A2A Debt Investor Presentation
DISCLAIMERIMPORTANT NOTICE – STRICTLY CONFIDENTIALBy accessing this investor presentation, you agree to be bound by the following limitations.
This presentation has been prepared by A2A S.p.A. (“A2A” or the “Company”). This document has been prepared by A2A solely for investors and analysts. The information set out herein, includingforward looking statement, is current only as at the date of this document and is not intended to give any assurances as to future results and it may be subject to updating, revision, verification andamendment and such information may change materially. A2A is under no obligation to update or keep current the information contained in this presentation, including forward looking statement sand any opinions expressed in them is subject to change without notice. Market data used in the presentation not attributed to a specific source are estimates of the Company and have not beenindependently verified.
The content of this document is of purely informative and provisional nature and the statements contained herein have not been independently verified. This information is given in summary formand does not purport to be complete. Certain figures included in this document have been subject to rounding adjustments; accordingly, figures shown for the same category presented in differenttables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.A2A has not authorised the making or provision of any representation or information regarding A2A or its subsidiaries other than as contained in this document. Any such representation orinformation should not be relied upon as having been authorised by A2A. None of A2A or any of its respective affiliates, advisers or representatives shall have any liability whatsoever (in negligenceor otherwise) for any loss whatsoever arising from any use of this presentation or its contents, or otherwise arising in connection with this presentation.No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or theopinions contained herein.
The information in this presentation is confidential and this presentation is being made available to selected recipients only and solely for the information of such recipients. This presentation maynot be reproduced, redistributed or passed on to any other persons, in whole or in part. This presentation is for information purposes only and does not constitute or form part of, and should not beconstrued as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of A2A or its subsidiaries nor should it or any part of it form the basis of, or berelied on in connection with, any contract or commitment whatsoever. This presentation does not constitute a recommendation regarding the securities of A2A or its subsidiaries. This presentationand the information contained herein are not an offer of securities for sale in the United States and are not for publication or distribution to persons in the United States (within the meaning ofRegulation S under the United States Securities Act of 1933, as amended).This presentation is for distribution in Italy only to "qualified investors" (investitori qualificati), as defined pursuant to Article 100 of Legislative Decree no. 58 of 24 February 1998, as amended andrestated from time to time (the Financial Services Act), as implemented by Article 34-ter, paragraph 1(b) of CONSOB Regulation no. 11971 of 14 May 1999, as amended and restated from time totime. This presentation is being communicated in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19(5) of the FinancialServices and Markets Act 2000 (Financial Promotion) Order 2005 and to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as relevant persons).
Some information contained herein and other material discussed at the meetings may include forward-looking information based on A2A’s current beliefs and expectations. All statements otherthan statements of historical fact, contained herein regarding the A2A’ strategy, goals, plans, future financial position, results of operations future performance and business, projected revenues andcosts or prospects are forward-looking statements. Such statements may include, without limitation, any statements identified by the use of terminology such as "anticipates", "believes","estimates", "expects", "intends", "target", "aim", "may", "plans", "projects", "will", "can have", "likely", "should", "would", "could" and other words and terms of similar meaning or the negativethereof. These statements are based on current plans, estimates, expectations, projections and projects and therefore you should not place undue reliance on them. Forward-looking statementsinvolve 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 which may not be predicted or quantified or may be beyond the Company’s control include, but are not limited to changes in global economic business, changes in the price of certaincommodities 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.
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Million € 2017 2016 2015Revenues 5,910 5,093 4,921
Reported EBITDA 1,211 1,231 1,048
Ordinary EBITDA 1,135 1,033 1,022
Group net income 293 232 73
Group ordinary net income 413 377 278
CAPEX 450 349 317
Distributed Dividend 180 153 126
Dividend Yield (%) 4.1 4.2 3.8
Net Capital Employed 6,239 6,415 6,156
Net Financial Position -3,226 -3,136 -2,897
Net Equity 3,013 3,279 3,259
Market cap. (year-end) 4,831 3,853 3,929
Manpower (units) 11,280 13,494 12,083
FINANCIAL HIGHLIGHT
A2A Highlights
A2A is the Italy's largest local utility and the most diversified utility among local utilities.
