Earnings call transcript: Elia reports strong growth in Q1 2025

Elia Group reported a robust financial performance in Q1 2025, with a notable increase in net profit and earnings per share (EPS). The company’s stock price surged by 14.87% following the announcement, reflecting investor confidence in its growth trajectory. According to InvestingPro data, the company trades at a relatively low earnings multiple, suggesting potential value opportunity despite its significant debt burden. The company’s strategic initiatives and market positioning have contributed to positive market sentiment, though InvestingPro analysis indicates the stock has fallen over 42% in the past six months.

Key Takeaways

• Elia’s net profit attributable to shareholders increased by 29%.
• EPS grew to €5.73, showcasing double-digit growth.
• The stock price rose by 14.87%, indicating strong investor confidence.
• Germany and Belgium remain key contributors to Elia’s financial results.
• The company secured €9.7 billion in sustainable financing.

Company Performance

Elia Group demonstrated significant financial growth in Q1 2025, driven by its strategic focus on energy transition and infrastructure development. The company reported total revenues of €4.1 billion, marking a slight increase from the previous year. While maintaining a strong current ratio of 3.09, InvestingPro analysis reveals the company operates with a debt-to-equity ratio of 0.42, reflecting its leveraged position in pursuing growth opportunities. Elia’s performance highlights its strong position as a leading transmission system operator, particularly in Belgium and Germany, where it continues to expand its operational footprint.

Financial Highlights

• Revenue: €4.1 billion, a slight increase from the previous year.
• Earnings per share: €5.73, reflecting double-digit growth.
• Adjusted net profit: €512.5 million, up 24.6%.
• Regulated Asset Base (RAB): Grew 28% to €18.5 billion.

Market Reaction

Elia’s stock price surged by 14.87%, reaching a new high as investors reacted positively to the company’s strong financial results and strategic initiatives. The stock’s performance places it closer to its 52-week high of €106.8, reflecting a bullish market sentiment.

Outlook & Guidance

Looking ahead, Elia plans to invest €31.6 billion from 2024 to 2028, focusing on infrastructure and energy transition projects. The company has set an ambitious target for net profit in 2025, ranging from €490 million to €540 million. Elia remains committed to maintaining double-digit EPS growth and achieving a return on equity target of 7-8% in Belgium and 8-10% in Germany.

Executive Commentary

Bernard Houstin, CEO, emphasized the company’s commitment to exceeding expectations: "Our new motto should be beat the budget rather than meet the budget." He also highlighted the societal impact of the energy transition, stating, "The energy transition is a societal revolution that we are undertaking together for the benefit of future generations."

Risks and Challenges

• Regulatory changes in Germany could impact future operations.
• Geopolitical tensions may affect global energy strategies.
• Increasing electricity demand from AI and data centers requires significant infrastructure investment.
• Potential delays in project execution, such as the Princess Elizabeth Island offshore wind project.

Q&A

During the earnings call, analysts inquired about potential asset rotations and partnerships, as well as the regulatory framework changes in Germany. The management discussed the postponement of the HVDC contract for the Princess Elizabeth Island project and explored funding options, including hybrid instruments.

Full transcript - Elia (ELI) Q4 2024:

Moderator/Host, Elia Group: Good morning, everyone, and welcome to this live streamed event that is being broadcast from our headquarters in Brussels. Over the next hour or so, we will cover Elia Group’s twenty twenty four full year results. And for this, I have been joined by the CEO and the CFO, Bernard Houstin and Mark Konigs. Welcome. What’s on the agenda?

First, Bernard Houstin will provide us with an update about some of our ongoing projects. We’ll also look back at the most important achievements from 2024. And Mark Konigs will then take us through the financial results and the outlook for the rest of this year. Before we can continue, you must take note of the disclaimer, which is on screen now. The slides and the script will be made available on our website later today.

Let’s begin with breaking news. This morning, Elia Group announced a EUR 2,200,000,000.0 equity package, which includes a secured agreement to raise €850,000,000 through a private placement of new shares to a specific group of investors. The private placement or PIPE involves Atlas Infrastructure together with Futurefence, BlackRock, CPP Investments and Alia Group’s reference shareholder Pibilty, Next Grid Holding. The close of the pipe is due to be promptly followed by a rights issue, which will form the second part of the equity package. Bernard Elia Group is welcoming three cornerstone investors to contribute to the growth of the group.

I think this is fantastic news, isn’t it?

Bernard Houstin, CEO, Elia Group: Indeed. We are really pleased to announce that we are welcoming high quality investors who carry a lot of sector expertise. Their commitment shows that they have confidence in our vision, in our equity story and our long term growth potential. Their support reinforces our ability to execute our investment plan. It will enable us to continue playing a leading role in Europe’s energy transition.

So today’s announcements will allow us to continue investing in infrastructure and driving our growth strategy forward. That means the news is both good for Alia Group, but also for the societies that we serve.

Moderator/Host, Elia Group: Yes. Before diving into the details, let us introduce the partners and also the percentage that they are representing.

Bernard Houstin, CEO, Elia Group: Our reference shareholder, Publici, NexGrid will subscribe to million, maintaining its 44.8% ownership through a pro rata investment. The Australian Infrastructure Fund Atlas Infrastructure with the Future Fund and Australian Sovereign Fund will subscribe to million. This represents 27.6% of the pipe. BlackRock, an American multinational investment company, will subscribe to million. An equal amount will be invested by CPP investment and Canadian pension funds.

They both represent 13.8%. It is important to highlight that this transaction allows us to raise equity in the most efficient way possible. Unlike traditional equity raises, this deal was structured without any discount to VWAP. Ultimately, this deal benefits all shareholders. Along with today’s transaction, I believe Elia Group now has a very solid and diversified core shareholder base in place that will support our future growth.

Moderator/Host, Elia Group: Yes. Today’s private placement is only the first step of a broader equity package. Let’s go through it step by step. Bernardo, what is due to happen next?

Bernard Houstin, CEO, Elia Group: Yes, indeed, Marlene. We kick start the equity funding process now through a pipe private placement of million, followed by a rights issue of billion to be executed promptly following the PIPE transaction. So in total, we intend to raise billion. And in this regard, it’s important to mention that all reference shareholder, Publicity Nex REIT and all three investor have also committed to participating in the billion rights issue pro rata to their stake following the pipe. So this leads to rights issue being in excess of 55% committed and therefore significantly derisking the rights issue transaction.

Overall, the breadth of investor engagement and the strength of investor interest in the PIE process make us highly confident in the delivery of the proposed equity package.

Moderator/Host, Elia Group: Let’s now look at the bigger picture. What about then the remaining equity needs?

Bernard Houstin, CEO, Elia Group: Our total equity needs stands for 4,000,000,000, 4 point 5 billion euro with 2,200,000,000.0 already expected to be secured. We’ll still need around 2,000,000,000 between ’26 and ’28. And the very good news is that we have a solid funding plan in place leading up to 2028 that could cover even more than our equity need. More specifically, the group has a broad toolkit providing us options. Hybrid bonds, we have ample headroom to raise additional funds through these instruments.

Post transaction, the group has an additional billion equity credit, a figure that will continue to grow over time. Next to that, we could also consider reinforcing the capital of our operating entities. We may consider bringing in a minority partner at this level. And finally, with the corner store partners, we are set to further fund our growth. Therefore, we are convinced that this will provide a clear message to the financial markets and remove the current overhang.

Moderator/Host, Elia Group: Thank you, Gerhard, for explaining the transaction. And I’m sure there will be questions about the financial roadmap during the Q and A session that will follow our presentations. Let’s now take a take a moment to reflect on 2024 and the next video will highlight last year’s most significant events.

Presenter, Elia Group: In January, Nemo Link, the subsea interconnector between The UK and Belgium, celebrated its fifth anniversary. Its excellent operational and commercial performances make it one of the most efficient interconnectors of

Presenter, Elia Group: its type in the world. It helps to be able to lower power prices, in both countries. And in fact, I think the link has made more than €200,000,000 for consumers, and that gets split and returned to consumers in both countries.

Presenter, Elia Group: Ten years after its creation, IlyaGrid International is fully contributing to the group’s market positioning. As one of EliaGroup’s subsidiaries, EDI provides consultancy services and has visibility over new industrial developments around the world, growing the group’s knowledge and expertise.

Bernard Houstin, CEO, Elia Group: The early days of a company like that is always very slow ramping up. And so the last five years of the ten years of history were actually the one where we really had an impact. So this is where we grow internationally. This is where we sign nice contracts, and this is also where we could hire more even more interesting people on board.

Presenter, Elia Group: In April, a government delegation visited the construction site in Vlissingen where the or foundations of the Princess Elizabeth Island are being constructed. The artificial energy island will be located in the Princess Elizabeth wind zone, which is Belgium’s Second offshore wind zone and will play an essential role in the country’s energy transition. In October, the European Investment Bank, EIB, and Eylea signed a 650,000,000 green credit facility agreement for the Princess Elizabeth Island. The EIB’s support highlights the leading role Ilya is playing in connecting offshore wind to the European onshore grid and strengthening the integration of Europe’s energy market.

Presenter, European Investment Bank: We finance project that push the boundaries of what is possible. And the Princess Elizabeth Energy Island is a real testament to our commitment to a more sustainable future in Europe. And at the same time, development of such projects creates jobs and continues to position Europe as a leader in the global green economy.

