InvestorNews

EBITDA grew at a strong pace, posting 7.5% growth on a like-for-like basis, driven by organic growth and M&A

The outperformance achieved at EBITDA level – with adjusted EBITDA reaching 716 million euro, representing an increase of approximately 50 million euro compared with the like-for-like figure for the first half of 2025 – was driven by approximately 43 million euro of recurring components of organic growth, while M&A transactions contributed for the remaining 7 million euro.

A progress achieved across all operational areas

When assessing the quality of the EBITDA growth, we are pleased to note the positive contribution from all strategic business areas, amongst which the Energy area stands out, with an increase of 31 million euro, or a 15.3% hike on a like-for-like basis, mostly driven by strong results from sales on the free market.
In Networks, where EBITDA grew by 5.8% on a like-for-like basis, we benefitted from the significant investments made in the past, which are now included in the current Regulatory Asset Base of 4.2 billion euro. As a matter of fact, there are more than 520 million of investments that have already been completed but are not yet generating returns, due to the regulatory time lag. However, they already represent a secured component of future returns, which further strengthens the visibility of Hera’s growth.
In Waste, which posted an EBITDA rise of 1.8%, we could count on the strong performance of all business segments, with continued price growth in the non-regulated activities and an additional 7-million-euro contribution from the inclusion in the consolidation scope of the most recent acquisitions, SEA and Sostelia, which have further expanded Hera’s offering of specialised services.

Annual targets of external growth already hit

We expect the M&A component to play an even more significant role in determining annual EBITDA, considering that the contribution of Sostelia and SEA, fully consolidated only from March, will be reflected over the full six-month period in the second half of the year, compared with just four months in the first half, with the chance to reach a total amount of 20 million euro.
Therefore, we can already state that we have achieved our 2026 M&A-led growth targets, having completed financial investments totalling 142 million euro.

An increasingly structural EBITDA, generated in infrastructural businesses

The last financial year in which we could, to some extent, rely on results achieved by skilfully capitalising on temporary opportunities connected to extraordinary events of the past was the year 2025. Thus, the performance of these first months of 2026 should be considered almost entirely linked to activities that can be repeated over time.
Furthermore, almost two-thirds of the EBITDA generated in the first half of 2026 derives from our involvement in infrastructure businesses, as is also clearly illustrated by the new presentation organised by strategic business areas that we have adopted for the first time in our reporting, breaking down the activities in Networks, Waste, Energy and Other Services.
The new reporting approach clearly shows that the quality achieved at the EBITDA level is remarkable: not only because of the recurring nature of underlying components, but also because of the balanced contribution of the various business areas.

A share of 44% of EBITDA generated by
regulated businesses provides a solid
foundation for ensuring visibility and resilience
to Group's results throughout economic cycles
and any crises that may arise in the external
environment.

The momentum behind EBITDA growth is the result of a commitment to investing that we have significantly intensified over time

Hera invested approximately 600 million euro in development capex and M&A during the 2015-2019 five-year period. Over the 2020-2024 period, the cumulated amount came close to 1.5 billion euro, while the 2025-2029 Business Plan envisages total investments for 3 billion euro – an amount that is twice the level of the previous five-year period.

This progression in investments, which we
have planned over time and then
consistently delivered, reflects careful
scheduling of activities.

Over the past ten years, year after year, investment plans have continued to increase, following a deployment spread out over time. This pace was further accelerated in the Plan to 2029 for the next five years, as it benefits from the development investments already made in the past, whose cash flows support their financing while avoiding pressure on the financial structure. Against the backdrop of continued intensification of our investment effort over time, investments increased by 2.6 times compared to those of first-half 2025, with 86 million euro of additional development capex compared with the previous year and a further 142 million dedicated to acquisitions.

The first half of the year was also characterised by a sharp rise in P&L’s bottom line and significant cash generation

The bottom line increased at a rate close to 16% despite the additional IRAP charge of 4 million euro, a temporary tax measure related to the first half of the year.
Counting on strong cash generation, during the first half of the year we were also able to cover more than 220 million euro of gross development investments, distribute 239 million euro in dividends to our shareholders and finance acquisitions and share buyback outflows for a total amount of 157 million euro, resulting in only a slight increase in net financial debt, of around 304 million euro. We could therefore maintain the leverage at 2.75x: still a very conservative level, which leaves us with ample room to finance any further growth opportunities.

All in all, during the first half of the year, we
continued to execute an intensive investment
programme, achieving returns that supported
EBITDA growth, with an increasingly balanced
contribution from the different strategic
business areas, while also generating cash
flow that allowed us to keep our financial risk profile firmly under control.

Furthermore, the significant contribution from EBITDA generated in the Energy Supply area reflects a customer shift from the Gradual Protection Service to free-market contracts at a faster pace than expected.
This result, which enhances the visibility of future cash flows, thus represents a substantial foundation on which we can rely to finance the increasing investments envisaged in our Business Plan to 2029.

First-half performance provides clear evidence that the Group has significantly accelerated all its activities, bringing forward the execution of its capex plan and delivering investments that provide greater visibility to the expected cash generation

A like-for-like Net Profit rising by 16% strengthens the Total Shareholder Return profile, which represents an absolute priority on our agenda.