108th Atel Annual General Meeting

Shareholders at the 108th Annual General Meeting of Aare-Tessin Ltd. for Electricity (Atel) in Olten could look back on a successful fiscal 2002. The 495 shareholders present (representing 96.54 % of the voting shares) approved the annual accounts and the payment of a dividend of CHF 20 per share.

Dr. Walter Bürgi, Chairman of the Board of Directors, reviewed the year 2002 in terms of values. In recent months, he explained, society as a whole had seen the destruction of a number of values. If business was to recover, it was now essential to create new values through innovation and investment. "Atel has held its own in these difficult times", he said. And in the last year, through substantial investment and the commitment of all its employees, Atel had laid several foundation stones on which new value would be created.

Success in Europe's energy markets In the last year Atel developed into an even more international corporate group. Some 80% of sales are now achieved abroad. The outstanding events of 2002 were major investments in production facilities in Italy, Hungary and the Czech Republic. The acquisition last year of a holding in Edipower, Italy's second-largest power generator, and of modern power stations in Budapest and Kladno, more than doubled Atel's total generating capacity - from 1540 MW to 3500 MW - at a stroke.

Atel's principal markets are Italy, Switzerland and Central and Eastern Europe. In all three regions Atel now has its own power stations, a strong trading position and established regional marketing. This extended value-added chain has created the basis for further growth. "Our strategy," said Bürgi, "has always been based on the belief that successful energy trading with no production of one's own is either not possible or too risky." The strategy of combining production, trading and sales was now beginning to bear fruit. Prevailing circumstances in the Energy Services segment, Atel's second strategic mainstay, were difficult last year. Even so, Walter Bürgi summarised, Atel had ended the year with good results. In a market with tight margins, heavily dependent on economic activity, that could not be taken for granted.

Energy policy facing a new challenge There had been no change in Atel's attitude to the deregulation of the electricity market following the referendum on the Electricity Market Bill (EMB). "We want to see the energy market opened up all the way to the socket on the wall", said Bürgi. While work on an EMB II is under way at the administrative and expert levels, the Swiss electorate will be making a crucial decision for the future of energy on 18 May 2003. Walter Bürgi made it clear beyond any possibility of misunderstanding that accepting the initiatives calling for the use of nuclear power to be abandoned would have considerable negative effects on the Swiss national economy. "At a time that is already difficult in economic terms, acceptance would unnecessarily destroy yet more value", said Bürgi.

2002 group sales up to CHF 3.7 billion "Last year we achieved our objectives, even exceeding some of them" - is how CEO Alessandro Sala summarised his review of the last fiscal year. Group sales rose 2.2% to CHF 3.7 billion, while earnings before interest and tax (EBIT) grew by 14.9% to CHF 255 million. Group profits increased by 3.0% to CHF 170 million. At CHF 490 million, cash flow was 9.3% down on the previous year's figure - but that had been affected by a number of extraordinary factors.

Alessandro Sala's watchword for 2003 was consolidation. After several years' growth, Atel's task was now to stabilise what had already been achieved. Sala summarised the encouraging outlook thus: "We expect double-digit percentage growth in group sales and profits in 2003." But one of the things that would make this possible, the Atel CEO added, was the fact that the newly-acquired companies would be included in group accounts for the first time.

Aare-Tessin Ltd. for Electricity Corporate Communications