Energy for today. Caring for tomorrow.
Rapport Annuel 2010 Enovos Luxembourg
Enovos Luxembourg S.A. 2, rue Thomas Edison L-1445 Luxembourg Postal address: L-2089 Luxembourg Tel.: (+352) 2737-1 Fax: (+352) 2737-6111 enovos.eu
Customer Service Center in Strassen, Bertrange and Ingeldorf, Esch-sur-Alzette Annual Report 2010 Serviceline: 8006-6000 (freephone number) [email protected] Enovos Luxembourg Enovos Luxembourg S.A.
Registered as a société anonyme (public limited company) under Luxembourg law with a capital of EUR 103,800,000 (31.12.2010) Registered office: Strassen (Luxembourg) Luxembourg Trade and Companies’ Register B44683
Annual General Meeting of 10th May 2011
Reports presented to the annual general meeting of shareholders by the Board of Directors and the statutory auditors x x
Index
I Introduction
1 Enovos Luxembourg’s mission and values 5
2 Group structure as of January 2011 6
3 Key figures for Enovos Luxembourg S.A. (under Lux GAAP) 7
4 Corporate governance bodies as at 31st December 2010 9
5 Message from the Chairman and the CEO 10
6 Highlights in 2010 12
II Management Report
1 The economic and energy environment 15
2 Sales of Enovos Luxembourg S.A. 18
3 Energy supply 25
4 Conventional energies and infrastructure 30
5 Renewable energies and cogeneration 31
6 Human resources 33
7 Subsidiaries of Enovos Luxembourg S.A. 36
III Annual Accounts of Enovos Luxembourg S.A.
1 Balance sheet as at 31st December 2010 40
2 Income statement for the year 2010 42
3 Notes to the annual accounts 44
4 Independent Auditor’s report 55
4 I Introduction
1 Enovos Luxembourg’s mission and values
As a major energy provider in the Luxembourg, According to its guiding principle, German and European energy market, Enovos “Energy for today. Caring for tomorrow.”, Luxembourg’s mission is to procure and provide the company acts in a responsible manner electricity, natural gas and renewable energies by integrating economic, environmental and to municipal suppliers, industries and private social elements into its operations. It seeks to households. Enovos’ strength is that all these establish lasting and stable relations with all services come from one single source at reliable customers, based on the quality of its service, its and competitive prices. development of new innovative energy products and services and its long-term safeguarding of The company acts as an independent energy energy provision. Enovos’ work is devoted to supplier in the heart of Europe. By its integrated sustainability related to both the environment energy solutions, based on an intelligent and the organisation. combination of energy products and services, Enovos aims at offering a true alternative to its Enovos strives to carry out its activities in customers. the interests of all parties concerned, namely customers, the general public, shareholders, Enovos’ clients are served by an international public authorities and its employees. team of highly motivated and experienced energy experts, fully dedicated to their customers’ needs, with fast response times combined with effective communication.
5 2 Group structure as of January 2011
The energy provider Enovos Luxembourg S.A. including significant shareholding interests in is owned 100% by Enovos International S.A. power generation based on renewable energies, whilst Enovos Deutschland AG is holding Enovos Deutschland AG and Enovos Energie participations in other energy supply companies, Deutschland GmbH, the two German subsidiaries mainly German utilities (“Stadtwerke”). of Enovos Luxembourg S.A., provide natural gas, electricity and energy services for the The Enovos group is headed by Enovos entire German territory. The first subsidiary, International S.A., an operational holding headquartered in Saarbrucken, specialises company headquartered in the Grand Duchy in the segment of municipalities and public of Luxembourg. Besides the activity of energy utilities, whereas the latter one, headquartered providing, the parent company also serves as in Wiesbaden, mainly targets industrial and an umbrella for the management of the grid professional customers. In Luxembourg, Leo S.A. operator Creos Luxembourg S.A. and its German is the preferential contact for Luxembourg-City subsidiary Creos Deutschland GmbH. regarding the supply of electricity and natural gas. The group structure is shown below: Moreover, Enovos Luxembourg S.A. holds several stakes in the energy generation business,
The structure
Enovos International S.A. Other participations
75.43% 100% Creos Enovos Luxembourg S.A. Luxembourg S.A. Other participations
96.88% 10.68% 86.2% 100% 100% Creos Enovos Enovos Energie Deutschland GmbH Deutschland AG Deutschland GmbH Leo S.A.
Other participations
6 3 Key figures for Enovos Luxembourg S.A. (under Lux GAAP)
Key figures Unit 2010 2009
Electricity sales GWh 4,291.0 4,130.7 Natural gas sales GWh 16,055.9 12,923.8 Net turnover (w/o trading) € 772,690,654 769,692,047 EBITDA € 34,175,436 30,084,135 EBIT € 32,702,088 28,131,560 Income from participating interests and from other investments with regard to participations € 50,709,722 98,714,847 Net profit for the year € 68,001,573 118,074,211 Total assets € 537,529,236 410,178,685 Stockholders' equity € 240,197,832 232,234,179 Financial debt € 52,095,008 — Investments in tangible, intangible and financial assets € 154,346,842 25,264,040 Personnel (end of year) Number 109 96
Financial year 2010 starting on 1st January 2010 and closing on 31st December 2010
7 8 4 Corporate governance bodies as at 31st December 2010
Board of Directors of Enovos Luxembourg S.A.
Marco Hoffmann Chairman
Johan Van Bragt Member of the Board of Directors
Luc Diswiscour Member of the Board of Directors
Fernand Felzinger Member of the Board of Directors
Peter Frankenberg Member of the Board of Directors
Henri Haine Member of the Board of Directors
Tim Hartmann Member of the Board of Directors
Guy Lentz Member of the Board of Directors
Jean Lucius CEO and Member of the Board of Directors
Georges Reding Member of the Board of Directors
Gaston Reinesch Member of the Board of Directors
Georges Reuter Member of the Board of Directors
Claude Seywert Vice Chairman
Nico Wietor Member of the Board of Directors
9 5 Message from the Chairman and the CEO
After the merger in 2009, the year 2010 was activities on the entire German market. Thanks Enovos Luxembourg’s first full fiscal year. to the integration of BKW’s activities, tailor- In spite of a timid post-crisis recovery, the made energy solutions aimed foremost at young company successfully completed its industrial and professional customers are now restructuring and concluded the year on a offered throughout the country. Furthermore, positive note. Enovos Luxembourg is proud to the acquisition of BKW enabled Enovos group to have completed its ambitious mission efficiently double its global electricity supply. as planned in an economic environment still containing plenty of uncertainties. On the highly strategic French market, activities are also developing promisingly, essentially for industrial customers. In 2010, we were able to A future-oriented strategy close to the client sign numerous contracts for natural gas supply and over the course of 2011, the sale of natural The past fiscal year has been marked by the gas will double in France. Since January 2011, integration of participations in very diverse Enovos Luxembourg also supplies its first French sectors, from the production to the supply of customers with electricity. energy. Thus, after Enovos group took over Luxgaz Distribution S.A. in May 2010, Enovos Belgium plays an important part in our growth Luxembourg is now the most important energy strategy. Whereas in 2010, Enovos has prepared supplier in Luxembourg providing both electricity its entry in the Belgian market, the company will and natural gas to all customer segments on the supply its first Belgian customers with natural entire national territory. With a future-oriented gas and electricity in 2011. company strategy close to the end consumers, Enovos Luxembourg caters for a vast clientele: residential, professional and industrial. Focussing on renewable energies
In December 2010, in the context of the For the coming years, our investment integration of the gas and electricity activities programme contains a substantial financial of the City of Luxembourg into the Enovos plan for renewable energies. Thanks to this Group, Enovos Luxembourg S.A. has signed important commitment, Enovos contributes an agreement with the City of Luxembourg to the reduction of CO2 emissions, which are whereby Enovos Luxembourg S.A. will acquire responsible for global warming. Regarding all the shares of Leo S.A., Luxembourg-City’s the respect of the environment and according gas and electricity provider, as of January 2011. to our guiding principle “Energy for today. This additional client portfolio enables Enovos to Caring for tomorrow.”, we have carried strengthen its position as a competitive energy out several innovative projects. In a great provider in the Grand Duchy of Luxembourg and number of European regions, Enovos profits the Greater Region, while guaranteeing reliable from favourable climatic and topographic and flexible supply in a free market. characteristics to develop wind power, photovoltaics and biogas. In March 2010, Enovos Luxembourg participated in the creation Breaking through on the international markets of the company Aveleos, headquartered in Luxembourg, which is responsible for the To strengthen its presence on the international development and the implementation of markets, Enovos has realised several ambitious photovoltaic production plants in Italy and projects abroad. In Germany, Enovos Luxembourg France. Whereas in France, Enovos Luxembourg took over the electricity provider BKW Energie operates the wind park “La Benâte” in Charente- GmbH in October 2010 and thus increasing its Maritime, in Germany the company has invested,
10 Marco Hoffmann Jean Lucius Chairman CEO & Member of the Board of Directors
through its subsidiary Enovos Deutschland, in a continue its expansion programme in a biogas park in Merzig/Ballern (Saarland) as well free European market undergoing radical as in two photovoltaic parks near Ahorn (Baden- transformation. In a very short time span, Württemberg). The favourable winds coming from our new company has become a benchmark the Baltic Sea have incited Enovos Luxembourg to economic partner, who strives to find the right partner up with the wind park “Bard Offshore 1”, balance between profitability and environmental located to the north-west of Borkum. and social concerns. To achieve this goal, all our teams take up the new challenges and do their utmost to provide our customers with Social responsibility a high-quality and favourable energy supply. For electricity, it is essential to have a well- Our social responsibility and our contribution balanced energy mix consisting of different to sustainable development also result in the energy sources. Concerning natural gas, the creation of our own foundation which is under diverse offer consists of a supply guaranteed the aegis of the “Fondation de Luxembourg”. by medium- and long-term contracts, which are According to its motto “Caring for tomorrow”, completed by spot market purchases. the “Fondation Enovos” promotes and develops renewable energy sources and supports science To remain competitive, Enovos Luxembourg will projects in the areas of energy in general extend amongst others its upstream activities and renewable energies in particular. Beyond linked to the production of electricity as well its primary function as an energy provider, as to a possible participation in gas fields. Enovos Luxembourg acts responsibly by Enovos Luxembourg does however not forget placing its actions at the service of mankind its fundamental mission: the reliable supply of and the communities, while caring about future natural gas and electricity to better meet its generations. Moreover, the “Fondation Enovos” customers’ needs at all times. In the coming supports human social projects in order to help years, all the conditions are thus fulfilled for people in need and to offer them perspectives Enovos to succeed in becoming an indisputable for the future. international actor.
We would like to express our gratitude to Remaining competitive on a free market all employees who through their continuous engagement allowed Enovos Luxembourg S.A. After a successful merger and the profitable to achieve these outstanding results in terms of fiscal year 2010, Enovos Luxembourg will integration, growth and financial success.
11 6 Highlights in 2010
January New favourable standard electricity tariffs for residential and professional customers in Luxembourg launched as of 1st January 2010 with a significant price reduction of approximately 10%.
