ANNUAL REPORT ELEKTRO LJUBLJANA GROUP We are networking with positive energy. 2014 ELEKTRO LJUBLJANA GROUP ANNUAL REPORT 2014 Contents ELEKTRO LJUBLJANA GROUP 2014 ANNUAL REPORT Energy is all around us. You can hear it, smell it, taste it. It can cheer you up, take you anywhere you want to go, connect you with friends …. 3 That is why we are proud of our operation and eager to fulfill our mission: Networking with positive energy. Page Navigation Previous Page Next Page Contents Back to Contents For exit Full Screen View press ESC key. Contents Table of Contents ELEKTRO LJUBLJANA GROUP ELEKTRO LJUBLJANA GROUP 2014 Performance Highlights 6 2.6 Electricity Production 56 2014 Key financial data of the Elektro Ljubljana Group 7 2.7 Other Marketing Activities 57 ANNUAL REPORT 2.8 Capital Investments 58 ANNUAL REPORT 1 Introduction 9 1.1 Letter from the President of the Management Board 10 2.9 Purchasing Goods, Materials And Services 62 1.2 Report of The Supervisory Board 12 2.10 Information Technology 63 1.3 Group Profile 14 2.11 Quality Management System 64 2.12 Risk Management 1.3.1 Composition of the Elektro Ljubljana Group 14 66 2.12.1 Risk management at Elektro Ljubljana, d. d. 1.3.2 Management and corporate governance in the Elektro Ljubljana Group 16 66 2.12.2 Risk management in Elektro energija, d.o.o. 1.3.3 Ownership structure of group companies 17 74 1.4 Major Events In 2014 19 3 Sustainable Development 81 1.5 Corporate Governance Statement 21 3.1 Responsibility To Employees 82 3.2 Responsibility Towards Investors and Financial Institutional Stakeholders 85 2 Business Report 23 2.1 Mission, Vision And Values Of The Group 24 3.3 Responsibility to Customers 86 3.4 Social Responsibility 88 4 2.2 General Operating Conditions 25 5 3.5 Responsibility to the Environment 2.2.1 Macroeconomic environment 25 89 2.2.2 Energy environment 26 4 Independent Auditor’s Report 94 2.3 Performance Analysis 30 5 Financial report 97 2.3.1 Revenue 30 Financial statements 98 2.3.2 Expenses 30 Consolidated balance sheet 98 2.3.3 Assets 32 Consolidated comprehensive income statement 100 2.3.4 Equity and liabilities 33 Consolidated statement of changes in equity 102 2.3.5 Performance ratios 34 Notes to the financial statements 103 2.4 Distribution of Electricity 36 6 Statement on Management’s Responsibilities 124 2.4.1 Scope of the network 36 Abbreviations 126 2.4.2 Power flows 36 2.4.3 Network access 38 2.4.4 Electricity metering 42 2.4.5 Network maintenance 45 2.4.6 Quality of electricity supply 46 2.4.7 Development of the distribution network and advanced services 49 2.5 Sales of Energy Products 52 2.5.1 Trade in energy products on international markets 52 2.5.2 Retail sales of energy products 54 Contents Performance Highlights Key financial data of the Elektro Ljubljana Group LEKTRO LJUBLJANA GROUP LEKTRO LJUBLJANA GROUP ELEKTRO LJUBLJANA GROUP ELEKTRO LJUBLJANA GROUP 2014 2014 2014 We realised a profit of 5 million EUR in 2014. 2014 2.8 % ANNUAL REPORT 3.7 % ANNUAL REPORT ANNUAL REPORT 2.4 % ANNUAL REPORT 3.3 % 2.0 % 1.8 % 2.4 % 1.7 % 1.8 % 1.9 % 1.7 % 1.3 % 44 0.9 % (in EUR) 1,7 6,438 8,825 10,039 4,998 2010 2011 2012 2013 2014 Net sales 271,556,799 448,497,983 569,679,991 518,577,489 561,075,470 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 EBIT 1 5,004,071 10,564,720 11,611,105 14,281,831 9,790,354 Net profit (thousand EUR) Net return on equity (ROE) 2 EBIT margin1 ( %) Net return on assets (ROA) EBITDA 29,226,500 35,503,835 36,606,309 39,631,987 35,326,080 1 Operating profit/net sales Net profit or loss 1,743,792 6,438,243 8,825,140 10,039,426 4,997,833 Value added 3 60,926,204 69,094,394 70,276,957 75,263,248 71,084,667 Capital investments 25,037,539 22,260,734 24,411,770 26,387,949 31,514,846 Total assets as of 31 Dec 492,668,652 514,692,741 524,678,655 531,289,131 525,372,287 Our net revenue increased by 8.2%. Equity as of 31 Dec 266,262,181 268,826,335 275,577,812 283,266,520 285,796,355 Financial liabilities as of 31 Dec 123,846,507 122,776,021 119,667,818 114,541,496 106,777,547 78.3 INDICATORS 539.6 72.8 6 74.6 EBIT margin 4 1.8% 2.4% 2.0% 2.8% 1.7% 77 590.3 70.7 588.7 Return on assets (ROA) 5 - 1.3% 1.7% 1.9% 0.9% 459.1 Return on equity (ROE) 6 - 2.4% 3.3% 3.7% 1.8% Debt / EBITDA 