Message from the Executive Chairman of the Board
No deviation from the profitable growth path designed in the Business Plan


In the first half of 2020 Hera continues to growth organically, leveraging on a deep-rooted “culture of efficiency”, and promptly captures the synergies from recent acquisitions, which are proving to be absolutely strategic.

This way, in the first six months of the year we have already absorbed by a comfortable margin the amount of 30 million euro that represent the total Covid-19 impact on the P&L, as shown by the EBITDA growth of 2.5%.

In the next months, with the progressive easing of restrictions that were needed in Italy to contain the virus outbreak, we will be in a position to resume both investment and marketing activities. Hera will then be able to demonstrate the full potential for profitable growth embedded in a business portfolio that has always been managed in this forward-thinking perspective.

Dear Shareholders,

in the first half of 2020, Hera operated in a scenario affected by the health emergency and a particularly mild winter.

The results that we present – with EBITDA up 2.5% to 560 million euro and net profit stable at 166 million euro – reflect an effective business model as well as our effort to respond to new external conditions with the aim of ensuring business continuity, people safety and the highest possible operating efficiency.

Covid-19 and the mild winter had a heavy impact, which Hera could offset through consolidated growth levers
The increase of 14 million euro recorded at EBITDA level shows the net effect of opposite factors, which proved to be significant on both sides.

On the one hand, we had to cope with negatives for a total of 37 million euro, of which 7.5 million due to the mild weather conditions and almost 30 million euro resulting from the measures imposed to contain the spread of the virus – an impact, the latter, in line with our expectations.

On the other hand, we could count on 51 million euro coming from positive EBITDA drivers: organic growth components weighed 37%, the remaining 63%, i.e. the majority, being the effects of M&A operations. The integration of EstEnergy, starting from the 1 January 2020, played a significant role, offering an incremental contribution of 27 million euro, net of the deconsolidation of the distribution networks sold to Ascopiave, A performance that demonstrates how Hera’s integration model produces substantial benefits from the very first moment, as always seen in the numerous past transactions.

Strong cash flow generation continues uninterrupted…
A consolidated business model and growth strategy, together with a promptly reactive attitude, allowed Hera to continue to be a strong cash flow generator, while keeping a solid financial profile, as shown by the Debt/EBITDA ratio of 2.35x.

…creating the premises to stay on the planned growth track
Given the healthy fundamentals, on 8 July 2020 Hera also paid a 10-euro cent dividend to shareholders, sticking to the earnings distribution policy included in the Busines Plan to 2023, despite the sudden change in the scenario.

“After all, despite the high impact of new external challenges, we have in no way diverted our path towards achieving the 2023 targets set out in the Plan presented at the beginning of this year.

To Hera, resumption means opportunities to intensify investments and marketing
For a multi-utility company like Hera, which continued to provide its services throughout the entire lockdown period, the gradual recovery of the economy currently underway in Italy means being able to fully reactivate the levers of growth, through the resumption of investment and marketing activities that fuel organic development.

…and the opportunity to express the full potential of its portfolio

Hopefully, once the health emergency is over, in the coming months Hera can express the full potential for profitable growth of its business portfolio, as part of a clear and credible strategy that has already designed a sustainable path toward 2023.

Tomaso Tommasi di Vignano
Tomaso Tommasi di Vignano
29 July 2020
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