Completed acquisition of 80% of the biogas plant Energiepark Trelder Berg on 4th January 2010.
February First Enovos appearance at the E-world energy & water 2010 (leading energy fair in Europe).
March Signing of a contract between Enovos Luxembourg S.A. and Avelar Energy Ltd. (based in Zurich) to form a joint venture under the name “Aveleos S.A.”. The object of this new company, which is headquartered in Luxembourg, is to develop, operate and bring to the market photovoltaic plants in Italy and France with a total capacity of up to 95 MW.
May Integration of Luxgaz Distribution S.A. into the Enovos group on 21st May 2010. Their major customers are residential and professional clients as well as several large customers.
June Enovos decided to acquire a stake in the “Bard Offshore 1” wind park (90 km north-west of Borkum, Germany) equivalent to 30 MW of capacity. The stake was acquired via Südweststrom Windpark GmbH & Co KG, of which Enovos Luxembourg S.A. will hold slightly more than 10%.
Enovos Luxembourg S.A. further extended its efforts in renewable energy projects and signed a purchase contract for a 100% participation in the wind park “La Benâte” (France). These 6 wind turbines with 2 MW per unit produce about 32 GWh of power and supply more than 8,000 households with green energy.
Start of construction work for the first biogas plant in Saarland and Rhineland-Palatinate (Merzig/Ballern) with a capacity of 550 Nm3 of biogas per hour. Enovos Deutschland AG holds 39%, E.ON Bioerdgas GmbH 51% and the remaining 10% are shares of the Stadtwerke Merzig GmbH.
12 August First electricity sales contract in France
October The delivery period of the new long-term gas contract for Luxembourg was launched in October. Furthermore, market communication with its supplies changed into an hourly nomination system done by the commercial dispatching of Enovos Luxembourg duly setup for this purpose and starting operations from 1 October onwards.
Enovos Luxembourg and the Swiss energy company BKW FMB Energie AG signed a contract relating to the acquisition of their German sales company BKW Energie GmbH. With about 30 employees and a portfolio of 4 TWh electricity sales, Enovos Luxembourg enlarged their German business activity from 1st January, 2011.
December Takeover of 100% of Leo S.A. by Enovos Luxembourg S.A. and the integration of the gas and electricity grid of Luxembourg-City into Creos Luxembourg S.A.
First natural gas sales contract in Belgium
Recent developments Enovos supports Luxembourg’s new international professional cycling team with a three-year sponsorship agreement starting 2011: Enovos will become involved in the world of professional cycling as sponsor of Team Leopard Trek.
Presentation of the company’s new “product toolbox” for gas, electricity and energy services at the E-world energy & water 2011.
13 14 II Management Report
1 The economic and energy environment
The recession in Europe has been severe, but in As a consequence of the industrial recovery, most nations, recovery in 2010 was quite robust energy consumption has followed this same too. Overall growth in the European Union is trend throughout 2010, both in electricity and in expected to reach 1.8% (European Commission) natural gas. in 2010. However, this growth has essentially been fuelled by the various macroeconomic On the currency markets, 2010 was characterised recovery plans coupled with the continuous by a high volatility of the euro versus the dollar; positive developments in the emerging the exchange rate euro/dollar was 1.43 at year countries, which were less affected by the crisis. opening, sharply decreasing to below 1.20 in This ongoing export-driven industrial rebound June, recovering to 1.42 in October and closing is in line with the continued strong dynamics of at 1.33. global growth and trade. In 2010, low volatility was observed for electricity Growth momentum within the Grand Duchy prices which remained at a low past-crisis was even stronger: In total, Luxembourg’s GDP level throughout the year, whereas oil prices should rise by about 3.2% (STATEC) in 2010 after continued their steady increase since 2009. The falling by 3.7% in 2009. This strong performance market nonetheless expects rising prices for has essentially been driven by higher direct both gas and electricity in the medium term. investments of 13.6%. Increases in exports and imports remain almost balanced with 16.2% respectively 16.7%.
Foreseeably, real Luxembourgian GDP growth will decelerate somewhat in 2011 and will slightly reaccelerate in 2012, following the general trend of the EU, while base scenarios of main statistic institutions remain in the neighbourhood of 3%. Nevertheless, both global and European economic outlooks for the coming years remain very uncertain: existing fears of a double-dip recession and burgeoning governmental budget deficits make a medium-term outlook unusually hard to predict with confidence.
In Luxembourg, as in most countries within the Euro zone, the engaged recovery since mid- 2009 has not yet allowed to reach the GDP level existing before the crisis. Industrial production has recorded five consecutive quarters of growth since the 2nd quarter of 2009, a movement shared by the majority of industrial branches. Available estimates however announce a decline in production from September 2010 onwards.
15 Evolution of electricity base prices
EUR/MWh
100
90
80
70
60
50
40
30 12.2010 12.2007 12.2008 12.2006 12.2009 03.2010 09.2010 06.2010 03.2007 09.2007 06.2007 03.2008 03.2009 09.2008 06.2008 09.2009 06.2009
■ GER Base 2011 ■ GER Base 2012 ■ GER Base 2013
Natural gas prices generally follow the trend in about 75% in 2010, hence closing almost the the moving average for oil prices over several gap that had opened up between long-term, months. Thus the changes in the oil market oil-indexed and short-term spot gas prices. In are reflected in a rather muted way. After a 2011, the precarious budget situations of several sharp decrease in prices at the end of 2008, European countries could weigh on the euro, an important decorrelation occurred in 2009 and oil prices quoted in dollars could have an between long-term sales contracts and spot increasingly adverse effect on energy prices. The prices. Since the beginning of the economic political instability in the Arabian World could downturn, physical gas demand has been cut even enhance this effect with additional pressure back, leading to sharp falls in spot gas prices in on oil prices and more specifically for natural Europe throughout 2009. Due to a reduction of gas, reopening the gap between long-term and overcapacities, spot gas prices have risen by spot gas prices.
16 Evolution of brent versus natural gas spot prices
EUR/MWh USD/bbl
45 160
40 140
35 120
30 100
25 80 20 60 15
40 10
20 5
0 0 01.2010 10.2010 07.2010 10.2007 01.2008 01.2007 01.2009 01.2006 10.2008 07.2007 04.2010 10.2006 10.2009 07.2008 07.2009 07.2006 04.2007 04.2008 04.2009 04.2006
■ Brent 1st nearby month USD/bbl ■ Zeebrugge 1st nearby month EUR/MWh
In 2010, overall electricity consumption in For natural gas, the total consumption in Luxembourg totalled 6,690 GWh, an increase of Luxembourg for 2010 was 15,459 GWh, an 8.0 % compared to the previous year. The annual increase of 7.5% compared to the previous consumption in our neighbouring countries has year. In our neighbouring countries, the annual been: Germany +4.0 %, Belgium +4.8 % and variations were: Germany +4.2%, Belgium +10.9% France +5.5 %. and France +11.8%.
17 2 Sales of Enovos Luxembourg S.A.
Overall electricity sales have been as follows:
GWh 2010 2009 Change %
A. Final customers 3,335.2 3,170.1 5.2% Large enterprises 1,126.9 1,007.2 11.9% Small and medium enterprises 1,264.3 1,231.1 2.7% Residential customers 699.7 690.7 1.3% Professional customers 244.3 241.1 1.3% Power plants 0.0 0.0 0.0% B. Wholesale customers 678.8 960.6 -29.3% Public utilities 553.9 839.6 -34.0% Grid operators 124.9 121.0 3.2% Other counterparts 0.0 0.0 0.0% C. Intercompany 276.9 0.0 >100%
Total 4,291.0 4,130.7 3.9%
Especially large enterprises suffered under the Due to the recovery in 2010, electricity sales to this economic crisis in 2009, with impact on their customer segment have improved by 11.9%. workload resulting in short-time work. The supply decrease to public utilities is mainly a result of their more diversified purchasing portfolio.
Overall natural gas sales have been as follows:
GWh 2010 2009 Change %
A. Final customers 10,000.5 7,420.0 34.8% Large enterprises 3,345.2 3,092.8 8.2% Small and medium enterprises 1,453.9 877.3 65.7% Residential customers 0.0 0.0 0.0% Professional customers 0.0 0.0 0.0% Power plants 5,201.4 3,449.8 50.8% B. Wholesale customers 5,718.5 5,503.8 3.9% Public utilities 5,718.5 5,503.8 3.9% Grid operators 0.0 0.0 0.0% Other counterparts 0.0 0.0 0.0% C. Intercompany 337.0 0.0 >100%
Total 16,055.9 12,923.8 24.2%
Besides the economy’s recovery, the acquisition Due to the strong demand of our subsidiary of new customers (mainly in France) leads to Twinerg, sales to power plants topped the 2010 higher sales volumes (+24.2%). sales volumes significantly (+50.8%). For wholesale customers, the increase of 3.9% is mainly linked to the cold winter period 2010.
18 Marketing activities
According to its guiding principle, “Energy for Airport Escher Kulturlaf”, the “BGL BNP Paribas today. Caring for tomorrow.”, Enovos is aware Luxembourg Open” in tennis, the “Olympiadag" in of its responsibilities towards current and future Diekirch, the “World Balloon Trophy”, the “COSL generations. In its customer relations, Enovos feels Spillfest” and the “Relais pour la vie” have also committed to its social responsibility. been supported.
Customer relations Different events in mobility (CNG an e-mobility) Three editions of the customer magazine “Watt’s have been organised, such as a test day for CNG Life” were distributed to every household in cars and the presentation of the Peugeot i-on in Luxembourg in 2010. Sanem.
More and more customers are turning to Enovos’ “activa naturstroum”, a second green electricity energy consulting services (“energieberodung”). product beside “nova naturstroum”, has been presented and launched in 2010. In cooperation with the municipal governments and local organisations, sessions were organised Activities for teenagers and children in different municipalities to raise awareness on “Mega Energie Tour”: several schools visited efficient energy use and provide information on different electricity production sites in “nova naturstroum”. Luxembourg.
