REN-Redes Energeticas Nacionais

Investor Presentation • Nov 13, 2020

Results Report Nine Months 2020

13th November 2020

AGENDA

1. Overview of the period

2. Business performance

1. Overview of the period

9M20 RESULTS 3 1. Overview of the period

KEY MESSAGES 9M2020

10
15

Electricity and natural gas consumption decreased by 3.5% and 1.5% respectively, with renewable sources reaching 56% of the total supply (11pp higher than in 9M2019)

Service quality remained high, with 0.03min of electricity interruption time (93% lower than 9M2019) and natural gas combined availability rate at 100%, the same rate as in 9M2019

EBITDA reached €352.5M, a 4.2% decrease (-€15.5M) mainly explained by lower remuneration rates from lower sovereign bond yields coupled with the new parameters in the gas regulatory framework (-€15.6M) and higher results from the international segment (€5.4M), especially from the consolidation of Transemel in Chile

Net Profit decreased to €76.1M (€10.3M lower than in 9M19), despite the positive effects of a lower cost of debt in Financial results (reduction of €2.8M to -€36.7M) and lower income tax (reduction of €10.3M to -€31.7M), but with an increase in the extraordinary energy sector levy of €3.8M to €28.2M, as for the first time this year it also covered Portgás

COVID-19 had a limited impact on REN's financial performance overall, with neutral impact in Net Income, a slight increase in Net Debt and delays in investment execution, which are expected to be recovered in 2021

The credit agency S&P reaffirmed REN's rating at 'BBB' and outlook stable (October 29th)

SECTOR OVERVIEW

The Energy Transition is at the center of the Portuguese Government agenda

PNEC 2030 is approved

• In July the Portuguese Government approved the PNEC 2030 (National Energy and Climate Plan), the prime instrument for the implementation of the Portuguese roadmap for carbon neutrality
• This sets mandatory targets for renewable energy incorporation in electricity (80% up to 2030, from 52% at present) and carbon reductions until 2030

• On June 17, following the public consultation on the National Hydrogen Strategy, the Portuguese Government has issued Despacho n.º 6403-A/2020 regarding the opening of a call for parties to communicate their interest to participate in a future Important Project of Common European Interest (IPCEI) about hydrogen
• REN was one of the respondents together with a group of relevant national companies. There were around 74 Hydrogen Projects Call responses, and 34 passed to the next selection phase of the IPCEI call

1

Gas Law amendment for Renewable Gases namely Hydrogen

• A new Decree-Law that establishes the organization and functioning of the Sistema Nacional de Gás and its legal framework, was published. This is set for the decarbonisation in domestic and industrial gas consumption introducing a horizon to the gas networks role in a low carbon future
• Production of renewable and low carbon gases is defined as a liberalized market activity. The producers of renewable or low carbon gases may use the product for any purpose. Related to REN ownership unbundling certification, the same restrictions apply as for the electricity sector
• The Decree-Law provides for the growing recognition of renewable gases, in particular hydrogen, as a clean and versatile energy carrier, and definitely a solution for the incorporation of these renewable gases in the gas networks. The mixing targets for hydrogen in the gas network becomes mandatory. REN is already preparing the required upgrades

A new solar capacity auction of 670 MW was held on the 15th and 24th of August. Most of the capacity (483 MW) was sold in the storage option, and price references comparable but lower than to the previous auction were

COVID-19

Main financial impacts arising from the COVID-19 pandemic were felt in investment execution and RoR

Main effects of COVID-19

		Description
1	Delay in transfers to RAB	Due to the coronavirus pandemic that led to a To be ✔ temporary suspension of works in March and recovered April, some projects will not be concluded before in 2021 year-end		Impact on REN's
2	Increase in 10Y Portuguese Government bonds	The increase in 10Y PT Government Bonds in 2020 have a slightly positive impact in REN's rate of return. In electricity the base rate for 2020 is 4.6%	financial performance is overall neutral in Net Income with a slight increase in
3	Additional costs	Net Debt and a delay in transfers to RAB
4	Increase in tariff deviations	Higher tariff deviations as a result of the reduction in electricity consumption. By the end of 9M20, the tariff deviations amounted to €168.8M

