TAURON Group s H1 214 financial results August 21, 214
H1 214 key financial parameters TAURON Group s H1 214 financial results [PLN m] H1 214 Sales revenue 9 226 (-4.9% yoy) EBITDA 1 995 (-2.9% yoy) Net profit* 73 (-14.% yoy) CAPEX 1 25 (-7.4% yoy) Net debt/ebitda 1.68x (up.26) Key segments H1 214 results [PLN m] Distribution Supply Heat Generation Mining Segment s revenue 3 49 7 575 718 1 473 529 EBITDA 1 17 392 165 127 28 EBIT 7 374 92 (111) (24) CAPEX 841,8 98 126 82 * Net profit attributable to the parent company s shareholders 2
Q2 214 key financial parameters TAURON Group s Q2 214 financial results [PLN m] Q2 214 Sales revenue 4 339 (-4.5% yoy) EBITDA 96 (9% yoy) Net profit* 334 (15.3% yoy) CAPEX 685 (-15.4% yoy) Net debt/ebitda 1.68x (up.26) Key segments Q2 214 results [PLN m] Distribution Supply Heat Generation Mining Segment s revenue 1 491 3 479 291 717 281 EBITDA 612 153 36 6 8 EBIT 376 145 (.3) (59) (17) CAPEX 462,7 59 81 38 * Net profit attributable to the parent company s shareholders 3
Highlights summary TAURON Date May 15 Event GM s decision on allocating approx. PLN 333m from 213 net profit to pay out as dividend to the shareholders (PLN.19 per share) June 2 Publishing of TAURON Group s Corporate Strategy for 214-217 with an outlook until 223 July 18 July 22 August 11 TAURON Polska Energia s rating affirmed by Fitch Signature of a PLN 295m loan agreement with the European Investment Bank on investments in renewable energy sources and distribution Signature of the TAMEH Holding joint venture s shareholders agreement with ArcelorMittal a company set up to carry out operational and investment tasks in industrial power generation area MARKET Date May 1 July 8 August 4 Event Reinstatement of the support mechanism for cogeneration (red and yellow certificates). The support was extended until 218 Submission to the Polish Parliament (Sejm) of the government s draft law on renewable energy sources (RES) that envisages, among others, an introduction of the auction based RES support mechanism Signature by the President of the Republic of Poland of the amended Environment Protection Law aimed at reducing pollution emissions by industrial plants. The amendment shall implement the EU directive (IED) on reducing industrial emissions into the Polish regulations 4
Q1 211 Q2 211 Q3 211 Q4 211 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q1 211 Q2 211 Q3 211 Q4 211 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Macroeconomic and market situation GDP Poland GDP growth rate* and manufaturing PMI (quarterly average) PMI Increase of manufacturing production sold and electricity consumption (change yoy)* 5% 4% 3% 2% 1% % +.1 p.p. 56 55 54 53 52 51 5 49 48 47 46 12% 1% 8% 6% 4% 2% % -2% -4% +2.2 p.p. GDP growth rate Manufacturing PMI Yearly BASE contract prices on the Polish Power Exchange (TGE) Average price [PLN/MWh] Volume [GWh] Y-13 182.75 184 615 Y-14 163.49 214 584 Y-15 168.13 12 524 Y-16 172.84 13 5 Average electricity sales prices on the competitive market (acc. to ERO): 211: PLN 198.3/MWh 212: PLN 21.36/MWh 213: PLN 181.55/MWh GDP growth rate forecast TWh 8 6 4 2 increase of production sold change of domestic electricity consumption forecast increase of production sold 8% 5.1% 34.3% 52.6% Structure of electricity generation in Poland [TWh] 81.1 6.49 4.15 27.8-4.7% -11% +26.3% -5.6% 77.3 5.77 5.24 26.25 42.63-6.2% 39.99 H1 213 H1 214 7.5% 6.8% 34% 51.8% other renewable energy sources lignite-fired power plants hard coal-fired power plants * Source: GUS, IBnGR (forecasts), PSE (TSO) 5
