CEZ A.S. — Investor Presentation 2017

Mar 21, 2017

CONFERENCE CALL ON CEZ GROUP FINANCIAL RESULTS IN 2016

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

Prague, March 21, 2017

Financial values throughout this presentation reflect the restatement of past periods in accordance with IFRS and up-to-date EBITDA definition.

YEAR 2016CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector Martin Novák, Chief Financial and Operations Officer

CEZ Group Summarized Financial Results in 2016 Martin Novák, Chief Financial and Operations Officer

Operations' Results in 2016 and Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer

Development's Results in 2016 and Ambitions for 2017 Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

CEZ Group's Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

WHOLESALE ELECTRICITY PRICE IN CZECHIA IS AMONG THE LOWEST IN THE EU

THE MAIN TRENDS IN EUROPE'S ENERGY SECTOR REMAIN UNCHANGED

Traditional energy is stagnating but remains an indispensable part of the energy sector

• Electricity consumption is stagnating or decreasing
• Surplus of capacities, renewables (RES) are displacing conventional sources
• Pressure on margins from regulators and also new players

RES and decentralized energy are growing

• RES and decentralized solutions represent the energy sector's future and thus the largest investment opportunity
• Main RES technologies are achieving cost-efficiency, which allow curtailing subsidies
• Development and consolidation of technology companies (e.g., Tesla or GE) result in decreasing costs of decentralized electricity generation and electricity storage

Customers are focusing on complex services related to energy utilization

• B2C segment: growing interest in energy, active management of consumption and own production
• B2B segment: outsourcing of energy and facility management as a whole in progress

IMPACT OF ELECTRICITY PRICE DECLINE ON CEZ IS MITIGATED AND DELAYED BY ACTIVE MEASURES

… WHICH IS ALSO CONFIRMED BY CEZ SHARE PRICE DEVELOPMENT

5Spin-off of Uniper from E.ON took place on 12 Sept 2016. E.ON share price has not been adjusted for this fact prior the date.

ČEZ'S STRATEGY IS BASED ON THREE PRIORITIES SELECTED EVENTS IN 2016

Be among the best in the operation of conventional power facilities and proactively respond to the challenges of the 21st century II III

• We received an operating license for Unit 1 of the Dukovany Nuclear Power Plant for an indefinite period of time
• We completed renovation of the brown coal-fired Prunéřov power plant
• Our medium-term Czech portfolio operation strategy was updated in relation to changes in electricity prices and regulatory conditions relating to emission reduction
• Mining license obtained for underground mining at Nástup Mines
• We keep developing projects for new nuclear units at Temelín and Dukovany; we started the EIA procedure for a new unit at Dukovany

Offer customers a wide range of products and services addressing their energy needs

• ČEZ Prodej became the second largest gas supplier in Czechia
• Offer of services focusing on household customers widened to include services related to energy comfort at home
• We acquired 100% shares in AZ Klima a.s. and juwi (now ČEZ Solární), purchased remaining 25% in EVČ and founded ČEZ LDS
• We joined startup accelerator Rockstart to be in touch with the latest innovative customer solutions
• We purchased the first alternative electricity and gas seller, Energie2 Prodej.

Strengthen and consolidate our position in Europe

• We entered the German RES market; CEZ Group acquired 39 operated onshore wind turbines with a total installed capacity of 98 MW
• We invested in tado and ETF and increased our shareholding in sonnen
• We commenced arbitration with Bulgaria for investment nonprotection
• Standard & Poor's affirmed ČEZ's credit rating of A− with a stable outlook in December 2016
• Assured shareholders' dividend for 2015 amounts to CZK 21.5bn

FULFILLMENT OF AMBITIONS 2020 ALSO PROGRESSING WELL, MEASURES TAKEN AND INVESTMENTS MADE ALREADY RESULT IN ADDITIONAL EBITDA OF CZK 4BN

* Presented figures represent improvement in EBITDA upon the Business Plan (from September 2015) for 2020 and 2017, respectively.

ADJUSTED NET INCOME, CZK 19.6BN, BETTER THAN EXPECTED; EBITDA CZK 58.1BN

CZK bn

ADJUSTED NET INCOME

Selected positive effects (as compared to expectation from Nov 8):

• Higher gross margin on electricity generation in Czechia and electricity and gas sales
• Allocation of certificates from 2013–2015 for wind farms in Romania (CZK +0.9bn)
• Lower fixed operating cost

Selected negative effects (as compared to expectation from Nov 8):

Negative effect of USD/TRY exchange rate on the financial results of companies in Turkey

RELATIVE STABILITY OF ČEZ'S PROFITS IS EXCEPTIONAL IN COMPARISON WITH SIMILAR EUROPEAN ENERGY COMPANIES

YEAR 2016CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector Martin Novák, Chief Financial and Operations Officer

CEZ Group Summarized Financial Results in 2016 Martin Novák, Chief Financial and Operations Officer

Operations' Results in 2016 and Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer

Development's Results in 2016 and Ambitions for 2017 Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

CEZ Group's Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

CEZ GROUP FINANCIAL RESULTS

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

		2 0 1 5	2 0 1 6	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 9 5	1 6 5	0 3 -	2 % -
G t i f l t i i t e n e r a o n o e e c r c y	T W h	6 0 9	6 1. 1	0 2 +	0 % +
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	4 9 8	5 0 6	0 8 +	2 % +
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 9 7	3 7 5	0 5 -	1 % -
S l f l d t t t a e s o n a u r a g a s o e n c u s o m e r s	T W h	6 8	8 2	1. 3 +	2 0 % +
S l f h t a e s o e a	0 0 0 ´T J	2 2 3	2 4 0	1. 8 +	8 % +
N b f l ** u m e r o e m p o y e e s	0 0 0 ´s	2 5 9	2 6 9	1. 0 +	4 % +

* 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 amortization). The definition of Adjusted Net Income was refined in Q4 2016 (see Annex). ** At the last day of period

Note: y-o-y change in Operating cash flow was significantly influenced by changes in assets and liabilities. Operating cash flow adjusted for these changes amounted to CZK 61.9bn in 2015 and CZK 50.4bn in 2016, i.e. CZK 11.5bn y-o-y decrease or 19% y-o-y decrease.

