April 6 th 2016 A2A STRATEGIC PLAN 2015 RESULTS & BUSINESS PLAN UPDATE

Transcription

1 April 6 th 2016 A2A STRATEGIC PLAN RESULTS & BUSINESS PLAN UPDATE

2 AGENDA Strategic Plan update 2

3 3

4 3Rs & 3Ds achievements RESTRUCTURE RELAUNCH RESHAPE Cost efficiencies over plan Sorgenia plant swap GenCo Gas creation Set to be most flexible plant in Europe 9 new collection tenders for 115K inhabitants served Built pipeline for M&A deals Creation of a single networks company, Unareti Customer retail growth over plan New tenders for public lighting (+70k lights vs. 2014) Launch of A2A Smart City Energy audit services start up DISCIPLINE Cost efficiency goals achieved EN&A project deploying effects Cash flow generation over plan DPS over plan DIALOGUE Stakeholders: initiatives for local communities People strategy: Futura2a, Melograno, Change Management, Gulliver Sustainability policy fully implemented DIGITAL Digital repositioning of A2A, A2A Energia and AMSA Smart solutions underway (demand response, storage, ) 4

5 FY vs FY 2014 Results REVENUES - 1% EBITDA + 2% M 4,984 4,921 1,024 1, Strategic Plan update GROUP NET INCOME + 110M GROUP ORDINARY NET INCOME * + 59% NET FINANCIALPOSITION - 14% NFP / EBITDA ,363 2, * Excluding extraordinary items equal to 212M in 2014 and 205M in 5

6 FY vs FY 2014 Results Group EBITDA 1, M + 35M , ,048 M Strategic Plan update NON RECURRING ITEMS 2014 REDUNDANCY SCHEMES ORDINARY GENERATION & TRADING ENERGY RETAIL WASTE DISTRICT HEATING NETWORKS EPCG AND OTHER ORDINARY REDUNDANCY SCHEMES NON RECURRING ITEMS 6

7 FY vs FY 2014 Results From Group EBITDA to Group Net Income 1, M Strategic Plan update EBITDA D&A RISK PROVISIONS EQUITY EBT TAXES NET INCOME WRITE OFF OF ASSETS NON- RECURR. TRANSACTIONS NET FINANCIAL EXPENSES MINORITIES 1, A 7

8 FY vs FY 2014 Results From Group Net Income to Group Net Ordinary Income % M Strategic Plan update GROUP NET INCOME REPORTED IMPAIRMENT OF ASSETS AND SHAREHOLDINGS TAX EFFECT ON IMPAIRMENT OF ASSETS EFFECT OF DEFERRED TAX ASSETS RECALCULATION GROUP NET ORDINARY INCOME GROUP NET ORDINARY INCOME

9 FY vs FY 2014 Results Capex Strategic Plan update MANDATORY DEVELOPMENT MAINTENANCE EPCG CORPORATE M NETWORKS DISTRICT HEATING WASTE ENERGY RETAIL GENERATION & TRADING BREAKDOWN BY NATURE BREAKDOWN BY BUSINESS Note: actual networks figures include Brescia LED project investments (~ 3M), reclassified inside financial receivables (IFRC treatment) in Financial Statement 9

10 FY vs FY 2014 Results Net Free Cash Flow 1, M Strategic Plan update EBITDA CHANGE IN NET WORKING CAPITAL USE OF FUNDS TAX PAID NET FINANCIAL EXPENSES FFO (1) CAPEX (2) FREE CASH FLOW DIVIDENDS NET FREE CASH FLOW (1) Funds from operations after working capital change (2) figures excluding the Brescia LED project investments (~ 3M), reclassified inside financial receivables (IFRC treatment) in Financial Statement 10

11 comparison vs Plan EBITDA + 4% GROUP ORDINARY NET INCOME (1) + 29% M 1,010 1, Plan A Plan A FIXED COSTS (2) CAPEX NET FINANCIAL POSITION - 10M - 15% % 2.76 NFP / EBITDA Strategic Plan update 1,165 1,155 Plan A Plan A 3,162 2,897 Plan A Results exceeding targets (1) Excluding A extraordinary items equal to 205M; (2) Opex and labour cost on a like for like basis; capitalized labour cost included, other personnel costs not included (amounting to 34M in Plan and 26M in A) 11

