CEZ As · PSECZ:CEZ

CEZ As — Q3 2021 Earnings Presentation

39 slides from CEZ As's earnings presentation, Nov 9, 2021

  1. Slide 1: Presentation on CEZ Group Financial Results in Q3 2021

    PRESENTATION ON CEZ GROUP FINANCIAL RESULTS IN Q3 2021 NONAUDITED CONSOLIDATED RESULTS PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) NOVEMBER 09, 2021

  2. Slide 2: Contents

    CONTENTS Summary Results and Selected Events Performance of the Generation and Mining Segments Performance of the Distribution and Sales Segments 2

  3. Slide 3: Financial Results and Selected Events

    FINANCIAL RESULTS AND SELECTED EVENTS Main Financial Results for Q1-Q3  Operating revenues amounted to CZK 156.0 bn; for Q3, CZK 47.7 bn.  EBITDA amounted to CZK 47.5 bn; for Q3, CZK 15.9 bn.  Net income amounted to CZK 6.7 bn; for Q3, CZK 5.1 bn.  Adjusted net income* amounted to CZK 16.9 bn; f

  4. Slide 4: Financial and Operating Results

    FINANCIAL AND OPERATING RESULTS Q1–Q3/2020 Q1–Q3/2021 Difference % Operating revenues CZK bn 155.5 156.0 +0.4 +0% EBITDA CZK bn 50.9 47.5 -3.4 -7% of which: Existing assets (i.e. excluding divested assets*) CZK bn 45.2 44.9 -0.3 -1% EBIT CZK bn 23.2 13.8 -9.4 -40% Net income CZK bn 13.6 6.7 -6.9 -51

  5. Slide 5: Main Causes of Year-on-Year Change in EBITDA

    MAIN CAUSES OF YEAR-ON-YEAR CHANGE IN EBITDA CZK bn 55 50.9 47.5 50 5.7 +1.6 Divested 45 +0.8 +0.7 2.6 assets 40 -1.9 -0.4 -1.1 45.2 CZK -0.3 bn 44.9 Existing 35 EXISTING ASSETS -0.7 % assets 30 Q1–Q3/2020 Generating Trading Specific MINING DISTRIBUTION SALES Q1–Q3/2021 facilities effects GENERATION

  6. Slide 6: Main Causes of Year-on-Year Change in Net Income

    MAIN CAUSES OF YEAR-ON-YEAR CHANGE IN NET INCOME (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Difference % EBITDA 50.9 47.5 -3.4 -7% Depreciation and amortization -22.1 -21.8 +0.3 +1% Significant event after Q3 2021: Impairments* -5.7 -11.9 -6.2 -110%  On Nov 2, 2021, ČEZ, a. s., received the amount of CZK 1,484

  7. Slide 7: Market Prices of Electricity for 2022 Have Increased Sharply

    MARKET PRICES OF ELECTRICITY FOR 2022 HAVE INCREASED SHARPLY DUE TO RISING GAS PRICES AND DUE TO THE EU'S CLIMATE AMBITION The increase in electricity prices in H1 Evolution of electricity, emission allowance, and gas market prices followed the development of emission EEX: Cal22 BL (EUR/MWh); EUA fo

  8. Slide 8: Hedging of Generation Market Risk for 2022

    HEDGING OF GENERATION MARKET RISK FOR 2022 37 TWH OF ELECTRICITY SOLD AT 54.1 EUR/MWH, 11.4 M T EUA PURCHASED AT 31.1 EUR/T Electricity sold for 2022–2025 in TWh (as at Sep 30) Contracted emission allowances for 2022–2025* in m t (as at Sep 30) 37.3 Hedged volume from Jul 1, 2021, to Sep 30, 2021 He

  9. Slide 9: Progressing in Meeting Decarbonization Targets

    THE GROUP IS PROGRESSING IN MEETING ITS DECARBONIZATION TARGETS. EMISSION INTENSITY HAS DECREASED Y-O-Y BY 12%. Emission intensity per electricity generated (t CO2/MWhe) CEZ Group's emission Current emissions of a 0.60 0.60 intensity of 0.28 t CO2/MWhe marginal power plant in 0.50 Germany 0.50 corre

  10. Slide 10: Selected Events in the Past Quarter

    SELECTED EVENTS IN THE PAST QUARTER We increase capacity and ensure safe operation of nuclear power plants  Westinghouse will upgrade the control and monitoring systems of Temelín NPP under a contract concluded on Sep 13, 2021. In terms of technical complexity, this is one of the most complex contr

