fy_20
DESCRIPTION
http://www.eliagroup.eu/en/investor-relations/~/media/files/EliaGroup/investor-relations2/2008/FY_2007_ResultsElia-v5.pptTRANSCRIPT
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Analyst meeting February 15th, 2008
FY 2007 Consolidated resultsFinancial impact new regulation
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Disclaimer
• This presentation is only provided for general information purpose about Elia and its activities. The included statements are neither reported results nor other historical information. They are not provided to serve as the basis for any evaluation of Elia, and cannot be binding and/or enforceable upon Elia.
• As forward-looking statements, they are subject to assumptions, risk and uncertainties, actual future results may differ from those expressed in or implied by such statements.
• Although Elia uses reasonable cares to present information which is up-to-date to the best of Elia's knowledge, Elia makes no representation or warranty whatsoever as to the adequacy, accuracy, completeness or correctness of such information. • Elia will not be liable for any consequences arising from or related to the use or interpretation of the information contained or absent in this presentation.
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Summary
Highlights 2007
Financials 2007
Outlook 2008
Agenda
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Summary
• Highlights 2007- Energy Consumption influenced by mild weather, increased
penetration of cogeneration and renewables - Approved 4 year tariffs (2008-2011 included)- Full realisation of investment plan- Successful management of controllable costs- Growing success of Belpex- Update on Elia’s shareholdership and participations
• Financials 2007- Improved profit margin with respect to forecast- Increase in dividend to € 1,30 a share
• Outlook 2008- New regulation with 4-year tariffs- Capex 2008-2011
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Summary
Highlights 2007
Financials 2007
Outlook 2008
Agenda
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1. Energy Consumption in Elia’s balancing zone
Total Energy consumption in Elia’s balancing zone decreased slightly to 88,8 TWh in 2006 from 89,4 TWh in 2006
This is mainly due to :
• Mild temperatures throughout the year
• Increasing local production at industrial clients
• Energy from renewables (wind & biomass) directly injected in distribution network
Injected energy Elia’s balancing zone per month
0100020003000400050006000700080009000
Jan Feb Maart
April
Mei Juni Juli Aug Se
pt Okt Nov Dec
GWh/ month
Real 2005 - GWh Real 2006 - GWh Real 2007 - GWh
Montly deviation from normal average temperature (KMI based)
-2,0 -1,0 0,01,02,03,04,05,06,07,0
J an Feb Maart April Mei J uni J uli Aug Sep Okt Nov Dec
° C
2005 2006 2007
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2. Evolution of tariffs since 2001First increase in tariffs since 2001 due to new capex, higher financing First increase in tariffs since 2001 due to new capex, higher financing costs, flat tariffs (incl. inflation 09-11) & less surpluses from the past to costs, flat tariffs (incl. inflation 09-11) & less surpluses from the past to reversereverse
Tariffs for use of the grid and tariffs for ancillary services:comparison 2001 - 2008
0
2
4
6
8
10
12
14
16
2001 2002 (Q4)
2003 (Q2 toQ4)
2004 2005 2006 2007 2008 2009 2010 2011 2001 2002 (Q4)
2003 (Q2 toQ4)
2004 2005 2006 2007 2008 2009 2010 2011 2001 2002 (Q4)
2003 (Q2 toQ4)
2004 2005 2006 2007 2008 2009 2010 2011 2001 2002 (Q4)
2003 (Q2 toQ4)
2004 2005 2006 2007 2008 2009 2010 2011
On the 380/220/150 kV network At transformer output to the 70/36/30 kV network On the 70/36/30 kV network At transformer output to medium voltage
