FY 2010 consolidated results Outlook 2011
Brussels February 25th, 2011
1
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 upto-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.
2
Agenda Summary Operational highlights Financials 2010 Outlook 2011
3
Summary • Operational highlights - Consumption almost back at pre-crisis level - Full realisation of investment plan; excellent network reliability - European market : market coupling, enlargement of CASC & Coreso - Update on Elia’s shareholdership and participations
• Financials 2010 - Excellent results despite lower OLO - Successful realisation of € 500m Eurobond at Eurogrid GmbH - Dividend increased to € 1,40 a share
• Outlook 2011 - Capex Elia Group - Market integration & Innovation in international perspective
4
Agenda Summary Operational highlights 2010 Financials 2010 Outlook 2011
5
Energy Consumption : Q4 back at pre-crisis level 9.000 jan 8.000
feb
mar apr
may
7.000
oct jun
jul
aug
sep
nov
dec
Elia’s network 86.6 TWh
(1)
: consumption increased to
(88.3 TWh in 2008 ; 81.7 TWh in 2009)
[GWh]
6.000 5.000
2008 2009 2010
4.000 3.000 2.000 1.000 0
6.000 Apr 5.000 Jan
Feb
Mar
May
Jun
Jul
Aug
Sep Oct Nov
Dec
50Hertz’s network: consumption increased to 63.0 TWh (62.3 TWh in 2008; 58.9 TWh in 2009)
[GWh]
4.000
3.000
2.000
1.000
0
(1) The Elia consumption indicator covers the majority of electricity consumption. It includes all production directly connected to the Elia grid plus net import-export balance
6
2008 2009 2010
2. Among the lowest tariffs in Europe Components of transmission tariffs (EUR per MWh)
(1)
(1) The data of Norway were not available in the beginning of 2010 when the comparison was made for the expected tariffs 2010
7
3. Investments Elia Transmission 2010 CAPEX 2010 : € 113.9 m
• Capex adjusted
Non electrical investments 5%
• from € 146.6 million initially • postponement customer projects
Driven by renewables & generation localisation 14% Interconnections 7%
• Main drivers Replacements 49%
• RES integration • Replacements • Internal demand
Driven by internal consumption 25%
• Interconnections
• Excellent reliability • 99,999%
8
Investments 50Hertz Transmission 2010 CAPEX 2010 : € 179,2 m
• Capex Non electrical investments 8%
• From € 157m in 2009
Driven by internal consumption 17%
Replacements 7%
• Main drivers = RES • Onshore : € 106,3 m • Offshore : € 72,9 m
• Main drivers Driven by renewables & generation localisation 68%
• RES integration • Internal demand
• Excellent reliability • 2,5 incidents per 100km
9
4. Focus on climate change & energy policies is key‌ 1.200 1.000 Today
600
Offshore wind
400 200
10
2030
2029
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Elia with 50Hertz = ideal position
2028
Onshore wind
0 2000
TWh
800
... in a context of market integration 2011 Undersea cable UK & NL
Baltic market
9 November 2010 ´ ´
´
´ ´
2012/2013 South-West Market ´ ´
´ ´
Central West Market + Nordic
´
2012/2013 ´
Central South market
´ ´ ´
´
Fast evolution towards regional electricity markets on a European level
11
Such as day-ahead market coupling CWE-Nordic Price convergence in CWE (10/11/2010 – 27/01/2011) All different 0,0%
DE=BE=NL<>FR 0,8%
DE=NL <>FR=BE 18,8%
BE=FR=NL 13,4%
BE=FR 4,5%
All equal 61,7%
BE=NL 0,2% DE=NL 0,6%
DE=BE=NL<>FR
12
DE=NL <>FR=BE
BE=FR=NL
