Significant events during the year and after

Gaia Rating gave Acea a score of 82 out of 100 in its overall assessment of ESG performance. Acea recorded a score increase for the fourth consecutive year, confirming its position among the best-performing companies in terms of sustainability.

In 2022, Acea also confirms its presence in the “Bloomberg Gender-Equality Index” (GEI), an international index that measures companies’ performance on gender equality through five criteria: female leadership, equal pay, inclusive culture, policies against sexual harassment, brand positioning as a pro-women company.

The Group, included in the index for the third consecutive time, obtained a score of 80.67 (on a scale of 0-100) this year, placing it well above the averages for the utility sector (71.21) and the sample analysed (71.11), with a significant improvement of 10.18 points compared to the 2021 result.

On 22 March, Acea finalised the agreement with the British investment fund Equitix for the sale of a majority stake in a photovoltaic holding company (Acea Sun Capital) of the Acea Group, in which the photovoltaic assets of Acea already in operation or being connected to the network in Italy were transferred. The agreement for the transfer of the assets had already been signed on 24 December 2021. Following the closing of the transaction, the newco AE Sun Capital Srl (subsequently merged in Acea Sun Capital through a reverse merger), 60% owned by Equitix and 40% by Acea Produzione, acquired from Acea Produzione the photovoltaic holding company of the Acea Group, the holder, through a number of vehicles, of a portfolio of photovoltaic plants, with a total installed capacity of 105 MW, of which 46 MW incentivised on the basis of different Energy Accounts and 59 MW for new construction already connected or being connected to the network.

Following on from the information disclosed to the market on 6 December 2021, on 29 March 2022, Acea and Suez signed the final contractual agreements for the creation of a joint venture for the design of an advanced smart metering system for the water service and its subsequent production and marketing in Italy and abroad on the basis of a specific commercial partnership.

On 1 April, the consortium formed of Ascopiave (58%), Acea (28%) and Iren (14%) finalised the agreement with the A2A Group for the acquisition of a number of assets in the natural gas distribution service. The scope of activities covered by the transaction includes approximately 157 thousand users, distributed in 8 Italian Regions, belonging to 24 ATEMs, for about 2,800 km of network. Acea’s perimeter of interest consists of concessions in 5 ATEMs, including 2 in Abruzzo, 2 in Molise and 1 in Campania, for a total of approximately 30,700 grid points. The Enterprise Value is € 35.8 million.

For the first time in Italy, the water service was measured and judged, attributing rewards and penalties to managers, for results achieved and consolidated in 2018 and 2019. The ranking was published by ARERA with resolution 183/2022/R/idr and concludes the first two years of application of the incentive mechanism.

Water losses, service interruptions, quality of the water supplied, adequacy of the sewer system, quality of treated water and disposal of sludge are the 6 macro-indicators based on which each of the water service operators were analysed and ranked (for the first two-year period, interruptions were excluded from the incentive mechanism).

The complex data analysis system – launched in 2018 by ARERA with the resolution on the Technical Quality Regulation for the integrated water system (RQTI) – made it possible to codify the results achieved during these years by 203 operators, covering 84% of the nation’s population. By analysing the data received up to 17 July 2020, the Authority was able to assign a bonus to those that reached, maintained and improved the pre-established objectives and a penalty to others.

For the Acea Group, the net amount came to around € 29 million.

On 27 April, the Acea SpA Shareholders’ Meeting approved the Financial Statements and presented the Consolidated Financial Statements at 31 December 2021, which showed a net profit, following allocations to third parties, of € 313.3 million. The Consolidated Non-Financial Statement pursuant to Italian Legislative Decree 254/2016 was also presented to the Shareholders (2021 Sustainability Report).

The Meeting also approved the allocation of profit for the year as proposed by the Board of Directors and the distribution of the dividend. The total dividend (coupon no. 23) of € 180,665,720.95, equal to € 0.85 per share, will be paid starting from 22 June 2022 with coupon detachment on 20 June and record date 21 June.