H1 214 key operating data Mg m 3, 2, 1,, Hard coal production and sales [ton m].91-36.3%,58 3. 2.55 2,5 1,61-21.5% -15.% H1 213 H1 214 intra-group hard coal sales hard coal sales outside the Group commercial hard coal production TWh 12 1 8 6 4 2 Electricity [TWh] and heat [PJ] generation 9.75,6 51.7% 7.29,91 9,15 9,43 7,82 6,38-3.3% H1 213 H1 214 electricity electricity - RES heat -17.1% PJ 12 1 8 6 4 2 TWh Electricity distribution [TWh] and number of customers [ ] customers 5 4 Electricity supply [TWh] 21 TWh 2 15 1 23.98 23.88 5 359 5 35 5 3 2.86 19.25 14 7 5 5 313 5 25 H1 213 H1 214 -.4% 46 5 2 H1 213 H1 214-7.7 % electricity distribution number of customers retail electricity supply 6
H1 214 key operating data Mg m Hard coal production and sales [ton m] TWh 5 Electricity [TWh] and heat [PJ] generation 4.6 PJ 5 4,32 37.5% 3.59 4 1,,.51-41.2%.3 1.48 1.3,94,88-6.4% -12.2% Q2 213 Q2 214 intra-group hard coal sales hard coal sales outside the Group commercial coal production 3 2 1.44 4,28 3,15 1.94 1.9-26.4% Q2 213 Q2 214 electricity electricity - RES heat -2.1% 3 2 1 TWh 14 Electricity distribution [TWh] and number of customers [ ] customers 5 4 Electricity supply [TWh] TWh 12 1 8 6 4 2 11.56 11.63 5 359 5 313,6% 46 Q2 213 Q2 214 5 35 5 3 5 25 5 2 9.92 9.8 Q2 213 Q2 214-8.5% 7 electricity distribution number of customers retail electricity supply 7
H1 214 key financial data 1 8 6 9 77 1 23 2 819 Sales revenue [PLN m] -13.6% 3.8% 9 226 1 63 2 927 892 Net profit [PLN m] 734 1 8 6 4 4 2 5 658 5 236 2 H1 213 H1 214-7.4% H1 213 H1 214-17.7% electricity distribution and trading services other revenue 2 5 2 2 54 H1 213 vs H1 214 EBITDA [PLN m] 237 42 2 332-14.5% 1 995 PLN m 2 5 2 2 54 H1 214 EBITDA structure 1 995.3%.6% 2% 3% 29% 2% -2.9% 1 5 1 5 1 1 54% 59% 5 Reported H1 213 EBITDA Assets impairment charge Inventory impairment charge No one-off events occurred in H1 214 Comparable H1 213 EBITDA Reported/comparable H1 214 EBITDA 5-5 6% 8% 7% 3% 1% 1% 5% 6% H1 213-2% H1 214-3% Wydobycie Mining Wytwarzanie Generation OZE RES Ciepło Heat Dystrybucja Distribution Sprzedaż Supply Obsługa Customer klienta Service Pozostałe Other Pozycje Unassigned nieprzypisane items 8
Q2 214 key financial data Sales revenue [PLN m] Net profit [PLN m] 6 5 4 3 2 1 4 542 4 339-18.3% 574 469 1 348 4.4% 1 47 2 621 2 463-6.% Q1 Q2 213 Q2 Q1 214 335 311 Q2 213 Q2 214 7.7% 35 3 25 2 15 1 5 electricity distribution and trading services other revenue 1 5 1 5 832 Q2 213 vs Q2 214 EBITDA [PLN m] Reported Q2 213 EBITDA Assets impairment charge 237 42 Inventory impairment charge No one-off events occurred in Q2 214 1 11 Comparable Q2 213 EBITDA -18.4% 96 Reported/comparable Q2 214 EBITDA 1 8 6 4 2-2 Q2 214 EBITDA structure PLN m 832 9.% 1 2 96.5% 3% 3% 17% 7% 68%.8% 2% 3% 4% 4% 8% 4% 7% 1% -16% -3% -2% Q2 213 Q2 214 Wydobycie Mining Wytwarzanie Generation OZE RES Ciepło Heat Dystrybucja Distribution Sprzedaż Supply Obsługa klienta Pozostałe Pozycje nieprzypisane Customer Service Other Unassigned items 9
H1 214 EBITDA PLN m -2.9% 3 2 5 2 EBIT Depreciation Segment increase Segment decrease EBITDA margin 21.2% 5.3% 8.6% 66.7% 23.% 38.4% 5.2% 18.4 9.5% - 21.6% 2 54 864-19 99 35 33 66 22 6-24 -5 1 995 912 1 5 1 1 19 1 82 5 H1 213 EBITDA Mining Generation RES Heat Distribution Supply Customer service Other Unassigned items H1 214 EBITDA Most important factors affecting H1 214 EBITDA: Mining lower thermal coal sales price and volume along with the declining own cost of hard coal sold Generation lower electricity wholesale market prices, lower electricity and heat sales volumes, lower CO 2 provision costs, lower unit variable cost (lower fuel prices), higher revenue from RUS (Regulatory System Services) and operational reserve, assets impairment charge in H1 213 Distribution lower balancing differences factor and lower cost of purchasing electricity to cover the balancing difference, higher price and volume of the distribution service sales RES higher volumes of sales of electricity and property rights from wind farms generation Heat higher margin on certificates, red and yellow property rights impairment charge in H1 213 Supply lower volume and lower retail electricity sales price, higher redemption obligation and prices of green, violet and white property rights, reinstatement of the obligation to redeem red and yellow certificates; positive impact of the lower wholesale electricity purchase price 1