2. Business performance

BUSINESS HIGHLIGHTS

In Portugal, service quality remained high, in a context of declining consumption and an increased share of renewables supply

FINANCIAL HIGHLIGHTS

Net Profit with negative evolution, driven by lower EBITDA and despite better financial results

EBITDA contribution by

Decrease in EBITDA explained by lower remuneration rates and higher OPEX costs, partially offset by Chile's contribution

EBITDA evolution breakdown €M

1 Includes Apolo SpA costs | 2 Includes amortizations recovery, subsidies amortization, REN Trading incentives, telecommunication sales and services rendered, interest on tariff deviation, consultancy revenues and other services provided, OMIP and Nester results | 3 Excludes the segment "Other", which includes REN SGPS, REN Serviços, REN Telecom, REN Trading, REN PRO and REN Finance B.V. | 4 Refers to Portgás

9M20 RESULTS 10

Return on RAB negatively influenced by the downward trend in Portuguese bond yields

Transfers to RAB and CAPEX below 9M19, with delays caused by the COVID-19 pandemic

Transfers to RAB €M Key highlights

Capex €M

Electricity

• Main investment projects concluded:
  • Chafariz substation: new 220 kV bay to connect Sincelo wind farm
  • Sacavém and Falagueira substations: refurbishment of the command and protection systems

Gas Transmission

• Main investment projects concluded:
  • Pipeline network: replacement of flow computers
  • Sines terminal: replacement and upgrade of the electrochlorination station

Gas Distribution

• Investments for network expansion and densification, mostly for B2C, with new prospects for B2B investments continuing to be monitored, alongside with firm contracts
• Network decarbonization process on the move

RAB relatively stable despite small declines in almost all asset classes

Average RAB evolution €M

Overall, the decrease in RAB remuneration is largely explained by lower rates

Return on RAB evolution breakdown €M

Decrease in Return on RAB explained by a lower rate of return on assets with and without premium¹ , a smaller asset base (by €10.6M to €2,015.8M) and a decrease in weight of assets with premium²

Return on RAB with negative evolution due to a lower RoR (from 5.40% to 4.59%), and a smaller asset base (by €42.0M to a total of €948.0M)

Gas Transmission Gas Distribution

Increase in OPEX mostly related to pass-through costs, with core OPEX increasing only ~3%

Core OPEX¹ evolution €M Key highlights

Core external costs

• related to forest clearing (+€4.2M), as a result of more demanding legislation
• COVID-19 related costs²(+€1.0M)
• Lower electricity costs in the LNG Terminal (-€1.1M)
• Other (e.g., travel & transport, IT, 3 rd party services) (-€1.4M)

Personnel costs

• Reflects essentially the decrease in overtime costs and travel allowances (-€0.3M) and the net effect of entries and exits (-€0.4M)

Non-core costs

• Pass-through costs (costs accepted in the tariff) increased by €3.8M, of which €2.4M correspond to costs with crossborder and system services costs and €0.5M to costs with NG transportation

1 Calculated as OPEX minus pass-through costs (e.g., ITC mechanism, NG transportation costs, ERSE costs and subsoil occupation levies) 2 Includes donations of masks to the health authorities and to a ventilators' scientific project, individual protection equipment for employees

9M2019: €87.5M

DOMESTIC BUSINESS: ELECTRICITY

9M2019: €43.4M

Electricity EBITDA with a slight decrease, mainly explained by lower return on assets and higher OPEX costs

EBITDA breakdown €M

9M2019: €2,026.4M 9M2019: 4.9%

(0.5%)

(17.9%)

9M2019: €27.3M

DOMESTIC BUSINESS: GAS TRANSMISSION

Decreasing Gas Transmission EBITDA largely explained by lower asset remuneration

1. Business performance

DOMESTIC BUSINESS: GAS DISTRIBUTION

Gas Distribution's EBITDA remained relatively stable, with changes in remuneration rates partially offset by lower OPEX costs

EBITDA breakdown €M

Capex	Transfers to RAB	Average RAB	RoR	Core OPEX
€3.2M €12.6M (20.0%)	€1.6M €13.4M (10.4%)	€0.2M €469.7M (0.0%)	4.8% 0.9pp	€1.4M €6.2M (18.4%)
9M2019: €15.8M	9M2019: €15.0M	9M2019: €469.5M	9M2019: 5.7%	9M2019: €7.6M

