TAURON Group s Q1-Q3 213 financial results November 14, 213
Key financial parameters TAURON Group s results [] 1-3Q 213 3Q 213 Sales revenue 14 29 (-22% y/y) 4 537 (-23% y/y) EBITDA 2 996 (-3% y/y) 944 (-6% y/y) Net profit 1 261 (-5% y/y) 37 (-16% y/y) CAPEX 2 368 (+18% y/y) 1 18 (+32% y/y) Net debt/ebitda 1,19-1,19 - Selected segments Q1-Q3 213 results [] Distribution Supply Mining Generation Segment s revenue 4 447 13 31 1 93 3 44 EBITDA 1 696 747 168 121 Net profit 1 2 721 89 (262) CAPEX 1 192 15 173 43 2
Q3 213 summary Extension until December 31, 213 of the validity of the bid of the RAFAKO - MOSTOSTAL WARSZAWA S.A. consortium as part of the tender proceeding aimed at selecting the contractor for the construction of a 91 MW unit at Elektrownia Jaworzno III Cancellation of the tender for the construction of a 135 MW e / 9 MW t CCGT unit in Katowice (TAURON Heat) Increase of electricity consumption in Poland year on year by 2.1% in Q3 213 Commissioning of the 82 MW Marszewo wind farm Commissioning of the 4 MW Wicko wind farm Signature of the agreement with ING Bank Śląski, Bank Polska Kasa Opieki and BRE Bank related to the bond issue program for up to PLN 5bn Signature of agreements with Bank Gospodarstwa Krajowego related to the TAURON Polska Energia S.A. bond issue program for up to PLN 1bn Final settlement of the LTC compensations. Total inflow of cash to TAURON in conjunction with the settlement of LTCs was approximately PLN 477m Negative Historical futures contracts price lows for delivery in 214 (Base Y-14) approx. PLN 145/MWh. By the end of Q3 III 213 the prices rebounded to approx. PLN 155/MWh 4.55% decline of electricity sales prices for the 2nd half of 213 for the G tariff customers 3
Wicko Wicko and Marszewo wind farms Marszewo Wicko (Pomerania Region) Marszewo (Pomerania Region) Capacity 4 MW Capacity 82 MW Number of turbines 2 Number of turbines 41 Turbine model Vestas V9, 9 m diameter Turbine model Vestas V8, 8 m diameter Vestas V9, 9 m diameter Turbine s power rating 2 MW Turbine s power rating 2 MW Planned production output: approx. 87 GWh/year Planned production output: approx. 18 GWh/year 4
5 Mw e /16 MW t unit in Bielsko-Biała Bielsko-Biała (Silesia Region) Main fuel Unit s gross capacity Hard coal 5.82 MW e Generation efficiency Up approx. 26% CO 2 emission Down approx. 25% Heat unit s capacity 16 MW t Dust emission Down more than 17 times Efficiency of conversion to electricity and heat 89.6% (gross) SO 2 emission Down 1 times Project s implementation 28 213 NO x emission Down 3 times 5
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 Macroeconomic and market situation GDP Increase of Poland s GDP* and manufacturing PMI index PMI Industrial production sold and electricity consumption (y/y change)* 5% 4% 3% 2% 1% % +1.2 p.p. 56 54 52 5 48 46 44 12% 1% 8% 6% 4% 2% % -2% -4% +2,9 p.p. GDP wzrost PKB prognoza wzrostu PKB PMI dla przemysłu growth GDP growth forecast Manufacturing PMI wzrost industrial produkcji production sprzedanej sold change of domestic zmiana krajowego zużycia energii consumption of electricity prognoza forecast wzrostu of the growth produkcji of sprzedanej industrial production sold PLN Yearly BASE contract prices on the Polish Power Exchange (TGE) 28 BASE_Y-13 BASE_Y-14 BASE_Y-15 235 19 Trading volume weighted average price (TGE): 145 BASE_Y_13: PLN 185.8/MWh; Volume (TWh): 66.4 TWh BASE_Y_14: PLN 157,/MWh Volume (TWh): 87.5 TWh BASE_Y_15: PLN 161,4/MWh Volume (TWh): 12.2 TWh 1 211 212 213 TWh 14 12 1 8 6 4 2 Structure of electricity production in Poland [TWh] +1.4% 118. 119.8 9.61-5.4% 9.9 pozostałe other +24,5% 4.61 5.73 42.2 +.6% 42.29 renewable energy odnawialne sources energy sources źródła energii el. lignite-fired cieplne na power węgiel +1.3% brunatny plants power plants 61.8 62.63 hard coal-fired el. cieplne na węgiel power plants kamienny 1-3Q 212 1-3Q 213 * Source: GUS, IBnGR (forecasts), PSE 6
