Viridian Group PLC

1
Viridian Group PLC

• Interim results for the
• six months ended 30 September 2002

2
Philip RogersonChairman

3
Financial highlights

• Turnover increased by 8.6 to 331.8m
• Operating profit of 47.6m (2001 - 48.5m)1
• Profit before tax of 30.9m (2001 - 33.5m)1
• Adjusted EPS of 19.5p (2001 - 22.6p)2
• Basic EPS of 16.4p (2001 - 14.1p)
• Dividends increased by 3 from 8.87p to 9.14p per
  share
• 1 Before goodwill amortisation and impact of
  4.7m under-recovery of NIE entitlement in
  2001/02
• 2 Before impact of deferred taxation and goodwill
  amortisation and under-recovery of 4.7m in
  2001/02

4
Progress against strategy

• Strategy
• Maximise efficiency of core regulated assets
• Develop all-Ireland energy business
• Maximise potential of businesses outside energy
  sector
• TD price control agreed
• Energy markets in Ireland
• Moyle interconnector in commercial operation
• Huntstown nearing final commissioning
• Businesses outside energy sector
• Positive contribution from Sx3
• Disposal of shareholding in nevada

5
Patrick BourkeGroup Finance Director
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Profit summary
Six months to Sept 02 m
Six months to Sept 01 m
Turnover Operating profit NIE under-recovery Opera
ting profit pre goodwill Goodwill
amortisation Joint venture/associates Profit
before interest and tax Interest Profit before
tax Taxation - current - deferred (FRS
19) Profit after tax
331.8 47.6 - 47.6 (1.1) (4.0) 42.5 (12.7) 29.8 (5
.2) (3.0) 21.6
305.3 48.5 (4.7) 43.8 (2.1) (4.4) 37.3 (10.6) 26.7
(3.3) (5.0) 18.4
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Operating profit by business
Six months to Sept 02 m
Six months to Sept 01 m
Transmission Distribution Power Procurement /
SONI NIE Supply Other regulated activities Total
NIE NIE Powerteam Moyle Energia Sx3 Open Direct
Consumer FinancialServices (sold May 2002) Fleet
Solutions/Property Other Adjusted operating
profit pre goodwill NIE under-recovery
34.1 2.4 4.4 0.3 41.2 1.0 - 0.9 1.0 4.2 0.8 (0.6)
48.5 (4.7) 43.8
35.5 2.9 3.9 - 42.3 1.0 3.4 0.5 0.2 - 1.0 (0.8) 4
7.6 - 47.6
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Earnings per share and dividends
Six months to Sept 02 pence
Six months to Sept 01 pence
19.5 - (0.8) (2.3) 16.4 9.14
22.6 (2.7) (2.0) (3.8) 14.1 8.87
Adjusted EPS Under-recovery Goodwill
amortisation Deferred tax Basic EPS Dividend
per share
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Balance sheet
30 Sept 02 m
31 March 02 m
1,030.0 59.9 - 1.4 (9.3) (112.8) (199.5) (535.2)
234.5
1,067.1 46.0 4.8 1.1 (56.8) (104.7) (200.9) (512.
6) 244.0
Tangible fixed assets Intangible fixed
assets JVs/associates and other
investments - nevada - other Working
capital Provisions Deferred income Net debt Net
assets
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Cashflow
Six months to Sept 02 m
Six months to Sept 01 m
Cashflow from operating activities Interest Taxati
on Capital expenditure and financial
investment Acquisitions and disposals Financing Ne
t debt movement Opening net debt Net debt
44.4 (19.6) (4.4) (85.8) - 0.8 (64.6) (368.6) (433
.2)
62.0 (24.4) (5.0) (81.0) 71.0 - 22.6 (535.2) (512.
6)
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Disposal of shareholding in nevada (1)
30 Sept 02 m
9.0 1.5 (5.7) 4.8 17.5 (11.4) 6.1
Purchase of nevada bank debt at discount to face
value Loans to nevada since year end Nevadas
losses in first half Net investment in
nevada Provision established at year end Nevada
bank debt guaranteed by Viridian
costs Provision remaining Investment in nevada
fully provided prior to disposal
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Disposal of shareholding in nevada (2)

