REN-Redes Energeticas Nacionais

Investor Presentation • May 20, 2022

Results Presentation REN 1Q22

20th May 2022

AGENDA

1. Overview of the period

2. Business performance

3. Closing remarks

1. Overview of the period

KEY MESSAGES 1Q22

EBITDA grew 3.5% YoY to €118.4M, reflecting the positive performance of both domestic and international operations.

Domestic EBITDA improvement driven by: (1) the positive impact from TOTEX revenues¹ (+€5.1M); (2) the increase in Opex Revenues (+€1.2M); (3) higher remuneration from RAB (+€0.7M). However, these were offset by lower regulated incentives in the electricity business (-€4.4M) and higher core opex (+€1.7M), due to higher electricity costs.

Positive international business contribution, with EBITDA growing +€2.1M, with Transemel representing +€1.2M.

Net Profit improved to €6.0M (an increase of 32.6% versus 1Q21), mostly due to EBIT improvement (+€2.0M) and better Financial Results (+€1.3M), partially offset by higher taxes (+€0.9M) and higher levy (+€0.9M), following the increase in regulated asset base. 1Q still impacted by full amount of yearly energy sector levy.

Capex decreased €4.5M to €27.3M (vs €31.8M in 1Q21). Transfers to RAB were down €3.7M vs 1Q21, mostly driven by the electricity and gas transmission businesses (which decreased €4.1M), partially offset by the increase in Natural Gas Distribution (+€0.4M).

Renewable energy sources (RES) reached 48.8% of total supply (approx.-29.9pp than in 1Q21), due to the reduced availability of renewable energy, partially attributed to the severe drought. Electricity consumption increased by 1.3% whilst natural gas consumption grew by 6.6%.

High quality of service delivered during the first three months of the year. The level of energy transmission losses decreased relatively to the previous year and the gas combined availability rate remained at full capacity.

1 Includes RAB remuneration and amortizations, as well as opex recovery in electricity transmission activity. This comes as a result of the new remuneration model based on Totex, introduced in 2022, for the Electricity Transmission activity, under which REN's Opex and Capex is remunerated through a fixed annual amount defined by the regulator for the entire regulatory period, from 2022 to 2025.

SECTOR OVERVIEW

Commitment to hydrogen infrastructure and energy transition

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. REN created a Task Force (TF H2REN) to identify and carry out the required activities and investments to ensure that its gas transmission, storage and Hydrogen distribution facilities will be compliant with natural gas & hydrogen blends up to 10% until 2023.

Exceptional setting of electricity tariffs from 1 July 2022

• According to ERSE this exceptional review of tariffs in 2022 is essential to ensure greater tariff stability in the face of the current context of high volatility and high price in the wholesale electricity market. This review intents to mitigate the energy cost impact in consumer bills, through the reduction of the Network Access tariffs.
• This reduction is made possible by the early return to consumers of the higher than expected returns from electricity production under the special regime (PRE) and with the Power Purchase agreement still under operation, as well as additional revenues from the greenhouse gas emission allowance auctions'.
• ERSE submitted to the Tariff Council (TC) the confidential documentation supporting its proposal for tariffs. The TC must issue an opinion on the proposal within 3 weeks, and it is up to ERS, to publish its final decision until 15th June. On 1st July, tariffs for the next six months will come into effect.

Proposal for natural gas tariffs 2022/2023

• ERSE submitted to the Tariff Council (TC) the confidential documentation supporting its proposal for tariffs and gas prices. The TC must issue an opinion on the proposal within 30 days, and it is up to ERSE to publish its final decision until 1 st June. On October 1 st , tariffs for the next year (which runs from 1 st October 2022 to 30th September 2023) come into effect.
• As this is a regulatory intermediary year for gas, there are no relevant regulatory issues for REN.

