Cez As · PSECZ:CEZ
Cez As — Q3 2022 Earnings Presentation
46 slides from Cez As's earnings presentation, Nov 10, 2022
Slide 1: Report on CEZ Group Financial Results for Q1–Q3 2022
Report on CEZ Group Financial Results for Q1–Q3 2022 Nonaudited consolidated results prepared in accordance with International Financial Reporting Standards (IFRS) November 10, 2022 www.cez.cz/en www.cez.cz 1
Slide 2: Agenda
Agenda Financial Highlights and Selected Events Generation and Mining Distribution and Sales www.cez.cz/en www.cez.cz 2
Slide 3: Highlights of Financial Results for Q1–Q3 2022 and Outlook for the Group for the full Year
Highlights of Financial Results for Q1–Q3 2022 and Outlook for the Group for the full Year Q3 2022 Financial highlights ▪ Operating revenues increased by 69% year-on-year to CZK 80.5 bn. ▪ EBITDA increased by 88% year-on-year to CZK 30.0 bn. ▪ Net income and Net income adjusted for extraordinary eff
Slide 4: Main causes of year-on-year change in EBITDA
Main causes of year-on-year change in EBITDA CZK bn 100 +1.8 +0.1 89.3 +43.4 80 -1.0 Divested 60 assets* 47.5 40 2.6 89.3 Existing 44.9 EXISTING +44,4 mld. Kč CZK +44.4 bn 20 +99% assets ASSETS +99 % 0 Q1–Q3 2021 GENERATION MINING DISTRIBUTION SALES Q1–Q3 2022 GENERATION Segment (CZK +43.4 bn): ▪ Im
Slide 5: Main Causes of Year-On-Year Change in Net Income
Main Causes of Year-On-Year Change in Net Income (CZK bn) Q1–Q3 2021 Q1–Q3 2022 Difference % EBITDA 47.5 89.3 +41.8 +88% Depreciation and amortization -21.8 -24.3 -2.5 -11% Impairments* -11.9 0.2 +12.1 - Other income and expenses -3.0 -1.9 +1.0 +35% Interest income (expenses) -2.9 -1.0 +1.9 +66% Oth
Slide 6: We increase the financial outlook for the whole year 2022
We increase the financial outlook for the whole year 2022: EBITDA CZK 115–125 bn, adjusted net income CZK 65–75 bn EBITDA (CZK bn) Main reasons for adjusting the financial outlook as compared to the outlook from Aug 9, 2022: + Income from commodity trading on foreign markets, including the use of th
Slide 7: Framework measures have been taken at EU level to curb excessive commodity price increases
Framework measures have been taken at EU level to curb excessive commodity price increases and stabilize energy markets. The initial package of measures was approved by the European Council in September. The specific solution is always primarily the responsibility of individual Member States. Revenu
Slide 8: Discussed solutions in Czechia for 2023—how end-use customers will be supported
Discussed solutions in Czechia for 2023—an illustrative diagram of how end-use customers will be supported and funding assumptions PRODUCERS sale of commodity sales commodities at market prices at market prices SUPPLIERS CONSUMERS OTHER COMPANIES electricity producers exceeding EXPOSED TO TAX Levy o
Slide 9: Discussed measures in the Czech Republic—Current assumptions for a solution
Discussed measures in the Czech Republic—Current assumptions for a solution whose specific parameters have not yet been defined/approved Price cap for electricity and gas sales with delivery in 2023 for households and small and medium-sized enterprises (SMEs): ▪ Maximum end price of electricity at C
Slide 10: Since Sep 8 ČEZ has been using the first European LNG terminal
Since Sep 8 ČEZ has been using the first European LNG terminal launched since the invasion of Ukraine and can provide 1/3 of the Czech annual gas consumption The terminal was built in a record 6 months ▪ Total LNG regasification capacity at 8 bn m3 gas per year ▪ The operator is the Dutch national c
Slide 11: Other selected Events in the Past Quarter of 2022
Other selected Events in the Past Quarter of 2022 Round 2 of the RES+ call for support for the construction of RES sources in Czechia from the Modernization Fund has been announced. In round 2 of the RES+ Call No. 2/2022 for PV plants above 1 MWp, for which the application deadline was Oct 31, 2022,
