Q2 2026 CEZ AS Earnings Call

August 11, 2026

Speaker #1: You are not allowed to unmute. To raise your hand, press *. This meeting is being recorded.

Operator: You are not allowed to unmute. To raise your hand, press star 5. This meeting is being recorded.

Speaker #3: Good afternoon or good morning, everyone, and welcome to our regular quarterly call.

Barbara Seidlová: Good afternoon or good morning, everyone, and welcome to our regular quarterly call.

Barbara Seidlova: Good afternoon or good morning, everyone, and welcome to our regular quarterly call.

Speaker #1: This meeting is being transcribed.

Operator: This meeting is being transcribed.

Speaker #3: It's my pleasure to welcome Martin Novak, CFO, and Pavel Tsirani, Head of Strategy and Sales. I'm now handing over to Martin to walk you through the presentation.

Barbara Seidlová: My pleasure to welcome Martin Novák, CFO, and Pavel Cyrani, Head of Strategy and Sales and Strategy. I am handing over to Martin to walk you through the presentation.

Barbara Seidlova: My pleasure to welcome Martin Novák, CFO, and Pavel Cyrani, Head of Sales and Strategy. I am handing over to Martin to walk you through the presentation.

Speaker #4: So good afternoon, good morning. Let's start on slide 3 with financial results overview. As you can see, our sales or operating revenue is 5% lower mainly due to the main factor, that is actually influencing all this presentation or entire presentation, which are lower power prices.

Martin Novák: Good afternoon, good morning. Let's start on slide three with the financial results overview. As you can see, our sales or operating revenue is 5% lower, mainly due to the main factor that is actually influencing all this presentation or entire presentation, which are the whole power prices. EBITDA down by 20% to CZK 59 billion, and we will go through a higher level of detail on next slide. Net income up by 10%, from CZK 16.5 billion to CZK 18.1 billion, mainly caused by the fact that we are not subject to windfall tax that actually is not in place. It ended its existence on 31 December 2025. Operating cash flow, CZK 26 billion higher or 55%, and the CapEx 30% higher. Our net debt is about 9% higher, so we are getting close to CZK 200 billion.

Martin Novak: Good afternoon, good morning. Let's start on slide three with the financial results overview. As you can see, our sales or operating revenue is 5% lower, mainly due to the main factor that is actually influencing all this presentation or entire presentation, which are the whole power prices. EBITDA down by 20% to CZK 59 billion, and we will go through a higher level of detail on next slide. Net income up by 10%, from CZK 16.5 billion to CZK 18.1 billion, mainly caused by the fact that we are not subject to windfall tax that actually is not in place. It ended its existence on 31 December 2025. Operating cash flow, CZK 26 billion higher or 55%, and the CapEx 30% higher. Our net debt is about 9% higher, so we are getting close to CZK 200 billion.

Speaker #4: EBITDA down by 20% to 59 billion shake rounds, and we'll go through higher level of detail on next slide. Net income up by 10% from 16.5 to 18.1 billion shake rounds, mainly caused by the fact that we are not subject to windfall tax that actually is not in place; it was it ended its existence in on 31st of December 2025.

Speaker #4: Operating cash flow 26 billion higher or 55%, and CAPEX 30% higher. Our net debt is about 9% higher, so we are getting close to 200 billion shake rounds.

Speaker #4: Slide number 4 explains the difference between first half 2025 and first half 2026. EBITDA as I said by far the most significant factor influencing this variance is generation segment and mainly decreased power prices.

Martin Novák: Slide number four explains the difference between H1 2025 and H1 2026. EBITDA, as I said, by far the most significant factor influencing this variance is generation segment and mainly decreased power prices, which actually have a negative effect of CZK 114.4 billion. We also had lower profit from trading and the revaluation of temporary revaluation of derivatives, which in total is lower by CZK 2.7 billion versus H1 2025. As you will see later, we are actually planning to produce 9% more power from coal compared to 2025, and therefore, despite lower coal prices, the volume is actually making up, and we can see CZK 0.5 billion increase year on year. Our distribution segment, both electricity and gas, are actually positive. The variance is CZK 300 million on electricity distribution, which is negatively impacted by correction factors from past years.

Martin Novak: Slide number four explains the difference between H1 2025 and H1 2026. EBITDA, as I said, by far the most significant factor influencing this variance is generation segment and mainly decreased power prices, which actually have a negative effect of CZK 114.4 billion. We also had lower profit from trading and the revaluation of temporary revaluation of derivatives, which in total is lower by CZK 2.7 billion versus H1 2025. As you will see later, we are actually planning to produce 9% more power from coal compared to 2025, and therefore, despite lower coal prices, the volume is actually making up, and we can see CZK 0.5 billion increase year on year. Our distribution segment, both electricity and gas, are actually positive. The variance is CZK 300 million on electricity distribution, which is negatively impacted by correction factors from past years.

Speaker #4: Which actually are have a negative effect of 11.4 billion shake rounds we also had lower profit from trading and the revaluation of temporary revaluation of derivatives which in total is lower by 2.7 billion shake rounds versus first half of 2025.

Speaker #4: As you will see later, we are actually planning to produce 9% more power from coal compared to 2025 and therefore despite lower coal prices the volume is actually making up and we can see half a billion shake round increase year on year.

Speaker #4: Our distribution segment both electricity and gas are actually positive. The variance is 300 million on electricity distribution which is negatively impacted by correction factors from past years.

Speaker #4: On normalized EBITDA without correction factors we are doing much better as you will see later on. And gas distribution 1.7 billion shake rounds positive year on year half a billion of which is actually attributable to acquisition of gas distribution company that is covering south of Bohemia.

Martin Novák: On a normalized EBITDA without correction factors, we are doing much better as you will see later on. Gas distribution, CZK 1.7 billion positive year on year. CZK 0.5 billion of which is actually attributable to acquisition of gas distribution company that is covering south of Bohemia. GasNet, which is the company that we own since, I think, September 2024, also has an improvement mainly to higher investments or CapEx and the increase in like sales segment down by CZK 2.4 billion, partly due to lower margins both in the retail and the wholesale customers or large customers. With declining power prices, our margins are getting back to standard levels. We also had a few delays on our projects abroad, which causes a variance of about CZK 700 million. This is how we get to CZK 59 billion.

Martin Novak: On a normalized EBITDA without correction factors, we are doing much better as you will see later on. Gas distribution, CZK 1.7 billion positive year on year. CZK 0.5 billion of which is actually attributable to acquisition of gas distribution company that is covering south of Bohemia. GasNet, which is the company that we own since, I think, September 2024, also has an improvement mainly to higher investments or CapEx and the increase in like sales segment down by CZK 2.4 billion, partly due to lower margins both in the retail and the wholesale customers or large customers. With declining power prices, our margins are getting back to standard levels. We also had a few delays on our projects abroad, which causes a variance of about CZK 700 million. This is how we get to CZK 59 billion.

Speaker #4: Gas net which is the company that we own since I think September 2024 also has an improvement mainly to higher investments or CAPEX and increase in VAC.

Speaker #4: Sales segment down by $2.4 billion, shake rounds partly due to lower margins both in retail and wholesale customers, or large customers. With declining power prices, our margins are getting back to standard levels.

Speaker #4: And we also had a few delays on our projects abroad, which caused a variance of about 700 million Czech crowns. So this is how we get to 59 billion.

Speaker #4: On next slide we can actually see the detail of net income basically most of the items like depreciation asset impairments other income expenses are fairly similar to previous year and there is an explanation on the slide.

Martin Novák: On next slide, we can actually see the details of net income. Basically, most of the items like depreciation, asset impairments, other income expenses are fairly similar to previous year, and there is an explanation on the slide. What is definitely worth mentioning is income tax. Last year, income tax was about CZK 23.1 billion. Now it is only CZK 5.5 billion, and the biggest difference is attributable not to lower pretax income, but to the fact that we are no more paying windfall profit tax. That's why actually, despite 20% decline in EBITDA, our net income is 10% higher and is achieving CZK 18.1 billion. On slide number 6, you can see actually total operating results, that I will skip. Those are volumetric numbers, if you are interested in those. Then important slide number 7.

Martin Novak: On next slide, we can actually see the details of net income. Basically, most of the items like depreciation, asset impairments, other income expenses are fairly similar to previous year, and there is an explanation on the slide. What is definitely worth mentioning is income tax. Last year, income tax was about CZK 23.1 billion. Now it is only CZK 5.5 billion, and the biggest difference is attributable not to lower pretax income, but to the fact that we are no more paying windfall profit tax. That's why actually, despite 20% decline in EBITDA, our net income is 10% higher and is achieving CZK 18.1 billion. On slide number 6, you can see actually total operating results, that I will skip. Those are volumetric numbers, if you are interested in those. Then important slide number 7.

Speaker #4: What is definitely worth mentioning is income tax. Last last year income tax was about 23.1 billion shake rounds. Now it is only 5.5 and the biggest difference is attributable not to lower pre-tax income but to to the fact that we are no more paying windfall windfall profit tax.

Speaker #4: So that's why actually despite 20% decline in EBITDA EBITDA our net income is 10% higher and is achieving 18.1 billion shake rounds. On slide number 6 you can see actually total operating results that I will skip.