BE=FR
BE=NL
DE=NL
All equal
All different
… and consolidation of power exchanges Tennet 56.1%
Gasunie 20.9%
Fluxys 3.0%
Elia Nordpool Spot
20.0%
APX – Endex Belpex
APX Group 100%
BELPEX ´ ´ ´
Tennet 51%
Elia 24.5%
HGRT 52,8%
Powernext 50%
EPEX Spot
13
RTE 24.5%
EPEX Spot
Enlargement of CASC.eu & Coreso • Capacity Allocation Service Company •
Incorportated in 2008 by 7 TSOs out of 5 countries
•
2010 : Enlarged to 12 TSOs out of 10 countries
•
Equal shareholdership by RTE, Elia, Creos Lux, Tennet, Amprion, APG, EnBW Transportnetze, Swissgrid, Slovenija, Terna, 50Hertz Transmission and Hellenic TSO
Business evolution •
ITVC shadow auctions with the Nordic countries
•
Extension towards other EU countries
• Regional technical coordination center •
Incorporated in 2008 by RTE and Elia, National Grid joined 2009
•
2010 : Enlarged to Terna and 50Hertz Transmission
Business evolution •
Controls now a region of 215m people or 43% of the EU
•
Extension to other EU countries
14
Agenda Summary Operational highlights Financials 2010 Outlook 2011
15
Consolidated key figures Elia Group 2010
2009 771,3 327,9 327,9 225,8 -120,5 -20,0 84,0 84,0 1,75 1,75 1,38
Elia Group Consolidated (Elia+60% of 50Hertz) 2010 1037,5 409,4 687,9 560,4 -123,2 -34,0 401,7 123,2 7,36 2,26 1,40
Change in % 34,5% 24,9% 109,8% 148,2% 2,2% 70,0% 378,2% 46,7% 320,6% 29,1% 1,4%
Balance sheet (€m) Total assets Equity attributable to the equity holders of the Company Net debt Equity per share (€) (based on # of shares at year-end)
31-Dec-09 4.451,9 1.365,4 2.444,4 28,29
30-Dec-10 5.904,0 2.007,2 2.551,4 33,29
32,6% 47,0% 4,4% 17,7%
Total number of shares (end of period)
48.270.255
60.355.217
25,0%
Elia Group Consolidated Income statement (€m) Consolidated turnover REBITDA EBITDA Operating profit, including non recurring items (EBIT) Financial result Taxes Consolidated net profit, including non recurrent items Consolidated net profit, excluding non recurrent items Profit, including non-recurrent items, per share (€) Profit, excluding non-recurrent items, per share (€) Dividend per share
16
Segment reporting : Elia & 50Hertz Transmission XElia Transmission
o 50Hertz Transmission
Elia System Operator
Belgium
Germany
Elia Asset 100%
CASC 9,46%
HGRT 24,5%
Coreso 22,49%
Elia Re 100%
Elia Engineering 100%
APX 20%
Eurogrid CVBA 60% Eurogrid GmbH 100% 50Hertz Transmission 100%
CAO 12,5%
17
Coreso 10,0%
EMCC 20%
50 Hertz Offshore 100%
Gridlab GmbH 100%
Key figures Elia Transmission 2010 Good results within a stable regulatory framework IFRS Income statement (€ million) Consolidated turnover EBITDA (1) Operating result (EBIT) Financial result Taxes Consolidated net profit Balance sheet (€ million) Total assets Net debt
2010 763,3 336,8 229,6 (112,7) (20,8) 94,6 31/12/2010 4.796,8 2.385,2
2009 771,3 327,9 225,8 (120,4) (20,0) 84,0 31/12/2009 4.451,9 2.444,4
(1) EBITDA = EBIT + depreciation + changes in provisions
•
Operating margins in line with 2009
•
Financial results positively impacted by sale of Belpex to APX and lower debt level
•
Net profit increased due to IFRS adjustments despite lower regulated profit because of lower Belgian 10year bund (OLO)
18
