COMPANY PROFILE 2020
INFORMATION AS OF 31/12/2019
| 1 ABOUT US • Edison is the oldest energy company in Europe • It is active in the generation and sale of electricity, in the supply, distribution and sale of gas as well as in providing energy and environmental services to end users. • It oversees integrated activities throughout the electricity and mid-stream gas value chains and aims to be a leading player in the country’s energy transition. It has the target of generating 40% of the production mix from renewable sources by 2030, and is working on the construction of two latest-generation combined cycles able to complement renewable production. • It is committed to the diversification of gas procurement sources and routes for the safety and competitiveness of the national system and to promoting alterative responsible uses of gas for the benefit of the decarbonization of the transport sector. • Since 2012, it has been controlled by the EDF (Electricité de France) Group(1), European leader in the electricity sector and a key actor supporting the transition towards a low-carbon energy future. • The brand platform “Building a sustainable energy future together” underpins Edison's goal of being an efficient and responsible power Company with a sustainable development model.
2019 data (1) EDF owns 97.4% of Edison’s share capital (99.5% of the voting rights)
Company Profile 2020 | 2 MILESTONES Edison was Italy's first electricity company and is also one of the oldest energy providers in the world: 1883 The first facility in continental Europe for the commercialisation of electricity is built at the Santa Radegonda theatre in Milan. 1884 6 January: the “Società Generale Italiana di Elettricità Sistema Edison“ is founded. 1931 Edison supplies gas to households in Milan. 1962 Following the nationalisation of the electricity sector, Edison begins to produce its own electricity. 1966 Montecatini and Edison finalise merger. Montedison becomes a major operator in the chemicals industry. 1979 SELM (Servizi Elettrici Montedison) is founded. 1999 With the introduction of the Bersani Decree, Edison moves into free energy market. 2002 Montedison, Edison, Sondel and Fiat Energia merge to create the “new” Edison. 2005 Control of Edison transferred to Transalpina di Energia, a joint venture between Electricité de France and Delmi, a group of Italian investors led by A2A. 2008 Edison enters the residential electricity market and launches gas supply offer for Italian families. 2012 Edison’s ownership structure changes again and the company is now controlled by EDF (99,48%) 2015 Creation of the new renewables “hub” E2i Energie Speciali. 2016 On November 7, Edison launches new brand to build up business strategy 2017-18 Focus on added-value service offering and strengthening of the position in the retail market through the acquisition of Gas Natural Italia and Zephyro 2019 Edison becomes the second player in wind generation in Italy and strengthens its positioning in the PV sector thanks to the Acquisition of EDF EN Italia. It starts constructing two latest generation CCGT plants with high efficiency and low environmental impact in Porto Marghera (brownfield) and Presenzano (greenfield) 2020 Edison is granted by EIB the first Green Framework Loan in Italy. 300 mln euros for the development of a portfolio of renewable and energy efficiency projects
Company Profile 2020 | 3 PRESENZA OPERATIVA
Sedi e uffici Edison Centri stoccaggio gas Officine Edison Deposito GNL in costruzione Siti operativi di servizi ambientali Deposito GNL autorizzato Siti produttivi gestiti (tramite Fenice e Edison Energy Solutions) Elettrodotto Centrali termoelettriche Gasdotto in costruzione Centrali idroelettriche Gasdotto in progetto OPERATIONAL PRESENCE Campi eolici (tramite e2i) 30.000 mc - 1 in costruzione Impianti fotovoltaici 174.000 mc - 1 in costruzione
46
2 64
oltre 20 3
40 1
14 1
93 1
Poland The Netherlands 4 Belgium
Switzerland 3
Italy Bulgaria
IGB Spain 6 POSEIDON 2 GALSI Greece
EASTMED
Company Profile 2020 | 4 SUSTAINABILITY POLICY TARGETS
Sustainability and Sustainability of company Close to customers Fight climate change biodiversity preservation processes and markets
DIGITAL: at least 30 digital SMART BUILDING: at least 30 At least 3 initiatives to protect RENEWABLES: 40% of production transformation projects by 2021. smart building initiatives through habitats and enhance biodiversity, by 2030. the innovative BIM system by 2021. co-designed with local CO : specific emissions of the 2 CUSTOMERS: customer stakeholders, by the end of 2023. electric generation plants at 0.26 satisfaction high over time* and kg/kWh by 2030, participating establishment of a network of 400 in the Italian coal phasing out plan. regional contact points by 2021 to promote customer relationship.