Speaker #4: You know there those are volumetric numbers if you are interested in those. And the important slide number 7 actually taking into consideration few positive factors few negative factors we decided to shift our guidance on both EBITDA and also adjusted net income upwards.

Martin Novák: Actually taking into consideration a few positive factors, a few negative factors, we decided to shift our guidance on both EBITDA and also adjusted net income upwards. Original guidance from 14 May was CZK 107 to 112 billion. Now actually, we moved this range by CZK 2 billion upwards, so new guidance is actually CZK 109 to 114 billion. Adjusted net income CZK 30 to 34 billion was original estimate. Now it is actually CZK 31 to 35 billion. Main positive drivers is higher EBITDA of our distribution segment. Continuous crisis in Persian Gulf, which resulted into higher power prices and allowed us even to produce more power in our coal plants and gas plant. Then we have higher generation in nuclear plants than originally anticipated.

Martin Novak: Actually taking into consideration a few positive factors, a few negative factors, we decided to shift our guidance on both EBITDA and also adjusted net income upwards. Original guidance from 14 May was CZK 107 to 112 billion. Now actually, we moved this range by CZK 2 billion upwards, so new guidance is actually CZK 109 to 114 billion. Adjusted net income CZK 30 to 34 billion was original estimate. Now it is actually CZK 31 to 35 billion. Main positive drivers is higher EBITDA of our distribution segment. Continuous crisis in Persian Gulf, which resulted into higher power prices and allowed us even to produce more power in our coal plants and gas plant. Then we have higher generation in nuclear plants than originally anticipated.

Speaker #4: So original guidance from May 14th was 107 to 112 billion shake rounds. Now actually we we moved this range by 2 billion upwards. So new guidance is actually 109 to 114 billion shake rounds.

Speaker #4: Adjusted net income 30 to 34 billion was original estimate. Now it is actually 31 to 35. Main positive drivers is higher EBITDA of our distribution segment.

Speaker #4: Continuous crisis in Persian Gulf which resulted into higher power prices and allowed us even to produce more power. In our coal plants and gas plant and then we have higher generation in nuclear plants that then originally anticipated.

Speaker #4: Negative front we have lower profits from commodity trading and lower EBITDA in elevion group due to the effects that I already described mainly you know moving some projects further.

Martin Novák: Negative front, we have lower profits from commodity trading and lower EBITDA in Elevion Group due to the effect that I already described, mainly moving some projects further. There are important selected assumptions of this current forecast in the Czech Republic. So we assume that we will generate 45 to 47 terawatt-hours. Average achieved prices will be EUR 106 to 110 per megawatt-hour, and average purchase price of carbon credits will be EUR 77 to 79 per ton. When we look at, actually, next slide, I would touch on newly established subsidiary of CEZ, which name is ČEZ Energy. This is something we discussed on a previous call and also did a lot of publicity after shareholder meeting. On 1 June, actually, the shareholder meeting approved the mandate for the board of directors to optimize the ownership structure.

Martin Novak: Negative front, we have lower profits from commodity trading and lower EBITDA in Elevion Group due to the effect that I already described, mainly moving some projects further. There are important selected assumptions of this current forecast in the Czech Republic. So we assume that we will generate 45 to 47 terawatt-hours. Average achieved prices will be EUR 106 to 110 per megawatt-hour, and average purchase price of carbon credits will be EUR 77 to 79 per ton. When we look at, actually, next slide, I would touch on newly established subsidiary of CEZ, which name is ČEZ Energy. This is something we discussed on a previous call and also did a lot of publicity after shareholder meeting. On 1 June, actually, the shareholder meeting approved the mandate for the board of directors to optimize the ownership structure.

Speaker #4: There are important selective assumptions of the current forecast in the Czech Republic. So we assume that we will generate 45 to 47 terawatt hours.

Speaker #4: Average achieved prices will be 106 to 110 per mega Euro per megawatt hour and average purchase price of carbon credits would be 77 to 79 euros per ton.

Speaker #4: When we look actually at next slide I will touch on newly established subsidiary of CHES which name is CHES Energy. Now this is something we discussed on previous call and also did a lot of publicity after shareholder meeting.

Speaker #4: On June 1 actually the shareholder meeting approved the mandate for the board to directors to optimize the ownership structure. We actually were providing mandate to transfer CHES group customer segment into CHES Energy.

Martin Novák: We actually were providing mandate to transfer CEZ Group customer segment into CEZ Energy. Those companies that are actually considered is actually both power and gas distribution, which is kind of a decided fact. Those will be a cornerstone of CEZ Energy. Retail business in the Czech Republic, ČEZ Prodej, ČEZ ESCO services in the Czech Republic and Elevion in Germany. Also trading both of power and natural gas and telecommunication services. Not necessarily all of those will get transferred, but definitely the largest companies will. Then we got a mandate to actually dispose minority stake up to 49% actually of just energy, either through direct sale or through IPO in the future. The timeline is such that all the legal work, meaning injecting actually the companies into transferring the ownership from CEZ to CEZ Energy, should be finished by the end of Q1 2027.

Martin Novak: We actually were providing mandate to transfer CEZ Group customer segment into CEZ Energy. Those companies that are actually considered is actually both power and gas distribution, which is kind of a decided fact. Those will be a cornerstone of CEZ Energy. Retail business in the Czech Republic, ČEZ Prodej, ČEZ ESCO services in the Czech Republic and Elevion in Germany. Also trading both of power and natural gas and telecommunication services. Not necessarily all of those will get transferred, but definitely the largest companies will. Then we got a mandate to actually dispose minority stake up to 49% actually of just energy, either through direct sale or through IPO in the future. The timeline is such that all the legal work, meaning injecting actually the companies into transferring the ownership from CEZ to CEZ Energy, should be finished by the end of Q1 2027.

Speaker #4: And those companies that are actually considered is actually both power and gas distribution which is kind of a decided fact. It those will be a cornerstone of CHES Energy.

Speaker #4: Then retail business in the Czech Republic CHES Prodej CHES ESCO services in the Czech Republic and Elevion in Germany. Also trading both of power and natural gas and telecommunication services.

Speaker #4: No not necessarily all of those will get transferred but definitely the the largest companies will. And then we got a mandate to actually dispose minority stake up to 49% actually of CHES Energy either through direct sale or through IPO.

Speaker #4: In the future the the timeline is such that all the legal work meaning injecting actually the companies into transferring the ownership from CHES to CHES Energy should be finished by the end of first quarter of 2027.

Speaker #4: Many of those transfers however will occur in 2026. So that's that's actually it on the same slide you actually have board of directors of the company that basically composes of four members of current board of CHES with Daniel Benesh being chairman of the board of directors.

Martin Novák: Many of those transfers, however, will occur in 2026. That's actually it. On the same slide, you actually have board of directors of the company that basically comprises of four members of current board of CEZ with Daniel Beneš being Chairman of the Board of Directors, Pavel Cyrani, Vice Chairman of the Board of Directors, myself and Ondřej Landa, members of the board. Pavel Cyrani is CEO of the company as he's heading actually sales segment and distribution segment currently in CEZ these days. Selected events in the past quarter, I think I can skip that. You can go through it. Those are interesting things.

Martin Novak: Many of those transfers, however, will occur in 2026. That's actually it. On the same slide, you actually have board of directors of the company that basically comprises of four members of current board of CEZ with Daniel Beneš being Chairman of the Board of Directors, Pavel Cyrani, Vice Chairman of the Board of Directors, myself and Ondřej Landa, members of the board. Pavel Cyrani is CEO of the company as he's heading actually sales segment and distribution segment currently in CEZ these days. Selected events in the past quarter, I think I can skip that. You can go through it. Those are interesting things.

Speaker #4: Pavel Cirani, Vice Chairman of the Board of Directors; myself and Ondřej Landa are members of the Board. And actually, Pavel Cirani is CEO of the company.

Speaker #4: As he's heading actually sales segment and distribution segment currently in CHES. These days. Selective events in the past quarter I think I can skip that.

Speaker #4: You can go through it. Those are interesting things. Maybe the one that's worth mentioning is actually Elevion group that acquired or signed an agreement to acquire 100% stake in Techem Solutions in Germany.

Martin Novák: Maybe the one that's worth mentioning is actually Elevion Group that acquired or signed an agreement to acquire 100% stake in Techem Solutions in Germany, which is a company that should significantly increase the size of Elevion and actually switch it to a company that has more assets, is more asset heavy than it was by now. It's operating almost 2,300 energy facilities around Germany, mainly heating systems in municipalities. Now let's switch to generation mining segment. On slide 11, you can see actually our generation mining in total is down by CZK 14.5 billion or 31%, with an effect, clear effect of power prices actually influencing all those parts of generation segment.

Martin Novak: Maybe the one that's worth mentioning is actually Elevion Group that acquired or signed an agreement to acquire 100% stake in Techem Solutions in Germany, which is a company that should significantly increase the size of Elevion and actually switch it to a company that has more assets, is more asset heavy than it was by now. It's operating almost 2,300 energy facilities around Germany, mainly heating systems in municipalities. Now let's switch to generation mining segment. On slide 11, you can see actually our generation mining in total is down by CZK 14.5 billion or 31%, with an effect, clear effect of power prices actually influencing all those parts of generation segment.

