ALTEO Energy Services Public : Management commentary of 2024 H1 report of ALTEO Group – 2024.09.02

ALTEO NYRT.

INVESTOR PRESENTATION -

ALTEO Group

H1 2024

(non1-audited financial income)

NON-AUDITED FINANCIAL INCOME

H1 2024

This information was not compiled on the basis of international accounting standard IAS 34 - Interim Financial Reporting; the information contained therein are non-audited in terms of 2024 results, and have not been audited by an independent auditor. This presentation only serves to provide preliminary information only.

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KEY ECONOMIC EVENTS IN 2024

• In line with previous expectations, the energy market opportunities that emerged in 2022 and continued into 2023 did not survive for long, and prices started to fall.
• Thanks to its structure, its strategy based on sustainability and renewable energy production, its diversified portfolio and its outstanding team of professionals, ALTEO has been able to actively seize arising opportunities. With a view to its long-termstrategy ALTEO has seized every opportunity to stabilize its profitability at a higher level than before the energy price boom in 2022, despite the moderating energy market price environment. Accordingly, considering the energy prices in the first half of 2024, ALTEO achieved an outstanding result, almost one and a half times that of H1 2021, the last year before the price boom.

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ALTEO consolidated quarterly EBITDA

2021	2021	2021	2021	2022	2022	2022	2022	2023	2023	2023	2023	2024	2024
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2

• CONSOLIDATED EBITDA AMOUNTED TO HUF 9.8 BILLION, down from a record HUF 12.8 billion in H1 2023 due to energy market opportunities gradually declining since the exceptionally high earnings in 2022 but, at the same time, the Q2 EBITDA of HUF 5.3 billion already exceeds the EBITDA of HUF 4.9 billion achieved in Q2 2023.
• THE CONSOLIDATED NET PROFIT WAS HUF 5.8 BILLION, down by HUF 3 billion compared to H1 2023, mainly due to operating items.

• ALTEO intends to continue exploiting all the opportunities afforded by the market in the period ahead. ALTEO's management considers the results of the key segments and business lines to be successful, highlighting the growth of the waste management business.
• ALTEO continues to pursue the active INVESTMENT ACTIVITY highlighted in its strategy. A significant part of the investment projects launched in 2023 will be handed over in 2024: the gas engine installation project in Sopron has been completed, a solar power plant in the region of Tereske was completed on August 8, 2024, and a gas engine and battery energy storage project in Győr is expected to start production in Q3.
• Another significant achievement of the half-year was that ALTEO won a HUF 9.4 billion state grant in the RRF tender for an energy storage development investment of around HUF 28 billion, which will be the largest greenfield investment in ALTEO's history.
• In addition to the above, ALTEO is continuously exploring energy and waste management investment opportunities in Hungary and the region,

and continues to identify opportunities for strategic cooperation between MOL Nyrt. and ALTEO.	3

KEY EVENTS IN 2024

• As of January 10, 2024, LÁSZLÓ HEGEDŰS JOINED ALTEO'S MANAGEMENT AS DEPUTY CEO FOR STRATEGIC HR AND COMMUNICATIONS. Mr. Hegedűs has more than 20 years of professional experience, including as HR Director at the Central European University and as International HR Manager at BlackRock's Service Centre.
• January 18, 2024 - FE-GROUP INVEST Zrt. HAS WON A HUF 300 MILLION GRANT in the call for applications announced by the Energy Strategy Institute, which it will use to ensure technological support in the transitioning of waste from products subject to product charges collected in the deposit refund system introduced from January 2024, to the circular economy. This enables the ALTEO subsidiary to implement an investment project that will allow it to appropriately sort and treat more than 15 thousand tons of waste collected in the deposit refund system per year.
• On March 1, 2024, ALTEO Nyrt., which is listed on the Prime Market of the Budapest Stock Exchange, was awarded the "Company with Long-term Share Price Increase" prize at the BEST OF BSE 2023 awards ceremony.
• On April 19, 2024, the General Meeting ADOPTED ALTEO'S 2023 ANNUAL REPORT AND INTEGRATED REPORT.
• On April 19, 2024, the General Meeting adopted a decision on the payment of a DIVIDEND OF HUF 4 BILLION GROSS AND AN ADDITIONAL EXTRAORDINARY DIVIDEND OF HUF 4 BILLION GROSS (starting date of dividend payment: June 7, 2024; record date: May 31, 2024).
• On May 27, 2024, ALTEO'S SUBSIDIARY AND MOL SIGNED A 10-YEARLONG-TERM SERVICE CONTRACT for the utilization of high inert natural gas. The service includes preparing for transport and transporting high inert natural gas extracted from the gas wells in Csombárd, then unloading the same at the MOL site, and delivering it to the combustion equipment. ALTEO is implementing an investment of approximately HUF 820 million to provide the service
• On May 28, 2024, Scope Ratings GmbH carried out the annual review of the credit rating of ALTEO's issued bonds, as a result of which the credit rating was maintained, with ALTEO as issuer and the bonds REMAINING IN THE BBB- CATEGORY WITH A STABLE OUTLOOK.