Dialogue with stakeholders People and skills and shared designs as a platform to grow SDGs: at least two meetings of the INCLUSION: at least 2,000 SDGs@Edison stakeholder panel employees participating in per year, of which at least one in inclusion projects by 2021. the areas of interest. COLLABORATION: 70% of employees using social collaboration tools, by 2021. DIVERSITY: balanced pipeline of candidacies for promotion to managerial categories.
* NPS value > 6 Company Profile 2020 | 5 PRESENCE ALONG THE VALUE CHAIN
UPSTREAM MIDSTREAM DOWNSTREAM
POWER Power Generation Energy management Gas & Power Market
• One of the leading generators in Italy • Plants dispatching, 14.9 TWh 7.5 bcm 2 power portfolio • 8% market share in generation in Italy power sold to gas sold to optimization final customers residential and Installed capacity in Italy1-2 Power generation in Italy2 industrial 41.8 TWh customers handled 6.7 GW 21.4 TWh
1.5 mln power, gas and energy services contracts
4 pipeline 3 storage 20.0 bcm projects facilities in Italy handled 40 industrial sites 20+ mln sm of electric and of area under management 12.4 bcm/a 3,636 km • LT gas supply thermal generation l/m pressure • Development (o/w 6.4bcm LNG) management, logistics, 3 distribution of gas import Gas supply contracts sales to wholesalers pipelines 80 district heating 20 operating sites infrastructure 21% of Italian gas and thermoelectric plants plants for environmental HYDROCARBONS projects imports services 2,100 Gas midstream, energy management and optimization public and private managed structures
Energy & Environmental Services Market
2019 data (1) Edison also has a stake in 0.4GW CCGTs, two in Greece and one in Brazil, and in 0.1 GW hydroelectric plants in Switzerland; (2) Including power generation related to energy efficiency services offered to clients; Company Profile 2020 | 6 (3) Annual Contracted Quantities COMPETITIVE POSITIONING
21.4(1) TWh Edison accounts for 8% of overall production in Italy, third producer after Enel of electricity produced and ENI(2)
3 14.7 billion m Edison accounts for 21% of total imports in Italy, second importer after ENI(2) of gas imported
14.9 TWh Edison ranks second after the incumbent Enel in electricity sales in free market, of electricity sold to end users with a 6.5% market share(3)
3 7.5 billion m Edison ranks second after the incumbent Eni in gas sales to the end-users market, of gas sold to residential with a 13% market share(3) and industrial clients
1.5 million National operator with a strong positioning on the free market, leveraging on its well of contracts for the sale of power, known brand and high quality services gas and energy services
2019 data (1) Including electricity generation of Energy & Environmental Services (2) Source ARERA report 2020 (based on 2019 data), volume 1 page 89 and 216 respectively Company Profile 2020 | 7 (3) Source ARERA report 2020 (based on 2019 data), volume 1 page 149 and 260 respectively KEY ECONOMIC AND FINANCIAL DATA
(millions of Euros) 2019 (b-c) 2018 (a-b)
Sales revenues 8,168 8,728
EBITDA 587 426
Profit (loss) from Continuing Operations 98 93
Group net income (loss) (479) 54
Net cash flow during period 65 (300)
Net investments and net financial investments(a-d) 866 694
31/12/2019 (b-c) 31/12/2018 (b) Net invested capital 6,029 6,557 Net financial debt 516 416
Debt/Equity ratio 0.09 0.07
Debt/EBITDA ratio 0.9 1.0
Rating(e): Baa3 positive outlook from Moody’s and BBB- stable outlook from S&P
a) In order to allow homogeneous comparison, 2018 economic values have been restated pursuant to IFRS5 to exclude the contribution of E&P activities classified among Discontinued Operations. b) 2018 figures include the acquisition of GNVI in March, Attiva in May and Zephyro in July; 2019 figures include mainly the acquisition of EDF EN Italia consolidated since July 1st, 2019 and EDF EN Services Italia since end of December 19. c) The new accounting standard IFRS 16 "Leases" has been applied from January 1, 2019 prospectively without restatement of comparative data. The first application of IFRS16 impacted for €165mln. d) Including additions/reductions to non–current financial assets as well as price paid on business combinations, and net of proceeds from the sale of intangibles and property, plant and equipment. The amount includes the acquisition of Gas Natural Vendita Italia, Zephyro and Attiva, as well as of the Shah Deniz long term gas import in 2018 and EDF EN Italia and EDF EN Services Italia in 2019 e) Rating as of 12.31.2019.
