alperia group growth efficiency territory investments · alperia is the hydroelectric leader in...

IBDROOT\PROJECTS\IBD-LN\ZZZITALY\593915_1\SEL - Alperia\Presentation from the Company\2017\Alperia Presentation v5.pptx

1

Alperia Group+ Investments

+ Territory

+ Efficiency

+ Growth


Disclaimer

IMPORTANT: YOU ARE ADVISED TO READ THE FOLLOWING CAREFULLY BEFORE READING, ACCESSING OR MAKING ANYOTHER USE OF THE MATERIALS THAT FOLLOW.As used in this document, the expression “these materials” means this document, together with any oral statement or question-and-answersession and any written or oral material discussed or distributed in connection with the presentation or circulation of this document.These materials have been prepared by and are the sole responsibility of Alperia (the“Company”) and have not been verified, approved orendorsed by any lead manager, bookrunner or underwriter retained by the Company.These materials are provided for information purposes only and do not constitute, or form part of, any offer or invitation to underwrite,subscribe for or otherwise acquire or dispose of, or any solicitation of any offer to underwrite, subscribe for or otherwise acquire or dispose of,any debt or other securities of the Company (“securities”) and are not intended to provide the basis for any credit or any other third partyevaluation of securities. If any such offer or invitation is made, it will be done so pursuant to separate and distinct documentation in the formof a prospectus, offering circular or other equivalent document (a "prospectus") and any decision to purchase or subscribe for any securitiespursuant to such offer or invitation should be made solely on the basis of such prospectus and not these materials.These materials should not be considered as a recommendation that any investor should subscribe for or purchase any securities. Anyperson who subsequently acquires securities must rely solely on the final prospectus published by the Company in connection with suchsecurities, on the basis of which alone purchases of or subscription for such securities should be made. In particular, investors should payspecial attention to any sections of the final prospectus describing any risk factors. The merits or suitability of any securities or anytransaction described in these materials to a particular person’s situation should be independently determined by such person. Any suchdetermination should involve, inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects ofthe securities or such transaction.These materials may contain projections and forward-looking statements. Any such forward-looking statements involve known and unknownrisks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially differentfrom any future results, performance or achievements expressed or implied by such forward-looking statements. Any such forward-lookingstatements will be based on numerous assumptions regarding the Company’s present and future business strategies and the environment inwhich the Company will operate in the future. Further, any forward-looking statements will be based upon assumptions of future events whichmay not prove to be accurate. Any such forward-looking statements in these materials will speak only as at the date of these materials andthe Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements.These materials are confidential, are being made available to selected recipients only and are solely for the information of such recipients.These materials must not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purposewithout the prior written consent of the Company. By receiving and/or accessing these materials, you: (i) agree to be bound by the limitationsset out above; (ii) represent that you are a person who is permitted to receive information of the kind contained in these materials and (iii)undertake to comply with all requirements and limitation provided by applicable securities laws and regulations regarding the distribution anddissemination of information or investment recommendations.These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or usewould be contrary to local law or regulation. In particular, these materials (a) are not intended for distribution and may not be distributed in theUnited States or to U.S. persons (as defined in Regulation S) under the United States Securities Act of 1933, as amended and (b) are fordistribution in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act2000 (Financial Promotion) Order 2005 (the“Order”) or (ii) persons falling within Article 49(2)(a) to (d) (“high net worth companies,unincorporated associations etc”) of the Order.


Il maggiore provider energetico dell'Alto AdigePagina 3

We offer to the people the energy that nature provides us with, in order to shape together a future full of energy in harmony with the forces of nature

Nature: the spontaneous source of our energy


The largest energy provider in South Tyrol

South Tyrol’s new energy

Created from the merger between AEW and SEL in 2016, Alperia is South Tyrol’s new energy provider.

We produce energy from renewable resources, manage the electricity grid and sell electric energy and district heating systems. We project and construct renewable power plants and develop innovative technological solutions for the energy sector.


