CEZ A.S. — Call Transcript 2019

Mar 19, 2019

CONFERENCE CALL ON CEZ GROUP FINANCIAL RESULTS IN 2018

AUDITED CONSOLIDATED RESULTS PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Prague, March 19, 2019

Financial values throughout this presentation reflect the restatement of past periods in accordance with IFRS and the current definition of EBITDA.

YEAR 2018CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector and 2018 Summary

Summarized Financial Results

Operations Team Results

Development Team Results

Ambitions for 2019

ELECTRICITY PRICES HAVE INCREASED SINCE THE BEGINNING OF 2018 PRIMARILY DUE TO THE RISING PRICE OF CO2ALLOWANCES

Breakdown of Causes for Change in Wholesale Electricity Prices in 2020

MAIN TRENDS IN THE ENERGY SECTOR

CLIMATE & ENERGY TARGETS SET FOR 2030 ARE HIGHLY AMBITIOUS EVEN THOUGH THERE WAS A COMPROMISE BETWEEN EU COUNCIL AND EP AMBITIONS

****Proposed National Integrated Climate and Energy Plan (NICEP) sent to Brussels anticipates Czech savings of 30.2%

2018 RESULTS IN LINE WITH ESTIMATES: EBITDA OF CZK 49.5 BN, ADJUSTED INCOME OF CZK 13.1 BN

Selected effects on EBITDA and Net Income

(as compared to estimate from Mar 20, 2018)

Positive effects:

• Lower fixed operating expenses
• Higher profit from commodity trading
• Income from interest on refunded gift tax on emission allowances
• Lower depreciation and amortization, interest expenses, and lower deferred tax

Negative effects:

• Delay in court decision on payment of SŽDC debt to ČEZ Prodej from 2011 (CZK -1.3 bn)
• Lower generation by coal-fired power plants
• Fewer acquisitions in development (especially in RES)
• Addition to provisions for potential refund of Čekanice PV plant's revenue

SELECTED KEY EVENTS IN 2018

O P E R A T I O N S T e a m	D E V E O P M E N T T L e a m
O fo f f fo t ing l ic in d in i t io d t im p e ra e ns e r a n e e p e r o e r  Du ko N P P U i t 3 d 4 in t f fe t J 1, va ny n s a n c a m e o e c o n a n 2 0 1 8.	S f S C O % ( C l E t i i t i i d b 1 2 0 b Z K a e s r o m a c e s n c r e a s e  v y y 8. 7 b ) t C Z K 1 5. 9 b d t i t h d + n o n u e o o r g a n c g r o w a n n e w G i i t i i l l i A d d i t i l l a c q u s o n s, e s p e c a y n e r m a n y. o n a y, n e w i i t i d i P l d, S l k i d R i a c q u s o n s w e r e m a e n o a n o v a a, a n o m a n a.
Ac h iev b le i ty f Te l ín N P P inc d by a c a p a c o m e re a s e  2 M W b h i l o f 2, 1 6 4 M W t t t t t t a o u n s, o a o a e e. G io by le la lm 3 0 T W h. t t t  e ne ra n n u c a r p ow e r p n s w a s a o s	I R E S, C E Z G b h i j i i G t t t t  n r o u p o u g n o o n v e n u r e s n e r m a n y f f i t h t t i l d l t i d t b i i t h l t p o e n a o r e e o p m e n o n r n e s a m o s w v w u w
Č C fo he ly fro Te l ín N P P k é t t t t  o n ra c r a su p p m m e o e s Bu d ě j ic i ig d d in i ia d bu i l d ho ty t t t t t ov e c s ne a n s e p s e o a ip ly im d in 2 0 2 0. t t t t t t wa e r p e; s u p p e s a e o s a r	2 0 0 M W C i f f i R E S j i F h A h t t t t t o n s r u c o n o o u r r s p r o e c n r a n c e, e s c e r e s  f f i d i t h i t l l d i t 1 3. 6 M W t t d. n a r m a n n s a e c a p a c o s a r e w w y ,
Pr j fo 3 M W l i h iu -io b Tu š im ic t t t t t t  o e c r a m n a e ry s y s e m a e t t d. s a r e	E I t t B k ( E I B ) t t d E U R 5 0 i t h  u r o p e a n n v e s m e n a n e n r u s e m n e I C i l f d. T h f d l d f l l f t t n v e n a p a u n e u n c o m p e e s u c c e s s u s a e o i t f i t i t t i ( F b 2 0 1 9 ). s r s n v e s m e n n s o n n e n e
fu De is io t ke t t d l iza t io b b t c n a n o re s o re a e su r n a s o r e r a  f f D ě t ic la t t ire t ke t he m a ro v e p ow e r p n a e r a s o a s o e p la t in t io f t 2 0 2 1. p n o p e ra n a e r	T d i 's b i i C Z K 3 b 5 0 %  r a n g u s n e s s n c o m e w a s n, m o r e y- o- y.
C G E Z r o u p

• S&P credit rating reaffirmed at "A−" with a stable outlook; Moody's reaffirmed at "Baa1" while improving outlook to positive.
• Project for "Centralized and Supporting Activities Redesign & Optimization" launched with an ambition to permanently cut fixed annual expenses by approx. CZK 0.5 bn a year and reduce headquarters and supporting staff by 15–20%.
• Segments' development strategies updated and strategic options for the realization of a new nuclear power plant discussed.

YEAR 2018CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector and 2018 Summary

Summarized Financial Results

Operations Team Results

Development Team Results

Ambitions for 2019

CEZ GROUP FINANCIAL RESULTS

( C ) Z K b n		2 0 1 7	2 0 1 8	C h a n g e	%
R e v e n u e s		2 0 5. 1	1 8 4. 5	2 0. 6 -	1 0 % -
R b l * e e n e s c o m p a r a e v u -		1 3. 7 7	1 8 4. 5	1 0. 8 +	6 % +
E B I T D A		5 3. 9	4 9. 5	4. 4 -	8 % -
E B I T		2 6 5.	1 9. 8	9 5. -	2 3 % -
N t i e n c o m e		1 9. 0	1 0. 5	8. 5 -	% 4 5 -
N i d j d ** t t e n c o m e a u s e -		2 0. 7	1 3. 1	6 7. -	3 % 7 -
O i C F t p e r a n g		4 8 5.	3 4 5.	1 0. 5 -	2 3 % -
C A P E X		2 9. 1	2 6. 4	2. 7 -	% 9 -
* N t d b t e e		1 3 6. 1	1 5 1. 3	1 5. 2 +	% 1 1 +
		2 0 1 7	2 0 1 8	C h a n g e	%
* I t l l d i t n s a e c a p a c y	G W	1 4. 9	1 5. 0	0. 1 +	% 1 +
G f f t i l t i i t t d i t i l e n e r a o n o e e c r c y r o m r a o n a s o u r c e s	T W h	6 0. 9	6 1. 3	0. 4 +	% 1 +
G i f l i i f b l t t t e n e r a o n o e e c r c y r o m r e n e w a e s o u r c e s	T W h	2. 0	1. 8	0. 2 -	1 1 % -
E l i i d i i b i d t t t t t t e c r c y s r u o n o e n c u s o m e r s	T W h	2. 0 5	2. 3 5	0. 3 +	1 % +
E l i i l d t t t t e c r c y s a e s o e n c u s o m e r s	T W h	3 7. 0	3 7. 6	0. 6 +	2 % +
S f l t l t d t a e s o n a r a g a s o e n c s o m e r s u u	T W h	9. 9	9. 6	0. 3 -	3 % -
S l f h t a e s o e a	0 0 0 ´T J	2 3. 7	2 3. 2	0. 4 -	2 % -

* Comparison applying IFRS 15 (changing the manner of reporting since Jan 1, 2018) to 2017; according to the standard, neither distribution revenues nor distribution expenses are reported where an energy group sells electricity in an area in which it does not own the distribution grid. Application of this part of the standard significantly affects energy groups' total revenues and expenses (without affecting total reported profit).

** Adjusted net income = Net income adjusted for extraordinary effects that are generally unrelated to ordinary financial performance in a given year (such as fixed asset impairments and goodwill write-off)

*** On the last date of the period

**** Headcount increase is primarily related to new acquisitions of ESCOs and in Czechia, it is also related to insourcing of sales companies' external employees

Y-O-Y CHANGE IN EBITDA BROKEN DOWN BY SEGMENT

Main causes of y-o-y change in EBITDA:

• Higher expenses on emission allowances for generation (CZK -1.3 bn) due to increase in their prices and lower allocation of free allowances
• Effect of settlement agreement with Sokolovská uhelná in 2017 (CZK -0.7 bn)
• Positive effect of change in Romanian RES regulation in 2017, resulting from valuation of allocated green certificates (CZK -0.8 bn)
• Lower allocation of green certificates to wind farms (CZK -0.6 bn), only one certificate per generated MWh allocated since Jan 1, 2018; two certificates were allocated in 2017
• Total allowed distribution revenues were higher thus reflecting increased investment in distribution grids (CZK +1.0 bn)

OTHER INCOME (EXPENSES)

( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
E B I T D A	3. 9 5	4 9. 5	4. 4 -	8 % -
D i i i i d i i * t t t t e p r e c a o n, a m o r z a o n a n m p a r m e n s	2 8. 3 -	2 9. 8 -	1. 5 -	% 5 -
O ( ) t h i e r n c o m e e p e n s e s x	2. 9 -	6. 2 -	3. 4 -	% 1 1 8 -
I i ( ) t t n e r e s n c o m e e x p e n s e s	3. 5 -	4. 9 -	1. 3 -	3 8 % -
I l d h i i t t t n e r e s o n n u c e a r a n o e r p r o v s o n s	1. 6 -	1. 8 -	0. 2 -	1 1 % -
( ) f I i t t d i t i n c o m e e p e n s e s r o m n e s m e n s a n s e c r e s x v u	2. 6	0. 1	2. 4 -	% 9 5 -
O t h e r	0. 3 -	0. 3	0. 6 +	-
I t n c o m e a x e s	3. 8 -	3. 0 -	0. 8 +	2 0 % +
N t i e n c o m e	1 9. 0	1 0. 5	8. 5 -	% 4 5 -
N t i d j t d e n c o m e a u s e -	2 0. 7	1 3. 1	7. 6 -	3 7 % -

Depreciation, Amortization, and Impairments* (CZK -1.5 bn)

• Additions to fixed asset impairments including goodwill write-off (CZK -1.5 bn)
• Effect of nonrecurrent income from sale of residential property in Prague in 2017 (CZK -1.1 bn)
• Lower depreciation and amortization (CZK +1.2 bn), primarily due to updated long-term service life estimates for ČEZ power plants