Presenter, Elia Group: Ahead of schedule and 25% below budget, fifty Hertz completed the Ostwind two project, connecting two wind farms in the Baltic Sea, Arcadis Ost and Baltic Eagle. 50 Hertz was also given the green light to start work on its Ostwind three project. For the first time, the entire substation will be planned, constructed, and operated by fifty Hertz, in addition to the cable system that will connect the wind farm to the transmission grid. On land, fifty Hertz will construct a new substation. During the Wind Europe Conference in Bilbao in April, Elia Group and the Danish wind developer, launched Making Hybrids Happen, a paper aimed at helping Europe overcome the barriers that are hindering the development of hybrid wind projects.

Building on this, in October, Elia Group launched its 2024 viewpoint, Going Like the Wind. The study outlines how international collaboration, the derisking of investments, and spatial planning could lower the cost of Europe’s energy transition. The paper explains how maintaining the current status quo would put clean competitiveness at risk and would mean missing out on significant efficiency savings.

Presenter, Elia Group: I I think one particular challenge which is raised in the study is the distribution of cost and benefits between exporting countries and importing countries. That that’s a challenge that we really have to, to try to find good solutions for. Because if we don’t find solutions there, that may sort of hamper the development of these big hybrid offshore installations that that we need to to harvest the wind resources in the sea basins we have in in Europe.

Presenter, Elia Group: Beyond the reports and studies, the year was also marked by numerous stakeholder events. In March, over 100 participants took part in Elia Group’s hackathon in Brussels. Participants explored how flexible assets, such as electric vehicles and heat pumps, can be remotely controlled in response to real time system needs. NPlan, a British start up, won Elia Group’s seventh Open Innovation Challenge which focused on accelerating the delivery of capex. NPlan won a €50,000 prize to develop its project alongside experts from Elia Group.

To end, a short overview of several awards we won. Our interactive exhibition, Going Like the Wind in Ostend, got a Belgian event award. More than 25,000 enthusiastic visitors were taken on the journey of electricity from the wind turbine to the electricity plug at home. Both ETB and fifty Hertz were once again celebrated as top companies. But the cherry on the cake was the award for best sustainability report from the Belgian Institute of Registered Auditors.

The judges praised the continuous improvements Elia Group has made in integrating sustainability into its strategy as well as the numerous interactions between Elia Group and its stakeholders.

Moderator/Host, Elia Group: And as we look back on 2024, what stands out the most, Bernard Guston, on a personal level, I would say, your switch from Chairman to CEO. But if you take a step back, what else stands out for you?

Bernard Houstin, CEO, Elia Group: Well, looking back at ’twenty four, it’s clear that the energy transition is accelerating. As a society, we want to reduce our dependence on fossil fuels. And the shift towards decarbonization goes hand in hand with electrification. It requires the timely readiness of extensive new infrastructures. In response, Elia Group delivered on its investment totaling billion.

On top of this, we established our first partnership with a U. S. Company, and we welcomed a record number of new employees into our growing operations.

Moderator/Host, Elia Group: That’s the positive side of the story. However, making progress on the energy transition seems to be becoming increasingly complex. The supply chain is under much pressure, and this has placed the financial burden of the energy transition at the center of many heated debates, certainly in the last week. Bernard, isn’t it?

Bernard Houstin, CEO, Elia Group: Yes. Well, geopolitical tensions are reshaping global energy strategies. And in the current context, striving for a more independent energy system is becoming even more crucial. Last week, European Commission President, Ursula van der Leyen, presented the Clean Industrial Deal. She clearly stated that Europe’s reliance on imported fossil fuel is the primary driver behind rising and volatile energy prices.

While our rationale for the energy transition may have evolved, our societal objective remains unchanged. Let us not forget, the transition is a societal revolution that we are undertaking together for the benefit of future generations.

Moderator/Host, Elia Group: Yes. Bernard just mentioned the Clean Industrial deal last week. Ursula von der Leyen indeed presented it as a transformational business plan that integrates both climate action and competitiveness into a comprehensive growth strategy for Europe. Let’s watch a short clip from her opening speech.

Speaker 6: The more we have to import fossil fuels, the more depending we are on the global market. So we have to bring these prices down. And of course, we do not start from scratch. Since the launch of the European Green Deal, we have saved €60,000,000,000 of fossil fuel imports. And how was this possible?

Because of the low carbon approach, thanks to cheap homegrown renewables and as a baseload nuclear. But we need more predictable prices than we have today. This is good that we have reduced, but we need much more predictable prices and structurally lower prices. So we need more connections across Europe, more energy offtake and more energy efficiency. And all of this and much, much more is at the heart of the so called Affordable Energy Action Plan that we also have presented today and that accompanies the Clean Industrial Deal.

Moderator/Host, Elia Group: In terms of its decarbonization goals, Europe is staying the course and so the spirit of the Green Deal is still obvious. But van der Leyn said that as Europe fulfills these goals, it will become more flexible and more pragmatic. Bernard justein, in these transformative times, being more flexible, being more pragmatic, is that also something that counts for Eelif Group?

Bernard Houstin, CEO, Elia Group: Yes. One of our main priorities this year is finding the right balance between staying committed to our vision and objectives, while carefully considering stakeholder expectation. As we implement our plans, it will be crucial for us to demonstrate a strong awareness of costs. Our new motto should be beat the budget rather than meet the budget. It may be the case that industry will shift from rushing to meet the 02/1933 deadlines to adopting a more sustainable and steady pace of change.

This could help to balance demand, reduce bottlenecks and ensure a healthier project pipeline over the next decade.

Moderator/Host, Elia Group: Yes. And if this happens, what could it mean for the area group?

Bernard Houstin, CEO, Elia Group: Well, rather than moving at full speed in all areas of our business, we must evaluate and propose alternatives, both in the execution and financing of our activities to ensure sustainable growth. Well, take for example, the Belgian Energy Island. Market conditions for HVDC infrastructure are currently challenging. The costs for HVDC are doubling. We’re fully aware of this challenge.

And therefore, we postponed immediate signing of the HVDC contracts. Instead, we have initiated discussions about potential alternatives and their consequences. There is still a long road ahead before we achieve energy independence. However, given the high cost of the energy transition, some major projects across Europe have been delayed. It is essential to avoid a stop and go approach and instead ensures that growth remains manageable.

Moderator/Host, Elia Group: Keeping the costs under control, that’s something our CFO will be pleased to hear, Marco. It’s time to take a look at the financial results of last year. I would say go ahead.

Marco Konigs, CFO, Elia Group: Thanks, Marlin. Yes, we made significant progress on executing our five years CapEx plan, outlined during our Capital Markets Day at the end of ’twenty three. It’s solidly on track. We invested a total of EUR 4,800,000,000.0, EUR 1 point 2 billion in Belgium and EUR 3,600,000,000.0 in Germany. These amounts demonstrate our commitment to the energy transition and our ability to execute this plan in the interest of society.

Almost all our investments exceeding 99% are aligned with the EU taxonomy. As a result, our regulatory asset base has grown to EUR 18,500,000,000.0. This reflects a substantial increase of 22%, twenty seven point eight % compared with last year. In 2024, Ehrlich Group’s hiring drive was a success as we brought onboard a total of seven forty four new employees. This hiring milestone marks a crucial step in supporting our growing operational needs and strengthening our capabilities to meet future challenges.

Importantly, this is also in line with the hiring goals we announced during the Capital Markets Day. Furthermore, in terms of system performance, Elia Group once again secured an exceptional level of grid reliability, achieving 99.9% in Belgium and 99.8% in Germany. These figures underscore our commitment to operational excellence, ensuring high quality and efficient service across our networks. As a result, Area Group’s TSO are together two of Europe’s most reliable grid operators since we consistently meet and exceed industrial standards for reliability and performance. In terms of the group’s financial performance, it delivered impressive results in 2024, achieving a net profit attributable to EIA Group shareholders of million.

This translated into adjusted return on equity of 8.4%. Consequently, earnings per share reached reflecting a double digit EPS growth, in line with our guidance. In summary, EIA Group continues to strengthen its position as a key player in the energy sector, advancing towards a sustainable future through strategic investments and strong financial stewardship, while keeping a reliable system safely up and running.

Moderator/Host, Elia Group: Yes. Thank you, Marco. So the earnings per share reached 5.73. Yes. Good.

2024 was marked also by several financing activities. Can you give an overview there?

Marco Konigs, CFO, Elia Group: Happy to do so. As our team proactively secured financing for the group. In 2024, we contracted €9,700,000,000 in sustainable financing across all group entities. We raised billion in debt capital markets, which were allocated to finance the CapEx programs in Belgium and Germany as well as the group’s growth opportunities in Energy Rig Giga. Additionally, we enhanced the group’s liquidity profile by securing billion in credit facilities, making our companies more resilient and robust.

By the end of the year, billion remained available either in cash accounts or through undrawn facilities, derisking our operations into the new year. Overall, these transactions highlight the group’s ability to secure funding, which is essential for its growth. They also emphasize our dedication to diversify our credit investor base, integrating sustainability into our financial strategy and maintain prudent financial management to the benefit of all stakeholders. Amidst a challenging environment, EIA Group delivered very strong results.

Moderator/Host, Elia Group: Thank you, Marco. Fia, thank you for sharing the initial insights with us. And of course, there are plenty more to come throughout this event. Let’s now shift gears to politics. Belgium has a new government and Germany has just wrapped up its elections.

But what about Elia Group’s international activities in The US now that President Trump is back in the Oval Office? About a year ago, Helia Group took a big step into The U. S. Market by acquiring a minority stake in EnergyRe Giga Projects, our acquisition our first acquisition in The United States. EnergyRe is a U.

