Annual Report Environmental awareness

Transcription

1 Annual Report 2009 Environmental awareness

2 DELTA N.V. ANNUAL REPORT 2009 DELTA N.V. Poelendaelesingel JA MIDDELBURG The Netherlands T : +31 (0) F : +31 (0) E : info@delta.nl W : Entered in the trade register of the Chamber of Commerce in Middelburg under number

3 Profile Strategic framework Key figures Report of the Executive Board to the shareholders, customers, staff and partners Financial performance Corporate social responsibility Operations Energy Waste Management Solar Network Management Other Management issues Risks and risk management Corporate governance Report of the Supervisory Board Members of the Supervisory Board, Executive Board, Corporate Leader Group and Works Councils Contents Consolidated financial statements 2009 Consolidated statement of financial position as at December Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated statement of cash flows Accounting policies Notes to the consolidated statement of financial position Notes to the consolidated income statement Notes to the consolidated statement of cash flows Notes to the operating segments Consolidated companies Non-consolidated companies Company financial statements Company statement of financial position Company income statement Notes to the company financial statements Other information Profit appropriation Auditors report DELTA in financial figures, consolidated DELTA Key figures Definition of financial ratios delta annual report 2009

4 DELTA N.V. is an independent multi-utility provider. Its shares are held by 19 municipalities in Zeeland and Noord-Brabant and by the Provinces of Zeeland, Brabant and South Holland. DELTA employs some 3,285 people. The company is active in the following areas: Energy In addition to electricity generation and energy trading, DELTA supplies gas and electricity to private individuals and business customers. Apart form energy, DELTA provides digital services (internet, telephony, television and radio signals) and, through its Evides subsidiary, water on the consumer market. Through this multi-utility approach, the company serves most of this market in Zeeland. 2 Profile The infrastructure activities necessary to supply the electricity, water and digital services have been concentrated in DELTA s Infrastructure Division. These activities, too, are part of the Energy segment. Waste management DELTA provides a wide range of waste management services, including energy recovery through incineration, the production of biomass, composting and the processing of hazardous industrial wastes. These activities are carried out by the Environmental Division and the Indaver subsidiary. Solar DELTA has been investing in advanced solar energy technology in recent years. These activities are carried out by the subsidiaries Solland Solar and Sunergy. Network Management DNWB, the autonomous network operator, carries out regulated activities for the construction, management and maintenance of the gas and electricity networks and for gas and electricity distribution. Other The Biovalue subsidiary produces biodiesel.

5 In our vision, energy, waste management, water and the infrastructure they require are inextricably linked to personal prosperity and economic growth. The limits of traditional resources and technologies, however, are coming into view. Affordable and sustainable alternatives and solutions are needed in the energy, waste management and water markets. Although the transition towards such a sustainable future will be accompanied by technological breakthroughs, the progress from old to new sources and solutions will be gradual. That is why DELTA is also investing in existing forms of electricity production and waste management techniques. DELTA expects demand for independent energy supplies and sustainable waste management solutions to grow. Strategic framework 3 Policy priorities Multi-utility: increasing convenience ( taking care of things for private and business customers; growth in energy and waste management; complementarity and cohesion between the core activities but only if the individual activities meet the set profitability targets; reduced CO 2 emissions from our operations; effective and efficient organisation with attractive career opportunities for a diverse group of staff; autonomous, independent position that honours the close ties with Zeeland. Firmly rooted in Zeeland The consumer and small business markets in Zeeland form a solid home base. For these customers, we have introduced the multi-utility concept: the combined provision of our service package. Thanks to this approach, we have succeeded in serving the greater part of these markets and a considerable proportion of the corporate market. Outside Zeeland, DELTA is active in the corporate energy (electricity and gas) and waste management markets. Corporate sustainability DELTA is driven not only by profit but also by the environment, safety and health. The company seeks affordable and sustainable energy and waste management alternatives with the ultimate goal of a CO 2 -neutral business by It is therefore exploring CO 2 -neutral forms of energy generation and investing in Waste-to-Energy (WtE) processes in order to help solve environmental problems. Since the transition to a completely CO 2 -neutral business must be taken one step at a time, we are working on making traditional forms of energy generation more sustainable. We are investing in gas-fired power stations and nuclear energy and in clean fossil fuels and transition fuels. The investments in sustainable energy generation must contribute to the security of future energy production. Working at DELTA DELTA wants to be an attractive employer. It promotes staff stability through long-term relations with employees, encourages staff to continuously improve themselves by providing education and training and offers an attractive working environment. DELTA is aware of its social responsibility, especially in the Zeeland region. delta annual report 2009

