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Corporate Governance: Is it important?
23 April 2019Guntars Baļčūns, CFO
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Latvenergo Group Profile
2
Governance structure Diversified sources of financing
• Vertically integrated utility• Wholly-owned by the Republic of Latvia• Credit rating: Moody`s – Baa2/stable• Total assets – 3.8 billion EUR• Investments – 200 million EUR/year on AVG• Retail customers – 800 thsd.• 3,508 employees
46%37%
17% International investmentbanks
Commercial banks
Bonds
814.3 MEUR
Electricity distribution
55%Generation and trade
Lease of transmission system assets
46%
Segment Revenues EBITDA
35%
5%
37%
13%
MEUR 878 322
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3
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Elements of Corporate Governance
4
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Elements of Corporate Governance
5
clear vision of the company's development and priorities
timely indentification and mitigation of risks
independent members
transparency and trust professional assurance on the reliability of financial statements
professional decision making
Strategy
SustainabilityReport
Risk Management
Supervisory Board
Audit Commitee
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40
86 90 90 91 94 94
1.25
1.13
1.3
1.07
1.31
1.75 1.7
0
0.4
0.8
1.2
1.6
2
0
20
40
60
80
100
2012 2014 2016 2018
% billion EUR
CG coeficcient company value
What affects company value?TOP101: methodology TOP101: Latvenergo
6
Company Value
CorporateGovernance
Practices
Economic Value(financial results)
20%
80%
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Why is it important?TOP101: methodology
Improvedfinancials
clearstrategic
vision
motivatedemployees
loyalcustomers
morecooperation
offers
less risk exposure
lowerborrowing
costs
7
Company Value
CorporateGovernance
Practices
Economic Value(financial results)
20%
80%
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Contact information
AS “Latvenergo”Pulkveža Brieža 12, Riga, LV-1230
www.latvenergo.lv
Latvenergo Latvenergo Latvenergo videokanāls