Other Income (Expenses) (CZK -3.4 bn)

• Effect of termination of MOL stockholding in 2017, including related operations (CZK -4.5 bn)
• Higher interest income (expenses) (CZK -1.3 bn) primarily due to lower interest capitalization after completion of the new Ledvice facility
• Share in profit or loss of Turkish companies, including effect of associated ČEZ provisions and impairments (CZK +1.6 bn)
• Income from refunded interest on gift tax on emission allowances for 2011 and 2012 (CZK +0.7 bn)
• Other effects (CZK +0.1 bn), primarily foreign exchange effects and revaluation of financial derivatives

Net Income Adjustments

• In 2018 adjusted for the negative effect of additions to ČEZ provisions and impairments corresponding to the value of potential partial performance under provided guarantees for Akcez group companies' loans due to continued weakening of the TRY/USD exchange rate in 2018, reflecting Turkey's macroeconomic and political developments (CZK +0.9 bn), and for the effect of fixed asset impairments and goodwill primarily in Czechia (CZK +1.0 bn), Bulgaria (CZK +0.6 bn), Poland (CZK +0.2 bn), and Romania (CZK -0.3 bn)
• In 2017 adjusted for the negative effect of fixed asset impairments and goodwill write-off in Turkey (CZK +1.3 bn), fixed asset impairments in Bulgaria (CZK +0.9 bn), impairments of projects under development in Poland (CZK +0.5 bn), impairments of other assets (CZK +0.3 bn), and for the positive effect of reversal of impairments for the Počerady CCGT plant (CZK -1.3 bn)

YEAR 2018CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector and 2018 Summary

Summarized Financial Results

Operations Team Results

Development Team Results

Ambitions for 2019

GENERATION FROM TRADITIONAL SOURCES WAS 61.3 TWH, INCLUDING NEARLY 30 TWH OF NUCLEAR ELECTRICITY

Nuclear Power Plants (+6%)

+ Optimized outages at both power plants and higherthan-average availability of Temelín NPP

Coal-Fired Power Plants (-4%) Czechia (-5%)

• Longer outages at Prunéřov 2, Mělník 3, and Mělník 1 power plants
• Lower generation by Dětmarovice power plant
• + Shorter outages at Tušimice 2 & Prunéřov 1 power plants
• + Commercial operation of Ledvice 4 power plant (new facility)

Poland (0%)

• +Shorter outages (Chorzów)
• Longer outages (Skawina)

Other (+1%)

• − Worse-than-average hydrometeorological conditions in Czechia and reconstruction of Dlouhé Stráně pumped storage plant
• +ČEZ Energo included in the consolidation group
• +Higher generation by Počerady CCGT plant

OPERATIONS TEAM—NUCLEAR PLANTS SELECTED EVENTS IN 2018

Nuclear Facilities

Temelín Nuclear Power Plant

• An engineering economy study of long-term operation of the Temelín Nuclear Power Plant (2060+) was completed, confirming the feasibility of the plant's long-term operation by 2060 for Unit 1 and 2062 for Unit 2; no significant safety engineering limitations for operation even beyond this horizon were identified in the study.
• Achievable capacity increased by 2 MWeat both units, to a total of 2,164 MWe.
• A contract for heat supply from the Temelín NPP was signed by ČEZ, a. s., the statutory city of České Budějovice, and city-owned joint-stock company Teplárna České Budějovice, initiating steps for building a hot-water pipe with estimated start of heat supply in 2020.

Dukovany Nuclear Power Plant

Operating license for an indefinite period of time for Units 3 and 4 came into effect on Jan 1, 2018.

New Nuclear Plants

• EIA report for the construction of a new unit at Dukovany submitted to MoE.
• An application for extension of validity of the EIA opinion issued in 2013 for the new Temelín unit project was submitted.

OPERATIONS TEAM—CONVENTIONAL PLANTS AND HEATING SELECTED EVENTS IN 2018

Conventional generating facilities

• A decision was taken to restore a desulfurization absorber at Dětmarovice power plant after a fire in 2017 so as to keep the plant in operation after 2021. Restoration is estimated to be completed in 2020.
• A project was launched for a 3 MW lithium-ion battery system at Tušimice to provide ancillary services to ČEPS. Pilot operation is estimated to start by the end of 2019.
• Unfavorable hydrological conditions in Czechia limited the operation of both hydroelectric and conventional plant, having the greatest impact on the operation of hydroelectric power plants, Hodonín power plant, and Poříčí power plant.
• Both Polish companies, CEZ Chorzów and CEZ Skawina, were preparing for the introduction of a capacity market in electricity (CRM) aiming to ensure sufficient electricity generation capacity in Poland after the expected shutdown of significant generation capacities due to stricter emission legislation (BREF/BAT) after 2020 (similarly to western Europe). ČEZ Skawina succeeded in auctions and won contracts for 2021 and for 2022–2026.

Heat Sector

• A 100% stake was acquired in July in AYIN, s.r.o., a company operating the district heating system for the town of Nejdek under a lease contract valid until the end of 2027.
• A contract was made for transfer of 100% of shares in ITX Media a.s., a company owning and operating 22 heat pumps in Teplice. The share transfer came into effect on Jan 1, 2019.

OPERATIONS TEAM—MINING, FINANCE, & ADMINISTRATION SELECTED EVENTS IN 2018

• Saleable output was 21 million tons of coal.
• The Bílina Mines site started to be supplied with power directly from the Ledvice power plant.
• Reconstruction and overhaul of excavator KU300/K68 at Bílina Mine completed.
• Following the Czech government's decision modifying environmental limits for mining at Bílina Mine, the process of obtaining an EIA and mining license until 2035 continued.

Mining Finance and Administration

Finance

• S&P credit rating reaffirmed at "A−" with a stable outlook; Moody's reaffirmed at "Baa1" while improving outlook to positive.
• International rankings of U.S. journal Institutional Investor assessed ČEZ as having the best investor relations and the best corporate governance system among all EMEA utilities.

Supporting and Centralized Activities

Project for "Centralized and Supporting Activities Redesign & Optimization" launched with an ambition to permanently cut expenses by approx. CZK 0.5 bn a year primarily by enhancing process efficiency and reducing central and supporting unit staff by 15–20%.

SEGMENT: GENERATION—TRADITIONAL ENERGY

( C ) E B I T D A Z K b n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	1 7 9	1 5 6	2 4 -	1 3 % -
P l d o a n	1. 1	1. 0	0 1 -	1 2 % -
O t h t t e r s a e s	0 0	0 0	0 0	-
G t i t d i t i l e n e r a o n r a o n a e n e r g y -	1 9 1	1 6 6	2 5 -	% 1 3 -

Czechia (CZK -2.4 bn)

• Higher expenses on emission allowances for generation (CZK -1.3 bn) due to increased market prices and lower allocation of free allowances
• Higher generation by nuclear power plants (CZK +1.0 bn)
• Lower generation by coal-fired plants (CZK -0.2 bn), lower generation by other plants (CZK -0.2 bn), lower heat generation (CZK -0.1 bn)
• Higher fixed expenses (CZK -0.8 bn), primarily higher personnel expenses and facility maintenance expenses
• Lower gross margin on non-energy activities (CZK -0.3 bn), primarily due to lower revenues from other CEZ Group segments
• Effect of settlement agreement with Sokolovská uhelná in 2017 (CZK -0.7 bn)
• Other effects (CZK +0.2 bn), primarily higher profit from commodity trading

Poland (CZK -0.1 bn)

Most importantly lower amounts of heat supplied, primarily due to climatic conditions at the beginning of 2018, and effect of y-o-y increase in market prices of biomass and emission allowances

MINING & OTHER SEGMENTS

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i e c a z	4 1	3 8	0 3 -	% 8 -
M i i n n g	4 1	3 8	0 3 -	% 8 -

Czechia (CZK -0.3 bn)

Higher additions to provisions and impairments (CZK -0.2 bn)

Other effects (CZK -0.1 bn), primarily higher electricity and personnel expenses

O h t t t e r s a e s O t h e r	0 1 - 2 2	0 2 - 1. 9	0 1 - 0 3 -	1 0 % 5 - 1 3 % -
C h i z e c a	2 2	2 0	0 2 -	1 0 % -
( ) n			a n g e	%
C E B I T D A Z K b	2 0 1 7	2 0 1 8	C h

Czechia (CZK -0.2 bn)

Most importantly a positive effect of Škoda Praha Invest's nonrecurrent revenue in 2017 from settlement with a contractor participating in the construction of the new Ledvice facility and renovation of the Prunéřov power plant

GENERATION FROM TRADITIONAL SOURCES—WE HAVE AN AMBITION TO RAISE GENERATION BY 8% IN 2019

Nuclear Power Plants (+4%)

+Optimization of outages at both power plants

Coal-Fired Power Plants (+7%) Czechia (+11%)

+ Shorter outages at Prunéřov 2 and Ledvice 4 power plants

Poland (-27%)

⁻Lower generation due to gross margin maximization and compliance with NOx limits (Skawina)

+Shorter outages (Chorzów)

Other (+45%)

+ Primarily higher generation by Počerady CCGT plant due to favorable market prices of electricity and gas

ČEZ CONTINUES HEDGING ITS GENERATION REVENUES IN THE MEDIUM TERM IN LINE WITH STANDARD POLICY

Hedge price of generated electricity and EUA purchase price as at Feb 28, 2019

Electricity selling price (EUR/MWh)

EUA purchase price (EUR/t)

Note: The average purchase price of EUA in 2020 includes allowances allocated under derogations (with zero value).

Share of Hedged Production of ČEZ* Facilities as at Feb 28, 2019

The foreign exchange position for 2020 is hedged at an average rate of 26.95 CZK/EUR, for the years 2021–2023 is hedged at approx. 26–27 CZK/EUR on average.

OPERATIONS TEAM KEY OBJECTIVES FOR 2019

• Minimize expenses associated with continued mining beyond environmental limits.
• Closely coordinate mining operations and development with planned operation of conventional facilities.
• Maintain the required level of commercial reserves for the future.
• Optimize capital expenditures on mining machinery projects.

Mining Generation—Traditional Energy

Existing Generating Facilities

• Continually enhance the safety of nuclear and nonnuclear generating facilities.
• Ensure NPP availability at the level of the world's best practice.
• Maximize the creation of the segment's operating cash flow in 2019 and ensure optimum compliance with environmental and regulatory requirements for the operation of coal-fired plants, in particular, in 2020+.
• Continue to prepare development projects with margin benefits resulting from increasing nuclear generation to over 31 TWh a year (combining change in fuel incl. campaign optimization as well as modifications to conventional island technology) with significant economic benefits from 2022.
• Ensure the conditions for long-term NPP operation (fulfilling the Dukovany LTO and Temelín PSR action plans).