INTERNATIONAL BUSINESS Businesses in Chile contributed positively

(1.3%)

(41.0%)

Below EBITDA, financial results improving due to lower cost of debt, and taxes with overall positive evolution despite the increase in CESE

Net profit evolution breakdown €M Key highlights

• A Prudent financial policy led to the strengthening of Financial Results and a positive effect on Net Profit (€2.8M), on the back of lower costs
• The extraordinary levy CESE continued to penalize Net Profit (€-3.8M), now also applicable to the gas distribution business
• A recovery of tax from previous years in €5.6M contributed to the decrease of income tax

1,159

2024

354

Net Debt nearly flat, with operating cash flow covering payments related to investing and financing activities

1 Calculated as Net Debt plus Cash, bank deposits and derivative financial instruments (€47M), excluding effects of hedging on yen denominated debt, accrued interest and bank overdrafts | 2 Includes loans (6.9%), Transemel's debt (0.3%) and leasing (0.1%)

9M20 RESULTS 22

Commercial paper

13.6%

Other²

EIB

SHARE PRICE & SHAREHOLDER RETURN

Shareholder return penalized by share price drop following the PSI-20 trend, with no "sell" recommendations from analysts

Hold recommendations 40.0% 35.0pp 9M2019: 75.0% Buy recommendations 60.0% 43.0pp 9M2019: 17.0% Upside/Downside (+/-) 19.7% 14.7pp 9M2019: 5.0% Average Price target 9M2019: €2.73 €2.80 €0.07 (2.6%)

3. Closing remarks

CLOSING REMARKS

REN with limited COVID-19 impact but penalized by the new gas regulatory framework

The COVID-19 impact on REN's financial performance was overall neutral in Net Income, with a slight increase in Net Debt, however some projects were temporarily suspended

EBITDA benefited from the inclusion of Transemel and the good performance of Electrogas. However, it suffered from lower remuneration rates resulting from the new regulatory framework in gas, the decrease in bond yields, and the decrease in RAB

Net Profit continued to be penalized by the extraordinary levy that raised the effective tax rate to 38.9%. However, it benefited from the strengthening of Financial Results, due to lower costs

Appendix

9M20 RESULTS 26

APPENDIX Results breakdown

				9M20/9M19
€M	9M20	9M19	2019	Δ %	Δ Abs.
1) TOTAL REVENUES	534.8	557.5	787.0	-4.1%	-22.7
Revenues from assets	317.9	332.2	445.1	-4.3%	-14.3
Return on RAB	125.0	140.5	189.2	-11.1%	-15.6
Electricity	75.5	80.4	108.9	-6.1%	-4.9
Natural gas	32.6	40.1	53.4	-18.6%	-7.5
Portgás	16.9	20.1	27.0	-15.9%	-3.2
Lease revenues from hydro protection zone	0.5	0.5	0.7	-1.2%	0.0
Economic efficiency of investments	18.8	18.8	25.0	0.0%	0.0
Recovery of amortizations (net from subsidies)	159.8	159.0	212.3	0.5%	0.8
Subsidies amortization	13.9	13.3	17.9	3.8%	0.5
Revenues from Transemel	7.5	0.0	2.7		7.5
Revenues of OPEX	97.1	97.7	130.0	-0.6%	-0.6
Other revenues	17.8	17.4	25.2	2.7%	0.5
Construction revenues (IFRIC 12)	94.5	110.3	183.9	-14.3%	-15.8
2) OPEX	100.8	92.9	134.4	8.6%	8.0
Personnel costs	41.2	41.7	55.3	-1.2%	-0.5
External supplies and services	44.6	36.1	60.0	23.6%	8.5
Other operational costs	15.0	15.1	19.1	-0.3%	0.0
3) Construction costs (IFRIC 12)	81.2	96.4	164.6	-15.7%	-15.1
4) Depreciation and amortization	179.9	175.8	235.6	2.3%	4.1
5) Other	0.2	0.3	1.7	-15.5%	0.0
6) EBIT	172.6	192.2	250.6	-10.2%	-19.6
7) Depreciation and amortization	179.9	175.8	235.6	2.3%	4.1
8) EBITDA	352.5	368.0	486.2	-4.2%	-15.5
9) Depreciation and amortization	179.9	175.8	235.6	2.3%	4.1
10) Financial result	-36.7	-39.4	-52.5	-7.0%	2.8
11) Income tax expense	31.7	42.0	54.8	-24.5%	-10.3
12) Extraordinary contribution on energy sector	28.2	24.4	24.4	15.5%	3.8
13) NET PROFIT	76.1	86.3	118.9	-11.9%	-10.3
14) Non recurrent items	22.5	24.4	25.9	-7.6%	-1.9
15) RECURRENT NET PROFIT	98.6	110.7	144.8	-10.9%	-12.1

