ENAV S p A : Consolidated Interim Financial Report as at 30 June 2020

Consolidated Interim Financial Reportas at 30 June 2020ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 3ContentsInterim report on operations 4

ENAV in figures 5

Corporate bodies 6

Business and structure of the ENAV Group 7

Operating environment 8

Market and air traffic developments 9

Performance and financial position of the Group 15

Human resources 25

Other information 26

Risk management 28

Outlook for operations

32

Interim condensed consolidated financial statements at 30 June 2020 34

Consolidated financial statements 35

Explanatory notes to the interim condensed consolidated financial statements

42

Certification of the Chief Executive Officer and the Financial Reporting Officer 85

Independent Auditor's Report

86

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 4

Interim report on operationsENAV Group - Consolidated Interim Financial Report as at 30 June 2020 5ENAV in figuresPerformance 1st Half 2020 1st Half 2019 Change %Total revenues 372,491 417,298 (44,807) -10.7%EBITDA 88,022 115,038 (27,016) -23.5%EBITDA margin 23.6% 27.6% -4.0%EBIT 20,483 49,570 (29,087) -58.7%EBIT margin 5.5% 11.9% -6.4%Profit for the year attributable to shareholders of theParent Company 15,720 34,170 (18,450) -54.0%(Thousands of euros)Financial position 30.06.2020 31.12.2019 Change %Net capital employed 1,158,374 1,029,667 128,707 12.5%Equity attributable to attributable to shareholders of theParent Company 1,059,855 1,156,043 (96,188) -8.3%Net financial debt 98,519 (126,376) 224,895 n.a.(Thousands of euros)Other indicators 1st Half 2020 1st Half 2019 Change %En-route service units 1,884,969 4,529,875 (2,644,906) -58.4%Terminal service units Charging Zone 1 43,074 112,481 (69,407) -61.7%Terminal service units Charging Zone 2 70,993 165,141 (94,148) -57.0%Terminal service units Charging Zone 3 78,087 203,603 (125,516) -61.6%Free cash flow (112,336) 74,901 (187,237) n.a.Headcount at end of period 4,230 4,054 176 4.3%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 6Corporate bodies(*) The Shareholders' Meeting of 21 May 2020 appointed the ENAV Board of Directors for 2020 - 2022, with the

term ending on the date of the Shareholders' Meeting to be called to approve the financial statements as at 31

December 2022;

(**) The Committees were reformed by the Board of Directors meeting held on 21 May 2020 following the

Shareholders' Meeting.

Board of Directors (*)

ChairmanFrancesca Isgrò

Chief Executive OfficerPaolo Simioni

DirectorsAngela Bergantino

Laura Cavallo

Giuseppe Lorubio

Fabiola Mascardi

Fabio Pammolli

Carlo Paris

Antonio Santi

Control, Risks and Related Parties Committee (**)

ChairmanAntonio Santi

MemberLaura Cavallo

Fabio Pammolli

Remuneration and Appointments Committee (**)

ChairmanGiuseppe Lorubio

MemberLaura Cavallo

Antonio Santi

Sustainability Committee (**)

ChairmanCarlo Paris

MemberAngela Bergantino

Fabiola Mascardi

Board of Auditors

ChairmanDario Righetti

Standing auditorsFranca Brusco

Pierumberto Spanò

Alternate auditorsFrancesca Parente

Roberto Cassader

Magistrate of the Court of Auditors designated to control ENAV S.p.A.Mauro Orefice

Audit firmEY S.p.A.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 7

Business and structure of the ENAV GroupThe ENAV Group's business can be broken down into four operational sectors, namely i) air navigation

services; ii) maintenance services; and iii) AIM software solutions and iv) other services, to which the

companies within the scope of consolidation belong.

Theair navigation servicessector is the exclusive domain ofENAV S.p.A.whose core business is providing

air traffic control and management services and other essential air navigation services in Italian airspace

and at the national civil airports for which it is responsible, ensuring the highest technical and system

standards in flight safety and upgrading the technology infrastructure of air navigation systems. ENAV is

the fifth largest player in Europe and a major actor at the global level in the Air Traffic Control (ATC)

industry.

Themaintenance servicessector is covered byTechno Sky S.r.l.wholly owned by ENAV, whose core

business is the management and maintenance of the equipment and systems used for national air traffic

control, ensuring its full operational efficiency and uninterrupted availability around the clock.

TheAIM (Aeronautical Information Management) software solutionssegment is occupied byIDS AirNav

S.r.l.acquired in full by ENAV on 18 July 2019, which is involved in the development of software solutions

for the management of aeronautical information and air traffic management, delivering the associated

commercial services to a range of customers in Italy, Europe and elsewhere in the world.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 8

The residualother sectorssegment includes:

▪Enav Asia Pacific Sdn Bhd, a Malaysian company wholly owned by ENAV, which is involved in business

development and the delivery of services on the non-regulated market, with particular regard to the

areas of strategic interest in Southeast Asia.

▪Enav North Atlantic LLC, which holds 9.14% of the share capital of Aireon LLC, which will rise to 11.1%

post redemption. It is responsible for the implementation of the first global satellite monitoring

system for air traffic control, with the aim of enabling the comprehensive surveillance of all routes

worldwide, with a focus on the polar, oceanic and other remote areas currently not covered by radarbased

air traffic control services, and enabling the optimisation of routes and achieving ever higher

standards of flight safety and efficiency.

▪D-Flight S.p.A.a company 60% held by ENAV and 40% held by an industrial partnership consisting of

Leonardo S.p.A. and Telespazio S.p.A. through the specifically established company UTM Systems &

Services S.r.l.. D-Flight is involved in the development and provision of services for low-altitude air

traffic management of remotely piloted aircraft and all other types of aircraft that fall within the

unmanned aerial vehicles category.

▪ENAV España Control Aereo S.L.U.a company wholly owned by ENAV, which was acquired in January

2020 in order to participate in the tender for the award of terminal air traffic management services

organised by the Spanish airport operator.

▪Sicta Consortium in liquidation, which was placed in voluntary liquidation with a resolution voted by

all the Consortium's shareholders on 3 March 2017, with effect from 28 March 2017.

Operating environmentThe operating environment in the first quarter of 2020, characterised by an extraordinary emergency

connected with the effects of the COVID-19 pandemic and by the general quarantine imposed in response,

continued to prevail during the second quarter of the year as well. With specific regard to Italy, the strong

contraction in economic activity caused a substantial decline in GDP in April-June 2020, which, adjusted

for calendar effects, decreased by 12.8% compared with the previous quarter and 17.7% compared with

the second quarter of 2019. It should be noted that this figure is worse than the preliminary estimate

released in July 2020, which forecast a 12.4% contraction in GDP.

The air transport sector was especially hard hit in these conditions after having already experienced a

substantial reduction in volumes from March 2020, with traffic levels consistently 90% down on those in

the corresponding period of the previous year for most European countries.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 9

The data collected by Eurocontrol on traffic for the European area confirm that the reduction in traffic

volumes was particularly significant, bearing in mind that on 30 June 2020, traffic had declined from over

35,000 flights handled on the corresponding day in 2019 to about 9,300 in 2020, a reduction of 73.8%.

In July and August 2020, traffic increased significantly, leaving volumes in mid-September about 56.8%

below the figure posted in the corresponding period of 2019.

This trend can also be seen in Italy, where the number of flights at 15 September 2020 was 60.6% lower

than in 2019. Currently, the contraction in traffic volumes has generally stabilised at between 55% and

60%, presumably reflecting general uncertainty about a possible resurgence of the pandemic and a

consequent tightening of the measures for containing the contagion.

As a result of the spread of COVID-19, operations at airports and the Area Control Centres have gradually

diminished, as have activities on the non-regulated market, with a consequent reduction in the Group's

revenues.

Taking account of the estimates released by the various sector statistical offices regarding the

continuation of the effects of the pandemic for 2020 as a whole on all national and international economic

sectors, at the end of March the Group began a process of reforecasting its costs in order to reduce

expenditure overall and to mitigate the effects of the reduction in revenues, without however

compromising the levels of capacity and safety delivered in the provision of its services.

The most substantial measures concerned the variable portion of personnel costs, which focused on the

use of holidays, the containment of overtime, travel, availability and bonuses, as well as the rescheduling

of hiring planned for the year.

At the same time, further actions were taken to mitigate overall expenditure, with measures impacting

external costs for non-operational maintenance, consulting services, utilities and general costs not directly

related to operating the business.

In overall terms, the reduction in costs envisaged in the budget revision approved by the Board of

Directors on 14 May 2020, which was confirmed in the actual figures for the period in question, helped to

mitigate the adverse effects caused by the reduction in tariff revenues and in balance revenues as a result

of the adjustment of the charging mechanism envisaged by the European Commission.

Market and air traffic developmentsAir traffic control activities in the first half of 2020 were fully impacted by the effects of the global health

emergency, which with the imposition of lockdown measures in March 2020 saw the almost total

elimination of passengers at airports, with particularly severe impacts on airlines, airports and air

navigation service providers.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 10

The first half of 2020 ended with a drastic reduction in traffic volumes, as en-route service units (*) fell by

a total of 58.4% compared with the same period of 2019. After closing the first quarter of the year with a

decrease of 12.3% in en-route service units, despite having benefitted from the good performance

registered in the first two months of the year, the trend in the second quarter of 2020 was especially

adverse, with an average decrease in service units of 89.2%, posting figures of -91.1%, -89.9% and -87.2%

in April, May and June, respectively, reflecting in full the effects of the COVID-19 pandemic.

Similar developments were registered in Europe, where the average number of service units in the first

half of 2020 for the countries belonging to Eurocontrol decreased by 53.2%, with all the countries in the

European comparator group posting declines: Germany (-50.3%), United Kingdom (-51.9%), Spain (-

57.6%) and France (-58.8%).

(*) overflight traffic in Italian airspace, with or without layover.

(**) "service unit" is the unit of measurement used within Eurocontrol to determine the value of services rendered.

It is a combination of two elements: the weight of the aircraft at departure and the distance travelled.

(***) excluding exempt traffic not reported to Eurocontrol.

En-route traffic

Total en-route traffic in Italy in the first half of 2020 registered a decrease of 58.4% in the number of

service units reported by Eurocontrol (the same value if the residual categoryExempt not reported to

Eurocontrolis included) and a decline of 59.9% in the number of flights handled (-59.7% including the

residual categoryExempt not reported to Eurocontrol).

The decisive factor in this decline in air traffic, especially in the second quarter, is to be found exclusively

in the COVID-19 pandemic, which led to the almost total shutdown of the air transport sector. These

exceptional conditions emerged in the early days of March in Italy and were followed by the spread of the

health emergency to most other European countries, which are equally important in generating traffic

flows in Italian airspace.

Until February, total en-route traffic in Italy had displayed a certain dynamism, achieving gains of 9.8% in

terms of service units (SUs) and 4.9% in the number of flights handled in the comparison between January-

February 2020 and January-February 2019, thanks mainly to overflight traffic, which benefitted from the

Total en-route traffic

service units (**) no. %

France 4,293,134 10,422,562 (6,129,428) -58.8%

Germany 3,617,066 7,277,058 (3,659,992) -50.3%

Great Britain 2,874,406 5,975,823 (3,101,417) -51.9%

Spain 2,302,193 5,430,447 (3,128,254) -57.6%

Italy (***) 1,884,397 4,528,609 (2,644,212) -58.4%

EUROCONTROL 34,123,255 72,905,616 (38,782,361) -53.2%

Change

1st Half 2020 1st Half 2019

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 11

consolidation of the Free Route project.April and May subsequently registered significant decreases, on

the order of about 90% in terms of service units (SUs), while June saw a decrease of about 87%, with only

a minimal recovery in air traffic connected with summer holiday travel. There was only a modest number

of flights to Mediterranean destinations, such as Spain, Greece, France, Malta and Tunisia, which have the

greatest impact on the volume of overflights in national airspace.

An analysis of the composition of en-route traffic shows:

▪international commercial traffic, the category of flights departing or arriving at an airport in Italy,

which in the first half of 2020 recorded a steep decrease in air traffic, both in terms of service units (-

64.4%) and the number of assisted flights (-63.8%), interrupting the steady growth of recent years,

which came to a halt in February 2020 owing to the COVID-19 pandemic. In the second quarter of

2020 alone, traffic ground to an almost complete halt, both in terms of SUs (-93.4%) and flights

handled (-92.9%).

With regard to international traffic by flight distance (short, medium and long-distance flights in

national airspace), in the first half of 2020 all segments registered decreases in air traffic of more than

60% in terms of service units, with the contractions in April and June amounting to about 90%.

En-route traffic

(number of flights) no. %

Domestic 61,524 140,394 (78,870) -56.2%

International 170,591 471,154 (300,563) -63.8%

Overflight 119,813 297,806 (177,993) -59.8%

Paying total 351,928 909,354 (557,426) -61.3%

Military 15,228 16,110 (882) -5.5%

Other exempt 7,019 8,184 (1,165) -14.2%

Total exempt 22,247 24,294 (2,047) -8.4%

Total reported by Eurocontrol 374,175 933,648 (559,473) -59.9%

Exempt not reported to Eurocontrol 6,172 10,403 (4,231) -40.7%

Total 380,347 944,051 (563,704) -59.7%

Change

1st Half 2020 1st Half 2019

En-route traffic

(service units) no. %

Domestic 354,361 848,539 (494,178) -58.2%

International 661,121 1,856,373 (1,195,252) -64.4%

Overflight 807,494 1,753,446 (945,952) -53.9%

Paying total 1,822,976 4,458,358 (2,635,382) -59.1%

Military 55,163 64,221 (9,058) -14.1%

Other exempt 6,258 6,030 228 3.8%

Total exempt 61,421 70,251 (8,830) -12.6%

Total reported by Eurocontrol 1,884,397 4,528,609 (2,644,212) -58.4%

Exempt not reported to Eurocontrol 572 1,266 (694) -54.8%

Total 1,884,969 4,529,875 (2,644,906) -58.4%

Change

1st Half 2020 1st Half 2019

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 12

With regard to flight routes by continent, the first half of 2020 showed a decrease of more than 65%

in connections between Italy and the rest of Europe, representing about 74% of total international

traffic service units, and in connections between Italy and the American continent, accounting for

about 5% of international traffic service units. Decreases of more than 50% in service units were

registered for connections between Italy and Africa and Italy and Asia, which respectively represent

8% and 13% of total international service units;

▪commercial overflight traffic, a category that includes flights that only cross through domestic

airspace, posted a steep decrease in the first half of 2020 in terms of service units (-53.9%) and

number of flights handled (-59.8%), after registering an increase of 24% in terms of service units in

the first two months of 2020 compared with the same period of 2019. This segment, too, was mainly

impacted by the health emergency in the second quarter of the year, which experienced a substantial

decrease in both SUs (-87.8%) and number of flights (90.1%). In terms of traffic by flight distance, the

routes registering the smallest declines in terms of service units were longer-distance flights (>800

Km in national airspace), which contracted by 47.3%, while medium (between 400 and 800 Km) and

shorter-distance flights (<400 Km) experienced decreases of 59.1% and 54.7% respectively.

As regards the main traffic routes, intra-European flights, which represent about 40% of total

overflight SUs, declined by 64.9% in terms of SUs. A similar pattern was registered by connections

between Europe and Africa (-45.4% in SUs), Europe and Asia (-28.9% in SUs) and Europe and the

American continent (-55.4% in SUs);

▪domestic commercial trafficin the first half of 2020 posted a decrease in service units (-58.2%) and

the number of assisted flights (-56.2%). In January-February 2020, this segment of traffic had recorded

unchanged volumes (-0.3% SUs), while in the second quarter it registered a reduction of 88.4% in SUs

and 83.5% in the number of assisted flights, in line with other types of flight. Note that in June

domestic traffic registered the smallest decrease (about -80.8% in SUs), thanks especially to the last

ten days of the month;

▪exempt trafficis divided into: i)exempt traffic reported by Eurocontrol, which decreased by 12.6% in

terms of service units and by 8.4% in terms of the number of assisted flights. The developments in

this category mainly reflected a decline in military flights (-14.1% in SUs), which represent about 90%

of exempt traffic; and ii)exempt traffic not reported to Eurocontrol, which accounts for only a residual

proportion of revenues, posted a decrease of 54.8% in service units and one of 40.7% in the number

of assisted flights.

With regard to carriers, the importance of the low-cost segment was confirmed in the first half of 2020,

with Ryanair registering the largest volume of traffic in national airspace, while legacy carriers improved

their positioning. Given the health emergency, all carriers recorded decreases in traffic, notably Ryanair

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 13

(-60.5% in SUs), EasyJet (-69.4% in SUs), Wizz Air (-52.8% in SUs), Vueling (-75.7% SUs) and Aegean (-66.4%

in SUs). In January and February, these companies had instead posted increases (with the exception of

Vueling). Among other airlines, the Middle Eastern carriers such as Turkish Airlines (-48.0% in SUs),

Emirates (-44.8% in SUs) and Qatar Airways (-32.5% in SUs) recorded smaller declines than other airlines

thanks to the good performance registered in the first two months of the year. Decreases were also

registered in the first half of 2020 by Lufthansa (-67.2% in SUs), Air France (-53.7% in SUs) and British

Airways (-41.9% in SUs). Alitalia also posted losses, closing the half with a decrease of 55.4% in service

units and 56.8% in the number of assisted flights.

Terminal traffic

In the first half of 2020, terminal traffic reported by Eurocontrol, which includes departing and arriving

traffic within 20 km of the runway, contracted by 60.1% in terms of service units and 59.5% in terms of

the number of assisted flights.

Terminal traffic

(number of flights) no. %

Domestic

Chg. Zone 1 10,921 24,939 (14,018) -56.2%

Chg. Zone 2 13,100 31,176 (18,076) -58.0%

Chg. Zone 3 34,323 80,402 (46,079) -57.3%

Total domestic flights 58,344 136,517 (78,173) -57.3%

International

Chg. Zone 1 17,836 50,301 (32,465) -64.5%

Chg. Zone 2 36,239 90,892 (54,653) -60.1%

Chg. Zone 3 30,525 93,024 (62,499) -67.2%

Total international flights 84,600 234,217 (149,617) -63.9%

Paying total 142,944 370,734 (227,790) -61.4%

Exempt

Chg. Zone 1 189 38 151 397.4%

Chg. Zone 2 824 439 385 87.7%

Chg. Zone 3 8,583 9,626 (1,043) -10.8%

Total exempt flights 9,596 10,103 (507) -5.0%

Total reported by Eurocontrol 152,540 380,837 (228,297) -59.9%

Exempt not reported to Eurocontrol

Chg. Zone 1 0 2 (2) n.a.

Chg. Zone 2 144 154 (10) -6.5%

Chg. Zone 3 3,777 5,796 (2,019) -34.8%

Total exempt flights not reported to Eurocontrol 3,921 5,952 (2,029) -34.1%

Total by Chg. Zone

Chg. Zone 1 28,946 75,280 (46,334) -61.5%

Chg. Zone 2 50,307 122,661 (72,354) -59.0%

Chg. Zone 3 77,208 188,848 (111,640) -59.1%

Total 156,461 386,789 (230,326) -59.5%

Change

1st Half 2020 1st Half 2019

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 14

Overall, the performance for the first half of 2020 compared with the same period of the previous year

shows a general decline in all three charging zones, both in terms of service units and the number of

assisted flights, reflecting the health emergency, which also led to the closure of air traffic at most Italian

airports: starting from 12 March, only eighteen airports continued to operate in Italy, with that number

rising to twenty-five following the issue of a ministerial decree on 14 June. More specifically:

▪ Charging Zone 1, represented by Rome Fiumicino airport, experienced a decrease in traffic in the first

half of 2020 of 61.7% in terms of service units and 61.5% in the number of flights handled, with

decreases in all components of air traffic, whether international (-64.7% in SUs) or domestic (-54.5%

in SUs). The Roman airport had already seen a slowdown in flight activity in the first two months of

the year, owing to a decline in the operations of major carriers such as Ryanair, Vueling, EasyJet and

Alitalia, which accounts for about 50% of total service units at the airport. In the second quarter of

2020 alone, it registered a decrease of 89.3% in the number of service units, with international traffic

contracting more (-93.4% in SUs) than domestic traffic (-78.4%);

▪ Charging Zone 2, represented by the airports of Milan Malpensa, Milan Linate, Venice Tessera and

Bergamo Orio al Serio, posted a decrease for the period in terms of service units (-57.0%) and in flights

Terminal traffic

(service units) no. %

Domestic

Chg. Zone 1 14,202 31,182 (16,980) -54.5%

Chg. Zone 2 15,932 37,190 (21,258) -57.2%

Chg. Zone 3 38,925 92,509 (53,584) -57.9%

Total domestic SUs 69,059 160,881 (91,822) -57.1%

International

Chg. Zone 1 28,665 81,236 (52,571) -64.7%

Chg. Zone 2 54,314 127,750 (73,436) -57.5%

Chg. Zone 3 35,284 107,040 (71,756) -67.0%

Total international SUs 118,263 316,026 (197,763) -62.6%

Paying total 187,322 476,907 (289,585) -60.7%

Exempt

Chg. Zone 1 207 63 144 228.6%

Chg. Zone 2 735 188 547 291.0%

Chg. Zone 3 3,596 3,599 (3) -0.1%

Total exempt SUs 4,538 3,850 688 17.9%

Total reported by Eurocontrol 191,860 480,757 (288,897) -60.1%

Exempt not reported to Eurocontrol

Chg. Zone 1 0 0 0 n.a.

