Page updated at FY'21 results
A2A asset portfolio - first class asset base and size
Generation
~2 ,2 GW of RES installed capacity
Market
Leader for quality and customer satisfaction
National operator in energy and material recovery
Networks
Incumbent in the key areas
Heat
1st domestic operator
A2A increases business resilience by reducing the level of risk
Examples of Industrial hedging:
2021 Beyond the Expectations
A2A Group Highlights (million euros) |
2021 | 2020 | 2019 | 2018 |
---|---|---|---|---|
Revenues | 11,549 | 6,848 | 7,324 | 6,494 |
Reported EBITDA | 1,428 | 1,200 | 1,234 | 1,231 |
Ordinary EBITDA | 1,397 | 1,187 | 1,192 | 1,192 |
EBIT | 660 | 554 | 687 | 588 |
EBT | 590 | 473 | 581 | 490 |
Group net income | 504 | 364 | 389 | 344 |
Ordinary Group Net income | 400 | 335 | 378 | 438 |
DPS (€) | 0.0904 | 0.080 | 0.0775 | 0.07 |
Dividend Yield (%) | 5.4% | 6.1% | 4.8% | 4.6% |
Net Financial Position | -4,113 | -3,472 | -3,154 | -3,022 |
Consolidated Capex | 1,074 | 738 | 627 | 500 |
Net Free cash flow - Change in NFP | -641 | -318 | -132 | 204 |
Manpower (units) | 13,176 | 12,907 | 12,186 | 12,080 |
DYNAMIC M&A TRACK RECORD
To view the current and historical track record of A2A acquisitions and disposals
A2A will achieve carbon neutrality on direct and indirect emissions by 2040
-30%
Group Emission Factor1
(216 gCO2/kWh @2030)
+3.9GW
New RES Installed Capacity1
+4.5Mt
Waste Not Landfilled1
31Mt
CO2 Avoided by the Group in 2021-302
~90%
Capex related to UN SDGs
18€B
10-years Cumulative Capex
~2.9€B
EBITDA @ 2030
9%
Net Income3 CAGR 2020-30
2.6x
NFP / EBITDA @2030
7k
Direct Hirings 2021-30
Notes:
(1) Comparison vs 2020A (BP 2021-30 base year)
(2) Emissions avoided through RES, energy efficiency, district heating, electric mobility
(3) Recurring Net Income
A2A Strategy designed around 2 main sustainability pillars
CIRCULAR ECONOMY
7 €B of cumulated investments in 2021-2030
ENERGY TRANSITION
11 €B of cumulated investments in 2021-2030
KEY STRATEGIC ENABLERS - SOCIAL AND GOVERNANCE
Robust growth over the entire plan period ensuring high returns and great financial soundness
2020 | 2021 | 2022 | 2023 | 2026 | 2030 | |
---|---|---|---|---|---|---|
Ordinary EBITDA(€B) (CAGR ‘20 – ’30: >8%) | 1.20 | 1.43 | 1.40-1.45 | ~1.60 | ~2.08 | ~2.90 |
Ordinary Net Profit (€M) | 335 | 400 | 330-370 | >400 | ~500 | ~780 |
NFP/EBITDA (x) | 2.9 | 2.9 | 3.0 | - | 3.4 | 2.6 |
Dividend per share (€c) | 8.0 | 9.04 | ≥8.5 | ≥8.7 | CAGR ≥ 3% |
Ordinary EBITDA ENERGY BU | €B |
Ordinary EBITDA WASTE BU | €B |
Ordinary EBITDA SMART INFRASTRUCTURES BU | €B |
A2A defines a transformative investment plan maintaining solid credit indicators
FUNDING NEEDS: 11.1 €B
Use of the capital markets to refinance existing and incremental debt, exploiting the most suitable instruments to provide diversification of sources and investors
AVERAGE EXPEXTED DEBT COST: <1.7%
Expected reduction in the average cost of debt, thanks to the persistence of a context of low interest rates and a «greenium» effect (Values based on the current curve of forward market rates).
AVERAGE LT DEBT DURATION: >7.0 years
Increase in the average maturity of the debt thanks to longer maturities on new issues
SUSTAINABLE FINANCE
Investments aligned with the UN SDGs and EU taxonomy allow for new issues of sustainability-linked bonds / green bonds
FFO/NET DEBT | (%) |
SOURCES AND USES | (€B) |
MARKET OUTLOOK
The ongoing conflict between Russia and Ukraine is further increasing the volatility of energy commodity prices, which were already at record levels before the outbreak of the war. In addition to the direct impacts on the production and sale of electricity and gas, such a price increase could lead to a general increase in inflation with particular reference to the prices of oil derivatives and foodstuffs, as well as tensions on financial markets, technological impacts and a possible increase in cyber-attacks.
