Other information

Significant events during the period and afterwards

Successfully placed a nine-year € 500 million bond issued under the EMTN Programme

Following the Board of Directors' resolution of 22 January 2020 and the completion of bookbuilding, on 29 January 2020 it successfully completed the placement of a non-convertible bond loan for a total principal amount of € 500 million, maturing on 6 April 2029 and at a rate of 0.50%, under the € 4 billion Euro Medium Term Notes (EMTN) programme, with the Base Prospectus as last updated on 15 July 2019 and subsequently supplemented on 27 January 2020 (the "Bonds").
The Bonds are intended exclusively for institutional investors in the Euromarket. The issue was successful, receiving requests equal to about 3 times the amount of the Bonds offered, by investors of primary rank and representative of many geographical areas.
The Bonds have a minimum unit denomination of € 100,000 and have been placed at an issue price of 99.20%, which implies a yield of 0.59%. The Bonds are governed by English law. The settlement date was set at 6 February 2020. From that date the Bonds will be listed on the regulated market of the Luxembourg Stock Exchange, where the prospectus was filed.
The proceeds from the issue of the Bonds will be used to finance the Company's ordinary activities, as well as to support the investments envisaged in the business plan for the three-year period 2020-2022.

Growth in the field of waste management and treatment

On 22 April Acea finalised an agreement for the acquisition of 60% of the capital of the companies Ferrocart S.r.l. and Cavallari S.r.l. (which holds 100% of Multigreen S.r.l.), engaged in the storage, treatment and sorting of waste.
The companies, which own a total of four plants with a total authorised capacity of over 145 thousand tonnes per year, operate in the provinces of Terni and Ancona, carrying out sorting and recovery of paper, iron, timber, plastics and metals. They are also active in the management of the separated collection of production and packaging waste as well as in the disposal of waste, mainly on behalf of Corepla (“National Consortium for the Collection, Recycling and Recovery of Plastic Packaging”). The economic value of the transaction, in terms of enterprise value for 100% of the two companies, is about € 25 million. The companies will be 100% consolidated by Acea, with an expected annual contribution to EBITDA of approximately € 4.5 million.
For Acea , this represents an important step forward in the path of infrastructure growth in the field of waste treatment and further investment in the circular economy, in line with the provisions of the 2019-2022 Business Plan and sustainability objectives.

Growth in the sector of the design and construction of plants for the environment and water treatment

On 7 May Acea finalised an agreement for the acquisition of 70% of the capital of SIMAM S.p.A. (Servizi Industriali Manageriali Ambientali), a leading company in the design, construction and management of water and waste treatment plants, in environmental works and reclamation, with integrated solutions featuring high technological content.
The economic value of the transaction, in terms of enterprise value for 100% of the company, is equal to € 30 million. The agreement envisages the possibility of acquiring additional shares of up to 100% of the company from 2023.
The company will be 100% consolidated by Acea, with an expected annual contribution to EBITDA of approximately € 7 million.
With the acquisition of SIMAM, Acea vertically integrates its areas of expertise, strengthening its capacity in the construction of infrastructure, ensuring efficiency and flexibility in the operational management of industrial activities, in particular in the circular economy.

Fitch Ratings confirms Acea's "BBB+" rating and "stable" outlook

On 12 May Fitch Ratings confirmed its Long-Term Issuer Default Rating (IDR) for Acea of "BBB+" with "Stable" outlook and the Short-Term IDR of "F2", despite the recent “downgrading of the Italian sovereign rating”. The Long-Term Senior Unsecured Rating of "BBB+" was also confirmed.
The opinion reflects Acea's strategic focus on regulated activities, the consolidation of positive operating performance and the good level of liquidity available.

The Shareholders' Meeting of Acea approves the Financial Statements as at 31 December 2019 and approves the payment of a dividend of € 0.78 per share

On 29 May 2019 the Acea S.p.A. Shareholders' Meeting approved the Financial statements and presented the Consolidated financial statements at 31 December 2019. The Shareholders’ Meeting appointed the new Board of Directors defining the relevant fees. The Board of Directors will remain in office for three financial years until the approval of the Financial Statements for 2022. The Board appointed Giuseppe Gola as Managing Director of the Company.

Standard Ethics raised Acea's Outlook from “Stable” to “Positive”. The current rating is “EE-”. The Company is part of the SE Multi-Utilities Index

On 27 July, Standard Ethics raised Acea's Outlook from “Stable” to “Positive” thanks to the development of sustainability strategies that are consistent and aligned with international guidelines. The scope of ESG (Environmental, Social and Governance) actions adequately covers industrial, technological, social and territorial aspects. More recently, the implementation process has also involved the sustainability governance system, control tools and risk management. Moreover, significant efforts appear to have been made with respect to gender equality and the promotion of diversity, starting with the qualitative and quantitative composition of the top-level organs. Reporting appears adequate and aligned with the most advanced standards.

