RESULTS AS OF 30 SEPTEMBER 2019 APPROVED

• Revenues at € 1,665.5 million (€ 1,605.0 million in 9M18, +3.8%) • EBITDA at € 1,278.4 million (€ 1,230.1 million in 9M18, +3.9%) • Group net profit for the period at € 552.5 million (€ 541.5 million in 9M18, +2.0%) • Capital expenditure at € 670.0 million (€ 561.4 million in 9M18, +19.3%) • Net debt at € 8,249.5 million (€ 7,899.4 million as of 31 December 2018) • 2019 Interim dividends of 8.42 eurocents per share

Rome, 13 November 2019 – The Chief Executive Officer and General Manager Luigi Ferraris has presented the results of the first nine months and the third quarter of 2019, which were examined and approved by the Board of Directors of Terna S.p.A. (“Terna”), at a meeting today chaired by Catia Bastioli.

“Investments acceleration on the national grid generated the solid growth registered in the period. Sustainability and dialogue with local communities, innovation and digitization, are the key enabling factors that - together with people and industrial know-how - allow us to face the challenges related to energy transition. This period’s solid results, along with the incisive managerial actions undertaken, will allow us to continue to move forward with the group’s results growth throughout the year” said Luigi Ferraris, CEO and General Manager of Terna.

SUMMARY OF THE FIRST 9 MONTHS OF 2019 CONSOLIDATED RESULTS

€ million First 9 months 2019 First 9 months 2018 % change Revenues 1,665.5 1,605.0* +3.8% EBITDA (Gross Operating Profit) 1,278.4 1,230.1 +3.9% EBIT (Operating Profit) 842.2 830.0 +1.5%

Group net profit for the period 552.5 541.5 +2.0%

CAPEX 670.0 561.4 +19.3% * Reclassified in compliance with the new IFRS.

Revenues of the first 9 months of 2019 amounted to € 1,665.5 million and registered an increase of € 60.5 million (+3.8%) compared to the same period in 2018. This result was mainly attributable to the increase in revenues of Regulated Activities, and to the contribution of Non Regulated Activities, above all following the trend of the Tamini Group, as well as to the initiatives in Brazil.

EBITDA (Gross Operating Profit) of the period stood at € 1,278.4 million, an increase of € 48.3 million (+3.9%) compared to € 1,230.1 million in the first 9 months of 2018, mainly attributable to the better result of the Regulated Activities.

EBIT (Operating Profit) of the period, after amortisation, depreciation and impairment of € 436.2 million, stood at € 842.2 million, compared to the € 830 million of the first 9 months of 2018 (+1.5%).

Net financial expenses amounted to € 61.1 million, a reduction of € 5.7 million compared to the € 66.8 million of the first 9 months of 2018, mainly due to the seasonal nature of inflation and to the decrease in interest rates.

Profit before tax stood at € 781.1 million, up by € 17.9 million compared to the same period of 2018 (+2.3%).

Income tax expense of the period amounted to € 226.5 million, up by € 8.3 million compared to the same period in 2018 (+3.8%), due to higher profit before tax. The tax rate stood at 29.0%, in line with the first nine months of 2018 (28.6%).

The Group net profit for the period was € 552.5 million, up by € 11 million (+2%) compared to the € 541.5 of the first 9 months of 2018.

The consolidated statement of financial position as of 30 September 2019 showed equity attributable to owners of the Parent of € 4,090.3 million, compared to the € 4,019.2 million as of 31 December 2018.

Net debt amounted at € 8,249.5 million, compared to the € 7,899.4 million as of 31 December 2018.

The Terna Group’s total capital expenditure in the first 9 months of 2019 amounted to € 670 million, compared to the € 561.4 million in the same period of the previous year (+19.3%). The main projects in the period included progress on the Italy-France and Italy-Montenegro

interconnections; the works for the substations of Belcastro and Brennero substation; the strengthening of the grid in the Foggia-Benevento area and the rationalisation of Rome’s electricity grid.

The Group’s employees, at the end of September 2019, totalled 4,394, up by 142 compared to 31 December 2018. This increase is attributable to the skill strengthening policy already highlighted in the 2019-2023 Strategic Plan.

SIGNIFICANT EVENTS IN THE THIRD QUARTER OF 2019 AND THEREAFTER

Business

The new 150 kV underground cable connection connecting the Piscioli electrical substation in the municipality of Candela (FG) to the Valle electrical substation in the municipality of Ascoli Satriano (FG) came into operation on 3 July 2019. The new line, 11 km long and constructed in just 11 months, is necessary for the distribution of the renewable energy produced by the plants present in the area.

