- EnBW is the only German utility active in the entire energy value chain
- EnBW is driving the energy transition in its entirety
- Highly robust business model based on balanced portfolio
Integrated utility with a diversified business portfolio
- SBTi approved EnBW’s CO2 reduction targets
- Coal exit brought forward to 2028
- Climate neutrality in 2035 by offsetting the remaining residual emissions
Ambitious climate action targets
- Low-risk business profile from regulated grids and renewable energies
- Stable cash flows
- Attractive risk-return profile
High share of stable, low-risk business
- Financial policy geared towards credit investors' needs and protecting solid credit ratings
- Dedicated asset liability management for long-term provisions
- Diversified funding and prudent liquidity management using state-of-the-art systems and tools
Prudent financial policy
- Natural hedge between EnBW’s competitive business areas sales and generation
- Supply contracts closed on a back-to-back basis
- Generation margins locked in for up to 3 years in advance for cash flow predictability
- Long-term PPAs for high cash flow visibility
Hedging of merchant earnings for up to 3 years in advance
- State of Baden-Württemberg and OEW (an association of counties) holding more than 93% of share capital
- Most of the remaining shares are held by other municipal shareholders’ associations in Baden-Wuerttemberg
- Shareholder structure reflects EnBW’s roots in Baden-Wuerttemberg, one of the economically strongest regions in Europe
Stable government-related shareholder structure
Financial management
Foundations
- Management of financial transactions within the Group finance department in order to minimise risk, optimise costs and increase transparency
- Deployment of derivates in the operating business generally for hedging purposes only: for example, for forward contracts for electricity and primary energy source trading
- Interest rate risk management for managing and monitoring interest-sensitive assets and liabilities / Interest rate risk strategy to limit the risk of interest rate changes for the Group
- Currency management system to monitor foreign exchange risks
Objectives
- Payment obligations can be fulfilled without restriction
- Balanced financing structure
- Solid balance sheet ratios
- Solid investment grade ratings
Positive creditworthiness of high importance
To maintain the future viability of the company, EnBW aims to hold solid investment grade ratings, in order to
- ensure unrestricted access to capital markets
- offer reliable opportunities for financing partners
- be regarded as a dependable business partner in our trading activities
- achieve the lowest possible capital costs
- implement an appropriate number of investment projects
Key performance indicator for creditworthiness management
The central goal of the EnBW 2025 strategy is to increase adjusted EBITDA to €3.2 bn. As it will not be possible to exclusively finance this growth phase using funds from our internal financing capability, we will manage the financial profile from 2021 using the debt repayment potential.
2021 to 2025: Debt repayment potential¹
Controlled growth during the further development into an infrastructure partner
¹ To maintain solid investment-grade ratings, EnBW regularly checks the 2025 target value for the debt repayment potential for managing its financial profile.
Management of financing needs of operating activities separately from the Group’s pension and nuclear obligations
- Managing financing needs of operating activities
- Constant assessment of capital market trends with regard to
- current interest rate environment
- any potentially favourable refinancing costs
- Constant assessment of capital market trends with regard to
- Coverage of pension and nuclear obligations using asset liability management model
Sustainable infrastructure partner
Our business portfolio is positioned in three segments:
- System Critical Infrastructure
- Sustainable Generation Infrastructure
- Smart Infrastructure for Customers
The main goal of our EnBW 2025 strategy is to develop a balanced and diversified business portfolio along the entire value added chain via these three growth fields. Our portfolio is also characterized by a high proportion of stable, regulated business and an attractive risk-return profile.
As part of the EnBW 2025 strategy, adjusted EBITDA was planned to increase to €3.2 billion by 2025. Adjusted EBITDA was already €3.3 billion in fiscal year 2022. In line with our current planning, we also expect to exceed the earnings target.
Total investments 2023-2025
We plan total capital expenditure of some €12 billion. 80% of this will be on growth projects. The expenditure is to be financed out of retained cash flow and also, if necessary, by borrowing. We continue to aim for a balanced financing structure, a solid financial profile and therefore solid investment grade rating.
- Grid expansion
Key projects include the SuedLink and ULTRANET transport networks that are critical for Germany’s future energy supply, and investment in electricity distribution grids to upgrade them and prepare them for the needs of electric mobility. - Expansion of renewables
Including completion of the EnBW He Dreiht offshore wind farm by 2025 - Further evolution of smart infrastructure for customers
Including broadband, telecommunications and electric mobility
Click here for further information on our Corporate strategy.
Climate neutrality by 2035
By 2035, we will reduce the company's CO₂ emissions to net zero. In doing so, EnBW will stick to the requirements and targets of the Paris Climate Agreement.
SBTi EnBW CO₂ reduction targets approved. Further information: www.sciencebasedtargets.org
Scope 1
- Phasing out the remaining coal-fired power generation by the end of 2028
- Switching the Heilbronn, Altbach-Deizisau and Stuttgart-Münster power plants to run on more climate-friendly natural gas and making the gas power plants H2-ready
- Developing the hydrogen infrastructure
Scope 2
- Using green electricity
Scope 3
- Increasing the proportion of green gases in the sales portfolio and developing the hydrogen infrastructure
Scope 1
- Switching the Heilbronn, Altbach-Deizisau and Stuttgart-Münster gas power plants to run on climate-neutral gases, particularly hydrogen
- Developing the hydrogen infrastructure
Scope 2
- Continuing with the measures
Scope 3
- Supporting climate neutrality in the heating sector to reduce emissions from the gas business
- Increasing the proportion of green gases in the sales portfolio and developing the hydrogen infrastructure
Scope 3
- Supporting climate neutrality in the heating sector to reduce emissions from the gas business
Across the board
- Carbon offsetting for unavoidable emissions
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Further information on climate neutrality can be found here.