NINE MONTHS 2018 RESULTS Milan, November 2018 Full Year 2016 - PowerPoint PPT Presentation

NINE MONTHS 2018 RESULTS Milan, November 2018 Full Year 2016 results | Feb.’17 | 1

BUSINESS ENVIRONMENT | 2

ELECTRIC POWER AVAILABILITY MIX IN ITALY +0,6% 242,2 240,7 +20,5% 28,1 33,9 (4,1%) 24,8 23,7 Pumping 12,5 +0,3% 12,6 Net import 31,0 38,4 +23,8% Other renewable production Wind production National Generation Hydroelectric production 146,1 (7,4%) Thermoelectric production 135,3 -1,7 -1,8 (4,8%) 9M2017 9M2018 Electricity consumption was substantially stable (+0.6%). Higher hydroelectric production and net imports made up for lower thermoelectric and solar generation. Nine Months 2018 results | 3 Gross of losses Source: Terna and Edison estimates

GAS DEMAND IN ITALY (1,1%) 51,9 51,4 1,5 (1,8%) 1,5 16,9 18,5 (8,0%) System uses and losses Thermoelectric users 13,3 - 13,2 Industrial users Services and residential users +4,9% 19,7 18,7 9M2017 9M2018 Gas demand decreased by 1,1% as a result of lower thermoelectric uses, partly compensated by an increase in residential sector as a result of cold weather in Winter. Nine Months 2018 results | 4 Source: Ministry of Economic Development, SRG and Edison estimates

MARKET REFERENCE SCENARIO Avg 9M2018: 72.7 $/bbl Avg 9M2018: 25.0 BRENT PSV 60.9 €/ bbl Avg 9M2017: 19.9 Avg 9M2017: 52.6 $/bbl Avg FY2017: 20.7 (€c/ scm) 47.4 €/ bbl Avg FY2017: 54.8 $/bbl 48.6 €/ bbl Avg 9M2018: -1.9 PUN TWA CSS 1 Avg 9M2018: 58.9 Avg 9M2017: 4.8 Avg 9M2017: 51.3 Avg FY2017: 5.2 (€/MWh) (€/MWh) Avg FY2017: 53.9 Nine Months 2018 results | 5 1. Clean Spark Spread Source: Edison

NINE MONTHS 2018 RESULTS • Electric power and hydrocarbons sources and uses • Consolidated financial highlights and capital expenditures • Operating performance • Net financial debt and cash flow | 6

EDISON ELECTRIC POWER VOLUMES IN ITALY USES SOURCES (TWh) (TWh) (22,2%) (22,2%) 40,4 40,4 0,8 (10,2%) 1,7 31,4 31,4 8,0 +28% 0,7 12,5 +33,8% 2,3 10,2 (15,2%) 10,6 32,4 (34,5%) 25,4 21,2 (29,8%) 17,8 9M2017 * 9M2018 * 9M2017 9M2018 Wind & other renewable production Other sales (b) (wholesalers, IPEX, etc.) End customers (c) Hydroelectric production Thermoelectric production Other purchases (a)(wholesalers, IPEX, etc.) a) Gross of losses, excluding trading portfolio Nine Months 2018 results | 7 b) Excluding trading portfolio c) Gross of losses * Other purchases and Other sales in 2017 have been restated to reflect the retrospective adoption of IFRS 15

EDISON HYDROCARBONS VOLUMES GAS PORTFOLIO IN ITALY USES SOURCES (bcm) (bcm) (1,0%) (1,0%) 15,2 15,0 15,2 15,0 3,9 4,2 5,0 +8,6% 5,3 +5,1% 5,4 4,8 (11,4%) 11,1 10,8 (3,1%) 3,2 3,3 (0,1%) (17,4%) 0,3 (0,1) (0,2) 0,2 1,7 1,5 +13,8% 9M2017 9M2018 9M2017 9M2018 Residential uses Industrial uses Production (a) Imports (pipeline + LNG) Thermoelectric fuel uses Other sales Other purchases Change in gas inventory Nine Months 2018 results | 8 a) Net of self-consumption and at Standard Calorific Power. It includes production from Izabela concession in Croatia imported in Italy

EDISON HYDROCARBONS VOLUMES E&P OPERATIONS OIL PRODUCTION GAS PRODUCTION (mcm) (kbbl) +6,3% 1.691 (1,8%) 1.591 3.078 3.022 278 (17,5%) 337 1.420 1.288 (9,3%) 1.413 1.254 +12,7% +4,6% 1.735 1.658 9M2017 9M2018 9M2017 9M2018 International production (a) Domestic production (b) International production (a) Domestic production a) International production includes volumes withheld as production tax Nine Months 2018 results | 9 b) Including production from Izabela concession in Croatia imported in Italy

