A2A 2018 Investor Guidebook

January 2019

We have divided the Guidebook into the four main sections listed aside, where A2A equity story is unfolded.

The Annex section includes historical data and energy scenario/regulatory back up. Moreover, the Guidebook has a spreadsheet back up (i.e., the Databook) to download for modelling purposes.

We would appreciate your feedback and suggestions to improve this product.

Please write to: ir@a2a.eu

Resources:

Databook in excel: this file is part of the Guidebook kit and contains annual and quarterly economic, financial and operational Company data as of 2008 and all the tables published in this document.

Additional information on A2A is available at www.a2a.eu. Share price information, Annual Reports and Interim Accounts, press releases and other relevant information can be found in the “Investors” section.

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Welcome to A2A Investor Guidebook, prepared for investors and financial analysts to get a thorough insight into the A2A Group

DISCLAIMER - This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract orcommitment whatsoever. Some information contained herein and other material discussed at the meetings may include forward-looking information based on A2A’s current beliefs and expectations. These statements are based on current plans, estimates, projections, and projects and therefore you shouldnot place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to:changes in global economic business, changes in the price of certain commodities including electricity, gas and coal, the competitive market and regulatory factors. Moreover, forward-looking statements are current only at the date they are made.

A2A public documents used as sources: A2A Strategic Plan, 2017 Results & Business Plan Update; Company Annual Reports, AGM documents, Report on Corporate Governance, Report on Remuneration, Integrated Report

Index

About A2A

Our Strategy

Data Annexes

A2A Shareholders

slide 21 - 25

01

02

03

04

05

Our Responsibilities

slide 4 - 10

slide 11 - 20

slide 26 - 30

slide 31 - 44

BY CLICKING ON THIS SYMBOL YOU WILL RETURN TO THE GENERAL INDEX

A2A Investment Proposition

ABOUTA2A

A2A 2017 bulletin board: Shaping the Future TodayIntegrated and balanced business mixFocussed geographical presenceAsset portfolio: first class asset base and sizeLong term concessions increase visibilityA2A well positioned in its main businesses

VALUE FROM ASSET QUALITY, DIVERSIFICATION & SYNERGIES

OURSTRATEGY

Where we start from: Delivered strategic value since 2014Dynamic M&A track recordNew strategic guidelines: Transformation, Excellence and CommunityOpportunities to growA2A strategic view aligned to medium-long term trendsStrong confidence to deliver higher quality resultsA2A sustainability embedded in the strategic planFinancial strategy: cost reduction and high durationEnterprise risk model supports management actions

DISCIPLINED

GROWTH OPEN TO SECTOR DYNAMICS

OURRESPONSIBILITIES

A2A strong commitment to SustainabilityMany A2A Sustainability initiativesEffective traditional governance modelDiversified Board of Directors

SUSTAINABILITY AS A KEY PILLAR

A2A SHAREHOLDERS

Shareholding Structure: Institutional investors upA2A is an Italian blue chipDividends on a growing trend since 2011

FOCUS ON

DIVIDENDS

…more in the following pages …

01

02

03

04

4

A2A Business Portfolio

A2A Geographical Presence

The A2A Group - 2017 Bulletin Board

About A2A01

A2A GROUP

A2A Concessions Portfolio

A2A Assets Portfolio

ASSETS AND ACTIVITIES

Market position: businesses and EBITDA

BENCHMARKING

More in-depth, updates and documents available in the following website sections:

A2A Group: www.a2a.eu/en/group/mission-values

Assets and Activities: www.a2a.eu/en/group/our-plants www.a2a.eu/en/services

Major Transactions: www.a2a.eu/en/investors/strategy

Strategic Plan: www.a2a.eu/en/investors/presentations-conference

5

0.0492 0.0578

2016 2017

DPS

17%

349450

2016 2017

CAPEX

1,231 1,211

2016 2017

EBITDA

-2%

232 293

2016 2017

GROUP NET INCOME

+26%

377 413

2016 2017

GROUP ORDINARY NET INCOME

+10%

1,033 1,135

2016 2017

ORDINARY EBITDA

+10%+101

REVENUES

+16%

5,0935,910

2016 2017

€M

NET FINANCIAL POSITION

-226 +90

3,1362,910 316 3,226

2016 2017 Change ofperimeter

2017

€

2017 ACHIEVEMENTS

ORGANIC GROWTH

WASTEOngoing developments

in investments for treatment plants

MARKETFurther expansion of the free market

customer base

NETWORKSSuccessful participation

in the first gas distribution tender (Milano1)

GENERATIONSolid performance

of the generation fleet,in particular CCGT plants

EXTERNALGROWTH

LGH - 12M fully consolidation:

strong synergies from the industrial partnership

Set up of A2A Rinnovabili and M&A First step

in PV Renewables

Northern Lombardy Multiutility:

MoU signed - Start of the partnership project

Geographical focus:

sale of stake in Montenegrin EPCG

2017 Bulletin Board: shaping the future today

6

A2A Uniqueness - Integrated and balanced business mix

2017Ordinary

EBITDA (1)

WASTE MARKET(2)NETWORKS GENERATION

& TRADINGNETWORKS HEAT

1st energy producerfrom WTE plants

Leader for quality and customer satisfaction

Incumbent in the key areas

1st domestic operator

2 GW hydro installed capacity

251 €M 22% 173 €M 15% 309 €M 26% 78 €M 7% 353 €M 30%

Collection and street sweepingElectricity and gas sales

• free market• regulated market

Electricity distribution Cogeneration heat recovery and sales

Fuel sourcing

Urban Waste Treatment Material Recovery

Electricity and Heat production

Public LightingGas

distributionHeat

Distribution

Power generation (Thermoelectric

and RES)

Industrial Waste TreatmentNew Energy Solutions

(Energy Efficiency, E-mobilityand Smart City)

Integrated Water Cycle

Whole-sale & Trading

(1) Ordinary EBITDA Equal to 1,164 €M, calculated as Reported EBITDA (1,211 €M) net of non recurring items (64 €M), EBITDA from “Corporate” (-29 €M), EBITDA from EPCG (12 €M). Put option on EPCG stake was exercised by A2A in July 2017

(2) New perimeter of the old Energy Retail BU, including also Energy Efficiency, Public Lighting, Smart City and E-Mobility.

VALUE FROM ENDTO BEGINNING

MORE SOLUTIONSTO INVOLVE CUSTOMERS

SMARTER AND MORE RELIABLE

FLEXIBLE AND GREENER ENERGY

Maximization of cross-BU synergies

EBITDA Growth ’17-’22E

Vo

latility

A2A UNIQUE BUSINESS PORTFOLIO WITH A WELL BALANCED VOLATILITY/GROWTH MIX

7

A2A focussed geographical presence

G

G

G

G

G

PL

G

DHE G

W

G W

E G

E

DH

G

G DH

DH

DH

DH

G

G

PL

PL

PL

C

C

C

C

C

C

C

C

C

C

ITALY

LOMBARDY

WASTEWaste collectionTreatment plantsBiogas/Biomass plantsWaste-to-Energy

GENERATIONHydroelectric CCGT Coal Fuel Oil Solar

E

G

W

PL

C

DH

Technological partnerships abroad on waste treatment plants (UK, Spain and Greece)

NETWORKSElectricityGasWaterPublic Lighting

Cogen. & thermal plants Thermal solar plantsDistrict Heating

A2A operates throughout Italy, predominantly in Lombardy

G

DH

8

A2A asset portfolio: first class asset base and size

9

A2A Long term concessions increase visibility

NETWORKSWASTE

GENERATION

MARKET

(1) Extension of the temporary continuation regime until 12/31/2020pursuant to Regional Council Decrees

