snam.it

Full-year 2016 results and 2017-2021 plan update

London, March 7th, 2017

Agenda

1. 2016 results

2. 2017-2021 plan update

3. Additional opportunities

4. Concluding remarks

2

2016 results 01.

3

4

In June we presented a plan with 5 key pillars

Sound Financial Policy

Excellence

in project

execution

and

operational

efficiency

Additional

value

creation

opportunities

Stable and

visible regulation

Solid

investment

plan in

existing

portfolio

5

We are delivering on these objectives

• Obtained >8,000 permits; >1,000 construction sites

• Delivered capex plan on time and on budget for the 10th consecutive year

• New efficiency plan launched with ~80 identified cost-savings initiatives

2016 key achievements

* Number of injuries per million hours worked

Solid investment plan

in existing portfolio

Excellence in project

execution and

efficiency

Additional value

creation opportunities

Sound financial policy

• Invested €906m of capex in Italy, +3% vs 2015 and in line with 2016 guidance

• Installed +355 km of network; +46 MW of compression capacity; +500 Mcm storage capacity

• Invested € ~170m in TAP, in line with project schedule

• Increased average maturity of M/L debt by 1 year

• Cost of debt lowered to 2.4% vs 2.8% in 2015, ahead of guidance. Issued first Italian

corporate zero coupon bond

• Debt/RAB including associates ratio at ~52% at YE 2016

• Start-up of new balancing regime services

• Agreement with FCA, Iveco and API to promote CNG mobility

• Launched Snam Global Solutions initiative to provide services to third parties

• Acquisition of 49% Gas Connect Austria in JV with Allianz (Snam investment: €135m)

Key achievements in our European international associates

10 operational projects to support international

associates in the last 2 years (eg

roll-out of Snam custom tools)

Leverage of Snam capabilities on

project development

TAP awarded Snam a ~50M€ contract

Secondees from Snam to

associates and viceversa

Debt optimization Refinancing activities in TAG & TIGF

reduced cost of debt and improved

maturities

Income from associates on a like for like* basis € 112mln in 2016 +5% vs 2015

Efficiency

3 cost reduction projects ongoing

following Snam benchmarking

studies

* Adjusted, considering TAG, TIGF and IUK consistently with 2015 6

Strong full-year 2016 results

RAB (2016E) € 19.4 bn (€ 21.3 bn including associates)

In line with guidance

>95% from regulated activities

Up 1.8% on 2015 excluding WACC impact

Down 2.6% on 2015 including WACC impact

Revenues € 2,560 m

Flat nominal controllable fixed costs

Up 2.1% on 2015 excluding WACC impact

Down 3.4% on 2015 including WACC impact

YE 2016 Net Debt € 11,056 m

EBITDA adj. € 1,987 m

+5.5% vs. guidance Pro-forma adj.* Net Profit € 845 m

In line with guidance

€103m of buyback completed in Q4

* Includes pro-forma net profit contribution from associates net of one off events 7

8

Adjusted and pro-forma results

€ m

* Includes net profit form discontinued operations

861

671 671

826 826 845

-190

+155 +19

ReportedNet Profit*

2016

ItalgasDiscontinuedOperations

One-offfinancial

items

AdjustedNet Profit

2016

ProformaAdjustment

ProformaAdjusted

Net Profit 2016

EBITDA2015

Regulatedrevenues

Controllablefixed costs *

Other EBITDA2016

9

2016 results: Ebitda analysis

€ mn

2,057 1,987

-85

+1 +14

Strong performance excluding impact of WACC update

* At constant perimeter

10

2016 results: adjusted net profit analysis

Adj. Net profit2015

EBIT Net InterestIncome

(expenses)

Net Income fromassociates

Income taxes Adj. Net profit2016

Net profit adj.pro-forma*

2016

863 826

-145

+69 +10 +29 845

Net income benefited from reduction in cost of debt, fiscal charges and increased

contribution from associates

* Pro forma net profit includes adjustments for the contribution of associates on a full year basis, net of one-off events

