A2A ENERGY RETAIL BU

Andrea Cavallini - Head of A2A Energy Retail Business Unit

September 2017

2

A2A Energy Retail BU Meeting participants

1. Andrea Cavallini – Head of A2A Retail Business Unit

2. Gabriela Vittorio – A2A Energia Customer Service Manager

3. Paolo Bellotti – A2A Energia Marketing and Sales Manager

3

A2A Energy Retail BU A2A Energia – Company organisational structure

SALES PLANNING& CONTRACT

MANAGEMENT

CHAIRMAN AND CEO

CORPORATECUSTOMERS

Back Office and Third

Parties

Contact Center

Metering and Billing

Credit Management and

Collection

Customer SatisfactionPlanning and Marketing

Research

Marketing

Mass Market Sales

Large Customers and

Resellers Sales

Customer

Experience & Digital

Condominiums and Heat

Services

MARKETINGAND SALES

CUSTOMERSERVICE

A. Cavallini

G. VittorioP. Bellotti

4

A2A Energy Retail BU A2A Group at a glance – The leading Italian Multi-Utility

G

G

G G

GG Legenda

EnvironmentWaste collectionTreatment plantsBiogas/Biomass plantsWaste-to-Energy

Generation & Trading HydroelectricCCGT CoalFuel OilSolar

PL

G

DHEG

W

GW

E G

EDHG

G DH

DH

DH

DH

DH G

G

PL

PLPL

C

C

C

CC

C

C

C

CC

A2A Footprint

Financial Highlights

(1) 2016 figures restated after the completion of the Purchase Price Allocation (PPA) process on LGH Group assets.

(2) Group net income adjusted for the impact of extraordinary items: 377 €M in 2016; 278€M in 2015; 175€M in 2014; 156€M in 2013

GENERATION & TRADING

352 €M 31%

ENERGY RETAIL

ENVIRONMENT

120 €M 11%

EPCG(Montenegro)

69 €M 6%

NETWORKS & HEATSMART CITY

6 €M 1%

NETWORKS HEAT

69 €M 6%285 €M 25%231 €M 20%

NetworksElectricityGasWaterPublic Lighting

HeatCogen. & thermal plantsThermal solar plantsDistrict Heating

C EGWPL

DH

2016EBITDA(3)

A2A shareholding structure at 30 June 2017

Lombardy

Italy

(3) Equal to 1,132 €M, calculated as Reported EBITDA (1,231 €M) net of non recurring items (128 €M) and EBITDA from “Corporate” (-29 €M)

50.8% 49.2%

49.2%

0.8%

25.0%

25.0%

0% 20% 40% 60% 80% 100%

Total

Market

Treasury Shares

Municipality of Milan

Municipality of Brescia

EPCG deconsolidated as of H22017 (Put option on EPCG wasexercised in July 2017)

Energy Retail:

strong presence in Lombardy

A2A Energy Retail BUHighlights

A2A ENERGY RETAIL BU

100%

90.3%

50%

From July 2017 A2A has increased its stake in

LumEnergia to 90.3% from previous 33.3% after the exercise of a call option.

LumEnergia operates electricity (8,000 clients) and gas (1,000 clients)

supply activity in the area between Lake Iseo and Lake

Garda & has an EBITDA <€1m.

Retail sale of power and natural gas to customers in the free market and served under the protection scheme

BUSINESS UNIT OVERVIEW KEY NUMBERS

(2)

(1) Aspem Energia was merged into A2A Energia at the end of 2016

(2) Holding held by Linea Group Holding S.p.a.

120 €M ordinary EBITDA in 2016

Over 8.0 TWh of Power sales

of which 2.0 Twh on the Regulated market

Gas Sales at ~1.4 Bcm

of which 0.6 Bcm on the Regulated market

More than 1 Million of customers in

the Power market

1.3 Million of customers in the

Gas market

Commercial development:

~+120k net customers acquired on the

Free market in 2016 excluding externalgrowth

(1)

5

A2A Energy Retail BUCustomer Base

FREE MARKET

REGULATED MARKET

POWER GAS

~340k customersin all sectors (Large Customers, Small Businesses, SME, Condominiums,

Residential)

~700k customers(Residential and

Small Businesses)

~360k customersin all sectors (Large Customers, Small Businesses, SME, Condominiums,

Residential)

~950k customers(mainly Residential)