(2) Except from Boscaccia and Premadio II (total capacity of ~80 MW)expiring in 2037 and 2043 respectively

(3) Minimum Territorial Area

Awarding body: Region/Province

10

MAIN LISTED ITALIAN UTILITIES 2017 EBITDA(Source: A2A analysis on Company data)

0

500

1.000

1.500

2.000

2.50015,555

2,022

1,604

1,211985

840 820 776

472

84 39 22

A2A well positioned in its main businesses

MARKETGENERATIONNETWORKSWASTEOTHER

€M

A2A position has been quite stableat the top

A2A: the most diversified utility, the highest EBITDA among local utilities

A2A MARKET POSITION(1)

(Sources: ARERA and Company data)

(1) LGH figures fully included as of 2017

11

M&A

2014-2017 Results and Achievements

Our Strategy02

PERFORMANCE

Opportunities to grow

New strategic framework: TEC

NEW STRATEGIC PLAN 2018-2022

More in-depth, updates and documents available in the following website sections:

Operating and Consolidated results: www.a2a.eu/en/investors/financial-reports

Strategy & Risk Management: www.a2a.eu/en/investors/strategy

Debt: www.a2a.eu/en/investors/debt

2018-2022 Targets

Main industrial trends and key actions

New Sustainability Plan

SUSTAINABILITY

Financial strategy and debt structure

DEBT

A2A Group Risk Management

RISK MANAGEMENT

12

The market has rewarded A2A StrategyFinancial Highlights – Growth oriented multi-utility

60

80

100

120

140

160

180

200

Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17

A2A

FTSE MIB

EURO STOXXUTILITIES

FTSE ITALIAALL-SHAREUTILITIES

17 June 2014 = 100 (first appointment of current top management)

EBITDAHigher and more

stable margin

CAPEXInvesting more

with quality

DPSDividends

growing steadily

+18% +60%+61%

NFP/EBITDACapital structure

reinforced

-18%

ROIGrowing, stable

return >10%

+52%

2017 vs. 2014Delivered Industrial and Financial Value

A2ALGH

M&A - Largest territory aggregation

+ other 13 acquisitions

Where we start from: delivered strategic value since 2014

13

Dynamic M&A Track Record

2014 2016 2017 2018

DIC Acquisition of the Gas & Power branch of X3 Energy

JV with TaleSun Energy Europe on photovoltaic development

NOV Acquisition of the composting plant of Sanitaria Group

OCT Acquisition of 75% of Consul System S.p.A. 16 photovoltaic plants from NovaPower

SEP Increased shareholding in Edipower S.p.A. (79.5%)

18 photovoltaic plants from ReEnergyCapital

AUG Acquisition of 51% of Linea Group Holding

JUL Acquisition of 100% of Rieco-Resmal Group Increased shareholding in LumEnergia S.p.A. (90%)

JUN Acquisition of the start-up PatavinaTechnologies (Internet of Things)

MAY

APR Acquisition of 64% of La BI.CO due S.r.l.

MAR

FEB 5 photovoltaic plants from Impax AM

JAN Increased shareholding in Edipower S.p.A. (79.5%)

SEP 7.91% of Dolomiti Energia S.p.A.

JUL Put Option exercised on 41.75% of EPCG (Montenegro)

JAN Partial demerger of Edipower S.p.A. (Udine hydroelectric plants spun off, except from Ampezzo and Somplago plants)

AC

QU

ISIT

ION

SD

ISP

OSA

LS

SWAP

SWAP

14

New strategic Guidelines: Transformation - Excellence - Community

a2a T

2018 2022

TTransformation

a2a E

2018 2022

EExcellence

a2a C

2018 2022

CCommunity

Business strengthening & change

agile organization,leader in operational excellence

attract and empower peopleengage external ecosystem

SustainabilityInspiring priciple of enterprise development

Over 350 innovation concepts evaluatedwill be translated into the experimentation of about 50 new initiatives

A2A will make a significant effortto undertake, in its 4 reference businesses, the transformation actions necessary to respond to the identified market trends (detailed plan in the next pages)

Starting from the positive experience of the EN&A Project, the Mistral Project has been launched: focus on operational excellence through a bottom-up redesign of processes and the transformation of the managerial culture. Moreover, strong boost in Capex for digitalization and technological innovation (>500 €M in the period)

Further information on A2A strategy is available on the Group website at the following links:

Strategy Section New Strategic Plan 2018-2022

REGENERATIONActive role in the energy market transformation

RELAUNCHConsistent industrial growth

Selective external growth

RESHAPEPublic lighting, smart city,

energy efficiency

from

to

15

Opportunities to grow

METROPOLITAN CITIES AS DRIVING FORCES

• ~40% of Italian Municipal Solid Waste due to 12 cities

• Urban ecosystem driver of circular economy

• Sharing of best practices among cities

SHORTAGE OF TREATMENT CAPACITY

• Landfill expiration drives up prices (-2 Mt landfilled 2014-16)

• Italian WTEs capacity shortage (gap of ~6 Mt Municipal Solid Waste + ~6 Mt Industrial)

GROWTH OF SORTED WASTE

• Italy sorted collection grew to 53%

• South lagging at 38% with structuraltreatment gap

• International trends increase instability of current waste export

WA

STE

RES MATURITY AND DERsSCALABLE TECHNOLOGY

• Wind & PV Levelized Cost of Energy close to grid parity

• Further storage cost reduction

• DERs included in balancing services

CCGT GROWING OPTIONS

• Launch of Capacity Market to guarantee system adequacy

• CCGTs to offset intermittent RES

• Gas-fired plants as system backup

• Convergence of LNG global gas prices

COMMITTMENT TO CURB GLOBAL WARMING

• Awareness about resource scarcity

• EU targets on energy efficiency and RES

• Ambitious Italian SEN targets

GEN

ERA

TION

NEW ENERGYSOLUTIONS

• New retail flexibility market (DSR, DSM)

• Growing demand for electric mobility

CUSTOMER EMPOWEREMENT

• Full retail liberalizationfrom July 2019

• Demand for Value-addedservices

• Stronger competition

ENERGY EFFICIENCY

• New technology and regulation boosting growth

• New prosumers with PV, CHP and storage

SMART SERVICES

• Increase of connectivity

• Smarter management of urban services

• Commercial readiness of Low Power Wide Area solutions (LoRa)

%POD

ARERA 2017

ITALIAN ELECTRIC ENERGY CONSUMERSMA

RK

ET

MULTISERVICECONVERGENCE

• Cross-business regulation patterns:

• Greater attention to service quality

• High capex need(also in water)

• Technological synergy across businesses

ENVIRONMENT IMPACTAND ENERGY EFFICIENCY

• Decarbonization of the sources

• Growing electrification

• Greater attention to sustainable heat generation

GAS DISTRIBUTIONTENDERS

• Delays in gas tenders triggeringM&A Deals

• High transaction prices due to tender postponements

NETW

OR

KS

16

GEN

ERA

TION

NETW

OR

KSM

AR

KET

WA

STE

CROSS-BUSINESS SYNERGIES

Multi-business operation synergies(e.g. smart meters deployment, gas/eeintegration in Unareti)

Adoption of automated and digitalsolutions for asset and workforce management

New smart meters roll-out:

~250 K Gas meters

~300 K EE meters

~50 K Water meters

Digital asset management platform fully-phased

SMART GRID AND QUALITY IMPROVEMENT

Achieve smart and resilient networks

Improve energy efficiency of DH networks

Develop water cycle performance

2 new EE primary stations

New heating storage

21 new water treatment stations

-40% water losses

GASTENDERS

Selective growth in high-priority ATEMs

Focus on geographical consolidation

Milano1 tender completed

+10% POD

-50% ATEM

GREENERPORTFOLIO

Further expansion of RES platform

Conventional plants reconversion

~170 MW of new RES (M&A + green-field)

