CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA INVESTOR PRESENTATION August 2021 TABLE OF CONTENTS I . MACRO OUTLOOK II. FUNDING PROFILE AND STRATEGY III. SUSTAINABLE FINANCE IV. GREEN BOND 2 CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA I. MACRO OUTLOOK Community of Madrid key figures GDP pc 2019* Average annual Stock of companies 2020 35,917€ (Madrid) population growth(2011- 552,027 +2,1% i.a.(Madrid) 26,426€ (Spain) 2021) 3,404,428 + 1,2% i.a. (Spain) +0.5% (Madrid) * Last official data available +0.2%(Spain) Direct Foreign Investment 2020 18,287 Mill. € +24% i.a. (Madrid) 24,528 Mill. € + 1% i.a. (Spain) Unemployment rate R&D expenditure (1Q2021) (2019) 12.2% (Madrid) 1.7% over GDP (Madrid) 16.0% (Spain) 1.3% over GDP (Spain) GDP: 240.1 bn € ICTs Services (2020) Population: 6,7 mil Best ranked region in advanced digital services such as Cloud computing or Big data Source: Community of Madrid and INE Community of Madrid in Spain The national GDP amounted to 1,244.8 billion, of which the Community of Madrid is the region with the highest contribution, 19.3% (240.1 billion euros). In terms of population, the Community of Madrid accounts for 14.2% of the total population at the end of 2020, with a figure of 6,752,763 (out of a total of 47,394,223). Contribution by region to national GDP (2019) Population distribution by Autonomous Community (2020) Madrid 19,3% Catalonia 19,0% Andalusia 17,9% Andalusia 13,3% Catalonia 16,2% Madrid Valencia 9,3% 14,2% Valencia 10,6% Basque Country 6,0% Galicia 5,7% Galicia 5,2% Castile and Leon 5,0% Castile and Leon 4,8% Canary Islands 4,7% Canary Islands 3,8% Basque Country 4,6% Castile La Mancha 3,4% Castile - La Mancha 4,3% Aragon 3,1% Murcia 3,2% Balearic 2,7% Aragon 2,8% Murcia 2,6% Balearic 2,6% Asturias 1,9% Extremadura 2,2% Navarre 1,7% Asturias 2,1% Extremadura 1,7% Navarre 1,4% Cantabria 1,1% Cantabria 1,2% Rioja 0,7% Rioja 0,7% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 0,0% 5,0% 10,0% 15,0% 20,0% Source: Community of Madrid and INE Community of Madrid in Europe Madrid is the 5th largest regional economy in the EU, the 2nd largest in Southern Europe and the largest in Spain. Despite the great impact of Covid-19, Madrid has emerged stronger in S2 2020. Region Country GDP (million €) GDP PPP (millon €) EU - 27 13.963.897 13.963.897 Year-on-year GDP growth Ile-de-France (France) Francia 738.621 679.086 Lombardia Italia 398.779 400.627 10,0 Oberbayern Alemania 280.479 253.653 5,0 Rhône-Alpes Francia 242.843 223.269 0,0 Comunidad de Madrid España 240.130 257.621 -4.6 Cataluña España 236.814 254.064 -5,0 -4.9 Stuttgart Alemania 224.062 202.632 -10,0 -8,9 Düsseldorf Alemania 221.024 199.884 -15,0 Darmstadt Alemania 212.495 192.171 Lazio Italia 200.840 201.770 -20,0 Köln Alemania 197.110 178.258 -25,0 Eastern and Midland Irlanda 183.402 152.666 -30,0 Noord-Holland Países Bajos 177.733 151.965 III 2018 IV 2018 I 2019 II 2019 III 2019 IV 2019 I 2020 II 2020 III 2020 IV 2020 Provence-Alpes-Côte d'Azur Francia 170.734 156.973 Source: Instituto de Estadística de la C. de Madrid España UE-19 Comunidad de Madrid, INE y EUROSTAT Zuid-Holland Países Bajos 170.724 145.972 Source: Eurostat Economic Growth 2019 Solid growth and positive differentials for the region… 7 How we were at the end of 2020 The expected evolution of Madrid´s economy holds back due to the pandemic. Community of Madrid GDP falls a 10.3% in 2020 Spain´s GDP shows a more intense fall: -11% GDP Change (%) 2020 8 2020 quarterly growth Madrid´s economy keeps recovering in 4Q. GDP Big impact of the measures Quarterly change rate adopted to control the pandemic over the economy: quarterly contraction in Q2. (-24.2%) Intense reactivating in Q3: GDP´s upturn +25.5% against 2Q Madrid´s economy improves in his recovery in 4Q with a new growth (+4.4%) 9 2020 annual growth Recovering but still far from precovid activity levels. Pandemic outbreak and GDP lockdown (last 2 weeks of Interannual change rate March). GDP fall: -2.3% interannual in IQ 2020. Economic crash in 2Q: -26.4%. GDP partial overcome in 3Q, still in interannual setback: - 8,1%. In 4Q the recovery process continues, with an interannual fall reduction up to -4.6%. 