Business Plan approved, with a view to growth
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Solidly based on data from the 2016 forecast, the new Plan confirms the Group's track record of growth and responds to the most recent changes in the utility sector. Efficiency and innovative solutions fuelling organic growth to be pursued alongside opportunities for development through M&As
Today, Wednesday 11 January 2017, the Hera Group Board of Directors approved the 2020 Business Plan, with growth in economic targets and improvement in capital and financial indicators.
Operating and financial highlights
- 2020 EBITDA: € 1,080 million
- Capital expenditures and financial investments: almost € 2.5 billion
- Net financial position/EBITDA ratio to improve, reaching 2.8 by 2020
- Net profits per share to grow by roughly 5% annually over the duration of the Plan
- Dividends expected to increase, as of 2017, reaching 10 cents per share in 2020 (+11%)
Operating highlights
- 5 strategic priorities: growth, efficiency, excellence, innovation and agility
- Group development based on a balanced mix of organic growth and M&As
- Current grants confirmed in tenders for gas distribution and urban hygiene
- Objective for 2020 energy customers set at 2.4 million
- Growth in line with sector trends: Circular Economy and Shared Value, Customer Experience, Industry 4.0
Solidly based on data from the 2016 forecast, the new Plan confirms the Group’s track record of growth and responds to the most recent changes in the utility sector. Efficiency and innovative solutions fuelling organic growth to be pursued alongside opportunities for development through M&As.
In addition, the 2020 Plan is supported by considerable investments, reaching roughly Euro 2.5 billion (Euro 250 million more than the last strategic plan), which will be used to fuel growth over the five-year period, as well as to better respond to the main business trends emerging as a result of the Circular Economy and Shared Value, with respect to which the Hera Group has offered a tangible contribution to reaching 10 of the 17 objectives of the UN Agenda. Other key elements include the new needs of clientele, to be met with new solutions, and the most recent changes involving Industry 4.0 and processes of digitalisation, data gathering and analysis and diffusion in our cities of “intelligent” infrastructures. In a sector undergoing profound transformations, it will become indispensable for the Group to count on its own solidity and efficiency in order to remain astride these trends and continue to reinforce its own leadership.
The Group’s business model has been confirmed, with the objective of a 2020 EBITDA equal to € 1,080 million, i.e. € 50 million higher than the 2019 target included in the previous Plan, with significant growth coming in 2017-2018. The increase in EBITDA over the duration of the Plan amounts to almost € 200 million compared to 2015, obtained thanks to a balanced contribution coming from internal and external growth.
Tomaso Tommasi di Vignano, Hera Chairman
"Our recently approved Plan confirms a steady path of growth, sustained by traditional tools geared towards enhanced efficiency and growth by acquisitions, all reinforced by the use of new technologies. Improvements in our financial solidity will allow us on the one hand to confirm and further improve the dividend policy pursued in recent years, and on the other to consider the deep transformations currently seen in the sector as a further opportunity for development, potentially involving M&As, as has been the case in the past."
Stefano Venier, Hera CEO
"Innovation, sustainability and energy efficiency are only a few of the issues addressed by our Business Plan, which is intent on making the most of new trends such as Industry 4.0, Circular Economy and Customer Experience. Our leadership in the main reference markets has been confirmed, sustained by the competitive advantages that we have built up over the years, making us fully prepared to take on ever-changing challenges. This Plan as well has been elaborated in full respect of the financial balance that has defined us until present, with the aim of reinforcing on the one hand our credit standing while maintaining a low risk profile, and on the other continuing to create value for all our stakeholders, guaranteeing the financial flexibility best suited for further developments."