1Q 2012 Consolidated Results (May 15, 2012)

1Q12 CONSOLIDATED RESULTS MAY 15th 2012

1Q12 Consolidated Results

Investor Relations 1

Giuseppe Saponaro Chief Financial Officer

MAY 15th, 2012


� HIGHLIGHTS 3

� 1Q12 RESULTS 4

� ANNEXES 10

Agenda



Highlights1Q12 at a Glance

+12.2% yoy

at 432€mn

Total Revenues

P&L RESULTS BALANCE SHEET INVESTMENTS

Total Group Capex

246€mn

-22€mn vs. 1Q11

Net Debt Continuing Operations

5,273€mn

+150€mn vs. FY11


EBITDA

+15.3% yoy

at 340€mn

Net Income Cont.Op.

+19.8%* yoy

at 114€mn

* Vs Net Income 1Q11 adjusted applying Robin Hood Tax

Rating

Single A Area


12 3 142 -1

1Q12 ResultsConsolidated Revenues

Total Revenues

Revenues Evolution *

+12.2% yoy

at 432€mn

Grid Fee

Revenues Breakdown*

Other Activities

+9.3% yoy

at 384€mn

432

Stable yoy at 15€mn

+47


352384

19

3310

12

4

3

1Q11 1Q12Grid Fee Other Energy ItemsNon Regulated Revenues Other Revenues

385

43233

14

1Q11 Grid Fee Other Energy Items

Non Regulated Revenues

Other Revenues

1Q12

Other Activities

385

In € mn

47

* In resolution n° 11/07 the Regulator redefined the perimeter of Terna’s activities for the Fourth Regulatory Period, moving the Energy Operation

Activities from Transmission to Dispatching


1Q12 ResultsConsolidated Costs & EBITDA

Costs Evolution

Total Operating Costs

+2mn yoy

at 92€mn

EBITDA

Costs Breakdown

EBITDA Margin

+15.3% yoy

at 340€mn

92

78.7%

2 -1+2


52 52

31 33

8 7

1Q11 1Q12

Salaries

Services

Other

9092

In € mn

90 92

02 -1

1Q11 Salaries Services Other 1Q12

+2


1Q12 ResultsFrom EBIT to Net Income

EBIT

+20% yoyat 239€mn

Profit Before Taxes

+19% yoy

€ mn 1Q11 1Q12 ∆ ∆ %

D&A 95 101 6 6.3%

EBIT 200 239 39 19.6%

Net Financial Expenses 25 31 6 23.5%PBT 174 208 33 19.0%


Net Income Continuing Operations 114 114 0 0.2%

Net Income Adj. Continuing Operations 95 114 19 19.8%

Net Income Discontinued Operations 59 0 -59

Group Net Income 173 114 -59 -34.1%

+19% yoy

at 208€mn

Tax Rate Impacted by

Robin Hood Tax

Net Income Cont. Op.

+20% yoy2

at 114€mn

PBT 174 208 33 19.0%

Tax Rate 34.6% 45.0% +10.4 pp

Taxes 60 93 33 54.6%

1 Including 0.4 €mn restated for redemption of goodwill

2 Vs Net Income 1Q11 adjusted applying Robin Hood Tax

1

1

2


1Q12 ResultsCapex Breakdown

Total Regulated Capex

Capex Regulated Activities€ mn 1Q11 1Q12 ∆ yoy ∆ % yoy

Incentivized Capex

82% of Reg. Capex

at 192€mn

€mn

Stable yoy at 232€mn


18%

45%

37%

I1 I2 I3

232€mn

€ mn 1Q11 1Q12 ∆ yoy ∆ % yoy

I3 127 87 -40 -32%

I2 63 105 42 68%

I1 41 41 0 -1%

Total Regulated Capex 231 232 2 1%

Other* 37 13 -23

Total Group Capex 267 246 -22 -8%

*Not included in RAB + Capitalized Financial Charges + Non Traditional Capex


15%

Terna SpA Bonds

EIB Loans

Banks LT+ST

Net Debt Evolution & Financial Structure

Net Debt Evolution

Net Debt

5,273€mn

Fix/Floating Ratio

73/27%

+150

Financial Indebtedness€mn

Avg. Maturity

9 years

1Q12 Results


67%

18%

* Including Other Fixed Assets Changes

Dec.31, 2011

Operating Cash Flow

∆ WC & Other

Capex * March 31, 2012

Rating4923 4923 5026

5,273 5,123

201 106 245

S&P

Moody's

Fitch

Outlook

Negative

Negative

Negative

M/L Term

A-

A3

A


THANK YOU.QUESTIONS?


Giuseppe Saponaro Chief Financial Officer

1Q12 Consolidated ResultsMAY 15th, 2012

QUESTIONS?


