Slide 1: Q3 2011 Results & BP 2011-2015
Q3 2011 Results & www.gruppohera.it BP 2011-2015
Slide 2: Index
Index Q3 2011 results 1 Annex: further details WASTE 16 Business plan Annex: further details NETWORKS 20 Sector topic and Hera platform 7 Annex: further details ENERGY 24 Hera strategy 8 Ebitda growth drivers 9 Annex: Business plan by business 27 M&A strategy 10 Disclaimer 32 Ebitda by strategic are
Slide 3: Q3 2011 results at a glance
Q3 2011 results at a glance
Slide 4: 9m '11 growth rates
First 9 month 2011 results confirm solid platform 9m ’11 growth rates Strong set of achievements in first 9 18% +15.4% months despite summer period within 16% 14% Q3. 12% +10.2% 10% +8.2% 8% Growth underpinned by all businesses, 6% 4% and particularly by Energy activities with 2% commercial developm
Slide 5: First 9 month 2011 results highlights positive growth
First 9 month 2011 results highlights positive growth 9m 2011 posted a growth Ebitda growth Drivers (m€) (m€) 9m '10 9m '11 Ch. Ch.% +5.0 +5.7 466.7 431.4 +24.6 450 (1) Revenues* 2,732.9 3,039.7 +306.8 +11.2% Ebitda 431.4 466.7 +35.3 +8.2% (2) Ebit 218.2 240.5 +22.3 +10.2% 350 (3) Pre tax Profit 135
Slide 6: First 9 month 2011: Waste & Water results
First 9 month 2011: WASTE & WATER results Waste increase margins despite lower volumes Water shows enhanced volumes and tariffs 9 months results (m€) 9 months results (m€) M€ 9m '10 9m '11 Ch. % M€ 9m '10 9m '11 Ch. % Revenues 531.7 550.2 +3.5% Revenues 433.2 439.2 +1.4% Operat. Costs (298.0) (299.6
Slide 7: First 9 month 2011: Gas & Electricity results
First 9 month 2011: GAS & ELECTRICITY results Gas growth despite lower volume sold Electricity factoring in market expansion 9 months results (m€) 9 months results (m€) M€ 9m '10 9m '11 Ch. % M€ 9m '10 9m '11 Ch. % Revenues 840.3 977.2 +16.3% Revenues 999.2 1,136.3 +13.7% Operat. Costs (684.3) (798.
Slide 8: Financial issues: Capex and cash flows
Financial issues: Capex and cash flows Capital Exp. & Investments M€ 9m '10 9m '11 Capex declined following completion on waste Waste 70.0 44.8 treatment assets (WTE). Water 67.3 69.4 Gas 33.3 34.3 Electricity 31.4 20.2 Other 10.1 10.4 Net Working Capital increased by 88 m€ Holding 32.5 34.0 mainly
Slide 9: Closing remarks on Q3 interim results
Closing remarks on Q3 interim results Strong set of achievements in first 9 months despite summer period within Q3. Growth underpinned by all businesses even in slow increasing economic environment and Q3 ’11 growth rates negative impact of climate conditions. 18% +15.4% 16% 14% 12% +10.2% M&A is pr
Slide 10: Business plan 2011-2015
HER Business plan 2011-2015
Slide 11: Challenging scenario opens up opportunities for Hera platform
Challenging scenario opens up opportunities for Hera platform Business issues Hera platform Energy upstream over-capacity Flexible Energy upstream position Competition in Energy downstream Platform for cross selling and expansion Waste infrastructure shortage Unique & integrated asset base / experti
Slide 12: Sticking to multi-utility expansion strategies
Sticking to multi-utility expansion strategies HERA STRATEGIC PRIORITIES 1 Downstream expansion From 1.8 to 2.0 m customers 2.5 contracts per customer 2 Confirm gas distrib. in territory Organic growth Extract further efficiency gains 3 External growth opportunities Aimag consolidation Gas distribut
Slide 13: Consistent growth leveraging upon all drivers
Consistent growth leveraging upon “all” drivers Next 5Y Ebitda Target +60 800 800 +104 +29 607 600 343* Capex 340 400 (m€) 200 0 2010 Syn & New M&A E2015 Org. G. plants Synergies & Organic growth New Plants M&A Market expansion in energy Biomass (Enomondo) project, Development strategy continue and
Slide 14: M&A strategy focused on traditional core dimensions
M&A strategy focused on “traditional core dimensions” Ebitda growth from M&A (m€) GAS TENDERS +13 SADORI: Gas supply activity Tender calendar under way M&A ‟11-‟15 Active in northern part of Marche Hera aims at winning bids +60 m€ region (Pesaro & Ancona). for current concessions +30 34K gas clients
Slide 15: Overview on Ebitda growth by strategic areas
Overview on Ebitda growth by strategic areas Ebitda growth (m€) 18 +5.6% Cagr E2015 Ebitda 293 16 +12 +2 800 m€ +81 195 Y2010 Ebitda +98 370 119 607 m€ 289 107 Waste Energy Networks Other Waste Networks Energy Other Strategy in Waste Strategy in Networks Strategy in Energy 1. Consolidate leadership
Slide 16: Targets by business areas '10-'15
Targets by business areas ’10-’15 Ebitda growth split by business (m€) Networks Waste • Tariffs increase (avg +2% • 60% sorted collection (+12% yearly on all regulated vs 2010) and > 90% recycle/ businesses) recovery • -150 bp leakage in water nets • + 1,5 mln ton (+43%) waste • +10k km network exp.
