#1牛 2ARDAL RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency SLOVAK REPUBLIC Investor Presentation May 2023#2Table of contents Introduction II Economic Developments III Fiscal Policy = ≥ IV Debt Management V Banking Sector VI Contemplated Transaction + 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency р. 3 p. 11 p. 23 p. 28 p. 41 p. 43#3Introduction 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 3#4Slovakia - At a Glance Geographical Location OECD NATO ΟΤΑΝ Sammy Slovakia European Union (Euro Zone members) European Union (Non Euro Zone members) Key Facts 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency Ratings (Moody's/S&P/Fitch) GDP (2022) GDP per Capita (2022) Population (2022) Real GDP growth (2022) Inflation (HICP - 2022) Currency Key economic sectors Memberships Head of State Capital A2 (negative) / A+ (stable)/A (negative) €109.7 billion €20,315 5.4 million 1.7% 12.1% EUR Services, Manufacturing, Wholesale & Retail Trade, Construction OECD, EU, EMU, NATO, Schengen Area President Mrs. Zuzana Čaputová Bratislava Territory 49,034 km² Source: Eurostat, Ministry of Finance of the Slovak Republic (MoF), National Bank of Slovakia (NBS) H 4 st#5Slovakia - Credit Strengths 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency Strengths Credit キ Resilient Economic Growth Sound Fundamentals Fiscal Discipline Steady Debt Dynamics Strong track record of economic growth: expected to remain above eurozone median in 2023 driven by public investment Sustained medium-term growth: Expected increase in private consumption and steady labour market coupled with increased external demand An export-oriented performer with balanced external accounts: moderate current account deficits explained by investment imports Well capitalized banking sector profitable with good asset quality Approved multi-annual expenditure ceilings: fundamental fiscal reform leading to more binding medium-term budgeting Stability Programme targets deficit to decline close to 2% of GDP in 2026 Public debt below 58% of GDP, well below the Euro Area average of 90% of GDP High debt affordability: borrowing costs remain lower than peers, owing to sound debt management and ECB's quantitative easing program Export Oriented Competitive export sectors with high value niches in key industrial sectors (motor vehicles, machinery, equipment, metal products, electronics, etc.) Member of Key Political and Economic Organizations EU and Eurozone membership: supports Slovakia's institutional strength and credible macroeconomic policies EU funds serve as stable, predictable and low-cost source of growth キ 5 Source: MoF, Fitch, IMF#6A-/A3 A/A2 A+/A1 AA-/Aa3 Slovakia's credit ratings are amongst the highest in the region MOODY'S S&P Global Ratings Czech Re. Ireland Czech Re. Hong Kong Belgium Slovenia Qatar UK (*) Estonia Czech Re. Israel Ireland ARDAL Fitch Ratings Estonia Belgium Japan Estonia China Slovakia China Malta China ✡ Israel Japan Latvia ☑ Israel Saudi Arabia S Saudi Arabia Kuwait Lithuania Kuwait Qatar UK Slovakia Iceland Chile Iceland Slovakia Iceland Lithuania Poland Spain BAW Saudi Arabia Japan Slovenia Malta Lithuania Chile Botswana Malaysia Malta Malaysia Chile Latvia Latvia Slovenia Poland Spain Poland ㄝ 6. Source: Moody's, S&P and Fitch#7Ratings Reflect a Solid Profile in Turbulent Times 2ARDAL 2003 Agentura pre riadenie dlhu a likvidity. 2023 Deb and Liquidity Management Agency Rating Trajectory Highlights and Key Topics • . Slovakia's credit profile is challenged by the country's high reliance on Russian energy imports, a risk in the context of Russia's invasion of Ukraine. This is balanced by the country's solid track record of economic growth as well as the government's moderate debt burden and the European Union and euro area membership Sovereign Ratings Trajectory 2016-23 (S&P, Moody's, Fitch) AA-/Aa3/AA- A+/A1/A+ A/A2/A A-/A2/A- BBB+/Baa1/BBB+ Fitch Moody's S&P BBB/Baa2/BBB BBB-/Baa3/BBB- 2016 2017 2018 2019 2020 2021 2022 2023 Credit Rating Agency Views S&P Global Ratings Credit rating has remained stable between 2016 and 2023 Credit rating of A+ with a stable outlook was reaffirmed in May 2023: о 0 S&P's stable outlook balances the country's economy near-term resilience against uncertainty regarding its fiscal and economic policies after the upcoming elections, and the remaining risks to the medium-term growth outlook This is counteracted by Slovakia's moderate fiscal and external debt levels, together with low debt service MOODY'S Credit rating has remained stable between 2016 and 2023 Credit rating of A2 with a negative outlook was reaffirmed in May 2023: о о Slovakia's credit rating is supported by a strong track record of economic growth, financial stability and income convergence with EU peers as well as its moderate government debt burden and high debt affordability. Slovakia's strong track record of financial stability