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KEY EVENTS IN 2024

• On June 24, 2024, the GRANT CONTRACTS ANNOUNCED IN THE RRF CALL WERE SIGNED, under which several subsidiaries of ALTEO were awarded a total of HUF 9.4 BILLION IN GRANTS for a total INVESTMENT OF NEARLY HUF 28 BILLION. Overall, the investments represent the largest greenfield investment project in ALTEO's history. ALTEO has undertaken to operate the storage facilities for which the grant was used, for at least 10 years, with respect to which the tender provides A REVENUE COMPENSATION BASED FIXED GRANT PROJECTED ON STORAGE FACILITY PERFORMANCE FOR 10 YEARS. According to the tender terms, the operation of the storage facilities must commence on or before April 30, 2026, thus supplier contracts are to be concluded, and construction works are to be started as early as in H2 2024.
• In line with previous practice, following the expiry of the 2024 Remuneration Policy 2024 this year, on June 26, 2024 ALTEO adopted the 2026 ESOP General Remuneration Policy as an incentive to employee groups. This policy provides benefits to more employees if remuneration conditions are met. Furthermore, the 2026 Senior Management Remuneration Policy, which serves to incentivize the CEO and Deputy CEOs has also been adopted.
• On August 8, 2024, ALTEO's largest solar power plant, with a capacity of 20 MW, LAUNCHED LIVE OPERATION in the region of Tereske.

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ALTEO GROUP PORTFOLIO

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ALTEO GROUP PORTFOLIO

					GAS ENGINE AND
	RENEWABLE ENERGY		INDUSTRIAL AND	HEATING POWER PLANTS,
	PRODUCTION		COMMERCIAL SERVICES	ENERGY STORAGE
					FACILITIES
	ALTEO Group has significant		ALTEO Group facilitates the efficient	ALTEO Group operates
	competences, among others,	energy management of its consumers	high-efficiency, combined heat
	for exploiting renewable energy		through the services provided to	and electricity (cogeneration) plants,
	sources.		industrial facilities.	and energy storage facilities.

WIND FARMS

• Ács - 2 MW
• Bábolna - 15 MW
• Bőny - 25 MW
• Jánossomorja - 2 MW
• Pápakovácsi - 2 MW
• Törökszentmiklós - 1.5 MW

RENEWABLE GAS

• Debrecen - landfill gas - 1.1 MW
• Nagykőrös - biogas - 2 MW

HYDROPOWER PLANTS

• Felsődobsza - 0.9 MW
• Gibárt - 1 MW

SOLAR POWER PLANTS

• Domaszék - 2 MW
• Monor - 4 MW
• Balatonberény - 6.2 MW
• Nagykőrös - 7 MW
• Tereske - 20 MW - (since August 8, 2024)

BORSODCHEM

• BC Power Plant - operation - 47 MWe / 296 MWth
• BC-Power- operation - 50 MWe /123 MWth

MOL Petrolkémia

• TVK Power Plant - operation - 36 MWe / 297 MWth
• Tisza-WTP- treated water service

Heineken Soproni Sörgyár

• heat supply

MAINTENANCE SITE

• Százhalombatta
• Polgár
• Füredi út

HEATING POWER PLANTS

• Ózd Power Plant - 4.9 MWe / 4.9 MWth
• Tiszaújváros Heating Power Plant - 9.4 MWe /
• 1. MWth
• Kazincbarcika Heating Power Plant - 9.3 MWe /
• 1. MWth
• Füredi út Gas Engine Block Power Plant -
• 1. MWe / 16.5 MWth
• Győr Power Plant 18 MWe / 24 MWth
• Sopron Power Plant 6.2 MWe / 37.7 MWth

ELECTRICITY STORAGE FACILITIES

• Füredi út Storage Facility - 6 MWe
• Kazincbarcika Storage Facility - 5 MWe

ELECTRICAL BOILERS

• Tiszaújváros Heating Power Plant - 6 MWth
• Kazincbarcika Heating Power Plant - 6 MWth
• Sopron Power Plant - 5.1 MWth

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IFRS)

