Acea — Investor Presentation 2017

Mar 13, 2017

Low risk profile

Acea's ownership structure today

City of Rome	Suez	Caltagirone Group	Norges Bank	Other
51.0%	23.3%	5.0%	1.6%	19.1%

Source: CONSOB (March 2017) and Companies' data

Long-term shareholder value through returns and growth

EBITDA CAGR +9.9%

2013	2014	2015	2016
3.3x	2.9x	2.7x	2.4x

DPS CAGR +13.9 % (€)

2013	2014	2015	2016
0.42	0.45	0.50	0.62

(€m)

A solid base for the future

Beating expectations for 2016 2016 financial highlights

acea

(€m)	2015	2016*	Change %
Consolidated revenue	2,917.3	2,832.4	-2.9%
EBITDA	732.0	896.3**	+22.4%
EBIT	386.5	525.9	+36.1%
Net profit/(loss)	181.5	272.5	+50.1%
Non-controlling interests	6.6	10.2	+54.5%
Group net profit/(loss)	175.0	262.3	+49.9%
Dividend per share (€)	0.50	0.62	+24.0%
Capex	428.9	530.7	+23.7%

2016 results: above expectations
Strong operating performance
Cost efficiencies and simplification
Growth focus on customer facing businesses
Progressive dividend policy
Strong capex growth

*Positive impact for accounting for Resolution 654/2015 and negative impact of repurchase of portion of bonds in issue

**€785m adjusted for accounting for Resolution 654/2015

(€m)	31 Dec 2015 (a)	30 Sept 2016 (b)	31 Dec 2016 (c)	Change (c-a)	Change (c-b)
NET DEBT	2,010.1	2,138.7	2,126.9	116.8	(11.8)
Equity	1,596.1	1,682.1	1,757.9	161.8	75.8
Invested Capital	3,606.2	3,820.8	3,884.8	278.6	64.0

EBITDA target exceeded in 2016

Acea is ahead in digital transformation to improve competitiveness, customer loyalty and operational efficiency Project Acea 2.0

Increased productivity Improved quality of service

Improved corporate image

Greater internal and external control and transparency

Increased safety for employees

Enhanced focus on environmental sustainability

Contribution of Orvieto waste treatment plant

Recognition in 2015 of insurance proceeds for the fire at the Paliano plant (€3.2m)

(€m)	2015	2016	% change	Key quantitative data	2015	2016
EBITDA	57.4	57.2	-0.3.%	Treatment and disposal* ('000s of tonnes)	765	820
Capex	25.9	34.0	+31.3%	WTE electricity produced (GWh)	265	283

*Includes ash disposed of

Electricity sales: +€24.3m margin increase

(€m)	2015	2016	% change	Key quantitative data	2015	2016
EBITDA	107.9	130.0	+20.5%	production (GWh) Total Electricity	470	410
Production	34.2	32.0	-6.4%	Total Electricity sold (GWh)	9,419	8,316
Sales	73.7	98.0	+33.0%	Enhanced Protection Market	2,951	2,757
				Free Market	6,468	5,559
Capex	30.6	55.3	+80.7%	(Mmc) Total Gas sold	126	107

(€m)	2015	2016	% change	Key quantitative data	2015	2016
EBITDA	310.8	355.0	+14.2%	Total volume of water sold	413	415
of which: Profit/(Loss) on investments consolidated under IFRS 11	28.5	29.3	+2.8%	(Mmc)
Capex	204.4	230.4	+12.7%

• Impact of accounting for Resolution 654/2015: €111.5m
• Impact of fifth regulatory cycle

(€m)	2015	2016	% change	Key quantitative data	2015	2016
EBITDA	255.7	356.3	+39.3%	Total Electricity distributed	10,557	10,009
Capex	156.2	197.9	+26.7%	(GWh)

(€m)	2015	2016	% change
EBITDA	0.2	(2.2)	n.s.
Capex	11.8	13.1	+11.0%

EBIT and Net Profit

CASH FLOW ANALYSIS (€m)	2015	2016
EBITDA	732	896
Change in net working capital	98	(16)
Investment	(429)	(531)
Free Cash Flow	401	350
Net finance income/(costs)	(90)	(110)
Income tax expense	(115)	(144)
Dividends	(96)	(107)
Other	(27)	(106)
Total Cash Flow	73	(117)

* Before impairment losses on receivables

Strong financial structure 2016 financial highlights

(€m)	31 Dec 2015 (a)	30 Sept 2016 (b)	31 Dec 2016 (c)	Change (c-a)	Change (c-b)
NET DEBT	2,010.1	2,138.7	2,126.9	116.8	(11.8)
Medium/Long-term	2,657.0	2,626.7	2,769.4	112.4	142.7
Short-term	(646.9)	(488.0)	(642.5)	4.4	(154.5)

NET DEBT/ EQUITY	NET DEBT/ EQUITY	NET DEBT /EBITDA	NET DEBT/EBITDA
31 Dec 2015	31 Dec 2016	31 Dec 2015	31 Dec 2016
1.3x	1.2x	2.7x	2.4x

Disclaimer

THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT REFLECT THE COMPANY'S MANAGEMENT'S CURRENT VIEWS WHIT RESPECT TO FUTURE EVENTS AND FINANCIAL AND OPERATIONAL PERFORMANCE OF THE COMPANY AND ITS SUBSIDIARIES.

THESE FORWARD-LOOKING STATEMENTS ARE BASED ON ACEA S.P.A.'S CURRENT EXPECTATIONS AND PROJECTIONS ABOUT FUTURE EVENTS. BECAUSE THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES, ACTUAL FUTURE RESULTS OR PERFORMANCE MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN OR IMPLIED BY THESE STATEMENTS DUE TO ANY NUMBER OF DIFFERENT FACTORS, MANY OF WHICH ARE BEYOND THE ABILITY OF ACEA S.P.A. TO CONTROL OR ESTIMATE PRECISELY, INCLUDING CHANGES IN THE REGULATORY ENVIRONMENT, FUTURE MARKET DEVELOPMENTS, FLUCTUATIONS IN THE PRICE AND AVAILABILITY OF FUEL AND OTHER RISKS.

YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, WHICH ARE MADE ONLY AS OF THE DATE OF THIS PRESENTATION. ACEA S.P.A. DOES NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY RELEASE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS PRESENTATION.

THIS PRESENTATION DOES NOT CONSTITUTE A RECOMMENDATION REGARDING THE SECURITIES OF THE COMPANY.

***

PURSUANT TO ART. 154-BIS, PAR. 2, OF THE UNIFIED FINANCIAL ACT OF FEBRUARY 24, 1998, THE EXECUTIVE IN CHARGE OF PREPARING THE CORPORATE ACCOUNTING DOCUMENTS AT ACEA, DEMETRIO MAURO – CFO OF THE COMPANY - DECLARES THAT THE ACCOUNTING INFORMATION CONTAINED HEREIN CORRESPOND TO DOCUMENT RESULTS, BOOKS AND ACCOUNTING RECORDS.