Ascopiave — Investor Presentation 2020

Sep 10, 2020

Milan, 10th September 2020 INFRASTRUCTURE & ENERGY DAY A s c o p i a v e G r o u p

th September 2020

SUMMARY

Business Overview	Pag. 3
Main financial figures and historical trends	Pag. 18
Dividend policy and Group strategic guidelines	Pag. 27
Gas distribution	Pag. 30
Gas and electricity sales	Pag. 45
Annexes: financial data	Pag. 48
Disclaimer	Pag. 119

Business Overview

→	Group business activities	Pag. 4
→	Ascopiave shareholders	Pag. 6
→	Strategic repositioning ………	Pag. 7
→	Group structure before 19th December 2019	Pag. 8
→	Group structure as of 30th June 2020 ……	Pag. 9
→	Key figures – 2018 consolidation area – gas distribution	Pag. 10
→	Pro forma key figures related to the new consolidation area …………………………….…	Pag. 11
→	Market positioning in the gas distribution sector	Pag. 12
→	Key figures – 2018 consolidation area – gas and electricity sales	Pag. 13
→	Pro forma key figures related to the new Estenergy consolidation area …	Pag. 14
→	Valuation of the assets involved in the transaction ………………………	Pag. 15
→	Governance of Estenergy …	Pag. 16
→	Put option of Ascopiave on Estenergy shares	Pag. 17

Ascopiave Group is a national player in the down-stream segments of the gas sector. It is a major player in the Veneto Region.

Regulated Activity

Activity carried out by subsidiary companies totally controlled by Ascopiave

Operation, maintenance and development of local pipelines, connecting the transport national pipelines to the end consumers. Activity carried out on the basis of concessions awarded by municipalities. Regulation provided both by the local municipalities and by the National Energy Authority (ARERA).

Group Business Activities (2)

Unregulated activities

Since 19th December 2019 the activities are carried out by Estenergy: Majority shareholder: Hera Group (52%) / Minority shareholder: Ascopiave (48%)

Supply of gas to end consumers.

Gas sales to end consumers In Italy gas sales market is completely liberalised since 2003, so any end consumer can freely choose their supplier.

National Energy Authority continues to set maximum tariff levels for the protected market (residential consumers).

Electricity sales to end consumers

Supply of electricity to end consumers.

In Italy electricity sales market will be completely liberalised in the next few years.

Customers currently belonging to the protected market will gradually move to the free market.

Ascopiave is listed on the STAR segment of Borsa Italiana's equity market. The company complies with strict requirements concerning transparency, disclosure, liquidity and corporate governance, in line with international standards.

Increased voting right in general shareholders meeting pursuant to Art. 127-quinquies, paragraph 1, of the TUF (i.e. the main italian law governing the financial sector): two votes for each share held for a 24-month uninterrupted period.

Ascopiave Shareholders as of 30th June 2020 (*)

Asco Holding S.p.A. directly controls the capital of Ascopiave S.p.A. (capital stake: 52,043%). Asco Holding S.p.A. is owned by 78 municipalities mainly located in the province of Treviso (public shareholders) and 1 private company.

(*) Internal processing of information pursuant to art. 120 TUF (Source: CONSOB website)

At the end of a process started in 2018 - after having collected the expressions of interest submitted by several operators – on 30th July 2019 Ascopiave resolved to sign with the Hera Group a framework agreement aimed at implementing a complex operation providing:

• ❑ the birth of a partnership between Ascopiave (48%) and the Hera Group (52%) through the company Estenergy. Estenergy would acquired:
  • the shareholdings held by the Ascopiave Group in the companies active in the natural gas and electricity sale business (except for Amgas Blu)
  • the sales activities operated by the Hera Group in Triveneto
• ❑ the purchase by Ascopiave from the Hera Group of a series of gas distribution concessions covering 188.000 users in Veneto and Friuli Venezia Giulia.

The operation was finalised on 19th December 2019.

Primary strategic goals matched by Ascopiave:

• ❑ reinforcing the gas distribution core business, consolidating the leadership position in the Veneto Region
• ❑ giving greater value to the sales activities, through the partnership with a valid player in the market

Group structure as of 30th June 2020

Key figures related to the gas distribution companies controlled by Ascopiave in 2018:

Gas Distribution SBU – 2018 Consolidation Area

Ascopiave Group GAS DISTRIBUTION - 2018 key figures (*)

No. of managed concessions	214
Length of the gas distribution network (km)	9.809
No. of Users	537.978
Volume of gas distributed (scm/mln)	1.087

(*) Data of the company consolidated with the equity method is considered pro-rata (Unigas Distribuzione, merged in Edigas Distribuzione in 2019).

	EBITDA (Euro/000)	51.778
Ascopiave Group GAS DISTRIBUTION - 2018 EBITDA	EBITDA of the companies consolidated with full consolidation method (Euro/000) (**)	48.553
	EBITDA of the companies consolidated with net equity method (Euro/000) (***)	3.225
	RAB (Euro/000)	464.996
Ascopiave Group GAS DISTRIBUTION - 2018 RAB	RAB of the companies consolidated with full consolidation method (Euro/000) (**)	432.647
	RAB of the companies consolidated with net equity method (Euro/000) (***)	32.349

(**) Companies consolidated with the full consolidation method: AP Reti Gas, AP Reti Gas Rovigo, AP Reti Gas Vicenza, Edigas Distribuzione

(***) EBITDA and AB of the company consolidated with the equity method is considered pro-rata (Unigas Distribuzione, merged in Edigas Distribuzione in 2019).

Pro forma key figures related to the new consolidation area

Pro forma 2018 key figures related to the sales companies currently controlled by Ascopiave:

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 11 th September 2020

The Group is a national player in the gas distribution sector and a leading regional player in Veneto.

Ranking	Group	Users	%	Network	%
1	Italgas	7 694 000	32 2% ,	71 761	27 2% ,
2	Gas 2i Rete	4 342 719	18 2% ,	66 052	25 0% ,
3	A2A	1 502 645	6 3% ,	11 240	4 3% ,
4	Hera	1 406 639	9% 5 ,	17 132	6 5% ,
5	Ascopiave	252 777	3 3% ,	12 873	4 9% ,
6	Iren	744 730	3 1% ,	8 099	3 1% ,
7	Estra	516 000	2 2% ,	6 984	2 6% ,
8	Erogasmet	277 326	1 2% ,	3 722	1 4% ,
9	Gelsia	207 496	0 9% ,	1 789	0 7% ,
	Others	6 411 193	26 8% ,	64 374	24 4% ,
	Total	23 880 000	100 0% ,	264 026	100 0% ,

GAS USERS / GAS DISTRIBUTION NETWORK IN ITALY (*)

(*) Ascopiave processing on 2019 ARERA data and on data published by the companies.

GEOGRAPHICAL FOCUS

NORTHERN ITALY

Ascopiave Group distribution activities

2018 key figures related to the sales companies previously controlled by Ascopiave:

Gas Sales and Electricity Sales – 2018 Consolidation Area

(*) Data of the companies consolidated with the equity method are considered pro-rata (Estenergy and ASM Set).

	EBITDA (Euro/000)	48.148
Ascopiave Group SALES SBU EBITDA – 2018	EBITDA companies consolidated with full consolidation method (Euro/000) (**)	38.549
	EBITDA companies consolidated with net equity method (Euro/000) (***)	9.599

(**) Companies consolidated with the full consolidation method: Ascotrade, Ascopiave Energie, Blue Meta, Amgas Blu, Etra Energia

(***) EBITDA of the companies consolidated with the equity method are considered pro-rata (Estenergy and ASM Set).

Pro forma 2018 key figures related to the sales companies currently controlled by Estenergy:

Gas Sales and Electricity Sales - New Estenergy Consolidation Area

(*) Data of the company consolidated with the equity method are considered pro-rata (ASM Set).

	EBITDA (Euro/000)	70.839
Estenergy Group Pro-forma EBITDA – 2018	EBITDA companies consolidated with full consolidation method (Euro/000) (**)	69.235
	EBITDA companies consolidated with net equity method (Euro/000) (***)	1.604

(**) Companies consolidated with the full consolidation method: Ascotrade, Ascopiave Energie, Blue Meta, Hera Comm Nord Est, Etra Energia

(***) EBITDA of the company consolidated with the equity method is considered pro-rata (ASM Set).

Total Equity Value of the gas sales assets previously held by Ascopiave = Euro 616,2 mln

The transaction is almost cash free. The total amount of the disposed assets is completely invested:

• 1. Minority stake (48%) in Estenergy
• 1. Capital stake (3%) in Hera Comm
• 1. Gas distribution assets (currently held by a New Co: AP Reti Gas Nord-Est)

Steps of the Transaction and Equity Value of the Involved Companies / Assets

		/ (Euro/mln) CASH IN OUT
	Step	Ascopiave	(*) Hera Group	Estenergy
1	acquired Nord-Est from Ascopiave AP Reti Gas Hera Group	-168 0 ,	168 0 ,
2	from Group acquired 49% stake Ascopiave Hera Estenergy a	99 5 ,	-99 5 ,
3	subscribed capital by cash Hera Group increase in Estenergy a		-633 2 ,	633 2 ,
4	acquired the Commercial stakes from (**) Estenergy Companies Ascopiave	474 2 ,		-474 2 ,
5	acquired Nord-Est from Hera Comm Hera Group Estenergy		159 0 ,	-159 0 ,
6	Ascopiave acquired 48% stake from Estenergy Hera Group a	-395 9 ,	395 9 ,
7	acquired Blu from Hera Group Amgas Ascopiave	42 5 ,	-42 5 ,
8	acquired capital stake Ascopiave 3% in Hera Comm a	-54 0 ,	54 0 ,
	Total balance	-1 7 ,	1 7 ,	0 0 ,

investment Net	Ascopiave	(*) Hera Group	Estenergy
Distribution business	168 0 ,	-168 0 ,	0 0 ,
Sales business	-166 3 ,	166 3 ,	0 0 ,
Total investiment net	1 7 ,	-1 7 ,	0 0 ,

(*) Net of Estenergy

(**) Commercial Companies Stakes: Ascotrade, Ascopiave Energie, Blue Meta, Etra Energia, Asm Set.

