#1S ກ 9 STN EN 837 MPa הייוייד. A Investor Presentation Czech Gas Networks Investments S.à r.l. June 2022 Strictly Private and Confidential www.cgni.eu#2Disclaimer Important notice This presentation with all associated oral or written materials prepared or presented together (the Presentation) has been prepared by Czech Gas Networks Investments S.á r.l. (the Company) for information purposes only about the Company and its subsidiaries. While the information contained in the Presentation is believed to be accurate, the Company has not conducted any independent investigation with respect to, or attempted to independently verify, any such information. 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It is the responsibility of the recipient of the Presentation, or any part thereof, to ensure compliance with all applicable legal and regulatory requirements. 6 gasnet.cz 2#3Today's Presenters Thomas Merker Pavel Dočekal Jiří Steklý Chief Financial Officer of Czech Grid Holding Previously: CFO of innogy Czech With innogy / RWE since 2000 Head of Regulatory, Legal & Internal audit in GasNet With innogy / RWE since 2000 Previously: Head of Regulatory Affairs/innogy Czech 24 years of experience in energy sector Head of Finance and Controlling in GasNet With GasNet since September 2020 Previously: Head of Treasury in Pražská energetika 10 years of experience in energy sector 6 gasnet.cz 3#4Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 | Retrofit of Network 4. 6 6. Q&A 7. Appendix gasnet.cz 4#51 Key events 2021 and H1/2022 6 January 2021 Completion of separation process with iCR May 2021 New SFA with banks signed August 2021 First Sustainability report and Green Finance framework published October 2021 Retailer turbulences On Czech and EU Energy Markets January Reduction of -130 FTE April 2022 Preventive crisis measures adopted & reactive measures prepared March 2021 Future of Gas project starts CGNI issues EUR 500 mil. conventional bond June 2021 First ESG rating from Sustainalytics obtained - Score 19.4 September 2021 CGNI issues EUR 500 mil. inaugural Green Bond November 2021 New SAP ERP and Work Force Management systems go live February 2022 Beginning of Russia vs. Ukraine war gasnet.cz 5#62020-25 Strategic Goal Overview 2020 2021 House in order Shape the future Environment 2022 2023 2024 2025 Separation Refinancing WHS rebound Optimisation (-130 FTE) New Work Delivery IT Transformation - organization & processes ESG engagement ESG Plan Future of Gas I Future of Gas II LNG role-out Asset Management 360 ESG Technology implementation Asset Management H2 retrofit preparation H2 Lighthouse projects Biomethane connection and forming market platform Russian Ukraine War Key GasNet projects RP 6 with focus on ESG and H2 CAPEX New EU & Czech Legislative Framework Heating plants connection 6#71 A resilient economy with below average indebtedness as % of GDP, substantial foreign currency reserves and unemployment among the lowest in the EU, rated Aa3 / AA / AA- GDP & GDP Real Growth, 2018 - 2022 Inflation Rate, 2018 - 2022 Avg. inflation rate of 4.2% vs. 2.1% in the EU(1) 4,4% Avg. real growth of 1.2% vs 0.7% in the EU(1) 9.3% 0,4% 0,2% 0,3% 0,3% 550 3,2% 3,0% 3,2% 508 4% 2% 457 2,7% 2,9% 500 474 0% 2,1% 3,2% 3,8% -2% 445 438 450 -4% -5,8% -6% 400 -8% 2018A 2019A 2020A 2021A 2022E 2018A 2019A 2020A GDP ($ Intl. PPP) GDP Real Growth (% p.a.) I Inflation (CPI, % p.a.) 2021A Interest Rate (% p.a.) 2022E Unemployment Rate, 2018-2022 6.9% in the EU(1) 2,2% 2,0% 2,6% 2,8% 2,6% Public Debt as % of GDP, 2018 - 2022 Czech Macro Developments Robust medium-term growth dynamics and broad economic resilience in the midst of current geopolitical crisis ● Record levels of employment, labour market cushioned by the wage-subsidy scheme introduced during the pandemic Liquid and well capitalised banking system Central bank reacted to rising inflation figures by a sharp tightening of its monetary policy Rating agencies have reaffirmed their views on the Czech economy Rating Agencies' Views 88.1% in the EU(1) MOODY'S Aa3 (Stable) "Czech Republic's credit profile is supported by a strong government balance sheet ... and track record of economic resilience..." 42,7% 43,0% 37,8% 32,0% 30,0% S&P Global Ratings AA- (Stable) 2018A 2019A 2020A 2021A 2022E 2018A 2019A Unemployment Rate (%) 9 Source: Rating Agency reports, EIU. Note: (1) EU considers EU-27 as of 2020. 2020A 2021A Debt-to-GDP Ratio (%) 2022E Fitch Ratings AA- (Negative) Moody's, April 2022 several years of strong economic growth before the pandemic; strong external balance sheet; tight fiscal management..." S&P Global Ratings, April 2022 "...balances its record of credible macroeconomic and monetary policies... very strong external finances..." Fitch Ratings, May 2022 gasnet.cz 7#8Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 | Retrofit of Network 4. 