6 Amounts in million euro s Revenue of which: Electricity supplied Gas supplied Electricity and gas transport Cable, internet and telecommunications Waste management and environmental services Solar energy Biofuel Other 1, , Financial position Gross margin Operating profit Profit before tax Profit for the year Key figures Equity (ex. dividend) Balance sheet total 1, , , ,635.5 Ratios Return on capital employed Return on capital attributable to owners Equity ratio Interest coverage ratio 2.3% 0.6% 40.6% % 7.4% 39.4% 50.8 DEFINITION OF FINANCIAL RATIOS Return on capital employed (ROCE) Earnings from operations plus interest income from financial assets and the share in the profit of joint ventures and associates x 100%, divided by capital employed. Capital employed Non-current assets plus net working capital at the end of the reporting period. Return on equity (ROE) Profit after tax attributable to the owners of DELTA N.V. divided by the equity attributable to the owners of DELTA N.V. Equity ratio Group equity x 100% divided by total assets. Interest coverage ratio Earnings from operations plus interest income divided by interest expense (excluding interest added to provisions).

7 Fuel mix 2009: sales to consumers 17% Coal 40% Natural gas 12% Nuclear 1% Other 30% Renewable energy Fuel mix 2009: sales to consumers and business customers 22% Coal 54% Natural gas 16% Nuclear 2% Other 6% Renewable energy 5 Total revenue by category 2009 Total revenue by category % Electricity sales 45% Electricity sales 15% Gas sales 17% Gas sales 6% Electricity and gas transport 5% Electricity and gas transport 23% Waste management and environmental services 18% Waste management and environmental services 3% Solar energy 5% Solar energy 3% Cable, internet, telecomm. 3% Cable, internet, telecomm. 2% Biofuel 3% Biofuel 3% Other 4% Other Profit for the year Operational profit (x EUR 1 million) (x EUR 1 million) delta annual report 2009

8 6 From

9 Every year the BMC biomass power plant in Moerdijk converts more than 400,000 tonnes of stackable poultry manure into energy. That is more than a third of the national production. Bart Jan Wulfse, managing director of the DEP sustainable energy cooperative for poultry farmers explains: What we used to look upon as waste is now a sustainable source of energy. Unique initiative The initiative for the BMC plant was taken by the poultry sector itself. Wulfse: The poultry farmers put their heads together a number of years ago when it became clear that the volume and composition of poultry manure would become a major problem. What can we do with our chicken manure? Spreading it on the fields wasn t an option. Poultry manure contains a lot of phosphate that is bad for the environment and can wash out into drinking water. But it also contains a lot of energy and has a high calorific value. That s what gave the poultry farmers the idea of building a power station. After long consideration, DELTA committed itself to the initiative and ten years later the plant is a up and running. chicken manure to green electricity 7 According to Wulfse, daring to undertake the project is a testament to all the parties courage. The poultry farmers co-financed the plant together with shareholders DETLA, ZLTO and AE&E. They also pay a gate fee for every tonne of manure they deliver to BMC Moerdijk and have committed themselves to the initiative for the long term. Every participant has undertaken to deliver manure to the plant for ten years. Such a long undertaking is unique, especially in these times. But everyone benefits from it: the poultry farmers have a sustainable destination for their manure, BMC Moerdijk gets the feedstock it needs to produce energy and DELTA buys the green energy. Thanks to this unique cooperation with DELTA, we are connecting the poultry industry with the energy industry. High quality manure Only high quality and stackable manure may de supplied to BMC. Wulfse: You have to take stackable very literally. Some of the chicken manure produced in the Netherlands is wet and some is dry. Only the dry manure is suitable for incineration. When we came up with the initiative, we thought most of the manure would be dry enough but that turned out to be far from the case. That s why we help our members improve the manure s quality. Good, dry manure produces more energy and that is in the poultry farmers financial interests. Wulfse expects a lot from BMC: It s a long-term, sustainable project geared to the continuity of the poultry industry. The industry is taking a more integrated stance on the production of meat, eggs and energy. And on the farmers own attitude to energy. Thanks to this unique cooperation with DELTA, we are connecting the poultry industry with the energy industry and creating added value for society. The initiative is therefore an excellent complement to the vision of both DELTA and the agricultural industry. theme delta annual report 2009

