Iren — Investor Presentation 2021

Aug 3, 2021

IREN RESULTS

1H 2021

3rd August 2021

Growth in all activities 1H 2021

KPIs
m€	1H '20	1H '21	Δ	Δ%
Revenues	1.826	2.005	179	9.8%
Ebitda	473	517	44	9.3%
Ebit	232	251	19	8.3%
Group net profit	133	193	60	45.6%
Capex	254	279	25	9.8%
NFP	2,950*	2,959	9	0.3%
* FY 2020 data restated

• Revenues +9.8%: favoured by higher energy prices and consolidated companies (I.Blu and Unieco)
• Ebitda +9.3%: positive results thanks to M&A contribution (I.Blu and Unieco), energy scenario recovery and organic growth
• Ebit +8.3%: lower provisions to bad debt (of which 10m€ related to Covid) offset by higher depreciations.
• Group net profit +45.6%: led by a fiscal measure (32m€) and the optimization of the Unieco debt (13m€)
• Capex +9.8%: in line with business plan assumptions. 59% are sustainable investments
• NFP +0.3%: in line with FY2020, thanks to cash flow generation covering the cash out for investments, dividends and others.

REMARKS EBITDA ENERGY ANNEXES ESG

NETWORKS WASTE MARKET P&L CASHFLOW &

NFP FINANCIALS CLOSING

1H 2021 ESG KPIs' enhancements

NETWORKS WASTE MARKET P&L CASHFLOW &

Positive results led by organic growth NETWORKS

• • Investments in line with BP assumptions
• • Districtization activities continue reaching 57% of the grid
• Structural emerging costs and Covid emergency

Decrease in water withdrawals

(-9 liters/inhabitant/day)

OUTLOOK

Results in line with last year taking into account emerging costs and the absence of the extraordinary elements reported in 2H 2020

NFP FINANCIALS CLOSING REMARKS EBITDA ESG ENERGY ANNEXES

WASTE Full contribution from consolidation

• • Positive contribution of plastic and paper treatment
• • Higher PUN price favored the electricity sold
• • Increase in waste managed
• Higher costs in collection activities related to service level improvement
• Lower contribution from REI landfill. The extension capacity will be available from 2022

Sorted waste at 69.1%

5

ENERGY Hydro and energy efficiency led the growth

+ Higher hydro prices

• • Increase in heat volumes distributed due to climate and networks expansion
• • Higher clean spark spread
• • Increase in electricity volumes
• • Higher rebuilding activities
• Lower MSD (-10m€)
• Lower heat spark spread due to energy scenario dynamic
• Reduction of Group carbon intensity, now at 312 gCO2/kWh

OUTLOOK

Favourable scenario still in place in the 2H where is expected the extra contribution from hydro management (volumes, prices and GC). Positive trend of energy efficiency confirmed

NETWORKS WASTE MARKET P&L CASHFLOW &

NFP FINANCIALS CLOSING REMARKS EBITDA ESG ENERGY ANNEXES

MARKET Higher gas margins offset by the contraction in electricity

• • Lower costs of procurement and use of gas stored in 2020, led to margin growth (19m€)
• • Customer base growth, +30k retail & SMEs clients
• • Iren Plus positive contribution
• • Award of ² clusters of SMEs clients
• Lower margins in electricity due to the PUN price ramp up
• Structural emerging costs (8m€) related to digitalization and commercial activities
• Over 400 GWh of green energy sold to end clients

7

Profit and loss 1H 2021

	1H '20	1H '21	Δ	Δ%
EBITDA	473.3	517.5	44.2	9.3%
Depreciations	-206.5	-228.5
Provisions to bad debt	-42.5	-33.7
Other provisions and write-downs	7.6	-4.2
EBIT	231.9	251.1	19.2	8.3%
Financial charges	-32.4	-32.8
Companies cons with e.m.	5.0	6.2
Other financial	2.0	18.2
EBT	206.5	242.7	36.2	17.5%
Taxes	-60.9	-34.2
Minorities	-12.9	-15.3
Group net profit	132.7	193.2	60.5	45.6%

• Higher depreciations due to capital intensive capex and the I.Blu and Unieco consolidations
• Lower provisions to bad debt related to Covid emergency (10m€ vs. 25m€ last year)
• Absence of 16m€ of a provision fund release in 2020
• Optimization of Unieco debt for 13m€
• Lower cost of debt offset by the increase of gross debt
• Extraordinary tax rate reduction, now at 14%, due to the realignment of tax and statutory asset values

Cash-flow and NFP 1H 2021

• The cash flow generation offset the high level of capex and the dividend cash out
• Consolidation concerned mainly the 20% acquisition of Futura and the related debt
• Positive contribution from derivatives mainly related to commodities

