A2A AMBIENTE TOWARDS A CIRCULAR ECONOMY...recovery rates tend to have high recycling rates 100% Landfill Zero Landfill CIRCULAR ECONOMY WASTE MANAGEMENT - EU STARTING POINT Source:

A2A AMBIENTE TOWARDS A CIRCULAR ECONOMY

July 2017

Environment BU

2This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.

INDEX

A2A

- AT A GLANCE

- STRONG COMMITMENT TO SUSTAINABILITY

- SUSTAINABILITY PLAN GOALS

Pag. 3-5

CIRCULAR ECONOMY

- FROM LINEAR ECONOMY TO CIRCULAR ECONOMY

- EU TARGETS

- WASTE MANAGEMENT – EU STARTING POINT

6-8

A2A AMBIENTE – ENVIRONMENT BUSINESS UNIT

- GROUP STRUCTURE

- KEY NUMBERS

- BUSINESS MODEL

9-11

A2A AMBIENTE CONTRIBUTION TO CIRCULAR ECONOMY

- DEVELOPMENT PLAN

- COLLECTION

- MATERIAL RECOVERY

- ENERGY RECOVERY

- INDUSTRIAL WASTE

12-16

KEY TAKEAWAYS 17

ANNEXES

WASTE CIRCULAR ECONOMY – FROM THEORY TO PRACTICE 18

CIRCULAR ECONOMY IN ITALY – GLASS, PAPER, ORGANIC FRACTION, PLASTIC 19-22

WTE - SYNERGIC TO RECOVERY FOR ZERO LANDFILL TARGET 23


G

G

G G

GG

A2A AT A GLANCE

Legenda

EnvironmentWaste collectionTreatment plantsBiogas/Biomass plantsWaste-to-Energy

Generation & Trading HydroelectricCCGT CoalFuel OilSolarPL

G

DHE GW

GW

E G

EDHG

G DH

DH

DH

DH

DH G

G

PL

PLPL

C

C

C

CC

C

C

C

CC

A2A Footprint

Financial Highlights(1) Group net income

adjusted for the impact of extraordinary items: 377 €M in 2016; 278€M in 2015; 175€M in 2014; 156€M in 2013

0.8%

3.1%

25.0%

25.0%

46.1%

100.0%46.1%

53.9%

Free Float

Municipality of Milan

Municipality of Brescia

Norges Bank

A2A S.p.A. (treasury shares)

46.1%Total

GENERATION & TRADING

352 €M 31%

ENERGY RETAILENVIRONMENT

120 €M 11%

EPCG(Montenegro)

69 €M 6%

NETWORKS & HEATSMART CITY

6 €M 1%

NETWORKS HEAT

69 €M 6%285 €M 25%231 €M 20%

E

NetworksElectricityGasWaterPublic Lighting

HeatCogen. & thermal plantsThermal solar plantsDistrict Heating

Foreign (Montenegro)HydroelectricCoalElectricity Networks

C

EGWPL

DH

2016EBITDA(2)

A2A shareholding structureat 31 December 2016

E

Montenegro

Lombardy

Italy

(2) Equal to 1,132 €M, calculated as Reported EBITDA (1,231 €M) net of non recurring items (128 €M) and EBITDA from “Corporate” (-29 €M)


A2A STRONG COMMITMENT TO SUSTAINABILITY

30 actions by 2020

Piano Industriale 2015-2019

Piano di Sostenibilità 2014

GOALS and TARGETS 2030

ACTION and ENABLING DRIVERS - 2020

2030 10/17 goals

The sustainability policy and the 2030 commitments

SDG vs.