On “fonds nova naturstroum Day”, at Enovos’ A number of events and activities for teenagers head office in Strassen, the 2009 prize winners and children were organised throughout 2010, were awarded for their commitment to the including participation of “Mini-Lënster” in environment. Since its launch in April 2005, the Junglinster, beginners’ courses on electricity non-profit organisation “fonds nova naturstroum” and projects concerning efficient energy use in has received 1,645 requests for grants, 316 of them different schools. in 2010, and has paid out a total of EUR 1,109,250 to projects that are attractive in regard to their MyClimateLux a.s.b.l. promotional, innovative and educational approach The non-profit organisation MyClimateLux was in the area of renewable energy. founded in April 2008 by Cegedel in association with the Public Research Centre Henri Tudor Fairs and Events and the “Agence de l’Energie”, in partnership The different fairs at the LuxExpo in Kirchberg with MyClimate (Switzerland). The goal of this
(Spring Fair, Oeko Fair, Autumn Fair, Expogast, association is to provide monitoring and CO2 International Motor Show) once again enjoyed offsetting services with an eye to easing climate a resounding success with a large number of change. MyClimateLux provides innovative interested visitors. solutions and contributes to the development and use of renewable energy and more energy- The “Energieforum Electriciens” and efficient technology. Several projects were “Energieforum Communes” were great occasions implemented in 2010 with different companies in to intensify the good contacts with the Luxembourg. members of the professional organisations and municipalities and to present new projects in Patronage and sponsorship e-mobilty and photovoltaic installations. As a responsible company, Enovos is aware of its Other well-known events in Luxembourg, such as duty to society, and this is reflected in the level the “Auto vum Joer”, the “Tour de Luxembourg” of its sponsorship of sporting, cultural, social and “Gala Tour de France” in cycling, the “lux- and scientific events and projects benefiting
19 the community. Its maxim “Energy for today. Projects can be initiated by private individuals, Caring for tomorrow.”, reflecting its eagerness local authorities, schools, public utilities, non- for sustainability, perfectly applies to sports, governmental organisations or companies. which at present is a very important pillar of its • Active promotion of research in the fields commitment. of environmental studies and sustainable development by supporting scientific projects Enovos is aware of the positive impact of sports in the field of energy, in particular the area of on the health and balance of young people in renewable energy. particular. For eleven years already, Enovos • Support for social projects, e.g.: Enovos supports has been a partner of the “Comité Olympique projects to help children with behavioural Sportif Luxembourgeois” (COSL), which brings problems (Päerd’s Atelier a.s.b.l.), young cancer together all the Olympic and non-Olympic sufferers and their families (Hëllef fir kriibskrank sports federations. This collaboration enables Kanner a.s.b.l) and sportspeople with intellectual it to support all sports in Luxembourg. And in disabilities (ALPAPS Special Olympics), to Germany, via its subsidiary Enovos Deutschland mention but a few. These projects have been AG, Enovos supports the “Olympiastützpunkt supported by Enovos for several years already Rheinland-Pfalz/Saarland” and the but they were restructured within the setup of “Landessportverband Saarland” in Saarbrucken, the Fondation Enovos. which work in close collaboration with the COSL and also benefit Luxembourg athletes. Among the The ambition of Enovos Luxembourg goes hand major sports events, Enovos has been supporting in hand with the support provided by Enovos the Tour de Luxembourg for some years by Deutschland to young talents in the fields of sponsoring the jersey for the best youngster, the culture, sports and science. Gala Tour de France (cycling), the Escher Kulturlaf (race) and the BGL Open (tennis). B2C sales Fondation Enovos Fondation Enovos was set up in 2010 by 2010 was marked by two significant factors: on Enovos Luxembourg S.A. and is under the aegis the one hand, due to the merger in 2009, by the of Fondation de Luxembourg, a non-profit continuation of commercial promotion actions for foundation. It reflects its founders’ desire to act the new brand “Enovos” to the general public, and as a responsible company for current and future on the other hand by the commercial integration generations, both in its role as an energy provider of Luxgaz Distribution S.A. in May 2010. The and beyond. An independent advisory committee Luxgaz client portfolio contains some 15,000 assesses every project and decides on the points of delivery of natural gas, the majority allocation of resources. Guided by the idea that being professional and residential clients. Enovos the company must be at the service of humankind Luxembourg S.A. thus became the first energy and society, the founders chose to contribute player in Luxembourg to provide a combined to the progress of know-how and technologies dual fuel offer to all customer segments, be they that make sustainable development possible residential, professional or industrial clients, on the and to engage in social projects benefiting the entire Luxembourg territory. most vulnerable members of society who require special support. Regarding standard electricity tariffs, an average decrease of 10% to all standard tariffs on Fondation Enovos thus supports the following 1st January 2010 has been applied. Following a causes: certain stabilisation after the crisis of 2009 in the • Enhancement and development of renewable wholesale electricity market and on the basis of energy sources in Luxembourg and the Greater the energy purchase price for 2011, tariffs applied Region, e.g.: through the nova naturstroum fund, from 1st January 2011 will remain unchanged. Fondation Enovos supports renewable energy It should be noted that there was very little projects that are especially innovative, worthy movement (gain or loss) for this category of of imitation or useful for instructional purposes. clients; electricity sales volumes increased by
20 1.3% in the residential and professional segments doors on 1st March 2010 and in the new customer and 2.7% in the small and medium enterprises service centre in Esch/Alzette, operational since segment, after a resumption of activities in this November 2010. These customer service centres segment following the crisis of 2009. have been implemented across the country to meet the clients’ needs. Regarding standard tariffs in gas, the gas market is mainly characterised by the signing of long- term supply contracts for 15 or even 20 years, Outlook unlike electricity, which is purchased primarily on a short- and medium-term basis on the wholesale For 2011, projects and perspectives are based electricity market. upon four pillars:
Hence, the purchase price of natural gas applied New products to standard gas tariffs for a specific period is Enovos plans to launch a product called “nova based on average prices of petroleum products naturgas”, i.e. a biogas supply. listed in the previous months. As these prices have increased for the period, the purchase price The actual “e.connect” services platform providing and, therefore, the gas standards tariffs applied Internet services for the supply of electrical for 2010 increased linearly by an average of 7.87% energy will be complemented by similar services during the year. for the supply of natural gas, e.g. with the combined invoice by e-mail of electricity and Following the integration of Luxgaz during natural gas bills. the first semester of 2010, a detailed gas sales statistics per category of clients is not feasible for Other products are under review and will be 2010. The global consumption of these customers implemented in 2011; e.g.: a special combined is included in the public utilities segment. As in “dual fuel” offer and an update of the invoice electricity, there was also little movement (gain or layout with more information for consumers. loss) for this category of natural gas customers. Leo S.A. the gas and electricity supplier “e.connect”, the services offered via an Internet The integration of Leo S.A. into the Enovos group platform, has been a continuous success. These is in line with the creation of one important services have been implemented in 2010 by energy actor on the level of the Grand Duchy of offering “green connect”, the most environment- Luxembourg and the Greater Region, with the friendly offer for Luxembourg customers, financial basis for portfolio clients and the know- providing the green energy “activa naturstroum” how required to carve a place of reference in the with zero CO2 emissions at a very competitive free European energy market. price. Leo and Enovos perform a pooling of resources, In 2010, the number of subscriptions to the both at the level of marketing activities and at premium green product “nova naturstroum” was supply level, joining forces and fulfilling the best on the rise: +14% compared to 2009, namely synergy potentials. 6,648 points of delivery for an annual volume of approximately 205 GWh joined on 30th November The daily relationships between end customers 2010. with their Leo energy supplier remain unchanged. Leo is a trademark and a wholly owned entity The growing success of the company’s products and will be the privileged interlocutor for clients and services has also been confirmed by the located on the territory of Luxembourg-City, large number of visits to the customer service while Enovos Luxembourg is the leading energy centres located at the headquarters of Enovos provider for the rest of the country. Luxembourg in Strassen, in the shopping mall “La Belle Étoile” in Bertrange, in the shopping IT projects centre “Cactus” in Ingeldorf, which opened its In order to manage all these integrations in
21 Luxembourg as well as the challenges in new Enovos to secure sales volumes in the electricity markets such as France and Belgium, the sector and to expand its activities to large natural commercial team from Enovos Luxembourg S.A. gas customers on the entire German territory. will be intensively committed in 2011 and over Through this purchase, Enovos group has taken the following years to the development of new on about 30 employees and doubled its electricity IT applications as well as functional procedures sales to a total of 8 TWh/year. related to the energy business. France Sponsoring of the professional cycling team Since 2006, Enovos Luxembourg is a natural gas Leopard Trek supplier in France. So far, French electricity market For the Greater Region and Luxembourg, rules and specifications have not been attractive Enovos is the main supplier of natural gas and for new suppliers lacking production capacity. electricity to a growing international clientele, offering services to industrials, distributors and The Nome law (“new organization of the individual customers. Giving support to this young electricity market”), applicable as of 2011, international team with Luxembourgish roots fits forces EDF to sell up to 25% of its electricity to Enovos’ philosophy of sustainable business well: competitors at a price below current market price. “Energy for today. Caring for tomorrow.” Through this law, the French government intends to increase competition. By giving new suppliers This sponsorship will make Enovos’ name known access to this virtual production capacity in in European countries and especially in the France, the new model will enable them to submit neighbouring markets. This is part of Enovos’ competitive offers for electricity supply. business development strategy, especially in France, Belgium and Germany. All the necessary steps have been taken for Enovos to take advantage of this unique opportunity. Several contracts worth 1.5 TWh of B2B sales electricity have been signed, enabling Enovos to supply new customers starting 2011, some of As anticipated, the pressure of competition is which have also become natural gas customers. intensifying for large B2B customers in Enovos’ This is a confirmation of Enovos’ commercial home markets, i.e. in Luxembourg, Saarland and strategy to offer both natural gas and electricity Rhineland-Palatinate. Pan-European, multisite supply. customers want to be increasingly served by energy suppliers able to supply them in different Belgium European countries. Becoming a natural gas and electricity supplier for final customers in Belgium is a complex Enovos has to develop innovative products and administrative process. Enovos’ supply licence- adapt its offers to the new market requirements. requests have been submitted to the different authorities and the company has so far been In order to follow its customers across the granted the federal and VREG (Flemish Regulator borders, Enovos’ expansion in its neighbouring of the Electricity and Gas market) supply countries is focused on two axes: development authorizations. In parallel, Enovos has started to through acquisition and growth through submit its first supply offers. Natural gas supply innovative products and solutions. contracts have been signed and Enovos’ first delivery to final customers in Belgium will start in Germany September 2011. Enovos Luxembourg S.A. has acquired BKW Energie GmbH and its German sales activities from BKW FMB Energie AG, one of Switzerland’s most important energy companies. The German subsidiary of BKW, which has been renamed Enovos Energie Deutschland GmbH, enables
