Ascopiave S p A : The Board of Directors has approved the results for the first nine months of 2020

PRESS RELEASE

ASCOPIAVE: The Board of Directors has approved the results for the first nine months of 2020.

Gross Operating Margin: Euro 45.1 million (Euro 30.5 million in the first nine months of 2019)

Operating Result: Euro 20.0 million (Euro 13.0 million in the first nine months of 2019)

Net Consolidated Profit: Euro 28.8 million (Euro 38.2 million in the first nine months of 2019)

The change in the Net Consolidated Profit (down Euro 9.4 million compared to the first nine months of 2019) is mainly explained, in addition to the inapplicability of non-recurring income components which had positively influenced the result in the first nine months of 2019 for Euro 5.9 million, by the change in the scope of consolidated activities and their different seasonality. Therefore, this change will be offset during the financial year.

Net Financial Position: Euro 316.6 million, an increase compared to 31st December 2019 (Euro 213.0 million), mainly due to investments in shareholdings made in the first nine months of 2020 (Euro

60.6 million), the deferral of the terms for delivering energy efficiency certificates from May to November 2020 and for settling the relevant contribution (Euro 23.4 million) and the purchase of

treasury shares (Euro 8.1 million).

The Board of Directors of Ascopiave S.p.A., which had a meeting chaired by Mr Nicola Cecconato today, acknowledged and approved the interim report of the Ascopiave Group as of 30th September 2020, drafted in compliance with the International Accounting Standards IAS/IFR.

Nicola Cecconato, Ascopiave's Chairman, commented: "The results approved today confirm the excellent performance of the activities controlled by the Group. Operating margins are increasing significantly compared to last year, thanks to the expansion of the scope of consolidation and efficient cost management. The Covid crisis, despite involving a reorganisation of activities for a few months, has not prevented the Group from implementing its investment programme, up 20% compared to last year. The consolidated results of the partnership with EstEnergy were satisfactory and in line with our expectations, confirming the soundness of the strategic choice made by the Group with regard to the assets held in the sales sector. In the coming months, Ascopiave will continue to operate in the difficult economic context we are experiencing, pursuing with dedication its objectives of operational excellence, growth and profitability".

Change in the scope of consolidation subsequent to extraordinary operations performed in 2019

On 19th December 2019, Ascopiave and Hera completed a complex operation which led to the acquisition by Ascopiave S.p.A. of AP Reti Gas Nord Est, a company operating in the distribution of gas in the provinces of Padua, Udine and Pordenone, and the establishment, through the company EstEnergy, of the leading energy player in North-Eastern Italy, boasting over one million customers.

As a result, the Hera Group sold to EstEnergy its gas and electricity sales activities in the Triveneto area and acquired a 52% stake in the company's share capital and, consequently, control of the company, while Ascopiave sold to EstEnergy the stakes previously held in Sinergie Italiane, Ascotrade, Ascopiave Energie, Blue Meta, Etra Energia and ASM Set, acquiring a 48% minority stake in the company, with a put option exercisable within the seventh year from the operation closing.

Finally, the company Amgas Blu was sold by Ascopiave to the Hera Group, which in turn sold a 3% stake in Hera Comm S.p.A. to Ascopiave.

Such operation represents an important step in the evolution of the business portfolios of the Hera and Ascopiave Groups, fully consistent with the development lines approved by the respective Boards of Directors. Ascopiave, specifically, has implemented its strategic repositioning plan, through the commercial agreement with a primary player and the consolidation of its position in the core business of gas distribution, reaching a portfolio of 775,000 customers and becoming the leading operator in the region of Veneto.

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Subsequent to the operation, the Ascopiave Group restates the operating and financial data of the year 2019 ascribable to the companies sold as discontinued/divested operations, pursuant to the provisions of the international accounting standard IFRS 5.

On 1st July 2019, the company Unigas Distribuzione was merged through acquisition into the Parent Company Ascopiave and, on the same date, Ascopiave transferred the merged unit to Edigas Distribuzione Gas. As a result of this operation, the profit and loss figures of the activities previously held by Unigas Distribuzione were consolidated using the equity method until 30th June 2019, and subsequently on a line-byline basis.

Revenue from sales

The Ascopiave Group closed the first nine months of 2020 with consolidated revenues amounting to Euro

129.3 million, compared to Euro 90.0 million recorded in the same period in 2019 (+43.7%). The increase in turnover is mainly due to the extension of the scope of consolidation explained by the merger through acquisition of Unigas Distribuzione and the consequent recognition of the revenues achieved by the merged unit in the context of natural gas distribution services and contributions for white certificates related to the energy efficiency objectives applying to the company, and the consolidation of the company AP Reti Gas Nord-Est.

Gross operating margin

Gross operating margin in the first nine months of 2020 amounted to Euro 45.1 million, an increase compared to Euro 30.5 million in the same period of the previous year (+48.0%).

