1H 2019 Consolidated Results Presentation

1
1H19 CONSOLIDATED RESULTS JULY 30th 2019
July 30th 2019
1H19 Consolidated Results

2
Agenda
1H19 Results 9
Closing Remarks 19
Highlights 3
Annexes 20

3
Highlights

4
28.2
28.5
29.0
34.9%
42.0%
55.4%
27.5
27.7
27.9
28.1
28.3
28.5
28.7
28.9
29.1
29.3
29.5
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2018 2025 2030
Gross internal consumption of electricity produced (Mtoe)
RES share (%)
The Italian Energy Transition
NATIONAL INTEGRATED ENERGY AND CLIMATE PLAN*
Highlights (1/5)
Playing a key role in the ongoing energy transition
MAIN ACTIONS TO SUPPORT DECARBONIZATION
Grid’s investments Storage
*Piano Nazionale Integrato Energia e Clima
Long-term market
price signals
RES penetration on
internal gross electricity
consumption
Market flexibility

5
30.5
26.6
27.0 26.9
26.3 26.5
28.4
25.5
26.4
24.0
25.2
27.8
23
25
27
29
31
33
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Monthy energy demand
Previous Year
Demand Evolution – Last 12 months
DEMAND AS REPORTED (TWh)
Highlights (2/5)
Note: 2017 final figures. 2018 and 2019 preliminary figures
Accelerating the pace of energy transition
1H19 data:
▪ National Demand at 157 TWh, o/w 35.4% covered by RES
▪ Net Total Production at 139 TWh
Wind increased by 16%
PV increased by 10%
YoY
Change
1H2019
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
1.4% -0.8% 3.5% 2.1% -1.3% -1.5% 4.4% -2.2% -5.0% -0.6% -3.0% 2.9%
Δ %
-0.6%
1H19 1H18
157.3 158.2

6
Domestic Regulated
International
Domestic Non Regulated
Playing a leading role in
energy transition
Leveraging Terna’s
industrial know-how
Developing value-added
solutions
Strategic Overview (1/2)
Highlights (3/5)
Execution well on track
▪ Connectivity: ongoing agreements to develop
dark fiber project
▪ Energy Solutions: MoU with The Mobility House
▪ Brazil: entry into operation of Santa Lucia line
▪ Capex: from plan to delivery
STRATEGIC GUIDELINES

7
Innovation & Digitization
People
Strengthening core
competences and innovation
openness
Strategic Overview (2/2)
Highlights (4/5)
Execution well on track
Enabling energy transition
▪ Grid Digitization: project ongoing, both for
lines and for substations
▪ Opening of the first in Turin
▪ Training: upskilling and reskilling
Enhanced Financial Structure
▪ New 500 €mn bond emission
• Effective cost of issuance of 0.25%
• Tenor of 6 years
• Oversubscription of about 4 times
ENABLING FACTORS
FINANCE

8
Positive P&L results and strong capex acceleration
1H 2019 Key Numbers
1. 1H18 revenues reclassified in accordance with new IFRS. No impact at EBITDA level
2. Attributable to Terna
1H 2018€mn
Revenues
EBITDA
Group Net Income2
Capex
Δ vs 1H181H 2019
1,098 1,0631
846 815
367 360
396 338
Highlights (5/5)
+3%
+4%
+2%
+17%

9
1H19 Results

10
1,063 1,098
979 1,005
39 3739 45
6 1125 -2 6 5
1H18 ∆
Regulated
Activities
∆
Non Regulated
Activities
∆
Tamini
∆
International
Activities
1H19
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
Revenues increase in all business lines
1 2
€mn
Non Regulated Activities
+35
+3.3%
Regulated Activities1
Non Regulated Act.
Tamini
International Act.2
1H 2019 results

11
39 37
39 45
6
-2 6
5
1183
93
1H18 ∆
Non Regulated
Activities
∆
Tamini
∆
International
Activities
1H19
958 984
15
26 1 -1
16
6 5
979 1,005
1H18 ∆
Transmission &
Dispatching
∆
Other
∆
IFRIC12
1H19
Revenues Analysis
€mn
REGULATED
€mn
NON REGULATED AND INTERNATIONAL
+25
+2.6% +10
+11.5%
Higher contribution from Regulated, Tamini and International
Transmission & Dispatching
Other
IFRIC 12
1H 2019 results
Tamini
Non Regulated Act.
International Act.

12
248 252
194 190
13 13
38 43
4 5
-3 0 5 2
1H18 ∆
Regulated
Activities
∆
Non Regulated
Activities
∆
Tamini
∆
International
Activities
1H19
1
+4
+1.5%
€mn
Non Regulated Activities
Opex
1. Including IFRIC12
Opex dynamics driven by Non Regulated and International higher
volumes of activity
Regulated Activities1
Non Regulated Act.
Tamini
International Act.
1H 2019 results

13
13 13
38
0
5
2
43
4
5
54
61
1H18 ∆
Non Regulated
Activities
∆
Tamini
∆
International
Activities
1H19
108 110
79
2 -4 -1
75
6 5
194 190
1H18 ∆
Labour
Costs
∆
External
Costs
& Other
∆
IFRIC12
1H19
Opex Analysis
Insourcing attività di O&M Rete FSMaintaining Regulated Opex discipline
€mn
REGULATED
€mn
-3
-1.7%
+7
+12.9%
Labour Costs
External Costs & Other
IFRIC 12
1H 2019 results
Tamini
Non Regulated Act.
International Act.

