2017 Results
Tomaso Tommasi di Vignano

Tomaso Tommasi di Vignano

2017 Overview

Positive results confirmed for the Group in 2017 as well: the 984.6 m€ EBITDA shows indeed a 7.4% increase compared to the previous year. Cash flow, which settled at 306.5 m€, allowed dividends coming to 9 cent/share to be paid last June, and the period’s M&A operations to be financed. Shared value activities also increate, which represent 33% of Group EBITDA, as did the creation of value for shareholders, through policies of sustainable growth, globally spread across all of Hera’s operations.

Close and back to the site

Commento del Presidente

Overall results

In general, the results for 2017 show a positive trend sustained by all business areas. Above and beyond the 7.4% growth in EBITDA, net profits increased by 21.3%, with investments reaching 396.2 m€ (+8.1% over 2016). Internal growth also boosted this growth, as did the M&As carried out during the year. The Net debt/EBITDA ratio of 2.56 can be counted among the best in the sector.


984.6 mln of Euro


Net profit

251.5 mln of Euro


Net financial position

2,523 mln of Euro

Areas of activity

All sectors of activity contributed to the 68 m€ increase in EBITDA, reached by the Group thanks to its commitment to implementing sustainable policies and activities, all of which generate shared value

Read more
  • gas
  • electricity
  • water cycle
  • environment
Close and back to the site

Initiatives in energy efficiency

3.6% reduction in energy consumption compared to 2013

Increased purchasing of renewable energy for the company’s use

Increased production of renewable energy by Hera (614 GWh)

16% reduction in the carbon footprint from electricity production compared to 2015

New 2017 marketing offers: Welcome Hera, Hera Led and Led Business

Digital solutions for monitoring customer consumption in real time


Commitment to the transition towards a circular economy

Further reduction in the use of landfills for disposal of urban waste (7%, vs. the 2016 Italian average of 28%)

Production of roughly 103 thousand tonnes of plastic recycled by Aliplast

91% of urban areas brought into line with sustainability standards in their sewerage and purification plants by the end of 2017


Service digitalisation processes

Increasing use of the apps Acquologo and Rifiutologo: 30 thousand notifications sent by users

Launch of the app MyHera in 2017

18.9% of customers registered for online services at the end of 2017

E-billing for 20.2% of customers

Y17 financial results

Investor kit
  • Benchmark
  • Analyst
  • Strategy
  • Our History
Gas Integrated water cycle Environment Electricity

Growing 4.0 with shared value

Hera pursues a multi-business growth strategy, focused on 3 core businesses: waste services, energy and water cycle. The Company shows its capability to keep a balanced portfolio, made up of low risk regulated activities and profitable liberalized ones, with a further expansion potentials. That creates a successful business model, which has inspired other utility companies in Italy and abroad.

Since it was created, Hera has pursued a path of growth, both organic and external.
The development strategy not only includes measures to support organic growth in those businesses that we already control, but also consolidation and acquisition operations to broaden the current scope of reference, while maintaining the Group's sound financial structure, in the context of a shared business vision .
Internally, Hera will take all opportunities to develop the activities in its core businesses, leveraging innovation, efficiency and excellence.

Meanwhile, the external growth strategy will be based on three pillars:

merger and consolidation operations with other companies in the multi utility sector, where the Group has a proven track record;

acquisition of assets in the individual business areas served, with the aim of accelerating growth in the customer base and adding to our plant and industrial facilities;

participation in tenders for the award of concessions for regulated services (e.g. gas distribution, urban sanitation, water cycle).

Targeting excellence
The competition between operators in the energy, environment and networks sectors, which is already strong, will reach new levels of intensity in the next few years. It is therefore increasingly important to be recognized by our customers, commercial partners and suppliers as excellent players with the ability to stand out in this business. For the Hera Group, standing out means always ensuring the highest levels of quality in the sector across all of our services. This entails a constant commitment to identifying new solutions to enhance, further and continuously, the high standards of quality already achieved . The perception of quality on the part of our customers and unwavering attention to their needs have always been at the heart of the Group's quest for excellence. This attention is even more important in today's changing environment, where the diffusion of digitalized services has brought new opportunities for improving the relationship between company and customer, with a view to developing the customer experience.