Speaker #4: Which is a company that should significantly increase the size of Elevion and actually switch it to company that has more assets is more asset heavy than than it was by now.

Speaker #4: It's operating almost 2,300 energy facilities around Germany, mainly heating systems in municipalities. So now let's switch to the Generation Mining segment. On slide 11, you can see actually our Generation Mining in total is down by 14.5 billion.

Speaker #4: So or or 31%. With any effect clear effect of power prices actually influencing all those parts of generation segment. What is worse mentioning despite the fact that we produced significant amount of power in coal basically very similar to last year EBITDA is down by 65% to 1.4 billion only compared to 4 billion for the same period in 2025.

Martin Novák: What is worth mentioning, despite the fact that we produced a significant amount of power in coal, basically very similar to last year, EBITDA is down by 65% to CZK 1.4 billion only, compared to CZK 4 billion for the same period in 2025. So despite the fact that now actually coal plants are profitable due to events in March with power prices going up and carbon credits somewhat down, it looks like it's a short-term issue that will last through 2027, 2028, where we were able to lock the margin, but towards the end of decade, those units will not be profitable. This is generation segment and mining segment. On the next slide, you can actually see our nuclear and renewable generation in graphical format.

Martin Novak: What is worth mentioning, despite the fact that we produced a significant amount of power in coal, basically very similar to last year, EBITDA is down by 65% to CZK 1.4 billion only, compared to CZK 4 billion for the same period in 2025. So despite the fact that now actually coal plants are profitable due to events in March with power prices going up and carbon credits somewhat down, it looks like it's a short-term issue that will last through 2027, 2028, where we were able to lock the margin, but towards the end of decade, those units will not be profitable. This is generation segment and mining segment. On the next slide, you can actually see our nuclear and renewable generation in graphical format.

Speaker #4: So, despite the fact that now actually coal plants are profitable due to events in March, with power prices going up and carbon credits somewhat down, it looks like it's a short-term issue that will last through 2027–28, where we were able to lock the margin. But towards the end of the decade, those units will not be profitable.

Speaker #4: So this is generation segment and mining segment. On next slide you can actually see our nuclear and renewable generation in graphical format. So on nuclear facilities we generated 15.3 terawatt hour which is exactly half of how much it should be for the full year.

Martin Novák: So on nuclear facilities, we generated 15.3 terawatt-hours, which is exactly half of how much it should be for the full year, 30.6, which is a bit more than we originally anticipated. Renewables, similar amount actually of power generated as in H1 2025, and actually a bit higher expectation compared to 2025. So we should reach 3.6 terawatt-hours of renewable power. Next slide, you can see electricity generation from coal and natural gas. As I said, we produced actually 5% more power from coal in the Czech Republic, 7.6 terawatt-hours, and generation from natural gas is also up to 1.7. So in total, fossil fuel generation is up by 6%, again, due to very positive situation on the power markets. On full year, we will increase our generation in coal by 9% and natural gas by 87%, so totally by 18% to 18.8 terawatt-hours.

Martin Novak: So on nuclear facilities, we generated 15.3 terawatt-hours, which is exactly half of how much it should be for the full year, 30.6, which is a bit more than we originally anticipated. Renewables, similar amount actually of power generated as in H1 2025, and actually a bit higher expectation compared to 2025. So we should reach 3.6 terawatt-hours of renewable power. Next slide, you can see electricity generation from coal and natural gas. As I said, we produced actually 5% more power from coal in the Czech Republic, 7.6 terawatt-hours, and generation from natural gas is also up to 1.7. So in total, fossil fuel generation is up by 6%, again, due to very positive situation on the power markets. On full year, we will increase our generation in coal by 9% and natural gas by 87%, so totally by 18% to 18.8 terawatt-hours.

Speaker #4: 30.6 which is a bit more than we originally anticipated. And renewables similar amount actually of power generated as in first half 2025. And actually a bit higher expectation compared to 2025.

Speaker #4: So we should reach 3.6 terawatt hours of the renewable power. Next slide you can see electricity generation from coal and natural gas. As I said we produced actually 5% more power from coal in the Czech Republic.

Speaker #4: 7.6 terawatt hours, and generation from natural gas is also up to 1.7. So, in total, fossil fuel generation is up by 6%. Again, due to a very, very positive situation on the power markets.

Speaker #4: On full year we will increase our generation in coal by 9% and natural gas by 87%. So totally by 18% to 18.8 terawatt hours.

Speaker #4: Important slide. Hedging of the power. For 2027 we are hedged at 76% average achieved price 88. As you know now actually the power prices are in Germany are around 106 or above 100.

Martin Novák: Important slide, hedging the power. For 2027, we are hedged at 76%, average hedge price EUR 88. As you know now, actually, the power prices in Germany are around EUR 106 or above EUR 100 definitely. So selling actually more will mean that our average hedge price will grow. We are still keeping some power unsold for the year when it starts, so there is a potential, if the power prices stay where they are, that our average hedge price would be higher. However, we will not be able to achieve 2026 price, which is somewhere between EUR 106 and EUR 110. This is our estimate. Then you can see also following years and the same for carbon credits, that in 2029 actually clearly prices of carbon credits are higher than prices of power that you are actually generating. Now that's all for this segment.

Martin Novak: Important slide, hedging the power. For 2027, we are hedged at 76%, average hedge price EUR 88. As you know now, actually, the power prices in Germany are around EUR 106 or above EUR 100 definitely. So selling actually more will mean that our average hedge price will grow. We are still keeping some power unsold for the year when it starts, so there is a potential, if the power prices stay where they are, that our average hedge price would be higher. However, we will not be able to achieve 2026 price, which is somewhere between EUR 106 and EUR 110. This is our estimate. Then you can see also following years and the same for carbon credits, that in 2029 actually clearly prices of carbon credits are higher than prices of power that you are actually generating. Now that's all for this segment.

Speaker #4: Definitely so selling actually more will mean that our average achieved price will grow. We are still keeping some power unsold for the year when it starts.

Speaker #4: So there is a potential if the power prices stay where they are that our average achieved price would be higher. However it will probably not be able to we will not be able to achieve 2026 price which is somewhere between 106 and 110.

Speaker #4: This is our estimate. Then you can see also following years and the same for carbon credits that in 2029 are actually clearly prices of carbon credits are higher than prices of of power that you are actually generating.

Speaker #4: So now that's all for this segment, and I will hand over to Pavel to guide you through distribution and sales.

Martin Novák: I will hand over to Pavel to guide you through distribution and sales.

Martin Novak: I will hand over to Pavel to guide you through distribution and sales.

Speaker #2: Thank you, Martin. I'll start with distribution. You see that the year-on-year result is at 2 billion, or a 10% increase. The underlying story is even better.

Pavel Cyrani: Thank you, Martin. I'll start with distribution. You see that year-on-year result is at CZK 2 billion or 10% increase. The underlying story is even better. The normalized EBITDA for electricity grew roughly CZK 2 billion or 15%, driven by investments and increased WACC, as we switched from one to the other regulatory period between last year and this year. On the gas side, the normalized EBITDA grew 25% or CZK 1.5 billion. It was partially driven by the acquisition of gas distribution. If we exclude that, there will be still an 18% growth for GasNet alone. So the numbers, we will see them fully in the coming years, which will not be as impacted by correction factors from two years ago. In terms of consumption growth, both gas and electricity consumption is growing. 3% for electricity, about 1.6% if you adjust it for weather.

Speaker #2: The normalized EBITDA for electricity grew roughly 2 billion or 15% driven by investments and increased VAC as we switched from one to the other regulatory period between last year and this year.

Speaker #2: On the gas side the normalized EBITDA grew 25% or 1.5 billion. the acquisition of gas distribution if we exclude that there will be still an 18% growth for gas net alone.

Speaker #2: So numbers we will see them fully in the coming years which will not be as impacted by correction factors from two years ago. In terms of consumption growth both gas and electricity consumption is is is growing.

Speaker #2: 3% for electricity about 1.6% if you adjust it for weather. On the gas side it's 8% overall but also about 3% or 2% is is climate adjusted on the comparable basis because part of the growth is driven by the acquisition of gas distribution.

Pavel Cyrani: On the gas side, it is 8% overall, but also about 3% or 2% is climate adjusted on the comparable basis because part of the growth is driven by the acquisition of gas distribution. But on both sides, 1.6% and 2% weather adjusted same base growth shows that there is recovery both in gas and electricity consumption. In terms of the sales segment, Martin Novák already commented the overall CZK 2.4 billion decrease year-on-year for the H1. It is to a large degree driven by the exceptional year of 2025. We have also included the comparison to 2024. I already mentioned it in the last quarter result discussion that we had together. If you look at the retail purchase per day and compare to 2024, there is a growth of CZK 2 billion.

Speaker #2: But on both sides 1.6 and 2% weather adjusted same base growth shows that there is recovery both in in gas and electricity consumption. In terms of the sales segment Martin already commented the overall 2.4 billion decrease year on year for the first half.

Speaker #2: It is to a large degree driven by the exceptional year of 2025. We've also included the comparison to 2024 and I already mentioned it in the last quarter result discussion that we had together.

Speaker #2: If you look at the retail purchase per day and compare it to 2024, there is a growth of $2 billion. And similarly, if you look at the commodity sales for the large industrials under ESCO companies, 2026 is roughly at the same level as 2024.

