Keizerslaan 20 Boulevard de l'Empereur, 20 B-1000 Brussels
PRESS RELEASE
Tel.: +32 (0)2 546 70 11 Fax: +32 (0)2 546 70 10
25 February 2011
Elia presents strong yearly results, thanks to successful integration of 50Hertz; market coupling extended to Germany and Scandinavia •
Elia group publishes strong yearly results for 2010 in spite of low average 10-year OLOs, with a rise in the equity per share to € 33.29 1 .
•
The net profit per share, excluding one-off items, rises 29.3% in spite of a capital increase of € 293.3 2 million (25% new shares) in June 2010; the proposed dividend is € 1.40 gross per share.
•
Integration of 50Hertz into the Elia Group was successfully completed, and a 10year Eurobond worth €500 million successfully issued by Eurogrid GmbH.
•
The investment programme in Belgium and Germany is implemented; a very high quality of electricity supply is achieved.
•
Publi-T increases its stake to 45.37%, thereby becoming the main reference shareholder after the withdrawal of GDF SUEZ.
•
APX and Belpex join forces; Elia generates capital gains of € 9.6 3 million, with 60% of this going to shareholders and 40% for the benefit of the consumers.
1
Equity (attributable to the Owners of the Company) / number of shares (end of period): 33.29€ Equity (attributable to the Owners of the Company) / weighted average number of shares (end of period): 36.80€ 2 Capital increase of € 299.4 million minus € 6.1 million of costs. 3 Following IFRS the capital gain amounts to € 8.4 million.
1
1. IFRS key figures Consolidated results of Elia, the Belgian high-voltage grid operator, for 2010, as per the International Financial Reporting Standards (IFRS): Consolidated results 2010 (millions €)
31 December 2010
31 December 2009
1.037,5
771,3
REBITDA
409,4
327,9
24,9%
EBITDA
687,9
327,9
109,9%
Operating profit (REBIT)
281,9
225,8
24,8%
Operating profit, including non-recurring items (EBIT)
560,4
225,8
148,2%
Finance result
(123,2)
(120,5)
2,2%
Income taxes
(34,0)
(20,0)
70,0%
401,7
84,0
378,3%
123,2
84,0
46,7%
7,36
1,75
321,6%
2,26
1,75
29,3%
1,40 31 December 2010
1,38 31 December 2009
Total assets
5.904,0
4.451,9
32,6%
Equity, attributable to the Owners of the Company
2.007,2
1.365,4
47,0%
Net financial debt
2.551,4
2.444,4
4,4%
36,80
28,40
29,6%
Number of shares (end of period)
60.355.217
48.270.255
25,0%
Weighted average number of shares (end of period)
54.549.957
48.082.774
13,5%
Operating income
Basic earnings, including non recurrent items, attributable to the Owners of the Company Basic earnings, excluding non recurrent items, attributable to the Owners of the Company Basic earnings, including non-recurrent items, per share (€) Basic earnings, excluding non-recurrent items, per share (€) Dividend per share (€) Balance sheet (in million €)
Equity per share (€)
Difference (%) 34,5%
1,4% Difference (%)
EBITDA = EBIT + depreciation / amortization + changes in provisions REBITDA = recurring EBITDA (excluding one-off items)
Financial The Elia Group’s acquisition of 60% of 50Hertz had a positive impact on its consolidated revenue in 2010. As the acquisition was completed in late May 2010, only the results of the period from June to December 2010 were included in Elia’s consolidated income statement (revenue of € 275.0 million and net profit, excluding non-recurrent items, of € 28.6 million; the two figures represent 60% of the total). The results for the first five months were directly booked as consolidated shareholders’ equity (opening balance) and therefore benefit Elia shareholders. The significant rise in the EBITDA, EBIT and net profit including non-recurrent items (EBITDA up 109.9%, EBIT up 148.2%, and net profit up 378.3%) is due to the fair value of the acquired assets being greater than the acquisition price. As a result, the Elia Group, on the basis of a Purchase Price Allocation (PPA) 4 has booked a once-only non-cash income (gain on bargain purchase) of €286.5 million. 5 You will find further details of the financial performance of activities of the two transmission system operators (Elia Transmission in Belgium and 50Hertz Transmission in Germany) below in the individual segment reporting sections. The Group’s net financial debt hardly increased due to the following factors: 4 As a consequence of the acquisition the purchase price had to be processed in the financial statement of the acquiring party. Under IFRS a goodwill allocation or gain on bargain purchase had to be made under IFRS with the help of a Purchase Price Allocation or ‘PPA’. In a PPA, all property, debts and (conditional) services to be identified are valued at fair value. 5 See a more detailed calculation of the gain on bargain price in Annex g on page 16
2
• •
the net financial debt of Elia Transmission (Belgium) fell by €59.2 million; in October 2010, 50Hertz Transmission (Germany) issued a Eurobond worth €500 million, but had a cash position of €219 million on 31 December 2010; 60% of this net financial debt is recorded at Elia Group level; this debt is guaranteed only by the German activities.
