Full of Energy - Energie AG Oberösterreich

ANNUAL REPORT2007/2008THE GROUPGROUP MANAGEMENT REPORTTHE ENERGY SEGMENTTHE WASTE MANAGEMENT SEGMENTTHE WATER SEGMENTCONSOLIDATED FINANCIAL STATEMENTSOutlook80The Energie AG Group will continue to pursue itsvalue-based growth strategy with consistency in thecoming business year. The goal is to be a major supplierof infrastructure services in the core business sectorsenergy, waste management and water in Aus triaand additional countries in Central and Eastern Europe.All business sectors contribute towards increasingthe value of the Group, combined with a major ex -pansion of the operating result, which is in line withthe objectives of a balanced corporate portfolio:●●Building the 400 MW combined-cycle gas turbinepower plant at Timelkam was the answer of thegeneration business area to the challenge of continuouslyrising electricity prices and higher elec -tricity demands, with production units in Europebecoming scarcer at the same time.At the beginning of the 2008/2009 business year,the power station took up its trial operation.Once the power station has begun its full-scaleoperation, the Group’s coverage rate for own electricitywill go up to about 70%. The existing powerstations on that site, i.e. a hard coal power-stationblock, as well as a gas-turbine unit, will becomestandby facilities after full-scale operation has be -gun. As compared to these latter plants, emissionscan be greatly reduced, and efficiency can be in -creased significantly.We continue to look into and secure further locationsfor thermal power station projects.With regard to hydro power production, the focusis on enhancing the efficiency of existing plants, aswell as on utilizing further hydro power potentialsin the defined geographical area.The first period of incentive-based regulation forelectricity distribution system operators in Aus triawill end at the end of the 2009 calendar year. Thecoming business year is therefore under theimpact of preparations for a second period whichwill cover 01/01/2010 to 31/12/2013. By applying aconsistent cost management, we continue to strive●●●for the position of benchmark leader in the peergroup of Austrian distribution system operators.At the same time, a target-oriented investmentstrategy will contribute towards ensuring that thesecurity and quality of supplies for customers ismaintained and improved. In this context, replac -ing overland lines by ground cables is a priority, inorder to reduce the exposure to incidents causedby meteorological influences, which occurred in -creasingly in recent years.We counter the competitive pressure on the electricitydistribution market by positioning the Groupas a quality supplier and by our high level of competenceconcerning energy efficiency. Our goal isto keep customer levels stable, with only a fewcustomers changing over to competitors, and byexpanding our market area.The priorities of the coming business year are thefurther consistent and customer-oriented implementationof the statutory efficiency targets andthe expansion of add-on services.The many years of experience in building andoper ating heating-supply plants is used to ensurefurther stable growth. While the focus in UpperAustria is on expanding and intensifying the exist -ing networks, activities in the Czech Republic andSlovakia concentrate on acquisitions.The goals for the 2008/2009 business year are tointegrate the recently acquired participations, tofurther optimize the organizational and cost structuresand to utilize synergies within the businessarea and the Group.By taking over the majority in OÖ. Ferngas AG, theEnergie AG Group established the new businessarea natural gas. During the coming business year,the task will be to integrate the structures and toachieve synergies among the business areas.After introducing incentive-based regulation for gasnetwork operators as of 01 February 2008, theneces sary provisions concerning the investment fac-●tor for Network Levels 2 and 3 are still open. A newtariff ordinance is expected to enter into force asof 01 January 2009.With regard to natural-gas supply, more com petitionis expected from natural-gas substitutes. Ourgoal is to increase the number of customers whenoperating in this environment.The concentration process that has set in on thewaste-management market in Central and EasternEurope continues. AVE is securing and expandingits leading position in Austria and Hungary by pursuingan offensive market and growth strategy, aswell as stepping up efforts to acquire further sharesin the other countries. It holds control over theentire value chain in the waste-management in -dustry, on account of a vigorous organic growthand continuing acquisitions.For the 2008/2009 business year, AVE plans furthermergers of subsidiary companies, in order to keepthe organizational structure lean and effective, aswell as to optimize the density of its locations, andto utilize the resulting potential of synergies.In the course of the coming business year, AVE willimplement numerous projects, as part of its in vestmentactivities. They range from starting productionat the pelletizing plant at Wels, to buildingwaste-material sorting and processing plants, as wellas to beginning landfill operations. Depending onthe specific country, the high AVE standards willbe implemented.●Linz, 28 November 2008In the water segment we will pursue the statedgrowth strategy with consistency, by way of or -ganic growth and the acquisition of further companiesin the CEE countries.The focus in southern Bohemia in the Czech Re -public will be to strengthen or expand the marketposition by participating in the expected tendersfor operating contracts, as well as by obtaining synergiesbetween the two neighboring companies,i.e. VaK JČ and 1. VJS. We also aim at expandingthe market shares of the other companies in theCzech Republic, as well as increasing their eco -nomic performance.In Austria, activities will focus on the further de -velopment of water and sewage services, on ex -panding the operating business and on furtherwater-supply projects.The further market development in the CzechRepublic, Slovakia and Hungary will be dependstrongly upon possible EU grants and the thenresulting readiness of the political decision-makersto continue privatization.For the 2008/2009 business year, the Energie AGGroup is once again geared to enhance the companyvalue on a lasting basis by pursuing a clear growthstrategy and systematic value-based man age ment.Sound financial strength, a strong market position,committed staff and an experienced managementteam will make sure that this target is reached.The Board of Management of Energie AG OberösterreichLeo Windtner Werner Steinecker Roland Pumberger81