Energy Transition and renewable gas REN applied to the Last Phase of the Portuguese Recovery and Resilience Plan (PRR) with the "H² Green Valley" Agenda, for the development of a Green H² ecosystem in Sines with relevant partners, Dianagás, Bosch, Hylab, INL and IST, just to name a few. This project focuses on pure H² and could be complemented by an integrated storage to improve flexibility for H2 producers and consumers. The Final proposal was submitted on the 13th April and a decision is expected in 2Q.

NEW ELECTRICITY REGULATION

For the regulatory period 2022-2025, ERSE established a TOTEX model – a revenue cap applied to total controllable costs

Overview			Detail
1 5 2 2- 2 0 2 es u n e v e R y cit ctri e El	Revenue Cap for TOTEX (CAPEX + OPEX)	 REN recognizes in the income statement the annual rent fixed by the regulator for the entire regulatory period, which aims to remunerate both the OPEX and CAPEX  The rent value is updated annually according to its cost drivers namely the RoR. An efficiency factor is set for new investments and Opex  Accounting recognition methodology was discussed with REN's external auditor	The annual remuneration starts at 264.3M€ and is updated according to: RoR indexed to 10Y PGB yields (including 2022)  Annual change of Inflation2  (from 2023 onwards) Annual efficiency factor of 1.5% (from 2023 onwards)   Volume drivers (Km of network and power producer connections; including 2022)
	+ Efficiency Sharing Mechanism	 The mechanism application is only closed at the end of the regulatory period.  In the next regulatory cycle, REN may share gains or losses with consumers  During the period, REN may recognize contingent assets or liabilities in order to reflect potential gains or losses as a result of the mechanism  No efficiencies have been recorded into REN's accounts under this mechanism. The best estimate should be registered near the end of the regulatory cycle	Efficiencies are shared progressively (between 0%, 50% and 100%) and are measured against the reference return set by ERSE 100% 100% 50% 50% 0% 0% +1.50% -1.50% -0.625% +0.625% Efficiencies vs reference by ERSE return set
	+ Incentives	 New Incentive to the Improvement of the TSO Technical Performance (IMDT) based on performance metrics  Incentive ranges between -20M€ and 20M€	Equivalent Interruption Time   Network and equipment availability From 2022 onwards capacity targets  Interconnection

1. Excludes System Management activity 2. Annual change of Internal Basic Wholesale Price Index (annual change ending at 2nd quarter of year n-1);

2. Business performance

OPERATIONAL HIGHLIGHTS

Quality of service remained high, despite the lower availability of renewables and the increasing importance of gas

Electricity	Consumption	Energy transmission losses	Line length
	0.2 TWh 13.2TWh (1.3%)	1.8% 0.5pp	334km 9,366km (3.7%)
	1Q21: 13.1TWh	1Q21: 2.3%	1Q21: 9,032km
	Renewables in consumption supply	Average interruption time	Combined availability rate
	48.8% 29.9pp	0.06min 0.06min	99.1% 0.3pp
	1Q21: 78.7%	1Q21: 0.00min	1Q21: 99.4%
Gas Transmission	Consumption	Combined availability rate	Line length
	1.0TWh 16.0TWh (6.6%)	100.0% 0.0pp	0km 1,375km (0.0%)
	1Q21: 15.0TWh	1Q21: 100.0%	1Q21: 1,375km
Gas Distribution	Gas distributed	Emergency situations with response time up to 60min	Line length
	0.4TWh 1.9TWh (17.1%)	98.6% 0.3pp	220km 6,148km (3.7%)
	1Q21: 2.2TWh	1Q21: 98.3%	1Q21: 5,928km

FINANCIAL HIGHLIGHTS

Increase in EBITDA driven by assets and opex in domestic business and by international business performance

EBITDA evolution breakdown €M

1 Includes electricity regulatory incentives (in 1Q21 €6.3M from the Incentive for the Rationalization of Economic Investments, and in 1Q22 €1.9M 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 %

