SNAM: FROM REFINANCING TO OPTIMIZATION OF FINANCIAL

STRUCTURE

GIANFRANCO AMOROSO

HEAD OF FINANCE - SNAM

SNAM: AN INTEGRATED OPERATOR WITH A LEADERSHIP POSITION IN THE REGULATED GAS INFRASTRUCTURE

BUSINESS

Production

Import

Power generation

Industrial

Residential

Stoccaggio Trasporto e

dispacciamento

Rigassificazione Distribuzione

Transportation

• Regul. Revenues: €m

2,087

• EBIT: €m 1,196

• RAB(1): ca. 15.0 €bn

• Network: 32,306 km

• Market positioning: 94%

of the Italian market

Distribution

• Regul. Revenues: €m

1,053

• EBIT: €m 477

• RAB(1) : ca. 5.6 €bn

• Network: 52,993 km

• Market positioning:

33% of the Italian

market

Storage

• Regul. Revenues: €m 4541

• EBIT: €m 318

• RAB: ca. 4€bn

• Capacity: 8 storage sites (16

bcm)

• Market positioning: 96% of the

Italian market

Regasification

• Regul. Revenues: €m 28

• EBIT: €m 5

• RAB: ca. 0.1€bn

• Capacity: 1 LNG plant

(3.5 bcm)

2014

(1) Estimated RAB

SUPPLY INFRASTRUCTURE SALES TO END USERS

Key Financial highlights

• Consolidated RAB: ca. 24.7

€bn

• Mkt Capitalization: ca. 15 €bn

• Net Financial Debt: 13,6 €bn

• Operating Cash Flow: 1,8 €bn

• EBITDA: 2,8 €bn

• Net Profit: 1.198 €m

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Exploiting high-quality investment opportunities in Italy

Focusing on two main European gas corridors

to integrate our diversified and valuable asset portfolio

Maintaining cost control in the context of a growing asset base

Fair balance of interests among all stakeholders

Preserving a solid and efficient capital structure

Selective

investments

Operational

efficiency

Financial

discipline

Sustainable

Business Model

KEY PILLARS OF SNAM’S STRATEGY

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Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Itraxx financial**

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SNAM REFINANCING: THE CONTEXT

Spread 10Y BTP - 10Y Bund 2009- today (bps) Bank cost of funding 2009-today (bps)

esercizio di rifinanziamento di Snam

340

370

285

350

150

220

328

395

286

333

230

299

4Y Bond Jul-2016

(4th July)

6.5Y Bond Jan-2019

(12th July)

5.5Y Bond Mar-2018(10th

September)

10Y Bond Sep-2022(10th

September)

3Y Bond Nov-2015

(6th November)

7,3Y Bond Feb-2020

(6th November)

Snam Italy

2012: THE GRADUAL DELINKAGE FROM BTP LEVELS

Credit spread – comparison Snam-BTP @ end 2012 Credit spread – comparison Snam - BTP

July – September 2012

Delinkage from BTPs

BTPs as a benchmark for Snam bonds

November 2012

110.0

160.0

210.0

260.0

310.0

360.0

3Y 4Y 5Y 6Y 7Y 10Y 11Y 13Y

Snam BTP

2013-TODAY: LOW NOMINAL RATES, REDUCTION OF CREDIT SPREADS AND COST OF FUNDING FOR BANKS

Corporate credit spread (iBoxx) - bps Nominal rates 2013-today (%)

Cost of funding for banks 2013-today (bps)

-0.5

0

0.5

1

1.5

2

2.5

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Euribor 3m IRS 1Y IRS 10Y

0

50

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Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15

Itraxx financial

Media banche italiane

THE OPTIMIZATION PROCESS IN 2013-2014

Source of financing 2013-2014 actions Key themes

DCM

New recourse to Debt Capital Market, both via public

issuances and via private placements, for a total amount

of 4.5 billion euro

Banking facilities

Cancellation of certain relatively expensive and short to

medium term banking facilities

Pool and bilateral banking facilities renegotiation for an

overall amount of ca. 5.0 billion euro

Growing role of uncommitted credit lines for treasury

management optimization

Open and favorable market for Snam

Continuous process of disintermediation of

the banking system

Proactive approach leveraging on long lasting

relationship with core banks and a well-

established bond curve

Opportunistic approach to exploit abundant

market liquidity and ECB’s recent actions

(TLTRO)

Product mix optimization

Wide portfolio of infrastructure projects

potentially eligible for cost competitive and

long term financing

Institutional lenders financing

New funding for 0.65 bn € in 2013

Disintermediation of certain EIB financing for ca. 0.3

billion euro

2015: WHERE WE ARE AFTER 3 YEARS

Bond

Pool banking facilities Bilateral credit facilities

Institutional financing

Snam: our financial structure at End IH 2015 (bln €)

10,8 78%

2.0 14%

1.1 8%

13.9 mld€

13.9

3.2

10.7

1.8

1.1

16.9

Net debt at

30 June 2015

Available committed

funding

Snam: bond maturity profile as at 30 June 2015

Snam: solid balance sheet and strong liquidity profile

Ca.4 bl €

Available undrawn

committed funding

Significative size

Longer maturity if compared

with banking facilities

Competitive funding costs

Low flexibility and lump sum

repayment

Higher costs and shorter

maturity than DCM

Committed funding

More flexibility

Significative size

Longer maturities (up to

20Y)

Competitive funding costs

Uncommitted credit lines:

Smaller size

Lower costs

Cash flow swing

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Rating Snam Outlook

Moody’s Baa1 Stable

S&P’s BBB Stable

Fitch BBB+ Stable

2012 2013 2014 30 June 15

Available undrawn committed funding

ca. 3 bln € ca. 4 bln € ca. 4 bln € ca. 4 bln €

2012 2013 2014 30 June 15

Fixed-floating rate debt 49%-51% 64%-36% 69%-31% 70%-30%

Average maturity M/L term debt 5 years 5 years 5 years 5 years