The Group operates throughout Italy, predominantly in Lombardy
LARGEST TERRITORY
AGGREGATION
80
companies
Growth oriented multi-utility, delivered industrial and financial value
2017
NFP/EBITDA
2,7x
2017
D/E
1,1
4
1,231 1,211
2016 2017
EBITDA
-2%
232 293
2016 2017
GROUP NET INCOME
+26%
377 413
2016 2017
GROUP ORDINARY NET INCOME
+10%
1,033 1,135
2016 2017
ORDINARY EBITDA
+10%
349450
2016 2017
CAPEX
+101
REVENUES
+16%
5,0935,910
2016 2017
NET FINANCIAL POSITION
-226 +90
3,1362,910 316 3,226
2016 2017 Change ofperimeter
2017
0.0492 0.0578
2016 2017
DPS
17%€
2017 ACHIEVEMENTS
ORGANIC GROWTH
WASTEOngoing developments
in investments for treatment plants
MARKETFurther expansion of the free market
customer base
NETWORKSSuccessful participation
in the first gas distribution tender (Milano1)
GENERATIONSolid performance
of the generation fleet,in particular CCGT plants
EXTERNALGROWTH
LGH - 12M fully consolidation: strong synergies from
the industrial partnership
Set up of A2A Rinnovabili and M&A
First step in PV Renewables
Northern Lombardy Multiutility: Start of the partnership project
Geographical focus: sale of stake
in Montenegrin EPCG
2017 Bulletin Board: shaping the future today
€M
5
9M 2018 Consolidated Results
A2A consolidates the accounts of ACSM-AGAM group on a line-by-line basis, starting from July 1, 2018.
The ACSM-AGAM group is the multi-utility company of Northern Italy resulting from the combination of the Como, Monza, Lecco, Sondrio and Varese public utility companies.
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A2A FORMS PART OF THE FOLLOWING INDICES
FTSE MIB
STOXX Europe
EURO STOXX
MSCI Europe Small Cap
WisdomTree Utilities
S&P Developed Ex-US
ETHICAL INDICES
ECPI Euro ESG Equity
Ethibel Sustainability Index Excellence Europe
EURO STOXX Sustainability Index
Euronext Vigeo Europe 120
Solactive Climate Change Index
Standard Ethics Italian Index
A2A 2017 figures (Borsa Italiana)
Shareholding structure listed in Milan Stock Exchange
Municipality of Milan and Brescia: shareholding pact on 42%
Indices
Moreover, A2A has been included in the Ethibel Excellence Investment Register and in the Ethibel Pioneer Investment Register.
AT DECEMBER 31, 2017
MUNICIPALITY OF BRESCIA
MUNICIPALITY OF MILAN
MARKET
TREASURY SHARES
49.2
25.0
%
25.0
0.8MARKET CAPITALISATION AT DECEMBER 29, 2017:
€ 4,831 m
AVERAGE CAPITALISATION € 4,455 m
AVERAGE VOLUMES 9,729,351
AVERAGE PRICE: 1.422 €/share
MAXIMUM PRICE: 1.635 €/share
MINIMUM PRICE: 1.232 €/share
NUMBER OF SHARES: 3,132,905,277
Tickers: Bloomberg – A2A:IMReuters – A2.MI
A2A stock is also traded on the following platforms: Chi-X, BATS, Turquoise, Equiduct, Sigma-X, Aquis, BOAT OTC, LSE Europe OTC, BATS Chi-X OTC
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A2A at a glance Well Balanced Business Mix
2017Ordinary
EBITDA (1)
WASTE MARKET(2)NETWORKS GENERATION
& TRADINGNETWORKS HEAT
1st energy producerfrom WTE plants
Leader for quality and customer satisfaction
Incumbent in the key areas
1st domestic operator
2 GW hydro installed capacity
251€M 22% 173
€M 15% 309€M 26% 78 €M 7% 353
€M 30%
Collection and street sweeping
Electricity and gas sales• free market
• regulated market
Electricity distributionCogeneration heat recovery
and sales
Fuel sourcing
Urban Waste Treatment Material Recovery
Electricity andHeat production
Public Lighting Gas distribution
HeatDistribution
Power generation (Thermoelectric
and RES)
Industrial Waste Treatment
New Energy Solutions (Energy Efficiency,
E-mobility and Smart City)
Integrated Water Cycle
Whole-sale & Trading
(1) Ordinary EBITDA Equal to 1,164 €M, calculated as Reported EBITDA (1,211 €M) net of non recurring items (64 €M), EBITDA from “Corporate” (-29 €M), EBITDA from EPCG (12 €M). Put option on EPCG stake was exercised by A2A in July 2017
(2) New perimeter of the old Energy Retail BU, including also Energy Efficiency, Public Lighting, Smart City and E-Mobility.