The Shareholders’ Meeting appointed the new Board of Statutory Auditors that will remain in office for three years and until the approval of the 2024 Financial Statements. The members of the supervisory body were elected through list voting, according to the methods established under articles 15 and 22 of the Articles of Association. In the new Board of Statutory Auditors, Maurizio Lauri (Chairperson), Claudia Capuano and Leonardo Quagliata were elected as standing auditors; Rosina Cichello and Vito Di Battista as alternate auditors.

Pursuant to art. 15.4 of the Articles of Association, the Shareholders’ Meeting, at the proposal submitted by shareholder Suez International SAS, also appointed Francesca Menabuoni as Director, who will remain in office until the expiry of the current Board of Directors, i.e. with the approval of the Financial Statements as at 31 December 2022.

On 13 May, the first Green Bond Allocation & Impact Report for the years 2019 and 2020 was published, concerning the green format bond loan for a total amount of € 900 million under the € 5 billion EMTN program, and divided into two series, one of which is for the amount of € 300 million, with an interest rate of 0% and maturity in 2025, and another for the amount of € 600 million, with an interest rate of 0.25% and maturity in 2030, issued as part of the Acea Group’s Green Financing Framework for financing projects related to water resource protection, energy efficiency, development of the circular economy, and increased energy production from renewable sources.

On 15 June, Acea and NTT DATA Italy introduced the Waidy® Management System (WMS), the native cloud solution for water resource protection, designed to optimise water management in networks, at the launch event for the two Italian Google Cloud regions.

On 27 June, Acea received the resignation, with immediate effect, from the position of board member of Giovanni Giani, appointed on the list presented by the shareholder Suez during the Shareholders’ Meeting of 29 May 2020. The decision to resign is motivated by other professional commitments. On 18 July, Acea’s Board of Directors co-opted Massimiliano Pellegrini as a new non-executive Director.

On 27 June, Acea inaugurated the largest photovoltaic plant in Basilicata at “Piana di Santa Chiara” in the municipality of Ferrandina, in the province of Matera, built by Acea Solar and now owned by Acea Sun Capital (60% Equitix and 40% Acea Produzione). The plant is developed on land with a total area of approximately 40 hectares and has an installed capacity of approximately 20 MW, for an annual production of approximately 36 GWh, equivalent to more than 1,830 equivalent hours/year, corresponding to 15 thousand tons of avoided CO2 emissions per year, and is capable of supplying enough energy to meet the annual needs of more than 10,000 households. The plant sells the energy produced directly to the market and was awarded the tender issued by Terna in relation to the “Capacity Market,” with a total “committed capacity” of 3 MW for which it will receive a fixed annual fee for the next 15 years.

On 30 June, Acea was awarded, through its subsidiary Acea Ambiente, the business unit called “Polo Cirsu” (located in Località Casette di Grasciano Notaresco - Teramo), following participation in the competitive bidding process called by the notice of sale of the Court of Teramo - Bankruptcy CIRSU SpA Reg. Bankruptcy No. 91/2015. At the outcome of the same, Acea Ambiente was the highest bidder for an amount of € 19,100,000. The business unit consists of the landfill named “Grasciano 1”, completely depleted in authorised volumes, the new landfill named “Grasciano 2” consisting of a first lot of 234,000 m3 and a second lot to be built, with an authorised volume of 246,000.00 m3, a recycling and composting plant and a platform for the utilisation of waste from separate waste collection and durable goods.

On 5 July, Standard Ethics upgraded Acea’s outlook from “stable” to “positive” and confirmed the “Corporate Rating” at “EE”.

On 6 July, Fitch Ratings confirmed its Long-Term Issuer Default Rating (idr) for Acea of “BBB+” with “Stable” outlook, and the Short-Term idr of “F2”. The Long-Term Senior Unsecured Rating of “BBB+” was also confirmed. The rating reflects Acea’s strategic focus in regulated activities, along with prudent management of energy hedges and the solid level of available liquidity.

