Message from the Executive Chairman of the Board
On the back of healthy 2018 results, Hera provides attractive remuneration o shareholders


In 2018 Hera achieved important results.
The set of indicators presented in the Annual Report proves the achievement of increasingly higher levels of financial strength and profitability, even when compared to virtuous historical financials; a situation that indicates further capacity to grow.

New milestones: EBITDA exceeding 1 billion euro and record KPIs

For the first time, in 2018 consolidated EBITDA exceeded the 1 billion euro threshold, reaching 1,031.1 million euro, a 4.7% increase over 2017 mainly due to organic drivers.

Both ROI and ROE continued to improve over time; at the end of 2018, they respectively stood at 9.4% and 10.4%. Productivity, measured as EBITDA per employee, is also on the rise, up 6% vs. 2017. What do these indicators tell us? That in 2018 Hera grew, while also improving the quality of its profitability.

In addition, these results prove Hera’s capacity to achieve new efficiencies in regulated businesses and its competitiveness in liberalised areas. They also confirm that the Company leverages innovation and optimised capital allocation – a fact leading to robust cash generation and attractive returns on investments.

The inclusion into the FTSE MIB opens up new horizons

Healthy 2018 results confirm the same profitable growth that has also brought an appreciation in the financial markets. With effect from 18 March 2018, Borsa Italiana included Hera into the FTSE MIB, the index composed of the top 40 companied listed on the Italian stock exchange. The stock reached a level of free-float market cap and liquidity, in terms of traded volumes, that made it possible for Hera to become a full member of the Italian blue chips index.

This achievement provides us with new opportunities, as Hera is now eligible to be included into large portfolios of institutional asset managers at international level, and can therefore access a broader and more efficient market. We will have new opportunities to optimise our cost of equity by presenting our Company in a convincing way to the new audience we can reach as FTE MIB member. This qualified audience follows articulated and strict selection processes; we intend to dialogue with them providing transparent and well-structured information.

2018 dividend yield at 3.8%

The Board of Directors today proposes to the coming AGM to approve the distribution of a DPS of 10-euro cents, 5.3% higher than that of 2017. Based on the 2018 year-end stock price of 2.662 euro, dividend yield is 3.8%. The solid set of financials and the low Net Debt-to-EBITDA ratio, equal to 2.51, allow for an attractive shareholder remuneration. At the same time, they ensure the resources for future Company’s growth, both through organic investments and via new M&A opportunities.

Tomaso Tommasi di Vignano
Tomaso Tommasi di Vignano
27 March 2019
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