12 AGENDA Strategic Plan update 12

13 Executive summary Stronger management initiatives to tackle negative external factors STRATEGIC FRAMEWORK Strategic Plan confirmed and reinforced Strategic Plan update A WORSE CONTEXT MANAGEMENT INITIATIVES Energy markets scenario significantly worsened Net negative regulatory impact Additional cost reduction Acceleration on local aggregation Incremental regulated Capex; wider M&A pipeline New initiatives (not in plan) identified 13

14 Key Financial Highlights Target confirmed STRATEGIC PLAN NEW STRATEGIC PLAN LOCAL AGGREGATIONS TERMINAL YEAR EBITDA 1.35 B (2019) 1.30 B (2020) Additional EBITDA (2020) > 100M TERMINAL YEAR NET DEBT 2.5 B (2019) 2.4 B (2020) Solid investment grade to be maintained Strategic Plan update DIVIDEND POLICY ( c/share) 3.6 in, growing to ~ 7.5 by in, growing to ~ 7.5 by 2019 EPS accretive Stability and resilience of industrial portfolio and further value generation from local aggregations 14

15 AGENDA Strategic Plan update Restructure Relaunch Reshape Discipline, Dialogue, Digital 15

16 Thermal plant restructure REGULATORY SCENARIO Plan statements Capacity market 23.5 k/mw Starting from 2017 k/mw lower expectations 1-year delay Strategic approach New plan vs. previous plan - 34M EBITDA COST REDUCTION 100M of cumulated savings Target increased through En&A project Additional cost reduction Strategic Plan update R1 CAPACITY REDUCTION & FLEXIBILITY ONE CCGT COMPANY -3 GW capacity 35M in CCGT flexibility SFM & BR reconversion A2A GenCo Gas creation Active capacity management First-class flexibility program Projects confirmed Internal re-organization project on track and ready for sector consolidation Portfolio evolution confirmed GenCo Gas creation 16

17 30% reduction in capacity market expectations 30 k/mw Impact on 2019 total EBITDA vs previous plan - 50M (of which - 34M Thermal) 10 Strategic Plan update R Capacity market reviewed: New methodology to start in 2018 Reduction of remuneration per MW BP BP 2020 remuneration estimated at 30% discount vs recent UK capacity auctions 300M reduction on Italian electricity bill vs

18 CCGT cost efficiencies better than expected CCGT COST SAVING TARGET ADDITIONAL EFFICIENCY BY 2020 M - 21M - 5M Strategic Plan update R A A 2019 Previous BP Almost 60% of previous cost cutting target already achieved Additional 5M of cost reduction 2020 New BP ( 56M already in 2019) 18

19 Capacity reduction and plant reconversion confirmed CCGT SECTOR TRENDS Most players adopted a wait and see regulatory strategy Proprietary changes may trigger consolidation Reserve margin from 34% to 16.8% in A2A ACTIONS Active capacity management underway: Sermide3, Chivasso2 and Mincio in stand-by Plant swap Old plant sale (Cassano1 230 MW) Cost Efficiency Achieved First-class flexibilization project done; program completion within the plan GW SHUT- DOWN* STANDBY MUST RUN SWAPPED RUNNING Strategic Plan update R1 Other Thermal Several announcements of potential plant reconversions Green reconversion for old A2A non-gas plants confirmed. Project status: SFM presented Brindisi under development 2013 Today TOTAL A2A ACTIVE CAPACITY OF WHICH CCGT * Shut-down capacity includes 90 MW of Cellina hydro plant, out of A2A portfolio since 1/1/2016 (Edipower partial demerger) 19

20 Genco Gas platform for the Italian thermoelectric consolidation 100% 100% Integration of Edipower Hydro plants and energy management activities in A2A GENCO GAS All Group CCGTs integrated in one company, A2A Genco Gas Brindisi, San Filippo and Monfalcone power plants into a new SPV 50% Scandale power plant (CCGT) Strategic Plan update R1 100% ownership of Edipower since 1/1/2016 Project approved by A2A Board Reorganization to be completed by October 2016 Expected benefits are company simplification and contracts reduction, easier best practices sharing, Platform for sector consolidation 20

