REN-Redes Energeticas Nacionais

Investor Presentation • Mar 18, 2021

Results Presentation

AGENDA

1. Overview of the period

2. Business performance

2018-21 Strategic Plan execution 3. & Outlook

1. Overview of the period

KEY MESSAGES 2020

EBITDA reached €470.2M, a decrease of 3.3% (-€16.1M) YoY attributed to (1) lower RAB remuneration (-€23.8M), due to declining rates from lower sovereign bond yields coupled with new parameters in the gas regulatory framework and a smaller RAB; (2) a reduced OPEX contribution, and (3) a one-off improvement in the Economic efficiency of investments (REI) incentive of +€7M.

The performance from the international segment benefited EBITDA by €5.0M, namely the consolidation of Transemel.

Net Profit amounted to €109.2M (€9.7M lower than in 2019), with a positive contribution from Financial results (increase of €5.7M to -€46.8M), mostly due to a lower cost of debt (from 2.1% to 1.8%), an increase in dividends received and a lower income tax (with a reduction of €9.9M to €44.9M and with the benefit of a tax credit of €5.6M. All of which helped bring net debt down.

REN continued to be penalized by the special levy, which rose €3.7M due to the inclusion of Portgás and stood at €28.1M. Since its introduction in 2014 REN has deposited more than €180M into the State's coffers.

COVID-19 added an additional layer of challenge to REN's operations but other than for a short period of time between mid-March and early May, when only emergency and critical activities could be performed the whole company was able to securely adapt and deliver in all fronts. The result was visible as quality of service remained at the usual very high levels.

After extensive work during the fourth quarter of 2020, last February, REN was licensed to issue "green bonds" rated as B ("Prime") by the International Shareholder Services ESG (ISS-ESG).

Service quality remained high, with 0.03min of electricity interruption time (0.72min in 2019) and natural gas combined availability rate at approximately 100%, the same rate as in 2019

Renewable energy sources reached 59% of the total supply ( 51% in 2019). Consumption of electricity and natural gas decreased by 3.0% and 1.6% respectively, mainly due to COVID-19.

SECTOR OVERVIEW

In 2020 the Energy Transition was at the center of the Portuguese Government agenda

COVID-19

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

Main effects of COVID-19

	Description
Delay in transfers to 1 RAB	To be Due to the coronavirus pandemic that led to a ✔ recovered temporary suspension of works in March and April, in 2021 some projects were not concluded in 2020
2 Additional costs	There were additional costs to enable the workforce to perform their jobs location, due both remotely and on to the extra need of health and safety precautions, including personal protection equipment, as well as the adaptation of the Company's sites to the pandemic challenges. REN also made significant contributions participating in community efforts.
Increase in tariff 3 deviations	Higher tariff deviations as a result of the reduction in electricity consumption. By the end of 2020, the tariff deviations by consumption-related increased 33.5M versus year-end 2019

Impact on REN's financial performance is overall neutral in EBITDA with a slight decrease in Net Debt and a delay in transfers to RAB

2. Business performance

BUSINESS HIGHLIGHTS

Superior quality of service in Portugal, notwithstanding a higher share of renewables and some deterioration in demand

Electricity	Consumption	Energy transmission losses	Line length
	1.5 TWh 48.8TWh (3.0%)	1.8% 0.1pp	34km 9,036km (0.4%)
	2019: 50.3TWh	2019: 1.7%	2019: 9,002km
Renewables in consumption supply		Average interruption time
	58.6% 7.5pp	0.69min 0.03min (95.7%)
	2019: 51.1%	2019: 0.72min
Gas Transmission	Consumption	Combined availability rate	Line length
	1.1TWh 66.9TWh (1.6%)	100% 0.0pp	0km 1,375km (0.0%)
	2019: 67.9TWh	2019: 100%	2019: 1,375km
Gas Distribution	Gas distributed	Emergency situations with response time up to 60min	Line length
	0.1TWh 7.3TWh (0.9%)	98.7% 0.1pp	192km 5,897km (3.4%)
	2019: 7.3TWh	2019: 98.6%	2019: 5,705km

FINANCIAL HIGHLIGHTS

Net profit decreased despite the improvement in Financial results and due to the decline in EBITDA

EBITDA contribution by

Decline in EBITDA mostly due to lower remuneration rates and greater OPEX costs, partially offset by REN's international exposure

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 | 5 REI: Economic efficiency of investments

2020 RESULTS 10

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

2020 RESULTS ¹¹ SOURCE: Bloomberg; REN * Electricity regulatory period: from Oct-19 to Sep-20; Gas regulatory period: from Jan-20 to Dec-20

5.7

4.9

4.6

4.6

4.8

Transfers to RAB and CAPEX dropped YoY, driven by COVID-19 hurdles

Transfers to RAB €M

Key highlights

Electricity

Main investment projects:

• New 400 kV Castelo Branco-Fundão line, where a new 400/200 kV substation is also under construction
• New connection between the Ponte de Lima area and the Vila Nova de Famalicão substation
• New Ribeira de Pena substation and power line Feira-Ribeira de Pena

