MVV reports strong 2021 financial year and is set to become climate positive from 2040
The course taken by the Mannheim energy company MVV towards climate neutrality is paying off – At Euro 278 million, best earnings in company’s history – Savings of one million tonnes of net CO2 emissions a year achieved ahead of plan – MVV CEO Dr. Georg Müller: “With our Mannheim Model, we are stepping up the pace of our climate protection efforts even further”
Reporting a strong 2021 financial year (1 October 2020 – 30 September 2021), the Mannheim-based energy company MVV Energie AG (WKN: A0H52F, ISIN: DE000A0H52F5) has shown that economic success and business stability can go hand in hand with climate neutrality. “We are on the right track with our integrated business model and its focus on climate protection”, stressed MVV’s CEO, Dr. Georg Müller, at this year’s annual results press conference. This was held once again on a solely digital basis on Tuesday. “Despite the ongoing coronavirus pandemic and challenging conditions in the energy industry and on the markets, we can look back on a very successful financial year with the best earnings in our company’s history.”
Adjusted sales grew year-on-year by 18 percent to Euro 4.1 billion, meaning that MVV further exceeded its latest guidance issued in August 2021. This sales growth was due above all to volume and price factors for electricity and gas. Operating earnings (adjusted EBIT) increased year-on-year by almost 20 percent to Euro 278 million. All operating reporting segments contributed to this growth. For Dr. Müller, this provided confirmation of the MVV Group’s business model and its positioning along all core steps of the value chain. The earnings growth was driven by the project development business at MVV’s wholly-owned subsidiaries Juwi and Windwärts, cooler weather conditions compared with the previous, price developments on the energy markets and the full consolidation of newly acquired companies. Juwi is building a solar park with capacity of 204 MW in Northern Greece. When completed in spring 2022, this will be the largest solar park in south-eastern Europe and also Juwi’s largest photovoltaics project. Windwärts posted the best results in its history. By contrast, earnings were adversely affected by lower wind volumes compared with the previous year.
Earnings before taxes (adjusted EBT) rose year-on-year by Euro 53 million to Euro 234 million. Adjusted net income after minority interests improved by Euro 46 million to Euro 150 million in the year under report. Adjusted earnings per share stood at Euro 2.28. “Our business success is not only reflected in our key financials”, stressed Dr. Müller. MVV had also expanded its workforce by 210 to 6,470 employees at the end of the year under report.
Given the company’s earnings growth in the 2021 financial year, the Executive and Supervisory Boards are proposing a renewed rise in the dividend to Euro 1.05 per share, corresponding to an increase of Euro 0.10 per share or more than 10 percent. Dr. Müller: “With this distribution, we are maintaining our policy of enabling our shareholders to participate to an appropriate extent in our earnings performance.”
The environment in which MVV operates will remain challenging in the 2022 financial year as well, not least as a result of the coronavirus pandemic and volatile conditions on the energy markets. For the 2022 financial year, MVV nevertheless expects to be able to further notably exceed the excellent earnings posted for 2021. The company also intends to significantly raise its investments again compared with the previous year.
Investments document MVV’s pioneering role in the energy turnaround
“Investments form the basis for sustainable, profitable growth and help us to gradually and continually implement the energy turnaround”, explained Dr. Müller. Thanks to its investment and efficiency initiatives, by the end of the 2021 financial year MVV had reached the first of the sustainability targets it set itself in 2016, and that earlier than planned. MVV managed to reduce CO2 emissions in the energy system by one million tonnes a year, five years ahead of the original target date. For Dr. Müller, this “clearly documents the willingness and ability of the entire MVV Group to put its plans into action”. MVV had once again underlined the pioneering role it was taking in the energy turnaround. That was also reflected in the further rise in generation capacities for green electricity and green heat.
In the 2021 financial year, MVV again invested more than Euro 300 million. Operations were launched at the MVV Group’s new energy from waste plant in Dundee in Scotland, which is a prime example of a modern circular economy. In Germany, MVV linked up its energy from waste plant in Leuna to the district heating grid at Stadtwerke Merseburg, enabling the municipal utility company to cover up to 50 percent of its district heating needs with energy from climate-friendly generation. In Mannheim and Offenbach, MVV is investing in new phosphorous recycling plants to recover the phosphorous contained in sewage sludge. MVV is also expanding its capacities for fermenting and generating energy from organic waste and currently building a further plant in Bernburg in Saxony-Anhalt. The bio-natural gas generated will be fed into the regional gas grid.
