total return on stock
compared to original
listing in 2003
million euro
added value distributed
to local stakeholders

Hera’s commitment toward investors

Hera undertakes to create value by placing the quality and efficiency of the services managed and the growth by lines, both internal and external, at the centre of its strategic approach; at the same time, it pursues a balanced development of the strategic areas of its business portfolio. The stability of these strategic policies over time, the handling of a low propensity to risk and the sustainable approach have contributed towards producing economic-financial results constantly on the up over 16 consecutive years, also under adverse market conditions. The overall share investment return (total shareholder return), with respect to the IPO, came to +212.1% at the end of 2018: a value which has always remained positive, during a period characterised by considerable volatility on the financial markets.

During the last quarter of 2018, the performances of the financial markets were influenced by the commercial tensions between the United States and China, by the global economic slowdown and in the specific case of the Italian market by the uncertainties regarding approval of the financial manoeuvre. The Hera stock ended 2018 with a performance of -8.7%, in any event better than the Italian stock market (-16.7%), reaching an official price of Euro 2.674, compared with a price of Euro 2.929 at the end of 2017 (level once gain achieved in the first few weeks of 2019). Capitalisation came to around Euro 4.0 billion, confirming itself amongst the 40 highest capitalisations of the Italian share list. The positive performance of the Hera stock, compared with the trend of the Italian market, was supported by the appreciation of the investors for the business plan presented to the financial community in January 2018 and by the sound fundamentals emerging during the year at the time of the publication of the quarterly and annual results.

Official share price and average traded quantities in 2018
Official price at close of period (Euro) 2.97 2.68 2.68 2.67
Average volume traded (thous.) 2,695 2,382 1,626 1,832
Average volume traded (in thousands of Euro) 7,812 6,780 4,522 4,627


The Hera official listed price at the end of 2018 disclosed an implicit valuation premium with respect to the local utilities sector. The multiple of the business value on the gross operating margin (EV/Ebitda) was in fact equal to 6.4 compared with a 6.0 peer average, and also the multiple of the share value on the net profit (P/E), equal to 14.6, exceeded the 10.6 average. The greater valuation which the market acknowledged Hera with respect to the main listed local utility companies reflects: the persistent outperformance of the final results with respect to expectations, the future growth prospects of the business results, the low risk implicit in the mix of the strategic business areas, the stability of top management over time, the diversified composition of the shareholding structure and the time series of the results undergoing continual growth.

The Hera stock disclosed a better performance than that of the Italian market in the five-year period 2014-2018, with listings up by 62.3% between 2013 and 2018 compared with a drop of 0.3% in the Ftse Italia All Share index.

The dividend policy has been identified as the most important component of the remuneration of the invested capital. Hera has ensured a constant and rising flow of dividends since listing: it has distributed Euro 1.51 billion in total since its establishment in 2002. The stock has thus been included in the Etf Spdr S&P Euro Dividend Aristocrats during 2016, a basket of 40 European securities (only four are Italian, including Hera) which distinguished themselves due to the uninterrupted distribution of stable or rising dividends in the last 10 years.

In the five-year business plan, presented in the first few days of 2019, Hera increased the remuneration objectives for the shareholders envisaging a minimum dividend rising up to 11.0 cents per share at 2022, up +16% compared with the last dividend distributed. This policy permits the shareholders clear visibility on the minimum future return of their investment with respect to the remuneration used by other companies in the sector, which conditions the dividends dependent on the forecast performance of the net profits (pay-out ratio).

The consensus of the financial analysts deems the Hera dividend policy to be sustainable: it is consistent with the expected cash generation which, after the payment of the dividends, will be capable of improving the equity solidity and financial stability further, already today among the best in the sector with a ratio between net financial payables and Gross Operating Margin of around 2.5 times.