EnBW boss explains the strategy for developing the energy markets

KARLSRUHE 6. 3. 2002, Germany (ots/PROTEXT) - Goll: EnBWbases its strategy on close links to its customers and growth inpartnerships.

Obstacles to wheeling expected to be overcome - EnBW balancesheet conference in Karlsruhe.

EnBW Energie Baden-Württemberg AG is continuing to base itsstrategy on close links to the customer and growth inpartnerships: "The success of our strategy of playing an activerole at the outset in shaping the energy markets in Germany andEurope gives us the confidence to continue down this road", saidthe EnBW chairman of the board Gerhard Goll on Tuesday at theEnBW balance sheet press conference in Karlsruhe. With a networkof regional, national and European partnerships and holdings invarious companies as well as its own subsidiaries, the thirdlargest German energy undertaking can forge close links with itscustomers wherever the liberalisation of the energy marketsallows this. Goll expressed the expectation that the obstacles toelectricity wheeling which has only been functioning in anunsatisfactory manner for a long time in Germany, could still beovercome this year. Goll is also relying on the success of the EUCommission in its efforts to press for a swift fullliberalization of the electricity and gas markets in Europe.

The EnBW chairman of the board gave as examples of the EnBWnetwork of energy partnerships and holdings already in place andcontinuing to grow, the acquisition of the majority holding inNeckarwerke Stuttgart AG (NWS), the "Energie-Team Baden-Württemberg" - a common platform of municipal authorities andEnBW for the bundling of complementary competences - the holdingin the Stadtwerke Düsseldorf AG and the formation of the commonsubsidiary ENRW GmbH for opening up the markets in the whole ofNorth Rhine-Westphalia and the neighbouring Benelux areas, EnBW'sinvolvement in the fourth largest Spanish energy company,Hidrocantábrico as well as the takeover of the energy division ofthe Swiss Lonza Group. All these very different partnerships andholdings have the common goal "to gain more and more permanentcustomers by convincing performance, fair prices and partnershipdeals", said Gerhard Goll.

A high priority in EnBW's strategy for this year is theexpansion of the energy network in the gas sector: The alreadycontractually agreed partnership with the Italian ENI, thelargest gas corporation in Europe, now offers us the chance -says Goll - "just as four years ago when the German electricitymarket was opening up, to play an important role in the tough gasmarket." The EnBW chairman of the board was optimistic inassessing the chances of being able to take over the majority inGasversorgung Süddeutschland GmbH (GVS) together with the ENIpartner: "In our overall gas thinking, GVS has an important roleto play in developing the gas market - GVS therefore opens up theprospects for the future. This will convince the Baden-Württemberg land authorities and the local authorities but aboveall the employees of GVS."

"A mutually beneficial partnership" was how Gerhard Golldescribed the experiences of the first years with the new EnBWshareholder Electricité de France (EDF): Both partners could takeadvantage of the fact that they had already been working togetheras companies for decades. Goll: "We are convinced that thispartnership is here to stay - and will especially benefit ourcustomers." The shareholding of EDF in EnBW has "strengthened thecompetitiveness and autonomy of EnBW."

The hope for a breakthrough in electricity wheeling, stillobstructed by a large number of German electricity grid operatorswith excessive wheeling prices and bureaucratic hurdles, wasjustified by the EnBW chairman of the board on the basis of themalpractice proceedings initiated by the Federal MonopoliesCommission against a number of grid operators and the"Verbändevereinbarung II plus" which came into force at the turnof the year. However, the situation would have to improve thisyear "or else electricity competition in Germany would be broughtto its knees."

EnBW business development marked by growth and consolidationGerhard Goll expressed his satisfaction at the businessdevelopment of EnBW in 2001: It was possible to combine the twogoals. growth and consolidation. The end of the year reportconfirmed the company's planning targets, in some areas, thetargets were even clearly exceeded. The EnBW Group did not justgrow by acquiring holdings in other companies but also by winningover new customers and opening up new markets. 2001 was alsomarked by "the Yello success story." With over 700,000 customersYello was able to convince more than half the households who wereswitching their electricity supplier.

