Quarterly Financial Report

Transcription

1 Quarterly Financial Report January to March 203 p EnBW Energie Baden-Württemberg AG

2 Key figures EnBW Group millions 3/3/203 3/3/202 Variance % 3/2/202 Revenue Generation and trading,556.9, ,344.2 Renewable energies Grids,266.0, ,268.5 Sales 2, , ,277.7 Other/consolidation External revenue, total 5, , ,245.9 Adjusted EBITDA ,340.8 EBITDA ,307.2 Adjusted EBIT ,452.5 EBIT ,289.3 Adjusted group net profit Group net profit Earnings per share from adjusted group net profit 2 in Earnings per share from group net profit 2 in Cash flow from operating activities Free cash flow Capital expenditures Energy sales of the EnBW Group Billions of kwh 3/3/203 3/3/202 Variance % 3/2/202 Electricity Gas Employees of the EnBW Group Number, 3 3/3/203 3/3/202 Variance % 3/2/202 Employees 9,905 20, ,998 The figures of the comparative periods have been restated. 2 In relation to the profit/loss shares attributable to the equity holders of EnBW AG. 3 Number of employees excluding apprentices/trainees and without inactive employees.

3 At a glance With revenues in excess of 9 billion in 202 and some 20,000 employees, EnBW Energie Baden- Württemberg AG ranks among the largest energy companies in Germany and Europe. We generate, trade in, transport and sell energy. Decentralised energy solutions, renewable energies and low carbon production is what our business focuses on. With a balanced business portfolio, we strive to achieve sustainable and profitable growth to the benefit of our partners, customers, employees and owners. Our home market is Baden-Württemberg and Germany. We also operate in other markets in Europe. Table of contents 2 Significant financial developments Interim financial statements of the EnBW Group 3 Highlights January to March 203 (unaudited) 4 EnBW on the capital market 28 Income statement 29 Statement of comprehensive income Management report on the EnBW Group (unaudited) 30 Balance sheet 6 Business activity and economic environment 3 Cash flow statement 2 The EnBW Group 32 Statement of changes in equity 2 Employees 33 Remarks and explanatory notes 22 Research and development 23 Risk management Service 24 Significant events after the reporting date 43 Board of Management and Supervisory Board 25 Forecast 44 Important information Disclaimer This report was prepared purely for informative purposes. It does not constitute an offer or an investment recommendation. EnBW undertakes no obligation whatsoever to update the information and forward-looking statements in this report. More explanations are given on page 44. _

4 Significant financial developments > Adjusted EBITDA posted million and was thereby.8% higher than the year-earlier figure. This figure comprises positive fair value effects on derivatives which offset one another when the underlyings are realised. Adjusted EBITDA excluding these effects stood at million, down 9.9% compared with a year ago. This development in the results lies within the range predicted for the financial year 203. > Adjusted group net profit came in at 45.9 million (-4.4%) and consolidated group net profit amounted to million (-2.%). > By the end of March, EnBW had invested 43.0 million, 25.9% of which went into the expansion of renewable energies. > Compared with year-end 202, adjusted net debt had declined by 3.6% to 8. billion by 3 March 203, mainly due to the positive free cash flow. 2 _

5 Highlights from January to April 203 January Financing agreement signed on EnBW Baltic 2 The European Investment Bank (EIB) is financing EnBW Baltic 2, the largest offshore wind farm so far in the German Baltic Sea, to the tune of 500 million. EIB s participation puts the project on a sound financial footing. The turbines of EnBW s second offshore wind farm in the Baltic Sea are to be commissioned in 204. and reputation, with a clearly defined roadmap as its starting point. The aim is to realign EnBW as a large energy supplier consistently oriented toward the customer. March EnBW s fourth Municipal Energy Day Around 2,000 mayors, local and national politicians, along with senior executives of utility companies in Baden-Württemberg, meet with experts from the energy industry and representatives of associations and science to discuss the energy supply of the future. As the keynote speaker, Franz Untersteller, Minister for the Environment, affirms the plans of the state government to implement the new energy concept. Autonomous hydrogen fueling station inaugurated in Stuttgart In the presence of Franz Untersteller, Baden- Württemberg s Minister for the Environment, EnBW officially marks the start of the trial operation of southern Germany s first hydrogen filling station which produces hydrogen directly on site for its customers. The research project, backed by the German Federal Ministry of Transport, is to demonstrate the everyday suitability of hydrogen as a fuel and investigate the options for storing electricity from renewable energies. A look behind the scenes at EnBW power stations For decades, EnBW s generation sites have been a magnet attracting the public. In 202 as well, more than 45,000 visitors took advantage of EnBW s offer of open dialogue, informing themselves at EnBW information centres which cover the topic of energy, and taking a look behind the scenes at EnBW s power stations. February Programme EnBW 2020 launches the Group s strategic realignment In EnBW 2020, EnBW has launched a programme to accommodate the structural change in the energy industry, with significant changes in the energy market, by evolving as a company as well. The ambitious programme takes account of the aspects of customer orientation, performance, portfolio, processes and structures, the Group s business model 30 amphibian conservationists at EnBW Of Germany s 20 amphibian species threatened by extinction, 9 live in Baden-Württem berg. With this in mind, EnBW and State Office for the Environment, Measurements and Nature Conservation of the Federal State of Baden- Württemberg (LUBW) hold the first nationwide symposium for amphibian protection. Concrete examples of projects from the EnBW amphibian protection programme provide clear proof of the success of the measures promoted by EnBW. April Annual General Meeting of EnBW Dr. Frank Mastiaux, EnBW s Chief Executive Officer, introduces the Group s strategic realignment to the shareholders. The difficult environment in the energy industry is burdening group profit. EnBW has already initiated the first steps to secure its capacity to act, which were partly successfully implemented in 202. In the course of the current year 203, the Fokus efficiency programme is expected to deliver savings of around 600 million, with the requisite impact on profit. Initiatives for the strategic realignment of the company are currently under way. In the process of realignment, EnBW will be focusing on the opportunities arising from the new energy concept, as well as concentrating on tangible contributions to its success while above all reinforcing the company s stronger orientation towards the markets and its customers. _ 3