6 6. Q&A 7. Appendix gasnet.cz 8#92. Very strong financial performance in 2021 and significant increase in gas distribution. Distribution Volume GWh Technical Losses GWh Distribution margin CZK mn Growth rate: 11.7 % 72 123 80 550 2020 2021 EBITDA CZK mn Growth rate: 15.7% ¦ 8 805 g 2020 913 2020 Growth rate: -25.7 % 678 2021 Growth rate: 7.1 % 12 646 13 543 2020 2021 FCF before financing a SHL int. CZK mn CAPEX CF CZK mn 10 184 ! Growth rate: 27.4 % 3 660 2872 Growth rate: 3.7 % ¦ 4 368 4 531 2021 2020 2021 2020 2021 gasnet.cz 9#102 2021 CGNI Consolidated Statement of Profit or Loss and Other Comprehensive Income with EBITDA ca. CZK 10.2 bn and the Profit for the period ca. 4.5 bn. In millions of CZK Revenue Raw materials and consumables used Other income Work performed by the Group and capitalised Net impairment reversals on financial assets Employee benefits expense Depreciation and amortisation Other operating expenses Services Operating profit Finance income Finance costs 2021 2020 • 15 069 14 594 102 65 456 449 -3 -220 -202 -2 152 -1 880 -7 173 -7 700 -2 373 -695 -3 344 -877 3 011 1 105 3 486 9 -1 725 -3 236 Profit (loss) before income tax 4 772 -2 122 Income tax expense Profit/(loss) for the period Other comprehensive income for the period -255 -12 4 517 -2 134 TOTAL COMPREHENSIVE PRIFIT / (LOSS) FOR THE PERIOD 4 517 -2 134 • . • Consolidated revenues of the Group exceeded CZK 15 bn in 2021 as a result of large distribution volume (80.5 TWh). Increase in personnel costs by CZK 272 million driven by substantial increase in FTEs as 239 employees were transferred to the Group during separation process in the years 2020 and 2021; with 2,401 employees as of December 31, 2021. Nonetheless, the number of employees has been reduced by ca. 130 at the beginning of 2022. The Group currently employs 2 298 employees. Decrease in costs of services by almost CZK 1 bn is associated mainly with the absence of separation costs, termination of SLAs and rental contracts with the innogy group. The EBITDA of the company amounted to exceptional CZK 10,184 million for the year 2021. Profit for the period in the amount of CZK 4,517 million was (on contrary with the previous year) positively affected by mark-to-market revaluation of derivatives and FX differences on borrowings denominated in EUR, as the company has not adopted hedge accounting. • In case of derivatives the positive impact of mark-to-market revaluation of interest rate swaps (IRS) significantly outperformed negative mark-to-market revaluation of cross- currency swaps (CCS). . ■ IRS ▪ CCS CZK 5,482 million (CZK 3,732 million) In case of borrowings denominated in EUR, the unrealized FX gain amounted to CZK 1,730 million. 9 gasnet.cz#11ASSETS Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Derivative financial assets Other non-current assets Total non-current assets 102 195 105 250 Share premium 3 046 4 622 2 206 Accumulated deficit 826 743 Total equity 307 LIABILITIES 1 1 110 690 108 507 Non-current liabilities Borrowings Lease liabilities Current assets Inventories Trade and other receivables Other taxes receivable Cash and cash equivalents Derivative financial assets Total current assets TOTAL ASSETS Deferred income tax liabilities 5 616 5 2 CGNI Consolidated Statement of financial position as of December 31, 2021 with Total Assets exceeding CZK 113 bn. In millions of CZK 31 December 31 December 2021 2020 In millions of CZK EQUITY Share capital 31 December 31 December 2021 • 2020 1 CGNI non-current assets worth over CZK 110 bn. Derivative financial assets and liabilities arose as a result of fair value changes of financial derivatives Borrowings of the company consists of both senior unsecured notes and bank financing as well as of 1 27 219 -6.667 27 219 -3 388 20 553 23 832 69 204 65 620 1 983 1 215 14 729 15 453 Provisions 52 17 575 subordinated shareholder 62 1 376 1 741 795 Other non-current liabilities Derivative financial liabilities Total non-current liabilities 339 292 3 533 742 loans (ca. CZK 14bn) 89 840 83 339 2 792 2 383 113 482 110 890 Current liabilities Borrowings 343 384 Lease liabilities 190 165 Trade and other payables 1911 2 110 Contract liabilities 200 573 Current income tax payable 70 122 Other taxes payable 180 267 • Provisions 168 98 Derivative financial liabilities 27 Total current liabilities 3 089 3 719 Total liabilities 92 929 87 058 TOTAL LIABILITIES AND EQUITY 113 482 110 890 Significant balance of deferred income tax liabilities relates mainly to the difference between accounting and tax value of non-current assets Increase in accumulated deficit as a result of PY loss caused mainly by non-cash items of depreciation charges and M2M revaluation of derivatives 6 gasnet.cz#122 CGNI reached its target debt structure in 2021. Debt structure CZK bn 60 6 50 40 30 20 10 0 CZK 43.9 bn 2020 Acquisition bank loans IEUR Senior 1.000% notes New bank loans * KPIs Net debt/ RAB = 95% CZK 55.20 bn • Net debt/EBITDA = 5.28x • FFO net leverage = 6.18x 2021 No financial covenants unless being downgraded to SubIG** Subordinated shareholder loans maturing in 2044 amounted to ca. 14 bn CZK as of December 31, 2021. * Calculated based on accounting figures. ** The covenants imposed by banks require the Company to be assigned the credit rating corresponding the investment grade. If the rating would be below the investment one and the amount of net debt is less than RAB the Group shall repay its bank borrowings immediately. Maturity profile Interest rate and FX rate hedge ratios ≥ 85% as of December 31, 2021. 