#1INVESTOR PRESENTATION APRIL 2022 Chez Bouboule KIGAWARY Wallonie service public SPW#2Table of contents Part. I BELGIUM FEDERAL STRUCTURE Part. II WALLONIA KEY FIGURES Part. III DEBT MANAGEMENT & FUNDING PLAN Part. IV TIMELINE BOND ISSUANCES Wallonie service public SPW 2#3BELGIUM FEDERAL STRUCTURE Wallonie service public SPW Part.I#4Part. I Wallonia in a nutshell O O O O 3 Regions 3 Communities The Flemish Community The Flemish Region The Brussels-Capital Region The German-speaking Community The Walloon Region The Walloon and Brussels Federation Regions Operating Framework Territory Economy Social Services Local Authorities O Communities Operating Framework Education Culture Sport Wallonie service public SPW 4#5Part. I Wallonia in a nutshell 450 km of waterways 81,207 km of roads 1,605km of railway network 3.63 million inhabitants (33% of Belgium) 16,901 km² (55.1% of Belgian territory) French speaking German speaking GDP growth rate evolution 2016-2021 8,0 6,0 4,0 40 2,6 2,6 2,0 1,51,3 1,9 1,81,6 1,81,8 1,61,71,6 6,1 5,5 5 0,0 2016 2017 2018 2019 2020 2021 -2,0 -4,0 -6,0 -5,7 -6,2 -6,4 -8,0 Wallonia ■Belgium Euro zone (Source: IWEPS) Wallonia in Europe Amsterdam London Paris Luxembourg Frankfurt 2 airports (Charleroi, Liège) Wallonie service public SPW 5#6Part. I Wallonia in Belgium - Key political acts 1 2 The Sixth State Reform (2014) AUTONOMY EMPOWERMENT The Sixth State Reform enhances the fiscal autonomy of the federated entities and transfers the majority of powers from the federal level to the regional / community levels. Increased fiscal autonomy: regional personal income tax (IPP regional) and fiscal expenses (ex: mortgage credits). List of new transferred powers: family benefits, healthcare, labour market, road safety, tenancy regulation, driving education, technical inspection, houses of justice ... Special Finance Act (1989, 1993, 2014) STATE FINANCIAL GUARANTEE Article 49 of the Special Finance Act organizes and supervises the delegation of debt management in the federated entities. For example, the role of CSF (Conseil Supérieur des Finances) is to evaluate the financial plans of the federated entities, to formulate recommendations and in some cases to decide to cap the entity's lending capacity. Article 54 §2 of the Special Finance Act specifies that in case of an insufficient payment or in the event of delay of payment by the federal state, the Communities and the Regions can contract a loan guaranteed by the Federal State and interest costs are taken on by the Federal State. Wallonie service public SPW 6#7WALLONIA KEY FIGURES Part.II Item 3 b Item 1 0 Item 2 Item 2 Item 3 Item 4 30 0 Item 5 15 30 0 15 Item 3 Item 4 Wallonie service public SPW#8Part. II Wallonia - Regional competencies Equipment and Transport Mobility - Waterways - Sport Facilities - Heritage Natural Ressources Environment - Water - Agriculture - Conservation of Nature Quality of Life Town and Country Planning - Housing - Integration of Disabled People - Social Action - Health - Energy - Rural Renovation - Waste Local Authorities Municipalities - Provinces - School Buildings - Public Center for Social Assistance Economic Activities Economy - Employment & Professional Training Foreign Trade - International Relationships - Development Cooperation Research Technologies - Tourism - EU Structural Funds - Wallonie service public SPW 8#9Part. II Wallonia - Institutions and Public Services Entities Parliament of Wallonia Government of Wallonia The legislative assembly of Wallonia is composed of 75 members who are directly elected by universal suffrage for a five years term. They sit in plenary sessions and in committees with the aim to: ☐ Adopt decrees (regional laws); □ Express positions (resolutions) social issues; □ Exercise the on over Government supervision (through questions). The Government is led by the President, Minister- currently supported by 7 