News

sachs_110 Among the conference guests there was Prof Jeffrey Sachs, of Columbia University, who played an important role in drawing up the Sustainable Developments Goals identified by the UN Agenda for 2030, which the Hera Group has chosen as a guideline for its commitment to sustainability. In its sustainability report, in fact, the multi-utility reports the shared value, i.e. the portion of EBITDA that comes from activities that generate operating margins for the company and also meet 10 of the 17 sustainability objectives set out in the Global Agenda. This share, up 10% compared to 2016, amounted to 329 million euro in 2017 (1/3 of total EBITDA) and the objective is to increase it to 40% of the EBITDA by 2021, thus contributing more and more to the needs of the area it serves and to the challenges for change. The investments already made were quite significant, and in 2017 alone contributed to generating the shared value of 200 million euro, i.e. 41% of the total. Among the main measures, there was the construction in Sant'Agata Bolognese of an important plant to produce biomethane from organic waste. In addition, the development of waste recycling through the Aliplast and Waste Recycling companies is also essential in order to fully implement the circular economy. The upgrade of the wastewater treatment service, the digitalisation of services from a Utility 4.0 perspective and, lastly, investments in innovation to make networks increasingly smart, complete the picture. [block]div:row-fluid::db:hr_press_comunicazione::box:111[/block] Moreover, in the new edition of the Sustainability Report, which from this year also offers useful food for thought on the national and international scenario, shared value has become the true hub around which Hera has organised the document's entire content, so as to highlight the contribution that the various activities make to its generation. The information contained in the report is divided into three main areas: smart use of energy, efficient use of resources, innovation and contribution to local development. 2017 Sustainability report embraces shared value https://www.youtube.com/watch?v=vRUqhHO3MGI 20180604_Sustainability_a_Hera_conference_in_Bologna_to_rethink_development.1533303274.pdf 2018-08-01 Read more valore_condiviso_870x320_eng.1533281374.png At the European Week for Sustainable Development, the multi-utility relaunches the debate on the challenges facing companies, countries and the international community, and illustrates the excellent results contained in its sustainability report, with almost 2 billion euro distributed by Hera in 2017 alone to local stakeholders and suppliers. Among the guests there was also Prof Jeffrey Sachs, one of the proponents of the UN's sustainability objectives, to which Hera contributed around 330 million euro of shared-value EBITDA last year alone sachs_110

sedeGH_110 Today, the Hera Group formalised an agreement with four credit institutions to activate a new € 200 million sustainable revolving credit line, intended to contribute to and maintain its financial solidity while at the same time enhancing the mix of financial products and instruments adopted by the company. This agreement is the first of its kind in Italy. The new credit line, named “ESG Linked RCF Facility”, introduces elements of sustainability through a bonus mechanism tied to specific environmental, social and governance objectives (ESG). In the commitment signed with the banks, indeed, a number of ESG performance measures were defined, which will determine the Group’s ability to benefit over time from more favourable rates. The sustainability objectives concern, for example, further reductions in the carbon footprint from energy production, new targets in energy efficiency and improvements in sorted waste collection. Hera has been a leader in all these areas for some time, as is recorded in its latest sustainability report, which at 2017 showed a 16% fall in the carbon footprint, a 3.6% reduction in the Group’s own energy consumption since 2013, with the goal of reaching a 5% decrease within 2020, and sorted waste at 57.7%, above the national average. After launching Italy’s first green bond in 2014, the Hera Group thus confirms its role as a pioneer in identifying innovative financial instruments linked to sustainability. "Environmental, social and governance objectives have long been a significant part of our Group's strategic planning", comments Stefano Venier, Hera's CEO, "and contribute to charting our course, in line with the goals set out in the UN's 2030 Agenda. We therefore consider it to be natural, perhaps even inevitable, for our financial instruments as well to reflect this vision, in addition to respecting the market's increasing sensitivity towards ESG issues. Hera has proven able to keep in step with this renewal in basic terms, interpreting the changes currently underway and providing itself with innovative models that now allow it not only to be appealing for the market, but also to explore paths that have never been followed before". In defining the agreement, the Hera Group collaborated with Vigeo Eiris, a leading European social and environmental rating agency. Vigeo Eiris formulated a second-party opinion concerning the importance of the measures defined and the