Snam — Investor Presentation 2023

Jul 27, 2023

energy to inspire the world

1H 2023 Consolidated Results

July 27th, 2023

1H 2023 key highlights

GAS MARKET

• 1H 2023 Italian gas demand stood at 32.7 bcm (-16.4% YoY(1))
• Average TTF at €44/MWh in H1 2023 (-55% yoy) with high volatility

• Decline in volumes from North offset by LNG (+20% yoy) and lower demand (-16%)

• Fully amortized assets incentives approved for 2023-24

• 2023/24 transport and LNG tariffs approved
• • Integrated national energy and climate plan (PNIEC) confirms the relevance of security of supply, the role of gas and green gases
  • Maximization of biomethane: 6bcm target by 2030
  • Relevance of H2 also via import
  • CCS opportunity to reach decarbonization targets

1. Non weather adjusted. 2. Net profit Reported at €698m (+1.7% y-o-y).

FINANCIAL HIGHLIGHTS

• €1,221m Adj. EBITDA (+5.7% yoy)
• €621m Adj. Net profit (-3.9% yoy) (2)
• €734m of Investments (-23% yoy)
• €14.6 bn Net Debt (€11.9 bn in FY 2022)
• S&P rating BBB+ affirmed in June 2023

ASSOCIATES' PORTFOLIO REGULATION AND POLICY

• De Nora:
  • Capital gain on ABB
  • Successful IPO of Nucera
• Desfa wacc updated for next regulatory period (2024-27) at 7.85%

to inspire the world

1H 2023 key achievements • Golar Tundra started operations in July in Piombino • Storage level ca 87%

SECURITY OF SUPPLY ENERGY TRANSITION

-

• Adriatic Line recognized as strategic infrastructure

• Several projects submitted for the allocation of Repower EU funds

• Political support to South H2 Corridor reiterated

• H2 readiness: 1,513 km of pipelines certified by RINA (+750 km vs FY 2022) • dCarbonX obtained Bains gas storage licence • De Nora Italy Hydrogen Technologies signed €32m
• public funding to finance the Gigafactory Project • UNI/PdR 125:2022 for gender equality • Climate advocacy position and Tax transparency

SUSTAINABILITY

• 37% of Capex Taxonomy aligned and 56% of Capex SDGs aligned
• Sustainable Finance at ca 75%
• Methane emissions -32% vs H1 2022
• Inclusion in CDP "A List"
• Employee engagement index at 84%
• Certifications:

  - UNI ISO 37001:2016 for anti-corruption system

• framework published • Snaminnova Open Innovation program • Investors engagement post AGM

Strategic Plan tracking

Strategic Plan tracking
Transport	• Output based incentives on fully depreciated assets approved • Adriatic Line approved, eligible for RePower EU funds and deemed strategic infrastructure • Progressing on replacements, H2 readiness roadmap and leak detection and repair program • South H2 corridor developments, project filed for PCI
Storage	• Reverse flow and flexibility services offered to the system • Progressing on permitting on over-pressure on some storage facilities and performance upgrade
LNG	• Piombino FSRU in operating on time and authorization for relocation after 3Y filed • Preliminary works for Ravenna Terminal started • Panigaglia truckloading project approved
Energy Transition	• Biomethane: execution of the acquisition pipeline and successful auctions for assets upgrade • Decarbonization projects: • H2: IdrogeMo (Modena H2 valley) • CCS: progressing on pilot CCS project in Ravenna
Platform	• Energy efficiency: strong delivery on deep renovation projects while repositioning the portfolio

Gas flows 1H 2023

1H 2023 gas demand and flows

Italian gas demand 1H 2023

Gas storage volumes evolution

bcm

energy

Decrease in supply risk for next winter but gas market remains tight

Adj. EBITDA analysis

Infrastructure as it is now focused on the construction of mid-stream infrastructure. The related H1 2022 figures have been restated accordingly.