Chg. Zone 2 12 13 (1) -7.7%

Chg. Zone 3 282 455 (173) -38.0%

Total exempt SUs not reported to Eurocontrol 294 468 (174) -37.2%

Total by Charging Zone

Chg. Zone 1 43,074 112,481 (69,407) -61.7%

Chg. Zone 2 70,993 165,141 (94,148) -57.0%

Chg. Zone 3 78,087 203,603 (125,516) -61.6%

Total 192,154 481,225 (289,071) -60.1%

Change

1st Half 2020 1st Half 2019

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 15

handled (-59.0%), affecting all airports in this charging zone, with drops of between 50% and 55% at

Milan Malpensa and Bergamo Orio al Serio and about 65% at Milan Linate and Venice Tessera. In the

first two months of 2020, Charging Zone 2 had posted gains (+3.3% in SUs) thanks to the performance

of Milan Malpensa and Bergamo Orio al Serio, while in the second quarter it saw traffic volumes

contract sharply (-86.6%), also reflecting the halt of flight operations as from 13 March at the airports

of Milan Linate and Bergamo Orio al Serio. The charging zone is less affected by the operations of

Alitalia, which represented about 13% of service units in the first half of the year and posted a

decrease of 56.3% in terms of service units, while in the first two months of the year traffic was

broadly unchanged on the same period of the previous year;

▪ Charging Zone 3 registered decreases both in terms of service units (-61.6%) and number of flights

handled (-59.1%). In the first two months of the year, the charging zone had registered gains (+2.7%

in SUs; +2.3% in flights) thanks to the good performance of the main airports in this zone.

Nevertheless, at the end of the first half, decreases ranging between 50% and 60% were reported by

all airports, including Bologna, Naples, Catania, Rome Ciampino, Palermo, Bari and Torino Caselle. In

the second quarter of the year, the zone experienced a severe contraction in service units (-90.8%),

also reflecting the fact that most of the smaller airports in this segment were closed on government

orders. Alitalia experienced a decrease in terms of service units (-54.6%). The impact was still relatively

small, considering that Alitalia's operations account for about 17% of service units in this charging

zone.

As for the various traffic components, as already noted for en-route traffic, the COVID-19 crisis generated

contractions for bothinternational traffic(-62.6% in SUs, -63.9% in flights) anddomestic traffic(-57.1% in

SUs, -57.3% in flights). By contrast, in January-February 2020 international traffic had registered an

increase (+1.9% in SUs), while domestic traffic had posted a small decline (-2.8% in SUs) compared with

the same period of the previous year.

Performance and financial position of the ENAV GroupDefinition of alternative performance measures

In order to illustrate the performance and financial position of the ENAV Group, separate reclassified

schedules have been prepared that differ from the schedules envisaged under international accounting

standards and adopted by the Group and the Parent Company for use in the interim condensed

consolidated financial statements. These reclassified schedules contain alternative performance

indicators differing from those drawn directly from the interim condensed consolidated financial

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 16

statements, which are used by management for monitoring the performance of the Group and

representing the performance and financial results produced by the business.

The use of alternative performance indicators in the context of regulated information disclosed to the

public was made mandatory with Consob Communication no. 0092543 of 3 December 2015, which

transposed the guidelines (no. 2015/1415) issued on 5 October 2015 by the European Securities and

Markets Authority (ESMA). The indicators are intended to ensure the comparability, reliability and

understanding of financial information.

These indicators were constructed on the basis of the following criteria:

▪EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation): an indicator of profit before

the effects of financial operations and taxation, as well as depreciation, amortisation and writedowns

of property, plant and equipment and intangible assets and receivables and provisions, as reported in

the financial statements and adjusted for investment grants directly related to the depreciating and

amortising investments to which they refer;

▪EBITDA margin: EBITDA expressed as a percentage of total revenues and adjusted for investment

grants as specified above;

▪EBIT (Earnings Before Interest and Tax):EBITDA less depreciation and amortisation adjusted for

investment grants and writedowns of property, plant and equipment and intangible fixed assets and

receivables and provisions;

▪EBIT margin: EBIT expressed as a percentage of total revenues less investment grants as specified

above;

▪Net non-current assets: a financial measure represented by the fixed capital employed in operations.

It includes property, plant and equipment, intangible assets, investments in other entities, noncurrent

trade receivables and payables, and other non-current assets and liabilities;

▪Net working capital: capital employed in operations comprising inventory, trade receivables and

other non-financial current assets, net of trade payables and other current liabilities excluding those

of a financial nature, plus assets held for disposal net of related liabilities;

▪Gross capital employed: the sum of net non-current assets and net working capital;

▪Net capital employed: the sum of gross capital employed, less employee benefit provisions, the

provision for risks and charges and deferred tax assets/liabilities;

▪Net financial debt: the sum of the current and non-current financial liabilities, current and noncurrent

financial receivables net of non-current financial liabilities in respect of the fair value of

derivative financial instruments and cash and cash equivalents;

▪Free cash flow: the sum of the cash flow generated or absorbed by operating activities and the cash

flow generated or absorbed by investing activities.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 17

The reclassified schedules for the income statement, statement of financial position and statement of

cash flows, the statement of net financial position and the key economic and financial indicators used by

management to monitor performance are reported below.

The impact of COVID-19 on performance

In compliance with the recommendations issued by ESMA in May and referred to by CONSOB on 16 July

2020 regarding the impact of the COVID-19 pandemic on performance, this section provides a unified

report on the effects of the emergency, with a comparison with the corresponding period of the previous

year.

The impact on performance in the first half of 2020 for the ENAV Group was reflected in a sharp reduction

in revenue from the Parent Company's core business, due to the almost total cessation of operations in

the air transport sector beginning in March 2020, a period in which the COVID-19 emergency was affecting

both Italy and most of the other European countries that generate the largest volume of traffic flows in

national airspace. The contraction in these operations led to a reduction in service units of 58.4% for enroute

traffic and 60.1% for terminal traffic compared with the first half of 2019, with the decline in the

second quarter of 2020 coming to 90% in terms of en-route service units for April and May and 87% in

June. These reductions decreased revenue from charges by a total of €271.1 million compared with the

first half of 2019, of which €201.1 million in respect of en-route traffic and €71 million for terminal traffic.

In response to the impact of the health emergency on the air transport sector, the European Commission

proposed a revised charging mechanism for the 2020-2021 period, with an impact on the measurement

of balance and their recovery in subsequent years, without prejudice to the contractual right to receive

revenues on the basis of services rendered. This new method reduced the value of balance associated

with the decline in traffic in the first half of 2020.

With regard to operating costs, given the reduction in air traffic control operations and the use of smart

working, the variable component of personnel costs declined, as did other operating costs, which, on a

like-for-like basis with respect to the first half of 2019 - i.e. excluding IDS AirNav, which was included in

the scope of consolidation in July 2019 and was therefore not present in the year-earlier period - recorded

an overall decrease of 8.4% despite the increase in costs incurred primarily to safeguard the health of

Group's employees, consisting in the purchase of personal protective equipment, the cost of sanitising

the workplace and donations.

All of this had an impact on the gross operating margin (EBITDA), which declined by 23.5% compared with

the first half of 2019. Another factor was an increase in writedowns of trade receivables recognised to

take account of the change in risk levels in the air transport sector and the expectation of a possible

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 18

deterioration in collections on receivables, producing a decrease of 58.7% in the net operating margin

(EBIT) compared with the corresponding period of the previous year.

Reclassified consolidated income statement

The overall performance of the ENAV Group in the first half of 2020 was affected by the spread of the

COVID-19 pandemic, which took effect starting from March, with net profit for the first half of the year

amounting to €15.6 million, down 54.2% compared with the corresponding period of the previous year.

Revenues from operationsamounted to €164.4 million, a decrease of 61.7% compared with the same

period of the previous year, of which revenues from the Parent Company's core business in the amount

of €152.7 million (-64.1% on the first half of 2019) and revenues from the Group's operations on the nonregulated

market of €11.7 million (+€7.6 million on the first half of 2019), mainly reflecting revenues

generated by the subsidiary IDS AirNav, which was included in the scope of consolidation in July 2019. The

decrease in revenues from the core business, including en-route and terminal revenues, is entirely

Amount %

Revenues from operations 164,482 429,244 (264,762) -61.7%

Balance 191,432 (29,814) 221,246 n.a.

Other operating income 16,577 17,868 (1,291) -7.2%

Total revenues372,491 417,298 (44,807) -10.7%

Personnel costs (235,235) (249,175) 13,940 -5.6%

Capitalised costs 13,239 12,979 260 2.0%

Other operating expenses (62,473) (66,064) 3,591 -5.4%

Total operating costs(284,469) (302,260) 17,791 -5.9%

EBITDA88,022 115,038 (27,016) -23.5%

EBITDA margin23.6% 27.6% -4.0%

NWertit aemdoowrtnissa, tiimonp aoifr minevenst t(mreevnetr sgaral notf s (65,229) (64,872) (357) 0.6%

impairment) and provisions (2,310) (596) (1,714) 287.6%

EBIT20,483 49,570 (29,087) -58.7%

EBIT margin5.5% 11.9% -6.4%

Financial income/(expense) (2,538) (2,609) 71 -2.7%

Income before taxes17,945 46,961 (29,016) -61.8%

Income taxes (2,310) (12,838) 10,528 -82.0%

Profit (loss) for the period15,635 34,123 (18,488) -54.2%

Profit (loss) for the period pertaining to

shareholders of the Parent Company

15,720 34,170 (18,450) -54.0%

Profit (loss) for the period pertaining to noncontrolling

interests

(85) (47) (38) 80.9%

(Thousands of euros)

1st Half 2020 1st Half 2019

Change

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 19

attributable to the COVID-19 pandemic, which sharply curbed air transport operations, producing a

reduction in services units at the end of the first half of 2020 equal to 58.4% for en-route traffic and 60.1%

for terminal traffic. The decrease in revenues generated in the first half of 2020 also reflected a decrease

in charges for en-route traffic applied in 2020 of 15.3% compared with 2019, while the reduction

amounted to 7.4% considering charges net of balance.

Balance, which are also included in the operating activities on the Parent Company, made a positive

contribution of €191.4 million, partially recouping the decrease in traffic actually registered compared

with the planned figures used in determining the charge for 2020. The value of balancewas calculated in

accordance with the proposal of the European Commission, which seeks to modify the existing

mechanism so as to cover actual determined costs for 2020-2021, with a cap (efficiency gains) on total

costs. This balance include en-route revenues of €147.4 million and terminal revenues of €52.9 million,

which in addition to recognition in profit or loss (and thus incorporation in charges for 2020) of balance

recognised in previous years in the positive amount of €3.8 million, take account of the interest

component connected with timing of the recovery of balance recognised in the first half of 2020 in charges

applied, i.e. as from 2023 over five years. This factor had a negative impact of €12.8 million in the period.

Operating expensesdecreased by 5.9% compared with the year-earlier period to a total of €284.5 million,

reflecting a decline both in personnel costs of 5.6% and in other operating expenses of 5.4%, with a slight

increase in capitalised costs. Excluding the costs contributed by IDS AirNav, which were not included in

the corresponding period of 2019, costs declined by 8.4%.

Personnel costs amounted to €235.2 million, a decrease of €13.9 million on the first half of 2019. More

specifically fixed remuneration increased by 2.5%, mainly attributable to the subsidiary IDS AirNav (2%),

which was not consolidated in the first half of 2019, while the remainder are attributable to the effects of

the renewal of the bargaining agreement of the Parent Company, which were triggered in March and

December 2019. The effective workforce at the end of the first half of 2020 numbered 4,230 (4,054 at the

end of the first half of 2019), an increase of 176 that mainly reflected IDS AirNav. The average workforce

stood at 4,235, an increase of 130 compared with the corresponding period of the previous year; excluding

the workforce of IDS AirNav, the average would have decreased by 18 units. Variable remuneration

decreased by 39.9% overall due to the measures taken in response to the health emergency, with a

decrease in overtime for air traffic controllers on the one hand, which was directly connected with the

decline in air traffic, and on the other an increase in recourse to holiday entitlement, which had a positive

effect in the first half of 2020 owing to the rise in the number of days of holiday taken by employees

compared with the year-earlier period. Social security contributions decreased by 5.9% to €55 million,

while other personnel costs rose by €0.5 million to €3.8 million, due to an increase in termination

incentives paid in the period.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 20

Other operating expenses amounted to €62.5 million, down 5.4% compared with the year-earlier period,

with a decline in costs for telecommunications for data connections of the ENET1 network as a result of

the decommissioning of older circuits and the lower costs associated with the new contract and in costs

for utilities as a consequence of the decrease in electricity consumption across the entire country

connected with the closure of certain airports and the use of flexible working arrangements. Other factors

include a reduction in other personnel costs owing to the elimination of travel costs as from March as a

result of the COVOD-19 emergency. These reductions were partially offset by higher costs for the

purchase of personal protective equipment, the cleaning costs associated with extraordinary sanitation

efforts at all sites since the beginning of the coronavirus emergency and donations to the Lazzaro

Spallanzani National Institute for Infectious Diseases and the Civil Protection Department in the fight

against COVID-19.

These developments producedEBITDAof €88 million, down 23.5% compared with the first half of 2019.

Depreciation and amortisation net of investment grants amounted to €65.2 million, broadly in line with

the corresponding period of the previous year, while writedowns of receivables and provisions had a total

negative impact of €2.3 million, an increase on the first half of 2019 in reflection of the updating of the

model used to assess the recoverability of trade receivables in the light of the deterioration of forecast

recoveries of payments in arrears due from carriers owing to the critical conditions impacting the air

transport industry. As a result,EBITamounted to €20.5 million, down 58.7% on the corresponding period

of 2019.

Financial income and expense show net expense of €2.5 million, essentially unchanged on the first half of

2019, while income taxes for the period decreased by 82% to a negative €2.3 million, reflecting both the

decrease in taxable income and the recognition of deferred taxes connected with the discounting of

receivables for balance recognised in the first half of 2020.

Net profit pertaining to shareholders of the Parent Company amounted to €15.7 million, down 54% on

the first half of 2019, while the net loss pertaining to non-controlling interests was €85 thousand.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 21

Reclassified consolidated financial position

Net capital employed amounted to €1,158 million at 30 June 2020, an increase of €128.7 million compared

with 31 December 2019. Of this, 91.5% was funded by consolidated shareholders' equity, with the

remainder covered by non-shareholder funds.

Net non-current assets amounted to €1,236.7 million, an increase of €180.9 million on 31 December 2019,

mainly reflecting: i) an increase of €216.6 million in non-current trade receivables and payables due to the

recognition of the receivables for balance that emerged in the first half of 2020. Net of interest, they

amounted to €192.7 million, reflecting both the reduction in payables for balance following the

reclassification under current liabilities of the portion that will be included in charges and thus in profit or

loss in 2021 and the recognition under non-current trade receivables of the Eurocontrol portion that will

be collected in August 2021 in the amount of about €6 million; ii) a net decrease of €38.8 million in

property, plant and equipment as a result of the recognition of greater depreciation than investments

under construction during the period; and iii) an increase in the value of investments in other entities of

30.06.2020 31.12.2019Property, plant and equipment 937,509 976,272 (38,763) -4.0%Right-of-use assets 7,806 8,857 (1,051) -11.9%Intangible assets 169,101 171,567 (2,466) -1.4%Investments in other entities 64,258 63,225 1,033 1.6%Non-current trade receivables and payables 176,822 (39,804) 216,626 n.a.Other non-current assets and liabilities (118,744) (124,343) 5,599 -4.5%Net non-current assets 1,236,752 1,055,774 180,978 17.1%Inventories 61,301 60,690 611 1.0%Trade receivables 169,560 213,321 (43,761) -20.5%Trade payables (129,364) (138,754) 9,390 -6.8%Other current assets and liabilities (139,590) (115,855) (23,735) 20.5%Assets held for sale net of related liabilities 1,401 1,402 (1) -0.1%Net working capital (36,692) 20,804 (57,496) -276.4%Gross capital employed 1,200,060 1,076,578 123,482 11.5%Employee benefit provisions (50,551) (52,509) 1,958 -3.7%Provisions for risks and charges (1,816) (1,778) (38) 2.1%Deferred tax assets net of liabilities 10,681 7,376 3,305 44.8%Net capital employed 1,158,374 1,029,667 128,707 12.5%Shareholders' equity pertaining to Parent Companyshareholders 1,057,440 1,153,543 (96,103) -8.3%Shareholders' equity pertaining to non-controlling interests 2,415 2,500 (85) -3.4%Shareholders' equity 1,059,855 1,156,043 (96,188) -8.3%Net financial debt 98,519 (126,376) 224,895 n.a.Total funding 1,158,374 1,029,667 128,707 12.5%(Thousands of euros)ChangeENAV Group - Consolidated Interim Financial Report as at 30 June 2020 22

€1 million, accounted for by the adjustment to fair value of the investment in Aireon and by changes in

the dollar/euro exchange rate.

Net working capital amounted to a negative €36.7 million, a decrease of €57.5 million on 31 December

2019. The main changes regarded: i) a net decrease of €43.8 million in trade receivables associated with

the decrease of €45.5 million in the receivable from Eurocontrol as a result of the decrease in turnover as

from March 2020 owing to the health emergency; an increase in the grant to guarantee the safety of plant

and operational safety accruing at 30 June 2020 in the amount of €15 million; a decrease of €6.4 million

in payables for balance owing to the reversal to profit or loss of the share pertaining to the first half of

2020 and incorporated in charges for the same period; ii) a decrease of €9.4 million in trade payables, the

net effect of greater payments in the period than in new payables accruing and an increase in payables

for balance as a result of the reclassification of the non-current payable for balance; iii) the change in

other current assets and liabilities, which resulted in a net increase in liabilities of €23.7 million as a result

of a decline of €8 million in tax receivables due to the collection of the VAT receivable for which

reimbursement had been requested; an increase of €14.1 million in prepaid expenses attributable to the

14th-month salary instalments paid in June but pertaining to the following months; an increase of €20.5

million in tax and contribution liabilities connected with an increase in social security contributions and

personal income tax accrued on the 14th-month salary payment to personnel in June as well as personnel

provisions for contributions accruing the period and an increase in other liabilities attributable to greater

liabilities in respect of the Italian Air Force and ENAC in the net amount of €8.8 million, corresponding to

the accrued portion of collections of en-route and terminal receivables in the period due to them, net of

a payment of €10.8 million.

In determiningnet capital employed, the employee benefit provisions had a negative impact of €50.5

million, with the decrease in the period of €1.9 million reflecting severance payments to personnel at 30

June 2020, provisions for risks and charges amounting to €1.8 million and net deferred tax assets of a

positive €10.7 million.

Shareholders' equitytotalled €1,059.9 million, a net decrease of €96.2 million on 31 December 2019. The

change mainly reflects the payment of €113.2 million in dividends, the negative impact of which was partly

offset by the recognition of the amount accrued for the period of the reserve for the long-term incentive

plan for Group management and net profit of €15.7 million.

Net financial debtwas €98.5 million, a deterioration of €224.9 million on 31 December 2019, when the

item was a positive €126.4 million.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 23

The deterioration of €224.9 million in the net financial position reflected developments in collections and

payments connected with ordinary operations, which generated a negative cash flow, due mainly to the

reduction in receipts from our core business, primarily in the second quarter of the year, as a result of the

sharp contraction in air traffic control operations and the deferral granted to airlines of the collection of

receivable for flights in the months from February to May 2020, which will be settled with payments

beginning as from November 2020 and every three months thereafter. Other factors included the

payment of dividends in the amount of €112.7 million and the payment to the Italian Air Force of collected

terminal receivables pertaining to that institution in the amount of €10.8 million, partly offset by the

collection of €8 million in respect of the VAT receivable and projects financed at the European level and

the Infrastructure and Transport NOP.

Note that the Group has unused credit lines at 30 June 2020 worth €297.5 million euros a long-term line

of credit of €70 million that was drawn down in August 2020.