Shareholders’ equity for the Group was up 47% compared with 31 December 2009, rising from € 1,365.4 million to € 2,007.2 million. The main reasons for this were: • the capital increase of € 293.3 million in June 2010; • the gain on bargain purchase of € 286.5 million that had to be recorded because of the acquisition of 50Hertz. This led to a 29.6 % rise in the equity per share, from € 28.40 to € 36.80, in spite of a 13.5 % increase in the weighed average number of shares, from 48.1 million to 54.5 million. The net profit (excluding non-recurrent items) per share rose by 29.3 %, from €1.75 to € 2.26, in spite of 25% new shares being issued as part of the increase of capital to finance the 60% stake acquired by 50Hertz. The Board of Directors will recommend to the General Meeting of Shareholders on 10 May 2011 to pay out a gross dividend of € 1.40 per share, i.e. a net dividend of € 1.05 per share, or a net dividend of € 1.19 per share with a VVPR strip.
1.A. Segment reporting for Elia Transmission (Belgium) The 2010 results of Elia Transmission for its TSO activities in Belgium as per the International Financial Reporting Standards (IFRS) are as follows: Consolidated results 2010 (millions €)
31 December 2010
31 December 2009
Difference (%)
Operating income
763,3
771,3
-1,0%
EBITDA
336,8
327,9
2,7%
Operating profit (REBIT)
229,6
225,8
1,7%
Finance result
(112,7)
(120,5)
-6,5%
Income taxes
(20,8)
(20,0)
4,0%
94,6
84,0
12,6% Difference (%)
Basic earnings, attributable to the Owners of the Company Balance sheet (in million €)
31 December 2010
31 December 2009
Total assets
4.796,8
4.451,9
7,7%
Net financial debt
2.385,2
2.444,4
-2,4%
EBITDA = EBIT + depreciation / amortization + changes in provisions
3
Financial (IFRS) Elia Transmission’s revenue in Belgium remained more or less unchanged in 2010 compared with the same period in 2009. The following table provides more details of changes in the various revenue components. Detail revenue (in million €)
31 December 2010
Grid connection revenue Grid use revenue Revenues from the reversal of surpluses from previous years (decision by the regulator) Ancillary services revenue International revenue Other revenue
31 December 2009
Difference (%)
33,6
32,8
2,4%
539,2
509,9
5,7%
34,1
22,8
115,2
108,0
6,7%
28,0
28,7
-2,4%
n.r.
50,3
37,6
33,8%
Subtotal revenue
800,4
739,8
8,2%
Deviations from approved budget (settlement mechanism)
(37,1)
31,5
Total revenue
763,3
771,3
n.r. -1,0%
Grid connection revenue rose 2.4 %, mainly due to an increase in the number of new connections for industrial customers in the first half of 2010 compared with 2009. The 5.7% increase in grid use revenue is a result of the continuation in 2010 of the general recovery in the Belgian economy that started in late 2009. Ancillary services revenue rose 6.7 % due to the increase in business activity, resulting in a rise in transmitted volumes. International revenue fell 2.4 % in relation to 2009, mainly as a result of further optimisation of the utilisation of border capacity by Elia and all market parties. The strong growth in other revenue (up 33.8 %) is mainly due to a rise in technical services and expertise to third parties (up € 1.3 million), to IAS 19 6 (up €1.6 million) and IFRIC 18 7 (up € 9.2 million). The operating result for the year was € 41.9 million (= budget surplus) more than the budget approved by CREG for 2010 as regards non-controllable costs and revenue, principally because of less corporate income tax (€ 19.5 million), less outlay for ancillary services (€ 9.4 million), lower financial charges (€ 0.9 million), the HGRT dividend (€ 0.5 million), capital gains on the sale of Belpex, Coreso and CASC (€ 9.7 million), and a lower-than-budgeted price index (€ 4.3 million) plus higher revenue mainly from imbalance tariffs (€ 12.4 million), with these items being partially offset by lower auction revenue from international transmission capacity (down € 18.3 million). The EBITDA (up 2.7%) and EBIT (up 1.7%) also remained virtually unchanged compared with 2009. Net finance expenses (down 6.4%) benefited from the capital gains on the sale of Belpex (€ 8.4 million), the moratorium interest on the tax payable of € 93.8 million since 2008 (€ 6.6 million) and a € 59.2 million drop in the net financial debt. Income tax expense rose less rapidly than the net profit, as the capital gains on financial fixed assets (Belpex, Coreso, CASC) are tax-free. The consolidated IFRS net profit rose 12.6%, from € 84 million in 2009 to € 94.6 million in 2010 as a result of the following items 8 : 1.