1Q22 RESULTS 10

Upward trend in 10Y Treasury bond yields matching the yield in March 2020

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

Transfers to RAB and CAPEX decreased YoY, as last year REN recovered delayed projects

Transfers to RAB €M

Key highlights

Electricity

Main investment projects:

• 150kV connection between the Fernão Ferro Trafaria substations
• Remodeling of the 400kV Palmela Sines 1 and Palmela Sines 2 lines, as well as the remodeling of 400kV Alcochete Fanhões line

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)
• Expansion to new industrial zones under preparation

Increase in average electricity RAB triggered by the new regulatory model which defines a fixed RAB for the entire regulatory period

Average RAB evolution €M

RAB remuneration increased across all businesses, mostly driven by the increase in the rate of return

Return on RAB evolution breakdown €M

Increase in Return on RAB justified by a higher RoR of 4.79% (vs 4.50%), despite smaller asset base (by €27.4M to a total of €890.4M)

Higher return on RAB attributed to a higher rate of return (from 4.70% to 4.99%) and higher asset base (+€3.3M to a total of €476.1M)

0.34

5.56

€40.2M)

higher asset base (by €2.4M to

5.94

€+0.38M (+6.9%)

0.04

OPEX climbed 6.1% YoY, with core OPEX rising 6.5%

Core OPEX¹ evolution €M

Key highlights

Core external costs

• Electricity costs in LNG terminal (+2.7M€) are still a major part

Non-core costs

• Pass-through costs (costs accepted in the tariff) increased by €0.4M, of which €1.0M correspond to the acquisition of operation gas related to the beginning of the Mibgás organized gas market in Portugal, +€1.6M in subsoil occupation levies, and -€1.8M in costs with crossborder and system services costs

INTERNATIONAL BUSINESS

Strong consolidation of the Chilean businesses

EBITDA increased YoY mainly driven by higher revenues and

EBITDA increased YoY, driven by higher revenues (higher tariff)

(49.6%)

Positive performance in Financial Results, reflecting favorable FX rates despite slight increase in average cost of debt

Increase vs 1Q21 reflecting the increase in EBT (+€3.3M).

Net Profit increased as a result of higher EBITDA and financial results, partially offset by higher depreciations, taxes and CESE

Net profit evolution breakdown €M Key highlights

• The increase in EBITDA (+€4.0M), reflecting the positive contributions from both international (€2.1M) and domestic businesses
• The positive effect of €1.3M from Financial Results, as a consequence of better financial conditions, lower net debt and exchange rate differences
• Higher CESE impact (Δ€0.9M), reflecting the evolution of the asset base

Net Debt enhancement attributed to operating cash flow and tariff deviations surpassing outflows of investment and financing activities

1 Calculated as Net Debt plus Cash, bank deposits and derivative financial instruments (€530M), excluding effects of hedging on yen denominated debt, accrued interest and bank overdrafts | 2 Includes loans (1.7%) and leasing (0.2%)

SHARE PRICE & SHAREHOLDER RETURN

REN's share ended Q1 with a TSR of 12% strikingly above sector

Analyst recommendations¹

3. Closing remarks

CLOSING REMARKS

Strong commitment to provide a quality service, achieve financial stability and offer sustainable returns

EBITDA of €118.4M an increase of €4.0M YoY (+3.5%), mainly due to the positive impact from TOTEX revenues, higher remuneration from RAB and international business performance.

Net Profit reached €6.0M (+32.6%) partly attributed to the positive impact from EBIT and Financial results, despite these being partially offset by higher taxes and higher levy.

Remarkable Net Debt progress as a result of higher operating cash flow and tariff deviations coupled with stable average cost of debt.

Capex and Transfers to RAB slowed down YoY, as last year REN recovered delayed projects.

The payment of a dividend of 15.4 cents per share was approved with majority at the General Shareholder's meeting on the 28th of April and started to be payed on the 19th of May.

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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Madalena Garrido – Head of IR Alexandra Martins José Farinha Telma Mendes

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