Half-Yearly Financial Report June 30, 2018 2018 Half-Yearly Financial Report at June 30, 2018
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June 30, 2018 June Half-yearly financial report Half-yearly financial report June 30, 2018 2018 Half-yearly financial report at June 30, 2018 These Financial Statements are available at the website www.a2a.eu 1 Contents Corporate boards 5 1 Key Figures of the A2A Group Business Units 8 Geographical areas of activity 10 Group structure 12 Financial highlights at June 30, 2018 13 Shareholdings 16 A2A S.p.A. on the Stock Exchange 17 Alternative Performance Indicators (APM) 19 2 Consolidated results and report on operations Summary of results, assets and liabilities and financial position 24 Significant events during the period 33 Significant events after June 30, 2018 35 Outlook for operations 37 3 Consolidated financial statements Consolidated balance sheet 40 Consolidated income statement 42 Consolidated statement of comprehensive income 43 Consolidated cash-flow statement 44 Statement of changes in Group equity 46 Detail of the balance sheet highlighting the first-time consolidation effect of 2018 acquisitions 49 Consolidated balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010 50 Consolidated income statement pursuant to Consob Resolution no. 17221 of March 12, 2010 52 4 Notes to the Half-yearly financial report General information 54 Half-yearly financial report 55 Financial statements 56 Basis of preparation 57 Changes in international accounting standards 58 Scope of consolidation 61 Consolidation policies and procedures 62 Seasonal nature of the business 67 Summary of results sector by sector 68 Notes to the balance sheet 72 Net debt 92 Notes to the income statement 95 Earnings per share 103 Note on related party transactions 104 Significant non-recurring events and transactions 107 Guarantees and commitments with third parties 109 Other information 110 2 A2A Half-yearly financial report at June 30, 2018 5 Attachments to the notes to the Half-yearly financial report 1. Statement of changes in tangible assets 136 2. Statement of changes in intangible assets 138 3. List of companies included in the consolidated financial statements 140 4. List of shareholdings in companies carried at equity 144 5. List of available-for-sale financial assets 146 6 Evolution of the regulation and impacts on the Business Units of the A2A Group Generation and Trading Business Unit 151 Market Business Unit 154 Waste Business Unit 156 Networks and District Heating Business Unit 160 International Business Unit 169 7 Scenario and market Macroeconomic scenario 172 Energy market trends 174 8 Result sector by sector Result sector by sector 178 Generation and Trading Business Unit 180 Market Business Unit 183 Waste Business Unit 185 Networks and District Heating Business Unit 187 International Business Unit 189 A2A Smart City 190 Corporate 191 9 Risks and uncertainties Risks and uncertainties 194 10 Sustainability responsible management Sustainability responsible management 208 11 Certification of the condensed half-yearly financial statements pursuant to art. 154-bis, paragraph 5 of Legislative Decree no. 58/98 Certification of the condensed half-yearly financial statements pursuant to art. 154-bis, paragraph 5 of Legislative Decree no. 58/98 212 12 Independent Auditor’s Report 213 This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2018” and has been prepared solely for the convenience of international readers. In the event of any ambiguity the Italian text will prevail. The Italian original is available on the websitewww.a2a.eu . 3 A2A Half-yearly financial report at June 30, 2018 Corporate boards Corporate boards BOARD OF DIRECTORS CHAIRMAN Giovanni Valotti DEPUTY CHAIRMAN Alessandra Perrazzelli CEO AND GENERAL MANAGER Luca Camerano DIRECTORS Giambattista Brivio Giovanni Comboni Enrico Corali Luigi De Paoli Alessandro Fracassi Maria Chiara Franceschetti Guadiana Giusti Secondina Giulia Ravera Norberto Rosini BOARD OF STATUTORY AUDITORS CHAIRMAN Giacinto Gaetano Sarubbi STANDING AUDITORS Maurizio Leonardo Lombardi Chiara Segala ALTERNATE AUDITORS Sonia Ferrero Stefano Morri INDEPENDENT AUDITORS EY S.p.A. 5 1 Key figures of the A2A Group 1 Key figures of the A2A Group Business Units The A2A Group operates in the production, sale and distribution of gas and electricity, district heating, environmental services and the integrated water cycle. These sectors are in turn attributable to the “Business Units” specified in the following scheme identified following the reorganization made by management: Generation International and Trading • Provision of know-how and technologies for the • Thermoelectric and construction of waste hydroelectric plants pre-treatment plants • Energy Management A2A Smart City Market • Telecommunication • Sale of Electricity services and Gas • Energy efficiency • Electric mobility Corporate • Public lighting • Corporate services Waste • Waste collection and street sweeping • Treatment • Disposal and energy recovery Networks and District Heating • Electricity networks • Gas networks • Integrated water cycle • District Heating services • Heat management services This breakdown into Business Units reflects the organization of financial reports regularly analyzed by management and the Board of Directors in order to manage and plan the Group’s business. 