Q2 214 EBITDA PLN m +8.9% 1 4 EBIT Depreciation Segment increase 1 2 18.3% 3.% 8.3% 62.9% 12.5% 41.1% 4.4% 11.4% 11.9% - 2.9% 1 8 832 437-56 189 6 9 34-95 -6 3-1 96 456 6 4 4 45 2 Q2 213 EBITDA Mining Generation RES Heat Distribution Supply Customer service Other Unassigned items Q2 214 EBITDA Most important factors affecting Q2 214 EBITDA: Generation lower electricity wholesale market prices, lower electricity and heat sales volumes, lower CO 2 provision costs, higher revenue from RUS (Regulatory System Services) and operational reserve, assets impairment charge in Q2 213 Distribution lower cost of purchasing electricity to cover the balancing difference, higher price and volume of the distribution service sales Supply lower volume and lower retail electricity sales price, higher redemption obligation and prices of green and violet property rights, reinstatement, as of May this year, of the obligation to redeem red and yellow certificates Mining declining hard coal market prices, lower hard coal sales volume 11
H1 214 prime costs structure Prime costs structure PLN m H1 214 917 1 12 1 288 287 1 276 19% 21% 27% 6% 26% 1% 4 852 Fixed costs 63% Variable costs 37% -9.% Fixed costs 64% Variable costs 36% H1 213 1 1 1 233 1 193 41 1 333 21% 23% 22% 8% 25% 1% 5 332 % 2% 4% 6% 8% 1% 12% Depreciation Consumption of materials and electricity External services Taxes and fees Employee benefits costs Other prime costs Declining costs in Q1 214 are mainly due to: consumption of materials (lower fuel costs) depreciation along with impairment charges employee benefit costs mainly the result of the Voluntary Redundancy Programs implemented and the lower headcount taxes and fees Cost structure: H1 214: variable costs (excluding the value of goods and materials sold) approx.37%, fixed costs approx. 63% H1 213: variable costs (excluding the value of goods and materials sold) approx.36%, fixed costs approx. 64% 12
Q2 214 prime costs structure Prime costs structure PLN m Q2 214 461 469 651 135 645 19% 2% 27% 6% 27% 2% 2 397 Fixed costs 66% Variable costs 34% -14.6% Fixed costs 68% Varaiable costs 32% Q2 213 667 581 619 17 692 24% 21% 22% 6% 25% 3% 2 85 % 2% 4% 6% 8% 1% 12% Depreciation Consumption of materials and electricity External services Taxes and fees Employee benefits costs Other prime costs Declining costs in Q2 214 are mainly due to: depreciation including impairment charges consumption of materials (lower fuel costs) employee benefit costs mainly the result of the Voluntary Redundancy Programs implemented and the lower headcount taxes and fees Cost structure: Q2 214: variable costs (excluding the value of goods and materials sold) approx.34%, fixed costs approx. 66% Q2 213: variable costs (excluding the value of goods and materials sold) approx.32%, fixed costs approx. 68% Change of the structure caused by: lower costs of fuel used by the Generation and Heat subsidiaries, lower costs of purchasing electricity for trading by the Supply subsidiaries 13