  11. Slide 11: Increasing the Financial Outlook for 2021

    INCREASING THE FINANCIAL OUTLOOK FOR THE WHOLE YEAR 2021: EBITDA CZK 59-60 BN & NET INCOME CZK 19-21 BN Selected reasons for adjusting the financial outlook EBITDA as compared to the outlook from Aug 10, 2021: CZK bn  Higher profit from commodity trading 57–60 58–60 59–60  Interest related to the

  12. Slide 12: Contents

    CONTENTS Summary Results and Selected Events Performance of the Generation and Mining Segments Performance of the Distribution and Sales Segments 12

  13. Slide 13: Summary Results of the Generation and Mining Segments

    SUMMARY RESULTS OF THE GENERATION AND MINING SEGMENTS Q1–Q3/ Q1–Q3/ Q1–Q3/ Q1–Q3/ GENERATION segment (CZK bn) 2020 2021 Difference % MINING segment (CZK bn) 2020 2021 Difference % EBITDA—Existing assets 26.9 23.5 -3.4 -13% EBITDA—Existing assets 2.4 3.1 +0.8 +32% EBITDA—Divested assets* 1.8 0.6 -1.2

  14. Slide 14: Generation Segment EBITDA—Existing Assets

    GENERATION SEGMENT EBITDA—EXISTING ASSETS EBITDA (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Difference % Q3/2020 Q3/2021 Difference % Zero-emission Generating Facilities 19.5 20.1 +0.6 +3% 6.4 6.7 +0.3 +4% of which: nuclear 15.8 16.1 +0.3 +2% 5.0 5.2 +0.2 +4% of which: renewables 3.7 4.0 +0.3 +8% 1.4 1.5 +0.1 +

  15. Slide 15: Electricity Generation from Nuclear Facilities and Renewables

    ELECTRICITY GENERATION FROM NUCLEAR FACILITIES AND RENEWABLES—EXISTING ASSETS Q1–Q3 (TWh) Outlook (TWh) 25.0 -1% 24.8 34.0 +1% 34.4 2.9 2.8 4.0 3.8 -1% -4% Renewables 22.1 -0% 22.0 30.0 +2% 30.5 Nuclear 1-9/2020 1-9/2021 2020 2021 E Renewables (-1%) hydro, wind, solar, biomass, biogas Renewables (-4

  16. Slide 16: Fossil-Fuel Electricity Generation Existing Assets

    FOSSIL-FUEL ELECTRICITY GENERATION EXISTING ASSETS Outlook (TWh) Q1–Q3 (TWh) 18.1 25.6 -18% -18% 3.9 3.0 14.8 20.9 Generation 2.0 -20% 1.4 3.1 -19% 2.5 from natural gas 1.8 1.3 Generation from -8% -7% coal in Poland 13.7 19.7 11.1 16.0 -19% Generation -19% from coal in Czechia Q1–Q3/2020 1-9/2020 Q1

  17. Slide 17: Mining Segment EBITDA Existing Assets

    MINING SEGMENT EBITDA EXISTING ASSETS EBITDA (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Difference % Q3/2020 Q3/2021 Difference % Czechia 2.4 3.1 +0.8 +32% 0.6 1.0 +0.4 +62% Year-on-year effects in Q1–Q3: Year-on-year effects in Q3: Czechia (CZK +0.8 bn) Czechia (CZK +0.4 bn)  Higher revenues related to higher

  18. Slide 18: Contents

    CONTENTS Summary Results and Selected Events Performance of the Generation and Mining Segments Performance of the Distribution and Sales Segments 18

  19. Slide 19: Summary Results of the Distribution and Sales Segments

    SUMMARY RESULTS OF THE DISTRIBUTION AND SALES SEGMENTS DISTRIBUTION segment SALES segment EBITDA (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Diff % EBITDA (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Diff % Existing assets 12.9 13.6 +0.7 +6% Existing assets 3.0 4.6 +1.6 +54% Divested assets* 3.1 1.7 -1.5 -47% Divested assets*

  20. Slide 20: Distribution Segment EBITDA Existing Assets

    DISTRIBUTION SEGMENT EBITDA EXISTING ASSETS EBITDA (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Difference % Q3/2020 Q3/2021 Difference % Czechia 12.9 13.6 +0.7 +6% 4.0 4.0 +0.0 +0% Year-on-year effects in Q1–Q3: Year-on-year effects in Q3: Czechia (CZK +0.7 bn) Czechia (CZK +0.0 bn)  Higher gross margin on the

