Annual Report 2017

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Q&A with the Managing Director

Managing Director, Mike Quinn, answers the key questions that have been put to him in FY17.

Q How did Bord na Móna perform this year?

We had a strong and solid year and performed much better than anticipated – given this was our first full year out of PSO. We had to face some significant challenges both internally and externally but we continued to innovate, to make a number of acquisitions and investments as we worked together to deliver on our mission to lead the change to provide more sustainable resources to Irish consumers.

Revenue dropped for the year to €406 million and operating profit was down to €38.3 million (before exceptional items), primarily due to exiting the PSO in Edenderry. Some of our businesses experienced a challenging year with external factors having a significant impact on their profitability, such as another mild winter impacting fuel sales. However, on the more positive side, Powergen, Resource Recovery and Biomass experienced very strong and productive years. Our waste collection business, AES, hit record customer numbers and Biomass exceeded its tonnage target by 19%, supplying 456,000 energy tonnes.

Despite the many challenges throughout the year, we continued to invest across all areas of the business to ensure we created a unique, robust and solid platform for growth in the future. Investments took place in all business units and included rail refurbishments, workshop upgrades and the purchasing of 17 new trucks for Resource Recovery.

We made a number of significant acquisitions including the White Moss horticultural business in the UK, a 50% stake in Electricity Exchange and the Pacon skip hire business. We also entered into a number of partnerships such as a 500MW solar development program with ESB and the wind farm located in Sliabh Bawn with Coillte. All of these investments will put us in a much stronger position going forward and are a key part of our strategy to deliver on our 2030 vision.

This year also saw our continuous improvement programme really starting to gain traction across the business. This programme has allowed us to apply lean principles and value stream mapping to our processes and this has enabled strong focus on cost and value in everything we do, all of which contributed strongly to our overall result.

It’s important to remember that we are on a significant journey of change to ensure the long-term viability of our organisation and there are going to be highs and lows along the way. It is my responsibility and duty to take the long-term view. That includes making some extremely tough decisions, such as the closure of the Littleton plant. This was a significant event in the last few months and one which has had an enormous and very personal impact on the people affected.

But our focus must also be on the long-term and on the bigger picture so we can provide long-term, sustainable and relevant employment. Our investment strategy, in Ireland and internationally, needs to have one sole objective – to support current and future jobs in the Midlands. That is our priority.

A solid platform for future growth

Q Were there any achievements that particularly stood out for you in FY 17?

We have delivered a great deal in the last year – across all areas of the business – but there have been four key achievements that have really stood out for me:

1. The acquisition of White Moss in the UK

This was strategically significant as it:

Following the acquisition of White Moss, we discovered regulatory compliance issues at the Company’s Liverpool sites, which were not evident prior to completion of the transaction. This matter is subject to litigation with the former owners of the business. All new product is now fully compliant and we are in an agreed process with the Environment Authority to address historic non compliances. While we are still working on resolving the operational issues identified, I remain confident of ultimately achieving a positive outcome which will validate our strategic intent in acquiring the business.

2. The continuous improvement projects completed by Peat

Peat ran a number of very progressive projects throughout the year which have generated real savings for the company. The 5s workplace orgainisation methods implemented in the workshops are world class. They’ve taken them from a very dilapidated condition to state of the art.

3. The development of the business case for a biomass pellet plant in the US.

This last year has seen a lot of work by the Biomass business around the potential investment in a wood pellet manufacturing plant in Washington, Georgia, USA. The site has been chosen due to its experienced skilled labour force, the availability of raw material and the vast quantities of trees located there. Unfortunately, there currently isn’t sufficient biomass in Ireland to allow us to build a similar plant here but I am looking forward to this changing over the next number of years when private forestry comes on stream.

4. The acquisition of the Pacon skip business

The acquisition of Pacon Skip Hire assets and its integration into AES has been efficiently and seamlessly handled and managed by Resource Recovery. This acquisition will allow the business to grow significantly as it will be able to service additional commercial and domestic skip customers in new locations in North and South County Dublin, Louth and Meath.


We are on a significant journey of change.