21 EBITDA growth up to 85M + 65M M Strategic Plan update R net contribution from Italian energy system THERMAL EBITDA 2014 THERMAL ADJ EBITDA * COST SAVINGS MARKET MARGIN EVOLUTION SFM CAPACITY MARKET THERMAL EBITDA 2020 * Excluding 35M of July extraordinary positive margins 21

22 AGENDA Strategic Plan update Restructure Relaunch Reshape Discipline, Dialogue, Digital 22

23 Relaunch in core businesses ENVIRONMENT SECTOR Plan statements +20% waste collection +1 Mt waste treatment Strategic approach In line with plan Growth strategy revised Selective M&A already ongoing New plan vs. previous plan Target confirmed REGULATED/ QUASI REGULATED BUSINESSES +18% DH volumes +13% POD managed in gas distribution DH and Gas targets confirmed Further developments in smart distribution systems and water Target confirmed Strategic Plan update R2 ENERGY RETAIL MARKET EPCG 3x customer base in free market +4.0 TWh & +900 Mm3 sold +14% electricity generation -18% FTE Customer base growth better than expected, increased targets Positive impact from regulation Tariff growing less than expected Negotiations ongoing with Government of Montenegro for a new shareholder agreement Increased EBITDA target Reduced EBITDA target 23

24 Environment to lead growth and returns INDUSTRIAL TARGETS at 2019 COLLECTION BP M inhabitants BP M 285 TREATMENT 3.6 M tons -7% Strategic Plan update R2 ATTENTION POINT AND POSITIVE FACTORS Negative energy price scenario impact Confirmed focus on sorted waste treatment Growth strategy revised in light of LGH deal Other growth drivers: - Increase WTE efficiency - Potential brownfield developments - Selective M&A - En&A efficiency projects plan EBITDA A 2019 EBITDA BP vs. BP ~ 0% M 24

25 Networks growth to stabilize Group margins INDUSTRIAL TARGETS at 2019 BP GAS POD ( 000) 1,371 EE POD ( 000) 1,118 BP M 359 DH SALES WATER DISTRIBUTED 2,9 TWH 43 MMC Strategic Plan update R2 ATTENTION POINT AND POSITIVE FACTORS Negative gas scenario impact on DH Electricity and gas WACC revised downward Upsides integrated water cycle (more capex higher tariffs) Higher operating efficiencies due to Unareti More investments in electricity networks plan EBITDA A 2019 EBITDA BP vs. BP ~ 0% M NOTE: Includes water, electricity, gas networks and district heating; excluding public lighting and smart grid additional contribution to EBITDA 25

26 Retail step-up INDUSTRIAL TARGETS at 2019* BP BP M 163 EE POD ( 000) 510 GAS POD ( 000) ATTENTION POINT AND POSITIVE FACTORS Strategic Plan update R2 3x free market customers target by 2019 confirmed Positive impact from remuneration of commercial costs (PCV/RCV) 1st in Italy for customer satisfaction New digital initiatives under development plan EBITDA A 2019 EBITDA BP vs. BP % M * free market 26

27 EPCG lower but challenging growth INDUSTRIAL TARGETS at 2019 BP BP M 109 HYDRO PRODUCTION 1.8 TWh -5% THERMAL PRODUCTION 1.4 TWh -8% FTE 2,150 FTE -90 Strategic Plan update R2 ATTENTION POINT AND POSITIVE FACTORS Tariff increase lower than expected Increase of operative efficiency Ongoing negotiations with Government of Montenegro for a new agreement in order to define a new shareholder agreement plan EBITDA A 2019 EBITDA BP vs. BP % M 27

28 222M additional EBITDA (2020 vs. ) M Strategic Plan update R2 ENVIRONMENT NETWORKS ENERGY RETAIL EPCG EBITDA

29 AGENDA Strategic Plan update Restructure Relaunch Reshape Discipline, Dialogue, Digital 29

30 Build options for the future Plan statements Strategic approach New plan vs. previous plan ENERGY EFFICIENCY LED renewing street lighting Energy efficiency initiatives LED development ongoing Energy efficiency initiatives (retail, industrial, ) ongoing Target confirmed SMART CITY New technological tests for the design of a new business model A2A Smart City launched Pilot projects and industrial partnership in place Higher EBITDA Strategic Plan update R3 "ENERGY COMMUNITY" SERVICES From the current test phase to extended energy community solutions Several experimental projects in progress Target confirmed 30

