Press releases

2017-01-11 870_Aliplast.1484218019.jpg The company based in Ospedaletto di Istrana (Treviso), a national centre of excellence in plastic recycling, joins the Hera Group, which thus confirms its position as one of the main players in Italy in recycling and the development of the circular economy. The company based in Ospedaletto di Istrana (Treviso), a national centre of excellence in plastic recycling, joins the Hera Group, which thus confirms its position as one of the main players in Italy in recycling and the development of the circular economy. Herambiente, a Hera Group company and national leader in waste treatment and recovery, signed a binding agreement with Aligroup S.r.l. for the acquisition of the Aliplast Group, a national leader in the segment of plastic waste collection, recycling and regeneration, with an integrated process that transforms waste into products available for reuse. This transaction regards the acquisition of Aliplast shares through a process entailing the acquisition of 40% in the course of the current year, an additional 40% by the end of March 2018 and the remaining 20% by the end of June 2022. The transaction's enterprise value amounts to roughly Euro 100 million and implies an EV/Ebitda multiple of around 6.5x, with no dilutive effects for Hera shareholders. The price also includes an additional component in favour of Aligroup S.r.l. in the form of an earn-out when specific incremental Ebitda level results are achieved. The performance of the agreement is subject to the conditions typically applied in analogous transactions and in particular obtaining the authorisation or consent to the acquisition from the Italian Antitrust Authority. The Aliplast Group, which processes more than 80,000 tonnes of plastic materials every year, is expected to achieve turnover exceeding Euro 100 million and EBITDA of more than Euro 15 million in 2016. This important transaction represents a further step in the process initiated some time ago for the transition from disposal towards recycling and recovery, with a view to optimising resource usage. It is part of the ongoing process of expanding the corporate scope launched by the Hera Group several years ago and is in line with the geographical expansion and integration strategy. With this transaction, which is complementary to those completed in 2015 regarding Waste Recycling (Tuscany) and the environmental assets of Geo Nova (Treviso), Herambiente is further expanding its portfolio of industrial customers. At the same time, it has enriched its commercial offering with a unique, distinctive element capable of accelerating and facilitating the achievement of the 2020 sustainability objectives. Therefore, Herambiente has established itself as a reliable partner with expertise in the management of all industrial waste, capable of proposing efficient solutions with a complete set of services and processes aimed at creating value. Founded by Roberto Alibardi in 1982, Aliplast is a national centre of excellence, and today is the leader in the collection and recycling of plastic industrial waste and the production of regenerated polymers. It was the first company in Italy to achieve full integration throughout the entire plastic life cycle: from waste management services and the collection of industrial scrap to the production and sale in the market of goods and packaging materials manufactured from plastic recycled in house. It has more than 300 employees working in five plants in Italy and three abroad (Spain, France and Poland). Its head office is located in Ospedaletto di Istrana (Treviso). Its main customers include the largest Italian food & beverage, home furnishings and ceramics brands. For this transaction, the Hera Group engaged Studio Grimaldi for legal aspects and Lazard for financial aspects, while the Aligroup Group received support from Special Affairs, through partner Domenico Greco, acting as business and financial advisor for the transaction, and Allen&Overy for legal matters. "Aside from further strengthening the Group's scope, this transaction joins the many other initiatives that Hera is implementing to promote the circular economy", noted Tomaso Tommasi di Vignano, Executive Chairman of the Hera Group. "We have already reached some of the important strategic objectives for 2025 and 2030 established by the European Union and, as we intend to continue on this path, we believe it is important to integrate businesses capable of achieving levels of efficiency and excellence that can meet the challenges that lie ahead of us. Aliplast meets these requirements perfectly, and we are certain that it will be able to make its own original contribution, also and especially in terms of the drive towards innovation". "Aliplast has developed over the years thanks to the quality and competitiveness of its products, and I believe that its integration with a waste management services leader such as the Hera Group can provide additional benefits for our customers as well", explained Roberto Alibardi, Director and principal shareholder of Aliplast. "We have shared the Business Plan with the new shareholder and we have the same outlook regarding strategic development policies, so it was natural for us to remain in the company as a manager in the coming years". Herambiente acquires Aliplast Herambiente acquires Aliplast 01_20170111_ENG_comunicato_acquisizione_Aliplast_final.1484306851.pdf 2017-01-13 14:08:28

