Energy

CEO Mazzoncini: 'A2A raises dividend and estimates, profits 2024 over 800 million'

Interview with the utility's number one: 'Europe must build infrastructure for the green transition. Nuclear power?'Not in the plans for now, but we are studying it'

13 November 2024

L'amministratore delegato di A2a Renato Mazzoncini alla presentazione dell'aggiornamento del Piano Strategico 2024-2025 , Milano, 12 novembre 2024. A2a conferma i 22 miliardi di investimenti del Piano Industriale al 2035 e alza la crescita media annua del dividendo di "almeno il 4%". Lo annuncia il gruppo indicando come obiettivi di piano un margine operativo lordo di 2,4 miliardi al 2027 e 3,3 miliardi al 2035, un utile netto di 0,7 miliardi al 2027 e superiore al miliardo a fine periodo. ANSA/DANIEL DAL ZENNARO NPK

4' min read

The new plan to 2035? "It sends a clear message: Europe must build infrastructure for the green transition in order to be competitive and autonomous. Bids on hydroelectric concessions? 'Those who compare us to beach resorts are wrong: big investments are needed and we cannot give away strategic assets to foreigners'. Large acquisitions and nuclear power? 'Today they are not on the agenda', in the future who knows, 'we are carefully studying the atom'. On 12 November, A2A presented the update of the plan to 2035, which confirms financial targets and investments for 22 billion - increasing the minimum annual growth of the dividend from 3% to 4% - and CEO Renato Mazzoncini immediately underlines a key fact: "Between 2021 and 2024 we have made 8 billion investments and 70% of all Capex to 2030 are already either authorised or in the pipeline". This, together with the brilliant performance of generation and the market, has allowed the company to close the nine-month accounts in clear growth - Ebitda +33% to 1.8 billion and net profit +68% to 713 million - and to raise the 2024 guidance for gross margins to 2.28-2.32 billion and for ordinary profits to 800-820 million.

What are the main innovations of this plan?

If Europe wants to be competitive on energy and critical raw materials, it must build infrastructure. A2A is doing this, creating value for everyone, including citizens. We are increasing dividends, even though we want to be perceived as a growth company, and we are launching a three-year shareholder plan for all employees. For the new plan we estimate an expected total shareholder return of 12%, rising to 14% from 2021.

Are you assuming a rise in the stock because you consider it undervalued?

We have estimated it in line with marginality growth, but it is clear that today we are travelling at an EV/Ebitda multiple of 5.5 times, when at least 7 would be reasonable. A low multiple is understandable for companies evaluated on the basis of dividend, but A2A is confirming in fact a very strong growth story.

One of your businesses is generation, where hydro plays a key role.

This year we close at over 5 TWh of production, recovering the profitability lost in 2022 when we had stopped at 2.7 TWh. Mol is stable and diversified: the results should be analysed as a whole and in a multi-year perspective.

On the issue of tenders for hydroelectric concessions, there are those who compare you to bathers.

He's wrong, because there are important differences: beach assets are owned by the state, ours are not, nor do we fall under Bolkestein. Then there is the value of the dry works, which in the tenders that have just come out is underestimated by more than 10 times, thus opening a highway to the entry of foreign players. This is one of the issues in our appeals, we will discuss one in January. Furthermore, there is a lack of reciprocity with the rest of Europe, where there is no tendering. We believe that the regulatory proposal of the 'fourth way', investments in exchange for the renewal of concessions, should be pursued, also because there are more than 15 billion euro of interventions to be made in Italy. I hope that the new Commission will correctly interpret the position of Italian companies.

A2A aggiorna il Piano strategico al 2035, arriva l'azionariato diffuso

By 2025 your Rab electricity grids will surpass gas. Meanwhile in Italy with Italgas-2i a colossus of the sector will be born. Is this the right direction?

Of course: gas networks must enter a new phase of transition, where economies of scale are needed. I do not see any more growth in the sector, rather a consolidation towards a few large national players to cope with the phase-out in the long run.

You will soon complete the maxi acquisition of electricity grids from Enel, any other big deals on the horizon?

They are not planned, but I do not rule them out. In any case, in 2024 we will invest a total of 2.8 billion, a record for the group.

In Europe and Italy, initiatives on nuclear power are multiplying. For you, is the atom a state affair or a dossier for private individuals?

Energy in Europe is market-based, the state naturally has to be the regulator. For nuclear power there is a need for strong Capex and the cost of production is quite high, in line with current levels. In order to be able to invest, contracts for difference will be needed to reduce the price risk: there the state will have to play its part, but it will be the companies that will have to build the power stations. At present, nuclear power is not in A2A's plans, although we are studying it carefully.

Will nuclear power be in the Italian energy mix in the future?

Perhaps from 2050 onwards. The bottom line will be 60 per cent renewables, the growth of which should not be slowed down; the remaining 40 per cent will be played out by thermoelectric power with CO2 and nuclear power.

Cheo CondinaRedattore Radiocor
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Luogo: Milano
Lingue parlate: Italiano, inglese
Argomenti: Energia, infrastrutture, assicurazioni, finanza e mercati
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