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Acea Earnings Release 2017

Mar 14, 2018

4350_rns_2018-03-14_3f58122a-dae9-450d-8676-d1358fb96217.pdf

Earnings Release

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2017 Results

Rome, 14 March 2018

ACEA Group Executive Summary 2017

2017 RESULTS

  • •
  • •CAPEX
  • • NET DEBT €2,421.5m Adjusted NET DEBT €2,325.1m
  • Adjusted EBITDA €840.0m +7.0% AHEAD OF GUIDANCE AND BUSINESS PLAN FORECAST €532.3m IN LINE WITH GUIDANCE
  • IN LINE WITH GUIDANCE AND AHEAD OF BUSINESS PLANFORECAST

2018 GUIDANCE

  • • EBITDA+3%/+5% versus 2017.
  • • CAPEXa growth in investments - with respect to €532m in 2017 - in line with the 2018-2022 Business Plan
  • • NET DEBT€2.6bn – €2.7bn.

BUSINESS PLAN 2018-2022

  • • At the end of November 2017, Acea approved a Business Plan for the period 2018-2022, in discontinuity with respect to the past, with a significant increase in investment in both water and electricity infrastructure.
  • •Investment of €3bn.
  • •Average annual EBITDA growth ~6%.
  • •Operational efficiencies with cost and capex savings of €300m for the period 2018-2022.
  • •Total dividend payout over life of Plan €0.7bn; dividend payout ratio to remain above 50%.
  • •Net Debt/EBITDA falling to 2.8x in 2022.

ACEA Group Executive Summary 2017

AGREEMENT WITH OPEN FIBER

  • • Acea has entered into an agreement with Open Fiber for the rollout of an ultrafast broadband communications network in the city of Rome.
  • • The project will involve the construction of a next generation fibre network, offering ultrafast connectivity to the inhabitants of Rome, in the next five years.
  • • The network will enable a series of cultural, health and social services and the development of new services by businesses and the public sector, in part through the creation of new applications for use in telecommunications and in the automation of electricity and water networks.

BOND ISSUE

  • •In February 2018,Acea successfully issued bonds as part of its €1bn EMTN programme, divided into two tranches:
  • €300m, maturing 8 February 2023 and paying coupon interest of 3-month Euribor +0.37%.
  • €700m, maturing 8 June 2027 and paying a fixed rate of 1.5%.
  • •The new ''all-in'' average cost of debt is 2.3% with an average term to maturity of approx. 6 years.

ACEA'S OWNERSHIP

C
ity
f
Ro
o
m
e		 Su
ez		 Ca
iro
Gr
lta
g
ne
ou
p		 O
he
t
r
5
1.
0
%		 2
3.
3
%		 5.
0
%		 2
0.
7
%

Source: CONSOB, March 2018

ACEA Group 2017 financial highlights

(
€
)
m		 2
0
1
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a		 2
0
6
1
b		 %
C
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*
d
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9
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+
E
B
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%
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E
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2		 4
1
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4		 2.
0
%
-
G
f
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/
(
l
)
t
t
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3		 3
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5		 1.
9
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+
D
i
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(
€
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v
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x		 5
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3		 5
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7		 0.
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%
+

* The adjusted results do not include:

• for 2017, the negative impact – amounting to €46.4m before tax – primarily resulting from reductions in the receivable due from ATAC (€6.4m) and the amount due to Areti from Gala (€15.7m), the write-down of the assets owned by Acea Ambiente and Acea Produzione (€12.2m)

• for 2016, primarily the positive impact (€111.5m before tax) of elimination of the regulatory lag

^ The Board of Directors will propose payment of the dividend to the Annual General Meeting of shareholders, called for 20 and 27 April in first and second call, respectively.

(
€
)
m		 3
1
D
2
0
1
7
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c
(
)
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0
S
2
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(
b
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(
)
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**
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9
7		 3,
8
8
4.
9		 0.
8
%
-		 9.
3
%
+

** Adjusted net debt for 2017 does not include the overall impact, amounting to €96m, of the reduction in amounts due from GALA (€30m) and ATAC (€6m), and the impact of split payments (€60m).

ACEA Group EBITDA

Ahead of guidance and the Business Plan forecast

E
B
I
T
D		 (
€
)
A
m		 C
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2
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(
€m
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(
€m
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2
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6
1
*
d
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a
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ate
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er
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In
fra
str
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mm
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Tr
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iro
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Se
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1
7		 A
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r
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G
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r		 f
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r
c
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Ho
l
d
ing		 2
0
1
7		 2
0
1
6
4
9
4
**
5,		 0
4
8
5,

* The adjusted figure for 2016 does not include the positive impact of elimination of the regulatory lag

