9m 2018 consolidated results

9M 2018 Consolidated Results

Milan, November 13th,2018

2

HIGHLIGHTS

ANALYSIS OF RESULTS

AGENDA

ANNEXES

3

CCGT AND HYDRO VOLUMES

WASTE TREATMENT PRICES

ENVIRONMENTAL MARKETS

PHV CONTRIBUTION

ACSM AGAM FIRST CONSOLIDATION

SPREAD CCGT

GAS MARGIN

PAPER PRICES

9M 2018 vs 9M 2017

Highlights

4

Key Financial Indicators

€M

Highlights

REVENUES EBITDA OrdinaryEBITDA

GROUP NET INCOMENET FINANCIAL

POSITION

GROUP NET INCOMEOrdinary

5

HIGHLIGHTS

ANALYSIS OF RESULTS

ANNEXES

AGENDA

6

363787

13313-1

Analysis of results

Group EBITDA Overview

€M

+2% +2% +2% -2%

7

KPIs include ACSM-AGAM contribution

Generation

€M

Analysis of results

• Material increase in gas price, affecting:

• Gas Portfolio

• Clean Spark spreads

• Hydro Production +11.5%

• Increasing contribution from PHV

CCGTProduction

(GWh)

HydroProduction

(GWh)

PHVProduction

(GWh)

5,9429M ‘17

7,5969M ‘18

+27.8%

2,8359M ‘17

3,1619M ‘18

+11.5%

29M ‘17

539M ‘18

>100%

a2a AchievedClean Spark Spread

(€/MWh)

11.19M ‘17

2.99M ‘18

-73.9%

8

Free MktCustomer

(‘000 EOP)

Market

Analysis of results

Energy Retail

€M

• Free market customer base over 1 million, 3x target achieved 1 year ahead

• Higher retail unit margins

• Strong advertising, marketing and sales expenses in Q3

GasSales(Mmc)

ElectricitySales(GWh)

+12.8%

1,0569M ‘17

1,1929M ‘18

8429M ‘17

1,1209M ‘18

+33.0% +30.0%

6,1329M ‘17

7,9779M ‘18

LightingPoints

(#000)

2139M ‘17

2259M ‘18

+5.6%


9

Waste

€M€M

Analysis of results

WasteCollection

(Kton)

Waste Treatment

(Kton)

• Collection: lower paper prices and higher disposal costs

• Increasing treatment prices

• Higher volumes (and prices) in the industrial segment

• First Treatment Plastic Plant opened in November

Equivalent EE Sales(GWh)

1,1899M ‘17

1,2319M ‘18

+3.5%

2,5489M ‘17

2,6119M ‘18

+2.5%

1,4959M ‘17

1,4879M ‘18

-0.5%


10

Networks and DH

€M

Analysis of results

* Provisional data, underlying the estimate of allowed revenues of the period

• Turnaround in EE RAB

• GAS networks: above average quality premium in 2017

• District Heating: higher volumes, offset by negative scenario (coal & Co2)

• IWC: Higher tariffs

RAB* GAS(M€)

Heat Volumes(GWht)

RAB* EE(M€)

1,1489M ‘17

1,3949M ‘18

+21.4%

1,6779M ‘17

1,7759M ‘18

+5.8%

6459M ‘17

6469M ‘18

+0.1%

51.79M ‘17

52.39M ‘18

+1.1%


DistributedWater

(Mmc)

11

From EBITDA to Group Net Income

Analysis of results

€M

9M 2017Restated

876 (296) 473 (92) (2) 2265 (91)(21) (153)-

12

Capex

Analysis of results

BREAKDOWN BY ACTIVITY BREAKDOWN BY BUSINESS

€M

+59M€2017

245M€2018

304M€

Change in perimeterACSM AGAM +8€M

13

Net Free Cash Flow

Analysis of results

(1) Funds from operations after working capital change

€M

-

876 (26) 544 (245) (262) (116)9M 2017Restated

(21) (62)(104)(119) 146(153) -

14

Guidance

Analysis of results

€M

1,200 – 1,240 €M

2018

EBITDA

>400 €MNET INCOME

CAPEX(1)

170-200 €MNET FREE CASH FLOW

GUIDANCEINCREASED

~550 €M

(1) Includes M&A

Incl. non recurring ~33€MIncl. ACSM AGAM ~35€M

15

ANNEXES

AGENDA

ANALYSIS OF RESULTS

HIGHLIGHTS

16

Reported Ordinary Reported Ordinary

a2a 876 818 875 824 -1 -0% +6 +1%

Generation 255 252 265 257 +10 +4% +5 +2%Power Generation 219 217 250 243 +31 +14% +26 +12%

Gas Margin 35 35 -1 -1 -36 n.s. -36 n.s.

