"MVV 2020" strategy project sets out course for further profitable growth at Mannheim municipal utility group - Sales growth in first nine months, earnings slightly down on previous year

Germany's largest municipal utility group, the Mannheim-based energy company MVV Energie AG, which is listed in the SDAX (ISIN: DE000A0H52F5, WKN: A0H52F), met the targets it had set itself in the first nine months of its current 2008/2009 financial year (1 October 2008 - 30 June 2009). Despite the current economic crisis, the successful performance of the electricity, gas and value-added services segments enabled the Group to increase its sales year-on-year by 22 percent from Euro 2.0 billion to Euro 2.5 billion. At Euro 250 million, operating earnings (EBIT before IAS 39) fell only marginally short of the previous year's figure of Euro 251 million. As pointed out by Dr. Georg Müller, CEO of MVV Energie AG, upon the publication of the nine-month results in Mannheim on Friday, by enhancing their operations the group of companies had succeeded in absorbing the effects of the economic crisis, mainly felt in the electricity and environmental energy segments, comparatively well. "Based on current information, we thus expect to exceed the previously forecast level of sales growth from Euro 2.6 billion to Euro 2.8 billion," stated Dr. Müller, "and can at the same time confirm our expectation that operating EBIT will decline only slightly on the previous year's figure."

According to the company CEO, these results mean that MVV Energie is "right on track". To be able to achieve sustainable and profitable growth in an increasingly tough market and competitive climate and changing political framework in coming years as well, the company is currently laying important foundations for the medium to long term with its forward-looking "MVV 2020" strategy project. The overall concept is due to be approved in the autumn already and will be implemented subsequently. At the same time, the company is also investigating possibilities of optimising its existing business. According to Dr. Müller, this could also lead to one-off items affecting the annual financial statements for the current financial year.

The sales growth in the first nine months of 2008/09 was chiefly driven by higher sales in the electricity, gas and value-added services segments. With sales growth of 30 percent in its electricity segment as a result of market success in its nationwide electricity business, MVV Energie was thus able to more than compensate for the decline in turnover in the industrial customer business due to the economic downturn. The gas segment achieved sales growth of 43 percent. This growth was mainly the result of high turnover volumes in the newly established nationwide gas business with industrial and commercial customers, of weather-related volume growth and of delayed adjustments in the gas price in the wake of the rapid rise in the oil price.

The fact that earnings were unable to match the growth in sales was chiefly due to a reduction in EBIT in the electricity and environmental energy segments. Operating earnings in the electricity business were affected above all by crisis-related price and volume adjustments on the sales side, and by the absence of the positive special items reported in the previous year. Not only that, increased generation costs were accompanied by a decline in revenues in the field of electricity generation. Mainly due to a decline in commercial waste prices, as well as to downtime due to inspection work and breakdowns, earnings in the environmental energy segment dropped by 17 percent to Euro 54 million. Positive developments were seen in EBIT in the gas segment, which grew by Euro 35 million to Euro 74 million in the first nine months of the year. The company benefited in this respect both from its successful launch of nationwide gas sales and from weather-related effects, as well as from the sale of a gas grid, reversals of provisions, cost savings in the procurement of gas for special contract customers and the offsetting of district heating gas at Stadtwerke Kiel.

"We have been able to meet the expectation announced at the beginning of our financial year that operating earnings would show only a slight decline, and that in spite of the economic crisis. This provides clear evidence of our well-balanced business portfolio," added Dr. Müller. This positive performance was also reflected in the number of jobs at the Group. Accounting for the reduction in the workforce by 515 employees due to the sale of the Polish subgroup last year, the number of employees at the MVV Energie Group nevertheless rose year-on-year by a total of 145 to 5,926.

The company is thus also well-positioned to address the forthcoming challenges resulting from grid regulation, future cost charges due to emissions trading and the further intensification in competition, to emerge from the current economic crisis in even more robust shape and to further develop MVV Energie as a successful municipal utility group in the German energy market.

Mannheim, 14 August 2009

Note: the complete Financial Report for the 3rd Quarter of the 2008/09 financial year can be found in the download section of this internet site

Key Figures of the MVV Energie Group
1 October 2008 - 30 June 2009

Euro million	2008/2009	2007/2008	% change
Sales excluding electricity and natural gas taxes	2 485	2 042	+ 22
EBITDA before IAS 39 1	357	358	-
EBITA before IAS 39 1	250	251	-
EBIT before IAS 39 1	250	251	-
EBT before IAS 39 1	192	199	- 4
Net income for the period before IAS 39 1	129	138	- 7
Net income for the period before IAS 39 after minority interests 1	117	125	- 6
Earnings per share before IAS 39 3 in Euro	1.78	1.92	- 7
Total assets (as of 30.06.2009 / 30.9.2008)	4 143	3 787	+ 9
Equity (as of 30.06.2009 / 30.9.2008)	1 168	1 270	- 8
Investments 3	157	166	- 5
Number of employees (as of 30.6.2009 / 30.6.2008) 4	5 926	6 296	- 6
1 excluding non-operating valuation items for financial derivatives
2 increase in number of shares (weighted nine-month average) from 65.1 million to 65.9 million as    result of capital increase
3 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
4 including external personnel at Mannheim energy from waste plant