VALUE FROM ENDTO BEGINNING
MORE SOLUTIONSTO INVOLVE CUSTOMERS
SMARTER AND MORE RELIABLE
FLEXIBLE AND GREENER ENERGY
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A2A at a glance Italian Geographical Presence
G
G
G
G
G
WASTEWaste collection
Treatment plants
Biogas/Biomass plants
Waste-to-Energy
E
G
W
PL
C
DH
NETWORKSElectricity
Gas
Water
Public Lighting
Cogen. & thermal plants
Thermal solar plants
District Heating
A2A operates throughout Italy, predominantly in LombardyG
PL
G
DHE G
W
G W
E G
E
DH
G
G DH
DH
DH
DH
G
G
PL
PL
PL
C
C
C
C
C
C
C
C
C
C
DH
GENERATIONHydroelectric
CCGT
Coal
Fuel Oil
Solar
Technological partnerships abroad on waste treatment plants (UK, Spain and Greece)
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A2A growth – Acquisition Strategy on PV plants
Lombardia 1 MW
Piemonte 2,9 MW
Trentino AA 0.6 MW
Sicilia 0,9 MW
Emilia Romagna 8 MW
Marche 17,8 MW
Toscana 0,9 MWPuglia 15,6 MW
Lazio 6,5 MW
NOVAPOWER
REENERGY
IMPAX
• October 2017• 17,8 MW• 16 plants• 8 SPV• EBITDA 7€M
• September 2017• 17 MW• 18 plants• 5 SPV• EBITDA 6€M
• February 2018• 15,7 MW• 5 plants• 5 SPV• EBITDA 6€M
TALESUN potential acquisition
• term sheet November 2018• 43,2 MW• 39 plants• 9 SPV• EBITDA 9€M• Potential joint venture
Portfolio of 43 PV plants
Total installed power 54,1MWp
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NORTHERN LOMBARDY
MULTIUTILITY
Benefits of industrial partnership:
• Sharing technical and management skills
• Optimization of industrial
and financial position
Preservation of the identity of existing
companies
Enhancement of investment capacity
Improvement of quality standards
and service level
ASPEMLARIO RETI HOLDING
AEVV
A2A
LGH
ACSM-AGAM
Industrial entities strongly rooted in our territory
~60-70 €M net additional EBITDA fully consolidated
Almost complete coverage of Lombardy
Open to new aggregation opportunities
A2A growth – Aggregation Strategy
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A2A is a large group of companies
A2A GENCOGAS100%
GENERATION
A2A ENERGIEFUTURE100%
LINEA GREEN (1)
100%
A2A ALFA70%
ERGOSUD50%
PREMIUMGAS50%
A2A ENERGIA100%
A2A ENERGY SOLUTIONS100%
A2A ILLUMINAZIONE PUBBLICA
100%
LINEA PIÙ (1)
100%
METAMER50%
LUMENENERGIA92,7%
CONSUL SYSTEM75%
MARKET
A2A AMBIENTE100%
LINEA AMBIENTE (1)
100%
LINEA GESTIONI (1)
100%
AMSA100%
LOMELLINA ENERGIA80%
APRICA100%
WASTE
A2A CICLO IDRICO100%
A2A CALORE E SERVIZI100%
ASPEM90%
PROARIS60%
UNARETI SERVIZI METRICI
100%
NETWORKS
LD RETI (1)
90,85%
UNARETI100%
RETRAGAS91,6%
ASVT74,8%
CAMUNA ENERGIA89%
A2A SMART CITY100%
SMART CITYACSM - AGAM (2)
45,33%
LINEA GROUP HOLDING51%
OTHER COMPANIES LINEA COM
96,17%
(1) Shareholdings held through Linea Group Holding S.p.A.(2) ACSM-AGAM shares at the end of Sell-Out Procedure (as of 25 October 2018)
