Mvm Group Integrated Report
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MVM GROUP INTEGRATED REPORT 2018 PROVIDING ENERGY Table of contents MESSAGE FROM THE CHAIRMAN & CEO _5 MVM AND ENERGY _7 ABOUT THE INTEGRATED REPORT OF THE MVM GROUP _9 SUSTAINABILITY RELATIONSHIPS _9 STAKEHOLDER ENGAGEMENT _9 MATERIALITY _12 COMPLETENESS _14 OBJECTIVES FOR SUSTAINABLE DEVELOPMENT _15 STRUCTURE OF THE CHAPTERS OF THE REPORT _16 INTRODUCTION OF THE MVM GROUP _18 OPERATING ENVIRONMENT _18 ECONOMIC, MARKET AND REGULATORY ENVIRONMENT _18 ACTIVITIES _20 OPERATION _24 RESPONSIBLE CORPORATE GOVERNANCE SYSTEM _29 CONFLICTS OF INTEREST _32 SIGNING FOR THE COMPANY _32 VALUES _32 POLICIES AND RULES _35 TABLE OF CONTENTS INTEGRATED REPORT | 2018 2 BUSINESS OPERATIONS _41 MONITORING OF SUSTAINABLE DEVELOPMENT GOALS (SDGS) _41 INDIRECT ECONOMIC IMPACT _42 ECONOMIC TOPICS CONSIDERED IMPORTANT _43 KEY TECHNICAL AND BUSINESS OPERATION INDICATORS _47 SUPPLY CHAIN _55 IMPORTANT PROJECTS AND DEVELOPMENTS _57 POWER PLANT CONTROL AND OUTPUT _63 PRACTICE OF DEMAND SIDE BALANCING _66 DECOMMISSIONING OF THE NUCLEAR POWER PLANT _67 ENVIRONMENTAL PROTECTION _71 QUANTITIES USED _72 EMISSIONS AND EFFLUENTS _80 ENVIRONMENTAL PROTECTION AT THE NUCLEAR POWER PLANT _91 BIODIVERSITY _94 SOCIETY _103 EMPLOYEES _104 OCCUPATIONAL HEALTH AND SAFETY _109 DISASTER MANAGEMENT AND EMERGENCY PLANS _114 EMERGENCY PREPAREDNESS _115 TRAINING AND EDUCATION _116 SOCIAL RELATIONS _118 TABLE OF CONTENTS INTEGRATED REPORT | 2018 3 GRI INDEX _126 ANNEXES _140 CONSOLIDATED BALANCE SHEET OF THE MVM GROUP, 2018 (HUF MILLION) _141 PROFIT AND LOSS ACCOUNT OF THE MVM GROUP, 2018 (HUF MILLION) _144 CASH FLOW STATEMENT OF THE MVM GROUP, 2018 (HUF MILLION) _145 NUCLEAR SAFETY, SUMMARY OF THE NUCLEAR SUPERVISORY AUTHORITY _147 MEMBERSHIP IN ASSOCIATIONS AND MISSION INITIATIVES _151 INDEPENDENT CERTIFICATION LETTER _154 AUDITOR’S CERTIFICATION LETTER _155 ABBREVIATIONS, EXPLANATIONS AND DEFINITIONS _157 IMPRINT _161 RESPONSE SHEET _164 TABLE OF CONTENTS INTEGRATED REPORT | 2018 4 MESSAGE FROM THE CHAIRMAN & CEO DEAR READER, With the merger of the MVM and NKM Groups, our holding, which operates as the largest knowledge 102-14* e are once again very pleased to present the centre in the industry in Hungary, now covers the overall activities and results of the MVM entire energy value chain with its services. In 2018, we WGroup in our publication. The past year also became an indispensable market player, which, besides saw a lot of changes, but the principles of the strategy nuclear, natural gas-based and solar energy generation of our Group were borne in mind also in 2018. and serving customers in the market, now holds energy supply to retail customers also in its portfolio. Of course, The new National Energy Strategy, which is currently we continue to treat e-mobility, the development of being developed, is based on the supply of clean, smart city technologies, the operation of the smart and affordable energy and also takes into transmission network and the provision of state-of-the- account exploiting potentials in energy innovation art government telecommunications solutions as and economic development. Entrusted exactly with priorities. MVM, with the addition of the NKM Group, is these, the MVM Group operates and supplies natural Hungary’s third largest company, employs more than gas and electricity to the domestic population and 12,000 people and is present in 17 countries; in addition, companies. We do all this along the three pillars of our it now serves more than 4 million retail customers. In strategy, generation, infrastructure, utilities, and utility order to achieve optimum operation, among other and home services, to enhance our success in Hungary units, the group-level function overseen by the Chief and abroad as well as our marketable, innovative HR and Services Officer coordinates the development corporate operation, which creates real value. of the human resources and service portfolio. We do all this along the three pillars of our strategy, In 2018, the MVM Group became the market leader in the field of renewable generation, infrastructure, utilities, and utility and energy generation. Under the largest solar power plant project in Hungary, we delivered our Felsőzsolca Solar Power Plant in the autumn and completed our home services, to enhance our success in Hungary Paks photovoltaic project by the beginning of December. The two huge solar and abroad as well as our marketable, innovative corporate operation, which creates real value. * Mark and number of the GRI, or MVM indicator. The list of these indicators can be found in the GRI Index. MESSAGE FROM THE CHAIRMAN & CEO INTEGRATED REPORT | 2018 5 The Paks Nuclear Power Plant generated the most electricity in Hungary also in 2018: the four units Athletic