2020 Business plan Content

Preface ...... 3 Business strategy...... 4 Framework for Aarhus Vand...... 8 Cooperation with Aarhus Municipality...... 10 Annual wheel 2020 ...... 12 The Board...... 13 Purpose, vision and core story ...... 15 Strategic partnerships strengthen us ...... 16 Integrating the UN’s global goals for sustainability ...... 20 Aarhus ReWater – a trailblazer in resource utilisation ...... 22 Implementing a digital transformation ...... 24 New ways of working with water...... 27 Creating a strong corporate culture together ...... 28 Organisation ...... 30 Sharpened focus on financing...... 32 Financial forecast for 2020 ...... 33 Investment and tariffs ...... 34

Lars Schrøder, CEO Aarhus Vand

2 PREFACE Welcome to Aarhus Vand’s business plan

Welcome to Aarhus Vand’s business plan. The 2020, we will therefore experiment with new ways global agenda for sustainable development. At the business plan describes in words and pictures the of collaboration at our existing premises as part of same time, we gain new knowledge to optimise company’s exciting development and expectations the preparations. The new domicile is expected to and develop processes and procedures to the for the year 2020. be placed in Viby – close to the southern motorway benefit of the entire company as well as our custo- exit, Aarhus Light Rail and other public transport. mers. Last but not least, it makes Aarhus Vand a We have established a sound and solid base for the We will also be close to the many water technology more attractive workplace when our activities take further development of Aarhus Vand. This is essen- companies around Aarhus whom we work closely on an international dimension. We would like to tial as the external settings, while being a driver for together with in the Danish Water Cluster. do our share towards ensuring innovation of the development, are constantly changing. Collabo- Danish water industry. ration with our key stakeholders – the customers, New challenges and demands create new business owners and authorities – is rewarding. In 2020, we areas, foster technological development and pro- In addition to a number of new initiatives in 2020, will work towards realising Aarhus Vand’s Strategy mote business activities. The Danish Government’s our business plan also describes Aarhus Vand’s 2025, which is a further development of our current ambition of reducing greenhouse gas emission by mission, vision and objectives under the setting laid strategy. This will improve our capability for shaping 70% in 2030, Water Vision 2025 and the municipa- out for our activities by our owner and Danish legis- tomorrow’s water company. lity’s plans for the climate and solutions for handling lation. It also describes how we organise work, and rainwater on citizens’ own property are all examples it sets out our values and our strategy for the years At Aarhus Vand, we put every effort into creating a of such activities. We are well on the way to meet- ahead. Furthermore, it considers the prerequisites productive and stimulating workplace. We adjust, ing these – and a host of other – challenges. We to fulfilling our vision such as having a competent adapt and develop the organisation to ensure that focus our efforts on how to handle the entire water staff, excellent partnerships and sound finances. we are well prepared for the future – and this is cycle. We develop market-orientated products and exciting and demanding in equal measure. The services to our customers. We establish new part- preparations for a new headquarters which will nerships and strengthen collaboration through the make a great workplace even greater is one of the Danish Water Cluster, Water Partner, Shared and Enjoy your reading. things that we will be focusing on in 2020. We have 3Vand – to mention but a few. been living in rented premises since 2016 when we Best regards sold our share of the domicile in Hasle. With our As one of the largest water companies in Denmark, workshops still located in Eskelund, our employees we feel obliged to support the water industry. We Lars Schrøder are placed at different locations which is not very have extensive knowledge of the operation of CEO, Aarhus Vand appropriate. Since we became an independent various facilities, establishment of organisations, limited company in 2010, we have therefore been analysis, tendering, planning, project management, pursuing the aim of gathering all employees under training and commissioning of facilities. By taking a the same roof. This will improve company cohesion global perspective, we can contribute knowledge and strengthen interdisciplinary cooperation. In and support for Danish exports and help set the

3 Business strategy

Aarhus Vand’s business strategy towards 2025 is a – A sustainable role model for the urban world These strategic scenarios have helped us clarify the further development of our strategy 2020 which, over – A strong position within the fields of energy, climate possibilities available to Aarhus Vand in an unpredictable the past 10 years, has turned Aarhus Vand into one of and the environment world in constant, rapid development. The scenarios the leading companies in Denmark. The 2025 strategy – Utilisation of the growth potential of the UN’s global led to discussions of whether it would make sense to will improve our capability for shaping tomorrow’s water goals for clean water and sanitation, sustainable continue to consider the water supply in isolation in an company. energy and climate action. attempt to meet market demand; whether our custo- mers would continue to consume water the way they Aarhus Vand is a local water company with a national The establishment of the Danish Water Cluster, target- do today and whether water could be digitised. The and global vision. Our 2025 strategy is based on the city oriented efforts in achieving energy and CO2 neutrality answers to these and a long list of other questions offer of Aarhus and the potential of the city and the region. in 2030 and a well-established collaboration with local a number of possibilities for the development of Aarhus The inhabitants of Aarhus generally live longer than authorities in South Africa, India and Ghana on water Vand. Strategy 2025, which is the result of an overall the rest of the Danish population. The city is growing, solutions are all examples of how Aarhus Vand supports consideration of the possibilities offered by the individual and there is an expected growth of 1.4 percent a Aarhus Municipality’s objectives and its business plan. scenarios, is meant to prepare Aarhus Vand for various year towards 2034, at which time there will be about future scenarios by adapting its strategic focus to the 410,000 inhabitants. Aarhus – and the entire Business The global water sector will be facing huge challenges development of the market. Region Aarhus with its 1 million inhabitants – is further- – and opportunities – in coming years, and this is what more experiencing economic growth and an increase in strategy 2025 has been based on. A number of condi- The publication “Water for the future”, which can be the number of employees far in excess of the national tions – in particular climate change, which means a lack downloaded at our website, offers a description of our average. Last but not least, Aarhus Municipality has of water in some places and too much water in others work with the strategic scenarios as a basis for Strategy an ambitious climate action plan, where one of the – may turn the market upside down. At the same time, 2025. objectives is to become CO2 neutral by 2030. We have Aarhus Vand will be making some heavy investments in already succeeded in reducing per capita emission by coming years, in particular the establishment of a new Strategy 2025 40 percent since 2010. resource plant – Aarhus ReWater – which will replace Our ‘strategy house’- represents a framework for the Marselisborg Wastewater Treatment Plant. The project direction in which Aarhus Vand wants to be headed. In other words, Aarhus is a developing, dynamic city, is estimated at about DKK 2 billion. As it appears from the strategy house, the purpose of and Aarhus Vand’s strategy contributes to the further the company is to achieve a healthy planet and healthy development of the city. This applies in particular to the When developing the strategy, we investigated four people through the supply of clean water. Our vision is objectives below: long-term scenarios to help us navigate a complex mar- to create a national platform as a driver for local and – A growing city with a strong business life ket that may develop in various ways. These scenarios global solutions for a healthier water cycle. The four – A sustainable city with a good local and urban are: cross-disciplinary principles of the strategy are: environment – The blue revolution – Customised solutions – A city where everyone is healthy and thriving. – Water powered by knowledge – Partnership formation – The Danish water model 2.0 – Investment in new knowledge The strategy also supports Aarhus Municipality’s busi- – The super water company. – Sustainable action. ness plan towards 2023. This applies in particular to the objectives below:

4 The strategy points out the three most important overall areas in which the company must develop over the coming years. PURPOSE These areas furthermore strengthen the focus of our strategic Aarhus Vand creates health through the supply of clean water – to people and the planet work towards 2025. The strategic focus areas are: – Commercialisation – Innovation – Globalisation.