VALUE CHAIN

CIRCULAR ECONOMY

DECARBONIZATION SMART GRID AND SERVICES PEOPLEINNOVATION

OUR

2030PATH

FROM TO

Develop asustainable waste

management approach for the entire life cycle

Contribute to the achievement of the

national and European objectives to reduce

GHG emissions

Increase the reliability of grids and services by increasing

the investments in technological innovation

Actively contributing to community welfare

and improved working conditions


A2A SUSTAINABILITY PLAN GOALS

CIRCULAR ECONOMY

DECARBONIZATION

SMART GRID AND SERVICES

PEOPLEINNOVATION

2016 results2020 goals

99.0%

67.0%

80.0%

56.2%

84%

98.86%Urban waste sent for recycling or energy recovery

Separated waste collection in the communities served

Impact of the recovery capacity of the material in the Group's plants on the urban waste collected

392.5

-234

1,260

Carbon intensity in electricitygeneration (gCO2/kWh)

CO2 avoided thanks to the extension of the district heating network (ktonnes/year)

Green electricity sold (GWh)

417

769

-161

The CSI Total in “multi-client of reference” surveys (CERVED DataBank) with a value never below

90%

customers with online A2A Energia services400,000

Million euro invested in the Smart City area10

268,818

1.9

92.4%

regional workshops with 30 actions to be implemented

inspections/year at the roadwork sites of the A2A Group

Target employees involved in SmartWorking projects

15

4,000

20%

2 workshop (11 actions)

1,406

5%

2020 goalalready achieved

Increase in waste treatment capacity (urban and special waste) aimed at recovering material at the Group’s plants

+86% vs 2015

+151% vs 2015


CIRCULAR ECONOMY

residualmaterials

use

resources

production

design/development

materialand energyrecovery

LINEAR ECONOMY

Made

resources waste

use disposal

CIRCULAR ECONOMY

Waste management plays an important role in moving States towards the development of a circular economy accordingto EU Directives.

Waste management must help to reduce the consumption of raw materials and energy from conventional sources

FROM LINEAR ECONOMY TO CIRCULAR ECONOMY


CIRCULAR ECONOMY

On 24 January 2017, the ENVI* Committee voted to approve an amendment of the draft waste package that includes the legislation on waste, landfills, packaging and vehicle, battery and electronic equipment recycling.

Raise the share of recycled waste to 70% by 2030, with an interim target of 50% in 2020Currently 44% of municipal solid waste in the EU is being recycled

80% recycling of packaging waste (paper and cardboard, plastics, glass, metal and wood)

Limit landfilling to 5%. This is a further reduction from the 10% suggested in the draft legislative package.As many countries still have high rates of landfilling there will be a five year extension for countries with morethan 65% landfilling

Introducing targets for food waste. It is suggested to achieve a 50% reduction of food waste by 2030(30% by 2025) as compared to 2014

* Environment Committee of the European Parliament

EU TARGETS

Circular Economy: expected benefits• Growth & job creation/ up to +7% GDP

i. Up to 600 €B in savings/8% of annual turnover for business in the EU

ii. Estimated 170,000 direct jobs in waste management sectors created by 2035

• Boosting competetiveness and ensuring security of supply

• Building economic and environmental resilience

• Encouraging innovation

• Reducing total annual Greenhouse Gas Emissions by 2-4%


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Discarica WtE Recupero

TREATMENT

The most virtuous cases show that

countries with the highest energy

recovery rates tend to have high

recycling rates 100% Landfill

ZeroLandfill

CIRCULAR ECONOMYWASTE MANAGEMENT - EU STARTING POINT

Source: Eurostat data 2015*last data available from 2014

The more advanced EU countries have achievedthe substantial cancellation of the landfillthrough synergistic actions to increase separatecollection and to maintain a significant share ofwaste-to-energy production.

Italy, with its 26% landfill, is still farfrom European standards.

