It is a very great pleasure for me to address you directly in this Annual Report for the first time as the new CEO of MVV Energie AG. With its broad range of activities, manifold business opportunities and unique position in the energy market as Germany’s only publicly listed municipal utility network, MVV Energie AG is a remarkable company.

The international financial crisis, the volatile development in primary and downstream energy prices and the slowdown in the global economy have all left their mark on the development of the overall economy in 2008. A further outstanding topic of public discussion has been the need to protect the climate, one which companies operating in our sector are especially bound to confront. Developments on the international crude oil markets have also raised awareness once again of the German economy’s dependence on imports and the issue of supply reliability. The calls for climate protection and supply reliability on the one hand, and for economic viability and appropriate energy prices on the other, present companies in our industry with major challenges. Moreover, German electricity and gas markets have also witnessed increasing competition and a further reduction in grid utilisation fees by the regulatory authorities.

The MVV Energie Group has maintained its ground well in this difficult climate and met its financial targets for the 2007/08 financial year. External sales rose by 17% compared with the previous year. The Group’s earnings power also developed positively, with significant improvements in all key earnings figures. Adjusted to account for the non-cash special item resulting from the recognition of derivative financial instruments under IAS 39, the Group’s sustainable operating earnings before interest and taxes (EBIT before IAS 39) rose from Euro 199 million in the previous year to Euro 249 million (+25%). We therefore also met our target of posting double-digit earnings growth compared with the previous year. The Group’s annual net surplus after minority interests grew from Euro 109 million to Euro 170 million.

All companies within our municipal utility network contributed to this improvement in operating earnings. That too reveals that the MVV Energie Group is superbly positioned in the market with its unique business portfolio consisting of the core business fields of electricity, district heating, gas and water and the high-growth fields of environmental energy and energy-related services.

We would like you to benefit from our successful business performance in the 2007/08 financial year. The Executive and Supervisory Boards will therefore be proposing an increase in the dividend from Euro 0.80 per share in the previous year to Euro 0.90 for the 2007/08 financial year for approval by the Annual General Meeting of MVV Energie AG on 13 March 2009. This is good news, especially in the light of the financial crisis and the downturn in the overall economy, which has led many companies to announce reductions or even cancellations of their dividends.

The share of MVV Energie AG proved to be very stable in an extraordinarily weak market severely impaired by the intensification in the financial crisis in the course of 2008 and by the first tangible impact on the real economy. Not only that, unlike in many other cases, the capital increase successfully executed by MVV Energie AG in November 2007 also had no negative implications for our share price. At Euro 33.20, the price of MVV Energie’s share as of 30 September 2008 was Euro 3.71 (+12.6%) higher than on 30 September 2007 (Euro 29.49). With an equity ratio of 33.5% as of 30 September 2008 (previous year: 27.9%), the MVV Energie Group also has a good foundation for continuing to achieve well-balanced financing on the capital markets for its investments focusing on sustainable growth.

To succeed, we need good managers and good employees. The Executive Board of MVV Energie AG would like to thank them all, as well as the employee representatives, at the companies in our Group for their superb work in the year under report. Together, we will also tackle and successfully master the challenges arising in the new financial year.

On behalf of the Executive Board, I would like to thank you for your support and would be pleased if you would continue to place your trust in MVV Energie AG and in me as its new CEO in the current 2008/09 financial year as well.

Mannheim, January 2009

Yours faithfully,

Dr. Georg Müller
Chief Executive Officer