Tomaso Tommasi di Vignano

Tomaso Tommasi di Vignano

1H 2018 Overview

In the first half of 2018, the Group once again achieved positive results: Ebitda amounting to € 523.6 million showed a +3.5% increase over the previous year, matched by a +12.1% improvement in net profits. This growth was attained thanks to the contribution coming from all main activities, thanks to additional efficiencies in regulated businesses, and new market shares gained with wider space in liberalised markets. The first half-year thus saw continued creation of value for our shareholders, who were paid a dividend of 9.5 cents per share on June 20.

Close and back to the site

Commento del Presidente

1H 2018 financial results

Overall consolidated results

All Group businesses contributed to achieving the good first-half results, with a particularly positive performance seen in the gas and waste management areas, respectively due to volumes sold and a positive trend in market prices. The electricity customer base increased compared to 1H2017, settling at the end of the reporting period at 2.5 million.



523.6 mln of Euro


Net profit

Net profit

158.1 mln of Euro


Net debt

Net debt

2,625.0 mln of Euro

Areas of activity

Consolidated Ebitda grew by 17.7 mn€, thanks to the contribution of most business areas. Special mention must go to the performance of the Gas area, whose Ebitda improved by 16.6 mn€, and the Waste management area, whose contribution increased by 4.6 mn€.

Read more

  • gas
  • electricity
  • water cycle
  • environment
  • Gas segment
  • Electricity segment
  • Water segment
  • Environment segment
Close and back to the site

Three factors have mainly driven the increase of 212.7 mn€ in Group Revenues (+7.7% vs. H1 2017): i) increased Trading (57 mn€), ii) higher sales of gas and electricity (120 mn€) that reflect higher volumes sold, iii) system charges and volumes distributed growing by 52 mn€.

Anyway, the customer base recorded strong expansion (+8.9%), reaching 1 million users. An achievement made possible by the growth both in the safeguarded service and in the liberalised business, as a result of an effective commercial activity, mainly focused in Central Italy.

The results gain further value, especially if we consider the fact that, in all growing business areas, sustainable and shared value activities have been implemented.

Investor Kit
  • Benchmark
  • Analyst
  • Strategy
  • Our History
Net Profit
Net Financial Position
Gas Integrated water cycle Environment Electricity
KPI - gas salesKPI - water supplied volumeKPi - waste volumes treatedKPI - Energy sales
Target price

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

Miltiregional precence
Ebitda Growth Drivers
EBITDA '17 Networks Waste Energy
riskrisk networksRisk waste risk energy
Ebitda Net profit Debt/Ebitda M&A
EBITDA Growth driversNet profit growthDEBT/EBITDA Enhanced%y M Atrack

Titolo Hera

Hera stock and the creation of value for shareholders

In a macro scenario still showing signs of uncertainty, Hera stock offers a guaranteed return, based on solid fundamentals.

Read more

Close and back to the site

Financial markets showed opposing trends in the first half of 2018, with positive phases supported by optimism as to the prospects for global growth alternating with moments dominated by investors showing concern due to the emergence of geopolitical risk factors. In the wake of the positive close to 2017, 2018 initially got underway with a general rise in all global stock market indexes. As of the month of February, expectations for an increased inflation rate, sustained among other things by the substantial fiscal measures introduced by the American government, led to a abrupt change in the approach of financial operators, whose evaluations began to take into account a more rapid retreat from the central banks’ expansive monetary policies. The good results reported by listed companies, which in most cases exceeded expectations, then guided the rebound in stock prices seen in March and April, followed by an intensification in the trade war between the United States and China, which led to a new drop in market quotations.

Towards the end of the first half-year, the Italian market experienced a phase of higher volatility than other global stock markets, as a consequence of the Italian political scenario and uncertainty as to the new government’s economic policy. In this situation, investors chose to disinvest in Italian government bonds, with clear repercussions affecting those companies most closely tied to the national economy (such as utilities and banks).

In this context, Hera stock closed the period with an official price of € 2.683, showing a trend similar to its reference sector but with a superior performance, that benefitted from both the clear growth strategy included in the business plan to 2021, presented to the financial community in the months of January and February in an international road show, and from the validity of its fundamental structure as confirmed by the publication of its annual financial report in March and its first-quarter results in May.

On 18 June, in line with the indications contained in the business plan, Hera paid a dividend coming to 9.5 cents per share, the sixteenth in a series of uninterrupted increase since being listed.

euro 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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 0.095

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 +213%.

The financial analysts covering the company (Banca Akros, Banca IMI, Equita Sim, Fidentiis Equities, 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 period in question, the consensus target price came to € 3.36 euro, higher than the € 3.15 recommended at the end of 2017.

Shareholder breakdown at 30/06/2018

At 30 June, 48.4% of total shares were held by 118 public shareholders located across the areas served and brought together by a shareholders’ agreement, signed on 26 June 2015 and valid for three years, while 51.6% of total shares were floating.

Read more

Shareholders 1H 2108

Shareholder 1H 2018

Close and back to the site

Since 2006, Hera has adopted a share buyback program, renewed by the Shareholders Meeting of 26 April 2018 for 18 further months, for an overall maximum amount of € 200 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 the first half of 2018, Hera held 22.9 million treasury shares.

After the publication of the new 2017-2021 business plan, Hera’s top management engaged in a road show covering the main European and North American financial markets to illustrate the Group’s growth targets to investors. This commitment to accurate communication, which was followed by participation in sector conferences, proved to have a positive effect on the stock’s performance in the period in question.

The intense dedication shown by the Group towards dialoguing with investors contributed to reinforcing its market reputation and represents an intangible asset benefiting Hera stock and stakeholders.

Hera's stories

Behind the number

Behind the numbers: stories of shared values

In order to grasp the deep meaning hidden behind these numbers, we’d like to say a few words about the strategies, innovation, projects, value, ideas and social and corporate responsibility that have allowed the Group, thanks to the fundamental contribution coming from our shareholders, customers, suppliers and stakeholders found across the areas served, to obtain growing results and create shared value in the first half of 2018 as well.

The ecosystem and its unitary nature

by Stefano Venier

The circular smart city

by Enrico Piraccini

The Hera Laboratory System

by Chiara Lambertini

Value Creators ranking

by Jens Klint Hansen

Close and back to the site

The ecosystem and its unitary nature

Hera’s strategy is geared towards the challenges involved in a sustainable future.

Stefano Venier
Stefano Venier

Here is some information taken from the June convention “The ecosystem and its unitary nature: a challenge for a sustainable future”, along with the vision expressed by Stefano Venier, CEO of the Hera Group.

On 4 June, the convention “The ecosystem and its unitary nature: a challenge for a sustainable future”, organised as part of the European Week for Sustainable Development, was held at the Hera Group’s central offices in Bologna.

This event saw the participation of the President of the Emilia-Romagna region, Stefano Bonaccini, who was flanked by internationally recognised figures coming from a range of contexts including institutions, businesses and universities. One prominent guest was Prof. Jeffrey Sachs from Columbia University, who played an important role in elaborating the Sustainable Developments Goals defined by the UN’s 2030 Agenda.

The ecosystem and its unitary nature

During this event, the content of Hera’s Sustainability Report was presented. Completely renewed as of the current year, this report shows economic, social and environmental indicators undergoing constant improvement, lending ever more credibility to the future outlook of becoming increasingly aligned with the Un Agenda’s SDGs. The Sustainability Report is also the tool through which Hera quantifies shared value, i.e. the portion of Ebitda derived from activities that generate income for the company while at the same time meeting 10 of the 17 sustainability goals indicated in the Global Agenda. This financial data is subdivided into the areas: smart use of energy, efficient use of resources, innovation and contribution to developing local areas.

The ecosystem and its unitary nature

The international overtones of this event and the new approach to sustainability outlined in the report both underscore the increasingly significant role played by Hera, a company operating in highly critical and important businesses as regards sustainability, in giving a local shape to the global issues involved in ESG.

This ability to actively formulate proposals was underlined by Group CEO Stefano Venier, who stated during the event: "...we have now fully entered a proactive phase, acting as a guide for change with concrete actions and projects”, highlighting that this premise gains even greater weight if considered in relation to the specific features of the sector in which multi-utilities operate: “In managing energy, waste and water, one is working with the main components of the environment. If we furthermore consider their role in some productive activities, or others that have an effect on air quality (such as district heating, energy use and plant management), we clearly see that multi-utilities are able to play a direct and indirect role in global change.”

The CEO’s words pointed towards the disruptive route the Group intends to follow in the future: this route is constructed on economic and governance models capable of sustaining a “purpose driven” approach to the business, with these models calibrated over the long term and therefore not merely guided by short-term emergencies, often retroactively. Hera intends to implement a strategy that goes beyond the concept of “remediation”, i.e. an after-the-fact alleviation of the environmental stress caused by humanity’s activity, by deploying models, actions and projects able to proactively contain the impact of these activities on the environment.

Highlights 1

While from a traditional perspective the Group is already highly consolidated and able to autonomously carry on in its own activities, in order to fully introduce this new forward-looking and pre-emptive approach it requires this call to action to be more broadly shared from a multi-stakeholder perspective. Citizens/customers will be asked to modify their behaviour and their models of usage/consumption; business will be required to adopt an environmental and regenerative-by-design approach to planning and offering services, materials and goods; institutions will be called on to establish a framework for action that reduces uncertainty in public sentiment thanks to clear and broadly shared orientations.

This is the kind of globally “engaged” scenario in which the Group intends to operate.

In addition to working in the traditional waste sector, in which it has made courageous and innovative choices, Hera wishes to enlarge its range of business activities to include others falling under its area of expertise.

As regards managing the integrated water cycle, for example, this multi-utility is dedicating significant efforts to an increasing “regeneration and reuse of the resource” (above all in light of the growing amount of drought caused by climate change) and protecting the quality of water and the Adriatic sea.
The experimental programmes currently underway are aimed at:

  1. reducing the use of energy and chemical compounds, optimizing operating conditions and conduction;
  2. valorising water resources by obtaining higher quality, reducing leakage and promoting repeated use;
  3. regenerating the natural capital, by recovering energy and materials during purification processes.

Innovation continues to be the main lever activated by the Group in order to maintain its role as a leader in creating sustainable and shared value in the businesses in which it operates. Innovation must indeed by applied on the one hand to production and consumer technologies, so as to reduce the demand made on the planet, i.e. to reduce consumption per unit produced or favour recovery/reuse of materials, and on the other to ICT and artificial intelligence in managing goods, services and infrastructures.

The ecosystem and its unitary nature

A proactive evolution strategy, a focused use of technology and the active and precise involvement shown by all those having interests are, therefore, the fundamental elements for a collective path that leads to creating shared value.

Close and back to the site

The circular smart city

Enrico Piraccini
Enrico Piraccini

“The circular smart city”: questions and answers. A brief introduction by Enrico Piraccini, responsible for the Castel Bolognese project

What is a circular smart city?

A city that perfectly integrates efficiency with the wellbeing of its citizens and the environment.

Smart cities

What are its various components?

The Smart part has to do with introducing new technologies, to analyse the city’s data:

  • a network of urban sensors able to read the conditions of the environment
  • widespread connectivity within the city
  • an IT platform elaborates all the data coming from the urban sensors and the databases
  • an operation centre will then become the new city’s brain

As regards the Sustainability content, we refer in particular to a smart and responsible use of resources and the local environment, i.e.:

  • an energy transition towards forms of sustainable energy and higher efficiency
  • a Circular economy that calls for recovered waste to be used later when producing raw materials, using new technologies
  • a «circular» water cycle, to face climate change by recovering water and reducing leakage

and now we come to what we mean by… Healthy. A healthy city is one that offers a good environmental quality and deploys strategies aimed at prevention and protecting the health of its residents.

This may involve;

  • green infrastructures, that allow the pressure caused by climate change to be dealt with and citizens’ wellbeing to be promoted
  • air quality in line with the goals set by the WHO
  • sustainable mobility based on using alternatives to cars
  • reduced land consumption
  • care given to health and lifestyles


What role will Hera play in providing goods and services to the smart and circular city?

Hera aims at guiding the city towards an economic and digital transition, providing services that are

  • sustainable for the environment - in the water, waste and energy areas
  • able to improve health - air quality, resilience and climate change, green infrastructures, sustainable mobility, land consumption
  • at the service of a smart and productive analysis of BIG DATA d - IoT, connectivity, Data analysis, Operation Centre, Cyber Physical System, more specifically:

Does this city exist or is it still a theoretical project?

As of early 2018, this city has begun to develop and grow wider, becoming a concrete reality.

The first experimental services intended to transform a town into a smart, safe and circular city were in fact introduced in January 2018 in Castel Bolognese, in the Province of Ravenna, and will carry on until the end of the current year.

Città intelligente

The steps seen in the project’s evolution during the period that has just come to a close.

Close and back to the site

I laboratori di Hera

Chiara Lambertini
Chiara Lambertini

The pivotal role played by Hera’s laboratories ensures excellence in all services offered to customers, guaranteeing accurate qualitative controls and complete protection of the people and localities served.

Chiara Lambertini, the environmental engineer responsible for the laboratories, has given us some data to better understand one of the Group’s most outstanding achievements.

Rather than single laboratories, the Group can rely on a true “Laboratory System”, made up of:

  • 3 main laboratories spread out over the areas served (Sasso Marconi, Forlì and Novoledo)
  • 2 laboratory outposts, that is, smaller laboratories focused on immediate and routine analyses inside complex plants (one at the dangerous waste treatment plant in the Baiona chemical centre near Ravenna, and another at the New Purifier in Servola, near Trieste)
  • a network of logistic centres (generally, one for every province in the Group’s reference areas), where samples are collected and sorted.

