Greetings!
Earlier this week, AES reported Proportional Free Cash Flow for the first quarter of 2016 of $253M, a decrease of $12M from the first quarter of 2015. This was driven primarily by lower margins, partially offset by improved working capital. In April, we also received payment of $350M in outstanding receivables at Martiza in Bulgaria and we are on track to meet our target of $50M in cost savings expected this year that would further increase to $150M by 2018.
To learn more, read the full press release here or watch the full, archived webcast here.
AES Communications
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A Message from CEO Andrés Gluski:
Aligning AES to be an energy star
We are the energy. The energy we bring to what we do improves millions of lives around the world today. Our potential for the future is even brighter. That's why we're focused on becoming an energy star by taking action now to benefit us for tomorrow. These benefits will create opportunities for us to grow, as a company and as people.
Becoming an energy star requires us to work differently and to align ourselves to better compete and win. We are in an industry that is changing at an unprecedented rate in its history. New technologies, such as energy storage, are turning the promise of a clean, reliable grid into a reality. Pressures are mounting on carbon emissions. Customers have more choices in the services they receive and how they receive them.
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A Message from CEO Andrés Gluski: Organizational Update
At AES, we aim to offer our people experiences to develop to their fullest potential. I am pleased to share several transitions in the CEO group that will provide our people opportunities to continue to grow, while helping us to achieve our strategic business objectives.
Under the leadership of Chris Shelton and John Zahurancik, our Energy Storage team has done a great job in identifying a solution, building a product, pioneering the market, and establishing and maintaining AES' leadership position. It's now time for us to accelerate our growth in this space by developing and executing on a business plan to expand Advancion deployments not only within AES platforms, but through direct sales and third-party channel partners. The group will now report directly to me and I've asked Steve Coughlin to take on a new role in leading the team to achieve their growth goals with John Zahurancik reporting to Steve.
Kristina Lund, who most recently served as my Chief of Staff, will be stepping up to lead Corporate Strategy and Investment, still reporting to me, and Paul Freedman from the legal team will become my new Chief of Staff. These changes are effective immediately.
Please join me in congratulating Steve, Kristina and Paul and wishing them continued success in their new roles.
Regards,
Andrés Gluski
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AES to boost the services business in Argentina with US$300 investment
Andrés Gluski, AES President and CEO, was recently interviewed by La Nacion, one of Argentina's leading daily newspaper. In the interview, Andrés talked about Argentina's changing business landscape making it more attractive to investors. He stated, "The new measures are very positive. Above all, the freeing of the foreign exchange controls and the possibility of issuing dividends. That was the sign that things were changing in Argentina."
Andrés mentioned that AES plans to invest up to US $300M to maintain our existing power plants in the country. He added,"The goal is to achieve a sustainable and efficient growth, such as, for example, the closure of the combined cycle to generate and reduce emission. Harnessing the CO2 itself from each machine, and transforming it into more energy. Currently 2% of the power we generate is renewable. Our goal is to reach 8% by 2017."
By improving our business position in Argentina, we are strengthening our mission of improving the lives of the people we serve through delivering safe, reliable and sustainable energy solutions. Andrés' interview can be accessed here for the English translation and here for La Nacion's article in Spanish.
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Integration of Distributed Energy business into the US SBU
AES Energy Star is a program that we've put in place to take action today to benefit our tomorrow. A series of opportunities that make up the Energy Star program were identified to streamline how we work, leverage economies of scale, synchronize processes and replicate practices across our businesses. One of those opportunities was a work stream to integrate our Distributed Energy business into the US SBU.
The team recently completed its efforts. Through this work stream, the Distributed Energy business collaborated with the existing shared services functions within the US SBU to determine how it could operate more efficiently in line with AES standards without adding people. The functional areas integrated with the US SBU included: safety and security, procurement, information technology, human resources, asset management, treasury, accounting and legal. By integrating these capabilities with the scale of the existing US SBU shared services teams, the DE work stream will realize an annualized cost avoidance runrate of US $0.5M initially, which will grow over time.
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AES UK & Ireland recognized as one of the Top 100 Businesses in development of energy storage
AES UK & Ireland, part of the Europe SBU, was recently selected as one of the Top 100 Businesses in the development of energy storage solutions. Imran Abbasi, Financial Analyst for the UK Business Development group represented AES at the Energy Storage Top 100 Businesses Awards event hosted by PV Tech in London. The awards recognize the role of organizations in promoting long-term sustainable growth in the energy sector.
The Top 100 Business event was held as part of an Energy Storage Summit held over three days by Solar Media and brought together a broad range of stakeholders to discuss infrastructure and energy policy.
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AES Brazil launches new communication channel
The Internal Communications team of AES Brazil SBU recently launched Jornal Tá Ligado ("Always On" News), a TV news program that highlights stories on Safety, People and Strategies in an engaging way.
The TV program will be played during the Momento Ligado, the required safety briefing time before the start of activities. People also receive a webmail when a new edition is uploaded. A copy of the program is made available at the Portal Ligado.
The first edition of Jornal Tá Ligado highlighted the Values Guide as well as topics on Flu and the new Preliminary Risk Analysis. There were also featured interviews of Health, Safety and Environmental Officer Marcelo Puertas, Vice President for Regulatory Affairs Sidney Simonaggio and Corporate Compliance Manager Claudio Scatena.
Click here to watch the program with English subtitles.
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| OUR PEOPLE ARE OUR ENERGY |
Hundreds of AES Indiana people re-energize five Indy-area parks
Indianapolis Power & Light, part of the US SBU, recently celebrated their sixth year of restoring parks in the Indianapolis Area. Hundreds of AES people volunteered in the parks by planting trees, removing fences, rehabilitating playgrounds and refreshing murals. Day in the Parks is IPL's signature event and the company's largest volunteer program. Several community partners collaborated to make the event possible: Indianapolis Parks Foundation, Keep Indianapolis Beautiful, Inc. and Indy Parks and Recreation. Local television station Fox 59 covered IPL Day in the Parks. To see the video coverage, click here.
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Dimitar Georgiev Dimitrov is Always On for Safety
Dimitar is a Balance of Plant (BOP) Leader at AES Maritza, a power plant in Bulgaria, part of the Europe SBU. He has worked for AES for more than five years and has been recognized for his strong leadership and commitment to safety. He is an example that working safely is a way of life that goes beyond the workplace.
Dimitar's past experience as a soccer player helped him implement a team culture in his job as a leader of the BOP team. When a fast response is required, Dimitar makes sure the right business decisions are made and all safety requirements are met. He performs high-quality safety walks and leads by example, ensuring people are following safety procedures. He always considers safety when planning his activities. He takes the same approach in his role of internal EHS auditor in all the stages of the process.
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Company confidential. Do not distribute outside AES. © Copyright AES Corporation 2016
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