Full of Energy - Energie AG Oberösterreich

ANNUAL REPORT2007/2008THE GROUPGROUP MANAGEMENT REPORTTHE ENERGY SEGMENTTHE WASTE MANAGEMENT SEGMENTTHE WATER SEGMENTCONSOLIDATED FINANCIAL STATEMENTSsupply plants for the Upper-Austrian municipalities ofSt. Marienkirchen, Suben and Altschwendt, are aboutto be completed. By developing the sewage servicesarea and starting up the locations Saalfelden andSt. Stefan im Rosental, we succeeded in covering theentire Austrian market. WDL GmbH has thus becomethe leading Austrian company of this sector.Czech RepublicThe activities of the water segment in the Czech Re -public have been integrated into Energie AG Bohemias.r.o. In addition to managing and developing the as -sociated companies, the tasks of Energie AG Bohemias.r.o. also relate to handling acquisition projects thatare currently being undertaken or can be expect ed forthe near future in the course of the planned privatizations.After the purchase of 1. JVS, 5 companies currentlyhandle operations: Vodovody a kanalizace Jižni Čechy,a.s. (VaK JČ), Vodovody a kanalzace Beroun, a.s.(VaK Beroun), VODOS, s.r.o. (VODOS) in Kolín andVodárenská společnost Chrudim a.s. (VS Chrudim).For the further development and optimization of thesecompanies, projects are currently being implementedwith the goal of exploiting synergies, especially in thefield of procurement, technology, insurances, commercialfunctions and marketing.The course of business at VaK JČ was characterizedby continuously optimizing the company and participatingin the tenders for operating contracts on thewater market in southern Bohemia. During the 2007/2008 business year, VaK JČ succeeded in keeping theexisting operating contracts and/or in slightly expandingtheir number. VaK JČ has a total of 287 contractswith public business partners.VaK Beroun operates the drinking water supply andthe waste water management in the area west ofPrague which has about 80,000 inhabitants. On ac -count of the company’s active market policy, it waspossible to increase the number of inhabitants suppliedby 3.8%. In the course of an EU-sponsored sewageproject in the town of Beroun, the company participatedin the co-financing.VODOS operates the water and waste-water infrastructurein Kolín, an industrial town east of Prague,as well as the surrounding district. VODOS thusoper ates in a vigorously growing economic area inthe Czech Republic which, inter alia, accommodatesthe automobile industry and the chemical industry.VS Chrudim operates the water and waste-water in frastructureof the Chrudim district, which is to the southeastof Kolín. The goal of the current restructuring programis to gradually improve the company’s result.Hungary and SlovakiaWasser GmbH has subsidiaries in Hungary and Slovakiato allow it to participate as a well-known partnerin the expected privatization processes. These areMagyarország Vizgazdálkodási Kft. in Budapest andEnergie AG Vodohospodárstvo Slovakia s.r.o. inBratislava.Together with the town of Miskolc and/or its watercompany MIVIZ Kft., Energie AG MagyarországVizgazdálkodási Kft. set up its first operating com -pany in the form of a joint venture, i.e. Energie AGMiskolc Vizgazdálkodási és Környezetv´delmi Korl´toltFelelösségü Társaság Társasági Szerzdödése (EnergieAG Miskolc). It is the task of this company to providewater and waste-water services for the town ofMiskolc. In addition, these services are offered throughoutthe entire region of eastern Hungary. Energie AGMiskolc is also responsible for participating in tendersfor operating contracts.OUTLOOKThe water segment continues to pursue a strategygeared to growth. In the CEE countries this growthis achieved organically, on the one hand, and by theacquisition of further operating companies and/or socalledmixed companies, on the other hand. Mixedcompanies own the water-industry infrastructure andalso ensure their operation. Companies of this kind areprimarily obtained by participating in public tenders(e.g. tenders for licenses). As the awarding processesare very complex, one must reckon with long leadtimes. After successful bidding for a company, it isintegrated immediately into the group. These integrationprocesses also include the realization of synergiesand an increase in efficiency.The objectives in Austria – in addition to continuingthe ongoing business – are to further develop andexpand the areas water and sewage services, to ex -pand the operating business to additional associa -tions and municipalities and to implement furtherwater-supply projects.In the Czech Republic we can expect further tendersfor operating contracts in southern Bohemia. In thiscontext, the local operators, i.e. VaK JČ and 1. JVS willhave to pursue the goal of successfully maintainingtheir current controlling market position, as well as toexpand it, if possible. In southern Bohemia, one of thepriorities in the activities during the coming businessyear will be to obtain synergies between the twoneighboring companies.The other associated operating companies in theCzech Republic also have clear objectives such as togain additional market shares and to further raise theeconomic performance.The further market development on the primarytarget markets in the Czech Republic, Slovakia andHungary largely depends on the availability of EU subsidiesin the future, as well as on the associated conditionsfor obtaining them. These, in turn, influencethe position of the responsible political decisionmakerstowards privatization. At present, the entryinto new markets is being examined.7071THE GROWTH MARKETS OF THEWATER SEGMENT ARE LOCATED OUTSIDEOF AUSTRIA IN THE CEE COUNTRIES.