Photovoltaic 0 0 15 15 +15 n.s. +15 n.s.

ACSM AGAM 1 0 1 0 +0 n.s. +0 n.s.

Market 166 124 152 126 -14 -8% +2 +2%Energy Retail 114 102 110 102 -4 -4% +0 +0%

Public Lighting 11 11 10 10 -1 -13% -1 -13%

Energy Solutions 40 11 30 14 -10 -25% +3 +33%

ACSM AGAM 0 0 2 0 +2 n.s. +0 n.s.

Waste 195 190 197 194 +2 +1% +4 +2%Collection 58 58 45 46 -13 -23% -12 -21%

Urban Treatment 128 125 138 136 +10 +8% +11 +9%

Industrial Treatment 5 5 12 12 +7 >100% +7 >100%

International Project 2 2 0 0 -2 n.s. -2 n.s.

ACSM AGAM 1 0 2 0 +1 n.s. +0 n.s.

Networks 270 262 273 258 +3 +1% -4 -2%Electricity Networks 99 96 93 94 -6 -6% -2 -2%

Gas Networks 97 94 94 93 -2 -2% -1 -1%

Water Cycle 28 29 31 31 +3 +12% +2 +7%

District Heating 45 43 41 40 -4 -10% -3 -7%

ACSM AGAM 2 0 14 0 +12 n.s. +0 n.s.

Smartcity 4 4 6 6 +2 n.s. +2 n.s.

Other -13 -13 -18 -17 -5 n.s. 1 n.s.

9M 2017 9M 2018 Change

Reported Ordinary

Business Units EBITDA Breakdown

Annexes

€M

*

*

*

*

* ACSM AGAM’s 2017 values refer to spin off (Aspem and mini idro)

17

P&L

Annexes

€M

9M 2017 Restated

9M 2018Delta vs

2017

Delta %

vs 2017

Revenues 4,147 4,518 371 8.9%

EBITDA 876 875 (1) -0.1%

D&A (296) (333) (37) 12.5%

Provisions (21) 2 23 n.s.

EBIT 559 544 (15) -2.7%

Net Financial

Expenses(91) (86) 5 -5.5%

Associates & JV 5 4 (1) -20.0%

Result from non

recurr. Transactions0 6 6 n.s.

EBT 473 468 (5) -1.1%

Taxes (153) (146) 7 -4.6%

Net Result from

disc. operations(92) 20 112 n.s.

Minorities (2) (7) (5) n.s.

Group Net Income 226 335 109 48.2%

The restated figures reflect the reclassification of the EPCG Group’s results in accordance with IFRS 5

18

Balance Sheet

Annexes

€M 30.09.2017 * 31.12.2017 30.09.2018Delta 9M 2018

Vs FY 2017

Delta 9M 2018

Vs 9M 2017

Tangible Assets 4,516 4,606 4,632 26 116

Intangible Assets 1,782 1,863 2,129 266 347

Shareholdings and Other Non

Current Financial Assets73 71 25 (46) (48)

Other Non Current

Assets/Liabilities(84) (117) (133) (16) (49)

Deferred Tax Assets and

Liabilities321 301 272 (29) (49)

Provisions for Risks, Charges

and Liabilities for landfills(622) (625) (595) 30 27

Employee Benefits (331) (319) (312) 7 19

Net Fixed Capital 5,655 5,780 6,018 238 363

Net Working Capital 569 437 493 56 (76)

Other Current

Asset / Liabilities(295) (305) (310) (5) (15)

Current Tax

Asset / Liabilities48 103 (20) (123) (68)

Working Capital and Other

Current Assets/Liabilities322 235 163 (72) (159)

Non current Assets /Liabilities

held for sale217 224 109 (115) (108)

Total Capital Employed 6,194 6,239 6,290 51 96

Equity 2,942 3,013 3,413 400 471

Net Financial Position 3,252 3,226 2,877 (349) (375)

Total Sources 6,194 6,239 6,290 51 96

* Shareholding in EPCG valued at fair value, reclassified according to IFRS5

19

Energy Scenario

Annexes

(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

9M

2017

9M

2018

D % vs

2017

Brent $/bbl 52.6 72.7 38%

CO2 - EU ETS cost €/Tonn 5.3 14.4 n.s.

€/$ €/$ 1.1 1.2 7%

Brent € €/bbl 47.4 61.0 29%

PSV(1) €/MWh 18.8 23.6 26%

AEEGSI Gas Tariff (2) c€/mc 18.3 20.7 13%

Coal € (API2) €/Tonn 73.2 77.1 5%

PUN baseload(3) €/MWh 51.3 58.9 15%

PUN peak(3) €/MWh 57.5 64.9 13%

PUN off-peak(3) €/MWh 47.8 55.5 16%

CCGT gas cost(4) €/MWh 44.3 55.3 25%

Costo Coal €/MWh 37.0 38.5 4%

Environmental costs (CCGT) €/MWh 2.0 5.4 n.s.

