1H 2019Consolidated Results

Milan, August 2nd, 2019

2

HIGHLIGHTS

ANALYSIS OF RESULTS

AGENDA

ANNEXES

3

1H 2019 vs 1H 2018

Highlights

ENERGY RETAIL MARGIN & B2B VOLUMES

WASTE TREATMENT PRICES

PHOTOVOLTAIC PLANTS

ACSM-AGAM CONSOLIDATION

CAPEX INCREASE

ENVIRONMENTAL MARKETS

GROTTAGLIE LANDFILL

WTE PLANNED MAINTENANCE

4

Key Financial Indicators

€M

Highlights

REVENUES EBITDA OrdinaryEBITDA

GROUP NET INCOMENET FINANCIAL

POSITIONGROUP NET INCOME

Ordinary

Growth of +4% net of 97€M of GC & other incentives included in 2018

5

HIGHLIGHTS

ANALYSIS OF RESULTS

ANNEXES

AGENDA

6

Analysis of results

Group EBITDA Overview

€M

-48% +19% +1% +16%

Growth of +4% net of GC & other incentives

7

Analysis of results

Group EBITDA Overview: 1Q vs 2Q

€M

2Q (+10% ordinary)

MSD

GAS PORTFOLIO

NETWORK TARIFFS AND DH MARGIN

PHOTOVOLTAIC PLANTS

ACSM-AGAM CONSOLIDATION

GREEN CERTIFICATES

WHITE CERTIFICATES

GROTTAGLIE LANDFILL

WTE PLANNED MAINTENANCE

Q1 Q2

Generazione 218 -115 11 114

Mercato 95 19 -1 113

Ambiente 134 7 -6 135

Reti&Calore 191 11 20 222

Altro -7 -1 -1 -9

Gruppo 631 -79 23 575

EBITDA ord

H1 2018

Change vs '18 EBITDA ord

H1 2019

8

KPIs include ACSM-AGAM contribution

Generation

€M

Analysis of results

• Green Certificates portfolio in 2018

• Lower MSD, despite the strong performance in Q2

• Increasing contribution from Photovoltaicplants

CCGTProduction

(GWh)

HydroProduction

(GWh)

PhotovoltaicProduction

(GWh)

4,6281H ‘18

4,9521H ‘19

+7.0 %

2,0861H ‘18

1,8571H ‘19

-11%

311H ‘18

611H ‘19

+96.8%

a2a AchievedClean Spark Spread

(€/MWh)

-0.31H ‘18

3.81H ‘19

>100%

9

Free MktCustomers

(‘000 EOP)

Market

Analysis of results

Energy Retail +15€M

€M

• Higher free market customer base (+104K Vs Dec. 2018)

• Higher B2B volumes

• Higher unitary margins

• Energy Solutions: lower white certificates margin

GasSales(Mmc)

ElectricitySales(GWh)

+41.2%

9861H ‘18

1,3921H ‘19

9641H ‘18

1,3161H ‘19

+36.5% +26.6%

5,1331H ‘18

6,5001H ‘19

LightingPoints

(#000)

2211H ‘18

2611H ‘19

+18.1%

KPIs include ACSM-AGAM contribution

10

Waste

€M€M

Analysis of results

WasteCollection

(Kton)

Waste Treatment

(Kton)

• Increase in treatment prices, partially offset by higher disposal costs

• Increase in electricity prices

• Lower revenues from landfills (Grottaglie and others)

• WTE planned maintenance

Equivalent EE Sales(GWh)

8381H ‘18

8581H ‘19

+2.4%

1,7551H ‘18

1,6751H ‘19

-4.6%

1,0261H ‘18

1,0301H ‘19

+0.4%

KPIs include ACSM-AGAM contribution

11

Networks and District Heating

€M

Analysis of results

* Provisional data, underlying the estimate of allowed revenues of the period.

