9M 2019 Consolidated Results Presentation

1
9M19 CONSOLIDATED RESULTS NOVEMBER 13th 2019
November 13th 2019
9M19 Consolidated Results

2
Agenda
9M19 Results 6
Closing Remarks 16
Highlights 3
Annexes 17

3
Highlights

4
26.9
26.3 26.5
28.4
25.5
26.4
24.0
25.2
27.8
31.4
26.5 26.7
20
22
24
26
28
30
32
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Monthy energy demand
Previous Year
Demand Evolution – Last 12 months
DEMAND AS REPORTED (TWh)
Highlights (1/2)
Note: 2017 final figures, 2018 and 2019 preliminary figures
Increasing contribution from wind and PV production
9M19 data:
▪ National Demand at 242 TWh, o/w 36% covered by RES
▪ Net Total Production at 216 TWh
Wind increased by 14%
PV increased by 6%
YoY
Change
9M2019
Δ %
-0.1%
9M19 9M18
241.9 242.2
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2.1% -1.3% -1.5% 4.4% -2.2% -5.0% -0.6% -2.9% 2.9% 3.1% -0.2% -1.2%

5
Strong capex acceleration confirmed
9M 2019 Key Figures
1. 9M18 revenues reclassified in accordance with new IFRS. No impact at EBITDA level
2. Attributable to Terna
9M 2018€mn
Revenues
EBITDA
Group Net Income2
Capex
Δ vs 9M189M 2019
1,666 1,6051
1,278 1,230
553 542
670 561
Highlights (2/2)
+4%
+4%
+2%
+19%
8,250 7,899Net Debt
FY 20189M 2019

6
9M19 Results

7
1,605 1,666
1,481 1,518
118 130
6
1737 12 11
9M18 ∆
Regulated
Activities
∆
Non Regulated
Activities
∆
International
Activities
9M19
Revenues
Note: figures may not add up due to rounding
1. Including IFRIC12
2. Construction margin, including IFRIC12
Insourcing attività di O&M Rete FS
Capex execution as a driver of our domestic growth
1 2
€mn
+60
+3.8%
Regulated Activities1
Non Regulated Act.
International Act.2
9M 2019 results

8
118 130
6
17124 12
11 148
9M18 ∆
Non Regulated
Activities
∆
International
Activities
9M19
1,451 1,480
17
28 10 -1
27
12 11
1,481 1,518
9M18 ∆
Transmission &
Dispatching
∆
Other
∆
IFRIC12
9M19
Revenues Analysis
€mn
REGULATED
€mn
NON REGULATED AND INTERNATIONAL
+37
+2.5% +23
+18.8%
Tamini’s turnaround ongoing
Transmission & Dispatching
Other
IFRIC 12
9M 2019 results
Non Regulated Act.
International Act.

9
375 387
288 285
81 94
6
8-3 13 2
9M18 ∆
Regulated
Activities
∆
Non Regulated
Activities
∆
International
Activities
9M19
1
+12
+3.3%
€mn
Opex
1. Including IFRIC12
Insourcing attività di O&M Rete FSEfficiency program well on track
9M 2019 results
Regulated Activities1
Non Regulated Act.
International Act.

10
81
94
6
13
2
887
103
9M18 ∆
Non Regulated
Activities
∆
International
Activities
9M19
156 160
120
4 -6 -1
114
12 11
288 285
9M18 ∆
Labour
Costs
∆
External
Costs
& Other
∆
IFRIC12
9M19
Opex Analysis
Insourcing attività di O&M Rete FSSkills insourcing as a driver of improved performance
€mn
REGULATED
€mn
-3
-1.1%
+15
+17.5%
Labour Costs
External Costs & Other
IFRIC 12
9M 2019 results
Non Regulated Act.
International Act.

11
1,193 1,233
40
9M18 ∆ 9M19
1,230 1,278
9M18 9M19
EBITDA
Insourcing attività di O&M Rete FSRobust EBITDA improvement
€mn
TOTAL EBITDA
€mn
REGULATED
€mn
+48
+3.9%
9M 2019 results
37 45
8
9M18 ∆ 9M19

12
1,278
842
553 542
436
61
227
EBITDA D&A EBIT Net
Financial
Expenses
Taxes Group
Net Income
Group
Net Income
9M18
From EBITDA to Net Income
1. Attributable to Terna. Excluding 2.1 €mn of Minorities in 9M19 and 3.5 €mn in 9M18
Solid value creation for our shareholders
1
€mn
1
+2% YoY
9M 2019 results

