REN-Redes Energeticas Nacionais

Investor Presentation • May 4, 2018

REN – REDES ENERGÉTICAS NACIONAIS, S.G.P.S., S.A. | Sociedade Aberta Head office: Avenida dos Estados Unidos da América, n.º 55, Lisboa Share capital: 667,191,262 Euros Commercial Registry Office of Lisbon: registry and tax sole number: 503 264 032

COMMUNICATION

Pursuant to and for the purposes of article 17 of Regulation (EU) number 596/2014 of the European Parliament and of the Council of 16 April 2014, of article 248 - A of the Portuguese Securities Code and other applicable regulation, REN – Redes Energéticas Nacionais, S.G.P.S., S.A. hereby informs and reproduces as an annex the presentation to be disclosed today in the event "Capital Markets Day" of REN, which includes the strategic update 2018 - 2021 (English version).

Lisbon, 4 May 2018 End of communication

10h30	A successful journey Strategic guidelines	RODRIGO COSTA CHIEF EXECUTIVE OFFICER
	Operational excellence Core business consolidation	JOÃO FARIA CONCEIÇÃO CHIEF OPERATIONS OFFICER
	Disciplined growth Solid financials Robust business plan	GONÇALO MORAIS SOARES CHIEF FINANCIAL OFFICER
	Closing remarks	RODRIGO COSTA CHIEF EXECUTIVE OFFICER
12h00	Q&A

12h30 Lunch

2014 Today

A domestic-only player

A transmission-only player

With a distribution business (Portgás)

Investment grade ratings

Sub investment grade ratings

Solid shareholder base

Solid base with higher liquidity after €250 Mn capital increase (39% free float)

Focused on domestic but with international presence (Electrogas, Chile)

Maintaining operational excellence and efficiency, while committing to public service

Grid investments: electricity and natural gas

4

Underground gas storage

Electrogas Portgás

Supporting Portugal's energy policy and backbone

~€560 Mn CAPEX in 2015-17

86% fulfilled efficiency criteria

0.22 min/year

average interruption time¹ in 2015-17

Delivering on growth

Underground gas storage,

becoming the only player in Portugal €70 Mn

2017

First international investment with 42.5% of Electrogas €169 Mn

2017

Expansion to distribution network with Portgás

€530 Mn

, resulting in a strong credit profile Marked by highly disciplined debt management

Financial costs (€ Mn) Investment grade since 2015 Portuguese company 1st 2014 131 2017 73

With a robust financial performance

Delivering value to the shareholders

1 National Grid, REE, Elia, Terna, Fluxys, SNAM and Enagás

Enabling a renewable future

2016

4 consecutive days 100% renewable

2018 Two 70-hour periods 100% renewable

Production in March exceeded consumption of mainland Portugal

With best-in-class corporate governance and a stable shareholder base¹

UNPARALLELED RELEVANCE ON THE NATIONAL SCENE

Responsible for high-quality energy transmission and distribution

>€3.0 Bn invested in energy infrastructure in Portugal, 2006-17

Top quartile in quality of service and efficiency among European TSOs

Total tax contribution of ~€750 Mn in 2006-17

Consistent reduction in weight on final consumer tariff¹

Top quartile in sustainability performance² vs. peers

1 >1pp reduction from 2014 to 2018 in electricity tariff, including transport and system management 2 Environmental impact, social impact, and governance model (Oekom Corporate Rating 2017)

13

Operational excellence and core business consolidation

Disciplined growth

Solid financials

Digital path ENABLERS

Evolution of skills and culture

14

ENABLERS

Digital path

Further effort on digital integration across the company

• Asset management: Condition assessment and predictive analytics based on extended monitoring and automation
• Operations: Use of digital tools by field workforce to facilitate productivity through real-time interconnection
• Support: Increased automation in support functions, improving productivity
• Cibersecurity: Consolidate company-wide initiatives and optimize current set-up especially in OT systems
• System management: Renewables integration (with growing support of data analytics) and optimization towards energy savings
• Network planning: Infrastructure design and development with positive environment impact