  21. Slide 21: Electricity Consumption in ČEZ Distribuce Area

    ELECTRICITY CONSUMPTION IN THE DISTRIBUTION AREA OF ČEZ DISTRIBUCE INCREASED ABOVE THE 2019 LEVEL Electricity distribution (TWh) Temperature- and calendar-adjusted electricity consumption (TWh) 26.5 -5% +7% 27.0 25.3 -5% +5% 3.5 3.4 Retail customers -2% 3.4 +0% (businesses) 6.9 8.1 7.2 +4% +12% Resi

  22. Slide 22: Sales Segment EBITDA—Existing Assets

    SALES SEGMENT EBITDA—EXISTING ASSETS EBITDA (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Difference % Q3/2020 Q3/2021 Difference % Retail segment—ČEZ Prodej 2.4 3.3 +0.9 +36% 0.6 0.7 +0.1 +15% B2B segment—of which ESCO companies: 0.6 1.1 +0.5 +96% 0.0 0.2 +0.2 >200% Energy Services—Czechia and Slovakia 0.4 0.4 -0

  23. Slide 23: Volume of Electricity and Gas Sold, and Number of Customers

    VOLUME OF ELECTRICITY AND GAS SOLD, AND THE NUMBER OF CUSTOMERS CZECHIA—RETAIL  Electricity and gas supplies Electricity and gas supply increased by Number of customers increased mainly due to the colder 13% year-on-year stable year-on-year winter in 2021. (TWh) (service points in thousands)  In a

  24. Slide 24: Revenue from Energy Service Sales Existing Assets

    REVENUE FROM ENERGY SERVICE SALES EXISTING ASSETS Revenues in Q1–Q3 (CZK bn) Revenue outlook (CZK bn) 16.8 +10% 24.7 16.1 +4% 22.5 Germany (Elevion Group) +8% +8% 14.1 9.5 10.3 13.0 Czechia and +9% +1% Slovakia (ČEZ 4.4 ESCO group) 7.0 4.4 6.4 +20% 2.2 -5% 2.1 Other countries* 3.1 3.7 1-9/2020 1-9/2

  25. Slide 25: Annexes

    ANNEXES Financial Performance and Investments  Operating revenues by segment and country  EBITDA for Q1–Q3 by segment and country  Net income for Q3  Investments in fixed assets (CAPEX)  Expected year-on-year change in EBITDA incl. change by segment Development of Cash Flow, Debt, and Financial

  26. Slide 26: Operating Revenues for Q1–Q3 by Segment and Country

    OPERATING REVENUES FOR Q1–Q3—BY SEGMENT AND COUNTRY CEZ GROUP GENERATION (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Difference % Operating revenues for Q1–Q3 2021 Czechia 72.2 79.7 +7.5 +10% Germany 0.5 0.4 -0.1 -22% DIVESTED Poland 4.7 4.1 -0.7 -14% ASSETS Romania 2.8 1.2 -1.7 -58% Romania 3 % Czechia 81 % Oth

  27. Slide 27: EBITDA for Q1–Q3 by Segment and Country

    EBITDA FOR Q1–Q3 BY SEGMENT AND COUNTRY CEZ GROUP GENERATION (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Diff % DISTRIBUTION (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Diff % Czechia 26.2 23.2 -3.0 -11% Czechia 12.9 13.6 +0.7 +6% Germany 0.4 0.3 -0.1 -31% Romania 1.6 0.5 -1.1 -66% Poland 0.4 0.2 -0.2 -57% Bulgaria 1.5 1.1 -

  28. Slide 28: Net Income for Q3—CEZ Group

    NET INCOME FOR Q3—CEZ GROUP (CZK bn) Q3/2020 Q3/2021 Difference % EBITDA 12.2 15.9 +3.7 +30% Depreciation and amortization -7.2 -7.9 -0.7 -10% Impairments* -3.8 -0.4 +3.5 +91% Other income (expenses) -2.0 -1.1 +0.9 +45% Interest income (expenses) -1.1 -0.9 +0.2 +15% Other -0.9 -0.2 +0.7 +81% Income

