Good afternoon. Thank you for connecting to the presentation of the Acea Group results as of September 30, 2021. Mr. Giuseppe Gola, the CEO, and Mr. Fabio Paris, the CFO, will now illustrate the presentation, and then we'll have a Q&A session where Giuseppe Gola and Fabio Paris will be present together with Stefano Songini , the Director of Investor Relations and Sustainability, and myself. Giuseppe, the floor is to you.
Good afternoon, Ira. Good afternoon, everyone. The results as of September 30, 2021 are still very good. We are in a good trend continuing on the results of the first half of the year. Page two of the presentation shows the main financials. EBITDA stands at EUR 930 million for the first nine months, +8% vis-a-vis the previous year.
We also have a net profit of EUR 249 million, which is +14% over the previous year. CapEx stands at EUR 684 million, +9% over the previous year. Net debt stands at EUR 3.998 billion, with a ratio of net debt over EBITDA at 3.26x . These results allow us to confirm the guidance, which you may remember. We confirm the guidance of 2021 with EBITDA, which is expected to grow in excess of 80% over 2020. CapEx is also confirmed in guidance. It was set at about EUR 900 million.
We also confirm our guidance on the net financial position, which is expected to stand in a range between EUR 3.85 billion and EUR 3.95 billion. Following page shows the leading events, the main happenings, the main projects we have been involved in and the results of 2021. We'll review them briefly together. In January 2021, we were very successful in placing the first Green Bond for a grand total of EUR 900 million, of which EUR 300 million was a tranche issued with a negative yield. Fitch Ratings confirmed long-term issuer default rating as BBB+ with a stable outlook. In between April and June 2021, we've been very active on the commercial front.
We have launched the electric-powered vehicles offer with Acea e-mobility, and we also launched a Luce 100% green and gas 0% CO2 offer. All of our commercial offers were presented with a zero impact, zero CO2 emission flavor. In May 2021, Gaïa Rating gave us a score of 78 over 100 in the overall rating of ESG performance. Our rating improved for the third year in a row. June 2021, Standard Ethics improved our corporate rating from EE- to EE. July 2021, we announced the acquisition of two companies operating in plastic recycling. In particular, I'm referring to the purchase of 70% of Serplast and 60% of MEG.
In September 2021, we went through with another acquisition, a bigger one this time. We acquired 65% of the Deco company, which is a company that operates in the disposal and recovery of waste in the region of Abruzzo, with an installation that treats about 300,000 tons per year. Throughout 2020 and 2021, we have worked a lot on photovoltaic. We've worked out many new plants for total installed capacity of 69 MW today, and we are working on future or ongoing plants for another 51 MW. In the meantime, we also worked on selecting a financial partner, and this project is actually going on as scheduled.
In October 2021, we have announced an agreement, a relevant agreement for the Consorzio Interuniversitario Nazionale per la Scienza e Tecnologia dei Materiali to develop circular economy initiatives. Now, let's look at the economic and financial performance in more detail. For the first nine months of 2021, consolidated revenue stands at EUR 2,765 million, up nearly 12% over the previous year. EBITDA is EUR 930 million, + 8.3%. EBIT stands at EUR 459.7 million, +7.9% over 2020. The group net profit is EUR 248 million, up 13.6% over the previous year. CapEx stands at EUR 684 million, which means + 9.4% over the previous year.
Net financial position is EUR 3,998 million, which means +13% compared to December 2020 and September 30, 2020. Let's switch to page five. This shows the performance by business area, in particular, as far as EBITDA is concerned. EBITDA is EUR 930 million, and the contribution to growth is EUR 31 million from water, which reaches at a grand total of EUR 489 million. EUR 3.8 million of EBITDA comes from energy infrastructure and distribution, which is EUR 275 million + EUR 3.8 million. Generation also gives an important contribution to growth, and it stands at EUR 53.7 million + EUR 18.5 million.