6 EnBW on the capital market EnBW is honing its corporate strategy with the aim of repositioning itself on the energy market of the future. Beyond this, we continue to rigorously implement our extensive package of measures to safeguard the financial stability and the creditworthiness of EnBW. We place emphasis on ongoing and transparent communication with our target groups. The aim is to retain and foster the trust vested by capital market participants in EnBW. Established issuer on the debt capital market We secure the financing of EnBW's business through our sound internal financing capabilities, by deploying the manifold instruments of short- and long-term borrowing as well as equity financing (> Management report > Financing > p. 6), thereby ensuring that we have flexible access to the capital markets. We continued to rigorously implement our extensive package of measures to safeguard our financial stability and creditworthiness in the financial year 203. In their most recent rating assessments, the rating agencies confirmed EnBW's A rating (Standard & Poor's A-/outlook stable, Moody's A3/outlook negative and Fitch A-/outlook stable). Especially EnBW's sound financial profile and the reliable implementation of our package of measures were positively acknowledged by the agencies. In addition to the key performance indicators the rating agencies employ, the dynamic gearing ratio (adjusted net debt/adjusted EBITDA) is another of EnBW's key financial performance indicators. We have set ourselves the objective of achieving a dynamic gearing ratio of 3.3. Development of the five-year credit default swap (CDS) for EnBW Measured by the five-year CDS, the risk premium inherent in EnBW lending products has remained virtually unchanged in a year-on-year comparison. A comparison of the CDS premiums of Europe's 25 largest companies comprised by the itraxx Index shows a significantly lower level of fluctuation in EnBW CDS, which reflects the confidence of investors in EnBW's credit quality. Performance of the credit default swaps April 202 to March 203 in % Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. CDS EnBW itraxx Europe EnBW share price trend The uptrend seen over the past year on Germany's leading DAX index held steady at the start of 203 as well. It reached its highest level for the year so far of 8,05.07 points on 8 March 203. As per reporting date on 28 March 203, the DAX, which stood at 7,795.3 points, reported an increase of around 2% in comparison with year-end 202. By contrast, the share price trend of the DJ EURO STOXX UTILITY index which tracks the shares of leading European utility companies displayed much greater volatility. On the reporting date of 28 March 203, the index closed at 28.5 points, down approximately 4% as against year-end _

7 EnBW on the capital market Management report Interim financial statements Service The EnBW share was trading at a virtually unchanged level, unaffected by the upbeat sentiment in the overall market, which was attributable, among other factors, to the low proportion of free float. The share shed a little of its value in the first three months of 203. On 28 March 203, the EnBW share was trading at 3.33, which is approximately 3.9% higher than at the end of 202. Performance of the EnBW share from April 202 to March 203 in % Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. EnBW DAX 30 DJ EURO STOXX UTILITY Shareholder structure Since 6 July 202, the federal state of Baden-Württemberg (indirectly via NECKARPRI-Beteiligungsgesellschaft mbh) and OEW Energie-Beteiligungs GmbH have each held 46.75% of EnBW AG's share capital. Gemeindeelektrizitätsverband Schwarzwald-Donau raised its stake in the share capital through the joining of more than 20 cities, municipalities and districts to 0.97% (3 December 202: 0.87%). By contrast, Landeselektrizitätsverband Württemberg, currently in liquidation, reduced its participating investment and no longer formed part of EnBW AG shareholder structure at the end of March 203. Overall the shareholder structure as per 3 March 203 breaks down as follows: Shareholder composition in % OEW Energie-Beteiligungs GmbH NECKARPRI-Beteiligungsgesellschaft mbh Badische Energieaktionärs-Vereinigung 2.45 Gemeindeelektrizitätsverband Schwarzwald-Donau 0.97 Neckar-Elektrizitätsverband 0.63 EnBW Energie Baden-Württemberg AG 2.08 Free float 0.37 The figures do not add up to 00% due to rounding differences. 203 Annual General Meeting approves dividend of 0.85 per share The regular Annual General Meeting of EnBW Energie Baden- Württemberg AG took place on 25 April 203 in Karlsruhe. Attendance corresponded to 97.3% of the voting rights. All items submitted to the Annual General Meeting for approval were adopted. In accordance with the proposal put forward by the Board of Management and the Supervisory Board, a dividend of 0.85 was disbursed for the financial year 202 on 26 April 203. In relation to the share price at the end of the first quarter of 203, this is the equivalent of a dividend yield of 2.7%. In dialogue with the capital market EnBW maintains ongoing and open dialogue with investors, analysts and rating agencies. At the start of March 203, we organised a telephone conference for analysts and investors on the release of the 202 figures. In the context of our customary pan-european investor update in March 203, we held numerous meetings with fixed income and equity investors in the form of group presentations and one-to-one discussions. The main topics were the current situation of the company and the sector, the realignment of the corporate strategy, the content and implementation of a package of measures to safeguard the future, the company's current financial policy and the outlook for the coming years. Our annual Bank Day will take place in mid-may. We will be updating the EnBW Factbook in the second half of 203. We will be holding our Capital Market Day on 3 September 203. _ 5

