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Ladies and gentlemen, welcome to the analyst and investor conference call of Uniper. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. I now hand you over to Udo Giegerich, who will start the meeting today. Please go ahead.

Good morning, the analysts and investors. Welcome to the Uniper Interim Results Call for the first half year of 2020. I'm sitting here with our CEO Andreas Schierenbeck and our CFO Sascha Biebert in our headquarter in Düsseldorf. Looking at today's agenda, Andreas will start with the key highlights and give an overview where we stand on our strategy execution when it comes to hydrogen and the coal exit. Afterwards, he will go through the latest developments on the commodity markets and the respective impact on our business. In the second half of today's call, Sascha will dive into the details of the financial interim results and provide an update on the full year outlook for 2020. Right after the presentation, you will have the chance to raise your questions.

Having said that, Andreas, the mic is yours. Thanks, Udo, and good morning, everyone, and welcome also from my side. Thank you for participating in our conference call today, and let me start with the essential topics of the first half of 2020. First, I'm very satisfied with our financial performance in the first half. As we saw already in Q1, the guest business is a strong earning driver this year, bringing our overall adjusted group EBIT to €691 million, which is more than double compared to prior year. Adjusted net income increased even stronger to 527 million euros. This means that we are on track despite the considerable macroeconomic and commodity headwinds. The negative impact of COVID-19 on production and energy supply volumes had limited impact on our operating results in the first half of our 2020 fiscal year. However, we do see some impacts around project delivery. Based on this overall strong performance, we feel confident to narrow our full-year guidance already at this point in time. Sasha will provide you further details a little bit later. Secondly, on our portfolio optimization and strategy plans. We continue to ramp up our business initiatives in the hydrogen area. As part of this, a hydrogen business line has been set up within UNEPA. The new team is structured in a way to be more efficient than a conventional ZERO or silo organization, as it enables us to pull more resources together and to access a wider range of group-wide expertise, which is key to push this topic ahead. We're also involved in various activities to be part of upcoming sector projects supported by the EU and national governments. In order to become carbon neutral in the European generation business by 2035, we need to find technical solutions to make our gas-fired power plants hydrogen-ready. For this, we have formed alliances with our two major equipment suppliers, General Electric and Siemens. Coming to the coal-related business, the concrete implementation of the planned phase-out of German coal-fired power generation continues to gather pace. A binding law is in place since the beginning of July. The first option for hard coal-fired power station is earmarked to take place on September 1st. Here we are working to implement the best options for Uniper to exit from coal-fired power generation as quickly as possible and in a way that preserves value. The coal-to-gas conversion has accelerated due to the low prices for natural gas and the rising prices for emissions allowances in the EU. Consequently, Irsing 4 and 5, our two most efficient German gas-fired power plants, will exit the German grid reserve mechanism as standby power plants and will be allowed to operate on the merchant market again from October 2020. Now coming to our two legacy growth projects. The Dutton 4 coal-fired power plant was successfully commissioned at the end of May 2020. The Coal Exit Act has confirmed DUTN-4's admission to operate. At the same time, it also enables the option to accelerate the phase-out of older, more efficient, inefficient, hard coal-fired power plants. When we were able to put our DUTN-4 power plant into operation earlier than planned, we are facing COVID-19-related delays at Beresovskaya 3 lignite fire power plant in Siberia. Corona cases at the construction site required a temporary shutdown of the repair works and to take further precautions. Hence, the remaining work here is currently only continuing with a limited skilled workforce. This will postpone the start of Berezovskaya into the first half of 2021. With regards to major projects, we cannot ignore the unfortunate development around Nord Stream 2, which continues to be a point of contention between the US and Russian government. Overall, the pressure on Nord Stream 2 has been further intensified by the U.S. government, but the sanctions have not been implemented yet. Germany and Europe have reassured the political support for Nord Stream 2, given its security of supply role. On July 15, the U.S. government has updated its public guidance on the CAATSA sanctions, and based on that update, the guidance on so-called grandfathering has been adjusted. According to our understanding, are now are also targeted but only those taken after after july 15 2020. uniper server close the monitoring and analyzing situation finally coming to the shareholders here our first successful virtual and regenerative meeting with high approval ratings for all agenda items confirms that we are on the right track we can now focus even more on strategic development The five new supervisory board members elected at the annual general meeting bring a high level of sector and specialist expertise. With the process of the H1 reporting, Uniper and Fortum teams worked already intensively in order to enable Fortum to smoothly incorporate Uniper as a consolidated entity within Fortum's half-year financial statements. This sets another milestone to strengthen the relationship with Fortum, where we congratulate Markus Rauramo on his new role as CEO of Fortum. Over the upcoming weeks, we will be intensifying the exchange between both companies through a strategic alignment process with the aim to bring the strategies of Uniper and Fortum closer to each other. One of the major strategic issues that Uniper can apply its expertise and future growth investments is the area of hydrogen, which I will describe in more detail on the next page. The production of green gases, especially hydrogen, as a supplement of renewable energies for electricity generation is a missing building block to lead Europe towards sustainable energy supply by 2050. The EU and many