Terna S p A : Results as of 30 June 2022 approved

RESULTS AS OF 30 JUNE 2022 APPROVED

ACCELERATION OF CAPEX IN FIRST HALF: UP BY 10.2% COMPARED TO THE SAME PERIOD OF 2021. CAPEX AMOUNTED TO OVER €367 MILLION IN SECOND QUARTER OF 2022

IMPROVEMENT ACROSS ALL PERFORMANCE INDICATORS

• Revenues €1,330.8 million (€1,256.3 million in H1 2021, +5.9%)
• EBITDA €946.9 million (€909.9 million in H1 2021, +4.1%)
• Group net profit for the period €398.1 million (€384.6 million in H1 2021, +3.5%)
• Capex €660.5 million (€599.6 million in H1 2021, +10.2%)
• Net debt €8,994.0 million (€10,002.5 million at 31 December 2021)

Rome, 28 July 2022 - 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 2022 ("H1 2022").

The first six months of the year were marked by the terrible conflict in Ukraine, which has resulted in a sharp rise in commodity prices and energy price tensions that could last for several years to come. In addition, extreme climate events have led, among other things, hydroelectric production to record its lowest level in the last 60 years. Against this complex backdrop, Terna continued to boost investments, which in the second quarter exceeded €367 million.

"The tragic events in Ukraine, and the resulting international energy crisis, have led to the essential need for our Country, in line with the objectives foreseen by the European Union, to continue to work towards reducing as far as possible the dependence on fossil-fuel,"said Stefano Donnarumma, Terna's CEO and General Manager. "This goal can be met primarily by accelerating the development of renewable sources. In this perspective, the grid has a key role to play in

enabling the necessary shift and therefore Terna is continuing to step up its investments."

CONSOLIDATED FINANCIAL HIGHLIGHTS FOR H1 2022

€m	H1 2022*	H1 2021*	% change
Revenues	1,330.8	1,256.3	+5.9%
EBITDA (gross operating profit)	946.9	909.9	+4.1%
EBIT (operating profit)	607.4	584.4	+3.9%
Group net profit for the period	398.1	384.6	+3.5%
Capital expenditure	660.5	599.6	+10.2%

• Given that the requirements of IFRS 5 have been met, the total results for the first half of 2022 and 2021 attributable to the South American subsidiaries included in the planned sale of assets, launched at the end of 2021, have been classified in the item "Profit/(Loss) for the period from assets held for sale" in the Group's reclassified income statement.

Revenues for the first half of 2022, amounting to €1,330.8 million, are up €74.5 million (+ 5.9%) compared to the same period of 2021. The result primarily reflects an improvement in revenues from Regulated Activities, thanks to the effect of the output-basedincentive mechanisms, after the impact of the reduction in the WACC recognised for 2022, combined with the contribution from Non-regulated Activities, which reflect, above all, the contribution from the LT Group. Revenues rose 7.1% to €686.4 million in the second quarter of the year (€640.6 million in the same period of the previous year).

EBITDA (gross operating profit) for the first half of 2022 amounts to €946.9 million, an increase of €37.0 million (+ 4.1%) compared to the €909.9 million of the first half of 2021. The increase reflects the improved result from Regulated Activities. EBITDA for the second quarter of 2022 is up 5.2% to €485.6 million (€461.5 million in the same period of 2021).

EBIT (operating profit) for the period, after amortisation, depreciation and impairments, amounts to €607.4 million, compared to €584.4 million for the first six months of 2021 (an increase of 3.9%).

Net financial expenses for the period amount to €36.2 million, a slight increase on the €34.1 million of the first half of 2021. This essentially reflects inflation during the period, partially offset by an increase in capitalised charges and the positive impact of exchange rate movements on foreign currency exposures.

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Profit before tax amounts to €571.2 million, an increase of €20.9 million (+ 3.8%) compared to the same period of 2021.

Income tax expense for the period totals €160.5 million, an increase of €4.0 million (+ 2.6%) compared to the first half of 2021. This reflects the increase in pre-tax profit after the greater amount of contingent tax assets recognised during the previous year. The resulting tax rate of 28.1% thus marking a physiologic decrease compared to the figure for the first half of 2021 (28.4%).

Group net profit for the period of €398.1 million is up €13.5 million (+ 3.5%) compared to the €384.6 million of the first half of 2021. Net profit for the second quarter is up 6.2% to €206.3 million (€194.2 million for the same period of 2021).

