Government (AAA) ownership and backing. Fully regulated. The most - PowerPoint PPT Presentation

Government (AAA) ownership and backing. Fully regulated. The most important infrastructure. Of all.

Governance reflects the strategic role * * One business – functional divisions and subsidiaries. 3 The most important infrastructure. Of all.

Facts 2016 Grid size 12,000 km high voltage lines Substations 154 Employees 1323 Balance sheet NOK 50,7 billion Revenues (adj) NOK 7,7 billion EBITDA (adj) NOK 4,3 billion Profit after tax NOK 1,4 billion (adj) The most important infrastructure. Of all. 4

One defined mission “ To develop the next generation power system in Norway by 2030. - Well under way - Strong project track record 5 The most important infrastructure. Of all.

2 Focused investments 6

Significant activities ongoing Balsfjord-Skaidi (9%), Oct. 21 Sildvik rehabilitation (7%), Oct.18 Skjomen rehabilitation (9%), Jan.19 Ofoten-Balsfjord Kvitfossen OTHL and substations (45%), Jul.17 (88%), Dec. 18 Namsos-Nedre Røssåga, Voltage upgrade Namsos-Åfjord and (66%), Dec. 18 Surna-Snilldal (19%), Sep. 19 Klæbu- Namsos, Voltage upgrade (75%), Dec.18 7 Fremtiden er elektrisk

Significant activities ongoing Reactors for voltage reduction (95%), Dec. 18 Vemorktoppen (29%), Dec. 18 Furuset Control system (94%), Dec. 16 Nesflaten Reinvestment control Systems (30%), Dec.17 Inner Oslofjord subsea cable (38%), Dec. 18 Vestre korridor, OHTL, substations package 1 and 2 Outer Oslofjord (43%), Feb. 19 dismantling old subsea cable (59%), Nov. 17 NSL Interconnector UK (5%), Dec. 21 Vestre korridor, NordLink Voltage upgrade (90%), Dec. 20 Interconnector (20%), Commissioning Dec 2019 8 Fremtiden er elektrisk

9 Focused investments

Significant investments successfully completed • Execution on track Apart from the two new interconnectors, more than NOK 40 billion passed final • investment decision since 2004, about 50% already completed. The two new interconnectors currently being built to Germany and UK are • progressing within plan and budget. • Consistent and significant savings • Both completed and ongoing projects are below total budget, mostly within time. Major projects completed within the last 10 years include: Skåreheia-Holen, Varangerbotn-Skogfoss, Sauda-Liastølen, KrSand-Bamble, Sima-Samnanger, NorNed interconnector, Ørskog-Sogndal, Eastern Corridor, Outer Oslofjord, Skagerak 4 interconnector, 2/3 of Ofoten-Balsfjord and numerous substations. 10 The most important infrastructure. Of all.

Bringing Statnett's investments to a new level Billion NOK 18 Expected Investments Investments 16 14 12 10 8 6 4 2 0 11 Focused investments

Priority #1: HSE 12

Health and safety, comes first – always • Injury frequency halved • No severe environmental damages • Stable absence due to illness: 3,3% in 2016 13

3 S&P research update, May 2014

Ownership and financing Long term State Ownership (Kingdom of Norway AAA) Predictable, All investments Critical mature politically sanctioned regulation infrastructure “ The TSOs essential role in the Support / Equity power system makes it important that these functions are unified and owned by the State . 2012 Meld. St. #14 15 The most important infrastructure. Of all.

"Norway most stable and predictable regulatory framework in Nordics" Moody's Sector In-Depth Report, 15 June 2016 16 The most important infrastructure. Of all.

Predictable revenues and profitability 1. Revenues: Costs 40% Costs 60% efficiency score Efficiency score: 100% Successful benchmark with other European TSOs The 15% efficiency programme Timely compensation No time lag on investments, system service costs or depreciation, two years lag on operational costs (compensated with inflation) 2. Regulated rate of return: (2,5%+inflation+0,875*5%) * 40% + (5ySwap rate+margin) * 60% (1-tax rate) 17 «Business Risk: Excellent»

Stable revenues, improved from 2013 8000 7000 6000 5000 4000 3000 2000 1000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 RAB (index) EBITDA (IFRS) EBITDA excl. higher/lower revenues 18 «Business Risk: Excellent»

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Conservative finance policy Sufficient liquidity • 12 months reserves • NOK 8,0 bn RCF (matures jan. 2022) • EUR 300 mill undrawn loan from EIB • Normalised cash position: Approx. NOK 2 bn Low counterparty risk • Minimum rating requirements • Credit Support Annex (CSA) Low interest rate risk • New regulated rate of return from 2013 • Seek to correlate rate on debt with NVE-interest rate 20 Low finance risk

Multiple sources of capital as of 23.08.2017 Issues in SEK (SEK 1 200 million) Domestic Bonds* (NOK 10 560 million) Issues in CHF (CHF 400 million) Issues in JPY (JPY 4 000 million) Drawn Bank Loans EIB** & NIB (NOK 6 190 million) Issues in USD (USD 1 080 million) Issues in EUR (EUR 70 million) Issues in Domestic CPs (NOK 2 000 million) * New NOK 1 bn bond issue with settlement in Sept -17 included ** EUR 300 mill undrawn loan from EIB not included 21 Low finance risk

Low re-financing risk as of 23.08.2017 Million NOK 5 000 Commercial Paper Bank Loans (EIB & NIB) 4 500 Domestic Bonds 4 000 International Bonds 3 500 3 000 2 500 * 2 000 1 500 1 000 500 - 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 * New NOK 1 bn bond issue with settlement in Sept 17 included 22 Low finance risk

Long term funding Access to capital markets supported by Credit Facility NOK 8,0 billion • Robust A-rating • Normally EMTN-documentation Core bank group: 23 Low finance risk

5 Summary 24

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