A2A ENVIRONMENT BU · Sources: A2A Strategic Plan 2015 Results & Business Plan Update; Company Annual Reports; CONSOB (shareholding structure updated at 30 September 2016) CURRENT

This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.

A2A ENVIRONMENT BU

Fulvio Roncari - General Manager, A2A Environment BU

October 2016

2


A2A AT A GLANCEThe leading Italian Multy-Utility

A2A FootprintA2A FOOTPRINTFINANCIAL HIGHLIGHTS

DIVERSIFIED BUSINESS PORTFOLIO

Sources: A2A Strategic Plan 2015 Results & Business Plan Update; Company Annual Reports; CONSOB (shareholding structure updated at 30 September 2016)

CURRENT SHAREHOLDING STRUCTURE100%: # of shares 3,132,905,277

Total

A2A Spa (treasury shares) 0.8%

Norges Bank 3.0%

Municipality of Brescia 25.0%

Municipality of Milan 25.0%

Free Float 46.2%

53.8% 100.0%46.2%

4.9 €BRevenues

1+ €BEBITDA

2.2 €B Capex 2016-20

ENVIRONMENT

210 €M

20%

NETWORK &HEATING

356 €M

34%

GENERATION& TRADING

340 €M

33%

ENERGYRETAIL

90 €M

9%

EPCG

(Montenegro)

53 €M

5%

EBITDA

MONTENEGRO

Focus in Northern Italy withpresence in Montenegro

Technological Partnerships inwaste sector in UK, Spain,Greece

ITALY

3


100%

100%

51%

Main controlled companies: Rieco (100%) Resmal (100%) Galli Ecologistica (100%) Resmal Ecologistica (100%) Ecolombardia 4 (69%) SED (80%) ASRAB(70%) Bioase (70%)

Bellisolina (100%)

Treatment, recovery, disposal,engineering, sales andindustrial waste management

Municipal Solid Waste (MSW)collection and street cleaning

100% 90%

ENVIRONMENT BU & A2A AMBIENTE GROUP

Environment division

64%

4


Collection56%

Treatmentand

other44%

ENVIRONMENT BU – KEY NUMBERS

Financial Highlights* 2015

Revenues 810

EBITDA 210

EBIT 147

CAPEX 59

Net capital invested 281

Over 3 million people served with MSW management and street cleaning

Over 4,600 employees

4.9 million ton overall managed waste (collection + treatment + disposal)

1.6 billion kWh electric energy recovered from waste

1.1 billion kWh heat energy recovered from waste

Collection33%

Treatmentand

other67%

RevenuesRevenues EBITDAEBITDA

Collection14%

Treatmentand

other86%

Net capital investedNet capital invested

*Pro forma data

5


A2A ENVIRONMENT BUSINESS MODEL

BU Environment operates along the whole waste management value chain, including engeneering activities and R&DBU Environment operates along the whole waste management value chain, including engeneering activities and R&D

A2A AMBIENTE BUSINESS MODEL

COLLECTION RECYCLING & TREATMENT WtE LANDFILLFINAL ENERGY

RECOVERYFINAL ENERGY

RECOVERYACTIVITY

PROCESS

URBANWASTE

INDUSTRIALWASTE

OUTPUT OFPROCESS

Selection-recyclingplants

Wastecollectionand streetcleaning

Sorted

Unsorted

Compost, glass,paper/cardboard,

plastic, inertmaterials

MBT plants andSRF productionplants

Biodryedmaterials

Waste to Energyplants

Heat and power

Residual andashestreatment

Residual waste,intert materials

and metals

Landfill

Biogas

Powerproductionfrom biogasplants

Power

6


0

1,000

2,000

3,000

4,000

5,000

6,000

A2AAmbiente

HeraAmbiente

Ama Iren Ambiente Acea

kto

n

Treated waste

0

1,000

2,000

3,000

4,000

5,000

A2AAmbiente

HeraAmbiente

Ama IrenAmbiente

Acea

kin

hab

itan

ts

Served inhabitants

BENCHMARK IN ITALYMain Italian Multy-Utilities comparison

A2A Ambiente (including LGH)