ministers, each in charge of several domains of activity. In order to execute its missions, Government the delegates the operational activities to: SPW (Service Public de Wallonie) regional administration UAP (Unités d'Administration Publiques wallonne) a number of Public Administration Units - Wallonia Services Entities (SPW-UAP) SOFICO Société Publique de Gestion de l'Ea SPW General Secretary SPW Support SPW Digital SPW Mobility & Infrastructure TEC SPW Agriculture, Natural Resources & Environment La société wallonne des eaux SPAQUE ISSEP de service public SPW Territory, Housing, Heritage & Energy the SociŁewellomedorádic social LE FOREM ICWAPE Fonds du Logement des Familles nombreuses de Wallonie wallonne du logement SPW Interior & Social Action AVIQ Agence pour une Vie de Qualité Pari Sant Handicap CRAC SPW Economy, Employment & Research IFAPME SPW Finances Debt Cell Unit Sowalfin ► Logo's of Public Administration Units are placed in their areas of competence Wallonie service public SPW 9#10Part. II Wallonia - Commercial dynamics Geographical Export Sharing in 2020 America 16% Rest of Europe 14% Luxembourg 3% Others Asia 2% 6% France 21% Germany 15% Main Export Products in 2020 42,50% Wallonie service public SPW ......... 10,70% 8,40% 7,10% 5,70% 5,40% 4,90% 4,10% 11,20% Machinery Transport Prepared Plastic and Mineral Optical and Other (< materials foodstuffs, products precision instruments rubber 3%) Base Spain Netherlands 8% 5% United-Kingdom Italy 5% 5% Chemical and industry metals and electrical products articles of base metal equipment beverages, and tobacco : Source Walloon region Sources ICN, IWEPS Excluding inter-regional exports inside Belgium Wallonia - A world of openness Wallonia is a region that is naturally open to the world, a place where languages and cultures meet, with a young, internationally mobile and increasingly multilingual population On average, Walloon businesses make 70% of their turnover on exports, which is one of the highest export rates in the world (EU average: 30%) • Most growing economic sectors: Pharmaceutical, Logistics, Food & Beverage 10#11Part. II Focus on Wallonia Budget Figures Total Expenditure evolution (€ million) ■Reported Adjusted Expenditures breakdown by source (2020-2021) 2020 2% 0,4% 3% 8% 5% 6% 18.893 19.643 7% 16.926 13.589 8.831 9.448 2017 2018 2019 2020 2021 2022 Total Revenue evolution (€ million) ■Reported Adjusted 2021 8% 68% Health 32% ■Employment & Training ■Local authorities & social actions ■Mobility & infrastructure 16% 12% ■Debt amortization & costs 4% -0,4% 3% 66% 9% 30% 6% 14.437 5% 13.211 12.286 11.313 6% 8.739 7.859 2017 2018 2019 2020 2021 2022 8% 12% ■Parliament, Government services, Admin ■Land use planning, housing, heritage & energy ■Economy & Research Agriculture, natural resources & environment ■New investment plan ■ Others 15% Wallonie service public SPW To address its recurrent deficit, Wallonia has launched a unique exercise to assess and justify all current / new budget expenditures. ZERO BASED BUDGETING exercise was launched in early 2020 and is expected to produce incremental results, starting mid 2022 (see definition on slide 11). 11#12Part. II Zero based budgeting What is "zero based budgeting" exercise? Main goals of "Zero based budgeting" ☐ Expenditures are currently 100% screened (€ 16 billion expenditures to be analyzed). All tax cuts will be screened as well (€ 1.8 billion tax deductions). □ All spending units within the Region (SPW - UAP) are concerned by the exercise. Improve the quality and efficiency of public expenditures. ☐ Check each individual type of expenditure in terms of timely spending. Grow/ increase sustainability investments Break away from aged budgeting methods based on previous year's spending. First decision taken following the elaboration of budget 2020 Methodology put in place with help of external consultants Implementation