Annual power System management Ancillary services Loss compensation
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ETSO European comparison 2006 tariffs
0
5
10
15
20
25A
ustri
a
Bel
gium
Cze
ch R
epub
lic
Den
mar
k E
ast
Den
mar
k W
est
Est
onia
Finl
and
Fran
ce
Ger
man
y
Gre
at B
ritai
n
Gre
ece
Hun
gary
Irela
nd Italy
Lith
uani
a
Net
herla
nds
Nor
way
Pol
and
Por
tuga
l
Rom
ania
Slo
vak
Rep
Slo
veni
a
Spa
in
Sw
eden
( €
/ MW
h )
Infrastructure Losses System Services Other regulatory charges
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Breakdown CAPEX Breakdown CAPEX
Replacements
Driven by internal consumption
Driven by interconnections with neighbours
Driven by import levels & generation localisation
CAPEX 2007€ 142,6 m
44% 48%
3. Investments 2007
• Full realisation of capex plan 2007
• Focus on reliability and internal demand
as well as for
• supporting local production at site of industrial clients
• increased co-generation and renewables
• managing international flows
17%3%
29%
51%
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Investments 2007• 150 kV underground cable between
Monceau & Thy-le-Château
• Strengthen electricity supply in South-west part of Belgium
• Includes new 150 KV transformer in Thy-le-Château
• Completed in May 2007• Investment of about € 15m
• Completion of replacement of 70kV line Beerse-Turnhout-Mol
• Replacement of overhead line • 117 pylons • To be completed in Q1 2008• Investment of about € 12m
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• Extensions and developments at the port of Antwerp
• New 150 kV Petrol high-voltage station
• Extension of high-voltage station “Scheldelaan” to connect new production unit of Exxon (WKK)
• Started in Q1 2007 and to be completed in December 2008
• Investments of about € 20m
Investments 2007
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• Purchase of 3 phase shifters
• Van Eyck & Zandvliet high -voltage station
• The biggest of their type in the world (each 1400 MVA)
• Enable to better spread the energy flows on the Elia grid
• Optimise interconnection flow with the Netherlands and increase border capacity, mainly in the summer
• Started in Q3 2006;
• In service planned 1H 2008 due to technical issue with equipment as delivered by manufacturer
• Investment of about € 54 m
Investments 2007
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4. Successful management of controllable costs
Average interruption per client per year on Elia-net
0:00:00
0:07:00
0:14:01
1999 2000 2001 2002 2003 2004 2005 2006 2007
Tim
e (h
:mm
:ss)
AIT (min) AI T 5-year (min)
• Highly resilient network• Meshed network• Improved installation of
safety and control equipment
• Average interruption time per client and per year: 3min. 32sec.
Good operational results : very reliable network > 99,999%Good operational results : very reliable network > 99,999%
• Total net controllable costs decreased with 2,7% since 2004 despite inflation of 2% a year thanks to :
• Increased efficiency• Operational excellence• Replacement of retired
personnel
In € m (IFRS) 2004 2005 2006 2007
Personnel costs 122,9 117,2 116,5 114,0G&A expenses 147,8 144,0 146,2 150,9Telecom & third party serv. -11,2 -9,4 -9,7 -12,3
Total net controllable costs 259,5 251,8 253,0 252,6
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5. Belgian Power Exchange (Belpex)
• 2007 was 1st full year of operation
• 24 diversified participants (suppliers, traders, producers) from 6 countries (NL,CH,UK,FR,BE,DE,CZ) at Dec 31st, 2007
• In 2007 average daily volume was 20.788 MWh with the following average electricity prices :
- Belix €41,85/MWh- Belix peak (8am-20pm) €53,56/MWh- Belix off-peak (20pm-8am) €30,13/MWh
• Record volume of 53.306 MWh on December 20th, which equals 21,3% of average Belgian electricity demand
