CEZ, a. s.

Hello, everyone, and welcome at our regular quarterly conference call today on 2021 results and outlook for 2022. The presentation will be given by; Martin Novák, Chief Financial Officer; and Pavel Cyrani, Chief Sales and Strategy Officer.

Now I'm handing over to Martin to start.

Thank you. So good afternoon good morning to everybody.

Let me start with financial highlights of 2021. On the first slide, you can see that our operating revenue increased by 7%.

EBITDA decreased slightly by 2% year-on-year. Net income is 81% higher.

Adjusted net income is 3% lower meaning basically flat. It reached CZK 22.3 billion.

Market capitalization however has increased significantly from CZK 276 billion to CZK 444 billion, making us actually the company -- European company out of Euro STOXX 600 Utilities Index as the best performer in our sector with shareholder -- total shareholder return, including dividend around 80% for last year. So, a very successful year.

Second highest dividend in the company's history was paid, 52% per share -- CZK 52 per share and TSR that I just covered exceeded 70% I'm sorry not 80%, but 70%. And international credit rating by S&P was reaffirmed at A minus with stable outlook in 2021.

We exceeded our EBITDA expectations, our guidance that was published in November and also net income guidance. So our original guidance was CZK 59 billion to CZK 60 billion.

Now we are at CZK 63.2 billion. Positive factors that improved the result compared to our original expectation is definitely better result from proprietary trading -- prop trading higher prices of power towards the end of the year.

We are still selling -- we still have some open position against the spot market and the prices were extraordinarily high, as most of you know, so we took the opportunity. And we also managed to generate more power both by nuclear plants and fossil fuel plants.

The negative that is something that a negative impact that's worth mentioning is lower gross margin on natural gas sales and higher expenses due to acquisition of new customers, as a few big players in the Czech Republic actually did not withstand the issue of rising prices and they basically had an open position and they went out of the market and we took over a few hundred thousand customers and it costs us some money to acquire those people so we have to serve them at our customer service centers and online channels. Important news.

In those volatile times, we decided to announce our proposed dividend – dividend proposed by the Board of Directors now actually rather than later this spring. And our proposed dividend is actually CZK 44 per share.

That is 106% of payout ratio. So, second highest in our history after last year's 122%.

Our proposal is a logic of 90% of standard annual net income, meaning, it's in the middle of our payout ratio 80% to 100%. So, 90% is actually CZK 37 per share plus all proceeds that we could distribute from a Bulgarian sale because Romanian sale was already part of 2020 dividend paid in 2021.

But not Bulgarian sale because Bulgaria was sold in July of last year. And out of nearly CZK 10 billion about CZK 6.4 billion was used to reduce debt appropriate to a loss of EBITDA.

And the remaining part CZK 3.6 billion were actually paid fully as a dividend and it makes CZK 7 per share. So in total of CZK 44.

Now I will hand over to Pavel Cyrani and he will guide you through our targets on Fit for 55 and ESG and so on.

Okay. Martin, thank you and hello, everyone also on my side.

Given that this is an annual presentation of our financial results, we have put in at several slides discussing also a year of implementing our new strategy to highlight some of the achievements we have made and also the plans for next year. Obviously, when we are preparing this it was in a slightly different setting now.

All of this is also being discussed in the setting of war in Ukraine. So this may not be on the slide, but I will make a couple of comments also on the subject as we discuss.

So page 6, you see a recap of the Fit for 55 package well discussed and published by the European Commission targeting greenhouse emission reduction, renewables, share increase and also energy savings. Obviously, the primary goal of this has been the reduction of -- on greenhouse gases.

But for Europe and overall all of these targets achieved also a better resilience because more than 50% of the fossil fuels are being imported to Europe also to Czech Republic. So by reducing emission also the dependency on imports for Europe is being reduced.

So with this when you read the recent announcement, we don't expect a significant impact for the mid-term target 2030 targets. If anything some of these targets or some of the countries are now announcing even more ambitious targets to reduce the dependency on gas.

Now as you see on page 7, we have been experiencing quite a volatile situation in the market, especially, in the last quarter and then is now continuing in the first quarter of this year. It was driven to a large degree at least in the last quarter by the mismatch of the supply and demand for natural gas.

Originally and firstly, we thought it was mainly driven by the quick recovery after COVID of the economy, while the supply remained stable. Now reading some of the reports on – especially, Gazprom gas storage is being empty there might have been already some politics also in these spikes before the year end.

