2019 Business plan Contents

Preface ...... 3 Framework of Vand ...... 4 Cooperation with Aarhus Municipality ...... 6 Annual wheel, 2019 ...... 7 The Board ...... 8 Mission, vision and values ...... 9 Business strategy ...... 10 We are integrating the UN’s global goals for sustainability ..... 12 Strategic collaboration strengthens us and the industry ...... 14 Aarhus ReWater – a lighthouse for resource utilisation ...... 18 We are carrying out a digital transformation ...... 21 We are working on new water solutions ...... 22 We are building a strong corporate culture ...... 25 Organisation ...... 26 We are sharpening the focus on financing...... 28 Financial forecast for 2019 ...... 29 Investment and tariffs...... 30

Pressure filter tanks at Truelsbjerg waterworks

2 PREFACE Welcome to Aarhus Vand’s business plan

The business plan describes in words and 2010, when we became an independent limited develop processes and procedures, thus improving pictures the company’s exciting development liability company. This will improve company cohe- the entire company. Last but not least, it makes and expectations for the year 2019. sion and strengthen interdisciplinary cooperation. Aarhus Vand a more attractive workplace when Our new domicile is expected to be placed in Viby our activities take on an international dimension. We have established a sound and solid base for – close to the southern motorway exit, Aarhus light Aarhus Vand would like to share the responsibility the further development of Aarhus Vand. This rail and other public transport. We will also be close of increasing Danish export of water technology is essential as the setting of the company is to the many water technology businesses around and solutions. constantly changing. Collaboration with our key Aarhus which we expect to start cooperating with stakeholders – the customers, owners and autho- in a national water cluster in the coming years. In addition to a number of new initiatives in 2019, rities – is rewarding. In 2019, we will work towards our business plan also describes Aarhus Vand’s realising Aarhus Vand’s Strategy 2020 by focusing New challenges and demands create new business mission, vision and objectives under the setting laid on growth, productivity and ingenuity. This will areas, foster technological development and pro- out for our activities by our owner and Danish legis- enable us to shape tomorrow’s water company in mote business activities such as the Danish Govern- lation. It also describes how we organise work, and the best possible way. ment’s green growth plan and Water Vision 2025, it sets out our values and our strategy for the years the municipality’s plans for the climate, and solu- ahead. Furthermore, it considers the prerequisites At Aarhus Vand, we put every effort into tions for how to handle rainwater on citizens’ own for fulfilling our vision such as having a competent creating a productive and stimulating property. We are well on the way to meeting these staff, excellent partnerships and sound finances. workplace. We adjust, reorganise, – and a host of other challenges. We focus our adapt and develop in all areas, and efforts on how to handle the entire water cycle. We Enjoy your reading. this is exciting and demanding in develop market-orientated products and services equal measure. The planning of a to our customers. We establish new partner-ships Lars Schrøder new headquarters that will make a and strengthen collaboration through Vandpartner, CEO of Aarhus Vand great workplace even greater is one Shared and 3Vand – to mention but a few. of the things that we will be focusing on in 2019. We have been living in As one of the largest water companies in Den- rented premises since 2016 when we mark, we commit to supporting the water industry. sold our share of the domicile in Has- We have extensive knowledge of the operation of le. With our workshops still located in various facilities, establishment of organisations, Eskelund, our employees are placed analysis, tendering, planning, project management, at different locations, and this is not training and commissioning of facilities. By taking very convenient. Therefore, we have a global perspective, we can contribute know- been pursuing the aim of gathering all ledge and support for Danish export. At the same employees under the same roof since time, we gain new knowledge to optimise and

3 Framework of Aarhus Vand

Aarhus Vand is a Danish public limited company owned Regulation of the water sector – Extraordinary efficiency gains may form part of the by Aarhus Municipality. Our mission is to offer and The Supply Secretariat (Forsyningssekretariatet) is equity develop resource-efficient services throughout the entire charged with regulating the company’s finances – Abolition of the internal supervision. water cycle, creating a climate-adapted, sound environ- according to a financial framework based on the ment, growth and export, all of which will be of benefit company’s historical prices, developments in its costs The authoritative role of municipalities: to customers and stakeholders. and demands for efficiency improvement. In 2015, the – Unambiguous rules must ensure that the water com- Danish Parliament agreed to change the regulations of panies become better at handling their tasks and The company’s activities comprise rainwater disposal the water sector, and the changes have subsequently that the municipalities become better at performing – including climate adaptation projects, production and been implemented. their role as authority. distribution of drinking water, transport and purification of wastewater, emptying of private holding tanks as well The principles of this regulation are: High demands on the environment, health and as safeguarding a balanced and healthy water cycle. 1. Increased efficiency in the water sector security of supply: 2. Support and further development of high standards – New performance-based benchmarking will be We recover, treat and distribute more than 15 million for the environment, services and security of supply introduced. m3 of drinking water and purify more than 30 million m3 3. Less bureaucratic organising and inspection of wastewater every year at eight waterworks and four 4. Better framework for technological development in Consumers’ complaints filing: wastewater treatment plants. The company has a staff the water sector – A water complaints board will be established which of 232 competent, dedicated employees. will be handling disputes about the terms of supply. The text of the settlement agreement consists of the Aarhus Vand’s income is based on user payments in following items: The Supply Secretariat – its role and financing: the form of connection charges, fixed charges, road – With the introduction of differentiated tariffs, the charges, variable water and sewage disposal charges Efficiency gains: companies will pay according to size. and a charge for emptying private holding tanks. Under – Towards 2020, a minimum of DKK 1.3 billion must the Danish Consolidated Act on Water Supply and the be gained. Consolidation: Act on Payment Rules for Wastewater, the income must – The agreement contains a general description of the finance the company’s annual production and admini- Benchmarking: incentive to consolidate. stration costs, financial items and investments. – All-in financial benchmarking and development of – In case of mergers, it must still be possible to the price cap regulation with demands for efficiency introduce differentiated tariffs even across municipal Aarhus municipality’s owner strategy improvements in relation to operating costs as well boarders. The owner strategy for municipally-owned compa- as construction costs. nies – including Aarhus Vand – makes up the overall Technology development: framework for the realisation and implementation of Increased flexibility – R&D must be promoted with the establishment of a the objectives of the individual company. The owner – 2-year price caps for everyone from 2017/18 and good framework within the Danish water sector. strategy establishes directions for Aarhus Vand’s Board 4-year price caps from 2018/19 for the best – R&D is not part of the company’s main activities. and Management, and it is the municipality’s way of ex- – A new correction of the cap pressing its attitudes and expectations of the company. – Simplification of the annual control of the price cap

4 In 2016, the Government launched “Future utility supplies”, its Principle 2: Principle 5: strategy for tomorrow’s utility sector. The strategy lays out a Natural monopolies to be subjected to uniform, incentive- Effective and transparent supervision based on the framework framework for the future regulation of the utility sectors based based financial regulation to create the best possible regula- regulation to ensure development, effective administration on the five principles below: tory framework for more efficient utilities and low prices. and target-orientated analysis of the effects of the framework regulation. Principle 1: Principle 3: Tasks that are not natural monopolies per se must be sub- Good corporate governance to encourage efficient and trans- The strategy contains a number of specific initiatives that will jected to competition as far as possible. Chinese walls be- parent management of the utilities. not only support the overall efficiency improvements of DKK tween monopolies and areas subjected to competition will 5.9 billion annually by 2025, but also maintain a high degree create as much competition as possible which will be of Principle 4: of security of supply. These initiatives represent an improve- benefit to citizens and companies alike. Robust control of the security of supply to ensure a high ment of the framework conditions for Danish companies while degree of continuity of supply, safeguard the environment and ensuring low prices for the consumers. the general health.

