parent Company Guarantees, LoC • Payments (domestic, foreign) • Cashpooling, IC Loans, Money Market • Foreign exchange transactions (SPOT and FORWARD) • Deutsche Bank, Unicredit Group, ING and other local banks • Maintenance of contracts • Monthly reporting (cashflow forecast, guarantees overview, cashpooling position, IC Loans...) • In different currencies (EUR, CZK, RON, RSD, HRK, BGN, PLN, HUF, MKD...) • Atel Energy AG,org.sl, Atel Česká republika s.r.o. • Insurance and Investments

  7. Treasury policy – hedging strategies • The policy says: • „whenever local treasury is aware of a funds flow, different from local reporting currency, local treasury has to hedge this foreign currency flow with corporate treasury“ • It is up to the discretion of corporate treasury to transfer the currency risk to the market. Actual most hedging activities of our subsidiaries are hedged against the market except of EUR/CHF exposure.

  8. FX hedging CEE – 1 FX position • = difference between assets and liabilities values in each currency => FX revaluation • Position can be created by: • Natural position = services costs in different currency • Conversion = asset and liability from trade have • different currencies • Hedging of: • CBTC (daily, monthly or yearly auction) • End consumer offers • Office expenses

  9. FX hedging CEE – 3 • FX forward rates – updated daily • Larger energy deals (above EUR 500 000 equiv.) – prompt information from sales department after deal commit – FX hedge done immediately • Small energy deals - daily monitoring of Energy position vs FX position, if amount exceeds certain limit – FX hedge done

  10. 360T Trading activities Saving or the difference between the BEST and the second best quote 2008 total difference equals to approx. CHF 320‘000 2009 total difference equals to approx. CHF 70‘000

  11. 360T – The next stepsinter-company dealing • Phase 1: Set up of a pilot subsidiary – Atel Ceska •  getting more experience and confidence in 360T • Phase 2: Set up of HU-Atel and PL-Atel (ic-dealing by Prague) • Phase 3: Planned to set up other major sub-treasuries such as: • Energie Ouest Suisse, Lausanne  FX dealing with banks • Alpiq Norway AS, Oslo  FX dealing with banks • Alpiq Energia Italia (ic-dealing) • Phase 4: In case of enough trading volume tend to go for STP

  12. 360T – Inter-Company dealingGoal • Major goals: • Larger volumes lead to more competitive FX pricing for Alpiq • Improve transparency • Having a contol tool as well as a risk measurement tool vs. those dealing now with banks instead ic • Having a group wide standard process in place that all FX activities are centralized in Coporate Treasury Olten • Basis for group wide FX reporting

  13. 360TAdvantages and disadvantages • Advantages: • good/competitive FX pricing • good comparison tool of our banks • getting very accurate indications  market rates • IC-dealing  good transparency for transfer pricing problematic (tax issue) • Disadvantages: • not yet all our favorite banks participate/quote on 360T • small/local banks shy away from 360T • in the middle of the financing turmoil  less competive forward pricing in „exotic“-cee currencies due to large safety spreads

  14. Corporate treasury – Administration • FX-Settlement • Maintaining good bank relations  sound understanding of business model • Exchange of standard settlement instruction for FX/MM • Chinese Wall • At execution of FX/MM deals  capture deal in accounting system (SAP) and deal gets signed by group treasurer  4 eyes control • Banks are instructed to send MM/FX confirmation to our B/O • B/O checks external confirmation with our system  mismatch call to F/O • 2 days before maturity F/O effects payment  4 eyes control

  15. ContactAlpiq Holding AG André Boppartphone + 41 62 286 71 11 phone + 41 62 286 70 35info@alpiq.comandre.boppart@alpiq.com

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