8 Management report on the EnBW Group (unaudited) Business activity and economic environment With strong roots in Baden-Württemberg, our company ranks among the top energy utilities and energy service providers in Germany and Europe. In order to reinforce and build on this position, we are currently refocusing our corporate strategy under which sustainability goals play a key role. Macroeconomic trends in 203 will not provide any stimulus for the development of our business, and the political and regulatory framework conditions are constantly changing. In the early months of 203, the prices of primary energy sources, CO 2 allowances and electricity on the wholesale markets were in part considerably below the year-earlier levels. Business activities As an integrated energy supplier, the EnBW Group operates across the entire value chain, offering a broad-based business portfolio. Starting with the quarterly financial report from January to March 203, the EnBW Group will be changing its segment reporting against the backdrop of realigning our business model and restructuring the Group. To ensure compatibility, figures were restated to reflect the reference periods. The new segment structure is as follows: Generation and trading segment Renewable energies segment Grids segment Sales segment Other/consolidation Along with the production and trading of electricity, the generation and trading segment also comprises the gas midstream business (long-distance gas distribution) as well as recycling. The activities under the business of generating power from renewable energies are combined together in their own segment. The grids segment encompasses the following stages in the value chain: the transport and distribution of electricity and gas, the providing of gridrelated services, operating grids for third parties and water supply services, for instance. The distribution of electricity and gas and providing energy-related services, examples being invoicing services or energy supply and energy saving contracting, together constitute the sales segment. Along with EnBW AG, the other/consolidation segment includes eliminations between the segments as well as other activities not allocable to the specific segments. Heterogeneous market structures EnBW operates on three different market levels. EnBW's activities in the competitive wholesale markets consist of electricity generation, procurement of primary energy sources and CO 2 emission allowances as well as electricity trading. A key success factor here is an efficient and flexible generation and procurement portfolio. The regulated markets are characterised by political, legal and regulatory conditions. This applies to our grids and to renewable energies, above all wind power, biomass and photovoltaic generation. On the end customer market, the Group advises and supplies a total of some 5.5 million business and retail customers. Customer-focused energy consultation and services relating to the use of energy and local energy systems are becoming increasingly important in these markets. Corporate strategy EnBW is striving to reinforce and expand its position as an important energy utility and service provider in Germany and Europe. Germany's energy environment is undergoing a sea change, which is also having a huge impact on energy policies and commercial framework conditions. EnBW is embracing this change in order to safeguard the company's competitive edge and its long-term future. The changed environment requires the EnBW Group to refocus its corporate strategy more intensively: Consistent customer orientation, geared to customer needs and wishes, is the centrepiece of the realignment. With this aspect in mind, all our activities, business transactions and investments are being reassessed. Beyond this, modernising our organisation and enhancing the efficiency and 6 _

9 EnBW on the capital market Management report Business activity and economic environment Interim financial statements Service sustainability of structures and processes form part of our objectives. Above all, we harness EnBW's long-standing and proven system competence to develop new business segments, taking special account of sustainable concepts such as the "sustainable city". EnBW intends to secure its position as a low carbon generator and to establish itself as a supplier of local energy solutions in the market. In doing so, we are forging ahead with producing energy from renewable energies. We also view cooperation with municipalities and municipal utilities as playing a key role. Beyond this, we are endeavouring to raise the international share in EnBW's value creation in the long term in order to reduce the company's dependency on the energy policy framework in Germany and to seize select opportunities which will boost our growth and profitability. We are convinced that long-term economic success goes hand in hand with achieving ecological and social goals. Sustainable and responsible action is a core principle of EnBW. With this in mind, we are gradually dovetailing our corporate strategy with our sustainability strategy. Macroeconomic situation Following the marked slowdown in global economic growth in 202, the global economy has picked up a little momentum again in 203. The downside risks are being increasingly mitigated by economic policy measures, above all in Europe and in the USA. In January 203, the International Monetary Fund (IMF) revised its forecast for global economic growth in 202 downwards again by 0. percentage point and now anticipates a global economic growth of 3.2%. According to the IMF, the development of the global economy hinges on progress made in solving the sovereign debt dilemma of a number of countries in the euro area as well as problems with the beleaguered budget and real estate market in the USA. Emerging markets, such as India and Brazil, are also affected by the ailing global economy, particularly by the deterioration in foreign trade and the downturn in domestic demand. Growth in these countries has been estimated at 5.% in 202 (20: 6.2%). Expansion in the industrial nations is significantly weaker: In 202, average GDP growth is likely to have amounted to.3% (20:.6%). By implementing a package of measures early on, the Group is creating financial headroom for the future-oriented restructuring of the company without jeopardising EnBW's good credit standing. The package consists of the three components of enhancing efficiency, divestiture and capital measures. The "Fokus" efficiency programme provides for an improvement in EBIT of a targeted 750 million a year. Achieving the full effect of the measures is envisaged before the end of 204, one year earlier than originally planned. The ramping up phase of the efficiency programme is progressing as planned. Along with scaling back its gross investment volume, EnBW is expanding its divestiture programme to a total of 2.6 billion for the period from 202 to 204 (including participation models). Around 500 million has already been realised through the sale of the shares in Energiedienst Holding AG and in the Polish company Rybnik. EnBW successfully completed the planned capital measures in 202. Besides raising the amount of the hybrid bond to a total of billion in April 202, EnBW executed a capital increase of around 822 million at the start of July 202. No further capital measures have been planned for 203. Economic environment The performance of EnBW is influenced by a wide range of external factors. The macroeconomic environment, the price trend in the markets for electricity, fuel and CO 2 allowances, as well as the political and regulatory decisions are factors exerting a decisive influence on EnBW's development. Development of gross domestic product (GDP) World Euro area Germany Czech Republic -..9 Turkey According to data provided by the European Union, economic output in the euro area declined by 0.6% in 202; in the fourth quarter of 202 as well, GDP fell by 0.6% quarter on quarter in the euro area. GDP change in the third quarter of 202 stood at -0.%. Preliminary estimates of the European Commission put the annual inflation rate in February 202 at.8%, indicating a decline compared with 2.0% in January. A year ago inflation was running at 2.7%. GDP growth in the Czech Republic stood at -.% in 202, down from +.9% in 20, due to weak domestic demand pressured by energy and food price hikes and modest wage growth. In Turkey as well, economic growth slowed considerably to 2.5% in 202 compared with 8.5% the year before. Although domestic demand had recovered by the end of 202 and exports reported swifter growth than expected, the decline in the inflation rate was only slight, namely 8.0% in 202 down from 9.0% in 20. Germany's economy expanded by a mere 0.7% in 202, following an increase of 3.0% the year before. In the first quarter of 203, sentiment had brightened again according to the German Institute for Economic Research (DIW); GDP climbed by 0.5% compared with the previous quarter. This represents a significant acceleration in economic _ 7