Storia 3 - foto 1

The Hera Laboratory System is one of the nation’s most advanced professional facilities in the fields of quality control, environment monitoring, industrial plants and process safety, thanks to a service offer that fully meets the Group’s needs. The laboratories are key places for:

  • sampling organisation, management, optimisation and implementation across the geographical areas served by the Hera Groupand for all environmental sectors (Water, Waste, Solids and Liquids, Air, Chemical Products, Surfaces);
  • drinking water, groundwater and drainage water analysis;
  • waste analysis and classification;
  • compost, sludge and compost material analysis;
  • highly specialise analyses in various environmental areas (e.g. asbestos, PFAS, radioactivity, emerging polluters);
  • control of atmospheric emissions, funnelled and diffuse;
  • odour monitoring;
  • support for plant managers, by
    • providing analytical results of plant management activities through a dedicated information system in the Group’s IT architecture,
    • monitoring to ensure that the limits set by authorisations for operations are respected, with automatic alerts for managers,
    • consultancy in industrial hygiene, definition of environmental and personal enquiry protocols
    • specialist consultancy;
  • third-party consulting services;
  • availability.

Storia 3

To get an even better idea of the huge amount of work carried out within it, all one has to do is take a glance at the figures produced by the laboratory system:

  • approximately 80,000 samples are handled annually, with over one million analyses, corresponding to roughly 4,500 per day;
  • 90 people, with different professional training (analysts, samplers, directors and administrative personnel) are at work every day to guarantee the excellence and safety of the Group’s operations.

The Laboratory System came into being thanks to a specific regulatory obligation: Art. 7 of legislative decree 31/2001 (implementing the European decree for controls on drinking water), regarding «Internal controls», explicitly requires that in carrying out controls, the integrated water service manager either make use of internal analysis laboratories or stipulate a specific convention with other water service managers.

This regulatory context later evolved, with the introduction of new parameters:

  • legislative decree 231 (corporate offence);
  • authorisation pursuant to legislative decree 152/2006 (water drainage; waste management; atmospheric emissions; decontamination);
  • definition of specific Integrated Environmental Authorisations for the managers belonging to the Hera Group.

While the laboratory system was initially launched mainly to comply with legal obligations, it must be stressed that its later evolution became part of the Group’s strategy aimed at improving its reputation from a multi-stakeholder point of view, in order to deal with increasing analytical requirements, at times quite different among themselves, thus creating shared value.

Over the years, therefore, additional sectors of analysis were developed, including waste, air and other specialisations. This led to growing competencies and a revision of internal processes: in spite of the extremely high level of innovation already reached, taking the form of both professional skills and technologies employed, the strategic relevance given to the process of modernising the laboratory system requires us to consider it as constantly and continuously evolving..

Storia 3 - foto 3

Ninety percent of the work done in the Group’s laboratories is done for internal Hera customers, i.e. for the Integrated water service (purification plants and distribution), for the waste treatment and disposal sector (waste to energy plants, composting sites, landfills, industrial waste management plants) and for energy plants (gas and odorizing control), contributing to monitoring the environmental impact and proper functioning of the plants.

The remaining ten percent is done for third-party customers, for whom a dedicated commercial offer was defined (and later reinforced).

In the analysis sector, data quality and reliability are essential. As a consequence, in addition to obtaining Quality, Environment and Safety certifications, over the years Hera laboratories have followed Qualification procedures pursuant to regulation UNI CEI EN ISO 17025. This certification guarantees the laboratories’ competence in the services provided, confirming the quality of the work and the operating methodologies adopted.

Highlights storia 3

Given that the Group gives extreme importance to an ethical approach and to creating value while respecting the wellbeing and the ethical convictions of all those having an interest in Hera, in Group laboratories NO tests are done on animals.

Close and back to the site
Jens Klint Hansen
Jens Klint Hansen

Jens Klint Hansen, director of Hera’s IR team, speaks of the prizes and recognitions gained by the Group in 1H 2018

The Hera Group gives a huge amount to importance to financial communication from a multi-stakeholder point of view.

Each year, alongside the dialogue promoted by top management during its road shows for the Business plan and its presentations of financial results, the investor relations team, working in close contact with its colleagues in CSR, external relations, finance and control, strategic planning and corporate governance, provides accurate information as to the strategies and actions introduced by the Group, which for over 15 years has continually created value for its shareholders.

This activity in communication and constant dialogue has allowed Hera to gain important recognitions both in Italy and abroad. In the half-year that has just come to a close, two eminent rankings have assigned the multi-utility a significant place among their classifications of the ten most virtuous companies.

Highlights - storia 4

The new edition of “Value Creators”, the twentieth report drafted by the Boston Consulting Group* that measures performance in terms of Total Shareholder Return (TSR) among listed companies with the largest capitalisation, through changes in the price of shares and return on dividends paid and reinvested, sets Hera at the sixth place worldwide among companies creating value for the “Power & Gas Utility” sector in the period between 2013 and 2017.

Storia 4 - immagine BCG

This recognition represents further confirmation of the approval given to the Group’s long-term strategy, that aims at creating shared value with its own shareholders.

* In the last 20 years, the BCG has classified companies based on their total shareholder return (TSR), a long-term indicator that reflects the true profit base for the shareholders of a company.

Storia 4 - foto 1

This international recognition is flanked by the one gained in June 2018 in the annual edition of the Integrated governance index*, promoted locally by Top Legal e Etica News: Hera, that was assigned fifth place among the 47 companies included in the general ranking, also came in first in the special enquiry into the relations between companies and responsible finance.

The 2018 Integrated Governance Index, the leading national Observatory as to the degree to which sustainability is integrated into corporate strategies, involved almost 50% of the top 100 listed Italian companied and drew attention to the significant role played by the Group as regards integrating ESG principles within corporate governance and financial management.


Financial results 1H 2018

Director's report

Close and back to the site

Operating APMs and investments

Operating APMs and investments (mn€) June 18 June 17 Abs. Change Var.%
Revenues 2.966,7 2.754,0 +212,7 +7,7%
Ebitda 523,6 505,9 +17,7 +3,5%
Ebitda/revenues ratio 17,6% 18,4% -0,8 p.p.
Ebit 273,6 262,2 +11,4 +4,3%
Ebit/revenues ratio 9,2% 9,5% -0,3 p.p.
Net profit 167,2 148,0 +19,2 +13,0%
Net profit/revenues ratio 5,6% 5,4% +0,2 p.p.
Net investments * 177,8 151,8 +26,0 +17,1%

*For the data used in calculating investments, see notes 13, 14, 15, 16 in the explanatory notes and paragraph 1.01.02 of the overview of Group management performance

Financial APMs

Financial APMs (mn€) June 18 Dec 17 Abs. Change % Change
Net non-current assets 5.828,2 5.780,6 +47,6 +0,8%
Net working capital 84,2 23,2 +61,0 +262,9%
Provisions (571,8) (574,8) +3,0 +0,5%
Net invested capital 5.340,6 5.229,0 +111,6 +2,1%
Net debt (2.625,0) (2.523,0) -102,0 -4,0%


Close and back to the site

Constant growth in all indicators

The Hera Group closed the first half of 2018 with operating results up over the same period in the previous year. Ebitda reached € 523.6 million, up 3.5%, Ebit amounted to € 273.6 million, up 4.3% and net profits came to € 162.7 million, up 13.0%.

These results were achieved through the Group’s consolidated multi-business strategy, balanced between regulated and freely competitive activities. Hera pursues this model by combining internal growth and external development through the opportunities offered by the market.

The main corporate and business operations to be taken into account in evaluating the changes with respect to the first six months of 2017 are:

  • On 6 July 2017, Hera Comm Marche Srl acquired full holding of the company Verducci Servizi Srl, which operates in the natural gas and electricity supply market.
  • On 20 December 2017, effective as of 1 January 2018, through EnergiaBaseTrieste Srl, 13,000 protected electricity customers were acquired in the Municipality of Gorizia, previously served by Eni gas e luce Spa.
  • Acting on the binding agreement signed on 21 December 2017, on 6 April 2018 Hera Spa proceeded to transfer to Italgas Spa its entire holding in Medea Spa.
  • On 8 February 2018, a 100% holding of Blu Ranton Srl, a company operating in gas and electricity sales to end customers, was acquired by Hera Comm Marche Srl. The company serves roughly 17,000 gas and electricity customers in Teramo, Pescara and Macerata.
  • On 20 March 2018, Hera Comm Srl acquired 49% of Sangro Servizi Srl, a gas, electricity and other energy product sales company with roughly 7,000 gas customers served in the Province of Chieti.
  • On 7 March 2018, the respective shareholders meetings approved a project for merger by incorporation of Megas Net Spa (a company related to the Group which owns distribution networks) in Marche Multiservizi Spa; the effective date of the transaction is 1 June 2018, with accounting and tax effects retroactively set at 1 January 2018.
  • On 28 March 2018 Hera Comm Srl transferred 2.88% of the share capital of Hera Comm Marche Srl to minority shareholder Walter Sadori Srl.

The following table shows operating results at 30 June 2018 and 2017:

Constant and increasing growth

Income statement
June 18 % Inc. June 17 % Inc. Abs. Change % Change
Revenues 2,966.7 2,754.0 +212.7 +7.7%
Other operating revenues 209.8 7.1% 202.3 7.3% +7.5 +3.7%
Raw materials (1,327.6) -44.7% (1,178.4) -42.8% +149.2 +12.7%
Service costs (1,031.6) -34.8% (981.7) -35.6% +49.9 +5.1%
Other operating costs (30.3) -1.0% (25.8) -0.9% +4.5 +17.5%
Personnel costs (281.7) -9.5% (282.4) -10.3% -0.7 -0.2%
Capitalised costs 18.3 0.6% 17.9 0.6% +0.4 +2.2%
Ebitda 523.6 17.6% 505.9 18.4% +17.7 +3.5%
Amortisation, depreciation and provisions (250.0) -8.4% (243.7) -8.9% +6.3 +2.6%
Ebit 273.6 9.2% 262.2 9.5% +11.4 +4.3%
Financial operations (39.2) -1.3% (45.9) -1.7% -6.7 -14.6%
Pre-tax result 234.4 7.9% 216.3 7.9% +18.1 +8.4%
Taxes (72.0) -2.4% (68.3) -2.5% +3.7 +5.4%
Net result 162.4 5.5% 148.0 5.4% +14.4 +9.7%
Result from special items 4.8 0.2% - 0.0% +4.8 +100.0%
Net profit for the period 167.2 5.6% 148.0 5.4% +19.2 +13.0%
Attributable to:
Shareholders of the Parent Company 158.1 5.3% 141.0 5.1% +17.1 +12.1%
Non-controlling interests 9.1 0.3% 7.0 0.3% +2.2 +30.9%

Revenues rise thanks to higher volumes of energy sold

Revenues for the first half of 2018 amounted to € 2,966.7 million, up € 212.7 million or 7.7% over the € 2,754.0 million recorded for the same period in 2017. This trend is due to change roughly € 57 million in higher trading activities, roughly € 120 million in higher revenues from gas and electricity sold owing to larger volumes sold and roughly € 52 million in higher system charges and volumes transmitted. Also note the higher revenues in the waste management area amounting to roughly € 15 million, in spite of the termination of waste services management for 13 municipalities in the Forlì area as of 1 January 2018, and higher revenues in the water service; the remaining changes in the Group’s scope of operations, i.e. the entry of Blu Ranton Srl and Verducci Servizi Srl and the transfer of Medea, contributed with roughly € 3 million overall. The fall in revenues that offset the growth described above was mainly due to lower revenues for electricity production, amounting to € 33 million.

For further details, see the analyses of each single business area.

Revenues (bn€)


Other operating revenues grew over the same period in the previous year by € 7.5 million or 3.7%. This growth is due to higher revenues from energy efficiency certificates amounting to € 7.9 million, on account of the higher price per unit, despite the lower revenues for changes in the scope of operations coming to roughly € 0.6 million.

Increase in costs for raw materials linked to higher revenues

Costs for raw and other materials rose by € 149.2 million over 30 June 2017, with a 12.7% increase; this growth, excluding the change in scope of operations amounting to roughly € 1.5 million, is due to a higher amount of trading, a rise in the price of commodities, larger volumes of gas and electricity sold and a higher cost per unit of energy efficiency certificates.

Other operating costs rose by € 54.4 million overall (€ 49.9 million in higher costs for services and € 4.5 million in higher operating expenses). Excluding the changes in scope of operations, which reduced costs by roughly € 2.5 million, mention must go to the higher costs for system charges and volumes transmitted amounting to roughly € 52 million, higher costs in ICT coming to roughly € 3.2 million and higher costs in commissions for energy agents amounting to roughly € 1.5 million.

0.2% decrease in personnel costs, due to changes in the scope of operations

Personnel costs fell by € 0.7 million or 0.2%. This decrease is linked to changes in the scope of operations, mainly involving the transfer of resources for collection in the Forlì area as mentioned above, whose impact came to € 2.0 million, and a lower average presence. These factors were partially offset by the increase in retribution foreseen by the National labour contract.

Capitalised costs at 30 June 2018 rose over the previous period by € 0.4 million or 2.2%, owing to a lesser amount of interventions on plants and work on assets belonging to the Group.

Ebitda settled at € 523.6 million, rising by € 17.7 million or 3.5% over June 2017. The good performance seen in almost all business areas was responsible for this growth in Ebitda. The gas area contributed more than any other to this increase, thanks to a result that grew by € 16.6 million, due to higher volumes sold and higher income for sales and trading operations. Positive results also came from waste management, the integrated water cycle and the other services area. The electricity area fell by € 7.6 million, owing to lower income in electricity production.

For further details, see the analyses of each single business area.