Heat Sector

Start the construction of a hot-water pipe from Temelín to České Budějovice.

New Nuclear Plants

Ensure fulfillment of the targets of the New NPP strategic program for 2019 with emphasis on the EIA process at Dukovany.

Finance and Administration

Finance

• Effectively support maintaining CEZ Group's medium-term financial stability.
• Minimize average financing costs.

Supporting and Centralized Activities

• Ensure nuclear fuel deliveries for 2019 and optimum purchase of fuel for 2020+.
• Manage expenditure on supporting activities efficiently.
• Complete the construction and commission a new corporate data center at Tušimice.
• Fulfill the objectives of the "Centralized and Supporting Activities Redesign & Optimization" project with a permanent gain of approx. CZK 0.5 bn a year.

YEAR 2018CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector and 2018 Summary

Summarized Financial Results

Operations Team Results

Development Team Results

Ambitions for 2019

RENEWABLE GENERATION WAS 1.8 TWH

Germany (+11%)

+ Effect of acquisition of wind farms in Lettweiler Höhe (belonging to the CEZ Group portfolio since September 2017)

Czechia (-10%)

Lower generation by small hydroelectric power plants due to worse hydrometeorological conditions

Romania (-15%)

Worse weather conditions

ESCO SALES INCREASED BY 120% TO CZK 16 BN

Germany (>200%)

+Effect of Elevion group acquisition

(since Sep 1, 2017)

+ Effect of Kofler Energies group acquisition (since Aug 1, 2018)

Czechia and Slovakia (+27%)

+ Organic growth and new acquisitions by ČEZ ESCO in late 2017

Other Countries

+ Acquisition of Polish companies Metrolog and OEM Energy (acquired at the turn of 2018) and organic growth

DEVELOPMENT TEAM—SALES SEGMENT, TRADING SELECTED EVENTS IN 2018

ESCO Activities

• Revenue from sales of noncommodity products and services in Czechia and Slovakia: CZK 5.5 bn (+27% y-o-y).
• In Slovakia, the ESCO group acquired a 55% share in SPRAVBYTKOMFORT Prešov, a 49% share in Bytkomfort, a 100% share in SERVISKOMFORT (newly ČEZ Servis, s.r.o.), and a 50% share in KLF-Distribúcia (construction and operation of a local distribution system substation) and 100% in TMT Energy (newly ČEZ Distribučné sústavy a.s.). In Czechia, it acquired a 100% share in Domat Holding.
• Revenue from sales of noncommodity products and services abroad: CZK 10.4 bn (more than a 200% increase y-o-y).
• Acquisition of a 100% share in Kofler group in Germany, 100% share in Polish company Metrolog, and 100% share in Romanian company High-Tech Clima.

Sales—Retail

• Transfer of corporate and municipal customers ("B2B portfolio") from ČEZ Prodej to ČEZ ESCO completed.
• Service ČEZ SERVIS VYTÁPĚNÍ was used by more than 12,000 new end-use customers since Jan 1, 2018.
• Redesign of customer care centers based on actual customer requirements continued in Czechia.
• Customer care transformed to ČEZ Vanzare in Romania.

Trading*

• Excellent results achieved in commodity trading in 2017 were even surpassed in 2018.
• Business income of Trading* in 2018 was CZK 3 bn, i.e., 50% more y-o-y.

^* The economic effect of Trading activities is generated primarily at ČEZ, a. s. (i.e., reported in the financial results of the Operations team within the Generation—Traditional Energy segment); in addition, a portion of the business income (corresponding to the difference between internal demand for the transaction and the contracted external trade of CEZ Group) is only reflected in CEZ Group's financial results in the year of delivery, i.e., future years. In particular, this concerns ongoing hedging of future electricity generation, emission allowance purchases for generation, or electricity and gas purchases for end-use customers.

DEVELOPMENT TEAM—DISTRIBUTION & NEW ENERGY GENERATION SEGMENTS - SELECTED EVENTS IN 2018

Distribution

Czechia

• Investments in distribution grids totaling CZK 10.4 bn, aimed at efficient maintenance and preparation for decentralized energy.
• 11 fiber-optic telecommunications infrastructure construction projects executed as an important condition for future development of decentralized energy and digitization.
• ČEZ Distribuce's strategy updated in order to increase 2022 EBITDA by CZK 2 bn as compared to the current business plan.

Abroad

• Significant reduction of distribution losses in Romania (8.6% losses in 2018 as compared to 9.8% in 2017).
• Implementing legislation to Emergency Ordinance No. 114/2018 passed in Romania, including a methodology for the determination of regulated prices for household consumers. Based on available proposals for secondary legislation, there can be a negative effect for CEZ Group companies of up to CZK 0.1 bn in 2019.
• Significant reduction of distribution losses in Bulgaria (9.1% losses in 2018 as compared to 10.4% in 2017).
• The Bulgarian Commission for Protection of Competition disapproved the Bulgarian asset sale transaction in July 2018 and subsequently interrupted the proceedings related to Inercom's second application for transaction review. Both ČEZ and Inercom brought an appeal in cassation against the Commission's decision to Supreme Administrative Court.

Generation—New Energy

• A 50% share was acquired in a joint venture with GP Joule for the development of 8 wind farms in Germany with an installed capacity of up to 130 MW. The first turbines are expected to start operation in 2020.
• A 50% share was acquired in 4 project companies in collaboration with Baywa, an important German developer, for the purpose of development of up 63 MW in Germany.
• The construction of our first project in France, the Ascheres wind farm with an installed capacity of 13.6 MW, started in October. Commissioning is expected in H2 2019.
• Finalization of our Bordeaux transaction (8 wind farms in France in an advanced stage of development) with an installed capacity of up to 119 MW. The first turbines are expected to start operation in 2022.

DEVELOPMENT TEAM—NEW ENERGY SEGMENT (INVEN CAPITAL) SELECTED EVENTS IN 2018 & FIRST SUCCESSFUL EXIT

Inven Capital SICAV, a.s., is ČEZ's wholly-owned subsidiary with variable capital, focusing on investments in clean-tech startups in a later stage of growth.

Selected Events in 2018

• A co-investment contract was signed in March 2018 with the European Investment Bank (EIB), which undertook to entrust up to EUR 50 m to the fund. Inven Capital then changed its legal form and manages two sub-funds: Inven Capital—Sub-Fund A (CEZ Group) and Inven Capital—Sub-Fund B (EIB).
• The fund invested in five companies up to 2017: sonnen, SunFire, tado, Cloud&Heat Technologies, and VU LOG.
• Additional investments were made in 2018: Cosmo Tech (vendor of a SW platform for the optimization of decisionmaking in asset management), Driivz (vendor of SW platform for charging station management); additionally, investments were made in existing companies sonnen, SunFire, and Cloud&Heat Technologies.

First successful exit: Sale of the Fund's first acquisition—sonnen

• Investment in a minority share in sonnen, a German manufacturer of battery storage systems, was the Fund's first investment back in 2015.
• In February 2019 sale of Inven Capital's stake in sonnen (jointly with other investors) to Shell was finalized.
• The sale was in accordance with the company's strategy to seek companies with high potential for investment appreciation and hold shares for 3–7 years. Achieved selling price and achieved return on invested capital considerably exceeded its initial expectations of ČEZ.

SEGMENT: SALES

( C ) E B I T D A Z K b n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	4 1	3 9	0 2 -	6 % -
G e r m a n y	0 1	0 5	0 3 +	% 2 0 0 >
B l i u g a r a	0 6	0 2	0 4 -	6 7 % -
O h t t t e r s a e s	0 2 -	0 2 -	0 0	1 9 % +
S l a e s	4 6	4 3	0 3 -	6 % -

Czechia (CZK -0.2 bn)

• Lower gross margin, primarily due to higher expenses on electricity and natural gas purchases (CZK -0.8 bn)
• Settlement of unbilled electricity and gas (CZK +0.3 bn)
• Other effects (CZK +0.3 bn): primarily lower intragroup expenses of ČEZ Prodej and development of ESCO activities

Germany (CZK +0.3 bn)

Elevion group and Kofler Energies group have been included in CEZ Group's consolidated results since September 2017 and August 2018, respectively

Bulgaria (CZK -0.4 bn)

Positive effect of out-of-court settlement agreement made between CEZ Elektro Bulgaria and state-owned energy company NEK in 2017

Other Countries (CZK 0.0 bn)

• Slovakia (CZK -0.2 bn): Primarily due to nonrecurrent revenue from portfolio sale in 2017
• Poland (CZK +0.1 bn): Contribution of acquisitions made in 2018 partially eliminated by increased purchase prices of electricity for end-use customers
• Romania (CZK +0.1 bn): Primarily higher gross margin related to increased expenses on electricity purchases in 2017 that were not reflected in regulated revenue until 2018

SEGMENT: DISTRIBUTION

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	1 6 0	1 2 7	1. 2 +	% 7 +
R i o m a n a	1. 7	1. 6	0 1 -	% 6 -
B l i u g a r a	1. 3	1. 0	0 3 -	2 6 % -
D i i b i t t s r u o n	1 9 0	1 9 7	0 7 +	4 % +

Czechia (CZK +1.2 bn)

• Higher gross margin on electricity distribution (CZK +1.5 bn) primarily due to y-o-y increase in permitted revenues reflecting increased investments in the distribution grid (CZK +1.0 bn)
• Effect of the application of IFRS 15 on revenues from activities to ensure input power and connection (CZK -0.3 bn)

Romania (CZK -0.1 bn)

• Lower gross margin on electricity distribution due to lower tariffs (CZK -0.2 bn)
• Higher reversal of provisions (CZK +0.1 bn)
• Effect of the application of IFRS 15 on revenues from activities to ensure input power and connection (CZK -0.1 bn)

Bulgaria (CZK -0.3 bn)

• Lower gross margin on electricity distribution (CZK -0.1 bn)
• Higher additions to provisions for litigation (CZK -0.1 bn)
• Effect of the application of IFRS 15 on revenues from activities to ensure input power and connection (CZK -0.1 bn)

SEGMENT: GENERATION—NEW ENERGY

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i e c a z	1. 8	1. 4	0 4 -	2 3 % -
R i o m a n a	2 9	1. 4	1. 5 -	5 3 % -
G e r m a n y	0 5	0 5	0 0	3 % +
O t h t t e r s a e s	0 2 -	0 0	0 2 +	-
G t i e n e r a o n n e e n e r g w y -	5 0	3 2	1. 7 -	% 3 5 -