Commercial and trading stands at EUR 56.2 million, up EUR 6.2 million. Environment is EUR 49 million + EUR 9.5 million. Other businesses and the holding company grew by EUR 2.5 million. Here, we also show the changes in the scope of consolidation which we incurred in the last 12 months, which gave a contribution to growth. In particular, +EUR 10 million was the contribution of the consolidation of SII Terni. You may remember that in November last year, we have closed this deal. The acquisition of Distribuzione Gas, which has now been merged with Pescara Distribuzione Gas and renamed Adistribuzionegas, had an impact of + EUR 2.7 million. The acquisition of Ferrocart and Cavallari, the waste treatment plant, gave a contribution of EUR 2.3 million.
The acquisition of SIMAM, which we concluded in May last year, gave +EUR 1.8 million. All the photovoltaic developments were +EUR 2.2 million, and the Consorcio Acea and Lima Norte contributed EUR 0.8 million. Net of that new scope consolidation, the organic growth of EBITDA was +6%. Now let me yield the floor to Fabio Paris, who's going to present details of individual business areas and other quantitative data.
Thank you, Giuseppe. We are at page six in the presentation now, so we can see some results for water to begin with. As the CEO just announced, all businesses are actually up and growing, and this is also true for the water business. The EBITDA grew by 6.8% in this business, and this was actually seen in all the companies in the water business, with the only exception of Ato 5. You may remember we have discussed this before. This is due to tariff reviews which were implemented during 2021. Growth is mainly due to Ato 2, which in relative terms is the biggest company in the water business. This is due to an effect which is closely connected to the operational efficiency which we are able to obtain during this period of time.
The results of the water business for the first nine months of 2021 was also helped by the consolidation of SII Terni, which happened in November 2020, and the new scope extension for Distribuzione Gas, which is actually the outcome of the merger between Alto Sangro and Pescara Distribuzione Gas. This new scope was actually making a reference to what used to be Alto Sangro. Let's move to page seven. This shows the performance of the energy infrastructure business. Energy infrastructure also helped increase EBITDA. The performance was +1 .4% here, and this performance can be broken down to show that the improvement for electrical distribution, and in particular, the Areti company, stands at 2.2%.
Whereas, for effects coming from activities performed in connection with the resilience plan, this is also due to the commercial partnership with Open Fiber. Now, this performance may actually mitigate the reduction which has been posted in the public lighting business. Here, we reduced the business by EUR 1.2 million, and this is mainly due to the lack of authorization for new assets in the public lighting business, which implied a decrease of EUR 2.1 million. Let me remind you that, as of 30th September 2021, which is when we finally completed the installation of second-generation meters, during the first nine months, the group has installed 290,000 new 2G meters, which is fully in line with the expected rollout plan.
Should we move to page eight? This shows the performance in the generation business. Here again, we can actually post a significant growth in terms of both EBITDA and CapEx. The main economic effect is driven by the increase in the price of energy and by the volumes of hydroelectric energy produced over the whole year. Let me remind you that in the same period last year, we had posted a lower rainfall data, and so we ended up having lower volumes of hydroelectric production. This period's results were also due to the developments of this new business area, which is photovoltaic, which posted +EUR 3.4 million, of which EUR 2.2 million were due to the change in scope of consolidation. The new photovoltaic plants, we have now reached the total installed capacity of 69 MW.
Whereas plants under construction, most of which are pretty advanced in construction. As of September 30, 2021, they account for another 51 MW. Let's move to slide nine, which shows the performance in the commercial and trading business. Here again, all performance indicators are going up for this business area as well. EBITDA is up 12.4%. CapEx is also increasing quite substantially. The increase in margins is mainly due to the margins on the free market, both thanks to the increase in the volume of energy sold, which is up by 33.2%. This is also due to the price effect, which has been actually characterizing this time on the market. EBITDA also grew thanks to the improved margin on gas sales. This accounted for +EUR 9.9 million.
The reduced margin on the enhanced protection market, which meant EUR -2.1 million. Let's move to page 10. This shows the environment business area. Here again, there is a significant growth of EBITDA, + 24%. EBITDA in the first nine months of 2021 was up to EUR 49 million. Growth was mainly due to the effect of margins on waste-to-energy installations. Energy was sold at higher prices, and we also posted an increase in the volume we have processed. Let me also remind you that there was a scope change in this area, too, because we went through with some M&A deals, and we'll give you a snapshot of the ongoing deals, too.
