November 19th, 2020

Agenda

Scenario	3
Strategy	8
2021 – 2025 Group Financial Targets and Dividend Policy	16
Final Remarks	20
Annexes	23

Scenario

Terna and the Sustainable Development Goals

Increasing energy efficiency
Research in non regulated activities
Active role in International associations
Realization of Development and Resiliency Plans
Realization of cross-borders interconnections
Development of International activities
Implementation of Resiliency Plan
Research, Development and Innovation
Innovation focused on grid resiliency

▪ Terna is committed to supporting sustainable development by contributing to some of the objectives identified by the United Nations

Incentivize lasting, inclusive and sustainable economic growth	Guarantee sustainable models of production and consumption	Protect, restore and promote a sustainable use of the ecosystem	Promote a peaceful and inclusive society for sustainable development	Strengthen the means of implementation and renew partnerships for sustainable development

▪ In the current pandemic crisis scenario, Terna recently renewed its commitment to the 10 Principles of the Global Compact and the 17 SDGs

Scenario

Current -23% Target 2030 -55% Target 2050 Net zero emissions TARGET EMISSIONS* KEY ACTIONS

Grids development to improve interconnections and digitalization

80%-90% of RES in the power

generation by 2050

Energy efficiency and electrification of the heating sector

Batteries

Electric Vehicles and lowemission transport

INVESTMENTS

At least €1 trillion of sustainable investments over the next 10 years

A new European strategy heading to "Net Zero"

Italian electricity system evolution Scenario

From system operator to system enabler

1. Integrated National Energy and Climate Plan 2030 targets

2. MiSE data

3. Source: Terna for 2018 and 2019 data; National Integrated Energy and Climate Plan for 2030 target

Scenario

The key system tools to support the Energy Transition

Terna Plan enables future RES development and supports the Energy Transition

Terna's strategic approach Strategy

Boosting Investments	Further acceleration on grid investments
Energy Transition	Enabling the Energy Transition
Sustainability	Sustainable approach to support stakeholders and local communities
Transformation	Development of a deep transformation process

Domestic Regulated Activities (1/2) Strategy

Maximizing benefits for the system

1. Net of EU contributions 2. Calendar RAB including WIP *Including ~300 €mn of Italy-France interconnection project Note: RAB inflation at 1.1% on average during plan period

Domestic Regulated Activities (2/2) Strategy

Strong focus on quality, resiliency, technologies/capital light investments and sustainability

Strategy Non Regulated Activities

International Activities PROJECTS IN OPERATION

Brazil

Strategy

230 kV, 158 km
Commissioned in October 2018

▪ Commissioning expected in 1H21

▪ 30-year concession

500 kV, 355 km
Commissioned in April 2019
30-year concession

500 kV, 214 km
Commissioned in October 2019
30-year concession

PROJECTS IN EXECUTION POTENTIAL NEW PROJECTS

Brazil	▪ ▪ ▪	500 kV, ~300 km Commissioning expected by 1Q23 Two 30-year concessions

	▪	138 kV, 132 km

2021-2025 Cumulated Capex

lower than 300€mn

EBITDA cumulated in 5 years* >200€mn

Perù

New Ways of Working Strategy

Leveraging on Covid constraints to define New Ways of Working

Innovation & Digitization Strategy

INVESTMENTS TECHNOLOGICAL ENABLERS

2021-2025 cumulated capex* ~900€mn

– 2025 Group Financial Targets and Dividend Policy

Guidance 2021 and 2025 2021 – 2025 Group Financial Targets and Dividend Policy

	FY 2020*	FY 2021*	FY 2025*
	Guidance €bn	Guidance €bn	Guidance €bn
	Confirmed 2020 guidance
Revenues	2.49	2.57	3.04
EBITDA	1.79	1.84	2.21
Capex 1	1.3	1.4	9.2 Cumulated 2021-2025
EPS €cents	38	39	49

Increasing visibility and growth

*Including Brugg Cables from acquisition date

1. Including Regulated, Non Regulated, capitalized financial charges and EU contributions

2021 – 2025 Group Financial Targets and Dividend Policy Dividend Policy

€ cents

Enhancing shareholders value

Financial Efficiency and Financial Structure 2021 – 2025 Group Financial Targets and Dividend Policy

Gross Debt @ 84% Fix rate¹
Average duration of ~5 years¹
Net Debt / RAB² <60% over the Plan
Average Cost of Net Debt 2021-2025 @ 1.3%
Strong commitment to maintain current rating level

RATING
	Terna		Sovereign
	Rating	Outlook	Rating	Outlook
S&P	BBB+	Stable	BBB	Stable
Moody's	Baa2	Stable	Baa3	Stable
Fitch	BBB+	Stable	BBB-	Stable
Scope	A-	Stable	BBB+	Negative

Solid financial structure to support investments acceleration

Further acceleration on domestic core activities to allow the transition towards sustainable energy

Maintaining a low risk profile and limited capital absorption in non regulated and international

Guarantee financial stability

Ready for new strategic opportunities in line with TSO role evolution to support decarbonization targets

Enhancing TSO central role in the energy transition

Final Remarks

Further potential developments: other 10-year horizon strategic opportunities not included in the Plan

Opportunities enabling system evolution

P&L Targets Annexes

EPS CAGR >5%

Operational Efficiency Annexes

Continuous effort in operational efficiency

Terna's Sustainable Management Approach (1/2) Annexes

Terna's main goal is to create the necessary conditions to reach the NECP target of 55% RES share on electricity consumption by 2030, compared to the current 35%

Terna already top performer in sustainability… …takes on another challenge by adopting science-based targets

Commitment to reach the levels of decarbonization that limit global warming «well below 2°», as established in the Paris agreement ¹

1°First in Italy to obtain certifications ISO37001 (anti-corruption) and ISO55001 (Asset Management) 0.5 Mtons of CO²

~95% Of regulated investments can be classified as «green» according to the criteria currently being defined by the European Taxonomy 2

reduction by 2030 compared to 2019, thanks to the modernization of the electricity system³

Challenging objective to set to zero the carbon footprint: more energy efficiency, less emissions, environemental projects in Italy

1. Terna obtained a score of 90 out of 100 from S&P ESG (highest score in the electricity utilities sector and part of the 99th percentile of all companies analysed by S&P (over 3,100)

2. Preliminary estimates

3. Corresponds to a total reduction of CO2 emitted by Terna by 2030 of 28% compared to 2019. Source: NIECP, Terna's 2019 Integrated Annual Report, S&P ESG, MSCI, Ethibel, Bloomberg GEI, FTSE4GOOD

Terna's Sustainable Management Approach (2/2) Annexes

Since 2005, Terna has been monitoring sustainability KPIs

	2019	Target
Safety Index 1	≤1	≤1
km of overhead lines 2 removed	180	488
km of new underground and undersea lines 2	46	608
Green capex In line with 2018 Green Bond Principles	203€mn	>600€mn

Disclaimer

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Terna Investor Presentation 2020

4300_rns_2020-11-19_61a0e1d3-d9d6-4e99-bef6-7848df22b3dc.pdf

Scenario

Scenario