Substantial improvement in earnings, liquidity and operating performance in the first nine months of 2004

Karlsruhe. The first nine months of financial 2004 at EnBW Energie Baden-Württemberg AG were characterised by substantial improvements in the Group's earnings strength. This is the bottom line of the Nine-Monthly Report published by EnBW on Friday, November 12, 2004, in Karlsruhe. "The process of structural reorganisation is almost complete; in its goal of improving performance figures on the operating front, the rate and intensity of change within the group is of the very highest level - both compared to the competition and in the context of the national economy overall", is how CEO Prof. Dr. Utz Claassen described the successful trend at EnBW.

The first nine months again saw a marked improvement in all key earnings ratios compared to the same period last year - not only in a direct comparison of the 2003 and 2004 nine-monthly results but also if the 2003 figures are adjusted for the one-off burdens on earnings. Development of the key figures and ratios is as follows:

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 169 % to over 1,553 million euros compared to the first nine months of 2003, and still by a healthy 42 % after adjustment for the one-off burdens during the first nine months last year. Earnings before interest and tax (EBIT) showed a turnaround from -238 million euros to 845 million euros, increasing by around 57 % after adjustment for the one-off burdens in the first nine months of 2003. Pre-tax earnings (EBT) increased by a massive 1,386 million euros to 437.3 million euros, rising by 133 % after adjustment for the one-off burdens resulting from the first nine months of 2003. This means that the corresponding growth for the nine-month period is even higher than the encouraging figures posted by the Group for the first quarter and the first half of 2004. EBITDA in the core business from January to September 2004 was 64 % up on the same period last year at over 1,501 million euros, while EBIT grew by a healthy 162 % to almost 966 million euros compared to the first nine months of 2003.

EnBW also made great progress on the liquidity front. Operating cash flow in the first nine months of 2004 was 126 % up on the same period last year, rising from 617 million euros to 1,393 million euros. Free cash flow improved by a massive 1,788 million euros to a new level of 1,454 million euros. This was due to systematic investment management, the sale of subsidiaries and improved earnings potential on the operating front. Drawing on its positive free cash flow and following the sale of own shares in June 2004, EnBW succeeded in substantially reducing net financial indebtedness by 1,818 million euros from 6,960 million euros to 5,142 million euros during the first nine months of 2004.

EnBW is also making great strides on the divestment front. As of September 30, 2004 a total of 138 companies had already been sold, merged or closed down, incorporated in partnerships or deconsolidated by other means as part of the portfolio streamlining strategy. As of September 30, 2004 the Group employed 19,681 people. This means that, with fewer than 20,000 employees, EnBW is now generating sales at a similar level to that achieved by more than 40,000 employees just a short time ago. These figures impressively underline the dimension, intensity and speed of structural change at EnBW.

Despite these excellent figures, EnBW CEO Prof. Dr. Utz Claassen emphasises the need to remain modest and focused on the measures that still need to be implemented to consolidate the improvements on the operating front. "There is still a lot to do in the next two years and considerable effort will continue to be required of us. Quarter for quarter, we will continue to work through our "to do" list without losing sight of our long-term strategic goals and our vision for the Group", says Claassen.

Note for the editorial offices: we will be happy to send you the 2004 Nine-Monthly Report on request. The report is also available on the Internet as a PDF file.