Czechia (CZK -0.4 bn)

• Addition to provisions for potential refund of Čekanice PV plant revenue (CZK -0.5 bn)
• Higher gross margin on the electricity generation (CZK +0.2 bn) primarily due to favorable generation mix

Romania (CZK -1.5 bn)

• Positive effect of change in RES regulation in 2017, resulting from valuation of allocated green certificates (CZK -0.8 bn)
• Lower allocation of green certificates to wind farms (CZK -0.6 bn), only one certificate per generated MWh allocated since Jan 1, 2018; two certificates were allocated in 2017
• Lower generation (CZK -0.4 bn) primarily due to worse weather conditions
• Increase in market prices of electricity (CZK +0.3 bn)

Germany (CZK 0.0 bn)

• Acquisition of wind parks with an installed capacity of 35.4 MW at Lettweiler Höhe from September 2017 (CZK +0.1 bn)
• Worse weather conditions (CZK -0.1 bn)

Other Countries (CZK +0.2 bn)

Lower impairments and fixed expenses in Poland

2019 AMBITION FOR RENEWABLE GENERATION GROWTH OF 15%

Germany (+19%)

+Worse-than-average weather conditions in 2018

Czechia (+8%)

+ Worse-than-average hydrometeorological conditions in 2018

Romania (+16%)

+Worse-than-average weather conditions in 2018

2019 AMBITION FOR ESCO SALES' GROWTH TO OVER CZK 20 BN

Germany (+19%)

+Organic growth and new acquisitions in 2018

Czechia and Slovakia (+39%)

+ Organic growth and new acquisitions by ČEZ ESCO in 2018

Other Countries (+39%)

+ Organic growth in Poland and acquisition of High-Tech Clima in Romania in 2018

DEVELOPMENT TEAM KEY OBJECTIVES FOR 2019

Distribution

Czechia

• Prepare the distribution system for the development of decentralized generation, accumulation, electric mobility, and change in consumption structure.
• Implement measures from ČEZ Distribuce's updated strategy (maximize revenue, increase cost and investment effectiveness, ensure reliability and safety of electricity supply).

Abroad

• Protect ČEZ's legal rights in Bulgaria and complete the sale of assets
• Maximize return on investment in Romania.

Sales—Retail

Czechia

• Maintain market share in electricity (No. 1 in the market) and reinforce our position in natural gas (No. 2) with unique services and product packages.
• Further develop noncommodity products and services (photovoltaics, heating maintenance, heating systems, ČEZ Mobil, etc.).
• Improve the care of and be closer to our customers (increasing the overall CX index by 6%, strengthening online tools, completing redesign of customer care centers) and continue cultivating the market and enhancing consumer protection.
• Increase sales and cost effectiveness.

Abroad, maximize gross margin and reduce fixed expenses.

ESCO Activities

Czechia & Slovakia

• Reinforce ČEZ ESCO's position in the domestic market and in Slovakia through organic growth and acquisitions.
• Increase existing ESCO group companies' revenue from sale of noncommodity products in Czechia to CZK 7.7 bn.

Abroad (other than Slovakia)

• Continue to develop ESCO activities through organic growth and selective acquisitions (especially in Germany)
• Increase existing foreign companies' revenue from sale of noncommodity products to CZK 12.7 bn.

New Energy

Renewables

• Execute the RES development strategy in Czechia.
• Operate the RES portfolio efficiently in Czechia and abroad.
• Complete the construction of the Ascheres, France wind park with an installed capacity of 13.6 MW.
• Increase the value of development acquisitions abroad. Inven Capital
• Expand investment activities and make 1–2 new growth investments.
• Define exit strategies and financial parameters for sale of companies in the portfolio.

YEAR 2018CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector and 2018 Summary

Summarized Financial Results

Operations Team Results

Development Team Results

Ambitions for 2019

WE ESTIMATE 2019 EBITDA AT CZK 57 TO 59 BN, NET INCOME AT CZK 17 TO 19 BN

Selected y-o-y positive effects:

• Higher realization prices of electricity incl. hedging effects
• Higher generation by both nuclear and coal-fired power plants
• Growth ambitions in energy services and savings
• Effect of a new IFRS 16 standard concerning leases (positive effect on EBITDA only)

Selected y-o-y negative effects:

• Higher expenses on emission allowances for generation
• Lower gross margin on electricity sales due to higher purchase prices of electricity

Selected prediction risks and opportunities (reasons for the interval):

• Availability of generating facilities
• New development acquisitions
• Legal disputes (in particular, with SŽDC)
• Realization of Sale of Bulgarian assets

Effect of adjustment for extraordinary effects in 2018

34The values of adjusted net income exclude extraordinary effects that are generally unrelated to ordinary financial performance in a given year (such as fixed asset impairments and goodwill write-off).

KEY SUBSTANTIVE OBJECTIVES FOR 2019

O O S P E R A T I N T e a m	O D E V E L P M E N T T e a m
En fe t io f p la t d t he ir t im l su re s a o p e ra ns o ow e r p n s a n o p a  i la b i l i ty av a M im ize he io f o ing h f low in t t t  ax c re a n o p e ra c a s io d im l ia i h t t t g e ne ra n a n e ns u re o p u m c o m p nc e w iro l a d la ire fo he t t t t e nv nm e n a n re g u o ry re q u m e n s r f c f t io l- ire d la t in t icu la in 2 0 2 0 +. o p e ra n o o a p n s, p a r r, Pr inc in le t io t e p a re a n re a s e nu c a r g e ne ra n o ov e r  ( fu 3 1 T W h b in ing ha in l inc l. c ig a y e a r c o m c ng e e a m p a n t im iza t io l l a d i f ic t io t t io l o p n a s w e s m o a ns o c o nv e n na is la d t hn lo ) i t h ig i f ic t ic b f i t n e c o g y w s n a n e c o no m e ne s fro 2 0 2 2. m En he d i io fo lo io f n le t t -t t  su re c o n ns r ng e rm o p e ra n o u c a r la ( fu l f i l l ing he Du ko L T O d Te l ín P S R t t p n s va ny a n m e ). t io la a c n p ns fu f f f En l i l lm t t he t t t he N N P P t t ic su re e n o a rg e s o s ra e g  i t h ha is t he E I A t Du ko p ro g ra m w e m p s o n p ro c e s s a va ny	P h C h d i i b i f h d l t t t t t t  r e p a r e e z e c s r u o n s y s e m o r e e v e o p m e n f d t l t i l t i l t i b i l i t o e c e n r a g e n e r a o n, a c c m a o n, e e c r c m o u u y, d h i t i t t a n c a n g e n c o n s u m p o n s r u c u r e. I i i E S C O i ' f t n c r e a s e e x s n g g r o u p c o m p a n e s r e v e n u e r o m  C l t Z K 2 0 b s a e o o e r n. v I t h l d t f f t i f l  n c r e a s e e s a e s a n c o s e e c v e n e s s o s a e s i d f h i f t t c o m p a n e s a n u r e r m p r o v e c a r e o r o u r c u s o m e r s ( i i t h l l C X i d b 6 % ). n c r e a s n g e o v e r a n e x y E h R E S d l i C h i d t t t t t  x e c u e e e v e o p m e n s r a e g y n z e c a a n S f f f C t t h i t i R E t l i i i t l i h i d o p e r a e e e s n g p o r o o e c e n n e c a a n x y z b d. a r o a E d i i i i d k 1– 2 I t t t t x p a n n v e s m e n a c v e s a n m a e n e w n v e n  C i t l t h i t t a p a g r o n e s m e n s. w v C l t t h l f B l i t  o m p e e e s a e o u g a r a n a s s e s.
C E Z G r o u p
f f "C S & O " f f F l i l l t h b j t i t h t l i d d t i A t i i t i R d i t i i t i j t i t h b i t e o e c e s o e e n r a e a n p p o r n g c e s e e s g n p m a o n p r o e c a e n e o  u v z u v z w C Z K 0. 5 b d i t h t i t d d t i i t l d t i i t t f f b 1 5– 2 0 % a p p r o x. n a y e a r a n w e s m a e r e u c o n n c e n r a a n s u p p o r n g u n s a y

• Decide in a qualified way whether to use the opportunity of ČEZ's option to cancel sale of the Počerady Power Plant.
• Validate the business & investment model for NNPP construction in Czechia and sign a contract with the Czech government.
• Update the business policy and strategies in the context of European trends and regulation.

ANNEXES

• EBITDA—Q4 Year-on-Year Comparison
• Net Income—Q4 Year-on-Year Comparison
• EBITDA—Main Reasons for Estimated Year-on-Year Change
• Net Income—Main Reasons for Estimated Year-on-Year Change
• Cash Flows
• Credit Facilities and Bonds
• Investments in Fixed Assets
• Balance Sheet Overview
• Mining
• Electricity Consumption
• Market Developments
• Change in Segment Structure from Jan 1, 2019
• Electricity Procured and Sold
• Definitions of Alternative Indicators according to ESMA

EBITDAQ4 YEAR-ON-YEAR COMPARISON

CEZ Group EBITDA (CZK -2.2 bn):

• Generation—Traditional Energy (CZK -1.0 bn): Revaluation of trading derivatives (CZK -0.4 bn); lower generation by coal-fired power plants (CZK -0.2 bn), lower heat generation (CZK -0.2 bn), consolidation effects (CZK -0.2 bn)
• Generation—New Energy (CZK -1.4 bn): Romania (CZK -0.9 bn): of which, positive effect of change in RES regulation in 2017 resulting from valuation of allocated green certificates (CZK -0.8 bn); Czechia (CZK -0.6 bn): of which, addition to provisions for potential revenues refund of Čekanice PV plant in 2018 (CZK -0.5 bn)
• Distribution (CZK +0.6 bn): Czechia (CZK +0.6 bn): primarily higher allowed revenue reflecting increased investments in distribution grids (CZK +0.3 bn) and lower fixed operating expenses (CZK +0.2 bn)
• Sales (CZK -0.4 bn): Romania (CZK -0.2 bn) primarily due to increase in electricity purchasing prices; Slovakia (CZK -0.2 bn) primarily due to extraordinary revenue from sale of portfolio in 2017