YEAR-ON-YEAR CHANGE IN EBITDA BY SEGMENTS

Main drivers of year-on-year change in EBITDA:

• Lower realization prices of generated electricity in Czechia, including the positive effect of hedges (CZK -6.1bn)
• Payment of Railway Infrastructure Administration debt (from 2010) to ČEZ Prodej in 2015 based on a court decision (CZK -1.1bn)
• Positive effect of certificate allocation to Fântânele Vest and Cogealac wind farms in Romania (CZK +1.7bn)

OTHER INCOME (EXPENSES)

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

Depreciation, Amortization, and Impairments* (CZK +4.2bn)

• Lower additions to fixed asset impairments (CZK +4.6bn)
• Higher depreciation and amortization (CZK -0.4bn) primarily due to started depreciation of comprehensively renovated Prunéřov Power Plant

Other Income (Expenses) (CZK -4.7bn)

• Refund of a portion of gift tax on emission allowances for 2011 and 2012 in 2015 (CZK -3.8bn)
• Amortization of a portion of goodwill and additions to impairments at joint ventures in Turkey (CZK -1.3bn)**
• Revaluation of MOL share option (CZK -0.9bn) due to rising share price
• Bond buyback in 2015 (CZK +0.8bn)
• Other (CZK +0.5bn) primarily FX gains

Net income adjustment ***

• 2015 net income adjusted for the negative effect of fixed asset impairments, goodwill amortization, and write-off of abandoned investments (CZK +7.1bn)
• 2016 net income adjusted for the negative effect of fixed asset impairments, goodwill amortization, and write-off of abandoned investments (CZK +4.4bn)** and for the negative effect of developed project impairments (CZK +0.7bn)
• * Including profit/loss from sales of tangible and intangible fixed assets
• ** Reported under Income (Expenses) from investments and securities
• *** The definition of Adjusted Net Income was refined in Q4 2016 (see Annex)

YEAR 2016CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector Martin Novák, Chief Financial and Operations Officer

CEZ Group Summarized Financial Results in 2016 Martin Novák, Chief Financial and Operations Officer

Operations' Results in 2016 and Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer

Development's Results in 2016 and Ambitions for 2017 Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

CEZ Group's Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

OPERATIONS TEAM SELECTED EVENTS IN 2016

• EIA and Mining License obtained for underground mining at Nástup Mines
• Following the Czech government's decision modifying environmental mining limits at Bílina Mine, the process of obtaining EIA and Mining License until 2035 was commenced
• High-capacity coal storage site at Nástup Mines upgraded and integrated with homogenization system

Nuclear Facilities

• Obtained operating license for an indefinite period of time for Dukovany NPP Unit 1 and carried out activities relating to conditions for further operation issued by State Office for Nuclear Safety
• Operational safety enhancement programs at both nuclear power plants for 2016 duly implemented
• Realisation of systemic measures improved performance and quality control of repair and maintenance

Coal-Fired Facilities

Completed comprehensive renovation of Prunéřov Power Plant with (3x250 MWe of installed capacity). Three generating units accepted for service on Jun 10, Jun 30, and Jul 15, 2016 based on successful comprehensive testing, plant certification and successful functional tests of all units

Mining Generation—Traditional Energy Finance and Administration

• On Nov 2, non-recourse loan agreement was signed between EBRD and CEZ Razpredelenie Bulgaria, allowing further reduction of CEZ's financial exposure abroad by CZK 3.1bn
• Systematic internal efficiency measures across CEZ Group
• In December 2016, S&P affirmed ČEZ's credit rating of A− with a stable outlook

Fulfillment of 2020 Ambitions—OPERATIONS Team:Efficiency and development measures helped improve* EBITDA by approx. CZK 2.5bn a year

SEGMENT: GENERATION—TRADITIONAL ENERGY

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

Czechia (CZK -6.5bn)

• Lower realization prices of generated electricity, including the positive effect of hedges (CZK -6.1bn)
• Change in production volume and structure (CZK -0.5bn): lower production at nuclear power plants was significantly offset by higher production at other facilities
• Higher expenses on weld inspections at nuclear power plants and related measures (CZK -0.5bn)
• Lower revenue from ancillary services (CZK -0.3bn)
• Higher profit on commodity trading (CZK +0.5bn)
• Effect of USD/EUR exchange rate on oil-linked contract hedging (CZK +0.4bn)
• Higher heat deliveries (CZK +0.3bn)
• Lower expenses on emission allowances (CZK +0.2bn)
• Other (CZK -0.4bn), primarily higher fixed operating costs

Poland (CZK -0.5bn)

Primarily lower utilization of green certificates in Poland due to decrease in their market price (lower volume of co-fired biomass)

MINING &OTHER SEGMENTS

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

GENERATION—TRADITIONAL ENERGY

Nuclear Power Plants (-10%)

Extended outages of Dukovany NPP and Temelín NPP primarily due to weld inspections

Coal-Fired Power Plants (+6%)

Czechia (+6%)

• +Operation of comprehensively renovated Prunéřov 2 Power Plant
• +Operation of new Ledvice 4 Power Plant (during construction)

Other (+53%)

+ Increased production at Po čerady CCGT plant by +334% (1.8 TWh generated in 2016)

Nuclear Power Plants (+18%)

+Shorter outages, especially at Temelín NPP

Coal-Fired Power Plants (-1%)

• Czechia (0%)
• +Operation of new Ledvice 4 Power Plant facility
• −Sale of Tisová Power Plant (Jan 2, 2017)

Poland (-7%)

− Stricter NOxemission ceilings resulting from Interim National Plan

Other (+8%)

+ Higher production at Po čerady CCGT plant

ČEZ CONTINUES GRADUALLY HEDGING ITS GENERATION REVENUES IN THE MEDIUM TERM

OPERATIONS TEAM KEY OBJECTIVES FOR 2017

• Continue with the process of obtaining EIA and Mining License for Bílina Mines until 2035
• Initiate the preparatory stage of the relocation of coal conveyor lines on the southern slopes of Bílina Mines
• Maintain the required level of commercial reserves for the future

Mining Generation—Traditional Energy Finance and Administration

Existing Generating Facilities

• Obtain operating licenses for the remaining units of Dukovany NPP
• Carry out nuclear unit outages according to plan
• Continuously fulfill operational safety enhancement programs at both nuclear power plants
• Complete the commissioning of a new unit at Ledvice (660 MW)
• Ensure the optimum availability of all facilities

Heat Sector

Finish the preparation of projects for providing safe and efficient deliveries of heat from the Mělník site to Prague on a long-term basis

New Nuclear Power Plants

Continue with the preparation of the NNPP project in line with the National Action Plan for the Development of Nuclear Energy in Czechia

Finance

• Ensure financial stability and efficient management of debt capacity
• Ensure proactive funding of development activities

Support and Centralized Activities

• Continue preparations for the selection procedure of a fuel supplier for Temelín NPP for after 2020
• Implement action plans in purchasing and other centralized and support services in order to promote growth (e.g., by building a new fiber-optic telecommunications infrastructure) and to increase CEZ Group's cost efficiency

YEAR 2016CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector Martin Novák, Chief Financial and Operations Officer

CEZ Group Summarized Financial Results in 2016 Martin Novák, Chief Financial and Operations Officer

Operations' Results in 2016 and Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer

Development's Results in 2016 and Ambitions for 2017 Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

CEZ Group's Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

DEVELOPMENT TEAM—NEW ENERGY SEGMENT SELECTED EVENTS IN 2016

We entered the renewablesmarket in Germany

• CEZ Group acquired in Germany 39 operated onshore wind turbines with a total installed capacity of 98 MW.
• The first acquisition and entry into the market was the Fohren-Linden wind park with 12.8 MW of installed capacity in North Rhine-Westphalia, acquired from investment group AREAM
• The second acquisition is a portfolio of 8 wind parks with 85.25 MW of total installed capacity, acquired from wpd a leading developer and operator of wind parks in Germany
• Through its subsidiary CEZ Deutschland GmbH, CEZ Group became an active member of four associations of wind farm operators and other stakeholders in Germany.

