Sustainability remains one of the cornerstones of the Group’s strategies for growth, perfectly integrated and relevant to all operating areas, with an increasing focus on creating value for stakeholders, as shown by the recent introduction of the concept of corporate purpose in the Group’s Articles of Association: The Group’s strategy is in fact guided by the corporate purpose, at the centre of which there is the creation of shared value for the Planet, People and Prosperity.
The Group has enhanced its five-year strategy, following the new European directives and at the same time maintaining its coherence with the goals of the UN’s 2030 Agenda, which for years has guided Hera’s commitment towards sustainable development.
THE HERA GROUP’S 2025-2029 STRATEGIC MAP
And to honour the Purpose «Creating long-term value for its shareholders through the creation of shared value»
5
Perspective:
FINANCIAL
To achieve economic and financial results
Guaranteeing financial balance
Increasing CSV Ebitda
Increasing Net profit
Enhancing industrial activities
4
Perspective:
CUSTOMERS AND LOCAL AREAS
To produce tangible benefits for customers and local areas
Improving customer experience and loyalty
Expanding and consolidating customer base
Consolidating services in local areas
Being leading players in sustainable local development
3
Perspective:
INTERNAL PROCESSES
Enabling resilience & innovation
Pursuing decarbonization
Regenerating resources & closing the loop
To define and implement strategic processes
Increasing quality & safety services
Prevention & safety in the workplace
Communication with stakeholders & local areas
Efficiency in management & improvement of the commercial cycle
2
Perspective:
LEARNING & DEVELOPMENT
To equip our people
ERM risk analysis & management
Involvement of all workers & leadership development
Promotion of the Code of Ethics & policy for quality & sustainability
Efficiency / effectiveness of organisation & ICT
Professional development & valorisation
1
The Business Plan to 2029 confirms and reinforces the growth envisaged in the previous plan: by 2029 the Hera Group expects EBITDA of 1.76 m€.
Investments at 5.5 bn€: an increase of approximately 6% compared to the 2024-2028 investment plan. Looking at the allocation of investments by ‘type’, about 45% of the resources will be dedicated to maintenance while 55% will be allocated to development.
The breakdown of investments by sector allocates 57% to Networks, 23% to the Environment, 19% to Energy and 1% to Other Services.
Approximately 4 bn€ or 77% of total investments are allocated to projects that create value not only for shareholders but generate shared value for all stakeholders and support the growth of CSV Ebitda to 68% of Group Ebitda by 2029.
Dividends are promised to grow further, with an average annual growth rate of around 5%, to reach 19 c€ at 2029 (+27% since the last dividend distributed). The dividend yield, combined with average annual growth in structural earnings per share of around 6%, translates into a total shareholder return (TSR) of approximately 10% over the Plan period.
Operating cash flows will increase, supporting investments, dividends and expansion through M&As, maintaining financial solidity with the Debt/Ebitda ratio at 2.6x in 2029, thus leaving room for other investment projects not included in the Plan.
Operating-financial policies fully confirmed and renewed commitment towards development and growth, with interventions focused on the circular economy, energy transition, environmental protection, technological evolution and social cohesion.
VALUE CREATION
The Group's strategy focuses on creating value through four main growth levers: efficient allocation of capital to investment projects with the best risk-return profiles, expansion of market shares in the businesses covered, expansion of the scope through M&A transactions and extraction of synergies or cost efficiencies, including financial ones.
As far as the overall EBITDA is concerned, the planned projects will make it possible to reach EUR 1,760 million euro. Structural growth, with a CAGR of +5%, will be achieved through the usual growth levers, split between organic growth (+€248m) and M&A (+€100m).
Thanks to these growth targets of the economic indicators, the Plan projects an increase in return on invested capital (ROI) to 9.3% in 2029, while ROE will stand at 10.5%.
A steady annual increase in dividends is expected, reaching a coupon of 19-eurocents by 2029, with net earnings per share also expected to grow structurally by an average of approximately 6% annually. Based on Hera stock prices at the end of 2025, the new policy guarantees an average yield of approximately 4% and offers full visibility of prospective dividends for each plan year.
As a result, the total shareholder return (TSR), which takes into account both expected earnings performance and dividend yield, stands at over 10% on average per annum.
SUSTAINABLE GROWTH
Hera also confirms its important focus on the circular economy and decarbonisation, in order to encourage and support the ecological transition of the territories served with concrete initiatives aimed at citizens, public administrations and industrial customers, making available the extensive plant base and know-how gained in the various business sectors.
The initiatives envisaged in the Business Plan to 2029 make it possible to project a trajectory that is perfectly consistent with the achievement of the industrial objectives to 2030 in terms of circular economy and carbon neutrality.
With reference to the circular economy, the traced path confirms the 2030 targets such as the increase in recycled plastics (+145% compared to 2017), or the reuse of wastewater (up to 14.5% of the total).
Regarding the Group's commitment to reduce carbon emissions, the ambitious 37% reduction target to 2030, already validated by the prestigious international network Science Based Target initiative (SBTi), and the ‘Net Zero’ status by 2050, through a reduction in Scope 1, 2 and 3 emissions of around 90 per cent compared to 2019 and the removal of all remaining emissions at the end of the decarbonisation pathway.