Ebitda (mn€)


Higher operating amortisation

Amortisation and provisions rose by € 6.3 million or 2.6%, going from € 243.7 during the previous year to € 250.0 million. Amortisations rose on account of new investments in operations, while provisions for doubtful debts dropped, in particular in the sales company Hera Comm Srl.

Ebit came to € 273.6 million at 30 June 2018, up € 11.4 million or 4.3% over the € 262.2 million seen at the same date in 2017.

Ebit (mn€)


Good performances in financial management

The results of financial management for the first half of 2018 came to € 39.2 million, improving by € 6.7 million or 14.6% over the same period in 2017. The good performances were due to efficiency in rates and higher income for default indemnities from safeguarded customers. In the first six months of 2018, compared to the same period in 2017, the Group furthermore benefitted from dividends paid by the investee company Veneta Sanitaria Finanza di Progetto amounting to roughly € 2.9 million.

Pre-tax profits grew by € 18.1 million, going from € 216.3 million at 30 June 2017 to € 234.4 million in the first half of 2018.

Income taxes for the first half of 2018, which came to € 72 million, defined a tax rate of 30.1%, with a clear improvement over the 31.6% seen one year earlier. The reason for this improvement lies mainly in the Group’s constant commitment towards grasping all benefits foreseen by law, in particular the incentives for large and extremely large amortisations, extended for 2018 by law 205/17, regarding investments in instrumental goods serving a technological and digital transformation along the lines of “Industry 4.0”, in addition to tax credits for research and development and the final balance on previously acquired benefits (patent box).

Net results rose by 9.7%, corresponding to € 14.4 million, going from € 148.0 million at 30 June 2017 to € 162.4 million at the same date in 2018.

The first half of 2018 was impacted by special financial items coming to € 4.8 million involved in the capital gain for the transfer of the company Medea.

+13.0% Net profits

Net profits thus rose by 13.0% or € 19.2 million, going from € 148.0 million in the first half of 2017 to € 167.2 million in the same period of 2018.

Net profits pertaining to the Group came to € 158.1 million, up € 17.2 million over the figure seen at 30 June 2017.

Net profits post minorities (mn€)

Utile netto post minorities


Close and back to the site

What follows in an analysis of trends in the Group’s net invested capital and sources of financing for the period ended 30 June 2018.

The Group’s solidity increases

Invested capital and sources of financing (mn€) June 18 Inc. % Dec 17 Inc. % Abs. Change % Change
Net non-current assets 5,828.2 109.1% 5,780.6 110.5% +47.6 +0.8%
Net working capital 84.2 1.6% 23.2 0.4% +61.0 +262.9%
(Provisions) (571.8) -10.7% (574.8) -11.0% +3.0 +0.5%
Net invested capital 5,340.6 100.0% 5,229.0 100.0% +111.6 +2.1%
Equity (2,715.6) 50.8% (2,706.0) 51.7% -9.6 -0.4%
Long-term borrowings (2,847.4) 53.3% (2,735.4) 52.3% -112.0 -4.1%
Net current financial debt 222.4 -4.2% 212.4 -4.1% +10.0 +4.7%
Net debt (2,625.0) 49.2% (2,523.0) 48.3% -102.0 -4.0%
Total sources of financing (5,340.6) -100.0% (5,229.0) 100.0% -111.6 -2.1%

At 30 June 2018, net invested capital (Nic) amounted to € 5,340.6 million, with a 2.1% increase over the € 5,229.0 million recorded in December 2017. This higher amount is mainly linked to the increase in net working capital ensuing from seasonal factors typical of the first six months of each year and the higher volumes of electricity and gas sold. The change in invested capital was also effected, albeit to a lesser degree, by the increase in net non-current assets due to the acquisition of holdings in Blu Ranton Srl and Sangroservizi Srl and the merger of Megas Net into the company Marche Multiservizi Spa.

Net invested capital (bn€)


Net investments rise by roughly € 26.0 million

In the first half of 2018, Group investments amounted to € 177.8 million, further benefitting from € 7.8 million in capital grants of which € 4.1 for FoNI investments as provided for by the national tariff method for the integrated water service, falling by € 11.0 million compared to the first half of the previous year. Including capital grants, overall investments came to € 185.6 million.

Net investments increased by € 26.0 million, going from € 151.8 million in June 2017 to € 177.8 million in the first half of 2018.

Total net investments (mn€)


Strong commitment continues to be seen in operating investments in plants and infrastructures

The following table shows a breakdown by sector, with separate mention of capital grants:

Total investments (mn€) June 18 June 17 Abs. Change % Change
Gas area 38.2 39.2 -1.0 -2.6%
Electricity area 10.0 10.5 -0.5 -4.8%
Integrated water cycle area 66.9 68.2 -1.3 -1.9%
Waste management area 31.1 20.9 +10.2 +48.8%
Other services area 7.6 8.7 -1.1 -12.6%
Headquarters 30.0 22.6 +7.4 +32.7%
Total operating investments 183.8 170.1 +13.7 +8.1%
Total financial investments 1.7 0.5 +1.2 +240.0%
Total gross investments 185.6 170.6 +15.0 +8.8%
Capital grants 7.8 18.8 -11.0 -58.5%
of which FoNI (New Investments Fund) 4.1 2.7 +1.4 +51.9%
Total net investments 177.8 151.8 +26.0 +17.1%

The Group’s operating investments, including capital grants, came to € 183.9 million, up 8.1% over the previous year, and mainly involved interventions on plants, networks and infrastructures, accompanied by regulatory upgrading involving above all gas distribution, with a large-scale substitution of metres, and the purification and sewerage areas.

Remarks on investments in each single area are included in the analysis by business area.

At Group headquarters, investments concerned interventions on corporate buildings, IT systems and the vehicle fleet, as well as laboratories and remote control structures.

€ 571.8 million in provisions

Overall, investments in structures increased by € 7.4 million compared to the same period in the previous year.

In the first six months of 2018, provisions amounted to € 571,8 million, with a slight drop compared to the end of the previous year. This change is due to a restatement, towards amortisation provisions, of roughly € 9.5 million, corresponding to the amount reserved for the third-party goods restoration fund linked to the networks owned by Megas Net, now acquired by Group company Marche Multiservizi Spa.

€ 2.7 billion in equity

Equity rose from € 2,706.0 million in 2017 to € 2,715.6 million at 30 June 2018, benefitting the Group’s financial structure. This change is a consequence of the positive result for the period, coming to € 167.2, which financed a € 150.4 million dividend payment.

Reconciliation between separate and consolidated financial statements

Balances as per Parent Company's separate financial statements 172.2 2,315.4
Excess of equity over the carrying amounts of Investments in consolidated companies (3.3) 108.5
Consolidation adjustments:
Measurement with the equity method of investments reported at cost in the seperate financial statements (3.6) (5.6)
Difference between purchase price and book value of portion of equity (3.2) 127.7
Elimination of intercompany transactions (4.0) (11.5)
TOTAL 158.1 2,534.5
Restoration of third-party assets 9.1 181.1


Close and back to the site

An analysis of net financial debt is shown in the following table:

A solid financial position

mn€ June 18 Dec 17
a Cash and cash equivalents 515.2 450.5
b Other current financial receivables 44.7 41.5
Current bank debt (239.7) (187.0)
Current part of bank borrowings (61.3) (55.3)
Other current financial liabilities (34.7) (35.3)
Finance lease payments maturing within 12 months (1.8) (2.0)
c Current financial debt (337.5) (279.6)
d=a+b+c Net current financial debt 222.4 212.4
Non-current bank debt and bonds issued (2,932.6) (2,825.3)
Other non-current financial liabilities (21.0) (21.4)
Finance lease payments maturing after 12 months (13.0) (13.9)
e Non-current financial debt (2,966.6) (2,860.6)
f=d+e Net financial position - Consob communication no. 15519/2006 (2,744.2) (2,648.3)
g Non-current financial receivables 119.2 125.2
h=f+g Net debt (2,625.0) (2,523.0)

The overall amount of net financial debt came to € 2,625.0 million. The Group’s financial structure at 30 June 2018 shows current debt coming to € 337,5 million, of which € 61.3 million in bank loans reaching maturity within the year and € 239.7 million in current bank debt. The latter mainly consists of usage of current credit lines, coming to roughly € 190 million, and accruals for passive interest on financing, coming to € 49.7 million. The amount of non-current bank debt rose over the previous year, following the use made in June of the EIB financing line stipulated at the beginning of the year. Medium- and long-term debt is largely made up of bonds issued on the European market and listed on the Luxembourg Stock Exchange (78.6% of the total), with repayment at maturity in a lump sum.
The total debt shows an average time to maturity of over seven years, with 63% maturing after more than five years.

Net financial debt went from € 2,523.0 million in 2017 to € 2,625.0 million in June 2018. Note that in June 2018 dividends were paid amounting to € 150.4 million.

Net financial debt (bn€)

Indebitamento finanziario netto


Close and back to the site

A multi-business strategy

An analysis of the results achieved by management in the various business areas in which the Group operates is provided below, including: the gas area, which covers services in natural gas and LPG distribution and sales, district heating and heat management; the electricity area, which covers services in electricity production, distribution and sales; the integrated water cycle area, which covers aqueduct, purification and sewerage services; the waste management area, which covers services in waste collection, treatment, recovery and disposal; the other services area, which covers services in public lighting and telecommunications, as well as other minor services.

The Group’s various areas contribute to its overall Ebitda in a balanced mix, reflecting its multi-business strategyntribuzione delle diverse aree del Gruppo al margine operativo lordo evidenzia un mix bilanciato e coerente con la strategia multibusiness

Ebitda june 2018

The Group’s income statements include corporate headquarter costs and account for intercompany transactions for at arm’s length.

The following analyses of the single business areas take into account all increased revenues and costs, having no impact on Ebitda, related to the application of IFRIC 12. The business areas affected by this accounting principle are: natural gas distribution services, electricity distribution services, all integrated water cycle services and public lighting services.

  • Gas
  • Electricity
  • Water cycle
  • Waste management
  • Other services

Ebitda grows

The first half of 2018 showed significant growth compared to the same period of the previous year, in terms of both Ebitda and volumes sold. This result was achieved thanks to the colder temperatures seen during the winter months, commercial development and higher income for distribution services.

MOL area gas

9.6% growth in Ebitda

The following table shows the changes occurred in terms of Ebitda:

(mn€) June 18 June 17 Abs. Change % Change
Area Ebitda 188.4 171.8 +16.6 +9.6%
Group Ebitda 523.6 505.9 +17.7 +3.5%
Percentage weight 36.0% 34.0% +2.0 p.p.

The number of gas customers rose by 26.8 thousand, or 1.9%, over the first half of 2017. The entry of the companies Blu Ranton Srl and Verducci Servizi Srl within the Group’s consolidate scope contributed with 19.8 thousand customers, while the remaining growth was created by marketing initiatives, and by maintaining and developing the customer base.

Clienti gas

Overall volumes of gas sold increased by 601.1 million m3 or 26.6%, going from 2,257.7 million m3 at June 2017 to 2,858.7 million m3 in the first half of 2018, a period in which degree days (*) rose by 7% compared to the previous period. Trading volumes showed growth coming to 518.1 million m3 (22.9% of total volumes) owing to greater activity abroad, in particular on the TTF. Volumes sold to end customers increased by 2.7% or 82.9 million m3 over the first half of 2017, thanks to the colder winter temperatures in 2018 and the increased customer base, amounting to roughly 69.0 million m3 and the contribution coming from the companies Blu Ranton Srl and Verducci Servizi Srl, amounting to roughly 13.9 million m3.

(*) This unit of measurement expresses the thermal demand of a given geographical area. High figures in degree days indicate average daily temperatures lower than the conventional reference temperature, set at 20° C.

Volumi venduti gas

The following table summarises operating results for the gas area:

Income statement (mn€) June 18 Inc. % June 17 Inc.% Abs. Change % Change
Revenues 1,128.8 937.9 +190.9 +20.4%
Operating costs (886.5) -78.5% (714.4) -76.2% +17.,1 +24.1%
Personnel costs (58.8) -5.2% (57.3) -6.1% +1.5 +2.6%
Capitalised costs 4.7 0.4% 5.6 0.6% -0.9 -16.0%
Ebitda 188.4 16.7% 171.8 18.3% +16.6 +9.6%

Revenues went from € 937.9 million in June 2017 to € 1,128.8 million in 30 June 2018, with a growth of € 190.9 million or 20.4%. The main reasons for this growth include higher revenues from trading amounting to roughly € 128 million, owing to the higher price of the raw material gas, accounting for roughly € 23 million, the higher volumes of gas sold, coming to € 28 million, and the acquisitions of Blu Ranton Srl and Verducci Servizi Srl, accounting for roughly € 7.6 million. Revenues for energy efficiency certificates also rose, due to the increase in market prices, coming to roughly € 12.4 million, and the revenues from the foreign companies operating in Bulgaria, thanks to increasing commercial development, amounting to € 2.3 million. This growth was limited by lower revenues for the transfer of the company Medea amounting to € 4.9 million, and lower revenues for system charges coming to € 5.7 million.

Ricavi gas

The growth in revenues was reflected by an even higher increase in operating costs, which went from € 714.4 million in June 2017 to € 886.5 million in the same period in 2018, thus showing an overall growth of € 172.1 million. This trend is mainly due to the higher amount of trading, higher volumes sold, the higher cost of raw materials and the higher cost per unit of energy efficiency certificates.

Ebitda rose by € 16.6 million or 9.3%, going from € 171.8 million in the first half of 2017 to € 188.4 million at 30 June 2018, thanks to higher volumes and income in sales and trading activities, higher income in Bulgaria and higher incentives for safety in gas distribution networks.


In the first half of 2018, net investments in the gas area amounted to € 38.2 million, falling by € 1.0 million compared to the same period in the previous year. A € 1.5 million increase was seen gas distribution, mainly due to higher non-recurring maintenance on networks and plants, while requests for new connections dropped slightly compared to the first half of the previous year.