€ mn

11

2016 cash flow

Adj. Netprofit

Depreciation& Otheritems

Change inworkingcapital

Adj. Cashflowfrom

operation

One-offfinancial

items

Cash flowfrom

operation

Netinvestmets

Freecash flow

Freecash flow

discontinuedoperations

Dividend BuyBack

Cashflow

826

+651 -99 -155

1,223 1,378

-1,133

90 115 -875

-103

-773

€ mn

12

2016 change in net debt

€ mn

Net financialdebt 2015

Cash flow2016

Non cashfinancial

items

ItalgasDemerger

Net financialdebt 2016

13,779 +773 +15

-3,511

11,056

Main financial actions in 2016

Resizing of financial structure

following Italgas demerger:

• €2.75bn bond buyback

• cancellation of ca. €1bn bilateral committed

banking facilities

Reshaping of funding mix:

• Pool banking and bilateral facilities renegotiation and

extension (ca. €4 billion)

• Further treasury management optimization

• More efficient balance between:

• Competitive costs and long tenors (institutional

lenders and Debt capital market)

• Flexibility (banking facilities)

• Growing weight of fixed rate debt

2016 Drivers

* Nominal value

Total committed credit facilities and bonds by source*

Banking facilities

Debt capital market

Institutional

lenders financing

Outstanding debt - Fixed- Floating breakdown

Floating rate debt

Fixed rate Debt

13

54 36

10

Before Italgas demerger

(as of 30 Sept: €16.3bn)

60

31

9

After Italgas Demerger

(as of 31 Dec: €12.7bn)

58

42

Before Italgas demerger

(as of 30 Sept: €14bn)

64

36

After Italgas demerger

(as of 31 Dec: €11.1bn)

Another year of delivery

• 2.4% cost of debt in 2016

• -10bps vs. 2016 guideline

• -40bps vs. 2015

• Average tenor of M/L term debt: > 5 years or +1 year vs. June 2016

thanks to LM exercise

• No major refinancing peaks

• Strong liquidity profile covering 24 month- maturities

14

Cost of debt reduction Maturity improvement

Debt capital market Pool banking facilities

Bilateral banking facilities Institutional lenders financing

1 Nominal value

BOND AND DRAWN COMMITTED FACILITIES - MATURITY PROFILE

(€ bn) as of 31 December 2016

FINANCIAL STRUCTURE (€ bn)

as of 31 December 2016

7.5

3.2

0.8 1.2 11.1

12.7

Net Debt 2016 Total committed creditfacilities and bonds1

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 beyond2026

Debt capital market Banking facilities and institutional lenders financing

Balance sheet solidity and financial structure efficiency

Solid Investment grade profile

• Firm commitment to current credit rating metrics (Net Debt/RAB <60%;

FFO/Net Debt >11%)

• Snam’s metrics well within rating agencies thresholds

• Fair balance between an adequate liquidity profile and commitment fees

thanks to focused management of maturities

• Fair and stable regulatory framework

Optimized debt structure

• Fixed-floating breakdown and tenor consistent with regulatory framework

• Large portion of fixed rate debt to limit interest rates exposure

• M/L Term debt tenor in the 5 year space

• Asset & Liability Risk Management approach

SNAM KEY CREDIT METRICS 2015PF1 2016PF1

Net Debt/(RAB+associates) 49% 52%

FFO2 / Net Debt ca. 15% ca. 14%

1. Excluding Italgas for the full year

2. Based on reported figures before change in working capital. 2016 Adjusted Pro-forma Net Income

2015 2016

Available committed funding ca. € 4.0bn ca. €3.2bn

Fixed-floating rate debt breakdown 64%-36% 64%-36%

M/L Term Debt tenor ca. 5 years >5 years

CREDIT RATING M/L TERM OUTLOOK

Moody’s Baa1 negative

S&P BBB stable

Fitch BBB+ stable

15

What we are doing and what’s next in 2017

Financial flexibility

Plan cash flow from operations to essentially cover capex and

dividends

Ongoing share buyback as a flexible way to manage

shareholder remuneration and financial structure efficiency,:

• As of 2nd March 2017 ca. 64m shares acquired (1.8% of

the share capital) for €233m

• Avg. purchase price: €3.64 per share (-3% vs. VWAP)

Cost of debt and debt structure

Expected funding cost reduction from:

• Latest LM exercise, locking in 2017 benefits

• Management of future refinancing exercises and funding

mix, also leveraging on available market liquidity

Further market upside: more than 200bps of coupon delta

between expiring bonds and potential new issuances over

2017-2021

Enhance fixed rate debt and preserve debt tenor to limit P&L

volatility

Net debt guidance €11.5bn at 2017 YE (incl. € ~0.3bn true up on TAP financing),

2.2% cost of debt

Fixed rate debt: ~ ¾, M/L term maturity: ~ 5 years

16

2017-2021 Plan 02.