S.-based Project Developer specializing in clean energy solutions. And they have currently we have currently three transmission projects in the pipeline. And when you hear Trump say drill, baby, drill, and when you know he is very skeptical about offshore generation, it’s pretty clear that integrating and transporting renewables isn’t his top priority. So Bernard, could you share your thoughts with us on how this might impact our business in The U. S?

Bernard Houstin, CEO, Elia Group: Yes, Marlene. We are seeing some challenges in The U. S. Electricity sector, particularly around the future development of wind power and especially new offshore wind. That said, the need for new transmission infrastructure has never been more urgent.

The demand for electricity is surging, not just to power AI and data centers from the big five tech companies, but also to meet the growing needs of major cities. And most of the activities of Energy Rigiga are focusing on transmission. Most investments through Energy Rigiga are currently focused on advancing onshore activities. The two projects are called Clean Path New York and So Green, and they are HVDC transmission projects crucial for electrifying the New York City and the Chicago areas. So these initiatives are largely handled at state level.

And we witnessed a strong commitment from local authorities to keep things moving forward.

Moderator/Host, Elia Group: Yes. We know that President Trump is opposed to offshore wind development. We have only a very small stake in one offshore project, leading light wind. What does it mean for the project, Bernard?

Bernard Houstin, CEO, Elia Group: Well, leading light wind already has its offshore lease in place. However, with project cost rising, the project requested for extra time to continue discussion with our supply chain partner and the New Jersey authorities. And right now, we are keeping a close eye on potential actions from federal departments and authorities to assess how they might impact the project’s timeline in the light of the new Trump administration. But allow me maybe a remark on all our U. S.

Activities, Marlene. The business model of energy regiga is different than our main business. It’s about developing and building projects and then progressively divesting in order to rotate assets over time. Our added value as Elia Group is to support the de risking of the projects through their life cycles, thanks to our extensive transmission and HVDC transmission expertise in our home countries.

Moderator/Host, Elia Group: And that brings us back to Belgium. The new Belgian government will soon have to make some big decisions about the country’s energy mix as we move towards 02/1950. Given that building a new line or cable takes about ten years, there’s no time to waste and to help policymakers about to take informed decisions about the future system, Ilya published the Belgium electricity system blueprint in 2024. The paper is a roadmap that is aimed at ensuring that the necessary upgrades to the high voltage grid are completed on time. Ehrliad Transmission Belgium CEO, Frederic Dunant, will take us through the key findings of the paper in next video.

And he will also touch upon an important topic we have already raised today, the cost of the Belgian energy islands.

Frederic Dunant, CEO, Elia Transmission Belgium, Elia Group: We explored different options and came to the front conclusions. Doing nothing is the most expensive option. Doing nothing means no additional generation plants being built on top of what is already planned for Belgium. At the same time, maximizing Belgian renewables is a no rocket solution in all scenarios. In nearly all scenarios, offshore wind proves effective, while new nuclear power plants are only cost effective in some cases.

Extending existing nuclear plants, based on the cost assumptions of the Federal Planning Bureau, it remains a cost effective solution. What does it mean? It means that Belgium’s future energy system does not depend on choosing between nuclear power plants or renewables. No. What we need is a complementary approach, an end to end and not an or or approach.

We’ll not take any decisions about the future energy mix, but we are calling on policymakers to quickly develop a long term vision. This will be a key factor in ALA’s next Federal Development Plan. Setting clear targets will be essential for planning out the right investments. That’s a long term vision. In the short term, we stand at the intersection of three key strategic shifts: climatic, economic and geopolitical.

Each of these shifts point to the same conclusion: achieving greater independence from fossil fuels to the large scale integration of low carbon resources. We are witnessing an international race to implement projects that accelerate energy transition. This is putting immense pressure on supply chain and the availability of sufficient technical skills. Combined with rising material costs and inflation, this has led to significant cost increases. In some cases, the price of specific equipments has more than doubled.

As a result, we are seeing unprecedented market price for direct current infrastructure. That’s for us a concern. In light of this, a And that’s for us a concern. In light of this, Elia, in close consultation with Belgian authorities, has decided to postpone the signing of the DC contract for the Princess Elizabeth Islands. By delaying this decision, we aim to keep all options open.

At present, alongside the Belgian regulator, we are presently supporting the authorities as they decide on the next steps to take.

Moderator/Host, Elia Group: The construction of the foundations of the energy island and the implementation of the AC contracts continue unabated. And these will ensure that two of the three planned offshore wind farms can already be implemented and they relate to 60% of the Princess Elizabeth Zone. And offshore has to be connected to onshore Bernard Justein. What about can you give an update on the two other major projects in Belgium, Ventilis and Boukri Denou?

Bernard Houstin, CEO, Elia Group: Yes, Marine. The Ventilis project is entering into a new phase. The project route has been defined, and we are now finalizing the environmental impact report. And this report details the measures we are taking to minimize the impact of the project on the environment, including compensation for residents who live nearby. Our goal is to finalize the permitting process for the project by the end of this year.

That’s an ambitious timeline, but it aligns with the objectives of the Flemish government. So if all goes as planned, construction could start next year. We expect Ventilos to be ready by 2029 in order to connect the first offshore wind farm of the Princess Elizabeth zone to it. The Boucle Du Hainaut project will be key for connecting the second wind farm to the shore. So the project will come online slightly later than Ventilis.

The permitting procedure for the project is ongoing. We’re currently engaging with local advocacy groups and we are confident that the Walloon government will provide us with similar levels of support for the project as it did in Flanders. Since this project is very important for the economic development of the region.

Moderator/Host, Elia Group: Yes. Let’s hope that the project doesn’t take seventeen years to develop because that’s exactly how long it took for the Okermark line in Germany. Seventeen Years mainly due to environmental concerns. The new overhead line covers a total distance of 150 kilometers. The line has increased the electricity transmission capacity of the region by a factor of three.

And now after a long delay, the line is finally operational. It eliminates long standing issues with local grid bottlenecks. The project is generating EUR 200,000,000 per year in congestion management cost savings. So this demonstrate that strategic grid investments pay off. And in Germany, many other projects started to materialize.

In 2024, ’50 Hertz invested more than €3,600,000,000 in its grid, and that’s double the amount invested in 2023. More than 900 kilometers of new on and offshore lines and cables were commissioned. Eight sixty three kilometers of lines are currently under constructions and under construction and more than 1,800 kilometers have been submitted for approval. And to tackle the challenge of working on so many projects at once, fifty Hertz had to increase the number of its employees and it workspaces. Later this year, the extension of its headquarters, the Netz Quartier, will be ready.

Fifty Hertz has also started the construction of a new offshore operations center in Rostock. And in Wilmeshdijk, a new regional center has been opened. And 2024 was for fifty hertz also a record year in terms of renewable energy integration, 73%, so maintaining a steady level of growth that was developed over the past few years as you can see now from the graph on the screen. Electricity consumption in Germany is expected to rise significantly over the next twenty years at a slower pace and to a lower target level than previously projected in the German grid development plan. Let’s hear a bit more on this from Stefan Kapferer.

Stefan Kapferer, 50 Hertz: Last year, fifty Hertz published a study about the expected electricity consumption till 02/1945. And we have all noticed that the energy demand is growing much more slowly as we would have expected, so more time for grid expansion. But less electricity demand and more time for grid expansion means less investment needs in the upcoming decade, so good news for electricity prices in our countries. Concretely, in Germany, it has an impact to the discussion about the DC corridors additionally foreseen in the last grid expansion development plan. So there is a great opportunity now for the next discussion about this grid expansion development plan to check which power lines of DC corridors are really needed in a short term period and for which of them we have more time to realize it.

First of all, Germany needs a stable and strong government, but also additional measures are needed in the energy transition. One of the most relevant one is investments in additional power generation on reliable basis. In Europe in the last few years, also a very well established one in Belgium. So I hope that the new government will look at these established capacity markets and develop an own one for Germany soon.

Moderator/Host, Elia Group: And to end our overview of the year, let’s briefly consider 50 Hertz position within Elia Group. Yes, Bernard, it’s clear Germany is becoming increasingly important for the group, isn’t it?

Bernard Houstin, CEO, Elia Group: Yes. Well, it remains a very, very strong pillar. And as the new CEO, it’s my ambition to reinforce the unique collaboration between Eria Transmission Belgium and FEMSI Gertz. We are now more than ever a multinational company. And let us not forget that Eria Group is also important for Germany.

We are a source of stability in the German Energiewende. We are a reliable partner for KfW, the Sovereign Fund of Germany, and are working for a solid funding roadmap to finance the expensive CapEx program. Meanwhile, the performance of our consultancy firm, EliaGrid International, EGI continues to improve. EGI keeps the group’s finger on the pulse by monitoring and understanding new global trends. We must not underestimate the importance of this.

Moderator/Host, Elia Group: Yes. There is one last point about I would like to briefly discuss. Two days ago, the German regulatory office, Beneza, published its first view for the new regulatory framework for TSOs in Germany. Marco, what can we expect from that?

Marco Konigs, CFO, Elia Group: Yes, indeed. The Beneza published a paper which contains the key elements of a future regulatory framework for Germany’s tier source. This paper is now the foundation of a public consultation process. One key takeaway is that we are moving towards a cost plus model with additional incentive mechanisms. Another shift is the introduction of a WACC model for capital cost remuneration.

