For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

Results Preview: H1 figures in line with expectations - FY guidance confirmed

• Solid development especially in Q2, as expected

MVV reported a rather unspectacular set of numbers for H1, which has been completely in line with our and market expectations. Thus, the company has been able to show a relatively solid performance in Q2 as expected (adj. EBIT + 3.2%).

Key developments in terms of divisions (H1; adj. EBIT before IAS 39):

Electricity (+29% to EUR 31 m, LBBWe EUR 27.6 m): The Electricity division has shown a development ahead of our expectations. This increase was mainly driven by higher volumes (+16%), positive portfolio management items and special items resulting from the reversal of provisions as well as the absence of non-period items.

District heating (-1% to EUR 71 m, LBBWe EUR 71 m) / Gas (-5% to EUR 60 m, LBBWe EUR 61.8 m): Despite the gas division achieved a volume growth of 18%, the adj. EBIT declined mainly due to double digit price reductions.

Water (0% to EUR 5 m, LBBWe EUR 5.1 m): The water division contributed a stable earnings development, as expected.

Services (0% to EUR 10 m, LBBWe EUR 10.7 m): Despite first time consolidations supported the development on the top line level, this didn't fuel the adj. EBIT contribution. However, we remain basically confident for that division in mid-term.

Environmental Energy (-16% to EUR 32 m, LBBWe EUR 32.2 m): The margin pressure, which occurred in recent quarters, has continued as expected.

Outlook: The company confirmed its outlook unchanged, i.e. projecting an adj. EBIT "in line with the level of the prior year".

Conclusion: All in all, a solid development especially in the second quarter, however, in line with expectations. Therefore, I assume a neutral share price reaction. Additionally I believe, the share will continue to be dominated by the "takeover scenario" as outlined in recent Flashes.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

Results Preview: H1 result at 14. May 2010 - robust development expected

HIGHLIGHTS

• Expected H1 results in line with FY guidance

We assume MVV Energy will report H1 figures slightly below PY's level as far as adj. EBIT is concerned. This implies a relatively strong performance in Q2 (adj. EBIT + 3.7%).

Key developments in terms of divisions (H1; adj. EBIT before IAS 39; LBBWe):

Electricity (+14.4% to EUR 27.6 m): We expect the Electricity division will show a strong development. Despite some further ramifications of the economic crisis, rising grid charges, decreased power prices as well as start-up costs of the supra-regional distribution brand "Secura", we assume a significant recovery compared to the extraordinaryly weak Q2 result in the previous year.

District heating (-0.5% to EUR 72.0 m) / Gas (-1.3% to EUR 61.8 m): Although the weather conditions in Q2 have been colder yoy, we believe in combination with the situation in Q1 this influence to be slightly negative. On the other hand, the recovery of the GDP in general and beneficial gas purchasing conditions are assumed to support both divisions.

Water (+1.1% to EUR 5.1 m): The water division is assumed to continue its stable earnings development.

Services (+5.5% to EUR 10.7 m): We remain basically confident for that division, despite efficiency enhancement and cost reduction measures are currently weighing on the development. However, these measures are assumed to slowly bear fruits.

Environmental Energy (-16.2% to EUR 32.2 m): The margin pressure, which occurred in recent quarters, is expected to continue.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

Company Focus: Well diversified energy group - "takeover scenario" should continue to dominate the share

HIGHLIGHTS

• Investment case unchanged - "takeover scenario" should continue to dominate the share
• 2009/10 guidance shifted sideways
• "MVV 2020" strategy in an important phase

The Buy recommendation and the target price (EUR 37) is based first and foremost on the "takeover scenario" we have identified: we expect this to be triggered by the sale of EnBW's 15.1% share in MVV. Here, we believe the strategic partner Rheinenergie AG to be the most likely buyer of the parcel of shares. This should then initiate a mandatory offer to the remaining shareholders. We continue to see upside potential in the range of 20-39%. If this expectation proved wrong, the "takeover scenario" should still remain in place in the medium term. Thanks to the consortium agreement concluded between the city of Mannheim and Rheinenergie we still see an implicit hedge of the share price at EUR 31.

Earnings prospects: In agreement with the company's guidance, we expect a sideways shift in sales and adjusted EBIT on a group level in the FY 2009/10. Cost reduction and efficiency enhancement measures that the management had announced in the scope of the "MVV 2020" strategy should contribute to a slight improvement in earnings starting in the FY 2010/11.

