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© Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007
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© Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

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Page 1: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

© Vattenfall AB

VattenfallQ3 Results 2007

Presentations by

Lars G. Josefsson, CEO and

Jan Erik Back, CFO

31 October 2007

Page 2: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

2Highlights – 9M results 2007

Net sales rose9.3% to SEK 105,310 million (96,374)

EBIT decreased 2.8% to SEK 21,225 million (21,827)

Profit after tax increased 28.4% to SEK 17,010 million (13,249) due to reduction of German corporate income tax

Net debt decreased by SEK 4,883 million to SEK 44,524 million compared with31 December 2006

Page 3: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

3Highlights – Q3 results 2007

Net sales rose12.9% to SEK 31,589 million (27,990)

EBIT increased 37.9% to SEK 4,557 million (3,304)

Profit after tax increased 88.3% to SEK 3,523 million (1,871) due to reduction of German corporate income tax

Page 4: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

4Highlights – Q3 results 2007

Net debt decreased by SEK 2,241 million to SEK 44,524 million vs 30 June 2007

Return on Net Assets was 15.7% LTM (FY 2006: 16.6%)

Return on Equity was 20.5% LTM (FY 2006: 19.1%)

Net Gearingwas 37% as of 30 Sept 2007 vs 46% as of 31 December 2006

LTM = Last twelve months

Page 5: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

5EBIT development

Quarterly figures, SEK million

Quarterly figures in SEK million, excluding items affecting comparability

Last 12 months figures in SEK million, excluding items affecting comparability

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,00022,00024,00026,00028,00030,000

HEW consolidated

Bewag consolidated

GZE consolidated

Danish assets consolidated

Page 6: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

6

10.5

7.70.4

18.7

Increased fossil and hydro power generation

41 %

10.6

16.8

0.46.7 Hydro

NuclearFossilOther

Heat: Q3 2007 total: 3.8 TWh Heat Q3 2006 total: 3.0 TWh

Electricity:Q3 2006 total: 34.5 TWh

Electricity:Q3 2007 total: 37.3 TWh

Other=wind, biofuel, waste

0.9

1.8

1.2

1.2

0.7

1.1

Nordic

Germany

Poland

Page 7: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

7Electricity spot price development

Monthly Spot Average

15

25

35

45

55

65

75

85

jan-05 apr-05 jul-05 okt-05 jan-06 apr-06 jul-06 okt-06 jan-07 apr-07 jul-07

NordPool (SYSEUR) EEX

As of 26 Oct

Page 8: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

8Nordic hydrological balance

Hydrological Balance and System Price 1996 - 2007

-50

-40

-30

-20

-10

0

10

20

30

40

0

100

200

300

400

500

600

700

800

900

1000

System Price

Hydrological Balance

SYSSEK/MWhTWh

1996 199919981997 2003200220012000 2004 2005 2006 2007

Source: Markedskraft and Nord Pool

Page 9: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

9Increasing electricity forward prices

Daliy Forward Closing Prices

20,00

25,00

30,00

35,00

40,00

45,00

50,00

55,00

60,00

65,00

jan-05 apr-05 jun-05 sep-05 dec-05 mar-06 jun-06 sep-06 dec-06 mar-07 jun-07 sep-07

ENOYR-08 EEXYR-08 ENOYR-09 EEXYR-09

EUR/MWh

Page 10: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

10Oil, coal, gas and CO2 allowances

0

20

40

60

80

100

120

140

0

10

20

30

40

50

60

70

80

Oil (USD/bbl), Brent Front Month Coal (USD/t), API#2, Front Year Emission allowances CO2 (EUR/t), 2008 Gas (EUR/MWh), NBP, Front Year

USD EUR

Page 11: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

11

EUR/tonne

CO2 allowances

0

5

10

15

20

25

30

35

jan-

06

apr-

06

jul-0

6

okt-

06

jan-

07

apr-

07

jul-0

7

okt-

07

2007

2008

Page 12: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

12Nuclear update – post outages on 28 June

• Damage at German nuclear plant Krümmel has been repaired, some work is still under way (e.g. installation of new transformer).

• However, following the events, deviant installations of some anchors were detected at Brunsbüttel and Krümmel. The evaluation of the findings is still in progress.

• Both plants will remain disconnected from the grid until all replacement work is finished, all questions are clarified and all relevant measures are taken.