30.06.2020 31.12.2019Cash and cash equivalents 218,255 449,268 (231,013) -51.4%Current financial receivables 25,028 24,977 51 0.2%Current financial debt (16,856) (15,058) (1,798) 11.9%Current financial debt for IFRS 16 lease liabilities (2,176) (2,112) (64) n.a.Net current financial position 224,251 457,075 (232,824) -50.9%Non-current financial receivables 151 85 66 77.6%Non-current financial debt (316,896) (323,713) 6,817 -2.1%Non-current financial debt for IFRS 16 lease liabilities (6,025) (7,071) 1,046 n.a.Non-current financial debt (322,770) (330,699) 7,929 -2.4%Net financial debt (98,519) 126,376 (224,895) n.a.(Thousands of euros)ChangeENAV Group - Consolidated Interim Financial Report as at 30 June 2020 24

Consolidated cash flows

Cash flows from operating activities absorbed liquidity in the amount of €70.2 million in the first half of

2020, a negative change of €177.1 million compared with the corresponding period of the previous year.

This flow, which was fully affected by the impact of the COVID-19 pandemic, was generated by the

following factors: i) an increase in non-current trade receivables due to the recognition of balances for

the period, partially offset by a decrease in current trade receivables accrued in respect of Eurocontrol as

a result of the decline in air traffic, the overall change in which amounted to €150.9 million, compared

with €25.3 million in the first half of 2019; ii) a decrease of €8.9 million in tax receivables following the

collection - in the amount of €8 mllion - of the VAT receivable for which reimbursement had been

requested, compared with €7 million in the first half of 2019; iii) a €9.8 million increase in current and

non-current assets following the recognition of prepaid expense on the 14th-month salary payment for

employees pertaining to following periods, an effect that in the first half of 2019 was offset by amounts

received on projects funded at the European level and investment projects funded under the 2014-2020

NOP; iv) a decrease of €1.5 million in current and non-current liabilities, mainly due to a reduction

compared with the year-earlier period in en-route and terminal collections in the first half of 2020

pertaining to the Italian Air Force and ENAC; and v) a decrease of €17.5 million in current and non-current

trade payables, due both to a decline in payables for balances in the period and a reduction in payables

to suppliers as a result of an increase in payments made in the first half of 2020 compared with the

corresponding period of the previous year.

Cash flows from investing activities in the first half of 2020 absorbed liquidity in the amount of €42.2

million, up €10.1 million on the first half of 2019. The increase, with capital expenditure of €27.8 million,

down €7 million on the year-earlier period, was due to an increase in payments to suppliers for investment

projects for which activities and invoicing were concentrated in the final months of 2019.

1st Half 2020 1st Half 2019 ChangeCash flow generated/(absorbed) by operating activities (70,158) 106,956 (177,114)Cash flow generated/(absorbed) by investing activities (42,178) (32,055) (10,123)Cash flow generated/(absorbed) by financing activities (118,691) (106,590) (12,101)Cash flow for the year (231,027) (31,689) (199,338)Cash and cash equivalents at the beginning of the year 450,657 317,716 132,941Exchange rate differences on cash 10 20 (10)Cash and cash equivalents at end of the year 219,640 286,047 (66,407)Free cash flow (112,336) 74,901 (187,237)(Thousands of euros)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 25

Cash flows from financing activities in the first half of 2020 absorbed liquidity in the total amount of €118.7

million, an increase of €12.1 million on the first half of 2019. The rise was associated with the increase of

€4.7 million in dividends paid compared with the year-earlier period and the payment of share capital

with a share premium by UTM System & Services S.r.l. in D-Flight in the amount of €6.6 million in the first

half of 2019.

Free cash flow was a negative €112.3 million, compared with a positive €74.9 million in the same period

of 2019, reflecting the use of cash for operating and investment activities.

Human resourcesAt 30 June 2020 the ENAV Group workforce numbered 4,230 employees, an increase of 176 on the end

of the first half of 2019, mainly reflecting the inclusion in the Group of IDS AirNav on 18 July 2019. The

Group provides flight assistance services, operational system maintenance and AIM software solutions

throughout the national territory, and is engaged in aeronautical consulting activities in Malaysia.

In response to the COVID-19 pandemic, the ENAV Group has developed a contingency plan to ensure the

health of its operational personnel without impacting the continuity of service, creating alternating and

interchangeable shifts, which are managed in complete safety. For all administrative staff, the company

immediately activated flexible working arrangements and online communities to nurture the human

relationship between colleagues. During this period, ENAV took the opportunity to complete the use of

past and current holiday entitlement and at the same time to bring forward some of the mandatory

training envisaged for operational employees. Finally, a specific task force was set up to monitor the

progress of the health emergency and develop appropriate actions in the light of national and regional

anti-COVID-19 legislation.

With regard to health and safety issues in the workplace, including construction sites, the Group complies

with the provisions of the law and the measures issued by the competent authorities and entities (mainly

the Ministry of Health and the National Institute of Health), adopting appropriate risk mitigation measures

(e.g. the adoption of the "Protocol for regulatory measures to combat and contain the spread of the

COVID-19 virus in the workplace") that are also monitored by specifically formed company territorial

committees.

In general, all Group units are actively involved in monitoring the evolution of the COVID-19 emergency,

focusing on the actual effects and risks connected with the pandemic and activating all remedial actions

to preserve and guarantee the Group's operations.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 26

Other information2020 - 2024 performance plan

As regards the 2020-2024 reference period, the impact of the COVID-19 pandemic prompted EU

regulators in March 2020 to reassess the process of approving the performance plans of European service

providers (the "Plans"). In consideration of the events connected with the pandemic, the European

Commission opted to postpone approval of the Plans, considering the assigned performance targets and

economic plans presented to no longer be current, especially in light of actual and prospective traffic

levels.

In July, the European Commission therefore proposed an amendment to the text of the EU Regulation on

the performance and charging scheme (317/2019), including, among other things, a new timetable for

the definition of new cost-efficiency targets and the presentation of performance plans for the 2020-2024

reference period, as well as a different mechanism for measuring balance revenues for 2020-2021 for

European air navigation service providers. This new mechanism, which suspends the existing "traffic risk"

system, establishes that the revenues from balance shall be measured on the basis of the determined

costs for the supply of services. It also envisages that these costs shall be subject to specific efficiency

targets.

Currently the proposed regulatory text is still under discussion, and it is expected that official publication

of the cost performance targets will occur no earlier than May 2021. However, even in this context of

uncertainty, the Commission has sought to provide some initial indications about the level of cost

efficiency expected for the 2020-2021 period.

Based on the proposed regulations available at the end of the first half of the year, it is clear that the costs

for the supply of services must be lower than the final figures for the year prior to that in which COVID-

19 effects were felt.

Accordingly, given the new regulatory proposal, and taking account of the indications concerning the costefficiency

targets, the technical units of ENAV and ENAC have formed a technical working group to assess

the various technical aspects of the rules and identify a provisional level of costs in compliance with the

proposed legislation.

On the basis of the national regulator's indications regarding the expected level of cost efficiency for 2020,

ENAV has used the half-year data to measure balance revenues for the period on the basis of the agreed

target.

Subsequently, ENAC sent a letter to the Ministry of Infrastructure and Transport highlighting problems

with the European Commission's proposal and setting out an initial Italian proposal for the level of

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 27

financial performance for the year 2020. The Ministry subsequently sent a summary note to the European

Commissioner for Transport with the intention of achieving the positive and rapid assignment of

performance targets by the European Commission.

On the basis of the national regulator's indications regarding the expected level of cost efficiency for 2020,

ENAV adopted the position expressed by ENAC in determining the balance at 30 June 2020, setting the

revenues from en-route and terminal services in the period against the determined costs for the same

period in 2019, reduced to take account of an appropriate cost-efficiency target.

Purchase of treasury shares

The Shareholders' Meeting of 21 May 2020 authorised, subject to revocation of the unexecuted portion

of the previous authorisation pursuant to the resolution of the Shareholders' Meeting of 27 April 2018,

the Board of Directors to purchase and dispose of treasury shares of ENAV, in compliance with applicable

regulations and for a period of eighteen months from the date of the resolution, for the following

purposes: i) to implement the remuneration policies adopted by ENAV and specifically to satisfy the

obligations deriving from share option programmes or other grants of shares to employees or members

of the Company's administrative bodies and/or of companies directly or indirectly controlled by ENAV;

and ii) to support market liquidity in accordance with the market practices permitted pursuant to Article

180, paragraph 1, letter c) of the Consolidated Law on Financial Intermediation. A maximum of 1,200,000

shares may be purchased.

At 30 June 2020, ENAV held 1,200,000 treasury shares equal to 0.22% of share capital with a value of

€4,973 thousand, all of which were purchased in 2018.

Transactions with related parties

Related parties refer to entities directly or indirectly controlled by ENAV, the Ministry for the Economy

and Finance (MEF, the parent entity), subsidiary and associated entities controlled directly or indirectly

by the MEF and the Ministry with oversight responsibility, namely the Ministry of Infrastructure and

Transport (MIT). Other related parties are the directors and their immediate family, standing members of

the Board of Auditors and their immediate family, key management personnel and their immediate family

of the Parent Company and companies directly and/or indirectly controlled by it and the postemployment

benefit plan funds for Group employees.

Related-party transactions conducted by the ENAV Group in the first half of 2020 essentially involved

services that were provided as part of ordinary operations and settled on market terms and conditions,

as described in more detail in Note 33 of the interim condensed consolidated financial statements.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 28

In conformity with the provisions of Article 2391 bis of the Civil Code and in compliance with the principles

set out in the Regulation containing provisions governing related-party transactions adopted with Consob

resolution no. 17221 of 12 March 2010, as amended, the Parent Company established, with effect from

the date of the admission of the company's shares to trading on the Mercato Telematico Azionario

organised and operated by Borsa Italiana, a procedure governing related-party transactions approved by

the Board of Directors on 21 June 2016 and subsequently updated, the most recent version of which was

approved by the Board of Directors, having obtained the favourable opinion of the Control, Risks and

Related-Parties Committee, on 12 December 2018. The procedure is available on the ENAV website

www.enav.it in the Governance section in the company documents area.

During the first half of 2020, no transactions of greater importance as identified in Annex 1 of the relatedparty

transaction procedure were carried out. In addition, no transactions were subject to disclosure

obligations because they qualify as cases exempt under the procedure or transactions that had a

significant impact on the consolidated financial position or the consolidated results of the ENAV Group

for the period under review.

Risk managementThe ENAV Group has adopted an Enterprise Risk Management (ERM) process to identify, assess and

monitor Group-wide risks and to define and manage mitigation actions to contain the level of risk within

the propensity thresholds approved by the Board of Directors (risk appetite).

An analysis of the most significant risks for the Group is provided below, taking due consideration of the

impact of the coronavirus pandemic. For the analysis of purely financial risks, please see the explanatory

notes of the consolidated financial statements at 31 December 2019. Certain additional information on

liquidity risk is provided below.

At 30 June 2020, the ENAV Group held cash and cash equivalents of €218.3 million and financial

instruments of €25 million, as well as unused credit lines with a total value of €297.5 million. These

include: i) revocable uncommitted credit lines of €147.5 million that do not require compliance with

covenants or other contractual commitments, of which €25.5 million in the form of current account

overdrafts, €107 million of financial advances that can be used without any restrictions on use and €15

million in export finance; and ii) two committed credit lines obtained in May 2020 in the total amount of

€150 million, expiring in May 2022. At 30 June 2020, the Group had a long-term credit line of €70 million

with the European Investment Bank. That credit line was drawn in full on 12 August 2020.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 29

Safety

The prevention and containment of the risks associated with the provision of our core business activities

is a primary objective of the ENAV Group. The level of operational safety of air navigation services is an

indispensable priority for ENAV, which in pursuing its institutional objectives reconciles the

interdependencies of the various performance areas with achievement of pre-eminent safety objectives.

Safety performance is monitored through dedicated organisational arrangements and we have developed

and operate a specific Safety Management System, approved and validated by ENAC as part of its

surveillance of the certification of ENAV as an Air Navigation Service Provider.

ENAV also prepares its own safety policies and a plan for improvement of those policies (the Safety Plan),

which programmes the activities that it intends to carry out in order to achieve the specified safety

performance objectives and to improve safety as a whole.

Image & reputation

The creation of reputational value is a process implemented on an ongoing basis by the ENAV Group,

systematically managing communication and relations with stakeholders.

Corporate image and reputation are factors of success for organisations that have to interact with

customers, institutions, authorities, shareholders and other stakeholders in the conduct of their business.

This is especially true for companies like ENAV who are listed on regulated markets, as the community of

investors is highly sensitive to events that could jeopardise their reputation.

In view of the disclosure obligations incumbent upon the Group, the Parent Company takes specific steps

to safeguard its corporate image and reputation and constantly monitors image-relevant content in the

press, on the radio, television, the Internet and social media.

In general, image & reputation management arrangements comprise: i) compliance with regulations

governing financial disclosure (press releases, rules of engagement, equal access to information, the use

of regulated information services); and ii) contacts with the specialist press (economic/financial).

As far as crisis communication is concerned, the Group structure in charge of external communication

actively monitors the most critical events in order to rapidly and proactively manage external

communication effectively in the event of a crisis.

Business Continuity

The Group has developed specific business continuity plans, defining appropriate procedures to be

applied in the case of events that cause a significant deterioration or interruption of services, in order to

preserve continuity in various possible emergency scenarios. The availability of operational personnel is

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 30

ensured on a continuous basis, putting this staff through periodic training programmes in order to

maintain their required professional qualifications, while also guaranteeing the necessary availability of

technology systems with specific functional redundancies and an extensive maintenance plan for all

systems and equipment supporting air navigation services. The service level of systems is also supported

by specific investments designed to enhance the reliability, availability, safety and efficiency of systems

and equipment.

Information security

Information security is an essential element in the provision of air navigation services.

Information security is managed by a dedicated organisational structure, with the implementation and

maintenance of an Information Security Management System certified in accordance with the ISO/IEC

27001 standard.

The confidentiality, integrity and availability of operational and corporate information are constantly

monitored and guaranteed through a complex architecture of physical and logical security controls as well

as internal rules and procedures. Additional security is provided through coordination with the competent

civil and military authorities for the protection of operational data, in particular in the context of the

National Plan for Cyber Protection and IT Security, and collaborative initiatives with the Italy's CSIRT

(Computer Security Incident Response Team) and CNAIPIC (National IT Crime Centre for the Protection of

Critical Infrastructure).

Market abuse

The ENAV Group manages the risks associated with market abuse in order to prevent and manage the

possible dissemination of false or misleading information to manipulate the financial markets and to

prevent the use of inside information in order to take advantage of it (so-called internal dealing). The

Compliance Model comprises market abuse offenses, for whose prevention the Group has a centralised

organisational and procedural architecture, accompanied by training programmes for the corporate

bodies and top management as well as all other personnel in order to create the necessary culture and

sensitivity regarding inside information and compliance with applicable regulations.

Compliance

The Parent Company constantly monitors potential risks engendered by the evolution of applicable

legislation in order to ensure prompt compliance, in accordance with best practices and the relevant legal

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 31

and regulatory framework, taking care to constantly adjust governance and control responsibilities,

processes and organisational systems.

Compliance issues are controlled and addressed through the definition of policies and rules and, where

necessary, the provision of training sessions for staff.

The ENAV Group also pays great attention to environmental issues, both with a view to regulatory

compliance but also with the deployment of proactive actions aimed at limiting environmental impact in

all its forms.

With this in mind, work began on the development of the Group's Environmental Management System,

which is UNI EN ISO 14001 compliant. Its foundation is the environmental policy approved by the CEO.

The environmental policy guidelines include the consolidation of the benefits related to atmospheric CO

2emissions by carriers through the Flight Efficiency Plan (FEP), the adoption of green procurement

processes through the application of minimum environmental criteria in procurement policies, the

rational use of energy including moving towards renewable energy, and the dissemination of a culture of

environmental protection among our employees through staff awareness and training projects.

In addition, the Group has established a system of employer-designated environmental officers as well as

persons in charge of managing the hazardous waste cycle: they are called upon to implement any

improvement actions identified in the periodic checks of compliance with the provisions of Legislative

Decree 152/06.

Health & Safety

Among the Group companies, ENAV, Techno Sky and IDS AirNav have established Occupational Health

and Safety Management Systems certified in accordance with the OHSAS 18001 standard.

The governance of these management systems, together with centralised monitoring of the Group

Prevention and Protection Department, ensures ongoing compliance with applicable regulations.

Similarly, workplace health and safety training activities and the health surveillance of Group personnel

are managed centrally by the same unit.

Particular attention is also paid to measures to guarantee the safety of workers operating abroad in

countries at risk (so-called "travel security"). To this end, health and safety assessments of the workplace

are carried out for individual missions with the issue of specific recommendations, the definition of

contingency plans for missions in non-low risk countries, the organisation of training/information sessions

for workers and the planning of "emergency response" services.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 32

Institutional relations

Pursuing the ENAV Group's strategic objectives requires constant management of institutional relations,

representing corporate interests within the decision-making process in Italy's public institutions. To this

end, a proactive and reliable network of institutional relations has been developed with decision-makers,

channelling documentation and position papers on issues of strategic interest for the Group. Relations

with the Parliament, the Government, ministries and local public institutions are therefore constantly

managed.

Human capital

The adequacy of human capital represents a critical success factor both for the operation of the services

we deliver and the achievement of corporate objectives. It is preserved through specific models, processes

and staff development tools, which are also helpful for mapping training needs with a view to developing

skills.

The continuous improvement of technical knowledge, skills and capabilities is not just an aspect of

compliance with laws and regulations at operational level, which is periodically verified by external

regulators. It is also considered an opportunity for planning the overall growth of the Group, including

with regard to non-regulated activities and future technological and business challenges.

For the key corporate officers, appropriate succession tables have been established on the basis of

periodic internal evaluations designed to help identify high potential talent (using a variety of assessment

techniques), also with a view to ensuring that skills and company positions are aligned.

Outlook for operationsIn July and August 2020 there was a significant increase in traffic volumes, such that in mid-September

the decline compared with the corresponding period of 2019 was around 56.8%.

This development also involved Italy, where the figure for flights as at 15 September 2020 showed a

decrease of 60.6% compared with 2019. The contraction in traffic volumes has generally stabilised at

values ranging from -55% and -60%, presumably reflecting a state of general uncertainty about the

possible resurgence of the pandemic and a consequent tightening of the measures for containing its

spread.

As for the coming months, at the moment it remains difficult to predict how and when air traffic will

return to normal operations, but it is most likely that the final part of 2020 and the initial months of next

year will still be characterised by a reduction of 40% to 50% in traffic volumes compared with those

handled prior to COVID-19. Eurocontrol's publication on 14 September 2020 of an assessment of air traffic

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 33

conditions in Europe and the possible trend in the coming months confirms this forecast. Although the

data are at the overall European level, the analysis provides a useful guideline for understanding traffic

developments in Italy in the coming months. In particular, the monthly estimate points to decreases of

57% and 58% in October and November and 60% and 50% in January and February 2021 compared with

the same period of the previous year.

The next few months will therefore be especially important for ENAV and the Group companies, not only

due to the expected traffic volumes, but also the expected approval of the amendments to the EU

charging scheme.

In this context, Eurocontrol should provide traffic forecasts for each individual country by December 2020,

on the basis of which the member countries will be asked to submit their initial cost and traffic estimates

for the 2020-2024 reference period (the third reference period). These first estimates will provide the

European Commission with a foundation to define the financial performance targets, which will

presumably be announced in May 2021.

Pending the developments discussed above, the Group expects to continue containing costs in line with

the trend delineated in the interim report as at 30 June 2020.

During the second half of 2020, the deferral of the collection of en-route and terminal charges granted by

Eurocontrol to airlines will come to an end with a simultaneous improvement in cash flows, which are

showing signs of recovery. It will therefore be important to monitor developments in traffic, and the

related collections, in the coming months in order to assess whether outward cash flows are being

covered and/or the need to draw on part of the available credit lines.

