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This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
A2A ENVIRONMENT BU
Fulvio Roncari - General Manager, A2A Environment BU
October 2016
2
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
A2A AT A GLANCEThe leading Italian Multy-Utility
A2A FootprintA2A FOOTPRINTFINANCIAL HIGHLIGHTS
DIVERSIFIED BUSINESS PORTFOLIO
Sources: A2A Strategic Plan 2015 Results & Business Plan Update; Company Annual Reports; CONSOB (shareholding structure updated at 30 September 2016)
CURRENT SHAREHOLDING STRUCTURE100%: # of shares 3,132,905,277
Total
A2A Spa (treasury shares) 0.8%
Norges Bank 3.0%
Municipality of Brescia 25.0%
Municipality of Milan 25.0%
Free Float 46.2%
53.8% 100.0%46.2%
4.9 €BRevenues
1+ €BEBITDA
2.2 €B Capex 2016-20
ENVIRONMENT
210 €M
20%
NETWORK &HEATING
356 €M
34%
GENERATION& TRADING
340 €M
33%
ENERGYRETAIL
90 €M
9%
EPCG
(Montenegro)
53 €M
5%
EBITDA
MONTENEGRO
Focus in Northern Italy withpresence in Montenegro
Technological Partnerships inwaste sector in UK, Spain,Greece
ITALY
3
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
100%
100%
51%
Main controlled companies: Rieco (100%) Resmal (100%) Galli Ecologistica (100%) Resmal Ecologistica (100%) Ecolombardia 4 (69%) SED (80%) ASRAB(70%) Bioase (70%)
Bellisolina (100%)
Treatment, recovery, disposal,engineering, sales andindustrial waste management
Municipal Solid Waste (MSW)collection and street cleaning
100% 90%
ENVIRONMENT BU & A2A AMBIENTE GROUP
Environment division
64%
4
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
Collection56%
Treatmentand
other44%
ENVIRONMENT BU – KEY NUMBERS
Financial Highlights* 2015
Revenues 810
EBITDA 210
EBIT 147
CAPEX 59
Net capital invested 281
Over 3 million people served with MSW management and street cleaning
Over 4,600 employees
4.9 million ton overall managed waste (collection + treatment + disposal)
1.6 billion kWh electric energy recovered from waste
1.1 billion kWh heat energy recovered from waste
Collection33%
Treatmentand
other67%
RevenuesRevenues EBITDAEBITDA
Collection14%
Treatmentand
other86%
Net capital investedNet capital invested
*Pro forma data
5
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
A2A ENVIRONMENT BUSINESS MODEL
BU Environment operates along the whole waste management value chain, including engeneering activities and R&DBU Environment operates along the whole waste management value chain, including engeneering activities and R&D
A2A AMBIENTE BUSINESS MODEL
COLLECTION RECYCLING & TREATMENT WtE LANDFILLFINAL ENERGY
RECOVERYFINAL ENERGY
RECOVERYACTIVITY
PROCESS
URBANWASTE
INDUSTRIALWASTE
OUTPUT OFPROCESS
Selection-recyclingplants
Wastecollectionand streetcleaning
Sorted
Unsorted
Compost, glass,paper/cardboard,
plastic, inertmaterials
MBT plants andSRF productionplants
Biodryedmaterials
Waste to Energyplants
Heat and power
Residual andashestreatment
Residual waste,intert materials
and metals
Landfill
Biogas
Powerproductionfrom biogasplants
Power
6
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
0
1,000
2,000
3,000
4,000
5,000
6,000
A2AAmbiente
HeraAmbiente
Ama Iren Ambiente Acea
kto
n
Treated waste
0
1,000
2,000
3,000
4,000
5,000
A2AAmbiente
HeraAmbiente
Ama IrenAmbiente
Acea
kin
hab
itan
ts
Served inhabitants
BENCHMARK IN ITALYMain Italian Multy-Utilities comparison
A2A Ambiente (including LGH)
Hera Ambiente
Iren Ambiente
Ama
Acea
*th
ird
par
typ
lan
tsex
clu
ded
