Saras S p A : The Board of Directors of SARAS SpA approves the Interim Financial Report as of 30th September 2020

The Board of Directors of SARAS S.p.A.

approves the interim Financial Report as of 30th September 20201

• ❖ Group comparable EBITDA positive at EUR 10.2 million in 9M/20 (EUR 234.5 million in 9M/19) and negative at EUR -61.5 million in Q3/20 (EUR 125.7 million in Q3/19), due to the highly critical refining market resulted from the accumulation of distilled products in the previous months and the persisting pressure on the crude oil market

• ❖ Group comparable Net Result negative at EUR -111.1 million in 9M/20 (positive at EUR 53.8 million in 9M/19) and negative at EUR -69.6 million in Q3/20 (positive at EUR 51.3 million in Q3/19),

• ❖ Reported Group EBITDA negative at EUR -78.1 million in 9M/20 (positive at EUR 258.3 million in 9M/19) and positive at EUR 36.3 million in Q3/20 (positive at EUR 120.2 million in Q3/19) impacted by the volatility and the trend of oil prices in the first half of the year, partially recovering in the third quarter, with an appreciable improvement in the valuation of stocks

• ❖ Net Financial Position at 30 September 2020 before IFRS 16 effect negative at EUR 413 million (compared to a negative NFP of EUR 337 million at June 30, 2020 and a positive NFP at EUR 79 million at December 31, 2019), due to the penalized profitability of the period; Net Financial Position at 30 September 2020 after IFRS 16 effect negative at EUR -456 million

• ❖ Adopted a plan to contain operating costs and investments for 2021 aimed at significantly reducing the negative impacts of the persistence of the unfavorable scenario in the upcoming quarters

• ❖ Guidance for 2020 equal to an average annual premium on EMC equal to +2.1 $/bbl, slightly below the guidance of 2.5-3.0 $/bbl.

After the Board meeting, the Chairman, Massimo Moratti, commented:

"The third quarter, despite the improvement which followed the gradual increase in consumption after the most critical months of the pandemic, was marked by a particularly critical refining market resulted from the accumulation of diesel in the previous months, and the persisting pressure on the crude oil market.

However, there are some encouraging signs such as the recovery of production in Libya and a slow rebalancing in the middle distillates market.

In this unprecedented and challenging environment, Saras has established an important plan to reduce investments, operating costs and for the first time in the history of the Company, CIGO Covid was used. This last measure was particularly painful, I would like to express my deep sense of gratitude to all the Group's workforce and to the trade unions that represent them for the great sense of responsibility and the deep attachment to the Company that they have shown in each phase of our dialogue.

We are confident that these extraordinary measures will secure the Company and place it in a position to seize the recovery expected in the next spring/summer in 2021. I am particularly pleased to underline that the activities relating to the energy transition have continued with the submission of Saras elaborated projects to the competent Authorities".

Milan, 4th November 2020: The Board of Directors of Saras S.p.A. met today under Chairman Massimo Moratti and approved the Interim Financial Report as of 30th September 2020, which is not subject to audit review. It should be noted that, in accordance with EU Directive 2013/50 transposed with Italian Leg. Decree n.25 dated 15th February 2016, which repealed the obligation to prepare the Interim Financial Reports, this Interim Financial Report has been issued on a voluntary basis, in order to ensure information continuity to the financial community in line with previous quarterly disclosure.

1 The manager in charge of preparing the corporate accounting documents, Dr. Franco Balsamo, declares, pursuant to paragraph 2 article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the documentary results, books and accounting records of the Company.

Covid-19 Impact

The first nine months of 2020 were characterized by an economic and social scenario that was seriously affected by the crisis in consumption which followed the containment measures of the Covid-19 pandemic.

Despite the difficult context of the pandemic, Saras, an essential industry in Italy that supplies a significant share of Sardinia's energy, has kept its plant of the Sarroch refinery running while still conducting the major maintenance activities that were scheduled. The refinery and the multitude of suppliers working on the plant maintenance was made possible thanks to the safety and Covid-19 containment measures that were immediately implemented, in compliance with provisions prepared by the National Authorities included the Prime Ministerial Decree and the order of the President of Sardinia Region.

This has allowed us, even in an extremely delicate moment, to provide the best safeguards for all workers at the refinery and the full employment of our workforce, including the many people employed by the companies engaged in the maintenance activities. This allowed us to make a tangible contribution to the economy of the territory where Saras operates. With this aim all the necessary measures were adopted to counter the virus and preserve the health of employees and partners including outside the productive site even before the lockdown, in particular with the extensive use of smart working and the use of digital tools and platforms to continue training activities and meetings. An insurance policy was also stipulated for all employees of the Italian Group companies to cover any need for hospitalization and subsequent assistance in the event of contagion from Covid-19.

From an economic point of view, the oil industry is one of the most impacted by the effects of the crisis.

