ASSETS
A2A asset portfolio - first class asset base and size
ENERGY
Generation
~2 GW hydro installed capacity
- Thermoelectric capacity: 6,428 MW
- Hydroelectric capacity: 1,944 MW
- Photovoltaic capacity: 100 MW
- Wind Capacity 8 MW
Market
Leader for quality and customer satisfaction
- Electricity Customers: 1,270 k
- Gas Customers: 1,614 k
- Public lighting (n.): 305 k of which 255 k LED
WASTE
1st energy producer from WTE plants
- Inhabitants served: 4.12 millions
- Waste collected: 1,660 Kton
- Waste disposed of: 3,251 Kton
- WTE and other plants electricity production: 1,954 GWh
- WTE and other plants heat production: 1,557 GWht
NETWORKS
Networks
Incumbent in the key areas
- Electricity distributed: 10,673 GWh
- Gas distributed: 2,996 Mcm
- Water distributed: 77 Mcm
- Electricity RAB: ~ 0.7 €Bn
- Gas RAB: ~ 1.5 €Bn
- Water Cycle Fixed Assets: ~ 0.4 €Bn
Heat
1st domestic operator
- Heat volumes sales: 2.8 TWht
- Electricity production from cogeneration plants: 0.3 €Bn
BUSINESS SYNERGIES
A2A increases business resilience by reducing the level of risk
Examples of Industrial hedging:
- Hedging RES production with customer portfolio
- Diversification of power production sources
- Closing waste cycle: supervision of the entire chain, from collection to treatment
- Thermal recovery of heat from WtE / CCGT for district heating
- Integrated management with treatment of sewage sludge
RESULTS
A2a is a Life company, active in the sectors enabling the circular economy and the energy transition of the territories
| A2A Group Highlights (million euros) |
2020 | 2019 | 2018 |
|---|---|---|---|
| Revenues | 6,862 | 7,324 | 6,494 |
| Reported EBITDA | 1,204 | 1,234 | 1,231 |
| Ordinary EBITDA | 1,191 | 1,192 | 1,192 |
| EBIT | 550 | 687 | 588 |
| EBT | 469 | 581 | 490 |
| Group net income | 364 | 389 | 344 |
| Ordinary Group Net income | 335 | 378 | 438 |
| DPS (€) | 0.080 | 0.0775 | 0.07 |
| Dividend Yield (%) | 6.1% | 4.8% | 4.6% |
| Net Financial Position | -3,472 | -3,154 | -3,022 |
| Consolidated Capex | 738 | 627 | 500 |
| Net Free cash flow - Change in NFP | -318 | -132 | 204 |
| Manpower (units) | 12,978 | 12,186 | 12,080 |
M&A TRACK RECORD
DYNAMIC M&A TRACK RECORD
To view the current and historical track record of A2A acquisitions and disposals
HIGHLIGHTS
A2A is a Life Company which creates value from asset quality, diversification and synergies
-30%
GROUP EMISSION FACTOR1
(gCO2/kWh)
+3.7GW
NEW RES INSTALLED CAPACITY
+4,4Mt
WASTE NOT LANDFILLED2
31Mt
CO2 AVOIDED BY THE GROUP IN 2021-30
~90%
CAPEX RELATED TO UN SDGs
16€B
10-YEAR CUMULATIVE CAPEX
>2.5€B
EBITDA @ 2030
>8%
NOT INCOME CAGR 2020-30
2.5x
NFP / EBITDA @2030
6k
DIRECT HIRINGS 2021-30
Notes:
(1) 226 gCO2/KWh, -30% 2030 vs. 2020. Decarbonization target well in line with Paris Agreement goal to limiting global temperature rise below 2 C degrees
(2) +86% vs. 2020
STRATEGY
New strategy designed around 2 main sustainability pillars
CIRCULAR ECONOMY
- 6 €B of cumulated investments in 2021-2030
- Mission: enabling circular economy to preserve the planet's resources and protect the environment
- Actions: boosting material recovery, strengthening energy recovery, reduction of waste
ENERGY TRANSITION
- 10 €B of cumulated investments in 2021-2030
- Mission: guaranteeing the production and use of clean energy by speeding up decarbonization and enabling the electrification of consumption
- Actions: accelerating RES growth, ensuring system flexibility, supporting customers energy choices, rebalancing energy networks
A2A KEY STRATEGIC ENABLERS
- Acceleration through digital and innovation – A2A data-driven company
- Savings thanks to Operational excellence
- Industrial hedging
- New operating model and new actions for people and the territory
TARGETS
Robust growth over the entire plan period ensuring high returns and great financial soundness
| 2020 | 2021 | 2022 | 2026 | 2030 | |
|---|---|---|---|---|---|
| Ordinary EBITDA(€B) (CAGR ‘20 – ’30: >8%) | 1.19 | 1.27-1.30 | 1.35-1.39 | 1.90-2.00 | >2.50 |
| Ordinary Net Profit (€M) | 335 | - | 330-350 | 450-500 | >650 |
| NFP/EBITDA (x) | 2.9 | - | 3.2 | 3.5 | 2.5x |
| Dividend per share (€c) | 8.0 | ≥8.2 | ≥8.5 | CAGR ≥ 3% | |
| Ordinary EBITDA ENERGY BU | B€ |
| Ordinary EBITDA WASTE BU | B€ |
| Ordinary EBITDA NETWORKS BU | B€ |
FINANCIAL STRATEGY
A2A defines a transformative investment plan maintaining solid credit indicators
FUNDING NEEDS: 10.5 €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: <1.5%
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: >6 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) |
2021 OUTLOOK
Guidance improved after H1 2021 results
2021 MARKET OUTLOOK
During the first six months of 2021 prices of energy commodities grew up, with the PUN (Single National Price), PSV gas and CO2 prices doubling. The PUN (Single National Price) increased by +107.6% compared to the first half of 2020, reaching 66.9€/MWh as a result of the rise in gas and CO2 costs. The average price of gas to the PSV in the period under review amounted to 21.8€/MWh, up by 137.9% compared to the same period the previous year. CO2 quotations stood at an average price of 43.8€/tonne in H1 2021 (22€/tonne in H1 2020, +99%).