10 The profit for the 2009 financial year came to EUR 7 million (2008: EUR 101 million). This disappointing result was due in part to the economic crisis and changes in government policy. The main cause was a net loss of EUR 110 million in the Sustainable Energy segment (Biovalue and Solland). 8 Report of the Executive Board to the shareholders, customers, staff and partners The net loss incurred by Biovalue was a result of operating losses of EUR 10 million and the writing off in full of goodwill and non-current assets (EUR 46 million). It was decided to write off the assets in view of the negative outlook for the biodiesel market, chiefly because of the reversal of the biofuel blending obligation. In addition, market prices were distorted by the dumping of biodiesel by the Untied States on the European market. A great deal of biodiesel production capacity in Europe was shut down during DELTA is currently considering its position in the biodiesel market. Solland reported an operating loss of EUR 27 million and a non-recurring write-down of a further EUR 27 million. The value of all the wafers purchased, long-term sales contracts and production know-how was written down. Bankruptcies also led to the write-off of uncollectible receivables. Measures have already been taken to turn the tide at Solland. They include a reduction in staff numbers and the renegotiation of the principal procurement contracts. Solland will have to prove its ability to return to profit in It will depend in part on the competition from Asia, market growth and the ability to enter into appropriate partnerships. Results in the Energy and Waste Management segments remained stable. In the Energy segment this was due in part to a positive mark-to-market result. Measures to restore profitability Measures were taken in 2009 to restore profitability in In addition to general cost savings, there has been a substantial reduction in the number of temporary staff, a ceiling has been placed on investments and active working capital and cash management has been introduced. These measures will be continued throughout DELTA in In addition to the internal changes, the marketing strategy has been sharpened up. The successful multi-utility approach in the consumer market has been applied more intensively in the corporate energy and waste management markets. The intensification of the existing strategy and the necessary, farreaching cost reductions will produce organisational changes that raise efficiency and effectiveness to the level the market expects from us. The result will be a more flexible and effective company. Other developments in 2009 We took the gas-fired Sloe power station into operation at the end of This highly efficient power station (59%), with a capacity of 870 MW, was built by a 50/50 joint venture with the French company EdF. Towards the end of 2009, we took the largest solar park in the Benelux into operation. This PV solar panel park in Willebroek (Belgium) has a capacity of 2.6 MW and covers an area of 26,000 m 2.