national European governments have given the issue an enormous political boost in recent years. Thus, the German Federal Cabinet in June and the EU Commission in early July presented their roadmap for the implementation of a hydrogen strategy. The EU Commission Economics Recovery Plan Next Generation EU highlights that hydrogen technologies can become an engine of growth in Europe, create local jobs, and enable Europe to play a technological pioneering role in a global market. Currently, 75% of fossil fuels still dominate Europe's primary energy mix, with 33% still based on oil, around 25% based on natural gas, and 15% on coal. It will be a challenging task and a great opportunity for the next decade to replace fossil energies with renewable energies and carbon-neutral hydrogen. Currently, hydrogen is mainly being produced from natural gas in a process that releases carbon dioxide. Therefore, it's usually referred to as grey hydrogen. If the CO2 is captured, stored or reused, then it's considered blue hydrogen. Green hydrogen is produced through electrolysis using green electricity. In our view, we use both green and blue hydrogen in order to reach the given carbon targets. We anticipate that green hydrogen will play a substantial role in the energy transition at some point in time. However, until green hydrogen is economically viable, blue hydrogen can be a great addition to help develop the hydrogen economy and provide the commercial framework needed to trigger the necessary investments into infrastructure. The transition process is now ramping up to enable commercially viable business cases around hydrogen. The EU political roadmap provides for the implementation of a policy in three steps. Phase one, policy makers promote technology development through European economies architecture projects and create a reliable regulatory framework. From now to 2024, the EU will support installation of at least six gigawatts of renewable hydrogen electrolysis in the EU and the production of up to one million tons of renewable hydrogen. Phase two, between 2025 and 2030, hydrogen needs to become an intrinsic part of Europe's integrated energy system. The EU ambition is to tenfold production under 2030, up to 10 megatons of renewable hydrogen backed by at least 40 gigawatts of renewable hydrogen electrolysis. Germany has set its goal to contribute at least five gigawatts for that goal. Phase three, from 2030 on, renewable hydrogen should be deployed at a large scale across all hard to decarbonize sectors. As you can see on the slide, Unipa has the ambition and the capabilities to occupy many fields within the value chain in the hydrogen economy. Unipa targets are all non-CO2 emitting forms of hydrogen production. Unipair brings project development, partnering, integration capabilities, as well as a strong customer-supplier relationship. Depending on the market prerequisites and concrete regulations that are about to be developed, we will choose our engagement according to the potential. In order to identify the future potential of the different market segments in the hydrogen value chain, we need concrete framework conditions and guidelines from European and national political decision makers. This is where Uniper and I can help, for example, in my role as a member of the newly founded German National Hydrogen Council. The Council is tasked to advise the federal government on the concrete implementation of the National Hydrogen Strategy in Germany. We will be able to significantly contribute to the work of the Council based on the expertise that Uniper has acquired in a series of hydrogen pilot projects over the last year. Our current project initiatives are based on R&D partnering and semi-commercial pilot plants in the Unibas core market, Germany, UK, Netherlands, and Sweden. We focus to be part of flagship electrolyzer projects in order to operate hydrogen technologies on a commercial scale for the first time. Aside from the mentioned cooperation with technology providers to convert our gas power plant fleet, we are also working on further developing existing coal generation brownfield sites, such as Wilhelmshaven on the North Sea, which could become a future hydrogen hub. Due to its location, this site offers a variety of options for sourcing an electrolysis plant, ranging from offshore wind to transport by ship. For example, we have signed a letter of intent to conduct a feasibility study for Salzgitter AG on the production and handling of environmentally friendly sponge iron with upstream hydrogen electrolysis. In addition, We see an evolving international hydrogen economy to provide supply, trading, and optimization opportunities. Uniper, which is a commercial power and gas business, is well positioned to play a leading role not only on the operational but also on the commercial side midstream for future hydrogen industry. Our goal is to become CO2 neutral in our European power plant production by 2035. In Germany, the coal phase-out act was passed on July 3rd after long and controversial discussions. This law does not only end coal-fired power production by 2038 latest, but it also provides necessary legal framework for our planning over the next year. According to this regulation, German hard coal and lignite fire power plant capabilities are to be reduced by 40% by the end of 2025. Uniper has significantly more ambitions than this. In fact, we are almost twice as ambitious given our commitment to reduce our German coal and lignite capacities by 78% in the same period. As we will also reduce our capacities outside of Germany after 2025, Uniper is the only the only operating two most modern hard coal-fired power plants in Europe, Dublin IV in Germany, and Maastricht III in the Netherlands. The step in the decommissioning of German hard coal-fired power plants is the first coal exit auction taking place as early as September 1st. As a result of the first tender, 4,000 megawatts of capacity will be taken off the German grid by the end of the year. Seven more auction rounds will follow afterwards until spring 2025. The price cap in the first tender is set at 165,000 euros per megawatt and will decrease gradually over time with only 89,000 euros per megawatt in the last tender round. We are currently analyzing which is the best exit option for our hard coal-fired power plants in the upcoming auctions. there are quite some factors that need to be taken into consideration aside from the communicated price gaps. Among others, we need to consider our contractual obligations toward customers and, of course, the needs of our employees. In order to be able to focus on this multitude of strategy development