2017-01-11 870_Aliplast.1501171634.jpg The Ospedaletto di Istrana (Treviso) company, a national leader in plastic recycling, becomes part of the Hera Group, which thus confirms itself as one of Italy's foremost protagonists in recycling and in the development of a circular economy. Herambiente purchases Aliplast http://ha.gruppohera.it/ Herambiente Herambiente, a Hera Group company and national leader in waste treatment and recovery, has signed a binding agreement with Aligroup S.r.l. to purchase the Aliplast Group, a widely recognised protagonist in Italy in the sector of collecting and recycling plastic waste, whose subsequent regeneration is part of an integrated process that transforms waste into products available for reuse. The operation regards the acquisition of Aliplast shares, following a path that calls for 40% to be purchased within the current fiscal year, a further 40% within March 2018 and the remaining 20% within June 2022. The operation's enterprise value amounts to roughly € 100 million and implies an EV/EBITDA multiple of approximately 6.5, with no dilution for Hera shareholders. The price furthermore provides for an additional component going to Aligroup S.r.l., defined as an earn-out provided upon reaching specific incremental results in EBITDA. The agreement's implementation is subject to the usual conditions for similar operations, in particular theItalian Antitrust Authority's authorisation or non-prohibition of the purchase. For the Aliplast Group, which processes over 80,000 tonnes of plastic material per year, a turnover of over € 100 million and an EBITDA of over € 15 million are expected for 2016. This important operation further accentuates the shift, which has been underway for some time, from disposal to recycling and recovery, with a view to optimising resource usage. It is part of the Hera Group's ongoing efforts to broaden the boundaries within which it operates, a goal which has been pursued for years and is in line with its strategy of geographical expansion and integration. With this operation, complementary to the ones involving Waste Recycling (Tuscany) and the environmental assets of Geo Nova (Treviso) carried out in late 2015, Herambiente will further expand its industrial client portfolio. At the same time, it will enrich its own commercial offer with a distinctive, even unique factor which is able to accelerate and facilitate the achievement of sustainability goals in 2020. Herambiente has thus established itself as a trustworthy partner, provided with expertise in managing all forms of industrial waste and able to offer efficient solutions with a complete set of services and processes aimed at creating value. Established in 1982 by Roberto Alibardi, Aliplast is a national centre of excellence, a market leader in collecting plastic industrial waste and recycling and producing regenerated polymers. It was the first enterprise in Italy to fully integrate the entire life cycle of plastic, from environmental services in managing and collecting industrial residues to production and market sales of manufactured goods and packaging materials, produced with plastic recycled by the company itself. Over 300 employees work in five plants in Italy and three abroad (Spain, France and Poland). The company headquarters is located in Ospedaletto di Istrana (Treviso). Its main clients include the most important Italian brands dealing with food & beverages, home furnishings and ceramics. For this operation, the Hera Group turned to the legal services of Studio Grimaldi and the financial services of Lazard, while the Aligroup Group was supported bySpecial Affairs, through its partner Domenico Greco, acting as industrial and financial advisor for the operation, andAllen&Overy for the operation's legal aspects. "In addition to further consolidating the Group's perimeter, this operation finds its place alongside the many initiatives implemented by Hera in promoting a circular economy", states Tomaso Tommasi di Vignano, Chairman of the Hera Group. "We have already reached some of the significant strategic objectives set by the European Union for 2025-2030, and our desire to continue along this path leads us to believe in the importance of integrating enterprises that have achieved levels of efficiency and excellence that enable us to meet the challenges that await us. Aliplast perfectly fulfils these requisites and we are certain that it will be able to offer an original contribution of its own, oriented above all towards innovation." "Aliplast has developed over the years thanks to the quality and competitiveness of its products, and I believe that becoming part of a leading protagonist in environmental services such as the Hera Group will bring further benefits to our clients as well", explains Roberto Alibardi, Administrator and principal shareholder of Aliplast. "We have now shared a Business plan with our new associate, and our respective outlooks on strategic development are perfectly in line with one another, making it only natural for us to remain within the enterprise, acting as manager in the upcoming years." press_release.1484130340.pdf 2016-04-05 14:08:00 Herambiente purchases Aliplast

