Terna S p A : Results as of 30 June 2021 approved

RESULTS AS OF 30 JUNE 2021 APPROVED

FURTHER BOOST TO CAPEX IN FIRST HALF:

UP 40.6% COMPARED WITH THE SAME PERIOD OF 2020

ALONE IN THE SECOND QUARTER OF 2021 ONLY, CAPEX AMOUNTED TO OVER

€360 MILLION (€210.5 MILLION IN Q2 2020, THAT ALREADY REFLECTED

POST-LOCKDOWN RESTART OF CONSTRUCTION SITES): THE HIGHEST LEVEL IN

TERNA'S HISTORY FOR THIS PERIOD OF THE YEAR

ALL ECONOMIC AND FINANCIAL INDICATORS IMPROVED

• Revenues at €1,258.7 million (€1,183.1 million in H1 2020, +6.4%)
• EBITDA at €910.5 million (€876.0 million in H1 2020, +3.9%)
• Group net profit for the period at €384.6 million (€377.5 million in H1 2020, +1.9%)
• Capex at €601.9 million (€428.0 million in H1 2020, +40.6%)
• Net debt at €9,734.6 million (€9,172.6 million at 31 December 2020)

Rome, 29 July 2021 - Today's meeting of the Board of Directors of Terna S.p.A. ("Terna"), chaired by Valentina Bosetti, has examined and approved the results for the six months ended 30 June 2021 ("H1 2021").

Italy's economic recovery continued in the first half of the year, with Terna making a significant contribution by further accelerating investments which, in the second quarter only, reached €360 million, the highest level in Terna's history for this period of the year.

"Terna is the director of the energy transition and it is therefore in our DNA to commit ourselves daily to serve Italy and the community. This is why, also in the second quarter of 2021, we continued the strong acceleration of our investments which, in addition to being natively sustainable, play a key role in enabling the decarbonisation of our country and allowing Italy to

achieve its targets in terms of reduction of emissions and development of renewable sources," said

Stefano Donnarumma, Terna's CEO and General Manager.

CONSOLIDATED FINANCIAL HIGHLIGHTS FOR H1 2021

€m	H1 2021	H1 2020*	% change
Revenues	1,258.7	1,183.1	+6.4%
EBITDA (gross operating profit)	910.5	876.0	+3.9%
EBIT (operating profit)	584.8	573.7	+1.9%
Group net profit for the period	384.6	377.5	+1.9%
Capital expenditure	601.9	428.0	+40.6%

• Amounts are the same as those published in the Half-year Report for 2020, excluding the impact of the restatement required by IFRS 3.

Revenues for the first half of 2021, amount to €1,258.7 million, an increase of €75.6 million (+6.4%) compared with the same period of 2020. The result mainly reflects an improvement in revenues from Regulated Activities, combined with the contribution from Non-regulated Activities, mainly related to the Tamini group and to the full integration of the Brugg group. Revenues in the second quarter of the year are up by 3.5% to €636.9 million (€615.6 million in the same period of the previous year).

EBITDA (gross operating profit) for the period amounts to €910.5 million, an increase of €34.5 million (+3.9%) compared with the €876.0 million of the first half of 2020. This mainly reflects an improvement in EBITDA from Regulated Activities due the increase of the National Transmission Grid asset-base. EBITDA for the second quarter of 2020 is up 3.4% to €456.9 million (€441.8 million for the same period of 2020).

EBIT (operating profit) for the period, after amortisation, depreciation and impairments, amounts to €584.8 million, compared with €573.7 million of the first six months of 2020 (an increase of 1.9%).

Net financial expenses for the period amount to €41.1 million, a slight increase on the €39.1 million of the previous year, primarily due to the adjustment of the value of the equity investments of associated companies.

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Profit before taxes is €543.7 million, an increase of €9.1 million (+1.7%) compared with the first half of 2020.

Income tax expenses for the period amount to €157.7 million, an increase of €2.7 million (+1.7%) compared with the same period of 2020. The tax rate of 29% is in line with the first half of 2020.

Group net profit for the period of €384.6 million is up by €7.1 million (+1.9%) on the €377.5 million of the first half of 2020. Net profit for the second quarter is up by 1.7% to €194.2 million (€190.9 million in the same period of 2020).

The consolidated statement of financial position shows equity attributable to owners of the Parent of €4,435.6 million, compared with €4,369.8 million at 31 December 2020.

Terna Group's total capital expenditure of the period amounts to €601.9 million, an increase of 40.6% compared with the €428 million of the same period of 2020.

