Elia Group 2020 half-year financial report

Brussels, 29 July 2020

Content

1.	Business performance review. 3
1.1.	Segment reporting Elia Transmission (Belgium) 4
1.2.	Segment reporting 50Hertz (Germany) 8
1.3.	Segment reporting non-regulated activities & Nemo Link 11
2.	Statement on the true and fair view of the condensed consolidated interim financial statements and the fair overview of the interim management report 13

3.	Condensed consolidated interim financial statements 14
4.	Notes to the condensed consolidated interim financial statements 19
5.	The report of the joint statutory auditors and their review of the condensed consolidated interim
	financial information 32
6.	Glossary 33

1. Business performance review

Key figures – Elia Group

(in € million)	1H 2020	1H 2019	Difference (%)
Revenue, other income and net income (expenses) from settlement mechanism	1,176.3	1,159.5	1.4%
Equity accounted investees	2.9	4.8	(39.6%)
EBITDA	493.2	458.3	7.6%
EBIT	281.1	281.6	(0.2%)
Net finance costs	(69.5)	(68.0)	2.2%
Net profit	148.6	152.1	(2.3%)
Non-controlling interests	18.9	16.4	n.r.
Net profit attributable to the Group	129.7	135.7	(4.4%)
Hybrid securities	9.6	9.6	n.r.
Net profit attributable to owners of ordinary shares	120.1	126.2	(4.8%)
Total assets	14,980.0	13,893.4	7.8%
Equity attributable to the owners of the company	4,032.9	4,022.3	0.3%
Net financial debt	6.429,1	5,523.1	16.4%
Key figures per share	1H 2020	1H 2019	Difference (%)
Reported earnings per share (EUR) (Elia share)	1.76	2.05	(14.1%)
Return on Equity (adj.) (%) (Elia share)	1.75	1.87	(6.4%)
Equity attributable to owners of the company per share (EUR)	48.4	46.3	4.5%

See the glossary for the definitions

Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2019

Pursuant to IFRS 8, the Group identified the following operating segments:

Elia Transmission (Belgium), which comprises the regulated activities in Belgium (i.e. the regulated activities of Elia Transmission Belgium);
50Hertz Transmission (Germany), which comprises the regulated activities in Germany;
Non-regulated segment & Nemo Link, which comprises non-regulated activities within Elia Group, Nemo Link, Elia Grid International, Eurogrid International, Re.alto and the financing cost linked to the 20% acquisition of Eurogrid GmbH in 2018.

The performance of each segment is described in the following chapter.

We also refer to https://www.eliagroup.eu/en/investor-relations/reports-and-results for further information

1.1. Segment reporting Elia Transmission (Belgium)

Highlights

Start of new regulatory period 2020-2023
Higher fair remuneration driven by a higher equity return (4.68%) and gearing ratio (40%)
Solid operational performance and higher incentives
The development of the national grid continues during coronavirus pandemic, with progress made on all major investment projects but behind the initial plan due to lockdown measures
Improved liquidity position with the successful launch of an €800 million Eurobond

Regulatory framework

Since the beginning of 2020, a new tariff methodology came into force. This methodology is again applicable for a period of four years (2020-2023) and represents to a large extent a continuation of the main principles already applied under the previous tariff period. The regulatory framework remains a cost-plus model, with cost coverage of all reasonable costs and remuneration. The fair remuneration and additional incentives substituted the investment mark-up. The parameters for the computation of the fair remuneration were revised: the risk-free rate will be fixed ex-ante at 2.4% for the entire period and the regulatory gearing increases from 33% to 40%. The embedded debt principle for financial charges and volume neutrality remain applicable. The remuneration includes specific incentives, intended to incentivise Elia to further enhance the performance regarding a wide range of regulated activities in Belgium. Working capital elements (trade payables and receivables) linked to the levies will be excluded from the RAB from 2020 onwards, leading to a marginal one-off adjustment on the opening RAB. As from 2020, intangible assets are capitalised in the RAB, with depreciation charges passed through into revenues.

Key results

Elia Transmission key figures (in € million)	1H2020	1H 2019	Difference (%)
Revenue, other income and net income (expense) from settlement mechanism	471.1	499.0	(5.6%)
Revenue	419.1	460.3	(9.0%)
Other income	27.4	25.7	6.7%
Net Income (expense) from settlement mechanism	24.6	13.0	89.2%
Equity accounted investees	1.1	1.0	10.0%
EBITDA	211.2	209.8	0.7%
EBIT	118.7	133.9	(11.4%)
Net finance costs	(34.2)	(36.7)	(6.8%)
Income tax expenses	(23.0)	(32.2)	(28.6%)
Net profit	61.5	65.0	(5.4%)
Total assets	6,894.5	6,452.1	6.9%
Total equity	2,168.0	2,157.5	0.5%
Net financial debt	3,123.9	3,013.4	3.7%
Free cash flow	(95.0)	(444.9)	(78.6%)

See the glossary for the definitions

Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2019

Financials

Elia Transmission's revenue fell by 5.6% compared with the same period of the previous year, from €499.0 million to €471.1 million. Revenues were impacted by lower financial costs driven in 2019 by the capital increase and lower costs for ancillary services and were partially offset by a higher regulated net profit, which are all passed through into revenue.

Detailed revenue and other income (in € million)	1H2020	1H2019	Difference (%)
Grid revenue:	415.7	456.0	(8.9%)
Grid connection	23.1	22.2	4.5%
Management and development of grid infrastructure	241.7	240.3	0.6%
Management of the electrical system	64.4	56.7	13.7%
Compensation for imbalances	59.1	101.7	(41.9%)
Market integration	10.8	12.7	(15.1%)
International revenue	16.6	22.5	(26.3%)
Transfer of assets from customers	1.4	1.2	14.5%
Other revenue	2.1	3.0	(31.0%)
Subtotal revenue	419.1	460.3	(8.9%)
Other income	27.4	25.7	6.7%
Net income (expense) from settlement mechanism	24.6	13.0	89.0%
Total revenue and other income	471.1	499.0	(5.6%)

Grid connection revenues increased from €22.2 million to €23.1 million (up 4.5%) mainly due to the tariffs increase.

Revenues from management and development of grid infrastructure remained stable at €241.7 million compared to €240.3 million mainly due to a tariff increase of the yearly peak tariff compensated by a decrease of the monthly peak tariff and monthly peak volume due to the Covid-19 lockdown.

Revenues from management of the electrical system increased from €56.7 million to €64.4 million (up 13.7 %) due to a tariff increase, the increase of the additional reactive offtake energy and the introduction of the tariff for injection of additional reactive energy.

Services rendered with regard to energy management and individual balancing of balancing groups are paid within the revenues from compensation for imbalances. These revenues decreased from €101.7 million to €59.1 million (down 41.9 %), largely due to the tariff decrease for management of power reserves and black-start based on offtake (down €30.1 million) and injection (down €11.0 million). The revenues from compensation of imbalances decreased by €1.5 million due to low imbalance situations and no exceptional imbalance days in 2020 compared to 2019.

Finally, the last section of the tariff revenues encompasses the services Elia Transmission Belgium provides within the context of market integration, which decreased from €12.7 million to €10.8 million (down 15.1 %) due to a tariff decrease and an energy volume offtake decrease due to Covid-19 lockdown.

International revenue decreased from €22.5 million to €16.6 million (down 26.3%), mainly due to lower congestion income (long term and day-ahead income) during a softer winter period and less offtake due to Covid-19 measures in 2020 with high injection power availability in winter leading to less power exchange with the CWE region. The absence of high price differences with neighbouring countries in 2020 enforced this decrease.

Transfer of assets from customers increased slightly compared to prior year while other revenue dropped by €0.9 million.

The temporary reduction in electricity consumption Belgium related to Covid-19 has no impact on the profitability of the Elia Group as the impact of volume variations is neutralised under the Belgian regulatory framework.

The settlement mechanism (€24.6 million) encompasses both deviations in the current year from the budget approved by the regulator (up €4.9 million) and the settlement of net surpluses from prior tariff period (down €29.6 million). The operating surplus, in relation to the budget of the costs and revenues authorised by the regulator, must be returned to consumers and therefore does not form part of the revenues. The operational surplus compared to the budget is primarily a result of decreased depreciations (€8.4 million) and lower costs for ancillary services (€14.3 million). This was partly offset by lower tariff sales (€ 6.9 million), higher financial costs (€6.9 million) and higher taxes (€ 3.7 million) compared to the budget.

EBITDA rose slightly i to €211.2 million (up 0.7%) due to a higher regulated net profit and higher depreciations linked to the growing asset base and offset by lower financial costs that are all passed through into revenues. The decrease in EBIT (down 11.4%) is driven by the depreciations of intangible assets (up €4.9 million) acquired in the past and activated under IFRS while directly expensed and covered through the tariffs under the previous regulatory period. Under the new tariff methodology, intangible assets are also activated in the regulated asset base. The contribution of equity-accounted investments (HGRT, Ampacimon and Coreso) rose slightly to €1.1 million.

Net finance cost fell by €2.5 million (down 6.8%) compared to the same period of previous year, and mainly driven by the pre-refinancing of a €500 million bond early 2019 and maturing in May 2019 and the lower activation of borrowing costs since the commissioning of the Modular Offshore Grid and ALEGrO in the second half of 2019. This was partially offset by costs for unwinding of an interest rate swap (down €4.5 million) linked to a shareholder loan repaid early June. In April, Elia tapped the debt capital market with a €800 million Eurobond for the financing of its investment progamme and to refinance a €496 million shareholder loan. The new issuance reduces the average cost of debt significantly to consumer' benefit from 2.16 % end of 2019 vs 1.95% end of June 2020. Elia Transmission has a well-balanced debt maturity profile with no upcoming near term material maturities.

