Viridian Group PLC

1
Viridian Group PLC

• Preliminary results for the
• year ended 31 March 2006

2
Dipesh ShahChairman
3
Patrick BourkeGroup Finance Director
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Financial highlights - continuing operations

• First full year under IFRS comparatives restated
• Revenue increased to 976.8m (2005 - 835.4m)
• Pro-forma operating profit1 increased 11 to
  132.4m (2005 - 119.1m)
• Pro-forma EPS2 increased 24 to 68.2p (2005
  55.0p)
• Exceptional gain of 108.9m on disposal of Sx3
  return of capital of 97.9m successfully
  completed
• Final dividend increased by 5 to 26.61p per
  share full year dividends increased by 4.9
  from 35.18p to 36.89p per share

1 Pro-forma, based on regulated
entitlement 2 Pro-forma, based on regulated
entitlement and pre deferred tax
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Profitability by business
2006 m
2005 m

• 83.2
• 9.8
• 7.4
• 0.6
• 101.0
• 4.6
• 24.1
• 3.9
• (1.2)
• 132.4

73.9 7.2 6.8 0.9 88.8 3.8 25.0 2.5 (1.0) 119.
1

• NIE
• - Transmission Distribution
• - Power Procurement / SONI
• - NIE Supply
• - Other
• - Powerteam
• Viridian Power Energy
• Other (mainly property)
• Inter-group elimination
• Pro-forma operating profit

Pro-forma based on continuing operations and
regulated entitlement
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Profit summary
2006 m
2005 m
Operating profit Net finance costs Profit before
tax Tax - current - deferred Profit after
tax Pro-forma EPS - continuing operations
132.4 (19.3) 113.1 (27.4) (3.8) 81.9 68.2p
119.1 (27.0) 92.1 (18.7) (1.3) 72.1 55.0p
Pro-forma based on continuing operations and
regulated entitlement
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Earnings per share
2006 pence
2005 pence
55.0 (8.3) (1.0) 45.7 7.4 53.1
Pro-forma EPS - continuing operations Over/(under
)-recovery (net of tax) Deferred tax Basic EPS
- continuing operations Discontinued
operations Basic EPS - continuing and
discontinued
68.2 9.2 (3.0) 74.4 88.3 162.7
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Cashflow - net debt movement
2006 m
2005 m
Cash generated from operations Net finance
costs Tax paid Net capital expenditure Disposal
of subsidiary Return of capital Special pension
contribution Receipt of deferred
consideration Dividends paid Exercise of share
options Translation difference Net debt
movement Opening net debt Closing net debt
193.8 (23.5) (18.6) (83.1) - - - 1.7 (45.5) 3.3 (5
.4) 22.7 (389.4) (366.7)
190.2 (18.0) (25.4) (77.5) 136.8 (97.9) (25.0) 13.
5 (46.6) 9.3 (2.7) 56.7 (366.7) (310.0)
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Summary balance sheet
2006 m
2005 m
Property, plant equipment Intangible assets Net
working capital Tax - current
deferred Provisions Deferred income Net
debt Pension liability - gross of tax Other
financial (liabilities)/assets Sx3 net assets
excluding net debt Net assets
961.7 11.5 (15.0) (106.1) (42.2) (158.4) (366.7) (
161.1) 1.6 28.4 153.7
1,009.5 14.9 (20.3) (128.7) (38.7) (169.8) (310.0)
(102.9) (1.5) - 252.5

• Proposed additional special pension contribution
  of 10mduring 2006/07

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Patrick HarenGroup Chief Executive
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Transmission Distribution

• Operating profit of 83.2m (2005 - 73.9m)
• Change in depreciation method
• Operational efficiencies
• Total capital expenditure of 73.5m (2005 -
  72.5m) before customer contributions
• RAB 783m at 31 March 2006
• Increase in customer numbers to 774,000 units
  distributed increased by 3.2

Based on regulatory entitlement
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TD price control April 2007 - March 2012
(RP4)Initial proposals

• Blended rate of return of 4.78 (post tax real)
• Ofgem precedent for distribution lower rate for
  transmission
• Review of distribution rate for last 2 years
  based on next DNO review in 2010 - no upward
  adjustment
• Controllable operating costs rolling mechanism
• Allowance for each year of RP4 actual cost in
  corresponding year of RP3 (indexed)
• Specific reductions in 2007/08 and 2008/09
  pension disallowance
• Allowance for controllable costs reduced if TD
  price exceeds 1.81p/kWh price cap (2004/05
  prices)
• Capex NIE proposal 326m vs 257m in RP3 (both
  in 2004/05 prices)
• Final proposals expected shortly

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Other NIE businesses

• PPB/SONI
• Operating profit of 9.8m (2005 - 7.2m)
• Increased entitlement earned by PPB
• Awaiting outcome of NIAERs review of price
  controls
• NIE Supply
• Operating profit of 7.4m (2005 - 6.8m)
• Delivering specific commitments keypad meter
  installation promotion of energy efficiency and
  micro-renewables
• Seeking to extend existing price control (ends
  March 2007)
• Powerteam
• Operating profit of 4.6m (2005 - 3.8m)
• Main focus is on costs to TD
• Current ESB framework contract ends June 2006

Based on regulatory entitlement
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Viridian Power Energy

• Revenue increased to 381.1m (2005 - 272.3m)
• Pressure on operating margins following the
  setting of RoI tariffs for calendar year 2006
• Operating profit reduced slightly to 24.1m (2005
  - 25.0m)
• Impact on margins partly offset by higher sales
  volumes and active trading strategy in winter
• Active input into consultations on RoI tariffs
  for calendar year 2007 expect process to be
  challenging

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VPE - generation

• Huntstown 1 - 343MW
• Availability 93.9 (after planned and unplanned
  outages)
• Plant responded well to flexible despatch over
  the winter period
• 19 day unplanned outage in April 2006 completed
  at the beginning of May
• Gas requirements c90 hedged for 7 month period
  to October 2006
• CO2 emission credit requirement for 2006/07 fully
  covered
• Huntstown 2 - 400MW
• Capital expenditure 27m at 31 March 2006
• Civil engineering works have proceeded well main
  equipment due on site during summer 2006
• On track for commissioning in autumn 2007

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Supply market - whole island

• Active market comprises LEU and, increasingly,
  SME
• Energia supplies 22,400 business sites with
  demand of c5.5TWh

1 Large energy users 2 Small to medium sized
enterprises
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Energia - NI
Customer demand
Generation sources
Wholesale power from PPB
3,800 LEU SME sites supplied
Renewable generation under contract
1.6 TWh
Moyle Interconnector

• Energia compliant under UK renewables obligation
  until 2010 pursuing further renewable
  opportunities

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Energia - RoI
Customer demand
Generation sources
Huntstown 1
18,600 LEU SME sites supplied
Imports from Northern Ireland
3.9TWh
Wholesalefrom ESB

• Started supplying some large RoI customers with
  gas
• Assessing offtake contracts with windfarm
  developers undernew RE-FIT renewables mechanism

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Single Electricity Market (SEM)
Generators
Suppliers

Pool

• Target remains July 2007
• Mandatory pool capacity mechanism
• SEM operator will be JV formed by SONI and Eirgrid

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Summary

• Strong set of results
• Strategy focused on energy markets
• NIE maximising efficiency of regulated
  electricity infrastructure
• Viridian Power Energy growing an integrated
  energy business in competitive markets across
  Ireland
• Preparing for challenge of Single Electricity
  Market in 2007
• Our goal is to deliver shareholder value through
  consistent performance and sustainable dividend
  growth
• Committed to real dividend growth across TD
  regulatory period