A2A S p A : Board of Directors has examined and approved the quarterly Financial Information as at September 30, 2020

PRESS RELEASE - November 12, 2020

A2A S.p.A. Board of Directors has examined and approved the quarterly

Financial Information as at September 30, 2020

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Capex at 413 million euro, up 5% on

the record levels of 2019 (394 million euro)

EBITDA at 822 million euro, a decrease of 64 million euro on the first nine months

of 2019 (-7%)

Net of non-recurring items, Ordinary EBITDA was 818 million euro, down 42

million euro (-5%)

The effects of COVID-19 mainly affected the Generation and Trading BU (-44

million euro)

in connection with the energy scenario

Group net profit amounted to 219 million euro (250 million euro

at September 30, 2019)

NFP at 3,381 million euro.

Excluding change in perimeter, the NFP amounted to 3,249 million euro

(3,154 million euro at December 31, 2019)

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Milan, November 12, 2020 - At today's meeting of the Board of Directors of A2A S.p.A., chaired by Marco Patuano, the Board examined and approved the quarterly Financial Information as at September 30, 2020.

The A2A Group closed the first nine months of the year with appreciable results, despite operating in a highly complicated context, characterised by the continuation of the health and economic emergency following the COVID-19 pandemic.

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"In evaluating the results of these first nine months" - Chief Executive Officer Renato Mazzoncini comments - "we are particularly satisfied with operational results: despite the emergency and the difficulties caused by the pandemic, we have been able to ensure continuity and quality of our services, guaranteeing the protection of our employees' health and laying the foundations for future development through capex higher than those realised in the first 9 months of 2019.

The economic and financial results achieved in an unprecedented context confirm the solidity of the Group and its resiliency. The decline is mainly due to the Generation and Trading BU, significantly affected by an extremely weak energy scenario, whose impact has been mitigated not only by the multiple sources of production but also by a wise hedging activity carried out during the previous months. In spite of a declining gas and energy prices scenario" - Mr Mazzoncini continues - "the Group draws its strength from the differentiation of its businesses and the close tie with the territories, which allow us to look to the coming months without undue concern".

The emergency situation has had major impacts on the world economic and financial situation, albeit with a different degree of intensity over the months.

The epidemiological curve and related containment measures have, in fact, in the period in question, had a direct impact on the economic scenario: a major decline in spring when the suspension of economic activities was set, followed by a slight recovery in the summer months. More specifically, in the third quarter, the Italian economy recorded a strong recovery in the manufacturing segment and shy signs of improvements in exports, which fostered an improvement in certain consumer and price indicators, with partial recovery and in any case lower than last year.

As regards energy consumption in particular, the net demand for electricity in Italy during the first nine months of 2020 was 225,154 GWh, showing a decline of 6.9% on the volumes recorded for the same period of 2019 (81,640 GWh in the third quarter of 2020, -3.1% on the same period of 2019); during the first nine months of this year, moreover, the gas demand dropped by 8% on the same period of 2019, coming in at 49,567 Mcm (13,722 Mcm in the third quarter of 2020, in line with the same period of last year).

During the first nine months of 2020, the decrease already in progress of energy commodity prices was accentuated by the health emergency: the PUN (single nationwide price) recorded extremely low values, with all-time lows for both May, with a list price of 21.79 euro/MWh and June with 28.01 euro/MWh, before then starting to rise, in September reaching a value of 48.80 euro/MWh. During the nine months, the Base Load PUN declined by 33.8%, coming in at 35.6 euro/MWh as compared with

53.8 euro/MWh in 2019; declining average list prices were also recorded for the price in peak hours (- 32.2% for the Peak Load PUN, which came in at 39.9 euro/MWh). The average gas price to the PSV in the period in question amounted to 9 euro/MWh, down by 45.6% compared to the same period the previous year.

In this context characterised by highly critical consumption and price dynamics, despite the signs of recovery seen in the third quarter, the A2A Group has managed to achieve satisfactory economic- financial results, limiting the reduction in margins and guaranteeing a level of capex even higher than the previous year, which had already booked record values for the company, with high quality of services supplied and safety for its employees.

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The following are the main indicators:

millions of euro	9 months of 2020	9 months of 2019		Δ%
Revenues	4,805	5,380	-575	-10.7%
Gross operating margin - EBITDA	822	886	-64	-7.2%
Net Operating Income - EBIT	400	452	-52	-11.5%
Group net profit	219	250	-31	-12.4%

In the first nine months of 2020, the Group Revenues amounted to 4,805 million euro, down 10.7% on the first nine months of last year.