Governance of Estenergy

Board of Directors: composed of 5 directors.

• Ascopiave appoints 2 board members (with non executive powers). One is the Chairman.
• Hera Group appoints the remaining members. One is the CEO of the company.

Board of Statutory Auditors: composed of 3 members.

• Ascopiave appoints 1 member: the chairman.
• Hera Group appoints the remaining 2 members.

Certain matters are subject to veto rights of Ascopiave (or the directors appointed by it).

The corporate governance of the controlled company mirrors the corporate governance of Estenergy in terms of representation in the corporate bodies, veto rights, etc.

Put Option of Ascopiave on Estenergy shares

Put option of Ascopiave exercisable:

• in all or in part, by the latter on its entire stake in Estenergy, within 7 years from the closing of the transaction
• at a price (strike price) that will be the highest of:
  • 1) Fair Market Value, calculated on the basis of an evaluation method agreed between the parties
  • 2) Purchase price at the entry, plus an annual return equal to 4%, minus all the distributed dividends from the closing date until the date of the exercise of the put option
  • 3) Purchase price at entry.

If exercised, the put option guarantees a minimum rate of return on the initial investment of Ascopiave in Estenergy (Euro 395,9 mln) equal to 4%.

Main financial figures and historical trends

→	Main financial data – 2018 income statement	Pag. 19
→	Main financial data – 2019 income statement ……………………………………………………….……	Pag. 20
→	2006-2019 EBITDA break-down by Strategic Business Unit	Pag. 21
→	2006-2019 Investments in tangible and intangible assets	Pag. 22
→	2006-2018 Investments in companies and firms acquisitions	Pag. 23
→	2019-2020 Investments in companies and firms acquisitions	Pag. 24
→	Main financial data – balance sheet and financial ratios	Pag. 25
→	Financial debt and cost of debt	Pag. 26

2018 MAIN FINANCIAL DATA ACCORDING TO IFRS 11 – INCOME STATEMENT (*)

INCOME STATEMENT
	Group	Distribution SBU (a)	Sales SBU (b)	Parent company
Revenues (c)	581 652	115 349	574 246	11 376
EBITDA	80 036	48 553	38 549	-7 066
EBIT	55 101	29 245	34 524	-8 669
Evaluation of (❖) companies with equity method	8 553	1 407	146 7	0
Net income	46 499

EBITDA of the companies consolidated with the equity method: Euro 12,8 mln (distribution companies: Euro 3,2 mln + sales companies: Euro 9,6 mln) (❖)

EBIT of the companies consolidated with the equity method: Euro 10,3 mln (distribution companies: Euro 1,8 mln + sales companies: Euro 8,5 mln)

^(*) Thousands of Euros; (a) Distribution SBU includes results of entities active in the distribution business; (b) Sales SBU includes results of entities active in the sale business; (c) SBU revenues are represented before elisions.

2019 MAIN FINANCIAL DATA ACCORDING TO IFRS 11 AND IFRS 5 – INCOME STATEMENT (*)

	INCOME
	Group	Distribution SBU (a)	Sales SBU (b)	Parent company	Discontinued companies:
Revenues (c)	124 911	119 239	0	12 783	Previously consolidated with full consolidation method:
EBITDA	44 898	48 311	0	-3 413	EBITDA: Euro 42,7 mln
EBIT	21 573	26 538	0	-4 965	EBIT: Euro 38,7 mln
Evaluation of (❖) companies with equity method	648	648	0	0	Previously consolidated with net equity consolidation method (**):
Net result from discontinued operations	478 737	0	478 737	0	EBITDA: Euro 8,9 mln EBIT: Euro 7,7 mln
Net income	493 216

Discontinued companies:

EBITDA of the company consolidated with the equity method: Euro 1,5 mln (6M 2019 Unigas Distribuzione) EBIT of the company consolidated with the equity method: Euro 0,8 mln (6M 2019 Unigas Distribuzione) (❖)

^(*) Thousands of Euros; (a) Distribution SBU includes results of entities active in the distribution business; (b) Sales SBU includes results of entities active in the sale business; (c) SBU revenues are represented before elisions; (**) Data of the jointly-controlled companies (Estenergy and ASM Set) are considered pro-rata.

2006-2019 EBITDA break-down by Strategic Business Unit

(Millions of Euros)	EBITDA	Group	Distribution SBU	%	Sales SBU	%	Parent (*) company	%
	EBITDA IFRS 11	44 9 ,	48 3 ,	107 6% ,	0 0 ,	0 0% ,	(3 4) ,	-7 6% ,
	EBITDA IFRS 11	80 0 ,	48 6 ,	60 7% ,	38 5 ,	48 2% ,	(7 1) ,	-8 8% ,
	EBITDA IFRS 11	84 4 ,	47 8 ,	56 6% ,	41 1 ,	48 6% ,	(4 4) ,	-5 2% ,
	EBITDA IFRS 11	95 3 ,	35 0 ,	36 8% ,	60 2 ,	63 2% ,	0 0 ,	0 0% ,
	EBITDA IFRS 11	81 0 ,	35 8 ,	44 2% ,	45 2 ,	55 8% ,	0 0 ,	0 0% ,
	EBITDA IFRS 11	79 6 ,	35 4 ,	44 5% ,	44 2 ,	55 5% ,	0 0 ,	0 0% ,
	EBITDA IFRS 11 restated	86 3 ,	33 4 ,	38 7% ,	52 9 ,	61 3% ,	0 0 ,	0 0% ,
	EBITDA	105 9 ,	36 0 ,	34 0% ,	69 9 ,	66 0% ,	0 0 ,	0 0% ,
	EBITDA	102 7 ,	33 9 ,	33 1% ,	68 7 ,	66 9% ,	0 0 ,	0 0% ,
	EBITDA	93 2 ,	34 9 ,	37 4% ,	58 3 ,	62 6% ,	0 0 ,	0 0% ,
	EBITDA	78 0 ,	32 9 ,	42 1% ,	45 1 ,	57 9% ,	0 0 ,	0 0% ,
	EBITDA	61 5 ,	41 6 ,	67 6% ,	19 9 ,	32 4% ,	0 0 ,	0 0% ,
	EBITDA	52 3 ,	37 6 ,	71 8% ,	14 8 ,	28 2% ,	0 0 ,	0 0% ,
	EBITDA	46 5 ,	35 5 ,	76 4% ,	11 0 ,	23 6% ,	0 0 ,	0 0% ,
	EBITDA	41 1 ,	39 9 ,	97 0% ,	1 2 ,	3 0% ,	0 0 ,	0 0% ,

Gas distribution business is characterized by stable operating margins.

Increase of the gas sales business operating margins over the last years is due to external growth (acquisition of 8 companies) and to higher profitability, mainly thanks to declining gas procurement costs. 2016 sales SBU EBITDA is supported by Euro 11,1 mln positive one-off related to the optional APR mechanism set by the energy regulator (ARERA).

(*) Before 2017 the parent company Ascopiave contributed to the results of the distribution SBU.

2006-2019 Investments in tangible and intangible assets

(Millions of Euros)	INVESTMENTS	Group	Distribution network	%	Other investments	%
	INVESTMENTS IFRS 11	34,4	31,4	91%	3,0	9%
	INVESTMENTS IFRS 11	29,5	27,8	94%	1,7	6%
	INVESTMENTS IFRS 11	23,6	22,5	95%	1,1	5%
	INVESTMENTS IFRS 11	20,8	19,7	95%	1,1	5%
	INVESTMENTS IFRS 11	22,0	20,7	94%	1,3	6%
	INVESTMENTS IFRS 11	21,1	19,7	94%	1,3	6%
	INVESTMENTS IFRS 11 restated	18,9	12,7	67%	6,2	33%
	INVESTMENTS	21,6	14,9	69%	6,7	31%
	INVESTMENTS	23,1	16,8	73%	6,3	27%
	INVESTMENTS	41,8	15,4	37%	26,4	63%
	INVESTMENTS	29,1	11,2	38%	17,9	62%
	INVESTMENTS	29,9	13,8	46%	16,1	54%
	INVESTMENTS	19,2	11,4	60%	7,7	40%
	INVESTMENTS	17,5	12,2	70%	5,3	30%
	INVESTMENTS	16,7	12,4	74%	4,4	26%

The Group investments in tangible and intangible assets over the last 14 years amounts to Euro 350,4 mln and for the most part (71%) concern the development, maintenance and up-grade of the gas network and of the distribution system. In 2009-2011 the group made significant investments in photovoltaic power plants. The photovoltaic business was disposed in 2011.

2006-2018 Investments in companies and firms acquisitions: about Euro 200,0 Mln

(*) IPO: 12th December 2006

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 23 th September 2020

2019-2020 Investments in companies and firms acquisitions

Ascopiave - Hera partnership

(*) Acsm-Agam is a Lombard multiutility listed on the stock exchange.