Net profit fell by 5.4% to €61.5 million, mainly due to the following factors:

Higher fair remuneration (up €28.7 million) due to the higher return on equity (fixed risk free rate of 2.4% compared to an average OLO of 0.76% in 2019), a higher gearing ratio (40% compared to 33%) and the full remuneration of last year's capital increase (€327 million);
Termination of the mark-up compensation (down €24.5 million)
Higher incentives (up €0.4 million)
Depreciation of software acquired prior to 2020 (down €7.0 million) and activated under IFRS while fully expensed and covered under the previous regulatory methodology. As from 2020, intangible assets are also capitalised in the RAB, with depreciation charges passed through into revenues;
One-off tariff compensation recognised in 2019 for the financial costs linked to the capital increase accounted through equity under IFRS (down €6.3 million)
Lower IAS 19 and tax provisions (up €2.2 million)
Other (up €3.0 million) Due to higher deferred taxes (up €3.4 million) and lower bad debt provisions (up €1.1 million) offsetting a negative contribution from Elia RE (down €2.1 million) due to slightly higher damages to the electric system

Total assets rose by €442.6 million to €6,894.5 million, mainly due to the investment programme and a higher liquidity. Net financial debt increased by €110.5 million (up 3.7%), as Elia's capex programme was mainly financed by cash flows from operating activities and the bond issuance. In 2020 Elia reimbursed the RCF drawn at the end of 2019 (€75 million). A new commercial paper programme was put in place for an amount of €300 million at the end of May, fully undrawn.

Equity increased slightly (up €10.5 million) mainly as a result of the half year profit (€61.5 million) minus the effect of the dividend paid over the 2019 financial year (€18.9 million) and the allocation of equity towards Nemo Link to align the financing in accordance with the regulatory framework (40% equity/ 60% debt).

Operational

Total load estimation decreased by 6.6% from 43.0 TWh in 2019 to 40.1 TWh in 2020. This decrease is mainly due to the Covid-19 measures in place since March 2020, the on average higher temperatures and higher decentralized production in 2020 compared to 2019 impacting the Distribution Grid Operators' offtake. As a consequence, the net offtake from the Elia network decreased by 9.0% from 32.1 TWh in 2019 to 29.3 TWh in 2020.

Net injection on Elia Transmission Belgium's network slightly decreased from 30.5 TWh in 2019 to 30.1 TWh in 2020, mainly due to a lower nuclear availability in 2020 partially compensated by gas-fired and renewable production. In the first half of 2020, Belgium was on average a net exporter due to the lower offtake and an almost stable injection. Net imports decreased from 2.0 TWh in 2019 to -0.4 TWh in 2020. Total exports slightly increased from 6 TWh in 2019 to 6.7 in 2020, whereas energy imports decreased by 22% from to 8.0 TWh to 6.3 TWh.

Total electricity flows between Belgium and its neighbouring countries decreased from 14.1 TWh to 13.0 TWh mainly as a result of the decrease in net imports from the Netherlands and France.

Investments

In the first half of 2020, Elia invested €134.7¹ million in Belgium, mainly intended to integrate increasing volumes of variable renewable electricity. The necessary investments are made to reinforce the existing corridors to absorb the higher infeed of renewable energy combined with upgrading the existing grid.

Over the first half of 2020, investments were linked to Brabo phase 2 project and the connection of the last two offshore wind farms, Mermaid & Seastar, to the MOG platform, which marks the completion of the investment programme. Furthermore, Elia continued working on reinforcing the existing Belgian 380kV backbone: on the Horta-Avelgem axis, reinforcement works of towers and foundations were finalized. The next steps will involve the replacement of the existing conductors.

¹ Including the capitalization of software and IAS 23 (Borrowing costs), IFRS 15 (Revenue recognition – Transfer of assets from customers) and IFRS 16 (Leasing), the total is € 152.5 million.

1.2. Segment reporting 50Hertz (Germany)

Highlights

Investments on track despite Covid-19 pandemic
Growing half year result demonstrates business growth
Successful issuance of a €750 million Green Bond

Key results

50Hertz Transmission key figures (in € million)	1H 2020	1H 2019	Difference (%)
Revenue, other income and net income (expense) from settlement mechanism	697.2	664.7	4.9%
Revenue	644.3	629.9	2.3%
Other income	38.2	34.9	9.5%
Net income (expense) from settlement mechanism	14.7	(0.1)	n.r.
EBITDA	282.8	249.8	13.2%
EBIT	163.5	149.3	9.5%
Net finance costs	(27.3)	(30.2)	(9.6%)
Income tax expenses	(41.7)	(36.8)	13.3%
Net profit	94.5	82.3	14.8%
Of which attributable to Elia Group	75.6	65.8	14.9%
Total assets	6,915.6	6,279.6	10.1%
Total equity	1,535.9	1,546.5	(0.7%)
Net financial debt	2,917.8	2,108.1	38.4%
Free cash flow	(680.4)	(656.8)	3.6%

Income, expenses, assets and liabilities are reported in the table at 100%.

See the glossary for the definitions

Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2019

Financial

50Hertz Transmission's total revenues and other income rose compared to the first half of last year (up 4.9%). Total revenues are detailed in the table below.

Total revenue (in € million)	1H 2020	1H 2019	Difference (%)
Grid revenues	529.1	548.1	(3.5%)
Revenues from incentive regulation	374.1	382.3	(2.1%)
Revenues from offshore surcharge	155.0	165.8	(6.5%)
Energy revenues	112.4	81.1	38.5%
Other revenues (incl. transfer of assets from customers)	2.8	0.7	300.0%
Subtotal revenues	644.3	629.9	2.3%
Other income	38.2	34.9	9.5%
Net income (expense) from settlement mechanism	14.7	(0.1)	n.r.
Total revenue and other income	697.2	664.7	4.9%

Revenues from incentive regulation mainly consist of grid tariffs and are driven primarily by the regulatory remuneration for onshore activities (revenue cap).

The revenues from incentive regulation decreased by €8.2 million as the ongoing business growth from onshore investments (up €19.9 million) was eroded by lower volume effects compared to the first half of 2019 (down €28.8 million). The reimbursement for pass-through energy costs and other items is mostly in line with the previous year.

Revenues from offshore surcharge include all revenues derived from the offshore grid surcharge. This includes remuneration for 50Hertz's own costs, imputed remuneration related to the connection of offshore wind farms and offshore costs charged to 50Hertz by third parties, e.g. other TSOs.

Revenues from offshore surcharge fell (down €10.8 million) compared to the first half of 2019. The remuneration of 50Hertz's own offshore grid connection costs increased (up €15.0 million), driven by the ongoing offshore investments and the full commissioning of Ostwind 1 end of 2019. Pass-through of third party costs fell compared to the same period last year (down €25.8 million).

Energy revenues include all operating revenues relating to system operation, which are usually linked to corresponding ancillary service costs charged on to third parties, such as redispatch measures, reserve power plants and balancing groups, but also include revenues generated from auctioning interconnector capacity.

Energy revenues rose by €31.3 million compared to the first half of 2019, mainly caused by higher costs for reserve power plants charged on to other TSOs (up €37.0 million). Furthermore, revenues from balancing groups (up €6.7 million) and congestion income (up €5.9 million) increased, partly offset by lower charges to other TSOs for redispatch measures (down €17.8 million).

Overall, the temporary reduction in electricity consumption Germany related to Covid-19 has no impact on the profitability of the Elia Group as the impact of volume variations is neutralised under the German regulatory framework.

Other revenues (including amortisation of transfer of assets from customers) increased compared to the first half of 2019 (up €2.1 million), mainly due to higher revenues generated from the European Inter-TSO Compensation mechanism.

Other income rose (up €3.3 million) as result of higher own work capitalised following the increase in personnel costs.

The net regulatory income (expense) from settlement mechanism comprises both the annual offsetting of deficits and surpluses accounted for prior to 2020 (+€61.1 million) and the net surplus generated in the first half of 2020 between the costs allowed to be passed on in the tariffs and the actual costs (-€46.4 million).

EBITDA rose by €33.0 million (up 13.2%). Driven by the ongoing investment programme and growing asset base the investment remuneration totals to €141.3 million (up €27.4 million). Onshore contributed for €36.5 million (up €10.7 million), while the offshore remuneration amounted to €104.8 million (up €16.7 million), primarily due to the commissioning of the last Ostwind 1 cable and platform in December 2019. Furthermore, due to inflation adjustments the base year revenues rose (up €1.7 million). Compared to the first half of 2019, the operating expenses slightly increased. Personnel costs increased following continuous business growth (down €8.6 million), but are mostly offset by own work capitalized revenues rising as well (up €2.6 million) and a regulatory reimbursement of personnel costs relating to 2018 (up €4.6 million). IT and telecommunication cost rose to our continuous efforts to become a digital TSO and expansion of the business (down €4.5 million). Finally, EBITDA was also affected by the release of a provision related to acceptance of historic costs by the regulator (up €8.9 million).

There was a less marked increase in EBIT (up €14.2 million) due to higher depreciations (down €18.3 million), following the commissioning of the last cables and platform of Ostwind 1 in 2019. No adjusted items were recognised in 2020.

The net profit rose by 14.8% to €94.5 million as a result of:

Higher offshore remuneration (up €11.8 million) driven by realisation of offshore investments and commissioning of the last cables and platform of Ostwind 1 end 2019
Higher onshore investment remuneration (up €7.5 million) following the execution of the onshore investment plan;
The release of a provision following acceptance of costs by regulator (up €6.3 million)
Higher financial result (up €2.0 million) mainly from lower interest expense on provisions and higher capitalised borrowing costs
Higher base year revenues due to inflation adjustments (up €1.2 million)
Higher onshore Opex (down €5.9 million)
Increased depreciation (down €12.9 million) following the commissioning of Ostwind 1

Total assets were €636.0 million down on the year-end total for 2019, mainly due to a drop in EEG's cash (down €655.8 million). The high EEG cash out also affected the free cash flow in the first half of 2020 which totalled -€680.4 million.

An additional Revolving Credit Facility of €400 million was contracted to finance the EEG payments.

Furthermore, to finance the offshore grid connections Ostwind 1 and 2, a €750 million Green Bond with a term of 12 years and a fixed interest rate of 1.1% was successfully issued in May. Net financial debt rose by €809.7 million mainly due to the financing of the ongoing investment programme and the high EEG cash-out. The EEG cash per June was in deficit totalling to -€225.3 million. Any deficits from the EEG mechanism are temporary and are going to be settled with the surcharge revenues of the following year.