with banking sector risks remaining low This is counteracted by rating agencies concerns over the country reliance on gas imports and its susceptibility to geopolitical risks Fitch Ratings Credit rating was downgraded 1 time between 2016 and 2022 Credit rating of A+ was downgraded to A in May 2020 and recently reaffirmed in February 2023 with a negative Outlook May 2020: One notch downgrade from A+ to A. Increasing economic uncertainty driven by the impact of the Covid-19 pandemic February 2023: Rating affirmed at A with a negative outlook reflecting concerns around foreseeable adverse shock from energy supply challenges + 7 Source: Moody's, S&P and Fitch#8Slovakia's Resilience to Russia/Ukraine Developments 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 1 The Slovakian economy is forecast to grow despite the war in Ukraine While Russia's aggression in Ukraine has given rise to challenges for Slovakia's economy, the country is forecast to nevertheless achieve positive economic growth in the coming years. In 2023 Slovakia's growth is estimated to be 1.3%, above the eurozone average of 0.2% 6,0% 4,0% 2,0% 4,9% Real GDP Growth & Forecasts (%) 2 Slovakia has reduced its dependency on Russian energy imports Since the inception of the Russian invasion of Ukraine, the Slovak Republic has reduced its energy dependence on Russia dramatically The share of energy imports from Russia has declined to roughly 43% from 70% at the beginning of 2022 90% 76% 70% 1,7% 1,8% 1,3% ! 50% Share of Energy Imports from Russia (%) 62% 51% 0,0% 30% 2021 2022 2023 2024 Real GDP growth (in %) i Russian invasion of Ukraine L 1.21 3.21 5.21 7.21 9.21 11.21 1.22 3.22 5.22 7.22 9.22 11.22 1.23 3 Slovakia's status as an NATO and EU member-state represents 4 Slovakia's overall trade is overwhelmingly EU-focused a strong security guarantee Share of Total Imports/Exports (%, 2022) 90% Slovakian defence policy is pursued through the joint efforts of the Slovak Armed Forces and NATO/EU allies. As a member of NATO and the EU since 2004, Slovakia has the following security guarantees in place: 80% 80% 70% 62% 60% OTAN NATO Article 5: By focusing on NATO's deterrence and defence efforts, Slovakia works with Allies to be able to deter more effectively and, if necessary, to defend with all the means and capabilities needed to do so EU Mutual Defence Clause: This binding clause provided that if an EU country is the victim of armed aggression on its territory, the other EU countries have an obligation to aid and assist it by all the means in their power 20% 10% 50% 40% 30% 7% -3% 8% 1% 4%1% 3%1% 1%1% 0%0% 0% EU China Russia United United Ukraine Kingdom States Belarus Exports Imports + 8 00 Sources: Statistical Office of the Slovak Republic - All figures are rounded#9Government Proactively Manages Inflation 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency The government has delivered an aid package for households and firms to cope with high energy prices The additional aid package is expected to take place between 2025 to 2027 ✓ This package is expected to decrease inflation in years to come Expected price increases of energies Inflation forecast (HICP) 50% 16% 40% 14% 12% 30% 10% 20% 8% 10% 6% 0% 4% -10% 2% -20% 0% 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 ■Electricity Gas Heat キ 9 Inflation Forecast February 2023 Inflation Forecast September 2022 Source: Ministry of Finance of Slovak Republic#10Government Mitigates Impact of Energy Market Disruption 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency Allocated budgetary energy measures for 2023 Measure Energy Package Details • Implementation Timeline Budgetary Cost (%GDP) Cap on gas supply prices Jan'23 1.2 (households) Price caps for electricity Jan'23 0.3 distributors (households) Cap on heating supply prices Jan'23 0.3 (households) Support of selected vulnerable Jan'23 0.3 customers (gas + electricity) Capped electricity and gas prices for regulated small companies Jan'23 0.2 Capped electricity and gas prices for unregulated companies Dec'22 0.1 H 10 Measures targeted at households (1.8% of GDP) include (w/o VAT): ✓ Regulated annual increase of gas prices (max 15%) and heating prices (max 20%) ✓ Cap on electricity distribution fees and system charges Reimbursements of costs above €199 price of electricity and €99 of gas for companies (0.3% of GDP): 100% for regulated small and medium firms 80% for unregulated companies ✓ The costs of measures offset by taxation of excess profits and EU funds (estimated at 1.6% of GDP) Source: Ministry of Finance#11II Economic developments 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 11#12Transformational Success Story ✓ Sustainable and robust GDP growth Commitment to fiscal discipline ✓ High share of investment to GDP ✓ Export-oriented economy 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency SLOVAKIA Real GDP Growth (in %) Private