EnBW boss explains the strategy for developing the energy markets

KARLSRUHE 6. 3. 2002, Germany (ots/PROTEXT) - Goll: EnBW bases its strategy on close links to its customers and growth in partnerships. Obstacles to wheeling expected to be overcome - EnBW balance sheet conference in Karlsruhe. EnBW Energie Baden-Württemberg AG is continuing to base its strategy on close links to the customer and growth in partnerships: "The success of our strategy of playing an active role at the outset in shaping the energy markets in Germany and Europe gives us the confidence to continue down this road", said the EnBW chairman of the board Gerhard Goll on Tuesday at the EnBW balance sheet press conference in Karlsruhe. With a network of regional, national and European partnerships and holdings in various companies as well as its own subsidiaries, the third largest German energy undertaking can forge close links with its customers wherever the liberalisation of the energy markets allows this. Goll expressed the expectation that the obstacles to electricity wheeling which has only been functioning in an unsatisfactory manner for a long time in Germany, could still be overcome this year. Goll is also relying on the success of the EU Commission in its efforts to press for a swift full liberalization of the electricity and gas markets in Europe. The EnBW chairman of the board gave as examples of the EnBW network of energy partnerships and holdings already in place and continuing to grow, the acquisition of the majority holding in Neckarwerke Stuttgart AG (NWS), the "Energie-Team Baden- Württemberg" - a common platform of municipal authorities and EnBW for the bundling of complementary competences - the holding in the Stadtwerke Düsseldorf AG and the formation of the common subsidiary ENRW GmbH for opening up the markets in the whole of North Rhine-Westphalia and the neighbouring Benelux areas, EnBW's involvement in the fourth largest Spanish energy company, Hidrocantábrico as well as the takeover of the energy division of the Swiss Lonza Group. All these very different partnerships and holdings have the common goal "to gain more and more permanent customers by convincing performance, fair prices and partnership deals", said Gerhard Goll. A high priority in EnBW's strategy for this year is the expansion of the energy network in the gas sector: The already contractually agreed partnership with the Italian ENI, the largest gas corporation in Europe, now offers us the chance - says Goll - "just as four years ago when the German electricity market was opening up, to play an important role in the tough gas market." The EnBW chairman of the board was optimistic in assessing the chances of being able to take over the majority in Gasversorgung Süddeutschland GmbH (GVS) together with the ENI partner: "In our overall gas thinking, GVS has an important role to play in developing the gas market - GVS therefore opens up the prospects for the future. This will convince the Baden- Württemberg land authorities and the local authorities but above all the employees of GVS." "A mutually beneficial partnership" was how Gerhard Goll described the experiences of the first years with the new EnBW shareholder Electricité de France (EDF): Both partners could take advantage of the fact that they had already been working together as companies for decades. Goll: "We are convinced that this partnership is here to stay - and will especially benefit our customers." The shareholding of EDF in EnBW has "strengthened the competitiveness and autonomy of EnBW." The hope for a breakthrough in electricity wheeling, still obstructed by a large number of German electricity grid operators with excessive wheeling prices and bureaucratic hurdles, was justified by the EnBW chairman of the board on the basis of the malpractice proceedings initiated by the Federal Monopolies Commission against a number of grid operators and the "Verbändevereinbarung II plus" which came into force at the turn of the year. However, the situation would have to improve this year "or else electricity competition in Germany would be brought to its knees." EnBW business development marked by growth and consolidation Gerhard Goll expressed his satisfaction at the business development of EnBW in 2001: It was possible to combine the two goals. growth and consolidation. The end of the year report confirmed the company's planning targets, in some areas, the targets were even clearly exceeded. The EnBW Group did not just grow by acquiring holdings in other companies but also by winning over new customers and opening up new markets. 