Terna — Investor Presentation 2021

Mar 17, 2022

FY 2021 Consolidated Results

Agenda

Highlights	3

FY 2021 Results

8

Annexes 19

Main achievements

Towards energy transition

Demand Evolution – Last 12 months

• National Demand at 318 TWh, o/w ~36% covered by RES
• Net Total Production at 278 TWh, o/w ~41% covered by RES

Electricity demand in line with pre-Covid levels

Note: 2020 final figures, 2021 preliminary figures

FY 2021 Key Numbers

	FY 2020		FY 2021	∆ vs FY 2020 restated
	Actual €mn	Restated €mn	Actual €mn
Revenues	2,514	2,490	2,605	+5%
EBITDA	1,830	1,811	1,855	+2%
Group Net Income1	786	786	789	In line
EPS2 €cents	39.1	39.1	39.3
Capex	1,351	1,351	1,521	+13%
Net Debt	9,173	9,173	10,003

Strong capex acceleration delivered

• 1. Attributable to Terna
• 2. €/cents per share

FY 2021 Key Numbers Restated*

		FY 2021
	Actual €mn	Guidance €bn	Guidance restated €bn
Revenues	2,605	2.57	2.53
EBITDA	1,855	1.84	1.81
Group Net Income1	789
EPS2 €cents	39.3	39	39
Capex	1,521	1.4	1.4
Net Debt	10,003

2021 guidance met and exceeded

1. Attributable to Terna

2. €/cents per share

* Guidance and FY 2020 restated with International Activities held for sale

Revenues

Revenues increase driven both by Regulated and Non Regulated Activities

1. Including IFRIC12

Revenues Analysis

Higher contribution from Regulated activities

Note: figures may not add up due to rounding

Opex

Operating costs evolution driven by higher volume of activity

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

EBITDA

EBITDA growth driven by Regulated Activities

Note: figures may not add up due to rounding

From EBITDA to Net Income

Solid results delivered

• 1. Net Profit related to Assets Held for Sale according to IFRS5 accounting principle
• 2. Attributable to Terna.

Capex

Maximizing effort to support the decarbonization path

Note: figures may not add up due to rounding

1. Of which about 11 €mn of Capitalized Financial Charges in 2021 and 10 €mn in 2020

Cash Flow & Net Debt Evolution

Strong operating cash flow to cover investment needs

• 1. Including Other Fixed Assets Changes
• 2. Including Assets Held for Sale, Cash Flow Hedge reserve and other Note: figures may not add up due to rounding

Net Debt Evolution & Financial Structure

Strengthening financial structure

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

Consolidated Income Statement¹

€ mn	2021	2020	Δmn	Δ%
Total Revenue	2,605	2,490	114	4.6%
Regulated Activities	2,254	2,149	105	4.9%
Transmission	2,041	1,939	103	5.3%
Dispatching	114	109	5	4.1%
Other²	52	73	-21	-28.7%
IFRIC12	47	28	18	64.6%
Non Regulated Activities	351	341	10	2.9%
International Activities	0	1	0	-20.0%
Total Costs	750	679	71	10.4%
Regulated Activities	453	428	25	5.8%
Labour Costs	227	221	6	2.5%
External Costs	157	149	8	5.3%
Other²	22	29	-7	-24.3%
IFRIC12	47	28	18	64.6%
Non Regulated Activities	289	244	45	18.4%
International Activities	8	7	1	11.3%
EBITDA	1,855	1,811	44	2.4%
D&A	654	634	20	3.2%
EBIT	1,200	1,177	24	2.0%
Net Financial Charges	79	86	-7	-8.3%
Pre Tax Profit	1,122	1,091	31	2.8%
Taxes	318	297	21	6.9%
Tax Rate (%)	28.3%	27.3%	-	+1.0 pp
Net Income	804	793	10	1.3%
(Profit)/Loss From Discontinued Operations Net Financial Charges	-13	2	-15	0.0%
Total Net Income	791	795	-5	-0.6%
Minority Interest	1	10	-8	-85.7%
Group Net Income	789	786	4	0.5%

2. Including Quality of Service

Consolidated Income Statement¹

€ mn	FY 20 Reported	Restatement	FY 20 Restated	Δ%
Total Revenue	2,514	-23	2,490	-0.9%
Regulated Activities	2,149	0	2,149	0.0%
Transmission	1,939	0	1,939	0.0%
Dispatching	109	0	109	0.0%
Other²	73	0	73	-0.1%
IFRIC12	28	0	28	0.1%
Non Regulated Activities	341	0	341	0.0%
International Activities	24	-23	1	-97.9%
Total Costs	683	-4	679	-0.5%
Regulated Activities	428	0	428	0.0%
Labour Costs	221	0	221	0.0%
External Costs	149	0	149	0.0%
Other²	29	0	29	-0.1%
IFRIC12	28	0	28	0.1%
Non Regulated Activities	244	0	244	0.0%
International Activities	11	-4	7	-34.3%
EBITDA	1,830	-19	1,811	-1.1%
D&A	644	-9	634	-1.5%
EBIT	1,187	-10	1,177	-0.8%
Net Financial Charges	94	-8	86	-8.1%
Pre Tax Profit	1,093	-2	1,091	-0.2%
Taxes	298	0	297	-0.1%
Tax Rate (%)	27.2%	+0.1 pp	27.3%
Net Income	795	-2	793	-0.3%
(Profit)/Loss From Discontinued Operations	0	2	2	100.0%
Total Net Income	795	0	795	0.0%
Minority Interest	10	0	10	-0.2%
Group Net Income	786	0	786	0.0%

2. Including Quality of Service

Consolidated Balance Sheet

€ mn	Dec. 31,2021	Dec. 31,2020	Δmn
PP&E	15,317	14,560	757
Intangible Asset	657	578	79
Financial Inv. and Other	380	508	-129
Total Fixed Assets	16,353	15,646	707
Net WC	-1,707	-1,936	230
Funds	-48	-121	73
Net Capital Invested	14,598	13,588	1,009
Net Assets Held for Sale	118	0	118
Total Net Capital Invested	14,716	13,588	1,127
Financed by:
Consolidated Net Debt	10,003	9,173	830
Total Shareholder's Equity	4,713	4,416	297
Total	14,716	13,588	1,127

Consolidated Cash Flow

€ mn	2021	2020	Δ mn
Total Net Income	791	795	4
D&A	641	636	- 5
Net Change in Funds	-73	-89	-16
Operating Cash Flow	1,359	1,343	-16
Δ Working Capital & Other	-56	-294	-238
Cash Flow from Operating Activities	1,302	1,049	-254
Capital Expenditures	-1,521	-1,351	170
Free Cash Flow to Equity	-219	-303	-84
Net Assets Held for Sale	-118	0	118
Dividends & Equity	-494	-611	-118
Change in Net Cash (Debt)	-830	-914	-84

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