• Q3 financial impact totals approximately EUR 60 million (SEK 555 million)

Krümmel (1,346 MW) Brunsbüttel (771 MW)

Page 13: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

13Increased retail customer churn in Germany

• Some 200,000 customers lost in Germany primarily due to:– mounting competition in the retail market and customers being increasingly

inclined to switch electricity suppliers– Vattenfall’s notice of price increases as of 1 July, which resulted in very negative

customer reactions – Inadequate information to the general public following the nuclear outages

• Losses should be viewed against the background of very high market shares (>80%, corresponding to nearly 2.9 million customers) in Berlin and Hamburg

Measures taken:• Improved product offers

– launched a very competitively priced internet product– expanded marketing activities throughout Germany, i.e. to areas outside our core

German markets in Berlin and Hamburg

• Launched a large-scale dialogue, inviting all customers as well as the general public to put questions to Vattenfall

• Establishment of a customer advisory council

Page 14: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

14We are growing our market shares in Sweden

• We have now exceeded one (1) million customers in the Nordic countries

• Our Swedish retail customer market share has grown from 13% to 15%.

• Customer satisfaction index has improved

• Vattenfall’s products are considered best in the market

Page 15: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

15Major ongoing investment projects

• Lillgrund – the world’s 3rd largest offshore wind power farm soon to be fully operationable (48 windmills, 110 MW)

• Schwarze Pumpe – the world’s first CCS oxyfuel pilot plant, to be commissioned in August 2008. Agreement on CO2 storage is now in place.

• Boxberg – 675 MW lignite power plant under construction

• Moorburg – 1,640 MW CHP plant still pending final approval from the City of Hamburg

• Reopening of the Reichwalde lignite mine in Germany

• Extensive transmission grid investments in Germany

• Several renewable energy projects in Germany and Sweden

Page 16: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

16EU’s 3rd Energy package launched 19 September

• This offers a unique opportunity to further improve the market’s function and to speed up market development through integration of national markets into regional markets and finally the Internal Market for Energy

• We believe that an integrated energy market is a prerequisite for the competitiveness of Europe

• We believe having Regional System Operators (RIO) is the best way to achieve integration

• We are positive to creating an Agency for Cooperation of National Energy Regulators

• We support the proposed new Network for Transmission System Operators (ENTSO)

• We believe, however, that additional measures are needed to reach the target

Vattenfall’s response:

Page 17: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

17Vision and growth strategy remains firm

• Vattenfall’s vision is to be a leading European energy company

• Within our “growth ambition” we will

– Continue to be an integrated company and focus on generation of electricity and heat

– Expand in core and geographically close markets where value can be created

– Use both M&A and greenfield investments as tools for growth

• More focus on renewables, CCS, nuclear and CHP

• Increased focus on our “benchmark ambition” and operational performance

Page 18: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

© Vattenfall AB

Financials

Jan Erik Back, CFO

Page 19: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

19

Amounts in MSEK Q3 2007 Q3 2006 Change FY2006 LTMIFRS IFRS %

Consolidated income statement

* IAC = items affecting comparability

Net sales 31,589 27,990 12.9 135,802 144,738

Cost of products sold 24,335 21,956 10.8 96,844 105,575

Gross profit 7,254 6,034 20.2 38,958 39,163

Operating profit (EBIT) 4,557 3,304 37.9 27,049 26,447

Operating profit, excl. IAC* 4,542 3.286 38.2 26,676 26,373

Financial income 472 841 -43.9 3,839 3,623

Financial expenses -1,515 -1,184 28.0 -5,363 -5,758

Financial net -1.043 -343 -204.1 -1,524 -2,135

Profit before taxes 3,514 2,961 18.7 25,525 24,312

Taxes 9 -1,090 -5,667 -693

Profit for the period 3,523 1,871 88.3 19,858 23,619

Page 20: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

20Cash flow development

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

-99 2000 2001 2002 2003 2004 2005 2006 2007

Free cash flow fromoperations - Rolling 4quarter (1)

Cash flow beforefinancing activities -Rolling 4 quarter

(1) Cash Flow from operating activities minus reinvestments

1) Figures according to Sw GAAP until Q4 2004.

2) Figures according to IFRS from Q1 2005.

