Financial results
ZSE Group

ZSE Group is a leading energy group in Slovakia.

The 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.

On April 8, 2022, E.ON SE (hereinafter referred to as "E.ON") and the Slovak Republic, represented by the Ministry of Economy of the Slovak Republic (hereinafter referred to as the "State"), concluded a Contract for Future Consolidation, on the basis of which the consolidation of ZSE and Východoslovenská energetika Holding a.s. (hereinafter also "VSEH"), in which they are direct or indirect sole shareholders, took place by the end of 2023. Based on the Contract, a contribution of 100% of VSEH shares to ZSE was made, whereby the company VSEH became a subsidiary of ZSE, and subsequently the sale of VSEH subsidiaries to ZSE.

The ZSE Group currently consists of the parent company, which is Západoslovenská energetika, a.s., and its following 100% subsidiaries:

• Západoslovenská distribučná, a.s. (ZSD),
• ZSE Energia, a.s. (ZSE Energia),
• ZSE Elektrárne, s.r.o. (ZSE Elektrárne),
• Východoslovenská energetika Holding a.s.
• Východoslovenská energetika a.s. (VSE),
• Východoslovenská distribučná, a.s. (VSD),
• ZSE Energy Solutions, s.r.o.,
• ZSE MVE, s. r. o.,
• ZSE Business Services, s. r. o.,
• ZSE Energetické služby, s.r.o.,
• VSE Solutions s.r.o.,
• VSE Call centrum, s.r.o.
• VSE Ekoenergia, s.r.o.
• EKOTERM, s.r.o.

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) and non-current assets of the former VSEH group valued at fair value in 2023. Current assets mainly comprise trade receivables related to the supply and distribution of electric energy and natural gas as well as provision of complex energetic products and services for customers.

Equity is mainly represented by share capital, legal reserve fund and retained earnings. Non-current liabilities are mainly related to the Euro Bond emission in 2018 in nominal value of EUR 315 million and long-term loans. 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 and eastern Slovakia and revenue from supply of electric energy and natural gas. Majority of the revenue is regulated by Regulatory Office for Network Industries (RONI).

Key Figures of ZSE Group as of December 31

EUR Thousand	2024	2023*
Non-current assets	2,543,829	2,426,345
Current assets	632,138	775,080
Total assets	3,175,967	3,201,425
Equity	1,348,679	1,285,619
Non-current liabilities	1,133,588	1,105,845
Current liabilities	693,700	809,961
Total equity and liabilities	3,175,967	3,201,425
Revenue	2,246,318	1,857,696
EBIT	246,746	345,300
EBITDA	397,862	423,664
Income	2,540,489	2,372,964
Expenses	(2,312,956)	(2,042,307)
EBT form continuing activities	227,533	330,657
Net income from continuing operations	149,614	248,469
Net income from discontinuing operations	32,420	4,629
Net income total	182,034	253,098
Total comprehensive income	170,437	254,862
Investments	213,685	154,427
Average number of employees	3,840	2,316

* On 23 November 2023, ZSE became the parent company of Východoslovenská energetika Holding a.s. and its subsidiaries – in particular Východoslovenská energetika a.s. and Východoslovenská distribučná, a.s.

The consolidated figures of the profit and loss, investments and average number of employees of the ZSE Group for 2023 therefore reflect only a proportional part of the results of these companies.

Financing strategy

The 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
• In future ZSE intends to remain free cash flow positive

Dividend Policy

• ZSE's shareholders aim for 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
• The new shareholder agreement limits the amount of dividends paid through the maximum debt ratio (so-called leverage ratio)
• ZSE has a dividend policy which enables positive change of free cash flow 
• ZSE retains the flexibility in its dividend policy to offset any negative circumstances 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 to cover any working capital requirements and other operating requirements
• Central cash management at the Group level