A view of the container port and the new Aarhus Ø area

5 Cooperation with Aarhus Municipality

Aarhus Municipality acts as owner, authority and con- The purpose of the owner strategy is to contribute Regarding financial responsibility, the owner strategy tractual party in relation to Aarhus Vand. This involves to: states, among other things, that: a differentiated task management for the municipality, including: – Ensuring consistency between Aarhus Municipality – Aarhus Municipality expects Aarhus Vand to have and Aarhus Vand’s policy, visions and plans a strong focus on financial responsibility and to be – As the owner: What Aarhus Municipality wants – Clarifying Aarhus Municipality’s goals for Aarhus working towards future-proofing facilities, maintaining and expects from Aarhus Vand Vand, including the company’s Board of Directors and developing its financial values. – As an authority: Aarhus municipality’s supervision – Ensuring the best possible effect of the resources – Aarhus Municipality expects Aarhus Vand to have of Aarhus Vand’s observance of rules used within Aarhus Vand’s business area and the continuous focus on development, efficiency – As a contractual party: Aarhus Municipality’s greatest possible value creation in the company improvement and potential synergies beneficial to purchase of services from Aarhus Vand and – Regulating cooperation between Aarhus Municipality consumers and owners. collaboration on projects. and Aarhus Vand within the framework of the rules – Aarhus Municipality expects Aarhus Vand to organise in force at all times, and in respect of the interests of its actions in a way that will not cause an unneces- As the owner, Aarhus Municipality may have interests in any other owners. sarily high risk for the owners. Aarhus Municipality relation to Aarhus Vand’s strategy, results, risk, capital expects Aarhus Vand to focus on fixed, eco-efficient structure, corporate governance, corporate culture, The owner strategy includes a formulation of what it is investment and optimisation of its operation. management remuneration and social responsibility. The Aarhus Municipality expects Aarhus Vand to be working – Aarhus Municipality expects Aarhus Vand to ensure municipality exerts influence on the company through towards achieving: visibility into key performance indicators in selected the annual general meeting, for instance. areas in its annual report and at an annual dialogue – Ensuring clean drinking water meeting with the City Executive Board. Owner strategy – Ensuring stable supply and high customer satis- – Aarhus Municipality can at any time review the Aarhus Municipality formulated a new owner strategy for faction objectives. Aarhus Municipality expects Aarhus Vand Aarhus Vand in 2017 – in effect, an elaboration of the – Contributing to a clean environment to assess the possible consequences for Aarhus goals and objectives established by the foundation of – Contributing to the climate efforts and adaptation Municipality and its citizens of any planning and the company, and a demand on the part of Aarhus City to climate change decisions having a significant financial impact on the Council in continuation of the municipality’s policy on – Assuming social responsibility by ensuring intern- company. Furthermore, Aarhus Municipality expects active ownership of local companies. ships and employment on special conditions a transparent dialogue between Aarhus Vand and – Supplying the citizens of Aarhus with water of high the municipality in matters of considerable financial Aarhus Municipality’s overall objective for Aarhus Vand quality and being among the 30 least expensive importance. is to ensure the greatest possible long-term value crea- municipalities in – Aarhus Municipality expects charges to be fixed at tion and to ensure that the goals set for the operation/ – Ensuring that return and capital structure satisfy a level that secures the capital stock and operations service, finances, security, environmental and social the set goals. while observing the goals set for the development in conditions are achieved. charges.

6 Annual wheel, 2019

The collaboration with Aarhus Municipality

MARCH APRIL MAY

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

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

The board of directors

JAN FEB APR MAY MAY SEP DEC 1st 2nd Board of DANVA 3rd 4th New Year’s board board directors’ annual board board reception meeting meeting seminar meeting meeting meeting

Budget Financial for 2020 statements Corporate 2018 goals for 2020

River Aarhus with the cathedral in the background

7 The Board

Flemming Besenbacher Keld Hvalsø Ango Winther Chairman of the board Deputy Chairman Member of the Professor of nano- Member of the Aarhus City Council science and physics, Aarhus City Council for Socialdemokraterne for Enhedslisten

Johanne Sønderlund Birn Almaz Mengesha Henrik Frier Business owner Member of the Employee Aarhus City Council representative, for Liberal Alliance Aarhus Vand

Mads Thomsen Bjørn Rohde Jens Hørup Jensen Employee Employee Consumer representative representative, representative, Aarhus Vand Aarhus Vand

8 Mission, vision and values

Mission Values Our mission is to offer and develop resource-efficient At Aarhus Vand, we not only manage by goals but services throughout the entire water cycle, creating also by values. Our four ‘WATER values’ – ‘we’ feeling, a climate-adapted, sound environment, growth and responsibility, innovation and dialogue – are part of our export, all of which will be of benefit to customers and DNA. The values are related to the following statements stakeholders. and guidelines for how to fulfil these values.

Vision ‘We’ feeling Aarhus Vand wants to be Denmark’s leading water – We have each other’s best interests at heart company. – We make room for diversity – We are good colleagues and reinforce our sense of Aarhus Vand will focus on developing a value-adding community water company which is environmentally sound, re- – Together we build the best workplace source-efficient, energy-neutral, well-run, innovative and partnership-promoting. Aarhus Vand has an excellent Responsibility basis for creating end-to-end solutions and committing – We keep our promises and stand by what we do to sustainability in relation to the overall water cycle. – We take responsibility for our surroundings The water and wastewater sections each have their – We improve our competencies own strengths and potential and by coordinating them, – We show initiative we can achieve a unique position. Innovation At the same time, optimal utilisation of synergies has – We make room for creativity established a sound basis for streamlining operations in – We dare lead the way a wide range of areas. – We realise ideas quickly – We challenge the way things are done Continued development of the production plant com- bined with extensive participation in research projects Dialogue and highly competent and well-educated employees – We are honest and show respect will help ensure that our surroundings and we see – We are open and trustful Aarhus Vand as the leading water company in Den- – We give and receive praise and complaints mark. – We share knowledge and experience

Two of the key conditions to the company’s success are that all employees at Aarhus Vand work individually and together to implement our goals and to keep our customers in focus in our daily work. Planning meeting in Vandpartner

