Presentation Results 2012 20 February 2013 Disclaimer This - PowerPoint PPT Presentation

Presentation Results 2012 20 February 2013

Disclaimer This presentation is a translation of the Dutch presentation on the consolidated results 2012 of Alliander N.V. Although this translation has been prepared with the utmost care, deviations form the Dutch presentation might nevertheless occur. In such cases, the Dutch presentation prevails. ‘We’, ‘ Alliander ’, ‘the company’, ‘the Alliander group’ or similar expressions are used in this presentation as synonyms for Alliander N.V. and its subsidiaries, Liander refers to the grid manager Liander N.V. and its subsidiaries. The name Endinet refers to the Endinet group, including grid manager Endinet B.V. Stam refers to Stam Heerhugowaard Holding B.V. and its subsidiaries and Liandon refers to Liandon B.V. Alliander N.V. is the sole shareholder of Liander N.V., Endinet Groep B.V., Liandon B.V., Alliander Telecom N.V., Alliander Participaties B.V., Verlian B.V., Stam Heerhugowaard Holding B.V. and Alliander AG. Parts of this presentation contain forward-looking information. These parts may – without limitation – include statements on government measures, including regulatory measures, on Alliander’s share and the share of its subsidiaries and joint ventures in existing and new markets, on industrial and macroeconomic trends and on the impact of these expectations on Alliander’s operating results. Such statements are preceded by, followed by or contain words such as ‘believes’, ‘expects’, ‘thinks’, ‘anticipates’ or similar expressions. These prospective statements are based on the current assumptions and are subject to kn own and unknown factors and other uncertainties, many of which are beyond Alliander’s control, so that future actual results may differ materially from these statements. This presentation has been prepared with due regard to the accounting policies applied in the preparation of the 2012 financial statements of Alliander N.V., which can be found on www.alliander.com. All financial information shown throughout this presentation has not been audited. Alliander results 2012 2

Content 1. Highlights 2. Alliander at a glance 3. Results 2012 4. Appendices Alliander results 2012 3

Highlights 2012 • Reported results 2012: € 224 million (2011: € 251 million). Comparable results 2012 : € 228 million (2011: € 228 million) • Higher revenue due to increase in regulated tariffs • Higher CAPEX due to expansion, maintenance and innovation of networks • Increased OPEX due to higher personnel costs, depreciation and sufferance tax • Credit rating: Financial results − S&P rating affirmed at A+/A-1/positive outlook (2 November 2012) and position − Moody’s rating affirmed at Aa3/P -1/stable outlook (8 February, 2013) • RCF: € 600 million extended until July 2017 with removal of financial covenant ratios • Public issue of 12 year € 400 million bond with 2.875% coupon due June 2024 • Liability management transaction: – Bond buy-back for a nominal amount of € 324 million – Public issue of 10 year € 400 million bond with 2.25% coupon due November 2022 • Average electricity outage rises from 20 to 24.5 minutes Strategic and • Customer satisfaction remains at high level operational • Organizational adjustments on department level developments • Small participations in innovative energy transition initiatives • Start of roll-out smart meters (2012-2014 pilot phase) • Supreme Court decision on Unbundling Act deferred to European Court • Regular cost investigation by NMa Regulatory • Gradual introduction of new market model developments • X-factors for current regulatory period (2011-2013) allow tariff increases • Decision on tariffs new regulatory period (2014-2016) is expected by mid-2013 Alliander results 2012 4

Content 1. Highlights 2. Alliander at a glance 3. Results 2012 4. Appendices Alliander results 2012 5

Stable public shareholder base Alliander’s grid coverage regions largely coincide with Alliander Shareholders: Provinces & Municipalities the shareholders base (1) Other Friesland 24% Gelderland 45% Noord-Holland Amsterdam 9% Amsterdam Gelderland Noord-Holland 9% Friesland 13% Endinet (2) 100% owned by Dutch provinces and municipalities and privatisation is not allowed by law (1) Includes province of Flevoland, and various municipalities located in the provinces of Gelderland, Friesland, Flevoland, Zuid-Holland and Noord-Holland (2) Endinet acquired as per 1 July 2010 Alliander results 2012 6

