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  • News - EY - Diversification and global competition drives renewable energy attractiveness - EY - Global
    delivering often difficult market reforms to set the tone for renewable energy investment in the years ahead Legislative clarity shakes up the index The latest index saw India climb to fifth place reflecting the significant investment and project momentum resulting from the Government s ambitious renewables targets and policy reforms to improve the investment climate In an exclusive interview published in the report Energy Minister Piyush Goyal describes how India s focus on attracting more than US 100b in renewable energy investment in the next five years will help the country climb to the top of the index by 2019 While fortunes in Europe remain mixed positive policy signals in a number of markets are likely to create traction over the coming year France moved up to seventh place as the progress of its energy transition bill creates much needed certainty over the country s 2030 renewables ambitions Similarly additional details brought greater clarity to the legislative framework for competitive tenders in Poland and the commitment by the Swedish Government to shift away from nuclear toward 100 renewables sends a clear message to the market Meanwhile a lack of clarity around whether the contract for difference regime will be sufficient to stimulate investment in new capacity in the UK saw the country fall to eighth place on the index its lowest ranking to date and news that solar tariffs in Italy will fall away for new projects pushed the country down to 16th place Beyond Europe Mexico continued its ascent in the rankings following the progression of its energy transition law which sets out a detailed roadmap for achieving the country s ambitious renewables targets alongside its broader energy reforms At the same time Egypt re joined the index for the first time in two years thanks to a new feed in tariff and auction system that provides greater clarity for project developers and demonstrates increased government support for renewables Private sector support fuels attractiveness The burden for creating competition and attracting renewables investment shouldn t fall solely on the shoulders of politicians The private sector has an important role to play Warren says Many markets are already attracting significant sums of capital and establishing robust project pipelines Private sector investors and developers can t afford to be complacent They must also make the effort to distinguish between real and perceived risks and be more proactive in establishing a tangible presence in their target markets Our feature on Sub Saharan Africa for example highlights how public perception of the region is changing from an emerging market in need of financial support to a commercial market in its own right Energy developers and investors must get creative and competitive to secure a slice of such high growth markets Increasing levels of private sector engagement and the development of large scale projects have helped a number of countries move up the index including Kenya Morocco Chile and the Philippines The report s feature on the US led Power Africa initiative also highlights

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-EY-diversification-and-global-competition-drives-renewable-energy-attractiveness (2016-02-10)
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  • News - EY - Global power and utilities deal activity reaches five-year high in 2014 - EY - Global
    from slow economic recovery uncertainty surrounding generation mix and tightening regulations Activity in the US was driven by megamergers and a strong appetite for renewables Seventy six deals worth US 62 4b and accounting for 65 of the Americas total deal value took place in the US The Asia Pacific region also experienced strong deal activity in 2014 led by growing electricity and gas demand and positive regulatory reform in several countries Africa continued to attract interest as well The report s Africa in focus section describes how new energy policies across the continent are encouraging investment and increasing electrification Matthew Rennie EY Global Transactions Power Utilities Leader says Portfolio optimization in the US business model and geographical restructuring in Europe and financial consolidation in the Asia Pacific region spurred transactions across the P U sector in 2014 Looking ahead several market trends are pointing to another year of healthy activity IPPs to become more active Independent power producers IPPs are set to play an increasingly important role in shaping future M A activity within the P U sector While low power prices have made unregulated generation unprofitable for some diversified utilities the recent price recovery is sustainable and will be boosted by further coal plant retirements in 2015 This coupled with declining reserve margins in the near term in many regions suggests the IPP market will be active in 2015 Utilities to look for growth and consolidation opportunities outside home territories M A activity in 2015 will be bolstered by large diversified utilities continuing to streamline operations These companies are focused on stable regulated assets and consolidating their positions through bolt on acquisitions in