10 development following a very weak closing quarter in 202 when the German economy contracted by 0.6% in comparison with the preceding three months. Information from the German Federal Statistical Office shows that the annual inflation rate rose by.5% in February 203, driven by above-average price hikes for energy and food, compared with the year-earlier period and by 0.6% against January 203 (+.7%). In a year-on-year comparison, electricity consumption declined by 0.8% in 202. Estimates by the Federal Association of the Energy and Water Industry (Bundesverband der Energie- und Wasserwirtschaft, BDEW) attribute the moderate consumption trend first and foremost to weaker industrial production, particularly in electricity-intensive sectors. According to the first surveys conducted by the BDEW, electricity consumption in January 203 was 2.5% lower than in the year-earlier month. In contrast, gross electricity production climbed by a good 7%. Compared with the previous year, production increased by around % in 202. The BDEW reported stronger demand from abroad, resulting in an export surplus of 23. billion kwh and 3.7 billion kwh both in the year 202 and in January 203 respectively, and thus a positive balance in the exchange of electricity. According to the preliminary forecast released by the Working Group on Energy Balances (AGEB), gross electricity consumption in 202 fell by a little over % to 595 billion kwh. By contrast, energy consumption increased by 0.9% overall. Provisional calculations by the AGEB show that mineral oil consumption declined by 0.5% in 202. In contrast, hard coal consumption climbed by more than 3%. The consumption of brown coal and natural gas rose by approximately 5% and.4% respectively. The strongest percentage increase was reported by renewable energies where consumption rose by a little over 8%. The proportion of renewable energies in the total energy consumption advanced to.6% in 202 (20: 0.8%). In contrast, the share of nuclear energy declined by approximately 8% to 8%. Around 32% of Germany's total energy consumption was covered by the domestic energy resources in the year ended, with brown coal and renewable energies making the largest contribution. Market situation for primary energy sources, CO 2 allowances and electricity The overriding objective of EnBW's trading activities is to reduce the uncertainty in the generation margin which may arise from the price trends of primary sources of energy, CO 2 allowances and electricity in the wholesale markets. EnBW therefore uses the forward market not only to procure the quantities of primary energy sources and CO 2 emission allowances required for electricity generation, but also to sell the scheduled electricity production at the same time. This likewise applies to the quantities of electricity procured by the sales function on the forward market. The terms in the supply contracts concluded the year before are decisive for the costs and income in the first three months of 203. The price developments seen on the forward market in the first three months of 203 will have an effect on the results for 204 and subsequent years. Similarly, this applies to the quantities of electricity procured by the sales function on the futures market. Oil market: The oil prices continued to trend sideways until the end of January 203, mirroring the movement which dominated through to the close of the financial year 202. Subsequently, prices rose until mid-february; the front month price at this time had almost reached 9 US$/bbl. The price hike was mainly attributable to economic and political developments in the USA. The US debt ceiling was suspended until May 203, and the American real estate market recovered more swiftly than anticipated. As from mid-february, prices entered a downtrend again. This development was caused by fears of a premature restraint on America's expansionary monetary policy, the US government's unresolved dispute about the budget, along with the elections and problems in forming a government in Italy. At the end of March 203, the oil price stood at 0.02 US$/bbl (front month) and US$/bbl (front year). Coal market: All in all, the average price level on the spot and futures markets for coal deliveries to the ARA region (Amsterdam, Rotterdam, Antwerp) in the first three months of 203 was below the year-earlier level. The sustained excess supply in the European market in particular acted as a brake on prices. This was attributable to the increase in the export volume of US coal in 202, triggered by a decline in demand for coal, ousted by the advantageous price of shale gas in the American domestic market. The surplus was exacerbated by the expansion in supply from Australia and Indonesia. Uncertainty about how the sovereign debt crisis would develop in a number of European countries dampened prices further. In contrast, consumption in Germany, the UK and Japan proved to be stable. The front year prices tracked the spot price trend and stood at 92.4 US$/t at the end of March 203. The front month price was quoted at US$/t. Price development on the oil and coal markets Average Q 203 Average Q 202 Average 202 Crude oil (Brent) front month (daily quotes in US$/bbl) Crude oil (Brent) annual price 204 (daily quotes in US$/bbl) Coal API #2 Y204 in US$/t _

11 EnBW on the capital market Management report Business activity and economic environment Interim financial statements Service Gas market: Long-term gas import contracts generally form the basis of Germany's gas supply. Prices essentially track the oil price with a time lapse. The cross-border price index of the Federal Office of Economics and Export Control (BAFA) for natural gas, which is published on a monthly basis, also posted 29.02/MWh which is around 2% below the figure in December 20 ( 29.63/MWh). The wholesale markets such as the Dutch Title Transfer Facility (TTF) and the trading hub of the NetConnect Germany (NCG) market territory are important sources of natural gas. In comparison to the year-earlier period, colder temperatures in the first quarter of 203 resulted in spot prices rising to 28.24/MWh, corresponding to an increase of approximately 8% as against the previous year's quarter. In addition, gas storage facilities were at a low level compared with the preceding years. In mid-march, the very low gas storage levels in the UK and the below average temperatures in particular sent spot prices on the TTF surging to more than 40/MWh in some cases. The prices quoted on the futures market tracked the price trend on the spot market through to the end of February but subsequently only partially staged the price increases on the spot market. In the first quarter of 203, they averaged 26.76/MWh, which is approximately % lower in a year-onyear comparison. Development of prices for natural gas on the TTF (Dutch wholesale) in /MWh Average Q 203 Average Q 202 Average 202 Spot Delivery CO 2 emission allowances: Under the European emissions trading system, the requisite number of emission allowances have to be evidenced for the amount of CO 2 emissions from power stations. At the beginning of 203, the price level of emission allowances (EU Allowances EUA) for delivery in December 203 (EUA-3) initially declined significantly. The downturn was attributable to the premature start of the third EU emissions trading period in December 202, which caused excess supply in the market. The EU Commission's proposal to amend the emissions trading directive, which met with rejection by the EU Parliament at the end of January 203, specifically on the issue of keeping strategic reserves for emission allowances, gained a majority in parliament's Committee on the Environment. As a result, the price level recovered slightly in February. The persistent surplus triggered another downtrend in the price of allowances in March. The price level of EUA-3 allowances stood at 4.78/t CO 2 between January and March 203 and was therefore 39% lower than in the previous year's period, falling 36% short of the average price in the financial year 202. The price curve for certified emission reduction (CER) allowances usually parallels the development of EUA-3 allowances. However, the prices of CER allowances tend to be lower due to the limited trading possibilities in the EU emissions trading system. Since the end of 202, CER allowance prices have stagnated significantly below the /t CO 2 mark. The extremely low price level, impacted first and foremost by slack demand, caused the spread between the price curve of EUA-3 and CER-3 allowances to widen. Development of prices for emission allowances/daily quotes in /t CO 2 Average Q 203 Average Q 202 Average 202 EUA-2/EUA CER-2/CER Electricity wholesale market: At 42.27/MWh, the average price for immediate delivery of electricity on the spot market of the European Energy Exchange (EEX) in 202 was around 3 which is 6% lower than the prior-year figure. The background to this price development was, among other factors, the better availability of power stations compared with the year before. Fuel prices also pushed prices down. On the EEX futures market, prices for deliveries in 204 averaged 42.7/MWh (base load product), down approximately 0, equivalent to 9%, against levels seen a year ago and 5% below the average price in the financial year 202. The sustained downtrend in the price curve was determined first and foremost by the lower prices of coal and CO 2 allowances compared with the previous year. The swift expansion of renewable energies also caused wholesale electricity prices to fall. _ 9

