Terna — Investor Presentation 2024

Mar 19, 2024

A Wider Vision

Agenda

E l i f T 's R l t v o u o n o e r n a o e	3
S t t r a e g y	9
F Y 2 0 2 3 R l t e s s u	1 5
2 0 2 4 2 0 2 8 G F i i l T d D i i d d P l i t r o p n a n c a a r g e s a n e n o c u v y –	2 2
C l i R k A W i d V i i o s n g e m a r s e r s o n :	3 0

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Evolution of Terna's Role

The Role of Terna as a TSO

EU and Italian decarbonization targets

Italy aligned with EU goals, increasing RES development targets with NECP1 '23

Notes: 1) National Energy and Climate Plan

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Key Factors for Italian decarbonization targets achievement

Terna's leadership in the Twin Transition

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Green by Nature, Social by Purpose

A Just Transition as a strategic objective

2024-2028 Investment Plan

Fostering investments to enable the Twin Transition

Notes: 1) Includes: non regulated capex and capitalized financial charges

Terna's main development projects in the 2024-2028 Plan

Benefits for the system

Digital Transition & Innovation

Network Engineering

Guarantee the progress and execution of projects through project management optimization and digitalization of construction sites

Transmission Operator

Optimize costs and guarantee the service level of the assets, working on the adoption of new systems and generating value from data

System Operator

Increase transmission capacity for the transition to RES, with co-pilot projects and "human-controlled AI"

Corporate

Ensure the identification and pro-active management of the Plan's risks, through ad-hoc platforms, integrated with employee equipment

Investments and scale-up of digital tools to support decisions and risk management

ESG Ambitions

Green by Nature

Science Based Target: alignment with 1.5 C° ambition, entailing the reduction of its absolute scope 1 and 2 GHG emissions 46% by 2030 (vs. 2019)

Nature: commitment to be "Science-based Target for Nature ready" in line with the developments of the Science-based Targets Network (SBTN)

Circular Economy: full integration of circular economy principles in the business model, by adopting circular criteria at all stages of the value chain, from procurement to disposal of assets

Social by Purpose

Safety: commitment to maximize safety in the workplace during the daily operations within the timeframe of the plan and beyond

Inclusion: enhancement of hiring programs that guarantee equal opportunities and the effective inclusion of every kind of diversity

ਵਿੱਚ

Stakeholder engagement: open dialogue and participation of local communities. Extend initiatives of listening to stakeholders on all significant projects

Terna's TSO role vital for achieving the energy transition and safeguarding stakeholders

Key Figures

	F Y 2 0 2 3		F Y 2 0 2 2	F Y 2 0 2 2 ∆ v s
	A l t c u a €m n	G i d u a n c e bn €	A l t c u a €m n
R e v e n u e s	3 1 8 7 ,	3 1 1	2 9 6 4 ,	% 7 +
E B I T D A	2 1 6 9 ,	2 1 2	2 0 5 9 ,	% 5 +
G N t r o p e u 1 I n c o m e	8 8 5		8 5 7	3 % +
2€ E P S ts ce n	4 4 0	3 4	4 2 6
C a p e x	2 2 9 0 ,	2 2	1 7 5 7 ,	3 0 % +
N D b t t e e	1 0 4 9 4 ,		8 5 7 6 ,

Growth in all P&L metrics, with 30% Capex acceleration YoY

Notes: 1) Attributable to Terna 2) €/cents per share

Revenues

Growth driven by both regulated and non regulated activities

Notes: figures may not add up due to rounding off

EBITDA

From EBITDA to Net Income

>3% Group Net Income increase vs. 2022

Notes: figures may not add up due to rounding off

Capex

30% increase in Capex

Cash Flow & Net Debt Evolution

€mn

Strong Operating cash flow generation

Notes: figures may not add up due to rounding off; 1) Including Other Fixed Assets Changes 2) Including Cash Flow Hedge accruals and other

2024 – 2028 Group Financial Targets and Dividend Policy

Domestic Regulated Activities

C A T E G O R Y	C U M U L A T E D C A P E X	M A I N P R O J E C T S
D l t e e o p m e n v	1 0 8 b € n	T h i L i k S A C O I 3 r r e n a n n y – – S A d i i L i k l i i d i t t r a c n o v n g g r c o n g e s o n s – – C l L i k R E S i i t t t e n r a n n e g r a o n – –
A R l d t s s e e n e w a a n E f f i i c e n c y	2 9 b € n	Q S l i f i t a o e c e u y r v – Q l i f P t u a y o r o c e s s e s – Q l i f h i t t t a o e e n r o n m e n u y v –
D f d O h t e e n c e a n e r	1 7 b € n	D i i l i i d R i l i t t g a z a o n a n e s e n c e – – N k M P h i l d C b t t e w o r a n a g e m e n y s c a a n y e r – E l i M h i S i t t e c r c a c n e s e c u r y –

