The critical phase is behind us and Sorgenia is back in charge of the retail market. It is here that he plays his ambitious cards for a relaunch that aims to grow significantly in the generation of cash from operating activities in 2016 and an increase of 100.000 customers a year by 2020 but, this is the novelty, all exclusively via the Internet . “Our offer is more competitive than the others because it is full digital, entirely digital. That's how it is - explains themanaging director Gianfilippo Mancini in this interview with FIRSTonline – that we can offer more advantageous prices, reducing a series of costs: we don't have to pay sales agents or face bill shipping costs. We want to put the customer in a position to be able to choose, in a conscious and informed manner, in a market that is still too opaque and static".
Gianfilippo Mancini arrived at Sorgenia from Enel in March 2015, at the moment when Cir and Verbund went out six of the first Italian banks (below the graph of the new corporate structure) committed to recovery became shareholders of the group and of the group, after a long and arduous negotiation. The De Benedetti era is over which left 1,8 billion in debt, the new management (president is Chicco Testa) has implemented financial restructuring and reorganization actions that make the CEO say: "We are now a lean, flexible company, vertically integrated in all phases of the energy supply chain, we are able to seize market development opportunities and the set of actions undertaken gives us a positive prospect of profitability already in 2016”.
Sorgenia restarts from domestic customers, is this the sign of the turning point in the company's recovery?
“Sorgenia remains one of the top 5 electricity operators on the free market for business customers and among the top 10 in the gas sector. We produce 6 billion kilowatt-hours, or about 2% of national demand, and sell them to customers. Now we are going back to retail, starting from a base of 100.000 customers of the past management, but we are doing it in a significantly different way both compared to the past and compared to the methods of the current market. We are the first in Italy to launch a full digital offer for domestic customers. This is the result of a profound change in the company, completed in 2015 with all the difficulties that had to be faced. A year of fundamental transition which now allows us to present ourselves as a leaner and more flexible company in terms of costs, decision-making speed, a healthy and ambitious company”.
What numbers are you betting on?
“We plan to reach a 20% digital market share, equal to about 100.000 customers acquired every year between now and 2020. Today, the digital channel is worth less than 10% of the overall market but it is destined to grow and certainly not to shrink with numbers that the complete liberalization of energy, when it is implemented, can further increase considering that a market of about 35 million customers will open, 25 for electricity and 10 for gas, who today are still in the enhanced protection regime”.
Why the choice of an offer that can only be accessed via the Internet in a country that is still at the bottom of the European ranking for connection speed?
“In Italy there are already 20 million citizens who are active online. Some for many hours, others only for targeted purchases. However, the number is significant and destined to grow. Furthermore, it is precisely on the Internet that the difficulties and drawbacks that have hitherto penalized the market can be overcome: offers that are not very comparable, the onslaught of telemarketers who promise wonders and don't keep them. There is already a large variety of offers, some even advantageous, among which, however, it is difficult to orientate. We focus on an aware consumer and try to make the intrinsic complication of the sector simple".
How?
“On our site, the consumer will have a specific indication of how much he can save on the basis of his supply. The choice of sustainability is important: he will be able to choose a "zero kilometre" offer by selecting, if he wishes, the renewable plant from which to buy energy in his own area, with coverage in almost all Italian regions. We are the first to do so in Italy and perhaps even in the world, excluding Holland. A wide range of services that we have called Energy Lab also opens up: the possibility of having more information on one's own consumption to improve energy saving and to understand how lead TVs, refrigerators or other appliances impact on consumption”.
And who had doubts or difficulties? Is there any kind of help expected?
"Certainly. Always on the internet, in case of need, you can activate a chat or even a video chat, contact our call center. There is also an offer comparator and the optional possibility of having a dedicated operator, paying a small additional cost”.
Sorgenia has non-renewable thermoelectric plants. Is the "zero kilometer" the result of agreements with other producers?
“We have about 3.200 megawatts of gas-fired combined cycle plants. With the restructuring plan, we sold about 300 MW of wind power, while maintaining ownership in terms of certificates of origin. Furthermore, we can count on the hydroelectric power of the subsidiary Tirreno Power and on specific agreements with other producers”.
Tirreno Power is today controlled by Sorgenia and Engie at 50% each. Painful chapter, just last Wednesday a new strike by the workers. At what stage is the situation?
“A great job was done in 2015, we faced a dramatic situation. Tirreno Power paid for the drop in demand and the growth of renewables, the consequences of the seizure of the Vado Ligure plant which brought the company to its knees. A restructuring phase has begun with creditors during which we have subscribed to an expensive capital increase of 50 million. So did Engie. Instead, Iren and Hera went out. This made it possible to complete the financial restructuring and place the company in a performing position. The crucial issue of the people linked to the end of the period of solidarity remains. On August 3, Tirreno Power has a new meeting at the table opened by Mise with the Region and the unions to find a solution on a social and industrial level. The site has an interesting position and as a shareholder I have the utmost confidence that the company and the institutions are able to foster the development of new entrepreneurial activities for Vado, in the areas that Tirreno Power will make available for other industrial projects ; the premises for a successful outcome of this process are currently encouraging. It should not be forgotten that today Tirreno Power, thanks to the restructuring process that has just concluded, is once again able to ensure work for a large number of people, which was anything but obvious a year ago”.
Sorgenia is working on the new industrial plan which will be ready in October. How is 2016 going?
“Let's start from last year: it was a decisive year between the sale of non-core assets, the restructuring of the company both from an organizational point of view as well as cost containment and integrated plant management. This made it possible to reduce the debt and generate cash of almost 200 million: 70 went to repay the debt, 25 to pay interest, the rest is operating cash. The EBITDA was down but positive for 40 million. In 2016 we will continue to generate operating cash, we will complete the disposals. The goal is to see profitability grow and we are already verifying this with the EBITDA for the first four months rising to 23 million against 8 in the same period in 2015. The general situation of the energy production market remains difficult but Sorgenia's prospects they are positive”.
IFinally, liberalisation. The competition law which set the definitive opening of the market first on 1 January and then on 30 June 2018, is blocked in Parliament. It is a passage, we have seen, which is central to your programmes.
“We believed in liberalisation, our new digital offering goes in this direction and we will continue to invest in it. It is not on the energy chapter that there is no consensus in Parliament, I think it is the general political situation and the uncertainties of the constitutional referendum that are slowing down the process. However, we are confident that the competition law will be passed in September and that the implementing decrees will arrive quickly. Times are still possible but we must not forget that companies need a year to implement all the actions in view of the full opening of the market".