Pavel Cyrani: Similarly, if you look at the commodity sales for the large industrials under ESCO companies, the 2026 is roughly at the same level of 2024. This is where we stand today. I think we see the market overall normalizing and stabilizing, and we expect a steady development in the commodity business. In terms of the energy services, again, a topic that was already mentioned. We see stable development in energy solutions for buildings and industry, both in Czechia and abroad. Abroad, this year is negatively impacted in a delay in some of the green energy segment projects both in UK and then in terms of biogas facilities in Italy. Again, something that we see recovering in the coming next year and the coming years.

Speaker #2: So this is this is where we stand today. I think we see the the market overall normalizing and stabilizing and and we expect a kind of a steady development on these in in the commodity business.

Speaker #2: In terms of the energy services again a topic that was already mentioned we see stable development in energy solutions for buildings and industry both in Czechia and abroad in abroad these year is negatively impacted in delay in some of the green energy segment projects.

Speaker #2: Both in UK and then in terms of biogas facilities in Italy. But again something that we see recovering in in the coming next next year and and the coming years.

Speaker #2: In terms of the volumes of of supplied electricity and gas this is roughly the similar story to what we saw in the distributed volumes.

Pavel Cyrani: In terms of the volumes of supplied electricity and gas, this is roughly the similar story to what we saw in the distributed volumes. See growth 5% overall, with gas supply growing by 10%, which is driven by growing portfolio, growing consumption, and also colder winter, and 2% on the electricity supplies. In terms of customer portfolio development, we keep it roughly stable, given our market size. This is also our market share. This is our overall target to keep our market share roughly stable. Last but not least, revenues from the energy services. We see kind of-

Speaker #2: See growth 5% overall. With gas supply growing by 10% which is driven by growing portfolio growing consumption and also colder winter and 2% on the electricity electricity supplies.

Speaker #2: In terms of the customer portfolio development we keep it roughly stable given our market size this is also a market share. This is our overall target to to keep our market share roughly stable.

Speaker #2: Last but not least revenues from the energy services. We see kind of.

Speaker #1: You are allowed to unmute. To unmute yourself, press star.

Operator: You are allowed to unmute. To unmute yourself, press star 6.

Speaker #3: 6.

Speaker #2: Higher growth when you compare year to year for the full year 2025 2026. And most of the effects have been already discussed so I think this concludes our presentation and Barbara back to you.

Pavel Cyrani: Higher growth when you compare year to year for the full-year 2026. Most of the effects have been already discussed. I think this concludes our presentation. Barbara, back to you.

Speaker #4: Yes. So we can now take your questions. If you are connected through Teams just raise your hand. We have the first question from Anna Webb.

Barbara Seidlová: Yes. We can now take your questions. If you are connected through Teams, just raise your hand. We have the first question from Anna Webb.

Barbara Seidlova: Yes. We can now take your questions. If you are connected through Teams, just raise your hand. We have the first question from Anna Webb.

Speaker #5: Yeah hi Anna Webb from EBS. A couple of questions from me. Maybe firstly on the trading obviously you reported a I think a negative number and there are some potentially one-off or or effects in there.

Anna Webb: Yeah. Hi. Anna Webb from EBS. A couple of questions from me. Maybe firstly on the trading. Obviously, you reported, I think, a negative number, and there are some potentially one-off or effects in there. I think, maybe correct me if I am wrong, but the kind of base result ex those kind of derivative or other effects was kind of zero. Can you talk a bit about what you are seeing in terms of trading conditions, and is it that you are kind of not putting positions on given the volatility or basically what is driving that result and how you see trading generally, the opportunity in trading generally? Then a second question from me. Obviously, we have seen power prices going up and gas prices remaining at an elevated level given the conflict in the Middle East.

Speaker #5: But I think maybe maybe correct me if I'm wrong but the kind of base result ex those kind of derivative or other effects was was kind of zero.

Speaker #5: So can you talk a bit about what you're seeing in terms of trading conditions and is it that you're kind of not putting positions on given the volatility or or basically what's driving that result and how you see kind of trading generally the opportunity in trading generally.

Speaker #5: And then a second question from me obviously we've seen power prices going up and and gas prices remaining at elevated level given the given the conflict in in in the Middle East.

Speaker #5: I wondered if you could comment on whether you see any risk to further windfall taxes or if there's a level at which you think windfall taxes are a risk or whether you know you think the the current government that's really not on the table or if you see any other kind of measures basically whether you see any intervention risk in light of the higher prices.

Anna Webb: I wondered if you could comment on whether you see any risk to further windfall taxes, or if there is a level at which you think windfall taxes are a risk, or whether you think the current government, that is really not on the table, or if you see any other kind of measures, basically whether you see any intervention risk in light of the higher prices if they continue. Thank you.

Speaker #5: If they continue. Thank you.

Speaker #2: In terms of trading you rightly pointed out that most of the effect is the is the one-off the kind of intra-year revaluation of energy contracts.

Pavel Cyrani: In terms of trading, you rightly pointed out that most of the effect is the one-off, the kind of intra-year revaluation of energy contracts. At the same time, we do have a slower year also on the base trading. We see this as a slower year, and we expect a recovery to the standard levels that we had, for example, last year. So that is on the trading side. Martin, you want to-

Speaker #2: At the same time we do have a slower year also on kind of the base trading we see this as a as a slower slower year and we expect a recovery to the standard levels that we had for example last year.

Speaker #2: So that's on the trading side. And Martin, do you want to...?

Martin Novák: Yeah. Windfall tax is, we don't hear any. There was not a single sentence actually around reintroducing windfall tax. I think this is all behind us. On the other hand, profits of energy companies are significantly lower than they were actually when windfall tax was introduced. So, taking a base, whatever base actually past few years, very few would be subject to this tax. I believe that having introduced or being such a tax introduced, which in our opinion is almost impossible, would definitely impair the discussions about our new project and on separation of CEZ Energy and all those things that we would like to do actually. So, didn't hear about it, and I don't think it's on the table.

Martin Novak: Yeah. Windfall tax is, we don't hear any. There was not a single sentence actually around reintroducing windfall tax. I think this is all behind us. On the other hand, profits of energy companies are significantly lower than they were actually when windfall tax was introduced. So, taking a base, whatever base actually past few years, very few would be subject to this tax. I believe that having introduced or being such a tax introduced, which in our opinion is almost impossible, would definitely impair the discussions about our new project and on separation of CEZ Energy and all those things that we would like to do actually. So, didn't hear about it, and I don't think it's on the table.

Speaker #3: Yeah. Windfall taxes you know we don't hear any any there was a not a single sentence actually around reintroducing windfall tax. I think this is all behind us.

Speaker #3: On the other hand, profits of energy companies are significantly lower than they were when the windfall tax was introduced. So, you know, taking whatever base from the past few years, very few would actually be subject to this tax.

Speaker #3: And I believe that having introduced or or being being such a tax introduced which in our opinion is almost impossible would definitely impair discussions about our our new project and on separation of CEZ Energy and and all those things that we would like to to do actually.

Speaker #3: So didn't hear about it and I don't think it's on the table.

Speaker #5: Thank you.

Anna Webb: Thank you.

Speaker #4: We can take the next question from Bram Buring.

Barbara Seidlová: We can take the next question from Bram Boring.

Barbara Seidlova: We can take the next question from Bram Boring.

Speaker #6: Hi. Just to follow up on on your answer Paula. You said that the the yeah the negative impact on revaluation of derivatives that was a tri-annual revaluation.

Bram Boring: Hi. Just a follow-up on your answer, Pavel. You said that the negative impact on revaluation of derivatives, that was a triannual revaluation. Did I get it right? How often do you revalue these things?

[Analyst 1]: Hi. Just a follow-up on your answer, Pavel. You said that the negative impact on revaluation of derivatives, that was a triannual revaluation. Did I get it right? How often do you revalue these things?

Speaker #6: Did I get it right? How often do you revalue these things? The time they report. Hello? Hello.

Pavel Cyrani: Every time they report. Hello?

[Analyst 1]: Every time they report. Hello?

Bram Boring: Hello.

Pavel Cyrani: Hello.

Speaker #2: Sorry I was turned off. I said in tri-year meaning it clears out or settles typically within the same calendar year.

Pavel Cyrani: Sorry, I was turned off. I said intra-year, meaning it clears out or settles typically within the same calendar year.

Speaker #6: I think in three year. Got it. Sorry. In tri-year.

Martin Novák: I think maybe-

Martin Novak: I think maybe-

Bram Boring: Okay. Intra-year. Got it. Sorry.

[Analyst 1]: Okay. Intra-year. Got it. Sorry.

Speaker #2: In tri-year. In tri-year.

Pavel Cyrani: Intra-year.

Speaker #6: So thank you.

Martin Novák: Intra.

Martin Novak: Intra.

Bram Boring: Yeah. Thank you. Intra.

[Analyst 1]: Yeah. Thank you. Intra.

Speaker #3: Re-valued every month, you know, depending on market prices.

Martin Novák: Revaluate every month, depending from market prices.

Martin Novak: Revaluate every month, depending from market prices.

Speaker #6: Okay. And this isn't going to be recurring in the second half of the year, I presume?

Bram Boring: Okay. This is not going to be reoccurring in the H2 of the year, I will presume?

