Italgas — Investor Presentation 2021

Sep 16, 2021

DEPA INFRASTRUCTURE ACQUISITION

Milan 16.09.2021

DEPA Infrastructure ITALGAS PREFERRED BIDDER

ü Perfect fit with Italgas' core regulated business profile and long-term strategic vision, with significant return on investment expected

ü Key milestone driving geographical and regulatory diversification of the Group, in an already known region

ü Steep growth profile underpinning opportunity to leverage Italgas' core skills and capabilities

ü Deep effort and commitment at all levels of the management team and thorough scrutiny and diligence performed

TRANSACTION OVERVIEW

• ► Tender process held by current shareholders (HRADF1 and HELPE2)
• ► Italgas to acquire DEPA Infrastructure through an Italian BidCo, fully funded via intercompany debt
• ► Consideration of €733 mn for 100% of the equity of DEPA Infrastructure

DEPA signed an agreement for the acquisition of the remaining 49% of EDA Thess at pre-agreed conditions³ post closing

ENVISAGED TIMELINE TO CLOSING

4

Closing expected by year-end following regulatory approvals.

TRANSACTION RATIONALE

• § Perfect fit with Italgas' long-term strategic vision and regulated core business profile
• § Unique geographical and regulatory diversification move, and opportunity to serve the entire gas distribution market in Greece
• § Incumbent/unique operator in Greece for decades to come, thanks to long concession duration (up to 2043 + 20/30 years potential extension)
• § Established and transparent regulatory framework with attractive potential
• § Strong growth profile led by network development and growing gas penetration
• § Opportunity to transfer best in class digitization capabilities and know-how to support the energy and digital transition
• § Additional business opportunities provided by optic fiber and small-scale LNG development

DEPA Infrastructure IN A NUTSHELL

The three distribution network operators have exclusive rights in their respective regions. Combined, they cover the quasi-entirety of the Greek market.

Penetration rate is set to increase sharply.

¹ Thessaloniki – Thessalia Gas Distribution S.A. ² Attiki Natural Gas Distribution Single Member Company S.A. 3 Public Gas Distribution Networks S.A.

DEPA Infrastructure is the holding company owning the three gas distribution operators EDA Thess1, EDA Attikis2 and DEDA3 in Greece

1 Thessaloniki Thessaly regions

• Attiki region 2
• Other territories 3

GREEK ENERGY MARKET OVERVIEW

Natural gas demand is expected to grow sharply in Greece in the medium and long term, with natural gas continuing to win market share in the energy mix replacing high pollutant sources (lignite, fuel oil) to allow Greece to achieve and exceed EU decarbonization targets.

Sources: 1 Gas. Demand, base scenario of DESFA Development Study 2021-2030 excluding exports, 2 Greek National Energy and Climate Plan,;

• ► Transparent regulatory framework, with numerous similarities to the Italian system
• ► Long concession duration, allowing to implement Italgas' long-term strategic vision
• ► Downside protection through compensation mechanism for under-recoveries

Key features

• RAB-based framework regulated by the Regulatory Authority for Energy
• Tariffs reflect business plans presented by the company, including investments agreed with RAE
• Regulatory periods last 4 years

• 7.03% nominal return in 2021-22E, with an implied tax rate of 24%

• 1.5% additional return for investments meeting certain criteria
• Mechanism in place to compensate of any under / over recovery of required revenues

REGULATED REVENUES SCHEME

Key features

Unitary tariffs are set for the regulatory period for each distribution area:

• Based on the approved business plans and allowed returns, and inflated annually: the DSO is entitled to collect (required) revenues based on all investments and operational costs

9

• Taking into consideration estimated growth in redelivery points and volumes distributed

Achieved revenues are based on actual bills collection but there is a recoverable difference mechanism in place

REQUIRED REVENUES =	RAB X Reg. WACC	+ DEPRECIATION	+ OPEX	- ADDITIONAL REVENUES	± RECOVERABLE DIFFERENCE
	RAB includes capex planned in the year RAB is not inflated Regulated return set at 7.03% in nominal terms for 2021-22E	Calculated on fixed assets	Estimated through the regulatory period Opportunity of outperformance: no adjustments ex-post in case of outperformance	Planned revenues related to services to other companies or non-regulated services	Based on the difference between required revenues and actual revenues1 in the previous regulatory period

DEPA Infrastructure UNIQUE GROWTH POTENTIAL

Considering the current low penetration rate of natural gas in Greece, DEPA Infrastructure is set to achieve increasing coverage and penetration rates…

6,875 10,800 FY20 FY26E FY30E thousands 509 870 >1,050 FY20 FY26E FY30E Km ~9% CAGR 2020-26 ~8% CAGR 2020-26

Redelivery points

Km of Networks

1 0

11,500

DEPA Infrastructure UNIQUE GROWTH POTENTIAL

…leading to more than €1bn of capex as well as significant RAB growth.

Acquisition price of €733m implies a proportionate firm value of c€0.7bn1 and a premium on RAB 2021E2 just below 25%

1 1

Note: based on Italgas' data and estimates

1 As of FY2020, including net debt and other adjustments, excluding 49% stake in EDA Thess not owned by DEPA and related debt;

2 As reported in the Regulatory Authority for Energy's tariff approval decision, excluding 49% of EDA Thess not owned by DEPA.

DEPA Infrastructure MATERIAL AND GROWING EPS ACCRETION

DEPA Infrastructure strong growth potential, together with improved operational efficiency expected in the medium term, offer attractive regulated returns.

Material and growing EPS accretion. Positive for DPS given stated policy.

Italgas' commitment to solid investment grade rating is confirmed.

5-10% >10% FY22E-23E FY26E EPS accretion for Italgas2

1 2

185

FY20 FY26E FY30E

Note: based on Italgas' data and estimates

1 2020 pro forma data calculated as the sum of published annual reports of EDA Thess, EDA Attikis and and DEDA; 2026-30 Italgas estimates; 2 vs Italgas 2021-27 Strategic Plan

€m

FY20 FY26E FY30E

CLOSING REMARKS

ü Key milestone for the Group strategy

ü Positioning as leading industrial player in the European DSOs' chessboard

ü To implement digital transformation of the Greek network toward energy transition

ü High single-digit EPS accretion in the short term, low double-digit EPS accretion in the medium term and positive impact on DPS

Disclaimer

Italgas's Manager, Giovanni Mercante, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and information disclosures herewith set forth correspond to the company's evidence and accounting books and entries. This presentation contains forward-looking statements regarding future events and the future results of Italgas that are based on current expectations, estimates, forecasts, and projections about the industries in which Italgas operates and the beliefs and assumptions of the management of Italgas. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management are forward-looking in nature. Words such as 'expects', 'anticipates', 'targets', 'goals', 'projects', 'intends', 'plans', 'believes', 'seeks', 'estimates', variations of such words, and similar expressions are intended to identi1Q such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Italgas's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, political, economic and regulatory developments in Italy and internationally. Any forward-looking statements made by or on behalf of Italgas speak only as of the date they are made. Italgas does not undertake to update forwardlooking statements to reflect any changes in Italgas's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Italgas may make in documents it files with the Italian Securities and Exchange Commission and with the Italian Stock Exchange.