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 ■CZK Senior floating rate notes EUR Senior 0.875% notes EUR Senior green 0.450% notes As of December 31, 2021, outstanding, not used Capex and RC commitments amounted to CZK 1bn resp. CZK 0.5bn gasnet.cz 12#132 Outlook 2022 February 2022 Beginning of Russia vs. Ukraine war April 2022 Preventive crisis measures adopted & reactive measures prepared RAB and NAV Reconciliation Schedule NAV (CZKM) 6 June 2022 June 2022 Network losses Inflation August 2022 CAPEX plan and agreed parameters reg. draft parameters 2023 Sept. 2022 Alignment process ERO/CGNI Nov. 2022 Official tariff announcment Agreement with the regulator ERO on coverage of network losses for 2023: cost neutral OPEX inflation vs. Actual cost increases neutral to wide extent ✓ CAPEX & D&A plan not expected to change Accumulated K-factor allocation from previous years decisive element for tariff increase and revenue level in 2023 Expected tariff increase in absolute terms relatively high, but lower than electricity RAB/ NAV (%) 60 80 RP4 RP5 100% 70 80% 100% 60 60 96 • 899 95% 60% 50 50 75% 84% 40% 699 72 70% • 40 65% 67% 60% 62% 20% 0% 30 • 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E Upward reconciliation of RAB to match the higher underlying net book value in motion until 2025, with non-binding Capex plans for period 2021-2025 and 2025-2030 gasnet.cz 13#14Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update 4. European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 | Retrofit of Network 6. Q&A 6 7. Appendix gasnet.cz 14#15Ꮛ ກ 3 More than 40% of gas consumption in EU (cca 4,000 TWh/year) is covered by supplies from Russia. [1] Various import routes and gas sources are used to cover gas consumption in EU Dependency on import from Russia varies across EU countries Current storage filling above 50% across Europe, with 73% in the Czech Republic LNG Norway Algeria Libya Nord Stream Yamal (via Poland] Turkstream Ukraine transit TANAP (AZE via TUR) [1] https://www.bruegel.org/publications/datasets/european-natural-gas-imports/ [2] EU takes steps toward energy independence from Russia | Global Risk Insights [3] Gas Infrastructure Europe - AGSI+ (gie.eu) [2] 0-25% 25-50% 50-75% 75-100% [3] 99 71 58 29 97 58 73 54 42 38 39 33 gasnet.cz 91#163 Diversification of supply through non-Russian LNG, strengthening of European's gas infrastructure, launch of hydrogen supplies and H2 network readiness & increase in local biomethane production are the priorities. Storage market largely developed, but commodity supply for filling not sufficiently diversified LNG terminals to be built, with lead time 2-3 years & ກ PORTUGAL SPAIN [1] ENTSOG | ENTSOG IRELAND UNITED KINGDOM THE NETHERLAN DENMARK LUX GERMANY AUSTRIA SWITZERLAND FRANCE CORSICA SARDINIA ECH REPU IC POLAND SLOVAKIA SLOVE HUNGARY ITALY BOSNIA CROATIA HERZEGOVINA ESTONIA LITHUANIA RUSSIA SERBIA ALBANIA MALLOONIA GREECE LATVIA BELARI ROMANIA BULGARIA PORTUGAL SPAIN [1] ENTSOG ENTSOG IRELAND UNITED KINGDOM DENMARK GERMANY CZECH REPUBLIC AUSTRIA FRANCE SWITZERLAND CORSICA SARDINIA POLAND SLOVAKIA HUNGARY 80NIA CROATIA HERZEGOVINA LITHUANIA RUSSIA LATVIA BELARUS ROMANIA SERBIA BULGARIA GREECE MOLDOVA UKRAINE gasnet.cz 16#179 June 21 96% 95% 89% 83% 75% 87% 78% 81% 64% 60% 59% 39% 45% 31% July 21 Aug 21 Sept 21 Oct 21 Nov 21 Dec 21 3 Gas storage located in CZ with capacity to cover 40% of yearly demand has been filled faster than in previous years to contribute to security of supply. Storage filling above LT average, after intense negotiations with Retailers and the Czech Government. There is a Czech Emergency Plan in place, which would be activated by the Czech Government. Currently, standard offtake level is being applied. Jan 22 52% 61% 41% 40% 41% 25% 24% 24% 23% 17% 14% 2021-22 2015-19 average Feb 22 • Latest gas flow into the Czech national distribution system is stable March 22 • Total inflow covering full consumption, remaining part used to fill storage facilities. Current filling rate cca. 0,5% per day, which is lower than the possible technical max. injection capacity. • 100% storage filling expected in cca. 115 days April 22 May 22 June 22 73% Expected gas savings Offtake levels % Winter season Standard offtake level 0% now Gas 1. 1% deliveries 2. 5% curtailed 3. 11% (B2B not 4. 15% critical) 5. 20% 6. 25% Gas 7. 28% deliveries 8. 30% interrupted (B2B critical) 9. 48% 10. 51% B2C customers to be disconnected at level 11. 