Q How would you assess the business’s strengths today?

We have a number of strengths across the business but it’s our people, their talent, their experience, their commitment and their hard work that make us the business we are today - and shape the business that we intend to be in the future.

We also have three unique and core strengths which give us genuine differentiation in a challenging market.

1. Our land bank: much of our business is ingrained in the land, from our renewable energy base, to our Resource Recovery faciltiies.

2. Our scale: we’re a large company and we can bring that to bear on our supply chain both at home and overseas.

3. Our reputation: we are a brand that people trust and welcome into their communities and it is important that we continuously deliver on their needs, live up to their beliefs and exceed their expectations.

We’re a much more resilient company today than we were a few years ago, and there is a renewed confidence across the business. We believe we will be the very best at what we do and we are committed to leading the change to a more sustainable future for the many different communities that we serve around Ireland.

Q Which areas of the business need more focus?

We need to continue reinforcing our brand in the hearts and minds of our many stakeholders - as well as managing and enhancing our reputation overall. We need to build on all the great work we did around this last year and continue to bring our values to life by being resourceful, engaging and respectful across all customer interactions and touchpoints.

The structuring of and reporting on corporate responsibility is another key area of focus and we have a number of corporate responsibility work streams in place which are starting to ramp up. It’s very early days for us, but as a company we need to be more engaged in corporate responsibility practices. This ethos has always been core to Bord na Móna’s activity since our inception and going forward we want to lead by example in how we approach corporate responsibility, the issues we address and the communities with which we engage.

Q How is Bord na Móna changing now and for the future?

Our vision is to enable a more sustainable Ireland by harnessing our natural resources. That is our one aspiration for the future. Our mission at Bord na Móna - and how we plan to achieve this ambitious vision - is to lead the change to more sustainable resources.

This means making a number of changes around how we approach the transition to green energy, how our core businesses become more sustainable and how we organise and engage with our workforce and local communities.

We announced in 2015 that we would cease to harvest peat for energy purposes by 2030 – which is still our goal and trajectory. Over the short and medium term we will be rolling out renewable energy on our land bank which will consist of solar farms, wind farms and battery storage. We want Bord na Móna, with its 200,000 acres of land, to lead the way in energy generation in this country - as we move away from fossil fuels to green energy.

On the social side, we envisage that more land will be rehabilitated and given back to communities for tourism and amenities. Consistent with the circular economy our Resource Recovery business is going further and further up the chain in terms of recycling. So, our journey to more sustainable businesses has not only begun but is well under way.

Our employees and our communities are also a crucial part of our successful transition. Our goal is to continue to employ at least the same number of employees we have today and to potentially grow this figure by 2030. There is no company without its workforce and we will continue to invest in employees and play an active role in our local communities.

As an organisation, our mind-set is also changing. We want to be, not just no. 1 in every market in which we operate, but also be the best at what we do. This isn’t just about profitability, it’s also about how we engage inside our business and locally. Our priority is to make sure we’re a good place to work and a good local partner.


We want Bord na Móna, with its 200,000 acres of land, to lead the way in energy generation in this country.

Q How is FY 18 looking?

We have started the year on a very positive note with the announcement of our first venture into solar following our partnership with the ESB - bringing together the expertise of two leading commercial semi-state companies in renewable energy with significant projects that will support Ireland’s energy transition.

This partnership will allow us to develop solar power in four locations in Roscommon, Offaly and Kildare, which will provide renewable energy to power the equivalent of 150,000 homes. It also means we can access part of Bord na Móna’s land bank in strategic locations across the Midlands which are suitable for large scale solar energy projects.

We also welcomed the decision by An Bord Pleanála in May to grant planning permission for the proposed wind farm at Cloncreen, Co Offaly – which we envisage will generate enough electricity to power the equivalent of 30,000 Irish homes per annum for 25 years. An important part of the construction of this new wind farm will be to continue the process of engagement with the local communities, which we started in autumn 2015.

Looking ahead there are a number of anticipated developments which will have significant impact on how we evolve going forward.