a drop in regulated profit due to lower OLOs (down € 5.1 million);
6 IAS 19: Annual recalculation of recoverable costs in relation to future retirement obligations 7 IFRIC 18: Transfer of assets from customers; customer contributions in grid connections are recognised fully in IFRS as revenue and are no longer deducted from investments as previously. 8 Items 1-6 concern the regulatory context in Belgium
4
2. 3. 4. 5. 6. 7.
the charge for writedown and disposals of fixed assets (up € 0.8 million); increased additional savings and revenue (up € 1.4 million); CREG decision regarding 2009 9 (down € 3.2 million, as opposed to up € 0.3 million in 2009); costs of capital increase and acquisition of 50Hertz (down € 7.0 million); capital gains from the sale of Belpex and the HGRT dividend (two financial shareholdings that are part of the RAB); 60% of these were paid to Elia (up € 5.4 million compared with € 0.7 million in 2007); increase in IFRS adjustments during 2010 (up € 19.9 million): this increase is due mainly to the capitalisation of the costs for the increase of capital (up € 6.4 million), the full additional entry in the proceeds from customer contributions (up € 9.3 million), withdrawal of retirement obligations through annual recalculation and additional payments (€ 17.2 million), less the net effect of deferred taxes on all IFRS entries (down € 7.3 million), less activated software (down € 2 million) and Elia Re consolidation (down €2.4 million).
Total assets increased by 7.7 % to € 4.796.8 million, mainly due to the capital increase of € 293.3 million in June 2010. The net financial debt fell 2.4 % or € 59.2 million, primarily as a result of the aforementioned increase of capital and a decrease in working capital. Operational Consumption in the Elia control area rose 5.8% from 81.7 TWh in 2009 to 86.6 TWh in 2010, thanks primarily to the economic recovery. The overall electricity consumption is practically back to the pre-crisis level, up 13.6% from 2009 for industrial customers who are connected directly to the Elia grid, while distribution system operators (small and medium-sized enterprises and residential customers) notched up a 1.4% increase. The net offtake of electricity from the Elia grid in Belgium rose 3.4% from 73.6 TWh in 2009 to 76.2 TWh in 2010, thanks to the economic recovery and also the growing volume of local generation among industrial customers and the increasing energy generation from renewable sources such as wind and biomass, which inject their energy directly into the distribution systems. In 2010 Belgium was again a net importer of 0.5 TWh. Whereas 1.8 TWh was exported in 2009, the situation was reversed in 2010 with net imports of 0.5 TWh, mainly consisting of electricity flows from France. In 2009, Belgium’s net exports to France amounted to 4.8 TWh, as opposed to 2.3 TWh in 2010. The total electricity flows between Belgium and its neighbouring countries rose 16.5% from 20.8 TWh in 2009 to 24.2 TWh in 2010. As in previous years, security of supply in 2010 remained at a high level, with an average interruption frequency of 0.11 (compared with 0.09 in 2009) per customer and an average interruption time (AIT) of 4 minutes and 43 seconds per customer, for an average operational reliability of over 99.999%. Investments Investments of €146.6 million were initially planned for 2010. In view of the sharp drop in volumes since the end of 2008, the investment plan was adjusted downwards to €117 million. In reality, a net sum of €113.9 million 10 was invested in 2010, mainly in upgrading high-voltage substations and laying highvoltage cables. For instance, the high-voltage substations at Ixelles (36 kV), Bruegel (380 kV), Monceau (150 kV), Zandvliet (380 kV), Seraing (220 kV) and Berneau (220 kV) were upgraded and/or renovated. The highvoltage line between Harmignines and Monceau (70 kV) was renovated and underground cables were laid between Monceau and Marcinelle (150 kV) and Beerse and Koekhoven (70 kV). The upgrading (from 300 MW to 800 MW) of the interconnection line with France (Aubange-Moulaine) with a second three-phase transmission line was also commissioned in 2010. Other important projects currently being studied are the Stevin, Brabo and Nemo projects. The Stevin project relates to the development of a 380 kV connection from Eeklo to the Belgian coast to link up with the offshore wind farms (2,000 MW) in the North Sea, as well as a possible connection with the United Kingdom (Nemo). The Stevin project is necessarily in line with the European, federal and Flemish energy 9 In a decision of 25 June 2010 relating to 2009, CREG indicated that it did not agree with certain aspects of the results (additional savings in particular are gross rather than net, according to CREG, and the application procedures for black-start contracts were questioned). Elia contests several provisions of this decision and has lodged an appeal. 10 Including IFRS adjustments for software activation (IAS 23 (borrowing costs) and IFRIC 18), this gives €135.4 million.
5
and climate policy. The Brabo project concerns the upgrading of the high-voltage links in the Port of Antwerp and the improvement of the security of supply in the region in the long term. Furthermore, Elia and Amprion (formerly RWE Transportnetz) are studying potential interconnections between Belgium and Germany. The first technical and economic results of this research have revealed the appeal of a 500 MW direct current connection.
