Acea Group Business Plan 2019-2022 ‘‘6 th Italian Local Utilities Conference’’ Equita Milan – January 14, 2020
ACEA Group Agenda ACEA TODAY: Challenges of today and tomorrow BUSINESS PLAN 2019-2022 STRATEGY AND TARGETS BUSINESS LINE HIGHLIGHTS STRATEGIC OPPORTUNITIES CLOSING REMARKS ANNEX 2 MIL 190401 - Piano Industriale 201 ...
ACEA Group Acea Today Leader in the multi-utility market 2018 EBITDA Commercial & Water Trading 933M€ 1 ° Italian With 9 Among with 6 TWh EBITDA 2018 of electricity sold player millions the main in the water customers national players supply sector served in Lazio, in the energy Tuscany, Umbria market 77% regulated and Campania Shareholder structure Energy Caltagirone 5.0% Infrastructure Environment Market Among the with 10 Leading with more 20.7% Roma leading player in the TWh than 1.1 Capitale Italian waste Italian players in 51% distributed mln tons treatment sector the electricity electricity Suez waste distribution 23.3% treated/disposed market Source: CONSOB January 2020 3 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Pillars of the Business Plan 2018- 22 … Business Plan 2018-2022 Technology, Industrial Local focus & Operational Innovation and Growth Sustainability Efficiency Quality • Infrastructural • Sustainable • Research & • Capex discipline development development innovation applied • Operational to industrial improvement • Client-oriented • Dialogue and processes and service-based collaboration • S upply chain • Customer approach optimization experience • Balanced improvement organizational model • Group-wide innovation strategy 4 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Strong and sustainable growth 2018 2020 2022 pre-tax ROIC 11.0% >10% >11% 2019 GUIDANCE ≥ +10% EBITDA 2018 EBITDA 2019 € 933M CAPEX up by over 10% versus € 631M of 2018 NET DEBT: € 2.85B – € 2.95B NFP/EBITDA down to 2.9X EBITDA growth with +8.0% CAGR € M Multiple New BP Old BP Net NFP Income RAB up ~30% by 2022 CAPEX €4.0B CAPEX old plan € 3.1B Gori €B ATO2, €B ATO5 e Areti ATO2, ATO5 e Areti (Old Plan) 5 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Outperformed previous business plan EBITDA targets CAGR 8.0% CAGR 7.7% CAGR 8.3% €M Cross-business line actions Performance improvement and cost efficiency + Generational turnover + Strengthening operations Comm. & Trading Water Energy Infrastr. Environment • • • • Tariff increase due to Tariff increase due to Commercial Boost Expansion of existing investments investments in plants • Cost-to-serve (Peschiera / Marcio) Resilience • reduction Development of new • • Gori consolidation Penalties cancellation for plants and M&A • Delay of Maggior network losses • • Pescara Gas Tutela phase-out CIP6 incentive end • PV development 6 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Additional €900M investments Cumulative 2018-2022 Highlights €B €M (approx.) Gori consolidation and +250 additional investments ( Peschiera/Marcio ) * +200 PV growth with M&A and greenfield developments Innovation , Resiliency +250 and modernization related investments Regolato Regolato M&A Waste acceleration +100 in a circular economy perspective 7 *of which €0.5B innovation and industry 4.0 (smart meter, network districtization, automated secondary cabins, etc.) MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Sustainability growth Additional €400M sustainability- CO 2 Reduction >200 linked capex bring our Sustainability (Reduced losses, Purchase of kton effort to €1.7B overall Green Energy, Biogas Recovery) Recovering materials and energy in +70% a Circular Economy perspective +€100M +€200M +€100M Peschiera & PV Development / Marcio development M&A circular economy 500 Green Energy United Nations GWh for internal use within the Group Sustainable Development Goals (SDGs) Power Grid Risk index reduction -10% due to resiliency increase Safety inspections of maintenance +50% contractors 8 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Growing dividends vs previous business plan €800M of dividends Growing 0.75 minimum dividends vs old throughout the plan, dividend per share +€100M vs old business plan from 2020 business plan Dividend per share €/share 9 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Financial strategy 16 May 2019 - Successful placing of Euro 500 million bond under the EMTN Programm, 9 years, fixed rate 1.75%. July 2019 – EMTN programme ceiling increased to € 4bn Highlights Net Financial Position €B NFP/EBITDA Working Improved working Capital capital absorption (~€30M/year) Rating 2.8x 3.0x 2.9x BBB+ Baa2 2.8x Stable outlook Stable outlook NFP Debt Situation at 30 September 2019 • Average maturity 5.6 yrs • Average cost of debt 2.16% 10 MIL 190401 - Piano Industriale 201 ...
