A2A ENVIRONMENT BU. Fulvio Roncari - General Manager, A2A Environment BU. October 2016

Transcription

1 A2A ENVIRONMENT BU Fulvio Roncari - General Manager, A2A Environment BU October 2016

2 A2A AT A GLANCE The leading Italian Multy-Utility FINANCIAL HIGHLIGHTS A2A A2AFOOTPRINT Footprint 4.9 BRevenues ITALY MONTENEGRO EBITDA 1+ B 2.2 B Capex CURRENT SHAREHOLDING STRUCTURE 100%: # of shares 3,132,905,277 Free Float 46.2% Municipality of Milan 25.0% Municipality of Brescia 25.0% Norges Bank 3.0% A2A Spa (treasury shares) 0.8% Total 46.2% 53.8% 100.0% Focus in Northern Italy with presence in Montenegro Technological Partnerships in waste sector in UK, Spain, Greece ENVIRONMENT 210 M 20% DIVERSIFIED BUSINESS PORTFOLIO NETWORK & HEATING 356 M 34% GENERATION & TRADING EBITDA 340 M 33% ENERGY RETAIL 90 M 9% EPCG (Montenegro) 53 M 5% Sources: A2A Strategic Plan 2015 Results & Business Plan Update; Company Annual Reports; CONSOB (shareholding structure updated at 30 September 2016) 2

3 ENVIRONMENT BU & A2A AMBIENTE GROUP Main controlled companies: Rieco (100%) Resmal (100%) Galli Ecologistica (100%) Resmal Ecologistica (100%) Ecolombardia 4 (69%) SED (80%) ASRAB(70%) Bioase (70%) Bellisolina (100%) 100% Treatment, recovery, disposal, engineering, sales and industrial waste management 51% Municipal Solid Waste (MSW) collection and street cleaning 100% 100% 90% 64% Environment division 3

4 ENVIRONMENT BU KEY NUMBERS Over 3 million people served with MSW management and street cleaning 1.6 billion kwh electric energy recovered from waste Over 4,600 employees 1.1 billion kwh heat energy recovered from waste 4.9 million ton overall managed waste (collection + treatment + disposal) Financial Highlights* 2015 Revenues Revenues 810 EBITDA 210 EBITDA EBIT 147 Treatment and other 44% Collection 56% CAPEX 59 Net capital invested 281 Net capital invested Treatment and other 67% Collection 33% Treatment and other 86% Collection 14% *Pro forma data 4

5 A2A ENVIRONMENT BUSINESS MODEL ACTIVITY PROCESS A2A AMBIENTE BUSINESS MODEL FINAL ENERGY COLLECTION RECYCLING & TREATMENT WtE LANDFILL RECOVERY Waste collection and street cleaning Sorted Unsorted Selectionrecycling plants MBT plants and SRF production plants Waste to Energy plants Residual and ashes treatment Landfill Power production from biogas plants URBAN WASTE INDUSTRIAL WASTE OUTPUT OF PROCESS Compost, glass, paper/cardboard, plastic, inert materials Biodryed materials Heat and power Residual waste, intert materials and metals Biogas Power BU Environment operates along the whole waste management value chain, including engeneering activities and R&D 5

6 BENCHMARK IN ITALY Main Italian Multy-Utilities comparison A2A Ambiente (including LGH) Hera Ambiente Iren Ambiente 250 LGH EBITDA 2015 Ama 200 Acea 150 M A2A Ambiente Hera Ambiente Ama Iren Ambiente Acea *third party plants excluded Source: Sustainability report 2015 k ton 6,000 5,000 4,000 3,000 2,000 1,000 0 LGH A2A Ambiente Treated waste Hera Ambiente* Ama Iren Ambiente Acea k inhabitants 5,000 4,000 3,000 2,000 1,000 0 LGH A2A Ambiente Served inhabitants Hera Ambiente Ama Iren Ambiente Only treatment Acea 6