1.B. Segment reporting for 50Hertz Transmission (Germany) The table below shows the results of 50Hertz Transmission’s transmission system operator activities in Germany in accordance with the International Financial Reporting Standards (IFRS). The results of 50Hertz Transmission, consolidated at Eurogrid International level for the period from June to December 2010, were included in the consolidated Elia Group IFRS figures as at 31 December 2010 (60% proportionate consolidation). The first five months were booked as shareholders’ equity (opening balance), thereby benefitting Elia shareholders. For the sake of transparency, the figures for the 12 months of 2010 are also reported using the International Financial Reporting Standards (IFRS) as a basis. A comparison with 2009 is not relevant both because of the significant beneficial regulatory changes that were introduced on 1 January 2010 and because 50Hertz Transmission was still part of the Vattenfall Group in 2009. Results 50Hertz Transmission (Germany) (millions €)
31 December 2010 60% proportionate consolidation
Operating income
275,0
REBITDA
Proforma 12 months 2010 11 100% 791.7
72,6
206.8
351,2
671.0
52,3
142.0
Operating profit, including non-recurring items (EBIT)
330,8
606.2
Finance result
(10,5)
(27.4)
Income taxes
(13,2)
(39.6)
Basic earnings, including non recurrent items, attributable to the Owners of the Company
307,1
539.3
Basic earnings, excluding non recurrent items, attributable to the Owners of the Company
28,6
75.0
EBITDA Operating profit (REBIT)
Balance sheet (in million €)
31 December 2010
Total assets Net financial debt
11
1.386,8
-
166,3
-
60% to be taken into the result of the Elia Group (proportionate consolidation)
6
Financial (IFRS) 50Hertz Transmission’s revenue is described in more detail in the table below. Detail revenue (in million €)
12
Proforma: 100 % of 12 months 2010
Vertical grid revenues Horizontal grid revenues Ancillary services revenue Other revenue Subtotal revenue
640,0 28,8 127,3 47,3 843,5
Deviations from approved budget (settlement mechanism)
(51,8)
Total revenue
791,7
Vertical grid revenue pertains to revenue for the use of the 50Hertz net. Horizontal grid revenue pertains to revenue for the use of the sea cable between Germany and Denmark (Kontek cable) as well as all auction revenue from the transmission capacity on the border with the Czech Republic and which connects the 50 Hertz grid with Transpower (TenneT Germany). Ancillary services revenue is comparable with that of Elia and concerns mainly passing on the grid users costs (reservation and balancing costs) that 50 Hertz has to incur in order to be able to provide a continuous balance on the grid. Other revenue pertains primarily to telecom revenue, subsidies, activated costs of own works, technical services and expertise to third parties and contributions from customers. Owing to the acquisition of 50Hertz Transmission, the corresponding purchase price has to be recorded in the financial statement. Under IFRS a goodwill allocation or a gain on bargain purchase will be made with the help of a Purchase Price Allocation or ‘PPA’. In a PPA, all property, debts and (conditional) services to be identified are valued at fair value. This PPA exercise was carried out for Eurogrid GmbH (German financing and acquisition structure above 50Hertz Transmission), whereby Eurogrid GmbH delivered a once-only oncash and definite income (gain on bargain purchase) of €477.5 million. The net financial debt consists of a 10-year Eurobond for €500 million issued in October 2010 and a liquidity position of €219 million. 60% of these sums were then consolidated. Operational The net offtake of electricity from the 50Hertz grid came to 63 TWh, 7% up on the same period the previous year, when it came to 58.9 TWh. 50Hertz imported 17.8 TWh in 2010 (17 TWh in 2009), mainly from the Czech Republic and TenneT Germany, and exported 29.4 TWh (30.8 TWh in 2009), mainly to Poland and TenneT Germany. Therefore, net exports of electricity were down 16% from 13.8 TWh to 11.6 TWh. The maximum offtake in the 50Hertz grid amounted to 14,058 MW in 2010, up 2.2% from the maximum offtake in 2009 (13,759 MW). Investments To meet grid users’ requirements, 50 Hertz Transmission invested €179.2 million in 2010. The main onshore investments were made on the South-West Coupling Line (€9 million), the North Line (€22.3 million in Mecklenburg-Pommeren), the interconnection between Germany and Poland (€4 million) and the finalisation of a new transmission control centre (€9.8 million). Other important onshore investments were the additional transformer capacity in South Dresden (€8.8 million) and the construction of a new 380/110 kV substation in North Freiberg (€5.2 million).