DEVELOPMENT TEAM SELECTED EVENTS IN 2016

Renewables

Romanian regulatory authority ANRE issued final accreditation for support for renewable electricity generation through green certificates for the Fântânele Vest and Cogealac wind parks on Sep 27

New

Energy

Extension of wind park Ayyildiz in Turkey for 13.2 MW was finished

INVEN CAPITAL

Two new investments were made (tado and ETF) and share in sonnen was increased

Sales—Retail

ČEZ Prodej became the second largest gas supplier in Czechia in January 2016

Sales &

Offer of services focusing on residential customers expanded to include, in particular, services relating to energy comfort at home (PV installations as well as heat pumps/gas boilers, inspections, etc.)

Sales—ESCO

• ČEZ ESCO expanded its competences and amended its product portfolio by acquiring AZ Klima and juwi (now ČEZ Solární) and founding ČEZ LDS
• 2016 revenues of ESCO Group exceeded CZK 3bn, i.e., 57% year-on-year increase
• Strategies and business plans were defined for ČEZ's entry into selected ESCO markets abroad; negotiations on specific acquisitions already started in Poland

Trading

• Proprietary trading earned CZK 1.2bn in 2016 (0.5bn more than in 2015)
• Trading activities continued to successfully expand to new markets (especially Spain, Italy, and Belgium)

Czechia

• Phase II of distribution segment redesign finished; 836 employees were transferred from ČEZ Distribuční služby to ČEZ Distribuce on Jul 1
• • Three comprehensive technological projects (data metering at transformer stations, installation of remotely controlled elements, and voltage regulation) started to respond to progress in decentralized generation and support the construction of smart grids
• • Independent customer service started by the distributor

Abroad

On Jul 12, CEZ Group officially commenced international investment arbitration against the Republic of Bulgaria under the Energy Charter Treaty on the grounds of investment non-protection

Fulfillment of 2020 Ambitions—DEVELOPMENT Team:

Efficiency and development measures by Development helped improve* EBITDA by approx. CZK 2.0bn a year.

SEGMENT: GENERATION—NEW ENERGY

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

Czechia (CZK -0.3bn)

Provisioning in connection with legal action concerning Vranovská Ves PV power plant (CZK -0.2bn)

Poland (CZK -0.7bn)

Additions to impairment* on Eco-Wind projects in relation to adverse changes to RES legislation in Poland

Romania (CZK +2.0bn)

• Effect of certificate allocation for November 2013 to September 2015 for Fântânele Vest and October 2014 to September 2015 for Cogealac (CZK +0.9bn); these certificates can be used in the market after the farms' regular support ends
• Resumed allocation of green certificates for Fântânele Vest and Cogealac wind farms since September 2015 (CZK +0.8bn)

SEGMENT: DISTRIBUTION

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

Czechia (CZK +0.8bn)

• Higher amount of distributed electricity (CZK +0.9bn) relating to customers' increased consumption at all voltage levels
• Other (CZK -0.1bn), primarily higher additions to allowances on receivables

Romania (CZK -0.6bn)

• Lower margin on distributed electricity, primarily due to lower regulated tariffs since Jan 1, 2016 (CZK -0.5bn)
• Lower revenues from late fines (CZK -0.1bn)

Bulgaria (CZK +0.1bn)

• Overhead reduction (CZK +0.2bn)
• Higher connection revenues (CZK +0.1bn)
• Provisioning for litigation (CZK -0.2bn)

SEGMENT: SALES

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

Czechia (CZK -1.5bn)

• Payment of Railway Infrastructure Administration debt (from 2010) to ČEZ Prodej in 2015 based on a court decision (CZK -1.1bn)
• Lower settlement of unbilled electricity at ČEZ Prodej (CZK -0.6bn)
• Taking up specific market opportunities in electricity and gas sales in 2016 (CZK +0.4bn) in particular due to significant decrease of wholesale electricity prices in H1 2016 (CZK +0.4bn)

Romania (CZK +0.1bn)

• Higher margin on sold electricity (CZK +0.1bn)
• Overhead reduction (CZK +0.1bn)
• Higher additions to allowances on receivables (CZK -0.1bn)

Bulgaria (CZK -0.1bn)

• Higher margin on sold electricity and positive effect of system imbalances in electricity consumption (CZK +0.2bn)
• Additions to allowances on receivables and provisioning for litigation (CZK -0.3bn)

Other Countries (CZK +0.2bn)

Higher gross margin of CEZ Slovensko, primarily due to lower expenditure on gas purchases (CZK +0.1bn)

GENERATION—NEW ENERGY

+ Better hydrometeorologic conditions for hydroelectricity generation in H2 2016

Romania (-6%)

− Primarily generation restrictions imposed by the semi-state-owned transmission system operator in order to regulate the transmission grid

Czechia (+4%)

+ Worse-than-average weather conditions for the operation of photovoltaic power plants in 2016; Optimization of Číčov biogas plant operation

Better-than-average weather conditions for the operation of small hydroelectric power plants in 2016

Romania (+11%)

+ Anticipated no generation restriction to be imposed by the semi-state-owned transmission system operator in order to regulate the transmission grid

Germany (+235 GWh)

Entry into the German renewables market by taking over the operations of wpd (85.25 MW) and Fohren-Linden (12.8 MW) wind parks.

DEVELOPMENT TEAM KEY OBJECTIVES FOR 2017

Sales—Retail

• Further develop non-commodity products introduced in the past year (financial services, PV installations, gas boilers, etc.) and launch additional products
• Finish the transformation of end-use customer sales and service in Czechia

Sales—ESCO

• Strenghten ČEZ ESCO's position in the Czech market in the full range of products, complemented by strategic acquisitions in 2016, and achieve a growth in revenues of more than 50%
• Start ESCO development abroad through both acquisitions and organic growth (especially in Poland, Germany, and Slovakia)

Trading Distribution New Energy

Renewables

• Expand the portfolio of operated and developed RES projects in stable markets
• Define strategies for participation in auctions focusing primarily on onshore projects in Germany
• Obtain certification for auction qualification and preliminary electricity generation license for the Krasin project (EWC)

INVEN CAPITAL

Carry out 2–4 new acquisitions

Czechia

• • Prepare Phase III of segment redesign, i.e., merger between ČEZ Distribuce and ČEZ Distribuční služby as of Jan 1, 2018
• • Launch a pilot project for smart metering (Automatic Meter Management)
• • Ensure an upward trend and maintain satisfaction with customer service quality

Abroad

• Protect CEZ Group's legal interests in Bulgaria
• Secure fair conditions in the distribution regulatory environment in Romania

YEAR 2016CEZ GROUP YEAR-END CONFERENCE CALL

CEZ Group in the Context of the European Energy Sector Martin Novák, Chief Financial and Operations Officer

CEZ Group Summarized Financial Results in 2016 Martin Novák, Chief Financial and Operations Officer

Operations' Results in 2016 and Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer

Development's Results in 2016 and Ambitions for 2017 Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

CEZ Group's Ambitions for 2017 Martin Novák, Chief Financial and Operations Officer Tomáš Pleskač, Chief Renewables, Distribution and Development Officer

WE EXPECT 2017 EBITDA OF CZK 52BN, ADJUSTED NET INCOME OF CZK 12BN TO CZK 17BN

Note: y-o-y net income decline is negatively influenced by increased depreciation and amortization and lower interest capitalization (approximately CZK 5bn in total) primarily due to completion of comprehensive renovation of Prunéřov Power Plant in 2016 and due to expected completion of new coal-fired unit in Ledvice.

