Slide 1: FY 2019 Financial Results
Y 2019 FINANCIAL RESULTS 2019: a record year ANALYST PRESENTATION
Slide 2: Coronavirus issue
Coronavirus issue «GO» emergency plan timely effective 100 % active Today business Start 21st February Crisis management operations Virus-free zone Up to date Services in our territories quite effective are all guaranteed Properly guaranteeing all stakeholders GRUPPOHERA 01
Slide 3: 2019 main highlights of the diversified set of growth levers at work
2019 main highlights of the diversified set of growth levers at work Q4 Ascopiave deal • Ascopiave deal guaranteed +700K M&A and Q3 Organic Growth energy clients and positive one off results • Waste Recycling integration in ‘19 in Hasi • 2° Green Bond issued • Pistoia Ambiente acquisition Q2 Focus M
Slide 4: 2019 results in a snapshot
2019 results in a snapshot 386 1,085 1,031 3.02x 984 301 2.8x 10.0 10.0 282 9.5 917 2.6x 252 2.5x 2.48x* 9.0 207 '16 '17 '18 '19 '16 '17 '18 '19 '16 '17 '18 '19 '16 '17 '18 '19 Ebitda (M€) Net Profit (M€) Net Debt/Ebitda (x) Dividend (c€) +5.2% +6.7% (1.2%) Confirmed ‘19/’18 ‘19/’18 ‘19/’18 plan exp
Slide 5: 2019 Ebitda growth in all core activities
2019 Ebitda growth in all core activities +87 +7 1,085 1,031 +54 +17 +30 +15 (70) +14 +8 Org. G. A'18 Safeguard IFRS Org. G. M&A A'19 Q1 Q2 Q3 Q4 Y'19 M&A & Inc. 15&16 Ebitda growth by drivers Growth by Quarters (M€) +54 M€ Well ahead Outperform of Business Plan Increasing growth quarter by quarter
Slide 6: Balance growth, same mix
Y 2019 FINANCIAL RESULTS Balance growth, same mix The Group portfolio shows a multi- business industrial approach, balanced between regulated and free- market activities, which offers visible competitive advantages and underpins the value creation achieved 51%EBITDA From regulated activities
Slide 7: 2019 results by business in a snapshot
2019 results by business in a snapshot 305 480 264 293 464 252 286 246 424 1,085 36 ’19 Ebitda 29 23 Liberalized Regulated '17 '18 '19 '17 '18 '19 '17 '18 '19 '17 '18 '19 Business mix Networks (M€) Waste (M€) Energy (M€) Other (M€) 51% +3.5% +4.8% +6.7% +21.1% regulated ‘19/’18 ‘19/’18 ‘19/’18 ‘19/’
Slide 8: Networks
Networks +15.6 +1.1 480 464 (0.2) (0.2) RAB 3.2b€ • Solid and diversified among three businesses: +2.9% Premium +2m€ • Quality premium in Water business A'18 Water Gas Electricity D.H. A'19 Ebitda growth (M€) +16.3M€ +3.5% Quality above Authorities standards GRUPPOHERA 06
Slide 9: Waste
Waste Prices +15% • Increase in all type of special waste: above +6 264 +9 252 +2 Recycling (5) • Sorted Urban waste collection up from 62.5% to: 64.6% • Enhanced recycling and re-use activities (WTE, selection and bio-digestion and compost) New Bio-methane plant & Pistoia +10m€ • Pistoia landfill a
Slide 10: Energy
Energy +3 305 +23 286 Customer base +58 • Organic market expansion +64k Ascopiave deal • Customer base added: above +700k (65) Safeguarded clients • Lower margins (65m€) A'18 Safeguarded Sales & Power Heat A'19 clients Trading Gen. management Ebitda growth (M€) +19.3m€ +6.7% Third player of Italian
Slide 11: Ascopiave deal impact on 2019 annual accounts
Ascopiave deal impact on 2019 annual accounts +30.2 Gas distribution assets Special Items M€ (PD1, PD2, UD3, PN) Ascopiave Group Cap gain Gas Networks +30.2 Revaluation EstEnergy stake +81.4 3.6% HeraComm Hera Write off investments (26.0) Group +81.4 Hera stake Fiscal effects (0.7) EstEnergy in EstE
