ANNUAL REPORT 2012

Managing Director’s Review

Business Review - Resource Recovery

Resource Recovery is an integrated waste management business providing collection, recovery, recycling, disposal and advanced technology treatment of waste services. Waste collection services operate under the AES brand, providing both domestic waste management throughout the Midlands, South East and Mid West regions, and commercial waste management nationwide.

Resource Recovery

Challenges

Price
In the current economic climate the waste market is under increasing pressure. Reduced waste volumes and a fragmented landscape with too many operators have caused downward pressure on prices.

Increased Operating Costs
In a difficult trading environment, significant increases in the landfill levy and fuel costs impacted negatively on margins.

Falling Waste Arisings
Demand from key commercial markets remained suppressed, with waste arisings continuing to fall. The average yield per serviced household also decreased.

Regulatory Challenge
European Union (EU) and local Government regulation continues to affect the business in the short term. Of particular significance is the EU Landfill Directive for reduced landfill volumes and the landfill levy increase. As Resource Recovery’s landfill diversion increases this will become less of a challenge for the business.

Achievements

Customer Growth
The residential business delivered growth, with customer numbers just under 100,000 by year end. This was principally achieved through the acquisition of the residential businesses of Kildare and Wexford County Councils. These new customers were integrated seamlessly. Additional growth was achieved through successful infill in existing territories. Combined, these have helped to balance the suppressed demand and to contribute to economies of scale.

Online Customer Self-Service
Customer service levels have improved significantly, particularly through the online channel. The launch of the ‘My Account Online’ service and the level of customer uptake exceeded expectations for residential customers after just four months. It will be developed in the years ahead to ensure improved customer service efficiency and cost reductions.

Sustainability
The drive towards increased sustainability saw the first stages of the commissioning of a 25,000 tonnes per annum brown bin composting plant at Drehid, Co. Kildare. The feedstock for this plant will be supported by a continued focus on increasing the business’s brown bin (organic waste) collection.

Commitments

Growth
The business is committed to increasing market share through organic and acquisitive customer growth. The business will develop innovative and value based solutions by working with customers to meet their waste management needs.

In the commercial market the business will place particular emphasis on the development of opportunities in the manufacturing and food sector industries.

Sustainability – Landfill Diversion
Investment opportunities in waste treatment infrastructure will be pursued, specifically the development of a Mechanical Biological Treatment (MBT) plant at our Drehid (Co. Kildare) facility for which planning and waste license applications were recently submitted.

Integrated Internal Use
Where possible, waste materials will be retained for use as raw materials for Bord na Móna’s Retail and Powergen businesses.

Industry Leader in Customer Satisfaction
The business has a clear focus and understanding of our customer needs. Today AES provides service to approximately 100,000 domestic and over 5,000 commercial customers and is continually developing the key competencies needed to successfully meet customer needs and become the industry leader in customer satisfaction.