• Outlook 2013: net profit of approximately EUR 7 million
  • Value of production: 2014-16 CAGR +35%
  • 2014-16 • EBITDA margin of 14.5%
  • Net income: +58% CAGR 2014-16
  • Gearing ratio equal to 0.6 x 2016
  • Investment 2014-16: € 16.5 million for activities of ESCO formula with FTT
  • Pay-out ratio constant and equal to about 50%

 

Terni, London, October 1st, 2013

 The Board of Directors of TerniEnergia, a company active in the renewable energy sectors, energy efficiency and waste management, listed on Star segment of Borsa Italiana, approved today the industrial plan 2014-2016 with updating of target in 2013

The plan will be presented today in London to the financial community at h 11.00 GMT (h. 12.00 CET) by the President and Ceo of TerniEnergia, Stefano Neri, by the Executive Directors Paolo Ricci and Fabrizio Venturi and by the CFO of the Company Paolo Allegretti.

 

“DISCOVER THE NEW GREEN ERA”: MAIN STRATEGIC LINES

TerniEnergia aims to establish itself among the leaders in the world in its field, focusing on the integration of the financial structure and on the affirmation of a new business model

The Company aims to a strong growth in creation of value , strengthening the internationalization process , focusing on the segment of industrial size plant, and strengthening partnerships and synergy relationships with industrial and financial companies with high credit worthiness. A strategy already outlined in the business plan baseline presented last year , which is pushed and accelerated by an innovative model of access to capital, with a strengthening of production of cash flows and the stability of margins in the period of the plan.

TerniEnergia will retain ownership (full or in JV) of most of the asset, so as to ensure stable and recurring revenues in the long period. The new investments are expected very limited and will focus on the energy efficiency sector that is rapidly growing, with high profit margins and with the possibility of technological innovation

In order to achieve a significant growth, the Company will require, therefore, a new model which allows to develop, and build the plants on behalf of investors who acquire the property and give to TerniEnergia the plant management. This model, which provides for the sharp contraction in investment in additional plant property of TerniEnergia, will reduce the net financial position, and at the same time, will allow to self-finance the planned measures with cash flows generated by industrial activity and by the sale of plants to investors.

The Plan highlights the importance of EPC activity, also thanks to the agreement reached with Prelios SGR and with Capital Power Advisor to set up the closed – end real estate fund called RA (Renewable Assets), intended to invest in new asset class which consists of energy production plants from renewable sources.

TerniEnergia is the technical and industrial partner Fund which will collect 100 million in two tranches of EUR 50 million each. It is forecasted a leverage higher than 60%.

 TerniEnergia, at the beginning of 2014, will give to the Fund RA plants directly owned for approximately 70 million Euro of enterprise value, but will hold shares of the Fund equal to approximately 5%.

The remaining liquidity of the Fund will be used for new projects, which TerniEnergia will develop and built in different areas of the world and then manage directly.

 

“DISCOVER THE NEW GREEN ERA”: TERNIENERGIA IN FIGURES

In 2016 TerniEnergia is expecting a significant increase in revenues and profitability and, simultaneously, a reduction in the NFP and an increase in cash flow.

The forecast for the year 2013 includes a net profit target of approximately Euro 7 million, preserving the financial equilibrium.

In the period of the Plan is expected a total target of production value of approximately Euro 585 million, growing steadily over the intermediate targets from 136 million in 2014 to 201 in 2015 , up to 248 in 2016 and with a CAGR of 35%.

Total net income for the three years is expected of approximately Euro 43 million, with planned objectives of Euro 8 million in 2014, Euro 15 million in 2015 and Euro 20 Million in 2016. EBIT will increase from Euro 14 million in 2014, to Euro 23 million in 2015 up to 30 million in 2016, with a virtuous relationship in the ratio of EBIT / net financial expenses. The EBITDA margin is constant over the period at 14.5%

Cash flow increases: between 2014 and 2016 is expected an operational cash flow with annual targets respectively of Euro 31.6 million, Euro 42.5 million and Euro 41.9 million. Cash flow will be increased by the expected improvement in the operating results and the careful management of working capital due to the new business model.

Improves the net financial position: TerniEnergia expected to reduce the NFP to approximately Euro 68 million in 2014, 60 in 2015 and finally to 52 in 2016.

The debt / equity will decrease from 1.6x in 2014 to 0.81x in 2015, with the final target of 0.60 x 2016.
The debt / EBITDA will decrease from 3.44 x 2013 to 2.07 x 2015 to 1.45 x 2016. The total investment target in the period was € 16.5 million for ESCO activities with the formula of financing through third parties. It is confirmed the remuneration policy of shareholders for the period 2014-2016 . it will be proposed to the Board of Directors the distribution of approximately 50% of consolidated net income

 

“DISCOVER THE NEW GREEN ERA”: ROADMAP AND OPERATING MODEL

TerniEnergia will focus its attention on the global outlook of strong growth in the clean energy , clean – technologies and recovery of materials and energy from marginal resources sectors. The new requirements relating to environmental sustainability can have right answers to their importance only with industrial type and quality intervention.

TerniEnergia will bring into the future , the experience gained over the years during the impetuous growth of the PV market in which the Company holds a leader position in the design, construction and operation of photovoltaic systems. TerniEnergia has responded very quickly to the market slowdown in the Eurozone.
The three business units have proven to be an excellent diversification of resources and skills. For this reason the new industrial plan guarantees their maintenance and valorization.

–         Indipendent Power Producer (Power generation)

–         Integrated energy solutions (EPC e system integration, energy efficiency through the company Lucos Alternative Energies: TerniEnergia is going to acquire the totality of shares)

–         Enviromental Resources Solutions (biomass plant recovery of used tyres, decontamination, water purification).

For the next period 2014-2016, the Company will increase its international activities by carefully selecting the geographical areas of intervention depending on the opportunities, focusing on:

–         emerging markets where the demand for energy is increasing

–         markets characterized by replacement demand of renewable energy supply and efficiency of electrical systems

–         geographical areas in which it is closer to achieve grid parity, or in which you can work through PPA (power purchase agreement).

The size of individual projects will continue to grow. TerniEnergia will focus on partners and customers of high standing that will enable new ways of accessing capital.

The Company will guide the growth of demand for new asset class by institutional traders to plants producing renewable energy, even reaching the development of the financial packaging for those who are looking for diversification compared to mature markets such as real estate

TerniEnergia shows to have adjusted to the changing needs of the market, ensuring to important customers IRR double digit, with limited risk for the investor, both because the process is absolutely under control and also because TerniEnergia minimizes the impact of the investment, sharing the part of the risk with a technically efficient plant system management.

TerniEnergia is able to maximize this value by covering the process with absolute mastery from the project development to the EPC and from built to operate and transfer (BOT), until to the power generation activity and and the O & M. The company is starting with important projects in Ukraine. Works in South Africa have already started in order to realized a big power plant and in the coming weeks are expected interesting news about the award of the third South African government’s bid to build large solar power plants.
TerniEnergia maintain ownership of assets for the production of energy and for the recovery of material to generate stable revenues in the long term. The new investments are expected very limited and will focus on the energy efficiency sector, which is rapidly growing also in the Eurozone, with high profit margins and with the possibility of technological innovation