Investment activities, which were partly suspended following the lockdown, underwent a review that

determined it was not currently necessary to reduce investments over the plan period, but only to defer

spending while retaining the five-year objectives of the business plan. Investment is therefore expected

to amount to around €80 million in 2020, compared with the €120 million initially envisaged.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 34

Interim Condensed Consolidated Financial Statementsat 30 June 2020ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 35Consolidated Financial StatementsENAV Group - Consolidated Interim Financial Report as at 30 June 2020 36Consolidated Interim Statement of Financial PositionASSETS(euros)Notes 30.06.2020of which relatedparties (Notes33) 31.12.2019of which relatedparties (Notes33)Non-current assetsProperty, plant and equipment7945,315,096 0 985,129,430 0Intangible assets8169,101,165 0 171,567,343 0Investments in other entities964,258,468 0 63,225,238 0Non-current financial assets1011,126,987 10,658,113 11,090,188 10,658,113Deferred tax assets1119,901,251 0 16,683,396 0Non-current tax receivables1224,858,353 0 24,858,353 0Non-current trade receivables13203,566,503 0 9,612,495 0Other non-current assets1515,738,213 15,738,213 16,343,893 16,343,893Total non-current assets 1,453,866,036 1,298,510,336Current assetsInventories1461,301,109 0 60,690,528 0Current trade receivables13169,560,112 50,529,340 213,321,419 42,798,524Current financial assets1025,027,878 0 24,976,671 0Tax receivables125,866,864 0 14,804,176 0Other current assets1558,545,289 31,005,410 48,114,091 32,977,328Cash and cash equivalents16218,255,012 1,073,873 449,268,346 534,846Total current assets 538,556,264 811,175,231Assets held for sale 171,438,952 1,443,517Total assets 1,993,861,252 2,111,129,084ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 37

SHAREHOLDERS' EQUITY AND LIABILITIES

(euros)Notes 30.06.2020of which relatedparties (Note 33) 31.12.2019of which relatedparties (Note 33)Shareholders' equityShare capital18541,744,385 0 541,744,385 0Reserves18480,334,383 0 473,373,561 0Retained earnings/(loss carryforward)1819,640,891 0 19,992,565 0Profit (loss) for the period1815,719,871 0 118,432,376 0Total shareholders' equity pertaining toshareholders of the Parent Company18 1,057,439,530 0 1,153,542,887 0Non-controlling interests and reserves 2,499,765 0 2,664,000 0Profit/(loss) pertaining to non-controlling interests (84,633) 0 (164,235) 0Total shareholders' equity pertaining to noncontrollinginterests2,415,132 0 2,499,765 0Total shareholders' equity 18 1,059,854,662 1,156,042,652Non-current liabilitiesProvisions for risks and charges191,236,200 0 991,200 0Severance pay and other employee benefits2050,551,084 0 52,509,423 0Deferred tax liabilities119,220,183 0 9,308,909 0Non-current financial liabilities21322,921,269 0 330,784,071 0Non-current trade payables2226,744,148 0 49,416,977 0Other non-current liabilities23170,315,708 0 176,549,910 0Total non-current liabilities 580,988,592 619,560,490Current liabilitiesShort-term portion of provisions for risks andcharges19580,200 0 786,823 0Current trade payables22129,364,431 5,888,455 138,754,198 18,303,236Tax and social security payables2456,459,443 0 35,945,970 0Current financial liabilities2119,032,455 0 17,169,674 -Other current liabilities23147,543,958 79,934,678 142,828,020 77,515,432Total current liabilities 352,980,487 335,484,685Liabilities directly associated with assets held fordisposal1737,511 41,257Total liabilities 934,006,590 955,086,432Total shareholders' equity and liabilities 1,993,861,252 2,111,129,084ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 38Consolidated Interim Income Statement(euros)Notes 1st Half 2020of which relatedparties (Note 33) 1st Half 2019of which relatedparties (Note 33)RevenuesRevenues from operations25164,481,857 4,970,184 429,244,259 6,210,566Balance25191,432,221 0 (29,813,659) 0Total revenues from contracts with customers25355,914,078 399,430,600Other operating income2620,941,539 17,351,850 22,562,682 17,985,782Total revenues 376,855,617 421,993,282CostsCosts for raw materials, supplies, consumables and goods27(3,245,170) 0 (3,720,516) (249,181)Costs for services27(56,315,826) (4,304,569) (60,038,533) (3,811,848)Personnel costs28(235,235,479) 0 (249,175,532) 0Costs leases and rentals27(1,074,824) (22,846) (975,744) (1,875)Other operating expenses27(1,837,479) 0 (1,328,931) 0Capitalisation of costs2913,239,090 0 12,979,525 0Total costs (284,469,688) (302,259,731)Depreciation and amortisation7 e 8(69,592,885) 0 (69,566,912) 0Writedowns/(writebacks) for impairment of receivables13(2,195,289) 0 (733,978) 0Writedowns/(writebacks) for impairment of property, plantand equipment and intangible assets70 0 0 0Provisions19(115,000) 0 138,277 0Operating income 20,482,755 49,570,938Financial income and expenseFinancial income301,030,320 0 1,273,875 0Financial expense30(3,479,846) 0 (3,900,078) (16,867)Exchange rate gains (losses)30(88,053) 0 16,710 0Total financial income and expense (2,537,579) (2,609,493)Income before taxes 17,945,176 46,961,445Income taxes31(2,309,938) (12,838,399)Profit (loss) for the period 15,635,238 34,123,046Pertaining to shareholders of the Parent Company 15,719,871 34,170,198Pertaining to non-controlling interests (84,633) (47,152)Basic earnings/(loss) per share380.03 0.06Diluted earnings/(loss) per share380.03 0.06ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 39Consolidated Interim Statement of Other Comprehensive Income(euros)Notes 1st Half 2020 1st Half 2019Profit (loss) for the period 18 15,635,238 34,123,046Other comprehensive income recyclable to profit/(loss):- Differences arising from the translation of foreign financial statements 18 (12,726) 340,277- Fair value of derivative financial instruments 10 and 18 84,028 (8,251)- Tax effect of the valuation at fair value of derivative financialinstruments11 and 18 (20,167) 1,980Total other comprehensive income recyclable to profit or loss51,135 334,006Other comprehensive income not recyclable to profit or loss:- Fair value measurement of investments in other entities 9 858,203 2,545,413- Actuarial gains/(losses) on employee benefits 18 and 20 47,842 (3,740,371)- Tax effect of actuarial gains/(losses) on employee benefits 11 and 18 (191,667) 363,152Other comprehensive income not recyclable to profit or loss714,378 (831,806)Comprehensive income 16,400,751 33,625,246Pertaining to shareholders of the Parent Company16,485,384 33,672,398Pertaining to non-controlling interests (84,633) (47,152)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 40Consolidated Interim Statement of Changes in Shareholders' EquityShare capital Legal reserve Sundry reservesReserve fromactuarialgains/(losses)for employeebenefitsCash flowhedgesTotal reservesRetainedearnings/(losscarryforward)Profit (loss) forthe periodTotalshareholders'equityNon-controllinginterestsTotalshareholders'equity(euros)Balance at 31 December 2018 541,744,385 26,663,066 443,029,212 (9,086,080) 1,957,176 462,563,374 18,860,841 114,390,115 1,137,558,715 0 1,137,558,715Adoption of new standards 0 0 0 0 0 0 (110,885) 0 (110,885) 0 (110,885)Balance at 1 January 2019 541,744,385 26,663,066 443,029,212 (9,086,080) 1,957,176 462,563,374 18,749,956 114,390,115 1,137,447,830 0 1,137,447,830Allocation of net profit from theprevious year0 5,146,738 0 0 0 5,146,738 109,243,377 (114,390,115) 0 0 0Dividend distribution 0 0 0 0 0 0 (108,000,768) 0 (108,000,768) 0 (108,000,768)Purchase of Treasury shares 0 0 0 0 0 0 0 0 0 0 0Currency translation difference reserve 0 0 340,277 0 0 340,277 0 0 340,277 0 340,277Long-Term Incentive Plan 0 0 529,541 0 0 529,541 0 0 529,541 0 529,541Disposal of interests to third parties 0 0 3,946,000 0 0 3,946,000 0 0 3,946,000 2,664,000 6,610,000Comprehensive income, of which:- Profit (loss) recognised directly inequity0 0 2,010,876 (2,842,682) (6,271) (838,077) 0 0 (838,077) 0 (838,077)- Profit (loss) for the year 0 0 0 0 0 0 0 34,170,198 34,170,198 (47,152) 34,123,046Balance at 30 June 2019 541,744,385 31,809,804 449,855,906 (11,928,762) 1,950,905 471,687,853 19,992,565 34,170,198 1,067,595,001 2,616,848 1,070,211,849Balance at 31 December 2019 541,744,385 31,809,804 450,743,646 (11,209,831) 2,029,942 473,373,561 19,992,565 118,432,376 1,153,542,887 2,499,765 1,156,042,652Allocation of net profit from theprevious year0 5,594,056 0 0 0 5,594,056 112,838,320 (118,432,376) 0 0 0Dividend distribution 0 0 0 0 0 0 (113,189,994) 0 (113,189,994) 0 (113,189,994)Purchase of Treasury shares 0 0 0 0 0 0 0 0 0 0 0Currency translation difference reserve 0 0 (12,726) 0 0 (12,726) 0 0 (12,726) 0 (12,726)Long-Term Incentive Plan 0 0 604,100 0 0 604,100 0 0 604,100 0 604,100Change in scope of consolidation 0 0 (2,847) 0 0 (2,847) 0 0 (2,847) 0 (2,847)Comprehensive income, of which:- Profit (loss) recognised directly inequity0 0 678,018 36,360 63,861 778,239 0 0 778,239 0 778,239- Profit (loss) for the year 0 0 0 0 0 0 0 15,719,871 15,719,871 (84,633) 15,635,238Balance at 30 June 2020 541,744,385 37,403,860 452,010,191 (11,173,471) 2,093,803 480,334,383 19,640,891 15,719,871 1,057,439,530 2,415,132 1,059,854,662ReservesENAV Group - Consolidated Interim Financial Report as at 30 June 2020 41Consolidated Interim Statement of Cash FlowsNotes 1st Half 2020of which relatedparties 1st Half 2019of whichrelatedpartiesA - CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (*) 16 450,657 317,716Net cash flow generated/(absorbed) from operating activitiesProfit (loss) for the period1815,635 0 34,123 0Depreciation and amortisation7 and 869,593 0 69,567 0Net change in liabilities for employee benefits20(1,910) 0 (1,629) 0Change resulting from exchange rate differences18(193) 0 (12) 0Loss on sale of property, plant and equipment and impairment loss of property,plant and equipment and intangible assets7 e 810 0 0 0Other income/charges on non-monetary flows7(2) 0 0 0Provision for stock grant plans28604 0 530 0Net provisions for risks and charges19115 0 (138) 0Net change in deferred tax assets and deferred tax liabilities11(3,518) 0 (222) 0Decrease/(increase) in inventories14(156) 0 15 0Decrease/(increase) in current and non-current trade receivables13(150,944) (7,730) (25,323) (7,966)Decrease/(increase) in tax receivables and tax and social security payables12 and 2429,451 0 31,831 0Change in other current assets and liabilities15 and 23(5,694) 4,392 25,496 18,278Change in other non-current assets and liabilities23(5,599) 606 (11,853) 5,762Increase/(decrease) in current and non-current trade payables22(17,550) 679 (15,429) 458B - TOTAL CASH FLOW FROM OPERATING ACTIVITIES (70,158) 106,956of which taxes paid(3,801) 0 (8,522) 0of which interest paid(601) 0 (85) 0Net cash flow generated/(absorbed) from investing activitiesInvestments in property, plant and equipment7(23,743) 0 (29,501) 0Investments in intangible assets8(4,041) 0 (5,268) 0Increase/(decrease) in trade payables for investments22(14,593) (13,094) 1,964 (11,486)Sales of property, plant and equipment70 0 0 0Decrease/(increase) in trade receivables for investments13750 0 750 0Investments in other shares90 0 0 0Increase/(decrease) in trade payables for equity investments9(551) 0 0 0Investments in financial assets100 0 0 0C - TOTAL CASH FLOW FROM INVESTING ACTIVITIES (42,178) (32,055)Net cash flow generated/(absorbed) from financing activitiesNew medium and long term loans210 0 0 0(Repayments) of medium and long term loans21(6,755) 0 (6,693) 0Net change in short-term financial liabilities21(982) 0 0 0Bond issue210 0 0 0Net change in short-term financial liabilities211,736 0 620 0(Increase)/Decrease in current financial assets100 0 (7) 0(Increase)/Decrease in non-current financial assets10(32) 0 793 0Purchase of Treasury shares180 0 0 0Change in Capital180 0 6,610 0Dividend distribution18(112,658) (60,024) (107,913) (57,670)D - TOTAL CASH FLOW FROM FINANCING ACTIVITIES (118,691) (106,590)E - Total cash flow (B+C+D) (231,027) (31,689)F - Exchange rate differences on cash1020G - CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (A+E+F) (**) 16 219,640 286,047(*) Cash and cash equivalents at the beginning of 2020 and at the end of the period include €1,389 thousand and €1,384 thousand, respectively, of the liquidity of SictaConsortium in liquidation, reclassified as part of assets held for sale.(thousands of euros)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 42Explanatory Notes to the Interim CondensedConsolidated Financial StatementsENAV Group - Consolidated Interim Financial Report as at 30 June 2020 43

1.General information

ENAV S.p.A. (hereinafter also the "Company" or "Parent Company") was established in 2001 following the

transformation with Law 665/1996 of the "Ente Pubblico Economico denominato Ente Nazionale di

Assistenza al Volo" (the National Agency for Flight Assistance), a public enterprise, that was formerly

known as the "'Azienda Autonoma di Assistenza al Volo per il Traffico Aereo Generale" (A.A.A.V.T.A.G.)

(Autonomous Company providing Flight Assistance for General Traffic) and has its registered office in

Rome, 716 via Salaria and other secondary offices and operating facilities located throughout Italy.

Since 26 July 2016, ENAV shares have been listed on the Mercato Telematico Azionario (MTA) organised

and operated by Borsa Italiana S.p.A. and, at 30 June 2020, 53.28% of the Company was owned by the

Ministry for the Economy and Finance (MEF) and 46.50% by institutional and individual shareholders, with

0.22% being held by ENAV itself as treasury shares.

The activity of the ENAV Group consists of the air traffic control and management services and other

essential services provided by the Parent Company for air navigation in Italian airspace skies and at the

national civil airports for which it is responsible, as well as the technical operation and maintenance of air

traffic control equipment and systems, the sale of aeronautical software solutions and commercial

development and aeronautical consulting activities. The measurement and presentation of operations is

broken down into four operating sectors, namelyair navigation services, maintenance services,AIM

software solutionsand a residual sector defined asother sectors.

These interim condensed consolidated financial statements regard the six months ending 30 June 2020

and have been prepared in euros, the legal tender in the economy in which the Group operates.

Publication of this Consolidated Interim Financial Report was authorised by the Board of Directors on 29

September 2020 and it has undergone a limited review by EY S.p.A.

2.Form and content of the interim condensed consolidated financial statements

The interim condensed consolidated financial statements at 30 June 2020 of ENAV S.p.A. and its

subsidiaries (hereinafter also the "Group") have been prepared in conformity with the International

Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) issued by the

International Accounting Standards Board (IASB) and the related interpretations (IFRIC and SIC), endorsed

by the European Union in accordance with the provisions of Regulation (EC) No. 1606/2002 as well as

Legislative Decree 38 of 28 February 2005, which governed the application of the IFRS under the scope of

Italian law, and published up to 29 September 2020, the date on which the Board of Directors of ENAV

S.p.A. approved the Interim Financial Report.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 44

In particular, these financial statements, which have been drafted on a going-concern basis, have been

prepared in compliance with IAS 34Interim Financial Reportingand Article 154-ter paragraph 3 of the

Consolidated Law on Financial Intermediation. In application of the option granted by IAS 34, the

disclosures contained in the interim condensed consolidated financial statements are less complete than

those provided in complete annual financial statements, as they are aimed at providing an update on the

activities, facts and circumstances that occurred in the reference period as well as some minimum

supplementary information expressly requested by the standard, thus omitting information, data and

notes already presented and discussed in the consolidated financial statements of the ENAV Group as at

31 December 2019. Accordingly, the interim condensed consolidated financial statements at 30 June 2020

should be read in conjunction with the consolidated financial statements of the Group for the year ended

31 December 2019, which readers are invited to consult for a more complete understanding of the

information reported in this document.

Note that the ENAV Group has designated the first half of the year as the interim reference period for the

purpose of applying IAS 34 and the definition of interim financial statements.

With regard to the method for presenting the financial statements, the distinction between current and

non-current assets and liabilities has been adopted for thestatement of financial position. Theincome

statementwas prepared by classifying operating costs by nature and thecash flow statementhas been

prepared using the indirect method.

In compliance with the provisions of Consob Resolution no. 15519 of 27 July 2006, the statement of

financial position, the income statement and the cash flow statement report the value of positions or

transactions with related parties in order to ensure an understanding of the financial position,

performance and cash flows.

3.Scope and basis of consolidation

The basis of consolidation adopted in preparing the interim condensed consolidated financial statements

at 30 June 2020 is consistent with that adopted in preparing the consolidated financial statements at 31

December 2019, approved on 12 March 2020 and available at www.enav.it in the section

https://www.enav.it/sites/public/en/InvestorRelations/Financial-Statements-and-Reports.html.

In the first half of 2020 the scope of consolidation changed compared with 31 December 2019 due to the

consolidation as from 2 January 2020 of ENAV España Control Aereo S.L.U., a non-operational company,

following the acquisition of 100% of that company's share capital by the Parent Company in order to

participate in a tender launched by the Spanish airport operator.

With regard to the income statement, note that the balance for the first half of 2019 do not contain the

figures for IDS AirNav, which entered the scope of consolidation with effect from 18 July 2019.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 45

There were no significant transactions or unusual events in the first half of 2020.

Translation of financial statements of foreign companies

The interim statements of financial position and income statements of subsidiaries are prepared using the

currency of the primary economic environment in which they operate. For the purpose of the interim

condensed consolidated financial statements, the statement of financial position and income statement

of each foreign company are translated into euros, which is the Group's functional currency. The exchange

rates used to translate the statements of financial position and income statements of companies that use

a functional currency other than the euro are shown in the table below:

4.New accounting standards and interpretations

The accounting standards adopted in the preparation of the interim condensed consolidated financial

statements at 30 June 2020 are consistent with those used for the preparation of the consolidated

financial statements at 31 December 2019, which readers are invited to consult for a more extensive

discussion, with the exception of the adoption of new standards, amendments and interpretations in force

as from 1 January 2020. The Group has not opted for early adoption of any new standard, amendment or

interpretation issued but not yet in force.

New accounting standards, interpretations and amendments taking effect as from 1 January 2020 that

did not have an impact on the Group's interim condensed consolidated financial statements

The following is a list of the new accounting standards, amendments and interpretations applicable to the

Group as from 1 January 2020 with no impact on the Group's interim condensed consolidated financial

statements:

✓Amendment to references to the conceptual framework in IFRS standards- issued on 29 March 2018

and endorsed on 29 November 2019. The new IFRS conceptual framework replaces the framework

issued in 1989, already partly revised in 2010. This update does not amend existing standards and

interpretations, but rather introduces cross-cutting definitions to various standards, guidance and

parameters with regard to the concepts of measurement, presentation and disclosure and

6-month

average

at 30 June

12-month

average

at 31

December

6-month

average

at 30 June

Malaysian ringgit 4.6829 4.7989 4.6371 4.5953 4.6539 4.7082

US dollar 1.1015 1.1198 1.1196 1.1234 1.1298 1.1380

31.12.2019 1st Half 2020 1st Half 2019

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 46

derecognition. In addition, the amendment of the conceptual framework updated the definitions of

assets and liabilities and their recognition criteria and clarified the general criteria for the preparation

of financial statements for IFRS adopters, with special reference to the concepts of prudence,

stewardship, measurement uncertainty, and substance over form.

✓Amendment to IAS 1 and IAS 8: Definition of material -issued on 31 October 2018 and endorsed on

29 November 2019. The amendments to the standards introduce a new definition of materiality,

under which information is material if omitting, misstating or obscuring it could reasonably be

expected to influence the financial decisions that stakeholders take on the basis of that information.

The concept of materiality depends on both the nature and magnitude of the information.

✓Amendment to IFRS 3 Business combinations -issued on 22 October 2018 and endorsed on 21 April

2020. The amendments to the standard mainly regard the definition of business, in order to support

entities in identifying the demarcation line between business combination and acquisition of a group

of assets. More specifically, the amendments: a) clarify that a business must include at least an input

and a substantive process that together significantly contribute to the ability to create outputs; b)

remove the assessment of whether market participants are capable of replacing any missing inputs

or processes and continuing to produce outputs; c) add guidance and illustrative examples to help

entities assess whether a substantive process has been acquired; d) narrow the definitions of a

business and of outputs by focusing on goods and services provided to customers and by removing

the reference to an ability to reduce costs; e) add an optional concentration test that permits a

simplified assessment of whether an acquired set of activities and assets is not a business. The

amendments to IFRS 3 have been prompted by the commitment to achieve a desirable convergence

between FASB and IASB and to make financial disclosures prepared with the different reporting flows

comparable.

