Karlsruhe. EnBW Energie Baden-Württemberg AG has clearly outperformed all the key targets for 2004. "Just a year ago, our declared aim was to achieve an acceptable result. Today, we can justifiably claim that we kept our word. We are ahead of schedule and above target in all our medium-term financial goals", were the words of CEO Prof. Dr. Utz Claassen at the Annual General Meeting of EnBW in Karlsruhe. Pre-tax earnings for 2004 are up by 1.8 billion euros, the Group now has a far stronger equity base, net debt has been almost halved, sales per employee have more than doubled since 2002, the divestment programme is nearly complete, EnBW can once again boast a positive free cash flow and the dividend payout of EnBW is at an appropriate level.
The figures for 2004 confirm that EnBW has achieved financial turnaround rapidly and with great success and that the Group can also point to outstanding earnings and an impressive rate of change compared to its competitors and other comparable industrial companies.
"The excellent balance sheet ratios are the result of the superb performance of the entire workforce, and the figures have also generated a highly positive response in all parts of the capital market"; said Claassen. "After an extremely difficult year in 2003, EnBW is now back in the fold of high-earning companies."
The Management Board and Supervisory Board of EnBW proposed to the AGM the payment of a dividend of 0.70 euros per participating share.
2004 earnings well above target/Substantial improvement in operative earnings strength
Group earnings before interest, taxes, depreciation and amortisation increased by 1.2 billion euros or 119 percent in 2004 to over 2.2 billion euros; earnings before interest and taxes (EBIT) were up from –190.4 million euros in 2003 to 1.2 billion euros; earnings before tax (EBT) improved from –1.1 billion euros in the previous year to 707.4 million euros in 2004, showing an increase of 1.8 billion euros. The earnings ratios for 2004 are still a major improvement on the previous year even when compared to the 2003 figures after adjustment for inherited debts and one-off burdens. Adjusted EBITDA was up by 49.3 percent or 734 million euros, EBIT by 76.9 percent or 529 million euros and EBT by 198.5 percent or 470 million euros.
A comparison covering several years underlines the positive development of EnBW's earnings figures. Pre-tax earnings were at –134 million euros in 2002, then at –1.1 billion euros in 2003, and improved to 707 million euros in the year under review.
The encouraging earnings trend is also reflected in the figures for earnings per share, which increased from –5.40 euros in financial 2003 to 1.36 euros in 2004. This is equivalent to an improvement of in the order of 6.76 euros per share.
Improved balance sheet structure/Appropriate dividend capability regained
EnBW's restored earnings strength also generated an increase of 700 million euros in operating cash flow to 1.6 billion euros in 2004. Free cash flow for the same period was up by 2.7 billion euros and is now at 2.35 billion euros following the negative figure of –349 million euros in 2003.
The increase in earnings was accompanied in 2004 by sales growth in EnBW's core business areas from 8.1 billion euros (2003) to 9.0 billion euros in 2004. This is equivalent to an increase of 10.9 percent. The total sales revenues of the EnBW Group – including not only the core business areas but also the discontinuing operations – fell by 1.1 percent in 2004 to 9.8 billion euros. This decline is due to divestments and the associated deconsolidation effects.
Financial liabilities were reduced by 27 percent in 2004 to 5.9 billion euros, while net debt fell by 47 percent to just under 3.7 billion euros. The equity ratio increased by 3.6 percent to a figure of 9.7 percent at year-end 2004 after falling to 6.1 percent in the years from 2000 to 2003.
Lasting consolidation of positive trend
The goal for 2005 and 2006 is still to consolidate the positive financial trend in the long term and underpin the value of the company. For this reason, the TOP-FIT cost reduction and earnings growth programme will remain indispensable. This programme made a major contribution in the order of 495 million euros to the improved earnings on the operating front in 2004. EnBW will therefore continue to systematically implement the targeted objectives in 2005 and 2006. During the course of 2005 to date, measures have already been implemented with a cumulative volume of 727 million euros.