Key operating data Q3 213 Mg m 2, Coal production and sales [tons m] TWh 6 Electricity [TWh] and heat [PJ] generation PJ 3 1,5 1,.49.5-17.1% 5 4 3.28.32 +22.1% 2,5 2 1,5,5, 1.52 1.26 1..83 3Q 212 3Q 213 +2.% -17.% 2 1 4.57 4.21.95 1.16 3Q 212 3Q 213 +14.3% -7.9% 1,5 sprzedaż intra-group węgla coal do Grupy sales sprzedaż coal sales węgla outside poza Grupę the węgiel commercial handlowy Group coal energia electricity elektr. energia electricity elektr. generation - OZE ciepło heat - RES TWh 14 Electricity distribution [TWh] and number of customers [thou.] customers 5 4 Electricity supply [TWh] TWh 12 12 1 1 5 35 8 8 6 4 2 11.54 11.74 5 294 3Q 212 3Q 213 5 324 5 3 +3 thou. 5 25 +1.7% 5 2 1.66 9.86 3Q 212 3Q 213-7.5% 6 4 2 dystrybucja electricity energii distribution elektr. liczba number klientów of customers 7
Key operating data Q1-Q3 213 Mg m 5, Coal production and sales [tons m] TWh 16 Electricity [TWh] and heat [PJ] generation PJ 12 4, 3, 2, 1,, 1.22 1.41 4.9 4.26 2.74 2.88 1-3Q 212 1-3Q 213 +4.2% +15.6% +5.1% 14 12 1 8 6 4 2.92.92 13.17 1.68 13.36 1.59 1-3Q 212 1-3Q 213 -.8%.% +1.4% 1 8 6 4 2 sprzedaż intra-group węgla coal do Grupy sales sprzedaż coal sales węgla outside poza Grupę the węgiel commercial handlowy Group coal energia electricity elektr. energia electricity elektr. generation - OZE ciepło heat - RES TWh Electricity distribution [TWh] and number of customers [thou.] customers 5 4 Electricity supply [TWh] TWh 42 25 2 15 35.72 35.72 5 35 5 3 35 28 21 1 5 5 324 5 294 1-3Q 212 1-3Q 213 +3 thou. 5 25.% 5 2 33.37 3.71 1-3Q 212 1-3Q 213-8.% 14 7 dystrybucja electricity energii distribution elektr. liczba number klientów of customers 8
Key financial data Q3 213 7 6 5 4 3 2 1 5 9 678.1 1 372.1 3 85. Sales revenue [] 4 537 498.5 1 347. 2 691.9 3Q 212 3Q 3Q 213 213-26.5% -1.8% -3.1% Net profit [] 442.8 37.2 3Q 212 3Q 213 525 45 375 3 225 15 75-16.4% energia electricity elektr. usługi distribution dystrybucyjne and trading i handlowe pozostałe other revenue przychody services EBITDA 3Q 212 [] EBITDA 3Q 213 [] 1 4 1 2 1 8 1. -154.6 845.4 +15.% 972. +18.9 +8.7 944.4 6 4 2 EBITDA Reported EBITDA raportowana Compensation Przychody z tytułu rekompensaty (LTC) revenue (KDT) Comparable EBITDA EBITDA porównywalna Comparable EBITDA EBITDA porównywalna LTC Przychody compensation z tytułu revenue rekompensat (final settlement KDT adjustment) (korekta rozl. końcowe) Odpis aktualizujący Asset impairment wartość aktywów charge Reported EBITDA raportowana EBITDA 9
Key financial data Q1-Q3 213 2 18 16 14 12 1 8 6 4 2 18 214 2 172.5 4 281.8 11 759.9 Sales revenue [] 14 29 1 694.3 4 165.8 8 349.4 1-3Q 1H 212 1-3Q 1H 213-22.% -2.7% -29.% Net profit [] 1 333.1 1 26.7 1-3Q 212 1-3Q 213 1 4 1 2 1 8 6 4 2-5.4% energia electricity elektr. usługi distribution dystrybucyjne and trading i handlowe pozostałe other revenue przychody services 3 PLN 5m 3 2 5 3 81.3 EBITDA 1-3Q 212 [] EBITDA 1-3Q 213 [] 3 32.8 +18.9 +42.3 +245.2 +24.6% 2 65. -431.3 2 996.4 2 1 5 1 5 EBITDA Reported raportowana EBITDA Przychody Compensation z tytułu rekompensaty (LTC) revenue (KDT) Comparable EBITDA porównywalna EBITDA Comparable EBITDA LTC compensation Inventory revenue (final settlement impairment adjustment) charge Asset impairment charge Reported EBITDA 1