9

NETWORKS WASTE MARKET P&L CASHFLOW &

97% of gross debt at fixed interest rate

• Average long-term debt duration of about 5.7 years vs 5.4 years in 1H 2020
• Reduction in the average cost of debt (1.7% vs. 2.2% in 1H 2020)
• 59% of the Iren total debt is composed of green and assimilated instruments

REMARKS EBITDA ESG ENERGY ANNEXES

NETWORKS WASTE MARKET P&L CASHFLOW &

MAIN 1H 2021 TAKEAWAYS

• Strong contribution from the last consolidated companies in the Waste BU (I.Blu and Unieco)
• Growth in the whole energy value chain supported by a recovery in energy scenario
• Negative Covid impact on Ebitda of -6m€

2021 NEXT MONTHS EXPECTATIONS

• FY 2021 growth mainly driven by Energy activities at larger extent and by Waste activities
• Extra-contribution on 4Q coming from hydroelectric volumes shifted from last year to 2021
• Energy scenario expected more supportive than some months ago
• Confirm limited COVID impacts on:
• Ebitda not more than 10m€
• Net working capital around 40m€ (from 60m€ in FY2020)
• Credit losses of 10m€ as already reported in 1H

In light of the previous elements, we improve our guidance on FY 2021:

GUIDANCE ON FY 2021

• Ebitda: ̴990m€
• Net profit: ̴290m€
• NFP/Ebitda: 3.3x
• Capex: 800m€

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The new BP will be unveiled in November 1H 2021

Reinforcement of the Group's sustainable development path with the extension of the time horizon to 10 years

• Strong focus on circular economy, water resources and resilient cities and greater emphasis on energy transition and renewable sources development
• Acceleration on carbon footprint reduction, in line with the most challenging decarbonization and climate change mitigation scenarios
• Support from PNRR on projects compatible with our strategy

The Group's business model, predominantly regulated, allows an intensification of investments while maintaining the investment grade

ANNEXES

1H 2021 Business units' results

NETWORKS
m€	1H '20	1H '21	Δ	Δ%
Revenues	490	442	-48	-10%
Ebitda	179	190	11	6%
Electricity	37	40	3	8%
Gas	41	46	5	11%
Water	101	104	3	3%
Ebit	81	94	13	15%
Gross Capex	117	114	-3	-2%

m€	1H '20	1H '21	Δ	Δ%
Revenues	551	715	164	30%
Ebitda	127	134	7	5%
Hydro&Renewables	31	35	4	13%
Thermo/Coge, DH	92	91	-1	-1%
Energy efficiency	4	8	4	100%
Ebit	73	65	-8	-12%
Gross Capex	66	68	2	4%

		WASTE
m€	1H '20	1H '21	Δ	Δ%
Revenues	350	436	86	25%
Ebitda	80	99	19	24%
Collection	32	30	-2	-6%
Treatment & disposal	48	69	21	44%
Ebit	32	44	12	39%
Gross Capex	28	47	19	69%

ENERGY						MARKET
1H '20	1H '21	Δ	Δ%	m€	1H '20	1H '21	Δ	Δ%
				Revenues	1,073	1,159	86	8%
				Ebitda	86	93	7	8%
				Electricity	31	21	-10	-31%
				Gas&Heat	55	72	17	31%
				Ebit	45	48	3	7%
				Gross Capex	23	32	9	41%

15

1H 2021 Scenario

NETWORKS WASTE MARKET P&L CASHFLOW & REMARKS EBITDA ESG ENERGY ANNEXES

NFP FINANCIALS CLOSING

	1H '20	1H '21	Δ%
Gas Demand (bcm)	35.8	39.8	11.1%
TTF €/000 scm	80.0	229.0	187.0%
PSV €/000 scm	97.0	231.0	137.9%
Energy Demand (Twh)	119.6	127.5	6.6%
PUN (€/Mwh)	32.2	66.9	107.6%
CO2 €/Ton	22.0	43.8	98.9%
Green Cert. Hydro (€/Mwh)	99.1	109.4	10.4%
TEE (€/TEE)	265	260	-1.9%

p Shareholders' equity
inancial Position :
al Funds

	FY '20	1H '21
Net fixed assets	6,582	6,626
Net Working Capital	42	23
Funds	(657)	(633)
Other assets and liabilities	(254)	(214)
Net invested capital	5,713	5,802
Group Shareholders' equity	2,763	2,843
Net Financial Position	2,950	2,959
Total Funds	5,713	5,802

NETWORKS WASTE MARKET P&L CASHFLOW &

1H 2021 Balance sheet

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.

NETWORKS WASTE MARKET P&L CASHFLOW &