Q3 2009 Hera Group analyst

Q3 2009 Hera Group analyst

• 1.
  First 9 months2009 results www.gruppohera.it
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  First 9 months2009 Results Analyst Presentation, 12th November 2009
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  Accelerating growth inQ3 > In first 9 months Ebitda moved to a > M&A activities progress in Q4 with double digit growth rate (+11.3%). the acquisition of 25% stake in Aimag. > Regulated activities were the main > Herambiente was short listed in a contributor (80% of 9m Ebitda organic competitive bid for the construction growth). and management of a new WTE in Tuscany. > Regulated Waste activities and new WTE contribution fully offset negative > Extraordinary further “Fiscal impact of slowdown on customer moratoria” charges for 23.5m€ were consumptions in Q3. fully accounted for in Q3 (28.3m€ in first 9 months). > Small but positive change in trend of Special Waste volumes in Q3. > Positive operating results achieved, not considering > New WTE Modena and Imola CCGT co- extraordinary one off “Fiscal gen. reached full operation at Q3 end, moratoria”, pushed up bottom line contributing slightly to achieved growth. by +19%. 9 months 2009 Group results 1
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  First 9 monthsoutstanding results despite economic slowdown Mainly driven by Energy sales, M€ 9m '08 % 9m '09 % Ch.% trading development and higher Revenues* 2.603,1 100,0% 3.121,0 100,0% +19,9% commodity prices. Accounts 25 m€ of Organic Operat. costs (2.176,7) (83,6%) (2.627,4) (84,2%) +20,7% Growth and 15 m€ of non Personnel (250,5) (9,6%) (261,1) (8,4%) +4,2% recurrent item related to Lower capitalised costs related Capitalizations 174,5 6,7% 157,6 5,0% (9,7%) to reduced capex and activities gas network acquisition. Ebitda 350,4 13,5% 390,1 12,5% +11,3% for third parties. D&A (170,4) (6,5%) (196,8) (6,3%) +15,5% Ebit 180,0 6,9% 193,3 6,2% +7,4% Financials (77,4) (3,0%) (85,8) (2,7%) +10,8% Financial interests include Other non oper. exp. (5,6) (0,2%) (15,7) (0,5%) +179,9% “Fiscal moratoria” effect (5.6 Pre tax Profit 96,9 3,7% 91,8 2,9% (5,3%) ’09 Tax rate affected by and 12.6 m€ in ’08 and ’09 Tax (40,4) (1,6%) (42,5) (1,4%) +5,2% Fiscal moratoria by ~5m€. respectively). Tax rate -41,7% -46,3% Group Net Profit 56,5 2,2% 49,3 1,6% (12,8%) Minorities (10,4) (0,4%) (7,2) (0,2%) +30,3% Net Profit post minorities 46,2 1,8% 42,0 1,4% (8,9%) Decrease relates to Marche Multiservizi and other minor ADJ Net profit ("fiscal Moratoria") 55,1 2,1% 65,4 2,1% +18,8% Group companies. Net Profit up by +19% excluding extraordinary “Fiscal moratoria” effect * Revenues include sales, change in stock and other operating revenues 9 months 2009 Group results 2
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  Organic growth achieveddespite economic slowdown Ebitda growth drivers (m€) +10,9 390,1 +28,8 Ebitda drivers 350,4 • Organic Growth (mainly regulated tariff progression and positive contribution from Gas marketing/trading) more than offset economic slowdown effects. • Organic Growth includes effects (lower lease and provision reversal by ~15 m€) of 9m '08 Syn & Org.G. New Plants 9m '09 network strengthening with municipal shareholders’ assets. 2009 Ebitda growth by quarters • New plants contribution mainly relates to Forlì, Ferrara and Modena WTE. • WTE Modena and Cogen. Imola started +26,0 +39,7 contributing to results in Q3. • Regulated activities highlight positive contribution (80% of growth). +12,4 +1,3 • Electricity sales yield outstanding results (+40% in volumes). Q1 Q2 Q3 9m 9 months 2009 Group results 3