THE TREND OF DECREASING WHOLESALE ELECTRICITY PRICES DETERMINES EBITDA AT ALL EUROPEAN COMPARABLE ENERGY COMPANIES

ČEZ DIVIDEND POLICY—EXPANDING PAYOUT RATIO TO 60%–100% OF CEZ GROUP'S ADJUSTED NET INCOME UNTIL DEVELOPMENT STRATEGY SPECIFICATION

Rationale behind the change of payout ratio to 60%–100%:

• Increased ratio between generated operating cash flows and net income
• Proposed dividend in the given range out of a given year's profits will reflect the cash flows generated in the given year and the development strategy for future periods
• Company expects the percentage range to be narrowed within two years following development strategy specification

O f i E e r e o r o p e a n e n e r g v v w u	i ' d i i d d c o m p a n e s e n y v	l i i p o c e s :
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Co m p an y	* D iv i de d Po l ic n y
Č E Z	6 0 % –1 0 0 % f p f i ts o ro
E d F	% % f p f % % % f ( % f f fo ) 5 5 –6 5 i ts 5 0 in 2 0 1 8, 4 5 –5 0 te 2 0 1 8 d 6 0 t he i t 2 0 1 6 o ro ; a r an no un ce o p ro r
En B W	4 0 % –6 0 % f p f i ts o ro
En l e	5 0 % f p f i in 2 0 1 5, inc ing by 5 in he f 6 5 % f he 2 0 1 8 f i ts ta ts to t ta t o t t o ro re as p er ce n g e p o ev er y y ea r u p rg e o p ro
O E. N	% % f p f fro ( % f f fo ) 5 0 –6 0 i ts 2 0 1 7, d 4 6 t he i t 2 0 1 6 o ro m an no un ce o p ro r
Un ip er	1 0 0 % f o C fo C 7 5- t ing F de d in te A P E X o p er a cr ea se r m a na nc e
Fo tu r m	5 0 % –8 0 % f a d j d f i i h he d iv i de d ing im te ts t t t o us p ro w n g ro w o ve r e
En ie g	0. E U R /s ha f 2 0 1 d 2 0 1 8 ( d 1 E U R /s ha f 2 0 1 6 f i ) 7 7 t re o an an no un ce re o p ro
I be dr la r o	% % f p f f fo ( % f f fo ) 6 5 –7 5 i ts loo 0. 3 1 E U R 2 0 1 7- 2 0 2 0 d 7 5 t he i t 2 0 1 6 o ro r r an no un ce o p ro r ,
R W E	d iv i de d in 2 0 1 6 fo ha t he f te t he d iv i de d i l l r f lec t o t ing C F ( 0. 5 E U R /s ha te d no n r c om m on s re s, re a r n e p er a re ex p ec w d iv i de d in 2 0 1 7 d in im 0. 5 E U R /s ha in t he fo l low ing ) n an m um re ea rs y
In no g y	0 % –8 0 % f p f i ( d 8 0 % f he f i fo 2 0 1 6 ) 7 ts t t o ro ; an no un ce o p ro r
Ve bu d r n	fu ( 3 0. 9 % f f fo 2 0 1 6 ) tu t r t io t p b l is he d d t he i t re p ay -o u a no u an no un ce o p ro r

PROPOSED ČEZ, A. S. DIVIDEND FOR 2016: CZK 33 PER SHARE BEFORE TAX

Note: The dividend out of a given year's profits affects the Net Debt / EBITDA ratio in the following year.

KEY OBJECTIVES FOR 2017

O P E R A T I O N S T e a m	D E V E L O P M E N T T e a m
O b t i t i l i f U i t 2, 3, d 4 f  a n o p e r a n g c e n s e s o r n s a n o t h D k N l P P l t e o a n c e a r o e r a n u v y u w F l f i l l t i l f t h t  u o p e r a o n a s a e y e n a n c e m e n p r o g r a m s t b t h l l t a o n u c e a r p o w e r p a n s C l h i i i f i t t t t o m p e e e c o m m s s o n n g o a n e w u n a  L d i ( 6 6 0 M W ) e v c e C f f t i i t h t h t i t h j t o n n e e p r e p a r a o n o e p r o e c o r  u w l l i l i i h h N i l t t t t n e w n u c e a r p o w e r p a n s n n e w e a o n a A t i P l f t h D l t f N l c o n a n o r e e v e o p m e n o u c e a r C E i h i n e r g y n z e c a	E d t h b l t f l i i t b l k t d  x p a n e r e n e w a e s p o r o o n s a e m a r e s a n f f d i t t i t i i t i i t i i t i l t e n e s r a e g e s o r p a r c p a o n n a c o n s, n p a r c a r o u u h i f h j i G t t t t t s u p p o r e c o n s r u c o n o o n s o r e p r o e c s n e r m a n y F i i h t h t f t i f d- t l d  n s e r a n s o r m a o n o e n u s e c u s o m e r s a e s a n C i i h i d d l d i t d t s e r c e n e c a a n e e o p n o n- c o m m o p r o c s v z v y u d i a n s e r v c e s Č S S C O C t h t E Z E 's i t i i t h h k t i  r e n g e n p o s o n n e z e c m a r e n f f t h l l d t d h i t h i e r a n g e o p r o c s a n a c e e a g r o n r e e n e s u u v w v u f h 0 % d E S C O d l b d, t 5 t t t o m o r e a n a n s a r e v e o p m e n a r o a i l l i P l d, G d S l k i e s p e c a y n o a n e r m a n y, a n o v a a Č Č P t h b t E Z D i t i b d E Z  r e p a r e e m e r g e r e e e n s r c e a n w u D i i b č í l ž b f J 1, 2 0 1 8 t s r u n s u y a s o a n C G P t t E Z 's l l i t t i B l i  r o e c r o u p e g a n e r e s s n u g a r a
C E Z G r o u p
F l f i l l A b i i 2 0 2 0 i f f i i d d l ( d d i i l * E B I T D A f C Z K 9 2 b ) t t t t t +  u m o n s n e c e n c y a n e v e o p m e n s r a e g y a o n a o n

• Proactively face changes in the regulatory and market environment in the energy sector
• Ensure shareholders' consensus on CEZ Group's strategic orientation

