The next few months will be characterised by an acceleration of investments, expected to grow strongly (+50%) compared to 2021, taking advantage of several development opportunities that make it possible to anticipate part of what was foreseen in the Industrial Plan. The latter rests its rationale on three strategic pillars that guide investment choices: ecological transition, territoriality and quality of service. The goals of the green transition are to progressively decarbonise all activities and strengthen leadership in the circular economy. With territoriality, Iren wants to extend its perimeter of activity in the reference territories and be the reference partner for local stakeholders. Finally, with service quality, Iren aims to improve the performance of network services and maximise customer satisfaction in all businesses.

In 2022, the Networks segment is characterised by a reduction in the rate of return on invested capital (WACC), with a consequent reduction in tariff revenues offset, by the increase related to the acceleration of investments made in recent years, which is positively reflected in the remunerated invested capital (RAB). In particular, investments in the integrated water system encourage increased purification capacity, reuse of resources and reducing water losses through increased efficiency. In the electricity and gas distribution network, the objective is to increase the power supported by the former and make the latter suitable for the distribution of hydrogen mixtures, while keeping in mind the continuous improvement of service quality.

With regard to the Waste Management sector, current investments are aimed at building the waste treatment and disposal plants envisaged in the business plan and at increasing the quality of the service by extending door-to-door collection and punctual pricing. These investments, together with the complete coverage of the waste cycle (from collection to treatment and disposal), will make it possible to increase the volumes of recovered material.

Regarding the Energy and Market sectors, Iren will continue to implement a series of actions aimed at mitigating the impact of volatility in electricity and gas prices thanks to a hedging policy having the goal of stabilising margins in the entire energy supply chain. The development of the generation park will benefit from the commissioning of the new production line of the Turbigo thermoelectric plant, the consolidation of the recently acquired photovoltaic plants and the organic development of new renewable capacity, accompanied by the growth of our customer base.

Finally, the Smart Solutions sector, focused on the energy efficiency of buildings, will be able to seize the opportunities offered by government incentives related to building requalification, to the development of electric mobility and will be able to act as the main interlocutor for public administrations to ground complex urban requalification projects.

In relation to the international geopolitical crisis arising from the Russia-Ukraine conflict, it is currently difficult as well as uncertain to assess the effects and repercussions that could arise from the continuation of the international crisis. In such a scenario, there are two main risks to be borne in mind: the volatility of commodity prices and the concomitant inflationary effect. Iren monitors the evolution of the situation on a daily basis, defining the possible risk scenarios for its activities and identifying, where possible, mitigation actions.

In addition, in order to contain the impact resulting from the increase in commodity prices, whose upward trend began in the fourth quarter of 2021, the government has already approved measures aimed at calming the imbalance between the production and sales prices of electricity and gas; these measures, according to initial estimates, will have an insignificant impact on the Group's profitability.