Slide 12: Below Ebitda
Below Ebitda Fin. expenses (M€) EPS (c€) 126.0 117.4 26.2 101.5 91.7 100.0 20.4 17.1 19.2 12.3 14.1 '15 '16 '17 '18 '19 '15 '16 '17 '18 '19 Tax rate (%) ROI & ROE (%) 10.4% 10.4% 36.8% 35.1% 9.9% 9.4% 9.4% 8.9% 9.2% 30.9% 8.6% 8.6% 29.1% 28.3% 7.8% ROE ROI '15 '16 '17* '18 '19 '15 '16 '17 '18 '19 *A
Slide 13: 39% of 2019 Ebitda growth is "Shared Value"
Creating Shared Value 423 Territory 375 Innovation & development of 330 territorial social-eco systems Energy Smart use of energy A'17 A'18 A'19 CSV track record (M€) Resources Efficient use of resources +13% 39% ‘19/’18 Of Group Ebitda 39% of 2019 Ebitda growth is “Shared Value” GRUPPOHERA 11
Slide 14: Better financial profile
Y 2019 FINANCIAL RESULTS Better financial profile A positive free cash generation covering dividends, capex and M&A, assured a further reduction of the financial leverage enhancing potential further expansion plans. 2.48x NET DEBT / EBITDA
Slide 15: Cash flows
Cash flows +787 +287 (23) (44) (161) (98) (51) 0 +287 (434) (583) (82) (689) CF Op. NWC Provision Maint. capex FCF '19 FCF Develop. Div. & Min. M&A Ascopiave IFRS 16 Ch. Debt capex Free Cash Flow Cap. allocation & Ch. Debt (M€) (M€) +40% Steady real debt ‘19/’18 Enhanced free cash generation funded
Slide 16: Financial profile
Financial profile 3.2x 3.0x 3.0x 3.02x FFO/Net Debt 29% 2.8x 2.6x 2.5x Duration ~6Y 2.48x Fixed interest rates 87% Portion of debt at fixed rates Credit lines committed 600m€ '13 '14 '15 '16 '17 '18 '19 Refinancing needs end ’20 5% 175 million Euro with an incidence on Net debt Debt/Ebitda (x) Solid
Slide 17: Closing remarks
Y 2019 FINANCIAL RESULTS Closing remarks Positive growth underpinned by operating, financial and tax management combined with enhancement of returns on invested capital allow to pursue a sustainable capital allocation balanced between “development” and “remuneration” to shareholders. Outperform RESU
Slide 18: Closing remarks
Economics • Economic performances highlighted growth once again • Confirmed ROE and ROI close to 10% Balance • Growing cash generation underpins deleverage sheet • DPS proposed at 10c€ as promised Closing remarks Corona- • Crisis management effective so far virus • Low exposure to macros (GDP, Commo
Slide 19: Q&A and Appendix
Y 2019 FINANCIAL RESULTS Q&A and Appendix Further details on 2019 annual results are available in this section.
Slide 20: Annex: P&L
Annex: P&L Profit & Loss (M€) Y ’18 Y ’19 REVENUES 6,626.4 7,443.6 +12.3% EBITDA 1,031.1 1,085.1 +5.2% Ebitda margin 15.6% 14.6% Depreciation and provisions (521.0) (542.6) EBIT 510.1 542.5 +6.4% Financial costs (87.1) (91.6) Figurative interests (IAS) (19.5) (21.8) Income from Associates & J.V. 14.
Slide 21: Annex: Waste and Water
Annex: Waste and Water Waste: Profit & Loss Water: Profit & Loss (m€) Y 2018 Y 2019 Ch. (m€) Y 2018 Y 2019 Ch. Revenues 1,123.7 1,190.5 +66.9 Revenues 878.6 911.9 +33.3 Ebitda 252.0 264.2 +12.2 Ebitda 249.7 265.3 +15.6 Waste: KPIs Water: KPIs Data Y 2018 Y 2019 Ch. Data Y 2018 Y 2019 Ch. Urban W. Vo
Slide 22: Annex: Gas and Electricity
Annex: Gas and Electricity Gas: Profit & Loss Electricity: Profit & Loss (m€) Y 2018 Y 2019 Ch. (m€) Y 2018 Y 2019 Ch. Revenues 2,371.0 2,971.9 +600.8 Revenues 2,462.1 2,590.4 +128.3 Ebitda 316.5 341.6 +25.1 Ebitda 183.5 178.5 (5.0) Gas: KPIs Electricity: KPIs Data Y 2018 Y 2019 Ch. Data Y 2018 Y 20