Debt and financing TAURON Group s debt maturity [PLN m] Structure of TAURON Group s debt [PLN m] 3 5 3 2 5 2 1 5 1 5-119 1 453 3 153 financial debt (debt due to investment loans, credits, leases and bonds) as of June 3, 214: PLN 6 385m average weighted debt maturity as of June 3, 214: including BGK bonds 46 months EUR debt constitutes.7% of the total debt structure of debt by interest rate: 2% fixed interest rate, i.e. PLN 1,247m 8% floating interest rate, i.e. PLN 5,138m, including: - unsecured amount PLN 1,698m - secured amount PLN 3,44m Net debt / EBITDA: 1.68x 15 158 24 24 24 189 182 161 1 214 215 216 217 218 219 22 221 222 223 224 225 obligacje bonds kredyty, credits, pożyczki loans and i leases leasingi 4 998 78% Additionally, on July 22 this year, signature of a PLN 295m loan agreement with EIB on investments in renewable energy sources and distribution 1 247 2% 3 9% 62 1% 78 1% obligacje bonds Financing available totauron [PLN m] 3 9% 6 385 3 35 2 75 82% kredyty EIB loans z EBI National/Regional Environment Protection pożyczki and Water preferencyjne Management z NFOŚiGW/WFOSiGW Fund loans on preferential terms pozostałe other credits, kredyty, loans pożyczki and leases i leasingi obligacje bonds underwritten obejmowane by the consortium przez konsorcjum of banks banków obligacje BGK bonds BGK cashpooling 14
CAPEX key projects work progress Investment project Capacity (MW e ) Capacity (MW t ) Project status Work progress Planned completion date Construction of the hard coal-fired unit at Jaworzno III Power Plant 91 - Works underway on the unit s basic design. Services with respect to the construction of the unit s auxiliary systems and installations are being contracted. Contract s engineer selected - Energopomiar Gliwice 6% 219 Construction of the CCGT unit at Stalowa Wola Combined Heat and Power Plant 45 24 Construction and installation works as well as deliveries of components for technological systems within the basic unit, power take off points, fuel installations, the unit s auxiliary systems continued 59% 215 Construction of the hard coal-fired cogeneration unit at ZW Tychy 5 86 Boiler s steel structure s installation completed, boiler drum s water tests conducted. General contractor is carrying out successive stages of the works 16% 216 Construction of the TG 5 ZW Nowa turbogenerator 5 - Turbine s delivery completed. Turbine set s foundation accepted. Construction works underway. Project carried out in line with the schedule 45% 215 Jaworzno III Power Plant installing of the flue gas denitrification systems and upgrading of the 2 MW units - - Project carried out in line with the schedule. Upgrade works completed on four of the six units. Works on the other two units (units no. 1,5) will be carried out in 214-15 55% 216 Łaziska Power Plant installing of the flue gas denitrification systems and upgrading of the 2 MW units - - Upgrade of the last one (no. 9) of the four units commenced. Units will comply with the requirements with respect to the values of permitted NOx emissions past 218 (2 mg/nm 3 ) 81% 215 Construction of the CCGT unit at Łagisza Power Plant 413 266 Project s investment advisor selected. Procedures required to obtain the construction permit and select the contract s engineer commenced 1% 218 Construction of new RES capacity at Stalowa Wola Power Plant (biomass) 55 Following the cancellation of the proceeding on selecting the contractor to construct new RES capacity due to the value of the submitted bids the evaluation and analyses of the project s business case are underway 3% 215 Construction of the 8m level at Janina coal mine - - Janina VI shaft deepening underway, Hard Coal Mechanical Processing Unit s upgrade accepted 9% 219 Construction of Grzegorz shaft at Sobieski coal mine - - Basic design accepted, construction site access road completed, drilling of the test exploration borehole continued 12% 222 15
