Thomas Bucher, CFO & Member of the Executive Board Alpiq Holding AG, 23.06.2017

Future opportunities of a former traditional electricity company

Agenda

1. Financial results 2016 2. Transformation of the Group 3. Energy sector of tomorrow 4. Questions and answers

2 2 Vontobel Investor Forum Schweizer Stromversorger

Alpiq Holding Ltd., 2017-06-23

Demanding environment 1 International factors result in low wholesale prices

3

Low commodity and CO2 prices

Subsidies for new renewable energies

Moderate economic growth

Production overcapacities

30

35

40

45

50

55

60

65

70

Jan.2012 Jul.2012 Jan.2013 Jul.2013 Jan.2014 Jul.2014 Jan.2015 Jul.2015

EUR

/MW

h

Cal-16 CH Base Cal-16 CH Peak

Hedging period: Jan 2012–Dec 2014

Cal-16: Avg. obtained hedging prices of EUR 47/MWh

Pressure on Swiss hydropower and nuclear power plants

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

Demanding environment 2 Regulatory framework conditions distort the Swiss market

Pressure on electricity producers without end customers and distribution grid 4 Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

2016 Key Financial Figures

5

Results of operations before exceptional items (EI) • EBITDA of CHF 395 million; down CHF 85 million on previous year • Cash flow from operating activities of CHF 94 million; cash-relevant effect in 2016 from the

change of valuation method regarding entitlements from the Federal decommissioning and waste disposal funds of CHF -151 million in the previous year

• Net debt at CHF 856 million; decrease of CHF 443 million compared to the end of 2015, due to disposals

Net debt EBITDA Net revenue Net income Operating cash flow

-9%

2016

6,078

FX effect

57

2015

6,715

-18%

2015 FX effect

10

2016

395 480

24

46

2015

115

FX effect

>100%

2016

94

461

2015 2016

-80%

856

1,299

31 Dec 2016 31 Dec 2015

-34%

CH

F m

illio

n

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

Commerce & Trading • Swiss and international optimisation up on the previous year • Eastern and South-Eastern Europe down on the previous year • No contribution from AVAG after disposal in July 2016

EBITDA development of the business divisions

6

Generation • Lower wholesale prices hedged at lower level • Unscheduled downtime at Leibstadt nuclear power plant • Cost management yielding positive effects • International production achieved a profit

392 316

3 -79

5052

9-11

101 95

FX e

ffec

ts

EBIT

DA

2015

be

fore

EI

-7

EBIT

DA

2016

be

fore

EI

Bus

ines

s de

velo

pmen

t

1

CH

F m

illio

n CH

F m

illio

n CH

F m

illio

n

Energy Services • Increased order intake and order backlog • Higher revenue compared to previous year • Market remains competitive • Targeted acquisitions in growth areas

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

Transformation of the Group Structural measures being implemented

Opening up to 49 % of hydropower portfolio • Is not completed • Criteria for completion:

- Price - Contractual conditions - Transaction security

Streamlining the portfolio and cost management • Disposal of AVAG, AEK, REC • Sale of Swissgrid

completed • Cost management

continued

Creating structures for future growth • Pooling profitable

business divisions • Open up growth areas to

investors • Alpiq retains control

7 Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

Digital transformation isn't a threat or a risk for energy sector, but rather a leverage and a chance to enter in a new world!

Source: Handelsblatt Jahrestagung Energiewirtschaft 2016

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger 8

The energy sector is undergoing a transformation

Implications ▪ Value pools will

shift from traditional to new businesses

▪ Innovative energy players can drive new businesses – need to stay ahead of the game, in finding future winning models

▪ Opportunities emerge for new partnerships, with adjacent or completely different industry sectors

Phase of market evolution

Drivers

Decentralization Decarbonization

Digitization Sector compounding

▪ Electrification across sectors

▪ Advancements in battery technology

▪ Emission regulations

▪ Changed customer behavior

▪ New market entrants and business models

▪ Improved data processing capabilities

▪ Public commitment to low- carbon society

▪ Political push towards energy efficiency and "green" power

▪ Subsidies for re-newable generation technology

▪ Political push towards liberalization

▪ Political shaping and shifting of balances between incumbent and new industries

▪ Power sector as a key driver for GHG emission needs to contribute significantly in reaching reduction targets

▪ Energy efficiency targets directly affect B2B and B2C end-users who require clean energy and smart solutions to reduce energy demand

▪ Advanced analytics define future industry leaders

▪ Central relevance of digital and social channels for customer interaction

▪ Unlocking of big potential in internal processes through digital

▪ New organizational and leadership challenges

Core elements

▪ Blurring sector boundaries due to increasing electrification

▪ Sectors that are especially affected include electric power utilities, mobility providers, and heating companies

▪ Volatile generation (wind, solar) will require system int-egration, via remote asset management: curtailment of load or generation, DRM/DSM

▪ Distributed gene-ration at prosumer sites will lead to new business models for B2B and B2C segments

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

9

The old energy world At a glance

Clearly defined market roles Unilateral energy flows Only a few competitors

Power Plants

Transmission & Distribution Network

Households

Industrials

Commercial Buildings

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

10

The new Energy World At a glance

Power Plants Wind Farm with Energy Storages

Large Buildings with PV

Utility / Community PV

Homes with PV and

Storages

E-Mobility

Industrial Areals with

Micro-Ecosystems Homes with

PV and Storages

Wind Farm with Cogeneration

Variety of diversified market roles Two-way energy and data flows Many different competitors

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

11

The new Energy World Disrupting Market Development

The old Utility Business

Model Renewables

Energy Sources

Disrupting value chains

„Merging“ markets

Trends and customer

expectation

New „outside“ competitors

New Technologies

(PV, Batteries, EV, Smart Home etc.)

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

12

The new Energy World 5 main areas of changes

Source: Capgemini Consulting Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

13

The new Energy World Digital Economy in a nutshell

Digital Swordfish

- Big, fast, rarely get eaten -

Digital Piranhas

- Small but aggressive for prey -

Blue Whale - Huge, slow but persevering-

Digital White Sharks

- At the top of the food chain -

• (Very few) digital economy leaders • Wide, diverse product portfolio • Coupling the traditional sectors with their digital expertise

• (Few) big industry shaping players • Deep, vertical specific product • Already near peak growth

• (Many) product specific players • Huge, product centric competition • Peak growth not yet reached

• (Few) traditional economy leaders • Heavy footprint in single sector • just launch the digital transformation • Gigantic assets

Source: Alpiq / Statista Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

14

Transformation of the Group Investors gain access to an attractive portfolio

Digital & Commerce New opportunities thanks to digitalisation

Industrial Engineering Competent partner for industrial customers in Europe

Building Technology & Design Focus on smart buildings and mobility

15 Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

Transformation of the Group Alpiq is creating structures for future growth

16

Digital & Commerce

Alpiq Holding AG

Industrial Engineering

Building Technology & Design

100% >51% >51% >51%

Strategic Investors

Strategic Investors

Strategic Investors

Financial Investors

Generation Switzerland

Digital & Commerce

Industrial Engineering

Alpiq Holding Ltd., 2017-06-23 Vontobel Investor Forum Schweizer Stromversorger

You ask. We answer.