• Market coupling induced an average export volume of 2.438 MWh and an average import volume of 2.896MWh
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Belpex volume growth in 2007
Monthly baseload volume & average prices
608 424
436 012
516 800502 009
654 124
365 175
659 608
733 335
684 643
795 093 785 118
846 546
34.830.4
26.8 28.7
40.6
28.7 30.3 28.135.9
61.6
87.4
67.3
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
MWh
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
€/MWhBase load volume Powernext price APX price Belpex price
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FR-BE-NE TLC 2007 Usage of transmission capacities
Border Belgian-French border
Belgian-
Dutch
border
Constrained Unconstrained
Constrained F ≠ B ≠ NL F = B ≠ NL
Unconstrained
F ≠ B = NL F = B = NL
1,6 %
9,4 %
26,4 %
62,7 %
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Elia System Operator
Elia Asset(1)
99.99%
Elia Re 05/02/2002
HGRT 12/2001
BEL Engineering 26/12/2003
100% 100%
Licensed System Operator
Network Owner
(1) 1 share Publi-T, 1 share Electrabel (2) Includes 0,54% Employee shareholdership (estimate)
• Engineering consultancy firm mainly involved in the design and project management of electricity network-related infrastructure
• Captive reinsurance company
• 17% Shareholder of French-based electricity power exchange Powernext
• Foreseen to increase participation to 51%
Elia: A Single Economic Unit
24.5%
Suez/ Electrabel Publi-T Publipart
24,36% 2.54%33.03%
Freefloat
40,07% (2)
6. Update Shareholdership& participations
• Belgian power exchange
Belpex 07/07/2005
60%
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Summary
Highlights 2007
Financials 2007
Outlook 2008
Agenda
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Overview of Key IFRS Figures
ChangeIncome statement (€ million) 2007 2006 In %Consolidated turnover 731,7 711,5 2,8%EBITDA (1) 308,5 292,6 5,5%Operating result (EBIT) 214,7 204,0 5,2%Financial result (104,0) (98,3) 5,8%Taxes (32,9) (29,8) 10,4%Consolidated net profit 77,6 75,9 2,2%Net profit per share (€) 1,62 1,58 2,5%Dividend per share (€) 1,30 1,28 1,6%Balance sheet (€ million) 31/12/2007 31/12/2006Total assets 3.977,9 3.898,1 2,0%Equity 1.339,9 1.308,6 2,4%Net debt 2.140,0 2.074,9 3,1%Equity per share (€) 27,88 27,32 2,0%
Total number of shares (end of period) 48.061.695 47.898.052 0,3%(1) EBITDA = EBIT + depreciation + changes in provisions
IFRS
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Average RAB 2007 3.512Reference equity (33%) 1.159Cost of equity 6,05%Equity reference remuneration (A) 70,08
Av. equity / Av. assets 33,91%Deviation on ref. equity 0,91%Equity deviation remuneration 2,72%D-factor (B) 0,87
Over-depreciation (C) -8,18
Fair remuneration (A+B+C) 62,77
Appeal BM 05 & Settlement BM 06 5,02
Net profit Belgian GAAP (tariffs) 67,79
Consolidatie Belpex / HGRT 0,26
I FRS reconciliation 9,56
Net profit I FRS 77,61
Bottom-up Approach of Elia’s P&L in 2007 (EUR m)Bottom-up Approach of Elia’s P&L in 2007 (EUR m)Determination of net profitDetermination of net profit
2007 Profit and Loss
653,6
68,1
77,6
654,0
9,9
Charges Revenues
Tariff
Non tariff
Costs
Net profit
(1)
(1) OLO of 3,423%; Beta of 1,033 and a risk premium of 2,54%(2) Av. Equity =1.303,1 and Av. Assets = 3.842,8
(2)
(3)
(3) OLO of 3,423%; deviation rate of 70bp and tax rate of 33.99%
Shortfall
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1.338,71.340,8 16,112,2
(135,2)
78,1 13,0 13,7
2007 BelgianGAAP
Employee benefits
Regulatory assets
Deferredtaxes
Capitalisationsoftware
Elia Re Others 2007 IFRS
IFRS Impact on Equity and Net Profit IFRS Impact on Equity and Net Profit for year ending 31 December 2007for year ending 31 December 2007
Net
Pro
fitEq
uity
Reconciliation Be GAAP - IFRS
77,668,0
