Iren — Investor Presentation 2015

May 14, 2015

1Q 2015: Absence of extraordinary negative one-offs reveals Iren's potential.

The exceptional mild winter and autumn seasons that characterized 2014 did not repeat in the 1Q 2015, which reported lower temperatures, more in line with the average of the period. In this scenario the Group has focused more on internal re-organization and external growth opportunities.

INWARD OUTWARD

1Q 2015: all the economic key indicators signal growth.

• Revenues up by 1.8%: The growth is linked to the integral consolidation of the subsidiary AMIAT S.p.A., which offset a further drop in commodity prices.
• Ebitda +4.0%: The growth in EBITDA is even more significant taking into account the absence of the positive one-off reported in 1Q 2014. Both unregulated activities (+8%) and regulated activities (+16%) contributed to the improvement in margins along with achieved synergies (4m€).
• Ebit +3.5%: Lower net provisions more than offset higher D&A due to AMIAT integral consolidation.
• Net profit +14.2%: The growth in Net Profit reflects the good operating performance and a lower tax rate due to the cancellation of the Robin Hood tax and the change in IRAP calculation method.

GENERATION AND DH – Stable results in spite of the expiry of GCs.

• Stable results in cogeneration thanks to higher volumes and positive performance in the dispatching services market (MSD) which offset the absence of the positive one-off reported in 1Q 2014.
• Hydroelectric sector benefitting from higher production, +8% (bucking the national trend, -19%) counterbalanced by reduction in prices.
• District heating sector reports a slight decrease in margin linked to the green certificates expiry (worth approx. 10m€ in the quarter, 20m€ FY), partially offset by higher volumes due to a normalization of winter climate conditions (still less favorable than 2013).

	m€	1Q '14	1Q '15	Δ	Δ%
Revenues		302	267	-35	-11%
Ebitda		70	70	0	0%
Ebit		42	39	-3	-8%
Gross Capex		5	4	-1	-27%

MARKET – Strong increase in gas sector.

• The Gas Sales branch scores a +34% increase, thanks to the effective sales policy carried out by the Group together with a very low percentage of long term contracts in its sources portfolio.
• Electricity sales impacted by the absence of the positive one off reported in 2014 (linked to the regulated market).
• Relevant improvement in EBITDA margin (6.0% vs. 4.5%).

	m€	1Q '14	1Q '15	Δ	Δ%
Revenues		873	812	-61	-7%
Ebitda		40	49	9	22%
	Electricity	8	6	-2	-26%
	Gas&Heat	32	43	11	34%
Ebit		29	39	10	34%
Gross Capex		2	3	1	35%

DISTRIBUTION – Positive results in all the sectors.

ENERGY INFRASTRUCTURE

• Electricity networks: Positive impact of the equalization for previous year, together with higher white certificates thanks to an increase in efficiency.
• Gas networks: growth driven by cost-savings and synergies.

m€	1Q '14	1Q '15	Δ	Δ%
Revenues	77	87	10	13%
Ebitda	32	37	5	15%
Electricity	16	20	4	22%
Gas	16	17	1	7%
Ebit	22	26	4	19%
Gross Capex	14	15	1	8%
El. distr. (GWh)	996	999
Gas distr. (mcm)	518	575

WATER

• Higher revenues linked to work on behalf of third party, to investments accounted in revenues in compliance with the IFRIC 12 principle and to the tariff growth.
• The increase in margins reflects the tariff trend, compliant with the regulatory framework established by AEEGSI along with the achievement of synergies.

m€	1Q '14	1Q '15	Δ	Δ%
Revenues	99	110	11	11%
Ebitda	35	36	1	5%
Ebit	17	21	4	22%
Gross Capex	11	14	3	34%
Volume sold (mcm)	37	35

WASTE – Doubling of revenues.