7 WASTE MARKET CONTEXT Italian Waste production 2014 Italian MSW market size 2014 From MSW treatment 7% MSW 18% Total Waste production: 160 Mt/y MSW production: 29.6 Mt/y (488 kg/p year ) Separate collection: 13.4 Mt (45.2%): Differences across the regions : 56.7% Other non hazardous 38% Hazardous 6% North, 40.8% Center, 31.3% South Commercial and Industrial Waste production: 80.9 Mt/y (excluding C&D 31% Construction and Demolition) Hazardous waste: 8.8 Mt Waste sector will be analysed following its main segments: MSW Collection Material Recovery MSW Treatment Energy Recovery Industrial Waste Management 7

8 WASTE MARKET KEY ELEMENTS General Overview Multitude of operators, which includes big multi utilities and small companies Business fragmentation: few operators oversee the entire value chain Relevant % of inefficient operators in term of reliability and/or investment capabilities Strong dependence on landfills Lack of suitable facilities, in terms of number and average size of facilities, irregular distribution (less investments in territories with more lack in plants presence) Regulatory uncertainty not allowing the definition of medium to long term plans Revenues (B ) Inhabitants served (M) Waste managed (Mt) Top 75 operators MSW sector % of Italian sector % of the Italian population 61% of the total MSW Italy Source: WAS Althesys La trasformazione dell industria Italiana del Waste Management 1/3 of top 75 operators are Big Multiutilities MSW treatment trend in Italy Source: Ispra Rapporto rifiuti speciali 2016 and Rapporto rifiuti urbani 2015 Treatment for recovery 49% WtE 20% Landfill 31% Trend of waste management: slow reduction of landfill, however Italy is still strongly depending on landfills (31% of waste landfilled), Differences across regions 19% North, 32% Center, 49% South Increase of recovery Slow increase in WtE 8

9 WASTE MARKET SEGMENT: COLLECTION MARKET KEY ELEMENTS Operators Structure: Green Book Utilitalia 2016 Number of operators 2013: 463 Variety of operators in term of size, business field and results 64% of in-house providing services: new tenders for services or private partners selection expected Multi years exclusive contracts with public authorities (5-10 years) 60.0% 50.0% 40.0% 30.0% Top RV>100M Big 50<RV<99 M Medium/Big 25<RV<49M Medium 10<RV<24M Small RV<10M 20.0% Focus In house: up to 60% in Friuli, Veneto, Emilia Romagna, relevant in Piemont, Lombardy and Tuscany Source: AGCM Indagine conoscitiva IC % 0.0% Top Big Medium/Big Medium Small Number of operators 4.1% 4.3% 9.7% 30.5% 51.4% Revenues 40.0% 13.1% 15.4% 22.0% 9.4% 9

10 WASTE MARKET SEGMENT: COLLECTION 2016 Collected waste kt Inhabitants served kp Amsa 803 1,600 Aprica Aspem LGH* Total 1,539 3,260 *From 2016 A2A POSITIONING 18% of Lombardy municipalities served by A2A 33% of Lombardy inhabitants served by A2A Full integration along the waste value chain 2015 A2A Revenues: 456 M Ebitda: 69 M Ebitda margin: 15% Integrated global service to communities and business Tailor-made solutions for community needs and capacity to provide cost-effective solutions 80% 60% 40% 20% A2A SEPARATE COLLECTION RATE 0% Italy 45.2% Bergamo Varese Como Cremona Milano Brescia 10

11 WASTE MARKET SEGMENT: COLLECTION DELIVERING OUR 2020 Reinforce leading position in Italy levering on geographic proximity: People served (kp) Improving services efficiency and sustainability by applying new technologies Benefit form vertical integration supporting A2A s collection services levering on owned recovery and treatment facilities and securing contracts for the supply of waste to the treatment plants 4,000 3,500 3,000 2,500 2,000 1,500 1, ,700 Kp BP Target 3,400 Kp 3,800 Kp 3,200 Kp +560 kp M&A operation People served by LGH Group More inhabitants served with collection and street cleaning: +100,000 inhabitants every year by tendering in target selected areas able to guarantee certainty of payment BP Target : covering more than 3,2 million +200 kp Awarded tenders and 11

