Acea Group Business Plan 2019-2022 Triennale Milan - April 2 nd , 2019
ACEA Group Agenda ACEA TODAY: Challenges of today and tomorrow MARKET SCENARIO AND TRENDS BUSINESS PLAN 2019-2022 STRATEGY AND TARGETS BUSINESS LINE HIGHLIGHTS STRATEGIC OPPORTUNITIES CLOSING REMARKS ? Q&A ANNEX 2 MIL 190401 - Piano Industriale 201 ...
is speeding up… …reached 2018 targets with double digit growth vs 2017 €933M +11% EBITDA Guidance 3-5%, IIQ >5%, IIIQ >6% €271M Net Income +50% €631M Capex +99M €2,568M NFP NFP/EBITDA 2.8x
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 Infrastructure Environment 5.0% 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 March 2019 4 MIL 190401 - Piano Industriale 201 ...
ACEA Group Market Scenario and Trends Main market trends in the multi-utility sector Decarbonization Distributed Generation • Production from renewables will • High growth of self-consumption grow from 35% (2017) to 55% Digitalization based on PV and cogeneration (2030), also pushed by « grid systems parity » • Big data analytics for a more • • Further energy storage and smart Growth of energy efficiency efficient energy system grid systems boost solutions • IOT technology allowing a better client and asset management and new business models Customer Centricity • Profit pool shifting toward the client • Urbanization and Growth of the service offering vs. Demand pure commodity circular economy Electrification • More than 2/3 of EU population live • in urban area and this trend is Expected energy demand increasing ( ~80% expected at 2050) electrification growth (i.e. e-mobility, heat pump, …) • New solutions to recycle materials to reduce urban pollution 5 MIL 190401 - Piano Industriale 201 ...
Challenges of today and tomorrow for Strong awareness of our ability to outperform again 2020 : €1.1B Target New Plan 19-22 2022 : €1.3B EBITDA Targets already outperformed Outperfomed EBITDA 2018 : €933M 2018 Results 2019 target Committed with challenging targets 2019: €916M EBITDA 2020 : €1.0B Old Plan 18-22 target 2022 : €1.1B
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 7 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets …evolved into… GRIDS TECHNOLOGY, INDUSTRIAL OPERATIONAL LOCAL FOCUS INNOVATION AND GROWTH EFFICIENCY QUALITY Grow Smart Innovate services Reshape Deliver Grow Reshape Innovate Deliver Smart ! G R I S D 8 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Strong and sustainable growth 2018 2020 2022 pre-tax ROIC 11.0% >10% >11% EBITDA growth with +8.0% CAGR NFP/EBITDA down to 2.9X € M Multiple New BP Old BP Net NFP Income CAPEX € 4.0B RAB up ~30% by 2022 CAPEX old plan € 3.1B €B €B Gori ATO2, ATO5 e Areti ATO2, ATO5 e Areti (Old Plan) 9 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 10 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets EBITDA CAGR 3 p.p. higher than old business plan CAGR 5.9% €M Old BP New business plan EBITDA CAGR 3 p.p. higher than previous business CAGR 8.8% plan (assuming equal starting point) €M New BP 11 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 12 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Innovation and Industry 4.0 60% of LV/MV Digital channels development secondary cabins 600k Smart Meter enabled with (Power) remote-control 1 500k+ Smart Meter Reached 40% of (Water) long-term goals for automated secondary cabins 10MW Smart UVAM Recruiting Tor di Valle €0.5B with advanced Plant analytics Investments Big data 100% network analytics and 1 districtization in 2022 data-driven Thermal hydrolysis in a (over 15.000 km) asset circular economy management perspective Note: (1) ATO2 e ATO5 13 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 14 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 15 MIL 190401 - Piano Industriale 201 ...
ACEA Group Strategy and Targets Financial strategy Highlights Net Financial Position €B NFP/EBITDA Working Improved working Capital capital absorption 2,8 x (~€30M/year) Rating 2.8x 3.0x 2.9x 2.8x BBB+ Baa2 Stable outlook Stable outlook NFP Situation at 31/12/2018 Debt • Average maturity ~5.8 yrs • Average cost of debt ~2.2% 16 MIL 190401 - Piano Industriale 201 ...
Water Business Line Highlights
ACEA Group Water Business Line Key Actions Implementation of old BP strategic initiatives 500k+ smart water meter and projects Development for water network districtization of a Smart Focus on preservation of water , with development of a dedicated structure Water Rationalization of 35+ small purification facilities Company for a 90% investments on Technical Quality sustainable Supply securitization, by doubling usage of water, Peschiera (100M€ already included in 2019- ’22 Plan) improving Gori full consolidation service quality (1.4M clients served) Acquisition of Pescara Gas (62k and efficiency PDR) to enter in gas distribution business 18 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 19 MIL 190401 - Piano Industriale 201 ...
Business Line Highlights
ACEA Group Energy Infrastructure Key Actions Main actor of the 600k smart meters roll-out start energy transition 100+ M€ for Resiliency for electricity with projects supply continuity vs Authority guidelines enabling the 150MW PV between grid parity and decarbonization M&A on the secondary market of the system Remote control extension on 60% of the LV/MV secondary stations Installation of over 600km of optical fiber at the service of the existing infrastructure Renovation/expansion activities on the LV/MV network for over 2,500km 21 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 22 MIL 190401 - Piano Industriale 201 ...
Commercial and Trading Business Line Highlights
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