10 Compared quarterly evolution GDP 2020 Quarterly change rate Falta gráfico 11 Sectorial analysis: Asymmetrical impact of the crisis Bigger contractions in 2020: Distributions services and hospitality (-22.2%) and construction (-14.0%). Services are recovering their activity more intensively in 3Q and mostly in 4Q, meanwhile construction steps back. 12 Different affectation of the third sector. Detail of the services branches interannual change (%) 10,0 0,5 0,0 -1,4 -2,0 -10,0 -5,7 -5,6 -2,7 -1,7 -8,3 -20,0 -9,9 -18,2 -18,2 -30,0 -7,0 -2,9 -40,0 -22,2 -50,0 -60,0 -55,0 -70,0 Hotel Business and Financial and Business Other services Distribution Services Services Source: Instituto de Estadística de la Comunidad de Madrid. I 2020 II 2020 III 2020 IV 2020 2020 Important reactivating of the whole sector in 2020 2nd half 2Q 2020 -26.0% 3Q 2020 -8.2% 4Q 2020 -4.4% 13 Community of Madrid: Key sectors Banking, insurance, and fintech Startup Ecosystem • 92.3% of the Spanish foreign investment in financial services in Q1-Q3 • Madrid is in the top 5 of the largest entrepreneurship centers in Europe (by 2020 (91.2% in 2019). number of startups). • 1 out of 3 Spanish finance and insurance professionals work in Madrid. • 7th in Europe in capital attaction (€ 509 M in 2019). Pharma & Biotech Logistics • 34% of Spanish Pharma sector turnover. • 75% of the logistics companies operating in Spain have their headquarters • 30% of Spanish Biotech sector turnover. in Madrid. Aeronautical & Aerospace • The largest logistic area in Spain (38 million sqm ). • 62% of Spanish Aeronautical sector turnover. Design and graphic arts • 95% of Spanish Aerospace sector turnover. • Second region by number of companies of this sector (more than 3,200 – • 40% New Space companies 20% of the total), only behind Catalonia (21%). Content & Video Game Industry • 7% of the manufacturing GVA. • 11% of the employment within the manufacturing sector. • 24% of the national industry. • 33% of Spanish Content and Video game sector turnover. Higher Education IT & Communications • Highest number of students in Spain (more than 320,000). • 6 public and 9 private Universities and some of the best business schools • 91.6% of Spanish Communications sector turnover. according to FT (IESE, IE). • 61.2% of Spanish IT sector turnover. • 97.8% of the Spanish foreign investment in IT&Communication in Q1- Sustainable mobility Q3 2020. • 37% of the electric vehicles registered in Spain in 2020 are in Madrid. • 53% of the trips in public transport are in sustainable vehicles. • Leader in carsharing and motosharing in Spain. 14 Labour Market Trends 2020 Social Security Affiliation (monthly average) Comunidad de Madrid Number of affiliates Interannual rates 2020 3,350,000 3,300,000 2.8 jan-feb 3,250,000 -2.2 mar-jun 3,200,000 -2.1 jul-sep 3,150,000 -2.1 oct- dec 3,100,000 Acum. 2020 (ene- -1.3 dec) 3,050,000 2019 2020 2021 Promemory: 3.4 3,000,000 Año 2019 jan feb mar apr may jun jul ago sep oct nov dec -4.0 -2.0 0.0 2.0 4.0 Historical information of the serie (since 2004): Max: 3.302.523 (dec-19) Min: 2.564.114 (jan-04) Source: MISSYM 15 Growth estimates of Community of Madrid for 2021 Upward pressures Considerable different forecasts Administration of the vaccines to a sufficent % of the population, during the first quarter of 2021. On average, projected growth for 2021 is 6.9% for C. Madrid, alongside this figure for Spain. ApProval of some efficient treatment against COVID-19. Tranfer of the first funds of the Recovery and GDP growht forecasts. Community of Madrid and Spain Resilience Facility and REACT EU. Real GDP Change rate 2021 Downward pressures 10.0 9.0 8.0 7.4 7.7 × New waves and restrictions 7.0 6.7 6.0 × Transformation of the liquidity constrains into threats 5.5 5.0 to the financial solvency of firms. 8.6 4.0 7.9 3.0 6.5 BBVA BBVA BBVA Research Research Research 2.0 4.7 2020 2021 2022 1.0 Andalucía -11,2 5,4 6,6 0.0 jan-21 feb-21 mar-21 dec-20 Aragón -9,7 5,6 6,4 Asturias -10,9 5,3 6,0 BBVA Research Hispalink CEPREDE FUNCAS Islas Baleares -17,5 10,3 11,0 Islas Canarias -15,0 8,1 9,6 2021 C. of Madrid Cantabria -9,6 5,3 6,0 2021 Spain Castilla y León -10,0 5,0 6,5 Castilla-la-Mancha -9,0 4,4 6,2 Cataluña -11,2 5,9 7,2 Extremadura -9,2 4,2 7,0 Galicia -9,7 5,7 6,4 Madrid -10,8 4,7 7,4 Murcia -10,0 5,5 6,6 Navarra -10,6 5,6 7,3 País Vasco -10,5 5,3 7,5 La Rioja -10,2 5,1 6,5 Valencia -10,7 5,9 6,6 España -11,0 5,5 7,0 16 Fiscal Evolution in 2020 Non financial income, December 19/18 y 20/19 (interanual) Regional budget deficit / budget surplus (million of Euros, % of GDP).