The Group includes: 80 companies @30.09.18Starting from July 2018, aggregation of Northern Lombardy Multiutility
A2A ENERGIE RINNOVABILI
100%
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Financial Strategy: Cost reduction and high duration
DEBT STRUCTURE AND MATURITY
DEBT BREAKDOWN BY INTEREST at 31/12/2017
BONDSLOANS
DEBT BREAKDOWN BY SOURCE at 31/12/2017
VARIABLE RATEFIXED RATE
82
STATISTICS RELATING TO DEBT AT 31/12/2017
DEBT ITEMSmillion euro
ACCOUNTING BALANCE
31/12/2016
ACCOUNTING BALANCE
31/12/2016
PORTIONSMATURINGWITHIN 12 MONTHS
PORTIONSMATURINGBEYONDS
12 MONTHS
PORTION MATURING IN
31 dic 2019 31 dic 2020 31 dic 2021 31 dic 2022 beyond
BONDS 2,527 2,995 345 2,650 509 0 350 498 1,293
BANK LOANSAND OTHER 1,268 943 92 851 90 138 89 86 448
TOTAL 3,795 3,938 437 3,501 599 138 439 584 1,741
%
18
24
76%
FLEXIBILITY
FINANCIAL STRATEGY
provide the Company with the right instruments to take potential
market opportunities, in a prompt and efficient way
DIVERSIFICATIONoptimize financial sources
and assess/select at any time the most economical and/or best
available
LIQUIDITYmaintain an adequate liquidity
buffer in terms of cash and available committed lines to cover planned
cash outlays and absorb low-probability events
RISK MANAGEMENTmanage in a proactive way
the interest risk with the main purpose to mitigate the effects
of market volatility
TOTAL GROSS DEBT 3.9 €Bn
AVERAGE COST OF DEBT ~ 3.1%
AVERAGE MATURITY 5.2 yrs
LIQUIDITY POSITIONof which:CASHUNDRAWN COMMITTED LINES AND LOANS
1.4 €Bn
0.7 €Bn0.7 €Bn
STATISTICS RELATING TO DEBT AT 30/09/2018*
TOTAL GROSS DEBT 3.9 €Bn
AVERAGE COST OF DEBT ~ 3.0%
AVERAGE MATURITY 4.5 yrs
LIQUIDITY POSITIONof which:CASHUNDRAWN COMMITTED LINES AND LOANS
1.7 €Bn
1.1 €Bn0.6 €Bn
*Does not include ACSM-AGAM
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Bonds and EMTN Programme
On 1 March 2018 the Board of Directors of A2A approved a framework resolution (i) revoking for the portion not performed the resolution previously taken on 10 November 2016 and (ii) authorising the issue of one or more unsubordinated, unsecured and non-convertible notes, under the EMTN Programme, up to an aggregate amount of Euro 1 billion, by 30 April 2020.
The bonds to be issued on the basis of the Programme are placed to institutional investors
Liability management executed to optimized debt duration and cost of debt
The adoption of the EMTN is part of the A2A Group’s medium-term financial strategy, which is aimed at lengthening the average life of the Company’s outstanding debt and at maintaining an adequate financial flexibility in order to efficiently manage the future debt maturities, to support the Company’s rating
Program amounts to 4 billion, of which 1,438 million euro still available as of today.
