The half-year report shows significant growth in operating and financial indicators, thanks to the contribution coming from the Group’s main businesses. The pursuit of sustainable development and financial solidity are confirmed as strong points
Financial highlights
- Revenues at 4,179.7 million euro (+22.8%)
- Ebitda at 617.9 million euro (+10.4%)
- Net profit for Shareholders at 216.1 million euro (+30.0%)
- Strong improvement in net financial debt, now at 2,956.7 million euro, with a further decrease in the net debt/Ebitda ratio, now at 2.5x
Operating highlights
- Good contribution to growth comes from the Group’s main businesses, in particular the energy and waste areas
- Progression of results underpinned both by organic growth and M&A
- Solid customer base in energy sectors, coming to almost 3.4 million customers
The Hera Group’s Board of Directors, chaired by Tomaso Tommasi di Vignano, unanimously approved the consolidated operating results for the first half of 2021, which confirm the positive trend shown by the Group, with strong growth in the main operating and financial indicators, and financial solidity confirmed by the further improvement in the net debt/Ebitda ratio, now at 2.5x.
Among the main changes in the scope of consolidation, external growth occurred through a few transactions in the waste management sector, in particular the acquisition of 70% of Recycla, a Friuli-based company that manages three platforms for solid and liquid industrial waste and is headquartered in Maniago (PN), consolidated in the first half of 2021. In addition, 31% of SEA, a company operating in the Marche region with a solid facility for industrial waste, was acquired, and a further transaction will be closed in the same area within the summer. Furthermore, another acquisition will contribute to the results in second half: yesterday it was finalised the acquisition of the 90% of share capital of Ecogas, operating in Abruzzo, which will bring roughly 22,000 new customers and will lead the Group to consolidate its role as the third largest operator in that area, with roughly 90,000 customers.
Revenues increase sharply, coming to roughly 4.2 billion euro
In the first half of 2021, revenues amounted to 4,179.7 million, rising considerably by 777.4 million (+22.8%) compared to the 3,402.3 million seen in the same period of 2020, thanks to the contribution coming from all business areas. In particular, the waste management sector contributed to growth with an increase in waste treated and plastics sold, as did the energy areas. In this area, higher revenues came from trading, higher volumes of gas sold, the increased price of electricity and generation, as well as growth in the heat management business and value-added services.
Ebitda rises to 617.9 million euro
Ebitda amounted to 617.9 million, up by 58.2 million (+10.4%) over the 559.7 million seen at 30 June 2020. This growth was mainly driven by the energy area, due to higher sales and trading margins, and the waste management sector.
Operating results and pre-tax profits increase
Operating income rose to 343.6 million (+16.2%), compared to 295.7 million in the same period of 2020, partially due to improved financial operations, coming to 55.1 million. This result includes higher charges resulting from the sale of tax credits as part of ecobonus-related activities. Pre-tax profit rose to 288.5 million (+20.5%), up compared to the 239.5 million in the first half of 2020, for reasons including non-recurring items related to a tax exemptions, as described in further detail below.
Net profits for Shareholders up, reaching 216.1 million euro
Thanks to a tax rate coming to 26.7%, an improvement compared to the 27% seen in the first half of 2020, achieved thanks to the Group’s commitment investment in technological, digital and environmental transformation following Utility 4.0 trends, net profits at 30 June 2021 rose to 236.2 million (+35.1%), compared to 174.9 million in the first half of 2020. This increase is also linked to the value of special items, which contributed with 24.7 million, also due to the effects of the tax realignment concerning some goodwill recognised in the financial statements for 46.3 million. Also due to this factor, profit attributable to Group Shareholders increased sharply, coming to 216.1 million (+30.0%), as against the 166.2 million seen in the same period one year earlier.
Strong increase in investments and improvement in net financial debt
Net operating investments went from 195.1 million at 30 June 2020 to 237.4 million in the first half of 2021, up 21.7%, and were mainly related to works on plants, networks and infrastructures, in addition to investments for the large-scale meter replacement and the purification and sewage sector.
Thanks to the positive contribution coming from operations, which allowed both higher investments and M&A transactions to be fully financed, net financial debt further improved, settling at 2,956.7 million at 30 June 2021, compared to 3,227.0 million at 31 December 2020. The Group’s financial solidity was also confirmed by the net debt/Ebitda ratio, which in the first half of 2021 dropped to 2.5x, a further improvement compared to 2.87x at the end of 2020 and 2.81x at 30 June 2020. Hera’s financial strength – also reflected in the ratings given by the main rating agencies, including Standard & Poor's recent upgrade to BBB+ with a stable outlook – goes hand in hand with the sustainable development strategy it has pursued since its establishment, along with its ability to manage risks and opportunities, as shown by S&P Global Rating’s ESG Evaluation.
