Gas Plus — Investor Presentation 2023

Apr 5, 2023

Gas Plus Group

Analyst Presentation FY 2022 Financial Results

April 5th, 2023*

0 * This document is updated on 6 months basis, occurring after 31 December and 30 June closing

Agenda

Market Scenario

(*) source: BRM

Agenda

The Group performed well, net of extraordinary contributions in Italy and Romania, in terms of both development projects and profitability:

• ✓ Romanian gas-in of the Midia Project, anticipated at half year, allowed a + 42 % of gas production for 2022 and 2023 production is expected to double 2022 levels
• ✓ E&P EBITDA reached € 83.5 M (vs € 10.1 M in 2021)

Only Retail BU was affected by contingent market constrains also in 2H 22 and posted on yearly basis a - € 11.8 M EBITDA.

Strong reduction of NFP to € 49 M - Romanian RBL financing of € 19 M fully reimbursed at the beginning of 2023.

Charge of extraordinary contributions pushed the tax rate to 94 %: Net Profit 2022 reduced to € 3.4 M – compared with a Net Profit Adjusted of € 32.4 M.

Outlook 2023

• ✓ Return to profitability of the Retail BU will balance an expected slight reduction of the E&P EBITDA, affected positively by the FY contribution of Romanian production, and negatively by lower gas price scenarios.
• ✓ Further Capex mainly for Longanesi development project and exploration well E15-1 in the Dutch North Sea.
• ✓ Lower charge of extraordinary contributions on 2023 revenues, applicable as last year, only in Romania, in the current fiscal setup.

Agenda

FY 2022 P&L - E&P contribution
E&P (MScme)	FY22	FY21	∆ (%)
Hydrocarbon Production	181.6	128.2	41.7%
of which natural gas	155.2	93.9	65.3%
of which oil and condensate	26.4	34.5	(23.3%)
EBITDA (M€)	83.5	10.1	726.6%
Exploration Capex	0.2	0.2	(12.8%)
Development Capex	24.3	15.1	61.0%

	E&P Reserves
E&P (MScme)	Dec 31, 2022	Dec 31, 2021	∆ (%)
Hydrocarbon Reserves	4,096.8	4,288.9	(4.5%)
of which domestic	3,394.3	3,563.9	(4.8%)
of which international	702.5	725.0	(3.1%)

➢ 2022 Results:

• Relevant EBITDA result due to two factors : increased gas prices (58%) and increased production levels (42%)
• Domestic activities:
• "Longanesi" project: completed in 2022 drilling and completion activities of the Longanesi 2 dir and Longanesi 3 dir wells. Completed the preparatory activities allowing the start of drilling of the new well Casale Cocchi 1 dir in early February 2023 which with the subsequent work-over of the existing Abbadesse 1 dir well will conclude during 2023 the subsurface activities of the project.
• Restart of production from some fields. The activity of evaluating and restarting some fields will continue in 2023 with the startup in early January of an additional field and the scheduling during the year of additional restarts

➢ International activities:

Romania Offshore concession "Midia Shallow XV"

▪ First gas was achieved on June 15, 2022, through the production of 4 ANA wells and from November 2022 with the last Doina development well.

Netherland offshore permit E 15-C

▪ Completed the preparatory activities allowing the start of drilling of the new E15-1 well planned for late Q2 2023

Retail	FY22	FY21	∆ (%)
Sales (MScm)	61.8	76.8	(19.5%)
Residential	47.5	60.8	(21.9%)
Small Business/Multipod	6.8	8.1	(15.8%)
Industrial	7.6	8.0	(4.7%)
EBITDA (M€)	(11.8)	2.5	n.a.

