Terna — Investor Presentation 2022

Mar 22, 2023

FY 2022 Consolidated Results

Rome, March 22nd 2023

Latest main achievements

Value creation for all stakeholders

Demand Evolution – Last 12 months

DEMAND AS REPORTED (TWh)	FY22	FY21	Δ %
	316.8	319.9	-1.0%

A secure and resilient system despite the complex scenario

2022 Key Numbers

	FY 2021	FY 2022	∆%	FY 2022
	Actual €mn	Actual €mn		Guidance €bn
Revenues	2,605	2,964	+13.8%	2.74
EBITDA	1,855	2,059	+11.0%	2.0*
Group Net Income1	789	857	+8.6%
EPS2	39.3	42.6		42*
Capex	1,521	1,757	+15.5%	1.7
Net Debt	10,003	8,576

Strong growth in P&L and Capex

1. Attributable to Terna

2. €/cents per share. Calculated as group net income on total number of shares.

* Guidance updated in November 2022

7

Revenues

Growth driven by Regulated and Non Regulated activities

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

Revenues Analysis

NON REGULATED AND INTERNATIONAL

€mn

Higher contribution from Regulated Activities

Opex

Operating cost evolution driven by organic activities increase

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

EBITDA

Regulated Activities as EBITDA growth driver

From EBITDA to Net Income

+9% increase in Group Net Income

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

Capex

Enabling the energy transition

Note: figures may not add up due to rounding

1. Of which about 25 €mn of Capitalized Financial Charges in 2022 and 11 €mn in 2021

Cash Flow & Net Debt Evolution

Operating cash flow supports investments need

1. Including Other Fixed Assets Changes

2. Including Assets Held for Sale, Cash Flow Hedge reserve, Hybrid Green Bond and other

Note: figures may not add up due to rounding

Net Debt Evolution & Financial Structure

Efficient and proactive debt management approach

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

Closing Remarks

Closing remarks

2023 Guidance

	FY 2022	FY 2023
	Actual €mn	Guidance €bn
Revenues	2,964	3.11
EBITDA	2,059	2.12
EPS1	42.6	43
Capex	1,757	2.2

Solid base growth for the future

1. €/cents per share. Calculated as group net income on total number of shares.

Closing remarks

2023 Ten-year National Development Plan

Strong acceleration in grid investments, in order to achieve climate and energy targets

Over 21€bn of investments foreseen in the 2023-2032 period aimed at increasing transport capacity, security and resiliency of the system

Enhancing long-term growth

Consolidated Income Statement¹

€ mn	2022	2021	Δmn	Δ%
Total Revenue	2,964	2,605	360	13.8%
Regulated Activities	2,542	2,254	289	12.8%
Transmission	1,969	2,041	-72	-3.5%
Dispatching	450	114	336	295.4%
Other²	56	52	4	8.7%
IFRIC12	67	47	21	43.7%
Non Regulated Activities	421	351	71	20.1%
International Activities	1	0	0	100.0%
Total Costs	905	750	155	20.7%
Regulated Activities	535	453	82	18.2%
Labour Costs	266	227	39	17.3%
External Costs	177	157	20	12.5%
Other²	25	22	3	12.7%
IFRIC12	67	47	21	43.7%
Non Regulated Activities	364	289	75	25.9%
International Activities	6	8	-2	-22.8%
EBITDA	2,059	1,855	204	11.0%
D&A	726	654	71	10.9%
EBIT	1,334	1,200	133	11.1%
Net Financial Charges	100	79	21	26.9%
Pre Tax Profit	1,233	1,121	112	10.0%
Taxes	355	318	37	11.8%
Tax Rate (%)	28.8%	28.3%	-	0.5 pp
Net Income	878	804	74	9.3%
Profit/(Loss) From Discontinued Operations Net Financial Charges	-20	-13	-8	58.6%
Total Net Income	858	791	67	8.5%
Minority Interest	1	1	-1	-50.0%
Group Net Income	857	789	68	8.6%

2. Including Quality of Service

Note: figures may not add up due to rounding 1. Managerial Accounting

Consolidated Balance Sheet

€ mn	Dec. 31,2022	Dec. 31,2021	Δmn
PP&E	16,201	15,317	884
Intangible Asset	776	657	119
Financial Inv. and Other	509	380	129
Total Fixed Assets	17,485	16,353	1,132
Net WC	-2,733	-1,707	-1,026
Funds	-68	-48	-20
Net Capital Invested	14,684	14,598	87
Net Assets Held for Sale	61	118	-57
Total Net Capital Invested	14,745	14,716	30
Financed by:
Consolidated Net Debt	8,576	10,003	-1,426
Total Shareholder's Equity	6,169	4,713	1,456
Total	14,745	14,716	30

Consolidated Cash Flow

€ mn	2022	2021
Total Net Income	858	791
D&A¹	719	641
Net Change in Funds	20	-73
Operating Cash Flow	1,596	1,359
Δ Working Capital & Other²	932	-57
Cash Flow from Operating Activities	2,528	1,302
Capital Expenditures	-1,757	-1,521
Free Cash Flow to Equity	771	-219
Net Assets Held for Sale	57	-118
Dividends & Equity³	598	-494
Change in Net Cash (Debt)	1,426	-830

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.

Notes