Now at this moment, the prices are also extremely volatile as the markets are trying to see to what degree the supplies of gas and other commodities will be impacted by the war in Ukraine. Reacting to Fit for 55 Package.

We have introduced as I mentioned our strategy Vision 2030 Clean Energy for Tomorrow with an overarching goal of even more responsible and sustainable development over the next years with two main pillars: one was transforming our generation to a low emission by 2030 and reaching carbon neutrality 2050; and a second pillar providing the most cost-effective energy solutions to our customers. So in other words allowing -- we're not only reducing the emissions of our generation portfolio, but also allowing customers to reduce the consumption and emissions in their activities.

We also announced targets of reducing emission intensity by more than 50% by 2030 increase EBITDA without the effect of wholesale prices by 40% by 2030 and reach top 20 percentile among the European utilities in terms of ESG ratings. And all of that while keeping and maintaining our debt target of below three times EBITDA.

I have to say that we have fulfilled on these targets. This is mentioned in more detail on pages 9, 10 and 11.

I will not go and read all of the achievements. You can review them yourself.

I would just highlight some of them. We have achieved a record year in non-nuclear generation with 30.7 terawatt hours and partly also driven by the fact that we have yet increased the achievable capacity of one of the units in Temelin by four megawatts to 1,086 megawatts.

We've also launched the renewable portfolio buildup program in which the first step was applying for a subsidy program that was launched by the government for the first 2022 projects with around 200-megawatt peak capacity. Obviously this is a solid first step in our goal of achieving 1.5 gigawatt by 2025 and six gigawatts or 6,000 megawatts by 2030.

We are just expecting the results of this subsidy program because it's an auction the way it's designed to be announced in the coming days or weeks so basically any time from now. For the next year we basically continue to work along these lines, again targeting at least 30.5 terawatt hours for nuclear.

Also we will be applying for another set of photovoltaic power plant subsidies and we will start constructing those that succeeded in the first program that I just discussed. We are also working on decreasing the emissions for our centralized heating by going away from coal.

If anything, the exact timing of the decrease in coal production is something that may be impacted by the situation. We believe that the long-term targets will not change both 2015 neutrality and the significant reduction by 2030.

But how exactly is it timed between now and these days, I think that time will show in terms of like how much gas will be coming and what will be the price of gas vis-à-vis the other fuels. Page 10.

We have also fulfilled on our goals of reducing emissions. You see that 2020, we have reached below 0.3 tons of CO2 per megawatt hour average emission intensity.

We will be even lower in this year 2022, which puts us well below a new CCGT plant and significantly below a marginal plant in Germany. So with this we are extremely well-positioned to a situation with high CO2 prices.

The second pillar on page 11. As I mentioned this is the one we focused on our customers and helping them reduce emissions, safe energy, build decentralized generation and so forth and so on.

The key part of it is investing in smart grids and in our distribution both in the electricity distribution as such and as well as other parts of it, the fiber optic routes and smart metering. This is all well underway.

And we have also succeeded in building up the capacity and the offering that we have for our retail customers in terms of rooftop solar heat pumps and so forth. 2022, we expect the trends -- yields to be up.

Obviously, if there is a discussion on reducing the dependency on gas that means in our eyes electrification. So going from gas to electricity and the electricity is either being supplied by us from the central stations or also by us -- but by building up decentralized electricity generation together with devices such as heat pumps.

These are the numbers achieved in 2021 and the path for 2022. Now, a brief look on the overall ESG scoring, a way that expresses the sustainability of our business.

You see that we follow two rating agencies MSCI and S&P Global Ratings. And overall, since setting the target we have been able to increase our rating in -- by both companies.

You see the number, and it's along basically all the dimensions. We have also set this ESG, KPI as one of the top five KPI's objectives for all Board members with a minimum weight of 15%.

And our target for 2022 is to go from BBB to A rating with MSCI. And I think we are well underway of achieving this.

Martin?

So, thank you, Pavel. So now, I will provide you more details on updating our dividend policy, together with announcing dividend for 2021 for the CZK 4 per share.

We also decided to update dividend policy. So, payout ratio would be moving after a few years when it was 80% to 100% of net income back to 60% to 80% of our adjusted net income.

And actually the logic behind the move is that, with this payout ratio we are able to have a sustainable payout ratio for ultimately a long time. Even with our relatively intensive CapEx plans for developing our photovoltaic projects in the Czech Republic and also acquisitions in ESCO environment.