Adj. Net Income analysis

€m

International associates contribution to H1 2023 Adjusted Net Income

	Yoy change in net profit contribution (€m)
• Acquisition completed in Jan 2023 • Strategic import route for Italy: approx. 11 bcm in H1 2023 (first import source)	+€23 m
• Strong performance driven by higher volumes (LNG imports and exports to Bulgaria) and auction premia • Lower OpEx thanks to passthrough recognition of energy costs from July '22	+€15 m
• Healthy performance working beyond contractual capacity • 1 st phase of the market test triggering a +1.2 bcm/y expansion from 2026 • 2nd binding phase for larger expansion expected by year end/beginning of next year	+€3 m
• Increase of revenues mainly due to higher bookings between Spain and France	+€3 m
• Business performance in line with H1 2022	-€1 m
• High M/L term booking visibility • Operating performance remained strong, but profit cap mechanism kicked in and was stricter than last year	-€14 m
• TAG results affected by the expiry of majority of long-term contracts and lower volumes to Italy partly offset by higher reverse flow bookings • Yearly auctions confirmed relevant role of TAG reverse flow (booked for approx. 90/95% until 2025 and 50% for 2026) with significant auction premia • GCA business performance in line with previous year	-€49 m
• Business performance in line with previous year	-
	-€20m

Cash flow

Net Debt evolution and financial structure

Net debt evolution (€bn)

Maturities profile (bn€, amount drawn) ¹

Average gross cost of debt Fixed /

energy

to inspire the world

Closing remarks

Solid results in a volatile environment

FY 2023 Guidance confirmed

Stronger gas system to face winter 2023/2024 need to continue building a more resilient energy system

EU and Italian policy support

Sound progress and delivery on key strategic milestone

Income Statement

€ mn	1H 2022	1H 2023	Change	Change %
Revenues	1,680	2,094	414	24.6%
Operating expenses	(525)	(873)	(348)	66.3%
EBITDA ADJUSTED	1,155	1,221	66	5.7%
Depreciation & amortisation	(427)	(455)	(28)	6.6%
EBIT ADJUSTED	728	766	38	5.2%
Net interest income (expenses)	(51)	(87)	(36)	70.6%
Net income from associates	176	159	(17)	(9.7%)
EBT ADJUSTED	853	838	(15)	(1.8%)
Income taxes	(204)	(205)	(1)	0.5%
NET PROFIT BEFORE THIRD PARTIES	649	633	(16)	(2.5%)
Third Parties Net Profit	(3)	(12)	(9)	-
NET PROFIT ADJUSTED	646	621	(25)	(3.9%)
EBITDA REPORTED	1,139	1,213	74	6.5%
EBIT REPORTED	707	758	51	7.2%
NET PROFIT REPORTED	686	698	12	1.7%

Revenues

€ mn	1H 2022	1H 2023	Change	Change %
Regulated revenues	1,338	1,529	191	14.3%
Transport	1,076	1,239	163	15.1%
Storage	249	253	4	1.6%
LNG	13	37	24	-
Non regulated revenues(1)	66	44	(22)	(33.3%)
Total Gas Infrastructure Businesses revenues	1,404	1,573	169	12.0%
Energy Transition Businesses revenues(1)	276	521	245	88.8%
TOTAL REVENUES	1,680	2,094	414	24.6%

Operating Costs

€ mn	1H 2022	1H 2023	Change	Change %
Gas Infrastructure Businesses costs	268	397	129	48.1%
Variable costs	64	133	69	-
Fixed costs	146	148	2	1.4%
Other costs	58	116	58	-
Energy Transition Businesses costs (1)	257	476	219	85.2%
TOTAL COSTS	525	873	348	66.3%

Balance Sheet

€ mn	2022	1H 2023	Change	Change %
Net invested capital	19,447	22,289	2,842	14.6%
Fixed capital	21,562	22,257	695	3.2%
Tangible fixed assets	18,222	18,483	261	1.4%
Intangible fixed assets	1,321	1,356	35	2.6%
Equity-accounted investments	2,313	2,953	640	27.7%
Other Financial assets	175	162	(13)	(7.4%)
Net payables for investments	(469)	(697)	(228)	48.6%
Net working capital	(2,155)	(26)	2,129	(98.8%)
Receivables	8,020	6,565	(1,455)	(18.1%)
Liabilities	(10,175)	(6,591)	3,584	(35.2%)
Provisions for employee benefits	(27)	(27)	-	-
Asset and liabilities held for sale	67	85	18	26.9%
Net financial debt	11,923	14,609	2,686	22.5%
Shareholders' equity	7,524	7,680	156	2.1%