CAPEX by segment CAPEX by segment [PLN m] 1 35 28 634 5 248 275-7,4% 1 25 44 841 98 58 126 116 82 H1 213 H1 214 Mining Generation RES Heat Distribution Supply and other Main investment projects completed in H1 214: Distribution construction of new connections (PLN 214m) and upgrade and restoration of grid assets (PLN 544m) RES construction of the Marszewo wind farm s 2nd stage (PLN 2m), upgrade of hydroelectric power plants (PLN 34m) Generation construction of the NOx emission reduction system (PLN 73m) Heat construction and upgrades of the heat tranmission pipeline networks (PLN 34m) and restoration of ZW Tychy s capacity (PLN 3m) Mining construction of the 8 m level and launch of the fourth coal face at the Janina coal mine (PLN 36m) * CAPEX does not include PLN 31m spent to purchase TAURON Mining shares 16
OPEX reduction program Segment Savings realized In 213 and in Q1-Q2 214 Savings planned in 213-215 Progress % Distribution PLN 213m PLN 416m 51% Generation (including RES) PLN 238m PLN 387m 61% Heat PLN 29m PLN 33m 88% Mining PLN 2m PLN 28m 73% Main initiatives Implementation of the ultimate business model, elimination of the redundant functions Change of the way expenses are classified as CAPEX or OPEX Optimization of the balancing difference IT processes optimization Integration of business functions in the support (maintenance) area Optimization of external services Employment restructuring and process optimization Reduction of upgrades (maintenance) for the least efficient units Overhead cost optimization Outsourcing of some functions, mainly in the maintenance area Improvement of the devices efficiency, optimization of the production volume and operating expenses at hydorelectric power plants Reduction of the costs of support and maintenance of the wind farm s operation Employment restructuring Compressed air losses reduction Asset restructuring External services costs optimization Procurement policy optimization Nitrogen production system construction Coal sludge (slurry) dewatering station expansion Potable water treatment Electronic auctions in public procurement Use of the mechanical lining when drilling headings Other segments PLN 22m Employment restructuring, reduction of external services costs Total PLN 522m PLN 864m 6% In 213 and H1 214 the voluntary redundancy program covered 522 persons. Over that period employment contracts were terminated with 994 persons (3 488 persons in total since the program s launch in 21). Savings resulting from redundancies, decreased by costs incurred to generate those savings, are included in the amounts presented per segment. No threat for the plan s implementation is envisaged. Structure of savings in 213 and H1 214: 58% comes from employment restructuring, 42% from the other initiatives. Estimated structure of savings in the 213-215 time frame: 73% to come from employment restructuring, 27% from the other initiatives. 17
Legal disclaimer This presentation serves for information purposes only and should not be treated as investment-related advice. This presentation has been prepared by TAURON Polska Energia S.A. ( the Company ). Neither the Company nor any of its subsidiaries shall be held accountable for any damage resulting from the use of this presentation or a part thereof, or its contents or in any other manner in connection with this presentation. The recipients of this presentation shall bear exclusive responsibility for their own analyses and market assessment as well as evaluation of the Company s market position and its potential results in the future based on information contained in herein. To the extent this presentation contains forward-looking statements related to the future, in particular such terms as designed, planned, anticipated, or other similar expressions (including their negation), they shall be connected with the known and unknown risks, uncertainty and other factors which might result in actual results, financial situation, actions and achievements being materially different from any future results, actions or achievements expressed in such forward-looking statements. Neither the Company nor any of its subsidiaries shall be obliged to provide the recipients of this presentation with any additional information or to update this presentation. 18
