Analyst meeting

February 16th, 2007

FY 2006 Consolidated results

Agenda

Summary

Financials 2006

Outlook 2007

Regulatory and legal aspects

Highlights 2006

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 Elia’s network in 2006

- Energy balance Elia net 2006

- Tariff evolution to the advantage of Elia’s customers

- Investments 2006

- Significant increase in energy exchanges

- Start of the Belgian Electricity Exchange on November 21st, 2006

Agenda

Summary

Financials 2006

Outlook 2007

Regulatory and legal aspects

Highlights 2006

Overview of Key IFRS Figures

ChangeIncome statement (€ million) 2006 2005 In %Consolidated turnover 711,5 714,2 -0,4%EBITDA (1) 292,6 295,9 -1,1%Operating result (EBIT) 204,0 211,8 -3,7%Financial result (98,3) (93,8) 4,8%Taxes (29,8) (41,5) -28,2%Consolidated net profit 75,9 76,5 -0,8%Net profit per share (€) 1,58 1,60 -1,3%Dividend per share (€) 1,28 1,27 0,8%Balance sheet (€ million) 31/ 12/ 2006 31/ 12/ 2005Total assets 3.898,1 3.855,8 1,1%Equity 1.308,6 1.282,7 2,0%Net debt 2.074,9 2.080,1 -0,2%Equity per share (€) 27,32 26,80 1,9%

Total number of shares (end of period) 47.898.052 47.898.052 0,0%(1) EBITDA = EBIT + depreciation + changes in provisions

IFRS

Average RAB 2006 3.444Reference equity (33%) 1.136Cost of equity 6,76%Equity reference remuneration (A) 76,82

Av. equity / Av. assets 34,18%Deviation on ref. equity 1,18%Equity deviation remuneration 3,19%D-factor (B) 1,29

Over-depreciation (C) -8,18

Fair remuneration (A+B+C) 69,94

B/ M Decision CREG over 2004 -1,75

Net profit Belgian GAAP 68,19

IFRS reconciliation 7,7

Net profit IFRS 75,89

Bottom-up Approach of Elia’s P&L in 2006 (EUR m)Bottom-up Approach of Elia’s P&L in 2006 (EUR m)Determination of net profitDetermination of net profit

2006 Profit and Loss

677,2

94,3

75,9

60,0

635,6

Charges Revenues

Tariff

Non tariff

Costs

Net profit

(1)

(1) OLO of 4,1293%; Beta of 1,0358 and a risk premium of 2,54%

(2) Av. Equity =1.295,5 and Av. Assets = 3.790,5

(2)

(3)

(3) OLO of 4,1293%; deviation rate of 70bp and tax rate of 33.99%

Surplus

1.307,41.329,5 7,19,9

(160,6)

91,1 20,6 9,8

2006 BelgianGAAP

Employee benefits

Regulatory assets

Deferred taxes

Capitalisation hard/ software

Elia Re Others 2006 IFRS

IFRS Impact on Equity and Net Profit IFRS Impact on Equity and Net Profit for year ending 31 December 2006for year ending 31 December 2006

Net

Pro

fit

Eq

uit

yReconciliation Be GAAP - IFRS

75,968,2 3.4

(3,4)

1,35,1

2006 BelgianGAAP

EmployeeBenefits

Elia Re Deferred taxes CapitalisationSoftware

Others 2006 IFRS

1.3 (1)

(1) Mainly relates to reversal goodwill Bel Engineering, inventory valuation, provisions

Evolution 2006 RABEvolution 2006 RAB

Regulated Asset Base 2006

Average RAB

3.371 3.444

3.4443.443

(87) (3) 141

50

2005 Depreciation Divestments Capex Change inWCR

2006(1)

(1) In 2006 Frozen Goodwill has been applied

1,3

(8,1)

(30,0)

46,4

(60,0) (50,4)

20

06

Inventory & trade

debtors <1 year

Deferred charges

and accrued

income

Total Change in

WCR

Trade creditors & others

Accrued charges

& deferred income

Surplus 2006

Working Capital Requirements 2006

Changes in Working Capital Requirements (EUR m) Changes in Working Capital Requirements (EUR m) (1)(1)

(1)(1) Based on Belgian GAAP accountsBased on Belgian GAAP accounts

41,529,8

93,898,3

84,188,5

18,318,5

116,5 117,2

144,0146,2

138,9137,8

2006 2005

Personnel Expenses

Evolution of Costs between 2006 and 2005 (EUR m)Evolution of Costs between 2006 and 2005 (EUR m)

