Gas Plus

Investor Presentation • Aug 5, 2016

Analyst Presentation 1H 2016 Financial Results August 5th, 2016

www.gasplus.it

INDEX

• HIGHLIGHTS
• FINANCIAL RESULTS

MARKET SCENARIO

Market

HIGHLIGHTS

Fin. Overview

• The hydrocarbon price scenario that affected the energy sector, had a negative impact on the Group economic results that, anyway, showed a good level of endurance vs. the industry average
• The BU E&P, besides the price scenario, was also negatively influenced by the sudden stop of one of its main concession, not operated by the Group, and by the complex authorization iter affecting the new development projects
• International E&P relinquished the high risk reward Midia Deep project
• Commercial activity has benefited of the wholesale market exit and showed an increasing marginality with high historical results, despite the warm climate conditions
• Positive and stable profitability from Network & Transportation BU. Increased distributed volumes in 1H 2016 due to the acquisition of the Manerbio and Bassano Bresciano distribution concessions;
• Slight increase of NFP due to the investment restart and above the mentioned acquisition

1H 2016 – Group P&L
Group (M€)	1H16	1H15	% Change
Total Revenues	45.5	62.3	-27.0%
Operating Costs	36.3	41.5	-12.4%
EBITDA	9.2	20.9	-56.0%
EBIT	(0.6)	11.9	-105.2%
EBT	(5.1)	9.3	-155.2-%
Disc. operations	-	(0.8)	n.m.
Net Result	(3.5)	5.8	-159.4%
EPS (€)	(0.08)	0.13	-159.4%

The data shown in the table do not take into consideration, at the EBITDA, EBIT and EBT level, the results of the S&S business unit which is included within the specific item "discontinued operations"

1H 16 Financial results

• Total Revenues decreased due to the lower hydrocarbon price scenario. 1H15 figure included also € 5.3 M of nonrecurring items related to E&P activity
• EBITDA reduction due to the decrease of E&P margin, that anyway remained positive
• EBIT recorded a negative result also because of the E&P asset depreciation of Midia Deep concession

The Group recorded a Net Result of - € 3.5 M vs. € 5.8 M of 1H15

FINANCIAL RESULTS Fin. Overview

5 The data shown above do not take into consideration the results of the S&S business unit unless where specified as "discontinued operations" item

FINANCIAL RESULTS

Fin. Overview

June 30, 2016 – Group Balance Sheet

	June 30, 2016	December 31, 2015	% Change
Group (M€)
Inventories	4.0	4.2	-4.6%
Receivables	11.0	16.8	-34.5%
Payables	(18.7)	(21.8)	-14.4%
Other working Credits/Debits	0.2	2.7	-91.8%
Non current Assets	448.4	447.1	0,3%
Taxes, Abandonment, Severance and Other provision	(184.3)	(184.3)	0,0%
Net invested capital	260.6	264.7	-1.6%
Net Financial Debt	45.6	41.1	10,8%
of which long term	66.3	69.6	-27,2%
of which short term	-20.7	-28.5	-4,8%
Equity	215.0	223.6	-3,8%
Total Sources	260.6	264.7	-1,6%

• Additional decrease of the low working capital vs. 2015 year end thanks to the seasonal reduction of receivables
• Net Financial Debt recorded a slight increase vs. 31 Dec 2015, due to the investment restart but maintained the same low level of the recent periods thanks to the investment postponement and the lower working capital needs, due to the new commercial business model
• D/E ratio move from 0.18 to 0.21

FINANCIAL RESULTS

Fin. Overview

• The Group confirmed the low level of NFP, whose value will increase only with new relevant investments
• The Group has also secured financial resources for future E&P investments thanks to a € 64 M capex line

FINANCIAL RESULTS: E&P E&P

E&P (M€)	1H16	1H15	% Change
Hydrocarbon Production
(MScme)	76.1	79.6	-4.3%
of which natural gas	63.0	67.2	-6.1%
of which oil and condensate	13.1	12.4	-5.8%
EBITDA	2.0	14.2	-86.1%
Exploration Capex	1.1	1.0	+12.2%
Development Capex	5.4	2.2	+138.7%

1H 2016 P&L - E&P contribution

• EBITDA decrease was driven largely by lower hydrocarbon prices and its effects have been limited by the constant control of operating costs.
• In 1H 2016 production declines slightly vs. 1H of previous year due to natural depletion of mature fields not compensated by (i) new gas-in, for delays in the authorization process, and (ii) the contribution to production of Garaguso concession, not operated by the Group, due to a sudden stop
• Exploration & Development:
• Domestic activity:
  • Focus on main development project: EIA still delayed but the period has been used to finish detail engineering

Improvement expected with the end of the year thanks to cost reduction and Mezzocolle gas-in.

