Cez As · PSECZ:CEZ

Cez As — Q1 2020 Earnings Presentation

39 slides from Cez As's earnings presentation, May 12, 2020

  1. Slide 1: Presentation on CEZ Group Financial Results in Q1 2020

    PRESENTATION ON CEZ GROUP FINANCIAL RESULTS IN Q1 2020 NONAUDITED CONSOLIDATED RESULTS PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) May 12, 2020

  2. Slide 2: Contents

    CONTENTS Financial Highlights and Selected Events Financial Performance of Business Segments Annual Outlook 1

  3. Slide 3: CEZ Group Financial and Operating Results

    CEZ GROUP FINANCIAL AND OPERATING RESULTS (CZK bn) Q1 2019 Q1 2020 Change % Revenues 51.8 57.0 +5.2 +10% EBITDA 21.3 25.9 +4.6 +22% EBIT 13.8 18.8 +5.0 +36% Net income 9.9 14.2 +4.2 +43% Net income adjusted * 10.4 13.9 +3.6 +34% Operating CF 19.7 13.2 -6.5 -33% CAPEX 4.6 4.4 -0.2 -5% Q1 2019 Q1 2020

  4. Slide 4: Year-on-Year Change in EBITDA by Segment

    YEAR-ON-YEAR CHANGE IN EBITDA BY SEGMENT Main causes of year-on-year change in Q1 EBITDA:  Higher realization prices of generated electricity, including the effect of hedges in Czechia and commodity trading (CZK +3.9 bn)  Additional profit (overhedge) from German hedges for generation supplies in

  5. Slide 5: Other Income (Expenses)

    OTHER INCOME (EXPENSES) (CZK bn) Q1 2019 Q1 2020 Change % EBITDA 21.3 25.9 +4.6 +22% Depreciation, amortization and impairments* -7.5 -7.1 +0.4 +6% Other income (expenses) -1.6 -1.6 -0.0 -2% Interest income (expenses) -1.3 -1.2 +0.0 +1% Interest on nuclear and other provisions -0.5 -0.5 -0.0 -5% Inc

  6. Slide 6: COVID-19: Measures to Eliminate Risks for and Impacts on Key Activities and Employees

    COVID-19: MEASURES TO ELIMINATE RISKS FOR AND IMPACTS ON KEY ACTIVITIES AND EMPLOYEES ČEZ took adequate measures in time to be able to supply electricity under any circumstances. A number of measures were taken at operating premises in Czechia and abroad, which are coordinated in collaboration with

  7. Slide 7: COVID-19: CEZ Group Is Helping Affected Customers, Citizens, and Others

    COVID-19: CEZ GROUP IS HELPING AFFECTED CUSTOMERS, CITIZENS, AND OTHERS CEZ Group Companies Are Helping Their Customers  ČEZ Prodej has allowed households to postpone their payments for up to three months since March. Almost 3,400 customers have already taken advantage of ČEZ Prodej’s help, decreas

  8. Slide 8: Debt Position and Structure: Strong Liquidity Position

    DEBT POSITION AND STRUCTURE CEZ GROUP MAINTAINS A STRONG LIQUIDITY POSITION Debt Level Bond Maturity Profile (as at Mar 31, 2020) As at As at CZK bn 25 Mar 31, 2019 Mar 31, 2020 Debt and loans CZK bn 156.0 186.4 20 Cash and fin. assets* CZK bn 12.1 18.5 15 Net debt CZK bn 143.9 167.9 10 Net debt/EBI

  9. Slide 9: Board to Propose Dividend of CZK 34 per Share

    ČEZ BOARD OF DIRECTORS TO PROPOSE SHAREHOLDERS’ MEETING A DIVIDEND OF CZK 34 PER SHARE (97% OF 2019 ADJUSTED NET INCOME) 99% 97% 90% 86%  The dividend for 2019 is proposed to be CZK 34 per share.  The proposal reflects the Company’s current dividend policy (80–100% payout ratio).  The proposal 33

