ANNEX 1: REPORT ON THE COMPANY S BUSINESS OPERATIONS AND ASSETS OF ČEZ, A. S. FOR Prague, June 12, 2015

Transcription

1 ANNEX 1: REPORT ON THE COMPANY S BUSINESS OPERATIONS AND ASSETS OF ČEZ, A. S. FOR Prague, June 12, 2015

2 - SUCCESSFUL YEAR DESPITE ONGOING UNCERTAINTY IN EUROPE S ENERGY SECTOR EBITDA CZK 72.5bn Adjusted net income CZK 29.5bn Market capitalization grew by CZK 35.3bn (to CZK 315.7bn) 130% ČEZ, a. s. Share Prices in 120% 110% 100% 90% CZK 525 CZK 591 ČEZ, a. s % PX Index 4.7% 80% Bloomberg Utilities index PX Index ČEZ 1 The values of adjusted net income do not include extraordinary effects that are generally unrelated to ordinary financial performance in a given year (such as fixed asset impairments and goodwill amortization, extraordinary profit/loss from sale of assets or subsidiaries, or other extraordinary effects).

3 CEZ GROUP S UPDATED STRATEGY IS BUILT ON THREE PILLARS I II III Be among the best in the operation of conventional power facilities and proactively respond to the challenges of the 21st century We want to operate power assets as efficiently as possible from the point of view of both shareholders and customers We want to pro-actively react now to the power sector s future with a large proportion of decentralized and zero-emission production and diminishing differences between producers and consumers Offer customers a wide range of products and services addressing their energy needs We want to offer our customers partnership, expertise, tools, and financing to meet their energy needs our customers are much more active in the control of their electricity and gas consumption and use in general as well as in their own production We want to complement this with additional products that have synergy with electricity and gas sales Strengthen and consolidate our position in Central Europe We want to maintain our position among the top 10 energy companies in Europe and take advantage of major synergies when operating our assets and offering new products and serving customers We focus our attention on regions and countries that are close to both ČEZ and the Czech Republic in terms of energy markets, economy, and politics and culture; however, undisputed profitability remains the key indicator 2

4 ELECTRICITY PRICES DOWN BY 10% TO 33 EUR/MWH PRIMARILY DUE TO DROP IN HARD COAL PRICES; PRICES OF ALLOWANCES UP TO 7.5 EUR/T Prices of Electricity (EUR/MWh) and Emission Allowances (EUR/t) Jan 2, Feb 2, Mar 2, Apr 2, May 2, Jun 2, Aul2, Aug 2, Sep 2, Oct 2, Nov 2, Dec 2, EUR/MWh EUR/t ---EE 2016 (BL) ---EUA

5 WE EXCEEDED THE INITIAL TARGET BY CZK 2 BILLION DESPITE ADVERSE WEATHER AND REGULATION CZK billions CZK billions EBITDA E Actual ADJUSTED NET INCOME Selected positive effects: Settlement agreement with Albania Cuts in fixed operating costs Claim set-off with Bulgarian state-owned energy company NEK Payment of debts by Romanian state railways and postal service Selected negative effects: Extremely warm and dry winter in the Czech Rep. Reduced support for wind parks in Romania Postponed completion of coal-fired plant renovations and constructions in the Czech Rep. 0 E Actual The values of adjusted net income do not include extraordinary effects that are generally unrelated to ordinary financial performance in a given year (such as fixed asset impairments and goodwill amortization, extraordinary profit/loss from sale of assets or subsidiaries, or other extraordinary effects). 4

6 CEZ GROUP CASH FLOWS CZK billions Investing activities Financing activities, including net effect of currency translation in cash Operating activities 5

7 CEZ GROUP ASSETS AND LIABILITIES AT DECEMBER Total Assets Property, plant and equipment, net Nuclear fuel, net Construction work in progress Other non-current assets Current assets 19.2 Total Equity and Liabilities Equity Long-term liabilities Deferred tax liability Short-term liabilities

