Optimistic view to the future at AGM of Mannheim-based energy company - MVV CEO, Dr. Georg Müller, aims for further profitable growth

The Mannheim-based energy company MVV Energie AG sees the current economic and financial crisis as harbouring more opportunities for the company than risks. Dr. Georg Müller, CEO of the municipal utility group, which is listed in the SDAX, since the beginning of the year, is thus optimistic with regard to the future - "even though production cutbacks or larger-scale payment difficulties could impact negatively on our large customer business". At the company's Annual General Meeting held at Congress Center Rosengarten in Mannheim on Friday, he underlined that MVV Energie, with its "combination of core and high-growth businesses and balanced mix of activities in regulated and unregulated markets" and customer structure characterised by medium-sized companies, was "a stabilising factor in the overall system". "We are supporting the local economy by investing. We are helping cost-conscious companies and businesses cut their energy costs and enhance their competitiveness by increasing their energy efficiency. And we are using renewable energies to supply steam and electricity to companies on location", added Dr. Georg Müller.

MVV Energie will be investing more than Euro 100 million in such climate protection projects in Mannheim alone by 2020. "That will help companies both to survive and to escape the crisis", commented Dr. Müller. "It will secure and create jobs in the entire region and is consistent with our understanding of social responsibility." According to its CEO, MVV Energie had developed and launched onto the market a successful business model based on the requirements of climate and environmental protection. His company stood for increased competition, customer focus and innovation. "Creativity, speed and flexibility - these are the strengths which we will draw on to consistently exploit the opportunities presented by the current challenges, opportunities which any such reorientation always involves".

Following a weaker performance in the previous year due to a very mild winter, MVV Energie successfully maintained its growth course in the past 2007/08 financial year (1.10.2007 - 30.9.2008), increasing its operating earnings (EBIT) excluding energy trading transactions requiring recognition under international accounting standards (IAS 39) to Euro 249 million. Annual sales excluding energy taxes rose over the same period to more than Euro 2.6 billion. The company maintained its ground well in a difficult market climate and achieved its financial targets. All key earnings figures showed significant improvements.

The dividend distribution to shareholders is based on the separate financial statements of MVV Energie AG for 2007/08 compiled in accordance with the German Commercial Code (HGB). On this basis, the company reported an annual net surplus of Euro 93 million, compared with Euro 68 million in the previous year. The Supervisory and Executive Boards are proposing an increase in the dividend by 10 cents to 90 cents per share for approval by the Annual General Meeting. Based on 65.9 million shares, the distribution total would thus increase by Euro 6.6 million to Euro 59.3 million.

Notwithstanding the macroeconomic uncertainties, the MVV Energie CEO affirmed the outlook published in January for the current 2008/09 financial year. Accordingly, the company expects to generate single-digit sales growth compared with the previous year to Euro 2.8 billion and to post a slightly lower level of sustainable operating earnings (EBIT before IAS 39).

Turning to the latest discussions surrounding energy policy, Dr. Müller argued against any further concentration of generation and sales in the German and European energy markets. "For there to be real competition, there also has to be competitors." Only with a suitable energy policy framework would the market be able to become more competitive.

This was true of both gas and electricity markets. The CEO of MVV Energie thus called for the establishment of uniform H gas and L gas market regions, as well as for the transparent use of transport and storage capacities and of balancing energy markets. In the discussions surrounding the future of transmissions grids, MVV Energie is also relying on efficiency enhancement and increased competition based on significantly closer cooperation between transmissions grid operators. "Not least due to the expansion and integration of renewable energies, transmissions grid must be managed efficiently and transparently - as a marketplace in which intense competition is actually lived out."

With regard to the forthcoming modernisation of Germany's power plant infrastructure, MVV Energie is in favour of a balanced mix of energy and technology. "If we want to secure an energy supply in Germany which is both climate-friendly and reliable, then we will need not only to further expand renewable energies and make greater efforts in terms of energy efficiency - we will also need to invest in modern gas-fired power plants, as well as in modern coal-fired power plants", commented Dr. Müller. Environmentally-friendly cogeneration of electricity and heating energy played a particularly important role in this respect.

Mannheim, 13 March 2009