September 9th, 2014

Investor Presentation

Business and Financial Overview

3

2iRG at a glance

2iRG is the #2 player in the Italian gas distribution market

63.9% 21.3%

F2i I Finavias

FRI

99.906%(2)

8.1% 6.6%

F2i II Axa I. H.(1)

Regional presence (#) 18

ATEM presence (#) 137(5)

Re-delivery points (“rdp") (m) 3.8

Distributed volumes (bcm) 5.9

Municipalities under management (#) 1,961

Employees (#) 2,042

Net Invested Capital (€ bn) 2.5

Grid extension ('000 km) 57

Gross capex (€ m) 136

The Group(3)

Current Group Structure

Main Operating Data(4)

2iRG Corporate History

Source: Company data. Note: (1) AXA Infrastructure Holding; (2) 0.094% Minorities and treasury shares; (3) The Group including subsidiaries GP Gas S.r.l., Italcogim Velino S.r.l. (in liquidation) and Italcogim Trasporto S.r.l.; (4) 2013 data; (5) Out of 177 “multi-municipality areas” (Ambiti Territoriali Minimi or “ATEMs”),indicated by the Ministry of Economic Development (“MED”)

2000

Enel Rete Gas (today 2iRG) entered the gas distribution business

80% of 2iRG acquired from Enel

In December, Enel minority in 2iRG bought out through FRI2

2009 2011 2013

Acquisition E.On Italia distribution gas and G6 Rete Gas

~2.2m

~1.6m

Clients growth

~3.8m

4

Overview of Italian gas market

Liberalized market with an independent regulatory Authority

Storage Transport (national

and regional) Distribution

Retail sales and small/medium

industries Import

Production

62.0 Capacity: 15.6 70.1 34.4

Industrial users Power stations

Data in bcm

(2013)

Upstream Midstream Downstream

Market structure

Players •Eni, Edison, Enel and

others

•Snam (Stogit), Edison •Snam (Snam Rete

Gas), SGI

•Snam (Italgas), 2iRG,

Hera, A2A and others

•ENI, Enel ,Edison and

others

Concentrated market with opportunistic competition Fragmented market

with accelerated

consolidation

Market dominated by

few players

Value chain

Regulatory Authority

• Authority for Electricity, Gas and Water (“AEEGSI”)

•Tariffs; Access conditions and Quality of service and safety

7.7 21.2 14.5

Source: MED and Company Data

34.4

5

Italy is the 3rd largest gas market in Europe…

With a total natural gas consumption of 70.1 bcm, Italy is the third

largest European market after Germany and UK

The relative weight of infrastructure costs, as part of the Italian gas

price composition, is the lowest across the main European

countries (15%)

• In particular, the impact of the distribution infrastructure on the

end users’ price is very limited (12% in total, including system

charges)

One of the largest gas markets with low infrastructure costs

88,5 79,2

70,1

46,1 40,3

30,9

Germany UK Italy France The Netherlands

Spain

Gas Consumption in EU (Data in Bcm, 2013) – Top Six Countries

45,34 50,36 42,12 39,69 36,70 36,63

14,01 19,31

15,80 18,80 12,51 12,21

30,93 13,43

14,29 10,44 16,31 2,91

1,56 0,84 3,01

0,70 2,45

6,39

Italy Spain Belgium France Germany UK

58.14 67.97 69.63 75.22 83.94 91.84

Data in € cents/cm

Natural Gas Price Analysis – European Comparison

Raw material and commercial Tax System charges Infrastructure Raw material Tax System charges Infrastructure Commercial-

Retail

Commercial-

Wholesale

3,7%

10,4%

1,2%

Infrastructure

Distribution

Transport

Storage

15,3%

41,5%

3,9%

3,9%

33,7%

1,7%

Breakdown of Natural Gas Price in Italy

Source: Company data and Elaboration of AEEGSI Annual report 2013

6

Market Shares by Network Length(1) (2013)