As our CEO pointed out earlier, in April 2020, we acquired Ferrocart, which actually contributed to this period's results for EUR 2.3 million. Also, we performed another acquisition a couple of years ago for a revamping activity of a sorting plant, which is Demap. We actually may remind you that Demap is a company which is active in the revamping and sorting for plastic packaging. Another update I'd like to share with you, as the CEO said, is that we have signed an agreement to acquire Serplast and MEG that together handle about 67,000 tons per year of waste. We also have an agreement to acquire 65% of Deco that has a production capacity of 270,000 tons per year.
Let's move to slide eleven. This shows EBIT and net profit. The growth performance is also confirmed in the lower part of P&L. EBIT is up 7.9% from EUR 426 million in the same period last year to EUR 459.7 million in the first nine months of 2021. Net profit grew from EUR 218.7 million in 2020 to EUR 248.6 million in 2021, i.e., a 13.6% growth. Tax rate, which characterizes the current year, is 29.8% versus 30.5% last year. Let's now focus on the most relevant items under EBITDA. There was a variation on depreciations.
Depreciations increased, in particular because of the growth of CapEx in the previous years in all business areas. As to impairments, these are in line with the growth of revenue. The increase is mainly due to seasonal factors and to correlation with the increase of business volumes. Now let's move to slide 12, where we can see a key focus on our CapEx and investment activities. All business areas are involved in the growth of our CapEx. The only literal exception being energy infrastructures. CapEx will increase from a total of EUR 625 million in 2020 to EUR 684 million for the first nine months of 2021.
In particular, most of the growth is due to the water business area, which is also the biggest relative contributor. It has CapEx of EUR 373 million. This is mainly connected to the management of the water integrated service, i.e. the repair and extension of water and sewer pipes, the extraordinary maintenance of plants and networks, development and treatment plants, and once again, the consolidation of SII Terni, which was a scope change. The CapEx for the energy infrastructure business area gave a contribution of EUR 197 million.
This is mainly due to the upgrade and expansion of the grid, then the so-called resilience plan, which is one of the drivers that really have an impact on the economic situation of this period, and the installation of the 2G meters, which is actually reaching full rollout during this year that we are completing this installation plan. The other business areas also contributed to growth, including generation, +EUR 30.5 million in terms of contribution through the extraordinary maintenance of plants such as Tor di Valle, which is a production plant, and the construction of some photovoltaic plants. The other businesses are commercial and trading, which is characterized by the costs due to customer acquisition and IT systems.
Within commercial and trading, we also included the e-mobility projects that characterize most CapEx invested in this period. This business area saw a contribution of investments of about EUR 23 million for the environment business, in particular with the work we did on the Orvieto landfill. We changed in scope of consolidation of Ferrocart and Cavallari, and we also constructed a new concentrator at Berg. CapEx overall keeps being characterized by a concentration of, well, 83% on regulated businesses, and the remainder is invested in non-regulated business. Now let's shift to cash flow, page 13. Here we can notice that higher absorption of working capital during this period was about EUR 64 million more than last year.
This is mainly due to the activities we implemented during this period of time, in which we have seen a sharp increase of energy prices. The government stepped in with some measures to try and give some protection to end users. All the government decisions on systems costs were actually having an impact on our accounts. The temporary effect was a mistiming of working capital, which was due to the mistiming between the moment when we cash in our prices and the effect of the new prices kicking in. Another effect is the dynamics of the energy prices in this period again, which meant there was an increase in the volumes of goods sold, mainly due to higher prices.
Now, if we look at the cash flow statement, we can see that CapEx accounts for about EUR 670 million. I would look at the taxes paid, which is actually much higher than last year. This is a direct consequence of the improved performance that the group has posted throughout these months. I would also look at dividends paid in this period, which was paid out in June. Shall we move to page 14? This shows our financial structure. The group's net debt increased compared to the same date last year. Sorry, compared to December 31st last year, it increased by EUR 470 million, and the debt structure is still absolutely stable.
