News

Business Plan to 2027, operating and financial highlights

• 2027 Ebitda: 1.650 billion euro (+27% compared to 2022)
• Five-year investments at 4.4 billion euro
• Increased return on net invested capital, from 7.9% to 9.5% in 2027
• Net debt/Ebitda below 3x over the period covered by the Plan: 2.7x in 2027
• 7% average annual increase in Earnings per Share
• Dividends to rise by 28% (up to 16 €cents per share in 2027)
• Average annual Total Shareholder Return (TSR) at 12%.

Business highlights: sustainable growth

• 2.5 billion euro in investments aligned with the European Taxonomy for Sustainable Investments (98% of eligible investments)
• Shared-value investments coming to over 70% during the entire five-year plan
• Increase in shared-value Ebitda, up to over 55% in 2027, reaching 64% of total Ebitda
• Commitment to reduce total CO2 emissions by 29% within 2027 and by 37% within 2030 confirmed
• 30% of the investment plan goes towards digitisation and infrastructure innovation
• 40% of the investment plan contributes to increasing the climate-change resilience of the Group’s infrastructures
• 10 billion euro distributed over the five-year period 2023-2027 to stakeholders in the areas served by the Group

Highlights from 2023 preliminary results

• Ebitda expected to rise over 1,480 million euro (+14%)
• Net debt/Ebitda ratio expected to settle below 2.6x (from 3.3x in 2022)
• Dividend expected at 14 euro cents (+12% over 2022), higher than forecast by the Plan

The Hera Group’s Board of Directors, chaired by Cristian Fabbri, reviewed the preliminary results for 2023 and approved the Business Plan to 2027.
Growth in all main key operating and financial indicators, from Ebitda to ROI, earnings per share and dividends, accompanies a focus on financial balance, with net debt/Ebitda ratio stably below 3x.
The significant investment plan allocated for the 2023-2027 five-year period will support numerous projects and accelerate activities geared towards strengthening resilience and generating shared value and sustainable development. Hera thus confirms itself as a solid point of reference in its reference markets responding to the challenges of the external context and enabling the ecological, energy and digital transition, the circular economy and resource protection.

Cristian Fabbri, Executive Chairman of the Hera Group:

“4.4 billion in investments aimed at industrial development, sustainable growth and resilience underpin our projections of the Ebitda coming to 1.65 billion euro in 2027, up 28% compared to 2022, along with a dividend increase of 5% CAGR. 40% of capex plan will contribute to making our infrastructures even more resilient. A 29% reduction in carbon emissions and our commitment to resource regeneration are concrete examples of our contribution to the ecological transition, and the Ebitda generated by activities that also meet the targets set out in the UN Agenda will rise to 64%. Furthermore, over the five years covered by the Plan we will distribute 10 billion euro to the stakeholders. This Plan fully responds to our Group’s purpose: to generate sustainable value by promoting a ‘just’ transition. The record growth in Ebitda seen in 2023, which we expect to come to over 1.48 billion euro, and the considerable decrease in debt, with the net debt/Ebitda ratio expected below 2.6x, are promising indications and fundamental building blocks of this Business Plan. They are matched by the provisional awarding of more than one million customers in the Italian electricity market liberalization process, allowing us to more rapidly reach 4.3 million energy customers and to consolidate our position as Italy’s third largest operator in this sector.”

Orazio Iacono, CEO of the Hera Group:

“With Ebitda expected to reach almost 1.5 billion euro in 2023, and financial leverage strongly improving to less than 2.6x, we will meet and exceed the targets set out in the previous Business Plan to 2026 three years ahead of schedule. These results prove the validity of our Group’s strategic vision in seizing market opportunities and our commitment towards sustainable growth in the areas served. This commitment has been confirmed once again by our new Business Plan, with shared-value Ebitda expected to exceed 1 billion euro in 2027, showing a 55% increase in absolute terms over 2022-2027, higher than the growth rate of overall Ebitda, testifying to the growing importance of initiatives that not only generate margins for our company, but are also in line with the objectives found in the UN Agenda. More than 70% of the investments made over the time covered by the Plan will indeed be allocated to sustainability projects that benefit all our stakeholders. Regarding our various businesses, the next five years will see an important contribution to growth in the Group’s results coming from all activities, in particular the waste management sector, thanks to our strategy that leverages a portfolio of global waste services that will further strengthen our leadership in this market, and the networks sector, which will see a significant investment plan, accompanying the areas served towards the green transition.”

 

Business Plan to 2027

The strategic objective underlying the Hera Group’s new Business Plan is to create value benefitting all stakeholders, thanks to financial, environmental and social sustainability objectives, along with a business model and an industrial structure that are resilient to the negative effects of climate change and external market crises.

Creating value: 2027 Ebitda up to 1.650 billion and dividend up to 16 €cents (+28%)

The projects planned will bring overall Ebitda to more than 1,650 million euro in 2027, with a 355 million euro improvement compared to the 2022 result. Taking into account a number of business opportunities that will no longer be present during the time covered by the Plan and that contributed with roughly 120 million euro to the 2022 result, the growth will reach 475 million euro with an average annual rate coming to 7%.

Sustainable growth to support the ecological transition: shared-value Ebitda at 64% in 2027 and economic contribution to local areas at 10 billion euro

The Hera Group has confirmed its focus on the circular economy and decarbonisation, in order to encourage and support the ecological transition of the areas served with initiatives aimed at citizens, public administrations and industrial customers, offering its extensive set of plants and the know-how it has accumulated in various business sectors.
The initiatives set out in the Business Plan to 2027 make it possible to project a path that is perfectly consistent with achieving the industrial objectives to 2030 in terms of circular economy and decarbonisation.
As regards the circular economy, for example, the route to be followed confirms 2030 targets such as an increase in recycled plastics (+150% compared to 2017) and the reuse of wastewater (reaching 18% of total wastewater by 2030).

Balanced growth in the multi-business portfolio and increased resilience

The Business Plan expects growth to be equally distributed among the three main lines of business (networks, energy and waste management), maintaining their current balance. Continuity is also expected in the Group’s development model, which has ensured a high degree of resilience in results within all scenarios witnessed over the last twenty years, allowing for uninterrupted growth in both sustainability targets and operating-financial and service performances.
 

Total investments at 4.4 billion euro, with additional projects funded by 400 million in grants coming from the NRRP and other institutions

The investment plan amounts to 4.4 billion euro, 48% of which will go to development initiatives and M&As. 55% of investments will be earmarked for regulated businesses, while the remaining 45% will support growth in free-market businesses.
The over 870 million euro invested each year on average will accelerate the Group’s commitment to the ecological transition (with roughly 60% of the entire investment plan going to decarbonisation and the circular economy) and to generate sustainable development in the areas served. In this sense, more than 70% of the investment plan will be allocated to initiatives capable of creating shared-value Ebitda.
In light of the introduction of the new aspects related to the European Taxonomy, the Group estimates that operational investments coming to 2.5 billion euro (or 98% of eligible investments) will be aligned with the requirements of the European framework, and will therefore be able to gain full access to subsidised sustainable finance instruments, with benefits in terms of financial costs as well.

For further information
Press release​​​​​​​
Investors web area
Hera Overview