Viridian Group PLC

1
Viridian Group PLC

• Preliminary results for the
• year ended 31 March 2004

2
Philip RogersonChairman

3
Financial highlights

• Turnover increased to 834.2m (2003 - 781.2m)
• Increase in pro-forma profit before interest and
  tax1 to 112.5m (2003 - 106.9m)
• Increase in contribution from Viridian Power
  Energy to 18.3m (2003 - 6.4m)
• Pro-forma EPS2 increased 12 to 53.3p (2003 -
  47.6p)
• Dividends increased from 32.5p to 33.7p per share
• 1 Pro-forma figure pre under-recovery,
  exceptional items and goodwill amortisation
• 2 Pro-forma figure pre under-recovery,
  exceptional items, goodwill amortisation and
  deferred taxation

4

• Northern Ireland Electricity
  (NIE)
• Transmission Distribution
• Power Procurement and Transmission System
  Operation (SONI)
• NIE Supply
• NIE Powerteam

• Viridian Power
• Energy
• Huntstown - generation
• Energia - supply

• Viridian Capital
• Sx3
• Property

• Committed to delivering shareholder value through
  consistent performance and sustainable dividend
  growth

5
Patrick BourkeGroup Finance Director
6
Profit summary
2004 m
2003 m
Year to 31 March
Profit before interest and tax Interest Profit
before taxation Taxation - current - deferred
Profit after tax Pro-forma EPS
106.9 (26.4) 80.5 (17.7) (9.0) 53.8 47.6p
112.5 (25.0) 87.5 (16.7) (1.8) 69.0 53.3p
Pro-forma, excluding under-recovery,
exceptional items and goodwill amortisation
7
Earnings per share
2004 pence
2003 pence
Year to 31 March
47.6 - (1.7) (6.8) 0.1 39.2
53.3 (5.0) (1.7) (0.8) 10.1 55.9
Pro-forma EPS Under-recovery (9.5m) Goodwill
amortisation Deferred tax Exceptional credit
(13.4m in 2003/04) Basic EPS
8
Net exceptional credit
m
Gain on disposal of Moyle Interconnector Loss
on disposal of Fleet Solutions Pension liability
in respect of Lislyn employees formerly employed
by NIE
17.7
(1.8)
(2.5)
13.4
9
Profitability by business
Year to 31 March 04 m
Year to 31 March 03 m

• 73.9
• 5.6
• 5.8
• 2.4
• (1.0)
• 86.7
• 18.3
• 7.1
• -
• 7.1
• -
• 0.4
• -

• NIE
• - Transmission and Distribution
• - Power Procurement / SONI
• - NIE Supply
• - NIE Powerteam
• - Other
• Viridian Power Energy
• Viridian Capital
• - Sx3
• - Other
• Disposals
• - Moyle (sold April 2003)
• - Fleet (sold November 2003)
• - nevada/Lislyn

• 76.2
• 5.9
• 7.8
• 2.4
• (1.0)
• 91.3
• 6.4
• 3.4
• 3.9
• 7.3
• 6.4
• 0.3
• (4.8)

Profit before interest and tax
112.5
106.9
Excludes under-recovery, exceptional items and
goodwill amortisation
10
Summarised balance sheet
31 March 04 m
31 March 03 m
967.8 39.0 0.3 (65.5) (115.3) (166.6) (382.7) 277.
0
Tangible fixed assets Intangible fixed
assets Other investments Working
capital Provisions Deferred income Net debt Net
assets
1,089.0 43.6 1.2 (38.1) (120.3) (206.3) (522.1) 24
7.0
11
Cashflow
Year to 31 March 04 m
Year to 31 March 03 m
Cashflow from operating activities Interest Taxati
on Capital expenditure and financial
investment Disposals Dividends paid Financing Net
debt movement Opening net debt Net debt
157.6 (35.6) (7.2) (130.8) 70.9 (41.9) 0.1 13.1 (
535.2) (522.1)
167.3 (26.8) (19.2) (74.6) 135.6 (43.6) 0.7 139.4
(522.1) (382.7)
12
Patrick HarenGroup Chief Executive
13
Transmission Distribution