100% gasnet.cz 17#183 Gas storage level already reached 73%, with increasing security of supply for next winter season. Remaining days of gas flow assuming complete interruption Assumed Assumed day of storage filling interruption Remaining days of gas flow Assuming reduction of gas flows to 30% 73% Today 80% 30.6.22 95% 31.7.22 100% 31.8.22 100% 30.9.22 100% 31.10.22 90% 30.11.22 76% 31.12.22 43% 31.1.23 36% 28.2.23 25% 31.3.23 30% 30.4.23 44% 31.5.23 6.11.22 13.1.23 15.11.22 21.1.23 7.12.22 11.2.23 19.12.22 20.2.23 30.12.22 25.2.23 16.1.23 15.3.23 1.2.23 27.3.23 I Basic consumption level ■Consumption level 10 Q2 22 Q3 22 21.2.23 20.4.23 12.3.23 30.4.23 31.3.23 20.5.23 30.4.23 8.8.23 27.6.23 31.10.23 19.9.23 5.12.23 Q4 22 Q1 23 Q2 23 2.12.22 20.12.23 12.12.22 1.1.24 5.1.23 1.1.24 17.1.23 1.1.24 27.1.23 1.1.24 14.2.23 1.1.24 28.2.23 1.1.24 20.3.23 1.1.24 31.3.23 1.1.24 18.4.23 1.1.24 16.5.23 1.1.24 31.7.23 1.1.24 15.10.23 1.1.24 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Example: in case of complete interruption as of today, the gas flow would last till 6. 11.2022 in basic consumption level and and till 13.11.2023 in 10th consumption level. Note: model is based on assumption that no gas supplier re-exports abroad; consumption @ level 10 shows the situation, where the gas is being delivered only to B2C customers. Example: in case of reduction of gas flows to 30% from today, the gas flow would last till 2. 12. 2022 in basic consumption level and till 20.12.2023 in 10th consumption level. gasnet.cz#193 REPowerEU: The response of the European Commission to the hardships and global energy market disruption caused by Russia's invasion of Ukraine REPowerEU actions proposed to phase out Russian fossil fuels go beyond plans presented in the FF55 Package CZ government has initiated measures to mitigate impact of possible gas interruption 6 ACCELERATE CLEAN ENERGY TRANSITION DIVERSIFY REPowerEU PHASE OUT DEPENDENCY ON RUSSIAN FOSSIL FUELS ENERGY SOURCES SMART INVESTMENT National and European plans: reforms and investments, faster permitting and innovation SAVE ENERGY ● . Measures executed Strategic reserves controlled by the CZ government Financial motivation for storage users to inject gas into gas storage in CZ in keep it under defined conditions Storage to be filled at least by 80% by November 1 • Use it or lose it (,,UIOLI") implemented in the Energy Act . Social Energy tariff approved by Czech Government on June 22. • Measures planned/discussed • • • „Solidarity agreements" with neighbouring states Interruption of gas flows to neighbouring states and obligation for suppliers provide gas to TSO in order to secure gas for „protected customers" State financial support to TSO/DSOs in case of gas interruption gasnet.cz 19#20Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update 4. European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 | Retrofit of Network 6. Q&A 6 7. Appendix gasnet.cz 20#214 Demand: We did not observe a significant drop in consumption in the period 1-5/2022. B2B consumption (TWh) B2B Sokolovská B2C consumption (TWh) B2C Weather 22 450 2 159 18 326 19 439 16 015 2 295 6 -955 2021 2022 2021 2022 The number of retailer's requests to disconnect customers due to non-payment (period Jan-May) 6 612 6 072 Covid impact 5 478 less disconnections 2017 3 737 3 144 3 319 2018 2019 2020 2021 2022 B2B: Decrease mainly caused by Sokolovska Uhelna Power Plant and cold weather in 2021. B2C: Decrease of B2C segment mainly caused by cold weather in 2021, resp. warm wather in Jan-Feb 2022 In both segments crisis impact for period 1-5.2022 is limited: B2C 2,4%, B2B 2,5% The number of requests by Retailers for disconnection due to non- payment does not exceed the levels in previous years. So far, no change in bad debt y/y. The number of requests by end customers for disconnection • B2C off-take points disconnections 0,4 % (9k from 2,3 mil) B2B off-take points disconnections 1% (52 from 5,8k), less than other years gasnet.cz 21#224 CGNI adopted several preventive measures - both operational and financial - to prepare well for potential disruption in gas flows. Further reactive measures have been prepared which will be activated if needed. Operational preventive measures Principles for the state of emergency and related procedures and activities refreshed in all operational departments Daily determination of NG savings according to individual consumption levels Procedures for disconnection of large urban agglomerations from the point of view of future commissioning checked - GN's Emergency Committee manages in non-standard cases One-way SCADA communication introduced in preparation for possible cyber attacks, remote PRS commands blocked, network control in manual mode 6 Financial preventive measures Stress scenario analysis performed • Existing crisis and business continuity plans activated ● OPEX consumption delayed or reduced where reasonably possible • ● CAPEX CF delayed where reasonably possible Reactive gradual countermeasures applicable in case of emergency prepared (CAPEX, OPEX, Tax, Liquidity) Already strong financial position of the company with measures improve taken to strengthen it further: • • Decision of the shareholders to temporarily suspend dividend payments and interest on shareholder loans. Utilisation of CZK 500 mil. from Capex Facility under the new SFA gasnet.cz 22#239 4 This would allow the company to fulfill all its contractual liabilities in 2022 and 2023. 