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Strategy

Industrial Model

 

Transformation

Business strengthening & change

Generation  KEY ACTIONS

Process of transformation towards a greener generation portfolio

  • Further expansion of RES platform
  • Reconversion of conventional plants

Provider of adequacy and flexibility services, with the aim of meeting the growing electric system needs

  • Leadership consolidation in flexible CCGT plants
  • Exploration of innovative flexibility services

 

Generation  HIGHLIGHTS
  • Over 150 MW of new RES, up to 280 MW (owned and managed), for a total capacity installed of 2.2 GW including hydro
  • Reactive power for grid voltage regulation services (10 years, Brindisi plant)
  • Acceleration of thermal plant reconversion through solutions based on A2A core competences, with a circular economy perspective and designed according to local needs
  • Opportunities in gas peakers, storage and hydro pumping to meet growing flexibility need

 

Generation  KEY ECONOMIC TARGETS
  • 323 million euros of EBITDA at 2023, -115 million euros from environmental market and SFM, +79 million euros mainly from RES development and capacity market
  • 582 million euros of cumulated CAPEX at 2023, of which 295 million euros from M&A and RES development
Market  KEY ACTIONS

Greater focus on customers, in a context of deep market transformation

  • Outstanding client service, with improved multi-channel customer experience
  • Preservation of excellent operations
  • VAS in safety, comfort, energy-saving
  • Advisor for SMEs and large enterprise
  • Digitalization to enhance service/acquisition

Growth in new services, to be more competitive in an increasingly demanding market

  • New services: flexibility, DERs and storage
  • New EPCs in energy efficiency services
  • Organic growth in Public Lighting
  • Expansion of electric mobility business

 

Market  HIGHLIGHTS
  • 2.7 million mass market power & gas free customers, within a stable customer base (full liberalization expected by July 2020), with further opportunities in “safeguard”, leveraging excellent meter-to-cash management
  • Over 1,660 e-cars charging stations by 2023, to develop the e-mobility infrastructure network on key territories
  • Strong boost of EPC projects with significant investments (81 €M vs. 10 €M previous plan)

  • Contracts for heat management of private buildings (about 30 €M CAPEX)

 

Market  KEY ECONOMIC TARGETS
  • 323 million euros of EBITDA at 2023, +95 million euros from Power & Gas, cost to acquire and other operating costs, +41 million euros from new energy services (energy solutions, smart cities, public lighting and value added sercices)

  • 402 million euros of cumulated CAPEX at 2023, of which over 40% Digital & Tech CAPEX

Waste  KEY ACTIONS

Consider waste more and more as a commodity and not as waste (“from waste to commodity”)

  • Become Italian leader in recycling, also with downstream integration with high-quality secondary raw materials
  • New WTE capacity (projects approved) to maintain safety of the Italian waste treatment system

Become a unique partner for urban services offered, growing in new geographical areas by exploiting our collection capabilities and developing innovative solutions

  • Enlarging geographic presence, leveraging on value chain integration
  • Smart and innovative solutions for our territories

 

Waste  HIGHLIGHTS
  • 9 new treatment plants to strengthen our leadership in municipal solid waste market and to boost a full circular approach to achieve effective material and energy recovery in areas characterized by infrastructural gap
  • contribute to reduce the Italian shortage of WTE capacity with 400 ktons of waste treated by WTEs
  • Industrial waste:
    • Speed-up in the treatment of non-hazardous special waste, boosting innovation and new technologies (i.e. AI for robotic picking)
    • Focus on collection and waste logistic services dedicated to SMEs
    • Entering environmental services segment, and partnership in hazardous waste
  • Vertical integration downstream in order to support secondary raw material use, focusing on plastic and paper

 

 

Waste  KEY ECONOMIC TARGETS
  • 381 million euros of EBITDA at 2023, +107 million euros from new plants
  • 943 million euros of cumulated CAPEX at 2023, 82% in plants
Networks  KEY ACTIONS

Increase the quality of networks, the stability and reliability of the electricity grid

  • Development of smarter and resilient networks
  • Increase water cycle performance
  • Multi-business operation synergies with adoption of automated and digital solutions

Renewed commitment to participate in tenders for the awarding of gas concessions, with the goal to increasing the number of delivery points (POD) managed

  • Selective growth in high-priority ATEMs
  • Focus on geographical consolidation

 

Networks  HIGHLIGHTS
  • 35 primary stations supporting Milan and Brescia electrification
  • 1.4 million smart meters installed in Plan years: 420,000 gas, 850,000 electricity, 143,000 water
  • Decarbonization of DH sources, through further development of storage and waste heat recovery
  • Phase-out of Lamarmora coal plant

 

Networks  KEY ECONOMIC TARGETS
  • 518 million euros of EBITDA at 2023, +62 million euros from Gas and Electricity, +25 million euros from Water Cycle, +26 million euros from district heating
  • 1.963 million euros of cumulated CAPEX at 2023, of which 504 million euros from Gas Tenders

 

 

Excellence

Agile organization - Leader in operational excellence

Three-fold benefit from diversification
 

  1. Typical “multi-business“ benefits
    scale synergies on financing, sharing of central unit costs, cost duplication avoidance, …

     
  2. Vertical integration
    in each BU value chain: end-to-end results control, commodities natural hedging, certainty of supply/demand, …

     
  3. Synergies inter adjacent businesses
    sharing of competence centers, natural hedging inter Bus, single regulation interface, …