Consumption Public Consumption Gross fixed capital formation 2017 2018 2019 2020 2021 2022 2023e 2.9 4.0 2.5 (3.3) 4.9 1.7 1.3 4.7 4.2 2.6 (1.1) 2.7 5.7 0.7 1.1 0.5 4.5 (0.6) 4.2 (4.3) 2.3 2.9 2.8 6.7 (10.9) 3.5 5.9 14.6 Exports (goods and services) 3.7 5.1 0.8 (6.3) 10.9 2.3 1.3 Imports (goods and services) 4.1 4.8 2.2 (8.1) 12.1 4.0 4.2 GNI (real growth p.c. in %, adjusted by GDP deflator) 3.8 4.3 1.7 (2.2) 3.0 1.9 0.7 Employment Growth (% p.a.) 2.2 2.0 1.0 (1.9) (0.6) 1.8 0.5 Unemployment rate (% of labour Force) 8.1 6.6 5.8 6.7 6.8 6.1 5.8 Inflation (HICP) (% p.a.) 1.4 2.5 2.8 2.0 2.8 12.1 9.7 General government balance (% of GDP) (1.0) (1.0) (1.2) (5.4) (5.4) (2.0) (6.3)* * Estimate from Stability Programme of the SR for 2023-2026 (April 2023) including energy one-off measures with net impact of 1.7% of GDP. Sources: Eurostat, SO SR, MoF February 2023 Forecast, EC for GNI in current prices per head of population. + 12#13Slovakia - A Solid Performer among Eurozone Countries 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency Slovakia is one of a few EU countries that have already received proceeds from RRP The war in Ukraine and the energy crisis is a headwind but competitive external sector, resilient labour market and industrial production supported by drawing from EU funds and RRP suggest a solid growth potential Convergence is almost complete for the unemployment and inflation rates Slovakia's Public Debt level back under 60% of GDP, more than 30 p.p. below the Euro Area average (2022) Real GDP growth (%) Inflation- HICP (%) Slovakia 2021 2022 Belgium 2021 2022 Finland 2021 2022 Eurozone 2021 2022 4.9 1.7 6.3 3.2 3.0 2.1 5.3 3.5 2.8 12.1 3.2 10.3 2.1 7.2 2.6 8.4 Unemployment rate (%) 6.8 6.1 6.3 5.6 7.7 6.8 7.7 6.8 Current Account Balance (% of GDP) (2.5) (8.3) 0.4 (3.5) 0.5 (3.9) 2.3 0.8 Budget Balance (% of GDP) (5.4) (2.0) (5.5) (3.9) (2.8) (0.9) (5.3) (3.6) Structural Budget Balance (% of pot. GDP)* (5.3) General Government Gross Debt (% of GDP) 61.0 57.8 (4.3) (5.2) (5.5) (2.1) (1.1) (4.2) (3.6) 109.1 105.1 72.6 73.0 95.5 91.6 + 13 Source: Eurostat, ECB, *EC Autumn Economic Forecast 2022#14140 135 130 125 120 115 110 105 100 95 90 Strong Productivity and GDP Growth 2AR RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency Slovakia's real labour productivity and GDP per capita have consistently grown faster compared to peers Real labor productivity per hour worked GDP per capita (chain-linked volumes) 2010=100 2007 2008 Slovakia 2009 2010 2011 Finland 2012 2013 2014 2015 2016 2017 2018 Euro area (20 countries) 2019 2020 2021 2022 Belgium* += キ 14 135 130 125 120 115 110 105 100 95 90 2007 2008 2009 Slovakia 2010-100 2010 2011 Finland 2012 2013 2014 Belgium 2015 2016 2017 2018 Euro area (20 countries) 2019 2020 2021 2022 Source: Eurostat *Data for Belgium for 2022 was not available as of 9.5.2023#15Ongoing Economic Convergence to EU28 DK 140,0 Nations that converged closer to EU NL AT 120,0 BE DE FR MT SE UK 100,0 SI LTEE IT CZ CY Slovakia 80,0 PL ES RO HU PT LV HR EL 60,0 BG GDP per capita in PPS EU27=100 (2022) 40,0 20,0 20,0 40,0 60,0 80,0 100,0 120,0 140,0 GDP per capita in PPS EU27=100 (1995) + 15 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency Successful transformation to market economy Fast speed of convergence: 18% in 27 years* Current level: 67% of the EU27 GDP per capita (2022) Source: Eurostat *For further information about Slovak GDP per capita in PPS visit: https://www.mfsr.sk/en/finance/institute-financial-policy/policy- briefs/on-purchasing-parity-march-2023.html#1618% 16% 14% 12% 10% 8% 6% 4% 2009 Low Unemployment Rate Drives Private Consumption 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency ✓ The unemployment rate reached historical minimum in 2019 Although the pandemic increased the unemployment rate slightly, the shock has been weathered Low unemployment rates are expected to drive private consumption and thus economic growth in years to come Unemployment Evolution versus Peers 2010 2011 2012 2013 Belgium 2014 2015 2016 2017 -Slovakia Euro area (20 countries) キ 16 2018 Finland 2019 2020 2021 Source: Eurostat 2022 6,8% 6,1% 5,6%#17War refugees support the Slovak labor market 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency ✓ Since the beginning of the war, 115,000 Ukrainian refugees, mostly women and children, have applied for temporary refugee status in Slovakia. ✓ So far, 25% of 18-64 year olds have found a job. Refugees mainly occupy low-skilled positions in manufacturing and services, and their inclusion represents a positive risk for the Slovak labour market. 