A2A unveils the new 2024-2035 Strategic Plan

Investment growth to strengthen the Group’s industrial resilience, thanks to the extraordinary results achieved in the first three years of the 2021-2030 Plan.

Businesses aligned with long-term trends to create sustainable value, ensuring financial soundness and returns for shareholders.

Infrastructures, people, businesses, decarbonisation and future-fit development are the key elements of the strategy.

Continued commitment to Italy’s ecological transition.

 

• 22 billion euros in CAPEX over 12 years of which:
  • 6 billion euros for the Circular economy
  • 16 billion euros for the Energy transition
• Over 70% of projects scheduled for completion by 2030 authorised or already in progress
• CAPEX eligible for European Taxonomy: 78% average over the Plan period
• RAB electricity networks at 3.4 billion euros at the end of 2035, with an average yearly growth rate of more than 10% thanks to new investments and expansion of the scope of operations
• EBITDA: 2.2 billion euros at 2026 and over 3.2 billion euros at 2035
• Over 40% of EBITDA at 2035 generated from regulated or low-volatility assets
• Ordinary net profit of 0.6 billion euros at 2026 and more than 1 billion euros at 2035
• Dividend policy: yearly growth of at least 3% over the Plan period
• NFP/EBITDA below 2.8x over the Plan period
• We confirm Group commitment to maintain the current rating
• Sustainable Debt: over 80% at 2026 and 100% at 2035

 

“Today we unveil a new Industrial Plan that looks ahead to 2035, a key year in Europe for ecological transition. The Group has demonstrated its ability to achieve significant industrial and economic goals, earlier than expected in the first 10-year Plan presented in January 2021. Building on these results, we have chosen a wider horizon to define an intermediate milestone towards the net zero target for the continent by 2050. We have increased investments to 22 billion euros, with 44% allocated to businesses with low volatility, for infrastructures dedicated to Circular economy and Energy transition, which are confirmed as the pillars of our strategy,” commented Renato Mazzoncini, CEO of A2A. “Our goal is to continue contributing to the country’s decarbonisation process through significant investments to support electrification of consumption, renewables development, closing the waste cycle, and improved water cycle efficiency. In this long term context, the extraordinary operation of 1.2 billion euros for the expansion of the power grid also fits, allowing us to reach a RAB of 3.4 billion euros by 2035, consolidating our position as Italy's second-largest operator and among the leaders in Europe for electricity distributed. We will be able to create sustainable value, ensuring financial soundness and returns for shareholders.”

 

Milan, 12th March 2024 – The Board of Directors of A2A, chaired by Roberto Tasca, has examined and approved the new 2024-2035 Strategic Plan, which relaunches and extends the Group's long-term industrial growth objectives.

The ecological transition is confirmed as the cornerstone of the Group's strategy, with the two pillars, Circular economy and Energy transition, guiding a 22-billion-euro CAPEX plan over 12 years, focusing on infrastructure, people and business, decarbonisation and future-fit development.

The outstanding performance of the last three years

The previous 2021-2030 Strategic Plan accelerated the Group's industrial growth, marking an important change of course from the past and achieving higher-than-expected financial targets. The average annual CAPEX in the first three years of the Plan were more than double those of the 2018-2020 period (1.6 vs. 0.7 billion euros), ordinary EBITDA grew to over 1.9 billion euros in 2023 (+63% vs. 1.2 billion euros in 2020) and ordinary net profit stood at 0.6 million euros (+90% vs. 0.3 million euros in 2020). The economic targets achieved are the result of the industrial and commercial effort that led A2A, in the three-year period 2021-2023, to grow and exceed what was forecast in the first 10-year Plan1 on several business KPIs, including the customer base (from 2.9 million in 2020 to 3.5 million customers in 2023 and +0.2 million vs. 2023P1), power generation capacity from renewable sources (RES) (from 0.1 in 2020 to 0.6 GW in 2023 and +0.2 GW vs. 2023P¹⁾ and the leakage reduction in the water cycle (from 20.2 in 2020 to 16.7 m3/km/day in 2023, less than the 18.3 planned for 2023P²). On the foundation of the extraordinary results achieved, the Group has decided to relaunch its ambitions to 2035 with a new Plan.

 

The vision of A2A, Life Company

In a context where climate change, pollution and the waste of resources are factors with an ever-increasing impact on the quality of life, A2A's responsibility and commitment as a Life Company is strengthened. With the aim of contributing to the achievement of national and international decarbonisation targets, the Group aims to increase its leadership in the electrification of consumption, the development of renewables and the circular economy.

Sustainability continues to define the strategy of the new Plan, with the aim of generating value, from an environmental, social and economic-financial point of view. One of the key points is to build infrastructures on our territories to involve and support people and businesses in the Energy transition and in virtuous models of Circular economy. Decarbonisation characterises the entire Plan: the 2030 target set in the first 10-year Plan (2021-2030) is confirmed and the 2035 target is reinforced, with a forecast of a 65% reduction in the Group's overall emission factor compared to the 2017 figure. A result that can be achieved thanks to concrete action, such as the reduction of Combined Cycle Generation (CCGT), the start-up of a carbon capture plant and the zeroing of Scope 2 emissions for energy purchases. The third key element of the Plan is the development in future-fit logic, which aligns investments with the main market macro-trends and optimises risk-return, focusing on businesses that will drive the future of the sector2.
About 90% of the cumulative CAPEX envisaged in the new Plan are allocated to future-fit activities that will generate 90% of the Group's EBITDA by 2035.