Investments fell by € 2.4 million in district heating and heat management, mainly as an effect of the significant work done on the Barca district heating plant in Bologna the previous year. New connections for district heating were equivalent to those seen in the same period of the previous year.

Investments gas

Details of operating investments in the Gas Area are as follows:

Gas (mn€) June 18 June 17 Abs. Change % Change
Networks and plants 33.0 31.5 +1.5 +4.8%
DH/Heat management 5.2 7.6 -2.4 -31.6%
Total gas gross 38.2 39.2 -1.0 -2.6%
Capital grants 0.0 0.0 +0.0 +0.0%
Total gas net 38.2 39.2 -1.0 -2.6%

Ebitda grows

Ebitda for the electricity area decreased compared to the previous year, for reasons including the maintenance phase of a power plant held by the Group.

electricity area ebitda

-8.3% Ebitda falls

The following table shows the changes occurred in terms of Ebitda:

(mn€) June 18 June 17 Abs. Change % Change
Area Ebitda 84.0 91.6 -7.6 -8.3%
Group Ebitda 523.6 505.9 +17.7 +3.5%
Percentage weight 16.0% 18.1% -2.1 p.p.

The number of electricity customers shows 1.0 million supply points, rising by 8.9% (82.8 thousand) compared to the first half of 2017. This significant increase was due to both free market activities, amounting to 10.5% of the total as a result of the reinforced marketing operations introduced, in particular in regions of central Italy, and an enlargement of the customer base achieved thanks to the new protected customers in the Municipality of Gorizia, coming to roughly 13 thousand customers.

Customer electricity

Volumes of electricity sold went from 4,805.9 GWh at 30 June 2017 to 5,866.5 GWh at 30 June 2018, with an overall increase amounting to 22.1% or 1,060.6 GWh. The volumes sold on the free market accounted for 16.2% of this growth, with the remaining 5.8% consisting in safeguarded volumes.

volumes sold electricity

Ebitda falls by € 7.6 million

The following table summarises operating results for the area:

Income statement (mn€) June 18 Inc. % June 17 Inc.% Abs. Change % Change
Revenues 1,184.2 1,147.6 +36.6 +3.2%
Operating costs (1,083.4) -91.5% (1,039.0) -90.5% +44.4 +4.3%
Personnel costs (22.4) -1.9% (22.5) -2.0% -0.1 -0.4%
Capitalised costs 5.5 0.5% 5.5 0.5% +0.0 +0.0%
Ebitda 84.0 7.1% 91.6 8.0% -7.6 -8.3%

Revenues rose by 3.2%, going from € 1,147.6 million in June 2017 to € 1,184.2 million in the same period in 2018. The main reasons underlying this growth are the increase in volumes sold, which created higher revenues amounting to roughly € 93 million, and higher revenues for transmission outside the grid and system charges, coming to € 61 million with no change in costs, and higher revenues for the regulated distribution service. Partially offsetting this trend, mention must go to lower revenues in trading amounting to roughly € 70 million, a lower price of raw materials coming to roughly € 11 million and lower revenues for electricity production amounting to roughly € 32 million, mainly owing to maintenance on the previously discussed Teverola plant.

Revenues electricity

The increase in revenues was proportionally reflected by a rise in operating costs, which went from € 1,039.2 million in the first half of 2017 to € 1,083.4 million in the same period in 2018, thus showing an overall increase of € 44.4 million. This trend is mainly due to the higher volumes sold and the higher system charges, in spite of the lower price of raw materials and the lower amount of electricity production.

At 30 June 2018, Ebitda dropped by € 7.6 million or 8.3%, going from € 91.6 million in 2017 to € 84.0 million in 2018, owing to lower income from electricity production as explained above, despite the higher income from volumes sold in the safeguarded market and higher revenues from distribution services.

Ebitda electricity

Investments made in the electricity area during the first half of 2018 amounted to € 10.0 million, with a slight drop compared to the € 10.5 million seen during the first half of the previous year.
The interventions mainly concerned non-recurring maintenance on plants and distribution networks in the Modena, Imola, Trieste and Gorizia areas.
Compared to the first half of the previous year, a lower amount of network extension interventions and lesser non-recurring maintenance on plants and networks were seen.
Requests for new connections fell compared to June 2017.

net investments electricity

Details of operating investments in the electricity area are as follows:

Electricity (mn€) June 18 June 17 Abs. Change % Change
Networks and plants 10.0 10.5 -0.5 -4.8%
Total electricity gross 10.0 10.5 -0.5 -4.8%
Capital grants 0.0 0.0 +0.0 +0.0%
Total electricity net 10.0 10.5 -0.5 -4.8%


Growing results in the first half of 2018

In the first half of 2018, the integrated water cycle area recorded a € 1.5 million increase in Ebitda, corresponding to 1.3%. As regards regulations, note that 2018 is the third year in which the tariffary method defined by the Authority for the period 2016-2019 (resolution 664/2015) is applied, and that for both 2018 and 2017 the revenue covering the underlying cost of amortisation related to investments made is recognized on an accrual basis.

water cycle ebitda

+1.3%: Mol rises

The following table shows the changes occurred in terms of Ebitda:

(mn€) June 18 June 17 Abs. Change % Change
Area Ebitda 112.8 111.3 +1.5 +1.3%
Group Ebitda 523.6 505.9 +17.7 +3.5%
Percentage weight 21.5% 22.0% -0.5 p.p.

The number of water customers settled at 1.5 million, rising by 5.0 thousand or 0.3% over the first half of 2017, confirming the moderate trend towards organic growth in the areas served by the Group, mainly in the Emilia-Romagna region managed by Hera Spa.

Customer water

142.8 million m3 managed in the aqueduct

The main quantitative indicators of the area are as follows:

Quantity managed water

The volumes dispensed through the aqueduct showed a 3.9 million m3 or 2.6% drop, mainly linked to seasonal variations seen in the first six months of 2018, consisting in a larger amount of rainfall and snowfall than occurred in the same period of the previous year. Furthermore, decreases were seen in the amount managed in sewerage (roughly 0.8%) and purification (roughly 0.7%) compared to the quantities recorded in June 2017. Volumes dispensed, following the Authority’s resolution 664/2015, are an indicator of activity in the areas in which the Group operates and are subject to equalisation owing to legislation that calls for regulated revenues to be recognised independently from volumes distributed.

An overview of operating results for the water area is provided in the table below:

Income statement (mn€) June 18 Inc. % June 17 Inc.% Abs. Change % Change
Revenues 412.3 406.8 +5.5 +1.4%
Operating costs (212.8) -51.6% (208.2) -51.2% +4.6 +2.2%
Personnel costs (89.5) -21.7% (90.0) -22.1% (0.5) (0.6%)
Capitalised costs 2.9 0.7% 2.6 0.6% +0.3 +11.4%
Ebitda 112.8 27.4% 111.3 27.4% +1.5 +1.3%

Revenues in the water cycle area showed a € 5.5 million or 1.4% increase. This result is due to higher revenues for dispensing amounting to roughly € 2.0 million, as an overall effect of the tariffs established by the Authority for 2016-2019 and the recognition of bonuses for contract quality, ensuing from a commitment towards improving standards compared to those set by the Authority. Furthermore, higher revenues were seen involving subcontracted works and Ifric12 carried out during the first half of 2018, amounting to roughly € 5.0 million. This growth was only partially offset by a drop in other revenues, including roughly € 0.5 million due to a lower amount of new connections.

Revenues water

Operating costs increased by € 4.6 million or 2.2% overall. Note the higher costs for subcontracted works and Ifric12 amounting to € 5.0 million overall and higher costs due to a rise in the price of both electricity and the raw material water, coming to roughly € 1.0 million. These factors were partially offset by roughly € 1.3 million in lower operating costs for network and plant management.

Ebitda grew by € 1.5 million or 1.3%, going from € 111.3 million in June 2017 to € 112.8 million in 2018, mainly due to higher revenues from dispensing.

Ebitda water

Net investments in the integrated water cycle area amounted to € 59.1 million in the first half of 2018, up € 9.6 million over the same period in the previous year. Including the amount of capital grants received, which fell by € 11.0 million, investments made decreased by € 1.3 million and came to € 66.9 million compared to the € 68.2 million seen in the first half of the previous year.

Investments mainly involved extensions, reclamations and network and plant upgrading, in addition to regulatory upgrades involving above all purification and sewerage.

Investments were made for a total of € 33.2 million in the aqueduct, € 22.6 million in sewerage and € 11.2 million in purification.

Net investments water

The more significant works include: in the aqueduct, upgrading interconnections in the Modena area water system, interventions aimed at upgrading hanging reservoir areas and higher programmed maintenance in the Padua and Trieste areas; in sewerage, continued progress was made in the important works for the Rimini Seawater Protection Plan, in addition to redevelopment of the sewerage network in other areas; in purification, the lower investments made compared to the previous year were due to the significant work done in upgrading the Servola purifier in the area served by the AcegasApsAmga Group, carried out during the previous year.
Requests for new water and sewerage connections remained stable.
Capital grants amounting to € 7.8 million included € 4.1 million deriving from the tariff component called for by the New Investments Fund (FoNI) tariffary method and fell by € 11.0 million compared to the previous year, mainly due to the portion concerning work done on the Servola purifier.

Significant operating investments made in the aqueduct, sewerage and purification

Details of operating investments in the integrated water cycle area are as follows:

Integrated water cycle (mn€) June 18 June 17 Abs. Change % Change
Aqueduct 33.2 27.8 +5.4 +19.4%
Purification 11.2 23.2 -12.0 -51.7%
Sewerage 22.6 17.3 +5.3 +30.6%
Total integrated water cycle gross 66.9 68.2 -1.3 -1.9%
Capital grants 7.8 18.8 -11.0 -58.5%
of which FoNI (New Investments Fund) 4.1 2.7 +1.4 +51.9%
Total integrated water cycle net 59.1 49.5 +9.6 +19.4%

Ebitda increases

In June 2018 the waste management area accounted for 24.0% of Group Ebitda, with an area Ebitda increasing over the first half of 2017. As regards waste treatment, the initiatives pursued were aimed at recovering material and increasing energy efficiency, in particular launching the Sant’Agata Bolognese biomethane production plant and proceeding with the full activity and growth of Aliplast, which represents the key element able to bring circular economy to completion. Attention towards a sustainable and efficient development of the entire path followed by waste in the areas served by the Group was confirmed by figures including a higher level of sorted waste, which settled at 59.8%, as will be discussed below. Lastly, the first half of 2018 saw a confirmation of the Group’s commitment to reinforcing its position as market leader through both developing precise and focused marketing initiatives intended to broaden its customer portfolio and by maintaining a continuous presence in calls for tenders.

waste management

+3.8% growth in Ebitda

The following table shows the changes occurred in terms of Ebitda:

(mn€) June 18 June 17 Abs. Change % Change
Area Ebitda 125.9 121.3 +4.6 +3.8%
Group Ebitda 523.6 505.9 +17.7 +3.5%
Percentage weight 24.0% 24.0% +0.0 p.p.

Commercial waste +3.6%

Volumes marketed and treated by the Group in the first half of 2018 are as follows:

Quantitative data (mgl/t) June 18 June 17 Abs. Change % Change
Municipal waste 1,120.2 1,131.2 -11.0 -1.0%
Commercial waste 1,177.5 1,136.6 +40.9 +3.6%
Waste marketed 2,297.6 2,267.9 +29.7 +1.3%
Plant by-products 1,560.9 1,303.0 +257.9 +19.8%
Waste treated by type 3,858.6 3,570.8 +287.8 +8.1%

As of 2018, municipal waste also includes some types of waste previously classified as commercial waste. The data for municipal and commercial waste in the first half of 2017 has been restated so as to reflect the classification used for the current year.

An analysis of the volumes treated shows a 1.3% growth in waste marketed, mainly due to a rise in commercial waste coming to 3.6%, offsetting the slight drop in municipal waste. The increase in volumes of commercial waste is a result of a rise in intermediation operations.

Municipal waste fell slightly, while plant by-products rose thanks to an increased production of leachate in landfills due to the higher amount of rainfall seen in the first half of 2018 compared to the same period in 2017.

Sorted urban waste showed further progress, going from 57.6% in the first half of 2017 to 59.8% in the same period of the current year. In June 2018, sorted waste increased by 1.7% in areas served by Hera Spa and by 11.4% in areas served by Marche Multiservizi Spa, while in the Triveneto region growth settled at 1.0%.

sorted waste

Decrease in the use of landfills

waste disposed

Quantitative data (k/t) June 18 June 17 Abs. Change % Change
Landfills 353.0 414.3 -61.3 -14.8%
Waste-to-energy plants 662.4 653.5 +8.9 +1.4%
Selecting plants and other 240.3 218.9 +21.4 +9.8%
Composting and stabilisation plants 158.9 192.8 -33.9 -17.6%
Inertia and chemical-physical plants 696.8 613.6 +83.2 +13.6%
Other plants 1,747.3 1,477.6 +269.7 +18.3%
Waste treated by plant 3,858.6 3,570.8 +287.8 +8.1%

The Hera Group operates in the entire waste cycle, with 89 plants used for municipal and special waste treatment and disposal and plastic material regeneration. The most important of these include: 10 waste to energy plants, 11 composters/digesters and 15 selecting plants.

Waste treatment showed growth coming to 8.1% over the first half of 2017. Note in particular the lower quantity disposed of in landfills, while in the chain of waste to energy plants the quantity treated was essentially in line with the previous year, showing a slight 1.4% increase. The increased quantity in selecting plants is due to the higher quantity treated, mainly in the Castiglione delle Stiviere plant. The lower quantity in composting and stabilisation plants is mainly due to planned maintenance in some plants for regulatory upgrading. The higher quantity in stabilisation and chemical-physical plants can be traced to the increase in leachate in landfills due to a rise in the amount of rainfall. Lastly, subcontracted and other plants benefitted from the higher quantities treated by Waste Recycling and from an increase in by-products treated in subcontracted plants.

