Slide 1: FY 2018 Financial Results
Y 2018 FINANCIAL RESULTS “ Delivering a sustainable value “ Analyst presentation
Slide 2: 2018 main highlights
2018 main highlights 2019 New BP & FTSE Mib • Business Plan to 2022 presented Strategic partnerships Q3-Q4 & Other important achievements • Wide road show to keep an open dialogue • Partnership with Eni for with stakeholders used vegetable oil • FTSE Mib inclusion • Partnership with Bio-On to produc
Slide 3: 2018 results in a snapshot
2018 results in a snapshot 282 1,031 2.8x 984 252 10.0 917 2.6x 9.5 2.5x 207 9.0 '16 '17 '18 '16 '17 '18 '16 '17 '18 '16 '17 '18 Ebitda (M€) Net Profit (M€) Net Debt/Ebitda (x) Dividend (c€) +4.7% +12.1% (3.8%) +5.3% ‘18/’17 ‘18/’17 ‘18/’17 ‘18/’17 Keep on walking the solid growth path GRUPPOHERA 02
Slide 4: Delivery of BP '14-'18
Delivery of BP ’14-’18 282 1,031 2.8x 1,020 10.0 2.5x 174 9.0 E'18 A'18 E'18 A'18 E'18 A'18 E'18 A'18 Ebitda (M€) Net Profit (M€) Net Debt/Ebitda (x) Dividend (c€) +1.1% +62.0% (10.7%) +11.1% Good execution GRUPPOHERA 03
Slide 5: Ebitda growth in all core activities
Ebitda growth in all core activities +6 +7 1,031 +40 +6 Regulated (13) 985 • Mainly Efficiencies & Cost cutting • Development capex Liberalised • Positive trend in waste prices A'17 Networks Waste Sales& Other Power A'18 • Market expansion and confirmed margins in Trading Gen. energy supply • Partia
Slide 6: Organic growth distribution
Organic growth distribution Development capex, tariffs Market expansion & Efficiencies Organic Growth and quality Top Line Growth 12.4 M€ 19.2 M€ 14.9 M€ 46.5 M€ 27% + 41% + 32% = 100% Development deployed Cross selling and market Never ending optimization effort Organic growth in line with the main
Slide 7: A conservative mix
A conservative 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 52 EBITDA from regulated activities
Slide 8: 2018 results by business in a snapshot
2018 results by business in a snapshot 293 286 464 246 252 240 424 424 231 1,031 ’18 Ebitda Liberalized Regulated '16 '17 '18 '16 '17 '18 '16 '17 '18 Business mix Networks (M€) Waste (M€) Energy (M€) 52% +9.6% +2.4% (2.3%) regulated ‘18/’17 ‘18/’17 ‘18/’17 Safe and balanced business mix continues to
Slide 9: Networks
Networks +6 464 +5 +20 +10 RAB 424 • Solid and diversified among three 3.1bn businesses Gas tenders • Tender in Udine Atem in progress Started Extra returns A'17 Water Gas Electricity D.H. A'18 • Quality premiums in water Beaten • Security premiums in gas stds • Network resiliency premium in elect.