Consolidated Statement of Profit or Loss

	6.30.2024	6.30.2023	Change	Change
			HUF million	%
data in million HUF	non-audited	non-audited	over previous	over previous
			year	year
Sales revenues	49 787	58 854	(9 066)	(15%)
Material expenses	(32 015)	(37 945)	5 930	16%
Personnel expenses	(5 096)	(3 731)	(1 365)	(37%)
Depreciation and amortization	(2 222)	(2 088)	(134)	(6%)
Other revenues, expenses, net	(3 276)	(4 708)	1 432	30%
Capitalized own production	362	296	66	22%
Impairment loss	-	-	-	N/A
Operating profit or loss	7 541	10 678	(3 137)	(29%)
Net financial income	(147)	384	(531)	(138%)
Profit or loss before taxes	7 394	11 063	(3 669)	(33%)
Income tax expenditures	(1 547)	(2 190)	643	29%
Net profit or loss	5 847	8 873	(3 025)	(34%)
Of which the owners of the Parent Company are entitled to:	5 683	8 961	(3 278)	(37%)
Of which the minority interest is entitled to:	164	(88)	252	286%
Base EPS (HUF/share)	286,28	451,41	(165,13)	(37%)
Diluted EPS (HUF/share)	285,14	449,59	(164,45)	(37%)
EBITDA*	9 763	12 766	(3 003)	(24%)

Consolidated Comprehensive Statement of Profit or Loss

EBITDA was down by HUF 3,003 million, compared to last year with sales

revenue dropping by HUF 9,066 million.

Most important changes in operating profit and loss items:

• REVENUE: The decrease is mainly due to the significantly lower energy market price environment

in the Heat and Electricity Production segment. The decline was somewhat offset by higher

revenues in the Retail segment due to a larger electricity portfolio and higher wind turbine

revenues resulting from the exceptionally windy weather in Q1.

• MATERIAL EXPENSES: Dropping energy prices are also making their impact felt here, particularly

in the ancillary services market with a high margin content (lower material expenses relative to

sales revenue). Expenditures increased in proportion to sales revenue due to the significant

portfolio expansion in the retail segment.

• PERSONNEL EXPENSES: The increase is mainly due to the headcount expansion needed for

growth, the labor market situation and long-term incentive schemes.

• DEPRECIATION: Depreciation exceeds the 2023 level, in line with the larger asset portfolio.

• OTHER REVENUES, EXPENSES: The increase in other income was due to the improvement in

the scheduling accuracy of Renewable Production Management and the lower scheduling

Net profit or loss

Other comprehensive income (after taxes on profits)

Comprehensive income

Of which the owners of the Parent Company are entitled to:

Of which the minority interest is entitled to:

5 847	8 873	(3 025)	(34%)
1 948	(1 845)	3 793	206%
7 795	7 027	768	11%
7 631	7 116	516	7%
164	(88)	252	154%

surcharge on account of the introduction of the balancing price cap by MAVIR in December.

*In the opinion of the Company, the profit category that can most reliably be used to measure the profitability of the Group is EBITDA (a profit category from which financial items, taxes, depreciation, and non-systematic reductions, typically impairments, have been removed). Therefore,

impairment and local business taxes and innovation contributions, if any, have been removed from the Other Revenues and Other expenses lines	8
that are used to provide a more detailed elaboration of the EBITDA in the above table.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IFRS)

Consolidated Statement of Profit or Loss

	6.30.2024	6.30.2023	Change	Change
			HUF million	%
data in million HUF	non-audited	non-audited	over previous	over previous
			year	year
Sales revenues	49 787	58 854	(9 066)	(15%)
Material expenses	(32 015)	(37 945)	5 930	16%
Personnel expenses	(5 096)	(3 731)	(1 365)	(37%)
Depreciation and amortization	(2 222)	(2 088)	(134)	(6%)
Other revenues, expenses, net	(3 276)	(4 708)	1 432	30%
Capitalized own production	362	296	66	22%
Impairment loss	-	-	-	N/A
Operating profit or loss	7 541	10 678	(3 137)	(29%)
Net financial income	(147)	384	(531)	(138%)
Profit or loss before taxes	7 394	11 063	(3 669)	(33%)
Income tax expenditures	(1 547)	(2 190)	643	29%
Net profit or loss	5 847	8 873	(3 025)	(34%)
Of which the owners of the Parent Company are entitled to:	5 683	8 961	(3 278)	(37%)
Of which the minority interest is entitled to:	164	(88)	252	286%
Base EPS (HUF/share)	286,28	451,41	(165,13)	(37%)
Diluted EPS (HUF/share)	285,14	449,59	(164,45)	(37%)
EBITDA*	9 763	12 766	(3 003)	(24%)

Consolidated Comprehensive Statement of Profit or Loss

• FINANCIAL INCOME: A lower interest rate environment compared to last year resulted

in lower interest income, partly offset by higher profit on foreign exchange differences and

lower interest paid.

