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Analysis of the Waste Management Area

The Waste Management segment shows a 5% decrease in EBITDA compared with 31 December 2010, as seen in the table below:

(€ million)31-dic-1031-dic-11Abs. Change% Change
Segment EBITDA195.1194.2-0.9-0.5%
Group EBITDA607.3644.8+37.5+6.2%
Percentage weighting32.1%30.1%-2.0 p.p. 

The Hera Group operates in an integrated manner throughout the entire waste cycle, with facilities that include 79 urban and special waste treatment and disposal plants.

Compared with the previous year, the stake in Enomondo S.r.l. was consolidated to 50%, which involved a new 120 thousand tonne biomass power plant and a composting plant, while the results of the leasing of the business unit of CAM, which operated in environmental hygiene services, are no longer considered within the scope of the Marche Multiservizi Group.

An analysis of the operating results achieved in the Waste Management segment is shown below:

Income statement
(€ million)
31-dic-10 % inc.31-dic-11% inc.Abs. Change% Change
Revenues703.1 740.1 +37.0+5.3%
Operating costs(386.0)-54.9%(412.7)-55.8%+26.7+6.9%
Personnel costs(147.2)-20.9%(148.4)-20.1%+1.2+0.8%
Capitalised costs25.33.6%15.22.1%-10.1-39.9%

Revenues as at 31 December 2011 show an increase of 5.3% compared with the same period in the previous year, going from €703.1 million to €740.1 million thanks to greater revenues from electricity production and increased revenues from urban hygiene through rate adjustments to cover the increase in services requested, in spite of lower volumes of waste disposed of.

Increased operating costs are linked to the entry of Enomondo, the different accounting methods for the sale of green certificates in Herambiente, and increased operating costs both for the disposal business and the urban hygiene business through the increase in sorted collection activities.

The decrease in Capitalised costs, which went from €25.3 million to €15.2 million, is mainly connected to the decrease in work on plants and works by Group companies, particularly linked to the completion of the new waste-to-energy plants built.

Separated waste collection, in terms of percentages of total volumes collected, reached 50.2% at the end of 2011, compared with 47.8% for the same period in 2010, an increase of 2.4 percentage points. The percentage represented by separated waste collection for the whole of 2010 was not yet affected by the modification to Regional Government Decree 1620-01 which excludes the non-reusable fractions of multi-material collections from the calculation of separated waste collection. Comparing like-for-like data, the percentage of separated collection increased in 2011 by a further 0.3 percentage points.

Below is a breakdown of the volumes sold and treated by the Group in 2011 compared with the same period in 2010:

Quantitative Data (thousands of tonnes)31-dic-10% inc.31-dic-11% inc.Abs. Change% Change
Urban waste1,864.132.7%1,808.735.4%-55.4-3.0%
Market waste1,608.528.2%1,573.330.8%-35.2-2.2%
Commercialised waste3,472.660.9%3,382.066.2%-90.6-2.6%
Plant by-products2,230.539.1%1,725.133.8%-505.4-22.7%
Waste treated by type5,703.1100.0%5,107.1100.0%-596.0-10.5%
Waste-to-energy plants 800.614.0%923.018.1%+122.4+15.3%
Selection plants and other322.25.7%299.25.9%-23.0-7.1%
Composting and stabilisation plants463.88.1%574.711.3%+110.9+23.9%
Stabilisation and physical-chemical treatment plants1,218.621.4%815.016.0%-403.6-33.1%
Other plants1,468.225.7%1,226.924.0%-241.3-16.4%
Waste treated by plant5,703.1100.0%5,107.1100.0%-596.0-10.5%

The analysis of quantitative data shows a 2.6% decrease in commercialised waste, due to both the fall in urban waste (-3.0%) and in market waste (-2.2%) following the difficult economic climate. The decrease in by-products from plants, on the other hand, needs to be put in the context of the weather conditions: specifically, the lower rainfall in 2011 resulted in the creation of less leachate.

The development of disposal flows recorded should also be stressed, since, as a result of the availability of new WTE plants and the further development of separated recovery and collection activities, it saw significant growth in both volumes destined for WTE plants and composting plants, allowing a decrease in the use of landfills.

EBITDA for the Waste Management segment decreased by €0.9 million compared with the previous year, going from €195.1 million in 2010 to €194.2 million in 2011. This result is attributable to the lower volumes disposed of, in spite of the increased revenues from electricity production and the improved results in the urban hygiene business.


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