160% 140% 120% 100% 80% 60% 40% 20% CGNI consolidated cash balance measured relatively against cash balance as of 31/5/2022* 0% V-22 VI-22 VII-22 VIII-22 IX-22 X-22 XI-22 XII-22 1-23 II-23 III-23 IV-23 V-23 VI-23 VII-23 VIII-23 IX-23 X-23 XI-23 XII-23 Base-case FC1 S1: Gas flow decreased to 30% from now & counter-measures O Gas flow reduced to 30% Note: Hypothetical scenarios based on various assumptions S3: Gas flow decreased to 30% from 1/11/2022 & counter-measures * Outstanding part of Capex and RC facilities (CZK 1.0bn) remain undrawn. Assumptions: Current storage level: Gas flows: 73% 30% Consumption level: 10 (B2C only) CF from B2B: None & no compensations Reactive measures since: 1/1/2023 Opex savings: Capex savings: Kurzarbeit: Tax advances: 15% 25% 20% empl. No Distributions from CGNI: No Distribution Revenues 63% B2B B2C 37% gasnet.cz 23#24Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update 4. European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 Retrofit of Network 6. Q&A 6 7. Appendix gasnet.cz 24#256 UT 5 Our ESG strategy is built on 4 pillars and is based on corporate values FOCUS AREAS ESG PILLARS E We believe in environmental sustainability and the future of gas Environmental Methane emissions Energy consumption Air pollution, waste, biodiversity Future of Gas (green gas transition) GasNet ESG Strategy We care about our people and the communities around us We conduct business in a responsible and considerate way We embody safety standards and health protection S Social Employee & contractor safety Process safety Public safety & network reliability Employee health Safety culture S Social Employee and community development Support for schools and education Diversity, equity & inclusion Employee feedback G Governance Ethical conduct & internal documentation Risk management Cybersecurity & crisis mgt. Business model resilience Sustainable supply chain Initial ESG Rating from 2021 positioned GasNet among leading companies with low ESG risk SUSTAINALYTICS 19.4 Low Risk gasnet.cz 25#262020 emissions [thsnd. tCO2] & ກ UT 5 FOCUS AREAS ESG activities are managed through company-wide programs and business workstreams ન Green GasNet Systematically manage environmental activities to decarbonize GasNet business through implementation of emission reduction and offset measures Technological losses & Fugitive Energy consumption in operations & air leakages Energy consumption in office buildings Car fleet fuel consumption pollution Resources Biodiversity & communities Future of Gas 1288 140 120 100 80 S1 96% 60 40 20 0 S2 4% Separate programme FOCUS AREAS Safety Management System implementation Improve safety culture at GasNet and among business partners, implement highest safety standards across the company and ensure long-term system sustainability based on ISO 45001 Incident, nonconformity Actions to address risks Procurement Outsourcing and corrective action and opportunities Determining the scope of the OH&S mng. system Management of change Emergency preparedness and response Current activities: Audit of 2020 baseline Scope 1 & 2 emissions Development of emissions reduction model to plan measures and set targets Calculation of Scope 3 emissions CSO Current activities: Asset mgt. COO Construvtion/Development Set up of workstreams based on gap analysis results and acceptance of ownership by business Development of work plans and goals for 2022 Last year, we disclosed ESG progress in our first Sustainability report, and we will publish our second report in September this year Sustainability Report gasnet.cz 26#275 WHS achievements and current status of KPIs People TPG (legislative) training for all employees in operations completed (approx. 1 200 employees) Development and launch of new induction safety training for GasNet newcomers Safety training of sub-contractors conducted Organization of Health days for employees Safety project management training for project leads conducted Development of action plan for implementation of ISO 45001 Kick off-of all projects for implementation of key ISO 45001 elements for 2022 WHS and process safety incorporation into business development projects Review and update of internal Safety Standards Systems & Processes Achievements Safety Culture Campaign „Safe Winter" accomplished Organization and launch of live Safety walks for shareholders, MMB and top-level managers Implementation of „Minute of Safety" (awareness campaign) at the beginning of each department's meeting across GasNet Re-programming of „GS Bezpecne" application due to preparation for connection to the Conclusion system (safety suggestions work- flow) Bi-annual obligatory safety training for managers digitalized Safety checks in field digitalized (in ZOPS application) Digitalization LTIF 0,60 Target 1,6 Car accidents 0,39 Target 0,6 Days without an accident 124 *KPIs valid as of 23 6.2022 9 CGH Board meeting | 16.06.2022 gasnet.cz 27#289 5 Our Future of Gas project continues with focus on H2 readiness, adjusted renewal and H2-CAPEX strategy; and implementation of legal/market framework. Future of Gas I 2021 H2 Readiness Customer appliances Energy market structure Status vs. Future H2 Network Readiness Asset Managment Strategy adjustments