started as of end of 2020 Referring to the structural reform support program, the European Commission is advising the Region on the added value of completing a spending review Impact not yet included in 2021 budget and in forecasted figures (2022-2024) Wallonie service public SPW 12#138644 26 DEBT MANAGEMENT & FUNDING PLAN Part.III Wallonie service public SPW#14Part. III - Robust liquidity position Strong debt and treasury management Wallonie service public SPW OVERAL REGIONAL DEBT (€ million) Direct Debt (1) External Debt (SPABS + SWDE + FADELS) (2) 31 Dec 2019 31 Dec 2020 31 Dec 2021 31 Mar 2022 -10,839.75 -1,105.59 -15,536.43 -18,842.56 -21,070.26 -1,105.58 -1,105.57 Long-Term Regional Debt (3) = (1) + (2) -11,945.34 -16,642.01 -19,948.13 -1,105.58 -22,175.83 Short-Term Regional Debt (4) OUTSTANDING DIRECT DEBT (5) = (3)+(4) Regional Cash Balance (6) -879.00 -12,824.34 -917.50 -806.00 -806.00 -17,559.51 -20,754.13 -22,981.83 870.61 OUTSTANDING NET BALANCE (7) = (5)+(6) -11,953.73 2,556.33 -15,003.18 3,599.50 4,587.06 -17,154.63 -18,394.77 • SPABS: Société Publique d'Admnistration des Bâtiments Scolaires SWDE: Société Wallonne des Eaux FADELS: Fonds d'Amortissement des Dettes du Logement Social. 80% 70% 60% 50% 40% 30% 20% 10% 0% 31-déc-10 31-déc-11 31-déc-12 31-déc-13 31-déc-14 31-déc-15 31-déc-16 Debt allocation by financial instruments 2010-2021 (in %) 31-déc-17 31-déc-18 31-déc-19 29-déc-20 30-déc-21 Treasury Bill Bank Loan MTN EMTN Standalone Schuldschein Wallonia has secured and committed facilities that allow fast and continuous access to capital markets one European Medium-Term Notes program (EMTN); two Medium-Term Notes programs (MTN). 14#150 2022 200 400 2023 2024 2025 SZOZ 2026 9707 Millions EUR 2027 600 2028 2020 2028 לחלת 800 2020 2030 2031 TSOZ 1000 2032 ZSOZ 2033 2055 1200 1400 1600 1800 Wallonie Part. III Outstanding Debt - Annual redemption profile and Ratios service public SPW 2035 2055 2036 2036 2037 2038 2056 2039 2059 לחלת 0102 7507 2043 bboz 2045 2046 2047 6702 8702 2050 2051 ICOZ 2054 Annual redemption profile of Long Term Debt 2055 2055 2056 Осо REGIONAL DEBT - KEY RATIOS Outstanding short term debt Outstanding long term debt -16,642.01 Regional cash balance 870.61 2,556.33 NET OUTSTANDING DEBT (€ million) -11,953.73 -15,003.18 31 Dec 2019 -879.00 -11,945.34 31 Dec 2020 31 Dec 2021 -917.50 -806.00 -19,948.13 31 Mar 2022 -806.00 -22,175.83 4,587.06 -18,394.77 3,599.50 -17,154.63 Implicite rate of LT debt (all in) 2.04% 1.61% 1.51% Average life span of LT debt (years) 17.95 19.81 19.93 Fixed rate ratio of LT debt 87.48% 90.58% 93.73% 19.87 94.08% Duration of LT debt (years) 10.54 13.84 13.27 12.74 15 2057 6902 2064 2066■ 2066 2067 2068 2069 2070 2071 2080 2060 2085 2116 2120#16Part. III 2021 Funding FUNDING 2021 (millions €) Amortizations Funding gap (ajusted) 586.70 4,063.02 AJUSTED FUNDING PLAN 4,649.72 EU Financing Plan (SURE) granted to Wallonia -598.82 Since the beginning of the pandemic, additional Covid-related spending have been encountered by Pre-financing completed in 2020 -1,525.57 EMTN (funding 2021) Private placement Benchmark size issues MTN (funding 2021) Private placement Commercial paper Schuldschein (funding 2021) FUNDING COMPLETED IN 2021 OUTSTANDING FUNDING PLAN * (*) Negative amount = prefunding 2022 -3,137.50 -937.50 -2,200.00 0.00 0.00 0.00 -45.00 the Walloon Government. For 2020, € 1.140 million were spent and for 2021, the executed budgetary plan and funding needs amounted to € 1.612 million. -5,306.89 -657.17 OUTSTANDING OPERATIONS & RATIOS - December 2021 Number of deals Weighted average rate (all-in) Average life span (years) 36 0,56% 19.96 Weighted average duration (years) 17.03 Weighted average spread vs OLO (all-in) 30.48 Fixed rate ratio 99.06% In addition, the floods that hit Wallonia in July 2021, generated additional exceptional spending that had to be taken out (in the