Statkraft Investor Update August 2016 Disclaimer This - PowerPoint PPT Presentation

Statkraft Investor Update August 2016

Disclaimer This presentation has been prepared by, and the information contained herein (unless otherwise indicated) has been provided by Statkraft AS (the "Company"). By attending the meeting or otherwise viewing this presentation you agree to be bound by the following conditions. This document and the information therein are being furnished to you solely for your information and may not be reproduced, redistributed or passed on, in whole or in part, to any other person. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution or reception, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This document is not a prospectus and does not comply with rules or regulations regarding investor information, and has not been approved by or filed with any stock exchange or regulatory authority. Amongst others, this document does not disclose risks and other significant issues related to an investment in any securities. Investors should only subscribe for any transferable securities on the basis of information in a relevant prospectus and term sheet, and not on the basis of any information provided herein. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company, or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The information contained in this document is provided as at the date of this document and is subject to change without notice. This document may not be distributed or delivered to any person or in any jurisdiction where such distribution is unlawful or restricted. This document may not be delivered in the United States or to any person or entity in the United States. 2

Agenda  Statkraft overview  Strategy and investment ambition  Funding and liquidity  Summary  Appendix 3

Industry-leading Northern-European hydropower producer with international growth opportunities Norway Sweden 12 916 MW 1 587 MW Installed capacity 100 % 18 471 MW 1 owned by the Norwegian state UK Power production 243 MW 56.3 TWh 2 A- / Baa1 (+ projects) from S&P and Germany Moody’s Nepal 23 MW 99% renewable 2 692 MW energy Laos 50 MW Albania Panama 7 MW Philippines Turkey India 146 MW 122 MW 91 MW Peru 296 MW Brazil Zambia Chile 149 MW 5 MW 143 MW STATKRAFT SN POWER/ AGUA IMARA 1 Statkraft’s direct and indirect ownership in power plants. Excl. 794 MW of district heating capacity. 2 Actual production 2015. 4

Key credit strengths  Strong market position  Balance sheet flexibility - A low-cost and flexible generator of renewable - Investment program adapted to financial capacity electricity  Owned by the Norwegian state (AAA/Aaa)  Stable cash flow - Long-term industrial contracts stabilize cash - Historically strong support from owner flow 5

Statkraft has upheld EBITDA despite a decline in European power prices Underlying EBITDA incl. share of profit Quarterly average electricity prices from equity accounted investments 13,5 Bn NOK 12,8 1,1 12,2 0,7 70,00 EUR/MWh 11,8 0,9 0,9 10,9 60,00 0,7 Nordics 50,00 Germany 6,9 40,00 0,3 12,4 12,1 11,3 10,9 30,00 10,2 20,00 6,7 10,00 0,00 2011 2012 2013 2014 2015 1H 2016 2011 2013 2015 2017 2019 2021 Source: Prices from Nordpool Spot, Nasdaq OMX and EEX as of 11 August 2016 6

Agenda  Statkraft overview  Strategy and investment ambition  Funding and liquidity  Summary  Appendix 7

Strategy 1 2 3 4 5 European Flexible Market Operations Hydropower in Wind Power District Heating Generation Emerging Markets Value adding position Utility scale onshore Stable cash flow from Northern European Attractive platform to in European Market wind power business district heating in hydro generation build a sustainable Operations Norway and Sweden player with unique competitive position asset base and in Emerging markets optimization skills 8

1 European Flexible Generation: Unique asset base and optimization skills Statkraft's first priority is to operate,  Production assets with low marginal cost, high maintain and develop the long term flexibility , great longevity and almost zero carbon economic value of the existing asset base emissions  Unique optimizations skills leading to a premium price capture through an integrated business model Increasing need for re-investments 9