• Higher allowed revenues

• Increase in Water Cycle tariffs

• Higher Heating prices, partially offset by higher CO2 costs

RAB GAS*(M€)

Heat Volumes(GWht)

RAB EE*(M€)

1,1941H ‘18

1,4231H ‘19

+19.2%

1,6461H ‘18

1,6411H ‘19

-0.3%

6311H ‘18

6491H ‘19

+2.9%

321H ‘18

381H ‘19

+18.8%

KPIs include ACSM-AGAM contribution

DistributedWater

(Mmc)

12

From EBITDA to Group Net Income

Analysis of results

€M

2018 657 (213) 388 4 (5) 2674 (58)(8) (120)6

13

Capex

Analysis of results

BREAKDOWN BY ACTIVITY BREAKDOWN BY BUSINESS

€M

+65€M2018

187 €M2019

252 €M

Generation

Market

Waste

Networks & District HeatingSmart City

Corporate

14

-

Net Free Cash Flow

Analysis of results

(1) Funds from operations after working capital change

€M

657 (76) 523 (187) - 1962018 (5) (54)-4 156 40(180)

15

Guidance 2019 confirmed

Analysis of results

€M

1,155 – 1,185 €M

2019

EBITDA

300-330 €MNET INCOME

CAPEX

~ -200 €MNET FREE CASH FLOW(1)

GUIDANCECONFIRMED

~700 €M

Incl. non recurring ~25€M

(1) Data does not include IFRS 16 impact equal to ~100€M

16

ANNEXES

AGENDA

ANALYSIS OF RESULTS

HIGHLIGHTS

17

Reported Ordinary Reported Ordinary

a2a 657 631 582 575 -75 -11% -56 -9%

Generation 225 218 117 114 -108 -48% -104 -48%Power Generation 213 206 86 83 -127 -60% -123 -60%

Gas Margin 2 2 14 14 +12 >100% +13 >100%

Photovoltaic 8 8 15 15 +6 >100% +6 >100%

ACSM AGAM 2 2 2 2 +0 n.s. +0 n.s.

Market 111 95 116 113 +5 +5% +18 +19%Energy Retail 72 72 90 87 +18 +25% +15 +21%

Public Lighting 8 8 8 8 +0 +0% +0 +0%

Energy Solutions 29 13 3 3 -26 -90% -10 -77%

ACSM AGAM 2 2 15 15 +13 >100% +13 >100%

Waste 136 134 135 135 -1 -1% +1 +1%Collection 27 27 28 28 +1 +4% +1 +4%

Urban Treatment 98 96 93 93 -5 -5% -3 -3%

Industrial Treatment 9 9 11 11 +2 +22% +2 +22%

ACSM AGAM 2 2 3 3 +1 +50% +1 +50%

Networks & District Heating 192 191 223 222 +31 +16% +31 +16%Electricity Networks 61 62 63 63 +2 +3% +1 +2%

Gas Networks 61 60 63 62 +2 +3% +2 +3%

Water Cycle 20 20 24 24 +4 +20% +4 +20%

District Heating 47 46 54 54 +7 +15% +8 +17%

ACSM AGAM 3 3 19 19 +16 >100% +16 >100%

Smartcity 4 4 4 4 +0 0% +0 0%

Other -11 -11 -13 -13 -2 18% -2 18%Corporate and Other -11 -11 -10 -10 +1 -9% +1 -9%

ACSM AGAM 0 0 -3 -3 -3 n.s. -3 n.s.

Reported Ordinary

2018 2019 Change

Business Units EBITDA Breakdown

Annexes

€M

*

*

*

*

* ACSM AGAM’s 2018 values refer to spin off (Aspem and mini Hydro)

18

P&L

Annexes

€M1H 2018 1H 2019

Delta vs

2018

Delta %

vs 2018

Revenues 3,081 3,711 630 20.4%

EBITDA 657 582 (75) -11.4%

D&A (213) (245) (32) 15.0%

Provisions (8) (10) (2) 25.0%

EBIT 436 327 (109) -25.0%

Net Financial

Expenses(58) (65) (7) 12.1%

Associates & JV 4 0 (4) n.s.

Result from non

recurr. Transactions6 0 (6) n.s.

EBT 388 262 (126) -32.5%

Taxes (120) (87) 33 -27.5%

Net Result from

disc. operations4 0 (4) n.s.

Minorities (5) (9) (4) n.s.

