Saras S p A : Third Quarter 2020 results

Third Quarter 2020 results

4th November 2020

AGENDA

• • Saras Highlights

• • Market highlights

• • Segment Review

• • Outlook

• • Saras Roadmap to Energy Transition

• • Financials

• • Additional Information

Important Notice

NON-GAAP MEASURE

ALTERNATIVE PERFORMANCE INDICATORS

In 2019, the Saras Group continued to improve the methodologies used to measure its operating performance and financial results, which includes both GAAP and non-GAAP indicators. In this respect, with effect from Q4/19, the Group decided to update its accounting policy for the classification of derivative instruments in the reported results, classifying the realized and unrealized gains/losses on commodity and CO2 hedging derivatives within the Reported EBITDA, consistently with the entry of the purchase and sale of crude oil and products, against which they are realized and directly related, despite the recognition of the current value of the same as a counterpart of the income statement. In addition to the improvement objective mentioned above, this decision also stemmed from the options offered by IFRS 9, which recently became applicable.

In order to give a representation of the Group's operating performance that best reflects the most recent market dynamics, in line with the consolidated practice of the oil sector, the results at operating level and at the level of Comparable Net Result, non-accounting measures elaborated in this management report, are shown by evaluating the inventories on the basis of the FIFO method, however, excluding unrealized gains and losses on inventories deriving from scenario changes calculated by evaluating opening inventories (including the related derivatives) at the same unit values of closing inventories (when quantities rise in the period), and closing inventories at the same unit values of opening inventories (when quantities decrease in the period). Non-recurring items in terms of nature, materiality and frequency have been excluded from both the operating profit and the comparable net profit. The results thus calculated, which are referred to as "comparable", are not indicators defined by the International Financial Reporting Standards (IAS/IFRS) and are unaudited.

DISCL AIMER

Certain statements contained in this presentation are based on the belief of the Company, as well as factual assumptions made by any information available to the Company. In particular, forward-looking statements concerning the Company's future results of operations, financial condition, business strategies, plans and objectives, are forecasts and quantitative targets that involve known and unknown risks, uncertainties and other important factors that could cause the actual results and condition of the Company to differ materially from that expressed by such statements. This presentation has been prepared solely by the company.

9M/20 & Q3/20 Highlights

EUR million	Jan-Sep 20	Jan-Sep 19	Q3/20	Q3/19
Reported EBITDA	(78.1)	258.3	36.3	120.2
Reported Net Result	(174.0)	66.8	6.7	42.7
Comparable EBITDA	10.2	234.5	(61.5)	125.7
Comparable Net Result	(111.1)	53.8	(69.6)	51.3
Sep 30th 2020
Net Financial Position ante IFRS 16	(413)
Net Financial Position post IFRS 16	(456)

Jun 30th 2020
(337)	(223)	79
(382)	(271)	30

Mar 31st 2020 Dec 31st 2019

EUR million

Positive Group comparable EBITDA at EUR 10.2M in 9M/20 and negative at EUR -61.5 in Q3/20: Refining profitability impacted in Q3 by a very weak scenario with distillates-diesel crack falling as high supply persists and discounts on sour crude remaining slim.

The unfavorable market, worsened in Q3, led to:

• • 9M/20 Refining premium positive at +2.4 $/bl, with an average EMC for the nine months at -0.4$/bl (Saras' average margin for 9m at +2.0$/bl)

• • Q3/20 Refining premium positive at +0.3 $/bl, with EMC negative at -1.8 $/bl (Saras' average margin for Q3 at -1.5$/bl)

  Net Financial Position (ante IFRS 16) as of September 30th, 2020, impacted by the lack in profitability in Q3, was negative at EUR -413 M, from a Net Debt of EUR -337 M as at June 30th 2020.