22 Senior Management of Enovos Luxembourg S.A.
From left to right:
Louis Radermecker Head of Sales (Global Accounts Europe and Large & Multi-Site B2B) Head of Markets Strategy & Sales Development Europe
Carlo Polidori Head of Trading
Daniel Christnach Head of Renewable Energies and Cogeneration
Alex Michels Head of Conventional Energies & Infrastructure
Danny Manso Head of Corporate Communication
Jean-Luc Santinelli Head of Sales (B2C and Small to Medium B2B & B2M) Head of Business IT Coordination & Markets Organisation
Dr. Frank Schmeer Head of Energy Supply
Marc Reiffers Chief Operating Officer
Miguel Marroquin Head of Portfolio Management
State: 1st April 2011
23 24 3 Energy supply
Supply
Recently, the European gas market has improved competitiveness. Moreover, two experienced a substantial change: an oversupply new long-term gas supply contracts serving of low-price gas on the spot market caused a Enovos’ distributors and industrial customers decline in gas market price, which also impacted in Luxembourg came into effect last year. The Enovos’ long-term gas supply contracts. Thus, agreement of a new biogas long-term contract Enovos has implemented a revised price model marks a further milestone in Enovos’ efforts to for the commodity charge in several long-term offer its customers green gas products. supply contracts to lower the risk of a purchase commitment breach. Enovos also successfully operated its own gas storage portfolio in the German gas market, In 2010, Enovos has successfully completed price consisting of two storage spaces located revision negotiations for long-term gas supply in Frankenthal and Epe. On top of securing contracts for the German gas market. Thus, customer supply, the gas storage facilities were the high sales volumes of Enovos Deutschland used for peak shaving and for the participation AG (mainly stemming from recent tender in the external control energy market. of several public utilities from Saarland and Rhineland-Palatinate) result in Enovos being For electricity, Enovos’ supply portfolio is based able to purchase gas volumes at advantageous on long-term contracts and purchases on the conditions. wholesale markets, mainly in Germany and France. Furthermore, Enovos has prolonged one long- term gas supply for the German market. Thus, The electricity provision breakdown by a larger flexibility in price conditions, annual production in Luxembourg has been as follows: volumes and delivery points lead to Enovos’
2010 2009
Import 65.0% 64.9% CCGT 20.4% 21.2% Cogeneration Plants 8.0% 7.5% Hydropower 2.2% 2.2% Windpower 1.3% 1.5% Solar Energy 0.5% 0.5% Biomass Fuelled Plants 1.3% 1.3% Waste Incineration 1.3% 0.9%
25 Portfolio Management (PFM)
In 2009, the Portfolio Management Team was to maximize value from operation. The resulting created as a link between Enovos’ sales and improved commodity risk management should procurement activities. Last year, PFM played a provide additional growth opportunities. During vital role in providing attractive, sustainable and 2010, PFM has developed a variety of complex profitable pricing conditions to Enovos’ sales transactions, which allowed the group to take operations in Luxembourg, France and Germany. advantage of those assets in its portfolio, which The diversification of sources, counterparts and under normal circumstances would have remained transit routes, as well as the participation in unexplored, thus helping Enovos gain strength complex derivative transactions and market trend and resilience. speculation led PFM to optimise procurement and to secure the supply of Enovos’ energy portfolio. Some of PFM’s major achievements in the past year were the calculation of Enovos’ PFM’s chief responsibility is the optimisation biggest hedge transaction to date, an increase of Enovos’ energy portfolio base. This involves in profitability of some of the company’s a number of underlyings ranging from power cogeneration businesses and the successful and gas to oil, oil products and coal, along with implementation of a new procurement model for forwards, plain vanilla swaps, options, best-of the Luxembourgish gas portfolio involving new structures and volatility swaps, to name but a contracts, new routes and new challenges. As few. Thus, PFM’s principal role in 2010 was the Enovos also acquired numerous retail businesses management and exploration of the opportunities over the past 12 months, PFM was in charge of embedded in the commodity and procurement- setting up the processes and communication to-sales portfolios. channels to suitably integrate them into the Enovos model. The fact that Enovos’ customers have become more complex, ever asking for novel and pioneering solutions regarding their energy Trading quotation requests, led the company to increase its reputation through its Sales and Portfolio Enovos Trading guarantees the market access Management teams. Last year’s success, especially for the whole group and is responsible for the in spite of difficult market conditions, also execution of all transactions on the wholesale contributed to Enovos’ rising repute. In regard market (over the counter and on exchanges) for to sales operations, Enovos PFM teamed up with own use, third parties and proprietary trading: sales organisations in order to keep a significant electricity, natural gas, coal, crudes, CO2 emission market share, particularly in the gas retail business quotas as well as financial derivatives such in its traditional region, while expanding to new or as swaps, options and spreads. In addition, lower-presence markets, such as the French PEG operational sales and portfolio management North and South or the EGT L-Gas in Germany. In activities are actively supported by this unit. the latter, Enovos has successfully and significantly increased and acquired sales volumes by creating The department has continued to develop the a competitive gas portfolio, which profited from cross-commodity trading floor where it trades opportunities arisen from strained and highly with more than 60 counterparts and is present on competitive market conditions. most European Commodity Exchanges as well as on the following physical power markets and gas Enovos’ centralised approach to portfolio hubs in Germany, France, Belgium, Netherlands, management combines PFM’s integrated market Austria and Luxembourg. view of all markets and underlyings with their expertise and creativity to devise tailor-made The spot trading is performed on a daily basis solutions for customers. PFM’s procurement and (7/7). Market prices are provided both internally, optimisation strategy also enables Enovos for sales and portfolio management departments,
26 and externally, for industrial customers or Enovos Trading manages supply and production distributors. portfolios for third parties as a service provider: typical clients are distributors or large industrial Enovos Trading is also responsible for the customers. The offer includes structured supply execution of all financial hedging transactions to and sale of electricity, sales support for making cover purchase and sales exposure in formula- offers to large customers, gas and derivatives indexed contracts. Those products are mostly on the forward markets or exchanges, daily based on oil, coal and gas indices and can also consumption or production forecast, risk require hedging foreign exchange exposure. management and daily nomination of the load volumes to the respective grid operators. In addition to daily power and gas load forecasting as well as day-ahead power scheduling on the At the end of 2010, the trading department has different power grids, a commercial dispatching taken ownership of the management of the open has been set up in 2010, taking care of the short- contracts of Leo and BKW and the respective term intra-day optimisation of the company’s portfolios have effectively been integrated in the gas portfolios in Luxembourg and France, existing energy data and portfolio management including intra-day nominations of the existing gas systems. During the year 2010, the traded volume contracts in a merit order during a 2.5 shift per amounted to 18.7 TWh of electricity and 12.4 TWh day, 365 days a year. All those activities have been of gas. successfully implemented in professional systems.
In 2010, with the help of the legal department and the credit manager, multiple supply contracts (Master Agreements such as EFET and ISDA) have been negotiated with counterparts to face the requirements of our group in terms of physical and financial transactions in the gas and electricity market.
27 x x 4 Conventional energies and infrastructure
The strategy of Enovos is to have a balanced in Germany. Enovos plans to build, own and mix between procurement and own energy operate a plant of a capacity of 430 MW, with production. With a rapidly increasing portion operation commencing in 2014 at the earliest. produced by renewable energies, energy A contract was signed with a general planner supply faces a major problem during night- in order to start the permission and purchase time or windless periods. The energy then processes. Detailed discussions with possible has to be produced by conventional power EPC contractors and possible operation and plants, or energy from large storage plants. maintenance operators also took place, allowing That is why Enovos is developing and investing Enovos to have a detailed view on the market. in CCGT projects, which are a highly flexible power production with fast start-up or shut- Development of CCGT plants will keep a high down response times. As for the storage of importance in the European generation portfolio the electrical energy, which is more and more due to the fact that: important in today’s electric power production portfolio, Enovos participates in the extension of • CO2 emissions will play an important role, thus the SEO M11 project. putting pressure on old power plants with higher emissions (new power plants must take older power plants out of the market). Current projects Europe needs new more efficient power plants; coal power plants face enormous problems Extension of the SEO pumped storage plant – regarding acceptance from the population, new machine 11 thus their realisation probability will tend With an installed capacity of 1,100 MW, the towards zero. pumped storage plant in Vianden, owned and operated by “Société Electrique de l’Our” • Further extension of the European copper- (SEO), is currently one of the largest of its kind plate will still not be accomplished in the in Europe. With an increased demand for peak near future. Hence, there is an increased need power due to a higher proportion of renewable for reserve capacity by conventional power power production in the total power mix, the production due to an increase in renewable possibility was analysed to raise the installed power production. capacity by 200 MW to 1,300 MW by means of an eleventh machine. • Increased gas capacities on the market, due to new pipeline projects (Nordstream, In this context, Enovos took the opportunity to Nabucco etc.) and less consumption of existing participate in the investment and acquired the customers, will supply enough gas to the option to use 100 MW of capacity. The contract market. between Luxembourg Government, SEO, RWE and Enovos Luxembourg S.A. was signed on However, despite all these facts, the economical 18th August 2009. justification for CCGT plants is at the present moment quite difficult as gas prices are still very The construction and extension works are high and power prices still very low. progressing according to schedule and the commissioning is foreseen for the second Enovos will continue the development of its quarter of 2013. CCGT projects in Germany and in France, where the application of the “loi Nome”, which CCGT development project generates additional revenues, favours the In 2010, Enovos continued the development of investment in peak power production units. its project for the construction of a CCGT plant
30 5 Renewable Energies & Cogeneration
In 2010, the Renewable Energies & Cogeneration The investment in the 12 MW onshore wind park Department has continued its development and “La Benâte” located in Charente-Maritime was investment strategy focussing on production finalized in spring 2010 and the 6 wind turbine assets located throughout Western and Southern generators were commissioned in June 2010. Europe. Due to its favourable location at only 30 km from the Atlantic Coast, this onshore wind farm While onshore wind, biogas and biomass is expected to produce up to 39 GWh of electric opportunities in Germany and France continue energy injected into the French distribution grid. to be attractive targets for investors, the decision of the German government to drastically Since May 2010, construction works of the reduce the feed-in tariff for open land and biomethane plant in Merzig are in progress. building integrated solar plants in Germany The plant is the first in the region, which cleans had an immediate impact on the department’s the gas and injects it into the natural gas grid. photovoltaics strategy. It was therefore decided Commissioning is scheduled for May 2011 and to look actively at opportunities in Italy, where regular operation will begin in early summer. the high guaranteed power purchase price for Bioenergie Merzig GmbH is a joint venture energy produced from photovoltaic plants in between E.ON Bioerdgas GmbH, Stadtwerke combination with high insolation rates in Southern Merzig GmbH and Enovos Deutschland AG. Italy generate high returns for investors. Enovos holds 39% of the shares.
A joint venture between Enovos and the Swiss The good performance of the “Energiepark group Avelar Energy was set up with the Trelder Berg” biogas plants, of which Enovos objective to develop, build, operate and divest took an 80% stake in late 2009 was encouraging up to 95 MW of photovoltaic capacity in Puglia the company to a couple of investments to and Basilicata between 2010 and 2013. At the further reduce substrate input needs and thus end of 2010, the development and construction improve overall yield, and valorise process of some 40 plants of 1 MW each was completed, residues as high-quality fertilizers. the remaining being invested and built up in 2011. Like in 2008 and 2009, unfavourable Aside the Aveleos joint venture, Enovos acquired meteorological conditions in 2010 also impacted 11 turnkey photovoltaic plants of 1 MW each the onshore wind production of the three in the same region. The expected total annual wind parks located in Luxembourg (Gemeng power production amounts to roughly 14 GWh. Hengischt, Kehmen-Heischent and Burer Bierg) and neighbouring Germany (Windpark Mosberg). In February 2010, Enovos started to analyse the In 2010, these wind parks produced 14% less opportunity to invest in the 400 MW offshore than in 2009 or more than 20% less than in a wind park project “Bard Offshore 1” and decided normal 100% wind year. The hydro power plants in May to subscribe to a capacity of 30 MW in in Ettelbrück, Esch-sur-Sûre and Rosport from this wind farm located in the North Sea, 100 km Soler S.A., of which Enovos holds a 50% stake, northwest from the island of Borkum. Since late produced 39 GWh of electricity in 2010, i.e. 10% 2010, the first 8 wind turbine generators of 5 MW less than in 2009. capacity each are injecting their production into the public grid, while the remaining generators Total renewable energy production in 2010 will be continuously erected and commissioned progressed by 46% from 108 GWh in 2009 to 157 all over 2011. The expected yearly output of the GWh in 2010. In the same period, the installed 80 turbines is 1,600 GWh of green electricity net operating capacity of the renewable plants while avoiding some 800,000 tons of carbon grew from 64 MW to 92 MW. dioxide at the same time.