Net profit breakdown 2010-2009 • Belgian GAAP net profit: decrease mainly due to lower OLO, 50Hertz acquisition & capital increase and CREG review of 2009 • IFRS net profit: increase mainly due to much higher adjustments, mainly for employee benefits In million € Fair remuneration Goodwill decommissioning Incentive mechanism Surplus values Belpex & Dividend HGRT CREG review Net profit Belgian GAAP (tariffs) Capital increase & Acquisition 50Hertz Deconsolidation Belpex/Others Total net profit Belgian GAAP IFRS adjustments Total IFRS net result
19
2010 53,5 16,2 7,7 6,1 -3,2 80,3 -7,3 -0,8 72,2 22,4 94,6
2009 58,6 15,5 6,3 0,7 0,0 81,1 0,0 0,5 81,6 2,4 84,0
Difference -5,1 0,7 1,4 5,4 -3,2 -0,8 -7,3 -1,3 -9,4 20,0 10,6
Controllable items : Budget <> Reality
Costs = U -11
Revenues = U + 3,7
31,9 Reality
28,2 Budget
282,4
293,4 (1)
Total outperformance = € 14,7m
X = € 7m
Y = € 7,7m
(1)
20
Reality
Budget
Increase Extra revenues in efficiency (eg third party services)
Consist of € 297,7m agreed by CREG minus € 4,3m indexation correction to give back to tariffs
42,6 m
Revenues = -21,2 m
Reality = 688
Net profit = Budget = 675,6
Reality
Budget
Reality = 393,7
Net profit = U 3,8
Budget = 436,3
Costs =
80,3
Tariff = U 12,4
Reality
Budget
40,0
61,2
Revenues = U -21,2
84,1
Non controllable items : Budget <> Reality
3,8 m
Tariff = 12,4 m
Indexation = 4,3 m
Tariff surplus = 41,9 m
Costs = U - 42,6
21
Overview treatment of regulation surpluses Overview of allocation and use of total surpluses Regulatory account (all amounts in € 000)
To be allocated by CREG
To give back to the tariffs based on tariff decision of 2007 for the period 2008-2011 Use
2009
2010
2011
22.760,00 -22.760,00
34.070,00 -34.070,00
46.028,06
0,00
0,00
46.028,06
Allocated to future tariffs
2012 and beyond
Shortage 2007
-9.897,90
Total 2007 - allocated
-9.897,90
Shortage 2008
-18.249,45
Total 2008 - allocated
-18.249,45
Shortage 2009 Total 2009 - allocated
-31.517,31 -31.517,31
Surplus 2010 + CREG review (malus 2009; gross) CREG Review (specific ancillary services) (1)
41.943,80 3.528,00
Total
Total
41.943,80 3.528,00 46.028,06
-14.192,86
31.835,20
After 3 years (2008-2010) of the first regulatory period, Elia has a difference between budget & reality of only € 4,3 million. Including the 2007 shortage of €9,9m, a total amount of € 14,2m has to be recovered from the next regulatory period
(1) To be recovered by the ARP, not from the bottom line (shareholders)
22
Reconciliation Belgian GAAP - IFRS IFRS Impact on Net Profit as of 31 December 2010 (2,8) 72,2
6,4
18,3
94,6 (9,8)
(1,6)
Deferred taxes on IFRS adjustments
Other
11,9
31/12/2010 Belgian GAAP
Transfer assets from customers
Costs capital increase
Employee benefit
Regulated asset
31/12/2010 IFRS
•
IFRIC 18 imposes immediate recognition in revenues of customer contributions for network connections (+ € 11,9 million)
•
IAS 19 requires yearly recalculation by external actuarian of Employee benefits & relating regulated assets; Increase due to additional cash contributions, lower discount rate & excess returns on assets under management (+€ 18,3-2,8 million)
23
Key figures 50Hertz Transmission 2010 Income statement (€ million) Consolidated turnover REBITDA (excluding non recurring items) EBITDA (1) REBIT (excluding non recurring items) Operating result (EBIT) Financial result Taxes Net profit including non recurring items Net profit excluding non recurring items Balance sheet (€ million) Total assets Net debt