EBITDA Q3 213-5.6% EBIT Amortyzacja Depreciation 1 4 16.9% 1 2 8.9% 7.5% 17.5% 59.8% 41.3% 3.5% 27.1% 11.8% - 2.8% 1 8 6 4 421 579-9 24-138 -1 57 55 27 15-4 423 521 2 EBITDA 3Q 212 Wydobycie Mining Wytwarzanie Generation Ciepło Heat OZE RES Dystrybucja Distribution Sprzedaż Supply Obsługa Customer klienta Pozostałe Other Pozycje Unassigned Service nieprzypisane items EBITDA 3Q 213 Most important factors affecting EBITDA: Mining declining coal market prices Generation no revenue from LTC compensations, assets impairment charge and lower wholesale market electricity prices Distribution decline of the unit cost of purchasing distribution services (lower transmission charges, lower cost of purchasing electricity to cover the balancing difference) Supply: declining cost of the obligation to redeem green cerificates (significant drop of green certificates market prices) lack of obligation to redeem cogeneration related property rights (certificates) continued high spread between retail and wholesale electricity prices 11
Prime costs structure Q3 213 Prime costs structure 1% 3Q 212 16% 26% 26% 5% 25% 1% 2 69,1-6,4% 3Q 213 18% 23% 26% 7% 24% 1% 2 441,4 1% % 2% 4% 6% 8% 1% 12% Depreciation and impairment charges to Consumption of materials and energy External services Amortyzacja fixed Depreciation assets and i odpisy goodwill impairment aktualiz. charges ŚT i WN of Zużycie Consumption materiałów of materials i energii and energy Usługi External obce servisces Taxes fixed assets and fees and goodwill Employee benefit costs Inventory and receivables impairment charge Podatki Taxes and i opłaty fees Koszty Employee świadczeń benefit costs pracowniczych Odpis Inventory aktualizujący and receivables wartość impairment zapasów charge i należności Pozostałe Other Other prime prime koszty costs costs rodzajowe Declining costs in Q3 213 are mainly due to: consumption of materials (lower fuel costs) external services including distribution and transmission services (y/y reduction of the TSO transmission fee) employee benefit costs mainly the result of the Voluntary Redundancy Programs implemented and the lower headcount Cost structure: Q3 213: variable costs (excluding the value of goods and materials sold) approx. 41%, fixed costs approx. 59% Q3 212: variable costs approx. 4%, fixed costs approx. 6% In Q3 213 cost structure did not differ ent than in comparable period of 212, both variable and fixed costs decreasing in the period under consideration 12
Prime costs structure Q1-Q3 213 Prime costs structure 1.1% 1-3Q 213 2% 23% 24% 7% 25%.3% 7 773,3 +1,1% 1-3Q 212 15% 26% 25% 6% 26%.5% 7 685,3.9% % 2% 4% 6% 8% 1% 12% Depreciation and impairment charges to Consumption of materials and energy Amortyzacja fixed assets and i odpisy goodwill aktualiz. ŚT i WN Zużycie materiałów i energii External services Usługi obce Taxes and fees Podatki i opłaty Employee benefit costs Koszty świadczeń pracowniczych Inventory and receivables impairment charge Odpis aktualizujący wartość zapasów i należności Pozostałe Other prime koszty costs rodzajowe Increased costs in Q1-Q3 213 are mainly due to: depreciation (including generation assets impairment charge of approx. PLN 