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  Waste business: Newcapacity now on stream Ebitda M€ 9m '08 % 9m '09 % Ch. % Revenues 468.0 100.0% 480.3 100.0% +2.6% New WTE plants (Ferrara and Forlì) run at full Operat. costs (244.3) (52.2%) (257.0) (53.5%) +5.2% capacity and WTE Modena reached full capacity at Personnel (108.0) (23.1%) (106.6) (22.2%) (1.3%) Q3 end (total Waste treated further increased in Q3 Capitaliz. 14.5 3.1% 12.5 2.6% (13.9%) reaching 15% of total treatments). Ebitda 130.2 27.8% 129.2 26.9% (0.8%) Electricity produced by WTE increased in first 9 months about 29% (up to 313 GWh). Treatment volumes and mix (K ton) Increase of regulated tariffs and volumes of Urban Waste impact positively on Ebitda. 3.826 3.850 +0.7% These drivers were almost able to completely offset reduction in Special Waste and change in mix. Volumes of special waste still highlight a decrease Other of -8.5% (1,315k ton) but implys a recovery from Wte -12% in February ‘09. 12% 15% Landfill Q3 Ebitda in line with previous year. 31% 26% Herambiente started up a new plant of biogas in Cesena (Bio-WTE project). 9m '08 9m '09 9 months 2009 Group results 4
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  Water business: Tariffprogression underpin growth Revenues M€ 9m '08 % 9m '09 % Ch. % Sales growth mainly driven by tariffs increase Revenues 340.3 100.0% 356.3 100.0% +4.7% (~5%) as agreed with Authorities. Operat. costs (264.4) (77.7%) (263.8) (74.0%) (0.2%) Personnel (77.5) (22.8%) (79.4) (22.3%) +2.5% Volumes sold recovered from Q1 but are still Capitaliz. 96.5 28.4% 83.6 23.5% (13.4%) slightly lower vs last year due to economic Ebitda 94.9 27.9% 96.7 27.1% +1.9% slowdown effects. Slowdown of real estate industry also affected sales (lower new connections and services) even though a slight recovery was record in Q3. Data 9m '08 9m '09 Ch.% Ebitda Aqueduct (mm3) 197.0 195.3 (0.9%) First 9m ’09 results sign a positive growth (+1.8 m€) Sewerage (mm3) 170.4 168.4 (1.2%) mainly thanks to tariff increase able to more than Purification (mm3) 170.7 168.4 (1.4%) offset economic slowdown. Q3 Ebitda up by 11.9% vs last year. 9 months 2009 Group results 5
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  Gas business: Tradingactivities, commodity prices and asset expansion Revenues Higher volumes sold mainly related to enhanced M€ 9m '08 % 9m '09 % Ch. % trading activities and increased commodity prices. Revenues 763.8 100.0% 907.8 100.0% +18.9% Better climate conditions helped to partially Operat. costs (693.6) (90.8%) (793.3) (87.4%) +14.4% offset economic slowdown effects on consumptions Personnel (35.2) (4.6%) (40.7) (4.5%) +15.6% of final customers. Capitaliz. 44.5 5.8% 41.8 4.6% (6.1%) Ebitda 79.5 10.4% 115.6 12.7% +45.3% Ebitda Regulated distribution activities positively contributed as a consequence of the new tariff system (+9 m€) and of the effects related to network acquisition from Municipalities (+18 m€). Ebitda also benefits from increased Data 9m '08 9m '09 Ch.% trading/market activities that provided a contribution by 7 m€. Volumes distrib. (mm3) 1.550,6 1.517,0 (2,2%) District Heating increased sales benefiting from Volumes sold (mm )3 1.730,9 1.868,9 +8,0% exploitation of heat production related to new cogen. plant now on stream (+2 m€ mainly related District Heating (GWht) 279,2 301,8 +8,1% to new connections). Hera takes part to the open season for the new capacity in the Tauern pipeline. 9 months 2009 Group results 6
