Enefit Green

Investor Presentation • Aug 3, 2023

ENEFIT GREEN Q2 2023

Interim results presentation

Enefit Greeni III kvartali 2022 vahearuanne

Results are presented by:

Aavo Kärmas CEO

Electricity prices on core markets 2X lower

Drivers:

• Over 2X lower natural gas prices
• Commissioning of Olkiluto-3 nuclear reactor
• Strong hydro power supply

Regulatory developments

The European Council continued the debate on electricity market reform, which will have a significant impact on the business environment

• In April, the European Council decided to change the policy on CO² emission allowances and to set a new EU-wide emissions reduction target. The decision will encourage investment in new renewable power plants
• Parliamentary elections were held in March 2023. Government's Action Programme (2023–2027) has number of targets that will affect the business environment for renewable electricity generation: to make Estonia a country that exports electricity, organize reverse auctions with price ceilings and floors, purchase renewable electricity for the buildings under its management Riigi Kinnisvara AS, offer an opportunity for households and apartment associations producing up to 30 kW to connect to the grid at a fixed price

The new government's EU policy priorities until 2025: create a single price area in the Baltic electricity market in order to increase the market for renewable electricity, build the third electricity transmission cable, Estlink 3, between Estonia and Finland by the early 2030s

In June, the government established a procedure for granting permits for the construction of wind farms on state and municipally-owned land, which gives a one-off right to submit a reasoned construction permit application for up to 10% of the total area the state forest management company

In June, the electricity market regulator VERT changed the principles of the price ceiling for electricity producers and extended the price ceiling retroactively from 1 December 2022 to the production of power plants under construction

The rule according to which the minimum distance between a wind turbine and a residential building must be at least ten times the height of the wind turbine was lifted. The new restriction zone for new wind turbines is 700 metres

Government decided to maintain the temporary price cap imposed by the EU on renewable electricity producers until the end of the year

Weakest wind conditions in recent years

Average recorded wind speed in Enefit Green wind farms, m/s

2021 2022 2023

2021 2022 2023

Above average availability in most segments

Q1 Q2 Q3 Q4

2021 2022 2023

Path towards 4X growth: 62MW added to operating portfolio during Q2

Operating Under construction

** COD – Commercial Operating Date

*** On 2May 2023 there was an incident in Akmene wind farm resulting in a destruction of a wind turbine under construction.

NB! Development projects are in continuous change.

The presented information is management team's best assessment of the current status of the near-term development portfolio as of 31 July 2023

519MW 519MW 608MW 608MW ~489MW ~489MW up to ~4200MW up to ~2100MW up to ~1000MW up to ~1100MW Operating + under constr. + NT dev portfolio Long term dev portfollio* Liivi offshore wind farm (2025+) Loode-Eesti offshore wind farm** (2029+) Future potential projected capacity long term dev portfolio up to ~1,791MW up to ~6,000MW operating under construction near term dev portfolio Complete view of the development portfolio

NB! Development projects are in continuous change.

• * Various onshore wind and solar farm developments that are not expected to get final investment decision before 2025.
• ** Also known as Hiiumaa offshore wind farm

Q2 2023 Key highlights

+62 MW (new operating capacity Purtse & Zambrow)

+56 GWh

(production from new wind and solar farms under construction)

* (electricity sales revenue + renewable energy support and efficient cogeneration support + revenues from sale of guarantees of origin - day-ahead and intraday purchases on Nord Pool - balancing energy purchases) / production

Summary of Q2 electricity prices

• Implied captured price
• Price of electricity sold to the market Realised purchase price Core markets average PPA (until Q4 22 incl FiT) sale price

Electricity prices €/MWh	Q2 2022	Q2 2023
Core markets average*	151.3	78.7
Price of electricity sold to the market	127.6	63.7
PPA (until Q4 22 incl FiT) sale price	79.1	83.5
Realised purchase price	175.1	83.8
Implied captured price**	126.8	89.9

* Production weighted average market price on group's core markets

** (electricity sales revenue + renewable energy support and efficient cogeneration support + revenues from sale of guarantees of origin - day-ahead and intraday purchases on Nord Pool - balancing energy purchases) / production

Electricity produced, purchased and sold (GWh)

Implied captured price -29%

• Core markets average price -48%
• Increased electricity purchase volume (5.4 times)
• Realised purchase price -52%
• PPA/FiT average price +6%

Operating income impacted by low electricity prices

Operating income by segment, €m

Operating income €41.2m -13%
Wind Electricity production -9% Implied captured price* of the segment was 86.9 €/MWh (-26%)
CHP Higher pellet sales volumes and higher sales price Implied captured price* 104.6 €/MWh (-40%)
Solar Electricity production +126% due to new solar farms Exit from "turn-key" solar services business
* (electricity sales revenue + renewable energy support and efficient cogeneration support + revenues from sale of guarantees of origin - day-ahead and intraday purchases on Nord Pool - balancing energy purchases) / production