4,82,3
2,31317,8
2007 BelgianGAAP
EmployeeBenefits
RegulatoryAssets
Elia Re Deferred taxes CapitalisationSoftware
2007 IFRS
(1)
(1) Mainly relates to Inventory valuation (€3,7m), goodwill Bel engineering (€ 5,6m) and IAS 32/39 on the interest rate swaps (€7,1m)
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Evolution 2007 RABEvolution 2007 RAB
Regulated Asset Base 2007
Average RAB 3.442 3.512
3.583
3.443
(90) (9) 142
98
2006 Depreciation Divestments Capex Change inWCR
2007
(1)
(1) Includes € 6 million goodwill decommissioning
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31,4
21,0
81,9
9,9
(46,5)
97,7
2007
Inventory & trade
debtors <1 year
Deferred charges
and accrued
income
Total Change in
WCR
Trade creditors & others
Accrued charges
& deferred income
Shortfall 2007
Working Capital Requirements 2007
Changes in Working Capital Requirements (EUR m) Changes in Working Capital Requirements (EUR m) (1)(1)
(1)(1) Based on Belgian GAAP accountsBased on Belgian GAAP accounts
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Evolution of Costs between 2007 and 2006 (EUR m)Evolution of Costs between 2007 and 2006 (EUR m)
29,832,9
98,3104,0
88,593,818,519,6
114,0 116,5
146,2150,9
137,8138,8
2007 2006
Personnel Expenses
Ancillary services(reserve energy)
DepreciationOthers
Financial charges
Taxes
Raw materials, Services & Other goods
Breakdown Costs
654,0 635,6
-2,1%
+6,0%
+5,8%
+0,7%
+3,2%
+10,4%
(1) Tax authorities claimed € 93,6m (without notice of fraud) which was booked as debt. This was compensated by a receivable of the same amount as agreed with external experts. Elia, in conjunction with the CREG, decided to appeal against this decision.
(1)
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10,4
9,712,3
11,615,8
43,1
62,6
2007 2006
Breakdown of Non – Tariff Revenues in 2007 and 2006 (EUR m)Breakdown of Non – Tariff Revenues in 2007 and 2006 (EUR m)
Non - Tariff Revenues
Others
Telecom & third party services
Fixed assets own construction capitalised
International revenues (due to TLC efficiency)
94,3
68,1
+26,8%
-31,2%
+36,2%
(1) In 2007 « Others » includes € -13m reversal of the regulatory asset as a result of a new collective agreement (one-off payment)
(1)
-3,1
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463,2406,7
85,649,8
134,8129,0
29,432,3
2007 2006
Breakdown of Tariff Revenues in 2007 and 2006 (EUR m)Breakdown of Tariff Revenues in 2007 and 2006 (EUR m)
Tariff Revenues
Connection tariffs
Tariffs for ancillary services
Tariffs decrease for grid use (due to weather conditions and increased co-generation and renewable energy services directly injected on DSO grid)
653,6 677,2
-4,3%
13,3 Shortfall on costs 46,7 Surplus revenues (tariff & non-tariff)
Tariffs due to previous surpluses
60,0
-12,2%
71,9%
9,9%
9,9
0,5 Operational 4,9 Appeal BM 2005 4,5 Settlement BM 2006
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Surpluses/I n millions of EUR (Shortages) 2004 2005 2006 2007 2008 2009 2010 2011 Total
Surplus 2003 134,6 25,4 36,4 36,4 36,4 134,6Bonus 2003 3,2 3,2 3,2Used -25,4 -39,6 -36,4 -36,4 -137,8Total 2003 137,8 0,0 0,0 0,0 0,0 0,0Surplus 2004 118,9 28,0 9,8 9,8 23,8 23,8 23,7 118,9Bonus 2004 3,5 3,5 3,5Used -28,0 -13,3 -9,8 -51,1Total 2004 122,4 0,0 0,0 0,0 23,8 23,8 23,7 71,3Surplus 2005 35,1 7,4 27,7 35,1Bonus 2005 2,3 2,3 2,3Surplus 2006 3,8 3,8 3,8Used -7,4 -33,8 -41,2Totaal 2005 41,2 0,0 0,0 0,0Surplus 2006 56,2 5,6 50,6 56,2Malus 2006 1,8 1,8 1,8Used -5,6 -5,6Totaal 2006 58,0 0,0 52,4 52,4
Reversal decided by regulator for period 2008-2011 20,9 22,8 34,0 46,0 123,7
Shortage 2007 -0,5 -0,5 -0,5Appeal B/M 2005 -4,9 -4,9 -4,9Bonus 2006 -4,5 -4,5 -4,5Totaal 2007 -9,9 -9,9 -9,9Total Surplus 349,5 113,8
Overview treatment of surpluses
