At the annual balance sheet press conference of Stadtwerke Gießen AG (SWG), Supervisory Board Chairman Dr Volker Kölb, CEO Manfred Siekmann and Management Board member Reinhard Paul presented the municipal company's results for 2007 and at the same time offered an outlook on the company's future direction.
Firstly, Mr Siekmann explained the development of the result from ordinary activities. This key figure provides an accurate statement about the result of a company's core business. This is because it does not include any external influences that are not directly related to the actual business activity.
A comparison of the result from ordinary activities of Stadtwerke Gießen AG over the past five years shows a continuous decline. In 2007, for example, it was only 65% of the 2003 result, and SWG expects a further decline in 2008. The main reason for this is that the cost increases of recent years have not been passed on in full to customers.
Stadtwerke Gießen AG (SWG) closed the 2007 financial year with a net profit of 4.8 million euros. According to the CEO, this result was solely due to one-off effects. "Our good result for the SWG Group - which includes the parent company Stadtwerke Gießen as well as the subsidiaries Heizkraftwerk Gießen GmbH, MIT.BUS GmbH, Elektrizitätswerk Hammermühle Versorgungs GmbH and Mittelhessen Netz GmbH - is characterised by one-off effects such as the refund of income taxes for a period of several years. We cannot assume that we will achieve a result at a comparable level next year either - which is precisely why this net profit is important for the future of our company," says Manfred Siekmann.
Milestones 2007
Against the backdrop of increased discussion about climate protection and energy-saving programmes, SWG also dealt intensively with these issues in 2007. A few examples:
Thermal residue treatment and energy utilisation plant (TREA)
With the construction of the TREA, the municipal utilities want to secure a further pillar for their heat supply. In 2007, SWG was able to overcome all the hurdles in the authorisation procedure - the TREA has been under construction since February 2008. "We will thus achieve our goal of becoming more independent of the energy procurement markets before the end of this year," says Reinhard Paul.
enerGy service package
The municipal utilities are experts in the efficient use of energy. For many years, SWG has made this knowledge available to its customers in the form of expert energy advice. In 2007, SWG expanded this service even further and combined it into a service package under the name enerGIeßen. SWG thus helps its customers to identify potential savings and provides advice on implementing the recommended measures.
Energy savings guarantee contract for heat supply
In 2007, SWG was able to optimise the Evangelical Hospital's energy system on the basis of an energy savings guarantee contract, thereby achieving energy savings and reducing emissions. The target - to reduce the annual heating requirement by 30 % - was achieved.
Further positive news from 2007:
- Electricity sales to business customers outside the traditional supply area developed positively. Around 20 new business customers were acquired.
- In December 2007, SWG concluded a water supply contract with the municipality of Fernwald for the district of Annerod.
- Energy prices also fell again in 2007: On 1 January 2007 (net) and 1 April 2007, SWG reduced its prices for gas and district heating.
Setting the course for the future: SWG 2015
A look into the future reveals many challenges for the SWG Group. One major challenge will be incentive regulation, which will replace the current cost-based regulation of grid utilisation fees from 2009. The result will be falling grid utilisation fees and thus increasing competitive pressure on the electricity and gas markets. "But if handled correctly, challenges will become opportunities," says Manfred Siekmann.
In order to prepare the company strategically for the coming difficulties on the one hand and to be able to recognise and seize the opportunities on the other, the two members of the Executive Board have initiated a large-scale strategy project together with the entire SWG management team: SWG 2015. The aim of the project is to make the municipal utility fit for the future. After all, the Giessen-based energy and water supplier wants to remain efficient for the people in the region and be the partner for energy, water, local transport and swimming pools.
The 5 strategic goals of the SWG 2015 project:
1. grow profitably
2. make independent decisions
3. sustainably increase the value of the company
4. be efficient and competitive
5. enter into strategically sensible co-operations.
En5: Energy services as a new growth area for SWG
In view of the rapidly developing competition and the resulting pressure on margins, SWG must find new profitable business areas in order to close the resulting gaps. One has already been identified as part of the SWG 2015 project: Energy services for the customer group of housing associations, hospitals, local authorities, districts and public buildings, industrial companies and residential homes.
Both Management Board members intend to launch a sales campaign throughout Hesse in order to acquire customers for these services. "Especially in times of rising energy prices, there's no getting around significant savings in consumption," comments Paul on the opportunities, "and that's why our product will certainly be taken up by many. In this way, SWG can generate significant growth. That's what we have planned for the coming years."
The package is called En5 and consists of the following individual services
1. initial analysis
Inventory and determination of the customer's energy consumption.
2. energy check
Analysis of energy consumption and assessment of savings potential.
3. efficiency model
Development of a technical and economic concept with contractually guaranteed savings.
4. energy
Implementation of the proposed solutions including project management and energy supply.
5. measurement of success
Proof of the effectiveness of all measures and continuous target/actual comparison.