torespond to H2 Financial and regulatory impact analysis Future of Gas II 2022 Sector Wide analysis on most critical appliances B2B and age structure of B2C boiler portfolio Further developed network implementation readiness status strategy (next two pages) Legal framework and new EU initiatives Stakeholder management Innovative Technologies to reduce emissions Link to GreenGasNet project Adjust renewal and develop H2 Identify bottlenecks (material / capacity) Regulatory and financial long- term implications from adjusted renewal and H2 strategy New EU guidelines New Czech Legislation Stakeholder management H2 production/ electrolysis to cover part of network losses Own PV vs. PPA, Negotiations with external partners on PV and PPA ► Upcoming discussions with the regulator ERO gasnet.cz 28#295 Material wise, we are ready to distribute a 20% blend of hydrogen with NG. Specifically, pipeline components are prepared to a large extent for 100% H2 distribution (1) Current Steel and PE Pipeline Breakdown 6 ■Owned LP and MP PE in km 14 145 29% ■Owned LP and MP Steel in km 34 949 71% Source: GasNet; Marcogaz (EU); NREL (USA); GRTGaz (FR); HyDeploy (UK); Hy4Heat (UK); internal analysis. • • • PE mains are crucial for future distribution of blended gases and hydrogen CGNI is well-positioned with its current pipeline material mix A significant proportion of ~71% of current, owned local network length are already in PE 60% of municipalities have already a PE pipeline share higher than 99% By replacing legacy materials (steel) with modern materials (PE), the Company also expects to drive emission and cost savings. gasnet.cz 29 29#30UT its tolerance to H2 5 Material wise, we are ready to distribute a 20% blend of hydrogen with NG. Specifically, pipeline components are prepared to a large extent for 100% H2 distribution (2). Overview of gas system components/properties and Knowledge 2021 H2 blending uncritical 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% GasNet (DSO) ownership Use of Proceeds from Green Bonds* Knowledge 2022 ☐ Replacement / To test H2 ready Adjustment/Modification needed Further research necessary Customer ownership 100% 90% 80% 70% 60% 50% 40% Phase 2 - 100% Hydrogen 30% - - 20% 10% 20% 0% Phase 1 Blend PRS (preheating) PRS (expansion) 3 HP steel pipelines MP-LP PE pipelines MP-LP Steel pipelines 9 * NON-EXHAUSTIVE 5 Valves Service lines 7 Meters End users (Residential) Injection points 8.1 8.2 End users (Commercial) 8.3 End users (Industrial) Steel (up to 5 bar) PE valves PE pipelines a service lines 20% 5% Detection of gas Flow velocity/pressure mi, Odorization Gas quality Cathodic protection Electr. eq. In EX zones Meters New technologies (blender,... Steel (up to 25 bar) Steel (up to 40 bar) Valves (steel) up to 5 bar Valves (steel) up to 40 bar Regul. Stations (technology) gasnet.cz 30 100%#31UT 5 Capacity wise, there are only a couple of bottlenecks which will be managed easily in the coming years until larger H2 volumes become available 6 9 seznam.cz E 441 Vary E40 E48 PRAHA Mladá Bolesla Wrocław EE40 Jelenia Góra Wałbrzych E47 Opole Sumpe Opay Přibram E55 E65 Havlick Pelhřimov E49 Tábor Jihla Pisek ES51 České Budějovice ESS E49 Trenčin E41 P Gliwi Rybnik Zon E442 arviná Žilina ☐ Local networks (Mid- and Low pressure): analyses ongoing, no major bottlenecks identified so far High pressure network: Originally identified 300 critical points in the capacity calculation system - further analysis carried out, then selected criteria for further investigations Selected criteria Flow speed over 30m/s Length of the section more than 10m DN without limits 12 x PRS outflow 4 x Backbone gas pipeline 2 x Gas pipeline 2 x gas pipeline - interconnection 4 x RS connection 7 x Customer connection Σ 31 Χ Length of sections (m) Σ 1564 gasnet.cz 31#322 3 4 5 6 7 8 5 Investment is the key driver for most scenarios with its peak in 2040 CAPEX development¹ (bn CZK) Preliminary 12 11 10 9 2022 2023 2024 2025 (1) Nominal values, i.e., considering inflation Source: GasNet 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 ५ 2050 Sc 1 Sc 2 Sc 3 Sc 4 BaU Low readiness High readiness High demand Scenario 1 Scenario 2 Low demand Scenario 3 Scenario 4 State of readiness of the network has significant impact on the shape of the investment profile and also on the amount. of the investment High readiness leads to more balanced path. The shape is also much closer to shape of business-as-usual scenario Higher H2 demand and thus length and capacity of the network require higher CAPEX gasnet.cz#335,0% 4,0% 3,0% 2,0% 1,0% 2023 0,0% -1,0% -2,0% -3,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% -1,0% 2023 5 y/y growth of distribution tariffs in line with ERO's long term acceptance level of ca. 3% y/y change in Allowed regulated revenues 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 y/y change in distribution tariffs¹ 2035 2036 2037 2038 2039 2040 2041 2024 2025 2026 2027 2028 -2,0% -3,0% 9 (1) without N4G portion Source: GasNet; ERU 2029 2042\ 2043 2044 2046 2045,' 2047 2048 2049 ' 2050 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 