We will allocate 500 million Euro to innovative projects and intend to strengthen our position in all sectors of operation (water, electricity, commercial and trading, environment). We also forecast an increase in EBITDA, an upturn in the value from the RAB and higher dividends.
The year 2018, Acea’s best so far, closed with results indicating that we are well ahead of schedule in terms of achieving the targets set by the business plan presented to the financial community in November 2017. The significant increase in the economic-financial results and the major improvement in the quality of services offered to customers have allowed us to present a substantial update to the plan, with even more challenging objectives for 2022.
Structural investments: 4 billion Euro are anticipated by end 2022 (as compared with 3.1 billion Euro announced in November 2017), of which 77% will be allocated to the regulated sector. Of total capex, 500 million Euro will go towards technological innovation projects, while the amount of 1.7 billion Euro is connected with sustainability objectives.
EBITDA: the implementation of these investments will support the growth in EBITDA, which will reach 1.1 billion Euro in 2020 and 1.3 billion by the end of the plan, with an average annual growth of 8%. The objective has been significantly increased on the basis of 2018 EBITDA which, at 933 million Euro, was well above the 2019 target set by the previous 2018-2022 plan. The growth in EBITDA is mainly driven by:
RAB: the RAB (Regulatory Asset Base) will increase by 28% to reach 4.8 billion Euro by the end of the plan.
Dividends: 800 million Euro will be available for distribution during the plan time frame, with a minimum dividend in 2019 of 0.75 Euro per share and further increases in the course of the plan period.
Debt: the net financial position (NFP) to EBITDA ratio is expected to be 2.9x at the end of the plan.
We are the leading Italian operator in the water sector and, in 2018, this business accounted for 45% of our EBITDA. In this area, we expect to reach EBITDA of 588 million Euro in 2022, with a 2018-2022 CAGR of 8%. We will invest 1.9 billion Euro during the plan time frame (300 million Euro more than was envisaged by the previous version of the plan) to support sector development and reduce the infrastructural and plant gap in the territories where we operate, focussing 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 interventions, such as:
We are amongst the top operators for energy distribution in Italy, with around 10 billion KWh of electricity distributed in 2018. In this area (which accounted for 37% of our EBITDA in 2018), we intend to reach 440 million Euro in EBITDA by the end of the plan, with a 2018-2022 CAGR of 5.1%. We will allocate 1.5 billion Euro to investments, in particular to improve the resilience of the infrastructures, allowing for a greater electrification of the system, which will constitute the enabling factor for the development of new value-added services within the scope of “smart city” initiatives. This industrial path, in keeping with the 2017 National Energy Strategy, is oriented towards an increasing decarbonisation of the energy system.
Furthermore, with regard to green energy production, we intend to strengthen our position by developing a portfolio of at least 150 MW in photovoltaic power, through the implementation of new plants and acquisitions on the secondary market.
We are one of the key national players in the sale of natural gas and electricity. In the commercial and trading area, we aim to generate EBITDA of 89 million Euro in 2020 and 154 million Euro in 2022, via investments totalling 181 million Euro. We expect to expand our portfolio of customers to 1.7 million in 2022, with an increase of around 30% compared to the current 1.3 million. We will mainly be focussing on:
The commercial context, made more competitive and challenging by the finalisation of the enhanced protection regime on the electricity market starting from 2020, 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.
We have been involved in the Waste Management business for more than 10 years now, in particular as regards disposal and waste-to-energy. We are one of the leading Italian players in this sector and the benchmark operator for central
Italy. By the end of the plan period, we expect to reach EBITDA of 76 million Euro, with a 2018-2022 CAGR of 3.9%, supported by a 300 million Euro investment plan. The results will reflect the end of the CIP6 incentives for the San Vittore plant, offset by the new initiatives envisaged, which will mainly be focussed on strengthening the waste treatment cycle, in line with the development of a circular economy. We propose to enter the sector of paper and plastic treatment and recycling as a key operator.
By the end of the plan period, we expect to be treating 2.2 million tons of waste, essentially doubling the volumes for 2018.