237m) taxes and fees costs of the provision set up for the CO 2 emission allowances Declining costs in Q1-Q3 213 are mainly due to: external services including distribution and transmission services (y/y reduction of the TSO transmission fee) consumption of materials and energy primarily due to lower fuel costs employee benefit costs mainly the result of the Voluntary Redundancy Programs implemented and the lower headcount Cost structure: Q1-Q3 213: variable costs (excluding the value of goods and materials sold) approx. 37%, fixed costs approx. 63% Q1-Q3 212: variable costs approx. 42%, fixed costs approx. 58% Change of structure caused by: Generation and Heat: reduction of variable costs (lower fuel costs), inclusion of generation assets impairment (in fixed costs) Distribution: lower transmission fee costs niższe 13
Distribution key elements Electricity distribution [GWh] in Q1-Q3 212 Electricity distribution [GWh] in Q1-Q3 213 7 37 1 522 Grupa Group A 7 43 1 236 Grupa Group A Group B Grupa B Group B Grupa B 3 71 33 851 Group C2 Grupa C2 3 78 33 778 Group C2 Grupa C2 Grupa Group C1+R+D Grupa Group C1+R+D 1 911 Grupa G Group G 1 946 Grupa Group G 1 977 11 9 Electricity distribution [GWh] in Q3 212 Electricity distribution [GWh] in Q3 213 2 34 2 333 3 552 Grupa Group A 3 529 Grupa Group A Group B Grupa B Group B Grupa B 912 1 973 Group C2 Grupa C2 934 11 127 Grupa Group C2C Grupa Group C1+R+D Grupa Group C1+R+D 61 Grupa G Group G 626 Grupa G Group G 3 596 3 75 Data on electricity distribution to end users 14
Debt and financing 3 5 3 2 5 Zapadalność TAURON Group s długu debt Grupy maturity TAURON [] [mln zł] 3 142 TAURON Group s long term debt structure[] obligacje bonds 2 1 5 1 5-1 44 17 14 139 14 14 14 89 82 61 214 215 216 217 218 219 22 221 222 223 224 4 298 74% 5 772 47 1% 1 359 24% 68 1% kredyty EIB loans z EBI preferential terms loans from National/Regional pożyczki preferencyjne z Environment Protection NFOŚiGW/WFOSiGW Funds pozostałe other credits kredyty and loans i pożyczki obligacje bonds kredyty credits and i pożyczki loans long term debt as of September 3, 213: PLN 5 772m net debt / EBITDA ratio: 1.19 (versus 1.18 at the end of 212) Average weighted debt maturity as of September 3, 213: excluding BGK bonds 42 months including BGK bonds 55 months EUR debt constitutes.6% of the total debt structure of debt by interest rate 24% fixed interest rate, i.e. PLN 1 359m 76% floating interest rate, i.e. PLN 4 413m, including: - unsecured amount PLN 973m - secured amount PLN 3 44m 2 75 68% Financing available to TAURON Group [] 4 5 3 7% 1 25% obligacje bonds taken obejmowane przez over by konsorcjum the banków consortium of banks obligacje BGK bonds BGK cashpooling 15
CAPEX Investment project Type TAURON s share Capacit y (MW t ) Capacity (MW e ) Progress Elektrownia Jaworzno III hard coal fired unit 1% 91 Preparations underway to sign the contract with the RAFAKO S.A. MOSTOSTAL WARSZAWA S.A. consortium. Planned completion date: 218 Elektrownia Stalowa Wola CCGT unit 5% 24 45 Construction works underway. Planned completion date: 215. ZW Tychy cogeneration unit 1% 86 5 ZW Nowa turbogenerator TG 5 1% 5 Elektrownia Jaworzno III upgrade of 6 boilers 1% Elektrownia Łaziska upgrade of 4 boilers 1% Wicko wind farm 1% 4 Project completed. Marszewo wind farm 1% 82 Project completed. Elektrownia Blachownia CCGT unit 5% 85 Project optimization underway. Contract with the general contractor, Elektrobudowa