Valuation: We are still of the opinion that the takeover scenario seen for the medium term will outweigh the valuation of the MVV share and, as a result, the share will be listed at a higher level than would otherwise be fundamentally justifiable. We are analysing the valuation of MVV under consideration of a takeover premium, as we deem such a scenario likely. Based on the EV/EBIT multiples recently observed, we believe a range of EUR 37.00 to EUR 42.80 for the share price is justified.

Main risks to our investment case: Our expectation could prove wrong in many regards. For example, EnBW could, contrary to our expectations and the company's declared intent, fail to sell its share. In addition, the package could be sold to third parties or the threshold needed for a mandatory offer could deliberately be avoided.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

Results Review: Q1 2009/10 is expected slightly weaker yoy

• Start into new FY 2009/10 expected to be slightly weaker yoy
• Investment Case unchanged - main trigger for the share remains the "takeover scenario" in our view

We project a slightly weaker start into the new FY 2009/2010. This is mainly based on some further ramifications of the economic crisis, the relatively warm weather conditions in FY-Q1 2009/10 (October - December) and the weakening trend of Environmental Energy's adj. EBIT contributions. Unlike recent quarters, we don't expect major disturbing IAS 39 effects, which we had taken as one-offs.

Key developments in terms of divisions (Q1; adj. EBIT before IAS 39; LBBWe):

• Electricity (-20% to EUR 16.8 m): Increasing sales are not expected to translate into EBIT as margins are under pressure and some ramifications of the economic crisis as well as declining clean dark spreads are assumed to impair EBIT contribution.
• District heating (-3% to EUR 28.2 m) / Gas (+5% to EUR 18.1 m): We assume that both divisions suffered a bit due to slightly warmer weather conditions in Q1. However, the gas segment will continue to benefit from beneficial gas purchasing conditions.
• Water (-7,5% to EUR 3.4 m): This is mainly based on our assumption that the water division will fail to fully cover previous year's very strong EBIT contribution.
• Services (+15% to EUR 4.4 m): We remain confident for that division. Measures the management introduced are assumed to slowly bear fruits.
• Environmental Energy (-10% to EUR 15.6 m): The margin pressure, which occurred in recent quarters, is expected to continue.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

Company Update: MVV published annual report - no concrete outlook given yet

WHAT'S CHANGED

• At first glance: figures without major surprises compared to previously published preliminary results and our estimates
• No concrete outlook for FY 2009/10 given – some reluctance indicated for FY 2009/10 and more optimism for FY 2010/11

Today in the afternoon, MVV Energie (MVV) published its annual report for the FY 2008/09. On skimming through, we perceive no major surprises compared to preliminary results, published as of 19. November 2009, which were reported close to our expectations (please see Company Alert).

MVV provides no concrete outlook for the FY 2009/10. However, the message between the lines is rather cautious for the FY 2009/10 and more optimistic for FY 2010/11 when the company hopes to reap some fruits from the implementation of the new strategy MVV 2020. The reason for providing no concrete outlook, MVV justifies with the great uncertainties in the current economic climate. Furthermore, expectations concerning the earnings performance in the 2009/10 and 2010/11 financial years are also influenced by the implementation of the MVV 2020 strategy, which began in October 2009. The company states it currently analysing and evaluating all relevant structures and processes. The company doesn’t excluded the possibility of further one-off charges in the course of the FY 2009/10. This is in line with our estimate of further restructuring charges amounting to EUR 20 m relating to the new strategy. In addition, the management states, implications of the economic and financial crisis, which it cannot yet assess, could also lead to further provision or impairment requirements. Concerning the outlook for the FY 2010/11, MVV expects the strategic course the company is taking to impact on earnings contributing to increased profitability at the MVV Energie Group in the following 2010/11 financial year.

Conclusion: We continue to believe that MVV’s share remains dominated by the takeover scenario, which is the rationale behind our buy recommendation and the target price of 37 EUR. Even if our expectations don’t bear fruit, the takeover scenario will still be valid for the medium term. We still feel the MVV shares remain implicitly hedged at a share price of 31 EUR as outlined in detail in the most recent Company Flash as of July 24, 2009. Given that, we don’t expect a share price reaction on the annual report. We will have to analyze the published annual report in more detail and will come up with a Company Flash in January 2010.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

Results Initial View: Preliminary figures: adj. results broadly in line with expectations

WHAT'S CHANGED

• Adj. figures in line with expectations and MVV's guidance.
• Main trigger for the share remains the takeover scenario.

