2020 ANNUAL REPORT Romande Energie Group core energy Turnkey energy businesses services Generation (electricity and thermal energy) Distribution • 20 residential PV installations installed in 2020 Marketing • 35 heat pumps installed in 2020 4 Energy services • 700 local lighting projects materialising in 2020 Generation from 750 100% renewable sources km of fibre-optic • 580m kWh in 2020 3 cable production sites open to visitors Achievements in 2020 13 apprenticeship 1,022 • 3 district heating plants employees streams • 9 self-consumption solar farms • 5 solar farms with microgrid Close to transmission stations 300 more than 3,200 substations municipalities and 10,500 km of power lines, served 45 80% of which are underground UNITS ENERGY POWERING THE FUTURE CURRENCIES This English version is based on Energy-related issues lie at the forefront of the climate CHF Swiss francs the French original. In case of doubt emergency, the fast-track digitalisation of our society, and our EUR euros the original French shall prevail. m million changing lifestyles – how we work, live and move around. As bn billion an energy company, Romande Energie has a crucial part to POWER play in rising to the challenges for our economy, our kW kilowatt environment and our society. SHAREHOLDERS OUR TO MW megawatt 1,000 kW MWp megawatt-peak 1,000 kWp We are helping to lead the energy transition in Switzerland ENERGY and are constantly innovating and investing to produce kWh kilowatt hour and provide renewable energy solutions for our customers. MWh megawatt hour 1,000 kWh Our business model – with its three CSR (corporate social GWh gigawatt hour 1 million kWh TWh terawatt hour 1 billion kWh responsibility) pillars – proved to be highly resilient in 2020 VOLTAGE despite the pandemic and the challenging economic conditions, kV kilovolts 1,000 volts and our financial performance was extremely encouraging, CARBON FOOTPRINT built on employees’ perseverance and response to the tCO2eq tonnes of carbon-dioxide equivalents situation, and prudent management of our finances. This 2020 Annual Report represents a major milestone in the CSR strategy we introduced in 2019, as we have now devoted a whole chapter to it. We are infinitely grateful to our colleagues who have been involved in preparing this report. CONTENTS 1. TO OUR SHAREHOLDERS 6 Letter to shareholders from Guy Mustaki, Chairman of the Board of Directors, and Christian Petit, Chief Executive Officer Letter to shareholders from Nicolas Conne, Chief Financial Officer 2. CORPORATE SOCIAL RESPONSIBILITY (CSR) 13 Social pillar Environmental pillar Economic pillar Our digital responsibility in focus Our certifications 3. CORPORATE GOVERNANCE 35 4. REMUNERATION REPORT 61 5. FINANCIAL STATEMENTS 69 Financial overview 70 Consolidated financial statements 75 Romande Energie Holding SA financial statements 107 CALENDAR 117 CONTACTS 117 CREDITS 117 2 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 3 TO OUR SHAREHOLDERS 1 COMMITMENT AND STRONG PERFORMANCE FLOWING FROM OUR PERSEVERANCE Our priorities during 2020, a year shaped by the Covid-19 pandemic, were to maintain an uninterrupted energy supply TO OUR SHAREHOLDERS OUR TO and the integrity and development of our Group. Our overriding goal was of course to keep all Romande Energie’s employees safe and in good health. Although the pandemic left a clear imprint on our financial performance during the first half of 2020, our organisation’s resilience was plain for all to see. Compared with 2019, the Group achieved 9% growth in revenues to CHF 569 million and a 18% increase in EBIT to CHF 77 million. Amid a previously unimaginable crisis, we made sure our electricity supply and heating services remained onstream at all times for our 300,000 customers, we shielded our employees, and we took a lead in advancing the energy transition through innovation. The far-reaching reorganisation of our Group into several strategic business units focused on renewable energies, and the digitalisation policy introduced in 2019 gave our performance a real boost in 2020. We pressed ahead with our expansion, building up our geographical positions in both Switzerland and France. Tremendous response from all our teams The entire Romande Energie Group reacted swiftly as soon as the first wave of the pandemic struck. In February 2020, we deployed our crisis unit and activated our pandemic plan, setting three main priorities – keeping employees safe, generating energy and maintaining supplies to our customers. After a near-25% decline in the electricity we supplied during the first wave, we were subsequently able to avoid renewed working-time reductions for our staff thanks to the gradual pick-up in activity levels from the second quarter and then a rebound