issues, it's helpful that our operating business is in steady waters. And this performance has been achieved against the background of a difficult commodity price environment, as you can see on the next slide. Slide six illustrates how our market environment has been influenced by COVID-19 and weather in recent months, starting with gas. Prices have fallen significantly during the first month of 2020 and have remained low since March. The fall 2021 price which is shown on our slide, even temporarily fell below 12 euros per megawatt hour during July. This is mainly due to a depressed outlook for the gas market, characterized by LNG oversupply and very high storage levels. The expected economic situation might be also waiting on the gas demand outlook and therefore dampening forward prices. One of the few supporting factors are increasing concerns about the impact of potential sanctions on the completion of Nord Stream 2. Moving over to carbon. In mid-March, the carbon price collapsed in line with reduced emissions from the power industry and the aviation sector on the back of the COVID-19-related lockdown. After the significant drop, carbon increased steadily and surpassed pre-crisis levels, breaking through the 28 euros per tonne barrier beginning of July. Most of the rally seems detached from the fundamentals, which would imply a more bearish picture. Even increasing concerns about a resurgence of COVID-19 do not impact the positive carbon price development so far. Instead, a key driver seems to be trading strategies fueled by cheap money combined with expectations about an early carbon recovery and accordingly rising demand in the foreseeable future. Finally, the recent demand in EU-wide ETS auctions has indeed picked up from the historic lows in May, providing at least some fundamental support. Accordingly, electricity prices in Europe, and especially Germany, also showed a recent uptick. In those markets, the price-setting power plants tend to be fossil, which explains the level of correlation. The Nordics, in that sense, is a different story. As fossil generation does not play such a big role, and interconnectors towards Central Europe are limited, the Nordic outright prices did not follow the carbon rally to the same extent. Weather is the stronger driver here. Nordic power prices are still suffering from a sustained period of high hydro levels and relatively high temperatures in the beginning of the year. The importance of weather could also be seen in June and July, where a dry phase first lifted frontier prices under the subsequent wet phase led to a price aversion towards lower levels. Accordingly, a dry phase beginning of June lifted frontier prices. This upward movement reverted when the dryness predicted for the summer disappeared from the forecast. Looking into the outer years, the sentiment is further affected by questions around demand recovery, potential delays in interconnector projects, as well as an ongoing build-out of renewables. Those aspects combine with the fact that the outer years are typically more of a buyer market if the market price for delivery years 22 and 23 currently below the 26 euro mark. How did spreads develop? Generally, dark spreads have decreased and spark spreads have increased since the beginning of May. While coal and gas generation costs increased almost equally for coal and gas-fired plants, the increase in carbon has a naturally stronger effect on coal generation. Beyond, spark spreads remain heavily supported by the low gas price. As you can see, the peak spark spread has been in the double-digit area now for quite some time. This development was the base for bringing back Irsing 4 and 5 back into the merchant market. However, while spark spreads have increased in the forward market, the opposite was true in the spot market of 2020, as reflected in Unibas power production volume shown on the next slide. On slide 7, You can see how our operating EPI has developed during the first half of 2020 compared to 2019. Let's start with the global commodity business. Looking back on Q1 2020, we had already high filling levels back then of 71%. Since then, further gas was injected, giving the very low gas prices during the summer season. Overall, this results in a storage filling level of 89% as of June 30th, That means the storages have been already close to their peak at the end of H1. From a financial perspective, storages being ahead of the usual filling schedule means that the cash flow in the first half was burned. However, the cash flow in H2 benefits from that, as there will be less working capital built up needed to reach the maximum filling levels. Second, our European generation volumes have fallen by 25% year-over-year. You can see This is not only in the graph, but also in the appendix of today's presentations, where we incorporated a detailed table with Unipa power production volumes split by country technologies. Starting with H1, we will provide this overview on a quarterly base going forward. When it comes to our hydropower plants, the production volumes remain overall on the same level compared to the first half of 2019. When we had additional hydrovolumes in Sweden, related to higher precipitation and snow melt, those positive effects were compensated by lower hydro volumes in Germany. Nuclear was down by around 24%, mainly driven by the closure of Ringhals II and extended outages at Oskarsheim III and Ringhals I and III. Gas and coal-fired production was down about 35% volume-wise, mostly due to a lower power demand caused by the COVID pandemic and the greater availability of renewables, especially in Germany. However, the decrease in gas-fired production is also significantly affected by the disposal of the French business, which has contributed to its prior use production. Last year, our business segment International Power, or Russian Power Generation, as we will call it going forward, delivered a strong performance. Unipro's production volumes were burdened by an abnormal warm winter, very good hydro conditions at the beginning of the year, and the lower demand due to COVID-19 and Q2. Thus, our Russian business produced 14% less electricity during the first six months compared to 2019. Finally, Unipro emitted 22% less CO2. Of course, this development is purely driven by the decrease of thermal generation. Nevertheless, This is the direction Unipa is striving for, producing less emissions and focusing on more environmental-friendly technologies. This brings me to the end of my part today. I would now like to hand over to Sascha for the financial part, after which Sascha and I will be ready for your questions. Thank you very much.

