Terna — Investor Presentation 2020

Apr 2, 2021

FY2020 Consolidated Results

March 24th 2021

Agenda

Annexes 18

Demand Evolution – FY2020 Highlights

FY 2020 data:

• National Demand at 303 TWh, o/w ~38% covered by RES

• Net Total Production at 273 TWh

• ~42% of the Net Total Production was covered by RES

• 2020 Non-RES production decreased by 7% compared to 2019
• PV production increased by ~10%

Electricity demand recovering despite the challenging scenario

FY 2020 Key Numbers Highlights

2020 guidance met and capex acceleration delivered

2H2020 acceleration – Businesses Achievements Highlights

2H2020 acceleration – Group Achievements Highlights

Growth driven by Regulated and Non Regulated revenues Insourcing attività di O&M Rete FS

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

2. Construction margin, including IFRIC12

Revenues Analysis FY 2020 results

Organic increase and perimeter change as growth drivers

Operating costs evolution driven by Non Regulated Activities

EBITDA FY 2020 results

Insourcing attività di O&M Rete FS EBITDA growth driven by all businesses

FY 2020 results From EBITDA to Net Income

+4% Group Net Income growth

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

Capex FY 2020 results

+7% capex acceleration despite Insourcing attività di O&M Rete FS Covid emergency

Note: figures may not add up due to rounding

1. Of which about 10 €mn of Capitalized Financial Charges in 2020 and 12 €mn in 2019

Cash Flow & Net Debt Evolution FY 2020 results

Strong operating cash flow generation

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 FY 2020 results

Maturity ~5 years

Solid financial structure to support capex acceleration

• 1. Percentages and key ratios calculated on Gross Debt nominal value
• 2. IAS value

Closing Remarks

Enhancing the TSO central role in the energy transition

*Including Brugg Cables from acquisition date

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

Consolidated Income Statement¹ Annex

€ mn	2020	2019	Δmn	Δ%
Total Revenue	2,514	2,295	218	9.5%
Regulated Activities	2,149	2,055	94	4.6%
Transmission	1,939	1,860	78	4.2%
Dispatching	109	113	-4	-3.2%
2 Other	73	54	18	33.6%
IFRIC12	28	28	1	3.3%
Non Regulated Activities	341	212	129	61.1%
International Activities	24	28	-5	-16.9%
Total Costs	683	554	129	23.3%
Regulated Activities	428	398	31	7.7%
Labour Costs	221	213	8	3.8%
External Costs	149	151	-1	-0.9%
2 Other	29	6	23	369.9%
IFRIC12	28	28	1	3.3%
Non Regulated Activities	244	142	102	72.3%
International Activities	11	15	-4	-26.7%
EBITDA	1,830	1,741	89	5.1%
D&A	644	586	58	9.8%
EBIT	1,187	1,155	32	2.7%
Net Financial Charges	94	78	16	20.3%
Pre Tax Profit	1,093	1,077	16	1.5%
Taxes	298	313	-16	-5.0%
Tax Rate (%)	27.2%	29.1%	-1.9 pp
Total Net Income	795	764	31	4.1%
Minority Interest	10	7	3	48.5%
Group Net Income	786	757	28	3.7%

Note: figures may not add up due to rounding

1. Managerial Accounting

2. Including Quality of Service

Annex

Consolidated Balance Sheet

€ mn	Dec. 31,2020	Dec. 31,2019	Δmn
PP&E	14,560	13,864	696
Intangible Asset	578	543	35
Financial Inv. and Other	508	502	7
Total Fixed Assets	15,646	14,909	737
Net WC	-1,936	-2,208	272
Funds	-121	-210	89
Net Capital Invested	13,588	12,491	1,098
Financed by:
Consolidated Net Debt	9,173	8,259	914
Total Shareholder's Equity	4,416	4,232	184
Total	13,588	12,491	1,098

Consolidated Cash Flow Annex

€ mn	FY20	FY19
Total Net Income	795	764
1 D&A	636	573
Net Change in Funds	-89	-97
Operating Cash Flow	1,343	1,240
Δ Working Capital & Other 2	-294	251
Cash Flow from Operating Activities	1,049	1,491
Capital Expenditures	-1,351	-1,264
Free Cash Flow to Equity	-303	227
Dividends & Equity 3	-611	-586
Change in Net Cash (Debt)	-914	-359

2. Including Other Fixed Assets Changes

3. Including Cash Flow Hedge accruals and other

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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MARCH 24th 202