September 2017 A2A STRATEGIC PLAN • 2016 RESULTS & BUSINESS PLAN UPDATE • H1 2017 RESULTS
2016 CONSOLIDATED RESULTS 2014-16, HOW WE DID IT STRATEGIC PLAN 2017-2021 H1 2017 RESULTS This document gathers the most relevant slides of the following presentations: A2A STRATEGIC PLAN - 2016 RESULTS & BUSINESS PLAN UPDATE • A2A H1 2017 CONSOLIDATED RESULTS • The full presentations, together with the conference calls mp3 files, are available on A2A website at the following link: https://www.a2a.eu/en/investors/presentations-conference 2
+ - € M Energy LGH acquisition REVENUES EBITDA FY 2016 vs. Scenario Positive +3% San Filippo FY 2015 Results +17% CCGT Ebitda del Mela 5,093 “Must Run” San Filippo del 5,093 4,921 1,231 Mela “Merchant” Trading 1,048 portfolio Retail Regulated Components Gas and Electricity allowed revenues Fixed Costs 2015 2016 2015 2016 reduction Non-recurring items NET FINANCIAL POSITION GROUP ORDINARY GROUP NET 2016 Consolidated Results NET INCOME * INCOME +239 -230 2014-16, how we did it +36% +151 Strategic plan 2017-2021 469 3,136 377 2,897 2,667 224 278 Financials H1 2017 Results 73 2015 2016 Adjusted LGH price 2016 and NFP at closing 2015 2016 2015 2016 NFP / 2.8x 2.5x EBITDA * Excluding extraordinary items equal to 205 € M in 2015 and 153 € M in 2016 3
€ M +183 FY 2016 vs. +81 FY 2015 Results 128 1,231 Group EBITDA 11 1,103 19 1 30 1,048 25 1,022 -5 -26 2016 Consolidated Results 2014-16, how we did it Strategic plan 2017-2021 Financials 2015 2015 Waste Networks Smart 2016 2016 and City Ordinary Ordinary H1 2017 Results 2015 2016 District Non-recurring Energy Heating EPCG Non-recurring Items Retail Generation & trading and other Items 4
1,231 From Group EBITDA to Group Net Income € M FY 2016 vs. - 434 FY 2015 Results 56 - 256 354 - 4 - 85 224 2 - 154 - 117 -15 Risk Net 2016 Net result Equity Write-off Net Provisions Non-recurr. Taxes EBT D&A Minorities Financial from EBITDA Of Assets transactions Income discontinued Expenses operations 2015 A 1,048 - 404 - 350 - 79 - 1 - 4 76 - 133 - 130 73 - 134 From Group Net Income to Group Net Ordinary Income +153 +36% 2016 Consolidated Results 145 2014-16, how we did it -38 46 Strategic plan 2017-2021 Financials H1 2017 Results Group Group Net Impairment Monfalcone Edipower non- Group Net Net Income Ordinary of assets and write-off proportional Ordinary Income 2015 Reported shareholdings Net effect demerger Income 2016 5
€ M FY 2016 vs. +80 +80 FY 2015 Results 424 424 CAPEX 6 27 Epcg 48 344 344 M&A* 17 46 Smart city 2 27 57 Corporate 167 7 Mandatory 159 Networks 129 133 District 61 heating Development 52 Waste 59 102 2016 Consolidated Results 171 154 Energy retail 4 Maintenance 8 64 2014-16, how we did it Generation & 36 trading 2015 2016 2015 2016 Strategic plan 2017-2021 Financials BREAKDOWN BY NATURE BREAKDOWN BY BUSINESS H1 2017 Results *M&A Capex related to LGH not included 6
€ M FY 2016 vs. FY 2015 Results Net Free Cash Flow 2016 Consolidated Results 2014-16, how we did it Strategic plan 2017-2021 Financials H1 2017 Results (1) Funds from operations after change in working capital 7
RESULTS VISION/STRATEGY 2014-2016, how we did it Achievements on key R3D points : 3 years of growing results exceeding plan R ESTRUCTURE 12 quarters Cost reduction, company with continuous simplification, flexibilization, debt reduction capacity optimization Dividend (+50%) R ELAUNCH and stock price growth (+61%)* Consistent industrial growth Selective external growth 82 € M savings 2016 Consolidated Results vs. 2014 cost base R ESHAPE 2014-16, how we did it Public lighting, smart city, Strategic plan 2017-2021 energy efficiency RESULTS Financials AND STRATEGIC GOALS H1 2017 Results DELIVERED * From the appointment of the new Board of Directors, 17/06/2014, to 28/3/2017 8