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October 2017
• ISSUE of a ten-year bond for a total amount of 300 million euro under the Euro Medium Term Notes Programme.
• TENDER OFFER over A2A outstanding €750,000,000 4.500 per cent. Notes due 28 November 2019 (of which €510,703,000 remain outstanding) and its outstanding €500,000,000 4.375 per cent. Notes due 10 January 2021 (of which €351,457,000 remain outstanding)
Debt maturities breakdown
Recent capital markets transactions
343
2018
602
139299
44
2019
440
586
385365 365
50
348
254
91 139 89 86 85 65 65 50 48 145
2020
511
351
500
300 300 300 300 109
2021 2022 2023 2024 2025 2026 2027 Beyond2027
LoansBonds A2ABonds LGH
March 2017
Private placement with a limited number of qualified investors Euro 300 million notes with a seven-year maturity due in March 2024, under its Euro Medium Term Notes Programme.
December 2016TENDER OFFER over A2A outstanding €750,000,000 4.500 per cent. Notes due 28 November 2019 and its outstanding €500,000,000 4.375 per cent. Notes due 10 January 2021
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Bonds and EMTN Programme
Issue quantity(EUR)
Outstandingamount (EUR)
Annualcoupon Issue date Maturity date Issue price Re-offer
yield
Euro Bond 2027 300,000,000 300,000,000 1.625% 19/10/2017 19/10/2027 98.700 1.768%
Euro Bond 2025 300,000,000 300,000,000 1.750% 25/02/2015 25/02/2025 99.221 1.836%
Private Placement 2024 300,000,000 300,000,000 1.250% 16/03/2017 16/03/2024 99.774 1.284%
Private Placement 2023 300,000,000 300,000,000 4.000% 04/12/2013 04/12/2023 99.539 4.057%
Euro Bond 2022 500,000,000 500,000,000 3.625% 13/12/2013 13/01/2022 99.561 3.688%
Euro Bond 2021 500,000,000 351,457,000 4.375% 10/07/2013 10/01/2021 99.323 4.487%
Euro Bond 2019 750,000,000 510,703,000 4.500% 23/11/2012 28/11/2019 99.718 4.548%
Euro Bond 2018 (LGH) 300,000,000 299,500,000 3.875% 28/11/2013 28/11/2018 99.444 4.000%
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Rating overview
Moody's upgrades A2A S.p.A.'s ratings to Baa2; stable outlook, April 2018.
The rating action reflects:
• A2A's track record of improved financial and operating performance as evidenced by funds from operations (FFO)/net debt and retained cash flows (RCF)/net debt ratios in 2017 of 25.8% and 21.3% (vs. 16.8% and 14.1% in 2014), respectively;
• the increase in baseload power prices since early 2016 which will gradually filter through the company's earnings;
• A2A's commitment to maintaining credit quality and Moody's view that the company has flexibility to mitigate unexpected negative pressures […]and maintain metrics in line with the ratio guidance for the Baa2 rating.”
A2A’s rating reflects:
Business Risk: SATISFACTORY
Expectation that the company will continue to strengthen its positions in regulated and more stable activities, while posting funds from operations (FFO)to debt above 20% over 2018-2019” and “successful cost reduction plan with €130 million of cost savings already achieved over 2015-2017
Liquidity: STRONG
The group's liquidity as strong, based on our view of the group's proactive financing and healthy cash flow generation and A2A has sound bank relationships, prudent financial discipline, and proven access to the debt capital markets
Rating: Baa2, Not on Watch
Rating: BBB/Stable/A-2
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Enterprise Risk Model supports management actionsThe Risk Management Model – Process and Activities
REGULAR IDENTIFICATION AND UPDATING OF THE RISKS to which the Group is exposed
RISK ASSESSMENT PROCESS carried out through the involvement of all Group structures, risk owners and risk specialists, which includes:
• update of risk scenarios related to activities
• risk scoring
• establishment of the relative controls and mitigation plans
DEFINITION OF RISK PRIORITIES AND RISK REPORTING submitted to the top management for approval
CONSTANT MONITORING OF MITIGATING ACTIONS PROGRESS, to check their effectiveness on risks mitigation and prevention
BALANCE SHEET DISCLOSURE (“Bilancio Integrato” under the D.Lgs 254/2016 regulation)
1 2 3 4 5
The methodology adopted is characterized by the following steps:
The A2A Group has a risk assessment and reporting process which is based on the Enterprise Risk Management method(1) and on the best risk management practice, in compliance with the Corporate Governance Code. The model, operative since 2010 and far from being a static reference, is subject to periodic revision consistent with the evolution of the Group and the context in which it operates.