60% from June till December 2010 275,0 72,6 351,2 52,3 330,8 (10,5) (13,2) 307,1 (1) 28,6 31/12/2010 1.452,4 166,3
IFRS
Proforma : 100% 12 months 2010 791,7 206,8 671,0 142,0 606,2 (27,3) (39,5) 539,3 75,0 31/12/2010 2.420,7 277,2
(1) REBITDA = REBIT + depreciation + changes in provisions
•
Comparison with 2009 figures is not useful due to significant changes in the German regulatory framework from 01/01/2010 and because 50Hertz was still a subsidiary of Vattenfall Europe
•
Recurring IFRS full year 2010 result cannot be seen as a reference for 2011 (1) Exlcuding also the € 13,3 million acquisition costs (Elia’s part equals 60% or € 8 million); € 28,6m - € 8m acquisition costs + 286,5m badwill = € 307,1m
24
Reconciliation German GAAP - IFRS IFRS Impact on Net Profit as of 31 December 2010 75,0 57,4 18,1
German GAAP 31/12/10
KWK Strassfurth
(17,6) (1)
(6,4) 17,8
Shortage of Offshore volumes costs 2010; 2006-08 asset to recovered recover in in 2010 2012
Decrease provision M-to-M valuation purchased electricity
61,8 (7,5)
Deferred taxes
13,2
IFRS 31/12/10
Acquisition costs
IFRS 31/12/10 (recurring)
•
KWK Strassfurth is a receivable to be paid in 2011 through the tariffs that cannot be recognised in German GAAP
•
Offshore costs to be recovered in the future from the tariffs cannot be recognised in German GAAP
•
Acquisition costs mainly relate to one-off consulting & advisory costs
(1) Shortage of volumes in 2006-2008 (€ 51m) are recorded as regulatory asset in IFRS equity in PPA; € 17,6m is booked In 2010 as net profit in German GAAP which has to be reversed in IFRS
25
PPA : Completed & Approved Purchase Price Allocation has been completed & final approval received •
IFRS 3 imposes within maximum 1 year a full analysis to allocate the paid goodwill or received badwill through a so-called Purchase Price Allocation (PPA)
•
PPA identifies all assets and liabilities as well as all contingent rights and obligations which all have to be recognised at acquisition date at “Fair Value”
•
PPA was executed at the level of Eurogrid GmbH (acquisition & finance vehicle in Germany) and signed off by the auditors of Eurogrid GmbH
•
PPA revealed a final one off non cash gain on bargain purchase of € 477,5 million Gain from a bargain purchase (in € million)
100%
60%
Acquisition price as of 19/05/2010
464,6
278,8
Consolidated IFRS Equity of 50Hertz as of 31/05/2010
942,1
565,3
Gain from a bargain purchase per 31/05/2010
477,5
286,5
(1) PPA required a correction of € 6,1 million of which 60% for Elia (€ 3,6 million): As per 30/6/2010 €290,1 minus e3,6m = €286,5m
26
Financial Debt Position Elia Group Elia benefits from a strong credit rating and improving credit ratios Standard & Poor’s rating: Long Term: AOutlook: Negative
2.917,4 3.000 2.500
297,6(2)
124,0
2.618,9
31-Dec-10 2.551,4 55,97% 2,82 6,23 5,24% 83,01%
31-Dec-09 2.444,4 64,16% 2,46 7,45 5,31% 81,07%
123,1
2.000 1.500
Net debt (€m) Leverage (D/D+E) REBITDA/Gross Interest Net debt/REBITDA Average cost of debt % fixed of gross debt
(1) 2000,0
2000,0
1.000
Unused credit lines as of 31 December 2010 European Investment Bank Committed bank loans Commited club deal (Germany) Uncommitted bank loans Commercial paper program
Amount (€m) 65 125 500 170 250