Overview of allocation and use of total surplusesOverview of allocation and use of total surpluses
(1) To be allocated by CREG in the next regulatory period
(1)
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883,5 883,5
996,8 996,3
200250,0
0
500
1.000
1.500
2.000
31/ 12/ 2007 31/ 12/ 2006
Shareholders' loans Eurobonds Banks LT European Investment Bank
€ millions 2007 2006 Net debt 2.140,0 2.074,8Leverage (D/D+E) 62,1% 61,9%EBITDA / Gross interest 3,0 3,0Net debt / EBITDA 6,9 7,1Average cost of debt 5,0% 4,8%% Fixed of gross debt 73,2% 74,7%
Standard & Poor’s rating:Long Term: A- Outlook:
Stable
Elia benefits from a strong credit ratingElia benefits from a strong credit rating
Financial Debt Position
2.190,3 2.119,8
Unused Amount Interest rateCredit lines (€ m)
European Investment Bank 65 Euribor + 5 bpCommercial Banks : Short term 570 To be negotiated
60,0 40,0
(1) In 2009, a shareholders’ loan of € 387,7m has to be repaid. Refinancing is currently investigated and will depend on the market conditions at that time
(1)
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1,17 1,27 1,27 1,28
2,05
1,30
80,91%
89,60%
77,59% 79,26%
89,90% 91,80%
- 0,4
0,1
0,6
1,1
1,6
2,1
2002 2003 2004 2005 2006 2007
In E
UR
70%
75%
80%
85%
90%
Dividend Pay- out ratio
Elia’s dividend policy ensures a steady dividendElia’s dividend policy ensures a steady dividend
Dividend Policy
• Increase in dividend to € 1,30 per share• Pay-out ratio over 2007 Belgian Gaap result is 91,8% (80,5% under IFRS)
(1)
(1) Contains exceptional dividend of EUR 0,88
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Summary
Highlights 2007
Financials 2007
Outlook 2008
Agenda
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• 4-year tariff mechanism• Concept of return on RAB and incentivisation• Embedded financial debt• Corporate governance principles
• 4-year tariff starts on January 1, 2008• Return based on European benchmark• Indexing formulae for controllable costs• Reform of federal regulator July 20th, 2006
June 8th, 2007
Update on legal & regulatory aspects
New Royal
Decrees
Law29/4/99
CREG
• Determination of total revenues/fair remuneration• Determination of RAB & its evolution• Tariff structure (numbers & composition)• Clarification e.g. controllable / non-controllable costs• Allocation of balances between real & budgeted revenues/costs
• Parameters of incentivisation
• Admission first tariff proposal by Elia June 29th, 2007
• Admission adjusted tariff proposal by Elia November 26th, 2007
• Approval of 4-year tariffsApproval of 4-year tariffs December 14December 14thth, 2007, 2007
June 1st, 2005
December 18th, 2007
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Most important changes 1. 4-year tariffs from 01/01/2008
2. Split between controllable & non-controllable costs & revenues
3. Clarification on definitions : Working capital requirements D-factor : Equity / RAB
4. Reporting to regulator : semestrial
5. Balance between real and budgeted non-controllable costs to be allocated by council of ministers
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Implementation of concept “controllable – non controllable” costs & Implementation of concept “controllable – non controllable” costs & revenuesrevenues
4-year tariff system…
Charges Revenues
Tariff
Non Tariff
Non Controllable(NC) Costs
Net profit
Controllable(C) Costs
CNC
Charges Revenues
Net profit
Costs
Tariff
Non Tariff
(1)
(2)
(1) Mainly consist of purchases of materials, services and other goods & remuneration except the ancillary services & pension costs for retired employees
(2) Mainly consist of Telecom services, Third party services, surplus value on sale fixed assets and insurance claims
PAST FUTURE
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Reclassify costs, revenues => controllable & non-controllableReclassify costs, revenues => controllable & non-controllable