Gas Transmission

• Main investment projects concluded:
  • Carriço Storage: the first phase of the Water Firefighting 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, with new prospects for B2B investments continuing to be monitored, alongside with firm contracts
• Network decarbonization process on the move

Decrease in the RAB over all asset categories

Average RAB evolution €M

RAB remuneration decreased across all businesses, but especially in the gas business, where RoR fell 80bps YoY, with new regulatory parameters

Return on RAB evolution breakdown €M

Electricity

61.76

47.12 Return on

With premium

Return on RAB drop caused by a lower rate of return on assets with and without premium¹ , a smaller asset base (by €61.5M to €2,000.0M) and a reduction in weight of assets with premium²

-3.07

Without premium

-5.92

-0.04

99.85

108.88

€-9.03M (-8.3%)

43.27

56.58

Return on RAB 2020

Change in asset mix

Asset base evolution

RAB 2019

RoR evolution

Decline in Return on RAB justified by a lower RoR of 4.56% (-0.80bps), and a smaller asset base (by €43.0M to a total of €945.5M)

43.12

-8.30

-1.96

N/A

Return on RAB reduction attributed to a lower rate of return (from 5.70% to 4.76%) and a smaller asset base (by €1.4M to a total of €471.6M)

-4.45

26.96

€-10.26M (-19.2%)

OPEX increased by 6.7% YoY, mainly in pass-through costs, with core OPEX rising only 3.4%

Core OPEX¹ evolution €M

Key highlights

Core external costs

• Maintenance costs (+€2.9M), mostly related to forest clearing (+€3.6M), as a result of more vegetation area managed (9,587ha in 2020 vs 7,873ha in 2019);
• COVID-19 related costs²(+€1.1M)
• Lower electricity costs in the LNG Terminal (-€1.3M)
• Other (e.g., travel & transport, IT, 3 rd party services)

Personnel costs

• Reflects essentially the increase in wages, partially offset by lower overtime costs and travel allowances

Non-core costs

• Pass-through costs (costs accepted in the tariff) increased by €5.2M, of which €3.7M correspond to costs with cross-border and system services costs and €0.3M to costs with NG transportation

INTERNATIONAL BUSINESS

Solid performance from the Chilean businesses

Revenues decreased YoY mainly driven by extraordinary items in 2019 while National revenues increased despite being offset by exchange rate effects (peso depreciation)

EBITDA decreased YoY, driven by lower revenues from services provided to clients, despite the slight take-or-pay

(3.0%)

Positive development from items below EBITDA, with better financial results, as the cost of debt decreased and with lower tax contributions

Net profit evolution breakdown €M Key highlights

• The Positive effect of €5.7M from Financial Results as a consequence of better financial conditions and higher dividends from associates (Δ€0.4M)
• The extraordinary charge by CESE penalized Net Profit (Δ€-3.7M), now also applicable to the gas distribution business
• A €5.6M tax recovery from previous years contributed positively to the decrease of the effective tax rate
• Impact of €4.1M resulting from the acquisition of 100% of Transemel in October 2019

2020 RESULTS 18

Net Debt improvement due to a higher operating cash flow overtaking the outflows of investment and financing activities

1 Calculated as Net Debt plus Cash, bank deposits and derivative financial instruments (€81M), excluding effects of hedging on yen denominated debt, accrued interest and bank overdrafts | 2 Includes loans (8.9%), Transemel's debt (0.3%) and leasing (0.2%)

SHARE PRICE & SHAREHOLDER RETURN

Share price evolution mostly in line with the performance of PSI-20

Hold recommendations 40.0% 18.3pp 2019: 58.3% Buy recommendations 60.0% 35.0pp 2019: 25.0% Upside/Downside (+/-) 17.5% 15.7pp 2019: 1.8% Average Price target 2019: €2.77 €2.78 €0.01 (0.4%)

3. 2018 -21 Strategic Plan execution & Outlook

STRATEGIC PLAN EXECUTION

Despite a challenging context, in 2020 REN was able to deliver according to the 2018-21 strategic guidelines

Strategic guidelines 2018-21

Key achievements during 2020

Operational excellence and core business consolidation

• Maintenance of high service quality levels, with an average of 0.26 min of electricity interruption time and 99.83% natural gas combined availability rate during 2018-20
• Ongoing support to the execution of the energy transition targets, particularly, the promotion of the connection of additional renewable energy generation sources to the grid

Disciplined growth

Focus on Transemel's integration, a Chilean transmission company acquired in 2019 for US\$ 168.6M, while ensuring the development and conclusion of important expansion projects (e.g., Parinacota substation 220kV and Duqueco substation 220kV)

Solid financials

• Maintenance of credit metrics consistent with an investment grade credit rating in all three major rating agencies – Moody's, Fitch and S&P
• Delivery on all business plan targets, surpassing domestic capex targets for two consecutive years