Market

Segment

• Increasing customer base

• Customers growth boththrough direct channels(Key Account Manager, Call Center, Contact Center) and indirect channels (Reseller, Agents, Telesellers), depending on customertargets

• Decreasing customerbase due to switch to Free Market

6

A2A Energy Retail BUA2A market positioning in 2016 – Volumes sold

A2A is among the top

players in the energy

retail sector in Italy

Source: AEEGSI Annual Report, March 2017

# Operators = 393

# Operators = 542 # Operators = 131

7

8

A2A Energy Retail BUStrategy and Track record

MISSION AND VALUES

PROFITABILTYCASH FLOW

GENERATION• FAIRNESS AND TRANSPARENCY

• EXCELLENCE IN SERVICE

-50

0

50

100

150

200

250

2011 2012 2013 2014 2015 2016

BASE INDEX FOR YEAR 2011 = 100

REVENUES EBITDA EBITDA RECURR. NFP

COMMERCIAL STRATEGY

OPERATING PERFORMANCE

RETENTION

CHURN RATE

SUSTAINABLE

COST TO ACQUIRE

• RISK/RETURN PROFILE OPTIMIZATION

• FOCUS ON MMK

• FREE MARKET DEVELOPMENT

• NEW SERVICES OFFERING

• EFFICIENT COST-TO SERVE

• EFFECTIVE WORKING CAPITAL MANAGEMENT

1.

2.

3.

Figures related to A2A Energia

First player in terms of customersatisfaction for the 5th consecutive year

9

A2A Energy Retail BUCustomer Service excellence1.

90.8 91.492.4

88.5 88.5

90.3

2014 2015 2016

A2A Energia Standard di Mercato

73.5

74.6

72.5

73.7

74.8

72.6

72.8

73.4

72.3

INDICE DISODDISFAZIONE

Soddisfazionecomplessiva

Soddisfazionerispetto alleaspettative

Market Average

CUSTOMER SATISFACTION INDEX

MONITOR ENERGIA E GAS CERVED 2016

FREE MARKET CUSTOMER SATISFACTION SURVEY

DOXA 2017

Benchmark 67-72

Satisfaction Index

Overall satisfaction

Satisfaction vs expectations

∆ 17/16

+0,5

+0,4

+1,3

+0,7

+0,5

+1,2

+0,5

+0,2

+1,6

TOTAL RESIDENTIAL BUSINESS

Above sector’s benchmark, with improvingresults compared to 2016

Figures related to A2A Energia

10

A2A Energy Retail BUPower and Gas sales evolution by market/segment2.

Commercial Strategy focused on margins and creditworthiness rather than volumes/revenues increase, resulting in a redefinition of the sales mix in Power and Gas Markets both:

- in terms of markets: higher incidence of Free Market vs Regulated Market

- in terms of segments: focus on Mass Market customers (MMK), with lower incidence of Large customers on total sales portfolio

2011

9.7

2.8

12.5

2016

6.3

2.0

8.3

FREE vs REGULATED

SALES

Customer Base ~1.1 mn

78%

22%

76%

24%

~1.0 mn

FREE MMK vs LARGE

CUSTOMERS SALES

POWER (TWh) GAS (Bcm)

2011

0.6

1.0

1.6

2016

0.8

0.6

1.4

2011

0.7

9.0

9.7

2016

1.3

5.0

6.3

2011

0.1

0.5

0.6

2016

0.3

0.5

0.8

Customer Base ~1.3 mn~1.2 mn

Free

Regulated

Free

Regulated

43%

57%

63%

37%

Free MMK

Free Large customers

Free MMK

Free Large customers

7%

93%21%

79% 83%

17%

62%

38%

11

FREE MASS MARKET CUSTOMER BASE EVOLUTION (‘000 POD)

+130K Free MMK POD/PDR

following LGH partnership

2014FY

149

173

322

Q115

165

193

358

H115

179

210

389

9M15

192

224

416

2015FY

208

236

444

Q116

222

250

473

H116

235

258

493

9M16

330

322

652

2016FY

356

338

694

Q117

382

371

753

H117

397

405

802

2019

~1,200

Gas Free mktPDR ('000)

Power Free mktPOD ('000)

A2A Energy Retail BUFree Market Customer Base development

‘000POD

2.