3Rs & 3Ds 2014-2016 achievements RESTRUCTURE RELAUNCH RESHAPE completed PUBLIC LIGHTING GENERATION & TRADING ENVIRONMENT +125% LED relamping (196k lighting +8% waste treated (2,800 ktons in 2016) 20 € M cost savings in • +26% inhabitants served (3.4 M in 2016) points in 2016) CCGT plants in 2 years ENERGY EFFICIENCY ENERGY RETAIL Market/seasonal opportunities • 1 st Italian independent ESCo acquired +117% free market customers (694,000 POD in 2016) Leadership in ancillary services • (Consul System) NETWORKS & HEAT Chivasso already best in class, • SMART CITY +13% District Heating network expansion in Milan other plants under way A2A Smart City company: set-up (299 km in 2016) A2A Energiefuture, thermal plant • completed and first pilot projects Selective external growth re-conversion E-MOBILITY 9 deals completed in 2 years 1 st Italian Fast Charge public network A2A gencogas, single vehicle • industrial partnership (51%) signed with LGH • for A2A CCGTs (90k recharges in 2016) DISCIPLINE DIALOGUE DIGITAL A2A's first sustainability plan +50% of DPS increase • • New digital platform for customer base • & integrated report in three years Digitalization of networks processes • 4 multi-stakeholder forum and territorial FFO/Debt, key rating indicator, • • (WFM, IDMS, …) sustainability reports improved up to 24% Digitalization of CCGT Chivasso plant • People and organization: Implementation of Enterprise Risk • • New solar thermodynamic plant at San • Smart working, Organizational Compass Project, Management structure Filippo del Mela site Futura2a, ABC Project, Melograno, ... 15 Lean Thinking pilot projects • 9
STRATEGIC PLAN 2017-2021 10
RELAUNCH REGENERATION RESHAPE Growth in environment, Active role in the energy Buying options smart networks market transformation in smart city and energy services and green economy Flexible fleet to serve Focus on low-risk shortening EU markets From pilot projects businesses to market solutions Re-alignment with EU Winter Package Development by adjacencies STRATEGY UPDATE FOCUS TRANSFORM ACCELERATE 11
REGULATED Relaunch BUSINESS Additional investments ASSET (+600 € M vs. previous plan) in core, growing, low-risk DEVELOPMENT WASTE businesses TREATMENT DEVELOPMENT ORGANIC Consistent growth in retail , DEVELOPMENT waste collection and DH 2016 Consolidated Results MARKET 2014-16, how we did it GROWTH Prudent M&A targets M&A AND Strategic plan 2017-2021 SYNERGIES Conservative targeted synergies Relaunch Re-generation Reshape EFFICIENCY En&A project on track Financials COST AND and launch of a new operational REDUCTION H1 2017 Results excellence program OPTIMIZATION 12
€ M Regulated 100% 40% CAPEX business in sustainability 80 Higher Capex in regulated/quasi-regulated 60 40 20 Strategic plan 2017-2021 Relaunch 0 Asset Development Market Growth Cost reduction +50% CAPEX per year vs. average 2014-2016 (1) Re-generation Almost 90% CAPEX in regulated/quasi-regulated markets ~70% of net invested capital in 2021 related to Regulated/ Reshape Quasi-Regulated assets (1) Including M&A and gas distribution tenders 13
€ B Regulated business RAB increase 1.8 2.0 Strategic plan 2017-2021 EE & GAS RAB EE & GAS RAB Relaunch 2017 2021 Asset Development Market Growth Increase in Gas and Electricity distribution RAB Cost reduction Re-generation Gas and Electricity distribution tariffs stable over the period 2017–2021 Reshape Water distribution tariffs increase by 8.5% YoY according to Regulatory Framework 2016-2019 14
Ktons treated Waste treatment 860 development Ktons/year waste material recycling ACHIEVED ACHIEVABLE TARGET 4,249 155 500 Authorizations 107 687 to be Authorized/ requested 2,800 2,626 2,634 authorizations 2,594 2,558 in progress Strategic plan 2017-2021 Relaunch Asset Development 2014 EXISTING 2021 2015 2015 2016 2016 FULL NEW PLANTS Market Growth PLANTS TARGET ACTUAL TARGET ACTUAL YEAR Cost reduction UPGRADE CONSOLI- DATION* Re-generation Limited volume risk , mostly internal waste flows integration Reshape Focus on A2A industrial sites in Northern Italy * LGH, Rieco, Bedizzole full year contribution; public tenders excluded 15
M inhabitants Organic 67% avg. development sorted ACHIEVED ACHIEVABLE TARGET collection Waste collection ~ +100K inhab./year ~ +300K inhab./year 3.94 3.38 2.90 2.81 2.80 2.70 Strategic plan 2017-2021 Relaunch Market Growth Cost reduction 2014 2015 2015 2016 2016 2021 Re-generation TARGET ACTUAL TARGET ACTUAL BP Reshape 2021 target consistent with 2014-16 average organic growth Note: Includes LGH 16
POD * Organic ‘000 90% EE customers development ACHIEVED ACHIEVABLE TARGET with green energy sold** Energy and gas retail ~ +150K POD/year 1,438 ~ +180K POD/year 694 Strategic plan 2017-2021 577 444 419 Relaunch 320 Market Growth 2015 2015 2016 2016 2021 2014 Cost reduction TARGET ACTUAL TARGET ACTUAL TARGET Re-generation Growth planned in core geographical areas Reshape Free market customer base in 2019 4x vs. 2014 Note: Includes LGH * Free market **Electricity mass market 17
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