A2A, results at september 30, 2021

Confirmed strong growth in margins and investments

Important awards for sustainability actions, A2A commitment to green finance continues

Financial results

• Revenues at 6,456 million euro: +34% on the first nine months of 2020.
• EBITDA as at 959 million euro, up by 137 million euro (+17%) on the first nine months of 2020 (822 million euro) thanks to significant organic growth and M&A transactions
• Net profit at 394 million euro, +81% compared to last year (218 million euro in the first nine months of 2020).
• Capex amounted to 640 million euro, +55% compared to the same period of the previous year.
• Net Financial Position of 3,782 million euro, up 310 million euro compared to December 31, 2020 Net of changes in the scope of consolidation and the impact of the new ESMA guidelines (totalling 441 million euro), the NFP improved by 131 million euro to 3,341 million euro.

Ecological transition

• +14% the installed capacity from renewable sources (hydroelectric, photovoltaic and wind), equal to 2,235 MW, compared to the corresponding period of 2020.
• A 26% decrease in the Group Emission Factor to 316g CO2/kWh compared to 2017, the Science Based Targets Initiative baseline year.

Sustainability

• Significant achievements for the sustainability strategy:
  • A2A was recognised as the company with the best sustainability report in the "Energy&Utilities" category, in first place in the "ESG Reporting Awards 2021" ranking by ESG Investing Global Markets Media Ltd (a UK-based financial media company) and came in second place in the "Best Climate -Related Reporting" category for reporting on climate change.
  • A2A has entered in the new MIB ESG index of Borsa Italiana, dedicated to listed blue-chips with the best practices at ESG level, in line with the principles of the UN Global Compact.
• The Group's commitment to green finance continues: following the issue of the Sustainability-Linked Bond for 500 million euro, on October 25, A2A successfully placed a Green Bond for 500 million euro with a duration of 12 years, which will finance Green Projects aligned to the EU Taxonomy, in particular with reference to the “climate change mitigation” objective.

 

A2A S.p.A. Board of Directors has examined and approved the quarterly Financial Information as at 30 September 2021

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Milan, 11 November 2021 – At today’s meeting of the Board of Directors of A2A S.p.A., chaired by Marco Patuano, the Board examined and approved the quarterly financial information as at 31 September 2021.

In the first 9 months of 2021, we continued with our significant industrial and economic growth driven by sustainability and green transition. We have recorded an increase in all our financial indicators and a record level of investments for the period; we have further speeded up on our installed capacity from renewable sources and reduced the Group's emission factor" - commented Renato Mazzoncini, Chief Executive Officer of A2A - "Our commitment remains focused on the energy transition and the circular economy in order to guarantee an important contribution to the achievement of the decarbonisation objectives and to build the infrastructures necessary to bridge the gap between the plants in certain areas. Strategic assets that will allow our country to remain protected from market turbulence and the consequent increase in the cost of energy, to the benefit of citizens".

In the period under review A2A recorded excellent results, with economic and financial indicators showing significant growth, thanks to the contribution of all the Group's Business Units and to the M&A transactions completed in the previous and current year.

The period results should be viewed against the backdrop of a complex scenario that included a recovery in demand for goods and services, particularly energy consumption, caused by the easing of the measures implemented to contain the pandemic, and strong pressure on the energy market due to a combination of factors: climatic factors, low levels of domestic energy supply, volumes of renewable energy production at their lowest levels since the beginning of the year - particularly in the hydroelectric area - which fuelled an upward pressure on energy prices, which then strengthened steadily during the reporting period.

In the first nine months of 2021, in fact, the PUN (Single National Price) increased by +141.8% compared with the same period in 2020, reaching an all-time high of 158.6 €/MWh in September. The increase in the PUN reflects a similar escalation in the prices of natural gas at the PSV (virtual exchange point) and of CO2. The average cost of gas at the PSV, in fact, was 30.1 € /MWh, up 234.5% on the same period of last year. CO2 quotations stood at an average price of 48.3 €/tonne in the first nine months of 2021 (23.8€/tonne in the same period of the previous year, +102%).

A2A has continued to pursue a prudent commodity price hedging policy, aimed at containing risk and volatility over the medium-term. The high level of hedging (more than 70% of expected production in 2021), which began as early as 2020, therefore limited the benefit potentially obtainable from the significant - and unexpected - increase in energy prices.

The extraordinary price dynamics combined with the growth in demand, the excellent performance of all Business Units and the contribution of the newly acquired companies, ensured good results for the first nine months of 2021:

• strong increase in turnover (+34%);
• growth in operating margins (+137 million euro, or +17%), in line with the results achieved in the first half of the year.

Capex amounted to 640 million euro, a 55% increase on the same period of the previous year.

In particular, a strong boost was given to development investments aimed at recovering energy and materials, upgrading distribution networks, water and sewage networks, purification plants, photovoltaic plants and digitalisation of the Group (approximately 390 million euro, +73% compared to the first nine months of 2020).

M&A transactions, fully in line with the 2021-2030 Business Plan based on energy transition and circular economy, mainly concerned the field of bioenergy (acquisition of Agripower, a company managing and developing biogas power generation plants) and the increase of installed power from renewable sources (acquisition of 17 photovoltaic plants from Octopus for a total installed capacity of 173MW). At September 30, total installed capacity from renewable sources (hydroelectric, photovoltaic and wind) was 2,235 MW, an increase of 14% compared to the corresponding period in 2020.

 

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