Cez As S/Gdr 144A

Good afternoon or good morning everyone and welcome to our regular quarterly call organized by CHESS. It's my pleasure to welcome Martin Novak, CFO and Pavel Tsirani, Head of Sales and Strategy. I'm now handing over to Martin to walk you through the presentation.

So good afternoon, good morning. Let's start on slide three with financial results overview. As you can see our sales or operating revenue is five percent lower mainly due to the main factor that's actually influencing all this presentation or entire presentation which are low prices. EBITDA DOWN BY 20% TO 59 BILLION CHECK ROUNDS AND WE'LL GO THROUGH HIGH LEVEL OF DETAIL ON NEXT SLIDE NET INCOME UP BY 10% FROM 16.5 TO 18.1 BILLION CHECK ROUNDS MAINLY CAUSED BY THE FACT THAT WE ARE NOT SUBJECT TO VINFOLTEX THAT ACTUALLY IS NOT IN PLACE IT WAS IT ENDED ITS EXISTENCE IN on the 31st of December 2025. Printing cash flow 26 billion higher or 55% and capex 30% higher. Our net debt is about 9% higher so we are getting close to 200 billion CZK. Slide number four explains the difference between first half 2025 and first half 2026 EBITDA as I said by far the most significant factor influencing this variance is generation segment and mainly decreased power prices which actually are have a negative effect of 11.4 billion check rounds we also had lower profit from trading and the revelation of temporary relation of derivatives which in total is lower by 2.7 billion check rounds versus first half of 2025 as you will see later we are actually planning to produce 9% more power from coal compared to 2025 and therefore despite lower coal prices the volume is actually making up and we can see half a billion check round increase year on year our distribution segment both electricity and gas are actually positive the variance is 300 million on electricity distribution which is negatively impacted by correction factors from past years on normalized EBITDA without correction factors we are doing much better as you will see later on and gas distribution 1.7 billion CZK positive year-on-year, half a billion of which is actually attributable to acquisition of gas distribution company that is covering south of Bohemia. Gasnet, which is the company that we own since I think September 2024, also has an improvement mainly to higher investments or capex and the increase in VEG. Sales segment down by 2.4 billion CZK. partly due to lower margins both in retail and wholesale customers or large customers with declining power prices our margins are getting back to standard levels and we also had a few delays on our projects abroad which causes a variance of about 700 million check rounds. So this is how we get to 59 billion. On next slide we can actually see the details of net income. Basically most of the items like depreciation, asset impairments, other income expenses are fairly similar to previous year and there is an explanation on the slide. What is definitely worth mentioning is income tax. Last year income tax was about 23.1 grand check rounds. Now it is only 5.5 and the biggest difference is that it's not to lower pre-tax income. but to the fact that we are no more paying a windfall profit tax. So that's why actually despite 20% decline in EBITDA, our net income is 10% higher and is achieving 18.1 billion CZK. On slide number six, you can see actually total operating results that I will skip. Those are volumetric numbers if you are interested in those. And the important slide number seven, actually taking into consideration a few positive factors, a few negative factors, we decided to shift our guidance on both EBITDA and also adjusted income upwards. uh so original guidance from May 14th was 107 to 112 grand check rounds uh now actually we moved this range by 2 billion upwards so new guidance is actually 109 to 114 billion check rounds adjusting that income 30 to 34 billion was original estimate now it is actually 31 to 35. main uh positive drivers uh is higher EBITDA of our distribution segment continuous crisis in Persian Gulf, which resulted into higher power prices and allowed us even to produce more power in our coal plants and gas plant. And then we have higher generation in nuclear plants than originally anticipated. negative front, we have lower profits from commodity trading and lower EBITDA in Elevium Group due to the phase that I already described, mainly moving some projects further. There are important selected assumptions of the current forecast in the Czech Republic. so we assume that we will generate 45 to 47 terawatt hours. Average achieved prices will be 106 to 110 euro per megawatt hour and the average purchase price of carbon credits would be 77 to 79 euros per ton. When we look at the next slide, I will touch on newly established subsidiary of Chess, which name is Chess Energy. This is something we discussed on previous call and also did a lot of publicity after shareholder meeting. On June 1, actually, the shareholder meeting approved the mandate for the Board of Directors to optimize the ownership structure. We actually were providing mandate to transfer Chess Group's customer segment into Chess Energy. and those companies that are actually considered is actually both power and gas distribution, which is kind of a decided fact. Those will be a cornerstone of Cez Energy. Then retail business in the Czech Republic, Cez Prodej. Cez ESCO services in the Czech Republic and Eleveon. in Germany also trading both of power and natural gas and telecommunication services. Not necessarily all of those will get transferred but definitely the largest companies will. and then we got a mandate to actually dispose minority stake up to 49% actually of just energy either through direct sale or through IPO in the future. The timeline is such that all the legal work, meaning injecting actually the companies into transferring the ownership from Chess to Chess Energy should be finished by the end of first quarter of 2027. Many of those transfers, however, will occur in 2026. So that's actually it. On the same slide you actually have a board of directors of the company that basically composes of four members of current board of CES with Daniel Beneš being chairman of the board of directors, Pavel Cirány vice chairman of the board of directors, myself and Ondřej Landa members of the board and actually Pavel Cirány is CEO of the company as he's heading actually sales segment and distribution segment currently in CES these days. selected events in the past quarter. I think I can skip that. You can go through it. Those are interesting things. Maybe the one that's worth mentioning is actually a Levion group that acquired or signed an agreement to acquire 100% stake in Tech-Am Solutions in Germany. which is a company that should significantly increase the size of Eleveon and actually switch it to a company that has more assets, is more asset heavy than it was by now. It's operating almost 2,300 energy facilities around Germany, mainly heating systems in municipalities.

So now let's switch to generation mining segment.