NON RECURRENT ITEMS: 9M20: i) Extraordinary energy sector levy, as established in the 2020 State budget law (€28.2M); ii) recovery of taxes from previous years (€5.6M) 9M19: i) Extraordinary energy sector levy, as established in the 2019 State budget law (€24.4M)

APPENDIX

Other operational revenues and costs breakdown

		9M20/9M19
€M	9M20	9M19	2019	Δ %	Δ Abs.
Other revenues	17.8	17.4	25.2	2.7%	0.5
Allowed incentives	1.1	1.1	1.3	-6.7%	-0.1
Interest on tariff deviation	0.4	0.4	0.5	-12.3%	0.0
Telecommunication sales and services rendered	5.1	4.9	6.6	3.8%	0.2
Consultancy services and other services provided	1.4	1.4	2.1	2.9%	0.0	Includes revenues related to
Other revenues	9.9	9.6	14.6	3.9%	0.4	Electrogas' Net Profit proportion
Other costs	15.0	15.1	19.1	-0.3%	0.0	(€5.7M in 9M20 and €5.7M in 9M19)
Costs with ERSE	8.6	8.3	11.1	3.8%	0.3
Other	6.4	6.8	8.1	-5.4%	-0.4

APPENDIX EBITDA breakdown (Electricity)

				9M20/9M19
€M	9M20	9M19	2019	Δ %	Δ Abs.
1) REVENUES	344.0	356.7	503.5	-3.6%	-12.7
Revenues from assets	210.9	215.6	289.3	-2.2%	-4.7
Return on RAB	75.5	80.4	108.9	-6.1%	-4.9
Hydro land remuneration	0.0	0.0	0.0		0.0
Lease revenues from hydro protection zone	0.5	0.5	0.7	-1.2%	0.0
Economic efficiency of investments	18.8	18.8	25.0	0.0%	0.0
Recovery of amortizations (net from subsidies)	106.7	107.0	142.8	-0.2%	-0.3
Subsidies amortization	9.4	9.0	12.0	5.0%	0.5
Revenues of OPEX	53.3	51.3	68.6	3.8%	1.9
Other revenues	3.8	2.3	4.7	63.9%	1.5
Interest on tariff deviation	0.3	0.1	0.1		0.2
Other	3.5	2.2	4.5	58.5%	1.3
Construction revenues (IFRIC 12)	76.0	87.5	140.9	-13.1%	-11.5
2) OPEX	45.5	36.9	55.4	23.2%	8.6
Personnel costs	13.1	13.4	17.8	-2.6%	-0.4
External supplies and services	25.5	17.2	29.2	48.2%	8.3
Other operational costs	6.9	6.3	8.5	10.3%	0.6
3) Construction costs (IFRIC 12)	66.1	76.9	126.5	-14.0%	-10.7
4) Depreciation and amortization	115.8	115.6	154.3	0.2%	0.2
5) Other	0.0	0.0	1.2		0.0
6) EBIT (1-2-3-4-5)	116.6	127.3	166.0	-8.4%	-10.7
7) Depreciation and amortization	115.8	115.6	154.3	0.2%	0.2
8) EBITDA (6+7)	232.4	243.0	320.3	-4.3%	-10.6

APPENDIX EBITDA breakdown (Natural gas transmission)

