Price Sensitive Press Release

RECORD RESULTS ACHIEVED IN 2016:

  •  EBITDA €896.3m (up 22.4% on €732.0m of 2015)
  •  Pro-forma EBITDA after adjusting for regulatory impact on Grids segment: €785m (up 7.2% on 2015)
  •  EBIT €525.9m (up 36.1% on €386.5m of 2015)
  •  Net profit €262.3m (up 49.9% on €175.0m of 2015)
  •  Investment €530.7m (up 23.7% on €428.9m of 2015)
  •  Net debt/EBITDA at 31 December 2016 2.4x (2.7x adjusted on 2.7x at 31 December 2015)

Payment of a dividend for 2016 of €0.62 per share to be proposed to the AGM (a payout ratio of 50%, based on consolidated net profit, after non-controlling interests), up 24% on the figure for 2015.

Rome, 13 March 2017 – The Board of Directors of Acea SpA, chaired by Catia Tomasetti, has approved the separate and consolidated financial statements for the year ended 31 December 2016 and the Sustainability Report for 2016.

The Annual General Meeting (AGM) of shareholders will be held on 27 April and 4 May 2017, in first and second call, respectively, in order, among other things, to approve the financial statements and vote on the appropriation of profit for the year.

The documentation regarding approval of the financial statements for 2016 and reports on the other Agenda items, required by the regulations in force, will be made available for inspection within the deadline established by law.

“These results show how it is possible to achieve challenging objectives, increasing investment and improving service quality,” commented Acea’s Chairwoman, Catia Tomasetti, “through a process of digital transformation that, by involving all areas of operation, has led to the creation of a new and more efficient operating model. The Group has confirmed its ability to create significant value growth.”

Alberto Irace, Acea’s CEO, stressed that “The results have been achieved after three years of hard work, and major commitment from everybody at the Company, and the complete digital transformation and re-engineering of processes. This has enabled us to radically change the Group, creating an agile organisation capable of taking its place among with best in Europe. We have built a solid base from which to speed up sustainable growth for the benefit of all our stakeholders.”

 

 

RESULTS FOR 2016

FINANCIAL HIGHLIGHTS

(€m)

2015

2016

% inc./(dec.)

Consolidated revenue

2,917.3

2,832.4

-2.9%

EBITDA

732.0

896.3

+22.4%

EBIT

386.5

525.9

+36.1%

Profit/(Loss) before tax

296.4

416.1

+40.4%

Group net profit/(loss) (before non-controlling interests)

181.5

272.5

+50.1%

Group net profit/(loss) (after non-controlling interests)

175.0

262.3

+49.9%

DPS (€)

0.50

0.62

+24.0%

 

(€m)

2015

 

2016

 

% inc./(dec.)

Investment

428.9

530.7

+23.7%

 

(€m)

31 Dec 2015

(a)

30 Sept 2016

(c)

31 Dec 2016

(b)

% inc./(dec.)

(b/a)

% inc./(dec.)

(b/c)

Net debt

2,010.1

2,138.7

2,126.9

+5.8%

-0.6%

Equity

1,596.1

1,682.1

1,757.9

+10.1%

+4.5%

Invested capital

3,606.2

3,820.8

3,884.8

+7.7%

+1.7%

 

 

ACEA GROUP’S RESULTS FOR 2016

Consolidated EBITDA amounts to €896.3m, a significant increase of 22.4% compared with 2015. This marks a record performance, achieved above all thanks to the contributions of the Water and Energy businesses, the plan to rationalise the Group and implementation of Project Acea 2.0, with the rollout of the Work Force Management (WFM) and new ISU Billing systems that have enabled us to achieve efficiencies beyond expectations. After stripping out the effect of the regulatory change (elimination of the so-called “regulatory lag”), EBITDA records strong growth in excess of 7%.

Contributions to total EBITDA are as follows:

  •  Environment 6% - the segment contributed EBITDA of €57.2m, broadly in line with the figure for 2015 (€57.4m). The result for 2015 benefitted from the insurance proceeds (€3.2m) recognised by Acea Ambiente following the fire that hit the Paliano plant. The margin reflects the entry into service of Line 1 at the San Vittore plant in October 2016 and the contribution of the Orvieto waste treatment plant.

ENVIRONMENT – operational highlights

2015

2016

Treatment and disposal (‘000 tonnes)*

765

820

WTE electricity produced (GWh)

265

283

                                               * includes ash disposed of

§ Energy 14% - this segment’s EBITDA is up 20.5% to €130.0m, reflecting a range of contrasting factors, such as: a reduction in the cost of billing and sales; a decrease in the margins on sales and production; an excellent performance from the energy management division.