Ancillary services(reserve energy)

Depreciation

Others

Financial charges

Taxes

Raw materials, Services & Other goods

Breakdown Costs

635,6 637,7

-0,6%

5,2%

4,8%

-0,8%

1,5%

-28,2%

12,06,4

9,413,7

12,411,6

62,6

29,4

2006 2005

Breakdown of Non – Tariff Revenues in 2006 and 2005 (EUR m)Breakdown of Non – Tariff Revenues in 2006 and 2005 (EUR m)

Non - Tariff Revenues

Others

Telecom & third party services

Fixed assets own construction capitalised

International revenues

63,2

94,3

-46,7%

113,3%

-6,5%

45,7%

467,3463,2

49,8 39,6

150,3134,8

28,529,4

2006 2005

Breakdown of Tariff Revenues in 2006 and 2005 (EUR m)Breakdown of Tariff Revenues in 2006 and 2005 (EUR m)

Tariff Revenues

Connection tariffs

Tariffs for ancillary services

Tariffs for grid use

677,2 685,7

-10,3%

13,3 14,1 Shortfall on costs

46,7 20,6 Surplus revenues (tariff & non-tariff)

Tariffs out of previous surpluses

60,0

-0,9%

Increase of recorded difference between approved budget and reality mainly due to international revenues

34,7

25,8%

3,2%

11,6

35,1

10,13,2

Surplus regulatedrevenues

Surplus international& other income

Shortfall in charges Adjustments to theregulated profit

Total Surplus

Deviation from Budget 2006

Access and balancing fees

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

Purchase ancillary services ETSO fees to pay

Reason

s

RAB adjustment

Sources of surplus over budget at the end of 2006 (EUR m)Sources of surplus over budget at the end of 2006 (EUR m)

60,0

In millions of EUR Surpluses 2004 2005 2006 2007 2008 2009 2010 Total

Surplus 2003 134,6 25,4 36,4 36,4 36,4 134,6Bonus 2003 3,2 3,2 3,2Used -25,4 -39,6 -36,4 -101,4Total 2003 137,8 0,0 0,0 0,0 36,4 36,4

Surplus 2004 119,0 28,0 9,8 9,8 23,8 23,8 23,8 119,0Bonus 2004 3,5 3,5 3,5Used -28,0 -13,3 -41,3Total 2004 122,5 0,0 0,0 9,8 23,8 23,8 23,8 81,2

Surplus 2005 35,1 7,4 27,7 35,1Bonus 2005 2,3 2,3 2,3Surplus 2006 3,8 3,8 3,8Used -7,4 -7,4Totaal 2005 41,2 0,0 33,8 33,8

Surplus 2006 56,2 56,2 56,2Used 0,0Totaal 2006 56,2 56,2 56,2Total Surplus 357,7 Total to reverse 56,2 80,0 23,8 23,8 23,8 207,6

Overview treatment of surpluses

Overview of allocation and use of total surplusesOverview of allocation and use of total surpluses

About EUR 130m available for future tariff reductions beyond 2007

(1) To be allocated by CREG in decision B/M over 2006

(1)

883,5 883,5

996,3 996,0

200,0 250,0

0

500

1.000

1.500

2.000

31/ 12/ 2006 31/ 12/ 2005

Shareholders' loans Eurobonds Banks LT European Investment Bank

Standard & Poor’s rating:

Long Term: A-

Outlook: Stable

Elia benefits from a strong credit ratingElia benefits from a strong credit rating

Financial Debt Position

2.119,8 2.129,5

€ millions 2006 2005 Net debt 2.074,8 2.080,1Leverage (D/D+E) 61,9% 62,4%EBITDA / Gross interest 3,0 3,2Net debt / EBITDA 7,1 7,0Average cost of debt 4,8% 4,5%% Fixed of gross debt 74,7% 72,4%

Unused Amount Interest rateCredit lines (€ m)

European Investment Bank 85 Euribor + 5 bpCommercial Banks : Short term 570 To be negotiated

40,0

1,17 1,27 1,27 1,28

2,05

80,91%

89,60%

77,59%79,26%

89,90%

-0,4

0,1

0,6

1,1

1,6

2,1

2002 2003 2004 2005 2006

In E

UR

70,00%

75,00%

80,00%

85,00%

90,00%

Dividend Pay-out ratio

Elia’s dividend policy ensures a steady dividendElia’s dividend policy ensures a steady dividend

