a2a - 2017 company profile - amazon s3 · considerably lowering its economic risk profile • born...
TRANSCRIPT
a2a2017
CompanyProfile
December 2017
Our Results• Positive 2016 results were achieved: EBITDA up by
almost 18%, strong growth in Net Profit.Investments were up by 23%
• With respect to these external dynamics, the Groupreacted by continuing with the initiatives toimprove operational efficiency, which helped tosustain the profitability
• Debt optimization continued posting satisfactoryresults also in 2016
• A dividend of 0.0492 euros per share, up by 20%,was submitted to AGM approval
• A2A medium-term financial strategy is aimed atlengthening the average debt maturity,maintaining an adequate financial flexibility andlowering the cost of debt to support the Companyrating
• A2A adopts a prudent energy risk policy, part of itsEnterprise Risk Management model, whosepurpose is to further develop and integrate riskmanagement activities into the business process
Our Responsibilities• A high weight of green components
characterizes A2A asset portfolio. Large scalerenewable production (hydroelectric, WTE), highefficiency production (cogeneration with lowerCO2 emissions) and innovative technologies toincrease energy savings (LED lighting). A2A mayalso leverage on a large and loyal customer baseas a natural hedge for its energy portfolio.
• These mark the Company commitment tosustainability, further strengthened in 2016.
• The shift to a traditional governance model,occurred in June 2014, facilitates decisionmaking and emphasizes the central role of theBoard of Directors
• Milan and Brescia cities are the majorshareholders with a joint control
A2A - THE LEADING ITALIAN MULTI-UTILITY
Business units: top strengths
2
Environmentn. 1 for electricity produced by WTE plants
Energy Retailmarket leader for quality and customer satisfaction
Generation & Trading∼2 GW hydro installed capacity in Italy
This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither it nor any part of it shall
form the basis of or be relied upon in connection with any contract or commitment whatsoever. Some information contained herein and other material discussed at the meetings may include forward-looking information based
on A2A’s current beliefs and expectations. These statements are based on current plans, estimates, projections, and projects and therefore you should not place undue reliance on them. Forward-looking statements involve
inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited
to changes in global economic business, changes in the price of certain commodities including electricity, gas and coal, the competitive market and regulatory factors. Moreover, forward-looking statements are current only at
the date on which they are made.
Networks and District Heatingincumbent in its 3 key gas areas first domestic operator in DH
Our World
• A2A is active in environment, energy retail,networks and district heating, generation andtrading – a business diversification which spansfrom regulated to market exposure thusconsiderably lowering its economic risk profile
• Born in 2008 from the merger of AEM, ASM andAMSA, A2A operates throughout Italy,predominantly in Lombardy. The activities inMontenegro were deconsolidated as of July 2017
• The business units of the company have a firstclass asset base - both plants and networks. Longterm concessions increase visibility
• A2A business model is very flexible. It allows foroptimizations both in the business units andacross them
• The current strategy has been set out in the2017-2021 Strategic Plan. The main lines of thePlan are the following:
- Relaunch: growth in environment, smartnetwork and energy services
- Regeneration: active role in the energy markettransformation
- Reshape: buying options in smart city and greeneconomy
- Discipline in operations and capital structure- Dialogue & engagement with key stakeholders- Digital & technological transformation
EBITDA expected to grow to around 1.3€ bn in2021, cumulated CAPEX of the period equal toaround 2.5 € bn.
A2A AT A GLANCE
Local
utilities
A2A in 2016
Italian utilities 2016 EBITDAA2A shareholding structure(3)
CURRENT CORPORATE CREDIT RATING
Standard & Poor’s
BBB/A-2 Outlook Stable
Moody’s
Baa3 Outlook Stable
Financial Highlights
(3) At December 31, 2016. Recent updates available at the following link.
3
0
20.000.000
40.000.000
60.000.000
80.000.000
0,70
0,80
0,90
1,00
1,10
1,20
1,30
1,40
Vo
lum
es
€/s
har
e
Volumes (right-hand scale) Price
A2A is the Blue Chip of the local utilities
0.8%
3.1%
25.0%
25.0%
46.1%
100.0%46.1%
53.9%
Free Float
Municipality of Milan
Municipality of Brescia
Norges Bank
A2A S.p.A. (treasury shares)
46.1%Total
(1) 2016 figures restated after the completion of the Purchase Price Allocation (PPA) process on LGH Group assets.(2) Group net income adjusted for the impact of extraordinary items: 2016 = 377 €M; 2015 = 278 €M; 2014 = 175€M; 2013 = 156€M
A2A BUSINESS PORTFOLIO
Ordinary EBITDA equal to 1,103 €M
(1) Equal to 1,132 €M, calculated as Reported EBITDA (1,231 €M) net of non recurring items (128 €M) and EBITDA from “Corporate” (-29 €M)(2) Infrastructure activities: electricity and gas networks, heating distribution and integrated water cycle. Energy efficiency activities: heat generation, recovery and sales, public lighting and other energy efficiency
services.