Project development for Brindisi, S. Filippo and Monfalcone

LEADERSHIP

IN GAS-FIRED

GENERATION

Leadership consolidation in flexible CCGT plants, optimizing risk/return ratio thanks to Capacity market

Improvement of gas sourcing

+800 MW dispatched CCGTs vs. 2017

CCGT results balanced mix of market(MGP/MSD) and Capacity

LNG opportunities, bettershort/long term mix

ADEQUACY

& FLEXIBILITY

PROVIDER

Match of growing need for peak capacity

Exploration of innovative flexibility services

Evaluation of new peak plants (e.g. OCGT)

Projects on UVAM, UVAP, storage…

A2A Strategic view aligned to medium-long term trends

SMART SOLUTION• Energy Efficiency

• Smart Services

• Green mobility

CIRCULAR ECONOMY• Landfills phase out

• Acceleration in sorted collection

• Waste system balance and material recovery

ENERGY TRANSITION• Decarbonization

• Energy Democracy

• Reduction of PV and wind LCOE

MAIN INDUSTRIAL TRENDS

CUSTOMER FOCUS

Outstanding client service, with new multi-channel customer experience

Preservation of excellent operations

VAS in safety, comfort, energy-saving

Energy advisor for SMEs and large enterprise

Digitalization to enhance service/acquisition

New CRM

Growth in all customer segments,also including large clients

END-TO-END PARTNER FOR URBAN SERVICES

New services: flexibility, DERs and storage

New EPCs in energy efficiency services

Organic growth in Public Lighting

Expansion of electric mobility business

New projects in flexibility and DERs

3x EPC contracts

+150 k lights managed

+500 new charging stations for EVs

CONTINUOUS TECHNICAL INNOVATION

Innovation & Digital to develop new services

Unlocking IoT opportunities

Further fiber network development (+2,000 km)

Pilot projects on IoT

FROMWASTE TO COMMODITY

Become leader in recycling, selling high-quality secondary raw materials

New WTE capacity to maintain safety of the Italian waste treatment system

+2 plastic treatment plants

+4 organic treatment plants

+155 Kt of new WTE capacity

Secondary Recovered Fuel treatment plant EoW

+2 ashes treatment plants EoW

END-TO-END PARTNER FOR URBAN SERVICES

Enlarging geographic presence, leveraging on value chain integration

Smart and innovative solutions for our territories

New tenders, also outside Lombardy

120 €M cumulated capex for waste collection

CONTINUOUS TECHNICAL INNOVATION

Maintain plants at best available technology for environment sustainability

Improve circularity with innovation

Increased plant efficiency (e.g. flue gas treatment)

Technical innovation projects in collaboration with suppliers and customers

A2A KEY ACTIONS

17

+256 €M

2018 GUIDANCE – updated in November 2018

EBITDA 1,200 – 1,240 €MIncl. non recurring ~33 €MIncl. ACSM AGAM ~35 €M

Net Income >400 €M

CAPEX ~550 €M(1)

Net Free Cash Flow 170-200 €M

(1) Includes M&A;

EXCELLENCE - AGILE ORGANIZATION

MISTRAL

En&A

2015 2016 2017 2018 2019 2020 2021 2022

~60-70 €M net additional EBITDA fully consolidated

Almost complete coverage of Lombardy

Open to new aggregation opportunities

POTENTIAL FOR UPSIDES – AGGREGATIONS

47

82

130

153175

201219

227

€M

Key Levers: Digitalization & technological innovation

En&A project: 65% of target savings already achieved

NORTHERN LOMBARDY MULTIUTILITY

5.822%

2017

6.722%

2018

~7.5

22%2019

min +5% yearlymin 24%

2020

2022

BETTER DIVIDENDS

VISIBILITY WITH

STRONGER CAPITAL

STRUCTUREA2A DIVIDEND

PER SHARE (€c)FFO/NET DEBT -29 -14

353

-592

95

59 15

348

173 265

251

346

387

4451,135

1,391CAGR +4.1%

32%

30%

16%

22% MERCHANT HIGH VOLATILITY

MERCHANT LOW VOLATILITY

QUASI REGULATED

REGULATED

1,391

20222022OTHERRECURRING2017

GENERATION MARKET WASTE NETWORKS

Strong confidence to deliver higher quality results

KEY FINANCIAL HIGHLIGHTS – 2017 TO 2022

Ordinary EBITDA Ordinary Net Income Net Debt NFP / EBITDA

2017 1.1 € Bn 293 €M 3.2 € Bn 2.7 x

2022 ~1.4 € Bn 482 €M ~3.0 € Bn ~2.2 x

CAPEX 2018-2022: ~2.8 €Bn(plus 0.5 €Bn of RES development)

ROI stable >11%

€M

EBITDA 2017 - 2022

Consolidated line-by-line as of 1st July 2018

18

GENERATION MARKET WASTE NETWORKS60+ core goals built on our sustainability pillars

• The shift to a traditional governance model, occurred in June 2014, facilitates decision making and emphasizes the central role of the Board of Directors

• 100% executives with sustainability MBOs (weight increased from 5% to 10% for the CEO/Managing Director)

• A2A adopts a prudent energy risk policy, part of its ERM model, whose purpose is to further develop and integrate risk management into the business process

% sorted collection

New recycling plants

Project on reduction/ reuse/recycle

Water network losses

Depurated waste water

Digital users

# LED lighting points

EV charging stations

Contact centre quality

Smart bins Smart meter

Service interruption

Smart grid

GOVERNANCE

CO2 emissions reduction Energy efficiency projects

Green energy sold to Mass Market

Low-impact vehicles DH users

Dispersed heat recovery and DH non-fossil sources

Smart city projects

Banco dell’Energia step 2

Roadwork siteinspections

Reduction of the accident rate

Environmental education

CIRCULAR ECONOMY

DECARBONIZATION

SMART GRID AND SERVICES

PEOPLE INNOVATION

E

S

G

A2A Sustainability embedded in the Strategic Plan

1008284

31

CIRCULARECONOMY

MATERIAL RECOVERY RATEIN A2A PLANTS ON TOTAL WASTE COLLECTED

394

419420

445

DECARBONIZATION

CO2 /kWh CARBON INTENSITY

550

356269227

SMART GRID AND SERVICES

ONLINE MEMBERS OF A2A ENERGIA COMMUNITY

20

550

PEOPLE INNOVATION

SMART WORKING% on total employees applicable

2015 2016 2017 2022 2015 2016 2017 2022 2015 2016 2017 2022 2015 2016 2017 2022

Integration of Sustainability Plan and Financial BP @2022 in line with 2030 sustainability goals

%g/

kWhK %

19

Financial Strategy: Cost reduction and high duration

DEBT STRUCTURE AND MATURITY

DEBT BREAKDOWN BY INTEREST

BONDSLOANS

DEBT BREAKDOWN BY SOURCES

FIXED RATEVARIABLE RATE

82

STATISTICS RELATIVE TO DEBTAT 31/12/2017

• Total gross debt: 3.9 €Bn

• Average cost of debt: 3.1%

• Average maturity: 5.2 years

• 1.4 €Bn liquidity position, of which:

• 0.7 €Bn cash

• 0.7 €Bn undrawn committed lines and loans

CURRENT CORPORATE CREDIT RATING

STANDARD’S POOR’S MOODY’S

BBB/A-2Outlook Stable

Baa2Outlook Stable

LOCAL AND FOREIGN CURRENCY LT

SENIOR UNSECURED DEBT

BBB Baa2

DEBT ITEMSmillioneuro

ACCOUNTING BALANCE

31/12/2016

ACCOUNTING BALANCE

31/12/2017

PORTIONSMATURING

WITHIN 12 MONTHS

PORTIONSMATURING

BEYOND12 MONTHS

PORTION MATURING IN

31 dic2019

31 dic2020

31 dic2021

31 dic2022

beyond

BONDS 2,527 2,995 345 2,650 509 0 350 498 1,293

BANK LOANSAND OTHER 1,268 943 92 851 90 138 89 86 448

TOTAL 3,795 3,938 437 3,501 599 138 439 584 1,741

%

18

24

76

%

FLEXIBILITY

FINANCIAL STRATEGY

provide the Company with the right instruments to take potential

market opportunities, in a prompt and efficient way

DIVERSIFICATIONoptimize financial sources

and assess/select at any time the most economical and/or best

available

LIQUIDITYmaintain an adequate liquidity

cushion in terms of cash and available committed lines to cover planned cash outlays and absorb

low-probability events

RISK MANAGEMENTmanage in a proactive way

the interest risk with the main purpose to mitigate the effects

of market volatility

20

Enterprise Risk Model supports management actions

(1) This method follows the framework set by the Committee of Sponsoring Organizations of the Treadway Commission (CoSO report)

THE RISK MANAGEMENT MODEL – PROCESS AND ACTIVITIES

STRATEGICRisk generated by the strategic

choices of the Group

INTERNALRisk generated by the Group activities

DIRECTION OPERATIONAL HUMAN RESOURCESINFORMATION TECHNOLOGY

STRATEGIC AND BUSINESS PLAN INITIATIVES

INVESTMENTS AND DIVESTMENTS

ENVIRONMENTAL PROCUREMENT SECURITY COMPLIANCEBUSINESS INTERRUPTION

CUSTOMER SERVICE LEVEL

CREDIT COLLECTION PROCESSES

INTERNAL SKILLSHEALTH AND SAFETY

ICT INFRASTRUCTURE AND SECURITY

EXTERNAL Risk generated by the context in which the Group operates

COMPETITIVE ENVIRONMENT - REGULATORY NATURAL EVENTS FINANCIAL

CHANGES IN LAWS AND REGULATIONS

MACRO-ECONOMIC SITUATION

LEGAL DISPUTES

SOCIAL AND ENVIRONMENTAL CONTEXT

FISCAL AND TAX-RELATED

ATMOSPHERIC CHANGES

OTHER NATURAL EVENTS

COMMODITYINTEREST RATE

LIQUIDITY COUNTERPARTYDEFAULT AND COVENANT

The A2A Group has a risk assessment and reporting process which is based on the Enterprise Risk Management method(1) and on the best risk management practice, in compliance with the Corporate Governance Code as updated by Consob in 2015. The model, operative since 2010 and far from being a static reference, is subject to periodic revision consistent with the evolution of the Group and the context in which it operates.

The methodology adopted is characterized by the following steps:1. Regular identification and updating of the risks to which the Group is exposed

2. Risk assessment process carried out through the involvement of all Group structures, risk owners and risk specialists, which includes:- update of risk scenarios (specific events in which risk can materialize) related to activities- risk scoring , based on the estimation of probability of occurrence and the impact on the Group (quali-quantitative measurement)

- establishment of the relative controls and mitigation plans

3. Definition of risk priorities and risk reporting submitted to the top management for approval

4. Constant monitoring of mitigating actions progress, to check their effectiveness on risks mitigationand prevention

5. Balance sheet disclosure (“Bilancio Integrato” under the D.Lgs 254/2016 regulation)

RISK CATEGORIZATION

OBJECTIVES

The A2A Group has a risk assessment and reporting process which is based on the Enterprise Risk Management method(1) and on the best risk management practice, in compliance with the Corporate Governance Code as updated by Consob in 2015. The model, operative since 2010 and far from being a static reference, is subject to periodic revision consistent with the evolution of the Group and the context in which it operates.

21

A2A Sustainability Initiatives

A2A Commitment to Sustainability

Our Responsibilities03

SUSTAINABILITY

Focus on A2A Board of Directors

Traditional Governance Model

CORPORATE GOVERNANCE

More in-depth, updates and documents available in the following website sections:

Sustainability: www.a2a.eu/en/sustainability

Corporate Governance: www.a2a.eu/en/governance_en

Investors: www.a2a.eu/en/investors/shares

www.a2a.eu/en/investors/publications-services/financial-calendar

22

A2A strong Commitment to Sustainability

Listening to the needs of stakeholders in the various territories in which A2A operates. Identification of the material aspects for planning and reporting

Definition of a Sustainability Policy with objectives through to 2030 and a Sustainability Plan integrated with the Business Plan. The Policy is based on 4 pillars, crucial to A2A’s business and consistent with the international approach given by the UN

Reporting to external stakeholders during focussed meetings or through the Integrated Report and Territorial Sustainability Reports

Implementation of practices and adoption of instruments that are consistent with the sustainability goals prefixed in the value creation process

• Stakeholder Engagement: more than 270 initiatives involving external and internal stakeholders. The forumAscolto programme, the multistakeholder feedback initiative launched by A2A in 2015 aimed at understanding the needs of the communities where it operates, continued in 2017

• Materiality Evaluation: A2A Group materiality matrix was updated

A2A has an active participation in national and international associations and networks on matters of sustainable development.

WINNER IN 2017

SUSTAINABILITY NETWORKS

Circular Economy: Sustainably manage wasteduring its life cycle

Decarbonization: Contribute to achieving national and EU targets for the reduction of greenhouse gas emissions

Smart grid and services: Increase grid reliability through technological innovation

People Innovation: Actively contribute to the welfare of the community and the improvement of working conditions

INVESTMENTS CLASSIFICATION

GENERATION & TRADING

NETWORKSAND HEAT

WASTE CORPORATE TOTAL

EmissionReduction

2.1 4.6 6.4 - 13.1

Energyefficiency

0.4 4.1 25.8 - 30.3

Renewables 13.2 5.3 7.6 - 26.1

Innovation 0.5 - 7.7 0.4 8.6

Total 16.2 14 47.5 0.4 78.1

Governance and Tools• Sustainability Policy• Territory and Sustainability Committee: the Committee has the task

to assist with information, advice and proposals the Board of Directors,the Chairman and CEO of the Group in defining guidelines, orientationsand initiatives

• Code of Ethics • Organisation, Management and Control Model (according to 231/01 Law)• Policy for Quality, Environment and Safety and Systems for their Management• Sustainability Issues for Risk Management: Climate Change impacts

INTEGRATED REPORTA2A 2017 Integrated Report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards and, for some indicators, it complies with GRI-G4 Electric Utilities Sector Supplement. The Report considers six forms of capital (Human, Financial, Relational, Intellectual, Manufacturing and Natural), in accordance with the International Integrated Reporting Council (IIRC) framework.

Moreover, in 2015, A2A began, first in Italy, publishing sustainability reports with reference to the specific territories in which it operates, undertaking a path toward the community and extending its stakeholder engagement model. During 2017 six Territorial Sustainability Reports were published (Milan, Brescia, Bergamo, Varese, Valtellina and Valchiavenna and Friuli Venezia Giulia).