ENERGY – operational highlights

2015

2016

Electricity production (GWh)

470

410

Electricity sold (GWh)

9,419

8,316

Enhanced protection market

2,951

2,757

Free market

6,468

5,559

Gas sold (million m3)

126

107

  •  Water 40% - this segment’s EBITDA amounts to €355.0m, an increase of €44.2m (14.2%). The improvement primarily reflects tariff trends and includes recognition of the quality award (recognised from 1 July 2016) for Acea ATO2, totalling approximately €23.1m.
  •  Grids 40% - EBITDA is up 39.3% to €356.3m. The increase reflects recognition of the above income linked to the regulatory change introduced by AEEGSI Resolution 654/2015, which has eliminated the so-called “regulatory lag”. After stripping out this income, EBITDA is down by approximately €11m due to the impact of the fifth regulatory cycle.

 

GRIDS – operational highlights

2015

2016

Electricity distributed (GWh)

10,557

10,009

 

EBIT of €525.9m is up 36.1%.

Finance costs are up to €111.6m, reflecting the partial buyback of two bond issues in the market, which resulted in a total cost of €32.1m.

Net profit, after non-controlling interests amounts to €262.3m, up 49.9% on 2015. The tax rate for 2016 is 34.5% (38.7% in 2015).

Acea invested a total of €530.7m in 2016 (up 23.7% compared with 2015). Investment, over 80% of which relates to our regulated businesses, breaks down as follows: Water €230.4m; Grids €197.9m; Energy €55.3m; Environment €34.0m; Parent Company €13.1m.

The Group’s net debt at 31 December 2016 amounts to €2,126.9m, slightly down on the figure for 30 September 2016 and up €116.8m compared with 31 December 2015. This is largely due to the need to finance the large-scale investment that has taken place.

The ratio of net debt to EBITDA is down from the 2.7x of 2015 to 2.4x at the end of 2016.

In view of the results achieved in 2016, Acea’s Board of Directors has decided to propose that the AGM approve payment of an ordinary dividend of €0.62 per share (representing a payout of 50% based on consolidated net profit, after non-controlling interests).

 

 

EVENTS AFTER 31 DECEMBER 2016

On 20 February 2017, Acea Illuminazione Pubblica presented a binding offer as part of the auction, organised by Infratel Italia SpA, on behalf of the Ministry for Economic Development, in order to support the development of superfast broadband in so-called “white areas” in the regions of Marche and Umbria (Lot 3) and Lazio (Lot 4). The aim of the auction is to award a fixed-term concession to design, build, maintain and operate publicly owned passive superfast broadband infrastructure and to provide passive and active access on a wholesale basis. The Company had prequalified for the auction and was invited to take part on 5 December 2016.

 

 

 

GUIDANCE FOR 2017

On a like-for-like basis, Acea expects the following performance in the current year:

  •  EBITDA growth of between 4% and 6% compared with adjusted EBITDA for 2016 (€785m).
  •  Investment in line with 2016 (€530m).
  •  Net debt at the end of the year between €2.3bn and €2.4bn.

 

 

CALL TO THE AGM

The Annual General Meeting of shareholders will be held in first call on 27 April 2017 and in second call on 4 May 2017, to approve the financial statements for the year ended 31 December 2016 and acknowledge the consolidated financial statements and attached reports. The AGM will also be asked to elect the new Board of Directors and appoint independent auditors.

As previously noted, the Board of Directors intends to propose payment of a dividend of €0.62 per share.

The dividend (coupon no. 18) will be paid from 21 June 2017. The ex-dividend date is 19 June and the record date 20 June.

 

The following schedules are attached:

·       CONSOLIDATED ACCOUNTS: INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016, STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2016, STATEMENT OF CHANGES IN EQUITY AND ANALYSIS OF NET DEBT AT 31 DECEMBER 2016.

 

A conference call will be held today at 5.30pm (Italian time) in order to present the results for the year ended 31 December 2016. To coincide with the start of the conference call, back-up material will be made available at www.acea.it.

 

The Executive Responsible for Financial Reporting, Demetrio Mauro, declares that, pursuant to section two of article 154 bis of the Consolidated Finance Act, the information contained in this release is consistent with the underlying accounting records.

