PNE : Non-financial Report 2023

Annual Report PNE AG 2023

HIGH PERFORMANCE IN ANY WEATHER

CLEAN ENERGIES

We are a leading Clean Energy Solutions Provider to markets and industries, regionally, nationally and internationally. Our core competencies are the development and operation of renewable energy projects. We also drive the storage of renewable energies and power-to-X technologies. In this way, we are consistently pursuing the goal of a secure, sustainable and profitable energy supply generated 100 percent from renewables.

THE PNE GROUP AT A GLANCE

PNE Group key figures

in million euro

1.1. - 31.12.

2023

1.1. - 31.12.

1.1. - 31.12.

2022 2021

Total aggregate output Revenues

781.8

MW/MWp completed, under construction or sold in 2023

695

GWh of green electricity produced in 2023

369.8

MW own operations

~523,000

TONNES OF CO2 saved in 2023

> 2,900

MW order volume in operational management

19,101

MW/MWp in the pipeline of wind energy onshore and PV

Earnings before interest, taxes, depreciation and amortization (EBITDA)

Operating profit (EBIT) Result before taxes (EBT) Net income

Basic earnings per share (euro) Average number of shares (million)

in million euro

267.8121.5

39.9

5.7

-8.6

-9.6

-0.13

76.3

31.12.2023

243.3 252.0

126.2 117.7

35.4 32.7

6.2 9.3

23.9 3.0

14.9 25.1

0.20 0.33

76.3 76.3

31.12.2022

31.12.2020

Equity as at 31.12.

Equity ratio as at 31.12. (%) Balance sheet total as at 31.12.

208.1

18.9 1,101.7

232.2 221.8

25.2 26.8

920.3 827.0

CONTENTS

HIGH PERFORMANCE

IN ANY WEATHER 4

The PNE Group at a glance 02

Foreword of the Board of Management 04

Report of the Supervisory Board 10

High performance in any weather 14

Capital market information 23

NON-FINANCIAL REPORT 25

On this non-financial report 26

Business model 27

ESG strategy & management 27

Governance 30

Employees 33

Environment 35

Value chain 39

Social responsibility 40

EU taxonomy 42

GRI Index 48

COMBINED MANAGEMENT AND GROUP

MANAGEMENT REPORT 54

Fundamentals of the Group 55

Economic report 57

Sales and marketing 80

Development and innovation 81

Employees 81

Intangible assets 81

Supplementary report 82

Report on opportunities and risks 82

Forecast report 91

Other disclosures 92

CONSOLIDATED FINANCIAL

STATEMENTS (IFRS) 96

Consolidated statement of

comprehensive income 97 Consolidated statement of

financial position 98

Consolidated cash flow statement 100 Consolidated statement of changes

in equity 101

Development of Group Assets 102

Consolidated segment reporting 106 List of the companies included in the consolidated financial statements

and listing of shareholdings 107 Notes to the Consolidated

Financial Statements 123

COMPLETION OF PNE AG (HGB) 177

Statement of comprehensive income 178

Statement of financial position 179

Cash flow statement 181

Equity statement 182

Assets analysis 183

Statement of liabilities 184

FOREWORD OF THE BOARD OF MANAGEMENT

Dear Shareholders

We have delivered, and we are moving forward. With the "Scale up" strategy, we have initiated the further development of PNE AG into a Clean Energy Solutions Provider in 2017. The aim was to broaden the range of business segments, both in terms of technology and of geography. Among other things, we have opened up new markets, integrated photovoltaics into project development and built up know-how in the hydrogen sector. But above all, we have established our own portfolio of wind farms. The goals we set ourselves for 2023 over the course of seven years were ambitious. Now we can see that we have achieved or, in some cases, significantly exceeded all those goals. We are very proud of that. For example, we have come in significantly ahead of our target of having wind farms with an output of 500 megawatts (MW) in operation or under construction by the end of 2023. At the end of the year, wind farms with 651 MW were in operation or under construction. We are also well on track to achieving our "Scale up 2.0" strategy expansion goals. An indication of this: Despite realizations and sales, we were able to increase our project pipeline to a new record level of 19,101 MW/MWp.

EBITDA guidance met despite challenging market environment

We were also able to achieve a very pleasing financial result in fiscal 2023. For example, we met the EBITDA guidance of euros 30 to 40 million at 39.9 million euros in the upper range. We have also achieved the goal of keeping the project pipeline at least at the level of 2022. We even clearly exceeded this.

At the end of 2023, we reported liquidity of around euro 90 million in the Group.