Sou
rce:
Sust
ain
abili
tyre
po
rt2
01
5
LGH
LGH
0
50
100
150
200
250
A2A Ambiente HeraAmbiente
Ama Iren Ambiente Acea
M€
EBITDA 2015
LGH
Only treatment
*
7
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
WASTE MARKET CONTEXT
• MSW production: 29.6 Mt/y (488 kg/p year )
Separate collection: 13.4 Mt (45.2%):
Differences across the regions : 56.7%
North, 40.8% Center, 31.3% South
• Commercial and Industrial Waste
production: 80.9 Mt/y (excluding
Construction and Demolition)
Hazardous waste: 8.8 Mt
Italian MSW market size 2014Italian MSW market size 2014Italian Waste production 2014Italian Waste production 2014
Total Wasteproduction:160 Mt/y
MSW CollectionMSW CollectionMSW TreatmentMSW Treatment
Industrial Waste ManagementIndustrial Waste ManagementMaterial RecoveryMaterial Recovery Energy RecoveryEnergy Recovery
Waste sector will be analysed following its main segments:
MSW18%
Hazardous6%
C&D31%
Other nonhazardous
38%
From MSWtreatment
7%
8
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
WASTE MARKET KEY ELEMENTS
General OverviewGeneral Overview
Multitude of operators, which includes big multi utilities andsmall companies
Business fragmentation: few operators oversee the entire valuechain
Relevant % of inefficient operators in term of reliability and/orinvestment capabilities
Strong dependence on landfills
Lack of suitable facilities, in terms of number and average sizeof facilities, irregular distribution (less investments in territorieswith more lack in plants presence)
Regulatory uncertainty not allowing the definition of medium tolong term plans
Source: WAS Althesys La trasformazione dell’industria Italiana del Waste Management
Top 75 operators MSW sector
Revenues(B€)
6.4 68% of Italian sector
Inhabitants served(M)
35.759% of the Italianpopulation
Waste managed(Mt)
17.961% of the total MSWItaly
MSW treatment trend in ItalyMSW treatment trend in Italy
Trend of waste management:
slow reduction of landfill, however Italy is stillstrongly depending on landfills (31% of wastelandfilled),
Differences across regions 19% North, 32%Center, 49% South
Increase of recovery Slow increase in WtE
WtE20%
Landfill31%
Treatmentfor
recovery49%
Source: Ispra Rapporto rifiutispeciali 2016 and Rapportorifiuti urbani 2015
1/3 of top 75 operators are BigMultiutilities
9
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
WASTE MARKET SEGMENT: COLLECTION
Top Big Medium/Big Medium Small
Number of operators 4.1% 4.3% 9.7% 30.5% 51.4%
Revenues 40.0% 13.1% 15.4% 22.0% 9.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Top RV>100M€
Big 50<RV<99 M€
Medium/Big 25<RV<49M€
Medium 10<RV<24M€
Small RV<10M€
Operators Structure: Green Book Utilitalia 2016
Number of operators 2013: 463
Variety of operators in term ofsize, business field and results
64% of in-house providingservices: new tenders for servicesor private partners selectionexpected
Multi years exclusivecontracts with public authorities(5-10 years)
MARKET KEY ELEMENTSMARKET KEY ELEMENTS
Focus In house:up to 60% in Friuli, Veneto,Emilia Romagna, relevant in
Piemont, Lombardy andTuscany
Source: AGCM Indagineconoscitiva IC49
10
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
WASTE MARKET SEGMENT: COLLECTION
2016 Collectedwaste
kt
Inhabitantsserved
kp
Amsa 803 1,600
Aprica 409 960
Aspem 57 140
LGH* 270 560
Total 1,539 3,260
A2A POSITIONINGA2A POSITIONING
2015 – A2ARevenues: 456 M€Ebitda: 69 M€Ebitda margin: 15%