At the same time, the 'shared-value EBITDA' will continue to grow significantly: it is expected to rise to 68% of the Group's total EBITDA in 2029 (compared to 54% in 2024), in line with the target of 70% by 2030.
INCREASE IN RESILIENCE
The diversified asset management strategy also confirms the focus on strengthening the three main lines of business, maintaining the current balance, which has ensured a constant uninterrupted growth and the strong resilience of the Group's results in all the scenario situations experienced over the last twenty years.
Maintaining this set-up means that approximately 60 per cent of development investments are dedicated to regulated activities, which thus provide regulatory protection against the cyclical nature of demand, inflation and interest rate trends.
Even with regard to the remaining 40% of development investments, attributable to free market activities, the strategy of low risk appetite is guaranteed by the implementation of hedging policies on operational risks in asset management, which have proven particularly effective even in situations of wide fluctuations in commodity prices experienced over time.
INVESTMENTS
The strategy to 2029 envisages financial resources to be set aside for investments, which will increase compared to the previous Investment Plan. Investments are planned that will feed into plant base maintenance, organic growth initiatives and external growth initiatives, including M&A opportunities.
Specifically, we will allocate:
- to Decarbonisation 1.3 billion euro, in line with our target of reaching Net Zero by 2050, to take action on climate-changing emissions, thanks to the development of plants, energy efficiency initiatives and partnerships with our stakeholders.
- to circular economy 2.0 billion euro to reduce the consumption of natural resources and to ‘close the loop’ on our activities, through the development of circular solutions and the protection of ecosystems.
- to Resilience 2.6 billion euro, to further increase the resilience of the Group's assets and businesses and to cope with increasingly frequent and intense exogenous phenomena.
- to Innovation 1.4 billion euro, to promote the application of cutting-edge technologies and innovative solutions that support the Group's industrial development and the pursuit of transition objectives.
The new Business Plan revolves around three strategic levers.
In all the businesses Group's projects are placed around these dimensions with the aim of combining the development of the multi-utility with that of the context in which it operates, in a "win-win" perspective to increase shared value.
The Group's investment plan reserves significant resources to meet climate and technological challenges:
- 24% of investments will contribute to decarbonization,
- 36% will be allocated for resource regeneration,
- 25% will be dedicated to innovation
- 47% will go to improve the resilience of our assets.
The 5.5-billion-euro investment plan will allocate
- 3.1 bn€ to Networks for plant base maintenance and network development;
- 1.3 bn€ to Waste to enhance the Global Waste Management service and plastic recycling activities;
- 1.1 bn€ to Energy to increase the share of renewable energy produced and sold;
- 0.1 bn€ to Other Services to promote the TLC network evolution.
In 2029, the supply chains' contribution to the Group's EBITDA is balanced. Indeed, portfolio diversification continues to be a key lever for better managing businesses, allowing the Group to pursue an uninterrupted growth path, seizing opportunities and addressing the external events that have arisen.
The new Plan further reinforces the Hera Group’s focus on generating value for its shareholders as well. They can indeed count on a return on invested capital well above the weighted average cost of capital and on a solid and transparent dividend policy, whose payment has been fully confirmed in 2025.
The dividend policy included in the new business plan envisages a dividend per share of 16.0 cents for the financial year 2025 (payable in 2026), higher than the 15.5 that was envisaged in the previous business plan. This increase is then reflected in a parallel increase of the entire curve for the following years as well, to reflect the improved earnings growth profile within the plan. The dividend will reach a level of 19 eurocents by 2029, which marks an average annual growth of 5% over the Plan period, with an acceleration of growth to 6% from 2028.
With this Business Plan, the Group confirms its strategy’s consistency with the most recent and ambitious European policies as well as the recommendations of the UN Agenda. The significant amount of investments, equal to 77% of the total, going towards Shared Value initiatives and the ensuing economic growth provide a guarantee of the Group’s medium to long-term development.
The Group's commitment to generating value for the community is confirmed by the growth of Shared Value EBITDA, which rose from 33% of the Group's total EBITDA in 2016 to 54% in 2024.
Estimates to 2029, drawn on the basis of the Plan projects and initiatives, project a Shared Value EBITDA above 66%, in line with the target of 70% by 2030.
Entirely geared towards Shared Value, the Plan includes projects capable of both developing the businesses managed by the Group and promoting the wellbeing of local areas, workers and stakeholders in general, following a rationale of mutual benefit.
Working together with the stakeholders, a path of growth for the Group and the surrounding ecosystem will be designed which gives full value to the prosperity of the local community over the medium and long term.
The increase in Ebitda, consistent with the objectives on the UN’s 2030 Agenda, will be pursued thanks to investments for shared-value projects corresponding to roughly 77% of the total for 2025-2029, around 4 bn€ out of the total 5.5 bn€ allocated under the Plan.
Some key sustainable projects are:
- projects related to the transition to the circular economy
- sustainable water management projects
- energy transition and renewable energy projects
Over the five-year period 2025-2029, it is estimated that the economic value distributed to stakeholders (which includes employees, shareholders, suppliers and public administration) will be approximately 11.5 billion euro.