Eesti EnergiaInvestor Presentation

7 March 2013

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Disclaimer

2

Margus KaasikChief Financial Officer

E-mail: margus.kaasik@energia.ee

Phone: +372 715 2203

Veiko RäimHead of Investor Relations and Treasury

E-mail: veiko.raim@energia.eePhone: +372 715 2884Mobile: +372 5668 1568

Presenting Today

3

• Leading oil-shale-to-energy company, 100% owned by the Republic of Estonia

• Integrated utility operating on converging Nordic and Baltic power market with added value from unique shale oil business

• Total revenues and other operating income €868m, assets of €2.5bn and EBITDA of €278m in 2012

• Regulated distribution network providing ca 30% of EBITDA

• Rated Baa1 / BBB+ from Moody's and S&P

• Reasonable leverage with long term maturity profile

Introducing Eesti Energia

4

• 350 MW Estlink 1 power cable between Estonia and Finland operational from 2007

• Nord Pool Spot power market established in Estonia in April 2010

• Integration to Nord Pool to be improved with 650 MW Estlink 2 cable (expected commissioning in 2014)

• 700MW Nordbalt cable between Lithuania and Sweden potentially commissioned by 2016

• Most recently NordPool Lithuania price area established on 18 June 2012

• NordPool Latvia establishment expectedon 3 June 2013

RUSSIA

FINLAND

SWEDEN

ESTONIA

Moscow

St. Petersburg

Murmansk

WHITESEA

BARENTSSEA

RUSSIA

NORWAY

LITHUANIA

LATVIA

DENMARK

BELARUS

UKRAINE

Gotland

Oland

Minsk

Riga

Stockholm

Oslo

Copenhagen

Goteborg

Stavanger

Kaliningrad

BALTICSEA

NORTHSEA

POLAND

Vilnius

GERMANY

NETHERLANDS

GULFOF BOTHNIA

Tallinn

Helsinki138

TWh

137TWh

26TWh

81TWh

Planned interconnectors Existing interconnectors Nordpool Spot member

Source: Eurelectric, data for 2009

Estonia is Part of

5

Yearly Power Price and Spread Dynamics

Nord Pool Estonia Price 7% Higher than in Finland• Average price in Nord Pool Estonia price area

39.2 €/MWh (-9.6% y-o-y), in the Finnish price area 36.6 €/MWh (-25.7% y-o-y)

• Clean Dark Spread (excl. oil shale and CO2costs) 1.2 €/MWh higher than in 2011 due to lower CO2 price (-44% y-o-y)

• Hourly price in Estonian price area was equal toFinnish price for 62% of hours and above thelatter for 32% of hours

6

Spread Between NP Estonia and Finland(% of total hours)

Revenues

Investments

EBIT

Operating cash flow

Positive Revenue and Cash FlowPerformance in 2012

7

Revenue Growth from Sales of Network Services and Liquid Fuels

Revenue Breakdown 2012Change of Group Revenues by Products

8

9

Group’s Profitability Improved byDistribution Network and Oil Sales

Impact on Group’s Profitability

Capital Expenditure Peaked in 2012

Confirmed InvestmentsCapex Breakdown in 2012

10

Several Projects Close to Completion

11

2014

New Enefit280 Oil Plant

• Designed based on the process in existing oil plant with added features and increased capacity• EPC agreement signed in July 2009• Hot commissioning commenced in H2´2012, first barrel of oil at the end of the year• Successful operating history of the plant a prerequisite for potential further investments in oil

sector

12

Outlook for FY201 3

EBITDA Outlook

Revenue Outlook Comment

13

• Revenue outlook changes:

� Added production capacities (windparks, Enefit280 oil plant and Iru WtEplant)

� Opening of Estonian electricity market

• EBITDA outlook changes:

� Increased production of liquid fuels

� Addition of full CO2 expense

Summary

14

� 2012 revenues 868 million euros, +1% y-o-y

� EBITDA growth (+5%) including:

– Higher network services sales margin

– Higher profitability of oil sales

� Capital base enhanced by 150 million euros of equity and 300 million euros of new eurobond issue