2017-01-11 slider_870x320_pi.1484127295.jpg Solidly based on data from the 2016 forecast, the new Plan confirms the Group's track record of growth and responds to the most recent changes in the utility sector. Efficiency and innovative solutions fuelling organic growth to be pursued alongside opportunities for development through M&As. /documents/1514726/4210761/press_release_business_plan_2020.1484132258.pdf/09f9670d-d9eb-1914-9fce-c6096734d6f7?t=1597911202412 /documents/1514726/4210761/Hera_Newsletter_PI_2016_20_eng.1484131469.pdf/39bab324-7519-dfd6-a8c6-03d239a212fe?t=1597911202904 /documents/1514726/4210761/Analyst_Presentation_Business_Plan_2016_20.1484137188.pdf/997bb4c9-4305-6b11-1494-b9ba1f74efc8?t=1597911203992 null Press release Newsletter: business plan to 2020 Analyst presentation: business plan to 2020 null Operating and financial highlights 2020 EBITDA: € 1,080 million Capital expenditures and financial investments: almost € 2.5 billion Net financial position/EBITDA ratio to improve, reaching 2.8 by 2020 Net profits per share to grow by roughly 5% annually over the duration of the Plan Dividends expected to increase, as of 2017, reaching 10 cents per share in 2020 (+11%) Operating highlights 5 strategic priorities: growth, efficiency, excellence, innovation and agility Group development based on a balanced mix of organic growth and M&As Current grants confirmed in tenders for gas distribution and urban hygiene Objective for 2020 energy customers set at 2.4 million Growth in line with sector trends: Circular Economy and Shared Value, Customer Experience, Industry 4.0 Forecast indicating over € 905 million in EBITDA at year-end 2016, and a plan designed for growth This morning the Hera Group's Board of Directors, who met to approve the Business plan to 2020, also examined the 2016 forecast, which consolidate a year-end EBITDA of over € 905 million (compared to the € 884 million recorded at 31 December 2015), higher than analysts' consensus and entirely compensating for the negative effects ensuing from the reduction in regulated returns (WACC) and the expiry of incentives on renewables. On the solid basis of these excellent results, the Plan approved today, in line with the previous strategic document, confirms the path of growth pursued by the Group in recent years. Hinged on organic growth and M&A, it is aimed at consolidating the competitive advantages accumulated over the years and seizing the new potential market opportunities. Operational objectives increase, financial asset indicators improve From an operational-financial standpoint, the Plan foresees a 2020 EBITDA amounting to € 1,080 million, with a net increase of roughly € 200 million compared to the € 884 million recorded at the end of 2015. A well-distributed, balanced growth of the activity portfolio is also expected, maintaining a low risk profile. As always, the Plan's financial sustainability will be guaranteed: in spite of an over one billion euro increase in invested capital (caused among other things by almost 2.5 billion in Capex over 2016-2020), the net financial position to EBITDA ratio at 2020 will see further improvement, dropping to 2.8, compared to the 3 seen in 2015. In addition to enhanced financial management, with an average cost of debt expected to decrease from 3.7% to 3.5% and an average length of eight years, benefits are expected to be derived from fiscal management and the recent stability law, with its decreased corporate income tax. Another of the Plan's objectives is to maintain the credit ratings assigned to Hera by Standard&Poor's and Moody's, which at present are already among the best in the sector and throughout Italy. The initiatives foreseen by the Group are founded on its consolidated cornerstones of efficiency, excellence, growth and innovation, but will also turn to the new strategic tool of agility, now held to be indispensable in order to react incisively within the increasingly dynamic and challenging context faced by utility companies. The Plan to 2020 has furthermore been elaborated so as to respond in the best possible way to industrial trends emerging from rationales such as Circular Economy and Shared Value, with respect to which the Hera Group has offered a tangible contribution to reaching 10 of the 17 objectives of the UN Agenda. Other key elements include the new needs of clientele, to be met with new solutions, and the most recent changes involving Industry 4.0 and processes of digitalisation, data gathering and analysis and diffusion in our cities of "intelligent" infrastructures. In a sector undergoing profound transformations, it will become indispensable for the Group to count on its own solidity and efficiency in order to remain astride these trends and continue to reinforce its own leadership. An increasingly dynamic context The context in which utility companies find themselves operating involves markets that evolve rapidly, or are in any case marked by significant novelties on more than one front. As regards regulations, the current framework offers greater opportunities in terms of development and stability compared to the