Ignitis Grupe — Investor Presentation 2020

Jun 19, 2020

Creating an ENERGY SMART world

Corporate Strategy 2020

ENSURING

resilience and flexibility of the energy system

ENABLING

energy transition and evolution

CREATING A SUSTAINABLE FUTURE

No coal. No nuclear. Becoming CO² neutral. ESG principles driven

CAPTURING GROWTH OPPORTUNITIES

and developing innovative solutions to make life easier and more energy smart

GROWING

commitments

RENEWABLES

to meet regional energy

In our vision, we transform for a more sustainable world

transition towards a decarbonized world

business models by developing and scaling smart solutions

and exploring new opportunities in the markets undergoing energy transition

Strong commitment to a more sustainable future

Environmental, social and governance criteria are an integral part of our business goals

We align our business goals with the United Nations' Sustainable Development Goals

Our primary focus is on five SDGs where Ignitis' impact is most significant. We also contribute to the achievement of almost all SDGs.

We are committed to reduce net carbon dioxide (CO² ) emissions to zero by 2050

Our geographic focus

We focus on home markets - the Baltic countries, Poland and Finland

We also explore new opportunities in countries on the energy transition path

In everything we do, we are united by the mission to make the world more ENERGY SMART

Networks

Resilient and efficient energy distribution enabling the energy transition

Green Generation

Focused, sustainable and profitable growth

Flexible Generation

Reliable and flexible power system

Customers & Solutions

Innovative solutions for easier life and energy evolution

Business segments

7

EnergySmart

Networks

Resilient and efficient energy distribution enabling the energy transition

We continuously invest country -wide to modernize our strategic assets used for electricity and natural gas distribution to ensure network resilience and efficiency for our business and residential customers

develop a smart grid which would be one of the most advanced in the region

We enable energy innovations, renewable energy transition and facilitate the local energy market and its efficiency through data -driven network solutions We digitise our distribution network and strive to

Green Generation

Focused, sustainable and profitable growth

We target to reach 4 GW of installed green generation capacity by 2030 while ensuring that the build-out creates value for our shareholders

Our operational 0.9 GW hydro-pumped storage plant with additional capacity expansion possibilities is fundamental for enabling future renewable energy growth in the region

Green Generation

Focused, sustainable and profitable growth

We aim to partner with strategic investors to adopt new technologies and with financial investors to maximize our returns by utilizing asset rotation

We are pursuing onshore and offshore wind, waste-to-energy, biomass and solar technologies across the project lifecycle

Prudent investment framework with conservative hurdle rates

Flexible Generation

Reliable and flexible power system

We invest to ensure flexibility and high reliability of the Lithuanian energy system by providing reserve and ancillary services

We are phasing out/decommissioning old conventional energy generation capacities

We aim to contribute to the synchronization with the continental European network by providing new balancing services

We develop additional flexible generation capacities provided they are required to balance renewable energy growth and secure required level of adequacy in the Lithuanian energy system

Customers & Solutions

Innovative solutions for easier life and energy evolution

We scale our core energy supply and trading business complementing it with innovative, value-added energy solutions

We innovate together with our partners to help our customers become more energy smart and contribute to their environmental goals

We enable industrial scale renewable energy expansion by helping to secure long-term offtake contracts and capitalizing on our competences in balancing services

Aligned with the targets of the National Energy Independence Strategy

Development of wind energy, including offshore in the Baltic sea

Investing in smart technologies and digitisation of Lithuanian energy sector

Smart electricity metering

Ensuring sufficient balancing capacities, including potential extension of Kruonis Hydro -Pumped Storage Plant

Synchronisation with the energy system of the continental Europe

Share of local electricity generation in Lithuania

70% by 2030 100% by 2050

Share of local energy generated from clean (low carbon) resources

80% by 2050

Renewables share in total energy consumption

45% by 2030 80% by 2050

Renewables share in total electricity consumption 45% by 2030 100% by 2050

Renewables share in centralized heat supply sector

90% by 2030 100% by 2050

People and Organisation

EnergySmart

Our values

RESPONSIBILITY PARTNERSHIPS

Care. Do. For Earth. Starting with myself

Diverse. Strong. Together

OPENNESS GROWTH

See. Understand. Share. Open to the world

Curious. Bold. Everyday

Our people and culture

We are driven by the purpose of creating an energy smart future, making it

PEOPLE Engaged

We focus on the experience and personal growth of our people

Diversity in skills and competences gives us unique perspective to ensure the security of the national energy system and at the same time to be dedicated to our customers and passionate about innovation

TEAMS Agile

We empower our teams for speed, flexibility and innovation

We foster different models of collaboration to create an energy smart world

LEARNING Everywhere, always and fast

We transform and use different approaches for developing core and new energy competencies

Our training system enables a constantly growing organization and personal development

Our organization

STRONG GOVERNANCE MODEL

Transparent and effective

We apply the globally-recognized corporate governance practices

We adopt the most effective group operating models to create competitive advantages and achieve synergies within our business segments

SMART WAY OF DOING THINGS Digital

We incorporate digitisation in all areas of our activity as a key booster for efficiency improvements, motivation and value creation

Operational excellence is a part of our everyday activities

Focus on financial discipline

Financial guidelines

Target returns

We target high single-digit – low doubledigit levered equity returns depending on the risk profile of the projects

Capital structure Dividends

Solid investment-grade rating: BBB and above

Net Debt to EBITDA < 5x

We aim to deliver dividends to our shareholders in line with our growth

#EnergySmart