Table of contents• Executive Summary

• The Group

• Alperia history, governance and business model

• Competitive landscape

• Business Units profiles

• Financial data and debt structure


IntroductionExecutive summary

Alperia is the result of the merger at the beginning of 2016 of SEL and AEW, the market leaders in hydroelectric generation and energy distribution in Alto Adige, one of the wealthiest regions in ItalyThe merger strengthens the role of Alperia as central pivot for the energy supply and economic development of the territoryAlperia focus is the client, served through more efficient infrastructures (plant; grids) and innovative solutions (digitalization, e-mobility; ultra wideband)

Strong market

positioning and green

nature

Exposure to one of

Italy’s wealthiest

regions

Alperia is the hydroelectric leader in Alto Adige and one of the main green players in the North-East of ItalyManages 41 hydro plants for an installed capacity of 1,4 GWThe company serves+250.000 clients and an increasing number of medium-size enterprises for +3,4 TWh electricity sold. The company also manages 6 district heating grids and supplies heat to retail clients, businesses and PA

Alperia has obtained an investment grade rating, debt financing is well diversified between bonds and loans and has an average life above 6 years

Investment Grade Profile

Governance and

Ownership structure stability

Alperia has adopted a two-tier system aiming at implementing best in class governance in terms of checks and balances, while guaranteeing full transparency to all stakeholders Alperia is fully supported by a stable shareholding base formed by public bodies which identify Alperia with a key driver of development and economic strengthening of Alto AdigeShareholders support is strong and tangible, including financial support granted through guaranteed debt



• The Group






The GroupAlperia history

• 1898

Start of electric energy production in Alto Adige with the hydroelectric plant in Tel, built by Etschwerke, controlled by Bolzano and Merano Municipalites: the future AEW

• 1912

AEW builds and runs the Senales hydroelectric plant

• 1929

The biggest hydroelectric plant in Europe is in function: Cardanoplant. The plant supplies 7% of the national energy demand. Built by SIDI, the plant is now part of Alperia

• 1949

End of War World II: energy consumption increases rapidly. In 20 years time 5 hydroelectric plants are built in Val D’Ultimo and are now part of Alperia

• 1968

Inauguration of Naturno plant by AEW • 2001

Incorporation of SEL, SocietàEnergetica Altoatesina, as operator of the major hydroelectric plants in Val Venosta. Together with local Municipalities, SEL launches new renewable plants

• 2011

Power plants and grids previously managed by Edison and ENEL are transferred under local administration and become part of SEL

• 2014

SEL and AEW, together with their shareholders (Provincia Autonoma diBolzano, SELFIN, Bolzano and MeranoMunicipalities), take the first steps towards the merger. The aim is to create a key energy player in Alto Adige in order to reach the ambitious goals of the Province energy plan. The signing of the merger takes place at the end of 2015: incorporation of Alperia

• 2016

From the beginning of 2016 Alperia is fully operating. The group manages 45 hydroelectric plants, 8.600 Km of energy grid, 6 heating plants and serves over 225.000 clients through the supply of energy and gas


The GroupValues and long-term goals

Territorial roots

100% Green DNA

R&D

Client focus

Maximizing the added value for Alto Adige in terms of clean electricity, job and

infrastructures

Investing on the hydroelectricportfolio to optimize efficiency and

environmental compatibility

Using innovative technological solutions to develop new services and

to optimize the assets performance

Values…

Digitalization, eMobility, Ultra Wideband and new added value

services

+

From two local Groups…

…to a Leader in Alto Adige

…GOALS

Human capitalPositive job environment and “work-

life balance” initiatives, on-going training and focus on growth of skills

and talents


The GroupAlperia shareholding structure

Local governments

ProvinciaAutonoma di

Bolzano

54,45%

Municipality of Bolzano

Municipality of Merano

21% 21%

SELFIN(ca 100 local

municipalities)

3,55%

The shares representing the corporate capital of Alperia are divided into class A, class B, class C and class D

Class A and D shares have the right, pro quota, to the profits and reserves distribution in privileged and priority way of the incomes (net of duties and taxes) from the lease of concession “San Antonio” by Alperia Green Power

Such a privilege is however subject to Alperia dividend policy

No shareholders’ agreement has been entered into by the shareholders of Alperia. Relationships between shareholders are regulated by Alperia by-laws and by an investment agreement

Lock up in place until 01/01/2021, save for the possibility granted to PAB to dispose max 10% of its stake to SELFIN

Class A

Class B

Class C

Class D

Class A

Class B

Class C

Class D

408,380,656 shares

157,500,000 shares

26,619,344 shares

157,500,000 shares


The GroupAlperia governance and organizational structure (1/3)

... a two-tier system of corporate governance...