Reducing costs
A focus on cost containment, ongoing rationalization and optimizing corporate processes are the underlying principles of Hera's business model. As a result of these strategies, the cost-benefit ratio of services has improved steadily, and an excellent performance has been achieved against the national benchmarks. Looking ahead, expectations of an increasingly challenging regulatory environment, in an economy that continues to flag and where competitive pressure is growing, makes it even more important to contain our cost base. In its medium-term projections, Hera has already made plans to extract more efficiencies, leveraging all the benefits that the new innovative solutions will make available. This objective will thus be achieved not only through steps to reduce internal costs, acting on energy saving, saturation of activities and optimizing information flows and data bases, but also through measures to reduce the company's external costs.

In an economic, industrial and regulatory context that is increasingly volatile and exposed to major changes, innovation is a key element in the Group's strategy, as shown by our recent creation of the Innovation Department, which has a cross-cutting relationship with all the other corporate departments (link to dedicated web pages), in order to enhance their operation. Innovation enables us to develop and accelerate opportunities to extract efficiencies and synergies: new technological applications, new operating processes, new services and new business models will represent the practical deployment of Hera's strategy in this area. Through innovation, the Group aims to enhance its service quality and pursue growth in line with a model of excellence. Hera will therefore continue to keep a watchful eye on the field of innovation, starting with the phase of identifying areas of strategic interest and comparison with the experiences of other national and international business entities, and going on to implement innovative solutions through interactions with the academic and industrial worlds within the region.

Dividend policy uprise to create value for the shareholders

EBITDA '17 Networks Waste Energy
Ebitda Net profit Debt/Ebitda M&A

Hera stock and the creation of value for shareholders

In 2017 the Hera share showed a trend higher than the sector indices. It has also climbed the Thomson Reuters GLOBAL DIVERSITY & INCLUSION INDEX, which includes the 100 best companies listed for diversity and inclusion, ranking FIRST in Italy and tenth globally.

Read more
Close and back to the site

During 2017, all main European stock indexes recorded an overall increase, thanks to a general improvement in the macroeconomic context and the constant support provided by the European Central Bank’s expansionist monetary policy. Overseas markets also achieved positive performances, reaching new historical highs, based on the expectations for growth in corporate profits and the benefits deriving from the fiscal reform promised by the United States administration.

With its final result of +15.5%, the Italian stock exchange showed the best performance in Europe, benefiting from the country’s reinforced prospects for economic growth and the recovery in fundamental prices for Italian stocks, which had been discounted with respect to their European counterparts.

The decrease in sovereign bond yields, seen in particular for the debt of Europe’s more outlying countries, gave rise to a favourable context for investments in the utility sector that, showing constant progress quarter by quarter, closed the year with an increase +20.2% higher than the one recorded by the Italian market.

Within the utility sector, Hera stock stood out with a performance of +33.9%, ending trading for 2017 with an official price of € 2.929 and a capitalisation of roughly € 4.4 billion, the highest ever recorded since the birth of the Group. Hera showed a trend that remained constantly above its reference sector, trading at over 3 euro in December, thanks to both the support provided by the quarterly results, whose increases were higher than consensus expectations, and the prospects for development contained in the business plan, presented to the financial community in early 2017.

On 19 June 2017, in line with the indications contained in the business plan, Hera paid a dividend coming to 9 cents per share, the fifteenth in a series of uninterrupted increase since being listed.

Dps 0.04 0.05 0.06 0.07 0.08 0.08 0.08 0.08 0.09 0.09 0.09 0.09 0.09 0.09 0.09

The joint effect of the continuous payments made to shareholders through dividends and an increase in the price of the stock allowed the total shareholders’ return accumulated since the company was initially listed to remain positive once again and to settle, at the end of the period in question, at over +225%.

The financial analysts covering the company (Banca Akros, Banca IMI, Equita Sim, Intermonte, Kepler Cheuvreux, MainFirst and Mediobanca) expressed a clear prevalence of positive judgements, with almost all recommendations defined as buy/outperform. At the end of the year, the consensus target price came to 3.15 euro, well above the 2.77 euro recommended at the end of 2016.

