Half-Yearly Financial Report 2019 Is Presented in Millions of Euro; the Euro Is Also the Functional Currency of the Economies in General Which the Group Operates
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2019 Half-yearly financial report June 30, 2019 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 Half-yearly financial report at June 30, 2019 These Financial Statements are available at the website www.a2a.eu 1 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 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, 2019 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 32 Significant events after June 30, 2019 34 Outlook for operations 35 3 Consolidated financial statements Consolidated balance sheet 38 Consolidated income statement 40 Consolidated statement of comprehensive income 41 Consolidated cash-flow statement 42 Statement of changes in Group equity 44 Detail of the balance sheet highlighting the first-time consolidation effect of 2019 acquisitions 46 Consolidated balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010 48 Consolidated income statement pursuant to Consob Resolution no. 17221 of March 12, 2010 50 4 Notes to the Half-yearly financial report General information 52 Half-yearly financial report 53 Financial statements 54 Basis of preparation 55 Changes in international accounting standards 56 Scope of consolidation 57 Consolidation policies and procedures 58 Seasonal nature of the business 63 Summary of results sector by sector 64 Notes to the balance sheet 68 Net debt 88 Notes to the income statement 91 Earnings per share 99 Note on related party transactions 100 Significant non-recurring events and transactions 103 Guarantees and commitments with third parties 104 Other information 105 2 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 A2A Half-yearly financial report at June 30, 2019 5 Attachments to the notes to the Half-yearly financial report 1. Statement of changes in tangible assets 132 2. Statement of changes in intangible assets 134 3. List of companies included in the consolidated financial statements 136 4. List of shareholdings in companies carried at equity 142 5. List of holdings in other companies 145 6 Evolution of the regulation and impacts on the Business Units of the A2A Group Generation and Trading Business Unit 150 Market Business Unit 160 Waste Business Unit 162 Networks and District Heating Business Unit 166 International Business Unit 177 7 Scenario and market Macroeconomic scenario 180 Energy market trends 183 8 Result sector by sector Result sector by sector 186 Generation and Trading Business Unit 188 Market Business Unit 191 Waste Business Unit 193 Networks and District Heating Business Unit 195 International Business Unit 197 A2A Smart City 198 Corporate 199 9 Risks and uncertainties Risks and uncertainties 202 10 Sustainability responsible management Sustainability responsible management 216 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. 58/98 220 12 Independent Auditor’s Report 221 This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2019” 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 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 A2A Half-yearly financial report at June 30, 2019 Corporate boards Corporate boards BOARD OF DIRECTORS CHAIRMAN Giovanni Valotti DEPUTY CHAIRMAN Stefania Bariatti CEO AND GENERAL MANAGER Luca Camerano DIRECTORS Giambattista Brivio Giovanni Comboni Enrico Corali Luigi De Paoli Alessandro Fracassi Maria Chiara Franceschetti Gaudiana 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 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 1 Key figures of the A2A Group WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 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 Market A2A Smart City • Development • Sale of Electricity and management and Gas of technological • Energy efficiency infrastructures for • Electric mobility integrated digital services • Public lighting Corporate Waste • Corporate services • 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 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 A2A Half-yearly financial report at June 30, 2019 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2019 Shareholdings A2A S.p.A. on the Stock Exchange Alternative Performance Indicators (APM) 9 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 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, 2019 10 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 A2A Half-yearly financial report at June 30, 2019 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2019 Shareholdings A2A S.p.A. on the Stock Exchange Alternative Performance Indicators (APM) 11 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 1 Key figures of the A2A Group 100.00% 50.00% A2A gencogas Ergosud 100.00% Group A2A Energiefuture structure 100.00% A2A Rinnovabili 94.42% LumEnergia 100.00% A2A Energia(3) 50.00% Generation and Trading Metamer 100.00% 75.00% Market A2A Energy Solutions Consul System Waste Networks and District Heating 100.00% 100.00% A2A Illuminazione Suncity Energy A2A Smart City Pubblica Other Companies 99.62% Enerxenia(2) 100.00% Acel Energie(2) 100.00% Amsa 100.00% A2A Ambiente 100.00% Aprica 100.00% Linea Gestioni(1) 100.00% 80.00% Linea Ambiente(1) Lomellina Energia 100.00% ACSM-AGAM Ambiente(2) 100.00% A2A S.p.A. A2A Ciclo Idrico 100.00% A2A Calore & Servizi 60.00% Proaris 100.00% Linea Green(1) 93.35% LD Reti(1) 100.00% 100.00% Unareti Unareti Servizi Metrici 91.60% Retragas 89.00% Camuna Energia 74.80% ASVT 100.00% ACSM-AGAM Reti Gas Acqua(2) (1) Shareholdings held through 100.00% Linea Group Holding S.p.A. Lario Reti Gas(2) (held 51%). Shareholdings held through (2) 100.00% ACSM-AGAM S.p.A. (held Varese Risorse(2) 41.34%). (3) 12.80% held through Linea Group Holding S.p.A.. 100.00% A2A Smart City This chart shows the most significant shareholdings of the 51.00% A2A Group. See attachments Linea Group Holding 3, 4 and 5 for full details of shareholdings. 41.34% ACSM-AGAM 12 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 A2A Half-yearly financial report at June 30, 2019 Financial highlights at June 30, 2019 (**) 1 Key Figures of the A2A Group Business Units Geographical areas of activity Group structure Financial highlights at June 30, 2019 Shareholdings A2A S.p.A. on the 3,711 582 Stock Exchange millions of euro millions of euro Alternative Performance REVENUES GROSS OPERATING Indicators (APM) INCOME 166 millions of euro RESULT OF THE PERIOD Income statement figures 01 01 2019 01 01 2018 millions of euro 06 30 2019 06 30 2018 Revenues 3,711 3,081 Operating expenses (2,775) (2,090) Labour costs (354) (334) Gross operating income - EBITDA 582 657 Depreciations, amortization, provisions and write-downs (255) (221) Net operating income - EBIT 327 436 Result from non-recurring transactions - 6 Financial balance (65) (54) Result before taxes 262 388 Income taxes (87) (120) Net result from discontinued operations - 4 Minorities (9) (5) Group result of the period 166 267 Gross operating income/Revenues 15.7% 21.3% (**) The figures serve as performance indicators as required by CESR/05/178/B 13 WorldReginfo - a437cdaf-5af2-4fdc-842f-0a369b62f153 1 Key figures of the A2A Group Balance sheet figures 06 30 2019 12 31 2018 millions of euro Net capital employed 6,566 6,545 Equity attributable to the Group and minorities 3,450 3,523 Consolidated net financial position (3,116) (3,022) Consolidated net financial position/Equity attributable to the Group and minorities 0.90 0.86 Financial data 01 01 2019 01 01 2018 millions of euro 06 30 2019 06 30 2018 Net cash flows from