ZSE Group

ZSE Group is a leading energy group in Slovakia. In 2002 it became a part of the German energy group E.ON. On 1st July 2007 ZSE established subsidiaries – for the operation of distribution system and for energy trading and sales. This split was based on the European Union Directive on common rules for the internal market in electricity that has been implemented into slovak legislation by Act No. 656/2004 Coll. on energy.

ZSE Group’s non-current assets are mainly represented by distribution network valued at historical costs (while in individual financial statements of ZSD they were revalued at fair value at unbundling in 2007). Current assets comprise mainly trade receivables related to supply and distribution of electric energy and natural gas as well as provision of complex energetic products and services for customers.

Equity is represented mainly by share capital, legal reserve fund and retained earnings. Non-current liabilities are mainly related to the Euro Bond emission in 2013 in nominal value of EUR 630 million. Current liabilities comprise mainly trade payables related to supply and distribution of electric energy and natural gas as well as provision of complex energetic products and services for customers.

Main source of ZSE Group’s revenue and EBITDA is the revenue from provision of distribution services in Western Slovakia and revenue from supply of electric energy and natural gas. Majority of the revenue is regulated by Regulatory Office for Network Industries (RONI).

EUR Thousand	2022	2021
Non-current assets	1,184,692	1,170,199
Current assets	490,717	255,372
Total assets	1,675,409	1,425,571
Equity	313,225	269,440
Non-current liabilities	539,845	818,995
Current liabilities	822,339	337,136
Total equity and liabilities	1,675,409	1,425,571
Revenue	1,990,790	1,341,136
EBIT	191,978	184,171
EBITDA	259,580	247,130
Income	2,053,379	1,372,201
Expenses	(1,878,944)	(1,205,375)
EBT	174,435	166,826
Net income	131,228	135,577
Total comprehensive income	132,294	139,607
Investments	105,652	111,231
Average number of employees	2,151	2,115

Financing strategy

Financing strategy of ZSE Group is aligned with criteria set by S&P rating agency in order to preserve the a- stand-alone credit profile derived from funds from operations (FFO) to debt.

Financial Leverage Policy

• The Company’s management and shareholders are committed to maintaining a strong investment grade credit rating and will manage the leverage in a manner consistent with this objective
• ZSE envisages that aside from the current bond financing no incremental debt will be required
• In future ZSE intends to remain free cash flow positive

Dividend Policy

• ZSE's shareholders will target a conservative dividend policy that supports the incremental growth for the Company while also retaining the target credit profile for a strong investment grade rating
• ZSE has a dividend policy which enables positive change of free cash flow 
• ZSE will keep the flexibility in its dividend policy to offset any negative situations that might affect the cash flow generation capability or its credit profile

Investment Policy

• The level of maintenance and expansionary investments required are expected to be funded from operating cash flows

Liquidity Policies

• ZSE's management will ensure sufficient access to liquidity in the form of cash and revolving credit facility to maintain a liquidity buffer for operational purposes including debt service requirements
• ZSE maintains a long-term committed credit facilities of €100.0 m to cover any working capital requirements and other operating requirements
• Central cash management at the Group level