91 84 77 70 63 56 49 21 14 52258 2270 42 35 Age distribution of Ukrainian refugees Women Men 2000 1500 1000 500 0 17 500 1000 1500 2000 Source: Ministry of Interior of the SR#18Key Trading Partners in 2022 Imports By Geography (%) Exports By Geography (%) 29% 14% ■Germany ■ Czechia ■ Russia ■China ■ Korea 15% 21% 1% 1% 9% ■ Poland 2% ■ Hungary 2% 2% ■ Vietnam 3% 8% ■ Italy 3% ■France 4% ■ Austria 7% ■ Romania 5% 9% 2% 3% 6% ■ Spain 5% 3% 6% 8% 4% 5% 5% ■Netherlands ■United Kingdom Other キ 18 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 12% ■Germany ■ Czechia ■ Hungary ■ Poland France ■Austria ■ Italy ■United Kingdom ■ United States ■ China ■ Romania ■ Spain ■Netherlands ■ Ukraine ■Sweden Other Source: Statistical Office of the Slovak Republic#19Key Export and Import Products in 2022 Imports by Product (%) Exports by Product (%) 9% 30% ว 6% 10% 15% 15% ■Machinery, electrical equipment ■Mineral products ■ Vehicles ■ Base metals and articles of base metal 3% ■ Products of the chemical industries 5% Plastics and articles thereof 6% ■Prepared foodstuffs; beverages; tobacco ■ Miscellaneous manufactured articles ■Textiles and textile articles ■ Optical ■ Other 11% 8% 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 28% 31% ■ Vehicles ■Machinery, electrical equipment ■ Base metals and articles of base metal ■Mineral products Plastics and articles thereof Products of the chemical industries ■ Miscellaneous manufactured articles ■Prepared foodstuffs; beverages; tobacco ■Textiles and textile articles ■Paper, cellulose ■ Other キ 19 Source: Statistical Office of the Slovak Republic#20EU Recovery and Resilience Plan Supports Economic Growth 24 RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency RRP contributions to Slovakia's expected GDP growth Preliminary plan of allocating RRP resources (EUR million) 5,0% 2022 2023 2024 2025 2026 49 4,0% RRP 1,647 2,394 1,817 334 3,0% Public investment 11 904 1,633 1,209 128 16 122 106 97 31 2,0% Compensations Intermediate 1,0% 4 86 89 56 20 consumption 0,0% Soc. Transfer in kind 2 7 7 3 0 -1,0% Social transfers 0 24 24 24 0 -2,0% GFCG firms 1 325 422 316 75 2022 2023 2024 2025 2026 2027 other factors RRP contribution GDP growth rate GFCG households 16 179 112 112 80 RRP is expected to boost the economy mainly in 2023 and 2024 • • Slovakia will be a key beneficiary of the Recovery and Resilience Facility, boosting its productivity and accelerating the green and digital transformation Public investment funded by the RRP will support the output by almost EUR 1 billion in 2023 and EUR 1.6 billion in 2024 Slovakia has already received more than EUR 458 million with the first tranche and EUR 709 million with the second tranche, the approval of the third tranche is expected of the amount approx. EUR 815 million キ 20 20 Source: Government Office of the Slovak Republic, MoF#21Allocation of EU Recovery and Resilience Plan Funds Area Component Resources (million)* Total Renewable energy sources and energy infrastructure 207 Building renovation 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dob and Liquidity Management Agency 620 Green Economy Sustainable transport Decarbonisation of industry 759 EUR 2,103 million 368 Climate change adaptation 149 Availability, development and quality of inclusive education 210 Education Education for the 21st century 449 EUR 813 million Improvement of universities' performance 154 Science, research, Effective management, higher financing for science, research, innovation and digital economy 576 EUR 675 million innovation Attraction and retentions of talents 99 Modern and accessible healthcare Health Mental healthcare Long-term care 1,072 83 EUR 1,402 million 247 Improved business environment 11 Judicial system reform 233 Effective public administration Anti-corruption and anti-money laundering measures, safety and security of inhabitants 209 EUR 1,014 million Digital Slovakia 562 Sound public finance ㄝ 21 Source: Government Office of the Slovak Republic *The amounts are based on current prices; without taxes; final investments may differ from the estimated expenditures#22Structural Reforms for Long-Term Development 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency The Slovak government remains committed and continues to implement structural reforms to boost competitiveness and quality of life for the country. EU Recovery and Resilience Plan Investment plans from 2021-2026 in Slovakia will focus on the following 5 key structural areas: Better education Healthy life Effective public administration and digitalization Green economy Competitive and innovative economy Slovakia is the fifth EU member state to be granted approval by the EC for its Recovery and Resilience Plan. Improving Tax Collection and Combating Tax Evasion VAT gap continued its downward trend in 2021 and closed the year at 12.1% It decreased further in 2022 due to these reasons: Increased amount of cashless payments in the sectors with the high VAT gap Introduction of online cash registers and online invoice system to be introduced soon Value for Money (VfM) Initiative Government initiative to raise public spending efficiency (started in 2016) Compulsory spending reviews of