A2A, results as at 30 June 2024

MORE THAN 60% OF PRODUCTION FROM RENEWABLE SOURCES

STRENGTHENING ELECTRICITY DISTRIBUTION WITH CAPEX UP 31% COMPARED TO THE FIRST HALF OF 2023

FURTHER IMPROVEMENT OF ECONOMIC AND FINANCIAL PERFORMANCE

2024 GUIDANCE REVISED UPWARDS FOR EBITDA AND ORDINARY NET PROFIT

SUCCESS FOR THE FIRST HYBRID GREEN BOND TO SUPPORT CREDIT RATING, CONFIRMING THE GROUP'S COMMITMENT TO SUSTAINABLE FINANCE

• EBITDA at 1,279 million euro: +45% compared to the first half of 2023 (882 million euro).
• Ordinary Net Profit at 478 million euro: +86% compared to the same period of 2023 (257 million euro).
• Revenues of 6,091 million euro: -24% compared to the first six months of 2023 mainly due to the contraction in energy commodity prices.
• Capex of 553 million euro, +12% compared to the first half of the previous year, for the development of photovoltaic plants, the upgrading and efficiency of networks to support decarbonisation, the increase in the flexibility of generation plants and the recovery of materials and energy.
• Great success for the first hybrid bond, in green format, to support investments in the energy transition and the circular economy, with orders for 2.9 billion euro, about 4 times the amount offered.
• Net Financial Position at 4,019 million euro (4,683 million euro at 31 December 2023). Excluding changes in the scope of consolidation during the period (57 million euro) and the Hybrid Green Bond issuance (-742 million euro), the NFP amounted to 4,704 million euro thanks to an operating cash flow that financed both investments for 553 million euro and dividends for 300 million euro. The NFP/rolling EBITDA ratio was at 1.7x; excluding the impact of the Hybrid Green Bond, with a 100% equity treatment for IFRS purposes, the ratio would be at 2.0x, down compared to 31 December 2023 (2.4x).
• Share of sustainable debt in the Group's total gross debt at 77% (66% at 30 June 2023).
• Upward revision of guidance: The Group will target an EBITDA of between 2.18 and 2.22 billion euro for 2024 and a Group Net Ordinary Profit of between 700 and 720 million euro based on the excellent results of the first half of the year, in particular thanks to the solid performance of the Generation & Trading and Market Business Units.

Energy transition

• The generation of energy from renewable sources (hydroelectric, wind and photovoltaic) represents more
  than 60% of the production and is equal to 3.2 TWh.
• 70 % of the Parco Solare Friulano 2 has been acquired, which has obtained permission for the
  construction and operation of a photovoltaic plant with an authorized power of 112.1 MWp. With over 150 MWp installed in total, this plant together with the one authorized in 2022 in the same municipalities for a capacity of 59.1 MWp will represent the main photovoltaic hub in the north of the country. In fact, more than 210 GWh per year will be produced, which will make it possible to meet the electricity needs of over 75,000 households, reduce natural gas consumption by about 40 million cubic meters and avoid the emission of about 90,000 tons of CO₂.
• The largest and most powerful photovoltaic system in Italy built on rooftops and among the top 10 in the world has come into operation. The structure was built in the Fiera Milano exhibition center by A2A together with Fondazione Fiera through the Fair Renew joint venture. The plant represents an example of national excellence in the field of renewable energy: thanks to a total installed capacity of 18 MWp and an expected annual production of 21.6 GWh - equal to the consumption of about 7,800 households - it will avoid the emission of over 9,800 thousand tons of CO2 per year.

Sustainability

• Carbon dioxide emissions (Scope 1 + Scope 2) are down 41% compared to the value of the first half of
  2023.
• Capex eligible for the purposes of the European Taxonomy are equal to 72%.

The Group's commitment to sustainable finance continues: during the first half of the year, A2A successfully issued its first subordinated perpetual hybrid bond in Green-use of proceeds format with a nominal value of 750 million euro. The net proceeds from the issuance will be used to finance and/or refinance the Eligible Green Projects: strategic circular economy and energy transition projects mainly related to renewable energy, transmission and distribution networks, water cycle and pollution prevention and control, as defined in A2A’s Sustainable Finance Framework.
In June 2024, a 600 million euro syndicated term loan facility, in Green–use of proceeds format, was also successfully completed for acquiring assets relating to the electricity grid in certain areas of Lombardy, in the provinces of Milan and Brescia.

Finally, A2A published the new Sustainable Finance Framework, the set of guidelines that strengthen the integration between the Group's financial and sustainability strategies. The update aligns the previous 2022 version with the new objectives set out in the Strategic Plan 2024 -2035. The update maintains an integrated Framework that combines the two approaches: Green/Use-of-Proceeds, for transparency on the use of proceeds for specific projects, and Sustainability-Linked, creating the link with the achievement of sustainability targets.

The share of sustainable debt in the Group's total gross debt as at 30 June 2024 reached 77% (66% as at 30 June 2023).

The Board of Directors of A2A S.p.A. has examined and approved the Half-Year Financial Report as at 30 June 2024

Milan, 30 July 2024 - The Board of Directors of A2A S.p.A. met today and, under the chairmanship of Roberto Tasca, examined and approved the Half-Year Financial Report as at 30 June 2024.

The excellent results of this first half of 2024 underline the Group's path of significant continuous growth, strongly supported by the increase in investments. Within over 550 million euro invested in this first part of the year, 60% was allocated to industrial development and in particular to the strengthening and efficiency of networks to support decarbonisation, to photovoltaics, ensuring flexibility and balancing of the energy system and to the recovery of materials and energy. With more than 60% of energy generation from renewable sources, our commitment to the energy transition continues" - comments Renato Mazzoncini, CEO of A2A - "We have confirmed our commitment to current rating, strengthening the credit metrics by
issuing the first perpetual hybrid bond in green format and we are also satisfied with our sustainable finance strategy, with ESG debt reaching 77% of total gross debt. Thanks to these excellent performances, we have been able to revise 2024 guidance upwards, with an expected EBITDA between 2.18 and 2.22 billion euro and a Group net ordinary profit between 700 and 720 million euro".

In the first half of 2024, A2A achieved excellent results, confirming the continuous improvement in economic and financial performance.
The context in which growth developed in the period under review was characterized by a very significant increase in the production of energy from renewable sources as a result of high hydroelectric conditions, a greater stability of the energy scenario compared to the previous year, in which the tails of the crisis that had hit 2022 were still present, albeit gradually, attenuating, of the crisis, bearish price dynamics with a PUN at 93.4 €/MWh (down 31.5%) and the average cost of gas at the PSV at 31.2 €/MWh (down 34%), the evolution of the energy retail sector following the liberalization of the markets.
A2A has seized the most of the opportunities of the context by optimising the integrated electricity production portfolio and adopting effective hedging strategies and profitable commercial development actions.

 

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