11 9 Frank Verhagen Jaap Rieter Ad Louter Peter Boerma In December the Minister of Economic Affairs approved the plan to unbundle the company. The plan includes assurances on the network operator s autonomy. Intensive talks were held with the shareholders during the year regarding Evides position within the group. The discussion of how best to secure the public interest of drinking water supplies is expected to continue until mid DELTA successfully opposed the proposed sale by Essent of its 50% interest in EPZ. EPZ s Articles of Association stipulate than only public bodies may hold shares in EPZ. By virtue of this stipulation, both the district court and subsequently the court of appeal prohibited the sale to RWE, a non-public company. DELTA is adhering to this stipulation partly at the insistence of its shareholders. Towards a CO 2 -neutral business in 2050 For DELTA, environmental awareness primarily means becoming a CO 2 -neutral business by We hold this ambition not only to protect the environment but also because we are convinced it is necessary. Fossil fuels such as coal, oil and gas are running out yet demand for energy is increasing. It is predicted that worldwide demand will be about 40% higher in 2030 than in 2004 and will have doubled by Demand in the Netherlands is growing by about 1% per annum, with green energy gaining in importance. If we are to achieve our ambition, we have to take concrete steps now. The main step for DELTA is to build a second nuclear power station at Borssele. We will seek partners in the period ahead and will start work once we have found them and the permit has been granted. A word of thanks I would like to express my appreciation for our staff s response to the current poor market conditions. They again demonstrated their enormous support and commitment to our company. I am aware that the announcement of further measures will not leave them unaffected. We will take the greatest possible care when taking the measures that our company needs. P.G. Boerma Chief Executive Officer delta annual report 2009

12 DELTA s revenue for 2009 came to nearly EUR 2.0 billion, a decline of 11% on The decline was attributable principally to lower energy purchasing and selling prices and to lower energy sales on account of the recession. The financial crisis and the subsequent economic contraction had the greatest impact on the Sustainable Energy segment (solar cells and biodiesel). Sales practically halved in these sectors. Following the loss of subsidy and financing opportunities, demand for sustainable products fell sharply. At the same time, the resultant overcapacity at production companies triggered a dramatic fall in market prices. 10 Financial performance Owing to the disappointing results, the prospects for the biodiesel factory in Eemshaven were reappraised at the end of This led to the expectation that, given the current level of investment, the factory will realise a negative EBITDA of about EUR 5 million until the end of For the sake of prudence, the Executive Board has therefore decided to write off the goodwill present in Biovalue and all its non-current assets in full. Solland suffered a considerable loss in 2009 (EUR 67 million before finance costs and income tax). It was caused by the loss of demand and a sharp fall in the price of solar cells. The loss includes a EUR 15 million write-down at group level of long-term sales contracts and production know-how. DELTA had recognised both following the acquisition several years ago. As a result of bankruptcies, an allowance was formed for uncollectible receivables (EUR 10 million). The inventory of wafers was also written down (EUR 11 million). The waste management activities also felt the impact of the recession. Owing to the lower volume of activity at customers, significantly less waste was supplied for processing. Waste management revenue increased by EUR 53 million, thanks in part to the full consolidation of the 51% interest acquired in the German waste management company SAV (a subsidiary of Indaver). Revenue from both electricity and gas was reduced by substantially lower selling prices. Digital services, infrastructure and network management turned in stable results. Thanks to an appreciation in the value of the trading portfolio (EUR 47 million) and the consolidation of SAV (EUR 77 million additional gross margin), the gross margin widened by EUR 39 million to EUR 630 million. In response to the decline in revenue, substantial cost savings were made in various parts of the business during the year. The effects became clearly visible in the second half of the year. Nevertheless, net operating expenses increased by EUR 140 million in 2009 relative to Of this increase, EUR 73 million was due to the consolidation of SAV. Depreciation and amortisation increased by EUR 99 million, largely on account of impairment losses in the Sustainable segment (EUR 62 million). After allowance for the additional expenses at Solland owing to a number of bankruptcies and the fact that non-recurring additional costs had been recognised in 2008 for the Westerschelde Estuary Crossing, net operating expenses for 2009 were on the whole roughly the same as those for The profit from joint ventures and associates increased by EUR 21 million to EUR 68 million. This improvement was attributable in part to an improvement in EPZ s results (from EUR 1 million in 2008 to EUR 16 million in 2009) and a contribution from the Sloe power station, which came into operation in October 2009 (EUR 6 million).

