Ascopiave S p A : The Board of Directors has approved the results for the year 2020

PRESS RELEASE

ASCOPIAVE: The Board of Directors has approved the results for the year 2020.

Proposed dividend Euro 0.16 per share (Euro 34.7 million)

Gross Operating Margin Euro 63.8 million (Euro 44.9 million in 2019)

Operating Result Euro 29.2 million (Euro 21.6 million in 2019)

Net Consolidated Profit Euro 58.7 million (Euro 493.2 million in 2019)

The Consolidated Net Profit for the year 2019 is affected by the non-recurring income connected to the net capital gain generated as a result of the finalisation of the partnership with the Hera Group

(Euro 443.5 million).

Net Financial Position: Euro 338.4 million, an increase compared to 31st December 2019 (Euro 213.0 million), mainly due to investments in shareholdings made in 2020 (Euro 68.6 million), the purchase of treasury shares (Euro 28.7 million) the deferral of the terms for delivering energy efficiency certificates and the settlement of the relevant contribution (Euro 28.4 million).

The Ascopiave S.p.A. Board of Directors, which had a meeting chaired by Mr Nicola Cecconato today, acknowledged and approved the draft separate financial statements and consolidated financial statements of the Ascopiave Group for 2020, prepared in compliance with the International Accounting Standards IAS/IFRS.

Ascopiave's Chairman, Nicola Cecconato, commented: "The Group closed the financial year with better results than expected. Operating margins grew significantly, mainly thanks to the consolidation of the gas distribution activities acquired in 2019 and the strategic partnership finalised in the sales business. The net profit achieved is however the result of an increase in the contribution of distribution activities compared to sales activities, consistent with the Group's strategic repositioning objectives towards regulated activities with a lower risk profile. The overall result for the year, which exceeds Euro 58 million, is also supported by the positive effects of some tax optimisation choices that have made it possible to create value by exercising some options introduced by the tax legislation which came into force in the second half of the year.

I would like to emphasise that the results achieved are remarkable, also considering the extremely challenging general context, marked by the pandemic crisis. The Group has succeeded in organising its activities and adapt to the new conditions, ensuring continuity and the essential quality levels of the services provided. Despite the partial slowdown that affected the first months of the year, infrastructure investments were significant and amounted to over Euro 44 million, confirming the Group's commitment to extend the service and improve the functional efficiency of networks and plants.

In 2021, the Group will seize further growth opportunities in the core sector and in other related and synergistic industries, following the guidelines developed in the strategic plan presented last January, with the aim of improving the profitability and sustainability of its business activities. As early as 2020, we took the first steps in the direction indicated therein, through the acquisition of Cart Acqua, a company providing water services, while a few weeks ago we announced the establishment of a partnership with other players in the gas distribution sector to participate in some Territorial Tenders in the Lombardy region.

In light of the positive result achieved during the fiscal year and with the intention of offering our shareholders a satisfying remuneration, the Board of Directors has decided to propose to the Shareholders' Meeting the distribution of a dividend of Euro 0.16 per share".

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.

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-by-line basis.

Revenue from sales

The Ascopiave Group closed 2020 with consolidated revenues amounting to Euro 163.9 million, compared to Euro 124.9 million recorded in 2019 (+31.2%). 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 the consolidation of the company AP Reti Gas Nord-Est.

Gross operating margin

Gross operating margin in 2020 amounted to Euro 63.8 million, an increase compared to Euro 44.9 million in the previous year (+42.1%), mainly due to the extension of the scope of consolidation.

Operating Result

The operating result in 2020 amounted to Euro 29.2 million, compared to Euro 21.6 million in the previous year (+35.1%).

The growth recorded is mainly explained by the increase in gross operating margin and in amortisation, depreciation and provisions (+Euro 11.3 million), also influenced by the extension of the scope of consolidation.

Net Profit

The consolidated net profit amounted to Euro 58.7 million, down Euro 434.5 million compared to the previous year. Both years benefitted from positive non-recurring economic effects mainly related, in 2020, to the application of the options granted by the so-called "August Decree" and the 2021 Budget Law on asset revaluation and tax adjustment (Euro 15.6 million, net of the relevant substitute tax) and in 2019 the capital gain generated thanks to the commercial partnership concluded with the Hera Group (Euro 443.8 million).

The comparison of the net results achieved by the Group, normalised by the non-recurring items and the positive economic effects generated by repetitive activities whose amount varies over the years, shows a substantial consistency between the years under comparison, with a slight improvement in 2020, despite the macroeconomic situation caused by the on-going health emergency and the process initiated for the integration, and generation of synergies, with the new subsidiary AP Reti Gas Nord Est S.r.l. which produced effects during the 2020 financial year.