Commercialisation is about exploiting the commercial oppor- tunities for establishing an independent business arm. Our VISION strategic objectives for commercialisation are: Creation of a national platform – Ensuring risk-assuming capital to increase turnover as a driver for local and global solutions to a healthier water cycle – Establishing a business area with commercial focus and competence – Development expansion – from local to national and inter- CROSS-CUTTING STRATEGIC PRINCIPLES national level. Customised solutions – partnership formation – investment in new technology – sustainable action

Innovation is about accelerating the development of know- ledge and technologies for future water solutions. The strategic STRATEGIC FOCUS AREAS objectives for innovation are: – Forming partnerships and clusters with companies and COMMERCIALISATION INNOVATION GLOBALISATION universities – Creating and developing competitive resource-efficient ser- vices and business models of national and global relevance – Accelerating the technological development to promote new business opportunities. Exploiting the commercial potential Accelerate development of Spread national solutions to the to establish an independent Globalisation is about spreading national solutions to the knowledge and technology for wide world and bring home business arm world and bringing new knowledge home. The strategic objec- future solutions new knowledge tives for innovation are: – Increased focus on sustainable development in support of AN EXCELLENT BASIC SERVICE A PURPOSE-DRIVEN ORGANISATION the UN’s global goals for sustainable development Treatment of wastewater and supply of clean Strengthen the organisation through – Acting as innovator and ambassador for Danish solutions and healthy drinking water – resource-efficiently the development of a company culture – Establishing an international business arm via international and climatically optimised and leadership hubs at strategically important locations. Strategy 2025 - our ‘strategy house’- represents a framework for the direction in which Aarhus Vand wants to be headed.

5 The harbour bath at Aarhus Ø

6 BUSINESS STRATEGY ...

The foundation for these focus areas consists of two parts: ction of digital production and workflows. In operations, we Focus on commercialisation An excellent basic service and a purpose-driven organisation. will continue to focus on reducing our actual operating costs. Profit generation for innovation and development is a central An “excellent basic service” involves treatment of wastewater In relation to capital investment, we will focus on achieving element in our strategy. This means turning Aarhus Vand into a and the supply of healthy drinking water – resource-efficiently the planned 2% efficiency improvements on projects for the market-orientated company. Our understanding of this trans- and climatically optimised. renewal of water and wastewater pipelines in cooperation formation is continuously changing, but the focal point is the with ‘Water Partner’. The following strategic projects support concept of commercialisation. Essentially, we want to be more The focus areas for an excellent basic service are: productivity during the period 2020 – 2025: business-orientated and professional in the way we deal with – Offering customers excellent service with a high degree development and finances, the way we develop new products of certainty – Project portfolio and resource management in and services and, on the whole, the way we create business – Offering the most resource and cost-efficient services in the entire Aarhus Vand for ourselves and others. the entire water cycle – Digitisation – Optimising processes and services to ensure minimal – Asset management. It is an area with room for improvement, and we need to be impact on the climate more conscious of how to generate earnings rather than share The main strategic innovation projects for 2020 are: our know-how without paying special attention to its commer- The focus areas for a purpose-driven organisation are: – The Danish Water Cluster cial value. We simply need more value creation, earnings and – Establishing a productive organisation through digitisation – 3VAND cooperation. capital in order to meet our growth objectives. Up to now, our and leadership development growth initiatives have been funded by enhancing the efficien- – Developing an innovative culture with a commercial Cross-cutting focus areas to facilitate progress cy of operations. In the long term, however, growth must, per mindset We have selected three cross-cutting priority areas which will se, generate more growth – sustainable growth that is – foste- – Establishing a new domicile which promotes a healthy help ensure progress in the three focus areas of commerciali- red in cooperation with others and spread to area where it will working environment with a focus on innovation and sation, innovation and globalisation. They are: prove useful. collaboration. – New products and services – Water knowledge This is why a development programme has been initiated for a Business goals focusing on development and progression – Research and development. number of managers and key personnel which will allow them We attach a business goal to each of the focus areas of com- to reflect on their role at Aarhus Vand and help them create mercialisation, innovation and globalisation. The goals focus These three areas will help to support a cultural change which business within their own area and for the entire company on the development and progression we want to succeed with will bring Aarhus Vand closer to being: while maintaining the good culture the company is known for. and express our focused efforts for 2020. At the same time, – A market-orientated company developing and offering new The programme has strengthened the participants’ ability to they are a reflection of our strategy towards 2025. services engage in change management and create lasting change. – A knowledge company developing and providing know- The method involves action-learning through simulation exer- One of the statutory goals is an annual 2% improvement ledge locally, nationally and globally cises with a strong focus on communication and dialogue as in productivity towards 2025 where operations and capital – A leading company in applied research and development, important means to creating new business opportunities. investment are concerned. In 2020, productivity will mainly locally, nationally and globally. be driven by the development in the IT area and the introdu-

7 Framework for Aarhus Vand

Aarhus Vand is a Danish public limited company owned framework for the realisation and implementation of the Benchmarking by Aarhus Municipality. The purpose of the company is objectives of the individual company. The owner strate- – All-in financial benchmarking and development of to create health through the supply of clean water – to gy establishes directions for Aarhus Vand’s Board and the price cap regulation with demands for efficiency people and the planet. The vision is to create a national Management, and it is the municipality’s way of expres- improvements in relation to operating costs as well platform as a driver for local and global solutions for a sing its attitudes and expectations of the company. as construction costs. healthier water cycle. The impact of the owner strategy on Aarhus Vand has been described in the section “Collaboration with Aar- Increased flexibility The company’s activities comprise rainwater disposal hus Municipality”. – A two-year price cap has been introduced for all – also in climate adaptation projects – production and water companies and a 4-year price cap for the distribution of drinking water, transport and purification State regulation of the water sector best-performing companies of wastewater, emptying of private holding tanks as well The Supply Secretariat (Forsyningssekretariatet) is – A new correction of the cap as safeguarding a balanced and healthy water cycle. charged with regulating the company’s finances accor- – Simplification of the annual control of the price cap We recover, treat and distribute more than 15 million m3 ding to a price cap based on the company’s historical – Extraordinary efficiency gains may form part of the of drinking water and purify more than 30 million m3 of prices, developments in its costs and demands for equity wastewater every year at eight waterworks and four efficiency improvement. In 2015, the Danish Folketing – Abolition of the internal supervision. wastewater treatment plants. The company has 235 passed a resolution to change the regulation of the employees. water sector, which was subsequently implemented. The authoritative role of municipalities The principles of this regulation are: – Unambiguous rules must ensure that the water Aarhus Vand’s income is based on user payments in the – Increased efficiency in the water sector companies become better at handling their tasks and form of connection fees, fixed charges, road charges, – Support and further development of high standards that the municipalities become better at performing variable water and sewage disposal charges and a for the environment, services and security of supply their role as authority. charge for emptying private holding tanks. Under the – Less bureaucratic organising and inspection Danish Consolidated Act on Water Supply and the Act – Better framework for technological development in High demands on the environment, health and on Payment Rules for Wastewater, the income must the water sector. continuity of supply finance the company’s annual production and admini- – New performance-based benchmarking will be stration costs, its financial expenses and investments. The regulation consists of the following points: introduced.