S.A., signed Planned completion date: 216. Contract with the general contractor, Control Process S.A., signed. Planned completion date: 215. Upgrade works underway. Works completed on three units. Planned completion date: 216. Upgrade works underway. Works completed on two units. Planned completion date: 215. ZW Katowice CCGT unit 1% 9 135 Tender cancelled. Actions undertaken in order to withdraw from the project. Total 416 2 567 Main investment projects carried out in Q1-Q3 213: Distribution construction of new connections (PLN 347m) and upgrade and restoration of the grid assets (PLN 747m) RES construction of the Marszewo and Wicko wind farms (PLN 37m) Generation construction of new capacity (PLN 1m) and construction of the NOx emission reduction system (PLN 156m) Mining construction of underground headings and purchase of devices (PLN 171m) 2 54 1 8 CAPEX per segment [] +18.4% 2 368 46 1 192 83 439 153 116 615 43 87 173 1-3Q 212 1-3Q 213 Sprzedaż Supply and i pozostałe other Dystrybucja Distribution OZE RES Ciepło Heat Wytwarzanie Generation Wydobycie Mining 16
OPEX reduction program Segment Savings realized in Q1-Q3 213 Savings planned for 213-215 Progress % Main initiatives Distribution PLN 93m PLN 416m 22% 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 Generation (including RES) PLN 96m PLN 387m 25% 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 Heat PLN 15m PLN 33m 46% Mining PLN 1m PLN 28m 35% Total PLN 214m PLN 864m 25% 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 In Q1-Q2 213 the voluntary redundancy program covered 262 persons. Over that period employment contracts were terminated with 557 persons (3 51 persons in total since the program s launching 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 in 213 is envisaged. Structure of savings in Q1-Q3 213: 59% results from employment restructuring, 41% 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
Summary key factors Estimated WACC drop in 214 down to 7.2-7.3% Introduction of the capacity market mechanisms: - since 214 operational back-up - since 216 cold back-up for intervention purposes Significant electricity prices decline Chance for a reduction of hard coal prices for the 214 deliveries Other Intention to acquire debt financing on the market in 214 (provided the contract for the construction of the Elektrownia Jaworzno III unit is signed) Signature of the contract for the construction of a 91 MW unit at Elektrownia Jaworzno III 18
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 19
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
Mining 5 4 3 2 1 427.9 Financial data [] EBIT bridge [] 12.6 86.7 344.2 3.6 4.3 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT mln zł 1 9 8 7 6 5 4 3 2 1 86.7 EBIT 3Q 212-4.7-36. -95.% -38.3 Wolumen sprzedaży Cena sprzedaży węgla Jedn. koszt własny Pozostałe Coal węgla sales Coal sales sprzedanego Own per węgla unit przychody/koszty Other volume price cost of coal sold revenue/ costs -3.4 4.3 EBIT 3Q 213 lower average hard coal sales price, mainly declining price of coal sludges sold intra-group drop in the coal sales volume (-11,3% Q/Q) as a consequence of the declining output (-17,1% Q/Q) coal production costs at a similar level as last year in reference to the lower sales increased costs per a ton of coal sold tons m 2, 1,5 1,,5, Commercial coal production [tons m] 1.52 1.48 1.52 1.48 1.36 1.21 1.26 1Q 212 2Q 212 3Q 212 4Q 212 1Q 213 2Q 213 3Q 213 21
