CEZ Romania - Petroleumclub.ro

<strong>CEZ</strong> <strong>Romania</strong>

<strong>CEZ</strong> GROUP – STRONG EUROPEAN BUSINESS ENTITY• ranks among the largest power utilities in Europe• in terms of installed capacity• number of customers• key player on the Central European electricity market• second biggest exporter of electricity in Europe• covers various industrial areas• extraction of raw materials• electricity generation• electricity distribution• sale of electricity generation by-products• end of 2004 - comprised of 97 companies, of which 34 were included in the<strong>CEZ</strong> Group consolidated financial statements.1

<strong>CEZ</strong> VISIONBusinessfocus• Integrated utility focused on powergeneration, distribution and supply• Present in related businesses whererelevant (coal mining, heat generation)Our visionLeaderin powermarkets inthe Centraland SoutheasternEuropePriorityinitiatives• Czech Republic• maintain strong hedged position• achieve operational excellenceto be replicated across the group• renewal of plant portfolio• Central and South Eastern Europe• build strong hedged positionthrough acquisitions• integrate into the GroupBrand equity • Champion on the international energymarkets2

<strong>CEZ</strong> KEY STRATEGIC INITIATIVESVision and corporate targetsIntegration andoperationalexcellencePlant portfoliorenewalM&Aexpansion(2004-08)(2007-20)(2004-10)Performance-oriented culture3

<strong>CEZ</strong> PRINCIPLESImplementationprogram• Top and middlemanagementmeetings/workshops• Employeemeetings• Corporatemagazine andintranet• New hires• Job rotations• Performancereviews1. Value creation is the top priority2. Enforcing individual responsibility for reaching ambitiousgoals/results3. Building ties and share values within the Group4. Development of human potential5. Creation of international organization6. Acceptance of continuous change7. Enforcing integrity4

ELECTRICA OLTENIA INTEGRATED IN <strong>CEZ</strong> GROUP<strong>CEZ</strong> Group in Poland(75% share in Skawina, 89% in Elcho)• Electricity sales (TWh)• Market share• Installed capacity (MW)• Market share• Number of employees• Sales (EUR million)3.82.5%8102.3%776188.4<strong>CEZ</strong> Group in the Czech Republic*<strong>CEZ</strong> Group in <strong>Romania</strong>*(51% share in Electrica Oltenia)• Electricity sales (TWh)• Market share• Number of customers (million)• Market share• Installed capacity (MW)• Number of employees• Sales (EUR million)• Turnover in 2005 - 1.292 mil. RON• Net profit in 2005 - 69.4 mil. RONTarget marketsTrading office6.813%1.3617%03,027399• Electricity sales (TWh)• Market share• Number of customers (million)• Market share• Installed capacity (MW)• Market share (MWh)• Number of employees• Sales (EUR million)* IFRS, 2004Note: Exchange rate CZK/EUR = 3067.858%3.4462%12,29774%17,8553,339<strong>CEZ</strong> Group in Bulgaria*(67% shares in 3 EDCs )• Electricity sales (TWh)• Market share• Number of customers (million)• Market share• Installed capacity (MW)• Number of employees• Sales (EUR million)7.741%1.942%04,9053765

Local environment• evolving from a centralized state owned to a liberalized competitive one• track history through transparent and organized market place for a betterrisk management• spot market and marketplace for trading bilateral contracts• the generation sector is not yet acting as a competitive one (there are noheterogeneous interests)• sources oriented structure – no competition• there are balanced resources• legal and regulation framework – better aligned to EU practice6

Major target - Unbundling• launched in order to comply with requirements of unbundling in electricityimposed by the European Directive 2003/54/EC concerning common rulesfor the internal market in the electricity sector; the government decision no.890/2003 transposes the obligation of unbundling in <strong>Romania</strong>n legislation.• UNBUNDLING = Separation of distribution system operator from otheractivities not related to distribution from legal, functional and accountingpoint of view.• Approved the division scenario; 2 structures (Sales, Distribution) via spin-offprocedure• Due time for the legal part – February• Due time for fully operational – July 1 stOther important actions:• SAP implementation, new procedures, new motivational system7

Future plans• distribution- at least one of the three•energy complexes- at least one of the three•hydro- above 300 MW – on going after finalized projects (power plants)• system services power plant- Borzesti or similar• local cogeneration- within our service area (main cities)8

<strong>CEZ</strong> <strong>Romania</strong>• encourages a competitive and transparent environment in <strong>Romania</strong>nenergy sector• open relation with the ministry and regulatory authority, based onmutual consultation and transparency• open relation with local authoritiesTHANK YOU!9