Aarhus Municipality’s owner strategy Efficiency gains Consumers’ complaints filing The owner strategy for the municipally owned compa- – Towards 2020, a minimum of DKK 1.3 billion must – A water complaints board will be established which nies – including Aarhus Vand – makes up the overall be gained. will be handling disputes about the terms of supply.

8 The Supply Secretariat – its role and financing – With the introduction of differentiated tariffs, the companies will pay according to size.

Consolidation – The agreement contains a general description of the incentive to consolidate – In case of mergers, it must still be possible to introduce differentiated tariffs even across municipal boarders.

Technology development – R&D must be promoted with the establishment of a good framework within the Danish water sector – R&D is not part of the company’s main activities.

In addition to this statutory regulation of the water sector, the Danish government’s climate action plan and vision for green transition constitute a framework for Aarhus Vand. For instance, in relation to supporting the goal of reducing the emission of greenhouse gasses by 70% in 2030. And in relation to the Government’s more stringent requirements for the protection of drinking water through the introduction of protection zones around Danish drinking water wells.

Testing the sluice at Dokk1 in Aarhus city

9 Collaboration with Aarhus Municipality

Aarhus Municipality acts as owner, authority and con- The purpose of the owner strategy is to contribute In terms of financial responsibility, the owner strategy tractual party in relation to Aarhus Vand. This involves a to: states, among other things, the following about the differentiated task management for the municipality: – Ensuring consistency between Aarhus Municipality municipality’s expectations of Aarhus Vand: – As the owner: What Aarhus Municipality wants and Aarhus Vand’s policy, visions and plans – A strong focus on financial responsibility and working and expects of Aarhus Vand – Clarifying Aarhus Municipality’s goals for Aarhus towards future-proofing facilities, maintaining and – As an authority: Aarhus Municipality’s supervision Vand, including the company’s Board of Directors developing its financial values of Aarhus Vand’s observance of rules – Ensuring full effect of the resources used within – A continuous focus on development, efficiency – As a contractual party: Aarhus Municipality’s Aarhus Vand’s business area and the greatest pos- improvement and potential synergies beneficial to purchase of services from Aarhus Vand and sible value creation in the company consumers and owners collaboration on projects. – Regulating collaboration between Aarhus Municipa- – Actions organised in a way that will not cause an lity and Aarhus Vand within the framework of the unnecessarily high risk for the owners As the owner, Aarhus Municipality may have interests in rules in force at all times, and in respect of the – A focus on fixed, eco-efficient investment and relation to Aarhus Vand’s strategy, results, risk, capital interests of any other owners. optimisation of its operation structure, corporate governance, corporate culture, – Transparency in key performance indicators for management remuneration and social responsibility. The owner strategy states what it is Aarhus Municipality selected areas in its annual report and at an annual The municipality exerts influence on the company expects of Aarhus Vand and what Aarhus Vand works dialogue meeting with the City Executive Board through the annual general meeting, for instance. towards achieving: – Assessment of the possible consequences for – Ensuring clean drinking water Aarhus Municipality and its citizens of any planning Owner strategy – Ensuring stable supply and high customer satisfac- and decisions that have a significant financial impact Aarhus Municipality’s owner strategy for Aarhus Vand tion on the company elaborates on the goals and objectives established – Contributing to a clean environment – A transparent dialogue between Aarhus Vand and when the company was founded in 2010 as well as – Contributing to the climate efforts and work with the municipality in matters of considerable financial those goals and objectives established by Aarhus City climate change adaptation importance Council in line with the municipality’s policy on active – Assuming social responsibility by offering internships – Charges fixed at a level that secures the capital stock ownership of local companies. and employment on special conditions and operations while observing the goals set for the – Supplying the citizens of Aarhus with water of high development in charges. The municipality’s overall objective for Aarhus Vand is to quality and being among the 30 least expensive ensure the greatest possible long-term value creation municipalities in Denmark Commercialisation of AffaldVarme Aarhus and to ensure that the goals set for the operation and – Ensuring that return and capital structure satisfy The City Council’s budget agreement for 2020 was a service, finances, security, environmental and social the set goals. clear signal that Aarhus Municipality must work towards conditions are achieved. achieving CO2 neutrality in 2030. According to the City Council, a separation of AffaldVarme Aarhus as an inde-

10 pendent municipally owned private limited company The plan suggests the establishment and gradual will have some obvious advantages. It will be much development of a physical “innovation district” for easier for the company to engage in new cooperation, water cluster players in Aarhus. The innovation district for instance, or develop new products and take new will function as a significant national point of assem- initiatives in support of the green transition. bly for increased collaboration between authorities, utilities, research/education, companies and start-ups Based on the good experience with the commercia- within digital water technology. This way, the business lisation of Aarhus Vand, a structure and organisation plan supports the establishment of the Danish Water similar to our own is to be expected. This will provide Cluster, which Aarhus Vand was one of the driving good opportunities for cooperation and optimum forces behind. utilisation of synergies between AffaldVarme Aarhus and Aarhus Vand. Authorities and utilities possess great knowledge of current and coming operational, construction and Aarhus Municipality’s Business Plan 2020-2023 commercial challenges and regulations in the fields of The Business Liaison Committee in Aarhus has sub- water and wastewater. It is essential that this know- mitted a new business plan “Partnerships for sustain- ledge should be imparted to the research institutions able growth” to the ministry. The plan, which must and companies in the Danish water sector which contribute to strengthening Danish business life, is must develop, test and sell new solutions to the global based on the assumption that sustainable cities pre- market. What is needed is an innovation district where cede a sustainable world – and addresses the busi- the players can gather to develop joint future scenarios ness challenges Aarhus must overcome to ensure that and roadmaps for research, education, development, we have a well-functioning and competitive growth testing, demonstration and commercialisation through centre in western Denmark in the future. a number of professional activities.

“Partnerships for sustainable growth” sets the direc- The purpose of the initiative is to ensure that the tion and framework for Aarhus’ business and urban players in the Danish ecosystem in water technology efforts. The specific initiatives will be implemented have the possibility of working more closely together in close cooperation with the other municipalities, and creating a better framework for new Danish solu- companies, organisations and knowledge institutions tions. The ambition is to create a physical framework in Business Region Aarhus. Its success depends on in proximity to Aarhus Vand’s new domicile in Aarhus strong partnerships – locally, regionally, nationally and Syd for start-ups, branches of the major Danish water internationally. technology companies and knowledge institutions within the Danish water sector.