ANNEXES

• EBITDA in Q4 2016
• Other Income (Expenses) in Q4 2016
• Expected year-on-year change in EBITDA (2017 vs. 2016)
• Expected year-on-year change in Net Income (2017 vs. 2016)
• Cash Flows in 2016
• Credit Facilities and Bonds—at Dec 31, 2016
• Investments in Fixed Assets in 2016
• Balance Sheet Overview as at Dec 31, 2016
• Electricity Consumption in 2016
• Market Developments in 2015–2016
• Mining in 2016 and 2017
• Electricity Procured and Sold in 2016
• Definitions of Alternative Indicators According to ESMA

EBITDA—Q4 YEAR-ON-YEAR COMPARISON

CEZ Group EBITDA (CZK -2.4bn):

• Generation—Traditional Energy (CZK -2.3bn): Lower realization prices of generated electricity in Czechia, including positive impacts of hedges (CZK -1.6bn), higher expenses on weld inspections at nuclear power plants and subsequent measures (CZK -0.5bn), lower profit on commodity trading (CZK -0.4bn), other (CZK -0.4bn), primarily higher fixed operating costs, lower utilization of green certificates in Poland due to decrease in their market price (CZK -0.2bn), lower revenue from ancillary services (CZK -0.1bn), change in production volume and structure (CZK +0.1bn), lower expenses on emission allowances (CZK +0.6bn), higher heat deliveries (CZK +0.3bn)
• Generation—New Energy (CZK +0.7bn): Primarily the effect of certificate allocation for Romanian wind parks from 2013–2015
• Distribution: Czechia (CZK +0.4bn) primarily higher amount of distributed electricity at all voltage levels; Romania (CZK -0.1bn) lower margin on distributed electricity; Bulgaria (CZK -0.1bn) provisioning for litigation
• Sales: Czechia (CZK -0.5bn) lower settlement of unbilled electricity at ČEZ Prodej (CZK -0.6bn), higher gross margin on gas sales due to higher deliveries and lower costs (CZK +0.2bn); Romania (CZK -0.1bn) higher additions to allowances on receivables; Bulgaria (CZK -0.3bn) additions to allowances on receivables and provisioning for litigation

NET INCOME—Q4 YEAR-ON-YEAR COMPARISON

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

Depreciation, Amortization, and Impairments* (CZK +2.6bn):

• Lower additions to fixed asset impairments (CZK +3.1bn)
• Increased depreciation and amortization (CZK -0.5bn) primarily due to started depreciation of comprehensively renovated Prunéřov Power Plant

Other income (expenses) (CZK -5.1bn):

• Refund of a portion of gift tax on emission allowances for 2011 and 2012 in 2015 (CZK -3.8bn)
• Negative effect of USD/TRY exchange rate on the financial results of companies in Turkey (CZK -2.1bn)
• Revaluation of MOL share option (CZK -0.9bn) due to increased share price
• Cost of buyback of issued bonds in 2015 (CZK +0.9bn)
• Foreign exchange gains and losses other than the effect of USD/TRY (CZK +0.7bn)

Net income adjustment ***

• Q4 2015 net income adjusted for the negative effect of fixed asset impairments, goodwill write-off, and write-off of abandoned investments (CZK +5.1bn)
• Q4 2016 net income adjusted for the negative effect of fixed asset impairments, goodwill write-off, and write-off of abandoned investments (CZK +2.7bn)** and the negative effect of developed project impairments (CZK +0.3bn)
• * Including profit/loss from sales of tangible and intangible fixed assets
• ** Additions to fixed asset impairments in Turkey (CZK 0.6bn) are reported under Income (Expenses) from Investments and Securities
• *** The definition of Adjusted Net Income was refined in Q4 2016 (see Annex)

EXPECTED YEAR-ON-YEAR CHANGE IN EBITDA MAIN CAUSES BY SEGMENT

E B I T D A 2 0 1 6	5	8. 1			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 Lo f i t o d i ty tra d ing t ive d isp tc h ing d  we r p ro n c om mo ac a a n , ba lan ing d a i l lar ice c an nc y se rv s , H ig he iss ion l low r e xp en se s o n e m a an ce s 
G t i e n e r a o n T d i t i l E r a o n a n e r g y	4 3 5	3. 7 -			De in lec tr ic i ty l iza t ion ice inc l. he dg ing  cre as e e re a p r s f fse t by inc d g t ion t n lea lan ts o re as e en er a a uc r p ow er p H ig he f ixe d e fe d lon ion ty te t r xp en se s o n s a an g- rm o p er a  t n lea fa i l i t ies a uc r c
M i i n n g		0. 4 -			M i i n n g Pr im i ly, inc d fe fo ine d ine ls d de d  ar re as e e r m m ra an cre as e fro l s les rev en ue s m co a a
G t i e n e r a o n N E e n e r g w y			0. 8 +		G i N E t e n e r a o n— e w n e r g y A l loc t ion f 2 0 1 3– 2 0 1 5 c t i f ica tes fo in d fa in  a o er r w rm s Ro ia in 2 0 1 6 ma n
D i t i b t i s r u o n		1. 5 -			A d d i ion im irm fo E W C j in 2 0 1 6 t to ts ts p a en r p ro ec  R E S is i t ion in 2 0 1 6 a d de lop t g ls  ac q u s n ve me n oa D i t i b t i s r o n u Po i ive f fe f u b i l le d e lec ic i lem in Cz h ia t t o tr ty t t t s e c n se en ec 
S l a e s		0. 8 -			in 2 0 1 6 E f fe f c ion fa d h ig he i d r t o t to t te c or re c c rs an r p er m ev en ue s  S l a e s
O t h e r		0. 5 -			Po i t ive f fe t o f u b i l le d e lec tr ic i ty t t lem t in Cz h ia  s e c n se en ec in 2 0 1 6 Ta k ing i f ic ke i ies in lec ic i d t o tu t tr ty p sp ec ma r p p or n e an  u les in 2 0 1 6 ( ia l ly ig i f ica t dr in g as sa es p ec a s n n op ) lec tr ic i ty ice e r s
E B I T D A 2 0 1 7 E	5 2				p Ž Ex d p f S D C de b fro 2 0 1 1 te t o t p ec ay me n m 
4	0 4 5	0 5	5 5	6 0 C Z K bn	O h t e r Š Pr im i ly, la t ing to ko da Pr ha Inv t 's  ar e xp en se s r e a es j ts p ro ec

EXPECTED YEAR-ON-YEAR CHANGE IN NET INCOME MAIN REASONS

C Z K	bn
A d j t d t u s e n e i 2 0 1 6 n c o m e							1 9 6
O t i T p e r a o n s e a m E B I T D A				4 5 -
D l t e v e o p m e n T E B I T D A e a m			1. -	5
D i t i e p r e c a o n, i i d t t a m o r z a o n, a n i t l i d i t t c a p a z e n e r e s		5 -
O h t e r				3 +
A d j d t t u s e n e i 2 0 1 7 E n c o m e				1	2
M O L P t t i l o e n a						4 8 +