Environmental costs (Coal) €/MWh 5.2 14.0 n.s.

Spark Spread CCGT_PSV vs Baseload €/MWh 7.0 3.6 -49%

Spark Spread CCGT_PSV vs Peakload €/MWh 13.2 9.6 -27%

Spark Spread CCGT_PSV vs Off-Peak €/MWh 3.5 0.2 -94%

Clean Spark Spread vs Baseload €/MWh 5.0 -1.9 n.s.

Clean Spark Spread vs Peakload €/MWh 11.2 4.2 -63%

Clean Dark Spread vs Baseload(5) €/MWh 9.1 6.4 -30%

20

9M

2017

9M

2018

Δ vs

2017

Δ % vs

2017

A2A Group Thermal production GWh 8,205 9,558 1,352 16%

CCGT production GWh 5,942 7,596 1,653 28%

Coal production GWh 1,398 1,356 -42 -3%

Oil production GWh 865 606 -259 -30%

A2A Group Hydro production GWh 2,835 3,161 326 11%

A2A Group Photovoltaic production GWh 2 53 52 3392%

Wholesale electricity sales and Foreign Markets GWh 6,143 8,689 2,545 41%

Ipex sales GWh 6,862 4,053 -2,809 -41%

Electricity sales GWh 6,132 7,977 1,846 30%

Gas sales Mmc 1,056 1,192 136 13%

Electricity distributed GWh 8,686 8,885 199 2%

Gas distributed Mmc 1,601 1,716 115 7%

Water distributed Mmc 52 52 1 1%

Heat volumes sales GWht 1,677 1,775 99 6%

Cogeneration electricity sales GWh 172 204 32 18%

Collected waste Kton 1,189 1,231 42 4%

Waste disposal Kton 2,548 2,611 63 2%

WTE and other plants electricity production GWh 1,344 1,329 -16 -1%

WTE and other plants heat production GWht 871 906 35 4%

(1)

(1) Net of intermediated IPEX volumes

Volumes

Annexes


21

Bonds

Loans and others

* Excluding ACSM AGAM contribution

Gross debt maturities as of 30 September 2018*

Annexes

€M

22

• INTERNAL Community:‒ Establishment of Young

Talent Program‒ New digital workplace on

all employees• EXTERNAL Community:

‒ Innova2a project: second and third Shark Tank completed (200+ colleagues involved)

‒ 50+ initiatives in portfolio, of which 19 in execution and 5 in scale-up

‒ Enerchain: joined the open innovation project on blockchain with major players in the industry

• Partnership with Fiera Milano for the construction of the largest Rooftop solar panel in EU (10-14 MW)

• 6 MW of UVAP assigned, supplied through thermal driven cogeneration + 1 MW UVAC

GENERATION

WASTE

MARKET

NETWORKS

a2a T

2018 2022

TTransformation

EExcellence

a2a E

2018 2022

CCommunity

a2a C

2018 2022

• Opening of the 1st Plastic treatment plant (Cavaglià) with innovative process for material recovery

• Increasing of sorted waste collection in Milan up to 60%• Awarding of collection tender in

Como province (8,000+ inhabitants)

• 5 processes redesigned• Ongoing training on Agile

and Operational Excellence for the whole A2A management team

• 64 €M of investments in Digital and Tech Ytd

Sustainability• Signature of the first credit line in Italy linked to the goals of the group's sustainability plan and the standard ethics rating• A2A included in the FTSE4Good Index Series• Public presentation of the 2017 A2A Integrated Report, 10th edition about group’s performances on sustainability • N. 5 Territorial Integrated Reports prepared and presented: Milan, Brescia, Bergamo, Sondrio and Friuli Venezia Giulia

• Northern Lombardy multi-utility developments – Takeover of A2A on ACSM-AGAM completed

Annexes

Update on Strategic Progress

• +60 K new free market contracts• Digital campaign Member get Member• VAS: Casa Sicura commercial offer

• Agreement for new EV charging stations in Franciacorta and Cremona

• Opening of new cogeneration plant of Verziano, to support sewage treatment

• Smart meter water cycle roll-out

• Gas tender Milano 1 officially awarded

23

CONTACTS

A2A Investor Relations Team

Mail: [email protected]

Phone: +39 02 7720 3974

http://www.a2a.eu/en/investor/

9m 2018 consolidated results

Documents