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.
Given those premises, Hera will be pursuing a remuneration policy that allows shareholders to benefit from the stronger financial performance targeted.
The investments that Hera will deploy over the 2023-2027 five-year period have a greater size.
+10%
Growth in cumulative investments over the five years
compared to the previous Plan
4.4 bn€
Cumulative investments in the new Plan to 2027
4.0 bn€
Cumulative investments in the old Plan to 2026
The new Capex Plan for the 2023-2027 period is more focused on development investments.
Planned investments for M&A remain stable, around 0.3 billion euro.
+10%
Growth in development investments compared to the previous Plan
2.1 bn€
Total development investments in the new Plan to 2027, of which organic development
1.9 bn€
As a result of the ambitious 2023-2027 investment plan, EBITDA and, to an even greater extent, EBIT are expected to accelerate compared to the previous Plan.
+7%
Adjusted EBITDA CAGR in the new Plan to 2027
vs. +4.5% in the old Plan to 2026
+8.9%
Adjusted EBIT CAGR in the new Plan to 2027
vs. +5.7% in the old Plan to 2026
The optimisation of financial and fiscal management will lead EpS (Earnings per Share) to follow a more dynamic development compared to the previous Plan.
+7%
Earnings per Share (EpS) CAGR in the Plan to 2027
vs. ~3% in the Plan to 2026
As a result of the strict discipline in the selection of investment projects and benefitting from the increased efficiencies Hera is aiming to achieve, Cumulated Cash Flow projected in the 2023-2027 Plan almost fully funds capex, M&A and dividend distribution, while keeping the leverage at the end of the Plan well below the prudentially established threshold of 3x.
5.2 bn€
Cumulated Cash Flow over the 2023-2027 five-year period
vs. 4.5 bn € in the previous Plan
+0.3 bn€
Debt increase in the Plan to 2027
vs. +0.9 bn € Debt increase in the Plan to 2026
2.7x
Debt-to-EBITDA at 2027YE
vs. 2.8x at 2026YE, in the previous Plan
Based on an EpS CAGR of 7% over the 2023-2027 period, Hera can offer a higher remuneration to its shareholders compared to the previous Plan.
+5.1%
Dividend per Share (DpS) CAGR
over the 2023-2027 period
In the new Plan, given the dividend yield and the earnings growth, the annual Total Shareholder Return expressing the sum of the two components is expected to be double-digit.
>12%
Annual Total Shareholder Return in the 2023-2027 Plan
vs. >8% in the 2022-2026 Plan
The effort to be even more committed to sustainability is also measurable, with improving performance in this new Plan.
