snam.it

2016 3Q ResultsMilan, November 15th , 2016

2

2016 3Q Consolidated

ResultsHighlights

Outline

Weather-adjusted gas demand up 2.3% driven by:

• Industrial sector (+3.1%) with evidence of a moderate production recovery.

• Thermoelectric (+6%), with lower imports, hydroelectric• Residential consumption contained by energy efficency

initiatives

3

Gas demand trends

19,1 18,4

11,9 12,3

15,2 16,2

1,4 1,5

9M 2015 9M 2016

19,9 19,6

11,9 12,3

15,2 16,2

1,4 1,5

9M 2015 9M 2016

Residential& commercial

Industrial*

Thermoelectric

Other Sectors

GAS CONSUMPTION (bcm)

+2.3%

49.648.5

* Includes: NGV, Agriculture and Non-Energy Use Source: National Transport Network Balance

Weather adjusted

+1.3%

48.447.7

GAS INJECTED

51.4 bcm+3.0% vs 9M 2015

4

Operational highlights

Transport• Capex in line with targets• New balancing regime in place

Storage• 100% of the offered storage capacity conferred• Record working gas storage (98% of available capacity) achieved Oct 2016• Capacity: 16.5 bcm +3.1% vs Sept 2015

LNG• Seasonal price differentials driving summer demand for LNG• LNG cargoes returned to Italy and Panigaglia in the last six months

€ 512 Mn invested in the first 9 months of 2016 o.w. 47% in development initiatives

4 LNG cargoes to Panigagliabetween May and July totalling264.000 liquid cubic meters

+5% Working gas CAGR 2008 to 2016 (+0.5 bcm compared to 2015)

5

Corporate highlights

Corporate activity• Italgas demerger achieved• New organization

Liability management executed in October• Faster cost of debt reduction• Maturity extension and lower refinancing risk

Share Buyback initiated• Flexible instrument to optimize financial structure• Agency Agreement signed for first 4-month tranche

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Gas Connect Austria

Rationale for the acquisition

• Consolidate Snam’s position in a key country for the interconnection of European natural gas markets

• Leverage on decades of experience in Austria, TAG ownership

• Strong financial discipline applied

The deal

• Acquisition completed through a vehicle owned 60%/40% by Allianz and Snam respectively

• Acquisition price of 601 M€• Binding non-recourse financing of 310 M€• Closing of the transaction expected by year-end

900km gas transmission

pipelines,5 compression

stations

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Financial highlights

Solid 9M results• Revenues in line with expectations (€2.469bn, -4,2% owing to new

regulatory WACC)

• Increased investments (capex €842m, +5%)

• Strong free cashflow generation (€669m)

FY 2016 (Snam pro-forma) Guidance confirmed• 0.9bn€ capex

• 19.5bn€ consolidated RAB

• 0.8bn€ adjusted net income

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Outline2016 3Q

ConsolidatedResults

Highlights

9

9M 2016 consolidated results

REGULATED REVENUES EBIT NET PROFIT

CAPEX FREE CASH FLOW NET DEBT

€ 2,469mn

-4.2% vs 9M 2015

+5% vs 9M 2015

€ 1,296mn

€ 783mn

€ 669mn

€ 14.0bn

-12.0% vs 9M 2015 -11.8% vs 9M 2015

€ 842mn

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Ebit Analysis

[ € mn ] -176 € mn-12.0%

EBIT2015 9M

Regulatedrevenues

Controllable fixedcosts

Depreciation &amortisation

Other EBIT2016 9M

1,4721,296

-108

+4

-36 -36

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Net Profit Analysis

[ € mn ] -105 € mn-11.8%

Net profit2015 9M

EBIT Net InterestIncome

(expenses)

Net Income fromassociates

Income taxes Net profit2016 9M

888783

-176

+22 +2+47

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Snam debt structure

• Fixed/variable rate debt: 58% / 42%

• M/L Term debt maturity: ca. 4.4 years

• Bondholders’ Meeting on the separation of Italgas from Snam

• Consent solicitation launched on 8.6bn€ outstanding bonds

• Approval of the separation with a vast majority

• Liability management executed in October paves the way to further cost of debt reduction going forward