Hera Ambiente

Iren Ambiente

Ama

Acea

*th

ird

par

typ

lan

tsex

clu

ded

Sou

rce:

Sust

ain

abili

tyre

po

rt2

01

5

LGH

LGH

0

50

100

150

200

250

A2A Ambiente HeraAmbiente

Ama Iren Ambiente Acea

M€

EBITDA 2015

LGH

Only treatment

*

7


WASTE MARKET CONTEXT

• MSW production: 29.6 Mt/y (488 kg/p year )

Separate collection: 13.4 Mt (45.2%):

Differences across the regions : 56.7%

North, 40.8% Center, 31.3% South

• Commercial and Industrial Waste

production: 80.9 Mt/y (excluding

Construction and Demolition)

Hazardous waste: 8.8 Mt

Italian MSW market size 2014Italian MSW market size 2014Italian Waste production 2014Italian Waste production 2014

Total Wasteproduction:160 Mt/y

MSW CollectionMSW CollectionMSW TreatmentMSW Treatment

Industrial Waste ManagementIndustrial Waste ManagementMaterial RecoveryMaterial Recovery Energy RecoveryEnergy Recovery

Waste sector will be analysed following its main segments:

MSW18%

Hazardous6%

C&D31%

Other nonhazardous

38%

From MSWtreatment

7%

8


WASTE MARKET KEY ELEMENTS

General OverviewGeneral Overview

Multitude of operators, which includes big multi utilities andsmall companies

Business fragmentation: few operators oversee the entire valuechain

Relevant % of inefficient operators in term of reliability and/orinvestment capabilities

Strong dependence on landfills

Lack of suitable facilities, in terms of number and average sizeof facilities, irregular distribution (less investments in territorieswith more lack in plants presence)

Regulatory uncertainty not allowing the definition of medium tolong term plans

Source: WAS Althesys La trasformazione dell’industria Italiana del Waste Management

Top 75 operators MSW sector

Revenues(B€)

6.4 68% of Italian sector

Inhabitants served(M)

35.759% of the Italianpopulation

Waste managed(Mt)

17.961% of the total MSWItaly

MSW treatment trend in ItalyMSW treatment trend in Italy

Trend of waste management:

slow reduction of landfill, however Italy is stillstrongly depending on landfills (31% of wastelandfilled),

Differences across regions 19% North, 32%Center, 49% South

Increase of recovery Slow increase in WtE

WtE20%

Landfill31%

Treatmentfor

recovery49%

Source: Ispra Rapporto rifiutispeciali 2016 and Rapportorifiuti urbani 2015

1/3 of top 75 operators are BigMultiutilities

9


WASTE MARKET SEGMENT: COLLECTION

Top Big Medium/Big Medium Small

Number of operators 4.1% 4.3% 9.7% 30.5% 51.4%

Revenues 40.0% 13.1% 15.4% 22.0% 9.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Top RV>100M€

Big 50<RV<99 M€

Medium/Big 25<RV<49M€

Medium 10<RV<24M€

Small RV<10M€

Operators Structure: Green Book Utilitalia 2016

Number of operators 2013: 463

Variety of operators in term ofsize, business field and results

64% of in-house providingservices: new tenders for servicesor private partners selectionexpected

Multi years exclusivecontracts with public authorities(5-10 years)