degree of future improvements that can be expected as regards these same measures, which will determine the success of the operation. Hera was sustained within the club deal by: BBVA acting as Sustainable Coordinator, BNP Paribas and UniCredit acting as Documentation Agents, Crédit Agricole CIB acting as Facility Agent. All financial institutions acted also as Mandated Lead Arrangers. Sede Hera 20180517_press_release.1526553280.pdf 2018-05-17 Read more Sede Hera After launching the first green bond in 2014, the Group now confirms its place at the nations' forefront in the use of new sustainable financial instruments. Signed with four financial institutions, the € 200 million credit line is linked to a system of bonuses subject to reaching specific goals in environmental sustainability /group_eng/investor-relations/debt-and-rating/bond-issuances /group_eng/investor-relations/hera-strategy Hera Green Bond Hera Group strategy and shared value centrata sedeGH_110

Hera BoD approves 1Q 2018 results Financial highlights Revenues at € 1,741.3 million (+10.4%) Ebitda at € 322.7 million (+5.2%) Net profits for shareholders at € 120.5 million (+9.6%) Net debt decreased, coming to € 2,502.1 million Operating highlights Good contribution to growth coming from the main businesses, and the gas area in particular Solid customer base in Energy, increasing to roughly 2.4 million customers Management geared towards extracting efficiencies and expansion Today, the Hera Group’s Board of Directors unanimously approved the consolidated operating results for the first quarter of 2018, which confirm the ongoing positive trend and show rises in all main performance measures. These results were achieved thanks to the Group’s time-tested multi-business strategy, balanced between regulated and free market activities. This model was pursued by calibrating internal growth with the opportunities offered by the market and external development. In particular, the changes in the scope of operations witnessed during the first quarter were due to the consolidation of the Aliplast Group and Verducci Servizi, the transfer of Medea to Italgas and the exclusion of waste collection and street sweeping services in the Forlì area. M&As, instead, were concentrated above all in the energy area, with the acquisitions of Blu Ranton and 49% of Sangroservizi, in addition to 13,000 new “maggior tutela” customers served in the municipality of Gorizia through EnergiaBaseTrieste. Revenues amount to roughly € 1.74 billion Revenues for the first quarter of 2018 came to € 1,741.3 million, increasing compared to the € 1,577.8 million seen in the same period of 2017. A larger amount of commodity trading and higher revenues coming from gas and electricity sales were mainly responsible for this result, as were revenues from the waste management area and energy efficiency certificates. Ebitda rises to € 322.7 million Ebitda went from € 306.8 million in the first quarter of 2017 to € 322.7 in the same period of 2018, recording an increase of almost € 16 million (+5.2%). While this growth is due to the good performances seen in the Group’s main areas, the gas area contributed in particular, thanks to higher volumes sold and an increase in income from trading. Operating results and pre-tax profits increase, financial management improves Operating profits at 31 March 2018 came to € 197.6 million, up compared to the € 187.3 million recorded at the same date in 2017 (+5.5%). A € 5.6 million improvement was seen in financial management, coming to € 17.5 million at the end of the first quarter, thanks to efficiency in interest rates and higher income for interest derived from safeguarded customers. In light of this situation, pre-tax profits went from € 164.2 million in the first three months of 2017 to € 180.1 million in the same period of 2018, showing an increase in the rate of growth, which came to +9.7%. Net profit for shareholders grow to € 120.5 million (+9.6%) Net profit at 31 March 2018 rose to € 125.9 million, up compared to the € 115.3 million seen in 2017. € 120.5 million is the profit pertaining to Group shareholders, which increased by € 10.6 million over the € 109.9 million in the same period in 2017. These results, corresponding to a tax rate of 30.1%, are due to the Group’s continuous commitment to grasping opportunities recognised by law regarding the amortisation of the consistent investments made in a move towards Utility 4.0, in addition to tax credits for research and development and the final balance of previously acquired benefits. Roughly € 85 in investments, and a slightly improved net debt In the first three months of 2018, Group investments amounted to € 84.6 million, including the acquisitions made in the companies Blu Ranton and Sangroservizi. Operating investments grew by 5.9% and mainly concerned interventions on plants, networks and infrastructures, in addition to investments in an extensive meter substitution and in the purification and sewerage areas. Net debt improved for the third consecutive quarter, coming to € 2,502.1 million (compared to the € 2,523.0 million recorded at 31 December 2017). This was due to a positive and increasing cash generation, which among other things allowed the recent acquisitions to be financed. The 12-month rolling net debt/Ebitda ratio settled