Operational

A net volume of 21.9 TWh was drawn off from the 50Hertz grid, 4.4% less than last year (22.9 TWh). In the first half of 2020, 50Hertz was again a net exporter of electricity, with net exports of 17.4 TWh (25.9 TWh in first half 2019). 11.5 TWh of electricity were imported and 28.9 TWh exported (6.8 TWh and 32.7 TWh in first half 2019). As of June 2020 the peak load was 7.9 GW (8.7 GW as of June 2019).

Investments

To meet grid users' requirements, 50Hertz Transmission invested €191.3 million in the first half of 2020, 67.7% more than in the first half of the previous year (€114.1 million).

In total, €139.9 million was invested in onshore projects, while offshore investments amounted to €51.4 million. The most significant onshore investments involved the DC line for the SouthOstLink (€17.1 million), the upgrading of high voltage pylons to boost operational safety (€14.5 million), the 380 kV Cable in Berlin (€13.9 million) and the construction of the overhead line between Wolmirstedt and Güstrow (€13.5 million). Offshore investments mainly revolved around the Ostwind 2 offshore grid connection (€39.6 million).

1.3. Segment reporting non-regulated activities & Nemo Link

Highlights

Strong operational performance for the first half of 2020 for Nemo Link interconnector, though the contribution to the Group's result was affected by a one-off preferred dividend to National Grid
Higher holding costs as tax on hybrid and senior bond are not deductible given the absence of taxable profit

Key results

Non-regulated activities and Nemo Link key figures (in € million)	1H 2020	1H 2019	Difference (%)
Total revenue and other income	15.4	4.2	266.7%
Equity accounted investees	1.8	3.8	(52.6%)
EBITDA	(0.8)	(1.3)	(38.5%)
EBIT	(1.0)	(1.5)	(33.3%)
Net finance cost	(8.0)	(1.0)	700.0%
Income tax expenses	1.6	7.5	n.r.
Net profit	(7.4)	4.9	(251.0%)
Of which attributable to Elia Group	(7.4)	5.0	(248.0%)
Total assets	1,729.4	1,733.5	(0.2%)
Total equity	1,216.1	1,207.5	0.7%
Net financial debt	387.5	401.6	(3.5%)

See the glossary for the definitions

Comparative figures for Total assets, Equity and Net financial debt as at 31/12/2019

Non-regulated revenue increased compared to the same period last year as a result of higher revenues generated by EGI (up €4.5 million) driven by owner engineering services while the international consulting business was affected by the Covid-19 lockdown measures and intersegment transactions between Elia Group SA and Elia Transmission Belgium at the moment of the push down of the regulated activities to ETB at year end 2019. The effect of these intersegment transactions is disclosed in note 2.2. Segment reconciliation.

As an equity-accounted investment, the contribution of Nemo Link over the first half of 2020 was €1.8 million. Nemo Link delivered strong operational performance over the first half of 2020, with a very high overall availability of 99.86%, leading to a net profit of €12.7 million. However, the net contribution to the Elia Group was impacted by a oneoff preferred dividend paid to National Grid (€9.1 million). In the past Elia and National Grid provided project services to Nemo Link. These services were reimbursed in 2019 by Nemo Link to Elia and pass-through to the tariffs, while Nation Grid opted for a one-off preferred dividend. From an operational view, Nemo Link has not been directly affected by the Corona-crisis but by its impact on the reduced UK - Belgium electricity consumption while production was affected by the high intake of renewables (wind and solar) on the Belgian grid which led to many hours of negative electricity prices during weekend and bank holidays. All in all, this resulted in higher price spreads between UK and Belgium between mid-March and the end of May and a narrowing of the spread in June following a gradual recovery in power demand, lower wind output and outages at Belgian and French nuclear reactors drove up Belgian power prices.

EBIT fell by €0.5 million. The decrease in EBIT compared to last year is mainly due to the lower contribution from Nemo Link (down € 2.0 million), operating costs linked to the holding activity (down €1.0 million) and Re.alto (down €0.9 million) partially offset a by higher operational result for EGI (up €0.4 million) and lower other non-regulated costs (up €0.8 million).

Net finance cost rose to €8.0 million and primarily comprises the interest cost linked to the senior bond (€2.3 million), regulatory settlements for 2019 (€3.3 million) and the cost linked to Nemo Link private placement. Prior year financial result benefited from interest income on cash advances to Nemo Link during the construction phase (€3.2 million), which were reimbursed end of June 2019. Nemo Link is financed according to the regulatory framework (40% equity /60% debt).

Net loss fell to €7.4 million, mainly as result of :

Higher holding cost (down €5.5 million) as tax on hybrid and senior bond are not deductible given the absence of taxable profit combined with operating costs linked to the holding
Lower contribution from Nemo Link (down €2.0 million)
Regulatory settlements for 2019 (down €2.7 million)
re.alto (down €0.9 million), due to operating expenses since incorporation in August 2019
Other items (down €1.2 million) represent the funding cost for Nemo Link, slightly better performance by EGI and lower non-regulated costs

Total assets remained stable (down 0.2%) at €1,729.4 million and net financial debt dropped slightly by €14.1 million.

2. Statement on the true and fair view of the condensed consolidated interim financial statements and the fair overview of the interim management report

The undersigned Chairman of the Management Committee and Chief Executive Officer Chris Peeters and Chief Financial Officer Catherine Vandenborre declare that to the best of their knowledge:

a) the condensed consolidated interim financial statements, which have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union, give a true and fair view of the equity, financial position and financial performance of the company, and the entities included in the consolidation as a whole,

b) the interim management report includes a fair overview of the information required under Article 13, paragraphs 5 and 6 of the Royal Decree of 14 November 2007 on the obligations of issuers of financial instruments admitted to trading on a regulated market.

Brussels, 28 July 2020

Catherine Vandenborre Chris Peeters

Chief Financial Officer

Chief Financial Officer Chairman of the Management Committee & Chief Executive Officer

3. Condensed consolidated interim financial statements

Condensed consolidated statement of financial position

(in € million)	Notes	30 June 2020	31 December 2019
ASSETS
NON-CURRENT ASSETS		12,541.8	12,390.8
Property, plant and equipment	(7)	9,579.2	9,445.6
Goodwill		2,411.1	2,411.1
Intangible assets		96.6	96.4
Trade and other receivables		2.4	2.3
Equity-accounted investees	(4)	345.7	342.8
Other financial assets (including derivatives)		104.6	88.9
Deferred tax assets		2.2	3.7
CURRENT ASSETS		2,438.2	1,502.6
Inventories		30.0	24.3
Trade and other receivables	(8)	1,183.3	488.0
Current tax assets		2.7	5.5
Cash and cash equivalents		1,199.7	975.0
Deferred charges and accrued revenues		22.5	9.8
Total assets		14,980.0	13,893.4
EQUITY AND LIABILITIES
EQUITY		4,340.6	4,332.1
Equity attributable to owners of the Company		4,032.8	4,022.3
Equity attributable to ordinary shares		3,321.9	3,320.8
Share capital		1,705.9	1,705.9
Share premium		259.1	259.1
Reserves		173.0	173.0
Hedging reserve		(3.5)	(7.0)
Retained earnings	(6)	1,187.3	1,189.8
Equity attributable to Hybrid securities		711.0	701.4
Non-controlling interest		307.7	309.9
NON-CURRENT LIABILITIES		7,628.9	5,924.9
Loans and borrowings	(9)	7,050.9	5,378.9
Employee benefits		143.2	118.2
Derivatives		0.0	4.4
Provisions		127.6	122.3
Deferred tax liabilities	(11)	86.0	87.0
Other liabilities		221.2	214.1
CURRENT LIABILITIES		3,010.5	3,636.4
Loans and borrowings	(9)	578.0	1,119.2
Provisions		13.5	15.6
Trade and other payables		1,297.6	1,356.9
Current tax liabilities		46.8	54.8
Accruals and deferred income		1,074,6	1,089.9
Total equity and liabilities		14,980.0	13,893.4

Condensed consolidated statement of profit or loss

Six month period ended 30 June - (in € million)	Notes	2020	2019
Continuing operations
Revenue		1,065.6	1,083.5
Raw materials, consumables and goods for resale		(37.9)	(36.4)
Other income		71.4	63.1
Net income (expense) from settlement mechanism		39.3	12.9
Services and other goods		(478.7)	(513.3)
Personnel expenses		(150.6)	(137.8)
Depreciations, amortisations and impairments		(214.2)	(180.7)
Changes in provisions		2.2	4.2
Other expenses		(18.9)	(18.7)
Results from operating activities		278.2	276.8
Share of profit of equity-accounted investees (net of tax)		2.9	4.8
Earnings before interest and tax (EBIT)		281.1	281.6
Net finance costs		(69.5)	(68.0)
Finance income		1.1	4.2
Finance costs		(70.6)	(72.2)
Profit before income tax		211.6	213.6
Income tax expense	(12)	(63.1)	(61.5)
Profit from continuing operations		148.6	152.1
Profit for the period		148.6	152.1
Profit attributable to:
Equity holders of the parent - Equity holders of ordinary shares		120.1	126.2
Equity holders of the parent - Hybrid securities		9.6	9.6
Non-controlling interest		18.9	16.4
Profit for the period		148.6	152.1
Earnings per share (€)
Basic earnings per share		1.76	2.05
Diluted earnings per share		1.76	2.05

For a disaggregation of the revenue, we refer to chapter 1 Business Performance Review.