31 LED relamping and energy efficiency ,000 LED 250,000 LED Target BP confirmed 280,000 LED Strategic Plan update R3 31

32 A2A Smart City launched Strategic Plan update R3 a2a.smartcitylab.io Focus on IoT projects for cities 32

33 42M additional EBITDA (2020 vs. ) M Strategic Plan update R3 ENERGY EFFICIENCY PUBLIC LIGHTING SMART CITY & SMART GRID RES EBITDA

34 AGENDA Strategic Plan update Restructure Relaunch Reshape Discipline, Dialogue, Digital 34

35 Discipline, Dialogue & Digital DISCIPLINE Plan statements 130M cost-cutting from identified projects + "EN&A project for process optimization Growing dividend policy with a sustainable capital structure Strategic approach Cost-cutting process confirmed, EN&A in plan DPS increased in Debt ratio improved New plan vs. previous plan Additional 40M of cost cutting 2020 DPS confirmed Strategic Plan update DIALOGUE Multi-stakeholder table; people strategy; strong commitment to environmental protection and natural resources Multi-stakeholder forum launched; people strategy projects on track; Sustainability Report integrated in Annual Report; Sustainability Policy approved 360 dialogue with our stakeholders confirmed DIGITAL & TECH Digital Initiative to support cross-selling and online/mobile services New apps launched; digital sales channel activated by retail company; Cross-selling initiatives in start-up Digital and new tech developm ent ongoing 35

36 Discipline En&A project description Strategic Plan update En&A a bottom-up and extensive project with efficiencies in the mediumlong term on fixed and variable costs, CAPEX, and revenue increase INVOLVEMENT More than 400 resources involved coordinated by over 100 project managers SCORECARDS 170 project scorecards with detailed schedules, responsibilities and targets MASTERPLANS Detailed projects masterplans for the 4 enabling organizational units (Procurement, ICT, HR and Org.) MONITORING Monitoring tool with a pattern aligned to processes instead of organizational hierarchy In the coming years, En&A will produce new efficiencies with a threefold approach 3 MONITORING AND SCOUTING FOR NEW OPPORTUNITIES 1 ASSESSMENT 2 IMPLEMENT 36

37 50M additional EBITDA ( 40M from Fixed cost reduction) OPEX + TOTAL LABOUR COSTS (OLD VS. NEW BUSINESS PLAN 2019) 1, ,134 1, M Strategic Plan update BP (INCLUDING CAPITALIZATION) CAPITALIZED HR COSTS CHANGE IN PERIMETER BP (EXCLUDING CAPITALIZATION) NEW En&A SAVING BP COST P&L En&A full potential including CAPEX, revenues and variable costs: ~ 50M in

38 Sustainability A2A developed a path to define the 2030 commitments and short-medium term actions for 2020, identifying quantitative and measurable KPIs SUSTAINABLE DEVELOPMENT GOALS vs VALUE CHAIN 2030 GOALS GOALS and TARGETS THE SUSTAINABILITY POLICY AND THE COMMITMENTS Strategic Plan update 1st CLUSTER Piano di Sostenibilità 2014 DECARBONIZATION 2nd CLUSTER CIRCULAR ECONOMY ACTION and ENABLING DRIVERS Piano Industriale rd CLUSTER SMART TECHNOLOGY INNOVATIONS IN NETWORKS AND SERVICES 4th CLUSTER PEOPLE INNOVATION 30 ACTIONS by 2020 t CO2 from electric generation (baseline ) 67% recycling 100% Smart meter gas 25% reduction of injury rate 38

39 AGENDA Strategic Plan update 39

40 -2016 EBITDA evolution - 12 M 1,048 1, , , Strategic Plan update ORDINARY NON-RECURRING ITEMS GENER. & TRAD. ENERGY RETAIL WASTE DISTRICT HEATING NETWORKS EPCG 2016 ORDINARY 2016 NON-RECURRING ITEMS

