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Terna - FY 2021 Consolidated Results Presentation

The document provides a summary of Terna's consolidated results for fiscal year 2021. Key highlights include: - Revenues increased 5% to €2.605 billion, driven by growth in both regulated and non-regulated activities. - EBITDA grew 2% to €1.855 billion due to contributions from regulated activities. - Group net income was in line with the previous year at €789 million. - Capex increased 13% to €1.521 billion to support Italy's energy transition goals. - Net debt rose to €10.003 billion but key financial ratios remained solid.

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FY 2021 Rome, March 17th 2022 Consolidated Results
Agenda Highlights FY 2021 Results Annexes 19 8 3 2
Highlights 3
Main achievements Highlights Ongoing valorization of LatAm activities INTERNATIONAL ACTIVITIES Authorization process better than expected REGULATED ACTIVITIES Towards energy transition SUSTAINABILITY Inclusion in the main international sustainability indexes 9.82 € cents/share, paid in November as 2021 Interim Dividend SHAREHOLDERS REMUNERATION 4
DEMAND AS REPORTED (TWh) Electricity demand in line with pre-Covid levels ▪ National Demand at 318 TWh, o/w ~36% covered by RES ▪ Net Total Production at 278 TWh, o/w ~41% covered by RES FY 2021 Note: 2020 final figures, 2021 preliminary figures Δ % 5.6% FY21 FY20 318.1 301.2 Demand Evolution – Last 12 months Highlights 27.1 24.8 26.4 23.9 24.4 27.2 30.4 26.6 27.0 26.4 26.4 27.4 18 20 22 24 26 28 30 32 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Monthly energy demand Previous Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -1.2% -3.2% 11.5% 21.8% 7.8% 13.4% 5.9% 3.4% 2.5% 1.5% 3.8% 5.9% YoY Chg% 5
1. Attributable to Terna 2. €/cents per share FY 2021 Key Numbers Highlights Strong capex acceleration delivered Revenues +5% EBITDA +2% Group Net Income1 In line Capex +13% Net Debt 9,173 2,514 1,830 786 1,351 EPS2 €cents 10,003 2,605 1,855 789 1,521 39.3 Restated €mn Actual €mn 39.1 FY 2020 FY 2021 ∆ vs FY 2020 restated Actual €mn 9,173 2,490 1,811 786 1,351 39.1 6
1. Attributable to Terna 2. €/cents per share FY 2021 Key Numbers Restated* Highlights 2021 guidance met and exceeded * Guidance and FY 2020 restated with International Activities held for sale Revenues EBITDA Group Net Income1 Capex Net Debt 10,003 2,605 1,855 789 1,521 2.57 1.84 1.4 EPS2 €cents Guidance €bn Actual €mn 39.3 39 FY 2021 Guidance restated €bn 2.53 1.81 1.4 39 7
FY 2021 Results 8
1. Including IFRIC12 Revenues increase driven both by Regulated and Non Regulated Activities Note: figures may not add up due to rounding Revenues FY 2021 Results €mn +114 +4.6% 2,149 2,254 341 351 0.5 0.4 2,490 105 10 -0.1 2,605 FY20 ∆ Regulated Activities ∆ Non Regulated Activities ∆ International Activities FY21 1 Regulated Activities1 Non Regulated Act. International Act. 9
Note: figures may not add up due to rounding Higher contribution from Regulated activities Revenues Analysis FY 2021 Results €mn REGULATED €mn NON REGULATED AND INTERNATIONAL +105 +4.9% +10 +2.9% Non Regulated Act. International Act. 2,048 2,155 73 107 -21 18 52 28 47 2,149 2,254 FY20 ∆ Transmission & Dispatching ∆ Other ∆ IFRIC12 FY21 Transmission & Dispatching Other IFRIC12 341 351 0.5 0.4 342 10 -0,1 351 FY20 ∆ Non Regulated Activities ∆ International Activities FY21 Non Regulated Act. International Act. 10
Operating costs evolution driven by higher volume of activity Note: figures may not add up due to rounding 1. Including IFRIC12 Opex FY 2021 Results +71 +10.4% €mn Regulated Activities1 Non Regulated Act. International Act. 428 453 244 289 7 8 25 45 1 679 750 FY20 ∆ Regulated Activities¹ ∆ Non Regulated Activities ∆ International Activities FY21 11
Note: figures may not add up due to rounding EBITDA growth driven by Regulated Activities EBITDA FY 2021 Results €mn GROUP €mn REGULATED €mn NON REGULATED AND INTERNATIONAL +44 +2.4% 12 1,811 1,855 FY20 FY21 1,721 1,801 80 FY20 ∆ FY21 90 54 -36 FY20 ∆ FY21
Solid results delivered 1. Net Profit related to Assets Held for Sale according to IFRS5 accounting principle 2. Attributable to Terna. From EBITDA to Net Income FY 2021 Results €mn In line YoY 786 2 2 1 Note: figures may not add up due to rounding 13 1,855 1,200 789 720 654 79 318 13 1 EBITDA D&A EBIT Net Financial Expenses Taxes (Profit)/Loss from discontinued operation Minority Interest Group Net Income Group Net Income FY20 Bargain Purchase Brugg post tax 66