high growth regions Investments to move up the value chain as utilities seek to control the supply chain Expect to see utilities shift some investment focus toward vertical integration by acquiring midstream and upstream assets Asia Pacific European and US utilities continue to seek opportunities to hedge against commodity price volatility while Japanese utilities remain focused on acquiring shares in liquefied natural gas projects and Indian utilities concentrate on coal Yieldcos to ride high on the back of better yield and dividend growth Dividend growth oriented public companies known as Yieldcos will continue to drive M A activity as parent companies strive to ensure they have a steady pipeline of assets generating cash flow North American energy companies raised approximately US 1 8b from Yieldcos in IPOs in the past year and more companies are expected to follow suit Competition for contracted renewable assets to grow as buyers look for stable earnings Renewable assets continue to be top of mind for investors as more countries implement policies in support of renewable energy In North America despite uncertainty around production tax credits international investors continue to pursue cash flow yielding contracted wind assets and utility scale solar projects Emerging markets become integral to global investors growth agendas The urgent need for increased levels of electrification in emerging markets presents significant opportunities for global investors In Africa

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/News-EY-global-power-and-utilities-deal-activity-reaches-five-year-high-in-2014 (2016-02-10)
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  • News - EY - Miners preparing for a switch to longer-term value creation - EY - Global
    Life at EY Joining EY Global Delivery Network Alumni Home Newsroom Miners preparing for a switch to longer term value creation Miners preparing for a switch to longer term value creation London 23 February 2015 Newsroom News releases PR contacts PR activities Analyst relations Fact and figures Share Current market conditions are putting mining companies in a quandary investing for the next stage of growth is potentially unpopular with investors but it could prove to be a masterstroke if they want to fully capture the next uplift in the cycle says Lee Downham EY Global Mining Metals Transactions Leader Releasing EY s report Mergers acquisitions and capital raising in mining and metals 2014 trends 2014 outlook Buy build or return Downham says standing still is not an option for the sector as it enters the latter stages of a global supply rebalancing and new competitors try to stake their position The comments follow the 10 year transaction lows of 2014 which was the fourth consecutive year of declining M A activity in the sector Deal volumes were down 23 year on year from 703 in 2013 to 544 in 2014 the lowest volume of deals since 2003 Overall deal value was down 49 year on year from US 87 3b in 2013 excluding the Glencore Xstrata merger to US 44 6b in 2014 the lowest since 2004 Downham says Right now there is no consensus on buy build or return strategy The current focus on return on capital employed lends itself to short term decision making some of which has successfully instilled much needed discipline across the industry But given the cyclical characteristics of the sector and the need to invest significant capital many years ahead of production and earnings it isn t the only lens that should be used he says Following the cost reduction programs internal capital allocation and productivity measures of the past few years the really successful management teams will be those that have a broader focus on total shareholder return and take the necessary capital decisions today to support long term value creation Buy build or return the case for buy EY analysis of capital allocation trends of 30 of the largest listed mining companies in the period 2003 13 showed a clear underperformance by those companies that invested heavily in a build strategy over the time period while returners outperformed with acquirers not far behind Downham notes that acquisition options have often been taken off the table because of the significant impairments that have followed deals in recent years and the stigma attached as a result This overlooks the huge returns that some acquisitions created earlier in the cycle and the short payback that a deal if executed well may generate overall compared to investing in a portfolio asset he says 2015 will be a turning point for private capital buying Downham says 2015 will almost certainly be a turning point for the deployment of private capital in the sector On the whole sector

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/News-EY-miners-preparing-for-a-switch-to-longer-term-value-creation (2016-02-10)
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  • News - EY - European alternative finance market could top 7 billion euros in 2015 - EY - Global
