Stadtwerke München
Annual Report 2023

The pulse of Munich

Group in figuresin EUR million

2019

2020

2021

2022

2023

Key operating figures1)

10,711.2

7,483.4

8,296.5

10,629.4

9,672.2

Electricity

2,811.7

2,859.1

2,940.2

3,885.7

3,718.2

Gas

Revenues

6,225.1

3,021.6

3,724.5

4,787.4

3,727.6

District Heating

396.5

351.2

391.1

653.5

786.8

Water

169.5

172.4

174.7

171.0

168.9

Public Transport

563.2

438.8

381.1

429.9

548.8

Public Pools

20.1

9.3

7.0

14.7

18.4

Telecommunications

259.4

271.4

273.2

266.9

271.4

Other

265.8

359.6

404.7

420.2

432.1

Consolidated net income
for the year

116.1

–152.0

99.4

281.7

655.9

EBIT

458.6

414.4

260.3

455.4

239.5

EBITDA

928.0

905.2

789.1

1,054.9815.2

Structure of assets and capital
8,801.7

8,599.7

9,438.6

9,130.7

9,201.0

Current assets

Fixed assets
2)

2,379.2

2,163.4

2,828.0

4,229.4

3,636.4

Shareholders’ equity

3)

5,865.1

5,714.2

5,932.4

6,190.4

6,811.9

Debt and liabilities

3)

5,315.8

5,048.8

6,334.2

7,169.7

6,025.5

Non-operating financial assets

4)

1,893.6

1,813.9

1,970.6

1,726.6

1,611.6

Bank borrowings

2,112.8

2,041.8

1,750.4

1,741.1

1,491.7

Total assets

11,180.9

10,763.0

12,266.6

13,360.1

12,837.4

360.3

949.9

1,167.1

216.5

824.4

Cash flow/capital expenditure/
depreciation and amortisation
Cash flow from operating activities
Quick ratio

5)

Capital expenditure on property,
plant, and equipment (PPE)
Equity investments

221 %

196 %

120 %

178 %

162 %

751.4

1,086.8

879.3

739.8

731.8

6)

86.1

71.6

71.4

13.3

18.7

7)

9,444

10,004

10,418

10,647

10,851

Employees
Employees
Key ratios
ROS

8)

2.9 %

–0.6 %

2.8 %

5.0 %

8.5 %

Equity ratio

3)

52 %

53 %

48 %

46 %

53 %

9)

150 %

228 %

168 %

124 %

129 %

Reinvestment rate (tangible andintangible fixed assets)
1)
2)
3)
4)
5)
6)

7)
8)
9)

Revenues, excl. electricity and energy tax
Including deferred tax assets, prepayments and accrued income, and excess of plan assets over pension liabilities
Including pro-rata investment grants, pro-rata income grants, and pro-rata construction cost grants
Securities held as fixed and current assets, incl. cash and cash equivalents(Current assets (see 3) less inventories) / current liabilities
Investments in affiliated companies and equity participations, excluding loans to companies in which participating interests are held and inaffiliated companies
Average number of employees in the fully consolidated companies (excluding trainees, temporary employees, and seasonal workers)
Result from ordinary operations / revenues
Ratio of capital expenditure on PPE and investments in intangible assets to scheduled depreciation and amortisation

Note: Rounding differences may occur in percentages and figures.

Contents
02–03
Letter from the Management Board

04–23
Our Strategy

24 – 80
Financial Report
25Group Management Report

43

Consolidated Financial Statements

48

Notes

77

Independent Auditor’s Report

80

Report of the Supervisory Board

2

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Letter from the Management Board

Munich, April 2024

Dear SWM customers, employees,
and business partners,

Following the exceptional developments witnessed in 2022, the energy supply in Germany
once again stabilised in 2023. Lower demand for natural gas – due to a mild winter, decreasing­­consumption in industry, and more energy-efficient behaviour on the part of residential­customers – was accompanied by a stable supply situation and expanded liquefied natural gas(LNG) capacities. In the course of the year, consumers were able to benefit from falling market
prices for electricity and gas.
We at SWM also used the leeway emerging in the course of 2023 to reduce prices for our­customers. Taking a critical look at ourselves, we must, however, note that we were not able tobring down prices as early as some of the other suppliers in the market, which meant that werecorded a loss of customers. The implementation of the complex energy price caps also hada negative impact on our customers’ satisfaction. As market leader in Munich, we cannot besatisfied with these developments. We members of the Management Board and the employeesof SWM are putting a lot of effort into making our prices and services attractive and ensuring that
our customers also see their attractiveness. A positive bottom line – net income after tax – gives
us the requisite room for manoeuvre.
In the 2023 financial year, we made a wide variety of investments, which helped us take afurther step in the direction of Munich’s climate neutrality. From 2025 onwards, we plan togenerate sufficient green electricity in our own plants to cover all of Munich’s consumption. We
are c­ onsistently continuing our renewable energies expansion and are confident that we willreach this goal as scheduled. Our plans for an environmentally benign heating supply envisage
CO2-neutral coverage of Munich’s district heating requirements by 2040. Geothermal energy willplay a decisive role here. In 2023, we laid the groundwork for the construction of our seventh
geothermal plant: we will build the largest inner-city geothermal plant in Continental Europe
on the grounds housing the Michaelibad public pool. Our district heating supply is a key pillar of
the municipal heating planning of the City of Munich. According to these plans, approximately
60 % of Munich’s heating demand is to be covered by district heating by 2045. In areas where
we cannot offer district heating, we intend to realise various decentralised solutions such as local
heating systems and heat pumps.
As part of our company’s decarbonisation, we are driving forward a further strengthening of
local public transport. With the conversion of our bus fleet to battery-electric drives, we want toachieve 100 % electromobility in local public transport. In 2023, we also made progress in thisrespect and acquired more electric buses. To encourage as many people as possible to use theclimate-friendly local public transport system, we are implementing numerous maintenance andmodernisation measures to ensure that our offerings remain attractive and highly efficient. Evenin the challenging situation currently faced by the local public transport sector, we will expand
our offerings for passengers in line with their requirements, especially in areas where new neighbourhoods are being developed or existing capacities are reaching their limits.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Letter from the Management Board

From left to right:
Helge-Uve Braun, Dr Karin Thelen, Dr Florian Bieberbach, Dr Gabriele Jahn, Ingo Wortmann

To pool our regional activities for the expansion of renewable energies, we have set up a newarea of responsibility, Regional Energy Transition. Dr Karin Thelen has headed this new division
as Director, Regional Energy Transition since July 2023. Furthermore, we are pleased to reportthat Dr Gabriele Jahn took on the position of Director, Human Resources, Real Estate, and Public
Pools, in November 2023, and we thank the outgoing member of the Management Board,
Werner Albrecht, for his extremely valuable contributions to the development of the company inthe last few years.
Together with our employees who contribute to Munich’s quality of life every single day, we willcontinue to represent and drive forward our vision of Munich as a future-oriented city where life
is worth living. We thank you for your constructive support of the ambitious path pursued by
Stadtwerke München.
Sincerely yours

Dr Florian Bieberbach
Chief Executive Officer

Ingo Wortmann
Director, Mobility

Dr Karin Thelen
Director,
Regional Energy Transition

Dr Gabriele Jahn
Director, Human Resources,
Real Estate, and Public Pools

Helge-Uve Braun
Director, Technology

3

4

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Our Strategy

ABOUT USFor 125 years, we have been responsible for basic needsof the people in Munich, supplying energy, drinking water, andmobility. With our portfolio, we are a fundament elementof the basic municipal services and make a major
contribution to the economic strength and quality of life
in Munich and the surrounding region.

“Our core businesses are undergoing a radicaltransformation on our way towards climate
neutrality. We are strongly committed to this task
and are seizing the emerging opportunities.”
Dr Florian Bieberbach, CEO

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Our Strategy

Electricity: We provide a secure supply of electricity to
Munich and the metropolitan region and invest in ­rene­wable energies (page 8 et seqq.). In addition, we take careof grid management, distribution, and sales. We also offer
individual energy solutions such as photovoltaic plants.

Heating: We reliably supply heating energy to our­customers – increasingly also from renewable sources.
To drive the heating transition forward (page 12 et seqq.),
we invest in geothermal energy, expand our district
heating grid, and offer heating pumps. Our services also
include energy-saving district cooling.

Mobility: Together with our MVG subsidiary, we are
creating Munich’s best mobility (see page 16 et seqq.).
This includes not only electrification, expansion, andmodernisation of local public transport, but alsoenabling individual e-mobility with our M-Ladelösung
charging solutions.

Water: We supply approximately 1.6 million people
with M-Wasser drinking water delivered fresh from thesource directly from the foothills of the Bavarian Alps. It
ranks among Europe’s best drinking waters. We preserve
its quality through numerous targeted drinking-water
protection measures and regular controls.

Telecommunications: Together with our M-net
subsidiary, we offer Munich and large sections of Bavaria
reliable communications technology and continuously
expand the fibre-optic network.

Public Pools: We operate 18 outdoor and indoor pools
as well as ten sauna facilities, offering one of Germany’s
most state-of-the-art public pool systems. Our services
also include one ice stadium and two fitness centres.

Our customers’ needs are of key importance to us. As a subsidiary of the City of Munich,
we also pursue the target of distributing EUR 100 million per annum to our shareholder,
thereby strengthening the municipal coffers.
With approximately 11,000 employees, we are also one of Munich’s largest employers.
For continued recruitment and retention of qualified skilled specialists, we implement
measures aimed at promoting an attractive work environment (page 20 et seq.).

5

6

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Our Strategy

OUR
ENGAGEMENT
Five overarching goals guideour actions:Customer-centric:
We exceed our customers’ and passengers’ expectations.
Ecological:
We avoid and reduce greenhouse gas emissions to achieve climate
neutrality by 2040.
Entrepreneurial:
We top the economic success ranking among Germany’s
municipal utilities.
Reliable:
Our quality and reliability are the benchmark for our competitors.
Dynamic:
We are one of Munich’s most attractive employers.

EUR 250
EUR 160

million is the average annual
contract volume we award in
the Munich metropolitan region.

million is the average annual
order volume we place in the cityof Munich alone.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Our Strategy

Munich is a city with a high quality of life. To preserve this quality
in the long term, we are a trail blazer, solution provider, andcompetent partner for the Munich metropolitan region and thepeople who live there. Our strategy focuses on three major transition
topics: the energy transition, the heating transition, and the mobility
transition. With our activities, we support the City of Munichin the achievement of its climate goals for mobility and energy.

From 2025 onwards, we will generatesufficient green electricity in our own plants
to cover all of Munich’s consumption.

Our climate goals

By 2040, we will supply CO2-neutral district heating to Munich.
We will cover the remaining heating demand from other heating
solutions such as local heating networks and heat pumps.

We will shape a cost-effective
transformation to hydrogen along
the value chain.

As a relevant and sustainable buyer, we will also
embed our climate-neutrality goals in our supply
chain and at our contractual partners.

We will electrify
our fleets by 2035.

By 2040, we will achieve
CO2-neutral operation of
all public pools in Munich.

Read more on our
engagement on the pages that
follow and on our website.

78

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Our Strategy

ENERGY
TRANSITION
We believe it is our responsibility as a municipal energy utility to contributeto climate protection and help shape the energy transition. As far backas in 2009, we defined our ambitious goal: we want to generatesufficient green electricity in our own plants to cover all of Munich’s
consumption from 2025 onwards. A look at the current situationshows that we are well on track towards achieving this goal.

Our largest green electricity producers are the two German offshore wind parks
operated by DanTysk Sandbank Offshore Wind GmbH & Co. KG (SWM stake:49 %) and the Norwegian onshore wind parks operated by Midgard Vind
Holding AS (SWM stake: 70 %). They have a generation capacity of more than
1 billion kilowatt-hours each (SWM share). This corresponds to more than 15 %of Munich’s electricity consumption per shareholding.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N

Our Strategy

We are driving the energy transition forward:
We are committed to the expansion of renewable energies; from a
supraregional perspective, our main focus is on wind energy.
In Munich and the surrounding region, we are putting particular emphasis on
unleashing the potential of photovoltaics. In these efforts, we rely on
ground-mounted PV plants in rural areas and rooftop PV plants in the city.
We are shaping a secure exit and transition from fossil energy sources.

The population in the city of Munich is growing, andthe same goes for e-mobility and the use of heatpumps. We therefore expect Munich’s electricity
demand to continue to grow in the period until
2035. Our plans provide for also covering this increase
from renewable sources.

A transition without borders
Our wind parks in Germany and Europe
are the main contributors to big leaps in
the generation of renewable energies.
Concurrently, we are also using the potential
in and around Munich: in this region, we
now operate more than 80 electricity plants
relying on renewable energy sources,
including hydroelectric, photovoltaic, windenergy, and geothermal power plants, aswell as one biomass cogeneration plant.

MunichRenewable energies: SWM plants
Onshore wind parks
Offshore wind parks
Photovoltaic plants and solar thermal systems

More than80

renewable energy generation
plants are operated by us in Munich
and the surrounding region.

Parabolic trough power plants
Hydropower plants
Geothermal power plants
District cooling systems from ground­water/underground streams
Biomass power plants

910 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N

In 2023, we concluded energy partnerships with the municipal
housing company Münchner Wohnen (formerly GWG andGEWOFAG) and initiated a wide variety of projects. They include
Munich’s largest tenant-geared electricity project in the Harthof
neighbourhood: 47 PV plants with an output of 1,900 kilowatts
peak and an area of 9,000 square metres.

Photovoltaics as focus of the ­regionalenergy transition
With our expansion of photovoltaics in Munich, weare supporting the goal of the City of Munich tocover a share of approximately 20–25 % of municipal
electricity consumption with green electricity
generated within the Munich city limits by 2050. In
the period until 2028, we intend to expand rooftop
PV plants by up to 30 megawatts peak per annum.
This corresponds to roughly half of the City of
Munich’s expansion goals and the electricity demandof approximately 12,000 Munich households.

“We want to remain a tried-and-proven andreliable partner for the people in Munich andthe surrounding region and continue to facilitate
their easy entry into renewable energies. With
this approach, we will also strengthen theattractiveness of the region as a business locationand enhance the quality of life for all.”Dr Karin Thelen, Director, Regional Energy Transition

A trail blazer for the power supply
grid of the future: supraconductors
Our grid operating subsidiary, SWM Infra­
struktur, wants to realise a 12-kilometre
superconductor cable in Munich within theframework of a collaboration project. This would
be the world’s longest cable of its kind.
Supraconductors could help us make the power
grid even more future-proof and reduce theenvironmental burden of grid operation evenfurther. The reason: superconductors transmit
electricity virtually without any losses. What ismore, such cables are very compact and thus
particularly well suited for urban areas, as cablelaying requires much less effort.

Managing the regional­energy transition – pooled
in a new division
Our focus in the expansion ofrenewable energies has always also
been on Munich and the surrounding
region. To tap the regional
potentials to an even greater extent,
we have now established a
dedicated division for the regionalenergy transition. Dr Karin Thelen
has headed this Regional Energy
Transition division since July 2023.
In the Munich metropolitan region,
we focus on both photovoltaics andthe expansion of CO2-neutral
heating generation, mainly throughgeothermal energy (see page 12 etseqq. for more information on this
topic).

12km

long is thesupraconductor cable
we are laying in Munich.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 11

Our Strategy

SWM’s PV expansion
in and around Munich

7,800
1,500

kilowatts peak is our approximate 2023 expansion.
This corresponds to the annual electricity
consumption of ca. 3,100 Munich households.

photovoltaic plants and more have alreadybeen installed via our M-Solar product.

Exit from coal and nuclear power – but securely
The transition to renewable energies also involves a gradual exit from fossil
energy sources. However, Russia’s war of aggression against Ukraine has
slowed down our exit from coal and nuclear power that had been scheduled
for 2022. To ensure a reliable supply against the background of a looming gas
deficit situation, the operating life of the Isar 2 nuclear power plant (SWM
stake: 25 %) was initially extended. In April 2023, the nuclear power station
was then taken off the grid. Similarly, the conversion of the coal-fired Block 2
in our “Nord” cogeneration plant to gas-based operation had to be
postponed. It is now scheduled for the summer of 2024.

12 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N

By 2040 at the latest, we want to ensure CO2-neutral coverageof Munich’s demand for district heating, largely relying on
geothermal energy. Sustainable district heating is a key componentof a future-ready heating supply and the municipal heating planningof the City of Munich. The latter is to show which type of sustainable
heating supply is suitable for which parts of Munich. In neighbourhoods
not linked to the district heating grid, we supplement our offerings
with local heating networks and heat pumps.

HEATING
TRANSITION

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 13

Our Strategy

Secure transition
During the transitional period to climate-neutral heating, we will certainly continue to provide areliable gas supply to our customers. Concurrently, we are consistently converting our services torenewable energies. The best possible supply solution depends on the location:

M-Fernwärme: With the help of deep geothermal energy, we are tapping
hot-water reserves underneath the city’s and the region’s surface, making our
M-Fernwärme district heating CO2-neutral in the long run.
M-Nahwärme: Outside the district heating grid, we want to use local
heating infrastructure to hook up entire neighbourhoods to close-to-thesurface geothermal sources.
M-Wärmepumpen: We offer ground-water and air heat pumps for individual
heating supply.
M-Fernkälte: We use the emission-free environmental cold of groundwater and underground streams and are cooling more and more buildings in
Munich with our steadily growing M-Fernkälte district cooling grid.

Using district heating potential,
modernising the grid
Our approximately 1,000-kilometre-long district heating
grid supplies Munich with eco-friendly heating. Currently,
district heating is still largely generated in gas-fired
combined heat-and-power (CHP) plants. The expansion ofgeothermal energy will make district heating CO2-neutralin the future. To be able to use heat from geothermal
sources, we will convert large sections of our grid fromsteam to hot-water operation by 2033. In addition, we will
expand and solidify the existing district heating grid.

2,000(metric) tonnes of CO2 per annum: we have realised
this reduction through an expansion of the district
heating grid in Moosach. As early as in 2025, buildings will
gradually be hooked up to the grid in this neighbourhood.

14 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N“Geothermal energy plays a key role for
Munich’s energy transition. It has the potential
to become the third pillar of the energy
transition alongside wind and solar energy.”
Helge-Uve Braun, Director, Technology

Unterföhring
Freimann

Freiham

Geothermal plant Freiham

PasingGeothermal plant Riem

Geothermal
plant
Innenstadt
Süd energy location

At the “Süd” energy location, we
operate what is currently Germany’s
most powerful geothermal plant.
Martinsried“Messe Riem”
fair grounds

Geothermal plant Michaelibad
Implementation ongoing

Sendling

We are building our seventh geothermal plant at the edge of the groundsMünchen
housing
Region Süd
the Michaelibad public pool. The site offers sizeable heating potential underneaththe surface and promises efficient connection to the district heating grid.

Some75,000

MunichSouth-East region

Geothermal heating power plant
Kirchstockach

Munich citizens are to get their
heating supply from the new plant.

Geothermal plant Dürrnhaar

SWM geothermal sites
Heat generation
Electricity generation
District heating – steam
District heating – hot water
As of: 09/2023

Geothermal heating power plant
Sauerlach

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 15

Our Strategy

57,000 m3
is the gross filling capacity of the new heat storage reservoir at the“Süd” energy location. The heat storage reservoir can decouple
generation and demand, facilitating more flexible use of district heating.
The foundation for this reservoir was poured in September 2023.

Climate-neutral heating supply­outside the district heating area
We are expanding district heating where it
makes economic and technological sense. In
areas where grid expansion cannot be realised,
we rely on local heating systems and M-Wärme­pumpen heat pumps. As individual self-supply
solutions, we offer air and groundwateroperated heat pumps. With M-Nahwärme, we
supply local heat to compounds, streets, or
districts, usually from close-to-the-surface
groundwater. Depending on the supply concept,
building cooling solutions can also be provided.

The future of air conditioning
More than 120 buildings in downtown Munich
are already equipped with climate-friendly
M-Fernkälte district cooling. Our use of groundwater and underground streams reduces energy
consumption compared to conventional coolingsystems. Our district cooling system is now
approximately 40 kilometres long and will be
expanded continuously – there are already plans
to link up many more buildings.

Germany’s largest district cooling centre, with a cooling
output of 36 megawatts, is being constructed at our“Süd” energy location. Alongside cold water from the
Isarwerkkanal conduit, the centre will also use water fromthe deep to operate absorption cooling machines.

As Germany’s largest municipal utility, we see ourselves as an important player
in the future hydrogen market. Please go to our website to learn about ourassessment of the potential offered by hydrogen and our plans for the future.

16 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N

MOBILITY OF
TOMORROW
As the organisation responsible for local public transport in Munich,
we keep daily bus, tram, and underground operations running andhave our eyes firmly on the mobility of the future. Together with our
MVG subsidiary, we are seeking to achieve 100 % electromobility
in local public transport. In addition, we operate charging points for
eco-friendly individual traffic in Munich and provide private charging
solutions for peoples’ homes.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 17

Our Strategy

Attractive eco-friendly local public transport
We are working on a wide range of activities aimed at enabling many people to use
environmentally benign local public transport:
Today, we are already transporting 80 % of our passengers to theirdestinations in underground trains and trams powered with green electricity.
We are streadily increasing the share of electric buses.
Expansions of the local public transport system ensure higher capacities
and attractive direct connections, which reduces congestion at downtown
stations, in particular.
We are spending millions on modernisation measures keeping stations aswell as tunnel and track systems in good repair. In addition, we are investingin high-capacity new underground trains and trams.
The “traditional” local public transport services are moreover supplemented
by innovative apps and new flexible mobility offerings.

