Correction: Decision made regarding the long-term promotion of the managers

Correction: Decision made regarding the long-term promotion of the managers of AB “Ignitis grupė” group of companies with share options programme

Announcement supplemented by the first five paragraphs and updated table of targets.

Taking into account the discussions in the Lithuania regarding the application of the management long-term incentive plan which is the first such kind to be applied in a state-controlled company, AB Ignitis Grupė, (hereinafter –the Company) announces the adjusted EBITDA minimum and maximum thresholds for the purposes of share entitlement to the management (table below) and supplements information on other components of the targets. The Company also answers the possible questions in advance.

Why is the adjusted EBITDA thresholds and the specification of other targets announced earlier than the Company has communicated so far, in the absence of updated strategic plan for 2021-2024?

After assessing the discussions in Lithuanian public sphere and coordination with capital market lawyers, the Company advances the disclosure of the thresholds for the year 2023. Adjusted EBITDA thresholds for the year 2024 will be announced as planned, together with an updated strategic plan. Thresholds for subsequent periods will also be announced together with updated strategic plans.

How the adjusted EBITDA thresholds for 2023 should be addressed in the context of long-term incentive plan?

Adjusted EBITDA thresholds for 2023 are not related to a profit forecast on which basis the investors should make their investment decisions and only relates to setting the entitlement of shares based on their performance results.

How it will be ensured that the Company will increase its profitability without affecting tariffs for consumers?

The target of green generation installed capacity will ensure that growth of the Company is achieved by directing investments to the sustainable generation expansion and not the tariff increase, which is set by the regulator. The Company will also present thresholds in detail to the regulator, who approves the tariffs for consumers and ensures that prices are not unreasonably increased.

Preparation of a CO₂ reduction plan and achievement of its objectives – why is the unfinished plan included in the long-term goals?

The Company is committed to reducing its greenhouse gas emissions and achieving net-zero emissions by 2050, thus making a significant contribution to mitigating climate change. We assume that the Company can have a significant impact on achieving the goals set out in the National Energy and Climate Action Plan of the Republic of Lithuania. For this reason, the preparation and implementation of a comprehensive carbon dioxide (CO₂) emissions management plan to the approved extent is one of the Company's strategic objectives.

The Company measures CO₂ emissions in accordance with international recommendations. In 2021, in order to comply the Company's goals and actions with the scientific recommendations, the Company intends to align the prepared CO₂ reduction plan and its interim targets with the requirements of the Science Based Targets Initiative (SBTi) by United Nations and other international organisations.

In 2024, not only the preparation and alignment of the plan will be evaluated, but also the implementation of its interim objectives in accordance with the envisaged ambition in line with international recommendations.

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AB “Ignitis grupė” (hereinafter – the Company) informs that on 4 December 2020 the Supervisory Board of the Company approved the long-term strategic goals and their indicators for 2020–2023, their achievement evaluation criteria and the maximum number of shares offered to the managers related to the share options programme (hereinafter – the Programme) for the long-term promotion of the managers of the Company’s group of companies (hereinafter – the Group companies; the Group).

The Programme approved in accordance with good remuneration and promotion practices of listed companies in order to increase loyalty, pursuit of long-term sustainable results, motivation to increase the share value growth. The resolve regarding the Programme was presented in the Prospectus of the Initial Public Offering (IPO) as well as in the AB “Ignitis grupė“ Share Allocation Rules (hereinafter – the Rules), which were approved on 16 September 2020 by the shareholder, published on the website of the Company ().

The Programme of long-term promotion of the managers of the Group with share options will apply to nine key managers of the Group: the Board members of the Company and the CEO of four companies of the Group (ESO, Ignitis, Ignitis Gamyba and Ignitis Renewables). The total maximum number of shares offered for the period of 2020–2023 is 9497.

The Programme determines the share allocation in 2024, after the long-term strategic goals (indicators) related to the strategic plan of the Company for 2020–2023 are achieved.

After the retention period for the share options, the managers will be able to choose implement their right to own shares of the Group. The exact number of shares will be determined (calculated) considering the achievement percentage of long-term strategic goals and their indicators for the period of 2020–2023:

The key managers entered into Option Agreements in 2020. The Company announced about the concluded Option Agreements in a separate notice ().

For more information please contact:

Artūras Ketlerius

Head of Public Relations at Ignitis Group