41 -2020 EBITDA evolution by BU M 53 1, , ,304 27% 12% % % Strategic Plan update - 18 GENER. & TRADING OTHER ENERGY RETAIL WASTE WASTE DISTRICT HEATING NETWORKS EPCG OTHER REGULATED / FREE MKT MIX REGULATED EPCG NETWORKS ENERGY RETAIL BY BU BY MIX QUASI REGULATED MERCHANT LOW VOLATILITY DISTRICT HEATING MERCHANT 41

42 Net Income evolution M Strategic Plan update ORDINARY GROUP NET INCOME EBITDA D&A RISK PROVISIONS NET FINANCIAL EXPENSES TAXES MINORITIES 2020 GROUP NET INCOME 42

43 Capex Plan 2, EPCG CORPORATE NETWORKS 2, ,145 M&A DEVELOPMENT 2, MERCHANT M MERCHANT LOW VOLATILITY QUASI REGULATED 254 DISTRICT HEATING Strategic Plan update TOTAL CAPEX WASTE RETAIL GEN. & TRADING TOTAL CAPEX MAINTENANCE MANDATORY ~ 1.3B for development projects and M&A ~ 80% in regulated/quasi regulated businesses TOTAL CAPEX REGULATED + 200M development Capex vs. previous plan 43

44 Cash Flow generation - 0.5B B FFO ~ 3.8B Strategic Plan update x 1.8 x NFP EBITDA CHANGE IN NWC USE OF FUNDS TAX NET FINANCIAL EXPENSES CAPEX DIVIDENDS 2020 NFP NFP / EBITDA ~ 9 % * ~ 12 % RETURN ON INVESTMENTS * Excluding impairment effects 44

45 CONFIRMED CONFIRMED Dividend policy and capital structure A2A DIVIDEND PER SHARE ( c) OLD BP NEW BP ~ ~ 7.5 ~ 7.5 Strategic Plan update FFO / DEBT 1 OLD BP NEW BP 18.1% 18 /18.5% ~20% > 25% ~21.5% ~21.5% > 25% > 25% 1) FFO = Ebitda provisions for bad debt - net interest expense - current tax expense + dividends received Debt = gross financial debt net of surplus cash + employee benefits + liabilities for landfills 45

46 2016 update Project Pot update vs. previous business plan Additional projects underway as of April Efficiency from process redesign and optimization Status in April EN&A project launched Included in plan financials Projects canceled Updated projects (still considered as upsides) Gas networks: further growth through gas tenders ATEM scouting and tender preparation Integrated water cycle development through partnership ATO Brescia rationalization Local aggregations First scouting of opportunities in Lombardy Strategic Plan update Heat transportation backbone Cassano-Milano WTE: new plants in southern Italy & rationalization in Lombardy System integrator for smart city services Agreement with Lombardy and Milan municipality under discussion Presence in Acerra, competitive dialogue ongoing in Giugliano Pilot projects underway (S.C.U.O.L.A. Project and Brescia Smart Living) Potential development abroad Business opportunity scouting underway 46

47 New additional projects SMART GRID Smart Grid five-year roadmap planned, with positive returns on investments: distribution management system; electrical substation wiring; 2G smart meter roll-out EU 2020 Digital Agenda will determine 8B of investments in Italy ( 1B in Lombardy), potential synergies for local utilities (with power grid management); submitted an integrated business model proposal to the Authority NEW GENERATION BROADBAND Strategic Plan update NEW RETAIL OPPORTU- NITIES With 2G smart meters roll-out, new value added services will be available for customers (home devices, home energy management systems, ) A real estate rationalization under analysis, to simplify Group presence in Milan, the initiative is expected to be cash and P&L (one-off) positive REAL ESTATE 47

48 Updated Project Pot PROJECT LIST FEASIBILITY EBITDA IMPACT GAS NETWORKS: FURTHER GROWTH THROUGH GAS TENDERS LOCAL AGGREGATIONS 10-20M M FEASIBILITY low high HEAT TRANSPORTATION BACKBONE CASSANO-MILANO 50-60M WTE: NEW PLANTS IN SOUTHERN ITALY & RATIONALIZATION IN LOMBARDY 30-60M Strategic Plan update POTENTIAL DEVELOPMENT ABROAD SMART GRID AND RENEWAL OF THE EXISTING NETWORKS NEW GENERATION BROADBAND NEW RETAIL OPPORTUNITIES 10-20M (no capex) 7-15M Tbd Tbd New additional projects REAL ESTATE RATIONALIZATION 20-40M (one-off) M not included in Strategic Plan 48