Slide 12: The strategic objectives of VISION 2030 and CEZ Group's measures
The strategic objectives of VISION 2030 and CEZ Group's measures are in line with the current national priority—Energy sovereignty of Czechia Strategic imperatives of the Czech Selected current measures and steps taken by ČEZ ▪ We are improving the safety and efficiency of nuclear power plants with
Slide 13: Development of margin deposits and indication of covering potential risk
Development of margin deposits and indication of covering potential risk of further commodity growth from current cash resources Development of margin deposits on exchanges and with counterparties due to current generation forward sales and lower contracted electricity price, EUA and gas prices comp
Slide 14: We are succeeding in improving our ESG score in line with VISION 2030
We are succeeding in improving our ESG score in line with the VISION 2030 targets. The goal is to rank among the top 20% of energy companies by 2023. Scale AAA to CCC 100 to 0 0 to 100 A+ to D- A to D- (best to worst) AA C+ 56 C C 50 C BBB 2020 2021 37.6 37.0 Current ČEZ percentile 66th–91st 72nd 56
Slide 15: Agenda
Agenda Financial Highlights and Selected Events Generation and Mining Distribution and Sales www.cez.cz/en www.cez.cz 15
Slide 16: GENERATION Segment EBITDA
GENERATION Segment EBITDA* EBITDA (CZK bn) Q1–Q3/2021 Q1–Q3 2022 Difference % Q3/2021 Q3/2022 Difference % Of which emission-free generation sources: 20.4 40.9 +20.5 +101% 7.0 12.6 +5.6 +80% Nuclear 16.4 31.6 +15.2 +93% 5.6 9.4 +3.8 +67% Renewable 4.0 9.4 +5.3 +133% 1.5 3.3 +1.7 +115% Emission Gener
Slide 17: MINING Segment EBITDA
MINING Segment EBITDA EBITDA (CZK bn) Q1–Q3/2021 Q1–Q3/2022 Difference % Q3/2021 Q3/2022 Difference % Czech Republic 3.1 5.0 +1.8 +59% 1.0 1.9 +0.9 +83% Year-on-year effects Q1–Q3 (CZK +1.8 bn): Year-on-year effects Q3 (CZK +0.9 bn): ▪ Higher revenues due to the increase in the price of supplies to
Slide 18: Nuclear and renewable generation (TWh)
Nuclear and renewable generation (TWh) -1% +1% 25.0 34.5 34.2 24.8 2.8 2.4 3.8 3.4 -11% -15% 22.6 30.7 +0% 30.8 22.0 +3% Renewables Nuclear Facilities Q1–Q3 2021* 1-9/2021* Q1–Q3 2022 1-9/2022 2021* 2022 E Renewables (-15%) hydro, wind, solar, biomass, biogas Renewables (-11%) Czechia hydro (-18%) C
Slide 19: Electricity generation from coal and natural gas (TWh)
Electricity generation from coal and natural gas (TWh) -1% 14.8 14.7 21.1 -2% 20.7 2.5 1.8 3.2 2.7 1.3 -28% 1.3 1.8 1.9 -14% +2% +5% 11.6 16.1 11.1 16.1 Generation from natural gas +5% Generation from coal in Poland -0% Generation from coal in Czechia Q1–Q3 2021 1-9/2021 Q1–Q3 2022 1-9/2022 2021 202
Slide 20: Emissions of CO2, SO2, and NOX in electricity and heat generation
Emissions of CO2, SO2, and NOX in electricity and heat generation CO2e emission intensity of electricity and heat generation (t CO2e/MWh) 0.80 CEZ Group’s emission intensity for 0.80 electricity and heat generation in 0.60 Marginal facilities in Germany Q1–Q3 2022 of 0.30 t CO2e/MWh 0.60 corresponds
Slide 21: Hedging of market risks of generation in Czechia for 2023–2025
Hedging of market risks of generation in Czechia for 2023–2025 Electricity sold in TWh (as of Sep 30) Contracted emission allowances* in m tons (as of Sep 30) Hedged volume from Jul 1, 2022, to Sep 30, 2022 Hedged volume from Jul 1, 2022, to Sep 30, 2022 35.2 Hedged volume as of Jun 30, 2022 12.1 He
Slide 22: Agenda
Agenda Financial Highlights and Selected Events Generation and Mining Distribution and Sales www.cez.cz/en www.cez.cz 22
Slide 23: DISTRIBUTION Segment EBITDA
DISTRIBUTION Segment EBITDA* EBITDA (CZK bn) Q1–Q3/2021 Q1–Q3/2022 Difference % Q3/2021 Q3/2022 Difference % Czechia 13.6 13.7 +0.1 +1% 4.0 4.2 +0.2 +5% Year-on-year effects in Q1–Q3 (CZK +0.1 bn): Year-on-year effects in Q3 (CZK +0.2 bn): ▪ Higher revenue from activities to ensure input power and ▪