  10. Slide 10: Developments in CEZ Group's Divesting Activities

    DEVELOPMENTS IN CEZ GROUP’S DIVESTING ACTIVITIES ROMANIA  A process to sell CEZ Group’s Romanian assets was officially launched on Sep 9, 2019. The subject of the sale includes but is not limited to the distribution and sales companies and the Fântânele and Cogealac wind parks.  The first stage wa

  11. Slide 11: Selected Events in the Past Quarter

    SELECTED EVENTS IN THE PAST QUARTER IN TRADITIONAL ELECTRICITY GENERATION  ČEZ is making environmental upgrades to its power plants to prepare them for new European BAT rules as much as possible. Modern technologies are being installed (e.g., activated carbon dosing technology will be applied to ge

  12. Slide 12: Selected Events: Lithium Extraction Opportunity at Cínovec

    SELECTED EVENTS IN THE PAST QUARTER ČEZ DECIDED TO KEEP EVALUATING LITHIUM EXTRACTION OPPORTUNITY AT CÍNOVEC  ČEZ and EMH agreed to make an amendment to their agreement, under which Severočeské doly will acquire a 51% stake in Geomet by raising its capital by EUR 29.1 m. Geomet holds priority right

  13. Slide 13: Czech Government Debated Agreements for EDU II New Nuclear Power Plant

    CZECH GOVERNMENT DEBATED COOPERATION AGREEMENTS FOR THE PREPARATION OF A PROJECT FOR THE “EDU II NEW NUCLEAR POWER PLANT” At its meeting held on Apr 27, 2020, the Czech government debated and approved a plan to enter into two agreements with ČEZ that will regulate general terms and conditions for th

  14. Slide 14: Contents

    CONTENTS Financial Highlights and Selected Events Financial Performance of Business Segments Annual Outlook 13

  15. Slide 15: Segment: Generation—Traditional Energy

    SEGMENT: GENERATION—TRADITIONAL ENERGY EBITDA (CZK bn) Q1 2019 Q1 2020 Change % Czechia 11.7 14.6 +3.0 +26% Poland 0.3 0.3 -0.0 -0% Other states 0.0 0.0 -0.0 -60% Generation - traditional energy 12.0 15.0 +3.0 +25% Czechia (CZK +3.0 bn)  Higher realization prices of generated electricity, including

  16. Slide 16: Electricity Generation: Generation—Traditional Energy Segment

    ELECTRICITY GENERATION GENERATION—TRADITIONAL ENERGY SEGMENT Q1 2019 Q1 2020 Nuclear Power Plants (-5%) Nuclear Power Plants (-1%) − Extended outages at Dukovany power plant due to increased scope − Extended scope of operating inspections, inclusion of capital of inspection work projects, and grid e

  17. Slide 17: Segment: Generation—New Energy

    SEGMENT: GENERATION—NEW ENERGY EBITDA (CZK bn) Q1 2019 Q1 2020 Change % Czechia 0.4 0.4 -0.0 -4% Romania 0.6 0.8 +0.2 +40% Germany 0.2 0.2 +0.1 +28% Other states -0.0 -0.0 -0.0 -52% Generation - new energy 1.2 1.4 +0.3 +22% Romania (CZK +0.2 bn)  Primarily higher price and amount of generated elect

  18. Slide 18: Electricity Generation: New Energy & Sales Segments

    ELECTRICITY GENERATION GENERATION—NEW ENERGY & SALES SEGMENTS Q1 2019 Q1 2020 Germany (+17%) Germany (+16%) + Better weather conditions + Worse-than-average weather conditions in 2019 Czechia (+1%) Czechia (+3%) + Higher generation of CEZ Energo due to + Increase of generation of CEZ Energo increase