Dividend Policy

• 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)

(1) Contains exceptional dividend of EUR 0,88

Agenda

Summary

Financials 2006

Outlook 2007

Regulatory and legal aspects

Highlights 2006

Evolution 2007 RAB as approved by CREGEvolution 2007 RAB as approved by CREG

Outlook 2007: RAB

Average RAB

3.495 3.537

3.476

(88) (5) 141

74

2006 Depreciation Divestm. &Decomm.

Capex Change inWCR

2007

(1)

(1) Approved budget 2007 start with RAB which is € 32m higher than ACTUAL RAB (€3.444m) as of year-end 2006

3.598

19%

4%

29%

Breakdown CAPEX Breakdown CAPEX

Outlook 2007: CAPEX

22%

10%

24%

Replacements

Driven by internal consumption

Driven by interconnections with neighbours

Driven by import levels & generation localisation

CAPEX 2005-2009 (IPO)€ 800 m

CAPEX 2007€ 141m

44% 48%

CREGAverage RAB 2007 3.537Reference equity (33%) 1.167Cost of equity 6,05%Equity reference remuneration (A) 70,6

Av. equity / Av. assets 34,29%Deviation on reference equity 1,29%Equity deviation remuneration 2,72%D-factor (B) 1,2

Over-depreciation (C) -8,2

Fair remuneration (A+B+C) 63,6

B/ M Decision CREG over 2006 -

Net profit as set by regulator 63,6

Determination of net profit 2007 by the regulator (Belgian GAAP)Determination of net profit 2007 by the regulator (Belgian GAAP)

Outlook 2007: Fair remuneration

(1)

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

(2)

• 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

Agenda

Summary

Financials 2006

Outlook 2007

Regulatory and legal aspects

Highlights 2006

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.

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.

Agenda

Summary

Financials 2006

Outlook 2007

Regulatory and legal aspects

Highlights 2006

1. Energy Consumption in Elia’s balancing zone

Total Energy consumption in Elia’s 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

Injected energy Elia's balancing zone per month

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

Jan Feb Maart April Mei Juni Juli Aug Sept Okt Nov Dec

GWh/month

0,0

5,0

10,0

15,0

20,0

25,0

° C

Energy2005 Energy 2006 Av. temperature 2005 Av. temperature 2006

2. Energy Balance Elia net 2006 (in GWh)

Import

France: 10.636

Luxemburg: 2.479

Netherlands: 5.604

Total: 18.719

Net production

(= Gross production – ancillaries)

Power plants: 72.618

From DSO’s: 39

Local production: 6.480

Total: 79,137

Export

France: 1.981

Luxemburg: 1.697

Netherlands: 5.018

Total: 8.696

Consumption Elia net

Direct clients: 28.145

Distribution: 57.780

Pumps: 1.696

Total: 87.621

Net losses: 1.539

Net import: 10.023

3. Evolution of tariffs since 2001

Since 2001, decrease of transmission tariffs for all types of clientsSince 2001, decrease of transmission tariffs for all types of clients

Tariffs for use of the grid and tariffs for ancillary services:comparison 2001 - 2007

0

2

4

6

8

10

12

14

16

2001

2002

(Q

4)

2003

(Q

2 to

Q4)

2004

2005

2006

(*)

2007

(*)

2001

2002

(Q

4)

2003

(Q

2 to

Q4)

2004

2005

2006

(*)

2007

(*)

2001

2002

(Q

4)

2003

(Q

2 to

Q4)

2004

2005

2006

(*)

2007

(*)

2001

2002

(Q

4)

2003

(Q

2 to

Q4)

2004

2005

2006

(*)

2007

(*)

