Terna — Interim / Quarterly Report 2022

Jul 28, 2022

1H 2022 Consolidated Results

Rome, July 28th 2022

Main achievements

Institutional role for the Country

Demand Evolution – Last 12 months

Guaranteeing security of supply

1H 2022 Key Numbers

	1H 2021		1H 2022	∆ vs 1H 2021 restated
	Actual €mn	Restated €mn	Actual €mn
Revenues	1,259	1,256	1,331	+6%
EBITDA	910	910	947	+4%
Group Net Income1	385	385	398	+4%
Capex	602	600	661	+10%
		FY 2021	1H 2022
Net Debt		10,003	8,994

Solid set of results and guaranteed growth

1. Attributable to Terna Note: 2021 results have been restated for International Activities Held for Sale, according to IFRS5 accounting principle

Revenues

Regulated and Non Regulated revenues as growth driver

Note: figures may not add up due to rounding 1. Including IFRIC12

Revenues Analysis

NON REGULATED AND INTERNATIONAL

€mn

Higher contribution from Regulated activities

Note: figures may not add up due to rounding

Opex

EBITDA

EBITDA growth driven by Regulated activities

From EBITDA to Net Income

+4% increase in Group Net Income

Note: figures may not add up due to rounding 1. Attributable to Terna.

Capex

Double-digit capex acceleration

Note: figures may not add up due to rounding

1. Of which about 10 €mn of Capitalized Financial Charges in 2022 and 5 €mn in 2021

Cash Flow & Net Debt Evolution

Strong operating cash flow to cover investments

1. Including Other Fixed Assets Changes

2. Including Assets Held for Sale, Cash Flow Hedge reserve, Hybrid Green Bond and other

Net Debt Evolution & Financial Structure

Maintaining a solid and diversified financial structure

Closing Remarks

Consolidated Income Statement¹

€ mn	1H22	1H21	Δmn	Δ%
Total Revenue	1,331	1,256	75	5.9%
Regulated Activities	1,154	1,093	60	5.5%
Transmission	1,000	998	2	0.2%
Dispatching	113	55	58	103.8%
Other²	18	25	-6	-25.3%
IFRIC12	23	15	7	48.0%
Non Regulated Activities	177	163	15	9.0%
International Activities	0	0	0	-100.0%
Total Costs	384	346	38	10.8%
Regulated Activities	231	212	19	9.1%
Labour Costs	126	113	13	11.9%
External Costs	74	72	2	2.7%
Other²	9	12	-3	-28.1%
IFRIC12	23	15	7	48.0%
Non Regulated Activities	150	131	19	14.3%
International Activities	3	4	-1	-14.3%
EBITDA	947	910	37	4.1%
D&A	340	326	14	4.3%
EBIT	607	584	23	3.9%
Net Financial Charges	36	34	2	6.2%
Pre Tax Profit	571	550	21	3.8%
Taxes	161	157	4	2.6%
Tax Rate (%)	28.1%	28.4%	-	-0.3 pp
Net Income	411	394	17	4.3%
(Profit)/Loss From Discontinued Operations Net Financial Charges	-10	-8	-2	29.5%
Total Net Income	401	386	15	3.8%
Minority Interest	3	1	1	78.6%
Group Net Income	398	385	14	3.5%

2. Including Quality of Service

Note: figures may not add up due to rounding 1. Managerial Accounting

Consolidated Income Statement¹

€ mn	1H 21 Reported	Restatement	1H 21 Restated	Δ%
Total Revenue	1,259	-2	1,256	-0.2%
Regulated Activities	1,093	0	1,093	0.0%
Transmission	998	0	998	0.0%
Dispatching	55	0	55	0.0%
Other²	25	0	25	0.0%
IFRIC12	15	0	15	-0.1%
Non Regulated Activities	163	0	163	0.0%
International Activities	3	-2	0	-88.9%
Total Costs	348	-2	346	-0.5%
Regulated Activities	212	0	212	0.0%
Labour Costs	113	0	113	0.0%
External Costs	72	0	72	0.0%
Other²	12	0	12	0.0%
IFRIC12	15	0	15	0.0%
Non Regulated Activities	131	0	131	0.0%
International Activities	5	-2	4	-35.0%
EBITDA	910	-1	910	-0.1%
D&A	326	0	326	0.0%
EBIT	585	0	584	-0.1%
Net Financial Charges	41	-7	34	-17.0%
Pre Tax Profit	544	7	550	1.2%
Taxes	158	-1	157	-0.8%
Net Income	386	8	394	2.0%
(Profit)/Loss From Discontinued Operations	0	-8	-8	100.0%
Total Net Income	386	0	386	0.0%
Minority Interest	1	0	1	-2.0%
Group Net Income	385	0	385	0.0%

2. Including Quality of Service

Consolidated Balance Sheet

€ mn	Jun. 30,2022	Dec. 31,2021	Δmn
PP&E	15,553	15,317	237
Intangible Asset	701	657	44
Financial Inv. and Other	433	380	53
Total Fixed Assets	16,687	16,353	334
Net WC	-1,967	-1,707	-260
Funds	-50	-48	-2
Net Capital Invested	14,670	14,598	72
Net Assets Held for Sale	206	118	88
Total Net Capital Invested	14,876	14,716	161
Financed by:
Consolidated Net Debt	8,994	10,003	-1,009
Total Shareholder's Equity	5,882	4,713	1,169
Total	14,876	14,716	161

Consolidated Cash Flow

€ mn	1H22	1H21
Total Net Income	401	386
D&A¹	338	317
Net Change in Funds	2	-31
Operating Cash Flow	740	672
Δ Working Capital & Other²	249	-306
Cash Flow from Operating Activities	989	366
Capital Expenditures	-661	-602
Free Cash Flow to Equity	328	-236
Net Assets Held for Sale	-88
Dividends & Equity³	769	-326
Change in Net Cash (Debt)	1,009	-562

2022 Total Grid Fee*

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.

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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