Waste Management Segment

Economic environment for the waste management sector

In contrary to what initially were unfavourable forecasts due to the preceding COVID-19 lockdowns, very good economic conditions prevailed in the 2020/2021 fiscal year.

Both nationally and internationally, the issue of the circular economy continues to be the focus of attention. In order to close the gap between waste management and production, the legislator is planning mandatory requirements for reusable or recyclable product designs, including the use of secondary raw materials. Corresponding targets defined at European level in the form of the Circular Economy Package pose major challenges for the actors involved, for example, in the establishment of new collection and sorting channels.

Plastic packaging is a particular focus: in order to reach the EU target of a 50% recycling rate in 2025, recycling must be doubled from 75,000 tonnes to 150,000 tonnes in the next five years. In addition, a new independent quota for separate collection of PET beverage bottles becomes mandatory as of 2025. In order to be able to achieve these high targets, the current draft amendment to the Waste Management Act envisages the mandatory, staggered introduction of reusable packaging quotas in the food industry as well as a commitment on the part of the beverage industry to charge a deposit on PET and aluminium containers as of 1 January 2025.

The import ban on various recyclable material fractions imposed by the Chinese Ministry of the Environment on 1 January 2018 and subsequently by other Asian countries continues to exert a strong influence on the entire waste management sector, resulting in shifts in global volume flows all told. The resulting high volumes of lower quality plastic waste ensured that all waste incineration plants across Europe continued to operate at high capacity in the reporting period. From today's perspective, this development can be considered to be sustainable, since, the statutory environment for exporting these waste fractions abroad has been tightened.

In contrast to the previous year, there was a clear reversal in the trend for recycling materials. The previously low paper prices due to market oversaturation – caused by the import restrictions discussed above and other factors – led to market concentration in the packaging industry. Due to the pandemic, the demand for mail-order products rose sharply, meaning that important production capacities were now lacking; this in turn resulted in a significant price increase, which was intensified by the increase in economic growth. While the Wiesbaden index for paper and cardboard packaging was still at 66.2 at the end of the 2019/2020 fiscal year, it rose steadily to 195.5 by the end of September 2021. The development of the prices for scrap metals was similarly dynamic; as a result of the global shortage of industrial and precious metals, prices have risen continuously, and in some cases sharply, since the beginning of the reporting period. The reason for this is the current high level of productivity in the construction industry, for which numerous economic stimuli were placed by the public sector in the past fiscal year.

Business development in the Waste Management Segment

In the 2020/2021 fiscal year, sales revenues in the Waste Management Segment amounted to EUR 256.2 million. Compared to the previous year, this represents an increase of EUR 232.7 million or 10.1%. EBIT increased by EUR 2.5 million to EUR 29.6 million compared with the previous year (EUR 27.1 million).

The increase in sales revenues was primarily due to the dynamic price development for recyclable materials such as paper/cardboard and scrap metal. This was accompanied by record sales revenue growth for these fractions in the 2020/2021 fiscal year, after prices had reached historic lows the year before. Sales revenues also grew in commercial and industrial waste, hazardous waste and the services offered.

While the previous year's result was positively influenced by the insurance payments made after the fire at the sorting plant in Hörsching, the following positive one-time effects occurred in the past 2020/2021 fiscal year: in the 2020/2021 fiscal year, reversals of impairment totalling EUR 4.7 million were made for waste incineration plants due to increased earnings expectations in the district heating supply sector and the now sustainable assessment of the positive market developments that have prevailed for some time.

Despite the lower throughputs at the two waste incineration plants, operational results improved due to the positive price development for recycling materials and higher profit contributions from classic waste management services.

Utilisation of the waste incineration plants

Incinerated waste volume

in 1,000 t

The waste incineration plants at Wels and Lenzing achieved a throughput of about 585,500 tonnes of incinerated waste. This represents a decrease of 6.1% compared with the previous year. Among other things, the increased plastic content in the waste contributed to a higher calorific value and thus lower throughputs in the waste incineration plants. Due to unplanned shutdowns, fewer operating hours were recorded than in the previous year.

In addition, the annual inspection cycle of both incineration lines at the Wels facility was changed in the second half of the 2020/2021 fiscal year. For the second incineration line, which was previously overhauled across fiscal years, this resulted in more shutdown days in the reporting period, which also had a negative impact on throughput volumes. At the Lenzing waste incineration plant, the annual inspection took place as planned.

In the reporting period, the waste incineration plant in Wels distributed 234 GWh of heat (previous year: 198 GWh) to the district heating network of the town of Wels and to one other key account customer. Electricity procurement totalled 194 GWh (previous year: 206 GWh). The decrease is due to the change in the inspection interval of the second incineration line.

The treatment plants for hazardous waste in Steyr were again very well utilised in the year under review. In terms of maintenance, the focus was primarily on the renovation of the CPO plant (chemical/physical treatment plant for organic waste).

Total waste volume handled

in 1,000 t

Compared with the fiscal year 2019/2020, the total volume handled in the Waste Management Segment increased by approx. 10.9% to a total of some 1,876,000 t (previous year: 1,691,000 t). While the volumes of commercial waste and recycling materials in Austria increased, there was a decrease in volumes in South Tyrol.

In addition to cooperation in projects to further develop the recycling of used plastics, work on several digitalisation projects was also pushed forward. In addition, the conversion of the paper sorting plant in Linz was completed, and modernisations and expansions were realised at several locations in the reporting period.

Preparations started at the Wels site for the planned further expansion of district heating extraction from Welser Abfallverwertung (WAV), in order to be able to supply the city and the neighbouring areas in an even better way looking forward.

In the year under review, construction work was largely completed for the relocation of the Energie AG Oberösterreich Umwelt Service GmbH (Umwelt Service GmbH) headquarters from Hörsching to the Wels waste incineration plant. The first stage of the relocation began in mid-October 2021.

The Federal Competition Authority (BWB) is conducting investigations throughout Austria into the area of collection and transport in the waste management industry. In the course of these investigations, the premises of Umwelt Service GmbH at the Hörsching site were also searched on 16 March 2021. Umwelt Service GmbH is actively involved in the investigation and has assured the BWB of its full willingness to cooperate.

At the Neumarkt location in South Tyrol, process optimisation through digitalisation was further advanced in the past fiscal year. Despite declining recovered paper volumes and volatile substitute fuel production, it was possible to improve the result compared to the previous year. Glass sorting saw a similarly positive development.

At WDL-WasserdienstleistungsGmbH (WDL GmbH), the contract for the supply of drinking water to the greater Wels area was extended on a long-term basis. The general conditions for drinking water supply and waste water disposal in Austria were largely stable during the reporting period. At WDL GmbH, the main focus was on maintaining the secure supply of drinking water and further developing the services offered.