Preliminary key figures are broadly in line with our expectations and partly marginally below consensus estimates (see chart below). While adj. EBIT and adj. EBITDA figures are reported very closely to our estimates, adj. net profit (EUR 98 m, -11% yoy) is somewhat ahead of our estimate (EUR 94.4 m). All in all, MVV was able to deliver especially on its adj. EBIT guidance given at the beginning of the year. The substantial increase of the top line (sales + 20% to EUR 3,161 m) is assumed to be mainly due to very strong contributions in electricity and gas mainly on the back of successfully supraregional distribution activities.

MVV's preliminary figures don't provide any detailed segment information (LBBWe see Preview) and a new outlook for the FY 2009/10 either. For FY 2009/10, we expect an adj. EBIT level in the magnitude of the FY 2007/08 (EUR 246 m / +2.7% yoy). This information is due in the wake of the annual report, scheduled at December 31.

Conclusion: We continue to believe that MVV's share remains dominated by the takeover scenario, which is the rationale behind our buy recommendation and the target price of 37 EUR. Even if our expectations don't bear fruit, the takeover scenario will still be valid for the medium term. We still feel the MVV shares remain implicitly hedged at a share price of 31 EUR as outlined in detail in the most recent Company Flash as of July 24, 2009. Given that, we don't expect a share price reaction on the preliminary figures.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

Results Preview: Preliminary 2008/09 figures - full year adj. EBIT estimate unchanged

WHAT'S CHANGED

FY figures expected quite solid, despite weak Q4. Main trigger for the share remains the takeover scenario.

We project solid preliminary figures for the FY 2008/2009 (before IAS 39 effect of appr. EUR -221 m). However, Q4 is expected to be impaired due to planned maintenance and repairs as well as the impact of the economic recession (lower demand in electricity and gas in the core market, but disproportionately supraregional increases). In September, MVV announced one off expenses and write downs amounting to EUR 34 m associated with efficiency enhancements regarding the service division. These one-offs are assumed to distort the bottom-line in addition to the IAS 39 effect.

Key developments in terms of divisions (12-month; adj. EBIT before IAS 39; LBBWe):

• Electricity (-49% to EUR 33 m): Increasing sales are not expected to translate into EBIT as margins are under pressure, one-time effects in PY are expected to reverse and startup costs of "Secura Ökostrom" burden.
• District heating (-0.3% to EUR 38 m) / Gas (+85% to EUR 65 m): We assume that both divisions benefited significantly from higher margins, the cold weather conditions at the beginning of the year, favourable gas spot prices and cost reductions. District heating was, though, hit by the sale of its Polish subsidiary.
• Water (+36% to EUR 13 m): This is mainly based on our assumption that burdens booked in previous fiscal year will not reoccur. The operational trend is assumed to be stable to marginally weaker.
• Services (-3% to EUR 19 m): We expect the trends, seen in 9M figures to continue.
• Environmental Energy (-13% to EUR 70 m): The margin pressure, which occurred in 9M, is expected to continue in Q4. This has been indicated by the management and is therefore no surprise.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

MVV 2020: all in all evaluated positively

Yesterday late evening, we met CEO Dr. Müller in the wake of an event in Stuttgart. Most interestingly have been some more details regarding MVV's announced new long-term strategy "MVV 2020" were particularly interesting. The three corner stones of the new strategy are: optimization, implementation of growth and opportunistic evaluations of opportunities.

Dr. Müller highlighted fife growth fields:

1. Renewable Energies (mainly: Biomass, On-shore, higher proportion of Renewables in power generation).
2. Energy related services. MVV believes it can grow here above average (3-5% p.a.) and can benefit from its Nr. 3 market position. This business is to be focussed on market segments with superior margin prospects. To increase margins, MVV aims to streamline this business units' organisational and cost structures. We anticipated EUR 20 m restructuring charges in upcoming quarters.
3. Strengthening of district heating activities. The new project of a combined heat and power plant in Mannheim ("GKM 9", 0.9 GW electrical, 0.5 GW thermal, MVV-stake 28%) creates the base for targeted further increase of market penetration in Mannheim by 10pp from currently 60%.
4. The GKM 9 will strengthen MVV's generation base, improve efficiency (better position in the merit order) in addition to positive perspectives regarding district heating.
5. Intensifying its nationwide sales activities with innovative concepts, as for example "Stromfonds" and "Gasfonds" for industrial clients.