• The 2022 has been characterized by the exponential and constant increase of gas prices, difficulties of gas supply and strong decline of consumptions
• This scenario negatively affected EBITDA 2022:
• ✓ in the first part of the year due to the sharp deterioration of unitary marginality, started at the end of 2021, related to customers with fixed price or variable price with cap.
• ✓ in the last quarter of the year affected by negative economic conditions of supply caused by overall market supply tightness
• Return of typical marginality started from beginning of 2023
• Thanks to securitization agreement put in place from the Group for the mass market customers, there is no impact on solvency despite the strong increase on receivables' value due to price increase

TTF Gas Price – Quarter Ahead FY 2022 P&L – Network & Transportation Contribution

	FY22	FY21	∆ (%)
Distributed Volumes (MScm)	200.9	228.1	(12.0%)
Direct end users (#K)	109.0	109.2	(0.2%)
Pipeline (Km)	1,827.0	1,822.0	0.3%
EBITDA (M€)	7.0	7.6	(9.0%)
Capex (M€)	2.7	2.6	4.4%

• The warmer temperature registered during 2022 has led to a decrease in the distributed volumes of gas (-12.0%) compared to last year.
• The additional restrictions on revenues cap from gas distribution, due to the reduction of the wacc rate, have generated a EBITDA decrease compared to 2021.
• Slight Capex increase (+4.4%).
• The installation of the new G4-G6 smart meters is ongoing: 65% of the total was installed as of December 31st 2022, in line with the deadline set by the Authority (85% by 31/12/2023)
• No ATEM tenders involving Group concession have been launched to date. The Group intends to evaluate the new ATEM tenders in order to maintain the same perimeter of activities as a minimum target

Group (M€)	FY 22	FY 21	∆ (%)
Revenues	235.4	84.8	177.5%
Operating Costs	159.2	66.9	137.9%
EBITDA	76.1	17.9	325.9%
EBIT	61.4	14.2	333.7%
EBT	55.8	3.4	1,541.2%
Net Result	3.4	3.1	6.6%
EPS (€)	0.08	0.07	6.6%

• Strong growth in Revenues and Operating costs as effect to exceptionally high prices and increase in gas productions
• Increase in EBITDA thanks to strong growth of the BU E&P margins
• Amortization and depreciation growing for the increase in E&P productions
• Reassessment on assets previously depreciated (+8.9M€) thanks to the recovery of hydrocarbon prices and the restart of some fields
• Despite the strong growth in Ebitda, Net Result in line with 2021 due to the estimated impact of the extraprofit tax (in Italy and Romania) for over 38 M€.

Financial Results

December 31, 2022 TTF Gas Price –– Quarter Group Balance Sheet Ahead

Group (M€)	Dec 31, 2022	Dec 31, 2021	∆ (%)
Inventories	3.4	3.4	1.6%
Receivables	50.7	37.1	36.6%
Payables	(51.8)	(32.5)	59.4%
Other Working Credits/Debits	(43.9)	(25.7)	71.4%
Non Current Assets	399.7	380.9	4.9%
Taxes, Abandonment, Severance and
Other provision	(122.5)	(110.0)	11.4%
Net invested capital	235.5	253.2	(7.0%)
Net Financial Debt	49.0	82.2	(40.4%)
of which long term	57.5	73.6	(21.9%)
of which short term	(8.5)	8.6	n.a.
Equity	186.5	171.0	9.0%
Total Sources	235.5	253.2	(7.0%)

• Increase in Non Current Assets after investments for 27.3 M€
• Negative amount of Working Capital due to the increase in tax debts (royalties, Windfalltax, extra-profit tax)
• Despite the investments strong decrease in Net Financial Debt as effect of positive cash flows of E&P activities

• Debt/equity ratio at 0.26 (vs 0.48 at 31/12/2021)

• The NFP shows a significant reduction despite the investments and the temporary negative cash flows of the BU Retail.

• NFP is close to its lowest levels since 2010 and also includes the effects of IFRS 16 on leasing contracts equal to 3.9 M€
• The operating cash flows exceeded expenditure on investments, dividends and other charges.

Company Profile

Stefano Cao	Chairman – Gas Plus S.p.A.
Davide Usberti	CEO 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 Director Gas Plus Dacia S.r.l.
Regulated Activity -	Network
Leonardo Dabrassi	Chairman – GP Infrastrutture S.r.l
Achille Capelli	Network Manager

(*) Gas Plus Group Structure as of 31 december 2022

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 re-categorisation 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 forwardlooking 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.