at least 50% of government expenditures within the electoral cycle Reinforced the Ministry of Finance mandate in 2020: Strengthening the role of the VfM Unit in the investment process and managing the investment centralized budget Efficiency check of investment projects exceeding € 1mn Strengthened fiscal framework Multi-annual expenditure ceilings as a new operational fiscal rule (approved and fully implemented since 2024) Refinements of Constitutional Act on Fiscal Responsibility (under political discussion) • • Recalibrations of debt thresholds, escape clauses, and respective sanctions Net debt basis to provide flexible liquidity management Stronger emphasis on analytical input into the budgetary process (under discussion) キ 22#23III Fiscal Policy 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 23#24Prudent Fiscal Policy to be Reintroduced in 2024 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency In 2022 Slovakia reached deficit of 2.0% of GDP mainly due to inflow of robust tax revenues affected by inflation and withdrawal of pandemic measures. Government budget balance to rise at estimated 6.3 % of GDP in 2023 reflecting temporary energy measures and lagged expenditure related to inflation, as well as government measures targeted at families and pensioners that will materialize in 2023. The approved expenditure ceilings for 2023-2025 will be updated for whole period of new incoming government (2024-2028), requiring structural adjustment as from 2024. In addition, in Stability Programme (April 2023) the Government outlined new budgetary targets to bring deficit close to 2% of GDP up to 2026 in reaction to requirements of activated EU fiscal rules since 2024. % of GDP 0 -2 -4 -6 60 -8 -10 General Government Balance EU deficit rule (-3% of GDP) ***** 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023F ■Euro area (20 countries) Belgium Finland Slovakia Source: Eurostat, EC Autumn forecast 2022 キ 24 24#25Government's Objective to Stabilize Post-Pandemic Debt 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency ✓ Although increased in recent years, public debt level remains still well below peer countries. ✓ In 2022 public debt returned below 58 % of GDP. The medium-term consolidation strategy would stabilize debt safely below 60% of GDP in following years supported by high nominal GDP growth. 180 160 140 120 100 80 60 40 20 0 Projected Public Debt-to-GDP Ratio 2024 2023 57,4 EE LU IE LV LT NL SK H 73,3 108,6 MT DE HR SI FI AT CY PT BE + 25 25 FR ES IT EL Source: EC Autumn forecast 2022#26The Main Fiscal Reform of Managing Public Finance 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency In 2023 the Parliament approved ceilings on public expenditure for 2023-2025. The ceilings now serve as a main operation tool to achieve long-term fiscal sustainability starting from 2023 and thereafter for whole election period as from 2024 ✓ Calculation of expenditure limits is based on risks of long-term sustainability indicator and executed and updated by independent Council for Budget Responsibility ✓ Required structural consolidation of 0.5% of GDP in case of high/medium risks and 0.25% in case of low risks Expenditure ceilings incorporate escape clauses that can be triggered in circumstances of economic ✓ downturn of 0% or -3%, or one-off measures related to extraordinary events ✓ Ceilings are also tied to EU general escape clause (still active in 2023) Amendment of debt brake rule that would strengthen waiting for final approval by Parliament ✓ Main changes come with substituting indicator from gross to net debt ✓ Rationalizing of sanctions while enhancing their enforcement ✓ Modification of escape clauses to ensure flexibility キ 26#2724RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency IV Debt Management 27 27#28Debt Management in 2022 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency Gross issuance originally planned at EUR 6.0 billion Positive development in State budget deficit mostly due to elevated revenues from inflation - actual deficit of EUR 4.5 billion lower than budgeted EUR 5.5 billion ✓ Gross issuance at lower level than planned Substantial cash buffer Issued EUR 5.2 billion bonds EUR 1.0 billion - syndicated transaction in October - 10y benchmark EUR 4.2 billion via regular auctions Loans received in amount of EUR 0.1 billion ✓ One tranche of EIB loan Buybacks at the end of 2022 The goal is to decrease the redemption amounts in the next year and invest cash buffer with no credit risk Willingness of investors to sell was very limited - investors prefer to hold till maturity H 28 Source: Ardal, as of April 2023#29Debt Management in 2022 (cont'd) Total redemptions EUR 1.3 billion equivalent EUR 1.16 billion equivalent bond matured in May 2022 (USD 1.5 billion) EUR 0.14 billion equivalent bond matured in April 2022 (CHF 0.175 billion) Bond auctions stable on third Monday of each