    of Europe s online platform based alternative finance market While previous studies have charted alternative finance in the UK this report is the first to cover other European countries in detail Seen until recently as a niche activity online alternative finance including equity based crowdfunding and peer to peer business lending has become a vital and increasingly commonplace source of essential funding for SMEs start ups and many other businesses throughout Europe says the report Online alternative finance comprising platform based financial transactions outside traditional banking grew across Europe from 1 21b in 2013 to 2 96b in 2014 The overall European alternative industry is on track to grow beyond 7b if the market fundamentals remain sound and growth continues apace In 2014 201m of early stage growth and working capital funding was provided to European SMEs and start ups by alternative finance platforms The volume of online alternative business funding has been growing steadily at around 75 year on year and the estimated number of start ups and SMEs funded in this way has been growing at an even faster average rate 133 over the last three years to around 5 801 SMEs or start ups in 2014 Robert Wardrop Executive Director of the Centre for Alternative Finance at Cambridge Judge and co author of the new report says These new forms of alternative finance are growing quickly and this growth is beginning to attract institutional investors Alternative finance at least in some European countries is on the cusp of becoming mainstream Andy Baldwin EY Managing Partner Europe Middle East India and Africa Financial Services says To date there has been little hard data about the extent of the industry across Europe This report shows that while it is still considerably smaller than the industry in the UK alternative finance on the continent cannot be ignored The UK market s success has in part been driven by investors search for yield after the Bank of England s QE program so it will be interesting to see if the EU s recent QE program sparks increased activity in Europe For me some of the most interesting metrics are the rate of adoption in certain markets and models For example peer to peer business lending grew at more than 270 in mainland Europe this year and Estonia and Sweden have some of the highest volumes per capita The whole financial services industry should be watching this space with growing interest and this study will provide a valuable benchmark against which to measure future developments The new report is written by Robert Wardrop Bryan Zhang Operations and Policy Director of the Centre for Alternative Finance Raghavendra Rau Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge and Research Director of the new Centre and Mia Gray Senior Lecturer at the Department of Geography at the University of Cambridge who has focused on alternative finance and regional economies The new Centre provides a disciplined research framework to support the fast growing structures

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/News-EY-european-alternative-finance-market-could-top-7-billion-euros (2016-02-10)
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  • News EY - Deal makers move up the corporate hierarchy with mergers and acquisitions established to growth - EY - Global
    and growth responsibilities Corporate development officers CDOs are now playing an increasingly key role in strategy at corporate and business unit level Pip McCrostie EY s Global Vice Chair of Transaction Advisory Services TAS says Growth through M A is back Rapid market changes such as digital transformation shareholder activism and geopolitical concerns are resulting in new strategic growth objectives In turn this is translating into a much wider remit for CDOs New demands require new skills to combat old M A failings The study finds that changing demands are reshaping the M A market and dealmaking functions in significant ways It also finds that new skills are increasingly required to ensure deals succeed and lessons are learned from past M A activities Nearly three quarters 73 of those surveyed indicate the commercial assessment process as the primary reason for past transaction failures Other key causes for failure are seen as weak strategic rationale 72 and breakdown in the integration process 71 The need for M A decision makers to improve commercial assessment skills understanding the market the competition and the target s business and operating model are increasing In the context of the explosion of information the study explores the potential for big data analytics to transform the effectiveness of deal strategy promising to create significant value Analytics and forecasting to predict potential risks and opportunities drawing quantitative and qualitative insights from such sources as social media and identifying potential synergies through larger data sets are just a few ways that big data can enhance deal effectiveness Steve Krouskos EY s Deputy Global Vice Chair TAS says Big data is a big deal for M A Advanced analytics will increasingly determine how deals are sourced evaluated and executed Many businesses are incorporating data analytics into their deal strategies and execution those that get ahead of the curve will steal a march on their competitors Early adopters create chief growth officers The renewed onus on growing the business has led to the creation of a corporate growth officer CGO According to the study a few leading edge companies have already appointed a CGO and others are considering such a position Krouskos says With a renewed focus on acquisitions as a route to growth the concept of CGO has already been seized by early adopters It could be the next evolutionary leap for corporate development given the function s increasing convergence with strategy Another organizational development reflecting the greater focus on deals sees more companies around the world adopting separate M A committees that advise senior management and give inorganic growth a defined voice in the boardroom This is particularly the case in Europe Middle East and Africa EMEA where nearly half 45 of the respondents have a separate M A council The research clearly demonstrates that the presence of a dedicated M A committee closely correlates with higher deal satisfaction Gearing up for tomorrow s M A world today McCrostie says The businesses that achieve most from M A are

