EnBW retains solid rating in the A category

Karlsruhe. Internationally renowned rating agency Standard & Poor's (S&P) has once again classified the credit rating of EnBW Energie Baden-Württemberg AG in the A category. The long-term rating has been lowered one notch from A to A-. This rating reflects the deteriorated financial profile of EnBW. The reasons for this are the acquisitions made in past years and the previously aggressive supply strategy, says S&P. The outlook remains stable, underlining the faith of the rating agency in the new management and the expectation that EnBW will continue to focus on cost reduction and the improvement of earnings and cash flow. Due to the lower long-term rating, the short-term rating has also been downgraded by one notch from A-1 to A-2.

"The main factor behind the downgraded rating are the extraordinary special effects resulting from the inherited burdens that need to be absorbed in the balance sheet and that had a substantial negative impact on 2003 earnings", says Prof. Dr. Utz Claassen, CEO of EnBW. "At the same time, however, our company can already point to the wide-ranging success of the speedily implemented consolidation and restructuring programme, and this has enabled us to maintain an EnBW rating in the A category. Cost-cutting measures, a reduced investment volume and the disinvestment already made to prune the portfolio of holdings boosted the operating strength of EnBW and greatly reduced debt levels during the second half of 2003." Prof. Dr. Utz Claassen views the renewed A rating as full confirmation of the prudence of the new strategy pursued by the company: "The systematic implementation of measures to reorganise and restructure our company has laid a solid foundation for sustainable value growth and the future competitiveness of EnBW."

S&P's rating takes account of the excellent market standing of EnBW in the energy sector with its 5.4 million customers, its strong regional market presence and the new focus on the core business area of energy with the Electricity, Gas and Energy and Environmental Services divisions. In this connection, Standard & Poor's points to the approx. 80 percent market share of EnBW in Baden-Württemberg, one of Europe's most prosperous economic regions.