On 18 September 2019, Terna’s CEO Luigi Ferraris, with Sicily’s President Nello Musumeci and the General Manager of Cassa Depositi e Prestiti Fabrizio Palermo, signed a programme agreement for projects to improve the security of the local electricity system and to develop the region of Sicily. The agreement calls for investments of € 614 million over the next five years in critical works to improve Sicily’s electricity grid.

On 19 September 2019, Terna’s CEO Luigi Ferraris and FCA Chief Operating Officer for EMEA Pietro Gorlier signed a Memorandum of Understanding in Turin, for the joint trialling of sustainability mobility services and technologies, such as Vehicle-to-Grid (V2G), which enables electric vehicles to interact with the grid via “smart” charging infrastructure. The partnership between the companies will involve the realisation at Terna’s Turin office of the E-mobility Lab, an innovative technology laboratory which will allow trials on the performances and capacities of electric cars for the provision of services to support the flexibility and stabilisation of the electricity grid, and their multi-directional interaction with the grid via a dedicated charging infrastructure.

On 30 September 2019, Terna’s CEO Luigi Ferraris and Ansaldo Energia Managing Director Giuseppe Zampini signed in Genoa an agreement on three areas of interest: research and development of technologies to support the transition, collaboration on international projects and launch of initiatives in the field of energy efficiency.

On 15 October 2019, Terna began the last phase of the decommission of the 150 kV overhead power line connecting in Sicily the Sorgente electrical substation with the Pace del Mela and Villafranca primary transformers. In the first phase, Terna removed around 21 km of aluminium- steel conductors and shield wires. The final phase of the works involved the decommissioning of 11 pylons, with the recovery of around 60,000 kg of steel.

On 16 and 17 October 2019, Terna, Cassa Depositi e Prestiti and Snam organised the States General of the Italian Energy Transition in Rome, an opportunity for discussion and analysis dedicated to the great transformation taking place at global level and aimed at outlining future energy and network scenarios together. During the event, Snam and Terna, with the collaboration of CDP, presented the results of a study on future scenarios of the sector, a preliminary step for the preparation of the ten-year plans for the development of the electricity transmission grid and the gas transport network.

On 22 October 2019, Terna’s CEO Luigi Ferraris and Steg CEO Moncef Harrabi signed a Memorandum of Understanding in order to intensify their industrial collaboration in the area of electrical infrastructure and in particular the Elmed project, which will involve an undersea connection at 600 MW of DC between Italy and Tunisia. The project, which will feature 200 km long “invisible” cables, has been included on the European Commission’s list of Projects of Common Interest (PCI).

The new 132 kV Mercatello sul Metauro electrical substation, in the Pesaro Urbino province, became operational, on 26 October 2019. The substation, on which around € 6 million were invested, ensures the security and efficiency of the local electricity grid, and improves integration of the consistent production of renewable energy typical of this area.

In Ravenna, on 28 October 2019, before the Italian Prime Minister Giuseppe Conte, Cassa Depositi e Prestiti General Manager Fabrizio Palermo, Fincantieri’s CEO Giuseppe Bono, Terna’s CEO Luigi Ferraris and Eni’s CEO Claudio Descalzi signed an agreement to set up a company for the development and manufacturing of wave-energy power plants. The agreement, which follows another one signed on 19 April, launched the first phase of a joint project to convert the Inertial Sea Wave Energy Converter (ISWEC) pilot project, an innovative system that transforms energy generated by waves into electricity, into an industrial scale power station.

International Activities

On 11 November 2019 Terna, through its subsidiary Terna Plus, signed all closing documents for the operation with Construtora Quebec announced to the market on 12 April 2019 for the acquisition of two licenses of electricity infrastructure in Brazil. This project entails the acquisition of a controlling share in one of the two companies involved in the transaction and specifically calls for the construction of about 190 km of 500-kV electrical infrastructure. The value of the contract, including the development and construction costs, is around $ 60 million.

Finance

On 11 July 2019, Terna updated its Euro 8,000,000,000 “Euro Medium Term Note Programme” (EMTN). Deutsche Bank and Citigroup acted as the Joint Arrangers of the programme, which has been rated "BBB+/A-2" by S&P, "(P)Baa2 /(P)P-2" by Moody’s, "BBB+" by Fitch and "A-/S-1" by Scope.

