Acea S.p.a. · MIL:ACE
Acea — 9M 2023 Earnings Presentation
27 slides from Acea's earnings presentation, Nov 10, 2023
Slide 1: ACEA Group 9M 2023 results
ACEA Group 9M 2023 results 10 November 2023
Slide 2: Agenda
Agenda 1 A CHALLENGING MARKET ENVIRONMENT 2 9M 2023 RESULTS 3 APPENDIX 2
Slide 3: A «challenging» market environment
A «challenging» market environment Renewed energy price inflation and ongoing developments in the regulatory framework Regulation Commodity prices and inflation Interest rates Water: Consultation on updated regulation of integrated water service tariffs for the 4th Commodity prices rose in the quart
Slide 4: Agenda
Agenda 1 CONTESTO DI MERCATO SFIDANTE 2 9M 2023 RESULTS 3 APPENDICE 4
Slide 5: Highlights 9M 2023
Highlights 9M 2023 E B I T D A G RO W T H , I N C R E A S E D I N V E S T M E N T I N R E G U L AT E D B U S I N E S S E S * A N D C O N T I N U E D O P E R AT I O N A L D I S C I P L I N E REVENUE Group revenue of €3.4bn, including approximately €1.8bn from Water Italy, Energy Grids & Water Italy,
Slide 6: Overview of 9M 2023 results
Overview of 9M 2023 results O RG A N I C G ROW T H A N D R E L AU N C H O F I N V E S T M E N T S EBITDA (€m) CAPEX (€m) Non-recurring events and changes in scope Grant-funded REVENUES * 3,794 3,400 Organic EBITDA growth driven 1,002 1,006 715 784 primarily by the regulated businesses 38 14 50 and e
Slide 7: EBITDA 9M 2023
EBITDA 9M 2023 I M P RO V E M E N T D R I V E N B Y O RG A N I C G RO W T H O F R E G U L AT E D B U S I N E S S E S EBITDA (€m) 1,006 82 6 279 63 48 528 WATER ITALY GRIDS & SMART CITIES ENVIRONMENT PRODUCTION COMMERCIAL OTHER BUSINESSES^ EBITDA 9M 2023 AND HOLDCO 53% 28% 6% 5% 8% <1% (87*) +3% 1,00
Slide 8: Net profit 9M 2023
Net profit 9M 2023 O P E R AT I N G E F F I C I E N C I E S A N D O RG A N I C G RO W T H H AV E O F F S E T I N C R E A S E S I N D E P R E C I AT I O N A N D F I N A N C I A L COSTS NET PROFIT (€m) Non-recurring events and changes in scope Efficiency improvements and growth of regulated businesses
Slide 9: CAPEX 9M 2023
CAPEX 9M 2023 I N V E S T M E N T D R I V E C O N T I N U E S W I T H F O C U S O N R E G U L AT E D B U S I N E S S E S CAPEX (€m) 733* 31 34 20 197 28 423 WATER ITALY GRIDS & SMART ENVIRONMENT PRODUCTION COMMERCIAL OTHER BUSINESSES^ CAPEX 9M 2023 CITIES AND HOLDCO 57% 27% 4% 4% 5% 3% 88%** WATER I
Slide 10: Cash Flow 9M 2023
Cash Flow 9M 2023 I M P ROV E M E N T I N F R E E C A S H F LOW CASH FLOW (€m) 9M 2023 Operating FCF of €24m highlights ability to fund capex with 1,006 operating cash flow during the period, with an improvement of €112m -139 versus 2022. -60 758 -50 Cash flow before M&A and IFRS16 primarily reflect
Slide 11: Financial structure 9M 2023
Financial structure 9M 2023 L E V E R AG E G U I DA N C E C O N F I R M E D, AV E R AG E C O S T O F D E B T 2 % LEVERAGE CONS 9M CONS 9M CONS CONS N E T D E B T / E B I T D A LT M NET D EB T /EB I TDA (€m) DEC 2022 2023 vs 2023 vs 9M 9M 2023 9M 2022 DEC 2022 2022 30 SEPTEMBER 2023 31 DECEMBER 2022
Slide 12: Water Italy: organic EBITDA growth +6%
Water Italy^: organic EBITDA growth +6% VA L U E C R E AT I O N T H RO U G H I N V E S T M E N T REVENUE ORGANIC EBITDA GROWTH* MAIN DRIVERS (€m) (€m) Non-recurring events and changes in scope +6% 1,006 1,071 26 50 516 490 31 520 8 528 +40 980 1,020 (+4%) (26) 9M2022 9M2023 EBITDA BONUS FOR EBITDA 9
Slide 13: Grids & Smart Cities: EBITDA growth +6%
Grids & Smart Cities: EBITDA growth +6% F O C U S O N R E S I L I E N C E A N D D I G I TA L I S AT I O N O F T H E G R I D REVENUE EBITDA MAIN DRIVERS (€m) (€m) 452 469 +6% 2G ELECTRICITY METERS +17 Installed at 30 September 2023 264 15 279 (+4%) ~ 245k 9M2022 9M2023 EBITDA ORGANIC EBITDA 9M 2022 G
Slide 14: Environment: increase in waste treated +9%
Environment: increase in waste treated +9% O N G O I N G I N T E G R AT I O N O F P L A N T S A C Q U I R E D I N C E N T R A L I TA LY REVENUE EBITDA MAIN DRIVERS (€m) Non-recurring events and changes in scope (€m) 254 248 -27% 11 11 21 21 -16 83 72 11 243 227 (-7%) 53 63 (11) (20) 9M2022 9M2023 EB
