EnBW pleased with good fiscal year 2007

Karlsruhe. EnBW Energie Baden-Württemberg AG is pleased with the fiscal year 2007. According to the consolidated financial statements for the fiscal year 2007 presented in Karlsruhe today, EnBW has not only reached the targets it set itself for 2007, but even exceeded some of them. Revenue rose by 14.4 percent to 14,712.2 million euros. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 2.8 percent to 2,336.4 million euros in the 2007 reporting period and earnings before interest and taxes (EBIT) rose by 7.4 percent to 1,559.2 million euros.Earnings before tax (EBT) improved by 15.4 percent to 1,372.9 million euros.

Adjusted for extraordinary income and expenses, these earnings indicators still showed an increase. Adjusted EBITDA grew 6.9 percent to 2,328.3 million euros, adjusted EBIT 7.7 percent to 1,563.0 million euros, and adjusted EBT 7.9 percent to 1,283.4 million euros.

The increased EBT, non-recurring tax income arising from the German Business Tax Reform and a higher result from discontinued operations contributed to a year-on-year increase in group net profit in terms of the profit share attributable to shareholders of 36.2 percent to 1,364.1 million euros. Adjusted group net profit in terms of the profit attributable to equity holders of EnBW AG rose by 11.0 percent to 821.0 million euros.

EnBW’s ROCE reached 16.4 percent in 2007, exceeding its WACC before tax of 9.0 percent. This brought the value added for the EnBW group up to 839.1 million euros (+3.0 percent).

The earnings development also had a positive impact on the company’s balance sheet structure. The equity ratio, including minority interests, rose from 16.0 percent (as of December 31, 2006) to 21.1 percent as of year-end 2007. In addition, net financial liabilities were reduced. In a year-on-year comparison, they were cut by 17.3 percent to 2,972.3 million euros.

Compared to the prior year, the cash flow from operating activities increased by 6.3 percent to 1,558.7 million euros. The increase was primarily due to the improved EBITDA and a reduction in working capital. The free cash flow, in contrast, fell by 173.9 million euros to 853.2 million euros. To a large extent, this was due to the additional 186.0 million euros invested in intangible assets and property, plant and equipment. Overall, EnBW invested 816.1 million euros in the past year, 29.5 percent more than in the prior year. Some 69.7 percent of these capital expenditures was made in the electricity segment. Spending here focused on the expansion of the power stations and distribution plants.

In light of the positive business development, the Board of Management and the Supervisory Board will propose to the annual general meeting a dividend distribution of 1.51 euro per share, an increase of around 32.5 percent on the prior year.

Coming years will be dominated by capital-intensive investment

On the back of these results, the strategy in coming years will be to prioritise investments involving a high capital outlay. On aggregate, EnBW has budgeted a spending volume of 7.6 billion euros for the period 2008 – 2010: 4.6 billion euros for capital expenditures on intangible assets and property, plant and equipment and 3 billion euros for financial investments.

Hans-Peter Villis, CEO of EnBW: “Capital expenditures will focus on generation, gas and grids. Despite the increasingly adverse climate for capital investments, we want to retain and expand our value added in Germany, securing jobs in Germany in the process and assuming responsibility for the efficient generation of energy and energy supply.”

With these capital expenditures, EnBW will continue to advocate a balanced energy mix in future. For EnBW, nuclear power plants, state-of-the-art coal power plants and renewable energies are essential elements of a safe, competitive and climate-friendly energy supply. Besides spending on modern power plants, the share of renewable energies used to generate electricity will be boosted significantly in the next few years.

The RDK 8 hard coal unit planned by EnBW at the Rheinhafen thermal power station in Karlsruhe demonstrates that CO2 emissions per ton of coal used can be reduced considerably by increasing energy efficiency, for example by means of district heating extraction.

EnBW plans to expand the gas segment

EnBW is also on track for further growth in the gas segment. The downstream business was reinforced in 2007, among other things, by purchasing more shares in Erdgas Südwest GmbH. There are also plans to expand the midstream business. EnBW’s long-term targets are to achieve independence in procurement via gas import agreements of its own and reliable access to the necessary transmission and storage infrastructure. Securing the long-term usage rights for salt caverns for subterranean gas storage in the Etzel region (Lower Saxony) and linking the storage facility to the Dutch market is one part of the strategy.

For the current fiscal year 2008, EnBW has set itself the target of adjusted EBIT above prior-year level and a further increase in value added.