ERG — Investor Presentation 2016

Nov 10, 2016

THIRD QUARTER 2016 RESULTS

10 NOVEMBER 2016

LUCA BETTONTE, CEO

DISCLAIMER

This document contains certain forward-looking information that is subject to a number of factors that may influence the accuracy of the statements and the projections upon which the statements are based. There can be non assurance that the projections or forecasts will ultimately prove to be accurate; accordingly, the Company makes no representation or warranty as to the accuracy of such information or the likelihood that the Company will perform as projected.

3Q 2016 Highlights

• ✓ Key Figures
• ✓ One Company: a leaner Group Structure
• Results Review
• ✓ Business Environment
• ✓ 3Q 2016 Group EBITDA
• ✓ Results by Segments
• Key Financials
• ✓ Profit & Loss
• ✓ Investments
• ✓ Cash Flow Statement
• 2016 Guidance and Conclusions
• Appendix

HIGHLIGHTS: KEY FIGURES

New electricity mix implied good set of results

Highlights

ONE COMPANY: A LEANER GROUP STRUCTURE

• One Company: a complete Group re-organization aimed at creating a leaner Group structure more consistent with the new business model (IPP mainly based on renewable sources)
• Board of Directors approved merger of ERG Services into ERG S.pA. effective as of January 1, 2017
• creation of a Business Development Unit
• creation of an integrated Risk Management Unit
• centralization of the procurement, the Legal Services and the IT units
• efficiency improvement, optimization of decisional processes and synergies expected
• ERG subsidiaries Board of Directors approved merger of ERG Renew and ERG Renew O&M into ERG Power Generation, effective as of January 1, 2017:
• unique generation company for the 3 complementary technologies (CCGT, wind and hydro)
• unique energy management

RESULTS REVIEW

PAOLO MERLI, CFO

BUSINESS ENVIRONMENT

12

11

(1) Italian theoretical price based on National Average Electricity Price (PUN) in Italy + feed-in premium

(2) Figures refer only to Gebeleisis wind farm

3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016

Baseload Spark Spread in Italy (€/MWh)

3Q 2016 GROUP EBITDA

Good results despite low seasonality in wind

ENERGY PORTFOLIO

9M 2015 vs 9M 2016 (TWh)

3Q 2015 vs 3Q 2016 (TWh)

An enlarged and diversified electricity portfolio

NON-PROGRAMMABLE RESULTS

Consolidation of new assets offset by negative seasonality

Results Review (1) As of December 23, 2015 LUKERG asset split became effective. From 1.1.2016 ERG Renew owns Tcherga and Hrabrovo wind farms in Bulgaria, and Gebeleisis wind farm in Romania.

PROGRAMMABLE RESULTS

Strong set of results

ADJUSTED INVESTMENTS

• (1) M&A CAPEX include:
• in 9M 2015: €7mn of equity consideration for the acquisition of two wind farms in Poland now in operation, plus wind acquisition in France (63.4MW) from Macquarie European Infrastructure Fund for ca. €70mn.
• in 9M 2016: investments related to the closing of IMPAX acquisition (which took place on February 2, 2016, amounting to €293mn) and Brockaghboy acquisition (€13mn)
• in 3Q 2015: ca. €70mn for the wind acquisition in France (63.4MW) from Macquarie European Infrastructure Fund.

Results Review

TOTALERG: KEY FIGURES(1)

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
97	114	Adjusted RC EBITDA	44	61
42	51	Adjusted RC EBIT	26	39
20	21	Adjusted Net Profit	16	24
368	355	NFP	368	355
10.9%	10.5%	TOTALERG retail market share	10.8%	10.5%

KEY FINANCIALS

PRO-FORMA REPLACEMENT COST P&L

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
351	264	RC Adjusted EBITDA	78	66
(193)	(123)	Amortization and depreciation	(65)	(41)
158	141	RC Adjusted EBIT	13	25
(56)	(45)	Net financial income (expenses)	(18)	(14)
11	11	Net income (loss) from equity investments	9	13
113	107	RC Results before taxes	4	23
(27)	(29)	Income taxes	4	(5)
86	79	RC Results for the period	8	19
(3)	(3)	Minority interests	1	(0)
83	76	RC Net profit	9	19
24%	27%	Tax Rate	(100%)	20%

Note: figures based on NO GAAP measures

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3Q 2016 ADJUSTED CASHFLOW STATEMENT