• INCOME TAXES: The lower profit before taxes compared to last year is responsible for

the drop in income taxes.

• NET PROFIT dropped by 34% compared to the base period, as a result of the above

operational impacts.

• OTHER COMPREHENSIVE INCOME: ALTEO enters into hedging transactions in order to

secure the purchase price of raw materials and, thereby, the profit content of heat and

electricity sold at fixed prices, and to fix the interest rates on loans. Other comprehensive

income includes the result of changes in the fair value of transactions as financial instruments

that hedge the price of gas used to produce electricity at the time of setting the official heat

prices and/or sold at fixed forward prices, the EUR/HUF exchange rate and interest rate

changes, until the real transaction is closed. The values shown on this line are not indicative of

Net profit or loss

Other comprehensive income (after taxes on profits)

Comprehensive income

Of which the owners of the Parent Company are entitled to:

Of which the minority interest is entitled to:

5 847	8 873	(3 025)	(34%)
1 948	(1 845)	3 793	206%
7 795	7 027	768	11%
7 631	7 116	516	7%
164	(88)	252	154%

future trends in profit or loss.

*In the opinion of the Company, the profit category that can most reliably be used to measure the profitability of the Group is EBITDA (a profit category from which financial items, taxes, depreciation, and non-systematic reductions, typically impairments, have been removed). Therefore,

impairment and local business taxes and innovation contributions, if any, have been removed from the Other Revenues and Other expenses lines	9
that are used to provide a more detailed elaboration of the EBITDA in the above table.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS)

Assets and receivables			data in million HUF
	6.30.2024	12.31.2023	Change	Change
	HUF million	%
	non-audited	audited	over	over
	previous year previous year
Non-current assets	48 541	43 573	4 968	11%
Current assets	34 141	48 405	(14 264)	(29%)
of which effect of Other comprehensive income	639	877	(238)	(27%)
of which Cash and cash equivalents	10 694	24 345	(13 652)	(56%)
of which Inventories	1 146	990	156	16%
of which Trade receivables and accruals	15 712	15 560	152	1%
of which Other current assets	5 951	6 633	(683)	(10%)
TOTAL ASSETS	82 682	91 978	(9 296)	(10%)

Equity and liabilities			data in million HUF
	6.30.2024	12.31.2023	Change	Change
	HUF million	%
	non-audited	audited	over	over
	previous year previous year
Equity	33 718	33 854	(136)	(0%)
of which effect of Other comprehensive income	(441)	(2 389)	1 948	82%
Long-term liabilities	27 733	28 653	(921)	(3%)
of which effect of Other comprehensive income	1 080	-	1 080	0%
of which Credit, loans, bonds, leasing	23 908	24 398	(490)	(2%)
of which Other long-term liability	2 744	4 255	(1 511)	(36%)
Short-term liabilities	21 232	29 470	(8 239)	(28%)
of which effect of Other comprehensive income	-	3 266	(3 266)	(100%)
of which Credit, loans, bonds, leasing	2 203	2 234	(32)	(1%)
of which Trade payables and accruals	12 424	16 101	(3 676)	(23%)
of which Other short-term liability	6 605	7 869	(1 265)	(16%)
TOTAL EQUITY and LIABILITIES	82 682	91 978	(9 296)	(10%)

• INVESTMENTS, CAPITAL EXPENSES Several capacity expansion and efficiency improvement projects are underway during the period, with delivery expected in Q3 2024.
• CURRENT ASSETS Available free cash and cash equivalents decreased significantly due to the dividend payment in June 2024 and increased capital expenditures. The increase in other current assets is due to an increase in CO2 and EEOS stocks and advances paid on investments. The decrease in the stock of trade payables and accruals is primarily the result of falling energy market prices and seasonality. The trade receivables portfolio, however, did not decrease, as the portfolio expansion of the Retail segment and the difference in the revenue structure of a given month of the Heat and Electricity Production and Management segment compensated for this. The decrease in other short-term liabilities can be traced back to the lower income tax payable as a result of the settlement of the tax liability arising from the release of the previous development reserve.
• LONG-TERMLIABILITIES, SHORT-TERMLOANS portfolio decreased with the early repayment of the HUF 0.4 billion loan from FE-GROUP INVEST Zrt., in addition to loan repayments set out in contracts.

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