Dear Shareholders and Stakeholders

in presenting you with the results of the Consolidated Financial Statements and Sustainability Report for the financial year 2022, we are once again using a single letter for both documents. It is a choice and at the same time a necessity: Iren Group's vision merges development and sustainability into a single value, with the aim of improving people's quality of life, making companies more competitive and looking at the growth of territories through the eyes of change. A firm and transparent commitment that is reflected in the profound integration of the industrial strategy with the sustainability strategy.

The past year has been characterised by the intertwining of three crises: the war in Ukraine and its effects on the energy market; the pandemic, now in its third year, which continues to affect the economy and society, albeit less severely; and climate change, manifesting itself in heat waves, drought and floods, all of which contribute to increased social and economic instability.

In this complex context, the Board of Directors confirmed Iren Group's strategic approach, outlined in the Business Plan to 2030, a plan strengthened in its main drivers. Three are the strategic pillars: green transition, with a progressive decarbonisation of all activities and the strengthening of the leadership in the circular economy and the sustainable use of resources; local presence, with an extension of the perimeter in the legacy regions and the evolution as a reference partner for the communities; service quality, through the improvement of performance and the maximisation of customer/citizen satisfaction levels.

Iren merges development and sustainability into a single value, with the aim of improving people's quality of life

The strengthening of the Group's strategy, despite the crisis scenario, on the one hand, demonstrates how sustainability is a constituent value, and, on the other hand, certifies the soundness of Iren's strategic planning, which analyses and evaluates macroeconomic, financial, energy, climate and social trends and scenarios that are decisive for sustainable development, in terms of risks and opportunities. This has allowed Iren Group to define its short-, medium- and long-term strategic priorities - consistent with the UN Sustainable Development Goals (SDGs) to which Iren currently contributes and can contribute in the future - and an action and governance plan in line with the principles of the UN Global Compact, the UN Universal Declaration of Human Rights, and the Conventions and Recommendations of the International Labour Organisation (ILO)

Iren's business model is oriented towards transforming, through the activities managed by the Group, input resources (environmental, social, economic and governance) to create value for the company and the various stakeholders in the short-, medium- and long-term.

Thanks to the synergies between the various business areas, also in a logic of innovation, the Group guarantees the utmost commitment to reduce its environmental impact, to demonstrate social awareness, to satisfy the needs of customers and communities and to guarantee high safety standards for employees and suppliers.

In order to translate this commitment into a concrete result, Iren Group has articulated a materiality analysis process that is developed dynamically, involving its stakeholders to share and assess material issues for strategic development and performance reporting.

The integration of the industrial and sustainability strategy is also evident in the numbers: 10.5 billion Euro of planned investments between 2023 and 2030, up by 200 million Euro compared to the previous Business Plan; 80% of the total organic investments over the plan, approximately 7.5 billion Euro, allocated to sustainable projects for achieving the commitments undertaken. A confirmation of the Group's desire to combine its own development with that of the communities, territories and environment, which also concerns the workforce, with an important recruitment plan to support development and which foresees, by 2030 compared to 2022, the entry of about 3,200 new employees into the Group.

This is a significant commitment, guaranteeing the desire to continue along the path taken with the previous Business Plan, the validity of which allowed for record investments in 2022, amounting to around 1.5 billion Euro, up 56% compared to 2021 and more than double that of 2020. In line with the pillars of the Business Plan, 75% of the investments made by the Group were allocated to sustainable projects or activities.

1.5 billion Euro of investments (up 56% compared to 2021) of which 75% allocated to sustainable projects or activities

The 2022 results highlight the strength and resilience of the Group's business model. Despite the strong development drive that led to an increase in capital expenditure, the Group kept its net financial debt below planned levels, at 3.3 billion Euro, thanks to the efficient management of net trade working capital in a very volatile environment affected by rising energy commodity prices. Gross Operating Margin (EBITDA) amounted to approximately 1.06 billion Euro, up 3.8% compared to 2021 and 6.4% net of non-recurring effects: an overall increase, negatively influenced by the impact of drought on the energy chain, by the lower consumption of district heating due to milder temperatures, and by higher operating costs due to inflation. The Group Net Profit, equal to 226 million Euro, was also affected by the negative extraordinary impact of the Solidarity Contribution, while compared to a 2021 net profit positively influenced by non-recurring tax income and other contingent assets. Finally, the Group's workforce is growing (up by about 1,500), totalling 10,583 employees at the end of 2022.

