Our Group strategy must ensure, as usual, solid and coherent industrial and economic development of businesses, in line with the performance and results achieved over these 16 years.
In order to respond effectively to the needs of our local area and our customers – for example, attention to the environment and new technologies, and the methods for interacting with stakeholders – three critical success factors have been identified for utilities in the coming years: Ecosystem, Circularity and Technology.
Belonging to an ecosystem in a constantly evolving context increases companies’ resilience to changes in the environment and accelerates the evolution of corporate culture as a result of external contamination. Our Group strategy has always been based on a close relationship with the local area and its ecosystem: this distinctive aspect is regarded today as a real asset, even by investors and rating agencies.
Circular economy responds to a range of critical issues that modern society must address: from the gradual lack of resources to reduced atmospheric emissions or the reduction of non-recyclable waste. Over the years, the Group has developed industrial strategies based on sustainability, allowing it to become an international point of reference in terms of circular economy. Its future actions must also continue to effectively and purposefully steer circularity and decarbonisation goals.
Technological evolution and, more specifically, digitisation have become ever common priorities in the national industrial sector. Greater efficiency by operators will also produce benefits for customers and citizens, in terms of cost or service quality. The Group needs to use the opportunities offered by new technologies in order to extract cost efficiencies and synergies connected to data management and will be able to play a key role as facilitator for spreading a smart approach throughout the local area, especially in the case of smart cities.
The five strategic levers already used by the Hera Group in recent years (Growth, Excellence, Efficiency, Innovation and Agility) are useful for coordinating the work and strategies of the single units, steering them towards a shared target and actions.
The 2018-2022 Business Plan – drawn up in compliance with the guidelines described above – confirms and strengthens the Group’s industrial growth trajectory, projecting an EBITDA goal of Euro 1,185 million in 2022, rising by Euro 200 million compared to 2017. This objective will be achieved also as a result of Euro 3.1 billion investments spread over five years, rising by over Euro 50 million/year compared to the amount allocated in the previous Plan, focusing mainly on meter roll-out, network resilience projects, construction of new plants and external growth projects.
Economic growth targets were defined as usual by ensuring financial balance (the net debt to EBITDA ratio will always be below 3.0x) and focusing on projects and actions that bring benefits to the company while at the same time achieve the 2030 UN Agenda targets applicable to Hera’s activities (11 out of the 17 targets). To this effect, almost ¾ of the five-year growth forecast in the Business Plan will be replaced by projects implemented to respond to this “call to action”, thus bringing shared value EBITDA to exceed Euro 470 million in 2022 (40% of total EBITDA).