EnBW confirms positive business trend - earnings strength underpinned by cost reduction

• Best 9-monthly result in EnBW history
• Group net profit increases by 167.1% in the first nine months of 2005
• Pre-tax earnings up by 78.2%, EBIT by 19.1% and EBITDA by 11.8%
• Further substantial reduction in debt levels
• Equity ratio up once again

Measures totalling over 800 million euros already implemented in the context of the TOP FIT cost reduction programme

Karlsruhe. The figures for the first nine months of financial 2005 confirmed the satisfactory performance of EnBW Energie Baden-Württemberg AG as previously reported for the first half of the year. According to the nine-monthly report published in Karlsruhe on Wednesday, November 9, 2005, EnBW succeeded in substantially increasing both sales volumes and sales revenues in its core business fields as well as overall group earnings compared to the same period last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 11.8 percent to 1,575.8 million euros, while earnings before interest and tax (EBIT) were up by 19.1 percent to 1,052.3 million euros. Earnings before tax (EBT) increased by 78.2 percent to 892.1 million euros. Group net earnings totalled 504,9 million euros, an improvement of 167.1 percent on the nine-monthly result for 2004.

"After posting the best half-yearly result in the history of EnBW, we are now able to report the group's best ever 9-monthly result following the third quarter, underlining the stability of group earnings at a high level", said Prof. Dr. Utz Claassen, CEO of EnBW. In the case of energy companies, earnings in the first half of the year are traditionally stronger than in the second half.

"The major internal efforts we have made to reduce costs have not only enabled us to post the best ever EnBW result but also to make the jobs at EnBW more secure then ever before. They have created a solid foundation on which EnBW can confidently face the strategic challenges of the future with regard to innovations and a future-safe energy mix. However, these encouraging figures should not and will not give us cause to relax our efforts", added Claassen.

The internal TOP FIT cost reduction programme makes a key contribution to the strong operational performance of the EnBW Group. Based on the figures for 2005 as a whole, EnBW has implemented measures since 2003 that have positively impacted earnings to the tune of over 800 million euros. During the last nine months, the optimisation of the purchasing function has been one of the cornerstones of the TOP FIT cost reduction programme.

Compared to the figure for the first three quarters of 2004, the operating cash flow was down by 12.1 percent in the first nine months of 2005. This was mainly due to one-off effects from discontinuing activities which had positively impacted the operating cash flow during the first nine months of 2004.

"The persisting high operating cash flow generated by EnBW during the first nine months of this year totalling 1,235.3 million euros has enabled the Group to increase investment in foxed assets and achieve a further substantial reduction in the level of debt from 3,938.5 million euros to 2,745.4 million euros. The renewed increase in the equity ratio by 3.6 percent to 13.6 percent during the first three quarters underlines the positive financial trend at EnBW", says Dr. Christian Holzherr, CFO of EnBW.