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/News-EY-deal-makers-move-up-the-corporate-hierarchy-with-mergers-acquistions-reestablished (2016-02-10)
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  • News - EY - Emerging markets show increasing promise for digital earnings potential - EY - Global
    cost attractiveness factors include digital piracy political and regulatory risk and digital tax costs The top five countries with the highest net digital earnings potential combining both cost attractiveness and benefits are the United States Japan Germany the UK and China When looking strictly at benefits the United States takes the number one spot followed by China Japan India and the UK When ranking just cost attractiveness Germany places number one followed by the United States the UK France and Australia John Nendick Global Media Entertainment Leader at EY says Emerging markets are primed for accelerated digital media adoption Many of these markets have a large number of young tech savvy consumers with rising earnings potential They are also mobile first with cheap smartphones and the rollout of 3G and 4G infrastructure rapidly coming together to democratize online access The number of broadband connections in emerging markets listed in the index will be 2 billion by 2016 nearly twice that of the mature markets and smartphone shipments to emerging markets are expected to double between 2014 and 2018 The four emerging market countries that top the index for digital earnings potential are China By 2016 it is expected that China will have more than 500 million wireless broadband connections The country boasts voracious digital media consumption however regulations may limit growth opportunities for foreign companies China has a population of 534 million people aged between 15 and 39 and growing Internet penetration has created a surge in the adoption of digital content in three years China has added 3 5 times as many digital video viewers as the US India By 2016 it is expected that India will have more than 300 million wireless broadband connections By 2020 with an average age of 29 India will be the world s youngest country Among other countries in the report India ranks fourth for content consumption it has the largest box office attendance 160 million pay TV households and publishes 94 000 newspapers While digital content consumption is tempered by low smartphone and broadband penetration a surge in broadband adoption is expected with the rollout of 4G services However the ubiquity of media consumption has not yet translated into significant industry revenue Both advertising revenue and consumer spending levels are relatively low By 2016 India s internet advertising market is forecast to be a little more than US 1b the forecast for China is in excess of US 23b Russia Russia has a large urban population and strong consumer spending With 87 broadband and 50 smartphone penetration Russia is a digitally active market Media consumption is also high both across traditional and digital media However Russia ranks lowest in political stability and has the highest level of digital piracy in the study While the country offers a favorable tax environment for foreign investment in digital media it recently introduced significant restrictions on foreign ownership of mass media forcing many media and entertainment companies to rethink their presence in the market As a

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/News-EY-emerging-markets-show-increasing-promise-for-digital-earnings-potential (2016-02-10)
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  • News - EY - Miners leaving cash in the ground with poor working capital - EY - Global
    Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Newsroom Miners leaving cash in the ground with poor working capital Miners leaving cash in the ground with poor working capital Sydney 9 February 2015 Newsroom News releases PR contacts PR activities Analyst relations Fact and figures Share A new EY report shows that mining companies are missing out on easy money because of poor working capital management Released today Cash in the ground working capital management in the mining sector is an analysis of the working capital performance of 80 of the largest mining companies globally The report shows that despite improving working capital from 2007 to 2011 working capital management has declined since 2011 EY Global Mining Metals Advisory Leader Paul Mitchell says As a sector the mining industry performs fairly poorly in managing working capital they are leaving cash in the ground Most mining companies