CEZ : Annual Financial Report 2023 in

I. Activity Report

CEZ Group 2023 Annual Financial Report

CEZ Group

2023 Annual Financial Report

I. Activity Report

Strong

in the Flow

of Change

We have the determination, the team,

a clear vision, and above all the energy to fulfill the goals defined in the strategic VISION 2030. Our invested energy and patient work are producing results. We safely supply energy to our customers, develop new technologies, build new energy sources, invest in the development of new products and services, and introduce innovations. The implemented measures contribute to the sustainable growth of CEZ Group's value. We look to the future with optimism, which is a basic prerequisite for ensuring Clean Energy of Tomorrow.

safely economically with a vision proactively reliably professionally without emissions confidently self-sufficiently friendly with ambition

30.4

Our nuclear power plants generated a total of 30.4 TWh of emission-free electricity in 2023. Historically, this is the fourth best result, despite the fact that a number

of modernization projects and measures were implemented in 2023 to ensure long-term safe operation.

43,413,000,000

CEZ Group invested more than CZK 43 billion in Czechia in 2023. The largest part - CZK 17 billion - went into the distribution segment, especially into the renewal and development of the distribution grid. Rapidly growing investments in renewable energy sources are also contributing to the fundamental transformation of the

145Czech energy industry.

were therefore distributed among more than

In 2023, a record-high dividend of CZK 145 per 30,552 share was paid to shareholders. CZK 78 billion

150,000 shareholders of ČEZ. Of that amount, the Czech state as majority owner received more than CZK 54 billion.

At the end of 2023, CEZ Group employed 30,552 people. Employment in CEZ Group companies has long been one of the most preferred ways of starting a career among university students, as evidenced by the first place in the prestigious TOP Employers competition, defended for the

fifth time in a row.

10+14

Ten nuclear reactors are currently in operation in Czechia. Six energy reactors with a total installed capacity of 4,290 MW have been reliably producing emission-free energy for decades in the Dukovany and Temelín power plants, another 4 reactors with a total capacity of 10 MW operate in the Řež Research Center and at the Faculty of Nuclear Sciences and Physical Engineering of the Czech Technical University in Prague. CEZ Group has the ambition to build 4 new large nuclear units and is simultaneously working on the preparation of up to 10 small modular nuclear reactors (SMRs).

30%

The share of generation from coal is already down to only 30% of the total generation in CEZ Group. Back in the early 1990s, this share was at the level of 80%. Generation from coal and gas fell

by 13% year-on-year, to 17.5 TWh. At the same time, we reduce the consumption of potable water for generation in ČEZ's conventional power plants. In 2023, ČEZ's power plants consumed

211,000 m3 of water, while ten years before that it was over 600,000 m3. And we are constantly looking

for other ways to save water.

5,443,679

In 2023, drivers purchased 5,443,679 kWh of certified green electricity at ČEZ stations, marking a 25% increase compared to 2022. ČEZ commissioned 145 public charging stands for electric cars. Every fourth stand put into operation last year was ultra-fast, with a capacity of at least 150 kW, allowing to top up the energy needed for a 150 km drive within 10 minutes.

51,422

ČEZ Distribuce connected 51,422 photovoltaic power plants with a total installed capacity of 609 MW to the network in 2023. The total number of PV connected to the ČEZ Distribuce network rose to a total of 104,699 at the end of 2023, with an installed capacity of 1.9 GW. By 2030, Czechia anticipates the construction of new photovoltaic power plants to accelerate substantially, with a capacity of over 10 GW to be commissioned. CEZ Group intends to build new renewable energy sources with

a capacity of 6 GW as part of the ambition of the strategic VISION 2030 - Clean Energy of Tomorrow, the majority of which will be photovoltaic power plants in Czechia.

126,000,000,000

In 2023, CEZ Group paid more than CZK 126 billion to the Czech state in dividends, income taxes, and levies on revenues from generation. Of this, dividends accounted for over CZK 54 billion, while CZK 45 billion was paid as the windfall tax and levy on revenues above price caps from generation, and CZK 27 billion was paid as part of ordinary income tax.

