Analyst meeting

1
FY 2006 Consolidated results
Analyst meeting February 16th, 2007
2
Agenda
Summary Financials 2006 Outlook
2007 Regulatory and legal aspects Highlights
2006
3
Summary

• Financials 2006
• 2006 Results in line with expectations
• Increase in dividend to 1,28 a share
• Outlook 2007
• Regulatory and legal aspects
• Update electricity law published on July 20th,
  2006
• Update on the process for multi-year tariffs
  Royal Decree
• Highlights 2006
• Energy Consumption from Elias network in 2006
• Energy balance Elia net 2006
• Tariff evolution to the advantage of Elias
  customers
• Investments 2006
• Significant increase in energy exchanges
• Start of the Belgian Electricity Exchange on
  November 21st, 2006

4
Agenda
Summary Financials 2006 Outlook
2007 Regulatory and legal aspects Highlights
2006
5
Overview of Key IFRS Figures
6
2006 Profit and Loss
Bottom-up Approach of Elias PL in 2006 (EUR
m) Determination of net profit
Non tariff
(1)
(2)
(3)
Costs
Tariff
Surplus
Net profit

• OLO of 4,1293 Beta of 1,0358 and a risk premium
  of 2,54
• Av. Equity 1.295,5 and Av. Assets 3.790,5

(3) OLO of 4,1293 deviation rate of 70bp and
tax rate of 33.99
7
Reconciliation Be GAAP - IFRS
1.3 (1)
Net Profit
Equity
(1) Mainly relates to reversal goodwill Bel
Engineering, inventory valuation, provisions
8
Regulated Asset Base 2006
Evolution 2006 RAB
(1)
Average RAB
3.371
3.444
(1) In 2006 Frozen Goodwill has been applied
9
Working Capital Requirements 2006
Changes in Working Capital Requirements (EUR m)
(1)
2006
Inventory trade debtors lt1 year
Deferred charges and accrued income
Total Change in WCR
Trade creditors others
Accrued charges deferred income
Surplus 2006
(1) Based on Belgian GAAP accounts
10
Breakdown Costs
Evolution of Costs between 2006 and 2005 (EUR m)
637,7
635,6
-0,8
Ancillary services (reserve energy)
1,5
Raw materials, Services Other
goods
-0,6
Personnel Expenses
Others
5,2
Depreciation
4,8
Financial charges
-28,2
Taxes
11
Non - Tariff Revenues
Breakdown of Non Tariff Revenues in 2006 and
2005 (EUR m)
94,3
63,2
113,3
International revenues
Fixed assets own construction capitalised
-6,5
Telecom third party services
45,7
-46,7
Others
12
Tariff Revenues
Breakdown of Tariff Revenues in 2006 and 2005
(EUR m)
677,2
685,7
3,2
Connection tariffs
-10,3
Tariffs for ancillary services
25,8
Tariffs out of previous surpluses
-0,9
Tariffs for grid use
60,0
34,7
Increase of recorded difference between approved
budget and reality mainly due to international
revenues
13,3 14,1 Shortfall on costs
46,7 20,6 Surplus revenues
(tariff non-tariff)
13
Deviation from Budget 2006
Sources of surplus over budget at the end of 2006
(EUR m)
60,0

• Purchase ancillary services
• ETSO fees to pay

Reasons

• RAB adjustment

• Auctioning fees North
• Auctioning fees South
• 3rd party services
• ETSO fees to receive

• Access and balancing fees

14
Overview treatment of surpluses
Overview of allocation and use of total surpluses
(1)
About EUR 130m available for future tariff
reductions beyond 2007
(1) To be allocated by CREG in decision B/M over
2006
15
Financial Debt Position
Standard Poors rating Long Term A-
Outlook Stable
2.129,5
2.119,8
40,0
16
Dividend Policy
(1)

• Small increase in dividend to 1,28 per share
• Pay-out ratio over 2005 Belgian Gaap result is
  89,9
• (80,8 under IFRS)

(1) Contains exceptional dividend of EUR 0,88
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Agenda
Summary Financials 2006 Outlook
2007 Regulatory and legal aspects Highlights
2006
18
Outlook 2007 RAB
Evolution 2007 RAB as approved by CREG
3.598
(1)
Average RAB
3.495
3.537
(1) Approved budget 2007 start with RAB which is
32m higher than ACTUAL RAB (3.444m) as of
year-end 2006
19
Outlook 2007 CAPEX
Breakdown CAPEX
CAPEX 2005-2009 (IPO) 800 m
CAPEX 2007 141m
44
48
Replacements
Driven by interconnections with neighbours
Driven by internal consumption
Driven by import levels generation localisation
20
Outlook 2007 Fair remuneration
Determination of net profit 2007 by the regulator
(Belgian GAAP)

• For the tariff 2007, the regulator accepted the
  principle that financial debt must not be
  deducted from the working capital requirements
• D-factor is calculated according to the CREG
  formula
• Decommissioning is applied for 2007 budget
• Elia filed proceeding at Court of Appeal in
  december 2006 against bonus malus decision 2005

(1)
(2)

• OLO of 3,4230 Beta of 1,0330 and a risk premium
  of 2,54
• OLO of 3,4230 deviation rate of 70bp and tax
  rate of 33.99

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Agenda
Summary Financials 2006 Outlook
2007 Regulatory and legal aspects Highlights
2006
22
Update on legislation

• Electricity law of April 29, 1999 was adjusted on
  June 1st, 2005 and additionally adjusted on July
  20th, 2006.
• Most important changes are
• the date for the introduction of multi-annual
  tariffs for the transmission system, which is
  fixed at 1 January 2008
• a European benchmark, on the basis of comparable
  system operators, designed to define fair returns
  and depreciations for the transmission system
  operator
• an objective indexing formulae for the costs,
  directly controlled by the system operator, and
  set out in the Royal Decree following advice
  given by the regulator
• the reform of the federal regulator into three
  departments (administration, market's technical
  operation and monitoring prices and accounts)
  headed by a chairman.