12 Development of prices for electricity (EEX) base load product in /MWh Average Q 203 Average Q 202 Average 202 Spot Delivery Electricity and gas prices for retail and industrial customers: According to the most recent BDEW estimates (as per March 203), the monthly electricity bill for an average household with an annual consumption of 3,500 kwh amounted to 83.3 in 203 (202: 75.5). At the start of 203, electricity prices for household customers had risen by an average of 0% according to BDEW data. The price increase was mainly attributable to the substantial increase in the German Renewable Energies Act (EEG) levy, higher network charges across the board, as well as the offshore liability levy introduced by the German government to promote offshore wind power. The average household needed to find around 5 (202: 0) a month for promoting renewable energies. According to the BDEW, industrial customers currently pay an average of 3.57 ct/kwh for electricity (excluding electricity tax). Political framework conditions European energy policy Emissions trading: In order to combat the substantial decline in emission allowances prices, proposals of the EU Commission aimed at achieving a temporary shortfall in fungible allowances are currently being negotiated. This measure is to provide price support. Following the most recent vote in the European Parliament, the success of these proposals is very questionable. The structural reforms discussed as a separate issue for emissions trading are therefore all the more important. Energy and climate policy targets through to 2030: The EU Commission is striving to achieve longer term planning reliability and has therefore put forward options for medium-term targets through to 203 for lowering emissions, expanding renewable energies and enhancing energy efficiency. Infrastructure: The EU Parliament and EU Council have passed a directive which can enter into force in April to accelerate prioritised European infrastructure projects. Based on this directive, important infrastructure projects are to be identified from 204 onwards, swiftly implemented and especially promoted. Financial services legislation: The EU Commission's negotiations in the process of legislation on the Markets in Financial Instruments Directive (MiFID) is ongoing. However, detailed rules for the application of the directive on regulating OTC derivatives trading (European Markets Infrastructure Regulation, EMIR for short) were adopted, and the European Securities and Market Authority is now addressing their implementation. Energy policy in Germany New energy concept: The main topic of debate in the first quarter of 203 was the electricity price brake introduced by Peter Altmaier, Germany's Federal Minister for the Environment, Nature Conservation and Nuclear Safety and Philipp Rösler, the Federal Minister of Economics and Technology. Under this measure, electricity price hikes in general and the EEG levy in particular are to be reduced. According to current statements by the German federal government, no changes are apparently to be made in the feed-in tariffs for existing projects and and those already bindingly planned. Together with Chancellery Minister Ronald Pofalla and the federal states, ministers are to seek other options for curbing the increase in electricity prices. The bill of the Federal Ministry of Economics and Technology on amending various energy directives entails involving energy intensive industries more strongly again in paying grid charges. Similarly, the operators of renewable energies plants are to make a financial contribution to system security through participating in the grid fees levied. The directives are due for adoption before the summer break. In addition, a Ministerial Draft prepared by the Federal Ministry of Economics and Technology was announced in mid-march. This directive is intended to systemise and codify the practice in use since 20/202 of the contractual binding of reserve power stations and the handling of the planned decommissioning of systemrelevant power stations. Ultimate storage: The German government, the federal states and political parties reached an agreement at the start of April 203 that the open issue of permanently storing highly radioactive waste be solved by deploying an impartial enquete commission. A bill on site selection legislation is to be submitted and approved by the Bundestag before parliament's summer recess. Emission control: In March, the Bundestag approved an amendment to the 26th German Federal Emissions Control Act (BImSchV) aimed at improving protection against electromagnetic fields. In contrast to the regulation in force to date, this directive encompasses not only commercially operated radio equipment but also radio stations operated by private and sovereign providers. Moreover, the proposed regulation takes account of the recommended limits for 0 _