NET INCOME Q4 Y-O-Y COMPARISON

( C Z K b ) n	Q 4 2 0 1 7	Q 4 2 0 1 8	C h a n g e	%
E B I T D A	1 2. 9	1 0. 7	2. 2 -	1 % 7 -
D i i i i d i i * t t t t e p r e c a o n, a m o r z a o n a n m p a r m e n s	6. 7 -	7. 8 -	1. 2 -	1 7 % -
O h i ( ) t e r n c o m e e x p e n s e s	2. 9 -	1. 1 -	1. 8 +	6 3 % +
I t n c o m e a x e s	0. 9 -	0. 5 -	0. 4 +	4 0 % +
N t i e n c o m e	2. 4	1. 3	1. 1 -	4 7 % -
N t i d j t d e n c o m e a u s e -	3. 4	1. 5	1. 9 -	% 5 5 -

Depreciation, Amortization, and Impairments* (CZK -1.2 bn)

• Higher depreciation and amortization (CZK -0.3 bn), primarily due to updated long-term service life estimates for ČEZ power plants
• Higher additions to fixed asset impairments including goodwill write-off (CZK -0.9 bn)

Other Income (Expenses) (CZK +1.8 bn)

Share in profit or loss of Turkish companies, including effect of associated ČEZ provisions and impairments (CZK +1.8 bn)

Net Income Adjustments

• In y-o-y comparison of Q4, 2018 adjusted for the negative effect of fixed asset impairments, including goodwill, primarily in Czechia (CZK +0.7 bn), Poland (CZK +0.2 bn), and Bulgaria (CZK +0.1 bn) and for ČEZ's additions to allowances for receivables from Akcez (CZK +0.2 bn) and for the positive effect of reversal of a portion of ČEZ provisions for potential performance under provided guarantee for Akcez group companies' loans due to appreciation of TRY/USD exchange rate in Q4 2018 (CZK -0.6 bn) and for the positive effect of reversal of a portion of fixed asset impairments in Romania (CZK -0.4 bn)
• In y-o-y comparison of Q4, 2017 adjusted for the negative effect of fixed asset impairments in Bulgaria (CZK +0.9 bn), goodwill write-off and fixed asset impairments in Turkey (CZK +0.8 bn), impairments of projects under development in Poland (CZK +0.2 bn), impairments of other assets (CZK +0.4 bn), and for the positive effect of reversal of impairments for the Počerady CCGT plant (CZK -1.3 bn)

ESTIMATED Y-O-Y CHANGE IN EBITDA MAIN CAUSES BY SEGMENT

ESTIMATED Y-O-Y CHANGE IN NET INCOME MAIN CAUSES

A d j t d t i s e n e n c o m e u 2 0 1 8	1 3 1
E B I T D A		8. 5
I F R S 1 6	0.	5	I F R S 1 6— t d d f l a n e w s a n a r o r e a s e s ( h i t h t t f t d c a n g e n e s r u c u r e o r e p o r e e x p e n s e s f f i t h t t t t l t i n n n m
E f f f E U A i f f d t t t e c o g a x r e u n	0. 7		) o e e c o o a e c o e w u I i d i i d i i t t t  n c r e a s e n e p r e c a o n a n a m o r z a o n ( C Z K 0. 4 b ) n - ( C ) I i i t t Z K 0. 1 b  n c r e a s e n n e r e s e x p e n s e n -
D i t i d e p r e c a o n a n i i t t a m o r s a o n	0. 4		E f f f f d f E U A i f t t t e c o r e u n o g a x N t i i 2 0 1 8 f f d d  o n r e c u r r e n n c o m e n r o m r e u n e
I t n c o m e a x	1. 7		f i t t i t t i i l l n e r e s o n g a o n e m s s o n a o a n c e s x w f 2 0 1 1 d 2 0 1 2 o r a n
O h f f t t e r e e c s	0. 3		I t n c o m e a x : f H i h i b t  g e r e a r n n g s e o r e a x Č D f d f E Z, i 2 0 1 8 t t  e e r r e a x a s s e o a. s. n ,
A d j t d t i 2 0 1 9 E s e n e n c o m e u		1 8	O f f t h t e r e e c s : P i i l f i h f f d t  r m a r o r e g n e c a n g e e e c s a n y x l i f f i i l d i i t t r e v a u a o n o n a n c a e r v a v e s
	C	Z K b n

CASH FLOWS

Cash Flows from Operating Activities (CZK +35.4 bn)

• Income after adjustments, including income tax (CZK +45.7 bn): earnings before tax (CZK +13.5 bn), depreciation and amortization of nuclear fuel (CZK +32.2 bn), changes in provisions (CZK +2.8 bn), foreign exchange gains and losses (CZK +0.8 bn), impairments and other noncash income and expenses (CZK -0.3 bn), income tax paid (CZK -3.3 bn)
• Changes in assets and liabilities (CZK -10.4 bn): change in net trade receivables and payables including advances and unbilled electricity (CZK -5.9 bn), change in emission allowances (CZK -4.5 bn), change in net payables and receivables from derivatives including options (CZK +1.5 bn), change in inventories (CZK +0.9 bn), change in short-term liquid securities and term deposits (CZK +0.5 bn), change in other receivables and payables (CZK -2.9 bn)

Cash Flows Used in Investing Activities (CZK -25.9 bn)

• Investments in fixed assets* (CZK -26.4 bn)
• Acquisition of subsidiaries, associates, and joint ventures (CZK -2.2 bn)—of which, Germany (CZK -1.0 bn), Czechia and Slovakia (CZK -1.0 bn), other (CZK -0.2 bn)
• Change in financial assets with limited availability (CZK -0.7 bn)
• Proceeds from sale of noncurrent assets—liquid bonds (CZK +3.1 bn)

Cash Flows Provided by Financing Activities (CZK -12.8 bn)***

• Dividends paid to shareholders (CZK -17.6 bn)
• Balance of loans and repayments (CZK +5.2 bn)
• Balance of repayments of and additions to other long-term liabilities (CZK -0.5 bn)
• Sale of treasury stock (CZK +0.2 bn)

CEZ GROUP MAINTAINS A STRONG LIQUIDITY POSITION

Utilization of Short-Term Lines* (as at Dec 31, 2018)

Bond Maturity Profile (as at Dec 31, 2018)

• CEZ Group has access to CZK 27.5 bn in committed credit facilities, using CZK 11.7 bn as at Dec 31, 2018.
• The average maturity of CEZ Group's financial debt was more than 6 years as at Dec 31, 2018.
• Net Debt/EBITDA* was 3.05 as at Dec 31, 2018.
• Causes of a slight increase in debt above the mediumterm target indicator value (3.0) included the following specific, mostly temporary, factors:

S i f ic fa f fe in he lu t t t p e c c o rs a c g v a e f Ne De b / E B I T D A in 2 0 1 8 t t o	( C Z K bn )	Im t p ac on in d ica to r
( 1 ) Pu ha f e iss ion l low fo rc se o m a an ce s r **) lec tr ic i ty t ion in 2 0 2 0 & 2 0 2 1 e g en er a	3. 6	0. 0 7 +
( 2 ) H ig he in de i ts d i ty r m ar g p os on co mm o ha l ing fro inc ing t ex c ng es re su m re as — lec tr ic i ty ice e p r s	3. 4	0. 0 7 +
( 3 ) D ire t inc lus ion f in te t a l in c o re s cc ru a ( ) de b t t ho do log ne w me y	2. 2	0. 0 4 +
( ) f f 4 D ire t inc lus ion ina ia l lea ing in c o nc s de b ( ion fo im lem ion f t t ta t p re p ar a r p en o I F R S 1 6 )	0. 2	0. 0 0 +
Ne t De b t / E B I T D A f te de b t a r d j fo he bo fa tm t t to a us en r a ve c rs		2. 8 6

Note: The first two factors are temporary.

CAPITAL EXPENDITURE BROKEN DOWN BY SEGMENT

C Z K b n	2 0 1 7	2 0 1 8
G t i T d i t i l E e n e r a o n— r a o n a n e r g y	1 1. 9	8. 0
O f f h i h N l l i i t i w c : u c e a r u e a c q u s o n	3. 6	2. 4
G t i N E e n e r a o n— e n e r g w y	0. 7	0. 4
M i i n n g	1. 6	1. 6
D i t i b t i s r o n u	1 2 9	1 2 9
C h i z e c a	9. 8	1 0. 4
R i o m a n a	1. 3	1. 2
B l i g a r a u	1. 8	1. 2
S l a e s	0. 3	0. 7
O h * t e r	1. 7	2 7
T l t o a	2 9. 1	2 6. 4

Y-o-y changes in capital expenditure in segments:

• Generation—Traditional Energy: Reflects lower procurement of nuclear fuel as well as, in particular, higher investments in the comprehensive renovation of the Prunéřov power plant and a new unit at the Ledvice power plant in 2017.
• Generation—New Energy: Effect of RES acquisitions in France in 2017.
• Sales: Increase due to new ESCO acquisitions, including gaining control of ČEZ Energo (fully consolidated since Jul 1, 2018).
• Other *: Primarily in connection with major investments in license purchases and renewals by ČEZ ICT Services and the construction of a corporate data center at Tušimice.

BALANCE SHEET OVERVIEW

Property, plant and equipment, nuclear fuel, and investments decreased by CZK 12.1 bn

• Reclassification of Bulgarian companies as assets held for sale CZK -9.8 bn
• Depreciation and amortization, impairments, and disposal of assets exceeding investments CZK -1.5 bn
• Nuclear fuel CZK -0.8 bn

Other noncurrent assets increased by CZK 4.6 bn

• Noncurrent intangible assets CZK +4.3 bn, of which transfer of emission allowances that will not be used in the next year CZK +3.6 bn and goodwill primarily due to new investments CZK +0.9 bn
• Restricted Financial assets CZK +0.4 bn
• Investments in associates and joint ventures CZK -0.2 bn, primarily inclusion of ČEZ Energo in fully consolidated companies

Equity decreased by CZK 15.0 bn

Dividends CZK -17.6 bn

• Net income CZK +10.5 bn
• Other comprehensive income CZK -10.6 bn
• Effect of the application of new IFRS standards CZK +2.4 bn
• Sale of treasury shares CZK +0.2 bn

Long-term liabilities increased by CZK 8.4 bn

• Long-term debt CZK +10.0 bn
• Long-term payables from derivatives including options CZK +3.3 bn
• Long-term provisions CZK +2.5 bn, primarily nuclear provisions
• Long-term liabilities resulting from connection fees (primarily due to IFRS change) CZK 3.3 bn
• Deferred tax liability CZK -3.3 bn, other CZK -0.8 bn

Current assets increased by CZK 91.0 bn

• Receivables from derivatives including options CZK +51.7 bn due to increased trading volume
• Reclassification of Bulgarian companies as assets held for sale CZK +17.5 bn
• Net trade receivables CZK +21.7 bn
• Emission allowances CZK +7.3 bn
• Cash and cash equivalents CZK -5.3 bn
• Other CZK -1.9 bn, primarily decrease in debt financial assets

Current liabilities increased by CZK 90.2 bn

• Payables from derivatives including options CZK +66.7 bn
• Trade payables CZK +15.0 bn
• Liabilities associated with assets held for sale CZK +6.2 bn
• Short-term provisions CZK +3.1 bn, in particular for emission allowances
• Current portion of long-term debt CZK -4.0 bn, short-term borrowings CZK +0.7 bn
• Other CZK +2.5 bn

MINING IN 2019 WE EXPECT COAL EXTRACTION TO GROW BY 8%

Severočeské doly—Coal Extraction (Millions of Tons)

• Decrease in coal sale of 0.6 million tons in 2018 was primarily due to lower demand for thermal coal by CEZ Group power plants and heating plants and to lower demand for sorted coal by customers outside CEZ Group.
• We estimate production will grow by 1.6 million tons in 2019 due to higher demand for thermal coal by CEZ Group power plants and heating plants.

