The 2020-2024 Business Plan, approved and presented in October 2020, focuses on the development of infrastructures and sustainable growth and envisages investments totalling 4.7 billion Euro.
The sum of 615 million Euro will be allocated to innovation and we intend to strengthen our position in all sectors of operation (water, electricity distribution, commercial and trading, environment, generation). We forecast a major upturn in EBITDA, underpinned by the RAB growth in regulated sectors and higher dividends.
The results achieved in recent years have reflected Acea’s ability to systematically exceed the targets set in the business plans drawn up from 2018 to date. The positive trend in economic-financial results and the major improvement in the quality of services offered to customers have allowed us to present a new plan with even more challenging goals for the period up to 2024.
Total investments: 4.7 billion Euro is forecast by end 2024 (compared to 4 billion Euro indicated in the previous plan), including 4.3 billion Euro relating to industrial capex, of which more than 80% will be allocated to regulated activities. Of the overall plan investments, 615 million Euro will go towards technological innovation projects. The sum of 2.1 billion Euro is related to sustainability objectives.
EBITDA: implementation of these investments will support the upturn in EBITDA, which is expected to reach 1.4 billion Euro in 2024, with an average annual growth of approximately 7%.
The increase in EBITDA is mainly derived from:
RAB: the RAB (Regulatory Asset Base) is expected to show a growth of 34% to 5.9 billion Euro by the end of the plan.
Dividends: 860 million Euro will be available for distribution during the plan’s time frame, with a minimum dividend of 0.80 Euro per share and an increase expected during the plan period.
Debt: the net financial position (NFP) to EBITDA ratio is expected to reach 3x at the end of the plan.
We are the leading Italian operator in the water sector with over 9 million residents served across 5 regions and this area accounted for 48% of our 2019 consolidated EBITDA. As regards the water business, we expect to reach EBITDA of 704 million Euro in 2024, with an average annual growth of 7% during the period 2019-2024. We will invest 2.2 billion Euro during the plan time frame (300 million Euro more than was envisaged by the previous business plan) to support sector development and reduce the infrastructural and plant gap in the territories where we operate, focusing on the resilience of infrastructures and expansion of the sewage treatment plants.
We intend to continue protecting the water resource by improving the quality and efficiency of the service offered in our territories of operation through key actions, such as:
We are among the top operators for energy distribution in Italy, with around 10 billion KWh of electricity distributed in 2019. In this area, which accounted for 37% of 2019 EBITDA, we intend to reach EBITDA of 402 million Euro by the end of the plan, with a 2019-2024 average annual growth of 3%. We shall be allocating 1.3 billion Euro to investments for infrastructure resilience and related upgrade interventions. In this sector, we plan to become a reference point in the energy transition process with development projects aimed at satisfying the growing electricity demand and the integration of distributed generation within the delivery system.
Main actions:
Insofar as concerns green energy production, EBITDA is forecast at 62 million Euro, with a 2019-2024 average annual growth of 7% and investments totalling 0.2 billion Euro aimed at boosting power generation from renewable sources to support the decarbonisation and energy transition processes. We intend to increase our installed photovoltaic plant capacity to 747 MW by the end of 2024, also through partnerships.
We are one of the key national players in the electricity market. In the commercial and trading area, our objective is to generate EBITDA of 123 million Euro in 2024, reflecting an average annual growth rate of 12%, to reach 1.6 million customers by 2024, with an increase of 17%, also by focusing on development of the free market. We shall be concentrating above all on the following:
The commercial context, which will become increasingly competitive and challenging following finalisation of the enhanced protection regime on the electricity market expected in 2022, will offer Acea an opportunity for growth. We in fact intend to play a leading role in the consolidation process that will open up following the complete liberalisation of the sector.
Our involvement in the Waste Management business commenced over 10 years ago, with particular reference to disposal and waste-to-energy. We are one of the leading Italian players in this sector and benchmark operator for Central Italy. By the end of 2024 we expect to reach EBITDA of 127 million Euro, with an average annual growth of 20% during the period 2019-2024, supported by an over 400 million Euro investment plan, to be used above all for consolidation of the acquired companies and the development of new M&A projects, enabling an increase in the volume of waste processed by the group to reach 2.9 million tons treated in 2024. We intend to improve the waste recovery cycle, in line with circular economy development objectives, enhancing our role in the recovery of mixed and organic waste, strengthening our role as regards waste-to-material from a circular economy perspective (treatment and recycling of paper and plastic) and developing our role within the realm of specific waste.
The know-how developed in more than a century of operations through the company Elabori, a “building-oriented company” for the turnkey management of construction and engineering activities, with over 100 million Euro of services performed each year, is at the disposal of the entire Group.
Moreover, via the acquisition of Simam we have enhanced our infrastructure construction skills, ensuring efficiency and flexibility in the operational management of industrial activities, with particular reference to the circular economy.
Regarding this business area, by the end of 2024 we expect to reach EBITDA of 22 million Euro, with an average annual growth of 12% during the period 2019-2024. Over the plan time frame we intend to invest 71 million Euro, mainly in the implementation of facilities via the insourcing of construction activities from an EPC (Engineering, Procurement & Construction) perspective.
In recent years we have enhanced our presence and growth in Latin America. In the business plan, we estimate that EBITDA in 2024 will reach 28 million Euro, with accumulated investments amounting to 25 million Euro during the period 2020-2024.