Interest rate Euribor +5 bp Euribor + 75 bp Euribor + (120-150) bp To be negotiated To be negotiated
500 495,8
495,8
31/12/2010
31/12/2009
0 Shareholders' loans
27
Eurobonds
Eurogrid GmbH
EIB + Accrued interests
(1) € 2bn Eurobonds has to be refinanced in 2013, 2014, 2016, 2019 at € 500m each year (2) € 500m Eurobond Germany (60% = € 300m) has to be refinanced in 2020
First successful â&#x201A;Ź 500m Eurobond issuance
28
Dividend Policy Elia Group
In EUR
Elia group’s dividend policy ensures a steady and growing dividend 1,8 1,6 1,4 1,2 1 0,8 0,6 0,4 0,2 0
95% 1,27
79,6%
1,28 80,8%
1,30
1,37
1,38
1,4
90% 85%
80,5%
80%
79,3%
75% 70% 68,4%
63,9%
2005
2006
2007
Dividend
2008
65% 60%
2009
2010
Pay-out ratio
• Increase in dividend to € 1, 40 per share despite 25% increase in number of shares • Pay-out ratio over 2010 IFRS results amount to 68,4%
29
Agenda Summary Operational highlights 2010 Financials 2010 Outlook 2011
30
Outlook CAPEX 2011 : Elia Transmission
Driven by renewables & generation localisation 8%
Non electrical investments 10%
• Capex = €120 m
Interconnections 2% Replacements 56% Driven by internal consumption 24%
31
• Main drivers • RES integration • Replacements • Demand
Outlook CAPEX 2011 : 50Hertz Transmission Non electrical Replacements investments 7% 7% Driven by internal consumption 4%
• Capex = €260 m of which • Onshore : € 122 m • Offshore : € 138 m
• Main Drivers: Driven by renewables & generation localisation 82%
32
• RES Integration • Replacements
Main projects for 2011 and beyond •
Stevin: extension 380 kV grid to the coast • Procedure for inclusion in land-use plan (GRUP) launched • Commissioning foreseen in 2015
•
Brabo : 380 kV grid extension Antwerp port area • First phase Lillo-Zandvliet : planning permit procedure launched
•
Allegro : interconnection with Germany • feasibility study concluded and positive; detailed study started
•
Nemo : undersea cable with UK • Feasability confirmed; project phase 3 launched to define technical aspects and licence procedures; commissioning foreseen as from 2016
•
Northern Line : interconnection with Tennet GmbH • Schleswig-Holstein: Planning approval in progress
•
Southwest Coupling Line : 380 kV line towards the South of Germany • Vieselbach-Altenfeld: Planning approval in progress • Altenfeld-Redwitz: Regional Planning Procedure started
•
Baltic 2 : Offshore undersea cable • Connection between windfarm Baltic 1 and windfarm Baltic 2
Elia Group Innovation (R&D) in an international perspective
Active contribution in inter-TSO cooperation on innovation
• Market coupling studies and initiatives: • Pentalateral (Benelux, France, Germany) & Nordic countries • CWE (Central Western Europe) • Grid reinforcement and extension studies and initiatives: • ENTSO‐E 10 year network development plan • North Sea off‐shore working group of EU Commission • Friends of Supergrid • Smart Grid prospective studies and projects, e.g. • European Electricity Grid Initiative (EEGI) • EWIS: Power network reliability for integration of wind power
Strong involvement in EU funded innovation projects
• OPTIMATE: Comparative benefits of several market design options • TWENTIES: Demonstration project to remove barriers to the massive integration of RES in the electricity grid • ECOGRID: Demonstration project of a real‐time electricity market integrating a high percentage of RES and electric vehicles • AFTER: Vulnerability evaluation of electricity networks