The expansion of the scope of consolidation contributed for Euro 14.1 million.

Considering the same scope of consolidation, and net of the effect of the capital gain recorded in 2019 subsequent to the definition of the settlement agreement on the reimbursement value of the gas distribution plant in the municipality of Costabissara (Euro 1.2 million), the gross operating margin improved by Euro 1.8 million, almost entirely attributable to the reduction in net operating costs. Such decrease was in part limited by the effects of the Covid-19 health emergency which, especially in the lockdown period in early 2020, caused a contraction, albeit insignificant, in metre activities and investments. These effects were partially offset by the remedial activities implemented during the same period and in the following months.

Operating Result

The operating result in the first nine months of 2020 amounted to Euro 20.0 million, compared to Euro 13.0 million in the same period of the previous year (+53.0%).

The growth recorded is mainly explained by the increase in gross operating margin and in amortisation and depreciation (Euro 7.7 million), also influenced by the extension of the scope of consolidation.

Net Profit

The consolidated net profit amounted to Euro 28.8 million, marking a decrease of Euro 9.4 million compared to the same period in the previous year (-24.7%).

The results achieved in the first nine months of 2019 by the companies involved in the operation completed on 19th December 2019 with the Hera Group amounted to Euro 30.1 million and were entered in the item "Net result of discontinued/divested operations".

Most of the aforementioned activities, with the sole exception of the stake in Amgas Blu, were transferred to EstEnergy, thus contributing to the result of the Ascopiave Group in the first nine months of 2020 no longer in full, but in proportion to the minority stake held in the company.

On the other hand, the lower contribution of the scope of the assets sold could not be compensated by the consolidation of the portion of the result generated by the activities transferred to EstEnergy by the Hera Group, given their lesser importance as compared to the activities acquired by Ascopiave.

Overall, EstEnergy contributed to the net result of the first nine months of 2020 for Euro 11.2 million, thus determining a reduction of Euro 18.9 million in the contribution of the sales activities to the Group's net result.

The effect of this decrease was also influenced by the entry in the first nine months of 2019 of non-recurring components to the tune of Euro 5.9 million, relating to the recognition of the amounts deriving from the

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recalculation of the de-multiplication coefficient "K" which had been modified by resolution 89/10 of the Authority.

This reduction was partially offset by the expansion of the scope of consolidation which resulted in the full recognition of the results achieved by Ap Reti Gas Nord Est, acquired as part of the same transaction described above (+Euro 4.1 million), a company whose performance is constant during the year, as its results are not affected by seasonality, and by the merger through acquisition of Unigas Distribuzione Gas, effective 1st July 2019.

Commenting specifically on the other economic cost items not resulting from usual operations, please be aware that net financial income, equal to Euro 2.3 million, increased by Euro 3.1 million compared to the same period of the previous year, when financial charges amounted to Euro 0.8 million.

Taxes, as regards solely the scope of the activities consolidated on a line-by-line basis, amounted to Euro 4.8 million, and therefore the tax rate, calculated by normalising the pre-tax result of the companies consolidated with the equity method, decreased from 39.1% to 25.3%.

Operating performance in the first nine months of 2020

The volumes of gas distributed through the networks managed by the fully-consolidated companies were

948.2 million cubic metres, up 18.4% compared to the first nine months of the previous year, thanks especially to the extension of the scope of consolidation.

In the first nine months of 2019, the company Unigas Distribuzione, consolidated with the equity method until 30th June 2019, had distributed 42.6 million cubic metres pro-rata.

Investments

Investments by the fully-consolidated companies in intangible and tangible fixed assets in the first nine months of 2020 amounted to Euro 26.2 million and mainly concerned the development, maintenance and upgrade of gas distribution networks and systems.

Specifically, investments in networks and systems amounted to Euro 17.7 million, of which Euro 6.9 million in connections, Euro 9.7 million in enlargements and upgrades of the network and Euro 1.1 million in maintenance, mainly relating to reduction and pre-heating systems. Investments in metres and adjusters amounted to Euro 6.5 million.

In the first nine months of 2020 the Group made investments in shareholdings amounting to Euro 60.6 million, due to the purchase of 4.99% of the share capital of Acsm Agam (Euro 26.7 million), a multi-utility company based in the region of Lombardy and active in gas, electricity, water and environmental services, the subscription of a capital increase in EstEnergy (Euro 32.5 million) and the payment of the contractual adjustment for the purchase of AP Reti Gas Nord Est (Euro 1.4 million).

Indebtedness

The Group's net financial position as of 30th September 2020 amounted to Euro 316.6 million, an increase of Euro 103.7 million as compared to 31st December 2019.