RecoveryLandfill

WASTE MANAGEMENT IN EUROPE - KEY ELEMENTS

Only around 40% of the waste produced by EU households is recycled

The share of recycling and composting among waste treatment methods ranges from 64% in Germany to 12% inMalta and Slovakia (EU average: 44%);

Seven Member States landfill less than 10% of their municipal waste, while eight Member States landfill over70% of their municipal waste (EU average: 28%);

The amount of municipal waste per capita and per year varies from 254 kg in Romania to 758 kg in Denmark (EUaverage: 474 kg)

FOCUS: TREATMENT

Waste managementis part of the

transition towards

a circular economy

Waste managementis part of the

transition towards

a circular economy


A2A AMBIENTE - ENVIRONMENT BUGROUP STRUCTURE

100%

100%

51%

Main controlled companies: Rieco (100%) Resmal (100%) Galli Ecologistica (100%) Resmal Ecologistica (100%) Ecolombardia 4 (69%) SED (80%) ASRAB(70%) Bioase (70%)

Treatment, recovery, disposal, engineering, sales and industrial waste management

Municipal Solid Waste (MSW)collection and street cleaning

100% 90%

Environment division

64%


A2A AMBIENTE - ENVIRONMENT BU

Financial Highlights (€M)

2016 2015

Revenues 852 810

EBITDA 240 210

EBIT 165 147

€M

Over 3 million people served with MSW management and street cleaning

Over 5,600 employees* (including new acquisitions)

4.9 million ton overall managed waste (collection + treatment + disposal)

1.6 billion kWh electric energy recovered from waste

1.3 billion kWh heat energy recovered from waste

KEY NUMBERS

* Full Time Equivalent (FTE)


A2A AMBIENTE – ENVIRONMENT BUBUSINESS MODEL

COLLECTION RECYCLING & TREATMENT WtE LANDFILLFINAL ENERGY

RECOVERYACTIVITY

PROCESS

URBAN WASTE

INDUSTRIALWASTE

OUTPUT OF PROCESS

Selection-recycling

plants

Waste, collection and street cleaning

Sorted

Unsorted

Compost, glass, paper/cardboard,

plastic, inertmaterials

MBT plants and SRF production

plants

Biodryedmaterials

Waste to Energy plants

Heatand power

Residualand ashestreatment

Residual waste, intert materials

and metals

Landfill

Biogas

Powerproduction from biogas

plants

Power

BU Environment operates along the whole waste management value chain, including engeneering activities and R&D


Development for external lines with M&Aoperations

Investments in own plants with greenfieldoperations

Improve existing facilities to increaserecovery rate and treatment capacity

A2A AMBIENTE CONTRIBUTION TO CIRCULAR ECONOMYDEVELOPMENT PLAN

A2A'S STRATEGIC PLAN PROVIDES A REALUNCH-BASED DEVELOPMENTA2A'S STRATEGIC PLAN PROVIDES A REALUNCH-BASED DEVELOPMENT

FOCUS ON CORE BUSINESS INTEGRATION IN THE VALUE CHAIN TERRITORIAL EXPANSION

2016 2017 2021

Total EBITDA (€M) 240 263 341

- Collection 75 74 74

- MSW treatment 153 179 252

- Industrial waste treatment 2 8 15

- International projects 1 1 0

- Not recurring 9 1 0

2016 2017 2018-2021Total CAPEX

2017-21

Total CAPEX (€M) 102 152 550 702

Development 61 89 396 485

Maintenance 41 63 154 217

RE-USE

ENERGY RECOVERY

MATERIAL RECOVERY

PREVENTION

DISPOSAL

Change in product life-cycle

Extension of the productuseful life

Controlledlandfill

Recycling, composting

Waste-to-Energy, anaerobic digestion

Strong focus on the

development of material recovery

Environment Business

Unit to be the largest contributor

to A2A Growth

Environment Business

Unit to be the largest contributor

to A2A Growth


A2A AMBIENTE CONTRIBUTION TO CIRCULAR ECONOMYCOLLECTION

TARGETTARGET

2,700

3,580

3,940

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2014 2015 and 2016 @2020

More inhabitants served with collection and street cleaning: +100,000 inhabitants

every year by tendering in target selected areas able to guarantee certainty of payment