		9M20/9M19
€M	9M20	9M19	2019	Δ %	Δ Abs.
1) REVENUES	117.0	126.0	175.0	-7.1%	-9.0
Revenues from assets	78.6	86.2	114.9	-8.8%	-7.6
Return on RAB	32.6	40.1	53.4	-18.6%	-7.5
Recovery of amortizations (net from subsidies)	41.6	41.7	55.6	-0.3%	-0.1
Subsidies amortization	4.4	4.4	5.8	-0.1%	0.0
Revenues of OPEX	30.8	33.0	44.3	-6.7%	-2.2
Other revenues	1.8	-0.2	-0.3		2.0	A negative revenue is consistent with
Interest on tariff deviation	-0.3	-0.2	-0.3	39.8%	-0.1
Consultancy services and other services provided	0.1	0.1	0.2	0.4%	0.0	a negative tariff deviation
Other	2.0	-0.1	-0.2		2.1
Construction revenues (IFRIC 12)	5.8	7.0	16.2	-17.1%	-1.2
2) OPEX	21.0	21.4	30.0	-1.9%	-0.4
Personnel costs	6.2	5.9	7.9	5.1%	0.3
External supplies and services	10.8	11.6	17.0	-7.2%	-0.8
Other operational costs	4.0	3.9	5.1	3.3%	0.1
3) Construction costs (IFRIC 12)	4.3	5.4	14.0	-21.4%	-1.2
4) Depreciation and amortization	45.4	45.6	60.8	-0.3%	-0.1
5) Other	0.0	0.0	0.1		0.0
6) EBIT	46.3	53.6	70.2	-13.6%	-7.3
7) Depreciation and amortization	45.4	45.6	60.8	-0.3%	-0.1
8) EBITDA	91.8	99.2	130.9	-7.5%	-7.4

APPENDIX EBITDA breakdown (Portgás)

			9M20/9M19
			Δ %	Δ Abs.
				-5.8
28.4	30.3	40.9	-6.5%	-2.0
16.9	20.1	27.0	-15.9%	-3.2
11.5	10.3	13.9	11.3%	1.2
0.0	0.0	0.1		0.1
13.0	13.3	17.1	-2.1%	-0.3
-0.3	0.1	0.1		-0.4
0.0	0.0	0.0		0.0
-0.5	-0.1	-0.2		-0.4
0.1	0.1	0.2	-10.0%	0.0
0.1	0.1	0.1	25.4%	0.0
12.6	15.8	26.9	-20.0%	-3.2
9.6	11.5	14.4	-16.1%	-1.8
3.2	3.3	4.1	-3.7%	-0.1
2.5	3.6	5.2	-29.6%	-1.1
3.9	4.6	5.0	-14.6%	-0.7
10.8	14.1	24.1	-23.0%	-3.2
11.7	10.4	14.2	11.7%	1.2
0.0	0.0	0.1		0.0
21.6	23.6	32.2	-8.2%	-1.9
11.7	10.4	14.2	11.7%	1.2
33.3	34.0	46.4	-2.1%	-0.7
	9M20 53.8	9M19 59.6	2019 84.9	-9.7%

APPENDIX EBITDA breakdown (Transemel)

€M	9M20	2019 As If1
1) REVENUES	7.5	2.7
2) OPEX	2.2	0.5
3) Depreciation and amortization	1.1	0.4
4) EBIT	4.1	1.8
5) Depreciation and amortization	1.1	0.4
6) EBITDA	5.3	2.2

APPENDIX EBITDA breakdown (Other¹ )

				9M20/9M19
€M	9M20	9M19	2019	Δ %	Δ Abs.
1) TOTAL REVENUES	12.4	15.1	20.8	-17.8%	-2.7
Other revenues	12.4	15.1	20.8	-17.8%	-2.7
Allowed incentives	1.1	1.1	1.3	-6.7%	-0.1
Interest on tariff deviation	0.3	0.5	0.7	-37.1%	-0.2
Telecommunication sales and services rendered	5.1	4.9	6.6	3.8%	0.2
Consultancy services and other services provided	0.2	1.0	1.5	-76.9%	-0.7
Other	5.8	7.6	10.7	-24.5%	-1.9
2) OPEX	22.4	23.1	34.0	-2.7%	-0.6
Personnel costs	18.7	19.0	25.4	-1.7%	-0.3
External supplies and services	3.5	3.7	8.1	-3.6%	-0.1
Other operational costs	0.2	0.3	0.6	-44.9%	-0.2
3) Depreciation and amortization	5.8	4.1	5.9	41.6%	1.7
4) Other	0.3	0.3	0.4	0.4%	0.0
5) EBIT	-16.1	-12.3	-19.5	30.7%	-3.8	Includes the negative impacts of the
6) Depreciation and amortization	5.8	4.1	5.9	41.6%	1.7	PPAs2 of Portgás (€0.2M) and
7) EBITDA	-10.3	-8.2	-13.6	25.2%	-2.1	Transemel (€1.5M)