EBITDA decreased due to lower electricity prices

30.7 19.3 (12.1) +6.5 (6.8) +1.9 +0.6 +0.2 (1.6) (0.2) EBITDA Q2 2022 Sold electricity price impact Sold electricity quantity impact Purchased electricity quantity impact Purchased electricity price impact Cogeneration (excl. Volume and price of electricity) Decrease in nonderivative contract liability Fixed cost Other EBITDA Q2 2023 EBITDA -11.5 (-37.2%) Impacted by electricity production

Group's EBITDA change by drivers, €m

EBITDA €19.3m -37%

Electricity price net impact -€10.2m

Higher PPA price did not compensate the impact of the decline in market prices

Sold / purchased quantities net impact -€0.3m

Low and variable production increased both electricity purchase and sale quantities

Impact of fixed expenses -€1.6m

Mainly increased labor and research/consultation costs

Other cogeneration segment result +€0.6m:

Higher sales of pellets and profitability

Wind energy segment: lower electricity prices, lower production and power purchase costs had negative impact on profitability

EBITDA €11.8m -42%

• Higher production volumes in Lithuania due to the addition of new wind farms
• Older wind farms production low (incl Estonia) due to wind conditions
• Lower implied captured electricity price*
• Power purchase costs

* (electricity sales revenue + renewable energy support and efficient cogeneration support + revenues from sale of guarantees of origin - day-ahead and intraday purchases on Nord Pool - balancing energy purchases) / production ** (Total operating expenses - power and balancing energy purchase - D&A) / operating capacity. Only operating wind assets are included: Enefit Wind OÜ and Enefit Wind UAB

Cogeneration segment: lower electricity price decreased profitability

Implied captured electricity price driven by market prices

* (electricity sales revenue + renewable energy support and efficient cogeneration support + revenues from sale of guarantees of origin - day-ahead and intraday purchases on Nord Pool - balancing energy purchases) / production

Solar segment: production from new solar farms improved profitability despite lower electricity prices

Solar services revenues Operating farms' revenues

EBITDA €1.9m

• 126% higher production due to new solar farms
• Lower implied captured electricity price*

* (electricity sales revenue + renewable energy support and efficient cogeneration support + revenues from sale of guarantees of origin - day-ahead and intraday purchases on Nord Pool - balancing energy purchases) / production

Q2 2023 net profit impacted by lower electricity prices and income tax related to dividend payout Net profit €1.1m

Return on invested capital and return on equity, %

Net finance income Increased by €0.3m due to higher interest income Interest expense increase of €1.8m, but neutral impact on profit due to 100% capitalization rate) Corporate income tax expenses Increased by €4.7m due to dividend payout Net profit Low electricity market prices Increased power purchased costs -93% Returns Return on invested capital declined due to lower EBIT Return on equity declined due to lower net profit Return on equity 12.9%

Return on invested capital = LTM operating profit / (net debt + equity) Return on equity = LTM net profit / equity

€74.6m of investments in Q2 2023

Liquidity development Q2 2023, €m

Q2 2022 Q2 2023 Wind CHP Solar Other

Base investments Development investments

Investments €74.6m +82%

Operating cash flow

Lower support than previously to continuing investments due to lower electricity prices

Investments

• Q2 2023 investments in the amount of
  • €74.6m, primarily into wind developments:
    • Tolpanvaara €31.7m
    • Sopi-Tootsi €13.9m
    • Vändra solar farm €9.4m
    • Akmene €2.4m

Leverage is rising ahead of completion of new capacities

Loans repayment schedule, €m

Overview of power portfolio hedging

4 052

4 217

production assets (operating, under construction and planned) and their coverage with PPAs and renewable support measures, GWh

Operating Under construction Investment decision not made PPA FiT/CfD FiP Floor*

* Price floor – state support in a form of a price floor received from reverse auction at price level of 34.9 €/MWh (maximum 20 €/MWh) with a duration of 12 years

Forecasted production volumes of Power Purchase Agreements

2023-2027

• 6,901 GWh of PPAs signed (55% of expected production)
• Average locked price 69.4 EUR/MWh

2028+

• Longest PPA contracts span to 2033
• Production after 2027 fixed with PPAs in the amount of 3,677 GWh with average price of 78.1 EUR/MWh

Q2 2023 Summary

Electricity prices have normalized – 2X lower than in extraordinary last year

• Weak wind conditions
• Final investment decision on 74MW Sopi solar farm
• Completion of Purtse hybrid farm
• Completion of Zambrow solar farm
• Construction of 5 wind and 3 solar farms continues

Added new operating renewable capacity during the quarter

+62 MW

+14% compared to existing operating capacity (457MW -> 519MW)