At present, 61 out of MVG’s 400 buses are electrically powered. A further 71 electricbuses have been ordered (30 Daimler Buses articulated buses, 28 Ebusco articulatedbuses, 13 MAN solo buses). Investments total approximately EUR 54 million, withmore than half of this amount being financed from public funds.

1,200

public charging stations and approx. 2,500 charging
points in the private/commercial sector are
operated by us to support individual electromobility.

“When we count the electric buses wehave already in use and the new orders,our fleet will consist of 132 electric buses.
This brings us another big step closer
to our goal of deploying only electricallypowered buses.”
Ingo Wortmann, Director, Mobility

In 2023, we put 21 new MAN Lion’s City
electric buses in operation. They use
a design without engine tower, offering
passengers more space and comfort.

18 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N

Local public transport expansion
The tram system will be expanded by approximately 15 kilometresin the coming years. Specifically, the following projects are planned:
Western tangential tram route: The new route will link three undergroundlines, four tram lines, and six suburban train lines in the western part ofMunich. Construction started in spring 2024, and an initial partial route isalready slated to commence operation in late 2025.
Munich North tram route: This extension of the 23 tram line will set up alink to the Neufreimann neighbourhood and make a cross connection
between the U2 and U6 underground lines possible. An initial partial routeis scheduled to commence operation in late 2027.
Northern tangential tram route: New routes in Schwabing and Bogenhausen
will make it possible to offer new connections across neighbourhoods. The
most advanced planning stage has been reached for the junction to the
Johanneskirchen suburban train station.

symbolic image

Our largest underground new construction project (the U9 line) will run across downtown Munich. This
centrepiece of the mobility transition will reduce congestion in the existing network. Construction is scheduled to
begin in the 2030s, which means that partial routes could commence operation in the 2040s. Further
underground expansion projects include the U6 extension to Martinsried and the U5 extension to Pasing.

1 Munich North tram route2 Western tangential tram route
3 Northern tangential tram route1

4 U5 western extension
5 U6 southern extention
6 U9 relief line

3
Pasing4

Hauptbahnhof

6
Ostbahnhof

25Additional tram and underground train depots are also prerequisites
for the maintenance and expansion of our local public transport
services. Read more on other expansion projects on our website.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 19

Our Strategy

One app, ride everything: alongside local
public transport with mobile tickets,connection information, and disruption
reports, MVGO also includes the MVG
Rad bicycle-rental service, the display of
public charging stations (M-Ladelösung),and various sharing offers.

Modernisation measures

Expanded local public transport
services with MVG MIJA
Simply select your personal departure point anddestination via an app and book – MVG MIJA shall makethis possible from autumn 2025 onwards. Electricvehicles that can carry up to six passengers will thensupplement the existing underground, bus, and tram
services. They will let passengers on and off at virtual
stops, making flexible boarding possible. This is why
fares will also vary, depending on the route requested,
but discounts will be granted in combination with alocal public transport ticket.

A further prerequisite for future-ready local public
transport is the modernisation of existing infrastructure.
The under­ground system is a case in point – after all, ourfirst underground tracks were built 50 years ago. Several
underground stations have already been renovated and,
wherever possible, expanded. On average, we moreover
replace slightly over 6,000 metres of rails and 13 points
per annum. Our activities in 2023 included a funda­
mental overhaul of the U3/U6 underground lines.

After seven years, the complex modernisation projectat the Sendlinger Tor underground hub has been completed.
The upgraded mezzanine floor, including new stores, wasinaugurated on 12 December 2023.

The future of mobility
For tomorrow’s local public transport, MVG is playing a leading role in various research projects
studying possibilities to use digitalisation and autonomous driving in bus systems.

TEMPUS research project: This pilot project for automated urban road traffic that uses Munich as
testing grounds examines the automation of bus convoys and digital communications between
buses and traffic lights. In an approach called “platooning”, at least two buses drive in a convoy,
with only the first bus being operated by a driver. The other buses follow in automated mode,
linked without coupling. Together with twelve other partners, we are analysing under the aegis of
the German Aerospace Centre (Deutsches Zentrum für Luft- und Raumfahrt – DLR) whether thistheory can be put into practice. The German Federal Ministry for Digital and Transport is funding
this project with approximately EUR 11 million.
MINGA: For the MINGA project, we are conducting research together with 16 partners andseveral universities. Our focus is on the automation of buses and on-demand vehicles. The project,which the German Federal Ministry for Digital and Transport is sponsoring with approximately
EUR 13 million, is to be completed by the end of 2025.

20 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N

SWM ASEMPLOYER
With approximately 11,000 employees, we are one of
the most important employers in Munich. We offer
sophisticated tasks with prospects for ambitious people.
In Munich, we compete with many large and attractive
companies in our search for skilled specialists. This is why
we pursue the goal of ranking among the five most
attractive employers in the city by 2025.
In these efforts, we take our bearings from the regional
employer market analysis prepared by a market research
institute specialising in this area. Since 2016, our ranking has
improved continuously. Currently, we are No. 6 in theregional application intention. This means that we are only
one rank away from our goal. Our development of an
innovative and dynamic work environment is guided byour strategic goals.
To foster diversity, we, as a technically oriented company,
have inter alia set ourselves the goal of increasing the shareof women in our workforce. We intend to boost the sharefemale managers to at least 25 % – if possible by 2025, but
at the latest by 2030.

Our measures
to promote a diverse and attractive work environment include:­— Attractive salaries, profit sharing, and benefits such as special employee tariffs­— Strong commitment to the construction of company flats— Numerous offers for flexible working­— Encouragement of diversity­— Broad range of traineeship positions, possibilities to attend dual study courses,
and a trainee programme­— Development opportunities

Shaping the future

150
4

new trainees in 16 vocational
professions per year

dual study
programmes per year

Two new dual study programmes areenvisaged for 2024: industrial engineeringand mechatronics.

Diverse, networked, there for everybody

Flexible working-time models

Through targeted initiatives and events, we give diversity
more room at SWM. We want to offer a working
environment in which all employees are appreciated andintegrated, irrespective of their gender, nationality,
ethnic background, religion or worldview, disability, age,sexual orientation, and identity. Contributions to this are,for example, made by our Groupwide LGBTI* network,“Proud@SWM”, and the in-house women’s network,“Die Expertisen”. In addition, we recently established a
network for barrier-free access, “Die Barrierefreien”.

Manifold professional fields and tasks at SWM open up
numerous individual opportunities and development
options. At the same time, we make it possible for our
employees to enjoy a work/life balance and offer flexibility
through various part-time and working-time models – also
in shift schedules. In addition, our employees have thepossibility to take some time off in the form of a sabbatical.

Exciting prospects through our job events
In the keenly contested Munich labour market, werely on target-group-focused formats ensuring thatobstacles to applications are as low as possible. Thisapproach has already brought us considerable success:thanks to these efforts, we recorded significantly morethan 30,000 applications in 2023. One example of thisapproach is the “job application tram” and “jobapplication bus”, from which applicants, in a best-casescenario, disembark with a firm job offer.

Company flats forour employees

1,350
company flats are available today.
3,000 is the number we envisage for 2030.

“SWM is the flagship among municipal companies and sets
standards for others in many areas such as the guidelines formobile working or company flats.”
Dr Gabriele Jahn, Director, Human Resources, Real Estate, and Public Pools

22 A N N UA L R E P OR T 2023
Our Strategy

S TA DT W E R K E M Ü N C H E N

NEWSFLASH
Fibre optics for a future-proof digital infrastructure
A total of 70 % of Munich’s households are already benefiting from our powerful fibre-optic
network. Together with our M-net subsidiary, we hooked up a further 3,300 buildings with 18,400
households and commercial businesses in 2023, We are placing increasing emphasis on fibre-tothe-home (FTTH). Unlike fibre-to-the-building (FTTB), FTTH allows us to provide the highest
bandwidths in each individual flat. Increasing digitalisation, electricity savings, and CO2 reduction
make fibre optics indispensable for the Munich of tomorrow.

EUR 450,000

was SWM Education
Foundation’s
2023 investment.

SWM Education Foundation fosters equal opportunities
Our SWM Education Foundation supports projects aimed at improving the educational
opportunities of disadvantaged children and adolescents. With basic foundation assets totalling
EUR 20 million, the foundation ranks among the largest organisations of its kind in Germany’s
educational sector. Since 2007, it has funded 141 projects with an amount in excess of
EUR 9,4 million. In 2023, we paid out EUR 450,000 to eleven projects. They included “Ambulante
Lerngruppen im Dominik-Brunner-Haus der Johanniter”. This project initiated by the JohanniterUnfall-Hilfe e.V. humanitarian association gives children and adolescents from socially disadvantaged
families the opportunity to attend study groups offering qualified, regular, and free tutoring.

30 years
Organic farming to preserve the­quality of M-Wasser drinking water
The project that started with 23 farms on anarea of 753 hectares in 1992 rapidly evolved intoa sustainable success for the quality of Munich’s
drinking water. We extract most of our waterfrom the Mangfall valley, located south-east of
the city. Today, 185 farming partners have
converted an aggregate area of 4,400 hectares
to organic farming. Their efforts safeguard theexcellent drinking water quality for future
generations.

100 years
Green electricity from our Isarwerk 2 hydropower plant
In 2023, we celebrated the 100-year anniversary of our Isarwerk 2hydropower plant on the Munich Werkkanal conduit. Since 1923, the plant
has generated green electricity from water power and has played a major rolein Munich’s electrification. Visitors had the opportunity to explore the planton an open day in October.

Sustainable transformation at the Georgenschwaige public pool
Since March 2023, we have been working on the conversion of the Georgenschwaige outdoor
pool into a CO₂-neutral natural pool. From the 2025 season onwards, it will offer all Munich
citizens a state-of-the-art and eco-friendly outdoor bathing experience – including barrier-freepool design and new attractions. In this project, we rely on environmentally friendly construction
standards, the use of wood, and recycling. A biological water treatment system will allow us todispense with chlorine. And a photovoltaic plant will generate electricity for the circulation pumps
and the heat pump and keep the water in the pool at a constant temperature. We intend to switch
all our public pools to CO₂-neutral operation by 2040.

Reliable assistance from the
SWM heating fundmuenchen app: an innovative app
for an innovative city

In cooperation with welfareorganisations and the City of Munich, we
set up our heating fund in 2023, making
EUR 20 million available. This fundsupports low-income households inhandling the high heating costs. In 2023,
approximately 19,000 Munich citizens in
6,800 households received grants
totalling more than EUR 8.3 million fromthe heating fund. And we will again
provide financial assistance from theheating fund in 2024.

Together with München Ticket and muenchen.de, we have developed
an app that aims to give users faster and easier access to Munich’s
universe of events. The app provides information on more than
300 events and leisure activities in and around Munich, shows
opening hours and prices, and offers a secure payment system for
digital tickets via M-Login.

2 million
users are relying on M-Login.

24 A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E NFinancial Report25 – 42
Group Management Report
25

Business Model

26

Business Report

39

Forecast, Risk, and Opportunity Report

43–47
Consolidated Financial Statements
43

Consolidated Balance Sheet

44

Consolidated Income Statement

45

Consolidated Cash Flow Statement

46

Schedule of Consolidated Shareholders’ Equity

48–80
Notes
48

General information

48

Consolidation Group49

Consolidation Principles

50

Accounting Policies

57

Notes to the Consolidated Balance Sheet

62

Notes to the Income Statement­­

65

Other Information

70

The Executive Bodies of Stadtwerke München GmbH

71

Management Board

72

Movements in Non-current Assets 2023

74

Affiliated Companies and Major Equity Participations

77

Independent Auditor’s Report

80

Report of the Supervisory BoardA N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 25

Group Management Report

Group Management Report
1. Business model
Stadtwerke München (SWM) is a major contributor to
the economy and quality of life of the people in Munich
and the surrounding region. From energy and watersupplies to mobility to telecommunications and Munich’s
public swimming pools, SWM offers important infrastructure services at fair terms and conditions. SWM
gears its offerings to both the needs of its customers
and the benefit of the Munich metropolitan region. To
achieve these goals, SWM also plays an active role in thenational and international energy markets.
SWM manages its business across all segments of thevalue chain: Energy – subdivided into Sales, Trade,
Generation, and Networks –, Water, Mobility, Telecommunications, and Public Pools.
EnergySales
As market leader in the Munich metropolitan region,
SWM is a high-performing and future-oriented partner
for energy supply services that are both reliable andclimate-friendly. We achieve this by supplying electricity, gas, district heating, and district cooling to ourcustomers. In addition, we offer all customer segments
market-geared solutions and services for decentralised
energy generation and heating supply as well as forelectromobility at home.
Trade
Trade is a key driver of the energy management andbusiness model aimed at optimising SWM’s energy
business and hedging against risks. Its most important
responsibilities are market-driven procurement andmarketing of energy and the associated input materials,
the management of the Group’s aggregated market
price risks (mainly for electricity, natural gas, and energy-specific certificates), the expansion and operation of
the virtual power station, and deployment planning for
power stations. In addition, Trade gives Energy Gene­ration, Sales, and individual SWM majority shareholdings
access to the energy markets.

Generation
In the Munich metropolitan region, the Generation
segment of the value chain comprises the operation andmaintenance of all plants for the generation of electricity,
district heating, and district cooling. The supra-regional
activities within this value chain segment focus on theareas of renewable energies and gas extraction.
SWM’s district heating vision aims to achieve CO2-neutral
coverage of Munich’s district heating requirements
by 2040 at the latest. This is the reason why SWM will
increasingly generate district heating from renewableenergies, primarily geothermal energy. SWM is ambitiously expanding the use of geothermal energy in theheating supply in Munich and the surrounding region.
With its renewable energies expansion campaign, SWM
plans to generate enough green electricity from its
own plants to cover all of Munich’s consumption from2025 onwards. To achieve this goal, SWM is continuously
expanding the share of electricity generation fromrenewable sources in the Munich region as well as inGermany and internationally. As it is not possible togenerate enough green electricity entirely in Munich andthe surrounding region for a city with a population of
more than one million inhabitants, SWM is also investingin the expansion of renewable energies throughout
Germany and Europe.
SWM also engages in gas production in north-western
Europe via its shareholding in Spirit Energy Limited(Spirit Energy). The UK and Dutch business remaining
after the sale of both the Norwegian business activities– completed in 2022 – and the shareholding in the British
section of the Statfjord field focuses on natural gas andwill be aligned with the requirements of the energy
transition. To this end, the existing gas exploration
infrastructure in the UK is to be used for sustainable andclimate-friendly activities such as storage of CO2 fromindustrial processes, hydrogen production with subsequent CO2 storage (blue hydrogen), or hydrogen storage
in former gas deposits (green hydrogen).

26 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Water
Every day, SWM delivers Munich’s drinking water(M-Wasser) fresh from the source directly from thefoothills of the Bavarian Alps to Bavaria’s capital.
Mobility
The Mobility business segment comprises Münchner
Verkehrsgesellschaft mbH (MVG) and the Mobility divisionof Stadtwerke München GmbH. MVG is the passengers’
contracting partner. Stadtwerke München GmbH is
responsible for providing underground and tramway
transport services on behalf of MVG. The bus services areprovided by MVG, Stadtwerke München GmbH, as well asprivate cooperation partners. Stadtwerke München GmbHholds an equity interest under company law in one of thesecooperation partners – Münchner Linien GmbH & Co. KG.

2. Business report
Economic environment
Energy markets
After the turbulent developments in 2022, which werelargely shaped by the repercussions of Russia’s warof aggression and shortages in the supply of Russiangas, 2023 was the year in which the European energy
markets grew accustomed to this situation. The markets
adjusted to a supply situation characterised by an almost
total lack of pipeline-transported Russian gas deliveries.
Accordingly, a downward trend in prices in the gas andelectricity markets could be observed – and the same
applied to clean dark und clean spark spreads (contribution margins of power plants). However, price levels arestill higher than before Russia’s attack on Ukraine.
Developments in the energy markets are key influencing
factors for SWM. In particular, the prices of electricity,
coal, natural gas, and emission certificates, and thecontribution margins of power plants have a major
impact on SWM’s result of operations, financial position,and net assets.
Gas, rolling front year, Trading Hub Europe (THE), EUR/MWh

Telecommunications
The product portfolio of Telecommunications iscomprised of Internet, voice, and transmission services
for residential and business customers based on
fixed-network and mobile communications. As a regional
provider, SWM offers services to large sections of Bavaria,
the greater Ulm area, and the Main-Kinzig district inHesse. The product portfolio is continuously developed
further in order to maintain SWM’s competitiveness.
The services are performed jointly by M-net Telecommunications GmbH (M-net), SWM Services GmbH, andStadtwerke München GmbH.

350

Public Pools
Through the operation of 18 indoor and outdoor pools,
ten sauna facilities, the Prinzregenten ice stadium, andtwo fitness centres, M-Bäder offers its guests a wide
range of opportunities to keep themselves fit andhealthy, spend leisure time, and relax. Munich’s modern
public pools are available at a total of 15 locations
throughout the city. They are sports and leisure facilities
for the people in Munich.

Pipeline-transported gas deliveries from Russia tonorth-western Europe were limited to small volumes via
the Ukraine route that have been observed since
September of last year. Alternative delivery routes, e. g.
through Poland, were not used. Much lower gas demand
was one factor that helped ease tensions in the market,
with changes in consumption behaviour on the part ofresidential customers, lower consumption in industry,
and a mild winter all playing a role in this decrease indemand. In addition, deliveries of liquefied natural gas(LNG) to Europe were high compared to previous years,
and the LNG infrastructure was expanded through theaddition of floating storage and regasification units.
Furthermore, natural gas deliveries from Norway were

300
250
200
150
100
50

Sep. 23

Mar. 23

June 23

Sep. 22

Dec. 22Mar. 22

June 22

Sep. 21

Dec. 21Mar. 21

June 21

Sep. 20

Dec. 20

Mar. 20

June 20

Sep. 19

Dec. 19

June 19

Jan. 19

Mar. 190

Source: European Energy Exchange; data supplied by Reﬁnitiv

Dec. 23

Networks
Expansion and operation of distribution networks forelectricity, gas, district heating and district cooling,
and water are key elements of the basic public services
SWM provides to the people in Munich. The main task of
Networks is to continue to ensure above-average supply
quality and reliability of the SWM networks and grids
despite the cost pressure that has increased further due
to incentive regulations for electricity and gas grids.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 27

Group Management Report

Conditions in the sales market
SWM’s 2023 sales year was strongly influenced by therepercussions of the massive price movements andthe energy price caps adopted by the German federal
government. The implementation of these caps was anenormous challenge for SWM and the entire industry.
The gradual downtrend in market prices for electricity
and natural gas that could be observed from the turn of
the year onwards created a situation in which competition once again intensified considerably, especially on
price comparison portals such as Verivox und Check24.

at a robust level through most of the year. During thesummer months, it therefore already became clearthat the gas storage facilities in Germany and Europe
would be completely filled in time for the start of the2023/2024 winter heating season. Accordingly, prices ofgas forward contracts fell significantly year-on-year.
Electricity, DE rolling front year, EEX, EUR/MWh
1,400
1,200
1,000
800
600
400
200

Sep. 23

Dec. 23

Mar. 23

June 23

Sep. 22

Dec. 22Mar. 22

June 22

Sep. 21

Dec. 21Mar. 21

Base

June 21

Sep. 20

Dec. 20

Mar. 20

June 20

Sep. 19

Dec. 19

June 19

Jan. 19

Mar. 190Peak

Source: European Energy Exchange; data supplied by Reﬁnitiv

The easing of tensions in the market also resulted in a
gradual downward trend in electricity forward contract
prices, which followed the price developments in the gas
market and was additionally reinforced by the reduction
in risk premiums.
Clean Dark Spreads and Clean Spark Spreads,
rolling front year, EUR/MWh
800
700
600
500
400
300
200

Compared to the peaks reached in 2022, wholesale
prices for electricity and natural gas have come down
significantly amid high volatility, but they are still clearly
above their pre-war levels. It was possible to reduce risk
premiums in new contract offers to business customers
to some extent, but they still accept only contracts withvery short durations. One exception were structured
exchange-aligned products.
Conditions in energy policy
In 2023, numerous ground-breaking “Fit for 55” files
were completed at the EU level within the frameworkof the Green Deal. They are to contribute to achieving
climate neutrality within the EU by 2050 and the interim
goals of a 55 % reduction in greenhouse gas emissions
by 2030 compared to 1990.
The cornerstone of the legislative package was thereform of the EU Emissions Trading System, or EU ETS
for short, which regulates the generation of emissions
in the industrial and energy sectors and therefore also
has a direct impact on SWM. The reform envisages asubstantial reduction in emission certificates by 2030,
namely 62 % compared to 2005. Furthermore, emissions
generated by the treatment of municipal waste are to be
included in emissions trading over time. This rule might
be applied as early as from 2028 onwards.

1000Sep. 23

Dec. 23

Mar. 23

June 23

Sep. 22

Dec. 22Mar. 22

June 22

Sep. 21

Dec. 21Mar. 21

Clean Dark vs. BaseJune 21

Sep. 20

Dec. 20

Mar. 20

June 20

Dec. 19

Sep. 19

June 19

Jan. 19

Mar. 19–100

Clean Spark vs. Base

Data supplied by Reﬁnitiv

Another consequence of falling prices and narrowing
risk premiums was a downward movement in clean dark
und clean spark spreads for the front year. Both depreciated noticeably, especially in the first two months of2023 when risk premiums in the electricity markets were
whittled down.

In addition, the Renewable Energy Directive and theEnergy Efficiency Directive were revised, with ambitious
goals being incorporated. Among other things, the shareof renewable energies in total energy generation is toincrease to 42.5 % by 2030 and energy consumption is
to be reduced by 11.7 % compared to 2020 by the same
year. The public sector shall become a role model in thearea of energy efficiency, with measures including renovation of 3 % of the total floor area of buildings owned
by public bodies on a yearly basis.