past, but also requires operators in the sector to sustain higher investments (e.g. electronic gas and electricity meters, gas tenders, service quality), in order to anticipate and remain in line with the aforementioned trends regarding changes in the sector. The macroeconomic context, while not yet reaching its expected performance in terms of growth, now shows encouraging signs, above all in the main geographic areas served by the Group: Emilia Romagna and Veneto stood out in 2016 for their growth in GDP, above the national average. Competitive pressure among utility companies will become stronger, not only in "free market" activities but also in most of the other activities in the Group's portfolio, given the many public tenders that will be announced over the duration of the Plan to assign services in Gas Distribution, Urban Hygiene, Public Lighting and the safeguarded/administrated clientele in the sector of energy sales. The increase in competition, along with the impetus created by the reform of Public Administration andLocal Public Services, lastly, will be able to create the conditions for a progressive consolidation of the sector, overcoming the system's shortcomings as regards overall efficiency and industrialisation. Roughly € 200 million of growth in EBITDA, thanks to efficiency and external growth, with dividends progressively increasing The Group's business model has been confirmed, with the objective of a 2020 EBITDA equal to € 1,080 million, i.e. € 50 million higher than the 2019 target included in the previous Plan, with significant growth coming in 2017-2018. The increase in EBITDA over the duration of the Plan amounts to almost € 200 million compared to 2015, obtained thanks to a balanced contribution coming from internal and external growth. The strong attention given to creating efficiencies and synergies will be the preponderant factor fuelling the Group's organic growth between 2015 and 2020. Over 20 million synergies are expected to come from the most recent changes in the Group's scope of operation, with efficiency-boosting interventions reaching over 80 million, distributed among all the sectors in which the Group operates in addition to its "corporate" activities. Efficiency will also be pursued by introducing innovative technologies: from using data gathered on the field to optimise activities such as collection and sweeping, to searching for leakage in water networks with advanced satellite monitoring systems. Further stimulus towards growth will come in 2017-2018 from safeguarded electricity and default gas services and, following this, from gas tenders, with an expected EBITDA of € 27 million, were the Group to be confirmed as manager for its reference territories. Thanks to these results, Hera will be able to absorb and more than compensate for the negative effects (reaching over € 50 million) tied to the recent reduction in incentives for renewable energy production and the rate of return on invested capital in regulated businesses (WACC). Net of these non-recurring effects, an even more significant organic growth would have been witnessed. As regards development through acquisitions, the average annual contribution coming from M&As called for in the Plan is in line with the past. Regarding mergers with multi-utility businesses, faced with a potential customer pool largely defined by a rationale based on geographical proximity, the Hera Group will be able to count on its role as a centre of aggregation within the region in question, a role it has reinforced with the many M&A operations carried out in its first fifteen years of activity. In liberalised sectors as well, as of early 2017 the Group intends to continue seizing acquisition opportunities involving mono-business companies, as it already had in 2016 in the waste and energy sectors. Lastly, the Group's high degree of attention towards creating value for shareholders has also been confirmed, with a gradual improvement over the duration of the Plan in financial return on invested capital (ROI) and on equity (ROE), profits per share expected to grow by an annual average of roughly 5%, and transparent dividend policies increasing with respect to the Group's historical trend. As of 2017, in fact, dividends per share are expected to rise to 9.5 cents and, as of 2019, to 10 cents (+11%). Investments totalling almost 2.5 billion in five years The Plan is sustained by highly significant investments, coming to roughly € 2.5 billion (€ 250 million more than in the previous strategic document), which will help fuel growth over the five-year period, but also initiate the transformation of the Group's activities towards new industrial paradigms such as Circular Economy and Industry 4.0. Networks will receive approximately 70% of 2016-2020 investments, including roughly € 350 million dedicated to gas tenders and other important infrastructure modernisation interventions such as replacing meters with electronic devices or completing the Rimini seawater protection plan and the Servola purifier. The investment program will continue to be sustainable from a financial point of view, thanks to a positive and growing cash flow, sufficient to cover both the investments themselves and dividend payments, in addition to allowing