Water Business Line Highlights
ACEA Group Water Business Line Implementation of old BP Key Actions strategic initiatives 500k+ smart water meter and projects for water network districtization Development Focus on preservation of water , with development of a dedicated structure of a Smart Rationalization of 35+ small purification facilities Water 90% investments on Technical Quality Company for a Supply securitization, by doubling Peschiera (100M€ already included in 2019 - ’22 Plan) sustainable Gori full consolidation (1.4M clients served) usage of water, Acquisition of Pescara Gas (62k PDR) to enter in gas distribution business improving Procedure completed for renewal of concession for service quality the Peschiera-Le Capore water main, due to expire in September 2031 (July 2019) and efficiency Acquedotto del Fiora full consolidation (over 402K clients served) 12 MIL 190401 - Piano Industriale 201 ...
ACEA Group Water Business Line Key Financials CAGR 8.0% €M CAGR 10.1% CAGR 5.9% EBITDA Pescara Gas Including Gori on a yearly basis (+45M€) Old Plan ATO2, ATO5, Gori €B €B INVESTMENTS RAB 13 MIL 190401 - Piano Industriale 201 ...
Business Line Highlights
ACEA Group Energy Infrastructure Key Actions 600k smart meters roll-out start 100+ M€ for Resiliency for electricity supply continuity vs Authority guidelines Main actor of the 150MW PV between grid parity and M&A on energy transition the secondary market with projects Remote control extension on 60% of the LV/MV secondary stations enabling the decarbonization Installation of over 600km of optical fiber at the service of the existing infrastructure of the system Renovation/expansion activities on the LV/MV network for over 2,500km Agreements for the acquisition of photovoltaic plants with total capacity of approximately 25 MWp (July 2019): Total Enterprise Value: ~€75m Total EBITDA: ~€11m Feed-in tariffs provided by Conto Energia initiative 15 MIL 190401 - Piano Industriale 201 ...
ACEA Group Energy Infrastructure Key Financials CAGR 5.1% €M CAGR 6.3% CAGR 3.9% EBITDA Old Plan Distribution €B €B Metering INVESTMENTS RAB 16 MIL 190401 - Piano Industriale 201 ...
Commercial and Trading Business Line Highlights
ACEA Group Commercial and Trading Key Initiatives Strong commercial boost (3x vs. 2018) supported by a new offering model Growth of retail Increase of share of pull commercial channels (e.g. Shop, Branch and Digital) up to 50% portfolio, Strengthening of digital channels (10% on total improvement of acquisitions) service quality Operational excellence on key processes and reduction of 20% on CtS and 15% on CtC and exploitation Launch of new Value Added Services (e.g. smart of energy meters, insurance, thermal systems) transition Entrance in the flexibility market (Terna auction for UVAM assigned to Tor di Valle plant for 10 MW) opportunity Signed with ERG two Power Purchase Agreements (PPA) concerning the supply of renewable energy totalling 1.5 TWh during the period 2020-2022 18 MIL 190401 - Piano Industriale 201 ...
ACEA Group Commercial and Trading Key Financials CAGR 19.3% €M CAGR 8.2% CAGR 31.4% EBITDA Old Plan Power Mkt | Maggior Tutela CUSTOMER BASE €M Millions Power Mkt | Free INVESTMENTS Gas 19 *Investments include Commissioning Capitalizations IFRS15 MIL 190401 - Piano Industriale 201 ...
Environment Business Line Highlights
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