MVV: Shaping change

“With our broad portfolio of products and services, we again performed successfully in challenging conditions in the 2024 financial year”, affirmed Dr. Georg Müller, Chief Executive Officer of the energy company MVV Energie AG (ISIN: DE000A0H52F5; WKN: A0H52F), at this year’s Annual Results Press Conference, held at the Stock Exchange in Frankfurt am Main on Thursday.

At around Euro 7.2 billion, the company’s adjusted sales for the 2024 financial year (1 October 2023 – 30 September 2024) fell slightly short of the previous year’s figure (Euro 7.5 billion). Its sales performance was affected above all by falling wholesale prices for electricity and gas, a factor that was partly offset by higher electricity trading volumes.

“We achieved superb earnings, with adjusted EBIT of Euro 426 million. That is our second-best result since our IPO in 1999, i.e. in the past 25 years”, underlined Dr. Müller. He confirmed that earnings had fallen significantly short of the previous year’s adjusted EBIT (Euro 880 million), but added that the company had forecast this expectation from the outset. “The 2023 financial year was an exceptional year, one that was shaped by non-repeatable one-off effects, and here in particular the disposal gains generated from the sale of shareholdings and the extraordinary performance in the Commodity Services business field due to developments in wholesale prices. These factors led to substantial additional revenues that could not be replicated in the 2024 financial year.”

MVV also generated disposal gains in the year under report, in this case from the sale of shares held by MVV’s subsidiary Juwi in two Japanese joint ventures. These gains were nevertheless significantly smaller in scale than those in the past financial year. Excluding disposal gains, MVV’s adjusted EBIT amounted to Euro 416 million and thus reached the upper end of the most recently forecast range of Euro 390 million to Euro 420 million. Operating earnings benefited in particular from the MVV Group’s project development business. Earnings in the Generation and Infrastructure segment were positively influenced by a good level of plant availability and improved marketing results. In addition, MVV’s grid companies generated higher earnings.

Adjusted annual net income after minority interests amounted to Euro 233 million (previous year: Euro 513 million). Alongside the lower level of operating earnings, this key figure also reflected a year-on-year improvement in the financial result.

In view of the company’s earnings performance in the 2024 financial year, the Executive and Supervisory Boards will propose an increase in the regular dividend by Euro 0.10 per share to Euro 1.25 per share to the Annual General Meeting to be held on 14 March 2025. This means that MVV’s share will offer a dividend yield of 4.0 percent.

For the 2025 financial year, from an operating perspective MVV expects its adjusted EBIT to range between Euro 350 million and Euro 400 million. “Overall, we expect our broad-based business model to lend stability once again in the 2025 financial year”, remarked Dr. Müller.

Further increase in investments in energy system transformation

“Our goal of becoming #climatepositive by 2035 is and will remain the strategic compass guiding our transformation pathway, one which leads to an energy system that is climate friendly and fit for the future while also underpinning MVV’s long-term business success”, emphasised the CEO.

Extensive investments will be required if MVV is to maintain its head start in the energy transition in future as well. MVV has therefore further raised its pace of investment and invested a total of Euro 417 million in the 2024 financial year, more than Euro 70 million more than in the previous year (Euro 344 million). This represents the highest volume of investment since 2015, and the third-highest ever in a financial year at MVV. Explains Dr. Müller: “With the investments we are making in green growth, we are positioning ourselves as a company in a process of transformation that is impacting across our activities. We refer to this course as the Mannheim Model, in which we are making a reality of the heat and electricity transitions and offering green customer solutions throughout the company. We will further increase our investments in the years ahead and thus additionally strengthen our foundation for sustainable and profitable growth.”

Further milestones reached for the heat transition

With regard to the heat transition, MVV pressed ahead with or completed further projects once again in the 2024 financial year. “The heat transition is needed not only to protect the climate. We see this transformation in the heat supply as also being necessary for strategic reasons. As a company, we intend to and will operate with forward-looking generation methods, infrastructures, products and services. That requires us to act early to adapt and structure our approach as appropriate”, stressed the company’s CEO.

In this, MVV is continuing to implement its course towards climate-friendly heat by drawing on resources available locally. Back in 2020, the energy company already realised the first expansion stage for the heat transition in Mannheim by connecting the energy from waste plant to the district heat grid. By launching operations at its first river heat pump, the phosphorous recycling plant and the backup and peak load plants, as well as linking up its biomass CHP plant to the central district heat grid, MVV has now successfully completed the second expansion stage. This way, the energy company can cover around 60 percent of the annual peak load with green heat in Mannheim. By 2030, MVV will convert district heat generation for Mannheim and the region to 100-percent green energy sources. The same goal is to be achieved in Offenbach by 2030, with Kiel, and thus the whole of the Group, set to follow by 2035.