Pool banking facilities

Bilateral banking facilities

Debt capital market

Institutional lenders financing

EXISTING DEBT as of 30 September 2016 (€ bn)

BOND MATURITY PROFILEas of 30 September 2016 (€ bn)KEY FIGURES

14.0

3.2

8.8

2.7

1.6

Net debt9M 2016

Total committedcredit facilities and

bonds

16.3

0

200

400

600

800

1000

1200

1400

1600

2016 2017 2018 2019 2020 2021 2022 2023 2024

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2016 9M: cash flow and change in net debt

783

1,686

669

-206

+683

+220

-1,017

-875

€m

FreeCash Flow

2016 9M

Netprofit

Depreciation& otheritems

Change inworkingcapital

Cash Flowfrom

operation2016 9M Cash Flow

2016 9M

Netinvestments

Shareholder's equity

Net financialDebt 2015

Net financialDebt

2016 9M

Cash Flow2016 9M

Non cashfinancials

items

€m

Cash flow Change in net debt

240 €m

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Driving balance sheet efficiency

Resizing and reshaping of Snam debt structure

following the 3.6 bn€ received from repayment of

intercompany/assigned debt by Italgas

Increasing the average maturity of debt, smoothing

the Company’s maturity profile and pro-actively

managing upcoming redemptions

Taking advantage of the market conditions to reduce

the average cost of debt (from 2017 onwards)

Debt structure

Average maturity

Cost of debt

1 bn€ reduction in ourstanding Bonds

average maturity of M/L term debt:from ca. 4.4 to ca. 5.4 years

Cost of new bonds well below 1%

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Liability Management overview

Timing• Launch: 10 October 2016

• Announcement of the Results: 18 October 2016

• Settlement: 25 October 2016

Highlights• 2.75 bln€ bonds buyback (3.1 bln€ of cash spent)…

• Average residual maturity: ca. 3.3 years

• Average yield: ca. 3.8%

• …financed via a mix of existing credit lines and new

bonds:

• 1.25 bln€ 10Y Oct- 2026 - 0.875% coupon

• 0.5 bln€ 4Y Oct- 2020 - 0% coupon

• ca. 1.35 bln€ from already available banking lines

average yield: 0.7% average maturity: 8.3 years

Residual Amount outstanding

Oct -16 New issues Amount repurchased

Bond Maturity Profile after October 2016

0,0

0,5

1,0

1,5

2,0

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

(bln €) Liability Management Transaction

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Q & A S e s s i o n

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A n n e x e s

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GCA overview

• Founded in Jan 2012 as wholly owned subsidiary of OMV

• One of the two Transport System Operators (TSO) in Austria

• Owns and operates 886 km of high pressure pipelines linking Germany, Hungary, Slovenia and Slovakia

• Plays an important part in the Austrian and European gas supply network

• Holds equity stake in several key infrastructure companies

CGAat a

glance

2012

Certified ITO and market area

manager for the Eastern market area by Austrian

regulator

September2014

GCA’s Trans Austria Gasleitung (TAG)

pipeline transferred to Austrian TSO Trans Austria Gasleitung

GmbH

September2016

Agreement for the sale and purchase of a 49% minority stake

in Gas Connect Austria GmbH (GCA) signed by OMV and

the Consortium composed of Allianz

andSnam S.p.A.

• Competitive auction process for the 49% stake in GCAstarted by OMV in Q2-2016.

• Snam and Allianz Capital Partners (ACP) formed a Consortium in Q3-2016 to jointly bid for GCA.