Shareholder breakdown at 31/12/2017

As at December 31, 2016, the company structure shows the usual balance, with 51.3% of the shares held by 118 public shareholders of the areas in which the Group operates and regulated by a syndicate agreement (signed on June 26, 2015) lasting for a period of three years.
On 8 July, in accordance with the terms of the agreement, 12 shareholder Municipalities have sold in a coordinated and transparent manner, through an accelerated book building operation, approximately 16 million shares, corresponding to 1.1% of the share capital, to more than 30 Italian and foreign institutional investors.

Read more

Shareholder 2017

Close and back to the site

At 31 December, 49.5% of the corporate structure consisted of shares belonging to 118 public shareholders located across the geographical areas served and regulated by a stockholders’ agreement, signed on 26 June 2015 and in force for three years, while 50.5% of the shares were floating.

On 23 June, in keeping with the agreement, 13 Municipality shareholders sold, in a coordinated and transparent way, through an accelerated book building operation, roughly 25.7 million shares, corresponding to 1.7% of the share capital, to over twenty Italian and foreign institutional investors. Thanks to a demand that reached over twice the amount put on sale, the placing occurred at a price of 2.79 euro per share, with the lowest discount seen on the market since the beginning of the year for similar operations, 3.3% of the price at closing time on the previous day. The placing led to a rise in floating stock, with clear benefits for trade liquidity.

Since 2006, Hera has adopted a share buyback program, renewed by the Shareholders Meeting of 27 April 2017 for 18 further months, for an overall maximum amount of € 180 million. This plan is aimed at financing M&A opportunities involving smaller companies, and smoothing out any anomalous market price fluctuations vis-à-vis those of the main comparable Italian companies. At the end of 2017, Hera held 15.3 million treasury shares.

In the period under review, Hera’s senior management engaged in an intense dialogue with investors, with its business plan road show in the first quarter and its participation in sector conferences in the remaining quarters. The intense dialogue cultivated by Hera with investors and all stakeholders has helped reinforce its market reputation and represents an intangible asset that favours Hera stock and its stakeholders.

As regards the information required by article 2428 comma 3, n. 2 and 3 of the Italian civil code, the number and nominal price of the shares making up the share capital of Hera S.p.A., the number and nominal price of treasury shares held at 31 December 2017, in addition to the changes in the above that occurred during 2017, see note 24 of paragraph 3.02.04 and the table of changes in net equity in paragraph 3.01.05, concerning the separate financial statements of the parent company.

Hera's stories

Behind the numbers: stories of shared values

The figures presented by Hera in its 2017 financial statements take on even more value if read in light of the fact that they come from shared value projects, based a principle according to which the positive trends shown by a company coincide with the wellbeing of the people that, for various reasons, come into contact with it.

33% of the past year’s EBITDA, corresponding to € 329 million, derives from shared value activities, which were devised in a response to the call to action set out in those points in the UN’s Agenda for global development that fall within Hera’s field of action.

The strategic plan to 2021 expects this figure to reach, by the end of the five years in question, 40%. The Group wishes to present further details, showing the stories and the people behind these numbers, who with their work, on a daily basis, create value for the company and all its stakeholders.

ESG finance and millennials

by Luca Cimatti

The holistic vision of financial levers

by Daniela Pulvirenti and Luca Moroni


by Cecilia Natali

The importance of people

by Alessandro Camilleri

Close and back to the site

ESG finance and millennials

Some thoughts from Luca Cimatti, part of the Group’s Investor relations office, responsible for relations with financial analysts as well as a competent and enthusiastic spokesperson for generation Y

By the end of 2016, approximately 23 trillion dollars were managed by professional investors following the rationale of socially responsible investment (SRI). This figure, that represents 26% of all assets managed globally, shows a 25% increase compared to 2014. According to many of the sector’s experts, this trend is destined to continue thanks to the growing importance of the generation of millennials (also known as Generation Y), made up of all those born between 1980 and 2000. This group represents approximately half of the United States’ workforce, and according to a study done by the Responsible Investment Association it will inherit close to 30 trillion dollars in the next few decades. These financial resources will likely be invested in a socially responsible way, given that, as noted by Schroders, 86% of millennials consider sustainability to be an important factor to take into account not only as consumers but also as investors.