ELECTRICITY CONSUMPTION IN THE DISTRIBUTION AREA OF ČEZ DISTRIBUCE

Consumption in the Distribution Consumption* Area of ČEZ Distribuce

Temperature- and Calendar-Adjusted

• Analysis based on CEZ Group's internal data.
• CEZ Group's distribution area covers around ⅝ of Czechia's territory, so the data are a good indicator of nationwide consumption trends.

MARKET DEVELOPMENTS IN 2017 - 2018

A change in the classification of CEZ Group companies into segments was made with effect from Jan 1, 2019. In particular, most companies from the "Other" segment were transferred to different segments and the segment was renamed to "Supporting Activities."

The original segmentation primarily reflected core business activities; now more account is taken of mutual business relations making up the overall segment chain. For example, SD Kolejová doprava (a service subsidiary of Severočeské doly) was transferred from the "Other" segment to the "Mining" segment.

The change also reflects CEZ Group's internal management and breakdown into the Operations team and the Development team.

Starting from Jan 1, 2019, the classification of companies into segments matches exactly their classification into the Operations team (Mining, Generation—Traditional Energy, and Supporting Activities segments) and Development team (Sales, Distribution, and Generation—New Energy segments).

The classification of key companies as of Jan 1, 2019, and changes from the previous segmentation are shown on the following pages, including a global comparison of 2018 and 2017 EBITDA in both structures.

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: GENERATION—TRADITIONAL ENERGY

Segment companies:

ČEZ, a. s. Energotrans, a.s. Elektrárna Počerady, a.s. ČEZ Teplárenská, a.s. Elektrárna Dětmarovice, a.s. Energetické centrum s.r.o. Tepelné hospodářství města Ústí n. Labem Areál Třeboradice, a.s. Elektrárna Dukovany II, a.s. Elektrárna Temelín II, a.s. Elektrárna Mělník III, a. s. OSC, a.s. AYIN, s.r.o. ČEZ Energo, s.r.o.5) Energocentrum Vítkovice, a. s. 5)

• ÚJV Řež, a. s. d) ČEZ Energetické produkty, s.r.o. d) ŠKODA PRAHA a.s. d) ČEZ ENERGOSERVIS spol. s r.o. d) MARTIA a.s. d) EGP Invest d) Centrum výzkumu Řež s.r.o. d) ČEZ Bohunice a.s.d)
• CEZ Chorzów II sp. z o.o. b) CEZ Chorzów S.A.CEZ Skawina S.A.CEZ Towarowy Dom Maklerski sp. z o.o. CEZ Produkty Energetyczne Polska d)

CEZ Trade Romania S.R.L.

Jadrová energetická spoločnosť Slovenska* d) CEZ Hungary Ltd. e) CEZ Srbija d.o.o.

AK-EL Kemah Elektrik Üretim ve Ticaret *AK-EL Yalova Elektrik Üretim A.S. *Aken. El. Enerjisi Ithalat Ihracat ve TT * Akenerji Dogal Gaz Ithal. Ihr.ve TT A.S. * Akenerji Elektrik Üretim A.S. *

Legend:

Bold = new company in the segment (lettered note)

Strikethrough = company transferred out of the segment (numbered note)

Moved to segment:

1) to Traditional Energy 2) to New Energy 3) to Mining 4) to Other 5) to Sales 6) to Distribution

Moved from segment:

• a) from Traditional energy
• b) from New Energy
• c) from Mining
• d) from Other
• e) from Sales
• f) from Distribution

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: GENERATION—TRADITIONAL ENERGY

Effective until Dec 31, 2018:

( C ) E B I T D A Z K b n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	1 9 7	1 6 5	2 4 -	1 3 % -
P l d o a n	1. 1	1. 0	0 1 -	% 1 2 -
O t h t t e r s a e s	0 0	0 0	0 0	-
G t i t d i t i l e n e r a o n r a o n a e n e r g y -	1 9 1	1 6 6	2 5 -	1 3 % -
f f f E t i J 1, 2 0 1 9 e c e r o m a n v :

G i d i i l t t t e n e r a o n r a o n a e n e r g y -	1 9 2	1 6 7	2 5 -	1 3 % -
O h t t t e r s a e s	0 1 -	0 0	0 1 +	7 8 % +
P l d o a n	1. 1	1. 0	0 1 -	% 1 3 -
C h i z e c a	1 8 2	1 5 7	2 5 -	1 4 % -
E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: MINING

Segment companies:

Severočeské doly a.s. LOMY MOŘINA spol. s r.o. * PRODECO, a.s. d) Revitrans, a.s. d) SD - Kolejová doprava, a.s. ^d)

Le d: g en
Bo l d = in he ( le d n ) t t t ter te ne w co mp an y se g me n e o

Moved between segments:

d) from Other

Effective until Dec 31, 2018:

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i e c a z	1 4	3 8	0 3 -	8 % -
M i i n n g	4 1	3 8	0 3 -	8 % -

Effective from Jan 1, 2019:

( C ) E B I T D A Z K b n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	4 9	4 5	0 4 -	% 7 -
M i i n n g	4 9	4 5	0 4 -	% 7 -

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: DISTRIBUTION

Segment companies:

ČEZ Distribuce, a. s. CEZ Distributie S.A.CEZ Romania S.A. d) CEZ Razpredelenie Bulgaria AD CEZ Bulgaria EAD d) CEZ ICT Bulgaria EAD d) Sakarya Elektrik Dagitim A.S. *

Akcez Enerji A.S. * d)

Le d: g en	Mo d be tw ts ve ee n s eg me n :
Bo l d = in he ( le d n ) t t t ter te ne w co mp an y se g me n e o	d ) fro O t he m r

Effective until Dec 31, 2018:

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	1 6 0	1 7 2	1. 2 +	7 % +
R i o m a n a	1. 7	1. 6	0 1 -	6 % -
B l i g a r a u	1. 3	1. 0	0 3 -	2 6 % -
D i t i b t i s r o n u	1 9 0	1 9 7	0 7 +	% 4 +
f f f E t i J 1, 2 0 1 9 e c e r o m a n v : E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i e c a z	1 6 0	1 2 7	1. 2 +	% 7 +
R i o m a n a	1. 8	1. 7	0 1 -	7 % -
B l i u g a r a	1. 5	1. 1	0 4 -	2 6 % -
D i i b i t t s r u o n	1 9 3	1 9 9	0 7 +	3 % +

52* Joint ventures consolidated using the equity method (i.e., excluded from EBITDA)

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: GENERATION—NEW ENERGY

Segment companies:

ČEZ OZ uzavřený investiční fond a.s. ČEZ Obnovitelné zdroje, s.r.o. ČEZ Recyklace, s.r.o. Inven Capital, SICAV (podfondy ČEZ) d) REN Development s.r.o.

CEZ Bulgarian Investments B.V. d) CEZ Holdings B.V. d)

CEZ New Energy Investments B.V. d)

CEZ France SASFerme Eolienne d´Andelaroche SAS FERME EOLIENNE DE LA PIBALLE SASFERME EOLIENNE DE NEUVILLE-AUX-BOIS SASFERME EOLIENNE DE SAINT-AULAYE SASFERME EOLIENNE DE SAINT-LAURENT-DE-CERISFERME EOLIENNE DE SEIGNY SASFERME EOLIENNE DE THORIGNY SASFERME EOLIENNE DES BREUILS SASFERME EOLIENNE DES GRANDS CLOS SASFERME EOLIENNE DU GERMANCE SAS

CEZ Deutschland GmbHd)

BANDRA Mobiliengesellschaft mbH & Co. KG CASANO Mobiliengesellschaft mbH & Co. KG CEZ Erneuerbare Energien Beteiligungs II GmbH GP JOULE PP X Verwaltungs GmbH GP JOULE PP1 GmbH & Co. KG Green Wind Deutschland GmbHjuwi Wind Germany 100 GmbH & Co. KG Windpark Moringen Nord GmbH & Co. KG Windpark Prezelle GmbH & Co. KG CEZ Erneuerbare Energien Beteiligungs CEZ Erneuerbare Energien Verwaltungs CEZ Windparks Lee GmbH CEZ Windparks Luv GmbH CEZ Windparks Nordwind GmbH Windpark Baben Erweiterung GmbH & Co. KG Windpark Badow GmbH & Co. KG Windpark Fohren Linden GmbH & Co. KG Windpark Frauenmark III GmbH & Co. KG Windpark Gremersdorf GmbH & Co. KG Windpark Cheinitz-Zethlingen GmbH & Co. KG Windpark Mengeringhausen GmbH & Co. KG Windpark Naundorf GmbH & Co. KG Windpark Zagelsdorf GmbH & Co. KG

A.E. Wind S.A.Baltic Green Construction sp. z o.o. Baltic Green I sp. z o.o. Baltic Green II sp. z o.o. Baltic Green III sp. z o.o. Baltic Green IX sp. z o.o. Baltic Green V sp. z o.o. Baltic Green VI sp. z o.o. Baltic Green VIII sp. z o.o. CEZ Chorzów II sp. z o.o. 1)

Tomis Team S.R.L.Ovidiu Development S.R.L. M.W. Team Invest S.R.L.TMK Hydroenergy Power S.R.L.

