1h 2017 consolidated results - amazon s3€¦ · 1h consolidated results €m 1h 2017 ebitda 649...

1H 2017 Consolidated Results

Milan, July 31st,2017

2

Highlights of the period

3

+ -Hydro volumes

CCGT performance, MGP and MSD

LGH: standalone growth and FY consolidation

Non recurring YoY comparisonOrganic growth in DH, Networks and Waste

EPCG put option exercise effects

1H 2017 HIGHLIGHTS

1st Plastic Treatment Plantin construction

ASVT and Patavina Techacquisition

MoU with “Utilitiesof Lombardy”

extended to September

Project Mistral on operating excellence Kicked off

With impact on 2017 1H economics

2nd Plastic Treatment Plantconstruction authorisation granted

4

KEY FINANCIAL INDICATORS

1H 2016

614

1H 2017

649

1H 2016

2,323

1H 2017

2,918

FY 2016

3,136

1H 2017

3,047

1H 2016

254

1H 2017

157

1H 2016

212

1H 2017

252

REVENUES EBITDA

GROUP NET INCOME

NET FINANCIAL POSITION

€M

+26%

-38%

+6%

GROUP ORDINARY NET INCOME*

+19% -89€M

* Excluding extraordinary items

1H 2017 HIGHLIGHTS

5

Analysis of results

6

2016

614

-80

2016Ordinary

53429 6

2234 0 2

-23

604

45

2017

649

2016Non

RecurringItems/

redundancyschemes

Gener&

Trading

EnergyRetail

Waste Networks&

DistrictHeating

SmartCity

Corporate EPCG 2017Ordinary

2017Non

RecurringItems/

redundancyschemes

€M+35

+70

1H CONSOLIDATED RESULTSGROUP EBITDA

7

2016

170

2016Non

RecurringItems

-14

2016Ordinary

156

-17

27 4 2 3

-9

13

LGH

4

2017Ordinary

185 1

2017

186

Environ.Market

Plants'Hedging

andDispatching

TradingPortfolio

Other Fixedcosts

SFMEBITDA

GasMargin

2017Non

RecurringItems

+16

+29

1H CONSOLIDATED RESULTSGENERATION & TRADING EBITDA

€M

• CCGT performance more than offsetting low hydro production• Excellent results on Gas optimization• Lower environmental markets margin

2016

73

-7

2016

Ordinary

66

Power

Market

-3

Gas

Market

2

Fixed

Costs

-2

Other

0

LGH

9

2017

Ordinary

725

2017

77

2016

NonRecurring

Items

2017

NonRecurring

Items

+4

+6

• Free market customer base more than 100K• Reduction in Unitary Margins mainly due to higher

unbalancing costs (price effect)

1H CONSOLIDATED RESULTSENERGY RETAIL EBITDA

€M

9

2016

36

80

119

2016Non

RecurringItems

-8

2016Ordinary

36

72

111

Collection

-3

UrbanWaste

TreatmentPlants

5

OtherTreatment

Plants

3

InternationalProjects

0

LGH

17

2017Ordinary

17

77

33

1334

2017

18

80

33

137

21

21

1

5

2017Non

RecurringItems

1

5

+18

Other Treatment Plants

Collection

Urban Waste Treatment Plants

+22

• Positive treatment plants margins thanks to higherprices and quantities

1H CONSOLIDATED RESULTSWASTE EBITDA

International Projects

€M

Collection +2.9€M

Treatment +14.7€M

10

2016

53

60

66

42

6

227

2016Ordinary

52

60

14

44

6

176

ElectricityNetworks

2

GasNetworks

4

WaterCycle

3

DistrictHeating

10

PublicLighting

1

LGH

14

2017Ordinary

17

56

62

14

54

7

210

2017

16

58

64

15

85

7

245

2016Non

RecurringItems

51

2017Non

RecurringItems

35

+18

+34

Gas NetworksElectricity NetworksWater Cycle Public Lighting Heating

• DH benefitting from higher gas prices, commercial developmentand temperature effect

• Positive white certificates margin

1H CONSOLIDATED RESULTSNETWORKS AND DISTRICT HEATING EBITDA

€M

LGH (Networks & Heating)

11

2016

13

22

35

Generation and Retail

-23

Distribution

0

2017

13

-1

12

-23

Energy

DistributionLow hydro production (-55%): higher import (at

very high prices)

1H CONSOLIDATED RESULTSEPCG EBITDA

€M

12

FROM EBITDA TO GROUP NET INCOME

1H CONSOLIDATED RESULTS

€M

1H 2017

EBITDA

649

D&A

-209

Risk

Provisions

-11

Non rec.

transact.