MSEK

Page 21: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

21Return on equity

0%

5%

10%

15%

20%

25%

30%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Rolling 4-quarterIFRS excl IAC

Rolling 4-quarter SwGAAP excl IAC

Average 4-years (16quarter) Sw. GAAP.IFRS from Q42004. Excl. IACRequirement 15%

Page 22: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

22Financial targets and outcome

Q3 2007

Single A category ratingCredit Rating

3.5 – 4.5 times

Cash flow interest coverage after maintenance investments

11 % before tax (= 15 % RoE recalculated into the Groups RoNA requirement)

Return on Net Assets(RoNA, excl. IAC)

Return on Equity (RoE)

TargetsKey Ratio

15 % on average equity 20.5%1

15.7%*

7.0*

A2/A-

Stable outlook

1) Q3 2007 figure = LTM

40-60 %Dividend pay-out 40 %2

2) Paid in May 2007

Page 23: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

23EBIT Q3 2007 vs Q3 2006

3 304

4 557

942

619

356

60

648

540

0

1 000

2 000

3 000

4 000

5 000

6 000

Q3 2006 Price Volume O&M Sales and

admin

Write-downs Other Q3 2007

Millions of SEK

Page 24: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

24EBIT 9M 2007 vs 9M 2006

21 827 21 225

2 192

1 289

308 835

3 697

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

22 000

24 000

26 000

28 000

Q1-Q3 2006 Price Volume O&M Sales andadmin

Depreciations Other Q1-Q3 2007

Millions of SEK

Page 25: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

25

3 304

4 557

896

338 552

68 212

-191122

0

1 000

2 000

3 000

4 000

5 000

Q3 2006 Generation Heat Networks Markets Other Q3 2007

Millions of SEK

VTSSales

EBIT Q3 2007 vs Q3 2006 – secondary segments

VTS= Vattenfall Trading Services

Page 26: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

26EBIT 9M 2007 vs 9M 2006 – secondary segments

21 827 21 225

2 651

1 383 1 279457 134

-1 214

756

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

22 000

24 000

26 000

Q1-Q3 2006 Generation Heat Networks Markets Other Q1-Q3 2007

Millions of SEK

Sales

VTS

VTS= Vattenfall Trading Services

Page 27: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

27Hedging position as of 30 September 2007

% hedged of planned electricity generation (percentage values are rounded)

Nordic

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

remaining 2007 2008 2009

Germany & Poland

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

remaining 2007 2008 2009

Page 28: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

28Highlights Q3 2007 - Nordic

• EBIT almost flat compared with Q3 2006

• Sharp decline in Nordic spot prices mitigated by hedging.

• Higher electricity generation due to increased hydro and nuclear power.

• Lower results in Distribution due to a provision of approx. SEK 100 million for restructuring measures.

• Lower results in Heat due to an impairment loss of SEK 195 million of a CHP plant in Finland.

• The Lillgrund windpower farm has started to generate electricity. When fully operational it will be the largest windpower farm in Sweden and the third largest offshore farm in the world.

Page 29: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

29Key data – BG Nordic

* Excl. intra group transactions** Excl. items affecting comparability (IAC)*** At the end of the period**** Full time equivalents (FTE)LTM = last twelve months

Q3 Q3 % FY FY Amounts in SEK billion 2007 2006 Change LTM 2006 2005

Net sales 9.2 7.4 +23.7 45.8 40.1 42.0External net sales * 8.6 10.4 -17.6 43.6 48.2 40.7EBIT ** 1.5 1.6 -2.2 11.8 13.2 13.7

Net assets *** 87.0 81.8 + 6.4 n.a. 81.7 77.2

Electr. generation, TWh 18.9 16.4 +15.2 90.8 84.9 89.8Heat generation, TWh 1.2 1.1 +9.1 10.8 8.5 7.3

Employees **** 9 540 9 477 +0.7 n.a. 9 158 8 788

Page 30: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

30Highlights Q3 2007 - Germany

• Significantly higher EBIT, + SEK1,279 million to SEK 3,173 million (+67,5%). (+ 71.2% excl. IAC).

• Main part of EBIT improvement pertains to an impairment loss of SEK 931 million in Q3 2006 in business unit Distribution.

• Mining & Generation increased its result despite unplanned nuclear outages thanks to higher fossil power and successful hedging.

• NAP2 - Total national emissions cut to 453 million tonnes per year (NAP1 was 499 million tonnes). Vattenfall estimates a yearly deficit of approx. 28-33 million tonnes. Estimated cost (after tax) totals EUR 400-500 million

• Continued pressure from the Regulator (BNetzA) on transmission tariffs

• Lowered German corporate income tax by approx. 10 percentage points. The impact on profit after tax is 950 MSEK for Q3 and 2,850 for 9M 2007

Page 31: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

31Key data – BG Germany

* Excl. intra group transactions** Excl. items affecting comparability (IAC)*** At the end of the period**** Full time equivalents (FTE)LTM = last twelve months