11 Annual wheel 2020

Annual wheel for the collaboration with Aarhus Municipality

MARCH MAY MAY

Dialogue meeting with Dialogue meeting with Annual the City Executive Board the Mayor general meeting

Involved party(ies): Involved party(ies): Involved party(ies): Chairman of the Board, Director, Chairman of the Board, Director, Chairman of the Board, Director, Mayor, councillors and members of Mayor and City Manager Mayor, Mayor’s Department the City Executive Board and City Council

Annual wheel for the Board of directors

JANUARY FEBRUARY APRIL MAY MAY SEPTEMBER NOVEMBER

New Year’s 1st board 2nd board Board of Annual meeting 3rd board 4th board reception meeting meeting directors seminar DANVA meeting meeting

Budget for 2021 Financial Business goals statements 2019 for 2021

12 The Board

Flemming Besenbacher Keld Hvalsø Ango Winther Chairman of the Board Deputy Chairman Member of the Aarhus City Professor of nanoscience Member of the Aarhus City Council for the Social and physics, Aarhus Univer- Council for the Red-Green Democrats sity Alliance

Almaz Mengesha Johanne Sønderlund Birn Jens Hørup Jensen Member of the Aarhus City Owner of a consultancy firm Consumer representative Council for the Liberal Party

Mads Thomsen Bjørn Rohde Henrik Frier Employee representative Employee representative Employee representative

13 The Bay of Aarhus

14 Purpose, vision and core story

Purpose We have succeeded in doing so because water is our and build a business which contributes actively to the To create health through the supply of clean water – passion. Through ingenuity and binding co-operation, UN’s global goals for sustainable development. for people and the planet. we work every day to supply innovative solutions which future-proof a balanced water cycle as the framework We perceive water as common ownership and a neces- Vision for healthy living and biodiversity. Aarhus Vand creates sity of life. Such a perception calls for commitment. We To create a national platform as a driver for local and health to people and the planet through the supply of will fight for a future where water creates sustainable global solutions for a healthier water cycle. clean water. well-being, growth and change for the billions of people who inhabit our planet. We may only be a drop in the WATER values We at Aarhus Vand create progress in unison, with ocean, but we will never stop fighting for a future for- WE feeling, responsibility, innovation and dialogue. room for diversity and respect of each other. This is med by innovative solutions which, together with other what we call ‘WE feeling’. The obligation to supply drops, may create a wave of healthy living all over the The core story clean water comes with an awareness of our responsi- planet. No life without water. Water is one of the most fun- bility, and we make it a virtue to lead the way by taking damental sources of health – to man, the city, nature the initiative and keeping our word. We endeavour to and the sea. The need for clean water is universal – no always be curious, setting our creativity free and chal- matter where, no matter when. Today, clean water is a lenging each other in our efforts to minimise the distan- scarce resource. However, if you learn how to admini- ce from idea to final solution. We enter into dialogues to ster it properly, it entails an indefinite potential for future share knowledge in an honest and trusting manner. life and well-being – globally and locally. Our will to change and contribute to general health goes Our story had its beginnings at the well at Store Torv beyond our physical plants: Just like the glocal city of in Aarhus when the city’s spring was contaminated Aarhus, we are a local company with a global mindset, with wastewater which caused an outbreak of cholera. and we focus on creating the most value for as many It was this catastrophe that caused the foundation of as possible. Aarhus Vand wants to create a national Aarhus Vandforsyning (Aarhus Water Supplies) in 1872, platform as a driver for local and global solutions for a which set the scene for future-proofing the prospect of healthier water cycle. healthy living. We will achieve this through the formation of part- Since then, we have established a sustainable water nerships to accelerate the development of the most cycle in Aarhus which serves as inspiration worldwide. resource-efficient services. We believe that tomorrow’s With the water cycle at the centre, we rethink the way solutions will be designed in mutually binding co-opera- in which water’s potential can be realised to the great tion that allows ingenuity to be set free. Together with delight of all. partners we will create solutions for global inspiration

15 Strategic partnerships strengthen us

Partnerships on water technology is part of Aarhus national point of assembly for the development and The Danish water sector is changing, and Danish com- Vand’s DNA. We see ourselves as one of Denmark’s promotion of Danish water technology. There is no panies in the water sector are facing new and major leading water companies in a number of areas, and we denying it: Danish water technology is quite unique, challenges. The four water companies share a number possess knowledge and competencies we would like to and we are market leading when it comes to tackling of characteristics and ambitions for the industry. They share with others. But we also learn a great deal from the world’s water challenges. By joining forces in new have joined forces in the belief that strong cooperation others. Both at home and abroad. This is why we have partnerships, we can create new solutions, strengthen is the best response to the challenges and develop- close collaboration with other Danish and foreign supply Danish export and make a real difference. ment of the industry. A cooperation where we focus on companies, private companies, municipalities, consul- the development and streamlining of the water sector, tants and knowledge institutions. The Water Cluster utilises the head start Denmark has in regionally, nationally as well as internationally. the water area in an effort to support Danish growth and By working together with some of the best partners export through innovation and technological develop- 3Vand has selected the following joint strategic focus in the industry, we find new ideas, opportunities, and ment. In addition to Aarhus Vand, the Water Cluster areas: Innovation and development, the role of water solutions to the challenges we are facing: limiting energy consists of Grundfos, Kamstrup, Danfoss, AVK, Syste- operator, internationalisation and regulation. consumption in the production of drinking water and matic and Aarsleff as well as the utility companies Hofor, wastewater treatment, producing enough energy to Biofos and Vandcenter Syd. Water Technology Alliance achieve an energy neutral water cycle, reducing the At 3Vand we focus our efforts on international growth emission of CO2 from our activities, and using resour- The Water Cluster aims to build a national and global and export of the Danish water sector. The Water Tech- ces such as phosphorus in wastewater and developing ecosystem of fiery souls, innovators, researchers and nology Alliance (WTA), for instance, aims to support solutions for climate change adaptation. decision-makers who, together, create exceptional the Danish water industry in their efforts to promote social and commercial results. And we take on the re- international growth, and the purpose of WTA is to Through partnerships, we at Aarhus Vand stand every sponsibility of contributing to achieving the UN’s global spread the knowledge of the Danish water model world- chance of succeeding with Strategy 2025. As part of goals – in particular in the water area – by forming new wide. 3Vand has expatriate staff in the US and Australia our strategy, our aim is to develop competencies and partnerships. This is also why we reach out to existing whose job it is to create close cooperation between Da- knowledge on an ongoing basis to ensure that we have partnerships, organisations, companies and other inte- nish and foreign supply complies, public authorities and the most talented knowledge employees intend on rested parties to further strengthen Denmark’s leading educational and research institutions in the water area. finding optimal solutions. This is best done in interdisci- position. plinary, instructive and innovative interaction with our WTA has been established in Chicago and Silicon Valley partners and other stakeholders, for instance through 3Vand in California. In addition to 3Vand, the alliance consists formalised partnership agreements, knowledge net- 3Vand is a network-based, strategic cooperation of the Danish Trade Council under the auspices of the works and alliances. between the water companies Hofor, Biofos, VCS Ministry of Foreign Affairs of Denmark as well as the Denmark and Aarhus Vand. The name symbolises that companies Danfoss, DHI, AVK, Landia, Linak, Nissen The Danish Water Cluster the cooperation represents the water companies in the Energiteknik, Applied Biomimetic, Grundfos, Kamstrup, The Danish Water Cluster, which was founded in 2019 three largest cities in Denmark: Copenhagen, Aarhus Leif Koch, SkyTEM,I-GIS, Rambøll and Stjernholm. on the initiative of Aarhus Vand, among others, is a and Odense.

16 3Vand has an expatriate employee in Chicago, who is to act as a bridgehead for Danish export compa- nies in relation to opportunities and specific tasks in the field of energy optimisation and energy produc- tion in the wastewater sector.

Aarhus Vand also has a cooperation agreement with the Chicago-based wastewater company Metropolitan Water Reclamation District of Greater Chicago (MWRDGC). The cooperation agreement is about our mutual obligation to exchange employees and knowledge in specific areas.