18% of Lombardymunicipalitiesserved by A2A
33% of Lombardyinhabitants
served by A2A
0%
20%
40%
60%
80%
Bergamo Varese Como Cremona Milano Brescia
A2A SEPARATE COLLECTION RATE
Italy 45.2%
Full integration along the waste value chain
Integrated global service to communities andbusiness
Tailor-made solutions for community needsand capacity to provide cost-effective solutions
*From 2016
11
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
Reinforce leading position in Italylevering on geographic proximity:
Improving services efficiency andsustainability by applying newtechnologies
Benefit form vertical integrationsupporting A2A’s collection serviceslevering on owned recovery andtreatment facilities and securingcontracts for the supply of waste to thetreatment plants
More inhabitants served with collection and streetcleaning: +100,000 inhabitants every year by tendering in
target selected areas able to guarantee certainty ofpayment
BP Target : covering more than 3,2 million
+560 kpM&A operation
People served by LGH Group
WASTE MARKET SEGMENT: COLLECTION
+200 kpAwarded tenders
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2014 2015 and 2016 @2020
Pe
op
lese
rve
d(k
p)
DELIVERING OUR PLAN: @ 2020DELIVERING OUR PLAN: @ 2020
BP Target
2,700 Kp3,200 Kp
3,800 Kp3,400 Kp
12
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
WASTE MARKET SEGMENT: MSW TREATMENT
Infrastructure gap between north andsouth in term of capacity and efficiency
Strong “NIMBY” attitude: difficultiesto obtain new plant authorizations
Infringements proceeding for failure tocomply with EU regulations on wastemanagement
No Landfill tax (or too low value)make landfill an ‘unfair’ competitor
Middle term exclusive contracts (1-2years) with public authorities orcollection operators
MARKET KEY ELEMENTSMARKET KEY ELEMENTS WtE plants (MSW and Refuse Derived Fuel)Italy 2014: 44 plants (66% located in north IT)
Source: Ispra report 2015
13
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
SELEZIONEMATERIALI
ALTAEFFICIENZA
EU top 8 = Germany, Switzerland, Belgium, Sweden, Netherland, Norway, Denmark, Austria
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
The goal of reducing landfill disposal at minimum has beenobtained through synergic and simultaneous increase of both
material recovery and energy recovery.
RECOVERY AND OTHER TREATMENTSWTELANDFILL
WASTE MARKET SEGMENT: MSW TREATMENTEvolution of National waste managemet systems - EU Top 8
14
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
Comparable toGermany in 1999
45 %
35 %
20 %
* Source: Ispra report 2015
RECOVERY AND OTHER TREATMENTSWTELANDFILL
WASTE MARKET SEGMENT: MSW TREATMENTEvolution of National waste managemet systems -Italy
15
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
100%landfill100%
landfillZero
landfillZero
landfill
TREATMENT
Best EU casesshow that
countries withthe highest rates
of energyrecovery alsotend to havehigh rates of
recycling
Recycling WtE Landfill
BENCHMARKING EUBENCHMARKING EU
Waste treatment balance
WASTE MARKET SEGMENT: MSW TREATMENT
Source: www.ec.europa.eu/eurostat
16
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
TREATMENTWASTE MARKET SEGMENT: MSW TREATMENT
Differences from Italian Government estimation mainly due to:
Italian Government estimation (Unlocked Italy Decree) foresee a GAP of WtE of 1.8 Mt. However anestimation from Milan Politecnico* foresee a gap of more than 6 Mt.