49 Contribution of M&A and local aggregations to EBITDA 232 ~ 10% of incremental EBITDA from inorganic growth M UP TO 150M Not included in business plan financials PLANNED INDUSTRIAL GROWTH INORGANIC GROWTH TOTAL EBITDA GROWTH LGH INDUSTRIAL PARTNERSHIP OTHER POTENTIAL DEALS TOTAL Strategic Plan update M&A deals currently under negotiation (high probability only) Closing expected by mid (Antitrust clearance needed) LGH industrial plan under development (stand-alone growth + synergies) LGH expected: EBITDA 75M; NFP 390M Opportunity to broaden the Territorial Multi-utility model Other pure M&A opportunities (additional value creation as key decision factor) 49

50 Closing remarks INVESTMENTS FOR GROWTH ~ 2.2B cumulated Capex EBITDA by B (CAGR 4.5%) - 0.5B debt reduction in 5 years Thermal capacity reduction (- 40%) Strong growth in core skills markets Regulated / Quasi-regulated EBITDA by 2020 ~60% INVESTMETS BUSINESS-MIX FOR REBALANCE GROWTH Strategic Plan update DIVIDEND POLICY AND CAPITAL STRUCTURE DPS + 13%; stable dividend expected in 2016 DPS bound to grow Solid investment grade capital structure to be maintained 50

51 Contacts A2A Investor Relations Team Monthly update service for investors and analysts on the significant steps of A2A Business Plan such as relevant investments, new projects, achievements, contracts, agreements. If you wish to subscribe to the service, please visit A2A website at the following link Mail: Phone: This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Some information contained herein and other material discussed at the meetings may include forward-looking information based on A2A s current beliefs and expectations. These statements are based on current plans, estimates, projections, and projects and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to changes in global economic business, changes in the price of certain commodities including electricity, gas and coal, the competitive market and regulatory factors. Moreover, forward-looking statements are current only at the date on which they are made. 51

52 Annexes Results Strategic Plan This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 52

53 Volumes Volumes FY 2014 FY Δ vs 2014 A2A Group Thermal production GWh of which CCGT production GWh Coal production GWh Oil production GWh EPCG production GWh A2A Group Hydro production GWh of which A2A and Edipower production GWh EPCG production GWh Wholesale electricity sales and Foreign Markets GWh Ipex sales GWh Electricity sales GWh Electricity sales to EPCG customers GWh Gas sales Mmc Heat volumes sales GWht Cogeneration electricity sales GWh Collected waste Kton Waste disposal Kton WTE electricity production GWh WTE heat production GWht Electricity distributed GWh Gas distributed Mmc Water distributed Mmc This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 53

54 Energy Scenario Average data 2014 Δ vs 2014 Δ % vs 2014 Brent $/bbl 99,5 53,7-45,8-46,1% CO2 - EU ETS cost /Tonn 6,0 7,7 1,7 28,2% Green Certificates /MWh 94,0 98,3 4,3 4,6% /$ /$ 1,33 1,11-0,2-16,5% Brent /bbl 74,6 48,4-26,2-35,1% PSV (1) /MWh 23,1 22,0-1,1-4,8% AEEGSI Gas Tariff (2) c /mc 25,6 22,9-2,8-10,7% Coal (API2) /Tonn 56,7 50,9-5,8-10,2% PUN baseload (3) /MWh 52,1 52,3 0,2 0,5% PUN peak (3) /MWh 58,9 58,7-0,2-0,3% PUN off-peak (3) /MWh 48,3 48,7 0,5 1,0% CCGT gas cost (4) /MWh 51,4 49,8-1,6-3,2% Clean Spark spread vs Peakload /MWh 2,8 6,0 3,2 n.a. Clean Spark spread vs Baseload /MWh -4,0-0,4 3,6 89,8% Clean Dark Spread vs Baseload (5) /MWh 13,1 15,8 2,7 21,0% Italian electricity demand (6) TWh 310,5 315,2 4,7 1,5% Gas demand Bcm 61,4 66,9 5,6 9,0% (1) Gas at virtual trading point (2) Pfor 196/13 Jan 2014-Sep 2014; Pfor 162/14 Oct 2014-Jun. (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 This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 54

