This document summarizes a presentation given by Antonio Llardén, the Executive Chairman of Enagás, a Spanish natural gas company. The presentation discusses how Enagás faced the economic crisis by anticipating problems early, reacting with efficiency plans and financing changes, acting through investments and acquisitions, and explaining their strategies transparently. Key points included intensifying a cost control plan, acquiring new assets, expanding internationally, and improving corporate governance with policies like increasing board independence. Enagás met financial targets over the past six years despite economic challenges and transformed into a more internationally-focused company with strong results.

1. Corporate strategy
in times of crisis
IESE. Barcelona, 24 January 2014
Antonio Llardén, Enagás Executive Chairman

2. 1. About Enagás
2. How to face the crisis
3. New environment, new strategy
4. Corporate governance
5. Results
6. Conclusions
Index

3. 3
1. About Enagás
Enagás is the leading natural gas transmission company in Spain
and Technical Manager of the Gas System, and is authorised as an
independent TSO by the European Union.

4. 4
1. About Enagás

5. 5
1. About Enagás
Enagás shareholder structure
 Enagás is an infrastructure company
 It is an independent company that is not part of any vertically
integrated group
 Since the IPO of the company in 2002, it has been listed in the Ibex 35
(€ Mn) 2012
Net profit 379.5
EBITDA 934.3
Investment 761.4
Assets put into operation 994.4
(GWh)
Demand for natural gas
transported
in the System
418,964
Key figures

6. 6
1. About Enagás
2. How to face the crisis
3. New environment, new strategy
4. Corporate governance
5. Results
6. Conclusions
Index

7. 7
Growing in times of crisis:
Explain
Act
React
Anticipate1
2
3
4
2. How to face the crisis

8. 8
1. About Enagás
2. How to face the crisis
3. New environment, new strategy
4. Corporate governance
5. Results
6. Conclusions
Index

9. 9
3. New environment, new strategy
Efficiency drive
Cost control and
efficiency plan
 Implemented in 2008
 Intensified and extended to 2014
 Better results each year
Tight grip over operating costs
NOTE: Estimates for 2013 are based in 2013 budget and Company targets

10. 10
3. New environment, new strategy
Unlocking the value of the
company's know how
Acquisition of core business assets
Vertically-integrated energy companies dispose of “non-strategic assets”
Drawing on Enagás' technological know-how, experience, and operating and
financial resources
Acquisitions that fit with debt and profitability targets established in the
Strategic Plan
Positioning of the company as a strategic partner
40 years' experience of global management of a complex gas
system and the LNG chain

11. 11
3. New environment, new strategy
International activity
Enagás' know-how in LNG a decisive factor for vendors and
other partners
(1) 51% in an SPV owning 40%, in partnership with Oman Oil.

12. 12
3. New environment, new strategy
Anglo-Saxon approach
in financing
 56% debt in fixed rate
 Mainly Bank financing
 Excelent ratings S&P/Fitch: AA-/A+
 Liquidity: €417 mill
Situation on 31/12/2012
51%
49%
38%
40%
22%
ICO+BEI Bank debt
Capital markets
Before crisis
(31/dic/2006)
36%
64%
Bank debtICO+BEI
 82% debt in fixed rate
 Diversified and balanced sources of funding
 Ratings S&P/Fitch: BBB/A- (made conditional to
Spain´s Kingdom rate)
 Liquidity €2.232 mill
Lowest financial cost of the non financial IBEX-35 companies

13. 13
3. New environment, new strategy
Adaptation of the company's
corporate governance policy
One of the highest free floats
in the Ibex 35 index
85%
One of the companies on the Spanish
stock market with the largest number
of international investors
75%
Enagás complies with the most demanding national and international
corporate governance recommendations
Main profile of
international
investors: long-
term investors,
pension funds
and wealth
funds

14. 14
3. New environment, new strategy
Growth of asset base and workforce
Growth of gross fixed
assets
Workforce
x2 +20%
In a high crisis context, Enagás has duplicated its size creating
employment