31 Renewable energy production
180 160 140 120 100 80 157 60 108 40 61 62 20 43 44 40 3 0 12
Biogas Onshore wind PV Small hydro Total
■ Production 2009 (GWh) ■ Production 2010 (GWh)
Installed net operating capacity
100 90 80 70 60 50 92.2 40 30 64.1 50.8 20 38.8 10 16.9 19.5 19.5 5.0 5.8 0
Biogas Onshore wind PV Small hydro Total
■ ■ Capacity 2009 (MWel) Capacity 2010 (MWel)
32 6 Human resources
Due to the continuation of the post-merger Ongoing professional training integration, coupled with numerous projects in the areas of sales, renewables and upstream, The training budget stayed high in order to the year 2010 has been very challenging for all ensure the transfer of knowledge, know-how and employees. ability, which are part of the integration process, the development of skills and the acquisition In order to support its growth strategy, overall of additional skills. The management and employees of Enovos Luxembourg S.A. increased development of skills remain vital aspects of the from 96 to 109 people (as of 31st December group’s human resources strategy. 2010). The network of internal trainers plays an The group remained active on the employment essential role in facilitating the transfer of market and hired new employees through both knowledge, know-how and transferable skills internal and external recruitment channels as part of the integration and improvement and the participation in various events, such programme. 51% of all training programmes were as the job fair organised by the University of held by internal trainers and 49% by external Luxembourg. In 2010, Enovos Luxembourg S.A. trainers. recruited 21 people on open-ended contracts, of which ten were university graduates. The Human Resources Department would like to congratulate and thank all the qualified and Last year, the total percentage of people working competent employees for their commitment and part-time amounted to roughly 6.80% of Enovos contribution in 2010 and for their devotion to all Luxembourg S.A.’s the total workforce. the important changes.
In total, ten different nationalities are represented at Enovos, i.e. Luxembourgish, German, French, Belgian, Austrian, Spanish, Dutch, Portuguese, Czech and Indian.
33 x x 7 Subsidiaries of Enovos Luxembourg S.A.
Energy suppliers
Enovos Deutschland AG (participating interest: 86.2%)
Key figures (in million Euros) 2010 2009
Total assets 378.8 332.7 Fixed assets 204.1 182.1 Shareholders’ equity (incl. result for the year) 157.3 172.8 Amounts owed to credit institutions − − Net turnover 615.2 645.2 Net profit for the year 37.0 89.6
The core activities of Enovos Deutschland attained. Of this total, 18.0 TWh (preceding year: AG are to supply gas to industrial clients 17.7 TWh) were sold to local distributors, 2.6 TWh and municipalities in Germany and to hold (preceding year: 3.2 TWh) to industrial and participations in German utilities (“Stadtwerke”). power plant customers and 1.1 TWh (preceding year: 0.4 TWh) to other customers. The company Enovos Deutschland AG is primarily a regional realized 268.3 million kWh of electricity sold energy supply company, based in Saarbrucken. in 2010 with an amount of EUR 18.3 million. Of The company’s activities range from energy this total, 189.0 million kWh were sold to local sales and services to managing various holdings distributors and 79.3 million kWh to industrial in other energy supply companies. Until 2009, customers. Enovos Deutschland AG focused exclusively on the natural gas sales, with customers that The results of the participations amounted included regional and local energy supply to EUR 25.3 million (preceding year: EUR companies, as well as industrial businesses and 21.5 million) and thus accounted for 56.3% of the power plants. In 2010, the electricity sales were company’s total earnings before taxes of EUR incorporated for the first time into its business 44.9 million (preceding year: EUR 105.3 million). activities.
In 2010, 21.7 TWh (preceding year: 21.3 TWh) of natural gas were sold and revenues of EUR 589.6 million (preceding year: EUR 638.5 million) were
36 NordEnergie S.A. (participating interest: 33.33%)
NordEnergie is owned in equal parts by Enovos Total electricity sales in 2010 were 2,644 GWh Luxembourg S.A. and the cities of Ettelbruck and (3,209 GWh in 2009). Profit for the period was Diekirch. EUR 10.7 million (compared to EUR 9.0 million in 2009). NordEnergie’s purpose is to provide electricity to the supply points connected to the distribution Wandpark Gemeng Hengischt S.A. grids of the cities of Ettelbruck and Diekirch, (participating interest: 20%) which continue to own their own grids. It serves 7,558 customers. In 2010, net profit amounted to This company has built and operates a wind EUR 0.01 million (in 2009: EUR 0.098 million). farm of eleven turbines in Heinerscheid. The total installed capacity of the farm is 12,200 kW. Steinergy S.A. (participating interest: 50%) In 2010, electricity production amounted to 16.9 GWh, compared to 19.7 GWh in 2009. Profit for Steinfort Energy S.A. (abbreviated as Steinergy) 2010 reached EUR 0.19 million, compared to EUR is owned in equal parts by Enovos Luxembourg 0.36 million in 2009. S.A. and the Steinfort municipality. Wandpark Kehmen-Heischent S.A. The purpose of the company is to sell energy (participating interest: 20%) to the electricity customers in Steinfort. The company serves 2,109 customers. Net profit in This company was created to build and operate 2010 totalled EUR 7,253 (loss of EUR -1,710 in a wind farm in Kehmen, comprising seven wind 2009). turbines with a total installed capacity of 12,600 kW. Luxgas S.à r.l. (participating interest: 90%) In 2010, wind power added 18.3 GWh of electricity to Creos Luxembourg S.A.’s grid, Luxgas S.à r.l. has been created in 2010 to take compared to 21.4 GWh in 2009. The financial over the energy sales activities of former Luxgaz year ended with a profit of EUR 0.18 million (EUR Distribution S.A. 0.52 million in 2009).
The company is operational since 1st May 2010 Wandpark Burer Bierg S.A. and finished the year with a loss of EUR 0.11 (participating interest: 36.25%) million. This company was created to build and operate a wind farm with a total installed capacity of Production 7,200 kW.
Twinerg S.A. In 2010, wind power added 8.9 GWh of (participating interest: 17.5%) electricity to Creos Luxembourg S.A.’s grid, compared to 10.3 GWh in 2009. The financial Twinerg is a combined cycle gas and steam year ended with a loss of EUR 0.12 million (loss turbine that has been operating since 2002. of EUR 0.20 million in 2009).
37 Windpark Mosberg GmbH & Co KG Südweststrom GmbH (participating interest: 100%) (participating interest: 29.3%)
This company was created to build and operate Enovos Luxembourg S.A. has subscribed shares a wind farm in the Saar, comprising six wind in that company, providing it with a 30 MW turbines. The total installed capacity of the farm stake in an offshore wind turbine project of a is 6,000 kW. total capacity of 280 MW. When all shares in the company are subscribed, Enovos Luxembourg Construction of the wind farm was completed in S.A. will hold a stake of 10.7%. financial year 2008, and the farm went online at the start of 2009. Electricity production in 2010 Trelder Berg GmbH reached 8.3 GWh (2009: 9.4 GWh). The loss for (participating interest: 80%) 2010 amounted to EUR 0.35 million (loss of EUR 0.21 million in 2009). Enovos Luxembourg purchased Energie Park Trelder Berg GmbH in January 2010. Energie Soler S.A. Park Trelder Berg is a biogas plant with a
(participating interest: 50%) capacity of 5.1 MWel in the south of Hamburg (Germany). This company was formed in response to the Luxembourg government’s initiative to privatise In 2010, 43.0 GWh electricity were produced the running of state-owned hydroelectric power compared to 43.4 GWh in the previous year. stations. Its corporate purpose includes the The company’s net profit was EUR 0.917 million design and creation of electricity generation compared to EUR 1.15 million in 2009. facilities, based on renewable sources of energy, and the running of these facilities. La Benâte S.à r.l. (participating interest: 100%) As at 31st December 2010, the company operated the hydroelectric stations of Ettelbruck, The wind farm “La Benâte” was acquired in July Esch-sur-Sûre and Rosport. Total electricity 2010. It consists of 6 wind turbine generators production in 2010 was 38.7 GWh (2009: 42.84 with a nominal power output of 2.0 MW each. GWh).The company ended the year with a loss of EUR 0.11 million (compared to a profit of EUR In 2010 a total of 9.6 GWh were produced. The 0.67 million in 2009). company’s net loss was EUR 1.054 million in 2010. Société Electrique de l’Our S.A. (participating interest: 4.46%) Enovos Solar Investment I (participating interest: 100%) “Société Electrique de l’Our” (SEO) owns and operates a 1,100 MW pumping station in the Enovos Solar Investment I (former Avelar Solar Vianden region and hydroelectric power stations Investments S.r.l.) was acquired in October 2010. on the Moselle river. The company consists of 3 parks with a capacity
of 3 MWp, which were completed at the end of In 2010, just like the year before, the company 2010. made a profit of EUR 2.19 million. Works for the extension of the Vianden pumping station by The company’s net profit was EUR 0.278 million means of an eleventh 200 MW machine have in 2010. continued.
38 Enovos Solar Investment II Cegyco S.A. (participating interest: 100%) (participating interest: 50%)
Enovos Solar Investment II (formerly Energetic Cegyco is jointly owned by Goodyear and Source Solar Investments S.r.l.) was acquired in Enovos Luxembourg. It operates an industrial October 2010. The company consists of 8 parks cogeneration plant. with a capacity of 8 MWp, which were completed at the end of 2010. In 2010, its sales of steam and electricity totalled 219,381 tons and 61.90 GWh respectively, compared to 168,866 tons and 54.34 GWh in Cogeneration 2009. The company recorded a profit of EUR 0.762 million, compared to a loss of EUR 0.18 LuxEnergie S.A. million in 2009. (participating interest: 60.35%)
LuxEnergie generates and supplies heat, cold Other activities air and electricity in the public, domestic and service sectors, particularly on a cogeneration Aveleos S.A. basis. (participating interest: 59.02%)
Over the course of the year, the company Aveleos S.A. is a joint venture company, which invested EUR 5.11 million. In 2010, the company’s was founded in May 2010 together with the net profit was EUR 3.5 million, compared to Zurich based Avelar Energy Ltd. The aim EUR 3.08 million in 2009. LuxEnergie operates is the development, operation and retail of a total of 40 power stations, which produced photovoltaic power plants. At the end of the 287.9 GWh of heat, 31.1 GWh of cold and year, 15 MW were completed, another 70 MW are 126.9 GWh of electricity in 2010. The company anticipated for 2011. also supplies maintenance services to third-party cogeneration stations. At the end of 2010, the The company’s net loss was EUR 1.401 million in company had 68 employees. 2010.
