Iren S.p.a. · MIL:IRE
Iren — Investor Day (2023)
48 slides from Iren's investor day presentation, 2023
Slide 1: Full Year 2022 Results and Business Plan at 2030 Update
Shaping tomorrow everyday FULL YEAR 2022 RESULTS AND BUSINESS PLAN AT 2030 UPDATE
Slide 2: Results, Business Plan
RESULTS BUSINESS PLAN ACTION STRATEGY FINANCIALS ANNEXES PLAN
Slide 3: FY 2022
3 INVESTOR DAY 2023 FY 2022 STRATEGY ACTION PLAN FINANCIALS ANNEXES
Slide 4: EBITDA growth in line with guidance despite challenging energy scenario
4 INVESTOR DAY 2023 EBITDA growth in line with guidance despite highly challenging €M energy scenario EBITDA BRIDGE • Networks: Positive contribution from yoy increase in allowed +3.8% FY 2022 revenues, manly in Water +6.4% • Waste: Favourable impact from energy prices on Treatment and consolidation
Slide 5: FY 2022 results by business unit
5 INVESTOR DAY 2023 €M FY 2022 Networks ✓ Acquired water service in eastern Ligurian municipalities (+34,000 inhabitants served) +8% vs. 2021 +7% vs. 2021 ✓ Acquired new gas networks (Vercelli and Savona) STRATEGY Waste ✓ Added 366 kt/y of new waste treatment capacity ✓ +0.9 M inhabitants served due
Slide 6: FY 2022 income statement
6 INVESTOR DAY 2023 €M FY ’21 FY ’22 ∆ ∆% • Higher depreciation as a result of acquisitions and new industrial investments carried-out during the period REVENUES 4,956 7,863 2,907 58.7% • Increase of provisions for bad debt linked to doubling of FY 2022 EBITDA 1,016 1,055 39 3.8% revenues; so far, n
Slide 7: Net debt and cash flow
7 INVESTOR DAY 2023 €M FY 2022 +441€M (+15%) 165 3,347 310 2,906 277* STRATEGY (117) 898 241 (1) (1,055) ACTION PLAN Gross investments 1.485€M Operating cash flow -815€M FY’ 21 Ebitda Taxes, financial Change in Technical capex M&A Dividends M-t-M FY’22 FINANCIALS charges & others NWC Derivatives ANN
Slide 8: Business Plan
RESULTS BUSINESS PLAN ACTION FY 2022 FINANCIALS ANNEXES PLAN
Slide 9: Green transition, local presence, service quality
9 INVESTOR DAY 2023 FY 2022 Green transition Local presence Service quality STRATEGY ACTION PLAN Support energy independence Strong technical expertise Reinforce competitive strength FINANCIALS Counter climate change and Capability to execute Repower EU Expand offerings of integrated responsible use
Slide 10: Scenario trends and strategic responses
10 INVESTOR DAY 2023 Green Local Service transition presence quality FY 2022 Energy crisis characterized by higher gas costs Development of renewable capacity and of and need for supply independence energy communities STRATEGY Disruption of logistics supply chains with impact Increase in material re
Slide 11: Main KPIs of the new plan in line with previous plan
11 INVESTOR DAY 2023 All main KPIs of the new plan are in line with the previous one thereby confirming the effectiveness of our strategy FY 2022 GROSS CAPEX 23-30 EBITDA CAGR NET DEBT/EBITDA €10.5B 7.4% 2.7x STRATEGY VS. €10.3B vs. 6.9% ACTION PLAN FINANCIALS €B €B x 2.4 Executed 1.87 3.2 3.2 21-22
Slide 12: Green transition investments
12 INVESTOR DAY 2023 of investments for a Green transition FY 2022 STRATEGY ACTION PLAN CARBON INTENSITY NET WASTE TREATMENT CAPACITY WATER LEAKAGES gCO2/KWh Mt % FINANCIALS 339 298 5.1 32 4.1 27 20 176 4.7 4.0 31 ANNEXES 2.7 2022 2026 2030 2022 2026 2030 2022 2026 2030 SUSTAINABLE SUSTAINABLE FINAN
Slide 13: Local presence investments
13 INVESTOR DAY 2023 of investments are Local presence FY 2022 STRATEGY ACTION PLAN M inhabitants served MW FINANCIALS 400 5 5.5 Waste collection 3.8 4.8 Water service ANNEXES 4.3 150 2.9 100 0.65 0 30 0.6 0.7 District heating 2022 2026 2030 2022 2026 2030 13 New BP Old BP
