REN-Redes Energeticas Nacionais

Earnings Release • Jul 28, 2022

Results Presentation REN 1H22

28th July 2022

AGENDA

1. Overview of the period

1. Overview of the period

KEY MESSAGES 1H22

EBITDA increased 4.6% YoY to €238.4M, partly due to the Domestic EBITDA performance (+€6.8M) which reflects higher assets and opex remuneration (+€9.3M), partly offset by higher core opex (+€2.3M), due to higher electricity costs (+€5.3M).

Positive contribution from international business, which EBITDA increased +€3.7M, with Transemel representing +€1.8M.

Net Profit grew to €45.9M (an increase of 16.0% versus 1H21), mostly due to increase in EBIT (+€6.5M) and better Financial Results (+€3.0M), partially offset by higher taxes (+€2.2M) and heavier levy (+€0.9M), following the increase in RAB.

Capex decreased €0.6M to €78.8M, remaining in line with 1H21 (€79.3M). Transfers to RAB increased €5.2M to €22.0M vs 1H21, mostly attributed to the electricity transmission business (which grew €4.7M), partially offset by the decrease in Natural Gas transmission (-€1.0M).

Renewable energy sources (RES) amounted to 47.5% of total supply (approx.-20.9pp than in 1H21), due to lower availability of renewable energy, as a result of current environment conditions. Electricity consumption increased 2.9% whilst natural gas fell by 1.2%.

Quality of Service remains our priority, as highlighted by the lower level of energy transmission losses in electricity, the higher combined availability rate for both electricity and gas and better response time in emergency situations in Natural Gas Distribution.

SECTOR OVERVIEW

Commitment to hydrogen infrastructure and energy transition

Hydrogen Readiness

Decree-Law n.º 30-A/2022 (Renewables and Hydrogen) +

Decree-Law n.º 33/2022 & Directive n.º 13-A/2022 (exceptional adjustment of electricity production costs)

Relevant national gas infrastructures must become hydrogen ready according to the Portuguese law, to allow H² and natural gas blends up 5% in 2025 and 10-15% in 2030. Considering this REN intends to award the main infrastructure adequacy studies (transmission, distribution and underground storage) until September 2022.

Publication of Decree-Law n.º 30-A/2022, approves exceptional measures aimed at ensuring the simplification of procedures for producing energy from renewable sources in Portugal. This new Decree-Law proposes to increase the production of biomethane and renewable hydrogen, the deployment of solar and wind energy, the deployment of innovative solutions based on hydrogen and electricity from renewable sources at competitive costs in industrial sectors, as well as the simplification and reduction of the deadlines of the permitting procedures, which is a precondition for the acceleration of renewable energy projects.

The Portuguese and Spanish Governments created a temporary adjustment mechanism for electricity production costs with impact on the final MIBEL electricity prices. This is an exceptional and temporary mechanism for MIBEL prices, by setting a reference price of natural gas for electricity production, in order to reduce the final electricity prices. This mechanism entered in force on 15th of June 22.

PDIRD 2022

Gas Development Plan 2023-2027

ERSE submitted for public consultation the proposals for a five-year plan for the development and investment of gas distribution networks on period 2023-2027 (PDIRD 2022), prepared by the DSOs. The total amount to be implemented over the five-year horizon reaches €468.4 million which represents an increase of 28% vs PDIRD 2020. The public consultation will end on 22nd of July and then ERSE will have 22 days to publish the final opinion report.

• Energy Transition and renewable gas
• The "H² Green Valley" project, that REN submitted to the Portuguese Recovery and Resilience Plan (PRR), was selected for the negotiation phase with IAPMEI. The financing agreement with Portuguese government can be signed in the upcoming weeks.

2. Business performance

OPERATIONAL HIGHLIGHTS

Solid quality of service, with a reduction in transmissions losses despite increase in electricity consumption

Electricity	Consumption	Energy transmission losses	Line length
	0.7 TWh 25.3TWh (2.9%)	1.8% 0.3pp	335km 9,373km (3.7%)
	1H21: 24.6TWh	1H21: 2.1%	1H21: 9,038km
	Renewables in consumption supply	Average interruption time	Combined availability rate
	47.5% 20.9pp	0.07min 0.07min	98.7% 0.3pp
	1H21: 68.4%	1H21: 0.00min	1H21: 99.0%
Gas Transmission	Consumption	Combined availability rate	Line length
	0.4TWh 31.2TWh (1.2%)	100.0% 0.1pp	0km 1,375km (0.0%)
	1H21: 31.6TWh	1H21: 99.9%	1H21: 1,375km
Gas Distribution	Gas distributed	Emergency situations with response time up to 60min	Line length
	0.7TWh 3.4TWh (17.1%)	98.5% 0.3pp	233km 6,210km (3.9%)
	1H21: 4.1TWh	1H21: 98.2%	1H21: 5,977km