Thank you, Andreas, and good morning also from my side. I start with the usual overview of our KPIs on page 9. What you see here is a picture comparable to the first quarter, however, less pronounced as Q2 standalone has been as indicated positive, but not extraordinarily positive. Adjusted EBIT and adjusted EBITDA are roughly twice as high as compared to the prior year. You may remember that the first half 2019 was not only showing a muted business performance, but was also affected by significant negative intra-year phasing effects. This year is better in both categories, as we will see in a minute. Consequently, the first half earnings are quite close towards the lower end of the full-year target range, as I mentioned in our last conference call. OCF is up by 600 million compared to the first half 2019, and therefore showing a significantly higher year-on-year swing compared to EBITDA. as the cash-effective EBITDA was materially higher. Still, the cash conversion of roughly 30 percent is rather low, however, relates to the first quarter. This is expected to revert to a more normal level towards the end of the year. Adjusted net income is fully in line with the adjusted EBIT's development, as economic interest and taxes showed the expected linear development throughout the first two quarters. In contrast to the other KPIs, reported net income is down compared to H1 2019. It does include about $90 million of asset impairments on our fossil generation assets. Moving on to economic net debt. After the first six months, it is at $3.3 billion and therefore above the level at the beginning of the year. However, please keep in mind that economic net debt tends to have a somewhat seasonal pattern with H1 reflecting the cash out for the dividends, while the majority of operational cash flow is still to come in the second half of the year. From a credit rating perspective, our metrics for BBB flat continue to be rock solid, and I have no concerns with respect to our planned investments and dividends. Now let's break down the earnings drivers on the next chart. Looking on the year-on-year effects, the picture is in line with what we showed you at Q1 stage. Please note that the goal of this overview is to provide transparency on the underlying business drivers for the Uniper group. Usually, the effects shown here fit nicely to the segmental breakdown in the appendix. However, this time around, there are quite some shifts and consolidation effects at work between the operating segments and the admin slash consolidation line. Hence, if one would start from the segment split, one would need to adjust for a couple of effects to get to the true performance. Overall, we are up 380 million versus prior year. Commodity optimization, mainly in the form of our gas midstream business, continues to be the main driver, contributing already 315 million to the positive year-on-year development. However, if you compare this effect to Q1, you realize that it came down as the isolated Q2 EBIT contribution from gas was negative in 2020. Such a Q2 in the gas business is not extraordinary, if you look back to 2018, for example. Further, as we have mentioned in the last call, the very high margin in Q1 came partly at the expense of somewhat lower margins in future quarters, and this affected already Q2. As you may remember from our Q1 call, one of the key successful strategies of our gas team is to use the flexibility in the assets and rather leave the storages full. However, full storages limit the flexibility, the room for optimization, and finally the earnings potential going forward. This was already reflected in the second half of H1 and will also have an impact on the earnings distribution in the rest of 2020. I will pick this up later in the guidance section. Moving to our outright fleet with an effect of roughly 50 million. As expected, we saw a strong increase in the achieved prices of about five euro on average. Volume-wise, we have higher hydro volumes in Nordic, but those were largely compensated by lower hydro volumes in Germany. Overall, you might have expected higher earnings from the Nordic water situation, but as the excess volumes in the Nordics were largely unhedged, They faced very low spot prices at the time. Finally, we saw lower nuclear volumes due to the closure of Ringhals II at the end of 2019, as well as due to some extended outages in Oscar Farm III, Ringhals I and III. The next earnings driver is the UK capacity market, which amounted to €60 million in the first half of 2020 and is therefore up €60 million versus the prior year as well. as 2019 did not reflect earnings from the UK capacity market until Q4. The intra-year carbon phasing effect is also well known to you. In times of rising carbon prices, we need to increase our provisions while the offsetting positive hedge effects only realize at the end of the year. Hence, this is an effect that burdens the first quarters and will revert in Q4. So why is it a positive effect here? because the negative impact from carbon phasing was about 50 million more negative last year than it is this year. The significantly lower CO2 emissions that Andreas mentioned before are the main reasons for this. With lower volumes, the overall phasing is less pronounced. Russia is further down with now 50 million compared to H1 2019, with FX only playing a minor role. main reasons were significantly lower electricity prices in the day ahead market driven by a slowdown in demand due to the covet 19 pandemic and higher availability of cheap hydro generation due to higher water inflows the category other approximate approximately negative by 40 million summarizes a series of effects across three categories some more negative fx effects unallocated consolidation effects, and expenses related to our generation business. So to sum it up, overall strong H1, not only in terms of earnings quantity, but also in terms of earnings quality, as also can be seen in a minute when looking at the cash effect of EBITDA. Secondly, even though the overall power production came down by 25% in Europe, the financial impact has been limited which documents the successful hedging and optimization activities around our fleet. Now over to operating cash flow on page 11. Here you can follow the reconciliation from adjusted EBIT to operating cash flow. The picture is basically unchanged to the Q1 call. Cash effective EBITDA amounts to almost 1.2 billion, up 23% from the prior year, hence my earlier comment regarding earnings quality. Second, the low cash conversion is driven by changes in working capital based on high inventory levels. Compared to Q1, we saw only a comparably low working capital increase based on the high filling level that we had already at the end of March. As usual, the working capital effect related to the gas inventories will largely normalize over the course of the year. Third, provision utilization was comparably lower. the overall 221 million of provision utilization is almost evenly split across provisions for decommissioning, gas and LNG infrastructure, and other including pension and personnel-related provisions. Finally, there is a rather high ad hoc with plus 159, out of which around 130 million are the cumulative CO2 impact. What do we mean by that? This is the net effect of all reconciliation items related to CO2, i.e., the correction for CO2-related provision buildup, provision utilization, and the related changes in working capital. In the past, we used to show those effects on a gross basis in the individual buckets, which ultimately pumped up the individual effects and blurred the view on the overall impact. From this quarter onwards, we will show the net effect within other. This has the positive impact that the different reconciliation items are now much easier to interpret as they are not overlapped by large CO2-related effects that in the end net out to a much smaller amount. On the next page, the adjusted net income developed fully in line with expectations since Q1. The economic interest, which is structurally positive for Uniper, as we have explained in the past, has increased from $6 million in Q1 to now $16 million, and is driven by interest income from Nord Stream 2, as well as the capitalized interest from our legacy growth projects. While we did not publish the adjusted net income KPI last year, the like-for-like economic interest result in H1 2019 would have been minus 36, as there was a strong negative revaluation impact on the hydro asset retirement obligation stemming from a step down in discount rates. The other two elements, i.e., the tax rate and the minorities, are straightforward. On the tax side, we generally expect a tax rate between 20 and 25 percent. Just like in Q1, we ended up once again at the lower side with 22 percent. The minority interests are largely driven by Unipro, where minority shareholders hold about 16.3%. Given the higher financial performance of Unipro last year, the total minority interest for H1 2019 would have amounted to minus 29 million. Slide 13 summarizes the changes in our economic net debt. It reached 3.3 billion at H1 2020, 650 million above the year-end 19 level, as the operating cash flow covered investments, but not the dividend. Investments were marginally higher than last year, given the increase in growth cap expense. The dividend of 421 million was paid in May following our AGM. Further, there is an increase of pension provisions, from 1 billion to 1.1 billion due to lower interest rates. Asset retirement obligations are broadly unchanged. And finally, the category other, which reflects an increase in financial leases mainly related to storage contracts, our headquarter in Dusseldorf. Now over to the last slide today addressing the outlook. As briefly mentioned by Andreas at the beginning of the call, we narrow our guidance range for EBIT and adjusted net income I'm moving the lower boundaries up by 50 million. In case of adjusted EBIT, this means that the old range of 750 to 1 billion is now replaced by 800 million to 1 billion. This implies a new midpoint of 900 million, which is 25 million above the old one of 875. Accordingly, the adjusted net income range is now 600 to 800 million euro, with the midpoint being 700 million replacing the old one of 675 million. Why are we doing this now? After Q1, we already had a strong start into the year. However, back then the level of uncertainty around the remaining months was simply too high, not only in respect of COVID, but also regarding the business performance outlook for the commodity business, mostly the gas area. Even though COVID is far from being defeated as of today, and concerns about the second wave are rising, we feel confident that the financial short-term risks for Uniper in 2020 are manageable. Additionally, with now only six months left, we have a better picture of the expected business performance, which shows us that the old range did not fit anymore. Now, following the young tradition that we have from the last two calls, I would also like to give you an idea on how to think about the earnings distribution across the upcoming two quarters. When it comes to the next two quarters, you can expect Q3 isolated to be negative in absolute terms like it has been in the last two years. This time the seasonality might be even more pronounced, more comparable to the year 2018 where we recorded an EBIT loss of more than 200 million. Additionally, Q3 will also be affected by the mentioned backswing effect in gas, i.e. the fact that the high earnings in Q1 came also partly at the expense of margin in Q3. Based on our full year guidance, you can therefore expect our earnings in Q4 to then be again significantly positive. The dividend target for the financial year 2020 remains 500 million, as does the ambition to grow it further in the coming years to come. Now I can hand over to Udo, who has a short announcement before the start of the Q&A session.