financial solidity to improve and remain sufficiently flexible to sustain other mono-business acquisitions not included within the Business plan. Networks: smart infrastructures underlying the Industry 4.0 model The greatest growth in terms of industry is expected from networks: EBITDA resulting from gas and electricity distribution, water cycle and district heating services will go from € 428 million in 2015 to € 533 million in 2020, when it will represent almost half of the Group's overall earnings. Growth in the entire area will be based on achieving operational efficiencies and synergies and on the recognition reserved to operators able to provide excellent services in the water cycle, but also on optimising existing assets in district heating. By gradually digitalising network infrastructures and applying state-of-the-art technologies (smart metering, IoT, network modelling, use of drones, etc.), the Group will reach new levels of excellence, which will lead to reducing operating costs, optimising resources and improving service quality. The date at which gas tenders will be assigned is also approaching, and the Group aims at confirming its presence in the areas already served, for an overall increase of its gas network corresponding to roughly 290,000 delivery points, matched by a higher value of the distribution networks managed (RAB). Over the duration of the Plan, almost € 1.7 billion in investments will be allocated to networks. Waste: development increasingly based on recovery By 2020 the waste cycle will account for 27% of the earnings generated by the Group, with EBITDA expected to grow from € 230 million in 2015 to € 289 million in 2020. The Group's attention towards issues involved in Circular Economy has been confirmed: even though, with 9% of urban waste destined to landfills in 2015, Hera had already reached the objective set by the European Union for 2030, the Group expects to drop as low as 6% by 2020. Similarly, the Plan foresees that 75% of packaging will be recycled by 2020, anticipating the deadlines set by the EU by ten years. One important challenge in the area of collection services lies in public tenders for assigning urban hygiene services in Emilia Romagna. The Group aims at confirming its presence in the areas already served, thanks among other things to the important innovative projects already introduced to increase service efficiency and thus allow the costs incurred by customers to be contained, with an increased target for sorted waste, set for 2020 at an average of roughly 66% across the areas served by the Group. Existing plants for waste disposal, treatment and recovery will be developed so as to respond to the increase in sorted waste and further development of recycling. Thanks to its overall plant structure, indeed, the Group has stood out for years as the reference figure for this market, able to offer all-inclusive services even to its most demanding customers. Commercial activity development through to 2020 will furthermore be able to count on the relations already established with recently acquired companies, with synergies coming from a few customer segments not previously served by the Group. In the same direction, new initiatives in waste treatment and recovery have been included, such as the S. Agata Bolognese plant, one of the first in Italy to produce biomethane. Investments dedicated to waste services will amount to € 546 million. Energy: the currently solid customer base to be reinforced by attention towards Customer Experience The energy area will increase its earnings from € 205 million in 2015 to € 226 million in 2020, as a result of commercial strategies, an energy context expected to recover slightly in upcoming years and the growing interest shown by household, industrial and public customers towards the energy services and energy efficiency offers that the Group is now able to propose. Hera's care towards energy savings has moreover driven the Group itself to set a series of objectives, including reduced consumption within corporate structures aimed at reducing its own consumption by 5% within 2020. Already today, Hera can rely on the almost 2.2 million energy customers it has built up over time. The initiatives set into place in upcoming years will increase this number to roughly 2.4 million, with a growth target in line with the rate of expansion seen in the past (about 50,000 customers per year), and will furthermore be accompanied by contracts involving opportunities for acquisitions. In the two-year period 2017-2018, these results will also be sustained by the tenders recently awarded to the Group for safeguarded customers in electricity and default gas, two areas in which Hera was recognised as the leader, producing an important operative contribution also regarding cash flow. Hera's clientele has demonstrated its satisfaction over the years, with significantly lower abandonment rates compared to national competitors. And yet, customer requests are rapidly changing thanks to digitisation and currently ongoing technological revolutions, something the Group has fully born in mind while developing its own Plan. Customers will be ever more attentive to the possibility of obtaining information from a wide range of supports (smartphone, PC, etc.) or receiving services and offers increasingly designed to meet their own specific needs: Hera will be able to fully meet these requests thanks to its growing attention towards each customer's experience and the introduction of innovative technologies supporting the changes introduced in its own CRM system. Tomaso Tommasi di Vignano, Hera Chairman "Our recently approved Plan confirms a steady path of growth, sustained by traditional tools geared towards enhanced efficiency and growth by acquisitions, all reinforced by the use of new technologies. Improvements in our financial solidity will allow us on the one hand to confirm and further improve the dividend policy pursued in recent years, and on the other to consider the deep transformations currently seen in the sector as a further opportunity for development, potentially involving M&As, as has been the case in the past." Stefano Venier, Hera CEO "Innovation, sustainability and energy efficiency are only a few of the issues addressed by our Business Plan, which is intent on making the most of new trends such as Industry 4.0, Circular Economy and Customer Experience. Our leadership in the main reference markets has been confirmed, sustained by the competitive advantages that we have built up over the years, making us fully prepared to take on ever-changing challenges. This Plan as well has been elaborated in full respect of the financial balance that has defined us until present, with the aim of reinforcing on the one hand our credit standing while maintaining a low risk profile, and on the other continuing to create value for all our stakeholders, guaranteeing the financial flexibility best suited for further developments." 2017-01-09 14:07:49 Il Gruppo Hera approva il Piano industriale al 2020

2016-11-25 approvvigionamento_elettrico.1501233137.png Around 500 million Euros in estimated annual turnover, with resultant positive effects in terms of operating profit. The Hera Group company will manage this service in the 2017-2018 two-year period for approximately 45,000 supply points, supplying a total of over 2 TWh of energy per year From 1 January 2017 until 31 December 2018, the Hera Group's sales company Hera Comm will manage electricity services for safeguarded customers in eleven regions: Emilia-Romagna, Veneto, Friuli-Venezia Giulia, Tuscany, the Marche, Umbria, Sardinia, Campania, Abruzzo, Calabria and Sicily, which correspond to six contract areas in the national Single Buyer competitive contracting process. This service covers approximately 45,000 supply points for safeguarded customers in the regulated market, for approximately 2.2 TWh of total energy. The annual turnover deriving from the management of this service is estimated at approximately 500 million Euros, which is over 50 million more than the previous period and will result in a significant improvement in the performance of the Hera Group in electricity sales both in terms of EBITDA (which amounted to 65 million Euros in 2015) and operating profit. The service of supplying electricity to safeguarded customers, which Hera has managed since 2009, involves public administrations and specific businesses with more than 50 employees or more than 10 million Euros of turnover or companies that utilize medium voltage and have not chosen a provider on the unregulated market or are temporarily without a provider. Hera Comm was chosen to provide electricity to safeguarded customers in these 11 regions due to its economically advantageous offer. This is an important achievement that joins others such as Hera's recently being awarded the natural gas default service for end customers for the October 1, 2016 - September 30, 2018 period in the same number of regions (Emilia-Romagna, Veneto, Friuli-Venezia Giulia, Trentino-Alto Adige, Tuscany, the Marche, Umbria, Valle d'Aosta, Piedmont, Liguria and Lombardy). In this way the Hera Group confirms its leading place among energy providers on the Italian stage, with over 2.1 million energy customers served, a fifth-place position among electricity providers at the national level (with over 9.6 TWh of electricity sold in 2015 ) and a fourth-place position in natural gas sales (with approximately 3.4 billion cubic meters of gas sold). As Stefano Venier, CEO of the Hera Group, has stated: "We are proud to have won this competitive bidding process, as we won the default gas one, because it represents an important step forward in terms of developing our commercial services. The experience we have gained in this sector over the past seven years will allow us to offer businesses and PA our professionalism and expertise in the management of a major market share of energy customers throughout Italy." _press_release.1480324424.pdf 2016-10-06 07:15:00 Hera Comm si aggiudica la gara per l'approvvigionamento elettrico in regime di salvaguardia in 11 regioni

