Vattenfall reports strong annual accounts for 2004: Financial strength creates headroom to invest for the future

Today, the Vattenfall group presents strong full-year results for 2004. The Swedish util-ity has again exceeded the previous year’s profits, improved its financial performance and further reduced net debt.

While net sales rose by just 1.3 per cent to SEK 113,366 (111,935) million during 2004, the operating profit (EBIT) increased by 28.2 per cent to SEK 19,607 million (15,296). Excluding items affecting comparability, operating profit increased by 25.0 per cent to SEK 18,788 mil-lion (15,033). Net profit improved by 29.1 per cent to SEK 11,776 million (9,123). Also, ex-cluding items affecting comparability, net profit increased by 25.6 per cent to SEK 11,230 million (8,944). Vattenfall’s financial position improved considerably. Net debt was reduced during the year by SEK 11.5 billion to SEK 55.4 billion. Cash flow before financing amounted to SEK 13,472 million compared with SEK 9,841 million in 2003. Vattenfall’s Board of Directors proposes to pay out a dividend of SEK 5.6 billion, equal to SEK 42.52 per share, to the owner, the Swedish state. “After years of rapid expansion, consolidation and the integration of acquired companies, Vattenfall today stands strong. The constant and sustainable improvement of our financial position enables us to proceed with our vision of being a leading European energy company. We have gained flexibility to progress with our ambitious investments, as we want to become the Number One choice company for customers. Vattenfall has never before had such a com-prehensive investment programme. It is designed to serve our customers better, to enhance security of supply and to increase constantly the environmental performance of our power generation portfolio”, says Vattenfall’s President and CEO Lars G. Josefsson. In the Nordic countries, Vattenfall further enhanced its activities and programmes to raise customer satisfaction. Among the path-breaking investment decisions taken by Vattenfall’s Board during 2004 was the acquisition of Örestad Vindkraftpark AB where Vattenfall plans to build a large offshore wind power park in Öresund off the coast of Skåne in the south of Swe-den for a total investment sum of SEK 1.5 billion. In early 2004, Vattenfall had decided to invest a further SEK 2 billion in improving operational reliability in the Swedish networks, bringing the total investment to SEK 10 billion over a five-year period. On top of that, in-vestments were also initiated under Vattenfall’s renewal programme for the Swedish genera-tion plants. The investment programmes amount to SEK 24 billion for nuclear power and SEK 6.5 billion for hydro power, making Vattenfall one of the biggest industrial investors in the Nordic countries. In Germany, where new electricity generation capacity of around 40,000 MW will be required by 2020, Vattenfall has started to evaluate two projects: first, a combined heat and power plant (CHP) in Hamburg, and second, a lignite-fired power plant in eastern Germany, jointly providing 1,410 MW. To strengthen its power transmission net, Vattenfall has decided to ex-tend capacity in its high voltage network by 3,000 MW with an investment of around EUR 260 million (approx. SEK 2.3 billion). On the Polish market, major re-investments in heat and power generation (at Vattenfall’s sub-sidiary EW in Warsaw) and power distribution (at Vattenfall’s subsidiary GZE in Gliwice) are currently underway. Until 2007, Vattenfall will be investing PLN 1,2 billion (approx. SEK 2.7 billion) to increase the efficiency, reliability and environmental performance of its Polish op-erations. The entire report is available at www.vattenfall.com (select “Investors” -> “Financial Re-ports”). Press meeting at 10:00h At 10:00h CET, Vattenfall will host a press meeting at the company’s premises in Stockholm, Birger Jarlsgatan 33. Lars G Josefsson, President and CEO, will present the report together with Matts Ekman, First Senior Executive Vice President and Chief Financial Officer, and Hans von Uthmann, Senior Executive Vice President and Head of Vattenfall Nordic. This meeting will be held in Swedish. Analysts’ conference and Conference Call at 12:00h At 12:00h, the results will be presented by Lars G Josefsson and Matts Ekman at an analysts’ conference at Operaterassen, Karl XII:s torg, in central Stockholm. The presentations will be followed by a questions & answers session and will be webcast live on the Internet. Journal-ists are welcome to the conference. The conference will be held in English. You may also follow the presentation via Conference Call. To participate, please dial one of the following numbers a few minutes before 12:00 CET. Dial-In numbers: +44 (0)20 7107 0611 (UK) +46 (0)8 5069 2105 (Sweden) +45 80 883140 (Denmark) +33 (0)1 7070 0543 (France) +49 (0)69 2 22220593 (Germany) For further information, please contact: Knut Leman, Senior Vice President Communications, phone: +46 (8) 739 50 31. Klaus Aurich, Head of Investor Relations, phone: +46 (8) 739 65 14. Martin May, Head of Group Media Relations, phone: +46 (8) 739 52 70. From Vattenfall's Press Office, telephone: +46 8 739 50 10.