[Analyst 1]: Okay. This is not going to be reoccurring in the H2 of the year, I will presume?

Speaker #3: Well it can be all different. There can be positive revaluation as it was at the end of first quarter I think.

Pavel Cyrani: Well, it can be all different. There can be positive revaluation, as it was at the end of Q1, I think. What happens is basically it clears out upon delivery of the electricity.

Speaker #2: But what happens is basically it clears out or upon upon delivery of the electricity. So the volume like over time of the of the contract that are being revaluated within in tri-year like within the year kind of decreases as you approach the end of the year and it typically clears out.

Bram Boring: Got you.

[Analyst 1]: Got you.

Pavel Cyrani: Over time of the contract that are being revalued within intra year, within the year, it decreases as you approach the end of the year, and it typically clears out. Not necessarily every year to 100%, but it typically clears out most of it till the end of the year.

Speaker #2: Not necessarily every year to to 100% but it typically clears out most of it to till the end of the year.

Speaker #6: Understood. Thank you. Technical point I just wanted to be clear that I heard it.

Bram Boring: Understood. Thank you. A technical point, I just wanted to be clear that I have heard it.

[Analyst 1]: Understood. Thank you. A technical point, I just wanted to be clear that I have heard it.

Speaker #2: Just to say, for the end of the first quarter, actually revaluation was 2.6 billion positive; now it is 3.6 billion negative, you know.

Pavel Cyrani: Just to say, for the end of Q1, actually, the revaluation was CZK +2.6 billion positive. Now it is CZK -2.6 billion negative. It is swinging one way to another.

Speaker #2: So it's swinging, you know, one way to another.

Speaker #6: Gotcha. And then the question I wanted to ask is with regards to the distribution segment. You you know when I go back to when I go back to the outlook that you gave in '26 for '26 back in February you had distribution and correction factors as a as a negative.

Bram Boring: Gotcha. The question I wanted to ask is with regards to the distribution segment. When I go back to the outlook that you gave in full-year '26 back in February, you had distribution and correction factors as a negative. Now distribution is becoming more and more positive than you had imagined back in February. I just want to understand what is behind that.

[Analyst 1]: Gotcha. The question I wanted to ask is with regards to the distribution segment. When I go back to the outlook that you gave in full-year '26 back in February, you had distribution and correction factors as a negative. Now distribution is becoming more and more positive than you had imagined back in February. I just want to understand what is behind that.

Speaker #6: And now distribution is becoming more and more positive than you would have imagined back in February. So I just want to understand what is behind that.

Speaker #2: Okay. What is happening is that the underlying business is generating more revenues. The reason being higher than expected consumption; for example, compared to the average, we had a colder winter.

Pavel Cyrani: Well, what is happening is that the underlying business is generating more revenues. The reason being higher than expected consumption. Compared to the average, we had colder winter. For both gas and electricity, we see higher consumption, and with that, it comes high revenues for this year. We also see some recovery in the industrial and household consumption, even on top of weather.

Speaker #2: So for both gas and electricity we see higher consumption and with that it comes you come a higher revenues for this year and we also see some recovery in in the kind of industrial and household consumption even on top of weather.

Speaker #2: So that obviously at the same time this clears out we will return this to the customers two years down the road. So that's why we introduced the normalized EBITDA because that basically is the fundamental return that we that we get on our assets and that we that we retain.

Pavel Cyrani: That obviously at the same time, this clears out. We will return this to the customers 2 years down the road. That is why we introduced the normalized EBITDA, because that basically is the fundamental return that we get on our assets and that we retain.

Bram Boring: Okay.

[Analyst 1]: Okay.

Speaker #6: And that this one this one does not necessarily that does this one does not fluctuate within the year because this one is basically set with your asset base and WACC at the start of the year.

Pavel Cyrani: This one does not fluctuate within the year because this one is basically set with your asset base and WACC at the start of the year.

Speaker #6: Okay. So simply the weather is giving you a tailwind that you couldn't have anticipated back in February.

Bram Boring: Okay. So, simply, the weather is giving you a tailwind that you couldn't have anticipated back in February.

[Analyst 1]: Okay. So, simply, the weather is giving you a tailwind that you couldn't have anticipated back in February.

Speaker #2: Exactly. Exactly.

Pavel Cyrani: Exactly.

Speaker #6: Excellent. Thank you very much.

Bram Boring: Excellent. Thank you very much.

[Analyst 1]: Excellent. Thank you very much.

Speaker #4: Next question from Farhat Maluk.

Barbara Seidlová: Next question from Farhad Malou.

Barbara Seidlova: Next question from Farhad Malou.

Speaker #1: Hi, thanks for the presentation. Just wanted to ask a question on the CEZ Energy split. So, I think on the slide you mentioned that you're looking at to what extent financial debt will be transferred from CEZ to CEZ Energy.

Farhad Malou: Hi. Thanks for the presentation. Just wanted to ask a question on the CEZ Energy split. I think on the slide you mentioned that you are looking at what extent of financial debt will be transferred from CEZ to CEZ Energy. So, a couple of questions on the back of that. Firstly, can you say how much debt capacity do you think you will have at CEZ Energy? Then I think you mentioned this before, but I was just wondering, I think there is two options, right? Firstly, you have got the debt transfer, and the other one is raising debt at CEZ Energy and doing some debt repayments potentially at CEZ. Just looking at, could you still be looking at these bond repayments, and do you think there could be a kind of make-whole on the debt rather if you do not go for the consent solicitation path?

[Analyst 2]: Hi. Thanks for the presentation. Just wanted to ask a question on the CEZ Energy split. I think on the slide you mentioned that you are looking at what extent of financial debt will be transferred from CEZ to CEZ Energy. So, a couple of questions on the back of that. Firstly, can you say how much debt capacity do you think you will have at CEZ Energy? Then I think you mentioned this before, but I was just wondering, I think there is two options, right? Firstly, you have got the debt transfer, and the other one is raising debt at CEZ Energy and doing some debt repayments potentially at CEZ. Just looking at, could you still be looking at these bond repayments, and do you think there could be a kind of make-whole on the debt rather if you do not go for the consent solicitation path?

Speaker #1: So, a couple of questions on the back of that. Firstly, could you say how much debt capacity you think you will have at ČEZ Energy?

Speaker #1: And then I think you mentioned this before but I was just wondering could you I think it's two options, right? Firstly, you've got the debt transfer and the other one is raising debt at CEZ Energy and doing some debt repayments potentially at CEZ.

Speaker #1: So just looking at could you still be looking at these bond repayments and do you think there could be a kind of like make-hole when the debt rather if you don't go down the consensus licitation path?

Farhad Malou: Also just the timing of a potential debt transfer. So, will this happen after Q1 2027, or could it happen before in line with the transfer of the businesses? Thank you.

Speaker #1: And then also, just the timing of a potential debt transfer—so will this happen after Q1 ’27, or could it happen before, in line with the transfer of the businesses?

[Analyst 2]: Also just the timing of a potential debt transfer. So, will this happen after Q1 2027, or could it happen before in line with the transfer of the businesses? Thank you.

Speaker #1: Thank you.

Speaker #3: So you know regarding debt capacity of CEZ Energy I think the nearest comparison could be to Eion which would be very similar business profile.

Pavel Cyrani: Regarding that capacity of CEZ Energy, I think the nearest comparison could be to E.ON, which would be very similar business profile. So whatever they are able to take and whatever their targets are, we would probably be very similar. Second, the debt transfer and the technical way how to do it and the timing is still under discussion. Clearly, there will be debt transfer between CEZ and CEZ Energy, for sure, but the technical way how to do that and how fast it will be done is subject to discussion, which is clearly the capital structure discussion, one of the most important parts of the puzzle, and we will communicate it as the time passes closer to the end of conclusion of the transaction.

Speaker #3: So, whatever they are able to take and whatever their targets are, we would probably be very similar. And second, you know, the debt transfer and the technical way how to do it and the timing is still under discussion.

Speaker #3: Clearly there will be debt transfer between CEZ and CEZ Energy for sure but the technical way how to do that and how fast it will be done will be is subject to discussion which is clearly the capital structure discussion one of the most parts of one of the most important parts of the puzzle.

Speaker #3: And we'll communicate it as as the time passes you know closer to the end of conclusion of the of the transaction.

Speaker #1: Thank you.

Farhad Malou: Thank you.

[Analyst 2]: Thank you.

Barbara Seidlová: The next question from Emmanuel Ojioni.

Barbara Seidlova: The next question from Emmanuel Ojioni.

Speaker #4: The next question is from Emmanuel Ogioni.

Speaker #5: Good afternoon everybody and thank you for the presentation for taking my questions. The first one is a follow-up on the increase in the BDA for 1 billion CEZ crown in this distribution business unit.

Emmanuel Ojioni: Good afternoon, everybody, and thank you for the presentation and for taking my questions. The first one is a follow-up on the increase in the EBITDA for 1 billion CZK in this distribution business unit. You mentioned the correction factor, higher correction factor in electricity. My question is, what is the read across on 2027? So there is some effect or impact or reversal we should expect in H2 or in 2027 for this moving part happened in H1? This is the first question. The second question is on the drought in Europe, which is causing stop and cut in production for many nuclear plants, obviously also lower hydro-related production, for example, in some countries in Eastern Europe. I read that Hungary, for example, has increased tripled its import from Czechia.