Condensed consolidated statement of profit or loss and other comprehensive income

Six month period ended 30 June - (in € million)	2020	2019

Profit for the period	148,6	152.1
Other comprehensive income (OCI)
Items that are or may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges	4.7	(2.8)
Related tax	(1.2)	0.7
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations	(21.6)	(18.4)
Related tax	5.4	4.6
Changes in the fair value of equity investments at fair value through OCI	14.9	0.0
Other comprehensive income for the period, net of tax	2.2	(16.0)
Total comprehensive income for the period	150.8	136.1
Total comprehensive income attributable to:
Equity holders of the parent - Equity holders of ordinary shares	119.3	110.1
Equity holders of the parent - Hybrid securities	9.6	9.6
Non-controlling interest	21.9	16.4
Total comprehensive income for the period	150.8	136.1

Condensed consolidated statement of changes in equity

(in € million)	Share capital	Share premium	Hedging reserve	Foreign currency translation	Reserves	Retained ear nings	Equity attributa ble to ordinary shares	Hybrid securities	Equity attributa ers of the com ble to the own	Non controlling in terests pany	Total equity

Balance at 1 January 2019	1,521.4	14.4	(6.2)	0.0	173.0	1,038.7	2,741.3	706.2	3,447.5	301.4	3,748.9
Profit for the period						135.8	135.8		135.8	16.4	152.1
Other comprehensive income			(2.1)			(13.8)	(16.0)		(16.0)	0.0	(16.0)
Total comprehensive income for the period			(2.1)			122.0	119.8		119.8	16.4	136.1
Transactions with owners, recorded directly in equity
Contributions by and distributions to Owners
Shares issued	190.6	244.8					435.4		435.3		435.3
Issuance costs	(6.4)						(6.4)		(6.4)		(6.4)
Share-based payment expenses	0.1						0.1		0.1		0.1
Hybrid: dividend accrual						(9.6)	(9.6)	9.6
Hybrid: tax effect on dividend accrual						(2.8)	(2.8)		(2.8)		(2.8)
Dividends to non-controlling interests										(26.5)	(26.5)
Dividends						(101.3)	(101.3)		(101.3)		(101.3)
Total contributions and distributions	184.3	244.8	0.0			(113.7)	315.3	9.6	324.9	(26.5)	298.4
Total transactions with Owners	184.3	244.8	0.0	0.0		(113.7)	315.3	9.6	324.9	(26.5)	298.4
Balance at 30 June 2019	1,705.7	259.2	(8.3)	0.0	173.0	1,047.0	3,176.6	715.8	3,892.3	291.2	4,183.5

Balance at 1 January 2020	1,705.8	259.2	(7.0)	0.0	173.0	1,189.8	3,320.8	701.4	4,022.2	309.9	4,332.1
Profit for the period						129.7	129.7		129.7	18.9	148.6
Other comprehensive income			3.5			(4.2)	(0.7)		(0.7)	3.0	2.3
Total comprehensive income for the period			3.5			125.5	129.0		129.0	21.9	150.8
Transactions with owners, recorded directly in equity
Contributions by and distributions to Owners
Hybrid: dividend accrual						(9.6)	(9.6)	9.6
Hybrid: tax effect on dividend accrual						(2.4)	(2.4)		(2.4)		(2.4)
Dividends to non-controlling interests										(24.0)	(24.0)
Dividends						(116.0)	(116.0)		(116.0)		(116.0)
Total contributions and distributions						(128.0)	(128.0)	9.6	(118.4)	(24.0)	(142.4)
Total transactions with Owners						(128.0)	(128.0)	9.6	(118.4)	(24.0)	(142.4)
Balance at 30 June 2020	1,705.9	259.1	(3.5)	0.0	173.0	1,187.3	3,321.9	711.0	4,032.8	307.7	4,340.6

Condensed consolidated statement of cash flows

Six month period ended 30 June - (in € million)	Notes	2020	2019
Cash flows from operating activities
Profit for the period		148.6	152.1
Adjustments for:			147.6
Net finance costs		69.5	68.0
Other non-cash items		0.3	0.3
Current income tax expense		61.0	60.1
Profit or loss of equity-accounted investees, net of tax		(2.9)	(4.8)
Depreciation of property, plant and equipment and amortisation of intangible assets		209.9	180.8
Gain on sale of property, plant and equipment and intangible assets		3.2	4.6
Impairment losses of current assets		0.4	1.9
Change in provisions		0.4	(6.7)
Change in loans and borrowings	(9)	(3.9)	0.7
Change in deferred taxes		2.1	1.4
Cash flow from operating activities		488.5	458.3
Change in inventories		(5.9)	(0.7)
Change in trade and other receivables	(8)	(732.7)	99.1
Change in other current assets		(25.6)	4.8
Change in trade and other payables		(62.0)	(99.4)
Change in other current liabilities		24,6	23.6
Changes in working capital		(801,6)	27.5
Interest paid		(72,5)	(102.3)
Interest received		1.0	4.1
Income tax paid		(64.8)	(111.9)
Net cash from operating activities		(449.4)	275.5
Cash flows from investing activities
Acquisition of intangible assets	(7)	(5.7)	(10.0)
Acquisition of property, plant and equipment	(7)	(331.4)	(377.1)
Acquisition of equity accounted investees		0.0	(201.5)
Proceeds from sale of property, plant and equipment		0.0 1.2	0.0 0.0
Dividend received from equity-accounted investees		0.0	0.9
Loans and long term receivables to joint ventures	(4)	0.0	174.4
Net cash used in investing activities		(335.9)	(413.4)
Cash flow from financing activities
Proceeds from the issue of share capital		0.0	435.3
Expenses related to the issue of share capital		0.0 0.0	(6.3) 0.0
Dividends paid (-)	(6)	(116.0)	(101.3)
Dividends to non -controlling interests		(98.7) (24.0)	(98.7) (2.5)
Repayment of borrowings (-)		(613.1)	(753.1)
Proceeds from withdrawal of borrowings (+)	(10)	0.0 1,763.3	0.0 699.3
Other cash flows from financing activities		0.0	(0.8)
Net cash flow from (used in) financing activities		(1.1) 1,010.2	(1.1) 270.6
Net increase (decrease) in cash and cash equivalents		224.7	918.9 132.9
			1,713.6
Cash & cash equivalents at 1 January		975.0	1,789.3
Cash & cash equivalents at 30 June		195.2 1,199.7	195.2 1,922.2
Net variations in cash & cash equivalents		1,908.8 224.7	1,908.8 132.9

4. Notes to the condensed consolidated interim financial statements

1. General information

Elia Group NV/SA (hereinafter "the company" or "Elia") is established in Belgium, having its head office at Boulevard de l'Empereur 20, B-1000 Brussels.

Elia Group is active in electricity transmission. We ensure that production and consumption are balanced around the clock, supplying 30 million end users with electricity. With subsidiaries in Belgium (Elia) and north-east Germany (50Hertz), we operate 18,990 km of high-voltage connections These unaudited and condensed consolidated interim financial statements of the company as at and for the six months ended 30 June 2020 contain the financial position and performance of the company and its subsidiaries (collectively referred to as "the Group") and the Group's interests in joint ventures.

The condensed consolidated interim financial statements were approved by the Board of Directors of Elia Group SA/NV on 28 July 2020.

2. Basis for preparation and changes to the Group's accounting policies

a. Basis for preparation

The condensed consolidated interim financial statements were prepared in accordance with IAS 34 Interim Financial Reporting, issued by the IASB as approved by the European Union.

The condensed consolidated interim financial statements do not include all the information and disclosures required for a complete set of IFRS financial statements and should be read in conjunction with the Group's last annual consolidated financial statements for the year ended 31 December 2019. However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Group's position and performance since the last annual consolidated financial statements.

There were no changes in the accounting policies for the Group compared to the Annual Report 2019. We refer to this Annual Report for a detailed overview of the accounting policies used.

b. New standards, interpretations and amendments adopted by the Group

The accounting policies applied when preparing the condensed consolidated interim financial statements are consistent with those used to prepare the Group's annual consolidated financial statements for the year ended 31 December 2019.

Standards, interpretations and amendments, effective as from 1 January 2020, can be summarised as follows:

Amendments to IAS 1 and IAS 8 Definition of material;
Amendments to IFRS 3 Business Combinations, definition of a business;
Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform;
Amendments to references to the Conceptual Framework in IFRS standards;

These new, revised or amended standards did not have a material impact on the consolidated financial statements of the Group.

c. Standards issued but not yet effective

The below standards and interpretations are published, but not yet applicable for the annual period beginning on 1 January 2020 and are not expected to have a material impact for the Elia Group and are therefore not set out in detail:

IFRS 17: Insurance Contracts (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU);
Amendments to IAS1 Presentation of Financial Statements: Classification of liabilities as Current or Non-current (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU);
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets; Onerous Contracts Cost of Fulfilling a Contract (applicable for annual periods beginning on or after 1 January 2022, but not yet endorsed in the EU);
Amendment to IFRS16 Leases: Covid-19 related Rent Concessions (applicable for annual periods beginning on or after 1 June 2020, but not yet endorsed in the EU);
Annual improvements to IFRS Standards 2018-2020 (applicable for annual periods beginning on or after 1 January 2022, but not yet endorsed in the EU).
Amendments to IAS 16 Property, Plant and Equipment Prohibiting a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use (applicable for annual periods beginning on or after 1 January 2022, but not yet endorsed in the EU)
Amendments to IFRS 3 Business Combinations updating a reference to the Conceptual Framework (applicable for annual periods beginning on or after 1 January 2022, but not yet endorsed in the EU)
Amendments to IFRS 4 Insurance contracts Expiry date of the deferral approach (applicable for annual periods beginning on or after 1 January 2021, but not yet endorsed in the EU)

3. Use of estimates and judgements

The condensed consolidated interim financial statements for the first half of 2020 were prepared using estimates and judgements as indicated in note 2.4 accompanying the Group's annual consolidated financial statements as of and for the year ended 31 December 2019.

The following estimates and judgements have specifically been re-assessed in the context of the Covid-19 pandemic.

Credit risk related to customers (IFRS 9): management closely reviews the outstanding trade receivables and compared to previous reporting period, the payment behaviour of the clients remained mainly unchanged. Hence, there is no change in the expected credit losses as at 30 June 2020.
Employee benefits including reimbursement rights (IAS 19): The estimated fair value of the plan assets has also been accounted based on evolution stated in the financial markets and the input of the external expert.
Goodwill impairment testing (IAS 36): the main drivers of the value in use of the cash-generating units, and potentially affecting the result of impairment test, are cash flows resulting from the regulated businesses and the Regulated Asset Base ("RAB") at a certain moment in time.
- o Because the remuneration as defined in the regulatory schemes are not affected by the pandemic, the assumptions used for determination of the cash flows in the impairment test per 31 December 2019 remain quasi unchanged.
- o In respect of the RAB, currently some delays are observed in some investment projects resulting in a slightly lower RAB per year-end. However, this delay is merely a shift in timing which will be caught up in future years and the RAB used in the terminal value of the impairment test should normally not be impacted.