MAIN FINANCIAL DATA ACCORDING TO IFRS 11 AND IFRS 5 – BALANCE SHEET (*)

BALANCE SHEET	31/12/2019	31/12/2018
Tangible and intangible assets	649 801	465 360
Investments in associates	449 945	68 357
Other fixed assets	22 687	23 401
Net working capital	-35 959	8 268
CAPITAL TOTAL EMPLOYED	1 086 474	565 386
Shareholders equity	873 492	447 869
Net financial position	212 981	117 517
SOURCES TOTAL	1 086 474	565 386

Tangible and intangible assets: details

BALANCE SHEET	31/12/2019
Goodwill	47 914
Tangible under IFRIC 12 assets	142 555
Other intangible assets	12 051
Tangible assets	34 694
Tangible and intangible assets	649 801

2019 ASCOPIAVE FINANCIAL LEVERAGE

Financial leverage (NFP / EQUITY)

0,24

(*) Thousands of Euros.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 25 th September 2020

Financial debt and cost of debt

(Thousands of Euros) (*)	31/12/2019	31/12/2018	Chg	Chg %
Long financial borrowings (>12 months) term	135 083	55 111	79 972	+145 1% ,
Current position of long financial borrowings term	30 778	8 014	22 764	+284 1% ,
Short financial borrowings (<12 months) term	38 994	56 381	387) (17	-30 8% ,
Total financial debt	204 855	119 .506	85 349	4% +71 ,
Fixed borrowings rate	143 611	36 874	106 737	+289 5% ,
Floating borrowings rate	61 244	82 632	(21 388)	-25 9% ,

FY 2019 average cost of debt: 0,35% (vs 2018 rate: 0,51%)

(*) Data refers to the companies consolidated with the full consolidation method.

Divided policy and Group strategic guidelines

→	Dividend policy ………….……	Pag. 28
→	Strategic guidelines	Pag. 29

Dividend policy

Dividend payment sustainable with high return to shareholders

Sustainability of the dividend policy:

• stable cash flow
• stable business profitability
• well-balanced financial structure

Dividend yield at the top of the listed italian utility companies

DIVIDEND	2019	2018	2017	2016	2015	2014	2013
Dividend of	47.442	75.163	40.016	40.016	33.347	33.332	26.666
(Thousand Euro) Net Income of	493.216	44.625	47.135	53.635	43.014	35.583	38.678
Group (Thousand Euro)
Payout ratio	10%	168%	85%	75%	78%	94%	69%
(Euro) Dividend per share	0,2133	0,3383	0,1800	0,1800	0,1500	0,1500	0,1200
(*) Dividend yield	5,8%	10,7%	5,3%	7,2%	7,0%	7,6%	8,4%

DIVIDEND	2012	2011	2010	2009	2008	2007	2006
(Thousand of Euro) Dividend	24.484	0	22.557	20.349	19.442	19.890	19.833
Group Net Income (Thousand of Euro)	27.865	6.266	31.174	25.288	18.452	21.764	16.381
Payout ratio	88%	0%	72%	80%	105%	91%	121%
Dividend per share (Euro)	0,1100	0,0000	0,1000	0,0900	0,0850	0,0850	0,0850
Dividend yield (*)	9,2%	0,0%	6,3%	5,8%	5,7%	4,4%	4,0%

(*) Dividend yield = dividend per share / average price per share in the year

Strategic guidelines

Gas distribution

→	Gas distribution sector	Pag. 31
→	Gas distribution: legal framework	Pag. 32
→	Public tenders for the assigning of concessions	Pag. 33
→	Ascopiave's positioning in the gas distribution market …	Pag. 34
→	Ascopiave's strategy in the gas distribution market	Pag. 35
→	Regulation of the call of tenders	Pag. 38
→	Compensation to be paid to the outgoing distributor	Pag. 39
→	Minimum Territorial District – Belluno	Pag. 40
→	Current tariff regulation: VRT and RAB	Pag. 41
→	Tariff regulation	Pag. 42
→	SWOT analysis – Gas Distribution SBU	Pag. 44

Gas distribution sector: key figures (*)

• No. of operators: 199
• Municipalities served: 7.211
• Volume of gas distributed: about 31,3 billions of standard cubic meters
• No. of users served: about 23,9 million
• Length of the gas distribution network: about 264.000 km
• Regulatory asset base (RAB): about Euro 18 bln (**)

Since 2000 gas distribution operators have been reduced to less than a third.

Currently gas distribution sector is strongly concentrated:

• about 50% of RAB (**) is held by Italgas and F2i, the only operators with a national rank
• about 30% of RAB is held by 14 medium size operators (RAB > Euro 100 mln), with a regional relevance
• about 20% of RAB is held by small size operators

(*) 2019 ARERA data; (**) Ascopiave estimate.

• Gas distribution is currently a local monopolistic activity managed under concessions granted by municipalities.
• Italian gas distribution sector was liberalized in 2000 according to the European Union Rules
• The law established a mechanism of competition for the market: concession must be awarded only through public tenders.
• The distributor is responsible for the operation, the development and the maintenance of the distribution network (operational expenses and investments), according to the concessional agreement signed between the operator and the municipality
• The National Energy Authority (ARERA)
  • sets the tariffs to be applied to cover the cost of capital and for the operations of the service
  • provides rules regarding the minimum standard service levels.
• The distributor gives access to any requiring gas sales company that has the right to use the network to supply gas to its customers (third party access).

• In order to improve the economic efficiency of the sector, since 2007 the legislation has established that the tenders must be called to assign concessions for the management of the service in wide geographical areas, grouping neighbouring municipalities (Territorial Districts).
• The national government constituted 177 Territorial Districts nationwide.
• Municipalities belonging to a single Territorial District must appoint a local entity to act as contracting authority for the District.
• The law established the deadline by which each District Authority must call the tenders.
• In 2011 the national government issued some decrees establishing the general contents of the call for tenders, that must be fulfilled on the base of the local needs for investments to be defined by the local contracting authority. The standardization was aimed at encouraging competition and assuring transparency and effectiveness in the tender process..

The current rules governing the incoming tender processes will probably cause a further restructuring of the distribution sector.

A significant reduction in the number of operators is expected, as the participation to the public tenders requires from the potential competitors strong financial capability and important economic, organizational and technical skills.

Ascopiave's positioning in the Territorial Districts constituted by the Government (*)

• Ascopiave is currently the main operator in 5 Territorial Districts (Treviso 2, Padova 1, Vicenza 3, Treviso 1 and Udine 3) with more than 50% market share in terms of end users served. The current end users in these Territorial Districts amount to over 60% of the total end users served by the Group.
• Ascopiave currently has a significant market share in other Minimum Territorial Districts located in Veneto and Lombardy.

Territorial District	Public tender deadline	Ascopiave Group gas users	%	Ascopiave Group (%) market share
Treviso 2	March 2017	141 045	18%	88%
Treviso 1	June 2017	75 664	10%	55%
Padova 1	September 2016	169 125	22%	78%
Vicenza 3	September 2017	80 175	10%	78%
Rovigo	April 2018	35 593	5%	36%
Udine 3	March 2017	33 036	4%	54%
Bergamo 1	January 2017	31 593	4%	42%
Bergamo 5	March 2017	30 886	4%	32%
Vicenza 4	March 2017	29 192	4%	44%
Venezia 2	January 2017	25 899	3%	13%
Other d m.t	2016 -2019	119 699	16%	n.a.
Total		771 907	100%

(*) 2012 data. Ascopiave processing on MISE data.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 34 th September 2020

Ascopiave is selecting the Territorial Districts to bid for and is evaluating potential partnerships with other operators, in order to strengthen its position in some geographical areas.

Ascopiave has all the requirements to successfully act in the market:

• it has strong financial capability so it can finance the required investments, by further exploiting the financial leverage
• It is one of the main operators in Italy, with a long-standing and excellent expertise in the sector and it can assign significant organisational and economic resources to compete in the tender processes.

Group Ascopiave net financial needs to win new gas distribution concessions:

Cash out (-)

(A) Acquisition of new gas distribution plants from the outgoing operators

(B) Investments during the concessional period (maintenance and development)

Cash in (+)

(A) Self financing

• Disposals of gas distribution plants in areas in which Ascopiave does not intend to bid for (net of tax)
• Increase of EBITDA
• (B) Other financing
• Bank financing

Ascopiave's goal is to grow in the distribution sector by winning new contracts to manage the service. The geographical areas served by Ascopiave are expected to change.

After the assignment of the new Territorial District concessions:

(A) in the target Territorial District (Ascopiave wins the contract):

• ❑ Ascopiave will continue to operate the service in the municipalities where it currently carries out the activity (continuity)
• ❑ Ascopiave will operate the service in the municipalities where the activity is currently carried out by other operators (outgoing operators) (new municipalities served). Ascopiave will acquire the property of the plant and will pay to the outgoing operators a compensation, calculated in accordance with the law (value of the existing plants).
• (B) in the other Territorial District (Ascopiave either does not bid in the competition or makes a bid and loses)
  • ❑ Ascopiave will cease the operation of the service in the municipalities where it currently carries out the activity. It will received from the ingoing operator (the winner of the contract) a compensation calculated in accordance with the law.

Ascopiave strategy in the gas distribution market (3)

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 37 th September 2020

Standards to evaluate economic and technical offers

• A - Economic offer (maximum score: 28)
• Discount on gas distribution tariffs
• Discount on prices for other services provided by the distributor to end users
• Fee to be paid to municipalities awarding the concession (cap on the fee level: 10% of the capital cost components of VRT (Total Revenues Constraint) = 10% x ( CI x rd + AMM ))
• Obligation to extend the distribution network (meters of pipes per end user that imply the obligation to connect new potential end-users)
• Investments to improve energy efficiency
• B - Offer concerning safety and service quality (maximum score: 27)
• Network inspections in order to prevent gas leaks (percentage of gas network annually checked)
• Performance of the emergency service and of the gas odorization service
• Improving the level of other quality standards set by the Authority

C - Offer concerning the development and the maintenance of the network (maximum score: 45)

• Appropriateness of the network operation analysis
• Investment plan for the extension and the increase of the capacity of the distribution network; the evaluation concerns: the tangible benefits expected by the investment proposed, the accuracy of the technical projects as well as the quantities of new pipes to be made
• Investment plan for the maintenance
• Technological innovation

In the event that the public tender should not be awarded to Ascopiave, the winner must pay to the Group, as the current owner of the networks, a compensation:

• (a) the compensation must be calculated in accordance with the terms of the agreement implementing the concession or direct award (as the case may be), provided that the agreement was signed before 11th February 2012
• (b) or, if this is not provided for, the compensation must be calculated in accordance with the Guidelines set by the Ministry of Economic Development (Decree 22nd May 2014)
• (c) contributions paid by private users in the past for the construction of part of the network must be deducted (valuation of these are in accordance with the tariff regulation) (*)
• (d) whenever the compensation is higher than 110% of the net invested capital remunerated by the tariff system (RAB), the Energy National Authority (i.e. ARERA) must verify whether the compensation has been evaluated in accordance with the law
• (e) the organizer of the tender bid must take into account the observations issued by the ARERA.