Company Profile 2020 | 8 THE STRATEGIC PRIORITIES
DOWNSTREAM DEVELOPMENT VISION @ 2030 • Develop the offer of high value added solutions for the retail market and of innovative energy services for businesses and consumers, Abroad/upstream CUSTOMERS as well as for public administration. & SERVICES • Develop the customer base through organic growth, development of new initiatives and acquisitions. E&P • Effective, top quality relationship with customers.
LOW CARBON MIX Regulated • 40% of energy generated from renewable sources, with a focus on assets GENERATION wind power, photovoltaic and hydroelectric. STABLE & ENERGY • Develop of the state-of-the-art high performance CCGTs with low MANAGEMENT environmental impact, complementary to renewable sources. Gas • Integrated, optimised and innovative management of electricity and midstream gas portfolio. Power gen & ENERGY TRANSITION AND SECURITY OF SUPPLY energy mngt • Flexible and competitive natural gas import contracts. NATURAL GAS Organic growth • Diversification of routes and sources of natural gas supply. Wholesale M&A • Leadership in the innovative uses of gas (small scale LNG). & retail G&P + + + + New segments Resources refocus on generation from renewable sources and gas, the responsible Energy use of natural gas and renewed boost to energy efficiency activities. services Decision to exit the hydrocarbons E&P activities announced in 2019. Italy/services
Company Profile 2020 | 9 EDISON CUSTOMERS SOLUTIONS
• Edison, through its 100% controlled company Edison Energia is involved in the electricity and gas supply to Italian customers • The acquisition of the Italian activities of Gas Natural/Naturgy in 2018, and its integration into Edison Energia, allowed to increase Edison’s customer base and to enlarge the company’s presence in Central and Southern Italy POWER SALES GAS SALES Business market (B2B) IN 2019 IN 2019 • Edison is a leader in the B2B market both in power and gas 6.8 bcm(1) o/w • Second operator in terms of volumes to final customers, after the incumbents (Enel and Eni) 12.6 TWh 1.9 bcm resellers • Agreement with Envitec for the development of the biomethane and bioLNG business segment to make the transport sector more sustainable 4.9 bcm business
Retail market (B2C) • Late 2008: Edison entered the retail free market in power and gas, positioning itself as the new real (2) alternative to incumbents (Enel, Eni, ex-Municipalities) 2.3 TWh 703 Mcm • Completion of the acquisition of Assistenza Casa, company active in maintenance and domestic fault repair services, also allowed the development of further value-added services and an expansion of the offer
New innovative offers and services 0,6 mln contracts(3) 0,9 mln contracts(3) • Edison World Platform: a suite of products and services for a connected, safe and confortable home
• Edison Casa Relax: 24 h x 365 assistance for electricity system, Unlimited interventions, Monthly fee.
• Edison My Comfort: Sale, Installation, Maintenance, Insurance of cooling and heating systems. • Edison Energy Control (4): device which enables families to supervise, through a data reader and a digital platform, their energy spending in real time. • My Sun: a new innovative service that combines a photovoltaic system, a storage and a commodity offer • Edison Plug & Go: electric cars long rental (2-5 years) , installation of a charging wall box and app (for public recharges).