On 18 July the Board of Directors, on a proposal by the Appointments and Remuneration Committee and with a resolution approved by the Board of Statutory Auditors, appointed by co-optation, under the terms of Art. 2386 of the Italian Civil Code and Art. 15 of the By-Laws, Massimiliano Pellegrini as a new non-executive Director of the Company, replacing Giovanni Giani who resigned on 27 June 2022.

On 19 July, Acea Solar, a wholly owned subsidiary of Acea Produzione, obtained an “Environmental Impact Assessment” and “Single Authorisation” from the Region of Sardinia for the construction of a photovoltaic plant in the industrial area of Ottana, in the municipality of Bolotana (NU). The plant will have an installed capacity of approximately 85 MW. It is scheduled to come into operation in the first half of 2024. The site, the largest in Sardinia and among the largest in Italy, covering approximately 140 hectares, will be connected to the high-voltage grid at Terna’s new power station called “Ottana 2,” built within the same industrial area. Furthermore, the project includes the implementation of a 10 MWh energy storage system that will deliver electricity during the phases of the day when generation from renewable sources is reduced. The system as a whole will contribute to the stability of the grid and the supply of 170 GWh/year of electricity, equivalent to the annual needs of approximately 50,000 households and corresponding to more than 70 thousand/ton of CO₂ avoided per year, compared with equivalent production from fossil fuels.

Acea agreed with Cassa Depositi e Prestiti a new revolving “Sustainability Rating Linked” credit line of € 200 million with a duration of 3 years, connected to two sustainability rating targets in the Environment Social and Governance (ESG) area. The pricing of the new credit line is, in fact, linked to the objectives of the ratings that will be assigned by Standard Ethics and by EticaNews. In 2022 the independent agency Standard Ethics confirmed the Group’s corporate rating at “EE” (investment grade) and raised Acea’s Outlook from “Stable” to “Positive”. Again in 2022 Acea obtained from EticaNews the “Integrated Governance Index” (IGI) score of 60.45 (scale 0-100), coming 16th out of the total of 86 candidates and being included in the “Leader ESG Identity” category.

On 9 August, following the declarations on the outlook of the rating assigned to Italian sovereign debt of Friday 5 August 2022, Moody’s communicated that Acea’s outlook had been changed to “negative” from “stable”. At the same time, Moody’s confirmed the long-term issuer rating and the senior unsecured rating at the level “Baa2”, the Baseline Credit Assessment at the level “baa2”, and also the “(P)Baa2” level assigned to the EMTN programme. According to the Rating Agency, the change in the outlook of a set of Italian companies, including Acea, reflects these companies’ exposure to the drop in the quality of the sovereign creditworthiness. However, Acea’s ratings remain a notch above those of the Italian government, in virtue of the quality of the diversified business portfolio and the Group’s strategic focus on regulated activities.

On 23 September, the Board of Directors of Acea acknowledged (a) the communication of the shareholder Roma Capitale of 20 September 2022, with which the latter formulated a request for replacement of the company head and (b) the subsequent communication of the shareholder Roma Capitale, regarding the indication of Mr Fabrizio Palermo as candidate for the position of member of the Board of Directors and next Chief Executive Officer of Acea.

The Board also acknowledged the launch of the enquiry activities by the Company’s competent structures regarding the consensual termination of the relationship with Mr Giuseppe Gola and the entry of the candidate, Mr Fabrizio Palermo, under the terms of art. 2386 of the Italian Civil Code, observing the current provisions of the laws and by-laws.

For the purposes of performing and defining the aforesaid enquiry activities and the consequent adoption of the decisions it is responsible for, the Board of Directors was therefore convened again for Monday 26 September.

On 26 September, the Board of Directors of Acea completed enquiry activities and approved the terms and conditions of the agreement for the consensual dissolution of the relationships in being with Mr Giuseppe Gola, which the latter accepted. On the basis of this Mr Gola renounced with immediate effect, the positions of Director, Chief Executive Officer and Strategies, Production and Foreign Manager, and all delegations and powers conferred on him and all other positions held on behalf of the Company and/or the Group. The termination agreement, in accordance with what is indicated in the policy on the subject of remuneration approved by the Company’s Shareholders’ Meeting this past 27 April (The “Remuneration Policy”), provides for the payment to Mr Gola of the maximum amounts provided for in the “Executive Exodus Management” Policy, approved by the Board of Directors of Acea with resolution no. 33 of 21 December 2011, which makes reference to the national collective bargaining agreement for Executives of Public Utility Service Companies.

