Dear Shareholders and Stakeholders

once again this year, Iren Group has chosen to communicate to you through a single letter to share the results of the economic report and the goals achieved in the field of sustainability. This is because more and more world events and economic and financial targets unequivocally confirm that there can be no growth and development of a country, as well as of a company, without serious and constant attention to sustainability. The past year has half marked the trajectory from the 2030 Agenda for Sustainable Development, signed by the 193 UN member states in 2015. It is therefore time for an initial stocktaking and reflection on how best to optimise the period leading up to one of the decisive milestones for a globally sustainable future.

According to the UN 2023 report on the SDGs, progress on more than 50% of the goals is weak or even insufficient, while the path towards achieving 30% of them has stalled. In light of the challenges to be achieved and the results to date, it is necessary for countries, major world economies and industrial realities to drive accelerated transition, thus recovering the gap.

The succession of extreme events, in addition to the increase in global temperatures to the 1.5 °C limit compared to pre-industrial levels recorded in 2023, confirms that we are facing a global emergency, as is in fact, the climate crisis, together with the continuing international energy crisis and high international geopolitical tensions. In this scenario characterised by the intertwining of critical issues, Iren Group has maintained high economic, social and environmental performance, in line with the objectives set in the 2030 Strategic Plan. The integration between the industrial strategy and the sustainability strategy is the central element in the achievement of these results, as is also evident in the numbers: the investments made by Iren Group in 2023 were close to 1 billion euro, with a large share, almost 80%, going to sustainable projects or activities.

There can be no growth and development of a country, as well as of a company, without serious and constant attention to sustainability.

Efficiency in distribution networks, development of waste treatment plants and increasing generation capacity from renewable sources are the main assets in which Iren has invested.

The Gross Operating Margin (EBITDA) stood at 1,197 million euro, up 13.5% compared to 2022 despite the volatility of the energy scenario. This result was achieved mainly thanks to the full recovery of the Market Business Unit, hydroelectric generation, and the full contribution of the new integrated companies such as SEI Toscana and Acquaenna. Group Net Profit attributable to shareholders reached 255 million euro (up 12.8% compared to 226 million euro in 2022). The result for 2023 includes 41 million euro in provisions for risks related to the Sostegni Ter DecreeLaw.

In spite of major investments to reach the renewable capacity target of 800MW and the start-up of significant new plants for the circular economy, the Group managed to contain the increase in debt thanks to the cash flows generated and the excellent management of net working capital.

The effectiveness of a strategy focused on environmental and social sustainability goals combined with economic ones has further strengthened the Group's financial structure. This is evidenced by the January 2024 issue of the fifth green bond, which registered orders for more than 4.7 billion euro, about 10 times the amount offered.

Thanks to the synergies between the different business areas, the Group was able to meet all the main targets of the Business Plan and maximise its commitment by achieving important goals in the core industrial areas. A path that has led by 2023 to an increase in energy production from renewable sources; to improved services for energy efficiency; to the virtuous use of water resources through an increasingly integrated system; and to a more effective management and valorisation of waste as a new resource.

In 2023, in fact, the Iren strategy continued for waste recovery and the adoption of the most advanced circular economy models, with the opening of innovative plants in the Group's historical territories. In Reggio Emilia, for example, the OFMSW plant was inaugurated with a treatment capacity of 167 thousand tonnes of organic residues and green fraction, to be transformed into biomethane, quality compost and carbon dioxide for industrial uses. Further reinforcing the Group's leadership in the field of innovative waste management and valorisation was the Circular Wood plant in Vercelli, a unicum at national level for the production of pallets and pallet blocks from recycled wood.

Approximately 1 billion Euro of investments of which nearly 80% allocated to sustainable projects or activities.

The realisation of Iren Group's strategy for the development of renewable energy sources as a sustainable option in the medium to long term led to a growth in "green" production of over 30% in 2023 compared to the previous year. The commissioning of the photovoltaic park in the province of Matera, the largest in Basilicata, and the entry of Iren into the wind power sector are some tangible signs of strengthening in this field. In line with the pillars of the Business Plan, the Group has worked to further affirm its role as a reference point for the territory, the community and families, also through the offer of an increasingly integrated water system.

In this direction was the continuation of the programme to make water networks more efficient, to gradually reduce the amount of water withdrawn from the environment for drinking water purposes, and to increase purification capacity to increase the quantity and improve the quality of the resource returned to the environment. A continuous and constant effort that led to a further reduction in water losses to 30.4% in 2023, compared to a national average of over 41%.

The acquisition of a majority stake in Acquaenna was a significant transaction that allowed the Group to become a reference partner for the development of new services also in Southern Italy.

Performance achieved thanks to the Group's ability to focus on human capital, a true competitive factor capable of triggering social and environmental change and creating added value in the territories served.

In recent years, our team has grown in unprecedented numbers: 3,222 are new hires compared to 2020, of which more than 1,100 in 2023 alone. A key lever that has contributed to the enhancement of human capital is the focus on inclusiveness and diversity with training and development processes from the very beginning. Proof of the success of these processes, once again, are the numbers: the presence of women among managers and executives is 25% higher and the proportion of new recruits under 30 exceeds 50%.

The centrality of the consumer is crucial to achieving the energy transition. Iren works to include the customer more and more in the process of managing the services offered. In this area, for example, the network of territorial counters grew by 28% in 2023, and the streamlining of processes led to a reduction in waiting times (thanks also to new digital systems) and in the number of complaints.

The evaluation of service quality by citizen-customers gives positive ratings and shows a general improvement in the Group's performance. The exceeding of 71% separate waste collection in the historical territories and the growth of renewable energy sold to customers are concrete examples of the forward-looking path that Iren is taking.

Iren Group's strategy for the development of renewable energy sources led to a growth in "green" production of over 30% compared to the previous year.

With respect to another important challenge, that of the European Taxonomy, a single system to classify environmentally sustainable economic activities, Iren scores significant results: 58% of the activities managed by the Group are in fact eligible for the Taxonomy, of which 52%, equal to about 800 million euro, are aligned for the "climate change mitigation" objective.

1,100

new hires in 2023

71%

separate waste collection in the historical territories

800 million

euro in activities aligned with the Taxonomy

The Group's positive performance is the result of the great commitment of Iren women and men, their dedication and sense of responsibility towards the great challenges ahead and towards our territorial communities.

For this, we wish to express our sincere thanks to the people who work in Iren Group and remember the fundamental contribution of shareholders, stakeholders, members of the Board of Directors and the Board of Statutory Auditors in pursuing sustainable growth capable of generating value for the communities.

Chairperson

Luca Dal Fabbro

Deputy Chairperson

Moris Ferretti

Chief Executive Officer

Paolo Signorini

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