3. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 3
Electricity Market Trends
Electricity Demand Change
79.0 78.5
1Q14 1Q15
75.9 75.6
2Q14 2Q15
-0.6%
-0.5%
Demand as Reported (TWh)
Signs of stabilization
Electricity consumption at peak level in July
Higher Dispatching Market Efficiency
4. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 4
Regulatory Review
Published Consultation Documents on WACC and Transmission
Working on the responses
Electricity Transmission Review
January
Consultation
Document
5/2015/R/eel
July
Consultation
Document
335/2015/R/eel
August/
September
Consultation
Docs
By Year End
Final Outcome
June
Consultation
Document
275/2015/R/com
Fall
Consultation
Docs
By Year End
Final Outcome
2015 Expected Timeline
WACC Review
5. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 5
Executing the Strategy – 1H15 Highlights (1/2)
Business Process Reengineering
Efficiency and Effectiveness enhanced
New Organizational Structure
Requests of Exits ahead of target
Hirings/Exits ratio confirmed at ~70%
Voluntary Turnover Programme
Progresses on Main Projects
Dedicated SPVs Incorporated
Non Regulated Activities
Opex Discipline
6. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 6
Executing the Strategy – 1H15 Highlights (2/2)
Proceeding with the due diligence
Costs/Benefits Analysis
Italian Railway HV Grid
Bought ~480mn of 2017 4.125% Notes
Proactive Debt Maturities Management
Financial Charges Profile Rebalanced
Bond Buyback
7. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 7
Financial highlights
439€mn
Total capex
6,876€mn
Net Debt
1,002€mn
Revenues
+5.5%yoy
310€mn
Net profit
+13.1%yoy
767€mn
EBITDA
+1.9%yoy
H1 2015 at a glance
KEY FINANCIALS
8. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 8
887
1005.6
911
12
24
36 -4 -5
816
5235
31
1H14 ∆
Regulated
Activities
∆
Tamini
∆
Other
Non Regulated
Activities
∆
IFRIC
1H15
Regulated Activities
IFRIC12
Tamini
Other Non Regulated Act.
1. Tamini consolidation since 20th May 2014
1H15 Results
Revenues
950
1,002+52
KEY FIGURES TOTAL REVENUES EVOLUTION
Total Revenues
1,002€mn
+5.5%yoy
Regulated Activities
911€mn
+2.8% yoy
Non Regulated Activities
83€mn
€mn
1
Regulated Activities
Tamini
IFRIC12
Other Non Regulated Act.
€ mn 1H14 1H15 Δ yoy Δ %yoy
Regulated Activities 887 911 24 2.8%
Non Regulated Act. 51 83 32 63.8%
o/w Tamini 16 52 36 226%
Other Non Regulated Act. 35 31 -4 -10.3%
IFRIC12 12 8 -5 -37.9%
Total 950 1,002 52 5.5%
1
9. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 9
16
5235
36 -4
31
1H14 ∆
Tamini
∆
Other
Non Regulated
Activities
1H15
Other Non Regulated Act.
Tamini
817 839
58 23 4 -3 6213 10
1H14 ∆
Transmission
∆
Dispatching
∆
Other
1H15
Transmission
Dispatching
Other
1H15 Results
Revenues Analysis
887 911
+24
+32
Tamini
+36€mn
€mn
€mn
1
REGULATED ACTIVITIES
NON REGULATED ACTIVITIES
1. Tamini consolidation since 20th May 2014
NOTE: figures net of IFRIC12 – Managerial Accounting
Transmission
RAB growth
51
83
Tamini
Other Non Regulated Act.
10. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 10
162
235.4
169
12
6
35
1 -5
8
14
50
9
10
1H14 ∆
Regulated
Activities
∆
Tamini
∆
Other
Non Regulated
Activities
∆
IFRIC
1H15
Regulated Activities
IFRIC12
Tamini
Other Non Regulated Activities
1H15 Results
Opex
1. Tamini consolidation since 20th May 2014
197
235+38
KEY FIGURES TOTAL COSTS EVOLUTION
Total Costs
235€mn
€mn
1
Regulated Activities
169€mn
Non Regulated Activities
59€mn
Regulated Activities
Tamini
IFRIC12
Other Non Regulated Act.
11. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 11
14
50
9
35
1 10
1H14 ∆
Tamini
∆
Other
Non Regulated
Activities
1H15
97 97
59
0 -3 9
56
7 16
1H14 ∆
Labour
Costs
∆
External
Costs
∆
Other
1H15
Labour Costs
External Costs
Other
1H15 Results
Opex Analysis
162 169
+6
+36
Stable
on Other Non Regulated Act.
€mn
€mn
1
REGULATED ACTIVITIES
NON REGULATED ACTIVITIES
1. Tamini consolidation since 20th May 2014
NOTE: figures net of IFRIC12 – Managerial Accounting
Labour and External Costs
under control
23
59
Tamini
Other Non Regulated Act.
Controllable costs
12. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 12
From EBITDA to Net Income
KEY FIGURES PROFIT & LOSS
Group EBITDA
767€mn
Group EBITDA Margin
76.5%
Group Net Income
310€mn
+1.9%yoy
+13.1%yoy
€mn
1H15 Results
Cost of Net Debt
2.3%
767
524 460
310
243
64
150
EBITDA D&A EBIT Net
Financial
Expenses
PBT Taxes Group
Net
Income
€ mn 1H14 1H15 Δ Δ %
EBITDA 753 767 14 1.9%
Ebitda % 79.2% 76.5% -2.7pp
D&A 235 243 8 3.4%
EBIT 517 524 6 1.2%
Net Financial Expenses 64 64 -1 -0.9%
PBT 453 460 7 1.5%
Tax Rate 40% 33% -7pp
Taxes 179 150 -29 -16.2%
Group Net Income 274 310 36 13.1%
13. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 13
Capex
KEY FIGURES BREAKDOWN
1H15 Total Capex
439€mn
1H15 Results
NOTE: Figures in accordance with AEEGSI resolutions
1. Of which 16mn Capitalized Financial Charges
Development Capex
332€mn
Category (€mn) 1H14 1H15 Δ yoy Δ % yoy
+2% 148 189 41 27%
+1.5% 124 143 19 16%
Development Capex 272 332 60 22%
Maintenance (Base Return) 93 80 -14 -15%
Regulated Capex 366 412 46 13%
Other
1 20 27 7 33%
Total Group Capex 386 439 53 14%
14. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 14
6,615 6,8766,966
587
266 439
64 261
Net Debt Evolution & Financial Structure
KEY FIGURES
Net Debt
6,876€mn
Fixed/floating ratio3
54/46
GROSS DEBT BREAKDOWN
1H15 Results
8.4€bn
1. Net Income + D&A + Net Financial Charges +/- Net Change in Funds (see Annex “Consolidated Cash Flow” for details)
2. Including Other Fixed Assets Changes, Change in Capital & Other
3. Calculated on Net Debt
Dec.31,
2014
Operating
Cash
Flow1
Δ WC
&
Other2
June. 30,
2015
-90
Capex
FCF AND NET DEBT EVOLUTION
€mn
Debt
Service
Free Cash Flow
415
Dividends
74%
20%
6%
Terna SpA Bonds
EIB Loans
Banks
17. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 17
28.0
23.9
26.3
25.7 26.2
25.6
26.7
27.0
26.3
24.6
24.8
26.6
23
25
27
29
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Montly Energy Demand (normalized)
Prior Year
Annex
Electricity Market Trends – Last 12 Months
TWh
TWh
DEMAND AS REPORTED (TWh)
NOTE: 2014 final figures, 2015 provisional figures (as of July 2015)
