TAURON Group: PLN 25.6 billion in revenue and PLN 4.2 billion of EBITDA in 2021

• Sales revenue: up by 23 percent to PLN 25.6 billion
• EBITDA of PLN 4.2 billion. EBITDA margin: 16.2 percent
• Electricity production up by 25 percent
• Electricity distribution volume up by 7 percent
• PLN 2.9 billion in capital expenditures, including more than PLN 2 billion in the Distribution segment
• Net debt to EBITDA ratio of 2.4x versus 2.5x as of the end of 2020

(all consolidated data for 2021)

- In 2021, TAURON Group continued to steadfastly implement the Green Turn of TAURON, launched in 2019. As part of the actions taken it is worth mentioning that we have launched our first photovoltaic farm in Jaworzno, we have also completed the construction works on a photovoltaic farm with a total capacity of 14 MW in Choszczno. In addition, we have commenced the construction of two wind farms with a total capacity of 36 MW and a photovoltaic farm with an ultimate capacity of 100 MW - says Artur Michałowski, acting President of the Management Board of TAURON Polska Energia. - I am convinced that the adopted growth path will ensure an increase of the competitiveness and financial stability for TAURON Group. I hope that 2022 will be a period of a further rise in the share of zero- and low-emission assets in TAURON Group's generation portfolio and we will acquire further financing for this purpose - adds Artur Michałowski.

- TAURON Group posted solid financial and operating results in 2021. The generated revenue came in at more than PLN 25 billion and it was higher by 23 percent year on year, while the reported EBITDA topped PLN 4 billion - says Krzysztof Surma, Vice President of the Management Board of TAURON Polska Energia S.A. responsible for Finance (CFO). - The financial results achieved were significantly impacted by an increase in the volumes of electricity distribution and production. TAURON Group's situation was also improved due to the revenue from the capacity market, and also - which is very important - a rise in the profitability of the RES segment. TAURON's position as a stable entity operating on the domestic electricity market is confirmed by the BBB- rating with a stable outlook - adds Krzysztof Surma.

Operating data

The volume of electricity distribution came in at 53.97 TWh in 2021 and it was higher by 3.71 TWh, i.e. by 7.4 percent, as compared to 2020. As of the end of 2021, TAURON Group was providing electricity distribution services to 5.78 million consumers, i.e. more by 1 percent than as of the end of 2020.

TAURON Group produced 15.59 TWh of electricity (including 1.71 TWh from the renewable energy sources) in 2021, i.e. 25 percent more than as compared to 2020, when the electricity production clocked in at 12.5 TWh (including 1.94 TWh from RES). This was a consequence of the favorable conditions on the wholesale electricity market. In the case of RES production, TAURON Group reported higher generation by the hydroelectric power plants (due to the more favorable hydrological conditions), while the production by the biomass-fired units and the wind farms was lower (less favorable wind conditions). The heat production rose by 3 percent, climbing to 12 PJ, which was a consequence of the low outdoor temperatures in the first months of last year.

The commercial hard coal production went up by 13 percent year on year and stood at 5.15 million tons, thanks to the rise in the volume of the extraction output at the Sobieski Coal Mine.

56 percent of the Generation Segment's demand for the hard coal required for the production of electricity and heat was satisfied with the hard coal coming from TAURON Group's in-house coal mines in 2021. The remaining part of the demand was covered from the external sources.

Financial results

TAURON Group posted sales revenue of PLN 25.6 billion in 2021, i.e. higher by 23 percent as compared to 2020. This was primarily a consequence of a 22 percent rise in the revenue from electricity sales due to a higher sales volume along with the higher electricity prices. The revenue from the capacity market and the higher revenue from the sales of thermal energy (heat) (+14 percent) and gas (+70 percent) were also important factors.

TAURON Group's EBITDA came in at PLN 4.2 billion. The Distribution Segment made the largest contribution (71 percent) to TAURON Group's EBITDA last year, posting PLN 2.97 billion of EBITDA, with the Generation Segment coming in second and bringing in PLN 1.38 billion of EBITDA (a 33 percent share). The RES segment is responsible for 9 percent of the Group's EBITDA.

The EBITDA margin earned in 2021 clocked in at 16.2 percent and it was lower by 4.1 pp year on year. The net profit attributable to the shareholders of the parent company stood at PLN 338 million, as compared to the loss of PLN 2.2 billion reported in 2020. The Group's net profitability came in at 1.5 percent and it was higher than the result posted in 2020 i.a. as a consequence of recognizing, in the 2020 earnings, the higher balance of the impairment charges related to the assets.

The net debt to EBITDA ratio stood at 2.4x as of the end of December 2021, as compared to the level of 2.5x as of the end of December 2020. TAURON Group's financial stability was shored up in 2021 thanks to, among others, acquiring the funding from the European Investment Bank ("EIB") in the amount of PLN 2.8 billion, with the maturity close to 20 years. It is the largest corporate financing from the EIB granted in Poland. The funds obtained will be allocated to the implementation of the priority investment projects in the distribution line of business.

Investments (CAPEX)

TAURON Group's capital expenditures clocked in at PLN 2.9 billion in 2021 and they were lower by 27 percent as compared to the investment outlays incurred in 2020, when the capex came in at more than PLN 4.0 billion (excluding the equity investments). The capital expenditures incurred last year are the result of a decline in the investment outlays in the Generation and Mining segments as well as a rise in the capital spending in the Distribution and RES segments.