Maximizing effort to support the decarbonization path Note: figures may not add up due to rounding 1. Of which about 11 €mn of Capitalized Financial Charges in 2021 and 10 €mn in 2020 Capex FY 2021 Results TOTAL CAPEX €mn REGULATED CAPEX €mn 1,521 14 39% 19% 42% Development Defence Asset Renewal & Efficiency 1,461 Development Defence Asset Renewal & Efficiency 1,233 1,461 118 60 FY20 FY21 Regulated Non Regulated and Other 1,351 1
Strong operating cash flow to cover investment needs 1. Including Other Fixed Assets Changes 2. Including Assets Held for Sale, Cash Flow Hedge reserve and other Note: figures may not add up due to rounding Cash Flow & Net Debt Evolution FY 2021 Results 15 9,173 10,003 1,359 56 1,521 611 Dec.31, 2020 Operating Cash Flow Δ WC & Other Capex Dividends,Equity & Others Dec.31, 2021 2 1 €mn +830
Strengthening financial structure GROSS DEBT BREAKDOWN KEY RATIOS 1 1 ~ 91% Fixed ~ 5 years 2 Calculated on Gross Debt Fixed/Floating Ratio Maturity 1. Percentages and key ratios calculated on Gross Debt nominal value 2. IAS value Net Debt Evolution & Financial Structure FY 2021 Results 64% 15% 21% Terna SpA Bonds EIB Banks Terna SpA Bonds EIB Banks 12.5€bn 2 16
FY 2021 Results FY 2021 Consolidated Results 2021-2025 Industrial Plan Update 24 March 2022 17 March 2022 17
Q&ASession
Annexes 19
Note: figures may not add up due to rounding 1. Managerial Accounting 2. Including Quality of Service Consolidated Income Statement1 Annexes 20 € mn 2021 2020 Δmn Δ% Total Revenue 2,605 2,490 114 4.6% Regulated Activities 2,254 2,149 105 4.9% Transmission 2,041 1,939 103 5.3% Dispatching 114 109 5 4.1% Other² 52 73 -21 -28.7% IFRIC12 47 28 18 64.6% Non Regulated Activities 351 341 10 2.9% International Activities 0 1 0 -20.0% Total Costs 750 679 71 10.4% Regulated Activities 453 428 25 5.8% Labour Costs 227 221 6 2.5% External Costs 157 149 8 5.3% Other² 22 29 -7 -24.3% IFRIC12 47 28 18 64.6% Non Regulated Activities 289 244 45 18.4% International Activities 8 7 1 11.3% EBITDA 1,855 1,811 44 2.4% D&A 654 634 20 3.2% EBIT 1,200 1,177 24 2.0% Net Financial Charges 79 86 -7 -8.3% Pre Tax Profit 1,122 1,091 31 2.8% Taxes 318 297 21 6.9% Tax Rate (%) 28.3% 27.3% - +1.0 pp Net Income 804 793 10 1.3% Net Financial Charges (Profit)/Loss From Discontinued Operations -13 2 -15 0.0% Total Net Income 791 795 -5 -0.6% Minority Interest 1 10 -8 -85.7% Group Net Income 789 786 4 0.5%
Note: figures may not add up due to rounding 1. Managerial Accounting 2. Including Quality of Service Consolidated Income Statement1 Annexes 21 € mn FY 20 Reported Restatement FY 20 Restated Δ% Total Revenue 2,514 -23 2,490 -0.9% Regulated Activities 2,149 0 2,149 0.0% Transmission 1,939 0 1,939 0.0% Dispatching 109 0 109 0.0% Other² 73 0 73 -0.1% IFRIC12 28 0 28 0.1% Non Regulated Activities 341 0 341 0.0% International Activities 24 -23 1 -97.9% Total Costs 683 -4 679 -0.5% Regulated Activities 428 0 428 0.0% Labour Costs 221 0 221 0.0% External Costs 149 0 149 0.0% Other² 29 0 29 -0.1% IFRIC12 28 0 28 0.1% Non Regulated Activities 244 0 244 0.0% International Activities 11 -4 7 -34.3% EBITDA 1,830 -19 1,811 -1.1% D&A 644 -9 634 -1.5% EBIT 1,187 -10 1,177 -0.8% Net Financial Charges 94 -8 86 -8.1% Pre Tax Profit 1,093 -2 1,091 -0.2% Taxes 298 0 297 -0.1% Tax Rate (%) 27.2% +0.1 pp 27.3% Net Income 795 -2 793 -0.3% (Profit)/Loss From Discontinued Operations 0 2 2 100.0% Total Net Income 795 0 795 0.0% Minority Interest 10 0 10 -0.2% Group Net Income 786 0 786 0.0%
Consolidated Balance Sheet Annexes 22 € mn Dec. 31,2021 Dec. 31,2020 Δmn PP&E 15,317 14,560 757 Intangible Asset 657 578 79 Financial Inv. and Other 380 508 -129 Total Fixed Assets 16,353 15,646 707 Net WC -1,707 -1,936 230 Funds -48 -121 73 Net Capital Invested 14,598 13,588 1,009 Net Assets Held for Sale 118 0 118 Total Net Capital Invested 14,716 13,588 1,127 Financed by: Consolidated Net Debt 10,003 9,173 830 Total Shareholder's Equity 4,713 4,416 297 Total 14,716 13,588 1,127
Consolidated Cash Flow Annexes 23 € mn 2021 2020 Total Net Income 791 795 D&A¹ 641 636 Net Change in Funds -73 -89 Operating Cash Flow 1,359 1,343 Δ Working Capital & Other² -56 -294 Cash Flow from Operating Activities 1,302 1,049 Capital Expenditures -1,521 -1,351 Free Cash Flow to Equity -219 -303 Net Assets Held for Sale -118 0 Dividends & Equity³ -494 -611 Change in Net Cash (Debt) -830 -914 3. Including Cash Flow Hedge accruals and other 1. Net of assets’ disposal 2. Including Other Fixed Assets Changes Note: figures may not add up due to rounding
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 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. Disclaimer 24
Notes 25
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Notes 27
investor.relations@terna.it www.terna.it 28