>2X Free Market Customer Base

already achieved in 2016FY vs 2014FY

~4X Free Market Customer Base target in 2019

(incl. external growth), exceeding 3X previous target

~15% ~30% ~50%~20%

% Free Market on

total customer

12

A2A Energy Retail BUPower and Gas Regulated vs Free Mass Market

Regulated

customer

Free MMK

customer

Regulated component(RCV/PCV)

Raw material margin

POWER MARKET BREAKDOWN

POWER CONTRIBUTION MARGIN PER CLIENT

Avg POD

number ('000)

Volumes

(GWh)

Contribution

margin (€M)

Contribution

margin per POD(€/POD)

Regulated

Free MMK

See details below

Regulated

customer

Free MMK

customer

Regulated component(QVD)

Raw material margin

GAS MARKET BREAKDOWN

GAS CONTRIBUTION MARGIN PER CLIENT

Avg PDR

number ('000)

Volumes

(Mmc)

Contribution

margin (€M)

Contribution

margin per PDR(€/PDR)

Regulated

Free MMK

See details below

2.

Figures related to A2A Energia

13

A2A Energy Retail BUValue Added Services

ENERGY

PROVIDER

ENERGY

ADVISOR

KIT LED

CALDAIA2A

CLIMA2A

From:

To:

NEW OFFERINGS:

Maintenanceservices

IoT solutions

Dec 2015

Sept 2016

May 2017

2018

RELAMPING

Jul 2016

E-MOBILITY

Dec 2017

Residential Customers

Small Businesses and Condominiums

LOGO Technologic partner

2.

CAS@CCOGLIENTE

Feb. 2016 CONDOMINIUMS SERVICES

Apr 2016

ENERGY AUDITS

Jan 2016

14

A2A Energy Retail BUWorking Capital optimization3.

2012-2016 PAST DUE RECEIVABLES

2012-2016 DSO(1) EVOLUTION

2012-2016 NFP EVOLUTION

-40

-20

0

20

40

60

80

100

120

QI QII QIII QIV

BASE INDEX FOR YEAR 2012 = 100

2012 2013 2014 2015 2016

0

20

40

60

80

100

120

QI QII QIII QIV

BASE INDEX FOR YEAR 2012 = 100

2012 2013 2014 2015 2016

40

60

80

100

120

140

QI QII QIII QIV

BASE INDEX FOR YEAR 2012 = 100

2012 2013 2014 2015 2016

Figures related to A2A Energia

(1) Days Sales Outstanding

15

A2A Energy Retail BU2017-2021 BU Strategic Plan drivers and assumptions

Customer Base

Unitary Margin

CtA & CtS

Business Plan assumptionsDriver

• Free market customer base +150K avg p.a.(1) leveraging upon:

• Gradual territory expansion

• SME segment development (new dedicated sales force)

• Brand equity

• Proven track record (average past 2 yrs growth +120K. Incl. M&A: +180K)

• No growth from M&A in the plan

• Expected to reduce ~3% avg p.a. on growing competition(2)

• Further competitive pressure following Power Market full liberalization from 2H 2019

• Cost-to-Acquire, per unit, planned to grow ~5% avg p.a. on growing competition

• Steady Cost-to-Serve, per unit, thanks to strong focus on operating performance

(1) Assuming current regulatory and market structure continuity

(2) Mass market unitary margin – Residential and small business customers – excluding regulated components

16

A2A Investor Relations Team

Mail: ir@a2a.eu

Phone: +39 02 7720 3974

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

CONTACTS AND IR PRODUCTS

a2a2017Investor Guidebook

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 Results and OurResponsibilities. The selected contents are all publicly available information,which you may find spread across a large number of Company documents

• Historical economic, financial and operational company data as of 2008 –on annual and quarterly basis

• Economic, financial and operational data useful for building A2A earningsmodel – 2015 FY reported and 2016-20 BP forecast

• Tables of the Investor Guidebook mainly relevant to a quantitative analysis

Periodic update for investors and analysts

on the significant steps of A2A Business Plan

– such as relevant investments, new

projects, achievements, contracts,

agreements.

https://www.a2a.eu/en/investors/documen

ts#BPN

Brief and synthetic document that shows the highlights and the strengths ofA2A business model

Moreover A2A publishes the following documents in the Investor Library Section on A2A website:• Documents prepared by the Market Analysis, Modeling and Pricing Unit of A2A

- Overview of the Italian Energy Market (yearly basis)- Notes on energy and environmental markets (quarterly basis)

• Documents prepared by Divisional Managers of A2A- A2A Environment BU- A2A Networks & Heat BU- Main Regulatory Issues for Investors

Newsletter

Publications

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

a2a2017Company Profile

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.