FINANCIAL DETAILS 02 4QFY2020 PRESENTATION TO ANALYSTS 26TH FEBRUARY 2021 Unaudited Consolidated Result for the 4th Quarter FY2020 Ended 31st December 2020 1 CONTENT OVERVIEW 01 KEY HIGHLIGHTS 02 STRATEGY 03 FINANCIAL DETAILS 04 OUTLOOK 05 APPENDIX 2 KEY HIGHLIGHTS FY2020 HIGHLIGHTS & FOCUS AREAS FY2020 Highlights Focus Areas Reimagining TNB's (RT) aspiration: To be the 01 02 leading provider of sustainable energy solutions in FY2020 performance continue to RP2 extension approved with Malaysia and internationally. improve favourable terms • Continue to pursue domestic & International • Amid uncertainties during 2020, the regulators target of 8.3GW RE generation capacity by 2025. • Signs of recovery continued into 4QFY2020, have approved an extension of RP2, showing For International business : with electricity demand contraction effectiveness of the IBR mechanism. i. RACo management has been established and narrowing from -12.9% Q-o-Q during • RP2 extension base tariff remained at lockdown period to -1.1% Q-o-Q. 39.45sen/kwh and WACC of 7.3%, indicating currently building up investment pipeline. • Improvement in collection from Apr'20 to stable returns for the regulated business RACo is expected to contribute 2GW of RE Dec’20 with better collection efficiency rate entities. capacity by 2025. from 87.0% to 97.0% for the period. • Capex & Opex allowed are higher at RM7.3bil ii. Finalising definitive JV agreements with • Our subsidiaries’ (SESB and manufacturing (RP2:RM6.6bil) and RM6.3bil (RP2: RM6.1bil) Sunseap to explore RE business in Singapore business) performance momentum respectively compared to the annual average & Vietnam. continues into 4QFY’20. for RP2. • Post formation, TPGSB to focus on operational • Higher Allowance for Doubtful Debt (ADD) was excellence, plant turnaround and assets & also approved at RM200mil for FY2021 (FY2020: RM94.3mil). services expansion. 03 Sustainability Commitment 04 • TNB is the primary driver of the nation's Energy TNB Power Generation Sdn Bhd Rewarding shareholders’ trust (TPGSB) gaining traction Transition, with a pivotal role in enabling sustainable energy ecosystem across the value Tangible positives on the formation of TPGSB • Dividend per share of 80 sen includes : chain particularly through RE generation portfolio includes : o Interim - 22 sen and our investments in the Grid infrastructure. • 20% EBIT growth from improved plants o Final -18sen availability. o Special - 40 sen • Equivalent Plant Availability Factor improved Regulatory Period 3 (2022-2024) to 87.4% from 83.4% after the formation of • Translate to a dividend yield of 7.7% • Submitted RP3 proposal to the Energy TPGSB. st (Share price : RM10.42, 31 Dec’20) th • 25% improvement in Productivity (RM/staff). Commission (EC) on 26 February 2021. 3 KEY HIGHLIGHTS FINANCIAL PERFORMANCE OVERVIEW Our Revenue Cap entities insulated via IBR framework. However, Y-o-Y earnings remain impacted due to economic slowdown REVENUE EBITDA PROFIT AFTER TAX RM mil RM mil RM mil (2.3%) (13.7%) (18.6%) (12.2%) (4.0%) 18,395.7 17,981.2 ICPT ICPT 1,917.9 50,939.7 43,976.0 (3,034.5) 20.0% 4,817.0 14,148.8 13,580.4 4,445.0 4,229.8 (5.8%) 3,616.4 4,473.9 4,216.0 1,001.9 1,201.8 49,021.8 47,010.5 40.3% 40.8% 36.1% 40.9% 27.8% 30.9% Reported Reported Reported Reported FY'19 FY'20 FY'19 FY'20 Reported Reported Reported Reported FY'19 withoutFY'20 without 3QFY'20 4QFY'20 FY'19 FY'20 without without 3QFY'20 4QFY'20 FY'19 FY'20 MFRS 16 MFRS 16 MFRS 16 MFRS 16 EBITDA Margin o Revenue impacted by : Reported EBITDA margin sustained at 40.9% due to lower operating Reported PAT FY’20 includes: o ICPT adjustment of RM3.0bil due to expenses by 20.6% recorded in FY’20 as the Group adapts to the lower fuel prices as compared to prevailing operational requirement during Covid-19 pandemic. o Negative MFRS16 impact of RM613.4mil RM1.9bil surcharge position in FY’19 o Lower finance income of RM317.7mil o Lower sales of electricity as unit sold decrease by 5.1% Y-o-Y at 117,003.6 o TNB’s sales discount of RM250.0mil out of RM2.7bil GWh (123,252.0 GWh – FY’19), announced by the government. The balance was funded by amounting to RM1.6bil the Government, therefore cushioning the impact on allowance for doubtful debt. For FY’20, we provided o TNB’s sales discount of RM250.0mil amid RM325.9mil. 4 the pandemic KEY HIGHLIGHTS NORMALISED EBITDA & PAT Y-o-Y normalised EBITDA & PAT impacted in FY’20 mainly from the movement control order 1 EBITDA FY'19 FY'20 Lower Normalised EBITDA and PAT in FY’20 mainly due to: Components RM mil RM mil Reported EBITDA 18,395.7 17,981.2 RM mil Impairment 334.0 51.6 Allowance for doubtful debt (include approved ADD of