Slide 24: Electricity consumption in the distribution territory of ČEZ Distribuce
Electricity consumption in the distribution territory of ČEZ Distribuce decreased mainly in the residential customers segment Electricity distribution Temperature- and calendar-adjusted (TWh) electricity consumption (TWh) -4% 27.0 25.8 3.4 -3% +0% 3.4 26.9 26.1 8.1 7.3 8.0 7.7 -4% -10% Retail custom
Slide 25: SALES Segment EBITDA
SALES Segment EBITDA* EBITDA (CZK bn) Q1–Q3/2021 Q1–Q3/2022 Difference % Q3/2021 Q3/2022 Difference % Retail segment–ČEZ Prodej 3.3 2.7 -0.5 -16% 0.7 2.4 +1.7 >200% B2B segment—of which ESCO companies: 1.1 0.7 -0.4 -38% 0.2 0.7 +0.5 >200% Energy Services—Czechia and Slovakia 0.3 0.3 -0.1 -25% -0.0 0
Slide 26: Volume of electricity and gas sold; the number of customers Czechia—Retail
Volume of electricity and gas sold; the number of customers Czechia—Retail Total electricity and gas supply The number of customers ▪ A significant impact on the end-use customer increased by 13% year-on-year increased by 15% year-on-year market in Czechia was the collapse of several (TWh) (service
Slide 27: Revenues from the sale of energy services (CZK bn)
Revenues from the sale of energy services (CZK bn) 31.6 +30% 21.3 +31% 24.0 16.4 16.3 +12% 11.5 Germany +15% (Elevion Group) 14.2 10.3 Czechia and +55 % +55% Slovakia (ČEZ 6.2 ESCO group) 9.9 4.0 6.4 Other countries* +69 % +55 % 3.6 (Elevion Group) 5.4 2.1 3.5 1-9/2021 Q1–Q3 2021 1-9/2022 Q1–Q3 2022
Slide 28: Annexes
Annexes Financial Results ▪ Total financial results ▪ Total operating results ▪ Operating results by existing and divested assets ▪ Operating income by segment and country ▪ EBITDA by segment and country ▪ Net income for Q3 ▪ Status of generation margin hedging against selected price risks in Czechi
Slide 29: Total financial results
Total financial results (CZK bn) Q1–Q3 2021 Q1–Q3 2022 Difference % Operating Revenues 156.0 211.1 +55.1 +35% EBITDA 47.5 89.3 +41.8 +88% of which: Existing assets* 44.9 89.3 +44.4 +99% EBIT 13.8 65.2 +51.4 >200% Net income 6.7 52.3 +45.6 >200% Adjusted net income** 16.9 52.3 +35.4 >200% Operating c
Slide 30: Total operating results
Total operating results Q1–Q3 2021 Q1–Q3 2021* Q1–Q3 2022 Difference* %* Electricity generation TWh 40.1 39.7 39.6 -0.0 -0% Electricity distributed to end-use customers TWh 33.9 27.1 26.0 -1.1 -4% Sales of electricity to end-use customers TWh 21.1 14.7 16.6 +1.9 +13% Gas distributed to end-use custo
Slide 31: Operating results by existing and divested assets
Operating results by existing and divested assets Gas sales to end-use Electricity generation (TWh) Q1–Q3/2021 Q1–Q3 2022 Difference % customers (TWh) Q1–Q3/2021 Q1–Q3 2022 Difference % Existing assets** 39.7 39.6 -0.0 -0% Existing assets 4.4 5.6 +1.2 +26% of which: Czechia** 38.0 37.9 -0.1 -0% of w
Slide 32: Operating revenues by segment and country
Operating revenues by segment and country GENERATION (CZK bn) Q1–Q3/2021 Q1–Q3 2022 Difference % SALES (CZK bn) Q1–Q3/2021 Q1–Q3 2022 Difference % Czechia 79.4 149.0 +69.6 +88% Czechia 45.1 84.1 +39.0 +87% Germany 0.4 0.5 +0.1 +23% Germany 10.4 11.7 +1.3 +12% Poland 4.1 4.2 +0.1 +3% Romania 2.5 0.2
Slide 33: EBITDA by segment and country
EBITDA by segment and country GENERATION (CZK bn) Q1–Q3/2021 Q1–Q3 2022 Difference % SALES (CZK bn) Q1–Q3/2021 Q1–Q3 2022 Difference % Czechia 23.0 66.7 +43.7 +190% Czechia 4.2 3.0 -1.2 -28% Germany 0.3 0.4 +0.1 +37% Germany 0.5 0.6 +0.1 +19% Poland 0.2 -0.3 -0.5 - Romania 0.1 0.0 -0.1 -93% Romania
Slide 34: Net income for Q3
Net income for Q3 (CZK bn) Q3/2021 Q3/2022 Difference % EBITDA 15.9 30.0 +14.1 +88% Depreciation and amortization -7.9 -9.1 -1.2 -15% Impairments* -0.4 0.1 +0.4 - Other income and expenses -1.1 0.6 +1.7 - Interest income (expenses) -0.9 -0.3 +0.7 +73% Other -0.2 0.9 +1.0 - Income taxes -1.4 -2.9 -1.