• The acquisition of the control of AMIAT and its subsequent entering into Iren's consolidation perimeter brought to a doubling in revenues and to a strong increase in urban waste volumes collected and EBITDA (+52%).
• The relevant growth in special waste collection, already registred in 2014, further accelerated (+ 77%) as well as the strong increase in heat produced (thanks to the new WTE in Parma).
• Sorted waste collection percentage in Emilia area reached 65% (up from 62% reported in 1Q 2014).
• Lower capex thanks to the completion of the WTE in Parma.

	m€	1Q '14	1Q '15	Δ	Δ%
Revenues		56	116	60	107%
Ebitda		13	20	7	52%
Ebit		6	11	5	65%
Gross Capex		8	3	-5	-60%

WTEs - Energy and Heat prod. (GWh-GWht)

Energy sold Heat

From EBITDA to Net Profit.

	1Q '14	1Q '15	Δ	Δ%
EBITDA	203.3	211.4	8.1	4.0%
D&A	-57.2	-65.7			 Higher D&A related mainly the consolidation of AMIAT
Provisions	-17.4	-12.5			and lower provisions.
EBIT	128.7	133.2	4.5	3.5%
Financial charges for loans	-23.8	-21.1			• Lower FC due to lower cost of debt.
Other financial charges	-1.9	-7.3			• Higher financial expense
Companies consolidated with e.m.	-2.8	-2.9			due to the discounting of provisions.
EBT	100.2	101.9	1.7	1.6%
Taxes	-45.4	-39.0
Minorities	-3.5	-4.2			• Lower tax-rate linked to the cancellation of RHT and the change in IRAP
Group net profit	51.3	58.6	7.3	14.2%	regulatory framework.

Pag. 8 of 14

Cash-flow and NFP Bridge.

The relevant reduction in NFP is due to the cash flow from operation, which more than covers the cashout for investments. Approximately 70% of the latter are devoted to energy and water distribution networks.

Interest rate and debt structure.

• 26% of gross debt at variable interest rate.
• Average long-term debt duration of about 4.9 years.
• Relevant reduction in cost of debt (3.5% compared to 3.8% in FY 2014).
• Well-balanced debt structure (one quarter of Iren's total debt is funded through bonds).

Annexes

	1Q '14	1Q '15	Δ%
Brent USD/bbl	108.2	54	-50.1%
USD/€	1.4	1.1	-17.7%
Brent €/bbl	79.0	47.9	-39.4%
Gas Demand (bcm)	21	24	10.5%
PSV €/000 scm	269	257	-4.4%
Energy Demand (Twh)	78	78	-0.1%
PUN (€/Mwh)	52.5	51.9	-1.2%
O2 €/Ton C	5.9	7.0	+19.5%
Green Cert. Hydro (€/Mwh)	90.6	97.9	+8.1%

• The normalization of climate condition brought a 10% growth in gas demand

• PUN level still depressed.

	FY '14	1Q '15
Net fixed assets	4,619	4,591
Net Working Capital	238	216
Funds	-550	-562
Other assets and liabilities	-28	-17
Net invested capital	4,279	4,228
Group Sharholders' equity	1,994	2,055
Net Financial Position	2,285	2,172
Total Funds	4,279	4,228

DISCLAIMER

The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Mr. Massimo Levrino, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the accounting information contained in this presentation is consistent with the accounting documents, records and books.

This document was prepared by IREN mainly for use during meetings with investors and financial analysts. This document does not constitute an offer to sell or a solicitation to buy or subscribe shares and neither this entire document or any portion of it may constitute a basis or provide a reference for any contract or commitment.

Some of the information contained in this document may contain projected data or estimates that are based on current expectations and on opinions developed by IREN and are based on current plans, estimates, projections and projects. Consequently, it is recommended that they be viewed as indicative only.

Projected data and estimates entail risks and uncertainties. There are a number of factors that could produce significant differences between projected results and actual results. In addition, results may be affected by trends that are often difficult to anticipate, are generally beyond IREN's control and could produce results and developments that are substantially different from those explicitly or implicitly described or computed in the abovementioned projected data and estimates. The non-exhaustive list that follows being provided merely by way of example, these risks include: significant changes in the global business scenario, fluctuations in the prices of certain commodities, changes in the market's competitive conditions and changes in the general regulatory framework.

Notice is also given that projected data are valid only on the date they are produced. Except for those cases in which the applicable statutes require otherwise, IREN assumes no obligation to provide updates of the abovementioned estimates and projected data.