Supervisory Board Management Board

The Supervisory Board is authorized, inter alia, to1. appoint members of the Management

Board2. establish their remuneration3. approve Alperia financial statements4. authorize management decisions and

extraordinary transactions

• 6 MEMBERS APPOINTED BY THE SHAREHOLDERS (max. 3 years)

6 MEMBERS of which 3 by class A+D shareholders and 3 by Class B+C shareholders. At least 1 member must be a certified statutory auditor

•COMMITTEES: Appointments, Remuneration , Internal Audit and Risk Committees

• 6 MEMBERS APPOINTED BY THE SUPERVISORY BOARD (max. 3 years)

4 MEMBERS appointed by a voting list 2 MEMBERS (included the General Manager of Alperia) chosen from the Top Management of the Group upon a favorable vote of the Statutory Board of at least 5 members

• 1 COMMITEE: Executive Committee, with delegated management responsibilities

Dut

ies

Com

posi

tion

The Management Board has the power to perform the tasks involved in managing Alperia, inter alia:1. approve strategic, industrial and financial

plans of the Group2. prepare Alperia financial statements

(consolidated and statutory)


The GroupAlperia business model

ELECTRICITY GENERATION BU

SALES and TRADING BU

ELECTRICITY GRID BU

DISTRICT HEATING & SERVICES BU

HOLDING CORPORATE Business Unit

Maintenance and development of 4 hydroelectric electricity plants for a total installed capacity of about 1,4 GW

Maintenance and development of 8.705 km of electricity grid

+3,5 TWh electricity sold to 250.000 retail and medium-large size corporate clients

Maintenance and development of 6 district heating grids, with 1.500 clients served

ca 67% FY 2016

EBITDA

ca 10% FY 2016

EBITDA

ca 18% FY2016 EBITDA

ca 5% FY2016 EBITDA

SMART REGION

2017-21 business plan: Alperia as driver of Alto Adige energy transformation

Investment to develop added value services for private customers and the Public Administration includin, inter alia:

eMobility: development and management of power stations for charging electric cars/vehicles

optic fiber: extension of ultra wideband using the current public infrastructure



• The Group






The GroupCompetitive landscape: market position in generation

ALPERIA GROUP POSITIONING COMPETITIVE ARENA

Alperia is the #3 Italian hydroelectric producer managing an overall installed capacity of about 1,4GW

1,4 GW Installed capacity

41 managed hydro plants

4 TWh electricity produced

Altri operatori 2016 19.9%

Erg 3.2%

Iren 2.9%

Edison 5.3%

Hydro Dolomiti Enel 6.0%

CVA 6.3%

ALPERIA 8.8%

A2A 9.9%

Enel

2016 data from AEEGSI 2017 annual report

Gross. prod.

42 TWh

10% 20% 30%

Others


The GroupGeneration: Volumes produced historically

The 30-year historical track record represents the production as all the plants were fully controlled by Alperia along the entire horizon and it has

been used as reference for business planning

3.647.255

4.333.860 4.516.754

4.205.211

3.716.436 3.875.615

4.468.642

4.909.869 4.999.260

4.997.442

4.330.423 4.244.833

4.563.717

5.426.616 5.561.529

5.472.475

4.150.379

4.485.565

3.756.320

4.091.614

3.732.386

4.854.636

5.070.430

5.059.484 5.104.955

5.398.100

5.808.163

6.558.879

5.163.285

4.712.126

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

[TWh]


The GroupCompetitive landscape: electricity & gas sales

Alperia is leader in Alto Adige in the “domestic” segment and competes in the B2B market serving medium-large size enterprises (and, nationally, in the first 20

positions)


250.000Clients

Medium-large enterprises of the territory

+ 3,5 TWh

electricity sold

2016 35%

1%

2%

2%

3%

3%

3%

3%

4%

4%

5%

35%10% 20% 30%

2016~250 TWh

Sold volumes• 90% B2B• 10% Retail


1,4%


\

The GroupCompetitive landscape: market position in electricity grids

Electricity distribution


8.705 kmelectricity grid

2,4 TWhdistributed electricity

107 supplied

municipalities

Alperia is one of the first 5 players in Italy in the field of electricity distribution

Altri

operatori5

1

2

2

2

2

4

10

11

225

1%

4%

4%

85%

2%

0%

1%

1%

1%

1%

Market

SharesDistributed volumes (TWh)

Others



~4

~4

~5

~5

~8

~12

~19

~77

~77

Altri

Operatori

2%

29%

29%

7%

4%

3%

2%

2%

2%

M.S.