We are very satisfied with this result, especially in the context of the challenging market environ-ment. Projects that we originally aimed to complete or sell in 2023 have been moved into 2024. Delayed transport permits and delivery difficulties for manufacturers, both regarding machinery

Chief Executive Officer

Markus Lesser

Chief Finance Officer

Jörg Klowat

Harald Wilbert Board Member

and materials, were the causes of the delays. The effects of the war in Ukraine, the Middle East con-flict and the aftermath of the coronavirus pandemic also led to higher costs. This was partly offset by a temporary increase in the price of electricity, even if electricity prices did not reach the level of the previous years.

All business areas contributed positively to the result: national and international project develop-ment, electricity generation, and the service segment with operations management and our other service products.

Well on track with "Scale up 2.0"

After achieving the goals of the "Scale up" strategy, we are now working hard to also reach the goals of the "Scale up 2.0" strategy development. As a reminder: By 2027, we want to significantly increase our own portfolio of wind farms and PV plants. We want to manage 1,500 MW/MWp in operation or under construction. We also plan to increase the project pipeline to over 20 GW/GWp by the end of 2027. In the "services" segment, we want to become one of the relevant "Operational Management Companies" in Europe. This means that we want to manage wind and PV projects with a total capacity of more than 3,500 MW/MWp. As our figures show, we are well on our way to this.

We are not afraid of the challenges we face, whether it be the geopolitical situation or well-known issues such as the duration of permits, delayed transport permits or problems with suppliers.

On the contrary, they are what drives us forward. So far, we have been able to handle this well because our actions have been forward-looking. This is facilitated by our resilient business model, in which we can plan projects for construction and operation at an early stage through our own project development. For example, we ordered material such as cables or substations early on or secured favourable conditions from KfW. As a company, we will continue to evolve and, of course, change so that we can continue to act quickly and efficiently and respond to market demands. We will work on our structure and culture, and we will continually review our market and technology orientation. Changes and innovations are moving us forward. We have made big plans and have achieved significant progress. For example, the PNE Group is now certified according to ISO 9001. Further certifications for occupational health and safety and environmental protection are in progress and the digitization of PNE has intensified. Preparations are also underway for KRITIScertification, because the PNE Group is a critical infrastructure operator of energy farms with extensive services. These investments will amount to a figure in the middle range of single-digit euro millions.

PNE shares included in TecDAX

Unfortunately, PNE shares did not perform as well in the course of 2023 as in the previous year. In our view, one of the reasons for this is the announcement by our main shareholder that they were no longer interested in selling. As a result, the price had fallen significantly as the shareholders who had speculated on the sale left. After that, the price of our share stabilized again.

On the other hand, it is gratifying that PNE shares were included in TecDax in July 2023 and are now one of the 30 largest German technology companies. This proves that the shareholders recognize our strategic development to become a Clean Energy Solutions Provider. Our company is gaining further attention in the capital market through its inclusion in the TecDAX.

"For me, a successful time is coming to an end. We achieved excellent EBITDA and have successfully completed the first part of

'Scale up' together. Thank you for Your loyalty."

Jörg Klowat

Chief Finance Officer

Expansion of wind farms in operation or construction above target

The declared aim of the Company's strategy is to expand its portfolio of internally operated projects. After the completion and acquisition of further wind farms, the nominal capacity of the wind farms operated by the Company in 2023 increased from 318.9 MW to 369.8 MW. Further wind farms (around 281.3 MW in total) are under construction in Germany and France and could be taken over into our own operations. We have thus significantly exceeded our interim target of having 500 MW in operation or under construction by the end of 2023 and are very optimistic about achieving the further expansion to 1,500 MW/MWp in construction or operation by the end of 2027 in accordance with "Scale up 2.0".

Project pipeline continues to reach record growth

At the end 2023, the companies of the PNE Group were working on onshore wind farm projects with 9,177 MW (prior year: 7,587 MW) of nominal output, which are in different phases of the multi-year development process. This expansion compared with the previous year was achieved despite the ongoing realisation and sale of projects.

The project pipeline of photovoltaic projects was again significantly expanded in the reporting period. The pipeline includes photovoltaic projects with a nominal capacity of 7,424 MWp (prior year: 4,296 MWp).

In addition, we want to further optimise the performance of our wind farms and those of our customers using artificial intelligence. That's why, in 2023, we acquired the majority stake in the British technology company Bitbloom Ltd. and thus gained access to this technology. We use Artifical Intelligence (AI) for performance analysis and monitoring.

"Our summary for the 2023 financial year: We have delivered, and we are moving forward. Because we have achieved or even exceeded the goals of our corporate strategy. Further growth has been successfully initiated with 'Scale up 2.0'."

Markus Lesser

Chief Executive Officer

The project pipeline was thus further expanded and increased to a record level of 19,101 MW/MWp in total. This is the basis for the further development of the PNE Group, especially in times of scarce areas for the expansion of wind and photovoltaic projects.