34
Elia Group Key role in market integration & RES
35
Questions & Answers Investors Relations – Contact details Bert Maes Tel: + 32 (0)2/546.72.39 Mail: bert.maes@elia.be Website: http://www.elia.be
36
Appendices
37
Outlook 2011 : Fair remuneration Determination of net profit 2011 by the regulator (Belgian GAAP) Average RAB 2011 Reference equity (33%) Cost of equity Equity reference remuneration (A) Av. equity / Av. RAB Deviation on reference equity Equity deviation remuneration S-factor (B)
(1) (3)
38
CREG 3.837 1.266 5,04% 63,9 36,02% 3,02% 4,63% 5,4
Over-depreciation (C)
-8,2
Fair remuneration (A+B+C)
61,1
Goodwill decommissioning
14,2
Controllable cost incentive
0,0
Net profit as set by tariffs
75,3
Not available for profit distribution; â&#x201A;Ź14,2 is the estimated yearly amount for the period 2008-2011
OLO of 3,9278%; Beta of 0,3191 and a risk premium of 3,5% (2) OLO of 3,9278% and deviation rate of 70bp To be recomputed ex-post based on real OLO, real beta, real RAB & Equity, real decommissioning and real controllable cost savings
Convergence Trilateral market coupling
39
FR=BE=NL
FR=BE<>NL
FR<>BE=NL
FR<>BE<>NL
2007
62.9%
26.5%
9.6%
1.0%
2008
69.1%
15.4%
14.7%
0.8%
2009
57.0%
13.2%
28.2%
1.6%
Till 9th of Nov 2010
59.6%
25.9%
13.2%
1.3%
Fixed tariffs for the period 2008-2011 Means strong visibility for the cost basis of Eliaâ&#x20AC;&#x2122;s customers Tariffs for use of the grid and tariffs for ancillary services: comparison 2001 - 2008 16 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Q4) (Q2to Q4)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Q4) (Q2to Q4)
Onthe380/ 220/ 150kVnetwork
Annual power
40
At transf ormer output tothe70/ 36/ 30kVnetwork
System management
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Q4) (Q2to Q4) Onthe70/ 36/ 30kVnetwork
Ancillary services
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Q4) (Q2to Q4) At transf ormer output tomediumvoltage
Loss compensation
Stable tariffs in Belgium, decreasing in Germany Constant Euros of 2009 (EUR per MWh)
41
BeNe & France successfully integrated with Luxembourg, Germany and the Nordic countries in 2010 Baseload market clearing prices CWE and Nordic region 250
Euros/MWh
200
150
100
50
0 1‐Oct 6‐Oct 11‐ Oct
16‐ Oct NO2
42
21‐ Oct
26‐ Oct DK1
31‐ 5‐Nov 10‐ Oct Nov DK2
15‐ Nov
20‐ Nov SE
25‐ Nov
30‐ 5‐Dec 10‐ Nov Dec Germany
15‐ Dec
Belgium
20‐ Dec
25‐ Dec
30‐ 4‐Jan 9‐Jan Dec
France
14‐ Jan
Netherlands
19‐ Jan
24‐ Jan
Successfully day-ahead market integration CWE + Nordic Daily Baseload Spot Power Prices June 2010 to January 2011 110 100 90
Euro/MWh
80 70 60 50 40 30 20 10 0 1-Jun-10
1-Jul-10
APX Power NL
43
31-Jul-10
30-Aug-10
Belpex
29-Sep-10
NORD POOL
29-Oct-10
28-Nov-10
Powernext
28-Dec-10
OMEL
27-Jan-11
EEX
Elia Group Corporate structure Publi-T
Publipart 2.53%
45.37%
Eurogrid International 03/2010
60.0%
1. 1 share Publi-T
44
Licensed System Operator
Elia System Operator 99.99%
Network Owner
Elia Asset1
22.485%
Real time control of EU flows
52.10%
Elia: A Single Economic Unit
Holding company for 50Hertz Transmission
Coreso 12/2008
Freefloat
8.33%
CASC.eu 10/2008 10 countries 12 TSOs Auctioning
24.5%