Generation (conventional sources) mln zł 1 4 1 2 1 8 6 4 2 Financial data [] EBIT bridge [] 1 32,. 1 89.3 22.6 96.2 82.2 15 5-5 -15-25 -35 96,2 24, 46,9 7,6-173,5-29,5-23,3-45,7 -,8-35,1-2 -35.1 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT -45 EBIT 3Q 212 Przychody LTC termination z tyt. compensation rekompensaty revenue KDT Own Wolumen production sprzedaży electricity energii z wł. sales prod. volume Electricity Cena sprzedaży sales Electricity Jednostkowy per unit Electricity Marża turnover na price energii variable koszt zmienny cost energii el. margin obrocie energią el. Koszty CO 2 costs CO2 Koszty Fixed costs stałe Pozostałe Other EBIT 3Q 213 no revenue from LTCs (in Q3 212: PLN 154.6m. At the same time in Q3 213 in connection with the decision of the President of ERO with respect to the amount of the final stranded costs adjustment the revenue adjustment of PLN 18.9m was recognized) drop of electricity volume and sales price inclusion of the costs of the provision for the shortage of the CO 2 emission allowances positive impact of the other operations related factors (electricity sales volume, per unit cost of generation and fixed costs) TWh 5 4 3 2 1 Electricity production [TWh] 4.52 4.56 4.64 4.69 3.88 4.16 4.15 1Q 212 2Q 212 3Q 212 4Q 212 1Q 213 2Q 213 3Q 213 22
Renewable Energy Sources (RES) 4 35 3 Financial data [] EBIT bridge [] 37.4 36.4 3 +5,7% 7.8 25 25 2 15 1 22.5 21.8 12,2 12.9 2 15 1 5.2.9.12,2 12.9-12.6 -.7 5 5 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT EBIT 3Q 212 Sales Wolumen volume - Sales Wolumen volume - farmy Cena Certificate sprzedaży Koszty Fixed stałe costs Pozostałe Other EBIT 3Q 213 elektrownie - hydroelectric wodne - wind wiatrowe farms sales certyfikatów price power plants TWh Electricity production [TWh],2 increased hydroelectric power plants production (favorable hydrological conditions) higher wind farm production (startup of the Wicko and Marszewo wind farms) lower green certificates sales price,16,12,8,4.15.14.8.9.12,16,14, 1Q 212 2Q 212 3Q 212 4Q 212 1Q 213 2Q 213 3Q 213 23
Heat 25 2.189,6 Financial data [] EBIT bridge [] 15 222.3 1 11.1 -.9 12.7 15 1 5-5 15.4-7.8 39. 12.7 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT 5-5 -1-15 -7.8 EBIT 3Q 212 6. 3.3-4.3 5.3 Wolumen Heat distribution dystrybucjiwolumen Electricity sprzedaży sales Cena Electricity sprzedaży sales Jednostkowe Variable koszty per Saldo Other pozostałej operations Pozostałe Other EBIT 3Q 213 volume ciepła volume energii price energii unit zmienne działalności balance wytwarzania generation costs operacyjnej higher heat distribution and electricity supply volume lower electricity sales prices lower unit variable costs of generation (falling fuel prices) higher balance of the other operations (mainly due to significantly higher costs of provisions set up in order to finalize the legal status of the real estate in Q3 212) PJ 5 4 3 2 1 Segment s heat production [PJ] 3.88 4. 3.5.94 1.5.5.58 1Q 212 2Q 212 3Q 212 4Q 212 1Q 213 2Q 213 3Q 213 24