PV project sales in international markets

In Italy and especially in Romania, PNE achieved operational success in 2023 on international markets. At the end of the year, the PNE Group in Italy sold a package with a total of 12 PV projects and a total output of 114 MWp to an infrastructure fund. With its experienced team, PNE will now seek to further expand its development of photovoltaics operations in Italy as well as investing in its own portfolio in the medium term.

Two sales of PV projects were recorded in Romania. In the middle of the year, PNE sold a package of five projects to the French energy group TotalEnergies. Together, the PV systems have an output of 208 MWp and, as agri-PV systems, allow the further agricultural use of the site. In the south of the country, a local company also bought a PV project with an output of 61.5 MWp at the end of the year.

We are still in negotiations regarding the sale of our US business.

More assets under management in the service business

The further expansion of our service business also further increases the share of steady earnings in our company. This is why the growth of the "services" segment is a declared component of the "Scale up 2.0" strategy. The PNE Group is broadly positioned in the market with its services. We were able to further expand the national and international business of operations manage-ment and technical services in 2023. Overall, the nominal capacity of the wind farms we manage rose to more than 2,900 MW. More than 1,000 plants are now in operational management.

In addition, we are extremely successful with our service in the brokerage of short- and long-term power purchase agreements (PPAs). In the meantime, we are supporting more than 100 projects. In 2023 alone, we completed PPAs for 39 wind and PV project companies with a total output of over 337 megawatts.

Energy-related environment promotes renewable energies

Against the background of the shift away from fossil fuels and the desire for a secure energy supply, the renewable energy economy is developing further. The pressure is on, driving further reductions in emissions and compliance with climate targets. As a Clean Energy Solutions Provider, the PNE Group offers solutions with its services and products and can serve the desire for clean energy.

In Germany and Europe, the general conditions for the expansion of renewable energies continue to be positive. The Federal Government has set targets for the expansion of renewable energies. It is planned to designate two percent of the country's land area for the use of onshore wind energy.

With the Minister of Economic Affairs in Turkey and the Federal President in Vietnam

Once again, we were part of two business delegations that accompanied the travels of important politicians. In November we were in Turkey together with the German Federal Minister for Economic Affairs and Climate Protection, Dr. Robert Habeck. As a company, PNE is active in numerous projects here.

At the beginning of this year, by the invitation followed from the German Federal President, Dr. Frank Walter Steinmeier, to join the business delegation for a trip to Vietnam. Both invitations show how important PNE is now in Berlin and how much we are valued as a player in the energy transition. The Vietnam trip was all the more important because PNE has applied with an offshore project with up to 2,000 MW of potential total output.

"I am looking forward to the new task at the PNE Group. The Group is very well positioned, has motivated employees and a clear goal that we will tackle together."

Harald Wilbert Board Member

The capacities for onshore wind energy are to be significantly increased to at least 115 GW by 2030, and for offshore wind energy to 30 GW. The expansion target for photovoltaics by 2030 was set at 215 GWp. By 2030, 80 percent of the electricity consumed in Germany should be covered by renewable energies. Climate neutrality is to be achieved by 2045.

Since 2022, the EU has faced the challenge of putting the consequences of the war in Ukraine, including the disappearance of Russian energy supplies and the resulting aggravation of the energy price crisis, and thus, in particular, energy security at the centre of the Green Deal. The European Parliament adopted the amended version of the Renewable Energy Directive (RED III) in September 2023. It is characterised above all by different objectives compared to RED II. For example, the share of renewables in the EU's final energy consumption is to be increased to 42.5 percent by 2030, with Member States trying to reach an increase to 45 percent.

EBITDA increased

Based on the successful operating performance, the Group recorded total aggregate output of euro 267.8 million (prior year: euro 243.3 million), earnings before interest, taxes, depreci-ation and amortisation (EBITDA) of euro 39.9 million (prior year: euro 35.4 million), operating profit (EBIT) of euro 5.7 million (prior year: euro 6.2 million) and undiluted earnings per share of euro -0.13 (prior year: euro 0.20) in the reporting period.

The results are strongly influenced by the establishment of PNE's own wind farm portfolio. As profits from projects owned by the Company are eliminated at Group level, the consolidated results in the Group do not show a complete picture of the performance of the enterprise.

With the establishment of our wind farm portfolio in own operations, "hidden reserves" were created that are not immediately recognisable. As a result of the investments in PNE's own projects, pre-tax profits of euro 208.4 million were eliminated at Group level by the end of 2023 in total, of which euro 31.4 million in the reporting period (prior year: euro 42.5 million). EBITDA adjusted for the "hidden reserves" created in the financial year thus amounted to euro 71.4 million (prior year: euro 77.9 million).