4. Subsidiaries, joint ventures and associates

a. Group structure

For detailed accounting policies in respect to 'Business combinations and Goodwill', we refer to note 3.1 in the Group's last annual consolidated financial statements as at and for the year ended 31 December 2019.

The below table provides an overview of subsidiaries, joint ventures, associated companies and other shareholdings held across the group.

Name	Country of establish	Headquarters
	ment		Stake %
			2020	2019

Subsidiaries
Elia Transmission Belgium NV/SA	Belgium	Bd de l'Empereur 20, 1000 Brussels	99.99	99.99
Elia Asset NV/SA	Belgium	Bd de l'Empereur 20, 1000 Brussels	99.99	99.99
Elia Engineering NV/SA	Belgium	Bd de l'Empereur 20, 1000 Brussels	100.00	100.00
Elia Re SA	Luxembourg	Rue de Merl 65, 2146 Luxembourg	100.00	100.00
Elia Grid International NV/SA	Belgium	Bd de l'Empereur 20, 1000 Bussels	90.00	90.00
Elia Grid International GmBH	Germany	Heidestraße 2, 10557 Berlin	90.00	90.00
Elia Grid International LLC	Qatar	Office 905, 9th Floor, Al Fardan Office Tower, Westbay - Doha	90.00	90.00
Elia Grid International Pte. Ltd.	Singapore	20 Collyer Quay #09-01, Singapore 049319	90.00	90.00
Eurogrid International NV/SA	Belgium	Bd de l'Empereur 20, 1000 Brussels	100.00	100.00
Eurogrid GmbH	Germany	Heidestraße 2, 10557 Berlin	80.00	80.00
50Hertz Transmission GmbH	Germany	Heidestraße 2, 10557 Berlin	80.00	80.00
50Hertz Offshore GmbH	Germany	Heidestraße 2, 10557 Berlin	80.00	80.00
Re.Alto-Energy BV/SRL	Belgium	Bd de l'Empereur 20, 1000 Brussels	100.00	100.00
Re.Alto-Energy GmbH	Germany	Ratingstraße 9, 40213 Dusseldorf	100.00	0.0
Investments accounted for using the equity-method – Joint Ventures
Nemo Link Ltd.	United Kingdom	Strand 1-3, London WC2N 5EH	50.00	50.00
Investments accounted for using the equity-method – Associates
H.G.R.T S.A.S.	France	1 Terrasse Bellini, 92919 La Défense Ce dex	17.00	17.00
Coreso NV/SA	Belgium	Avenue de Cortenbergh 71, 1000 Brus sels	22.16	22.16
Ampacimon SA		Belgium Rue de Wallonie 11, 4460 Grâce-Hollogne	20.54	20.54
Enervalis NV	Belgium	Centrum-Zuid 1111, 3530 Houthalen Helchteren	17.36	17.36
Investments accounted for using IFRS9 - other shareholdings
JAO SA	Luxembourg	2, Rue de Bitbourg, 1273 Luxembourg	7.20	7.20
European Energy Exchange (EEX)	Germany	Hamm Augustusplatz 9, 0409 Leipzig	4.32	4.32
TSCNET Services GmbH	Germany	Dingolfinger Strasse 3, 81673 Munich	5.36	5.36

5. Segment reconciliation

We refer to chapter 1 for a detailed description of the performance per segment. In the table below, the segment reconciliation is provided.

Consolidated results (in € million) - Period ended 30 June	2020 Elia Transmission	2020 50Hertz Transmission	2020 Non-regulated activities and Nemo Link	2020 Consolidation entries & intersegment transactions	2020 Elia Group
	( a )	( b )	( c )	( d )	( a ) + ( b ) + ( c ) + ( d )
Revenue	419.1	644.3	3.3)	(1.1)	1,065.6
Other income	27.4	38.2	12.0	(6.2)	71.4
Net income (expense) from settlement mechanism	24.6	14.7	0.0	0.0	39.3
Depreciation, amortisation, impairment and changes in provisions	(92.5)	(119.4)	(0.1)	0.0	(212.0)
Results from operating activities	117.6	163.5	(2.8)	(0.0)	278.2
Share of profit of equity accounted inves tees, net of tax	1.1	0.0	1.8	0.0	2.9
Earnings before interest and tax (EBIT)	118.7	163.5	(1.0)	(0.0)	281.1
Earnings before depreciations, amortisa tions, interest and tax (EBITDA)	211.2	282.8	(0.8)	(0.0)	493.2
Finance income	0.5	0.6	0.1	0.0	1.2
Finance costs	(34.7)	(27.9)	(8.0)	0.0	(70.6)
Income tax expenses	(23.0)	(41.7)	1.6	0.0	(63.1)
Profit attributable to the owners of the company	61.5	75.6	(7.4)	(0.0)	129.7
Consolidated statement of financial position (in € million)	30.06.2020	30.06.2020	30.06.2020	30.06.2020	30.06.2020
Total assets	6,894.5	6,915.6	1,729.4	(559.5)	14,980.0
Capital expenditures	152.5	191.3	0.1	0.0	343.9
Net financial debt	3,123.9	2,917.8	387.5	0.0	6,429.2

Consolidated results (in € million) - Period ended 30 June	2019 Elia Transmis sion (Belgium)	2019 50Hertz Trans mission (Ger many)	2019 Non-regulated activities and Nemo Link	2019 Consolidation entries & in tersegment transactions	2019 Elia Group
	(a)	(b)	(c)	(d)	(a)+(b)+(c)+(d)
Revenue	460.3	629.9	(2.0)	(4.6)	1,083.6
Other income	25.7	34.9	6.2	(3.8)	63.0
Net income (expense) from settlement mechanism	13.0	(0.1)	0.0	0.0	12.9
Depreciation, amortisation, impair ment and changes in provisions	(75.9)	(100.5)	(0.2)	0.0	(176.6)
Results from operating activities	132.9	149.3	(5.3)	0.0	276.9
Share of profit of equity-accounted in vestees, net of tax	1.0	0.0	3.8	0.0	4.8
Earnings before interest and tax (EBIT)	133.9	149.3	(1.5)	0.0	281.7
Earnings before depreciations, amorti sations, interest and tax (EBITDA)	209.8	249.8	(1.3)	0.0	458.3
Finance income	0.5	0.4	3.3	0.0	4.2
Finance costs	(37.2)	(30.7)	(4.4)	0.0	(72.3)
Income tax expenses	(32.2)	(36.8)	7.5	0.0	(61.5)
Profit attributable to the Owners of the Company	65.0	65.8	5.0	0.0	135.8

Consolidated statement of financial position (in € million)	31.12.2019	31.12.2019	31.12.2019	31.12.2019	31.12.2019
Total assets	6,452.1	6,279.6	1,733.5	(571.8)	13,893.4
Capital expenditures	748.5	516.0	0.8	0.0	1,265.3
Net financial debt	3,013.4	2,108.1	401.6	0.0	5,523.1

All revenues are earned from external customers except for the intersegment revenues.

6. Dividends

On 19 May 2020, the shareholders approved payment of a gross dividend of €1.69 per share (i.e. a net dividend of €1.183 per share), corresponding to a total gross dividend of €116.0 million.

7. Acquisitions and disposals of PPE

A net sum of €343.9 million was invested in the entire Elia Group, of which €152.5 million in the Belgian segment, €191.3 million in the German segment and €0.1 million in the non-regulated activities and Nemo Link in the first half of 2020. See section 1.1 and 1.2 here above for more details.

8. Current assets – Trade and other receivables

The increase of trade and other receivables from €488 Million to € 1,183.3 is mainly related to the German Segment, in which the outstanding balance position of the EEG levies (surcharge) was affected by low market prices and decreased end user consumption due to Covid-19 These effects are neutral for the profitability of the Elia group, but liquidity risk management is closely monitored and measurements are being set up to encounter the negative effect on the liquidity of the Group.

9. Loans and borrowings

In the 1 st semester of 2020, the following instruments has been issued:

On 28th of April 2020, Elia Transmission Belgium successfully launched a €800 million Eurobond under its new €3 Billion EMTN² listed on the Euro MTF of the Luxembourg Stock Exchange in April. The €800 million senior unsecured bond will mature in 2030 and has an annual fixed coupon of 0.875%. The proceeds are used to refinance a €495.7 million shareholder loan which matured in 2020 and to finance the grid investment plan in Belgium.
On 6 May 2020, Eurogrid GmbH ( 50Hertz Transmission) successfully issued its debut Green Bond for € 750 million under its € 5 billion Debt Issuance Programme, having a term of 12 years and an annual fixed coupon of 1.113%. This senior unsecured bond is based on Eurogrids Green Bond Framework updated in April 2020, accompanied by a Second Party Opinion issued by Vigeo Eiris. Its proceeds will exclusively been invested in a portfolio of offshore renewable electricity projects and asset namely 50Hertz Offshores projects Ostwind 1 and Ostwind 2.
26th of May 2020, Elia Transmission Belgium entered the bond market for a second time in May and successfully placed a private placement of €200 million dual tranche 8-year and 24-year amortising bond with a fixed annual coupon of 1.56% under its €3 billion EMTN programme.

In the context of the reorganisation of the group structure realized in 2019, Elia Transmission Belgium and the lenders agreed to an early repayment of the loans end of June 2020 (other loan € 453.6 million and the loan with Publi Part for € 42.1 million). As the lender Publi-Part only opted for early repayment end march 2020, the loan was presented under the section non-current liabilities per 31st December 2019.

At the end of June 2020, Elia Transmission Belgium restituted the loans as contractually agreed. For these loans interest rate swaps were contracted for € 300 million which have been unwinded end of June, resulting in a derecognition affecting the financial charges for €4.5 million.