BP Target : covering more than 3.9 million

+660 kpM&A operation

LGH - LABICO

+220 kpAwarded tenders

2015-2016

DELIVERING OUR PLAN @ 2021DELIVERING OUR PLAN @ 2021

Reinforce leading position in Italy levering on geographic proximity:

Improving services efficiency and sustainability by applying new technologies

Benefit form vertical integration supporting A2A’s collection services levering on owned recovery andtreatment facilities and securing contracts for the supply of waste to the treatment plants

Target BP

@2021

Served inhabitants[Thousand]


312354

607

1,110

2014 2015 2016 @2021

M&A Rieco-RESMAL paper

200kt (completed)LGH paper/plastics

53kt (completed)

+128 ktPlants efficienciesCastenedolo paper

100kt -Asti glass20kt - Other 8kt

+375 ktSix plants already designed for material treatment after

separate collection including 2 plants for plastics selection with authorization already

presented in Q3 2016 -(45kt each)

A2A AMBIENTE CONTRIBUTION TO CIRCULAR ECONOMY MATERIAL RECOVERY

TARGETTARGET


Became a leader in recovery of material by building new assets and selective acquisitions

Increased recovery capacity +500k/t (+45% recovery capacity Plastics, Paper, Food waste)

Treated waste [Thousand t]

More in-depthin the Annexes


1,900 2,000

2,400

2,820

2014 2015 2016 @2021

+165 kt Plants efficiency

Flow Optimization Brescia and Milan

WtEs

+255 kt2 projects ongoing

Corteolona: VIA already obtained San Filippo del Mela

M&A LGH

TARGETTARGET


Reinforce energy recovery leading position in Italy by building new assets

Increased in WtE capacity +400 kt/y (+20% capacity)

Treated waste [Thousand t]

A2A AMBIENTE CONTRIBUTION TO CIRCULAR ECONOMY ENERGY RECOVERY

More in-depthin the Annexes


DELIVERING OUR PLAN: @ 2021DELIVERING OUR PLAN: @ 2021

Reinforce leading position in Italy levering on:

Increase capacity in storage and pretreatment through M&A operations

Partnership with EU big operators to enforcing market position

Increase presence on Italian Market for Hazardous WtE from 37% up to 44% thank totechnological optimization of existing asset

Operational excellence: standardization of operating process and creation of a global organizationfor commercial development, target: developing new offers covering the whole wasteproduction

A2A AMBIENTE CONTRIBUTION TO CIRCULAR ECONOMY

230

+163

568

2015 2016 @2020

+174 kt Plants efficiencies :WtE Filago 25kt

Inertization plant Giussago 45ktSED platform revamping 95 kt

Other 9kt

+163kt from M&ALGH landfill 100kt (2016

completed)LGH liquid waste treatment plant 63kt (2016 completed)

Business Plan target400 kt

TARGETTARGET

@2021

INDUSTRIAL WASTE


Business Plan 2017-2021 targets: challenging but achievable thanks to the positive track record

Environment BU to lead the Group growth

A2A Ambiente strengths: critical mass, business and technologic diversification, presence along the whole value chain

A2A focus on circular economy fully compliant with the upcoming EU regulation

KEY TAKEAWAYSA2A AMBIENTE


WASTE CIRCULAR ECONOMYFROM THEORY TO PRACTICE

Circular economy in waste treatment to be economically feasible and effective has to include WtE for exploitation of energy content in residual non recyclable waste and has to foresee a minor % of treated rejects to be landfilled or

sent to underground safe storage

Annexes


CIRCULAR ECONOMY IN ITALY - GLASSA VERY WELL ESTABLISHED VALUE CHAIN

Collection: 117,000 t/a (7% of national)

Treatment plant for recycling Asti (AT)

Capacity: 180 kt/y (10% of national ) 85% recycled in O-I glass factory 5% recycled to ceramic industry 10% rejects to landfill