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  Electricity business: Strongmarket expansion Revenues M€ 9m '08 % 9m '09 % Ch. % Sales increase underpinned by market expansion Revenues 1,083.1 100.0% 1,457.9 100.0% +34.6% (+21.7% final sales) and +44.5% trading revenues. Operat. costs (1,049.3) (96.9%) (1,425.5) (97.8%) +35.8% Personnel (16.3) (1.5%) (16.7) (1.1%) +2.5% Capitaliz. 17.4 1.6% 17.0 1.2% (2.4%) Ebitda Ebitda 34.8 3.2% 32.6 2.2% (6.4%) Better contribution from sales and trading activities partially offset lower contribution from own power gen. (CCGT plants) and change in fair value. Imola 80 MW cogen. unit reached full operations at Q3 end. Tariff increase following new tariff system for the Data 9m '08 9m '09 Ch.% regulatory period 2008-2011 almost offset distribution volume reduction (-1 m€). Volumes sold (GWh) 3,650.7 5,111.4 +40.0% Volumes distrib. (GWh) 1,707.5 1,619.6 (5.1%) Micro-cogen. highlighted a slight improvement in results. 9 months 2009 Group results 7
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  Other services: Progressionin results despite dismissions M€ 9m '08 % 9m '09 % Ch. % Revenues Revenues 57.1 100.0% 77.4 100.0% +35.6% Sales increase underpinned by good Operat. costs (34.3) (60.0%) (46.5) (60.1%) +35.7% performance of Public Lighting and of TLC Personnel (13.5) (23.6%) (17.6) (22.7%) +30.2% infrastructure management business. Capitaliz. 1.5 2.7% 2.7 3.5% +75.2% Ebitda 10.9 19.1% 16.0 20.7% +46.9% Ebitda Ebitda increase mainly driven by Public Lighting an TLC businesses (which reflects the Data 9m '08 9m '09 Ch.% increased stake in Acantho and Satcom) whilst some residual marginal businesses have been Public Lighting (K unit) 326.0 327.1 +0.3% dismissed. Group company rationalisation process continues and currently almost all Group companies highlight positive results and mainly focus on Hera core businesses. 9 months 2009 Group results 8
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  Capex and NetFinancial Debt Capex plan on schedule. M€ 9m '08 9m '09 ~35% relates to development Capex. Waste 92.0 86.2 Water 88.1 81.5 Waste: 52 m€ relates to new WTE plants. Gas 43.4 48.8 Electricity 31.6 27.7 Water: Capex compliant to ATO agreements, with some Other 4.0 9.2 reductions related to new connections. Holding 33.1 30.2 Investments 4.3 1.2 Electricity: more than 46% relates to new Imola cogen. unit. Capex 296.5 284.9 Financial Debts Net Debts Q3 '09 Change versus H1 (108 m€) mainly relates to less favourable As of Jun. 30 '09 (1.788,4) “Accise” position (47 m€), Operating Cash Flows including Fiscal Moratoria (39 m€) and physiological outflow of Q3 change (108,4) provisions accrued. As of 30 Sept. '09 (1.896,8) Q3 change in Financial Debt in line with Q3 ’08. of which: Short term Debt (200,9) Commercial receivables and payables remain substantially Long term Debt (1.696,0) unchanged in Q3. 9 months 2009 Group results 9
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  Closing remarks • Results reported highlight a solid and comfortable growth more than offsetting economic slowdown. • AGM held in October approved projects (LOC rationalisation, network acquisition from Municipals and the increase of the limit in voting rights for private shareholders up to 5%) included in the new Business Plan enhancing the visibility of targets. • Expanding initiatives on Energy markets include further Group companies rationalisation in the Marche region through the merger of Aspes Gas into HeraComm Marche permitting to control directly 83K customers. Hera is also taking part to the competitive bid for the acquisition of Isogas Srl (57K customer in Gas and above 22K customers in Electricity). • Moreover, is expected shortly the second phase of Florence WTE tender. Resilient and continuous development and full offsetting of Fiscal moratoria Closing Remarks 10