A 2042 2043 2044 2045 2046 2047 2048 2049 2050 High demand Low readiness Scenario 1 High readiness Scenario 2 Low demand Scenario 3 Scenario 4 --- Sc 1 Sc 2 ---- Sc 3 Sc 4 BaU Sc 1 Sc 2 ---- Sc 3 The trajectories of simulated distribution tariffs for all scenarios show for next 20 years relatively stable development. The y/y changes are in line with ERO's long term acceptance level of ca. 3% Higher volatility in tariffs at the end of the period are driven by expected reduction in energy demand Sc 4 BaU gasnet.cz#34Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update 4. European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 | Retrofit of Network 6. Q&A 6 7. Appendix gasnet.cz 34#35Agenda 1. Key events 2021/2022 YtD 2021 and H1/2022 at a glance 2. Financial Results 2021 Consolidated Financial Results 3. Gas market update 4. European and Czech gas market, supply gas storage filling, Czech Government and Sector initiatives Key non-financials and financials 1-5/22, emergency plans, financial preventive and reactive Impact on CGNI and its response measures, Liquidity Forecast 22-23, mid-term outlook incl. regulatory outlook 5. Future of Gas and ESG Update ESG | WHS achievements Future of Gas | Transformation NG to hydrogen distributor 2030-2050 | Retrofit of Network 6. Q&A 6 7. Appendix gasnet.cz 35#361 CGH's core business is the distribution of natural gas throughout the Czech Republic, a regulated business with 81% country coverage. CGH Snapshot ◆ Largest distribution operation (DSO) in the country by both grid length and number of connections First fully unbundled utility in the Czech Republic after the successful separation from innogy in 2020 ◆ Standard European RAB-based regulation with 5-year regulatory periods (RP) with strong track-record of tariff stability. The 5th RP began in 2021 and ends in 2025 Strategically positioned to support the transition of the Czech Heating sector from lignite to gas Received a Sustainalytics rating of 19.4 "Low Risk", ranked 3rd out of 83 Gas Utilities The Czech Republic is AA-rated and the Company has a Senior Unsecured Rating: S&P BBB+ (stable) / Fitch BBB (stable). Senior Unsecured Notes issued by the Company are notched up to BBB+ by Fitch. 65,000km of gas pipelines c. 2.3m off-take points Current Shareholding & Corporate Structure sunsuper 25.00% CGN Holdings S.à r.l O MACQUARIE 75.00% BCi Allianz (ill 55.21% 26.29% 18.50% Czech Gas Networks, S.à r.l (Lux) c. 70TWh/year distributed gas EUR/CZK Notes "CGNI" or "Issuer" Czech Gas Networks Investments S.à r.l (Lux) Bank Facilities EUR Green Notes Geographic Footprint & Market Presence Czech Gas Distribution Regions by Company/Operator Market Shares by customers coverage (YE2020) "CGH" or "Operating Company" 4% 15% 81% GasNet eg.d PPO Source: Company Information. 9 Czech Grid Holding, a.s. (Cz) GasNet GasNet Služby gasnet.cz 36#377 The Czech regulation for Gas Distribution is stable, attractive and predictable, in full alignment and compliance with EU directives and international practices. ERO's Key Principles & Objectives • Stability and sustainability of tariffs . Predictability of regulation • Interest of all stakeholders guaranteed • Objective and transparent decision making . Consistency with legislation Allowed Revenue Breakdown Key Elements of the Czech Gas Distribution Regulation • • Standard RAB-based revenue-cap model • Current grid infrastructure regulation in place since 2002 • Regulator traditionally opted for stable tariffs across regulatory periods Currently in the 5th RP, which started in 2021 and ends in 2025 "This framework provides stability, transparency, and predictability to operators' cash flows." (S&P, 2020) RAB and NAV Reconciliation Schedule NAV (CZKM) RAB/ NAV (%) Allowed 75 RP4 RP5 Profit (RAB X WACC) + Allowed D&A + Allowed Opex 70 100% 90% Allowed 65 100% 80% Revenue 96% 95% 60 70% 89% 60% 55 84% 50% 50 73% 40% 45 72% 69% 70% 30% • RP5 WACC was set to 6.43% (pre-tax) 40 65% 67% 60% 62% 20% Opex level based on the average of 2017-2019 actuals, with under- / outperformance sharing at the level of GasNet set at 50% / 50% 35 10% 30 0% Source: Company Information, ERO. 9 . 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E Upward reconciliation of RAB to match the higher underlying net book value in motion until 2025, with non-binding Capex plans for period 2021-2025 and 2025-2030 gasnet.cz 37#387 Czech energy consumption is dominated by fossil fuels Primary energy consumption 2020, TWh Emissions by source 2017, MtCO2 Selected key aspects of the Czech energy landscape Coal Oil Nuclear Natural gas RES Power balance¹ -16 Other 170 Coal 104 Oil 95 Natural Gas 17 96 Cement 2 54 Flaring <1 Other 1 22 62 A Nuclear friendly B Self-sufficient power generation C Low RES potential D Cold winters E Importing fuels Decarbonisation will have to focus on replacing coal and oil 9 1. Electric power is not a primary energy source. Taking the perspective of the Czech Republic, negative balance reflects net exports. Source: McKinsey DPO and MPM models, CO2: ourworldindata.org, Statni energeticka koncepce CR gasnet.cz#39ກ 000 