28 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

The files on decarbonisation of the internal gas market
adopted in 2023 defined guideposts for network regu­
lation such as ownership unbundling rules for futurehydrogen grid operators or admixture rules for crossborder pipes. These regulations make an essential contribution to guaranteeing the ramp-up of the European
hydrogen market. Green hydrogen generated withelectricity from renewable energy sources might becomea large-scale substitute for methane and moreover coverpeak loads in a climate-neutral world. Concurrently, theMethane Emissions Regulation tightened the rules for
tracking and reducing methane emissions in gas grids,
which, in turn, means that grid operators will have toshoulder considerable additional costs and efforts.
Alongside these climate action files, the Brussels agenda
also included the reform of the EU electricity market
design. Many EU member states had requested sucha reform amid the distortions witnessed in the energy
market. In March 2023, the European Commission
therefore submitted pertinent proposals, e. g. measures
to encourage energy utilities to conclude more long-term
procurement contracts and the possibility to introduce
price caps in emergency situations. Within only a few
months, the files were subsequently discussed andadopted by the European Council and the European
Parliament.
In the year under review, the European Commission felt
confirmed in its decision to adopt emergency measuresin 2022, frequently in fast-track procedures. The requirements, e. g. for gas storage facility filling levels, werecomplied with in 2023. Some of the gas storage facilities
were 100 % full in autumn. On an EU-wide basis, thelegal requirement of 90 % was already reached in August– two months earlier than stipulated. This and othermeasures helped calm down the situation in the energy
markets and stabilise supply reliability.
At the German national level, 2023 was the year of
decarbonisation (reduction in the use of fossil fuels) andclimate action, not least also to further reduce dependence on oil, gas, and coal imports:} Energy price caps were introduced to mitigate theenergy price crisis.
} The Buildings Energy Act (Gebäudeenergiegesetz;
GEG) and the Heat Planning Act (Wärmeplanungsgesetz; WPG) were adopted to implement the heatingtransition. These two pieces of legislation lay important
groundwork for the heating transition. The GEG
stipulates that newly installed heating systems are to
generate at least 65 % of their heat from renewableenergy from 2024 onwards. With the WPG, nationwide and comprehensive municipal heat planninghas been enshrined in law, the goal being to expedite
heating grid expansion and thereby decarbonise theheating systems.
} Various amendments to the Energy Industry Act(Energiewirtschaftsgesetz; EnWG) are, on the one
hand, a response to the European Court of Justice (ECJ)
ruling on giving the German Federal Network Agency(Bundesnetzagentur; BNetzA) more independence.
On the other, the regulations in the draft bill aim
to drive forward the development of the hydrogen
infrastructure (hydrogen core network) and realise thecontinuation of the National Hydrogen Strategy. This
creates a regulatory framework for the second stage ofthe hydrogen network ramp-up, during which furtherhydrogen users and generators as well as hydrogenstorage facilities can be hooked up to a comprehensive
and interconnected network. Furthermore, regulations
for the funding of the hydrogen core network are to beestablished, which can be used as a basis for a ramp-up
by the private sector.
} With its Solar Package I, the German federal government mainly intends to introduce new regulations
for the subsidisation of special photovoltaic plants(agrivoltaics, floating voltaics, moor voltaics, andparking-lot voltaics), make it easier to add rooftop
photovoltaic plants, simplify tenant-geared electricity,and facilitate communal building supply. In addition,
the use of plug-in solar devices is to be made easierand grid connections are to be expedited.
} With the submission of its Power Plant Strategy,
the German federal government intends to create aframework for the short and medium-term build-up
of new power plants that can ultimately be switched
to climate-neutral operation. This will involve tenders
for hydrogen sprinter power plants, hydrogen hybrid
power plants, H2-ready power plants, or convertible
power plants for which the switch to hydrogen will bemandatory by 2035.
The ruling of the German Federal Constitutional Courton the constitutionality of the German federal government’s Climate and Transformation Fund (CTF) and thesubsequent freezing of the Economic Stabilisation Fund
(ESF) have created a situation in which the funding of theenergy, heating, and mobility transitions are also being
scrutinised.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 29

Group Management Report

Conditions in the mobility sector
In the mobility sector, the coalition agreement reflects theclimate targets with its commitment to a strong railway
industry and efficient and economically sound local
public transport. The agreement thus addresses the major
challenges of the future. A key objective is to increase
passenger numbers in local public transport, as this would
make a major contribution to the realisation of the climate
targets. In this context, the German federal government
wants to discuss an expansion and moderni­sation pactwith the federal states and municipalities as well as
increase the regionalisation funds, which are an importantsource of financing. According to the decision of theconference of transport ministers of November 2022,
the regionalisation funds will indeed be increased, but
presumably the money will mostly go to regional railpassenger transport. The negotiations on the extension
and modernisation pact were postponed until 2024. Thismeans that any results will, at the earliest, make themselves felt from 2025 onwards. Consequently, it remains
unclear how the service expansion in local public transport
as a contribution to the realisation of the climate targets
will be funded. The requests made by the transportindustry in this respect have thus not been taken up either.
The key drivers of conditions in the public transport sector
continue to be the German Passenger Transportation Act(Personenbeförderungsgesetz; PBefG), European state
aid regulations (Regulation (EC) 1370/2007), and contract
award legislation. It is still necessary to put municipal
mobility service providers in a position that allows themto provide transport services under competitive terms.
This results not only from legal rulings, but also from thefinancial state of local public transport systems.
Competition for public funding of transport infrastructure expansion and maintenance continues under theprevailing financial framework. A decision was madeto continue to offer and also increase federal financial
assistance under the Municipal Transport Financing Act(Gemeindeverkehrsfinanzierungsgesetz; GVFG) beyond
2022. In addition to the funding of new construction
projects, cost-intensive refurbishing projects for the
existing infrastructure will also qualify for subsidies
in the future, as the industry has demanded for many
years – although such subsidisation will be subordinate
to new construction projects and limited until 2030.
This decision is of major significance for SWM given theincreasing need for renewal of Munich’s undergroundinfrastructure in particular. However, the previously
available unbundling funds continue to be part of states’
budgets without being earmarked for any specificpurpose under federal law. Pertinent case-by-case regulations must thus be enacted into state law. At the sametime, it is becoming more and more difficult to convince
the competent political bodies to approve cost-covering
fare increases.

In the city of Munich, local public passenger transport
continues to face fundamental quantitative, qualitative,and economic challenges due to a medium and longterm increase in demand associated with population andcommuter growth, especially at peak hours. At the sametime, the recruitment of qualified staff, notably operatorsand construction engineers, is becoming ever morechallenging, which makes completely novel personnel
hiring approaches necessary. Furthermore, digitalisationis creating completely new framework conditions andtasks for the entire industry.
The consequences of the Covid pandemic continue tocreate an additional challenge. Despite a renewed risein passenger numbers, it has not been possible to fullly
make up for their previous decline. The introduction ofwhat is known as the “Deutschlandticket” – a special
flat-rate public transport ticket offered in a monthly
subscription model – created further massive challenges
in sales, as extremely high demand for this type of ticket
for private and job purposes had to be handled. Even
though the politically endorsed local public transport
subscription must be regarded as a success in terms of
its sheer sales numbers, its funding for the coming years
from 2025 onwards is currently still uncertain.
Telecommunications market
The German telecommunications market presented
a stable picture in 2023, generating revenues of
EUR 60.2 billion. Investments in tangible assets inthe telecommunications market increased from
EUR 13.1 billion in the previous year to a total of
EUR 13.6 billion. The majority of these investments
is going to fibre-to-the building/home (FTTB/H) and
5G infrastructure.
The opening of the already installed fibre-optic networks
to other competitors (“open access”) within theframework of what is known as “wholesale marketing”
continued in 2023, too. SWM expects this trend to intensify further as the telecommunications providers actively
involved in the expansion of fibre-optic networks seek notonly high utilisation rates for their networks, but also fast
amortisation of the investments made. Many fibre-optics
providers, including M-net, have already concluded
cooperation agreements and opened their networks tocompetitors. Competition in the fibre-optics market intensified even further in 2023. Given the increase in roll-out
costs, the expansion of the fibre-optics networks will, in all
likelihood, slow down in the coming years.

30 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Business development
Sales
SWM’s goal is to ensure high customer satisfaction andloyalty with its sales activities and continuously expand
its market position on this basis. In the year under review,
SWM did not succeed in making progress towards thisgoal. Temporarily very high electricity and gas prices
resulted in noticeable customer losses in the residential
and business customer segments. In the fourth quarter,
however, these losses were curtailed significantly as
SWM consistently used the price reduction leeway that
had emerged during the course of the year. The complex
implementation of the energy price caps placed additional burdens on customer satisfaction. The company
is putting a lot of effort into once again improving its
trust scores, customer satisfaction, and loyalty towards
SWM. Despite these major challenges, SWM was able tomaintain its position of market leader in Munich and still
has an extraordinarily high market share.
Energy sales to business customers above all reflectedfurther savings on the part of customers in the heating
segments. The sale of procured volumes in the wholesalemarket had a negative effect on sales results. A countervailing trend resulting from the continuous focus of theBusiness Customer Sales units on flexible, structured, andexchange-aligned products with adequate risk sharing.
The uncertain geopolitical situation continues to impact
the energy markets and energy sales of SWM’s Energie
Südbayern GmbH (ESB) shareholding. The corporate andbusiness customer segments did record slight volume
declines, but margins improved. Thanks to structured
procurement in conjunction with a differentiated priceand product strategy, ESB succeeded in significantly
increasing its number of customers in the residential
segment, especially in the electricity business.
Overall, electricity and gas sales volumes decreasedslightly in 2023 due to customer losses and temperaturesthat were higher than average in a multi-year comparison. By contrast, district heating sales volumes roseslightly, while water sales volumes remained more or lessat the previous year’s level.

Trade
After temporarily very high prices and volatilities in theprevious year that reached their peak in August, induced
by reduced gas flows from Russia along with limited
availability of French nuclear power plants, prices began
to drop sharply at the end of 2022 and subsequently
stabilised from mid-2023 onwards at levels slightly
above those recorded before Russia’s war of aggression.
Thanks to SWM’s hedging strategy for the marketprice-­dependent portfolio, the high prices recorded in
2022 had a positive effect on operating result in 2023.
The power plant position benefited from temporarily
positive spreads. The clean dark spread, in particular,
was noticeably in positive territory when the hedging
transactions for 2023 were concluded.
The business performance of SWM’s Bayerngas shareholding was affected by developments in the gas market.
The shareholders of Bayerngas agreed to discontinue thebusiness operations of bayernets GmbH, the Bayerngas
subsidiary responsible for trade and sales, by the endof 2025. The wind-down process is scheduled to becompleted in 2026.
In the Plattform Energie GmbH purchasing pool, headquartered in Bad Aibling, Energie Südbayern GmbH (ESB)
is responsible for energy procurement and the management of an electricity and natural gas portfolio with a
total volume of approximately 4.4 terawatt-hours for
45 current municipal partners. The plans provide for the
inclusion of additional municipal partners.
Generation
Extensive measures are being implemented on the siteof SWM’s “Süd” energy location: the geothermal plantwith six wells is in trial operation and provides anotherimportant pillar of the heating supply. To cover thesteadily growing demand for district cooling, a powerful
district cooling centre is being built. In autumn 2023,
work on the foundation for the construction of a heatstorage reservoir was completed. Its storage capacity
will be 2,200 megawatt-hours, with a storage output
of a maximum of 300 megawatts and an available net
volume of approximately 43,300 cubic metres. Afterthe commissioning of the modernised gas-and-steam
turbine 2 (GuD2) and extensive performance test runs,
official acceptance of the turbine followed in 2023. The
modernised system has a much higher efficiency level.
The GuD1 turbine is likewise being upgraded.
2023 brought the official acceptance of new gas turbinesat the Freimann combined heat-and-power (CHP) plant.
These turbines feature high efficiency levels. Together
with the geothermal systems at SWM’s “Süd” energy
location, they form an innovative combined heat-andpower system and have therefore been granted a special
funding status.

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Furthermore, the conversion of the coal-fired Block 2 inour “Nord” CHP plant to natural gas is being prepared
for the 2024/2025 heating season. In addition, the plansprovide for the future construction of a biomass CHP
plant at the same site with a view to further expediting
generation from renewable energy sources.
We are strongly driving forward the expansion of
CO2-neutral district heating generation throughgeothermal energy. The realisation of the geothermal
plant on the grounds housing the Michaelibad publicpool is in the planning stage. Preparatory measures suchas the development and clearing of the construction
site and the demolition of old existing buildings havealready been completed. Further sites and/or projects
are being analysed and will contribute to transforming
district heating in the direction of greenhouse gas
neutrality. More small-scale measures for geothermal
systems integration such as the installation of pressure
boosting systems and district heating substations are in
the implementation stage. In addition, SWM is active invarious geothermal research projects.
To offset the feed-in fluctuations of green electricity
plants, SWM supplements its generation portfolio withstationary large-volume batteries. In addition to thealready up-and-running storage batteries at the Freiham(1 megawatt) und Freimann (10 megawatts) sites, a25-megawatt storage battery is under construction andin the certification process at the Uppenborn 1 site. In thearea of hydroelectric power, 2023 brought the groundbreaking for the renewal of the Großhesselohe weir. This
landmarked weir, which has been in operation since 1908,is being upgraded to the state of the art and alignedwith today’s safety requirements. The new replacement
structure chosen by SWM is the best possible solution
from both an ecological and operational perspective andwill offer enhanced flood protection for Munich.
The “Isar 2” nuclear power station, which had commenced
operations in 1988, went off the grid in mid-April 2023 as
stipulated by law. The post-operation and dismantlingphase began immediately after decommissioning and will
presumably take approximately 15 years.
In the implementation of the renewable energies expansion campaign, SWM mainly focuses on wind energy inelectricity generation. Wind energy can generate large
quantities of green electricity all year round, independent of other resources.
At wpd europe GmbH (SWM stake: 33 %), sales volumes
slightly exceeded the expected generation capacity sales
thanks to a large-volume sales transaction in Finland.
This is the reason why the capacity of the wind parks heldby wpd europe GmbH in its own portfolio decreasedslightly, to 775 megawatts.

In the SWM 50 MW, SWM Wind Havelland, SWM
Wind Onshore France, Sidensjö, Austri Raskiftet, Austri
Kjølberget, Jasna, Midgard, and Roan onshore windparks, and the Andasol 3 solar thermal power plant in
Spain, operations proceeded as expected. However, theiraggregate output fell somewhat short of expectationsin 2023, the reason being a weather-induced decline inwind yields.
The Gwynt y Môr, DanTysk, Sandbank, and Global Tech I
offshore wind parks are in regular operation. Theiroutput was slightly below expectations in 2023, which
was due to generally lower weather-induced wind yields
and a high share of feed-in management measures in
the German parks.
Most wind parks operated in a price environment thatwas returning to normal. The projects for green electricity generation that have already been implemented,
together with those that have been initiated, give SWM
access to generation capacities in its own plants thatarithmetically already correspond to last year’s electricity
consumption in Munich. SWM‘s goal is to sustainably
generate sufficient green electricity from renewablesources to cover all of Munich’s annual requirementsfrom 2025 onwards. To cover the additional electricity
demand that is expected to arise from heat pumps and,above all, from electromobility, the goal has already been
increased accordingly: up to 8.4 billion kilowatt-hours ofelectricity are to be generated from renewable energies
by 2035. Further investments will be made to expand
generation capacities.
The output of Spirit Energy was slightly above plan in
2023. Due to the trend in gas prices, operating profit
was below expectations, while free cash flow exceeded
expectations. Activities in the area of potential new,climate-friendly business segments were driven forward,
but are still in the planning stage. The projects that havebeen realised and are being implemented ensure SWM’s
future-ready positioning in the Generation segment.
The expansion of geothermal energy use is proceedingas planned and highlights SWM’s active role in helping
shape the heating transition. In 2023, the renewableenergies expansion campaign continued to make further
headway, especially thanks to the stabilisation of operations in already up-and-running power plants.

32 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Energy Networks – Electricity
Based on the German Energy Industry Act (Energie­
wirtschaftsgesetz; EnWG) and the German Ordinance on
Electricity Grid Access Charges (Stromnetzentgeltverordnung; StromNEV), SWM Infrastruktur GmbH & Co. KG(SWM Infrastruktur) annually calculates the preliminary
grid access charges for the following year and publishes
them in October of the current year. These preliminary
grid access charges are the basis of calculation for theSales units. In 2023, access charges in the grid territory of
SWM Infrastruktur increased by approximately 15 %. The
single largest item and main reason for the increase is theshare of upstream transmission grid costs.
To ensure supply reliability in the operation of the electricity grids, the integration of electricity generated fromrenewable energies must be accompanied by offsettinginterventions in the power system. Such offsetting
measures to ensure grid stability, e. g. through large
stationary reservoirs, must be performed more frequently
as the share of renewable energies in electricity generation continues to increase. Grid operators’ goal is to keep
the costs of these measures as low as possible. In theirindustry-wide “Redispatch 2.0” project, distribution grid
operators are setting up uniform processes to achieve thisoutcome. In addition, SWM Infrastruktur got intensively
involved in the consultation proceedings the German
Federal Network Agency (Bundesnetzagentur; BNetzA)
had launched for the determination of Section 14a of theGerman Energy Industry Act (EnWG). These proceedings
lay the foundation for intelligent control in the low-voltage
segment. This will make it possible to align grid accesscharges with grid utilisation rates in the future.
Energy Networks – Gas
Based on the German Energy Industry Act (EnWG) and
the German Ordinance on Gas Grid Access Charges(Gasnetzentgeltverordnung; GasNEV), SWM Infrastruktur annually calculates the preliminary grid accesscharges for the following year and publishes them in
October of the current year. These preliminary grid accesscharges are the basis of calculation for the Sales units. In
2023, access charges in the grid territory of SWM Infrastruktur increased by approximately 18 %. In addition,
the year was again dominated by the looming gas deficit
situation triggered by Russia’s war of aggression. The
shutdown possibilities that had been identified in theprevious year were incorporated in a software solution.
Under the leadership of the German Federal Network
Agency (BNetzA), SWM Infrastruktur participated in thedesign of the process to be followed in the event of anation-wide gas deficit situation.
bayernets GmbH, a subsidiary of Bayerngas, not only
continued to perform its key function, i. e. operationof long-distance gas pipeline networks, but also

implemented preparatory measures for the transformation to hydrogen transport. Framework conditions in thegas storage market have changed fundamentally since
the risk of a potential gas deficit situation emerged in
the previous year. Storage operators are now obligatedby law to comply with mandatory storage requirements
including predefined minimum filling levels at certain
dates. Since then, the Wolfersberg underground storage
facility owned by Bayerngas has mainly been used by themarket area manager, Trading Hub Europe, in accordancewith normal market terms and conditions.
Energy Networks – District Heating
In the area of its district heating grids, SWM Infrastruktur
is actively contributing to the realisation of the vision ofa CO2-neutral heating supply for Munich. This includes
the development of strategies for future district heating
supply areas and transport pipes for geothermal energy.
These efforts are based on the district heating transformation plan. Plan preparation includes the identification of new customer potentials and grid extension
possibilities.
Conversion of large parts of the existing steam-operated
grid to hot-water operation is an indispensable prerequisite for a CO2-neutral heating supply. Among otherthings, this will involve modification of grid components
down to the customer station and their integration into
the new grid environment in large supply areas east andwest of the Isar river in the period until 2035.
Energy Networks – District Cooling
The supply of environmentally benign cooling is gaining
increasing importance for SWM Infrastruktur. In the
Munich downtown area, in particular, a well-developed
district cooling grid has already been installed. The
roll-out and expansion of this grid continued in 2023.
Water
SWM is actively engaged in preserving and protecting
the high quality of Munich’s drinking water directly inthe water extraction areas. It therefore collaborates
closely with the locals in those areas to keep springwater and groundwater clean. A key measure in thisrespect is the encouragement of organic farming andsustainable forestry. Furthermore, extensive measuresand investments are continuously required and implemented to maintain the extraction plants and the supply
infrastructure. Currently, plans are being drawn up forthe replacement of a feeder line between the Mangfall
valley and the village of Unterdarching. Extensive analyses will be carried out and expert opinions obtained
to safeguard drinking water extraction from the areaof moraine deposits east of Munich known as the­“Schotterebene” for the future and secure the existingwater rights.

A N N UA L R E P OR T 2023

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Mobility
MVG faced wide-ranging challenges in 2023. Not only
did the still prevailing aftereffects of the Covid pandemic
and the ensuing decrease in passenger numbers
continue to make themselves felt, but the “Deutschlandticket” – a special flat-rate public transport ticket offeredin a monthly subscription model – was not introduced
until May. This meant that MVG did not receive anycompensation payments either for the first four monthsof the year, which was the reason why it missed its
objective of breaking even. An emergency entrustment
adopted by the City of Munich for the purpose of
buttressing results makes it possible to offset the loss at
SWM in compliance with state aid legislation. Various
measures have secured the financing of the existing levelof service for the time being, with the rescue package
for local public transport companies playing a key role,
however. Due to the repercussions of the pandemic andconsequential effects such as increased use of remoteworking options (“home office”), passenger numbers
are still lower than during the pre-pandemic period, butthey continue to recover. In total, the Mobility division
had 4,679 employees as of 31 December 2023, of which
1,739 were at MVG.
Evaluations of customer surveys for 2022 and the firsthalf of 2023 showed that customer satisfaction scores
had taken a turn for the worse. The main reasons behind
this trend were the individually perceived sense of safety
during the pandemic and the fear of infections. As
passenger numbers began to rise again in 2023, there
have been indications that customer satisfaction will
return to its pre-pandemic level. A continuous rise indemand is still expected. For this reason, planning forthe future expansion of services continues (MVG services
campaign). Given the lack or inadequacy of funding
provided by the German federal government and theGerman states, especially the increase in regionalisation
funds, the implementation of these plans is, however,subject to the proviso that financing can indeed beobtained. In 2023, the funding gap prompted a revisionof the target of a 30 % public transport share in Munich
as well as a comparison with a share of 28 %. Decisions
on this scenario are still pending.
The introduction of the “Deutschlandticket”, which led
to high sales-related expenses and workloads, was also agame changer. At the same time, the delayed introduction of this monthly subscription ticket in May 2023 andthe ensuing lack of compensation payments in the first
four months of 2023 resulted in an income shortfall of
approximately EUR 47 million.