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2016 GUIDANCE AND CONCLUSIONS

LUCA BETTONTE, CEO

2016 GUIDANCE

351 9M 2016 2016 FCST 337(1) PROGRAMMABLE NON-PROGRAMMABLE CORPORATE ≈440 ≈380

9M 2016

CAPEX:

✓2016 guidance reduced at €380mn due to slight postponement of Brockaghboy investment

2016 FCST

NFP:

✓2016 guidance at €1.65bn due to CAPEX reduction and NWC improvement

2016 Guidance and Conclusions (1) It includes M&A CAPEX related to the closing of IMPAX acquisition (which took place on February 2, 2016, amounting to €293mn) and Brockaghboy acquisition (€13mn)

APPENDIX

9M 2016 GROUP EBITDA

Improved figures in all ERG divisions

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9M 2016 ADJUSTED CASHFLOW STATEMENT

(1) Equity consideration for IMPAX acquisition (€293mn) and Brockaghboy acquisition for about €13mn

9M AND 3Q 2016 RESULTS

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
757	713	Adjusted Revenues	227	216
351	264	RC EBITDA Adjusted	78	66
230	202	- Non-Programmable	43	45
		of which:
179	174	- Italy	34	36
51	28	- Abroad	10	9
129	78	- Programmable	36	27
		of which:
70	78	- Thermo	19	27
59	0	- Hydro	17	0
(8)	(16)	- Corporate	(2)	(6)

NON-PROGRAMMABLE: KEY FIGURES (1/2)

9M 2016	9M 2015		3Q 2016	3Q 2015
1,720	1,446	Installed capacity (end-period, MW)	1,720	1,446
		of which:
1,094	1,087	- Italy	1,094	1,087
252	128	- France	252	128
168	86	- Germany	168	86
82	42	- Poland (1)	82	42
70	77	- Romania (2)	70	77
54	27	- Bulgaria (2)	54	27
2,631	2,011	Electricity Production (GWh)	583	528
		of which:
1,711	1,542	- Italy	368	361
378	128	- France	73	57
175	111	- Germany	43	29
138	26	- Poland (1)	35	25
127	146	- Romania (2)	38	42
102	58	- Bulgaria (2)	26	14

(1) Production in Poland started in July 2015

(2) 2015 figures correspond to ERG 's stake in the joint venture LUKERG = 50%

NON-PROGRAMMABLE: KEY FIGURES (2/2)

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
		RC EBITDA:
179	174	Italy	34	36
24	8	France	4	3
12	8	Germany	2	2
3	1	Poland (1)	(0)	1
6	7	Romania (2)	2	1
5	4	Bulgaria (2)	2	1
230	202	Total RC EBITDA	43	45
(125)	(99)	Depreciation	(42)	(33)
105	103	RC EBIT	2	12

(1) Production in Poland started in July 2015 (2) 2015 figures correspond to ERG 's stake in the joint venture LUKERG = 50%

ERG POWER: KEY FIGURES

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
2,032	1,935	Electricity Production (GWh)	740	724
70	78	RC EBITDA	19	27
(22)	(22)	Depreciation	(7)	(7)
48	56	RC EBIT	11	19

ERG HYDRO: KEY FIGURES

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
1,028	n.a.	Electricity Production (GWh)	277	n.a.
59	n.a.	RC EBITDA	17	n.a.
(44)	n.a.	Depreciation	(15)	n.a.
14	n.a.	RC EBIT	3	n.a.

INVESTMENTS

9M 2016	9M 2015	Euro millions	3Q 2016	3Q 2015
327	140	Non-Programmable (1)	8	85
8	5	Programmable	3	2
		of which:
6	5	- Thermo	2	2
2	0	- Hydro	1	0
1	1	Corporate	0	0
337	146	Adjusted Total	12	87

(1) M&A CAPEX for non-programmable include:

• in 9M 2015: €7mn of equity consideration for the acquisition of two wind farms in Poland now in operation, plus wind acquisition in France (63.4MW) from Macquarie European Infrastructure Fund for ca. €70mn.

• in 9M 2016: investments related to the closing of IMPAX acquisition (which took place on February 2, 2016, amounting to €293mn) and Brockaghboy acquisition (€13mn)

• in 3Q 2015: ca. €70mn for the wind acquisition in France (63.4MW) from Macquarie European Infrastructure Fund.