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28.08.2018 - EWE AG

EWE holds its own in an expectedly difficult market environment

Revised corporate strategy defines future growth areas

Oldenburg, 28 August 2018. In the first half of the year, the energy and telecommunications service provider EWE has held its own in an expectedly difficult market environment: As of 30 June of the current financial year, Group sales were, at EUR 3,493.5 million, lower than the previous year’s level of EUR 4,209.1 million. However, the half-year figures from 2017 and 2018 – particularly those concerning sales – are only partially comparable: the decline in sales is mainly due to the adoption of a new International Financial Reporting Standard (IFRS 15), which became mandatory at the start of this year. Nevertheless, the  operating EBIT – the Group’s operating activities ratio – was, at EUR 265.7 million, lower than in the first half of the previous year (EUR 331.0 million). On the other hand, the profit for the period rose from EUR 110.7 million to EUR 149.7 million. At EUR 188.0 million, capital expenditure was approx. EUR 100 million lower than in the first half of the previous year.

The average number of employees in the EWE Group rose year-on-year to 9,274 (previous year: 9,107). This increase resulted from factors including the acquisition of the wind project planner TurboWind as well as a personnel increase in the Sales, Services and Trading segment. At swb, the workforce declined because of an increase in the number of employees retiring.

The trends for the various business areas varied: operating EBIT in the Renewables, Network and Gas Storage segment increased year-on-year by EUR 9.1 million to EUR 233.5 million. On the other hand, the Sales, Services and Trading segment was, with an operating EBIT of EUR 40.6 million, approximately EUR 16 million short of the figure for the previous year. The International segment fell by almost EUR 10 million to EUR 14.1 million due to a difficult energy framework, lower gas tariffs and the declining exchange rate for the Turkish lira. The operating EBIT of the swb segment declined steeply by approximately EUR 47 million to EUR 6.0 million. This decline reflects several adverse factors, such as negative effects of new statutory regulations and negative volume effects due to power plant outages.

Outlook
Expectations for the remainder of the financial year remain cautious. As already announced in the spring, EWE envisages a year-on-year decline of between 15 and 30 per cent in its operating EBIT for the current 2018 financial year in view of specific industry trends, the political and regulatory framework and the continuing intense competition in the energy and telecommunications markets. EWE’s CFO, Wolfgang Mücher, comments: “The conditions remain difficult, with an onerous regulatory framework and challenges in our foreign markets. We are responding to this through measures such as investments in growth areas and new technologies. We are sticking to our envisaged target range for the current financial year and are already pursuing this goal by means of the appropriate development approaches and measures.”

Corporate strategy proposes transformation into solutions provider
”We are operating in highly dynamic markets which require a high level of flexibility, willingness to embrace change and cost awareness on our part,” agrees EWE’s CEO, Stefan Dohler. The company will systematically develop the future areas which EWE presented a few days ago in its corporate strategy and will boost its performance: “We can get even better in the areas of costs, speed and quality and we intend to follow through on those improvements,” Dohler remarks. Dohler’s summary of the Group’s realignment sees the strategy as paving the way from traditional energy supplier and telecommunications company to a solutions provider that brings together the areas of energy, heat, telecommunications, data and mobility for its customers through a simple and dependable approach. The expansion of the region’s fibre optic network shall remain a core investment focus over the next few years. As already announced, EWE is set to increase the availability of high-performance data networks with an investment volume of EUR 1.2 billion. “At the same time, we will significantly step up our commitment to new, innovative services such as electric mobility and electricity storage and link data intelligently and securely for our customers’ benefit,” Dohler comments.

EWE’s half-year report and corporate strategy can be downloaded from www.ewe.com:

https://www.ewe.com/de/investor-relations

https://www.ewe.com/de/konzern/ueber-uns/strategie