Milan, 19th March 2020 – The A2A Group has developed its new 2020-2024 Strategic Plan, which represents an evolution of the TEC Plan approved last year, with a renewed focus on sustainability actions and targets.
The new Plan was, in fact, designed starting from the definition of challenging ESG objectives for each business unit, set out within three main sustainability spheres:
In each of these spheres, we identified challenging objectives to be achieved by 2024, but we also set out a longer-term development path that reaches 2030.
In particular, the Plan accelerates significantly along four lines:
The ordinary EBITDA is expected to grow by 434 €M to reach 1,626 €M by 2024, with growth distributed among all the different A2A business units. In particular:
Total investments amount to approximately 4.5 €B in five years, of which around 0.6 €B related to development in the RES segment.
In the same way as in the previous Strategic Plans, the Plan includes neither potential M&A transactions (excluding those relating to renewables) nor the effects of future local aggregations. To date, however, one local aggregation is at an advanced stage of development (incremental EBITDA of 35 €M) and another is at an advanced stage of analysis.
The Plan confirms A2A’s focus on a balanced capital structure: despite the growing investments and the increase in dividends, the Plan is expected to self-finance all the ordinary development (generation of financial flows 0.23 €B) in the five-year period and needs cash just to finance the acquisitions. The net financial position in 2024 should therefore grow by 0.6 €B compared to 2019 (from 3.15 €B to 3.77 €B), but with a reduction in the NFP / EBITDA ratio up to 2.3x by 2024 (from 2.6x in 2019), thanks to the growth in operating profitability.
The new Plan confirms last year's growing dividend policy. The dividend is expected to increase from 7.75 €c per share in 2019 to 8.00 €c in 2020, confirming the proposal for an average annual minimum dividend growth of 5% from 2021 to 2024.
The Board of Directors of the A2A Group has examined and approved the Strategic Plan 2020-2024. However, the Board has taken note that i) the renewal of governance envisaged with the forthcoming shareholders' meeting could significantly change the composition of the Board itself, and ii) the Strategic Plan was drawn up before the Covid-19 health emergency; although the company has carried out sensitivity analysis on the effects of the epidemic, and the first measures to contain the possible effects in the current year have been identified, the great uncertainty of the current global macroeconomic context will certainly require further and more detailed analysis in the coming months.
For both reasons, the Board of Directors considers it useful that this Plan is submitted to the attention of the incoming Board of Directors for any changes, additions, updates
Milan, 19th March 2020
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