Grandi UtilitiesUtilities LocaliPlayer Specializzati

*

The GroupCompetitive landscape: district heating & services

Heated volumetry(Mmc)1600

Clients

6 district heating grids

+ 180 GWh

thermal energy

produced


Alperia manages 6 district heating grids and supplies heat to retail clients, business and public administration

Specialized player Local utilities Large utilities


*77% di Kinexia restante ASM Settimo Torinese e altri soci; Fonte: AIRU, Bilanci pubblici, Analisi Bain



• The Group






The largest energy provider in South Tyrol

Our company structure


67%

The GroupGeneration: BU profile – Strategic rationale

• Alperia produces, on an annual basis, approximately 4,300 GWh of electricity from 41 hydroelectric plants located in Alto Adige

• The installed capacity as at 31 December 2016 is approximately 1.4 GW• Alperia is also active in the production of electricity from other renewable sources

• In particular Alperia holds majority stakes in three photovoltaic parks located in the Municipalities of Ottana and Monte San Giusto and in Rimini which respectively produce approximately 11 GWh, 6.2 GWh and 4.3 GWh of electricity on an annual basis and a minority stake in a wind farm located in Tuscany which produces approximately 29.8 GWh of electricity per year

• Investments focused on increasing plant productivity

• Asset digitalization with enlarged sensor presence, component identification systems, automated on-remote data and measures collection

Overview

Selected investments

EBITDA

Plant name ConcessionConsolidation

perimeter

Median concession and consolidation; total capacity 2037 100%

BARBIANO P GARDENA 2019 100%

LASA 2041 100%

MARLENGO 2017 100%

BRUNICO 2017 100%

PRATI DI VIZZE 2017 100%

PREMESA 2020 100%

CURON 2020 100%

HCSenales 2039 40%

HC PRATI 2 2042 30%

HCWinnebach 2037 30%

CARDANO 2040 100%

BRESSANONE 2040 100%

LANA 2040 100%

SAN PANCRAZIO 2040 100%

SAN VALBURGA 2040 100%

SARENTINO 2040 100%

LAPPAGO 2040 100%

PONTE GARDENA 2040 100%

MULINI DI TURES 2040 100%

FONTANA BIANCA 2029 100%

PRACUPOLA - PRACOMUNE 2040 100%

VERSCIACO 2029 100%

STEGONA 2029 100%

SELVA GARDENA 2029 100%

PONTIVES 2029 100%

PREDOI 2029 100%

FRENA 2029 100%

CASTELBELLO 2031 100%

GLORENZA 2031 100%

SAN FLORIANO 2040 50%

STRAMENTIZZO 2035 50%

RIO RIVA 2036 49%

ENERPASS 2036 34%

BERGKRISTALL 2035 25%

EW EGGENTAL 2040 36%

ENERGY WELSPERG 2036 50%

EW BRIEN 2039 36%

PUNI ENERGIA 2038 37%

GOGENALMBACH 2037 30%

NATURNO 2023 100%

TEL 2040 100%

BOLZANO 2039 100%

SENALES 2040 100%

Plant name ConcessionConsolidation

perimeter

Median concession and consolidation; total capacity 2037 100%

No short-medium term issues on the concession side. The concession expiry year median is 2037


The GroupSales & trading: BU profile – Strategic rationale

Overview


• For the year ended 31 December 2016 the companies of the Group sold electricity and gas to approximately 250,000 clients

• In addition, volumes of electricity and gas sold by Alperia to final users for the year ended 31 December 2016 amounted to approximately 3,461 GWh and 258 MSmc, respectively.

• Creation of a full-digital sales channel, consistently with the digitalization and innovation program of Alperia Group

• Implementation of an advanced CRM to manage customers• Enhancement of SAP ISU functionalities and improvement of accounting practices and

monitoring of operating and economic performance• Increase of production data monitoring and analysis in relation to Energy Data Management and

platforms for market interactions

10%

EBITDA


The GroupElectricity grid: BU profile – Strategic rationale

• Plan to increase the network resilience (leveled up at 20kV) and subsequent quality improvement, reduction of penalties for breakdowns and intervention timing

• Substitution of approximately 250k electric smart 2G meters• Gradual roll-out of the new model “Cabina Primaria smart” on all the network• Realization of the Smart Grid infrastructure through the pilot-projects SmartNet

and SmartVizze

Overview


• Alperia currently operates in the distribution of electricity, gas and heating• In particular, Alperia’s electricity distribution network consists of a secondary

medium and low voltage network of approximately 8,705 km through which it distributes electricity in Alto Adige

18%

EBITDA


The GroupDistrict heating & services: BU profile –Strategic rationale

Overview


• This segment of business includes the district heating which is currently operated through 6 plants, research and development in the hydrogen/bio-combustible sector and the production of electricity from biomass and re-gasification