The reduction mainly regarded the wholesale energy market following both the lesser prices of electricity and gas and the reduction in volumes sold on the industrial gas portfolio, as well as the retail gas and district heating markets for the lesser unit prices and lesser quantities sold, also due to the worse climate conditions. A negative contribution also came from the revenues relative to tariff contributions recognised to distributors for the cancellation of the obligation of energy efficiency certificates (EECs), due to the postponement of the related deadline from May to November.

EBITDA equalled 822 million euro, a decrease of 64 million euro compared to the first nine months of 2019 (-7.2%).

Net of non-recurring items (+4 million euro in the first nine months of 2020; +26 million euro in the same period of 2019), ordinary EBITDA decreased by 42 million euro (-5%).

The reduction in the ordinary result was mainly determined by the decrease in margins recorded in the Generation and Trading Business Unit, penalised, as just mentioned, by a very weak energy scenario.

EBIT, amounting to 400 million euro, was down by 52 million euro compared to the first nine months of 2019 (452 million euro). The change was due to:

• decrease in EBITDA, as described above (-64 million euro);
• increase in amortisation/depreciation mainly in relation to capex made in the period October 2019 - September 2020 and the write-back of the A2A Gencogas plants following impairment testing at December 31, 2019 (-33 million euro);
• write-offfor 43 million euro booked during the third quarter of 2019 in relation to the Grottaglie landfill as a consequence of the reduced future capacity to generate income on the basis of the judgement given by the Council of State on August 28, 2019 (+43 million euro);
• net provisions deriving from lesser provisions made for risks during the year and greater releases of surplus provisions for risks and receivables made the previous year (+2 million euro).

Group Net Profit in the first nine months of 2020 amounted to 219 million euro, down 12.4% on the same period of 2019. This change is due both to the reduction in EBIT, for the reasons specified above, and to the increase in the portion of profits attributable to minorities, mitigated by the reduction in net financial expense and tax.

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Net Financial Position at September 30, 2020 amounted to 3,381 million euro (3,154 million euro as at end 2019). Excluding changes in scope that took place during the first nine months of 2020, NFP came to 3,249 million euro, recording cash absorption of 95 million euro on December 31, 2019.

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A2A Group - Results by Business Unit

The following table shows the composition of the Ebitda by Business Unit:

Millions of euro	09.30.2020	09.30.2019	Change	Change %
Generation and Trading	174	218	-44	-20.2%
Market	155	169	-14	-8.3%
Waste	211	199	12	6.0%
Networks & District Heating	304	319	-15	-4.7%
International	-1	-2	1	n.s.
Corporate	-21	-17	-4	23.5%
Total	822	886	(64)	-7.2%

Generation and Trading Business Unit

In the first nine months of 2020, the Generation and Trading Business Unit contributed to fulfil the sales demand of the A2A Group through production by the plants it owns amounting to 12.5 TWh (13.3 TWh at September 30, 2019).

Thermoelectric production came to 9.2 TWh (9.9 TWh during the same period of the previous year): the negative change is due to the prolonged downtime of the Monfalcone plant, penalised by an insufficiently remunerative pricing scenario, and lesser production by combined cycle plants as a result of the reduction in contestable demand.

The hydroelectric production, equal to 3.2TWh, was slightly down compared with the same period of last year (-1.4%). July and August 2019 had benefited from significant increases in production thanks to the contributions made by the basins of Calabria and the plants in the northern zone.

Finally, photovoltaic production is up by 7%, coming in at approximately 109 GWh.

The revenues amounted to 2,670 million euro, down by 580 million euro compared to the same period of the previous year. The change was brought about by the major decline in prices of both electricity and gas and the lesser volumes sold of the industrial gas portfolio, partly offset by the growth of electricity volumes sold.

The EBITDA of the Generation and Trading Business Unit amounted to 174 million euro, a decrease of 44 million euro compared to the same period of the previous year. Before non-recurring items (+9 million euro in 2020 and +4 million euro in 2019), ordinary EBITDA dropped by 49 million euro.

The reduction in margins of the Generation and Trading Business Unit is due to a negative commodity pricing scenario (PUN; GAS; EUA), partially neutralised by the effectiveness of the hedging policies, and to the lesser contestable demand due to the COVID-19 health emergency. The comparison with the previous year, moreover, is very much penalised, particularly during the third quarter, by the results achieved in 2019 on the ancillary services market and in hydroelectric production.

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