Not only that: MVV enlarged its own green generation portfolio with additional windfarms and, for the first time, open-space photovoltaics systems, for example in Schleswig-Holstein and Mecklenburg-Western Pomerania. Moreover, based on a joint approach with MVV Trading, Juwi received the first contract in a tender for a combined “wind + storage” project, for which the electricity will be marketed via a power purchase agreement (PPA).
One of the first climate-positive energy companies with the “Mannheim Model”
Dr. Müller announced that MVV would be stepping up the pace of its climate protection efforts even further: “Decarbonising the economy and society as a whole is a key task, one in which the energy industry has a particularly important role to play as one of the largest sources of emissions. For MVV, climate protection and the energy turnaround have long been the principles guiding our actions.” Only this way will it be possible to reach the targets set out in the Paris Climate Agreement and limit global warming to 1.5 degrees. As confirmed in November 2021 by the prestigious “Science Based Targets initiative” (SBTi) following its own extensive scientific review, MVV’s climate protection targets are compatible with the Paris Climate Agreement and will contribute to meeting the targets set out in that agreement. This makes MVV the first German energy company to be certified by SBTi as compatible with the 1.5 degree trajectory.
With its Mannheim Model, MVV aims to make its contribution towards mastering the global challenge of achieving climate neutrality. To this end, MVV is building on three aspects: the heat turnaround, the electricity turnaround and green products and solutions for its customers. MVV will therefore become climate neutral by 2040 and climate positive from then on. This means that the company will remove greenhouse gases from the atmosphere again, and thus become one of the first climate-positive energy companies in Germany. To this end, MVV will be further developing its energy from waste and biomass plants and turning them into CO2 sinks.
“The heat turnaround is possibly the most important key to the overall energy turnaround”, explained the CEO. By 2030, MVV will therefore be fully converting its district heating supply in Mannheim and the Rhine-Neckar metropolitan region to climate-friendly energy sources. “From 100 percent fossil-based to 100 percent green”, added Dr. Müller. And MVV is also pressing ahead with the electricity turnaround by accelerating its expansion of renewable energies. Moreover, MVV is supporting its customers, from private households and commercial customers up to large economic and industrial players, as they themselves head for climate neutrality.
“Our Mannheim Model has the potential to become exemplary for many towns and local authorities in Germany and across Europe”, remarked the CEO.
Climate neutrality needs all involved to make a common effort
MVV was basically positive in its assessment of the climate chapters in the coalition agreement: this contained many good ideas, a few wrong approaches and some aspects left uncovered. Dr. Müller nevertheless appealed to the new Federal Government to focus above all on actual implementation and therefore “immediately tackle those factors that are still holding us back”. It was certainly right to accelerate the pace of transformation: Rather than setting new targets, however, what really counted now was streamlining processes, making subsidy instruments available and aligning the regulatory framework to the transformation. “This Federal Government will only succeed here if it also manages to solve the problems closer to the ground.” It was regrettable that the new Federal Government had not sufficiently recognised the role played by district heating in the rapid and inexpensive decarbonisation of densely populated areas, added Dr. Müller. When it came to the coal exit, modern hard coal-fired CHP plants should not be placed at a disadvantage compared with lignite plants. MVV also viewed the call for more natural gas-fired power plants as too generalised. The company was deliberately foregoing transitional solutions, such as building new natural gas-fired plants, and thus skipping the fossil-based gas stage for Mannheim’s district heating.
“The enormous task of achieving climate neutrality can only be mastered if all involved join forces and make a common effort. We will be tackling the challenge of protecting the climate with consistent action and stepping up the pace for the energy turnaround”, concluded Dr. Müller.
The complete Annual Report 2021 is available on the internet at www.mvv.de/investors. Here, you will also find our new MVV Magazine 2021, in which we show how, with the Mannheim Model, we are charting course for a climate-positive future.
