Press Release

• EBITDA €646.1m (up 21.7% on €530.9m of 9M 2015)

• EBIT €378.1m (up 32.8% on €284.8m of 9M 2015)

• Net profit €200.9m (up 47.1% on €136.6m of 9M 2015)

• Net debt €2,138.7m (up 6.4% on 31 December 2015)

• Investment €346.8m (up 21.8% on €284.8m of 9M 2015)

   

  Roma, 10 November 2016 – The Board of Directors of Acea SpA, chaired by Catia Tomasetti, has approved the report for the nine months ended 30 September 2016 (“9M 2016”).

  “Over the third quarter” - commented Acea’s Chairwoman, Catia Tomasetti - “we have proceeded with the complete digital transformation of all our operational processes and customer services, delivering continuous improvements in quality. In addition” - continued the Chairwoman - “for the first time and closely following on from implementation of recently introduced provisions in the Corporate Governance Code for Listed Companies, we have today presented our Strategic Sustainability Plan for the 2016-2020 period, setting targets that form an integral part of our Business Plan. In this way, we will ensure that our shared commitment to sustainability and to social value and responsibility remains at the heart of the Group’s strategy.”

  “Our strong commitment to simplifying and boosting the efficiency of operational processes and to cost control” - stated Acea’s CEO, Alberto Irace - “has brought results ahead of expectations, enabling us to raise our guidance for EBITDA growth in 2016 to around 5%/6%. The year has seen successive subsidiaries adopt the new way of working, with the process due to be completed in spring 2017. In recent days, we have taken advantage of favourable market conditions to successfully complete a liability management transaction that has lengthened the average term to maturity of the Group’s debt to almost 8 years, reducing its cost to below 3%.”

  FINANCIAL HIGHLIGHTS

  (€m)	9M 2015	9M 2016	% inc./(dec.)
  Consolidated revenue	2,167.7	2,047.5	-5.5%
  EBITDA	530.9	646.1	+21.7%
  EBIT	284.8	378.1	+32.8%
  Profit/(Loss) before tax	216.9	317.0	+46.2%
  Group net profit/(loss) (before non-controlling interests)	141.7	207.5	+46.4%
  Group net profit/(loss) (after non-controlling interests)	136.6	200.9	+47.1%

ACEA GROUP’S RESULTS FOR 9M 2016

Revenue of €2,047.5m is down 5.5% on 9M 2015. The reduction is primarily due to a decline in the volume of electricity sold on the free market, reflecting a more selective approach to our customer base, a strategy that has enabled us to improve the quality of receivables.

Consolidated EBITDA for 9M 2016 amounts to €646.1m, marking an improvement of approximately €115m or 21.7% (up 7.3% after stripping out effect of the regulatory change introduced by AEEGSI Resolution 654/2015, which has eliminated the so-called “regulatory lag”). The change in EBITDA reflects: rising water tariffs (up €32m); an increase in margins in the Energy segment (up €17m); the performance of the Grids segment which, after stripping out the above regulatory change (€77m), reports a €15m reduction in EBITDA, primarily as a result of the fifth regulatory cycle; contributions from the Environment segment and the Parent Company (amounting to approximately €4m).

Contributions to total EBITDA are as follows: Water 40%, Grids 39%, Energy 15% and Environment 6%.

The improvement in consolidated EBIT has outstripped the rise in EBITDA, increasing 32.8% to €378.1m.

Finance costs are down €5.7m (8.5%) to €61.3m.

Net profit attributable to owners of the Parent, after non-controlling interests, amounts to €200.9m, up 47.1% on the same period of 2015 (up 9.4% after stripping out the regulatory change in the Grids segment), reflecting an improved operating performance and reduced finance costs. The tax rate is 34.5% (broadly in line with 9M 2015).

The Group’s investment in 9M 2016 amounts to €346.8m, up 21.8%. Over 78% of this relates to our regulated businesses. Investment breaks down as follows: Water €150.4m; Grids €120.6m; Energy €38.7m; Environment €30.3m; Parent Company €6.9m.

The Group’s net debt amounts to €2,138.7m at 30 September 2016, up €128.6m on the figure at 31 December 2015. This essentially reflects the need to finance investment, including the Group’s digital transformation.

Net debt is substantially stable with respect to 30 September 2015.

GUIDANCE FOR 2016

The ACEA Group’s performance in the nine months ended 30 September 2016 has beaten expectations, enabling us to raise our guidance for EBITDA growth in 2016 to between 5% and 6%, after the extraordinary item relating to elimination of the above “regulatory lag”.