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EBM Annual Result 2016

EBM came significantly closer in 2016 to achieving its objective of being among the top five Swiss utility companies in all four of its core business areas. EBM's acquisitions of AVAG and the energy business of Swisspower precipitated considerable growth in the electricity and grid business. The amount of electricity sold has consequently increased to just under 5 billion kilowatt hours. EBM Group sales rose by 18% to CHF 481 million. Operating earnings before special effects totalled CHF 49 million and are thus slightly below the figure recorded for the previous year. Following the acquisitions, EBM's finances are also very sound with an equity ratio of 66%.

Last year, EBM trained its focus on the four core activities of "Electricity Business", "Grid", "Heating" and "Renewable Energies". Divestments, cost cutting measures and earnings optimisations helped lay a solid financial basis on which to achieve the target growth in the core business.

With sales of CHF 481 million, the EBM group has generated a significant increase (18%) on the previous year. This growth was primarily driven by acquisitions and can be attributed to the summer 2016 acquisitions of Olten-based Aare Versorgungs AG (AVAG) as well as the Electricity division of Swisspower Energy. The operating earnings before special effects amounted to CHF 49 million (previous year: CHF 53 million). In comparison to 2015, electricity prices have stabilised at a very low level. Nevertheless, Swiss electricity production is still making losses – regardless of the production technology being used. Consequently, 2016 saw EBM having to once again reduce its longstanding electricity purchase rights at the Alpiq power plant park and the Birsfelden and Augst hydropower plants by CHF 26 million (previous year: CHF 34 million), which has had a negative impact on the operating result of the Electricity Business segment. All in all, EBM generated an annual profit of CHF 10 million, down 50% year-on-year (previous year: CHF 20 million). This decline can be attributed to the land transactions processed in the previous year. Following the acquisitions, EBM's finances are also very sound with an equity ratio of 66%.

Thanks to the acquisitions, the EBM electricity business in Switzerland and France has grown by over 40% to just under 5 billion kilowatt hours. This comprises electricity sold to customers in the regulated basic services and on the liberalised market inside and outside the EBM grid area as well as electricity trading to optimise procurement. Electricity sales in basic supply services also fell in 2016. As per our expectations, further major customers have switched to the free market. Encouragingly, the traditional customers in the market are staying with EBM; however, at low margins. As was previously the case, only a few major customers in the grid area are procuring electricity from third-party suppliers. Outside of the grid area, EBM is supplying 158 major customers (previous year: 32) and energy supply companies in Switzerland with a total of 1,102 million kilowatt hours (previous year; 245 million) of electricity. In total, EBM provides over 170,000 customers with a reliable, round-the-clock source of energy.

One of EBM's core competences is the high-quality, secure and reliable supply of power. EBM once again invested heavily in 2016, injecting CHF 38 million into the expansion, replacement and maintenance of the power grid. As in previous years, the security of EBM's power supply was also something to be proud of in the reporting year. The average time in which our customers were unable to draw power due to a fault or outage amounted to 15.3 minutes in the Swiss grid area and 18.3 minutes in the Alsace grid area.

In 2016, the Heating segment was impacted by the expansion and densification of existing grids and heating networks. Sales rose by 15%. EBM has entered into a close partnership with the company Réseau GDS (Gaz de Strasbourg) to expand the heating business in France. The joint subsidiary Réseaux de Chaleur Urbains d'Alsace (RCUA) put the new heating plant for the Wacken district heating system into operation in autumn. Almost 90% of the heat is generated from the renewable fuels corn cobs and woodchips. In summer, RCUA took over the concession for the Hautepierre district heating system, Strasbourg's largest district heating network.

The strategic decision to bundle all of the EBM renewable energy activities in aventron AG has also resulted in additional production facilities in Spain and Germany being deconsolidated in the 2016 reporting year and aventron production plants incorporated into the grids as a contribution in kind. The EBM Renewable Energies segment at year-end 2016 thus continues to comprise the "Parque Eòlico Puerto Real I" wind farm in Andalusia and the solar installations in France. aventron's portfolio includes plants with an installed power capacity of around 350 megawatts in six countries (Switzerland, Germany, France, Italy, Spain and Norway). Thanks to its 46% stake in aventron, EBM produces 888.3 million kilowatt hours of electricity using renewable energy. This internal, pro-rata production using renewable energy sources covers roughly 28% of the electricity supplied to EBM customers in Switzerland and France.

(EBM Key Figures for the financial year 2016; see table on page 3)

Further information:

-         Joachim Krebs, Head of Corporate Communication, tel. +41 61 415 43 85, e-mail j.krebs@ebm.ch

EBM

Founded in 1897, EBM is a cooperative under private law operating in the energy sector, primarily in Switzerland and France, but also in neighbouring countries. We offer our customers products that meet their needs reliably and we promote renewable energies and energy efficiency in the areas of the grid, electricity supply and district heating supply. Our grid area, combined with AVAG (Aare Versorgungs AG), comprises 78 municipalities in the Swiss cantons of Basel-Landschaft and Solothurn as well as in Alsace, France. The 170,000 customers get their electricity supplied reliably and round the clock. As a leading supplier of local and district heating, EBM operates 210 heating networks and plants in Switzerland and Alsace. Our holding in aventron AG provides us with an interest in 120 renewable energy power plants with an installed power capacity of some 350 MW. As a responsible and sustainable company, we seek to strike a healthy balance between the concerns of society, the environment and the economy in the long term. We strive to be faithful to our vision by constantly developing EBM as a modern, customer-focused and cost-efficient utility company. To sum up, our company, with its 416 employees and 14 trainees, knows energy inside out.

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