Thank you, Sascha. I would like to take your opportunity today to introduce to you our newly developed Uniper at Energy app. We are aware that Uniper is not the company with the easiest business model and structure. Our aim was therefore to come up with an app that helps external stakeholders to understand our business better. It specifically aims at investors, you, the analysts, and your clients. With this app, Anyone can stay updated about all relevant aspects of Uniper's business, power and commodity price developments, stock behavior, and consensus for both Uniper and its peers and all Uniper news channels in one place, including press releases, social media, blog posts, and upcoming events. Not to forget the direct link to our financial reports and presentations. It's available for both Android and iOS. platforms and is free, of course. We are unable to take your money nor collect your data, no strings attached. We encourage you to try it out and give us your feedback whether you think it is helpful and investors can appreciate it. After this short commercial break, let's start with the Q&A session. As usually, please limit yourself to two questions each. Operator, please.

Now we will begin our question and answer session. If you have a question for our speakers, please dial 0 and 1 on your telephone keypad now to enter the queue. Once your name has been announced, you can ask the question. If you find your question is answered before the session to speak, you can dial 0 and 2 to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. The first question is from Alberto Gandolfi of Goldman Sachs. Your line is now open.

Thank you and good morning. I'll stick to the two question rules. The first one is on earnings, please. Can you please elaborate if in your holding costs, which look like 220 million negative for the first half, there's something not recurring that may also normalize for the rest of the year? Because it looks like this is partly offset in the strength in in the global commodities, and thanks for clarifying the pattern in Q3 and Q4. That actually has answered lots of questions. The second one is a bit of a bigger picture. You spent quite a lot of time at the beginning trying to, in a way, position Uniper across the hydrogen value chain. I guess the question here is, is this the main let's call it green focus of the company, or can you envisage something more profound? We're even seeing oil majors like BP right now, for instance, talking about, you know, 50 gigawatts net of renewables, which is almost an invasion of your typical backyard and territory power generation. So wondering, is this it, or are you contemplating at some stage down the line, maybe a more profound change? asset rotation like we are seeing, for instance, Angie even recently announcing to try and also develop other types of green power generation activities? Thank you.

So, Alberto, this is Sascha speaking. I'll take the first question, and then Andreas will develop on our ambition in the renewal space. You're asking a good and important question. Nothing has changed compared to what I think we have discussed in the past. On a full year basis, you should think of about 200 million admin expenses also in that line item, full stop. And that admin expense is usually split reasonably evenly across individual quarters. However, as the name of the line implies, it includes admin as well as the consolidation line. The consolidation in the second quarter is particularly negative. That is a random path and it has offsetting effects in the segments. So I think when you model that, you have to model 200 million negative on a full year basis and then you have net effects for the group. But I think whether they then show up in the segment or in the group consolidation line from a valuation perspective is irrelevant.

So think about 200 million on average. Good morning, Alberto, and thanks for the question. If you look at our hydrogen strategy, where we are coming from and where we want to go, there are a few things to mention. First of all, we are not completely new to the hydrogen industry. We started already 2012 with the first hydrolysis in Falkenhagen in Germany to produce hydrogen out of wind power, and not on a commercial scale, but just to understand the technology. And the whole thing was coming together as we announced our new strategy. We want to – we are striving to decarbonize our portfolio. Of course, it means switching off the coal-fired plant and switching to more gas units, like exerting four and five out of reserve. But something very clear, if you really want to go to a decarbonized world, we have to do something with the gas units as well. We have to reduce CO2 footprint. Yes, it's helping quite a lot, switching to natural gas or to LNG, but still there are CO2 emissions. And the natural solution for that is using hydrogen. Most of the gas turbines can burn hydrogen. On the other hand, it would be too easy to just think that would be the solution of all our problems. If you look at Germany, 75% of the CO2 emissions are coming from industry, from transportation and from buildings, and they have not contributed so much. So hydrogen, especially produced from green sources, taken by PPAs or whatever, is much too expensive and much too valuable to really burn it immediately in a gas turbine and generate energy again. using it for chemical industry, using it for transportation would help tremendously to decarbonize these sectors. On the other hand, in our strategy, we highlighted that we said, yes, hydrogen is a good solution for that and we want to expand that. But of course, we have kind of contradiction here. Germany wants to expand their renewable generation of energy with wind and the solar. We have not reached that in Germany. On the other hand, we want to produce hydrogen out of that, which will not work really because it's just a contradiction. On the other hand, 75% of the primary energy used in Germany, for example, is imported. So I would say there's no way that all the hydrogen in Germany or the other countries are needed. are needing really needs to be or can be produced in the respective territory. So it needs to be important. That's why we are setting on our strategy as well on trading hydrogen, transporting hydrogen, storing hydrogen, and using exactly the business models we have. In the global commodity business, for us it doesn't make a big difference if you're trading LNG or liquid hydrogen, or if you're trading natural gas or hydrogen. If you're storing it, if you're optimizing it, it's the same kind of business mechanic. So from our point of view, it will not be so much like asset rotation. It will be developing the assets gradually and over the time into a hydrogen environment, and of course, using the capabilities we have in our global commodities to just use that. Of course, we will invest into growth projects, but at the beginning, I see that hydrogen is not a complete good business case. It will develop over the time. But for us, it's essential to invest in all parts of the value chain at the moment to find out where the whole journey is going. And just to highlight a little bit the complexity, if you just look at the color code, so that has developed in the last, say, years from gray, white, green, blue, turkeys. There's another one coming up from the color. As far as I know, you see that there's a lot of fantasy in there, but it will, for us, not a drastic move, it will be consequent development and steps which we can digest, which makes our business more important.