1 4

Net

FinancialExpenses

-61

-95

EBT

278

Taxes

-119

Net result

fromdiscontinuedoperations

1

Minorities

-3

1H 2017

NetIncome

157

Investments

carriedat equity

EPCG

write-downand

put option

discount

1H 2016 614 (198) 373 - (13) 2544 (63)(36) (106)52

(1) -95€M, of which:• -60€M D&A (EPCG write-down)• -35€M Net Financial Expenses

-

(1)

13

BREAKDOWN BY ACTIVITY BREAKDOWN BY BUSINESS

+41 +41

CAPEX


€M

2016

8

28

78

1

10

130

2017

11

42

98

9

4

4171

2

3

3 Generation &Trading

Energy Retail

Waste

Networks and DistrictHeating

Corporate

A2A Smart City

EPCG

2016

61

58

11

130

2017

67

78

13

13

171

Maintenance

Development

Mandatory

M&A

14

NET FREE CASH FLOW


€M

1H 2017

EBITDA

649

Change

in NetWorkingCapital

-33

Change in

otherassets/

liabilities

-139

Use of

Funds

-10

Tax Paid

-1

Net

FinancialExpenses

-53

FFO

(1)

413

Capex

-171

Dividends

-153

Free

CashFlow

89

Share

Buyback

0 89

Net FreeCash

Flow

(1) Funds from operations after working capital change

614 (71) 358 (130) (37) 651H 2016 (51) (54)(7)(73) (126) 102

15

Closing remarks

16

-30

EPCG Expected 2H EBITDA

Delta EBITDA

-1

Fair Value Adj. of theinvestment in EPCG to the

Put Option NPV

-95

A2A Shareof EPCG

2H expected Net Income

Delta Group Net Income

EPCG Positive NFP as of 30/06/17

-206

Delta Net Financial Position

EFFECT OF THE DECONSOLIDATION OF EPCG ON FY 2017 FORECAST

17

H1 CONSOLIDATED RESULTSEBITDA GUIDANCE

CONF. CALLMAY 10, 2017

2H EPCGDECONSOLIDATION

EFFECT -30€M

HIGHER FULL YEAR NON

RECURRING ~+25€M

1.170 1.190

1.140 1.160

1.165 1.185

€M

€M

€M

FREE CASH FLOW ~100€M

GUIDANCE CONFIRMED

18

Annexes

19

EBITDA

Ordinary D&A

Provisions

EBIT

Net Financial Expenses

Associates & JV

EBT

Taxes

Minorities

GROUP NET INCOME

1H 2016 1H 2017 %

+5.7%

-5.6%

+69.4%

-2.9%

-52.4%

-

-25.5%

-12.3%

n.s.

€MREVENUES +25.6%

CHANGE

-11

+25

-11

-33

-

-95

-13

+10

+595

649

(209)

(11)

369

(96)

4

278

(119)

(3)

614

(198)

(36)

380

(63)

4

373

(106)

(13)

254

2,9182,323

Result from non recurr. transactions n.s.-51152

-38.2%-97157

Net result from discontinued operations n.s.+11-

+35

EPCG write-off n.s.-60(60)-

P&L


20

Intangible Assets

Shareholdings and Other Non Current Financial Assets

Other Non Current Assets/Liabilities

Deferred Tax Assets and Liabilities

Provisions for Risks, Charges and Liabilities for landfills

Employee Benefits

NET FIXED CAPITAL

Inventories

Trade receivables and other current Assets

31.12.2016Restated

30.06.2017 %€M

Tangible Assets 5,129

Current tax Assets/Liabilities

WORKING CAPITAL AND OTHER CURRENT ASSETS/LIABILITIES

TOTAL CAPITAL EMPLOYED

Equity

Net Financial Position

TOTAL SOURCES

1,704

80

(82)

341

(671)

(365)

6,136

159

2,210

37

278

6,415

3,279

3,136

6,415

Trade payables and other current Liabilities (2,128)

Non current Assets /Liabilities held for sale 1

4,979 -2.9%

1,709 0.3%

76 -5.0%

(76) -7.3%

297 -12.9%

(636)

(348) -4.7%

6,001 -2.2%

168 5.7%

1,878 -15.0%

(30) n.s.

356 +28.1%

6,358 -0.9%

3,311 +1.0%

3,047 -2.8%

6,358 -0.9%

(1,660) -22.0%

-5.2%

1 n.s.

BALANCE SHEET


21

2016

42

66

57

42

239

-2

2 0 1

-2

1

-3

LGH

31

2017*

43

57

64

14

39

31

267 -119

2017

51

69

62

39

31

285

12

4

16

Gen. &Trading

EnergyRetail

Waste

Networks& DH

EPCG A2ASmart

City Corporate

14

5

Costscovered

byrevenues

Changein perimeter

14

14

5

LGH

Gen. &Trading

EnergyRetail

Networks

& DH

Waste

EPCG

A2ASmartCity

Corporate

(*) 2017 net of change in perimeter and costs covered by revenues

+46

+28

EXTERNAL COSTS


Excluding LGH: -3€M

€M

22

1H 2016

12,003

Change inperimeter

-144

11,859

Netreduction

-150

LGH

1,221

1H 2017excluding

change in perim.

12,930466

1H 2017

13,396

1H 2016excluding

change in perim.