13 Net finance costs increased by EUR 25 million owing to the lower results and the financing of several major investments (including the construction of the Sloe power station and the construction of a new waste incineration plant). A nonrecurring charge of EUR 6 million was recognised for the early termination of the cross-border gas lease in February The profit for the year came to EUR 7 million (2008: EUR 101 million). Cash flow and investments The cash flow from operating activities increased by EUR 175 million to EUR 305 million (2008: EUR 130 million) thanks to a targeted policy to improve working capital and to the cash inflow from the sale of our high voltage transmission grid to TenneT for EUR 58 million. Targeted measures were also taken for the timely completion of the Sloe power station and the corresponding project financing of EUR 206 million. The level of investments was reduced from EUR 173 million in 2008 to EUR 114 million in Financial position The group s total assets declined by EUR 0.4 billion to EUR 3.2 billion at the end of 2009 (year-end 2008: EUR 3.6 billion). This decline was due chiefly to the release of project financing (EUR 206 million) for the Sloe power station, stronger working capital management and the write-down of assets. Group borrowings could accordingly be reduced by nearly EUR 300 million. The equity position declined from EUR 1.43 billion to EUR 1.31 billion owing to a EUR 26 million negative movement in the hedge reserve, the purchase of a non-controlling interest in Sunergy (EUR 32 million) and the distribution of dividend (EUR 50 million). The equity ratio (equity as a percentage of total assets) improved slightly to 41%. The ratio of net borrowings to EBITDA (an indicator of financing capacity) was equal to 2.0 at the end of 2009, considerably stronger than at the end of 2008 (3.3). Prospects for 2010 DELTA took a series of steps in 2009 to mitigate the impact of the economic recession and the decline in results and to create a healthy springboard for the future. Important measures were: complete freeze on and reduction in temporary staff, which will be compensated for by the employment of permanent staff; limits on filling vacancies; actions to reduce costs and increase efficiency; a ceiling on the level of investments; rollout of a series of programmes to actively improve working capital; renegotiation of existing purchasing contracts. These measures already had a positive impact in 2009 and will continue to feed through into results in As a result, DELTA comfortably satisfied the agreements with its banks in 2009, the equity ratio was slightly firmer and the cash position was decidedly stronger than in The economy measures will be continued in 2010 in order to streamline the company and make it more effective. The number of jobs is also expected to fall will be a year of profit recovery. Our multi-utility strategy will be rolled out further in the corporate market. We will also increase technical and commercial cooperation for our sustainable energy activities. The Solland activities are expected to return to profit in the second half of In waste management, further integration of DELTA Environmental and Indaver will generate synergy gains. The unbundling plan, moreover, will create a fully-fledged autonomous network operator and a commercial operation. DELTA will seek to maximise the synergies already being generated by the multi-utility strategy. In view of the continued gradual economic recovery, the Executive Board expects a strong improvement in the company s performance in A similar improvement is also expected in the Solar segment, although the competition from Asia, market growth and the ability to establish suitable partnerships will be decisive. 11 delta annual report 2009