Slide 35: Status of generation margin hedging against selected price risks in Czechia
Status of generation margin hedging against selected price risks in Czechia* and expected achieved prices of generation in 2022 Electricity—share of hedged deliveries from Emission allowances—status of generation in Czechia* for 2022 (as of Sep 30th) generation hedging in Czechia* for 2022 (as of Se
Slide 36: Expected year-on-year change in individual business areas
Expected year-on-year change in individual business areas GENERATION (CZK bn) Nuclear Facilities EBITDA 2021* + Higher realization prices of electricity incl. hedging – Deduction from generation sales above the price cap set in Czechia anticipated Renewables +16 to +21 + Higher realization prices of
Slide 37: Investments in fixed assets (CAPEX)
Investments in fixed assets (CAPEX) CAPEX (CZK bn) by segment Q1–Q3 2021 Q1–Q3 2022 GENERATION 7.0 8.3 Of which: Nuclear fuel procurement 2.0 2.4 MINING 1.5 1.2 DISTRIBUTION 8.7 10.3 SALES 1.0 1.6 Total existing assets 18.2 21.4 Divested assets 1.1 - TOTAL CEZ GROUP 19.3 21.4 The main reasons for th
Slide 38: Credit frameworks and debt structure as of Sep 30, 2022
Credit frameworks and debt structure as of Sep 30, 2022 Drawings on short-term bank lines and available bank-committed credit facilities Bond maturity profile (CZK bn) DRAWN 20 bank committed 15 USD UNDRAWN CZK 2.9 bn bank Available CZK 10 committed credit CZK 45.7 bn facilities DRAWN EUR 5 bank JPY
Slide 39: Net debt increased by CZK 11 bn in Q1–Q3
Net debt increased by CZK 11 bn in Q1–Q3 Net debt Other as of Dec 31, Interest, operating Acquisition of Divestments/ Net debt as of 2021 EBITDA income tax Margin deposits effects fixed assets acquisitions Other Sep 30, 2022 +89.3 -5.9 Increase in net debt 110.8 by CZK 11.0 bn 121.7 +20.4 +0.4 -90.2
Slide 40: Currency and Commodity Hedging of Electricity Generation in Czechia in 2023–2025
Currency and Commodity Hedging of Electricity Generation in Czechia in 2023–2025 Currency Hedge of Expected EUR Cash Flow* From Electricity Generation in Czechia (as of Sep 30, 2022) 2023 2024 2025 Total currency hedge of EUR denominated CF from generation 88% 39% 22% Natural currency hedge (debt an
Slide 41: Market developments from Jan 1, 2021 to Sep 30, 2022
Market developments from Jan 1, 2021 to Sep 30, 2022 CO2 emissions allowances CZK ČEZ shares EUR / t (to be delivered in 12/2023) 1,300 120 1,100 100 900 80 700 60 500 40 300 20 Electricity EUR / MWh (BL to be delivered in 2023 and 2024) USD / t Coal and gas EUR/MWh 1,000 500 500 400 400 750 300 300
Slide 42: Electricity balance (GWh)
Electricity balance (GWh) Index Q1 - Q3 2021 Q1 - Q3 2022 2022/2021 Electricity procured 36,093 35,779 -1% Generated in-house (gross) 40,071 39,633 -1% In-house and other consumption, including pumping in pumped-storage plants -3,978 -3,854 -3% Sold to end customers -21,142 -16,597 -21% Sold in the
Slide 43: Electricity balance (GWh) by segment
Electricity balance (GWh) by segment Q1 - Q3 2022 Generation Distribution Sale Eliminations CEZ Group GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- Electricity procured 35,551 -1% 0 - 229 +2% 0 - 35,779 -1% Generated in-house (gross) 39,347 -1% 0 - 286 +9% 0 - 39,633 -1% In-house and other consumption, in
Slide 44: Electricity balance (GWh) by country
Electricity balance (GWh) by country Q1 - Q3 2022 Czechia Poland Romania Bulgaria Germany Others Eliminations CEZ Group GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- GWh +/- Electricity procured 34,277 +0% 1,306 +0% 0 - 0 - 180 +15% 17 >200% 0 - 35,779 -1% Generated in-house (gross) 37,918
Slide 45: 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
Slide 46: Calculation of components 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