Ceduco S.A. Energieagence S.A. (participating interest: 50%) (participating interest: 40%)
Ceduco is jointly owned by Dupont de Nemours “Energieagence” continued its activities in 2010, and Enovos Luxembourg. It operates an most notably supplying energy consultancy industrial cogeneration plant. services to individuals, administrations and companies and offering training in the field of In 2010, its sales of steam and electricity totalled energy efficiency for professionals. 99,652 tons and 54.47 GWh respectively, compared to 56,297 tons and 32.37 GWh in As in the past, the company broke even. 2009. The company recorded a loss of EUR 1.476 million, compared to a loss of EUR 1.875 million in 2009.
39 III Annual Accounts of Enovos Luxembourg S.A.
1 Balance sheet as at 31st December 2010
ASSETS Notes 2010 2009 € €
Fixed assets Intangible fixed assets Note 4 Goodwill 892,500 1,211,250 Intangible assets in course of construction 79,322,184 24,886,784 Tangible fixed assets Note 5 Land and buildings 12,470,649 13,389,489 Other fixtures and fittings, tools and equipment 1,065,042 806,646 Payments on account and tangible assets in course of construction − 187,294 Financial assets Note 6 Shares in affiliated undertakings 174,820,776 107,845,734 Loans to affiliated undertakings 11,494,078 − Participating interests 28,569,865 9,962,277 Loans to undertakings with which the company is linked by virtue of participating interests 1,986,677 995,888 Total Fixed Assets 310,621,772 159,285,363
Current assets Note 7 Inventories Raw materials and consumables 683,970 382,512 Payments on account 1,336,473 1,023,185 Receivables Trade receivables - becoming due and payable within one year 119,025,357 158,064,993 - becoming due and payable after more than one year − − Amounts owed by affiliated undertakings - becoming due and payable within one year Note 8 40,719,863 54,441,358 - becoming due and payable after more than one year − − Amounts owed by undertakings with which the company is linked by virtue of participating interests - becoming due and payable within one year 14,608,966 9,988,902 - becoming due and payable after more than one year − − Other receivables - becoming due and payable within one year 20,740,621 8,068,237 - becoming due and payable after more than one year − − Cash at bank, cash in postal cheque accounts, cheques and cash in hand Securities 2,671,014 1,146,914 Cash at bank 8,504,296 9,500,242 Total Current Assets 208,290,560 242,616,343
Prepayments and accrued income Note 9 18,616,904 8,276,979
Total Assets 537,529,236 410,178,685
The accompanying notes form an integral part of the annual accounts.
40 LIABILITIES Notes 2010 2009 € €
Shareholders' equity Note 10 Subscribed capital 103,800,000 103,800,000 Share premium 27,603 27,602 Legal reserve 7,237,133 1,333,423 Other reserves 61,100,000 1,600,000 Profit or loss brought forward 31,523 7,398,943 Profit or loss for the financial year 68,001,573 118,074,211
Total Shareholders' equity 240,197,832 232,234,179
Provisions for liabilities and charges Provisions for pensions and similar obligations Note 11.1 4,500,226 4,441,134 Provisions for taxation Note 11.2 155 155 Other provisions Note 11.3 38,019,938 12,104,082
Total Provisions 42,520,318 16,545,371
Liabilities Trade creditors - becoming due and payable within one year 126,756,567 121,422,266 - becoming due and payable after more than one year − − Amounts owed to affiliated undertakings - becoming due and payable within one year Note 8 73,223,029 21,482,220 - becoming due and payable after more than one year Notes 11.2, 14 18,419,227 9,239,227 Amounts owed to undertakings with which the company is linked by virtue of participating interests - becoming due and payable within one year 5,907,151 3,734,993 - becoming due and payable after more than one year − − Tax and social security Tax 3,332,221 3,837,815 Social security 23,374 −
Total 227,661,568 159,716,520
Accruals and deferred income Note 12 27,149,519 1,682,615
Total Liabilities 537,529,236 410,178,685
The accompanying notes form an integral part of the annual accounts.
41 2 Income statement for the year 2010
from 1st January to 31st December
Expenses Notes 2010 2009 € €
Supplies a) Cost of sales 711,426,941 712,379,202 b) Other external charges 19,885,824 20,973,838 Staff costs Note 13 a) wages and salaries 8,130,103 6,785,468 b) Social security costs 837,431 689,182 c) Pension plans 546,191 349,023 Value adjustments in respect of tangible and intangible fixed assets Note 14 1,473,348 1,952,575 Net value adjustments in respect of current assets Note 7.2 1,107,826 1,630,556 Interest and similar charges a) with regard to affiliated undertakings − − b) other interest payable and similar charges 275,951 47,531 Extraordinary charges Note 19 33,543,167 − Tax on profit from ordinary activities Note 15 8,980,062 8,900,186 Profit for the financial year 68,001,573 118,074,211
Total Expenses 854,208,417 871,781,772
The accompanying notes form an integral part of the annual accounts..
Income Notes 2010 2009 € €
Net turnover Note 16 772,690,654 769,692,047 Other operating income 3,095,120 2,148,427 Income from participating interests a) with regard to affiliated undertakings Note 17 48,858,340 95,788,712 b) other income from participating interests − − Income from other investments and loans forming part of the fixed assets a) with regard to participations Note 17 1,851,382 2,926,135 b) other income − − Other interest and similar income a) with regard to affiliated undertakings 253,338 7,530 b) other interest and similar income 206,506 167,991 Write-back of value adjustments to current assets 323,979 1,050,929 Extraordinary income Note 19 26,929,097 −
Total Income 854,208,417 871,781,772
The accompanying notes form an integral part of the annual accounts.
42 Proposed appropriation of net profit
The profit available for appropriation of EUR 68,033,096 includes the net profit for the year of EUR 68,001,573 and the profit brought forward of EUR 31,523.
The board of Directors proposes to the Annual Shareholders’ Meeting to be held on May 10th, 2011 the following appropriation of net profit:
Dividend of 4.28 Euros per share* 20,411,166 Allocation to the legal reserve (5% of net profit) 3,400,079 Allocation to other reserves − Amount carried forward 44,221,851 68,033,096 * Number of shares: 4,768,964
43 3 Notes to the annual accounts
Note 1 - General
Enovos Luxembourg S.A. (“the company”) was to 31st December each year. Enovos incorporated in Luxembourg under the name Luxembourg S.A. accounts are consolidated into of Cegedel Participations S.A. on August 2nd, the Enovos group financial statements. 1993. The company is registered under RCS nr. B 44683. In the context of the below described operations, the company has been renamed Note 2 – Accounting policies Enovos Luxembourg S.A. in 2009. General principles As of January 23rd, 2009, the shareholders of The annual accounts have been prepared in Cegedel S.A and Saar Ferngas A.G. contributed accordance with Luxembourg legislation and their respective shares into Soteg S.A. Soteg S.A. regulations and generally accepted accounting launched a mandatory public offer on all Cegedel principles. S.A. shares not yet in its possession and Cegedel S.A. was delisted after a successful squeeze-out The company improved the presentation for process. A process of restructuring took place 2010 and consequently, comparative figures have thereafter and resulted in a new energy group been reclassified accordingly. named Enovos consisting of the parent company, Enovos International S.A. (formerly Soteg S.A.) Foreign currency conversion and its two main subsidiaries, Creos Luxembourg With the exception of fixed assets, assets and S.A. (formerly Cegedel S.A.) in charge of liabilities denominated in foreign currencies are grid activities and Enovos Luxembourg S.A. converted at the exchange rates in effect at the (formerly Cegedel Participations S.A.) dealing end of the year. Transactions denominated in with energy generation, sales and trading foreign currencies are recorded at the exchange activities. This restructuring has been made with rates of the transaction day. Realized exchange retroactive effect as of st1 January 2009. Enovos gains and realized and unrealized exchange Luxembourg S.A. has a subsidiary, Enovos losses are recognized in the income statement. Deutschland A.G., for the German market and Unrealized exchange gains are not recognized. Creos Luxembourg S.A. has a subsidiary, Creos Deutschland GmbH., for the German grid. Intangible and tangible fixed assets Intangible and tangible fixed assets are In the context of this restructuring, former booked at their acquisition price or at cost and Cegedel S.A. and Soteg S.A. sales activities were are depreciated over their estimated useful contributed to Enovos Luxembourg S.A. against life. These assets are annually reviewed for issuing new shares. Enovos Luxembourg S.A. impairment. acquired 86.2% of Enovos Deutschland A.G. Financial assets The main purpose of Enovos Luxembourg S.A. Shares in affiliated undertakings and is to supply electricity and gas to customers participating interests are recorded in the in Luxembourg and abroad and to perform balance sheet at their acquisition cost. Loans to trading activities. Enovos Luxembourg S.A. also affiliated undertakings and loans to undertakings holds several stakes in the energy generation with which the company is linked by virtue business, including significant interests in power of participating interests are included at their generation based on conventional and renewable nominal value. In case of an impairment that the energies. Board of Directors considers as permanent in nature, value adjustments are recorded to these Annual accounts long term investments to apply the lower value The company's financial year runs from st1 January to be assigned to them at the balance
44 Note 3 – Authorizations sheet date. These value adjustments are not Following the two European directives 2003/54 maintained when the reasons for making them and 55 of 26th June 2003 concerning common have ceased to exist. rules for the internal markets in electricity and natural gas and the laws that transposed these Inventories directives into national laws, namely the laws of Raw materials and consumables are valued 1st August 2007 regarding the organization of at the lower of purchase price calculated on the electricity and natural gas markets, transport the basis of weighted average cost or market and distribution grid management activities have value. Value adjustments are recorded when been legally separated from the other activities the estimated realisable value of stocks is lower of electric or gas power generation and sale. than the weighted average cost. The value All the authorizations have been granted adjustments are not maintained if the reasons for according to this legal framework. recording them have ceased to exist.
Receivables Note 4 – Intangible fixed assets Receivables are recorded at their nominal value. Value adjustments are recorded when there is In 2009, the company acquired the customer a risk that all or part of the amounts concerned bases of two local distributors, the municipalities may not be recovered. These value adjustments of Echternach and Vianden. The acquisition price are not maintained if the reasons for recording was posted as goodwill and depreciated over them have ceased to exist. 5 years.
Provisions for liabilities and charges The company has acquired from SEO S.A. The aim of provisions for liabilities and charges the right to buy 100 MW of power from the is to cover clearly defined charges and liabilities, production of a new turbine to be built at the which, on the balance sheet date, are either Vianden pumping station (see also note 17). A probable or certain but for which the amount or total amount of 35,177,334 EUR has thus been date of occurrence cannot be determined with disbursed as of 31st December 2010. certainty. A review is carried out at year-end to Under a contract signed with RWE related to determine the provisions to be recorded for the a long-term power contract, total advance company's liabilities and charges. Provisions payments for EUR 44,144,851 related to the recorded in previous years are reviewed annually financing of two pulverized coal fired power and those no longer needed are released. plants have been made by the end of 2010 (see also note 20). Net turnover Net turnover comprises sales of gas and Movements for the year were as follows: electricity provided as part of the company's ordinary activities, net of discounts, value- added tax and other taxes directly linked to sales. Trading sales are not included as they are shown net of supplies, which is part of the policy to consider trading as a means to reduce procurement costs.