Statement by Executive Chairman Tomaso Tommasi di Vignano
Our half-year results reflect the good performance of the Group and encourage us to look towards the future with confidence, in line with our long-standing path of growth and our focus on creating value for our shareholders and the local areas in which we operate. In particular, respecting the strategic guidelines contained in our Business Plan to 2024, we are carrying out a series of transactions aimed at external growth, which will allow us to consolidate our leadership in Italy in waste treatment and further expand our plant platform, with cutting-edge facilities and circular economy solutions for companies. In this way, we will be able to continue to extend the scope of our activity, extracting synergies and guaranteeing increasing benefits for our customers, thanks to a more pervasive presence in the areas served. The acquisitions in the waste management area alone, once completed, will create an additional contribution to the Hera Group’s Ebitda coming to approximately 20 million euro, above and beyond the value of the synergies expected from these integrations.
Statement by CEO Stefano Venier
The results achieved in the first half of the year show a further reinforcement of our financial solidity, based on an excellent operating performance and effective management of working capital. This balanced and solid path allows us to effectively govern the changes underway, guaranteeing further expansion in investments and continuing to implement the development strategy outlined in our Business Plan, capable of combining growth and solutions supporting the transition, as further confirmed quite recently by S&P Global Rating’s ESG Evaluation.
| Profit & Loss (m€) | 30/06/2021 | Inc. % | 30/06/2020 | Inc. % | Ch. | Ch. % |
|---|---|---|---|---|---|---|
| Sales | 4,179.7 | 3,402.3 | +777.4 | +22.8% | ||
| Other operating revenues | 140.2 | 3.4% | 222.6 | 6.5% | (82.4) | (37.0%) |
| Raw material | (2,128.5) | (50.9%) | (1,605.1) | (47.2%) | +523.4 | +32.6% |
| Services costs | (1,260.1) | (30.1%) | (1,151.0) | (33.8%) | +109.1 | +9.5% |
| Other operating expenses | (37.9) | (0.9%) | (32.5) | (1.0%) | +5.4 | +16.6% |
| Personnel costs | (301.8) | (7.2%) | (290.9) | (8.5%) | +10.9 | +3.7% |
| Capitalisations | 26.3 | 0.6% | 14.3 | 0.4% | +12.0 | +84.0% |
| Ebitda | 617.9 | 14.8% | 559.7 | 16.5% | +58.2 | +10.4% |
| Depreciation and provisions | (274.3) | (6.6%) | (264.0) | (7.8%) | +10.3 | +3.9% |
| Ebit | 343.6 | 8.2% | 295.7 | 8.7% | +47.9 | +16.2% |
| Financial inc./(exp.) | (55.1) | (1.3%) | (56.2) | (1.7%) | (1.1) | (2.0%) |
| Pre tax profit | 288.5 | 6.9% | 239.5 | 7.0% | +49.0 | +20.5% |
| Taxes | (77.0) | (1.8%) | (64.6) | (1.9%) | +12.4 | +19.2% |
| Net profit | 211.5 | 5.1% | 174.9 | 5.1% | +36.6 | +20.9% |
| Special items | 24.7 | 0.6% | - | 0.0% | +24.7 | +100.0% |
| Net profit | 236.2 | 5.7% | 174.9 | 5.1% | +61.3 | +35.1% |
| Attributable to: | ||||||
| Shareholders of the Parent Company | 216.1 | 5.2% | 166.2 | 4.9% | +49.9 | +30.0% |
| Minority shareholders | 20.1 | 0.5% | 8.7 | 0.3% | +11.4 | +131.1% |
| Balance Sheet (m€) | 30/06/2021 | Inc.% | 31/12/2020 | Inc.% | Ch. | Ch. % |
|---|---|---|---|---|---|---|
| Net fixed assets | 7,097.6 | 113.4% | 6,983.6 | 109.4% | +114.0 | +1.6% |
| Working capital | (176.8) | (2.8%) | 53.6 | 0.8% | (230.4) | (429.9%) |
| (Provisions) | (663.4) | (10.6%) | (654.9) | (10.2%) | (8.5) | +1.3% |
| Net invested capital | 6,257.4 | 100.0% | 6,382.3 | 100.0% | (124.9) | (2.0%) |
| Net equity | 3,300.7 | 52.7% | 3,155.3 | 49.4% | +145.4 | +4.6% |
| Long term net financial debt | 3,460.6 | 55.3% | 3,617.1 | 56.7% | (156.5) | (4.3%) |
| Short term net financial debt | (503.9) | (8.0%) | (390.1) | (6.1%) | (113.8) | +29.2% |
| Net financial debts | 2,956.7 | 47.3% | 3,227.0 | 50.6% | (270.3) | (8.4%) |
| Net invested capital | 6,257.4 | 100.0% | 6,382.3 | 100.0% | (124.9) | (2.0%) |
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