• Total cash consideration paid to OMV equal to 601 M€, including 147 M€ pro-quota reimbursement of existing GCA shareholder loan

• Binding non-recourse financing of 310 M€ granted to the Consortium by a pool of international banks

• Acquisition completed through a jointly controlled vehicle owned 60%/40% by Allianz and Snam respectively

• Closing of the transaction expected by year-end

Ownership Transaction structure

19

vehicle

60% 40%

Senior Loan

financing

49%GCA

51%Pool of banks

TAG GmbH

15.5%

84.5%

Transaction structure

9M 2015 9M 2016 ∆ %Transport Gas injected into the network (bcm) 49.9 51.4 +3.0

Gas pipeline network (km in operation) 32,454 32,455 - -

Storage Storage capacity (bcm)• Modulation • Strategic

16.011.54.5

16.512.0

4.5

+3.1+4.3

- -

Gas moved through storage system (bcm)• Injection• Withdrawal

16.529.327.20

15.859.316.54

-4.1-0.1-9.2

Distribution Gas distributed (bcm) 5.09 4.96 -2.6

Active Gas Metering at redelivery points (# mln) 6.52 6.52 +0.1

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Operational data

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Income Statement

[ € mn ] 2015 9M 2016 9M Change

Revenues 2,748 2,586 - 162

Operating expenses - 640 - 618 +22

EBITDA 2,108 1,968 - 140

Depreciation & amortisation - 636 - 672 - 36

EBIT 1,472 1,296 - 176

Net interest income (expenses) - 277 - 255 +22

Net income from associates 97 99 +2

EBT 1,292 1,140 - 152

Income taxes - 404 - 357 +47

NET PROFIT 888 783 - 105

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Revenues

[ € mn ] 2015 9M 2016 9M Change

Regulated revenues 2,695 2,549 - 146

Transport 1,429 1,326 -103

Distribution 792 754 -38

Storage 343 376 +33

LNG 13 13

Pass-through revenues 118 80 -38

Other revenues 53 37 - 16

TOTAL REVENUES 2,748 2,586 - 162

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Operating Expenses

(1) Net of pass-through costs.

[ € mn ] 2015 9M 2016 9M Change

Regulated activities 601 573 - 28

Controllable fixed costs 374 370 -4

Variable costs 13 16 +3

Other costs 96 107 +11

Pass-through costs 118 80 -38

Non regulated activities 39 45 +6

TOTAL COSTS 640 618 - 22

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Balance Sheet

[ € mn ]Dec, 31

2015Sep, 30

2016 Change

Net invested capital 21,365 21,524 +159

Fixed capital 22,121 22,610 +489

Tangible fixed assets 15,396 15,808 +412

Intangible fixed assets 5,275 5,275 -

Financial receivables held for operating activities 78 164 +86

Equity-accounted and other investments 1,372 1,363 -9

Net working capital -607 -938 -331

Receivables 2,092 1,751 -341

Liabilities -2,699 -2,689 +10

Provisions for employee benefits -166 -166 -

Assets held for sale and directly related liabilities 17 18 +1

Net financial debt 13,779 14,019 +240

Shareholders' equity 7,586 7,505 -81

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Disclaimer

This presentation contains forward-looking statements regarding future events and the future results of Snam that are based on current expectations,estimates, forecasts, and projections about the industries in which Snam operates and the beliefs and assumptions of the management of Snam.

In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return onequity, risk management are forward-looking in nature.

Words such as ‘expects’, ‘anticipates’, ‘targets’, ‘goals’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, variations of such words, and similarexpressions are intended to identify such forward-looking statements.

These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relateto events and depend on circumstances that will occur in the future.

Therefore, Snam’s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that mightcause or contribute to such differences include, but are not limited to, economic conditions globally, political, economic and regulatory developments in Italyand internationally.

Any forward-looking statements made by or on behalf of Snam speak only as of the date they are made. Snam does not undertake to update forward-lookingstatements to reflect any changes in Snam’s expectations with regard thereto or any changes in events, conditions or circumstances on which any suchstatement is based.

The reader should, however, consult any further disclosures Snam may make in documents it files with the Italian Securities and Exchange Commission andwith the Italian Stock Exchange.

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