² Euro Medium Term note-

At year-end 2019, Elia Transmission Belgium had drawn on its revolving credit facility for €75 million, increased the drawing with € 25 million in 2020 and paid back in May 2020 the full amount of € 100 million. Finally the yearly instalment of €14 million of the amortised term loan has been paid in June, together with the interests incurred on it.

Loans and borrowings as at 30 June 2020 comprise the following:

(in € million)	Maturity	Amount	Interest rate	Current pro portion - fixed
Eurobond issues 2013/15 years	2028	547.1	3.25%	100.00%
Eurobond issues 2013/20 years	2033	199.1	3.50%	100.00%
Eurobond issues 2014/15 years	2029	346.7	3.00%	100.00%
Eurobond issues 2015/8.5 years	2024	498.4	1.38%	100.00%
Eurobond issues 2017/10 years	2027	247.7	1.38%	100.00%
Senior bond 2018/10 years	2028	297.5	1.50%	100.00%
Eurobond issues 2019/7 years	2026	498.1	1.38%	100.00%
Eurobond issues 2020/10 years	2030	787.9	0.88%	100.00%
Amortising term loan	2033	195.7	1.80%	100.00%
Amortising bond – 7.7 years	2028	67.2	1.56%	100.00%
Amortising bond - 23.7 years	2044	132.3	1.56%	100.00%
European Investment Bank	2025	100.0	1.08%	100.00%
Bond as part of Euro Medium Term Note program 2010	2020	499.8	3.88%	100.00%
Bond as part of Debt Issuance Programme 2015	2025	498.1	1.88%	100.00%
Bond as part of Debt Issuance Programme 2015	2023	748.9	1.63%	100.00%
Bond as part of Debt Issuance Programme 2015	2030	139.2	2.63%	100.00%
Bond as part of Debt Issuance Programme 2016	2028	747.2	1.50%	100.00%
Registered bond 2014	2044	50.0	3.00%	100.00%
Unsecured bank loan	2026	150.0	0.90%	100.00%
Green Bond 2020 / 12 years	2032	747.1	1.11%	100.00%
Total		7,498.0		100.00%

The above €7,498.0 million is to be increased with €129.2 million of interest accruals and finance lease liabilities to reconstitute the overall debt of €7,627.2 million.

10. Financial instruments

The table below shows a comparison of the carrying amount and fair value of financial instruments as at 30 June 2020 and the fair value hierarchy:

	Carrying amount				Fair value
(in € million)	through P&L Fair Value	through OCI Fair Value	Amortised Cost	Other financial liabilities	Total	Level 1	Level 2	Level 3	Total
31 December 2019
Other financial assets	7.0	28.8			35.8	7.0		28.8	35.8
Trade and other receivables			490.3		490.3
Cash and cash equivalents			975.0		975.0
Assets held to hedge long-term borrowings		(4.4)			(4.4)		(4.4)		(4.4)
Unsecured financial bank loans and other loans				(1,030.4)	(1,030.4)		(1,030,4)		(1,030.4)
Unsecured bond issues				(5,316.0)	(5,316.0)		(5,857,6)		(5,857.6)
Trade and other payables				(1,356.9)	(1,356.9)
Total	7.0	24.4	1,465.3	(7,703.3)	(6,206.6)	n.r	n.r	n.r	n.r
30 June 2020
Other financial assets	7.0	43.5			50.5	7.0		43.5	50.5
Trade and other receivables			1,185.7		1,185.7
Cash and cash equivalents			1,199.7		1,199.7
Unsecured financial bank loans and other loans				(445.7)	(445.7)		(445.7)		(445.7)
Unsecured bond issues				(7,052.3)	(7,052.3)		(7,593.7)		(7,593.7)
Trade and other payables				(1,297.6)	(1,297.6)
Total	7.0	43.5	2,385.4	(8,795.6)	(6,359.7)	n.r	n.r	n.r	n.r

The above tables do not include fair value information for financial assets and liabilities not measured at fair value, such as cash and cash equivalents, trade and other receivables, and trade and other payables, as their carrying amount is a reasonable approximation of fair value. The fair value of finance lease liabilities and interest accruals are not included as there is no requirement for disclosure.

Fair value is the amount for which an asset could be exchanged or a liability settled in an arm's-length transaction. IFRS 7 requires, for financial instruments that are measured in the statement of financial position at fair value and for financial instruments measured at amortised cost for which the fair value has been disclosed, the disclosure of fairvalue measurements by level in the following fair value measurement hierarchy:

Level 1: The fair value of a financial instrument that is traded in an active market is measured based on quoted (unadjusted) prices for identical assets or liabilities. A market is considered active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's-length basis.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to assess the fair value of an instrument are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices), the instrument is included in level 2.

The fair value of the unsecured bond issues and other loans is the close price at 30 June 2020 of the instrument on the secondary market.

Level 3: If one or more of the significant inputs used in applying the valuation technique is not based on observable market data, the financial instrument is included in level 3. The fair value amount included under 'Other financial assets' has been determined by referring to either (i) recent transaction prices, known by the Group, for similar financial assets or (ii) valuation reports issued by third parties. The fair value of the other financial assets is derived from an external valuation report.

The fair value of financial assets and liabilities, other than those presented in the above table, approximates to their carrying amounts largely due to the short-term maturities of these instruments.

11. Deferred tax liabilities

Deferred tax liabilities increased slightly from €83.3 million to €83.8 million, of which €2.2 million has been recognised in profit or loss (negative), €1.7 million in OCI (positive).

(in € million)	Opening balance	Recognised in profit or loss	Recognised in OCI	Total
2020
Property, plant and equipment	(208.4)	0.9	0.0	(207.5)
Intangible assets	(8.6)	1.2	0.0	(7.4)
Non-current trade and other receivables	1.2	(0.4)	0.0	0.8
Interest-bearing loans and other non-cur rent financial liabilities	22.1	(1.5)	(3.6)	17.0
Employee benefits	16.3	0.5	5.3	22.1
Provisions	47.4	(0.7)	0.0	46.7
Deferred revenue	29.3	0.1	0.0	29.4
Regulatory liabilities	25.3	(2.7)	0.0	22.6
Losses carried forward	0.4	0.1	0.0	0.5
Deferred tax on investment grants	(1.1)	0.0	0.0	(1.1)
Other items	(7.2)	0.4	0.0	(6.8)
Total	(83.3)	(2.2)	1.7	(83.8)

12. Income tax expense

Excluding the share of profit of equity-accounted investees, the effective tax rate was 30.2% for the six months to June 2020 compared to 29.5% for the six months to June 2019.

13. Settlement mechanism (regulatory framework)

In Belgium, the settlement arising from the tariff regulation mechanism for the year ended 31 December 2019 was accounted for in the period ended 30 June 2020 and affected the net profit for the period by €2.4 million.

In Germany, there are no changes in the regulatory uncertainties due to the final settlements arising from the tariff regulation mechanisms to be approved by the relevant authorities.

We refer to notes 9.1, 9.2 and 9.3 accompanying the annual consolidated financial statements as of and for the year ended 31 December 2019 for more details.

14. Related parties

Controlling entities

The core shareholder of Elia Group is still Publi-T. Other than the yearly dividend payment, no transactions occurred with the core shareholder in the six months ended 30 June 2020.

Transactions with key management personnel

The key management includes Elia's Board of Directors and Elia's Management Committee. Both Elia's Board of Directors and Elia's Management Committee have a significant influence across the entire Elia Group.

At 50Hertz Transmission (Germany), key management personnel include Eurogrid International CVBA's Board of Directors, who are responsible for monitoring the activities of 50Hertz Transmission (Germany). Key management personnel also includes the Board of Management of 50Hertz Transmission and the Supervisory Board, which was established in the German segment.

Key management personnel did not receive stock options, special loans or other advances from the Group during the year.

There were no significant transactions with entities in which Elia's Management Committee members, the members of Eurogrid International CVBA's Board of Directors, the Board of Management of 50Hertz Transmission or the Supervisory Board exercise a significant influence (e.g. holding positions such as CEO, CFO or members of the Management Committee) in the first half of 2020.

Transactions with joint ventures and associated companies

Details of transactions with joint ventures and associated companies are shown below.

(in € million) – Period ended 30 June	2020	2019
Transactions with joint ventures and associated companies	(1.3)	2.7
Sales of goods	0.9	1.7
Purchases of goods	(2.2)	(2.2)
Interest and similar revenue	0.0	3.2
(in € million)	30 June 2020	30 June 2019
Outstanding balances with joint ventures and associated companies	(0.7)	10.6
Non-current trade and other receivables	0.0	0.6
Current trade and other receivables	(0.3)	10.5
Current trade and other payables	(0.4)	(0.5)

As a result of the conversion of debt into equity at Nemo Link (see chapter 4), the accrued interests and non-current receivables were converted into equity at Nemo Link..

Transactions with other related parties

In addition, Elia's Management Committee also assessed whether transactions occurred with entities in which they or members of the Board of Directors exercise a significant influence (e.g. positions as CEO, CFO, vice-presidents of the Management Committee, etc.).

There were various significant transactions with various distribution system operators (Sibelga, Fluvius) which are customers of Elia. All these transactions took place in the normal course of Elia's business activities. Sales and expenses with these entities amounted to €0.4 million and €1.5 million respectively for the six months ended 30 June 2020. As at 30 June 2020, there were no outstanding trade receivables and trade debts towards those entities.

15. Seasonal fluctuations

Part of the Group's revenue ( mainly German Segment) profile follows a seasonal pattern, primarily due to the higher volumes of electricity consumed during the winter that have to be transmitted by the grid operator from power generators to distributors and large industrial customers, and also due to the impact of renewable energies, which are highly sensitive to weather conditions and hence have a considerable effect on revenue inflows and the course of business.

16. Events after the reporting date

There are no important events to report since 30 June 2020, which would affect the condensed consolidated interim financial statements.

As included in the 2019 annual consolidated financial statements, the Group expects Brexit still to have a very limited effect on the consolidated financial statements.

17. Regulatory framework

Regulatory framework in Belgium

Since the beginning of 2020, a new tariff methodology came into force. This methodology is again applicable for a period of 4 years (2020-2023).