FINANCIAL HIGHLIGHTS

Net Profit grew 16% driven by an EBIT increase and positive impact from Financial Results

Increase in EBITDA driven by higher assets and opex remuneration in domestic business and positive contribution from Chile

EBITDA evolution breakdown €M

1 Includes electricity regulatory incentives (in 1H21 €13.4M from the Incentive for the Rationalization of Economic Investments, and in 1H22 €3.8M from the Incentive to the Improvement of the TSO Technical Performance) and excludes Opex remuneration related to pass-through costs | 2. Includes REN Trading incentives, telecommunication sales and services rendered, interest on tariff deviation, consultancy revenues and other services provided, OMIP and Nester results | 3. Includes Apolo SpA and Aerio Chile SpA costs | 4 Excludes the segment "Other", which includes REN SGPS, REN Serviços, REN Telecom, REN Trading, REN PRO and REN Finance B.V. | 5 Refers to Portgás

EBITDA contribution by business segment⁴ %

Bond yields presented an increase in 2022 as consequence of current macro environment

Portuguese 10Y Treasury Bond Yields % Base Rate of Return on RAB (RoR)* %

Transfers to RAB grew 30.6% and Capex remained mostly in line with 1H21

Transfers to RAB €M

Capex €M

Main investment projects

Electricity

• 220 kV connection between Rio Maior and Carvoeira substations
• Refurbishing of the 220 kV Gas Insulated substation at Carriche
• Rehabilitation and stabilization of the slope at the Carvoeira substation
• 400 kV Line Panel at Sines substation to connect to a photovoltaic solar plant (Cercal Power)

Gas Transmission

• Carriço Storage: Auxiliary System upgrade
• Pipeline Network and Sines Terminal: replacement and upgrade of equipment and systems at the end-of-life

Gas Distribution

• Investments for network expansion and densification, mostly for B2C
• New prospects for B2B investments closely monitored in order to provide client comfort regarding network costs
• Decarbonizing and digitalization plan on the move
• New investment plan 23-27 delivered to DGEG and ERSE (April 2022), now under discussion
• Expansion to new industrial zones under preparation

Average RAB increased 2.5% in 1H22 due to impact of transfers to RAB from 2021

Average RAB evolution €M

RAB remuneration increased as a result of the higher rate of return

Return on RAB evolution breakdown €M

Increase in the average RAB by €2.3M, to €39.3M and increase in RoR (from 4.51% to 4.65%)

Increase in Return on RAB justified by a higher RoR of 5.03% (vs 4.52%), despite the smaller asset base (decrease of €27.2M to a total of €884.0M)

1.25 0.29 11.05 12.58 +€1.53M (+13.9%)

OPEX decreased by 0.7% YoY, while core OPEX grew 4.2%

Core OPEX¹ evolution €M

Key highlights

Core external costs

• Electricity costs in LNG terminal (+€5.3M)

Non-core costs

• Pass-through costs (costs accepted in the tariff) decreased by €2.8M, of which -€1.5M in costs with cross-border and system services costs, -€1.6M in costs with ERSE and +€0.5M in subsoil occupation levies

Electrogas (42.5%)

0.0

INTERNATIONAL BUSINESS

Solid performance from the Chilean businesses

0.0

N/A

Key highlights

Transemel, Chile

Revenues increased YoY reflecting the conclusion of expansion projects started in 2021

1H21: €3.2M

EBITDA

Electrogas, Chile

EBITDA increased YoY, driven by higher revenues (higher tariff and higher transported volumes)

1H21: €13.4M €19.9M €6.5M (48.8%)

Net Profit benefited from higher EBITDA and better financial results, despite higher depreciations, taxes and CESE

Net profit evolution breakdown €M Key highlights

• The increase in EBITDA reflects the positive contribution from both the domestic (+€6.8M) as well as international businesses (+€3.7M)
• Positive effect of €3.0M from Financial Results as a consequence of better financial conditions, lower net debt and higher dividends from associates
• Higher CESE (Δ€0.9M) and higher taxes, reflecting the evolution of the regulated asset base

Net Debt artificially low due to the impact of tariff deviations

1 Calculated as Net Debt plus Cash, bank deposits and derivative financial instruments (€496M), excluding effects of hedging on yen denominated debt, accrued interest and bank overdrafts | 2 Includes loans (1.7%) and leasing (0.2%) | 3 Net Debt Value without tariff deviations

Positive evolution in Financial Results, partly attributed to the progress in recognized dividends

the average cost of debt of 0.08 p.p.

from 1.58% to 1.66%.

