Letter to Shareholders

Dear Shareholders,

Last year was marked by changes in several different spheres, with positive developments, such as the abatement of the pandemic, which allowed a gradual return to normality, and negative ones, namely the effects of climate change, which manifested in another rise in average temperatures and a severe drought which, unfortunately, is happening again this year, and the war in Ukraine, which started last February and is still ongoing. 

These diverse aspects had consequences on various levels and can be summarised in a few salient points: the need to drive forward innovation, particularly with a view to optimising digitalisation, which has already improved the efficiency of many production and industrial processes with impacts on how labour is structured and positive effects on the work-life balance; the climate crisis, which has raised awareness of the fragility of the environment and the importance of the actions that must be adopted, highlighting the role of utilities in the management of a business that is closely linked to natural resources; and the growing complexity of the international scenario, which has sparked an energy crisis that requires the diversification of supply sources and an acceleration of the development of renewable resources in order to reach the climate neutrality targets adopted by the European Union. On this last point, Acea has already planned developments in energy production and, more generally, in the complex process of ecological transition, which also includes actions in the water sector and the circular economy. This commitment is reflected in the various classifications and ratings, one example being the Gaïa Rating, which assesses non-financial performance and the effective integration of sustainability policies in business governance.

Sustainability is once again at the heart of our business strategy, not only with a view to tackling emergencies or to prevent or mitigate other risks, but, above all, to respond to calls for an immediate future based on a profoundly different vision of development, a future characterised by a just transition founded on the constant evolution of social aspects. In this new environment, a business can only remain competitive by maturing and developing new skills and capabilities, and, in this regard, in 2022, the Acea Group confirmed its position as an industrial operator able to improve performance despite the challenging context. In fact, by increasing the focus on regulated markets, the Group saw growth in EBITDA, investments, and consolidated revenue.

Profit was influenced by external factors, such as the extraordinary windfall tax and the negative impacts of rising interest rates on financial management. Net of these effects, financial performance was generally in line with the previous year.

The company recorded positive performance thanks in particular to important actions taken in the last few months of the year, reducing costs, improving operating efficiency, and recovering margins. From a financial perspective, in early January, we successfully returned to the capital market with the issue of a Green Bond at the most competitive rates on the market.

In 2022, we continued our strong commitment to plan and implement relevant actions in the water sector, from reducing losses to developing strategic projects of national interest, such as the works to double the Peschiera aqueduct, which will secure water supplies in the capital city.

This commitment also extends to the energy sector, with the further development of photovoltaic power, natural gas distribution, the installation of smart meters and the strengthening of electricity grids, with major investments launched in view of the Jubilee. In the environment sector, the project to build a fourth waste-to-energy line at San Vittore — essential to completing the waste cycle in Lazio — was pursued. This project is joined by the recent presentation of our expression of interest in the waste-to-energy plant in Rome, which would give Acea the opportunity to optimise the Group’s position in the sector and to make a tangible contribution to managing waste in the capital city. In 2022, Acea consolidated its position in the environmental sphere through various acquisitions and the development of waste treatment plants.

Meanwhile, Acea was awarded funding to develop projects as part of the NRRP, focusing mainly on water projects across nearly the entire area served by the Group.

All of these actions align with the sustainability strategy adopted by Acea and respond to the goals of the 2030 Agenda of the United Nations. The success of this strategy has been certified by improvements in various ratings, including the Standard Ethics Rating, as well as through the award of certifications: Acea was the first publicly traded Italian multiutility company to receive the UNI/PdR 125:2022 award from RINA, the only national standard on gender equality, and recently gained the Top Employers Italia 2023 certification for the second consecutive year in recognition of our HR policies and strategies.

The stability of our financial position, our excellent operating performance at Group level and the actions underway to optimise our organisational and financial management all point to a very positive outlook in the medium and long term, which, combined with the dedicated commitment of our valuable personnel, will enable the company to achieve increasingly ambitious goals.