9 Business Strategy

Our business strategy – Strategy 2020 – focuses on We want to create growth by developing new busi- We want to achieve overall growth of DKK 120 million developing a value-adding water company which is en- ness areas within our core areas of competence where during the strategy period from 2010 to 2020. For 2019, vironmentally sound, resource-efficient, energy-neutral, there is no competition, and where similar solutions and the aim is to achieve growth equivalent to DKK 51 well-run, innovative and partnership-promoting. The products have not already been developed. We want to million. The main growth areas for 2019 are: strategy is based on our vision of becoming Denmark’s establish a link between the existing growth opportuni- – Climate adaptation projects leading water company and on our mission to offer ties and fill a role and a responsibility that is missing. – International projects and develop resource-efficient services in the entire – Resource utilisation of wastewater water cycle in order to create a climate-adjusted and We therefore want to create growth in areas where (energy and phosphorus). healthy environment, growth and export of benefit to we see a need for development, but for which neither our customers and stakeholders. Our mission holds – in we nor others have found a solution. This is no easy Our corporate goal for productivity is an annual 2% addition to developing the company – a desire to create task. It requires a creative and exploratory approach to productivity improvement towards 2020 when it comes value for the surrounding society and to support the development. And this is why our strategy of ingenuity to investment in operations and capital investment. In UN’s global goals for sustainable development. focuses on the development of innovative competencies 2019, productivity will mainly be driven by development in managers and employees. in the IT area and the introduction of digital produc- The strategy has three focus areas: Growth, productivity tion and workflows. In operations, we will continue to and ingenuity. The focus areas identify the three most We will often develop new areas and create growth focus on reducing our actual operating costs. In relation important overall areas in which the company must in close cooperation with water companies, water to capital investment, we will focus on achieving the develop in the coming years and strengthen the focus of technology companies and research institutions. The planned 2% efficiency improvements on projects for the our strategy work towards 2020. This focus is an indica- development of Aarhus ReWater is a good example of renewal of water and wastewater pipelines in coopera- tion that we wish to create development for ourselves such cooperation, the objective of which is to develop tion with Vandpartner. The following strategic projects and that we wish to support growth, export, productiv- the world’s most resource-efficient wastewater treat- support productivity during the period 2019-2020: ity and creativity in Denmark. In addition, it is a political ment plant, an ambition we will not be able to fulfil with – Project portfolio and resource management in the requirement that we keep improving and become more today’s solutions and ways of thinking. That is why we entire Aarhus Vand productive. need a strong innovative force for this project to suc- – Digitisation ceed. The knowledge and technology development we Growth by means of a creative and exploratory foster along the way must turn into a good business, In relation to ingenuity, we want to move towards approach creating new jobs and providing value for many people. being a more resourceful organisation. In 2019, we The focus areas of growth, productivity and ingenuity will measure this move through our assessment of the interact and support each other. By reducing our costs Corporate goals focusing on development and working climate. The corporate goal is to achieve an and resource consumption, we want to produce more progression ingenuity score of 93 per cent. at fewer costs. At the same time, however, we want to For each of the focus areas of growth, productivity and create meaningful and sustainable growth to counter- ingenuity, we have attached a corporate goal which fo- The main strategic projects for 2019 in relation to balance the increased productivity. Ingenuity must form cuses on the development and progression we want to ingenuity are: the basis of productivity and must point out, develop succeed with. The corporate goals express our focused – Aarhus ReWater and accelerate new potential areas of growth. efforts for 2019 and reflect the strategy towards 2020. – Automation of the production of drinking water –

10 including new waterworks in Beder on the whole, the way we create business – Process management. for ourselves and others.

Cross-cutting priority areas to facilitate It is an area with room for improvement, and progress and cultural change where we need to be more conscious of We have selected three cross-cutting priority how to generate earnings rather than share areas which will help to ensure progress in our know-how without paying special atten- the three focus areas. They are: tion to its commercial value. We simply need – New products and services more value creation, earnings and capital in VISION – Water knowledge order to meet our growth objectives. Up to AARHUS VAND WANTS TO BE DENMARK’S LEADING WATER COMPANY – R&D. now, we have funded our growth initiatives by enhancing the efficiency of operations. STRATEGY 2020 These three areas will help to support a cul- In the long term, however, growth must, Focuses on the development of a value-creating water company which is environmentally tural change that will turn Aarhus Vand into: per se, generate more growth – sustain- sound, resource-efficient, energy-neutral, well-run, innovative and partnership-promoting. – A market-orientated company developing able growth that is – that can spread and and offering new services become more useful in cooperation with GROWTH PRODUCTIVITY INGENUITY – A knowledge company developing and others. GOALS FOR 2020 GOALS FOR 2020 GOALS FOR 2020 providing knowledge locally, nationally Grow by Grow by Measured on the effect of and globally To this end, a development programme was 20% 20% productivity and growth – A leading company in the field of applied established for a number of managers and GOALS FOR 2019 GOALS FOR 2019 GOALS FOR 2019 R&D, locally, nationally and globally. key employees in 2018. The programme will Grow by Grow by Obtain an ingenuity stretch into 2019, and the aim is to get the DKK 51 million 2% score of 93% Focus on business orientedness in 2019 participants to reflect on their role at Aarhus One of the key elements in our strategy Vand and how they can help orient their CROSS-CUTTING PRIORITY AREAS is that of developing the company, thus own area and the entire company towards New products and services, water knowledge, research and development shifting from administration to doing busi- doing business while maintaining the com- ness. In other words, Aarhus Vand must be pany’s well-known culture. The programme turned into a market-orientated company. strengthens the participants’ ability to FOUNDATION Our understanding of this transformation is engage in change management and create VALUES: ‘We’ feeling, responsibility, innovation and dialogue continuously changing, but the focal point lasting change. The method involves action- MISSION: Offer and develop resource-efficient services throughout the water cycle in an is the concept of business orientedness. learning through simulation exercises, and attempt to create a sound, climate-adapted environment, growth and export of benefit to Essentially, we want to be more business- there is a strong focus on communication customers and stakeholders orientated and professional in the way we and dialogue as important means to handle development and finances, the way creating new business opportunities. Strategy 2020 – our ‘strategy house’– represents a framework for the direction in we develop new products and services and, which Aarhus Vand wants to be headed.

11 We are integrating the UN’s global goals for sustainability

The UN’s 17 global goals for sustainable We have a strategic focus on the environ- CSR goals 2019 development, which were adopted in 2015, ment and climate change. Therefore, it is is the most ambitious plan for the future of natural for us to integrate the global goals in Clean drinking water – the aim is never to the planet. If the plan is to succeed, every our Strategy 2020 and in the projects and exceed the limit values for drinking water, country, every government and every citizen activities where this is relevant. This applies which would result in a recommendation that must contribute. At Aarhus Vand, we have primarily to goals: water be boiled. worked systematically with sustainability for years, and we are certified as a sustain- 6 – Clean water and sanitation Adaptation to climate change continues able company, which requires that we have 13 – Climate action with increased speed, and 2019 will see full control over the whole palette of topics 14 – Life below waters. the establishment of separate sewer systems within sustainability: Consumer relations, over an area of at least another 80 hectares the environment, the climate and working in Aarhus. This will make us more resilient to conditions, business ethics, human rights flooding caused by cloudbursts and torrential and our contribution to the development of rain. local society. The climate control measures continue, and this means that we reach 55% self- sufficiency in energy at Aarhus Vand in 2019.

Resource utilisation will be further developed so that we will be extracting more than 250 tonnes of PhosphorCare in 2019. PhosphorCare is a phosphorous fertiliser extracted from wastewater which may replace phosphor from mining.

Saving life below waters. The goal is that our plants must never exceed the emission requirements.