13 EnBW on the capital market Management report Business activity and economic environment Interim financial statements Service electromagnetic fields revised by the International Commission on Radiological Protection in 200. Approval by the Bundesrat is still pending. Regulation of the electricity and gas markets Federal Requirements Plan Act: The foundations for accelerating the planning and approval procedures in the transmission grid were laid through the Grid Expansion Acceleration Act (NABEG), adopted in mid-20, and its amendment on 20 December 202. On 9 December 202, the Federal Cabinet passed the Federal Requirements Plan Act. This act was underpinned by the electricity network development plan confirmed by the Federal Network Agency and submitted on 26 November 202 as a draft for a federal requirements plan. As part of this process, the Federal Network Agency scaled back the number of projects, from a total of 75 projects under the draft of the network development plan presented by the German transmission network operators to 5. The act is intended to facilitate the identification of the energy industry necessities and the key priorities of the network expansion projects comprised under the federal requirements plan. In particular, federal and cross-border network expansion projects to which the Grid Expansion Acceleration Act applies are to be identified. The German Bundestag referred the draft of this Federal Requirements Plan Act to the committees after a first reading on 4 March 203. Adoption is not anticipated before April or May 203. Approval by the German Federal Council is not required although it can raise an objection. Electricity network development plan 203 and offshore network development plan 203: Following the initial drafting of the network requirements plan in 202, the four German transmission network operators published their draft of the network development plan 203 on 2 March 203. This plan is based on three different energy-related scenarios drawn up in a consultation process and approved by the Federal Network Agency. In this context, these network operators also presented their draft of an offshore network development plan for the first time. The network development plan 203 outlines the requisite network expansion on land over the next ten to 20 years from the standpoint of the transmission network operators. Compared with the network development plan 202, they see a necessity of further network measures. This assumption is based on the increase anticipated in offshore wind generation capacity in the north of Germany and a reduction in unwanted physical flows of electricity via Poland and the Czech Republic to Austria. Moreover, according to the transmission network operators' calculations, there will be a change in the balance of trade. All in all, a stretch of 4,700 km of existing routes will need to be optimised and the network expanded by 4,000 km for lines in new routes. The offshore network expansion plan consists of the transmission network operators' plan for extending the connection lines of wind farms in the North Sea and the Baltic in the coming ten years. The line construction measures for an offshore network total 2,50 km in length, of which,720 km is accounted for by the North Sea and 430 km by the Baltic Sea. The drafts of the two network expansion plans were accessible to the public for comment until 4 April 203. They will be subsequently revised to include the comments submitted during the consultation procedure. The second drafts of the network expansion plan and the offshore network expansion plan will be released in the summer of 203 and remitted to the Federal Network Agency for reviewing, a process flanked by another consultation phase. Gas network development plan 203: Similar to electricity, the network development plan for gas was also drawn up by the German long-distance network operators for the first time in 202. The gas network development plan became binding on 0 March 203 and incorporates the changes required by the Federal Network Agency in its decision of 0 December 202. For the first time there is now a vital instrument at hand capable of designating requirements in Germany's gas grids. On 8 February 203, the long-distance network operators released the draft of the gas network requirements plan 203 covering the period from 204 to It is based on the scenario framework confirmed by the Federal Network Agency on 8 October 202. The gas network requirements plan 203 was made available to the public for comment within a short three-week window. The various options for storage and power plant connection played a role that was just as important as the modelling variations used to estimate the amount of investment anticipated. The longdistance network operators participating proposed a model that provides for network expansion measures through to 2023 funded by an investment volume of around.5 billion. Aside from this, the draft of the gas network requirements plan also includes a first-time proposal of how given the decline in domestic L gas production the conversion of low calorific gas (L gas) to high calorific gas (H gas) can gradually take place. In accordance with regulatory rules, the gas network requirements plan, including the results from the consultation phase, was submitted to the Federal Network Agency on April. This will initiate a second consultation procedure on the part of the authority over the course of the second quarter. _

14 The EnBW Group Adjusted EBITDA was lifted to million, which is.8% higher year on year. This figure comprises positive fair value adjustments on derivatives that offset one another when the underlyings are realised. Adjusted EBITDA excluding these effects stood at million, thereby falling 9.9% short of the yearearlier figure. EnBW s earnings development was therefore in line with our expectations. Compared with year-end 202, adjusted net debt declined by 3.6% to 8. billion as of 3 March 203 owing to a positive free cash flow. Results of operations Unit sales and revenue Electricity sales of the EnBW Group 3/3/203 in billions of kwh Generation and trading Renewable energies Grids Sales Total Retail customers (B2C) Industry and redistributors (B2B) Trade Total Electricity sales of the EnBW Group 3/3/202 in billions of kwh Generation and trading Renewable energies Grids Sales Total Retail customers (B2C) Industry and redistributors (B2B) Trade Total In the first three months of 203, the EnBW Group's electricity sales stood at 33.5 billion kwh, which is 3.5% lower than in the previous year's period. Unit sales to retail customers and industry fell due to consistently fierce competition. Unit sales in the B2C and the B2B businesses declined by 6.9% to 5.4 billion kwh and by 6.% to 9.4 billion kwh respectively. Electricity sales in Trade came in at.0 billion kwh, down 5.6% from a year ago. Gas sales of the EnBW Group 3/3/203 in billions of kwh Generation and trading Sales Total Retail customers (B2C) Industry and redistributors (B2B) Trade Total _

15 EnBW on the capital market Management report The EnBW Group Interim financial statements Service Gas sales of the EnBW Group 3/3/202 in billions of kwh Generation and trading Sales Total Retail customers (B2C) Industry and redistributors (B2B) Trade Total In the first three months of 203, the EnBW Group's gas sales climbed by 48.4% to 38.0 billion kwh over the prior-year period. In comparison with the first three months of 202, unit sales to retail customers dropped by 0.2 billion kwh, the equivalent of 4.5%, pressured by the competition. Lower temperatures had a positive effect in a year-on-year comparison. In the industrial customers and redistributors business, unit sales increased by 0.9 billion KWh, up to 4.7% in a year-on-year comparison. In the first quarter of 203, as a result of expansion in the gas midstream business, trading activities grew by.7 billion kwh to 3.9 billion kwh compared with the prior-year period. External revenue of the EnBW Group by segment in millions, 2 3/3/203 3/3/203 Variance % 3/2/202 Generation and trading,556.9, ,344.2 Renewable energies Grids,266.0, ,268.5 Sales 2, , ,277.7 Other/consolidation Total 5, , ,245.9 The figures of the comparative period have been restated. 2 After deducting electricity and energy taxes. The EnBW Group's external revenue, including electricity and energy taxes, stood at 5,993.5 million in the first quarter of 203. Net of electricity and energy taxes, it amounted to 5,745.6 million, representing an increase of 2.8% in comparison with 202. Generation and trading: Revenue in the generation and trading segment rose by 32.3% to,556.9 million as against the year-earlier period. This development was attributable to growth in EnBW's trading activities, especially in the gas business. The segment's share in the Group's total revenue climbed to 27.%, up from 23.% a year ago. Renewable energies: In the first three months of 203, the revenues generated by the renewable energies segment advanced by.9% to 93. million against the first quarter of 202, which was, among other factors, attributable to a rise in sales. The segment's share in total group revenue amounted to.6%, unchanged from the previous year. Grids: Revenue growth of 23.2% to,266.0 million in the grids segment is attributable to an increase in EEG revenue, among other factors. In relation to total group revenue, the segment's share rose from 20.2% in the first three months of 202 to 22.0% in 203. Sales: Revenue of the Sales segment rose marginally by 0.7% to 2,824.8 million in the first three months of 203 compared with the year-earlier period. The segment's share in total group revenue amounted to 49.2% which is around 6% lower year on year. Material developments in the income statement The balance of other operating income and other operating expenses posted 64.7 million in the reporting period, up 24.7 million compared with the previous year's figure of million, primarily as a result of positive fair value adjustments on derivatives. In the first three months of 203, the cost of materials rose substantially by 9.9% to 4,559.4 million compared with in the first quarter of 202. The disproportionate increase in the cost of materials measured against revenue is attributable firstly to the downtrend in prices and spreads for electricity generation, and secondly to the necessity of purchasing CO 2 emission allowances since the start of 203 as opposed to year-end 202 when allocation was free of charge. The investment result fell to 4.3 million, down by 83.4 million (previous year: 97.7 million). The decline was mainly due to the fact that income from the disposal of our Polish investment was included in the prior-year period. The financial result dropped by 38.5 million to million. With finance costs largely unchanged against the previous year, the decline in the financial result was caused mainly by lower finance revenue. _ 3

