ERG — Investor Presentation 2016

Mar 10, 2017

FOURTH QUARTER 2016 RESULTS

10 MARCH 2017

LUCA BETTONTE, CEO

FOURTH QUARTER 2016 RESULTS

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.

AGENDA

4Q 2016 Highlights

• ✓ Key Figures
• ✓ Recent Developments
• Results Review
• ✓ Business Environment
• ✓ 2016 Group EBITDA
• ✓ Results by Segments
• Key Financials
• ✓ Profit & Loss
• ✓ Investments
• ✓ Cash Flow Statement
• 2017 Guidance and Conclusions
• Appendix

HIGHLIGHTS: KEY FIGURES

thanks to enlarged and diversified electricity portfolio Highlights

HIGHLIGHTS: KEY FIGURES VS. GUIDANCE

NFP (€ mn)

≈380

CAPEX (€ mn)

≈1,650

≈1,670(2)

BP 2016

≈340(1)

2016 FCST 2016 ACTUAL BP 2016

EBITDA:

• ✓Good operating performance in Wind
• ✓Better contribution of thermal generation
• ✓2016 RC EBITDA does not include roughly €26mn of revenues related to past GCs in the Hydro business, included in the Hydro PPA
• ✓Improved corporate costs

CAPEX:

• ✓Higher CAPEX vs Businesss Plan for acceleration in the U.K.
• ✓Slightly below recent guidance due to different timeline in Brockaghboy wind farm construction

NFP:

• ✓Higher cash generation (i.e. EBITDA)
• ✓Higher cash-in from receivables inherited from Hydro acquisition in excess of €40mn (not included in the BP 2015-2018)
• ✓Timing effects on working capital (reversal expected in 2017)

BP execution on track, financial delivery better

(1) Business Plan 2016 CAPEX adjusted for IMPAX acquisition (2) Business Plan 2016 NFP adjusted for extraordinary dividend

1,557

366

2016 FCST 2016 ACTUAL

Highlights

GROWTH AND CONSOLIDATION

FURTHER CONSOLIDATION IN GERMAN WIND GENERATION

DEAL DESCRIPTION:

• ✓ On March 7, 2017 ERG signed an agreement to acquire 6 wind
• farms in Germany for a total installed capacity of 48.4MW ✓Equity value of €14mn, EV ca. €40mn
• ✓Parks in operation since 2007-2008
• ✓Producibility slightly above 1,700heq
• ✓EBITDA of ca. €5mn pa.
• ✓Closing in 2Q 2017

STRATEGIC RATIONALE:

• ✓Further consolidation of ERG in Germany, with installed capacity to reach 216MW from 168MW
• ✓ERG as one of the first wind onshore players in Germany
• ✓Good localization, near to ERG wind farms
• ✓Possibility to lever on the technical services developed by ERG in Germany

RESULTS REVIEW

PAOLO MERLI, CFO

BUSINESS ENVIRONMENT

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

(2) Figures refer only to Gebeleisis wind farm

2016 GROUP EBITDA

Overall growth thanks to a diversified portfolio

Results Review

ENERGY PORTFOLIO

2015 vs 2016 (TWh)

4Q 2015 vs 4Q 2016 (TWh)

An enlarged and diversified electricity portfolio

Results Review

NON-PROGRAMMABLE RESULTS

Sound Wind conditions coupled with consolidation of new assets

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

Results driven by consolidation of ERG Hydro and phasing out of Essential Unit Regime

Results Review

• (1) Non-programmable M&A CAPEX include:
• in 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, plus €27mn for Lukerg asset split
• in 2016: investments related to the closing of IMPAX acquisition (which took place on February 2, 2016, amounting to €292mn) and Brockaghboy acquisition (€14mn)
• in 4Q 2015: ca. €27mn for Lukerg asset split
• (2) It refers to Hydro acquisition

TOTALERG: KEY FIGURES(1)

2016	2015	Euro millions	4Q 2016	4Q 2015
135	144	RC EBITDA	38	29
60	61	RC EBIT	18	10
28	24	Net Profit	7	2
244	294	NFP	244	294
10.9%	10.6%	TOTALERG retail market share	10.9%	10.9%

KEY FINANCIALS

PRO-FORMA REPLACEMENT COST P&L

2016	2015	Euro millions	4Q 2016	4Q 2015
455	350	RC EBITDA	104	86
(254)	(171)	Amortization and depreciation	(60)	(48)
202	179	RC EBIT	44	38
(76)	(63)	Net financial income (expenses)	(20)	(18)
15	13	Net income (loss) from equity investments	4	2
141	129	RC Results before taxes	28	22
(30)	(30)	Income taxes	(3)	(1)
110	99	RC Results for the period	24	21
(3)	(3)	Minority interests	0	(0)
107	96	RC Net profit	24	20
22%	23%	Tax Rate	12%	4%