On the same date the Board of Directors also appointed by co-optation, under the terms of Art. 2386 of the Italian Civil Code and Art. 15 of the By-Laws, on a proposal by the Appointments and Remuneration Committee and with a resolution approved by the Board of Statutory Auditors, Mr Fabrizio Palermo as a new Director of the Company. Mr Fabrizio Palermo was appointed by the Board of Directors the new Chief Executive Officer of Acea and, as such, he is without the requisites of independence provided for in the legislation and in the Corporate Governance Code. In line with the previous structure, Mr Fabrizio Palermo was given all the powers for the ordinary administration of the Company, with the exclusion, as well as those that cannot be delegated under the terms of the law and the by-laws, of specific attributions that the Board reserved for its own competence.

On 4 October Acea Ambiente, a company fully controlled by Acea SpA, completed the acquisition of 70% of the capital of Tecnoservizi Srl, a company operating in the mechanical treatment and recovery of separate urban waste (mixed packaging, monomaterial fractions) and special non-hazardous waste. The Company acquired has an authorised treatment capacity of 210 thousand tons per year and operates in the province of Rome, performing activity of transport and disposal and recovery of urban, special hazardous non-hazardous waste, such as paper, plastic, wood, glass, metal etc. coming from the separate collection of Municipalities, Bodies and Industries.

The economic value of the transaction, in terms of Enterprise Value for 100% of the company is about € 21 million. The price paid for the acquisition was € 5.2 million and a further portion for the balance of the price, of € 1.6 million, will be paid in the second half of 2025. The EBITDA expected in full operation on an annual basis is approximately € 4 million.

On 3 November, Acea Ambiente, a company fully controlled by Acea SpA, through its subsidiary Cavallari, completed the acquisition of the entire capital of Italmacero Srl, a company operating in the mechanical treatment and recovery of separate urban waste (mixed packaging, monomaterial fractions) and special non-hazardous waste. The company is the owner of a plant in the area of North Ancona, with an authorised capacity of 13 thousand tons. The price paid for the acquisition was € 1.2 million.

The Acea Group, through Areti, the company that operates the electricity distribution grids in Rome, has created a new high-voltage electricity line serving the areas of Selvotta, Castel Romano, Laurentina and Vitinia. The infrastructure, which replaces the old plants of the south-west quadrant of the Capital, upgrades the grid in the zone, which goes from a voltage level of 60 kV to 150 kV.

The Acea Group was included by the Financial Times and Statista in its list of “Europe’s Diversity Leaders 2023”. In its fourth edition this year, “Europe’s Diversity Leaders” selects 850 employers who have demonstrated notable leadership in diversity and inclusion, based on the experiences of over 100,000 employees interviewed throughout Europe.

Acea is number one among Italian public service companies and in 14th place among the 42 Italian companies. The Acea Group has always worked to promote inclusion and to take advantage of diversity. In fact, it recently adopted an Equality, Diversity and Inclusion Policy, in a document updated annually, prepared and monitored by the relevant organisational structures.

On 6 December, the closing of the initial stage of the business combination with ASM Terni was confirmed, following the completion public procedure initiated by the latter. This operation is of significant strategic value and intended to create an integrated multiutility in Umbria, offering electricity and gas distribution and sales, waste management and integrated water cycle services. Acea’s entry into the share capital of ASM Terni involves two distinct stages. Note that the Antitrust Authority (AGCM) resolved to not begin the investigation of the operation, given that it does not establish or strengthen a dominant position and the Umbria Financial Court gave the operation a go ahead. This meant the two conditions precedent established for carrying out the initial stage of the operation were met.