17

2017-2021 Plan – key highlights

• Increased investment plan

€5bn of investments: €4.7bn of Italian capex (+€400m vs previous plan) and € ~270m TAP equity

€1bn of Italian capex in 2017 vs €0.9bn in 2016

• Improved contribution from new activities

Services: €150m of cumulated revenues, thanks to SGS (TAP contract), new regulated service revenues

CNG business unit: plan for roll-out of 300 new filling stations

• Solid contribution from associates

€ ~200m by 2021

• Innovation and operational excellence to support higher efficiency

>€200m invested in new tech to improve our operational performance

Efficiency plan: >€10m savings in 2017; >€25m by 2021

• Solid and efficient financial structure

Further reduction in cost of debt, 2.2% in 2017

Cashflow from operations to cover capex and dividends

18

19

Increased investment plan to €5bn

CAPEX 2017-2021

Transport & CNG

CAPEX 2017-2021

Storage and LNG

Interconnection

withTAP

Support to the

North West

market and

bidirectional

cross-border

flows

Realization

of about

300 filling

stations to

supply

CNG

Development of

Fiume Treste

storage field

Development of a

new level (F - level)

to the original

pressure of the

reservoir

* Tap true up for essentially same amount at financial close, currently expected at Year end 2017

28%

32%

9%

19%

8% 4%

Other

Development

Maintenance

CNG

Replacement

Redeliv. Points upgrading

€ 4.1 bn € 0.6 bn

TAP

€ ~ 270m equity injection* in 2017

22%

57%

21%

Other Development Maintenance

20

2017 Italian capex

€ 0.9 bn

CAPEX 2017

Transport & CNG

€ 0.1 bn

Storage and LNG

Further

methanization

of Calabria

Support to the

North West

market and

bidirectional

cross-border

flows

Redelivery points upgrading

Maintenance activity to

preserve high-level service

and security of the network

40%

45%

6%

1%

7%

1%

18%

52%

30%

Other

Development

Maintenance

CNG

Replacement

Redeliv. Points upgrading

Ravenna – Chieti

Replacements Pontremoli –

Albareto

Maintenance

21

CNG roll-out 2017-2021: environmentally and economically sustainable mobility

• Snam creates the infrastructure framework: a turnkey solution for fuel retailers or fleet operators

• Contractual arrangement, aiming at regulating the process of building and operating the CNG stations

• Fee paid by the fuel retailers or fleet operators (long-term contracts with credit-worthy counterparties)

• The first stations will start their activities in H1 2018

• Identified prime candidate filling stations to host CNG infrastructure

• Preliminary commercial negotiation already in place with 3 large fuel retailers

• Italian legislation implementing the DAFI (Directive for Alternative Fuels Infrastructures)

recently passed and confirming a strong role for CNG (and LNG)

Gas Connection Compressors /

Storage

Dispensers /

shelters

CNG infrastructure

management

Network/Fleet

operator

Additional RAB: €60m €90m capex Total c.300 stations

Snam: €150m investment

Risk-adjusted

returns higher than

Italian regulated

activities

22

New asset-light services adding high-margin revenues

• New service platform created leveraging on

Snam key competences

• TAP contract award, €50m over three years

• Services offered to third parties

(included associates)

• Project Management

• Permitting Services

• Maintenance and dispatching services

• IT services and Risk management

Snam Global Solutions

€150m of cumulated revenues over the plan period

New regulated services

Already launched

• New balancing regime incentives (Oct 16)

• Demand forecast

• TSO actions on spot market

• System residual balancing

• Supply of last resort

Under development

• Capacity products (e.g. oversubscription & buy-back)