14 12

15 Waste should not really be called waste. Thanks to creative entrepreneurs like Frank Laarakker and Erik Renes, EcoFuels in the town of Well in Limburg receives tonnes of potato and root vegetable peelings, pulped rotten pears, pomelos and bell peppers every year. Vegetable processing produces a lot of residual flows such as cutting waste, says Frank Laarakker of Laarakker Groenteverwerking, a company that processes vegetables for sale in jars, cans and frozen. We thought it would be a good idea to process the waste in our own fermenter. Because vegetable processing is seasonal, however, it didn t seem feasible at first. But Laarakker did not give up on his ambitious plan. The industry we supply also produces residual flows. We also have an extensive network and a big logistics advantage. So we drew up a plan in 2004 and looked for a reliable partner to help shoulder the substantial investments and risks. The energy of a bell pepper 13 DELTA turned out to be the ideal partner: DELTA has a lot of know-how and expertise in house and is a reliable party. When the fermenter proved more complex than we had thought, DELTA came up trumps. What we do is very important. The plant converts waste flows from the food and catering industries into biogas. The gas can then be turned into heat and electricity. The wastewater is filtered and reused, for example to irrigate crops. The residue can be used in farming and horticulture as a soil improver similar to compost. Laarakker compares the process to natural photosynthesis in which plants use sunlight to make sugars and energy. We, too, produce energy from organic matter. But we do it a lot quicker. We recycle residues in an environmentally responsible manner and make them suitable for the next energy cycle. It s a practical way of getting rid of our waste and DELTA can produce another form of sustainable energy alongside solar and wind energy. EcoFuels has been running smoothly and according to plan since About 7% of our own waste is now fermented. The rest comes from third parties. Energy-rich pulp One of those third parties is Renes AGF Services, a company that came about more or less by chance. Together with his brother Willem, Erik Renes owns Renes B.V., a paper, cardboard and plastic recycler. Some years ago a fruit importer asked whether we could help him dispose of 200 pallets of overripe pineapples. We weren t interested in the fruit but in the cardboard boxes they were in. We ll get rid of the rotten pineapples somehow, we thought. We would separate the fruit from the packaging, pulp it and then sell it as a recyclable product. Renes realised that a lot of fruit and vegetable companies had the same problem. About 4% of all their shipments is not suitable for consumption. It would save them a lot of time and money if we could process the waste locally. It would definitely cut their transport costs. My brother and I bought a piece of land, built a factory and began to process plant waste into pulp. And that s how Renes AGF came about. theme delta annual report 2009

16 For DELTA, corporate social responsibility (CSR) goes without saying. Like every other business, we want to make a profit, but not at the expense of people or the planet. DELTA defines corporate social responsibility as the pursuit of sustainability. We take an innovative and inventive approach to new ways to generate energy and reduce consumption where possible. We also bear an important social responsibility: we want to be an attractive employer offering good terms of employment, safe working conditions and appropriate development opportunities for our staff. Our social involvement in Zeeland is reflected in the sport, cultural, wellbeing, nature and environmental projects we support in our home region. 14 Corporate social responsibility Sustainability DELTA signed the European Declaration of Eurelectric, the European electricity industry association, on 18 March In it, the members of Eurelectric agreed that they would strive to achieve a carbon-neutral power supply by DELTA is going a step further. We want to be carbon-neutral not only in our power supply but also in our entire organisation: both in our energy generation and in our operational management. DELTA measures its CO 2 emissions against a national CO 2 benchmark. The special logo that we use in all our sustainable activities visualises how we will achieve our ambition: step by step. Energy transition Our society is undergoing a transition. The lion s share of electricity is still generated using finite fossil fuels. This will change fundamentally in the next 50 years or so: sustainable energy will become the dominant source of power. The energy industry is playing a leading role in this transition. Energy companies cannot strike the necessary balance between affordability, reliability and sustainability unless they continue to invest. To achieve its goal of carbon neutrality by 2050, DELTA has opted for a combination of gas, nuclear and solar. We have chosen solar because we seek a sustainable source that is affordable in the longer term. Our R&D investments will help make solar energy more competitive than traditional generation methods. We have chosen nuclear because we realise the Netherlands will need a substantial basic production capacity to replace outdated coal-fired power stations in the years ahead. Opting for nuclear energy will also reduce CO 2 emissions. And we have chosen gas because DELTA recognises the need for flexibility, especially during energy transition. A gas-fired power station can respond quickly to fluctuations in supply and demand and is therefore an excellent complement to a product mix in which, for example, wind turbines account for an ever larger share. This strategy is guiding DELTA through its gradual transition towards 100% sustainable energy, subject to the requirements of affordability and reliability. Waste-to-Energy DELTA is also taking concrete steps in Waste-to-Energy. It took the fourth waste incineration line into operation at Afvalverwerking Zuid Nederland (AZN) in Moerdijk in The power station, in which DELTA has a 20% interest, generates electricity for some 235,0000 homes. In the past year, the first pile was driven home for a similar plant in Meath, Ireland. Another impressive example is BioMassaCentrale (BMC) in Moerdijk: this plant will convert more than 400,000 tonnes of chicken manure into 100% green electricity each year to power about 90,000 homes. Not only does it offer a solution to the problem of chicken manure but the innovative flue gas scrubbing system will also ensure that the mineral cycle remains largely in balance. Care for the environment As an organisation, we first determine whether we can prevent waste and how we can make savings on products and energy.

