Message from the Executive Chairman of the Board
Earnings acceleration strengthens visibility of 2018 DPS

Dear Shareholders,

At the end-June halfway point Hera presents sound results both in terms of quality and size of growth achieved.

In addition to a 3.5% EBITDA increase, the Company shows a 12.1% rise in net profit. A performance proving that Hera can translate healthy operating results in even higher increases at bottom line, through the contribution of declining financial expenses in the financial area and lower tax rate in the fiscal management field.

Half-year results show significant quality and growth

EBITDA growth was driven by all main activities, due to the proven capability in extracting new efficiencies in regulated business, and gaining market shares and solid margins in liberalised businesses. We have activated three levers: thorough management of synergies, use of innovative technology, and competitiveness.

Progress takes place organically

Growth achieved in first-half 2018 is mostly organic.

Significant progress achieved in EPS, which goes well beyond the average growth of 4.7% included in the Plan, leverages on a capital strength that allows for limiting financial charges.

At end-June 2018, ROE exceeds the ‘double-digit’ threshold, reaching the record level of 10.1%.

In the Half-Year Report we show a growth that is independent of any economic upturn: rather, it is consistent with a continuous path, resulting from well-balanced strategies in terms of business mix and investment policies. Those strategies allowed Hera to increase its earnings per share at a CAGR of 9.1% over the last five years.

To be well on track also has a perspective value

Having already reached a H1 EPS of 10.8 euro cents has also an important impact on the visibility of the 2018 DPS, whose target is set at 10 cents in the Business Plan, i.e. on the rise compared to 9.5 cents distributed for the 2017 fiscal year.

Solid foundation for shareholder remuneration

At this time, with financial markets dominated by volatility and uncertainty, concerning both interest rates and economic growth, we believe that Hera business model can provide a safe harbour to shareholders, as they can rely on rock-solid earnings generation and, therefore, on a really “healthy” and sustainable remuneration through dividends.

Tomaso Tommasi di Vignano
Tomaso Tommasi di Vignano
30 July 2018

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