Business Performance

The expansion in our Group’s business activities is clearly reflected in the balance sheet, where the total assets of the MVV Energie Group grew to Euro 3 954 million as
of 30 September 2009, up Euro 167 million (+ 4 %) compared with 30 September 2008.

The asset side of the balance sheet is dominated by non-current assets. Due mainly to a higher volume of property, plant and equipment and an increase in intangible assets, these rose to Euro 2 795 million, equivalent to growth of Euro 70 million (+ 3 %) compared with 30 September 2008. Following investments and additions (initial consolidations) on the one hand and disposals, scheduled depreciation and asset impairments on the other, property, plant and equipment, which account for 50 % of total assets (previous year: 52 %), showed an overall net increase of Euro 40 million (+ 2 %) to Euro 1 996 million. The high share of property, plant and equipment underlines the intensity of investment at our group of companies.

We have reported shareholdings that were mainly recognised under other financial assets in previous years in the associates item (Euro 75 million) for the first time in the year under report. In particular, these include our shareholdings in the power plants Grosskraftwerk Mannheim AG and Gemeinschaftskraftwerk Kiel GmbH, in ZVO Energie GmbH and in Biomasse Rhein-Main GmbH. This reclassification is also the main reason for the reduction in other financial assets from Euro 175 million in the previous year to Euro 103 million. Details on changes in the scope of consolidation have been provided in the notes to the consolidated financial statements.

At Euro 272 million as of 30 September 2009, non-current other receivables and assets were at the same level as in the previous year. The largest item here involved the positive fair values of energy trading transactions requiring recognition under IAS 39 (financial derivatives). Current assets rose to Euro 1 160 million, up Euro 98 million
(+ 9 %) on the previous year’s balance sheet date, and thus now make up 29 % of total assets (previous year: 28 %). This increase was chiefly driven by the year-on-year rise in cash and cash equivalents by Euro 224 million to Euro 321 million. This in turn was mainly due to the issuing of promissory note bonds amounting to Euro 203 million to secure liquidity reserves, as well as to the utilisation of credit lines.

Trade receivables fell to Euro 463 million, down Euro 73 million on 30 September 2008. Compared with the volume reported at the end of the previous quarter on 30 June 2009 (Euro 590 million), trade receivables reduced by Euro 127 million. Alongside seasonal factors, this decline – in spite of a higher overall volume of receivables due to sales growth – was the result of optimised receivables management and the netting of transactions customary in the energy trading business. The economic crisis did not lead to any material defaults on receivables in the 2008/09 financial year.

At Euro 282 million, current other receivables and assets were at the same level as in the previous year. Within this item, current receivables from security deposits for energy trading transactions, which are exchanged with external trading partners to reduce counterparty risk given the sharp fluctuations in fair values of energy trading derivatives, increased year-on-year from Euro 11 million to Euro 91 million. This effect was countered by a reduction in loans and a lower volume of current derivative financial instruments.

The amount of Euro 37 million reported in the assets held for sale item in the previous year related in particular to the purchase price receivable agreed for the Polish subgroup, which had not yet been realised at the previous year’s balance sheet date and was initially contributed to the newly founded company MVV Nederland B.V., Netherlands. The inflow of funds from this sale was received in the 1 ^st quarter of the 2008/09 financial year.

On the liabilities side, the equity of the MVV Energie Group declined year-on-year by Euro 157 million to Euro 1 113 million. This development was chiefly due to the annual net deficit for the year under report (including IAS 39 valuation items and one-off restructuring expenses) and to the higher dividend distributed for the 2007/08 financial year.
The share of equity attributable to minority interests amounted to Euro 103 million as of 30 September 2009 (previous year: Euro 116 million). The equity ratio amounted to
28.1 % as of 30 September 2009 (previous year: 33.5 %).

For the internal management of our Group, we also eliminate the cumulative valuation items for financial derivatives recognised under IAS 39 from our balance sheet. It is then apparent that there was a slight increase in the capital generated by the MVV Energie Group and that the outflow due to the higher dividend could be compensated for by the capital generated from operations. On the asset side, we eliminate the positive fair values of financial derivatives amounting to Euro 388 million (previous year:
Euro 426 million). On the equity and liabilities side, we eliminate the negative fair values of Euro 483 million from liabilities (previous year: Euro 348 million) and the resultant net balance of Euro 94 million recognised under equity (previous year: Euro 78 million). On this adjusted basis, the equity ratio of the MVV Energie Group amounted to 33.9 % in the year under report (previous year: 35.5 %).

Compared with the previous year, non-current debt rose by Euro 253 million to
Euro 1 698 million and current debt by Euro 71 million to Euro 1 143 million. By analogy with the asset side of the balance sheet, the development in non-current and current other liabilities was determined by the negative fair values of financial instruments recognised under IAS 39 (energy trading derivatives) . No security deposits bilaterally agreed with trading partners to alleviate the sharp fluctuations in fair values of energy trading transactions were reported under current other liabilities as of 30 September 2009 (previous year: Euro 44 million). The development in financial debt has been reported on the following pages.