Annual report 2015

Powel develops and delivers business critical IT solutions and services to the energy sector, local government and contractors. The energy sector includes power producers, power traders, grid companies and system operators. The group’s head office is in Trondheim, Norway, with several more offices and subsidiary companies at several locations in Norway, Sweden and Denmark. Additionally, there are subsidiary companies in Switzerland, Turkey, Poland and Chile. As per 31.12.2015, Powel is 95,8% owned by Arendals Fossekompani ASA. 

 

Continued growth through 2015

Powel’s turnover for the year was NOK 512 million, a 13% increase on the previous year. The result before tax was NOK 53.7 million, of which reversed provisions for future pensions amounted to NOK 46.7 million. Powel strengthened its position in Norway and internationally through sales to new customers, strategic partnerships, acquisitions and increased sales to existing customers. The company is continually looking for possibilities to integrate our solutions and services with others to better cover our customer’s needs.

The European power market has been constantly evolving over the last few years and we are seeing substantial disruptions in the market, affecting both power producers and end customers. A commitment to using renewable energy sources has, together with slow economic growth caused a power surplus and low energy prices. The share of renewable power production in the energy mix is increasing rapidly and larger power plants that do not produce renewable energy are producing below cost.

Smart meters are being introduced continuously and a distribution system with self-production and local storage of energy is increasingly becoming more common. The need to renew infrastructure connected to water supply and flood protection has become a focus area both in Norway and internationally.   

We are steadily moving towards a society where “everything” is digitalised and mobile, leading to an increased demand for good quality, stabile fibre infrastructure. Rapid technological developments and disruptive shifts are changing work processes and business models, which in turn places new demands on IT solutions. In 2015, mobile internet, increased access to real-time information and the internet of things were important keywords for new solutions launched by Powel.

Cloud operations was a large and important area of focus in 2015 and we are experiencing customers becoming ever more comfortable with solutions that are hosted in the cloud. In May, Powel became a Microsoft Global Managed ISV Partner. This is the closest form of strategic cooperation Microsoft has with software providers. By using the cloud platform Microsoft Azure, we can offer our customers new solutions that are both relevant and flexible, to an even greater extent than previously.

Additionally, Powel is a Platinum partner with Oracle.

Our cooperation with Esri was strengthened through the acquisition of the utility part of InformiGIS in Denmark in March 2015. Through this acquisition, we strengthened our Esri competency substantially and gained a stronger position in Denmark.

Powel continued its focus on research and development in several areas. Powel iAM DMS was chosen by Vattenfall as the test solution in the research and innovation program UPGRID, part of the EU’s Horizon 2020 project. The project has received more than EUR 12 million from the EU and will cover smart grids in its entirety, with emphasis on implementation of cost effective solutions for monitoring and managing the low- and medium voltage networks.

Additionally, Powel received NOK 15 million from Innovation Norway for our Powel Water project. The project focuses on the IT solutions of the future that will ensure efficient running, maintenance and renewal of water infrastructure. The project is set to last three years.

The organisation outside Norway is increasingly becoming a larger and more important part of Powel. The management team has been reorganised to reflect this. Our offices in Poland, Turkey and Chile all grew during the last year.

Q4 saw Powel land a large contract with E.ON Energy Economics and Uniper in Germany. According to the deal, Powel will deliver cloud solutions from much of the Smart Energy portfolio, including trade, optimisation, spot- and reserve markets, to E.ON in several countries. This contract demonstrates Powel’s well-established and solid position outside the Nordics, and forms a good foundation for further development of this position.   

Outside Europe, Powel achieved important contracts in Chile and Turkey during 2015. Trade- and logistics solution DeltaXE has become a more evident and integrated part of the Smart Energy portfolio and it has been sold to several international companies.

Accurate and up-to-date information, for example about weather conditions and consumption, becomes crucial when it comes to acting efficiently. Customers will gain competitive advantages by acting quickly on new information. This causes a substantial increase in data. Powel Mesh was launched to take advantage of these possibilities, and to ensure that power producers can spend their time and knowledge on analyses and other value-creating work. The solution handles time series with top class performance benchmarking.

Within Smart Infrastructure, in 2015 we made further developments building on the internet of things and cloud services by challenging our customers’ traditional processes and business models. Powel will keep working with improvement of customers’ existing work processes through adjustments and better utilisation of existing solution portfolio.

The business area delivering to municipalities also saw positive growth, particularly within water- and wastewater solutions. Our mobile solutions have been a success and we have seen a large increase in our customer base. More Norwegian municipalities than ever before have now chosen the Gemini VA solution for their water and wastewater networks. Additionally, through the acquisition of the utility part of InformiGIS, several Danish water supply companies have become Powel customers. Through the Powel Water project, this segment will be strengthened as we keep developing the water solutions for the future.

The upcoming AMS rollout keeps providing opportunities within Metering. In Norway, we continued our collaboration with Validér, where Powel delivers a system solution for AMS that will handle 30% of Norwegian AMS meters. In Sweden, we completed one of our largest Swedish Metering projects with Powel ELIN to E.ON, in cooperation with Cap Gemini.  

The Construction area in Powel had a positive growth in turnover. We now have 700 customers in Norway, including the largest developers, such as Statens vegvesen (the Norwegian Public Roads Administration) and Jernbaneverket (the Norwegian National Rail Administration). Furthermore, our customer base includes several large consultancy companies working with projecting and design, such as Norconsult and Rambøll, as well as all the largest contractors in Norway. In 2015, Powel also signed an agreement with an Italian/Spanish cooperative that will work on the new Follobanen, the largest public transport initiative in Norway. We see an increase in the interest and the use of the solutions as a collaboration platform, where developers, the designing consultancy house, and the contractor cooperate through Powel’s solutions.  

Future prospects

The board of Powel looks positively on future possibilities for growth and increased profitability. The company is better established within the energy sector in Europe than previously, thanks to the development of our strategic position throughout the year.

The main focus for the group will still be too improve and develop further Powel’s leading market position in Norway, ensure sustainable development in new focus areas, for instance fibre infrastructure, and to continue growth in chosen business areas within and outside the Nordics. Integration of acquired and proprietary solutions has given Powel a strategically important foundation for offering the solutions demanded by the European energy markets in the coming years.

We will continue to have a focus on mobile solutions, automation of knowledge, cloud, managing real-time information and integration between solutions.

The outlook for the business area Construction is thought to be particularly good as an 18% growth in construction investments is expected in Norway for 2016 and there is interests in Sweden for the solutions. The Powel Water project will also provide good opportunities for growth within the water sector.