CEZ Group

CEZ Group Profile

CEZ Group is a stable energy group, one of the largest economic entities in Czechia and Central Europe, contributing significantly to the development of the region's energy sector in compliance with the European Union's sustainability targets. Also in 2023, CEZ Group proved that it remains a safe and reliable harbor for its customers and was able to ensure maximum energy supply for Czechia and its neighboring countries.

In its activities, CEZ Group emphasizes the implementation of global climate goals, decarbonization, and the environment in general. It focuses on developing nuclear and renewable energy and innovation in the energy sector to provide reliable and sustainable services to its customers. The core value arises from emission-free generation and the distribution and sale of electricity and heat. Other important activities are commodity trading, distribution and sale of natural gas, mining, and especially the provision of complex energy and technological services.

CEZ Group employs nearly 31,000 people and supplies power and modern energy solutions to millions of customers in Czechia, Germany, Poland, and Slovakia. It also operates in particular in Hungary, France, Italy, Austria, and the Netherlands.

Share of CEZ Group's Main Activities in EBITDA 2023

	%
GENERATION - Trading	8
GENERATION - Nuclear Sources	39
GENERATION - Renewable Sources	9
GENERATION - Emission Sources	17
MINING	10
DISTRIBUTION	14
SALES	4
Total	100

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CEZ Group / CEZ Group Profile

Vision and Corporate Social Responsibility

The long-term vision of CEZ Group is to bring innovations for addressing energy needs and contribute to higher quality of life. The VISION 2030-Clean Energy of Tomorrow strategy is aimed at a dynamic transformation of the generation portfolio to low-emission and achieving full climate neutrality by 2040. An integral part is the commitment to fundamentally limit the generation of heat and electricity from coal by 2030. The massive development of nuclear power and the construction of new renewable energy facilities are fundamental to the zero-emission vision and the priority of energy self-sufficiency. CEZ Group continues to invest in the development of electromobility and in the field of batteries, including the extraction of critical raw materials for their production. The overall goal is to ensure safe and competitive energy for customers.

In distribution and sales, the core objective is to provide the most advantageous energy solutions and the best customer experience on the market. Therefore, CEZ Group invests significantly in modernizing and digitizing its distribution grids, aims to be the most reliable supplier of energy and modern comprehensive energy services, and intends to be a leader in the energy transformation and decarbonization of industry in Czechia and Central Europe.

CEZ Group's business activities are governed by strict ethical standards that include responsible behavior toward employees, society, and the environment. It adheres to the principles of sustainable development, and its entire strategy is based on ESG (Environmental, Social, Governance) pillars. The principles of sustainability are thus an integral part of the management and direction of the entire Company, and CEZ Group emphasizes their fulfillment with its suppliers as well.

CEZ Group supports energy efficiency and effectiveness, promotes new technologies and innovations, and focuses on investments into modern technology, science, and research. The corporate culture emphasizes safety, internal efficiency in order to promote the growth of CEZ Group's value, and creating a safe and stimulating environment for its employees' career development based on the principle of equal opportunities

for everyone. One of its priorities is close cooperation with communities and the most customer-friendly approach.

A comprehensive goal for CEZ Group is to remain among the top 20% in ESG rankings.

The largest shareholder of the parent company ČEZ is the Czech Republic, with a nearly 70% stake in the Company's stated capital. ČEZ shares are traded on the Prague and Warsaw stock exchanges and included in the PX and WIG-CEE exchange indices. The market capitalization of ČEZ as at December 31, 2023, amounted to CZK 515 billion and during its existence the Company has paid CZK 446 billion to its shareholders in dividends.

CEZ Group has long been one of the largest taxpayers in Czechia and one of the main pillars of the Czech economy. Since the establishment of the joint-stock company in 1992, ČEZ has paid more than a trillion Czech crowns to the Czech state in dividends, taxes, levies, donations, and payments for emission allowances.