Total renewable capacity under construction

608 MW

+117% additional capacity when completed

Aavo Kärmas, CEO Veiko Räim, CFO

Appendix

Condensed consolidated interim financial statements Q2 2023

Condensed consolidated interim income statement

€ thousand	Note	Q2 2023	Q2 2022	H1 2023	H1 2022
Revenue	9	36,556	41,505	105,341	99,646
Renewable energy support and other operating income	10	4,610	5,773	13,329	14,352
Change in inventories of finished goods and work in progress		4,892	4,646	(168)	2,579
Raw materials, consumables and services used	11	(20,583)	(16,365)	(45,375)	(30,499)
Payroll expenses		(2,905)	(2,169)	(5,391)	(4,612)
Depreciation, amortisation and impairment		(9,707)	(9,644)	(19,522)	(19,292)
Other operating expenses		(3,274)	(2,645)	(7,329)	(5,150)
OPERATING PROFIT		9,589	21,101	40,885	57,025
Finance income		1,191	1,117	1,598	1,525
Finance costs		(402)	(626)	(782)	(1,188)
Net finance income		789	491	816	337
Profit (loss) from associates under the equity method		22	(76)	41	(72)
PROFIT BEFORE TAX		10,400	21,516	41,742	57,290
Income tax expense		(9,260)	(4,592)	(10,080)	(5,441)
PROFIT FOR THE PERIOD		1,140	16,924	31,662	51,849
Basic and diluted earnings per share
Weighted average number of shares, thousand	6	264,276	264,276	264,276	264,276
Basic earnings per share, €	6	0.004	0.06	0.12	0.20
Diluted earnings per share, €	6	0.004	0.06	0.12	0.20

Condensed consolidated statement of other comprehensive income

€ thousand	Note	Q2 2023	Q2 2022
PROFIT FOR THE PERIOD		1,140	16,924
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Remeasurement of hedging instruments in cash flow hedges (incl. reclassifications to profit or loss)	5, 7	1,228	5,586
Exchange differences on the translation of foreign operations	7	436	(106)
Other comprehensive income for the period		1,664	5,480
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD		2,804	22,404

Condensed consolidated interim statement of financial position

€ thousand	Note	30 Jun 2023	31 Dec 2022
ASSETS
Non-current assets
Property, plant and equipment	4	899,039	776,870
Intangible assets		60,304	60,382
Right-of-use assets		4,510	4,239
Prepayments for non-current assets	4	45,462	19,412
Deferred tax assets		1,751	1,321
Investments in associates		547	506
Derivative financial instruments	5, 7	8,866	11,277
Non-current receivables		40	40
Total non-current assets		1,020,519	874,047
Current assets
Inventories		14,265	14,227
Trade and other receivables and prepayments		37,304	41,091
Cash and cash equivalents		52,996	131,456
Derivative financial instruments	5	4,887	3,349
Total current assets		109,452	190,123
Total assets		1,129,971	1,064,170

€ thousand	Note	30 Jun 2023	31 Dec 2022
EQUITY
Equity and reserves attributable to shareholders of the parent
Share capital		264,276	264,276
Share premium	6	60,351	60,351
Statutory capital reserve		5,555	3,259
Other reserves	5, 7	166,959	166,419
Foreign currency translation reserve	7	(361)	(762)
Retained earnings		199,586	225,190
Total equity		696,366	718,733
LIABILITIES
Non-current liabilities
Borrowings	8	283,032	255,755
Government grants		6,879	7,115
Non-derivative contract liability	5, 7	18,086	18,086
Deferred tax liabilities		12,482	12,326
Other non-current liabilities		3,000	3,000
Provisions		9	9
Total non-current liabilities		323,488	296,291
Current liabilities
Borrowings	8	75,818	23,808
Trade and other payables		31,698	20,215
Provisions		2	2
Non-derivative contract liability	5	2,599	5,121
Total current liabilities		110,117	49,146
Total liabilities		433,605	345,437
Total equity and liabilities		1,129,971	1,064,170

Condensed consolidated interim statement of cash flows

€ thousand	Note	Q2 2023	Q2 2022	H1
Cash flows from operating activities
Cash generated from operations	12	14,006	22,898	58,343
Interest and loan fees paid		(2,084)	(495)	(4,137)
Interest received		207	3	518
Income tax paid		(631)	(1,001)	(1,205)
Net cash generated from operating activities		11,498	21,405	53,519
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets	4	(69,907)	(34,739)	(149,480)
Acquisition of a subsidiary*		0	0	(6,174)
Proceeds from sale of property, plant and equipment		0	0	0
Proceeds from sale of a business		0	718	0
Net cash used in investing activities		(69,907)	(34,021)	(155,654)
Cash flows from financing activities
Proceeds from bank loans	8	90,000	40,000	90,000
Repayments of bank loans	8	(4,040)	(5,027)	(11,177)
Repayments of lease principal	8	(95)	(47)	(179)
Dividends paid		(54,969)	(39,906)	(54,969)
Net cash generated from (used in) financing activities		30,896	(4,980)	23,675
Net cash flow		(27,513)	(17,596)	(78,460)
Cash and cash equivalents at the beginning of the period		80,509	108,441	131,456
Cash and cash equivalents at the end of the period		52,996	90,845	52,996
Change in cash and cash equivalents		(27,513)	(17,596)	(78,460)