And twelve. With the merger by incorporation of Amga of Udine, approved last Thursday and destined to become operational from next July 2002st, the Bolognese multiutility Hera has achieved, under the presidency of Tomaso Tommasi di Vignano, the twelfth corporate aggregation in a decade. After all, the company, which is active in the gas, electricity, water and waste sectors, was born in 11 precisely under the sign of mergers and as an integration of XNUMX local utilities, which at the time financial analysts considered a handicap and which instead proved to be a winning and decisive factor for growth, which made Hera the second Italian multi-utility.
This is confirmed by the numbers which today record over two million energy customers, almost 9 employees, a turnover of around 5 billion euros and a deeply rooted presence in the Emilia-Romagna region, but now also in the Veneto and Friuli-Venezia Giulia regions. . But what is striking is that its new industrial plan expects to grow further. “The merger and acquisition is by now a characteristic of ours and, after Amga, it will continue with at least one more coup” Tommasi announces in this interview with FIRSTonline.
The policy of small steps and acquisitions of neighboring and small-sized companies has proved to be an element of success and Tommasi plans to remain faithful to it, but he has no preclusions in principle to a possible super-utility project, should the conditions ripen and a move to create value. That value which today allows Hera to be at the top of the stock market ranking of coupons and to recognize "at least nine cents of dividend per share until 2017". To the satisfaction of all members, old and new.
FIRSTonline – President, after months of negotiations, Thursday the white smoke finally arrived between Hera and Amga of Udine: what does the merger with the former Friulian municipality mean for your group and under what conditions does it take place?
TOMMASI – The integration with Amga, which will become operational from next July XNUMXst, continues the development started in the promising North-East area with AcegasAps, in line with the industrial plan and the path implemented up to now, with the valorisation of the recent increase in capital to which the Fondo Strategico Italiano also contributed. This is an opportunity to achieve rapid industrial integration thanks to the numerous industrial similarities, territorial contiguity, ownership structure and development path. All this while also exploiting the industrial and operational assets of AcegasAps, which is configured as the vehicle for a major development and rationalization operation in the North East, with the aim of improving the quality and efficiency of services to citizens and extracting the benefits of stairs. With the Amga operation we thus complete our roots in Friuli-Venezia Giulia downstream of the integration with Aps in Padua and after our arrival in Trieste in Acegas.
FIRSTonline – Pordenone is missing, will it be the next destination?
TOMMASI – No, Pordenone is out of our horizons because it is the land of a primary national operator.
FIRSTonline – And what are the conditions of the agreement with Amga? Will there be cash adjustments from Hera?
TOMMASI – No, the integration will take place without cash adjustments and the Municipality of Udine will come to hold 2,98% of Hera, with the right to nominate a director on the Board of AcegasAps and a member within the Hera syndicate agreement .
FIRSTonline – The agreement with Amga essentially seems to confirm two constants of Hera's strategic line: growth through small acquisitions and expansion in the rich North-East. Is that it?
TOMMASI – Yes, this is the corporate strategy right now. It seems to us to be the best way to create value for our shareholders with each transaction and build a new reality, homogeneous in the area and capable of enhancing the already existing industrial base, which will be able, with even greater efficiency and effectiveness, to respond to the growing needs of local service. This logic then has another advantage: it allows the company to metabolize each step quickly, without jolts, and, after a few of these exercises, naturally, almost as if it were an "ordinary" activity. The choice of the North East responds to the characteristics illustrated and is the most logical, considering that in Emilia-Romagna there is now little room for growth.
FIRSTonline – During your presidency, Hera has racked up numerous acquisition-integration agreements for new utilities: what number have you reached with Amga?
TOMMASI – In addition to the eleven former municipal companies that gave life to Hera in 2002, a further eleven new companies have joined the Group in recent years, Amga, hopefully, will be the twelfth. However, I like to point out that these last ten years of history have not only been characterized by the integration of former municipal companies but also by numerous "chain" acquisitions, which have allowed us to achieve an industrial structure and presence in the Environment and of Energy in many cases of national importance. With these operations, we have tested our own “recipe” that allows us to go ahead with the consolidation sure that our integrations will bear fruit and further strengthen the economies of scale and the governance of our Group.
FIRSTonline – In terms of turnover, employees, margins and market shares, after the integration with Amga, what will Hera become?
TOMMASI – The Group resulting from the merger, thanks to the approximately 150 thousand supply points of Amga, will be able to count on approximately 1 million and 700 thousand supply points in gas distribution, of which almost 500 thousand in Friuli-Venezia Giulia and Veneto. The customer base in Gas and Electricity will exceed two million, while the lighting points managed for Public Lighting will be approximately 380, of which 85 in Friuli-Venezia Giulia and Veneto. In addition, it will be possible to further develop public lighting activities, plant management and all innovative activities with low environmental impact, such as cogeneration, by pooling the know-how of the two companies. Without forgetting the commercial strength that the new reality will be able to express in the sale of Energy products.
FIRSTonline – How is your positioning in the national rankings?