(1) Billion of cubic meters (2) Million of cubic meters (3) Data at end 2019 Company Profile 2020 | 10 (4) Already launched in 2013 ENERGY AND ENVIRONMENTAL SERVICES PRESENCE IN ITALY EDISON AIMS TO BE AT THE SIDE OF ITS CLIENTS WITH COMPETITIVE 2,600 45 20 21 AND SUSTAINABLE SOLUTIONS PEOPLE INDUSTRIAL SITES LOW ENVIRONMENTAL WASTE WATER MANAGED IMPACT AND TREATMENT PLANTS WITH REVENUES OF ~520 MLN€, RENEWABLE PLANTS EDISON IS ONE OF THE LEADING 20+ 100 800+ 2 OPERATORS IN THE ENERGY MILLION SQ.M. LOW ENVIRONMENTAL KM ENERGY CARRIER WASTE STORAGE AND OF PLANTS IMPACT PLANTS DISTRIBUTION GRIDS TREATMENT PLANTS SERVICES MARKET, LEADER IN MUNICIPALITIES IN THE BUSINESS SEGMENT. 2,536 1 2 50+ PUBLIC AND PRIVATE WASTE-TO-ENERGY ENVIRONMENTAL MOBILE MACHINES The company has strong competencies BUILDINGS (SCHOOLS, PLANTS FOR URBAN ANALYSIS LABS (4,000 M2) FOR ENVIRONMENTAL HOSPITALS, OFFICES) AND INDUSTRIAL WASTE SERVICES and experience in managing MANAGED and maintaining proprietary energy 1 and environmental assets located ENERGY EFFICIENCY at the customers’ production sites. CAMPUS Edison builds together with its stakeholders SOLUTION PROPOSED and local territories a customized process ENERGY FACILITIES DIGITAL REDEVELOPMENT AND MANAGEMENT SOLUTIONS EFFICIENT BUILDING to improve energy efficiency and resources MANAGEMENT utilization. SMART CITY ENVIRONMENTAL CONSULTANCY AND SMART LAND SERVICES Main focus on business and PA segments. SOLUTIONS
Company Profile 2020 | 11 FOCUS ON RENEWABLES AND FLEXIBLE GENERATION PORTFOLIO
0 500 1000 1500 2000 Generation portfolio in Italy1 MW installed GWh produced MW Abruzzo RECENT DEVELOPMENTS Thermoelectric 4,472 15,876 Basilicata Marghera Levante CCGT efficiency improvement Hydroelectric 1,019 3,189 Calabria Presenzano greenfield CCGT Campania Wind and photovoltaic 1,009 1,563 Emilia Romagna Total 6,500 20,628 Friuli Venezia Giulia Lazio • Flexible, efficient and diversified electricity generation plants. Lombardia • Target to reach over 40% of total generation from renewable sources Molise Piemonte by 2030 (in 2019 23%), with a focus on wind, PV and hydroelectric. Puglia 2 • Thanks to the acquisition of EDF EN Italia and the completion by E2i Sicilia of 165 MW3 incentivised wind energy projects awarded by GSE at Toscana the end of 2016, Edison strengthened its market positioning in wind Umbria generation and laid the foundations to grow in the photovoltaic sector. Valle d'Aosta Veneto • Strengthen strategic partnerships with developers and bonds with Trentino the local communities to develop and promote initiatives in the PV Marche and mini-hydro sector. Sardegna • Rationalization of the generation fleet and development of two efficient state-of-the-art CCGTs, complementary to renewable CCGT Hydro Wind Solar sources.
(1) Year end 2019, excluding energy efficiency services and in line with consolidation criteria (2) 215 MW of wind and 77MW of PV generation capacity Company Profile 2020 | 12 (3) Including ~ 12 MW non-incentivised capacity WIND AND PHOTOVOLTAIC GENERATION
MAIN WIND POWER OPERATORS IN ITALY PER INSTALLED POWER MAIN PV POWER OPERATORS IN ITALY PER INSTALLED POWER
MW
*
The first 5 operators hold 37% of the market Highly fragmented market with first 15 operators holding 12% of the market share
The wind and photovoltaic sectors in Italy are fragmented; major players are relatively small. Opportunities for Edison to grow and become EDF’s renewables operator in Italy, thanks to organic development, strategic partnerships with developers and M&A. Leverage on size and on strong technical and energy management skills to increase efficiency, also thanks to the synergies created with the acquisition of EDF EN Services Italia.
