Successful performance in a difficult environment

In 2009 BKW recorded higher revenue and operating income. The easing on international financial markets led to a significantly improved financial result and higher profit for the year. BKW expects to close 2010 with stable revenue and slightly lower operating profit.

BKW recorded yet another slight increase in revenue in the 2009 financial year. The energy business performed well in a difficult economic and regulatory environment. Revenue from sales in Switzerland increased due to higher electricity prices and a rise in electricity sales outside the supply region. Electricity trading also grew revenue due to volume and price-related factors. In terms of international sales, the decline in demand in Italy due to the economic downturn was not fully offset by volume-related growth in revenue in Germany. Positive developments in the energy business contributed to the higher operating profit. The recovery on international financial markets had a positive impact on the financial result and accordingly on net profit.

In 2009 BKW increased consolidated operating revenue year- on-year by 2.8 percent to CHF 3,592.6 million. Operating profit before depreciation, amortisation and impairment (EBITDA) ended the year 6.4 percent higher at CHF 501.6 million, thanks to the sustained strength of the Group's operating earning power and a change in pension plan assets of CHF 28.6 million booked to income. At CHF 298.5 million, profit for the year was 115.2 percent higher. Due to the recovery on equity markets, and in particular the related positive impact on the state funds for decommissioning and disposal, the financial result ended the year in profit, with a corresponding increase in net profit.

The 2009 annual report now contains segment reporting by business division, in accordance with the IFRS 8 accounting standard "Operating Segments". Information on the segments is provided in Note 5 to the financial statements. BKW is organised into business divisions and has three business segments: Energy Switzerland, Energy International and Trading, and Networks. Introduction of segment reporting has further enhanced transparency.

Outlook

BKW expects to close the 2010 financial year with stable development in the energy business and revenue on a par with the prior year. Nevertheless, sustained low energy prices on the international markets, economic uncertainty, new regulatory requirements and costs related to strategic projects – particularly in connection with the drive to expand production – are likely to have an impact on the operating result. Taking all these factors into account, EBITDA is likely to fall short of the 2009 figure, adjusted for the special effect of the adjustment in pension plan assets booked to income. The financial result is dependent on financial market movements; assuming that the recovery is now complete and that financial markets remain stable, BKW expects to close 2010 with net profit lower than the prior-year figure.