On 18 July 2019, Terna successfully launched a fixed-rate bond issue for an aggregate amount of € 500 million, with demand outstripping supply by approximately 4 times the offered amount. The bond has a duration of 6 years and will pay a coupon of 0.125%, the lowest for an Italian corporate bond with duration above 5 years. The effective cost of such issuance for Terna is equal to 0.25%.

Sustainability

On 8 July 2019, Terna and Digital Magics EnergyTech, an incubation programme for digital start- ups in the energy sector, chose “Smart Track” as the winning start-up/SME for the D2O - Digital To Operation Call for Innovation, launched last May in order to improve efficiency at work, with particular emphasis on the topics of personal safety through the development of new technologies, devices, applications and high value-added services to facilitate “digital transformation”.

On 14 September 2019, Terna was confirmed world leader in the global Electric Utilities Sector for its sustainability performance on the Dow Jones Sustainability Index. Terna received an overall score of 90/100 (average sector score: 45/100), ranking ahead of all 77 companies evaluated in the Electric Utilities sector. For the first time in five years, a company in the utility sector has been ranked first for the second consecutive year.

On 19 September 2019, the fourth Next Energy initiative was launched by Terna, Cariplo Foundation and Cariplo Factory to promote individual talent and support growth of teams with

innovative and sustainable projects focused on the theme of energy transition. This edition also includes three calls: Talents, Ideas and Growth.

On 4 October 2019, a collaboration was launched between Terna and Legambiente to identify the correct processes for the gradual elimination of single-use plastics and their recycling in the workplace. This new synergy is also founded on the experience gained by Terna through its “Plastic-Free” project.

Security

On 7 October 2019, Terna’s CEO Luigi Ferraris and Vice Commander of the Corps of the Port Captaincies–Coast Guard, Admiral Inspector (Port Commander) Antonio Basile, signed an agreement in Rome aimed at improving the prevention measures against damage to subsea cables belonging to Terna. Both parties committed themselves to increase the effectiveness of surveillance activities in all waters, where approximately 1,500 km of Terna's undersea cables are located.

On 16 October 2019, Terna’s CEO Luigi Ferraris and Snam’s CEO Marco Alverà signed a MoU on cyber security to identify, prevent and face potential threats, attacks and damage to IT infrastructures, to ensure increased security and protection of electricity and gas systems and networks, which are considered critical elements of national interest.

2019 INTERIM DIVIDEND OF 8.42 EUROCENTS PER SHARE

In the light of the financial and equity position and income statement results achieved by Terna S.p.A. in the first half of 2019 and the information about the economic prospects and business outlook for the current financial year, the Board of Directors of Terna S.p.A, having today received the opinion from the auditing firm PricewaterhouseCoopers (PwC) required under Article 2433-bis of the Italian Civil Code, has resolved to pay the ordinary interim dividend for 2019 in the amount of 8.42 eurocents per share, in line with the growth expected by the 2019-2023 Strategic Plan. The interim dividends, net of any withholding required by law, will be payable from 20 November 2019, (record date pursuant to Article 83-terdecies of Legislative Decree no. 58 of 24 February 1998 known as the “Consolidated Law on Finance”: 19 November 2019) with “ex-dividend” date of coupon no. 31 on 18 November 2019.

BUSINESS OUTLOOK

Terna will be engaged in implementing the 2019-2023 Strategic Plan, sharply accelerating investment activities, which will focus on the development of the national transmission grid in order to facilitate the integration of renewable sources and improve the security of the system. At the same time, Terna intends to renew the Group’s asset base in order to reduce service-outage risks, support maintenance through the use of grid digitalisation technologies and increase environmental sustainability.

Terna will continue to step up investments in innovation and digital solutions in order to manage the growing complexity of the system, whilst also develop and insource strategic competencies and strengthen internal departments to implement Terna’s planned investment programme.

The Company continues to be committed to the engagement with local stakeholders and to respect the principles of integrity, responsibility and transparency, on which the management of Terna’s business has always been based, in order to ensure the ability to minimise the environmental impact and meet the ESGs.

In terms of Regulated Activities in Italy, the key electricity infrastructures currently under construction include the interconnection with Montenegro which is expected to come on stream in 2019. In addition, regarding the rationalisation of electricity grids in the main metropolitan areas, we expect major connections in the cities of Florence, Genoa and Milan.

For what concerns Non-regulated Activities, in line with the previous years, the Group will focus on supporting the energy transition through the development of innovative services. Specifically, Terna will consolidate its role as an Energy Solutions Provider, developing services with high added value for businesses and taking advantage of market opportunities. In the telecommunications sector, opportunities in connectivity will also be pursued by extracting value from the Group’s dark fibre infrastructure.