FINANCIAL OUTLOOK
The A2A Group, as part of its industrial activity of generating energy carriers and marketing them on a wholesale basis, is managing the growing volatility of the price of gas both by monitoring the limits of exposure to commodity risk and by optimising its buying and selling strategies. It should also be noted that the Group, in its procurement activities, mainly operates on platforms. Should the supply situation become critical and in line with national energy policy choices, the reactivation of the Monfalcone coal-fired thermoelectric power plant and the possibility of interrupting, requested by the network operator, the supply of energy to specific industrial entities cannot be ruled out. It is also noted that recently the Law Decree 17/22 followed by the DM MITE Gas storage 2022-2023 and the Resolution ARERA 110/2022/R/GAS, required operators to bring the filling of storage to at least 90% of the available capacity.
With reference to the activity of retail marketing of electricity and gas, the increase in the price of commodities causes an increase in credit exposures to customers (even in the event of constant volumes). This greater exposure naturally generates a greater risk of default by individual counterparties and a greater financial commitment in the event of late payment. The extent of these tensions, which have been modest so far, will depend on how the crisis develops and how long it lasts.
The other business units (Waste and Smart Infrastructures) are less exposed to commodity risk. The impacts of the Russia-Ukraine conflict are therefore estimated to be indirect and, essentially, related to the potential reduction in GDP and the rise in inflation.
In order to face possible scenarios of liquidity tension, it should be noted that the Group's solid liquidity position, also supported by committed and uncommitted back-up lines (€1.7Bn as at March 14, 2022), is enabling it to manage margining calls relating to the exposure on the commodities market as well as any temporary increases in working capital due to price increases. A2A has recently successfully issued a 500 million euro bond in a very complex market context in addition to subscribing to medium-term bilateral credit lines, demonstrating the Group's ability to access capital and credit markets.
Finally, in the presence of high alert for cyber-attacks, the Group has activated a channel with the National Security leadership to exchange information, accelerating the programme to secure endpoints with advanced malware protection tools.
MARKET OUTLOOK
The ongoing conflict between Russia and Ukraine is further increasing the volatility of energy commodity prices, which were already at record levels before the outbreak of the war. In addition to the direct impacts on the production and sale of electricity and gas, such a price increase could lead to a general increase in inflation with particular reference to the prices of oil derivatives and foodstuffs, as well as tensions on financial markets, technological impacts and a possible increase in cyber-attacks.
FINANCIAL OUTLOOK
The A2A Group, as part of its industrial activity of generating energy carriers and marketing them on a wholesale basis, is managing the growing volatility of the price of gas both by monitoring the limits of exposure to commodity risk and by optimising its buying and selling strategies. It should also be noted that the Group, in its procurement activities, mainly operates on platforms. Should the supply situation become critical and in line with national energy policy choices, the reactivation of the Monfalcone coal-fired thermoelectric power plant and the possibility of interrupting, requested by the network operator, the supply of energy to specific industrial entities cannot be ruled out. It is also noted that recently the Law Decree 17/22 followed by the DM MITE Gas storage 2022-2023 and the Resolution ARERA 110/2022/R/GAS, required operators to bring the filling of storage to at least 90% of the available capacity.
With reference to the activity of retail marketing of electricity and gas, the increase in the price of commodities causes an increase in credit exposures to customers (even in the event of constant volumes). This greater exposure naturally generates a greater risk of default by individual counterparties and a greater financial commitment in the event of late payment. The extent of these tensions, which have been modest so far, will depend on how the crisis develops and how long it lasts.
The other business units (Waste and Smart Infrastructures) are less exposed to commodity risk. The impacts of the Russia-Ukraine conflict are therefore estimated to be indirect and, essentially, related to the potential reduction in GDP and the rise in inflation.
In order to face possible scenarios of liquidity tension, it should be noted that the Group's solid liquidity position, also supported by committed and uncommitted back-up lines (€1.7Bn as at March 14, 2022), is enabling it to manage margining calls relating to the exposure on the commodities market as well as any temporary increases in working capital due to price increases. A2A has recently successfully issued a 500 million euro bond in a very complex market context in addition to subscribing to medium-term bilateral credit lines, demonstrating the Group's ability to access capital and credit markets.
Finally, in the presence of high alert for cyber-attacks, the Group has activated a channel with the National Security leadership to exchange information, accelerating the programme to secure endpoints with advanced malware protection tools.
Ongoing and pro-active engagement with the financial community
In particular, on 16 December 2021 A2A approved the Policy for Managing Dialogue with Shareholders and other Significant Stakeholders of the Company.