Fixed rate stands at 85%, whereas thanks to the issuing we did at the beginning of the year, in particular, I'm referring to the Green Bond, which was placed for EUR 900 million in two tranches of EUR 300 million and EUR 600 million. The direct consequence of this first Green Bond was a decrease of the average cost, which now stands at 1.42%. The average duration of the debt is 5.3 years. As we reported already in the past, there's actually no significant component of debt which is expected to be falling due before 2022. The rating for the group for both Fitch and Moody's is stable.
As far as the outlook is concerned, Fitch rates us as BBB+, whereas Moody's rates us as Baa2. As to sustainability ratings, CDP rates us as A- with a leadership position. Standard Ethics gave us a rating of EE. Let me remind you that Standard Ethics upgraded its rating in June 2021 and gave us a positive outlook. Whereas the rating that Gaïa gave to the group was 78 out of a total of 100, and an improvement of the rating for the third year running for the group. This is all from me, and I will yield the floor back to Ira.
Thank you. Thank you, Fabio. We can actually start the Q&A session.
Yeah, this is the Chorus call operator speaking. We can start the Q&A session at this stage. If you do have questions, please, press star one on your phone. To exit the list of questions, please press star two. Please ask your questions using your receiver. If you do have a question, please press star one now. First question is Javier Suarez of Mediobanca.
Good afternoon, everyone. Thank you very much for your presentation. I actually have three or four questions. My first is about working capital. Of course, there's a worsening of about EUR 60 million due to the measures that the government decided to try and contain the impact of the higher electricity and energy prices.
Could you please provide us with some information about what this delta working capital might be for the end of the year, and what's the underlying performance? This is also very important to try and understand how to contain the impact of this worsening of working capital. What's the underlying performance that you're aiming at? That's my first question. The second question is about the commercial and supply business. We know there was a pretty strong expansion in this business, in the amount of clients, too. Could you please provide us with some information about the individual brands active in the electrical energy sector? Could you please give us some indications about the margins in this part of the business? That would be very interesting.
Another question is, did you see any impact from the increase of raw material prices? Finally, do you already have any preliminary contacts with the new administration of the city of Rome? Did you see any change happening there? Can you share some information with us? Thank you.
Okay, I'll try and answer your questions. The impact on working capital, this is mainly due to the effect of the increase in energy prices. Because the increase in prices means an increase in volume sold. This is a rolling effect, and I expect a part of that may actually go back to normal before the end of the year, whereas another part will actually go back to normal in the following year.
We also have a part on the so-called system charges, which I don't expect to go back to normal before the end of the year. We'll need to try and understand whether this will become a permanent feature or whether it's just a temporary feature that the government will only keep going for a limited amount of time. We now stand at EUR 60 million working capital more than last year today, and I well, by and large, I should say that maybe 50% of that should go back to normal before the end of the year and the remaining 50% next year. This is connected to this effect due to the increase of prices. Also, the increase of working capital is fully in line with what we saw last year.
There's no particular structural phenomenon due to nonperformance in credit management of payments or receivables or whatever. It's mostly due to external factors. Your second question was about the commercial and trading business. We are working on margins for individual clients. Today, the margins for clients on the free market are improving slightly this year. I should say stable or slightly improving and increasing, whereas margins are stable on the protected markets, enhanced protection markets. Should we look at an energy client on the free market today, the margin on a yearly basis is about EUR 120, whereas energy clients for the enhanced protection market have a margin which stands at about EUR 45.
Of course the impact on the total economics of the commercial and trading business, as clients increase in the free market and gas business where we have bigger margins. This is certainly the plus side, and this will balance out the loss of margins from the enhanced protection market. Also as far as commercial and trading is concerned, starting from July 1st, we had to give up 18,000 SMEs in the enhanced protection market because an auction was organized for the protected market, and we didn't turn out to win it. Eventually the EBITDA margin of those clients overall is nearly EUR 5 million per year. That give you an overall picture.
As to the raw materials prices and their impact, well, the overall impact on the group. Personally, I'm really satisfied to see, especially as far as the price of energy and gas are concerned, I'm quite satisfied to see how the group was able to react to this. We didn't suffer any negative impact, just this temporary impact on working capital. We did have good impacts, which are not maybe huge, but quite relevant as far as generation is concerned. Because both for hydroelectric generation and waste-to-energy generation, we have installations that work in a very profitable way, and so they took advantage from the increase of energy prices. This is the main impact we have posted.
