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Italy's Enel tops list of 20 largest European utilities by market cap

The total market capitalization of the 20 largest European electric and multi-utilities companies totaled €439.57 billion at the end of the first quarter of 2019, according to data compiled by S&P Global Market Intelligence.

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Half of the 20 largest companies recorded double-digit year-over-year percentage gains, while three companies tallied year-over-year losses, according to the S&P Global Market Intelligence data.

Italy's Enel SpA and Spain-headquartered Iberdrola SA secured first- and second-place spots on the 20 largest European utilities list, respectively.

Enel saw a 14.8% year-over-year increase in market value, to €57.99 billion. During the first quarter of 2019, the company received upgrades from Moody's for a planned capital boost of $3.5 billion at its Chilean subsidiary Enel Américas SA and from Fitch Ratings for strong operational and financial results from 2015 to 2018.

In the company's first-quarter 2019 earnings presentation, Enel CEO Francesco Starace outlined a renewables evolution over the next 10 years. Enel finished 2018 with 43,400 MW of renewables out of a total power portfolio of 89,800 MW, and expects to retire and replace thermal generating resources with renewables in various markets. It aims to fully decarbonize by 2050.

Iberdrola's market cap grew 33.8% year-over-year to €49.89 billion. Iberdrola Chairman and CEO Ignacio Galán told analysts on a first-quarter 2019 earnings call that his company was "in the process of analyzing" the U.K. distribution network operator Electricity North West Ltd., for which it has been reported to be among finalists in a bidding process. Among longer-term investments, the company announced plans to put €4.8 billion in digitization over a four-year period through 2022, and raised its capital spending forecast by €2 billion to €34 billion through 2022.

Additionally, Iberdrola said it intends to boost its renewable generation in Spain by about 2,000 MW by 2022 and in the U.S. by about 3,500 MW, to approximately 10,000 MW.

Despite an 11.7% decline in market cap over the fourth quarter of 2018, Electricité de France SA ranked third, with an overall market cap of €36.65 billion, up year-over-year by 6.6%. The company in February warned that it was expecting a challenging year ahead for earnings, in part because of a potential drop in hydroelectric power production and a loss of customers in the U.K. The company also announced that it was preparing to propose a restructuring as requested by the French government, its majority owner.

The largest year-over-year increase was recorded by Austrian utility VERBUND AG, which was up 81.3% to end first-quarter 2019 at €14.86 billion. Most of the company's power generation capacity is hydroelectric and in its first-quarter 2019 results it reported plentiful water supplies and higher prices in both the spot and futures wholesale power markets. At the end of the first quarter of this year, Verbund ranked 11th in market cap, up from 19th the year prior.

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4 German utilities make the list

Four Germany-headquartered companies ranked among the 20 largest, the most from any one country. Three of the four are also involved in a complex asset swap that recently cleared a string of key regulatory approvals. When complete, the deal will reshuffle the list of Europe's largest utilities.

RWE AG, which is acquiring renewable energy assets from rival E.ON SE and subsidiary innogy SE, recorded year-over-year gains of 19.4% to end the quarter at $14.63 billion, placing it 12th on the list by overall market cap. Innogy sat at 8th and E.ON at 9th as of the end of the first quarter.

Owners of coal-fired power plants in Germany were boosted by preliminary plans for a mandated coal phaseout in the country that will likely include payments to power plant owners. That news particularly buoyed RWE, which has been calling for hefty compensation to close its plants and mines, and saw its market cap increase by 26.8% in the first quarter of 2019 alone.

The fourth German company on the list, EnBW Energie Baden-Württemberg AG, ranked 19th overall, and saw its year-over-year market cap increase 20.6% to €8.56 billion. In line with Germany's plans to quit coal and transition to renewable power by 2038, EnBW moved into the French market with the acquisition of solar and wind developer Groupe VALECO and revealed a €12 billion investment plan between 2021 and 2025 to strengthen its renewables and grid businesses. Of the total, 80% will be invested in growth areas.

The number 20 company on the list, U.K. networks utility Centrica PLC, recorded a year-over-year drop of 18.3% to €7.54 billion. It was one of only three companies to record year-over-year losses, and one of four to record a quarterly decline. It has been battered by headwinds including missing revenues from the suspended U.K. capacity market and the introduction of a price cap by the British regulator, which has cut into earnings at subsidiary British Gas. Centrica warned in February that its cash flow target for the current year was "under pressure." In April, S&P Global Ratings downgraded the company on a downbeat market outlook.