16 Once again, the year-earlier period comprised disposal gains from the divestiture programme. Overall, earnings before tax (EBT) amount to million compared with the previous year's figure of million. In the reporting period, income taxes of 65. million settled around the level of the year before. Earnings EnBW reported a considerable group net profit of million in terms of the proportion of the result attributable to the shareholders of EnBW AG, corresponding to a decline of 8.3 million compared with the year earlier period ( 56.3 million). After the first three months of 203, earnings per share stood at.64 (previous year: 2.30). Adjusted earnings and non-operating result The sustainable earnings power of operating activities is of particular importance for the internal management and external communication of EnBW's current and future development of earnings. For this reason, we use adjusted EBITDA earnings before interest, tax, amortisation and depreciation adjusted for non-operating effects as a key reporting indicator. Adjusted EBITDA of the EnBW Group by segment in millions 3/3/203 3/3/202 Variance % 3/3/202 Generation and trading ,25.2 Renewable energies Grids Sales Other/consolidation Total ,340.8 The figures of the comparative periods have been restated. In the reporting period, the EnBW Group generated adjusted EBITDA of million, up.8% on the prior-year level ( million). This figure comprises positive fair value adjustments on derivatives that offset one another when the underlyings are realised. Adjusted EBITDA excluding these effects stood at million, thereby falling 9.9% short of the year-earlier figure. EnBW's earnings development was therefore in line with our forecast for the financial year 203. The adjusted EBITDA of the generation and trading segment dropped by 4.2% to million (previous year: million). Adjusted for positive fair value effects on derivatives, earnings declined by approximately 25%, impacted first and foremost by lower prices and spreads for electricity production. This was compounded by a burdening effect from the full auctioning of CO 2 emission allowances since the start of 203. The renewable energies segment saw adjusted EBITDA rise marginally to 53.7 million in the first quarter of 203, up from the year-earlier figure of 53.4 million. The unfavourable weather conditions had a negative impact here. Electricity generation from wind energy and photovoltaic facilities fell across the entire sector compared with the first three months of 202. Electricity production from hydro-electric power stations developed better than expected and remained at the high level of the year before. The falling electricity prices had a braking effect on the hydro-electric business, reducing the profitability of our hydro-electric power stations. The grids segment's adjusted EBITDA increased significantly by 7.8% to 34.6 million (previous year: million). This positive performance is chiefly due to higher grid charges and lower overheads. In the period under review, adjusted EBITDA declined marginally to 24.9 million in the sales segment, down from 25.2 million in the prior-year period. Adjusted for fair value effect on derivatives in the gas business, earnings rose by around 22% in the reporting period. Other/consolidation reported a negative adjusted EBITDA of 7. million compared with the positive contribution of 3.8 million made in the first quarter of _

17 EnBW on the capital market Management report The EnBW Group Interim financial statements Service Adjusted earnings indicators of the EnBW Group in millions 3/3/203 3/3/202 Variance % 3/2/202 Adjusted EBITDA ,340.8 Amortisation and depreciation Adjusted EBIT ,452.5 Adjusted investment result Adjusted financial result Adjusted income taxes Adjusted group net profit of which profit/loss shares attributable to non-controlling interests (3.0) (29.0) 6.9 (90.8) of which profit/loss shares attributable to the equity holders of EnBW AG (45.9) (435.) -4.4 (65.8) The figures of the comparative periods have been restated. The decline in the adjusted investment result of 4.8% to 86.6 million (previous year: 0.7 million) is chiefly due to lower earnings generated by entities accounted for using the equity method. The loss in the adjusted financial result increased by 6.4% to 32.7 million (previous year: million) in a year-on-year comparison owing to lower fair value adjustments. Adjusted income taxes amounted to 64.4 million in the period under review, up from 54.2 million the year before. All in all, adjusted group net profit in terms of the proportion of the result attributable to the shareholders of EnBW AG fell by 4.4% to 45.9 million (previous year: 435. million). Non-operating result of the EnBW Group in millions 3/3/203 3/3/202 Variance % Income/expenses relating to nuclear power Income from the reversal of other provisions Disposal gains Other non-operating result Non-operating EBITDA Impairment losses Non-operating EBIT Non-operating investment result Non-operating financial result Non-operating income taxes Non-operating group net profit of which profit/loss shares attributable to non-controlling interests (.6) (0.6) - of which profit/loss shares attributable to the equity holders of EnBW AG (27.) (26.2) The figures of the comparative period have been restated. Non-operating EBITDA returned a profit of 2.0 million in the reporting period, up from 0.8 million in the first three months of 202. As no impairment losses were incurred in the first quarter of 203 or in the year-earlier quarter, non-operating EBIT corresponds to non-operating EBITDA in both these periods. In the first quarter of 203, the non-operating investment result declined by 68.3 million to 27.7 million compared with the year-earlier period which included disposal gains from the sale of our investment in Poland as part of our divestiture programme. The non-operating financial result dropped to -0.3 million in the period under review, down from the positive result of 30.2 million reported in the first quarter of 202, which was originating from disposal gains. Non-operating income taxes stood at 0.7 million in the first quarter of 203 compared with 0.2 million in the prioryear period. Overall, non-operating group net profit in terms of the proportion of result attributable to the shareholders of EnBW AG declined by 78.5% to 27. million. _ 5