• Effective tax rate reached 39.6%, a 1.2 p.p. decrease relatively to 1H21 (including the levy).
• Increase vs 1H21 reflecting the increase in EBT (+€9.5M).
• Taxes (1H22 and 1H21) benefited from tax recovery of previous years.

SHARE PRICE & SHAREHOLDER RETURN

Hold recommendations

44.4% 5.6pp

1H21: 50.0%

REN's share price has been rising since March, closing 1H22 with a TSR of 19% outperforming the sector

Analyst recommendations¹

% TSR 1H21

% TSR 1H22

3. Shaping a sustainable future

HIGHEST ESG STANDARDS

1H22 RESULTS 21

REN is taking sustainable steps towards meeting its targets

-50% CO2 emissions by 2030 vs. 2019

Carbon neutral by 2040

Targets Achievements

Climate | 25% reduction in our scope 1 and 2 emissions (2021 vs. 2020) | In 2022, REN concluded a supply chain's ESG maturity assessment and kicked-off of a project to calculate its scope 3 emissions' inventory

Forest | Innovative approach with local partners in Vieira do Minho area using Garrano horses to prevent forest fires on Cabreira Mountain, while creating conditions to protect this local endangered species

Mobility | REN presented at the Hannover Messe the Speed-e project, an innovative charging solution that enables electric vehicles to be charged directly from the electricity transmission grid. This solution can also be used for electricity supply to remote communities or industrial facilities

Gender equality | REN joined the Portuguese Diversity Charter, an initiative of the European Commission

Local communities | In June, REN delivered seven vehicles to voluntary fire brigades, reinforcing the company's commitment to the prevention and fighting rural wildfires. Since 2009, REN has donated 89 vehicles to both voluntary fire brigades and civil protection teams

Sustainability governance | REN created a Sustainability Committee at Board level

Cybersecurity | Reinforcement of mandatory training for all employees and internal communication awareness campaign

>1/3 of women in 1st line management positions by 2030

Increasing ESG weight in managers' performance metrics already in 2022

100% of new bond

HIGHEST ESG STANDARDS

Good performance in international ESG scores but with ambition to do more

Assessment of resilience to long-term ESG risks, REN demonstrated strong efforts on Biodiversity & Land use relative to peers, and in line with its global peers' average on Corporate Governance

MSCI ESG Rating Sustainalytics ESG Rating ISS ESG Rating

• Measurement of a company's exposure to industry-specific material ESG risks and how well a company is managing those risks
• REN demonstrated low risk, which is aligned with the ratings received by peers and above sector average

Assessment of sustainability performance, based on specific criteria for each industry. REN ranked very high on transparency level

4. Closing remarks

CLOSING REMARKS

REN remains fully committed to deliver solid results and sustainable returns

EBITDA of €238.4M, an increase of €10.5M YoY (+4.6%), as a result of the increase in domestic and international business performances.

Net Profit increased to €45.9M (+€6.3M), driven by an increase in EBIT (+€6.5M) and higher Financial Results (+€3.0M), partially offset by higher levy (+€0.9M) and taxes (+€2.2M), following the evolution on regulated asset base.

Positive consolidation in Net Debt (-€440.5M YoY) as the operating cash flow and tariff deviations exceeded the outflows of investment and financing activities.

Capex remained in line with 1H21 while transfers to RAB grew 30.6% (+€5.2M) to €22.0M.

REN's share performance continues to deliver value to its shareholder, closing 1H22 with a TSR of 19% outperforming the sector.

This presentation and all materials, documents and information used therein or distributed to investors in the context of this presentation do not constitute, or form part of, a public offer, private placement or solicitation of any kind by REN, or by any of REN's shareholders, to sell or purchase any securities issued by REN and its purpose is merely of informative nature and this presentation and all materials, documents and information used therein or distributed to investors in the context of this presentation may not be used in the future in connection with any offer in relation to securities issued by REN without REN's prior consent.

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