Slide 14: Service quality investments
14 INVESTOR DAY 2023 of investments to improve our Service quality FY 2022 STRATEGY ACTION PLAN PURIFICATION CAPACITY E.E. & GAS SMART METERS INCREASE IN LOCAL PRESENCE FINANCIALS ANNEXES E.E. INTERRUPTION FREQUENCY WATER NETWORK INSOURCING OF CUSTOMER OPERATIONS’ (SAIFI) DISTRICTUALIZATION KEY ACTI
Slide 15: Green renewable capacity development
15 INVESTOR DAY 2023 3.0 GW 0.4 • Development of 3 GW of photovoltaic (70%) and wind (30%) FY 2022 onshore and offshore capacity including co-development 2.2 Green projects transition • 15% of total renewable capacity with “development and management” business model • Acceleration of growth with min
Slide 16: Investment breakdown
16 INVESTOR DAY 2023 B€ Networks Power Gas Water FY 2022 Treatment and material 10.5 7.5 7.1 Waste Collection recovery 5% 1% 1% 9% 13% 13% RES, Hydro & District 6% 2% 2% Energy storage Theremoelectric Heating STRATEGY 26% 32% 37% Market Gas Power Iren Plus E-mobility 19% 23% 15% Smart Energy Public
Slide 17: Gioia Tauro and southern Italy initiatives
17 INVESTOR DAY 2023 Gioia Tauro FY 2022 Regasifier STRATEGY Iren can play a pivotal role on a number of additional Waste to Energy in the strategic initiatives by leveraging: South of Italy ACTION PLAN Iren crucial industrial capabilities across several project phases: Waste to Chemical Development
Slide 18: Action Plan
RESULTS BUSINESS PLAN FY 2022 STRATEGY FINANCIALS ANNEXES
Slide 19: Networks business plan
19 RAB INVESTOR DAY 2023 €M 2,100 2,800 Network enhancement to improve operational efficiency and service quality resulting in RAB growth 1,330 FY 2022 Inorganic growth through consolidations and tenders also in the South of Italy 2022 2026 2030 STRATEGY Upgrade to «smart grid» by accelerating inves
Slide 20: Networks EBITDA
20 INVESTOR DAY 2023 FY 2022 730 €M 140 STRATEGY 20% 540 130 90 413 100 86 3.6€B ACTION PLAN 79 21% 460 350 59% 248 FINANCIALS 2022 2026 2030 Gas Electricity Water ANNEXES Water Gas Electricity • Stable WACC • Inflation impact on costs recovered through tariffs and RAB revaluation • Efficiencies
Slide 21: Waste business plan
21 INVESTOR DAY 2023 Sorted waste 67% 76%* Territorial expansion (M&A, consolidations and FY 2022 tenders) to protect plant flows 2022 2030 Push on sorted waste collection with roll-out of * Only on legacy regions “pay- as you throw” model Net waste flows Mt 5.1 2.7 STRATEGY Push for automation and
Slide 22: Waste EBITDA
22 INVESTOR DAY 2023 FY 2022 €M 440 STRATEGY 350 36% 264 320 ACTION PLAN 2.0€B 64% 250 205 FINANCIALS 100 120 59 ANNEXES 2022 2026 2030 Treatment & material recovery Collection • Positive effect of inorganic growth in collection • Contribution of new treatment and material recovery plants
Slide 23: Energy business plan
23 INVESTOR RES capacity 3,600 DAY 2023 RES development integrated with customer portfolio 850** Long-term PPAs for effective energy management MW 1,360 on third-party renewable plants 745 10 2,130* Boost of Energy Communities 145 730* FY 2022 Offshore wind co-development 620 620 620 2022 2026
Slide 24: Energy EBITDA
24 INVESTOR DAY 2023 FY 2022 450 €M 14% 370 STRATEGY 120 316 110 20 16% 2.8€B ACTION PLAN 129 90 70% 310 99 FINANCIALS 170 88 ANNEXES 2022 2026 2030 RES & Storage Thermo District heating • New RES capacity development • Divestment of thermoelectric asset (merchant base) • Extention of district heati
Slide 25: Market business plan