As far as the economic management of the commercial area is concerned, we didn't feel the impact of the energy price increases. Because we've been really conservative, so we always hedge whatever energy we need to purchase with 12-18 months of advance. We didn't really have to buy energy at the higher price that it trades at today. As to your question, in terms of our contacts with the new administration of the City of Rome, I should say that we expect no big changes, no big news there. The City of Rome is a 51% shareholder, and, well, as you think, I have no comment on that, but I don't really expect anything particular, anything special to happen in view of the new city administration.
Thanks a lot. We now have a question from Enrico Bartoli of Stifel, please.
Good afternoon, everyone. I also have a few questions. I'd like to start with solar and photovoltaic. We read in the papers that you're reaching the finance stage in selecting the financial partner. Can you please give us some details about the possible timing of this deal? Also, could you please give us an indication of the EBITDA of solar plants and how much they contributed for this nine-month period? Would you please share with us some details on the type of revenues that these installations allows? How many of these are energy installations? How many were involved in auctions? What do you expect in the evolution of installed capacity this year and in 2022?
I'd like to go back to the supply issue. If I calculated that right, in the third quarter, the supply EBITDA is lower than it was last year. Whereas in the first two quarters of the year, the comparison was quite significant. There was an increase in free market customers. In the third quarter, did you have any particular impact? What should we expect for the last quarter of the year? I have another question, which is again on the new administration of the City of Rome. There were changes in the top management of AMA. Do you think Acea is expected to be involved in the plans of the new mayor of Rome to improve the efficiency in waste management in the Rome area? Thank you.
Thanks. Your first question was on photovoltaic. I'm not in a position to give you many more details now. What I can tell you is that the project is going on as expected. We are fully in line with our original scheduling as far as timing goes. I'm reasonably confident we will be able to close on time before, at the end of the year. Closing may actually happen, yeah, before the end of this year, at least partially or very early next year. We're—it's just a question of technical timing. The whole process is actually going on as scheduled and as expected.
Now, as far as the installed capacity is concerned, the deal we are working on right now is a deal for 110 MW, and of those 110 MW, a significant part will become available in the next two or three months. We actually completed our plants. We just need to hook them up to the network. Overall, EBITDA generated by these plants on a yearly basis will be about EUR 20 million. If we look at the overall EBITDA of photovoltaic in the nine months, that was about EUR 14 million. Now, commercial and trading. Well, I have anticipated a few notes on this already. In absolute terms, third quarter was well, had the same profitability as the second quarter.
In comparison with last year, we had quite a few non-recurrent positive costs and items. Compared to last year, the third quarter is decreasing slightly. As to the growth rates, I can tell you that for the fourth quarter, we expected to go up to EUR 20 million. Without considering those non-recurrent items, we expect the fourth quarter to be stable compared to last year. The overall EBITDA for the end of the year should be about EUR 8 million. As to your question on the new administration of the city of Rome, well, once again, right now, I mean, I'm sure that the new administration is really busy taking office. So far, we had no particular interaction with them, with the new administration.
What you mentioned, AMA, this is something that concerns AMA, not Acea. However, I don't really expect any substantial changes in the organization of Acea or our action in the city of Rome. Of course, this is what I can tell you from the Acea side. Of course, I'm not offering any comments from the city administration side. Thank you.
Next question is from Stefano Gamberini of Equita SIM.
Good afternoon, everyone. I have some questions, too. The first is about the year-end guidance for CapEx, EUR 900 million of CapEx. Do you confirm this even though working capital is worsening? As far as M&As are concerned, we're speaking of EUR 20 million invested during these nine months. There's another acquisition of Deco that you had disclosed back in September. Do you expect this deal to go through before the end of this year, or is it gonna happen next year?
Also, if I remember correctly, you were looking at more acquisitions. There were a couple of you were thinking about. Could you please give us your view about this, too? I'd like to try and understand whether your guidance on CapEx, even the working capital is worsening, also includes this EUR 100 million of M&A or whether it's EUR 20 million for M&A. If I got you right, working capital will worsen by about EUR 30 million. My second question is a clarification on working capital. I was looking at the first nine months of 2020.