2016-11-09 Financial results as at 30 September 2016 Financial results as at 30 September show improvement in key economic and financial indicators and a further reduction of debt. 9M2015 /documents/1514726/4210752/Gruppo_Hera_press_release_3q2016_eng.1478689798.pdf/9eb7d52c-488f-8a9a-59c5-936685e320cb?t=1597910524990 /documents/1514726/4210752/Hera_Group_Consolidate_quarterly_report_as_at_30_09_2016.1478687674.pdf/f56d788a-4921-6417-8532-9916164c91cf?t=1597910528451 /documents/1514726/4210752/9M_ANALYST_presentation.1478694304.pdf/8d55528b-fbb3-1e48-7431-f3a78f8a85e7?t=1597910527532 /documents/1514726/4210752/Gruppo_Hera_newsletter_3q2016_eng.1478690384.pdf/28d7b1fb-7496-1f0b-3d0b-ca438197e401?t=1597910526874 /documents/1514726/4880888/GruppoHera+9m2016+results+eng.1483550624.mp3/737f1dce-21c1-014e-c3ee-956bfec2835a?t=1610038186161 /documents/1514726/4210752/Dati_finanziari_ed_operativi_di_sintesi_9M_2016_eng.1478604446.xls/fc469d22-ddff-104d-3899-c17eeab3cb44?t=1597910526341 Press release Financial report as at 30 September 2016 Analyst presentation: Results as at 30 September 2016 Newsletter: Results as at 30 September 2016 Audioconference: Results as at 30 September 2016 Financial data: Results as at 30 September 2016 Financial highlights Revenues at € 3,104.8 million (-4.4%) EBITDA at € 650.6 million (+1.6%) Net profits for shareholders at € 142.2 million (+13.8%) Net financial position improves, reaching € 2,567.0 million Operating highlights Revenues reflect the fall in energy commodities and the impact of normative and regulatory factors, in particular the rate of return on invested capital (WACC) Benefits derived from recent acquisitions in sectors involving free market activities Healthy contributions to growth come from the electricity area and, in the third quarter, from the waste management area Today, the Hera Group’s Board of Directors unanimously approved the company’s consolidated financial results at 30 September 2016, with positive figures in key indicators and growth through to net profits, in line with the results forecast in the business plan. Financial and fiscal management, in particular, contributed to supporting growth in results by allowing increased investments to appear alongside a further reduction in debt, while entirely financing M&As and the payment of annual dividends. Note that the Hera Group has voluntarily decided to publish its interim financial statements, as in the past, taking into account the high value it gives to communicating with the market. Revenues at € 3,104.8 million In the third quarter of 2016, revenues amounted to € 3,104.8 million, dropping compared to the € 3,246.4 million seen at 30 September 2015. The reasons for this decrease include lower revenues in regulated services caused by recent regulatory changes, lower revenues from electricity, gas sales and trading. The drop was however partially compensated by both higher volumes of gas sold and revenues in the waste management area, above all in the third quarter. EBITDA increases, reaching € 650.6 million Group EBITDA at 30 September 2016 grew from € 640.2 to € 650.6 million (+1.6%), thanks in particular to the contribution of the electricity business. This result is particularly significant considering that in the first nine months of 2016 the overall outcome of lower revenues in gas, electricity and water distribution amounted to € 25.6 million (respectively: 14.9 in water, 8.5 in gas and 2.2 in electricity), following reductions in the rate of return on invested capital in regulated sectors and inflation. EBIT and pre-tax profits rise EBIT increased to € 329.2 million (+3.8%), while pre-tax profits rose to € 239.1 million (+9.5% compared to the € 218.4 seen at 30 September 2015), thanks among other things to improvements in financial management. At 30 September 2016 the results of financial management in fact came to € 90.2 million, dropping compared to the € 98.8 recorded at 30 September 2015 (-8.7%), owing to lower average debt and greater efficiency in interest rates, obtained thanks to the renegotiation of a few loans, in addition to an optimisation of cash and cash equivalents. The new bond issued in early October allowed Hera to obtain € 400 million in financing, with a 10 year maturity and a cost below 1%. Net profit post minorities at € 142.2 million (+13.8%) Due to a tax rate coming to 36.5%, a noteworthy improvement compared to the same period in the previous year (thanks to the benefits ensuing from the application of the “patent box” and tax credits for research and development, as well as tax concessions for maxi amortisations), net profits rose by 12.5%, going from € 134.9 million at 30 September 2015 to € 151.8 million at 30 September 2016. In the first nine months of 2016, net profit post minorities rose to € 142.2 million, with a 13.8% increase over the € 125.0 million seen at 30 September 2015. Over € 250 million in investments and an improved net financial position Group investments in the first nine months of 2016, including € 10.5 million in capital grants, amounted to € 251.5 million, growing by roughly € 20 million compared to the same period in 2015 and in line with the results forecast in the business plan. The water business accounted for € 93.1 million of the above and gas business for € 64.1 million. Investments were made above all in plants, networks and infrastructures, in addition to regulatory upgrading chiefly in gas distribution (with a large-scale substitution of gas metres) and in purification and sewerage. The Group’s net financial position at 30 September settled at € 2,567.0 million, improving compared to the € 