Ebitda rises

The table below summarises the area’s operating results:

Income statement (mn€) June 18 Inc. % June 17 Inc.% Abs. Change % Change
Revenues 561.4 546.4 +15.0 +2.7%
Operating costs (338.6) -60.3% (325.5) -59.6% +13.1 +4.0%
Personnel costs (100.9) -18.0% (102.5) -18.8% -1.6 -1.6%
Capitalised costs 3.9 0.7% 2.9 0.5% +1.0 +34.2%
Ebitda 125.9 22.4% 121.3 22.2% +4.6 +3.8%

Revenues in June 2018 rose by 2.7% or € 15.0 million, going from € 546.4 million at 30 June 2017 to € 561.4 million at the same date in 2018. This change is due to the positive trend seen in the price of special waste and an expansion of the industrial customer portfolio, which offset the fall in volumes treated, the lower revenues from electricity production and the termination of municipal waste services in 13 Forlì-area Municipalities as of 1 January 2018.


Operating costs rose by 4.0% or € 13.1 million in 2018, going from € 325.5 million at 30 June 2017 to € 338.6 million at the same date in 2018. This change is due to higher costs in the waste treatment business due to a development of upgrading activities and subcontracting by-products, and in municipal waste to developing new projects for sorted waste. The change was offset by lower costs for services and maintenance of Wte plants and lower costs tied to the aforementioned Forlì area.

The cost of personnel, not including the transfer of resources for collection in the Forlì area, as mentioned above, dropped slightly by 0.6%.

Ebitda went from € 121.3 million in the first half of 2017 to € 125.9 million in the same period in 2018, showing growth amounting to € 4.6 million or 3.8%. This change was sustained by higher prices for special waste treatment, which proved able to more than offset the slight fall seen in prices/incentives for electricity and the exclusion of Forlì from the scope of collection and sweeping activities.


Net investments in the waste management area concerned plant maintenance and upgrading and amounted to € 31.1 million, up € 10.2 million over the first half of the previous year.
The composter/digester sector showed a sharp increase in investments amounting to € 9.7 million, mainly due to interventions on the Sant’Agata Bolognese composter involved in creating the biomethane plant.
The decrease in investments in landfills, coming to € 0.7 million, is mainly due to the work done in 2017 towards creating the 9th sector of the Ravenna landfill, compared to new interventions on the Cordenons plant and others with a lower overall value.
The Wte plants sector saw a € 0.9 million increase, mainly due to work done on the Padua plant, which was not entirely offset by the less significant interventions on the Pozzilli, Rimini and Modena plants.
Increased investments in the Special waste plants sector were due to maintenance interventions on the Ravenna plants.
The ecological islands and collection equipment sector showed higher investments coming to € 1.0 million, mainly in the areas served by Hera Spa, while the € 1.1 million decrease in the selection and recovery sector is largely explained by lower investments in the Aliplast Group, due to the significant interventions carried out the previous year on the company Alimpet Srl’s Pet line, not entirely offset by higher investments made in the same sector of the company Waste Recycling Spa.

Net investments waste management

Operating investments increase

Details of operating investments in the waste management area are as follows:

Waste management (mn€) June 18 June 17 Abs. Change % Change
Composting/digestors 13.0 3.3 +9.7 +293.9%
Landfills 3.5 4.2 -0.7 -16.7%
WTE 4.4 3.5 +0.9 +25.7%
RS Plants 1.0 0.7 +0.3 +42.9%
Ecological areas and gathering equipment 3.1 2.1 +1.0 +47.6%
Transshipment, selection and other plants 6.1 7.2 -1.1 -15.3%
Total Waste management gross 31.1 20.9 +10.2 +48.8%
Capital grants 0.0 0.0 +0.0 +0.0%
Total Waste management net 31.1 20.9 +10.2 +48.8%

Ebitda rises

The other services area brings together all minor businesses managed by the Group, including public lighting, telecommunications and cemetery services. In the first six months of 2018, this area’s results increased by 27.3% over the previous year, with Ebitda indeed going from € 9.9 million in the first half of 2017 to € 12.6 million in the same period of 2018.

Other services Ebitda

The changes occurred in terms of Ebitda are as follows:

(mn€) June 18 June 17 Abs. Change % Change
Area Ebitda 12.6 9.9 +2.7 +27.3%
Group Ebitda 523.6 505.9 +17.7 +3.5%
Percentage weight 2.4% 2.0% +0.4 p.p.

526,8 thousand lighting points

The following table shows the area’s main indicators as regards public lighting services:

Quantitative data June 18 June 17 Abs. Change % Change
Public lighting
Lighting points (k) 526.8 509.6 +17.2 +3.4%
of which led 13.5% 7.2% +6.3 p.p.
Municipalities served 166.0 162.0 +4.0 +2.5%

An analysis of the data regarding public lighting shows a growth of 17.2 thousand lighting points and an increase of 4 municipalities served. During the first six months of 2018, The Hera Group acquired roughly 26 thousand lighting points in 9 new municipalities. The most significant of these were: roughly 6 thousand lighting points in Abruzzo, roughly 3 thousand lighting points in Lazio, roughly 9 thousand lighting points in the Triveneto region, mainly in the provinces of Udine and Venice, and more lighting points managed in the municipalities already served. The increases seen during the year more than offset the loss of roughly 9 thousand lighting points and 5 municipalities managed, mainly in the provinces of Forlì and Padua. The percentage of lighting points that use led light bulbs also increased, settling at the end of the first six months of 2018 at 13.5%, up 6.3%. This change reflects the constant attention shown by the Group towards an increasingly efficient and sustainable management of public lighting.

Area grows

The area’s operating results are provided in the table below:

Income statement (mn€) June 18 Inc. % June 17 Inc.% Abs. Change % Change
Revenues 67.7 63.3 +4.4 +7.0%
Operating costs (46.2) -68.2% (44.4) -70.2% +1.8 +4.1%
Personnel costs (10.2) -15.0% (10.2) -16.1% +0.0 +0.0%
Capitalised costs 1.2 1.8% 1.2 1.9% +0.0 +0.0%
Ebitda 12.6 18.6% 9.9 15.6% +2.7 +27.3%

Area revenues increased over June 2017 by € 4.4 million, going from € 63.3 million to € 67.7 million in June 2018. This growth is due to the positive contribution coming from both public lighting, whose revenues increased by roughly € 2.0 million due to the good result of participation in public tenders, and telecommunications, whose revenues rose thanks to a higher amount of external commercial collaborations and the contribution coming from the digitalisation and innovation processes implemented by the Hera Group.

Revenues other services

Ebitda showed a € 2.7 million increase over the first half of 2017. This change was due to higher income from public lighting and telecommunications services.

Ebitda other services

Investments in the other services area came to € 7.6 million, falling by € 1.1 million compared to the same period in the previous year.
Investments coming to € 4.3 million were made in telecommunications, involving networks and Tlc and Idc (Internet data centre) services, down € 0.7 million compared to the first half of 2017, while the € 3.3 million of investments in the public lighting service concerned maintenance, upgrading and modernising lampposts in the areas served, showing a € 0.4 million decrease.

Net investments other services

Details of operating investments in the other services area are as follows

Other Services (mn€) June 18 June 17 Abs. Change % Change
Tlc 4.3 5.0 -0.7 -14.0%
Public lighting and traffic lights 3.3 3.7 -0.4 -10.8%
Total Other services gross 7.6 8.7 -1.1 -12.6%
Capital grants 0.0 0.0 +0.0 +0.0%
Total Other services net 7.6 8.7 -1.1 -12.6%


Close and back to the site

Natural gas consumption decreases:-1.5%

As regards gas, in the first six months of the year total consumption decreased by 1.5% as compared to the same period of 2017, with an increase in the absolute value of over 600 Gmc. This drop is mainly due to the consumption of gas for the production of electricity: in the first six months of 2018 thermoelectric consumption decreased by 13.5% as compared to the first six months of 2017 and in absolute value corresponds to a reduction of approximately 1,600 Gmc. In contrast, industrial consumption does not display significant changes as compared to the first six months of 2017. In addition, as far as residential consumption is concerned, climate change has led to an increase in consumption in the first six months of 2018, an increase of approximately 1,000 Gmc as compared to the same period of the previous year, corresponding to 5.4%.

Portfolio optimization

The weather pattern of the first half of the year obviously had an impact on the Group's sales with a significant contraction in January, followed by an increase in February and March.
The trading activities of the first half of the year were directed at optimizing the portfolio, on one hand, with the aim of balancing the position on the short term, and on the other hand at negotiating and managing new procurement contracts for the 2018/2019 thermal year.

In detail, short-term adjustments, guided by the efficient forecasting of the needs, have been implemented through purchase or sale adjustments at the Virtual Exchange Point (Psv), the Virtual Trading Point (Austrian Vtp), the Title transfer facility (Dutch Ttf) and Net connect Germany (German Ncg). These operations generally took place on favorable terms and allowed the Group to achieve the established objectives in terms of results.

Since April 2018, Hera Trading has initiated the procurement of both gas earmarked to fill the store purchased by auction, approximately 0.48 billion cubic meters, and gas earmarked for the Hera Comm free market for the 2018/2019 thermal year, approximately 1.1 billion cubic meters, drawing directly on the spot market; This activity is still ongoing as of June 30.

Negotiation of modulated gas for approximately 1.0 billion cubic meters

During March, the modulated gas for the protected market on REMIs (delivery points) of the Group Sales Companies was negotiated, for a total of approximately 1.0 billion cubic meters for the 2018/19 thermal year. The volumes under contract display a decrease as compared to the supply contracts with third-party suppliers in the previous thermal year. The price indexes of the supplies are in line with the economic rates offered to the final customers, thus constituting a natural hedge against the price risk.

Electricity consumption on the rise:+2.4%

The electricity demand in the first half of 2018 showed an increase as compared to the same period of the previous year, rising by 2.4%. Regarding electricity production, the first half of the year showed an increase in both wind and hydroelectric production, with increases of 8.4% (+0.75 TWh) and 41.1% (+7.5 TWh) respectively. This increase was counterbalanced by lower thermoelectric production, recording a significant decrease of -10.4% (-8.8 TWh), a lower photovoltaic power output of 1.28 TWh equal to -12.7%. The energy inflow from abroad was positive, with net imports increasing by 5.36 TWh, or 23.6%.

Reform of the electrical market

Regarding the prices of the electricity market, the first half of 2018 showed a significant increase: the NSP monthly average was € 53.84 / MWh while in the corresponding period of 2017 the NSP was 51.17 € / MWh. This trend is mainly due to the increased in the price of gas, leading to an increase in marginal costs of production from thermoelectric plants.

During the first half of the year, Terna initiated the procurement of dispatch resources for the entities holding virtual consumption units in the Dispatching Services Market for the period June-September 2018.
Hera Trading, in its role as an aggregator, was awarded power totaling 3 MW for the period June-September 2018 and additional 2 MW for the period July-September 2018.
Moreover, on 19 June 2018, Terna submitted for consultation the documentation on the pilot project for participation in the dispatching services market of the Mixed Virtual Units (Uvam) pursuant to Resolution 300/2017/R/eel of the Regulatory Authority for Energy, Networks and the Environment.

Electricity trading performance

Regarding the trading of electricity and environmental certificates, in the first half of the year performance improvements were achieved both in terms of EBTDA and in terms of average value of the import capacity held in comparison to the corresponding period of 2017. Particular attention has been given to the management / optimization of Hera Comm's purchasing portfolio through operations on the Italian Stock Exchange and Over the Counter (Otc) platforms.

Price risk management

The management of the commodity and exchange risk has proved to be particularly effective in a context characterized by the sharp volatility of oil prices and the euro-dollar exchange rate as well.


Close and back to the site

The utility sector and the Authority: rationalising the industry and liberalising the market

According to the latest Top Utility report drafted by Althesys, the public utilities sector plays a leading role within the Italian economy, accounting for approximately 7% of the country’s Gross domestic product (GDP). This result, however, is reached through levels of service and efficiency that differ greatly across the country on account of the high level of fragmentation among operators. The most recent census, carried out by the government in 2014, counted no less than 1,500 of the latter, a figure which is quite distant from the standards seen in other European Union countries. With the goal of improving the efficiency and transparency seen in these services, the government and the national Authority have therefore pursued actions aimed at rationalising the sector.

In gas distribution, for example, tenders for renewing grants are foreseen within the next five years across the entire country. These competitive procedures have been designed to promote greater consolidation among operators, while at the same time favouring the more efficient ones and those able to sustain wide-reaching investment plans. The areas concerned by the tenders have in fact been geographically widened, now covering provinces instead of municipalities, as was previously the case. It follows that, according to estimates made by sector professionals, a reduction should be seen in the number of companies, from over two hundred to twenty or thirty.

In late 2017, the government also established that regulations for the waste management sector were to pass over to the Authority for electricity, gas and the water service, which was thus renamed as the Regulatory authority for energy, networks and the environment (Arera, Autorità di regolazione per energia reti e ambiente). With this reform, the executive branch expects a higher degree of uniformity to be reached in tariffs and service quality nationwide, for example by defining the mechanisms used in tenders for granting concessions for street cleaning and urban waste collection. Thanks to this change, similar to the one introduced for water services, the government aims at achieving, over the medium term, a rationalisation of this sector, which is currently the only one lacking modern and rational regulations.
In liberalised businesses, the government’s objective is to promote a higher level of market competition, to the advantage of end consumers. To this intent, a prediction for the complete liberalisation of the electricity market as of 1 July 2019 was included in the 2017 Competition Bill. At present, roughly 20 million users have not yet chosen a free market energy supplier. Launching this process thus represents an opportunity to stimulate competition and give space to companies with the best service levels and the largest scale economies.

