Iren S.p.a. · MIL:IRE

Iren — FY2020 Earnings Presentation

29 slides from Iren's earnings presentation, Mar 25, 2021

  1. Slide 1: Iren Results FY 2020

    IREN RESULTS FY 2020 25th March 2021

  2. Slide 2: 2014-2020 Economic and Financial growth

    2014 -2020 Economic and Financial growth EBITDA BRIDGE (m€) NFP/EBITDA (m€) Cagr ~6.4% NFP EBITDA NFP/EBITDA 2,948 2,706 2,457 2,372 2,453 2,286 2,169 150 907 20 927 3.2x ~90 3.0x 3.0x (~10) 2.9x 2.8x 3.2x 640 ~100 3.6x 814* 820 866 917 927 (60) 640 678 FY '14 GC expiry Organic Synergies Consolid. E

  3. Slide 3: FY 2020 Sustainability path

    FY 2020 Sustainability path CIRCULAR ECONOMY WATER SOURCES DECARBONIZATION RESILIENT CITIES PEOPLE • Acquisition and creation of new • Division of the networks into • Increase in thermal and • Extension of district heating • Competence enhancement and recovery plants small and equal areas (districts

  4. Slide 4: A year of growth despite the pandemic

    FY 2020 A year of growth despite the pandemic KPIs EBITDA BRIDGE (m€) m€ FY '19 FY '20 Δ Δ% +1.1% +5.7% Revenues 4,275 3,725 -550 -12.8% 917 46 1 907 20 927 Ebitda 917 927 10 1.1% 858 14 15 (59) (27) Ebit 452 416 -36 -8.0% Group net profit 236 235 -1 -0.4% Tech. Capex 524 685 161 30.7% FY '19 One of

  5. Slide 5: Networks EBITDA bridge

    NETWORKS Organic growth & synergies exceed negative regulation + Organic growth through an +0.9% EBITDA BRIDGE (m€) increased RAB led a rise of +3.9% Ebitda of 16m€ 373 12 4 373 3 376 359 + Positive impact of 10m€ from (14) (2) synergies + Investments are in line with last year despite Covid emergen

  6. Slide 6: Waste EBITDA bridge

    WASTE Ebitda up thanks to organic growth & consolidation + Margins normalization on +9.6% EBITDA BRIDGE (m€) collection activities 13 2 173 + I.Blu and Unieco positive 158 contribution for 11m€ + Saturation of WTE plants, through the reorganization of flows FY '19 Collection Treatment FY '20 + Incre

  7. Slide 7: Energy EBITDA bridge

    ENERGY Reduction for opportunistic choice in hydro & lower heat margins + Positive ancillary services (81m€ -16.7% EBITDA BRIDGE (m€) vs 71m€ in 2019) -11.2% 274 + Increase of DH volumes now at 242 13 228 96.7mcm 4 5 215 (32) (21) (15) + Contribution of energy efficiency projects FY '19 One off '19

  8. Slide 8: Market EBITDA bridge

    MARKET Margins’ stabilization and volatile scenario led the growth + Margins normalization thanks to +33.1% EBITDA BRIDGE (m€) the recovery of negative ‘19 +47.4% scenario and commercial policy 16 2 143 4 147 28 + 14m€ of extra return due to 110 commodities price volatility 97 (13) + Customer base a

  9. Slide 9: Profit and loss

    FY 2020 Profit and loss FROM EBITDA TO GROUP NET PROFIT (m€) FY '19* FY '20 Δ Δ% EBITDA 917.3 927.3 10.0 1.1%  Higher depreciation led by capital intensive Depreciation -403.6 -440.9 investments and consolidation Provisions to bad debt -37.2 -61.7  Release of Hydroelectric provision funds for 19m€