And at the same time, especially when the second phase of building out our renewables portfolio would accelerate, we believe we will be able actually to sustain such a level of dividend versus paying a bit more for a few years now and then maybe more radically reducing the payout ratio. Second logic is that there is an industry average, which we show actually our competitors and market average is about 60% of our adjusted net income, meaning that we are basically getting back towards the standard payout ratio rather than to be on the very end of the scale.

On the next slide, actually you can see our financial ambition for 2022, which -- where we also show a potential dividend for 2022. Due to a significant increase in power prices, growth ambitions in ESCO services, we actually expect our EBITDA to grow from CZK 63.2 billion to CZK 85 billion to CZK 89 billion.

I think as far as I remember, this is the largest growth in our history, in terms of both percentage and also a nominal amount of billions of Czech Crowns on a year-on-year basis. Same applies to adjusted net income, where we expect growing from CZK 22.3 billion to CZK 38 billion to CZK 42 billion.

Based on that, our projected dividend would be in a range of CZK 56 to CZK 62 per share, which is by far the maximum we ever paid. Our record dividend was CZK 53 per share a few years ago.

So this will be well above actually the maximum dividend from the past. The calculation is simple.

We just took 80% of CZK 38 billion and 80% of CZK 42 billion divided by number of years and this is the number. So the hint could be that until there is a significant growth in CapEx needs, we would probably tend to keep the dividend closer to 80% payout ratio rather than 60% of the payout ratio, so despite the decrease or reduction of our payout ratio in percentage terms, so in nominal terms the dividend will be actually growing pretty significantly.

So, now let's switch or let's move on to financial results section, where we will look at the financial results in more detail. Our EBITDA, as we already said of CZK 63.2 billion – it reached CZK 63.2 billion; adjusted net income CZK 22.3 billion.

Adjusted net income is basically flat compared to 2020. And EBITDA is a little bit lower but the main reason for a little bit lower EBITDA is actually a decrease in EBITDA from assets that we sold in Romania and Bulgaria.

Very simple explanation. Those were sold to Romania at the end of first quarter.

Bulgaria in July. So we are kind of missing EBITDA from those assets in 2021 but we had full EBITDA in 2020.

So this is the main difference in overall earnings. Otherwise, the existing assets have delivered CZK 60.6 billion versus almost CZK 68 billion.

The reasons are actually listed on the slide mainly higher power prices, higher results from trading, as you will see later on. We had higher power generation of nuclear plants and higher sale of coal, especially to our power plants.

On next slide, you can see actually year-on-year variance where the changes are pretty small actually on existing assets. Generation CZK 0.1 billion variance only, so basically flat.

However, there are two effects that kind of cancel out each other. Higher power prices helped us with CZK 3.9 billion and specific temporary effect, which is mainly regulation of emission allowances trades that relate to hedging of 22-plus generation positions and time arbitrage with actually carbon credits had a negative impact of CZK 2.1 billion.

And it will have positive impact in the following years. And the revaluation of hedging electricity sales for 2022 CZK 1.6 billion, again positive effect in 2022.

Mining, mining 1.1 billion variance positive mainly due to higher CEZ power plants; distribution CZK 0.5 billion. Better result mainly due to higher volume on distribution where we are actually back and even exceeded pre-COVID numbers of 2019.

Sales segment CZK 1 billion better mainly improved the business-to-business segment margins, higher volume of electricity sales to residential customers in Czech Republic and as a result of COVID – post-COVID recovery and somewhat lower margin natural gas to residential customers. On the next slide you can see actually all items that are below EBITDA.

What is worth mentioning is depreciation and amortization that is CZK 3.3 billion higher mainly due to acceleration of depreciation on our power plants where we accelerated the depreciation from original 2038 to kind of around 2030-ish levels. So making it more realistic.

That's why we had a high depreciation on those plants. We also had higher depreciation and amortization, due to provisions that were set up for demolition and decommissioning of coal-fired plants of CZK 1.9 billion.

Then impairments. Impairments were significantly lower.

They reached CZK 15.5 billion and the vast majority relates to mining operations where we basically have written off two-thirds or even more of value of our core mining activities, due to the potential closure of coal mines earlier than originally anticipated. And then there is net income that is 81% higher compared to previous year.

And adjusted net income -- adjustments listed on the right side as I already said mainly related to mining activities. Something of Poland something to our coal -- hard coal plant CZK 200 million [ph].

We -- on the next slide you can see actually, that our emission-free generation has exceeded 60%, more precisely 61%. Power generation is emission-free.