Slide 17: Business risk exposure
Business risk exposure Risk sensitivity by business 50% of Diversified Regulated Regulatory business risks Risk factors Impacts Mitigating and Authorities 2010-2015 factored in factors • Downstream • Churn gas ~ 7% • Taking care of customer base competition • Churn E.E. ~ 12% and competitive offerin
Slide 18: Capital discipline and enhanced financial structure
Capital discipline and enhanced financial structure Capex plan* Returns (m€) (%) ROI 345 343 10.5% 8.5% 2010 E2015 NIC** (b€) 3.7 4,3 2012 2013 2014 2015 Energy Waste Network Other E2015 Cash flows Financial ratios (b€) FFO/Debt Debt/Ebitda +0.5 (0.34) 3.1x ~ 20% ~ 2.7x 15% 0.16 Operating Capex & In
Slide 19: Closing remarks: reliable and resilient company story
Closing remarks …reliable and resilient company story ~800 m€ EBITDA (+~200 m€) with marginal risks ~340/350* m€/year of capex, down by ~78 m€/year vs past 5Y, >60% on regulated activities Free cash flow of all businesses in “positive” zone Net Debt/EBITDA to 2.7 by 2015** Confirming equity story *
Slide 20: Annex: Business plan 2011-2015 - Waste
ANNEX: Business plan 2011-2015 WASTE (further details by strategic area)
Slide 21: Waste business track records
Waste business track records Hera waste mgmt track record Financial track records (m€) Cumulated capex ’02-’10 (m€) 869 M€ 2003 2004 2005 2006 2007 2008 2009 2010 Cagr 770 Revenues 285 362 482 540 554 632 642 701 +14% 651 352 Ebitda 62 86 131 151 156 186 187 195 +18% 526 303 Ebit 21 47 64 74 82 100
Slide 22: Hera growth strategy and waste market expansion
Hera growth strategy and waste market expansion Market Expansion Green certificates from Waste (m€) Focus on Expand Increase value added geographical “full service” treatments scope contracts 31 Hera sales volumes (kton) +6.8% Cagr 16 4,835 3,473 2,959 +13 % Cagr 1,608 1,864 +0.1% Cagr 1,876 2010 E2
Slide 23: Waste treatment capacity and energy generation enhancement
Waste treatment capacity and energy generation enhancement Fully integrate value chain Energy production sustains growth Hera Treatment capacity Renewable Power generation (k ton) (GWh) +1,447 Kton 26 7.150 +276 777 281 5.703 290 73 581.9 79% 74% 306.4 Third parties 90 Hera plants 26% 21% 212 2010 W
Slide 24: Waste targets '11-'15
Waste targets Full contribution from all new and started up plants ’11-’15 Ebitda growth Cash Flow significant (m€) progression (m€) +8.5% Cagr 293 195 2010 E2015 107 ROI 8.1% 14.7% Capex plan* (m€) 7 105 99 2010 E2015 39 Development 60 Maintenance Avg capex 04-10 Avg capex 11-15 *Including a portio
Slide 25: Annex: Business plan 2011-2015 - Networks
ANNEX: Business plan 2011-2015 NETWORKS (further details by strategic area)
Slide 26: Networks track records
Networks track records Hera track record Hera Market share in gas distribution Networks track record (m€) Incumbent in reference territories (% of customers) Cagr.% C2004 C2005 C2006 C2007 C2008 C2009 C2010 04-10 Revenues 452.2 592.4 662.8 763.8 769.2 924.2 893.2 +12.0% 55% Ebitda 146.2 199.9 216.3
Slide 27: Networks internal growth drivers (1)
Networks internal growth drivers (1) Visible and safe tariff enhancement Benefitting from new asset base Avg. revenue per m3 of water distributed (€/m3) Hera heating production sources (GWht) +2.9% Cagr 1.93 +8.6 % Cagr 929 1.67 20% 616 16% 17% 669 2010 E2015 Efficient 14% 28% 363 thermal energy 17%
Slide 28: Networks internal growth drivers (2)
Networks internal growth drivers (2) Economies of scale in networks management Gas (€/POD) -1.7% Cagr Average Cost per POD (€/POD) 49 +0.02% Cagr 45 155 156 2010 E2015 Electricity Water (€/POD) (€/POD) 2010 E2015 -0.9% Cagr +0.4% Cagr 147 140 275 270 smart metering and smart grid workforce manag