With the support of Industriens Fond (the Danish Industry Foundation) and assistance of the Con- sulate General in Chicago, 3Vand also has an expatriate employee in California on behalf of WTA to promote Danish export within the water resource, drinking water and wastewater sectors. WTA Cali- fornia must increase knowledge and use of Danish water technology solutions that contribute positively to solving California’s critical water shortage and achieving the goals for the reduction of greenhouse gases.

Since 2019, 3Vand has had an expatriate employee working in Sydney, whose job it is to establish an Australian-based WTA organisation for the purpose of establishing cooperation between Danish and Australian water technology companies. The aim is that WTA Sydney should spread to the rest of Oceania.

International cooperation between authorities If the UN’s global goal no. 6 – clean drinking water to be continued at page 18 ...

17 and sanitation for everyone in 2030 – is to be achieved, extraordinary efforts are required along with new types of cooperation. We contribute to achieving this through strong international partner- ships, in accordance with global goal no. 17 – for the benefit of the people we help all over the world, the local companies, who have a lot of techno- logy to offer the water sector, and our employees, who draw inspiration and new knowledge through international cooperation. This is the reason why we, together with Aarhus Municipality, take part in international partnerships with the authorities in the cities of Udaipur in India, Tshwane in South Africa and Tema in Ghana.

The local authorities of these cities are not only inte- rested in the procurement of modern and advanced equipment. They are also interested in package solutions, and this is where cooperation between authorities makes sense. Aarhus Municipality and Aarhus Vand have years of experience in law admi- nistration and the supply of practical and effective solutions to the citizens. Through the cooperation with the three cities, we present the local autho- rities with package solutions for an efficient and sustainable supply of water with minimal water loss, a reliable sewage system and wastewater treatment including resource utilisation. The solutions may point to technology made in Denmark as well as knowhow, which may help companies in eastern Jutland gain a footing in new markets.

The partnerships with the local authorities are part of the Danish development cooperation. They were

Business visit to Marselisborg wastewater treatment plant

18 launched in 2014, and presently, more than 30 partnerships Through the partnership, we have developed a concept which Our experience with partnering over the past 15 years has exist or have been planned in 18 different countries. has been implemented at Åby Wastewater Treatment Plant, shown us that we benefit greatly from this type of cooperation. which is one of the first places in the world to extract the phos- It has meant an increase in efficiency and a decrease in costs. Other international cooperation phorus in wastewater and turn it into a fertiliser of high quality The essential point of the partnership agreement with Favrskov In addition to the cooperation in WTA in the US and Australia under the name of ‘PhosphorCare’. Herning Vand has also Forsyning is that it must help improve the quality of our work and the partnerships with the local authorities in India, South built a plant, and in 2018, we opened a plant at Marselisborg and enable us to create innovative measures and optimise the Africa and Ghana, we also engage in international water part- Wastewater Treatment Plant, the largest plant in Scandinavia. work processes to the benefit of all parties involved: our custo- nerships in Dubai, Sweden and Portugal. Furthermore, we are mers, the two supply companies and the external companies. working with or have completed projects in the Ukraine, Serbia The PhosphorCare partnership has entered a contract with and Zambia involving training of the local workers within the the company Suez Water A/S in the Danish town of Ry, for the Shared areas of water supply and wastewater treatment. supply of the phosphorus plant for Marselisborg Wastewater Shared is a service provider which was established on the initi- Treatment Plant based on the technology developed in the ative of Aarhus Vand. The company is owned by Aarhus Vand We have established cooperation – so-called memorandums partnership. And Aarhus Vand has entered an innovation part- together with Favrskov Forsyning, Mariagerfjord Vand, Morsø of understanding – with Metropolitan Water Reclamation nership for the further development of the concept together Forsyning, Samsø Spildevand, Syddjurs Spildevand, Thisted District of Greater Chicago as well as Àguas de Portugal – the with Suez Water A/S and the company Stjernholm A/S. Vand and Vesthimmerlands Forsyning. public umbrella organisation for the Portuguese water sector. These memorandums are bilateral agreements for the sharing The phosphorous concept has attracted great interest in The company provides administrative services to its owners, of knowledge and best practices within water supply and wa- Denmark and abroad. In Denmark there is a potential for the and the purpose is to contribute to financial optimisation and stewater treatment, i.e. ways in which Aarhus Vand can con- construction of 20-30 phosphorus plants, and the export the creation of added value to the circle of owners through tribute internationally to increased sustainability and efficiency potential is estimated to be substantial. New EU legislation on rational joint operation of a number of standardised tasks and within the water area. recycled phosphorus products will increase the possibility of services. extending the concept further. PhosphorCare Shared’s main services consist of joint procurement, purcha- In Denmark, it is a policy goal that 80 percent of all the phos- Water Partner sing and contract management. Furthermore, the company phorus from our wastewater sludge must be recovered. It is an In 2016, we established a public-private water partnership to- provides services and consultancy within the following areas: ambitious but important goal since phosphorous is a scarce gether with Favrskov Forsyning for the period 2016 – 2021 on Salary and wage administration, HR, analysis and control of resource worldwide. Phosphorous forms part of our cells and the renewal of water lines and purification plants in Aarhus and data, legal advice and processing of personal data and GDPR. bones, and without it, plants would not be able to grow. Favrskov. The main partners are firms of consultants Envidan, Niras, and contractors Arkil, Aarsleff and Vam. In addition to In a partnership with Herning Vand, Grundfos, Norconsult and this, Norva24, Sulzer, LE34 and FKSSlamson also take part. Knowledge Centre for Agriculture and the Danish Pig Research The partnership, which we call Water Partner, involves sche- Centre (SEGES), we have managed to turn the phosphorus in duling, digging up, lining, TV inspection, pump stations and wastewater into a fertiliser rather than a waste product. measuring.

19 Integrating the UN’s global goals for sustainability

The UN’s 17 global goals for sustainable de- We have a strategic focus on the environ- CSR GOALS 2020 velopment, which were adopted in 2015, is ment and climate change. Therefore, it is the most ambitious plan for the future of the natural for us to integrate the global goals in Clean drinking water – the aim is never to ex- planet ever. If the plan is to succeed, every our Strategy 2025 and in the projects and ceed the limit values for drinking water, which country, every government and every citizen activities where this is relevant. This applies would result in a recommendation that water must contribute. At Aarhus Vand we have primarily to goals: should be boiled. worked systematically with sustainability for years, and we are certified as a sustainable 6 – Clean water and sanitation Adaptation to climate change continues with company, which requires that we have full 13 – Climate action increased speed, and 2020 will see the estab- control over the whole palette of topics 14 – Life below water lishment of separate sewer systems over an within sustainability: Consumer relations, area of at least another 80 hectares in Aarhus. the environment, the climate and working This will make us more resilient to flooding conditions, business ethics, human rights caused by cloudbursts and torrential rain. and our contribution to the development of local society. The climate action measures continue, and this means that we reach 53% self-sufficiency on energy at Aarhus Vand in 2020.

Resource utilisation will be further developed so that we will be extracting more than 80 tonnes of PhosphorCare in 2020. Phosphor- Care is a phosphorous fertiliser extracted from wastewater which may replace phosphor from mining.

Saving life below water – the goal is that our plants must never exceed the emission requirements.