Dividend proposed

For the 2023 fiscal year, the Board of Management and the Supervisory Board propose that a dividend of euro 0.04 as well as a special dividend of euro 0.04 for each no-par value share entitled to a dividend in the 2023 fiscal year be distributed from PNE AG's retained earnings totalling euro 273,129,231.11. The remaining retained earnings shall be carried forward to a new account.

Change in Board of Management

After many years of continuity, a change is currently taking place in the Board of Management. While Markus Lesser was reappointed by the Supervisory Board as Chairman of the Board of Man-agement of PNE AG in August 2023 until the end of 2027, CFO Jörg Klowat decided to leave the Board of Management at his own request at the end of March 2024 and to remain at the company's disposal for a transitional period. This allows him to finish ongoing projects. Harald Wilbert was found as the successor. He has been a member of the Board of Management without a special de-partment since October 2023. As of April 1, 2024, he will take over the function of Chief Financial Officer of Jörg Klowat. Harald Wilbert is very familiar with the energy industry and the renewable energy sector. Most recently, he was a member of the Board of BayWa r.e. AG as well as its CFO.

Non-financial report

PNE AG submitted its first separate non-financial report for the 2023 financial year. This describes our developments and progress in the area of sustainability. In addition to environmental aspects, this also includes our social commitment and responsible corporate governance. Sustainability is a major part of PNE's business model and is firmly anchored in the enterprise. As a Clean Energy Solutions Provider, we promote the use of renewable energies. With this sustainable business model, we make an important contribution to climate protection. At the same time, we are commit-ted to responsible corporate governance along our entire value chain. In our day-to-day business, we take into account not only economic interests but also environmental, social and societal concerns. The non-financial report is part of this annual report.

Our overall business benefits from the synergies arising from the three segments "project develop-ment", "electricity generation" and "service products".

In fiscal 2024, as in previous years, we will have further upfront expenditure in the low single-digit million range for the strategic expansion of the business model. We expect Group EBITDA of euro 40 to 50 million in respect of our guidance for the 2024 fiscal year.

We have a sound strategy with clear goals, which we will be committed to implementing in the coming years. In doing so, we create added value for our shareholders and protect the climate. We invite you to accompany us on this journey.

Positive outlook

PNE is making good progress with the implementation of the further development of the "Scale up 2.0" strategy. The growth course has been set and the defined targets are achievable. We are motivat-ed to meet the challenges that lie along our path. The necessary changes in the organization have started, and we are thus making rapid progress. Our foundation for the future is in place. The project pipeline has reached another record high.

In the coming years, we will continuously expand our own portfolio and increasingly become an independent power producer (IPP). This is based on our long-standing core business, which is the project development.

Maintain your confidence in us!

Kind regards

The Board of Management

Markus Lesser	Jörg Klowat	Harald Wilbert
Chief Executive Officer	Chief Finance Officer	Board Member

REPORT OF THE SUPERVISORY BOARD

Dear Shareholders

Fiscal year 2023 was successful for PNE AG. The Company has successfully met the geopoli-tical challenges posed by the war in Ukraine and the conflict in the Middle East, as well as more market-specific challenges such as delays in transport permits or delivery difficulties on the part of manufacturers. The positive Group performance (EBITDA) resulting from the business performance is particularly pleasing for this reason. The inclusion in the TecDAX in July should also be emphasized. This demonstrates once again that the further development from wind power project developer to clean energy solutions provider is being recognized by shareholders. Operationally, PNE AG has developed further through the continuous realisation of wind farm projects, the expansion of its own operation of wind farms, the increased development of photo-voltaic projects in several countries as well as the expansion of the range of services relating to clean energy projects. Important operational successes were the sale of wind and photovoltaic projects as well as the completion of various wind farms both in Germany and abroad. Internally, the Board of Management has further developed the new structures in order to rapidly advance the expansion of the business model.

The Board of Management with CEO Markus Lesser, CFO Jörg Klowat and since October 2023 Harald Wilbert has also continued to work successfully on the implementation of the Group's "Scale up 2.0" strategy. The strategic orientation provides for the significant expansion of the portfolio of internally operated wind farms and PV plants, the increased development of photo-voltaic projects in Spain, Germany and Romania, the expansion of the service sector and the development of power-to-X solutions. Internal measures to increase efficiency and to enhance cooperation were also initiated. These cover, among other things the implementation of manage-ment training for executives, the further standardisation of processes, the introduction of new process control systems and the communication of a company-wide image of success, which defines guidelines for internal and external corporate conduct.

from left: Per Hornung Pedersen (Chairman), Dr. Susanna Zapreva, Christoph Oppenauer (Deputy Chairman), Marc van't Noordende, Roberta Benedetti, Marcel Egger, Alberto Donzelli

10