[Analyst 3]: Good afternoon, everybody, and thank you for the presentation and for taking my questions. The first one is a follow-up on the increase in the EBITDA for 1 billion CZK in this distribution business unit. You mentioned the correction factor, higher correction factor in electricity. My question is, what is the read across on 2027? So there is some effect or impact or reversal we should expect in H2 or in 2027 for this moving part happened in H1? This is the first question. The second question is on the drought in Europe, which is causing stop and cut in production for many nuclear plants, obviously also lower hydro-related production, for example, in some countries in Eastern Europe. I read that Hungary, for example, has increased tripled its import from Czechia.

Speaker #5: You mentioned said the correction factor higher correction factor in electricity. So my question is what is the read across on '27? So there is some effect or impact or reversal in we should expect in H2 or in '27 for this for this moving part happened in in H1.

Speaker #5: This is the first question. The second question is on the drought in Europe, which is causing stops and cuts in production for many nuclear plants. Also, obviously, there is lower hydroelectric production in, for example, some countries in Eastern Europe.

Speaker #5: I I I I read that Hungary for example has increased a tripled its import from Czechia. So what are the impact on CEZ in positive for example for higher export to Hungary for example of electricity and but also the risk of H2 the drought in in H2 also for for your country.

Emmanuel Ojioni: What are the impact on CEZ in positive, for example, for higher export to Hungary, for example, of electricity, but also the risk of H2, the drought in H2 also for your country? This is the second question. Finally, a question on the decrease, the reason of the slight decrease for still 1 billion CZK around in EBITDA for the sales segment, not year-on-year compared to 2025, but compared to May guidance. What happened compared to May to cut this EBITDA for sales? Thank you.

[Analyst 3]: What are the impact on CEZ in positive, for example, for higher export to Hungary, for example, of electricity, but also the risk of H2, the drought in H2 also for your country? This is the second question. Finally, a question on the decrease, the reason of the slight decrease for still 1 billion CZK around in EBITDA for the sales segment, not year-on-year compared to 2025, but compared to May guidance. What happened compared to May to cut this EBITDA for sales? Thank you.

Speaker #5: This is the second question. And finally a question on the decrease that the reason of the slightly decrease for still 1 billion around of CEZ crown in a BDA for the sales segment compare not year on year compared to '25.

Speaker #5: But compare to May guidance. So what happened compare to to May to to cut this a BDA for sales? Thank you.

Speaker #2: So on the distribution side I think the best way to look at or the best place to look at this page 31 in the backups of the presentation where you see both the normalized EBITDA if you look at 2025 and 2026 this is the one if one of impact mainly driven by the increase of WACC year between the two periods.

Pavel Cyrani: On the distribution side, I think the best way to look at or the best place to look at this is page 31 in the backups of the presentation, where you see both the normalized EBITDA. If you look at 2025 and 2026, this is the one of impact mainly driven by the increase of WACC between the two periods. What you will see is the normalized EBITDA, the WACC being stable for the future years, and the RAB growing with our investment, which exceeds depreciation by about 0.6. So we invest about 1.6 or 1.7 times depreciation. So that's kind of the base value. In terms of the correction factors, what we will see in 2027 is the reversal of the positive correction factor from 2025. 2025 was again, a year where positive correction factor was generated, so this will be subtracted in 2027.

Speaker #2: So what you will see is the normalized EBITDA, the WACC being stable for the future years, but typically EBITDA will grow and the WACC will grow when our investment exceeds depreciation by about 0.6.

Speaker #2: So we invest about 1.6 or 1.7 times depreciation. So that's that's kind of the the base value in terms of the correction factors. What we will see in 2027 is the reversal of the positive correction factor from 2025, 2025 was again a year where positive correction factor was generated.

Speaker #2: So this will be subtracted this will be subtracted in 2027. It's it's more is higher it's more visible on the electricity side than it's on the on the gas side.

Pavel Cyrani: It's higher, it's more visible on the electricity side than it's on the gas side. I hope that explains this. Martin.

Speaker #2: So that's—I hope that explains this. And Martin.

Emmanuel Ojioni: Yeah. Thank you. It's clear. Thank you.

[Analyst 3]: Yeah. Thank you. It's clear. Thank you.

Speaker #5: Yeah thank you. It's clear. Thank you.

Speaker #3: So then then water and nuclear you know we also follow the news in our case we actually don't have any impact on hot weather as all our power plants are using cooling towers.

Martin Novák: Water and nuclear. We also follow the news. In our case, we actually don't have any impact on hot weather as all our power plants are using cooling towers, so that we actually are not dependent on how much water is in the nearby river. Maybe one of the reasons is that nearby rivers are not as large as Danube in Hungary, so that we are using different methods of cooling, which is cooling towers, which is almost closed cycle. The only thing or the only impact is actually that if the cooling water is not cold enough, the efficiency of the power plant is going down by a few megawatts per unit, or by very few percent, low percentage points. But that's all it is. No outages, nothing.

Martin Novak: Water and nuclear. We also follow the news. In our case, we actually don't have any impact on hot weather as all our power plants are using cooling towers, so that we actually are not dependent on how much water is in the nearby river. Maybe one of the reasons is that nearby rivers are not as large as Danube in Hungary, so that we are using different methods of cooling, which is cooling towers, which is almost closed cycle. The only thing or the only impact is actually that if the cooling water is not cold enough, the efficiency of the power plant is going down by a few megawatts per unit, or by very few percent, low percentage points. But that's all it is. No outages, nothing.

Speaker #3: So that we actually are not dependent on how much water is in the nearby river. Maybe one of the reasons is that nearby rivers are not as large as the new in Hungary.

Speaker #3: So that we are using different methods of cooling which is cooling towers you know which is almost closed cycle. So the only thing or the only impact is actually that if the cooling water is not cold enough the efficiency of the power plant is going down by a few megawatts per unit you know or by a few very few percent low percentage points.

Speaker #3: But that's all it is, you know. So, no outages, nothing. The Hungarian situation does not translate into our prices very much because the interconnection between Hungary and Slovakia is not very robust.

Martin Novák: The Hungarian situation does not translate into our prices very much because of interconnection between Hungary and Slovakia, which is not very robust. Basically, the export to Hungary is limited to this interconnection. Again, we don't export anything directly. We sell on power exchange, and whoever picks up the power will actually deliver. That's the Hungarian situation and our situation, which is significantly different actually. Then decrease in 1 billion in sales quarter on quarter estimated actually given mainly by the delay in projects in Elevion, ESCO projects abroad.

Martin Novak: The Hungarian situation does not translate into our prices very much because of interconnection between Hungary and Slovakia, which is not very robust. Basically, the export to Hungary is limited to this interconnection. Again, we don't export anything directly. We sell on power exchange, and whoever picks up the power will actually deliver. That's the Hungarian situation and our situation, which is significantly different actually. Then decrease in 1 billion in sales quarter on quarter estimated actually given mainly by the delay in projects in Elevion, ESCO projects abroad.

Speaker #3: So basically, the export to Hungary is limited to this interconnection. Again, we don't export anything directly. We sell on the power exchange, and whoever picks up the power will actually deliver.

Speaker #3: So that's the Hungarian situation, and our situation, which is significantly different, actually. And then the decrease in 1 billion in sales quote-unquote estimate is actually provided mainly by the delay in projects, in Elevion ESCO projects abroad.

Speaker #5: Which is a delay

Pavel Cyrani: Which is a delay as put, so that with the roughly EUR 1 billion decrease that we just announced, we are basically getting the most stable development for Elevion year-on-year between 2025 and 2026. We expect reverting to growth, both organic, including those projects that are delayed moving to next year, but also through M&A as we will fully include Techem in the consolidated Elevion results next year.

Speaker #2: As put, so that with the one roughly $1 billion decrease that we just announced, we are basically getting about stable development for Elevion year on year between 2025 and '26.

Speaker #2: And we expect reverting to growth, both organic, including those projects that are delayed and moving to next year, but also through M&A, as we will fully include Tachem in the consolidated Elevion results next year.

Speaker #5: Thank you. Very clear.

Emmanuel Ojioni: Thank you. Very clear.

[Analyst 3]: Thank you. Very clear.

Speaker #1: Now, the next question is from Jan Raška. Jan Raška, you can unmute yourself and ask your question. Okay, so we will get back to you, and I'll give the room to Lukas Altman.

Barbara Seidlová: Now the next question from Jan Raška. Jan Raška, you can unmute yourself and ask your question. Okay. We will get back to you and I will give the room to Lukas Altman.

Barbara Seidlova: Now the next question from Jan Raška. Jan Raška, you can unmute yourself and ask your question. Okay. We will get back to you and I will give the room to Lukas Altman.

Speaker #5: Yes, thank you. My question was also regarding CEZ Energy, and with the split, let's say, from the actual power production versus the power distribution, are we expecting to get a higher influx of, let's say, ESG-minded investments in CEZ Energy in the future?

Lukas Altman: Yes. Thank you. My question was also regarding ČEZ Energy. With the split, let's say, from the actual power production versus the power distribution, are we expecting to get a higher influx of, let's say, ESG-minded investments in ČEZ Energy in the future? Adding to that, I am not sure if you can share anything, but, I was also reading about a potential expansion of a share buyback for ČEZ after the creation of ČEZ Energy. Maybe could you give us an update on that? Thank you.

