A2A updates plan, profit to 2035 over 1 billion and raises dividend

(Il Sole 24 Ore Radiocor) - A2A updates its plan to 2035, focusing not only on financial growth but also on ecological transition understood as the choice of sustainable competitiveness. A combination that fully embodies the lines contained in the plan presented by Mario Draghi.

From a financial point of view, the plan envisages an ordinary net profit of EUR 0.7 billion in 2027 and over EUR 1 billion in 2035. The ebitda is expected to be 2.4 billion at 2027 and 3.3 billion at 2035. EUR 22 billion of investments in the period 2024-35 are confirmed, of which six billion for the circular economy and 16 billion for the energy transition. The pnf/ebitda ratio is expected to never exceed 2.7 times in plan arc. In addition, management believes that 'progress on the Group's structural growth path' has allowed for an update of the dividend policy. The new policy envisages a sustainable growth of thedividend per share of at least 4% per annum, compared to the 3% per annum envisaged in the previous Plan presented in March 2024. In terms of profitability, the Plan update shows an average Roi of 9% and an average Roe of 12%. The total expected shareholder return is about 12%. The Group's ambition over the Plan horizon is to maintain key industrial targets, including 3.4 billion Rab in electricity grids, 5.7 GW of capacity from renewable sources and over seven million tonnes of waste treated by 2035. The Group plans to expand its customer base to over 5 million by 2035, including 1 million with long-term contracts.

Under the Plan, the average duration of debt is always expected to be above five years, thus reducing the refinancing risk. The cost of debt, thanks to careful management, is kept below 2.8% in the medium term, an improvement over the March Plan, and averages below 3.4% in the long term. Moreover, the Plan's financial strategy will further increase the weight of Sustainable Finance, with the share of ESG debt in total debt going above 80% in 2027, above 90% in 2030, and reaching only sustainable debt in 2035. Furthermore, the plan confirms the Group's focus on a balanced and sustainable capital structure aimed at maintaining A2A's current credit rating. The Ffo/Net Debt ratio is expected to be 25.2% at the end of 2027, and in plan arc always in compliance with the metrics required by the agencies to maintain the current rating.

"We look to 2035 with a Plan that combines sustainable value generation, decarbonisation, innovation and contribution to the country's energy autonomy. These are strategic choices that guide our business and find confirmation in the Draghi Report for the relaunch of European competitiveness. Our long-term vision has allowed us to be solid in the face of the geopolitical and economic uncertainties of this historical phase, and to achieve excellent results, exceeding forecasts. This is why we have been able to make new investments by anticipating construction sites and revising dividends upwards for our investors,' explained CEO Renato Mazzoncini. "After having earmarked significant resources for an extensive welfare plan to support parenthood for the Group's employees, we have decided to propose a Widespread Share Ownership Plan at the next shareholders' meeting. We want to involve all colleagues in the company's growth path and share with them the results of work built together".

At the same time as the plan update, the company also presented its accounts for the first nine months of 2024, which saw net profit at€713 million, up 68% from the €425 million recorded in the same period of 2023, while ordinary profit grew 65% to €665 million. Revenues were down 17% to EUR 9,097 million, mainly as a result of falling energy commodity prices. EBIT amounted to EUR 1,070 million (+56%) and EBITDA stood at EUR 1,804 million (+33%). Capital expenditure rose by 13% to EUR 898 million and was earmarked for the development of photovoltaic plants, the upgrading and streamlining of networks to support decarbonisation, increasing the flexibility of generation plants, and the recovery of materials and energy. Eligible investments for the purposes of the European Taxonomy are 73%. The net financial position stood at EUR 4,011 million (EUR 4,683 million at 31 December 2023). Excluding the impact of changes in the scope of consolidation for the period and the hybrid bond issue, Pfn stood at EUR 4,688 million. On the energy transition front, renewables generation (energy from hydroelectric, wind and photovoltaic sources) accounted for 55% of production and amounted to 4.9 TWh.