As the foundation and prerequisite for this growth strategy, Dr. Müller considers further optimization across all divisions to be essential. This is also necessary in order to mitigate expected burdens steming from margin erosion, stagnating demand and structural changes.

Examples for opportunities arising are gas storage facilities, gas fuelled power plants, the entrance into the UK waste to energy market or the municipal utility consolidation. Conclusion: We continue to evaluate the new long term strategy positively. The new strategy means an evolutionary development of its former successful strategy. We see this as a rather risk-averse approach and got the impression that Dr. Müller will be very considerate in executing this strategy. All in all, the strategy is convincingly designed to warrant further stable and profitable growth. Despite this information is important for a better fundamental understanding of MVV, this will not move MVV's share as the share remains dominated by the take-over scenario in our view.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

MVV 2020 all in all evaluated positively

1. Increased capital expenditures by approximately 50% compared to recent years: MVV intends to invest EUR 3 bn in its growth and in its existing business by 2020. No concrete breakup of capex has been provided yet. We expect that MVV will be able to finance capex internally, at least in the mid-term.
2. MVV upgrades the further importance of its energy-related services division, which currently generates approximately 8% of MVV's EBIT. This is no major shift compared to the current strategy as this division belonged already to MVV's growth divisions.
3. Intensifying nationwide sales activities with innovative concepts, as for example electricity fund, gas fund for industrial clients and Secura Ökostrom.
4. MVV sees further optimisation across all divisions as the foundation and prerequisite for this growth strategy.

The new strategy doesn't comprise any remarks concerning its former strategy aiming to consolidate within the municipal utility sector. We don't think that MVV is not interested at all in that field any more just because it is not mentioned here. However, as we depicted in the mentioned Flash, Dr. Müller doesn't anticipate a major wave of consolidation. Moreover, he emphasized the company will continue the pricing discipline it has shown so far toward the auctioning off of municipal utilities. Therefore, the new strategy draws the consequences and takes a more realistic approach in that respect.

Conclusion: All in all, subject to further details we evaluate the evolutionary further development of the successful strategy positively. Even so, we don't expect that this development will trigger a major share price reaction. We continue to believe that MVV's share remains dominated by the takeover scenario, which is the rational behind our buy recommendation and the target price of 37 EUR.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

EPS reduced for 2009/10, 2010/11 - current FY affirmed

Q3 figures comprised a slightly uplift in terms of guided sales figures for 2008/09 (to "higher than EUR 2.8 bn", previously EUR 2.8 bn). Given that, we reviewed our model with following key changes:

1) Sales - up: we increased our sales estimates for 2008/09, 2009/10 and 2010/11 to EUR 3.0 bn (+7,8% compared to prev. estimate), EUR 3.2 bn (+9,1%) and EUR 3.4 bn (+13.2%). This is due to the successful nationwide distribution activities a.o. Additionally, we are expecting Gas and Energy prices to recover in 2010/11.

2) Adj. EBIT - partly down: As percept in current 9 month report, we don't assume that increased top-line estimates can be turned into profits. We affirm our estimate in terms of adj. EBIT (EUR 239.6 m) for the current FY, which is consistent with MVV's guidance ("slightly below PY's level"). However, we are getting less confident with respect to our projections for 2009/10 (-2,2% to EUR 245.3 m) and 2010/11 (-6.0% to EUR 251.4 m). The main reasons for that are: a) we believe that the exceptional strong support in Gas and District Heating due to the cold weather at the beginning of 2009 can't be seen as sustainable looking forward, b) we think that the weakness of the Electricity division (price effects, start-up costs for nationwide distribution brand, fiercer competition a.o.) will partly prove to persist, c) Environmental Energy was hit more severe than previously assumed by the economic recession, which negatively affects prices and dilutes margins and which will be rather unlikely to reverse soon.