Income from participating interests Dividend income is recorded when dividends are declared.
45 Computer Goodwill Advance TOTAL TOTAL licences payments 2010 2009 made and new intangible fixed assets
€ € € € €
Gross values at beginning of year 4,752 1,530,000 24,886,784 26,421,536 - Additions during year - - 54,435,400 54,435,400 24,542,049 Transfer of property - - - - 1,879,488 Gross values at end of year 4,752 1,530,000 79,322,184 80,856,936 26,421,536
Value adjustments at beginning of year (4,752) (318,750) - (323,502) - Allowances for year - (318,750) - (318,750) (319,938) Amounts released for year - - - - (3,564) Value adjustments at end of year (4,752) (637,500) - (642,252) (323,502)
Net value at end of year - 892,500 79,322,184 80,214,684 26,098,034
Note 5 – Tangible fixed assets
Movements for the year were as follows:
Land and Other Payments on TOTAL TOTAL buildings equipment, account and 2010 2009 machines tangible and furniture assets in course of construction
€ € € € €
Gross values at beginning of year 22,517,621 3,888,854 187,294 26,593,769 - Additions during year - 353,237 - 353,237 721,991 Disposals during year - (57,970) - (57,970) - Movements of property - 187,294 (187,294) - 25,871,778 Gross values at end of year 22,517,621 4,371,415 - 26,889,036 26,593,769
Value adjustments at beginning of year (9,128,132) (3,082,208) - (12,210,340) - Allowances for year (918,839) (235,759) - (1,154,598) (1,632,637) Amounts released for year (1) 11,594 - 11,593 (10,577,703) Value adjustments at end of year (10,046,972) (3,306,373) - (13,353,345) (12,210,340)
Net value at end of year 12,470,649 1,065,042 - 13,535,691 14,383,429
46 Note 6 – Financial assets
Movements for the year were as follows:
Investments Participating Loan to Loans to TOTAL in affiliated interests affiliated undertakings 2010 undertakings companies with which the company is linked by virtue of participating interests € € € € €
Value at beginning of year 107,845,734 9,962,278 - 995,888 118,803,900 Movement during year 67,968,042 18,914,976 11,494,078 990,789 99,367,886 Energiepark Trelder Berg GmbH 11,900,000 3,980,000 15,880,000 Enovos Generation GmbH 25,000 25,000 Enovos Power Beteiligung GmbH 25,000 25,000 Luxgas S.à.r.l. 42,606,856 42,606,856 La Benâte Energies S.à.r.l. 1,510,525 4,236,680 5,747,205 Enovos Solar Investments I S.r.l. Unipersonale 1,069,880 2,576,934 3,646,814 Enovos Solar Investments II S.r.l. Unipersonale 10,830,781 10,830,781 Aveleos S.A. 18,164,976 985,589 19,150,564 SüdwestStrom WP GmbH 750,000 750,000 Windpark Mosberg GmbH & Co. KG 700,465 700,465 Südweststrom Windpark GmbH 195,519 195,519 NordENERGIE S.A. (140,318) (140,318) Steinergy S.A. (50,000) (50,000) Disposals during year - (307,389) - - (307,389) Luxgaz Distribution S.A. (307,389) (307,389) Value adjustment (993,000) - - - (993,000) Windpark Mosberg GmbH & Co. KG (993,000) (993,000)
Value at end of year 174,820,776 28,569,865 11,494,078 1,986,677 216,871,397
During the year, the company invested in a • As of 31st December 2010, EUR 18,164,976 number of companies active in the production of have been invested in a 59% stake in Aveleos electric power from non-hydro carbonic sources. S.A., which specializes in the construction and The main investments were the following: subsequent sale of power stations.
• 1st January 2010: investment of EUR 11,900,000 In the context of these investments, loans for a 80% stake in Energiepark Trelder Berg totalling EUR 11,494,078 have been taken over GmbH in Germany, which produces electricity from the sellers. out of biogas. • 30th September and 31st October 2010: 90% of Luxgas S.à r.l. have been bought from investment of EUR 1,069,880 and EUR Creos S.A., following the Luxgaz Distribution S.A. 10,830,781 respectively in two Italian solar transaction (see also note 17). producers. A value adjustment of EUR 993,000 has been • 1st July 2010: investment of EUR 1,510,525 in recorded in the participation in Mosberg GmbH, La Benâte S.à r.l., a company which operates a following a new assessment of the company’s wind park in France. future cash flow generating capacities.
47 The company holds the following affiliated undertakings and participating interests (all above 20%, except Twinerg):
Company name Headquarters Proportion Last Shareholders' Of which Net book of capital year-end equity at profit for value held year-end the year 31/12/2010
% € € €
Enovos Deutschland AG Germany 86.20% 31/12/2010 157,269,834 36,985,349 99,771,716 LuxEnergie S.A. Luxembourg 60.35% 31/12/2010 34,460,192 3,502,179 5,213,935 Twinerg S.A. Luxembourg 17.5% 31/12/2010 45,117,372 10,673,620 4,338,137 Wandpark Gemeng Hengischt S.A. (*) Luxembourg 20% 31/12/2010 4,074,992 191,677 636,630 Wandpark Kehmen-Heischent S.A. (*) Luxembourg 20% 31/12/2010 4,058,156 185,172 600,000 Wandpark Burer Bierg S.A. (*) Luxembourg 36.25% 31/12/2010 1,398,216 (123,263) 725,000 Windpark Mosberg GmbH & Co KG (*) Germany 100% 31/12/2010 1,351,542 (353,398) 1,867,083 Steinergy S.A. Luxembourg 50% 31/12/2010 171,005 29,636 50,000 Soler S.A. Luxembourg 50% 31/12/2010 2,481,511 (115,892) 125,000 Cegyco S.A. Luxembourg 50% 31/12/2010 3,184,969 762,253 954,390 Ceduco S.A. Luxembourg 50% 31/12/2010 (2,050,715) (1,500,926) 0 NordENERGIE S.A. Luxembourg 33.33% 31/12/2010 409,420 10,622 100,000 Energieagence S.A. Luxembourg 40% 31/12/2009 472,263 7,415 148,736 Energiepark Trelder Berg GmbH (*) Germany 80% 31/12/2010 1,169,180 917,034 11,900,000 Enovos Generation GmbH (*) Germany 100% 31/12/2010 23,978 (1,022) 25,000 Enovos Power Beteiligung GmbH (*) Germany 100% 31/12/2010 23,992 (1,008) 25,000 Luxgas S.à.r.l. Luxembourg 90% 31/12/2010 16,640,784 (109,679) 42,606,856 La Benâte Energies S.à.r.l. (*) France 100% 31/12/2010 (1,031,122) (1,054,333) 1,510,525 Enovos Solar Investments I S.r.l. Unipersonale Italy 100% 31/12/2010 288,493 24,462 1,069,880 Enovos Solar Investments II S.r.l. Unipersonale Italy 100% 31/12/2010 7,648,550 (147,032) 10,830,781 Aveleos S.A. Luxembourg 59.02% 31/12/2010 29,376,343 (1,401,321) 18,164,976
(*) unaudited figures
48 Note 7 – Current assets
7.1. Inventories As of 31st December 2010, the company owns a gas stock of 28.5 MWh valued at EUR 683,970 (29.9 MWh and EUR 382,512 in 2009). A value adjustment of EUR 301,458 has been recognized in 2010 in the P&L accounts.
7.2. Trade receivables Trade receivables are mainly related to energy sales and trading activities. The value of trade receivables was adjusted as follows: Cumulative total Of which net allocation (amounts released) for the year
31/12/2010 31/12/2009 2010 2009 € € € €
Adjustments to the value of receivables 1,868,578 1,357,522 511,056 1,328,456 Adjustments to the value of securities 893,445 844,350 49,095 302,100
Note 8 – Amounts owed to and owed by affiliated undertakings
Enovos Luxembourg S.A. has entered into a cash pooling agreement with Enovos International S.A. and, as of 31st December 2010, owed a cash amount of EUR 52,095,008 to the parent company, amount recorded under the caption “Amounts owed to affiliated undertakings”. In 2009, Enovos International S.A. owed EUR 41,226,560 to the company, amount recorded under the caption “Amounts owed by affiliated undertakings”.
Note 9 – Prepayments and accrued income
This caption includes the payment of EUR 14,700,000 for the acquisition of BKW Energie GmbH and BKW Balance GmbH in Germany, effective on 1st January 2011 (see also Note 21).
Note 10 – Shareholders’ equity
As at 31st December 2010, the company's subscribed capital was EUR 103,800,000. The capital is fully paid-up and represented by 4,152,000 shares with a nominal value of EUR 25 each.
49 Distribution Appropriation Profit 31/12/2009 of dividends of profit of year 31/12/2010
€ € € € €
Subscribed capital 103,800,000 103,800,000 Share premium 27,602 1 27,603 Legal reserve 1,333,423 5,903,7101) 7,237,133 Other reserves 1,600,000 59,500,0001) 61,100,000 Profit brought forward 7,398,943 (7,367,420)1) 31,523 Profit for the year 118,074,211 (60,037,920) (58,036,291)1) 68,001,573 68,001,573
Total 232,234,179 (60,037,920) 0 68,001,573 240,197,832
1) Decision of the ordinary general meeting of shareholders of 11th May 2010.
Note 11 – Provisions for liabilities and charges
11.1. Provisions for pensions and similar becoming due after more than one year”. obligations The amounts recorded under “Provisions for Under a supplementary pension scheme, Enovos taxation” are residual tax liabilities from prior Luxembourg S.A. has contracted a defined years. benefit scheme for staff members who started In order to point out the long-term nature of the their employment at the company before 1st tax liability, the corresponding amount for 2009 January 2001. The company is committed to pay (EUR 9,239,227) has been reclassified from “due a lump sum at the retirement of each employee. within one year” to “due after more than one The amount reported in the balance sheet is year”. based on the following assumptions: 11.3. Other provisions • retirement age taken into account for financing: The caption “Other provisions” comprises mainly 60 years provisions to cover risks related to energy • yearly discount rate of 4.2% trading and to energy sales. • estimated wage at time of retirement. In 2010, the item also comprises a provision of EUR 30,700,167 related to the finalization of the Actuarial profits and losses are immediately restructuring in 2011 in the context of the Luxgaz recognized in the income statement. Distribution S.A. integration.
In addition, in a defined contribution pension scheme for employees who joined after 1st January Note 12 – Accruals and deferred income 2001, the company pays a contribution to an insurance company that is recorded under This caption relates to derivatives which are to expenses for the year. For 2010, expenses for the hedge operations to be settled in subsequent defined contribution pension scheme amount to years. EUR 189,593 EUR (2009: 72,102 EUR).