order of € 505 million). Wallonie service public SPW 16#17Part. III 2022 Funding Needs The budget deficit remains high, due to the crisis situations (pandemic and floods) that Wallonia has recently experienced. However, the pre-financing achieved in 2021 remains considerable and gives the possibility to reduce the financing requirements for 2022. In addition, loans from the EIB and the federal government, which will be negotiated at favorable conditions for the Region, reduce the debt burden for the coming years. FUNDING PLAN 2022 (€ million) OUTSTANDING OPERATIONS & RATIOS - March 2022 Amortizations -939.63 Number of deals Funding gap (initial) INITIAL FUNDING NEEDS Budget Buffer (2022) EIB loan (2022 part) Federal loan -4,125.57 -5,065.20 Weighted average rate (all-in) 1.465% Average life span (years) 10.36 421.00 300.00 Weighted average duration (years) 9.88 Weighted average spread vs OLO (all-in) 34.66 1,200.00 Fixed rate ratio 100% Pre-financing completed in 2021 657.17 FUNDING COMPLETED IN 2022 1,030.00 EMTN Private placement 1,030.00 30.00 Benchmark (conventional bond) 1,000.00 MTN 0.00 Private placement 0.00 Commercial paper 0.00 Schuldschein 0.00 OUTSTANDING FUNDING PLAN -1,457.03 Wallonie service public SPW 17#18Part. III Key ratings considerations Financial Rating MOODY'S Non-Financial Rating vigeqiris Last credit opinion update: December 2021 Long Term Rating: A3 - Stable Outlook Prime-2 short-term rating of its Treasury notes Credit Strengths ▲ Mature and robust legislative background with well-defined responsibilities amid a complex Belgian institutional system Revenue flexibility is high and is supportive of the region's credit profile ▲ Prudent but sophisticated debt management underpins unquestioned market access. Credit Challenges Substantial financing deficits will push the region's debt burden to a very high level for longer An economy which compares unfavorably with national and European peers Date of report: April 2018 ESG rating: 55/100 Région wallonne ranks 4th out of 30 among European Local Authorities sector □ Région wallonne demonstrates a consistent performance, with scores above the sector average in all six assessed domains The local authority's performance is ranked advanced in Community Development and good in four other domains: Environment, Human Resources, Human Governance Rights and The performance in Procurement and Services is only limited Wallonie service public SPW 18#19TIMELINE BOND ISSUANCES Wallonie service public SPW Part. IV#20Part. IV Summary of Wallonia outstanding benchmark size issues SUSTAINABILITY, SOCIAL & GREEN BONDS WALLOO 0.250% 05/03/2026 WALLOO 1.250% 05/03/2034 WALLOO 0.500% 04/08/2030 WALLOO 1.250% 05/03/2034 CURRENT ISSUES ISIN Amount Launch Date SUSTAINABILITY 2026 Bond (7y) BE6313645127 € 500 million 25th April 2019 SUSTAINABILITY 2034 Bond (15y) BE6313647149 € 500 million SUSTAINABILITY 2030 Bond (10y) BE0001795492 SUSTAINABILITY 2034 Bond Tap BE6313647149 € 500 million € 200 million 25th April 2019 1st April 2020 1st April 2020 Maturity Date 3rd May 2026 3rd May 2034 8th April 2030 3rd May 2034 Coupon Rate (all-in) 0.250% 0.382% 1.250% 1.265% 0.500% 0.540% 1.250% Spread vs OLO (all-in) OLO + 32.3 bps OLO37.6 bps OLO + 47 bps Total in 2019: € 1 000 million CONVENTIONAL BONDS Wallonie service public SPW WALLOO 1.050% 06/22/2040 SOCIAL 2040 Bond (20y) BE0002709906 € 1 000 million 28th May 2020 0.797% OLO + 50 bps Total in 2020 : € 1 700 million 22nd June 2040 1.050% 1.118% OLO 56.4 bps WALLOO 0.050% WALLOO 0.650% 01/16/2051 WALLOO 0.500% WALLOO 1.250% WALLOO 0.375% 06/22/2037 06/22/2071 Conventional Issues ISIN Amount 06/22/2025 2025 Bond (5 year) BE0002708890 2051 Bond (30 year) BE0002754357 2037 Bond (16 year) BE0002778596 2071 Bond (50 year) BE0002779602 10/22/2031 2031 Bond (10 year) BE0002816974 € 1 000 million 0.405% WALLOO 1.375% 04/06/2032 2032 Bond (10 year) BE0002849306 € 1 000 million 30th March 2022 6th April 2032 1.375% 1.478% OLO +34.9 bps Total in 2022 : € 1 000 € 1 000 million € 1 000 million € 700 million € 500 million Launch Date 28th May 2020 25th Nov. 2020 10th March 2021 10th March 2021 Maturity Date 22nd June 2025 16th Jan. 2051 22nd June 2037 22nd June 2071 30th June 2021 22nd Oct. 2031 Coupon 0.050% 0.650% 0.500% 1.250% 0.375% Rate (all-in) 0.061% 0.703% 0.629% 1.261% Spread vs OLO (all- OLO+43.00 bps OLO 38.00 bps OLO 32.48 bps OLO +35.82 bps OLO +29.00 bps in) Total in 2020 : € 2 000 million Total in 2021 : € 2 200 million million 20 20#21Debt Cell Walloon Region - Contact details @ 0032 (0)81 77 25 20 [email protected] DEVEUX Etienne Managing Expert 0032 (0)81 77 25 16 [email protected] QUOIBION Valérian Middle office 0032 (0)81 77 25 09 [email protected] MAASKANT Serge Back office POLIART Vincent Support office 0032 (0)81 77 25 03 [email protected] 0032 (0)81 77 25 02 [email protected] BONAVENTURE Melvin Front office 0032 (0)81 77 25 12 [email protected] ZEGBE-YAWUZA Tino Back office/Legal https://www.wallonie.be/en/financing Wallonie service public SPW 21#22DISCLAIMER Wallonie service public SPW This presentation has been prepared by Région wallonne for informational and background purposes only, and is subject to change, updating, completion or revision without notice at the discretion of Région wallonne and any information contained therein may change materially. No person is under any obligation to update or keep current the information contained herein and any opinions expressed in relation thereto are subject to change without notice (including the forward looking statements). In this document, references to "presentation" mean this document, any oral presentation, the question and answer session and any written or oral material discussed or distributed in this context. The presentation comprises written material/slides which provide information on Région wallonne. Although the information in this presentation has been obtained from sources which Région wallonne believes to be reliable, Région wallonne and its representatives do not expressly or impliedly represent or warrant its accuracy, fairness, completeness of reasonableness and such information may be incomplete or condensed. No reliance should be placed on the fairness, accuracy, completeness or correctness of, the information or opinions contained herein. Due to rounding, numbers presented in these materials may not add up precisely to the totals provided and percentages may not exactly reflect the absolute figures. This investor presentation contains certain statements which may constitute "forward-looking statements" based on current beliefs and expectations about future events. These statements are not guarantees or predictions of future performance, and are notably subject to risks, assumptions, uncertainties, and changes in economic conditions globally. Therefore, actual results or developments may materially differ from those expressed or suggested in the statements contained in this presentation. Any forward-looking statement contained in this presentation speaks as of the date of this presentation. Région wallonne and its representatives expressly disclaim any obligation or undertaking to revise or update any of these statements or any information contained herein in light of new information or future events. Région wallonne and its representatives will not accept any liability (in negligence or otherwise) what so ever for any loss arising, directly or indirectly, from the use of this presentation or the information provided in this presentation or otherwise arising in connection with this presentation. This presentation does not form the basis of, and should not be relied on in connection with, any contract to purchase or subscribe for any securities of the Région wallonne. Any decision to invest in the