Tariff setting – update period 2020-2023

TARIFF REGULATIONS

On 28 June 2018, the CREG issued a decision fixing the tariff methodology for the electricity transmission grid (including offshore) and the electricity grids which have a transmission function the regulatory period 2020-2023 (Decision (Z)1109/10). This methodology is the general framework on which transmission tariffs are set for these four years.

Elia has prepared its tariff proposal for the regulatory period commencing on 1 January 2020 based on the methodology described below. This proposal was approved by the CREG on 7 November 2019 (Decision (B)658E/62).

TARIFF REGULATIONS APPLYING IN BELGIUM

As the operator of grids performing a transmission function (covering the transmission grid and the local and regional transmission grids in Belgium), Elia makes most of its income from the regulated tariffs charged for use of these grids (tariff income), which are approved in advance by CREG. As of 1 January 2008, the prevailing tariff regulation mechanisms have provided for approved tariffs being set for four-year periods, barring specific circumstances.

The tariff mechanism is based on amounts recognised in accordance with Belgian accounting regulations (BE GAAP). The tariffs are based on budgeted costs minus a number of sources of non-tariff income. These costs are then divided based on an estimate of the volumes of electricity taken off the grid and, in the case of some costs, based on estimated volumes of electricity injected into the grid, in accordance with the terms of the tariff methodology drawn up by the CREG.

The costs taken into account include the forecast value of the authorised remuneration of the invested capital, an estimate of the amounts allocated to Elia in the form of performance incentives and the predicted values of various cost categories. These costs are subdivided into three groups: controllable costs, for which Elia is offered a financial incentive to improve its efficiency levels; non-controllable costs, over which Elia has no influence and for which the deviations from the budget are completely allocated to the calculation of future tariffs; and influenceable costs, to which a hybrid rule applies (see the information provided below with regard to controllable and non-controllable costs and income and influenceable costs).

Fair remuneration

Fair remuneration is the return on capital invested in the grid based on the Capital Asset Pricing Model ("CAPM"). It is based on the average annual value of the regulatory asset base (RAB), which is calculated annually, taking into account new investments, divestments, depreciations and changes in working capital.

As of 1 January 2020, the formula has changed compared to the previous tariff methodology as regards the level of leverage and the OLO interest rate for risk free investment: (i) the regulatory leverage has been increased from 33 per cent. to 40 per cent., and (ii) the OLO has been set at 2.4 per cent. for the period 2020-2023, instead of taking the average of the year, each year. In case of an important change of the Belgian macro-economic situation and/or the market circumstances compared to the expected situation and conditions, the CREG and the Issuer can agree a modification of the fixed OLO rate.

The formula for the calculation of fair remuneration is as follows:

A: [S (if less than or equal to 40 per cent.) x average RAB x [(1 + α) x [(OLO (n) + (β x risk premium)]]] plus

B: [(S (if above 40 per cent.) – 40 per cent.) x average RAB x (OLO (n) + 70 base points)]

Whereby:

OLO (n) has been fixed at 2.4 per cent. and is no longer the average rate of Belgian ten-year linear bonds for the year in question (subject to modification agreed between the CREG and the Issuer as set out above);
RAB (n) = RAB (n-1) + investments (n) depreciation (n) divestments (n) decommissioning (n) +/ change in working capital need;
S = the consolidated average capital and reserves/average RAB, in accordance with Belgian GAAP;
Alpha (α) = the illiquidity premium set at 10 per cent.;
Beta (β) = calculated over a historical three-year period, taking into account available information on the Issuer's share price in this period, compared with the Bel20 index over the same period. The value of the beta cannot be lower than 0.53;
Risk premium remains at 3.5 per cent.;
In respect of A: The rate of remuneration (in per cent.) as set by the CREG for year "n" is equal to the sum of the risk-free rate, i.e. the average rate of Belgian ten-year linear bonds for the year in question (OLO (n)) and a premium for market risk for shares, weighted using the applicable beta factor. Tariff regulation sets the risk premium at 3.5 per cent. The CREG encourages the Issuer to keep its actual capital and reserves as close as possible to 40 per cent., this ratio being used to calculate a reference value of capital and reserves; and-
In respect of B: If the Issuer's actual capital and reserves are higher than the reference capital and reserves, the surplus amount is balanced out with a reduced rate of remuneration calculated using the following formula: [(OLO (n) + 70 base points)].
Assets related to the MOG are linked to the RABMOG, for which a premium remuneration is applicable in addition to the above. This is based on the following formula: [S (less than or equal to 40 per cent.) x average RABMOG x 1.4 %].

Non-controllable costs and revenues

The category of costs and revenues that are outside Elia's direct control are not subject to incentive mechanisms by the CREG, and are an integral part of the costs and revenues used to determine the tariffs. The tariffs are set based on forecast values for these costs and revenues, and the difference from the actual values is allocated ex post to the tariff calculation for the subsequent period.

The most important non-controllable costs consist of the following items: depreciation of tangible fixed assets, ancillary services (except for the reservation costs of ancillary services excluding black start, which qualify as influence-able costs), costs related to line relocation imposed by a public authority, and taxes, partially compensated by revenues from non-tariff activities (for example cross border congestion revenues). In this new tariff period, certain exceptional costs specific to offshore assets (e.g. the MOG) have been added to the list of non-controllable costs. This also includes financial charges/revenues for which the principle of financial embedded debt has been confirmed. As a consequence, all actual and reasonable finance costs related to debt financing are included in the tariffs.

Controllable costs and revenues

The costs and revenues over which Elia has direct control are subject to an incentive regulation mechanism, meaning that they are subject to a sharing rule of productivity and efficiency improvement which may occur during the regulatory period. The sharing factor is 50 per cent. Therefore, Elia is encouraged to control a defined category of its costs and revenue. Any savings with respect to the allowed (adjusted) budget positively impacts the net profit of the Issuer by 50 per cent. of the amount (before tax) and, accordingly, any overspending negatively affects its profit. There have been no changes compared to the previous tariff methodology, except for certain non-recurrent but controllable costs specific to offshore assets (e.g. the MOG) that can be added to the costs allowance for a given regulatory period.

Influenceable costs

The reservation costs for ancillary services, except for black-start, and costs of energy to compensate for grid losses are qualified as influenceable costs, meaning that efficiency gains create a positive incentive, insofar as they are not caused by a certain list of external factors. 20 per cent. of the difference in expenses between Y-1 and Y constitutes a profit (pre-tax) for the Issuer, with a cap of + €6 million. For each of the two categories of influenceable costs (power reserves and grid losses), the incentive cannot be less than €0.

Other incentives

The tariff predefined by the regulator includes, besides the fair remuneration, all the incentives listed below. In case Elia would not perform on these incentives as set by the regulator, the amount of these incentives attributable to Elia will be decreased. The impact is reflected in the deferred revenues which will generate future tariff decreases – see description settlement mechanism below (all amounts are pre-tax)

Market integration: This incentive consisted of three elements in the past regulatory framework: (i) increase of import capacity, (ii) increase of market welfare due to market coupling and (iii) financial participations. Only the incentive on financial participations remains. The incentive on market welfare disappears, whereas the one on import capacity is replaced by an incentive with a similar objective (increase of crossborder commercial exchange capacity) but with a fairly different measurement method. Additionally, a new incentive is created on the timely commissioning of investment projects contributing to market integration. These incentives can contribute positively to the Issuer's profit (from EUR 0 to EUR 16 million for cross-border capacity, from EUR 0 to EUR 7 million for timely commissioning). The profit (dividends and capital gains) resulting from financial participations in other companies which the CREG has accepted as being part of the

RAB, is allocated as follows: 40 per cent. is allocated to future tariff reductions and 60 per cent.is allocated to the Elia's profit ).

Network availability: This incentive is broadened and is defined as follows: (i) if the average interruption time ("AIT") reaches a target predefined by the CREG, the Issuer's net profit (pre-tax) could be impacted positively with a maximum of EUR 4.8 million, (ii) in case that the availability of the MOG is in line with the level set by the CREG, the incentive can contribute to the Issuer's profit from EUR 0 to EUR 2.53 million and (iii) the Issuer could benefit from EUR 0 to EUR 2 million in case that the predefined portfolio of maintain and redeploy investments is realised in time and on budget .
Innovation and grants: The content and the remuneration of this incentive has changed and covers (i) the realisation of innovative projects which could contribute to the Issuer's remuneration for EUR 0 to EUR 3.7 million (pre-tax) and (ii) the subsidies granted on innovative projects which could impact the Issuer's profit with a maximum of EUR 0 to EUR 1 million.
Quality of customer related services: This incentive is broadened and is related to three incentives: (i) the level of client satisfaction related to the realisation of new grid connections which can generate a profit for the Issuer of EUR 0 to EUR 1.35 million, (ii) the level of client satisfaction for the full client base which would contribute with EUR 0 to EUR 2.53 million to the Issuer's profit and (iii) the data quality that the Issuer publishes on a regular basis, which can generate a remuneration for the Issuer of EUR 0 to EUR 5 million.
Enhancement of balance system: This incentive is similar to the one in the past regulatory framework named "discretionary incentive" through which the Issuer gets a reward if certain projects related to system balancing as defined by the CREG are realised. This incentive can generate a remuneration between EUR 0 and EUR 2.5 million (pre-tax).

Regulatory framework for the Modular Offshore Grid

The CREG amended the 2016-2019 tariff methodology to create specific rules applicable to the investment in the MOG. A formal consultation took place in the first weeks of 2018 between the CREG and the Issuer and the CREG took a decision on 6 December 2018 about the new parameters to be introduced in the tariff methodology. The main features of said parameters are (i) a specific risk premium to be applied to this investment (resulting in an additional net return of 1.4 per cent.), (ii) a special depreciation rate applicable to the MOG assets, (iii) certain costs specific to the MOG to bear another qualification compared to the costs for onshore activities, (iv) the level of the costs to be defined based on the characteristics of the MOG assets and (v) dedicated incentives linked to the availability of the offshore assets. For the tariff period 2020-2023, the regulatory framework for the MOG has been included in the tariff methodology, based on the features described here above, except for the risk premium which has applied since 1 January 2020 on a target equity/debt ratio of 40/60.

