Gas Plus — Earnings Release 2018

Aug 3, 2018

Analyst Presentation 1H 2018 Financial Results August 3 rd , 2018

www.gasplus.it

INDEX

• HIGHLIGHTS
• FINANCIAL RESULTS

MARKET SCENARIO

Market

HIGHLIGHTS

Highlights

• Strong EBITDA growth (+29%) driven by the E&P BU.
• E&P margins improvement related to production increase (+18%) and better price scenario (Brent +36.2%; Gas +24%).
• Stable contribution by downstream Network & Transportation BU and Retail BU.
• Further reduction of NFP to € 34.1M - lowest level since Società Padana Energia 2010 acquisition.
• Net result (€ -2.1 M ) contingently affected by the full depreciation in 1 H 2018 of the costs of the two Romanian exploration wells Iulia and Paula.
• Main E&P development projects near to the final stage of the authorization process and, for "Midia" project in Romania, to the clarification of the legislative and fiscal framework.

FINANCIAL RESULTS: E&P E&P

1H 2018 P&L - E&P contribution

E&P	1H18	1H17	% Change
Hydrocarbon Production
(MScme)	68.0	57.6	+18.1%
of which natural gas	57.7	46.8	+23.3%
of which oil and condensate	10.3	10.8	-4.6%
EBITDA (M€)	6.6	3.1	113%
Exploration Capex	3.3	0.7	+370%
Development Capex	1.6	3.7	-56.8%

Exploration & Development:

• Domestic activity:
• "Longanesi" project: authorization process at the final stage.
• Mezzocolle: production ramp-up ongoing (on yearly basis, 28 MScm vs. 25 MScm expected).

International activity:

• Activities in offshore concession "Midia Shallow and Pelican" ongoing:
• Exploration: two exploration wells drilled in May and June/July 2018. The first resulted dry and the second discovered a reservoir lower than expected and sub-economical.
• Development: (Net resources 1.4 BScm) final pre-FID evaluations ongoing, also considering the new Petroleum Law.
• Hydrocarbon production improvement thanks to Mezzocolle that compensates the missing contribution of Garaguso concession (-12%).
• EBITDA more than doubled thanks to the production growth, better hydrocarbon prices and the constant control of operating costs.
• As of June 30th , 2018 2P hydrocarbon reserves: 4.43 BScme.

FINANCIAL RESULTS: Retail Retail

1H 2018 P&L - Retail

Retail	1H18	1H17	% Change
Sales (MScm)	54.9	52.1	5.2%
Residential	44.5	41.2	8.0%
Small Business/Multipod	7.1	7.0	1.4%
Industrial	3.2	3.9	-17.9%
EBITDA (M€)	3.7	3.7	-

• Stable level of sales and EBITDA also compared to a favorable 1H 2017.
• Increased volume of sales and lower operating costs had balanced tariff reduction and slightly lower marginality of fixed price sales.
• Focus on the aim to limit the switch rate thanks to a customized offer to meet the needs of the customers (both Residential and Small Business) and focusing on the most interesting areas.

FINANCIAL RESULTS: N&T and Storage

1H 2018 P&L – N&T Contribution

NETWORK	1H18	1H17	% Change
Distributed Volumes (MScm)	119.5	109.0	10%
Direct end users (#K)	95.9	95.8	0%
Pipeline (Km)	1,561.7	1,560.0	0%
EBITDA (M€)	3.6	3.8	-7.7%
Capex (M€)	0.7	1.1	-36%

Network

• Increase in distributed volume due to thermal curve. EBITDA aligned to previous period despite a reduction of the "price cap".
• Evaluation of the new ATEM tenders in order, at least, to maintain the same perimeter of activities.
• Relevant tenders of the period: best bidder identified for Milan 1 ATEM; for Torino 2 ATEM the Bidding Commission is still evaluating bids.

TRANSPORTATION	1H18	1H17	% Change
Transported Volumes (MScm)	5.9	5.3	11%
Pipeline (Km)	41.8	41.8	0%
EBITDA (M€)	0.1	0.1	0%

Storage projects:

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

• SAN BENEDETTO (84.7% GPS - Operator): EIA obtained in June 2014.
• POGGIOFIORITO (100% GPS): EIA obtained in June 2014
• SINARCA (60% GPS - Operator): Final authorization obtained. Technical and economic evaluation ongoing

1H 2018 – Group P&L

Group (M€)	1H18	1H17	% Change
Revenues	48.0	43.7	10.0%
Operating Costs	35.0	33.6	4.3%
EBITDA	13.0	10.1	28.8%
EBIT	0.4	3.7	(89.3%)
EBT	(2.6)	1.0	(353.4%)
Net Result	(2.1)	0.6	(440.5%)
EPS (€)	(0.05)	0.01

1H18 Financial results

• Growth in revenues due to the higher hydrocarbon production and the improvement of energy scenarios.
• Constant control of the operating costs, only in slight increase.
• Increase in EBITDA thanks to the improvement of E&P activities results.
• EBIT and Net Result affected by the increase of depreciations following the negative outcome of two exploration wells in Romania.

FINANCIAL RESULTS

Financial Result

FINANCIAL RESULTS

June 30, 2018 – Group Balance Sheet

Group (M€)	June 30, 2018	Dec 31, 2017	% Change
Inventories	3.7	4.4	-14.67%
Receivables	14.7	24.2	-39.35%
Payables	(17.5)	(23.3)	-24.78%
Other working Credits/Debits	(7.5)	3.0	-347.21%
Non current Assets	436.6	443.6	-1.58%
Taxes, Abandonment, Severance and Other provision	(184.5)	(184.6)	-0.09%
Net invested capital	245.5	267.3	-8.16%
Net Financial Debt	34.1	52.5	-35.04%
of which long term	33.9	40.2	-15.77%
of which short term	0.2	12.3	-98.33%
Equity	211.4	214.8	-1.58%
Total Sources	245.5	267.3	-8.16%

• Strong decrease in Working Capital after the temporary increase at the end of 2017 due to the change in billing frequency of the retail activities.
• Further reduction in Net Financial Debt vs. 31 Dec 2017 thanks to the positive cash flows of all business units and the investment postponement.
• D/E ratio from 0.24 to 0.16.

FINANCIAL RESULTS

• The NFP has reached its lowest level since 2010 and its trend will be stable till new relevant investments.
• The operating cash flow continues to exceed expenditure on investments and other charges.

COMPANY PROFILE Annex

Shareholding as at 30 June 2018 Share information

N. of share: 44,909,620 Share price as of 30/06/2018: € 2.2800 Share price as of 02/08/2018: € 2.4418 Mkt cap 30/06/2018 : € 102.4 million Italian Stock Exchange – segment MTA Own shares as of 30/06/2018: 1,336,677

Share price performance

Group structure Management

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

Disclaimer

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

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