This explains why all the world’s main investment companies are preparing to meet this generation’s expectations, priorities and values, which are radically different from those of previous generations. Millennials in fact grew up in a historical period marked by deep technological and social change. The spread of internet and smartphones has changed the way in which they communicate and retrieve information, to the point that sociologists have defined them as the first ‘digital natives’. Globalisation has allowed them to travel, coming into contact with other cultures to a much greater extent than their parents’ generation. Furthermore, they are more sensitive to the issue of climate change and have a greater awareness of the consequences of mankind’s actions on the environment. They appeared on the job market after the 2008 crisis and have borne its effects in terms of precariousness and the difficulties involved in finding a stable job, in spite of their high degree of education. Just like the generation that entered adult life after the 1929 crisis, millennials show aversion towards risk and are not inclined to trust financial institutions: 82% of them have stated that their choices are influenced by the crisis, a figure much higher than the 13% declared by other generations, while 67% of them avoid investing in shares.

Empirical evidence, moreover, seems to support this sort of feeling: sustainable funds obtain a return that is equal to or higher than traditional ones, while maintaining an identical or lesser instability. Furthermore, any attention given to ESG issues improves a portfolio’s risk profile, in both a reputational and an operative sense. In recent years, for example, this aspect prevented a number of sustainable funds from investing in companies that were later caught up in serious environmental scandals and were forced to pay heavy fines. Generally speaking, if a company is properly governed and proactively manages its exposition to ESG issues, it is more likely to record positive results over the long term.

The Hera Group, which has always placed ESG at the centre of its own strategy in a multi-stakeholder perspective, has in recent years become a leading figure in many initiatives that have attracted investors’ interest, in particular those belonging to the SRI community. Hera, for example, was the first Italian company to issue a Green Bond, in 2014, while in 2017 it endorsed the Global Compact, the United Nations foundation that aims at meeting the 17 goals on the UN 2030 agenda. In the same year, Hera also became part of the CE100, a program whose participants include the world’s 100 companies most committed to circular economy projects. The first to do so in Italy, Hera specifies, as of its 2016 Sustainability Report, its Shared Value, i.e. the EBITDA generated by the portion of its business that contributes to reaching the global objectives set by the United Nations. The Group’s strategy has fully absorbed this new school of thought, which takes concrete shape in the new business plan to 2021 through the development of projects that sustain growth in this indicator. By the end of the period contemplated by the plan, 40% of Group EBITDA is expected to involve Shared Value, compared to the 30% seen in 2016.

Investor Relations (IR) activities have also evolved in recent years, owing to the growing interest shown by investors towards the issue of sustainability. Today, the IR team must be prepared to answer questions involving not only finance, but sustainability as well. The main difficulty facing workers in this sector is that, while economic and financial parameters are standardised and can thus easily be compared, universal measures used to evaluate a company’s sustainability do not exist. This is why, ever more often, they trust the appraisals offered by advisors specialised in evaluating ESG indicators. The upshot is that a company with excellent financial bases, but a low sustainability rating, might not prove able to attract investments from an SRI fund manager. And so, among IR activities, supporting advisors in gathering data and in the evaluation process is becoming increasingly important. Excellent results were obtained during 2017 in this sense: for example, the scores given to Hera by ISS and MSCI, two important ESG parameter evaluators, significantly improved thanks to the IR team’s proactive efforts, coordinated with the CSR and the Legal and Corporate Affairs departments. The important ranking reached in the Thomson Reuters’ Diversity & Inclusion Index as well, in which Hera came in first in Italy and fourteenth worldwide, owes much to the effective communication and support given to evaluators to appreciate the best practices deployed by the Group.

Continued improvement under all these aspects is a strategic goal for IR, to make investments in Hera stock increasingly attractive for investors and aligned with the values of new generations.