Acea SpA

Investor Relations                                                                                                                                                                          
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Corporate website: www.acea.it

 

 

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2016

€000

 

2016

2015

Increase/

(Decrease)

Sales and service revenues

2,708,646

2,800,570

(91,925)

Other operating income

123,772

116,748

7,024

Consolidated net revenue

2,832,417

2,917,318

(84,901)

 

 

 

 

Staff costs

199,206

211,157

(11,950)

Cost of materials and overheads

1,766,209

2,002,709

(236,499)

Consolidated operating costs

1,965,415

2,213,865

(248,450)

 

 

 

 

Net profit/(loss) from commodity risk management

0

0

0

 

 

 

 

Profit/(loss) on non-financial investments

29,345

28,501

843

 

 

 

 

 Gross operating profit

896,347

731,954

164,392

 

 

 

 

Amortisation, depreciation, provisions and impairment losses

370,403

345,489

24,914

 

 

 

 

Operating profit/(loss)

525,944

386,465

139,479

 

 

 

 

 

 

 

 

Finance income

17,258

20,163

(2,904)

Finance costs

(128,822)

(111,246)

(17,576)

Profit/(loss) on investments

1,707

1,010

696

 

 

 

 

Profit/(loss) before tax

416,087

296,392

119,694

 

 

 

 

Income tax expense

143,548

114,847

28,701

 

 

 

 

Net profit/(loss)

272,539

181,545

90,994

 

 

 

 

Net profit/(loss) attributable to non-controlling interests

10,192

6,553

3,639

 

 

 

 

Net profit/(loss) attributable to owners of the Parent

262,347

174,992

87,355

 

 

 

 

Earnings/(Loss) per share attributable to owners of the Parent

     

Basic

1,2319

0,8217

0,4102

Diluted

1,2319

0,8217

0,4102

 Earnings/(Loss) per share attributable to owners   of the Parent after treasury shares (€)

     

 Basic

1,2343

0,8233

0,4110

 Diluted

1,2343

0,8233

0,4110

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2016

€000

ASSETS

31 December 2016

31 December 2015

Increase/

(Decrease)

Property, plant and equipment

2,210,338

2,087,324

123,014

Investment property

2,606

2,697

(91)

Goodwill

149,825

155,381

(5,555)

Concessions

1,662,727

1,520,304

142,423

Other intangible assets

158,080

104,696

53,384

Investments in subsidiaries and associates

260,877

247,490

13,387

Other investments

2,579

2,750

(170)

Deferred tax assets

262,241

274,577

(12,336)

Financial assets

27,745

31,464

(3,719)

Other assets

34,216

39,764

(5,547)

NON-CURRENT ASSETS

4,771,235

4,466,446

304,790

       

Inventories

31,726

26,623

5,103

Trade receivables

1,097,441

1,098,674

(1,232)

Other current assets

132,508

130,675

1,833

Current tax assets

74,497

75,177

(680)

Current financial assets

131,275

94,228

37,047

Cash and cash equivalents

665,533

814,653

(149,120)

CURRENT ASSETS

2,132,981

2,240,030

(107,049)

Non-current assets held for sale

497

497

0

 

 

 

 

TOTAL ASSETS

6,904,713

6,706,972

197,741

 

EQUITY AND LIABILITIES

31 December 2016

31 December 2015

Increase/

(Decrease)

Equity

     

Share capital

1,098,899

1,098,899

0

Legal reserve

95,188

87,908

7,280

Other reserves

(351,090)

(350,255)

(835)

Retained earnings/(accumulated losses)

565,792

512,381

53,411

Profit/(loss) for the period

262,347

174,992

87,355

Total equity attributable to owners of the Parent

1,671,136

1,523,924

147,211

Equity attributable to non-controlling interests

86,807

72,128

14,679

Total equity

1,757,943

1,596,053

161,890

Staff termination benefits and other defined-benefit

obligations

109,550

108,630

920

Provisions for liabilities and charges

202,122

189,856

12,266

Borrowings and financial liabilities

2,797,106

2,688,435

108,672

Other liabilities

185,524

184,100

1,425

Deferred tax liabilities

88,158

87,059

1,099

NON-CURRENT LIABILITIES

3,382,460

3,258,079

124,381

       

Trade payables

1,292,590

1,245,257

47,334

Other current liabilities

273,782

306,052

(32,270)

Borrowings

151,478

259,087

(107,609)

Tax liabilities

46,361

42,346

4,015

CURRENT LIABILITIES

1,764,211

1,852,741

(88,531)

Liabilities directly associated with assets held for sale

99

99

0

 

 

 

 

TOTAL EQUITY AND LIABILITIES

6,904,713

6,706,972

197,741

 

 

 

STATEMENT OF CHANGES IN EQUITY

€000

 