Free Energy Project Oreshets EAD Bara Group EOOD

Legend:

Bold = new company in the segment (lettered note) Strikethrough = company transferred out of the segment (numbered note)

Moved between segments:

• 1) to Traditional Energy
• d) from Other

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: GENERATION—NEW ENERGY

Effective until Dec 31, 2018:

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	1. 8	1. 4	0 4 -	% 2 3 -
R i o m a n a	2 9	1. 4	1. 5 -	5 3 % -
G e r m a n y	0 5	0 5	0 0	3 % +
O t h t t e r s a e s	0 2 -	0 0	0 2 +	-
G t i e n e r a o n n e w e n e r g y -	5 0	3 2	1. 7 -	3 5 % -

Effective from Jan 1, 2019:

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i e c a z	1. 7	1. 3	0 4 -	% 2 3 -
R i o m a n a	2 9	1. 4	1. 5 -	5 3 % -
G e r m a n y	0 4	0 4	0 0	1 % -
O t h t t e r s a e s	0 4 -	0 2 -	0 2 +	% 4 9 +
G t i e n e r a o n n e w e n e r g y -	4 6	2 9	1. 8 -	3 8 % -

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: SALES

Segment companies:

ČEZ Prodej, s.r.o. ČEZ Energetické služby, s.r.o. ČEZ ESCO, a.s. AirPlus, spol. s r.o. AZ KLIMA a.s.ČEZ Bytové domy, s.r.o. ČEZ Energo, s.r.o. ČEZ LDS, s.r.o. ČEZ Solární, s.r.o. Domat Control System s.r.o. Domat Holding s.r.o. EASY POWER s.r.o.ENESA a.s.HORMEN CE a.s.KART, spol. s r.o. TENAUR, s.r.o. Energocentrum Vítkovice, a. s.a) ČEZ Energo, s.r.o.a)

CEZ ESCO I GmbHCEZ ESCO II GmbHD-I-E ELEKTRO AGEAB Automation Solutions GmbHEAB Elektroanlagenbaus GmbH Rhein/Main Elektro Decker GmbHElevion Co-Investment GmbH & Co. KGElevion GmbHETS Efficient Technical Solutions GmbHETS Efficient Technical Solutions Shanghai Co. Ltd. HAu.S GmbHHybridkraftwerk Culemeyerstraße Projekt GmbH Kofler Energies Energieeffizienz GmbH Kofler Energies Ingenieurgesellschaft GmbH Kofler Energies International GmbH Kofler Energies Italia S.r.l. Kofler Energies Systems GmbH NEK Facility Management GmbH Rudolf Fritz GmbHTGS Engineering Kft WPG Projekt GmbH

CEZ Trade Polska Sp. z o.o. ESCO CITY I Sp. z o.o. ESCO CITY II Sp. z o.o. ESCO CITY III Sp. z o.o. ESCO City IV sp. z o.o. ESCO City V sp. z o.o. ESCO City VI sp. z o.o. Metrolog sp. z o.o. OEM Energy Sp. z o.o. CEZ ESCO Polska sp. z o.o.

CEZ Vanzare S.A.CEZ ESCO ROMANIA S.A.HIGH-TECH CLIMA DOOHIGH-TECH CLIMA S.R.L

CEZ Elektro Bulgaria AD CEZ ESCO Bulgaria EOOD CEZ Trade Bulgaria EAD

AZ KLIMA SK, s.r.o. CEZ Slovensko, s.r.o. CEZ Hungary Ltd. 1) Bytkomfort, s.r.o. ČEZ Distribučné sústavy a.s. KLF-Distribúcia, s.r.o. SERVISKOMFORT s.r.o. SPRAVBYTKOMFORT, a.s. Prešov

Legend:

Bold = new company in the segment (lettered note)

Strikethrough = company transferred out of the segment (numbered note)

Moved between segments: 1) to Traditional Energy a) from Traditional energy

Sakarya Elektrik Perakende Satis A.S. *

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: SALES

E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	4 1	3 9	0 2 -	% 6 -
G e r m a n y	0 1	0 5	0 3 +	2 0 0 % >
B l i g a r a u	0 6	0 2	0 4 -	6 % 7 -
O t h t t e r s a e s	0 2 -	0 2 -	0 0	1 9 % +
S l a e s	4 6	4 3	0 3 -	6 % -
f f f E t i J 1, 2 0 1 9 e c e r o m a n v : ( C ) E B I T D A Z K b n	2 0 1 7	2 0 1 8	C h a n g e	%
C h i z e c a	4 1	3 8	0 3 -	7 % -
G e r m a n y	0 1	0 5	0 3 +	2 0 0 % >
B l i u g a r a	0 6	0 2	0 4 -	% 6 7 -
O h t t t e r s a e s	0 1 -	0 1 -	0 0	1 4 % -
S l a e s	4 7	4 3	0 4 -	9 % -

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: SUPPORTING ACTIVITIES (PREVIOUSLY "OTHER")

Segment companies:

ČEZ ICT Services, a. s. Telco Pro Services, a. s. ČEZ Korporátní služby, s.r.o. ČEZ Asset Holding, a.s.

CEZ Polska Sp. z o.o.

CEZ Ukraine LLCCEZ MH B.V.

ÚJV Řež, a. s. 1) ČEZ Energetické produkty, s.r.o. 1) ŠKODA PRAHA a.s. 1) ČEZ ENERGOSERVIS spol. s r.o. 1) MARTIA a.s. 1) EGP Invest 1) Centrum výzkumu Řež s.r.o. 1) ČEZ Bohunice a.s.1)

Inven Capital, SICAV, a.s. 2) PRODECO, a.s. 3) Revitrans, a.s. 3) SD - Kolejová doprava, a.s. 3) CEZ Produkty Energetyczne Polska 1)

CEZ Romania S.A.6)

CEZ Bulgaria EAD 6) CEZ ICT Bulgaria EAD 6)

CEZ Deutschland GmbH2)

CEZ Holdings B.V. 2) CEZ New Energy Investments B.V. 2) CEZ Bulgarian Investments B.V. 2)

Akcez Enerji A.S.* 6)

Legend:

note)

Moved between segments:

• 1) to Traditional Energy
• 2) to New Energy
• 3) to Mining
• 6) to Distribution

Strikethrough = company transferred out of the segment (numbered

EBITDA BY SEGMENTS AS IN EFFECT FROM JAN 1, 2019 SEGMENT: SUPPORTING ACTIVITIES (PREVIOUSLY " OTHER")

Effective until Dec 31, 2018:

O t h e r	2 2	1. 9	0 3 -	% 1 3 -
O t h t t e r s a e s	0 1 -	0 2 -	0 1 -	% 1 0 5 -
C h i e c a z	2 2	2 0	0 2 -	1 0 % -
E B I T D A ( C Z K b ) n	2 0 1 7	2 0 1 8	C h a n g e	%

Effective from Jan 1, 2019:

S i i i t t t u p p o r a c v e s	1. 2	1. 3	0 0	2 % +
O h t t t e r s a e s	0 0	0 0	0 0	6 1 % +
C h i z e c a	1. 2	1. 3	0 0	2 % +
( C ) E B I T D A Z K b n	2 0 1 7	2 0 1 8	C h a n g e	%

Electricity balance (GWh)

	2017	2018	Index 2018/2017
Electricity procured	56,620	56,930	+1%
Generated in-house (gross) In-house and other consumption, including pumping in	62,887	63,080	+0%
pumped-storage plants	-6,268	-6,150	-2%
Sold to end customers	-37,036	-37,634	+2%
Sold in the wholesale market (net)	-15,408	-15,332	-0%
Sold in the wholesale market	-264,140	-333,262	+26%
Purchased in the wholesale market	248,732	317,931	+28%
Grid losses	-4,176	-3,965	-5%

Electricity generation by source (GWh)

Nuclear	28,339	29,920	+6%
Coal and lignite	28,176	26,974	-4%
Water	2,156	1,974	-8%
Biomass	808	789	-2%
Photovoltaic	138	146	+5%
Wind	1,571	1,380	-12%
Natural gas	1,696	1,894	+12%
Bio gas	4	4	-4%
Total	62,887	63,080	+0%

Sales of electricity to end customers (GWh)

Households	-13,418	-13,014	-3%
Commercial (low voltage)	-4,892	-4,909	+0%
Commercial and industrial (medium and high voltage)	-18,726	-19,711	+5%
Sold to end customers	-37,036	-37,634	+2%

Distribution of electricity (GWh)

	2017	2018	Index 2018/2017
Distribution of electricity to end customers	52,042	52,347	+1%

Electricity balance (GWh) by segment

	Ge ion t ne ra -	d i ion l tra t a	Ge ion t ne ra	- n ew
2 0 1 8	en erg	y	en erg	y	D is tr i bu	t ion	Sa	le	E l im ina	t ion s	C E Z Gr	ou p
	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-
E lec tr ic i ty d p roc ure	5 5, 0 3 9	% +1	1, 7 6 1	% 1 1 -	0	-	1 3 0	-	0	-	5 6, 9 3 0	% +1
Ge ( ) te d in- ho ne ra us e g ros s	6 1, 1 6 1	% +0	1, 7 8 2	% 1 1 -	0	-	1 3 6	-	0	-	6 3, 0 8 0	% +0
In- ho d o t he t ion inc lu d ing ing in us e a n r c on su mp p um p ,
d-s lan tor ts p um p e ag e p	6, 1 2 2 -	2 % -	2 1 -	1 9 % -	0	-	7 -	-	0	-	6, 1 0 5 -	2 % -
So l d to d c to en us me rs	2 3 7 -	+5 %	0	-	0	-	3 9, 2 9 6 -	+1 %	1, 8 9 9	6 % -	3 7, 6 3 4 -	+2 %
So l d in t he ho les le ke t ( t ) a ma r ne w	-5 4, 8 0 2	+1 %	1, 7 6 1 -	1 1 % -	3, 9 6 5	5 % -	3 9, 1 6 6	+1 %	1, 8 9 9 -	6 % -	1 5, 3 3 2 -	0 % -
So l d in t he ho les le ke t a ma r w	-3 5 1, 6 6 9	+2 2 %	2, 5 3 0 -	9 % -	0	-	3, 0 9 7 -	+2 7 %	2 4, 0 3 4	1 9 % -	3 3 3, 2 6 2 -	+2 6 %
Pu ha d in t he ho les le ke t rc se w a ma r	2 9 6, 8 6 7	+2 7 %	7 6 8	3 % -	3, 9 6 5	5 % -	4 2, 2 6 4	+2 %	2 5, 9 3 3 -	1 8 % -	3 1 7, 9 3 1	+2 8 %
Gr i d los se s	0	-	0	-	3, 9 6 5 -	% 5 -	0	-	0	-	3, 9 6 5 -	% 5 -

