Slides
Page 2
F2025: strong profitability and low leverage RESULTS FULLY OFFSET LOWER TEMPORARY OPPORTUNITIES Temporary opportunity contribution (m€) 2 Highlights NET PROFIT (b€) >0.46 (+4%) NET DEBT / EBITDA <2.6x CUMULATED EBITDA >900 M€ '20 '21 '22 '23 '24 F'25 EBITDA (b€) >1.53
Page 3
3 Business Plan
Page 4
Multi-business model HERA’S DIVERSIFIED GROWTH POTENTIALS AT LOW RISK 4 ECONOMIES OF SCALE VARIETY OF OPPORTUNITIES CROSS FERTILIZATION CUSTOMER LOYALTY • Among top players in Italy in all portfolio businesses • Synergic portfolio activities • Overseeing multiple businesses enables to capture a wider range of growth opportunities (structural or temporary) • Effective solutions (technological or process- based) in one business can also be applied to other areas of activity (particularly in regulated businesses). • Cross financing • Enhance customer experience from unique supplier of primary services • Effective CRM system +400bps* solid value creation at low risk * Spread ROI - Wacc
Page 5
Business strategy STRATEGY TO CREATE VALUE 5 Macro-trends Strategy • Extreme weather events • Increase std. in water regulation • Italian infrastructural gap Significant capex needs Demand for energy efficiency, decarboniz. and infrastructural develop. • Italian infrastructural gap • Circular economy EU directives Opportunities to expand • Innovation & digitalization • Increase water availability • Leakage reduction • Improve sewage and waste- water treatment • Reuse • Efficiency Distribution • Offers focus on decarbonization • CRM and mkting supported by AI • Develop RES for customers • Gas & D.H.: Capex plan for readiness and strengthen reliability • Electricity: development of hosting capacity • Efficiency gains on networks Supply & Renewables • Expand plant capacity and intermediation activities • Explore new circular economy potential • Global Waste Management services * Source: Snam – Terna scenario to 2040 • Final energy consumption: -20% Electr. Gas +1.6% -0.4% 36% 32% INNOVATION AND AI DEVELOPMENT Italian scenario by ’40* • Increase in RES and green gas Cagr to ’40 Incidence % WATERENERGYWASTE
Page 6
Strategic priorities PROVEN VALUE ACCRETIVE STRATEGY 6 Strengthening return on invested capital with steady and visible returns for shareholders CREATE VALUE Sustainability to address business opportunities to create value on long term visible trends in EU Be Sustainable Keeping a balanced mix of core businesses, investing to strengthen competitive advantage and maintain a neutral position on all main macros Enhance Resilience
Page 7
Total Shareholders’ Return Create Value FURTHER ENHANCING SHAREHOLDERS’ RETURN 7 * Adjusted for temporary opportunities ** Structural, excluding temporary opportunities in 2024 EPS for about 4 €c ^ Considering stock price as of 31st December 2025 equal to 4.02 € Value creation levers EPS CAGR** DPS YIELD^ TSR ~6% >4% VALUE CREATION TARGET ~ 400 bps (spread ROI-Wacc) ROI 8.8%* 9.3% NET INV. CAP. 8b€ 10b€ 2024 E2029 ~10%
Page 8
Enhance resilience 8 Diversified multi-utility business Fully hedging commodity risk Climate change capex executed in last 10y 100% inflation recovery Fully covered interest rates ESG regulation already fully compliant MAINTAINING A HEDGED PROFILE Protection from macros
Page 9
Be Sustainable SUSTAINABILITY TO CREATE VALUE 9 Strong ESG synergies on capital allocation 1.3 b€ Decarbonization Net zero by 2050 Circular Economy InnovationResilience 2.0 b€ 1.4 b€2.6 b€ Capital Plan (b€)
Page 10
Capital allocation strategy CAPITAL DISCIPLINE AND FOCUSED STRATEGY 10 DEVELOP CORE BUSINESSES PRIORITIES Rising investments needed in our core businesses promoting efficiency and increase overall return on invested capital KEEP BALANCED PORTFOLIO Targeting growth in all core activities also exploiting cross financing capabilities to maintain a balanced portfolio mix MAINTAIN FINANCIAL FLEXIBILITY Business Plan envisages a capex plan to fund structural growth (+39% vs last 5Y capex), leaving room to address further visible development opportunities
