MVV Energie : Interim Report H1 2024 FY

H1 Interim Report

2024 Financial Year

• H1 Interim Report 2024 FY | MVV

MVV in Figures

		1 Oct 2023		1 Oct 2022	%
		to 31 Mar 2024		to 31 Mar 2023		change
Financial key figures
Sales and earnings
Adjusted sales excluding energy taxes (Euro million)		4,425		4,059		+ 9
Adjusted EBITDA 1 (Euro million)		399		627		- 36
Adjusted EBITDA excluding disposal gains 1 (Euro million)		399		549		- 27
Adjusted EBIT 1 (Euro million)		299		526		- 43
Adjusted EBIT excluding disposal gains 1 (Euro million)		299		449		- 33
Adjusted net income for period 1 (Euro million)		198		353		- 44
Adjusted net income for period after minority interests 1 (Euro million)	149	302		- 51
Capital structure
Adjusted total assets at 31 March 2024/30 September 2023 2 (Euro million)		6,123		6,028		+ 2
Adjusted equity at 31 March 2024/30 September 2023 2 (Euro million)		2,448		2,391		+ 2
Adjusted equity ratio at 31 March 2024/30 September 2023 2 (%)		40.0		39.7		+ 1
Net financial debt at 31 March 2024/30 September 2023 (Euro million)		1,231		823		+ 50

Cash flow and investments

Cash flow from operating activities (Euro million)

Investments (Euro million)

Share

- 99		- 971		+ 90
149	160		- 7

Adjusted earnings per share 1 (Euro)	2.27	4.59		- 51
Non-financial key figures
Electricity generation capacity from renewable energies at 31 March 2024/30 September 2023 3 (MWe)		627		633		- 1
Electricity generation volumes from renewable energies 4 (kWh million)		737		752		- 2
Completed development of new renewable energies plants (MWe)		144		497		- 71
Operations management for renewable energies plants (MWe)		3,954		3,740		+ 6
Number of employees at 31 March 2024/31 March 2023 (headcount)		6,447		6,202		+ 4
Number of trainees at 31 March 2024/31 March 2023 (headcount)		276		268		+ 3

1. Excluding non-operating measurement items for financial derivatives and including interest income from finance leases
2. Excluding non-operating measurement items for financial derivatives
3. Including electricity generation capacity from wind turbines for repowering at 31 March 2024 (28 MW)/30 September 2023 (28 MW)
4. Including electricity generation volumes from wind turbines for repowering at 31 March 2024 (22 million kWh)/31 March 2023 (20 million kWh)

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• H1 Interim Report 2024 FY | MVV

Contents
Highlights	4
Foreword	5
Interim Group Management Report	8
Group Business Performance	8
Business Framework	8
Earnings, Asset and Financial Position	12
Employees	17
Forecast, Opportunity and Risk Situation	18
Forecast for the 2024 Financial Year	18
Opportunity and Risk Situation	19
Interim Consolidated Financial Statements	20
Income Statement	20
Statement of Comprehensive Income	21
Balance Sheet	22
Statement of Changes in Equity	24
Cash Flow Statement	25
Notes to Interim Consolidated Financial Statements	27
Notes to Income Statement	29
Notes to Balance Sheet	32
Responsibility Statement	42
Further Information	43
Financial Calendar	43
Imprint/Contact	44

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• H1 Interim Report 2024 FY | MVV

Highlights

Green electricity from wind and sunshine

We are consistently pressing ahead with expanding renewable energies both in Germany and abroad. In February, our Juwi subsidiary connected the largest PV project in its history to the grid. This involves a 224-megawatt solar park with more than 400,000 solar modules in the US State of Colorado. Juwi is also developing a 10-megawatt solar park without subsidies for the packaging manufacturer SPIES. Based on internal consumption of the energy generated by the plant, SPIES intends to cover at least 20 percent of its electricity needs in future. We are also continuing to expand our proprietary renewable energies portfolio. Juwi is currently building two windfarms with a total capacity of around

46 megawatts in Hochsauerland district that we will include in our proprietary portfolio.

