CEZ (CEZ) investor relations material

Strategic rationale and restructuring proposal

• Proposal to transfer the customer segment—including supply, distribution, trading, ESCO, and telco—into a dedicated subsidiary to highlight value, improve governance, and align with the strategic direction set in 2022.

• Intention to sell up to 49% minority stake in the new subsidiary, retaining at least 51% ownership and management control, with the sale potentially attracting investors focused on regulated, lower-risk assets.

• Move aims to reflect the growing share of stable, regulated activities, enable more favorable financing terms, and support readiness to respond to market opportunities and risks.

• Structure provides flexibility for future financing, potential government-initiated share buybacks, and supports financial optimization.

• Approval of the proposal is subject to a general meeting scheduled for June 1, 2026, with the Board deciding on the form, scope, and timing of the transfer.

Financial and operational implications

• Customer segment expected to represent about 50% of group EBITDA in 2026, with further growth anticipated.

• New subsidiary will include electricity and gas distribution, supply, trading, ESCO, and telco businesses, with clearer segmentation allowing for more precise KPIs and enhanced transparency.

• Debt allocation and leverage targets for the new entity are under consideration, aiming to maintain strong credit ratings for both parent and subsidiary, with possible debt transfer or refinancing.

• Proceeds from any minority sale could be used for share buybacks or other purposes, depending on shareholder decisions and market conditions.

• The supply business operates at arm's length from generation, with strict regulatory oversight and competitive market dynamics.

Process, timeline, and market approach

• Subsidiary creation targeted for Q1 2027, subject to General Meeting approval, with the minority stake sale process to begin thereafter, depending on market conditions and chosen sale route.

• Sale could be via IPO, direct sale, or a combination, with the actual percentage and structure based on valuation, market interest, and shareholder approval.

• Management control and strategic assets will remain with the parent, ensuring continued integration and synergies.

• Government policy and market regulation are key external factors, but the process is not directly coordinated with the government.

• Board will consider market conditions and investment opportunities before any sale.