Regarding International Activities, Terna will focus on the operation and maintenance of the Brazilian power lines that entered into service between the end of 2018 and the first half of 2019 (Santa Maria Transmissora de Energia and Santa Lucia Transmissora de Energia) and on completing the projects in Uruguay and Peru - due to be completed within the expected time- scales – by exploiting the Group’s expertise.

ALTERNATIVE PERFORMANCE MEASURES

In this release, some "alternative performance measures" (EBITDA, Tax Rate and Net Debt) are used, which are not provided for in the IAS/IFRS accounting standards; their meaning and

contents are explained below pursuant to the ESMA/2015/1415 guideline published on 3 December 2015:

- EBITDA (Gross Operating Margin): this is a measure of operating performance; it is calculated as “Net profit for the year” before “Income taxes for the year”, “Financial income/(expense)” and “Amortisation, depreciation and impairment losses”;

- Tax rate: this expresses the proportion of tax with respect to the profit/(loss) and derives from the ratio between “Income taxes for the year” and “Profit/(loss) before taxes”;

- Net Financial Debt: this is a measure of the company’s financial structure. It is determined as the sum of the short-term (“Short-term loans”, “Current portion of long-term loans” and “Current financial liabilities”) and long-term debt (“Long-term loans”) and the related derivative instruments (“Non-current financial liabilities”), net of “Cash and cash equivalents”, “Current financial assets” and “Non-current financial assets” for the value of hedging derivatives on bonds. It should be noted that the net financial debt of the Terna Group is in compliance with the provisions of ESMA Recommendation no. 319 of 2013 regarding the definition of the net financial position, less “Non- current financial assets”.

Today, at 5pm, a meeting will be held to present the results of the first 9 months of 2019 to financial analysts and investors. The support material for the event will be made available on the Company’s website (www.terna.it), in the Investors section, at the beginning of the meeting. The Presentations will also be made available, via “eMarket SDIR”, on the website of Borsa Italiana S.p.A. (www.borsaitaliana.it) and of the authorised storage service “1Info” (www.1info.it). Journalists will have the opportunity to follow the meeting without any right to speak. It will also be possible to follow the presentation by connecting to the audio webcast on the Company website (www.terna.it): following the live coverage, the file will be available in the section Investors.

The Financial Reporting Manager, Agostino Scornajenchi, pursuant to paragraph 2 of Art. 154-bis of the Consolidated Law on Finance, declares that the accounting information included in this press release corresponds to the evidence in the documents, books and accounting records.

The Consolidated Interim Financial Report of the Terna Group dated 30 September 2019 has not been audited and was prepared voluntarily, pursuant to art. 82-ter of CONSOB Issuer Regulations (as amended by CONSOB Resolution no. 19770 of 26 October 2016). In continuity with the past, the compliance and correctness of the financial information provided to the public and the comparability of the related information with the corresponding data in the interim reports previously disclosed to the public is ensured. The document containing the Terna Group Interim Report as at 30 September 2019 will be made available to the public before 14 November 2019 at the Company’s registered office, published on the Company’s website (www.terna.it) and on the website of the authorised storage service “1Info” (www.1info.it), and filed at the stock exchange management company Borsa Italiana S.p.A. (www.borsaitaliana.it). The prescribed disclosure regarding the filing will be issued.

The reclassified Income Statement, Statement of Financial Position and Statement of Cash Flows of the Terna Group are attached. These represent the classification of the results used by management for a more efficient evaluation of the Terna Group’s economic and financial performance. It is highlighted that, in compliance with Directive no. DME/9081707 of 16 September 2009, these reclassified statements are included in the Terna Group’s Consolidated Interim Financial Report as of 30 September 2019, prepared in line with standard practices for the sector.

