Terna — Investor Presentation 2020

Jul 29, 2020

1H2020 Consolidated Results

July 29th 2020

Agenda

Highlights	3

1H20 Results	7

Closing Remarks	17

Annexes	19

DOMESTIC REGULATED ACTIVITIES

Well on track on construction activities and authorization procedures

NON REGULATED ACTIVITIES

Brugg Cables consolidation

Brazil and Uruguay projects in operation ongoing as expected

INTERNATIONAL ACTIVITIES SHAREHOLDERS REMUNERATION

16.53 €cents/share paid in June as final 2019 dividend

Focus on execution

Demand Evolution – Last 12 months Highlights (2/3)

1H2020 data:

• National Demand at 144 TWh, o/w 40.5% covered by RES
• Net Total Production at 131 TWh

Ensuring security of supply even in a challenging scenario

€mn	1H 2020	1H 2019	Δ vs 1H19
Revenues	1,183	1,098	+8%
EBITDA	876	846	+4%
Group Net Income1	378	367	+3%
Capex	428	396	+8%

	1H 2020	FY 2019
Net Debt	8,846	8,259

Resilient business model. Well on track to meet all targets

1H 2020 results

Revenues

Regulated investments and InsourcingBrugg attività di O&M Rete FS consolidation as a growth driver

Note: figures may not add up due to rounding 1. Including IFRIC12 2. Construction margin, including IFRIC12

Revenues Analysis 1H 2020 results

€mn NON REGULATED AND INTERNATIONAL

High quality of service ensured

1H 2020 results Opex

Operating costs evolution reflecting perimeter change

Opex Analysis 1H 2020 results

Costs dynamics under control Insourcing attività di O&M Rete FS

1H 2020 results EBITDA

Investments acceleration driving EBITDA growth

1H 2020 results From EBITDA to Net Income

+3% Group Net Income growth

Capex 1H 2020 results

Ongoing Capex acceleration Insourcing attività di O&M Rete FS

Cash Flow & Net Debt Evolution 1H 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 1H 2020 results

Duration 4.5 years

Maintaining a solid financial structure

Closing Remarks

Annex

Consolidated Income Statement¹

€ mn	1H20	1H19	Δmn	Δ%
Total Revenue	1,183	1,098	85	7.8%
Regulated Activities	1,025	1,005	20	2.0%
Transmission	939	929	10	1.1%
Dispatching	54	56	-2	-3.6%
2 Other	24	16	9	56.1%
IFRIC12	8	5	3	66.0%
Non Regulated Activities	146	82	63	77.1%
International Activities	12	11	2	13.9%
Total Costs	307	252	56	22.1%
Regulated Activities	197	190	6	3.3%
Labour Costs	115	110	5	4.2%
External Costs	66	69	-3	-3.8%
2 Other	7	7	1	13.9%
IFRIC12	8	5	3	66.0%
Non Regulated Activities	106	56	50	89.1%
International Activities	5	5	-1	-11.3%
EBITDA	876	846	30	3.5%
D&A	302	289	14	4.7%
EBIT	574	558	16	2.9%
Net Financial Charges	39	39	0	0.8%
Pre Tax Profit	535	519	16	3.1%
Taxes	155	150	5	3.1%
Tax Rate (%)	29.0%	29.0%	-0.0 pp
Total Net Income	380	368	11	3.0%
Minority Interest	2	2	0	16.7%
Group Net Income	378	367	11	3.0%

Annex

Consolidated Balance Sheet

€ mn	Jun. 30,2020	Dic. 31,2019	Δmn
PP&E	Mar. 31,2020	Dic. 31,2019	Δmn
	14,003	13,864	139
Intangible Asset	542	543	-1
	13,922	13,864	58
Financial Inv. and Other	474	502	-28
	541	543	-1
Total Fixed Assets	15,018	14,908	110
	473	502	-28
Net WC	-1,802	-2,208	406
	14,937	14,908	28
Funds	-162	-210	48
	-1,979	-2,208	229
Net Capital Invested	-178	-210	32
	13,054	12,490	564
Financed by:	12,780	12,490	289
Consolidated Net Debt	8,846	8,259	588
Total Shareholder's Equity	8,409	8,259	150
	4,208	4,232	-24
Total	4,371	4,232	139
	13,054	12,490	564
	12,780	12,490	289
D/E Ratio	2.1 1.9	2.0 2.0
D/D+E Ratio	0.7 0.7	0.7 0.7
Number of Shares (mn)	2,010	2,010

Consolidated Cash Flow Annex

€ mn	1H20	1H19
Total Net Income	380	368
D&A 1	299	287
Net Change in Funds	-48	-70
Operating Cash Flow	631	586
Δ Working Capital & Other 2	-387	-162
Cash Flow from Operating Activities	244	424
Capital Expenditures	-428	-396
Free Cash Flow to Equity	-184	28
Dividends & Equity 3	-404	-422
Change in Net Cash (Debt)	-588	-394

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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