Results for the year ended 31 December 2023

6 March 2024

Agenda

Challenging market environment

FY2023 results

Appendix

2

«Evolving» market environment

FALLING PRICES AND DEFINITION OF NEW REGULATORY PERIOD PARAMETERS FOR WATER AND NETWORKS

Regulation

Commodity prices

and inflation

Interest rates

  • Release of MTI-4 (Resolution 639/2023) defining the integrated water service tariff rules for the 4th regulatory period (2024-2029),with an increase in WACC from 4.8% to 6.1% and higher tariff caps by around 2pp starting from 2024
  • Definition of new ROSS tariff rules for electricity distribution based on recognition of Total Spending (Resolution 497/2023/R/com) for the 6th regulatory period (2024-2027). Increase in WACC from 5.2% to 6.0% starting from 2024
  • Energy price (SNP) in 2023 falling to 127€/MWh (approximately -176€/MWh vs 2022) in line with 2021 levels, offsetting the record increases posted in 2022
  • Gas price (PSV index) down to
    43€/MWh (-82€/MWh vs 2022), substantially in line with 2021 levels
  • 2023 inflation +5.7% (+8.1% in
    2022). Prices up by 5.3% (+4.1% in
    2022) excluding the energy component

Higher financial costs compared to 2022:

  • Mid Swap 4Y - 5Y December 2023 3.2% - 3.1%
  • Mid Swap 4Y - 5Y December 2022 1.7% - 1.7%

3

Agenda

Challenging Market Environment

FY2023 results

Appendix

4

FY2023 Highlights

Regulated Revenue1 +6%

vs 2022

EBITDA2 +7%

vs 2022

Net profit2 +22%

vs 2022

CAPEX3 +9%

vs 2022

OPERATING CF 148M€

GROWTH IN EBITDA AND INVESTMENTS IN REGULATED BUSINESSES1 AND CONSTANT OPERATIONAL DISCIPLINE

Group revenue equal to €4.6bn of which around €2.4bn related to Water Italy and Grids and

Public Lighting, and Environment business, up by +6% compared to 2022

Organic EBITDA equal to €1,347m, +€87m compared to 2022 driven by the growth in the

regulated businesses, +10% Water Italy and +7% Grids and Public Lighting, by the higher volumes of energy produced mainly from renewable sources and operating efficiencies, which more than offset the unfavourable energy scenario. EBITDA margin up by 5pp (from 25% to 30%)

Reported net profit equal to €294m, +5% compared to 2022. The growth in EBITDA allows to tackle the rise in financial costs caused by higher interest rates and the increase in depreciation linked to the investments

Net capex equal to €993m in line with 2022.Water, Grids and Public Lighting and Environment sectors reported a growth of +95M€ vs 2022 supported by public funding (+€101m vs 2022)

Positive operating cash flow corresponding to €148m, +€129m compared to 2022, manly driven by improved working capital, which allowed us to keep a sound financial structure: NFP/EBITDA 3.49x

1. Includes, in addition to the Water Italy and Grids regulated businesses, the Public Lighting and Environment businesses; | 2. Excludes one-offs and

5

changes in scope; | 3. Water Italy, Grids and Public Lighting and Environment, gross of Public Subsidies

Overview of FY2023 results

ORGANIC GROWTH AND RELAUNCH OF INVESTMENTS

EBITDA, €m

CAPEX, €m

Non-recurring events and change In scope

Grant-funded

R EV ENUES1 5,138

4,649

1,305

1,391

1,050

1,143

44

-8

150

45

49

1,347

+87

(-1%)

1,260

993

(+7%)

1,001

FY2022

FY2023

FY2022

FY2023

REGULATED

87%

88%

88%

EBITDA2

86%

Net profit, €m

NFP, €m

Non-recurring events and change in scope

280

294

4,440

4,847

14

+49

49

(+22%)

+407

231

280

(+9%)

FY2022

FY2023

FY2022

FY2023

NFP/

3.40x

3.49x

EBITDA

Organic EBITDA growth mainly driven by regulated businesses and efficiency initiatives, offsetting the negative impact of the energy scenario

Relaunch of investments in the Water Italy, Grids and Public Lighting businesses

Operating performance has more

than offset increases in depreciation and financial costs

Significant reduction in NET DEBT/EBITDA ratio compared with 2023 guidance (<3.8x)

1, Revenues after adjusting for non-recurring events and changes in scope; | 2. Includes, in addition to the regulated

6

Water Italy and Grids businesses, the Public Lighting and Environment businesses

EBITDA FY2023

IMPROVEMENT DRIVEN BY ORGANIC GROWTH OF REGULATED BUSINESSES

EBITDA, €m

1,391

5

129

84

54

744375

WATER

GRIDS AND PUBLIC ENVIRONMENT

PRODUCTION

COMMERCIAL OTHER BUSINESSES2 FY2023 EBITDA

ITALY

LIGHTING

54%

27%

6%

4%

8%

<1%

(871)