� 2012 investments of €513m expected to reduce in 2013 as projects complete

� Record high production (211 th tonnes) of liquid fuels

� 2013 expected to bring higher revenues and EBITDA, with the extent depending on Enefit280 results in 2013

Eesti Energia Results in 2012

Appendix 1

Electricity Market Opening in 2013Electricity Sales Volume at

Regulated Prices

• As at the end of the financial year, Eesti Energia had concluded over 408 thousand open market electricity contracts, covering over 58% of all Estonian connection points

• Distribution Network or its designated seller is obliged to supply consumers who have not chosen electricity supplier on average monthly NordPool Estonia spot price plus reasonable sales margin

16

Average Electricity Sales Price in the Regulated Market

Electricity Sales Revenues at Regulated Prices

Higher Retail Sales in the BalticsElectricity Sales Volume at

Unregulated Prices

• Average sales price excl. power cable revenues and financial hedges 45.6 €/MWh (+0.01 €/MWh, +0.02% y-o-y)

– Underwater power cable revenues €9.2m(-€6.5m, -41% y-o-y), +2.1 €/MWh

– Financial hedges €11.0m (+€14m y-o-y), +2.5 €/MWh

17

Market Share in the Baltic Countries

Average Electricity Sales Price in the Unregulated Market*

Electricity Sales Revenues* at Unregulated Prices

Revenue Growth from Higher Network Tariff

Network Services Sales Volume

• Average network losses of 2012 at 423 GWh, 6.0% (+0.2pp y-o-y)

• Network tariff increased on 1 August 2011

18

Average Network Services Sales Price

Network Services Sales Revenues

Oil Sales at All Time High

Liquid Fuels Sales Volume

• Record high liquid fuels production in 2012 (211 th tonnes) due to higher reliability (82.5%)

• Average sales price excluding price hedges 480.5 €/t (+15.1%, +62.9 €/t)

• Average price of heavy fuel oil, the reference product, 515.7 €/t

• 2013 sales hedged against price risk amounted to 126 th tonnes with an average price of 452 €/t

19

Average Liquid Fuels Sales PriceLiquid Fuels Sales Revenues

Retail Profitability – Higher Electricity Sales Margin

Retail Division’s Revenues

� +12.1 million euros due to increase in electricity sales margin

� +9.3 million euros revenue from the sale of telecommunication subsidiary

� +1.4 million euros due to increase in electricity sales volume

� –5.1 million euros due to higher fixed costs

20

Retail Division’s Opex Retail Division’s EBIT

Retail Division 2011 2012

Electricity Sales (GWh)

7,778 8,238

Sales in unregulatedmarket (GWh)

2,362 2,621

Sales in regulatedmarket (GWh)

5,416 5,617

8%

% of operating profit

(excl. impairment)

Retail

Distribution Network ’s Return on RAB 7.8%

Distribution Network’s Revenues

� +20.6 million euros due to higher network services sales margin

� +3.6 million euros due to increase in network service sales volume

� –3.2 million euros due to higher depreciation

� -2.1 million euros due to higher fixed costs

� -1.4 million euros due to higher repair expenses

21

Distribution Network’s Opex Distribution Network’s EBIT

DistributionNetwork

2011 2012

Electricity distributed (GWh)

6,419 6,604

Return on RAB 5.1% 7.8%

27%

Distribution network

% of operating profit

(excl. impairment)

Lower Margins Reducing GenerationProfitability

Electricity and Heat Generation Division’s Revenues

� +18.3 million euros due to lower discounts of CO2 emission allowances

� +9.3 million euros due to lower repair expenses

� +7.1 million euros due to lower environment protection provisions

� -63.3 million euros due to impairment of generating assets

� -27,9 million euros due to lower electricity sales margin

� -12.5 million euros due to higher depreciation

� -7.5 million euros due to lower electricity sales volume

22

Electricity and Heat Generation Division’s Opex*

Electricity and Heat Generation Division’s EBIT

Generation Division 2011 2012

Electricity sales (GWh) 11,138 10,635

Electricity generation(GWh) 10,428 9,377

Electricity purchase(GWh) 722 1,272

Heat sales (GWh) 1,177 1,031

40%

% of operating profit

(excl. impairment)