(*) In the evaluation of RAB contributions paid by private users are currently deducted.

• On 1st September 2017 AP Reti Gas S.p.A. submitted an offer to win the concession for the management of the gas distribution service in the territorial district of Belluno Bidding competitors: four
• Duration: 12 years. Compensation to be paid to the outgoing operators: about Euro 59 mlllion
• In June 2019 the contracting authority awarded the concession to Italgas
• Ascopiave challenged the decision before the regional administrative court (TAR Veneto)

2019 pro-forma VRT (*) (Gas Distribution Revenues) and 2019 RAB (Net Invested Capital)

2019 VRT (*) = CO + AMM + CI x rd = Euro 110,1 mln

where:

CO: quota covering management operating costs

AMM: quota covering depreciation

CI (RAB): net capital invested in distribution

rd: real pre-tax rate of return on net invested capital

2019 RAB (*) = Euro 632,7 mln

(*) 2019 VRT has been approved by Gas, Electricity and Water Authority (ARERA) with Resolution n. 107/2020/R/gas. Including AP Reti Gas Nord Est, acquired from the Hera Group on 19th December 2019: VRT = Euro 23,6 mln; RAB = Euro 123,2 mln.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 41 th September 2020

Tariff regulation 2020-2025

On 27th December 2019 ARERA issued the Resolution n. 570/2019/R/gas, approving the new tariff regulation that will be in force during the period 2020-2025 (fifth regulatory period).

Real pre-tax rate of return on RAB (WACC)

Alignement of unlevered beta for metering activities to distribution.

In 2020-2021 WACC is set at 6,3%

Current regulation provides the updating of some calculation parameters in 2022: 1) Risk Free Rate, 2) Inflation Rate, 3) Gearing ratio, etc.

WACC	2018	2019	2020	2021	2022
- distribution WACC	6 10% ,	6 30% ,	6 30% ,	6 30% ,	tbd
WACC - metering	6 60% ,	6 80% ,	6 30% ,	6 30% ,	tbd

Allowed opex

2020 unit allowed opex based on weighted average of 2018 actual / allowed opex. X-factor aimed at reabsorbing the extra efficiency of the last regulatory period.

(*) Unit Allowed Opex	2018	2019	2020	chg	chg %
/ end users - distribution CO	39 6 ,	40 2 ,	33 1 ,	-7 1 ,	-18%
/ end other CO users - meterig &	7 6 ,	7 7 ,	9 1 ,	1 4 ,	18%
/ Total end CO users	47 2 ,	47 9 ,	42 2 ,	-5 7 ,	-12%

(*) Ascopiave estimate. Average unit opex allowed referred to Ascopiave Group (pro-forma)

Standard investment costs

In the near future the rate of return on the investments considered by the tariff system will take into account the spread between the effective costs and standard costs to be defined by ARERA.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 42 th September 2020

Tariff regulation for the incoming Territorial District concessions

Difference between Compensation and RAB

At the starting date of the new concession:

• if the winner of the public tender is the current incumbent operator, the new RAB is equal to the previous one;
• if the winner of the public tender is a newcomer, the new RAB is equal to the compensation paid by the newcomer to the outgoing operator.

Compensation at the end date of the minimum territorial district concession

The compensation is calculated as the sum of (a) the value of the stock of capital existing at the start date of the concession, that is equal to the initial compensation properly updated to take into account the depreciation occurred during the concessional period, and (b) the value of the investments made during the concessional period, calculated as the average between the effective costs of the assets and the regulatory value of the assets.

Strengths

• Dimensional level that allows exploitation of interesting management economies of scale
• Contiguity in gas network, with advantages in terms of operative efficiency
• High network management operative standards
• Part of the local municipalities granting the gas distribution concessions are shareholders of the Group
• Independence by large municipalities
• Current financial leverage

Opportunities Threats

• Possibility of achieving critical mass as of aggregative pole in Veneto and Lombardy in the utility sector
• Tenders for gas distribution concessions
• Temporary push towards aggregations of companies operating in the sector increase in geographical coverage by expanding the corporate structure

Weakness

▪ We expect that legal framework uncertainty and the time needed by municipalities to organize competitive tender procedures will delay the tenders start

• Regulatory uncertainty
• Uncertainty regarding financial needs for the compensations to be paid to outgoing distributors
• Gas concession expiring
• Risk of losing tenders

Gas and electricity sales

→	The commercial energy business of Ascopiave	Pag. 46
→	Ascopiave: an appealing strategic partner	Pag. 47

Strength of the gas and electricity sales business run by Ascopiave

❑ Deeply rooted geographical presence in the most productive regions of Italy

Strong focus in Northern Italy, the most industrialized and productive area of the country with high per capita consumption

❑ Highly reliable and loyal customer base

Customers base constituted mainly by residential customers, with a churn rate lower than the national average

Customers with robust credit rating

❑ Strong commercial network and local presence

Good customer care service, capillarity of the points of sales

Strong brand reputation in the reference regions

Attention to local stakeholders' needs

• ❑ Efficient cost of operations
• ❑ Potential for expansion of the electricity business
• ❑ Upside from sales channel development
• ❑ Potential for expansion of other energy related service
• ❑ Experienced management team

Highly experienced management team with a deep knowledge of the business and the local market environment

Ascopiave: an appealing strategic partner

For the reasons mentioned above, Ascopiave has considered itself an excellent potential partner for several players in the sector.

Many of them submitted expressions of interest for acquiring the business.

Having evaluated various opportunities and alternatives, the Hera Group has been selected as the best partner.

Value creation for the shareholders and for the «local stakeholders»

Annexes: financial data

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 48 th September 2020

Annexes: financial data

2012-2019 financial comparison

→	Income statement	Pag. 50
→	Balance sheet	Pag. 51

FY 2018 financial results

FY 2019 financial results

6M 2020 financial results

Income statement

	IFRS 11	IFRS 11	IFRS 11	IFRS 11	IFRS 11	IFRS 11	IFRS 11 restated
(Thousands of Euros)	2019	2018	2017	2016	2015	2014	2013	2013	2012
Revenues	124.911	581.652	532.792	497.689	581.655	585.300	667.837	854.334	1.078.038
(Cost of raw materials and consumables) (Cost of services) (Cost of personnel) (Other operating costs) Other operating income	(1.358) (31.732) (14.500) (33.902) 1.479	(332.743) (114.827) (26.030) (28.372) 356	(270.577) (113.457) (24.855) (40.224) 731	(249.916) (107.503) (24.233) (21.377) 596	(346.431) (119.151) (21.573) (14.106) 591	(359.366) (107.740) (22.726) (15.914) 32	(473.469) (73.751) (22.822) (12.666) 1.146	(574.518) (133.442) (27.193) (14.337) 1.148	(780.822) (152.434) (25.442) (16.952) 247
EBITDA	44.898	80.036	84.409	95.255	80.983	79.585	86.276	105.992	102.635
(Depreciations and amortizations) (Provisions)	(23.325) -	(22.972) (1.964)	(22.585) (1.885)	(20.227) (2.891)	(20.029) (4.004)	(20.099) (6.819)	(18.273) (6.039)	(20.570) (8.548)	(22.116) (7.491)
EBIT	21.573	55.101	59.939	72.137	56.950	52.667	61.964	76.874	73.027
Financial income / (expenses) Evaluation of companies with equity method	(1.117) 648	(778) 8.553	(468) 7.398	(544) 7.750	(518) 7.449	(1.593) 4.453	(1.515) 6.468	(3.961) (262)	(6.916) (11.007)
EBT	21.105	62.875	66.869	79.343	63.881	55.527	66.917	72.651	55.104
(Income taxes)	(6.626)	(16.376)	(17.617)	(22.401)	(18.519)	(18.194)	(25.807)	(31.541)	(29.509)
Earnings after taxes	14.479	46.499	49.252	56.942	45.362	37.333	41.111	41.111	25.595
Net income (loss) from discontinued operations	478.737	-	-	-	-	-	(71)	(71)	4.336
Net income	493.216	46.499	49.252	56.942	45.362	37.333	41.040	41.040	29.932
(Net income of minorities)	-	(1.874)	(2.117)	(3.307)	(2.349)	(1.750)	(2.361)	(2.361)	(2.067)
Net income of the Group	493.216	44.625	47.135	53.635	43.014	35.583	38.678	38.678	27.865