The results of the closed financial year are accompanied by an overall positive trend in the sustainability indicators relating to the objectives of the three pillars of the Strategic Plan.

Regarding the green transition, electricity production from photovoltaic plants increased tenfold during the year, although reduced hydroelectric production, caused by drought, led to a slight worsening of carbon intensity, equal to 339 gCO2/kWh. The production of biomethane more than doubled compared to the previous year, reaching 5.8 million cubic metres: an increase in the valorisation of waste as an energy source that goes hand in hand with its valorisation as material, grown by 40% compared to 2021, which saw 836,000 tonnes of waste sent for recovery in Group plants. The total energy savings of the production processes amount to about 700,000 toe. Finally, the green energy sold has increased, aimed at encouraging sustainable consumption and reducing the environmental impact generated by our customers. In addition, to support the Strategic Plan, the Group has signed several ESG Sustainability Linked loans whose spread is linked to the achievement of specific environmental objectives related to decarbonization and the rational use of water resources. In terms of strategic directions oriented towards local presence, the amount of investments made to increase the efficiency of infrastructure and services and to maximise business development opportunities in the reference territories is emphasised: this amounts to 1.4 billion Euro (gross).

In 2022, the Group's contribution to the sustainable development of the local areas and communities was also reflected in the implementation and support of 335 sustainability projects. The projects, which range from the construction of plants and infrastructure, education and culture, adaptation to climate change, saving water and energy resources to promoting social inclusion for the most vulnerable, are in line with the Sustainable Development Goals of the 2030 Agenda.

The results of the Eduiren sector deserve a mention: an ongoing dialogue with different audiences to spread the culture of sustainability and innovation across the board, through training offers and joint planning of awarenessraising paths. In 2022, 615 sustainability education projects for citizens and schools were implemented, also in a network with other subjects in the different areas, with the involvement of about 49,000 people who participated in Iren Group | Sustainability report 2022 11 meetings, visits and events, and with more than 2.4 million digital contacts recorded though the various branded contents available.

The valorisation of waste as material has grown by 40% compared to 2021, with 836,000 tonnes of waste sent for recovery

The Business Plan to 2030 envisages that around 10 billion Euro, namely 95% of total investments, will be allocated to the Group's reference territories, in order to design a sustainable future beneficial for the communities, by strengthening its local presence, building energy communities and reinforcing its ability to build a system with the territory in order to develop services under concession to help overcome the country's infrastructure gap.

Finally, the service quality improved during the year, as is evident in the increase in the overall customer satisfaction index, which amounts to 91%. The network of local counters grew (+17%) as did the digital services offered to customers, thanks to an increasing penetration of the IrenYou channel (+54% users, equal to over 1.3 million customers). Thanks to district subdivision activities, which allow for greater monitoring and timely intervention, water network leaks were reduced to 31.2%, in line with the target of 20% in 2030, gas distribution networks were 100% inspected, and the installation of gas, electricity and water smart meters continued in line with Business Plan forecasts.

7.5 billion

euro allocated to sustainable projects

836.000

tonnes of waste sent for recovery in Group plants

91%

customer satisfaction index

The efficient management of the Group in terms of size and economic-financial indicators, the development of skills and quality in services, the utmost attention to sustainability and care for human resources and customers, are the key factors that have enabled us to achieve the results we are presenting for the approval of the Shareholders, proposing to the Shareholders' Meeting a dividend of 11 Eurocents per share, up 4.76% compared to last year.

The positive results we have achieved, and even more so the challenging goals we have set ourselves for the future, would not be possible without the exceptional contribution of the women and men of Iren Group, who daily infuse their work with competence, responsibility, dedication and commitment, all of which enhance Iren Group's service to the communities. For this reason, also on behalf of the Board of Directors, we would like to express our heartfelt thanks to them. We would also like to thank our Shareholders and Stakeholders, for the incentives they provide us with to pursue sustainable development, and the members of the Board of Directors and the Board of Statutory Auditors for their decisive contribution to the growth of the Group.

Chairperson

Luca Dal Fabbro

Deputy Chairperson

Moris Ferretti

Chief Executive Officer

Gianni Vittorio Armani

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