APPENDIX Capex and RAB

		9M19 2019		9M20/9M19
€M	9M20			Δ %	Δ Abs.
CAPEX	103.7	110.3	188.6	-6.0%	-6.6
Electricity	76.0	87.5	140.9	-13.1%	-11.5
Natural gasT	5.8	7.0	16.2	-17.1%	-1.2
Natural gasD	12.6	15.8	26.9	-20.0%	-3.2
Transemel	9.0	-	4.5		9.0
Other	0.2	0.0	0.1		0.2	Transfers to RAB include
Transfers to RAB	21.9	60.1	190.6	-63.6%	-38.3
Electricity	4.9	43.4	151.7	-88.8%	-38.6	direct acquisitions RAB related
Natural gasT	3.6	1.8	12.7	104.7%	1.9
Natural gasD	13.4	15.0	26.3	-10.4%	-1.6
Average RAB	3,652.9	3,717.8	3,753.3	-1.7%	-64.9
Electricity	2,015.8	2,026.4	2.061.4	-0.5%	-10.6
With premium	1,062.4	1,092.6	1,096.5	-2.8%	-30.2
Without premium	953.4	933.8	964.9	2.1%	19.6
Land	219.5	231.9	230.4	-5.4%	-12.5
Natural gasT	948.0	990.0	988.5	-4.2%	-42.0
Natural gasD	469.7	469.5	473.0	0.0%	0.2
RAB e.o.p.	3,575.2	3,666.7	3,738.8	-2.5%	-91.5
Electricity	1,961.6	1,998.6	2.069.9	-1.8%	-37.0
With premium	1,041.2	1,075.8	1,083.6	-3.2%	-34.6
Without premium	920.5	922.8	986.3	-0.3%	-2.3
Land	214.8	227.2	224.1	-5.5%	-12.4
Natural gasT	929.0	970.0	967.0	-4.2%	-41.1
Natural gasD	469.8	470.8	477.8	-0.2%	-1.0

APPENDIX RAB

				9M20/9M19
€M	9M20	9M19	2019	Δ %	Δ Abs.
RAB's remuneration	125.5	141.0	189.9	-11.0%	-15.6
Electricity	75.5	80.4	108.9	-6.1%	-4.9
With premium	42.6	46.2	61.8	-7.7%	-3.6
Without premium	32.9	34.2	47.0	-3.9%	-1.3
Land	0.5	0.5	0.7	-1.2%	0.0
Natural gasT	32.6	40.1	53.4	-18.6%	-7.5
Natural gasD	16.9	20.1	27.0	-15.9%	-3.2
RoR's RAB	4.6%	5.1%	5.1%		-0.5p.p.
Electricity	5.0%	5.3%	5.3%		-0.3p.p.
With premium	5.3%	5.6%	5.6%		-0.3p.p.
Without premium	4.6%	4.9%	4.9%		-0.3p.p.
Land	0.3%	0.3%	0.3%		0.0p.p.
Natural gasT	4.6%	5.4%	5.4%		-0.8p.p.
Natural gasD	4.8%	5.7%	5.7%		-0.9p.p.