14
29 32
3
1H18 ∆ 1H19
786 815
29
1H18 ∆ 1H19
815
846
1H18 1H19
EBITDA
Insourcing attività di O&M Rete FS4% growth at EBITDA level
€mn
TOTAL EBITDA
€mn
REGULATED
€mn
+31
+3.8%
1H 2019 results

15
846
558
367 360
289
39
150
EBITDA D&A EBIT Net
Financial
Expenses
Taxes Group
Net Income
Group
Net Income
1H18
From EBITDA to Net Income
1. Attributable to Terna. Excluding 1.8 €mn of Minorities in 1H19 and 1.9 €mn in 1H18
2% growth at Net Income level
1
€mn
1
+2% YoY
1H 2019 results

16
47 29
257 313
33
54338
396
1H18 1H19
Incentivized Investments Other Regulated Other
Capex
Capex acceleration in line with Strategic Plan
TOTAL CAPEX
€mn
21
REGULATED CAPEX
343€mn
1. I-NPR1+O-NPR1 in line with ARERA Resolution n. 579/17
2. Of which about 6 €mn of Capitalized Financial Charges
1H 2019 results
9%
91%
Incentivized Investments Other Regulated

17
7,899
8,294
586
162
396
422
Dec.31,
2018
Operating
Cash Flow
Δ WC & Other Capex Dividends
&
Equity
Mar.31,
2019
1. Including Other Fixed Assets Changes
2. Including Cash Flow Hedge reserve and other
Cash Flow & Net Debt Evolution
Positive operating cash flow generation to support capex plan
€mn
2
Free Cash Flow to Equity +28
+394
1
1H 2019 results
Jun.30,
2019

18
Net Debt Evolution & Financial Structure
1. Percentages and key ratios calculated on Gross Debt nominal value
2. IAS value
Enhanced solid financial structure
GROSS DEBT BREAKDOWN KEY RATIOS
1 1
Fixed/Floating Ratio
Calculated on Gross Debt
82% Fixed
Duration
5.1 years
10€bn
2
1H 2019 results
81%
18%
1%
Terna SpA Bonds
EIB
Banks

19
Well on track on 2019 guidance
Domestic
Regulated
Closing Remarks
Domestic
Non
Regulated
International
Implementing capex acceleration
Leveraging Terna’s core competences
to finalize ongoing projects
Developing innovative services to support core activities

20
Annexes

21
€ mn 1H19 1H18 Δmn Δ%
Total Revenue 1,098 1,063 35 3.3%
Regulated Activities 1,005 979 25 2.6%
Transmission 929 899 30 3.4%
Dispatching 56 60 -4 -7.2%
Other 16 15 1 5.4%
IFRIC12 5 6 -1 -20.6%
Non Regulated Activities 82 78 4 5.5%
International Activities 11 6 5 96.4%
Total Costs 252 248 4 1.5%
Regulated Activities 190 194 -3 -1.7%
Labour Costs 110 108 2 2.0%
External Costs 69 71 -3 -3.8%
Other 7 8 -2 -18.8%
IFRIC12 5 6 -1 -20.6%
Non Regulated Activities 56 51 5 10.5%
International Activities 5 4 2 47.2%
EBITDA 846 815 31 3.8%
D&A 289 267 21 8.0%
EBIT 558 548 10 1.8%
Net Financial Charges 39 43 -4 -9.1%
Pre Tax Profit 519 505 14 2.8%
Taxes 150 143 8 5.3%
Tax Rate (%) 29.0% 28.3% +0.7 pp
Total Net Income 368 362 6 1.7%
Minority Interest 2 2 0 -5.3%
Group Net Income 367 360 6 1.8%
1. Managerial Accounting
2. 1H18 reclassified in accordance with new IFRS. No impact at EBITDA level
3. Including Quality of Service
Consolidated Income Statement1
Annex
3
3
2

22
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)
Jun. 30,2019 Dec. 31,2018 Δmn
13.348 13.244 104
507 519 -12
339 320 19
14.194 14.084 111
-1.662 -1.823 160
-238 -308 70
12.294 11.954 341
8.294 7.899 394
4.001 4.054 -54
12.294 11.954 341
2,1 1,9
0,7 0,7
2.010 2.010

23
€ mn 1H19 1H18
Total Net Income 368 362
D&A 287 266
Net Change in Funds -70 -28
Operating Cash Flow 586 600
Δ Working Capital & Other -162 -45
Cash Flow from Operating Activities 424 555
Capital Expenditures -396 -338
Free Cash Flow to Equity 28 217
Dividends & Equity -422 -316
Change in Net Cash (Debt) -394 -99
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

24
€ mn 1H18 1H19 Δ mn Δ%
Incentivized Investment 47 29 -18 -38%
Other Reguleted 257 313 56 22%
Regulated Capex 305 343 38 13%
Other 33 54 20 60%
Total Group Capex 338 396 58 17%
Capex
Annex
1. I-NPR1+O-NPR1 in line with ARERA Resolution n. 579/17
2. Of which about 6 €mn of Capitalized Financial Charges
1
2

25
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Disclaimer

26
Notes

27
Notes

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1H 2019 Consolidated Results Presentation

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