Note: figures based on NO GAAP measures

Key Financials

2016 CASHFLOW STATEMENT

(1) Equity consideration for IMPAX acquisition (€292mn) and Brockaghboy acquisition for about €14mn

Key Financials

2017 GUIDANCE AND CONCLUSIONS

LUCA BETTONTE, CEO

2017 GUIDANCE

EBITDA:

✓Wind: Phase-out of incentives for ca. 200MW throughout the year ✓CCGT: lower contribution following the entry of Sorgenti-Rizziconi connection with Mainland as of June 1, 2016

²⁰¹⁶ 2017 FCST

≈430

PROGRAMMABLE NON-PROGRAMMABLE CORPORATE

455

LIQUIDITY PF OTHER AT MLT 1,557 2017 FCST ≈1,450 2016

CAPEX:

• ✓Guidance at €140mn still consistent with Business Plan reflecting higher CAPEX in 2016 and some postponement to 2018 of organic growth ✓2016 CAPEX include about €290mn related to a single M&A
• transaction (France and Germany)

NFP:

✓Guidance at €1.45bn

Business Plan to be presented in December 2017

APPENDIX

4Q 2016 GROUP EBITDA

Overall strong results, better Wind more than offset slight decrease of Programmable

4Q 2016 CASHFLOW STATEMENT

2016 AND 4Q 2016 RESULTS

2016	2015	Euro millions	4Q 2016	4Q 2015
1,025	944	Revenues	268	231
455	350	RC EBITDA	104	86
308	254	- Non-Programmable	78	52
		of which:
235	213	- Italy	56	39
72	41	- Abroad	21	13
161	115	- Programmable	32	37
		of which:
77	107	- Thermo	7	29
84	8	- Hydro	25	8
(13)	(19)	- Corporate	(5)	(3)

NON-PROGRAMMABLE: KEY FIGURES (1/2)

2016	2015		4Q 2016	4Q 2015
1,720	1,507	Installed capacity (end-period, MW)	1,720	1,507
		of which:
1,094	1,087	- Italy	1,094	1,087
252	128	- France	252	128
168	86	- Germany	168	86
82	82	- Poland (1)	82	82
70	70	- Romania (2)	70	70
54	54	- Bulgaria (2)	54	54
3,501	2,614	Electricity Production (GWh)	870	596
		of which:
2,220	1,910	- Italy	509	368
499	206	- France	121	78
240	156	- Germany	66	45
213	68	- Poland (1)	75	42
181	201	- Romania (2)	54	48

(1) Production in Poland started in July 2015 (2) ERG 's stake = 50%

NON-PROGRAMMABLE: KEY FIGURES (2/2)

2016	2015	Euro millions	4Q 2016	4Q 2015
		RC EBITDA:
235	213	Italy	56	39
32	13	France	8	5
18	12	Germany	6	4
6	4	Poland (1)	2	2
17	12	LUKERG (2)	5	2
		of which:
8	8	- Romania (2)	2	2
8	4	- Bulgaria (2)	3	0
308	254	Total RC EBITDA	78	52
(163)	(134)	Depreciation	(38)	(35)
145	120	RC EBIT	39	17

ERG POWER: KEY FIGURES

2016	2015	Euro millions	4Q 2016	4Q 2015
2,693	2,632	Electricity Production (GWh)	661	698
77	107	RC EBITDA	7	29
(30)	(30)	Depreciation	(8)	(8)
47	78	RC EBIT	(1)	21

ERG HYDRO: KEY FIGURES

2016	2015	Euro millions	4Q 2016	4Q 2015
1,358	84	Electricity Production (GWh)	329	84
84	8	RC EBITDA	25	8
(58)	(5)	Depreciation	(14)	(5)
26	3	RC EBIT	11	3

28

INVESTMENTS

2016	2015	Euro millions	4Q 2016	4Q 2015
350	200	Non-Programmable(1)	23	60
13	957	Programmable	5	952
		of which:
10	9	- Thermo	4	3
4	948	- Hydro(2)	1	948
3	2	Corporate	2	1
366	1,158	Total	29	1,012

(1) M&A CAPEX include:

• in 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, plus €27mn for Lukerg asset split

• in 2016: investments related to the closing of IMPAX acquisition (which took place on February 2, 2016, amounting to €292mn) and Brockaghboy acquisition (€14mn)

• in 4Q 2015: ca. €27mn for Lukerg asset split

(2) 2015 and 4Q 2015 figures refer to Hydro acquisition