12 We focus on the local effort of providing our customers with As a world-leader in the utilisation of resources in waste- Our wastewater treatment is of great importance when it sufficient, clean drinking water. To ensure this, we have been water, we are very ambitious when it comes to the production comes to safeguarding marine life. A clean Aarhus Bay, with working systematically with drinking water quality assurance of green energy and increasing utilisation of more and more the resulting biological and recreational values, depends on ef- through the comprehensive management program “Docu- resources from wastewater. In 2030, we will be self-sufficient ficient purification of very large volumes of wastewater. This is a mented drinking water quality assurance” for more than 10 in energy and CO2-neutral, and we expect to achieve 55% self- task that we perform well, and we assume additional respon- years, and we are certified as a food company in accordance sufficiency in 2019. Our knowledge of energy optimisation and sibility by contributing to the recreational use of lakes, streams with ISO standard 22000. Our aim is to ensure clean drinking resource utilisation attracts attention worldwide. That is why and the port area. We have particular focus on streamlining water also for future generations. This is done through a com- we support capacity building and export of Danish technology the efficiency of the operation of the wastewater treatment prehensive groundwater protection programme and a series of to India, South Africa, China, the United States and Australia, processes and future-proofing our facilities and purification action plans that, among other things, forbid the use of pestici- among others. Another important area is our efforts in relation capacity further. des in confined areas with groundwater interests. to adapting Aarhus to climate change to avoid flooding and other damage. This places heavy demands on the develop- Our knowledge about effective wastewater treatment is already In addition to this, we are working on minimising water loss in ment of our infrastructure, and the solutions will increasingly be in demand globally and will contribute to raising the knowledge our pipeline network, and so far, we have reached a historical created in innovative collaboration with the townspeople, the – and level – of wastewater treatment in a number of countries. low of 5.5 per cent. Globally, we focus our efforts on transfer- municipality and a number of knowledge players. Typical of the This will mean an improvement of marine life on a global scale. ring our knowledge in drinking water production to a number of future development is the fact that the solutions in the area of countries, for instance in the United States through the Water climate adaptation become visible in the cityscape and create Technology Alliance and in Africa through 3VAND. added value in the form of new recreational opportunities for the citizens. Goals 2019 Goals 2019 Goals 2019

Clean drinking water: Climate adaptation: Water environment: Non-observance of the emission None-observance of the limit values resulting in a Areas which change their status from shared sewer to requirements for wastewater treatment plants having an recommendation that water be boiled. Goal: 0 separate sewer system. Goal: >80 hectares impact on the aquatic environment. Goal: 0

Climate action: The energy produced at our wastewater Water environment: Non-observance of the emission treatment plants should cover 100% of the company’s en- requirements for waterworks having an impact on the ergy consumption for electricity and heat in 2030. Goal: 55% aquatic environment. Goal: 0

Climate control measures: The total energy consumption at our wastewater treatment plants. Goal: <23 GWh

Resource utilisation: Production of PhosphorCare. Goal: >200 tonnes 13 Strategic collaboration strengthens us and the industry

Entering partnerships with the water industry is part of creation of additional partnerships as well as cross- and Odder. The main partners are firms of consultants Aarhus Vand’s DNA. We see ourselves as one of Den- pollination of existing partnerships through cooperation. Envidan, Niras, and contractors Arkil, Aarsleff and Vam. mark’s leading water companies in a number of areas, It is about creating a close connection between what In addition to this, Norva24, NCC, Sulzer, LE34 and and we possess knowledge and competencies that we already works well today in existing professional com- FKSSlamson also take part. The partnership, Vandpart- would like to share with others. However, we can also petencies, companies and partnerships. A ginger group ner, involves scheduling, digging up, lining, TV inspec- learn a great deal from others, at home and abroad. was set up in 2018 with the following vision for such a tion, pump stations and measuring. This is why we have close collaboration with other Da- national water cluster: “We want to be a leading, inno- nish and foreign supply companies, private companies, vative network within digital water solutions worldwide”. Our experience with partnering over the past 15 years municipalities, consultants and knowledge institutions. Beside Aarhus Vand, the ginger group consists of a has shown us that we benefit greatly from this type number of water technology companies in eastern Jut- of cooperation. It has meant increased efficiency and By working together with some of the best partners land: AVK, Alexandra Instituttet, Grundfos, Kamstrup, fewer costs. The essential point of the partnership in the industry, we find new ideas, opportunities, and Systematic, Unisense, Aarhus University and Danfoss. agreement with Favrskov Forsyning and Samn For- solutions to the challenges we are facing: limiting energy syning is that it must help improve the quality of our consumption in the production of drinking water and The mission is to build a locally-anchored, yet globally- work and enable us to create innovative measures and wastewater treatment, producing enough energy to get oriented, network of fiery souls, innovators, researchers optimise the work processes to the benefit of all parties an energy neutral water cycle, reducing the emission and decision-makers who, together, will create impor- involved: our customers, the three supply companies

of CO2 from our activities, and using resources such as tant, commercial and societal solutions. The cluster and the external companies. phosphorus in wastewater and developing solutions for should have a strong international and commercial climate change adaptations. focus, be capable of decisive action, have strength and Shared the ability to realise the vision and mission. Digitisation Shared is a service company that provides admini- Through partnerships, we at Aarhus Vand stand every is essential to the growth of the cluster, hence the name strative services to Aarhus Vand, Favrskov Forsyning, chance of succeeding with Strategy 2020. As part of “The digital water cluster”. Syddjurs Spildevand, Morsø Forsyning and Mariager- our strategy, our aim is ongoing development of compe- fjord Vand. The purpose of Shared is to inspire, develop tencies and knowledge, focusing on finding optimal so- Aarhus Municipality gives its full support to the estab- and foster professional cooperation on administrative lutions. This is best done in interdisciplinary, instructive lishment of a national water cluster with eastern services, thus improving the processes and results of and innovative interaction with our partners and other as its epicentre and would like to contribute to the the partners through economies of scale and synergies. stakeholders, for instance through formalised partner- development of specific business areas, among other ship agreements, knowledge networks and alliances. things. The goal of Shared is to create significant added value and financial optimisation through cooperation in order National water cluster Vandpartner to improve the performance and imprint on society of At Aarhus Vand, we see an increasing need for closer In 2016, we established a public-private water part- the partner companies. Shared’s development strategy cooperation in the Danish water industry. For years we nership together with Favrskov Forsyning and Samn for the period 2019-21 focuses on the following areas: have been working on establishing national cooperation Forsyning (the former Odder Spildevand) for the period on water technology based on the current challenges 2016-2021 on the renewal of water supply systems – Expanding the circle of owners and needs of the market. This cooperation is about the and wastewater supply systems in Aarhus, Favrskov – Procurement: End-to-end solution

14 – Development of new services based on the needs and demands of the circle of owners – Implementation of cooperation with SamAqua.

Expansion of the circle of owners will contribute greater volume and critical mass as well as econo- mies of scale for Shared and the participating companies.

Procurement: End-to-end solutions will be im- plemented in line with the expansion of the circle of owners and cooperation with SamAqua. The restricted focus on supply and contract formation will be expanded to include the entire procurement process to help taking Shared to a new league of significant value to the owners.

Development of new services should be balanced against the current services and as requested by the demands of the circle of owners – however, without all owners necessarily having an interest in all the services. It must be clear to any new co- owner that Shared is an innovative, continuously evolving company whose solid experience and competence base constitute the essentials for the creation of value to the owners.