Investments detailed by business

€mn	1H2022	1H2023
Transport(1)	434	471
Storage	60	91
LNG(2)	345	103
Energy Transition(3)	116	69
Total	955	734

-

37% taxonomy aligned and 56% SDGs aligned in H1 2023

ESG Scorecard – H1 2023

		H1 2023	Target 2023
1	% reduction of NG emissions vs 2015	-53%1
2	% NG recovered from maintenance activities (avg. last 5y)	58%	>40%
3 4	MWh of electricity production by photovoltaic plants Production of biomethane (Mscm)	435 6.7	>860 39
5	Reduction of CO2 equivalent from energy efficiency (Kton)	8	72
6	Cumulated number of installed CNG and LNG stations	85	100
7	Available LNG capacity for - SSLNG market (mln m3)	-	-2
8	% of vegetation restoration of the natural and semi-natural areas involved in the construction of	99.95%
	pipelines routing

2023	2023			2023	2023
	-48.6%	9	% participation in welfare initiative	34%	54%	17
58%	>40%	10	% employee engagement index	84%	70-75%	18	service quality
435	>860	11	IpFG (Combined Frequency and Severity Index)	0.40	last 3 years	19
6.7	39	15 12	% of women in executive and	23.14%	(0.55) 25%
8 85	72 100	13	middle-management roles % of women in succession planning	-*	26%	20
-	-2	14	% of local suppliers involved out of total contractualized suppliers	69%	50%
99.95%	>99%	15	Introduction of ESG criteria in scoring models (% of spending on assigned contracts)	27%	30%
		16	% employees hours devoted to Snam Foundation initiatives supporting local communities	1,227	4,800
		2.	1. Full-year forecast SSLNG capacity will be in place in 2025 as planned * Results not available in Q2

Environment					Social				Governance
	H1 2023	Target 2023			H1 2023	Target 2023			H1 2023	Target 2023
		-48.6%	9	% participation in welfare initiative	34%	54%	17	Average annual customers satisfaction rate in terms of	-*	8.1
	58%	>40%	10	% employee engagement index	84%	70-75%	18	service quality % of reliability levels on gas	99.9%	99.9%
	435	>860	11	IpFG (Combined Frequency	0.40	< minimum		supply
	6.7	39	15	and Severity Index) % of women in executive and		last 3 years (0.55) 25%	19	% of third parties on which reputational due diligence checks done	100%	100%
	8	72	13	middle-management roles % of women in succession	23.14%		20	% of ESG Financing on the total Committed Funding	75%	75%

²⁰ energy to inspire the world

Gas injection details

	Gas injection details
bcm	1H 2022	1H 2023	Change (bcm)	Change (%)
National production	1.5	1.4	-0.1	-7.2%
Pipelines	30.8	24.2	-6.7	-21.6%
Gela	1.2	1.4	0.2	15.6%
Mazara del Vallo	11.5	11.4	-0.2	-1.3%
Passo Gries	3.8	4.3	0.5	14.2%
Tarvisio	9.3	2.2	-7.1	-76.5%
Gorizia	0.0	0.0	0.0	12.7%
Melendugno	5.0	4.9	-0.1	-2.4%
LNG	6.8	8.1	1.3	19.9%
Adriatic LNG	4.3	4.3	0.0	0.3%
OLT	1.7	2.0	0.3	16.6%
Panigaglia	0.8	1.8	1.0	122.7%
Piombino	-	0.1	0.1	-
Total injection	39.1	33.7	-5.4	-13.9%

Gas injection details

Disclaimer

Luca Oglialoro, 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 accounting 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 Snam that are based on current expectations, estimates, forecasts, and projections about the industries in which Snam operates and the beliefs and assumptions of the management of Snam. 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 identify 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, Snam'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 Snam speak only as of the date they are made. Snam does not undertake to conditions or circumstances on which any such statement is based. Exchange Commission and with the Italian Stock Exchange.

update forward-looking statements to reflect any changes in Snam's expectations with regard thereto or any changes in events, The reader should, however, consult any further disclosures Snam may make in documents it files with the Italian Securities and

Detail of a cooling unit of a vaporizer. Snam regasification plant, Panigaglia, 2022.

Photograph by Carlo Valsecchi