Italian Government defines a 3 Mt GAP for Anaerobic Digestion and Composting
*Source: Politecnico Milano Leap Valutazione Preliminare del fabbisogno nazionale di capacità di Termodistruzione
SECTOR CAPACITY GAP CAPEX
WtE (according to Politecnico of Milanstudy)*
6 Mt * 6 B€
Composting and Anaerobic Digestion(according to DPCM march 7 2016)
2.1-3 Mt 1-1.5 B€
Material recovery (A2A estimation) 1.3 Mt 1 B€
PoliMI ESTIMATION EFFECT
Rejects from separate collectiontreatment
20% of separate collection +2Mt
Separate collection rate 65% Overall Italy +1Mt
Destination of rejects from MBT WtE in order to reach zero-landfill
+1.2Mt
17
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
WASTE MARKET SEGMENT: MSW TREATMENT
A2A POSITIONINGA2A POSITIONING
WtE capacity up to 2.4 Mt/y of which1.75Mt/y in owned plants (3 largest ItalianWTEs)
Wide range of different technologies forrecovery of 500 kt/y
10 patented MBT plants Financial reliability and capacity to
invest in new assets Proven technical capabilities in R&D and
EPC for selection of the state of arttechnologies
7WtE10 MBT plants11 Material Recovery Plants
2015 – A2ARevenues: 320 M€Ebitda 2015: 135 M€Ebitda margin: 42%
Well placed tohelp bridge the
structuraldomestic
infrastructuregap in wastetreatment
18
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
0
200
400
600
800
1,000
1,200
2015 2016 @2020
350
+250
1,100
DELIVERING OUR PLAN: @ 2020DELIVERING OUR PLAN: @ 2020
Became a leader in recovery of materialby building new assets and selectiveacquisitions Increased recovery capacity +750k/t
(+210% recovery capacity Plastics, Paper, Foodwaste)
Reinforce energy recovery leadingposition in Italy by building new assets Increased in WtE capacity +400 kt/y
(+20% capacity)
2,000
+4002,820
2015 2016 @2020
+165 kt Plants efficiencyFlow Optimization Brescia and Milan WtEs
+255 kt2 projects ongoing
Corteolona: VIA already obtained San Filippo del Mela
M&A LGH
ENERGY RECOVERY
MATERIAL RECOVERY
M&ARieco-RESMAL paper 200kt
(completed)LGH paper/plastics 53kt
(completed)
+128 ktPlants efficiencies
Castenedolo 100kt -Astiglass 20kt - Other 8kt
+375 kt
(45kt each)
+375 ktFive plants already
designed for materialtreatment after separate
collection including 2plants for plastics
selection withauthorization already
presented in Q3 2016 -(45kt each)
WASTE MARKET SEGMENT: MSW TREATMENT
2014
2014
19
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
Few operatorsNational and International Market
Multitudes of operatorsMainly Local Market
Many operatorsMainly National Market
Extremely fragmented marketacross each stage (horizontally)
Multitude of small operators thatmanage less than 50kt/y
Limited availability of final plantscause dependence on foreign plants
Short term non-exclusive contract(1y or less) with private clients
MARKET KEY ELEMENTSMARKET KEY ELEMENTS
WASTE MARKET SEGMENT: INDUSTRIAL WASTE
*Source: A2A Ambiente Industrial waste Commercial Department
BrokerageBrokerage StorageStorageDedicatedtreatmentDedicatedtreatment
Disposal
Recovery
Disposal
Recovery
€/t
20
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
A2A POSITIONINGA2A POSITIONING
Biggest WTE for Industrial and Hazardous waste in Filago (BG)
Market leader in final treatment for hazardous waste covering more than37% of Italian capacity
Financial resources and ability to develop and manage different plants andpartners
Client oriented approach offering waste management and consultancyservices focused on guarantee environmental compliance
230 kt treated in 2015
2015Revenues: 33 M€Ebitda 5.3 M€Ebitda margin: 16%
WASTE MARKET SEGMENT: INDUSTRIAL WASTE
21
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
DELIVERING OUR PLAN: @ 2020DELIVERING OUR PLAN: @ 2020
Reinforce leading position in Italylevering on: Increase capacity in storage and
pretreatment through M&A operations
Partnership with EU big operators toenforcing market position
Increase presence on Italian Marketfor Hazardous Wte from 37% up to44% thank to technological optimizationof existing asset
Operational excellence:standardization of operating process andcreation of a global organization forcommercial development, target:developing new offers covering thewhole waste production
WASTE MARKET SEGMENT: INDUSTRIAL WASTE
230
+163
568
2015 2016 @2020
+174 kt Plants efficiencies :Wte Filago 25kt
Inertization plant Giussago 45ktSED platform revamping 95 kt
Other 9kt
+163kt from M&ALGH landfill 100kt (2016 completed)