1,305

+7%

1,347

1,391

1,260

44

-26

118

-19

-31

EBITDA FY2022 Water Technical

CO2 allowances

Normalised

Energy

Organic growth

Normalised

Change in scope FY2023 EBITDA

Quality Bonus

Environment

FY2022

scenario

FY2023

and non-

segment + Other

EBITDA

EBITDA

recurring events

1. Includes, in addition to the regulated Water Italy and Grids businesses, the Public Lighting and Environment businesses| 2. Overseas Water, Engineering & Infrastructure Projects and

7

Corporate

FY2023 NET PROFIT

OPERATING EFFICIENCIES AND ORGANIC GROWTH HAVE OFFSET INCREASES IN DEPRECIATION AND FINANCIAL COSTS

Net profit, €m

Non-recurring events and changes In scope

280

294

14

49

231

280

FY2022

FY2023

Tax

38%

31%

rate

FY22-23 net profit bridge, €m

Actions aimed at efficiency recovery and growth in the regulated businesses more than offset the increase in depreciation and interest rates (rise in rates began in H2 2022).

  1. FY 2022 non-recurring events (€49m), primarily including:
    • Gain on sale of stake in photovoltaic assets
      (€16m)
    • Exemption from obligation to purchase
      CO2 allowances for Terni plant (€8m)
    • "Water Technical Quality Bonus" (€18m)
    • income from the discounting of Gori's debt (€4m)
    • Capital gain from sale of SIMAM (€3m)

+22%

280

A

231

280

B

14

294

49

122

46

27

FY2022

Change in

FY2022

Depreciation

Financial

Operatin

FY2023

Change in

FY2023

net profit scope and non- Normalised

charges

g profit

normalised

scope and

net profit

recurring

Net Profit

net profit

non-recurring

events

events

  1. FY2023 non-recurring events
    (€14m), primarily including:
    • "Water Technical Quality Bonus" (€18m)
    • Capital gain from sale of SIMAM (€2m)
    • Change in scope (€3m)
    • FTV Revamping - Energy Box (€-9m)

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FY2023 CAPEX

INVESTMENT PLAN CONTINUES WITH FOCUS ON REGULATED BUSINESSES

CAPEX, €m

31

50

39

41

300

1,1431

682

60%

26%

3%

4%

4%

3%

(883)

WATER

GRIDS AND PUBLIC

ENVIRONMENT

PRODUCTION

COMMERCIAL

OTHER BUSINESSES2 FY2023 CAPEX

ITALY

LIGHTING

  • REPAIR AND WIDENING OF WATER AND SEWER PIPES
  • EXTRAORDINARY MAINTENANCE OF PLANTS AND NETWORKS
  • WORK ON TREATMENT PLANTS
  • CHANGE IN SCOPE OF CONSOLIDATION

• UPGRADE OF THE GRID

• WORKS ON SAN

• UPGRADE OF

• CUSTOMER

• CORPORATE:

• WORK ON PRIMARY

VITTORE AND

HYDROELECTRIC

ACQUISITION

IT PROJECTS

TERNI PLANTS

POWER PLANTS

AND SECONDARY

• SMART SERVICES AND

SUBSTANTIONS

• CONSTRUCTION

• CONSTRUCTION OF

E-MOBILITY PROJECTS

• INSTALLATION OF 2G

OF PLASTIC

PHOTOVOLTAIC

SORTING PLANT

PLANTS

METERS

• CHANGE IN SCOPE

OF

CONSOLIDATION

1. Including financial investments totalling €150m | 2. Overseas Water, Engineering & Infrastructure Projects and Corporate | 3. Includes, in addition to the regulated Water Italy and Grids

9

businesses, the Public Lighting and Environment businesses

FY2023 Cash Flow

IMPROVEMENT IN FREE CASH FLOW

CASH FLOW, €m

FY2023

A

A Positive operating CF of €148m, highlighting the capacity to

meet the period's investments thanks to the result of operational

management, with an improvement of €129m compared to 2022.

1,391

B Cash Flow before M&A and IFRS16 mainly reflects the cash

7

(104)

(153)

1,141

absorption linked to dividend payment and financial charges.

C Compared to 2022 there has been an increase of €120m

(993)

mainly due to the higher Operating CF only partly offset by the rise in

financial charges

148

(137)

B

(148)

(181)

(68)

(317)

(21)

Change in Operating

(407)

EBITDA

Change in

Long-term

Net

Operating

Financial

Taxes paid

Dividends

CF before

M&A

IFRS 16

Total

working

regulatory

provisions

CF before

Capex

CF

income/

M&A and

cash

capital

receivables

and other*

Capex

(charges)

IFRS 16

flow

FY22

1,305

(62)

(25)

(198)

1.020

(1,001)

19

(97)

(179)

(181)

(438)

22

(35)

(451)

∆ FY2023

C

86

69

(79)

45

121

8

129

(40)

31

0

120

(90)

14

44

VS FY2022

* Provision for expected credit losses reclassified from Change in Provisions to Change in WC

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Acea S.p.A. published this content on 06 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 10:12:08 UTC.