Implementation of cooperation with SamAqua should generate more volume and synergies across the two service companies. Professional knowledge sharing in process management and systems op- timisation will reduce the resource pressure of the individual companies in the long term.

Separation of rain and wastewater in Beder

15 STRATEGIC COLLABORATION ...

3Vand prehensive analyses carried out in recent years by Deloitte, Aarhus Vand also has a cooperation agreement with the 3Vand is a network-based, strategic cooperation between the McKinsey and Copenhagen Economics, among others. Chicago-based wastewater company Metropolitan Water Rec- water companies Hofor, Biofos, VCS Denmark and Aarhus lamation District of Greater Chicago (MWRDGC). The coop- Vand. The name symbolises that the cooperation represents The six water companies will achieve a number of economies eration agreement is about our mutual obligation to exchange the water companies in the three largest cities in Denmark: of scale and be characterised by high efficiency and quality employees and knowledge in specific areas. Copenhagen, Aarhus and Odense. and a fully digitised operation for the benefit of customers, society, the environment and the business community. They With the support of Industriens Fond (the Danish Industry The Danish water sector is changing, and Danish companies will be far more robust in terms of drinking water security as Foundation) and assistance of the Consulate General in in the water sector are facing new and major challenges. Our well as IT security. They will be able to ensure national harmo- Chicago, 3Vand also has an employee posted in California on four water companies share a number of characteristics and nisation of water prices and have more capital for innovation behalf of WTA to promote Danish export within the water re- ambitions for the industry. This is why we have joined forces in and development. They will build know-how to support export source, drinking water and wastewater sectors. WTA California the belief that strong cooperation is the best response to the and develop strong professional environments. With six water must increase knowledge and use of Danish water technology challenges and development of the industry. A cooperation companies in Denmark there will still be sound competition solutions that contribute positively to solving California’s critical where we focus on the development and streamlining of the and a basis for using benchmarking to drive further efficiency water shortage and achieving the goals for the reduction of water sector, regionally, nationally as well as internationally. improvements. greenhouse gases.

We have selected these strategic priorities: WTA The expatriate staff create close cooperation between Danish – Innovation and development At 3Vand, we focus on international growth and export of and American supply companies, public authorities and edu- – Water operator role water solutions, for instance through the Water Technology cational and research institutions in the water sector. – Internationalisation Alliance (WTA), the purpose of which is to support the Danish – Regulation. water industry in their efforts to embark on number of new mar- In 2019, Aarhus Vand will have an employee posted in Sydney, kets as well as to make the Danish water model more known. whose job it is to establish an Australian-based WTA organi- In 2018, the directors of 3Vand drew up a vision for the con- sation for the purpose of establishing cooperation between solidation of the Danish water sector. The four companies see So far, WTA has been established in Chicago and Silicon Valley Danish and Australian water technology companies. The aim is a need for consolidation in the Danish water industry in order in California. In addition to 3Vand, the alliance consists of the that WTA Sydney should spread to the rest of Oceania. to be able to create more Danish workplaces in the field of Danish trade Council under the auspices of the Danish Ministry water technology, increase exports and achieve efficiency im- of Foreign Affairs as well as the companies Danfoss, DHI, PhosphorCare provements and professionalism in accordance with the Water AVK, Landia, Linak, Nissen Energiteknik, Applied Biomimetic, The goal of the government’s resource strategy, ‘Denmark free Sector Reform Act of 2009. Grundfos, Kamstrup, Leif Koch, SkyTEM,I-GIS, Rambøll and of waste’, is that 80% of all the phosphorus from our sew- Stjernholm. age sludge must be recycled. It is an ambitious but important The vision of 3Vand is to reduce the number of publicly-owned goal since phosphorous is a scarce resource, and prices are water companies in Denmark to just six nation-wide, publicly- 3Vand has an employee posted in Chicago, who is to act as soaring. Phosphorous forms part of our cells and bones, and owned water companies. This is absolutely necessary in order a bridgehead for Danish export companies in relation to op- without it, plants would not be able to grow. to accommodate the political demands and will provide much portunities and specific tasks in the field of energy optimisation stronger plants. Moreover, this is in line with a series of com- and energy production in the wastewater sector.

16 In a partnership with Herning Vand, Grundfos, Norconsult and Wastewater Treatment Plant, Scandinavia’s The PhosphorCare partnership has entered a contract with Knowledge Centre for Agriculture and the Danish Pig Research largest plant, with an expected production of phosphorus French Suez, one of the world’s largest water companies, for Centre (SEGES), we have managed to turn the phosphorus in fertilisers of up to 800 kg per day, saw the light of day. assistance in building the phosphorus plant at Marselisborg wastewater into a fertiliser rather than a waste product. Wastewater Treatment Plant based on the technology de- The concept has attracted great interest in Denmark and veloped in the partnership. And Aarhus Vand has entered an In the partnership, we have developed a concept that has abroad. In Denmark, there is potential for constructing 20-30 innovation partnership for the further development of the con- been implemented at Åby Wastewater Treatment Plant, which phosphorus plants, and the export potential is estimated to be cept together with Suez Water A/S and the Danish company is one of the first places in the world to extract the phosphorus DKK 1.6 billion over a 10-year period. New EU legislation on Stjernholm A/S. Suez is now offering the concept on the global in wastewater and resell it as a fertiliser of high quality under recycled phosphorus products will increase the possibility of market and expects to build at least 2-3 plants every year. The the name of ‘PhosphorCare’. Herning Vand has also built extending the concept further. first two plants are now being planned in France. a wastwater treatment plant, and in 2018, an installation at

Searching for leaks at Aarhus Ø

17 Aarhus ReWater – a lighthouse for resource utilisation

A new wastewater treatment plant at With Aarhus ReWater, we introduce a something meaningful and useful. Here, ment plant in an area that is now under Marselisborg in southern Aarhus will be brand-new perspective on wastewater and students and companies from around the water, but which will be filled with sand. In world can toy with new ideas and new an international lighthouse for resource our overall resources. It is a rethinking of alternative 1, the plant will be placed in the how we do good things even better. We business projects. Here, they can launch existing port areas northeast of the marina. utilisation and sustainable treatment of are already today among the world leaders concepts and test what is ready to take In alternative 2, the plant will be placed to wastewater. The new Aarhus ReWater is when it comes to utilising resources in off. With Aarhus ReWater, we will also con- the east of the existing commercial port in expected to be completed in 2026. Situ- wastewater for heating, biogas, electricity tribute to overcoming the major challenge an area that is now under water, but which of ensuring continued growth in Aarhus will be filled with sand. ated close to the city and the sea, it will and fertiliser. But in future, it will also be possible to produce nutrients, proteins, while aiming to become CO2-neutral and be a beautiful landmark of everything we food, chemicals and essentials for the implementing greener practices. In order to ensure consistent progression, are able to accomplish. healthcare industry. In the long term, it is we will be running a number of processes all about keeping an open mind. In need of innovation and procurement initiatives. In the period Our vision is to build the world’s most from 2019-2021, we will conduct an Thanks to its modular and flexible con- resource-efficient wastewater treatment environmental impact assessment which, struction, Aarhus ReWater will be able to plant. This is not possible with today’s in addition to clarifying the environmental develop in line with external requirements solutions and ways of thinking. That is why impact of the system, must enable us to and adjust to the resource utilisation that focus must be on innovation. In 2017, we decide on the final location. As part of the provides most value. Today, we utilise took the first step and invited the most EIA study, we prepare proposals for the energy. In 30 years, however, it will most talented national and international compa- design of the plant. We have some crucial likely be something else that creates more nies, manufacturers, suppliers, research in- decisions to make which will be of vital value. stitutions and entrepreneurs to the project importance to the architectural expression. kick-off. The kick-off event was followed We must, among other things, decide The ambition is that Aarhus ReWater will by a number of “speed dates” where we whether the plant should be covered or be experienced as a renewable resource met with those who had showed an inter- not. The EIA study and the subsequent for the city, for Denmark and for the world. est in the project to find out if there was public consultation and political approval Here the citizens will experience the dif- a perfect match for future cooperation. are essential for when the construction ference that circular technology can make In 2018, we started working on the plans work can begin. – also to life in the Bay of Aarhus. Just as for the location of the plant together with they will be able to enjoy having a welcom- Aarhus Municipality. We ended up with Alongside the authoritative framework, we ing neighbour with spectacular architec- three possible locations: In the main pro- will establish a process and architectural ture and recreational areas. Here, the posal, the plant is placed to the east of the consortium which will lay down the frame- things we normally discard will change into marina and the current wastewater treat- work for the works tenders we will embark