The Integrated Report is available on A2A website at the following link:The Integrated Report 2017

23

Many A2A Sustainability Initiatives

PLAN TO REDUCE WATER LOSSESFor 2018, approximately 34 km of network are to be replaced in the area of Brescia for a value of 4 €M, as well as a reduction in operative pressureof networks. Approximately 65 thousand user meters will be replaced. The plan also envisages the strengthening of the loss monitoring and analysis structures by means of the installation of new capacity meters on the network for a better definition of the water balance and the implementationof dedicated computer tools. In January 2018, a new structure was established to implement the plan.

INSPECTOR DERRICK: THE EMPLOYEE SAFETY DRONEWith a view to reducing the health and safety risks of operators called to carry out critical inspections in pipes that are difficult to access, in October 2017 the innovation function and Generation and Trading BU completed an experiment on the use of drones to replace critical operations.

NETWORK SENSOR DEVELOPMENTThe S.U.N. project (Smart Utility Network) envisages the implementation of a network of sensors and control units that generate synergy between the supplies of the Networks and Heat Business Unit (distribution of electricity, gas, water and heat).

TargetsReduce all components that define the volumes of losses on the aqueduct system

TargetsMinimising human intervention in all operations entailing high risks to health and safety

TargetsOptimising the resources through the sharing of the network and platforms. This will enable the integrated management of signals, alarms and anomalies on the network.

B.S.L. (BRESCIA SMART LIVING)New telecommunication hybrid network for IoT; data collection from smart meters and sensors indoor and outdoor; smart lighting; smart gas meters; Integrated home energy management services; platforms providing info and services at city, district, end user level; services for security and safety of operators, for monitoring and supporting fragile people. Co-financed by the Ministry of Education, Universities and Research. Academic Partners: Enea, University of Brescia. Industrial Partners: STMicroelectronics, Beretta, Cavagna, TeamWeare, FGE, Iperelle, Cauto.

TargetsDesign and development of a smart city architecture

SHARING CITIESDigital and data driven program to overcome some of the key environmental challenges facing Cities: carbon emissions from buildings and transport and air quality. IT platforms will be developed to gather information from the field and turn them into services to citizens. Co-funded by H2020 program. Budget around €28M. 34 Partners led by The Greater London Authority. A2A participates in with Unareti and A2A Smart City. Core cities: Milan, London and Lisbon. Follower cities: Bordeaux, Burgas and Warsaw.

Targets1. Actively engage citizens in the development of mechanisms

of participation 2. Co-design solutions for the retrofit of buildings3. The integrated management of energy systems4. Electric mobility 5. The new services linked to smart lighting

SUPPLIER PORTALA2A Suppliers Portal is an on-line platform through which the businesses wishing to collaborate with A2A can request inclusion on the list, start/renew the qualification process for their category of products, take part in on-line tenders and request authorization to subcontract, using an entirely digital process. The dematerialisation process will continue in 2018 and mainly regards the European Qualification Systems in compliance with Italian Legislative Decree no. 50/2016. Introduction of a new vendor rating system is also being studied, through the real time monitoring of supplier performance

TargetsDematerialisation process

CUSTOMER EXPERIENCEPursuant to unbundling legislation, as of 2017, the commercial spaces andinterfacing channels have been separated for customers on the free market and protected market. A2A Energia has: 1) opened the new fittings of the Milan and Brescia branches2) unified the queue management system in the Milan, Brescia and Bergamo3) opened mobile contact points to explain the advantages of its commercial

offers and answer all requests

Targetsimproving service quality and customer satisfaction and experience

For the implementation of the Sustainability Plan initiatives defined by A2A, a structured model of sustainability objectives has been integrated into the management incentive systems, which envisaged the inclusion of at least one sustainability objective into all 2017 management MbOs.

Sustainability Objective for MbOs

24

Effective Traditional Governance Model

Current Board in charge until 2020 AGM

Note: traditional governance modeling in force as of 13 June 2014

The 2017 AGM established the following annual remuneration: • for each member of the Board of Directors (80 €k) • for the Chairman of the Board of Statutory Auditors (130 €k)

and for the Effective Statutory Auditors (80 €k)

The Board of Directors decided remuneration for the top positions:• a fixed remuneration for the Chairman, the Deputy Chairman

and the CEO for their responsibilities• a variable short-term remuneration for the CEO related to the achievement

of the objectives assigned.

Further details are shown in the Remuneration Report

REMUNERATION POLICY

25

Committees

Position Members Executive Independent ResponsibilitiesControl

and RisksCompensation and

AppointmentTerritory and Sustainability

Chairman GIOVANNI VALOTTI

Relationships with shareholders, institutions, authorities, and media; external relations; management of activities related to sustainability and social responsibility; the preparation of proposals regarding non-recurring territorial consolidation transactions

Deputy Chairman ALESSANDRA PERRAZZELLI Internal audit

CEO and Managing Director

LUCA VALERIO CAMERANOCompany’s ordinary operations and for preparations of proposals regarding non-recurring transactions

Director GIAMBATTISTA BRIVIO

Director GIOVANNI COMBONI

Director ENRICO CORALI

Director LUIGI DE PAOLI Lead Independent Director

Director ALESSANDRO FRACASSI

Director MARIA CHIARA FRANCESCHETTI

Director GAUDIANA GIUSTI

Director DINA RAVERA

Director NORBERTO ROSINI

Diversified board of Directors

(1) As per Code of Self-Discipline by Borsa Italiana. All directors except from the Chairman and the Chief Executive Officer are independent as per Article 148 of the Consolidated Financial Act (T.U.F.) (2) The three Committees are pursuant to the guidelines defined by the “Corporate Governance Code” by Borsa Italiana; (3) All members are independent as per Code of Self-Discipline by Borsa Italiana

Board of Directors

Board of Statutory Auditors

Effective auditors (3) Substitute Auditors

GIACINTO SARUBBI (CHAIRMAN) MAURIZIO LEONARDO LOMBARDICHIARA SEGALA

SONIA FERRERO STEFANO MORRI

(1)

(2)

% % n.17

8

17

58 67

33

6

1

5

BOD - AGE DIVERSITY BOD - GENDER DIVERSITY BOD - SENIORITY DIVERSITY

41-5051-6061-70>71

MENWOMEN

1-3 YEARS4-6 YEARS7-9 YEARS

Average: 57 years old

26

A2A Share

Shareholding Structure

A2A Shareholders04

INVESTORS

Other Shareholder Information

Dividends

More in-depth, updates and documents available in the following website sections:

Investors:

www.a2a.eu/index.php/en/investors/shares/shareholding

www.a2a.eu/en/investors/shares

www.a2a.eu/en/investors/publications-services/financial-calendar

27

Shareholding structure: institutional investors up

(1) At December 31, 2017. Recent updates available at the following link.

Institutional investors: 36.2% of share capital

Geographic breakdown of the institutional investors:

• USA 25.5%

• UK 20.9%

• Luxembourg 14.0%

• Italy 12.1%

• France 7.2%

• Germany 4.1%

Retail investors: 11.1% of the share capital

Geographic breakdown:

• Italy 99.6%

• Foreign: 0.4%

58.5% of retail investors are in Lombardy, the region where historically A2A has been more active. Investors from the provinces of Milan and Brescia own respectively 26.8% and 13.3% of the total retail shareholding.

NUMBER OF SHAREHOLDERS: 76,594

A2A SHAREHOLDING STRUCTURE AT DECEMBER 2017 31, 2017

• Share capital: 3,132,905,277 shares with a par value of 0.52 euro each

• Treasury shares: 23,721,421, equal to 0.76% of the share capital

All shares are voting shares, although - as laid down in art. 9 of by-laws - no individual shareholder other than the Municipality of Milan and the Municipality of Brescia may hold an equity interest exceeding 5% of the share capital. Should such ceiling be exceeded, the voting right attached to the shares held in excess of 5% of the share capital may not be exercised.