MVV in Figures
|Financial key figures||FY 2021||FY 2020||% change|
|Sales and earnings|
|Adjusted sales excluding energy taxes (Euro million)||4,131||3,515||+ 18|
|Adjusted EBITDA1 (Euro million)||482||449||+ 7|
|Adjusted EBIT1 (Euro million)||278||233||+ 19|
|Adjusted annual net income1 (Euro million)||177||128||+ 38|
|Adjusted annual net income after minority interests1 (Euro million)||150||104||+ 44|
|Adjusted total assets at 30 September2 (Euro million)||5,815||4,582||+ 27|
|Adjusted total assets excluding margins at 30 September2, 3 (Euro million)||4,994||4,582||+ 9|
|Adjusted equity at 30 September2 (Euro million)||1,662||1,571||+ 6|
|Adjusted equity ratio at 30 September2 (%)||28.6||34.3||- 17|
|Adjusted equity ratio excluding margins at 30 September2, 3 (%)||33.3||34.3||- 3|
|Net financial debt at 30 September (Euro million)||628||1.374||- 54|
|Net financial debt excluding margins at 30 September3 Euro million)||1,450||1,352||+ 7|
|Cash flow and investments|
|Cash flow from operating activities (Euro milliono)||1,203||383||>+ 100|
|Cash flow from operating activities excluding margins3 (Euro million)||360||391||- 8|
|Investments (Mio Euro)||306||322||- 5|
|ROCE (%)||10.2||7.7||+ 32|
|ROCE excluding margins3 (%)||8.9||7.8||+ 14|
|WACC (%)||5.9||6.0||- 2|
|Value Spread (%)||4.3||1.7||>+ 100|
|Value Spread excluding margins3 (%)||3.0||1.8||+ 67|
|Capital Employed (Euro million)||2,715||3,018||- 10|
|Capital Employed excluding margins3 (Euro million)||3,115||3,001||+ 4|
|Dividend per share4 (Euro)||1.05||0.95||+ 11|
|Adjusted earnings per share1 (Euro)||2.28||1.57||+ 45|
|Non-financial key figures|
|Direct CO2 emissions (Scope 1)5 (tonnes 000s)||3,440||3,315||+ 4|
|Indirect CO2 emissions (Scopes 2 and 3)5,6 (tonnes 000s)||5,432||4,586||+ 18|
|Net CO2 savings5 (tonnes 000s)||1,002||766||+ 31|
|Electricity generation capacity from renewable energies5 (kWh million)||564||531||+ 6|
|Renewable energies as share of proprietary electricity generation5 (%)||32||34||- 6|
|Electricity generation volumes from renewable energies5,6 (kWh million)||1,217||1,274||- 4|
|Green heat generation capacity5 (MWt)||793||752||+ 5|
|Green heat as share of proprietary heat generation5, 6, 7 (%)||36||31||+ 16|
|Green heat generation volumes5, 6, 7 (kWh million)||2,541||1,990||+ 28|
|Completed development of new renewable energies plants (MWe)||610||262||>+100|
|Operations management for renewable energies plants (MWel)||3,811||3,729||+ 2|
|Number of employees at 30 September (headcount)||6,470||6,260||+ 3|
|of which women||1,825||1,760||+ 4|
|of which men||4,645||4,500||+ 3|
|of which full-time employees||5,513||5,324||+ 4|
|of which part-time employees||957||936||+ 2|
|Number of trainees at 30 September (headcount)||340||341||0|
|Share of female managers at 30 September (%)||14||15||- 7|
|Accident frequency rate (LTIF)8 (number of accidents per 1,000,000 hours of work)||4.1||6.7||- 39|
1 Excluding non-operating measurement items for financial derivatives, excluding structural adjustment for part-time early retirement and including interest income from finance leases
2 Excluding non-operating measurement items for financial derivatives
3 Excluding collateral deposited at MVV for counterparty default risks (margins)
4 Subject to approval by Annual General Meeting on 11 March 2022
5 Fully consolidated and at-equity companies
6 Previous year’s figure adjusted
7 Heat from biomass and biogas plants and from energy from waste/refuse-derived fuels (RDF)
8 Figures for 2020 and 2019 calendar years