Right now, our focus is on analyzing the details. Fifty Hertz is actively involved in discussions to help shape a well balanced framework. Over the next few weeks, we will be participating in expert workshops together with the regulator to contribute to that process. It’s also clear that the introduction of efficiency incentives and retro perspective in cost reviews still needs to be discussed further. Overall, the proposed framework remains investor friendly, but some of its critical elements still need to be clarified.

The move towards simplification, consistency and risk reduction is indeed something we appreciate. However, our final judgment will be based on the achievable return. So it’s too early at this stage to fully assess its impact on the financial position of the company.

Moderator/Host, Elia Group: Okay. Thank you for this, Alberto. Let’s now take a deeper look at the full year results. I would say let’s start with the group figures. So go ahead, Marco.

Marco Konigs, CFO, Elia Group: Overall, the area group delivered strong operational performance across all segments. The group’s revenues amount to EUR 4,100,000,000.0, a slight increase compared to prior years. In Belgium, revenues increased by around 16%. They have been mainly impacted by a higher regulated net profit, increased depreciations linked to the expanding asset base and increased net financial costs. In Germany, revenues decreased by around 2% mainly due to lower energy prices impacting the energy revenues.

This was mainly offset by increased revenues from the updated OpEx base with the start of the new regulatory period and the ongoing investment activities. EIA Group’s adjusted net profit rose by 24.6% reaching 512,500,000.0. This was driven by the execution of the investment programs in Belgium and Germany. The strong operational performance of the regulated entities and the higher contribution from Nemo Link. These gains were partially offset by increased non regulated funding costs associated with the investments in Energy Rigiga and EuroGrid.

Overall, Germany accounted for approximately 60 of the adjusted net result, generating a net profit of million. Belgium contributed roughly 40% with a net profit of million. Non regulated activities at NIMOLINK saw a decline of approximately €21,000,000 in result resulting in a net loss of €9,200,000. After accounting for the non controlling interest and hybrid costs, the net profit area group share rose by more than 29%, surpassing the updated Q3 guidance and reaching million by the end of the year. This resulted in an adjusted return on equity of 8.4 percent and earnings per share of EUR 5.73 per share, reflecting a strong double digit EPS growth.

Moderator/Host, Elia Group: Yes, good results, I would say. The expanding asset base of the group is, of course, an important contributor to this. How is this reflected in the ERP, the regulated asset base?

Marco Konigs, CFO, Elia Group: The rep is the key driver of our remuneration. Thanks to our successful realization of our investment program, the area group’s rep saw a notable 28% year over year increase, reaching billion by the close of 2024. Specifically, Belgium experienced approximately 16% increase, while Germany saw around 36% uptick. This growth trend is attributed to significant infrastructure projects undertaking in both countries to support the development of a unified and sustainable European energy system. This network aims to incorporate extensive renewable energy production and cross border electricity transmission, ultimately minimizing costs for consumers and ensuring energy sovereignty across Europe.

Looking ahead, we anticipate an average annual rep growth over 20% over the period 24% to 28% at a group level. As we project to invest accumulative CapEx of around billion on top of the billion spent last year. Now let’s turn our attention to the company’s funding activities. In 2024, debt issuance supported by operational cash flow remained our main funding source. By year end, net debt reached billion by excluding EG, what is a 46% up.

This was mainly driven by our billion investment program, while debt funding was used to finance our investments in The U. S. And strengthening the capital of 50 Hertz Eurogrid. As a result of these funding activities, Area Group’s average cost of debt rose to 2.8%, an increase of 70 basis points. The majority of our outstanding debt is fixed rate.

The group’s credit rating remains unchanged at BBB flat with a stable outlook.

Moderator/Host, Elia Group: Yes. That concludes the group overview. Let’s now zoom in on the Belgian segment.

Marco Konigs, CFO, Elia Group: Let’s go straight to the bottom line. The adjusted net profit rose by 18 to almost EUR $214,000,000, driven by three key factors: High Fare Remuneration, up by million, primarily driven by the regulated asset base and the growth of it and improved return on equity. For the current regular to a period going until 2027, the return on equity is updated annually based on the average ten year order rate. For 2024, the average ten year order rate reached 2.91% implying equity remuneration of 5.3%, exceeding the previous period. Increasing incentives up by €3,300,000 reflecting strong operational influence.

Higher capitalized borrowing costs up by million driven by rising assets under construction and a slight uptick in the average cost of debt. These positive FX were partly offset by regulatory settlements and the reversal of provision for the influenceable incentives down by EUR 4,500,000.0, resulting in a return on equity of 6.8%.

Moderator/Host, Elia Group: Yes. In October, ETP secured, you saw it in the overview, a green credit facility from the European Investment Bank recently followed by green bonds issuance. How have these initiatives strengthened ETB’s overall financial position, Marco?

Marco Konigs, CFO, Elia Group: Air Transitions maintained a strong capital structure with equity slightly above 40% of its regulated asset base, up 7% due to solid year end results. In early twenty twenty four, ETP issued its second green bond raising €800,000,000 to finance and refinance eligible green projects. Additionally, it further diversified its funding sources by securing a €650,000,000 green credit facility from the European Investment Bank, fully drawn by the year end to fund the first phase of the Princess Elizabeth Island project. ETB maintains a balanced debt maturity profile with all outstanding debt at fixed rate. The average cost of debt rose by 40 basis points to 2.4%.

Liquidity remains solid with the sustainable RCF and the commercial paper fully undrawn at the end. ETB’s BBB plus credit rating from S and P remained stable.

Moderator/Host, Elia Group: Yes, that was Belgium. Let us now focus on Germany where, as Marco already mentioned, a new regulatory period began in 2024. What other key factors influenced the performance of 50 Hertz, Marco?

Marco Konigs, CFO, Elia Group: For Germany, the new regulatory period is characterized by an equity remuneration for new assets that is linked to base rate that is updated on an annual basis. For our ’24 investments, this translates to a regulatory equity remuneration of 5.65% post tax, while investments made before 2024 have a fixed return of 4.13% post tax. Note that assets commissioned in 2024 will maintain an equity remuneration of 5.65% until the end of 2028. As mentioned, fifty Hertz achieved strong results. Net profit reached almost million, marking an increase of almost 41% year over year.

This performance was largely a result of a few key factors. Firstly, the growth of the asset base led to higher investment remuneration of million, although this was partially offset by increased depreciations and financial costs. The higher financial costs are driven by our debt issuance along the year and partly offset by increased capitalized borrowing cost. Secondly, there was an increase in the base year revenues of almost million due to the updated cost allowance that came with the start of the new regulatory period, which covered the million higher onshore costs we faced. This overall strong operational and financial performance resulted in a return on equity of 10%.

Moderator/Host, Elia Group: Yes, having reviewed 50 results, let’s turn now to its financial position.

Marco Konigs, CFO, Elia Group: In 2024, EIA Group and KfW demonstrated their confidence by injecting EUR 600,000,000 in equity into Eurogut GmbH, the mother company of 50, further strengthening its capital structure. EDA Group financed its contribution through debt issued at the holding level while KfW followed pro rata its share. To further fund the growth, Jurgot issued 3,000,000,000 in green bonds financing projects that expand grid infrastructure, integrate renewables and enhance system reliability. Debt duration was actively managed to maintain a balanced maturity profile with the average cost of debt rising to 2.9%, up 90 basis points from 23%. Additionally, Eurogrid secured a billion revolving credit facility, further strengthening its liquidity.

As of year end, Standard and Poor’s rates Eurogrid at BBB flat with a stable outlook.

Moderator/Host, Elia Group: Yes. In addition to its regulated activities in Belgium and Germany, ELLIA Group also operates Nemo Link and engages in various non regulated activities. So, Marco, how did this third segment contributed to the group’s results?

Marco Konigs, CFO, Elia Group: Our non regulated and Nemo Link segment reported a net loss of EUR 9,200,000.0 in 2024. Although NemoLink’s contribution increased by 4,500,000.0, driven by high availability and strong operational performance, additional funding costs of approximately 23,000,000 has been recorded. These costs steamed from the acquisition of Energy Re Giga and the financing of organic growth in Germany. Additionally, a lower contribution of wind grid due to the Energy Re Giga’s operational losses further impacted the segment’s results. At a group level, EIA Group completed the acquisition of a minority stake in Energy Rigiga in February with an initial investment of €250,000,000 This was financed through a €300,000,000 term loan replacing a bridge facility secured at signing.

Mid year, Elia Group issued a €600,000,000 senior bond with the net proceeds used for general corporate purposes, including financing of Eurogood GmbH and refinancing existing debts. Following these transactions, the holding costs of debt stands at 3.8% with a weighted debt duration of five point four years.

Moderator/Host, Elia Group: Before we turn to the outlook, there is one last area to take a look at. The dividend policy, what can we expect there, Marco?

Marco Konigs, CFO, Elia Group: As per our policy, Marlin, we envisage a dividend increasing in accordance with our policy amounting to per share. To be clear, the new shares that will be issued in the context of the pipe and the right issue will not be entitled to the 24 dividend that will be paid in June.

Moderator/Host, Elia Group: Okay. And as we wrap up the financial presentation, let’s turn our attention now what’s ahead, the outlook, starting with the CapEx plan. Any updates there, Marco?