3) MVV 2020 will lead to restructuring charges according to CEO Dr. Müller, which will be booked in Q4. We anticipate a provision for restructuring amounting to EUR 20 m, which could lead to cost savings and efficiency enhancements of EUR 40-50 m in the mid- to long-term. For more details on the expected content of MVV 2020, please refer to our Company Flash as of 18. Jun 2009.

4) EPS: We confirm our adj. EPS estimate for the current FY, which is also the base for dividend payments. Unadjusted EPS are hit by both provision for restructuring as mentioned and IAS 39 effects (EUR -209 m LBBWe /PY +EUR 88 m). The latter have, however, only an extraordinary accounting effect. EPS figures are lowered given above depicted decreased EBIT estimates (2009/10 EUR 1.56, -3.7%, and EUR 1.62, -9.5%).

Conclusion: We continue to believe that MVV's share remains dominated by the takeover scenario. Thus, we fully confirm our buy recommendation, Target Price 37 EUR, which is based on our assumption that the expected sale of EnBW's MVV stake will bring life in the takeover scenario (see Company Flash as of 24. Jul 2009).

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

Results Initial View: Solid 9 month figures - slightly positive

WHAT'S CHANGED

• Outlook: Sales slightly increased, adj. EBIT confirmed
• Divisions: very strong sales volumes in electricity and gas; Gas very strong

Key developments in terms of divisions (9-month; adj. EBIT before IAS 39; LBBWe):

1) Electricity (-44% to EUR 37.9 m, LBBWe -44%): Very strong volume growth due to a plus of 41% in wholesale (group +14%).The decline in adj. EBIT was due to price and volume adjustments caused by the economic crisis, to start-up sales expenses at "Secura Ökostrom" and to positive one-off items in the previous year.

2) District heating (+11% to EUR 61.6 m, LBBWe +8%)/Gas (+90% to EUR 74.5 m, LBBWe +79%): The increase in DH was mainly due to cost savings, volume and price-related margin effects and a one-time effect in PY's earnings. Gas benefitted mainly from positive volume and price factors, the successful launch of nationwide gas sales, the sale of a gas grid and the reversal of provisions and cost savings.

3) Water (+5.2% to EUR 10.1 m, LBBWe +7%): Reported close to our estimate.

4) Services (-0.4% to EUR 11.7 m, LBBWe -5%): Unlike our expectation, the division shows no significant burden from the economic recession.

5) Environmental Energy (-17% to EUR 54.3 m, LBBWe -15%): The margin pressure, which occurred in H1, continued as expected. In addition, it suffered due to downtime works.

Outlook has been slightly increased regarding the topline - it is now expected to be higher than previously indicated 2.6 to 2.8 bn EUR. However, the guidance for adj. EBIT before IAS 39, which is much more important and in the main focus of the market, was confirmed unchanged.

Conclusion: We don't expect a major reaction of MVV's share on that, as the share remains dominated by the takeover scenario in our view.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

Impressions from the H1 conference call – we confirm our hold recommendation, target price and FYe

Highlights from the H1 conference call:

Outlook confirmed, hopes for an upgrade of the guidance damped:
CEO Dr. Müller damped hopes regarding an upgrade of the FY guidance despite the stronger than expected H1 results. Although he stated that this prediction is a realistic one, he also affirmed the generally conservative pattern of MVV in this respect. We feel quite well with our adj. EBIT estimate for the current FY of EUR 239.6 m (-3.9%). Expected strains in H2 are: 1) Despite MVV wasn’t touched very much from the crisis in H1, the management signalled to be concerned being hit somewhat in H2.
2) The margin pressure in Electricity and Environmental energy is expected to continue. Electricity performed very strong in H1 in terms of sales but disappointed a bit regarding adj. EBIT. This trend is expected to continue in H2 at least with respect to the margin pressure. Dr. Müller agreed to our perception that the successful nationwide electricity sales efforts (Secura Ökostrom) were associated with the investment of money in order to get the market entrance. The break-even of Secura Ökostrom is expected not earlier than 2010/2011. We can imagine as well that the successful electricity fund model has been a reason for margin dilution as well. Regarding the Environmental energy Müller stated that falling prices hit adj. EBIT contributions in H1 by EUR 6 m, which is likely to burden in H2 as well. Furthermore, waste volumes should continue to decline (-4% in H1).
3) The Services division, which is obviously a project business, has been signalled could also be negatively affected by the crisis as customers are more reluctant to invest in their energy procurement in the current environment.
4) The cold weather conditions, which heavily supported adj. EBIT contributions in Gas and District heating can of course not be extrapolated on the full FY.