Charges Revenues
Tariff
Non Tariff
Non Controllable(NC) Costs
Net profit
Controllable(C) Costs
CNC
NC
C
Net profitTariff
…with netting of costs & revenues
(1) Mainly consist of purchases of materials, services and other goods & remuneration except the ancillary services & pension costs for retired employees
(2) Mainly consist of Telecom services, Third party services, surplus value on sale fixed assets and insurance claims
(1)
(2)
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Composition of future net profit
1. Fair remuneration Equity remuneration based on formula Deduction over-depreciation of the past (€ 8,2m net)
till Q3 2012
2. Decommissioning Goodwill from decommissioning passed into tariffs Extra profit reserved for financing investments
3. Incentivisation on controllable costs Ceiling set at same amount as efficiency gain (X-factor)
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1. Fair remuneration
The FORMULA : (art.8 §2 R.D. June 8th, 2007)
33% * RAB * [ OLO(2) + (risk premium * Beta) ]
+ (Equity/RAB(1) - 33%) * RAB * (OLO(2) + 70 bp)
(1) In case (Equity / RAB) < 33% than fair remuneration equals33% * RAB * [ OLO + (risk premium * Beta) ]
(2) OLO = Belgian 10 year bund
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Fair remuneration(Equity remuneration)
• Equity divided in two parts:
part #1 : till 33% of RABpart #2 : from 33% of RAB till real Equity Value
• Fair remuneration on Equity:
part #1 : Belgian 10year bund + (eta risk premium)with risk premium = 3,5 % & eta = minimum 0,3
part #2 : Belgian 10year bund + 70 bp
Note : Real Belgian 10year bund (daily average) is computed every year and ex-post
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Fair remuneration(Determination of eta)
1 2 3 4 5 6 7
eta 2008 2002 2003 2004 2005 2006 2007 2008
eta 2009 2003 2004 2005 2006 2007 2008 2009
eta 2010 2004 2005 2006 2007 2008 2009 2010
eta 2011 2005 2006 2007 2008 2009 2010 2011
ELECTRABEL ELIA
• Beta is computed for a period of 7 years
• Elia Beta OR minimum of 0.3 is applicable from 2012 onwards
• Transitory period for Beta calculation for period 2008 till 2011 Weight of Electrabel beta becomes less important over time Weight of Elia beta becomes more important over time
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2. Decommissioning (goodwill remuneration)
• € 1,7 billion goodwill is allocated to fixed assets
• In case of decommissioning, relating goodwill is remunerated through the tariffs
• No amortization in profit and loss accounts (generates extra EBIT & net profit)
• Taxes due to extra EBIT covered by tariffs
• Net profit from decommissioning to be reserved for financing investments and equity value
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Decommissioning(Explanatory Example)
• Fixed assets of € 2m net book value is decommissioned• Allocated goodwill to this fixed asset is € 3m
Impact on tariffs (Additional costs to be remunerated)1. Exceptional depreciation € 2m2. Goodwill decommissioning € 3m3. Additional taxes € 1,5 m (€3m/(1-33%))Total € 6,5m
Impact on revenues• € 6,5m as depreciation, taxes and goodwill are all remunerated
Impact on costs• € 2m exceptional depreciation• € 1,5m additional taxes
Impact on net profit• € 3m from goodwill decommissioning• This profit has to be reserved in equity as to finance investments
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X factor (controllable costs)
€ m
2008 2009 2010 2011
255,3
-4m–6m
-7m -8m = -25m in total
CC approved by regulator includes –X
• Regulator approved € 251,3m net controllable costs for 2008 (255,3m net CC minus X = € 4m cost savings)• Net controllable costs will evolve in 2009-2011 with CPI-X • Fixed cost savings in € (X) determined by R.D. (Dec 18th, 2007)• Total outperformance (Y) agreed with regulator as max X