17 15 We have therefore decided to set off the emissions produced by DELTA s staff commuting to and from work on national Sustainability Day by giving 2,500 energy saving light bulbs to all junior schools in Zeeland and neighbouring municipalities in Brabant and South Holland. This action will help the schools save energy and make the pupils more aware of the importance of sustainability. In some municipalities, DELTA also organises evenings to inform home owners and commercial building owners of the national More with Less energy saving programme. The programme s goal is to reduce energy consumption in 2.4 million homes in the Netherlands by 30% by The Own Energy campaign that DELTA launched in 2009 complements this national campaign by enabling consumers and small businesses to use energy more efficiently and sustainably. We provide advice on how to save energy and offer condensing boilers, solar boilers, solar panels and other sustainable products through our web shop. DELTA not only advises on the choice of the right product but also deals with subsidy applications and payments. On request, we also test domestic energy efficiency and sustainability against the Energy Performance Standards. We advise municipalities on subsidy schemes and housing associations on how they can help their tenants save energy. Together with representatives of local authorities and public institutions, DELTA organised the second Sustainable Cooperation conference In September. The first conference had taken the provision of information on sustainability as its theme, the second took concrete steps. delta annual report 2009

18 16 Our offer to carry out a free scan of the state of public lighting in all municipalities was gladly accepted by many municipalities. As well as a study of the lighting equipment in use, the municipalities also received free advice on how to make savings. Another initiative is Sun at School, a joint project launched by DELTA, COS, IVN Consulentschap Zeeland and the Province of Zeeland. As part of the project, pupils in the final two years at a junior school in Borssele were given a guest lesson in solar energy in the autumn of Solar panels were fitted on the roof of the school and the pupils could see the results of generating sustainable solar energy on a screen in the school building each day. This project will be repeated at several other schools in A socially responsible employer DELTA assists and facilitates its employees in order to maximise their deployability and help them make the best possible use of their talents. We also fulfil our social responsibility by equipping them with new skills and competences so that they can carry out other functions within the organisation and thus remain optimally deployable. In 2009 we set up the DELTAflex mobility centre to advise staff who aspire to other positions or promotion within the organisation. DELTAflex also acts as a mediator if staff are surplus to requirements. DELTAflex successfully relocated some 40 people in Move and develop DELTA goes to great lengths to train, coach and, especially, retain young people. With a workforce of more than 1,600, DELTA is one of the largest employers in Zeeland. We are always on the look-out for talented young people. Many young people move out of Zeeland when they complete their education. By offering an annual trainee programme and organising regular development projects, we encourage young people to live in the province and to work for DELTA. New, highly promising members of staff are offered a contract with DELTA following a two-year training course. DELTALENT, our own training organisation, offers employees a varied package of training courses and works in cooperation with schools.