Over 300 M bottles with recycled glass

Glass Production: 2,343 kt/a #

Separate collection 1,747 kt/a*

27.8 kg/capita per year 12.5% of separate collection

Recycled glass 71% #

288,000 tep overall energy saving #

Over 3M t raw material saving #

Over 1.8 Mt CO2 eq totale emission saving#

Glass as circular economy in ItalyGlass as circular economy in Italy A2A contribution to glass circular economyA2A contribution to glass circular economy

Data sources:* ISPRA report 2016 (data 2015)# COREVE report 2016

Annexes


CIRCULAR ECONOMY IN ITALY - PAPERA VERY WELL ESTABLISHED VALUE CHAIN

Paper circular economy in ItalyPaper circular economy in Italy A2A contribution to paper circular economyA2A contribution to paper circular economy

AS IS Consumer circuit paper 4,585 kt/y #

Separate collection 3,149 kt/y* + 500 kt industrial package 51.5 kg/capita per year *

Recycled paper: 3,653 kt/y (80%) + 20% to energyrecovery #

Saved wood 984 kt/y Energy saved 12,446 TJ/y (297,000 tep) 906 kt/y CO2 eq total emission saving

AS IS Paper Separate Collection: 156 kt/y (5% of

national) 4 Paper selection plant: 200 kt/y paper with

treatment capacity of over 340 kt/y Serving paper mill plants all over the world

Data sources:* ISPRA report 2016 (data 2015)# COMIECO paper report 2016° https://chemistry.stackexchange.com

TO BE No significant new actions in value chain required Mainiteining the same level of efficiency

4 plants 50,000 mq 100 employees 90 collection vehicles Over 1,200 containers,

press located on clients sites

Annexes


CIRCULAR ECONOMY IN ITALY - ORGANIC FRACTION TECHNICALLY SOLVED BUT TO BE IMPLEMENTED

Organic fraction circular economy in Italy A2A contribution to organic fraction circular economy

AS IS Separate collection 6,071 kt/y *

94 kg/capita per year 43 % of separate collection

Material recovery (compost)1,761 kt/y #

Biogas production 275 M Nm3 #

Energy production 550 GWh #

Over 100,000 tep saving #

3.5 Mt Co2 eq. saving #

compared to landfill

AS IS Collection: 422 kt/y (7% of

national ) Treatment of over 50 kt/y

organic fraction

TO BE A2A dev plan foresee in

2018-2020 construction of 4 new plants for treatment of about 300 kt/a and production of 21M Sm3/y biomethane

Data sources:* ISPRA report 2016 (data 2015)# CIC report 2017

TO BE Upgrading to biomethane

production Biomethane potential

production 260M Sm3 corresponding to: Consumption of

11,800 wastecollection vehicle

Thermal domesticconsumption of 660 k people

Overall Energy saving202,600 tep

Annexes


CIRCULAR ECONOMY IN ITALY - PLASTICSTILL LOW RECYCLABILITY RATE

Potential plastic circular economy in Italy A2A contribution to plastic circular economy

AS IS Consumer circuit plastics over 2,000 kt/y Separate collection 1,178 kt/y

16.7 kg/capita 8.4% of overall separate collection

Recycled plastics 500 kt/y 90,000 tep saved

In Italy only 50% of separately collected plastic is recycled In EU 2014 30 % recycling, 40% energy recovery, 30% landfill

Main issue: plastic is made of many different polimers: (PET, HDPE, PVC, LDPE, PP, PS) difficult to separate (both manually by people and mechanically) Different recycling technologies Many players involved in recycling chain

AS IS Plastic Separate Collection: 73.3 kt/y (6%

of national)

TO BE A2A dev. plan foresee in 2018-2020

construction of 2 new plants for treatment of 90 kt/y and production of 45 ktrecovered materials ready for recycling

Data sources:* ISPRA report 2016 (data 2015)# EU plastic report 2017**https://www.webstaurantstore.com/blog/2038/plastic-recycling-numbers-and-symbols.html

TO BE Improve mechanical selection rate and quality Polymer separation technologies Foster R&D to improve recycling processes (from separated

polymers to prime costituents) If 50% of consumer circuit plastics (1,000 kt/y) would be

recycled extra 90,000 tep saved

When plastic recycling is no longer the most sustainable option, energy recovery is the complementary alternative.