HGRT 12/2001 52,25% shareholder of Powernext
20% APX Group 10/2010 Electricity and gas exchange
100%
Elia Re 02/2002 Captive reinsurance company
100%
Elia Engineering 12/2003 Engineering consultancy firm
Outlook CAPEX 2011 : 50Hertz Transmission 3
• Capex = €260 m of which • Onshore : € 122 m • Offshore : € 138 m
1
1 3
2
• Main Drivers: • RES Integration • Replacements 1
Northern Line - Mecklenburg-Western Pomerania: built - Schleswig-Holstein: Approval in progress
2
2
Southwest Coupling Line - Vieselbach-Altenfeld - Altenfeld-Redwitz
3
45
Off-shore Baltic 1 and Baltic 2 connections
4-year fixed tariff system with netting of costs & revenues Reclassify costs, revenues => controllable & non-controllable NC Non Tariff C Net profit Non (2) Controllable Costs (NC) Tariff
C
Tariff
NC
Controllable (1) Costs â&#x20AC;&#x2DC;(C)
Net profit
Charges
Revenues
(1)
Mainly consists of purchases of materials, services and other goods & remuneration except the ancillary services & pension costs for retired employees
(2)
Mainly consists of Telecom services, Third party services, surplus value on sale fixed assets and insurance claims
46
Composition of 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 included in tariffs
•
Reserved for financing future investments
3. Incentivisation on controllable costs •
Ceiling = same amount as efficiency gain (X-factor)
4. New: Transfer pricing agreement •
60% of the margin on the results of foreign consulting activities
•
Financial participations in RAB : dividends & surplus values →
•
Financial participations outside RAB →
47
60% to Elia and 40% to tariff reductions All costs & revenues outside Belgian regulation
2010 P&L IFRS Elia Transmission Bottom-up Approach (EUR m): calculation of net profit Tariff Surplus
(of which â&#x201A;Ź31,9m controllable)
663,6
94,9
Charges (1) (2) (3)
48
Non tariff
41,9
69,7
Costs (of which â&#x201A;Ź282,4m controllable)
Tariff
Average RAB 2010 Reference equity (33%) Cost of equity Equity reference remuneration (A)
2010 3.757,7 1.240,0 4.54%1 56,3
2010E 3.757,8 1.240,1 5,23% 64,9
Av. equity / Av. assets Deviation on ref. equity Equity deviation remuneration s-factor (B)
36,49%2 3,49%3 4,14% 5,4
36,16% 3,16% 4.63% 5,5
Over-depreciation (C)
-8,2
-8,2
Fair remuneration (A+B+C)
53,5
62,2
Goodwill decommissioning Controllable cost incentive Decision CREG regarding 2009 Surplus value Belpex & Dividend HGRT
16,2 7,7 -3,2 6,1
14,2 0,0
Net profit Belgian GAAP (tariffs)
80,3
76,4
Costs capital increase & acquisition Deconsolidation Belpex & Others IFRS reconciliation
-7,3 -0,8 22,4
Net profit IFRS for Elia Transmission
94,6
730,7
Net profit Revenues
OLO of 3.4374%; Beta of 0,3139 and a risk premium of 3,5% Av. Equity =1.371,1 and Av. Assets = 3.757,7 OLO of 3,4374% & deviation rate of 70 bp
X – Y Factor (controllable costs) €m
Budget including CPI
(1)
255,3 251,3
255,3
-4m -4m
247,3
2008
260,6 –6m 254,6
–6m
248,6
2009
265,3 258,3
-7m -7m
251,3
2010
270,3 -8m 262,3
-8m 254,3
- X = -25m in total CPI-X (approved) -X -Y = -50m total Target = CPI-X-Y
2011
• Regulator approved € 262,3 m net controllable costs for 2011 (270,3 m CC minus X = € 8 m imposed cost savings) • Budget Elia 2011: Î
(1)
49
Controllable non-tariff revenues
Initial budget 270,3 X factor (costsaving) - 8,0 Y factor (potential outperformance) - 8,0