throughout the second half of the year. Guy Mustaki, Chairman of the Board of Directors, Christian Petit, Chief Executive Officer The work environment upgrade programme we had embarked on in 2019 and the renovation of the Morges and Préverenges offices had already accustomed our staff to the Valais region. We bolstered this position through the acquisition of Monthey-based Toutelec, concepts of hot-desking and remote working. During the March lockdown, practically all our a business solidly established in the region, whose addition has helped to raise awareness operations continued, as employees worked from home, including our customer call centre of the sheer breadth of our services. We also upped our presence in the canton of Vaud by agents. Various digital support tools helped our staff stay in direct contact with their teams buying the electricity grid serving the municipalities of Bussigny and Romanel-sur-Lausanne, and line managers throughout the crisis period. Lastly, we expanded our operations in France via our local subsidiary, finalising the complete The three pillars of CSR (social, environmental and economic) underpinning our development buyout of Icaunaise (six hydroelectric power plans supplying 4,800 homes), initiated in gained even more traction over the year and became a factor considered in all internal and 2016. The deal we announced in late 2020 with development company Calycé has firmly external activities, reflecting our desire to play a greater role in tackling climate challenges established us as a leading player at the forefront of the energy transition in France. All in all, and decarbonising Western Switzerland’s economy. This year, the Group published its second 16 wind farms with 646 MW in total capacity are covered by the deal, raising the prospect GGE (greenhouse gas emission) footprint, transparently disclosing the impact of its activities of attractive returns for our shareholders in the years ahead. on the environment. We have dedicated this Annual Report to these three CSR priority areas. Innovation, staying power and digitalisation Further acquisitions Under our strategic plan, we pushed ahead during 2020 with our reorganisation and the Despite the unparalleled circumstances, Romande Energie has continued to pursue a policy overhaul of our units to make renewable energies, innovation and digitalisation the central of expansion and geographical development in Switzerland and France. We established focus of our business. Romande Energie Services SA underwent a radical shake-up. a new office in Martigny covering the network and energy service activities in the Lower 6 Romande Energie Group 2020 Annual Report Romande Energie Group 2020 Annual Report 7 TO OUR SHAREHOLDERS OUR TO Oliviero Iubatti, its Chief Executive Officer, expressed a desire to take the service company’s While 2020 provided a stern test for us, it also brought into relief our ability to rise to the development in a more entrepreneurial direction, and he was given the chance to buy a 20% various challenges posed by such unparalleled times. Through a year of reorganisations stake and join its Board of Directors. This change in ownership structure has made the unit and modernisation, we demonstrated our resilience and our agility and saw a number of more independent and opens the way towards further gains in market share. Its expansion development projects reach fruition, despite the unprecedented situation. Many challenges in the cantons of Valais, Geneva and, most recently, Neuchâtel reflect this new growth lie ahead for us in 2021, as the pandemic is again bound to have an impact. Even so, we are momentum. As part of this reorganisation, all its production assets (district heating plants) looking to the future with composure and confidence, drawing strength from the support we were transferred to the Energy Solutions business unit, with Romande Energie Services SA received from our employees, our customers, and our shareholders. We are truly grateful retaining responsibility for development, construction and operations. We also reorganised for the trust they continue to place in us. the Energy Solutions business unit into two separate divisions during 2020. The Energy division now houses the production and supply activities for electricity and heating services, while the Markets division is built around our three new customer segments – households, businesses, and municipalities and property professionals. Christian Frère, who leaves us in 2021, will be replaced by two senior managers. Guillaume Fuchs, who already works for us, will lead the Energy division, while Aurore Amaudruz will head up the Markets division. The handovers take place on 1 March 2021. Lastly, we set up the Digital & Innovation support