Nevertheless, we continue to plan for the mobility
transition. Our plans still provide for the expansion of
two-minute interval frequencies on particularly highly
utilised underground sections and the creation of
attractive tangential routes served by trams and express
buses. From a structural perspective, there is still anurgent need for the construction of a new “U9” underground route running from the Implerstrasse to theMunich Main Station and Münchner Freiheit stops andthe new northern and western tangential and “Munich
North” tram routes. In 2023, the services campaign
involved expenditures totalling around EUR 326 million
for underground, bus, and tram projects. Investments
mainly focused on the procurement of state-of-the-art
vehicles and the refurbishment and modernisation of theunderground infrastructure. The MVG Rad bicycle-rental
service continues to be a useful supplement of the “traditional” local public transport system. In the 2023 financial
year, MVG Rad recorded more than 270,000 registeredcustomers and some 710,000 rental transactions. We arepreparing a tender aimed at awarding a new contract forthe bicycle-rental system.
At the current juncture, it is not yet foreseeable when
there will be a sustainable resurgence in demand for
local public transport services under the current framework conditions. However, there are clear indications
that Munich’s local policymakers in principle remaincommitted to the mobility transition, despite the difficult
financial situation. Substantial investments will thus benecessary for a long time to meet the rising demand.
The need to refurbish underground facilities and replace
rail vehicles remains high; in addition, the approval andcommissioning procedures at the technical supervisory
authority are still complex. As existing depot capacities
for all areas of operation are fully utilised, capacities at
new or extended sites – and if necessary, also at decentralised locations – will gain increasing significance for
all areas of operation. Concrete planning processes arebeing driven forward for a second underground train
depot in the Neuperlach Süd neighbourhood and an
additional tram depot in the immediate vicinity of thecurrent main workshop on Ständlerstraße. The mostimportant task for the next few years will be to reliably
safeguard operating performance and quality andimprove it in line with requirements. At the same time,
the necessary construction and maintenance work mustbe handled in a manner ensuring customers’ continued
mobility. In particular, this means that greater efforts arebeing made to implement a wide range of measures torecruit and retain personnel in understaffed professions
such as drivers and workshop specialists.

3 4 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Telecommunications
Demand for higher bandwidth continued to increase in2023, which is why SWM has continued to drive forward
the expansion of a fibre-optic infrastructure. Over a
multi-year period, SWM has already invested several
hundred million euros in the provision of fibre-optic
broadband networks, inter alia in Munich, Augsburg,and Erlangen – in some cases jointly with infrastructure
partners. These networks permit Internet access withtransmission rates of up to 1,000 Mbit/s. In Munich,fibre-optic infrastructure (fibre-to-the-building – FTTB)
has gradually been rolled out in 24 city neighbourhoods,
hooking up approximately 32,000 buildings outside theMittlerer Ring beltway. Further investments were madein the linking of additional locations to a public WLAN
(WiFi) network.

In 2023, operating performance was still impacted byefforts to save energy. Accordingly, most pools andsaunas did not return to regular operation until the
beginning of the carnival school holidays. At this time,
the saunas opened their doors again and water tempe­
ratures at most indoor pools were once again increased
to normal levels. Visitor numbers and revenues, inparticular, were still at much lower levels than planned.
The reduction in operating costs offset only a smallpart of the decline in revenues. Higher prices and theimpact of collective bargaining agreements on personnel
expenses have also played a major role in this context.
Nevertheless, the trend in visitor numbers has been
positive after the Covid-induced crisis. The outdoor pools
even exceeded the mark of one million visitors, eventhough one of the pools was not available to the public.

In 2023, FTTB installation was completed in two additional Munich neighbourhoods. In the coming years,
the expansion of network level 4 (fibre optics from thebasement to the flat – FTTH) will be intensified in those
Munich areas already linked to the existing fibre-optic
network.

Children under twelve were again allowed free entry to
the outdoor pools in the summer of 2023.

One additional element of the telecommunications
strategy is SWM’s digital trunk radio network, which isdistinguished by high security standards.
In sum, the key task in 2023 was to expand a powerfuldata infrastructure even further with a view to enabling
residential and business customers to benefit from theuse of digital applications and technological evolution.
Public Pools
When regular operation is possible, M-Bäder public
pools offer bathers fun, sports, and relaxation all year
round and are thus leisure spots for guests with avariety of needs – from recreation to competitive sports.
Investments in the infrastructure and the continuous
further development of the pools’ facilities and services
will ensure that this will be the case in the future, too.
Important construction measures are on the agenda in
the coming years: the refurbishment/rejuvenation of theForstenrieder Park indoor pool including sauna facilities,
the refurbishment of the Georgenschwaige outdoor pooland its transformation into a CO2-free natural pool, therenovation of the entrance building of the Ungererbad
outdoor pool, including refurbishing of the ticket booths
as well as the changing, restroom, and staff areas, fire
protection enhancements, structural reinforcements,
and renovation of the copper roofs at the Volksbad
indoor pool, and renovation of the roof cladding andglass dome at the Westbad indoor pool.

Prinzregentenbad is still closed following the fire thatbroke out in this public pool in the previous year. Afterthe restoration of the fire damage, the sauna facilities
will now be refurbished in the next few years. The Georgenschwaige outdoor pool is also being refurbished andwill therefore remain closed. It is scheduled to reopen forthe 2025 summer season.
M-Bäder visitor trend
in thousands

4,000

3,666

3,483
3,039

3,000
2,000

1,641

1,540

2020

2021

1,000
0

2019

2022

2023

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Business situation
Results of operations
Revenues
SWM’s revenues decreased from EUR 10,629 million to
EUR 9,672 million.
Revenues and volume sales
Volume sales 2023

Revenues 2023 in kEUR

Volume sales 2022

Revenues 2022 in kEUR

Electricity (GWh)

22,197

3,718,208

31,004

3,885,736

Natural Gas (GWh)

62,754

3,727,639

94,385

4,787,408

District Heating (GWh)

4,060

786,769

4,401

653,48895

168,86597

170,992

Water (million m³)

548,756

Public Transport
Public Pools(thousand visitors)

3,483

18,438429,900
3,039

14,735

Telecommunications

271,441

266,945

Other

432,076

420,197

9,672,192

10,629,401

Despite a significant decline in volume sales, electricity revenues decreased only slightly, by 4.3 % to
EUR 3,718 million. Higher prices more or less offset
the decrease in volume sales.
Natural gas revenues went down by EUR 1,060 million to
EUR 3,728 million. This downtrend in revenues was bothvolume and price-related.
District heating revenues increased by EUR 133 million to
EUR 787 million, with volume sales decreasing by 7.7 %year-on-year in the 2023 financial year.
At EUR 169 million, water revenues remained virtually flatversus the previous year’s revenues of EUR 171 million.
An increase in revenues from EUR 430 million to
EUR 549 million was recorded in the underground, tram,
and bus services of the local public transport system.
At EUR 18 million, public pool revenues were again
significantly higher than the previous year’s revenues of
EUR 15 million.
In the highly competitive telecommunications market,
SWM maintained its successful performance with revenues of EUR 271 million, which even corresponded to aslight increase versus the previous year’s level of EUR 267.

Development of further significant items in theincome statement
Other operating income decreased by EUR 273 million
year-on-year, to EUR 564 million. One-time income ofEUR 263 million from settlement payments received
from banks in the previous year were the main driverof this downtrend. Movements in the opposite direction were recorded for income from the reversal ofprovisions (EUR +108 million), exchange rate gains
from foreign currency translation (EUR +10 million),income from the release of value adjustments onreceivables (EUR +16 million), and asset disposal gains(EUR +6 million).
Cost of materials decreased from EUR 8,727 million to
EUR 6,919 million. Lower procurement volumes were themain factor providing relief here.
Personnel expenses increased from EUR 924 million to
EUR 982 million. On a group-wide basis, the number of
employees (excluding trainees, temporary, and seasonal
workers) increased from an average of 10,647 to
10,851 in the fully consolidated companies. Furthermore,salary adjustments resulting from collective bargaining
agreements contributed to driving up expenses.
Amortisation and depreciation on intangible assets
and property, plant, and equipment amounted to
EUR 576 million. Scheduled write-downs accounted forthe entire amount.

36 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Other operating income went up from EUR 765 million to
EUR 1,008 million. This increase was mainly due to higher
expenses for variation margins.

Overall, investments in property, plant, and equipment and intangible assets decreased slightly, fromEUR 744 million to EUR 741 million.

Tax expenses
Taxes decreased from EUR 245 million to EUR 163 million.
The income tax burden contained therein went downfrom EUR 224 million to EUR 129 million, mainly due tonon-taxable income from the reversal of provisions.

Investments in property, plant, and equipment
and intangible assets

ProfitProfit before taxes amounted to EUR 819 million(previous year: EUR 528 million). Consolidated net
income after tax and before profit and loss transfer cameto EUR 657 million.

Public Pools

5,742

2,736

Telecommunications

56,24850,746

Operating result after adjustment for one-off effects
amounted to EUR 240 million in the financial year underreview, which corresponds to a year-on-year decreaseof EUR 216 million. Adjusted EBITDA went down from
EUR 1,055 million to EUR 815 million.
SWM’s financial result stood at EUR –22 million in 2023,
compared to EUR 35 million in the previous year. The
EUR 57 million decrease in the company’s financial result
was mainly due to a EUR 58 million decrease in income
from associated companies.
Net assets
SWM’s total assets decreased by 3,9 % year-on-year, to
EUR 12,837 million, in the year under review.
AssetsProperty, plant, and equipment went up fromEUR 7,163 million to EUR 7,290 million. This was mainly
attributable to investments in passenger transport vehicles,
above all underground trains. Financial investments went
down from EUR 1,840 million to EUR 1,800 million. Thiswas mainly due to a decrease of EUR 33 million for shareholdings in associated companies and a EUR 28 million
reduction in securities held as financial assets.
Overall, fixed assets increased by EUR 70 million to
EUR 9,201 million.
Due to the increase in fixed assets that contrasted withthe trend in total assets, SWM’s fixed asset intensity
increased from 68.3 % in the previous year to 71.7 %. The
shareholders’ equity in the balance sheet provides 70.9 %cover for the long-term assets tied up in the Group, up
from 64.7 % in the previous year.

in kEUR

2023

2022

Energy and Water

353,680

351,708

Mobility

231,515226,923

City of Munich Services
Central Services

028,394

94,05083,116741,235

743,623

In Generation, investments mainly focused on the newgas-and-steam turbines 1 and 2 in the “Süd” combinedheat-and-power (CHP) plant, continued operation of
the Freimann site, and the heating supply. In addition,
investments were made in the area of district cooling.
In Energy Networks, notable focal points of investment
were the expansion of distribution installations andnetworks for energy and water supply, the refurbishmentof transformer stations and building connections, as wellas customer connections and meter procurement.
Investments in the Mobility segment focused on theacquisition of vehicles, especially new undergroundtrains. Further investments concerned the modernisationof the Sendlinger Tor underground stop, digital radio
systems, as well as fire protection in the undergroundtrain system. In addition, investments were made in the
procurement of new motor vehicles and in escalator
replacement.
In Public Pools, investments mainly focused on the
refurbishment of the Georgenschweige public pool.
The bulk of investments in Telecommunications went
into the continued expansion of fibre-optic networks.
Current assets decreased from EUR 4,161 million to
EUR 3,576 million. A price-induced increase in tradeaccounts receivable of EUR 807 million was offset bya decrease in other assets of EUR 1,175 million, which
essentially corresponded to margin payments made.

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Group Management Report

Liabilities
As of 31 December 2023, shareholders’ equity amounted
to EUR 6,525 million. Including the equity sharescontained in the special items for investment and income
grants as well as in subsidies for construction costs,
SWM’s economic equity ratio decreased year-on-year to53.0 %.
Provisions decreased from EUR 2,981 million to
EUR 2,269 million. This was mainly attributable to the factthat provisions for contingent losses on hedging transactions went down by EUR 370 million and provisions foroutstanding invoices were EUR 155 million lower.
Liabilities decreased from EUR 3,947 million in theprevious year to EUR 3,516 million, the key driver beinga EUR 321 million decrease in bank borrowings and a
EUR 155 million decrease in trade accounts payable.
Financial position
Cash flow
Cash flow from operating activities amounted to
EUR 824 million. Alongside consolidated net income ofEUR 656 million, the key driver of the positive cash flow
was the non-cash balance of write-downs and write-ups
on fixed assets of EUR 601 million. The non-cash decreasein provisions of EUR 647 million had an opposite effect.
Other major effects in the area of operating activities
were attributable to a decrease in inventories, tradeaccounts receivable, and other assets (EUR +497 million)
and a decrease in trade accounts payable and otherliabilities (EUR –205 million) on the other.
The significant year-on-year increase in cash flow fromoperating activities was mainly due to cash-relevantchanges in the area of trade accounts receivable.
Cash flow from investing activities amounted to
EUR –482 million. Outflows for property, plant, andequipment (EUR 732 million) and intangible assets(EUR 9 million) primarily related to Generation, Energy
Sales, Mobility, and Telecommunications. Investments
in financial assets (EUR 171 million) mostly comprised
securities and loans. On the other hand, inflows from thesale of securities held as fixed assets and changes in the
consolidation group had a positive effect on cash flowfrom investing activities.
Cash flow from financing activities amounted to
EUR –404 million. Cash received from financial loans witha net amount of EUR 26 million and inflows into additional paid-in capital of EUR 52 million were mainly offset
by the profit transfer of EUR 74 million for the previous
year, the redemption of borrowings of EUR 343 million,
and interest payments of EUR 69 million.
In addition, reference is made to the detailed consolidated cash flow statement.
Liquidity
The negative cash flow of EUR –62 million in conjunction
with a EUR 25 million decrease in cash and cash equivalents due to changes in the consolidation group resulted
in a decrease in funds available at short notice fromEUR 564 million to EUR 477 million.
SWM’s ordinary operations result in price-change, interest-rate, and foreign-currency risks, which the Treasury
Unit partially hedges with derivative financial instruments. To the extent possible, derivatives are shown as
valuation units. In the financial year under review, SWM
was able to meet its financial obligations at all times.
On the reporting date, SWM had credit lines totalling EUR 1,269 million, with Stadtwerke MünchenGmbH accounting for EUR 1,056 million of this total.
EUR 73 million thereof can be drawn as both cash loans
or sureties and EUR 35 million as sureties only. On thereporting date, EUR 11 million of this total was drawn as
sureties only and EUR 5 million as credit lines that canbe used as both cash loans and sureties. Credit lines of
EUR 10 million revolve annually, while credit lines withtotal volumes of EUR 100 million, EUR 290 million, andEUR 500 million have maturities until February 2024,
31 December 2024, and April 2026, respectively.

38 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Target/actual comparison
Financial performance indicators
To ensure correct presentation of the operating business,
SWM uses operating earnings (EBIT) adjusted for one-off
effects for steering purposes. This approach involves
adjustments for expenses and income that are non-recurrent (e. g. unscheduled impairments), attributable toother periods, and outside of SWM’s control to ensurepresentation of the result of operations in a manner thatcan be compared over time. Adjusted EBIT amounted to
EUR 240 million in the financial year under review.
Total revenues were considerably below expectationsin 2023, which was attributable to lower electricity andgas prices, in particular. Despite these significant revenue
decreases, EBIT slightly exceeded expectations. Due toa much-improved neutral income, which was mainly
caused by the reversal of provisions, net profit after tax
was considerably higher than budgeted.
Non-financial performance indicators
SWM’s performance is not only reflected in economic
indicators, but also influenced by other factors. Indicators such as the trend in electricity generation fromrenewable energies and the number of employees play
an important role for SWM’s future development.

On average, the Group employed 11,637 staff membersin the fully consolidated companies during the2023 financial year (previous year: 11,468). This figure
can be subdivided into 10,851 employees (previous year:
10,647), 404 trainees (previous year: 462), 342 temporary staff (previous year: 317), and 40 seasonal workers(previous year: 42). The increase was in line withexpectations.
At the proportionately consolidated companies, 483 staff
members were employed (previous year: 474). This figure
can be subdivided into 445 employees (previous year:435), 24 trainees (previous year: 22), and 14 temporary
staff and seasonal workers (previous year: 17). Such adevelopment had been expected.
SWM’s electricity generation capacity from plants using
renewable energies decreased to 5,328 gigawatt-hours(previous year: 5,613 gigawatt-hours) and was thus
significantly below plan. Key reasons were the “Redispatch 2.0” curtailments in offshore wind parks and low
wind yields in 2023.
Overall statement
Operating profit (EBIT) after adjustment for one-offs andthe number of employees exceeded expectations, andnet income after tax significantly surpassed them. The
electricity volume generated in plants using renewableenergies decreased, but its contribution to net income
after tax was again very positive.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 39

Group Management Report

3. Forecast, Risk, and Opportunity Report
Forecast report
In its 2023 autumn report, the Joint Economic Forecast
Project Group of the ifo Institute assumes that higher
wages and falling energy prices will lead to a reboundin purchasing power despite political uncertainties. The
downturn will thus probably fade away, and utilisation
rates in the economy should rise again. Accordingly,
the year 2024 should be characterised by significantly
lower inflation rates, with a further downward trend
in inflation to follow in 2025. Against this background,the Project Group, in its autumn report, forecasts 1.3 %growth of Germany’s gross domestic product (GDP)in 2024. More recent economic forecasts such as the
economic outlook presented by the German Councilof Economic Experts (also known as the “Five Sages of
Economy”) anticipate less buoyant growth of 0.2 % andthus stagnation of the German economy in 2024.
As of the reporting date, SWM took the energy priceassumptions for all plan years and the new statutory
regulations or their drafts into account in the assumptions on which its plans for 2024 are based. The assumption is that energy prices will fall in the year that follows,
but remain above the levels recorded for many years
before the war. Overall, SWM anticipates a decrease inrevenues, which will essentially be attributable to falling
revenues in the Gas segment. Revenue gains in the highsingle-digit percentage range are expected in the Electricity segment. Assuming normal weather conditions inconjunction with unchanged customer behaviour, sales
volumes in the end customer business are expected toremain stable. A slight uptick in demand is expected in
the Mobility segment.
On this basis and from its current vantage point, SWM
envisages the 2024 EBIT adjusted for one-off effects toexceed the mark of EUR 600 million. Net profit after tax is
expected to be clearly in positive territory, but lower thanin the 2023 financial year. Due to rising operating costs
required for maintaining its performance capabilities andthe continuous expansion of its services in the Mobility
segment, SWM expects EBIT to remain stable in subsequent periods, but at a lower level than in the businessyear under review.
For 2024, SWM’s plans provide for an average numberof employees in fully consolidated companies thatexceeds the previous year’s level, mainly due to the risingnumber of employees in the Mobility segment. Electricity
generation from renewable energies will presumably bein the order of 6,000 gigawatt-hours.

Given Russia’s war of aggression and the increased political uncertainty, the forecast for the 2024 financial year
is subject to higher uncertainties as the future impact
cannot yet be foreseen at the current juncture.
Risk report
Risk management system
The objective of risk management at SWM is to ensure
the company’s long-term success by continuously monitoring and controlling significant risks.
Risk Controlling submits reports twice a year to the Risk
Committee and Management Board within the framework of systematic risk inventories. For key energy andfinancial market risks, the limits, positions, profits, andlosses are monitored daily in the respective IT systems.
In addition, there are specific channels for submitting
detailed reports to Specialist Risk Committees.
Treasury and Energy Trading use only products thathave been approved by the Risk Committees. Details of
the transactions carried out and hedged in the financial
markets and energy trading in 2023 as well as the derivatives and valuation units used are explained in the Notes.
Relevant credit risks are assumed only after a credit
quality analysis and are managed based on limits andframework agreements.
Risk position
SWM’s management has analysed the consequences of
Russia’s war of aggression, the associated volatile energy
prices, and the impact of these factors on the company’srisk exposures. SWM is continuously monitoring thedevelopments and announcements of the national
authorities and takes the measures required where
necessary.
Economic risks
Economic risks are mainly associated with the absence ofan economic recovery in China and the ensuing knock-on
effects on German industry, a worsening geopoliticalsituation, a renewed rise in energy prices, and a more
pronounced dampening of demand by monetary policy
than expected, or with spending restraint on the part ofconsumers. Furthermore, the economy might be affectedin the event of restrictions of physical energy deliveries
and the associated production restrictions.