8 A2A Half-yearly financial report at June 30, 2018 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2018 Shareholdings A2A S.p.A. on the Stock Exchange Alternative Performance Indicators (APM) 1 Key figures of the A2A Group Geographical areas of activity Hydroelectric plants Thermoelectric plants Cogeneration plants Waste treatment plants Photovoltaic plants Technological partnerships Updated to June 30, 2018 10 A2A Half-yearly financial report at June 30, 2018 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2018 Shareholdings A2A S.p.A. on the Stock Exchange Alternative Performance Indicators (APM) 11 1 Key figures of the A2A Group 100.00% 50.00% A2A gencogas Ergosud Group 100.00% structure A2A Energiefuture 100.00% A2A Rinnovabili 100.00% (1) Generation and Trading Linea Energia Market 70.00% 50.00% Waste A2A Alfa PremiumGas 92.70% Networks and District Heating LumEnergia International 100.00% A2A Energia A2A Smart City 50.00% Metamer Other Companies 100.00% 75.00% A2A Energy Solution Consul System 100.00% Linea Più(1) 100.00% Amsa 100.00% A2A Ambiente 100.00% Aprica 100.00% 80.00% Linea Ambiente(1) Lomellina Energia 100.00% Linea Gestioni(1) 100.00% A2A Ciclo Idrico 100.00% A2A S.p.A. A2A Calore & Servizi 90.00% Aspem 60.00% Proaris 100.00% Linea Reti e Impianti(1) 90.85% LD Reti(1) 100.00% DEC Distribuzione Elettrica Cremona(1) 100.00% 100.00% Unareti Unareti Servizi Metrici 100.00% A2A Illuminazione Pubblica 91.60% Retragas 89.00% Camuna Energia 74.80% ASVT (1) Shareholdings held through Linea Group Holding S.p.A. (held 51.00%). 100.00% A2A Smart City This chart shows the most 51.00% significant shareholdings Linea Group Holding of the A2A Group. See attachments 3, 4 and 5 for full details of shareholdings. 23.94% ACSM-AGAM 12 A2A Half-yearly financial report at June 30, 2018 Financial highlights at June 30, 2018 (**) 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2018 Shareholdings A2A S.p.A. on the 3,081 657 Stock Exchange millions of euro millions of euro Alternative Performance REVENUES GROSS OPERATING Indicators (APM) INCOME 267 millions of euro RESULT OF THE PERIOD Income statement figures 01 01 2018 01 01 2017 millions of euro 06 30 2018 06 30 2017 Reported Revenues 3,081 2,804 Operating expenses (2,090) (1,841) Labour costs (334) (326) Gross operating income - EBITDA 657 637 Depreciations, amortization, provisions and write-downs (221) (204) Net operating income - EBIT 436 433 Result from non-recurring transactions 6 - Financial balance (54) (59) Result before taxes 388 374 Income taxes (120) (119) Net result from discontinued operations 4 (94) Minorities (5) (4) Group result of the period 267 157 Gross operating income/Revenues 21.3% 22.7% (**) The figures serve as performance indicators as required by CESR/05/178/B. 13 1 Key figures of the A2A Group Balance sheet figures 06 30 2018 12 31 2017 millions of euro Net capital employed 6,134 6,239 Equity attributable to the Group and minorities 3,104 3,013 Consolidated net financial position (3,030) (3,226) Consolidated net financial position/Equity attributable to the Group and minorities 0.98 1.07 Financial data 01 01 2018 01 01 2017 millions of euro 06 30 2018 06 30 2017 Net cash flows from operating activities 584 422 Net cash used in investing activities (175) (171) Free cash flow (Cash Flow Statement figure) 409 251 Key indicators 06 30 2018 12 31 2017 Average 6-month Euribor (0.272%) (0.247%) Average price of Brent (US$/bbl) 71.1 52.8 Average of the PUN (Single Nationwide Price) Base load (Euro/MWh) 53.8 51.2 Average of the PUN (Single Nationwide Price) Peak load (Euro/MWh) 60.5 57.4 Average price of coal (Euro/tonne) 72.8 72.9 Average price of gas to the PSV (*) (Euro/MWh) 22.4 19.3 Average price of emission certificates EU ETS (**) (Euro/tonne) 12.1 5.0 (*) Price of gas of reference for the Italian market (**) EU Emissions Trading System 14 A2A Half-yearly financial report at June 30, 2018 1 Group’s key operational indicators 06 30 2018 06 30 2017 Key Figures of the A2A Group Business Units Generation and Trading Geographical Thermoelectric production (GWh) 5,865 4,775 areas of activity Hydroelectric production (GWh) 2,086 1,640 Group structure Financial Electricity sold to wholesale customers (GWh) 5,231 3,387 highlights at June Electricity sold on the Power Exchange (GWh) 6,435 5,914 30, 2018 Market Shareholdings A2A S.p.A.