Alongside this, MVV is also drawing on decentralised solutions, and here in particular on heat pumps, to replace fossil fuel-powered household heat systems.

Tailwind for the electricity transition

In accelerating the electricity transition, MVV is focusing its investments on onshore wind power and photovoltaics. In the 2024 financial year, the company channelled almost Euro 120 million into building windfarms and solar parks and taking these over into its own portfolio.

By 2030, the energy company will increase its electricity generation capacity from renewable energies from 661 megawatts currently to around 2,000 megawatts. In the past five years, MVV has taken over a total of more than 100 megawatts of wind capacity and 65 megawatt of PV capacity into its portfolio. The latest examples are the 24-megawatt Olsberg-Mannstein Windpark in Hochsauerland District and the 8-megawatt Osterburken Solar Park in Neckar-Odenwald District, both of which built by MVV’s Juwi subsidiary.

To strengthen its electricity grids for the energy future, MVV is also making substantial investments in digitalising, maintaining, expanding and optimising its plants and grids. In terms of its overall distribution grids, MVV channelled more than Euro 150 million into their maintenance, renewal and expansion in the 2024 financial year.

System provider for green customer solutions

For MVV, shaping change also involves supplementing its range of services. By 2035, MVV intends to provide its customers exclusively with climate-neutral products and solutions. As a system provider for solution packages tailored to the needs of specific customer groups, MVV supports its customers in implementing their various individual transformation requirements.

MVV provides its retail customers with district heat and heat pump solutions, as well as with combined solutions comprising solar, charging and battery components in the electricity business. Our aim is to accompany and support customers as their energy partner throughout the lifetime of the respective facilities, also on behalf of industrial and SME customers. Here, MVV Enamic, MVV’s B2B subsidiary, is currently implementing a biomass plant for KOB, a manufacturer of medical textiles in Wolfstein (Rhineland-Palatinate), as part of a steam supply contracting agreement. This involves converting the steam generation from natural gas to biomass.

For local authorities, MVV is developing solutions and offerings consistent with its Mannheim Model and promoting the mobility transition by expanding the charging infrastructure in Mannheim and the Rhine-Neckar metropolitan region, as well as in Offenbach and Kiel. In Mannheim and the region alone, MVV has already launched operations with around 130 charging locations and approximately 350 public charging points, most recently at Mannheim’s Inland Port at the end of November. All of MVV’s charging points exclusively offer 100-percent green electricity. In the 2024 financial year, MVV channelled around Euro 6 million into building charging infrastructure in Mannheim and the region.

Driver of the transformation with #climatepositive course

MVV will cut its entire CO₂ footprint to net zero by 2035. Since 2018, the company has reduced its CO₂ emissions from energy generation by around 42 percent, and thus by more than the energy industry in Germany as a whole has achieved over the same period. “By the end of this decade, we will further substantially accelerate our CO₂ reduction by converting to green generation”, added Dr. Müller.

At the same time, MVV is pressing ahead with projects intended not only to offset its own unavoidable residual emissions but to achieve negative overall emissions, and thus make it #climatepositive by 2035. In this context, MVV has now initiated the development stage for a first industrial-scale CO₂ capturing facility at its biomass CHP plant in Mannheim. Here, the energy company can draw on the experience gained with operating its first #climatepositive plant in Dresden and the pilot CO₂ capturing and treatment plant in Mannheim.

“We are shapers of sustainable transformation. This is also underlined by the prestigious German Sustainability Prize that we were awarded just a few weeks ago in the Energy Generation and Trading category”, confirmed the CEO. The German Sustainability Prize singles out companies that show effective and exemplary contributions to the transformation and therefore act as examples for their sectors.

Thinking systematically to advance climate neutrality

Turning to the current debate on the tension between economic and ecological needs, Dr. Müller called for “politicians to emphasise the commonalities of forward-looking energy policy and forward-looking economic policy and closely dovetail these two areas. This way, we achieve both objectives: meet our climate targets and boost Germany’s competitiveness.” From the CEO’s perspective, in the 2024 financial year these commonalities included the update to the electricity market design on European level, the EU’s gas single market directive and the improvement in investment conditions for renewable energies, for example in the “Solar Package”. “In 2025, these measures will now have to be followed up in particular with the legal framework and specific measures to accelerate geothermal energy, the smart meter rollout, the Carbon Management Strategy, as well as hydrogen core grid links and power plant safeguarding. The heat transition will then gain the necessary momentum. Not only that: The process of scaling up the technology for CO₂ capturing, transport and storage can begin”, appealed the CEO. “We have to systematically expand the way we think about the various elements of the energy transition and avoid piecemeal solutions. This way, politicians can promote climate neutrality in a targeted manner that strengthens Germany as a place to do business.”

The complete Annual Report is available on the internet at mvv.de/investors.