Source: Edison elaboration based on ANEV report 2019 (data as of December 2018) and company profiles * Edison (though E2i) and EDF EN Italia Company Profile 2020 | 13 ** Fri-El + Alerion MARGHERA LEVANTE BROWNFIELD PROJECT
PROJECT STATUS MAIN FEATURES
Existing E Class gas Decommissioned turbines (360MW)
Existing F Class gas Back-up turbine (360MW)
Interconnections cooling, Recovery of existing auxiliaries
Construction timing 36 months
Commercial operation May 2022
New CCGT net output ~770 • Ansaldo Energia has been selected supplier of the power island (MW@15oC) of the new H class CCGT. • Construction started in May 2019. CCGT net efficiency (%) ~63% • During construction, the existing plant will be operating and will continue to supply steam to the petrochemical plant close by. Exp. Capex (M€) ~310
The most efficient H class CCGT in Europe in 2022
Company Profile 2020 | 14 PRESENZANO GREENFIELD PROJECT
PROJECT STATUS MAIN FEATURES
External interconnections New (gas, power line)
Facilities New
Cooling system Air; new
Construction timing 35 months
Commercial operation January 2023
• Ansaldo Energia is the EPC contractor for the turnkey CCGT net output (MW@15oC) ~ 745 construction of the new H class CCGT. • Construction started in February 2020. CCGT net efficiency (%) ~ 62% • Avg 500 headcounts involved in the construction of the plant in addition to the related activities that will be generated while Exp CAPEX (M€) ~ 370 the plant is in operation.
Together with Marghera, it will be the most efficient H class CCGT plant in Italy in 2023, with the lowest environmental impact
Company Profile 2020 | 15 EDISON GAS SUPPLY PORTFOLIO AS OF TODAY
Russia • Italy: 3rd gas › Counterpart: Promgas market in Europe › Delivery: Pipe › Quantity*: 1 Bcm/y • Edison’s share › Expiration: 20201 of the Italian imports: 21% Qatar
• Shah Deniz and › Counterpart: RasGas II other LNG LT › Delivery: LNG › Quantity*: 6.4 Bcm/y supplies to TOTAL CONTRACTED › Expiration: 2034 become effective SUPPLY in 2021-22 12.4 Bcm/y* • Edison aims Libya to maintain › Counterpart: Eni NA a flexible and Algeria › Delivery: Pipe competitive gas › Quantity*: 4 Bcm/y › Counterpart: Sonatrach › Expiration: 2028 import portfolio › Delivery: Pipe › Quantity*: 1 Bcm/y › Expiration: 2027
*Annual Contracted Quantities (1) one year contract Company Profile 2020 | 16 KEY INFRASTRUCTURES FOR THE EUROPEAN ENERGY SYSTEM
Responsible contribution to energy transition through: • Improvement of the energy mix. • Diversification of gas supply sources. • Development of alternative uses of gas to replace polluting fuels.
• Availability of 80% of the • Management of 3 natural capacity of Adriatic LNG Feasibility studies gas storage centers regasification terminal of gas import in Italy: Collalto, to import LNG from Qatar infrastructural Cellino San Marco and until 2034. projects via San Potito-Cotignola. • Small Scale LNG projects. pipelines. • Second national operator in the sector.
* Total RAB of Edison regulated activities (storage, gas distribution and transport) €720mln. Company Profile 2020 | 17 Data at 100%, for the purpose of 2017 tariff calculation. SMALL SCALE LNG INTEGRATED LOGISTIC CHAIN
LNG LNG carrier Regas Terminal Small Scale LNG Carrier Coastal Depsoit Ravenna (145,000-175,000 m3) (30,000 m3) (5,000-30,000 m3)
Target Market
Bunker Vessel Truck 3 (500 -7,500 m ) (40 - 80 m3)
Bunkering Road transport Off-Grid customers maritime transport
Company Profile 2020 | 18