Balance sheet

	IFRS 11	IFRS 11	IFRS 11	IFRS 11	IFRS 11	IFRS 11	IFRS 11 restated
(Thousands of Euros)	31/12/2019	31/12/2018	31/12/2017	31/12/2016	31/12/2015	31/12/2014	31/12/2013	31/12/2013	31/12/2012
Tangible assets Non tangible assets Investments in associates Other fixed assets	34 694 615 108 449 945 22 687	32 .724 432 637 68 357 23 401	32 334 427 692 68 878 24 494	32 364 397 664 68 .738 23 808	34 987 397 418 68 078 26 699	36 614 394 .530 65 453 29 .555	37 840 387 .500 72 421 39 687	39 277 447 898 1 44 351	40 .534 450 457 - 29 817
Fixed assets	1.122.433	557.118	553.397	522.574	527.182	526.152	537.449	531.527	520.808
Operating current assets (Operating liabilities) current (Operating liabilities) non current	99 349 (82 458) (52 850)	219 660 (160 146) (51 245)	222 977 (156 .597) (49 411)	201 908 (138 003) (48 151)	223 482 (166 .793) (49 698)	229 095 (162 .548) (53 360)	204 066 (160 234) (54 .792)	275 864 (211 986) (61 126)	363 436 (261 175) (64 122)
Net working capital	(35.959)	8.268	16.969	15.754	6.991	13.188	(10.960)	2.752	38.140
Total capital employed	1.086.474	565.386	570.367	538.328	534.173	539.340	526.489	534.278	558.948
Group shareholders equity	873.492	443.567	445.511	438.055	415.264	405.357	397.689	397.689	384.053
Minorities	-	4.303	4.989	6.154	4.873	4.310	4.989	4.989	4.765
Net financial position	212.981	117.517	119.867	94.119	114.037	129.673	123.810	131.600	170.130
Total sources	1.086.474	565.386	570.367	538.328	534.173	539.340	526.489	534.278	558.948

Annexes: financial data

2012-2019 financial comparison

FY 2018 financial results

→	FY 2018 consolidated income statement	Pag. 53
→	Consolidated balance sheet as of 31st December 2018	Pag. 54
→	Volumes of gas distributed	Pag. 55
→	Volumes of gas sold	Pag. 56
→	Volumes of electricity sold	Pag. 57
→	Revenue bridge	Pag. 58
→	EBITDA bridge	Pag. 60
→	EBITDA breakdown	Pag. 62
→	Gas distribution tariff revenues	Pag. 64
→	Gross margin on gas sales	Pag. 65
→	Gross margin on trading gas sales	Pag. 66
→	Gross margin on electricity sales	Pag. 67
→	Other net operating costs	Pag. 68
→	Number of employees	Pag. 70
→	Consolidated cost of personnel	Pag. 71
→	Consolidated capital expenditures	Pag. 72
→	Net Financial Position and cash flow	Pag. 73

FY 2019 financial results

6M 2020 financial results

FY 2018 consolidated income statement

(Thousands of Euros)	2018	2017	Chg	Chg %
Revenues	581 652	532 792	48 860	+9 2% ,
(Cost of raw materials and consumables)	(332 743)	(270 577)	(62 165)	+23 0% ,
(Cost of services)	(114 827)	(113 457)	(1 370)	+1 2% ,
(Cost of personnel)	(26 030)	(24 855)	(1 174)	+4 7% ,
(Other operating costs)	(28 372)	(40 224)	11 851	-29 5% ,
Other operating income	356	731	(376)	-51 4% ,
EBITDA	80 036	84 409	(4 373)	-5 2% ,
(Depreciations and amortizations)	(22 972)	(22 585)	(387)	+1 7% ,
(Provisions)	(1 964)	(1 885)	(78)	+4 2% ,
EBIT	55 101	59 939	(4 839)	-8 1% ,
Financial income / (expenses)	(778)	(468)	(310)	+66 2% ,
(*) Evaluation of companies with method net assets	8 553	7 398	1 154	+15 6% ,
EBT	62 875	66 869	(3 994)	-6 0% ,
(Income taxes)	(16 376)	617) (17	242 1	0% -7 ,
income Net	46 499	49 252	(2 753)	6% -5 ,
(Net income of minorities)	(1 874)	(2 117)	243	5% -11 ,
Net income of the Group	44 625	47 135	(2 510)	-5 3% ,

(*) Result of the companies consolidated with net equity consolidation method (data are considered pro-rata): sale companies, Euro 6,1 mln (Euro 5,9 mln in FY 2017); distribution companies, Euro 1,4 mln (Euro 1,0 mln in FY 2017); Sinergie Italiane, Euro 1,0 mln (Euro 0,6 mln in FY 2017).

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 53 th September 2020

Consolidated balance sheet as of 31st December 2018

E-MARKET SDIR
CERTIFIED

(Thousands of Euros)	31/12/2018	31/12/2017	Chg	Chg %
(*) Tangible assets	32 724	32 334	390	+1 2%
(*) Non tangible assets	432 637	427 692	4 944	, +1 2%
(**) Investments in associates	68 357	68 878	(521)	, -0 8%
Other fixed assets	23 401	24 494	(1 093)	, -4 5% ,
Fixed assets	557 118	553 397	3 721	+0 7% ,
Operating current assets	219 660	222 977	(3 317)	-1 5% ,
liabilities) (Operating current	(160 146)	(156 597)	(3 550)	+2 3% ,
(Operating liabilities) non current	(51 245)	(49 411)	(1 834)	+3 7% ,
working capital Net	8 268	16 969	(8 701)	3% -51 ,
Total capital employed	565 386	570 367	(4 981)	-0 9% ,
Group shareholders equity	443 567	445 511	(1 944)	-0 4% ,
Minorities	4 303	4 989	(687)	-13 8% ,
Net financial position	117 517	119 867	(2 350)	-2 0% ,
Total sources	565 386	570 367	(4 981)	-0 9% ,

(*) Applying IFRIC 12 involves categorising the infrastructures under concession from tangible to intangible assets; (**) Value of the associated companies consolidated with net equity consolidation method: sale companies, Euro 46,8 mln (Euro 48,0 mln as of 31st December 2017); distribution companies, Euro 21,5 mln (Euro 20,8 mln as of 31st December 2017).

Equal consolidation area

^(*) Data are considered pro-rata; (**) AP Reti Gas Vicenza: 1stQ 2018.

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 56 th September 2020

Volumes of electricity sold

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 57 th September 2020

Revenue bridge Companies consolidated with net equity consolidation method (*) (Thousands of Euros)

75.105 74.740 827 1.687 -2.878 Revenues 2017 Revenues from gas sales Revenues from electricity sales Other revenues Revenues 2018 = -365 -0,5%

(*) Sinergie Italiane excluded. Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 59 th September 2020

(*) For more details check out to slide at page 95.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 60 th September 2020

EBITDA bridge Companies consolidated with net equity consolidation method (*) (Thousands of Euros)

13.369 12.824 -1.447 72 23 807 EBITDA 2017 Gross margin on gas sales Gross margin on electricity sales Gas distribution tariff revenues Other changes EBITDA 2018 = -545 -4,1%

(*) Sinergie Italiane excluded. Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 61 th September 2020

EBITDA breakdown Companies consolidated with full consolidation method

(Thousands of Euros)

(Thousands of Euros)	2018	2017	Var	Var %
EBITDA	80 036	84 409	(4 373)	-5 2% ,
- Sale EBITDA	38 549	41 051	(2 501)	-6 1% ,
EBITDA - Distribution	48 553	47 755	798	+1 7% ,
EBITDA - Ascopiave	(7 066)	(4 396)	(2 670)	+60 7% ,
EBIT	55 101	59 939	(4 839)	-8 1% ,
EBIT - Sale	34 524	35 913	(1 388)	-3 9% ,
- Distribution EBIT	29 245	30 232	(987)	-3 3% ,
EBIT - Ascopiave	(8 669)	(6 205)	(2 464)	+39 7% ,

EBITDA breakdown Companies consolidated with net equity consolidation method (*)

(Thousands of Euros)

(Thousands of Euros)	2018	2017	Var	Var %
EBITDA	12 824	13 369	(545)	-4 1% ,
- Sale EBITDA	9 599	10 783	(1 184)	-11 0% ,
EBITDA - Distribution	3 225	2 586	639	+24 7% ,
EBIT	10 263	9 598	666	+6 9% ,
EBIT - Sale	8 466	8 193	273	+3 3% ,
EBIT - Distribution	1 798	1 405	393	+28 0% ,

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
Gas distribution tariff revenues	73 321	69 836	3 485	+5 0% ,
Gas distribution tariff revenues (A)
Company consolidated with full	73 321	69 836	3 485	0% +5 ,
consolidation method

The increase of gas distribution tariff revenues of the companies consolidated with full consolidation method (+ Euro 3,5 mln) is due to:

• 1) change of the consolidation area (AP Reti Gas Vicenza, 1stQ 2018): + Euro 2,9 mln;
• 2) change of gas distribution tariff revenues: + Euro 0,6 mln.

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
Gas distribution tariff revenues (B) Company consolidated with equity net consolidation method (**)	5 733	5 710	23	+0 4% ,
Gas distribution tariff revenues (A+B)	79 054	75 546	3 508	+4 6% ,

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
from sales Revenues gas	364 343	338 634	25 709	+7 6% ,
(Gas purchase costs)	(221 799)	(191 497)	(30 302)	+15 8% ,
(Gas distribution costs)	(84 279)	(86 389)	2 109	-2 4% ,
Gross margin sales (A) on gas
Company consolidated with full	58 264	60 748	(2 484)	-4 1% ,
consolidation method

The decrease of gross margin on gas sales of the companies consolidated with full consolidation method is equal to - Euro 2,5 mln. The decrease is mainly due to the application of the new regulation on gas settlement for the 2013-2017 period for Euro 3,5 mln.

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
sales Gross margin (B) on gas consolidated with Company equity net consolidation method (**)	13 101	14 548	(1 447)	-9 9% ,
sales Gross margin (A+B) on gas	71 365	75 296	(3 931)	-5 2% ,

Gross margin on trading gas sales

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
Revenues from trading sales gas	9 490	1 941	7 548	+388 8% ,
(Trading purchase costs) gas (Trading / capacity costs) transport gas	(9 240) (282)	(1 897) 19	(7 342) (301)	+387 0% , -1552 7% ,
Gross margin on trading sales (A) gas Company consolidated with full consolidation method	(32)	63	(95)	-150 3% ,
(Thousands of Euros) (*)	2018	2017	Chg	Chg %
on trading sales Gross margin (B) gas Company consolidated with equity net consolidation method (**)	-	-	-	n.a.
Gross margin on trading sales (A+B) gas	(32)	63	(95)	-150 3% ,

Gross margin on electricity sales

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
Revenues from elecricity sales	109 377	93 740	15 637	+16 7% ,
(Electricity purchase costs)	(62 853)	(53 044)	(9 809)	+18 5% ,
(Electricity distribution costs)	(39 421)	(34 521)	(4 900)	2% +14 ,
Gross on electricity sales (A) margin
consolidated with full Company	7 102	6 175	927	+15 0% ,
consolidation method

The increase of gross margin on electricity sales of the companies consolidated with full consolidation method, equal to + Euro 0,9 mln, is due both to higher volumes of electricity sold and higher unit profit margins.