Completion of the acquisition of 51% of the share capital of the company "Alto Sangro Distribuzione Gas"

On 31 August, Acea completed acquisition of 51% of the capital of the company Alto Sangro Distribuzione Gas S.r.l., which operates in the distribution of methane gas, and is present in 24 municipalities of the province of L’Aquila belonging mainly to Atem Aquila 3, and owns almost all of the gas distribution infrastructure, consisting of 537 km of network and about 34 thousand grid points.

Initiation of the plan for replacement of electricity meters with new second-generation devices

In October, the plan was launched for replacement in the Capital of electricity meters with second-generation smart meters. In the city of Rome, more than 2 million meters were installed with a total investment of approximately € 300 million. ARERA approved the Commissioning Plan of the 2G Smart Metering System presented by Areti, the Acea Group company that manages distribution and metering of electricity in the municipalities of Rome and Formello. The plan, which will run for 15 years, from 2020 to 2034, involves the replacement of current first-generation (1G) electricity meters with 2G smart meters for all users in the municipalities served by Areti. Replacement of the meters marks the entry into use of the electricity grid of the 2G technology, with significant benefits for users, sellers and distributors. With the 2G smart meters, using a metering system that makes data available after just 15 minutes, customers can easily check their consumption and adapt it based on their daily domestic habits. The functionality of the new smart-metering system will also enable and promote the use of advanced services to improve energy efficiency and protect the environment. New technologies will also allow identification of faults on local grids and meters more efficiently, reducing service restoration times and problems for citizens. Specifically, the fifteen-year plan includes a phase of mass replacement of electricity meters, which began in October and will be completed at the end of 2025. This mass replacement phase was preceded by a pilot phase in September in the Rome IX Municipality.

The Board of Directors approves the 2020-2024 Business Plan

On 27 October 2020, the Board of Directors of Acea approved the 2020-2024 Business Plan, which focuses heavily on sustainability. The Plan’s main goals are: (i) average annual growth in EBITDA of approximately 7%, € 1.3 billion in 2022 and € 1.4 billion in 2024 with a total increase by the end of the Plan of 38%, (ii) € 4.7 billion of investment in the 2020-2024 period, up approximately € 700 million compared to the previous Plan, (iii) NFP/EBITDA ratio in 2024 of 3x and NFP/RAB in 2024 of 0.7x and (iv) total dividends of € 860 million in the 2020-2024 period, up compared to the previous Plan, with a minimum DPS in 2021 of € 0.80.

Fitch Ratings confirms Acea's "BBB+" rating and "stable" outlook

On 14 January Fitch Ratings confirmed its Long-Term Issuer Default Rating (IDR) for Acea of "BBB+" with "Stable" outlook, and the Short-Term IDR of "F2". The Long-Term Senior Unsecured Rating of "BBB+" was also confirmed. Confirmation of the rating reflects the focus of the Group's strategy on regulated business, strong operating performance and a good level of available liquidity. These factors offset the increase in debt linked to investment programmes in innovation and sustainability included in the 2020-2024 Business Plan.

Successful completion of the first Green Bond placement for € 900 million

On 21 January, Acea S.p.A. successfully completed placement of its first Green Bond issue for a total amount of € 900 million, in two series, in the context of the Green Financing Framework recently published and under the € 4 billion Euro Medium Term Notes (EMTN) programme (the “Bonds”), with the Base Prospectus as last updated on 24 July 2020 and subsequently amended on 15 January 2021. The first series totalled € 300 million, with a rate of 0% and maturity on 28 September 2025 (the “2025 Bonds”) and the second series totalled € 600 million, with a rate of 0.25% and expiry on 28 July 2030 (the “2030 Bonds”).

Operating and financial outlook

The results achieved by the Acea Group at 31 December 2020 are better than the forecasts.
The Group is determined to make major investments in infrastructure that, while maintaining the solidity of its consolidated financial structure, have a positive impact on the Group's operating and economic performance.
The Group's financial structure is solid for the years to come. At 31 December 2020, 81.1% of debt is fixed rate in order to ensure protection against any increases in interest rates as well as any financial or credit volatility. At 31 December 2020 the average duration of medium/long-term debt stood at 5.4 years. Note that the reduction of the average cost went from 2.15% of 31 December 2019 to 1.74% of 31 December 2020.
For the year 2021 Acea expects:

• an increase in EBITDA between 6% and 8% compared to 2020; 
• investments of approximately € 900 million;
• a net financial debt between € 3.85 and € 3.95 billion. 

With regard to the Covid-19 state of emergency, the Acea Group immediately implemented all the necessary actions to ensure continuity in the services provided in the region, preserving quality and efficiency and at the same time ensuring the safety of its people through the adoption and implementation of the necessary prevention protocols. In addition, the high level of digitisation has allowed the implementation of an effective teleworking plan in all areas of the Group's activities.
The response of Acea personnel, the characteristics of the businesses managed by the Group and its financial strength have made it possible to cope with the crisis situation with timely and effective actions that are evident in the period's results.