Page 11
Develop Core Businesses ENHANCING RETURNS CONFIRMING LOW RISK PROFILE 11 Return on Invested Capital (%) NETWORKS 6.2%* 6.0%* WASTE COLLECTION 6.3%* 5.9%* WASTE TREATMENT 11.0% 13.6% ENERGY SUPPLY 20%^ 20% 2024 E2029 CAPEX PLAN (b€) 2.5 5.02.1 0.4 grantsgrants Maintenance Organic Development M&A Total ~60% REGULATED ASSET BASE * Regulated Wacc ^ Not including temporary opportunities 2.6 5.5
Page 12
Keep Balanced Portfolio GROWTH ACROSS PORTFOLIO BUSINESSES CONFIRM MIX 12 Ebitda mix in E2029 (%)EBITDA GROWTH BY BUSINESS (m€) 1,588 1,760 (177) +111 +118 +115 +4 2024 Temporary opportunities Energy Networks Waste Other E2029 Networks Energy Waste
Page 13
Keep Balanced Portfolio FASTER NETWORKS DEVELOPMENT WITH FCF FROM ENERGY 13 *Development capex and M&A include both equity investment and the related debt net of grants for a total value of 0. 6b€ 1.6 0.8 0.8(0.2) (0.6) Op. CF NWC & Prov. Maint. Capex FCF Dev. Capex & M&A* WASTE 100% REINVESTED ENERGYNETWORKS 2.3 1.7 0.6 - (0.6) Op. CF NWC & Prov. Maint. Capex FCF Dev. Capex & M&A* 2.2 0.9 1.4 +0.0 (1.3) Op. CF NWC & Prov. Maint. Capex FCF Dev. Capex & M&A* 35% REINVESTED 35% IN NETWORKS 30% IN DIVIDENDS 160% REINVESTED FCF by BUSINESS (b€) FCF allocation (% of businesses FCF) 3.4 b€ 2.8 b€
Page 14
Financials STRONG CASH GENERATION MAINTAINS SOLID FINANCIAL FLEXIBILITY 14 6.2 3.5 (2.5) (0.7) (0.2) (2.5) (1.4) (0.3) Op. CF NWC Maint. Capex FCF Dividend + Min. Dev. Capex + M&A M&A (Debt) Debt Change Group Cash flows* (m€) * including “Other business”
Page 15
Net Debt / Ebitda (x) Financial leverage ROOM FOR FURTHER GROWTH 15 Further opportunities3.3x <2.6x 2.6x Maximum Leverage F'25 BP '29 M&A at non-dilutive multiples Core businesses Further authorized plant dev.
Page 16
Shareholders’ return UN-INTERRUPTED PROFIT INCREASE AND A FASTERDIVIDEND GROWTH 16 Structural* Net profit (m€) 14.5 15 15.5 16 15 15.5 16 16.5 17 16 16.5 17 18 19 2024 E2025 E2026 E2027 E2028 E2029 BP to 2027 BP to 2028 BP to 2029 CAGR ~6% Dividend policy (c€) 384 519 2024 Adj. F2025 Adj. E'2029 *Structural defer from reported figures for the Temporary Opportunities >460447 STRUCTURAL CAGR: ~6%
Page 17
17 3rd player in Italy
Page 18
Energy customer base CONFIRMING TARGET ON OUR INTANGIBLE ASSET Number of customers (mln) 18 2.0 2.0 1.9 1.6 2.6 (0.3) (0.2) +0.1 +0.3 2.6 2023 2024 Churn STG Temp. Opportunities Net Acq. M&A E2029 4.54.6 Value Added Service Retail CondosBusiness GREEN OFFERS ENERGY MONITORING ASSISTANCE & MAINTENANCE PROTECTION ENERGY EFFICIENCY E-MOBILITY SELF-PRODUCTION Gas Electricity 3.6* *Not including temporary opportunities
Page 19
381 672 495 607 (177) 2023 adj.* 2024 Temporary Opport. 2024 adj. Trading & Margin normaliz. Free Market VAS & En. Eff. Generation Public Lighting M&A E2029 Energy growth targets DIVERSIFIED DRIVERS UNDERPINNING PROFITABILITY Ebitda growth (m€, Cagr adj.) STRUCTURAL CAGR +4% 19 Free market Highlights CLIENTS WITH VAS (%) 7% PV INSTALLED CAPACITY* (MW) 50 17% 370 2024 E2029 PUBLIC LIGHTING POINTS (k) 685645 * Including PV sold to third parties * Not including temporary opportunities (superecobonus and last resort markets)
Page 20
Italian leader Waste treatment
Page 21
Waste growth targets 21 LEVERAGING ON MARKET LEADERSHIP TO INCREASE MARKET SHARE RECYCLING SOIL REMEDIATIONTREATMENT Italian LeaderItalian LeaderItalian Leader ~10% mkt share ~20% mkt share ~10% mkt share M&A upside Regulatory upside Market upside Ebitda: ~20 m€ More than 200 targets Plant expansion Partnerships 4L WTE Padua WTE Montale & Chemical-Physic. expansion SEA consolidation TRS expansion Ambiente Energia acquisition PPWR confirms the SUP directive: adjustment of supply capacity to the potential growth in demand resulting from current regulatory developments Plant/Product expansion ‘26 Rigid plastics Modena +32 ktons capacity ’27 and ‘29 PE-LD Novara +11 ktons capacity ‘26 PET close to Aliplast HQ +13 ktons capacity ‘25 Carbon Fibre Imola +1 ktons capacity 13,000 sites mapped for remediation with an estimated cost of 5 billion euros over the next 10 years Plant & Equipment expansion Gerotto EAR acquisition strengthening the provision of machines (robots) for remote use New soil washing plant