Market position Number of connections (x1,000) • Alliander has 3.1 million electricity connections and 2.6 million gas 6.000 (1) 5.687 connections in the Netherlands (2) 5.000 4.687 • Electricity connections Alliander has a market position of 37% Gas connections 4.000 3.057 4.000 2.631 3.000 2.054 2.000 2.630 2.056 1.000 1.946 394 191 134 107 207 32 53 52 138 102 55 187 0 Alliander Enexis Stedin Delta Cogas Rendo Westland Source: ECN/EnergieNed/Netbeheer Nederland “Energy Trends” 2012 publication Notes: (1) Alliander includes Endinet with 398,000 gas connections en 109,000 electricity connections (2) Enexis includes Intergas with 148,000 gas connections Alliander results 2012 7

Overview Dutch energy networks Gas networks Electricity networks 2 12 2 1 5 5 6 2 1 6 1 3 3 1 7 7 6 7 5 3 2 2 1 4 8 1 1 4 1 2 Liander and Endinet (1) RENDO Netbeheer BV (5) ENEXIS and Intergas (2) COGAS (6) Westland Energie Infrastructuur BV (7) Stedin (3) Delta Netwerkbedrijf BV (4) Source: EnergieNed “Energy in the Netherlands” 2011 publication, adjusted for Endinet acquisition by Alliander and Intergas acquisition by Enexis Alliander results 2012 8

Position in the Dutch energy value chain Production and trade Transmission Distribution Supply Liberalised Regulated Regulated Liberalised Vattenfall/Nuon Vattenfall/Nuon Tennet Alliander RWE/Essent RWE/Essent Gasunie Enexis Eneco Eneco Stedin The Dutch energy value chain has been partially liberalised over the years. Regional distribution and transmission are regulated Alliander results 2012 9

Alliander’s businesses: stable cash flow profile • • Regional Grid Manager: Management of regional electricity and gas Service, maintenance and automation grids of complex energy infrastructures, including for TenneT • Electricity & gas metering business • • Clients are in the stable and regulated Regulated assets network sector • Low risk profile due to regulatory environment • Stable and predictable cash flow Network Network Other 1 2012 Results operator company Eliminations Total Liander Endinet € million Operating income External income 1,558 109 105 - 1,772 Internal income - - 12 313 -325 Total operating income 1,570 109 418 -325 1,772 Operating expenses Total operating expenses 1,178 87 423 -325 1,363 Operating profit 392 22 -5 - 409 Total assets 6,148 528 2,617 -1,879 7,414 Regulated business >90% (1) Comprises other activities within the Alliander-group including the activities of Liandon, Stam, Alliander A.G., Corporate departments and service units (both part of Alliander N.V.) Alliander results 2012 10

Regulatory environment • Regulation aims for a balance between efficiency, quality Electricity and sustainability X-Factor 2008 – 2010 2011 – 2013 • Total cost recovery for the industry is one of the basic Liander N.V. 3.6 (6.4) regulatory principles. The efficient cost level is calculated as Endinet B.V. 4.6 (6.2) the average cost level in the network sector. This allows Delta Netwerkbedrijf B.V. 5.8 (5.2) individual companies with an average performance to cover Enexis B.V. 6.3 (7.7) their full costs (including the WACC as set by the Energiekamer, applied on the standardized asset value) Stedin B.V. 5.0 (6.1) • For the 2011-2013 period the WACC (in pre tax real terms) is set at 6.2% Gas X-Factor • x-factors (1) as determined by the regulator for the 2011-2013 2008 – 2010 2011 – 2013 period allow increases in tariffs Liander N.V. 6.1 (2.7) • X-factors for electricity for the 2011-2013 period have been Endinet B.V. 7.2 (1.6) adjusted at 2012 year-end. This follows from changes in Delta Netwerkbedrijf B.V. 6.6 (0.5) parts of the cost base. Enexis B.V. 8.1 (3.4) Stedin B.V. 4.2 (2.8) • There is a difference between regulatory and commercial Source: Energiekamer, Alliander accounting rules, especially in relation to valuation principles for assets Constructive regulatory framework which does not allow for privatisation (1) See page 37 for further explanation Alliander results 2012 11