Marco Konigs, CFO, Elia Group: We believe that increasing importance of managing our CapEx will require great dedication and strategic focus from our teams. Given the significant investments planned, our teams will prioritize Richard’s planning and execution to ensure that every euro is efficiently utilized. This will involve close monitoring of inflationary impacts on materials, maintaining strong relationships with suppliers to navigate market tightness and strategically accelerating project timelines where feasible and useful. The total investment for the 2024 to 2028 period has been increased from billion to billion. We already invested billion in ’twenty four, leaving billion to be deployed until ’twenty eight.

This revision is due to the three main factors: an increase in material costs linked to the inflationary environment, the tight supplier market accelerated commissionings in Germany and partly offset by the exclusion of a portion of the part of the DC components of the Energy Island in the five years plan. Consequently, we anticipate an annual rep growth of 17% in Beijing and twenty seven percent in Germany. For the period 25% to 28%, around 60% of the total CapEx is committed, making the CapEx plan relatively robust. The non committed portion is regarded as standard equipment or non critical assets, so we are comfortable that this will be available when required. Turning now to our financial outlook.

For ’25, EIA Group reaffirms its guidance from the Capital Markets Day, expecting a net profit EIA Group share range between million and million. This outlook is driven by expected investments of approximately billion in Belgium and factoring in Belgium Ten Year old of around 2.8% and approximately billion investment in Germany factoring in the base rate of 2.3% for regulatory return on equity.

Moderator/Host, Elia Group: Okay. Thank you, Marco. I suggest we now move on to the Q and A session. And in a moment, we’ll do a position which, Catherine van den Broard, our second CFO and also Janik de Koning, Head of Capital Markets, they will take my place during the Q and A session. And Stefanie Leuten, our Head of Investor Relations, will guide us through this.

Stefanie, could you share the first question with us, please?

Bernard Houstin, CEO, Elia Group0: Yes. Thank you, Marlene, and good morning to all my analysts. I understand it’s that we had some very exciting news this morning. You will all have a lot of questions, but may I ask you to keep your questions to two so that everybody has the chance to ask a question? So let’s first start with Temi from Barclays.

Please, Temi, go ahead.

Bernard Houstin, CEO, Elia Group1: Thanks very much, Stephanie. And good morning, everyone. And congratulations, on your announcement this morning. Solid set of results. Two questions from my side, one to do with funding and the other to do with Germany performance.

So on the funding side, I know you mentioned, going forward, you have capacity on the hybrid front, but also you could do asset rotations and disposals. Could you please elaborate on which assets you’d be thinking of for this for these disposals and rotations? That’s one. And then on the performance for 2024, we’ve seen very strong performance from Germany. And of course, your guidance for next year is also, you know, ahead of company gathered consensus.

You know, to what degree can we expect this level of outperformance in Germany next year? I know this year you hit the sort of 10% ROE level. So just kind of thinking for Germany next year. Should we kind of think that continues? And could you maybe elaborate on the drivers?

Thank you.

Bernard Houstin, CEO, Elia Group: I would maybe take the first one. Let go for the second one. But on the asset rotation, I just would like first to remind that today we already have in some assets some partners. And the best example is FMCGEST, where we collaborate since the start of the adventure with KFW. And we are very happy about this collaboration.

It makes a lot of sense to have the sovereign funds of Germany next to us in the asset of Fintigets, and it works. So that means that we don’t have precise view on which assets we would consider. But based on this example, I think we could expand this setup and this model in the future. On the second question?

Marco Konigs, CFO, Elia Group: Yes, happy to take it. On the performance or the outperformance in Germany, it’s fair to say that usually at the beginning of a regulatory period, we are doing better as the setup of the costs. And you do see the difference between the €45,000,000 of upgrade in the cost allowance while the cost itself rose by €70,000,000 only. That is something which is imminent in the system and which is going down over the five years. But of course, in the beginning, we usually benefit from that one.

Second big driver is fair to say the optimization of the commissioning dates as it turns out positively for the performance of the company to commission soon once the project really has been started the construction. And this was a high contributor to the result of almost million net if you deduct the impuret depreciation, which we could deploy in the revenues and in the returns compared to the real depreciation, which we faced once we are commissioning. And this is an optimization which we do see and which we strive for to have over the five years period, but they are less predictable, of course.

Bernard Houstin, CEO, Elia Group1: Thank you very much.

Bernard Houstin, CEO, Elia Group0: Thank you, Temi. Let’s now go to Wanda from UBS. Wanda, go ahead.

Bernard Houstin, CEO, Elia Group2: Hi, good morning. Congratulations on the move to raise capital. Two questions from me and I will focus on Germany. The first one is on the special infrastructure fund. There has been a lot of noise about this €500,000,000 to be invested in infrastructure, including grids.

E. ON yesterday was saying it’s probably more focused towards TSOs than DSOs. So what are your expectations? Should we see it more as a funding source of your CapEx, very cheap financing? Or should we see it as a source of basically to cover subsidies?

Because there has been a lot of focus in Germany about high grid costs. And the second question is sorry to come back on the proposals from the German regulator, Marco. I know you said it’s too early to have a view what it means, but when do you expect to have enough visibility to form a view and to share it with us? I think TSOs can submit the proposals by the end of eighteenth of April. So what is on your wish list?

And do you see a move to a cost plus model as a positive? Thanks.

Marco Konigs, CFO, Elia Group: Okay. Happy to pick up. On one hand, to the 500,000,000,000 fund, it has been a recent announcement. It is fair to say that, of course, energy infrastructure has been mentioned. But it for the time being, it’s not approved yet, so it needs to be installed.

And there are no specific plans being visible, how this capital is being deployed and split over the topics which has been mentioned. To be fair, on our side, we feel comfortable with the funding set and our ability to fund the CapEx plan which we put in place. So there’s no need on that. But on the other side, we appreciate if there’s additional source of funding provided by that fund. Whether this will be the case, that will be subject of further political discussion in the next future.

To the second point on the regulation, of course, first of all, harmonization on an offshore, de risking cost coverage, consistency in the system is something we appreciate. So that’s fair to say. On the other side, the dependency on the return rate becomes to some degree higher depending on the introduction and the level of the incentives which are not being put in place yet. And you are right, there is a public consultation on that on that framework, but the framework itself will not be the final determination. So it will be the first stage.

So and everybody can send in a kind of documentation, a kind of comment to the regulator, you as well, and appreciate if you give a glance on your expectation to the regulator too as this is a welcomed input in the course of discussion. And then second step after that debate, there will be a public hearing either, and we are participating, as we stated, in a kind of consultation mode there. BNSR will take some time to put it into a kind of firms, yeah, firm framework, which then will be, again, in a formal process, being consulted and where everybody has an option to to come on down. The plan which Binas has disclosed is to have that framework being fixed at the end of the year. So I would say, over the year, there will be some more color, in particular, on the critical elements.

When this will be replaced, the case is, of course, the DSO framework needs to be set at EDA, and they are a little bit in front of us. That’s really early to say, but that will be subject of a discussion in April’s workshops EDA, how the specific timeline will looks like. And once we have it, of course, we will share it with you.

Bernard Houstin, CEO, Elia Group2: And what will be on your wish list? If I can just follow

Marco Konigs, CFO, Elia Group: Yeah. Of course. On one hand, it needs to be an attractive return, which hits the expectation of the capital market. That will be the most important element. The VEC model, which is being put in place, is something which is common standard in Europe.

And the first indication is that we can further benefit from the leverage which we have on a German level, which is a positive news. And depending on the depth rate, which they are going to deploy there and as an indication that it will be rating adjusted, gives us the opportunity to outperform that as well. So these elements are not fixed yet, but this is something we need to elaborate and these are on our wish list. And on incentives, it’s not a blank sheet, but there’s something which for our understanding needs to be achievable to some degree, and these three elements are on our wish list.

Bernard Houstin, CEO, Elia Group2: Thanks a lot.

Bernard Houstin, CEO, Elia Group0: Thank you very much, Wanda. Let’s now turn to Alberto from Exaneu. Alberto, yes, go ahead.

Bernard Houstin, CEO, Elia Group3: Hello. Can you hear me now? Yeah.

Bernard Houstin, CEO, Elia Group0: Yes. We can hear you now.

Bernard Houstin, CEO, Elia Group3: Yeah. Okay. Thank you. Sorry. I was on mute.

So, yeah, my first question will be regarding the CapEx plan after 2028. Maybe if you can give us some light on how what do you expect in both Belgium and Germany in terms of CapEx, if you expect to remain at the same levels, that you are expecting in the latest years of the plan or at reduction or anyway? What’s your what’s your beyond that? And my question and my second question will be related to the supply chain issues. You mentioned that one of the key drivers of the change in your your CapEx plan is the cost increase.

Maybe if you can give us some sensitivity on what has changed from the previous from the from the previous update to the current update and and what are the key issues that you are seeing this. And also maybe if you could quantify how much of this CapEx is already secured or contracted, and, what’s the exposure on the HMBDC that you have in the CapEx, and if you if you foresee any issue there apart of the ones that you have had on the benefit of the Iceland? Thank you so much.

Marco Konigs, CFO, Elia Group: These were quite comprehensive questions. But maybe to start with the CapEx program, but what drives us up there? So on one end, the 30,100,000,000.0, which we announced during the Capital Market Days in the horizon, which we have given visibility on, increased to €31,600,000,000. That’s 1,500,000,000.0 up. And it’s driven on one hand on inflationary tendencies.

