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Financial targets

TESTATA Financial targets

Financial targets

In line with the Group's history, the new Plan continues to expect growing results, thanks to a scenario that shows good opportunities in the areas in which Hera operates. The goals of increasing value creation, cash generation and dividends have been confirmed.

Ebitda in 2027 is expected to grow by +355 m€ compared to the previous plan, reaching a total of 1,65 bn€.

Financial target 2 accordion

FINANCIAL TARGETS AND ACHIEVEMENTS

Ebitda

EBITDA
OBJECTIVE	Reaching an Ebitda coming to 1,650 m€ in 2027, with +355m€ up compared to FY2022 and in line with Group’s historical results. 1,650 mln €
DESCRIPTION	This objective is to be reached through different growth levers, both internal (+375m€) and external (+100m€), able to offset the depletion of some temporary opportunities for approximately -120 m€.
ACHIEVEMENTES	The preliminary year-end data for 2023 indicates growth in Ebitda coming to +185 m€, showing one of the greatest organic growth registered since Hera establishment, with main contributions coming from: a strong growth in the demand for value-added services and energy efficiency increased perimeter in Safeguarded, Default and Last Resort markets an effettive risk management strategy also in energy supply and trading activities the commercial value of our strong circular approach in waste treatment and energy sales the recurring contribution of M & A.

EBITDA

OBJECTIVE

Reaching an Ebitda coming to 1,650 m€ in 2027, with +355m€ up compared to FY2022 and in line with Group’s historical results.

1,650 mln €

DESCRIPTION

This objective is to be reached through different growth levers, both internal (+375m€) and external (+100m€), able to offset the depletion of some temporary opportunities for approximately -120 m€.

ACHIEVEMENTES

The preliminary year-end data for 2023 indicates growth in Ebitda coming to +185 m€, showing one of the greatest organic growth registered since Hera establishment, with main contributions coming from:

a strong growth in the demand for value-added services and energy efficiency
increased perimeter in Safeguarded, Default and Last Resort markets
an effettive risk management strategy also in energy supply and trading activities
the commercial value of our strong circular approach in waste treatment and energy sales
the recurring contribution of M & A.

Financial leverage

FINANCIAL POSITION
OBJECTIVE	Maintain the Net Debt / Ebitda ratio at 2.7x by 2027 in continuity with the current level. in continuity with the current level. ~2.7x
DESCRIPTION	The Business Plan intends to maintain the company's solid financial position through the continuous monitoring of all risk factors and a careful management of cash flows.
ACHIEVEMENTS	The preliminary year-end results for 2023 show a decrease in the Net debt/Ebitda ratio below 2.6x, an improvement compared to the 3.3x showed at FY2022. This positive trend is expected to continue over the new 5-years-plan.

FINANCIAL POSITION

OBJECTIVE

Maintain the Net Debt / Ebitda ratio at 2.7x by 2027 in continuity with the current level. in continuity with the current level.

~2.7x

DESCRIPTION

The Business Plan intends to maintain the company's solid financial position through the continuous monitoring of all risk factors and a careful management of cash flows.

ACHIEVEMENTS

The preliminary year-end results for 2023 show a decrease in the Net debt/Ebitda ratio below 2.6x, an improvement compared to the 3.3x showed at FY2022. This positive trend is expected to continue over the new 5-years-plan.

Dividends

DIVIDENDS
OBJECTIVE	Paying higher dividends: from 12.5 €cents per share paid in 2023 to 16 €cents per share in 2027 (+28% compared to the last dividend paid). 16 c€
DESCRIPTION	The plan's cash generation allows for an increasing dividend policy guaranteeing an improved financial solidity to 2027 compared to the old plan. The 2023 dividend to be paid in June 2024 is expected at 14 €cents, with an increase every year, up to 16 €cents in 2027.
ACHIEVEMENTS	In view of the positive preliminary results for 2023, the entire dividend policy has been revised upwards, foreseeing the distribution of a 14€cent dividend per share as early as June 2024, up 12% compared to the last dividend paid and higher than the growth forecast in the previous Plan (13 €cents). The new dividend policy envisages a constant annual increase until reaching a coupon of 16 €cents by 2027 (+28% compared to the last dividend paid), with net earnings per share expected to grow by an average of 7% per year. At current Hera share prices, the dividend policy guarantees an average yield of 5% and offers full visibility on prospective dividends in each year of the plan. The Total Shareholder Return, which takes into account both the expected earnings trend and the dividend yield, is over 12% on average per year.

DIVIDENDS

OBJECTIVE

Paying higher dividends: from 12.5 €cents per share paid in 2023 to 16 €cents per share in 2027 (+28% compared to the last dividend paid).

16 c€

DESCRIPTION

The plan's cash generation allows for an increasing dividend policy guaranteeing an improved financial solidity to 2027 compared to the old plan. The 2023 dividend to be paid in June 2024 is expected at 14 €cents, with an increase every year, up to 16 €cents in 2027.

ACHIEVEMENTS

In view of the positive preliminary results for 2023, the entire dividend policy has been revised upwards, foreseeing the distribution of a 14€cent dividend per share as early as June 2024, up 12% compared to the last dividend paid and higher than the growth forecast in the previous Plan (13 €cents).
The new dividend policy envisages a constant annual increase until reaching a coupon of 16 €cents by 2027 (+28% compared to the last dividend paid), with net earnings per share expected to grow by an average of 7% per year.
At current Hera share prices, the dividend policy guarantees an average yield of 5% and offers full visibility on prospective dividends in each year of the plan. The Total Shareholder Return, which takes into account both the expected earnings trend and the dividend yield, is over 12% on average per year.

Financial targets

Achievement of previous plans

The Hera Group has reached the goals set in its last three five-year business plans to 2018, 2019, 2020, 2021 and 2022, demonstrating that it is capable of operating with stability and solidity, able to guarantee a continuous creation of value for its stakeholders, slightly outperforming its operating-financial targets.

Financial KPI

	FY2022 results	FY2023 results	Guidance 2023
Ebitda (m€)	1,295.0	1,494.7	1,410.0	✓ Outperform
Net profit (m€)	372.3	417.0	384.4	✓ Outperform
Dividend per share (c€)	12.5	14.0	13.0	✓ Outperform
Ebitda CSV (m€)	670.3	776.0	760.0	✓ Achieved