REN Redes Energeticas Nacionais SGPS S A : 2022 first quarter results

Results Presentation

REN 1Q22

20th May 2022

AGENDA

1.

2.

3.

Overview of the period

Business performance

Closing remarks

1Q22 RESULTS

2

1. Overview of the period

1Q22 RESULTS

3

1. Overview of the period

KEY MESSAGES

1Q22

EBITDA grew 3.5% YoY to €118.4M, reflecting the positive performance of both domestic and international operations.

Domestic EBITDA improvement driven by: (1) the positive impact from TOTEX revenues1 (+€5.1M); (2) the increase in Opex Revenues (+€1.2M); (3) higher remuneration from RAB (+€0.7M). However, these were offset by lower regulated incentives in the electricity business (-€4.4M) and higher core opex (+€1.7M), due to higher electricity costs.

Positive international business contribution, with EBITDA growing +€2.1M, with Transemel representing +€1.2M.

Net Profit improved to €6.0M (an increase of 32.6% versus 1Q21), mostly due to EBIT improvement (+€2.0M) and better Financial Results (+€1.3M), partially offset by higher taxes (+€0.9M) and higher levy (+€0.9M), following the increase in regulated asset base. 1Q still impacted by full amount of yearly energy sector levy.

Capex decreased €4.5M to €27.3M (vs €31.8M in 1Q21). Transfers to RAB were down €3.7M vs 1Q21, mostly driven by the electricity and gas transmission businesses (which decreased €4.1M), partially offset by the increase in Natural Gas Distribution (+€0.4M).

Renewable energy sources (RES) reached 48.8% of total supply (approx.-29.9pp than in 1Q21), due to the reduced availability of renewable energy, partially attributed to the severe drought. Electricity consumption increased by 1.3% whilst natural gas consumption grew by 6.6%.

High quality of service delivered during the first three months of the year. The level of energy transmission losses decreased relatively to the previous year and the gas combined availability rate remained at full capacity.

1 Includes RAB remuneration and amortizations, as well as opex recovery in electricity transmission activity. This comes as a result of the new remuneration model based
on Totex, introduced in 2022, for the Electricity Transmission activity, under which REN's Opex and Capex is remunerated through a fixed annual amount defined by the	1Q22 RESULTS	4
regulator for the entire regulatory period, from 2022 to 2025.

1. Overview of the period

SECTOR OVERVIEW

Commitment to hydrogen infrastructure and energy transition

Hydrogen

Readiness

Exceptional setting of electricity tariffs from 1 July 2022

Proposal for

natural gas tariffs

2022/2023

Energy Transition and renewable gas

• Relevant national gas infrastructures must become hydrogen ready according to the Portuguese law, to allow H2 and natural gas blends up 5% in 2025 and 10-15% in 2030. REN created a Task Force (TF H2REN) to identify and carry out the required activities and investments to ensure that its gas transmission, storage and distribution facilities will be compliant with natural gas & hydrogen blends up to 10% until 2023.
• According to ERSE this exceptional review of tariffs in 2022 is essential to ensure greater tariff stability in the face of the current context of high volatility and high price in the wholesale electricity market. This review intents to mitigate the energy cost impact in consumer bills, through the reduction of the Network Access tariffs.
• This reduction is made possible by the early return to consumers of the higher than expected returns from electricity production under the special regime (PRE) and with the Power Purchase agreement still under operation, as well as additional revenues from the greenhouse gas emission allowance auctions'.
• ERSE submitted to the Tariff Council (TC) the confidential documentation supporting its proposal for tariffs. The TC must issue an opinion on the proposal within 3 weeks, and it is up to ERS, to publish its final decision until 15th June. On 1st July, tariffs for the next six months will come into effect.
• ERSE submitted to the Tariff Council (TC) the confidential documentation supporting its proposal for tariffs and gas prices. The TC must issue an opinion on the proposal within 30 days, and it is up to ERSE to publish its final decision until 1st June. On October 1st, tariffs for the next year (which runs from 1st October 2022 to 30th September 2023) come into effect.
• As this is a regulatory intermediary year for gas, there are no relevant regulatory issues for REN.
• REN applied to the Last Phase of the Portuguese Recovery and Resilience Plan (PRR) with the "H2 Green Valley"
  Agenda, for the development of a Green H2 ecosystem in Sines with relevant partners, Dianagás, Bosch, Hylab, INL and IST, just to name a few. This project focuses on pure H2 and could be complemented by an integrated storage to improve flexibility for H2 producers and consumers. The Final proposal was submitted on the 13th April and a decision is expected in 2Q.

1Q22 RESULTS		5