Close and back to the site

The holistic vision of financial levers

A few statements by Daniela Pulvirenti, head of financial risk monitoring and management, and Luca Moroni, Hera Group CFO

Growing competitive pressure, the macroeconomic crisis, instability on financial markets and the dynamics of the credit crunch all mean that in today’s interconnected world the whole is much greater than the sum of its single parts. Our holistic and systemic vision leads us to believe that a management model uniting all actors involved is required to create economic value, following an approach based on transversal cooperation: from active credit management to a prudent management of financing sources, through an efficient fiscal management aimed at rapidly grasping all opportunities, in order to maximise cash flows.

The creation of financial value, directly related to the real economy, and a long-term conservation of capital are the objectives underlying our decisions.

Our ability to reconcile a prudent approach to financial risk and our innovative and creative spirit has allowed us to transform negative events into opportunities and consolidate the trust given to us by the market, analysts and ratings agencies.

We may thus state that the Group is characterised by a model that brings together vision, ethics and pragmatism, in order to significantly and solidly maximise the creation of financial value.

Close and back to the site


Cecilia Natali, Hera area manager and responsible for relations with local bodies, tells us a bit more about the topic.

In order to meet the needs and expectations of those citizens with a greater awareness, Hera intends to contribute towards creating an increasingly sustainable and smart city, which guarantees them a residence that is healthy, natural and accessible to all. Thanks to a collaboration between Hera and local public authorities, the first city-workshop to offer innovative, sustainable, facilitated and smart services will be Castel Bolognese (in the province of Ravenna), a town with roughly 10,000 inhabitants.

The new services implemented in the city will make it ever more:

  • Smart: by introducing new technologies that will provide the city with its backbone, in particular
    • an operations centre, while will be the system’s brain
    • a network of urban sensors capable of reading environmental conditions
    • an IT platform, to elaborate the data coming from urban sensors and databases.
  • Sustainable: implementing
    • A transition in energy, moving towards sustainable and efficient forms of energy
    • A circular economy, which calls for raw materials to be produced from sorted and processed waste
    • A «circular» water cycle, towards an improved recovery of water and decreased leakage.
  • Healthy: thanks to projects that call for
    • a greener city, able to better handle the pressure caused by climate change and increase citizens’ wellbeing
    • better air quality, increasingly sustainable transportation and more clean energy
    • health promotion 4.0, thanks to the chance of intervening against the causes (mainly pollution) that can trigger various illnesses.

To succeed in implementing such a wide-ranging and innovative project, commitment and an active contribution coming from all individuals involved is necessary, turning them into proactive subjects within a mutual collaboration. In this particular case, a fundamental role was played by the local public administration, which is both young and dynamic and has fully grasped the objective. The project’s goals are in fact also to be understood as a political challenge, to pursue the local community’s wellbeing through innovative tools coming from the world of Information Technology. Beginning with an analysis of those sectors having the highest impact on people’s daily lives, such as transportation, the environment, energy and safety, the administration’s active collaboration in fact allowed “tailor-made” indications to be set out, aimed at defining strategies and concrete actions to be implemented locally and laying the foundations for the project’ future developments.

Close and back to the site

The importance of people

Hera’s policies in showing attention towards the people who work at the company are described by Alessandro Camilleri, Manager of development, training and organisation.

The Hera Group has been a certified Top Employer for 9 consecutive years and is the only Italian company included within the 2018 top ten. This prestigious recognition results from the Group’s strategy and its constant commitment towards valorising the human capital whose formation the company has always encouraged, since it was established.

The conditions required to reach these avant-garde results in Human Resources are necessarily linked to an ability to comprehend the company’s internal and external context. For this reason as well, HerAcademy was created in 2011, the corporate university promoted by the Hera Group, a leading figure in the local utilities sector in Italy. Through a systematic set of relations with stakeholders in the education system, for a number of years HerAcademy has been developing applied studies on significant issues concerning change over the medium to long term. This area of research has seen, for example, a collaboration with the Harvard Business Review bearing on the Macrotrends project, the study “Smart Development in Smart Communities” published by Routledge – Taylor&Francis, and many other initiatives.