Slide 15: Production: increase in electricity production +14%
Production: increase in electricity production +14% O V E R 2 0 0 M W O F R E A D Y- T O - B U I L D P H O T O V O LTA I C P L A N T S REVENUE EBITDA MAIN DRIVERS (€m) (€m) Non-recurring events and changes in scope 139 -33% 0 105 -28 79 139 111 (-20%) 53 48 (26) (5) -6 -5 9M2022 9M2023 EBITDA ENERGY
Slide 16: Commercial: EBITDA growth +44%
Commercial: EBITDA growth +44% G ROW T H I N F R E E M A R K E T C U S TO M E R B A S E REVENUE EBITDA MAIN DRIVERS (€m) (€m) Non-recurring events and changes in scope 2,312 1 1,813 +44% -498 2,311 (-22%) 58 25 82 57 (1) EBITDA NON-RECURRING EBITDA 9M 2022 ENERGY SCENARIO 9M 2023 9M2022 9M2023 9M 20
Slide 17: Q&A SESSION
Q&A SESSION AC E A G R O U P S T R AT E G I C G U I D E L I N E S A N D 9 M 2 0 2 3 R E S U LT S RO M E , 1 0 N O V E M B E R 2 0 2 3 17
Slide 18: Agenda
Agenda 1 A CHALLENGING MARKET ENVIRONMENT 2 9M 2023 RESULTS 3 APPENDIX 18
Slide 19: Sustainable growth pathway in early 2023
Sustainable growth pathway in early 2023 KEY DEVELOPMENTS Technical and Contractual DECO SIMAM EIB loan Quality bonus January 2023 April 2023 July 2023 Luglio 2023 October 2023 Settembre 2023 Completion of the acquisition of Completion of the acquisition of €435m EIB loan obtained. ACEA ATO2 ranked
Slide 20: Sustainable growth pathway in early 2023
Sustainable growth pathway in early 2023 KEY DEVELOPMENTS RSE Top Utility for Top Employers Italia 2023 Research and Innovation Standard Ethics January 2023 March 2023 Luglio July 2023 2023 Acea obtains «Top Employers Italia Winner of the award as «RSE Top Standard Ethics upgrades ACEA’s 2023» certi
Slide 21: Sustainability ratings
Sustainability ratings 62/100 «EE+» «B» «A» Positive outlook Management Level 81.58/100 «Leader ESG ESG risk Identity» Rating 20.1 21
Slide 22: Consolidated income statement and statement of financial position at 30 September 2023
Consolidated income statement and statement of financial position at 30 September 2023 Consolidated income statement (€000) Consolidated statement of financial position (€000) 22
Slide 23: Financial highlights for Engineering & Infrastructure Projects, Overseas Water and the Holdco
Financial highlights for Engineering & Infrastructure Projects, Overseas Water and the Holdco ENGINEERING & INFRASTRUCTURE PROJECTS OVERSEAS WATER HOLDCO (€m) 9M 2023 9M 2022 % change (€m) 9M 2023 9M 2022 % change (€m) 9M 2023 9M 2022 % change Revenue 82.7 84.4 -2.0% Revenue 73.5 70.0 +4.9% Revenue
Slide 24: Water Italy - Regulation
Water Italy - Regulation TARIFF REGIME FOR THE THIRD REGULATORY PERIOD (MTI-3. 2020-2023) ARERA RESOLUTIONS: 580/2019, 639/2021 For the regulatory period 2020-2023, ARERA has confirmed the approach that provides for: ▪ Allowed revenue (VRG) determined on the basis of the FULL COST RECOVERY principle
Slide 25: Grids & Smart Cities - Regulation
Grids & Smart Cities - Regulation ARERA Resolution 614/2021 – «Rate of return on invested capital for infrastructure services in the electricity and gas sectors for the period 2022-2027» • 2022-2023 WACC 5.2% Expected increase in allowed return from 2024 ARERA Resolution 497/2023 – «Application crit
Slide 26: Environment - Regulation
Environment - Regulation ARERA RESOLUTION 363/2021 (MTR-2) – «Approva of the tariff regime for waste (MTR-2) for the second regulatory period 2022- 2025» ▪ The scope of application covers treatment plants used in the «recovery and disposal» of all urban waste, regardless of how it is subsequently cl
Slide 27: DISCLAIMER
DISCLAIMER THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT REFLECT THE COMPANY’S MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL AND OPERATIONAL PERFORMANCE OF THE COMPANY AND ITS SUBSIDIARIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON ACEA S.P.A.’S CURR