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1092340800000 | IR Press Release

Substantial improvement in earnings strength on the operating front in first half of 2004

EnBW Group publishes Half-Year Report
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EBITDA up by 275%/Free cash flow up by 1.4 billion euros /Debt reduction way ahead of schedule

Karlsruhe. Compared to the first six months of the previous year, the first half of 2004 was characterised by substantial improvements in the Group's earnings strength: this is the bottom line of the Half-Year Report published by EnBW Energie Baden-Württemberg AG on Friday, August 13, 2004 in Karlsruhe. "Following a positive first three months of 2004, we also made great advances in our restructuring programme in the second quarter. The EnBW Group has succeeded in achieving substantial progress in the area of strategic reorganisation, structural adjustment and, above all, the improvement of earnings potential on the operating front", said EnBW CEO Prof. Dr. Utz Claassen.

The first half of 2004 saw a marked improvement in all relevant key figures compared to the same period last year. Even if the earnings figures for the first half of 2003 are adjusted for the one-off burdens, earnings growth during the period under review was still considerable.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 275% compared to the first half of 2003 to over 1.1 billion euros, and by 38% after adjustment for the one-off burdens during the first six months of 2003. Earnings before interest and tax (EBIT) showed a turnaround from -323 million euros to 607 million euros, increasing by 47% after adjustment for the one-off burdens in the first half of 2003. Pre-tax earnings (EBT) increased by almost 1.3 billion euros to 376.5 million euros, rising by 131% after adjustment for the one-off burdens for the first half of 2003. This means that the corresponding growth for the first half is even higher than the encouraging figures posted by the Group for the first quarter of 2004. EBITDA in the core business in the first half was 65% up on the same period last year at over 1 billion euros, while EBIT grew by a massive 172% to 665 million euros compared to the first six months of 2003.

In the first half of 2004, EnBW succeeded in more than doubling its operating cash flow by 484.7 million euros to 777.6 million euros. Free cash flow increased by 1,396.8 million euros from -480.2 million euros to 916.6 million euros compared to the same period last year, mainly due to systematic investment management, the sale of subsidiaries and improved earnings potential on the operating front. Drawing on its positive free cash flow, EnBW succeeded in substantially reducing net financial indebtedness from 6,959.7 million euros to 5,674.5 million euros during the first six months of 2004. The contractually agreed sale of the Hidrocantábrico holding at the end of July 2004 will probably take EnBW's debts down to a level in the second half of 2004 that was originally only targeted for the first quarter of 2007. This transaction will also strengthen the equity capital base of the company accordingly.

The equity ratio has improved markedly - from 6.1% as of December 31, 2004 to 9.6% as of June 30, 2004. This growth was fuelled by the increase in earnings strength as well as by the successful capital increase in the second quarter of 2004, when EnBW boosted its own equity by 288.1 million euros by placing own shares.

EnBW is also making great strides on the disinvestment front. As of July 31, 2004 a total of 132 companies had already been sold, merged or closed down, incorporated in partnerships or deconsolidated by other means. In its goal of reducing the complexity of the Group, EnBW has already achieved over 80% of target; in terms of sales or staffing levels, more than 90% of the disinvestment programme has already been implemented.

As of June 30, 2004 the Group employed 19,500 people, compared to figures of 24,589 on December 31, 2003 and 38,721 on December 31, 2002. Through the efforts of this markedly reduced headcount, the EnBW Group achieved sales revenues of 5,083.1 million euros in the first half of 2004, underlining its position as the third-largest German energy company. While sales in the core business segment rose by 7.3% to 4,508.0 million euros, revenues from the activities to be discontinued fell by almost 40%, with the result that Group sales revenues were down by 1.4% overall.

Prof. Dr. Utz Claassen: "This is all highly satisfactory and indicates - not only at first glance - a truly fantastic trend that hardly anyone would have thought possible just a year ago. Despite these highly encouraging figures, however, we should not close our eyes to the fact that that there is still a lot to do in the next two and a half years and that we still face major challenges - but we are determined to keep a tight grasp on this turnaround."

EnBW Group
in
01.01. - 30.06.2004
01.01. - 30.06.2003
Variance as a %
EnBW Group
Sales revenue
EnBW Group
Electricity
in
€ millions
01.01. - 30.06.2004
3,516.3
01.01. - 30.06.2003
3,144.6
Variance as a %
+ 11.8
EnBW Group
Gas
in
€ millions
01.01. - 30.06.2004
763.2
01.01. - 30.06.2003
835.2
Variance as a %
- 8.6
EnBW Group
Energy and environmental services
in
€ millions
01.01. - 30.06.2004
228.5
01.01. - 30.06.2003
223.2
Variance as a %
+ 2.4
EnBW Group
Total core business
in
€ millions
01.01. - 30.06.2004
4,508.0
01.01. - 30.06.2003
4,203.0
Variance as a %
+ 7.3
EnBW Group
Discontinuing operations
in
€ millions
01.01. - 30.06.2004
575.1
01.01. - 30.06.2003
951.6
Variance as a %
- 39.6
EnBW Group
Total external sales
in
€ millions
01.01. - 30.06.2004
5,083.1
01.01. - 30.06.2003
5,154.6
Variance as a %
- 1.4
EnBW Group
EBITDA
in
€ millions
01.01. - 30.06.2004
1,110.8
01.01. - 30.06.2003
296.4
Variance as a %
+ 274.8
EnBW Group
EBIT
in
€ millions
01.01. - 30.06.2004
606.9
01.01. - 30.06.2003
- 322.7
Variance as a %
--
EnBW Group
EBT
in
€ millions
01.01. - 30.06.2004
376.5
01.01. - 30.06.2003
- 927.3
Variance as a %
--
EnBW Group
Earnings after tax
in
€ millions
01.01. - 30.06.2004
201.7
01.01. - 30.06.2003
- 952.9
Variance as a %
--
EnBW Group
Earnings per share
in
01.01. - 30.06.2004
0.76
01.01. - 30.06.2003
- 4.28
Variance as a %
--
EnBW Group
Operating cash flow
in
€ millions
01.01. - 30.06.2004
777.6
01.01. - 30.06.2003
292.9
Variance as a %
+ 165.5
EnBW Group
Investments
in
€ millions
01.01. - 30.06.2004
189.0
01.01. - 30.06.2003
240.7
Variance as a %
- 21.5
EnBW Group
Free cash flow
in
€ millions
01.01. - 30.06.2004
916.6
01.01. - 30.06.2003
- 480.2
Variance as a %
--
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Corporate Communications
EnBW Energie Baden-Württemberg AG
Durlacher Allee 93
76131 Karlsruhe
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