Elia (AO) | Buy | Q1-26 update: guidance confirmed

Research evidence excerpt

Elia (AO) | Buy | Q1-26 update: guidance confirmed

Elia Buy | Target Price: EUR170.00

Company description Management

The Elia Group is a company that comprises two different transmission system Bernard Gustin - CEO

operators (TSO): Elia Transmission in Belgium and 50Hertz Transmission in Marco Nix - CFO

Germany (one of the four operational TSOs in north-east Germany). It operates in Key shareholders

fully regulated markets, supplying electricity to 30m end-users through its Free float 48.00%

18,600km of high-voltage lines. It is also involved in interconnection activities NextGRid Holding/Publi-T 45.21%

such as NEMO link (UK and Belgium), and ALEGrO (Belgium & Germany). Katoen Natie 9.28%

Atlas Infrastructure Partners 5.75%

Investment case Valuation methodology

The Elia Group is a pure transmission network operator. It is the SOP model with each segment having its own DCF model.

sole electricity transmission operator (TSO) in Belgium and one 2.0% inflation and a 5.5% WACC applied both to Elia Belgium

of the four TSOs in Germany. and 50Hertz (Germany).

Operating under a fully regulated profile, its expected combined Debt, provisions, and financial assets at book value.

regulated asset base (RAB) growth should pave the way for Risks to our rating

earnings growth in the coming years. Tightening of regulatory returns, conditions, and debt markets.

Elia benefits from good regulatory visibility once a framework Major deviations in asset development programmes and project

has been set with exposure to two mature markets, with completion expectations.

regulatory models in both Germany and Belgium starting from Drastic interest rate movements, with a lag on regulatory

2024 and going up to 2027/28. adjustments.

Catalysts

Regulatory changes in both Belgium and Germany.