Naturgy Energy Group S.A.

Investor Presentation • Feb 4, 2021

FY20 Results 4 February 2021

Recent events

Recent events

Scenario

Electricity and gas demand evolution during 2020

Electricity Gas

Energy demand strongly impacted by COVID-19

Energy markets evolution during 2020 (avg. FY20 vs. FY19)

Structural challenges in 2020 and ongoing volatility in 2021

FX evolution during 2020 (avg. FY20 vs. FY19)

Widespread and unprecedented drop of commodity prices Ongoing FX weakness

Consolidated results

New reporting structure and perimeter changes

Networks Spain LatAm	CGE Electricidad classified as held for sale following disposal agreement with China State Grid
Energy management	Energy management composed of i) markets and procurement, ii) international LNG, iii) pipelines (EMPL), iv) Spain thermal generation and v) international thermal generation Markets and procurement includes all gas procurement and internal and external sales (except from International LNG and gas sales to end customers <500GWh in Spain)
Renewables	Includes all renewable generation (including hydro) previously reported as part of European power generation and International power generation
Supply	Includes all power sales to end customers in Spain Includes gas sourcing from markets and procurement unit and sales to end customers < 500GWh in Spain

Reporting focused on energy transition and aligned with new organizational structure

Key highlights

2020 EBITDA guidance met at constant perimeter

Ordinary EBITDA evolution by key drivers (€m)

Excluding CGE Electricidad

Negative headwinds partly offset with opex efficiencies and gas contracts renegotiations

Asset valuation review (€m)

Non cash €1,363m asset valuation review driven by scenario

CGE Electricidad disposal agreement

Summary

• Purchase price of €2,570m (equity value) fixed in Euros and payable in cash upon completion. The transaction implies an enterprise value (100%) of €4,312m
• The transaction is expected to generate pre-tax capital gains of approximately €400m on pre-tax cash proceeds of €2,570m to be cashed in 2021

ND/LTM EBITDA proforma of the transaction would stand at 3.0x ( vs. 3.7x ordinary) as of December 2020

Consolidated impacts (€m)

Substantial deleveraging with limited earnings dilution

EBITDA evolution by business unit (€m)

Excluding CGE Electricidad

Performance impacted by multiple headwinds in energy scenario and FX

Net Income evolution (€m)

Results impacted by weaker operations and impairment

Cash flow and net debt evolution (€m)

Cash flow			Net debt
	FY20	vs. FY19
Ordinary EBITDA	3,714	-15%
Non-ordinary items	(265)
EBITDA	3,449	-19%
Taxes	(214)		15,268
Net interest cost	(538)
Other non-cash items	(53)
Funds from operations	2,644	-24%
Change in working capital	788
Cash flow from operations	3,432	-15%
Capex1	(1,228)
Dividends to minorities	(443)
Divestments & Other	(135)		Net debt
Free cash flow	1,626	-17%	FY19

Lower net debt driven by perimeter changes and FX

Notes: 1. Net of cessions and contributions 2. Does not include cost from IFRS 16 debt

1. Mainly related to CGE Electricidad transfer to held for sale and debt deconsolidation

Shareholder remuneration FY 2020

DPS (€/sh.)

Final dividend against 2020 to be paid in 1Q 2021

Results by business unit

1. Results by business unit

Networks Spain

EBITDA evolution by business line (€m) Highlights

Ordinary EBITDA evolution by key drivers (€m)

• Gas networks: lower sales as result of mild weather and economic slowdown partially compensated by business optimization
• Electricity networks: lower financial remuneration due to new regulatory period and lower fees on meters interventions
• Overall impacted by COVID-19

€321m capex, of which ~85% remunerated

Resilient results despite scenario and changes in regulation

Networks LatAm

EBITDA evolution by business line (€m) Highlights

EBITDA FY19 Nonordinary items Ordinary EBITDA FY19 Chile gas Brazil gas Mexico gas Panama elec. Argentina Ordinary EBITDA FY20 Nonordinary items EBITDA FY20

Ordinary EBITDA evolution by key drivers (€m)

• Chile gas: tariff indexation and efficiencies offset by lower demand
• Brazil gas: tariff indexation, efficiencies and lower energy losses offset by FX and demand
• Mexico gas: higher margins and tariff updates not sufficient to compensate for FX and sales decrease
• Panama electricity: lower demand partially compensated by efficiencies
• Argentina: tariff updates offset by lower gas sales and FX

€342m capex, of which ~80% remunerated

Results impacted by lower demand and FX

Energy management

EBITDA evolution by business line (€m) Highlights

EBITDA	Non	Ordinary	Markets	Int.	Pipelines	Spain	Int.	Ordinary	Non	EBITDA
FY19	ordinary	EBITDA	& procur.	LNG	(EMPL)	thermal	thermal	EBITDA	ordinary	FY20
	items	FY19				gen.	gen.	FY20	items

Ordinary EBITDA evolution by key drivers (€m)