Net debt amounts to €9,734.6 million compared to the €9,172.6 million of December 31st ,2020 to support the investment activities of the period.

The Group's employees at the end of June 2021 are 4,923, an increase of 188 compared with the amount of 31 December 2020. The increase is linked to the planned strengthening of the Group's distinctive competences and to the growth of the business, in line with the 2021-2025 "Driving Energy" Industrial Plan.

KEY EVENTS IN H1 2021

The delivery of Terna's construction projects continued and intensified in the first six months of the year.

In particular, among other projects, it is worth mentioning the entry into operation of the new power lines Melilli - Priolo (Syracuse); Modena North - Modena East, Figline - Pirelli (Florence) and Rivoli - Paracca (Asti).

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Moreover, construction of the new power lines foreseen by the 2021-2025 Industrial Plan continued, including the Paternò-Pantano-Priolo line (Sicily) and the rationalization of the Upper Bellunese area and of the Turin and Naples metropolitan areas.

Finally, it is worth mentioning the investments for the renewal of overhead lines and substation equipment. In the first half of 2021, 1,324 km of conductors and 10 machines were replaced: among these, 3 "green machines" insulated using vegetable esters were installed, thus confirming our constant commitment to environmental sustainability.

Regarding finance, a number of transactions were completed in order to support the 2021-2025 "Driving Energy" Industrial Plan. On 8 June 2021, Terna renewed its Euro Medium Term Note (EMTN) Programme. In the context of the update, the maximum amount of the programme has also been increased to Euro 9,000,000,000.

On 13 July 2021, Terna obtained a new loan of €300 million from the European Investment Bank. The loan has a tenor of approximately 22 years.

On 16 July 2021, Terna launched a three-year Euro Commercial Paper (ECP) programme worth €1 billion. The commercial papers can be designated "ESG Notes", provided that Terna achieves and maintains a ranking equal to or above Bronze Class in the S&P Sustainability Yearbook for the Electric Utilities sector.

Finally, the ESG-linked share buyback programme to serve the Performance Share Plan 2021- 2025 was completed on 23 June 2021. Under the programme, Terna has purchased 1,569,292 own shares (equal to 0.078% of its share capital) at a total cost of approximately €10 million. In line with Terna's commitment to sustainability and social and environmental responsibility, the programme includes a mechanism based on bonuses and penalties linked to the Company's achievement of specific environmental, social and governance objectives.

OUTLOOK

In the second part of the year, with the pandemic scenario expected to improve, compared to the first half, the Group will be even more focused on delivering the 2021-2025 Industrial Plan, which aims to confirm and strengthen Terna's central role in driving and enabling the Italian energy system and transition. Of the €9.2 billion to be invested in the Plan period, approximately €1.4 billion are expected to be invested in the current year.

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In line with the recently presented new 2021 National Transmission Grid Development Plan, which foresees investment of €18.1 billion over the next ten years (up by 25% compared to the previous plan), a strong acceleration in Regulated Activities is confirmed to enable the energy transition and facilitate the development and integration of renewable sources. This will contribute to the achievement of the ambitious targets set by the European Green Deal and will support the country's economic recovery.

Among the main infrastructures under construction there are the interconnection with France and the planned strengthening of the connection between Sardinia, Corsica and the Italian mainland (SA.CO.I.3). In addition, the preliminary marine surveys for the Tyrrhenian Link will continue in the coming months, as well as the engagement with the different stakeholders involved, aimed at starting the authorization process.

Works are also progressing on the main projects that will increase exchange capacity between the various areas of the Italian electricity market, including the "Bisaccia (Avellino) Deliceto (Foggia)" and the already mentioned "Paternò-Pantano-Priolo" (Sicily) power lines.

Regarding the Defence Plan, the planned installation of synchronous compensators will continue, with the aim of enhancing grid stability in areas of the country characterised by a high level of production from renewable sources and a significant reduction in traditional generation.

In the second half of 2021, projects for the rationalization of main metropolitan areas will also continue, primarily involving the renewal of existing infrastructures with more technologically advanced connections that meet the highest standards in terms of environmental sustainability.

Finally, the regulator, ARERA, has begun the process for the review of the allowed WACC for the electricity and gas sectors from 2022.

With regard to Non-regulated Activities, Terna will continue to consolidate its role both in the Energy Solutions business, developing high value-added services for corporate customers, including energy efficiency solutions, and catching market opportunities for traditional and renewable customers, and in Connectivity services, pursuing opportunities based on exploiting the Group's optical fiber infrastructure.

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