20 Clean water and sanitation Climate action Life below water

We focus on the local effort of providing our customers with As a world-leader in the utilisation of resources in wastewater, Wastewater treatment plays a significant role when it comes clean and sufficient drinking water. To ensure this, we have we are very ambitious when it comes to the production of green to safeguarding marine life. A clean Bay of Aarhus, with the been working systematically with drinking water quality as- energy and increased utilisation of more and more resources from resulting biological and recreational values, depends on effi- surance through the comprehensive management program wastewater. In 2030, we will be self-sufficient in energy and CO2- cient purification of very large volumes of wastewater. This is “Documented drinking water quality assurance” for more than neutral, and we expect to achieve 53.5% self-sufficiency in 2020. a task that we perform well, and we assume additional respon- 10 years, and we are certified as a food company in accor- Our knowledge of energy optimisation and resource utilisation sibility by contributing to the recreational use of lakes, streams dance with ISO standard 22000. Our aim is to ensure clean attracts attention worldwide. That is why we support capacity buil- and the port area. We have particular focus on streamlining the drinking water also for future generations. This is done through ding and export of Danish technology to India, South Africa, China, efficiency of our operation of the wastewater treatment proces- a comprehensive groundwater protection programme and a the United States and Australia, among others. ses and future-proofing our facilities and cleaning capacity series of action plans which, among other things, forbid the further. use of pesticides in confined areas with groundwater interests. Another important area is our efforts in relation to adapting Aarhus to climate change to avoid flooding and other damage. This places Our knowledge about effective wastewater treatment is already In addition to this, we are working on minimising water loss in heavy demands on the development of our infrastructure, and the in demand globally and will contribute to raising the knowledge our pipeline network, and so far, we have reached a historical solutions will increasingly be created in innovative collaboration of—and the level of—wastewater treatment in a number of low of 5.5 percent. Globally, we focus our efforts on transfer- with the townspeople, the municipality and a number of know- countries. This will mean an improvement of marine life on a ring our knowledge in drinking water production to a number of ledge players. Typical of the future development is the fact that the global scale. countries, for instance in the United States through the Water solutions in the area of climate adaptation become visible in the Technology Alliance and in Africa through 3VAND. cityscape and create added value in the form of new recreational opportunities for the citizens. Goal 2020 Goal 2020 Goal 2020 Clean drinking water: Climate adaptation: Water environment: Exceeding limit values that would result in a recommenda- Areas which change their status from shared sewer to Exceeding the emission requirements for waterworks having tion that water should be boiled. Goal: 0 separate sewer system. Goal: >70 hectares an impact on the aquatic environment. Goal: 0

Climate action: Water environment: The energy produced at our WWTP should cover 100% of the company’s Exceeding the emission requirements for waterworks having energy consumption for electricity and heat in 2030. Goal: 53.5% an impact on the aquatic environment. Goal: 0

Climate action: The total energy consumption at our wastewater treatment plants. Goal: <23.5 GWh

Resource utilsation: Production of PhosphorCare. Goal: >80 tonnes 21 Aarhus ReWater – a trailblazer in resource utilisation

A new wastewater treatment plant at With Aarhus ReWater, we will be introdu- of new technologies together with external councils, among others, will be involved. Marselisborg in southern Aarhus will be an cing a brand-new perspective on waste- partners. Aarhus ReWater will therefore In 2020, we will also start working on also be a display window to the world, the new district plans and the other planning international trailblazer in resource utilisa- water and our overall resources. It is a rethinking of how we do good things even purpose of which is to attract new partners and regulatory work. And we will prepare tion and sustainable treatment of wastewa- better. We are already today among the and place Denmark and Aarhus on the tenders for the formation of a consortium ter. The new Aarhus ReWater is expected world leaders when it comes to utilising world map. It will also be a natural point of consisting of the contractor, process con- to be completed in 2028. Situated close resources in wastewater for heating, bio- assembly, a development and a learning sultant and architect. site of water know-how for the knowledge to the city and the sea, it will be a beautiful gas, electricity and as a fertiliser. But in the future, it will also be possible to produce institutions of the city and the region. We started the tendering of the architect landmark of everything we are able to ac- nutrients, proteins, food, chemicals and project in 2019 and expect to choose complish at Aarhus Vand. essentials for the healthcare industry from New and innovative form of procure- an architect partner in 2020. The firm of wastewater. It is all about keeping an open ment architects must draw up a master plan for mind. In 2019, we entered into cooperation with the area, design the plant, prepare design Niras as consultants on the preparation of manuals and incorporate the interaction The ambition is that Aarhus ReWater an EIA of the plant. The assessment is ba- of the plant, the city, its water and sur- will become the most resource-efficient sed on two possible locations of the plant. roundings. wastewater treatment plant and, more One places the plant to the east of the ma- than anything, that it will be experienced rina and the current wastewater treatment Since we will be building the plant of the as a renewable resource for the city, for plant in an area that is now under water, future, we do not yet know the procedural, Denmark and for the world. Thanks to but which will be filled with sand. The other technical or architectural frameworks. The- its modular and flexible construction, the places the plant to the east of the existing refore, we are working with a completely plant will be able to develop in line with commercial port in an area that is now new and innovative public procurement changing external requirements and adapt under water, but which will also be filled form, inviting the best Danish and foreign to the utilisation of resources that provides with sand. consultants, contractors and architects to most value. Today, we utilise energy. In 30 develop the plant together with us. We are years, however, there will most likely be The EIA will be completed in 2020, and further developing the partnering concept many more streams of resources creating we expect it to be approved by the City developed over many years. As something added value. Council in 2022. As a natural part of the new, we are expanding the partnering con- EIA, work with citizen involvement through cept to include an innovation partnership The plant will be a full-scale, up and run- Aarhus Municipality’s model for citizen and very flexible team formation. ning, open laboratory for the development involvement will be intensified. The joint

22 The present Marselisborg Wastewater Treatment Plant

23 Implementing a digital transformation

Digital innovation is taking place with Aarhus Vand is already recognised for its a major cultural change project and fully transparency for all employees and part- unprecedented ease and speed, and our strong position within digitisation. However, integrated in the continued development ners. Focus is on activating and translating of the organisation. Digitisation means that our data and knowledge into actionable customers and the surrounding community we want to speed up the development of digital solutions as well as the develop- our IT systems are related, that we have an information. Together with partners we will increasingly take on new technologies and ment in new areas the contours of which overview of, and safe access to, data, that establish and implement a flexible, safe, go digital. Therefore, we are undergoing a we have only begun to recognise. We will our IT safety is of high quality and that we scalable and accessible innovation data necessary transformation. This transforma- intensify the commercialisation of Aarhus have the right competencies. The trans- platform. The data platform will create co- formation is also an indication that we are herence and overview of data and will be tion means embracing digitisation, thinking Vand and market the best and most pro- mising solutions developed in coopera- able to adapt to new market conditions ra- scalable in accordance with the business and acting in accordance with the concept tion with other utility companies, private pidly and efficiently; that we work efficiently requirements. of “digitally first”. companies and universities. Through in partnerships and digital ecosystems; digitisation we aim to: that we implement agile working practices; The data platform is a corner stone in the – Achieve accessibility and overview of that it is acceptable to make mistakes; that cross-organisational digitisation of Aarhus data and information innovation is crucial and that we actively Vand. The platform will enable employees – Further knowledge sharing, coope- share knowledge and experience. In an and partners to access and exchange ration, innovation and partnering organisational context, it is a process and data, do system integration and design – Come closer to our customers and a change that will drive and improve our additional applications to create new bring them closer to us ability to increase productivity significantly. insight, knowledge and value. The platform – Increase productivity across the Digitisation is therefore all-pervading and is therefore an integrated part of our digital organisation important to all employees, to our partner- workplace. It is also crucial to the imple- – Create an even more attractive work- ships and to the way our customers will mentation of data-driven asset manage- place and increase job satisfaction interact with us in the future. ment which must supply credible data, overall data analyses and insights. It must ensure – Create added value and opportunity Data as the driver for success data-based decision-making for services, of growth through digital solutions, Data are the most important raw mate- maintenance and replacement of our as- services and business models. rials of the future. In future, we will see a sets and, ultimately, reduce our expenses. steep increase in the amount, complexity Digitisation affects everyone of us and availability of data. This is why we are To us, digital transformation is much more establishing a flexible and scalable digital than technology. The transformation is infrastructure to ensure accessibility and

24 The company Dryp is a manufacturer of automated smart sensors making it financially feasible to monitor the water cycle by means of hundreds of sensors.