Hera’s model of aggregation

In this context, marked in all sectors by various factors encouraging the consolidation of smaller businesses, Hera operates with a development model that is geared towards making the most of scale economies and synergies (internal growth) and expanding the geographical extent of its own operations (external growth), by integrating sector enterprises. Since its establishment, 25 companies in bordering regions have been merged, allowing Hera to achieve nationally significant market positions and quintuple its Ebitda. This process has been favoured among other things by an amply diversified corporate structure that entrusts the Group’s management to a governance inspired by an industrial and managerial type of rationale.

Hera grows in more than one direction

The results for the first half of 2018 also bear the mark of this strategic approach. In the energy sales business, Hera Comm Srl, the Group’s trading company, completed its acquisition of a Blu Ranton Srl, a gas and electricity sales company operating in the Marche and Abruzzo regions with roughly 17,000 customers. Thanks to this transaction, which follows up on others completed over the last three years (Verducci Servizi Srl, Alento Gas Srl, Julia Servizi Più Srl, Fucino Gas Srl and Gran Sasso Srl), the Group is now the one of the foremost operators in these regions, with approximately 225,000 customers. In the same period, a customer portfolio was purchased from Eni in the province of Gorizia, where the group already provides gas and electricity distribution services.

Internal growth was pursued as usual, by extracting efficiencies and synergies from the businesses managed, in line with the track record seen over the last five years, during which roughly 90 million euro in accumulated savings were recorded. This result was partially obtained thanks to the development of a few innovative projects, such as satellite searches for leakage in the water network or the digitalisation of the process of urban waste collection (HergoAmbiente project). Continued growth was furthermore seen in free markets, where a wider customer base was obtained through commercial actions and an enlargement of the regions involved in last resort services. 2018 is in fact the second year of the two-year grants in safeguarded electricity and default gas services, which the Group had been awarded in late 2016, gaining national co-leadership.

The Group’s growth strategy, effectively and continuously pursued in the first half of 2018 as well, maintained a perfect balance between regulated and liberalised activities in its core businesses. This balanced portfolio mix heralds the sustained presence of a high risk diversification.

The new business plan to 2021

In early January 2018 the new business plan to 2021 was presented, the fifteenth since the Group’s establishment, geared towards further growth. Thanks to a macroeconomic scenario expected to improve and the development opportunities offered by the rationalisation of the sector, Ebitda is expected to grow by 218 million euro, reaching in 2021 the target of 1.135 billion euro, higher than the one set down in the previous plan. Relying on the Group’s current market position and the availability of accumulated financial resources, growth will also be fuelled by an ambitious investment program coming to roughly 2.9 billion euro, with a sharp acceleration (+62%) compared to the investments made in the last five years. The Group’s strategy, indeed, calls for an efficient allocation of capital, fully financed by cash generation and largely dedicated to networks, which will allow the Group to conserve its current low risk profile.

The objective of maintaining financial solidity was also confirmed, with a target of a 2.9 net debt to Ebitda ratio. The 17% increase in dividends per share, to be implemented progressively until 2021, in any case leaves ample room with which to finance any possible opportunities for future growth.

Confirming the content of the previous business plan, this strategy will be supported by the usual five development levers: growth, efficiency, innovation, excellence and agility. This orientation, which has already proven its validity in recent years, is at the root of all projects envisaged for the next four years, which match the main directions in which the sector is evolving: circular economy, utility 4.0 and customer experience.

Circular economy

The strategy through to 2021 also proves to be in line with the idea of a circular economy, pushing sustainable management beyond simply reusing and recycling materials coming from sorted waste. The Group, that in this area has already reached the targets set by supranational organisations (EU and UN) well ahead of time, will take a decisive step in the upcoming five-year period and become able to directly produce goods that can be relocated on the market, through the use of recycled materials.

Utility 4.0

The Group furthermore intends to move towards utility 4.0, through the use of digital technologies in all its business areas. Smart networks, big data analysis and the internet of things indeed represent opportunities to have the processes and infrastructures managed more efficient and concretely contribute to a smart development of the cities served.

Customer experience

A great deal of attention is also expected to be given to customer experience and all related activities, which lead customer relations management tools to evolve. The target is an ever-increasing capacity and speed in big data analysis in order to provide a structure for strategies aimed at improving the quality of the services offered, as well as to define the marketing offers that best meet customer requests.

Creation of shared value

The plan presents targets and projects that the Group wishes to pursue in a sustainable way, creating value for all stakeholders. The first to do so in Italy, in 2017 Hera reported its creation of shared value (Csv). This indicator calculates the Group’s EBITDA deriving from activities in line with the global objectives set out in the UN Agenda and, more specifically, those that meet the call to action of 10 of the 17 points presented, i.e.: efficient use of resources, intelligent use of resources, innovation and territorial development. In the previous financial year (2016), Csv accounted for roughly 30% of Group Ebitda, and this amount is expected to rise to 40% in 2021, considering that two thirds of the growth foreseen in the plan is related to projects aligned with the UN’s Global Agenda.


Close and back to the site

In the first half of 2018, Bureau Veritas Italia, the new certification body that won the public tender for providing services to the Group, began auditing within the Hera Group. In particular, the renewal audits of the ISO 9001, ISO 14001 and OHSAS 18001 certificates and maintenance of Hera Spa's certification of compliance with the SA8000 standard were successfully completed. A significant amount of coordination of third party audits for Group certifications was seen.

Management’s commitment to coordinating the approach to transversal issues impacting management systems continued through monthly meetings with the various Group companies.

In particular, the "Group Review" project is underway with the aim of providing an overview of the management systems of Hera Spa and its subsidiaries and contributing to governance and the definition of risk management strategies in the area of health, safety and the environment.

In the area of health and safety, work was completed on the Group's health surveillance tender, with the aim of awarding this contract by the end of July. Following an assessment of the effectiveness of the management of individual safety devices/personal protective equipment, a working group was coordinated to formulate measures to improve the service. The first half of the year also saw the launch of the "Health and Safety: Culture and Awareness" project which, through Heureka+, pursued initiatives among Group employees to disseminate and promote the culture and awareness of workplace health and safety in their daily lives.

In the management of privacy and logical security, a synergy of methods and approaches has been enhanced with a view to sharing analyses on information security and the protection of personal data within the Group.

Requests for consultancy and specialised legal support were managed by drawing up the specific, in-depth regulations and documentation which are necessary to guarantee compliance with the privacy-side regulations governing the Group's processes, also as regards the execution of Service contracts.

The Group's compliance with General Data Protection Regulation 679/2016 was handled through an interdisciplinary project that impacted organizational aspects and entailed a thorough review of the Group's entire documentation system, with the aim of documenting compliance with the personal data protection provisions of the law starting from the outset, that is, the phase of designing and planning processing operations, establishing the methods, guarantees and limits of personal data processing.

Specific refresher training courses have been planned regarding the main new regulations and the role played by the heads of the organisational units responsible for data processing, activities in which the Group will be involved in the second half of the year.
One single data protection officer has been appointed for the Hera Group, in accordance with legal requirements.


Close and back to the site

As of the first six months of 2018, the Group's client portfolio appears to have increased by roughly 3% compared to the same period of the previous year. The number of clients increased for all services, especially for the electricity service: the increase of free-market provisions driven by a portfolio of competitive offerings and innovative options, the service quality and the latest business acquisitions in Friuli Venezia Giulia and Abruzzo are the main reasons for the increase of over 80 thousand clients (+8,9%). Gas service clients, in spite of the transfer of Medea (roughly 13 thousand clients), grew by about 14 thousand units (+1.0%): this increase is the result of the Group’s ongoing commitment to commercial activities and Verducci Servizi Srl and Blu Ranton Srlentry's entry within the Hera Group, both companies active in the sale of electricity and gas in Abruzzo. Water service clients grew very slightly, by approximately 0.3%.

Supply points 30 June 2018 30 June 2017 Sp change, no. Sp change, %
Gas 1,412.8 1,398.8 14.0 1.0%
Electricity 1,013.6 930.5 83.1 8.9%
Water 1,461.0 1,456.1 5.0 0.3%
DH 12.2 12.0 0.2 1.4%

Data expressed in thousands

In 2018, the volume of contacts handled by the Group's channels increased: in the first half of the year, contacts were altogether approximately 3 million, an increase of 5% compared to the same period of 2017.
The call centre channel (+3.4%) but, above all, digital channels experienced the most significant increases: the web channel (+36%) and, beginning in the second half of 2017, the application, through which 74,000 contacts were managed.
The Hera call centre significantly improved the service offered to its business customers: the average waiting time is 31.8 seconds (48.6 seconds in 2017), the number of calls answered increased (95.5% vs 93.4% in 2017) and the number of calls with an average waiting time of over 2 minutes decreased (7.9% vs 13.6% in 2017).
The average waiting time at helpdesks also decreased, which currently is approximately 8 minutes.
The Group's ongoing effort to improve service quality for the end customer, carried out for years through its contact channels, led to a further improvement in the quality perceived by clients in 2018. According to the customer satisfaction survey, in fact, helpdesks earned a score of 88, followed by the household call centre with a score of 86.5 and the business call centre (soho/sme) of 81.

Below are the main indicators for Hera helpdesks and call centres.

Average waiting time at the contact centre - no ivr (sec.) 1H 2018 1H 2017 1H 2016
Domestic clients 43 31 42
Business clients 32 49 39
Average waiting time at helpdesks (min, sec) 1H 2018 1H 2017 1H 2016
Average 8 10 9


Close and back to the site

Ecb: no change in interest rates and reduction in qe

In June the Ecb announced a reduction of quantitative easing (qe) to 15 billion euro a month during the last quarter of the year (as compared to the current pace of 30 billion euro a month) followed by a definitive halt in purchasing. It was however underlined that interest rates are expected to remain at their current level at least until mid-2019 and,
in any case, for as long as necessary to ensure that trends in inflation remain aligned with the current expectations for a sustained adjustment path. Therefore, no signs of an increase in interest rates will be seen until monetary policy has become completely normalised. The American central bank (Fed), instead, proceeded with a second 25 basis point rise (from 1.75% to 2.00%) since the beginning of the year and revised upwards the number of increases in rates foreseen for 2018, going to four instead of the three expected until present. This choice, made at a time when data on growth and inflation are positive and sustained by a good contribution from all components, suggeststhat the Fed intends to give the American economy free reign.

10y Btp-Bund Spread vs. Hera Spread

The 10-year Btp-Bund spread, a benchmark for measuring the cost of new long-term funding, after almost one year regular trends, saw a sharp increase in May, reaching a peak of 288 bps, due to political uncertainty in Italy. In late June it underwent a slight reduction, coming back to around 237 bps. Hera’s 10-year spread felt the effects of this, recording an increase, less than proportional to the sovereign spread however, of roughly 42 bps compared to the previous year. The consolidated trust shown by investors and the Group’s positive credit standing maintained its spread roughly 112 bps lower than the Btp-Bund spread over the same time period.

10-Year Btp-Bund Spread vs. Hera Spread


The Group gives constant attention to a financial management capable of maximising its yield profile while maintaining a cautious risk strategy. The average cost of debt is constantly optimised through forms of liability and financial risk management aimed at seizing favourable market opportunities.

To support liquidity risk indicators and optimise the costs/convenience of funding, the Group has obtained committed credit lines amounting to € 300 million. In May, € 200 million in committed lines were renegotiated with a new sustainable revolving credit line for an equal amount but with a postponed maturity date (2023), thus bringing the average date to maturity to over 4 years. The new credit line, named “ESG Linked RCF Facility”, introduces elements of sustainability through incentives based on meeting specific environmental, social and governance (Environmental social governance, hereinafter Esg) targets. For this purpose, a few Esg performance measures have been defined, thanks to which the Group will be able to benefit over time from more favourable rates.
In January, the Group completed a € 110 million financing contract with the European investment bank (Eib) aimed at sustaining the investment programme for the period between 2017 and 2021 involving projects related to the waste cycle sector. More specifically, the credit line will be used to additionally improve the performances seen in waste management services, in particular increasing the percentage of sorted waste indicated in the regional objectives of the areas served, to further increase the efficiency of the operating processes involved in waste treatment, recycling and recovery, and to improve sustainability standards in plants.

Financial risk management strategy

A list is provided hereunder of the policies and principles involved in financial risk management and control, including liquidity risk with the related default risk and debt covenants, interest rate risk, exchange rate risk and rating risk.

Liquidity risk

Proactive liquidity management

The Group attempts to match the maturities of its assets and liabilities, linking its investments to sources of funds that are consistent in terms of maturity and manner of repayment, taking into account the refinancing requirements of its current debt structure.
Liquidity risk refers to a company’s potential failure to meet its financial obligations, due to an inability to obtain new funds or sell assets on the market.
The Group’s objective is to ensure such a level of liquidity as to make it possible to meet its contractual obligations under both normal and critical conditions by maintaining available credit lines, liquidity and a timely start of negotiations on maturing loans, optimizing the cost of funding on the basis of current and future market conditions.

The table below shows the ‘worst case scenario’, where no consideration is given to assets (cash, trade receivables etc.) and emphasis is placed on financial liabilities, both principal and interest, trade payables and interest rate derivatives. All demand loans are called in while other loans mature on the date when repayment can be demanded.

