Report of the CEO

Kurt Bobst, CEO:

“Considering the challenging operating environment, 2011 was a positive year for Repower. In addition to a good operating result, we were able to make solid progress in developing our strategic projects.”

Good result in a difficult environment

In light of the difficult business year for the energy sector as a whole, Repower closed 2011 with a good result in terms of operating income and profit. The company successfully forged ahead with the implementation of its strategy.

The debt and economic crisis in the euro countries left its mark on the energy sector, resulting in less liquid markets and heightened uncertainty on stock markets from the middle of the year. The weak economic situation continued to dampen demand, with customers generally becoming increasingly price sensitive and reluctant to enter into longer-term contracts. The energy sector is also facing a persistently low price level.

Challenges successfully overcome

Margins were negatively impacted by the continued low exchange rate between the euro and the Swiss franc as a result of the fact that Repower earns three quarters of its revenue in euros. Thanks to active currency hedging, the additional negative effect on the financial result was limited to an amount in the low tens of millions. The economic situation was eclipsed by the political and social debate about the future energy supply. Even though Repower's own plants are not affected by Germany and Switzerland's decision to phase out nuclear power, rulings like these will profoundly affect the supply environment and the markets. Repower sees this transformation as an opportunity and aims to embrace the change with sustainable ideas and forward-looking projects. Against this background, Repower posted operating income (EBIT) of CHF 130 million in 2011, a good result for the sector. Profit amounted to CHF 54 million.