Dividend Policy
The Strategic Plan 2021-2030 Update, despite the increase in investments, confirms the targets of dividend distribution to shareholders:
For the following years, a minimum growth of 3% per year is expected.
Dividend per share |
A2A believes that the issuance of Green Financing Instruments – including Green Bonds and Sustainability-Linked Bonds under EMTN Programme – could contribute to enabling energy transition and circular economy projects (existing or new ones), giving financial backing to them, with a positive impact in terms of sustainability
In May 2021 A2A adopted a new Sustainable Finance Framework that combines Use of Proceeds and Sustainability-linked instruments. The Framework was updated in 2022, in line with the new objectives of the 2021-2030 Strategic Plan.
The Framework gives investors:
Outstanding amount (€M) | Annual coupon | Issue date(1) | |
---|---|---|---|
Euro Sustainability-Linked Bond 2028 | 500 | 1.500% | 16/03/2022 |
Euro Green Bond 2031 | 500 | 1.000% | 2/11/2021 |
Euro Sustainability-Linked Bond 2033 | 500 | 0.625% | 15/07/2021 |
Euro Bond 2032 | 500 | 0.625% | 28/10/2020 |
Euro Green Bond 2029 | 400 | 1.000% | 16/07/2019 |
Euro Bond 2027 | 300 | 1.625% | 19/10/2017 |
Euro Bond 2025 | 300 | 1.750% | 25/02/2015 |
Private Placement 2024 | 300 | 1.250% | 16/03/2017 |
Private Placement 2023 | 300 | 4.000% | 04/12/2013 |
Euro Bond 2022 | 500 | 3.625% | 13/12/2013 |
Notes: (1) Date from which interest is paid
For more information about all A2A Bonds, current ratings and the new Sustainable Finance Framework clik here
A2A launched a new web page dedicated to ESG investors, where you may find information on some relevant ESG themes:
Moreover, the page has been enriched with some significant case studies (The Corporate Venture Capital programme, Banco dell'Energia Onlus, risks on electricity networks and impact on communities) that show A2A commitment towards Sustainability
On these page you can also find other in-depths regarding Sustainable Finance, Innovation, Covid-19 Initiatives and information about engagement
In 2021 has been also published a new ESG Database, an Excel file that includes a set of historical KPIs for each of the three dimensions of Sustainability to support investors and analysts on ESG themes.
Dividend Policy
The Strategic Plan 2021-2030 Update, despite the increase in investments, confirms the targets of dividend distribution to shareholders:
For the following years, a minimum growth of 3% per year is expected.
Dividend per share |
A2A believes that the issuance of Green Financing Instruments – including Green Bonds and Sustainability-Linked Bonds under EMTN Programme – could contribute to enabling energy transition and circular economy projects (existing or new ones), giving financial backing to them, with a positive impact in terms of sustainability
In May 2021 A2A adopted a new Sustainable Finance Framework that combines Use of Proceeds and Sustainability-linked instruments. The Framework was updated in 2022, in line with the new objectives of the 2021-2030 Strategic Plan.
The Framework gives investors:
Outstanding amount (€M) | Annual coupon | Issue date(1) | |
---|---|---|---|
Euro Sustainability-Linked Bond 2028 | 500 | 1.500% | 16/03/2022 |
Euro Green Bond 2031 | 500 | 1.000% | 2/11/2021 |
Euro Sustainability-Linked Bond 2033 | 500 | 0.625% | 15/07/2021 |
Euro Bond 2032 | 500 | 0.625% | 28/10/2020 |
Euro Green Bond 2029 | 400 | 1.000% | 16/07/2019 |
Euro Bond 2027 | 300 | 1.625% | 19/10/2017 |
Euro Bond 2025 | 300 | 1.750% | 25/02/2015 |
Private Placement 2024 | 300 | 1.250% | 16/03/2017 |
Private Placement 2023 | 300 | 4.000% | 04/12/2013 |
Euro Bond 2022 | 500 | 3.625% | 13/12/2013 |
Notes: (1) Date from which interest is paid
For more information about all A2A Bonds, current ratings and the new Sustainable Finance Framework clik here
A2A launched a new web page dedicated to ESG investors, where you may find information on some relevant ESG themes:
Moreover, the page has been enriched with some significant case studies (The Corporate Venture Capital programme, Banco dell'Energia Onlus, risks on electricity networks and impact on communities) that show A2A commitment towards Sustainability
On these page you can also find other in-depths regarding Sustainable Finance, Innovation, Covid-19 Initiatives and information about engagement
In 2021 has been also published a new ESG Database, an Excel file that includes a set of historical KPIs for each of the three dimensions of Sustainability to support investors and analysts on ESG themes.