25 In Risvangen, north of Aarhus, we have made room for torrential rainstorms at ground level and created recreational areas at the same time.

26 New ways of working with water

The Aarhus method for adapting the existing city to climate change Rainwater for toilet flushing and laundering in Nye

The climate prognoses predict extreme fixed measure for the amount of rainwater Nye, a new suburb just north of Aarhus, is charge of the establishment and operation weather conditions in Denmark in the future. on the ground level in connection with a so- being created from a strong desire to think of the entire water system. We will establish This means more frequent and more severe called 10-year event, i.e. heavy rainfall events and live differently in a green and sustainable a central wastewater treatment plant where damage when heavy rain causes flooding experiences once every 10 years on average. manner. This will be Nye’s identity, and an water is cleaned by means of an ultrafilter of cities. Therefore, municipalities and water Instead, we always try to find the optimal local important element of this is the development and treated with ultraviolet radiation. So as to companies are working flat out to develop solutions based on an assessment of what and implementation of holistic and sustainable safeguard the water quality further, we have local climate adaptation solutions to minimise will pay off where in socio-economic terms. water management, where surface water is developed a new type of pipe for secondary the damage. In other words, our climate adaptation efforts collected, cleaned and used for laundering water, which is the term used for treated must be profitable. and flushing of the toilets in the homes. This rainwater. The pipe is dimensioned based on In Aarhus, Aarhus Vand and the municipality will mean a 40% decrease in the consumption a calculation of the requirement of water for have a shared goal of making room for the The method, which is called “The Aarhus met- of drinking water – in other words, the ground- laundering and flushing of the toilets. The pipe water through blue green solutions which hod for adapting the existing city to climate water resource will be taken good care of. is purple, so that it can easily be distinguished involve precipitation being handled at ground change” is based on our experience from pre- from the pipes with drinking water. This way level and not in pipes underground. Rainwater vious climate adaptation projects involving the For Aarhus Vand, this is a totally new and in- we also minimise the risk of wrong connec- lakes, roadbeds and waterways are examp- handling of rainwater on ground level. We use novative way of working with the water cycle. tions. les of such solutions, where water is stored, the method to determine in which of the areas And Nye will be the first place in Denmark evapo-rates, seeps down or is led off to make with separation of rainwater and wastewater where all surface water from roofs, roads and The wastewater treatment plant, which will be sure it does not do any damage. Handling it will pay off to implement climate adaptation green areas is considered a resource to be operated as a visitor’s centre, was designed rainwater at ground level gives most value for measures. The method was fully developed used recreationally and in the homes. by Loop Arkitekter, with Silhorko in charge of money when it comes to climate adaptation. in 2019, and now we have started using it at the process plant. It is a pilot project which in- At the same time, it provides added value to Viby and Åbyhøj, the two areas singled out by Professional treatment of rainwater lies at the cludes 650 homes, and we expect to provide the local areas in that the water is visible and the municipality for the separation of rain- heart of this project, as the water must not secondary water to the residents at the end becomes part of the recreational areas to the water and wastewater over the coming years. pose a health risk to residents when led into of 2020. delight of people, animals and nature. There is widespread uncertainty of how to their homes. That is why Aarhus Vand is in go about climate adaptation. Therefore, with Together with Aarhus Municipality we have de- the support of VUDP, the Aarhus method has veloped a special method to determine where, been described in a so-called script to inspire when and how to start adapting the existing other municipalities and water companies to city to climate change. The method has no develop optimal local solutions.

27 Creating a new corporate culture together

Our complex and changing environment Our core values consist of the values or not to establish goals. To us, value- for the implementation of Strategy 2025, makes it increasingly difficult to manage we-feeling, accountability, innovation and based management is about how we and it will help set the direction for future take responsibility in order to achieve our conduct. The core story will build a bridge the company exclusively on the basis dialogue. Our core values are a part of our DNA, a standpoint which ensures a goals and how we turn management into between business objectives and day-to- of fixed guidelines and procedures. coherent whole and direction in the daily a common task. It is a question of good day operations. It must also improve all This is why we have supplemented our work and which helps us make the right leadership and not least about being able stages of recruitment, and our values must management system with a core story, and necessary decisions. The common to take – and create – followership. With ensure a staff with the right mind-set. value-based management, employees a solid value base and work with value- basic values help build a strong corporate culture and a dynamic organisation: It is assume a high degree of autonomy and Professionalism is only one of the aspects based leadership. a good starting point for leadership and become capable of acting appropriately in we consider when recruiting. The candi- collaboration in a workday full of change unforeseen or serious situations. They can date’s personality, whether they can work and with an ever-growing demand for improvise and act in the best possible way in an organisation characterised by value- increased productivity. We free up resour- thanks to the core values, which enable based leadership, is also important. ces when it is values rather than rules that them to decide what to do without having guide us in our work. Therefore, we have a to seek advice or permission from the strong focus on self-management, which management. We make room for em- gives the individual employee greater flexi- ployees’ creativity and competencies bility and freedom to decide for themsel- to unfold, thus increasing the sense of ves. responsibility and the development po- tential for each employee. And it gives us Values-based leadership is about a flexible organisation – an organisation taking responsibility in motion and geared towards absorbing Since we defined our core values, we changes and adapting to the customers’ have been developing a value-based style situation and demands. of management which aims to achieve greater efficiency as well as a higher The core story sets the course degree of employee satisfaction. Water- Aarhus Vand’s core story, which can be based management is not about whether found on page 15, will be an important tool

28 29 Organisation

Aarhus Vand is one overall public limited Aarhus Vand TA Shared Business Development company with an organisation divided into Aarhus Vand TA handles the accounts for Shared, a service provider, provides its Is responsible for the realisation of the new four divisions. Aarhus Vand A/S is the activities not directly associated with the owners with administrative services. The Aarhus Vand domicile and for the realisa- company’s core areas. “TA” is an abbre- owners are Aarhus Vand, Favrskov Forsy- tion of a new wastewater treatment and parent company of Aarhus Vand TA and viation of the Danish expression “tilknyttet ning, Mariagerfjord Vand, Morsø Forsyning, resource plant, Aarhus ReWater. Further- co-owner of Shared. virksomhed” (associated activity) which Samsø Spildevand, Syddjurs Spildevand, more, Business Development is respon- includes activities that do not fall within our Thisted Vand and Vesthimmerlands For- sible for utilising the potential for business main activities of supplying drinking water, syning. development offered by these two major treating wastewater and performing climate projects as well as business development adaptation measures. Finance of Aarhus Vand overall. Consists of HR and Finances. The division CFO of Aarhus Vand, Mads Bayer, is the ensures that we at Aarhus Vand develop, director of Aarhus Vand TA, whereas CEO maintain and use our resources – human Lars Schrøder and CBDO Claus Homann and financial – responsibly. and COO Claus Møller Pedersen make up the Board of Directors. Aarhus Vand consti- tutes the parent company which owns the company 100%, and the board of Aarhus Vand constitutes the general assembly.