4 0 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Energy market risks
Developments in the energy markets have a strong
impact on the results of operations at SWM. This may
be reflected in both operating results from current
business and the valuation of future transactions, e. g.
in the assessment of asset values and the calculation ofprovisions for contingent losses. In its trading activities,
in particular, SWM therefore pursues the objective ofidentifying and evaluating market-price and weather
risks resulting from the production, generation, and saleof electricity and gas as well as district heating and public
transport and hedging these risks in accordance with apredefined strategy.
Depending on the future development of Russia’s war of
aggression and trends in the energy markets, elevatedenergy market risks exist; in particular, such risks may
arise from the resultant market price developments andthe associated valuation of assets and debts. In the eventof a significant rise in energy prices, supplier defaults
would lead to substantial replacement costs. The dismantling of the “Isar 2” joint power station involves cost risks
for which the plant’s owners, PreussenElektra GmbHand SWM, are liable. The dismantling costs expected at
the current juncture are fully covered by the associatedprovisions.
Financial risks
Volatile equity prices, interest rates, and exchange rates,
e. g. due to political uncertainties, can negatively impact
SWM’s financial position and results. In addition, they
are reflected in the valuation of assets and liabilities.
SWM’s Treasury Unit aims at centrally pooling thefinancing, investment, and foreign currency risks. The
investment policy is based on diversified and, hence,risk-reducing asset allocation. The use of derivatives
serves the purpose of mitigating risks associated withthe underlying transactions and stabilising cash flows.
As long as the uncertainties resulting from Russia’s warof aggression against Ukraine persist, elevated financial
risks continue to exist due to significantly more volatile
markets and the associated valuation of assets.
Thanks to its good liquidity and the credit lines available,
SWM has been able to completely cover its financial
requirements at all times and continues to classify
liquidity risks as very small.

Political and regulatory risks
Political guidelines at the European, national, and municipal levels are relevant for SWM in all areas. They may
lead to cost increases in Networks and Generation due
to more stringent requirements. In addition, there is therisk of further interventions in the energy markets aimed
at financing the impact of higher energy prices and thegovernment’s ensuing relief measures. Changes in the
tax framework may also have a negative impact on SWM.
Changed framework conditions, e. g. in the area ofstate investment subsidisation for the increasingly
significant refurbishment of transport facilities, may leadto unforeseeable difficulties in the financing of public
sector transport. The impact of digitalisation and thediscussions about changes in pertinent legal framework
conditions, especially the German Passenger Transport­
ation Act (Personenbeförderungsgesetz; PBefG), must be
influenced proactively to the extent possible. According
to the current assessment, there is not least a considerable risk that the service range expansion required forthe mobility transition may prove impossible to implement for economic reasons.
SWM counters these risks through transparency and aproactive information policy in the relevant associationsand vis-à-vis decision-makers.
Legal and compliance risks
SWM’s operating activities involve legal risks arising fromcontractual relations with customers and other business
partners. In addition, authorities and courts may intervene in pricing. The requirements of the German Energy
Industry Act (Energiewirtschaftsgesetz; EnWG) and theassociated ordinances along with regulatory authorities’
activities may have a negative financial impact. Authorisation procedures for technical installations may giverise to legal risks that have a negative economic effect on
operations.
In addition, there are compliance risks, e. g. in the areasof corruption, antitrust law, and data protection. Theserisks are addressed with prevention measures such as
training workshops and internal policies that are coordinated on a group-wide basis.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 41

Group Management Report

Operational and technical risks
SWM constructs plants for generating and distributing
energy and water. The technological complexity of theseplants involves technological and time-related risks aswell as cost and authorisation risks. There is an elevatedrisk of resource bottlenecks and time delays, e. g. due tolack of skilled employees, which may lead to higher costs.
Furthermore, there are technical risks in the areas of thetransport infrastructure and transport supplies. The risksof existing plants are minimised through regular maintenance, high safety standards, emergency plans, andmany other quality assurance measures and independent
audits.
In addition, the situation currently prevailing in theenergy market continues to give rise to the risk thatprocured gas or coal volumes cannot even be delivered
physically, making it impossible to guarantee supply
reliability for our electricity, gas, and district heating
customers.
Participating interests in renewable energies involverisks arising from new technologies and realisation
concepts. SWM counters these risks by choosing its
locations carefully, carrying out due diligence checks,
using leading technologies, commissioning experts, andmaintaining a diversified portfolio. In the realisationand operation phase, risks are managed through closemonitoring or representation on the management teamsof the respective participations.
Gas production bears technical risks that are reducedby collaborating with experienced companies andmaintaining a diversified portfolio. Technological andproject-specific risks can be controlled, but not eliminated. For risk diversification purposes, SWM therefore
cooperates with Centrica plc, Windsor (United Kingdom),in gas production via the Spirit Energy joint venture.
Spirit Energy’s portfolio has been reduced, so essentiallyonly its UK and Dutch business that is focused on natural
gas and the associated risks remain.
Sales and procurement risks
In all business units of SWM, there is a risk of external
influences triggering a decline in revenues. Specifically,
the sale of district heating and natural gas depends on
the temperatures prevailing in the winter months. In
addition, the general economic situation gives rise to
the risk of elevated payment defaults of residential andbusiness customers triggered by impending insolvencies. On the other hand, the procurement of materials,

services, and supplies may be disrupted by external
factors, resulting in cost increases as well as delivery
delays and failures. As long as the energy markets remain
as volatile as they are now, elevated sales and procurement risks will continue to exist, which may be reflected
in decreasing revenues and rising expenses.
Personnel risks
SWM is seeing signs of a tightening labour market fortechnical and commercial professions as well as specialist
functions in spite of the stream of people moving to
the Munich area. SWM is proactively addressing thesechallenges with new forms of recruiting and employer
marketing. Target-group-specific candidate attraction
and retention along with targeted talent management
aim to ensure the staffing of specialist and managerial
positions.
IT and information security risks
As an operator of critical infrastructure, SWM faces therisk of becoming the target of deliberate attacks on
information security. SWM applies technological, physical, and organisational measures to counter potential
threats that might affect confidentiality, integrity, oravailability of information. Critical information systems,
including the information and communications infrastructure components supporting them, are based on
redundant design. In addition, SWM has implementeda systematic disruption and emergency management
system based on pertinent industry standards. At thesame time, the high requirements for IT security in thearea of critical infrastructure give rise to the risk that thecompany may fail to satisfy legal obligations to provide
supporting documents.
The high complexity and interdependence of IT systems
give rise to the risk of an inability to comply with envisaged solution times in the event of disruptions. This risk iscountered with organisational measures.
Overall assessment
No risks that might pose a potential threat to thecontinued existence of SWM as an ongoing concern
arose in 2023, and none have been identified for 2024.
Elevated risks will continue to exist as long as the uncertainties arising from Russia’s war of aggression against
Ukraine persist.

42 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NGroup Management Report

Opportunity report
The goal of the group strategy is to make progress
towards SWM’s vision of “Munich as a shining example
of a networked city with a high quality of life“ and to steer
SWM’s business development in this direction. Its implementation aims at securing long-term economic success.
Now that the market situation has returned to normal,
the positive perception of SWM that has grown overmany years gives the company a good chance to winback lost customers in Munich and the surrounding
region. The people moving to Munich and the continued
population growth in the region provide SWM with anexcellent starting position for a further expansion of its
business with residential and business customers. Further
opportunities exist with respect to the retention ofexisting customers that move from the city of Munich to
the region.
Thanks to Munich’s dynamic urban development, SWM
can continue to pursue the expansion of its district
heating and district cooling offers. The requirements of
the heating transition are creating market opportunities
in the development of eco-friendly utility services forhousing developments and neighbourhoods. A further
focus area supplementing district heating and districtcooling is the supply via heat pumps and local heating
networks.

Increasing awareness of climate and environmental
protection issues is basically benefiting local public transport as a resource-efficient mobility alternative. As far as
economically possible, MVG will continue to expand its
range of services as part of its services campaign to meetthe increase in demand that is expected in the long term.
With add-on products and user-friendly apps that aim
to interlink environmentally benign means of transport,
MVG plays its part as multimodal mobility service
provider for Munich.
To the extent to which this is operationally feasible,
MVG will continue its vigorous efforts to implement theelectrification of local public transport, especially also
the bus and passenger car fleets within the framework of
the renewable energies expansion campaign.
Digitalisation and growing demand for future-proof telecommunications solutions create opportunities for SWM
to maintain its competitive position in the prevailingmarket environment through further expansion of thefibre-optic infrastructure along with continuous adjustment of the product portfolio.
Since 2004, Munich‘s population has increased by over
20 % to nearly 1.6 million, and it continued to increaseslightly in 2023. SWM has the opportunity to grow alongwith the ever-expanding Munich metropolitan region byoffering its utility services and infrastructure solutions.

To seize the opportunities arising from the energy
transition, SWM will drive forward its renewable energies
expansion campaign, both regionally and in Europe, andcontinue to bank on economically viable projects. The
expansion of renewable energies not only contributes
to climate protection but can also help achieve greater
independence from fossil fuels and their suppliers.

Munich, 22 March 2024

On the one hand, the trend towards decentralisation of
the energy supply gives rise to risks for our market sharesin grid-bound energies; on the other, it above all offers
considerable growth opportunities. This is the reason why
SWM is significantly expanding its product and service
range in the area of decentralised energy solutions (e. g.
photovoltaic plants and storage systems). To supplement
its M-Solar Plus photovoltaic offer for homeowners,
SWM is expanding its electricity portfolio for tenantsby cooperating with various housing companies for thispurpose. In addition, SWM is developing M-Wärme Plus, acomprehensive heat pump package that includes on-siteenergy counselling, grant application services, heat pumpinstallation, and electricity generation. In the growing
electromobility market, SWM plans to continue to seize
the resulting opportunities by offering differentiatedcharging solutions to all customer segments and charging
facilities in private and semi-public spaces.

Dr Florian Bieberbach
Chief Executive
Officer

Ingo Wortmann
Director,
Mobility

Helge-Uve Braun
Director,
Technology

Dr Karin Thelen
Director,
Regional Energy Transition

Stadtwerke München GmbHDr Gabriele Jahn
Director,
Human Resources,
Real Estate and Public Pools

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 43

Consolidated Financial Statements

Consolidated
Financial Statements
Consolidated Balance Sheetin kEUR

Notes

31 Dec. 2023

31 Dec. 2022

AssetsNon-current assets

1

Intangible assets
Property, plant, and equipment
Financial assets

111,357

127,284

7,289,542

7,163,475

1,800,100

1,839,972

9,200,999

9,130,731

2

329,271

269,430
3,327,316

Current assets
Inventories
Receivables and other assets

3

2,769,674

Securities

4

50,055

26,137

Cash in banks

5427,422538,183

3,576,422

4,161,066

Prepayments and accrued income

657,912

68,218

Positive difference of plan assets overpension liabilities

7

2,043

99

12,837,376

13,360,114

Equity and liabilities
Shareholders’ equity

8

Subscribed capital

485,000

485,000

Additional paid-in capital

6,055,062

5,700,946

Retained earnings–261,232–537,861

Non-controlling interests

245,806

259,104

6,524,636

5,907,189

6,333

9,507

Difference arising from capital consolidation
Special item for investment grants

9

101,595

91,735

Income grants received

10

118,965

117,823

Provisions and accruals

112,269,043

2,981,053

Liabilities

12

3,516,475

3,947,453

Deferred income

13

222,226

233,817

Deferred tax liabilities

14

78,103

71,537

12,837,376

13,360,114

4 4 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NConsolidated Financial Statements

Consolidated Income Statementin kEUR

Notes

Revenues

2023

2022

9,864,987

10,838,130

Electricity tax–81,472–92,873

Energy tax–111,323–115,856

9,672,192

10,629,401

–837

3,185

Revenues, excluding electricity and energy tax

15

Increase or reduction in inventories of finishedgoods or work-in-progress
Other capitalised own work
Other operating income

90,63479,29616564,314

837,492

Cost of materials

176,919,167

8,726,757

Personnel expenses

18

982,133

924,461

Depreciation and amortisation

19575,689

640,681

Other expenses

20

1,007,974

764,711

Financial result

21–21,891

35,359

Income tax

22

Net income
Other taxes

224,380
303,743

33,88921,118Equalisation payment to non-controlling interests

956

956

Consolidated net income before profit transfer

655,864

281,669

410,884

74,082

Consolidated net profit (previous year: loss)

244,980

207,587

Profit (previous year: loss) attributable to­non-controlling interests–13,616–8,994

Profit transferred as a result of a profit transfer
agreement

22

128,740
690,70923

Consolidated profit

231,364

198,593

Payment into retained earnings–231,364–198,59300Consolidated cumulative profit/loss

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 45

Consolidated Financial Statements

Consolidated Cash Flow Statementin kEUR
Consolidated net income (before profit transfer and including profit/loss
attributable to non-controlling interests)

2023

2022

655,864

281,669+/– Depreciation netted with write-ups for fixed assets

601,203

601,163+/– Increase/decrease in provisions–647,309

285,155+/– Other non-cash-effective expenses/income–18,117

9,650

Increase/decrease in inventories, trade accounts receivable, as well as other assets not–/+ classified as investing or financing activities

497,181–1,507,146

Increase/decrease in trade accounts payable and other liabilities not classified+/– as investing or financing activities–205,191

422,405

1,176

25,615–/+ Profits/losses from the disposal of fixed assets+/– Interest expenses/income

38,287

41,813––29,105–32,521+/– Income tax expenses/credits

128,740

224,380–/+ Income tax payments–198,298–135,704

824,431

216,479

Other income from equity investments

Cash flow from operating activities+

Inflows from disposals of property, plant, and equipment–

Outflows for investments in property, plant, and equipment

7,698

5,840

–731,807–739,848+

Inflows from disposals of intangible assets

4

1,456

–

Outflows for investments in intangible assets–9,428–3,775+

Inflows from disposals of financial assets

275,940

448,826–

Outflows for investments in financial assets–171,391–22,952+

Inflows from diposals from the consolidation group80,6010+Interest received

37,30816,291+Dividends received

29,10532,521–481,970–261,641

Cash flow from investing activities+

Inflows from additions to shareholders’ equity

52,27749,281+

Inflows from net borrowings

26,01858,331–

Outflows for the redemption of borrowings–342,665–74,648+

Inflows from grants received

20,71230,517–

Interest paid

–69,199–43,774–

Outflows to shareholders of the parent company–74,082–100,000+/– Contributions from/payments to other shareholders–17,033–6,588Cash flow from financing activities–403,972–86,881

Net change in cash and cash equivalents–61,511–132,043

Changes in cash and cash equivalents due to consolidation group–25,332

10,089Cash and cash equivalents at the start of the period

564,320686,274

Cash and cash equivalents at the end of the period

477,477

564,320

2023

2022

Liquid assets

427,422538,183

Securities held as current assets

50,055

26,137477,477

564,320

Breakdown of cash and cash equivalents
in kEUR

4 6 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E NConsolidated Financial Statements

Schedule of Consolidated Shareholders’ Equity

Parent company

in kEUR

Subscribed
capitalAdditional
paid-in
capitalRetainedearnings

Share­holders’equitycurrencytranslationdifferences

As of 31 Dec. 2021

485,000

5,651,665–648,935–15,746

Cumulativeloss/profit

Share­
holders’equity05,471,984

Consolidated result
before profit transfer

272,675

272,675

Profit transfer–74,082–74,082

Consolidated net loss/
net income

198,593

198,593

Payment into additional paid-in capital

49,281

Transfer of cumulative
profit49,281
198,593

Currency translationdifferences
Other changes–50,258–198,593–21,308–21,308–207–50,465

Changes in the­consolidation group0

Other changes in
non-controllinginterests
As of 31 Dec. 2022

00
485,000

5,700,946–500,600–37,26105,648,085

Consolidated result
before profit transfer

642,248642,248

Profit transfer–410,884–410,884

Consolidated net
income/net loss

231,364

231,364

Payment into
­additional paid-in
capital363,161

Transfer of cumulative
profit363,161
231,364

Currency translationdifferences–231,364
24,119Other changes–9,045

21,146

6,055,062–248,090

24,11912,101Other changes in
non-controllinginterests
As of 31 Dec. 2023

00
485,000–13,14206,278,830

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 47

Consolidated Financial Statements

Consolidated­shareholders’ equity

Non-controlling interests
Non-controllinginterests before
shareholders’ equity
currency translationdifferences andnet income

Shareholders’equity currencytranslationdifferences allocable
to non-controllinginterests

Profit allocable tonon-controllinginterests

Total

217,112790–27,757

190,145

5,662,129

8,994

8,994

281,6690–74,082

8,994

207,587049,2810000–21,308207

50,4650

16,08816,088

8,994

50,25816,088–34,345
249,113997

27,757–6,588–6,588

8,994

259,104

5,907,189

13,616

13,616

655,8640–410,884

13,616244,9800363,16100024,119–9,881

2,220

13,6160–9,881–8,039231,193997–8,994–17,033–17,033

13,616245,806

6,524,636

4 8 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

Notes
General information
Stadtwerke München GmbH (the parent company) is headquartered in Munich and registeredin the Commercial Register of the Munich Local Court (HRB 121920).
The consolidated financial statements for the 2023 financial year have been prepared inaccordance with the German Commercial Code (Handelsgesetzbuch; HGB) and the supplementary provisions of the German Limited Liability Companies Act (GmbH Gesetz) and incompliance with the German Accounting Standards (Deutsche Rechnungslegungs Standards;
DRS) published by the Accounting Standards Committee of Germany (Deutsches Rechnungs­
legungs Standards Committee e. V.; DRSC). Due consideration has also been given to therequirements of the German Energy Industry Act (Energiewirtschaftsgesetz; EnWG).
The structure of the consolidated financial statements has been extended to include utility
and transportation-specific items.
Items in the consolidated balance sheet and the consolidated income statement have been
aggregated to provide clarity and better information; these items are shown separately in thenotes to the financial statements.
The nature of expense method has been used to prepare the income statement.

Consolidation GroupIn its capacity as parent company, Stadtwerke München GmbH prepares its consolidated ­financial
statements in accordance with Sections 290 et seqq. HGB. Pursuant to Section 313 (2) HGB, a
breakdown of the shareholdings of Stadtwerke München GmbH Group showing the companies
included in the consolidated financial statements has been enclosed with the notes to thefinancial statements.
In addition to Stadtwerke München GmbH, in its capacity as parent company, the consolidated
financial statements on the reporting date comprised the financial statements of 34 (previous
year: 35) fully consolidated subsidiaries in which Stadtwerke München GmbH directly or
indirectly holds a majority of voting rights.
As of 1 January 2023, LHM Services GmbH was deconsolidated due to the sale of the shares
held in this company to the City of Munich.
On the reporting date, four (previous year: four) companies were proportionately consolidated
in accordance with Section 310 HGB.
In addition, five (previous year: five) participations in associated companies have been
included in the consolidated financial statements at equity in accordance with Sections
311 and 312 HGB, because included companies have a major impact on their business andfinancial policies.
A total of 18 (previous year: 18) affiliated companies without operations or with only minor
business volumes are not included in the consolidated financial statements in accordance with
Section 296 (2) HGB. Further equity participations which, from the point of view of the Group,
are of minor significance for providing a true and fair view of the net assets, financial position,and results of operations are shown as financial investments in the consolidated balance sheet.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 49

Notes

SWM Services GmbH, a subsidiary and simultaneously the parent company of M-net­Telekommunikations GmbH (M-net), is included in the consolidated financial statements ofStadtwerke München GmbH (HRB 121920) and is accordingly not required to prepare separate(subgroup) consolidated financial statements in accordance with Section 291 (1) and (2) HGB.
SWM Gasbeteiligungs GmbH, a subsidiary and simultaneously the parent company of SWM
Bayerische E&P Beteiligungsgesellschaft mbH and Bayerngas GmbH, is included in the consolidated financial statements of Stadtwerke München GmbH (HRB 121920) and is accordingly not
required to prepare separate (subgroup) consolidated financial statements in accordance with
Section 291 (1) and (2) HGB.
SWM Erneuerbare Energien Norwegen GmbH, a subsidiary and simultaneously the parent
company of Midgard Vind Holding AS, is included in the consolidated financial statements ofStadtwerke München GmbH (HRB 121920) and is accordingly not required to prepare separate(subgroup) consolidated financial statements in accordance with Section 291 (1) and (2) HGB.
SWM Erneuerbare Energien Skandinavien GmbH & Co. KG, a subsidiary and simultaneously theparent company of Austri Raskiftet DA and Austri Kjølberget DA, is included in the consolidated financial statements of Stadtwerke München GmbH (HRB 121920) and is accordingly not
required to prepare separate (subgroup) consolidated financial statements in accordance with
Section 291 (1) and (2) HGB.

Consolidation principles
The consolidated financial statements and the annual financial statements of the companies
included have been prepared as of the reporting date of the annual financial statements of theparent company (31 December 2023).
The annual financial statements of the companies included in the consolidated financial
statements have been prepared in accordance with uniform accounting policies, taking
account of the specific requirements applicable to the sector. The company also implemented
any further adjustments to standard Group accounting and valuation that were required. The
same consolidation principles are applicable on a pro-rata basis to those companies included
proportionally in the consolidated financial statements.
Participations in associated companies are shown as a separate item in the consolidatedbalance sheet. As a basic principle, the associated companies use the harmonised accounting
and valuation methods throughout the Group. The subgroup financial statements of theassociated companies wpd europe GmbH and Spirit Energy Limited and the annual financial
statements of Aneo Roan Vind Holding AS apply valuation methods that differ from those
applied in the consolidated financial statements.
Capital consolidation
For companies initially included before 1 January 2010, capital has been consolidated bymeans of the carrying amount method by netting the carrying amounts of first-time investments with the proportionate shareholders’ equity of the respective subsidiaries and joint
ventures at the time when they were acquired or initially included.

