In order to keep up with scenario changes, we have launched an important infrastructural investment plan which, without affecting the soundness of our financial structure, has an immediately positive impact on performance and EBITDA.

Market trends and context

The reference scenario in which we operate is influenced by certain mega trends, such as the development of the circular economy, decarbonisation, the smart city concept of smart cities also based on digitisation, the drive towards technological innovation, climate change and environmental impacts.

We also operate in highly regulated sectors, including in terms of tariffs. The reference regulatory context is extensive and articulated, according to the specific nature of the businesses managed (water, energy and environmental) but also the variety of areas in which the detailed legislative and regulatory provisions affecting our business intervene.

Finally, the technological scenario shows dynamism, with intense research and development by producers of technological services, as well as the pervasive application of these technologies in all the group's areas of operation.

Water sector: The Authority’s action aims, for all regulated sectors, is directed towards ensuring the usability and distribution of the services in a homogeneous manner throughout the national territory, defining suitable levels of service quality, drawing up certain and transparent tariff systems based on predefined criteria and enhancing the protection of user and consumer interests.
For service managers, development opportunities will therefore be closely linked to their ability to adopt advanced technological systems and efficient performance improvement models, together with general social objectives that take account of social issues, environmental protection and efficient use of resources.  Additionally, the new regulation by the Italian Regulatory Authority for Energy, Networks and the Environment on the quality of the integrated water service more heavily rewards the efficiency of operators, with the introduction of a premium/penalty mechanism connected with performance standards. For service managers, development opportunities will therefore be closely linked to the capacity to adopt evolved technological systems and efficient models, which can significantly improve

Energy: the National Energy Strategy, adopted by the Italian government in 2017, defined some key elements, including:

  • decarbonisation through a strong drive towards electrification;
  • the increase in energy security so as to guarantee the flexibility, adequacy and resilience of the electricity grid;
  • the development of technology and innovation in order to enable the “new downstream”, making the customer active and aware;
  • the full liberalisation of the market and consolidation of players.

Environment: implementation of European Union indications regarding the circular economy (“Closing the Loop”), aimed at recycling and recovering materials, promotes the development of a new plants system to close the infrastructural gap, particularly in the treatment of organic waste.

For further information regarding market trends and the regulatory and tariff framework, reference is made to the 2018 consolidated financial statements
For further information regarding the sustainability context, reference is made to the 2018 Sustainability Report

2019 outlook

The results achieved in 2018 exceeded expectations and have allowed us to improve our earlier guidance.
For 2019, we expect to see:

  • an increase in EBITDA between 5% and 6% compared to 933 million Euro posted in 2018;
  • a growth in investments over 10% compared to 2018;
  • net debt by year-end between 2.85 and 2.95 billion Euro.

2022 objectives

 
2018
 
2020 objective 2022 objective
EBITDA (mln Euro) 933 1,083 1.270
Net profit (mln Euro) 271 283 362
RAB (bln Euro) 3.7 4.3 4.8
NFP/EBITDA (multiple) 2.8x 3x 2.9x