Return to growth course after weaker previous year due to weather conditions - Double-digit sales and earnings growth in first nine months

Germany's largest municipal utility group, the Mannheim-based energy distribution and service company MVV Energie AG, which is listed in the SDAX (ISIN: DE000A0H52F5, WKN: A0H52F), met the growth targets it had set itself for the first nine months of the current 2007/08 financial year (1 October 2007 - 30 June 2008). The company achieved double-digit sales and earnings growth compared with the previous year, a weaker period due to weather conditions. As announced by Dr. Rudolf Schulten, Chairman of the Executive Board of MVV Energie AG, upon the publication of the company's nine-month results in Mannheim on Friday, sales grew year-on-year by 15 percent to Euro 2.04 billion (previous year: Euro 1.77 billion), while operating earnings (EBIT) before IAS 39, i.e. EBIT excluding non-cash income of Euro 188 million from the market valuation of energy trading transactions (futures contracts) at the reporting date, rose by Euro 53 million to Euro 251 million. "These highly satisfactory results show that we are absolutely on course. For the year as whole, we now expect to post EBIT before IAS 39 of somewhat more than Euro 240 million."

All companies in the MVV Energie Group contributed to this improvement in earnings. In the past nine months, the municipal utility shareholdings and foreign district heating shareholdings generated sales of Euro 917 million prior to consolidation, compared with Euro 795 million in the previous year, and operating earnings (EBIT) of Euro 143 million, as against Euro 88 million in the equivalent period in the previous year.

Sales at Stadtwerke Kiel rose by 14 percent to Euro 328 million, while its EBIT improved by Euro 18 million to Euro 45 million. Over the same period, Energieversorgung Offenbach increased its sales by 16 percent to Euro 312 million and its EBIT by Euro 15 million to Euro 49 million. Sales at Stadtwerke Solingen grew by 16 percent to Euro 86 million, while its EBIT rose at the same time by Euro 6 million to Euro 13 million. Stadtwerke Ingolstadt posted sales growth of 10 percent to Euro 74 million and EBIT growth of Euro 4 million to Euro 11 million. Sales at Köthen Energie rose by 19 percent to Euro 11 million, while EBIT grew by 27 percent to Euro 1.6 million.

The Czech subgroup reported the highest growth of all companies. Sales here rose by Euro 26 million to Euro 79 million in the first nine months of the current financial year, while EBIT grew by 79 percent to Euro 18 million. Alongside the increase in district heating turnover due to weather conditions, this strong growth was attributable in particular to initial sales and earnings contributions from new shareholdings.

MVV Energie has now completed its previously announced withdrawal from the Polish market. The repurchase of shares in KPEC by the City of Bydgoszcz from MVV Energie AG in the 3rd quarter of 2007/08 was followed on 6 August by the sale, subject to approval by the relevant antitrust authorities, of MVV Polska Sp. z o.o. to E.ON edis energia.

The MVV Energie Group performed especially well in the highly competitive electricity market. The company increased its electricity turnover with end customers to more than 8 billion kilowatt hours, up 9 percent on the same period in the previous year, while external sales rose by 22 percent to Euro 1.01 billion. "We can report further interregional market success in this segment, largely due to the electricity fund models offered nationwide", commented Dr. Schulten. According to the CEO, it had already been possible to acquire electricity fund turnover volumes of 3.9 billion kilowatt hours for the 2008 calendar year, while a total of 5.5 billion kilowatt hours had already been acquired for 2009 and 2010. "The success story is therefore set to continue", he added.

Weather conditions enabled the district heating and gas segments to report end customer turnover growth of 10 percent and 13 percent respectively compared with the first nine months of the previous year. Whereas district heating sales increased from Euro 229 million to Euro 265 million, sales in the gas segment only rose by 3 percent to Euro 306 million due to a decline in volumes in the lower-margin wholesale and secondary distribution business. Even though natural gas prices for end customers remained constant, synergy effects and cost savings achieved in part by optimising gas procurement activities enabled the company to increase the EBIT before IAS 39 of its gas segment to Euro 39 million, up Euro 21 million on the first nine months of the previous year.

The two high-growth segments - value-added services and environmental energy - also developed positively. Value-added services sales rose by 16 percent to Euro 216 million, while environmental energy sales grew by Euro 8 million to Euro 147 million.

"Our results show that MVV Energie is absolutely on course," remarked Dr. Schulten. The CEO sees the measures adopted by the Federal Government in its energy and climate programme as harbouring great opportunities. "As a municipal utility network, we see superb economic prospects for our companies, especially on a regional and local level," he remarked. 20 percent of the electricity generated by MVV Energie at its own plants already came from renewable energy sources and a further 27 percent from cogeneration plants. Given the government's climate protection targets and high energy prices, for both economic and ecological reasons the company would therefore be focusing its business strategy even more closely on the sparing use of energy and raw materials. "We will focusing on our attractive range of products, services and new technologies, with which we can assist our customers in industry, business, the public sector and private households in their efforts to save energy," concluded Dr. Schulten.

Mannheim, 15 August 2008

Note: the complete Financial Report for the 3rd Quarter of the 2007/08 financial year can be found in the download section of this internet site

Key Figures of the MVV Energie Group¹
1 October 2007 - 30 June 2008

Euro million	2007/2008	2006/2007	% change
Sales2	2 042	1 769	+ 15
EBITDA	546	310	+ 76
EBITDA before IAS 39	358	303	+ 18
EBITA	439	205	+ 114
EBITA before IAS 39	251	198	+ 27
EBIT	439	205	+ 114
EBIT before IAS 39	251	198	+ 27
EBT	387	148	+ 161
EBT before IAS 39	199	141	+ 41
Net income for the period	270	90	+ 200
Net income for the period after minority interests	247	78	+ 217
Earnings per share3 in euros	3.80	1.40	+ 171
Cash flow before working capital and taxes	354	312	+ 13
Cash flow before working capital and taxes per share3 in euros	5.44	5.59	- 3
Free cash flow4	26	130	- 80
Total assets (as of 30.06.2008 / 30.9.2007)	4 166	3 278	+ 27
Equity (as of 30.06.2008 / 30.9.2007)	1 365	914	+ 49
Investments5	166	185	- 10
Number of employees6	6 296	6 872	- 8
1 in accordance with International Financial Reporting Standards (IFRS)
2 excluding electricity and natural gas taxes
3 increase in number of shares (weighted quarterly average) from 55.8 million to 65.1 million as    result of capital increase
4 cash flow from operating activities, less investments in intangible assets, property, plant    and equipment and investment property
5 investments in intangible assets, property, plant and equipment, investment property, as    well as payments for the acquisition of fully and proportionately consolidated companies and other    financial assets
6 including external personnel at Mannheim waste-to-energy plant of MVV Energie AG