First-quarter results reflect the suspension of nuclear extension

• Adjusted EBIT falls by 15% to € 744 million
• Revenue increases by 2.7% to some € 5 billion
• Cash flow from operating activities rises to € 886.8 million
• For the year as a whole, adjusted EBIT is expected to fall by 15 to 25%

Karlsruhe. EnBW Energie Baden-Württemberg AG ended the first quarter of 2011 with an increase in revenue and unit sales of electricity. According to the results published today in Karlsruhe, the group’s revenue rose by 2.7% on the comparable value for the prior year to € 5,033.7 million. The unit sales of electricity supplied by the EnBW group increased by 2.4% to 38.9 billion kilowatt-hours in the first three months of 2011. In contrast, adjusted earnings before interest and taxes (adjusted EBIT) fell by 15% in the first quarter of 2011 to € 744.4 million, as to a certain extent anticipated. Adjusted for consolidation effects – these include for example the sale of Geso and the swap of PRE and PT shares – the decline in adjusted EBIT came to 10.6%.

“The operating result for the first quarter of 2011 already reflects the shutdown of the two nuclear power plants. Financial burdens were also caused by having to replace quantities of electricity from the nuclear power plants concerned that had already been sold on the forward market,” say Hans-Peter Villis, EnBW’s CEO.

In the generation and trading segment, adjusted EBIT stood at € 632.1 million, around 13.6% down on the prior-year level. Adjusted EBIT in the electricity grid and sales segment by 49.2% to € 37.3 million in the first quarter of 2011. The sales function was the decisive factor in this positive development. Adjusted EBIT in the gas segment fell by 32.8% on the comparable prior-year figure to € 83.2 million. The disposal of Geso in particular made itself felt. Adjusted for consolidation effects, the drop in earnings in this segment comes to 13.4%. A lower level of unit sales of gas on account of milder weather and lower network user charges due to a fall in the quantities of gas being transmitted in comparison to the prior year contributed to this development of earnings. In the energy and environmental services segment, adjusted EBIT rose by 2.9% to € 28.3 million while revenue remained constant.

At € -133.0 million, non-operating EBIT was clearly negative in the first quarter of 2011. This was the result of expenses totalling € 140.1 million in the area of nuclear energy. EnBW anticipates that such high demands will be put on retrofitting its Neckarwestheim 1 nuclear power plant that the resulting investments will make its continued operation economically unviable in the long term. For this reason, EnBW has increased its decommissioning provisions on account of the expected earlier dismantling.

In contrast, cash flow from operating activities saw positive developments. This figure increased by 59.9% to € 886.8 million in the first three months of the current fiscal year 2011. Free cash flow before financing rose over the same period by 83.2% to € 684.7 million.

Its high-level of free cash flow enabled EnBW to reduce its adjusted net debt by € 700.1 million to a total of € 7,439.7 million as of 31 March 2011 compared to the end of 2010.

Capital expenditures and acquisitions within the EnBW group totalled € 302.9 million in the first three months of 2011. Of this figure, € 215.8 million related to capital expenditures on intangible assets and property, plant and equipment. This corresponds to a share of total investments of 71.2%. Growth projects accounted for a share of around 60% of investments in the 2011 reporting period. The remaining 40% was attributable to replacement and renewal measures, in particular for power stations and grid infrastructure.

“The results for the first quarter of 2011 reflect, on the one hand, the financial strength of EnBW and, on the other, the impact of the energy policy measures implemented in the last few weeks. The three-month suspension of the extension of the working lives of nuclear power stations will lead to losses of earnings from the erosion of the profit margins of the power plants as well as further indirect effects that, in turn, will give rise to considerable financial burdens in 2011. Correspondingly, we today anticipate a fall in adjusted EBIT at group level of 15 to 25%, says Villis.