Distribution 1 6 1 2 Financial data [] EBIT bridge [] 4 +14,4% 77.6 1 463.5 1 437.7 319.6 13.5 3-1.4-22.3-2.7-14.3-1.7-2.8 365.5 8 4 537.4 319.6 593.9 365.5 2 1 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT EBIT 3Q 212 Cena Distribution sprzedaży Distribution Wolumen Connection Opłaty Other Pozostałe revenue Price Cena of zakupu electricity Cena Price zakupu of purchasing Koszty Fixed stałecosts Pozostałe Result from service usługi sales sprzedaży service sales usługi przyłączeniowe fees related przychody to the purchased energii nato the usługi distribution / czynniki other dystrybucyjnej price dystrybucyjnej volume distribution związane z pokrycie cover balancing różnicy dystrybucyjnej transmission / service operations działalnością operations dystrybucyjną differences bilansowej przesyłowej EBIT 3Q 213 reduction of the distribution services sales price and of the connection fees revenue reduction of the transit fee for the Transmission System Operator rising prices of electricity purchased to cover the balancing difference and growing fixed costs related to the customer service puchased klienci 5 33 5 32 5 31 5 3 5 29 5 28 5 27 5 284 5 289 Number of customers [thou.] 5 37 5 32 5 294 5 313 5 324 5 26 1Q 212 2Q 212 3Q 212 4Q 212 1Q 213 2Q 213 3Q 213 25
Supply 5 4 524.8 Financial data [] EBIT bridge [] 16 4 37.9 14 +58.7% 68.2 8.4 142.5 4 12 3 2 1 96.1 89.8 151.4 142.5 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT 1 8 6 4 2 89.8 EBIT 3Q 212 59.4-46.7-31.4-5.1 Electricity Wolumen Cena Electricity energii (z Wzrost Increased obowiązku Cena Price PM of green Brak obowiązku Lack of Pozostałe Other factors czynniki EBIT 3Q 213 sprzedaży sales volume energii akcyzą) price (incl. PM zielonych, obligation zielonych, violet,and white PM czerwonych obligation excise tax) fioletowych, redeem fioletowych, certificates i żółtych to redeem białych green, violet białych red and and white yellow cerificates certificates lower electricity sales volume, in particular to the A and B group customers (in the TS and TS GZE subsidiaries), partly compensated by increassed sales to TAURON s strategic (key) customers increased obligation to redeem green and violet certificates, obligation to redeem white certificates declining prices of green certificates lack of legal regulations with respect to redeeming red and yellow certificates TWh 14 12 1 8 6 4 2 Electricity retail sales [TWh] 11.89 11.38 1.81 1.66 1.93 9.92 9.86 1Q 212 2Q 212 3Q 212 4Q 212 1Q 213 2Q 213 3Q 213 26
Customer Service 15 12 Financial data [] EBIT bridge [] 7.139.8 6 5 +3% 37.7 9 6 3 83.9 11.2 8.2 37.9 32.8 3Q 212 3Q 213 Przychody Sales revenue ze sprzedaży EBITDA EBIT 4 3 2 1 8,2-2.2 19. -3.3 EBIT 3Q 212 Przychody CUW OK Przychody CUW R i Przychody CUW IT Koszty świadczonych Pozostałe Revenue of Shared Revenue of Revenue of Costs Other revenue / CUW HR usług przychody/koszty Services Center - Shared Services Shared Services of services costs Customer Service Center R and Center IT provided Shared Services Center HR.4 32.8 EBIT 3Q 213 Sales structure in Q3 213 [] increased intra-group revenue stemming from the expansion of the range of services rendered, as a result of centralizing the support functions and migrating the resources from TAURON Group s other subsidiaries rising costs caused by the above factors (headcount growth by 794 persons) 64,6 49,5 usługi customer obsługi service klienta services usługi IT services informatyczne usługi financial finansowe, accounting księgowe and i kadrowe human resources services pozostałe other products produkty and services i usługi 1,3 24,4 27