✓Amendment to IFRS 9, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform,issued on 26 September

2019 and endorsed on 15 January 2020. The amendments concern issues affecting financial reporting

in the periods preceding the replacement of an existing benchmark index with an alternative interest

rate. These amendments provide guidance about the highly probable and forward-looking

assessments required by IFRS 9 and IAS 39 for hedging relationships which are impacted by the

uncertainties of the IBOR reform. For the same reason, the amendments provide indications

concerning retrospective assessment in accordance with IAS 39. The exceptions described in the

amendments only apply to hedging relationships directly affected by the uncertainties of the IBOR

reform.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 47

New accounting standards, interpretations and amendments taking effect for periods after 31

December 2020 and not adopted early by the Group

The following is a list of new accounting standards, amendments and interpretations that will be applied

by the Group in annual accounting periods after that ending 31 December 2020:

✓Amendment to IFRS 16 Leases Covid-19-Related Rent Concessions,issued on 28 May 2020,

endorsement pending. The IASB issued amendment in order to simplify the accounting treatment of

the impacts associated with the COVID-19 emergency for lessees in the event of temporary reductions

in rental payments on leased assets. In particular, the amendment exempts lessees from considering

whether rent concessions obtained as a consequence of the COVID -19 pandemic represent a lease

modification or not, and therefore allows lessees to account for such concessions as if they do not

represent a modification of the lease. The amendments apply to rent concessions granted as a result

of the current global pandemic if the concessions result in a reduction in payments due on leases

before 30 June 2021.

The amendment will take effect, subject to endorsement, as from 1 June 2020.

✓Amendment to IFRS 3 Business Combinations, IAS 16 Property, Plant and Equipment; IAS 37 Provisions,

Contingent Liabilities and Contingent Assets as well as Annual Improvements,issued on 14 May 2020,

endorsement pending.This package of amendments represents an attempt to reformulate certain

concepts common to the various standards. More specifically:

▪ the amendments to IFRS 3Business Combinationsupdate a reference to the Conceptual

Framework for Financial Reporting without changing the accounting requirements for business

combinations;

▪ the amendments to IAS 16Property, plant and equipment, prohibit a company from deducting

from the cost of property, plant and equipment any amounts received from selling items

produced while the company is preparing the asset for its intended use. Instead, a company will

recognise such sales proceeds and related cost in profit or loss;

▪ the amendments to IAS 37Provisions, Contingent Liabilities and Contingent Assetsspecify which

costs a company includes when assessing whether a contract will be loss-making;

▪ theAnnual Improvementsmake minor amendments to IFRS 1 First-time Adoption of

International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and

the Illustrative Examples accompanying IFRS 16 Leases.

All of these amendments will take effect, subject to endorsement, as from 1 January 2022.

✓Amendment to IAS 1 - Presentation of Financial Statements - Clarification of Liabilities as Current or

Non-Current,issued on 23 January 2020. The amendments clarify the requirements for classifying

liabilities as current or non-current. More specifically:

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 48

▪ the conditions at the end of the reference period are those that should be used to determine if

there is a right to defer settlement of a liability;

▪ classification is unaffected by management's expectations concerning events after the reporting

date, for example, in the case of breach of an agreement or early settlement;

▪ it clarifies the circumstances that represent settlement of a liability.

The amendments will take effect, subject to endorsement, as from 1 January 2023.

✓Amendment to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest rate benchmark reform - Phase 2,

issued on 27 August 2020. The Board has issued a number of amendments that supplement those

issued in 2019, focussing on the effects of the interest rate benchmark reform on an entity's balance

sheet, which occurs when, for example, a benchmark interest rate used to calculate interest on a

financial asset is replaced with an alternative benchmark rate. The amendments for phase 2 address

issues that could affect financial reporting when changing the interest rate benchmark, including the

effects of changes in contractual cash flows or hedging relationships resulting from the replacement

of one rate with an alternative rate (replacement issue). In 2019, the Board published a number of

amendments as part of phase 1 of the project. The objectives of phase 2 are to assist entities in: i) the

application of IFRS when changes occur in contractual cash flows or hedging relationships due to the

interest rate reform; and ii) provide information helpful to the users of financial statements.

The amendment is expected to be endorsed in the last quarter of 2020. The changes will take effect,

subject to endorsement, as from 1 January 2021.

5.Use of estimates and management judgements connected with the COVID-19 pandemic

With regard to the description of the use of accounting estimates and management judgments, please

see the Annual Report at 31 December 2019, noting that they have been analysed in order to verify the

impacts associated with the COVID-19 pandemic, the results of which are reported below.

In compliance with the ESMA recommendations published in March, May and July 2020 and the Consob

warning notices no. 6/20 of 9 April 2020 and no. 8/20 of 16 July 2020 concerning the impact of the COVID-

10 emergency, the Interim Financial Report at 30 June 2020 provides an update of disclosures and the

impact on operations, the financial position and the performance of the Group as at 30 June 2020. As

regards the impact on the income statement, please see the discussion in the Interim Report on

Operations of the Group's performance and the section "The impact of COVID-19 on performance".

The areas of the financial statements that, based on the information available as at 30 June 2020 and

bearing in mind the constantly evolving scenario, are most affected by estimates and judgments are the

following:

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 49

▪measurement of non-current assets: the assessments concerning evidence of impairment and the

methods and assumptions used to estimate the recoverable value of these assets pursuant to IAS 36,

including sensitivity analyses, confirm the full recoverability at 30 June 2020 of the values of the cash

generating units (CGUs), which, accordingly, have not suffered a reduction in value due to COVID-19.

Please see note 8 for further details;

▪measurement of current assets: in order to take account of the effects of COVID-19 on the

impairment of trade receivables, the impairment model adopted by the Group has been specifically

updated based on the deterioration in the credit standing of a basket of representative companies in

the air transport sector. This prompted the recognition of certain writedowns identified on the basis

of the available information;

▪recognition of en-route and terminal balance for the period: following the COVID-19 pandemic and

the significant impact it has had on the air transport industry, the European Commission has proposed

the adoption of exceptional measures for the years 2020 and 2021 in the third reference period (RP3)

applying to EU service providers, with an impact on the charging scheme. The proposal, which is still

under discussion and could be amended, would suspend the traffic risk recovery mechanism,

establishing that revenues from balance would be measured on the basis of the determined costs for

the provision of services and subject to specific efficiency targets. Final approval of the RP3

performance plans has also been postponed to 2021, after the determination of the new costefficiency

targets. Although the charges for 2020 and 2021 were already presented in October 2019,

before the COVID-19 epidemic, in view of the indications provided by the European Commission it is

reasonable to presume that charges will be revised both on the basis of actual traffic volumes

compared with forecast levels and the cost targets to be set for the 2020-2021 reference period. More

specifically, 2020 and 2021 will be considered as a single period, for which an average determined

unit cost (DUC) will presumably be calculated based on the revised total determined costs and on new

traffic forecasts for 2020-2021. The treatment of 2020-2021 as a single period for regulatory purposes

also implies that the traffic balance generated in this period will be recovered in charges applied for

a period of 5 years starting in 2023, a period that can be extended up to 7 years at the request of the

individual national regulators.

The information necessary to definitively calculate the adjustment of balance is not yet available, as

it is still in the process of being determined under the guidance of the European Commission.

As part of its prerogatives, the national regulator, ENAC, has identified and notified the Ministry of

Infrastructure and Transport and the European Commission of the adoption of a mechanism for

determining balance based on actual costs for 2019, reduced by an appropriate percentage

representing the efficiency gains that can reasonably be required from service providers.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 50

At 30 June 2020, following an process of estimation that by its very nature and in the light of the above

considerations is subject to uncertainty, the directors decided to adopt the position expressed by

ENAC in determining the adjustment of balance at 30 June 2020 by setting revenues from en-route

and terminal services in the first half of 2020 against the determined costs for 2019, reduced to take

account of an appropriate cost-efficiency target. This balance will be settled over a period of five

years, starting from 2023, in accordance with the proposal of the European Commission. The

judgement exercised by management, although affected by significant uncertainty connected with

the circumstances discussed earlier that could produce changes in the amounts quantified, is based

on the most reliable information available to date to estimate the balance component at 30 June

2020.

6.Seasonal effects

The type of business in which the Parent Company operates is affected by seasonal effects. Trends in air

traffic are by nature not distributed linearly over the year. More specifically, passenger traffic fluctuates

significantly depending on the time of year, reflecting changes in tourist flows.

In particular, en-route and terminal revenues peak in the summer months. As a result the interim

performance of the Group does not contribute uniformly to performance and financial position for the

year as a whole.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 51

Explanatory notes to the interim consolidated statement of financial position7. Property, plant and equipment

The table below shows changes in property, plant and equipment at 30 June 2020 compared with the end

of 2019.

Property, plant and equipment in the first half of 2020 decreased by a net €39,814 thousand, reflecting:

▪ depreciation for the period of €63,077 thousand (€64,996 thousand at 30 June 2019), of which €1,085

thousand regarding rights of use (€1,148 thousand at 30 June 2019);

▪ an increase in property, plant and equipment of €46,512 thousand, of which €22,769 thousand

relating to investments that entered service during the period. This included: i) the construction of

the new technical and office facilities for the Genoa Airport; ii) the multilateration system for the

Bergamo Orio al Serio and Venice Tessera airports; iii) the technology upgrading of the operational

room and services LAN of the Padua Area Control Centre; iv) the upgrade of meteorological systems

at the Pantelleria, Bolzano and Rome Urbe airports to the ICAO 74 amendment; v) the implementation

of security via audio over IP at various remote sites; and vi) the modernisation of the ILS radio aid

system at the Brindisi airport. Increases of €23,743 thousand refer to progress on assets under

construction as part of investment projects, including: i) the 4-Flight programme, whose objective is

to develop the entire Air Traffic Management (ATM) technology platform of the ACCs based on SESAR

operational concepts and taking the Coflight system as a basic component; ii) the automation

programme for the operation of control towers towards full electronic management; and iii)

evolutionary maintenance of various systems.

(thousands of euros)Land andBuildingsPlants andmachineryInd. andcomm.equipment Other assetsAsset underconstruction TotalCost 544,223 1,952,605 318,585 318,098 198,106 3,331,617Accumulated depreciation (241,744) (1,539,583) (270,651) (294,510) 0 (2,346,488)Balance at 31.12.2019 302,479 413,022 47,934 23,588 198,106 985,129Increases 4,750 14,902 973 2,144 23,743 46,512Disposals - cost (40) 0 0 (634) 0 (674)Disposals - accumulated depreciation 40 0 0 624 0 664Reclassification (17) 0 0 11 (23,233) (23,239)Depreciation (10,338) (43,336) (5,683) (3,720) 0 (63,077)Total changes (5,605) (28,434) (4,710) (1,575) 510 (39,814)Cost 548,908 1,967,507 319,558 319,627 198,616 3,354,216Accumulated depreciation (252,034) (1,582,919) (276,334) (297,614) 0 (2,408,901)Balance at 30.06.2020 296,874 384,588 43,224 22,013 198,616 945,315ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 52

▪ the decrease in property, plant and equipment due to reclassifications totalling €23,239 thousand,

mainly regarding investment projects that were completed and entered service during the period,

with classification to a specific account, amounting to €22,769 thousand, as well as €454 thousand

for the reclassification of certain components of operating systems in inventories for replacement

parts.

Note that part of the investments, with a historical cost of €270.3 million, are financed by capital grants

disbursed under the National Operational Programme (NOP) for Transport for the years 2000-2006 and

2007-2013 for initiatives at southern airports, grants from the Ministry of Infrastructure and Transport

for investments in military airports, in accordance with Law 102/09 and projects financed at the European

level. The capital grants for these investments are accounted for as other liabilities and reversed to profit

or loss in line with the depreciation of the investments to which they refer. The amount attributable to

the period came to €4,364 thousand.

8. Intangible assets

Intangible assets at 30 June 2020 amounted to €169,101 thousand, a decrease of €2,466 thousand on the

end of 2019, as indicated in the following table:

The change in the period is mainly attributable to the following developments:

▪ amortisation for the period amounting to €6,516 thousand (€4,571 thousand at 30 June 2019). The

increase in amortisation in the first half of 2020 is mainly attributable to the purchase price allocation

process for the subsidiary IDS AirNav conducted in the second half of 2019, which allocated the excess

value in part to industrial patents and intellectual property rights as it regarded software solutions

(thousands of euros)Industrialpatent andintellectualproperty rightsOtherintangibleassetsAssets underdevelopment Goodwill TotalCost 171,023 11,085 44,649 93,472 320,229Accumulated amortisation (146,181) (2,481) 0 0 (148,662)Balance at 31.12.2019 24,842 8,604 44,649 93,472 171,567Increases 4,237 0 4,041 0 8,278Disposals 0 0 0 0 0Reclassifications 0 0 (4,228) 0 (4,228)Impairement losses 0 0 0 0 0Amortisation (6,084) (432) 0 0 (6,516)Total changes (1,847) (432) (187) 0 (2,466)Cost 175,260 11,085 44,462 93,472 324,279Accumulated amortisation (152,265) (2,913) 0 0 (155,178)Balance at 30.06.2020 22,995 8,172 44,462 93,472 169,101ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 53

(€8.6 million), and in part to other intangible assets comprising customer relationships and the order

backlog (€9 million), with the residual €26.9 million being attributed to goodwill;

▪ increases in intangible assets in the total amount of €8,278 thousand, of which €4,237 thousand

regard assets that came into service during the period, which mainly refer to multi-year licenses for

management and operating systems;

▪ the decreases in intangible assets regard investment projects that were completed and entered

service in the period, with classification to a specific account, amounting to €4,237 thousand net of

amounts reclassified in this item from property, plant and equipment.

With regard to goodwill, the verification of the recoverability of assets at 30 June 2020 in application of

the method envisaged by IAS 36Impairment of Assets, was performed in the presence of internal and/or

external indicators of impairment. In line with ESMA recommendations, management monitored

developments in the COVID-19 pandemic with regard to the main areas of interest to the Group, bearing

in mind that the forecasts concerning the future evolution of economic and financial conditions are

affected by a high degree of uncertainty.

More specifically, the item totals €93,472 thousand and includes €66,486 thousand in respect of the

positive difference between the acquisition value of the subsidiary Techno Sky S.r.l. and its net assets at

fair value and is representative of future economic benefits. This value is entirely allocated to the

Maintenance Services CGU, coinciding with the legal entity Techno Sky S.r.l.. It should be noted that,

except for goodwill, no other intangible assets with an indefinite useful life have been allocated to the

CGU in question. Management determined that the impact of the COVID-19 pandemic on the

performance and financial situation of the Techno Sky CGU was not highly significant and in any case

limited to the short term, also in consideration of the fact that the company provides technical operational

and maintenance services for air traffic control plant and systems - as also indicated in the disclosures on

operating segments reported in note 32 - that are essential for guaranteeing safety, punctuality and

operational continuity even if the volume of air traffic has decreased. Despite a reduction in revenues in

2020, performance indicators have improved compared with the initial forecast, given the concomitant

contraction in costs. Accordingly, taking account of this limited exposure to the crisis as well as the

significant gain (€111 million) that emerged in the impairment test performed at 31 December 2019, no

evidence of goodwill impairment was found in the first half of 2020.

The remainder of goodwill, equal to €26,986 thousand, reflects the positive difference between the

acquisition value of the subsidiary IDS AirNav S.r.l. and its net assets at fair value, and is representative of

future economic benefits. This value, which was determined during the purchase price allocation process,

is allocated entirely to the AIM Software Solutions CGU, coinciding with the legal entity IDS AirNav. In the

current macroeconomic climate, management has performed analyses to determine whether the impacts

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 54

of the COVID-19 emergency could represent evidence of impairment and subsequently subjected the CGU

to impairment testing. To date, the impacts found in terms of reduced inward cash flows are essentially

short-term in nature and are not considered to be structural, reflecting the low exposure of the CGU to

the effects of the crisis in the medium term, without jeopardising its ability to generate income in the long

term. Accordingly, even considering the adverse impacts on short-term cash flows, the long-term flows

considered for the purposes of determining terminal value remain unchanged, confirming the findings of

the impairment testing performed when preparing the 2019 Annual Financial Report. At the same time,

this aspect does not entail a significant increase in the weight of the terminal value in determining the

enterprise value (EV) compared with the value deriving from the cash flows of the plan (61% over 59% as

at 31 December 2019).

At 30 June 2020, that goodwill underwent impairment testing, carried out by comparing the recoverable

value of the CGU with the carrying amount of the net assets of that unit. It should be noted that, except

for goodwill, no other intangible assets with an indefinite useful life have been allocated to the CGU in

question. In determining recoverable value, reference was made to value in use. The discount rate used

is a WACC of 14.9% with a growth rate of operating cash flows in nominal terms, after the forecast for the

explicit period, equal to 0.7% (1.2% at 31 December 2019, consistent with the revised growth forecasts

for Italy. The discount rate was estimated using the Capital Asset Pricing Model (CAPM) approach. Despite

the COVID-19 pandemic, it did not increase significantly compared with 31 December 2019 (14.5%).

Management decided that the estimation of recoverable value would use the value in use estimated on

the basis of the cash flows drawn from the 2020-2024 financial plan prepared by the subsidiary and

already approved by IDS AirNav's management and the Parent Company on 18 February 2020 and used

in the estimation performed as at 31 December 2019, taking due account of the revised budget for 2020

approved in May 2020.

The test found that the recoverable value is greater than the carrying amount of the CGU and,

consequently, no impairment was recognised. The recoverable value for the purposes of the impairment

test showed headroom over the corresponding carrying amount of about €3 million (€5 million at 31

December 2019). During the period under review, the company acquired a number of contracts with

European and non-European customers.

For the purposes of the sensitivity analysis, an increase in the WACC of 0.5% was assumed while

maintaining the growth rate at 0.7%. Headroom was positive at €1.2 million. Assuming an increase in the

WACC of 0.5% and a zero growth rate, headroom would be a negative €0.3 million.

In the light of these assessments, it would appear that there are no potential issues concerning the

recoverability of the carrying amount of the IDS AirNav CGU.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 55

9. Investments in other entities

At 30 June 2020, investments in other entities amounted to €64,258 thousand, an increase of €1,033

thousand compared with 31 December 2019, associated entirely with the investment in Aireon LLC, which

is accounted for at fair value with no recycling to profit or loss, which reflects the adjustment of the

investment to fair value and translation at the period-end exchange rate. The carrying amount of the

investment is therefore equal to €64.1 million and the Group holds a stake of 9.1%, which will rise to

11.1% following execution of the redemption clause, which will not give rise to costs for the Company.

At 30 June 2020, the Parent Company updated the estimate of the fair value of the investment using the

following inputs: the Long Term Operating Plan ("LTOP") updated on the basis of the economic and

financial forecasts made available at the valuation date, which take account of the effects of the health

emergency, official stock market prices and historical and forecast economic-financial data for the sector

and the market price of government securities. Following the update of the inputs, the fair value of the

investment in Aireon LLC as at 30 June 2020 was equal to €64.1 million, corresponding to about $71.7

million, an increase of $0.9 million compared with 31 December 2019.

That fair value, calculated on the basis of an internal measurement process, is considered representative

of the value of Aireon in consideration of the transaction that took place in mid-2018 for the entry of NATS

as a shareholder of Aireon and the de-risking events that occurred subsequently, including the signing of

new contracts, completion of the satellite constellation and the progressive transition from the preoperational

phase to actual operations.

The valuation model used is based on the following assumptions: i) fair value, determined from an equityside

perspective, based on a model involving the discounting of the dividends drawn from the explicit

period of the plan. Subsequently, the terminal value of the investment was determined by assuming

sustainable cash flows at a long-term nominal average growth rate (g-rate); ii) the discount rate used is a

cost of capital (Ke) of 16.41%, calculated using the CAPM (Capital Asset Pricing Model) method. With a

non-active market, the inputs used are consistent with Level 3 of the fair value hierarchy.

In order to verify the robustness of the estimate, a sensitivity analysis was conducted for the Ke and the

growth rate g: maintaining a growth rate of 2% and assuming a Ke of 15.45%, the value of the investment

would increase by about $6 million. In order to reflect the potential impact of the pandemic on expected

cash flows, an additional risk of 1% was added to Ke, estimated on the basis of the difference in the credit

default spreads observed in the market between 2019 and 2020.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 56

10. Current and non-current financial assets

Current and non-current financial assets amounted to €25,028 thousand and €11,127 thousand,

respectively, an overall increase of €88 thousand on 31 December 2019. The item breaks down as follows:

Current financial assets increased by a net €51 thousand and regard two BTP government bonds

recognised at amortised cost, with a total nominal value of €25 million falling due on 15 October 2020

and 1 November 2020 respectively.