APPENDIX Tariff deviations

€M	9M20	2019
Electricity	70.9	38.7
Trading	153.7	138.1
Natural gasT	-53.5	-57.8
Natural gasD	-2.2	-4.4
Total	168.8	114.6

! The value of the tariff deviations is paid in full and with interest over a two year period from the moment it is created

APPENDIX Funding sources

		Non
€M	Current	Current	9M20
Bonds	267.8	1,444.9	1,712.6
Bank borrowings	83.0	603.6	686.6
Commercial paper	125.0	250.0	375.0
Bank overdrafts	2.9	0.0	2.9
Finance lease	1.2	1.7	2.9
TOTAL	479.9	2,300.2	2,780.1
Accrued interest	29.3	0.0	29.3
Prepaid interest	-7.8	-11.9	-19.7
TOTAL	501.4	2,288.4	2,789.8

• In 9M20, with the coronavirus pandemic, the global economy suffered a deep contraction. However, REN maintained its financial strength and continued to present high liquidity and a low average cost of debt;
• REN's total liquidity reached €858M, including credit facilities, loans, non-used commercial paper programmes, cash and bank deposits;
• Bank borrowings were mainly represented by EIB loans (€489.5M);
• The Group had credit lines negotiated and not used in the amount of €80.0M, maturing up to one year, which are automatically renewed periodically (if they are not resigned in the contractually specified period for that purpose);
• REN also had eight active commercial paper programmes in the amount of €1,400.0M, of which €1,025.0M were available for use;
• REN's financial liabilities had the following main types of covenants: Cross Default, Pari Passu, Negative Pledge and ratios of Leverage and Gearing;
• The effect of the foreign exchange rate exposure was not considered as this exposure is totally covered by a hedge derivate in place. The average interest rates for borrowings, including commissions and other expenses, was 1.87% at the end of September.

APPENDIX Debt and debt metrics

	9M20	9M19	2019
Net Debt (€M)	2,743.0	2,586.5	2,826.0
Average cost	1.9%	2.2%	2.1%
Average maturity (years)	3.7	3.7	3.6
Net Debt / EBITDA	5.7x	5.3x	5.7x
DEBT BREAKDOWN
Funding sources
Bond issues	61%	63%	60%
EIB	18%	13%	15%
Commercial paper	14%	17%	16%
Other	7%	7%	8%
TYPE
Float	41%	42%	42%
Fixed	59%	58%	58%

RATING	Long term	Short term	Outlook	Date
Moody's	Baa3	-	Stable	05/06/2020
Standard & Poor's	BBB	A-2	Stable	29/10/2020
Fitch	BBB	F3	Negative	05/06/2020

APPENDIX Market information

CMVM: MAIN PRESS RELEASES (from January 2020)

• Jan-09: Qualified shareholding from Great-West Lifeco
• Feb-12: Summary of annual information disclosed in 2019
• Feb-26: Qualified shareholding from The Capital Group Companies
• Feb-27: Qualified shareholding from The Capital Group Companies
• Mar-25: 2019 Consolidated results
• Apr-9: Notice to convene the annual general shareholders meeting and deliberation proposals
• Apr-9: Accounts reporting documents referring to the financial year ended on 31st December 2019 item 1 of the agenda for the general shareholders meeting
• Apr-9: Corporate Governance report included in the 2019 Report and Accounts
• May-05: First 3 months 2020 consolidated results
• May-05: Resolutions approved at the General Shareholders meeting
• May-12: Payment of dividends relating to the financial year of 2019
• May-13: Extraordinary extension of the regulation period of the electricity sector until 2021
• Jun-05: Fitch affirms REN's rating at 'BBB' and revises outlook to negative
• Jul-29: First half 2020 consolidated results
• Aug-10, Aug-13, Sep-01, Sep-02, Sep-07, Sep-11, Sep-21: Qualified shareholding from Norges Bank

Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

Financial position

€M	Sep 2020	Dec 2019	€M	Sep 2020	Dec 2019
ASSETS			EQUITY
Non-current assets			Shareholders' equity:
Property, plant and equipment	126,424	125,649	Share capital	667,191	667,191
Intangible assets	4,132,348	4,214,916	Own shares	-10,728	-10,728
Goodwill	5,686	5,969	Share premium	116,809	116,809
Investments in associates and joint ventures	166,383	172,278	Reserves	298,194	316,681
Investments in equity instruments at fair value through other comprehensive income	145,191	155,676	Retained earnings	241,769	242,853
Derivative financial instruments	27,646	27,229	Other changes in equity	-5,561	-5,561
Other financial assets	94	71	Net profit for the period	76,070	118,899
Trade and other receivables	199,702	114,509	TOTAL EQUITY	1,383,862	1,446,144
Deferred tax assets	85,883	93,666
	4,889,357	4,909,964	LIABILITIES
Current assets			Non-current liabilities
Inventories	3,985	3,919	Borrowings	2,288,365	2,112,296
Trade and other receivables	237,034	353,725	Liability for retirement benefits and others	100,577	103,309
Current income tax recoverable	236	14,921	Derivative financial instruments	29,961	28,848
Derivative financial instruments	1,654	1,732	Provisions	8,323	8,416
Cash and cash equivalents	24,794	21,044	Trade and other payables	350,758	340,627
	267,704	395,341	Deferred tax liabilities	145,250	141,774
				2,923,234	2,731,269
TOTAL ASSETS	5,157,061	5,305,305	Current liabilities
			Borrowings	501,405	757,158
			Trade and other payables	348,560	370,733
				849,965	1,127,891