Price trends on energy market Electricity Platforms: TGE, TFS, GFI, GPW-POEE 212 213 (until July 213) 213/212 Price PLN/MWh Volume GWh Price PLN/MWh Volume GWh Price % Volume % Forward BASE (Y+Q+M) 2.8 139 358 185.15 139 623-7.5% +.2% Forward PEAK (Y+Q+M) 225.56 17 161 24.53 14 742-9.3% - 14.1% Forward (weighted average) 22.88 156 519 187.1 154 365-7.8% - 1.4% SPOT (TGE+GPW-POEE) 173.58 2 388 158. (forecast) 2 5 (forecast) - 9.% +.5% Weighted average total 199.5 176 97 183.61 174 865-8.% - 1.2% CO 2 emission allowances (EUE/t) CO 2 market analysts survey* Price (EUR/t) Certificate type Property rights (PLN/MWh) Market prices (average in July 213) Substitution fee and obligation for 213) Average in 213 4.5 5.5 EUR/t RES (green) 192.59 297.35 (12.%) Average in 214. 6. 8. EUR/t Hard coal-fired cogeneration (red) No transactions 29.84 (not announced) Average in 215 8. 1. EUR/t Gas-fired cogeneration (yellow) Gas-fired cogeneration (yellow) No transactions Average EUA price in 213 forecast by TAURON 4.5 5. EUR/t Methane (violet) Methane (violet) 57.99 * Sources: Deutsche Bank, Barclays Capital, Point Carbon 28
Price [PLN/MWh] BASE contracting for 213 22 Y-13 Q1-13 Q2-13 Q3-13 Q4-13 21 2 19 18 17 16 15 14 212-1-1 212-3-12 212-5-22 212-8-1 212-1-11 212-12-21 213-3-2 213-5-12 213-7-22 213-1-1 Average price of transactions concluded [PLN/MWh]: Volume [GWh] Yearly 191.6 18 861 Quarterly 165.23 21 948 Monthly 155.3 8 815 TOTAL 185.16 139 623 29
Price [PLN/MWh] PEAK contracting for 213 255 Y-13 Q1-13 Q2-13 Q3-13 Q4-13 245 235 225 215 25 195 185 175 165 212-1-1 212-3-5 212-5-8 212-7-11 212-9-13 212-11-16 213-1-19 213-3-24 213-5-27 213-7-3 213-1-2 Average price of transactions concluded [PLN/MWh]: Volume [GWh] Yearly 29.9 12 37 Quarterly 183.92 1 688 Monthly 184.77 1 17 TOTAL 24.53 14 742 3
Price [PLN/MWh] BASE contracting for 214 18 Y-14 Q1-14 Q2-14 Q3-14 Q4-14 175 17 165 16 155 15 145 14 213-1-1 213-1-31 213-3-2 213-4-1 213-5-1 213-5-31 213-6-3 213-7-3 213-8-29 213-9-28 213-1-28 Average price of transactions concluded [PLN/MWh]: Volume [GWh] Yearly 161.9 121 352 Quarterly 153.17 5 41 Monthly 156. 22 TOTAL 161.52 126 776 31
Price [PLN/MWh] PEAK contracting for 214 215 21 Y-14 Q1-14 Q2-14 Q3-14 Q4-14 25 2 195 19 185 18 175 17 165 213-1-6 213-2-4 213-3-5 213-4-3 213-5-2 213-5-31 213-6-29 213-7-28 213-8-26 213-9-24 213-1-23 Average price of transactions concluded [PLN/MWh]: Volume [GWh] Yearly 178.78 1 92 Quarterly 185.3 16 Monthly TOTAL 178.84 11 8 32
Price [PLN/MWh] BASE contracting for 215 25 Y-15 Q1-15 Q2-15 Q3-15 Q4-15 195 185 175 165 155 145 212-1-3 212-12-6 213-2-8 213-4-13 213-6-16 213-8-19 213-1-22 Average price of transactions concluded [PLN/MWh]: Volume [GWh] Yearly 162,15 18 746 Quarterly Monthly TOTAL 162,15 18 746 33
Price [PLN/MWh] PEAK contracting for 215 195 193 Y-15 Q1-15 Q2-15 Q3-15 Q4-15 191 189 187 185 183 181 179 177 175 213-4-25 213-5-17 213-6-8 213-6-3 213-7-22 213-8-13 213-9-4 213-9-26 213-1-18 Average price of transactions concluded [PLN/MWh]: Volume [GWh] Yearly 184.68 179 Quarterly Monthly TOTAL 184.68 179 34
TAURON's coverage by analysts Institution Analyst Institution Analyst DB Securities Tomasz Krukowski Ipopema Securities Piotr Zielonka Dom Inwestycyjny BRE Banku Kamil Kliszcz Raiffeisen Centrobank Teresa Schinwald Dom Maklerski Banku Handlowego Piotr Dzięciołowski Renaissance Capital Vladimir Sklyar Dom Maklerski BZ WBK Paweł Puchalski Societe Generale Leszek Iwaszko Dom Maklerski PKO BP Stanisław Ozga UBS Investment Research Michał Potyra Erste Group Petr Bartek Patrick Hummel Espirito Santo Investment Poland Maciej Hebda Tomasz Walkowicz Goldman Sachs Fred Barasi UniCredit CAIB Flawiusz Pawluk HSBC Dmytro Konovalov WOOD & Company Bram Buring ING Securities Milena Olszewska 35