Non-current financial assets mainly regard the receivable due from the company from which the business

unit transferred to Techno Sky was acquired, which did not change during the first half of 2020.

11. Deferred tax assets and deferred tax liabilities

Deferred tax assets and deferred tax liabilities, as well as deferred tax assets offsettable, where permitted,

against deferred tax liabilities, are reported below, with amounts impacting profit and loss and those

impacting other comprehensive income (shareholders' equity) reported separately.

(thousands of euros)CurrentassetsNoncurrentassets TotalCurrentassetsNoncurrentassets TotalCurrentassetsNoncurrentassets TotalFinancial assets at amortised cost 24,999 10,658 35,657 24,967 10,658 35,625 32 0 32Other financial assets 0 318 318 0 347 347 0 (29) (29)Derivative financial instruments 29 151 180 10 85 95 19 66 85Total 25,028 11,127 36,155 24,977 11,090 36,067 51 37 8830.06.2020 31.12.2019 Change(thousands of euros)TemporarydifferencesDeferred Taxassets/liabilitiesTemporarydifferencesDeferred Taxassets/liabilitiesTemporarydifferencesDeferred Taxassets/liabilitiesTemporarydifferencesDeferred Taxassets/liabilitiesDeferred tax assetsTaxed provisions 27,020 6,484 1,529 367 0 0 28,549 6,851Write-down of inventories 9,905 2,377 (1,159) (278) 0 0 8,746 2,099Discounting of receivables 135 33 12,863 3,087 0 0 12,998 3,120TDaisxc eofufenctti nogf IoFfR sSe vceornavnecres ipoany 296 91 0 0 0 0 296 91provision 3,887 952 0 0 (48) (11) 3,839 941Non-deductible portion of severance p a y 186 45 0 0 0 0 186 45Fair value of derivatives 4 1 0 0 0 0 4 1Other 24,419 6,701 299 52 0 0 24,718 6,753Total 65,852 16,684 13,532 3,228 (48) (11) 79,336 19,901Deferred tax liabilitiesOther 5,755 1,382 749 180 0 0 6,504 1,562Discounting on debts 885 213 (274) (66) 0 0 611 147Tax effect of IFRS conversion 2,316 687 (130) (42) 0 0 2,186 645Fair value of investment 8,560 1,797 0 0 858 181 9,418 1,978Fair value of derivatives 2,676 642 0 0 84 20 2,760 662PPA 0 4,587 0 (361) 0 0 - 4,226Total 20,192 9,308 345 (289) 942 201 21,479 9,22031.12.2019 30.06.2020Increase/decrease throughprofit or lossIncrease/decrease throughOCIENAV Group - Consolidated Interim Financial Report as at 30 June 2020 57

The change in the first half of 2020 in deferred tax assets and deferred tax liabilities, which have a balance

of €19,901 thousand and €9,220 thousand, respectively, is attributable to the following factors:

▪ the utilisation and recognition of new taxable risk provisions and the provision for doubtful accounts;

▪ the recognition of the deferred tax liabilities associated with the discounting of receivables and

payables for balance recognised in the first half of 2020 and the reversal of the deferred tax liabilities

for receivables and payables accruing in the period;

▪ the recognition of employee severance pay in accordance with the actuarial method, which produced

an actuarial gain recognised in other comprehensive income;

▪ the recognition of deferred tax liabilities on the fair value of the investment in Aireon, as reported in

Note 9;

▪ the reversal of deferred tax liabilities connected with the purchase price allocation of the subsidiary

IDS AirNav.

The Group has determined that it is reasonably certain that the deferred tax assets recognised on the

basis of future taxable income inferable in the business plan can be recovered.

12. Current and non-current tax receivables

Non-current tax receivables amounted to €24,858 thousand (unchanged on 31 December 2019) and refer

to the receivable for the excess IRES paid by the Group in 2007-2011 as a result of the non-deduction of

IRAP relating to personnel and similar costs.

Current tax receivables amounted to €5,867 thousand and include the receivables shown in the following

table.

The decrease of €8,937 thousand in tax receivables mainly regards the VAT receivable due from tax

authorities, which decreased by €8,840 thousand, mainly reflecting the collection of the VAT receivable

for which the subsidiary Techno Sky had requested reimbursement regarding the 2017 tax year, for a total

of €8 million.

(thousands of euros)30.06.2020 31.12.2019 Change

Receivables from tax authorities for VAT 5,574 14,414 (8,840)

IRAP receivable 0 58 (58)

Other current tax receivables 293 332 (39)

Total 5,867 14,804 (8,937)

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 58

13. Current and non-current trade receivables

Current trade receivables amounted to €169,560 thousand and non-current trade receivables amounted

to €203,566 thousand, changing during the period compared with the previous year as follows:

Receivables from Eurocontrol refers to the fees in respect of en-route and terminal revenues not yet

received as of 30 June 2020, the current portion of which amounted to €75,725 thousand (€106,877

thousand at 31 December 2019) and €31,627 thousand (€45,974 thousand at 31 December 2019),

respectively, gross of the provision for doubtful accounts, representing an overall decrease of €39,508

thousand, including the portion allocated to non-current trade receivables. The decline reflected a

decrease in turnover beginning in March 2020 due to the coronavirus health emergency, which caused

the volume of air traffic to fall steeply. As a result of the emergency and to assist the aeronautical sector,

all of the member countries of Eurocontrol agreed to defer payments from airlines for flights in the period

between February and May 2020. The arrears will be payable every three months as from November

2020. Under this deferral mechanism, the receivable for flights in May 2020 that will be collected in August

2021 has been classified under trade receivables falling due at more than twelve months.

Receivables from the Ministry for the Economy and Finance (MEF) of €4,924 thousand are entirely

accounted for by the en-route and terminal exemptions recognised in the first half of 2020. The receivable

at 31 December 2019 of €12,114 thousand was offset, after approval of the 2019 financial statements,

with the payable to the Italian Air Force for the collections in respect of the en-route charges of €77,515

thousand, which left a payable of €65,401 thousand due to the MEF recognised under other liabilities.

(thousands of euros)30.06.2020 31.12.2019 Change

Current trade receivables

Receivables from Eurocontrol 107,352 152,851 (45,499)

Receivables from the Ministry for the Economy and Finance 4,924 12,114 (7,190)

Receivables from the Ministry of Infrastructure and Transport 45,000 30,000 15,000

Receivables from others 34,038 31,526 2,512

Receivables for balance 9,720 16,098 (6,378)

201,034 242,589 (41,555)

Provision for doubtful accounts (31,474) (29,268) (2,206)

Total 169,560 213,321 (43,761)

Non-current trade receivables

Receivables from Eurocontrol 5,991 0 5,991

Receivables from customers 736 1,480 (744)

Receivables for balance 196,839 8,133 188,706

Total 203,566 9,613 193,953

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 59

Receivables from the Ministry of Infrastructure and Transport include the operating grant intended to

cover the costs incurred by the Parent Company to guarantee the safety of its plant and operational safety,

as provided for by Article 11-septiesof Law 248/05, in the amount of €30 million, increased by €15 million

in the first half of 2020 by the amount accruing for the period.

Receivables from others,classified under current assets, show a net increase of €2,512 thousand on 31

December 2019, mainly in respect of the receivable due from the Department of Civil Aviation of Malaysia

for services rendered and invoiced in the final months of the period. Receivables from customers classified

as non-current trade receivables decreased by €744 thousand owing to the reclassification under current

receivables of the third annual instalment of the receivable in respect of Alma Mater Studiorum

recognised following the disposal of the Academy building complex, which is to be paid in four annual

instalments of €750 thousand on 28 June each year. To guarantee the deferred payment, Alma Mater

Studiorum - University of Bologna granted a voluntary first mortgage of the same duration as the payment

extension on the properties involved in the sale in the amount of €3 million.

The provision for doubtful accounts amounted to €31,474 thousand with changes in the first half of 2020

breaking down as follows:

The increase in the year in the provision for doubtful accounts reflected both positions written off

following the bankruptcy of a number of European air carriers and the effects of the updating of the

valuation model used to assess the recoverability of receivables, which was revised following the COVID-

19 outbreak. The new model has been specifically updated based on the deterioration in the credit

standing of a basket of representative companies in the air transport sector. The decreases include €289

thousand in respect of collections on both en-route and terminal positions written down in previous years,

while the remainder regarded the write-off of positions that are no longer considered recoverable.

Receivables for balance, which pertain to the Parent Company in their entirety, amounted to €206,559

thousand net of discounting (€24,231 thousand at 31 December 2019), a net increase of €182,328

thousand attributable to the recognition of positive en-route and terminal balance at 30 June 2020 as a

result of the significant contraction in air traffic connected with the COVID-19 pandemic. This amount was

classified under non-current trade receivables in accordance with the new mechanism proposed by the

European Commission, which envisages its recovery in constant instalments as from 2023.

(thousands of euros)31.12.2019Increases reversals cancellations30.06.2020

Provision for doubtful accounts 29,268 2,511 (289) (16) 31,474

Decreases

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 60

14. Inventories

Inventories, which are mainly represented by spare parts, amounted to €61,301 thousand net of

provisions for doubtful accounts. Changes during the period break down as follows:

The increase of €2,084 thousand, net of the inventory loss provision, mainly reflects bonded inventory for

the purchase of spare parts for operating systems used for air navigation. Part of the increase, equal to

€454 thousand, was attributable to parts of systems classified to inventories from property, plant and

equipment. The decrease of €2,642 thousand, gross of the inventory loss provision, reflected the use of

spare parts in operating systems.

The provision for inventory losses decreased by €1,168 thousand due to the disposal of replacement parts

that had already been written down in previous years.

15. Other current and non-current assets

Other current assets amounted to €58,545 thousand and other non-current assets totalled €15,738

thousand. The item breaks down as follows:

Receivables from government entities for capital grants in the first half of 2019 decreased by €2,578

thousand compared with 31 December 2019, mainly due to the collection of grants under the

(thousands of euros)31.12.2019 Increases Decreases 30.06.2020

Bonded inventory 65,365 1,601 (2,291) 64,675

Direct inventory 5,233 491 (351) 5,373

70,598 2,092 (2,642) 70,048

Provision for inventory losses (9,907) (8) 1,168 (8,747)

Total 60,691 2,084 (1,474) 61,301

(thousands of euros)30.06.2020 31.12.2019 ChangeOther current receivablesReceivables from government entities for capital grants 31,005 32,977 (1,972)Receivables from personnel 3,374 3,544 (170)Receivables from various entities for projects funded 7,279 9,560 (2,281)Prepaid expenses 15,312 1,193 14,119Other receivables 4,881 4,173 70861,851 51,447 10,404Provision for doubtful accounts (3,306) (3,333) 27Total 58,545 48,114 10,431Other non-current receivablesReceivables from government entities for capital grants 15,738 16,344 (606)Total 15,738 16,344 (606)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 61

deconflicting tool project of the Brindisi Area Control Centre. In the first half of 2020, €643 thousand were

reclassified under current receivables in respect of the investment project to upgrade the meteorological

system, while the accrued interest component connected with the discounting of the receivable was

reversed to profit or loss.

Receivables from sundry entities for projects funded decreased by €2,281 thousand compared with 31

December 2019, mainly reflecting the collection of funds for various projects, including the first interim

payment for the Connecting Europe Facility (CEF) 2016 call, the accounts for which were reported in 2019.

Prepaid expenses increased by €14,119 thousand compared with 31 December 2019, reflecting the

recognition of personnel expenses accruing in subsequently months, mainly the 14th month salary

payment to employees in June, with the portion not pertaining to the period deferred, and fees paid to

financial institutions for new lines of credit.

16. Cash and cash equivalents

The following table provides a breakdown of cash and cash equivalents at 30 June 2020.

Cash and cash equivalents totalled €218,255 thousand, a net decrease of €231,013 thousand that mainly

reflected developments in receipts and payments connected with ordinary operations, which produced a

negative cash flow owing to the reduction in receipts from core business operations as a result of the

effects of the COVID-19 pandemic. The health emergency produced a sharp contraction in air traffic and

prompted the member countries of Eurocontrol to grant deferrals to air carriers for payments due for

flights in the period from February to May. Other factors included: i) the payment of dividends in the

amount of €112.7 million; ii) repayment of loans of €6.7 million; and iii) payment to the Italian Air Force

of its share of terminal receipts in the amount of €10.7 million. These developments were only partly

offset by the receipt of grants in respect of 2014-202 NOP projects and projects funded by the Connecting

Europe Facility 2016 call and other projects funded for a total of €3.4 million as well as the collection of

the VAT receivable in the amount of €8.2 million.

Cash and cash equivalents are not restricted by encumbrances limiting their availability.

(thousands of euros)30.06.2020 31.12.2019 Change

Bank and post office deposits 218,208 449,209 (231,001)

Cash and cash equivalents on hand 47 59 (12)

Total 218,255 449,268 (231,013)

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 62

17. Assets held for sale and associated liabilities

Assets and liabilities held for sale only include the positions connected with the Sicta Consortium in

liquidation. As already noted in 2019, certain supervening circumstances have prevented completion of

the liquidation of the consortium, although they could be resolved in the course of this year. The balance

at 30 June 2020 is broadly unchanged on that reported in the consolidated financial statements at 31

December 2019.

18. Shareholders' equity

Shareholders' equity at 30 June 2020 amounted to €1,059,855 thousand and breaks down as follows.

On 21 May 2019, the Ordinary Shareholders' Meeting called, among other things, to approve the financial

statements at 31 December 2019 voted to distribute a total dividend of €0.2094 share to shareholders, in

line with the dividend policy announced to the market in the prospectus for the listing of the Parent

Company on the electronic stock market operated by Borsa Italiana on 26 July 2016, which is valid for

2016 and subsequent years until the end of the second reference period.

At 30 June 2020, share capital consisted of 541,744,385 ordinary shares with no par value.

Other reservesshowed an increase of €1,279 thousand in the first half of 2020, mainly in respect of the

fair value adjustment of the investment in other Aireon companies net of deferred taxes (€678 thousand)

and the amount for the period of the reserve for the long-term incentive plan for Group management

(€604 thousand).

(thousands of euros)30.06.2020 31.12.2019 ChangeShare capital 541,744 541,744 0Legal reserve 37,404 31,810 5,594Other reserves 450,693 449,414 1,279Translation reserve 7,017 7,030 (13)IAS FTA reserve (727) (727) 0Reserve for actuarial gains/(losses) for employee benefits (11,173) (11,210) 37Cash flow hedge reserve 2,094 2,030 64Reserve for treasury shares (4,973) (4,973) 0Retained earnings/(loss carryforward) 19,641 19,993 (352)TPorotafilts(hloarsesh)ofoldrethrse'yeeqaurity pertaining to shareholders of the Parent15,720 118,432 (102,712)Company 1,057,440 1,153,543 (96,103)Share capital and reserves pertaining to non-controlling interests 2,500 2,664 (164)Profit/(loss) pertaining to non-controlling interests (85) (164) 79Total shareholders' equity pertaining to non-controlling interests 2,415 2,500 (85)Total shareholders' equity 1,059,855 1,156,043 (96,188)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 63

Retained earnings/(loss carryforward)reflects results for previous years of the companies included in the

scope of consolidation and adjustments made at the consolidated level. The change for the period reflects

the distribution of the dividend in the amount drawn from retained earnings.

19. Provisions for risks and charges

Provisions for risks and charges amounted to €1,816 thousand, of which the portion classified in current

liabilities totalled €508 thousand, and changed as follows during the period:

Provisions for disputes with personnel, the short-term portion of which amounted to €530 thousand,

increased by €115 thousand in the period, reflecting an update of the estimated value of liabilities

identified as probable. At 30 June 2020, the total value of legal claims relating to outstanding disputes for

which Group legal counsel have deemed the risk of a loss to bepossiblewas €0.4 million.

Provisions for other pending litigation, classified entirely under short-term liabilities, decreased following

the settlement of a dispute with a supplier. At 30 June 2020, the estimated charges related to outstanding

disputes for which Group legal counsel have deemed the risk of a loss to bepossibleis about €1.7 million.

20. Severance pay and other employee benefits

The provision for severance pay and other employee benefits amounted to €50,551 thousand, and is

composed of the severance pay provision governed by Article 2120 of the Civil Code, which reports the

estimated liability determined using actuarial techniques in respect of amounts payable to ENAV Group

employees at the end of their employment relationship.

Developments in the liability for severance pay and other employee benefits during the period break

down as follows:

(thousands of euros)31.12.2019 IncreasesTo profit orloss Uses 30.06.2020Provisions for disputes with personnel 768 115 0 0 883Provisions for other pending litigation 127 0 0 (77) 50Other risk provisions 883 0 0 0 883Total provisions for risks and charges 1,778 115 0 (77) 1,816(thousands of euros)30.06.2020 31.12.2019

Liabilities for employee benefits at the beginning of the year 52,509 52,280

Change in scope of consolidation 0 249

Interest cost 249 445

Actuarial (gains)/losses on defined benefits (48) 2,794

Advances, benefit payments and other variations (2,159) (3,259)

Liabilities for employee benefits at the end of the year 50,551 52,509

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 64

The interest cost component of the provision, equal to €249 thousand, was recognised under financial

expense. The utilisation of €2,159 thousand of the severance pay provision reflected benefits paid out to

personnel leaving the Group during the period and advances disbursed to personnel who so requested.

The difference between the expected value of provision at the end of observation period and the expected

present value of benefits payable in the future, recalculated at period end on the basis of the updated

assumptions, represents the actuarial gain (loss). At 30 June 2020 this calculation generated actuarial

gains of €48 thousand.

The main actuarial assumptions applied in the calculation of severance pay are summarised below:

The discount rate used to calculate the present value of the obligation was determined, consistent with

paragraph 83 of IAS 19, using the IBoxx Corporate AA Index with a duration of 10+ observed at the

measurement date and commensurate with the average length of future service of the personnel

involved. The inflation rate was calculated on the basis of current economic conditions, where the

majority of economic indicators have been particularly volatile, selecting a rate of 1.2%. The annual rate

of increase in severance pay is equal to 75% of inflation plus 1.5 percentage points, in compliance with

Article 2120 of the Italian Civil Code.

21. Current and non-current financial liabilities

Current and non-current financial liabilities include: i) payables to credit institutions for medium/longterm

loans with the short-term portion reported under current financial liabilities inclusive of interest

expense recognised on an accrual basis; ii) lease liabilities recognised following application of IFRS 16; and

(iii) the bond issued by the Parent Company on 4 August 2015, with interest expense accrued for the first

half of 2020 included under current liabilities.

The values at 30 June 2020 compared with those at 31 December 2019 and the associated changes are

shown below:

30.06.2020 31.12.2019

Discount rate 0.74% 0.77%

Inflation rate 1.20% 1.20%

Rate of annual increase in severance pay 2.40% 2.40%

Expected turnover rate 4.00% 4.00%

Expected rate of advances 2.50% 2.50%

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 65

The following table provides a breakdown of net financial debt at 30 June 2020 compared with 31

December 2019, in accordance with the requirements of the Consob Communication of 28 July 2006 and

in compliance with the provisions of the recommendation ESMA/2013/319 of 20 March 2013.

Bank loans at 30 June 2020 decreased by a net €6,741 thousand following the repayment of loans and the

effects associated with amortised cost measurement.

Specifically, repayments involved the following loans:

▪ the repayment of the half-year instalment of the loan from the EIB in the amount of €2,677 thousand,

with the final payment falling due on 12 December 2032;

▪ the repayment of an instalment of the loan from the EIB in the amount of €4,093 thousand, with the

final payment falling due on 19 December 2029.

The instalments of the above loans falling due in the first half of 2021 in line with the repayment plans

are recognised under current liabilities in the total amount of €13,715 thousand, which includes the effect

of amortised cost measurement.

At 30 June 2020, the Group had unused short-term credit lines totalling €297.5 million, including

committed lines of €150 million and uncommitted lines of €147.5 million.