Sources: A2A Strategic Plan, 2016 Results & Business Plan Update; Company Annual Reports
2016EBITDA(1)
4
GENERATION & TRADING
Fuel sourcing
Powergeneration
Whole-sale &Trading
352 €M 31%
ENERGY RETAIL
Electricity and Gas sales
free market regulated
market
ENVIRONMENT
120 €M 11%
Industrial Waste Treatment
Collection and street sweeping
Urban Waste Treatment
Material Recovery
Electricity and Heat production
EPCG(Montenegro)
Power generation
Electricity networks
69 €M 6%
NETWORKS & HEAT(2)
Integrated Water Cycle
Electricity networks
Gas networks
HeatDistribution
Cogeneration, heat recovery and
sales
Energy Efficiency Services
Public Lighting
SMART CITY
Telephony and Internet access
Data transmission
Video-surveillance
6 €M 1%
NETWORKS HEAT
69 €M 6%285 €M 25%231 €M 20%
SIGNIFICANT SYNERGIES ACROSS THE BUSINESS UNITS
Put option on EPCG was exercisedin July 2017
Deconsolidationas of H2 2017
Mostly Quasi-Regulated Merchant Low Volatility RegulatedMerchant High-Volatility
with Regulated itemsQuasi-RegulatedRisk
Profile
A2A GEOGRAPHICAL PRESENCE (AS OF H2 2017)
5
G
G
GG
G
G
PL
G
DHE G
W
G W
E G
E
DHG
G DH
DH
DH
DH
DH G
G
PL
PLPL
C
C
C
C
C
C
C
C
C
C
Italy Lombardy
Legenda
EnvironmentWaste collectionTreatment plantsBiogas/Biomass plantsWaste-to-Energy
Generation & TradingHydroelectricCCGT CoalFuel OilSolar
E
GW
PL
C
DH
Technological partnerships abroad on waste treatment plants (UK, Spain and Greece)
NetworksElectricityGasWaterPublic Lighting
HeatCogen. & thermal plantsThermal solar plantsDistrict Heating
A2A: ASSET PORTFOLIO
6
A2A 2017-2021 STRATEGIC PLAN IN A NUTSHELL
STRATEGICFRAMEWORK
RELAUNCH
• Growth in environment, smart networks and energy services
• Focus on low-risk businesses
REGENERATION
• Active role in the energy market transformation
• Flexible fleet to serve shortening EU markets
• Re-alignment with EU Winter Package • Development by adjacencies
RESHAPE
• Buying options in smart city and green economy
• From pilot projects to market solutions
DISCIPLINE• Operational excellence project
adoption • Further deleveraging, with higher
Capex and DPS • Dividend target of 7.5 €cent in 2019
confirmed
DIALOGUE
• Extension of multi-stakeholder forum and territorial sustainability reports
• Sustainability target in management MBO • People: ageing policy, welfare, managerial
development, talent management, employer branding
DIGITAL
• Further Business Units process digitalization • New HR ERP
• Strong fiber development• New IT and digital services to municipality
• Strong investmentsin automation
STRATEGIC PLAN GUIDELINES
7
Key financial highlights
• Ordinary EBITDA(1) to grow from around 1.1 €Bn in 2016 to around 1.3 €Bn in 2021
• Capex for the period around 2.5 €Bn
• Net Debt(2) from 3.136 €Bn in 2016 to around 2.5 €Bn in 2021 (NFP/EBITDA from 2.5x to 1.8x at the end of the period)
• Ordinary Net Income(2) from 377 €Mn in 2016 to 470 €Mn in 2021
• Dividend policy: - dividend target of 7.5€cent in 2019 confirmed;- minimum 60% pay-out ratio at 2021.
NO LONGERA GEN.CO.
Growth mainly driven by non-generation
businesses
Higher option value from generation
assets and Winter Package
Strong CAPEX increase in regulated/
quasi-regulated markets
Annual investments 50% higher than past three
years’ average
Further optimization from operational
excellence
Local aggregations, M&A, RES/DER
and other projects to strengthen A2A
positioning and to mitigate risk
Updated Project Pot
BOOST IN BUSINESSES
WITH PROVEN TRACK RECORD
ROOM FORUPSIDES
A2A: what kind of company going forward?
OUR FUTURE IS SUSTAINABLE, GREEN, OPEN, SMART
(1) Reported EBITDA in 2016 = 1,231 €M. Includes non recurring items for 128 €M.(2) 2021 guidance on Net Debt and Net Income does not take into account the
effects of the put option exercised on EPCG.
Waste, Retail and Networks to lead the growth
More options for generation and a more conservative energy scenario
Resilience of net income growth to commodity prices
Dividend target of 7.5 €cent in 2019 confirmed
Positive free cash flow generation with increasing Capex and dividends
Key takeaways 2017-2021
A2A SUSTAINABILITY PLAN GOALS
8
CIRCULAR ECONOMY
DECARBONIZATION
SMART GRID AND SERVICES
PEOPLEINNOVATION
2016 results2020 goals
99.0%
67.0%
80.0%
56.2%
84%
98.86%Urban waste sent for recycling or energy recovery
Separated waste collection in the communities served
Impact of the recovery capacity of the material in the Group's plants on the urban waste collected
392.5
-234
1,260
Carbon intensity in electricitygeneration (gCO2/kWh)
CO2 avoided thanks to the extension of the district heating network (ktonnes/year)
Green electricity sold (GWh)
417
769
-161
The CSI Total in “multi-client of reference” surveys (CERVED DataBank) with a value never below
90%
customers with online A2A Energia services400,000
Million euro invested in the Smart City area10
268,818
1.9
92.4%
regional workshops with 30 actions to be implemented
inspections/year at the roadwork sites of the A2A Group
Target employees involved in SmartWorking projects
15
4,000
20%
2 workshop (11 actions)
1,406
5%
2020 goalalready achieved