2001 was also marked by "the Yello success story." With over 700,000 customers Yello was able to convince more than half the households who were switching their electricity supplier. Gerhard Goll sees EnBW as well equipped to face the current and coming years: "Our early and energetic start in competition and markets is bearing fruit - in terms of turnover and earnings but also company know-how. Our partners value this, our customers feel this and the money markets and reputable rating agencies also confirm this. EnBW must and will maintain, constantly renew and exploit this competitive advantage. The third largest German energy company presents its annual report for 2001: In 2001, EnBW achieved significant growth in terms of turnover and earnings. Turnover increased by 34.9 to 7.861 thousand million Euros and the annual surplus by 51.5 percent to 271.9 million Euros. In 2001, EnBW achieved significant growth in terms of turnover and earnings: The turnover (without electricity tax) of the EnBW Group increased by 34.9 percent to 7.861 thousand million Euros. The annual surplus of the third largest German energy company increased by 51.5 percent to 271.9 million Euros. The result of normal business activity improved by 22.8 percent to 306.5 million Euros. This is all revealed in the EnBW annual report for 2001 which was published on Tuesday in Karlsruhe. "Even in the fourth year of the liberalised energy market, EnBW has continued to expand successfully", said Dr. Reinhard Volk, the member of the board of EnBW responsible for finance, at the EnBW balance sheet press conference 2001. Even without taking into account the effects of the consolidation of the Neckarwerke Stuttgart AG (NWS) and Salamander AG, taking up a whole year, EnBW's turnover increased in the previous year, pointed out Dr. Volk. In 2001, EnBW also managed to gain clients and market share in Germany and accessible European energy markets both directly and in partnership with other companies. The continued efforts to optimise company structures and processes also bore fruit. In the electricity sector, EnBW's core business, the third largest German energy company also expanded in all customer areas in 2001. Overall, electricity turnover (after electricity tax) increased by 1,072 million Euros or 25.6 percent to 5,257 million Euros. Gas turnover has more than doubled from 316 million Euros to 689 million Euros, especially thanks to the full consolidation of NWS. Overall, the energy turnover of the EnBW Group increased by 1,505 million Euros or 32.8 percent from 4,593 million Euros to 6,098 million Euros. In terms of volume, electricity sales of the EnBW Group in 2001 increased by 19.4 TWh (thousand million kilowatt hours) - or 24.9 percent - from 77.9 TWh to 97.3 TWh. Including the electricity sales figures of companies in which EnBW has a stake without being at the same time an electricity pre-supplier, the electricity sales of the EnBW group amounted to 108.4 TWh in 2001. Turnover in the waste disposal sector in 2001 remained exactly at the level of the previous year with 259 million Euros. EnBW turnover in the Industry and Services sector with the Salamander Group as a major player, increased by 527 million Euros or 54.0 percent to 1,504 million Euros. Materials expenditure increased in 2001 by 41.9 percent to 4,896.5 million Euros. Staffing expenditure increased by 20.9 percent to 1,615.4 million Euros. The average number of employees in the EnBW Group was 37,053 in 2001 compared to 27,327 in 2000. The increases in these three areas are mainly due to the expansion of the group and consolidation effects. Investments by the EnBW Group increased in 2001 by 1,517 million Euros or 78.7 percent to 3,445 million Euros. These figures above all are a reflection of EnBW's active strategy of taking stakes in companies in Germany and Europe. The stocks and shares belonging to fixed assets amounted to 4,243.8 million Euros on the 31st December 2001 - 134.3 million Euros more or 3.3 percent more than at the beginning of 2001. According to financial managing director Dr. Volk the confidence of the investors and reputable rating agencies supports EnBW's growth strategy: The first benchmark loan tranches in February within the framework of the "Debt Issuance Program (DIP)" were "very positively accepted" by the market. Prior to this, the rating agencies Standard & Poor's and Moody's had explicitly confirmed their favourable assessment of EnBW's financial standing. The dividend for the financial year 