month except July, August & December Four bonds offered in all auctions Special auction of 2068 bond with remuneration in June - followed investor demand 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency Financing still relatively cheap and manageable Weighted average yield at 2.43% p.a. (new issuance); weighted average maturity 12.1 years (new issuance) ✓ Average yield of outstanding bond portfolio as of December 2022 at 1.66% p.a. (1.31% p.a. including State treasury funds) Strong presence of ECB ECB holds more than 40% of issued government bonds Continuing reinvestments – announced decrease in reinvestments but no binding timeline for any of the two programs キ 29 29 Source: Ardal, as of April 2023#30Debt Management Outlook in 2023 2AR RDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency Total redemptions EUR 4.6 billion equivalent EUR 3.0 billion - bond matured in February EUR 1.5 billion - bond maturing in November EUR 0.14 billion equivalent - CHF 0.175 billion bond maturing in October Uncertainty about state budget cash deficit ✓ Cash deficit of state budget at EUR 8.3 billion (worst case and very unlikely scenario according to ARDAL) Total gross financing needs formally at EUR 12.9 billion and will be covered mostly by issuance EUR 4.0 billion can be issued via regular monthly auctions - EUR 2.2 billion already issued - EUR 4.0 5.0 billion can be issued via syndications - EUR 3.5 billion already issued No T-bills No specific loans planned but could be arranged based on market conditions ✓ Total issuance planned at EUR 8.0 - 9.0 billion - the rest can be covered by State Treasury funds development + liquidity buffer optimization + realistic deficit compared to estimates Foreign currency issuances are less likely Focus to remain on Euro-denominated SLOVGB issuance. キ Source: Ardal, as of April 2023 30#31Well Balanced Bond Redemption Profile ✓ Smooth redemption profile not exceeding EUR 6.5 billion redemption in any single year ✓ Only EUR 1.6 billion remaining redemptions in 2023 EUR bln 7,0 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Slovakia Bond Redemptions 24R RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency 2067 2065 2063 2049 2047 2045 2043 2041 2039 H 31 Available additional amount to be sold through auctions and syndicate 2061 2059 2057 2055 2053 Source: ARDAL, as of April 2023 2051 2037 2035 2033 2031 2029 2027 2025 2023 Maturing bonds#32Net Funding Development Increased issuance after the COVID outbreak ✓ Low redemptions between 2019-2022 Net funding volume expected to decrease in line with fiscal consolidation Issuance and Redemptions 12,0 10,0 8,0 6,0 4,0 2,0 2ARD RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency 0,0 2016 2017 2018 2019 2020 2021 2022 2023 Issuance Redemptions Net funding volume H 32 Source: ARDAL, as of April 2023 *2023 is estimate#33Government Bond Portfolio Metrics 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency ✓ Average maturity increased steadily since 2012 – maintained above 8 years since 2018 At the same time average YTM was reduced significantly until 2021 (record low 0,24% issuance in 2021) Increase in yields since 2022 in line with overall development in euro area + relatively long dated issuance in order to maintain risk parameters at exceptionally safe levels Average Maturity and Yield Metrics for Slovakia 9,0 4,0% 8,5 3,5% 8,0 3,0% 7,5 2,5% 7,0 2,0% 6,5 1,5% 6,0 1,0% 5,5 0,5% 5,0 0,0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Avg. Maturity (years, Ihs) Avg. YTM (new issuance, rhs) キ 33 Source: ARDAL, data as of April 2023 *2023 is average for January - April#34Risk Indicators Comparison As of 31 March 2023 20 RDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency Slovakia Belgium France Slovenia Latvia Germany Austria Euro Area Average Life of Debt (years) 8.81 10.06 8.54 10.33 7.01 7.38 10.65 8.45 Refinancing Risk 1Y (% of total debt) 2.85 15.68 14.29 29 5. 5.90 12.86 19.22 18.17 15.12 Refinancing Risk 5Y (% of total debt) 34.66 42.60 45.87 35.40 57.69 52.60 52.57 46.80 Refixing Risk 1Y (% of total debt) 2.85 16.11 24.79 9 6. 6.21 13.09 23.92 18.75 23.12 Refixing Risk 5Y (% of total debt) 34.66 43.03 52.28 35.48 57.80 57.23 53.11 51.26 Foreign Debt to Total Debt (before derivatives) % 0.79 1.66 0.00 1.93 0.00 0.00 4.24 0.57 Foreign Debt to Total Debt (after derivatives) % 0.01 0.00 0.00 0.08 0.00 0.00 0.00 0.03 Prudent risk management considering potential scenarios ✓ Average life of debt of Slovakia comparable to Euro Area level and higher rated issuers ✓ Sufficient space for both short and medium term financing キ 34 Source: ESDM, data as of March 2023#35Interest Payments Development 24 RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency Interest payments were at historical lows as a percentage of GDP in 2022 and were declining even in nominal terms Reversal of trend since 2023 in line with overall