• Operating profit of 73.9m (2003 - 76.2m)
• Total capital expenditure of 66.4m (2003 -
  61.7m)
• Network capital expenditure of 63.9m (2003 -
  60.6m) before customer contributions
• Increase in customer numbers to 742,000 units
  distributed increased by 1.4
• Demand side management and other energy
  efficiency projects totalling 1.9m to date

Based on regulatory entitlement
14
Transmission Distribution

• Opex reduction in 03/04
• Customer service centres reduced from 11 to 2
• District work centres reduced from 12 to 8
• Lower telecom and IT costs associated with
  reduced locations
• Lower supply chain costs
• Productivity gains
• Offset by pension charges of 6m
• Six Sigma methodology applied to TD
• Programme to simplify processes between
  Transmission Distribution and NIE Powerteam
• Strong performance against Guaranteed Standards

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Other NIE businesses

• PPB/SONI
• Operating profit of 5.6m (2003 - 5.9m)
• Seeking price control extension to March 2007
• 170MW North/South energy contract
• Government to pay 30m per annum towards
  generation costs
• NIE Supply
• Operating profit of 5.8m (2003 - 7.8m)
• Final stages of agreeing price control extension
  to March 2007 with Ofreg
• NIE Powerteam
• Operating profit of 2.4m (2003 - 2.4m)
• External sales representing 37 of total (2003 -
  27)

Based on regulatory entitlement
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Viridian Power Energy

• Turnover increased to 206.0m (2003 - 161.7m)
• NI up 21 to 78.1m (2003 - 64.7m)
• RoI up 32 to 127.9m (2003 - 97.0m)
• Profits of 18.3m (2003 - 6.4m)
• NI up from 1.6m to 3.9m
• RoI up from 4.8m to 14.4m
• EU Emissions Trading Scheme
• 74 CO2 allowance for Huntstown
• Expect net cost of shortfall to be reflected in
  increase in RoI electricity prices
• Ongoing evaluation of second station on Huntstown
  site

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Supply market in NI
Sites
GWh
Market opening
LEU SME Domestic
750 57,000 684,000
2,600 2,300 3,100
Open Apr 04 - Jan 05 To be agreed

• LEU Energia market share of 50 (GWh)
• SME
• 300 sites eligible for competition from April
  2004
• customers need to fit half-hourly meters
• Energia targeting selected SME customers

LEU large energy user SME small to medium-sized
enterprise Estimates
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Supply market in RoI
Sites
GWh
Market opening
LEU LVMD SME Domestic
800 5,800 161,500 1,700,000
8,100 3,400 4,700 9,000
Open Feb 04 Feb 04 - Feb 05 Feb 06

• LEU Energia 30 market share (GWh)
• LVMD/SME
• 11,300 sites eligible since February 2004
• Energia has sold 40MW of VIPP capacity to newly
  eligible customers

LEU large energy user LVMD low voltage maximum
demand SME small to medium-sized
enterprise Estimates
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Renewables

• Northern Ireland
• 6.3 obligation by 2012
• ROC mechanism similar to rest of UK
• 50MW of contracted renewable capacity
• 2,700 SME sites supplied by Energia at 31 March
  2004
• Republic of Ireland
• No legislative obligation
• Consultation paper on future policy issued
  February 04
• Energia supplying SMEs with green electricity
  imported from Scotland
• 2,600 SME sites supplied by Energia at 31 March
  2004
• Energia assessing further offtake
  arrangements/investments in renewables

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Sx3

• Turnover 117.3m (2003 - 120.7m)
• Operating profit pre goodwill of 7.1m (2003 -
  3.4m) driven by higher margin services within
  better sales mix
• Good progress across the company
• Applications Solutions iWorld migrations new
  orders
• Managed Services building on existing contracts
• Infrastructure Solutions focus on efficiency
• Focus remains on enhancing profitability and
  improving margins
• Target remains high single digit operating margin

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Summary

• Northern Ireland Electricity
• TD emphasis is on cost reduction
• Seeking price control extensions for other
  businesses
• Viridian Power Energy
• Strong contribution demonstrates progress made
• Natural avenue for growth opportunities in RoI
  generation, further market opening and renewables
• Viridian Capital
• Increased profitability from Sx3
• Disposals have allowed refocusing of resources
• Committed to delivering real dividend growth
  across regulatory period