Financial results in 2021

Financial flows within Alliander

Approximately 85% Alliander’s income comes from the regulated activities of network operator Liander and 15% is from other sources, the latter being income from rental of large-user meters and transformers, income related to new activities and income from the activities of other companies outside the regulated energy sector. As a network operator, Liander will publish its own annual report on its performance in 2021. This annual report will appear in the second quarter of 2022.

The main expenditure relates to maintenance work on the electricity and gas networks and the operating expenses connected with all other activities. We invested more than €1 billion in 2021, mainly in the replacement and expansion of our networks. This investment equates to roughly 38% of our total expenditure. Additionally, there is the dividend payable to our shareholders and the interest payments to the holders of the subordinated perpetual bond loan and other financiers. The dividend and interest payments for 2021 together amounted to approximately 4% of our overall expenditure. Finally, we pay corporate income tax to the tax authorities, and we paid sufferance tax to municipalities for the last time in 2021. This accounts for another 8% of our outgoings approximately.

Cost-effective and efficient operations

Alliander invests increasingly in upgrading and expanding the networks in response to the energy transition. To be able to carry on financing these investments in a responsible manner, a multi-year, organisation-wide cost savings programme was initiated in 2018, aiming to reduce costs and increase productivity. In the period up to and including 2021, this programme has led to total savings of €160 million. 

The foundation of the programme is to pay ongoing attention to increasing cost awareness throughout the organisation and to critically consider which activities are really necessary for performing the job we do – without compromising safety or quality.

Furthermore, the programme focuses on simplifying and improving processes, by standardising and digitising the activities for example. The idea is to work smarter and more efficiently. This will not only lead to savings; it will also increase our capacity to get the work done. We also focus on refining procurement agreements and reducing indirect costs, by adjusting internal and external policies and reducing the deployment of contract staff for example. Cost savings have become part of Alliander's management approach and are now embedded in our way of working. 

Alliander's work package has increased significantly in recent years, leading to growth in the size of the organisation and a corresponding increase in costs. The procurement costs for compensating network losses have also risen, as have the costs charged by TenneT, the prices of materials and the prices charged by external contractors. These factors mean that Alliander's costs show a rising trend despite the annual savings we achieve. This increase is deemed necessary to carry out our social mission.