Viridian Group PLC

1
Viridian Group PLC

• Interim results for the
• six months ended 30 September 2004

2
Philip RogersonChairman
3
Financial highlights

• Turnover increased to 412.1m (2003 - 371.0m)
• Increase in pro-forma profit before interest and
  tax1 to 66.9m (2003 - 50.8m)
• Increase in contribution from Viridian Power
  Energy to 16.3m (2003 - 8.7m)
• Pro-forma EPS2 increased to 33.3p (2003 - 23.2p)
• Dividends increased by 4.0 from 9.46p to 9.84p
  per share

1 Pro-forma figure pre over-recovery, exceptional
items and goodwill amortisation 2 Pro-forma
figure pre over-recovery, exceptional items,
goodwill amortisation and deferred taxation
4
Strategy

• Primary focus on energy markets in Ireland
• NIE to maximise efficiency of regulated
  electricity infrastructure
• Viridian Power Energy to grow an integrated
  energy business in competitive markets across
  Ireland
• Investment in 2nd phase at Huntstown is
  consistent with our strategy
• To deliver shareholder value through consistent
  performance and sustainable dividend growth

5
Patrick BourkeGroup Finance Director
6
Profit summary
Six months to 30 September 04 m
Six months to 30 September 03 m
Profit before interest and tax Interest Profit
before taxation Taxation - current - deferred
Profit after tax Pro-forma EPS
50.8 (13.6) 37.2 (6.4) (1.3) 29.5 23.2p
66.9 (11.8) 55.1 (10.6) (2.4) 42.1 33.3p
Pro-forma, excluding over-recovery, exceptional
items and goodwill amortisation
7
Earnings per share
Six months to 30 September 04 pence
Six months to 30 September 03 pence
23.2 - (0.8) (1.0) 13.3 34.7
33.3 0.5 (0.8) (1.8) - 31.2
Pro-forma EPS Over-recovery (0.9m before
tax) Goodwill amortisation Deferred
tax Exceptional credit (17.7m) Basic EPS
8
Profitability by business
Six months to 30 September 04 m
Six months to 30 September 03 m

• 34.4
• 3.2
• 3.0
• 2.4
• (0.5)
• 42.5
• 16.3
• 4.8
• 3.3
• 8.1
• -

• NIE
• - Transmission and Distribution
• - Power Procurement / SONI
• - NIE Supply
• - NIE Powerteam
• - Other
• Viridian Power Energy
• Viridian Capital
• - Sx3
• - Other (mainly property)
• Disposal
• - Fleet (sold November 2003)

• 34.1
• 3.0
• 2.9
• 1.0
• (0.2)
• 40.8
• 8.7
• 1.5
• (0.6)
• 0.9
• 0.4

Profit before interest and tax
66.9
50.8
Pro-forma, excluding over-recovery, exceptional
items and goodwill amortisation
9
Cashflow
Six months to 30 September 04 m
Six months to 30 September 03 m
Cashflow from operating activities Interest Taxati
on Capital expenditure and financial
investment Disposals Financing Net debt
movement Opening net debt Net debt Net assets
76.6 (21.4) (9.8) (36.4) 122.2 0.5 131.7 (522.1)
(390.4) 280.0
103.8 (17.8) (8.4) (48.3) - 0.6 29.9 (382.7) (352.
8) 306.2
10
International Financial Reporting Standards

• Adoption of IFRS in 2005/06 financial year
• Main impact will be to balance sheet
• IAS 19 - Employee Benefits
• IAS 12 - Income tax
• IAS 39 - Financial Instruments
• Interim results next year will be presented under
  IFRS

11
Patrick HarenGroup Chief Executive
12
Transmission Distribution

• Operating profit of 34.4m (2003 - 34.1m)
• Network capital expenditure of 30.0m (2003 -
  32.7m) before customer contributions
• Increase in customer numbers to 749,000 units
  distributed increased by 2.0
• Continuing focus on efficiency in TD and NIE
  Powerteam
• Reduction in number of external contractors
• Centralisation of customer service processes into
  single distribution service centre

Based on regulatory entitlement
13
Other NIE businesses

• PPB/SONI
• Operating profit of 3.2m (2003 - 3.0m)
• Seeking price control extension to March 2008
• NIE Supply
• Operating profit of 3.0m (2003 - 2.9m)
• Price control extension to March 2007 agreed with
  Ofreg
• Further investment in keypad meters
• Further investment in energy efficiency measures
• Programme to promote micro-renewable generation
  in the domestic sector
• NIE Powerteam
• Operating profit of 2.4m (2003 - 1.0m)
• External sales representing 40 of total

Based on regulatory entitlement
14
Viridian Power Energy

• Integrated business comprising Huntstown
  generation and Energia supply
• RoI Energia takes Huntstown output
• NI generation sourced mainly across Moyle
  Interconnector
• Operating profit increased to 16.3m (2003 -
  8.7m)
• Higher Huntstown availability and output
• Volume growth in both markets
• Increased margins in RoI offset by
• Lower margins in NI

15
Generation

• Huntstown 1 - 343MW
• Availability of 96.5
• Major planned outage in March 2005
• 74 CO2 allowance finalised
• Huntstown 2 - 400MW
• EPC contract signed
• Commissioning expected mid 2007
• 250m cost including capitalised interest

16
Supply

• NI and RoI SME markets open in full in early
  2005
• RoI full market opening including domestic
  sector
• New systems for Energia
• Memorandum of understanding between Ofreg and
  CER
• New wholesale market in place by July 2007
• Co-operation in transmission planning, including
  increased interconnection
• Consistent approach to renewable energy and a
  harmonised approach to emissions

17
Renewables

• SME sites supplied from renewable sources in
  advance of market opening
• NI 2,900 sites RoI 5,800 sites
• NI proposed renewables obligation from 1 April
  2005
• 6.3 obligation by 2012
• Energia compliant until 2010
• RoI no obligation to date Government report due
  shortly
• Energia assessing further offtake
  contracts/investments in renewables

18
Sx3
7.1m
Operating profit (m)
4.8m
H2
3.4m
H1
H2
H1

• Operating profit of 4.8m (2003 - 1.5m)
• More even split between H1 and H2 expected for
  the full year
• Focus remains on enhancing profitability and
  improving margins

19
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
• Investment in 2nd phase at Huntstown
• Opportunities in further market opening and
  renewables
• Viridian Capital
• Increased profitability from Sx3
• Profits from property disposals
• Committed to delivering real dividend growth
  across regulatory period