(CZK M) 5 Number of Employees (Average FTE) 854
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Key Ratios (according to CAS) 2018 Total sales (CZK m) 1 014 EBITDA (CZK m) 69 Profit before taxation (CZK m) 69 Profit after taxation (CZK m) 52 Investments (CZK m) 5 Number of employees (average FTE) 854 Abbreviations Used: AG Aktiengesellschaft (Joint-stock company) a.s. Joint-stock company B2C Business to Customer BO Back Office (Complaint and Request Processing Department, Billing, Debt Collection Department and E2E Methodology Department) CAS Czech Accounting Standards CRM Customer Relationship Management ČR Czech Republic DCEG Debt Collection Expert Group E2E End-to-End processes EBITDA Earnings before interest, taxes, depreciation and amortization FO Front Office (Customer Service Center Department, Contact Center Department, Campaign and Retention Department and Academy) GDPR General Data Protection Regulation HR Human Resources iCE innogy Customer Experience IČ Company Registration Number SLA Service Level Agreement s.r.o. Limited liability company VAT Value Added Tax Definitions: MASS Customer segment including all household and companies with low consumption per year (natural gas <0,63 GWh, electricity <0,2 GWh) SEMI-INDI Customer segment including companies with middle consumption per year (natural gas 0,63 – 4 GWh, electricity 0,2 – 1 GWh) INDI Customer segment including companies with high consumption per year (natural gas 4 – 100 GWh, electricity 1 – 30 GWh) The term "the Company" used in the text refers to innogy Zákaznické služby, s.r.o. The term "the Group" used in the text refers to companies within innogy Group in the Czech Republic. The Annual Report has been prepared in the Czech language and in English. In all matters of interpretation of information, views or opinions, the Czech version of the Annual Report takes precedence over the English version. 2 Table of Contents 1. The Chairman of Statutory Representatives' Statement ................................................................ 4 2. Management Report for 2018 ....................................................................................................... 6 2.1 General Information ..................................................................................................................... 6 2.2 Economic Results .......................................................................................................................... 8 2.3 Business activities ......................................................................................................................... 8 2.4 Human Resources ....................................................................................................................... 12 2.5 Environmental Protection ........................................................................................................... 13 2.6 Subsequent Events ..................................................................................................................... 13 2.7 Outlook ....................................................................................................................................... 14 3. Financial Part ............................................................................................................................... 15 3.1 Financial Statements .................................................................................................................. 15 3.2 Notes to Financial Statements .................................................................................................... 20 4. Independent Auditor's Report ..................................................................................................... 29 5. Report on Relations for the Accounting Period of 2018 ............................................................... 31 3 1. The Chairman of Statutory Representatives' Statement Ladies and Gentlemen, An important milestone for innogy Zákaznické služby, the year 2018 marked the 10th anniversary of the Company's establishment. During the past decade, we have not only fulfilled, but also exceeded our principal goals and visions, namely providing innogy's customers with convenient, all-inclusive services. Thanks to our commitment, customer care at innogy is among the very best on the Czech market, which translates into very high customer satisfaction. Today, innogy is not only an energy supplier, but also an enterprise that offers customers innovative products designed to improve their comfort as much as possible. Allow me to recapitulate. During the 10 years since the Company was established, we have built a large branch network. We now have 41 innogy Contact Centers situated in easily accessible locations throughout the Czech Republic. We are committed to the continuing improvement of the convenience of our services. Our Contact Centers are state-of-the-art facilities that offer such amenities as high-speed Wi-Fi connection and refreshments in the form of fresh coffee. In addition, innogy Contact Centers are a part of the "Human Friendly Place" project, a nationwide network of certified service providers that guarantee professional service to handicapped individuals. Call Center operators communicate with customers using the latest technologies from three cutting-edge facilities. Customer retention and the sale of innogy's supplementary services are a must. In 2018, we enlarged our product portfolio by the addition of gas appliance servicing, and conducted a successful campaign that targeted fast online energy account transfer. Front-office service is only a part of our business; innogy Zákaznické služby also includes back-office operations, where processes have been optimized to provide effective support for the comprehensive array of services provided to customers. The past year was marked by reflections and memories. Apart from that, it was a demanding year filled with changes. We prevailed in the strong competition and focused fully on our customers' needs. Likewise, we maintained our position on the natural gas market and continued to grow on the market for electricity. Now, we have to face new challenges. The most important of them will be the transaction stemming from an agreement between RWE AG and E.ON SE. I am confident that we will handle all the tasks that lie ahead of us with aplomb. We will fully concentrate on improving the quality of our services and enlarging the portfolio of our products. I want to thank all employees of innogy Zákaznické služby because their work was instrumental in the Company's achievements. My thanks also extend to our business partners and customers for their support and loyalty throughout the past decade. Lumír Nováček Chairman of Statutory Representatives 4 Statutory Representatives as at 31 December 2018 Lumír Nováček Chairman of Statutory Representatives Date of birth: 30 April 1965 Education: Brno, Technical University, Faculty of Mechanical Engineering Membership in the bodies of other companies: none Other business activities: none Lukáš Roubíček Statutory Representative Date of birth: 25 February 1971 Education: Ostrava, VSB – Technical University, Faculty of Economics Membership in the bodies of other companies: none Other business activities: none Statutory Representatives always act jointly on behalf of the Company. 5 2. Management Report for 2018 2.1 General Information Company name: innogy Zákaznické služby, s.r.o. Registered office: Plynární 2748/6, 702 00 Ostrava – Moravská Ostrava Identification No.: 27935221 Legal form: Limited liability company The Company’s Establishment and Inception: The Company was established on 27 July 2007. It is incorporated in the Commercial Register administered by Regional Court in Ostrava under Section C, insert 30666. The sole shareholder of the Company as at 31 December 2018 is innogy Česká republika a.s. with its registered office at Limuzská 12/3135, 100 98 Prague 10 – Strašnice, Identification No. 24275051. Profile of the company: The Company’s primary business activity is providing customer care services and communication with the customers of innogy companies. The Company does not have any branch or any part of its business abroad. 6 Persons Responsible for the Annual Report and Audit of Financial Statements for 2018 Auditor and the audit company responsible for the audit of financial statements of innogy Zákaznické služby, s.r.o. for 2018 Audit Company: PricewaterhouseCoopers Audit, s.r.o. Hvězdova 1734/2c 140 00 Praha 4 Registered in the list of audit firms of the Chamber of Auditors of the Czech Republic Under Licence No. 021 Auditor in Charge: Danuše Polívková Licence No. 2462 Persons Responsible for the innogy Zákaznické služby, s.r.o. Financial Statements and Annual Report 2018 We hereby certify that the information stated in this Annual Report is truthful and that no important facts have been omitted or misrepresented. Lumír Nováček Lukáš Roubíček Chairman of Statutory Representatives Statutory Representative 7 2.2 Economic Results Selected financial performance indicators (according to CAS) Unit 2018 2017 2016 Sales of services within innogy Group CZK m 1,014 932 869 Profit before taxation CZK m 69 40 38 Net profit CZK m 52 29 28 Total assets CZK m 217 172 147 Equity CZK m 63 40 39 Investments CZK m 5 - - The Company financed its needs from own sources and by using the Group cash pooling. Assets and Liabilities The main part of assets is accounted for trade receivables within the Group and cash pooling receivables. The most important liabilities comprise of short-term liabilities, the profit for the current period, provision