The target we have set ourselves is to grow the value of the business by 15% by 2007. This means that we want to grow our business and operate more profitably while ensuring we continue to work in a responsible manner.

In 2006 we were the number one distributor of electricity (by volume of electricity distributed and by regulated asset value) and number five electricity supplier (by number of customer product accounts) in the United Kingdom. For large industrial and commercial customers we were the largest supplier of electricity (by units of electricity sold).

We are also a major generator of electricity and one of the leading utilities in the UK for private asset and electrical distribution network projects (by amounts invested).

In 2006 we delivered electricity to more than 7.9 million homes and businesses in London and the East of England and South East, through three networks totalling 175,000 km of power line. We sold 53.5 TWh of electricity and 25.8 TWh of gas in the competitive market.

At the end of 2006 we had 5.5 million customers including residential customers, small and medium enterprises (SMEs) and major business account holders and a generation capacity of 4.8 GW. Our sales were £5,673 million and we employed a full time equivalent of 11,884 people.

Our financial results reflect a year of tough market conditions. Sales increased by 24.3%, which was mainly attributable to higher prices, and EBITDA dropped 3% to £865 million. Put simply, competition, high fuel prices and higher operating costs squeezed our EBITDA/sales margin from 19.5% in 2005 to 15.2% for last year.

Chief Executive Vincent de Rivaz said EDF Energy must reduce its operating costs. “We must raise our game. Our sales went up 24.3% but most of that was due to the increased prices passed through to customers.

To be a successful company we have to invest in new generation, win new customers and keep those we already have, as well as enhance our network effectiveness. And to fund our investment we need to improve our margins and this means we must also keep our operating costs under control. It is our profit margin and the returns we earn on the money invested in our business that determine the amount of investment we can afford to build our business.”