Heat transition for Mannheim

The heat transition is a key lever for the energy transition. In Germany, buildings still account for nearly one third of CO2 emissions. That has to change if the country is to reach its climate targets. Mannheim is one of the first major cities in Germany to present its municipal heat plan. Together with further partners, we will shape the heat transition in Mannheim on this basis. Here, we are mainly relying on two technologies: district heat and heat pumps. We are further expanding district heat in Mannheim and the region and will generate this exclusively from climate-friendly energy sources by 2030 at the latest. Stadtwerke Kiel and Energieversorgung Offenbach are also pursuing ambitious but specific plans to convert their local heat supplies.

Higher regular dividend and special one-off dividend

This year's Annual General Meeting was held in Mannheim on 8 March 2024. For the 2023 financial year, our shareholders approved the proposal made by the Executive and Supervisory Boards to distribute a regular dividend of Euro 1.15 per share, equivalent to an increase of Euro 0.10 per share compared with the previous year, as well as a special one-off dividend of Euro 0.30 per share. Based on the closing price of our share at the end of the 2023 financial year, the distribution of the regular dividend and the special dividend corresponds to a dividend yield of 4.7 percent.

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• H1 Interim Report 2024 FY | MVV

Foreword

Dr. Georg Müller

CEO of

MVV Energie AG

Dear Ladies and Gentlemen,

Germany's energy transition is increasingly taking shape, with more than half of electricity consumption now covered by green forms of generation. The initiatives introduced by the Federal Government to further accelerate the expansion in wind and solar power are taking effect, while additional measures such as the Solar Package I have been adopted. The long-neglected heat transition, by contrast, is only slowly gaining momentum. In Germany, renewable energies do not yet even cover 20 percent of heat demand, and the predominant share of heat still comes from fossil sources, such as coal, oil and natural gas. The new German Building Energy Act (GEG) and German Municipal Heat Planning Act should now inject fresh dynamism into the heat transition.

The future of Germany's gas grids is also finally receiving closer attention. In an MVV study published in summer 2023, we already formulated specific recommendations for action in this area. With the EU's Single Market Gas Package, the necessary foundations have been laid for legal implementation on national level. The Federal Government and the Federal Network Agency (BNetzA) now intend to create the regulatory framework needed to transform gas grids as well and are currently examining options for structuring this.

The power plant strategy also urgently needs specifying in greater detail, as does the framework for capturing, using and storing CO2 from unavoidable emissions, including a market regime for negative emissions.

Heat transition as common task

As far as the heat transition is concerned, Mannheim will be one of the first major cities in Germany to implement a heat plan. The city's municipal heat plan presents a well-considered pathway for the future of centralised and decentralised heat. It will now be a matter of working together on the

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• H1 Interim Report 2024 FY | MVV

necessary process of convincing people to gradually convert their heating to climate-neutral sources. This task is incumbent on all parts of society within the city.

With more than 150 years of experience in the energy sector, MVV is responsible for large parts of the regional and local heat offering. That makes us an important partner to the city in implementing the heat transition. Today, we already cover 60 percent of heat requirements in Mannheim with district heat. In future, this figure should rise to 75 percent. To this end, we are continually expanding our district heat grid and gradually connecting up to 10,000 further buildings to the pipelines. We provide households that do not have any centralised heat option with climate-neutral decentralised heat solutions, such as heat pumps.

In parallel, we are making district heat in Mannheim and the region fully green by 2030. At present, we are connecting the phosphorous recycling plant and biomass power plant in our energy and recycling park in the north of Mannheim to the district heat grid. We will then be able to cover more than half of household and commercial heat requirements in Mannheim with green heat. After that, we will tackle the next expansion stage in order to reach 100 percent green heat. This includes using technologies such as geothermal energy, additional river heat pumps, further industrial waste heat, electrode boilers or biomethane CHP plants.

Tailwind for the electricity transition

We are also pressing ahead with the electricity transition which, alongside the heat transition and green customer solutions, is a further component of our Mannheim Model. To this end, we will increasingly retain domestic wind and photovoltaics projects from our proprietary project development within the Group. In this context, for example, we are including two further windfarms that Juwi is currently building in Hochsauerland district in our generation portfolio. Once complete, the two windfarms will generate climate-friendly electricity for an arithmetic total of around 48,000 households.

