INVESTOR NEWS - Gruppo Hera -

As growth accelerates, more value to shareholders

Message from the Executive Chairman of the Board

With the 2023-2027 Business Plan, Hera clearly defines the path to follow over the coming years. Even in the new, challenging scenario, Hera continues to leverage on a strategy that has been proven effective over time, with well-defined priorities in terms of value creation, sustainability and resiliency.

By deploying 4.4 billion euro in investments over the five-year Plan period, Hera will concentrate its resources on ensuring visible value creation while pursuing the goals of both sustainability and resilience to negative exogenous factors.

Based on preliminary results, the year 2023, the first of the Plan, shows a sharp acceleration in the EBITDA growth rate and a significant deleveraging.

Cristian Fabbri

Looking at the figures

The business strategy at the basis of 2027 expected ROI

Over the five-year period, Hera will concentrate more than half (about 55%) of the 4.4 billion euro investment plan in regulated businesses (Networks and Waste collection), with the aim of enhancing the existing infrastructure and seizing the opportunities of the regulatory framework, thus generating returns with high visibility and keeping the risk profile low.

Over the Plan’s period, Energy will have available investments of about one billion euro. This area will benefit from a normalisation phase following the crisis in 2022, even in terms of lower absorption of working capital. Therefore, in Energy, Hera aims to provide a qualified offer of value-added services…

Jens Klint Hansen

Hera on stock exchange

Higher shareholder returns from an acceleration plan

The rally that Hera’s shares have experienced since last October has only partly covered the wide appreciation room against the average target price of analysts in coverage – currently at 3.53 euro.
Preliminary results for the Year 2023, above market expectations, will provide further visibility on management’s actual ability not only to hit strategic targets, but to achieve them well in advance. The presentation of the new Plan, which gives stronger impulse to growth through a broad investment plan, will make the extent and quality of future cash generation even clearer, while risk profile remains under control.

Jens Klint Hansen

Stories

A more ambitious Business Plan? Numbers prove it

The new 2023-2027 Plan envisages a significant acceleration of growth compared to the previous Plan, whose horizon was 2026. The engine behind more dynamic development lies in higher investments planned over the five-year period. The EBITDA drivers take shape through the number of funds invested, but even through the quality of the selected projects, which offer more attractive returns, and the efficiencies Hera aims to gain in regulated businesses.

Cash conversion of EBITDA is very high: this allows more operating investments, M&A and dividend distribution to be financed, while keeping the leverage at the end of the Plan at an even more conservative level compared to that of the previous Plan.