• Alperia provides district heating services to several municipalities in Alto Adige

• Development of remote-heating network in high potential Bolzano area

• Investments in maintenance and consolidation of Merano network to ensurestability and continuity of heat supply

EBITDA

5%



• The Group






Financial dataConsolidated Income Statement

(In Thousands of Euros) 2016Revenues 1,126,533

Other revenues and income 97,546

Total revenues and other income 1,224,079

Costs for raw materials, consumables and goods (501,068)

Costs for services (468,317)

Personnel costs (66,766)

Amortization, depreciation, provisions and write downs (131,009)

Profit / (loss) arising from the fair value measurement of investments in associates and joint ventures 31,679

Other operating costs (35,414)

Total costs (1,170,895)

Operating income 53,183

Gains (losses) on valuation of investments (1,636)

Financial income 2,778

Financial charges (18,517)

Net financial income (17,376)

Earnings before tax 35,808

Taxes (4,884)

Net profit (A) from continuing operations 30,924

Discontinued operations (3,930)

Net profit (B) from Discontinued Operations (3,930)

Profit for the year 26,994

of which attributable to owners of the parent 25,703

of which attributable to non-controlling interests 1,291


Financial dataConsolidated Balance Sheet

(In Thousands of Euros) As of 31-Dec-2016AssetsNon-current AssetsConcessions 718,044Other intangible assets 15,528Tangible assets 821,430Investments 41,454Deferred tax assets 27,627Other non current receivables and financial assets 43,580Total non-current assets 1,667,663

Current AssetsTrade receivables 286,959Inventories 21,569Cash and cash equivalents 57,564Other current receivables and financial assets 171,593Total current assets 537,685Assets held for sale and Discontinued Operations -Total Assets 2,205,348

Shareholders' EquityShare capital 750,000Other reserves 245,733Retained profits/ (accumulated losses) -Net profit 25,703Total shareholders' equity attributable to owners of the parent 1,021,436Non controlling interests 25,186Total consolidated shareholders' equity 1,046,622

LiabilitiesNon-current LiabilitiesProvisions for risks and charges 54,638Employee benefits 19,605Deferred tax liabilities 186,603Non current borrowings from banks and other lenders 566,932Other non current payables 9,236Total non-current liabilities 837,014

Current LiabilitiesTrade payables 229,800Current borrowings from banks and other lenders 42,578 Current tax liabilities -Other current payables 49,333Total current liabilities 321,711Liabilities held for sale and Discontinued Operations -Total Shareholders' Equity and Liabilities 2,205,348


Debt structure

227.626

369.800

6.849 6.849

Dec'16

Debts vs banks and others Bond Hedging Shareholders loan

42.578

566.852

Dec'16

Short term Long term

000/Eur Beginning Ending Interest rate Spread Drawn amount At Dec'16Banks - "pool" Jun'12 Dec'22 Euribor 6m 1,12% 61.000Banks - "pool" Jun'12 Dec'22 Euribor 6m 0,92% 10.000Banks - "pool" Jun'10 Dec'17 Euribor 6m 0,86% 95.000 19.035

BEI Oct'14 Oct'26 1,80% 25.000 25.000BEI Oct'14 Oct'25 2,00% 50.000 50.000

CDP Jun'11 Jun'23 Euribor 6m 0,38% 80.000 41.600CDP May'08 Dec'20 4,80% 55.800 26.398

Sparkasse Jun'16 Mar'17 2,65% 2.000 2.024Raiffeisen Landesbank Sep'11 Mar'26 Euribor 6m 1,55% 8.600 3.013

Unicredit Leasing Jun'12 June'305,9% linked to

"Renew. Energy EUR 3m"

21.500 9.067

Cassa Rurale Renon Aug'14 Jun'32 3,95% until Mar'21 10.650 9.988Others 783Costs -515Total 227.626

41.233

000/Eur Beginning Ending Interest rate AmountTranche 1 Jun'16 June'23 1,41% 100.000Tranche 2 Jun'16 Jun'24 1,68% 125.000Tranche 3 Dec'16 Dec'26 2,50% 150.000

Costs -5.120Total 369.880

Most of the financial debt is long term: no meaningful refinancing risk ahead (next 18 months). Average life: 6,4 years

90% of the debt sitting at parent Alperia SpA

Immaterial secured debt

Sources of debt financing is split between bonds and loans. The latter shows a good degree of diversification due to the multiple counterparties involved

80% of financial debt is at fixed rate

alperia group growth efficiency territory investments · alperia is the hydroelectric leader in...

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