55 Focus on Generation & Trading EBITDA GENERATION & TRADING M Electricity Margin +10 M Generation +19 M Non Recurring Items 2014 Redundancy Schemes 2014 Ordinary Environm. Plants Markets Hedging and Dispatching Trading Portfolio Other Fixed Costs SFM Ebitda Gas Margin Ordinary Non Recurring Items Redundancy Schemes This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 55

56 Focus on Energy Retail EBITDA ENERGY RETAIL M Non Recurring Items Ordinary Electricity Market Gas Market Fixed Costs Other Ordinary Non Recurring Items This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 56

57 Focus on Waste EBITDA WASTE M Non Recurring Items Ordinary Collection Urban Waste Treatment Plants Other Treatment Plants International projects Ordinary Non Recurring Items Collection Urban Waste Treatment Plants Other Treatment Plants International Projects This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 57

58 Focus on District Heating EBITDA DISTRICT HEATING M Volume Effect +16 M Non Recurring Items Mobility 2014 Ordinary Margin Effect Climate Effect Commercial development Environm. markets Heat services Fixed Costs Ordinary Non Recurring Items Heat Services District Heating This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 58

59 Focus on Networks EBITDA NETWORKS -2 M Non Recurring Items 2014 Ordinary Water Cycle Electricity Networks Gas Networks Public Lighting Ordinary Non Recurring Items Electricity Networks Gas Networks Water Cycle Public Lighting This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 59

60 Focus on EPCG EBITDA EPCG M Energy Distribution Revenues Energy Distribution Other This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 60

61 Annexes Results Strategic Plan This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 61

62 Scenario and main assumptions UM /$ /$ Inflation (Italy) % 0.3% 0.1% 1.0% 1.1% 1.1% 1.1% 1.1% ICE Brent /bbl Coal API 2 $/tonn CO2 (EUA ETS) /tonn AEEGSI Gas Tariff (Pfor) c/mc PSV /MWh TTF /MWh PUN Base Load /MWh PUN Peak Load /MWh CCGT Gas Cost (PSV) /MWh Peak Spark Spread /MWh Spark Spread (PSV) /MWh Clean Spark Spread (PSV) /MWh Dark Spread /MWh Green Certificates/Feed-in Tariff /MWh White Certificates /Toe NO TERRITORIAL AGGREGATION INCLUDED This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 62

63 Generation and Trading EBITDA evolution GENERATION & TRADING M Non recurring Items Ordinary Environmental Markets Plants Hedging and Dispatching Trading Portfolio SFM Ebitda Other Fixed Costs Gas Portfolio 2020 This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 63

64 Energy Retail EBITDA evolution ENERGY RETAIL M A Non Recurring Items A A Recurring Electricity Market Gas Market Fixed Costs Development Projects 2020 This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 64

65 Waste EBITDA evolution +75 WASTE M Non Recurring Items Ordinary Collection Urban Waste Treatment Plants Other Treatment Plants International projects M&A and development projects 2020 Collection Urban Waste Treatment Plants Other Treatment Plants International projects M&A and development projects This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 65

66 District Heating EBITDA evolution DISTRICT HEATING M Non Recurring Items Ordinary Scenario Commercial development Climate effect M&A and development projects Environm. markets Other 2020 District Heating Heat Services This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 66

67 Networks EBITDA evolution NETWORKS M Public lighting and oth. serv. EE Networks Gas Networks IWC Non Recurr. Items 24 Ordinary Regulated revenues Cost efficiency Gas and Public Lighting development 52 Other 2020 Electricity Networks Gas Networks Water Cycle Public Lighting and other services This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 67

68 EPCG EBITDA evolution EPCG M Energy Distribution Other 2020 Energy Distribution Other This information was prepared by A2A and it is not to be used by any 3rd party without A2A s prior written consent. 68