RISK – External, Internal and Strategic Risk
CHANGES IN LAWS AND REGULATIONS
MACRO-ECONOMIC SITUATION
BUSINESS INTERRUPTION COMMODITY PRICECOUNTERPARTY
CREDIT RISKINTEREST
RATELIQUIDITY RATING
DEFAULT AND COVENANT
ACQUISITIONS, INTEGRATION AND BUSINESS COMBINATION
LEGAL PROCEEDING NATURAL EVENTS ENVIRONMENTALTENDER AND
CONCESSIONSICT INFRASTRUCTURE AND
SECURITY
SOCIAL AND ENVIRONMENTAL
CONTEXT
FISCAL AND TAX-RELATED
COMPLIANCE
(1) This method follows the framework set by the Committee of Sponsoring Organizations of the Treadway Commission (CoSO report)
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New strategic Guidelines
a2a T
2018 2022
TTransformation
a2a E
2018 2022
EExcellence
a2a C
2018 2022
CCommunity
Business strengthening & change agile organization,leader in operational excellence
attract and empower people engageexternal ecosystem
Sustainabilityinspiring priciple of enterprise development
Over 350 innovation concepts evaluatedwill be translated into the experimentation of about 50 new initiatives
A2A will make a significant effortto undertake, in its 4 reference businesses, the transformation actions necessary to respond to the identified market trends (detailed plan in the next pages)
Starting from the positive experience of the EN&A Project, the Mistral Project has been launched: focus on operational excellence through a bottom-up redesign of processes and the transformation of the managerial culture. Moreover, strong boost in Capex for digitalization and technological innovation (>500 €M in the period)
from
toREGENERATIONActive role in the energy market transformation
RELAUNCHConsistent industrial growth
Selective external growth
RESHAPEPublic lighting, smart city,
energy efficiency
2017-2021
19
A2A Sustainability embedded in the Strategic Plan
GENERATION MARKET WASTE NETWORKS60+ core goals built on our sustainability pillars
• The shift to a traditional governance model, occurred in June 2014, facilitates decision making and emphasizes the central role of the Board of Directors
• 100% executives with sustainability MBOs (weight increased from 5% to 10% for the CEO/Managing Director)
• A2A adopts a prudent energy risk policy, part of its ERM model, whose purpose is to further develop and integrate risk management into the business process
% sorted collection
New recycling plants
Project on reduction/ reuse/recycle
Water network losses
Depurated waste water
Digital users
# LED lighting points
EV charging stations
Contact centre quality
Smart bins Smart meter
Service interruption
Smart grid
GOVERNANCE
CO2 emissions reduction Energy efficiency projects
Green energy sold to Mass Market
Low-impact vehicles DH users
Dispersed heat recovery and DH non-fossil sources
Smart city projects
Banco dell’Energia step 2
Roadwork siteinspections
Reduction of the accident rate
Environmental education
CIRCULAR ECONOMY
DECARBONIZATION
SMART GRID AND SERVICES
PEOPLE INNOVATION
E
S
G
Integration of Sustainability Plan and Financial BP @2022 in line with 2030 sustainability goals
August 2018 - A2A signs the first Credit Line in Italy linked to the Group’s Sustainability Policy and the Standard Ethics Rating
20
A2A Sustainability embedded in the Strategic Plan
100
8284
31
CIRCULAR ECONOMY
MATERIAL RECOVERY RATEIN A2A PLANTS ON TOTAL WASTE COLLECTED
2015 2016 2017 2022
%
394
419420
445
DECARBONIZATION
CO2 /kWh CARBON INTENSITY
2015 2016 2017 2022
550
356269227
SMART GRID AND SERVICES
ONLINE MEMBERS OF A2A ENERGIA COMMUNITY
2015 2016 2017 2022
20
550
PEOPLE INNOVATION
SMART WORKING% on total employees applicable
2015 2016 2017 2022
g/kWh
k %
21
A2A Asset Portfolio
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Net Financial Position
A2A strong Commitment to Sustainability
Data Annexes
Financial Report and Economic data and News are all available on A2A website:
http://www.a2a.eu/en/investor/
22
A2A Asset Portfolio as of 31 December 2017
23
Consolidated Income Statement
Note: Group net income adjusted for the impact of extraordinary items: 2017 = 413 €M; 2016 = 377 €M.