The Terna Group’s reclassified income statement

(€m) Q3 % % 2019 2018 Change 9M 2019 9M 2018 Change change change 567.7 542.2* 25.5 4.7% TOTAL REVENUE 1,665.5 1,605.0* 60.5 3.8% 513.2 501.4 11.8 2.4% - Regulated revenue in Italy 1,518.0 1,480.8 37.2 2.5% of which Revenue from construction 5.9 5.7 0.2 3.5% 10.9 12.0 (1.1) (9.2%) services performed under concession 48’2 40.3* 7.9 19.6% - Non-Regulated revenue 130.4 118.2* 12.2 10.3% 6.3 0.5 5.8 - - International revenue 17.1 6.0 11.1 - 135.5 127.0* 8.5 6.7% TOTAL OPERATING COSTS 387.1 374.9* 12.2 3.3% 59.6 57.0 2.6 4.6% - Personnel expenses 189.2 181.4 7.8 4.3% 40.8 38.9 1.9 4.9% - Cost of services, leases and rentals 115.8 115.9 (0.1) (0.1%) 22.0 14.4* 7.6 52.8% - Materials 51.6 37.9* 13.7 36.1% 7.0 8.3 (1.3) (15.7%) - Other costs 17.2 21.3 (4.1) (19.2%) 0.2 2.7 (2.5) (92.6%) - Quality of service 2.4 6.4 (4.0) (62.5%) - Cost of construction services performed under 5.9 5.7 0.2 3.5% 10.9 12.0 (1.1) (9.2%) concession 432.2 415.2 17.0 4.1% GROSS OPERATING PROFIT (EBITDA) 1,278.4 1,230.1 48.3 3.9% - Amortisation, depreciation and 147.5 132.7 14.8 11.2% 436.2 400.1 36.1 9.0% impairment losses 284.7 282.5 2.2 0.8% OPERATING PROFIT (EBIT) 842.2 830.0 12.2 1.5% (22.3) (24.1) 1.8 (7.5%) - Net financial income/(expenses) (61.1) (66.8) 5.7 (8.5%) 262.4 258.4 4.0 1.5% PROFIT/(LOSS) BEFORE TAX 781.1 763.2 17.9 2.3% 76.2 75.5 0.7 0.9% - Income tax expense for the period 226.5 218.2 8.3 3.8% 186.2 182.9 3.3 1.8% PROFIT FOR THE PERIOD 554.6 545.0 9.6 1.8% - Profit/(Loss) attributable to non-controlling 0.3 1.6 (1.3) (81.3%) 2.1 3.5 (1.4) (40.0%) interests PROFIT FOR THE PERIOD ATTRIBUTABLE 185.9 181.3 4.6 2.5% 552.5 541.5 11.0 2.0% TO OWNERS OF THE PARENT

* Reclassified following the entry into effect of new international accounting standards. No impact at the level of EBITDA.

The Terna Group’s reclassified statement of financial position

(€m)

at 30 September 2019 at 31 December 2018 Change

Total net non-current assets 14,322.7 14,083.6 239.1 - Intangible assets and goodwill 520.9 519.4 1.5 - Property, plant and equipment 13,456.5 13,244.3 212.2 - Financial assets 345.3 319.9 25.4 Total net working capital (1,739.4) (1,822.5) 83.1 - Net energy-related pass-through payables (790.0) (777.6) (12.4) - Net receivables resulting from Regulated Activities 329.5 313.9 15.6 - Net trade payables (612.1) (908.9)* 296.8 - Net tax liabilities (91.0) 50.9 (141.9) - Other net liabilities (575.8) (500.8)* (75.0) Gross invested capital 12,583.3 12,261.1 322.2 Sundry provisions (206.4) (307.5) 101.1 NET INVESTED CAPITAL 12,376.9 11,953.6 423.3 Equity attributable to owners of the Parent 4,090.3 4,019.2 71.1 Equity attributable to non-controlling interests 37.1 35.0 2.1 Net debt 8,249.5 7,899.4 350.1 TOTAL 12,376.9 11,953.6 423.3

* Reclassified to improve comparability. No impact at the level of net working capital or equity.

The Terna Group’s cash flow (€m)

Cash flow Cash flow 9M 2019 9M 2018

- Profit for the period 554.6 545.0 - Amortisation. depreciation and impairment losses 436.2 400.1 - Net change in provisions (101.1) (37.6) - Net losses/(gains) on sale of assets (3.5) (3.0) Operating cash flow 886.2 904.5 - Change in net working capital (82.8) 217.1 - Other changes in property, plant and equipment and intangible assets 23.3 15.9 - Change in investments (3.4) 0.6 - Change in financial assets (22.0) (64.6) Cash flow from operating activities 801.3 1.073.5 - Total capital expenditure (670.0) (561.4) Free cash flow 131.3 512.1 - Dividends paid to the Parent Company’s shareholders (310.5) (292.9) - Cash flow hedge reserve after taxation and other movements in equity attributable to (170.9) (18.4) owners of the Parent - Other movements in equity attributable to non-controlling interests - 3.9 Change in net debt (350.1) 204.7