LGH liquid waste treatment plant 63kt (2016completed)
BusinessPlan target400 kt
22
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
MAIN R&D PROJECTS
End of Waste for RDF
A2A (together with Buzzi Unicem) obtains
first registration @EU REACH product
database of RDF-EoW produced by
treatment of MSW
Strategic collaboration with Buzzi-Unicem
group as end user
New projects for implementing production
plants in direct connection with cement kilns
(50kt/y expected in 2018)
End of Waste for fly ashes
Finalized construction of a testing plant in
order to obtain inert material for
construction from WtE fly ashes and salt for
de-icing on streets
Ongoing preliminary testing
Testing physical /chemical characteristics of
products
If positive result of testing phase production
of industrial scale plants will be defined
A2A draws on a network of expertise focused on ensuring sustainable waste management byimplementing new technologies and process
Current target: development of a market for products
obtained with recycled material
Reaching end-of waste target to allow puttingon market recycled materials at any effect(legally and commercially) as ’products’.
23
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
Key player in the domestic market
Critical mass from a perimeter enlargement
Strong diversification along the value chain
Some excellences/competitive edge:
First operator in WtE
Higher value/technology for waste
collection, treatment and disposal
Tangible growth opportunities
Supportive domestic scenario for infrastructuredevelopment and consolidation
Strong commitment to Sustainability
Deliveringquality andgrowth toincrease
shareholdervalue
KEY INVESTMENT HIGHLIGHTS
24
This information was prepared by A2A and it is not to be relied on by any 3rd party without A2A’s prior written consent.
CONTACTS AND IR PRODUCTS
This document has been prepared by A2A solely for investors and analysts. This document does not constitute an offer or invitation to purchase or subscribe any shares or other securities and neither it nor any part of it shall form the basis of or be relied
upon in connection with any contract or commitment whatsoever. Some information contained herein and other material discussed at the meetings may include forward-looking information based on A2A’s current beliefs and expectations. These statements
are based on current plans, estimates, projections, and projects and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could
cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to changes in global economic business, changes in the price of certain commodities including electricity, gas and coal,
the competitive market and regulatory factors. Moreover, forward-looking statements are current only at the date on which they are made.
A2A Investor Relations Team
Mail: ir@a2a.eu
Phone: +39 02 7720 3974
http://www.a2a.eu/en/investor/
a2a
2016
InvestorGuidebook
InvestorDatabook(excel file)
Concise and thorough insight in the A2A Group in the form of a longpresentation divided into three main parts: Our World, Our Resultsand Our Responsibilities. The selected contents are all publiclyavailable information, which you may find spread across a largenumber of Company documents
• Historical economic, financial and operational company data as of2008 – on annual and quarterly basis
• Economic, financial and operational data useful for building A2Aearnings model – 2015 FY reported and 2016-20 BP forecast
• Tables of the Investor Guidebook mainly relevant to aquantitative analysis
Periodic update service for investors
and analysts on the significant steps of
A2A Business Plan – such as relevant
investments, new projects,
achievements, contracts, agreements.
If you wish to subscribe to the service,
please visit A2A website at the
following link
http://www.a2a.eu/en/investor/overvi
ew/newsletter/
Brief and synthetic document that shows the highlights and the strengthsof A2A business model
Moreover A2A publishes the following documents in the Investor Library Section on A2A website:• Overview of the Italian Energy Market (yearly basis)• Notes on energy and environmental markets (quarterly basis)Both documents are prepared by the Market Analysis, Modeling and Pricing Unit of A2A
Newsletter
Publications
The publications are available at the following link: http://www.a2a.eu/en/investor/guidebook/
a2a
2016
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