development in Eurozone - however the increase is limited and spread in time due to prudent risk management in the past Increase as a % of GDP even more limited 1,4 1,2 Interest Payment Dynamics for Slovakia (accrual) 1 0,8 0,6 0,4 0,2 0 2014 2015 2,00% 1,50% 1,00% 0,50% 0,00% 2016 Interest payments in EUR bn (lhs) 2017 2018 2019 2020 2021 2022 2023 Interest payments in % of GDP (rhs) キ 35 Source: ARDAL, data as of April 2023 *2023 is estimate for whole year as of April 2023#36Low Currency Risk and Diversified Investor Base 2ARDA RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and 1iquidity Management Agoney ✓ Almost no foreign currency debt The only USD bond matured in 2022 Currency Breakdown (%) ✓ Increased portfolio holdings of residents due to PSPP and PEPP Investor Type Breakdown (%)* 0,01% 0,2% 0,7% ■ EUR ■ NOK 45,9% ■ CHF 50,7% 99,1% ■ JPY 0,0% 3.4% ■ Resident - Banks ■ Resident - other institutions ■ Resident - retail ■ Non-residents キ 36 *Bonds held in Slovak Central Securities Depository Source: ARDAL, data as of April 2023#3720RD RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency MTS Slovakia 106 Introduction of MTS Slovakia in February 2018 ✓ Quoting obligation for Primary Dealers ✓ Average monthly trading volume EUR 98 million since inception Slovak PDs Secondary Market (EMAR) 96 EUR mln 1 250 0 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 1 000 157 750 52 122 168 124 114 88 38 77 272 44 1217 122 127 66 500 025 994 927 756 812 86 36 89 791 578 621 640 20 630 648 695 712 52 722 670 696 726 250 508 559 505 351 326 389 387 277 36 176 Nov-21 Dec-21 Jan-22 Feb-22 キ 37 ■EMAR without MTS MTS Mar-22 Apr-22 May-22 Jun-22 Jul-22 Mar-23 Feb-23 Jan-23 Dec-22 Nov-22 Oct-22 Sep-22 Aug-22 Source: ARDAL, data as of March 2023#38Government Bond Yields 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% -0,5% -1,0% Slovakia 10Y Government Bond versus Peers Jan-15 Jul-15 Jan-16 -10y-Slovakia Jul-16 Jan-17 Jul-17 -10y-Germany Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 10y-Belgium Jul-20 -10y-France キ Ho 38 2ARD RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and Liquidity Management Agency Jan-21 Jul-21 10y-Finland Jan-22 Jul-22 Jan-23 10y-Slovenia Source: Bloomberg as of April 2023#39Auction Calendar 2023 - Bonds Auction Date 16 January 20 February 20 March 17 April 15 May Government Bonds Settlement Date 18 January 22 February Offered Bonds 2027, 2032, 2036, 2047 2025, 2027, 2051 to be decided 22 March 19 April 2025, 2027, 2032, 2035 2025, 2032, 2035, 2051 17 May 2027, 2032, 2035, 2036 21 June 20 September to be decided 18 October to be decided 20 November 22 November to be decided 19 June 18 September 16 October Auctions on the third Monday of the month - no auction in July, August and December ✓ Settlement T+2 (Wednesday) 24R RDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency ✓ ✓ Non-competitive part of the auction usually on the next day (Tuesday) with settlement T+1 (Wednesday) Possibility to include additional auctions based on the funding requirements and market conditions + 39 Source: ARDAL#40Primary Dealers of the Slovak Republic 2ARD RDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency Barclays Bank Ireland PLC ✓ Citibank Europe PLC ✓ Československá obchodná banka, a.s. (KBC Group) Deutsche Bank AG HSBC Continental Europe S.A. J.P. Morgan AG Slovenská sporiteľňa, a.s. (Erste Group) Tatra banka, a.s. (RBI Group) Všeobecná úverová banka, a.s. (Intesa Sanpaolo Group) キ 40 +%#41V ✓ Banking Sector 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency 41#42Fundamentally Robust and Well-capitalised Banking System 20 RDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency Asset Quality Capital Adequacy 19.0 18.5 18.0 17.5 17.0 16.5 16.0 15.5 15.0 14.5 2019 2020 2021 2022¹ 1 2018 2019 2020 2021 2022 NPLs as % of Total Gross Loans and Advances Tier 1 Capital Ratio (%) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2018 - ✓ Supported by measures extended by the National Bank of Slovakia, together with the ECB and European Banking Authorities, the banking sector is well capitalized, liquid, and profitable Non-performing loans are on a downwards trend ✓ Large capital buffers This gives banking system sufficient capital buffers to withstand a wide range of shocks + 42 175 Source: European Central Bank - Statistical Data Warehouse Note: 1. Data up to and including Q3 2022#43VI Contemplated Transaction 24RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Dobi and Liquidity Management Agency 43#44Transaction Term Sheet 2ARDA 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency Issuer: Ratings: Status: Format: Currency: Tenors: Size: Maturity: Coupon: Denominations: Governing Law / Listing Use of Proceeds: Joint Bookrunners: Target Market: The Slovak Republic acting through the Ministry of Finance and the Agency A2 (negative) by Moody's / A+ (stable) by S&P / A (negative) by Fitch Senior Unsecured Regulation S only Euro Single Tranche: 10-year Benchmark [ ] June 2033 Fixed (Annual, ACT/ACT, ICMA) EUR 1 × EUR 1 Slovak Law / Bratislava Stock Exchange (Main Market) The net proceeds of issue of the Notes will be used for funding of the state debt of the Slovak Republic. Citi, CSOB (KBC Group), HSBC, Tatra Banka (Raiffeisen Bank International) EU MiFID II - Eligible counterparties, Professional and Retail Clients (all distribution channels) + 40#45Contacts Debt and Liquidity Management Agency Agentúra pre riadenie dlhu a likvidity - ARDAL Radlinského 32 813 19 Bratislava Slovak Republic Daniel Bytčánek Managing Director www.ardal.sk Reuters/Bloomberg: DLMA [email protected] Peter Šoltys Head of Debt Management Department [email protected] G TÜV SÜD ISO 9001 キ 43 TÜV SÜD ISO 27001 2ARDAL 2003 Agentúra pre riadenie dlhu a likvidity. 2023 Debt and Liquidity Management Agency#46Disclaimer 20 RDAL 2003 Agentúra pre riadenie dlhu a likvidity 2023 Debt and liquidity Management Agency THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT HAS BEEN PREPARED FOR INFORMATION PURPOSES ONLY. THIS PRESENTATION IS NOT INTENDED TO CONTAIN ALL OF THE INFORMATION THAT MAY BE MATERIAL TO AN INVESTOR. BY READING THE PRESENTATION SLIDES YOU AGREE TO BE BOUND AS FOLLOWS: This document is not for distribution in, nor does it constitute an offer of securities in, the United States, Canada, Australia or Japan. Neither the presentation nor any copy of it may be taken or transmitted into the United States, its territories or possessions, or distributed, directly or indirectly, in the United States, its territories or possessions or to any US person as defined in Regulation S under the US Securities Act 1933, as amended (the "Securities Act"). Any failure to comply with this restriction may constitute a violation of United States securities laws. Accordingly, each person viewing this document will be deemed to have represented that it is located outside the United States. Securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration. The Issuer has not registered and does not intend to register any securities that may be described herein in the United States or to conduct a public offering of any securities in the United States. This communication is being directed only at persons having professional experience in matters relating to investments and any investment or investment activity to which this communication relates will be engaged in only with such persons. No other person should rely on it. This document is not for distribution to retail customers. This presentation may only be distributed to and is directed solely at (a) persons who have professional experience in matters relating to investments falling within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (b) high net worth entities falling within article 49(2)(a) to (d) of the Order, and other persons to whom it may be lawfully communicated, falling within article 49(1) of the Order (all such persons together being referred to as "relevant persons"). This presentation may include forward-looking statements. Forward-looking statements involve all matters that are not historical by using the words "may", "will", "would", "should", "expect", "intend", "estimate", "anticipate", "target", "believe" and similar expressions or their negatives. Such statements are made on the basis of assumptions and expectations that the Issuer currently believes are reasonable but may not materialize. Any forward-looking statements made by or on behalf of the Issuer speak only as at the date of this presentation. The Issuer undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document. NO ACTION HAS BEEN MADE OR WILL BE TAKEN THAT WOULD PERMIT A PUBLIC OFFERING OF ANY SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION IN WHICH ACTION FOR THAT PURPOSE IS REQUIRED. NO OFFERS, SALES, RESALES OR DELIVERY OF ANY SECURITIES DESCRIBED HEREIN OR DISTRIBUTION OF ANY OFFERING MATERIAL RELATING TO ANY SUCH SECURITIES MAY BE MADE IN OR FROM ANY JURISDICTION EXCEPT IN CIRCUMSTANCES WHICH WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS AND REGULATIONS.THIS DOCUMENT DOES NOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ISSUES RELATED TO AN INVESTMENT IN ANY SECURITIES OF THE ISSUER. PRIOR TO ENGAGING IN ANY TRANSACTION, POTENTIAL INVESTORS SHOULD ENSURE THAT THEY FULLY UNDERSTAND THE TERMS OF THE SECURITIES AND ANY APPLICABLE RISKS. THIS DOCUMENT IS NOT A PROSPECTUS FOR ANY SECURITIES REFERENCED HEREIN AND NO PROSPECTUS HAS BEEN OR WILL BE PREPARED AND APPROVED BY RELEVANT AUTHORITIES IN RESPECT OF ANY SECURITIES REFERENCED HEREIN IN ANY JURISDICTION. INVESTORS SHOULD ONLY SUBSCRIBE FOR ANY SECURITIES DESCRIBED HEREIN ON THE BASIS OF INFORMATION IN THE RELEVANT OFFERING CIRCULAR AND TERMS AND CONDITIONS AND NOT ON THE BASIS OF ANY INFORMATION PROVIDED HEREIN. キ 44