Thank you Q&A Investor Relations Office Marcin Lauer marcin.lauer@tauron-pe.pl tel. + 48 32 774 27 6 Paweł Gaworzyński pawel.gaworzynski@tauron-pe.pl tel. + 48 32 774 25 34 Magdalena Wilczek magdalena.wilczek@tauron-pe.pl tel. + 48 32 774 25 38 19
Mining 8 7 6 5 4 3 2 1-1 748 H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] 137 84 529 28 H1 213 H1 214-24 Sales revenue EBITDA EBIT 1 5-5 -1-15 84 H1 213 EBIT -185 Hard coal sales volume -32 11 Hard coal sales price Own cost of hard coal sold -2-24 Other factors H1 214 EBIT Q2 214 financial data [PLN m] Q2 214 EBIT bridge [PLN m] 6 4 376 4 38 3 281 2 2 1-1 65 38 9-17 Q2 213 Q2 214-2 -4-6 Q2 213 EBIT -66 Hard coal sales volume -26 37 Hard coal sales price Own cost of hard coal sold -1-17 Other factors Q2 214 EBIT Sales revenue EBITDA EBIT 2
Generation (conventional sources) 2 5 2 1 5 1 5-5 2 27 H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] 28-231 1 473 127-111 H1 213 H1 214 Sales revenue EBITDA EBIT 5-5 -1-15 -2-25 237-231 -111 H1 EBIT H1 213 213 EBIT -142 Generation Odpis assets aktual. Cena aktywa impairment Electricity wytw. sprzedaży charge (Q2 213) (Q2 sales price energii el. 213) -9 Electricty Wolumen sprzedaży sales volume energii el. +48.% 43 Jednostkowy Electricity koszt variable zm. energii unit cost el. -91 Marża Margin na obrocie on energią electricity el. trading 88 Koszty CO2 CO2 costs -5 Pozostałe Other czynniki factors H1 EBIT H1 214 214 EBIT 1 2 1 8 1 63 Q2 214 financial data [PLN m] Q2 214 EBIT bridge [PLN m] 717 +22.6% -259-59 237 1 36 5-5 5 6 4-1 -15-59 -34 2-2 -4-13 -259 6-59 Q2 213 Q2 214 Sales revenue EBITDA EBIT -2-25 -3 Q2 EBIT Q2 213 213 EBIT Generation assets Odpis aktual. Cena aktywa wytw. Electricity impairment sprzedaży (Q2 213) sales charge (Q2 energii price el. 213) Electricty Wolumen sales sprzedaży volume energii el. Jednostkowy Electricity koszt variable zm. energii unit cost el. Margin Marża na on obrocie energią electricity el. trading Koszty CO2 CO2 costs Pozostałe Other czynniki factors Q2 EBIT Q2 214 214 EBIT 21
Renewable Energy Sources (RES) 16 14 12 1 8 6 4 2 93 H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] mln zł 62 44 145 97 57 12 1 8 6 4 2 44-12 3-8 21 +29.% 26-5 -22-17 57 H1 213 H1 214 Sales revenue EBITDA EBIT H1 213 EBIT Electricity supply volume Electricity supply volume Property rights Property rights sales volume - sales volume - hydroelectric wind farms power plants Property rights sales price Electricity sales price Depreciation Other factors H1 214 EBIT Q2 214 financial data [PLN m] Q2 214 EBIT bridge [PLN m] 7 6 5 4 3 2 1 51 35 26 65 41 21 5 4 3 2 1 26-7 11-4 -2.% 7 11-11 -11 21 Q2 213 Q2 214 Sales revenue EBITDA EBIT Q2 213 EBIT Electricity sales volume Electricity sales volume Property rights sales volume - hydroelectric power plants Property rights sales volume - wind farms Property rights sales price Depreciation Other factors Q2 214 EBIT 22
Heat H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] 75 55 35 716 718 125 15 85 65 75 33 9-9 -24 +23.4% 8 14-15 1 92 15 133 75 165 92 45 25-5 H1 213 H1 214 Sales revenue EBITDA EBIT Q2 214 financial data [PLN m] 5-15 H1 213 EBIT Property rights (red and yellow) impairment charge (H1 213) Heat supply and distribution volume Electricity supply volume Electricity sales price Heat sales price Margin on certificates Q2 EBIT bridge 214 [PLN m] Depreciation Other factors H1 214 EBIT 3 25 2 15 1 5 262 291 27 36 4 2 +19.% 5 33-3 - 8-12 -2-13 -,3-5 -2 -,3 Q2 213 Q2 214 Sales revenue EBITDA EBIT -2 Q2 EBIT Q2 213 213 EBIT Red Odpis and akt. yellow PM property czerwone rights i żółte impairment (3.6.213) charge (3.6.213 Electricity Wolumen sprzedaży energii sales volume el. Cena Electricity sprzedaży energii el. sales price Depreciation Amortyzacja Other Pozostała działalność operations operacyjna Pozostałe Other czynniki factors EBIT Q2 214 23