2iRG is the 2nd largest gas distribution operator in

Italy

Distribution network consisting of approx. 57,000km

Distributing approx 5.9bcm of gas in 2013

3.8m customers across 1,961 municipalities

Mkt share%

23%

22%

6%

3%

3%

3%

2%

2%

35%

In ‘000 km

Others

Mkt share%

17%

6%

5%

4%

2%

2%

1%

35%

In m

Others

Source: Company data and AEEGSI

Note: (1) Italgas data includes 100% Napoletana Gas, 49% AES, and 48% Toscana Energia; Hera includes 100% Acegas-APS; IREN includes 100% IREN Emilia and Genova Reti Gas and 51% AES; (2) Including GP Gas network

2iRG is well positioned to grow in the Italian market thanks to the upcoming tender process

Market Shares by Rdp(1) (2013)

28%

…Where 2iRG plays a leading role

(2)

89,6

5,8

6,2

6,6

7,5

8,2

16,0

56,6

57,1

1

2

3

4

5

6

7

8

9

7,9

0,3

0,4

0,5

0,9

1,2

1,4

3,8

6,5

1

2

3

4

5

6

7

8

9 56.9% 18.5%

24.6%

Tot:

22.7 m

Geographical split of RDP (%)

Central Italy Southern Italy Northern Italy

7

Remuneration regime: a transparent and established methodology

Local Net Invested capital or “Local RAB” (Historical revaluated cost )

WACC

Distribution:

6.9%

WACC Metering:

7.2%

The depreciation is calculated based on

depreciation schedules provided by the

Regulator and differentiated for each asset

category

Distribution

activities

Metering

activities Commercial

activities

(addressed to

gas sales

companies) Metering

reading

activities

Regulator applies a € amount per redelivery point

% weight on

revenues

Centralised Net Invested capital or “Centralised RAB” (i.e. IT, headquarters etc,

calculated by a parametric approach)

Allowed Revenues or VRT (“Vincolo Ricavi”)

Return on RAB Depreciation Operating Costs

RAB WACC Technical Life of the Assets Distrib.on Metering Comm.al

35%

30%

~35% ~35% ~30%

Regulation protects from volume risk RAB and Depreciation yearly updated by gross investment deflator

Operating costs updated yearly by CPI and X-factor

8

Main acquisitions completed:

Gruppo Camuzzi (2002): approx. 1,000k clients

E.On Rete (2011): approx. 600k clients

G6 Rete Gas (2011): approx. 1,000k clients

Significant efforts to integrate all acquired companies in terms of organisational structure, approach with local municipalities, ICT, accounting and

administrative systems

Jan.

2000

Apr.

2000

Oct.

2000

Nov.

2000

Dec.

2000

Jan.

2001

Mar.

2001

May.

2001

Jul.

2001

May.

2002

Jan.

2004

Oct.

2004

Dec.

2004

Oct.

2005

Jan.

2006

Dec.

2007

Feb.

2008

Apr.

2011

Sep.

2011

Mar.

2013

Clients, in ‘000 ~3,800

Source: Company data

F2i and ARDIAN

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

To

tal p

ost

Colo

mb

o …

Cam

iga

s

Gru

pp

o B

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nza

Ero

ga

su

d

Sic

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dilg

eo

Com

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iga

s

Me

tan

su

d

So

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ga

s

Imp

reg

est

SG

M

Ag

as

Gru

pp

o

Rip

am

on

ti

Gru

pp

o M

arc

ott

i

Gru

pp

o C

am

uzzi

Sic

ilme

tan

o

Ott

og

as

Ita

lge

stio

ni

Me

tan

od

ott

i P

ad

an

i

Sim

eo

Me

tan

sic

ula

GP

Ga

s

E.O

n R

ete

G6

Rete

Ga

s

To

tal

Acquisitions And Integrations Completed

Successful track record of business integrations

Significant experience in delivery integration targets

~120 companies acquired

9

Growing financial performance

Revenues (1) (in € m)

Fully regulated revenues and EBITDA

Data referred to 2i Rete Gas only

EBITDA (in € m) EBIT (in € m)