13
595
7%
93%
Incentivized Investments (5.6% +1%) Other Regulated (5.6%)
68 40
434 554
59
75561
670
9M18 9M19
Incentivized Investments Other Regulated Other
Capex
Insourcing attività di O&M Rete FSStrong Group’s commitment to serve Italian energy transition
TOTAL CAPEX
€mn
21
REGULATED CAPEX
1. I-NPR1+O-NPR1 in line with ARERA Resolution n. 579/17
2. Of which about 9 €mn of Capitalized Financial Charges in 9M19 and 12 €mn in 9M18
9M 2019 results
595
€mn

14
7,899
8,250
886
85
670
481
Dec.31,
2018
Operating
Cash Flow
Δ WC & Other Capex Dividends
&
Equity
Sep.30,
2019
1. Including Other Fixed Assets Changes
2. Including Cash Flow Hedge reserve and other
Cash Flow & Net Debt Evolution
Solid operating cash flow generation
€mn
2
Free Cash Flow to Equity +131
+350
1
9M 2019 results

15
81%
17%
2%
Terna SpA Bonds
EIB
Banks
Net Debt Evolution & Financial Structure
1. Percentages and key ratios calculated on Gross Debt nominal value
2. IAS value
Resilient financial structure
GROSS DEBT BREAKDOWN KEY RATIOS
1 1
Fixed/Floating Ratio
Calculated on Gross Debt
82% Fixed
Duration
4.9 years
10.6€bn2
9M 2019 results

16
Closing Remarks
Strong capex acceleration confirmed
Robust EBITDA improvement
Capex execution as a driver of our domestic growth
Plan execution well on track
Solid value creation for our shareholders

17
Annexes

18
€ mn 9M19 9M18 Δmn Δ%
Total Revenue 1,666 1,605 60 3.8%
Regulated Activities 1,518 1,481 37 2.5%
Transmission 1,395 1,348 47 3.4%
Dispatching 85 103 -18 -17.7%
Other 27 17 10 57.5%
IFRIC12 11 12 -1 -9.2%
Non Regulated Activities 130 118 12 10.3%
International Activities 17 6 11 185.0%
Total Costs 387 375 12 3.3%
Regulated Activities 285 288 -3 -1.1%
Labour Costs 160 156 4 2.7%
External Costs 103 106 -2 -2.1%
Other 10 14 -4 -28.0%
IFRIC12 11 12 -1 -9.2%
Non Regulated Activities 94 81 13 16.1%
International Activities 8 6 2 36.7%
EBITDA 1,278 1,230 48 3.9%
D&A 436 400 36 9.0%
EBIT 842 830 12 1.5%
Net Financial Charges 61 67 -6 -8.5%
Pre Tax Profit 781 763 18 2.3%
Taxes 227 218 8 3.8%
Tax Rate (%) 29.0% 28.6% +0.4 pp
Total Net Income 555 545 10 1.8%
Minority Interest 2 4 -1 -40.0%
Group Net Income 553 542 11 2.0%
1. Managerial Accounting
2. 9M18 reclassified in accordance with new IFRS. No impact at EBITDA level
3. Including Quality of Service
Consolidated Income Statement1
Annex
3
3
2

19
Consolidated Balance Sheet
Annex
€ mn
PP&E
Intangible Asset
Financial Inv. and Other
Total Fixed Assets
Net WC
Funds
Net Capital Invested
Financed by:
Consolidated Net Debt
Total Shareholder's Equity
Total
D/E Ratio
D/D+E Ratio
Number of Shares (mn)
Sep. 30,2019 Dec. 31,2018 Δmn
13,457 13,244 212
521 519 2
345 320 25
14,323 14,084 239
-1,739 -1,823 83
-206 -308 101
12,377 11,954 423
8,250 7,899 350
4,127 4,054 73
12,377 11,954 423
2.0 1.9
0.7 0.7
2,010 2,010

20
€ mn 9M19 9M18
Total Net Income 555 545
D&A 433 397
Net Change in Funds -101 -38
Operating Cash Flow 886 904
Δ Working Capital & Other -85 169
Cash Flow from Operating Activities 801 1,073
Capital Expenditures -670 -561
Free Cash Flow to Equity 131 512
Dividends & Equity -481 -307
Change in Net Cash (Debt) -350 205
1. Net of assets’ disposal
2. Including Other Fixed Assets Changes
3. Including Cash Flow Hedge accruals and other
Consolidated Cash Flow
Annex
1
2
3

21
€ mn 9M19 9M18 Δ mn Δ%
Incentivized Investment 40 68 -27 -40%
Other Reguleted 554 434 120 28%
Regulated Capex 595 502 93 18%
Other 75 59 16 27%
Total Group Capex 670 561 109 19%
Capex
Annex
1. I-NPR1+O-NPR1 in line with ARERA Resolution n. 579/17
2. Of which about 9 €mn of Capitalized Financial Charges in 9M19 and 12 €mn in 9M18
1
2

22
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Disclaimer

23
Notes

24
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9M 2019 Consolidated Results Presentation

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