Quarterly figures for the period from January to September 2013: Performance remains in line with expectations

Karlsruhe. In the first nine months of 2013, EBITDA (earnings before interest, taxes, depreciation and amortisation) adjusted for extraordinary items stood at € 1,816.0 million and was therefore 2.5 % below the year-earlier figure. Excluding positive valuation effects on derivatives, which reverse when the underlying transactions are realised, operating earnings amounted to € 1,752.4 million, the equivalent of a 7.3 % year-on-year decline. Performance at group level was therefore in line with our expectations, which were for between -5 % and -10 % below the previous year's period.

With its workforce of 19,770 employees, the EnBW Group generated external revenue of € 15,547.8 million in the first nine months of 2013, representing an increase of 8.5 %.

The decline in adjusted EBITDA is mainly due to the earnings trend in the Generation and Trading and Renewable Energies segments, along with Sales. The downturn is attributable to another decrease in wholesale market prices and spreads in electricity production, as well as the burden from the full auctioning of CO2 allowances. These effects caused earnings in the Trading and Generation and in the Renewable Energies segments to decline by 15.4 % and 14.8 % respectively in the first nine months of 2013.

Earnings declined by 22.2 % in the Sales segment, which was also attributable to the fact that out-of-period earnings from the reimbursement of grid fees included in the year-earlier figure were not repeated in the current year. A further cause was the narrower margins, with the ensuing adverse effects not being compensated by higher volumes in gas unit sales. The Grids segment lifted earnings significantly by 27.0 % owing to higher grid usage fees and lower overheads.

Non-operating EBITDA declined by € 244 million, from around € -40 million to approximately € -284 million. This was largely attributable to higher expenses for nuclear energy under the new Site Selection Act which were included at mid-year as well as transfers to the provision for onerous contracts relating to electricity procurement agreements.

Non-operating Group net loss therefore stood at around € -282 million compared with a non-operating Group net profit of around € 2 million in the first nine months of 2012. As a result, the adjusted Group net profit of approximately € 516 million was lower than the year-earlier figure of around € 563 million.

The cash flow from operating activities advanced by 16.3 % in the first nine months of 2013 to roughly € 1.21 million, up from € 1.04 million the year before. Despite greater capital expenditure in intangible and property, plant and equipment, free cash flow advanced by approximately €192 million to around € 891 million, marking an increase of 27.4 %.

For the year as a whole, EnBW anticipates a significantly lower result in the Generation and Trading as well as in the Renewable Energies segments owing to the wholesale market price trend. The Grids segment expects an appreciable increase in earnings on the back of an upturn in distribution volumes resulting in higher grid usage fees. In comparison to the original forecast for the Sales segment, EnBW now anticipates a decline in earnings for 2013 as a whole, which is due to greater expenses incurred by gas unit sales and the market for decentralised solution offerings developing more slowly. The adjustment does not, however, have any impact on the Group's overall forecast. EnBW therefore puts adjusted EBITDA at between -5% and -10% for the full year of 2013 in a year-on-year comparison.

Against the backdrop of the ongoing negative developments in the wholesale markets, CFO Thomas Kusterer emphasised the importance of implementing the Fokus efficiency programme: "The reduction in costs of € 750 million envisaged for 2015 will have already been achieved by 2014, which is one year earlier. In the current year, Fokus will deliver cost savings of a good € 600 million. The free cash flow this measure releases will be used to reduce our net debt in the first nine months of 2013, thereby safeguarding the good credit standing of EnBW. This will enable us to secure the financial scope for implementing our EnBW 2020 Strategy."

In the third quarter, further progress was made with the strategic realignment. In the Renewable Energies segment the go-ahead for the construction of the EnBW Baltic 2 offshore wind farm (288 MW) was given. In the Grids segment, subsidiary TransnetBW commenced with expanding the grid in Stuttgart. Implementation of the requisite structural measures for the EnBW 2020 Strategy is also under way. CEO Frank Mastiaux commented as follows: "Based on our organisation structure concept of "ONE EnBW", we will be significantly reducing the complexity of the EnBW Group by combining six core companies. We anticipate efficiency gains in the double-digit million range stemming from the reduction of the number of executive and supervisory bodies and committees and the streamlining of management levels. The process of restructuring the company is to be completed over the course of 2014.