Adequate liquidity for a worst case scenario

Worst case scenario 30 June 18
(mn€) from 1 to 3 months
over 3 months to 1 year from 1 to 2 years from 1 to 3 months
over 3 months to 1 year from 1 to 2 years
Bonds 14 76 471 38 76 471
Debts and other financial liabilities 244 70 61 191 63 59
Trade payables 1,091 0 0 1,396 0 0
Total 1,349 146 532 1,625 139 530

In order to guarantee sufficient liquidity to meet every financial obligation for at least the next two years (the time limit of the worst case scenario shown above), at 30 June 2018 the Group had € 515 million in liquidity, € 300 million in unused lines of credit and a substantial amount that can be drawn down under uncommitted lines of credit (roughly € 686 million).
The lines of credit and the corresponding financial assets are not concentrated on a specific lender, but distributed among major Italian and foreign banks, with a usage much lower than the total available.

Average term to maturity over 7 years, with 66% maturing after over 5 years

The Group’s financial structure is both solid and balanced in terms of composition and time to maturity, bringing liquidity risk to a minimum even in the event of particularly critical scenarios.
The amount of debt maturing within the year comes to 8.6% and the amount of long-term debt comes to roughly 91.4% of total financial debt, of which approximately 75% consists in bonds with repayment at maturity. The average term to maturity is approximately 7 years, of which 63% maturing beyond 5 years.

The table below shows cash outflows broken down by annual maturity, within and beyond five years.

Debt nominal flow (mn €) (*) 30 June 18 30 June 19 30 June 20 30 June 21 30 June 22 Over 5 years Total
Bonds 0 395 0 290 68 1.867 2,620
Bank debt / due to others 301 55 51 60 58 339 864
Total 301 450 51 350 126 2.206 3,484

* Rolling year compared to the date of the financial statements

Default risk and debt covenants

No financial covenants

This risk is related to the possibility that loan agreements entered into contain clauses whereby the lender may demand accelerated repayment of the loan if and when certain events occur, thus giving rise to a potential liquidity risk.
At 30 June 2018, a significant portion of the Group’s net borrowings was covered by loan agreements containing a number of clauses, in line with international practices, that place some restrictions. The main clauses guarantee equal treatment of all debt holders with respect to the company’s other non-guaranteed debts (pari passu) and a commitment towards bondholders preventing it from granting to subsequent lenders, with the same seniority status, better security and/or liens on its assets (negative pledge).
As to acceleration clauses, there are no financial covenants on debt except a corporate rating limit, specifying that no amount of debt coming to roughly €150 million can be rated below investment grade (BBB-) by even one rating agency.

Change of control & Investement grade
On the remainder of the debt, the acceleration clause is triggered only in case of a significant change of control of the Group that entails a downgrading to non-investment grade, or lower, i.e. the termination of the publication of the rating.

Interest rate risk

A model of active and prudential management of interest rate risk
The Group uses external funding sources in the form of medium- to long-term financial debt and various types of short-term credit facilities, and invests its available cash primarily in immediately realizable highly liquid money market instruments. Changes in market interest rates affect both the financial costs associated with different technical types of financing and the revenue from different types of liquidity investment, thus impacting the Group’s cash flows and net financial charges.
The Group’s financial policy has been designed to identify an optimal mix of fixed- and floating-rate funding, in line with a prudential approach to interest rate risk management. The latter aims to stabilize cash flows, so as to maintain the margins and certainty of cash flows deriving from its characteristic management.
Interest rate risk management entails, from time to time and depending on market conditions, a specific combination of fixed-rate and floating-rate financial instruments as well as derivative products.
The Group’s exposure to interest rate risk, including the effect of derivatives, comes to 13% of total borrowings, while the remaining 87% of debt is at fixed rates.

87% of debt at fixed rates

Gross borrowings (*) 30 June 18 31 Dec 17
(mn €) without
% with
% with
Fixed rate 2,812 2,831 87% 2,692 2,714 86%
Floating rate 432 413 13% 454 431 14%
Total 3,244 3,244 100% 3,146 3,146 100%

*Total borrowings: does not include cash and cash equivalents, other current and non-current financial receivables

Exchange risk unrelated to commodity risk

The Group adopts a prudential approach towards exposure to currency risk, in which all currency positions are netted or hedged using derivative instruments (cross-currency swaps). The Group currently has a bond outstanding for 20 billion Japanese yen, fully hedged by a cross currency swap.


Ratings confirm the strong points built up by the Group over time: positive outlook from S&P

Hera Spa has been given a long-term ‘BAA1 negative outlook’ rating by Moody’s and a ‘BBB positive outlook’ rating by S&P.
On 13 March 2018, as part of its annual review, S&P improved the Group’s outlook from stable to positive, with no change in long- and short-term creditworthiness, defined as BBB/A-2. S&P noted that the Group’s good prospects for growth, confirmed by the expectations of its latest business plan, could allow it to stably improve its rating, as long as Group management maintains its growth strategy, improvements in cash flow and a well-disciplined policy in remunerating shareholders.
On 5 May 2017 Moody’s released a credit opinion in which it confirmed the BAA1 rating and the negative outlook, positively evaluating the Group’s risk profile in terms of the solidity and good balance of the portfolio of businesses managed, as well as the Group’s good operating performance, its lack of liquidity risk and its resilient indicators as to creditworthiness, thus maintaining its rating one notch higher than the sovereign rating. The negative outlook, instead, depends on Italy’s rating, in that most of the Group’s Ebitda derives from domestic businesses and is therefore exposed to the country’s macroeconomic trends and its political scenario. On 30 May, Hera’s outlook was declared «Under review for downgrade» following the deterioration in sovereign risk that led to a review of the outlook for a downgrade of Italy.
Given the current context and the prolonged uncertainty as to the prospect of sovereign risk, the Group’s actions and strategies are always particularly careful and aimed at guaranteeing the maintenance and improvement of adequate ratings.


Close and back to the site

Presented in H1 last 2017 Sustainability Report

Contains the numbers of economic, social and environmental responsibility.

It focus on the commitments, the results obtained and future perspectives. Approved by the BoD on the 27th March 2018 and by the Shareholder's meeting on 26th April 2018.

Read more

Close and back to the site

Projects were focused on the circular bio-economy, energy efficiency, and safe, sustainable and smart city environments with the aim of improving the services available to citizens and fostering the industrial growth of the Group.


In addition to completing the Sant’Agata Bolognese plant, which will produce about 7.5 million standard cubic metres of biomethane per year, research is continuing into technologies for obtaining advanced biofuels from biomass.
After some tests on raw plant trimmings, which confirmed the biomethane yields outlined in the literature, a pilot reactor was built to carry out a thermal pre-treatment (specifically, steam explosion) on the plant material. In the second half of 2018, the material produced by the reactor will be used to fuel two pilot digesters to confirm the high production yields of biomethane obtained in the laboratory, following thermal pre-treatment.
In addition, a feasibility study was launched regarding the construction of an industrial-scale plant to produce biomethane from pre-treated cuttings and trimmings, together with other waste matrices from the agro-industrial field.

Smart Waste PuntoNET

In the first half of 2018, tests were carried out on the outdoor prototype of the multifunctional centre for urban waste collection (PuntoNet) that, in addition to user recognition and waste measurement, is able to deliver other innovative services for the city (environmental monitoring, wi-fi, video surveillance, electric charging services for bikes and cars, etc.). During the second half of the year, the prototype will be sited in an urban area of the Castel Bolognese area so as to verify the services provided under real-life operating conditions.

Senseable Dep

The Senseable Dep project aims to create an IT platform for monitoring purification processes through the use of simplified dashboards designed to summarise, through only a few indicators, the "health status" of the purification process in terms of biological, hydraulic and energy aspects. After completing the testing and tuning phases for the Forlì purifier, the monitoring system will be extended to the Cesena, Cesenatico and Savignano purifiers by the end of the year.

Environmental Monitoring

Following the project carried out in the territory of Ferrara, a new network has been created to monitor air quality in the municipality of Castel Bolognese. The sensors have been placed in the most relevant strategic points, such as high population density areas, areas with heavy traffic (Via Emilia), industrial areas, areas subject to heavy use (railway station, sports centre), and rural areas. Thanks to monitoring during the first six months of the year, it was possible to assess the winter and spring trends, and this will continue for the summer season as well. By collecting these data and correlating them with environmental parameters (temperature, wind intensity or direction), it is possible to identify the spatial distribution of pollutants and the population's exposure index. These measurements will be supplemented by analyses of the sources of pollution (heating and/or traffic), in order to identify prevention and mitigation measures.

Underground Facility Management

The Underground Facility Management project involves applying a Business Process Management system to the integrated management of construction sites. This system represents a fully-fledged platform for document management and coordination of the excavation work carried out by the Group.
The Romagna aqueduct complex adopted this system at the beginning of the year, and the Emilia area is expected to begin participating in the second half of 2018. After having completed this period of activity, it will be possible to receive feedback in order to improve or extend the platform.

Municipality Dashboard

The dashboard developed for the Castel Bolognese area is an IT platform that brings together local services and is accessible via the web. It allows operators to dynamically view information collected in the field by the various sensors or devices and to correlate these different forms of information, thereby creating added-value displays.
During the first half of the year, the architecture of the platform was developed and simulations were carried out with information from a variety of domains/services in order to create a useful tool for municipal administrations and technical offices that facilitates their work in terms of supporting daily operations and strategic planning.. The dashboard integrates wi-fi services, video surveillance, environmental monitoring, energy maps (maps of buildings’ energy consumption, to assess their historical performance and carry out predictive analysis), environmental passports (a tool to assess how well certain objectives of the UN Agenda 2030 have been reached) and waste collection, through the PuntoNet system. Before the end of the year, the dashboard will be made available to the municipality of Castel Bolognese.

Other initiatives

Several apps have been developed to allow Hera employees to more easily access Company functions (meeting room reservations, document approvals, authorisations, ...) using their smartphones and tablets.
The innovation platform open to all employees continues to be used to collect, comment on and evaluate innovative ideas and proposals (over a thousand employees are taking part in this initiative).
Tests were carried out to assess the validity and usability of the Augmented Reality (AR) technology in the network environment. This technology proved potentially useful in all cases in which the cartographic data is highly accurate. The tests will continue with the latest generation of visors and are verifying how AR might be used in providing remote assistance for maintenance work.


Close and back to the site

Standardisationof systems in other companies

Activity is continuing on the multi-year harmonisation plan for AcegasApsAmga Spa. The roll-out of systems for gas distribution services was completed, while the roll-out of systems for quality management and Geo-Business Intelligence is underway.. A feasibility study has been completed in relation to Acantho Spa, regarding its migration into Group systems; implementation activities will begin in the second half of 2018.

Regulatory adjustment

In addition, 14 initiatives were completed to bring the Group's systems into line with regulations; the main ones of note are those relating to power contribution (Resolution No. 786/16), the TARI fee for managing revenues from municipalities (Law Decree No. 225), unregulated price offers under equal levels of protection (Resolution No. 555/17) and improving the performance of the natural gas metering services (Resolution No. 522/17).

Efficiency and supporting business

Completed activities relating to process efficiency and business support include the rationalisation and end-to-end digitisation of Heratech Srl processes and the updating of the treasury platform, which facilitates more efficient management of administrative and financial processes, commercial offers relating to district heating, and other evolutions in the Group's core systems.
Finally, it is worth mentioning that production began on the new system of detailed fee payments for environmental services and its introduction in 8 municipalities, including Ferrara.

Information system efficiency

As part of the process of continuous technological innovation and improving the performance of the Group's information systems, various platforms as well as the Oracle database were upgraded. In March, work began on the technological overhaul of the Group's entire infrastructure at the Acantho Spa data centre in Imola and at the secondary disaster recovery data centre; activities are scheduled for completion in the second half of 2018.

Information system safety

The safety of data systems and company information, as well as compliance with data protection regulations, are among the key objectives of the Information Systems Division. Our commitment to preventing and monitoring potential cyber attacks is ongoing, through the planning and implementation of periodic risk analysis on the production systems (vulnerability assessment), updating existing systems and raising awareness among users.
In January 2018, the Soc (Security operational centre) service was activated to monitor the security events produced by Hera applications and systems with a view to detecting any attacks, attempted attacks or anomalies in terms of cybersecurity.

Quality certification and Auditing

A third party audit (BVI certification body) was successfully performed in April to renew the certification of the Group's ISO standards. The audit encompassed all the processes within the Information Systems Department's remit. In addition, Internal Audit activities were completed in the first half of 2018, the outcome of which will be published in the second half of the year.


Close and back to the site

Human Resources

The Hera Group employees with open-ended contracts as of 30 June 2018 number 8,555 (consolidated scope) and are distributed by role as: executive managers (149), middle managers (533), office clerks (4,593), and workers (3,280). In 2018 this structure is the result of 133 entries and 212 exits as well as changes in company structure that involved a reduction in the amount of 49 individuals (Alea AmbienteSpa, Blu Ranton Srl, Medea Spa and Megas Net Spa). Hiring mainly results from a quality turnover entailing the entry of skilled workforce.



Main developments in the General Operations department

More specifically, during the first half of 2018, the group planned an evolution in its organisation, formalised as of 1 July 2018, which led to a further rationalisation of Heratech Srl's organisational model by simplifying the company's underlying organisation and merging all activities connected with the planning, forecasting and execution of work in the electricity sector with Inrete Distribuzione Energia Spa.

In relation to Inrete Distribuzione Energia Spa, as of 1 July 2018, the company's underlying organisation was rationalised by further specialising distribution activities by business segment (gas and electricity), focusing on standardisation, project development and the monitoring of metering and remote management in a unified, transversal organisational setting.

Main developments in the Herambiente Group

As of 30 June 2018, the organisational model of the Industrial Market Department of Herambiente Spa was revised, integrating the commercial activities and processes of Waste Recycling Spa with those of Herambiente Servizi Industriali Srl in order to focus the commercial structures to a greater extent in relation to market segments served with a view to improving the overall customer experience. As of 30 June 2018, the preparatory activities for dismantling the Operational Services Division and relocating its activities and resources within Herambiente Spa have also been completed. The aim of this operation is to enhance the overall effectiveness and efficiency of the processes managed and to simplify relations with the top management of Herambiente Spa.