50 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

For companies initially included or transferred to full consolidation after 1 January 2010,
capital has been consolidated by means of the revaluation method by netting the shareholdings’ book values with the proportionate revalued shareholders’ equity allocable to the parent
company in accordance with Section 301 HGB.
Goodwill and negative difference attributable to initial consolidation
The positive differences arising in capital consolidation in previous years were recognised as
goodwill and are, as a basic principle, amortised in scheduled amounts over periods of five to
16 years using the straight-line method.
The negative difference resulting from the first-time consolidation of SWM Wind Havelland
will, in line with the remaining life of the wind park, be amortised over a period of four years
using the straight-line method.
Non-controlling interests
Minority interests in consolidated net income are allocated to the non-controlling interests
within shareholders’ equity.
Debt consolidation
Inter-company receivables, liabilities, provisions, and accrued and deferred items are offset or
eliminated (Section 303 HGB).
Internal expenses and income
Internal income and expenses between the consolidated companies were netted(Section 305 (1) HGB). Inter-company profit and loss transfers in the financial year underreview were also eliminated.
Treatment of inter-company results
Inter-company results attributable to internal supplies, deliveries, and services were eliminatedunless they are of minor significance (Section 304 (2) HGB).
Foreign currency translations
The balance-sheet items of subsidiaries’ financial statements denominated in foreign currencies were translated into EUR at the average spot exchange rate as of the reporting date or, inthe case of the “shareholders’ equity” item, at the historical exchange rate. Income statement
items are, as a basic principle, translated at average exchange rates. Any differences arisingfrom the translation of the balance sheets due to the translation of the “shareholders’ equity”
item at historical exchange rates and the “net income” item item at average exchange rates
are, as a basic principle, recognised in shareholders’ equity with no effect on the income
statement.

Accounting policies
Non-current assets
Intangible assets acquired for a monetary consideration are shown at cost and amortisedusing the straight-line method over the economic life of the assets. Impairments are recognised if they are considered to be of a permanent nature.
Goodwill resulting from capital consolidation is, as a basic principle, amortised in scheduledamounts over periods between five and 16 years using the straight-line method. Impairments
are recognised if they are considered to be of a permanent nature.
Property, plant, and equipment are recognised at cost of purchase or production, without
consideration of borrowing interest, less scheduled depreciation and unscheduled impairments. The capitalised own work contained therein comprises cost of labour, cost of materials,
machine output and haulage, and appropriate portions of overheads.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 51

Notes

Scheduled depreciation is applied primarily on a straight-line basis using normal usefuloperating lives. Assets acquired during the course of the year are subject to pro-rata-­temporis
depreciation. In the case of existing declining balance depreciation, the method used ischanged to the straight-line method as soon as such a change results in higher levels ofdepreciation.
From 2010 through 2020, public capital grants received were deducted from the asset balance
if the company in question was both the recipient of the subsidy and the owner of the asset.
Prior to 2010 and since 2021, new investment grants were and have been recognised as a
special item. Where the recipient of the subsidy is not the owner of the asset at the same time,
public capital grants are recognised as deferred income and written off using the straight-line
method.
Costs of purchase or production of independently usable depreciable movable non-current
assets are immediately expensed in the year of acquisition if their costs of purchase or­production, adjusted for input VAT, do not exceed EUR 800.00 (previous limit applicable from2018 to 2021: EUR 250.00).
Under financial assets, equity investments are recognised at cost and lendings are posted attheir nominal value. If the impairment is permanent, they are written down to the lower fairvalue as of the reporting date. If the reasons leading to lower valuation no longer apply on thereporting date, a write-up to a level not exceeding the carrying amount is posted.
Current assets
Raw materials and supplies including unfinished products and services, finished products andgoods, and advance payments made on inventories are consistently recognised at the lower ofmarket value or cost. Reasonable valuation adjustments are applied to inventory risks resulting
from storage duration and diminished marketability.
Receivables and other assets are shown at nominal value less any impairments reflecting
actual default risk.
Receivables due to affiliated companies are netted with liabilities due from affiliated ­companies
if a netting situation pursuant to Section 387 of the German Civil Code (BGB) exists.
In individual Group companies, no current meter data is available for some of the customers
at the reporting date due to the rolling annual meter reading approach used. This makes
it necessary to calculate annual consumption accruals at the reporting date on the basisof current prices and an assumed consumption behaviour. The relevant receivables wereextra­polated as of 31 December 2023 and recognised after netting with advance payments
received from customers.
The securities included among current assets are consistently recognised at the lower of costor market value.
Loans with a term of less than one year that have been extended to affiliated companies
and companies in which participating interests are held are reported as accounts due fromaffiliated companies and accounts due from companies in which participating interests areheld. For terms between one and four years, reporting is based on the company’s intention to
hold the loans in question. Loans with terms of at least four years are reported under financial
assets.
Cash at banks is recognised at nominal value.

52 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

Prepayments and accrued income
Prepayments and accrued income include expenditures realised before the reporting date to
the extent that they comprise expenditure for a particular time after this date.
Positive difference of plan assets over pension liabilities
At various Group companies, reinsurance policies exist for pension liabilities or comparable
obligations due over a long-term horizon, which are excluded from all other creditors’
recourse and serve exclusively to satisfy these obligations. For semi-retirement and sabbaticalobligations, various companies have transferred assets serving exclusively to satisfy theseobligations and excluded from all other creditors’ recourse (which are both cover assets within
the meaning of Section 246 (2) sentence 2 HGB) to a trustee. The relevant assets comprisesecurities and credit balances in current accounts and are recognised at their fair value, as
stipulated in Section 253 (1) sentence 4 HGB. Accordingly, the liabilities are netted with the fairvalue of the cover assets as stipulated in Section 246 (2) sentence 2 HGB. If the fair value of thecover assets exceeds the liabilities, the overfunding is capitalised in a separate item, “positive
difference of plan assets over pension liabilities”, pursuant to Section 246 (2) sentence 3 HGB in
conjunction with Section 266 (2) HGB.
Shareholders’ equity
The subscribed capital is recognised at nominal value.
Special item
Capital grants in relation to fixed assets received before 2010 and newly received capital
grants in relation to fixed assets since 2021 are shown as a special item for investment grants.
They are shown at their nominal value less the proportionate reversal recognised in theincome statement, with due consideration being given to the useful economic life of the asset.
The capital grants received in the period from 2010 through 2020 were deducted from assets.
Income grants received
Construction cost grants received for electricity and gas grids from 2016 and 2017 onwards,
respectively, are shown in this item. They are released concurrently to the write-down of theassets for which the grants were paid.
Provisions
Pursuant to Section 253 (1) sentence 2 HGB, provisions are recognised at the amount required
for settlement according to prudent commercial judgement. Provisions with residual terms of
more than one year are, as stipulated in Section 253 (2) HGB, discounted using the maturity-­
matched average market interest rates for the past seven financial years as published by
Deutsche Bundesbank in accordance with to the German Regulation on the Discounting ofProvisions (Rückstellungsabzinsungsverordnung; RückAbzinsV).
Actuarial expert opinions applying Prof Dr Klaus Heubeck’s 2018 G guideline tables have beenobtained for all pension provisions as well as provisions for anniversary bonuses and benefit
payments.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 53

Notes

The calculation of pension provisions is based on the parameters set forth below:

Actuarial calculation method

Civil servants andsalaried employees

Employees notcovered bycollective wage
agreements

Net present value
methodProjected unit
credit method

Interest rate in accordance with the RückAbzinsV for the
past 10 years in %
2023

1.83

1.83

Previous year (2022)(1.79)(1.79)

Interest rate in accordance with the RückAbzinsV for the
past 7 years in %
2023

1.76

1.76

Previous year (2022)(1.45)(1.45)EUR 200 + 5.50 %

–

10.00

–

Salary and benefits growth in %2024 (TV-V collective wage agreement for utilities)
2024 (all others)
From 2025 (all)

2.00

–

(2.00 – 6.00)

–

2023

0.50

–

Previous year (2022)(0.50)–EUR 200 + 5.50 %–2024 (all others)

10.00

2.00

From 2025 (all)

2.00

2.00

(2.00 – 6.00)(2.00)

5,552

20

Previous year (2022)
Career trend in %Pension growth in %2024 (TV-V collective wage agreement for utilities)

Previous year (2022)
Difference of plan assets over pension liabilities pursuant
to Section 253 (6) HGB in kEUR

Pursuant to the procedure stipulated in the German Regulation on the Discounting ofProvisions (RückAbzinsV), the actuarial interest rate under commercial law is derived froman average residual term of 15 years. In accordance with Section 253 (2) HGB, the actuarial
interest rate for the valuation of pension liabilities is based on the average market interest
rate for the past ten years.
In a letter dated 23 December 2016, the German Federal Ministry of Finance published its
statement on the effect of Section 253 HGB (new version) on the recognition of single entities
deemed to exist for tax purposes. As a single entity is deemed to exist for tax purposes, thedifference pursuant to Section 253 (6) HGB is not barred from transfer to the shareholder.
In accounting, pension liabilities due to employees not covered by collective wage agreementsthat are determined solely by the fair value of a reinsurance policy must be treated like pension
commitments that are linked to securities. This means that pension commitments covered bybenefits-congruent reinsurance policies are also valued in accordance with Section 253 (1)sentence 3 HGB, even though the claims arising from a reinsurance policy formally do notconstitute securities held as fixed assets within the meaning of Section 266 (2) A. III. 5 HGB.
A reinsurance policy can be classified as benefits-congruent when both the amounts and thetiming of payments made under such policy are identical to the payments made to the beneficiaries entitled to pension payments (cf. the IDW RS HFA 30 standard promulgated by theInstitute of Public Auditors in Germany, new version, marginal No. 74). Since 31 December 2022,
the regulations of the IDW RH FAB 1.021 standard have also been taken into account.

5 4 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

Reinsurance policies exist for pension liabilities due to employees not covered by collective
wage agreements in the core companies. These policies are recognised at fair value pursuant
to Section 253 (1) sentence 4 HGB, with some of them being pledged to the retired employees.
Until 31 December 2021, the fair value of new policies corresponded to the amortised cost. Since
1 January 2022, new policies are concluded only as unit-linked reinsurance policies (i.e. they arelinked to securities). In these cases, the fair value corresponds to the market price. Accordingly,
these liabilities are netted with the asset value of the reinsurance cover, as stipulated in Section
246 (2) sentence 2 HGB. On balance, this results in both pension provisions and asset values in
the financial year under review, with the latter being capitalised under other assets.
The calculation of provisions for semi-retirement, anniversary bonuses, and benefit payments
is based on the parameters set forth below:

Semi-retirement

Actuarial calculation method

Net present value
methodAnniversary
bonuses

Benefitpayments

Net present value
methodNet present
value method
without minimum
ageInterest rate in accordance with the­RückAbzinsV for the past 7 years in %
2023

1.00

1.76

1.76

Previous year (2022)(0.42)(1.45)(1.45)

2024 (employees subject tocollective wage agreements)

EUR 200+ 5.50 %;min. EUR 340––

2024 (civil servants, employees not covered bycollective wage agreements)

6.50 – 10.00

–

–

2.00

–

–

(2.00 – 4.00)

–

–

2024

–

2.00

–

From 2025

–

2.00

–

Previous year (2022)–(2.00 – 4.00)–

2024 (employees subject tocollective wage agreements)–

EUR 200+ 5.50 %;min. EUR 340–

2024 (civil servants, employees not covered bycollective wage agreements)–

6.50 – 10.00–

From 2025

–

2.00

–

Previous year (2022)–(2.00 – 4.00)

–

2024

–

–

5.00

From 2025

–

–

2.50

Previous year (2022)––(5.00)

2024

–

–

10.00

From 2025

–

–

2.00

Previous year (2022)––(5.00)

Salary and benefits growth in %From 2025
Previous year (2022)
Trend in contribution ceiling in %Remuneration growth in %Trend in contribution cost in %Trend in net present value premiums in %

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 55

Notes

The calculation of provisions for semi-retirement is based on an average time to maturityof one year. Payment arrears, top-up amounts, and lump-sum settlements were taken into
account in the calculation. In accordance with Section 246 (2) sentence 2 HGB, provisions forsemi-retirement are netted with the asset value of the reinsurance cover.
In the financial year under review, a material provision for lifetime work accounts (sabbaticals)
was set aside for the first time. The value of this provision corresponds to the time credits
accrued plus the associated employer share of the total social security contribution. In accordance with Section 246 (2) sentence 2 HGB, provisions for sabbaticals are netted with the asset
value of the reinsurance cover.
The calculation of provisions for anniversary bonuses and benefit payments is based on anaverage time to maturity of 15 years.
Provisions for disposal of nuclear power operations are stated at their settlement amount, as
set forth in German commercial law (HGB) accounting principles. The amount of provisions
recognised complies with the commercial prudence principle. Decommissioning provisions areaccumulated on a straight-line basis. Cost calculations are based on external expert reports
assuming complete installation disposal. The interest rates applied range between 0.99 %(previous year: 0.43 %) and 1.79 % (previous year: 1.54 %). Price increases of 2.00 % (previous
year: 2.00 %) were taken into account. In deviation thereof, price increase rates of 6.70 % and3.00 % were applied for 2023 and 2024, respectively.
Provision calculations are based on due consideration of all identifiable risks.
The effects of changes in discount rates are recognised in the “financial result” item.
Liabilities
Liabilities are recognised at their settlement amount.
Deferred income
Deferred income is formed for income received prior to the reporting date and assigned
to income statements for subsequent periods. Such items are released in accordance with
contractual agreements.
To the extent to which they are not recognised separately as income grants received from2016 or 2017 onwards, income grants received for distribution installations and household
connections are posted as deferred income and released in an instalment of 2.5 % in the yearof their addition and instalments of 5.0 % in each of the following years.
The investment grants received for assets passed on by Group companies to Stadtwerke
München GmbH in its capacity of owner of such assets are shown under deferred income.
Foreign currency translation
Assets and liabilities denominated in foreign currencies are translated into euro using the bid
or offer rate prevailing at the time at which they originated.
Assets and liabilities denominated in foreign currencies with a residual term of less than one
year are translated at the average spot exchange rate applicable on the reporting date, as
set forth in Section 256a HGB. For assets and liabilities with a residual term in excess of one
year, translation is performed at the average spot exchange rate applying the lower of cost or
net realisable value principle, as set forth in Section 256a HGB (Section 252 (1) No. 4 second
half-sentence HGB).

56 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E NDeferred taxes
Deferred taxes are set aside to account for temporary differences between the carrying
amounts in the financial statements and the tax accounts to the extent to which such differences will presumably be dissolved in future financial years.
As a basic principle, overall tax liabilities that arise are recognised under deferred tax liabilities
in the balance sheet. If an overall tax relief is recorded, no use is made of the option to capitalise the net surplus of deferred tax assets on the reporting date that is granted by Section
274 (1) sentence 2 HGB.
In accordance with the option granted by Section 274 (1) sentence 3 HGB, deferred taxes arerecognised on a netted basis.
No deferred taxes are set aside for temporary differences between the carrying amounts in thefinancial statements and the tax accounts within the framework of the “Betrieb gewerblicher
Art (BgA) U-Bahnbau und -verpachtung” (Commercial Operations for Building and Leasing ofMunicipal Underground Railway Systems) single entity deemed to exist at the shareholder fortax purposes.
One exception applies to deferred taxes of foreign permanent establishments as the latterare not included in the group that is deemed to exist for income tax purposes. In the tax
assessment year under review, an overhang of deferred tax liabilities thus had to be posted
for two Norwegian permanent establishments due to temporary differences in fixed assets.
Section 274 (1) sentence 1 HGB stipulates that recognition of such differences is mandatory,
and they cannot be offset against the deferred taxes posted by the income tax group either.
The calculation of the deferred taxes of the Norwegian permanent establishments is based ona tax rate of 22 %.
Valuation units
Stadtwerke München GmbH and individual subsidiaries use derivative financial instruments to
reduce market price risks arising from the purchase and sale of electricity, gas, and coal, as wellas emission rights, oil and diesel products, district heating, and water. In addition, hedging
relationships are also created in relation to interest rate and currency hedges.
To the extent possible, derivatives are shown in the balance sheet as valuation units with therespective underlying transaction, differentiating by commodity and annual tranche. To hedge
against currency fluctuations in the coal and oil portfolios, the relevant currency hedging
transactions in US dollar are also included.
Balance-sheet recognition of valuation units is based on the net hedge presentation method.
If the net balance of all fair values of the underlying and hedging transactions in the relevant
valuation unit is negative, a corresponding provision arising from valuation units is formed forthe resultant contingent loss, in accordance with the principle of prudence. Any positive netbalance of all fair values of the underlying and hedging transactions in the relevant valuation
unit is not recognised.
The fair value of derivative financial instruments corresponds to the market value as of thereporting date. To the extent possible, a price quoted in an active market (e. g. exchange price)is used as the basis of market value calculation. If derivatives’ market values cannot be determined reliably via an active market, their present value is calculated using generally recognised
valuation models and methods (e.g. the discounted-cash-flow method). Market yield curves
and forward commodity prices are the most important components of such models.
Extended netting units (pursuant to the IDW RS ÖFA 3 standard promulgated by the Instituteof Public Auditors in Germany) have been formed for both electricity generation portfolios
and the standard customer segment.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 57

Notes

Notes to the consolidated balance sheet
1. Non-current assets
The breakdown of the non-current asset items aggregated in the consolidated balance sheet
and the development of these assets in the 2023 financial year are shown in a separate overview (movements in non-current assets) in the notes to the financial statements.
2. Inventories

As of
31 Dec. 2023

As of
31 Dec. 2022

Raw materials and supplies

297,149

239,044

Unfinished products, unfinished services

14,171

14,863Finished products and goods

17,871

15,255in kEUR

Advance payments

80

268

329,271

269,430

3. Receivables and other assets

in kEUR

As of
31 Dec. 2023

Thereofremaining term
> 1 year

As of
31 Dec. 2022

Thereofremaining term
> 1 year

Trade accounts receivable

1,811,148

7,762

1,004,405

2,513

Accounts due from affiliatedcompanies

11,2610

10,6940

Accounts due from othercompanies in which participatinginterests are held

9,055

980

26,3710

Receivables due from theshareholder

938,21040,031

2,285,846

17,073

2,769,674

48,773

3,327,316

19,586

Accounts due from affiliated companies mainly include accounts due from profit transfer
agreements and profit withdrawals. Accounts due from other companies in which participating interests are held mainly consist of trade accounts receivable and other income fromequity investments.
As offsetting is permissible, receivables due from the shareholder were offset against liabilities
of kEUR 132,840 due to the shareholder.
Other assets include margin payments of kEUR 708,557 (previous year: kEUR 2,147,336).
4. Securities
This item shows security and fund investments.
5. Cash at banks
Cash at banks essentially comprises short-term investments in the form of fixed-term deposits
and credit balances in current accounts.

58 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

6. Prepaid expenses and accrued income
This item mostly comprises prepaid line rental charges in the telecommunications segment,
IT maintenance contracts, and construction cost grants, as well as emoluments paid in advancefor January 2024. A discount on issued debt of kEUR 454 (previous year: kEUR 558) is also
shown under prepaid expenses and accrued income.
7. Positive difference of plan assets over pension liabilities
Pursuant to Section 246 (2) sentence 2 HGB, the reinsurance cover assets for pension provisions and semi-retirement obligations, which are excluded from all other creditors’ recourseand serve exclusively to satisfy pension liabilities, are offset with these liabilities.
In the 2023 financial year, a positive difference of kEUR 2,043 by which plan assets exceeded
pension liabilities was calculated overall. The amortised cost of the assets amounted tokEUR 15,865, the fair value of the cover assets eligible for offsetting stood at kEUR 15,717, andthe settlement amount for the offset liabilities came to kEUR 13,674.
Expenses arising from the compounding of semi-retirement obligations amounted to kEUR 44.
Income from assets eligible for offsetting came to kEUR 173 before offsetting.
8. Shareholders’ equity

As of
31 Dec. 2023

As of
31 Dec. 2022

485,000

485,000

Additional paid-in capital

6,055,062

5,700,946

Retained earnings–248,090–500,600

in kEUR
Subscribed capital

Difference in shareholders‘ equity from currency translation–13,142–37,261

Minority interests

245,806

259,104

6,524,636

5,907,189

The increase in additional paid-in capital was mainly due to contributions of kEUR 52,277 andthe in-period addition of kEUR 310,884 paid into this item by the City of Munich.
Retained earnings mainly comprise the retained earnings of Stadtwerke München GmbHand the earnings generated by consolidated companies during their group affiliation. The
consolidation measures recognised in the income statement and the consolidated profit ofkEUR 231,364 for the financial year under review were allocated to retained earnings.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 59

Notes

9. Special item for investment grants
Capital grants received before 2010 and since 2021 are shown in the special item for investment grants. The capital grants from the period between 2010 through 2020 were deductedfrom assets.
10. Income grants received
This item in particular comprises the construction cost grants received for electricity and gas
grids from 2016 and 2017 onwards, respectively.
11. Pensions and accruals

As of
31 Dec. 2023

As of
31 Dec. 2022

Pension provisions

692,620754,594

Tax provisions

166,575

195,340

Provisions for disposal of nuclear power operations

370,280

407,912

thereof: post-shutdown and residual operation

147,274

181,474

thereof: phasing-out

93,709101,550

in kEUR

thereof: residue and waste management
Other accruals and provisions

129,297

124,888

1,039,568

1,623,207

2,269,043

2,981,053

Pursuant to Section 246 (2) sentence 2 HGB, the cover assets for pension provisions, semi-­
retirement obligations, and sabbatical obligations, which are excluded from all other creditors’
recourse and serve exclusively to satisfy liabilities arising from such obligations, are offset withthese liabilities.
In the 2023 financial year, the provisions resulting from offsetting cover assets with pension
liabilities totalled kEUR 25,649. The amortised costs of the assets amounted to kEUR 16,825,
the fair value of the cover assets eligible for offsetting stood at kEUR 16,020, and the settlement amount for the offset liabilities came to kEUR 41,669.
Interest expenses from the valuation of pension liabilities and semi-retirement obligations
amounted to kEUR 711. Income from assets eligible for offsetting came to kEUR 502 before
offsetting.
Tax provisions mainly comprised corporation tax, including solidarity surcharge, and trade
tax for the financial year under review as well as previous years. They were charged on to
Stadtwerke München GmbH by the shareholder within the framework of the “Betrieb gewerblicher Art U-Bahnbau und -verpachtung” (Commercial Operations for Building and Leasing ofMunicipal Underground Railway Systems) single entity deemed to exist at the shareholder fortax purposes.
Other accruals and provisions were mainly created for outstanding invoices (kEUR 366,350),
personnel obligations (kEUR 157,091), and contingent losses (kEUR 20,316).

