A2A-LGH Partnership. Milan, September 8 th, Borsa Italiana Italian Infrastructure Day

Transcription

1 A2A-LGH Partnership Milan, September 8 th, 2016 Borsa Italiana Italian Infrastructure Day

2 Partnership Rationale PARTNERSHIP CRITERIA PARTNERSHIP OPPORTUNITIES Territorial leadership Territorial investments Growth pole More quality & synergies Optimization of the presence in Lombardy Financial, industrial and operative synergies Stronger positioning in all businesses Investments optimization 1 st project of Multi-utility dei Territori model This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 2

3 Geographical presence and activities GEOGRAPHICAL PRESENCE LGH 2015 EBITDA BY BUSINESS Assets A2A LGH Generation (Traditional) Generation (Renewable) Cogeneration Waste-to-energy Other waste plants District Heating Hydro 23% 10% 1% 35% OTHER GENERATION (RES) & TRADING ENERGY RETAIL Hydro Hydro 4% 27% DISTRICT HEATING NETWORKS WASTE Biomass Biomass Photovoltaic A2A LGH Sizable presence in Lombardy LGH KEY NUMBERS 250 Municipalities served 1 Million inhabitants served Second largest Multiutility in Lombardy 265k PDR in Gas Distribution 45k Pod in Electricity Distribution Over 600k inhabitants served in collection 280k customers in Gas and Electricity Sale This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 3

4 LGH Main Financial Highlights Revenues EBITDA* EBIT Net Income Net Invested Capital NFP Equity * includes business to be divested for 1,9 This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 4

5 A2A LGH: A significant step in the new consolidation wave Revenues 5,478 4,921 4,818 Most Important transaction between a listed and a Local Utility in the last years 3,094 2,917 1,380 1, A2A + LGH A2A HERA IREN ACEA ALPERIA DOLOMITI ENERGIA AGSM ASCOPIAVE LGH AEB- GELSIA TEA ACSM- AGAM EBITDA 1,127 1, This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 5

6 Key numbers of LGH EBITDA ~ CAPEX (cumulated) 3 CAGR~9% OTHER GENERATION & TRADING ENERGY RETAIL DISTRICT HEATING NETWORKS WASTE NET INCOME ~ NET FINANCIAL POSITION 2% 3% 242 9% 11% 394 ~ % 21% OTHER GENERATION & TRADING ENERGY RETAIL DISTRICT HEATING NETWORKS WASTE NFP/EBITDA 5X 296 2,5X Note: 2015 EBITDA includes available for sale business for 1, This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 6

7 EBITDA evolution OTHER GENERATION & TRADING ENERGY RETAIL DISTRICT HEATING NETWORKS WASTE 2015 A Synergies Gas Tenders Augusta landfill DH saturation Hydro optimization EE/GAS retail optimization One-off 2015 and change in perimeter* Other 2020 E Additional Projects not included in financials for ~20 Note: 2015 EBITDA includes available for sale business for 1,9 *APR and Lodi Waste collection business branch This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 7

8 Expected synergies (Yearly data fully on stream) EBITDA 15% vs EBITDA Net Financial Expenses -~40% vs Financial expenses PROCUREMENT OPTIMIZATION OPERATIONAL EFFICIENCY Cost of Debt ~ 9 ~ 3 ~ 7 Additional Contribution of ~19 per year by 2020 Low execution risk Other potential upsides not included 7% Synergies in annual Capex This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 8

9 Synergies time-table 2017* PROCUREMENT OPTIMIZATION % 24% 49% 74% 100% OPERATIONAL EFFICIENCY % 43% 60% 73% 100% Shipping and Energy Management Optimization Data Center Optimization Call Center Internalization COST OF DEBT % - 45% 25% 100% 100% Renegotiation costs Bond repayment TOTAL SYNERGIES *2017 synergies include small components related to 2016 This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 9

10 Cash Flow Generation NFP 2015 EBITDA TAX CAPEX CHANGE IN NWC & FUNDS NET FINANCIAL EXPENSES DIVIDENDS NFP 2020 * assumption of 50% pay-out of Group Ordinary net income ~ 100 NFP reduction This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 10

11 Transaction financials Base Equity Value 100% % Most of the Earnin/out will be defined by march Earn-in TOT. UPFRONT Earn-out Base Earn-in Earn-out Equity Value Total Total Stock Cash MAXIMUM EQUITY VALUE This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 11

12 EPS Accretion ACCRETION/DILUTION ANALYSIS Adjusted /share ) Net of non-recurring incomes due to gas tenders 2) Calculated assuming fully paid earn in/out A2A average consensus 2020 EPS increase Pre Acquisition EPS Increase of ~ 5% in EPS per year by 2020 This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 12

13 Governance and future steps SHAREHOLDERS STRUCTURE SHAREHOLDERS AGREEMENT The Agreement between A2A and the other LGH shareholders : 4-year duration and expires in 2020 SCS 9% PRE-DEAL AEM Cremona 31% Astem 13% ASM Pavia 16% Cogeme 31% POST-DEAL Cogeme 15% AEM Cremona 15% A2A 51% ASM Pavia 8% Astem 7% SCS 4% Way Out Scenarios Three years after closing (2019), the parties, will determine the future of LGH giving priority to: - a merger between A2A and LGH or, alternatively Expiry - the renewal of the Shareholders agreement The agreements also foresees additional safeguards for the Partners This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 13

14 Key take-aways Lower business risk profile of the new combined entity Significative synergies with low execution risk Defined way-out scenarios and partnership evolution Landmark transaction for local aggregations in Italy Antitrust remedies to be offset by part of efficiency measures Delivery on A2A Strategic Plan execution goes on This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 14

15 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. This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A s prior written consent. 15