Litgrid AB — Investor Presentation 2011

Jan 11, 2011

ELECTRICITY TRANSMISSION SYSTEM OPERATOR

LITGRID Turtas AB

INTRODUCTION TO INVESTORS

VILNIUS, JANUARY 10, 2011

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COMPANY OVERVIEW

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Litgrid group

• Registered on November 16, 2010, after spin-off from Lietuvos Energija AB

• Manages electricity transmission system assets and its belongings

• Performs functions of electricity transmission operator

• In Q1 2011 will be merged with Litgrid Turtas AB

• Performs market operator activity

The spin-off has been performed following the EU Third Energy Package requirements to separate electricity generation and transmission activities

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Mission and goals

• Mission – to ensure reliable electricity transmission and create conditions for competition in the open electricity market

• Goals – to ensure system control efficiency in a most appropriate manner meeting interests of consumers and shareholders:

• Maintaining company profitability
• Reducing operational expenditure (Opex)
• Not increasing electricity transmission tariff

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Activities

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Electricity system

• market operator (Baltpool)

= LITGRID

LITGRID

ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Electricity market

LITGRID

ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Electricity consumption tendencies

Electricity demand will grow despite increasing efficiency of consumption

TWh

Electricity consumption

Key factors

Growth

• High: 37 TWh
• Medium: (3–2.3 %): 31 TWh
• Low: 10 TWh

Forecast

30–40 % (to achieve EU 15

intensiveness and

EU27 energy

efficiency

targets)

• Electro-mobiles
• Growth in electricity demand

of buildings

and industry

Demand interval

Electricity generation

Generation

in 2050

By 2050 end-consumption share will grow from 15 per cent in 2009 to approx. 50 per cent

Source: National energy strategy (draft), 2010.

LITGRID

ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Strategic development projects

• Local grid development projects
• To reinforce local grid;

• To prepare for integration with ECN

• International strategic projects

• To integrate Lithuanian transmission system into European continental networks;
• To achieve national energy independence goals

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Electricity transmission system of Lithuania

North-East Europe

NordBalt project
- Stage: manufacturing
- Completion: 2015
- Capacity: 700 MW
- Value: EUR 552 m

Latin America

LitPol Link project
- Stage: planning
- Completion: 2015-2020
- Capacity: 500 MW + 500 MW
- Value: EUR 237 m

International

Internal grid
- Length of lines: 6 669 km
- Transformers: 26
- Substations: 230
- Capacity of transformers: 3 843 MVA
- Transmitted during 11 months in 2010: 9.6 TWh

LITGRID
ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Overview of balance sheets

2010.11.30, LTL million	Actual balance sheet	Spin-off balance sheet
	Lietuvos Energija AB	Lietuvos Energija AB	LITGRID Turtas AB
Intangible assets	0.4	0.0	0.4
Tangible non-current assets	2,645.2	590.1	2,055.1
Other non-current assets	827.7	789.7	38.0
Non-current assets	3,473.3	1,379.9	2,093.5
Inventories	2.3	0.6	1.6
Other current assets	103.5	103.5	0.0
Cash	126.7	83.9	42.8
Current assets	232.4	188.0	44.4
Non-current assets for sale	1.5	1.5	0.0
ASSETS	3,707.3	1,569.4	2,137.9
Share capital	993.6	489.3	504.3
Share premium	325.4	295.8	29.6
Reserves	311.4	-35.8	347.2
Retained earnings	1,679.5	692.1	987.4
Equity	3,309.9	1,441.3	1,868.6
Deferred income tax liabilities	217.5	22.2	195.4
Other non-current liabilities	92.3	33.9	58.4
Non-current liabilities	309.8	56.1	253.7
Trade payables	60.5	60.5	0.0
Other non-current liabilities	27.1	11.5	15.6
Non-current liabilities	87.6	72.0	15.6
EQUITY AND LIABILITIES	3,707.3	1,569.4	2,137.9

• LITGRID took over assets, comprising transmission grid
• Lietuvos Energija retained electricity generation capacities

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Average electricity price LTC/kWh

Source: National Control Commission for Prices and Energy

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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INFORMATION FOR SHAREHOLDERS

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Why are we at the stock exchange?

• Lietuvos Energija, from which activity and assets were spun-off, establishing Litgrid Turtas AB, is a listed company
• After spin-off of assets and activity, shareholders proportionally received shares of both companies
• Possibility to consider attracting funds to finance strategic projects through stock exchange

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Shares of utility companies

Guaranteed and inevitable need of utility services

Long-term and stable investment: fluctuation of utility company shares is lower than average in the market: 0.5 beta

Source: http://pages.stern.nyu.edu/~adamodar/

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR

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Information about issuer

• Litgrid Turtas AB was included into the secondary trade list of NASDAQ OMX Vilnius on December 22, 2010
• ISIN code LT0000128415
• Abbreviation LGD1L
• Issue volume - 504 331 380 shares, nominal value of 1 share - 1 litas
• Share price today – €0,713/LTL2,46

LITGRID ELECTRICITY TRANSMISSION SYSTEM OPERATOR