Electricity generation by source (GWh) by segment

	Ge t ion tra ne ra -	d i t ion l a	Ge t ion ne ra	- n ew
	en erg y		en erg	y	D is i bu ion tr t		Sa le		E l im ina ion t s		C E Z Gr	ou p
	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-
Nu lea c r	2 9, 9 2 0	+6 %	0	-	0	-	0	-	0	-	2 9, 9 2 0	+6 %
Co l a d l ig i te a n n	2 6, 9 7 4	4 % -	0	-	0	-	0	-	0	-	2 6, 9 7 4	4 % -
Wa ter	1, 7 2 1	% 8 -	2 5 3	% 1 1 -	0	-	0	-	0	-	1, 9 7 4	% 8 -
B iom as s	8 9 7	2 % -	0	-	0	-	0	-	0	-	8 9 7	2 % -
P ho l ic tov ta o	0	-	1 4 6	% +5	0	-	0	-	0	-	1 4 6	% +5
W in d	0	-	1, 3 8 0	1 2 % -	0	-	0	-	0	-	1, 3 8 0	1 2 % -
Na tur l g a as	1, 7 5 8	+4 %	0	-	0	-	1 3 6	-	0	-	1, 8 9 4	+1 2 %
B io g as	0	-	4	4 % -	0	-	0	-	0	-	4	4 % -
To ta l	6 1, 1 6 1	+0 %	1, 7 8 2	1 1 % -	0	-	1 3 6	-	0	-	6 3, 0 8 0	+0 %

Sales of electricity to end customers (GWh) by segment

	Ge ion t tra ne ra -	d i ion l t a	Ge ion t ne ra	- n ew
	en erg y			en erg y		ion	Sa le	E l im ina t ion		C E Z s		Gr ou p
	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-	G W h	+/-
Ho ho l ds us e	0	-	0	-	0	-	1 3, 0 1 4 -	3 % -	0	-	1 3, 0 1 4 -	3 % -
Co ia l ( low l ) tag mm erc vo e	-1	+6 %	0	-	0	-	4, 9 0 8 -	+0 %	0	-	4, 9 0 9 -	+0 %
Co ia l a d in du ia l ( d ium d h ig h v l ) tr tag mm erc n s me an o e	-2 3 6	+5 %	0	-	0	-	2 1, 3 7 4 -	+4 %	1, 8 9 9	6 % -	1 9, 7 1 1 -	+5 %
So l d to d c to en us me rs	2 3 7 -	+5 %	0	-	0	-	3 9, 2 9 6 -	+1 %	1, 8 9 9	6 % -	3 7, 6 3 4 -	+2 %

Electricity balance (GWh) by country

20 18	Cze chi	a	Po lan	d	Ro ma	nia	Bu lga	ria	Ge rma	ny	Oth	ers	Elim ina	tion s	CE Z G	rou p
	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +
Ele ctr icit d y p roc ure	53, 004	+1 %	2, 486	+0 %	1, 168	-15 %	6	-3 %	266	+11 %	0	-	0	-	56, 930	+1 %
Ge d in -ho (gr ) ate ner use oss In-h nd oth tion , in clu din ing in ous e a er c ons um p g p um p	58, 798	+1 %	2,8 21	+0 %	1,1 88	-15 %	6	-3 %	266	+1 1%	0	-	0	-	63, 080	+0 %
d-s lan tora ts pum pe ge p	-5,7 94	-2 %	-33 5	+1 %	-20	+8 %	0	-	0	-	0	-	0	-	-6, 150	-2 %
So ld t nd tom o e cus ers	-17 ,5 04	-2 %	-2,7 39	-5 %	-3, 425	+4 %	-10 ,5 65	+5 %	0	-	-3, 401	+13 %	0	-	-37 634 ,	+2 %
So ld i n th hol le m ark et ( ) net e w esa	-33 352 ,	+2 %	253	-37 %	3, 124	+10 %	11, 509	+3 %	-26 6	+11 %	3, 401	+13 %	0	-	-15 332 ,	-0 %
Sol d in the wh ole sal ark et e m	-33 7,6 17	+26 %	-2,7 77	+2 %	-1,7 87	+4 %	-60 2	>20 0%	-26 6	+1 1%	-13 2	-64 %	9,9 18	+14 %	-33 3,2 62	+26 %
Pur cha sed in the wh ole sal ark et e m	304 ,26 4	+29 %	3,0 30	-3 %	4,9 10	+8 %	12, 111	% +7	0	-	3,5 33	+4 %	-9,9 18	+14 %	317 ,93 1	+28 %
Gri d lo sse s	-2, 147	-0 %	0	-	-86 6	-6 %	-95 1	-14 %	0	-	0	-	0	-	-3, 965	-5 %

Electricity generation by source (GWh) by country

	Cze chi Po a			lan d		Ro nia ma		Bu lga ria		Ge rma ny		Oth ers		Elim ina tion s		rou p
	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +
Nuc lea r	29, 920	+6 %	0	-	0	-	0	-	0	-	0	-	0	-	29, 920	+6 %
Co al a nd lign ite	24, 416	-5 %	2,5 57	-0 %	0	-	0	-	0	-	0	-	0	-	26, 974	-4 %
Wa ter	1,8 84	-9 %	6	-40 %	83	+19 %	0	-	0	-	0	-	0	-	1,9 74	-8 %
Bio ma ss	531	-7 %	258	+10 %	0	-	0	-	0	-	0	-	0	-	789	-2 %
Pho tov olta ic	140	+6 %	0	-	0	-	6	-3 %	0	-	0	-	0	-	146	+5 %
Win d	9	+14 %	0	-	1,1 05	-16 %	0	-	266	+1 1%	0	-	0	-	1,3 80	-12 %
Nat l ga ura s	1,8 94	+12 %	0	-	0	-	0	-	0	-	0	-	0	-	1,8 94	+12 %
Bio ga s	4	-4 %	0	-	0	-	0	-	0	-	0	-	0	-	4	-4 %
Tot al	58, 798	+1 %	2, 821	+0 %	1, 188	-15 %	6	-3 %	266	+11 %	0	-	0	-	63, 080	+0 %

Sales of electricity to end customers (GWh) by country

	Cze chi a																																				Po lan	d	Ro ma	nia	Bu lga	ria	Ge rma	ny	Oth	ers	Elim ina	tion s	CE Z G	rou p
	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +
Ho hol ds use	-6,9 46	-3 %	0	-	-1,7 24	-1 %	-4,3 44	-2 %	0	-	0	-	0	-	-13 ,01 4	-3 %
Co ial ( low ltag e) mm erc vo	-2,1 07	-1 %	-26 1	-4 %	-91 2	+10 %	-1,4 72	-5 %	0	-	-15 6	+3 1%	0	-	-4,9 09	+0 %
Co ial a nd ind ust rial (m edi d h ig h v olta ) mm erc um an ge	-8,4 51	-1 %	-2,4 78	-5 %	-78 9	+8 %	-4,7 48	+16 %	0	-	-3,2 45	+17 %	0	-	-19 ,71 1	+5 %
So ld t nd tom o e cus ers	-17 ,5 04	-2 %	-2,7 39	-5 %	-3, 425	+4 %	-10 ,5 65	+5 %	0	-	-3, 401	+13 %	0	-	-37 634 ,	+2 %

Distribution of electricity (GWh) by country

20 18	Cze chi	a	Po lan	d	Ro ma	nia	Bu lga	ria	Ge rma	ny	Oth ers		Elim ina	tion s	CE Z G	rou p
	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +	GW h	/- +
Dis trib utio f el ect ricit to e nd tom n o y cus ers	35, 980	+0 %	0	-	6,8 26	+3 %	9,5 41	-0 %	0	-	0	-	0	-	52, 347	+1 %

Methods Used to Calculate Indicators Unspecified in IFRS

In accordance with ESMA guidelines, ČEZ provides detailed information on indicators that are not reported as standard in IFRS statements or the components of which are not directly available from standardized statements (financial statements). Such indicators represent supplementary information in respect of financial data, providing reports' users with additional information for their assessment of the financial position and performance of CEZ Group or ČEZ. In general, these indicators are also commonly used in other commercial companies, not only in the energy sector.

Indicator
Adjusted Net Income (After-Tax Income, Adjusted)	Purpose: This is a supporting indicator, intended primarily for investors, creditors, and shareholders, which allows interpreting achieved financial results with the exclusion of extraordinary, usually nonrecurring effects that are generally unrelated to ordinary financial performance and value creation in a given period.
	Definition: Net income (after-tax income) +/− additions to and reversals of impairments of property, plant, and equipment and intangible assets, including goodwill +/− additions to and reversals of impairments of developed projects +/− other extraordinary effects that are generally unrelated to ordinary financial performance in a given year and value creation in a given period +/− effects of the above on income tax.
Dividend per Share (Gross)	Purpose: The indicator expresses a shareholder's right to the payment of a share in a joint-stock company's profits (usually for the past year) corresponding to the holding of one share. The subsequent payment of the share in profits is usually subject to taxes, which may be different for different shareholders; therefore, the value before taxes is reported.
	Definition: Dividend awarded in the current year, before taxes, per outstanding share (paid in the reported year from the profits of prior periods).

Most of the components used in the calculation of individual indicators (including EBITDA and Net Debt) are directly shown in financial statements. The components of calculations that are not included in the financial statements are usually shown directly in a company's books and are defined as follows:

Adjusted Net Income indicator—individual components:

Adjusted Net Income (After-Tax Income, Adjusted)	Unit	Q1—Q4 2017	Q1—Q4 2018
Net income	CZK millions	18,959	10,500
Impairments of property, plant, and equipment and intangible assets, including goodwill	CZK millions	(142)	1,766
Impairments of developed projects*)	CZK millions	523	0
Impairments of property, plant, and equipment and intangible assets, including goodwill, at joint ventures**)	CZK millions	1,251	0
Effects of additions to or reversals of impairments on income tax***)	CZK millions	107	(150)
Other extraordinary effects****)	CZK millions	0	938
Adjusted net income	CZK millions	20,698	13,055

*) Included in the row Other operating expenses (impairments of inventories) in the Consolidated Statement of Income

**) Included in the row Share of profit (loss) from associates and joint-ventures in the Consolidated Statement of Income

***) Included in the row Income taxes (deferred tax) in the Consolidated Statement of Income

****) Negative effect of additions to provisions and impairments of a ČEZ receivable corresponding to the value of potential partial performance under provided guarantees for Turkish Akcez group companies' loans due to continued weakening of the TRY/USD exchange rate in 2018 (reflecting Turkey's macroeconomic and political developments); this is included in the Consolidated Statement of Income in the row Share of Profit (Loss) from Associates and Joint Ventures (CZK 425 m) and in the row Impairments of Financial Assets (CZK 513 m).