• PSV transaction fee

* Net of Italgas and TAP contribution

• Contribution from TAP: ~50m€

• Addition of GCA to Snam portfolio

• Enhanced visibility on medium term results from new regulation

in transport in France and Austria

• Contribution from Italgas

Payback by 2021 >90% Payback by 2021 ~70% Payback by 2021 >90%

23

Solid contribution from associates

Key drivers to 2021 results Net income from associates

€ m

~200

135

106 112*

~200

2015 2016 2021

ITG

24

Ambitious plan to further strengthen our operational excellence

Extensive deployment of new technologies to strengthen our

operational performance

• Real time leak detection

• Smart gas and augmented reality

>€200m of investments of which € ~160m in Industry 4.0 initiatives

Invest in people and processes to structurally upgrade our

capabilities

• Snam Academy, Lean programme, change management initiatives

• New organization: from a Group of companies to an integrated player

All key initiatives now launched

Further enhance our corporate citizenship

• Snam Foundation

• First Italian company to join the Global Corporate Supporters Forum by

Transparency international

Sustainability as a core value

>10

>25

2017E By end of plan

Operations and Maintenance:

• Optimization of operating processes

• Internalization of processes and review of make-or-buy mix

• Energy efficiency initiatives

Corporate:

• Renegotiation and optimization of IT infrastructure and application

maintenance

• Reduction of consultancy and advisory services

• Re-engineering of processes of all key functions

Lean transformation across the Group:

• Reshaping the way we work: faster & leaner, more effective

• Creation of a new cross-functional team of internal change agents to

ensure sustainability of new solutions and savings

€ m

80 initiatives already identified

Higher efficiency target, supported by a comprehensive set of initiatives

Saving target Supporting initiatives

25

2016 PF New regulatedactivities and

growing businessdimension

Emerging costsfrom demerger

Efficiency 2021 Corebusiness

Core business costs flat in real terms, offsetting higher costs due

to growing activities, infrastructure and complexity:

• Effective cost reduction initiatives

• Lean management to pursue operating excellence

(1)

1. Net of pass-through and non recurring items

Core business costs

flat in real terms

2021

CNG and

SGS

New businesses and services expected

to generate additional margins

Total costs trend

26

27

Regulatory framework in Italy and Europe

Update every three years of WACC parameters

Regulatory period

WACC Regulatory period

STORAGE

TRANSPORT

REGAS.

5° regulatory period

5° regulatory period

2016 2017 2018 2019 2020

4° regulatory period

4° regulatory period

4° regulatory period

2021 2014 2015

5° regulatory period

5.4% real pre-tax

6.6% real pre-tax

6.5% real pre-tax

Italy: inflation & spread linked, risk free floor

Europe: good visibility on new regulation in transport

in France and Austria

IUK

Transport

TIGF

Transport

Storage

Exemption

regime

Regulated

regime

Negotiated

regime

TAP

Transport

Exemption

regime

TAG

GCA

Transport

Regulated

regime

2016 2017 2018 2019 2020 2021

Regulated regime after

long term contracts expiry

Fully inflation-linked RAB

Long term contracts

Inflation-linked Equity RAB

Potential evolution to a

regulated regime

28

Robust growth to 2021

1. Total RAB evolution calculated assuming an average annual inflation rate of ~1% and according to current regulatory framework

1%

Sustainable organic growth in the asset base and attractive returns

Storage Transport & LNG

15.3

4.1

2016E 2021E

19.4

Consolidated RAB1 (€bn) EBIT (€bn)

1%

2016 2021E

1.34

Net income (€m)

4%

2016 2021E

845

CAGR

2016-2021

5%

2016 guidance (€800m)

29

2017 guidance and growth targets

Guidance 2017 Targets

€ ~19.8 bn Consolidated RAB 1%

€ ~1.3* bn Investments €5* bn

Net income € 0.9 bn CAGR to 2021

2017-2021

CAGR to 2021

4%

Net debt € 11.5** bn

* Including TAP equity investment

** Including TAP true –up of about €0.3 bn

Debt/RAB*** at 2021 in line with YE 2016

Commitment to current credit rating metrics

DPS € cent 21.55 DPS cagr 2016-2018

Interim dividend from 2018 +2.5%

*** Including associates

Investment criteria

30

Investment approach

Financial flexibility H1 2016

Already invested or earmarked

Criteria

• Committed to current credit rating metrics and risk profile

• Accretive returns (risk adjusted returns at least in line with

Italian regulated assets)

Industrial

• Enhance existing infrastructure

• Leverage industrial capabilities

• Unlock additional growth/optionality

Financial

• Dividends

• Buyback (duration to be extended)

• Additional capex of € 400mln on

Italian infrastructure vs prior plan

• Share buy back activated

and € 233mln completed to date

• GCA acquisition

Additional opportunities

03.