Gerhard Goll sees EnBW as well equipped to face the currentand coming years: "Our early and energetic start in competitionand markets is bearing fruit - in terms of turnover and earningsbut also company know-how. Our partners value this, our customersfeel this and the money markets and reputable rating agenciesalso confirm this. EnBW must and will maintain, constantly renewand exploit this competitive advantage.

The third largest German energy company presents its annualreport for 2001: In 2001, EnBW achieved significant growth interms of turnover and earnings.

Turnover increased by 34.9 to 7.861 thousand million Eurosand the annual surplus by 51.5 percent to 271.9 million Euros.

In 2001, EnBW achieved significant growth in terms ofturnover and earnings: The turnover (without electricity tax) ofthe EnBW Group increased by 34.9 percent to 7.861 thousandmillion Euros. The annual surplus of the third largest Germanenergy company increased by 51.5 percent to 271.9 million Euros.The result of normal business activity improved by 22.8 percentto 306.5 million Euros. This is all revealed in the EnBW annualreport 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. ReinhardVolk, the member of the board of EnBW responsible for finance, atthe EnBW balance sheet press conference 2001. Even without takinginto account the effects of the consolidation of the NeckarwerkeStuttgart 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 sharein Germany and accessible European energy markets both directlyand in partnership with other companies. The continued efforts tooptimise company structures and processes also bore fruit.

In the electricity sector, EnBW's core business, the thirdlargest German energy company also expanded in all customer areasin 2001. Overall, electricity turnover (after electricity tax)increased by 1,072 million Euros or 25.6 percent to 5,257 millionEuros. Gas turnover has more than doubled from 316 million Eurosto 689 million Euros, especially thanks to the full consolidationof NWS. Overall, the energy turnover of the EnBW Group increasedby 1,505 million Euros or 32.8 percent from 4,593 million Eurosto 6,098 million Euros.

In terms of volume, electricity sales of the EnBW Group in2001 increased by 19.4 TWh (thousand million kilowatt hours) - or24.9 percent - from 77.9 TWh to 97.3 TWh. Including theelectricity sales figures of companies in which EnBW has a stakewithout being at the same time an electricity pre-supplier, theelectricity sales of the EnBW group amounted to 108.4 TWh in2001.

Turnover in the waste disposal sector in 2001 remainedexactly at the level of the previous year with 259 million Euros.EnBW turnover in the Industry and Services sector with theSalamander Group as a major player, increased by 527 millionEuros or 54.0 percent to 1,504 million Euros.

Materials expenditure increased in 2001 by 41.9 percent to4,896.5 million Euros. Staffing expenditure increased by 20.9percent to 1,615.4 million Euros. The average number of employeesin the EnBW Group was 37,053 in 2001 compared to 27,327 in 2000.The increases in these three areas are mainly due to theexpansion of the group and consolidation effects.

Investments by the EnBW Group increased in 2001 by 1,517million Euros or 78.7 percent to 3,445 million Euros. Thesefigures above all are a reflection of EnBW's active strategy oftaking stakes in companies in Germany and Europe. The stocks andshares belonging to fixed assets amounted to 4,243.8 millionEuros on the 31st December 2001 - 134.3 million Euros more or 3.3percent more than at the beginning of 2001.

According to financial managing director Dr. Volk theconfidence of the investors and reputable rating agenciessupports EnBW's growth strategy: The first benchmark loantranches in February within the framework of the "Debt IssuanceProgram (DIP)" were "very positively accepted" by the market.Prior to this, the rating agencies Standard & Poor's and Moody'shad explicitly confirmed their favourable assessment of EnBW'sfinancial standing.

The dividend for the financial year 2001 is increased from0.46 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 December2001 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 kWh2001 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

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