  19. Slide 19: Segment: Sales

    SEGMENT: SALES EBITDA (CZK bn) Q1 2019 Q1 2020 Change % Czechia 0.7 1.3 +0.6 +87% Germany 0.0 0.1 +0.1 +181% Romania -0.1 0.2 +0.3 - Bulgaria 0.0 0.2 +0.1 >200% Other states -0.0 0.0 +0.0 - Sales 0.7 1.8 +1.2 +169% Czechia (CZK +0.6 bn)  Higher margin on commodity sales (CZK +0.5 bn), primarily the

  20. Slide 20: ESCO Companies: Q1 Sales Increased by 21% Y-o-Y

    ESCO COMPANIES Q1 SALES INCREASED BY 21% Y-O-Y Lower sales outlook CZK bn CZK bn due to COVID-19 Q1 2019 Q1 2020 Germany (+25%) + Organic growth, primarily of En.plus and Elevion group Germany (+6%) + Effect of acquisition of Hermos (consolidated May 15, 2019) + Organic growth and effect of acquisit

  21. Slide 21: Segment: Distribution

    SEGMENT: DISTRIBUTION EBITDA (CZK bn) Q1 2019 Q1 2020 Change % Czechia 4.8 4.8 +0.0 +1% Romania 0.2 0.4 +0.2 +69% Bulgaria 0.3 0.6 +0.2 +71% Distribution 5.4 5.8 +0.4 +8% Czechia (CZK +0.0 bn)  Higher revenue from activities to ensure input power and connection (CZK +0.1 bn)  Higher fixed operatin

  22. Slide 22: Mining Segment, Support Services Segment

    MINING SEGMENT, SUPPORT SERVICES SEGMENT EBITDA (CZK bn) Q1 2019 Q1 2020 Change % Czechia 1.5 1.4 -0.2 -11% Mining 1.5 1.4 -0.2 -11% Czechia (CZK -0.2 bn)  Primarily decrease in revenue from sales of coal (CZK -0.1 bn), especially due to lower demand by customers outside CEZ Group EBITDA (CZK bn) Q

  23. Slide 23: Contents

    CONTENTS Financial Highlights and Selected Events Financial Performance of Business Segments Annual Outlook 22

  24. Slide 24: Hedging of Generation Revenues, 2021 Sold 65% at 46 EUR/MWh

    ČEZ CONTINUES HEDGING ITS GENERATION REVENUES, FOR 2021 SOLD 65% AT 46 EUR/MWH Forecast realization price of electricity generated in Czechia in 2020 (estimated at May 12, 2020):  Estimated average realization price of generated electricity is 44.9 EUR/MWh.  Estimated average acquisition price of

  25. Slide 25: COVID-19 Impact on 2020 Financial Performance Not Significant Thanks to Hedging

    COVID-19 PANDEMIC IMPACT ON 2020 FINANCIAL PERFORMANCE IS NOT ESTIMATED TO BE SIGNIFICANT THANKS TO HEDGING WE ESTIMATE THE TOTAL NEGATIVE IMPACT OF THE PANDEMIC ON CEZ GROUP’S EBITDA FOR THE WHOLE OF 2020 AT CZK 3 TO 4 BN. Generation—Traditional Energy Segment & Mining Segment  Decrease in commodi

  26. Slide 26: Adjusted Financial Outlook for 2020

    WE ADJUST THE FINANCIAL OUTLOOK FOR 2020, ESTIMATING EBITDA AT CZK 61 TO 64 BN, ADJUSTED NET INCOME AT CZK 19 TO 22 BN CZK bn EBITDA Selected reasons for change in financial outlook as 80 compared to outlook from Mar 17, 2020: 60.2 63 – 65 61 – 64  Negative impact of COVID-19 on the Generation— 60

  27. Slide 27: Expected Year-on-Year Change in EBITDA by Business Segment

    EXPECTED YEAR-ON-YEAR CHANGE IN EBITDA BY BUSINESS SEGMENT Mining (CZK -0.7 to -1.1 bn)  Lower sales of coal due to decreased generation by EBITDA 2019 60.2 ČEZ’s coal-fired power plants and due to decreased demand by customers outside CEZ Group (COVID-19) Mining 59.3 -0.9 Generation—Traditional En