The structure of the relations developed between HerAcademy and the education system are part of a larger framework of private/public partnership programs designed to provide concrete answers to issues in job transformation and correlated mismatches in skills. In order to concretely deal with digital transformation, the relation between humans and machines and the reconsideration of work in the future, a systemic approach is necessary, involving joint actions carried out by companies, schools and students. This is precisely the direction in which our efforts are directed, intending to contribute to the goals of the European Pact for Youth, considering among other things the fact that Hera is one of its signatories, as is the European Commission through Marianne Thyssen (Commissioner for Employment and Social Affairs), Tibor Navracsics (Commissioner for Education, Culture and Youth), Elisabieta Bieskowska (Commissioner for Internal Market, Industry, SMEs) and Guenter Oettinger (Commissioner for Economics and Digital Society). In this area, the Hera Group’s program for combining school and work has been recognised among the models of success based on working experience, the fruit of a positive integration between school and the world of business.

This attention towards future generations is united to a constant commitment to creating the best conditions in which each person can express their own talent within the company. This is the perspective from which Hextra, the Group’s company welfare program, has been defined. Its distinctive features lie in the high amount of listening and participation given to employees, in order to define the cluster of initiatives later to be offered. Furthermore, the program is marked by its ability to bring a uniform portfolio of services offered together with wide room for personalising individual choices. A deep conviction that wellbeing, satisfaction and productivity are intrinsically correlated lies at the root of Hextra’s activities in communication and involvement, for which it was given a prestigious award as best practice in Italy, assigned in 2017 by the German Quality and Finance Institute.

Continuous learning, self-development and leadership are the basis of all Group investments oriented towards the growth of the people who work in the company. To pursue these objectives, the professional family of human resources has provided itself with a precise value proposition, able to give shape to the creation of value through an integration of the system and the individual: “We work on a daily basis to develop an agile learning organisation (one that is able to learn, and rapidly turn this learning into action), in which people are the protagonists of their own growth and cooperate in searching for shared value. HR processes valorise current best practices and strive for innovation through a dynamic and circular approach, within their own ecosystem”.

Results as of 31 December 2017: interactive charts

Director's report

Annual report

Tomaso Tommasi di Vignano
Chairman of the Board of Directors

The figures seen in the 2017 financial report, provided here in HTML for a more timely and transparent multi-stakeholder presentation, further enriched by responsive and interactive tools, show once again the growth pursued by Hera since its establishment.

While we were seizing the opportunities that opened up to us, merging 25 acquired companies, over these 15 years we did not only expand in terms of size: during this lapse of time we have also become more efficient and productive, as is proven by EBITDA per employee, an indicator that has almost tripled, having grown from 41 mn€ in 2002 to 113 mn€ in 2017.

Our characteristic financial flexibility, brought together with a healthy generation of cash flow, furthermore allows us to look towards new investment options and lend full credibility to the strategy presented in the latest Business Plan.

In light of these results, the BoD will put to the Shareholders Meeting the payment of a dividend set at 9.5 cents/share, up 5.5% compared to the one paid in 2016 and in line with the policy communicated last January, aimed at an ever-increasing creation of value for Group shareholders.

Stefano Venier

Last year’s results, which are the outcome of a coherent development strategy that constantly respects the Business Plan, show the effectiveness of a business model marked by innovation, agility and excellence and that, applied to all areas in which the Group operates, led to a 7.4% growth in EBITDA.

2017, moreover, yielded significant figures regarding sustainability: a 3.6% reduction in energy consumption compared to 2013, an increase in purchasing and producing renewable energy, with a 16% decrease in the carbon footprint compared to 2015, lesser usage of landfills for urban waste disposal (7%, vs. the 2016 Italian average of 28%), the production of roughly 103,000 tonnes of “circular” plastic, i.e. created out of recycled materials and then treated in Aliplast’s plants, the increasing use of our Acquologo and Rifiutologo apps, the launch of MyHera in 2017 to implement an even higher level of digital communication with our customers, 18.9% of whom had signed up to online services by the end of 2017, with 20.2% requesting the option of e-billing.

These figures prove the validity of the projects and investments introduced to pursue Shared Value, which accounted for 329 mn€, over a third of overall Group EBITDA for the year, a number destined to rise over the period of time covered by the plan, reaching 40% in 2021.

Stefano Venier