  10. Slide 10: Cash-flow and NFP

    FY 2020 Cash-flow and NFP NET FINANCIAL POSITION BRIDGE (m€) +242m€ 149 26 2.948 2.706 198 (63) 685 (265) (364) (124) 31.12.19 Net Profit D&A, NWC Variation Capex Consolidation Dividends SBB Derivatives 31.12.20 provisions and other  The cash flow generation partially offsets the growing investment

  11. Slide 11: Financials

    FY 2020 Financials INTEREST RATE DEBT STRUCTURE MATURITIES 4% 2% 12% 562 562 422 39% 45% 231 84% 59 61 14% Fixed Swap Variable Green Bonds BEI Bonds Loans 2021 2022 2023 2024 2025 2026  96% of gross debt at fixed interest rate and 4% of assimilated instruments (45% Green Bond, 14% EIB gross debt at

  12. Slide 12: Closing remarks

    FY 2020 Closing remarks MAIN FY 2020 TAKEAWAYS 2021 EXPECTATIONS  Ebitda increase despite pandemic and several positive one-offs Organic growth leveraging on further capex acceleration reported last year Energy scenario: recovery in volumes and prices  Negative Covid impact on Ebitda: 15m€ Integra

  13. Slide 13: Annexes

    Annexes

  14. Slide 14: Iren at a glance

    FY 2020 Iren at a glance Energy Infrastructure Water Service Urban Waste Collection REGULATED ACTIVITIES Hydroelectric Green Certificates District Heating Urban Waste Disposal QUASI >7million REGULATED ACTIVITIES INHABITANTS IN IREN’S 3 REFERENCE REGIONS Generation Energy Market Special Waste UNREGU

  15. Slide 15: Ebitda breakdown by activity

    FY 2020 Ebitda breakdown by activity 2019 2020 27% 29% 49% 49% 24% 22% Regulated Quasi regulated Merchant Regulated Quasi regulated Merchant Networks 100% Networks 100% Waste 89% Waste 80% Energy 47% Energy 64% Market 100% Market 100% Regulated and quasi regulated Merchant Regulated and quasi regula

  16. Slide 16: Sustainability Ratings

    FY 2020 Sustainability Ratings SCORE A/AAA 29,7 A/A Advanced 72,63 E+ 16 PAST CASHFLOW & CLOSING ESG EBITDA NETWORKS WASTE ENERGY MARKET P&L FINANCIALS ANNEXES ACHIEVEMENT NFP REMARKS

  17. Slide 17: Business units' results

    FY 2020 Business units’ results NETWORKS WASTE m€ FY '19 FY '20 Δ Δ% m€ FY '19 FY '20 Δ Δ% Revenues 1,046 1,041 -5 0% Revenues 715 765 50 7% Ebitda 373 376 3 1% Ebitda 158 173 15 9% Electricity 75 79 4 5% Collection 47 60 13 28% Gas 89 85 -4 -4% Water 209 212 3 1% Treatment & disposal 111 113 2 2% E

  18. Slide 18: Capex plan

    FY 2020 Capex plan Strong capex plan in Network, mainly in water for the improvement 200 3.700 of the infrastructure and the construction of new purification plants 250 900 Investments in energy concerning the expansion of district heating, 600 1,050 energy efficiency projects and the thermoelectric

  19. Slide 19: Actual progress vs business plan targets

    FY 2020 Actual pogress vs business plan targets EBITDA BRIDGE (m€) 20 1,160 110 50 70 927 907 +63m€ capacty market +35m€ Energy scenario +30m€ DH expansion 20 +15m€ Hydro volumes +10m€ new thermo combined cycle -20m€ MSD -27m€ TEE FY '20 One off '20 Networks Waste Energy Market 2025E Growth is drive

  20. Slide 20: Ebitda progress by SBU

    FY 2020 Ebitda progress by SBU NETWORKS EBITDA BRIDGE (m€) 1.3b€ of Investments to significantly increase RAB by 700m€, reaching 2.93b€ by the end of 2025 444 413 Capex devoted to develop water purification plants, in order to 373 376 319 336 342 complete our circular vision also in the integrated w