Share

capital

Legal reserve

Other reserves

Net profit/ (loss) for period

Total

Non-controlling interests

Total equity

Balance at 1 January 2015

1,098,899

176,119

15,381

140,167

1,430,566

71,825

1,502,391

Net profit/(loss) in income statement

     

174,992

174,992

6,553

181,545

Other comprehensive income/(losses)

     

6,592

6,592

1,236

7,829

Total comprehensive income/(loss)

0

0

0

181,584

181,584

7,789

189,374

Appropriation of net profit/(loss) for 2014

   

140,167

(140,167)

0

0

0

Dividends paid

   

(95,647)

 

(95,647)

(5,477)

(101,123)

Change in basis of consolidation

   

7,421

 

7,421

(2,009)

5,412

Other changes

 

(88,211)

88,211

 

0

 

0

Balance at 31 December 2015

1,098,899

87,908

155,533

181,584

1,523,924

72,128

1,596,053

 

 

Share

capital

Legal reserve

Other reserves

Net profit/ (loss) for period

Total

Non-controlling interests

Total equity

Balance at 1 January 2015

1,098,899

87,908

155,533

181,584

1,523,924

72,128

1,596,053

Net profit/(loss) in income statement

 

 

 

262,347

262,347

10,192

272,539

Other comprehensive income/(losses)

 

 

 

(3,338)

(3,338)

240

(3,098)

Total comprehensive income/(loss)

0

0

0

259,009

259,009

10,432

269,441

Appropriation of net profit/(loss) for 2014

0

7,280

174,304

(181,584)

0

0

0

Dividends paid

0

0

(106,274)

0

(106,274)

(4,405)

(110,679)

Change in basis of consolidation

0

0

(5,524)

0

(5,524)

8,652

3,129

Other changes

0

0

0

0

0

0

0

Balance at 31 December 2015

1,098,899

95,188

218,040

259,009

1,671,136

86,807

1,757,943

 

 

RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2016

 

€000


STATEMENT OF FINANCIAL POSITION                                   

31 December 2016

31 December 2015

Increase/

(Decrease)

  

NON-CURRENT ASSETS AND LIABILITIES

4,161,430

3,868,612

292,818

Property, plant and equipment and intangible assets

4,184,073

3,870,899

313,174

Investments

263,456

250,239

13,217

Other non-current assets

296,458

314,341

(17,883)

Staff termination benefits and other defined-benefit obligations

(109,550)

(108,630)

(920)

Provisions for liabilities and charges

(199,325)

(187,078)

(12,247)

Other non-current liabilities

(273,682)

(271,159)

(2,523)

 

 

 

 

NET WORKING CAPITAL

(276,560)

(262,505)

(14,054)

Current receivables

1,097,441

1,098,674

(1,232)

Inventories

31,726

26,623

5,103

Other current assets

207,005

205,852

1,154

Current payables

(1,292,590)

(1,245,257)

(47,334)

Other current liabilities

(320,142)

(348,397)

28,255

 

 

 

 

 INVESTED CAPITAL

3,884,871

3,606,107

278,763

 

 

 

 

NET DEBT

(2,126,927)

(2,010,054)

(116,873)

Medium/long-term loans and receivables

27,745

31,464

(3,719)

Medium/long-term borrowings

(2,797,106)

(2,688,435)

(108,672)

Short-term loans and receivables

128,479

91,450

37,028

Cash and cash equivalents

665,533

814,653

(149,120)

Short-term borrowings

(151,577)

(259,187)

107,609

 

 

 

 

Total equity

(1,757,943)

(1,596,053)

(161,890)

 

 

 

 

 BALANCE OF NET DEBT AND EQUITY

(3,884,871)

(3,606,107)

(278,763)

 

 

ANALYSIS OF CONSOLIDATED NET DEBT AT 31 DECEMBER 2016

 

€000

 

31 December 2016

31 December 2015

Increase/

(Decrease)

  

Non-current financial assets/(liabilities)

2,074

2,355

(281)

Non-current financial assets/(liabilities) due from/to parent

25,671

29,109

(3,438)

Non-current borrowings and financial liabilities

(2,797,106)

(2,688,435)

(108,672)

Net medium/long-term debt

(2,769,361)

(2,656,971)

(112,391)

 

 

 

 

Cash and cash equivalents and securities

665,533

814,653

(149,120)

Short-term bank borrowings

(52,960)

(58,718)

5,758

Current financial assets/(liabilities)

(78,130)

(147,696)

69,566

Current financial assets/(liabilities) due from/to parent and associates

107,991

38,677

69,314

Net short-term debt

642,434

646,916

(4,483)

Total debt

(2,126,927)

(2,010,054)

(116,873)