15. 15
3. New environment, new strategy
Strong commitment to CSR
Enagás is member of the most relevant sustainability
indexes: DJSI, FTSE4Good, Global Compact, Ethibel ….
In 2011 Enagás was world leader in DJSI
Enagás’ management model has achieved
the European Excellence Awards 500+ EFQM
Enagás is adhered to the International Integrated
Reporting Council (IIRC) to develop an Integrated
Reporting Framework
Enagás´ has been verified as Family-Responsible,
Equal opportunities and Top Employers Company

16. 16
3. New environment, new strategy
Explain: transparency and
communication with the stakeholders
Regulators
Market
players
Banks
MediaInvestment
funds
Government
Shareholders

17. 17
1. About Enagás
2. How to face the crisis
3. New environment, new strategy
4. Corporate governance
5. Results
6. Conclusions
Index

18. 18
Board limited to a maximum of 17 members
Remuneration of the Board of Directors disclosed individually
Appointments, Remuneration and Corporate Responsibility Committee
Increase in number of women directors  2 women on the board of directors
Majority of Independent directors on the Board and in the two
committees
Appointment of a Lead Independent Director
Electronic voting/forum for shareholders
Every Committee of the Board is chaired by an Independent Board member
External assessment of Internal Control over Financial Reporting system in
line with Sarbanes-Oxley Act requirements
4. Corporate governance
In 2007, Enagás aligned its internal regulations with the recommendations of the
Unified Good Governance Code and has adopted various measures in this regard since:
2007
2009
2011
2012
NOTE: Currently the Board has 15 members, 60% Independent and 20% women, percentages higher than the
average for Ibex 35 companies
Importance
of proxy
advisors as
voting
prescribers
2010
2008
Separation of functions (Chairman/CEO) & CEO appointment
Establish in By-laws: maximum number of Directors (15),
maximum number of boards of listed companies on which
Directors may sit (5), Committees chaired and with majority
of Independents

19. 19
4. Corporate governance
Thanks to these measures, and despite the majority of investors being foreign, all the
resolutions proposed in the 2013 Shareholders’ Meeting were adopted with
practically 100% of the votes in favour:
The recommendations of the main Proxy Advisors (ISS and Glass Lewis)
were favourable
1 99.720% 5.1 99.339% 5.5 99.549%
2 99.557% 5.2 99.172% 6 99.861%
3 99.779% 5.3 99.308% 7 96.440%
4 98.502% 5.4 95.892% 9 99.952%
% approval of agenda items in the 2013 GSM

20. 20
1. About Enagás
2. How to face the crisis
3. New environment, new strategy
4. Corporate governance
5. Results
6. Conclusions
Index

21. 21
5. Results
‐70%
‐60%
‐50%
‐40%
‐30%
‐20%
‐10%
0%
10%
20%
d‐06 d‐07 d‐08 d‐09 d‐10 d‐11 d‐12 d‐1
Ibex Enagas
Ibex
-29.9%
Enagás
+7,8%
Enagás stock price evolution vs Ibex 2007-2013 during the validity of our Strategic Plan
3

22. 22
5. Results
 The company has met, and even surpassed, its guidance for the sixth
consecutive year despite the challenging economic environment.
 Enagás has managed to attract and retain foreign capital, from both investors
and lenders.
 Enagás has known how to continue to pursue its main corporate purpose
(supply security, maintenance of the Spanish gas infrastructure network,
necessary investments, etc.) while simultaneously transforming itself from a
medium-sized listed company into an internationally-focused business with a far
more Anglo-Saxon governance model and ambitious future goals.
NOTE: Estimates for 2013 are based in 2013
budget and Company targets

23. 23
1. About Enagás
2. How to face the crisis
3. New environment, new strategy
4. Corporate governance
5. Results
6. Conclusions
Index

24. 24
Anticipate1
 Stop of interbank market on September 2007
 Public capital injections in banks (USA, France, UK, Germany, Netherlands,
Switzerland…)
1
React1
 Efficiency plans
 Change in financing policy
 We faced an overhang risk in the Stock Market
 Internationalization
Act
1
 First entrance in capital markets
 Investment policies in line with the new environment
 Acquisitions of new assets
 New international investors
Explain
1
 Transparency with shareholders, banks, rating agencies and regulators
2
3
4
6. Conclusions
Growing in times of crisis:

25. Thank you for your
attention
IESE. Barcelona, 24 January 2014