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The internal growth strategy

Hera's main strategic objectives over the past five years involved the reorganisation of business activities in order to increase efficiency and develop markets by exploiting its strong points.

This merger created a big new company, allowing Hera to exploit the economies of scale when purchasing and reducing management costs, while the reorganisation of the local operating companies' activities meant that services could be provided more efficiently thanks to internal benchmarking among other things.

The business portfolio was rationalised by eliminating activities which were considered to be non-strategic and not in keeping with the core business. This simplified and improved the operating profit. The reorganisation also led to the centralisation of some activities within the "divisions" so advantage could be taken of any common factors among the different businesses: one example of this would be the unit management of maintenance of the gas and water networks leading to considerable rationalisation, and unit management of the waste disposal plants situated in various locations around the area leading to significant savings in logistics.

The multi-business strategy also established cross-selling policies which quickly led to the expansion of the electricity and the special waste market due to the extensive captive client base already using the gas services.

In its pursual of further synergy, the internal line growth strategy involved taking advantage of the deregulation of the energy markets by developing trading activities in addition to exploiting the contribution of "normal" growth policies such as price adjustments, increasing the customer base, and completing the plant coverage over the area.

The total sum of these management strategies that sustained most of the growth contributed to the Hera model in the industrialisation of the management of public utility services, and it was made into a "system" and used in all the merger operations carried out by the Group.