11.2. Provisions for taxation Note 13 – Staff costs Enovos Luxembourg S.A. is consolidated for tax purposes with its parent company, the latter The Company’s staff costs include salaries, social being liable for the tax liabilities of the company security costs and the pension plan. Total staff (see also note 13). The tax liabilities of Enovos costs are EUR 9,513,725 in 2010 (2009: EUR Luxembourg are recorded under the caption 7,823,673). 109 people were employed by the “Amounts owed to affiliated undertakings company at the end of 2010 (2009: 96)
50 Note 14 – Value adjustments in respect of tangible and intangible fixed assets 2010 2009 € €
Value adjustments in respect of intangible fixed assets (note 4) 318,750 319,938 Value adjustments in respect of buildings (note 5) 918,839 920,127 Value adjustments in respect of tangible fixed assets (note 5) 235,759 712,510
Total 1,473,348 1,952,575
Note 15 – Tax on profit from ordinary activities
Enovos Luxembourg S.A. is subject to all taxes In order to benefit from the fiscal unity regime, applicable to Luxembourg companies and the the companies concerned should agree to be tax provisions have been provided in accordance part of the fiscal unity for a period of at least five with the relevant laws. financial years. This means that if the conditions laid down in Article 164bis LIR (Income tax As of 2009, Enovos Luxembourg S.A. is part of law) are not met at any time during this five the fiscal unity with Enovos International S.A., year period, the fiscal unity ceases to apply, Cegedel International and Enovos Ré S.A. In the retroactively, as from the first year in which it frame of the fiscal unity, the taxes are recorded was granted. as follows: In accordance with paragraph 8a of the law • Tax expenses are booked in the subsidiaries' dated 16th October 1934 as amended, Enovos accounts as would be the case if no tax unity Luxembourg S.A. will opt for the reduction of the existed; net wealth tax due for the year 2010 by setting • Tax savings relating to a loss-making subsidiary up a special reserve equal to five times the are reallocated to this subsidiary in the same amount of the net wealth tax reduced. Enovos year as the loss arises; these tax savings International S.A. has decided to set up and are recorded as income in the loss-making maintain in its accounts the special reserve for subsidiary; the companies being part of the fiscal unity. • The head of the fiscal unity (i.e. Enovos International S.A.) books the tax provisions on the basis of the consolidated results of the companies included in the fiscal unity.
As the liabilities to tax authorities are generally becoming due after more than one year, it has been decided to reclassify the amounts owed to the parent company accordingly.
51 Note 16 – Net turnover 2010 / € 2009 / €
Electricity sales and accessories for the supply of electricity 363,343,055 404,484,042 Gas sales and accessories for the supply of gas 409,347,600 365,208,005
Total 772,690,654 769,692,047
Trading sales are not included.
Note 17 – Income from participating interests and from other investments with regard to participations
In 2009, the caption “Income from participating Luxembourg S.A. and the subsequent spin-off interests” includes a capital gain of EUR of the sales activities of Luxgaz Distribution 64,696,055 realized from the sale of Soteg S.A. into a new company, Luxgas S.à r.l., Enovos shares to Enovos International S.A. and a capital Luxembourg acquired 90% of the shares of gain of EUR 126,070 from the sale of Surré S.A. Luxgas S.à r.l. from Creos Luxembourg S.A. for to Luxenergie S.A. In 2010, only dividends are an amount of EUR 42,606,856. Any expected included. impact related to the finalization of the restructuring has been provided for as of “Income from other investments with regard to 31st December 2010. participations” includes dividends received from other participations. Note 20 – Off-balance-sheet commitments
Note 18 – Remuneration paid to members of the During 2010, the company concluded a number administration and supervisory bodies of forward contracts for the purchase and sale of electricity and gas as part of its usual operations. Remuneration paid to members of the board The company thus has contracted purchase totalled EUR 286,258 (2009: EUR 40,100). No commitments for electricity and gas amounting advances or loans were granted to members of to EUR 251 million as of 31st December 2010 the administration and supervisory bodies, nor (2009: EUR 301 million). The amount of the was any commitment given on their behalf in above forward purchase contracts include only respect of any form of guarantee. forward contracts signed with counterparties and not contractual purchase commitments with local producers whose prices are not Note 19 – Note on Luxgaz Distribution S.A. known in advance. Enovos Luxembourg S.A. transaction also committed to buy an annual 100 MW band of electricity from a local producer until In connection with the integration of the Luxgaz 31st December, 2015. Distribution S.A. activities into those of Enovos Luxembourg S.A. and of Creos Luxembourg The company is further engaged in spot and S.A., Enovos Luxembourg S.A. sold to Creos forward electricity and gas trading on organised Luxembourg S.A. 39.19% of the shares it held in markets and by private sale. These transactions Luxgaz Distribution S.A. for an amount of EUR are made using different instruments. Among 27,236,486, leading to a capital gain of EUR these instruments are forward contracts, which 26,929,097 for Enovos Luxembourg, posted imply final delivery of electricity and gas, swap under “Extraordinary income”. Following the contracts, which entail promises of payment to merger of Luxgaz Distribution S.A. with Creos and from counterparties in conjunction with the
52 Note 21 – Post-balance sheet events difference between a fixed price and a variable On 3rd March 2010, Enovos Luxembourg S.A. price indexed on underlying products, options or and Avelar Energy Ltd. (based in Zurich), signed other contractual agreements. The fair values of a contract to form a joint venture under the these derivative purchases and sales amounted as name of Aveleos S.A. The objective of this new of 31st December 2010 to EUR -0.4 million and to company is to develop, operate and bring to the EUR -4.2 million respectively (EUR 93.5 million and market photovoltaic plants in Italy and France 90.4 million respectively in 2009). for a total capacity of up to 95 MW in 2010 and 2011. Enovos Luxembourg S.A. has issued a counter- guarantee for Electrabel S.A.'s benefit and in On 6th January 2011 extraordinary general relation to the financing of the Twinerg combined meetings of Enovos Luxembourg S.A. and turbine power plant for a total of EUR 9,945,468 as Enovos International S.A. were held, which at 31st December 2010 (2009: EUR 11,728,750). approved the integration of the energy sales activities of the City of Luxembourg (LEO S.A.) At 31st December 2008, Luxenergie S.A., along with into Enovos Luxembourg S.A. This contribution Aéroport de Luxembourg S.A., signed a long-term was made by issuing new shares of Enovos credit agreement to finance Airport Energy S.A. Luxembourg S.A. to the City of Luxembourg, In the agreement, all parties agree to act as joint which immediately brought these same shares and several guarantors for a total EUR 12,500,000 into Enovos International S.A. against new (2009: EUR 12,500,000). shares of Enovos International. Following this transaction, and after the acquisition of Enovos Luxembourg S.A. took over a commitment additional shares from an existing shareholder, related to a Memorandum of Understanding the City of Luxembourg will have an 8% stake in signed with SEO S.A., RWE Power A.G. and the Enovos International S.A, which in turn remains a State of Luxembourg for the enlargement of the 100% shareholder of Enovos Luxembourg S.A. Vianden pumping station. Enovos Luxembourg S.A. will thus have the right to 100 MW on a virtual In October 2010, Enovos Luxembourg S.A. basis that is half the production of a new turbine to signed an agreement with Swiss energy be built. In addition, under a contract signed with company BKW FMB Energie A.G. to take over RWE related to the financing of two pulverized the sales activities of BKW’s German subsidiaries, coal fired power plants, two instalments will be BKW Energie GmbH and BKW Balance GmbH. paid in 2011 and 2012. In total for the two projects, The transaction will be effective as of 1st January the company has thus committed to pay EUR 92.8 2011, after which the acquired companies will million during the years 2011 to 2013. be renamed into Enovos Energie Deutschland GmbH and Energie Balance Deutschland GmbH Enovos Luxembourg S.A. and Gazprom Marketing respectively. & Trading Limited signed in 2009 a Memorandum of Understanding to study the feasibility of a tolling partnership in a 450 MW combined cycle power station in Germany. Under the proposed tolling partnership, Gazprom would buy the long-term capacity of the plant for gas tolling and would sell power to Enovos Luxembourg under a long-term contract.
53 54 4 Independent auditor’s report
To the Board of Directors Enovos Luxembourg S.A.
Report on the annual accounts or error. In making those risk assessments, the “réviseur d’entreprises agréé” considers internal We have audited the accompanying annual control relevant to the entity’s preparation and accounts of Enovos Luxembourg S.A., which fair presentation of the annual accounts in order comprise the balance sheet as at 31st December to design audit procedures that are appropriate 2010 and the profit and loss account for the in the circumstances, but not for the purpose year then ended, and a summary of significant of expressing an opinion on the effectiveness accounting policies and other explanatory of the entity’s internal control. An audit also information. includes evaluating the appropriateness of accounting policies used and the reasonableness Board of Directors’ responsibility for the annual of accounting estimates made by the Board accounts of Directors, as well as evaluating the overall presentation of the annual accounts. The Board of Directors is responsible for the preparation and fair presentation of these annual We believe that the audit evidence we have accounts in accordance with Luxembourg legal obtained is sufficient and appropriate to provide and regulatory requirements relating to the a basis for our audit opinion. preparation and presentation of the annual accounts and for such internal control as the Opinion Board of Directors determines is necessary to enable the preparation and presentation of In our opinion, the annual accounts give a true annual accounts that are free from material and fair view of the financial position of Enovos misstatement, whether due to fraud or error. Luxembourg S.A. as of 31st December 2010, and of the results of its operations for the year Responsibility of the “réviseur d’entreprises then ended in accordance with Luxembourg agréé” legal and regulatory requirements relating to the preparation and presentation of the annual Our responsibility is to express an opinion accounts. on these annual accounts based on our audit. We conducted our audit in accordance Report on other legal and regulatory with International Standards on Auditing as requirements adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier”. Those The management report, which is the standards require that we comply with ethical responsibility of the Board of Directors, is requirements and plan and perform the audit consistent with the annual accounts. to obtain reasonable assurance about whether the annual accounts are free from material misstatement. ERNST & YOUNG Société Anonyme An audit involves performing procedures to Cabinet de révision agréé obtain audit evidence about the amounts and disclosures in the annual accounts. The procedures selected depend on the judgment of Jeannot WEYER the “réviseur d’entreprises agréé”, including the assessment of the risks of material misstatement of the annual accounts, whether due to fraud Luxembourg, 15th April 2011
55 Enovos Luxembourg Annual Report is published in both French and English. Only the English version may be considered the original; others are simply free translations. We would like to thank all those involved in the preparation and publication of this annual report.
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Rapport Annuel 2010 Enovos Luxembourg
Enovos Luxembourg S.A. 2, rue Thomas Edison L-1445 Luxembourg Postal address: L-2089 Luxembourg Tel.: (+352) 2737-1 Fax: (+352) 2737-6111 enovos.eu
Customer Service Center in Strassen, Bertrange and Ingeldorf, Esch-sur-Alzette Annual Report 2010 Serviceline: 8006-6000 (freephone number) [email protected] Enovos Luxembourg