GROUP CONSOLIDATED HIGHLIGHTS (€ mln) D FY2017 a 9M2017 a 9M2018 a-b Net capex & financial investments c) 8.783 Sales revenues 6.353 6.521 2,6% 43 627 803 EBITDA 647 620 (4,2%) 42 EBIT 84 235 nm 368 (41) Profit (loss) before taxes (6) 218 nm 11 (176) Group net income (loss) (110) 87 nm 309 60 16 496 Net capex & net financial investments c 309 627 97 168 September 30,'18 b Dec 31,'17 September 30,'17 144 78 6.319 Net invested capital 6.832 6.584 9M2017 9M2018 116 Net financial debt 622 310 Electric power 6.203 Total shareholders' equity 6.210 6.274 Hydrocarbons Exploration 5.915 of which Group's net interest 5.919 6.004 Corporate Strategic acquisitions 0,02 Debt/Equity ratio 0,10 0,05 disposals a) Since January 1, 2018 IFRS 15 “Revenue from contracts with customers” and IFRS9 (relating to financial instruments) entered into force. In order to improve comparability over time, Edison has decided to adopt IFRS15 retrospectively by restating 2017 financial statement. As a result of the adoption of this standard, sales revenues decreased with no impact on EBITDA. The impact of the first adoption of IFRS9 were recorded in equity without restatement of 2017 results. Nine Months 2018 results | 10 b) 9M2018 figures include the acquisition of GNVI in March 2018, Attiva in May and Zephyro in July c) Including additions/reductions to non – current financial assets as well as price paid on business combinations, and net of proceeds from the sale of intangibles and property, plant and equipment

OPERATING PERFORMANCE BREAKDOWN Electric Power Hydrocarbons Corporate and other Total Edison Group 9M2017 a 9M2018 a ∆ 9M2017 a 9M2018 a ∆ 9M2017 a 9M2018 a ∆ 9M2017 a 9M2018 a ∆ (€ mln) Sales revenues 2.999 2.742 (8,6%) 3.935 4.279 8,7% (581) (500) 13,9% 6.353 6.521 2,6% EBITDA b 232 253 9,1% 480 444 (7,5%) (65) (77) (18,5%) 647 620 (4,2%) 647 620 EBITDA decreased due to the combined effect of: 232 - higher margins in thermoelectric generation and an 253 increased contribution from the hydroelectric operations 161 277 - positive contribution of E&P activities, mainly as a result of the increasing Brent price and the recovery 283 203 of exploration costs in Algeria for previous years -65 -77 - the expected fall in margins of the gas supply and 9M2017 9M2018 sales activities which have been penalized by the unfavorable market scenario Corporate, adj. and other Electric power activities - perimeter effect due to the sale of Infrastrutture Gas supply and sales and regulated activities Trasporto Gas Hydrocarbons E&P a) Since January 1, 2018 IFRS 15 “Revenue from contracts with customers” and IFRS9 (relating to financial instruments) entered into force. In order to improve comparability over time, Edison has decided to adopt IFRS15 retrospectively by restating 2017 financial statement. As a result of the adoption of this standard, sales revenues decreased with no impact on EBITDA. The impact of Nine Months 2018 results | 11 the first adoption of IFRS9 were recorded in equity without restatement of 2017 results. b) Adjusted EBITDA in 2017, reflecting the effect of the reclassification from Hydrocarbons to Power operations of the portion of results on hedges on commodities and forex executed in connection with gas imports attributable to Power operations. In 9M2018 such reclassification is not required.

FROM CONSOLIDATED EBITDA TO NET RESULT 9M2017 a) 9M2018 a-b) D (€ mln) Edison recorded a net profit thanks to: EBITDA 647 620 (27) - the positive operating performance; Depreciation, amortization and writedowns (361) (376) (15) - the limited impact of the volatility related Net change in fair value of commodity derivatives (196) 6 202 to commodities and currency hedges Other income (expense), net (6) (15) (9) (+6 mln€ from -196 mln€ in 9 m’ 17); EBIT 84 235 151 - Higher D&A and writedowns partly Net financial income (expense) (46) (22) 24 related to the recovery of exploration Income from (Expense on) equity investments (44) 5 49 costs for prior years in Algeria Profit (loss) before taxes (6) 218 224 - halved financial expense due to Income taxes (94) (120) (26) improvement in the cost of debt and Profit (loss) from continuing operations (100) 98 198 absence of exchange losses. Profit (loss) from discontinued operations - - - 9M2017 results was impacted by the Profit (loss) (100) 98 198 negative economic effect of the disposal of of which: Infrastrutture Trasporto Gas and the 7.3% Minority interest in profit (loss) 10 11 1 Group interest in profit (loss) (110) 87 197 stake in Terminale GNL Adriatico. a) Since January 1, 2018 IFRS 15 “Revenue from contracts with customers” and IFRS9 (relating to financial instruments) entered into force. In order to improve comparability over time, Edison has decided to adopt IFRS15 retrospectively by restating 2017 financial statement. As a result of the adoption of this standard, Nine Months 2018 results | 12 sales revenues decreased with no impact on EBITDA. The impact of the first adoption of IFRS9 were recorded in equity without restatement of 2017 results. b) 9M2018 figures include the acquisition of GNVI since March, Attiva in May and Zephyro in July

NET FINANCIAL DEBT AND CASH FLOW Net Changes in Taxes Other Net financial EBITDA Net Net financial (€ mln) investments a working debt financial debt Dec.31,’17 capital September 30,’18 expenses -66 -97 -10 +620 -259 GNVI, Attiva and Zephyro -116 -368 -310 -14 The good operating performance of the period balanced the cash out of M&A transactions Nine Months 2018 results | 13 a) Coincides with Net capex & net financial investments, including strategic acquisitions