Both options complement each other and help realize the full potential of plastics waste.

*

**

Recycling Energyrecovery

Annexes

https://www.webstaurantstore.com/blog/2038/plastic-recycling-numbers-and-symbols.html

https://www.webstaurantstore.com/blog/2038/plastic-recycling-numbers-and-symbols.html


ENERGY RECOVERY WTE - SYNERGIC TO RECOVERY FOR ZERO LANDFILL TARGET

WtE in ItalyWtE in Italy A2A role in WtEA2A role in WtE

AS IS Total MSW: 29,524 kt (100%) Separate collection 14,021 kt (47.5%) Residual fraction: 15,503 kt (52.5%)

255 kg/capita per year *

41 WtE operating (26 north, 8 center and 7 south) with 6,100 kt (including some special waste fractions)

Still strong dependance on landfill (26%): similar to status of Germany in 2000

AS IS Collected residual fraction: 510 kt/y (3.3% of national) Pretreatment: 10 MBT plants: 1,000 kt/y 7 WtE including the three biggest in Italy : 2,000 kt/y

(30% of national) EE recovered from WtE 1,350 GWh/y corresponding to

consumption of 80,000 flats Heat recovered from waste 1,800 GWh/y

corresponding to consumption of 60,000 flats

Data sources:* ISPRA report 2016 (data 2015)

TO BE The need of new WtE in Italy can be estimated in 6,000 kt of

additional capacity with a CAPEX need of about 6 B€ with the following hypotesis**

Considering a target of 65% separate collection Aiming at going to zero landfill Full WtE of pretreated residual fraction and rejects from

separate collection

TO BEA2A development plan foresee in 2018-2020 constructionof 1 new WtE for treatment of 250 kt/y

The evolution of waste management in UE top countries that havereached 0 landfill since many years shows that WtE and recycling growsin parallel in a synergic framework

**Data sources:Studio Leap Politecnico di Milano 30.09.2015

Annexes


A2A Investor Relations Team

Mail: [email protected]

Phone: +39 02 7720 3974

http://www.a2a.eu/en/investor/

CONTACTS AND IR PRODUCTS

a2a2017Investor Guidebook

InvestorDatabook(excel file)

Concise and thorough insight in the A2A Group in the form of a longpresentation divided into three main parts: Our World, Our Results and OurResponsibilities. The selected contents are all publicly available information,which you may find spread across a large number of Company documents

• Historical economic, financial and operational company data as of 2008 –on annual and quarterly basis

• Economic, financial and operational data useful for building A2A earningsmodel – 2015 FY reported and 2016-20 BP forecast

• Tables of the Investor Guidebook mainly relevant to a quantitative analysis

Periodic update service for investors

and analysts on the significant steps of

A2A Business Plan – such as relevant

investments, new projects,

achievements, contracts, agreements.

If you wish to subscribe to the service,

please visit A2A website at the

following link

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Brief and synthetic document that shows the highlights and the strengths ofA2A business model

Moreover A2A publishes the following documents in the Investor Library Section on A2A website:• Documents prepared by the Market Analysis, Modeling and Pricing Unit of A2A

- Overview of the Italian Energy Market (yearly basis)- Notes on energy and environmental markets (quarterly basis)

• Documents prepared by Divisional Managers of A2A- A2A Environment BU- A2A Networks & Heat BU- Main Regulatory Issues for Investors

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Publications

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