6 0 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

12. Liabilities

in kEUR

As of
31 Dec. 2023

Thereofremaining
term
up to 1 year

Thereofremainingterm
1 – 5 years

Thereofremainingterm> 5 years

As of
31 Dec. 2022

Thereofremaining
term
up to 1 year

Thereofremainingterm
1 – 5 years

Thereofremainingterm> 5 years

Bank borrowings

1,419,654

421,313

283,020715,321

1,741,094

351,980739,998

649,116

Advance payments
received

18,85418,8540

0

16,89816,89800Trade accounts
payable309,651

309,071580

0444,992

444,707285

0Accounts due toaffiliated companies

6,176

6,176

0

0

5,876

5,876

0

0

Accounts due to othercompanies in which
participating interests
are held

91

91

0

0

651

651

0

0

147,703130,875

16,8280160,638

125,903

34,7350

1,614,346

1,154,602

158,779

300,965

1,577,304

1,281,070

255,733

40,501

thereof: for taxes

32,20931,903306

046,85946,593266

0thereof: for social
security

77

77

0

0

75

75

0

0

3,516,475

2,040,982

459,207 1,016,286

3,947,453

2,227,085

1,030,751

689,617

Liabilities due to theshareholder
Other liabilities

All liabilities are unsecured. Accounts due to affiliated companies essentially comprise otherliabilities from cash pooling. Accounts due to other companies in which participating interests
are held mostly related to trade accounts payable.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 61

Notes

Liabilities due to the shareholder essentially include other liabilities from the profit transfer
agreement concluded by Stadtwerke München GmbH as well as trade accounts payable.
In the 2023 financial year, new registered bonds with a volume of kEUR 300,000 were issued.
Liabilities arising from registered bonds and promissory note loans (Schuldscheindarlehen) not
issued to banks are reported in the “other liabilities” item (kEUR 456,000; previous year: kEUR 0).
Registered bonds and promissory note loans issued to banks are included in the “bank borrowings” item (kEUR 222,000; previous year: kEUR 378,000).
As offsetting is permissible, receivables due from the shareholder were offset against liabilities
of kEUR 132,840 due to the shareholder.
Other liabilities include margin payments of kEUR 502,363 (previous year: kEUR 1,080,399).
On the reporting date, credit lines totalling kEUR 1,269,401 existed. kEUR 73,400 thereof
can be used as both cash loans or sureties and kEUR 35,001 as sureties only. Out of the total
amount, kEUR 10,697 was drawn on the reporting date as sureties only and kEUR 5,480 was
drawn as credit lines that can be used as both cash loans and sureties. Credit lines ofkEUR 10,000 revolve annually, while credit lines with total volumes of kEUR 100,000,
kEUR 290,000, and kEUR 500,000 have maturities until 28 February 2024, 31 December 2024,
and April 2026, respectively.
13. Deferred income
This item mainly comprised income grants received for distribution installations and household connections.
14. Deferred taxes
Deferred tax liabilities essentially resulted from differences in depreciation and amortisation
on non-current assets at individual foreign subsidiaries and consolidation measures recognised in the income statement. The tax rates on which calculations are based are the same asin the previous year, i.e. they range between 22 % and 30 %.

62 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

Notes to the income statement­­
15. Revenues
Revenues can be broken down as follows:in kEUR

2023

2022

3,799,680

3,978,609–81,472–92,873

Electricity, excluding electricity tax

3,718,208

3,885,736

Natural gas

3,838,962

4,903,264

Electricity
Electricity tax

Energy tax–111,323–115,856

Natural gas, excluding energy tax

3,727,639

4,787,408

District Heating

786,769

653,488

Water

168,865

170,992

Public Transport

548,756

429,900

Public Pools

18,43814,735

Telecommunications

271,441

266,945

Other revenues

432,076

420,197

9,672,192

10,629,401

16. Other income
Other operating income included income attributable to other periods from the reversal ofprovisions of kEUR 233,693 and income from asset disposals of kEUR 8,596.
Payments of kEUR 135,013 received as compensation for the “Deutschlandticket” – a special
flat-rate public transport ticket offered in a monthly subscription model – are also included inother operating income.
Foreign currency translation gains amounted to kEUR 11,370 (previous year: kEUR 27,778).
17. Cost of materials

in kEUR
Cost of raw materials and supplies and for purchased products
Costs of purchased services

2023

2022

6,041,692

7,940,597

877,475

786,160

6,919,167

8,726,757

This item mainly comprised the sourcing of energy for power stations and energy sales, fuelutilisation, as well as external deliveries and supplies for facility operation and maintenance.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 63

Notes

18. Personnel expenses

in kEUR

2023

2022

Wages and salaries

749,796

706,140

Social security, pension, and other benefit costs

232,337

218,321

thereof: for pensions

77,971

76,749982,133

924,461

On average, 11,637 persons were employed in the Group at the fully consolidated companies
during the 2023 financial year (previous year: 11,468). This figure can be subdivided into
10,851 employees (previous year: 10,647), 404 trainees (previous year: 462), 342 temporary
staff (previous year: 317), and 40 seasonal workers (previous year: 42).
At the proportionately consolidated companies, 483 staff members were employed (previous
year: 474). This figure can be subdivided into 445 employees (previous year: 435), 24 trainees(previous year: 22), and 14 temporary staff and seasonal workers (previous year: 17).
19. Depreciation and amortisation

in kEUR
Depreciation and amortisation
less the depreciation allowance adjustment of investment grants

2023

2022

588,739652,221

13,050

11,540575,689

640,681

Depreciation and amortisation refer to non-current intangible assets and property, plant, andequipment.
In the financial year under review, depreciation and amortisation did not include any unsche­
duled impairments.
20. Other expenses
Other operating expenses included expenses attributable to other periods from asset
disposals of kEUR 9,772.
Currency translation losses amounted to kEUR 16,258 (previous year: kEUR 30,515).

6 4 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

21. Financial resultin kEUR

2023

2022

Income from other investments

21,27921,729

Income from profit transfer agreements

8,284

11,202

Income from other long-term securities and loans held as
financial assets

14,923

14,878Other interest and similar income

37,031

9,485

5,152

385

Income from associated companies

thereof: from discounting–3,77853,963

Write-downs on financial assets and marketable securities held
as current assets–8,931–9,313

Expenses arising from loss absorption

–458

–410

–90,241–66,175

thereof: from compounding–15,559–22,880

thereof: from interest on external loans–67,079–29,699–21,891

35,359Interest and similar expenses

22. Taxes

in kEUR

2023

2022

Income taxes

122,935

199,235

Deferred taxes

5,805

25,145

128,740

224,380

33,88921,118

162,629

245,498

Other taxes

Income taxes mainly comprised corporation tax, including solidarity surcharge, trade tax, as
well as trade tax to be absorbed within the framework of the “Betrieb gewerblicher Art (BgA)
U-Bahnbau und -verpachtung” (Commercial Operations for Building and Leasing Municipal
Underground Railway Systems) single entity deemed to exist at the City of Munich for tax
purposes.
23. Profit transfer expenses
In accordance with the profit transfer agreement, the parent company’s net profit ofkEUR 410,884 was transferred to the “Betrieb gewerblicher Art (BgA) U-Bahnbau und-verpachtung” (Commercial Operations for Building and Leasing of Municipal Underground
Railway Systems) entity of the City of Munich.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 65

Notes

Other information
Cash flow statement
Of the figure shown for cash and cash equivalents, kEUR 56,218 was attributable to proportionately consolidated companies (previous year: kEUR 55,187).
Information concerning proportionately consolidated companies (pro-rata figures)in kEUR

Long-term

Short-term

Assets584,695

232,593

Liabilities

158,070

163,244

in kEUR

Operating

Other

Costs

1,060,730

30,250

Income1,153,808

16,409Valuation units and financial instruments
Stadtwerke München GmbH and individual subsidiaries use derivative financial instruments
to hedge price change, interest rate, and currency risks. These instruments primarily comprisefutures and forwards, options, and swaps.
Two extended netting units (pursuant to the IDW RS ÖFA 3 standard promulgated by theInstitute of Public Auditors in Germany) have been formed for electricity generation portfolios. They relate to electricity generation in the Group’s own power plants. The hedging
instruments deployed to hedge the clean dark spread and the clean spark spread comprisecommodity price hedging derivatives in conjunction with the sale of electricity and thehighly likely sale of district heating. To hedge against currency fluctuations in the coal and oil
commodity portfolios, the relevant currency hedging transactions (forward exchange transactions) in US dollars are also included. Open currency positions from commodity transactions
are closed directly in the market. Expenses and income from the extended netting units areaggregated. The extended netting units generated a positive contribution margin, so no provisions for contingent losses had to be set aside as of the 31 December 2023 reporting date.
An extended netting unit (pursuant to the IDW RS ÖFA 3 standard promulgated by theInstitute of Public Auditors in Germany) has been formed in each of the standard customer
segments (residential, small business, and standard business customers), subdivided into
electricity and gas. The hedges formed include forward commodities transactions and highly
likely sales transactions (based on assumptions and empirical values). Expenses and income
from the extended netting units are aggregated. These extended netting units did not resultin any provisions for contingent losses as of the 31 December 2023 reporting date.
The expected highly likely transactions included in the extended netting units comprisemonthly budgeted sales volumes to electricity and gas customers, and monthly procurement
volumes generated from third-party and the company’s own power plants. The budgetedvolumes are based on annual planning approved by the management, which is derived fromlast year’s volumes and expected business trends. Historical sales figures indicate a highprobability of occurrence for the budgeted figures.
Micro valuation units have been formed for business customers where it is possible to clearly
allocate sales and purchasing agreements (back-to-back agreements). These hedges are
categorised according to time bands (annual tranches until 2026) in which countervailingvalue changes and cash flows have offset each other and will prospectively offset each other inthe future.

66 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

Portfolio hedges have been formed for all trading transactions in each of the following areas:electricity, gas, CO2, and diesel. These hedges are categorised according to time bands (annual
tranches until 2026) in which countervailing value changes and cash flows have offset eachother and will prospectively offset each other in the future.
At one shareholding, highly likely sales transactions are included in the electricity and gas
portfolio hedges for residential customers. They are monthly budgeted sales volumes. The
budgeted volumes are derived from the previous year’s plans and expected future businesstrends. Historical sales figures indicate a high probability of occurrence for the budgeted
figures.
The trading transactions are included in the portfolio hedges with the following amounts:
Portfolio hedge

Nominal volume

Hedged risk in kEUR

Electricity (TWh)14.7

372,768

Gas (TWh)

71.5

999,173

Diesel (kt)

16.9

0

In the individual hedging instruments, the relevant price index is selected in a way conforming
to the underlying transaction as much as possible, subjecting the hedging instruments to thesame commodity price risk as the underlying transactions. The value changes to the underlying transactions are hedged over a period of up to five years.
Hedging relationships have also been created in relation to interest-rate hedges. Theinterest-rate risk arising from liabilities is hedged. Interest-rate swaps are used as hedging
instruments. The hedging horizon extends up to the year 2025. These are micro and portfolio
valuation units.
As of the reporting date, the portfolio of the derivative financial instruments serving as
hedging instruments within valuation units consisted of the following components:

Nominal value

Derivatives withpositive fair value

Derivatives withnegative fair value

Interest-related transactions

120,434

6,700

–276

Index-related transactions

6,130

458

0

126,564

7,158

–276

in kEURTotal

The hedging relationships prospectively entail a high degree of effectiveness, since the countervailing value changes to the underlying transactions and hedging instruments will presumably fully offset each other in the future. The underlying transactions aggregated within theportfolio valuation units exhibit homogeneous risks.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 67

Notes

The dollar offset method is applied cumulatively to quantify the ineffective amount to date. It
entails a comparison of the cumulative market changes to the underlying transactions with the
cumulative market changes to the hedging instruments in absolute monetary amounts fromthe designation date. The dollar offset test is performed on each reporting date.
In valuation units involving a 1 : 1 ratio between purchase and sales agreements (micro
valuation units), the company refrains from quantifying ineffectiveness if all other significant
contractual parameters (supply volumes, delivery dates, prices, etc.) of the underlying andhedging transactions match.
In commodity hedging, ineffectiveness is reported if a net loss arises from the cumulative valuechanges to the underlying transactions and the cumulative value changes to the hedging
instruments. In interest-rate hedging, ineffectiveness is reported as soon as the cumulativevalue changes of the underlying and hedging transactions do not fully offset each other.
As of 31 December 2023, a provision for valuation units totalling kEUR 3,510 was formed toreflect ineffectiveness.
As of the reporting date, the volume of derivative financial instruments not included in valuation units consisted of the following components:

Nominal value

Derivatives withpositive fair value

Interest-related transactions

250,047

21,1210

Currency-related transactions

152,199

0–3,072Other transactions

212,741

67,272–12,472

Total

614,987

88,393–15,544

Derivatives withnegative fair value

in kEUR

Derivatives withnegative fair value

The derivative financial instruments comprised the following types:

in kEUR

Nominal value

Derivatives withpositive fair value

Options

302,099

21,121

–598

Swaps

100,147

0–2,474

Forward / future

212,741

67,272–12,472

Total

614,987

88,393–15,544

Calculation is carried out on the basis of mark-to-market valuations using present value andoption price models, inter alia.
A contingent loss provision of kEUR 16,806 for pending transactions was created for derivative
financial instruments not included in valuation units. This provision also includes the negative
market values on the designation date.

6 8 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E N

Units and shares in German investment undertakings within the meaning ofSection 1 of the German Capital Investment Code (KAGB)
Note regarding investments within the meaning of Section 285 No. 26 HGB:
The majority of securities held as fixed assets are shares of German investment undertakings
within the meaning of Section 1 of the German Capital Investment Code (KAGB), in which
Stadtwerke München GmbH holds an interest of more than 10 %.
The investment objective of all investment funds is continuous value growth through broad
distribution of investments across various asset classes (Markowitz portfolio theory). In
addition to compliance with the provisions of the KAGB, risk is monitored on an ongoing basis
at both the manager and investor levels. The option for daily redemption of fund shares isunrestricted.
The following figures were reported as of 31 December 2023:

in kEUR

Security

Master funds

Carrying amount

Value pursuant to
Section 36 German
Capital Investment
Code (KAGB)

Market value lesscarrying amount

Dividend payout in
FY 2023

1,086,001

1,164,840

78,8391,530

Other financial obligations} Stadtwerke München GmbH has undertaken to meet its obligations arising from its nuclear
liabilities for its stake in KKI 2 at all times.
} Existing long-term agreements for the disposal of nuclear fuels involve corresponding
obligations, and their volume and price components are variable.
} To the extent to which employees of Stadtwerke München GmbH and some of its subsidiaries are not entitled to retirement benefits under the principles of civil servant or independent benefit law, for which the company has set aside adequate pension provisions, they
are members of Bayerische Versorgungskammer, the complementary pension fund of theBavarian municipalities. The standard levy for the complementary pension fund is 7.75 %(since 1 January 2013). These employer contributions are included in the gross total. In 2023,
the salary total that is relevant for levy purposes was kEUR 445,127 für 8,169 beneficiaries.
} The order commitments in the Group amount to a total of kEUR 852,154. Of this amount,kEUR 10,219 is attributable to companies included on a proportional basis.
} Other financial obligations in the amount of kEUR 2,465,073 exist at fully consolidated
affiliated companies. They primarily comprise financial obligations attributable to long-term
supply agreements, franchise and lease agreements, current leasing and rental agreements,
purchase or consortium agreements, licence rights, property charges, and loans.
} Other financial obligations in the amount of kEUR 2,089,793 exist at joint-venture­companies. They comprise financial obligations attributable to long-term supply agreements, licence or franchise agreements, and current leasing and rental agreements. Fullfigures rather than proportional figures are reported in this respect.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 69

Notes

Contingencies
The following contingencies existed as of the reporting date:in kEUR
Guarantee liabilities

482,274

One subsidiary had issued five letters of comfort, with a volume of around kEUR 1,900 as of thereporting date, to counterparties of the sales and trading subsidiary Bayerngas Energy GmbH.
SWM Gasbeteiligungs GmbH still has a subordinate contingency for potential dismantlingcosts at Spirit Energy Limited. Given the orderly financial situation of Spirit Energy Limited, noclaims are currently expected to arise from this contingency.
As of the reporting date, we were not aware of any risks suggesting that the reported contingencies might be utilised. We do not anticipate the guarantees and other obligations to be
utilised due to the counterparties’ solid financial position.
Relations with affiliated companies and equity participations
Affiliated companies and major equity participations in accordance with Section 313 (2) HGB
are shown in Appendix 2 to the notes to the financial statements.
Application of disclosure exemptions
It is intended to utilise the disclosure exemptions pursuant to Section 264 (3) HGB for thefollowing subsidiary:} Münchner Verkehrsgesellschaft mbH (MVG)
Remuneration for active and former Management Board members, their surviving
dependants, and the Supervisory Board
The total remuneration paid to the current members of the Management Board in the2023 financial year amounted to kEUR 1,541 (previous year: kEUR 1,689). The amount paid toformer Management Board members (retirement benefits and benefits for surviving dependants) was kEUR 985 (previous year: kEUR 978). Provisions of kEUR 18,431 (previous year:
kEUR 16,775) had been set aside for pension obligations due to former Management Board
members.
The emoluments paid to the Supervisory Board amounted to kEUR 73 (previous year: kEUR 76)
in the 2023 financial year.
Auditor’s fee
Of the total fee of kEUR 941 charged by the auditor of the consolidated financial statements
for the financial year under review, kEUR 712 related to work performed in the auditing of thefinancial statements, kEUR 68 to other attestation services, kEUR 4 to tax consulting services,and kEUR 157 to other services.

70 A N N UA L R E P OR T 2023
Notes

S TA DT W E R K E M Ü N C H E NConsolidated financial statements
In its capacity as parent company, Stadtwerke München GmbH prepares consolidated financial
statements for the largest and smallest consolidation group. These statements are submitted
for publication to the operator of the German electronic Company Register.

Subsequent events after the reporting period
No events of particular significance with major financial repercussions have been observed
after the reporting date.