25 INVESTOR DAY 2023 Customer base Customer base growth and customer value increase through: 2.6 - Electrification of consumptions M 2.4 FY 2022 - Further boost of Iren Plus Cross-selling services 2.2 (penetration rate from 32% in 2022 to 39% in 2030) 2022 2026 2030 Development of energy communities
Slide 26: Market EBITDA
26 INVESTOR DAY 2023 FY 2022 €M 210 STRATEGY 24% 170 30 10 ACTION PLAN 0.7€B 120* 180 160 76% FINANCIALS 14 ANNEXES 2022 2026 2030 Clients & services E-mobility • Full recovery of customer portfolio value • Contribution of E-mobility • Growth in product and service margins thanks to energy communiti
Slide 27: Smart Solutions business plan
27 INVESTOR DAY 2023 Development of energy communities on the "producer" Energy communities FY 2022 or "seller" model according to customer needs Development of integrated services portfolio MW 400 complementary to energy communities for long-term 150 value generation 100 STRATEGY 0 30 2022 2026 203
Slide 28: Smart Solutions EBITDA
28 INVESTOR DAY 2023 FY 2022 €M STRATEGY 19% 48 40 ACTION PLAN 0.9€B 30* 20 FINANCIALS 81% 18 Energy efficiency Energy communities ANNEXES 2022 2026 2030 • Contribution of energy communities «producer model» • Public/private partnership for the energy efficiency of public buildings * EBITDA related
Slide 29: Financials
RESULTS BUSINESS PLAN ACTION FY 2022 STRATEGY ANNEXES PLAN
Slide 30: EBITDA growth to 2030
30 INVESTOR DAY 2023 FY 2022 1,870 €M +580M€ 1,450 STRATEGY 1,055 +170M€ ACTION PLAN -60M€ FINANCIALS 2022 2026 2030 +100M€ ANNEXES +30M€ 226 330 460 70% of EBITDA from regulated and semiregulated activities
Slide 31: Cash flow and net debt evolution
31 INVESTOR DAY 2023 €B FY 2022 0.2 2.0 5.1 9.5 3.3 (1.2) STRATEGY ACTION PLAN (8.7) FINANCIALS Operating cash Net Derivatives Equity injections Dividends flow investments & others & asset disposal ANNEXES Scrupulous balance between Cash Flow generation and investments
Slide 32: Debt profile and ratings
32 INVESTOR DAY 2023 €B 5.1 ~2.40% FY 2022 4.6 <2.00% 1.60% 3.3 Average duration STRATEGY 3.2x 3.2x Net debt/ 2.7x EBITDA (x) Fixed rate debt ACTION PLAN 2022 2026 2030 2022 2023-2024 2025-2030 * FY 2022 FINANCIALS BBB - Positive ANNEXES 76% 90% ~100% BBB Stable 2022 2024 2030
Slide 33: Reduced execution risk and plan strengths
33 INVESTOR DAY 2023 FY 2022 • Iren strategy fits perfectly with EU mainstream and sector macro-trend STRATEGY • Several strategic projects funded through Repower EU resources ACTION PLAN • Regulated assets as protection against inflation and rising interest rates • Lower Execution Risks: reduced ex
Slide 34: Plan financial summary
34 INVESTOR DAY 2023 FY 2022 STRATEGY ACTION PLAN * Includes third party investments and contributions FINANCIALS ANNEXES
Slide 35: Dividend policy confirmed
35 INVESTOR DAY 2023 FY 2022 Dividend per share, c€ 10% Dividend policy confirmed CAGR 14.6 STRATEGY 13.3 12.1 Strengthened investment plan 10.5 11.0 ACTION PLAN 0.5 Dividend Increased visibility on plan execution: most of payout ratio the projects planned for 2026 already authorised or in execution
Slide 36: Annexes
RESULTS BUSINESS PLAN ACTION FY 2022 STRATEGY FINANCIALS PLAN
Slide 37: Iren at a glance
37 INVESTOR DAY 2023 INHABITANTS IN 3 REFERENCE REGIONS FY 2022 Energy Infrastructure Water Service Urban Waste Collection • RAB Electricity distribution: • RAB water cycle • 1.9 Mn tons of 502 m€ management: 1,330 mln€ municipal waste • RAB Gas distribution: 724 m€ • 31.2% water network leaks colle
Slide 38: EBITDA and EBIT by business unit
38 INVESTOR Mn Eur Bn Eur DAY 2023 730 540 3.6 413 390 Networks 210 260 1.6 FY 2022 440 350 264 2.0 Waste 123 130 180 1.0 STRATEGY 450 3.0 370 316 ACTION PLAN 240 1.1 Energy 182 190 0.7 FINANCIALS 170 210 0.4 14 60 100 Market -95 ANNEXES 0.6 0.9 48 44 Smart 20 10 40 20 solutions 2022 2026 2030 2023-