The progress we are making with the energy transition shows once again how we are implementing our course of becoming #climatepositive by 2035 with consistency and with business success.

Outlook for 2024 financial year confirmed

Our adjusted EBIT amounted to Euro 299 million. Given the challenging market climate, particularly in terms of declining energy prices on wholesale markets and widespread insecurity, this key figure was, as expected, significantly lower than the previous year's figure. As communicated at the beginning of the year, it should nevertheless be noted that the previous year's earnings were influenced by positive one-off factors, such as disposal gains from the sale of shareholdings and an exceptional performance in the Commodity Services business field due to price developments. For the current financial year, we can confirm our forecast already published in our 2023 Annual Report. From an operating perspective, we still without amendment expect the Group's adjusted EBIT to range between Euro 360 million and Euro 440 million.

With our course of becoming #climatepositive by 2035 and our complementary business models, we are well positioned to achieve sustainable and profitable growth. We would be delighted if you were to continue accompanying us as we head for a #climatepositive future.

Yours faithfully,

Dr. Georg Müller

CEO

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• H1 Interim Report 2024 FY | MVV

Our First Six Months

Adjusted sales
Euro
billion	Adjusted EBIT

Euro million

Investments

Euro million

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• H1 Interim Report 2024 FY | MVV

Interim Group Management

Report

Group Business Performance

Business Framework

Economic and Energy Policy

Economic research institutes cut growth forecast for Germany

At the end of March 2024, the five leading economic research institutes revised their expectations for the 2024 calendar year significantly downwards. In their spring survey, they forecast that gross domestic product (GDP) will now grow by just 0.1 % in 2024. In their 2023 autumn survey, they had still expected growth of 1.3 % for 2024. The recovery in economic output, which in autumn 2023 the institutes had expected to see in the winter half already, had failed to materialise, although private consumer spending had offered some slight support. German exports had fallen, while global economic activity had increased. According to the experts, this was due above all to the fact that demand had remained weak for capital and intermediate goods, which are significant sectors for German exporters. German products, and here in particular energy-intensive goods, had become less competitive in terms of their pricing and production had moved abroad.

In early May 2024, the international Organisation for Economic Co-operation and Development (OECD) issued a further downward correction in its economic growth forecast for Germany. For 2024, its economic experts now only expect to see growth of 0.2 %, having already cut their growth forecast to 0.3 % in February 2024. According to the OECD, the primary obstacle to growth is the uncertainty surrounding planned tax incentives for green investments since a ruling by the Federal Constitutional Court. This ruled that the reclassification by the Federal Government of funds of Euro 60 billion in the 2021 budget to the Climate and Transformation Fund was invalid.

Macroeconomic developments impact above all on the operating business in our Customer

Solutions and New Energies reporting segments.

High court ruling reduces subsidies for energy transition

On 15 November 2023, the Federal Constitutional Court ruled that the financing of the government's Climate and Transformation Fund was partly invalid. Based on the current federal budget, funds of around Euro 60 billion which had been earmarked to finance numerous federal energy transition programmes are no longer available for the Fund. In response, the Federal Government made corresponding budget cuts. These also impact on the Federal Funding for Efficient Heat Networks (BEW), which is intended to incentivise investments in decarbonising heat generation and heat networks. Based on the latest figures, BEW funds for the period until 2029 have been cut by Euro 200 million to around Euro 3.6 billion. By contrast, the sector still views subsidies of at least Euro 3 billion a year as being necessary until 2030.

MVV expects to receive BEW subsidies to support the decarbonisation of its district heat and will submit corresponding applications.

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• H1 Interim Report 2024 FY | MVV

Key decisions for the future of gas grids

In its "Green Paper on the Transformation of Gas/Hydrogen Distribution Grids" released in March 2024, the Federal Government announced extensive adjustments to the legal framework governing the future of gas grids. Among other aspects, the paper outlines a connection refusal and cancellation right for district grid operators and a reform of concession law.

