Full Year 2021 A2A SpA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : A few questions also from my side. I would like to come back again to the measures that are under study by the EU and the government, both for the market and hydroelectric concessions. First of all, regarding the power gen market, 2 measures probably, a clawback on the extra profit and second a change of the design of the market. In both cases, do you expect that your estimate of power gen prices will remain at this level for your hydro and WTE production? What I mean the 5 gigawatt hour of production -- 5 terawatt hour, sorry, of production that you expect in your plan will have a price in your plan in the region of EUR 80 to EUR 86 per terawatt hour. So also considering all these changes that could arrive, you still expect that these 2 kinds of productions, hydroelectric and WTE will continue to have the same prices? Or do you see some risk, in order to have a clear scenario on the margins on these very important activities. The second, regarding hydro concession. There were a lot of articles and also some meetings in the parliament about this topic. What do you expect? Because Lombardy region seems to go ahead with the tenders that should arrive, if I'm not wrong, during next year. And on the other side, it seems that some changes could arrive. So you are still confident that you can confirm and retain your concession even on the already expired concessions? Or what is the big risk that you see for this? The second point is regarding this increase of the dividend again. It is a sort of new floor where we can calculate the increase of DPS, because, frankly speaking, this level should be reached only in 2024 or 2025 in your business plan. So being here already now sounds to be very good news despite all the risks we see on the market for 2022. So it could be interesting that after 2 months of the presentation of the business plan, there are some positive novelties on this topic. The third is just a clarification about the waste business, because you already reached this year an EBITDA of EUR 330 million, while you have a target in your business plan to improve to EUR 360 million in 2 years' time, even including an important acquisition in this sector. So could you help us to understand why there is such a little growth in the waste business in 3 years despite such strong market during 2021.

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : Considering that you already reached EUR 330 million in 2021, why just EUR 30 million up despite investments and acquisitions? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 17, 2022 / 1:00PM, A2.MI - Q4 2021 A2A SpA Earnings Call

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : Just a quick follow-up, if I may, regarding the topic of the energy prices. You underlined for renewables the price is lower than what I mentioned, that is the prices -- the Page 48 of your presentation, we see prices for the pool in the region of EUR 80 to EUR 86, and for the peak load from EUR 86 to EUR 93. So also Water and Waste business are not related to these kind of prices, are lower than this?

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : It's 48. Yes. The backup business energy.

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : The question is just if you have a cap or a redesign on the market, power generation market, do you see the risk that these prices will be kept?

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : Right. Just the power prices for the 5 terawatt hour that you have from hydroelectric production and waste to energy.

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : Yes,'23 and the following years due to a price cap or the market redesign, means if CCGT are not anymore setting the marginal price, clearly, there is a risk that this price will be by far lower.

Question: Stefano Gamberini - Equita SIM S.p.A., Research Division - Analyst : Many thanks, Renata, and greets also from my side for Andrea, and I hope to see you soon.