Main reasons of y-o-y change:

Operations Team EBITDA

• Lower profit on business activities and ancillary services
• Higher expenses on emission allowances
• Higher fixed expenses on safety at NPPs
• Decrease in electricity realization prices including hedging offset by increased production at NPPs

Development Team EBITDA

• Effect of unbilled electricity settlement in Czechia in 2016 and effect of correction factors (CZK -2.7bn)
• Expected payment of SŽDC debt from 2011
• Acquisition of renewables in 2016 (CZK +0.4bn)

Depreciation, amortization, and capitalized interest

Depreciation and amortization increased by CZK 3bn and interest capitalization decreased by CZK 2bn primarily due to expected completion of new coal-fired unit in Ledvice and due to completion of comprehensive renovation of Prunéřov Power Plant in 2016

Other

• Sale of residential property (CZK +1.4bn)
• MOL option revaluation in 2016 (CZK +1.0bn)
• Negative effect of USD/TRY exchange rate in 2016

Selected prediction opportunities:

• Potential net income of CZK +4.8bn if bondholders of convertible bond exercise their right to redeem the bond by exchange for MOL shares instead of repayment of the bond in cash in 2017
• Potential income from possible sale of coal-fired Po čerady Power Plant

CASH FLOWS IN 2016

Cash Flows from Operating Activities (CZK +49.0bn)

• Income after adjustments (CZK +50.4bn): income before taxes (CZK +19.3bn), depreciation and amortization of nuclear fuel (CZK +32.1bn), fixed asset impairments (CZK +3.1bn), loss from associates and joint ventures (CZK +2.7bn), income tax paid (CZK -6.7bn)
• Changes in assets and liabilities (CZK -1.4bn)

Cash Flows Used in Investing Activities (CZK -34.6bn)

• Investments in property, plant, and equipment—CAPEX (CZK -30.2bn); see details in Annex
• Additions to long-term financial assets (CZK -5.3bn): including purchase of bank bonds (CZK -4.6bn), INVEN CAPITAL's new investments (CZK -0.7bn)
• Proceeds from sales of long-term assets (CZK +1.1bn): primarily sale of Bank of China bonds (CZK +0.7bn)

Cash Flows Provided by Financing Activities (CZK -16.5bn)

Dividends paid (CZK -21.3bn), change in other long-term liabilities (CZK -0.7bn), balance of loans and repayments (CZK +5.5bn)

CEZ GROUP MAINTAINS A STRONG LIQUIDITY POSITION

Undrawn, committedDrawn, committedDrawn, uncommittedAvailable credit facilitiesCZK 21.7bnCZK 2.2bnCZK 6.1bn

Bond Maturity Profile (as at Dec 31, 2016)

• CEZ Group has access to CZK 27.8bn in committed credit facilities, using just CZK 6.1bn as at Dec 31, 2016.

• Committed facilities are kept as a reserve for covering unexpected needs.

• The average maturity of CEZ Group's financial debts exceeds 7 years.

• Net Debt/EBITDA ratio was 2.52 at Dec 31, 2016.
• On November 2, 2016, CEZ Razpredelenie Bulgaria AD signed non-recourse loan agreement for EUR 98m (approx. CZK 2.6bn) with a 7-year repayment period and non-recourse revolving loan of EUR 18m (CZK 0.5bn).

Utilization of Short-Term Lines (as at Dec 31, 2016)

INVESTMENTS IN FIXED ASSETS

Nuclear facilities (incl. nuclear fuel procurement):

• Existing Temelín & Dukovany NPPs—Continued implementation of projects fulfilling requirements from the National Action Plan for Nuclear Safety Enhancement, drawn up after the events at the nuclear power plant at Fukushima, Japan
• New nuclear power plants at Temelín and Dukovany—Preparation of projects at both the Temelín and Dukovany sites continues in accordance with the approved National Action Plan for Nuclear Energy. The projects for the Temelín and Dukovany NNPPs were spun off into subsidiaries, ETE II and EDU II, respectively, on Oct 1, 2016.

BALANCE SHEET OVERVIEW AS AT DEC 31, 2016

Property, plant, and equipment increased by CZK 5.5bn due to

investments (see CAPEX), partially offset by depreciation, amortization, and impairments (see Other Income (Expenses))

Other non-current assets decreased by CZK 9.3bn

• Reclassification of MOL shares as current assets of CZK -9.4bn
• Decrease in the value of investment in joint ventures of CZK -3.9bn
• Decrease in long-term receivables from derivatives of CZK -2.8bn
• Increase in bank bonds of CZK +4.0bn
• Increase in intangible fixed assets of CZK +1.8bn
• Increase in financial assets with limited availability of CZK +1.0bn

Increase in long-term derivative liabilities of CZK +3.8bn

Decrease in accrued connection fees of CZK -0.7bn

Equity decreased by CZK 10.8bn Dividends of CZK -21.3bn

Long-term liabilities increased by CZK 3.2bn

Decrease in bonds issued of CZK -7.3bnDecrease in deferred tax liability of CZK -1.8bn

Other comprehensive income of CZK -4.1bn, increase in net income of CZK +14.6bn

Increase in nuclear provisions of CZK +5.5bn and long-term bank loans of CZK +4.0bn

Current assets increased by CZK 32.0bn

• Increase in receivables from derivatives incl. options of CZK +17.1bn
• Increase in net receivables of CZK +10.3bn
• Increase in available-for-sale securities and short-term deposits of CZK +6.7bn, primarily due to reclassification of MOL shares from other non-current assets
• Decrease in cash and cash equivalents of CZK -2.3bn

Short-term liabilities increased by CZK 35.7bn

• Increase in short-term payables from derivative trading incl. options of CZK +21.5bn
• Increase in short-term bank loans incl. current portion of long-term debt of CZK +13.6bn
• Increase in trade payables including advances of CZK +2.6bn
• Decrease in other liabilities of CZK -1.6bn

ELECTRICITY CONSUMPTION IN THE DISTRIBUTION AREA OF ČEZ DISTRIBUCEGREW YEAR-ON-YEAR

• Analysis based on CEZ Group's internal data.
• CEZ Group's distribution area covers around 5/8 of Czechia's territory, so the data are a good indicator of nationwide consumption trends.
• According to the Energy Regulatory Office's data, measured consumption in Czechia has grown by 1.9% and temperature- and calendar-adjusted consumption has grown by 0.7%.

MARKET DEVELOPMENTS 2015 - 2016

MINING IN 2017 COAL EXTRACTION IS EXPECTED TO GROW BY 8%

Severočeské doly—Coal Extraction (Millions of Tons)

• The increase in coal consumption of 0.4 million tons in 2016 was due to higher demand for thermal coal both among CEZ Group's power plants and heating plants and among customers outside CEZ Group.
• 2017 production is expected to grow by 1.7 million tons due to higher demand for thermal coal among CEZ Group's power plants and heating plants.