at 2.5, pointing towards further improvement in financial solidity. Gas Ebitda for the gas business, which covers services in natural gas and LPG distribution and sales, district heating and heat management, came to € 148.2 million in the first quarter of 2018, an increase over the € 135.6 million recorded at 31 March 2017 (+9.3%), thanks to higher volumes of gas sold, a rise in trading volumes and the larger scope of operations for this service. The number of gas customers rose to 1.4 million, up 1.1% over the same period in 2017, thanks to marketing initiatives. The gas business accounted for 45.9% of Group Ebitda. Water cycle Ebitda for the integrated water cycle, which covers aqueduct, purification and sewerage services, went from € 53.3 million in the first quarter of 2017 to € 55.6 million in the same period of 2018 (+4.3%), thanks above all to higher revenues from dispensing. These results also benefited from “quality premium”, granted by the regulatory authorities based on current methods for tariff calculation. The integrated water cycle accounted for 17.2% of Group Ebitda. Waste management Ebitda for the waste management business, which covers services in waste collection, treatment, recovery and disposal, went from € 64.0 million in the first quarter of 2017 to € 66.5 million at 31 March 2018 (+3.9%). This trend is mainly due to the encouraging results achieved in the area of waste treatment, which followed positive market trends. Good results were also seen in sorted waste, which rose to 59.5% compared to the 57.5% recorded in the first three months of 2017, thanks to the many projects launched over all areas served. The waste management area accounted for 20.6% of Group Ebitda. Electricity Ebitda for the electricity business, which covers services in electricity production, distribution and sales, showed a slight drop, going from € 48.4 million in the first quarter of 2017 to € 45.3 million at 31 March 2018, owing to the temporary suspension of some plants for planned maintenance. In spite of this, electricity reached the goal of 1 million customers for the first time, rising 10.6% over the first quarter of 2017, and also saw a 23.7% overall increase in volumes sold, with considerable growth in both the free and safeguarded markets. This significant result is due to the Group’s continuous reinforcement of marketing initiatives and the enlargement of its customer base. The electricity area accounted for 14% of Group Ebitda. The manager responsible for drafting the company’s accounting statements, Luca Moroni, declares, pursuant to article 154-bis paragraph 2 of the TUF, that the information contained in the present press release corresponds to the documentation available and to the account books and entries. The quarterly management report and related materials are available to the public at Company Headquarters and on the website www.gruppohera.it. Unaudited extracts from the Interim Financial Statements at 31 March 2018 are attached. PROFIT & LOSS (M€) 31/03/2018 INC% 31/03/2017 INC.% CH. CH. % Sales 1,741.3 1,577.8 +163.5 +10.4% Other operating revenues 95.3 5.5% 89.8 5.7% +5.5 +6.1% Raw material (831.4) -47.7% (732.2) -46.4% +99.2 +13.5% Services costs (538.5) -30.9% (488.8) -31.0% +49.7 +10.2% Other operating expenses (12.7) -0.7% (12.0) -0.8% +0.7 +5.8% Personnel costs (140.0) -8.0% (137.2) -8.7% +2.8 +2.0% Capitalisations 8.7 0.5% 9.4 0.6% -0.7 -7.5% Ebitda 322.7 18.5% 306.8 19.4% +15.9 +5.2% Depreciation and provisions (125.0) -7.2% (119.6) -7.6% +5.4 +4.5% Ebit 197.6 11.3% 187.3 11.9% +10.3 +5.5% Financial inc./(exp.) (17.5) -1.0% (23.1) -1.5% -5.6 -24.3% Pre tax profit 180.1 10.3% 164.2 10.4% +15.9 +9.7% Tax (54.2) -3.1% (48.9) -3.1% +5.3 +10.8% Net profit 125.9 7.2% 115.3 7.3% +10.6 +9.2% Attributable to: Shareholders of the Parent Company 120.5 6.9% 109.9 7.0% +10.6 +9.6% Minority shareholders 5.4 0.3% 5.4 0.3% -0.0 -0.1% BALANCE SHEET (M€) 31/03/2018 INC.% 31/12/2017 INC.% CH. CH.% Net fixed assets 5,792.4 109.1% 5,780.6 110.5% +11.8 +0.2% Working capital 92.3 1.7% 23.2 0.4% +69.1 +297.8% (Provisions) (576.7) (10.8%) (574.9) (10.9%) (1.9) +0.3% Net invested capital 5,308.0 100.0% 5,229.0 100.0% +79.0 +1.5% Net equity 2,805.9 52.9% 2,706.0 51.7% +99.9 +3.7% Long term net financial debt 2,739.9 51.6% 2,735.4 52.4% +4.5 +0.2% Short term net financial debt (237.8) )4.5%) (212.4) (4.1%) (25.4) +12.0% Net financial debts 2,502.1 47.1% 2,523.0 48.3% (20.9) (0.8%) Net invested capital 5,308.0 100.0% 5,229.0 100.0% +79.0 +1.5% 1Q 2018 2018-05-10 For further informations 1Q 2018 The consolidated quarterly report at 31 March shows growth in all operating and financial indicators, with a positive contribution coming from all business areas and further improvement in net debt /-/hera-bod-approves-1q-2018-results-1?inheritRedirect=true /documents/1514726/4880892/GruppoHera_relazione_trimestrale_consolidata_al_31_03_2018_eng.1525946951.pdf/eb209a34-d9c9-040c-9f99-624083c0090a?t=1610019058696 http://investornews.gruppohera.it/en/?n=55 /documents/1514726/4667212/Dati_finanziari_ed_operativi_di_sintesi_1Q_2018_eng.1525768847.xls/0def4519-5b1f-7457-26b8-3919a059699f?t=1608550138175 Press release Financial results as at 31/03/2018 Newsletter as at 31/03/2018 Fiancial data as at 31/03/2018 centrata Hera BoD approves 3Q 2018 results