39% is -- generation is coming from fossil fuels. In EBITDA terms, it's even more significant emission-free generation mainly nuclear 86% and fossil fuels' EBITDA only 14%.

Financial ambition for 2022. As I said our EBITDA is CZK 55 billion to CZK 89 billion, with potential risks opportunities listed on the left bottom side of the slide.

More important information, is actually on the right side. Our volume is 91% sold for 2022.

9% is our open position. However, in revenue terms, it's 76% versus 24%.

Why such a discrepancy? Because of course, we hedge our position over three years.

So average achieved prices for those 91% are in general over the 9% that will be sold at current mainly spot prices, which are multiples of what we hedged for in the past leading to average achieved price for this year of €90 to €95 per megawatt hour compared to €79 per megawatt hour, which is currently hedge position of those 91% of power generation. Next slide.

Actually, we are updating our ambition on EBITDA. On May -- in May 2021, we actually predicted our 2025 to achieve CZK 65 billion to CZK 70 billion.

Now our estimate mainly due to positive effect of power prices is CZK 105 billion to CZK 110 billion, so CZK 40 billion more on EBITDA. Simply said, 2025 target will be more than achieved in 2022 already.

So that's a significant improvement in our estimates. Now I will continue with generation mining segment.

On Slide number 23, you can see actually our generation. Czech Republic slightly better 2% higher EBITDA, with the effects I already described.

So how power prices compensated with temporary effects or revaluation effects that are negative in 2021 and will materialize in 2022. Germany pretty much flat numbers.

Poland lower numbers, mainly due to higher emission costs. Mining in the Czech Republic, higher sales to Czech actually to Czech plants saw 31% better results and our divested asset 73% decline because we divested those assets so we couldn't of course operate them for a full year.

Generation from renewables and nuclear Slide 24. Here you can see actually, a year-on-year improvement by 1% on overall balance, 2% on nuclear up and 6% down on renewables.

On renewables, it's mainly due to worse wind conditions in Germany, significantly worse conditions. And that was the main factor.

Actually, in nuclear, we had shorter outages in Dukovany plant and also increased achievable output on both units at Temelin. Estimate for 2022 is about 2% lower than for 2021 and we should be reaching something like CZK 33.9 billion.

And there will be a slight decline on the nuclear, mainly where we plan actually average failures, we plan it on average. And in 2021, they were actually below that average.

So if they are built at average as well, we should probably do better, somewhat better, flat in 2021. But basically the power generation is flat for nuclear.

A little decline actually in the renewables, mainly due to less water available in Czech hydro plants compared to 2021, when there was a lot of snow in the winter. This winter there is no snow, so it will have an impact on lower generation.

And we expect improvement in Germany, if they generate. Based on average wind conditions, we should be about 31% better in Germany.

Next slide, you can see, fossil fuels, there is a significant change. We are 17% lower compared to 2020, mainly due to sale of Pocerady power plant at the end of 2020.

We also shut down Prunéřov I power plant in June of 2020. We shut down Energotrans III power plant, one of our oldest plants actually in Germany on August 2021.

And those three effects actually lead to 18% decline in our coal generation. We also had a lower generation in Poland, mainly higher prices of carbon allowances.

And the natural gas went down by 19%, again, due to our situation, gas plant is being run based on basically spot prices. So it's not that predictable how the margin will look like and that's why we had a decrease of 19%.

For 2022, we plan to get back to 3.1 terawatt hours at the plant in Pocerady, which is CCGT, so plus 24%. We plan actually to increase our generation in Poland by 19% and stay pretty much flat or plus 3% on coal assets in the Czechia projects.

Now, actually, the next slide is showing our carbon trading position. For 2022, we are 84% hedged or 14 million tons at €33 per ton.

And open position is actually 2.8 million tons at the market price. Natural gas.

For our, CCGT we are about 70% contracted, 31% is open position. This relates to CCGT.

Compared to our retail and wholesale customers, there our position is 100% contracted in natural gas for the customers who use actually gas for heating purposes. And last slide, but important as well, my section.

It's actually hedges for 2023 through 2025. You can see that we are hedged at 58% from 2023, down to 6% to 2025.

Average achieved prices are actually shown as well and same for carbon credits for 2023 through 2025. Now, I hand over to Pavel to guide you through the last section of presentation.

Martin, thank you. So let me comment on the results in the distribution and sales segments.