Page 22
Waste growth targets Ebitda growth (m€, Cagr adj.) 22 366 481 2024 Energy Price Normaliz. Collect. Treatm. SRM Plastic Soil Remed. M&A E2029 Ebitda growth (m€, Cagr adj.) Highlights STRUCTURAL CAGR +8% DIVERSIFIED SET OF GROWTH LEVERS BOOSTS PROFITABILITY URBAN WASTE VOLUMES (mtons) SPECIAL WASTE VOLUMES (mtons) 2.3 3.3 RECYCLED PLASTIC (% vs 2017) +41% 2.1 4.6 +145% 2024 E2029 SOIL REMEDIATION VOLUMES (ktons) 435309
Page 23
23 Among best in class
Page 24
Networks growth targets DEVELOPMENT CAPEX UNDERPIN GROWTH IN ALL BUSINESSES 24 519 637 2024 Water Gas dist. Elect. dist. District Heating M&A E2029 Ebitda growth (m€, Cagr adj.) STRUCTURAL CAGR +4% Highlights WATER LOSSES WATER REUSE 31% 11.9% PREDICTIVE MAINTENANCE 85% 28% 14.5% 99% 2024 E2029 H2 MIX Ready
Page 25
Networks improvement drivers RESILIENT ASSET BASE INCREASE OF 30% TO 4.7 b€ WITH PROTECTED RETURNS 25 Water Gas distribution Electricity distribution 1.9 2.6 '24 E'29 6.1% 6.1% 6.1% '24 '25 E'26 E'27 E'28 E'29 RAB (b€) 1.2 1.5 '24 E'29 0.4 0.6 '24 E'29 WACC (%) 6.5% 5.9% 5.9% '24 '25 E'26 E'27 E'28 E'29 RAB (b€) WACC (%) 6.0% 5.6% 5.6% '24 '25 E'26 E'27 E'28 E'29 WACC (%) RAB (b€)
Page 26
26
Page 27
Closing remarks TSR BP TARGET UNDERPINNED BY STRUCTURAL GROWTH ONLY 27 Solid F2025 results Confirmed double digit TSR Conservative E’29 Net Debt / Ebitda at 2.6x New Dividend policy Room to fund further growth
Page 28
28
Page 29
Business plan main assumptions 29 ELECTR. PRICE (€/MWh PUN) GAS PRICE (€/MWh TTF) 108.5 28.0 OIL PRICE ($/barrel) 79.9 INFLATION (%) 1.0% 93.0 26.3 71.0 2.0% 2024 E2029 COST OF DEBT (%) 2.8% TAX RATE (%) 29.1% 3.2% 29.5% MAINLY PASS THROUGH ITMES
Page 30
Capex plan by year 30 846 1,037 1,043 987 946 917 2024 E2025 E2026 E2027 E2028 E2029 CAPEX PLAN (m€)
Page 31
Refinancing needs 31 500 500 900 500 E2026 E2027 E2028 E2029 REFINANCING NEEDS (%) 600
Page 32
Water targets 32 297 361 2024 E2025 E2026 E2027 E2028 E2029 EBITDA GROWTH (m€) 600 262 315 2024 E2025 E2026 E2027 E2028 E2029 CAPEX (m€) STRUCTURAL CAGR +4% TOTAL CAPEX 1.5bn€
Page 33
Waste targets 33 367 481 2024 E2025 E2026 E2027 E2028 E2029 EBITDA GROWTH (m€) 600 221 146 2024 E2025 E2026 E2027 E2028 E2029 CAPEX (m€) STRUCTURAL CAGR +8% TOTAL CAPEX 1.2bn€
Page 34
Electricity targets 34 322 402 2024 E2025 E2026 E2027 E2028 E2029 EBITDA GROWTH (m€) 600 142 209 2024 E2025 E2026 E2027 E2028 E2029 CAPEX (m€) STRUCTURAL CAGR +11% TOTAL CAPEX 1.0bn€
Page 35
Gas targets 35 571 482 2024 E2025 E2026 E2027 E2028 E2029 EBITDA GROWTH (m€) 600 209 237 2024 E2025 E2026 E2027 E2028 E2029 CAPEX (m€) STRUCTURAL CAGR +0.4% TOTAL CAPEX 1.2bn€
Page 36
Disclaimer 36 600 This presentation contains forward-looking statements regarding future events (which impact the Hera Group’s future results) that are based on current expectations, estimates and opinions of management. These forward-looking statements are subject to risks, uncertainties and events that are unpredictable and depend on circumstances that might change in future. As a result, any expectation on Group results and estimates set out in this presentation may differ significantly depending on changes in the unpredictable circumstances on which they are based. Therefore, any forward-looking statement made by or on behalf of the Hera Group refer on the date they are made. The Hera Group shall not undertake to update forward-looking statements to reflect any changes in the Group’s expectations or in the events, conditions or circumstances on which any such statements are based. Nevertheless, the Hera Group has a “profit warning policy”, in accordance with Italian laws, that shall notify the market (under “price-sensitive” communication rules) regarding any “sensible change” that might occur in Group expectations on future results.