Waste business: same examples

Attractive platform for further industrial partnerships

50+ €M from intercompany business transactions, up to 70 €M by 2023

Agile organization

  • Both En&A and Mistral projects up and running
  • 2018 targets achieved and exceeded
  • Targets @2023 confirmed: ~80 €M of additional savings vs. 2018
  • Further projects under evaluation contributing up to 20 €M of additional EBITDA *

* Additional projects (not included in BP numbers

 

Fixed assets

Asset rebalancing

Note
* Merchant includes High and Low Volatility

Path of invested capital reshape towards a lower-risk profile

Dedicated capex

 

 

Examples
  • Smart meters
  • E-mobility
  • New Electric primary stations
  • New IT tools for trading activities
  • Advanced Analytics for predictive maintenance, route optimization, …
  • Robotic Process Automation
  • IoT for urban development
  • Artificial Intelligence
  • Inspections with drones

 

680+ €M of cumulated CAPEX on Digital & Technology innovation in 2019-2023

 

Community

Attract and empower people - Engage external ecosystem

Trasformation

Trasformation

Eccellenza

Excellence

Community

Community

DIGITALIZATION
  • DNA Digital readiness
  • New digital workplace
  • Digitalization of HR processes
SKILLS AND CHANGE MANAGEMENT
  • Network Academy
  • Improvement performance
PROCESSES REDESIGN
  • Shared Service Center
  • Reorganization
MULTIBUSINESS PORTFOLIO
  • Families/roles cross BUs
  • Intercompany contracts
AGILE ORGANIZATION
  • Staff units pooling
  • Dynamic sizing
SAFE WORK ENVIRONMENT
  • HSE core unit inside HR perimeter
  • Work environment reshape
  • Organizational Health
PEOPLE CARING
  • Welfare
  • Employability program
  • Worker interaction
PEOPLE DEVELOPMENT
  • Junior/Senior Talent
  • Key people
  • Performance management
DIVERSITY MANAGEMENT
  • Diversity program

 

Enhancing an agile organization to manage complexity

A2A - Local aggregation

 

A2A Community widening, consolidating new territories: ACSM-AGAM

#5 provinces covered

~900 k inhabitants served

 

Growth key drivers
  • Gas tenders
  • Customer base development
  • WTE revamping
  • Waste treatment
  • DH development
  • Public Lighting

 

Contribution of 120+ €M @2023

2018



4
Innovation committee screening sessions

4+
Innovation Managers

7+
initiatives in scale-up

90+
A2A people for idea generation

200+
startups met
Keep innovating
  • Internal innovation program 2.0
  • Open Innovation (eg. Open Italy, …)
  • Partnership
  • Dealflow management

2021 Target



A2A among the most innovative  companies
listed on FTSE MIB by 2021

Be part of the community
  • Events (eg. Futureland, B-Heroes, …)
  • Idea Challenge (eg. Hackathon, Crowdsourcing, …)
  • Employer Branding (University, Roundtables, …)
  • Social Media Strategy
Crowd as a partner
  • Bottom-up innovation with dedicated instruments (innovation platform, Innoroom,…)
  • I have/need an idea (internal challenge)
Building optimization
in Milan, Brescia and Bergamo

30+ €M net cash effect
from net divestments

Commuting reduction
with less travels and efficient smart offices

Smart offices
to foster collaboration, teamwork & cross synergies

Full digital
work place



A2A working space


From 7 corporate buildings in Milan to 1 single hub

1,500 people in 20,000 square meters for the new A2A hub by 2022

 

Real estate optimization to re-design company culture

Key points

 

  • TEC framework confirmed

  • Lower risk profile

  • Targets enhanced

  • Higher focus on sustainable businesses

  • Improved and reliable dividend policy

 

 

 

 

2014-2017 achievements

Industrial targets achieved and financial targets overdelivered

Where we start from:

Relaunch  Relaunch

Consistent industrial growth
Selective external growth

  • +560 K customers (EE and Gas free market customer base)
    +800 Kt waste treated
    +200 €M of RAB
  • ~130 €M of operating efficiency
  • 14 M&A deals +105 €M EBITDA
  • Largest territory aggregations (+1 in pipeline)

 

Regeneration  Regeneration

Active role in the energy market transformation

  • CCGT fleet active management: 4x production vs. 2014
  • Stable profitability (volatility <10%)
  • Created PV platform (+35 MW)
  • Pilot projects on innovative solutions (UVAP, drones…)

 

Reshape  Reshape

Public lighting, smart city, energy efficiency

  • First-mover in consolidating energy efficiency sector
  • +60% A2A Smart City EBITDA
  • 120 K LED installed (+135%)
EBTDA (€M) 2014 2017
Regulated 420 437
Quasi regulated 236 343
Merchant low volatility 82 158
Merchant high volatility 287 273
Total 1,024 1,211
+18% Higher and more stable margin

 

  2014 2015 2016 2017
NFP/EBTDA (€M) 3.3 2.8 2.5 2.7
-18% Capital structure reinforced

 

  2014 2015 2016 2017
DPS (€c/share) 3.6 4.1 4.9 5.8
+61% Dividends growing steadily

 

  2014 2015 2016 2017
CAPEX (€M) 282 317 349 450
+60% Investing more with quality

 

  2014 2015 2016 2017
ROI % 7.8 8.7 11.3 11.8
+52% Growing, stable return >10%

A2A Business Plan News

Periodic update service for investors and analysts on the significant steps of A2A Business Plan – such as relevant investments, new projects, achievements, contracts, agreements.

Concise, non-price sensitive news related to the Strategic Plan Guidelines and the Business Units concerned.