EnBW International Finance B.V.

EnBW International Finance B.V.

Report on the interim financial

statements for the period

1 January - 30 June 2021

EnBW International Finance B.V.

Contents

Interim Report

Report of the Board of Management

3

Statement of financial position as at 30 June 2021

9

Statement of income for the period 1 January - 30 June 2021

10

Statement of cash flows for the period 1 January - 30 June 2021

11

Statement of changes in equity for the period 1 January - 30 June 2021

12

Notes

13

Other information

48

EnBW International Finance B.V.

Report of the Board of Management

The Directors of EnBW International Finance B.V. herewith submit its financial report for the period from 1 January to 30 June 2021.

General

EnBW International Finance B.V. (hereinafter 'the Company') is a company domiciled in the Netherlands. The Company has a controlling related party relationship with its parent company. The Company is a wholly owned subsidiary of EnBW Energie Baden-Württemberg AG (ultimate parent company, hereinafter 'EnBW AG') in Germany. EnBW AG is part of the EnBW Group.

The Company was founded by EnBW AG on 2 April 2001, under the Dutch law as a company with limited liability (besloten vennootschap met beperkte aansprakelijkheid). The Company has its registered office at Herikerbergweg 122, 1101 CM Amsterdam, The Netherlands.

Overview of objectives and activities

In accordance with Article 3 of its Articles of Association of the Company, the most important mission, objectives and activities of the Company are:

  • to incorporate, to participate in any way whatsoever, to manage, to supervise, to operate and to promote enterprises, businesses and companies;
  • to finance businesses and companies;
  • to borrow, to lend and to raise funds, including the issuance of bonds, convertible bonds, promissory notes or other securities or evidence of indebtedness as well as to enter into agreements in connection with the aforementioned.

The activities of the Company take place in the Netherlands.

Internal structure

The Company employs two staff members. The Board of Directors consists of two members, the Supervisory Board consists of three members, and the Audit Committee consists of three members including an independent chairman. The Board of Directors is responsible for the internal control and the management of risks within the Company.

Activities during the period

As from February 2021, the Company had restarted the Commercial Paper activity again and issued GBP 275 million in 6 short-term GBP notes. The notes had a maturity of 28 to 89 days and were all non-interest bearing. The proceeds that the Company received were all slightly below 100% of the nominal value. The amounts were all repaid in total during the period.

On 1 March 2021 the Company issued two senior bonds, both in the amount of EUR 500 million. The two bonds respectively have a maturity of 7 and 12 years and bear 0.125% fixed interest (7-year bond) and 0.5% fixed interest (12-year bond). The proceeds received amounted EUR 498,400,000 for the 7-year bond and EUR 496,200,000 for the 12-year bond.

A provision for expected credit losses was updated during the period as disclosed in the "financial assets" paragraph in the financial statement. No other impairments on loans or interest receivables were considered to be necessary.

3

EnBW International Finance B.V.

Result and other performance indicators

Period ended

Year ended

Period ended

30 June

31 December

30 June

2021

2020

2020

(EUR million)

(EUR million)

(EUR million)

Net result

9

18

(8)

Net interest result

5

20

14

Shareholder's equity

307

315

290

Free cash

0.2

0.2

5.70

Net working capital

308

22

15

Solvency (equity/ total assets)

6%

8%

8%

COVID-19 pandemic

During the early start of 2020, the COVID-19 pandemic became visible in Europe. The Board of Directors of the Company since then has taken measures to assure business continuation. Protection of employees has had the highest priority whereas the Board of Directors further assured that compliance tasks were still taken care of as well as the daily management and operation of the Company continued. For all meetings, such as Board Meetings, videoconferences were held.

In view of the fact that the larger part of receivables of the Company are loans to EnBW AG, the Board of Directors of the Company reviewed the measures taken by EnBW AG and its ongoing financial performance.

EnBW AG responded to the outbreak of the COVID-19 pandemic at an early stage, establishing a task force at the beginning of February 2020 that since then has remained in close dialogue with ministries and health authorities and has identified and implemented suitable countermeasures jointly with its Executive Board. EnBW AG is aware of its particular responsibility for ensuring constantly reliable electricity, water and gas supplies and waste disposal for all citizens. At all times so far, EnBW AG has reliably delivered its services without any restriction. EnBW AG will keep focussing to maintain delivering these services to the highest standards.

EnBW Group announced recognition of impairment on its powerplant portfolio in the total amount of EUR 1.25 Billion that will be recognised in its H1-2021 results. The recognition of the impairment is mainly due to reduced expectations for future cash flows, primarily in the conventional generation business due to expected increased climate change mitigation requirements. The impairment will impact H1 2021 results on a non-operating level, however, the adjusted EBITDA outlook for the financial year 2021 remained unchanged.

Principle risks and uncertainties

The principal risks and uncertainties that the Company faces are outlined below. The Company has exposure to the following risks:

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations which arises principally from the Company's receivables from customers and investment securities.

The Company's exposure to credit risk is influenced mainly by the individual characteristics of EnBW AG. The net proceeds from each issue of interest-bearing loans and borrowings by the Company only will be applied towards the purposes of on-lending to EnBW AG. The interest rates and other interest conditions on the interest-bearing loans and borrowings are equal to these on the loans to EnBW AG. EnBW AG has provided no securities, but has taken over the irrevocable and unconditional guarantee (towards different banks, dependable on the loan provided) for the benefit of all bondholders with respect to the prescribed and punctual payment of capital and interest of the bond notes issued by the Company.

4

EnBW International Finance B.V.

The total value of the loans to EnBW AG including accrued interest per 30 June 2021 amounted EUR 5.0 billion.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

There is only a small liquidity risk facing the equal terms of the non-current assets and the long-term debts. The repayment schedules can be found on pages 32 and 39.

EnBW AG has taken over the irrevocable and unconditional guarantee (towards banks that provided the loans) for the benefit of all bondholders with respect to the prescribed and punctual payment of capital and interest of the bond notes issued by the Company.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company has one loan outstanding to EnBW AG ("OPOLE") which is not on-lending loan from debts. This loan was financed by equity and will mature in March 2022. The fair value of this loan per 30 June 2021 amounted EUR 0.3 billion.

Concentration risk

Concentration risk is the risk that the concentration of loans is not diversified and concentrated in a certain geographic area. The loans are diverted in a variety of loans issued to EnBW AG in Germany. As all loans are in one geographic area (Germany), and as all loans are issued to the same borrower only, the Company has a significant exposure of concentration risk.

Interest rate risk

Interest rate risk is the risk that changes in interest rates will adversely impact the financial results of the Company. The interest rates and other interest conditions on the interest-bearing loans and borrowings are equal to these on the loans to EnBW AG, except for the loan granted 2012 which is funded by equity. This loan bears a fixed interest rate. Therefore, the Company is not significantly exposed to variability of cash flows due to market development in interest rates.

Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument denominated in foreign currency will fluctuate because of changes in exchange rates. The net proceeds from each issue of interest-bearing loans and borrowings by the Company only will be applied towards the purposes of on-lending to EnBW AG (for equal currency). Therefore, the Company is not exposed to currency risk on investments and borrowings that are denominated in a currency other than the functional currency of the Company.

The currencies in which these transactions primarily are denominated are Euro (EUR), Swiss Francs (CHF), Japanese yen (JPY), Pound Sterling (GBP) and US Dollar (USD).

5

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EnBW - Energie Baden-Württemberg AG published this content on 23 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 July 2021 10:07:29 UTC.