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Update process R.D. multi-year tariffs

• Process was formally started up on August 16th,
  2006 by Minister of Energy who sent letter to
  Regulator (CREG)
• Formal meetings between
• CREG and Elia were held on September 18th and
  22nd
• Cabinet, CREG Elia on November 15th, 2006 and
  January 15th, 2007
• Discussion between cabinets of government
  expected to start soon.

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Agenda
Summary Financials 2006 Outlook
2007 Regulatory and legal aspects Highlights
2006
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1. Energy Consumption in Elias balancing zone

• Total Energy consumption in Elias balancing zone
  increased to 89,4 TWh in 2006 from 86,9 TWh in
  2005
• This is mainly due to
• Increase in industrial activity (2006 GDP growth
  of 3)
• Larger take-off from residential clients
• More extreme temperatures
• Severe winter months
• Hot summer months

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2. Energy Balance Elia net 2006 (in GWh)
Import France 10.636 Luxemburg 2.479 Netherla
nds 5.604 Total 18.719
Export France 1.981 Luxemburg 1.697 Netherlands
5.018 Total 8.696
Net import 10.023
Consumption Elia net Direct clients
28.145 Distribution 57.780 Pumps
1.696 Total 87.621
Net production ( Gross production
ancillaries) Power plants 72.618 From
DSOs 39 Local production
6.480 Total 79,137
Net losses 1.539
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3. Evolution of tariffs since 2001
28
ETSO European comparison 2005 tariffs
Voltage level 400-110 kV
Voltage level 400-220 kV
29
Breakdown 2006 Energy bill
Residential client 3.500 kWh, 12 kVA 1.300 kWh
night
Midsize industrial client 2-10 GWh, 500-2.500
kW 4.000h / year
Large industrial client 50-70 GWh,
10.000kW 5.000-7.000h / year
(2)
(2)
5
10
9
15
5
14
23(1)
9
77
76
57
Transmission
Energy
Distribution
Federal levies taxes (direct indirect)
Source CREG (for residential clients)
computed by Elia based on 2005 breakdown (for
industrial clients) (1) 18 out of the 23
relates to VAT (2) Not subject to
VAT
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4. Investments 2006

• Upgrade interconnection Monceau Chooz (F) van
  150 tot 220kV
• Phase shifting transformer Monceau in service as
  of January 2007
• Optimalisation interconnection flow with France
• Adds to border capacity, mainly in the summer
• Investment of about 10m

31
Investments 2006

• Underground cable 150kV Koksijde Slijkens and
  extension HV-station Koksijde
• Reinforce reliability of network in coast region
  closing of coastal loop
• Connection offshore wind farm up to 900 MW
• In service as of May 2006
• Investment of about 48m

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Investments 2006

• Additional transformer 150kV Harenheide
  (Brussels) and Zaventem
• Strengthen electricity supply in North of
  Brussels and region Zaventem
• Underpins economical development of the region
• Investment of about 13m
• Additional transformer 150kV Eupen
• Reinforces reliability of network and underpins
  economical development of region Eupen
• Investment pays off optimal after putting in
  service underground cable 150kV Lixhe Battice
• Investment of about 4,5m

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5. Significant increase in energy
exchanges
Major increase in exchanges with F and NL Export
8,4 to 8,696 GWh Import 31,9 to 18,719 GWh
Netherlands
5,604 GWh
Total energy exchanges 2005-6
5,018 GWh
1,981 GWh
2,479GWh
France
Luxembourg
1,697 GWh
10,636 GWh
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Increase and Optimalization of the border
capacity with neighbouring countries France and
the Netherlands in line with programme
Border Optimalization and Capacity increases
Since Nov 2005 Since Jan 2006

• Reinforcement of Avelin Avelgem
• Release of capacity from historical contract
• as decided by French, Dutch and Belgian
  Regulators
• Chooz (France) Monceau (Belgium) 220 kV
• Will further optimize utilization of maximum
  border capacity
• Phase shifter in 220 kV station Monceau
• Will further optimize utilization of maximum
  border capacity FR
• Two Phase shifters in 380kV station Van Eyck
  (Kinrooi)
• Will further optimize utilization of maximum
  border capacity NL
• Phase shifter in 380kV station Zandvliet
• Will further optimize utilization of maximum
  border capacity NL
• Moulaine (France) Aubange (Belgium) 220 kV
• Second circuit 220 kV will be installed

Jan 2007
Jan 2007
1Q 2007
2008
2010

• Max capacity (winter) 4.300 MW when all
  projects commissioned

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6. Belgian Power Exchange (Belpex)

• Order book opened on November 20th, 2006 at 6 PM
• First fixing on November 21st, 2006 at 11 AM with
  an exchanged volume of 24.098 MWh
• 20 diversified participants (suppliers, traders,
  producers) from 6 countries (NL,CH,UK,FR,BE,DE)
• In 2006 average daily volume was 13.312 MWh with
  the following average electricity prices
• Belix 45,69/MWh
• Belix peak (8am-20pm) 59,19/MWh
• Belix off-peak (20pm-8am) 32,19/MWh
• 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 since launch
37
Daily average power prices Belpex,
APX, Powernext
38
FR-BE-NE TLC Congestion Overview
2
17
16
65
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Questions Answers

• Investors Relations Contact details
• Bert Maes
• Tel [phone]
• Mail bert.maes_at_elia.be
• Website http//www.elia.be

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FY 2006 Consolidated results
Analyst meeting February 16th, 2007