730715

470

398

318

2012 2011 2013 2009 2010

383367

271

225

161

2009 2012 2010 2011 2013

238216

163125

61

2013 2011 2012 2009 2010

Source: Company data. Note: (1) Net of IFRIC 12 effect

10

Supporting growth and preserving sounding capital structure

Pre-Refinancing Debt Structure

Financial Strategy

Well positioned to increase tenor and maturity flexibility

EMTN programme established

Subscribed €0.4bn Capex/RCF line with a group of 6 major

banks with a 5 year tenor

Maturity coherent with business profile

Stable presence in Capital Markets

Financial Flexibility

Note: (1) Including financial debt at FRI and FRI2 level (2) Of which €210 m referred to HoldCo not drawn yet (line already committed)

Current Debt Structure (1)

Bond:

€750m

Bond:

€600m

Term loan:

€750m (2)

1,50% + EUR 3m

Fixed 1,75%

Fixed 3,00%

Jul

2019 Jul

2024 Today

~1.755

Debt

MtM IRS

210

Bank loan

(2iRG)

2.100 ~135

Bank loan

(HoldCos)

750

1.350

Bank facility

(2iRG)

Bonds

Debt

2.100

~4,4%

Cost of debt

€ m € m

Cost of debt

~2,3% ~90 m€

~50 m€

Strategy Highlights

12

Gas distribution market is still fragmented

Main players within the Italian markets are: (i) large Italian energy

and utility players, (ii) local utilities; (iii) small operators controlled

by local municipalities and (iv) private companies

Over the last few years, the market has experienced a

consolidation wave that reduced the number of distributors (from

780 in 2000 to 229 in 2013)

Although the number of players remains sizeable, the market is

increasingly concentrated: the 35 “very large” and “large” players

control 83% of the market in terms of volumes distributed

Legislative framework in place to achieve further consolidation with

the creation of 177 ATEMs

Italgas

2i Rete Gas

IREN

A2A

Ascopiave

Hera

Toscana Energia

No dominant distributors

Other distributors

No gas area

Size Pdr (#) Distributors (#) Volumes

Distributed

Very large > 500 k 8 (5 groups) 57%

Large < 500k ; > 100k 27 26%

Medium < 100k ; > 50k 19 6%

Small < 50k ; > 5k 112 10%

Very small < 5k 63 1%

Source: AEEGSI, MED and Snam Rete Gas data

Note: (1) Based on 177 ATEMs

A consolidation process is under way where size is a key factor

Dominant geographical presence and Distributors’ Clusters (1)

Evolution of # Distributors (2000-2013)

-71%

?

780 716 693

560

480 430

360 338 295

259 246 239 236 229

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2019

13 13

• 2iRG currently present in 1,961 concessions

spread over 137 out of 177 ATEMs

• 2iRG expects to be awarded with ~ 45

ATEMs by 2019

>50%

<25%

25-50%

137 ATEMs

(partially managed)

45-50 ATEMs

(fully managed)

ATEM tenders 2015-2019

Growth strategy through ATEM tenders based on Group nationwide presence

Low concentration

risk

Perugia concession: 2%

Top 3 concessions: 5%

Top 10 concessions:11%

Very

high

Probability of

won tenders

High

Low

Very

low

No

Current presence in ATEMs (2014) Expected RDP growth also following ATEM tenders

177Total ATEM

No presence

Strong

competition

~40

Limited

presence ~55

~25

~30

Duopoly

Dominant

position

~30

• Exit from ATEMs where the Group has a limited

/ no presence, strengthening presence where it

has already a dominant position/duopoly and

in some of the ATEMs in strong competition

14

First pioneer in Italy adopting smart meters: tlaunched a pilot project (“Progetto Avogadro”) that envisages the installation of ~20,000 electronic meters in Biella

2iRG has planned to install the new meters in a town of Center Italy and further 21 municipalities

The development and deployment of smart meters will introduce a significant innovation in the sector and will significantly improve the quality provided:

• Better information to the clients about own consumption

• Reduction of operating costs related to reading activities at client’s site

• Use of remote information for commercial activities and management in remote of certain activities (switch, closure of clients’ accounts, etc)

100% of high volume

meters

26.300

51.000

75.500

2013 2014E 2016E

1.600 115.000

2.600.000

2013 2014E 2018E

60% of mass market

meters

Selected investments to increase profitability

in a mature business

High volume smart meters – Installation plan (cumulated figures)

Mass market smart meters – Installation plan (cumulated figures)

Metering RAB with higher remuneration (7,2%)

15

Source: Company data

More competitive cost structure

Synergies

Internalization of staff functions

One integrated Headquarter to exploit companies resources at group level

Internalization of previously out-sourced services leveraging on HR synergies arising from integration project

Reach 2iRG full independence: from being a branch of ENEL S.p.A. to becoming a stand-alone company

Rationalize and industrialize field operations

Rationalize organizational structure on the Field

Centralize technical activities at regional level

Introduce IT tools to manage local workplace remotely

0

5

10

15

20

2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E

€ m

16

Disciplined investment policy for sustainable growth

2iRG plans to grow while protecting a solid credit profile

1

Growth through ATEM

tenders in Italy

Supportive regulatory framework

addressing concessions’ renewal,

market concentration and asset

value protection

Dominant position in north-western

and south-eastern Italy, where the

2iRG will strengthen its presence

and leverage any potential economy

of scale

Optimisation of concession portfolio

2 Investments to

increase profitability in

a mature business

Capex driven by new redelivery

points as well as maintenance of the

existing network

Pioneer in adoption and deployment

of smart metering

3

More competitive

cost structure

Continuous focus on operating and technical excellence

Reaping the benefits from significant in-sourcing after ownership changes and synergies from integration

Economies of scale arising from ATEM tenders

Savings from investments in smart meters and ICT infrastructure

~ €1.6bn of investment plan up to 2019

17

Growth sustained with a solid capital structure with an attractive shareholders return

Interest rate policy

Limited exposure to interest rates

The Group targets a capital structure with a minimum level of 65% of fixed rate debt

The remaining floating rate exposure will not be hedged as the Company considers its WACC-related

revenues as a natural hedge

The Group targets a level of Net Debt / RAB of ~60%

BBB/stable (S&P), Baa2/stable (Moody’s)

2iRG required to keep a solid investment grade credit profile by its shareholders

Debt maturity coherent with business and regulatory profile

Leverage and rating

Management strongly committed to financial discipline

Shareholder return Regular and predictable cash returns to its shareholders in the form of cash dividends

Dividend yield in line with main peers

Capex policy

Significant discretion over the scheduling of capex programme

Optimised capex planning due to RAB remuneration and recovery value at termination

Flexibility of financial capital structure to sustain capex plan

Appendix

19

Key Financials

P&L

€m 2012 2013

Distribution and other 591.6 590.9

Connection fees 24.0 22.4

Other sales and services 19.7 23.2

IFRIC 12 133.0 116.4

Other revenues 79.6 93.3

Total Revenues 848.0 846.3

Labour cost (110.2) (111.3)

Raw material cost (31.4) (32.0)

Service cost (256.3) (226.4)

Other costs (64.4) (76.3)

Provisions (20.1) (18.5)

Incr. in fixed assets not subject to IFRIC 12 1.7 0.9

Total costs (480.7) (463.6)

EBITDA 367.2 382.6

EBITDA % (ex IFRIC 12 impact) 51.4% 52.4%

EBIT 216.4 238.5

EBIT % (ex IFRIC 12 impact) 30.3% 32.7%

Net Income 67.3 79.2

Balance Sheet

€m 2012 2013

Net fixed assets 2,381.5 2,388.5

Net working capital 62.1 97.9

Total provisions (7.4) (30.2)

Net invested capital 2,436.2 2,456.2

IRS unwinding 36.2 30.2

Net Financial Position 1,584.1 1,587.8

Shareholders' equitiy 816.0 838.2

Total Sources 2,436.2 2,456.2

20

Disclaimer

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