• Sale of shareholding to Energis for nominal sum
• Debt of 6.25m to be repaid on terms comparable
  with Energis banks
• Acquisition for 4m from nevada of assets used to
  provide telecoms services to Viridian - paid for
  by offset against further debt owing to Viridian
• Service agreements with nevada
• Disposal is earnings positive
• No further provisions required

13
Pension fund update

• Final salary section closed to new entrants since
  1998
• Last formal actuarial valuation at 31 March 2000
  confirmed contribution holiday
• Surplus of 76.9m (post deferred tax) under FRS
  17 at 31 March 2002
• Funding position monitored in light of falls in
  equity markets
• Contributions could resume from 1 April 2003 -
  but this is subject to a review of assumptions
• Actual level of any contributions to be
  determined by valuation at 31 March 2003

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Patrick HarenGroup Chief Executive
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Transmission Distribution

• Operating profit of 35.5m (2001 - 34.1m)
• Network capital expenditure of 30.0m (2001 -
  39.0m)
• New distribution control centre
• Growth in units distributed of 1.9 number of
  customers increased to 716,000

16
Agreed price control

• Building blocks (figures expressed in 02/03
  prices)

m 02/03 03/04 04/05 05/06 06/07 NPV _at_
6.5 Allowed revenues 156 151 146 141 136 628 Al
lowed capex 43 51 49 48 48 Allowed
opex 71 68 65 62 60

• RAB (02/03 prices)
• Opening RAB at 1 April 2002 677.6m
• Closing RAB at 31 March 2007 736.4m
• Licence modifications close to finalisation
• Other incentive arrangements to follow

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Other NIE businesses

• PPB / SONI
• Operating profit of 2.9m (2001 - 2.4m)
• Price controls to be extended
• NIE Supply
• Operating profit of 3.9m (2001 - 4.4m)
• Price control in place until March 2005
• NIE Powerteam
• Operating profit of 1.0m (2001 - 1.0m)
• External sales representing 22 of total

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Moyle interconnector

• Operating commercially since April 2002 final
  cost 110m, including interest during
  construction
• Operating profits of 3.4m
• Availability 99 capacity auction into eligible
  market in current financial year fully subscribed
• Ofreg consultation on financing proposal - could
  result in disposal

19
Huntstown CCGT

• Full combined cycle output achieved in August
  2002
• Final commissioning scheduled for end November -
  on time and on budget
• Investment of 149m at 30.9.02 out of total
  expected investment of 163m (including interest
  during construction)
• Energia takes market risk, Huntstown bears
  operational risk

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Energia operating in competitive markets across
Ireland
Northern Ireland Capacity 2,100MW Peak demand
1,650MW Eligible market 400 MW Eligible
customers 580 Capacity sources Moyle, N/S
interconnector
Belfast
Dublin
RoI Capacity 4,600MW Peak demand
4,000MW Eligible market 1,250MW Eligible
customers 1,500 Capacity sources Huntstown,
Synergen, VIPP
21
Sx3

• Revenue increased to 61.1m (2001 - 51.5m)
• Operating profit pre goodwill of 0.2m (2001 -
  1.0m)
• Significant improvement compared to loss in
  second half last year
• Four profit centres - Ireland, Applications
  Solutions, Infrastructure Services and Scotland -
  in operation since April 2002
• New managing directors appointed for Applications
  Solutions and Infrastructure Services

22
Sx3

• Reduction in costs
• Management reporting/control systems embedded
• Ireland success in Classroom 2000 contracts
• Infrastructure Services further progress in
  managed services
• Applications Solutions iWorld implementation
  well underway
• Significant effort to be maintained

23
Property/Fleet Solutions

• Combined operating profits of 1.0m (2001 -
  0.8m)
• Property portfolio valued at 15m - 20m (book
  value - 10m)
• Fleet Solutions
• 1,900 vehicles under management
• 44 of vehicles with external customers

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Summary

• Agreement of TD price control review a
  significant achievement
• Moyle interconnector in commercial operation
• Imminent commissioning of Huntstown CCGT
• Repositioning unregulated interests
• Improvement in Sx3 performance
• Disposal of shareholding in nevada
• Intention to deliver real dividend growth across
  regulatory period

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Viridian Group PLCQuestions