18 BILAG 5

HOVEDFORSLAGET ALTERNATIV 1 ALTERNATIV 2

on from 2020/2021. The consortium is expected to be elected at the end of 2019. Since it is the plant of the future that we are building, we do not yet know the procedural, technical or architectural Renseanlæg frameworks. Therefore, we work with a completely Renseanlæg new and innovative public procurement form, invit- Renseanlæg Lystbådehavn Lystbådehavn ing the best Danish and foreign advisors, contrac- Lystbådehavn tors and architects to develop the plant together with us.

The main proposal Alternative 1 Alternative 2

Inspection at Marselisborg wastewater treatment plant

19 Hosing of sewer lines

20 We are carrying out a digital transformation

The world around us is undergoing As a company we are increasingly met ing job satisfaction and developing new and a better overview of our data. This constant, digital change. With our digital with a demand for improved efficiency – services and solutions. initiative will create value for our service something that will never stop challenging workers at the technical plants. They must strategy, we support a digital transfor- our business model. Digital innovation Digitisation affects all employees be able to solve their tasks by means of mation of the company so that we will takes place with unprecedented ease and Digitisation is a transformation which, mobile equipment with access to a wide be at the forefront of the digital develop- speed, and our customers and the sur- among other things, means a radical range of relevant data. We develop apps rounding community increasingly take on cultural change of the organisation. This for smartphones and tablets which they ment. new technologies and go digital. Therefore, transformation will affect us all – our or- can use to service our pumping stations, in order to achieve our long-term goals, ganisation, culture, production, innovation, for documentation and recording of time. digitisation is a critical and essential trans- strategy work and management style. A formation which creates the foundation for new mindset of “digitally first” is to become In the town of Nye, where we are going Aarhus Vand’s maintaining a relevant and part of our DNA, a central point in our to deliver clean rainwater for toilet flushing competitive position in the market. As an business strategy. It is therefore essen- and laundering, we will utilise data from organisation, we need to adapt to the new tial that the transformation is carried out, remote reading of water meters in homes digital reality. owned and implemented by everyone at to develop new customer services – an Aarhus Vand. alarm, for instance, to signal increased We want to create development in areas of water consumption due to breakage or a digitisation in which Aarhus Vand already We attach great importance to the fact runny toilet, or an app that helps custo- today has a strong and recognised posi- that our employees can see their role in mers to reduce their water consumption. tion. And we want to foster development in – and the value of – the digital transforma- At Aarhus Vand, we will use the data from new areas whose contours we have only tion. And we recognise that we have a lot the meters to optimise our water produc- begun to recognise. We will increasingly of work ahead of us. Therefore, we will tion to prevent water wastage and reduce run Aarhus Vand as a business and exploit create even better working conditions and our energy consumption. the opportunities offered by the shared employee development through training service companies and collaboration with and education, accessible data and IT In 2019, we will strengthen our IT secu- private companies. systems, as well as a clear framework, pri- rity in order to increase our resilience to orities and development through innovative cyber-attacks. With the implementation of With our digital strategy, it is our ambition collaboration and partnerships. Digitisa- Microsoft 365 as a knowledge platform for that Aarhus Vand should become a digital tion will make Aarhus Vand an even more productivity improvements and better shar- role model and trendsetter for the water exciting and challenging place to work and ing of knowledge and data, we ensure that industry – nationally and internationally. In ensure that we can continue to attract new our organisation hangs together digitally. other words, we want to be in the driving and competent colleagues. In addition to this, we will be establish- seat in a digital disruption of the water ing partnerships with Danish and foreign industry. But we cannot – and we will not Data accessibility provides insight companies and consultants who can see – implement this transformation alone, but and value a business potential in developing and only through innovative partnerships that In 2019, one of the key efforts is the crea- testing the digital solutions together with focus on increasing productivity, enhanc- tion of a better structure, ease of access Aarhus Vand based on our digital strategy.

21 We are working on new water solutions

We create added value while adapting Viby and Åbyhøj New waterworks in Beder will be an asset to climate change to the local area

As part of our climate adaptation efforts, we Unlike subterranean pipes, the establishment We are building new waterworks in Beder The new waterworks, which is expected are hard at work on separating rainwater of flower beds and rainwater lakes affects the which will become an important part of the to be ready at the beginning of 2020, will and wastewater in places where this has not daily lives of the residents. When our solutions town – both as a supplier of drinking water be equipped with the latest technology in already been done. In some areas, rainwater is become visible in the local area, we have an and as a beautiful edifice closely connected water production and will live up to the most led into lakes, streams and the Bay of Aarhus obligation to give thorough information to and with the town park and surrounded by trees, stringent demands in terms of drinking water in new pipes, thus bypassing our wastewater involve residents, businesses, organisations streams and green recreational areas. Unlike safety and security. The plant will be built ac- treatment plants. In other areas we handle and the municipality actively in the solutions. in the past when waterworks were considered cording to the same principles as our newest rainwater at ground level or through a combi- We organise road meetings, workshops and technical installations without any interest to waterworks in Truelsbjerg. Here, we were the nation of both methods. events to get the community to help us create neither the local area nor the public, Beder first in Denmark to introduce a completely the right rainwater solutions – solutions which waterworks will open up to and fit perfectly closed and secure production plant with Towards 2040, we are working on the adapta- prepare the areas for flooding and make them into its surroundings. above-ground water storage tanks of steel tion of the suburbs Viby and Åbyhøj to climate even more attractive to live in. instead of underground concrete tanks, which change. Rainwater from the public areas will The waterworks was designed by Cubo pose a potential risk of bacteria and pollution in future be treated at ground level, where Architects A/S as two integrated, brick-clad infiltration. A concept which has subsequently this is possible, rather than in subterranean ranch-style houses with clear associations spread to the whole country. At Beder wa- pipes. This will allow us to use rainwater in of the Viking age. The end walls of the two terworks, we will develop the concept further new and exciting ways in the public areas, for houses consist of large window sections so with a strong focus on innovation – among the establishment of thriving flower beds, for that you can look in and see what a produc- other things, in relation to developing flexible instance, or recreational lakes. At the same tion plant of a waterworks looks like. Paths waterworks with minimal operating costs and time, traffic regulation will be thought into the will be established along with planting to turn maximum drinking water safety. The technical projects in cooperation with the Municipality it into an attractive place. With unimpeded installations for the treatment of groundwater – the introduction of speed bumps or decel- access to the waterworks, we want to draw are supplied by Vand og Teknik A/S with Per eration zones would be two good examples. attention to the importance that the produc- Aarsleff A/S as the general contractor. This way, we create added value in our climate tion of safe and secure drinking water has for adaptation projects and contribute positively a local community. And raise the awareness to the urban development of Viby and Åbyhøj about clean drinking water as a vital resource, with the supply of new blue-green solutions. something to be cherished and never taken for granted.