The merger of the municipal utility companies in Remscheid, Solingen and Velbert is according to Dr. Müller finally failed (at least for the foreseeable future). The management is preparing internal measures in order to improve Solingen’s profitability. No changes concerning the guidance can be derived by that, despite the fact that the deconsolidation of that affiliate would have burdened MVV’s adj. EBIT by EUR 14 m.

Conclusion:

All in all, the conference call had a more negative tenor than the strong H1 figure would assume and we would say is appropriate.

Results Initial View: Strong H1 figures slightly better than expected - outlook unchanged

Strong H1 figures:

H1 figures came in on the operating level slightly better than we had expected (key figures see spread sheet below). The reported net profit was worse than we had expected driven by IAS-39 effects (EUR -245 m, LBBWe EUR -235 m). However, this has only to be seen as an extraordinary accounting effect, which has no impact regarding cash flows.

Conclusion:

All in all, we stick to our view seeing MVV Energie as well positioned. In terms of valuation, we continue to believe that the takeover scenario seen for the medium term (see MVV Energie Flash "How concrete is a takeover scenario" as of 02 April 2009) should continue to have more weight than the valuation of MVV and the share will thus be listed at a higher level than would otherwise be fundamentally justified. In light of this, we don't think that a major share price reaction is justified despite the strong and slightly better than expected Q1 figures. We don't consider to adjust our FY estimate.

Results Preview: Strong development in H1 expected - FYe unchanged

WHAT'S CHANGED: Gas/District heating divisions seen as key drivers benefiting mainly from cold weather conditions and better margins

FYe looks increasingly conservative but we stick to our expectation and do not expect a change of MVV's guidance

We project strong H1 figures (before IAS 39 effect of EUR -235 m) which could positively influence the MVV share temporarily. Given that, our estimate for the FY 2008/09 looks increasingly conservative. Even so, we don't expect an increase of MVV's guidance as well as we don't considering an uplift of our estimates either. Main reason for that is upcoming strains in H2, e.g. some positive impacts within H1 are not considered to be sustainable (weather), margin pressure in the Environmental Energy division and startup costs for "Secura Ökostrom". Please be aware that the above mentioned significant IAS 39 effects, which caused the assumed slump of the net profit, should be treated as an accounting effect. They won't have any impact regarding cash flows.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

MVV Energie - solidity has its price

The Mannheimer MVV Energie (MVV) is continuing on its positive, solid trend with 9M figures exceeding expectations.

The outstanding attribute of MVV is its high share of unregulated activities (76% of EBIT or 37% of revenue). This includes the segments Environmental Energy (energy generation from thermal waste and biomass), District Heating, Water and Value-Added Services. The regulated segments include Electricity and Gas. Given this backdrop and based on our experience, MVV is more dependent on climatic conditions than on cyclic effects.

We consider MVV as very well positioned to benefit from the consolidation of municipal utilities in the coming years due to its so-called shared-services companies ("24/7") and its predominantly communal shareholders. However, to date far fewer municipal utilities were brought to the market than expected.

We consider the transition of successful CEO Dr Schulten to EnBW as a considerable loss. At the same time we anticipate an adequate external replacement.

The potential resulting from portfolio adjustments and efficiency increases has largely been exploited, so that more efforts are needed to achieve further noticeable increases in earnings.

A potential asset swap of major shareholders EnBW and Rheinenergie could lead to a takeover bid by Rheinenergie in the medium term - currently we do not see much reason for takeover speculation, however.

The ambitious valuation is a significant minus point for the MVV share. In our view its stability in times of crisis will still be asked for though.

For legal reasons we are not able to publish the whole research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

For legal reasons we are not able to publish this research report in the internet. Please ask the issuing bank for a copy.

Well prepared for the second wave of consolidation

In future, we expect MVV - apart from its services business - to grow mainly through further acquisitions. The authorised capital provides a corresponding inflow of funds, although there are no suitable investment opportunities at present. MVV is thus well prepared for a second, horizontal wave of consolidation. Due to the new set of data, we have revised our earnings estimates upwards. We have raised the fair value slightly, but our "Hold" rating remains unchanged.

Here you find the complete research analyse for download (pdf).