19 Safety We recognise the great importance of good working conditions, not least for the physical safety of our staff. Safeguards have been built into all our business processes and the work is subject to strict safety instructions. DELTA s safety policy is built on the principle of work safely or don t work saw another sharp fall in the number of accidents. The managers in the corporate leader group gained their VCA health, safety and environmental certificates and carried out a series of safety audits. Socioeconomic ties There are many sides to DELTA s strong social ties with Zeeland. Not only is the company an important provider of energy and waste management services, it also works with suppliers, partners, education centres and public authorities in Zeeland (for example in the field of the environment, operational cooperation and participation in energy and waste projects). Measures to strengthen the economy and employment in Zeeland are therefore in DELTA s direct interest. Where proposed economic developments strengthen DELTA s operations, DELTA determines whether and in cooperation with which private partners it can support them. We are already supporting, for example, Economic Impulse Zeeland and BioBase Europe and are strengthening the Nuclear Cluster in Zeeland, including the campaign to win the new Pallas research reactor for Zeeland. 17 DELTA makes significant contributions to the curricula of several education institutions in Zeeland, including the Zeeland Regional Training Centre, because they produce valuable potential employees. In 2009, DELTA invested EUR 700,000 in education and training courses. We also sponsor major events such as DELTA Tour, Film by the Sea and DELTA Week. Since 2009 we have earmarked a budget from the DELTA Zeeland Fund to support sport, cultural, wellbeing and nature and environmental projects in Zeeland. DELTA uses this fund to demonstrate its commitment to society in Zeeland, both in cash and in kind (voluntary participation of staff). DELTA was voted Top Employer 2010 by the CRF Institute in This institute rates companies using five criteria that influence their employees career choices: pay & benefits, career development, training & development, working conditions and company culture. DELTA performed well on all criteria. Efficiency measures Like most other companies, DELTA had to contend with the consequences of the crisis and had to take a series of efficiency measures in The number of temporary employees, for example, was substantially reduced. Only our Call Centre and the Industrial Cleaning business unit still hire temporary staff. In all other departments, temporary contracts were not renewed or the work was assumed by our own people. To make the organisation more versatile and further increase its efficiency, improvement projects were launched in accordance with the Lean Six Sigma quality management methodology. delta annual report 2009

20 The year was one of turbulence: economic recession and changes in government policy did not leave us unaffected. However, there were also exceptional events (such as the opening of the Sloe power station) and encouraging developments (such as the stable results from the Waste Management segment). The main developments in each segment are summarised below. DELTA s core activities are carried out by the Energy and Waste Management segments. Solar energy activities are considered in the Solar section. The autonomous network operator is considered separately in the Network Operator section and the Biovalue subsidiary is considered in the Other section. 1. ENERGY 2. WASTE MANAGEMENT 3. SOLAR 4. NETWORK MANAGEMENT 5. OTHER Generation DELTA Environmental Solland Solar DELTA Network Operator Biovalue Trade Indaver Sunergy Investco Supply BMC Infrastructure services 18 Operations Energy The Energy segment is responsible for all the activities that are directly related to energy, from generation and trade to supply. We supply more than just energy to consumers: DELTA s multi-utility approach also includes water and digital services. The associated infrastructure services are also part of the Energy segment. GENERATION DELTA produces conventional energy at the EPZ coal-fired power station and nuclear energy at the EPZ nuclear power station, both in Borssele. We produce green energy at the biomass power station in Moerdijk. The Elsta power station, a joint venture with Essent, AES and others, combines electricity generation with the production of steam for Dow Chemical in Terneuzen. Production capacity will have to be increased to meet the growing demand for energy. We have deliberately opted for sustainable production methods or, where these are not possible, will make existing methods more sustainable. The EPZ coal-fired power station, for example, is already producing green energy thanks to the use of biomass fuel supplements. We consider nuclear power to be a realistic and responsible source of energy, a CO 2 -free addition to the fuel mix. Energy will also be generated in wind and solar parks. We are investing in solar energy because we consider it to be the energy of the future. In 2009 we built the largest single-roof solar park in Europe at Willebroek in Belgium. DELTA recognises the importance of participating in solar energy projects. By drawing on the expertise of several of our business units, we will be able to complete the transition to a CO 2 -neutral business and the resultant synergy benefits will give us a competitive edge in the market.