MARKET KEY ELEMENTSMARKET KEY ELEMENTS

Focus In house:up to 60% in Friuli, Veneto,Emilia Romagna, relevant in

Piemont, Lombardy andTuscany

Source: AGCM Indagineconoscitiva IC49

10



2016 Collectedwaste

kt

Inhabitantsserved

kp

Amsa 803 1,600

Aprica 409 960

Aspem 57 140

LGH* 270 560

Total 1,539 3,260

A2A POSITIONINGA2A POSITIONING

2015 – A2ARevenues: 456 M€Ebitda: 69 M€Ebitda margin: 15%

18% of Lombardymunicipalitiesserved by A2A

33% of Lombardyinhabitants

served by A2A

0%

20%

40%

60%

80%

Bergamo Varese Como Cremona Milano Brescia

A2A SEPARATE COLLECTION RATE

Italy 45.2%

Full integration along the waste value chain

Integrated global service to communities andbusiness

Tailor-made solutions for community needsand capacity to provide cost-effective solutions

*From 2016

11


Reinforce leading position in Italylevering on geographic proximity:

Improving services efficiency andsustainability by applying newtechnologies

Benefit form vertical integrationsupporting A2A’s collection serviceslevering on owned recovery andtreatment facilities and securingcontracts for the supply of waste to thetreatment plants

More inhabitants served with collection and streetcleaning: +100,000 inhabitants every year by tendering in

target selected areas able to guarantee certainty ofpayment

BP Target : covering more than 3,2 million

+560 kpM&A operation

People served by LGH Group


+200 kpAwarded tenders

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2014 2015 and 2016 @2020

Pe

op

lese

rve

d(k

p)

DELIVERING OUR PLAN: @ 2020DELIVERING OUR PLAN: @ 2020

BP Target

2,700 Kp3,200 Kp

3,800 Kp3,400 Kp

12


WASTE MARKET SEGMENT: MSW TREATMENT

Infrastructure gap between north andsouth in term of capacity and efficiency

Strong “NIMBY” attitude: difficultiesto obtain new plant authorizations

Infringements proceeding for failure tocomply with EU regulations on wastemanagement

No Landfill tax (or too low value)make landfill an ‘unfair’ competitor

Middle term exclusive contracts (1-2years) with public authorities orcollection operators

MARKET KEY ELEMENTSMARKET KEY ELEMENTS WtE plants (MSW and Refuse Derived Fuel)Italy 2014: 44 plants (66% located in north IT)

Source: Ispra report 2015

13


SELEZIONEMATERIALI

ALTAEFFICIENZA

EU top 8 = Germany, Switzerland, Belgium, Sweden, Netherland, Norway, Denmark, Austria

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

The goal of reducing landfill disposal at minimum has beenobtained through synergic and simultaneous increase of both

material recovery and energy recovery.

RECOVERY AND OTHER TREATMENTSWTELANDFILL

WASTE MARKET SEGMENT: MSW TREATMENTEvolution of National waste managemet systems - EU Top 8

14


0%

20%

40%

60%

80%

100%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*

Comparable toGermany in 1999

45 %

35 %

20 %

* Source: Ispra report 2015

RECOVERY AND OTHER TREATMENTSWTELANDFILL

WASTE MARKET SEGMENT: MSW TREATMENTEvolution of National waste managemet systems -Italy

15


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

100%landfill100%

landfillZero

landfillZero

landfill

TREATMENT

Best EU casesshow that

countries withthe highest rates

of energyrecovery alsotend to havehigh rates of

recycling

Recycling WtE Landfill

BENCHMARKING EUBENCHMARKING EU

Waste treatment balance


Source: www.ec.europa.eu/eurostat

16


TREATMENTWASTE MARKET SEGMENT: MSW TREATMENT

Differences from Italian Government estimation mainly due to:

Italian Government estimation (Unlocked Italy Decree) foresee a GAP of WtE of 1.8 Mt. However anestimation from Milan Politecnico* foresee a gap of more than 6 Mt.

