Message from the Executive Chairman of the Board
Healthy annual results once again confirm our long track record

In 2021, Hera achieved a 9% increase at EBITDA level, which exceeded expectations despite an external scenario still affected by COVID-19. A result that is also valuable from a qualitative point of view, given the wide range of organic factors that have fuelled the growth.

Thus, Hera has once again proven how crucial it is to have a multi-business portfolio to leverage, when one is an operator able to guess new trends in demand and promptly satisfy them. This is what happened, for instance, with the significant contribution that in 2021 energy efficiency and plastic recycling provided to Group’s 2021 EBITDA. The involvement in those businesses, moreover, confirms Hera’s active role in pursuing the environmental sustainability targets that Europe has set.   

The translation of EBITDA growth into net profit has paved the way for the distribution of a 2021 dividend per share of 12 euro cents, up 1 euro cent compared to that of 2020 and 2 euro cents compared to that of 2019. Even in the last challenging two-year period, Hera has therefore demonstrated its ability to remain firmly on its growth path, offering continuously increasing returns to shareholders.


Dear Shareholders,

the results achieved in 2021 confirm an effective execution of our growth strategy and, at the same time, they strengthen the visibility of the 2025 targets presented at the end of January in the new Business Plan.

A wide range of organic factors contributed to the 9% increase of EBITDA
Hera’s consolidated EBITDA, which in 2021 reached 1,224 million euro, shows a 101 million euro increase compared to the 2020 data. This performance – which is more than 4 million euro higher than the figure indicated when presenting the preliminary results last January – is also very impressive in terms of quality.

This result is mainly due to organic levers, with a significant contribution from activities for environmental sustainability, in line with both our Business Plan and the European policies.

The organic growth recorded in 2021 was the largest ever achieved in our 20-year history, considering that we completed most M&A deals in the middle of the year, with a contribution of 10 million euro. In assessing this growth, we can first acknowledge that we managed to leverage higher volumes on the wave of the country’s economic recovery.

We also benefit from the capital that we have efficiently allocated, having invested a total of 570.3 million euro in terms of net capital expenditure, up 7.9% from 2020, while profiting from the continued expansion of our energy customer base, which has now neared the threshold of 3.5 million.

The risk-protection policies applied in managing our business allowed for an effective protection of the 2021 results also from the significant fluctuation of commodity prices.  

The figures show that we were also able to seize the opportunities incentivised by the Italian law to promote energy efficiency through the Ecobonus 110% scheme, with interventions on condominiums in the cities that we serve, which contributed 42 million euro to consolidated EBITDA.

Lastly, we could count on a significant increase in Aliplast’s results, which contributed for 21 million euro to EBITDA, benefiting on one hand from the growing demand for regenerated material and on the other hand from high oil prices, which gave further boost to the use of recycled plastic making it more attractive compared to virgin plastic also from an economic perspective.

M&A activities continued, creating the conditions for a 21 million euro increase in consolidated EBITDA, as soon as the newly acquired companies will be fully integrated in the Group
Despite M&A, with a 10-million-euro contribution, was not the main driver of 2021 growth, we cannot forget that in the past year we seized some important opportunities for expansion through external lines, with four M&A deals signed, mainly in the industrial waste business. These companies, once fully integrated into the Group, will offer a cumulative contribution of approximately 21 million euro in terms of EBITDA. Moreover, the acquisitions made were fully consistent with our stated strategy, which sees us committed to increase our market share in the territories in which we operate.

Another significant growth factor: in 2021 we won all the tenders for the renewal of expired concessions, such as the gas distribution in Udine and the integrated water cycle in Rimini, as well as the concessions for urban waste collection in Ravenna-Cesena, Modena and Bologna. Therefore, we succeeded in extending the horizon of the concessions previously held in our portfolio by 12-18 years, depending on the case. This gives us the opportunity to invest with the aim of extracting new efficiencies while providing customers with an ever-improving service.

In 2021 Hera grows, increasing at the same time its profitability and financial solidity  
Significant EBITDA growth drove the 11% increase in EBIT, despite the prudent provisioning policy. Net profit also recorded double-digit growth, up 10.2%, reflecting not only EBIT progress but also efficient financial and tax management.

The sound operating results are also reflected in a strengthening of our solid profile, as indicated by the decrease in the Net Debt-to-EBITDA ratio from 2.87 times at the end of 2020 to 2.66 times at the end of 2021, against a debt of 3.26 billion euro, which remained broadly in line with that at the end of 2020. This solidity has allowed us to assist customers with instalment payments on their bills, confirming this growth as caring for all key stakeholders. Our value creation also improved over the last financial year, with ROI rising from 8.6% to 9.2% and ROE from 10.2% to 10.5%.

Over the last two years, leveraging on sound results achieved despite the pandemic, Hera could offer its shareholders a 20% growth in the dividend per share
Against Earnings per Share on the rise from 20.6 euro cents in 2020 to 22.8 euro cents in 2021, and in line with the policy indicated in the Business Plan presented last January, the Board of Directors has today resolved to propose the Shareholders’ Meeting of the 28 April 2022 to approve the distribution of a dividend per share of 12.0 euro cents.

This shareholder remuneration proposal not only indicates a 9% growth compared to the 11.0 euro cents of the 2020 dividend, but also represents a 20% improvement compared to the 2019 dividend, the last financial year that was not affected by the pandemic.

Hera therefore demonstrates once again, as it has done in the last 20 years since its inception, that it knows how to stay firmly on its growth path despite external challenges.

A clear growth strategy and a disciplined capital allocation to create the conditions for future shareholder remuneration
We face the next commitments of the present scenario as well as those envisaged in the Plan to 2025 being aware of this financial strength. We are also confident of being able to deliver attractive returns to our shareholders, while keeping room to consider future M&A opportunities that may appear on the horizon – opportunities that we are examining, as always, with the aim of accelerating growth and creating value.   

Tomaso Tommasi di Vignano
Tomaso Tommasi di Vignano
23 March 2022
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