In 2019 , the year of transformation, Ignitis Group improved its financial indicators - Seite 2

Following the extensive review of energy industry practice and in order to be better comparable to the Group’s peers on international level, the Groups’s accounting principles were changed. Changes in accounting policies are related to the application of IFRS 15 and 9 (International Financial Reporting Standard): (1) offsetting the revenue from public service obligations (PSO) with the corresponding costs (previously PSO revenue and costs were accounted for separately). (2) distributing the recognition of the revenue for the connectivity of new customers over the useful service life of the infrastructure created (previously, in the natural gas segment and in the electricity segment, as of 1 October 2018, the revenue was recognized after fulfilment of the service obligation). (3) Netting the revenue with corresponding costs from trading activity of Group company Ignitis Polska sp.z.o.o.

For comparability purposes, the changes in accounting policies have been implemented retrospectively, i.e. by adjusting financial information for 2018. The changes implemented in accounting policies had no impact on the cash flows of the Group, however the revenue and net profit of 2018 decreased by EUR 164.2 million and EUR 13.6 million respectively. Detailed information about the changes implemented in the accounting policies and their effect on the separate articles in the statement of financial position and profit and loss and comprehensive income is presented in Note 3 to the Interim Financial Statements of the Company.

Key financial indicators of Ignitis Group for 2019:

•  The Group’s revenue amounted to EUR 1 095.3 million, which is 0.5% more if compared to EUR 1.090 million during 2018;
•  Operating expenses amounted to EUR 1 009.3 million, which is 9.1% (or more than EUR 100 million) less, compared to EUR 1 110.1 million during 2018;
•  The Group‘s EBITDA increased by 43.7% and totaled EUR 209.5 million. The Group’s adjusted EBITDA increased by 21.7% and totaled EUR 259 million, compared to EUR 212.8 million during 2018. EBITDA rate grew in all segments. Main reasons of this change were inceased number of new customers to the distribution network and continuous investments to distribution network.