Generation

Lower non -recurring Revenues in FuelsDivision

Fuels Divison’s Revenues

� +7.9 million euros due to higher liquid fuels sales volume

� +5.2 million euros due to higher liquid fuels sales margin

� -16.2 million euros due to decrease of non-recurring revenues

� -15.1 million euros due to lower profitability of oil shale mining

� -5.0 million euros due to lower profitability of Technology Industry subsidiary

� -4.1 million euros due to higher depreciation

23

Fuels Division’s Opex Fuels Division’s EBIT

Fuels Division 2011 2012

Shale oil sales (th tonnes) 178 203

25%

% of operating profit

(excl. impairment)

Fuels

Operating Cash Flow Changes

Cash From Operations 14% Higher y-o-y

24

Group’s Liquidity Development in 2012

• 647 million euros of liquidity and unused loans available as of 31 December 2012

• Issue of 300 million euro notes in April 2012

• 150 million euros of added share capital on 10 July 2012

25

* (excl. deposits and other financial assets)

Liquidity

Net debt* / EBITDA**

*Net debt = debt obligations less cash and cash equivalents, units in money market funds, investments into fixed income bonds

** EBITDA – rolling 12 months

Electricity Fuel Oil

Closed positions as of 31 Dec 2012*CO2**

*Closed positions include forward contracts and exclude options

**CO2 necessary for generation is covered with free CO2 allowances in addition to closed positions

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• Credit ratings:

• Baa1 (Moody’s), negative outlook**

• BBB+ (S&P), stable outlook

• Total debts 732.8 million euros as of 31 December2012

• Long-term maturity profile with bond maturities in 2018 and 2020

• Sufficient liquidity buffer available

Long -term Maturity ProfileCommentsDebt Maturity

Financial Leverage *

* Financial leverage = net debt / (net debt+ equity)

27

300 m€, 4.25%,October 2018

300 m€, 4.5%,November 2020

** Outlook change from stable to negative in January 2013

Product View – Electricity *

CommentsElectricity Sales

28

• Average income per unit grew +0,4 €/MWh (average sales price decreased -1,0 €/MWh, profit from derivativesincreased +1,4 €/MWh (+14,0M€))

• Electricity production decreased -1,0 TWh and sales -0,7 TWh due to lowermarket prices.

Electricity Profitability (2012) Electricity sales and EBITDA split

10 707

10 021

41,3 41,6

25

30

35

40

45

50

9 0009 2009 4009 6009 800

10 00010 20010 40010 60010 800

2011 2012

€/MWhMWh

*Unaudited company data

44

373

Sales(EUR m)

Renewable

16

80

EBITDA(EUR m)

Oil shale and other

417

96

23 596 38

3771

22 65

0

100

200

300

400

500

Revenue Fuel Mining CO2 Electricity

bought

Environmentaltaxes

Laborcosts

Repairs Other EBITDA

mln euros

Product View – Shale oil

CommentsShale Oil Sales

29

• Average oil revenue increased by +40,6 €/t; sales without derivatives increased by 62,9 €/t and derivatives had a negative effect of -22,5 €/t. The growth was mainly caused by higher market prices.

Shale Oil Profitability (2012) Comments

• Oil variable profit increased by +25,9 €/t to 323 €/t in 2012. Variable costs grew mainly due to higher oil shale production costs, the effect of which was +8 €/t.

• Fixed costs grew +3,9 M euro mainly because of increased labor costs.

164

189374,5

415,1

350

360

370

380

390

400

410

420

150155160165170175180185190195

2011 2012

€/tth. tons

79

38

85 13

2 12

0

20

40

60

80

100

Revenue Mining Environmentaltaxes

Laborcosts

Repairs Other EBITDA

mln euros

Product View – Distribution Network

CommentsNetwork Sales

30

• Average network revenue per unit was 36,0 €/MWh (+4,5 €/MWh), due to higher network service tariffs.

Network Profitability (2012) Comments

• Variable costs grew +1,0 €/MWh due to an increase in Elering network service costs. Variable profit grew+3,6 €/MWh.