~15.5 €bn of regulated Capex in the Plan period

Notes: Including EU contributions; figures may not add up due to rounding

Regulatory milestones

2 0 2 4	2 0 2 5	2 0 2 6	2 0 2 7	2 0 2 8
De is ion he t tp t c on o u u ba d la io fo he t t se re g u n r io d 2 0 2 4- 2 0 2 7 p er	W A C C da fo he te t up r io d 2 0 2 2 0 2 5- 7 p er	O S S R In le la io te t g ra re g u n		S f n W A C C ta t o ew r io d p er
				S f he ta t o t r n ew la io d, i h to t re g u ry p er w da d l i f f te ta up g en er a r i ia d inc ive te t cr r an en s la ion t re g u
C l i t t u r r e n r e g u a o r y p e r o	d			N l i d t e w r e g u a o r y p e r o
f Sta R O S S Ba rt o se		f le Sta R O S S Int rt o eg ra

Regulatory updates expected in next years, with the start of ROSS Integrale (2026) and the new regulatory period (2028)

Non-Regulated Activities

Guidance 2024 and 2028

	F Y 2 0 2 3	F Y 2 0 2 4	F Y 2 0 2 8
	A l t c u a bn €	G i d u a n c e bn €	G i d u a n c e bn €
R e e n e s v u	3 9 1	3 5 5	4 6 0
E B I T D A	2 1 7	2 4 2	3 2 5
C 1 a p e x	2 2 9	2 6	1 6 5 C l d 2 0 2 4- 2 0 2 8 t m a e u u
S E P € t c e n s	4 4	4 9	5 5

Increasing growth and value creation

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

Yield & Growth

Financial Efficiency and Financial Structure

• – Gross Debt @ ~87% Fix rate1
• – Average duration of ~6 years1

FINANCIAL RATING

	T e r n a		S o e v	i r e g n
	R i t a n g	O l k t u o o	R i t a n g	O l k t u o o
S & P	B B B +	P i i t o s e v	B B B	P i i t o s e v
M d 's o o y	B 2 a a	S b l t a e	B 3 a a	S b l t a e

• – FFO/Net Debt @~11% in 2028
• – Strong commitment to maintain current rating level
• – Average Cost of Net Debt 2024-2028 @ 3.3%

ESG RATING

• –Moody's ESG: Advance
• –Sustainalytics: Negligible risk
• – S&P Global CSA (Corporate Sustainability Assessment) score: 87/100
• –CDP (former Carbon Disclosure Project): A-
• –ISS ESG: Prime

Maintaining financial stability and low-risk profile

Notes: 1) As of FY2023. Calculated on medium-long term debt

Closing Remarks: A Wider Vision

Closing Remarks: A Wider Vision

1

2

3Maintaining financial stability and low-risk profile

A Wider Vision

A Twin Transition for a Just Transition

2024 Total Grid Fee update1

Notes: 1) ARERA Resolutions and Terna's preliminary estimates, net of pass-through items