COVID-19 with limited impact on REN's overall financial performance, despite some delays in investment execution (expected to be recovered during 2021)

STRATEGIC PLAN TARGETS

REN has successfully met the 2018-21 Business Plan targets

At least, average results during the period met the BP targets

OUTLOOK

Outlook for 2021 focused on COVID-19 recovery and Transemel integration, with more clarity to be provided by the new business plan

Domestic business

• Delays on capex and transfers to RAB due to the COVID-19 pandemic expected to be reversed in 2021
• Electricity tariff deviations stock increase to €33.5M driven by the pandemic expected to be recovered by 2022 as per ERSE's tariff code

International footprint

In the short term, focus on Transemel's integration process

Interests and taxes

• Financial costs expected to remain relatively stable in the following year
• Conclusion of certification process for green bonds, providing new financing opportunities

Strategy

Strategic plan revision for 2021-24 to be announced in the 2nd quarter

4. Shaping a sustainable future

ESG INITIATIVES

Several initiatives developed to address UN's Sustainable Development Goals, some already with major achievements

UN's Sustainable Development Goals

Initiatives/ achievements

• Gender Equality | 27% of women in 1st and 2nd line management positions
• Training | 25,325 hours of training for employees (36.44 h/employee)
• Bloomberg Gender Equality Index | REN included in 2021
• "Reforestation program" | Over 1M indigenous trees planted since 2010
• UN Business Ambition -1.5º | REN was one of the first companies in Portugal to sign this commitment

Community

protection

Environmental

• AGIR Award | >6,500 people directly benefited from awarded projects since 2014 (editions dedicated to fighting poverty, unemployment and social exclusion)
• REN Award | 28 applications received in the 25th edition of the award distinguishing the best energy Master and Doctoral theses in Portugal
• SHARE Program | 555h of corporate volunteering initiatives

Governance and ethics

5	17 PARTNE
	8

• CEO Guide to Human Rights BCSD Portugal | Agreement in defense of human rights and improving people's living conditions
• Excellent Performance | REN code of conduct | APEE awards

Average¹ BBB/ [AAA+, CCC] International ESG scores Top quartile¹ B / [A+, D-]

Strong 60.1/ [0-100]

ENERGY TRANSITION includes gas

Hydrogen-ready policy sets the gas network as the future national green gas backbone as set in the 62/2020 Decree-Law

Kick started with National Hydrogen Strategy

IPCEI¹ call of interest issued by the Portuguese Government selected 32 candidate projects out of 72 for a possible application. These projects cover multiple industrial areas for hydrogen in the energy transition covering:

• The value chain renewable energy production and storage, hydrogen production, distribution, transport, storage, commercialization and export built on Portuguese solar competitive advantage, and new business models.
• Production of value-added equipment for hydrogen projects cost efficiency in cooperation with multiple international companies with focus on Portugal.

A collaborative laboratory is under development to support production technologies to allow gains to scale along the hydrogen value chain.

REN is developing and adapting its own infrastructure while providing technical cooperation to projects for network hydrogen injection. Pressure is building up as the Portuguese Government has launched a call for POSEUR-01- 2020-19 with 40 M€ budget for renewables gases production support ending in April and schedule to start production until 2023.

REN actions

+20 companies, institutes and universities already involved in Hylab an hydrogen R&D cluster with labs in Sines Lisbon and Porto with REN as a founding member.

Innovation fund application

was delivered to develop and refurbish the existing high pressure network and equipment for hydrogen capability together with and underground storage project to deliver development.

Cooperation with the major national projects as infrastructure facilitator.

5. Closing remarks

CLOSING REMARKS

Core businesses remained resilient despite COVID-19, while gains deprivation came attached to regulatory changes and CESE increments

This past year was unarguably peculiar, the consequences caused by the pandemic both on the economy and, above all, on public health were devastating. Still, REN ensured the safety of its employees whilst it helped the community through donations. Regardless of the challenges, REN's success is visible in the high-quality services provided and commitment to its part in society.

EBITDA was positively influenced by international exposure. Namely, the inclusion of Transemel and solid performance from Electrogas. The focus and discipline that define REN remained preserved and a lower cost of debt was attained. However, its performance has deteriorated, not only due to a lower return on assets from gas, imposed by the regulatory framework of 2020-23, as well as the CESE contribution, which led the company to pay a total of €180M, in the last 7 years.

The certification to issue "Green Bonds" was concluded and REN will be able to tap the market in the second quarter of 2021. This is an important step in driving forward REN' sustainable development goals, keeping its rating and a very conservative funding structure.

The Board of Directors will propose, at the General Shareholders' Meeting on April 23, the payment of a dividend of 17.1 cents per share, in line with previous years and with REN's current dividend policy.

On May 14, REN will host its Capital Markets Day, where the Board of Directors will present the new business plan 2021-24. In a scenario in which the energy transition is increasingly important, REN will maintain its focus delivering a stellar quality of service as well as address the challenges coming from the changing energy environment.

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

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