Electricity balance (GWh)

	2015	2016	Index 2016/2015
Electricity procured	54,300	54,656	+1%
Generated in-house (gross)	60,917	61,132	+0%
In-house and other consumption, including pumping in
pumped-storage plants	-6,617	-6,476	-2%
Sold to end customers	-37,933	-37,475	-1%
Sold in the wholesale market (net)	-11,557	-12,861	+11%
Sold in the wholesale market	-206,414	-198,709	-4%
Purchased in the wholesale market	194,857	185,848	-5%
Grid losses	-4,810	-4,320	-10%

Electricity generation by source (GWh)

	2015	2016	Index 2016/2015
Nuclear	26,840	24,104	-10%
Coal and lignite	29,090	30,689	+5%
Water	2,214	2,347	+6%
Biomass	791	879	+11%
Photovoltaic	141	132	-6%
Wind	1,295	1,166	-10%
Natural gas	542	1,813	>200%
Bio gas	3	2	-13%
Total	60,917	61,132	+0%

Sales of electricity to end customers (GWh)

	2015	2016	Index 2016/2015
Households	-13,153	-13,723	+4%
Commercial (low voltage)	-5,525	-5,133	-7%
Commercial and industrial (medium and high voltage)	-19,255	-18,619	-3%
Sold to end customers	-37,933	-37,475	-1%
Distribution of electricity to end customers	-49,829	-50,637	+2%

Electricity balance (GWh)

	Ge t ne ra	ion -	Ge ion t ne ra	ne w -
2 0 1 6	d it ion l e tra a	ne rg y	en erg	y	D is i bu tr	ion t	Sa le		E l im ina	ion t s	C Gr E Z	ou p
	G W h	/- +	G W h	/- +	G W h	/- +	G W h	/- +	G W h	/- +	G W h	/- +
ic i E lec tr ty d p ro cu re	5 3, 0 8 3	-	1, 5 7 3	5 % -	0	-	0	-	0	-	5 4, 6 5 6	1 % +
Ge d in- ho ( ) te ne ra us e g ros s	5 9, 5 3 2	-	1, 6 0 0	5 % -	0	-	0	-	0	-	6 1, 1 3 2	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, 4 4 9 -	-	2 7 -	2 6 % +	0	-	0	-	0	-	6, 4 7 6 -	2 % -
So l d to d c to en us me rs	2 4 0 -	-	0	-	0	-	3 8, 6 3 5 -	2 % -	1, 4 0 0	2 8 % -	3 7, 4 7 5 -	1 % -
So l d in he ho les le ke ( ) t t t w a ma r ne	-5 2, 8 4 3	-	5 1, 7 3 -	5 % -	4, 3 2 0	1 0 % -	5 3 8, 6 3	2 % -	1, 4 0 0 -	2 8 % -	1 2, 8 6 1 -	1 1 % +
So l d in he ho les le ke t t w a ma r	2 2 3, 9 2 5 -	-	2, 4 0 5 -	2 % -	0	-	2, 8 6 1 -	1 4 % -	3 0, 4 8 1	6 % -	1 9 8, 0 9 7 -	4 % -
Pu ha d in he ho les le ke t t rc se a ma r w	1 7 1, 0 8 2	-	8 3 2	5 % +	4, 3 2 0	1 0 % -	4 1, 4 9 6	3 % -	3 1, 8 8 1 -	7 % -	1 8 5, 8 4 8	5 % -
Gr i d los se s	0	-	0	-	4, 3 2 0 -	1 0 % -	0	-	0	-	4, 3 2 0 -	1 0 % -

Electricity generation by source (GWh)

	Ge ion t ne ra	-	Ge ion t ne ra	ne w -
2 0 1 6	d it ion l e tra a	ne rg y	en erg	y	D is i bu tr	ion t	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	/- +
Nu lea c r	2 4, 1 0 4	-	0	-	0	-	0	-	0	-	2 4, 1 0 4	1 0 % -
Co l a d l ig ite a n n	3 0, 6 8 9	-	0	-	0	-	0	-	0	-	3 0, 6 8 9	5 % +
W ter a	2, 0 4 6	-	3 0 1	2 4 % +	0	-	0	-	0	-	2, 3 4 7	6 % +
B iom as s	8 7 9	-	0	-	0	-	0	-	0	-	8 7 9	1 1 % +
P ho lta ic tov o	0	-	1 3 2	6 % -	0	-	0	-	0	-	1 3 2	6 % -
W in d	0	-	1, 1 6 6	1 0 % -	0	-	0	-	0	-	1, 1 6 6	1 0 % -
Na l g tur a as	1, 8 1 3	-	0	-	0	-	0	-	0	-	1, 8 1 3	2 0 0 % >
B io g as	0	-	2	1 3 % -	0	-	0	-	0	-	2	1 3 % -
To l ta	5 9, 5 3 2	-	1, 6 0 0	5 % -	0	-	0	-	0	-	6 1, 1 3 2	0 % +

Sales of electricity to end customers (GWh)

	Ge t ne ra	ion -	Ge ion t ne ra	ne w -
2 0 1 6	tra d it ion l e a ne rg y		en erg y		D is tr i bu t ion		Sa le		E l im ina t	ion s		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, 2 3 7 -	4 % +	0	-	1 3, 2 3 7 -	4 % +
Co ia l ( low lta ) mm erc vo g e	-1	-	0	-	0	-	5, 1 3 2 -	7 % -	0	-	5, 1 3 3 -	7 % -
Co ( ) ia l a d in du ia l d ium d h ig h v lta tr mm erc n s me an o g e	-2 3 9	-	0	-	0	-	1 9, 7 8 0 -	6 % -	1, 4 0 0	2 8 % -	1 8, 6 1 9 -	3 % -
So l d d c to to en us me rs	2 4 0 -	-	0	-	0	-	5 3 8, 6 3 -	2 % -	1, 4 0 0	2 8 % -	5 3 7, 4 7 -	1 % -
D is i bu ion f e lec ic i d c tr t tr ty to to o en us me rs	0	-	0	-	5 0, 6 3 7 -	2 % +	0	-	0	-	5 0, 6 3 7 -	2 % +

Electricity balance (GWh)