The negative financial flow was determined mainly by the following operations:

• The cash flow, net of the result of the discontinued companies, generated financial resources totalling Euro 53.9 million;
• Net investments in fixed assets caused the expenditure of Euro 86.0 million;
• The management of net operating working capital and net fiscal capital absorbed resources totalling Euro 37.3 million;
• The management of equity (distribution of dividends net of dividends collected from the companies consolidated with the equity method and purchase of treasury shares), caused the financial expenditure of Euro 34.2 million.

Significant events during the first nine months of 2020

Publication of information document

On 1st January 2020, Ascopiave S.p.A. announced that the information document prepared pursuant to Article 71, Consob Regulation no. 11971/99, relating to the partnership between Ascopiave S.p.A. and the

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Hera Group, whose completion was communicated to the stock market on 19th December 2019, is available to the public at the premises of Borsa Italiana S.p.A., at the registered office of the Company, its website www.gruppoascopiave.it, and also on the authorised storage mechanism "eMarket Storage" (www.emarketstorage.com) managed by Spafid Connect S.p.A..

Ascopiave, territorial investments on the rise: over Euro 40 million envisaged in 2020

On 16th January 2020, Ascopiave S.p.A. announced that Ascopiave's Investment Plan, for the expansion and upgrade of its distribution network and enhancement of energy efficiency, underscores the sturdy connection between the Group and its catchment area.

In 2020, the economic commitment of the Group - listed under the Star segment of Borsa Italiana, among the leading operators in the natural gas sector in the country - will be over Euro 40 million, against Euro 31 million in 2019. Disbursements will focus on the creation of new distribution infrastructure, extraordinary maintenance works and new allotments, in addition to the installation of smart metres, designed to help customers save by making their homes as energy sustainable as possible.

In the year just ended, the gas distribution works performed by the Ascopiave Group in Municipalities where it holds assignments involved 93 km of network, up +25% compared to 2018. Of these, over 52 km were in the Province of Treviso alone, where the subsidiary AP Reti Gas performed the works.

Again as regards this Province alone, investments already implemented or planned over the 2019-2021 three- year period concern 120 km of network, worth about Euro 16 million. The works include those in progress in Nervesa della Battaglia for approximately Euro 2.3 million, Castelfranco Veneto (about Euro 2 million), Fontanelle (approximately Euro 1.5 million), San Biagio di Callalta (approximately Euro 1.5 million) and Pederobba (little over Euro 1 million), as well as those planned in 18 Municipalities in the Marca Trevigiana Area.

Purchase of Hera S.p.A. shares

Subsequent to the press release issued on 31st January 2020 by Hera S.p.A., informing that the latter had acquired a 2.5% stake in Ascopiave S.p.A., with a view to strengthening the partnership between the two companies, the Board of Directors of Ascopiave S.p.A. approved the purchase of Hera S.p.A. shares, corresponding to approximately 0.4% of its share capital. Ascopiave will inform the market when the purchase is completed.

Resignation of Mr Giorgio Martorelli from the Board of Directors of Ascopiave S.p.A.

On 3rd February 2020, Ascopiave S.p.A. informed that it received the resignation of Mr Giorgio Martorelli, an independent and non-executive member of the Board of Directors of Ascopiave S.p.A., as well as a member of the Control and Risks Committee. The resignation was submitted for personal reasons.

Mr Martorelli had been elected by the Shareholders' Meeting on 28th April 2017 and was presented as a candidate jointly by Amber Capital Italia SGR S.p.A., as the manager of the Alpha Ucits Sicav-Amber Equity Fund, and by ASM Rovigo S.p.A., a company controlled by the Municipality of Rovigo, both minority shareholders of Ascopiave S.p.A..

To the knowledge of the Company, Mr Martorelli does not hold any shares in Ascopiave S.p.A..

Subsequent to the resignation, the Board of Directors has taken appropriate action under the law and the Articles of Association.

Purchase of Acsm Agam S.p.A. shares

Ascopiave S.p.A. announced that on 7th February 2020 it purchased 7,241,661 shares of Acsm Agam S.p.A., a multi-utility company based in the Region of Lombardy and active in gas, water, electricity and environmental services, representing 3.67% of the share capital.

Subsequently, Ascopiave purchased additional shares, and now holds a stake equal to 4.99% of the share capital.

This investment is aligned with the strategic goals of the Group, since the activities and services managed by Acsm Agam S.p.A are consistent with the development lines pursued by the Ascopiave Group.

Information on Covid 19

During the first months of 2020, the whole world, starting with the Asian countries and then continuing with several other nations, including Italy, has been progressively struck by the international health emergency caused by the Covid 19 virus, the so-called Coronavirus, which spread rapidly throughout our peninsula especially in the northern regions, greatly affecting our country.

The Group has carefully and constantly monitored the evolution of the situation in the area where its activities are located, but also the development of the pandemic at an international level. In order to deal with the emergency, the Group has operated and is operating in absolute compliance with the decrees issued by the bodies in charge, both at national and local level, prioritising the health and safety of workers to such an

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