(1) The figures at December 31, 2016 include the economic effects deriving from the LGH Group’s PPA and the reclassification for the purposes of IFRS 5 of the EPCG Group’s income statement items.
(2) EPCG not included in Group EBITDA as of 2016 restated results
24
Consolidated Balance Sheet
25
Consolidated Net Financial Position
26
A2A strong Commitment to Sustainability
Listening to the needs of stakeholders in the various territories in which A2A operates. Identification of the material aspects for planning and reporting
Definition of a Sustainability Policy with objectives through to 2030 and a Sustainability Plan integrated with the Business Plan. The Policy is based on 4 pillars, crucial to A2A’s business and consistent with the international approach given by the UN
Reporting to external stakeholders during focussed meetings or through the Integrated Report and Territorial Sustainability Reports
Implementation of practices and adoption of instruments that are consistent with the sustainability goals prefixed in the value creation process
• Stakeholder Engagement: more than 270 initiatives involving external and internal stakeholders. The forumAscolto programme, the multistakeholder feedback initiative launched by A2A in 2015 aimed at understanding the needs of the communities where it operates, continued in 2017
• Materiality Evaluation: A2A Group materiality matrix was updated
A2A has an active participation in national and international associations and networks on matters of sustainable development.
WINNER IN 2017
SUSTAINABILITY NETWORKS
Circular Economy: Sustainably manage wasteduring its life cycle
Decarbonization: Contribute to achieving national and EU targets for the reduction of greenhouse gas emissions
Smart grid and services: Increase grid reliability through technological innovation
People Innovation: Actively contribute to the welfare of the community and the improvement of working conditions
INVESTMENTS CLASSIFICATION
GENERATION & TRADING
NETWORKSAND HEAT
WASTE CORPORATE TOTAL
EmissionReduction
2.1 4.6 6.4 - 13.1
Energyefficiency
0.4 4.1 25.8 - 30.3
Renewables 13.2 5.3 7.6 - 26.1
Innovation 0.5 - 7.7 0.4 8.6
Total 16.2 14 47.5 0.4 78.1
Governance and Tools• Sustainability Policy• Territory and Sustainability Committee: the Committee has the task to assist with
information, advice and proposals the Board of Directors,the Chairman and CEO of the Group in defining guidelines, orientations and initiatives
• Code of Ethics • Organisation, Management and Control Model (according to 231/01 Law)• Policy for Quality, Environment and Safety and Systems for their Management• Sustainability Issues for Risk Management: Climate Change impacts
INTEGRATED REPORTA2A 2017 Integrated Report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards and, for some indicators, it complies with GRI-G4 Electric Utilities Sector Supplement. The Report considers six forms of capital (Human, Financial, Relational, Intellectual, Manufacturing and Natural), in accordance with the International Integrated Reporting Council (IIRC) framework.
Moreover, in 2015, A2A began, first in Italy, publishing sustainability reports with reference to the specific territories in which it operates, undertaking a path toward the community and extending its stakeholder engagement model. During 2017 six Territorial Sustainability Reports were published (Milan, Brescia, Bergamo, Varese, Valtellina and Valchiavenna and Friuli Venezia Giulia).
The Integrated Report 2017 is available on A2A website