P&L Targets

Consolidated Income Statement1

€ m n	F Y 2 3	F Y 2 2	Δm n	Δ %
To ta l Re ve nu e	3, 1 8 7	2, 9 6 4	2 2 2	7. 5 %
Re la d Ac iv i ies te t t g u	2, 6 0 7	2, 4 2 5	1 2 8	0 % 5.
Tra iss ion ns m	2, 1 0 8	1, 9 6 9	1 3 9	7. 1 %
D isp tc h ing a	4 3 1	4 5 0	-1 9	-4. 2 %
O t he ² r	5 1	5 6	-6	-9. 9 %
I F R I C 1 2	8 1	6 7	1 3	1 9. 6 %
No Re la te d a d In ter t ion l Ac t iv i t ies n g u n na a	5 1 7	4 2 2	9 5	2 2. 4 %
To ta l Co ts s	1, 0 1 8	9 0 5	1 1 3	1 2. 5 %
Re la d Ac iv i ies te t t g u	8 4 5	3 5 5	4 9	9. 1 %
La bo Co ts ur s	2 8 5	2 6 6	1 9	1 % 7.
Ex ter l Co ts na s	1 8 7	1 7 7	1 0	5. 9 %
O t he ² r	3 1	2 5	6	2 5. 3 %
I F R I C 1 2	8 1	6 7	1 3	1 9. 6 %
No Re la te d Ac t iv i t ies n g u	4 3 0	3 6 4	6 6	% 1 8. 1
In ion l Ac iv i ies ter t t t na a	4	6	-2	-3 4. 4 %
E B I T D A	2, 1 6 9	2, 0 5 9	1 0 9	5. 3 %
& D A	8 0 6	7 2 6	8 1	% 1 1. 1
E B I T	1, 3 6 2	1, 3 3 3	2 9	2. 2 %
C Ne t F ina ia l ha nc rg es	1 1 8	1 0 0	1 8	% 1 7. 6
f Pr Ta Pr i t e x o	1, 2 4 5	1, 2 3 3	1 1	% 0. 9
Ta xe s	3 6 4	3 5 5	9	2. 5 %
Ta Ra te ( % ) x	2 9. 3 %	2 8. 8 %	-	0. 5 p p
Ne Inc t om e	8 8 0	8 8 7	2	0. 3 %
Ne Pr t f F i t / ina ( Lo ia ) l Fro C ha D isc t inu d Op t ion o nc ss m rg es on e era s	3	-2 0	2 3	1 1 2. 3 %
To l Ne Inc ta t om e	8 8 3	8 5 8	2 5	2. 9 %
M ino i ty In ter t r es	-3	1	-3	-
Gr Ne t Inc ou p om e	8 8 5	8 5 7	2 8	3. 3 %

Notes: figures may not add up due to rounding; 1) Managerial Accounting 2) Including Quality of Service

Consolidated Balance Sheet

€ m n	De 3 1, 2 0 2 3 c.	De 3 1, 2 0 2 2 c.	Δm n
& P P E	1 7, 5 9 7	1 6, 2 0 1	1, 3 9 6
In tan i b le As t g se	8 6 7	7 7 6	9 1
F in ia l In d O t he an c v. an r	5 0 1	5 0 9	-8
To l F ixe d As ta ts se	1 8, 9 6 5	1 7, 4 8 5	1, 4 7 9
Ne W C t	-2 1 7 5 ,	-2 3 3 7 ,	8 5 5
Fu ds n	-3 3	-6 8	3 5
Ca Ne t i ta l Inv te d p es	1 6, 7 5 7	1 4, 6 8 4	2, 0 7 3
Ne t As ts He l d fo Sa le se r	8 0	6 1	1 9
To ta l Ne t Ca i ta l Inv te d p es	1 6, 8 3 8	1 4, 7 4 5	2, 0 9 2
F in d by an ce :
Co l i da te d Ne t De b t ns o	1 0, 4 9 4	8, 5 7 6	1, 9 1 8
To ta l S ha ho l de 's Eq i ty re r u	6, 3 4 3	6, 1 6 9	1 7 4
To ta l	1 6, 8 3 8	1 4, 7 4 5	2, 0 9 2

Consolidated Cash Flow

€ m n	F Y 2 3	F Y 2 2
To ta l Ne t In co m e	8 8 3	8 8 5
1 D & A	7 8 8	7 1 9
Ne t C ha in Fu ds ng e n	-3 5	2 0
O in Ca h F low t p er a g s	1, 6 3 6	1, 5 9 6
2 Ca & O Δ W k ing i ta l t he or p r	-5 3 6	9 3 2
Ca h F low fro O t in Ac t iv i t ies s m p er a g	1, 1 0 0	2, 5 2 8
Ca i l Ex d i ta tur p p en es	-2 2 9 0 ,	-1 7 5 7 ,
Fr Ca h F low Eq i to ty ee s u	-1 1 9 0 ,	1 7 7
fo Sa Ne t As ts He l d le se r	-1 9	5 7
3 D iv i de ds & Eq i ty n u	-7 0 9	5 9 8
C ha in Ne Ca h ( De b ) t t ng e s	-1 9 1 8 ,	1, 4 2 6

Notes: figures may not add up due to rounding; 1) Net of assets' disposal 2) Including Other Fixed Assets Changes 3) Including Cash Flow Hedge accruals, Hybrid Green Bond and other

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