Terna S.p.a. · MIL:TRN
Terna — Investor Presentation (November 2020)
32 slides from Terna's investor presentation, Nov 19, 2020
Slide 1: Industrial Plan 2021-2025
INDUSTRIAL PLAN 2021-2025 November 19th 2020 November 19th, 2020 1
Slide 2: Agenda
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Agenda Scenario 3 Strategy 8 2021 – 2025 Group Financial Targets and Dividend Policy 16 Final Remarks 20 Annexes 23 2
Slide 3: Scenario
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Scenario 3
Slide 4: Terna and the Sustainable Development Goals
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Scenario Terna and the Sustainable Development Goals ▪ Terna is committed to supporting sustainable development by contributing to some • Increasing energy efficiency • Realization of Development and • Implementation of Resiliency Plan Resiliency Plans of
Slide 5: A new European strategy heading to "Net Zero"
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Scenario TARGET EMISSIONS* KEY ACTIONS INVESTMENTS Current 80%-90% of RES in the power generation by 2050 Green New Deal -23% Grids development to improve interconnections and digitalization Target 2030 At least €1 trillion Energy efficiency and electrifi
Slide 6: From system operator to system enabler
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Scenario Italian electricity system evolution CHALLENGING RES 2030 TARGETS1 SYSTEM EVOLUTION AND IMPACTS 30% From… Large generation plants ~18% ~18% RES share on total energy consumption 20182 20192 2030 To… Large/medium 155 generation plants 115 116 52 ▪
Slide 7: The key system tools to support the Energy Transition
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Scenario The key system tools to support the Energy Transition Grid’s investments Key To enable security, resiliency System New storage capacity and the integration of non- programmable renewables Tools RES Integration Terna Plan enables future RES develo
Slide 8: Strategy
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy 8
Slide 9: Terna's strategic approach
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy Terna’s strategic approach Boosting Investments Further acceleration on grid investments Energy Transition Enabling the Energy Transition Sustainable approach to support stakeholders Sustainability and local communities Transformation Development
Slide 10: Domestic Regulated Activities (1/2)
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy Domestic Regulated Activities (1/2) DOMESTIC REGULATED CAPEX1 RAB EVOLUTION2 €bn €bn Locked-in CAGR2020-2025 6% 8.9 capex plan 21.8 FROM 2025 7.3 Further growth 16.7 from National 16.1* Development Plan Plan New Plan 2020 2021 2020-2024 2021-2025
Slide 11: Domestic Regulated Activities (2/2)
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy Domestic Regulated Activities (2/2) CATEGORY CUMULATED CAPEX MAIN PROJECTS ~70% Development 5.4€bn To support NECP* ▪ Tyrrhenian Link ▪ Solving grid congestions targets ▪ SA.CO.I 3 ▪ RES integration ▪ Quality of Service Asset Renewal 2.4€bn ▪ Qua
Slide 12: Non Regulated Activities
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy Non Regulated Activities SOLUTIONS PORTFOLIO MAIN ACTIONS High Voltage ▪ Grid Infrastructure ENERGY Reinforce Energy Solutions to support SOLUTIONS Smart Grid ▪ Avvenia the Energy Transition ▪ Services Connectivity and Computing ▪ Hosting / Housi
Slide 13: International Activities
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy International Activities PROJECTS IN OPERATION ▪ 230 kV, 158 km ▪ 500 kV, 355 km Brazil ▪ Commissioned in October 2018 Brazil ▪ Commissioned in April 2019 ▪ 30-year concession ▪ 30-year concession ▪ 500 kV, 214 km Uruguay ▪ Commissioned in Octobe
Slide 14: New Ways of Working
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy New Ways of Working IMPACTS MAIN ACTIONS Ensure adequate Real Estate optimization infrastructures Promote sociality and Flexibility increase New corporate culture Ways of Logistics benefits and quality of life Working Review training methods Carb
Slide 15: Innovation & Digitization
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Strategy Innovation & Digitization INVESTMENTS TECHNOLOGICAL ENABLERS Enabling Innovation Optimization of asset System security Infrastructures utilization ~5% ~10% TLC Enabling New Normal Infrastructure ~16% System efficiency ~7% Transparency Cybersecuri