For MVV, the measures being considered by the Federal Government provide options that we require to actively shape the future of gas grids. It is now important that these should be swiftly enacted before the end of this legislative term.

Federal Network Agency (BNetzA) announces adjustments for gas and electricity grid regulation

In January 2024, the Federal Network Agency (BNetzA) announced amendments to the Incentive Regulation Ordinance and to the fee ordinances for electricity and gas grids. The authority is currently considering whether the efficiency comparisons between different gas distribution grids should be reformed or abolished. It should be possible to factor provisions for gas grid decommissioning costs into the grid fees and to adjust depreciation periods for existing grid sections to their expected decommission dates. Furthermore, the regulatory period for gas and electricity grids should be shortened to three years.

In these announcements, the BNetzA is drawing for the first time on the extended powers granted at the end of 2023. The planned amendments are important for gas grid operators as they may provide a reliable and sensible regulatory framework for transforming or decommissioning gas grids.

European Carbon Management Strategy and first key points of national Carbon

Management Strategy published

In February 2024, the European Commission presented its Industrial Carbon Management Strategy. This highlights the importance of capturing and storing and/or using CO2 in order to achieve the European climate protection targets.

In its key points for a national Carbon Management Strategy, published at the end of February 2024, the Federal Government chiefly envisages CO2 capturing being used for process emissions in industry and the waste management industry. Government subsidies should focus on these application fields. One aspect that is important to MVV is the fact that the Federal Government has classified CO2 emissions resulting from waste incineration as unavoidable.

To supplement the national Carbon Management Strategy, the Federal Government is working on a long-term strategy for negative emissions. According to the key points published, this should include proposals for a legal framework for permanently removing CO2 from the atmosphere (so- called negative emissions). For MVV, these considerations on negative emissions are an important aspect for drawing on the potential available at its plant portfolio and thus enabling it to become climate positive by 2035.

Federal Government presents key points for power plant strategy

In early February 2024, the Federal Government presented key points of its power plant strategy. This envisages tendering new power plants on a scale of up to ten gigawatts in the short term to act as H2-ready gas power plants. These plants should be fully converted to hydrogen between 2035 and 2040. In parallel, work is set to continue on the future electricity market design, particularly with view to a capacity mechanism that is to be applied from 2028 at the latest. Political agreement on details of the strategy is scheduled to be reached within the Federal Government by summer 2024, thus enabling the first tenders to be issued before the end of this year.

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• H1 Interim Report 2024 FY | MVV

Positive momentum for expanding renewable energies and electricity storage facilities thanks to Solar Package I

The Federal Parliament approved the Solar Package I at the end of April 2024, with this legislation receiving approval from the Federal Council on the same day. By designating so-called acceleration areas, the Solar Package I has implemented an EU requirement aimed at speeding up the expansion in onshore wind power. The new legislative framework should also promote the addition of new ground-mounted and rooftop photovoltaics systems.

Given the further expansion in the volume of electricity generated from wind and photovoltaics, the system-enhancing deployment of electricity storage facilities is also gaining in significance. The Solar Package I contains positive regulations to facilitate more flexible use of such facilities. These are to be implemented in practice by the Federal Network Agency (BNetzA) in the next two years.

Market Climate

Wholesale prices decline

Wholesale prices (average) H1: 1 October to 31 March

		FY 2024		FY 2023		+/- change		% change
Crude oil 1 (US$/barrel)		82.31		85.37		- 3.06		- 4
Natural gas 2 (Euro/MWh)		37.97		83.17		- 45.20		- 54
Coal 3 (US$/tonne)		108.30		179.64		- 71.34		- 40
CO2 rights 4 (Euro/tonne)		73.66		89.54		- 15.88		- 18
Electricity 5 (Euro/MWh)		94.08		205.97		- 111.89		- 54

1. Brent crude oil; front-month
2. Trading Hub Germany market region; front-year
3. Front-year
4. Front December contract
5. Front-year

Wholesale fuel and electricity prices showed year-on-year reductions, in some cases significant, in the first six months of our 2024 financial year. Prices most recently reached levels that were lower than in the previous year but, viewed over a longer timescale, still higher than in the pre-crisis period.

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