[Analyst 4]: Yes. Thank you. My question was also regarding ČEZ Energy. With the split, let's say, from the actual power production versus the power distribution, are we expecting to get a higher influx of, let's say, ESG-minded investments in ČEZ Energy in the future? Adding to that, I am not sure if you can share anything, but, I was also reading about a potential expansion of a share buyback for ČEZ after the creation of ČEZ Energy. Maybe could you give us an update on that? Thank you.

Speaker #5: And adding to that, I'm not sure if you can share anything, but I was also reading about a potential expansion of a share buyback for CEZ after the—yeah, after the creation of CEZ Energy.

Speaker #5: Maybe could you give us an update on that? Thank you.

Speaker #2: I'm not sure what you mean by the influx of ESG-minded investors, but one of the rationales for creating CEZ Energy was to basically open up for both equity and bond investors that would normally not invest in a company that still operates coal power and/or operates nuclear.

Pavel Cyrani: I'm not sure what you mean by the influx of ESG-minded investors. But one of the rationales for creating ČEZ Energy was to basically open up for both equity and bond investors that would normally not invest in a company that still operates coal power and/or operates nuclear. So from this perspective, we expect that this company would be open to also investors, both debt investors and equity investors, that would normally not invest in the original ČEZ.

Speaker #2: So from this perspective, we expect that this company would be open to investors, both debt investors and equity investors, that would normally not invest in the original CEZ.

Speaker #5: Yeah, perfect. Perfect. That was exactly my question. And the other question was about the potential increase of the share buyback by the Czech government.

Lukas Altman: Yeah. Perfect. That was exactly my question. The other question was about the potential increase of the share buyback, but from the Czech government.

[Analyst 4]: Yeah. Perfect. That was exactly my question. The other question was about the potential increase of the share buyback, but from the Czech government.

Speaker #2: This this is actually second

Martin Novák: This is actually second step. We got a mandate to set up ČEZ Energy, fill it with assets and dispose up to 49%. But buy shares back is actually a different mandate that would have to come from majority shareholder and be approved by shareholders meeting, which has not happened. So we are just in phase 1, and phase 2 is to follow in the future.

Martin Novak: This is actually second step. We got a mandate to set up ČEZ Energy, fill it with assets and dispose up to 49%. But buy shares back is actually a different mandate that would have to come from majority shareholder and be approved by shareholders meeting, which has not happened. So we are just in phase 1, and phase 2 is to follow in the future.

Speaker #3: You know, we got a mandate to set up CEZ Energy, fill it with assets, and dispose of up to 49%. But buying shares back is actually a different mandate that would have to come from the majority shareholder and be approved by the shareholder meeting, which has not happened.

Speaker #3: So we are just in phase one, and phase two will follow in the future.

Speaker #2: Upon the decision of the shareholders at one of the...

Pavel Cyrani: Upon the decision of the shareholders at one of the-

Speaker #3: Yes. Exactly.

Martin Novák: Exactly

Martin Novak: Exactly

Speaker #2: Future shareholder meetings.

Pavel Cyrani: future shareholder meetings.

Speaker #5: All right. Thank you.

Lukas Altman: All right. Thank you.

[Analyst 4]: All right. Thank you.

Speaker #1: Okay. And now, Jan Raška, you can ask your question.

Barbara Seidlová: Okay. Jan Raška, you can ask your question.

Barbara Seidlova: Okay. Jan Raška, you can ask your question.

Jan Raška: Hello, can you hear me? Hello.

[Analyst 5]: Hello, can you hear me? Hello.

Speaker #5: Hello, can you hear me? Hello. Good afternoon. Okay, right, I see. Interesting question regarding energy services in Germany, namely the acquisition of Tachem Solutions.

Barbara Seidlová: Yes.

Barbara Seidlova: Yes.

Jan Raška: Good afternoon. I see interesting acquisition regarding energy services in Germany, namely acquisition of Techem Solutions. Can you elaborate the profitability of this company, the potential contribution, in what range can we expect the contribution to CEZ results? Thank you.

[Analyst 5]: Good afternoon. I see interesting acquisition regarding energy services in Germany, namely acquisition of Techem Solutions. Can you elaborate the profitability of this company, the potential contribution, in what range can we expect the contribution to CEZ results? Thank you.

Speaker #5: Can you elaborate more on the profitability of this company and its potential contribution? In what range can we expect the contribution to CEZ's results?

Speaker #5: Thank you.

Speaker #2: I think we are not ready to announce it or detail that today, but we will include it in the information as we announce the outlook for next year.

Pavel Cyrani: I think we are not ready to announce it or detail it out today, but we will include it in the information as we will announce the outlook for next year. We will tell you more about that.

Speaker #2: So, we'll, you know, tell you more about that.

Speaker #5: Okay. Okay. Thanks.

Jan Raška: Okay. Thanks.

[Analyst 5]: Okay. Thanks.

Speaker #1: Next question from Chris Johnstone. Chris, please unmute yourself and ask your question. Chris, can you ask your question? Okay, then I'll come to you later, and we now allow Petr Bartek to ask your question.

Barbara Seidlová: Next question from Chris Johnstone. Chris, please unmute yourself and ask your question. Chris, can you ask your question? Then, I will come to you later, and we now allow Petr Bártek to ask your question.

Barbara Seidlova: Next question from Chris Johnstone. Chris, please unmute yourself and ask your question. Chris, can you ask your question? Then, I will come to you later, and we now allow Petr Bártek to ask your question.

Petr Bártek: Good afternoon. Can you hear me?

[Analyst 6]: Good afternoon. Can you hear me?

Speaker #4: Good afternoon. Can you hear me?

Speaker #1: Yes.

Barbara Seidlová: Yes.

Pavel Cyrani: Yes.

Speaker #4: Yeah. So, thank you for taking my questions, too. First, if you are considering, in the current market conditions, some acceleration in your hedging for future years for the, you know, emitting assets — because in this quarter I've seen a relatively steady, or maybe even a slowdown in the hedging, if I'm not mistaken.

Petr Bártek: Yeah. Thank you for taking my questions, too. First, if you are considering, in the current market conditions, some acceleration in your hedging for future years for the emitting assets. Because in this quarter, I have seen a relatively steady or maybe even a slowdown in the hedging, if I am not mistaken. Second, if you have any view or you could comment on what do you think about the European Commission draft proposal for the carbon market, if it has somehow changed your view on the carbon market, if you will adjust your strategy or whatever you can share. Thank you.

[Analyst 6]: Yeah. Thank you for taking my questions, too. First, if you are considering, in the current market conditions, some acceleration in your hedging for future years for the emitting assets. Because in this quarter, I have seen a relatively steady or maybe even a slowdown in the hedging, if I am not mistaken. Second, if you have any view or you could comment on what do you think about the European Commission draft proposal for the carbon market, if it has somehow changed your view on the carbon market, if you will adjust your strategy or whatever you can share. Thank you.

Speaker #4: And second if you have any view or you could comment on what you what you think about the European Commission draft proposal for the carbon market if it has somehow changed your view on the carbon market if you will adjust your strategy or whatever you can share.

Speaker #4: Thank you.

Speaker #2: In terms of the pace of our hedging, we did increase the pace of hedging for the lignite assets for the remainder of this year and next year, even.

Pavel Cyrani: In terms of the pace of our hedging, we did increase pace of hedging for the lignite assets for the remainder of this year and next year even. At the same time, or let us say volume of these, at the same time, what happened is that we have also increased the overall volume generated. That was also already at the. No, it was not at the end of Q1, it was beginning of Q2.

Speaker #2: At the same time or let's say volume of these but at the same time what happened is that we've also increased the overall volume generated.

Speaker #2: So, and that was also already at the—no, it wasn't at the end of Q1. It was the beginning of Q2.

Speaker #3: Q2. Yeah.

Martin Novák: Q2, yeah.

Martin Novak: Q2, yeah.

Speaker #2: So these two effects kind of also net out each other. But we are looking into it and we are definitely looking into how to secure the highest possible spreads for our lignite assets.

Pavel Cyrani: These two effects kind of also net out each other. But we are looking into it and we are definitely looking into how to secure the highest possible spreads for our lignite assets. In terms of the CO2 market, basically, we see adjustments which may have some shorter-term impact in terms of discussion about the reduction factor, and so forth and so on. But overall, we see that the highest discussion or the topics that are mostly in focus of this is not the energy sector anymore, but it is rather the industry. So it is more about how much free allowances will be given to industry, what will be the benchmarks, what will be the treatment of how you need to spend the money you save on the CO2 allowances.

Speaker #2: In terms of in terms of the CO2 market basically we we see adjustments which may have some shorter term impact in terms of you know discussion about the reduction factor and so forth and so on.

Speaker #2: But overall, we see that the highest discussion, or the topics that are mostly in focus of this, is not the energy sector anymore, but rather the industry.

Speaker #2: So it's more about how much free allowance are will be given to industry what will be the benchmarks what will be the the treatment of you know how you need to spend the money you save on the CO2 allowances so right now as we read it and it may still change but right now as we read it we don't see a a significant impact on the energy sector.

