Financial Headlines

2004 was another year of change for EDF Energy as further savings were delivered from the integration plan that was formalised after the acquisition of SEEBOARD in July 2002. At the end of 2004, annualised synergy savings of £148 million had been delivered from the integration plan, compared to £73 million delivered by the end of 2003. This is ahead of where savings were projected to be at the start of the year by more than £20 million.

The table below summarises the results for the year compared to 2003:

 *EDF Energy Group Holdings plc + EDF UK

Turnover increased by £444 million, from £3,606 million in 2003 to £4,050 million in 2004. Of this increase, approximately £200 million relates to an increase in the price of gas and electricity passed on to large commercial customers under new contracts or to residential and small business customers through increases in tariff. Approximately £160 million relates to an increase in volumes sold, predominantly to major business customers, and the remaining £84 million of turnover growth is largely explained by an increase in work under the 30-year contracts with London Underground to upgrade and maintain approximately two-thirds of the London Underground network, as well as all of the Underground’s high voltage electricity network.

Group profit on ordinary activities before tax remained relatively flat at £456m (£442 in 2003) despite significant increases in the cost of energy during the year.

Refinancing

The major refinancing programme for the EDF Energy group was completed in 2004. Following £1.6 billion of debt that was refinanced in 2003, a further £700 million was refinanced in 2004.

The objectives of the refinancing programme have been to reduce the dependency on short-term bank finance, lengthen the average maturity of the debt portfolio and to improve the terms of borrowing. These objectives were achieved by accessing the bond market and by signing a five-year agreement for the securitisation of consumer receivables:

EDF Energy Networks (EPN) plc

• £350 million 5.75% bond maturing 2024

EDF Energy plc, London Energy plc and Seeboard Energy Limited and Seeboard Energy Gas Limited

• £350m receivables securitisation agreement

As a result of these refinancings, the weighted average maturity of debt increased from 10.3 years to 11.4 years. The proportion of fixed rate debt remained at two thirds and the weighted average interest rate on debt fell from 6.8% to 6.4%.