ESB ANNUAL REPORT AND FINANCIAL STATEMENTS 2018

ESB Head Office Two Gateway East Wall Road 3 D03 A995 T: +353 1 676 5831 E: [email protected] www.esb.ie Twitter: @ESBGroup LinkedIn: https://www.linkedin.com/company/esb YouTube: https://www.youtube.com/user/ESBVideo ABOUT ESB ESB was established in 1927 as a statutory body under the Electricity (Supply) Act 1927. With a holding of 95.4%, ESB is LEADING THE WAY majority owned by the Irish Government. The remaining 4.6% is held by the trustees of an Employee Share Ownership TO A BRIGHTER Plan. As a strong, diversified, vertically integrated utility, ESB operates across the FUTURE electricity market, from generation through transmission and distribution, to supply of customers, with an expanding presence ESB is making a stand for Ireland’s future, in Great Britain’s generation and supply a future powered by clean, sustainable markets. In addition, we extract further electricity. ESB is committed to leading value at certain points along this chain by supplying gas and using our networks to the transition to a reliable, affordable, carry fibre for telecommunications. ESB is low-carbon energy future, a future a leading Irish utility with a regulated asset that protects its customers and the base (RAB) of approximately €9.6 billion economy by maintaining the security and (comprising ESB Networks €7.9 billion and NIE Networks €1.7 billion), a 38% share affordability of energy. ESB is investing of generation in the all-island market and in low-carbon generation; it is expanding a significant supply business, supplying and enhancing the grid to accommodate electricity and gas to approximately 1.3 more distributed energy resources and million customers throughout the island The ESB Networks Dingle of Ireland. ESB will continue to grow the Project is preparing empowering its customers to take more scale of its generation, trading and supply control of their energy use. businesses so that it can compete within the network for the the all-islands competitive environment. future by facilitating ESB is focused on providing excellent customer service and maintaining its the electrification of financial strength. As at 31 December 2018, ESB Group employed over 7,800 people. heat and transport and deploying smart network technologies across the peninsula – thereby empowering customers to play their own role in a low-carbon energy future. 4 ESB Annual Report 2018 -Leading the Way to a Brighter Future ESB Annual Report 2018 5

KEY FACTS AND FIGURES Contents

Chapter 1 Strategy and Performance

Business Overview 9 operating profit* €’m EBITDA* €’m Chairman’s Statement 10 Chief Executive’s Review 12 ESB at a Glance 14 1,500 1,500 1,348 Highlights 15 1,324 1,301 1,276 1,200 1,200 1,175 Strategy, Business Model, Risk Report, AND Key Performance Indicators (KPIs) 16 Strategy 17 900 900 Business Model 22 635 597 552 Risk Report 24 600 490 600 455 Key Performance Indicators (KPIs) 36 300 300 Operating and financial review 39 0 0 Organisation Effectiveness Review 40 2017 2016 2015 2014 2018 2017 2016 2018 2015 2014 Executive Team 42 (€35 million) (€101 million) Market Structure and Operating Environment 2018 44 Financial Review 50 * Before exceptional items. See Financial Review page 50. Generation and Trading (GT) 56 ESB Networks 59 Electricity Networks (NIE Networks) 62 Total assets €’m Net Debt €’m Electric Ireland (part of Customer Solutions) 64 Engineering and Major Projects (E&MP) 67 Enterprise Services 68 5ggggh2njjkhj Responsible business report 71 4,975 13,304 13,157 12,973 Overview 72 15,000 12,907 5,000 4,915 4,639 12,294 4,377 4,524 Safety 72 12,000 4,000 People 74 Sustainability 76 9,000 3,000 Energy Usage in 2018 77 Corporate Social Responsibility (CSR) 78 6,000 2,000 Using our Profits in a Sustainable Way 80

3,000 1,000

0 0 2018 2017 2016 2015 2014 2018 2017 2016 2