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A2A targets

Main strategic goals

3R and 3D

relaunch Relaunch

Environment

  • Growth in urban collection: +100k residents/yr
  • Increase in waste treated: +50% 2021 vs 2016

Energy retail

  • +150k POD/year of free market customers

 

Networks & Heat

  • Gas tenders: +200 €M RAB and +180k PoD in 2021
  • New District Heating connections: +44 MWt/yr

 

regeneration Regeneration - NEW

Generation & Trading

  • Hydro and baseload stable production
  • From 2 GW to 3.6 GW of flexible CCGT capacity
  • Opportunities from the active management of CCGT growing options (e.g., Capacity Market)
  • 5-year San Filippo Del Mela plant must-run
  • New developments in Renewable energy and Distributed energy Resources as additional projects

 

reshape Reshape

Public lighting

  • 420k LED lighting points in 2021

Energy efficiency

  • Horizon 2020 projects, Demand Side Management & Demand Response Metering

Smart City

  • New business development initiatives ongoing, both B2B and with public administration

E-Mobility

  • Becoming a key player in the forthcoming electric vehicles market: 400k charges in 2021

discipline Discipline

  • Operational efficiency: 100 €M of further improvement at EBITDA level
  • DPS at around 7.5 euro cents in 2019 and a minimum 60% pay-out ratio in the following years

 

dialogue Dialogue

  • Further extension of the multi-stakeholder forums and regional sustainability reports
  • Introduction of sustainability objectives in the targets of all managers of the Group
  • Numerous projects linked to human resources

 

digital Digital

Digitization and technological transformation:

  • further digitization of all processes of the different Business Units,
  • creation of new IT platforms and solutions for internal and external use
  • further investments in fibre and in automation systems.

Financial targets

  • 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

EBITDA

Ebitda (€M) 2017 2021
Generation & Trading 268 301
Energy Retail 141 192
Environment 263 341
Networks & District Heating 422 457
EPCG 66 97
Smart City 8 14
Other -34 -22
TOTAL 1,135* 1,380

* New 2017 Outlook €M 1,170 - 1,190, revised upward after Q1'17 results

EBITDA

Capex plan

Capex Plan 2017-2021   Capex Plan 2017-2021   Capex Plan 2017-2021
EPCG 9%   M&A 3%   Merchant 12%
Corporate 2%   Development 57%   Merchant Low Volatility 1%
Smart City 1%   Maintenance 36%   Quasi Regulated 34%
Networks 47%   Mandatory 5%   Regulated 53%
District Heating 6%            
Environment 25%            
Energy Retail 1%            
Generation & Trading 8%            
TOTAL (€M) 2,750   TOTAL (€M) 2,750   TOTAL (€M) 2,750

 

Capex plan

Cash flow generation 2017-2021

Cash Flow Generation 2017-2021 €B
NFP 2016 3.1
EBITDA -6.3
Change in NWC & other asset/liab. 0.3
Use of Funds 0.2
Tax 1.0
Net Financial Expenses 0.5
CAPEX 2.8
Dividends & Other 0.9
NFP 2021 2.5

 

RATIOS 2016 2021
Return on Investments ~7.1%* ~12%
NFP / EBITDA 2.5x 1.8x

* Inclusive of net write-offs (256 €M). By excluding net write-offs, Return on Investments is equal to 11%

 

Cash flow generation 2017-2021

Dividend per share & FFO/debt 2017-2021

  2013 2014 2015 2016 ... 2019 2021
A2A DIVIDEND
PER SHARE (€c)
3.3 3.6 4.1 4.92   ~7.5
confirmed
Min 60%
pay-out ratio

 

  2013 2014 2015 2016 ... 2019 2021
FFO/DEBT1 17% 18% ~21% ~24%   >25%
confirmed
>25%

(1)
FFO = Ebitda – provisions for bad debt - net interest expense - current tax expense + dividends received
Debt = gross financial debt net of surplus cash + employee benefits + liabilities for landfills

Additional projects

Project list Feasibility EBITDA impact  
Gas networks: further growth through gas tender € 10 - 20M
Distributed energy resources (DER) € 5 - 20M
Rehabilitation of "Colonne montanti" (1) € 5 - 8M
Local Aggregations € 50 - 75M
Heat transportation backbone Cassano - Milano € 50 - 60M
Potential development abroad € 10 - 20M
Plant reconversions € 5 - 10M
Operational excellence tbd

(1) Electrical connection from road level to user’s individual apartment

Energy Scenario

  UM 2015 2016 2017 2018 2019 2020 2021
Exchange rate €/$ €/$ 1.1 1.1 1.06 1.08 1.11 1.13 1.16
ICE Brent €/bbl 48.4 40.7 54.5 56.5 57.7 61.1 60.3
Coal API 2 €/tonn 51.2 54 65 60.2 56.8 55.8 54.3
CO2 (EUA ETS) €/tonn 7.7 5.4 5.3 5.6 6.4 7.2 8
AEEGSI Gas Tariff (Pfor) €c/mc 22.9 15.6 19.6 18 17.3 17.2 17.7
PSV €/MWh 22 15.6 19.8 18.5 18.4 18.3 18.2
TTF €/MWh 19.8 14 18.1 16.8 16.2 16.1 16.5
PUN Base Load €/MWh 52.3 42.7 46.9 47.6 48.2 49.2 49.2
PUN Peak Load €/MWh 58.7 48.2 50.9 53.6 54.2 55.2 55.2
CCGT Gas Cost (PSV) €/MWh 49.8 37.6 46.8 43.9 43.7 43.5 43.3
Peak Spark Spread €/MWh 8.9 10.5 4.1 9.7 10.5 11.7 11.9
Spark Spread (PSV) €/MWh 2.5 5.1 0.1 3.7 4.5 5.7 5.9
Clean Spark Spread (PSV) €/MWh -0.4 3.1 -1.8 1.6 2.1 3 2.9
Dark Spread €/MWh 23.3 12.5 13.1 15.8 17.9 19.3 20
White Certificates €/Toe 104.2 145.5 130 150 150 150 150