1. For temperature and number of days
DEMAND ADJUSTED1 (TWh)
28.2
23.8
26.2 26.4
25.5 25.7
26.8
24.9
26.8
24.2
25.0
26.3
23
25
27
29
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Monthy energy demand
Prior Year
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
YoY Chg% -5.1% -5.5% 0.4% -1.3% -2.7% -3.4% -2.0% -0.7% 1.1% 0.0% -1.3% -0.1%
1H14 1H15 Δ %
154.9 154.1 -0.5%
1H14 1H15 Δ %
157.9 156.1 -1.1%
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
YoY Chg% -2.9% -3.1% -0.2% -1.3% -2.0% -2.9% -1.9% -2.0% 0.0% -1.6% -0.1% -1.1%
18. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 18
Consolidated Income Statement1
Annex
NOTE: Tamini consolidation since 20th May 2014
1. Managerial Accounting
2. Quality of Service + Other Revenues
€ mn 1H14 1H15 Δmn Δ%
Transmission 817 839 23 2.8%
Dispatching 58 62 4 7.8%
Other 2
13 10 -3 -22%
Regulated Activities 887 911 24 2.8%
Non Regulated Act. 51 83 32 64%
IFRIC12 12 8 -5 -38%
Total Revenues 950 1,002 52 5.5%
Labour Costs 97 97 0 0.1%
External Costs 59 56 -3 -5.2%
Other 7 16 9 142%
Regulated Activities 162 169 6 3.9%
Non Regulated Act. 23 59 36 159%
IFRIC12 12 8 -5 -38%
Total Costs 197 235 38 19.3%
EBITDA 753 767 14 1.9%
D&A 235 243 8 3.4%
EBIT 517 524 6 1.2%
Net Financial Charges 64 64 -1 -0.9%
Pre Tax Profit 453 460 7 1.5%
Taxes 179 150 -29 -16%
Tax Rate (%) 40% 33%
Group Net Income 274 310 36 13.1%
19. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 19
Group Costs Breakdown
Annex
NOTE: Tamini consolidation since 20th May 2014
€ mn 1H14 1H15 Δmn Δ%
Labour Costs 104 112 8 8%
Services 58 66 8 13%
Materials 15 32 18 121%
Other 8 18 10 113%
IFRIC12 12 8 -5 -38%
Total Costs 197 235 38 19.3%
21. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 21
Consolidated Balance Sheet
Annex
NOTE: Tamini consolidation since 20th May 2014
€ mn Dec. 31,2014 Jun. 30,2015 Δmn
PP&E 10,779 10,983 204
Intangible Asset 453 436 -16
Financial Inv. and Other 89 90 0
Total Fixed Assets 11,320 11,509 188
Net WC -821 -1,056 -235
Funds -441 -413 28
Total Net Invested Capital 10,059 10,040 -19
Financed by
Consolidated Net Debt 6,966 6,876 -90
Total Shareholder's Equity 3,093 3,164 71
Total 10,059 10,040 -19
D/E Ratio 2.3 2.2
D/D+E Ratio 0.69 0.68
Number of Shares ('000) 2,010 2,010
22. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 22
€ mn 1H14 1H15 Δmn
Group Net Income 274 310 36
D&A 1
235 242 7
Debt Service 64 64 -1
Net Change in Funds -3 -28 -25
Operating Cash Flow 570 587 17
∆ Working Capital & Other 2
-286 266 552
Cash Flow from Operating Activities 284 854 569
Capital Expenditures -386 -439 -53
Free Cash Flow -102 415 516
Dividends -261 -261 0
Debt Service -64 -64 1
Change in Net Cash (Debt) -427 90
Consolidated Cash Flow
Annex
NOTE: Tamini consolidation since 20th May 2014
1. Net of assets’ disposal
2. Including Other Fixed Assets Changes, Change in Capital & Other
23. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 23
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24. 1H15 CONSOLIDATED RESULTS JULY 28h 2015
Investor Relations 24
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