Annual Report Encevo S.A. We embrace energy transition GRI 102-16 Our vision We envision Encevo as leading and sustainable energy player in the Greater Region. In the rapidly changing energy landscape, we will ensure a secure access and competitive supply of energy, and actively shape the transition to a sustainable energy sector by embracing technology, deploying innovative solutions and partnering with local communities. Encevo people are empowered and strive for excellence. We mobilise all our forces to bring the energy of tomorrow to our customers. Encevo S.A. Registered as a société anonyme (public limited company) under Luxembourg law with a capital of EUR 90,962,900 (31.12.2020). Registered office: Esch-sur-Alzette Luxembourg Trade and Companies’ Register B11723. Annual General Meeting of 11th May 2021. Index 6 Interview: Claude Seywert & Marco Hoffmann 10 Group Structure 12 Management Reflections 20 Key Figures: Activity at a Glance 27 Encevo Sustainability Context and Management Approach 32 Stakeholder Engagement 41 Business Integrity: General Compliance 49 Indirect and Direct Economic Impacts 54 Product Impact 59 Employee Well-being 70 Resource Efficiency 74 About the Report 80 Governance Details 82 Management Report 92 Consolidated Annual Accounts 134 Extract of the Annual Accounts of Encevo S.A. Claude Seywert CEO Encevo S.A. Chairman of the Executive Committee Marco Hoffmann Chairman of the Board of Directors GRI 102-14 Staying the course towards a sustainable energy transition In a year largely marked by the crisis caused by the pandemic, Encevo Group maintained its operational excellence. The group and its entities stayed the course towards a sustainable energy transition. How would you rate the Encevo rather difficult. On the other hand, the Group’s 2020 performance? energy world evolved substantially in the past year. European and national Claude Seywert: On the operational ambitions regarding the reduction of level, we fared well through this CO2 emissions were raised and the COVID-19 crisis. In our grid activities, perspectives for industry and economic we were directly impacted by the growth in general are not the same as pandemic as construction projects before the crisis. The combination of were halted for a certain period, which both had an effect on long-term energy is why Creos was not able to complete pricing and prospects for generation its full investment programme. But they assets. moved forward with their main projects and even launched a new project; the 2020 was also the year of a strategy 380 kV line. Enovos Services saw a review for the group. What was the similar lockdown effect in its subsidiaries, outcome of this? but they recovered well and the group further strengthened their activity Marco Hoffmann: The review confirmed, through new acquisitions. Enovos among other things, that technical felt the impact as industrial and SME services are an important vehicle to clients’ energy consumption decreased. drive the energy transition forward; On the operational side, the development an overarching goal of the group’s and implementation of new digital and strategy. Three years ago, the group enhanced customer processes continued. decided to venture into technical Throughout the group, our people services. This area is well established showed flexibility and commitment and and helps to drive the energy transition adapted quickly to the new situation. forward along the whole value chain, in Their efforts allowed us to efficiently the Greater Region, but with a special continue operations in all subsidiaries focus on Luxembourg. and I really would like to thank them for their efforts. Claude Seywert: As a regional player, our group develops products that are Marco Hoffmann: The crisis had its adapted to our local market and there- impact on our group results. While our fore, can really advance the energy operational result was satisfactory, transition via relevant and customised our net result indicated a clear impact. solutions. We intend to follow through On the one hand, the COVID-19 crisis’ with this strategy throughout our whole short-term effects included extreme group by giving every entity the means fluctuations in energy prices, which to drive the energy transition forward in made acting appropriately on markets their respective domains. All the pieces 7 GRI 102-14 of this puzzle should come together in the end. We Marco Hoffmann: Creos Luxembourg updated the want to enhance the whole system and motivate 2040 scenario report regarding projections other actors to continue in the same direction. for future energy and infrastructure needs. Guaranteeing security of supply remains a main What are the achievements regarding the energy and challenging objective over the next decade. transition? A growing population, development of the economy, new use cases for electricity, distributed Claude Seywert: Enovos extended its photovoltaic production, newly upcoming flexibility needs are asset base in Luxembourg by connecting install- all elements that will necessitate the expansion of ations it won in its first public tender. It