(Thousands of Euros) (*)	2018	2017	Chg	Chg %
Gross margin on electricity sales (B) Company consolidated with equity net consolidation method (**)	1 406	1 334	72	+5 4% ,
Gross margin on electricity sales (A+B)	8 508	7 509	999	+13 3% ,

Other net operating costs (1)

(Thousands of Euros)	2018	2017	Chg	Chg %
Other revenues	40 200	56 974	(16 774)	-29 4% ,
Other of raw materials and services costs Cost of personnel	(72 789) (26 030)	(84 532) (24 855)	11 742 (1 174)	-13 9% , +4 7% ,
Other operating (A) net costs Company consolidated with full consolidation method	(58 619)	(52 413)	(6 206)	8% +11 ,

Net operating costs referred to the change of the consolidation area: - Euro 2,3 mln

Increase of other net operating costs of equal consolidation area: - Euro 3,9 mln

of which:

• increase of cost of personnel: - Euro 0,9 mln;
• decrease of margin on energy efficiency task management: - Euro 0,7 mln;
• decrease of concession fees: + Euro 0,1 mln;
• decrease of CCSE contributions for security incentives: - Euro 0,2 mln;
• decrease of advertising and commercial costs: + Euro 0,6 mln;
• increase of margin on distributor services: + Euro 0,1 mln;
• decrease of contingent assets on firm acquisitions: - Euro 0,4 mln;
• increase of negative non-recurring components: - Euro 2,3 mln;
• other variations: - Euro 0,2 mln.

Other net operating costs (2)

(Thousands of Euros)	2018	2017	Chg	Chg %
Other operating (A) net costs Company consolidated with full consolidation method	(58 619)	(52 413)	(6 206)	+11 8% ,
Other operating (B) net costs Company consolidated with equity net consolidation method (*)	(7 417)	(8 224)	807	-9 8% ,
Other operating (A+B) net costs	(66 035)	(60 636)	(5 399)	+8 9% ,

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 70 th September 2020

24.855 26.030 256 -1.078 1.997 Cost of personnel 2017 Cost of personnel referred to the change of the consolidation area Change of capitalized cost of personnel Other changes Cost of personnel 2018 = +1.174 +4,7%

Cost of personnel changes:

• change of the consolidation area: + Euro 0,3 mln
• capitalized cost of personnel: - Euro 1,1 mln
• other: + Euro 2,0 mln, of which:
  • o + Euro 2,4 mln: compensations for the termination of the employment contracts with the general manager and the CFO
  • o Euro 0,8 mln: compensations related to the long term incentive plan
  • o + Euro 0,4 mln: other changes

FY 2018 cost of personnel of the companies consolidated with net equity consolidation method (Sinergie Italiane excluded): Euro 3,1 mln (-0,2%).

Consolidated capital expenditures

Consolidated capital expenditures (*)

6%

FY 2018 investments of the companies consolidated with net equity consolidation method (Sinergie Italiane excluded): Euro 1,6 mln (+1,6%).

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 72 th September 2020

^(*) Thousands of Euros. Excluding network extension in new urbanized areas that according to IAS are considered as operating costs and not investments;.(**) Investments in tangible assets: Euro 27,0 mln; investments in intangible assets: Euro 2,6 mln (excluded realizations of tangible and intangible assets and investments in associated); (***) AP Reti Gas Vicenza: 1stQ 2018.

Net Financial Position and cash flow Companies consolidated with full consolidation method

(Thousands of Euros)

(*) Sinergie Italiane excluded. Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 74 th September 2020

Net financial position and cash flow (3)

(Thousands of Euros) (*)	31/12/2018	31/12/2017	Var	Var %
financial borrowings (>12 months) Long term of long financial borrowings Current position term Short financial borrowings (<12 months) term	55 111 8 014 56 381	360 54 10 181 54 568	751 (2 167) 1 813	4% +1 , -21 3% , +3 3% ,
Total	119	119	397	+0
financial	506	109		3%
debt				,
Fixed	36	30	6	+22
borrowings	874	000	874	9%
rate				,
Floating	82	89	(6	3%
borrowings	632	109	477)	-7
rate				,

2018 average cost of debt: 0,51% (vs 2017 rate: 0,38%)

(*) Data refers to only companies consolidated with full consolidation method.

Annexes: financial data

2012-2019 financial comparison

FY 2018 financial results

FY 2019 financial results

Consolidated results

→ Ascopiave – Hera partnership	Pag. 77
→ FY 2019 consolidated income statement	Pag. 78
→ Consolidated balance sheet as of 31st December 2019	Pag. 79
Companies consolidated with full and with net equity consolidation method
Discontinued operations

6M 2020 financial results

On 19th December 2019 Ascopiave S.p.A. and Hera S.p.A. finalized the transaction that formalizes the operation which marks the birth of the largest energy operator in North-Eastern Italy with over one million customers.

The Hera Group has transfered to Estenergy S.p.A. their sale activities in the "Triveneto" and has acquired the control of the company, while Ascopiave has acquired a minority stake of 48%, with a sales option right that can be executed within the seventh year from the closing of the operation.

Amgas Blu will finally be sold from Ascopiave to the Hera Group.

Following this operation, the Ascopiave Group accounts the activities attributable to the discontinued companies as discontinued operations, according to IFRS 5 international accounting principle.

In the FY 2019 income statement, therefore, the results of the activities mentioned are highlighted in the item "net result from discontinued operations".

In order to highlight the variations of the results achieved by the discontinued operations and to analyze their most significant determinants, a pro-forma income statement has been prepared which shows the relevant revenues, the costs and the intermediate operating results.

(Thousands of Euros)	2019	2018	Chg	Chg %
Revenues	124.911	115.347	9.564	+8%
(Cost of raw materials and consumables)	(1 358)	(1 271)	(88)	+7%
(Cost of services)	(31 732)	(28 766)	(2 966)	+10%
of personnel) (Cost	(14 500)	(16 125)	1 625	-10%
(Other operating costs)	(33 902)	(27 533)	(6 369)	+23%
Other operating income	1 479	355	1 125	+317%
EBITDA	44.898	42.008	2.890	+7%
(Depreciations and amortizations)	(23 325)	(20 927)	(2 399)	+11%
(Provisions)	-	(15)	15	-100%
EBIT	21.573	21.066	507	+2%
Financial income / (expenses)	(1 117)	(1 013)	(104)	+10%
(*) Evaluation of with method companies net assets	648	1 407	(759)	-54%
EBT	21.105	21.460	(355)	-2%
(Income taxes)	(6 626)	(6 733)	108	-2%
after Earnings taxes	14.479	14.727	(248)	-2%
Net result from discontinued operations	478 737	31 773	446 965	+1407%
Net income	493.216	46.499	446.717	+961%
(Net income of minorities)	-	(1 874)	1 874	-100%
Net income of the Group	493.216	44.625	448.591	+1005%

(*) Result of Unigas Distribuzione Gas, company consolidated with net equity consolidation method (data are considered pro-rata): Euro 0,6 mln (Euro 1,4 mln in FY 2018).

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 78 th September 2020

Consolidated balance sheet as of 31st December 2019

E-MARKET SDIR
CERTIFIED

(Thousands of Euros)	31/12/2019	31/12/2018	Chg	Chg %
(*) Tangible assets	34.694	32.724	1.970	+6%
(*) tangible Non assets	615.108	432.637	182.471	+42%
(**) Investments in associates	449.945	68.357	381.588	+558%
Other fixed assets	22.687	23.401	(715)	-3%
Fixed assets	1.122.433	557.118	565.315	+101%
Operating current assets	99.349	219.660	(120.311)	-55%
liabilities) (Operating current	(82.458)	(160.146)	77.688	-49%
(Operating liabilities) non current	(52.850)	(51.245)	(1.605)	+3%
Net working capital	(35.959)	8.268	(44.227)	-535%
Total capital employed	1.086.474	565.386	521.087	+92%
shareholders Group equity	873.492	443.567	429.926	+97%
Minorities	-	4.303	(4.303)	-100%
Net financial position	212.981	117.517	95.464	+81%
Total sources	1.086.474	565.386	521.087	+92%

(*) Applying IFRIC 12 involves categorising the infrastructures under concession from tangible to intangible assets;

(**) Value of the associated companies consolidated with net equity consolidation method (pro-rata): Unigas Distribuzione Gas, Euro 0,0 mln (Euro 21,5 mln as of 31st December 2018); sale companies, Euro 395,9 mln (Euro 46,8 mln as of 31st December 2018). Stake in Hera Comm, Euro 54,0 mln (Euro 0,0 mln as of 31st December 2018).

Annexes: financial data

2012-2019 financial comparison

FY 2018 financial results

FY 2019 financial results

Consolidated results

Companies consolidated with full and with net equity consolidation method

→	Number of gas distribution users	Pag. 81
→	Volumes of gas distributed	Pag. 82
→	Economic data	Pag. 83
→	Revenue bridge	Pag. 84
→	EBIT bridge	Pag. 85
→	Gas distribution tariff revenues	Pag. 86
→	Other net operating costs	Pag. 87
→	Number of employees	Pag. 89
→	Cost of personnel	Pag. 90
→	Capex	Pag. 91
→	Net Financial Position and cash flow	Pag. 92
→	Financial debt and cost of debt	Pag. 93
	Discontinued operations

6M 2020 financial results

Number of gas distribution users

(*) AP Reti Gas Nord Est, company consolidated from 31st December 2019;

(**) Unigas Distribuzione Gas users are included (at 100%). The company is merged by incorporation in Ascopiave from 1° July 2019. On the same date the operating activities in the gas distribution sector were transferred to Edigas Distribuzione Gas.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 81 th September 2020

(*) Unigas Distribuzione Gas volumes of gas distributed are included (at 100%). The company is merged by incorporation in Ascopiave from 1° July 2019. On the same date the operating activities in the gas distribution sector were transferred to Edigas Distribuzione Gas..

