Slide 1: Hera-Meta integration project is now underway
Hera-Meta integration project is now underway Creating the Italian Leading Local Multi-utility Analyst Presentation, June 27, 2005
Slide 2: Hera-Meta merger: Index
Analyst Presentation, June 27, 2005 Hera-Meta merger Introduction 3 Deal structure 4 Meta 8 Strategic Framework 11 Merger value creation 14 Conclusions 17 Index 2
Slide 3: Hera-Meta agreed to merge creating a leading player
Analyst Presentation, June 27, 2005 Hera-Meta agreed to merge creating a leading player Following the agreement signed in May by Hera and Meta main publ ic shareholders, on the 24th June the Board of Directors of both companies have approved the project to integrate Meta into Hera Group within year
Slide 4: Tender offer on 29% of Meta share capital at 2,825€ per share
Analyst Presentation, June 27, 2005 Tender offer on 29% of Meta share capital at 2,825€ per share Hera will launch a partial voluntary tender offer (“Offerta Pubblica di Acquisto”) on Meta shares Tender offer price: 2,825 € per share Up to 29% of Meta share capital (minimum amount of 15% of Meta) Me
Slide 5: Meta merger into Hera
Analyst Presentation, June 27, 2005 Meta merger into Hera All Meta shares not acquired through the tender offer will be exchanged into Hera new issued shares Exchange ratio: 1,286 Hera shares for each of Meta’s Timing: 15 Dec. 2005 with legal effect at the 31st Dec. 2005 and financial effect back to
Slide 6: Post merger Organisation, Governance and Shareholdings
Analyst Presentation, June 27, 2005 Post merger Organisation, Governance and Shareholdings Hera Board of Directors will be enlarged by 3 new members appointed by Meta public shareholders and by 1 further appointed by minority shareholders (18 members in total). Following the merger the shareholding
Slide 7: The merger timetable
Analyst Presentation, June 27, 2005 The merger timetable • First and most relevant merger ever achieved in the sector reali zed between two listed companies • The transaction will be carried out in less than 12 month and the closing is expected by 2005 year-end • Hera financial report of year end wi
Slide 8: Meta is an unique and attractive opportunity of widening customer base
Analyst Presentation, June 27, 2005 Meta is an unique and attractive opportunity of widening custome r base The geographical fit enhances synergy potentials in any core bus iness Synergies are expected to be effective through an accelerated development path The new entity will serve about 70% Emilia
Slide 9: Meta sound financials contribute to strengthen balance sheet
Analyst Presentation, June 27, 2005 Meta sound financials contribute to strengthen balance sheet providing opportunities to optimise deal structure Meta reported positive economic results in 1Q 2005 Meta financial structure had no debt at year end 2004 Returns on Invested capital above sector averag
Slide 10: Meta shareholders: upside potential, downside protection
Analyst Presentation, June 27, 2005 Meta shareholders: upside potential, downside protection Market friendly transaction The combination of a cash and a shares exchange offer provides M eta shareholders with the opportunity to benefit from any Hera share price increase, maintaining a solid downside
Slide 11: Strategic pillars
Analyst Presentation, June 27, 2005 Meta integration will assure a consistent and full rounding busi ness strengthening Meta business platform offers a remarkable opportunity to progress in Hera strategy implementation Meta integration provides the new entity with a substantial oppo rtunity for stra
Slide 12: Business portfolio allows to enhance competitive positioning of the new entity
Analyst Presentation, June 27, 2005 Business portfolio allows to enhance competitive positioning of the new entity Hera – Meta will achieve leadership in all key businesses both liberalized and regulated. Meta will contribute significantly to strengthen Hera Electricity distribution business Asset b
Slide 13: Economic size and profitability of the combined entity
Analyst Presentation, June 27, 2005 Economic size and profitability of the combined entity Top ranking among Italian Multi-utilities The combined entity will present a proforma FY2004 Ebitda margin of 19% and Ebit margin about 9%. Returns on Invested Capital moving up to approx. 10%. P’04 figures He
Slide 14: The Merger will allow to create additional shareholders value by 160 million €
Analyst Presentation, June 27, 2005 The Merger will allow to create additional shareholders value by 160 million € Thanks to Hera and Meta company size and consistent business por tfolios, the merger will allow to achieve an Ebitda improvement of 20 mln €/year by 2008 The combined entity shareholder
Slide 15: Preliminary synergy estimates accounts in 20 mln €/year by 2008
Analyst Presentation, June 27, 2005 Preliminary synergy estimates accounts in 20 mln €/year by 2008 Waste Waste • Cost reduction on special waste treatments leveraging Synergies: 20 mln€ upon Meta’s CIC technology Time distribution • Market expansion of special waste business integrating respective
Slide 16: Implied value of the deal
Analyst Presentation, June 27, 2005 Implied value of the deal The transaction has an overall financial value of 486.4 mln €, approx. 1/3 about paid in cash Implied value for Meta at 7.6x EV/Ebitda 2004 Accounting for the value generated of the synergies (approx. 160 mln €), the implied EV/Ebitda 200
Slide 17: Closing remarks
Analyst Presentation, June 27, 2005 Closing remarks The project has been set up and agreed in less than 4 weeks Deal structure is confirming Hera management commitment to financial discipline and shareholders return while maintaining a market friendly approach. Tender offer will allow to optimise th