12 WASTE MARKET SEGMENT: MSW TREATMENT MARKET KEY ELEMENTS Infrastructure gap between north and south in term of capacity and efficiency WtE plants (MSW and Refuse Derived Fuel) Italy 2014: 44 plants (66% located in north IT) Source: Ispra report 2015 Strong NIMBY attitude: difficulties to obtain new plant authorizations Infringements proceeding for failure to comply with EU regulations on waste management No Landfill tax (or too low value) make landfill an unfair competitor Middle term exclusive contracts (1-2 years) with public authorities or collection operators 12

13 WASTE MARKET SEGMENT: MSW TREATMENT Evolution of National waste managemet systems - EU Top 8 100% 80% EU top 8 = Germany, Switzerland, Belgium, Sweden, Netherland, Norway, Denmark, Austria SELEZIONE MATERIALI ALTA EFFICIENZA 60% 40% 20% 0% RECOVERY AND OTHER TREATMENTS WTE LANDFILL The goal of reducing landfill disposal at minimum has been obtained through synergic and simultaneous increase of both material recovery and energy recovery. 13

14 WASTE MARKET SEGMENT: MSW TREATMENT Evolution of National waste managemet systems -Italy 100% 80% 45 % 60% 40% 20% 0% 20 % 35 % * RECOVERY AND OTHER TREATMENTS WTE LANDFILL Comparable to Germany in 1999 * Source: Ispra report

15 WASTE MARKET SEGMENT: MSW TREATMENT Waste treatment balance TREATMENT BENCHMARKING EU 100% 90% 80% 70% 60% 50% 40% Best EU cases show that countries with the highest rates of energy recovery also tend to have high rates of recycling 30% 20% 10% 0% Zero landfill Recycling WtE Landfill Source: 100% landfill 15

16 WASTE MARKET SEGMENT: MSW TREATMENT TREATMENT Italian Government estimation (Unlocked Italy Decree) foresee a GAP of WtE of 1.8 Mt. However an estimation from Milan Politecnico* foresee a gap of more than 6 Mt. Italian Government defines a 3 Mt GAP for Anaerobic Digestion and Composting SECTOR CAPACITY GAP CAPEX WtE (according to Politecnico of Milan study)* Composting and Anaerobic Digestion (according to DPCM march ) 6 Mt * 6 B Mt B Material recovery (A2A estimation) 1.3 Mt 1 B Differences from Italian Government estimation mainly due to: PoliMI ESTIMATION EFFECT Rejects from separate collection treatment 20% of separate collection +2Mt Separate collection rate 65% Overall Italy +1Mt Destination of rejects from MBT WtE in order to reach zerolandfill +1.2Mt *Source: Politecnico Milano Leap Valutazione Preliminare del fabbisogno nazionale di capacità di Termodistruzione 16

17 WASTE MARKET SEGMENT: MSW TREATMENT A2A POSITIONING 7WtE 10 MBT plants 11 Material Recovery Plants 2015 A2A Revenues: 320 M Ebitda 2015: 135 M Ebitda margin: 42% Well placed to help bridge the structural domestic infrastructure gap in waste treatment WtE capacity up to 2.4 Mt/y of which 1.75Mt/y in owned plants (3 largest Italian WTEs) Wide range of different technologies for recovery of 500 kt/y 10 patented MBT plants Financial reliability and capacity to invest in new assets Proven technical capabilities in R&D and EPC for selection of the state of art technologies 17

18 WASTE MARKET SEGMENT: MSW TREATMENT DELIVERING OUR 2020 MATERIAL RECOVERY Became a leader in recovery of material by building new assets and selective acquisitions Increased recovery capacity +750k/t (+210% recovery capacity Plastics, Paper, Food waste) Reinforce energy recovery leading position in Italy by building new assets Increased in WtE capacity +400 kt/y (+20% capacity) 1,200 1, M&A Rieco-RESMAL paper 200kt (completed) LGH paper/plastics 53kt (completed) , kt Five plants already designed for material treatment after separate collection including 2 plants for plastics selection with authorization already presented in Q (45kt each) +128 kt Plants efficiencies Castenedolo 100kt -Asti glass 20kt - Other 8kt ENERGY RECOVERY M&A LGH 2, , kt 2 projects ongoing Corteolona: VIA already obtained San Filippo del Mela kt Plants efficiency Flow Optimization Brescia and Milan WtEs 18

