Hera S.p.a. · MIL:HER

Hera — H1 2003 Earnings Presentation

19 slides from Hera's earnings presentation, September 2003

1. Slide 1: First Half 2003 results

   First Half 2003 results September, 2003

2. Slide 2: Index

   Index „ First Half 2003 Results „ Achievements of Group Targets „ Conclusions „ Appendix 2

3. Slide 3: Overview

   First Half 2003 Results Overview 3

4. Slide 4: Overview

   First Half 2003 Results Overview „ The result of a unique integration process „ Well positioned to win market share with ongoing sector liberalisation and consolidation process „ Strategy two main guidelines: ƒ Substantial scope for synergies from the recent integration ƒ Cross selling, new concessi

5. Slide 5: Income Statement

   First Half 2003 Results Income Statement „ 1st Half Group results show increase both in top line and profitability 1H2002* % 1H2003 % Increase Turnover 584,3 100,0% 659,4 100,0% +12,9% EBITDA 87,7 15,0% 122,1 18,5% +39,2% EBIT 33,4 5,7% 58,1 8,8% +73,8% Pre Tax 34,7 5,9% 45,3 6,9% +30,7% *proforma 5

6. Slide 6: Business breakdown

   First Half 2003 Results Business breakdown Turnover - 659,4 mln € EBITDA – 122,1 mln € Other Other Services Services Water Enviroment & 6,6% 3,6% Water Enviroment & 18,2% Waste 25,2% Waste 20,3% 20,3% Electricity 4,7% Electricity 8,7% Gas Gas 46,2% 46,2% Energy business benefit from seasonality fact

7. Slide 7: Business breakdown

   First Half 2003 Results Business breakdown 7

8. Slide 8: Waste: Confirmed expansion potentials

   First Half 2003 Results Waste: Confirmed expansion potentials Main drivers Financial Highlights * 1H2002* % 1H2003 % Increase „ Turnover increase of 6,0% Turnover** 124 ,4 100,0% 131,9 100,0% +6,0% ƒ Higher extra territory waste volumes treated Operating cost (65,8) (52,9%) (71,9) (54,5%) +9,3% leve

9. Slide 9: Water: Expansion at low marginal cost

   First Half 2003 Results Water: Expansion at low marginal cost Main drivers Financial Highlights 1H2002* % 1H2003 % Increase „ Turnover increase of 7,2% Turnover** 110,0 100,0% 117,9 100,0% +7,2% ƒ Higher number of clients (+4%) thanks to a further Operating cost (59,2) (53,8%) (61,2) (51,9%) +3,4% e

10. Slide 10: Electricity: Positive start of Dual Fuel Policy

    First Half 2003 Results Electricity: Positive start of Dual Fuel Policy Main drivers Financial Highlights 1H2002* % 1H2003 % Increase „ Turnover increase of 62,2% Turnover** 34,9 100,0% 56,6 100,0% +62,2% ƒ Dual Fuel policy applied to a loyal customer base Operating cost (29,3) (83,9%) (48,9) (86,4%

11. Slide 11: Gas: Benefit from Procurement savings

    First Half 2003 Results Gas: Benefit from Procurement savings Main drivers Financial Highlights „ Gas Sales increased of 10,2% 1H2002* % 1H2003 % Increase ƒ 3 new Municipalities Gas, LPG 264,4 91,8% 291,5 97,4% +10,2% (+5% clients) Other revenues 23,6 8,2% 7,9 2,6% -66,5% ƒ More favorable weather Tu

12. Slide 12: Other business: Ongoing restructuring process

    First Half 2003 Results Other business: Ongoing restructuring process Main drivers Financial Highlights * 1H2002* % 1H2003 % Increase „ Turnover significant increase: Turnover** 11,6 100,0% 42,5 100,0% +266% ƒ Heat management, Public Operating cost (6,7) (57,8%) (28,9) (68,0%) +331% Lighting and Dis

13. Slide 13: Balance Sheet

    First Half 2003 Results Balance Sheet FY2002 30-giu-03 Fixed Asset 1.202,0 107% 1.264,6 104% Working Capital 74,4 7% 122,9 (Provisions) ( 157,3) -14% ( 165,9) -14% NET INVESTED CAPITAL 1.119,1 100% 1.221,6 100% Net Equity 865,3 77,0% 882,2 72% Net Short Term financial debt 118,2 11% 112,5 9% Long Te

14. Slide 14: Achievements of Group Targets

    Achievements of Group Targets Achievements of Group Targets 14

15. Slide 15: Achievements of Group Targets: Overview

    Achievements of Group Targets Overview „ 1H2003 results are in line with the main efficiency targets: ƒ Efficiency improvement: ƒ Savings in Procurement and other operating costs ƒ Re-organisation of human resources 2003 2007 ƒ Implementing the Gas Labour G&A IT investment plan (’03/’07) ƒ Significa

16. Slide 16: Efficiency Improvements

    Achievements of Group Targets Efficiency Improvements „ Human Resources: 56,5% of 2003 BDG „ Personnel net outflow of 224 head count 200 150 113 Human resources 100 As at 31-12-2002 4.538 50 Net Flow (113) Change in Group Perimeter (111) 0 1H 2003 2003 BDG As at 1H 2003 4.314 Head count „ Incentive

17. Slide 17: Efficiency Improvements (2)

    Achievements of Group Targets Efficiency Improvements (2) 60% of 2003 BDG 12 „ Gas procurement costs saving: 10 7 ƒ The renewal of contracts will 8 guarantee slightly more competitive 6 4 procurement cost (- 2%) 2 0 1H 2003 2003 BDG „ G&A Savings recorded: 77,0% of 2003 BDG 5 4 ƒ Cost reduction and

18. Slide 18: Top Line Growth: Investment plan

    Achievements of Group Targets Top Line Growth: Investment plan 102 „ Investment: 7 Holding 20 ƒ In 1H 2003, over 102 mln € of Other Services budgeted investments have been Waste 26 realised Water 25 Electricity Gas ƒ Fea WTE plant is on track for 16 completion within 1H 2004. 8 Capacity installed (M

19. Slide 19: Conclusions

    Conclusions „ 1 Half 2003 results show top line and profitability increase in all business areas „ 1 Half results give evidence to the significant synergy potential within Hera Group „ Positive results of Dual Fuel policy and of the ongoing expansion in further municipalities „ Hera is well on track

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