Italian Government defines a 3 Mt GAP for Anaerobic Digestion and Composting

*Source: Politecnico Milano Leap Valutazione Preliminare del fabbisogno nazionale di capacità di Termodistruzione

SECTOR CAPACITY GAP CAPEX

WtE (according to Politecnico of Milanstudy)*

6 Mt * 6 B€

Composting and Anaerobic Digestion(according to DPCM march 7 2016)

2.1-3 Mt 1-1.5 B€

Material recovery (A2A estimation) 1.3 Mt 1 B€

PoliMI ESTIMATION EFFECT

Rejects from separate collectiontreatment

20% of separate collection +2Mt

Separate collection rate 65% Overall Italy +1Mt

Destination of rejects from MBT WtE in order to reach zero-landfill

+1.2Mt

17




WtE capacity up to 2.4 Mt/y of which1.75Mt/y in owned plants (3 largest ItalianWTEs)

Wide range of different technologies forrecovery of 500 kt/y

10 patented MBT plants Financial reliability and capacity to

invest in new assets Proven technical capabilities in R&D and

EPC for selection of the state of arttechnologies

7WtE10 MBT plants11 Material Recovery Plants

2015 – A2ARevenues: 320 M€Ebitda 2015: 135 M€Ebitda margin: 42%

Well placed tohelp bridge the

structuraldomestic

infrastructuregap in wastetreatment

18


0

200

400

600

800

1,000

1,200

2015 2016 @2020

350

+250

1,100


Became a leader in recovery of materialby building new assets and selectiveacquisitions Increased recovery capacity +750k/t

(+210% recovery capacity Plastics, Paper, Foodwaste)

Reinforce energy recovery leadingposition in Italy by building new assets Increased in WtE capacity +400 kt/y

(+20% capacity)

2,000

+4002,820

2015 2016 @2020

+165 kt Plants efficiencyFlow Optimization Brescia and Milan WtEs

+255 kt2 projects ongoing

Corteolona: VIA already obtained San Filippo del Mela

M&A LGH

ENERGY RECOVERY

MATERIAL RECOVERY

M&ARieco-RESMAL paper 200kt

(completed)LGH paper/plastics 53kt

(completed)

+128 ktPlants efficiencies

Castenedolo 100kt -Astiglass 20kt - Other 8kt

+375 kt

(45kt each)

+375 ktFive plants already

designed for materialtreatment after separate

collection including 2plants for plastics

selection withauthorization already

presented in Q3 2016 -(45kt each)


2014

2014

19


Few operatorsNational and International Market

Multitudes of operatorsMainly Local Market

Many operatorsMainly National Market

Extremely fragmented marketacross each stage (horizontally)

Multitude of small operators thatmanage less than 50kt/y

Limited availability of final plantscause dependence on foreign plants

Short term non-exclusive contract(1y or less) with private clients

MARKET KEY ELEMENTSMARKET KEY ELEMENTS

WASTE MARKET SEGMENT: INDUSTRIAL WASTE

*Source: A2A Ambiente Industrial waste Commercial Department

BrokerageBrokerage StorageStorageDedicatedtreatmentDedicatedtreatment

Disposal

Recovery

Disposal

Recovery

€/t

20



Biggest WTE for Industrial and Hazardous waste in Filago (BG)

Market leader in final treatment for hazardous waste covering more than37% of Italian capacity

Financial resources and ability to develop and manage different plants andpartners

Client oriented approach offering waste management and consultancyservices focused on guarantee environmental compliance

230 kt treated in 2015

2015Revenues: 33 M€Ebitda 5.3 M€Ebitda margin: 16%


21



Reinforce leading position in Italylevering on: Increase capacity in storage and

pretreatment through M&A operations

Partnership with EU big operators toenforcing market position

Increase presence on Italian Marketfor Hazardous Wte from 37% up to44% thank to technological optimizationof existing asset

Operational excellence:standardization of operating process andcreation of a global organization forcommercial development, target:developing new offers covering thewhole waste production


230

+163

568

2015 2016 @2020

+174 kt Plants efficiencies :Wte Filago 25kt

Inertization plant Giussago 45ktSED platform revamping 95 kt

Other 9kt

+163kt from M&ALGH landfill 100kt (2016 completed)