3-year new Shareholding Pact between Brescia and Milan Municipalities was signed on 1 February 2017. The Pact regards 42% of A2A share capital.

Shareholding Pact on 42%

The above-mentioned information derives from an internal analysis based on the shareholders register data - updated at 24 May 2017 (i.e., dividend payment date) and classified by the provider.

%

25

MUNICIPALITY OF BRESCIAMUNICIPALITY OF MILAN

TREASURY SHARESMARKET

25

49.2

0,8

28

85

90

95

100

105

110

115

120

125

130

135

A2A

FTSE MIB

EURO STOXX UTILITIES

A2A vs FTSE MIB and EURO STOXX UTILITIES

• Market capitalisation at December 29, 2017: € 4,831 m

• Average capitalisation: € 4,455 m

• Average volumes: 9,729,351

• Average price: 1.422 €/share

• Maximum price: 1.635 €/share

• Minimum price: 1.232 €/share

• Number of shares: 3,132,905,277

A2A stock is also traded on the following platforms: Chi-X, BATS, Turquoise, Equiduct,Sigma-X, Aquis, BOAT OTC, LSE Europe OTC, BATS Chi-X OTC

IndicesA2A 2017 figures (Borsa Italiana)

Moreover, A2A has been included in the Ethibel Excellence Investment Register and in the EthibelPioneer Investment Register.

29 December 2017=100

0

10

20

30

40

50

60

1,10

1,20

1,30

1,40

1,50

1,60

1,70

Vo

lum

es

(Mill

ion

so

f sh

are

s)

€/s

har

e Volume (right-hand scale)

Price

Tickers: Bloomberg – A2A:IMReuters – A2.MI

A2A is an Italian Blue Chip

A2A in 2017

29

Dividends on a growing trend since 2011

With reference to year 2017, the Board of Directors proposed that Shareholders' Meeting approves the distribution of an ordinary dividend of 0.0578 euros for each ordinary share in circulation (corresponding to paid dividends of approximately 180 million euros), more than 17% up compared to the previous year, entirely taken from 2017A2A S.p.A. net income.

Dividend Policy

The 2018 - 2022 Strategic Plan confirms a dividend policy based on sustainable growth (DPS at around 6.7 euro cents in 2018, 7.5 in 2019, with minimum growth in the following years equal to 5% per year).

Dividend taxation

Dividends no longer attract any tax credit and, depending on who the recipient is, they may be subject to withholding tax at source or, in part, contribute towards taxable income.

(1) Dividend Yield calculated on annual average share price (2) Pay-out calculated on ordinary income (net of non-recurrent items)

30

Other Shareholder information

SHAREHOLDERS’ MEETINGSAs laid down in A2A by-laws, the company holds one compulsory Shareholders’ General Meeting per year. The Annual General Meeting is called by the Board of Directors within 120 days (or 180 days under certain circumstances) of the end of the fiscal year. With reference to the procedures for the AGM call, please refer to A2A By-laws and Corporate Governance section of the company website (i.e., Shareholders’ Meetings). This section also contains all relevant documents for the AGM.

AMERICAN DEPOSITARY RECEIPTSA2A American Depositary Receipts (ADRs) are traded on the US Over The Counter market (OTC) under the symbol AEMMY. Three unsponsored ADR programs were launched by Deutsche Bank (2008), BNY Mellon (2008) and Citibank (2014) respectively. In all cases, one ADR represents five A2A ordinary shares. Further details are available at websites www.adr.com and www.sec.gov

DOCUMENTATIONAll the Group documents mentioned in this Guidebook are available on our website (www.a2a.eu). They may also be obtained, on request, from the Company Secretary at the company’s registered office or through e-mail at ir@a2a.eu

A2A INVESTOR RELATIONS GUIDELINESMain goal: promote and support the correct knowledge and valuation of the A2A stock by the financial community, through a communication which is active, transparent, well-timed, constant, correct and not discriminatory. In order to achieve this goal, the IR Department supports A2A top management in the constant monitoring of the expectations of the financial markets on the Group performance.

Core activities: • hold regular meetings (one-to-one and group) with the financial community in Italy

and abroad; engage with the main proxy agencies

• arrange conference calls with the management at the time of the release of the Group results

• organize International roadshows with the top management for the presentation of important strategic developments

Blackout period: prior to a public release of financial results, the top management is not available for meetings concerning the financial performance that will be disclosed. The length of this black-out period is to be considered around two weeks approximately.

The IR department is not in charge neither of comments about A2A performance in the Stock Exchange, nor of financial advice about the investment in A2A.

PURCHASE AND DISPOSAL OF TREASURY SHARES: MAIN POINTS

The 2018 Shareholders’ General Meeting authorized the Board of Directors to conduct treasury share purchase and disposal transactions to the extent to which such authority has not been exercised after 2017 AGM:

• the maximum number of treasury shares that can be held is 313,290,527, which is equal to one-tenth of the shares making up the share capital, considering the shares already owned by A2A S.p.A. and by its subsidiaries;

• treasury share purchases and disposals will be conducted to pursue, in the interest of the Company and in respect of the principle of equal treatment of shareholders and of current applicable regulations, objectives such as transactions related to business projects consistent with the strategies that the Company intends to pursue, in relation to which the opportunity for share exchanges may be manifested;

• The authorization to purchase and dispose of the shares will have a term of validity of 18 months starting on the date of the Meeting resolution

A2A treasury shares were equal to 0.7572% of the share capital at 31 December 2017

A dividend relating to the financial year 2018 may be payable from 22 May 2019,with ex-dividend date 20 May 2019 (record date 21 May 2019).

31

Capital Employed and Sources of Financing

Consolidated Income Statement

Data Annexes05

ACCOUNT TABLES

Consolidated Net Financial Position

Consolidated Balance Sheet

More in-depth, updates and documents available in the following website sections:

Investors:

www.a2a.eu/en/investors

2017 Quarterly Accounts

Historical Volumes

QUANTITIES

Gas Tenders

Regulatory Framework

REGULATION

Bonds and EMTN Programme

BONDS

Energy Scenario - Historical

ENERGY SCENARIO

Energy Scenario - Strategic Plan

Emissions and Energy Performance

SUSTAINABILITY DATA

Waste, customers and humanresources statistics

32

Consolidated Income Statement

Mandate for the legal audit of the accounts for the years from 2016 to 2024

The AGM called On 11 June 2015 the AGM conferred the mandate for the legal audit of the accounts forthe years from 2016 to 2024 to Reconta Ernst & Young S.p.A.

Note: Group net income adjusted for the impact of extraordinary items: 2017 = 413 €M; 2016 = 377 €M; 2015 = 278 €M; 2014 = 175 €M; 2013 = 156 €M; 2012 = 116 €M; 2011 = 165; 2010 = 243

(1) The figures at December 31, 2016 include the economic effects deriving from the LGH Group’s PPA and the reclassification for the purposes of IFRS 5 of the EPCG Group’s income statement items.

(2) EPCG not included in Group EBITDA as of 2016 restated results

33

Capital Employed and Sources of Financing

SCOPE OF CONSOLIDATIONThe consolidated Annual Report at December 31, 2017 includes the figures of the parent A2A S.p.A. and those of the subsidiaries over which A2A S.p.A. exercises either direct or indirect control, even if the holding is less than 50%.

In addition, companies in which the parent exercises joint control with other entities (joint ventures) and those over which it has a significant influence are consolidated using the equity method.