  29. Slide 29: Investment in Fixed Assets (CAPEX)

    INVESTMENT IN FIXED ASSETS (CAPEX) CEZ GROUP CAPEX (CZK bn) Q1–Q3/2020 Q1–Q3/2021 Q3/2020 Q3/2021 GENERATION Segment 6.3 7.0 1.9 3.5 Of which: Nuclear fuel acquisition 1.3 2.0 0.2 0.8 MINING Segment 1.5 1.5 0.6 0.7 DISTRIBUTION Segment 8.1 8.7 3.1 3.1 SALES Segment 0.9 1.0 0.4 0.4 Existing Assets—TO

  30. Slide 30: Estimated Year-on-Year Change in EBITDA by Business Segment

    ESTIMATED YEAR-ON-YEAR CHANGE IN EBITDA BY BUSINESS SEGMENT—EXISTING ASSETS (CZK bn) EXISTING ASSETS (CEZ Group excluding divested assets) EBITDA 2020 EBITDA 2020 57.9 GENERATION Segment Trading Trading -1.0 to 0.0 — Lower gain from commodity trading Renewables GENERATION Renewables +0.3 to +0.7 • H

  31. Slide 31: Credit Facilities and Debt Structure as at Sep 30

    CREDIT FACILITIES AND DEBT STRUCTURE AS AT SEP 30 CEZ GROUP Utilization of Short-Term Lines and Available Committed Bond Maturity Profile (as at Sep 30, 2021) Credit Facilities (as at Sep 30, 2021) CZK bn 25 EUR 541 m duly repaid on Oct 19, 2021 Drawn 20 Undrawn, Committed Commited CZK 8.6 bn 15 CZK

  32. Slide 32: Net Debt Decreased by Almost CZK 14 bn in Q1–Q3

    NET DEBT DECREASED BY ALMOST CZK 14 BN IN Q1–Q3 CEZ GROUP Net debt Net debt as at Other as at December 31, Interest, operating Acquisition of Divestments/ September 30, 2020 EBITDA income tax effects fixed assets acquisitions Dividends Other 2021 Decrease in net debt by CZK 13.7 bn 143.5 129.8 +47.5

  33. Slide 33: Currency and Commodity Hedging of Electricity Generation 2022–2025

    CURRENCY AND COMMODITY HEDGING OF ELECTRICITY GENERATION IN CZECHIA FOR 2022–2025 Currency Hedges of Expected Revenues from Electricity Generation in Czechia (as at Sep 30) 2022 2023 2024 2025 Total currency hedges (natural & transactional) as at Sep 30, 2021 95% 95% 95% 95% Natural currency hedging

  34. Slide 34: Market Developments from Jan 1, 2020, to Sep 30, 2021

    MARKET DEVELOPMENTS FROM JAN 1, 2020, TO SEP 30, 2021 CO2 emissions allowances CEZ shares CZK EUR / t (to be delivered in December 2022) 900 70 700 50 500 30 10 300 Electricity Coal and gas EUR / MWh (BL to be delivered in 2022 and 2023) USD / t EUR/MWh 150 240 220 120 185 165 90 130 110 60 75 55 30

  35. Slide 35: Electricity Balance (GWh)

    Electricity balance (GWh) Index Q1 - Q3 2020 Q1 - Q3 2021 2021/2020 Electricity procured 39,658 36,084 -9% Generated in-house (gross) 44,075 40,063 -9% In-house and other consumption, including pumping in pumped-storage plants -4,417 -3,979 -10% Sold to end customers -24,324 -21,158 -13% Sold in the

  36. Slide 36: Electricity Balance (GWh) by Segment

    Electricity balance (GWh) by segment Q1 - Q3 2021 Generation Distribution Sale Eliminations CEZ Group GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- Electricity procured 35,840 -9% 0 - 244 +9% 0 - 36,084 -9% Generated in-house (gross) 39,808 -9% 0 - 255 +10% 0 - 40,063 -9% In-house and other consumption, i

  37. Slide 37: Electricity Balance (GWh) by Country

    Electricity balance (GWh) by country Q1 - Q3 2021 Czechia Poland Romania Bulgaria Germany Others Eliminations CEZ Group GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- Electricity procured 34,236 -7% 1,300 -17% 388 -60% 3 -42% 157 -24% 0 - 0 - 36,084 -9% Generated in-house (gross) 37

  38. Slide 38: Definitions and Calculations of Indicators Unspecified in IFRS

    Definitions and Calculations of 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 financial statements a

  39. Slide 39: Components Used in Calculation of 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 calculated as follows: Highly Liquid Financial

ČEZ Group — Q3 2021 Earnings Presentation on 6ix