Distribution 3 2 5 2 1 5 1 5 H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] 3 11 3 49 1 14 1 17 656 7 H1 213 H1 214 Sales revenue EBITDA EBIT 9 8 7 6 5 4 3 2 1 656 H1 213 EBIT 44 5 Distribution service price Distribution service volume 11 Balancing difference -117 DSO/TSO services purchase +6.7% 33 OPEX -11 Tax on grid assets 1 7-22 Depreciation Other factors H1 214 EBIT 1 6 1 2 Q2 214 financial data [PLN m] 1 469 1 491 5 4 354 Q2 214 EBIT bridge [PLN m] +6.2% 26 7 6 12 3 22 376 8 578 612 3-55 4 354 376 2 1 Q2 213 Q2 214 Sales revenue EBITDA EBIT Q2 213 EBIT Distribution service price Distribution service volume Grid loss cost - ratio Grid loss cost - price DSO/TSO service purchase Connection fees Other factors Q2 214 EBIT 24
Distribution volumes H1 213 electricity distribution [GWh] H1 214 electricity distribution [GWh] 5 96 6 76 Group A 4 991 6 796 Group A Group B Group B 2 144 22 651 Group C2 Group C1+R+D 2 72 22 766 Group C2 Group C1+R+D 1 32 Group G 1 331 Group G 7 384 7 576 Q2 213 electricity distribution [GWh] Q2 214 electricity distribution [GWh] 2 453 3 376 Group A 2 383 3 46 Group A 952 1 995 Group B Group C2 Group C1+R+D 94 11 98 Group B Group C2 Group C1+R+D 612 Group G 631 Group G 3 62 3 738 Data related to the distribution of electricity to end users 25
Supply 1 8 8 994 H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] 7-35.4% 579 6 32 7 575 5-39 6 4 4 3-147 -31-4 19 374 2 2 596 579 392 374 1 H1 213 H1 214 Sales revenue EBITDA EBIT H1 213 EBIT Retail sales volume Electricity price (including excise tax) Increased obligations related to property rights (green, violet, white) Price of property rights (green, violet, white) Red and yellow property rights obligations Other factors H1 214 EBIT Q2 214 financial data [PLN m] Q2 214 EBIT bridge [PLN m] 5 3-39.3% 4 3 4 23 3 479 25 2 15 239-19 -3-43 -14 19 145 2 1-34 1 248 239 153 145 5 Q2 213 Q2 214 Sales revenue EBITDA EBIT Q2 213 EBIT Retail sales volume Electricity price (including excise tax) Price of property rights (green, violet, white) Increased obligations related to green and violet property rights Obligation related to red and yellow property rights Other factors Q2 214 EBIT 26
Supply volumes H1 213 electricity supply [GWh]* H1 214 electricity supply [GWh]* 2 63 4 826 2 46 4 118 5 45 2 688 Grupa Group A Grupa Group B Grupa Group C2+C1+R+D Grupa Group G Sprzedaż Other supply** pozostała** 4 98 19 62 Group A Grupa Grupa Group B Grupa Group C2+C1+R+D Grupa Group G Sprzedaż Other supply** pozostała** 5 85 5 118 3 12 2 872 1 17 Q2 213 electricity supply [GWh]* 2 31 617 Q2 214 electricity supply [GWh]* 2 83 Grupa Group A 2 344 Grupa Group A 2 435 9 859 Grupa Group B Grupa Group C2+C1+R+D 8 99 Grupa Group B Grupa Group C2+C1+R+D Grupa Group G Grupa Group G Sprzedaż Other supply** pozostała** Sprzedaż Other supply** pozostała** 1 418 2 589 1 372 2 573 * Volumes of electricity supply to the strategic customers (key accounts) of TAURON Polska Energia S.A. are included in groups A and B ** Group s subsidiaries own needs and balancing differences, balancing differences to other DSOs, other 27