The executive bodies of Stadtwerke München GmbH
Supervisory Board

Chairman:
Dieter Reiter, Mayor of Munich

Deputy Chairman:
Benno Angermaier, Works Council Chairman

Gerhard Bernhard, QSA quality assurance / tram trainer
Christoph Bieniek, executive
Simone Burger, sociologist, Honorary City Councillor
Christoph Frey, Professional City Councillor
Mona Fuchs, Honorary City Councillor
Alfred Köhler, Works Council member
Dominik Krause, physicist, Honorary City Councillor
Christine Kugler, Professional City Councillor
Cornelius Müller, Works Council Chairman
Manuel Pretzl, Director of the Hunting and Fishing Museum, Honorary City Councillor
Franz Schütz, trade union secretary
Prof Dr Hans Theiss, medical doctor, Honorary City Councillor
Claudia Weber, trade union secretary
Gertraud Wegertseder, Works Council member

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 71

Notes

Management Board
Chief Executive Officer
Dr Florian Bieberbach

Director, Real Estate and Public Pools
Werner Albrecht (until 31 October 2023)

Director, Mobility
Ingo Wortmann

Director, Technology
Helge-Uve Braun

Director, Regional Energy Transition
Dr Karin Thelen (since 1 July 2023)

Director, Human Resources, Real Estate, and Public Pools
Dr Gabriele Jahn (since 1 November 2023)

Munich, 22 March 2024
Stadtwerke München GmbHDr Florian Bieberbach
Chief Executive Officer

Ingo Wortmann
Director,
Mobility

Dr Karin Thelen
Director,
Regional Energy Transition

Dr Gabriele Jahn
Director,
Human Resources,
Real Estate, and Public Pools

Helge-Uve Braun
Director,
Technology

72 A N N UA L R E P OR T 2023
Appendix 1 to the Notes

S TA DT W E R K E M Ü N C H E N

Movements in non-current assets 2023

Cost of acquisition/production

in kEUR

As of
1 Jan. 2023

Currencytranslationdifferences

Changesin the consolidation
group

Additions

Disposals

Transfers
(+/–)

As of
31 Dec.2023

I.	Intangible assets

1.	Purchased trademarks, patents,
licences, and similar rights

318,3110–1,033

6,796

7,275

14,570331,369

2.	Goodwill

260,135

0

0

0

0

0

260,135

3. Advance payments

528

0

0

2,632

0

–44

3,116

578,974

0–1,033

9,428

7,275

14,526594,620

1.	Land, leasehold rights, andbuildings including buildings
on non-owned land

2,775,678

0025,629620

54,4282,855,115

2.	Generation, production, and­sourcing installations

5,358,529

26,443

0

1,747

1,025

7,761

5,393,455

3. Distribution installations

5,678,640

0057,834

8,708

154,4145,882,180

4.	Track, line equipment, andsafety equipment

612,673

0

0

674

4,841

599

609,105

II.	Property, plant,
and equipment

1,073,372

0039,91813,646

206,4021,306,046

6.	Other technical equipment,
plant, and machinery

5.	Rolling stock for passenger services

874,326

15–32

39,7298,151

22,114

928,001

7.	Operational and officeequipment

491,874

0–103,989

24,763

9,824

18,360421,184

8.	Advance payments and ­construction in progress

1,795,241

3–5,841

541,5136,394–478,604

1,845,918

18,660,333

26,461–109,862

731,80753,209–14,526

19,241,004

125,349

077,025

3,389

79,6000126,163

8,427

0

0

0

2,945

0

5,482

III. Financial assets

1.	Shares in affiliated companies
2.	Loans due from affiliated c­ ompanies
3.	Equity investments inassociated companies

1,064,811

00028,8180

1,035,993

4.	Other investments

96,923170

015,331170

0112,254

5.	Loans due from companies in which
participating interests are held

220,9200032,66018,024

0235,556

1,177,50800120,011

146,395

0

1,151,124

3,897

0

0

0

111

0

3,786

2,697,835

170

77,025

171,391

276,06302,670,358

21,937,142

26,631–33,870912,626

336,547

022,505,982

6.	Securities held as fixed assets
7.	Other loans

Total

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 73

Appendix 1 to the Notes

Cumulative depreciation/amortisation

Carrying amounts

As of
1 Jan. 2023

Currencytranslationdifferences

Changesin the consolidation
group

Additions

DisposalsWrite-ups

Transfers
(+/–)

As of
31 Dec. 2023

As of
31 Dec. 2023

As of
31 Dec. 2022

268,155

0–1,71624,327

7,271

0

41

283,536

47,83350,156

183,5350016,192000199,727

60,40876,600

0

0

0

0

0

0

0

0

3,116

528

451,6900–1,716

40,519

7,271

0

41

483,263

111,357

127,284

1,616,573

0056,393433

001,672,533

1,182,582

1,159,105

3,421,318

6,925

0

226,362792

003,653,813

1,739,642

1,937,211

4,311,002

00

119,453

7,102

0

0

4,423,353

1,458,827

1,367,638

506,0470013,675

4,703

0

0

515,019

94,086

106,626

674,4100051,903

13,42200712,891

593,155

398,962

613,076

4–32

48,806

6,261

0

0

655,593

272,408

261,250

354,432

0–59,659

31,628

8,100

0

–41

318,260

102,924

137,442001,845,918

1,795,241–41 11,951,462

7,289,542

7,163,475

0

0

0

0

0

0

11,496,858

6,929–59,691548,220

40,813031,652

0

0

1,730

0

0

0

33,382

92,781

93,697

0

0

0

0

0

0

0

0

5,482

8,427

665,852

0

0

4,273

0

247

0

669,878

366,115

398,959

1,429

0

0

4,960

123

0

0

6,266

105,988

95,494

143,686

0

0

0

0

0

0

143,686

91,87077,234

15,244

0

0

2,241

0

439

0

17,046

1,134,078

1,162,264

0

0

0

0

0

0

0

0

3,786

3,897

857,86300

13,204

123

686

0

870,258

1,800,100

1,839,972

12,806,411

6,929–61,407

601,943

48,207686

0 13,304,983

9,200,999

9,130,731

74 A N N UA L R E P OR T 2023
Appendix 2 to the Notes

S TA DT W E R K E M Ü N C H E N

Affiliated companies and major equity participations(in accordance with Section 313 (2) HGB)

Company and registered office

Share capital
31 Dec. 2023

Shareholders’equityLast annual
net income

%

Year

in kEUR

in kEUR

Münchner Verkehrsgesellschaft mbH (MVG), Munich

100

2023

50,110

0 1)

SWM Gasbeteiligungs GmbH, Munich

100

2023

280,888307

Affiliated companies (fully consolidated)

SWM Bayerische E&P Beteiligungsgesellschaft mbH,
Munich100

2022

101,736

49,764

SWM Infrastruktur GmbH & Co. KG, Munich

100

2023

649,603

0 1)

SWM Infrastruktur Verwaltungs GmbH, Munich

100

2023

25

0 1)

SWM Kundenservice GmbH, Munich

100

2023

104

0 1)

SWM Services GmbH, Munich

100

2023

10,170

0 1)

63.84

2022

69,566

3,071

SWM Versorgungs GmbH, Munich

100

2023

10,0150 1)

SWM Erneuerbare Energien Norwegen GmbH, Munich

100

2022

97,560–149,518

SWM Erneuerbare Energien Skandinavien GmbH & Co. KG,
Munich100

2022

72,29624,98060

2022

59,686

16,622

M-net Telekommunikations GmbH, Munich

Austri Kjølberget DA, Søre Osen (Norway)

60

2022

128,204

38,699SWM UK Wind One Limited, Tunbridge Wells ­(UK)

Austri Raskiftet DA, Søre Osen (Norway)

100

2022

354,545 3)

99,483 3)

GyM Offshore One Limited, Tunbridge Wells (­ UK)

100

2022

154,713 3)

46,881 3)

GyM Offshore Two Limited, Tunbridge Wells ­(UK)

100

2022

103,041 3)

31,248 3)

100

2022

51,467

3)

15,584 3)

100

2022

41,769

1,839

100

2022

12,8870 1)

SWM Renewables Poland Sp. z o. o.
(formerly Windfarm Polska III sp. z o. o.), Koszalin (Poland)

100

2022

791,919 4)

107,520 4)

SWM Wind Havelland Holding GmbH & Co. KG, Munich

75

2022

44,35011,847

SWM Windpark Havelland GmbH & Co. KG, Bremen

100

2022

2,001

21,87370

2022

248,074–59,135

Frøya Vind AS, Trondheim (Norway)

100

2022

8,912

3,512

Hundhammerfjellet AS, Trondheim (Norway)

100

2022

10,872

4,105

Midgard Vind AS, Trondheim (Norway)

100

2022

29,726

2,720

Stokkfjellet AS, Trondheim (Norway)

100

2022

12,9904,183

Sørmarkfjellet AS, Trondheim (Norway)

100

2022

16,574

3,642

Ytre Vikna 1 AS, Trondheim (Norway)

100

2022

19,275

1,155

61.91

2022

103,266

8,476

Bayerngas GmbH, Munich

56.3

2022

122,491

31,598bayernets GmbH, Munich

91.49

2022

150,2110 1)

Bayerngas Energy GmbH, Munich

100

2022

25,900

0 1)

bayernugs GmbH, Munich

100

2022

100

0 1)

GyM Offshore Three Limited, Tunbridge Wells ­(UK)
Sidensjö Vindkraft AB, Göteborg (Sweden)
Sidensjö Vindkraft Elnät AB, Göteborg (Sweden)

Midgard Vind Holding AS, Trondheim (Norway)

Marquesado Solar, S.L., Aldeire-La Calahorra (Spain)

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 75

Appendix 2 to the Notes

Company and registered office

Share capital
31 Dec. 2023

Shareholders’equityLast annual
net income

%

Year

in kEUR

in kEUR

Bioenergie Taufkirchen GmbH & Co. KG, Taufkirchen

100

2022

14,6756,673

eta Energieberatung GmbH, Pfaffenhofen an der Ilm

100

2022

3,957

0 1)

Hanse Windkraft GmbH, Hamburg

100

2022

27,966

0 1)

Praterkraftwerk GmbH, Munich

100

2022

3,425

–334

QuartiersNetz Bayern GmbH, Munich

100

2022

575

01

SWM 50 MW Windpark Portfolio GmbH & Co. KG, Bremen

100

2022

5,057

3,120

Affiliated companies (unconsolidated)

81.82

2022

64

1

SWM Erneuerbare Energien Region Verwaltungs GmbH,
MunichLockstedt-Siestedt II Netzanschluss GbR, Bremen

100

2022

36

6

SWM Erneuerbare Energien Verwaltungsgesellschaft mbH,
Munich

100

2022

234

209

SWM Wind Havelland Umspannwerk Holdinggesellschaft
Wustermark GmbH & Co. KG, Bremen

100

2022

965

2

100

2022

113

224

SWM Wind Onshore Frankreich SAS, Nîmes (France)

SWM Wind Havelland Umspannwerk GmbH, Bremen

100

2022

18,788417

Portal Munich Betriebs-GmbH & Co. KG, Munich

97

2022

2,220

–46

Gasversorgung Germering GmbH, Germering

90

2022

4,043

986

KommEnergie Gasnetz GmbH & Co. KG, Eichenau

74.9

2022

19,115

378

KommEnergie Gasnetz Verwaltungs GmbH, Eichenau

74.9

2022

29

2

Münchner U-Bahn-Bewachungsgesellschaft mbH, M­ unich

51

2022

24

–2

Portal Munich Verwaltungsgesellschaft mbH, Munich

51

2022

55

1

Joint ventures (consolidated pro rata)
Energie Südbayern GmbH, Munich

50

2022

148,696

52,078Energienetze Bayern GmbH & Co. KG, Munich

50

2022

166,721

11,114

Energienetze Bayern Management GmbH, Munich

50

2022

46

–28

DanTysk Sandbank Offshore Wind GmbH & Co. KG,
Hamburg

49

2022

708,019

232,701

50

2022

175

105

2)

135,859 2)

Participations in associated companies(consolidated at equity)
bayernServices GmbH, Munich
Aneo Roan Vind Holding AS, Trondheim (Norway)

49

2022

1,271,141

wpd europe GmbH, Bremen

33

2022

394,840

16,1203)

137,000 3)–21,284

Spirit Energy Limited, Staines-upon-Thames (UK)

31

2022

909,000

Global Tech I Offshore Wind GmbH, Hamburg

24.9

2022

–293,408

76 A N N UA L R E P OR T 2023
Appendix 2 to the Notes

S TA DT W E R K E M Ü N C H E NCompany and registered office

Share capital
31 Dec. 2023

Shareholders’equityLast annual
net income

%

Year

in kEUR

in kEURGVH Gasversorgung Haar GmbH, Haar

50

2022

3,476

932

RegioNetzMunich GmbH & Co. KG, Garching

50

2022

11,1981,401

RegioNetzMunich Verwaltungs GmbH, Garching

50

2022

30

1

UWB Umspannwerk Betriebsgesellschaft Etzin mbH,
Halstenbek

50

2022

–88

30

2)

–7,786 2)Major other participations

Aneo Vind AS, Trondheim (Norway)

49

2022

34,157

DanTysk Sandbank Offshore Wind Verwaltungs GmbH,
Hamburg

49

2022

33

1

Gasversorgung Unterschleißheim GmbH & Co. KG,
Unterschleißheim

49

2022

1,084

527

Gasversorgung Unterschleißheim Verwaltungs GmbH,
Unterschleißheim

49

2022

29

1

Gehrlicher GmbH & Co. Solarpark Helmeringen KG,
Sulzemoos

49

2022

5,965

1,872

GVI – Gasversorgung Ismaning GmbH, Ismaning

49

2022

2,701

235

Münchner Linien GmbH & Co. KG, Munich

49

2022

155

518

Stadtwerke Olching Gasnetz GmbH & Co. KG, Olching

49

2022

923

305

Stadtwerke Olching Gasnetz Verwaltungs GmbH, Olching

49

2022

31

1

unlimited energy GmbH, Schönefeld

49

2022

4,459

5,416

VVG Verkehrsverwaltungs GmbH, Munich

49

2022

40

5

Gehrlicher GmbH & Co. Solarpark Rothenburg KG,
Sulzemoos

40

2022

14,2842,921

Windparks Gimbweiler & Mosberg Infrastruktur GbR,
Bremen

33.33

2022

47

1

Awel y Môr Offshore Windfarm Limited,
Swindon (UK)

30

2022

26,066 3)–24 3)

Gwynt y Môr Offshore Windfarm Limited,
Swindon (UK)

30

2022

–3,092 3)

0 3)

Gemeinschaftskernkraftwerk Isar 2 GmbH, Essenbach

25

2022

51

3

Mobility inside Holding GmbH & Co. KG, Frankfurt am Main

21.85

2022

16,336–1,064

Mobility inside Verwaltungs GmbH, Frankfurt am Main

20.02

2022

54

2

All companies shown in italics are held indirectly.
bayernets GmbH is held directly and indirectly.
1)

Profit and loss transfer agreements exist.
	Exception: in kNOKExchange rate at 31 Dec. 2023: EUR 1 = NOK 11.22390 / 2023 annual average exchange rate: 1 EUR = NOK 11.42465
Exchange rate at 31 Dec. 2022: EUR 1 = NOK 10.49940 / 2022 annual average exchange rate: 1 EUR = NOK 10.10523
3)
Exception: in kGBP
Exchange rate at 31 Dec. 2023: EUR 1 = GBP 0.86691 / 2023 annual average exchange rate: 1 EUR = GBP 0.86953
Exchange rate at 31 Dec. 2022: EUR 1 = GBP 0.88534 / 2022 annual average exchange rate: 1 EUR = GBP 0.85269
4)
Exception: in kPLN
Exchange rate at 31 Dec. 2023: EUR 1 = PLN 4.34300 / 2023 annual average exchange rate: 1 EUR = PLN 4.54144
Exchange rate at 31 Dec. 2022: EUR 1 = PLN 4.68520 / 2022 annual average exchange rate: 1 EUR = PLN 4.68474
2)

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 77

Independent Auditor’s Report

Independent Auditor’s Report
To Stadtwerke München GmbH, München
Audit Opinions
We have audited the consolidated financial statements of Stadtwerke München GmbH and its
subsidiaries (the Group), which comprise the consolidated balance sheet as at 31 December 2023,
and the consolidated income statement for the fiscal year from 1 January to 31 December 2023,
notes to the consolidated financial statements, including the recognition and measurement
policies presented therein, and the consolidated cash statement and consolidated statement ofchanges in equity for the fiscal year from 1 January to 31 December 2023. In addition, we haveaudited the group management report of Stadtwerke München GmbH for the fiscal year from
1 January to 31 December 2023.
In our opinion, on the basis of the knowledge obtained in the audit,} the accompanying consolidated financial statements comply, in all material respects, withthe requirements of German commercial law and give a true and fair view of the assets,
liabilities, and financial position of the Group as at 31 December 2023 and of its financial
performance for the fiscal year from 1 January to 31 December 2023 in compliance withGerman Legally Required Accounting Principles, and} the accompanying group management report as a whole provides an appropriate view of
the Group’s position. In all material respects, this group management report is consistent
with the consolidated financial statements, complies with German legal requirements andappropriately presents the opportunities and risks of future development.
Pursuant to Sec. 322 (3) Sentence 1 HGB [“Handelsgesetzbuch”: German Commercial Code],
we declare that our audit has not led to any reservations relating to the legal compliance of theconsolidated financial statements and of the group management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial statements and of the group management
report in accordance with § 317 HGB and in compliance with German Generally AcceptedStandards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer[Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements
and principles are further described in the “Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements and of the Group Management Report” section of
our auditor’s report. We are independent of the group entities in accordance with therequirements of German commercial and professional law, and we have fulfilled our other
German professional responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinions on the consolidated financial statements and on the group management
report.
Responsibilities of the Executive Directors and the Supervisory Board for theConsolidated Financial Statements and the Group Management Report
The executive directors are responsible for the preparation of the consolidated financial
statements that comply, in all material respects, with the requirements of German commercial
law and that the consolidated financial statements, in compliance with German Legally
Required Accounting Principles, give a true and fair view of the assets, liabilities, financial
position, and financial performance of the Group. In addition, the executive directors are
responsible for such internal control as they, in accordance with German Legally Required
Accounting Principles, have determined necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud (i. e.,
fraudulent financial reporting and misappropriation of assets) or error.

78 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E N
Independent Auditor’s Report

In preparing the consolidated financial statements, the executive directors are responsible forassessing the Group’s ability to continue as a going concern. They also have the responsibility fordisclosing, as applicable, matters related to going concern. In addition, they are responsible forfinancial reporting based on the going concern basis of accounting provided no actual or legal
circumstances conflict therewith.
Furthermore, the executive directors are responsible for the preparation of the group management
report that, as a whole, provides an appropriate view of the Group’s position and is, in allmaterial respects, consistent with the consolidated financial statements, complies withGerman legal requirements, and appropriately presents the opportunities and risks of future
development. In addition, the executive directors are responsible for such arrangements andmeasures (systems) as they have considered necessary to enable the preparation of a groupmanagement report that is in accordance with the applicable German legal requirements,
and to be able to provide sufficient appropriate evidence for the assertions in the groupmanagement report.
The supervisory board is responsible for overseeing the Group’s financial reporting process forthe preparation of the consolidated financial statements and of the group management report.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of
the Group Management Report
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and whether the group management report as a whole provides an appropriate view of theGroup’s position and, in all material respects, is consistent with the consolidated financial
statements and the knowledge obtained in the audit, complies with the German legal
requirements and appropriately presents the opportunities and risks of future development,
as well as to issue an auditor’s report that includes our audit opinions on the consolidated
financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with § 317 HGB and in compliance with German Generally AcceptedStandards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer(IDW) will always detect a material misstatement. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements and this group management report.
We exercise professional judgment and maintain professional skepticism throughout theaudit. We also:} Identify and assess the risks of material misstatement of the consolidated financial statements
and of the group management report, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our audit opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
controls.
} Obtain an understanding of internal control relevant to the audit of the consolidated
financial statements and of arrangements and measures (systems) relevant to the audit of thegroup management report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an audit opinion on the effectiveness ofthese systems.

A N N UA L R E P OR T 2023

S TA DT W E R K E M Ü N C H E N 79

Independent Auditor’s Report} Evaluate the appropriateness of accounting policies used by the executive directors and thereasonableness of estimates made by the executive directors and related disclosures.
} Conclude on the appropriateness of the executive directors’ use of the going concern basisof accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in the auditor’s report to the related disclosures in the consolidated
financial statements and in the group management report or, if such disclosures are
inadequate, to modify our respective audit opinions. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to be able to continue as a going concern.
} Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
present the underlying transactions and events in a manner that the consolidated financial
statements give a true and fair view of the assets, liabilities, financial position and financial
performance of the Group in compliance with German Legally Required Accounting
Principles.
} Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Group to express audit opinions on the consolidated
financial statements and on the group management report. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible forour audit opinions.
} Evaluate the consistency of the group management report with the consolidated financial
statements, its conformity with [German] law, and the view of the Group’s position it provides.
} Perform audit procedures on the prospective information presented by the executive
directors in the group management report. On the basis of sufficient appropriate audit
evidence we evaluate, in particular, the significant assumptions used by the executive
directors as a basis for the prospective information, and evaluate the proper derivation of theprospective information from these assumptions. We do not express a separate audit opinion
on the prospective information and on the assumptions used as a basis. There is a substantial
unavoidable risk that future events will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
Nürnberg, 22 March 2024
PKF Fasselt
Partnerschaft mbB
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft
Rechtsanwälte
HüngerGerman Public Auditor

SommerGerman Public Auditor

8 0 A N N UA L R E P OR T 2023 S TA DT W E R K E M Ü N C H E N
Report of the Supervisory Board

Report of the Supervisory Board

During the 2023 financial year, the Supervisory Board was regularly and comprehensively
informed at its meetings and by means of written reports about the economic position anddevelopment of the company and about any material transactions, notably also about theservice and performance development and funding of the Mobility division. On the basis ofthe ­documents and information submitted, the Supervisory Board monitored the activities ofthe Management Board and carried out the tasks for which it is responsible as specified by law
and the articles of association.
Seven meetings of the Supervisory Board were held during 2023. Its Preparatory ­Committee,­r­esponsible for preparing Supervisory Board meetings, convened in one meeting, the­Personnel Committee met six times in 2023.
PKF Fasselt Partnerschaft mbB Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft
Rechtsanwälte, the independent auditors appointed by d
­ ecision of the Supervisory Board
on 28 April 2023, audited the single-entity ­financial ­statements and management reportof Stadtwerke München GmbH together with the consoli­dated financial statements andthe group management report prepared by the ­Management Board for the 2023 fi­ nancial
year, and in each case granted an unqualified audit certificate. The audit reports preparedby the independent auditors were submitted to the members of the Supervisory Board. The­independent auditors were present at the discussion of the annual financial statements by theSupervisory Board on 26 April 2024. Following its own review, the Supervisory Board raisedno o­ bjections to the annual financial statements and management report of Stadtwerke
München GmbH and proposed to the shareholder that the 2023 annual financial statements
be formally adopted and the management report approved.
Following a review, the Supervisory Board noted the consolidated financial statements
and the group management report for 2023 with approval and raised no objections. The
Super­visory Board proposed to the shareholder that the consolidated financial statements
be formally adopted and the group management report approved.
The Supervisory Board would like to take this opportunity to express its gratitude to the­Management Board and all employees for their valuable contributions to the success of
the Group in 2023.
Munich, 26 April 2024
The Supervisory Board

Dieter Reiter
Chairman

Contact and imprint
Publisher
Stadtwerke München GmbH
Emmy-Noether-Straße 280992 Munich
Phone: +49 (0) 800 796 796 0
E-mail: info@swm.de
www.swm.de

Editing

Picture credits

SWM, Kirchhoff Consult GmbH

Cover

Concept, design andproduction

Inside pages
p. 05

Top right picture: SWM/Jan Saurer

Kirchhoff Consult GmbHp. 07

engel.ac/stock.adobe.com

p. 08

Paul Langrock

p. 10

SWM/Andreas Leder

p. 11

SWM/Steffen-Leiprecht

p. 13

SWM/Jan Saurer

p. 14

Middle picture:SWM/Jan Saurer

p. 17

MVG

p. 18

SWM/MVG

p. 19

MVG/Robert Haas

p. 20

SWM/Jan Sauer

p. 21

SWM/Jan Saurer

p. 22

SWM/Andreas Lederp. 23

Giglio Pasqua

Print
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Stadtwerke München GmbH
Emmy-Noether-Strasse 280992 Munich
Germany
Phone: +49 (0) 800 796 796 0
E-mail: info@swm.de
www.swm.de