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).
- 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)
- Gain on sale of stake in photovoltaic assets
+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 | |||||
- 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)
8
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 | 10 | ||||||||||||||||||||||||||||||||||||||
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
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.