In the refining sector, particularly the operators in the Mediterranean area such as Saras, have faced an unprecedented situation brought about by the combination of the drastic drop in the demand for petroleum products, registered since March with the adoption of lockdown measures by many countries and persisting in many of these until mid-June, and, on the supply side, by the production cuts decided in mid-April and introduced in early May by OPEC + countries, in an effort to support crude oil prices. The high level of volatility in the price of crude oil was added to these events due to the strong level of uncertainty that characterized the course of the pandemic and therefore also the containment measures adopted. These phenomena led to a significant drop in the refining margins, with evident impacts on the economic and financial results of the sector. With regard to Saras, it should be noted that also in this context the Company was able to leverage its characteristics of high flexibility and resilience, managing to guarantee a management performance in the first half and therefore a positive comparable EBITDA of the Group, which however, only partially offset the impact on the trend in prices on inventories that occurred at the reported EBITDA level.

Subsequently, in the third quarter of the year, there was an unexpected tightening of the scenario with a further decline in the margins of some reference products. The marginality of diesel has reached an all-time low. In addition, the production cuts that mainly impacted medium-heavy high sulfur crude oils further compressed the margins of complex refineries such as Saras (for a more detailed explanation on the evolution of the scenario, see the paragraph "Oil market and refining margins" ). These conditions significantly reduced the profitability of the Refining segment in the third quarter, and led to a revision of the estimates of the market recovery times by the main sector analysts, who are now expecting an improvement in the scenario not before the second half of 2021.

In this regard, although the timing of the recovery is uncertain, it should be noted that the recession caused by Covid-19 is due to factors that are external to the economic system, which should therefore not weaken its fundamentals. We therefore consider that Saras Group's operations can recover profitability in the coming quarters and restore it in the coming years, depending on the expected recovery in demand.

To describe the "Covid-19 impact" on the Group's business in the first nine months of the year, we compare the main assumptions for the market for 2020 immediately before the crisis with the same average values recorded in the first nine months of 2020. The pre-Covid assumptions for the year not only projected a trend in consumption in line with the previous period, but also incorporated an expected benefit from the second quarter of 2020 from the entry into force of the IMO-Marpol VI regulation, with a positive impact in particular on the crack spread of diesel and on the discounts of the basket of crude "sour".

As regards the crude market, the average price of Brent Dtd was extremely volatile in the first months of 2020 falling by about 28% compared to expectations, the drop being especially marked since mid-March until it reached historic lows of 13.2 $/bl in mid-April, after the slump in consumption was worsened by the failure of the Opec+ countries to agree on production cuts. However, once the agreement was reached and had entered into force in May, production cuts weremainly concentrated on high-sulphur medium-heavy crude thus supporting the prices of the entire "sour" basket, whose differentials remained under pressure throughout the second and third quarters.

On the product front, gasoline, the product most affected by lockdown measures together with jet fuel, recorded a heavy drop in demand, with average prices falling by approximately 31% accompanied by a reduction in margins of approximately 50%. Despite an initially lower drop in demand due to the resilience of commercial transport, the average price of Diesel dropped by approximately 33% and the margin contracted by approximately 52%. In the third quarter in particular, diesel margins suffered a further unexpected drop, due to the level of stocks accumulated during the year, also due to the absence of jet fuel demand, a product derived from middle distillates and to the partial recovery of Brent.

This scenario led to a reduction in the reference sector margin (EMC benchmark2) which in the first nine months showed a negative average value equal at -0.4$/bl, and a negative value of -1.8 $/bl in the third quarter, compared to a "Pre-Covid" market expectation of a positive benchmark margin in the year of +3$/bl.

During the first nine months, the Power and Wind sectors also suffered from the drop in the CIP6 tariff and the PUN. The effect induced by the collapse in gas consumption was also reflected in electricity prices, with an average CIP6 tariff in the period of 75.9€/MWh and an average PUN value of 35.6€/MWh, down approximately 15% and 30% respectively compared to the forecast for the year, despite a partial recovery in the third quarter. In the Wind segment, activities related to the reblading project suffered a slight delay due to the lockdown period, which will however be recovered in the first half of 2021.

In addition to the negative impact on the value of stocks that caused a significant reduction in turnover, working capital has gone up due to a significant reduction in payables to suppliers that is more than proportional to the reduction in trade receivables and inventory stock. The collapse of the diesel and gasoline margins in the third quarter further worsened cash generation in the period. This change, together with the important investment plan completed mostly during the first half of the year, led the Group's Net Financial Position, positive at 31 December 2019 at EUR 79 million pre-IFRS 16 (EUR 30 million post IFRS 16) to become a net debt position at 30 September 2020 of EUR 413.3 million pre-IFRS 16 (EUR 455.8 million post IFRS 16).

Beginning from end of March, Saras implemented various operational and financial measures to contain the impacts of the crisis.

In particular, in the Refining sector the fall in demand and the particularly unfavorable margins on the gasoline market led the Company to extend the shutdown of the FCC unit throughout June. This is the largest gasoline-producing plant which had already been undergoing scheduled maintenance in the months of March, April and May. Refinery runs in the second quarter were therefore concentrated on middle distillates, which were less affected by the slump in demand.