20 16	Cz ech	ia	Po lan	d	Ro ma	nia	Bu lga	ria	Ot he	rs	Elim ina	tio ns	CE Z G	rou p
	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/ -
Ele icit d ctr y p roc ure	50 82 3 ,	+1 %	2, 59 6	-1%	1, 23 1	-7%	6	-2%	0	-	0	-	54 65 6 ,	+1 %
Ge ed in- ho (g s) rat ne use ros	56 944 ,	+1 %	2, 93 1	-0%	1, 25 1	-6%	6	-2%	0	-	0	-	61 132 ,	+0 %
In- ho d o the tio inc lud ing ing use an r co nsu mp n, pu mp
in p d-s lan tor ts um pe ag e p	-6, 120	-3%	-33 5	+4 %	-21	+3 7%	0	-	0	-	0	-	-6, 47 6	-2%
So ld d c to tom en us ers	-19 60 0 ,	-1%	-1, 92 9	+2 0%	-3, 36 9	-3%	-9, 71 3	+0 %	-2, 86 4	-14 %	0	-	-37 47 5 ,	-1%
So ld in the ho les ale ark (ne t) et w m	-29 115 ,	+4 %	-66 7	-34 %	3, 137	-1%	10 92 0 ,	+0 %	2, 86 4	-14 %	0	-	-12 86 1 ,	+1 1%
So ld i he wh ole sal ark n t et e m	-20 1, 20 7	-4%	-2, 89 5	-2%	-1, 96 0	+0 %	-52 4	+3 2%	-20 7	-33 %	8, 08 4	-6%	-19 8, 70 9	-4%
Pu rch d in th ho les ale ark et ase e w m	17 2, 09 1	-5%	2, 22 8	+1 4%	5, 09 7	-1%	11 44 4 ,	+1 %	3, 07 1	-16 %	-8, 08 4	-6%	18 5, 84 8	-5%
Gr id los se s	-2, 108	-18 %	0	-	-99 9	-2%	-1, 21 3	-1%	0	-	0	-	-4, 32 0	-10 %

Electricity generation by source (GWh)

20 16	Cz ech	ia	Po lan	d	Ro ma	nia	Bu lga	ria	Ot he rs		Elim ina tio	ns	CE Z G	rou p
	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/ -
Nu cle ar	24 104 ,	-10 %	0	-	0	-	0	-	0	-	0	-	24 104 ,	-10 %
Co al a nd lign ite	28 149 ,	+6 %	2, 54 0	+1 %	0	-	0	-	0	-	0	-	30 68 9 ,	+5 %
Wa ter	2, 24 3	+4 %	11	% +7	92	+8 4%	0	-	0	-	0	-	2, 34 7	+6 %
Bio ma ss	50 0	+3 5%	37 9	-10 %	0	-	0	-	0	-	0	-	87 9	+1 1%
Ph ltai oto vo c	12 6	-7%	0	-	0	-	6	-2%	0	-	0	-	13 2	-6%
Wi nd	6	-28 %	0	-	1, 159	-10 %	0	-	0	-	0	-	1, 166	-10 %
Na al g tur as		-	0	-	0	-	0	-	0	-	0	-	1, 81 3	>2 00 %
Bio ga s	2	-13 %	0	-	0	-	0	-	0	-	0	-	2	-13 %
To tal	55 130 ,	-3%	2, 93 1	-0%	1, 25 1	-6%	6	-2%	0	-	0	-	61 132 ,	+0 %

Sales of electricity to end customers (GWh)

20 16	Cz ech	ia	Po lan	d	Ro ma	nia	Bu lga	ria	Oth ers		Eli min atio	ns	CE Z G	rou p
	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/-	GW h	+/ -
Ho ho lds use	-7, 60 7	+7 %	0	-	-1, 70 4	+4 %	-4, 27 7	-0%	-13 6	+2 %	0	-	-13 72 3 ,	+4 %
Co ial ( low ltag e) mm erc vo	-2, 40 8	+1 %	0	-	-85 0	-4%	-1, 76 1	-19 %	-11 4	+2 2%	0	-	-5, 133	-7%
Co ial d in du ial (m ed ium d h ig h v olta ) str mm erc an an ge	-9, 58 5	-7%	-1, 92 9	+2 0%	-81 5	-13 %	-3, 67 6	+1 4%	-2, 61 5	-16 %	0	-	-18 61 9 ,	-3%
So ld d c to tom en us ers	-19 60 0 ,	-1%	-1, 92 9	+2 0%	-3, 36 9	-3%	-9, 71 3	+0 %	-2, 86 4	-14 %	0	-	-37 47 5 ,	-1%
Dis trib uti of el tric ity d c to tom on ec en us ers	-34 95 0 ,	+2 %	0	-	-6, 38 1	-1%	-9, 30 6	+0 %	0	-	0	-	-50 63 7 ,	+2 %

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 report 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
Net debt	Purpose: The indicator shows the real level of a company's financial debt, i.e. the nominal amount of debt net of cash, cash equivalents, and highly liquid financial assets held by the company. The indicator is primarily used to assess the overall appropriateness of the company's debt, for example, in comparison with selected corporate profit or balance sheet indicators.
	Definition: Long-Term Debt, Net of Current Portion + Current Portion of Long-Term Debt + Short-Term Loans − (Cash and Cash Equivalents + Highly Liquid Financial Assets).
Adjusted Net Income (After-Tax Income, Adjusted)	Purpose: This is a supporting indicator, intended primarily for investors, creditors, and shareholders, that 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.
	Definition change from the last published version of November 8, 2016 (included in Q1–Q3 2016 results): adjustment for profit/loss from sale of subsidiaries was removed from the definition because of CEZ Group's development strategy.
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).
EBITDA (EBIT Before Depreciation and Amortization, Impairments, and Asset Sales)	Purpose: This is an important economic indicator showing a business's operating efficiency comparable to other companies, as it is unrelated to the company's depreciation and amortization policy and capital structure or tax treatment. It is one of the fundamental indicators used by companies to set their key financial and strategic objectives.
	Definition: Earnings Before Taxes and Other Expenses and

Indicator
	Revenues + Depreciation and Amortization +/− Impairments of Property, Plant, and Equipment and Intangible Assets Including Goodwill (including Write-Off of Canceled Investments) + Sales of Property, Plant, and Equipment and Intangible Assets.
Net debt / EBITDA	Purpose: This indicates a company's capability to decrease and pay back its debt as well as its ability to take on additional debt to grow its business. CEZ Group uses this indicator primarily to assess the adequacy of its capital structure to the structure and stability of its expected cash flows.
	Definition: Net Debt / EBITDA. The value for the past 12 months is used for EBITDA; the amount at the end of the period, i.e. at December 31 of the period in question, is used for Net Debt.

Most of the components used in the calculation of individual indicators 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:

	As at Dec 31,	As at Dec 31,
	2015	2016
Short-term equity securities available for sale	946	0
Short-term debt securities available for sale	0	7
Short-term debt securities held to maturity	3,852	2,945
Short-term deposits	7,315	2,040
Long-term deposits	0	500
Long-term debt securities available for sale	676	4,646
Highly liquid financial assets, total	12,789	10,138

Net Debt indicator—Highly Liquid Financial Assets item (CZK millions):

Adjusted Net Income indicator—individual components:

Adjusted Net Income (After-Tax Income, Adjusted) Unit		2015	2016
Net income	CZK millions	20,547	14,575
Impairments of property, plant, and equipment and intangible assets including goodwill	CZK millions	7,685	3,114
Impairments of developed projects*)	CZK millions	9	671
Impairments of property, plant, and equipment and intangible assets including goodwill at associates and joint ventures**)	CZK millions	0	1,312
Effects of the additions to or reversals of impairments on income tax***)	CZK millions	-576	-32
Other extraordinary effects	CZK millions	0	0
Adjusted net income	CZK millions	27,666	19,640

*) 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 joint ventures in the Consolidated Statement of Income

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