On the 380/220/150 kV network At transformer output to the 70/36/30 kVnetwork

On the 70/36/30 kV network At transformer output to medium voltage

€/M

Wh

Annual power System management Ancillary services Loss compensation

(*) Hypothesis: the concerned client is supposed not to have a local production

ETSO European comparison 2005 tariffs

Voltage level 400-220 kV Voltage level 400-110 kV

0

5

10

15

20

25

30

Au

stri

a

Cze

ch R

ep

ub

lic

Fra

nce

Ge

rma

ny

Gre

at B

rita

in

Gre

ece

Hu

ng

ary

Ire

lan

d

Italy

Lith

ua

nia

Ne

the

rla

nd

s

No

rwa

y

Po

lan

d

Po

rtu

ga

l

Ro

ma

nia

Slo

vak

Re

p

Slo

ven

ia

Sp

ain

Sw

ed

en

Be

lgiu

m

De

nm

ark

Ea

st

De

nm

ark

We

st

Est

on

ia

Fin

lan

d

Infrastructure Losses System Services Non related TSO

Breakdown 2006 Energy bill

Transmission cost is a small part of client’s total energy costTransmission cost is a small part of client’s total energy cost

TransmissionEnergy Distribution Federal levies & taxes (direct & indirect)

Residential client3.500 kWh, 12 kVA1.300 kWh night

Midsize industrial client2-10 GWh, 500-2.500 kW

4.000h / year

Large industrial client50-70 GWh, 10.000kW

5.000-7.000h / year

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

77%76%57%

14%

5%

9%

5%15%23%(1)

10% 9%(2) (2)

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

4. 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

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

Investments 2006

5. Significant increase in energy exchanges

Total energy exchanges 2005-65,604 GWhNetherlands

5,018 GWh

1,981 GWh

France

10,636 GWh

Luxembourg

1,697 GWh

2,479GWh

Major increase in exchanges with F and NL;Major increase in exchanges with F and NL;Export +8,4% to 8,696 GWh & Import +31,9% to 18,719 GWh Export +8,4% to 8,696 GWh & Import +31,9% to 18,719 GWh

2006 2005Direction Exchanged Exchanged Change

F B 10,636 GWh 6,750 GWh 57,6%

B F 1,981 GWh 2,221 GWh -10,8%NL B 5,018 GWh 4,430 GWh 13,3%B NL 5,604 GWh 5,074 GWh 10,4%Lux B 2,479 GWh 2,366 GWh 4,8%B Lux 1,697 GWh 1,373 GWh 23,6%Total 27,415 GWh 22,214 GWh 23,4%

Belgium Max. (MW)

2006 North SouthNet offtake Elia-grid 06 North South Total 06 Total 05

Winter 1.344 3.300 12.343 10,89% 26,74% 37,62% 29,30%

Summer 1.257 2.300 11.145 11,28% 20,64% 31,92% 24,10%

Max. import cap. (MW) % of opening

Increase and Optimalization of the border capacity with neighbouring Increase and Optimalization of the border capacity with neighbouring countries France and the Netherlands: countries France and the Netherlands: in line with programmein line with programme

1. Reinforcement of Avelin – Avelgem

2. Release of capacity from historical contract

• as decided by French, Dutch and Belgian Regulators

3. Chooz (France) – Monceau (Belgium) 220 kV

• Will further optimize utilization of maximum border capacity

4. Phase shifter in 220 kV station Monceau

• Will further optimize utilization of maximum border capacity FR

5. Two Phase shifters in 380kV station Van Eyck (Kinrooi)

• Will further optimize utilization of maximum border capacity NL

6. Phase shifter in 380kV station Zandvliet

• Will further optimize utilization of maximum border capacity NL

7. Moulaine (France) – Aubange (Belgium) 220 kV

• Second circuit 220 kV will be installed

Border Optimalization and Capacity increases

Jan 2007

2010

Since Nov 2005

SinceJan 2006

2008

1Q 2007

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

Jan 2007

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

Belpex volume growth since launch

Daily average power prices: Belpex, APX, Powernext

20

30

40

50

60

70

80

90

100

110

120

17-Sep 1-Oct 15-Oct 29-Oct 12-Nov 26-Nov 10-Dec 24-Dec 7-Jan 21-Jan 4-Feb

€/M

Wh

APX Belpex Powernext

FR-BE-NE TLC Congestion Overview

Border Belgian-French border

 

Belgian-

Dutch

border

Constrained Unconstrained

Constrained F ≠ B ≠ NL   F = B ≠ NL

Unconstrained

  F ≠ B = NL   F = B = NL

2 %

16 %

17 %

65 %

Questions &

Answers

Investors Relations – Contact details Bert Maes

Tel: + 32 (0)2/546.72.39Mail: bert.maes@elia.beWebsite: http://www.elia.be

Analyst meeting

February 16th, 2007

FY 2006 Consolidated results