Regulatory deferral account: deviations from budgeted values

On a yearly basis, the actual volumes of electricity transmitted may differ from the forecast volumes. If the transmitted volumes are higher (or lower) than those forecast, the deviation is booked to an accrual account during the year in which it occurs . These deviations from budgeted values (a regulatory debt or a regulatory receivable) are accumulated, and will be included in the the tariff setting for the subsequent tariff period.Regardless of deviations between the forecast parameters for tariffs setting (Fair remuneration, Non-controllable elements, Controllable elements, Influencable costs, Incentive components, Cost and revenue allocation between regulated and non-regulated activities) and effective incurred costs or revenues related to these parameters, the CREG takes yearly a final decision as to whether the incurred costs/revenue are deemed reasonable to be borne by the tariffs. This decision may result in the rejection of elements incurred and, in the event that such elements incurred are rejected, the amount will not be taken into account for the setting of tariffs for the next period. Despite the fact that Elia can ask for a judicial review of any such decision, if this judicial review were to be unsuccessful, a rejection may well have an overall negative impact Elia's financials.

Cost and revenue allocation between regulated and non-regulated activities

The tariff methodology for 2020-2023 features a mechanism enabling Elia to develop activities outside the Belgian regulated perimeter and whose costs are not covered by grid tariffs in Belgium. This methodology establishes a mechanism to ensure that the impact on Belgian grid users of Elia's financial participation in other companies which the CREG does not consider part of the RAB (such as stakes in regulated or non-regulated activities outside Belgium,) is neutral.

Public service obligations

In its role as TSO, Elia is subject to various public service obligations imposed by Government and/or regulation mechanisms. Public authorities/regulation mechanisms identify public service obligations in various fields (such as promotion of renewable energy, green certificates , strategic reserves, social support, fees for the use of the public domain, offshore liability) to be executed by TSOs. Costs incurred by grid operators in respect of those obligations are fully covered by tariff 'levies' as approved by the regulator. The amounts outstanding are reported as levies (see notes 6.9 for other receivables and 6.17 for other payables).

Regulatory framework in Germany

In 2020, there were no significant changes to the regulatory framework in Germany applicable until 31 December 2020 (as described in note 9.2 to the annual consolidated financial statements as of and for the year ended 31 December 2019.

Regulatory framework for the Nemo Link interconnector

In 2020, there were no significant changes to the regulatory framework for the Nemo Link interconnector applicable until 31 December 2020 (as described in note 9.3 to the annual consolidated financial statements as of and for the year ended 31 December 2019.

5. The report of the joint statutory auditors and their review of the condensed consolidated interim financial information

6. Glossary

Adjusted items

Adjusted items are those items that are considered by management not to relate to items in the ordinary course of activities of the Group. They are presented separately as they are important for the understanding of users of the consolidated financial statements of the performance of the Group and this compared to the returns defined in the regulatory frameworks applicable to the Group and its subsidiaries.

Adjusted items relate to:

Income and expenses resulting from a single material transaction not linked to current business activities (e.g. change in control in a subsidiary)
-changes to the measurement of contingent considerations in the context of business combinations;
-Restructuring costs linked to the corporate reorganisation of the Group (i.e. reorganisation project to isolate and ring-fence the regulated activities of Elia in Belgium from the non-regulated activities and regulated activities outside Belgium

Prior to 2019, the adjusted items included the offshore commissioning effect and energy bonus at the level of 50Hertz. This is no longer presented separately as an Adjusted item in 2019 but directly included in the adjusted EBIT.

Adjusted EBIT

Adjusted EBIT is defined as EBIT excluding the adjusted items.

EBIT (Earnings Before Interest and Taxes) = adjusted result from operating activities, which is used to compare the operational performance of the Group over the years. The adjusted EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provisions and other operating expense and plus the share of equity accounted investees – net and plus or minus adjusted items

Adjusted net profit

Adjusted net profit is defined as net profit excluding the adjusted items. The adjusted net profit is used to compare the performance of the Group over the years.

CAPEX (Capital Expenditures)

CAPEX (Capital Expenditures) = Acquisitions of fixed assets (a.o. property, plant and equipment and intangible assets) minus proceeds from sale of fixed assets. Capital expenditures, or CAPEX, are investments realised by the Group to acquire, upgrade, and maintain physical assets (such as property, buildings, an industrial plant, technology, or equipment) and intangible assets. CAPEX is an important metric for the Group as it affects its Regulated Asset Base (RAB) that serves as basis for its regulatory remuneration.

EBIT

EBIT (Earnings Before Interest and Taxes) = result from operating activities, which is used for the operational performance of the Group. The EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provision and other operating expense and plus the share of equity accounted investees.

EBITDA

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisations) = results from operating activities plus depreciations, amortisation and impairment plus changes in provisions plus share of profit of equity accounted investees. EBITDA is used as a measure for the operational performance of the Group, thereby extracting the effect of depreciations, amortisation and changes in provisions of the Group. EBITDA excludes the cost of capital investments like property, plant, and equipment.

Equity attributable to the owners of the company

Equity attributable to ordinary shareholders and hybrid security holders, but excluding non-controlling interests.

Financial Leverage

Financial Leverage (D/E) = Gross financial debt divided by shareholders' equity (where both metrics include non-controlling interests and hybrid instruments). The Financial Leverage provides an indication of the extent to which the Group uses financial debt to finance its operations relative to equity financing. It is hence considered by investors as an indicator of solvency.

Free cash flow

Free cash flow = Cash flows from operating activities minus cash flows from investment activities. Free cash flow provides an indication of the cash flows generated by the Group.

Net finance costs

Represents the net financial result (finance costs plus finance income) of the company.

Net financial debt

Net Financial Debt = Non-current and current interest-bearing loans and borrowings (incl. lease liability under IFRS 16) minus cash and cash equivalents. Net financial debt is an indicator of the amount of interest-bearing debt of the Group that would remain if readily available cash or cash instruments were used to repay existing debt.

Regulatory Asset Base (RAB)

Regulated asset base (RAB) is a regulatory concept and an important driver to determine the return on the invested capital in the TSO through regulatory schemes. The RAB is determined as follows: RABi (initial RAB determined by regulator at a certain point in time) and evolves with new investments, depreciations, divestments and changes in working capital on a yearly basis using the local gaap accounting principles applicable in the regulatory schemes. In Belgium when setting the initial RAB, a certain amount of revaluation value (i.e. goodwill) was taken into account which evolves from year to year based on divestments and/or depreciations

Return on Equity (adj.) (%)

Return on Equity (RoE adj.) = Net profit attributable to ordinary shareholders divided by equity attributable to ordinary shareholders. The return on equity is adjusted to exclude the accounting impact of hybrid securities in IFRS (i.e. exclude the hybrid security from equity and consider the interest costs as part of comprehensive income). The RoE adj. provides an indication of the ability of the Group to generate profits relative to its invested equity.

Net debt / EBITDA

Net debt / EBITDA = Net financial debt divided by EBITDA (see definition stated above).The net debt / EBITDA ratio provides an indication of the number of years it would take for the Group to pay back its interest-bearing debt net of cash based on its operational performance.

EBITDA / Gross interest

EBITDA / Gross interest = EBITDA (see definition above) divided by the pre-tax interest charges. The EBITDA-tointerest coverage ratio expresses to what extent the operational performance enables to pay off annual interest expenses.

AI assistant

Elia Group NV/SA — Interim / Quarterly Report 2020

3945_ir_2020-07-29_b27aaa12-8071-48e8-933a-837c02724a85.pdf

Elia Group 2020 half-year financial report

Content

1. Business performance review

Key figures – Elia Group

1.1. Segment reporting Elia Transmission (Belgium)

Highlights

Regulatory framework

Key results

Financials

Operational

Investments

1.2. Segment reporting 50Hertz (Germany)

Highlights

Key results

Financial

Operational

Investments

1.3. Segment reporting non-regulated activities & Nemo Link

Highlights

Key results

2. Statement on the true and fair view of the condensed consolidated interim financial statements and the fair overview of the interim management report

3. Condensed consolidated interim financial statements

Condensed consolidated statement of financial position

Condensed consolidated statement of profit or loss

Condensed consolidated statement of profit or loss and other comprehensive income

Condensed consolidated statement of changes in equity

Condensed consolidated statement of cash flows

4. Notes to the condensed consolidated interim financial statements

1. General information

2. Basis for preparation and changes to the Group's accounting policies

a. Basis for preparation

b. New standards, interpretations and amendments adopted by the Group

c. Standards issued but not yet effective

3. Use of estimates and judgements

4. Subsidiaries, joint ventures and associates

a. Group structure

5. Segment reconciliation

6. Dividends

7. Acquisitions and disposals of PPE

8. Current assets – Trade and other receivables

9. Loans and borrowings

10. Financial instruments

11. Deferred tax liabilities

12. Income tax expense

13. Settlement mechanism (regulatory framework)

14. Related parties

Controlling entities

Transactions with key management personnel

Transactions with joint ventures and associated companies

Details of transactions with joint ventures and associated companies are shown below.

Transactions with other related parties

15. Seasonal fluctuations

16. Events after the reporting date

17. Regulatory framework

Regulatory framework in Belgium

Tariff setting – update period 2020-2023

TARIFF REGULATIONS

TARIFF REGULATIONS APPLYING IN BELGIUM

Fair remuneration

Non-controllable costs and revenues

Controllable costs and revenues

Influenceable costs

Other incentives

Regulatory framework for the Modular Offshore Grid

Regulatory deferral account: deviations from budgeted values

Cost and revenue allocation between regulated and non-regulated activities

Public service obligations

Regulatory framework in Germany

Regulatory framework for the Nemo Link interconnector

5. The report of the joint statutory auditors and their review of the condensed consolidated interim financial information

6. Glossary

Adjusted items

Adjusted items relate to:

Adjusted EBIT

Adjusted net profit

CAPEX (Capital Expenditures)

EBIT

Elia Group NV/SA Interim / Quarterly Report 2020