Okay, Alberto, questions to answer?

Yes, thank you. Thank you so much. You're welcome.

The next question is from Dipa Venkateshwaran of Bernstein. Your line is now open. Thank you so much.

I had a follow-up question on hydrogen as well, and then one on your coal closure. So maybe first with the coal closure, could you clarify how much is the coal EBITDA that you're expecting for this year within the fossil division? Is it basically loss-making right now? So obviously the financial impact will be positive, or actually is there any positive contribution to be aware of? apart from, of course, your new DAPN plant, so aware of that. Second question on hydrogen, I think you mentioned that you see both green and blue play a role, and you see blue playing a transitionary role. But I think one question is we've not really seen any big, large blue hydrogen projects. CCS hasn't really been done at lab scale. There's really no CCS carbon storage or transportation. So how confident are you that blue hydrogen is going to fill the transitionary gap? Might green not overtake it already? And would you be interested in directly participating in the supply of green hydrogen by building wind farms or solar parks or whatever, more directly rather than sourcing it from someone else? Thank you.

Let me start to give Sasha a little bit more time to dig up some numbers. Hopefully it will be enough. So if I'm continuing to speak very long-winded, he is still looking at my face and looking for the number, but I'm just joking. If you're coming to hydrogen, I really believe that blue hydrogen or turquoise hydrogen will play a role because the easiest way to generate hydrogen is really using the natural gas. It's done already with the grey hydrogen where you just release CO2 to the atmosphere, but it's the cheapest way to produce hydrogen at the moment. So if you're adding up some complexity to capture the CO2, or in case of the turkeys, hydrogen, using a kind of paralysis to just take the C out of that, so the carbon, and not generate any CO2, then of course, I think it's a natural expansion of the technology. Price-wise, we just have to say the gray one, which is releasing CO2 as the cheapest one, turkeys, and blue one, It's a little bit more expensive but still much, much cheaper than green hydrogen because green hydrogen is coming with a hefty price tag because it's generated out of renewables. At least I see the price difference by more than 30 percent or even 40 percent. And just this price gap will probably play in most of the economy's role that you would play with both sources, try to cover the gap with technology jumps over time and so on. For us, for Uniper, I think we probably will not look intensively to build solar farms or wind farms on our own, but probably playing with PPAs to taking the power market that uses for hydrologists or optimizing the power flow. Because I see for the first point of view, especially in Germany, a good potential to harvest this ghost electricity, which we can't use. If you have too much wind, we cannot transport it in Germany because we don't have the interconnectors So we are paying actually around 1.2, 1.3 billion every year in Germany for wind farms for not generating energy. To compare that or to use that energy and that amount of money to produce hydrogen is probably a good starting point. It's not enough volume, but definitely the right way to start with. I hope that answers your question, and then I will hand it over to Sascha.

who is digging himself out of the hole. So with respect to your question, are we going to make money with coal-fired generation in 2020? The answer is yes, most definitely. However, as you probably would expect deeper, the money generation is quite dedicated to certain generation facilities or countries. Certainly a big part of that money generation comes from Germany, related to the Datteln plant, but also to the Netherlands, Maasvlakte, but quite possibly also to the UK. So it is dedicated to certain stations, while the contribution of other stations that may be more exposed to the coal exit at certain points in time is more limited.

Okay, thanks.

The next question is from Vincent of JP Morgan. Your line is now open.

Yes, good morning. Just to bounce back a bit here on the call closure again, so the auction's not coming. Basically, you made a few comments there. It's a bit difficult for me to hear everything. what do you expect in terms of compensation there, especially through the years, early years and the following couple of years as you got more, I would say, units, profitable units to basically come to the crunch. So that would be interesting for us to understand the part of the equation of what we could expect in terms of compensation for closure. I think that's That's what Deepa was looking at as well here, in a way. The second question was more related to the CCDB fleet. You're putting back airship 4 and 5. We have seen a tightening of the power markets, so the clean sparks are improving. On the other hand, we've got the outright, which has basically been weakened by lower gas prices. Is it a fair assumption to assume that you are net positive in this situation for the longer-term outlook? How do you see the overall evolution of the commodity market for your specific portfolio? Thank you.

That's Andrea speaking. Good morning, Vincent, and thanks for the question. Let me start with the first one. At the moment, it's a little bit complex to answer that because, yes, we have a core exit law, but it has not passed all the levels, so we need the signature from the Chancellor Merkel, from the President, and it has to be published. On the other hand, the BNSR has not produced a complete set of rule books, how the auctions are running, which and so on. The European Commission has to approve the German core exit law as well. So there's still a lot of noise about this nitty-gritty details how this would work. The only thing what is clear is the amount of gigabytes they want to take out with the auctions. They have put a clear price cap, a maximum price cap on the auctions. So if you're starting early and bidding in the process, you cannot go over that price cap. You can go under that price cap, which sparks some competition, some readiness considerations, and so on. So it will be kind of thing we have to model from a game theory. what we are doing who is who is participating and not of course if you're winning you're getting you're getting some benefits for your employees you get some some payments so at the moment we really looking at that and trying to understand how the process will work vincent on the uh on the ccgt profitability i

I'm not 1,000% sure whether I got your question in full, but let me try to start and then you can specify, i.e., the upcoming change of issuing 4 and 5 from reserve into the merchant market is an earnings positive versus the prior status and is also an earnings positive versus the prior year, let's say, medium double-digit million. I'm not sure whether you then put that into the perspective of changes in the outright position. If so, maybe you want to just reiterate that part of the equation, or that part of the question.