These include:

i Launch of the Renewable Heat Incentive (due 2017) – which offers great opportunities for two of our divisions - Fuels and Biomass - the opportunity to become a major biomass supplier.

ii A new support program for renewable energy (due later in the year), which will have a big impact on our solar projects and our future wind projects.

iii The introduction of the smokeless coal ban in September 2018, for which our fuels business is preparing.

iv An opportunity to get more involved in new areas of recycling. There are a couple of interesting projects in the pipeline around recycling other forms of waste which would complement the Resource Recovery business and we are actively pursuing several acquisitions in this sector.

v The non-financial reporting directive is due this year and Bord na Móna is committed to being part of that and as such will have reporting requirements beyond pure financial, into social and environmental areas.

Q And what will the company’s focus be over the next two to three years?

The next two to three years are all about delivering. It’s about action, rolling up the sleeves and making our five-year plan happen.

In my first year at Bord na Móna I was involved in getting to know the business and putting an aspirational plan together so we could paint the picture of a future that was ambitious yet attainable. Last year we locked down what we believe to be the five-year plan that will get us closer to that future and take the company forward in the direction it needs to be in.

Now it’s about carrying out these tasks and doing what we said we would do. This means that by 2020 we will have a successful and profitable company - with more robust and solid foundations - which will enable us to reinvest back into the divisions and deliver on our 2030 vision.

It’s important for us to realise that whilst we have a social responsibility to the people in the company, we also have a commercial responsibility. We have to operate as a productive and profitable business which will allow us to innovate, reinvest in the businesses, in our people and drive growth. There has to be a balance between our social, commercial and environmental responsibilities if we are to have a sustainable and efficient business leading the change into the future.

Q If you look forward 5-10 years, what sort of Bord na Móna do you envisage?

The growth and success of two of our businesses, Powergen and Resource Recovery, will have a significant impact on the shape and scale of the Bord na Móna of the future.

Powergen has a major role to play for the State – purely because of our land bank. We will have a significantly larger wind portfolio, significantly larger / rolled out solar energy programme leveraging the partnership announced with ESB – and we will also be looking at other opportunities such as battery storage.

Resource Recovery will continue to grow, both as the economy grows and because of some core projects we have in the pipeline.

Fuels will be the leader in renewable heat in the domestic solid fuels market and Horticulture will enjoy continued growth primarily from exports.

Our two raw material supply businesses, Peat and Biomass will go through a period of change. Peat will be significantly smaller by 2030 as we continue on the journey to a green energy supply which has been our plan since we first communicated this in September 2015. On the flip side, there will be a significant ramp up in domestic biomass supply and our ambition - as the peat business winds down - is to replace those jobs with biomass supply chain jobs. This journey has already begun and the company is looking forward to working closely with the government on programs such as the willow scheme to accelerate the development of the domestic biomass supply chain.


Our focus on the long-term strategy will ensure the company has a successful and profitable future.

Q Your final comment

To summarise - FY 17 is the year in which we consolidated our five year plan. We had a few issues along the way. Brexit in particular caught us off-guard but we already had a plan in place for the UK. We are now back on track and looking to the future.

I am confident that the decisions we made – and continue to make - around investment and our focus on the long-term strategy will ensure the company has a successful and profitable future with a motivated, dynamic and engaged workforce.

Thank you to all of you who have contributed to this very challenging, competitive and highly productive year. You have all made this happen.

With my term as Managing Director coming to an end in October 2017, I also want to take this opportunity to thank my colleagues in Bord na Móna for their support during my time with the company. Over the last 2 and a half years I have asked a lot of everyone throughout the business - to move faster and go further in making the changes needed to transform the company and meet the challenge of providing a more sustainable future. I have been impressed with the response I’ve received and the commitment shown to move the business beyond survival, into a leadership position.

I believe that together, we have built a solid foundation for the future and I look forward to seeing all the hard work come to fruition, and the company delivering on our mission to lead the change to provide more sustainable solutions in Ireland. With everyone working together, Bord na Móna has a real opportunity to make lives better for our communities, and our country - the future lies in very capable hands.

Mike Quinn
Managing Director