Club. Within cooperation with Hungary’s most popular sports club, MVM had a total output of more than 15,700 gigawatt supports the junior and adult athletes in more than 20 sports. hours, also without greenhouse gas emissions, with an average capacity utilisation rate of nearly 90%. In recent years, the NKM Group has paid special attention to introducing digital, modern, environmentally sound solutions and to ensuring that customers use these quick and convenient options instead of paper-based services. As a result, facilities generate clean, sustainable, carbon neutral electricity for nearly 50,000 about 1.2 million customers are handling their transactions online, including people. At the same time, the installation of turnkey household-sized small power 150,000 through applications, and over 800,000 have chosen online invoices. In plants has been launched in the Group, which will also involve the population in addition, the Group has become an indispensable player in alternative powered renewable energy generation. In addition, the Paks Nuclear Power Plant generated transport in Hungary, since today, besides the CNG fuel provided to a number of the most electricity in Hungary also in 2018: the four units had a total output of public service providers, a nationwide e-car charging network has been built more than 15,700 gigawatt hours, also without greenhouse gas emissions, with using state-of-the-art technologies. an average capacity utilisation rate of nearly 90%. The availability of our renewable energy generating units is also above 90%. Our operational and financial indicators provide an excellent basis for achieving our goals. Our group-level sales amounted to more than HUF 1,700 billion in We know that the key to success for energy providers is digitalisation and 2018, which is significantly higher than in 2017 and 2016: by about HUF 390 increasingly complex and higher value-added services. For this reason, the MVM billion and nearly HUF 690 billion, respectively. The stability of our business Group attaches great importance to knowledge development and continuous operations has also been recognised by the European Investment Bank, when innovation. In 2018, we created the Group-level Technology Innovation Directorate, providing our company with a long-term credit facility of EUR 100 million, thus and for the third time we announced our MVM Edison Startup Competition, where enabling the development and expansion of the most important elements of the we are looking for the best, marketable energy innovations. For that matter, in our Hungarian and regional energy infrastructure. Corporate Social Responsibility Strategy, we also lay emphasis on supporting young generations and the talents of the future. In addition to promoting the We are moving ahead on the road we have started; our goal is to be even better success of innovation and startup culture, sponsoring outstanding musical talents and to operate more efficiently in all areas. I would like to draw your attention to and supporting disadvantaged children have also remained our high-priority the Integrated Report of the MVM Group, where you can read more about the goals. In addition, it also serves supporting young people, the hopes of the future, operation, sustainability efforts and corporate social responsibility of the Group. that MVM has become a sponsor of various sports departments of the Ferencváros We are moving ahead on the road we have started; our goal is to be even better and to operate more György Kóbor efficiently in all areas. Chairman and CEO MESSAGE FROM THE CHAIRMAN & CEO INTEGRATED REPORT | 2018 6 MVM AND ENERGY ne of the greatest challenges of our time is meeting rapidly growing in a significantly higher efficiency in operation, which brings greater returns also worldwide energy demand in a reliable and sustainable way, which in terms of economy and the environment. Oburdens the environment the least. During its activities, the MVM Group, a key energy group in Hungary, works in order to be able to supply energy to all The MVM Group considers investments in power plants utilising renewable of its customers according to their needs by generating, transmitting, distributing energy sources as an important direction of development. The power plant units and trading in energy as well as by improving its activities through R&D and of the member companies include solar, wind and hydro power plants alike. innovation projects. There is a wind farm operated by MVM Hungarowind Ltd. (renamed as MVM Green Generation Ltd. in 2019) in the territory of Győr-Moson-Sopron County. The majority of the energy generation units of the MVM Group generate electricity, When it is operating, the wind turbines, more than 90 metres in diameter and and some power plants also participate in district