Iren S.p.a. · MIL:IRE
Iren — Italian Sustainability Week 2022
30 slides from Iren's conference presentation, Sep 7, 2022
Slide 1: Investor Presentation
Investor Presentation September 2022 1
Slide 2: Presenting Team
Presenting Team Giulio Domma Carlotta Scarrone Selina Xerra Giulia Mancini CSR – Head of Head of IR IR – ESG Analyst Head of CSR planning & reporting 2
Slide 3: Iren Key Credit Highlights
Iren Key Credit Highlights Solid position in Italy as one of the largest multi-utilities concentrated in some of Italy’s wealthiest 1 regions in the northwest Strong business risk profile which benefits from the significant contribution of fully regulated 2 water, gas, and power distribution and was
Slide 4: Agenda
Agenda 1 2 33 I. Iren at a Glance I. H1 2022 Key I. Sustainability Company Overview 1H Results Overview Sustainability Strategy in Business Plan@2030 Figures at Iren Group II. Business Plan@2030 II. Debt Structure II. Sustainability Targets III. Sustainable Financing Framework at a Glance 4 4
Slide 5: Company Overview
1 Company Overview
Slide 6: Iren at a Glance
Iren at a Glance Energy Infrastructure Water Service Urban Waste Collection REGULATED ACTIVITIES (46% of Ebitda) Hydroelectric Green Certificates District Heating Urban Waste Disposal QUASI >7million REGULATED ACTIVITIES INHABITANTS IN IREN’S 3 (24% of Ebitda) LEGACY REGIONS Generation Energy Market
Slide 7: 2021 – 2030 Strategic plan ambitions
2021 – 2030 Strategic plan ambitions Investments ’21 – ‘30 7
Slide 8: Business Plan@2030: Strong growth led by the most ambitious Investment Plan ever
Business Plan@2030: Strong growth led by the most ambitious Investment Plan ever m€ 1.800 1.450 1.250 927 1.016 EBITDA CAGR ’20-’30 7% FY '20 FY '21 FY '24 FY '26 FY '30 EBITDA BREAKDOWN BY ACTIVITY 2021 2030 28% 30% 46% 58% 14% 24% Regulated Quasi regulated Merchant 8 Sustainable investments: 80% E
Slide 9: Strong cash flow generation underpinning sound capital structure profile & metrics
Strong cash flow generation underpinning sound capital structure profile & metrics * * Net of capex contribution/incentives for €1.4b 9
Slide 10: 1H Results Overview
2 1H Results Overview
Slide 11: H1 2022 Financial Key Figures
H1 2022 Financial Key Figures EBITDA evolution (millions of euros) +9% H1 '21 H1 '22 Δ Δ% +8% 72 Revenues 2,004 3,712 1,708 85.2% 28 542 21 563 516 503 3 -64 -13 EBITDA 516 563 47 9.0% EBIT 250 283 33 13.1% Group net profit 193 133 -60 -31.0% H1 ’21 One-offs Networks Waste Energy Market One-offs H1
Slide 12: Iren Debt Structure
Iren Debt Structure INTEREST RATE DEBT STRUCTURE MATURITIES 4% 1% 562 562 564 13% 34% 383 49% 83% 50 61 16% Fixed Swap Variable Green Bonds EIB-CEB Bonds Loans 2022 2023 2024 2025 2026 2027 96% of gross debt at fixed interest rate New Sustainability Financing Framework published Average long-t
Slide 13: Sustainable Financing Framework at a Glance
Sustainable Financing Framework at a Glance Iren New Sustainable Financing Framework Green Financing Component Sustainability-Linked Component • Additional sustainable projects among revised eligible • 4 KPIs covering all the IREN's business activities and in green categories line with the Business
Slide 14: ESG KPIs ahead of Business Plan targets
ESG KPIs ahead of Business Plan targets Green transition Local presence Service quality Carbon On track DH volumes Physical Ahead On track 9.7 Intensity gCO2/kWh 392 321* Mcm 99 Stores’ # 97 Customer 8.8 Satisfaction Index H1 '21 H1 '22 H1 '21 H1 '22 H1 '21 H1 '22 Biomethane On track Sorted waste On
Slide 15: Sustainability Strategy in Business Plan@2030
3 Sustainability Strategy in Business Plan@2030
Slide 16: Sustainability at Iren Group
Sustainability at Iren Group 3 Pillars 4 Focus Areas Green Transition Local presence Service quality Circular economy 17% Water resources 19% Decarbonisation 30% Resilient cities 34% Enabling factor: People 16
Slide 17: Decarbonization
