On 30 April 2019, Hera held the first Shareholders Meeting after the inclusion of its shares in the FTSE MIB index, on 18 March 2019. The level of participation and the quality of the speeches reveal the ongoing changes inside the Company and the expectations of its shareholders.
We talk about that with Jens Hansen, head of Hera’s IR since its IPO.
Mr. Hansen, what characterised this AGM?
The Shareholders Meeting approving the financial statements is always the most important occasion of the year for a confrontation between the Company and its Shareholders. The percentage of share capital represented and the nature of the questions asked are two of the main indicators of the level and profile of participation. From this point of view, the 2019 AGM highlighted an increase in Hera’s share capital represented personally or by proxy. If 69.36% of the capital attended the 2018 Meeting, which was held on 26 April 2018, 72.45% was present in this last event. At the same time, also the number of shareholders attending the Meeting increased from 595 to 689.
What were the Meeting’s resolutions?
The Shareholders approved the Financial Statements for 2018, which showed significant growth in financials. In light of those results, the BoD proposed the distribution of a DPS of 10-euro cents, higher compared to the past and in line with the direction provided by the Business Plan, which envisages a DPS reaching 11-euro cents in 2022. Since the profit allotment proposal has also been approved, the 2018 dividend of 10-euro cents will be paid to shareholders starting from 24 June 2019.
Were there other resolutions?
The AGM also approved the 2018 Corporate Governance and Proprietary Assets Report and the remuneration policy included in the Remuneration Report, which introduced important innovations in the long-term variable component. Now the deferred component is linked to the achievement of targets in terms of economic value creation and stability in capital strength, as well as to the pursuit of UN sustainable goals, measured through Shared Value creation. The Company’s care for Shared Value issues was also clear during the Meeting with the usual presentation of the 2018 Sustainability Report.
Shareholders also renewed the authorisation to purchase treasury shares, for a maximum amount of € 200 million over 18 months. Hera will use the buyback shares for M&A operations or transactions involving financial instrument issuance. Basically, we will find new opportunities to create value also through treasury shares.
Any interesting question from shareholders who attended the Meeting?
For the first time we had the intervention of Etica SGR, asset management company that is part of Banca Etica Group. This institutional investor is one of the founding partners of “Shareholders for Change”, a European network; therefore, they play an active role in promoting sustainable development. After congratulating Hera over the results achieved in 2018, the inclusion of the share in the FTSE MIB index and the participation to the CE100 program of Ellen Mc Arthur Foundation, they focused their questions on issues related to climate change and human rights, in addition to the sustainability of the dividend distributed. Hera, of course, offered the maximum availability to deepen all the subjects that they were investigating. We strongly believe that questions and voting outcome from shareholders are elements that need to be analysed with attention and addressed to keep improving both our Governance and strategy.
The price of Hera shares shows a significant rise from the beginning of this year, higher than that of benchmark indices; the movement was characterised by increasing volumes, compared to the average daily trades recorded in 2018. In a generally positive context for equity investments, with Central Banks declaring their intentions to keep interest rates low, Hera stock price benefitted from two Company-specific factors, ie the inclusion of its shares in the FTSE MIB index, which took place on 18 March 2019, and the release of sound financials for 2018, on 27 March 2019.
Following the publication of full-year results, the eight brokers covering the stock updated their earnings model and valuations. The consensus target price went from 3.34 euro on the 27 March 2019 to 3.51 euro, a 5% increase. The picture of recommendations shows an overwhelming majority of buying ratings (Buy, Outperform). No analyst suggests to sell the stock.
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