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60% to be taken into the result of the Elia Group (proportionate consolidation)
7
Investments through the 50Hertz Offshore subsidiary focused on a connection with the offshore wind farm Baltic 1 (€68.9 million) and Baltic 2 (€4.6 million) in the Baltic Sea. Moreover, a part of the Kontek undersea cable with Denmark was replaced so that it could be recommissioned in 2010. 2. Significant events in 2010 Sale by Electrabel / GDF SUEZ of its remaining shareholding in Elia and change in the composition of the Board of Directors After selling an initial part of its stake in Elia to Publi-T on 30 March 2010, Electrabel / GDF SUEZ sold the remainder to institutional investors on 18 May 2010, thereby bringing the free float of the Elia share to 52.10%. The directors representing Electrabel were replaced by three new directors: Jennifer Debatisse, Dominique Offergeld and Leen Van den Neste. Independent director Luc Van Nevel succeeded Ronnie Belmans as the Chairman of the Board of Directors. The general meeting of shareholders of 13 January 2011 decided to extend the Board of Directors by two directors, bringing the total to 14. Elia and Industry Funds Management (IFM) finalised the acquisition of the German TSO 50Hertz Transmission on 19 May 2010 Elia and IFM, one of the major global infrastructure investment managers, acquired the German transmission system operator 50Hertz Transmission from Vattenfall Europe on 19 May 2010. This operation gave IFM a 40% and Elia acquired a 60% stake in that company. On the basis of a shareholder agreement between Elia and IFM, the acquisition was defined as a joint venture. The Group is now in the top five transmission system operators in Europe, operating a grid that supplies more than 29 million people in Belgium and Germany and that is committed to providing secure access to a larger and greener energy mix, thus reinforcing security of supply, while simultaneously increasing grid security for its customers. Elia capital increase of €293.3 million for the 100% subscribed The capital increase launched by Elia between 8 and 18 June 2011 to finance the acquisition of a 60% stake in the German grid operator 50 Hertz Transmission was fully subscribed. The new shares were quoted for the first time on 25 June 2010. Eurogrid GmbH successfully placed a 10-year Eurobond worth €500 million Eurogrid GmbH (the parent company of 50Hertz Transmission) successfully issued an initial €500 million tranche of a Eurobond programme totalling €2.5 billion. The proceeds will be used to repay short-term bank debts and to finance the investment programme of 50Hertz, headquartered in Berlin, for the forthcoming years. It was the first time that a German transmission system operator had carried out such an operation. The subscription of the first tranche elicited great interest, attracting 200 investors from 25 countries. Therefore, the price of the first 10-year tranche could be fixed at mid-swap 2.66% + 127 basis points. Integration of 50 Hertz into the Elia Group successfully completed Although 50Hertz was taken in and financed as a separate entity of the Elia Group, important steps have already been taken for its operational integration into Elia’s activities. From when it was acquired on 19 May 2010 until the end of 2010, operational synergies were developed in ten workgroups (regulation, market mechanisms, purchasing, IT, finance, risk management, personnel, communication, etc.) consisting of teams from both transmission system operators, and best practices of both companies were implemented. All the objectives set have been achieved for the benefit of our customerss, shareholders and the future integrated European electricity market. Elia and TenneT take a major step towards the consolidation of power exchanges; Belpex is now integrated into APX-ENDEX; capital gains of €9.6 13 million In April 2010, Elia and TenneT announced their intention to contribute their respective stakes in the Belgian power exchange Belpex (60% and 10%) to APX-ENDEX that already organises the short-term market for electricity in the Netherlands and the United Kingdom. Elia generated capital gains of €9.6 million from this transaction, 60% for the shareholders, and 40% for the benefit of the rates. This operation is completely in line with the European strategy of the two transmission system operators and with the ambition of APX-ENDEX to improve the European electricity market further. Elia has acquired a 20% stake in APX-ENDEX and will also participate in the management bodies of APX-ENDEX. The transaction was successfully completed once the approval of the European authorities was obtained. APXENDEX is now owned by Elia (20%), Fluxys (3%), Gasunie (21%) and TenneT (56%).
