Letter to shareholders

In a global scenario characterised by a lasting phase of economic and financial uncertainty, Acea continues to be a reliable business.

The growth in turnover and the net improvement in gross operating profit accompanied by a solid Group asset structure demonstrate the validity of the strategy adopted by the company, which has been able to react well to an unfavourable macroeconomic environment and a still uncertain regulatory scenario.

The 2012 results confirm the high levels of profitability and positive industrial performance of all business areas, in line with the Acea Group strategy and with the targets disclosed to the market.

In the Water area, revenue increased mainly due to tariff adjustments recognised under the previous method, even though the segment margin is affected by higher costs for the purchase of electricity due to the water emergency in the summer of 2012.

The operating margin increased in the Environment area mainly due to waste disposal and electricity production, thanks to the start-up of two new lines at the San Vittore del Lazio waste-to-energy plant, in April and July 2011, respectively.

In the Energy area, please recall that the repowering works at the Salisano and Orte hydroelectric power stations have been completed, and works to extend the district heating network in a residential district of Rome continue. Plant repowering will facilitate an increase in the contribution of renewable sources to electricity generation and will also guarantee that green certificates will be obtained.

In terms of electricity sales, Acea confirms its steadfast commitment to the management and development of the customer portfolio in an evolving market context which requires particular focus on service quality.

In the Networks area, as forecast in the 2012-2016 Business Plan, Acea sold the Apollo company, operating in the photovoltaic sector, to RTR Capital through its subsidiary ARSE on 28 December 2012. After that sale, the assets remaining in ARSE’s portfolio have a total capacity of roughly 13 MWp, which will be disposed of in the future.

Investments remained at very significant levels throughout 2012. In fact, Acea made over 513 million euros in investments to strategically maintain market competitiveness and service quality. Of these, over 223.4 million euros (roughly 44% of the total) will guarantee the expected tariff development. Particular effort will be dedicated to Electricity distribution and the Renewable Energy area (20%), both PV power and cogeneration, to ensure improvements in service quality and continuity. The allocation of 7% investments made to the Environment Area makes a significant contribution to environmental sustainability. In this area, the Group intends to increase and develop its waste-to-energy capacity and expand its capacity in the disposal of biological sludge, in biomass and special waste treatment. Approximately 5% of investments were made in the Energy sector with the revamping of hydroelectric power plants, while 110 million euros was invested to purchase the historical company offices at Piazzale Ostiense.

Investments will continue at the same pace in the coming years as well, as forecast in the new 2012-2016 Business Plan approved by the Board of Directors on 20 March 2012.

In 2012 the Company maintained high levels of profitability thanks to the contribution of all business areas and excellent cash flow management, thereby achieving the efficiency improvement targets considered in the Budget, consolidating domestic leadership in the Water segment and growing due to the contribution of the PV and Environment sectors. As a result of the above, advances on dividends for 2012 equal to 0.21 euro per share were already distributed in December, and the balance of 0.09 euro per share will be distributed in May of this year.

The financial statements for the year in question closed with consolidated revenue of 3,612.7 million euros and gross profit (EBITDA) of 695.2 million euros, up compared to last year.

Group operating profit (EBIT) totals 302.1 million euros.

Consolidated net profit stands at 77.4 million euros after allocations to third parties.

Before concluding, I wish to highlight that the Board of Directors and the Board of Statutory Auditors will be reappointed halfway through April 2013. Both have worked in the spirit of mutual cooperation in the areas for which they are responsible, and have set as their primary objective business consolidation and development.

I would like to personally thank all Group employees and associates for the work they do each day, at all levels, with commendable teamwork and professionalism