  28. Slide 28: Annexes

    ANNEXES  Cash Flows  Capital Expenditure  Balance Sheet Overview  Electricity Consumption  Currency Risk Hedging  Market Developments  Electricity Procured and Sold  Definitions of Alternative Indicators according to ESMA 27

  29. Slide 29: Cash Flows

    CASH FLOWS Cash Flows from Operating Activities (CZK +13.2 bn)  Income after adjustments, incl. income tax (CZK +30.3 bn): income before taxes (CZK +17.2 bn); income tax paid (CZK -1.0 bn); interest paid, other than capitalized interest, and interest received (CZK -0.2 bn); adjustments for noncash

  30. Slide 30: Capital Expenditure Broken Down by Segment

    CAPITAL EXPENDITURE BROKEN DOWN BY SEGMENT CZK bn Q1 2019 Q1 2020 Generation—Traditional Energy 1.7 1.6 Of which: Nuclear fuel acquisition 0.9 0.6 Generation—New Energy 0.4 0.1 Mining 0.4 0.3 Distribution 1.8 2.2 Czechia 1.3 1.7 Romania 0.2 0.3 Bulgaria 0.3 0.3 Sales 0.2 0.2 Support Services* 0.1 0.

  31. Slide 31: Balance Sheet Overview

    BALANCE SHEET OVERVIEW Total property, plant and equipment decreased by CZK 1.5 bn Equity increased by CZK 18.2 bn  Property, plant, and equipment, gross, including construction work in progress CZK  Net income in the reporting period CZK +14.2 bn +6.9 bn; accumulated depreciation and impairments

  32. Slide 32: Electricity Consumption in the Distribution Area of ČEZ Distribuce

    ELECTRICITY CONSUMPTION IN THE DISTRIBUTION AREA OF ČEZ DISTRIBUCE Consumption in the Distribution Temperature- and Calendar-Adjusted Area of ČEZ Distribuce Consumption* TWh TWh Changes in consumption (-0.0%) by segment: 10.15 10.16 9.89 9.88  -1.2% large end-use customers  +2.9% residential custo

  33. Slide 33: Currency Hedges for Estimated Electricity Generation in 2021–2024

    CURRENCY HEDGES FOR ESTIMATED ELECTRICITY GENERATION IN 2021–2024 Currency Hedges for Estimated Supplies of Generated Electricity as at Mar 31, 2020 2021 2022 2023 2024 Total currency hedges 98% 94% 84% 76% (natural & transactional) as at Mar 31, 2020 83% 78% 77% 82% Of which, natural currency hedge

  34. Slide 34: Market Developments

    MARKET DEVELOPMENTS CZK Development of CEZ share price oo 600 EUR/t CO2 allowances / emission rights 40 500 30 | 400 4 20 4 300 “. ». »s »s © © »» @# 2 2 ~) C) 2 ) oO oO N N N N N * os o a“ o* ww wv os 8 % 9 N x nw wv os" —— forward 2021 EUR / MWh Electricity USD /t Coal and gas EUR/MWh 60 105 70 50

  35. Slide 35: Electricity Balance (GWh)

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  36. Slide 36: Electricity Balance by Segment

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  37. Slide 37: Electricity Balance by Country

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  38. Slide 38: Methods Used to Calculate Indicators Unspecified in IFRS

    Methods Used to Calculate Indicators Unspecified in IFRS In accordance with ESMA guidelines, ČEZ provides detailed information on indicators that are not reported as standard in IFRS financial reporting framework or the components of which are not directly available from standardized statements (fro

  39. Slide 39: Components of Alternative Indicators

    Most of the components used in the calculation of individual indicators are directly shown in financial statements. The components of calculations that are not included in the financial statements are usually shown directly in a company’s books and are defined as follows: Highly Liquid Financial Ass

ČEZ Group — Q1 2020 Earnings Presentation on 6ix