2001 is increased from 0.46 to 0.66 Euro per share by the appropriate decision. Appendices: Appendix 1 At a glance Appendix 2 EnBW Group Balance Sheet on the 31st December 2001 Appendix 3 EnBW Group Profit and Loss Account from the 1st January to the 31st December 2001 EnBW Energie Baden-Württemberg AG EnBW Energie Baden-Württemberg AG Company Communication Appendix 1 to the press release/handout 2 for the EnBW balance sheet press conference 2002 At a glance EnBW Group 2001 2000 1999 1998 Outside turnover Energy Million Euros 6,098 4,593 3,710 3,937 Waste disposal Million Euros 259 259 236 201 Industry and Services Million Euros 1,504 977 52 29 Million Euros 7,861 5,829 3,998 4,167 Annual surplus Million Euros 272 180 138 367 Cash flow Million Euros 1,008 732 918 1,181 Investments Tangible and intangible assets Million Euros 701 1,108 405 678 Financial fixed Assets Million Euros 2,744 820 562 1,335 Million Euros 3,445 1,928 967 2,013 Fixed assets Million Euros 11,833 11,934 7,350 7,260 Current assets Million Euros 6,817 5,119 4,883 3,721 Equity capital Million Euros 2,483 2,434 1,726 1,722 Average number of employees in the year Number 37,053 27,327 12,581 12,605 EnBW AG Subscribed capital Million Euros 640 640 640 639 Equity participation Result Million Euros 213 314 497 839 Interest result Million Euros -136 -8 -85 54 Annual surplus Million Euros 162 111 111 390 Dividend Million Euros 161 112 111 111 Dividend per share Euro 0.66 0.46 0.46 0.46 Tax credit per share Euro - 0.20 0.20 0.20 Energy sales of the EnBW Group in thousand million kWh 2001 Electricity (including electricity supply companies in which stakes are held) 108.4 Electricity 97.3 Gas 18.2 District heating in thousand million kWhth 3.6 Breakdown of electricity supplied by the EnBW group according to the primary energy sources 2001 Coal, oil, gas 23.0 % Nuclear energy 40.2 % Water and other renewable energies 9.8 % Primary energy not known 27.0 % Appendix 2 on the press release / handout 2 for the EnBW balance sheet press conference 2002 EnBW Group Balance sheet on the 31st December 2001 Assets 31.12.2001 31.12.2000 Absolute Change Million Million change in % Euros Euros Fixed assets Intangible assets 905,7 987,7 -82,0 8,3 Fixed assets 5.136,9 5.190,8 -53,9 -1,0 Financial fixed Assets 5.790,3 5.845,6 -55,3 -0,9 11.832,9 11.934,1 -101,2 -0,8 Current assets Reserves 706,5 715,0 -8,5 -1,2 Debtors and other fixed assets 4.522,7 2.586,6 1.936,1 74,9 Securities 682.3 970.4 -288.1 -29.7 Liquidity 905.4 846.9 58.5 6.9 6,816.9 5,118.9 1,698.0 33.2 Prepayments and accrued income 93.8 95.2 -1.4 -1.5 18,743.6 17,148.2 1,595.4 9.3 Liabilities 31.12.2001 31.12.2000 Absolute Change Million Million change in % Euros Euros Equity capital Subscribed capital 640.0 640.0 0.0 0.0 Capital reserves 634.0 634.0 0.0 0.0 Profit reserves 136.3 162.2 -25.9 -16.0 Interests of other shareholders 907.2 883.1 24.1 2.7 Group profit 165.0 115.0 50 43.5 2,482.6 2,434.3 48.3 2.0 Special items 1,029.7 1,097.7 -68 -6.2 Reserves 10,775.2 10,593.6 181.6 1.7 Liabilities 4,388.3 2,951.6 1,436.7 48.7 Prepayments and accrued income 67.9 71.0 -3.1 -4.4 18,743.6 17,148.2 1,595.4 9.3 Appendix 3 to the press release / handout 2 for the EnBW balance sheet press conference 2002 EnBW Group Profit and loss account From the 1st January to the 31st December 2001 Million Million change in % Euros Euros Turnover 8,323.0 6,083.4 2,239.6 36.8 Electricity tax -461.8 -254.5 -207.3 -81.4 Turnover less electricity tax 7,861.2 5,828.9 2,032.3 34.9 Changes in stock -6.9 25.0 -31.9 -127.6 Other work performed for own purposes 41.6 46.2 -4.6 -10.0 Other operating earnings 856.4 591.1 265.3 44.9 Material expenditure -4,896.5 -3,451.2 -1,445.3 -41.9 Staff expenditure -1,615.4 -1,336.1 -279.3 -20.9 Depreciation -724.6 -586.6 -138.0 -23.5 Other operating Expenditure -1,311.3 -1,084.6 -226.7 -20.9 Financial result 102.0 216.8 -114.8 -53.0 Result of normal business 306.5 249.6 56.9 22.8 Taxes -34.6 -70.0 -35.4 50.6 Annual surplus 271.9 179.5 92.4 51.5 Interests of other Shareholders -91.2 -76.6 -14.6 -19.1 Withdrawals/allocations to profit reserves -15.7 12.1 -27.8 -229.8 Group profit 165.0 115.0 50.0 43.5 ots Original Text: EnBW Energie Baden-Württemberg AG Internet: http://www.presseportal.de EnBW Energie Baden-Württemberg AG Unternehmenskommunikation Durlacher Allee 93 76131 Karlsruhe Telefon: +49 (07 21) 63-1 43 20 Telefax: +49 (07 21) 63-1 26 72 unternehmenskommunikation@enbw.com www.enbw.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. 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