Decarbonization Targets Main projects • Targets consistent with SBTi ambition, in line with WB2D scenario, and to carbon neutrality by 2040 • Renewable capacity growth (0.5GW new power capacity by 2026 and 2.2 GW by 2030) • Emissions’ reduction also through: • divestment of thermo assets (not functi
Slide 18: Circular Economy
Circular Economy Targets Main projects • Roll-out of “Pay as you throw” model (64% of inhabitants in 2030 vs 18% in 2020) • Increase in waste treatment capacity (+3.0 Mn tons by 2030 with 21 new plants, 14 already authorized) • Strong focus on waste-to-material (+2.0 Mn tons by 2030) • Innovative pr
Slide 19: Water Resources
Water Resources Targets Main projects • Renovation of water supply networks to reduce network leaks by replacing old pipes • Grid districtization to increase the management efficiency thanks to a modular-based system • Grids digitalization program with the installation of smart meters and sensors, d
Slide 20: Resilient Cities
Resilient Cities Targets Main projects • DH extention, through the saturation of our plants and the development in existing and new areas • Growth in e-mobility through development of public / semi-public charging infrastructure (4k in 2030) and electrification of local public transportation (~15 e-
Slide 21: People
People Targets Main projects • New hires mainly under 30, to support new areas development and to cover generational turnover • Skills development, through the increase in training hours per capita, to make Iren even more competitive on the market • Strengthening of our diversity and inclusion proje
Slide 22: Remuneration Policy
Remuneration Policy CEO/GM Senior Executive with strategic responsibilities Gate: maintain Investment Grade status Weight: 35% of gross annual remuneration Weight: 36.2% of gross annual (target value) remuneration (average target value) Short-term incentive plan Objectives (weight): Objectives (weig
Slide 23: Iren’s alignment
Iren’s alignment Iren Group’s sustainability strategy is consistent with the main issues focused by the most important international frameworks and ESG rating agencies. 23
Slide 24: Annexes
A Annexes
Slide 25: FY2019 – FY2021 Financial Key Figures
FY2019 – FY2021 Financial Key Figures (millions of euros) FY2019 FY2020 FY2021 Δ% 2021 vs 2020 Leverage Trend Revenue 4,275 3,726 4,956 32.9% NFP EBITDA NFP/EBITDA Networks BU (energy and water infrastructures) 1046 1,041 991 -4.8% Waste Management BU 715 765 916 19.8% 2,948 2,906 2,706 Energy BU (G
Slide 26: Rating Sensitivities
Overview of Iren Rating Positioning Standard & Poor’s (BBB- / Positive Outlook) Fitch (BBB / Stable Outlook) • Iren's credit quality reflects its solid position in Italy as one • The affirmation of Iren S.p.A.’s Issuer Default Rating (IDR) Key Rating Agencies of the largest multi-utilities and its h
Slide 27: Iren Shareholding Structure
Iren Shareholding Structure FSU (Municipality of Genoa) 18.85% FCT (Municipality of Turin) 13.80% Municipality of Reggio Emilia 6.43% Munic. In Reggio Emilia Province 5.29% Municipality of Parma 3.16% Metro Holding 2.50% Municipality of La Spezia 1.81% Municipality of Piacenza 1.37% Treasury Shares
Slide 28: Iren Regulatory Framework
Iren Regulatory Framework Gas distribution Electricity distribution Water service Integrated waste collection service & regulated plants1 Regulatory period 6 years (2020 – 2025) 8 years (2016 – 2023) 4 years (2020 – 2023) 4 years (2022-2025) WACC methodology update 6 years (2022 – 2027) 6 years (202
Slide 29: Sustainability-Linked Rationale and Strategy
Sustainability-Linked Rationale and Strategy KPI#1 KPI#2 KPI#3 KPI#4 Scope 1 GHG Emissions Scope 3 GHG Emissions Water Leaks (%) Waste treated in Material Intensity (gCO2eq/kWh) (kt of CO2eq) Recovery Plants (kt) • The target is coherent with the overall IREN’s • The target is coherent with the over
Slide 30: Disclaimer
Disclaimer The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Ms. Anna Tanganelli, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the accounting info