Q3 Q3 % FY FY Amounts in SEK billion 2007 2006 Change LTM 2006 2005

Net sales 26.0 22.0 +18.1 111.2 101.5 105.0External net sales * 17.9 15.2 +18.1 76.8 69.9 70.3EBIT ** 3.2 1.9 +71.2 13.7 12.9 10.3

Net assets *** 67.3 62.4 +7.9 n.a. 61.8 68.7

Electr. generation, TWh 17.7 17.7 - 73.2 76.2 75.9Heat generation, TWh 1.8 1.2 +50.0 13.6 15.5 15.4

Employees **** 19 742 20 025 -1.4 n.a. 19 821 20 096

Page 32: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

32Highlights Q3 2007 - Poland

• EBIT decreased by 37% from SEK 125 million to SEK 79 million (-50.4% excl IAC).

• EBIT reduction pertains mainly to Distribution due lower volumes and squeezed margins.

• Business unit Heat reports a marginally lower operating profit.

• Business unit Sales reports a slightly better result.

Page 33: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

33Key data – BG Poland

Q3 Q3 % FY FY Amounts in SEK billion 2007 2006 Change LTM 2006 2005

Net sales 1.9 1.9 +3.1 9.6 9.4 8.8External net sales * 1.9 1.8 +5.9 9.1 9.0 8.8EBIT ** 0.1 0.1 -50.4 0.8 0.9 0.8

Net assets *** 10.0 8.3 +20.3 n.a. 8.8 9.3

Electr. generation, TWh 0.6 0.3 +100.0 3.5 3.3 3.4Heat generation, TWh 0.9 0.7 +28.6 10.0 11.2 11.4

Employees **** 2 736 2 824 -3.1 n.a. 2 836 3 029

* Excl. intra group transactions** Excl. items affecting comparability (IAC)*** At the end of the period**** Full time equivalents (FTE)LTM = last twelve months

Page 34: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

34

Amounts in MSEK 30/9/07 30/9/06 Change 31/12/06 IFRS IFRS %

Consolidated balance sheet

Non-current assets 257,489 266,242 -3.3 251,893

Current assets 67,127 61,543 9.1 71,273

Total assets 324,616 327,785 -1.0 323,166

Equity 119,679 94,118 27.2 107,674

Interest-bearing liabilitites 66,341 72,222 -8.1 71,575

Interest-bearing provisions 52,280 48,412 8.0 49,217

Pension provisions 17,424 17,345 0.5 16,877

Deferred tax liabilities 25,403 40,104 -36.7 29,875

Other non-interest-bearing liabilitites 43,489 55,584 -21.8 47,948

Total equity and liabilities 324,616 327,785 -1.0 323,166

Page 35: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

35Net debt development

SEK million

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Capital Securities SEK 9.1 billion

Acquisition of Elsam shares

Acquisition of Bewag and GZE shares

Dividend paid

Page 36: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

36

Questions & Answers

Page 37: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

© Vattenfall AB

Backup slides

Page 38: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

38

Amounts in MSEK 9M 2007 9M 2006 Change IFRS IFRS %

Consolidated income statement

* IAC = items affecting comparability

Net sales 105,310 96,374 9.3

Cost of products sold 75,911 67,180 13.0

Gross profit 29,399 29,194 0.7

Operating profit (EBIT) 21,225 21,827 -2.8

Operating profit, excl. IAC* 21,115 21,418 -1.4

Financial income 2,103 2,319 -9.3

Financial expenses -4,095 -3,700 10.7

Financial net -1,992 -1,381 -44.2

Profit before taxes 19,233 20,446 -5.9

Taxes -2,223 -7,197 -69.1

Profit for the period 17,010 13,249 28.4

Page 39: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

39

Amounts in MSEK Q3 2007 Q3 2006 Change FY 2006 LTMIFRS IFRS %

Funds from operations (FFO) 6,002 5,625 6.7 35,673 32,667Change in working capital 261 1,769 -85.2 -466 1,290Cash Flow from operating activities 6,263 7,394 -15.3 35,207 33,957Investments -4,310 -4,749 -9.2 -16,534 -18,327Divestments 239 289 -17.3 1,720 935Cash and cash equivalents in aquired/divested companies 2 39 -94.9 -686 10Cash Flow from investing activities -4,069 -5,107 -20.3 -15,647 -17,382Cash Flow before financing activities 2,194 2,287 -4.1 19,560 16,575Cash Flow from financing activities -8,259 -634 -10,742 -18,870Cash Flow for the period -6,065 1,653 8,818 -2,295Net debt at the end of the period -44,524 -55,380 -19.6 -49,407 -44,524