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CEZ Group

Table of Contents

Statutory Declaration by the Persons Responsible			4. CEZ Group Activities - Other Areas
for CEZ Group's 2023 Annual Financial Report		5	Safety and Security		116
			Environment		119
1. CEZ Group Introduction and Highlights			Research, Development, and Innovation	123
Introduction by the Chairman of the Board of Directors			Donorship		130
and Chief Executive Officer		9	Human Resources		132
Selected Indicators		11	Legal and Other Proceedings	138
Shares		16	Developments in Sectoral Regulation and Legislation	148
Selected Events		19	Changes in Ownership Interests	158
Developments in Energy Markets		21
Strategy		24	5. Related Parties Report
Approach to the Environment		26	Report on Relations between the Controlling Entity
			and the Controlled Entity and between the Controlled
2. Corporate Governance			Entity and Entities Controlled by the Same Controlling
ČEZ, a. s. Governance Bodies		30	Entity for the Accounting Period of January 1, 2023
Persons with Executive Authority of ČEZ, a. s.		54	to December 31, 2023		164
Supplementary Information on Persons			Annex 1 to the Related Parties Report - Diagram
with Executive Authority of ČEZ, a. s.		56	of the Structure of Relationships from January 1, 2023
Concern Management		57	to December 31, 2023	under the back flap of the cover
Risk Management		58	Annex 2 to the Related Parties Report - Overview
Internal Audit and Compliance		61	of Mutual Agreements		169
Corporate Governance Compliance		63
Summary Report pursuant to Section 118(6)			6. Financial Section
of the Capital Market Undertakings Act		66	Consolidated Financial Statements of CEZ Group
Rights Attached to Shares		69	Prepared in Accordance with IFRS Accounting
			Standards as Adopted by European Union as of
3. CEZ Group Activities - Business			December 31, 2023		219
and Management Segments			Financial Statements of ČEZ, a. s.,
CEZ Group Operations		72	Prepared in Accordance with IFRS Accounting
Business Impact of the Conflict in Ukraine		73	Standards as Adopted by European Union as of
GENERATION Segment		74	December 31, 2023		301
MINING Segment		82	Selected Data on the Performance of CEZ Group's
DISTRIBUTION Segment		84	Most Significant Companies in Accordance with IFRS	362
SALES Segment		86	Expenses for Services Provided by Companies
List of Sources and Balance of Generation,			Performing Accounting Audits in CEZ Group	364
Sales, and Distribution		92
CEZ Group Financial Performance	103	7. Other Information
CEZ Group Capital Expenditure	112	Dates of Publishing the Financial Results
			and Financial Reports in 2024	365
This document, created in pdf format (Portable Document Format), is an			Basic Organization Chart of ČEZ as at March 1, 2024	366
unofficial version of the ČEZ, a. s. 2023 Annual Financial Report. The content		Definitions and Calculations of Indicators
of the document corresponds to the official ČEZ, a. s. 2023 Annual Financial		Unspecified in IFRS		368
Report prepared in accordance with the applicable regulation governing the
uniform electronic reporting format (ESEF) in XHTML format. Compared to			Glossary of Selected Terms and Abbreviations	369
the official Annual Financial Report, it is supplemented with graphic elements,	Contacts		372
photographs, and dividing graphic pages.

In the event of differences in content, the official version of the Annual Financial Report shall always take precedence over this document. The official ČEZ, a. s. 2023 Annual Financial Report, prepared in accordance with the applicable ESEF regulation and Czech legislation, is available at: www.cez.cz/vfz-2023.

Identification of ČEZ, a. s.

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CEZ Group

Statutory Declaration

by the Persons Responsible for CEZ Group's 2023 Annual Financial Report

To the best of our knowledge, the Financial Statements and the Consolidated Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position, and results of operations of the issuer and the entities included in the consolidation taken as a whole, and the Consolidated Annual Financial Report under the law governing accounting gives a true and fair view of the development and performance of the issuer and the position of the issuer and the entities included in the consolidation as a whole, including a description of the principal risks and uncertainties that they face.

In Prague, on March 20, 2024

Daniel Beneš

Chairman of the Board of Directors, ČEZ, a. s.

Martin Novák

Member of the Board of Directors, ČEZ, a. s.

This Consolidated Annual Financial Report has been audited by an independent auditor, Deloitte Audit s.r.o. The relevant independent auditor's reports are set out on pages 295-300 and 358-361.

5

safely

In 2023, we received three bids for the construction

of a new nuclear power plant in Dukovany - from the French company EDF, the South Korean KHNP, and the US-Canadian Westinghouse. After their evaluation, the government will decide on the winning supplier, and the EPC contract will be signed with them within a few months. Our ambition is

to safely develop nuclear generation in small and large reactors and to put the new nuclear power plant in Dukovany into operation by 2036 at the latest.