Hera S.p.a. · MIL:HER
Hera — Merger or Acquisition (July 2012)
20 slides from Hera's merger presentation, Jul 26, 2012
Slide 1: Gruppo Hera: Leading a new consolidation wave?
Gruppo Hera Leading a new consolidation wave? Hera and AcegasAps agreed integration Analyst presentation Bologna, 2012 July 26th www.gruppohera.it
Slide 2: Index
Index • Strategic rational AcegasAps fits to Hera platform pag 1 Business contribution pag 2 Leading position pag 3 Sizable increase pag 4 Integration model and synergies pag 5 Further expansion pag 6 Strategic guidelines pag 7 • Deal description Deal structure and timing pag 8 Swap ratios pag 9 Dea
Slide 3: Strategic rational
Strategic rational
Slide 4: AcegasAps fits with Hera's industrial platform
AcegasAps fits with Hera’s industrial platform Just across the regional borders • AcegasAps reference territory is close to Hera’s. Padua is located 40 km from Emilia-Romagna. Trieste Padua • Both companies come from similar M&A background. Acegas APS • Acegas Aps regional territories have Hera simi
Slide 5: The business contribution
The business contribution Business contribution (2011 EBITDA) Business indicators (2011) COMBINED Gas clients (#) 260k(2) 1.374k 1.114k 19% 81% Gas RAB (€m) ~200 ~1,050 ~850 19% 81% Electricity clients 142k 624k 482k (#) 23% 77% Water clients (#) 253k 1.437k 1.184k 18% 82% Volumes treated 331k 3.713
Slide 6: Strengthening leading position in different industries
Strengthening leading position in different industries Waste Water Gas Electricity International Strong platform to create value with limited integration risks 3 1 see annex
Slide 7: Sizable increase of economics
Sizable increase of economics AcegasAps 2007 2008 2009 2010 2011 Combined* 2010 2011 Revenues 443 481 477 506 585 Revenues 4,173 4,691 Ebitda 81 91 95 108 119 Ebitda 715 764 Ebit 31 42 44 49 53 Ebit 364 387 Net Profit pre min. 43 15 11 22 18 Net Profit pre min. 164 145 Net Profit 42 14 11 22 18 Net
Slide 8: Deploying proven integration model to extract synergies
Deploying proven integration model to extract synergies Ebitda 2011 per employee* Potential progression on AcegasAPS Ebitda (€ ‘000) +30% per employee through synergies* (€ ‘000) 85-90 AcegasAPS* ~65 Reasonable opportunities ROI 2011 10,00% (%) +36% 8,00% 6,00% +25/30 m€ per year 8.7% 4,00% 6.4% (+2
Slide 9: Opening up further expansion opportunities
Opening up further expansion opportunities Treviso – Ascopiave Turnover 1,103m€ Ebitda 95m€ Udine – Amga Vicenza – AIM Turnover 40m€ Turnover 250m€ Ebitda 14m€ Ebitda 39m€ Gorizia – Iris Turnover 32m€ AcegasAps Verona – AGSM Turnover 604m€ Investments (minorities) Ebitda 86m€ Trieste – Acegas Aps Ot
Slide 10: Main strategic guidelines
Main strategic guidelines Enhancing value for shareholders 7
Slide 11: Deal description
Deal description
Slide 12: Deal structure and timing
Deal structure and timing 2012 2013 1 Merger into HERA of 2 Public offering to minority AcegasAps AcegasAps shareholders 50.1% 49.9% Trieste Padua Municipality HOLDING Municipality 62.7% 62.7% 100% Full consolidation Target delisting Aiming at integrating into “one” Group 8
Slide 13: Swap ratios
Swap ratios Merger into HERA of HOLDING 1 AcegasAps Share capital: 188m€ NFP 06/30/’12: 6m€ Swap ratio: 0.763x New issued Hera shares: 143,38m 62.7% 34,466,941 (AcegasAps shares) Cash proceeds: 3.4m€ Public offer to minority 2 AcegasAps shareholders Own Shares : 118,883 Swap ratio: 4.16x 37.2% 20,39
Slide 14: Key highlights on deal terms
Key highlights on deal terms • Companies valuation based on business fundamentals, accounting perspective returns on recent investments/capex (i.e. 40m€ RAB in Bulgaria). • The deal doesn’t affect Hera sound financial structure. • Almost neutral on ’11 EPS upfront, accretive on EPS by 8%-11% post sy
Slide 15: Preserved shareholding and governance structure
Preserved shareholding and governance structure Share capital development Governance of Hera and AcegasAPS Hera today Hera post merger 2 1,115 41.2% m 14 BoD shares 4 58.8% Hera post Public offer AcegasAPS post delisting 10.7% 40.5% 4 1,343 m BoD shares 6 48,8% Hera municipalities Other shareholders
Slide 16: Preliminary timetable of the execution
Preliminary timetable of the execution 2012 2013 Integration project JUL AUG SEP OCT NOV DEC JAN FEB MAR APR Agreement Jul 25 Antitrust Oct 14 Town Councils Sep 1 Oct 10 Oct 15 Shareholders’ meetings Merger Jan 1 Public Offer 12
Slide 17: Closing remarks
Closing remarks AcegasAPS deal: • Is the largest M&A performed by Hera with strong industrial/strategic background • Has visible premises to extract synergies enhancing value creation potentials for stakeholders of about 8%-11% (in term of EPS) • Strengthens and further diversify shareholding struct
Slide 18: Annex
Annex
Slide 19: AcegasAps overview
AcegasAps overview AcegasAps ELECTRICITY/GAS WATER CYCLE ELECTRICITY GAS WASTE SERVICES SALE Integrated water Energy distribution to Gas distribution in Sale of electricity: Collection, Funeral and cemetery services in the areas of users connected to the Trieste’s and Padova’s Electricity sold to e
Slide 20: Bulgarian gas market: Overview of Gas distribution by regions
Bulgarian gas market: Overview of Gas distribution by regions Town of Silistra - Rilagas CityGas(2) • Population: 324k • Cities: 7 • Network completed (km): ~1,000 km Overgas(4) • RAB: ~€ 40 mln Black Sea Technology Concession: ~35 y Black Sea Company(1) RilaGas(3) Technology Company(1) AMGA Udine O