Consolidated cash flow statement

Page 40: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

40Key ratios

Key Ratios (% unless otherwise stated) Q3 2007 Q3 2006 LTM

RoNA (1) 15.7 15.7

RoE (1) 20.5 20.5

Operating margin 14.4 11.8 18.3

Pre-tax profit margin 11.1 10.6 16.8

Cash Flow interest coverage aftermaintenance investments, times 4.7 6.9 7.0

FFO/net debt (1) 69.0 69.0

Equity/assets ratio 36.9 28.7 36.9

Net Gearing - Net debt/equity, times 0.37 0.59 0.37

Capitalisation - Net debt/net debt + equity 27.1 37.0 27.1

1) Q3 2007 value = LTM

Page 41: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

41Net asset development

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

MSEK

Acquisition of Elsam shares

Acquisition of Bewag and GZE shares

Consolidation of Danish

assets

Page 42: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

42

Amounts in SEK million

As of Sep 30, 2007 Treasury Germany Poland NordicTotal %

Cash and bank 968 1,034 467 5943,063 14

Interest-bearing investments 4,683 5,419 63 31610,481 48

Special Funds 2,578 2,578 12

Brunsbüttel 5,335 5,673 26

Shares 22 22

Total 5,651 14,389 531 90921,480 100

Undrawn committed credit facilities amount to 9,577 SEK million and other undrawn credit- and overdraft facilities amount to 10,859 SEK million.

Break down of group liquidity

Page 43: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

43

Amounts in SEK million

As of Sep 30, 2007 Treasury Germany Poland Nordic Total %

Subordinated perpetual Capital Securities 9,082 9,082 14

MTN 839 839 1

EMTN 30,526 30,526 46

Liabilities to assoc. companies 6,909 4,261 11,170 17

Liabilities to minority shareholders 49 5,132 5,181 8

Bank loans and others 559 6,433 142 2,410 9,544 14

Total 47,915 10,743 142 7,542 66,341 100

Break down of group debt

Page 44: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

44Vattenfall debt maturity profile

Sep 30, 2007 Sep 30, 2006

Duration (years) 3,7 1) 3,7

Average time to maturity (years) 6,5 1) 6,1

Net debt (SEK bn) 44,5 55,4

SEK million

Excluding loans from associated companies and minority owners

1) Based on external debt. Excluding Capital Securities the duration is 3,1 years and average time to maturity 6,3 years.

0

2000

4000

6000

8000

10000

12000

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036

2006 09 30

2007 09 30

Page 45: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

45Adjusted Gross & Net debt

SEK million 30 Sept 2007 30 June 2007 30 Dec 2006

Reported gross debt (IFRS) 66 341 67 996 71 575 + PV of net pension obligations (incl actuarial gains/losses) 20 320 20 208 19 670 + Mining & environmental provisions 11 308 11 297 10 295 - 50% of Hybrid securities -4 541 -4 555 -4 455 = Adjusted gross debt 93 428 94 946 97 085

Reported cash & short term investments 21 480 20 849 22 168 - German nuclear "Solidarvereinbarung" -3 136 -3 147 -3 076 - Minority owner's share of German nuclear cash position -3 499 -3 540 -3 594 = Adjusted cash & short term investments 14 845 14 162 15 498

Adjusted gross debt 93 428 94 946 97 085 - Adjusted cash & short term investments -14 845 -14 162 -15 498 = Adjusted net debt 78 583 80 784 81 587Reported net debt 44 524 46 765 49 407

Page 46: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

46Development of adjusted net debt

-81,6

23,9

-11,6-7,6

-0,7 -1,0

-0,1

-78,6

Adjusted netdebt Dec 31,

2006

Cash flow fromoperatingactivities

Cash flow frominvestingactivities

Dividend paid Pensionprovisions and

similarcommittments

Miningprovisions and

otherenvironmentalundertakings

Others Adjusted netdebt Sept 30,

2007

SEK billion

Page 47: © Vattenfall AB Vattenfall Q3 Results 2007 Presentations by Lars G. Josefsson, CEO and Jan Erik Back, CFO 31 October 2007.

31 Oct 2007© Vattenfall AB

47

17345

26447

9756

40104

2234

4464 551117424

28140

11308

25403

1476

43547002

Pensions

Nuclear

Mining

Taxes

Other

Personnel

Legal

Group provisions down by 10.2%

30 Sept 2007

SEK 95,107 million

30 Sept 2006

SEK 105,861 million