6 170

6 36531,4

36,0

26

28

30

32

34

36

38

40

6 050

6 100

6 150

6 200

6 250

6 300

6 350

6 400

2011 2012

€/MWhMWh

Network Profitability (2012)

229

89

76

12 2317 11

0

50

100

150

200

250

Revenue Networkservice

Networklosses

Laborcosts

Repairs Others EBITDA

mln euros

Trans-mission

Profit and Loss Statement

31

million euros 2012 2011 Change

Revenues 868.5 857.5 1.3%

Expenses (excl. depreciation) 590.0 592.4 -0.4%

EBITDA 278.4 265.1 5.0%

Depreciation (excl. impairment) 115.0 95.6 20.3%

Impairment of power generation assets 63.3 1.5 42.2x

EBIT 100.1 168.0 -40.4%

Net financial income (-expenses) -5.2 -3.2 61.0%

Income tax 17.8 14.7 21.6%

Net profit 76.9 149.2 -48.5%

Balance Sheet

32

million euros31 December

201231 December

2011Change y-o-ymillion euros

Total current assets incl. 395.5 253.5 142.0

Cash and cash equivalents 60.1 40.9 19.2

Deposits with maturity of more than 3 months 90.0 0.0 90.0

Trade receivables 112.2 102.2 10.0

Inventories 48.3 38.0 10.3

Other 84.9 72.4 12.5

Total non-current assets 2,101.9 1,779.8 322.1

Total assets 2,497.4 2,033.3 464.0

Total liabilities, incl. 1,088.2 796.6 291.5

Trade payables 110.6 94.3 16.3

Other 232.0 251.7 19.7

Borrowings 732.7 436.2 296.5

Current liabilities 1.4 1.5 0.1

Long-term liabilities 731.3 434.7 296.6

Provisions 12.9 14.4 1.5

Equity 1,409.2 1,236.7 172.5

Total liabilities and equity 2,497.4 2,033.3 464.0

Cash flows

33

million euros 2012 2011 Change

Net cash from operating activities 185.2 161.8 14.5%

Purchase of fixed assets -499.4 -417.4 19.6%

Net change in deposits with maturities greater than 3 months

-90.0 181.4 -149.6%

Contribution to the share capital 150.0

Recieved bank loans 27.6 138.1 -80.0%

Repayment of bank loans -26.5 -59.1 -55.2%

Proceeds from bonds issued 297.0

Dividend payment -65.2 -56.1 16.3%

Other adjustments 40.5 38.0 6.7%

Net cash flows 19.2 -13.3 -244.8%

Business Overview

Appendix 2

Distribution

� Improvement of the distribution network� €300m investment plan for 2011-14 regulatory period

on the back of 7.83% WACC on RAB� Reduction of network losses and provision of reliable

service to clients

Power Generation and Supply

� Refurbishment of existing generation portfolio to maintain compliance with more stringent regulation

� Investment into new generation capacity with lower CO2 footprint

� Maintaining significant market share in Baltic retail market to hedge generation portfolio

Shale Oil

� Expansion of shale oil production in Estonia with Enefit 280 plant expected to record substantial production in 2013

� Exploring shale oil upgrading into lighter products� Exploiting shale oil production expertise and proprietary

technology internationally

Eesti Energia Business Strategy

35

9.4 TWh of powergenerated in 2012

6.4 TWh of power distributed to clients in 2012

16m tonnesof oil shalesold in 2012

189 thousand tonnesof shale oil sold to clients in 2012

10 TWh ofpower sold in 2012

Deregulated Retail Sales in Baltics

Unregulated

Regulated

Shale Oil Production

Power Sales

Shale Oil Sales

Power and Heat Generation

12,9

1,9 1,4

Power Oil Externalclients

0

2

4

6

8

10

12

14

5,6

2,8

1,6

Opening in2013

Retailderegulated

Wholesalederegulated

0

2

4

6

88,8

0,5

Oil shale andother

Renewable0

2

4

6

8

10

Distribution network

Power Sales on Nord Pool Spot

Eesti Energia Business Model in Brief

36

Oil Shale Mining

Overview

� Mining licence provides exclusive right to mine oil shale within defined area� Exception to the auction process for new licences applied to companies with reserves depleting within five years� 2 underground and 1 opencast mine� Viru underground mine closing in 2013� 542 million tonnes of measured geological resource licensed to Eesti Energia as of 31 December 2012