That’s around 2,000,000,000, which we must admit is a huge drive of the CapEx program. While on the other side, we made scope adjustments in Germany, which lead to a further increase of around 1,000,000,000 while we rescheduled mainly the DC components in the Energy Island for a little bit later, what reduced the CapEx program in total over the group of 1,500,000,000.0. So these three items, price and scope adjustments up and down, were the main explanation for the move of the CapEx program. Why 2024 to 2028? On one hand, it’s fair to say that Bernard mentioned in his speech that there’s a political discussion on the speed of the energy transition and that determines and that’s a fair point a little bit the CapEx level ahead.

On the other side, we will remain on a relatively high level, and it will remain a growth story beyond ’28. But for the time being, as recently governments in Belgium and in Germany, in Germany, it’s still to be formed, but has been put in place. That’s something we need to elaborate together with authorities, how the speed will looks like. And on top of affordability, we’ll open a discussion, in particular in Germany, on the kind of solution to be deployed, in particular, on the big DC corridors. And these are relatively big drivers of the entire program and on the cost connected to that.

So framework is the second one where we want to have a kind of better visibility, of these kind of CapEx requests. And that will give a little bit of framework how we structure our CapEx program on the horizon beyond. On the HVDC, I would say in Belgium for the time being, as Spena stated, it’s post to some degree and particularly the big one on the Princess Elizabeth Island. However, we have other elements to further work on. In Germany, there are two big projects impacting the program that’s on one in Ostwind 4 and the start of LAN Win 3.

These are two gigawatt five twenty five kV DC projects, which on top of the DC corridors, so SotheasLink and SotheasLink Plus gives a relatively high amount of the CapEx program and determines the entire volume there. It’s on one side fair to say that the contracts which we have put in place are exposed to indices and potential increases. On the other side, we put in place, and this has been mentioned as well, quite a strong monitoring, a strong dialogue in place to protect ourselves to some degree and make it affordable for the society.

Bernard Houstin, CEO, Elia Group: If I may add on the CapEx beyond ’28, I think as you know in both countries, we have today discussions about the energy mix, which will influence, of course, the picture. And that’s why we want to participate, but also wait for the outcome of these discussions. But it’s clear that growth will continue, because that you call it for decarbonization of the society or energy independence, which is extremely important for Europe. The path is the same. It’s basically more electrification.

And so I’m quite convinced that beyond ’28, we will continue to have a good growth on our activities. However, we also hope that this growth will be better planned and also absorbable, and that’s, I think, what will happen. So the message here is clearly, we expect growth to continue and maybe for other reasons that it was originally anticipated. But we also hope and go for a more planned growth. As I said in the previous discussion, we need to avoid too much stop and go, but have a better planning of this growth.

And what’s happening now at European level is, of course, very encouraging.

Marco Konigs, CFO, Elia Group: So there was one question left on the commitment which we have taken on the five years horizon, which we have given visibility on. That’s a 60% around committed. And as a rule of thumb, 20% beyond of the 60% are contracted, so without commitment, usually via framework contract without commitment. 20% are still open to acquire, but that’s something we do see doable in the time horizon, which we are talking about as this is uncritical. So there’s no scarcity on these elements.

Bernard Houstin, CEO, Elia Group0: Thank you, Alberto, for your questions. We can now go to Wim from KBC.

Bernard Houstin, CEO, Elia Group4: Yes. Hi. I hope you can hear me.

Bernard Houstin, CEO, Elia Group0: We can.

Bernard Houstin, CEO, Elia Group4: First, congrats on these great results. I’ve got also two questions. The first, and it was already mentioned that the German infra program that will be kept out of the budget as a positive. It’s very recent news, but what happened also was that the Bund went into a steep increase and is now almost approaching, I think, 2.9. In your guidance for Germany, you mentioned it’s based on 2.3.

Can you just run us through what the impact will be on the outlooks supposing that, let’s say, for the rest of the year, it stays at this level or even above? And then the second question, also you mentioned the Elizabeth Island, so the high voltage DC. Like, till when can you wait for this decision? And potentially, could that be a positive as obviously some of these projects are now, especially in The US, put on maybe a longer horizon that eventually this whole supply problem eases and that actually you could benefit from that. So just your view on that.

Thanks.

Bernard Houstin, CEO, Elia Group: So should you take the first one and I take the second one?

Marco Konigs, CFO, Elia Group: Yes. So on the sensitivity side, as a rule of thumb, the 10 basis points on the underlying rate, up or down, gives you around 2,000,000 on profit on the German segment. So that’s a rule of thumb which you can consider.

Bernard Houstin, CEO, Elia Group: And on the Princess Elizabeth Island, so basically, I think, yes, we well, first, I would like to highlight that we really took our responsibility because we could see that the budget was growing merely because of inflation, but market effects. And we saw that on the supplier side and the HVDC component is depending on a very few set of suppliers. We saw that the prices were increasing and that there was enormous tension. And therefore, we felt it was the right moment to put a pause, and that’s what we recommended to the Belgian government. And we felt comfortable to do so because of two other reasons.

The first one is that we were working on alternatives. So that means that if we were not to go with the DC component as original planned, we have also other technical alternatives. And secondly, and now that one is solved, there was at the time where we needed to decide a certain political uncertainty in Belgium. We didn’t have a government. And now, of course, we have a government, so we have really a partner with whom we can discuss about the best solution for Belgium.

But your point, of course, is correct. One of our assessment was to say that the market from a supplier’s point of view was not healthy anymore, and it was better to wait because we have the possibility to wait, and I will come back on your part of the question on that part. But there was a possibility to wait, and it was better to pause a little bit at that moment. It’s also true that in the meanwhile, we see that some other projects have been delayed. And I think the good news is that they have not been stopped because these projects are very important for the energy transition

Marco Konigs, CFO, Elia Group: that

Bernard Houstin, CEO, Elia Group: we need for decarbonization purposes, but also to ensure the independence, the energy independence of our continent. But we want to be more cautious in the planning. And so we were kind of the first one to go in that direction, but we see that some other projects are also a little bit more on the slower path, which I hope will bring the supplier market to a more reasonable level. Now in terms of timing, we have now, of course, ongoing discussion with the Belgian government. And they’ve announced, by the way, that they wanted to have a decision in the near future.

I think we will now be working on a solution towards the summer. I would say the Belgian government has announced end March, but I think it’s a complex project. We are already early March now, but we are busy working on different options, including pursuing the current plan. And I think by the summer latest, we should see clear on that respect.

Bernard Houstin, CEO, Elia Group0: Okay. Thank you, Wim, for your questions. Let’s now turn to Bartek from Societe Generale Brunnstein. Go ahead, Bartek.

Bernard Houstin, CEO, Elia Group5: Thank you very much and good morning. Thank you for taking my questions. Two, as I’m only allowed to ask two. First of all, I would like to ask you about the CapEx over run and CapEx under run because in the press release actually in the presentation you mentioned that on OZ2 in two you managed to have the CapEx 25% lower than budgeted. What does it mean?

Does it mean that you keep the savings and you simply increase your RAP by 100% CapEx and you you managed to save 25, so this is your gain or whatever you spend goes into RAP? And on the flip side as well, if you if you are talking about inflationary impact on your on your CapEx and your budget plan. Does it mean that all these inflationary increases will be also reflected in your RAP or there is a risk that the regulator will not agree to that? That’s the first question. And second question to push a little bit more on Elizabeth Island to understand it better.

Would you tell us how much of that is included in your business plan? Meaning, what percentage of completion of the project is included in your business plan until 2028? And what CapEx does it take into account in that plan? Thank you very much.

Marco Konigs, CFO, Elia Group: Yes, maybe starting with the second one. So the Princess Elizabeth stake in the total CapEx number is amounting to EUR 3,200,000,000.0 in total. And we are still optimistic that by ’26, the island itself will be installed and we are targeting to commission the AC part by end of twenty eight. So that’s still the plan and the numbers are reflecting that. That’s first.

Second one, on the overrun, the answer is simply no. That’s good and better on the same time. On one hand, the wrap is taking up all the investments which we are going to spend. So far, we never faced any challenge in terms of costs, which shall be reduced by the regulator. And that’s the main reason why we are going to use public tender procedures as this is evidence that this is a proper market pricing, which we deploy there.

And of course, the 25% lower than budgeted on the project, which we mentioned, CWA2, is something which is for the benefit of the consumer.

Bernard Houstin, CEO, Elia Group: And maybe coming back on the Princess Elizabeth Island also, I think it’s very important that today, the investment is in our regulatory base. And so unless we would really not act professionally, which we don’t do, there is no reason to reject the cost. And I think it’s important to remind that. So that’s very important that, and by the way, it never happened in the past, and it will not happen in the future. There was also a lot of debate about the increase of budget on the DC component.

And of course, it would be very difficult to reject costs that have not been engaged. And that’s why we put the pause on this and we took the initiative to put the pause on these developments because we felt that the cost, because of the market pressure, were not going the right way. But the fact that we’ve decided to pause these investments means that the cost have not been engaged. So of course, there is no single risk of having them being rejected given that they don’t exist.

Bernard Houstin, CEO, Elia Group0: Thank you. Let’s now turn over to Harry from Morgan Stanley. Harry, please go ahead.

Bernard Houstin, CEO, Elia Group6: Hi, good morning. Thanks for taking my questions. Again, two for me. Firstly, coming back to the German infrastructure fund, and I appreciate it’s still early days and so we don’t have all the clarity here. But from your current understanding, do you see that could that fund be used to inject further equity into 50 Hertz, for example, via KFW and expand effectively the existing arrangement there?