22 The new waterworks in Beder

23 WE ARE WORKING ...

Rainwater for toilet flushing and laundry in Nye

Nye is a new suburb just north of Aarhus and the result of a Denmark where all surface water from roofs, roads and green the term used for treated rainwater. The pipe is dimensioned strong desire to think and live differently in a green and su- areas is considered a resource that can be used recreationally based on a calculation of the requirement of water for laundry stainable manner. This will be the identity of Nye, an important and in the homes. and flushing of the toilets. The pipe is purple and can easily be element of which is the development and implementation of distinguished from the pipes with drinking water. This way we holistic and sustainable water management, with surface water Professional treatment of rainwater lies at the heart of this minimise the risk of wrong connections. being collected, cleaned and used for laundry and flushing of project, as the water must not pose a health risk to residents the toilets in the homes. This will mean a 40% decrease in the when it is led into their homes. That is why Aarhus Vand is The wastewater treatment plant, which will be operated as a consumption of drinking water – in other words, the ground- in charge of the establishment and operation of the entire visitor’s centre, was designed by Loop Arkitekter, with Silhorko water resource will be taken good care of. system. We will establish a central wastewater treatment plant in charge of the process plant. It is a pilot project which in- where water is cleaned by means of an ultrafilter and treated cludes 650 homes, and we expect to provide secondary water For Aarhus Vand, this is a totally new and innovative way of with UV. So as to safeguard the water quality further, we have to the residents at the end of 2019. working with the water cycle. And Nye will be the first place in developed a new type of pipe for secondary water, which is

The water cycle in the suburb of Nye

24 We are building a strong corporate culture

Our complex and changing surround- Our core values consist of the values appropriate action in unforeseen or serious – “Well on the way”. New members of ings makes it increasingly difficult to we-feeling, accountability, innovation and situations. They can improvise and act in staff will meet with the Director for an dialogue. Our core values are a part of our the best possible way thanks to the core informal talk about the culture and will manage the company exclusively on DNA, a standpoint which ensures a coher- values which enable them to decide what be assigned a mentor who plans the in- the basis of fixed guidelines and pro- ent whole and direction in the daily work to do without having to seek advice or troduction to Aarhus Vand together with cedures. This is why we have supple- and helps us to make the right and neces- permission from the management. the immediate manager. Within the first sary decisions. The common basic values 6 months of employment, everyone will mented our management system with help to build a strong corporate culture We make room for employees’ creativity be called in for a “well-on-the-way inter- a set of strong core values and why and a dynamic organisation: It is a good and competences to unfold, thus increas- view” to ensure that we keep improving we work with value-based manage- starting point for leadership and collabora- ing their sense of responsibility and their our way of welcoming new colleagues. tion in a workday full of change and with development potential. And it gives us a ment. an ever-growing demand for increased flexible organisation – an organisation in – Structured competency develop- productivity. We free up resources when it motion and geared towards absorbing ment. The leaders are equipped to is values rather than rules that guide us in changes and adapting to the customers’ lead employee competency develop- our work. Therefore, we have a strong fo- situation and demands. ment. Competency development must cus on self-management, which gives the be seen as a process rather than individual employee greater flexibility and HR strategy stand-alone courses so as to ensure freedom to decide for themselves. The objective of our HR strategy is to consistency between the competency ensure a well-functioning workplace and to enhancement and strategy, and so that Value-based management is about provide the framework for continued devel- learning is translated into real compe- taking responsibility opment so that Aarhus Vand will continue tences. We are developing “Aarhus Since we defined our core values, we have to be an attractive and dynamic workplace Vand Academy” to be able to offer wide been developing a value-based style of that attracts and maintains skilled staff in a and varied learning opportunities for all management which aims to achieve great- healthy working environment. The strategy employees. er efficiency as well as a higher degree of focuses on these key areas: employee satisfaction. Value-based man- – Recruitment with care. One of the agement is not about whether or not to – An attractive workplace. This will be biggest factors of differentiation in establish goals. To us, value-based man- one of our most important competition tomorrow’s water industry will be the agement is about how we take responsibil- parameters, and our brand as a ability to attract the right people. We ity in order to achieve our goals and how leading water company and a good want to create a balance between we turn management into a joint task. It place to work will be used actively to professionalism and personality based is a question of good leadership and not attract the right competences. We on a holistic approach. We look not only least about being able to take – and create will invest in employees’ working lives at professional competence. We also – followership. With value-based manage- through targeted competency develop- consider whether a candidate has a ment, employees assume a high degree of ment so that we can meet future needs. personality that fits well into an organi- autonomy and become capable of taking sation with value-based management.

25 Organisation

Aarhus Vand is one overall public Plan and Project nuity of supply through operation, service expression ‘Tilknyttet Aktivitet’ (‘associated limited company with a simple, logical Plan and Project is responsible for planning and development activities. activity’). Associated activities are those tasks, implementing construction works, activities that do not fall directly within the organisation divided into three depart- pipe registration and digitisation as well as Business support scope of our main activities, which include ments. for coordinating development activities. Business support consists of HR, Cus- the provision of drinking water, waste- A very large part of the tasks is handled tomer Service, Development and Finance, water treatment and adaptation to climate through projects with internal and external which together and separately support the change. partners. A significant share of the depart- business, both in relation to the customers ment’s construction projects is completed we have internally in Aarhus Vand and Revenue from the associated activities in collaboration with external advisors and to our customers in and outside Aarhus cannot exceed DKK 2 million within the contractors. Municipality. framework of Aarhus Vand; however, we expect revenues significantly above this Production Aarhus Vand TA limit. That is why we are obliged by law to Production delivers drinking water, purifies In 2017, Aarhus Vand established a set up a special company to handle the wastewater and utilises resources such subsidiary company for the purpose activities which exceed the DKK 2 million as energy and phosphorus from waste- of managing the accounts of activities limit. water to the benefit of the citizens and the falling outside the company’s core areas. environment in Aarhus. The department The company is called ‘Aarhus Vand TA’, CFO of Aarhus Vand, Mads Bayer, is the ensures high quality, efficiency and conti- where ‘TA’ is an abbreviation of the Danish director of Aarhus Vand TA. Managing

SHARED A/S AARHUS VAND A/S AARHUS VAND TA Therese Bonney Lars Schrøder Mads Bayer Director Managing director Director

PLAN AND PROJECT PRODUCTION BUSINESS SUPPORT Claus Møller Pedersen Claus Homann Mads Bayer Department manager Department manager CFO

26 director of Aarhus Vand, Lars Schrøder, owns a service company, Shared. and department managers of Aarhus Shared is a service company that pro- Vand Claus Homann and Claus Møller vides administrative services to Aarhus Pedersen make up the Board of Direc- Vand, Favrskov Forsyning, Syddjurs tors. Aarhus Vand constitutes the parent Spildevand, Morsø Forsyning and company which owns the company Mariagerfjord Vand. 100%, and the board of Aarhus Vand constitutes the general assembly. The purpose of Shared is to inspire, de- velop and foster professional cooperation With the regulation of the Danish Water on administrative services, thus improving Sector Act, Aarhus Vand may need the processes and results of the partners another company structure in order through economies of scale and syner- to perform the activities necessary to gies. achieve our strategic goals. The goal of Shared is to create significant Shared added value and financial optimisation Together with Favrskov Forsyning, through cooperation so as to improve the Syddjurs Spildevand, Morsø Forsyning performance and imprint on society of the and Mariagerfjord Vand, Aarhus Vand partner companies.