The main changes to te scope of consolidation of the A2A group are the following:• Azienda Servizi Valtrompia S.p.A., which at December 31, 2016 was consolidated

using the equity method, is fully consolidated as of March 1, 2017

• LumEnergia S.p.A., which was previously consolidated using the equity method, has been fully consolidated starting from July 2017

• change in the consolidation method of the EPCG Group which, following the exercise of the put option on the entire shareholding held by A2A S.p.A., the effectiveness of which was finalized on July 3, 2017, led to a change in the allocation of the investment held in EPCG from ongoing investment to investment held for sale according to the provisions of IFRS 5 with consequent change (starting from July 2017) of the consolidation criterion from full to equity. As a consequence of the above, the related income statement items for the first half of the year (previously fully consolidated) relating to revenues and operating costs and to financial management have been reclassified, in accordance with the provisions of IFRS 5, under “Result net of non-current assets held for sale”, as well as the values (referred to the entire year) of the corresponding period of the previous year

• the company Bellisolina S.r.l. exited the scope of consolidation with effect from January 1, 2017

• incorporated in July 2017, the company A2A Rinnovabili S.p.A. with sole shareholder A2A S.p.A. A2A Rinnovabili, which completed the acquisition of 13 project companies, is fully consolidated

• incorporation and full consolidation of A2A Idro4 S.r.l.

34

Consolidated Balance Sheet

(1) Book value equal to the Value of the Put Option exercised by A2A in July 2017. Net Present Value equal to 215 €M

At 31 December 2017 A2A S.p.A. reserves available for distribution to shareholders amounted to 326,806,629 euro, of which to fiscal moderate suspension equal to euro 124,783,022.

35

Consolidated Net Financial Position

(1) The figures at December 31, 2016 include the economic effects deriving from the LGH Group’s PPA and the reclassification for the purposes of IFRS 5 of the EPCG Group’s income statement items.

(2) The net result is stated excluding gains on the disposal of shareholdings.

(3) Net of balances with contra-entry in equity

(4) Note: 2017 and 2016 figures follow a different scheme which shows net interest and other non-monetary changes as separate items

(1) The net result is stated excluding gains on the disposal of shareholdings; (2) Net of balances with contra-entry in equity

BUSINESS OUTLOOK FOR OPERATIONS (November 2018)The Group expects to end 2018 with very satisfying results, showing a growth with respect to 2017. The Gross operating margin (EBITDA) should reach €1,200 – 1,240 million, including positive non-recurring items of about €33 million and the consolidation of ACSM-AGAM accounting for about €35 million. Group net income is expected to exceed €400 million. Cash flow generation is expectedto reach €170 – 200 million, net of capex, acquisitions and dividends payments. The net financial position of the ACSM-AGAM Group at year end is expected at about €65 million.

36

2017 Quarterly Accounts

37

Historical volumes

Note: EPCG volumes not included

38

Networks - regulatory framework

ELECTRICITY

5th Tariff regulatory period: 2016-2023 (8 years)Tariff not linked to change in unit volumes consumption• Shift from input-based to output-based model as of 2016

and Totex mechanism (optimisation of Opex and Capex) as of 2023

• WACC: in 2019-2021, 5.9% (distribution, metering); additional remuneration related to innovative projects and energy efficiency improvement

• Gradual approach to the extension of asset life

• Price cap: 1.9% (distribution), 1% (metering). The potential extra-efficiencies achieved in the 3rd and 4th regulatory periods are to be shared 50-50 with the consumer by 2019

• Interim reviews: some WACC parameters (3 years) - see below

GAS

4th Tariff Regulatory period: 2014-2019 (6 years)Tariff not linked to change in unit volumes consumption • WACC: in 2019, 6.3% (distribution), 6.8% (metering) – WACC may be subject to

review with the 5th Tariff Regulatory period, starting from 2020

• WACC is applied either to RAB or to VIR ARERA(1) - for new ATEM’s entrants (so-called "asymmetric regulation")

• Price cap: 1.7% for distribution and 0% for metering. Price cap reduced to 0% in the first 2 years of ATEM’s

• Interim reviews: price cap (3 years) and some WACC parameters - see below

WATER

2nd Regulatory period: 2016-2019 (4 years)• Allowed revenues based on full recovery cost subject to efficiency and capped

in terms of tariff growth

• Regulatory matrix with six different tariff schemes, linked to the need for new investments, the evolution of underlying costs due to consolidation or improvement in quality of service and Opex per capita

• Fixed annual maximum tariff increases - ranging from 5.5% to 9%, different for each of the six tariff schemes assigned at Local Authority Level (EGA)

• Overall return equal to 5.4%(2), with an additional 1% extra return for investmentsmade from 2014

• Introduction an X-factor equal to 0.5% to promote higher efficiency on internal Opex

• Interim review: RAB and variable costs (2 years); assumptions on financial costs and taxation can be modified every 2 years if there are "significant changes"

(1) VIRARERA: Asset residual value («valore industriale residuo») - as recognised by ARERA for tariffs purpose and calculated in compliance with the guidelines set by the Ministerial Decree 226/11 and with the Resolution 19/2016- DIUC, is equal to the capital expenditure necessary to rebuild anew the assets, depreciated due to use and obsolescence (on the basis of regulatory asset useful life).

(2) The figure is calculated as the sum of cost of equity, cost of debt, gearing, recognized financial costs ("OF") and fiscal costs ("Ofisc")(3) only if there is a more than 20% deviation in the average spread between 10-year government bonds of Italy and Germany vs the previous period

ELECTRICITY & GAS WACC reform

In December 2015 ARERA defined the WACC remuneration for the regulated energy networks, effective from 1 January 2016

The common parameters are set for gas and electricity, excluding those specific of each sector, such as beta and D/E

• WACC is real pre-tax allowed return• WACC regulatory period lasts 6 years (2016-2021)• The interim review is fixed every 3 years

(i.e. at the end of 2018 the WACC applicable in the period 2019-2021 will be set) for: Risk Free Rate; Country Risk Premium(3); Inflation used to calculate “F” factor; Gearing (value more in line with those used by other European regulators), Tax Rate according to the annual Stability Law

39

Networks - Gas distribution tenders

• Tenders for the assignment of the gas distribution services have to be carried out only for ATEMs (Aree Territoriali Minime, i.e., Minimal Local Areas), which are clusters of municipalities (175 in the whole national territory) established by the Ministry for Economic Development

• The first tenders started in 2016 and the last ones are expected to close in 2020/2021. Consequently the first service management contracts for ATEM are likely to start in 2018

• Each concession will be granted for 12 years

(1) According to DL n.210/2015 converted into Law n.21/2016. In case the municipalities do not respect procedures to start gas auctions, Regional governments would take substitute power Public tenders deadline could be delayedSources: A2A internal elaboration based on Utilitalia data

40

Energy Scenario - Historical Scenario

Note: the electricity installed capacity figures refer to a gross capacitySources: Terna, Snam and ISTAT

Offer and Demand Prices and margins

3) Italian National Price of the electricity

4) CCGT Gas Cost based on gas at virtual trading point (PSV) with 51% efficiency (previously 53%). The figures include transport costs.

5) GC - average system cost until 2015, Feed-in tariff value as of 2016

6) Spark spread net of environmental costs (GC + CO2)

7) Dark spread net of environmental costs (GC + CO2). The environmental costs for a coal plant are equal to: 8.5 €/MWh (2013); 8.1 €/MWh (2014); 7.5 €/MWh (2015); 5.3 €/MWh (2016); 5.7 €/MWh (2017). Coal plants efficiency is equal to 35%. The figures include logistics costs.