Pavel Cyrani: Right now, as we read it, and it may still change, but right now as we read it, we do not see a significant impact on the energy sector.

Speaker #4: Thank you.

Petr Bártek: Thank you.

[Analyst 6]: Thank you.

Speaker #1: Next question from Andrew Moulder.

Barbara Seidlová: Next question from Andrew Mulder.

Barbara Seidlova: Next question from Andrew Mulder.

Speaker #5: Yes. Hi. Thank thanks for taking my question. I just really wanted to follow up a little bit on CEZ energy. Earlier on you talked about which companies might go into CEZ energy but it seems like you hadn't decided exactly which ones that would be.

Andrew Mulder: Yes. Hi, thanks for taking my question. I just really wanted to follow up a little bit on ČEZ Energy. Earlier on, you talked about which companies might go into ČEZ Energy, but it seemed like you hadn't decided exactly which ones that would be. I just wonder what factors are influencing your decision about which companies will go into ČEZ Energy. You also talked about the debt transfer and the capital structure. I wonder, do you have any rating target in mind for ČEZ Energy? You did compare it to E.ON, and I mean, E.ON is rated Baa2 with Moody's. I know it's higher with S&P and Fitch, but I just wonder, do you have any rating target for ČEZ Energy? Finally, you talked about ČEZ Energy being potentially attractive to people who might not invest in the ČEZ with the generation assets.

[Analyst 7]: Yes. Hi, thanks for taking my question. I just really wanted to follow up a little bit on ČEZ Energy. Earlier on, you talked about which companies might go into ČEZ Energy, but it seemed like you hadn't decided exactly which ones that would be. I just wonder what factors are influencing your decision about which companies will go into ČEZ Energy. You also talked about the debt transfer and the capital structure. I wonder, do you have any rating target in mind for ČEZ Energy? You did compare it to E.ON, and I mean, E.ON is rated Baa2 with Moody's. I know it's higher with S&P and Fitch, but I just wonder, do you have any rating target for ČEZ Energy? Finally, you talked about ČEZ Energy being potentially attractive to people who might not invest in the ČEZ with the generation assets.

Speaker #5: And I just wonder what factors are influencing your decision about which companies will go in into CEZ energy. You also talked about sort of the the debt transfer and the the capital structure.

Speaker #5: But I wonder do you have any rating target in mind for for CEZ energy? I mean you you did compare it to Eion and I mean Eion is rated BAA2 with Moody's.

Speaker #5: I know it's higher with S&P and Fitch, but I just wonder, do you have any rating target for CEZ Energy? And finally, you talked about CEZ Energy being potentially attractive to people who might not invest in the CEZ with the generation assets.

Speaker #5: So would you then envisage CEZ energy being a debt market issuer on its own or would it just have the debt that it initially assumes from CEZ?

Andrew Mulder: Would you then envisage ČEZ Energy being a debt market issuer on its own, or would it just have the debt that it initially assumes from ČEZ? I guess finally, just some clarification. You talked about cooling towers being the method by which you cool your power plants. I just want to be absolutely clear, that does apply also to both of your nuclear plants. They are just cooling towers. They do not rely on cooling from river water. If you could just confirm that for me. Thank you.

[Analyst 7]: Would you then envisage ČEZ Energy being a debt market issuer on its own, or would it just have the debt that it initially assumes from ČEZ? I guess finally, just some clarification. You talked about cooling towers being the method by which you cool your power plants. I just want to be absolutely clear, that does apply also to both of your nuclear plants. They are just cooling towers. They do not rely on cooling from river water. If you could just confirm that for me. Thank you.

Speaker #5: And I guess finally just some clarification you talked about cooling towers being the the method by which you cool your power plants and I just want to be absolutely clear that that does apply also to both of your nuclear plants.

Speaker #5: They are just cooling towers; they do not rely on cooling from river water. If you could just confirm that for me, thank you.

Speaker #2: In terms of—I mean, the questions you have around CEZ Energy are the correct questions, and the right questions. We are working on those in detail, obviously.

Pavel Cyrani: In terms of the questions you have around ČEZ Energy are the correct questions and right questions. We are working on those in detail. Obviously, we're analyzing it, and we are not ready to answer them as yet. Our overall goal is always value maximization and complexity reduction, so that's kind of what feeds into the discussion, what to include in the parameter and what to not include. That's why Martin mentioned previously, we are mainly looking at some of the smaller companies that are included in the overall mandate that increase the complexity disproportionately to the value. We are not looking at the major pillars of ČEZ Energy, such as both distribution companies, the supplies, and so forth and so on. In terms of debt rating and all of that, we will announce that when the analysis are finished and when we are ready.

Speaker #2: We're analyzing it, and we are not ready to answer them as yet. Overall, our main goal is always value maximization and complexity reduction.

Speaker #2: So that's kind of what feeds into the discussion—what to include in the perimeter and what not to include. So that's why, as Martin mentioned previously, we are mainly looking at some of the smaller companies that are included in the overall mandate, which increase the complexity disproportionately to the value.

Speaker #2: We are not looking at the at at the major pillars of of CEZ energy such as the both distribution companies, the supplies and so forth and so on.

Speaker #2: And in terms of debt rating and all of that we will announce that when we when the analysis are finished and when we are ready.

Speaker #2: So please bear with us for some some more time and and and we'll tell you.

Pavel Cyrani: Please bear with us for some more time and we'll tell you.

Speaker #3: So, rating exercise is one of the important pillars of the entire project. We will have rated both CEZ and CEZ Energy. Regarding that, there are again many options, as Pavel said.

Martin Novák: Rating exercise is one of the important pillars of the entire project. We will have rated both CEZ and CEZ Energy. Regarding debt, there are, again, many options, as Pavel said. Transfer of debt, but yes, in the future, CEZ Energy will very likely be an issuer of its own bonds. That would probably be compelling to, as it was said, ESG type of investors or those that would not normally buy bonds of company running coal plants. Although, we don't see such a big issue these days, especially when we have a cold decommissioning plan in place. Then cooling towers, yes. All our power plants, thermal power plants, basically, are using this technology. Nuclear, all of them. So no issues there.

Martin Novak: Rating exercise is one of the important pillars of the entire project. We will have rated both CEZ and CEZ Energy. Regarding debt, there are, again, many options, as Pavel said. Transfer of debt, but yes, in the future, CEZ Energy will very likely be an issuer of its own bonds. That would probably be compelling to, as it was said, ESG type of investors or those that would not normally buy bonds of company running coal plants. Although, we don't see such a big issue these days, especially when we have a cold decommissioning plan in place. Then cooling towers, yes. All our power plants, thermal power plants, basically, are using this technology. Nuclear, all of them. So no issues there.

Speaker #3: Transfer of debt but yes in the future CEZ energy will very likely be an issuer of of its own bonds. That would probably be compelling to as it was said ESG type of investors or you know those that would not normally buy bonds of company running coal plants although we don't see such an big issue these days especially when we have a coal decommissioning plan in place.

Speaker #3: Then cooling towers yes all our power plants thermal power plants basically are using this technology nuclear all of them. So no no issues there.

Speaker #5: Great. Thank you.

Andrew Mulder: Great. Thank you.

[Analyst 7]: Great. Thank you.

Speaker #1: Maybe just one addition to how you phrased your question—you know, cooling towers still need some water from the river, but significantly smaller amounts compared to flow-through cooling.

Barbara Seidlová: Maybe just one addition to how you phrased your question. Cooling towers still need some water from the river, but significantly smaller amounts compared to flow-through cooling.

Barbara Seidlova: Maybe just one addition to how you phrased your question. Cooling towers still need some water from the river, but significantly smaller amounts compared to flow-through cooling.

Speaker #5: So, so sorry, Barbara. Does that mean you could potentially have to reduce the output from the nuclear plants if this drought continues?

Andrew Mulder: Sorry, Barbara. Does that mean you could potentially have to reduce the output from the nuclear plants if this drought continues?

[Analyst 7]: Sorry, Barbara. Does that mean you could potentially have to reduce the output from the nuclear plants if this drought continues?

Speaker #3: No, no. We have enough water.

Pavel Cyrani: No. We have enough water.

Speaker #5: Okay. Thank you.

Andrew Mulder: Okay. Thank you.

[Analyst 7]: Okay. Thank you.

Speaker #1: Okay. We have no further questions but as always investor relations is at your disposal later today or tomorrow and following days. Thank you everyone for participating.

Barbara Seidlová: Okay. We have no further questions, but as always, investor relations is at your disposal later today or tomorrow and following days. Thank you everyone for participating. Thank you for the insightful questions and speak to you in three months at the latest. Thank you. Bye-bye.

Barbara Seidlova: Okay. We have no further questions, but as always, investor relations is at your disposal later today or tomorrow and following days. Thank you everyone for participating. Thank you for the insightful questions and speak to you in three months at the latest. Thank you. Bye-bye.

Speaker #1: Thank you for the insightful questions, and we will speak to you in three months at the latest. Thank you. Bye-bye.

Speaker #3: Goodbye.

Martin Novák: Goodbye.

Martin Novak: Goodbye.

Speaker #2: Bye bye.

Pavel Cyrani: Bye-bye.

Barbara Seidlová: This meeting is no longer being transcribed. This meeting is no longer being recorded.

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