31

32

Improving context: gas demand recovery in Italy and Europe

30.5 30.1 29.9

16.3 16.0 16.7

17.9 20.6 23.3

2.0 2.0 2.0

2014 2015 2016 2017E

Residential

& commercial

Industrial*

Thermoelectric

Other Sectors

Italian gas consumption

+4.7%

71.9 68.6

* Includes: NGV, Agriculture and Non-Energy Use

Source: National Transport Network Balance, Istat, Centro Studi Confindustria

66.7

+3.1%

162.6 173.4 179.8

124.2 121.9 122.8

114.2 121.1 138.2

18.5 20.6

20.6

2014 2015 2016 2017E

461 437

+5.0%

EU gas consumption

420

+4.2%

Demand peak reached in January 2017

(426 mcm/day, 91% of historical max)

bcm Weather adjusted, bcm

33

Demand will be supported by evolution in environmentally-friendly technologies

Availability

• Abundance of resources

• Well developed gas infrastructure

Environmental

sustainability

• The quickest and cheapest route

to decarbonisation

• The quickest and cheapest route

to reduce urban pollution

Efficiency

• Limited additional infrastructure

requirements

• Biomethane is a CO2 neutral renewable and

programmable gas source, using existing

infrastructures

• CNG vehicles are an immediately available

solution to reduce urban pollution

• Growth expected in Italy following the

adoption of the DAFI (EU directive on

alternative fuels).

• SSLNG is an efficient and economical

solution to reduce emissions in the maritime

and heavy-duty transportation sector and to

displace more polluting fuels in isolated areas

• Compliant with DAFI and IMO regulations

Natural gas advantages Natural gas technology evolutions will support penetration

New supply sources, interconnections required to meet import requirements

Global LNG supply - (Load factor: 85%)

High demand1

LNG global oversupply

0

200

400

600

800

'15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '27 '29 '31 '33

360

1. CAGR 2015-2025: 8.1% in High, 5.3% in Base, 2.5% in Low demand scenario

Base demand1

Low demand1

Potential sources of gas

RUSSIA

NORTH

SEA

NORTH

AFRICA

CASPIAN SEA &

MIDDLE EAST &

EAST MED

Single market opportunity:

• Greater Interconnections

• Higher Flexibility

• Security of supply

• Lower prices

LNG

34

Bcma

Additional potential growth opportunities

• New regasification capacity

• Small scale LNG

• Building the backbone in Sardinia

• Maintenance and further replacement of fully

depreciated pipelines

• Additional expansion of CNG network beyond 2021

Main opportunities in Italy

• Integration of European markets

• New infrastructure connecting sources to markets

• Additional national infrastructure requirements

Main opportunities abroad

East

Mediterranean

Production

TANAP TAP

TransMed

Green Stream

Reverse

flow

STEP

TurkStream

French

Market Area

unification

35

Concluding remarks 04.

36

37

Concluding remarks

Growing organic capex plan with fair regulation

New stream of asset-light services

Well positioned to capture additional accretive opportunities

Superior long-term returns with low risk profile

Operational excellence and efficiency

Strict financial discipline

38

Disclaimer

Franco Pruzzi, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative

Decree n. 58/1998, that data and information disclosures herewith set forth correspond to the company’s evidence and accounting books and entries.

This presentation contains forward-looking statements regarding future events and the future results of Snam that are based on current expectations, estimates,

forecasts, and projections about the industries in which Snam perates and the beliefs and assumptions of the management of Snam.

In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk

management are forward-looking in nature.

Words such as ‘expects’, ‘anticipates’, ‘targets’, ‘goals’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, variations of such words, and similar expressions

are intended to identify such forward-looking statements.

These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to

events and depend on circumstances that will occur in the future.

Therefore, Snam’s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or

contribute to such differences include, but are not limited to, economic conditions globally, political, economic and regulatory developments in Italy and internationally.

Any forward-looking statements made by or on behalf of Snam speak only as of the date they are made. Snam does not undertake to update forward-looking

statements to reflect any changes in Snam’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is

based.

The reader should, however, consult any further disclosures Snam may make in documents it files with the Italian Securities and Exchange Commission and with the

Italian Stock Exchange.

snam.it

Full-year 2016 results and 2017-2021 plan update

London, March 7th, 2017