Customer service H1 214 financial data [PLN m] H1 214 EBIT bridge [PLN m] 35 3 25 2 15 1 5 235 34 27 31 55 37 12 1 8 6 4 2 27 12 28 +37.% 26-59 4 37 H1 213 H1 214 Sales revenue EBITDA EBIT H1 213 EBIT Customer Service Shared Services Center Revenue Acounting Shared Services Center and Human Resources Shared Services Center Revenues IT Shared Services Center Revenue Costs of services provides Q2 214 financial data [PLN m] Q2 214 EBIT bridge [PLN m] Other factors H1 214 EBIT 15 12 9 131 138 3 25 2 18 3 7-67.2% -2 15 6 3 22 18 16 Q2 213 Q2 214 Sales revenue EBITDA EBIT 6 1 5 Q2 213 EBIT Custromer Service Shared Services Center Revenue Accounting Shared Services Center and Human Resources Shared Services Center Revenues IT Shared Services Center Revenue -23 Costs of services provided 3 Other factors 6 Q2 214 EBIT 28
Electricity market price trends Electricity Platforms: TGE, TFS, GFI, GPW-POEE 213 214. (until 1.8.214) 214/213 Price PLN/MWh Volume GWh Price PLN/MWh Volume GWh Price % Volume % Forward BASE (Y+Q+M) 184.92 14 488 16.79 182 816-13.% 3.1% Forward PEAK (Y+Q+M) 24.35 14 855 183.21 18 461-1.3% 24.3% Forward (weighted average) 186.78 155 343 162.85 21 276-12.8% 29.6% SPOT (TGE) 153.91 19 93 176 (forecast) 2 5 (forecast) +14.4% 2.9% Weighted average total 183.4 175 273 164.7 221 776-1.4% 26.5% CO 2 emission allowances (EUA/t) CO 2 market analysts survey* Price (EUR/t) Certificate type Property rights (PLN/MWh) Market prices (214 average) (until 1.8.214) Substitution fee and obligation for 214 213 average EUR 4.48/t RES (green) 193.48 3.3 (13.%) 214 average EUR 6. 8./t Hard coal-fired cogeneration (red) Brak transakcji 11. (23.2%) 215 average EUR 8. 1./t Gas-fired cogeneration (yellow) 11.14 11. (3.9%) Average 214 EUA price forecast by TAURON EUR 6.5 8./t Methane (violet) 59.1 63.26 (1.1%) * Sources: Point Carbon, Societe Generale, TAURON 29
214 BASE contracts PLN/MWh 23 22 21 BASE Y-14 Wolumen Trading volume obrotu Notowania Price Średnia Average price GWh 5 4 5 4 2 19 18 17 16 15 16.4 3 5 3 2 5 2 1 5 1 5 14 212-1-1 212-4-1 212-7-1 212-9-3 212-12-3 213-3-31 213-6-3 213-9-29 213-12-29 Average price [PLN/MWh] Volume [GWh] Total 16.4 142 841 including TGE 156.46 1 74 non TGE 169.83 42 11 Average electricity price that takes into account 214 one year BASE and PEAK contracts: PLN 162.4/MWh, total 214 BASE and PEAK volume: 158 565 GWh 3
215 BASE contracts PLN/MWh 2 19 18 17 16 165.47 BASE Y-15 Wolumen Trading volume obrotu Notowania Price Średnia Average price GWh 5 4 5 4 3 5 3 2 5 2 1 5 15 1 5 14 212-1-4 212-12-17 213-3-1 213-5-14 213-7-27 213-1-9 213-12-22 214-3-6 214-5-19 214-8-1 Average price [PLN/MWh] Volume [GWh] Total 165.47 95 265 TGE 165.5 7 395 including non TGE 165.38 24 87 Average electricity price that takes into account 215 one year BASE and PEAK contracts: PLN 168.12/MWh, total 215 BASE and PEAK volume: 11 27 GWh 31
216 BASE contracts 185 PLN/MWh BASE Y-16 GWh 5 18 4 5 4 175 172.2 3 5 17 3 2 5 165 2 16 1 5 155 Wolumen Trading volume obrotu Notowania Price Średnia Average price 1 5 15 213-5-15 213-7-4 213-8-23 213-1-12 213-12-1 214-1-2 214-3-11 214-4-3 214-6-19 214-8-8 Average price [PLN/MWh] Volume [GWh] Total 172.2 12 869 TGE 172.7 8 283 including non TGE 171.28 4 585 Average electricity price that takes into account 216 one year BASE and PEAK contracts: PLN 172.84/MWh, total 216 BASE and PEAK volume: 13 5 GWh 32
TAURON's coverage by analysts Institution Analyst Institution Analyst DB Securities Tomasz Krukowski Ipopema Securities Piotr Zielonka Tomasz Ściesiek Dom Maklerski mbanku Kamil Kliszcz Raiffeisen Centrobank Teresa Schinwald Dom Maklerski Banku Handlowego Piotr Dzięciołowski Renaissance Capital Vladimir Sklyar Dom Maklerski BZ WBK Paweł Puchalski Societe Generale Bartłomiej Kubicki Dom Maklerski PKO BP Stanisław Ozga UBS Investment Research Michał Potyra J.P. Morgan Cazenove Michał Kuzawiński Patrick Hummel Erste Group Petr Bartek Tomasz Walkowicz Espirito Santo Investment Poland Maria Mickiewicz UniCredit CAIB Flawiusz Pawluk Goldman Sachs Fred Barasi WOOD & Company Bram Buring HSBC Dmytro Konovalov DM BOŚ Andrzej Bernatowicz ING Securities Milena Olszewska 33