• Markets and procurement: loss of gas supply cost competitiveness and negative contribution of volume sales to avoid unrecoverable take or pay requirements
• International LNG: depressed LNG scenario resulting in negative margins partially compensated via financial hedging and cancellation of some cargoes
• Pipelines (EMPL): step-down of EMPL capacity
• Spain thermal generation: higher margins driven by lower CCGTs generation costs and additional efficiencies
• International thermal generation: lower merchant margins in Dominican Republic and lower volumes in Mexico partially compensated by efficiencies and higher margins in PPA sales

€93m capex, of which ~15% remunerated

Depressed gas scenario throughout 2020

Renewables

EBITDA evolution by business line (€m) Highlights

Ordinary EBITDA evolution by key drivers (€m) developments

• Spain: increased renewable and hydro generation in Spain, partially offset by lower pool prices
• Australia: progressing in new wind farms developments to double existing renewable capacity
• LatAm: higher wind resource and prices in Mexico offset by lower contribution from Brazil solar
• USA: preparing the entrance in 2021 through proprietary

€429m capex, of which ~95% remunerated

New renewable capacity gradually increasing its contribution

Supply

EBITDA evolution by business line (€m) Highlights

Ordinary EBITDA evolution by key drivers (€m)

• Power supply: lower demand partially compensated by lower pool prices and operational improvements
• Gas supply: continued margin pressure and lower sales in residential and SMEs segment

Lower demand and continued pressure on gas margins

Summary 2020 and outlook 2021

Summary 2020

Energy demand, prices and LatAm currencies impacted by COVID-19

Structural challenges moving forward Gas contract renegotiations

Acceleration in efficiencies as key lever to offset scenario Non cash €1,363m asset valuation review driven by scenario

CGE Electricidad disposal agreement

2020 EBITDA guidance met at constant perimeter

Outlook 2021

Networks Spain	Higher volumes and efficiencies in gas New regulatory framework (gas distribution)
	Electricity distribution growth driven by capex and efficiencies
	Demand recovery levels unlikely until 2022
Networks LatAm	Ongoing FX weakness only partly compensated with tariff updates
	Deconsolidation of CGE Electricidad from 2020
	Signs of recovery in scenario but limited upside in gas sold into Europe
Energy management	Ongoing challenges in International LNG
	Expiry of EMPL concession in Oct 2021
	Growing renewable capacity to gradually increase contribution to results
Renewables	Spain, Australia and USA main markets for future development
	Greenfield development of Solar PV/batteries projects in USA as per recent acquisition
Supply	Improvement mainly supported by mild recovery and structural changes
	Execution of asset rotation strategy including closing of:
Assets	• UFG
	• CGE Electricidad

Appendix

Appendix: 1. Alternative Performance Metrics

Alternative Performance Metrics (i/ii)

Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as Alternative Performance Metrics (APM), which are viewed as adjusted figures with respect to those presented in accordance with IFRS.

The chosenAPMs are useful for persons consulting the financial information as they allow an analysisof the financial performance, cash flows and financial situation of Naturgy, and a comparison with other companies. Below is a glossary of terms with the definition of the APMs. Generally, the APM terms are directly traceable to the relevant items of the consolidated balance sheet, consolidated income statement, consolidated statement of cash flows or Notes to the Financial Statements of Naturgy. To enhance the traceability, a reconciliation is presented of the calculated values.

Alternative performance		Reconciliation of values
metrics	Definition and terms	31 December 2020	31 December 2019	Relevance of use
Ebitda	Operating profit	Euros 3,449 million	Euros 4,252 million	Measure of earnings before interest, taxes, depreciation and amortization and provisions
Ordinary Ebitda	Ebitda - Non-ordinary items	Euros 3,714 million = 3,449+ 265	Euros 4,348 million = 4,252 + 96	Ebitda corrected of impacts like restructuring costs and other non ordinary items considered relevant for a better understanding of the underlying results of the Group.
Ordinary Net income	Attributable net income of the period - Non ordinary items	Euros 872 million = -347 + 1,219	Euros 1,378 million = 1,401 + 23	Attributable Net Income corrected of impacts like assets write-down, discontinued operations, restructuring costs and other non-ordinary items considered relevant for a better understanding of the underlying results of the Group.
Investments (CAPEX)	Investments in intangible assets + Investments in property, plant & equipment	Euros 1,279 million = 187 + 1,092	Euros 1,685 million = 222 + 1,463	Realized investments in property, plant & equipment and intangible assets.
Net Investments	CAPEX - Other proceeds/(payments) of investments activities	Euros 1,228 million = 1,279 - 51	Euros 1,607 million = 1,685 – 78	Total investments net of the cash received from divestments and other investing receipts.
Gross financial debt	Non-current financial liabilities + "Current financial liabilities"	Euros 17,539 million = 14,968 + 2,571	Euros 17,987 million = 15,701 + 2,286	Current and non-current financial debt