Group Net Income 267 166 (101) -37.8%

Ordinary Group

Net Income257 166 (91) -35.4%

19

Balance Sheet

Annexes

€M 12.31.2018 06.30.2018 06.30.2019Change Vs

12.31.2018

Change Vs

06.30.2018

Tangible Assets 4,620 4,572 4,718 98 146

Intangible Assets 2,302 1,815 2,334 32 519

Shareholdings and Other Non

Current Financial Assets23 66 31 8 (35)

Other Non Current

Assets/Liabilities(122) (125) (132) (10) (7)

Deferred Tax Assets and

Liabilities264 289 274 10 (15)

Provisions for Risks, Charges

and Liabilities for landfills(642) (607) (648) (6) (41)

Employee Benefits (314) (307) (322) (8) (15)

Net Fixed Capital 6,131 5,703 6,255 124 552

Net Working Capital 555 513 595 40 82

Other Current

Asset / Liabilities(268) (232) (280) (12) (48)

Current Tax

Asset / Liabilities15 (10) (74) (89) (64)

Working Capital and Other

Current Assets/Liabilities302 271 241 (61) (30)

Non current Assets /Liabilities

held for sale112 160 70 (42) (90)

Total Capital Employed 6,545 6,134 6,566 21 432

Equity 3,523 3,104 3,450 (73) 346

Net Financial Position 3,022 3,030 3,116 94 86

Total Sources 6,545 6,134 6,566 21 432

20

Energy Scenario

Annexes

(1) Gas at virtual trading point

(2) Pfor 162/14 Oct 2014-Mar 2016.

(3) hourly average for each month

(4) based on gas at virtual trading point with 51% efficiency; includes transport costs

(5) 35% efficiency - includes cost spread on API2 and transport cost

(6) data subject to update by Terna

1H 2018 1H 2019D % vs

2018

Brent $/bbl 71,1 66,1 -7%

CO2 - EU ETS cost €/Tonn 12,1 23,9 97%

€/$ €/$ 1,2 1,1 -7%

Brent € €/bbl 58,8 58,5 0%

PSV(1) €/MWh 22,4 18,7 -16%

AEEGSI Gas Tariff (2) c€/mc 19,4 23,0 18%

Coal € (API2) €/Tonn 72,8 57,4 -21%

PUN Baseload(3) €/MWh 53,8 55,1 2%

PUN Peak(3) €/MWh 60,5 60,3 0%

PUN Off-Peak(3) €/MWh 50,1 52,3 4%

CCGT gas cost(4) €/MWh 52,9 45,4 -14%

Spark Spread CCGT_PSV vs Baseload €/MWh 0,9 9,7 n.s.

Spark Spread CCGT_PSV vs Peakload €/MWh 7,5 14,9 98%

Spark Spread CCGT_PSV vs Off-Peak €/MWh -2,8 6,9 n.s.

Clean Spark Spread vs Baseload €/MWh -3,7 0,3 n.s.

Clean Spark Spread vs Peakload €/MWh 2,9 5,5 87%

Clean Dark Spread vs Baseload(5) €/MWh 5,3 1,1 -80%

21

1H 2018 1H 2019Δ vs

2018

Δ% vs

2018

A2A Group Thermal production GWh 5,865 5,767 -98 -2%

of which

CCGT production GWh 4,628 4,952 324 7%

Coal production GWh 762 545 -217 -29%

Oil production GWh 475 271 -204 -43%

A2A Group Hydro production GWh 2,086 1,857 -229 -11%

A2A Group Photovoltaic production GWh 31 61 31 n.s.

Wholesale electricity sales and Foreign Markets GWh 4,818 5,062 244 5%

Ipex sales GWh 2,802 3,784 982 35%

Electricity sales GWh 5,133 6,500 1,367 27%

Gas sales Mmc 986 1,392 406 41%

Electricity distributed GWh 5,878 5,833 -44 -1%

Gas distributed Mmc 1,510 1,736 226 15%

Water distributed Mmc 32 38 6 19%

Heat volumes sales GWht 1,646 1,641 -5 0%

Cogeneration electricity sales GWh 194 195 1 1%

Collected waste Kton 838 858 20 2%

Waste disposal Kton 1,755 1,675 -80 -5%

WTE and other plants electricity production GWh 889 877 -12 -1%

WTE and other plants heat production GWht 777 857 80 10%

(1)

(1) Net of intermediated IPEX volumes

Volumes

Annexes

KPIs include ACSM-AGAM contribution

22

Bonds

Loans and others

Gross debt maturities as of 30 June 2019

Annexes

€M

IFRS 16

23

CONTACTS

A2A Investor Relations Team

Mail: ir@a2a.eu

Phone: +39 02 7720 3974

http://www.a2a.eu/en/investor/