(1) Controllable non-tariff revenues
(1)
270,3
255,3260,6
265,3
251,3254,6
258,3262,3 CPI-X
Budget including CPI -X
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EX-ANTE€ m
NCC (non-controllable costs)
CC (1)
CC real
EX-POST
IncentiveY = max (X)
Recompute for inflation(non controllable)
Incentivisation (controllable costs)
(1) After deduction of X savings by regulator for the period 2008-2011 on controllable costs
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Summary of changes
New system Old system1) Fair remuneration
Belgian 10-year bund Year X Year X-2Risk premium 3,50% 2,54%
Beta Elia share with min. 0.3 ELB share (recalculated)Remun. Equity > 33% 10year bund + 70bp (10year bund + 70bp) * (1-t)
2) DefinitionsD-factor Equity / RAB Equity / Balance sheet
Working capital Req. Excluding Fin. Debt Including short term Fin. Debt
Deducted from RAB Deducted from RABIncluded in tariffs Not included in tariffs
4) Incentivisation on controllable costs
3) Decommissioning
5) Balance of non- controllable costs
Allocated by Council of Ministers Allocated by CREG
Max. €25m period 08-11 Bonus Malus
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3.568
(90) (17) 161
31
2007 Depreciation Divestm. &Decomm.
Capex Change inWCR
2008
Evolution 2008 RAB as approved by CREGEvolution 2008 RAB as approved by CREG
Outlook 2008: RAB
Average RAB 3.501 3.611
(1)
(1) Contains € 14,2m of goodwill reduction due to decommissioning
3.653
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CREGAverage RAB 2008 3.611Reference equity (33%) 1.192Cost of equity 5,17%Equity reference remuneration (A) 61,6
Av. equity / Av. RAB 36,45%Deviation on reference equity 3,45%Equity deviation remuneration 4,63%D-factor (B) 5,8
Over-depreciation (C) -8,2
Fair remuneration (A+B+C) 59,2
Goodwill decommissioning 14,2
Controllable cost incentive 0,0
Net profit as set by regulator 73,4
Determination of net profit 2008 by the regulator (Belgian GAAP)Determination of net profit 2008 by the regulator (Belgian GAAP)
Outlook 2008: Fair remuneration
(1)
(1) OLO of 3,9278%; Beta of 0,3542 and a risk premium of 3,5%(2) OLO of 3,9278% and deviation rate of 70bp(3) To be recomputed ex-post based on real OLO, real beta, real RAB & Equity,
real decommissioning and real controllable cost savings
(2)
Not available for profit distribution;€14,2 is the estimatedyearly amount for theperiod 2008-2011
=(1)
(2)
(3) = Y
(=1+2+3)
(3)
(3)
(3)
(3)
(3)
(3)
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Breakdown CAPEX Breakdown CAPEX
Outlook 2008-2011: CAPEX
Replacements
Driven by internal consumption
Driven by interconnections with neighbours
Driven by import levels & generation localisation
CAPEX 2008-2011 € 615 m
CAPEX 2008€ 161m
44% 48%
13%
5%
33%
49% 46%
35%
7%
12%
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New Projects, Services, Activities
• Major projects in study phase• Enforcement of Antwerp port & region• 380 kV line towards Belgian coast (off-shore wind energy)• Interconnections with UK and Germany
• Services
• to be launched in 2008- Intraday allocation mechanism at border with NL- Belpex : Continuous DAM & Intraday market- Increased participation in Powernext through HGRT
• Contemplated for 2009 and beyond- Regional market between Benelux – Germany – France
• Activities• pursuing « operational excellence »• first activities (consulting) abroad
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Questions &
AnswersInvestors Relations – Contact details Bert Maes
Tel: + 32 (0)2/546.72.39Mail: [email protected]: http://www.elia.be
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Analyst meeting February 15th, 2008
FY 2007 Consolidated resultsFinancial impact new regulation