Terna — Investor Presentation 2022

Mar 24, 2022

March 24th 2022

Sustainability	3
Energy Scenario and System Strategy	7
10-year National Development Plan	11
Strategy	15
2021 – 2025 Group Financial Targets and Dividend Policy	22
Closing Remarks	27
Annexes	29

Driving Energy - The Role of Terna

Dealing with unforeseeable events

ESG as a growth driver

Environment

Acceleration of green innovation

• Low cost PV and wind energy
• Electric vehicles

Change in markets perception

• Lower investments in traditional generation
• ESG Investments trend

Energy transition is at the heart of ESG policies and drives current investment strategies

Governments and companies committed to a zero emissions future

▪ Introduction of «Net Zero» policies

▪ EU Green Deal, international climate plans

NexTerna

A new People Strategy to generate a cultural change enabling the Industrial Plan

Energy Scenario and System Strategy

Energy Scenario and System Strategy

Italian decarbonization targets

1. CEP: Clean Energy Package

2. National Energy and Climate Plan. Published in December 2019

3. First assumptions based on the new emission reduction targets defined in the Green Deal

RES Evolution in Italy

Energy Scenario and System Strategy

System Strategy towards Energy Transition

10-year National Development Plan

Grid Investments

A Plan to support the energy transition	▪ Increase transport capacity solving grid congestions ▪ Grid rationalization in the main metropolitan areas ▪ Increase foreign interconnections ▪ Increase safety and resiliency of the system	€bn 14.4	18.1
Highest level of investments ever for the Country	▪ Investments up by 25% compared to the previous 10-year Plan Investments to enable the energy transition and achieve ▪ decarbonization targets set by Europe
Green and sustainable development projects	Transmission investments considered sustainable ▪ according to the European Taxonomy criteria ▪ Focused on achieving national targets for the integration of renewables and the phase out of coal*	Development Plan 2020	Development Plan 2021

10-year National Development Plan

Main ongoing and future projects

10-year National Development Plan

Benefits for the System

Grid investments as a key tool for the energy transition, the security of supply and the reduction of costs for final users

Source: Terna 2021 Ten-year Development Planhttps://www.terna.it/en/electric-system/grid/national-electricity-transmission-grid-development-plan *In line with the current national target (Integrated National Energy and Climate Plan 2030 targets)

Domestic Regulated Activities

1. Excluding EU contributions

2. Calendar RAB including WIP. RAB inflation at 1.3% on average during the plan period

Domestic Regulated Activities

Strong focus on quality, resiliency, technologies and sustainability

Regulatory milestones and output-based incentives

FOCUS ON OUTPUT-BASED INCENTIVES

Non Regulated Activities

EBITDA >450 €mn cumulated in 5 years

International Activities

Innovation and Digitalization

– 2025 Group Financial Targets and Dividend Policy

2021 – 2025 Group Financial Targets and Dividend Policy

Guidance 2022 and 2025

Increasing growth and value creation

1. Including Regulated, Non Regulated, capitalized financial charges and EU contributions Note: P&L values restated for International deconsolidation

2021 – 2025 Group Financial Targets and Dividend Policy

Dividend Policy

For 2024 and 2025 the payout ratio is expected to be 75% with a guaranteed minimum dividend equal to the 2023 dividend

Financial Efficiency and Financial Structure

• Gross Debt @ ~91% Fix rate¹
• Average duration of ~5 years¹

FINANCIAL RATING

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

▪ Net Debt / RAB² ~60% in 2025

• Average Cost of Net Debt 2021-2025 @ 1.3%
• Strong commitment to maintain current rating level

ESG RATING

• S&P Global CSA (Corporate Sustainability Assessment) score: 89/100
• CDP (former Carbon Disclosure Project): A-
• Sustainalytics: Low risk
• Moody's ESG Solutions (former Vigeo Eiris): Advanced
• ISS ESG Corporate Rating: Prime

Solid financial structure to support investments acceleration

• 1. As of FY2021. Calculated on medium-long term debt
• 2. Total Calendar RAB

ESG KPIs

			TARGET
CAPITAL	KPI	2025	2030
Human	▪ % share of women in the company (base year: 2019)	20%	22%
	▪ % share of women in the company net of workers (base year: 2019)	25%	27%
	▪ Workplace Safety Index for Terna Group's employees	≤1	≤1
Social and Relational	▪ % significant projects joined by stakeholders engagement initiatives
	- projects with High electrical priority and capex threshold >50 €mn	100%	=
	- projects with High electrical priority and capex threshold of 10-50 €mn or with Medium electrical priority and capex threshold >50 €mn	=	100%
Intellectual	% employees trained on ESG subjects	=	100%
Natural	Yearly CO emissions avoided thanks to National Development Plan projects 2 (equivalent tons)	-	5.6 mn

Closing Remarks

Generating further benefits for the system and confirming of Terna's role in driving the current energy transition

Focus on creating sustainable value over time for shareholders and communities

Guaranteeing low risk profile and financial stability

Ensuring access to a safe, efficient and effective system at the lowest cost possible

Reinforcing Terna's institutional role for the Country

Annexes

Annexes

2022 Total Grid Fee update*

Annexes

P&L Targets

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.

THE CONTENT OF THIS DOCUMENT HAS A MERELY INFORMATIVE AND PROVISIONAL NATURE AND THE STATEMENTS CONTAINED HEREIN HAVE NOT BEEN INDEPENDENTLY VERIFIED. NEITHER THE COMPANY NOR ANY OF ITS REPRESENTATIVES SHALL ACCEPT ANY LIABILITY WHATSOEVER (WHETHER IN NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY FROM THE USE OF THIS DOCUMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT OR ANY MATERIAL DISCUSSED DURING THE PRESENTATION.

THIS DOCUMENT MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED AT THE CONFERENCE CALL MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY'S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND CANNOT BE INTERPRETED AS A PROMISE OR GUARANTEE OF WHATSOEVER NATURE.

HOWEVER, FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES AND ARE CURRENT ONLY AT THE DATE THEY ARE MADE. WE CAUTION YOU THAT A NUMBER OF FACTORS COULD CAUSE THE COMPANY'S ACTUAL RESULTS AND PROVISIONS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: TRENDS IN COMPANY'S BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT, DIFFERENT INTERPRETATION OF THE LAW AND REGULATION, ITS ABILITY TO SUCCESSFULLY DIVERSIFY AND THE EXPECTED LEVEL OF FUTURE CAPITAL EXPENDITURES. THEREFORE, YOU SHOULD NOT PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. TERNA DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN TERNA'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGES IN EVENTS.

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.