13
Following IFRS the capital gain amounts to € 8.4 million
8
The transaction is a crucial step towards the integration of the power exchanges on the northwest European market, and confirmation of the work APX-ENDEX and Belpex have carried out ever since they were created in a broader European context. Belpex will be assigned its own areas of activity in the new organisation, namely for green electricity certificates in the Belgo-Dutch market. Thanks to this operation, wholesale prices on the (short-term) market for electricity will be fixed in an efficient and coordinated manner on all markets, and cross-border trade will be optimised, to the benefit of the Belgian and European consumers. Terna & 50Hertz transmission join Coreso On 26 November 2010, the transmission system operators Terna (Italy) and 50Hertz Transmission (Germany) became shareholders in Coreso, thereby joining Elia, RTE and National Grid. Coreso is now active in a region of 215 million inhabitants or about 45% of the European Union. Launch of Central West European and Scandinavian market coupling mechanism On 9 November 2010, the TSOs and power exchanges of Central West Europe and Scandinavia coupled their electricity markets successfully to create an integrated day-ahead wholesale market that stretches from France to Finland and from Germany to Norway. Since 11 January 2011, the 700 MW direct current connection between the Netherlands and Norway has likewise been included in the Interim Tight Volume Coupling between the Scandinavian countries and Central West Europe. These initiatives have led to a sizeable increase in exchangeable volumes and have made a major contribution to the market liquidity and security of supply in both regions. 3. Significant events after 31 December 2010 There were no important events after the closing of the financial year. 4. Outlook 2011 result The Elia Group can look to 2011 with confidence. As the Belgian result for 2011 depends on parameters that will be known (e.g. inflation figures of December 2011) or can be calculated (in particular the Belgian ten-year rate, the beta factor of the Elia share and the total investment of Eurogrid/50Hertz) at the end of 2011, the Elia Group cannot make any concrete profit forecasts for 2011. The budget for the period 2012-2015 will be submitted to the national regulator CREG in 2011, and an agreement on this is expected in the second half of 2011. Investments in 2011 Elia Transmission expects to invest some €120 million in the Belgian high-voltage grid in 2011, while 50Hertz Transmission has proposed an investment budget of €260 million (mainly offshore) for the same year. In addition, the Elia Group is also taking part in the common research study for a major grid in the North Sea and the Baltic Sea to connect the different countries and offshore wind farms. To that end, ‘Friends of the Supergrid’ was created on 23 March 2010. Other research projects in progress include the Renewables Grid Initiative (RGI) and the European ‘Twenties’ project, both of which are geared to promoting the integration of renewable energy generation in the electricity grid. 5. Excerpt from the Auditors’ report “The joint statutory auditors Ernst & Young Bedrijfsrevisoren/Réviseurs d’Entreprises represented by Jacques Vandernoot and Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren/ Réviseurs d’Entreprises represented by Alexis Palm have confirmed that the audit procedures, which have been meticulously carried out, have not revealed any material adjustments which would have to be made to the accounting data included in the present report. However, the joint statutory auditors want to draw the reader’s attention to the uncertainty resulting from the outcome of the tax audit and the final settlements to be approved by the regulators and resulting from the application of the regulatory tariff mechanisms" 6. Financial calendar Publication of annual report 2010 General meeting of shareholders Update Q1 2011 Payment of dividend for 2010
early April 2011 10 May 2011 13 May 2011 25 May 2011
9
Publication of half-yearly results 2011 Update Q3 2011
26 August 2011 15 November 2011
About Elia: Elia is the Belgian transmission system operator, transmitting electricity efficiently, reliably and securely from producers to distribution system operators and major industrial users. Elia is responsible for importing and exporting electricity from and to neighbouring countries. Elia owns the entire Belgian very high voltage grid (150 to 380 kV) and some 94% (ownership and user rights) of the Belgian high-voltage grid (30 to 70 kV). The Elia grid comprises 5,608 km of overhead lines and 2,775 km of underground connections and is a key link between electricity markets in northern and southern Europe. It also links Belgian producers and consumers. Belgium's recent investment in interconnection capacity with its neighbours makes it one of the most open and interconnected grids in Europe. Elia has recently expanded its activities on a broader European level and, following its acquisition of German TSO 50Hertz and in cooperation with Industry Funds Management (IFM), is now one of the top five transmission system operators in Europe. For further information, please contact Elia: Media: Eva Suls Axelle Pollet
+32 (0)2 546 73 78 +32 (0)2 546 75 11
+32 (0)477 48 80 09 +32 (0)475 84 38 91
eva.suls@elia.be axelle.pollet@elia.be
Investor relations: Bert Maes
+32 (0)2 546 72 39
+32 (0)472 40 69 97
bert.maes@elia.be
Website: This press release and its annexes are available on the website www.elia.be ANNEXES (Tables with key figures in € million) • Consolidated statement of financial position (31 December 2010 – 31 December 2009) • Consolidated income statement (31 December 2010 – 31 December 2009) • Consolidated statement of comprehensive income (31 December 2010 – 31 December 2009) • Consolidated statement of changes in equity (31 December 2010 – 31 December 2009) • Consolidated statement of cash flows (31 December 2010 – 31 December 2009) • Segment reporting – reconciliation (31 December 2010) • Gain on bargain purchase (31 December 2010)
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ANNEXES: 1. Financial reporting a.