Or would it have to be in the support via other methods, which were mentioned earlier in the course? That’s the first. And then the second question, in your German CapEx, you used to provide quite helpful breakdown rough breakdown of how much of that is driven by offshore wind, how much of that is driven by the the electricity transmission backbone in the country? And how much is driven by, I guess, maintenance? Could you please give us an update on that and how that may evolve as we approach the end of your twenty eight guidance period?

Just get a sense of the impact of offshore wind build out in Germany.

Marco Konigs, CFO, Elia Group: Maybe to start with the structure, with the technical question then. In Germany, it’s still valid as we have posted at the Capital Markets Day as well that outstanding CapEx on the period can be divided by three. So one third offshore, one third the big DC corridor and one third on the AC components. There’s almost no maintenance included in that one as the grid is ready to renew. And of course, if there’s a replacement needed and that’s valid for Belgium as well, usually it’s exposed to extension as well.

And therefore, we are not replacing like for like. So usually, we have higher capacity after the construction. And the Belgium, the 3,000,000,000 is dedicated to the Princess Elizabeth Island in the plan and there are 6,000,000,000 outstanding, which are mainly to be spent in the huge backbone project, as we mentioned, Venti Luz and Bucadino. On the infrastructure front, I think that’s there are two separate streams. On one hand, we have good relationship and let Bernard to elaborate on that one with KFW, and we are both committed to support the future energy transition in Germany via 50 hertz.

And that’s something which has not necessarily to do with the plans of the government to install a fund. Whether the fund is being used to provide cheap funding for infrastructure or being used to absorb a little bit the burden of the consumer, as I said, that’s a little bit early to say. There are a lot of ideas now in this fear, and that’s something which we do see more clear in the next two months, in particular, months the government has been installed, which is still targeted to be there in place by Eastern, so quite soon. But then I think we will have a constructive debate in case there’s some of the money being dedicated to the TSO infrastructure, what we are going to do with that. Dana?

Bernard Houstin, CEO, Elia Group7: Maybe to complement on this one. From your question, I also understood a little bit that you were asking whether KWU could take another position within fifty years. It’s of course a separate question. One is the question of the money, where will it come from? The second question is of course a question of discussion between shareholders, which is today not on the table.

Bernard Houstin, CEO, Elia Group: Absolutely.

Bernard Houstin, CEO, Elia Group6: That’s clear. Thanks. And sorry, can I just add one follow-up to the first question on the CapEx split? Do you envisage in Germany that is that the sort of runway we should be envisaging as we leave the twenty fourth to twenty twenty eight period? Or is there a significant shift to that as we enter 2029 and 2030?

Thanks.

Marco Konigs, CFO, Elia Group: As we said, we are now in constructive discussion then how we are shaping a little bit the CapEx profile over the time and to create an industrial pipe on a supplier basis with a more constant load over time. As I said, we will remain on a growth path and the CapEx profile will be on a high level. To what degree this can be continuing as we have currently give visibility on that subject of the debate, but it will remain on a level that the rep is growing.

Bernard Houstin, CEO, Elia Group8: Thank

Bernard Houstin, CEO, Elia Group0: you, Harry, for your questions. Juan from Kepler. Please go ahead, Juan.

Bernard Houstin, CEO, Elia Group9: Good morning. Thank you for taking the questions. I have two on my side, if I may, mainly on results and guidance. The first one is on 2024 results. Can you please explain to us what end up being slightly better than you initially expected because the results end up even higher than the revised guidance that you provided at the Q3 mark.

So that will be the first one. The second one is on 2024 guidance. If you can give us more color on this $490,000,000 to $540,000,000 range at the net income level, What is the implied return on equity that you have both in Belgium and in Germany? And if you can give us as well a kind of ranges on the regions will be quite helpful as well as the GVs?

Marco Konigs, CFO, Elia Group: So the results ’24 compared to the latest guidance we have given, the latest guidance we put out was at million, and we lend up in the end by million. And that was driven by two main factors. On one hand three factors maybe to consider. On one hand, it was a better operational performance in Belgium as we achieved quite significant incentives there. Secondly, it’s, if you want to name it, a kind of one off as we conclude FX hedging, which gives us a credit of 7,000,000, 7 point 5 million, what was not foreseen in the guidance of $395,000,000.

And last but not least, optimization of commissioning in Germany turned out much more positive than we had envisaged in the guidance in the course of the COVID. On the outlook ’25, I want to ask you to allow me that we do not want to give a return rate at this stage as the funding is still outstanding. And of course, we want to do our homework before we are going to give you guidance on that one. However, we will give you a sharper picture in due time once the funding plans are more specific.

Bernard Houstin, CEO, Elia Group9: Okay. If I may follow-up in the past, in case of ranges that you expect for the different divisions, if not on return on equity than on

Bernard Houstin, CEO, Elia Group: Yes. On equity range.

Bernard Houstin, CEO, Elia Group0: Yeah. Indeed, Juan, so we gave at the Capital Markets Day that return on equity for Belgium would be over the regulatory period between 7% to 8% and for Germany over the entire regulatory period between 8% to 10%. So we will give a more detailed guidance once we have launched the rights issue.

Bernard Houstin, CEO, Elia Group9: Okay. Thanks. I’ll try

Bernard Houstin, CEO, Elia Group8: it. Thanks.

Bernard Houstin, CEO, Elia Group0: Yes. Thank you, Juan. Let’s now turn to Julius from Bank of America.

Bernard Houstin, CEO, Elia Group8: Great. Thank you for the presentation and for taking my question. I have two on CapEx broadly. The first one, I think you just mentioned that it was $2,000,000,000 in inflation that drove the uptick in CapEx from the last plan. Is that something that we have to expect going forward over the next years that there will always be an upgrade to CapEx?

And how much certainty or confidence do you have that the current funding plan that you presented today, will cover this inflation? And then, the second one is just a little bit of color on the the CapEx in Germany. I think there were some news articles on the the Bonhomme Energy Island and the Danish Energy Agency asking to rethink the project. Is that something that could affect the current plan or is that something that is outside of the scope? Thank you.

Bernard Houstin, CEO, Elia Group: Before you go into detail, I will maybe give a little bit of the high level view. Yes, you’re right. There is a 2,000,000,000 inflation in our CapEx estimate, but it’s also a clear objective to fix the current total CapEx picture at billion over the period and to really remain within that envelope. And I think it’s very important. So that means that we are looking at ways if there was to be further inflation to compensate by other measures.

We also see that some projects are a little bit on a slower path. As I said earlier, they are not being canceled, but they are sometimes slower, which also creates some clear room of maneuver. But it’s clearly our intention. I cannot, of course, predict what the inflation will be in the future. But if we are in an inflationary mood that is as we have known and so on a manageable basis to keep our total CapEx envelope as presented today at the same level over the period.

Of course, if there were to be new projects, that’s another dimension, but that’s another ballgame.

Marco Konigs, CFO, Elia Group: Pete, two additions on that one. The CapEx program, which we have updated, contains of a best estimate. So it’s not in prices as today only. There’s a best estimate, which includes some degree of inflation over the time already. We must admit that in the past, it was all the time above the estimation, what is something we are working on as well to have a better visibility, how it is evolving over the time.

But as Ben mentioned, we are targeting to maintain the bucket which we are working with. And connected to that, we are convinced that the funding and the funding sources available for the group are sufficient to cover that needs. On Bornholm, it’s a little bit similar situation as we are facing with Princess Elizabeth Island. We, on one hand, do see that the appetite in the offshore wind for the time being in that area is not as big as the Danish guys has been expected. What is a little bit the question how quickly this is being needed?

That’s one. The second is even though the prices on the components for that hybrid interconnectors are lower than we have seen recently. It’s fair to say that the cost connected to that one are higher than, in particular, the Danish calculation has been foreseen. And of course, there is one big item outstanding as wind farms and the Danish agency are in favor of letting the offshore wind farms benefiting from a German liability scheme as they are then potentially connected to the German grid via that interconnector, that’s something which needs to be put in place. And it’s not existing.

And without the government, it’s hard to imagine that it will be coming soon. And that’s a little bit the project is suffering from in terms of speed. However, all participants are working on that one. So supplier, Danish grid operator, we as well. And of course, government is still supportive on both side even though they have a firmer look on the cost benefits connected to that.

Bernard Houstin, CEO, Elia Group8: Could I maybe follow-up and ask how much of the German CapEx plan is from this Bornholm Energy Island? It’s also some rough indication.

Marco Konigs, CFO, Elia Group: Yes, it’s roughly SEK 1,000,000,000, which is connected to that in the five years plan.

Bernard Houstin, CEO, Elia Group0: Thank you, Julius. Let’s now go to Piotr from Citi. Piotr, go ahead please.

Presenter, Elia Group0: Hi, good morning everybody. I have two questions please. So the first one is on the funding in the future. So once you close this $2,200,000,000 capital increase now, when do you think will be the next tranche? Is it 2728?

Can you roughly say what’s the timeframe? And how much you really have a hybrid capacity in your balance sheet? How much you assume in the plan? So that’s the first question on the funding. And then the second question I have on the possible impact of this new regulatory framework where supposedly in Germany we could move to the WACC.

I was quite surprised when you provided your sensitivity to the rates environment because I would have thought all of the RAP assuming we go to the one RAP concept will be properly sensitive and then we could revise all of the WACC to a 2.7% or 2.9% risk to rate. And therefore, there’s a proper uptick in your results from this higher interest rates. So can you please really like share your expectations how the system on the one wrap, one work could be revised and what could be the regulators approach towards setting that is great? Is still going to be ten year averaging effect or maybe a shorter duration and so on? Thank you.

