Terna — Investor Presentation 2015

Nov 11, 2015

9M15 Consolidated Results November 11th, 2015

MATTEO DEL FANTE CHIEF EXECUTIVE OFFICER

PIERPAOLO CRISTOFORI CHIEF FINANCIAL OFFICER

Agenda

Strategic Update 3

7

9M15 Results

Annexes

Strategic Update Electricity Market Trends

Electricity demand recovered in 9M15

• New historical consumption peak at 59.4GW
• Higher efficiency in the dispatching market

Strategic Update Regulatory Reviews Ongoing

MAIN DOCS RECENTLY PUBLISHED BY AEEGSI & CONSULTATION TIMEFRAME

Strategic Update M&A

9M15 at a glance Strategic Update

KEY FINANCIALS

9M15 Results

Revenues

Total Revenues 1,517€mn +4.8%yoy Regulated Activities 1,367€mn +1.8% yoy Non Regulated Activities 138€mn

KEY FIGURES TOTAL REVENUES EVOLUTION

9M15 Results Revenues Analysis

REGULATED ACTIVITIES

9M15 Results Opex

Total Costs 356€mn

Regulated Activities 245€mn

Non Regulated Activities 99€mn

KEY FIGURES TOTAL COSTS EVOLUTION

9M15 Results Opex Analysis

REGULATED ACTIVITIES

From EBITDA to Net Income 9M15 Results

Group EBITDA 1,161€mn +2.3%yoy

Group EBITDA Margin 76.5%

Group Net Income 455€mn +8.9%yoy

Capex 9M15 Results

Total Capex 702€mn

Development Capex 538€mn

KEY FIGURES BREAKDOWN

Category (€mn)	9M14	9M15	Δ yoy	Δ % yoy
+2%	259	307	48	19%
+1.5%	215	231	16	8%
Development Capex	474	538	64	14%
Maintenance (Base Return)	147	128	-19	-13%
Regulated Capex	621	666	46	7%
Other	32	1 36	4	13%
Total Group Capex	652	702	50	8%

Net Debt Evolution & Financial Structure 9M15 Results

1. Net Income + D&A + Net Financial Charges +/- Net Change in Funds (see Annex "Consolidated Cash Flow" for details) 2. Including Other Fixed Assets Changes, Change in Capital & Other 3. Calculated on Net Debt

THANK YOU. QUESTIONS?

MATTEO DEL FANTE CHIEF EXECUTIVE OFFICER

PIERPAOLO CRISTOFORI CHIEF FINANCIAL OFFICER

Annex Electricity Market Trends – Last 12 Months

Consolidated Income Statement¹ Annex

€ mn	9M14	9M15	Δmn	Δ %
Transmission	1,239	1,261	22	1.8%
Dispatching	88	94	6	7.2%
Other 2	16	12	-4	-27%
Regulated Activities	1,342	1,367	24	1.8%
Non Regulated Act.	88	138	50	57%
IFRIC12	18	13	-5	-30%
Total Revenues	1,448	1,517	69	4.8%
Labour Costs	147	141	-6	-4.2%
External Costs	86	82	-4	-4.6%
Other	10	22	12	120%
Regulated Activities	243	245	2	0.7%
Non Regulated Act.	52	99	47	89%
IFRIC12	18	13	-5	-30%
Total Costs	313	356	43	13.8%
EBITDA	1,135	1,161	26	2.3%
D&A	343	362	19	5.4%
EBIT	791	799	7	0.9%
Net Financial Charges	100	117	17	17.3%
Pre Tax Profit	692	682	-10	-1.4%
Taxes	274	227	-47	-17.1%
Tax Rate (%)	39.6%	33.3%
Group Net Income	418	455	37	8.9%

NOTE: Tamini consolidation since 20th May 2014

1. Managerial Accounting

2. Quality of Service + Other Revenues

Group Costs Breakdown Annex

€ mn	9M14	9M15	Δmn	Δ %
Labour Costs	161	163	2	1%
Services	90	97	7	8%
Materials	30	56	26	88%
Other	14	27	13	94%
IFRIC12	18	13	-5	-30%
Total Costs	313	356	43	14%

Annex P&L Quarterly Analysis

€ mn	1Q14	1Q15	Δ	2Q14	2Q15	Δ	3Q14	3Q15	Δ
Regulated Activities	457	479	22	430	432	3	456	456	0
Non Regulated Act.	17	32	15	34	52	18	37	54	18
IFRIC 12	4	3	-1	8	5	-4	5	5	-1
Operating Revenues	478	513	35	472	489	17	498	515	17
Regulated Activities	81	85	5	81	83	2	81	76	-4
Non Regulated Act.	3	23	20	20	36	16	29	40	10
IFRIC 12	4	3	-1	8	5	-4	5	5	-1
Operating Expenses	88	112	24	110	124	14	115	121	5
EBITDA	390	402	11	362	365	3	382	394	12
D&A	113	120	7	122	123	1	108	119	11
EBIT	277	281	4	240	242	2	274	275	1
Net Financial Charges	31	31	0	33	33	0	36	53	18
Pre Tax Profit	246	250	4	207	210	2	238	222	-17
Taxes	101	85	-16	78	65	-13	95	77	-18
Group Net Income	145	165	20	129	145	16	144	145	1
Total Group Capex	164	177	13	222	262	40	266	263	-3
Net Debt (end of period)	6,629	6,518		7,083	6,876		6,688	6,561

Consolidated Balance Sheet Annex

€ mn	Dec. 31,2014	Sep. 30,2015	Δmn
PP&E	10,779	11,093	315
Intangible Asset	453	433	-20
Financial Inv. and Other	89	91	2
Total Fixed Assets	11,320	11,617	297
Net WC	-821	-1,346	-525
Funds	-441	-399	42
Total Net Invested Capital	10,059	9,873	-186
Financed by
Consolidated Net Debt	6,966	6,561	-405
Total Shareholder's Equity	3,093	3,312	219
Total	10,059	9,873	-186
D/E Ratio	2.3	2.0
D/D+E Ratio	0.69	0.66
Number of Shares ('000)	2,010	2,010

Consolidated Cash Flow Annex

€ mn	9M14	9M15	Δmn
Group Net Income	418	455	37
1 D&A	343	361	18
Debt Service	100	117	17
Net Change in Funds	-11	-42	-31
Operating Cash Flow	849	890	41
2 ∆ Working Capital & Other	105	595	490
Cash Flow from Operating Activities	954	1,485	531
Capital Expenditures	-652	-702	-50
Free Cash Flow	302	783	482
Dividends	-261	-261	0
Debt Service	-100	-117	-17
Change in Net Cash (Debt)	-59	405

2. Including Other Fixed Assets Changes, Change in Capital & Other

Disclaimer

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Notes

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