Narva opencast mine

Mining — Business Overview

37

Estonia underground mine

Overview

� Narva oil plant currently has two Enefit 140 units, each of which has the installed capacity to process 140 tons of oil shale per hour

� New Enefit280 unit which will double production capacity started hot comissioning in H2´2012� The shale oil produced in Enefit140 comprises three fractions:

� shale heavy fuel oil (78% by mass)� shale gasoline (18-20% by mass)� shale light fuel oil (2-4% by mass)

� The key customer segments for current product (primarily heavy fuel oil) are bunkering and heating sectors

(1) Calorific value 46 MJ/Nm3

Enefit 140 and Enefit280 units

Shale Oil — Business Overview

38

Generation Portfolio (as at 31 December 2012)

Generation — Business Overview

39

Overview Map of Operations

� The Group is the largest distributor of electricity in Estonia, having distributed around 6.4 TWh of power in 2012

� Distribution area covers ca 42,400 km2, which contains c. 92% of Estonia’s population

� The network operates over 60,000 km of overhead and underground cables

� Average RAB of 2012 was €580m� Number of connections: ca 655,000� Allowed pre-tax return WACC 7.83% from

1 August 2011

Distribution — Business Overview

40

Imatra Elekter

Regulatory Framework Regulatory Building Blocks

� Regulated Asset Base (RAB), calculated at book value

– RAB1 is calculated as RAB0 plus capex less regulatory depreciation

� Allowed pre-tax return (WACC)– applied on RAB plus expected working capital

requirement (ca.5% of the expected revenue)� Regulatory depreciation of average 35 years (with

some exceptions) — different from actual accounting depreciation

� Allowed operating costs of the company are subject to annual cost escalation by CPI-1.5%, agreed with ECA for 2012-14

� Regulation is in place from 2005

CAPEX

RAB

Return oncapital

Return ofcapital

OPEX

DepreciationAllowed

pre-tax return

Allowed Revenue

Distribution — Regulatory Overview

41

Domestic Market International Markets

� Eesti Energia is dominant player in the domestic market

� The Group operates out of 14 customer service offices in Estonia and relies heavily on electronic channels (internet, call centre)

� 24% Baltic retail market share in 2012� Estonian full market opening in 2013, 408 000

agreements signed by the end of 2012 coveringmore than 58% of connection points in Estonia

Latvia � Operates through 100%-owned subsidiary SIA

Enefit� Started business in 2008.Lithuania� Operates through 100%-owned subsidiary UAB

Enefit� Started active business in 2010

Market Shares in Baltic Markets (2012)

Other, 32%

Eesti Energia; 74%

Estonia deregulated

Other, 80%

SIA Enefit20%

Latvia

Other, 92%

UAB Enefit

8%

Lithuania

Supply — Business Overview

42

Concession Area in Jordan� The Group has entered into a 44 year concession agreement in the Attarat region in Jordan

� Pre-development of 38,000 bbl/d shale oil industry ongoing and to last until at least 2016.

� Development of a project for constructing and operating 500 MW (gross) oil shale fired power station could reach financial close by the end of2013

– Tender results for EPC contract expected tobe received in Q2´13

� The Group may reduce its holding and engage additional capital to finance the projects beyond the pre-development phase.

� Total oil shale resource ca 3.5 billion tonnes (of which 0.9 bn tonnes „measured“ status and 2.6bn tonnes „inferred“ status before pre-technicalanalysis) based on 44 year concession agreement

� The Group has 65% ownership in the Jordan projects while YTL Power International Berhad controls another 30%

Development Projects in Jordan

43

Resource in USA, Utah� In March 2011, the Group acquired 100% of Enefit American Oil Co. (formerly known as Oil Shale Exploration Company)

� Pre-development of shale oil industry (including mines and processing facilities) ongoing and to last at least until 2016

� Oil shale resource in Utah, approximately 300 km east of Salt Lake City

� Access to 6.6 billion tonnes of oil shale (estimationprior to pre-technical analysis)

� Pre-development of shale oil industry with capacity of up to 50,000 bbl/d

Development Project in USA

44