could probably reduce working capital 25 50 inside 18 months if they tried Mitchell says waning profits dividend commitments and ongoing pressure for share buybacks mean companies now have more incentive to reclaim lost capital In a time of declining margins a lower draw on working capital can be the competitive difference between success and failure says Mitchell The findings Analysis in the report shows cash to cash a measure of the cash conversion cycle in the mining sector in 2013 was 39 days up from 38 days in 2011 and well short of the 29 days in the oil and gas sector in 2013 When assessed by commodity group only three aluminum zinc and copper companies improved working capital performance between 2011 and 2013 Mitchell says For each commodity there have been major variations in both the level and degree of change in cash to cash between individual companies that has to do with structural and operational differences and factors like pricing practices exposure to commodity trading and volatility in mineral prices In 2013 cash to cash for iron ore and for coal companies were both 25 days while platinum and nickel posted the worst cash to cash results of more than 95 days Those in between included aluminum 37 days gold 48 days and copper 51 days Mitchell says While innate operational factors and differences in the complexity of processes for some commodities consumer more working capital companies would benefit from comparing their own performance to that of peers and other commodities In many ways this along with low productivity is a legacy of the super cycle production at any cost attitude that prevailed for a number of years Solutions Mitchell says improving processes and changing

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/News-EY-miners-leaving-cash-in-the-ground-with-poor-working-capital (2016-02-10)
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  • EY news - Many governments are legislating now rather than awaiting final OECD BEPS recommendations - EY - Global
    countries are pressing ahead and legislating now rather than waiting for final recommendations from the Organisation for Economic Co operation and Development OECD on its Base Erosion and Profit Shifting BEPS 1 Project according to an EY report The outlook for global tax policy in 2015 which draws on the views of EY Tax Policy Leaders in 32 countries to identify key tax trends for the year ahead in each of their regions BEPS expectation dictates tax reform Last year saw unprecedented change in the cross border tax landscape owing in large part to G20 and OECD deliverables for new global taxation measures from September 2014 The report points to striking national policy shifts with 40 of respondents citing significant tax reform activity even while final BEPS recommendations are still pending Significantly 34 have enacted legislation or are planning to do so in 2015 to tackle hybrid mismatch arrangements 2 Chris Sanger EY s Global Tax Policy Leader says Tax is at the focal point of the global policy agenda more than ever before With the acceleration of initiatives such as the BEPS Project policymakers are choosing to react now and adapt later rather than waiting for recommendations This has been described as bizarre by members of the OECD and adds to increasing tax uncertainties facing businesses in 2015 Rising tax burden and enforcement measures Country data also show that the trend toward broad base low rate business tax regimes continues to prevail Conversely however nearly a third of respondents 31 expect the overall corporate income tax burden in their countries to increase in 2015 This further supports OECD data that show total tax revenues are rising throughout the world 3 As policymakers anticipate further BEPS developments in 2015 including the announcement of Action 12 Requiring Taxpayers to Disclose Their Aggressive Tax Planning Arrangements the trend for taxpayer scrutiny is also set to accelerate The report highlights how governments are already launching new transparency requirements such as country by country reporting with 10 countries 31 reporting increases in tax enforcement measures for the year ahead Taxation central to government affairs Taxation is increasingly becoming a pivotal determinant in election campaigns and with 10 of the 32 31 countries planning national or presidential elections in 2015 businesses must prepare now for possible changes in national tax policies Falling oil prices and currency fluctuations also are identified as key drivers for national policy revision in what is likely to be an eventful year ahead Processes and policies needed to achieve tax certainty The report highlights some of the top recommendations from EY Tax Policy Leaders Sanger says Businesses need to develop robust processes and policies to achieve certainty By studying the drivers of policy change and understanding which countries are adopting new policies they can gain a clearer picture of where the tax agenda is moving to next In these times of change it is even more important that the impact of the options facing policymakers on business investment is readily understood

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-many-governments-are-legislating-now-rather-than-awaiting-final-oecd-beps-recommendations (2016-02-10)
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