(thousands of euros)current non-current Total currentnoncurrentTotal currentnoncurrentTotalBank loans 13,715 136,896 150,611 13,639 143,713 157,352 76 (6,817) (6,741)Lease liabilities under IFRS 16 2,176 6,025 8,201 2,113 7,071 9,184 63 (1,046) (983)Bond 3,141 180,000 183,141 1,418 180,000 181,418 1,723 0 1,723Total 19,032 322,921 341,953 17,170 330,784 347,954 1,862 (7,863) (6,001)30.06.2020 31.12.2019 Change(thousands of euros)30.06.2020of which withrelated parties 31.12.2019of which withrelated parties(A) Cash 218,255 1,074 449,268 535(B) Other cash equivalents 0 0 0 0(C) Trading securities 0 0 0 0(D) Liquidity (A)+(B)+(C) 218,255 1,074 449,268 535(E) Current financial receivables 24,999 0 24,967 0(F) Current financial debt 0 0 0 0(G) Current portion of non-current debt (16,856) 0 (15,057) 0(H) Other current financial debt (2,176) 0 (2,113) 0(I) Current financial debt (F)+(G)+(H) (19,032) 0 (17,170) 0(J) Net current financial debt/Liquidity (D)+(E)+(I) 224,222 1,074 457,065 535(K) Non-current bank loans (136,896) 0 (143,713) 0(L) Bonds issued (180,000) 0 (180,000) 0(M) Other non-current debt (6,025) 0 (7,071) 0(N) Non-current financial debt (K)+(L)+(M) (322,921) 0 (330,784) 0(O) CONSOB Net financial debt (J)+(N) (98,699) 1,074 126,281 535(P) Current and non-current derivatives 180 0 95 0(Q) Non-current financial receivables 0 0 0 0(R) ENAV Group net financial debt (O)+(P)+(Q) (98,519) 1,074 126,376 535ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 66

The average annual interest rate on bank loans in the reference period was 1.67%.

Lease liabilities under IFRS 16 include a total of €8,201 thousand in financial liabilities in respect of rights

of use recognised in application of the new standard and consistent with contractual due dates. During

the first half of 2020, that liability decreased by €983 thousand as a consequence of payments made.

On 4 August 2015, the Parent Company issued a bond with a nominal value of €180 million, which is listed

on the Luxembourg Stock Exchange's regulated market and has a maturity of seven years, with full

repayment at maturity (4 August 2022). The bond issue provides for the payment in arrears of an annual

fixed-rate coupon of 1.93% of the nominal value. The interest accrued for the period amounted to €1,723

thousand and was classified under current liabilities, bringing the entire liability for interest to €3,141

thousand.

In relation to the disclosure required under IFRS 7, the fair value of the bond, understood as the price that

would be paid to transfer a liability in an orderly transaction between market participants at the

measurement date of 30 June 2020, was estimated at €187.9 million.

22. Current and non-current trade payables

Trade payables amounted to €129,364 at 30 June 2020, a net decrease of €9,390 thousand on 31

December 2019, reflecting the changes in the items reported in the following table:

Payables to suppliersof goods and services necessary for the Group's operations decreased by €22,976

thousand compared with 31 December 2019, mainly reflecting a decline in payables associated with

operating contracts and investments in the period as well as payments made, mainly in the first quarter,

largely in respect of investment activities.

Payables for balanceamounted to €63,983 thousand, of which the part classified under current payables

came to €37,307 thousand and corresponds to the amount that will be charged to profit or loss in 2021

in accordance with developments in charges. The overall net decrease of €8,762 thousand in payables for

(thousands of euros)30.06.2020 31.12.2019 Change

Current trade payables

Payables to suppliers 83,748 106,724 (22,976)

Payables for advances received for projects with EU financing 8,309 8,527 (218)

Payables for balance 37,307 23,503 13,804

Total 129,364 138,754 (9,390)

Non-current trade payables

Payables to suppliers 68 175 (107)

Payables for balance 26,676 49,242 (22,566)

Total 26,744 49,417 (22,673)

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 67

balance at 30 June 2020 compared with 31 December 2019 is attributable to the increase in the amount

recognised in profit or loss in respect of the amount accruing for the period and in accordance with the

amount recognised in charges in 2020 in the amount of €11,162 thousand, compared with negative

balance recognised in the period and classified under non-current payables in the amount of €2,125

thousand.

23. Other current and non-current liabilities

Other current and non-current liabilities showed an overall net decrease of €1,518 thousand compared

with 31 December 2019, as a result of the changes in the items reported in the following table:

Payments on accountamounted to €24,679 thousand and include €18,491 thousand in respect of the

debt to the Italian Air Force (IAF) for the portion of accrued revenues received in the first half of 2020 for

en-route and terminal services and €6,188 thousand in respect of the debt to Italian Civil Aviation

Authority (ENAC) for accrued revenues concerning those services. The net decrease of €68,731 thousand

for the first half of 2020 reflects the following events: i) offsetting of Italian Air Force (IAF) payments on

account for en-route services registered at 31 December 2019 in the amount of €75,515 thousand against

the receivable due from the Ministry for the Economy and Finance (MEF) of €12,114 thousand, with the

associated liability to the MEF recognised in the amount of €65,401 thousand under other payables in

other current liabilities; ii) payment to the IAF of the receipts pertaining to it for the second half of 2019

for terminal services in an amount of €10,775 thousand; and iii) recognition of the amounts accrued in

the period pertaining to the IAF and ENAC for a total of €19,559 thousand.

Other payablesamounted to €115,919 thousand, a net increase of €73,632 thousand compared with 31

December 2019. This mainly reflected: i) the recognition of the payable to the MEF in the amount of

€65,401 thousand following the developments noted earlier; ii) the recognition of an increase in payables

to personnel, amounting to €36,702 thousand (€31,257 thousand at 31 December 2019), in respect of

provisions for the period less the liability for holiday entitlement accrued and not taken, which was used

to a greater extent than the amount accrued in the period by Group personnel; and iii) an increase of €1.8

million in liabilities in respect of supplementary pension schemes owing to the increase in the calculation

base, which includes the 14th month salary payment.

(thousands of euros)currentnoncurrentTotal currentnoncurrentTotal currentnoncurrentTotalPayments on account 24,679 0 24,679 93,410 0 93,410 (68,731) 0 (68,731)Other payables 114,892 1,027 115,919 41,260 1,027 42,287 73,632 0 73,632Deferred income 7,973 169,289 177,262 8,158 175,523 183,681 (185) (6,234) (6,419)Total 147,544 170,316 317,860 142,828 176,550 319,378 4,716 (6,234) (1,518)30.06.2020 31.12.2019 ChangeENAV Group - Consolidated Interim Financial Report as at 30 June 2020 68

Deferred incomemainly refers to deferred grants on investment projects financed under the NOP

Infrastructure and Networks for the period 2000-2006, 2007-2013 and 2014-2020 regarding specific

investments made in southern airports, capital grants for investments at military airports in accordance

with the provisions of Law 102/09, and other investment grants, mainly referring to European funding

obtained under TEN-T and the 2014, 2015 and 2016 calls of the CEF programme. The net decrease of

€6,419 thousand for the period mainly regards the reversal to profit or loss of the amount accruing for

the period connected with the amortisation of the investments to which the grants refer in the amount

of €4,364 thousand.

24. Tax and social security payables

Tax and social security payables amounted to €56,459 thousand and break down as shown in the following

table.

Tax payablesshowed a net increase of €9,423 thousand, mainly reflecting an increase in IRPEF

withholdings paid in July in respect of the payment of the 14th month salary payment in June to personnel.

Social security payablesrose by €11,090 thousand, attributable to the increase in charges connected with

the additional remuneration paid in June and the part connected with provisions for personnel recognised

on an accruals basis.

(thousands of euros)30.06.2020 31.12.2019 Change

Tax payables 26,838 17,415 9,423

Social security payables 29,621 18,531 11,090

Total 56,459 35,946 20,513

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 69

Explanatory notes to the interim consolidated income statement25. Revenues from contracts with customers

Revenues from contracts with customers, represented by revenues from operating activities and the

balance adjustment component, totalled €355,914 thousand, down €43,516 thousand compared with the

same period of the previous year, reflecting the effects of the health emergency connected with the

spread of the COVID-19 virus, which as from March led to a sharp contraction in en-route and terminal air

traffic and the closure of 29 airports operated by the Parent Company. As regards the impact on the

income statement, please see the discussion in the Interim Report on Operations of the Group's

performance and the section "The impact of COVID-19 on performance".

The following tables provide a breakdown of the individual items that make up the revenues from

contracts with customers in addition to a breakdown of those revenues by nature and type of activity in

accordance with the requirements of IFRS 15.

En-route revenues

En-route revenuesamounted to €110,024 thousand, a decrease of 64.5% on the same period of 2019,

reflecting a decrease in service units generated during the period as a result of the COVID-19 emergency,

which led to the closure of most air routes at the EU and extra-EU levels, with the contraction in units at

the end of the period amounting to 58.4% (+7.5% first half of 2019 over first half of 2018). This effect was

compounded by the 15.3%reduction in the en-route charge applied in 2020 (€66.02 in 2020 compared

with €77.96 in 2019). The reduction net of balance amounted to 7.4%.

Considering en-route revenues including the exempt flights component, which decreased by 25%

compared with the first half of 2019, and the adjustment component for balance, which includes the

portion recognised in the period and the portion recognised in previous years and included in charges in

2020 and, consequently, profit or loss for the same period, en-route revenues totalled €252,089 thousand,

a decrease of 12.9%, as shown below:

(thousands of euros)1st Half 2020 1st Half 2019 Change %En-route revenues 110,024 310,141 (200,117) -64.5%Terminal revenues 37,796 108,814 (71,018) -65.3%En-route and terminal exemptions 4,924 6,198 (1,274) -20.6%Revenues from non-regulated market 11,738 4,091 7,647 186.9%Total revenues from operations 164,482 429,244 (264,762) -61.7%Balance 191,432 (29,814) 221,246 n.a.Total revenues from contracts with customers 355,914 399,430 (43,516) -10.9%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 70

The en-route balance had a positive impact totalling €138,299 thousand, an increase of €164,193

thousand compared with the first half of 2019, mainly reflecting developments in the balance component,

which in accordance with the new rules proposed by the European Commission enable partial recovery

of the decrease in revenues caused by the spread of the COVID-19 pandemic with the coverage of

determined costs for 2019 reduced by an appropriate percentage representing the efficiency gains that

can reasonably be required from service providers. This balance was discounted over a period consistent

with the Commission's proposed regulation, which provides for their recovery in charges over five years

as from 2023, generating a negative impact on profit or loss of €9,413 thousand.

Terminal revenues

Commercialterminal revenuesamounted to €37,796 thousand, a decrease of 65.3% compared with the

same period of the previous year, due to the decrease in service units posted by the individual airports,

divided by charging zones, which came to 60.7% overall (+5.7% in the first half of 2019 over first half of

2018), and to the reduction in charges applied in all three charging zones.

In particular,Charging Zone 1, represented by Rome Fiumicino airport, posted a decrease in assisted air

traffic, expressed in service units, of 61.9% (+4.1% first half of 2019 over first half of 2018), with a

contraction of 89.3% in second quarter of 2020 alone compared with the same period of 2019. This factor

was compounded by a decrease of 12.25% in the terminal charge applied in 2020, which amounted to

€167.33 compared with €190.69 in 2019.

Charging Zone 2, represented by the airports of Milan Malpensa, Milan Linate, Venice Tessera and

Bergamo Orio al Serio registered a decrease in assisted air traffic, expressed in service units, of 57.4%

compared with the first half of 2019 (+6.3% first half of 2019 over first half of 2018), reflecting in part the

positive impact of air traffic in the first two months of the year (+3.3%), followed by the plunge in traffic

as from March as a result of the COVID-19 emergency, which even led to closure of the Milan Linate and

Bergamo Orio al Serio airports as from 13 March 2020. The terminal charge for 2020 is €167.56, a decrease

of 15.19% on that applied in 2019 (€197.56).

(thousands of euros)1st Half 2020 1st Half 2019 Change %En-route revenues 110,024 310,141 (200,117) -64.5%En-route exemptions 3,766 5,019 (1,253) -25.0%Subtotal en-route revenues 113,790 315,160 (201,370)-63.9%En-route balance for the period 147,429 (1,948) 149,377 n.a.Discounting of balance for the period (9,413) 32 (9,445) n.a.Use of en-route balance n-2 283 (23,978) 24,261 n.a.Subtotal balance 138,299 (25,894) 164,193n.a.Total revenues from en-route operations net of balance 252,089 289,266 (37,177) -12.9%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 71

Charging Zone 3, which comprises 40 medium- and low-traffic airports recorded a decrease in assisted air

traffic, expressed in service units, of 62.8% (+6.1% first half of 2019 over first half of 2018), with the growth

in the first two months of 2020 (+2.8%) followed by a steep decline in the subsequent months due to the

health emergency and the closure of a number of airports. The terminal charge in 2020 is €298.93, down

6.3% on the charge applied in 2019 (€318.98).

Considering terminal revenues including the exempt flights component, which decreased by 1.8% on the

corresponding period of the previous year in reflection of the reduction in charges and the adjustment

component for balance, which includes the portion recognised in the period and the portion recognised

in previous years and included in charges in 2020 and, consequently, profit or loss, terminal revenues

totalled €92,087 thousand, down 13.2% on the first half of 2019, as shown below:

Terminal balance amounted to a positive €53,133 thousand, an increase of €57,053 thousand on the first

half of 2019. This balance, recognised in accordance with the rules for en-route charges, enable the partial

recovery of the decrease in revenues for the first half of 2020. They include €9.6 million in respect of

Charging Zone 1, €12.4 million in respect of Charging Zone 2 and €31 million in respect of Charging Zone

3. The balances were discounted, as noted earlier, generating a negative impact on profit or loss of €3,383

thousand.

Revenues from the non-regulated marketamounted to €11,738 thousand, an increase of €7,647 thousand

on the same period of 2019, mainly reflecting €6,629 thousand in revenues generated by the subsidiary

IDS AirNav, which was included in the scope of consolidation in July 2019. These revenues were mainly

generated by services and maintenance of products sold to customers around the world, mainly outside

Europe, including work on the project for the new Ndola airport in Zambia, support services provided to

the Swedish service provider and German service provider as part of the ADQ (Aeronautical Data Quality)

project and the contract with CISCEA, the Brazilian service provider, for licences for the mapping tool and

associated maintenance. The remainder of revenues from the non-regulated market mainly regard radioaid

control services and aeronautical consulting activities in Italy and abroad and the revenues of the

subsidiary D-Flight for services supplied to operators of unmanned aerial vehicles (UAV) for annual

subscriptions and the electronic registration of drones.

(thousands of euros)1st Half 2020 1st Half 2019 Change %Terminal revenues 37,796 108,814 (71,018) -65.3%Terminal exemptions 1,158 1,179 (21) -1.8%Subtotal 38,954 109,993 (71,039)-64.6%Terminal balance for the period 52,984 (2,534) 55,518 n.a.Discounting of balance for the period (3,383) 42 (3,425) n.a.Use of terminal balance n-2 3,532 (1,428) 4,960 n.a.Subtotal 53,133 (3,920) 57,053n.a.Total revenues from terminal operations net of balance 92,087 106,073 (13,986) -13.2%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 72

The following table provides a breakdown of non-regulated market revenues by type of activity.

26. Other operating income

Other operating income amounted to €20,941 thousand, a decrease of 7.2% on the first half of 2019

(€22,563 thousand), mainly reflecting a decrease in revenue from European financing and a decline in

other revenues and income, which in the first half of 2019 included revenues from the sale of the parking

area of the Academy in Forlì to the City of Forlì. The balance of the item primarily regards: i) the portion

of capital grants recognised in profit or loss in an amount equal to the depreciation charges on the assets

to which the grant, equal to €4,364 thousand (€4,695 thousand in the first half of 2019); ii) operating

grants of €15 million in respect of the amount paid to the Parent Company under Article 11-septiesof Law

248/05 (pro-rated for the period) to offset the costs incurred to guarantee the safety of its plant and

operational safety; and iii) European funding for European projects in which the Group participates, which

in the period saw the closure of a number of projects.

The following table provides a breakdown of revenues for first half of 2020 and the same period of 2019

by geographical area.

27. Costs for goods, services, leases and rentals and other operating expenses

Costs for goods, services, leases and rentals and other operating expenses totalled €62,473 thousand, a

net decrease of 5.4% on the same period of the previous year, a reduction that rises to 10.9% if we exclude

the costs contributed by IDS AirNav, which were not present in the year-earlier period.

(thousands of euros)1st Half 2020 1st Half 2019 Change %

Revenues from non-regulated market

Sale of licences and provision of services 6,629 0 6,629 n.a.

Flight inspection 676 912 (236) -25.9%

Aeronautical consulting 1,813 1,265 548 43.3%

Technical and engineering services 1,571 1,168 403 34.5%

Services for unmanned aerial vehicles 319 0 319 n.a.

Training 2 283 (281) -99.3%

Other revenues 728 463 265 57.2%

Total revenues from non-regulated market 11,738 4,091 7,647 186.9%

Revenues 1st Half 2020% ofrevenues 1st Half 2019% ofrevenuesItaly 367,338 97.5% 418,955 99.3%EU 3,289 0.9% 857 0.2%Non-EU 6,228 1.7% 2,181 0.5%Total revenues 376,855 421,993(thousands of euros)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 73

Costs for the purchase of goodsdecreased by 12.8%, the net effect of a reduction in purchases of materials

for the restructuring and modernisation of airports domestically and abroad and an increase in costs

incurred for the purchase of personal protective equipment connected with the COVID-19 emergency.

Costs for servicesshowed a general decrease of €3,723 thousand in the period, reflecting in part the cost

containment actions taken to counter the impact of the reduction in air traffic. Contributing to the decline

were: i) a reduction of 21% in costs for telecommunications for data connections of the ENET1 network

as a result of the decommissioning of older circuits and the lower costs associated with the new contract

and in costs for utilities as a consequence of the decrease in electricity consumption across the entire

country connected with the closure of certain airports and the use of flexible working arrangements; ii) a

reduction of 30.7% in other personnel costs owing to the elimination of travel costs as from March as a

result of the COVID-19 emergency. These reductions were partially offset by higher costs for professional

services connected with foreign orders, primarily connected with the subsidiary IDS AirNav, and the

cleaning costs associated with extraordinary sanitation efforts at all sites since the beginning of the

coronavirus emergency.

Other operating expensesincreased by €508 thousand on the first half of 2019, mainly reflecting

donations to the Lazzaro Spallanzani National Institute for Infectious Diseases and the Civil Protection

Department in the fight against COVID-19 in the total amount of €300 thousand.

28. Personnel costs

Personnel costs amounted to €235,235 thousand, a net decrease of 5.6% on the first half of 2019. That

decrease would have amounted to 7.2% if we exclude the personnel costs of IDS AirNav, which were not

1st Half 2020 1st Half 2019 Change %Costs for the purchase of goods 3,245 3,720 (475) -12.8%Costs for services:Maintenance costs 8,834 9,367 (533) -5.7%Costs for Eurocontrol fees 19,158 19,055 103 0.5%Costs for utilities and telecommunications 12,105 15,319 (3,214) -21.0%Costs for insurance 1,588 1,281 307 24.0%Cleaning and security 2,577 2,294 283 12.3%Other personnel-related costs 3,294 4,753 (1,459) -30.7%Professional services 5,022 3,988 1,034 25.9%Other costs for services 3,738 3,982 (244) -6.1%Total costs for services 56,316 60,039 (3,723) -6.2%Costs for leases and rentals 1,075 976 99 10.1%Other operating expenses 1,837 1,329 508 38.2%Total costs for services 62,473 66,064 (3,591) -5.4%(thousands of euros)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 74

present in the year-earlier period as the company was included in the scope of consolidation as from 18

July 2019.

Fixed remuneration increased by 2.5% compared with the first half of 2019, of which 2% attributable to

the subsidiary IDS AirNav and the remainder to the higher costs associated with contractual increases at

the Parent Company in March and December 2019, to the increase in leave under Law 104/92 as provided

for in Decree Law 18/2020 (the "Cure Italy Decree") and the increase in the share of costs for parental

leave borne by INPS, which will be recovered in the following month through a decrease in payments of

social security contributions. The Group workforce increased by 176 in effective terms and 130 on average

compared with the corresponding period of the previous year, mainly reflecting IDS AirNav. The workforce

at the end of the first half of 2020 numbered 4,230 in effective terms and 4,235 on average for the period.

Variable remuneration decreased by a net 39.9% compared with the corresponding period of the previous

year, due to the actions taken in response to the health emergency, with: i) a decrease in overtime for air

traffic controllers, which was directly connected with the decline in air traffic, and in overtime for nonoperational

staff; and ii) greater use of holiday entitlement, with a positive effect on profit or loss as the

backlog of unused holiday time from previous years and the entitlement accruing in first half of 2020 was

almost entirely eliminated.

Social security contributions decreased by 5.9% as a consequence of the reduction in wages and salaries

due to the effects discussed previously and the recovery of costs for leave under Law 104/92 advanced

by the Parent Company. Other personnel costs amounted to €3,785 thousand, an increase of 18.1%

compared with the first half of 2019, reflecting an increase in termination incentives granted to outgoing

personnel in the period and an increase in premiums on insurance policies for employees.