** The figure reflects the change in the scope of consolidation

ACEA Group EBITDA and Key quantitative data 2017 financial highlights

A
A
T
O
2
€
1
5.
2
(
l
b
€
3
1
)
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+
t
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A
A
T
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5
€
2.
7
+
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:
m
W
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r		 C
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f
l
d
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a
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c
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E
B
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D
A
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s		 C
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€
2.
4
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m
e
o
m
-
(
€
)
m		 2
0
1
7
(
)
a		 2
0
1
6
(
b
)		 %
C
h
a
n
g
e
(
/
)
b
a		 K
i
i
d
t
t
t
t
e
q
a
n
a
e
a
a
y
u
v		 2
0
1
7		 2
0
1
6
E
B
I
T
D
A		 3
4
9.
6		 3
3
6.
0		 4.
0
%
+
f
h
h
P
f
/
(
L
)
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:
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m
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y		 2
4.
1		 2
6.
5		 9.
1
%
-		 T
l
l
f
l
d
t
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o
a
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w
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r
s
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3)
(
M
m		 4
2
1		 4
2
1
C
a
p
e
x		 2
4
7
1.		 2
2
7.
1		 9.
%
1
5
+
2
0
1
7
(
)
a		 2
0
1
6
(
b
)		 C
h
a
n
g
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(
b
)
a-
f
A
k
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a
g
e
w
o
r
o
r
c
e		 9
6
1,
7		 8
8
1,
1		 2
2
-

EBITDA and Key quantitative data 2017 financial highlights

Distribution +€45.5m (adjusted)

Generation +€8.8m (mainly due to increased hydroelectric production)

Public Lighting: LED plan launched in June 2016 (+€1.4m)

(
€
)
m		 2
0
1
7
(
)
a		 2
0
1
6
(
b
)		 2
0
1
6
j
(
)
d
d
te
*
a
us
c		 %
h
c
a
n
g
e
(
/
b
)
a		 %
h
c
a
n
g
e
(
/c
)
a		 K
i
i
d
t
t
t
t
e
y
q
u
a
n
a
v
e
a
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0
1
7		 2
0
1
6
E
B
I
T
D
A		 3
3
2.
6		 3
8
8.
3		 2
6.
8
7		 4.
3
%
1
-		 2
0.
2
%
+		 T
l
l
i
i
d
i
i
b
d
(
G
W
h
)
t
t
t
t
t
o
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c
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r
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y
u		 1
0,
0
4
0		 1
0,
0
0
9
D
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ist
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r
-
Ge
ion
rat
ne
-		 2
8
7.
3
4
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8		 3
5
3.
3
3
2.
0		 2
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1.
8
3
2.
0		 1
8.
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%
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2
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7.
5
+		 1
8.
8
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+
2
%
7.
5
+		 f
(
'0
0
0
)
N
b
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b
l
L
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ic
ig
ing
-		 4.
4		 3.
0		 3.
0		 4
%
6.
7
+		 4
%
6.
7
+		 T
l
l
i
i
d
d
(
G
W
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)
t
t
t
o
a
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c
r
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p
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2
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0
5
C
a
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e
x		 2
0
9.
4		 2
2
5.
8		 7.
3
%
-
2
0
1
7
(
)
a		 2
0
6
1
(
)
b		 h
c
a
(
a-		 n
g
e
)
b
A
k
f
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r
a
g
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w
o
r		 o
r
c
e		 1,
3
6
6		 1,
3
8
0		 1
-		 4

*After adjusting for the positive impact of elimination of the ''regulatory lag'' (€111.5m)

EBITDA and Key quantitative data 2017 financial highlights

Recognition, in Q2 2016, of additional revenue of approximately €10m linked to impact of the contract, entered into in March 2016, for the commercialisation of smart meters.

Sales activity: lower margins in free market

(
€
)
m		 2
0
1
7
(
)
a		 2
0
1
6
(
b
)		 %
C
h
a
n
g
e
(
/
b
)
a		 K
i
i
d
t
t
t
t
e
q
a
n
a
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a
a
y
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v		 2
0
1
7		 2
0
1
6
E
B
I
T
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A		 7
8.
1		 9
8.
0
*		 2
0.
3
%
-		 T
l
E
l
i
i
l
d
(
G
W
h
)
t
t
t
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a
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c
r
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o		 6,
8
4
3		 8,
3
1
6
E
h
d
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c
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c
o
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a
r
e		 2,
6
5
2		 2,
7
5
7
F
M
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r
e		 4,
1
9
1		 9
5,
5
5
C
a
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x		 1
9.
4		 2
7.
4		 2
9.
2
%
-		 f
i
i
(
'0
0
0
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N
b
l
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t
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c
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r
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s		 2
3
1,
1		 2
4
1,
5
E
h
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k
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t
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c
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r
e		 8
9
3		 9
5
9
2
0
1
7
(
)
a		 2
0
1
6
(
)
b		 %
C
h
a
n
g
e
(
b
)
a-		 F
M
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a
r
e		 3
2
0		 2
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5
3)
T
l
G
l
d
(
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s
o
m		 1
0
3		 1
0
7
A
k
f
e
r
a
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v
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4		 4
7
3		 1
+		 N
b
f
(
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s
s		 1
6
7		 1
4
9