Yes. My question was indeed this one, basically. Air-shin point far back, prostitutes' CCTs increased, so it's positive. for bringing back these two units to the rest of the fleet. So we had a positive on one hand of the equation, but we got a negative on the lower power prices. So net-net at Uniper portfolio level, is it a positive or a negative? And on the coal auction, my question was a bit sneaky. It was, we have a cap, but we don't really have a floor. So is it fair to assume it could be zero basically here?

Yeah, but you know, you're describing it completely right. You are flexible in which price you put up in the auction, but I think you would understand that I would not give you any details what is our strategy of it because it's a competitive process. The government has just made sure that the prices cannot go sky high and of course they put an incentive in that you auctioned as early as possible because the incentive to getting high prices is going away over time. But everybody in the market has now to run their own numbers. What are their benefits? uh and what about uh what is their right strategy and of course depending on customer contracts and so on because we cannot tend to instruct us where we have maybe to deliver energy or we have talked to customers and that's uh it's a highly competitive project uh a process and on the other hand you still have to be nets are there which can tell you where you can auction but you're not allowed to pass on because we consider you as a system relevant so it's uh That will be an interesting couple of months going forward with that.

Going back to the CCGTs, the comparison depends on the starting position. If outright is pretty much hedged, then I think the CCGT contribution could be higher. If you're comparing the Yersin 4 and 5 delta contribution with an unhedged outright position of Uniper, then certainly the swing factor in the outright position is higher. And then just a small add-on to the items Andreas mentioned on cold exit. I just want to remind you that in our March presentation, we have illustrated a few positives and negatives that we think will influence our earnings in the period 22 to 20. And from my memory, there wasn't a box that said compensation for coal closures. That may tell you something about the base planning. Can we ask the next question, please?

The next question is from Peter Buschiger of Bank of America Securities. Your line is now open.

Yeah, thank you. Good morning, and thanks for taking my question. circling back on to hydrogen um it'd be useful if you could highlight whether any of the green or blue hydrogen opportunities that you highlight on page four are already economic uh without any kind of government uh support and and also a really sort of difficult uh question to answer but Over what sort of timeframe do you think hydrogen could start to make a meaningful or noticeable earnings contribution to Uniper? And then second question, I was just wondering if you could describe in a little bit more detail why Betasovskaya is delayed. Again, apologies, I sort of missed your comments on that at the start of the call. And what is the risk, I guess aside from a sort of COVID second wave, that there could be any further delays? And have there been any delays at your other projects like Schloven and Ershin 6, please?

Okay. Thank you for the question. In regards of hydrogen, I think it's a complex question at the moment. We are a little bit colorblind on hydrogen. We don't really care what color it is as long as CO2 neutral and not releasing CO2. The price tags and the cost for that and the technology jumps which we will see will really be decided because the customer at the end decides and the government what kind of framework they are setting in. At the moment, we are cautious about the timeline of profit contribution. I think that's the right thing to say. We are investing into projects. We want to get some subsidies in some countries, so we are really playing with these projects and so on. I think we are a little bit cautious with earnings projections. On the other hand, we are quite optimistic that the earnings projections could be very much faster than we think because I believe that you could see the same kind of technology jump like with renewables where nobody would have forecast that the technology in renewables would develop that fast and rapidly. five to ten years to having some contributions is at the moment realistic. If it's getting earlier, it's fine. It really depends how this market is developing. And regards of value, about the delays, I think it was your second question, and about COVID. Actually, it's very hard for us to say. You know, we were on a good track, but COVID is a nasty thing, as we see. Russia is a complex environment. The workers and the on the side and we have normally more than a thousand coming from Kazakhstan and other areas. So first they were blocked for leaving their countries, then they opened the border and they came in and then we got the virus there, then we have to contain them, quarantine them, test them. So if there's a second wave or a third wave or another outbreak, then of course it's very hard to to get a statement from that. On the other hand, the good news is we have made very good progress on the technical side. I think the hairy parts are all over. We are now doing insulations and decorative paintings, some fire protection. So it's a mixed picture. It's very unfortunate that COVID-19 has impacted our project schedule. but I'm afraid I can't guarantee anything about COVID at the moment, but probably nobody in the world can assess a second or third wave.

There was at least another question, I think, with respect to potential delays of the other projects, including Scholven and Irsing 6. Certainly, COVID is not making it any easier. That's obvious, but we are very closely working with our

contractors and so far we are well on track so nothing to report on the negative side from that perspective great thanks very much for your answers the next question is from sam area of ubs your line is now open hi good morning everybody thank you um for the presentation today um very clear and super helpful i just wanted to come back to a question i suppose on on longer term portfolio strategy or group strategy, and you've clearly in the earlier part of this year been evolving your approach to coal and carbon overall, but obviously a large chunk of your fossil footprint is in Russia, and if you look at it from the Fordham Group point of view, I think something like two-thirds of the CO2 in the group is now in Russia. And so just given the way the, you know, Fortum and your strategies are evolving, I'm just trying to figure out how sustainable is that big carbon footprint in Russia. So my idea is, if you don't mind, can I ask you very directly, do you see Unipro as a long-term core part of Uniper? Or would you at least consider scenarios in which Uniper and Unipro might one day go their separate ways? And I guess I don't know if you can't comment on that directly, I might have some sort of other ways of asking the question, but let me pause and see if you are happy to comment on that directly.