The results achieved in 2019 by the companies involved in the operation completed on 19th December 2019 with the Hera Group amounted to Euro 35.2 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 2020 financial year of the Ascopiave Group no longer in full, but in proportion to the minority stake held in the company.

Overall, EstEnergy contributed to the net result of 2020 for Euro 18.3 million.

The expansion of the scope of consolidation resulted in the full recognition of the results achieved by Ap Reti Gas Nord Est (Euro +5.8 million), acquired as part of the same transaction described above, and the collection of the dividends distributed by the investees Hera Comm S.p.A. (Euro +2.7 million) and Acsm-Agam S.p.A. (Euro +0.8 million).

Net financial charges, equal to Euro 1.6 million, increased compared to the previous year by Euro 0.5 million, mainly due to the increase in average financial exposure during the year.

Taxes for the 2020 financial period are influenced by the revaluation and adjustment of the tax values of depreciable and amortisable assets and goodwill to the statutory values pursuant to the so-called "August Decree" (Law Decree dated 14th August 2020, no. 104) and the 2021 Budget Law (Law 178/2020), from which some Group companies benefitted. This operation entailed the recognition in the tax item of a total income of Euro 15.6 million. Net of this effect, taxes are entered in the income statement for Euro 6.3 million, determining a tax rate of 22.7%, a value calculated by normalising the pre-tax result by the effects of the consolidation of the companies consolidated with the equity method and the income from equity investments.

Operating performance in 2020

The volumes of gas distributed through the networks managed by the fully-consolidated companies were 1,460.8 million cubic metres, up 26.8% compared to the previous year, thanks especially to the extension of the scope of consolidation.

In 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 2020 amounted to Euro 44.6 million and mainly concerned the development, maintenance and upgrade of gas distribution networks and systems.

Specifically, investments in networks and systems amounted to Euro 41.9 million, of which Euro 11.8 million in connections, Euro 17.5 million in enlargements and upgrades of the network and Euro 1.9 million in maintenance, mainly relating to reduction and pre-heating systems. Investments in metres and adjusters amounted to Euro 10.6 million.

In 2020 the Group made investments in shareholdings amounting to Euro 68.6 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), the purchase of 100% of the share capital of Cart Acqua (Euro 8.0 million), a company providing water services, 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 31st December 2020 amounted to Euro 338.4 million, an increase of Euro 125.5 million compared to 31st December 2019.

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

• - The cash flow, net of the result of discontinued operations, generated financial resources totalling

  Euro 94.3 million;

• - Net investments in fixed assets caused the expenditure of Euro 113.0 million;

• - The management of net operating working capital and net fiscal working capital absorbed resources totalling Euro 51.7 million, determined for Euro 28.4 million by the deferral of the terms for delivering the energy efficiency certificates and the recognition of the relevant contribution. Please note that, in January 2021, the Group collected Euro 20.3 million in relation to the certificates delivered;

• - The distribution of dividends by the Parent Company and the purchase of own shares caused the expenditure of Euro 76.3 million;

• - The dividends received from the investees determined the collection of Euro 21.3 million.

Results of the parent company Ascopiave S.p.A.

In 2020, the parent company Ascopiave S.p.A. achieved a net profit of Euro 35.9 million, down Euro 485.3 million compared to 2019 (Euro 503.4 million attributable to the sale of the natural gas sales companies of the Ascopiave Group to the Hera Group). In 2020, the Company received higher dividends from subsidiaries (+Euro 18.1 million), and the result achieved by operating activities grew by Euro 15.4 million.

As of 31st December 2020, the shareholders' equity amounted to Euro 808.3 million, a decrease of Euro 42.5 million compared to the previous year, while net borrowing stood at Euro 311.9 million, up Euro 113.2 million.

Report on corporate governance and ownership structure and non-financial consolidated disclosure

The Board of Directors approved the Report on corporate governance and ownership structure pursuant to article 123-bis of the Consolidated Finance Law, which will be published together with the 2020 Financial Statements (and made available in the "Corporate Governance" section of the website).

The Board of Directors has also approved the Non-financial consolidated disclosure, in compliance with Italian Legislative Decree 254/2016 on the publication of non-financial information and consistent with the principles of transparency and openness that have always characterised the company.

The Company will make available to the public the above-mentioned documents at the registered office and at the stock management company Borsa Italiana, will disseminate and store them in the "eMarket SDIR-eMarket Storage" system provided by Spafid Connect S.p.A. and publish them on the websitewww.gruppoascopiave.itwithin the time prescribed by law.

Significant events during 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 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 websitewww.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.