TOTAL LIABILITIES 3,773,199 3,859,160

TOTAL EQUITY AND LIABILITIES 5,157,061 5,305,305

CONSOLIDATED FINANCIAL STATEMENTS

Profit and loss

€M	Sep 2020	Sep 2019
Sales	30	51
Services rendered	414,380	419,378
Revenue from construction of concession assets	94,460	110,270
Gains / (losses) from associates and joint ventures	5,926	7,499
Other operating income	19,815	20,143
Operating income	534,610	557,341
Cost of goods sold	-459	-539
Cost with construction of concession assets	-81,233	-96,362
External supplies and services	-44,672	-36,406
Personnel costs	-41,155	-41,412
Depreciation and amortizations	-179,851	-175,753
Provisions	0	1
Impairments	-238	-283
Other expenses	-14,545	-14,514
Operating costs	-362,153	-365,269
Operating results	172,457	192,072
Financial costs	-46,452	-50,499
Financial income	4,128	5,805
Investment income - dividends	5,823	5,377
Financial results	-36,501	-39,317
Profit before income tax and ESEC	135,955	152,755
Income tax expense	-31,721	-42,042
Energy sector extraordinary contribution (ESEC)	-28,165	-24,390
Net profit for the year	76,070	86,324
Attributable to:
Equity holders of the Company	76,070	86,324
Non-controlled interest	0	0
Consolidated profit for the year	76,070	86,324
Earnings per share (expressed in euro per share)	0.11	0.13

CONSOLIDATED FINANCIAL STATEMENTS Cash flow

€M	Sep 2020	Sep 2019
Cash flow from operating activities
Cash receipts from customers	1,620,533	1,794,353 a)
Cash paid to suppliers	-1,242,296	-1,381,425 a)
Cash paid to employees	-54,554	-54,634
Income tax received/ paid	-4,334	-883
Other receipts/ (payments) relating to operating activities	924	-36,493
Net cash flows from operating activities (1)	320,272	320,917
Cash flow from investing activities
Receipts related to:
Investment associates	220	292
Investment grants	21,653	6,283
Interests and other similar income	0	24
Dividends	11,587	8,070
Payments related to:
Property, plant and equipment	-11,077	-73
Intangible assets - Concession assets	-102,635	-105,393
Net cash flow used in investing activities (2)	-80,252	-90,797
Cash flow from financing activities
Receipts related to:
Borrowings	1,692,500	3,938,550
Payments related to:
Borrowings	-1,782,320	-3,882,722
Interests and other similar expense	-34,986	-41,129
Dividends	-113,426	-113,426
Net cash from/ (used in) financing activities (3)	-238,232	-98,726
Net (decrease)/increase in cash and cash equivalents (1)+(2)+(3)	1,789	131,394
Effect of exchange rates	-441	-28
Cash and cash equivalents at the beginning of the year	20,521	34,096
Cash and cash equivalents at the end of the period	21,868	165,463
Detail of cash and cash equivalents
Cash	22	26
Bank overdrafts	-2,926	-6,011
Bank deposits	24,772	171,448
	21,868	165,463

These amounts include payments and receipts relating to
activities in which the Group acts as agent, income and costs
being reversed in the consolidated statement of profit and loss.

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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Ana Fernandes – Head of IR Alexandra Martins Telma Mendes

Av. EUA, 55 1749-061 Lisboa Telephone: +351 210 013 546 ir@ren.pt