18 Financial performance of the EnBW Group in millions 3/3/203 3/3/202 Variance % Adjusted EBITDA Non-operating EBITDA EBITDA Adjusted EBIT Non-operating EBIT EBIT Adjusted group net profit Non-operating group net profit Group net profit The figures of the comparative period have been restated. 2 In relation to the profit/loss share attributable to the equity holders of EnBW AG. Financial position Financing A core element of EnBW's financing is its cash flow from operating activities, which amounted to 298. million in the first three months of 203. In terms of external financing, the company has various instruments at its disposal, of which some have not been utilised to date: Commercial paper (CP) programme for a total of 2.0 billion (undrawn as of 3 March 203) Syndicated line of credit for 2.0 billion (undrawn as of 3 March 203) Bilateral short-term lines of credit ( 52 million, undrawn as of 3 March 203) Euro Medium Term Note (EMTN) programme with a limit of 7.0 billion ( 4.0 billion utilised as of 3 March 203) The capital market instruments maturing total around.0 billion in the financial year 203, an amount which we succeeded in reducing back in January 203 through the repayment of a bond of approximately CHF 300 million. The repayment was made without fresh borrowing. The CHF bond served as collateral for EnBW's activities in Switzerland. With this in mind, we are considering another refinancing in CHF. In the current financial year, other bonds falling due amount to around 750 million. Aside from possible interim financing, we will fund these bonds entirely from the cash flow. EnBW will be endeavouring to reduce net debt further. EnBW bonds present a balanced maturity profile seen in terms of the next few years. 6 _

19 EnBW on the capital market Management report The EnBW Group Interim financial statements Service Capital expenditure and acquisitions In the first three months of 203, the EnBW Group invested 43.0 million, down 2.6% and therefore slightly below the year-earlier figure ( 46.8 million). Investments in intangible assets and property, plant and equipment totalling 4.7 million (previous year: 42.9 million) went chiefly towards network expansion and the major RDK 8 and EnBW Baltic 2 projects. The financial investments amounted to.3 million in the first three months of 203, down from 3.9 million in the previous year's period. Minus divestitures totalling 36.2 million, primarily from the disposal of non-current assets, and including construction cost subsidies, net capital expenditure stood at 06.8 million compared with the year-earlier figure of million. This year-earlier figure resulted from the high level of divestiture amounting to million which was principally generated by the disposal of our Polish investment and overcompensated the gross capital expenditure of 46.8 million. The proportion of investments in replacement and renewal measures stood at around 38% in the first quarter of 203 and was earmarked for the expansion and maintenance of existing power stations and grid infrastructure. The share of capital expenditure in growth projects reached approximately 62%, serving principally to fund the realisation of the second offshore wind farm EnBW Baltic 2 and the construction of the RDK 8 hard coal power station. The large majority of investments in intangible assets and property, plant and equipment, namely 50.7% and equivalent to 7.9 million, was accounted for by the grids segment. These activities concentrated on the expansion and upgrading of our grids and the connection of facilities for the generation of renewable energies. The renewable energies segment received funds of 37. million, corresponding to 26.2% of capital expenditure. A total of 24.2 million, which makes up 7.% of the EnBW Group's total capital expenditure, was invested in projects in the generation and trading segment in the period under review. In addition, 8.5 million, or around 6.0%, went mainly towards bolstering the sales force. Net cash investments of the EnBW Group in millions 3/3/203 3/3/202 Variance % 3/2/202 Generation and trading Renewable energies Grids Sales Other/consolidation Total capital expenditures on intangible assets and property, plant and equipment Cash paid for the acquisition of subsidiaries and entities accounted for using the equity method Cash paid for the acquisition of investments Cash paid for changes in ownership interest without loss of control Total investments Cash received from disposals of intangible assets and property, plant and equipment Cash received from construction cost and investment subsidies Cash received from the sale of subsidiaries and entities accounted for using the equity method Cash received from the sale of investments Total divestitures Net (cash) investments The figures of the comparative period have been restated. 2 Without investments held as financial assets. _ 7

20 Liquidity analysis Free cash flow of the EnBW Group in millions 3/3/203 3/3/202 Variance % 3/2/202 Cash flow from operating activities Change in assets and liabilities from operating activities Interest and dividends received Interest paid for financing activities Funds from operations (FFO) ,78.7 Change in assets and liabilities from operating activities Capital expenditures on intangible assets and property, plant and equipment Cash received from disposals of intangible assets and property, plant and equipment Cash received from construction cost and investment subsidies Free cash flow The figures of the comparative period have been restated. In the first quarter of 203, the operating cash flow posted 298. million, down 0.8% on the year-earlier figure of 334. million. Funds from operations (FFO) amounted to million, which is.4% higher than the previous year's figure of 72.6 million. The increase is mainly attributable to lower interest payments resulting from the repayment of bonds maturing of billion in the first quarter of 202. In a year-on-year comparison, the balance of assets and liabilities from operating activities rose by 49.2 million, mainly owing to the increase in derivatives in the reporting period. A countereffect was constituted by the decline in the balance of trade receivables and payables. Capital expenditure in intangible assets and property, plant and equipment remained unchanged from the year-earlier level, resulting in a free cash flow of million, which corresponds to an increase of 32.3 million, the equivalent of 4.5%. Cash flow statement of the EnBW Group in millions 3/3/203 3/3/202 Variance % 3/2/202 Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities , Net change in cash and cash equivalents Net foreign exchange difference Change in cash and cash equivalents The figures of the comparative period have been restated. A cash outflow of million was reported under the cash flow from investing activities in the first quarter of 203. In the previous year's period, this item saw a cash inflow of 74.7 million from the disposal of our investment in Poland. In the first quarter of 203, the cash outflow of 269. million under the cash flow from financing activities was substantially lower in a year-on-year comparison. The decline was mainly due to the repayment of a bond maturing in an amount of billion in February 202. The Group's cash and cash equivalents contracted by 23.3 million in the reporting period. 8 _