Terna — Earnings Release 2020

May 13, 2020

1Q2020 Consolidated Results

May 13th 2020

Agenda

Highlights	3
1Q20 Results	6
Annexes	16

Demand Evolution – Last 12 months Highlights (1/2)

1Q2020 data:

• National Demand at 77 TWh, o/w 33% covered by RES
• Net Total Production at 66 TWh
• ❖ Hydro increased by 19%

Strong contribution from hydro production

€mn	1Q 2020	1Q 2019	Δ vs 1Q19
Revenues	567	537	+6%
EBITDA	434	420	+3%
Group Net Income1	187	186	+0.3%
Capex	218	164	+32%

	1Q 2020	FY 2019
Net Debt	8,409	8,259

Results driven by ongoing capex acceleration

1Q 2020 results

Revenues

Revenues +6% YoY

Revenues Analysis 1Q 2020 results

€mn NON REGULATED AND INTERNATIONAL

Revenues increase in all business lines

1Q 2020 results Opex

Rising volumes effect on Opex increase

Opex Analysis 1Q 2020 results

Regulated Activities costs substantially in line Insourcing attività di O&M Rete FS

EBITDA 1Q 2020 results

Insourcing attività di O&M Rete FS Investment acceleration driving EBITDA growth

From EBITDA to Net Income 1Q 2020 results

Maintaining Net Income level vis-à-vis higher D&A

Capex 1Q 2020 results

Robust Capex acceleration Insourcing attività di O&M Rete FS

Cash Flow & Net Debt Evolution 1Q 2020 results

Operating cash flow generation to support capex plan

Note: figures may not add up due to rounding 1. Including Other Fixed Assets Changes 2. Including Cash Flow Hedge reserve and other

Net Debt Evolution & Financial Structure 1Q 2020 results

Duration 4.8 years

Maintaining a solid financial structure

Consolidated Income Statement¹ Annex

€ mn	1Q20	1Q19	Δmn	Δ%
Total Revenue	567	537	31	5.7%
Regulated Activities	517	500	17	3.3%
Transmission	475	464	11	2.3%
Dispatching	27	28	-1	-2.8%
2 Other	10	5	5	90.6%
IFRIC12	4	2	2	110.0%
Non Regulated Activities	44	33	11	33.4%
International Activities	7	4	3	66.7%
Total Costs	133	117	17	14.1%
Regulated Activities	98	95	4	3.9%
Labour Costs	57	57	-1	-1.4%
External Costs	34	34	1	1.8%
2 Other	3	1	2	121.4%
IFRIC12	4	2	2	110.0%
Non Regulated Activities	33	21	13	61.7%
International Activities	2	2	0	5.9%
EBITDA	434	420	14	3.3%
D&A	152	140	12	8.4%
EBIT	282	280	2	0.8%
Net Financial Charges	19	16	3	21.4%
Pre Tax Profit	263	264	-1	-0.5%
Taxes	76	78	-1	-1.9%
Tax Rate (%)	29.1%	29.5%	-0.4 pp
Total Net Income	186	186	0	0.2%
Minority Interest	0	0	0
Group Net Income	187	186	1	0.3%

Annex

Consolidated Balance Sheet

€ mn	Mar. 31,2020	Dic. 31,2019	Δmn
PP&E	13,922	13,864	58
Intangible Asset	541	543	-1
Financial Inv. and Other	473	502	-28
Total Fixed Assets	14,937	14,908	28
Net WC	-1,979	-2,208	229
Funds	-178	-210	32
Net Capital Invested	12,780	12,490	289
Financed by:
Consolidated Net Debt	8,409	8,259	150
Total Shareholder's Equity	4,371	4,232	139
Total	12,780	12,490	289
D/E Ratio	1.9	2.0
D/D+E Ratio	0.7	0.7
Number of Shares (mn)	2,010	2,010

Consolidated Cash Flow Annex

€ mn	1Q20	1Q19
Total Net Income	186	186
1 D&A	151	140
Net Change in Funds	-32	-29
Operating Cash Flow	306	297
2 Δ Working Capital & Other	-191	-110
Cash Flow from Operating Activities	115	187
Capital Expenditures	-218	-164
Free Cash Flow to Equity	-103	23
3 Dividends & Equity	-47	-42
Change in Net Cash (Debt)	-150	-19

Disclaimer

THIS DOCUMENT HAS BEEN PREPARED BY TERNA S.P.A. (THE "COMPANY") FOR THE SOLE PURPOSE DESCRIBED HEREIN. IN NO CASE MAY IT BE INTERPRETED AS AN OFFER OR INVITATION TO SELL OR PURCHASE ANY SECURITY ISSUED BY THE COMPANY OR ITS SUBSIDIARIES.

THE CONTENT OF THIS DOCUMENT HAS A MERELY INFORMATIVE AND PROVISIONAL NATURE AND THE STATEMENTS CONTAINED HEREIN HAVE NOT BEEN INDEPENDENTLY VERIFIED. NEITHER THE COMPANY NOR ANY OF ITS REPRESENTATIVES SHALL ACCEPT ANY LIABILITY WHATSOEVER (WHETHER IN NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY FROM THE USE OF THIS DOCUMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT OR ANY MATERIAL DISCUSSED DURING THE PRESENTATION.

THIS DOCUMENT MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED AT THE CONFERENCE CALL MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY'S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND CANNOT BE INTERPRETED AS A PROMISE OR GUARANTEE OF WHATSOEVER NATURE.

HOWEVER, FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES AND ARE CURRENT ONLY AT THE DATE THEY ARE MADE. WE CAUTION YOU THAT A NUMBER OF FACTORS COULD CAUSE THE COMPANY'S ACTUAL RESULTS AND PROVISIONS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE BUT ARE NOT LIMITED TO: TRENDS IN COMPANY'S BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT, DIFFERENT INTERPRETATION OF THE LAW AND REGULATION, ITS ABILITY TO SUCCESSFULLY DIVERSIFY AND THE EXPECTED LEVEL OF FUTURE CAPITAL EXPENDITURES. THEREFORE, YOU SHOULD NOT PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. TERNA DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN TERNA'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGES IN EVENTS.

EXECUTIVE IN CHARGE OF THE PREPARATION OF ACCOUNTING DOCUMENTS "AGOSTINO SCORNAJENCHI" DECLARES, PURSUANT TO PARAGRAPH 2 OF ARTICLE 154- BIS OF THE CONSOLIDATED LAW ON FINANCE, THAT THE ACCOUNTING INFORMATION CONTAINED IN THIS PRESENTATION, FOR WHAT CONCERNS THE ACTUAL FIGURES, CORRESPONDS TO THE DOCUMENT RESULTS, BOOKS AND ACCOUNTING RECORDS.

Notes

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