Aarhus Vand’s employees in numbers 2017 2018 Number of employees 217 232 Converted into full-time employees 207 216 Distribution, women (%) 33 34 Distribution, men (%) 67 66 Number of civil servants 22 22 Average age, all employees 47.7 47.1

Staff turnover (%) 9.8 7.5 Repair work at Egå wastewater treatment plant

27 We are sharpening the focus on financing

With increased focus on the financing We are experiencing a large influx of new a governmental requirement of imposing We will also work systematically for the of our activities in the coming years, we customers in line with the many newly-built an income ceiling. We pay much attention realisation of new revenue areas which houses in Aarhus Municipality. This calls to observing the requirements we are met can help improve our financial situation. will ensure greater consistency between for expansion of our assets, our wastewa- with, the requirements of the municipal This requires a constructive dialogue if we investment, charges and the financial ter treatment plants and waterworks, for wastewater plan, for instance. In light of are to obtain an extension of the very rigid framework. instance, and renovation of our existing these requirements, we have designed a framework for new income areas. assets. In the next few years, we will be financial strategy to ensure the necessary focusing on the construction of new water- financial scope for the coming years. Finally, we will carry out a study of what works in Beder, an ongoing renewal of our is the best financial solution in relation water and wastewater pipelines, adapta- Dialogue on the financial framework to our many and substantial, long-term tion to climate change as well as prepara- As part of the strategy, we want to en- investments, and we will need even tighter tions for a new wastewater treatment plant gage in a dialogue with the financial control of the company’s cash flow. – Aarhus Rewater. authority in the Supply Secretariat and the Danish Energy Agency to ensure that the The great demand for investment exerts in- financial regulation takes account of the creased pressure on our liquidity, not least development in municipalities of growth the increased political requirements for and municipalities in need of fundamental continuous improvement of the efficiency of structural changes. As part of the strategy our operating expenses and fixed we will systematically use business cases assets. In addition to this, and asset management to make sure that we will be under pres- the projects we embark on are the ones sure financially from that will give us value for money.

28 Financial forecast for 2019

2017 saw the introduction of a revised water sector act our operating costs by 20 percent towards 2020. We between the two budgets is that the operating budget which, among other things, purports to provide water expect that we will be able to achieve this goal and at includes depreciation on the fixed assets we have companies with a financial framework for a period of the same time meet the authority’s demands for ef- today, whereas the cash flow budget includes budgeted time instead of an annual price cap. For the year 2019, ficiency improvements. capital expenditures for 2019, as well as repayments. the financial framework, as announced by the Supply The difference in operating costs is due to differences in Secretariat, is somewhat higher than the year 2018. The figure below shows the expected budget for the accounting in relation to the processing of climate costs In spite of this, our water and wastewater price will be operation and cash flow for 2019. The difference and civil service pension. reduced in 2019 – primarily as a result of an increas- ing population in Aarhus.

November of 2018 saw the introduction of a new law on the regulation of the water sector which allows us Operating and cash budgets for 2019 to adjust our finances to the actual costs. The law will come into force in 2020/21, so we are awaiting 1,000 DKK OPERATION LIQUIDITY the practical application of the law. Water and wastewater charges 458,300 458,300 However, we expect the financial framework to be Service fees 69,400 69,400 put under pressure in the coming years, with the Connection fees and other income 79,000 79,000 introduction of additional requirements for efficiency improvements in the water sector. In addition to Total income 606,700 606,700 stricter requirements for higher efficiency, efficiency Other operating items -215,700 -235,500 requirements have been introduced for capital invest- ments and financial items. In particular the demand Interest -303,000 0 for more efficient capital investments and financial Profit/Loss before financial income and expenses 88,000 371,200 items represents a challenge for Aarhus Vand. We have a significant activity level as a consequence of Other operating items 200 200 a considerable increase in the population in the mu- Interest -12,800 -12,500 nicipality, for instance, and we are met with stricter Operating profit/loss for the year 75,400 358,900 demands for environmental and climate improve- ments. Investments -411,800 Repayment of loan -28,325 In relation to the operating costs, we have in our Strategy 2020 a goal of enhancing the efficiency of Positive/negative cash flow for the year -81,225

29 Investment and tariffs

Investments for 2019 Tariffs for 2019 The budgeted investments for 2019 make up DKK The budget for 2019 forms the basis of the water and 411.8 million. There is still major activity in investments wastewater tariffs for 2019. Overall, there is a DKK 0.34 in property development and ongoing renovation of decrease per cubic metre. Annually, this is equivalent to our water and wastewater pipes. In the field of water, DKK 30.00 for the average Danish family. The tariffs are the construction of a new waterworks in Beder is well within the financial framework announced by the Supply on the way. In the field of wastewater, there is special Secretariat. focus on the realisation of the investments planned 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% 11%

13% 36%

62% 76% Service fees (11%) Operating costs (36%) Water and wastewater charges (76%) Capital investment (62%) Connection charges and other income (13%) Financial costs (2%)

30 Variable water price The variable water price The figure below compares the variable water price for 2019 with that of previous years and the DKK per m3 2015 2016 2017 2018 2019 estimates for the coming years. Production of water 10.71 8.90 8.47 8.34 8.14 Wastewater treatment 24.87 21.98 22.89 22.69 22.62 Government charge 6.53 6.25 6.25 6.37 6.37 VAT 10.53 9.28 9.40 9.35 9.28 Total water price per m3 incl. VAT 52.64 46.41 47.01 46.75 46.41

Elements of the variable water price Variable price per m3 incl. VAT and charges

DKK/m3 54 52.64 20% 17% 52

50 51.09 50.04 14% 48

47.01 46 46.75 46.41 46.41 46.31 46.26 Production of water (17%) 49% 44 Achieved Wastewater treatment (49%) Estimated Government tax (14%) 42 VAT (20%) 40 2013 2014 2015 2016 2017 2018 2019 2020 2021 Estimate Estimate

31 Publisher: Aarhus Vand A/S Gunnar Clausens Vej 34 DK-8260 Tel. 8947 1000 [email protected] www.aarhusvand.dk

Design: Grafisk Plus

Photos: Hartmann Schmidt Fotografi

Print: KLS PurePrint

Printed in 400 copies January 2019