8 CEZ GROUP FINANCIAL RESULTS Key data Unit Year 2013 Year 14/13 change (%) Operating revenues CZK millions 216, , Operating expenses CZK millions 171, , EBITDA CZK millions 81,994 72, EBIT CZK millions 45,690 36, Net income CZK millions 35,207 22, Net income - adjusted CZK millions 38,178 29, Total assets CZK millions 640, , Long-term tangible and intangible assets* CZK millions 446, , ROE, net % ROA, net % ROIC % * Including nuclear fuel

9 CONTRIBUTION BY SEGMENT TO EBITDA CZK billions Power Production & Distribution & Sales Trading CE CE* Mining CE* Other CE* Power Production & Distribution & Sales Trading SEE** SEE** Other SEE** EBITDA % vs Change in EBITDA 15% 1% 18% 13% 70% +30% 46% 12% CZK billions CE* = Central Europe (esp. Czech Rep., Slovakia, Poland) Note: The Other SEE value of CZK 0.4bn includes SEE** = Southeast Europe (esp. Bulgaria, Romania, Albania) eliminations amounting to CZK 0.3bn. Year-on-year changes do not include eliminations.

10 ČEZ, A. S. FINANCIAL RESULTS Key data Unit /13 change (%) Operating revenues CZK millions 101,644 84, Operating expenses CZK millions 81,549 68, EBITDA CZK millions 35,914 29, EBIT CZK millions 20,095 15, Net income CZK millions 26,373 20, Total assets CZK millions 549, , Long-term tangible and intangible assets* CZK millions 234, , ROE, net % ROA, net % * Including nuclear fuel

11 PROPOSED ČEZ, A. S. DIVIDEND FOR 80% 70% 60% 50% 40% 30% 20% 10% 0% 73% 59% 56% 56% 55% 54% 52% 49% 50% 40% 41% 43% 32% 16% 16% The dividend divided for for is proposed to be CZK 40/share. xx/share. The proposal reflects the updated dividend policy and corresponds to 73% of CEZ Group s consolidated net income in adjusted for extraordinary effects. Dividend per share in CZK Payout ratio 10 The payout ratio specifies the ratio of dividends to CEZ Group s consolidated net income in a given year adjusted for extraordinary effects.

12 INVESTMENTS IN FIXED ASSETS (CAPEX) Total: CZK 34.4bn () Electricity distribution Conventional power plants Czech Rep.: Construction of a new supercritical facility in Ledvice Počerady CCGT plant Comprehensive renovation of Prunéřov Power Plant Other investments Nuclear facilities: Temelín NPP Undertaking projects to meet the requirements of the National Action Plan for Safety Enhancement Dukovany NPP Projects related to planned extension of operation beyond 2015 and projects to meet the requirements of the National Action Plan for Safety Enhancement Temelín NNPP Continued work with the aim to preserve and increase value and prepare the project for possible alternative investing and financing arrangements Other 2.5 Mining Renovating and upgrading equipment and dressing and crushing operations, dust reduction Dukovany NNPP Preparation of supporting documents for the initiation of the EIA process and a technical description of the site for future tender documents 11 NPP Nuclear Power Plant, NNPP New Nuclear Power Plant, EIA Environmental Impact Assessment

13 CEZ GROUP S ELECTRICITY GENERATION TWh Total (7.0%) 4.7 (46.9%) (6.5%) (45.5%) (6.5%) (47.7%) (46.1%) (48.0%) (45.8%) Hydro, wind, biomass, and solar Coal, gas, and CCGT Nuclear E2015* 12

14 CEZ GROUP IN EUROPE CEZ Group s Presence in the Energy Sector by Territory 13 CEZ Group was also engaged in heat generation in Hungary until October 31,.

15 IN 2015, WE EXPECT EBITDA OF CZK 70.0BN AND ADJUSTED NET INCOME OF CZK 27.0BN EBITDA CZK billions % E2015* ADJUSTED NET INCOME CZK billions % E2015* The values of adjusted net income do not include extraordinary effects that are generally unrelated to ordinary financial performance in a given year (such as fixed asset impairments and goodwill amortization, extraordinary profit/loss from sale of assets or subsidiaries, or other extraordinary effects). 14 * Based on facts known at March 3, 2015