The consolidated statement of financial position shows equity attributable to owners of the Parent of €5,848.3 million, compared to €4,681.9 million at 31 December 2021.

Net debt of €8,994.0 million compares with the €10,002.5 million of 31 December 2021. The significant increase in equity attributable to owners of the parent and the accompanying reduction in net debt primarily reflect the issuance made in February of a hybrid green bond worth €1 billion, accounted for as an equity instrument.

The Terna Group's total capital expenditure during the period amounts to €660.5 million, with an increase of 10.2% compared to the €599.6 million of the same period of 2021.

The Group's workforce at the end of June 2022 totals 5,315, up 179 compared to 31 December 2021. The increase is linked to the need to strengthen the pool of expertise and the growth of the business, in line with the updated "Driving Energy" 2021-2025 Industrial Plan.

KEY EVENTS IN H1 2022

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

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In particular, the new connections between Bisaccia (AV) and Deliceto (FG), Vaglio (PZ) and Oppido (RC), Lesegno and Ceva in the province of Cuneo and between Udine South and Udine FS entered into operation.

Construction of the new power lines included in the updated 2021-2025 Industrial Plan continued, including the Paternò-Pantano-Priolo line (in Sicily) and the Colunga-Calenzano line between the provinces of Bologna and Florence. The authorization process for both sections of the Tyrrhenian Link also got underway (the Campania-Sicily East Link and the Sicily-Sardinia West Link). The Services Conference for the East Link has concluded and the Campania Regional Agreement issued, whilst the Sicily Agreement is in the process of being issued.

Investment of €34 million in statcom devices and synchronous compensators will benefit grid security. The renewal of overhead lines and substation equipment also continued, with the replacement of approximately 875 km of lines and 10 items of equipment.

As regards financial matters, during the period, Terna renewed the Euro Medium Term Note (EMTN) Programme, which has a maximum value of €9,000,000,000. At 30 June 2022, the senior green bonds issued by Terna amount to €2.6 billion.

In February, Terna agreed a bilateral ESG-linked Term Loan amounting to €300 million and successfully launched the first hybrid green bond to be issued by an Italian corporate issuer, with a nominal amount of €1 billion.

Finally, the ESG-linked share buyback programme to service the Performance Share Plan 2022- 2026 was completed on 13 June 2022. Under the programme, Terna has purchased no. 1,280,717 own shares (equal to 0.064% of its share capital) at a total cost of approximately €9,999,993.13. 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. The total shares purchased under the above programme are in addition to the further 3,095,192 own shares already purchased by the Company in 2020 and 2021. As a result, Terna S.p.A. now holds a total of 4,375,909 treasury shares (equal to 0.218% of the share capital). Subsidiaries do not hold shares in the Parent Company, Terna.

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OUTLOOK

Despite the worsening geopolitical situation caused by the prolonged conflict between Russia and Ukraine and continued commodity price pressures, the second half of the year will see the Group continue to focus on delivering on the updated "Driving Energy" 2021-2025 Industrial Plan. The updated Plan confirms and strengthens Terna's central role in driving the Italian energy system and enabling the energy transition, with the Group planning to invest a total of €10 billion in the five years from 2021 to 2025, including approximately €1.7 billion in 2022.

In line with the 2021 National Development Plan, which targets investments of €18.1 billion over a 10-year period (up 25% on the previous plan), capex acceleration on Regulated Activities is confirmed. Investment will focus on enabling the energy transition and facilitating the development and integration of renewable sources, making a major contribution to achieving the ambitious goals set out in the Green Deal and helping to drive Italy's economic recovery.

In terms of the Group's most important investment projects, work is progressing on the Tyrrhenian Link, for which Terna recently submitted to the Ministry for the Ecological Transition the authorization request for construction and operation of the West Link section, following on from the launch of the authorization process for the East Link section in November 2021. The authorization process for the Adriatic Link project, the new submarine cable that will connect the Abruzzo and Marche regions, is also expected to begin in the second half of 2022. Among the main infrastructures under construction, it is worth mentioning the interconnection with France, expected to enter into operation in the second part of 2022.

In terms of the Defence Plan, the planned installation of synchronous compensators will continue, with the aim of supporting the regulation of short-circuit voltage and power in areas of the Country characterised by a high level of production from renewable sources and a significant reduction in traditional generation.

Work on the rationalization of electricity grids in metropolitan areas will also continue during the second half of the year, primarily involving the renewal of existing infrastructure with new technologically advanced connections meeting the highest standards in terms of environmental sustainability (e.g., Florence and Rome).

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