Consolidated statement of financial position (31 December 2010 – 31 December 2009)
(in million â‚Ź)
31 December 2010
31 December 2009
Assets Non-current assets
4.994,1
4.044,8
Property, plant and equipment
3.010,9
2.089,6
Intangible assets
1.751,1
1.730,1
114,7
105,8
Investments in equity accounted investees
29,2
9,4
Other financial assets (including derivatives)
79,5
84,9
8,7
25,0
909,9
407,1
Trade and other receivables
Deferred tax assets Current assets Inventories Trade and other receivables Income tax receivable Cash and cash equivalents Deferred charges and accrued revenues
14,5
13,7
513,8
214,9
6,3
0,7
366,0
174,6
9,3
3,2
5.904,0
4.451,9
Equity
2.007,2
1.367,1
Equity attributable to owners of the Company
2.007,2
1.365,4
1.500,6
1.207,3
Total assets Equity and liabilities
Share capital Share premium
8,5
8,5
51,4
36,0
Hedging reserve
(20,7)
(18,7)
Retained earnings
467,4
132,2
0,0
1,7
Reserves
Non-controlling interest Non-controlling interest
0,0
1,7
3.211,0
2.804,7
2.917,3
2.618,9
103,8
142,9
Derivatives
31,4
28,2
Provisions
44,6
4,8
Deferred tax liabilities
93,3
6,8
Other liabilities
20,6
3,1
685,8
280,1
Non-current liabilities Loans and borrowings Employee benefits
Current liabilities Loans and borrowings Provisions Trade and other payables Income tax payables Accruals and deferred income Total equity and liabilities
0,1
0,1
43,6
13,9
448,8
233,9
14,0
0,2
179,3
31,9
5.904,0
4.451,9
11
b.
Consolidated income statement (31 December 2010 – 31 December 2009)
31 December 2010
(in million â‚Ź) Continuing operations Revenue Cost of sales Gross profit Other income Services and other goods Personnel expenses
31 December 2009
939,5 (5,9) 933,6 98,0 (457,2) (133,9)
733,7 (5,6) 728,1 37,6 (303,5) (124,4)
(127,5)
(102,1)
(31,1)
(9,9)
281,9
225,8
278,5 560,4 (123,2) 21,8 (145,0)
0,0 225,8 (120,5) 12,8 (133,2)
(1,2)
(1,0)
Profit before income tax
436,0
104,3
Income tax expense
(34,0)
(20,0)
Profit from continuing operations
402,0
84,3
Profit for the period,
402,0
84,3
Owners of the Company
401,7
84,0
Non-controlling interest
0,3
0,3
402,0
84,3
7,364 7,364
1,746 1,746
Depreciation, amortization, impairment and changes in provisions Other expenses Results from operating activities, before non-recurring items (REBIT) Non-recurring items Results from operating activities (EBIT) Net finance costs Finance income Finance costs Share of profit of equity accounted investees (net income tax)
Profit attributable to:
Profit for the period
Earnings per share (â‚Ź) Basic earnings per share Diluted earnings per share
12
c.
Consolidated statement of comprehensive income (31 December 2010 – 31 December 2009) 31 December 2010
(in million â‚Ź)
Profit for the period
31 December 2009
402,0
84,3
Effective portion of changes in fair value of cash flow hedges, net of tax
(2,0)
(2,6)
Defined benefit plan actuarial gains and losses, net of tax
17,1
(3,4)
Other comprehensive income for the period, net of income tax
15,1
(6,0)
417,1
78,3
Owners of the Company
416,8
78,0
Non-controlling interest
0,3
0,3
417,1
78,3
Other comprehensive income
Total comprehensive income for the period Profit attributable to:
Total comprehensive income for the period
13
d.
Consolidated statement of changes in equity (31 December 2010 – 31 December 2009) Hedgin g reserve
Retaine d earning s
8,5
(16,1)
153,5
1.348,1
1,6
1.349,7
0,0
0,0
0,0
84,0
84,0
0,1
84,1
0,0
0,0
(2,6)
0,0
(2,6)
0,0
(2,6)
0,0
0,0
0,0
(3,4)
(3,4)
0,0
(3,4)
0,0
0,0
(2,6)
(3,4)
(6,0)
0,0
(6,0)
(2,6)
80,6
78,0
0,1
78,1
0,0
0,0
5,2
0,0
5,2
(in million â‚Ź)
Share capital
Balance at 1 January 2009
1.202,1
Share premiu m
Total
Minority interest s
Total equity
Total comprehensive income for fhe period Profit or loss Other comprehensive income Effective portion of changes in fair value of cash flow hedges, net of tax Defined benefit plan actuarial gains and losses, net of tax Total other comprehensive income Total comprehensive income for the period Transactions with owners, recognised directly in equity
Contributions by and distributions to owners Shares issued
5,2
0,0
- Dividends to owners of the Company
0,0
0,0
0,0
(65,9)
(65,9)
0,0
(65,9)
Total transactions with owners
5,2
0,0
0,0
(65,9)
(60,7)
0,0
(60,7)
1.207,3
8,5
(18,7)
168,2
1.365,4
1,7
1.367,1
1.207,3
8,5
(18,7)
168,2
1.365,4
1,7
1.367,1
0,0
0,0
0,0
401,7
401,7
0,3
402,0
Effective portion of changes in fair value of cash flow hedges, net of tax
0,0
0,0
(2,0)
0,0
(2,0)
0,0
(2,0)
Defined benefit plan actuarial gains and losses, net of tax
0,0
0,0
0,0
17,1
17,1
0,0
17,1
Total other comprehensive income
0,0
0,0
(2,0)
17,1
15,1
0,0
15,1
(2,0)
418,8
416,8
0,3
417,1
(1,6)
(1,6)
Balance at 31 December 2009
Balance at 1 January 2010 Total comprehensive income for fhe period Profit or loss
Other comprehensive income
Total comprehensive income for the period Transactions with owners, recognised directly in equity - Retained earnings Eurogrid GmbH at acquisition date
(1,6)
Contributions by and distributions to owners Shares issued
293,3
0,0
0,0
0,0
293,3
(2,0)
(2,0)
0,0
0,0
0,0
(66,6)
(66,6)
0,0
(66,6)
293,3
0,0
0,0
(68,2)
225,1
(2,0)
223,1
1.500,6
8,5
(20,7)
518,8
2.007,3
0,0
2.007,3
Deconsolidation minority interest - Dividends to owners of the Company Total transactions with owners
Balance at 31 December 2010
0,0
293,3
14
e.