The trend is actually similar to the first nine months of 2021. Actually, 2021 is higher. Then at the end of the year, last year, we had an impact of EUR 40 million. A big reabsorption during Q4. Can we expect the same trend to strike in this year, too? Can you please try and explain why there is this big impact in the last quarter? Also, there's an extra EUR 20 million, which is actually higher than the normal provision. Can you please explain that and help me understand it a bit more. Finally, I'd like to understand what contribution you have from overseas and engineering and services. If I remember well, in the first six months, overseas was a business area that gave a major contribution. Could you please update us on the performance of overseas and engineering and services, too? Thank you.
Okay, as far as the question on guidance is concerned, I confirm the guidance. In particular, we can confirm guidance for CapEx. It may actually be a bit higher than EUR 900 million, but it won't change too significantly. Based on that, we can actually confirm our guidance on net debt too. As far as the guidance on net debt is concerned, the fourth quarter is very seasonal every year. I mean, it's not just exceptional for last year. There's always a decrease of the absorption of working capital in the fourth quarter. This is a typical seasonal effect which we expect to record this year too. Quite possibly this year because of the effects we have commented upon earlier.
This recovery is likely not to be as high as it was last year. I said it earlier, we expect EUR 30 million-EUR 40 million more working capital by the end of the year. Because of this, the guidance on debt is confirmed in the range between EUR 3.85 billion and EUR 3.95 billion. It's likely to end up in the higher part of this possible range. However, of course, everything is compatible with the fact that for M&A, we are going to close the Deco deal, whereas we don't expect to close any other M&A deals before the end of this year. Without considering the possible impact of consolidation of some photovoltaic transactions, which may actually substantially reduce the net financial position. You were talking about delta funds earlier.
Well, this is only due to some operating items. We have delta funds on some credits which accounts for about EUR 8 million. Another relevant component is the variation of severance and termination funds for about EUR 10 million. I think there's still a pending question.
Yes. First, do you have any other acquisitions going on, or are you gonna give us some color on any other acquisition deals? The other question was about the performance of the overseas and engineering and service business areas.
Okay. Let me answer you about the EBITDA of the other business areas, and then the CEO will answer the first part of your question. As far as the overseas business area is concerned, EBITDA for the first nine months is about EUR 21 million. For the engineering and services, it's about EUR 12 million. The EBITDA of the holding company is -EUR 25 million.
As to other M&A deals, I said it earlier, we don't expect anything else to happen during this year, which doesn't mean we're not working on it. We still work with great care.
Sorry, we lost your audio.
Sorry, I got cut off. As far as M&A is concerned, as I told you earlier, we don't expect to close any other deal but Deco before the end of this year, which does not mean we're not working on other deals. We're still keeping some channels open, especially in the waste treatment area, but we don't expect them to go through before the end of the year. Overall, I think we may close the Deco deal before the end of the year. The increase in net debt should be anywhere between EUR 70 million and EUR 80 million for M&As. Thank you.
If you have questions, please press star one. We have a question from Emanuele Oggioni of Kepler Cheuvreux. Please.
Good afternoon. Just a follow-up question on the renewables deals. I think that the deal also includes projects in the pipeline. In the past, you had given us some details about this too. Also, we understand that in recent transactions this is becoming an increasingly important element to assess the whole business. We're not just looking at the existing operating under construction part, but also we're looking at the pipeline of ongoing deals depending on the state they are in. Can you please update us on this part? Thank you.
Well, we are developing a very important pipeline there. Actually, the target is about 750 MW installed by the end of 2024. So far, we can confirm that target. The deal we're working on is the search for a long-term financial partner to go through with these deals, but also to work in the future on any possible further development. As we speak, I cannot give you any new detail about this. We're still in the selection phase. Thank you.
If you have more questions, please press star one. There are no further questions at this stage.
Okay. Thank you. Thank you for connecting in. The investor relations office is always available for any further questions or any information. Thank you all very much. Thank you, and see you soon again when we'll present the clear results. Thank you.
This is the conference call operator. The conference is now ended. You can disconnect. Thank you.