  21. Slide 21: Ebitda progress by SBU

    FY 2020 Ebitda progress by SBU ENERGY EBITDA BRIDGE (m€) Over 1b€ of capex to expand district heating, improve the flexibility 328 of generation plants and to sustain energy efficiency interventions 318 274 Significant increase in thermoelectric production thanks to the new 265 234 241 gas combined

  22. Slide 22: Regulatory framework

    FY 2020 Regulatory framework Gas Electricity Water Integrated waste collection distribution distribution service service Regulatory period 6 years (2020 – 2025) 8 years (2016 – 2023) 4 years (2020 – 2023) 4 years (2018-2021) WACC methodology 6 years (2016 – 2021) 6 years (2016 – 2021) 4 years (2020

  23. Slide 23: Networks concessions

    FY 2020 Networks concessions GAS CONCESSIONS WATER CONCESSIONS ELECTRICITY CONCESSIONS ATEM Expiry AREA Expiry AREA Expiry Genova 1 Expired Piacenza* Expired Torino 2030 Parma Expired Reggio Emilia* Expired Parma 2030 Reggio Emilia Expired Genova 2032 Vercelli 1 2030 Vercelli Expired Parma 2025 Piac

  24. Slide 24: Hydroelectric and waste concessions

    FY 2020 Hydroelectric and waste concessions HYDROELECTRIC CONCESSIONS MAIN WASTE CONCESSIONS Electric Power AREA Expiry AREA Hydroelectric plant Expiry (MW) Parma** 1st in ranking Piemonte 1 Pont Ventoux-Susa 157 2034 Piacenza** 1st in ranking Expired Reggio Emilia Expired Piemonte 2 Valle Orco e S.

  25. Slide 25: Shareholding structure

    FY 2020 Shareholding structure FCT (Municipality FSU (Municipality of Turin) of Genoa) 13.80% 18.85% >50% Public entities IREN’s Shareholders are more than 50%: Municipality of Genoa ~19%, Municipality of Turin Public ~14%, Emilia Municipalities (Reggio Emilia, Parma, Piacenza and other minor Munici

  26. Slide 26: Public entities/shareholders

    FY 2020 Public entities/shareholders IREN SHAREHOLDING STRUCTURE TRADE REGIME OF PUBLIC SHAREHOLDERS’ SHARES Total Voting Non- Freely negotiable Shareholders Total Shares % % Negotiable shares rights negotiable shares (not (under specific Shareholders Total Shares shares included in the FSU Municipa

  27. Slide 27: Scenario

    FY 2020 Scenario FY '19 FY ’20 Δ% Gas Demand (bcm) 73.8 70.7 -4.1% TTF €/000 scm 135 99 -27.1% PSV €/000 scm 160 110 -31.7% Energy Demand (Twh) 319.6 302.8 -5.3% PUN (€/Mwh) 52.3 38.9 -25.7% CO2 €/Ton 24.9 24.8 -0.3% Green Cert. Hydro (€/Mwh) 92.1 99.1 +7.5% TEE (€/TEE) 260 271 +4.1% 27 PAST CASHFLO

  28. Slide 28: Balance sheet

    FY 2020 Balance sheet FY ’19* FY ’20 Net fixed assets 6,102 6,581 Net Working Capital 166 42 Funds -625 -657 Other assets and liabilities -286 -254 Net invested capital 5,357 5,712 Group Shareholders' equity 2,651 2,764 Net Financial Position 2,706 2,948 Total Funds 5,357 5,712 *Restated 28 PAST CAS

  29. Slide 29: Disclaimer

    FY 2020 Disclaimer The Manager in charge of drawing up the corporate accounting documents and the Chief Financial Officer of IREN S.p.A., Mr. Massimo Levrino, hereby declares, pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act (Legislative Decree No 58/1998), that the account

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