RWE continues to streamline Group structure

In the face of increasing competitive pressure on European energy markets, RWE is continuing on the path taken in 2007 towards a more efficient Group structure. End Quote

(1888PressRelease) September 27, 2010 - The Executive Board of RWE AG informed the Supervisory Board about the planned reorganisation of the Group at their meeting today.

* Reorganisation of Germany business
* Pooling of Central Eastern and South Eastern European activities
* Dr. Ulrich Jobs to leave the company
* Considerably leaner Holding structure

The company’s longstanding close co-operation with the Group’s employee representation committees will ensure that they are involved in the implementation measures.

RWE is facing uncertain economic framework conditions and burdens in its core business. To secure the future viability of the Group, the operational businesses must be strengthened and further developed, administrative and overhead functions reduced and the company’s customer contact intensified, especially in Germany. Increases in climate protection targets, rising prices for raw materials, accompanied by stagnating electricity and gas prices as well as the fiscal interventions expected in Germany (e.g. nuclear fuel tax) have an impact on earnings potential. To counteract these trends, RWE is continuing to work towards increasing efficiency within the Group, reducing costs and streamlining the organisational structure.
Pooling of German business activities

An important element of this restructuring process is the pooling of German business activities. The existing company Rheinland Westfalen Netz AG, which today runs the distribution grid business and is responsible for RWE’s sharholdings in German municipal utilities, will in future act as head office and coordinate and steer the German sales and distribution business as a whole as well as Effizienz GmbH. Dr. Arndt Neuhaus, Bernd Boeddeling, Dr. Heinz-Willi Moelders, Dr. Joachim Schneider and Dr. Bernd Widera will take the helm of the company. Dr. Hanns-Ferdinand Mueller, Achim Suedmeier and Ralf Zimmermann will be responsible for sales and distribution. This reorganisation will come into effect on 1 January 2011.

“Our aim is for more of our employees to have direct contact with our customers locally – whether it be to residential and business customers, or to our partners in the municipalities and municipal utilities. So basically anywhere they can create added value that can be reflected in concrete earnings results”, said Dr. Juergen Grossmann, CEO of RWE. “It’s about reducing the share of central interface and administrative functions to make way for more business-focused tasks with operational responsibility. These measures are necessary to maintain RWE’s competitiveness and strength of performance.” The Executive Board expects to reallocate tasks from the Group Holding to other areas, for example to growth sectors such as RWE Innogy and RWE Effizienz. The aim is to reduce the number of employees at the RWE Holding to some 400 and to decrease the number of departments by about half. Key to this process will be the in-Group labour market which will be reinforced and expanded. Other areas to come under review are investments, disposal of certain business areas and adjustment of financial and dividend planning.
Realignment in Central Eastern and South Eastern Europe

The same targets have been set for the international activities of the Group. The national companies in the business division Central Eastern and South Eastern Europe will be pooled under one umbrella, RWE East, headquartered in Prague. The Business Development division, which is responsible for development and management of international growth projects, will also be grouped under this umbrella. It will be led by Martin Herrmann, Karl Kraus, Dr. Marie-Theres Thiell and Dr. Filip Thon.

“These markets remain important growth markets for RWE. But in these regions too, competition is on the increase and for this reason we are streamlining the business to become more efficient. Our guiding principle here is to gain more room for manoeuvre and to strengthen local responsibility in these regions. Today we made some important decisions that will secure the future viability of our RWE Group“, said Dr. Rolf Martin Schmitz, Member of the Executive Board of RWE AG.
RWE Executive Board to have five members

Organisational streamlining will begin in the Group Holding with the reduction in the number of members of the Executive Board of RWE AG to five. Dr. Ulrich Jobs will leave the company on 30 September 2010 by mutual agreement.

Dr. Manfred Schneider, Chairman of the Supervisory Board of RWE AG, expressed his thanks to Ulrich Jobs: “As a true expert in the energy industry, he has accompanied the operational business through many periods of change. We would like to express our sincere thanks to Ulrich Jobs for his outstanding achievements for RWE AG. One of our most experienced colleagues is leaving the company. Ulrich Jobs can look back on over 30 years of a very successful career with the Group. We wish him all the best in his plans for the future.”

Ulrich Jobs has been with the RWE Group since 1977. He started his career at what was then Rheinbraun AG, going on to hold various national and international management positions along the entire value chain of the Group. Ulrich Jobs was heavily involved in the liberalisation process of the energy markets when the aim was to secure the future viability of lignite in an ever tougher competitive environment. After the open-cast mining and power station activities were brought together under one roof, leading to the founding of RWE Power AG as a management company, he headed up the mining business in the Rhine region for two years, subsequently becoming CEO of the Czech gas business in 2004. There, he became Chairman of the Board of RWE Transgas in 2005, securing RWE’s competitiveness at a time when the Czech gas market was being liberalised.

In April 2007, Ulrich Jobs was appointed member of the Executive Board of RWE AG. Until February 2008, he was also Chairman of the Board of RWE Power. Some of the large-scale power station projects Ulrich Jobs was involved in were the new gas-fired power station in Lingen, the hard-coal twin unit power station in Hamm and the lignite power station with optimised systems technology (BoA) in Neurath.

In the process of Group realignment, Ulrich Jobs became Chief Operating Officer (COO) in February 2009, responsible for RWE’s operational business. When RWE Energy was dissolved in 2009, Ulrich Jobs passed responsibility for the operational business in Germany to Dr. Rolf Martin Schmitz.
New distribution of roles on RWE Executive Board

Downsizing the Executive Board will be accompanied by a simplification of responsibilities at the Holding and a reduction in interfaces. In order to create clear areas of responsibility and to accelerate the decision-making process, Dr. Leonhard Birnbaum will be responsible for the management of all commodity positions in the Group. He will be in charge of RWE Supply & Trading, the commercial centre of RWE AG. Leonhard Birnbaum will also head up the other internationally focused companies RWE Innogy, RWE Technology and RWE Dea and will continue to be responsible for Group Strategy, M&A and Research & Development. Dr. Rolf Martin Schmitz will take charge of the national companies that are aligned along the energy value chain of power generation, distribution networks and sales. In addition to the Germany division with its pooled responsibility for sales and networks and RWE Power, this will also include the activities of RWE in the Netherlands and Belgium, the UK and Central Eastern and South Eastern Europe. Rolf Martin Schmitz will therefore be responsible for the overall optimisation of all processes in the areas of power generation, networks and sales and distribution for the Group as a whole.

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