Economic data

Companies consolidated with full consolidation method

(Thousands of Euros)	2019	2018	Chg	Chg %
Revenues	124.911	115.347	9.564	+8,3%
EBITDA	44.898	42.008	2.890	+6,9%
% of revenues	+35,9%	+36,4%
EBIT	21.573	21.066	507	+2,4%
of % revenues	+17,3%	+18,3%

Companies consolidated with net equity consolidation method (*)

(Thousands of Euros)	2019	2018	Chg	Chg %
Revenues	3.964	4.844	(881)	-18,2%
EBITDA	1.483	3.225	(1.742)	-54,0%
% of revenues	+37,4%	+66,6%
EBIT	838	1.798	(960)	-53,4%
% of revenues	+21,1%	+37,1%

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 83 th September 2020

Companies consolidated with full and with net equity consolidation method (4)

Companies consolidated with full and with net equity consolidation method (5)

(*) For more details check out to slide at page 64.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 85 th September 2020

Gas distribution tariff revenues

(Thousands of Euros) (*)	2019	2018	Chg	Chg %
distribution tariff Gas revenues	79.777	73.321	6.456	+8,8%
Gas distribution tariff revenues (A) Companies consolidated with full consolidation method	79.777	73.321	6.456	+8,8%

(Thousands of Euros) (*)	2019	2018	Chg	Chg %
distribution Gas tariff revenues (B) Companies consolidated with equity net consolidation method (**)	2.885	5.733	(2.848)	-49,7%
Gas distribution tariff revenues (A+B)	82.662	79.054	3.608	+4,6%

(*) Economic data before elisions;

(**) Data are considered pro-rata.

Other net operating costs

(Thousands of Euros)	2019	2018	Chg	Chg %
Other revenues	44.476	41.408	3.068	+7,4%
Other of raw materials and services costs of personnel Cost	(64.854) (14.500)	(56.596) (16.125)	(8.259) 1.625	+14,6% -10,1%
Other operating (A) net costs Companies consolidated with full consolidation method	(34.879)	(31.313)	(3.566)	+11,4%

Increase of other net operating costs: - Euro 3,6 mln

of which:

• decrease of cost of personnel: + Euro 1,6 mln;
• decrease of margin on energy efficiency task management: - Euro 4,0 mln;
• increase of gas distribution concession fees: - Euro 1,8 mln;
• decrease of CSEA contributions for security incentives: - Euro 0,3 mln;
• other variations: + Euro 0,9 mln.

Other net operating costs

(Thousands of Euros)	2019	2018	Chg	Chg %
Other (A) operating net costs consolidated with full Companies consolidation method	(34.879)	(31.313)	(3.566)	+11,4%
Other operating (B) net costs Companies consolidated with equity net consolidation method (*)	(1.402)	(2.508)	1.106	-44,1%
Other operating (A+B) net costs	(36.281)	(33.821)	(2.460)	+7,3%

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 88 th September 2020

(*) AP Reti Gas Nord Est, company consolidated from 31st December 2019;

(**) Unigas Distribuzione Gas employees are included (at 100%). The company is merged by incorporation in Ascopiave from 1° July 2019. On the same date the operating activities in the gas distribution sector were transferred to Edigas Distribuzione Gas.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 89 th September 2020

6M 2019 cost of personnel of Unigas Distribuzione Gas, company consolidated with net equity consolidation method: Euro 0,3 mln.

6M 2019 investments of Unigas Distribuzione Gas, company consolidated with net equity consolidation method: Euro 0,4 mln.

^(*) Excluding network extension in new urbanized areas that according to IAS are considered as operating costs and not investments;

^(**) Investments in intangible assets and in tangible assets (excluded realizations, investments in associated and investments relative to the application of IFRS 16 accounting principle).

Companies consolidated with full and with net equity consolidation method (12)

Net financial position and cash flow Companies consolidated with full consolidation method

(Thousands of Euros)

Financial debt and cost of debt

(Thousands of Euros) (*)	31/12/2019	31/12/2018	Chg	Chg %
financial borrowings months) Long (>12 term Current position of long financial borrowings term Short financial borrowings (<12 months) term	135 083 30 778 38 994	55 111 8 014 56 381	79 972 22 764 (17 387)	+145 1% , +284 1% , -30 8% ,
Total financial debt	204 855	119 .506	85 349	+71 4% ,
Fixed borrowings rate Floating borrowings rate	143 611 61 244	36 874 82 632	106 737 (21 388)	+289 5% , -25 9% ,

FY 2019 average cost of debt: 0,35% (vs 2018 rate: 0,51%)

(*) Data refers to only companies consolidated with full consolidation method.

Annexes: financial data

2012-2019 financial comparison

FY 2018 financial results

FY 2019 financial results

Consolidated results Companies consolidated with full and with net equity consolidation method Discontinued operations

→	Number of gas sales customers …	Pag. 95
→	Volumes of gas sold …	Pag. 96
→	Number of electricity sales customers …	Pag. 97
→	Volumes of electricity sold …	Pag. 98
→	Economic data	Pag. 99
→	EBIT bridge		Pag. 100

6M 2020 financial results

Discontinued operations (1)

Number of gas sales customers

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 95 th September 2020

Discontinued operations (2)

Volumes of gas sold

(Millions of standard cubic meters)

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 96 th September 2020

Discontinued operations (3)

Number of electricity sales customers

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 97 th September 2020

Discontinued operations (4)

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 98 th September 2020

Economic data

Discontinued companies (previously consolidated with full consolidation method)

(Thousands of Euros)	2019	2018	Chg	Chg %
Revenues	582.838	572.776	10.062	+1,8%
EBITDA	42.734	37.414	5.320	+14,2%
% of revenues	+7,3%	+6,5%
EBIT	38.653	33.702	4.951	+14,7%
% of revenues	+6,6%	+5,9%

Discontinued companies (previously consolidated with net equity consolidation method) (*)

(Thousands of Euros)	2019	2018	Chg	Chg %
Revenues	79.530	78.457	1.073	+1,4%
EBITDA	8.889	9.599	(710)	-7,4%
% of revenues	+11,2%	+12,2%
EBIT	7.724	8.466	(741)	-8,8%
% of revenues	+9,7%	+10,8%

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 99 th September 2020

EBIT bridge Discontinued companies (previously consolidated with full consolidation method)

(Thousands of Euros)

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 100 th September 2020

EBIT bridge

Discontinued companies (previously consolidated with net equity consolidation method) (*)

(Thousands of Euros)

(*) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 101 th September 2020

Annexes: financial data

2012-2019 financial comparison
FY 2018 financial results
FY 2019 financial results
6M 2020 financial results
Consolidated results
→ 6M 2020 consolidated income statement	Pag. 103
→ Consolidated balance sheet as of 30th June 2020	Pag. 104
Companies consolidated with full and with net equity consolidation method

Estenergy

(Thousands of Euros)	6M 2020	6M 2019	Chg	Chg %
Revenues	86.518	60.816	25.702	+42%
of raw materials and consumables) (Cost	(1.047)	(719)	(327)	+46%
(Cost of services)	(18.376)	(15.001)	(3.375)	+22%
(Cost of personnel)	(9.600)	(7.560)	(2.040)	+27%
(Other operating costs)	(27.917)	(19.995)	(7.922)	+40%
Other operating income	27	1.298	(1.271)	-98%
EBITDA	29.605	18.839	10.767	+57%
and (Depreciations amortizations)	(16.722)	(11.103)	(5.619)	+51%
(Provisions)	-	-	-	n.a.
EBIT	12.883	7.735	5.148	+67%
Financial income / (expenses)	2.724	(724)	3.448	-476%
(*) Evaluation of companies with method net assets	9.341	648	8.692	+1341%
EBT	24.948	7.660	17.288	+226%
(Income taxes)	(3.763)	(2.924)	(838)	+29%
Earnings after taxes	21.185	4.736	16.450	+347%
Net result from discontinued operations	-	29.466	(29.466)	-100%
Net income	21.185	34.202	(13.017)	-38%
(Net income of minorities)	-	(1.878)	1.878	-100%
Net income of the Group	21.185	32.324	(11.138)	-34%

(*) Result of the company consolidated with net equity consolidation method (pro-rata): Estenergy, Euro 9,3 mln (Euro 0,0 mln in 6M 2019); Unigas Distribuzione Gas, Euro 0,0 mln (Euro 0,6 mln in 6M 2019).

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 103 th September 2020

Consolidated balance sheet as of 30th June 2020

(Thousands of Euros)	30/06/2020	31/12/2019	Chg	Chg %
(*) Tangible assets	34.403	34.694	(290)	-1%
(*) Non tangible assets	616.157	615.108	1.050	+0%
(**) Investments in associates	500.761	449.945	50.816	+11%
Other fixed assets	23.549	22.687	862	+4%
Fixed assets	1.174.870	1.122.433	52.438	+5%
Operating current assets	118.993	99.349	19.644	+20%
(Operating liabilities) current	(100.579)	(82.458)	(18.121)	+22%
(Operating liabilities) non current	(54.340)	(52.850)	(1.490)	+3%
Net working capital	(35.927)	(35.959)	3 2	-0%
Total capital employed	1.138.944	1.086.474	52.470	+5%
shareholders Group equity	840.542	873.492	(32.950)	-4%
Minorities	-	-	-	n.a.
Net financial position	298.401	212.981	85.420	+40%
Total sources	1.138.944	1.086.474	52.470	+5%

(*) Applying IFRIC 12 involves categorising the infrastructures under concession from tangible to intangible assets;

(**) Value of the associated companies consolidated with net equity consolidation method (pro-rata): Estenergy, Euro 420,0 mln (Euro 395,9 mln as of 31st December 2019); Hera Comm, Euro 54,0 mln (Euro 54,0 mln as of 31st December 2019); Acsm-Agam, Euro 26,7 mln (Euro 0,0 mln as of 31st December 2019).