Alternative Performance Metrics (ii/ii)

Alternative performance		Reconciliation of values
metrics	Definition and terms	31 December 2020	31 December 2019	Relevance of use
Net financial debt	Gross financial debt - "Cash and cash equivalents" - "Derivative financial assets"	Euros 13,612 million = 17,539 – 3,927 - 0	Euros 15,268 million = 17,987 – 2,685 – 34	Current and non-current financial debt less cash and cash equivalents and derivative financial assets
Leverage (%)	Net financial debt / (Net financial debt + "Net equity")	54.7% = 13,612 / (13,612+ 11,265)	52.2% = 15,268 / (15,268 + 13,976)	The ratio of external funds over total funds
Cost of net financial debt	Cost of financial debt - "Interest revenue"	Euros 498 million = 515 - 17	Euros 547 million = 570 - 23	Amount of expense relative to the cost of financial debt less interest revenue
Ebitda/Cost of net financial debt	Ebitda / Cost of net financial debt	6.9x = 3,449 / 498	7.8x = 4,252 / 547	Ratio between Ebitda and net financial debt
Net financial debt/LTM Ebitda Net financial debt / Last twelve months Ebitda		3.9x = 13,612 / 3,449	3.6x = 15,268/ 4,252	Ratio between net financial debt and Ebitda
Free Cash Flow after minorities	Free Cash Flow + Dividends and other + Acquisitions of treasury shares + Inorganic investments payments	Euros 1,626 million = 79 + 1,359 + 184 + 4	Euros 1,958 million = 238 + 1,307 + 405 + 8	Cash flow generated by the Company available to pay to the shareholders (dividends or treasury shares), the payment of inorganic investments and debt payments.
Net Free Cash Flow	Cash flow generated from operating activities + Cash flows from investing activities – Other GC divestment receipts + Cash flow generated from financing activities - Receipts and payments on financial liability instruments	Euros 79 million = 3,432 – 1,142 – 190 – 388 – 1,633	Euros 238 million = 4,021 – 1,456 – 1,599 – 728	Cash flow generated by the Company available to pay the debt.

ESG Metrics

ESG metrics			FY19	Change	Comments
Health and safety
Accidents with lost time (1) LT Frequency rate (2)	units units	4 0.04	14 0.12	-71.4% -66.7%	Significant improvement linked to he implementation of the Plan Naturgy 2019, as well as the impact from remote work due to Covid-19 crisis Reflects the reduction in accidents, although slightly adjusted by a lower number of working hours, following workforce reduction
Environment
GHG Emissions Emission factor	M tCO2 e t CO2/GWh	14.3 297	15.4 301	-7.1% -1.3%	Higher renewable production in the period
Emissions-free installed capacity	%	32.9	30.0	9.7%	New renewable capacity coming into operation in Spain, as well as the shutdown of the coal capacity
Emissions-free net production	%	32.4	27.0	20.0%	Higher wind and hydro production in Spain
Interest in people
Number of employees	persons	9,335	10,156	-8.1%	Perimeter changes and workforce optimization
Training hours per employee	hours	26.6	25.2	5.6%	Ratio increase shows growing relevance of on-line training, as well as the implementation during the period of specific training dedicated to facilitate the adaptation to post-COVID situation
Women representation	%	32.9	32.4	1.5%	Commitment for diversity and gender equality policies
Society and integrity
Economic value distributed	m€	16,235	21,533	-24.6%	Affected by lower purchases and external services due to optimization efforts
Notifications received by the ethics committee	units	80	149	-46.3%	Improved oversight and accountability

Disclaimer

This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared forinformation purposes only.

This communication contains forward-looking information and statements about Naturgy. Such information can include financial projections and estimates, statements regarding plans, objectives and expectations with respect to future operations, capital expenditures or strategy.

Naturgy cautions that forward-looking information are subject to various risks and uncertainties, difficult to predict and generally beyond the control of Naturgy. These risks and uncertainties include those identified in the documents containing more comprehensive information filed by Naturgy and their subsidiaries before the different supervisory authorities of the securities markets in which their secuirities are listed and, in particular, the Spanish National Securities Market Commission.

Except as required by applicable law, Naturgy does not undertake any obligation to publicly update or revise any forward-looking information and statements, whether as a result of new information,future events or otherwise.

This document includes certain alternative performance measures ("APMs"), as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority in October 2015. For further information about this matter please refer to this presentation and to the corporate website (www.naturgy.com).

This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of the restated text of the Securities Market Law approved by Royal Legislative Decree 4/2015, of 23 October and their implementing regulations. In addition, this document does not constitute an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, in any otherjurisdiction.

The information and any opinions or statements made in this document have not been verified by independent third parties; therefore, no warranty is made as to the impartiality, accuracy, completeness or correctness of the information or the opinions or statements expressed herein.

This presentation is property of Naturgy Energy Group, S.A. Both its content and design are for the exclusive use of its personnel.

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