1) The yearly figures refer to the thermal year

2) The yearly figures refer to the thermal year

41

Energy Scenario - 2018-2022 Strategic Plan

Scenario units 2016 2017 2018 2019 2020 2021 2022

Exchange rate €/$ €/$ 1.11 1.13 1.20 1.20 1.21 1.23 1.25

ICE Brent €/bbl 40.8 48.4 50.9 55.9 57.8 58.3 58.3

Coal API 2 €/tonn 54.0 74.8 72.0 67.9 63.3 61.0 57.0

CO2 EUA ETS €/tonn 5.4 5.8 7.4 7.7 8.5 9.5 11.0

ARERA Gas Tariff (Pfor) €c/mc 15.6 18.1 18.8 18.4 17.4 17.2 17.0

PSV €/MWh 15.6 19.7 19.4 19.0 18.0 17.8 17.6

TTF €/MWh 14.0 17.3 17.4 17.2 16.3 16.1 15.9

PUN Base Load €/MWh 42.7 54.0 51.0 49.7 48.6 48.6 48.4

PUN Peak Load €/MWh 48.2 61.8 58.2 55.7 54.6 54.6 54.4

CCGT Gas Cost (PSV) €/MWh 37.6 46.7 46.5 45.6 43.4 43.0 42.6

Peak Spark Spread €/MWh 10.5 15.1 11.7 10.1 11.2 11.6 11.8

Spark Spread (PSV) €/MWh 5.1 7.3 4.5 4.1 5.2 5.6 5.8

Clean Spark Spread (PSV) €/MWh 3.1 5.1 1.7 1.2 2.0 2.0 1.7

Dark Spread €/MWh 12.5 16.4 14.6 15.0 15.8 16.8 18.2

Clean Dark Spread €/MWh 7.2 10.7 7.5 7.5 7.5 7.5 7.5

White certificates €/TEE 145.5 273.5 300.0 280.0 270.0 260.0 250.0

42

Bonds and EMTN Programme

• On 1 March 2018 the Board of Directors of A2A approved a framework resolution revoking for the portion not performed the resolution previously taken on 10 November 2016 and authorising the issue of one or more unsubordinated, unsecured and non-convertible notes, under the EMTN Programme, up to an aggregate amount of Euro 1 billion, by 30 April 2020.

• The adoption of the EMTN is part of the A2A Group’s medium-term financial strategy, which is aimed at lengthening the average life of the Company’s outstanding debt and at maintaining an adequate financial flexibility in order to efficiently manage the future debt maturities, to support the Company’s rating

• The bonds to be issued on the basis of the Programme are placed to institutional investors• Program amounts to 4 billion, of witch 1,438 million euro still available as of December 31, 2017

(1) Date from which interest is paid; (2) Last date on which interest accrues; (3) The current bond rating – where applicable, is different from the issue rating and is equal to the M/L term rating assigned to the Company by S&P and Moody’s.

43

Sustainability: Main statistics and performances

EMISSIONS ENERGY PERFORMANCE

ENERGY MIX

(1) The figures refer to Monfalcone plant(2) Pursuant to Article 19 of Ministerial Decree of 18 December 2008, the biodegradable portion

of urban waste is equal to 51% of total production (49% not biodegradable)

Note: Scope 1 emissions for the years 2015 and 2016 have been updated with respect to a review of the method used to calculate emissions dispersed from methane on the distribution networks.

Note on consolidation of sustainability statistics:Linea Group Holding, Consul System, La Bi.CO Due, Rieco-Resmal Group, ASVTare included as of 2017Patavina Technologies and LumEnergiaare excluded.

44

Sustainability: Main statistics and performances

SORTED COLLECTION(1) COLLECTED, TRANSPORTED AND INTERMEDIATED WASTE

1) The quantity collected and the index of urban waste collection for recycling was calculated on the basis of the Lombardy Region indications. Municipality of Como is included as of 2014, Municipalities of Cremona and Lodi as of 2017

2) Other municipalities in the Provinces of Bergamo, Brescia, Mantova, Milan, Varese, Cremona (as of 2017) and Lodi (as of 2017). The index of collection calculated as weighted average

3) Source: ISPRA

A2A GROUP

Average quantity collected (kton) Index of collection of urban waste for recycling

2017 2016 2015 2014 2013 2017 2016 2015 2014 2013

BERGAMO 44.7 42.1 41.4 40.7 36.6 71% 66% 66% 64% 60%

BRESCIA 77.0 59.1 50.4 51.8 50.2 68% 45% 38% 38% 38%

COMO 28.5 25.2 24.0 19.7 - 72% 63% 62% 49% -

MILAN 361.9 352.0 352.3 334.1 282.3 54% 52% 53% 50% 43%

VARESE 26.6 25.1 23.8 24.0 23.0 66% 62% 61% 60% 59%

CREMONA 27.1 - - - - 73% - - - -

LODI 13.9 - - - - 73% - - - -

OTHER AREAS (2) 412.5 220.6 194.1 155.2 142.0 71% 65% 64% 61% 55%

TOTAL 992.2 724.2 686.0 625.6 534.1 63.2% 56.2% 55.0% 51.4% 46.3%

ITALIAN AVERAGE (3) N.A. 52.5% 47.5% 45.2% 42.3%

(kton) 2017 2016 2015 2014 2013

URBAN WASTECOLLECTED

1,605 1,321 1,283 1,233 1,192

SPECIAL WASTEINTERMEDIATED

133 110 159 135 62

2017 2016 2015 2014 2013

ELECTRICITY CUSTOMERS (sale activity)of which households

1,091,117895,041

996,297820,140

985,070804,341

970,408795,136

990,098797,033

GAS CUSTOMERS (sale activity)of which households

1,294,4231,212,980

1,090,6271,022,433

1,097,4801,026,914

1,111,8851,038,640

1,140,1121,090,481

WATER CUSTOMERS (aqueduct services) 308,178 283,479 282,254 280,092 279,188

DISTRICT HEATING CUSTOMERS (4) 25,564 24,303 24,526 24,242 23,773

MUNICIPALITIES SERVED BY URBAN HYGIENE SERVICES (collection and sweeping)

258 117 101 93 88

CUSTOMERS BY BUSINESS CUSTOMER SATISFACTION

ARERA carries out surveys twice a year on the quality of national telephone services received by end customers.In H1’17, A2A Energia customers confirmed the appreciation for the call center service, measured by a Customer Satisfaction Index (CSI) of 95.7%(2.5 pct points more than the national average), similar to the last figure of 2016

The “after call” survey records positive results for A2A Energia with93.1% of customers satisfied and very satisfied

In 2017 a survey was run to analyse the level of satisfaction with the service at Bergamo, Brescia, Milan and Varese branches. ~97% of users gave a positive opinion ~1 pct point higher than 2016

2017 2016 2015 2014 2013

MANAGERS 175 146 146 155 163

MIDDLE MANAGEMENT 595 494 481 472 474

WHITE COLLAR WORKERS 4,682 4,026 4,054 4,063 4,210

BLUE COLLAR WORKERS 5,964 5,111 4,971 4,924 5,098

TOTAL 11,416 9,777 9,652 9,614 9,945

PERSONNEL BY CATEGORY

2017 2016 2015 2014 2013

NUMBER OF ACCIDENTS(on going accidents excluded)

577 555 471 526 608

FREQUENCY RATE (n°) 31.80 35.66 29.61 33.74 37.58

SEVERITY INDEX (days) 0.82 0.91 0.79 0.87 0.88

OCCURENCE RATE (n°) 10.00 11.52 10.46 10.53 60.70

N° OF ON GOING ACCIDENTS 113 112 103 103 117

WORKFORCE SAFETY

4) Users may be a single residential unit in the case of independent heating or the whole building in the case of centralised heating