Message from the Executive Chairman of the Board
In 2017, Hera achieved a healthy set of results and provided shareholders with a return exceeding 36%

Dear Shareholders,

Based on the figures in the 2017 Annual Report, we can make a few general considerations about Hera’s growth trajectory over these 15 years of its history. Our operating performance is effectively represented by EBITDA, which has quintupled with respect to 2002, climbing to 985 million euro.

2017 EBITDA is 5.1 times higher than its 2002 level and nears the 1 billion euro threshold

If, alongside operating performance, we assess the efforts undertaken in the finance and tax management areas, we find out that the growth achieved is even more significant, with 2017 net profit nearly 7.8 times that of 2002.

Hera is today not only larger than it was 15 years ago; it is also more efficient and productive

While we were capturing opportunities for organic growth and integrating some 25 acquired companies, during the past 15 years we have not only expanded in size; over time, we have also become more efficient and productive, as proven by the EBITDA per employee trend. This indicator has almost tripled, rising from 41,000 euro in 2002 to 113,000 euro in 2017.

Strong cash flow generation and financial flexibility: basis for additional growth

If we concentrate specifically on FY2017 performance, we can say that we have achieved record EBITDA levels, as we have managed to capture the opportunities offered by an improving macroeconomic scenario in terms of organic growth, which is proven by the trend of both prices and volumes.

With our financial flexibility and solid cash flow generation, we are now positioned to look with interest at new investment options, even beyond what is set out in the Business Plan.

3.3% dividend yield and 32.8% capital gain: in 2017, Hera provided significant returns to its shareholders

In view of these results, the Board of Directors will propose the distribution of a 9.5 euro cents dividend per share at the Annual Shareholders Meeting. The proposed dividend represents an increase of 5.5% over the dividend paid for FY2016, and it is in line with the dividend policy stated in January 2018. The dividend yield would therefore be 3.3%. Considering the Hera shares gained 32.8% during 2017, the total return to shareholders exceeds 36%.

Tomaso Tommasi di Vignano
Tomaso Tommasi di Vignano
27 March 2018

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