Marco Konigs, CFO, Elia Group: Maybe I’ll let then Catherine to comment to funding. Thank you.

Bernard Houstin, CEO, Elia Group7: Then he will comment on the funding indeed. So looking forward and so after the transaction that we are going to do this year, I think we are very comfortable with the options that have been presented by Bernard at the beginning of the session. First option was indeed relating to hybrids and then coming directly to your question, the hybrid capacity in itself post transaction is

Frederic Dunant, CEO, Elia Transmission Belgium, Elia Group: 3,800,000,000.0,

Bernard Houstin, CEO, Elia Group7: leading to equity credit of 1,900,000,000.0, like mentioned by Bernard during the presentation. And of course, it will grow over time. So this amount is this amount post transaction, but towards 2028, it will still grow. That’s one element. And additionally, of course, we have the possibility to open up the capital at the level of the operational affiliate.

We are also confident at that level because we have already today and for some years some interest coming from strong parties. And so that combined with also the very strong international partners that we have attracted to this private placement international

Moderator/Host, Elia Group: with

Bernard Houstin, CEO, Elia Group7: a combination of infrastructure fund and sovereign wealth fund. We really believe that we have good partners and we are fully funded leading up 2028.

Marco Konigs, CFO, Elia Group: And maybe on the WACC question, the sensitivity I mentioned is eligible for the current regulatory framework. The VAC model is something which is potentially to be introduced beyond the horizon, so from 2029 onwards. And of course, there will be a higher sensitivity connected to that. However, it’s really early to say as the components on that one are not disclosed. So that’s a broad range of option which might be embedded there.

The only clarity is in regards of the gearing that’s we’ll maintain a forty-sixty gearing. But how the equity remuneration will be calculated, how the debt will be embedded there. That’s a subject of the dialogue, which the BNSR has been recently launched, and that will be subject of the discussion then in April.

Presenter, Elia Group0: Okay. Thank you very much.

Bernard Houstin, CEO, Elia Group0: Thank you, Pieter. Now let’s turn to Oli from Deutsche Bank. Oli, please go ahead.

Presenter, Elia Group1: Thanks very much. Good morning. And two questions for me, please. So first of all, just on this kind of broader equity toolkit that you speak about, obviously, you currently have 100% ownership in your Belgium network and 80% in Germany. With Germany before, you said you wanted to maintain a relevant shareholding.

So my question on the networks would be, what would be the minimum shareholding you’d want to keep in each network? And then with this broader equity toolkit you have in mind, do you think that the this additional method of hybrid and potentially shutting down of asset rotation, could that meet any extra need if required in 2029? And then if I may, just on the CMD plan, just to clarify something you said earlier, where you had return on equity of seven to eight for Belgium and eight to 10 for Germany. Have you said those ranges are still okay, but you will pick a more precise number and the EPS target of double digit? I know that this would depend on the number of shares you have, but you you still broadly comfortable where you see a reasonable potential discount or not coming in for this, for this next step.

You still reasonably comfortable with that, the guidance for the double digit from 24 to 28 in EPS?

Bernard Houstin, CEO, Elia Group: I’ll maybe elaborate on the first question and let the colleagues elaborate on the next one. I think the key message here is that we really have developed this toolkit that gives us options and possibilities. But it’s clear that as we do in Germany, our objective is to keep the control and the operational control on our operating entities. I think we see, as Catherine said, that there might be some interest in some of our assets because we have a really strong and with also a growth perspective assets. But the objective is clearly to find partners that allow us to keep the operational control on these entities as it’s happening now in Germany.

So there is no real, I would say, target or amounts that is set next to that. But really, the objective is to keep that control. And as you can see, we really believe that we have all these options. And you can see that I’m rather satisfied because when I see today where we are, we have a toolkit with this type of tool, but we have also other tools as it was elaborated on the possibilities to go to hybrid, but also we integrate in our shareholding three blue chip top notch investors that will also help us think about future developments and can also help us in the future financing of our company.

Marco Konigs, CFO, Elia Group: So maybe on the DPS and the return rates. As the results in 2024 have shown quite remarkable performance of the company, we do feel comfortable that both profitability and cash generation are sufficient to maintain our DPS guidance, which we have given. So that is something we are still striving for to fulfill over the time. That’s been said, of course, with an eye on the future regulation, it needs to be elaborated to find a quite good balance again. And you cannot prolong the current situation then to ’29 as, of course, as we’ve discussed in Germany, there will be a new framework being put in place.

And as I said, it’s a little bit too early to judge what the outcome of that will be. But for the horizon, which we have given the visibility in the course of the Capital Markets Day, we do feel ourselves quite well equipped and confident that the guidance is still in line with that what we are going to achieve.

Bernard Houstin, CEO, Elia Group7: And maybe let me build on what you said. I think 2029, you start really looking at and that’s in particular a moment where we don’t know yet what will be the regulations neither in Belgium nor in Germany. And second, we still have to discuss with authorities on the precise investments that we need to do. So very, very, very difficult to comment on ’29 period. On the guidance, first, what we said is that for return on equity, you can look at the CMD figures that we published.

We intend to come with a more precise guidance, especially on net profit at the moment of the next step of the transaction. On EPS, we are confident like you are saying, we know that depending on discounts on operation, it can have an impact. But based on the business plan we have, we are confident on our ability to deliver a double digit EPS over the period. Double digit EPS growth over the period.

Presenter, Elia Group1: Thanks for clarifying at the end. That’s helpful.

Bernard Houstin, CEO, Elia Group0: Okay. Perfect. Then we have still, Tess from Abi en Amro. Tess, please go ahead.

Bernard Houstin, CEO, Elia Group7: We don’t hear you.

Bernard Houstin, CEO, Elia Group: We don’t hear you, Tess.

Bernard Houstin, CEO, Elia Group0: Tess, I think you’re on mute.

Bernard Houstin, CEO, Elia Group: You seem to say Can

Bernard Houstin, CEO, Elia Group0: you try again, Tess?

Presenter, Elia Group2: Tejas? In mute. So,

Bernard Houstin, CEO, Elia Group0: now we can hear you.

Presenter, Elia Group2: So first, I want to thank Katharine van de Boer for a perfect delivery on 2024 earnings. And I truly hope that you will have a bright next step in your career, Katharine.

Bernard Houstin, CEO, Elia Group7: Thanks a lot.

Presenter, Elia Group2: Then, yes. Then, first question is, I’m afraid again coming back on the toolkit. Do I understand you are open to potentially selling an additional stake in 50 hertz to KfW? Or would this potentially also imply that KFW simply will take up a higher percentage on the new equity raises within 50 hertz? That’s first question.

And the second question is on the outlook for 2025, but then more specifically, what is included in non regulated and Nemo link in terms of assumptions. Is included that you will again make startup losses in The U. S. And or take impairments? Or is that not included?

And on NemoLink, well, what is your assumption there for ’25?

Bernard Houstin, CEO, Elia Group: Well, I think on the first question, and I will let certainly the team compliment. What I said is that we have a model in Germany that works because we have a partner with KFW. And by the way, we see that the balance is a healthy one. Happily, we also said that ELLIA is becoming more and more a multinational group, and we have other assets as well. So that means that I wouldn’t especially focus on FMCX on the short term, but there are also other opportunities.

And then we would have to see on the discussion. But as Catherine said, today, at least in Germany, there is no discussion on the table on that topic. And what we just see is that, well, first, and sorry to repeat myself, we see that with the other tools in the toolkits, we already have some means that almost allows to cover all the remaining needs over the period. But also that with the experience we have in Germany, looking at maybe Germany, but also other geographies, it’s a model that we can replicate where we basically keep the operational and the financial control, but bringing partners that like the assets and can also bring some added value. I think that’s where we are.

And of course, if we do the math on these entities, we see that it would allow us, as we said in the introduction, to develop means that certainly cover the future needs and either a little bit more.

Marco Konigs, CFO, Elia Group: Yes. And to comment on the third segment, as we have provide you a split on the segments yet, I will not do for the third neither. But as a rule of thumb, we are quite confident that based on the availability of the interconnector, which we have seen in the past, we will come again more at the upper end of the revenue cap in 2025 as well. On the impairment question, the answer is no. If you would envisage an impairment, we should do so already.

So there’s no intention to impair the assets as we believe in the value of the development of these projects, knowing that, of course, there might be some shifts, in particular, on offshore projects. But, of course, that’s something we are used to.

Bernard Houstin, CEO, Elia Group7: And then maybe to finish, thank you very much for your nice work. It’s very much appreciated.

Bernard Houstin, CEO, Elia Group0: Thank you very much for all the questions. And also thank you, Catherine, Verna, and Marco for all your answers given. This gets us to the end of the Q and A session. So I will hand it back to the studio and to wrap up and to close today’s call.

Moderator/Host, Elia Group: Thank you, Stephanie. Indeed, if there are no further questions, let’s wrap up this presentation. And I can assure you that a great deal of hard work has been done in the past few weeks and even in the past few days and hours. So a big, big thank you to all the teams that contributed to this. Thank you, Bernhard and Marco.

Thank you, Catherine and also Janik, who is here behind the scenes. And thank you, also, Stephanie, for joining us in this live session. And of course, a special thank you to the entire technical team here in the studio for making this possible. Have a nice day, and see you soon.

Bernard Houstin, CEO, Elia Group: Thank you.

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