4.2 3.5 3.3 2.9 3.0 268.1 60.1 EMPLOYEES Number of employees as of 31 Dec. 984 964 956 955 947 Average number of employees 1,013 977 965 961 953 ACTIVITY 271,557 448,498 569,680 518,577 561,075 60,926 69,094 70,277 75,263 71,085 Distribution of electricity in MWh 3,935,965 3,921,785 3,833,294 3,892,550 3,874,370 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Number of consumers in the area of supply 326,520 327,689 329,622 330,971 333,264 Net sales (thousand EUR) Value added (thousand EUR) Market electricity sales in MWh 7 3,466,649 6,399,079 8,313,183 8,600,991 10,739,030 Net sales per employee2 (thousand EUR) Value added per employee2 (thousand EUR) Electricity production in MWh 14,352 12,042 13,368 14,653 15,683 2 based on the average number of employees SHARES Number of issued shares 39,160,286 39,160,286 39,160,286 39,160,286 39,160,286 Earnings per share in EUR 0.04 0.16 0.23 0.26 0.13 We invested a total of 31.5 million EUR while reducing our debt by 6.8%. Dividend per share in EUR - 0.0155 0.0560 0.0612 0.0600 Book value per share as of 31 Dec in EUR 8 6.80 6.86 7.04 7.23 7.30 9.2 % 4.2 3.5 3.3 2.9 5.6 3.0 5.0 4.3 5.1 123,847 122,776 119,668 114,541 106,778 31,515 25,038 22,261 24,412 26,388 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Investments (thousand EUR) Debt (thousand EUR) 1 operating profit Investments/net sales (%) Debt/EBITDA3 2 operating profit including depreciation 3 gross operating revenue - costs of goods, material costs, costs of services - other operating expenses 3 operating profit with depreciation and amortisation 4 operating profit/net sales 5 net profit/average assets 6 net profit/average capital 7 excluding electrical power for loss covers and supply to SODO within the supply area of the Elektro Ljubljana Performance Highlights 8 capital as of 31 December/number of shares issued Key financial data of the Elektro Ljubljana Group 8 Contents ELEKTRO LJUBLJANA GROUP ELEKTRO LJUBLJANA GROUP 2014 2014 ANNUAL REPORT ANNUAL REPORT We are networking with positive energy. Energy that you can hear. 1 Introduction 9 Contents 1.1 Letter from the President of activities for the effective management of our operations and improved all our performance indicators, the Management Board i.e. value added per employee, operating efficiency and return on assets and equity. We also continued to pursue our strategy of financial consolidation, which proved very effective ELEKTRO LJUBLJANA GROUP in 2014. Due to the favourable conditions in the banking market following the recapitalisation of ELEKTRO LJUBLJANA GROUP 2014 Dear shareholders, business partners and colleagues, the banking sector, we were able to secure loans under the most favourable conditions possible, 2014 which allowed us to restructure our financial debts using less expensive loans with more favourable Another year has passed, and with it another great challenge. maturities. By settling our expensive existing loans, we were thus able to reduce our total debt below ANNUAL REPORT Early in the year, we were hit by the greatest natural disaster in ANNUAL REPORT 100 million EUR for the first time since 2009. Although we achieved the objective of having an EBITDA- the history of Elektro Ljubljana’s existence. Glaze ice damaged to-debt ratio below 1:2.6, we will continue our consolidation and restructuring activities with a focus roughly 2.5% or more than 400 km of our network. Our response to on securing funds for investments in the construction and reconstruction of our distribution network. this disaster fills me with pride and joy, as our employees displayed remarkable loyalty and responsibility by taking immediate action We are less satisfied, however, with our performance in electricity trading. The market price of electricity to repair the damage despite the harsh conditions. It was the dropped far below our expectations in 2014 due to power surpluses, while the costs associated with quick and selfless actions of our employees that allowed us to electricity trading increased. Our margins on electricity consequently decreased significantly as well. restore power to our customers as quickly as possible despite the As we were not fully prepared for these events, our subsidiary Elektro energija, d.