securities of the Région wallonne in the framework of an offering must be based on your own research in respect of Région wallonne, any prospectus or offering circular (or memorandum) and information included by reference therein, including, but not limited to, the associated benefits and risks thereof, as well as the conditions of the placement. Investors must themselves assess, together with their advisors whether securities of Région wallonne are suitable for them, considering their personal income and financial situation. In case of doubt with respect to the risks involved in purchasing such securities, investors must abstain from investing. This presentation does not constitute any form of financial opinion or recommendation or investment advice. This presentation is for preliminary informational purposes only and does not constitute or form part of an offer or invitation to proceed to an acquisition of or subscription for the securities of Région wallonne and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any offer of securities, if made, will be made by means of a prospectus or offering circular (or memorandum) which would contain material information not contained herein, and which shall supersede and replace these materials and the information herein in its entirety. Investors should not subscribe for any securities unless they receive such a prospectus or offering circular (or memorandum), which they should carefully review, conduct such investigations as they deem necessary and consult their own financial, legal, accounting, regulatory and tax advisors in order to make an independent determination of the suitability and consequences of an investment in the securities of Région wallonne. 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The securities referred to herein have not been, and will not be, registered under the Securities Act of 1933, as amended, or the securities laws of any state of the U.S. or other jurisdiction and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. This presentation is being submitted to selected recipients only and neither this presentation nor any other offering materials may be distributed, published or made available to the public in Belgium. This presentation may not be reproduced or passed on (in whole or in part) to any other person than the selected recipients. Neither this presentation nor any offering materials may be used in relation to any investment service in Belgium unless all conditions of Directive 2014/65/EU, as implemented in Belgium, are satisfied. Neither this presentation nor any offering materials can be used to publicly solicit, provide advice or information to, or otherwise provoke requests from, the public in Belgium in relation to the offering. Any offering in Belgium is made exclusively on a private basis in accordance with Article 2 of Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. This presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction or country. Any failure to comply with these restrictions may constitute a violation of such laws or regulations. The distribution of this presentation in other jurisdictions than Belgium, may be restricted by laws or regulations applicable in such jurisdictions. All persons in possession of this presentation must inform themselves about, and comply with, any such restrictions. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. [In the context of Région wallonne EMTN Programme: Full information on Région wallonne and the offer of any security issued by it in the context of the EMTN Programme is only available in the Offering Circular and the documents incorporated by reference therein]. By participating in this presentation or by accepting any copy of the materials presented, you irrevocably agree to be bound by all of the foregoing limitations. © April 2022 Wallonia - All rights reserved d. 22 22