Thank you for the question. I think you can rephrase the question as you want. You will not really get a clear answer from me. because it's a stable earning provider, as you always explained. Uniper is sitting on a three-legged chair. We have the European generation, we have the commodity trading, and we have the international. Now we are calling it, after divesting Brazil and France, the Russian generation. It's a stable earning procedure. It's supporting our rating, our 12B rating, in a very essential way. So at the moment, I cannot imagine having this situation without From my point of view, we know what we are doing in Russia. We're decarbonizing the portfolio as well, stepwise, so we have to present our strategy there as well, with modernization. Varasovskaya, of course, is a lignite-fired plant, and we understand that. But, you know, it's a complex world. Russia has signed the Paris Agreement and has committed to reduce their CO2 footprint. It's up to them to regulate how they want to do that, and it's accepting power generation from NICNA, from Hardcore, from whatever source, and they are fulfilling the Paris Agreement, then I think we should live by these rules. Different countries, different rules. That's the way it is and that's how I see it.

That's a very interesting and helpful answer. Do you mind if I just, as a follow-up, just reconfirm. Is it right that what you're saying is if you didn't have the Russian holding that the implications for the credit rating would be negative? I suppose there'd be a trade-off between not having the stable cash flows from Russia but also having less fossil exposure and less different international sovereign backdrop and that might be treated differently in the rating formula. And the other thing I was just wondering if you could comment on I mean, I know in your position companies are often approached by potential buyers. Are you ever approached by potential buyers for your sake in Unipro? Is it something that people ever come to you over? And I'm trying to sense if there would be an active market there or not.

I only confirm that we consider Unipro as an essential part of our strategy and of our portfolio. I think we'll hand over the rating issues for more detailed answers to Sascha. But as I explained, it's one-third of our income. It's very stable. So from that point of view, if you're looking at rating issues, you're always looking at good, stable income streams. And as I understand, if you're selling something, the income stream has gone for that as well, right? So from that point of view, if you look where we are coming from, how hard Uniper has fought to get this BBB rating confirmed and stabilized by divesting assets which were valuable to creating the situation we have had, I can hardly imagine how that would work.

So just to add to that, so our participation in Unipol is certainly not an obvious negative in the rating equation. As you know, the agencies, they usually look at business risk, they look at financial risk, I think Andreas commented on the positive aspects of the financial risk, i.e., it is largely a regulated earning stream. Yes, it does come from a country with a higher country risk that somewhat works against it, but still it's quite an important piece in the UNEPA puzzle.

Okay. Thank you very much for your answers. It's very helpful.

You're welcome.

The next question is from . Your line is now open.

Good morning. Two questions from my side. One, Andreas, I'm not quite sure if I got this right in the beginning yet again on hydrogen. You said there will be a separate business line. But given that, I'm not sure if I really understand. It seems to me that your view on the economics of hydrogen are such that it's not very profitable, not much money in it, but you're willing to help with your existing trading and storage operations. So this pretty much just falls under gas optimization. So is that the hydrogen strategy for now? Use your existing assets and trading capabilities and go into development and other stuff once the economics justify that. The second question is on Nord Stream 2. There is some confusion, I believe, as to what and who, more importantly, sanctions currently apply to. Is it existing partners? Is it new partners? Can you enlighten us where we are and the Can we actually go ahead with the project? And what is the worst case scenario for Uniper? If the project failed to be completed, what would be the impact? Is it just a simple impairment of the loan you've given? Just to show some scenarios there.

Coming to the hydrogen structure, and I think already in your question, and thank you for that, you highlighted the complexity what we have. We have activities on the asset side of our house with hydrolysis, with the pilot projects we have in Germany and in other places. And of course, we have the global commodity, which are looking forward to optimize these things, import that, transport that, and store that. And as we found out, as we're looking into that hydrogen, we found out that there are so many touch points in Uniper, because there are so many groups which have touched hydrogen, which have an interest in hydrogen. And it's at the moment not clear If the balance will swing into assets, means production of hydrogen, or going into global commodities, trading it, transporting it, and storing it, then it's just too early at some point. Nobody knows in which direction that goes. So that's why we created a virtual P&L and a virtual group, so not to decide is it an asset-driven thing and then they neglect the commodities, or is it a commodity-driven unit and it's neglecting the assets on the production side. So this unit is reporting to me. getting the data together, we're driving the project, and then we observe where is the right place for that virtual organization in the right part of time. On the other hand, I'm a strong believer you should start a P&L if you have a significant size of the business, if you're creating money, and if you see that it's running, because all the overhead, all the red tape we have in big companies always are normally killing small projects, and you are right, hydrogen is starting, is taking off. There's a lot of fantasy in the market, a lot of subsidies, a lot of plans. But to really make money with hydrogen, except grey hydrogen, is at the moment, from my point of view, without subsidies and without regulatory help and investments, quite a stretch. In regards of Nord Stream 2, I don't know if I understand your question completely. We are just a financial investor. We have paid in our financial commitments full since March this year, I think. That's enough money and funds to finish the pipeline from our point of view. From that, the contractual things, I'm not really able to comment on that. There seems to be some progress on the pipeline, but actually given the sanctions and all the environment, we're not hearing too many technical details in any way. It was not for me to speculate. uh what they are doing at the moment and when they are going to finish i i assume and we are we are believing it's the right project it will be finished uh we are always believing and balancing uh our strategy with lng terminals and with nordstrom too because we are standing for supply the security of supply but the worst case would be of course if the thing would never be finished and then of course the question is can we get our money back or not But that's the thing to be seen at the moment. I don't expect that scenario, and I think I'm aligned there probably with all the other financial investors of that project.

Very clear. Thank you.

We have to close Q&A now. Of course, the investor relations team is happy to answer any outstanding questions during the day. Thank you very much for your participation in this call and looking forward to hear you in the Q3 call in November.

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.