Slide 39: Regulatory periods and WACC
39 INVESTOR DAY 2023 GAS ELECTRICITY Integrated waste DISTRIBUTION DISTRIBUTION WATER SERVICE collection service & regulated plants1 FY 2022 Regulatory period 6 years (2020 – 2025) 8 years (2016 – 2023) 4 years (2020 – 2023) 4 years (2022 – 2025) WACC methodology 6 years (2022 – 2027) 6 years (2022
Slide 40: Energy price scenario
40 INVESTOR DAY 2023 FY 2022 PUN (€/MWh) 303.1 108.5 80.2 PSV (€cent/smc) 121.9 39.0 23.7 STRATEGY ETS (€/Ton) 80.9 82.3 91.1 Clean spark spread - PSV ACTION PLAN (€/MWh) 22.5 5.2 2.7 Hydro Green Certificates (€/MWh) 42.9 45.8 76.7 FINANCIALS Energy Efficiency Certificates (€/TEE) 256.8 250 250 ANNE
Slide 41: Gas distribution concessions (ATEM)
41 INVESTOR DAY 2023 FY 2022 ATEM EXPIRY AREA EXPIRY AREA EXPIRY STRATEGY Piacenza Tender ongoing Torino 2030 Genova 1 Expired Reggio Emilia 2040 Parma 2030 Parma Expired ACTION PLAN Genova 2032 Vercelli 1 2030 Reggio Emilia Expired Parma* 2027 FINANCIALS Vercelli Expired Vercelli 1 2023 Piacenza 2
Slide 42: Hydroelectric and water concessions
42 INVESTOR DAY 2023 FY 2022 Electric AREA EXPIRY AREA Hydroelectric plant power Expiry (MW) STRATEGY Parma 2037 Piemonte 1 Pont Ventoux-Susa 157 2034 Piacenza 2037 ACTION PLAN Expired (2010) Reggio Emilia Expired Piemonte 2 Valle Orco e S. Mauro 300 issued PPP proposal Torino 2033 S. Lorenzo, Monca
Slide 43: Sustainability KPIs
43 Use of Sold Products (gas) Fuel and Energy Related Activities INVESTOR DAY 2023 -4.5% -10% 328 332 -47% FY 2022 317 317 298 KPI#1 176 Scope 1 GHG Emissions Intensity (gCO2eq/kWh) 2018 2019 2020 2024 2026 2030 Baseline STRATEGY 500 480 422 418 KPI#2 2.297 2.520 2.465 -25% -13% 1.848 Scope 3 GHG Em
Slide 44: Power generation carbon intensity
44 INVESTOR 2020 2022 2026 2030 DAY 2023 332 339 Power generation carbon 298 intensity (scope 1), FY 2022 176 gCO2/kWh SUSTAINABLE FINANCING FRAMEWORK 95% 100% 52% STRATEGY Certified renewable electricity purchased (scope 2), % 0% USE OF SOLD PRODUCTS -9% ACTION PLAN -25% (GAS) Scope 3 emissions -16
Slide 45: Sorted waste collection and waste recovery
45 INVESTOR 2020 2022 2026 2030 DAY 2023 69.3% 70.0% 76.2% 74.6% FY 2022 Sorted waste collection, LEGACY REGIONS % NEW REGIONS 63.1% 61.1% 75.3% 72.9% STRATEGY 2,310 Waste recovered in Iren plants, 1,670 SUSTAINABLE FINANCING kton FRAMEWORK 836 ACTION PLAN 492 44 FINANCIALS Biomethane produced 34 fr
Slide 46: Wastewater capacity and water network leaks
46 INVESTOR 2020 2022 2026 2030 DAY 2023 3,970 3,850 Wastewater plants 3,527 3,526 FY 2022 capacity, k equivalent inhabitants STRATEGY 281 268 265 Water withdrawals from the 261 environment, liters/inhabitant/day ACTION PLAN 33.3% 31.2% LEGACY REGIONS FINANCIALS 26.5% Water network leaks, % SUSTAINA
Slide 47: District heating and green electricity
47 INVESTOR 2020 2022 2026 2030 DAY 2023 116 District heated volumes, 101 105 FY 2022 Mcm 97 STRATEGY Eco-vehicles on total 67% fleet, 32% % 19% 18% ACTION PLAN 3,500 2,500 Green electricity sold to 1,652 FINANCIALS retail clients, GWh 326 ANNEXES 700 500 Energy saving from Iren 324 products/service
Slide 48: Employment, development, diversity and welfare
48 INVESTOR 2020 2022 2026 2030 DAY 2023 +2,900 +4,000 +2,177 NEW HIRES*, N. Employment, 30 FY 2022 27 27 development and TRAINING HOURS PER 25 enhancement of CAPITA, N. skills 92% 92% 100% 100% EMPLOYEES EVALUATED ON PERFORMANCE**, % STRATEGY 30.0% 26.5% 22.8% 23.4% WOMEN IN MANAGERIAL Diversity RO