As you see on page 29, there's CZK 0.5 billion year-on-year growth in distribution, mainly driven by a higher volume of distributed electricity and lower losses. And there is even higher growth CZK 1 billion year-on-year in the sales segment, mainly driven by the recovery in the B2B business, both the energy efficiency, energy services and commodities for the -- our industrial customers.

The Retail segment is actually flat or slightly decreasing between 2020 and 2021, mainly in Q4, which was driven both by the high volatility and very high prices and also the fact that due to the collapse of several suppliers CEZ as well as other companies served as the supplier of last instance that is basically providing electricity to those customers whose standard supplier went bankrupt. Page 30 shows the volumes.

You see that electricity distribution is up by 5% year-on-year both in the industrial segment and the residential. Everything is driven by -- or the industrial mainly is driven by the recovery after COVID.

And the residential is also impacted by colder winter of 2021. Now in terms of the volume of the supply business, supply electricity and gas you see the increase is even higher 16% combined gas and electricity, 11% in terms of number of customers and that is driven by us taking over a significant share of the customers -- of suppliers who collapsed in 2021.

In terms of Energy Services, I already mentioned the fact that, we see a recovery. Last year we saw a recovery mainly driven by the recovery after COVID.

This year we also expect an increased demand for these services driven by the pursuit of the industrial customers to stabilize their electricity prices have some on-premise electricity generation and also to achieve energy efficiency. So the last year growth was 10%.

And for this year we project almost 30% growth in terms of revenues. Last but not least, trading, we have had a record year in 2021 in terms of our proprietary trading making almost CZK7 billion of trading margin.

Out of the CZK7 billion -- CZK6.8 billion about CZK4.7 billion is actually also booked in 2021. Around CZK2 billion will be booked in 2022.

So it's helping the results of this year 2022. Now out of the CZK6.8 billion, CZK3 billion were made just in the last month of the year in December, again driven by the volatility and growing prices and being on the right side to both of the transaction.

We also made the point as you see in the structure of achieved margin that this is really independent of the main electricity generation activity. Most of the profit is being made in the Western European markets and also in gas trading.

These two combined make about 80% of the proprietary trading margins. Now, the development in 2022 also looks very good on this introspect as the volatility continues.

Now the last page of the presentation also recaps the impact and the assessment of it -- of the war in Ukraine on CEZ Group. I mentioned some -- the impact it may or may not have on the strategic direction both of European as a whole and as well of CEZ.

And I mentioned that in terms of the strategic direction that we don't expect a significant change. Now this slide talks more about the immediate impact where the combination of sanctioned and also building destruction in Ukraine leads or may lead to supply chain disruptions.

We obviously, intensively evaluate all the potential impacts created a task force that meets almost daily to follow on these topics and basically do preventive measures as to limit the potential impact on CEZ Energo [ph]. The four main areas where we -- where these task, forces are working on in securing of supplied nuclear fuel that is coming from Russia.

We are also working on securing uninterrupted maintenance of generation facilities where mainly the supply chain disruptions will have an effect of us. We are also reviewing our positions in gas and making sure that we have gas for our end customers.

And last but not least, we are also following closely all the obligations arising from commodity agreements mainly margining and credit agreements and the resulting margin calls. All-in-all, we have at this moment the risks well described and we are taking active measures in order to mitigate any impact it will have on the business results of CEZ Group.

So, this being the last slide of the presentation, I think we are now ready to take questions.

Hi, good afternoon. Hopefully, you can hear me.

Two maybe three questions for me. The first one is on your new hedging for 2022.

If I take 91% at 79, basically I would need to assume something around between €200 and €250 per megawatt hour to reach to your €90 to €95 per megawatt hour targeted achieved power price. Is it the right calculation?

Am I missing something? Because it seems that you are pretty bullish I would say at least in my view assuming that the power price will stay at the levels where it is currently.

And the two next questions are on the current situation on the power market. Can you please share your thoughts on the windfall profits and the new power market design something that the European Commission is talking about?

Any thoughts from you would be much, much appreciated. Thank you.

Look. As to the hedging I think your calculation is directionally correct.

Honestly, it is very difficult to make predictions about the power prices. So, for our predictions we basically use the market.

The prices that you can observe in the market. That's why we have also unusually wide range of the results for this year.

If you look at the screens just now, you will see prices around €250 for the base load and close to €300 for the peak for the remaining quarters of 2022. Whether that is something that will go down or will stay the same or will go even higher as I say, it's very difficult to say.