International activity :

• Joint venture in the deep waters of the Black Sea "Midia Deep", led by ExxonMobil, decided to relinquish the high risk reward Midia Deep project
• Ongoing activities in the offshore concessions in shallow water " Midia Shallow and Pelican ".

As of June 30th , 2016 2P hydrocarbon reserves are BScme 4,6.

1H 2016 P&L - Commercial Gas Assets Contribution

Gas Assets

Commercial Gas Assets (MScm)	BU	1H16	1H15	% Change
Supply (MScm)		52.5	211.7	-75.2%
Sales (MScm)		52.5	261.4	-79.9%
Third retail	S&S*	-	160.9	-100.0%
Balancing (former Trading)	S&S*	-	40.8	-100.0%
Captive	S&S*/Retail	52.5	59.7	-11.9%
Residential	Retail	41.2	45.6	-9.5%
Small Business/Multipod	Retail	7.5	8.5	-12.0%
Industrial	Retail	3.8	5.6	-31.6%
EBITDA		3,7	2.6	42.7%
of which	S&S*	-	-0.4	100.0%
of which	Retail	3.7	3.0	23.6%

* S&S BU closed from October 2015

• Revenue of 1H 2016 show a slight decline due to two main aspects:
• Warm winter weather that reduced the supply volume (-12%)
• Gradual decline of prices
• Retail Business Unit's EBITDA has grown significantly over the 1H 2015 due to the increased profitability of all its cluster: (residential, small business, industrial)
• 2H 16 start up of retail activities in two new municipalities

FINANCIAL RESULTS: N&T and Storage

Network and

1H 2016 P&L – N&T Contribution

NETWORK (M€)	1H16	1H15	% Change
Distributed Volumes (MSmc)	105.8	101.8	4.0%
Direct end users (#K)	95.9	89.0	7.7%
Pipeline (Km)	1,556.4	1,472.7	5.7%
CAPEX	4.7	0.5	n.m.
EBITDA	3.7	3.8	-0.2%

Network

• Positive and stable contribution to Group results with an EBITDA in line with 1H 2015
• Distributed volumes increased in 1H 2016 due to the acquisition of the Manerbio and Bassano Bresciano distribution concessions, with a very limited effect on consolidated margin (only from May 2016)
• Evaluation of the new ATEM tenders in order, at least, to maintain the same perimeter of activities

TRANSPORTATION (M€)	1H16	1H15	% Change
Transported Volumes (MSmc)	5.1	5.4	-4.6%
Pipeline (Km)	41.9	41.9	0.0%
EBITDA	0.1	0.0	57.9%

Storage projects:

All three projects are located in Central Italy, characterized by only a few storage sites, and in the same area allowing for potential operational synergies:

• SAN BENEDETTO (84.7% GPS - Operator): EIA obtained in June 2014. During 2016 the Group increased its interest in this JV from 49% to 84,7%
• POGGIOFIORITO (100%GPS): EIA obtained in June 2014
• SINARCA (60% GPS - Operator): Final authorization and technical assessment

COMPANY PROFILE

Shareholding as at 30 Jun 2016 Share information

N. of share: 44,909,620 Share price as of 30/06/2016: € 2.56 Share price as of 04/08/2016: € 2,616 Mkt cap 30/06/2016 : € 115.0 million Italian Stock Exchange – segment MTA Own shares as of 30/06/2016: 1,336,677

Share price performance

Group structure Management

Davide Usberti	Chairman and CEO Gas Plus S.p.A; Chairman Gas Plus International B.V. (E&P Int. Activities)
Lino Gilioli	.VP and Lead Independent Director Gas Plus S.p.A.
Cinzia Triunfo	Group General Manager and Director of Gas Plus S.p.A. Executive VP Gas Plus International B.V. (E&P Int. Activities)
Germano Rossi	Group CFO
Massimo Nicolazzi	Executive VP Gas Plus International B.V. (E&P Int. Activities)
Regulated Activity - Network
Leonardo Dabrassi	President – GP Infrastrutture Srl
Achille Capelli	Director Network

Disclaimer

This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Gas Plus. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management"s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Gas Plus to market risks and statements expressing management"s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ""anticipate"", ""believe"", ""could"", ""estimate"", ""expect"", ""intend"", ""may"", ""plan"", ""objectives"", ""outlook"", ""probably"", ""project"", ""will"", ""seek"", ""target"", ""risks"", ""goals"", ""should"" and similar terms and phrases. There are a number of factors that could affect the future operations of Gas Plus and could cause those results to differ materially from those expressed in the forward-looking statements included in this Report, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group"s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, project delay or advancement, approvals and cost estimates; and (m) changes in trading conditions.

All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither Gas Plus nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.