TOMMASI – The Hera group is the first in Italy in the waste sector, the second in the water sector, the third in gas distribution and the fifth in the sale of gas and electricity.
FIRSTonline – And what do Hera's turnover, margins and employee figures say?
TOMMASI – Amga brings with it 370 million in revenues, which raises the Group's aggregate turnover to 5 billion euros, which ranks second overall among Italian multiutilities. Consolidated EBITDA will exceed 2014 million in 850 and the total number of employees will approach 9, of which around 300 from Amga. But what I like to point out is that profitability per employee will reach 110 euros in operating margin, which is quite a goal.
FIRSTonline – President, in the country of a thousand bell towers it is usually difficult to merge local companies from different territories but Hera seems to represent a happy exception: what is the secret of your policy of territorial alliances? What do you ask and what do you offer in return to new partners?
TOMMASI - No secrets. Simply, in a market as complex as that of local public services, characterized by a regulatory framework (see tenders) which will further modify the logic of competition and service expectations, we believe rationalization and consolidation policies are fundamental, in order to offer the territories greater investments and more efficient, solid and competitive realities. All we ask is that you share this vision. And in return we offer know-how and operational equipment of absolute excellence, a very solid financial structure, seriousness and professionalism.
FIRSTonline – And then there are your dividends, which are among the highest in the stock market.
TOMMASI – Yes, one of the elements of greatest interest to Hera is given by the dividend policy which, precisely because of good management and financial solidity, has always allowed shareholders interesting returns on investment. The Hera coupon is worth much more than the yield of a BTP and this counts. Finally, the guarantees offered by corporate governance should not be underestimated: a clear public majority, however very distributed, which prevents the emergence of "masters" and at the same time ensures management authority and operational autonomy. For this I am grateful to our members who have always supported this path with lucidity and I think they were satisfied with it.
FIRSTonline – The suggestive idea of a super-utility from the North that imitates the model of the German Rwe sometimes reappears on the political scene: up to now Hera has followed another path of growth but this means that it excludes the idea of the super-utility a priori or, under certain conditions, could she be interested in such a project?
TOMMASI – An aggregation makes sense if it produces value in a reasonable time, through synergies and operational integration, if it improves the levels of service to citizens and if it ensures fluid governance. Achieving these three objectives through a merger between one or more major companies is not impossible, but it is certainly more difficult. For this reason we have so far followed the path of exogenous growth like wildfire, that is, progressively aggregating smaller realities. That said, it is clear that every opportunity must be evaluated and investigated on its merits without prejudice.
FIRSTonline – In short, is it better to consolidate downwards by overcoming the excessive fragmentation of local utilities than upwards?
TOMMASI - Exactly. Let us not forget that in Italy the six listed multiutilities quantitatively represent 1,3% of the companies on the market and account for 47% of the sector's turnover, while in France in the gas sector the leading operator holds 80% of the market share and in UK top six operators control 99% of the market. However, many of the reorganization activities that the Energy Authority is carrying out certainly help to find a stable and certain reorganization path and an improvement of a structure that has few comparisons in Europe. In particular, the forthcoming gas tenders will encourage, through competition, the search for greater efficiency and innovation of operators and a better service to citizens but also a rationalization of a far too fragmented sector.
FIRSTonline – Chairman, what will be the central objectives of Hera's new business plan?
TOMMASI – In particular, we are working to maintain a growth path, despite a still extremely difficult external situation for the next five years, and to confirm the Group as the unifying leader in the sector. In 2017, the goal is to achieve a gross operating profit of 951 million euros, with an increase of 289 million. The main drivers are the important organic growth, on which the positive effects of the recent internal reorganization will also be felt, the synergies being extracted from the AcegasAps aggregation and the further expansion of the perimeter. Profitability per employee will exceed 110 thousand euros, up 10% compared to 2012.
FIRSTonline – Does expanding the perimeter mean that you will not stop in Udine but that you are planning another acquisition?
TOMMASI – Yes, it's in our plans.
FIRSTonline – Where?
TOMMASI – In Emilia if the conditions are created or in neighboring territories.
FIRSTonline – To conclude with the Stock Exchange, Hera has so far given satisfaction to shareholders, both through rich coupons and through constant growth in capitalisation: will the payout remain generous this year as well? And what is still missing from the title to enter the FtseMib?
TOMMASI- The prospects of our 2017 business plan continue to grow results, strengthen financial solidity and consolidate relations with the market through a clear and simple dividend policy: at least nine cents of dividend are envisaged for each action every year until 2017. This is a commitment within the reach of the Group which will be able to improve its financial solidity ratios at the same time. The capitalization of the Hera Group sees us among the top 40 listed Italian groups and with the 2017 plan we expect to grow further both with organic growth and with M&A. The market has always liked this last component of Hera's growth and it has become our distinguishing feature compared to our competitors. Consolidating the sector is a long and necessary path, to which we are committed and it will certainly allow us to continue to increase our market cap and to get closer to entering the FtseMib.