Condensed consolidated statement of cash flows (31 December 2010 – 31 December 2009)
(in million â‚Ź)
31 December 2010
31 December 2009
402,0
84,3
124,0 16,6 1,2
124,1 17,3 1,0
Cash flows from operating activities Profit for the period Adjustments for: Net finance costs Income tax expense Share of profit of equity accounted investees, net of tax Depreciation of property, plant and equipment and amortisation of intangible assets Disposal/sale of property, plant and equipment Impairment losses of current assets Change in provisions Change in fair value of derivatives Change in deferred taxes Changes in fair value of financial assets through income Change in non-cash items Gain on bargain purchase
114,5
97,7
7,6 1,0 -2,6 0,9 17,4 3,3 0,0 -286,5
3,5 0,7 -1,3 -2,4 2,6 0,5 0,9 0,0
Cash flow from operating activities
399,4
328,9
Change in inventories Change in trade and other receivables
0,3
-0,7
-43,0
-14,9
Other Current assets
-12,7
0,0
Change in trade and other payables
119,2
-47,8
Change in other current liabilities
60,1
-7,1
Changes in working capital
123,9
-70,5
Interest paid
-135,7
-102,0
Income tax paid
-19,9
-15,9
Net cash from operating activities
367,7
140,5
Acquisition of property, plant and equipment and intangible assets Acquisition of subsidiary net of cash acquired Investments in equity accounted investees Proceeds from sales of investments Interest received
-199,5 -278,8 -21,2 8,6 2,3
-133,7 0,0 0,0 0,2 6,1
Net cash used in investing activities
-488,6
-127,4
Cash flows from investing activities
Proceeds from issue share capital Expenses related to issue share capital Dividends paid (-)
299,7
4,4
-6,5
-0,1
-66,6
-66,0
Repayment of borrowings (-)
-210,0
-927,9
Proceeds from withdrawal borrowings (+)
297,6
1.123,8
-2,0
0,0
Net cash flow from (used in) financing activities
312,2
134,2
Net increase (decrease) in cash and cash equivalents
191,3
147,3
Minority interest
15
f.
Segment reporting - reconciliation (31 December 2010)
Consolidated results 2010 (millions €)
Operating income REBITDA EBITDA Operating profit (REBIT) Operating profit, including non-recurring items (EBIT) Finance result Income taxes Basic earnings, including non recurrent items, attributable to the Owners of the Company Basic earnings, excluding non recurrent items, attributable to the Owners of the Company Balance sheet (in million €) Total assets Net financial debt
g.
31 December 2010
31 December 2010
31 December 2010
31 December 2010
Elia Transmission (Belgium)
50Hertz Transmission (Germany)
Consolidation entries
Elia Group
763,3 336,8 336,8 229,6
275,0 72,6 351,2 52,3
(0,8) 0,0 (0,1) (0,1)
1.037,5 409,4 687,9 281,8
229,6
330,8
(0,1)
560,4
(112,7) (20,8)
(10,5) (13,2)
0,0 0,0
(123,2) (34,0)
94,6
307,1
0,0
401,7
94,6
28,6
0,0
123,2
31 December 2010 4.796,8 2.385,2
31 December 2010 1.386,8 166,3
31 December 2010 (279,7) (0,1)
31 December 2010 5.904,0 2.551,4
Gain on bargain purchase (31 December 2010)
à 100%
à 60%
€ millions
€ millions
Parent's company value of investment (1)
464,6
278,8
Equity 50Hertz per 31/05/2010 (2)
942,1
565,3
Gain on bargain purchase at 31/12/2010 = [(2)-(1)]
477,5
286,5
Acquisition costs 50Hertz
-13,3
-8,0
Total non-recurring items
464,2
278,5
Gain from a bargain purchase
16