Slide 16: 2021 – 2025 Group Financial Targets and Dividend Policy
INDUSTRIAL PLAN 2021-2025 November 19th 2020 2021 – 2025 Group Financial Targets and Dividend Policy 16
Slide 17: Guidance 2021 and 2025
INDUSTRIAL PLAN 2021-2025 November 19th 2020 2021 – 2025 Group Financial Targets and Dividend Policy Guidance 2021 and 2025 FY 2020* FY 2021* FY 2025* Guidance Guidance Guidance €bn €bn €bn Confirmed 2020 guidance Revenues 2.49 2.57 3.04 EBITDA 1.79 1.84 2.21 Capex1 9.2 1.3 1.4 Cumulated 2021-2025 E
Slide 18: Dividend Policy
INDUSTRIAL PLAN 2021-2025 November 19th 2020 2021 – 2025 Group Financial Targets and Dividend Policy Dividend Policy € cents CAGR 8% 75% PAYOUT Floor 2020 2021 2022 2023 2024 2025 Enhancing shareholders value 18
Slide 19: Financial Efficiency and Financial Structure
INDUSTRIAL PLAN 2021-2025 November 19th 2020 2021 – 2025 Group Financial Targets and Dividend Policy Financial Efficiency and Financial Structure ▪ Gross Debt @ 84% Fix rate1 ▪ Net Debt / RAB2 <60% over the Plan ▪ Average Cost of Net Debt 2021-2025 @ 1.3% ▪ Average duration of ~5 years1 ▪ Strong com
Slide 20: Final Remarks
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Final Remarks 20
Slide 21: Enhancing TSO central role in the energy transition
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Final Remarks Further acceleration on domestic core activities to allow the transition towards sustainable energy Maintaining a low risk profile and limited capital absorption in non regulated and international Guarantee financial stability Ready for new
Slide 22: Opportunities enabling system evolution
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Final Remarks Further potential developments: other 10-year horizon strategic opportunities not included in the Plan Technical TSO assets Potential additional opportunities perimeter expansion Development of potential new projects in Hydro Pumping Storage
Slide 23: Annexes
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Annexes 23
Slide 24: P&L Targets
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Annexes P&L Targets REVENUES EBITDA €bn €bn CAGR >4% CAGR >4% 3.04 2.21 2.49 2.57 ∼17% ∼7% ∼15% ∼15% 1.79 1.84 ∼5% ∼4% ∼85% ∼85% ∼83% ∼95% ∼96% ∼93% 2020 2021 2025 2020 2021 2025 Regulated Other* EPS CAGR >5% *Non Regulated and International Activities 24
Slide 25: Operational Efficiency
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Annexes Operational Efficiency OPEX / EQUIVALENT ASSETS* HEADCOUNT / ASSETS 6% 70.0 5% 5% 5% 69.0 5% 9.1 9.0 31.0 9 8.6 68.0 30.0 4% 7 67.0 29.0 68.0 5 29.7 3% 66.9 67.0 66.0 28.0 3 28.4 65.0 1 27.9 2% 64.0 -1 26.0 1% -3 25.0 63.0 -5 24.0 0% 62.0 2020 202
Slide 26: Terna's Sustainable Management Approach (1/2)
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Annexes Terna’s Sustainable Management Approach (1/2) Terna's main goal is to create the necessary conditions to reach the NECP target of 55% RES share on electricity consumption by 2030, compared to the current 35% Terna already top performer in sustaina
Slide 27: Terna's Sustainable Management Approach (2/2)
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Annexes Terna’s Sustainable Management Approach (2/2) 2019 Target Safety Index ≤1 1 ≤1 km of overhead lines Since 2005, Terna removed 2 180 488 has been monitoring km of new underground sustainability KPIs and undersea lines 2 46 608 Green capex 203€mn >6
Slide 28: Disclaimer
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Disclaimer THIS DOCUMENT HAS BEEN PREPARED BY TERNA S.P.A. (THE “COMPANY”) FOR THE SOLE PURPOSE DESCRIBED HEREIN. IN NO CASE MAY IT BE INTERPRETED AS AN OFFER OR INVITATION TO SELL OR PURCHASE ANY SECURITY ISSUED BY THE COMPANY OR ITS SUBSIDIARIES. THE CO
Slide 29: Notes
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Notes 29
Slide 30: Notes
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Notes 30
Slide 31: Notes
INDUSTRIAL PLAN 2021-2025 November 19th 2020 Notes 31
Slide 32: Investor Relations contact
INDUSTRIAL PLAN 2021-2025 November 19th 2020 investor.relations@terna.it I +39 06 8313 8282 I www.terna.it 32