LGH liquid waste treatment plant 63kt (2016completed)

BusinessPlan target400 kt

22


MAIN R&D PROJECTS

End of Waste for RDF

A2A (together with Buzzi Unicem) obtains

first registration @EU REACH product

database of RDF-EoW produced by

treatment of MSW

Strategic collaboration with Buzzi-Unicem

group as end user

New projects for implementing production

plants in direct connection with cement kilns

(50kt/y expected in 2018)

End of Waste for fly ashes

Finalized construction of a testing plant in

order to obtain inert material for

construction from WtE fly ashes and salt for

de-icing on streets

Ongoing preliminary testing

Testing physical /chemical characteristics of

products

If positive result of testing phase production

of industrial scale plants will be defined

A2A draws on a network of expertise focused on ensuring sustainable waste management byimplementing new technologies and process

Current target: development of a market for products

obtained with recycled material

Reaching end-of waste target to allow puttingon market recycled materials at any effect(legally and commercially) as ’products’.

23


Key player in the domestic market

Critical mass from a perimeter enlargement

Strong diversification along the value chain

Some excellences/competitive edge:

First operator in WtE

Higher value/technology for waste

collection, treatment and disposal

Tangible growth opportunities

Supportive domestic scenario for infrastructuredevelopment and consolidation

Strong commitment to Sustainability

Deliveringquality andgrowth toincrease

shareholdervalue

KEY INVESTMENT HIGHLIGHTS

24


CONTACTS AND IR PRODUCTS

This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither it nor any part of it shall form the basis of or be relied

upon in connection with any contract or commitment whatsoever. Some information contained herein and other material discussed at the meetings may include forward-looking information based on A2A’s current beliefs and expectations. These statements

are based on current plans, estimates, projections, and projects and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could

cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to changes in global economic business, changes in the price of certain commodities including electricity, gas and coal,

the competitive market and regulatory factors. Moreover, forward-looking statements are current only at the date on which they are made.

A2A Investor Relations Team

Mail: [email protected]

Phone: +39 02 7720 3974

http://www.a2a.eu/en/investor/

a2a

2016

InvestorGuidebook

InvestorDatabook(excel file)

Concise and thorough insight in the A2A Group in the form of a longpresentation divided into three main parts: Our World, Our Resultsand Our Responsibilities. The selected contents are all publiclyavailable information, which you may find spread across a largenumber of Company documents

• Historical economic, financial and operational company data as of2008 – on annual and quarterly basis

• Economic, financial and operational data useful for building A2Aearnings model – 2015 FY reported and 2016-20 BP forecast

• Tables of the Investor Guidebook mainly relevant to aquantitative analysis

Periodic update service for investors

and analysts on the significant steps of

A2A Business Plan – such as relevant

investments, new projects,

achievements, contracts, agreements.

If you wish to subscribe to the service,

please visit A2A website at the

following link

http://www.a2a.eu/en/investor/overvi

ew/newsletter/

Brief and synthetic document that shows the highlights and the strengthsof A2A business model

Moreover A2A publishes the following documents in the Investor Library Section on A2A website:• Overview of the Italian Energy Market (yearly basis)• Notes on energy and environmental markets (quarterly basis)Both documents are prepared by the Market Analysis, Modeling and Pricing Unit of A2A

Newsletter

Publications

The publications are available at the following link: http://www.a2a.eu/en/investor/guidebook/

a2a

2016

CompanyProfile

http://www.a2a.eu/en/investor/overview/newsletter/

http://www.a2a.eu/en/investor/overview/newsletter/

http://www.a2a.eu/en/investor/guidebook/

Documents

A2A ENVIRONMENT BU · Sources: A2A Strategic Plan 2015 Results & Business Plan Update; Company Annual Reports; CONSOB (shareholding structure updated at 30 September 2016) CURRENT