Euronext announced that as of 19 December Acea is part of the MIB ESG index for environmental sustainability, the first Environmental, Social and Governance (ESG) index dedicated to Italian blue-chip companies, designed to identify major listed issuers with excellent ESG practices. The methodology used for the index creates a list of the best companies in terms of ESG criteria, selected from among the most liquid Italian companies, excluding those involved in activities not compatible with ESG investments.

Acea was the first listed Italian multiutility to obtain UNI/PdR 125:2022 certification from RINA, accredited by Accredia, the only national standard on gender parity, also identified in the National Recovery and Resilience Plan.

Recognition certifies the company’s commitment to the areas of equity, diversity and inclusion, as well as its ability to adopt concrete measures to reduce gender disparities with respect to opportunities for growth, wage parity, protecting parents and work/life balance. UNI/PdR 125:2022 defines guidelines to support female empowerment within company growth paths.

For the second consecutive year, the Acea Group has obtained Top Employers Italia Certification, official recognition of corporate excellence in HR policies and strategies and implementation of the same, with the aim of contributing to the well-being of people, improve the environment and the world of work. Certification is issued for companies that achieve and meet the high standards required in the HR Best Practices Survey.

On 17 January 2023 Acea, following the Board of Directors resolution of 13 January 2023 and the completion of bookbuilding activity, successfully completed placement of a Green Bond issued for a total of € 500 million, at a rate of 3.875% and maturing on 24 January 2031.

The issue, falling under the Green Financing Framework and the € 5 billion Euro Medium Term Notes (EMTN) programme, based on the Base Prospectus supplemented on 13 January 2023, was a great success, receiving more than 3 times the amount offered from primary investors coming from numerous geographic areas, mainly in the green sector.

The profits will be used to finance specific projects with sustainability goals. In particular, those relative to resilience of the electricity distribution grid, energy efficiency, electric mobility, development of the circular economy, increasing energy produced from renewable sources and protection of water resources. The issue is intended exclusively for institutional investors in the Euromarket.

On 3 February 2023 Acea successfully completed the reopening of the Green bond issue carried out on 17 January 2023 (rate 3.875%, maturity 24 January 2031) for an amount of € 200 million (“TAP Issue”). The TAP Issue received requests equal to over 1.5 times the amount offered. The securities, with a minimum unit of € 100,000 and a rate of 3.875%, were placed at an issue price of 100.368%, implying a return of 3.820% or 105 basis points above the midswap rate, offering a further improvement on the already very satisfactory terms of the original issue.

On 23 January 2023, Acea acquired the remaining 35% of Deco’s share capital, a company operating in the waste sector in Abruzzo in which it already held a 65% stake (see the press release of 20 September 2021), with the closing of the acquisition occurring in November 2021. The company designs, constructs and manages plants for the treatment, disposal and recovery of municipal solid waste and plants for energy recovery from renewable sources.

Acea notes that, on 14 February 2023, the lawyer Michaela Castelli resigned with immediate effect from her position as Director and Chairman of the Acea SpA Board of Directors.

On 17 February 2023, the Acea SpA Board of Directors, on a proposal by the Appointments and Remuneration Committee and with a resolution approved by the Board of Statutory Auditors, appointed by co-optation, under the terms of Art. 2386 of the Italian Civil Code and Art. 15 of the By-Laws, Barbara Marinali as a new non-executive Director of the Company, replacing Michaela Castelli who resigned on 14 February 2023. The Board of Directors also appointed Barbara Marinali as the Chairman of the Board of Directors.

Acea Ambiente, a subsidiary of Acea, responded on 1 March to the public notice issued by the Municipality of Rome to find economic operators interested in presenting project financing proposals for assignment of the systems hub concession relative to the design, authorisation, construction and management of a waste to energy plant and correlated ancillary systems.

Acea Ambiente presented its indication of interest with other national and international partners, including Hitachi Zosen Inova, Vianini Lavori and Suez, following favourable determinations by the relevant corporate bodies of Acea Ambiente and Acea (also pursuant to the provisions of the Acea Group Related Party Transactions Procedure).