The Group's expectations for FY 2021 are also good for the second half of the year. Energy scenario is expected to remain strong, the structural dynamics of the various BUs solid, and the company's focus on improving efficiency constant.
2021 FINANCIAL OUTLOOK
In the first half of 2021, A2A operated in a context of a recovery in consumption and a strongly bullish energy scenario, unlike the first half of 2020 which was earmarked, due to the Covid19 epidemic, by a sharp fall in demand and a collapse in gas and energy prices. The different scenario, including the hedging adopted by the Group, had a major impact on some economic variables.
The excellent results of the first half of the year and the expectations for the second allow the Group to improve its expectations compared to those announced in May: EBITDA is expected to be between 1.270 and 1.300 and Net Profit, also thanks to the non-recurring effects of DL 104/2020, will be the best since the formation of A2A. The significant operating cash generation will be used to finance capex expected at record level (over 1 billion) in line with the forecasts of the 2021-2030 Strategic Plan.
2021 MARKET OUTLOOK
During the first six months of 2021 prices of energy commodities grew up, with the PUN (Single National Price), PSV gas and CO2 prices doubling. The PUN (Single National Price) increased by +107.6% compared to the first half of 2020, reaching 66.9€/MWh as a result of the rise in gas and CO2 costs. The average price of gas to the PSV in the period under review amounted to 21.8€/MWh, up by 137.9% compared to the same period the previous year. CO2 quotations stood at an average price of 43.8€/tonne in H1 2021 (22€/tonne in H1 2020, +99%).
The Group's expectations for FY 2021 are also good for the second half of the year. Energy scenario is expected to remain strong, the structural dynamics of the various BUs solid, and the company's focus on improving efficiency constant.
2021 FINANCIAL OUTLOOK
In the first half of 2021, A2A operated in a context of a recovery in consumption and a strongly bullish energy scenario, unlike the first half of 2020 which was earmarked, due to the Covid19 epidemic, by a sharp fall in demand and a collapse in gas and energy prices. The different scenario, including the hedging adopted by the Group, had a major impact on some economic variables.
The excellent results of the first half of the year and the expectations for the second allow the Group to improve its expectations compared to those announced in May: EBITDA is expected to be between 1.270 and 1.300 and Net Profit, also thanks to the non-recurring effects of DL 104/2020, will be the best since the formation of A2A. The significant operating cash generation will be used to finance capex expected at record level (over 1 billion) in line with the forecasts of the 2021-2030 Strategic Plan.
Stakeholder engagement
Ongoing and pro-active engagement with the financial community
Dividend Policy
The new Plan, following the significant pipeline of initiatives and expected growth in margins, adjusts the dividend policy, proposing a DPS on the 2020 profit of 8.0 €c per share, on the profit for 2021 at least equal to 8.2 €c per share, on the profit for 2022 at least equal to 8.5 €c per share. For the following years, a minimum growth of 3% per year is expected.
| Dividend per share: growing trend since 2011 |
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 gives investors:
- The transparency to better allocate their funds and measure their contribution to sustainability with the green use of proceeds format
- well-defined targets to measure the strong engagement of A2A in ESG management and continuous improvement at corporate level (sustainability-linked format)
Bonds issued
| Outstanding amount (€M) | Annual coupon | Issue date(1) | |
|---|---|---|---|
| Euro Sustainability-Linked Bond 2031 | 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:
- ENVIRONMENT – Circular Economy, Energy Transition
- SOCIAL – Human Capital Development and Diversity, Cyber Security and Data Protection
- GOVERNANCE – Key Governance Reporting, Risk Management
On these page you can also find other in-depths regarding Sustainable Finance, Innovation, Covid-19 Initiatives and information about engagement
Dividend Policy
The new Plan, following the significant pipeline of initiatives and expected growth in margins, adjusts the dividend policy, proposing a DPS on the 2020 profit of 8.0 €c per share, on the profit for 2021 at least equal to 8.2 €c per share, on the profit for 2022 at least equal to 8.5 €c per share. For the following years, a minimum growth of 3% per year is expected.
| Dividend per share: growing trend since 2011 |
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 gives investors:
- The transparency to better allocate their funds and measure their contribution to sustainability with the green use of proceeds format
- well-defined targets to measure the strong engagement of A2A in ESG management and continuous improvement at corporate level (sustainability-linked format)
Bonds issued
| Outstanding amount (€M) | Annual coupon | Issue date(1) | |
|---|---|---|---|
| Euro Sustainability-Linked Bond 2031 | 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:
- ENVIRONMENT – Circular Economy, Energy Transition
- SOCIAL – Human Capital Development and Diversity, Cyber Security and Data Protection
- GOVERNANCE – Key Governance Reporting, Risk Management
On these page you can also find other in-depths regarding Sustainable Finance, Innovation, Covid-19 Initiatives and information about engagement