Furthermore, at the end of March the Company gradually restocked the level of inventories at particularly advantageous prices, with an economic benefit to Q2 results. In particular, it resorted to some hedging operations to ensure a margin on diesel production, and took advantage of the commercial opportunities deriving from the marked price contango structure which originated between the end of March and the beginning of April.

At the end of March, the Company then gradually repurchased the level of inventories at particularly advantageous prices, with an economic benefit that was reflected in the reported results for the third quarter, albeit disadvantaged by the further deterioration of the scenario for the period.

In a prudential perspective and in light of the considerable uncertainty of the markets, to better preserve the financial strength and the economic and financial balance of the Group, Saras deemed it appropriate to suspend the dividend proposals on 2019 profits and to authorise the share buy-back plan approved on March 2.

Alongside these measures, which concerned the first half in particular, the Company decided to adopt some extraordinary measures to contain the effects of the persistent negative scenario, starting with the decision to keep the refinery operational in relation to the cost-effectiveness of marginal processing, safeguarding however, the production of electricity is fundamental for the balance of the Sardinian grid. Saras also took action to implement and started a program to reduce operating costs and investments, also through the temporary use of the redundancy fund, partially adopted for all employees of the group starting from the end of October 2020. Investments instead, they will be revised starting from 2021, as those for 2020 have already been started and concentrated in the first half of the year.

In order to reduce the Group's liquidity risk and contain the potential economic and financial impacts deriving from the persistence of the economic crisis, the Company, in addition to the medium-term loans signed in the first quarter of 2020,

2 The EMC benchmark was constructed to reflect the refining margin for a complex refinery located in the Mediterranean that works with a mix of crude oils made up of 50% Urals and 50% Brent. Other benchmark margins are available from various sources (such as IEA, Reuters, Bloomberg), but none of these correctly reflect Saras' real market environment.

has initiated and is currently being defined with some leading credit institutions the strengthening of medium / long-term credit lines, and the review of some financial parameters on existing lines to take into account the changed market conditions.

The Group has also updated the potential impacts due to the persistence of the Covid 19 emergency on the main balance sheet items to which reference should be made to the Explanatory Notes.

Saras Group key financial and operational results

EUR Million

9M 2020 9M 2019 Change %

Q3/20 Q3/19 Change %

REVENUES	3,960	7,106 -44%	1,218	2,422 -50%
EBITDA reported	(78.1)	258.3	n.s.	36.3	120.2 -70%
Comparable EBITDA	10.2	234.5	-96%	(61.5)	125.7 -149%
EBIT reported	(234.7)	114.8	n.s.	(19.7)	70.6 n.s.
Comparable EBIT	(146.5)	91.0	n.s.	(117.5)	76.1 n.s.
NET RESULT reported	(174.0)	66.8	n.s.	6.7	42.7 -84%
Comparable NET RESULT	(111.1)	53.8	n.s.	(69.6)	51.3 n.s.

EUR Million	9M 2020 FY 2019
NET FINANCIAL POSITION ANTE IFRS 16	(413)	79
NET FINANCIAL POSITION POST IFRS 16	(456)	30
CAPEX	224	345

Starting from Q4/19, in order to continuously improve the methodologies used to measure operating performance and results, the methods used to calculate "reported" and "comparable" results were updated. To ensure comparability with previous periods, Q1/19 results have been reclassified in line with the criteria adopted from Q4/19.

Comments to First Nine Months of 2020 Group Results

In the first nine months of 2020, Group revenues were equal to EUR 3,960 million, down by 44% compared to EUR 7,106 million in the first nine months of the previous year. This significant reduction is due to the effects that the measures taken to contain the Covid-19 pandemic had on consumption levels, with an impact on volumes sold and the price of oil products.

In particular, the Refining segment recorded lower revenues of approximately EUR 2,390 million (46% lower than in the same period of the previous year) and the Marketing segment's revenues were lower by about EUR 663 million (43% lower than in the same period of the previous year).

In the Refining segment, volumes decreased by 15% compared to the first nine months of 2019: the plant shutdown in the first half of the year that involved the T1 Topping units and the FCC unit for the important scheduled maintenance cycle, which started in March and was completed at the end of May, was extended to for the FCC plant for the whole month of June, given the low cost of gasoline refining in the second quarter, when the gasoline crack saw a 57% decrease compared to the average of the same period of the previous year. In the first nine months of 2020 gasoline crack averaged 4.1 $/bl, 43% lower than in the first nine months of 2019 (7.1 $/bl in the first nine months of 2019). Similarly, diesel crack averaged 7.3 $/bl in the first nine months of 2019 hitting values below 2 $/bl, down 48% compared to the average of 14.2 $/bl in the first nine months of 2019. This decline was concentrated in the third quarter, when the diesel crack reached 4.4 $/bl, the period in which Saras postponed the maintenance of one of the two mild hydrocrackers, plants used in the processing of middle distillates.