* EBITDA for 2016 includes non-recurring income of approx. €10m

EBITDA and Key quantitative data

2017 financial highlights

Environment

EBITDA main drivers

Greater quantity of electricity sold by the San Vittore plant (first line in operation from 1 October 2016)

Aprilia composting plant fully operational

Change in scope of consolidation (Acque Industriali and Iseco)

(
€
)
m		 2
0
1
7
(
)
a		 2
0
6
1
(
b
)		 %
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(
/
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E
B
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4.
5		 5
7.
2		 1
2.
8
%
+		 T
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*
t
t
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a
m
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7		 8
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(
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5
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-		 W
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(
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(
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a		 2
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(
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)		 h
c
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A
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e		 3
5
5		 2
3
8		 1
1
7
+

ACEA Group

EBIT (€m)

NET PROFIT (€m)

^ Higher depreciation due to increased capex for IT with shorter useful life after taxation – has reduced net profit by €38m

D
I
V
I
D
E
N		 D
H
I
S
T
O
R
Y
2
0
1
4		 2
0
1
5		 2
0
1
6		 2
0
1
7
D
P
S
(
€
)		 0.
4
5		 0.
5
0		 0.
6
2		 0.
6
3
°
T
l
D
i
i
d
d
(
€
)
t
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a
v
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n
m		 9
5.
8		 1
0
6.
5		 1
3
2.
0		 1
3
4.
2
i
i
i
*
D
d
d
l
d
v
e
n
y
e		 4.
6
%		 4.
2
%		 2
%
5.		 4.
%
7
P
**
t
a
y
o
u		 5
9
%		 6
1
%		 5
0
%		 7
4
%

°The Board of Directors will propose payment of the dividend to the Annual General Meeting of shareholders, called for 20 and 27 April in first and second call, respectively.

* Based on average price for the year

** Based on consolidated net profit after non-controlling interests

Cash flow

2 2
0 0
1 1
7 6
8 8
4 9
0 6
(
2
4
7
)		 (
8
5
)
( (
5 5
3 3
2 1
) )
6
1		 2
8
1
(
7
2
)		 (
1
1
0
)
( (
3 0
) )
1 1
7 1
( (
3 0
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) 1
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( (
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( (
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) )
( (
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) )
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* Adjusted net debt for 2017 does not include the overall impact, amounting to €96m, of the reduction in amounts due from GALA and ATAC , and the impact of split payments

** Before provisions for bad debts

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* Adjusted net debt for 2017 does not include the overall impact, amounting to €96m, of the reduction in amounts due from GALA and ATAC and the impact of split payments.

2017 Results

Acea Group 2017 Results

Rome, 14 March 2017

Q&A Session

THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT REFLECT THE COMPANY'SMANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL AND OPERATIONALPERFORMANCE OF THE COMPANY AND ITS SUBSIDIARIES.

THESE FORWARD-LOOKING STATEMENTS ARE BASED ON ACEA S.P.A.'S CURRENT EXPECTATIONS AND PROJECTIONS ABOUT FUTURE EVENTS. BECAUSE THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES, ACTUAL FUTURE RESULTS OR PERFORMANCE MAY MATERIALLY DIFFER FROM THOSE EXPRESSED THEREIN OR IMPLIEDTHEREBY DUE TO ANY NUMBER OF DIFFERENT FACTORS, MANY OF WHICH ARE BEYOND THE ABILITY OF ACEA S.P.A. TO CONTROL OR ESTIMATE PRECISELY, INCLUDING CHANGES IN THE REGULATORY FRAMEWORK, FUTURE MARKET DEVELOPMENTS, FLUCTUATIONS IN THE PRICE AND AVAILABILITY OF FUEL AND OTHER RISKS.

YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, WHICH ARE MADE ONLY AS OF THE DATE OF THIS PRESENTATION. ACEA S.P.A. DOES NOT UNDERTAKE ANY OBLIGATIONTO PUBLICLY RELEASE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS ORCIRCUMSTANCES AFTER THE DATE OF THIS PRESENTATION.

THIS PRESENTATION DOES NOT CONSTITUTE A RECOMMENDATION REGARDING THE SECURITIES OF THE COMPANY.

***

PURSUANT TO ART. 154-BIS, PAR. 2, OF THE LEGISLATIVE DECREE N. 58 OF FEBRUARY 24, 1998, THE EXECUTIVE IN CHARGE OF PREPARING THE CORPORATE ACCOUNTING DOCUMENTS AT ACEA, GIUSEPPE GOLA – CFO OF THE COMPANY - DECLARES THAT THE ACCOUNTING INFORMATION CONTAINED HEREIN CORRESPOND TO DOCUMENT RESULTS, BOOKS AND ACCOUNTING RECORDS.

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