is currently existing grid capacities, be it inside the country or working on realising the nearly 20 MW won in the on interconnections. The 380 project, focused on second tender. This will double the group’s PV replacing and upgrading the existing interconnector capacities in Luxembourg. In the Netherlands, the from Germany to Bofferdange and Bertrange, newly built PV assets of Enovos Green Power per- is therefore a piece of the puzzle for securing formed above expectations. Enovos Renewables energy supply and moving us towards the energy GmbH built up a promising renewable energy project transition. pipeline in Germany, where our focus will also lie on PV. In parallel, Enovos also continued developing The energy transition also includes decarbonisation. its wind power capacities, both in Germany and in Creos is currently looking into possibilities for Luxembourg, via its joint venture Soler. adapting the gas grids to decarbonised gases. Creos Deutschland is driving a pilot project using The group saw an important increase in eco- parts of existing gas grids to transport and mobility activities and recent developments distribute pure hydrogen between Lorraine and will support this even more. Creos Luxembourg Saarland. Such initiatives enable the group to ac- expanded the Chargy network and added new, quire the necessary knowledge to be able to drive faster chargers, the first SuperChargy connections. sustainable development by maintaining existing Enovos launched its roaming offer within enodrive, infrastructures. where customers can now charge their electric vehicle on 180,000 charging points throughout Which challenges and opportunities do you see Europe. Finally, we noted a strong demand for arising in the near future? private charging stations in our technical services subsidiaries and with local craftsmen collaborators. Claude Seywert: Concerning infrastructure, the 380 project was mentioned, but in a more general Marco Hoffmann: New possibilities will arise from way, Creos is upgrading its electricity grids and smart meters. Now that the rollout is complete, contemplating the adaption of gas grids to de- new innovative products can be offered to customers carbonised gases, projects that require important through the group’s different entities. This includes investments. On the other hand, starting in 2021, energy efficiency services, which are another grid regulation will mean that grid revenues are driver of the energy transition and consequently further reduced, these investments, therefore, part of the group’s strategy. will be made with decreasing cash flow from grid activities. Are there other key evolutions? On the supply side, Enovos is motivated to continue to increase the group’s renewable energy pro- Claude Seywert: Our subsidiaries continued their duction in the Greater Region but especially also digitisation roadmap, completing projects that in Luxembourg. Here, the challenge will be to allow them to become even more customer-centric. significantly increase photovoltaic capacity in Particularly on the Enovos side, and despite difficult bigger installations while the surface of industrial market conditions, we retained market share, new rooftops is finite. offers were designed, and good customer relations Enovos Services, through its subsidiaries, will were maintained. Despite these intrinsically positive further develop decentralised energy solutions developments, a strategic review of our sales and help their clients to manage energy “behind activities concluded with the decision to initiate the meter”. Together with its partners, Enovos an exit from the German B2B market. Services continues to promote and drive the 8 GRI 102-14 efficient use of energy, which is a key ele- for our customers. There is a big evolution ment of the sustainable energy transition. going on in the energy sector and, of course, this affects the energy behaviour Marco Hoffmann: The global climate crisis of our customers. We will be prepared and calls for new and ambitious initiatives from will support our customers in their wishes our group as well. We will redouble our and needs. I am confident that we are up efforts in energy efficiency, renewable to the task. energy and decarbonisation. This is a significant challenge, but all our companies Marco Hoffmann: Leaving the COVID-19 are fully motivated to contribute their ex- crisis behind us for good, hopefully sooner pertise to meet it. than later. I am delighted that the group will bring in all its expertise, effort and Your perspective moving forward? motivation to successfully implement the necessary projects and measures to Claude Seywert: We expect that we will realise key climate targets that support a overcome the COVID-19 crisis in 2021. We sustainable energy transition. will profit from the lessons learned dur- ing that crisis. We will assess what we can integrate further into our organisation; remote working and home offices, for ex- ample. Habits will change for us, but also WE WANT TO ADVANCE THE ENERGY TRANSITION 9 GROUP STRUCTURE Enovos Services Luxembourg S.A. 100% Enovos 100% Luxembourg S.A.