AARHUS VAND TA AARHUS VAND A/S SHARED A/S Mads Bayer Lars Schrøder Therese Bonney CFO CEO Director

FINANCES BUSINESS PRODUCTION CUSTOMER AND DEVELOPMENT PROJECT Mads Bayer Claus Møller Pedersen Claus Homann Karina Topp CFO CDBO COO CPO

30 Production Customer and Project Production delivers drinking water, purifies Is responsible for the planning of the wastewater and utilises resources such as overall infrastructure of the water and energy and phosphorus from wastewater wastewater system, implementation of to the benefit of the citizens and the en- construction work, customer relations, vironment in Aarhus. Production ensures communication and marketing as well as high quality, efficiency and continuity of IT and digitisation. A substantial part of supply through operation, service and the division’s construction work is carried development activities. out in partnerships with consultants and contractors.

Number of employees 2018 2019 Number of employees 232 235 Converted into full-time employees 216 219 Percentage distribution, women 34 34 Percentage distribution, men 66 66 Number of civil servants 22 21 Average age, all employees 47.1 47.2 Staff turnover (%) 7.5 10.7

Drinking water fountain, Banegårdsplads, Aarhus.

31 Sharpened focus on financing

With increased focus on the financing of our activities, Dialogue on the financial framework we will ensure greater consistency between investment, As part of the strategy, we want to engage in a dialogue charges and the financial framework in coming years. with the financial authority in the Supply Secretariat and the Danish Energy Agency to ensure that the financial We are experiencing a large influx of new customers regulation takes account of the development in munici- in line with the many newly built houses in Aarhus palities of growth and municipalities in need of funda- Municipality. This calls for expansion of our assets – mental structural change. As part of the strategy, we our wastewater treatment plants, and waterworks, for will systematically work with business cases and asset instance – and renovation of our existing assets. In management to make sure that the projects we embark coming years, we will be focusing on the construction on are the ones that will give us value for money. of new waterworks at Beder, an ongoing renewal of our water and wastewater pipelines, adaptation to climate We will also work systematically for the realisation of change as well as preparations for a new wastewater new income areas which can help improve our financial treatment plant – Aarhus ReWater. situation. A constructive dialogue will be necessary to obtain an extension of the very rigid framework for new The great demand for investment exerts increased income areas. pressure on our liquidity, particularly in the context of the increased requirements for continuous improve- Finally, we will carry out a study of what is the best ment of the efficiency of our operating expenses and financial solution in relation to our many and substantial, fixed assets, which we are met with from politicians. long-term investments, and we will need even tighter In addition to this, we are under pressure financially control of the company’s cash flow. from a governmental requirement of imposing a ceiling on our income. We pay much attention to observing the requirements we are met with, the requirements of the municipal wastewater plan, for instance. In light of these requirements, we have designed a financial strategy to ensure the necessary financial scope for the coming years.

32 Financial forecast for 2020

The Supply Secretariat (Forsyningssekre- As far as the operating costs are concer- budgets is basically that the operating a cash flow deficit before taxes of DKK tariatet) under the Danish Competition and ned, we have a strategic goal of increasing budget includes depreciation on present 76.7 million. This is due to the inclusion Consumer Authority announces a financial our productivity by 2 percent a year. We fixed costs. The cash budget includes in operations of depreciation on existing expect to be able to achieve this goal with capital investment budgeted for 2020 plants of DKK 314 million, whereas liquidity framework for the water companies every the initiatives we have launched. The goal and repayment of loans. The difference in includes payment of DKK 407.9 million year. For 2020, the financial framework an- is in line with the authorities’ requirements operating costs is due to differences in ac- towards a new plant and DKK 31.0 million nounced by the Supply Secretariat is on the for efficiency improvement. counting in the processing of climate costs in repayment of loans. same level as that of 2019. and civil service pension. The figure below shows the expected budget for the operation and cash flow As will appear from the budgets, we had for 2020. The difference between the two a net profit of DKK 67.9 million against

Operating and cash budgets for 2020

1,000 KR. OPERATION LIQUIDITY Water and wastewater charges 447,000 447,000 Service fees 70,600 70,600 Connection fees and other income 94,300 94,300 Total income 611,900 611,900 Operation costs -219,060 -238,300 Depreciation -314,000 0 Profit/Loss before financial income and expences 78,840 373,600 Other operation items 200 200 Finacial items -11,150 -11,600 Opeating profit/loss for the year 67,890 362,200 Investments - 4 07,9 0 0 Repayment of loan -31,026 Positive/negative cash flow for the year -76,726

33 Investment and tariffs

Investments 2020 Tariffs for 2020 The budgeted investments for 2020 make up DKK 407.9 The budget for 2020 forms the basis of the water and waste- million. There is still major activity in investments in property water tariffs for 2020. Overall, there is an increase of DKK 0.01 development and ongoing renovation of our water and waste- per cubic metre. The tariffs are within the financial framework water pipes. In the field of wastewater, focus is on renovation announced by the Supply Secretariat. of overhead reservoirs. In the field of wastewater, there is a special focus on the realisation of the investments specified in the Wastewater Treatment Plan, including studies on the establishment of a new wastewater treatment plant – Aarhus ReWater – as well as continued focus on climate change adaptation in exposed areas.

Where does the money come from? What is the money spent on?

2 % 12 %

15 % 36 %

62 % 73 % Service fees (12 %) Operating costs (36 %) Water and wastewater charges (73 %) Capital investment (62 %) Connection charges and other income (15 %) Financial costs (2 %)

34 The variable water price The variable water price The figure to the right compares the variable water price for 2020 with that of previous years DKK per m3 2015 2016 2017 2018 2019 2020 and the estimates for the coming years. Production of water 10.71 8.90 8.47 8.34 8,.14 8.33 Wastewater treatment 24.87 21.98 22.89 22.69 22.62 22.42 Government charge 6.53 6.25 6.25 6.37 6.37 6.37 VAT 10.53 9.28 9.40 9.35 9.28 9.28 Total water price per m3 incl. VAT 52.64 46.41 47.01 46.75 46.41 46.40

Elements of the variable water price in 2020 The variable price per m3 incl. VAT and charges

Kr./m3 54 52.64 20 % 18 % 52

51.09 50 Achieved 50.04 Estimated 14 % 48

47.01 46 46.75 46.41 46.41 46.40 46.69 46.89 Production of water (18 %) 48 % 44 Wastewater treatment (48 %) Government tax (14 %) 42 VAT (20 %) 40 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Estimate Estimate

35 Published by: Aarhus Vand A/S Gunnar Clausens Vej 34 8260 Viby J Tlf. 8947 1000 [email protected] www.aarhusvand.dk

Designed by: Clienti

Photos by: Hartmann Schmidt Fotografi

Print: KLS PurePrint

Number printed: 300 January 2020