1 Statkraft has a unique cost position 60 EUR/MWh 50 40 Average Nordic price 2016: 30 25.08 EUR/MWh (Spot and forward) 20 10 0 Statkraft cash cost Cash cost gas Cash cost coal Cash cost nuclear 1 2 2 3 hydro 2015 Statkraft’s cash cost: 6.36 EUR/MWh Full cost incl. depreciation: 9.04 EUR/MWh 1 1 Annual Report 2015: Production cost 81 NOK/MWh. Incl. property tax and depreciations, excl. sales costs, overhead, net financial items and tax. Based on normal production from power plants under own management in Norway, Sweden, Germany and the UK. 10 2 Cash costs for coal and gas: Estimates for modern plants. 3 Estimates for nuclear plants in UK / Finland is around 21 EUR/MWh. Same in Sweden but nuclear tax adds another 7 – 8.5 EUR/MWh. Nuclear tax expected to decline.

1 Long-term contracts stabilize earnings GWh 30 000  ~ 18.5 - 20 TWh sold on long-term contracts with power-intensive Nordic 25 000 industry 20 000  Corresponding to ~ 40% of Statkraft’s 15 000 annual mean power production for 10 000 Nordic hydropower 5 000 0 2016 2018 2020 2022 2024 Statutory priced lease agreements Statkraft's share of leasing agreements Long-term market contracts 11

2 Market Operations: Value creation through a market oriented and adaptable organization Strategic position and strategic priorities Solid contributions from DAMP and Trading & Origination 200 MEUR Strengthen activities in Europe and in selected emerging markets  South America 150  India 100 Service-focused business model to exploit new opportunities in a transforming European energy 50 market  Market access  Solar PV 0  Venture capital 2008 2009 2010 2011 2012 2013 2014 2015 Net profit adjusted for tax. Opex related to DAMP not included 12

3 Hydropower in Emerging Markets: To build a sustainable and profitable position  Established positions in several promising emerging markets Considering broadening technology scope and leveraging competences in wind power and solar - Long-term economic growth - Rising energy demand - Increased demand for renewables Contracted share of 2016 2020 2025 production Turkey Peru 80% 43 % 26% Albania Brazil 98 % 98 % 98 % Brazil Chile 46 % 50 % 21% Statkraft India India - - - SN Power Peru Nepal 100 % 100 % - Chile Turkey 100 % * * * Feed-in tariffs are available in Turkey 1 year at the time in the first 10 operational years for an asset 13

4 Wind power: Utility scale business model in Europe Major player in the Nordic wind power market with Solid track record in delivering projects on cost 769 MW in operation and time Onshore 142 MW in operation with financial partner in the UK Successfully complete1000 MW Fosen project in Norway and 36 MW Andershaw in UK Existing Under construction Planned Operation & Maintenance for Sheringham Shoal wind Offshore farm (317 MW) Dogger Bank  No new investments into offshore Triton Knoll  Focus to secure value of existing assets Dudgeon Sheringham Shoal MW figures are gross numbers (100 percent) * Ownership share in Sweden is 90,1% in Södra and 60% in SCA. 14 14 **Ownership share in UK is 51% in Alltwalis and Berry Burn and 40,8% in Baillie.

5 District Heating: Continue to strengthen profitability through efficient operations 17 facilities in Norway and Sweden with an annual production of ~1.1 TWh Limited capex going forward Increased profitability through optimization of existing portfolio 15

Investment ambition 2016 - 2020  Investment ambition 2016 – 2020 subject to financial capacity: NOK 37 bn  Committed to maintain current ratings Decided investments Reserved 14 10 9 4 37 billion Maintenance and reinvestments Full flexibillity 16

Allocation of investments 2016-2020 Ambition Geographical allocation Technology allocation Trading & District Origination Heating Onshore 1 % 2 % WP 11 % Emerging markets 37 % Offshore WP 16 % Hydropower 70 % Norway Europe ex 45 % Norway 18 % 17

Solid base in the Nordic region Estimated annual contribution after committed capex in 2020 EBITDA + share of profits Power generation (71 TWh) Outside Outside Europe Europe Europe 8 % 10 % outside Nordic Europe 5 % outside Nordic Nordic outside 11 % Norway 10 % Nordic outside Norway 7 % Norway Norway 72 % 77 %  Predominantly Nordic hydropower but increased diversification 18