19 WASTE MARKET SEGMENT: INDUSTRIAL WASTE MARKET KEY ELEMENTS /t Extremely fragmented market across each stage (horizontally) Multitude of small operators that manage less than 50kt/y Limited availability of final plants cause dependence on foreign plants Short term non-exclusive contract (1y or less) with private clients *Source: A2A Ambiente Industrial waste Commercial Department Brokerage Storage Dedicated treatment Disposal Recovery Multitudes of operators Mainly Local Market Many operators Mainly National Market Few operators National and International Market 19

20 WASTE MARKET SEGMENT: INDUSTRIAL WASTE A2A POSITIONING 230 kt treated in Revenues: 33 M Ebitda 5.3 M Ebitda margin: 16% Biggest WTE for Industrial and Hazardous waste in Filago (BG) Market leader in final treatment for hazardous waste covering more than 37% of Italian capacity Financial resources and ability to develop and manage different plants and partners Client oriented approach offering waste management and consultancy services focused on guarantee environmental compliance 20

21 WASTE MARKET SEGMENT: INDUSTRIAL WASTE DELIVERING OUR 2020 Reinforce leading position in Italy levering on: Increase capacity in storage and pretreatment through M&A operations Partnership with EU big operators to enforcing market position Increase presence on Italian Market for Hazardous Wte from 37% up to 44% thank to technological optimization of existing asset Operational excellence: standardization of operating process and creation of a global organization for commercial development, target: developing new offers covering the whole waste production Business Plan target 400 kt kt from M&A LGH landfill 100kt (2016 completed) LGH liquid waste treatment plant 63kt (2016 completed) +174 kt Plants efficiencies : Wte Filago 25kt Inertization plant Giussago 45kt SED platform revamping 95 kt Other 9kt 21

22 MAIN R&D PROJECTS A2A draws on a network of expertise focused on ensuring sustainable waste management by implementing new technologies and process Current target: development of a market for obtained with recycled material products Reaching end-of waste target to allow putting on market recycled materials at any effect (legally and commercially) as products. End of Waste for RDF End of Waste for fly ashes A2A (together with Buzzi Unicem) obtains first registration database RDF-EoW REACH order product produced to obtain inert material for construction from WtE fly ashes and salt for by de-icing on streets treatment of MSW Finalized construction of a testing plant in Strategic collaboration with Buzzi-Unicem Ongoing preliminary testing group as end user Testing physical /chemical characteristics of products New projects for implementing production plants in direct connection with cement kilns (50kt/y expected in 2018) If positive result of testing phase production of industrial scale plants will be defined 22

23 KEY INVESTMENT HIGHLIGHTS Key player in the domestic market Critical mass from a perimeter enlargement Strong diversification along the value chain Some excellences/competitive edge: First operator in WtE Higher value/technology for waste collection, treatment and disposal Tangible growth opportunities Delivering quality and growth to increase shareholder value Supportive domestic scenario for infrastructure development and consolidation Strong commitment to Sustainability 23

24 CONTACTS AND IR PRODUCTS Publications A2A Investor Relations Team Mail: Phone: a2a 2016 Investor Guidebook Historical economic, financial and operational company data as of 2008 on annual and quarterly basis Economic, financial and operational data useful for building A2A earnings model 2015 FY reported and BP forecast Tables of the Investor Guidebook mainly relevant to a quantitative analysis Investor Databook (excel file) Newsletter Periodic 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 ew/newsletter/ Concise and thorough insight in the A2A Group in the form of a long presentation divided into three main parts: Our World, Our Results and Our Responsibilities. The selected contents are all publicly available information, which you may find spread across a large number of Company documents a2a 2016 Company Profile Brief and synthetic document that shows the highlights and the strengths of A2A business model The publications are available at the following link: Moreover A2A publishes the following documents in the Investor Library Section on A2A website: Overview of the Italian Energy Market (yearly basis) Notes on energy and environmental markets (quarterly basis) Both documents are prepared by the Market Analysis, Modeling and Pricing Unit of A2A 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. 24