InvestorNews

The year 2025 marks another milestone in our history: it demonstrates how we have successfully managed to navigate our way out of the energy crisis over the last three years. We were able, in the initial phase, to capitalise on the opportunities offered by the Ecobonus and tenders in the markets of last resort, supporting a significant reduction in financial leverage; and then, gradually - against a less volatile external environment for energy commodity prices - to integrate the temporary opportunities seized in previous years with more structural revenues.

A year of thoroughly allocated investments, at a faster pace
Considering the new operating scenario, we were able to accelerate investments and deliver the returns of a forward-looking strategy, built on a proven business model. In line with the Plan, we carried out net operating investments of approximately 950 million euro: 17% more than in 2024, with development capex strongly focused on a stronger RAB, with high visibility in terms of returns, and on the waste treatment business, where we have consolidated our leadership.

The growth in EBITDA driven by structural business components was supported by the entire portfolio
In 2025, structural EBITDA continues the uninterrupted growth that has characterised Hera’s history for over twenty years, by posting an annual increase of around 3%. This was achieved despite the lacking contribution from temporary opportunities – which in 2024 accounted for 114 million euro – led to a decline of about 3% in consolidated EBITDA, which therefore decreases from 1,588 million euro to 1,537 million euro.
The Networks area offered the greatest structural contribution to the Group EBITDA growth, of 33 million euro. This result increased its weight on total EBITDA from 32% in 2024 to the current 38% while contributing to a greater exposure of Hera portfolio to regulated activities and confirming the strong returns generated by the investments made.
The Waste area follows as the second, providing a structural contribution to the growth of Group EBITDA of 8 million euro. This reflects the strong performance achieved in both waste treatment and plastic recycling, as well as in soil remediation activities. As a result, the share of this segment increased from 23% in 2024 to the current 24%.
The Energy area, whose weight declines from 42% to 35%, nevertheless records organic EBITDA growth of 17 million euro in energy services, demonstrating Hera’s ability to develop value-added offerings and services that our customers appreciate.
 

At the end of 2025, therefore, the business portfolio
breakdown is increasingly balanced and already
very close to the optimal mix that Hera aims to
achieve by the end of the Plan, in 2029.

A well-balanced distribution of the weights of the different business areas is a key objective to ensure a controlled risk profile and minimise the fluctuations that EBITDA may experience from one fiscal year to the next.

The business component tied to Creating Shared Value grows at a rapid pace
In 2025, moreover, Hera has significantly increased sustainability investments, with 662 million euro of capex aligned with EU Taxonomy, compared to 477 carried out in 2024. The fact that sustainability is a growth driver at Hera is confirmed by the evolution of CSV EBITDA, the metric that measures EBITDA generated by Shared Value projects. With a total figure of 916 million euro, the CSV component accounted for 60% of total EBITDA in 2025, compared with 54% in 2024.

Over the past decade, the weighted average annual
growth rate of CSV EBITDA has been 13%, with a
sharp acceleration over the last five years.
 

Recurring net profit rises by approximately 4%, partly due to a significant improvement in the performance of the financial area
Despite the slight decline in the operating area, Net Profit before special items – i.e. relating to recurring components – rose by 17.6 million euro compared with 446.7 million euro in 2024, driven by a 45.2 million euro decrease in net financial expenses. In 2025, the financial optimisation effort begun in 2024 continued, enabling us to halve our financial costs over two years, partly due to the normalisation of the energy market following the 2022–‘23 period. At the end of the year, Hera’s debt structure showed that only a very small portion, amounting to 7% of the total, was subject to variable interest rates. Rating agencies also recognise Hera’s sound financial profile, with Moody’s having recently upgraded its rating, in line with the assessment provided by S&P Global. In 2025, the cost of long-term debt remained at 2024 levels, around 2.8%, even following the issue, at the start of the year, of a 500-euro million green bond.

In 2025, the structural growth was fully self-financed
Strong cash generation allowed for a full coverage of 2025 investments and paid dividends, generating an excess cash of 19 million euro. With a corresponding reduction in net financial debt, the leverage ratio – measured as the Debt-to-EBITDA ratio – stood at 2.57x, compared with 2.50x at the end of 2024: a low level that enables Hera to consider future external growth opportunities relying on significant financial firepower.

A three-year period with a cumulative total shareholder return of 77%
The year 2025 also marks the end of the current Board of Directors’ three-year term. It has been a highly rewarding period for Hera shareholders: the strong financial results over the last three years, achieved by maintaining a low-risk profile, have translated into double-digit annual capital gains, while dividends have continued to rise, providing attractive returns.

We face the changing landscape with a solid strategic approach
The majority shareholders have proposed my reappointment as Executive Chairman, ahead of the Annual General Meeting which is due to appoint the Board of Directors for the next three-year term. This term of office begins at a challenging time, following the outbreak of the conflict in the Middle East. I am nevertheless confident that our Group can meet the challenges of the external environment once again, relying on a well-diversified portfolio, with significant exposure to regulated businesses, and a low level of leverage.
Although the ongoing war has already caused significant volatility in energy prices and may have major impacts on the global economy, at Hera we can rely on our usual prudent approach to commodity management, having already put our hedging positions in place some time ago.

Our margins not only remain unchanged regardless
of energy price levels but are also largely unaffected
by the volume of energy consumed: this
significantly reduces our risk profile.

The evidence of Hera’s solid strengths provides credibility to the returns promised to shareholders
The sound results achieved in 2025 allow us to propose a 2025 dividend of 16 euro cents per share, a significant increase on the 15 euro cents paid out in the previous financial year. Based on the conservative and proven approach underpinning our strategy, I believe that, over the next three years, Hera is well placed to successfully continue on the path of value creation set out in the 2025-2029 Plan, which targets double-digit Total Shareholder Return.