Relaunching ambition on the pillars of ecological transition

Total CAPEX of 22 billion euros, of which 10 billion euros in low-volatility businesses. The industrial commitment will make it possible to generate sustainable value, bringing EBITDA associated with the Circular economy businesses to 1 billion euros by the end of the Plan, and EBITDA generated in the area of Energy transition to over 2.2 billion euros. 
The Plan presents important elements of concreteness with more than 70% of the CAPEX foreseen by 2030 already authorised or in progress.

Furthermore, 78% of the CAPEX are eligible for the EU Taxonomy Regulation.

 

Towards greater circularity of materials and energy

As part of the Circular economy, the Group plans around 6 billion euros of CAPEX in waste treatment and closure of the waste cycle, integrated water cycle and district heating.

A2A aims to strengthen its national leadership in the environmental sector through the expansion and construction of new infrastructures for urban and industrial waste, arriving at treating over 7 million tonnes of waste in 2035 (from 5.5 million tonnes in 2023) thanks to approximately 4 billion euros of new CAPEX. In addition to the Group's ongoing commitment to zero landfill disposal, there is also the objective of favouring the closure of the waste cycle with its transformation into End-of-Waste products in the wood, plastic, ash, glass, paper and compost chains. A further line of development in the new Plan concerns the treatment of industrial waste, which, thanks to a new integrated and digitalised business and operating model, will increase the treatment to 2.4 million tonnes by the end of the Plan (from 1.1 million tonnes at 2023) thanks to about 1.4 billion euros of new CAPEX.

The protection of water resources is confirmed as a central element in the new Plan, on which the Group has invested heavily in recent years (130 euros per inhabitant served in 2023, about double the Italian average for 2022-23). The 700 million euros envisaged in the Plan will bring the RAB and EBITDA of the segment to 1 billion euros (from 0.5 billion euros at 2023) and over 100 million euros respectively by 2035.

Towards greater electrification of consumption and greener energy

A2A's commitment to the Energy transition will be expressed with 16 billion euros of CAPEX to support the electrification of consumption and the development of electricity distribution network, renewables and flexible energy.

In the electricity distribution sector, A2A will achieve important growth in size through an extraordinary transaction worth around 1.2 billion euros to acquire a large part of the network in the province of Milan and, in the Brescia area, Valtrompia, and part of the Brescia province: 17 thousand kilometres of electricity network, on which 800 thousand PODs and 60 primary  substations are located. The transaction is particularly strategic for the Group, as it focuses on future-fit assets in line with the EU Taxonomy, in areas adjacent to those already managed and where operational synergies can be activated. The deal will also make it possible to increase CAPEX by around 1.4 billion euros by 2035 on the electricity distribution network, to support the electrification of consumption and in line with the Strategic Plan and decarbonisation targets.

This acquisition is part of A2A's overall electricity network development strategy with 4 billion euros in planned CAPEX during the Plan period, which will enable A2A to generate 500 million euros in EBITDA by 2035 and consolidate its position as Italy's second-largest operator and among the top 20 in Europe for distributed electricity. The new perimeter outlined and the significant associated investments will allow RAB to increase from 1 billion euros in 2023 to 3.4 billion in 2035.

The Group's contribution to the country's Energy transition and decarbonisation will also be achieved with 4.6 billion euros in CAPEX dedicated to the development of a 5.7 GW RES portfolio by 2035, up by 3.1 GW compared to 2023, thanks to which more than 10 TWh of green energy will be produced by 2035. To achieve the planned growth, A2A can count on a wind and solar plant pipeline of over 1.8 GW, 83% of which are internally developed projects.

The generation portfolio, which is integrated and diversified both from a technological and a geographical point of view, continues to be a distinctive characteristic of the Group, enabling it to contain its risk profile and dynamically exploit the opportunities offered by the market, even as the energy context evolves. Thanks to these distinctive levers, A2A's energy management has managed to achieve a premium of roughly 10% on the national power price over the last seven years.

With the perspective of supporting people and businesses along the path of Energy transition, the Group intends to increase its customer base from 3.5 million in 2023 to over 5 million in 2035, with an offer increasingly focused on the electrification of consumption, thanks also to VAS³ and PPA⁴ (B2B and mass market). To support the growth of its customer base, A2A can count on the success of past acquisition campaigns, a multi-channel strategy, a consolidated reputation and customer satisfaction, elements that will enable it to achieve a market share increasing from 6% in 2023 to over 9% in 2035.

The Group is also committed to the decarbonisation of transport, with around 0.5 billion euros invested in the development of electric mobility: the recharging network will grow from 2,000 points in 2023 to 34,000 in 2035. The focus on locations with high saturation potential and the adoption of advanced technologies such as City Plug infrastructures will enable the Group to achieve EBITDA of around 200 million euros in this segment by 2035.

 

^{1 Value forecasted in the first 10-year 2021-30 Plan, presented in January 2021
2 These include: RES development, CCUS, Capacity Market and storage, electricity grids, e-mobility, material and energy recovery, hydroelectric generation, water cycle.
3 Value added services
4 Power Purchase Agreement}

Contacts:
Giuseppe Mariano
Media Relations, Social Networking and Web Manager

Silvia Merlo - Silvia Onni
Press Office
ufficiostampa@a2a.it
Tel. [+39] 02 7720.4583

Marco Porro
Investor Relations Manager
ir@a2a.it, Tel. [+39] 02 7720.3974

 

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