Rating agency Standard & Poor´s upgrades its outlook on EnBW from "stable" to "positive"

Karlsruhe. Internationally renowned rating agency Standard & Poor´s has confirmed its A- long-term rating for EnBW Energie Baden-Württemberg AG as well as the A-2 short-term rating. The outlook was upgraded to "positive".

The Standard & Poor´s rating primarily reflects the strong regional market position of EnBW in Baden-Württemberg and the stable earnings from the company's energy distribution activities. Other factors listed by Standard & Poor´s include:

• the company's high-quality and competitive business processes,
• the substantial reduction in debt driven by a high free cash flow resulting from, among other things, the disposal of the interest in Hidrocantabrico
• as well as the significant financial turnaround in 2004 due to the implementation of an ambitious and tightly controlled cost-cutting programme.

The reasons given by S&P for this positive outlook are the persisting strength of the company on the operating front as well as the ability of EnBW to generate a high free cash flow. Medium-term upgrading of the rating is expected, provided that EnBW succeeds in further strengthening its financial profile and establishing a track record of sustained financial improvement as it shifts focus from consolidation to growth.

"The upgrading of the outlook to 'positive' underlines the success of our debt reduction efforts, the positive impact of restructuring measures and the effective implementation of our Top Fit programme", says Dr. Holzherr, CFO of EnBW. "This lays the foundations for the lasting improvement of our financial profile. EnBW will not disappoint expectations".

EnBW Energie Baden-Württemberg AG today published its business results for the first nine months of 2005. According to the nine-monthly report, 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. Moreover, the excellent business results enabled EnBW to achieve a further substantial reduction in the net indebtedness from 3,938.5 million euros to 2,745.4 million euros during the first three quarters of 2005. The renewed increase in the equity ratio by 3.6 percent to 13.6 percent during the first nine months of 2005 is a further indicator for the continuing positive financial trend at EnBW.

EnBW is the third-largest energy company in Germany with around 5 million energy customers. Its core business fields are electricity and gas as well as energy and environmental services.