Investments of 2,9 billion euros and a constantly growing dividend up to 12 cents per share. These are the cornerstones of the new industrial plan to 2023 approved by Hera's board of directors.
"In the light of the growth trend higher than expected and the M&A operations carried out, first of all the joint venture in the North East with Ascopiave, the Emilian multiutility "presents the new five-year strategic document, which reflects the commitment to further development industry, supported by investments, innovation and attention to sustainability,” the company said in a statement.
From a financial point of view, the new business plan envisages a gross operating margin in 2023 of 1,25 billion up by 219 million compared to the same period of 2018. In the preliminary final balance of 2019, the gross operating profit was 1,08 billion, up by 4,85% compared to the previous year.
Sectorally, the expected EBITDA in 2023 of electricity and gas distribution services, the water cycle and district heating is 537 million euros, up compared to 464 million in 2018, while the EBITDA of the waste sector will increase from 252 million in 2018 to 307 in 2023, with an investment forecast of 618 million between 2019 and 2023.
The five-year plan announces industrial and financial investments for 2,9 billion euros: 2 billion will be used to maintain the current plant base, while 900 million will be destined for "its further expansion". Above all, the investments intended for the organic development of the plants will increase, reaching 540 million (+30% compared to the previous plan). Investments will mainly be concentrated in regulated activities: 73% of the total will be allocated to the network chain and urban hygiene activities, with infrastructure modernization and development interventions.
Il ratio between net financial position and EBITDA in 2023 it will be equal to 2,8 times after that at the end of 2019, following the Ascopiave operation, it reached 3,05 times (net of it it would be 2,5 times).
Let's move on to a chapter very dear to investors: the dividend. The new Plan provides for a constant increase in the coupon. It starts from 10 cents per share in 2019, to continue with 10,5 cents per share in 2020, 11 cents in 2021 and 11,5 cents in 2022. At the end of the period, i.e. in 2023, the dividend will reach 12 cents per share, up by 20% compared to the last coupon paid in 2018. "The growth rate - points out Hera in a note - is therefore higher than that envisaged in the previous Business Plan, which instead featured an increase in biennial dividends”.
As for the industrial parameters, the new plan will be based on three guidelines: industrial growth, risk management and circular economy, explains a note. In terms of sustainability, the Emilian multi-utility points out that almost 3/4 of the growth expected over the plan period will be supported by sustainable projects, thus bringing the value of the business activities which, in addition to generating operating margins, respond to the drivers for sustainable growth, to reach 2023 million euros in 530 (equal to 42% of total EBITDA). “Among our goals for 2030: to increase the recycling rate of municipal waste, reaching 67% and exceeding the same EU target of 65%; further reduce the Group's energy consumption, decreasing it by -10% compared to 2013; cut linear network losses in the water cycle by 7% compared to 2018. Commitments that are perfectly in line with the principles of the circular economy and with the very nature of our business", specifies the CEO of Hera, Stefano Venier.
The development will be driven by a mix of organic growth and acquisitions. In detail, the contribution to EBITDA growth deriving from organic growth is estimated at 112 million (123 if we consider the lower incentives from waste-to-energy activities), while growth of a further 107 million is expected from acquisitions.
By 2023, the Group expects a further increase in separate waste collection in the areas managed, up from 62,5% in 2018 to 75% in 2023. In the network chain, a significant part of resources will be allocated to the renewal of meters: the installation of over 500.000 meters for the water, 150.000 for electricity and 650.000 for gas, of which 300.000 NexMeter
On the commercial front, Hera aims to have 3,5 million energy customers by 2023. An objective that was redefined upwards compared to the previous plan after the partnership with Ascopiave "which consolidated the Group's presence in the North-East and made it possible to hit the previously defined target (2 million customers) more than 3 years in advance" . The operation with Ascopiave has also led Hera to occupy third place at a national level in the sale of energy”, underlines the company again.
"The Business Plan that we are presenting today outlines objectives in line with our path - underlines the chairman of Hera, Tomaso Tommasi of Vignano – we have been growing uninterruptedly for 17 years, creating value for the territories in which we operate and for all stakeholders, starting with our shareholders".