Evolution of skills and culture

Diversity, Development and Collaboration

• Cross-functional teams to further promote collaboration, accelerate improvements, decision-making and project delivery
• Focused talent management strategy to identify, develop and retain talent
• Development of workforce with focus on increasing the gender and academic background diversity
• Promotion of intercompany mobility and professional development opportunities

Operational excellence and core business consolidation

Disciplined growth

Solid financials

Digital path ENABLERS

Evolution of skills and culture

16

OPERATIONAL EXCELLENCE

Experience

managing systems with high penetration of renewables

Service level above average of European TSOs¹

Maintain top-industry SAFETY and QUALITY of service

0.22 min/year

average interruption time in 2015-17²

Full response

of gas infrastructure in 2017 (record consumption)

Resilient performance

in extremely adverse conditions (2017 devastating forest fires)

SOURCE: ITOMS 2017

International peers

CORE BUSINESS CONSOLIDATION

Limited weight on consumer tariff

ELECTRICITY GAS <6%¹ <10%¹

Achieved regulatory efficiency targets

Support REGULATORY and ENERGY POLICY agenda

86% CAPEX within efficiency targets

4% efficiency per year in OPEX

~€20 Mn

incentives per year for end-of-life extension

Partner for the national energy policy agenda

CORE BUSINESS CONSOLIDATION

21

Further boost in renewables

Interconnection to Morocco

Underground cables in Lisbon and Oporto

Other gas distribution companies in Portugal

2nd largest gas distribution company in Portugal (km)

CORE BUSINESS CONSOLIDATION

Consolidate PORTGÁS Leverage

Growth potential from lower penetration (penetration rate)

€460 Mn

Ongoing systems integration according to plan

CORE BUSINESS CONSOLIDATION

Directimpact

on operations, e.g., solar photovoltaic forecasting tool

Partnership

with State Grid for R&D

Leverage REN's DNA of INNOVATION

Recognition

of the scientific community (publications and conferences)

Proprietary tools

developed, including in partnership with universities

ongoing technological development and upcoming pilot

26

DISCIPLINED GROWTH

Inorganic investments (€ Mn)

DISCIPLINED GROWTH

Keep growth path in light of market opportunities and leveraging strong track record

Regulated assets/ long-term contracts

Attractive risk-return profile

Leveraging REN's know-how

Pace set to maintain credit rating

DISCIPLINED GROWTH

Clear focus on Portugal while also considering further incremental opportunities/ investments in LatAm and Regulated Assets

Potential upside on domestic CAPEX always the top priority for REN

Operational excellence and core business consolidation

Disciplined growth

Solid financials

Digital path ENABLERS

Evolution of skills and culture

30

Debt management strategy

Allows for flexibility to grow while ensuring performance

SOLID FINANCIALS

Debt management strategy – Optimize cost of debt

REN has been significantly reducing its cost of debt

REN has been successfully protecting its net income by aligning debt management with its regulated revenues profile

Average RAB. Historical costs(€ Bn)

Expected lower domestic organic CAPEX enables additional investment capacity

2.2-2.3

€400 Mn up to

0.9-1.0

0.49

3.6-3.7

2014 2017 2018-21

	Domestic organic CAPEX (€ Mn)	~190	120-145
Performance	EBITDA (€ Mn)	484	475-500
going forward will remain strong	Net income (€ Mn)	114	110-115
	Free Cash Flow before inorganic investment and dividends1 (€ Mn)	~135	170-175
		2015-17 yearly average	2018-21 per year

credit metrics consistent with investment

39

SUSTAINABLE DIVIDEND POLICY

Dividend (€/share)

41

REN is now at an intermediate point of a path that started in 2015

2015-17 cycle was marked by excellence in delivering core business and strong investment

REN was able to initiate a move to inorganic growth anticipating the impact from a maturing grid while tightly managing funding costs

In 2018-21, REN will keep its focus on delivering energy in Portugal, also investing up to €400 Mn in attractive opportunitiesin line with its DNA (skills and risk profile)

REN will continue its commitment to investment grade rating and attractive shareholder returns as well as the highest sustainability standards

MUITO OBRIGADO