Last year, we presented our roadmap for RWE’s medium-term development: the Strategy Agenda 2012. It focuses on profitable growth and reducing CO₂ emissions, aiming to continue adding value. We are pursuing six goals, which we intend to achieve by 2012:

• Earnings growth in our core markets: Our focus is directed especially to markets which are most important to RWE at present: Germany and the UK.
• Stronger regional diversification: We want the share of earnings achieved by our activities outside Germany to increase to between 40 and 50 %. In fiscal 2008, it was 27 %.
• Value-added growth by expanding the renewable energy business: We want to enlarge our renewable generation base to 4.5 GW. This would be more than three times its current level.
• Improved emissions balance: We plan to reduce CO₂ emissions substantially. Our target for 2012 is 20 % less than the current level. This excludes the impact of growth investments on our emissions balance.
• Expansion of our midstream gas position: We intend to increase our purchasing volume from 40 to 60 billion cubic metres a year.
• Strengthening of our upstream position: We want to increase annual gas and oil production to about 12 million cubic metres of oil equivalent by 2012/2013. In gas terms, this corresponds to roughly 12 billion cubic metres. This would be twice as much as in the financial year just ended.

In our pursuit of these goals, we want to make all our business processes more efficient and reduce costs. In August 2008, we more than doubled our target of improving earnings from €600 million by 2010 to €1.2 billion. The reference year is 2006. We aim to achieve the new target figure by the end of 2012.

Furthermore, we are rolling out a comprehensive investment programme. We must make investments today to secure our market share tomorrow. Only by doing so will we continue to earn stable and attractive returns in the future. Our power plant and grid activities and–to an increasing degree–our renewables-based electricity generation business are pivotal to this accomplishment. In addition, we are rigorously expanding our gas business. The construction of new gas storage facilities and pipelines, of which the Asian-European Nabucco pipeline is the most prominent example, and the liquefied natural gas (LNG) business are further projects. In total, our budget for capital expenditure on property, plant and equipment for this and the next three years amounts to €6.5 billion per annum.

We constantly evaluate options available to expand our existing portfolio through acquisitions. However, we only consider acquisitions if they meet our financial criteria. The most important yardstick is the internal rate of return (IRR), which must at least equal the cost of capital plus an additional return. After the planned acquisition of Dutch-based energy utility Essent (see the chapter events after the period under review), we will initially focus on the company’s integration. However, smaller-scale acquisitions are still conceivable.