7 Coal is used mainly in household heating and industry Final energy consumption, 2019, TWh ° Transport Households 15 27 Industry & services Source: ERU, Czech Statistical Office, McKinsey analysis 64 68 88 321 13173 Split by fuel, TWh Natural gas 84 Coal 79 25 25 16 83 83 Oil 68 Electricity 62 Biomass 28 57 57 46 166 gasnet.cz#407 Decarbonisation will have to focus on replacing coal and oil in energy production, industry & transport; while renewables will stay constrained. Czech current emissions and targets lag behind those of the EU... EU GHG (ETS) emission reduction targets ESR1 RES Share in Gross Final Consumption RES Share in Transport Actual 2019 CR/EU 34% / 24% vs 1990 level +10% / -10% vs 2005 level Target 2030 CR/EU 30% / 55%2 vs 1990 level -26% / -40%2 vs 2005 level ...with Czech energy consumption remaining largely reliant on coal... 2020, TWh 54 104 96 95 170 16.2% /19.7% 22% / 32%3 4 7.8% / 8.9% 14% / 14%3 Other -16 Power balance¹ RES Natural Gas Nuclear Oil Coal ...given there is limited wind and solar potential (capacity factors)... Wind Potential Solar Potential ...requiring gas to play a crucial role in achieving the CR's targets... Actual 2019 Other 3% Projected 2030 CR: >20% effective supply < 2.000 hours p.a. Weak potential Coal 54% CR: >20% effective supply < 1.200 hours p.a. Strong potential Coal 17% Gas 34% RES 0 RES 9% 33% Gas 50% 9 Source: EEA Europa, Eurostat, EC materials. Notes: 1) While EU ETS is a joint emissions trading scheme and target is common for whole EU, Effort Sharing Regulation (ESR) sets individual targets for each country in non-ETS emissions (sectors not regulated by EU ETS scheme). 2) Past EU 2030 overall target was 40% reduction and all other targets (CR EU GHG and all ESH targets) link to that. In line with Green deal the overall EU target changed to 55% reduction by 2030 and other targets need to get changed. Current indication of ESH 2030 targets mentions ca -35%, CR specific can be expected around 27-30%. 3)The figures include also bonuses for advanced biofuels in the form of doubling the figures of advanced biofuels. In reality the Transport RES target value would be ca 10.5%. EC says CR RES targets in first line are unambitious. gasnet.cz 40#41Ꮛ ກ 7 Czech decarbonisation will become especially challenging after 2030. Greenhouse gas emissions, MtCO₂e Emissions fell rapidly after 1990 due to the change in the structure of the Czech economy 195 1990 Majority of abated emissions will be from the production of power and heat 87 -55% The target consistent with the EU Green Deal is to reach net zero emissions by 2050 0 2030 2050 2018: 127 Initial 2030 emission targets. can be reached by transitioning coal-based power and heat generation to natural gas. Fit for 55, however increases ambitions significantly, with strong side effects on Czech economy, society and citizens. The key decarbonisation challenge will come after 2030: further decarbonising applications for which natural gas and liquid fuels are currently used. Source: European Commission, MPO. gasnet.cz 41#427 2021-2050: GasNet to enter a deep transformation process by supporting replacement of coal with natural gas within this decade; while preparing in parallel for sustainable hydrogen distribution after 2030. Replacement of coal by NG ...from natural gas Insertion of blue hydrogen Import of green hydrogen Fuel mix Natural gas only Blended NG/H₂ Stepwise transition to pure H2 distribution (per region) Customers Replacement of coal in Energy and Industry Industry and Energy sector with increasing H₂ demand Retail Customers to switch from blended NG to H2 Low carbon gases in heavy transport Network Planning/Retrofit of HP network Retrofit of Customer Appliances 6 2021 Retrofit of MP and LP Network (PE) 2030 2035 2040 2050 ..to H₂ ✓ At scale available ✓ Competitive ✓ Affordable ✓ Sustainable gasnet.cz 42#437 GasNet is the regulated owner & operator of the distribution network, with 2.3 million end connections. The transformation process towards a more sustainable energy sector requires significant efforts across the whole energy Transport Fees Monthly Payments OTE Fees Monthly Payments 9 Natural Gas Producers (Norway, Russia) Gas Transport* (NET4GAS) International transit* Other distribution areas⭑ Gas Storage ERU Czech Energy Regulatory Office (ERO) • Independent regulator * Publish of the price decisions " Pricing for distribution (DSO's) OTE-W Czech electricity and gas market operator • Organization of the short-term electricity and short-term gas market . Gas Market balancing " Pricing for transport # Control activity . Customer protection . Protection os Gas Market participants # Support of renewable energy sources Distribution Services GasNet* Final Customers Retail (Annual rolling billing cycle) Business (Monthly billing) Natural Gas Retailers Fully liberalized market Czech Electricity and Gas Operator* (OTE) Payment for distribution Fixed/Variable (Transport fees included) OTE fees Final Payment Gas commodity Distribution (incl. Transport) OTE fees Gas Flow Cash Flow * Subject regulated or partially regulated by ERO gasnet.cz 43