I mean we have been observing prices over €500 for some of the quarterly products just a couple of days ago now it went down. So, this is what we are basically looking at the screens and we're not making our own projection for the quarters because it's just very difficult to make.

Now, in terms of the windfall profit and the market design, honestly, this is all very fresh. This is also now being put for a -- only for discussion for European Commission discussion.

There is not anything that we could comment at this moment. We do see that in some countries there has been some suggestions in the sense.

We also see the companies pushing back. We see that -- and I understand that EDF is basically pushing back against some of the measures that were then put on EDF from the government.

We were also driven by the situation in Slovakia where we saw at first such general profit tax, but then it will translate into a bilateral agreement. But basically nothing was implemented yet.

So, very difficult to comment. Overall, we believe that a functioning market is the best way to achieve the market transformation and the optimal results for all the customers.

At the same time, we believe and kind of agree with the government stepping in and providing support for the customers impacted by energy -- impacted by the high prices of energy pushing them into energy poverty. So this -- we all observed, but there is nothing on the table at this moment and either for European Commission, and there's no discussion and I would say like serious discussion of any of these measures in Czech, going forward.

I would add that our current government is very liberal government that believes in the market forces, market solution. And we are -- if they would like to subsidize the poorest people who are suffering most, we will be able to administer such a process.

So if they decide to, for example, discontinue payments for renewables on their behalf. We are happy to process it for the government as we actually did in November and December reduction in our VAT actually on the customer invoices.

So that's where we stand. So I will not be -- I would see a risk of anything that you actually mentioned is relatively remote.

Thank you very much.

Hi. Good afternoon, everybody.

Thanks for opportunity to ask questions. So I wanted to ask you about your flexibility around increasing the lignite volumes.

If you were thought would you be able to kind of increase the temporary output and on an annual basis? Is there any upside to your production guidance if needed?

And then second, have you started to see any kind of a demand distraction among your clients with response to the high power bills? And so if you can comment on this one.

And the third one, I wanted to ask you, is there any way you can accelerate hedging or you stick to the patent that you typically have?

I’d just -- let me comment. In terms of flexibility, honestly, there's not much flexibility.

Everything is now with the prices and the demand running at full speed. So there are -- there is some increases, but it's more driven by like the exact timing of the outages; the planned outages, the maintenance outages that we have.

So that's it. In terms of hedging, we basically continue in a similar pace with our hedging as always.

We don't intend to accelerate it, neither to decelerate it. Please be aware of the fact that hedging increases the need for margin calls.

So this is also something that we need to observe when we sell on the forward basis. So something that we need to follow now with the prices jumping by €100 within one day that creates some extra need for watching these positions exactly.

And there was some centric.

There was actually demand destruction on…

Yes. We don’t see -- at this moment, we don't see any demand disruption.

It doesn't say that we cannot see it further down kind of later on. But as you saw the demand last year went actually up significantly for the industrial customers.

The first quarter of this year the demand is not decreasing. It continues.

If the prices of 200 to 300 should prevail several years then we could see maybe some heavy industry leaving, but we are not observing it now. On the other hand, we are observing a significant increase in interest for energy saving solutions.

So heat pumps, photovoltaics, battery systems and retail for retail customers. Many of them are actually thinking of leaving gas and replacing it with electric power heating systems for example, heat pumps, which are -- that are much, much more efficient.

So that's what we are seeing actually which is good for our installation business.

Okay. But is this -- on the demand disruption, if I can have a quick follow-up.

Is this because, you have not yet increased the prices, or is -- or [indiscernible] through the main increases because I would have thought like the increases so far do not really reflect fully what's going on in the commodity market or in the power market.

Well, it's difficult to say. Also, it's difficult to say what exactly will the customers be exposed to?

Because many of the customers buy forward, the hedge price or fixed price for maybe a year some for even up to three years. So, some of these customers can basically not be impacted by these prices at all because, if you look at the forward price of 2024 and '25, it's below €100.

And if they are fixed for these 2023, they will not be affected by these prices. Some customers who buy on spot are impacted immediately and we know it because they are calling us, telling us, they have a very high electricity price.

But I'm just saying that, we don't see an impact that you would see on the portfolio level of consumption disruption. You could probably find like individual companies that decided not to operate some production lines because of high electricity prices.

But if you look at the portfolio level, we don't see demand disruption.

Understood. Thank you, very much.

Okay. Thank you everyone.

Thank you for participating. And if you have some follow-up questions, please do not hesitate to contact Investor Relations.

Thank you very much and bye-bye.

Goodbye.

Bye.