Change inperimeter

1H2016

332

-3 -1

328 1 3

-4

LGH

33

1H 2017exclud.

changein perimeter

360 011

1H2017

371

Change in

perimeter

Red.schemes

1H 2016exclud.

changein perimeter

Othercosts

Costeffect

FTEeffect

Red.schemes

Change inperimeter

FTE(1)

LABOUR COSTS (€M)

+1,394

(1) A2A Group’s Full Time Equivalent

+39

+32

LABOUR COSTS


23

Bonds

Loans

GROSS DEBT MATURITIES AS OF 30/06/2017


€M

2017

50

50

2018

300

96

396

2019

567

99

666

2020

145

145

2021

430

95

525

2022

500

91

591

2023

300

86

386

2024

300

64

364

2025

300

65

365

2026

47

Beyond

2026

98

180

278

47

24

RELAUNCH

• 1st Plastic treatment plant (Cavaglià): construction phase started

• 2nd Plastic treatment plant (Muggiano): construction authorisationgranted

• 1st FORSU plant: VIA presented

• More than 100,000 new mass-market contracts

• Increase to 90% of Lumenergia share capital (now fully consolidated)

• LGH:

‒ waste collection for 160k inhabitants in 49 municipalities in Cremona area

‒ start-up of subsidiary rationalization

REGENERATION

RESHAPE

• Public Lighting: Lainate tender won

• Acquisition of Patavina Technologies to develop IoT solutions

• A2A Smart City technological partner in “Oltre la Strada”, an urban regeneration program

• Launch of Milan E-HUB with 74 charges points expandable up to 132 electrical setup to serve Unareti EV fleet

• energy production +3% vs. Q2 2016: CCGT more than offsetting lower hydraulicity

UPDATE 3R

25

DISCIPLINE, DIALOGUE &

DIGITAL

• Lean Project underway, operational efficiencies already achieved; LGH started the lean roll-out in Q2

• 860 managers participated in ABC management development project focus on Listening, Needs and Change

• New external lighting concept at Vittoriale

• 2 new territorial sustainability reports presented (Milan and Bergamo)

• Winner of TopLegal Corporate Counsel Awards 2017 for Corporate Social Responsibility

• Company sustainability commitment strengthened: A2A Ambienteawarded ISO 50001: 2011 – Energy Management System certification for its WTE plants in Brescia, Milan and Corteolona

• A2A Energia project to identify digital championships, to improve digital relationships with customers

• Roll out of Work Force Management in Unareti and A2A Ciclo Idrico

• Start up of Maximo Refoundation project – new operation&maintenancesystem for networks: adoption of mobile technologies to maximize efficiency

ADDITIONAL • A2A, ACSM-AGAM, ASPEM, AEVV and Lario Reti Holding – deadline of MoU extended to the end of September

UPDATE 3D

26

Operational annexes

27(1) Net of intermediated Ipex volumes

(1)

VOLUMES


28

ENERGY SCENARIO


(1) Gas at virtual trading point

(2) Pfor 162/14 Oct 2014-Mar 2016.

(3) hourly average for each month

(4) based on gas at virtual trading point with 51% efficiency; includes transport costs

(5) 35% efficiency - includes cost spread on API2 and transport cost

(6) data subject to update by Terna

Average data1H

20161H

2017D % vs

2016

Brent $/bbl 41,0 52,8 29%

CO2 - EU ETS cost €/Tonn 5,7 5,0 -13%

Green Certificates €/MWh 99,6 0,0 -100%

€/$ €/$ 1,1 1,1 -3%

Brent € €/bbl 36,7 48,9 33%

PSV(1) €/MWh 14,6 19,3 32%

AEEGSI Gas Tariff (2) c€/mc 16,0 19,1 19%

Coal € (API2) €/Tonn 42,0 72,9 74%

PUN baseload(3) €/MWh 37,0 51,2 38%

PUN peak(3) €/MWh 40,9 57,4 40%

PUN off-peak(3) €/MWh 34,9 47,7 37%

CCGT gas cost(4) €/MWh 35,3 45,5 29%

Spark Spread CCGT_PSV vs Baseload €/MWh 1,7 5,6 n.a.

Spark Spread CCGT_PSV vs Peakload €/MWh 5,6 11,8 n.a.

Spark Spread CCGT_PSV vs Off-Peak €/MWh -0,4 2,2 n.a.

Clean Spark Spread vs Baseload €/MWh -0,4 3,8 n.a.

Clean Spark Spread vs Peakload €/MWh 3,4 9,9 n.a.

Clean Dark Spread vs Baseload(5) €/MWh 6,2 9,3 50%

29

This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither itnor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Some information contained herein and other material discussed at the meetingsmay include forward-looking information based on A2A’s current beliefs and expectations. These statements are based on current plans, estimates, projections, and projects and therefore you shouldnot place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materiallyfrom those contained in any forward-looking statement. Such factors include, but are not limited to changes in global economic business, changes in the price of certain commodities includingelectricity, gas and coal, the competitive market and regulatory factors. Moreover, forward-looking statements are current only at the date on which they are made.

1h 2017 consolidated results - amazon s3€¦ · 1h consolidated results €m 1h 2017 ebitda 649...

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