The following table provides a breakdown of Group's workforce by professional category:

(thousands of euros)1st Half 2020 1st Half 2019 Change %Wages and salaries, of which:Fixed remuneration 143,467 139,934 3,533 2.5%Variable remuneration 21,489 35,764 (14,275) -39.9%Total wages and salaries 164,956 175,698 (10,742) -6.1%Social security contributions 55,051 58,486 (3,435) -5.9%Employee severance pay 11,443 11,785 (342) -2.9%Other costs 3,785 3,206 579 18.1%Total personnel costs 235,235 249,175 (13,940) -5.6%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 75

29. Capitalised costs

Capitalised costs amounted to €13,239 thousand (€12,979 thousand in the first half of 2019), an increase

of €260 thousand on the same period of 2019, reflecting an increase in the hours spent by personnel in

investment projects, which offset a substantial part of the decrease in internal work on investment

projects by the subsidiary Techno Sky.

30. Financial income and expense

Net financial expense totalled €2,538 thousand, reflecting financial income of €1,030 thousand, financial

expense of €3,480 thousand and foreign exchange losses of €88 thousand.

The following table provides a breakdown of financial income:

The decrease of 19.2% in financial income mainly reflects a decline in the impact of the discounting of

receivables and the lack of interest income on VAT receivables for which reimbursement was requested,

as the receivables were settled in the second half of 2019.

Financial expense amounted to €3,480 thousand, down 10.8% on the first half of 2019.

1st Half 2020 1st Half 2019 Change

Executives 56 53 3

Middle managers 417 405 12

Office staff 3,757 3,596 161

Workforce at period end 4,230 4,054 176

Average workforce 4,235 4,105 130

(thousands of euros)1st Half 2020 1st Half 2019 Change %Income from investments in other entities 417 417 0 0.0%Financial income from discounting of non-current receivables 46 148 (102) -68.9%Financial income from financial assets 87 86 1 1.2%Interest income on VAT receivable for which reimbursement wasrequested 0 112 (112) -100.0%Other interest income 480 511 (31) -6.1%Total financial income 1,030 1,274 (244) -19.2%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 76

The decrease in financial expense mainly reflects a reduction in costs for the discounting of balances and

the reduction in interest expense accrued on bank loans, as well as the decline in the interest cost on

benefits for Group employees.

31. Income taxes

Income taxes totalled €2,310 thousand, down €10,528 thousand on the first half of 2019. The decline

reflected a decrease in current taxes connected with the decline in taxable income and the positive effect

of deferred taxation associated with the recognition of deferred tax assets on the discounting of balance

recognised in the first half of 2020.

For more details on the recognition of deferred tax assets and liabilities, please see Note 11.

(thousands of euros)1st Half 2020 1st Half 2019 Change %Interest expense on bank loans 1,092 1,210 (118) -9.8%Interest expense on bonds 1,723 1,723 0 0.0%Interest expense on employee benefits 249 306 (57) -18.6%Interest expense on right-of-use assets 70 80 (10) -12.5%Financial expense on derivatives at fair value 0 10 (10) -100.0%Financial expense on discounting 342 569 (227) -39.9%Other interest expense 4 2 2 100.0%Total financial expense 3,480 3,900 (420) -10.8%(thousands of euros)1st Half 2020 1st Half 2019 Change %IRES (corporate income tax) 4,707 10,842 (6,135) -56.6%IRAP (regional business tax) 1,120 2,217 (1,097) -49.5%Total current taxes5,827 13,059 (7,232) -55.4%Deferred tax assets (3,228) (139) (3,089) n.a.Deferred tax liabilities (289) (82) (207) n.a.Total deferred tax assets and liabilities (3,517) (221) (3,296) n.a.Total current tax and deferred tax assets and liabilities 2,310 12,838 (10,528) -82.0%ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 77Other information32. Segment reporting

For management purposes, the ENAV Group is organised in strategic units identified on the basis of the

nature of the services provided and, in addition to the two operating segments long used for financial

reporting purposes, has a new operating segment created following the acquisition of IDS AirNav in July

2019.

The segments are described below:

▪Air navigation services:this operating segment coincides with ENAV, the Parent Company, whose

core business is providing air traffic control and management services and other essential air

navigation services in Italian airspace and at the national civil airports for which it is responsible,

ensuring the highest technical and system standards in flight safety and upgrading the technology

infrastructure of air navigation systems;

▪Maintenance services: this operating segment coincides with the subsidiary Techno Sky S.r.l., whose

core business is the technical management and maintenance of air traffic control equipment and

systems.Air infrastructure,like the country's other logistics infrastructure, requires constant

maintenance and continuous development to ensure safety, punctuality and operational continuity.

This is clearly stated in the European Union's Single European Sky regulations, which on the one hand

define the future structure of the air traffic management system and on the other set the

technological, qualitative, economic and environmental targets that all service providers must meet;

▪AIM software solutions: this operating segment coincides with the subsidiary IDS AirNav S.r.l.,

acquired in full by ENAV on 18 July 2019, whose core business is the development of software

solutions for aeronautical information management and air traffic management and the provision of

associated commercial and maintenance services, for a range of customers in Italy, Europe and

around the world.

The columnOther segmentsincludes the Group's remaining activities that are not categorised in the other

segments subject to monitoring.

No operating segment has been aggregated to create the operating segments subject to reporting

indicated below for the first half of 2020 and the first half of 2019.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 78

First half of 2020

First half of 2019

(thousands of euros)AirnavigationservicesMaintenanceservicesAIMsoftwaresolutionsOthersectorsConsolidationadjustments/reclassificationENAV GroupRevenues from third parties 366,915 1,373 6,730 1,837 0 376,855Intersegment revenues 1,725 44,583 867 0 (47,175) 0Total revenues 368,640 45,956 7,597 1,837 (47,175) 376,855Personnel costs (204,703) (26,451) (4,072) (9) 0 (235,235)Other net costs (83,508) (6,466) (3,784) (1,335) 45,860 (49,233)Total operating costs (288,211) (32,917) (7,856) (1,344) 45,860 (284,468)Depreciation and amortisation (68,859) (896) (183) (114) 459 (69,593)Writedowns and provisions (2,098) (160) (30) 0 (22) (2,310)EBIT 9,472 11,983 (472) 379 (878) 20,484Financial income and expense 10,864 (88) (70) (46) (13,198) (2,538)Income before taxes 20,336 11,895 (542) 333 (14,076) 17,946Income taxes 956 (3,462) 34 (79) 242 (2,309)Net profit (loss) for the period 21,292 8,433 (508) 254 (13,834) 15,637Total assets 2,014,167 119,440 18,228 71,769 (229,743) 1,993,861Total liabilities 962,234 90,698 13,944 4,923 (137,792) 934,007Net financial debt (109,751) 6,543 (3,338) 8,027 0 (98,519)(thousands of euros)Air navigationservicesMaintenanceservicesOther sectorsConsolidationadjustments/reclassificationENAV GroupRevenues from third parties 419,717 1,041 1,235 0 421,993Intersegment revenues 1,321 48,098 1 (49,420) 0Total revenues 421,038 49,139 1,236 (49,420) 421,993Personnel costs (216,886) (31,964) (9) 0 (248,859)Other net costs (91,873) (8,781) (915) 48,168 (53,401)Total operating costs (308,759) (40,745) (924) 48,168 (302,260)Depreciation and amortisation (70,062) (972) (57) 1,524 (69,567)Writedowns and provisions (899) 305 (2) 0 (596)EBIT 41,318 7,727 253 272 49,570Financial income and expense 8,245 (42) (45) (10,767) (2,609)Income before taxes 49,563 7,685 208 (10,495) 46,961Income taxes (10,358) (2,331) (70) (79) (12,838)Net profit (loss) for the year 39,205 5,354 138 (10,574) 34,123Total assets 2,035,827 114,900 69,358 (211,778) 2,008,307Total liabilities 966,639 89,414 4,169 (122,127) 938,095Net financial debt (44,306) (3,473) 9,237 0 (38,542)ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 79

33. Related parties

ENAV Group related parties were identified in accordance with the provisions of IAS 24Related-party

disclosuresand are involved in transactions carried out in the interest of the Group, are part of ordinary

operations and are settled on market terms and conditions unless otherwise indicated. On 12 December

2018, the Board of Directors of the Parent Company, having obtained a favourable opinion of the Control,

Risks and Related Parties Committee, approved the "Procedure governing related-party transactions"

carried out by the Parent Company directly and/or through its subsidiaries, in conformity with Article

2391-bis of the Civil Code and in compliance with the principles dictated by the "Regulation containing

provisions on related-party transactions" approved with Consob Resolution no. 17221 of 12 March 2010

as amended.

The procedure, which is available on the website www.enav.it, sets out the criteria for identifying related

parties, for distinguishing transactions of greater and lesser importance, for the procedural framework

applicable to such transactions, as well as any mandatory notifications to be submitted to the competent

bodies.

The following below report the balance of the income statement and statement of financial position

resulting from Group transactions with related entities outside the Group, including those with directors,

statutory auditors and key management personnel for the first half of 2020 and for 2019 for figures in the

statement of financial position and the first half of 2019 for figures in the income statement, respectively.

Tradereceivablesand othercurrent andnon-currentassetsCurrent andnon-currentfinancialassetsCash andcashequivalentsTradepayables andother currentliabilitiesRevenues andotheroperatingrevenuesCost ofgoods andservicesand otheroperatingcostsCosts forleases andrentalsExternal related partiesMinistry for the Economy and Finance 4,924 0 1,074 79,935 4,924 0 0Ministry of Infrastructure and Transport 91,743 0 0 0 17,301 0 0Enel Group 0 0 0 470 0 2,798 0Leonardo Group 605 10,658 0 5,358 46 1,162 0Other external related parties 0 0 0 61 51 345 23Balance in financial statements 243,844 36,155 218,255 276,908 376,855 61,398 1,075Related parties as % of balance infinancial statements39.9% 29.5% 0.5% 31.0% 5.9% 7.0% 2.1%(thousands of euros)1st Half 2020ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 80

The nature of the main transactions with external related entities, namely the Ministry for the Economy

and Finance (MEF) and the Ministry of Infrastructure and Transport (MIT) and the entities subject to the

control of the MEF is discussed below and described in the comments on the individual items of the

financial statements in the notes to the financial statements:

▪ transactions with the MEF involve receivables and revenue streams connected with the refund of

charges for services provided by the Parent Company for exempt flights and charged to the MEF in

accordance with European and Italian law, and payables for the amounts collected by the Parent

Company relating to the portion attributable to the Italian Air Force for en-route charges. Following

approval of the Parent Company's financial statements, this payable is used to offset the receivable

position. Cash and cash equivalents regard a bank account opened by the Parent Company with the

Bank of Italy;

▪ transactions with the MIT regard receivable and revenue relationships associated with both an

operating grant intended to cover the costs incurred by the Parent Company to ensure the safety of

systems and operations pursuant to Article 11-septiesof Law 248/05, and capital grants as part of the

Infrastructure and Networks NOP recognised previously following the resolution of the managing

authority of the Networks and Mobility NOP and since 2018 on the basis of agreements with the MIT

registered with the Court of Auditors. Those grants are charged to profit or loss in an amount

commensurate with the amortisation of the investments to which they refer;

▪ transactions with the Leonardo Group mainly regard activities connected with Parent Company

investments, maintenance and the acquisition of spare parts for systems and equipment for air traffic

control and the financial receivable of the subsidiary Techno Sky in respect of Vitrociset;

▪ transactions with the Enel Group regard agreements for the supply of electricity for a number of sites;

▪ transactions with other related parties contain residual positions.

Tradereceivablesand othercurrent andnon-currentassetsCurrent andnon-currentfinancialassetsCash andcashequivalentsTradepayables andother currentliabilitiesRevenues andotheroperatingrevenuesCost ofgoods andservicesand otheroperatingcostsCosts forleases andrentalsExternal related partiesMinistry for the Economy and Finance 12,114 0 535 77,515 6,198 0 0Ministry of Infrastructure and Transport 79,459 0 0 0 17,903 0 0Enel Group 0 0 0 597 0 2,473 0Leonardo Group 684 10,658 0 17,644 60 1,386 0Other external related parties 0 0 0 63 35 202 2Balance in financial statements 277,779 36,067 449,268 281,582 448,074 64,460 1,000Related parties as % of balance infinancial statements33.2% 29.6% 0.1% 34.0% 5.0% 6.0% 0.0%(thousands of euros)Balance at 31.12.2019 1st Half 2019ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 81

Key management personnel comprise the ENAV CEO and four executives holding senior positions in the

Group, namely the Chief Financial Officer, the Chief Human Resources and Corporate Services Officer, the

Chief Operating Officer and the Chief Technology Officer.

The remuneration of the Group's key management personnel, gross of pension and social security costs

and contributions, is reported in the following table:

The Group remuneration of the Board of Auditors amounted to €119 thousand (€92 thousand in the first

half of 2019).

The Parent Company and Techno Sky participate in the Prevaer Pension Fund, which is the national

supplementary pension fund for non-executive personnel working in the air transport and similar sectors.

As provided for in Article 14 of the articles of association of the Prevaer Fund, whose corporate bodies are

the delegated shareholders' meeting, the board of directors, the chairman and the vice chairman and the

board of auditors, shareholder representation is based on the equal participation of workers'

representatives and representatives of the participating businesses. The Fund's board of directors

resolves, among other things, on the general criteria for risk sharing in investments as well as on

investment policies, the selection of asset managers and the designation of the custodian bank.

34. Disclosures on the long-term incentive plan

On 28 April 2017, the ENAV S.p.A. Shareholders' Meeting approved the "Long-term share-based incentive

plan for the management of ENAV and subsidiaries" and on 11 December 2017 the Rules of the Plan,

which governs the operation of the Plan, were approved, marking the start of the Plan's first cycle. The

start of the second cycle for 2018-2020 was approved by the Board of Directors on 13 November 2018.

The start of the third cycle for the 2019-2021 period was approved by the Board of Directors on 15 May

2019.

The beneficiaries of the Plan are the CEO, key management personnel and a number of other managers

selected from among those who hold positions with the greatest impact on the performance of the

company or have strategic importance for the achievement of the Group's long-term objectives.

The Plan is structured into three cycles, each lasting three years, and provides for the free grant to the

beneficiaries of rights to receive a variable number of ENAV S.p.A. ordinary shares subject to achieving

1st Half 2020 1st Half 2019

Short-term remuneration payments 1,130 1,091

Other long-term benefits 0 0

Share-based payments 602 323

Total1,732 1,414

(thousands of euros)

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 82

specific performance targets for each cycle. The target aggregates are cumulative EBIT, in total

shareholder return (TSR) and cumulative free cash flow, because they represent the objective criteria for

measuring the creation of value for the Group in the long-term.

The Plan envisages a three-year vesting period for all beneficiaries between the time of the grant and the

vesting of the entitlement of the beneficiaries to receive the shares. Therefore, if the performance targets

are achieved and the other conditions established by the Rules are satisfied, the shares vested in each

cycle will be awarded and delivered to the beneficiaries no later than the 60th calendar day after the

approval by the ENAV Shareholders' Meeting of the financial statements for the last year of the threeyear

vesting period.

The incentive plan also includes a lock-up period for a portion of any shares delivered to the beneficiaries.

The performance targets are composed of the following indicators:

▪ a market-based component (with a 40% weighting on assigned rights) related to ENAV's performance

in terms of TSR compared with the peer group already identified by the Parent Company;

▪ a non-market-based component (with a 60% weighting on assigned rights) related to the achievement

of the cumulative free cash flow or EBIT targets.

With regard to the market-based component, the calculation method used is the Monte Carlo method,

which, on the basis of appropriate assumptions, made it possible to define a large number of alternative

scenarios over the time horizon considered. By contrast, the non-market-based component is not

significant for the purpose of estimating the fair value at the time of the grant, but it is updated at every

reporting date to take account of the expectations for the number of rights that may vest based on the

performance of EBIT and free cash flow compared with the Plan targets.

First cycle 2017-2019

The first cycle was completed with the approval of the financial statements at 31 December 2019. After

the closure of the first half of 2020, the shares were awarded to the plan beneficiaries in accordance with

the determination of the performance achieved. In the first half of 2020 a cost of €0.4 million was

recognised as an adjustment of the amount recognised in 2019, while the liability, recorded in a specific

equity reserve, amounted to €1.9 million.

Second cycle 2018-2020

The target was also assumed to have been reached for the second cycle of the plan, with 242,434 shares

and a total fair value of €0.9 million. The second cycle envisaged 10 beneficiaries and the cost recognised

for the first half was equal to €0.1 million, while the liability, recognised in a specific equity reserve,

amounted to €0.7 million.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 83

Third cycle 2019-2021

The target was also assumed to have been reached for the third cycle of the plan, with 176,545 shares

and a total fair value of €0.8 million. The third cycle envisaged 8 beneficiaries and the cost recognised for

the first half was equal to €0.1 million, while the liability, recognised in a specific equity reserve, amounted

to €0.4 million.

35. Derivatives

In April 2019, the Parent Company entered into five derivative contracts, one of which was exercised last

year, with the aim of hedging exposure to unfavourable developments in the euro/dollar exchange rate

deriving from the Data Services Agreement signed by the Parent Company with Aireon LLC for the

acquisition of satellite surveillance data. This contract provides for the payment in dollars of service fees

on an annual basis until 2023. The exchange rate risk was managed through forward currency purchases

whose residual notional value at the reporting date was $4.2 million.

The fair value of derivatives was a positive €180 thousand at 30 June 2020. In accordance with IFRS 13,

the mark-to-market value was adjusted to also take account of the effect of non-performance risk (CVA),

i.e., the risk that one of the parties will not meet its contractual commitments as the result of a possible

default. From an accounting perspective, the positive or negative fair value was recognised in

current/non-current financial assets/liabilities based on the contractual maturity, with a matching entry

in an equity reserve.

Indeed, pursuant to IFRS 13, the fair value of a derivative must incorporate the risk that one or both

counterparties may not meet their obligations (credit risk adjustment). More specifically, from the

financial perspective, the Credit Valuation Adjustment (CVA) is the expected value of the loss deriving

from the default of the counterparty, if the derivative has a positive fair value. Conversely, a Debit

Valuation Adjustment (DVA) represents the value of the expected loss on the default of the Company if

the fair value is negative.

It was not possible to identify an active market for these instruments. The fair value was therefore

calculated using a method consistent with level 2 of the fair value hierarchy defined by IFRS 7 and IFRS

13. Although quotes on an active market are not available for the instruments (level 1), it was possible to

find data observable directly or indirectly on the market on which the measurements could be based.

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 84

36. Assets and liabilities by maturity

The non-current trade receivables maturing at more than 5 years regard balance recognised in the period

that will be recovered in 2027.

Financial liabilities falling due after the 5th year refer to bank loans.

Other non-current liabilities maturing in more than 5 years refer to the share of capital grants recognised

in line with the depreciation of the investment projects to which they refer for the amount that will be

reversed to profit or loss after the fifth year.

37. Basic and diluted earnings per share

Basic earnings per share and diluted earnings per share, which both amount to €0.03 per share, are

reported at the end of the income statement and are calculated by dividing the profit for the period

attributable to the shareholders of the Parent Company by the weighted average number of ordinary

shares outstanding during the period.

38. Events after the reporting date

In August 2020, the long-term credit line obtained from European Investment Bank in the amount of

€70 million was drawn down.

(thousands of euros)

Within the

next 12

months

From 2nd to

5th year

Beyond 5th

year

Total

Non-current financial assets 0 11,127 0 11,127

Deferred tax assets 0 19,901 0 19,901

Non-current tax receivables 0 24,858 0 24,858

Non-current trade receivables 0 6,727 196,839 203,566

Other non-current receivables 0 15,738 0 15,738

Total 0 78,351 196,839 275,190

Financial liabilities 19,032 241,661 81,260 341,953

Deferred tax liabilities 0 8,145 1,075 9,220

Other non-current liabilities 0 33,260 137,056 170,316

Non-current trade payables 0 26,744 0 26,744

Total 19,032 309,810 219,391 548,233

ENAV Group - Consolidated Interim Financial Report as at 30 June 2020 85

Certification of the Chief Executive Officer and the Financial Reporting OfficerENAV Group - Consolidated Interim Financial Report as at 30 June 2020 86Independent Auditor's ReportEY S.p.A.Via Lombardia, 3100187 RomaTel: [phone]Fax: [phone]ey.comENAV Group - Consolidated Interim Financial Report as at 30 June 2020 87Legal information and contactsRegistered office

ENAV S.p.A.

Via Salaria 716, 00138 Rome

Tel. [phone]

www.enav.it

Legal information

Share capital: €541,744,385.00 fully paid-up

Tax ID and enrolment number in the Company Register

of Rome: 97016000586

VAT Registration No. 02152021008

Investor Relations

e-mail: [e-mail]