Annexes: financial data

2012-2019 financial comparison

FY 2018 financial results

FY 2019 financial results

6M 2020 financial results

Consolidated results

Companies consolidated with full and with net equity consolidation method

→	Number of gas distribution users and volumes of gas distributed	Pag. 106
→	Economic data	Pag. 107
→	Revenue bridge	Pag. 108
→	EBIT bridge	Pag. 109
→	Gas distribution tariff revenues	Pag. 110
→	Other net operating costs	Pag. 111
→	Number of employees	Pag. 112
→	Cost of personnel	Pag. 113
→	Capex	Pag. 114
→	Net Financial Position and cash flow	Pag. 115
→	Financial debt and cost of debt	Pag. 116
	Estenergy

(*) Unigas Distribuzione Gas operating data are included. The company is merged by incorporation in Ascopiave from 1° July 2019. On the same date the operating activities in the gas distribution sector were transferred to Edigas Distribuzione Gas;

(**) AP Reti Gas Nord Est, consolidated as of 31st December 2019.

Economic data

Companies consolidated with full consolidation method

(Thousands of Euros)	6M 2020	6M 2019	Chg	Chg %
Revenues	86.518	60.816	25.702	+42%
EBITDA	29.605	18.839	10.767	+57%
% on revenues	+34,2%	+31%
EBIT	12.883	7.735	5.148	+67%
% on revenues	+14,9%	+13%

Companies consolidated with net equity consolidation method (*)

(Thousands of Euros)	6M 2020	6M 2019	Chg	Chg %
Revenues	-	3.964	(3.964)	-100%
EBITDA	-	1.483	(1.483)	-100%
% on revenues	n.a.	+37%
EBIT	-	838	(838)	-100%
% on revenues	n.a.	+21%

(*) Data are considered pro-rata. They refer only to Unigas Distribuzione Gas and do not include Estenergy figures.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 107 th September 2020

Companies consolidated with full and with net equity consolidation method (3)

(*) Change of the consolidation area refers only to the activities carried out by AP Reti Gas Nord Est. It does not include the contribution of the activities formerly carried out by Unigas Distribuzione Gas and currently operated by Edigas Esercizio Distribuzione Gas.

Companies consolidated with full and with net equity consolidation method (4)

(*) Change of the consolidation area refers only to the activities carried out by AP Reti Gas Nord Est. It does not include the contribution of the activities formerly carried out by Unigas Distribuzione Gas and currently operated by Edigas Esercizio Distribuzione Gas;

(**) Further details on page 112 of the current presentation.

Gas distribution tariff revenues

(Thousands of Euros) (*)	6M 2020	6M 2019	Chg	Chg %
Gas distribution tariff revenues	54.375	36.210	18.165	+50%
Gas distribution tariff revenues (A) Companies consolidated with full consolidation method	54.375	36.210	18.165	+50%

The increase of the gas distribution tariff revenues of the companies consolidated with full consolidation method (+ Euro 18,2 mln) is due to:

• 1) new consolidation area (AP Reti Gas Nord Est): + Euro 11,5 mln;
• 2) gas distribution tariff revenues of the concession formerly held by Unigas Distribuzione Gas: + Euro 5,9 mln
• 3) increase of the gas distribution tariff revenues: + Euro 0,8 mln.

(Thousands of Euros) (*)	6M 2020	6M 2019	Chg	Chg %
Gas distribution tariff revenues (B) consolidated with Companies equity net consolidation method (**)	-	2.885	(2.885)	-100%
distribution tariff Gas revenues (A+B)	54.375	39.095	15.280	+39%

(*) Economic data before elisions;

(**) Data are considered pro-rata.

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 110 th September 2020

Other net operating costs

(Thousands of Euros)	6M 2020	6M 2019	Chg	Chg %
Other revenues	31.383	24.310	7.073	+29%
Other costs of raw materials and services Cost of personnel	(46.553) (9.600)	(34.122) (7.560)	(12.431) (2.040)	+36% +27%
Other net operating costs (A) Companies consolidated with full consolidation method	(24.770)	(17.372)	(7.398)	+43%
Other net operating costs (B) Companies consolidated with net equity consolidation method (*)	-	(1.402)	1.402	-100%
Other net operating costs (A+B)	(24.770)	(18.774)	(5.996)	+32%

Other net operating costs due to the change of the consolidation area: - Euro 3,9 mln

Increase of other net operating costs: - Euro 3,5 mln

of which:

• increase of cost of personnel: - Euro 0,5 mln;
• increase of margin on energy efficiency tasks management: + Euro 0,3 mln;
• increase of gas distribution concession fees: - Euro 1,6 mln;
• increase of CSEA contributions for security incentives: + Euro 0,4 mln;
• decrease of capital gains on disposal of gas distribution plants: - Euro 1,2 mln;
• increase of provisions for risks: - Euro 0,6 mln;
• other variations: - Euro 0,3 mln.

(*) Data are considered pro-rata;

(**) Change of the consolidation area refers only to the activities carried out by AP Reti Gas Nord Est. It does not include the contribution of the activities formerly carried out by Unigas Distribuzione Gas and currently operated by Edigas Esercizio Distribuzione Gas.

30/06/2020 31/12/2019

6M 2019 cost of personnel of Unigas Distribuzione Gas, company consolidated with net equity consolidation method: Euro 0,3 mln.

^(*) New consolidation area refers only to the activities carried out by AP Reti Gas Nord Est. It does not include the contribution of the activities formerly carried out by Unigas Distribuzione Gas and currently operated by Edigas Esercizio Distribuzione Gas.

6M 2019 investments of Unigas Distribuzione Gas, company consolidated with net equity consolidation method: Euro 0,4 mln.

(*) Excluding network extension in new urbanized areas that according to IAS are considerated as operating costs and not capital expenditures;

(**) Investments in intangible assets and in tangible assets (excluded realizations, investments in associated and investments relative to the application of IFRS 16 accounting principle);

(***) New consolidation area refers only to the activities carried out by AP Reti Gas Nord Est. It does not include the contribution of the activities formerly carried out by Unigas Distribuzione Gas and currently operated by Edigas Esercizio Distribuzione Gas.

Companies consolidated with full and with net equity consolidation method (10)

Net financial position and cash flow Companies consolidated with full consolidation method

(Thousands of Euros)

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 115 th September 2020

Financial debt and cost of debt

(Thousands of Euros) (*)	30/06/2020	31/12/2019	Chg	Chg %
Long financial borrowings (>12 months) term	137.683	135.083	2.600	+2%
Current position of long financial borrowings term	32.790	30.778	2.012	+7%
Short financial borrowings months) (<12 term	130.669	38.994	91.675	+235%
Total financial debt	301.142	204.855	96.287	+47%
Fixed borrowings rate	150.973	143.611	7.362	+5%
Floating borrowings rate	150.169	61.244	88.925	+145%

6M 2020 average cost of debt: 0,32% (vs 2019 rate: 0,35%)

(*) Data refers to only companies consolidated with full consolidation method.

Annexes: financial data

2012-2019 financial comparison
FY 2018 financial results
FY 2019 financial results
6M 2020 financial results
Consolidated results
Companies consolidated with full and with net equity consolidation method
Estenergy
→ Financial highlights Pag. 118

Financial highlights

Income	Balance sheet
statement (*)	(*)

(Thousands of Euros)	6M 2020
Revenues	191.006
(Cost of raw materials and consumables)	(96.636)
(Cost of services)	(70.798)
(Cost of personnel)	(3.630)
(Other operating costs)	(278)
Other operating income	-
EBITDA	19.663
(Depreciations and amortizations) + (provisions)	(6.794)
EBIT	12.869
Financial income / (expenses)	451
EBT	13.320
(Income taxes)	(3.116)
Net income	10.204

(Thousands of Euros)		30/06/2020
	Tangible assets	1.390
	tangible Non assets	317.289
	Investments in associates	9.190
	Other fixed assets	33.443
	Fixed assets	361.313
	Operating current assets	67.626
	(Operating liabilities) current	(78.928)
	(Operating liabilities) non current	(53.049)
	working capital Net	(64.351)
	Total capital employed	296.962
	Shareholders equity	339.268
	Net financial position	(42.306)
	Total sources	296.962

(*) Pro-rata amounts, i.e. proportional to the Ascopiave's capitale stake in Estenergy (48%).

Ascopiave Group – INFRASTRUCTURE & ENERGY DAY – Milan, 10 119 th September 2020

Disclaimer

• ❑ This presentation has been prepared by Ascopiave S.p.A. for information purposes only and for use in presentations of the Group's results and strategies.
• ❑ For further details on the Ascopiave Group, reference should be made to publicly available information, including the Quarterly Reports and the Annual reports.
• ❑ Statements contained in this presentation, particularly the ones regarding any Ascopiave Group possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward looking statement. Such factors include, but are not limited to: changes in global economic business, changes in the price of certain commodities including electricity and gas, the competitive market and regulatory factors. Moreover, forward looking statements are currently only at the date they are made.
• ❑ Any reference to past performance of the Ascopiave Group shall not be taken as an indication of the future performance.
• ❑ This document does not constitute an offer or invitation to purchase or subscribe for any shares and nopart of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
• ❑ By attending the presentation you agree to be bound by the foregoing terms.