2,651.7 recorded at 31 December 2015 thanks to the creation of positive cash flows which, in addition to financing M&As and entirely covering annual dividend payments in June (coming to € 132 million overall), provided room for a reduction in debt. Gas EBITDA of the gas business, which includes services in natural gas and LPG distribution and sales, district heating and heat management, came to € 186.5 million at 30 September 2016, down from the € 205.6 million at 30 September 2015, mainly due to a slight decrease in trading and the impact of the regulation that modified the method used in calculating the rate of return on invested capital for infrastructure services in the gas sector. These results were also sustained by the recent acquisition of Julia Servizi, a company operating in the Abruzzo region in gas and electricity sales and by the acquisition, once again in Abruzzo, of Gran Sasso, active in the same field, whose effects will be felt beginning in the final quarter of the current financial year. The gas business accounts for 28.7% of Group EBITDA. Water The figures seen in the water business, which includes aqueduct, purification and sewerage services, are in line with those recorded in the same period in 2015, with EBITDA stable at € 173.7 million as compared to € 174.7 million at 30 September 2015. The negative impact of the reduction in the rate of return and the redefinition of revenue restrictions, amounting to € 10.9 million, was almost entirely compensated by the operational efficiency achieved during the period in question. The water business accounts for 26.7% of Group EBITDA. Waste The results in the waste business, which includes services in collecting, treating, recovering and disposing of waste, also confirmed those of the previous year, with EBITDA going from € 172.5 million at 30 September 2015 to € 172.2 million at 30 September 2016. The results of the third quarter were particularly significant, as was, more generally, the contribution coming from the acquisition in late 2015 of Waste Recycling and the Geo Nova plants, which underpinned the special waste sector and compensated for the temporary closure of landfills currently being enlarged (the Ravenna landfill reopened in August). Good results also came from sorted waste collection, which rose to 55.8% of the total, compared to the 54.9% seen in the first nine months of 2015, thanks to the wide range of projects implemented across all areas served. The waste business accounts for 26.5% of Group EBITDA. Electricity EBITDA pertaining to the electricity business, which includes services in electric generation, distribution and sales, grew from € 72.7 million in Q3 2015 to € 104.3 million at 30 September 2016. The negative impact on the electricity services coming from the resolution on revenues and EBITDA (€ 2.2 million in the first nine months) was more than compensated by greater margins in both sales activities and electricity production, including the related dispatching services, as well as by continuous commercial expansion on the free market. The electricity area accounts for 16.0% of Group EBITDA. The manager responsible for drafting the company’s accounting statements, Luca Moroni, declares, pursuant to article 154-bis paragraph 2 of the TUF, that the information contained in the present press release corresponds to the documentation available and to the account books and entries. The third quarter financial statement and related materials will be available to the public at the Company Headquarters and on the website www.gruppohera.it. Unaudited extracts from the Interim Financial Statements at 30 September 2016 are attached. Profit & Loss (m €) Sep 2016 Inc% Sep 2015 Inc.% Ch. Ch. % Sales 3,104.8 3,246.4 -141.6 -4.4% Other operating revenues 259.9 8.4% 226.0 7.0% +33.9 +15.0% Raw material (1,437.4) -46.3% (1,613.2) -49.7% -175.8 -10.9% Services costs (872.0) -28.1% (815.4) -25.1% +56.6 +6.9% Other operating expenses (34.7) -1.1% (40.9) -1.3% -6.2 -15.1% Personnel costs (390.1) -12.6% (380.5) -11.7% +9.6 +2.5% Capitalisations 20.0 0.6% 17.9 0.6% +2.1 +11.8% Ebitda 650.6 21.0% 640.2 19.7% +10.4 +1.6% Depreciation and provisions (321.3) -10.3% (323.0) -9.9% -1.7 -0.5% Ebit 329.2 10.6% 317.3 9.8% +11.9 +3.8% Financial inc./ (exp.) (90.2) -2.9% (98.8) -3.0% -8.6 -8.7% Pre tax profit 239.1 7.7% 218.4 6.7% +20.7 +9.5% Tax (87.2) -2.8% (83.5) -2.6% +3.7 +4.4% Net profit 151.8 4.9% 134.9 4.2% +16.9 +12.5% Attributable to: Shareholders of the Parent Company Minority shareholders 142.2 9.6 4.6% 0.3% 125.0 9.9 3.9% 0.3% +17.2 -0.3 +13.8% -2.8% Balance Sheet (m €) Sep 2016 Inc% Dec 2015 Inc.% Ch. Ch. % Net fixed assets 5,521.2 109.0% 5,511.3 106.9% +9.9 +0.2% Working capital 82.1 1.6% 157.0 3.1% (74.9) (47.7%) (Provisions) (535.8) (10.6%) (513.5) (10.0%) (22.3) +4.3% Net invested capital 5,067.5 100.0% 5,154.8 100.0% (87.3) (1.7%) Net equity 2,500.5 49.3% 2,503.1 48.6% (2.6) (0.1%) Long term net financial debt 2,729.0 53.9% 2,743.6 53.2% (14.6) (0.5%) Short term net financial debt (162.0) (3.2%) (91.9) (1.8%) (70.1) +76.3% Net financial debts 2,567.0 50.7% 2,651.7 51.4% (84.7) (3.2%) Net invested capital 5,067.5 100.0% 5,154.8 100.0% (87.3) (1.7%) Financial results as at 30 September 2016 2015-11-09 13:42:00 9M2015