ANNEXES



AnnexesElectricity Market Trends

1Q12 Energy Demand

-1.9% yoy -0.3% 12 months rolling

TWh

1Q11 1Q12 ∆ % Demand TWh 84.7 83.0 -1.9%

YtD ∆ %

Demand TWh -2.9%Jan/Apr 11 Jan/Apr 12

110.8 107.6

31

32 Range last 5 years

12 Months Rolling

Yr -1


24

25

26

27

28

29

30

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Yr -1

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar AprYoY Chg% 2.1% 1.1% -3.9% 4.5% 6.1% -1.3% -1.9% -5.0% -2.6% 2.2% -5.2% -6.2%


€ mn 1Q11 1Q12 ∆mn ∆%

Operating Revenues 385 432 47 12.2%of which

Grid Fee 352 384 33 9.3%Other Energy Items 19 33 14 70.8%

Other Activities 14 15 1 3.6%

Operating Expenses 90 92 2 2.0%of which

Salaries 52 52 0 0.2%Services 31 33 2 7.1%

AnnexesConsolidated Income Statement


Services 31 33 2 7.1%Other 8 7 -1 -6.7%

EBITDA 295 340 45 15.3%

D&A 95 101 6 6.3%

EBIT 200 239 39 19.6%

Financial Income & Equity Inv. 11 16 6 53.3%

Financial Charges 36 47 12 32.4%

Pre Tax Profit 174 208 33 19.0%

Taxes 60 93 33 54.6%

Tax Rate (%) 34.6% 45.0%

Net Income Continuing Operations 114 114 0 0.2%

Net Income Discontinued Operations 59 0

Total Net Income 173 114 -59 -34.1%

*

*

* Including 0.4 €mn restated for redemption of goodwill


IFRIC 12 Annexes

€ mn 1Q11 1Q12 ∆

Operating Revenues 385 432 47of which

Grid Fee 352 384 33Other Energy Items 13 27 14Other Activities 14 15 1IFRIC 12 6 5 -1


IFRIC 12 6 5 -1Operating Expenses 90 92 2

of whichSalaries 50 50 0Services 27 30 2Other 7 7 0IFRIC 12 6 5 -1


AnnexesConsolidated Balance Sheet

*

€ mn FY11 1Q12 ∆mn

AssetsPP&E 8,618 8,767 149Intangible Asset, net 471 465 -6Financial Inv. And Other 74 75 1

Total Fixed Assets 9,163 9,308 144Net WC -724 -621 103


Net WC -724 -621 103Funds -565 -551 14

Total Net Invested Capital 7,874 8,136 262

Financed by

Consolidated Net Debt 5,123 5,273 150

Total Shareholder's Equity 2,751 2,863 112

D/E Ratio Continuing Operations 1.86 1.84

Number of Shares ('000) 2,010 2,010


€ mn 1Q11 1Q12

Net Income 114 114Depreciation 94 100Net Change in Funds -13 -14

Operating Cash Flow 196 201

Change in Working Capital 42 -103

Cash Flow from Operating Activities 237 97

AnnexesConsolidated Cash Flows

*


Cash Flow from Operating Activities 237 97

Capital Expenditures -267 -246

Other Fixed Asset Changes -35 1

Free Cash Flow -65 -148

Dividends 0 0Change in Capital and Other 30 -3PV Disposal 209 0

Change in Net Cash (Debt) 173 -150

* Net of assets’ disposal


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Disclaimer


EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, ANDCANNOT BE INTERPRETED AS A PROMISE OR GUARANTEE OF WHATSOEVER NATURE.

HOWEVER, FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES AND ARE CURRENT ONLY AT THEDATE THEY ARE MADE. WE CAUTION YOU THAT A NUMBER OF FACTORS COULD CAUSE THE COMPANY’S ACTUAL RESULTS ANDPROVISIONS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORSINCLUDE, BUT ARE NOT LIMITED TO: TRENDS IN COMPANY’S BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS,CHANGES IN THE REGULATORY ENVIRONMENT, DIFFERENT INTERPRETATION OF THE LAW AND REGULATION, ITS ABILITY TOSUCCESSFULLY DIVERSIFY AND THE EXPECTED LEVEL OF FUTURE CAPITAL EXPENDITURES. THEREFORE, YOU SHOULD NOTPLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. TERNA DOES NOT UNDERTAKE ANY OBLIGATION TOUPDATE FORWARD-LOOKING STATEMENTS TO REFLECT ANY CHANGES IN TERNA’S EXPECTATIONS WITH REGARD THERETO ORANY CHANGES IN EVENTS.

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Investor Relations 17Investor RelationsInvestor Relations 17

Head of Investor Relations – Antonio Colombi – [email protected] Assistant to the CEO – Elisabetta Colacchia – [email protected]

Economy & Finance

1Q 2012 Consolidated Results (May 15, 2012)