Main developments in the Central Market department

In relation to the Central Market department of Hera Spa, the following are worth mentioning:

  • As of 30 June 2018, the organisational overhaul of the Customer Experience Management Department of Hera Comm Srl was completed. This operation was aimed at further improving service quality and customer satisfaction levels with a view to customer experience and continuous improvement, while continuing the integration of the customer relationship management (CRM) processes previously allocated to the Household and Company markets department;
  • effective as of June 2018, the organisational fine-tuning of the Commercial and Marketing Department of Hera Comm Srl, particularly in terms of setting up the Commercial Innovation Division, which is designed to boost processes of scouting and developing innovation in the commercial energy field;
  • effective as of May 2018, the organisational redesign of Hera Servizi Energia Srl to make it more market-oriented, in terms of optimising customer management activities and further focusing sales on the business segments.

Main developments in the Central Unit area

In the Central Unit area, the following are worth mentioning:

  • effective as of May 2018, the appointment of the Hera Group's Data Protection Officer in the Quality, Safety and Environment Department, in compliance with the General Data Protection Regulation (GDPR) no. 2016/679 and in order to encourage a uniform approach to the application of this regulation to the Group as a whole;
  • the organisational redesign of the Central Planning, Regulatory Affairs and Local Authorities Department, renamed Central Strategy, Regulation and Local Authorities Department, aimed at further strengthening its focus on strategic planning and policy making activities, regulation and tariff systems, and, finally, on area management in the various parts of the Emilia Romagna region.

Industrial relations

On 23 April 2018 agreements were signed for all Hera Group personnel regarding the finalisation of the performance bonus indicators for 2017, the identification of the new performance bonus indicators for 2018, and issues of work-life balance. The latter agreement in particular prolongs the Group's experiment with allowing smart-remote working and providing time-saving services and allows all employees to freely transfer their vacation time/time off/working time reduction ("solidarity-hours") to colleagues so that they might look after minor children and/or spouses who, due to disability and/or serious illness, require constant care. For every day gifted by an employee, the company will supplement this transferred time with an additional half hour. Following the acquisition of the majority of shares by the Hera Group, an agreement was signed, valid for 2018-2019, regarding the implementation of an economic incentive system (including Group welfare) for employees of Aliplast Spa. This is aimed to initiate a process of gradually integrating and harmonising the latter company with the treatment applied within the Group (including performance bonuses). In addition, agreements were signed regarding the 2018 financed training plan and the minutes of the 2018 training plan meeting. In the Emilia Romagna area, in order to make more rational use of the Imola cogeneration plant, new working hours have been established for staff based on a 24-hour shift schedule. An agreement was reached in the Environmental Services Department of Hera Spa to install a GPS localization system (called "hergo ambiente") on vehicles belonging to the environmental division, applicable to the Cesena and Ravenna areas.. This agreement implements the provisions of the Atersir technical regulations regarding the assignment of urban and similar waste management in the territories of Cesena and Ravenna. In keeping with the evolution of the organizational model of Inrete Distribuzione Energia Spa's electricity emergency response in the Modena area, an agreement was reached to replace the emergency response service based on 16-hour shifts with daily working hours, from Monday to Friday. Together with this move to replace the 16-hour shift emergency response service, the on-call organisational model was also refined. In the Environmental Services Department of Hera Spa, a trade union agreement was signed regarding moving beyond standby duty outside of normal working hours. An agreement was also reached regarding the implementation of a system of standby availability outside normal working hours at Uniflotte Srl.
In the Friuli Venezia Giulia and Veneto areas, agreements were signed to implement organisational changes to the availability service as part of the Electricity Department of AcegasApsAmga Spa and Hera Luce Srl, for the Trieste and Gorizia areas. Agreements were also signed regarding financed training for AcegasApsAmga Spa and Hestambiente Srl. In the Marche region, agreements were signed with the unions regarding the procedure for Megas Net Spa's merger by incorporation into Marche Multiservizi Spa as wel as financed training.


In the first half of 2018, initiatives were launched to train employees and disseminate the leadership model, with about 5000 people involved in various ways.. In the first half of the year, on-the-job training was also carried out for all Hera Group managers and executives. These initiatives will continue in the next half of the year as well.
The first phase of the smart working pilot project was completed and the second phase involving about 400 people was launched; this phase will continue until the end of 2018.


In the first half of 2018, a total of 114,598 hours of training were delivered at the Group level: 13.6 hours per capita, equal to approximately 54% of the overall target for 2018, and approximately 94% of employees have already been involved in a training activity. The economic investment, net of trainee and in-house trainer costs, amounted to 430,589 euros. These data show a significant commitment in terms of both finances and resources the Group has made to continuously valorising and developing its human capital, including through the continuation of HerAcademy, the Group's Corporate University.
As to HerAcademy programs, particularly noteworthy is the seventh edition of the university orientation initiative and the fifth edition of the initiative orienting participants to the world of work as well as the third year of a school-work scheme management model based on a work-and-school skills integration approach. This was started up following the memorandum of understanding signed in 2015 with the Emilia-Romagna Regional Education Office. For the 2017-2018 school year, the expansion of the perimeter to include all the territories of the Hera and AcegasApsAmga Groups was consolidated.
As part of the HER@futura project, the process of developing basic digital skills was launched for all Group personnel, based on their own level of digital readiness.


On 23 January 2018, HEXTRA, the unified welfare system for all Hera Group companies that can be customized according to individual choice, was launched once again; it will remain active until 18 November 2018. All employees with fixed-term and open-ended contracts were awarded a flexible welfare sum of 385 euros each.
In keeping with the previous year, an additional education quota for employees who have school-aged children, from kindergarten to high school, will be allocated for 2018 as well.

The main new items introduced in 2018 concern:

  • the possibility of converting up to 50% of the 2017 performance bonus into an additional welfare share free of taxation;
  • the second edition of university scholarships which, on the basis of equity and meritocracy, rewarded the best academic performances achieved in the 2016/2017 academic year by making available 40 scholarships worth 750 euros each;
  • the second edition of the language study courses "Un’estate nel mondo con intercultura" (A summer in the world with interculturalism), offering 10 scholarships worth 2,000 euros each for high school students;
  • the management of the fifth edition of summer centres for the children of employees. As part of this entirely positive initiative, all applicants have been offered the chance to attend summer centres under particularly advantageous conditions and the Group has also made an added contribution to cover part of the enrolment and tuition fees involved.
  • the introduction of new initiatives and services in all areas of Hextra in line with the needs of employees as expressed in the 2017 listening phase to underline the pivotal role people play in developing the plan and foster the creation of a common culture of participatory welfare.

All of these choices demonstrate the Group's constant attention to its workers as a key factor in achieving its corporate objectives through continuous investment in the development of Hextra and they position us among the leading national companies in the field of corporate welfare.



Close and back to the site



first six months of 2018

first six months of 2017





Other operating revenues




Use of raw materials and consumables




Service costs




Personnel costs




Other operating costs




Capitalized costs




Amortisation, depreciation and provisions




Operating revenues



Share of profits (losses) pertaining to joint ventures and associated companies




Financial income




Financial expenses




Financial operations



Pre-tax profit







Net profit for the year



To attribute to:

Parent company shareholders



Minority shareholders



Earnings per share








Pursuant to Consob Resolution no. 15519 of 27 July 2006, the effects of relationships with related parties are accounted for in the appropriate income statement in paragraph 2.04.01 of this consolidated financial statement.


Close and back to the site



first six months of 2018

first six months of 2017

Profit (loss) for the year



Items reclassifiable to the income statement

fair value of derivatives, change in the year




Tax effect related to the other reclassifiable items of the comprehensive income statement



Other business components valued using the equity method

Items not reclassifiable to the income statement

Actuarial income/(losses) post-employment benefits




Tax effect related to the other not reclassifiable items of the comprehensive income statement



Total comprehensive profit (loss) for the year



To attribute to:

Parent company shareholders



Minority shareholders




Close and back to the site






Non-current assets

Property, plant and equipment




Intangible assets








Equity investments




Non-current financial assets




Deferred tax assets




Financial instruments - derivatives




Total non-current assets



Current assets





Trade receivables




Current financial assets




Current tax assets




Other current assets




Financial instruments - derivatives




Cash and cash equivalents

17. 31



Total current assets



Assets held for sale



Total assets



Pursuant to Consob Resolution no. 15519 of 27 July 2006, the effects of relationships with related parties are accounted for in the appropriate statement of financial position outlined in paragraph 2.04.02 of this consolidated financial statement.






Share capital and reserves


Share capital






Profit (loss) for the year



Group net equity



Non-controlling interests



Total net equity



Non-current liabilities

Non-current financial liabilities




Post-employment and other benefits




Provisions for risks and charges




Deferred tax liabilities




Financial instruments - derivatives




Total non-current liabilities



Current liabilities

Current financial liabilities




Trade payables




Current tax liabilities




Other current liabilities




Financial instruments - derivatives




Total current liabilities



Total liabilities



Liabilities associated with assets held for sale






Pursuant to Consob Resolution no. 15519 of 27 July 2006, the effects of relationships with related parties are accounted for in the appropriate statement of financial position outlined in paragraph 2.04.02 of this consolidated financial statement.


Close and back to the site





Pre-tax profit



Adjustments to reconcile net profit to the cashflow from operating activities:

Amortisation and impairment of property, plant and equipment



Amortisation and impairment of intangible assets



Allocations to provisions



Effect of valuation using the equity method



Financial expense / (Income)



(Capital gains) / Losses and other non-monetary elements (including valuation of commodity derivatives)



Change in provision for risks and charges



Change in provision for employee benefits



Total cash flow before changes in net working capital



(Increase) / Decrease in inventories



(Increase) / Decrease in trade receivables



(Increase) / Decrease in trade payables



(Increase) / Decrease in other current assets/ liabilities



Change in working capital



Dividends collected



Interests income and other financial income collected



Interest expenses and other financial charges paid



Taxes paid



Cash flow from (for) operating activities (a)



Investments in property, plant and equipment



Investment in intangible assets



Investments in companies and business units net of cash and cash equivalents




Sale price of property, plant and equipment and intangible assets



Divestment of unconsolidated companies and contingent consideration



(Increase) / Decrease in other investment activities



Cash flow from (for) investing activities (b)



New issues of long-term bonds



Repayments and other net changes in borrowings




Lease finance payments




Proceeds from the sale of shares without loss of control



Acquisition of Interests in consolidated companies


Dividends paid out to Hera shareholders and non-controlling interests



Change in treasury shares



Other minor changes


Cash flow from (for) financing activities (c)



Effect of change in exchange rates on cash and cash equivalents (d)

Increase / (Decrease) in cash and cash equivalents (a+b+c+d)



Cash and cash equivalents at the beginning of the period



Cash and cash equivalents at the end of the period



Pursuant to Consob Resolution no. 15519 of 27 July 2006, the effects of relationships with related parties are accounted for in the appropriate cash flow statement in paragraph 2.04.03 of this consolidated financial statement.


Close and back to the site


Share capital


Reserves for derivative instruments recognized at fair value

Reserve actuarial income/(losses) post-employment benefits

Profit for the year


Non-controlling interests


Balance as of 31-Dec-16









Profit for the year





Other components of comprehensive income:

fair value of derivatives, change in the year





Actuarial income/(losses) post-employment benefits




Overall profit for the year







Change in treasury shares





Payment for non-controlling shares



Changes in equity investments





Changes scope of consolidation



Allocation of profit:

Dividends paid out





Allocation to reserves



Balance as of 31-Jun-17









Balance as of 31-Dec-17









Adoption of IFRS 9





Balance as of 01-Jan-18









Profit for the year





Other components of comprehensive income:

fair value of derivatives, change in the year





Actuarial income/(losses) post-employment benefits





Overall profit for the year







Change in treasury shares






Changes in equity investments





Changes scope of consolidation






Allocation of profit:

Dividends paid out





Allocation to reserves



Balance as of 31-Jun-18










Close and back to the site




Cash and cash equivalents




Other current financial receivables



Current bank debt



Current portion of bank debt



Other current financial liabilities



Finance lease payables due within 12 months




Current financial debt




Net current financial debt



Non-current bank debt and bonds issued



Other current financial liabilities



Lease payments due after 12 months




Non-current financial debt




Net debt - CONSOB Communication No. 15519/2006




Non-current financial receivables




Net financial indebtedness




Close and back to the site

contact Luca for information regarding financial data, investor kit and Hera equity

Luca Cimatti

+39 051 28.70.34



contact Marzia for information on financial events, road shows and ESG communication

Marzia Faggioli

+39 051 28.70.40

mob. +39 329 88 43 904


Tomaso Tommasi di Vignano
Chairman of the Board of Directors

The figures showing growth in the first half of 2018 demonstrate the coherence and credibility of the strategic choices regarding the mix of businesses and the balanced investment policies pursued by the Group over the last 15 years.

Given these bases, it is clear that even in a moment of uncertainty and volatility such as the present, Hera continues to create value for its own shareholders. This comes about thanks to both the payment of growing dividends and the sustainability shown by the policies we support over a time span covering the long term.

Stefano Venier

The results for the period in question confirm yet again the validity of the operating, tax and financial initiatives coherently supported by Hera as of its establishment.

This positive trend, linked to the Group’s solid foundations, lends further credibility to the strategies and expectations outlined in the Business plan. We intend to pursue these elements with the constantly increasing engagement of our stakeholders, in order to continue, with them, along the path we share in creating economic, environmental and social value.

Stefano Venier