Hera S.p.a. · MIL:HER

Hera — Merger or Acquisition (July 2004)

13 slides from Hera's merger presentation, Jul 6, 2004

  1. Slide 1: Acquisition of Centro Ecologico of Ravenna

    Acquisition of Centro Ecologico of Ravenna Conference call held on 6th July 2004

  2. Slide 2: Index

    ƒ Executive Summary ƒ The Deal Strategic Framework ƒ The Acquisition ƒ Asset Acquired ƒ Financial Overview ƒ Capex ƒ Synergy Potentials and Future Capex Options ƒ Conclusions Index 2

  3. Slide 3: Executive Summary

    TOPICS HIGHLIGHTS • Strategy • Reach a leading position in industrial waste treatment business. Asset rationalisation and organic growth potentials are possible thanks to the leading edge technology, the remarkable size and location of Centro Ecologico • The Deal • 100% acquisition of a NewCo specia

  4. Slide 4: The Deal Strategic Framework

    ƒ Expansion in the Special Waste Treatment Business, through the increase of complementary technologies (thermo-combustion and biological treatments) ƒ Strengthen the WTE becoming the third best player in Italy (after EDF- Fenice and Ecodeco) in the industrial waste treatment business with a 6% mark

  5. Slide 5: The Acquisition

    ƒ The deal regards the acquisition of 100% of a NewCo into which the Centro Ecologico will be merged ƒ The NewCo will include only assets with no financial debt. The main asset is a WTE plant for Special (solid and liquid) waste. ƒ The net book value of NewCo will equal the consideration paid Hera ƒ

  6. Slide 6: Asset Acquired

    Special waste Special waste PLANTS dangerous w. i dangerous w TERZI F3 TERZI F3 F3 INCL. Customer ENI (ENI) ƒ F3 WTE plant POLO POLOCHIMICO CHIMICO DI DIRAVENNA RAVENNA ENERGIA ENERGIA ENERGY ƒ F2 thermo-treatment of chlorinated gas INRETE IN RETE Liquid gas CIP66 CIP waste FIS FIS FIS F2 F2 F2 and

  7. Slide 7: Financial Overview

    Highlights (mln euro) 2000 2001 2002 2003 E2004 Turnover 24.5 22.1 25.9 23.4 25.2 Ebitda 10.7 7.8 12.8 6.9 9.0 Margin% 43.7% 35,4% 49,4% 29,7% 35,6% Ebit 6.0 3.1 7.8 1.6 3.9 ƒ Commercial relationship with onsite customers are regulated by 8 year contracts ƒ The WTE plant produce electricity sold to

  8. Slide 8: Financial overview: Turnover breakdown

    Turnover breakdown by plant Turnover breakdown by customer 25.907 25.000 24.532 16% 2002 23.377 22.108 20.000 50% 12.861 8.194 11.621 9.371 Estimated 34% turnover 15.000 701 2004: € ('000) 985 105 633 25.2 mln 565 324 2.318 2.890 1.152 2.180 Società insediate Società esterne Vendita e.e. 10.000 2.57

  9. Slide 9: Financial Overview: Waste treated and energy produced

    F3 – Waste treated F3 – Energy sold at Cip6 tariff 40.000 25.000 22.220 35.000 19.620 28.864 28.028 20.000 30.000 27.042 16.032 25.000 23.083 14.101 13.944 20.951 15.000 MWh Ton 20.000 15.000 10.000 10.125 6.571 10.000 5.000 5.000 0 0 4 P 00 01 02 03 0 4 P 04 03 00 01 02 4. 0 20 20 20 20 04 4. 20 20

  10. Slide 10: Financial overview: Centro Ecologico vs. Hera

    Highlights (mln €) Centro Ecologico HERA Turnover 2003 25,2 285,8 Ebitda 2003 6,9 62,3 Margin % 29,7% 21,8% Special Waste Treated 2003 (t.) 67,900 1,213,000 Hera Herawaste wastemanagement managementbusiness businesswill willbenefit benefit from fromCentro CentroEcologico Ecologicohigher higherprofit

  11. Slide 11: Capex

    ƒ Capex in progress ƒ 16.4 mln € capex to expand biological treatment capacity are in progress and will be completed within year end. The 86% of capex are charged to captive site customers through 8 years contracts. Those capex are financed by leasing contracts. ƒ Operating Capex (upgrading plants)

  12. Slide 12: Synergy potential and future capex options

    SYNERGIES OPTIONS CTIDA PLANT REVAMPING OF ELECTRICITY PRODUCTION FACILITIES NETWORK OF (GREEN CERTIFICATES) CUSTOMER EXPANSION OF DRYING PLANT MUD TREATMENT Capex avoid: 7,5 mln€ Revenues and cost synergies: NPV of 3,0-4,0 mln€ ca. 0.2 mln €/year 12 Synergy potential and future capex options

  13. Slide 13: Conclusions

    ƒ Hera strengthens its market position in a profitable business with high entry barriers (authorisation from authorities and inhabitants consensus) ƒ Hera has plants now located within the petrol-chemical area of Ravenna (Emilia Romagna) serving new clients (including ENI) with long term contracts ƒ

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