RM94.3mil) 231.6 TNB sales discount & Retail revenue loss 54.2 - 273.0 Lower finance income 207.4 contribution for Covid-19 Lower contribution from generation business 319.8 MFRS16 impact (4,246.9) (4,400.8) Normalised EBITDA 14,482.8 13,905.0 1 Total 813.0 2 PAT FY'19 FY'20 MFRS 16 impact for FY’2020 includes deferred tax. Please refer Appendix 3 Components RM mil RM mil for details. Reported PAT 4,445.0 3,616.4 PAT recovery continued into 4QFY’20 334.0 51.6 Impairment 77.8% 1400 TNB sales discount & (8.2%) - 273.0 1200RM mil contribution for Covid-19 1000 Forex Translation (200.6) (71.6) 800 600 1,202 2 1,002 MFRS16 impact 372.0 613.4 400 737 676 1 200 Normalised PAT 4,950.4 4,482.8 0 1Q 2Q 3Q 4Q 5 KEY HIGHLIGHTS INTERNATIONAL BUSINESS Vortex Solar UK Limited EM: 80% Tenaga Wind Ventures (TWV) EM: 76% Shuaibah EM: 80% EBITDA (mil) EBITDA (mil) 49.89 EBITDA (mil) 991.20 39.07 30.27 39.05 17.11 22.07 962.20 14.38 18.36 265.03 257.27 GBP USD GBP USD SAR USD FY'19 FY'20 FY'19 FY'20 FY'19 FY'20 • Vortex's revenue is mainly insulated by subsidy scheme with some • EBITDA YoY has improved due to higher revenue contribution • Slight decrease of EBITDA YoY is due to portion exposed to merchant spot prices. The latter have been resulted from higher subsidy tariff. unplanned outages resulting from boiler issues significantly affected due to a large drop in electricity demand during • Lower operation expenditure by 5% against budget in Dec 2020 is that was not budgeted for FY'20. the lockdown period due to cost savings in certain operations expenditure. • Nevertheless, Shuaibah maintains solid • Nevertheless, improved EBITDA margin of 2% YoY recorded against • Technical upgrade of the turbine control system resulted in higher financial performance with higher EBITDA budget is supported by operational cost efficiency. efficiency in wind energy capture. Coupled with high wind margin against industry average by 32%. • Portfolio availability remains consistent at above 95% with higher availability taking advantage of the winter season, generation • Accumulated cash distribution as at Dec 20 is generation YoY. performance improved by 15%. c.USD38.59mil (120% of our cost of • A total of GBP2.92mil cash distribution was declared in FY’20, bringing • Additional cash received of GBP11.65mil is in the distribution investment). the total cash distribution to GBP19.75mil. account, bringing the total cash distribution to GBP42.29mil. Outlook for Vortex: Outlook for TWV: Outlook for Shuaibah: • Higher PPA prices has been successfully locked between Oct’20 to • Wind generated energy remains competitive on the back of • Power demand in Saudi remains steady Mar’21, averaging at 5% higher than earlier market projection. This supportive regulatory framework. TWV revenue is insulated from throughout FY’20. Evidently, Shuaibah’s cushioned the downside impact of the seasonality factors. low demand due to the FiT subsidy scheme and early lock-in PPA revenue remains strong due to the Power and • Power prices is expected to be trending upward once the UK resolves prices. Water Purchase Agreements (PWPA) driven by its negotiations on interconnection issues with EU. • TWV will continue to expand its portfolio to support the long term the consistent demand for water and strategy of TNB’s international business. electricity. • Saudi’s balance sheet remains robust despite Outlook for UK Renewable Energy (RE) Platforms: being affected by the depressed crude prices • With UK being one of the first countries to rollout mass vaccination, demand is set to pickup in Q2 2021. and travel bans. • In line with TNB’s International Business Strategy, TNB will leverage on existing UK assets and market experience to build up a sizeable renewable • Shuaibah’s performance is expected to remain energy portfolio through acquisition of operating assets and development of greenfield projects. Both RE assets will be structured under the positive with a steady dividend distribution to Renewable Asset Co (RACo) platform with a higher capacity target through acquisitions of operational RE assets leveraging on existing assets, shareholders. capabilities and experience. The formation of RACo is expected to be completed in Q2 2021. CEO of RACo UK has been appointed. • During the Covid-19 lockdown, the utilities remained relevant as an essential service. In particular, RE remained resilient as its generation market share continued to grow despite falling energy demand. With a healthy pipeline in place, RACo is expected to contribute 2GW of RE capacity by 2025. Note : EM : YTD EBITDA Margin 6 KEY HIGHLIGHTS INTERNATIONAL BUSINESS GMR Energy Limited (GEL) EM: 34% GAMA Enerji A.S.