Slide 10: Waste
Waste +11 252 Prices 246 +1 • Slight increase in all businesses +10% (6) Recycling • Sorted Urban waste collection up from 57.7% to: 62.5% • Enhanced recycling and re-use activities (WTE, selection and bio-digestion and +3% compost): A'17 Aliplast Org. Growth Other A'18 New plants +7m€ • Bio-methane
Slide 11: Energy
Energy Customer base 292 +10 • 2,524k clients (+146k ‘18/’17) +6.2% 286 (13) (3) Retail unpaid ratio • Less than 1% receivables remain unpaid <1% by retail customers after 1 year Cost to serve • A key competitive advantage is to 1st keep low cost base: Hera’s is among 1st quartile Quartile A'17 Sale
Slide 12: Below Ebitda
Below Ebitda Fin. expenses (M€) EPS (c€) 138.0 126.0 19.2 117.4 17.1 101.5 91.7 14.1 11.4 12.3 '14 '15 '16 '17 '18 '14 '15 '16 '17 '18 Tax rate (%) ROI & ROE (%) 40.2% 9.9% 10.4% 36.8% 35.1% 9.2% 9.4% 30.9% 8.7% 8.6% 8.9% 29.1% 8.6% 7.4% 7.8% ROE ROI '14 '15 '16 '17* '18 '14 '15 '16 '17 '18 *Adjuste
Slide 13: 100% of 2018 Ebitda growth is Shared Value
Creating Shared Value 375 Territory 330 19% Innovation & development of 300 territorial social-eco systems 17% Energy Smart use of energy 64% A'16 A'17 A'18 CSV track record (M€) Resources Efficient use of resources +14% 36% ‘18/’17 of Ebitda 100% of 2018 Ebitda growth is “Shared Value” GRUPPOHERA 1
Slide 14: Sound financial profile
Sound financial profile x A positive free cash generation covering dividends and part of development capex and M&A, assured a further reduction of the financial leverage enhancing potential further expansion plans. 2.5 Net Debt / Ebitda
Slide 15: Cash flows
Cash flows +734 +204 (70) (19) (50) (152) +204 (392) (67) (26) (22) (63) CF Op. NWC IFRS 9 Provision Maint. F'18 FCF Dividend Develop. Buy Net Ch. Debt capex & Min. capex back M&A Free Cash Flow Capital allocation (M€) (M€) +204 M€ (267 M€) Balancing remuneration and development GRUPPOHERA 12
Slide 16: Financial profile
Financial profile 3.2x FFO/Net Debt 27% 3.0x 3.0x 2.8x 2.6x Duration ~7Y 2.5x Fixed interest rates Portion of debt at fixed rates 85% Credit lines committed 300m€ '13 '14 '15 '16 '17 '18 Refinancing needs end ’19 395 m€ of 10y bond is due in Dec. ’19 Debt/Ebitda 350 m€ Bank loans signed at a rate: <
Slide 17: Closing remarks
Closing remarks c€ 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. 10 Proposed dividend
Slide 18: Closing remarks
Economic performances and increase 1 in return of invested capital Sound balance sheet and positive cash 2 generation underpin dividends proposed at 10c€ per share (+5.3%) Closing remarks 3 Low leverage to go for potential M&A 4 Positive 2019 expected GRUPPOHERA 14
Slide 19: Q&A and Appendix
Q&A and Appendix Further details on 2018 annual results are available in this section. Web: www.gruppohera.it
Slide 20: Annex: P&L
Annex: P&L Profit & Loss (M€) Y ’17 Y ’18 REVENUES 6,136.8 6,626.4 +8.0% EBITDA 984.6 1,031.1 +4.7% Ebitda margin 16.0% 15.6% Depreciation and provisions (505.3) (521.0) EBIT 479.3 510.1 +6.4% Financial costs (98.0) (87.1) Figurative interests (IAS) (18.2) (19.5) Income from Associates & J.V. 14.7 1
Slide 21: Annex: Waste and Water
Annex: Waste and Water Waste: Profit & Loss Water: Profit & Loss (m€) Y 2017 Y 2018 Ch. (m€) Y 2017 Y 2018 Ch. Revenues 1,083.8 1,123.7 +39.8 Revenues 859.9 878.6 +18.7 Ebitda 246.0 252.0 +6.0 Ebitda 229.9 249.7 +19.8 Waste: KPIs Water: KPIs Data Y 2017 Y 2018 Ch. Data Y 2017 Y 2018 Ch. Urban W. Vol
Slide 22: Annex: Gas and Electricity
Annex: Gas and Electricity Gas: Profit & Loss Electricity: Profit & Loss (m€) Y 2017 Y 2018 Ch. (m€) Y 2017 Y 2018 Ch. Revenues 1,980.3 2,371.0 +390.8 Revenues 2,380.2 2,462.1 +81.9 Ebitda 301.7 316.5 +14.8 Ebitda 184.5 183.5 (0.9) Gas: KPIs Electricity: KPIs Data Y 2017 Y 2018 Ch. Data Y 2017 Y 201
Slide 23: IR@gruppohera.it
For further info please get in touch with the IR team IR@gruppohera.it