Slide 29: Networks targets
Networks targets Capital discipline and efficiency gains turn cash flows to positive Ebitda Capex (m€) +5.1% Cagr (m€) 370 289 217 182 2010 E2015 2010 E2015 Ebitda Capex (€/ POD) (€/ POD) 119.2 146.9 75.2 88.1 Cash Flow RAB/ NIC* (m€) (b€) 2,6 2,3 0,3 0,2 0,4 0,3 D.H. +0 0,9 E.E. 0,9 2010 E2015 Gas
Slide 30: Annex: Business plan 2011-2015 - Energy
ANNEX: Business plan 2011-2015 ENERGY (further details by strategic area)
Slide 31: Energy track record
Energy track record Hera track record Financial Highlights Gas volumes sold (ml m3) Cagr.% +0.9% Cagr C2004 C2005 C2006 C2007 C2008 C2009 C2010 04-10 2,914 2,786 2,803 Revenues 652,4 1.089,7 1.192,3 1.630,6 2.474,1 2.958,6 2.392,1 +24,2% 2,493 2,408 2,337 Ebitda 52,9 42,7 44,7 43,0 66,1 80,8 106,9 +
Slide 32: Keeping a balanced and effective energy upstream strategy
Keeping a balanced and effective energy upstream strategy Sales expansion Sales coverage Evolution of Hera Energy clients Hera Electricity provisioning mix (TWh) (m clients) 1.9 10.8 1.4 8.2 1.2 0.9 7.6 70% 1.1 Market 5.4 66% 0.8 0.7 Hera assets 2.8 34% 3.2 30% 0.4 0.1 2004 2010 E2015 2010 E2015 Ele
Slide 33: Energy targets
Energy targets Growing results and decreasing capex turn cash flow to positive Cost to serve Ebitda growth (€/contract) (m€) +2.2% Cagr -1.6% Cagr Multi-utility approach to 21.2 119 exploit economies of 107 scale Sales channels tailored 19.7 on clients‟ segment 43 Online services and electronic invo
Slide 34: Annex: Business Plan 2011-2015 (by business)
ANNEX: Business Plan 2011-2015 (by business)
Slide 35: Waste business
Waste business Economics Capex ’11-’15: 496m€ (m€) M€ 2010 E2015 Cagr. 598 496 Revenues 703.1 977.8 +6.8% Operat. costs (386.0) (512.1) +5.8% 189.8 Personnel (147.2) (173.6) +3.4% Capitaliz. 25.3 0.9 (48.7%) 306.0 Ebitda 195.1 293.0 +8.5% '06-'10 E '11-'15 M aintenance Develo pment Ebitda breakdown
Slide 36: Water business
Water business Economics Capex ’11-’15: 566m€ (m€) M€ 2010 E2015 Cagr. 545 566 Revenues 579,2 570,8 (0,3%) Operat. costs (344,7) (287,6) (3,6%) 232.2 Personnel (105,2) (117,3) +2,2% Capitaliz. 12,8 27,3 +16,4% 333.8 Ebitda 142,0 193,1 +6,3% '06-'10 E '11-'15 Maintenance Development Volume sold & n.
Slide 37: Gas business
Gas business Economics Capex ’11-’15: 476m€ (m€) M€ 2010 E2015 Cagr. 95 Revenues 1.237,1 1.593,7 +5,2% Operat. costs (1.003,3) (1.308,2) +5,5% 56 56 Personnel (66,9) (75,9) +2,5% Capitaliz. 27,0 11,8 (15,2%) Ebitda 193,9 221,5 +2,7% 39 avg '09-'10 avg E'11-'15 Maintenance Development Ebitda breakdow
Slide 38: Electricity business
Electricity business Economics Capex ’11-’15: 182m€ (m€) M€ 2010 E2015 Cagr. 39 36 Revenues 1.468,3 1.744,9 +3,5% Operat. costs (1.399,2) (1.652,6) +3,4% 24 Personnel (23,8) (29,3) +4,2% Capitaliz. 14,5 11,2 (5,0%) 12 Ebitda 59,8 74,2 +4,4% avg '09-'10 avg E'11-'15 M aintenance Develo pment Ebitda b
Slide 39: Other business
Other business Economics Business Portfolio breakdown M€ 2010 E2015 Cagr. Liberalized 47% Revenues 99,4 84,5 (3,2%) Operat. costs (66,5) (48,2) (6,9%) Personnel (18,7) (18,1) (0,7%) Capitaliz. 2,3 0,0 Ebitda 16,4 18,2 +2,1% Capex ’11-’15: 47m€ (m€) 12.7 Regulated 53% 9.4 3.4 6.0 avg '09-'10 avg E'11
Slide 40: Disclaimer
Disclaimer This presentation contains forward-looking statements regarding future events (which impact the Hera Group’s future results) that are based on current expectations, estimates and opinions of management. These forward-looking statements are subject to risks, uncertainties and events that a