Good afternoon, and welcome to Hera Group's new business plan to 2029 presentation. The floor now goes to Mr. Cristian Fabbri, Hera's Executive Chairman.
We are here to illustrate our business plan today, but as usual, let's begin by giving you our best possible forecast regarding 2025 results. With an EBITDA which stands above EUR 1,530 million, with a net profit which stands above EUR 460 million, up 4% compared to last year, and with a net debt-to-EBITDA ratio which is lower than 2.6 times.
This is a very positive result for us, allowing us to be stable as far as debt is concerned compared to the previous year, with a further growth in profit despite the fact that, as you can see on the graph on the right-hand side, we had a sharp dip in temporary opportunities, which, as far as net profit is concerned, have been entirely offset by organic growth. Over the past six years, temporary opportunities have given us a cumulative EBITDA contribution worth EUR 900 million, a major contribution, which allowed us to grow rapidly, and that is something that we are now offsetting by keeping our growth while standing at considerable net profit levels. We still have a slight dip of the contribution from temporary opportunities that will be observed next year, but we're quite satisfied with this overview of the 2025 results.
Now, moving on to the business plan more specifically, we can begin by basically confirming our multi-business model, a model which is supported by economies of scale. As you know, when it comes to all of the main businesses, we are now among the market leaders in terms of size. This allows us to have business-specific synergies, but it also allows us to create synergies in our activities portfolio. This is a model which allows us to transfer innovation and ideas from one business to the other, ideas which begin on a specific business and which are then transposed to other businesses, but it also allows us to transfer the cash flow generated by some businesses to others as a way of creating opportunities or to secure the cash generated. The fact that we're a multi-business model also allows us to have a number of growth drivers.
It also allows us to seize opportunities in the various markets we operate in. Plus, we can have a higher customer loyalty rate by working on our service portfolios that we offer to our customers, but we also leverage on the investments we can make in our customer management system that, of course, benefits quality, given the fact that thanks to synergies, our costs are lower. Now, moving on to the strategy we have defined for each single business, we can begin with the sector's macro trends. Now, summarizing everything in one slide is a little complicated, although we did try to extract the main elements, both when it comes to macro trends but also when it comes to our strategy for the various macro titles, the macro items. Beginning with water.
As you know, in the water business, we face extreme weather events, from floods to extreme rain to droughts. We live in a context in which European regulations and how they are transposed in Italian legislation is marked by an increase in restrictions when it comes to purification, with a specific focus on lowering pollutants. Therefore, this sector requires investments, and, of course, we also have to face a very relevant infrastructure gap in the sector. Of course, in the past, our assets were able to benefit from major investments, meaning that currently they are perfectly adequate, but we have to continue to allow them to evolve by continuing to be in line with these trends, which amplify their impact, and will do so especially in the future. That's why we are working to increase the availability and procurement of water.
We are working to reduce leakages in our water distribution activities, and we're also working to improve all of our activities when it comes to sewage. Keep in mind that our sewage systems date back to many years ago in some locations, whereas the newer parts of the sewage systems were designed also based on rainfall levels. And in the past, these extreme events used to happen every 15 to 20 years, whereas nowadays they tend to happen every year. So even in this sector, we have worked on improving our infrastructure. We are also boosting and reusing water. And as we do this, as we invest in this direction, we also use innovation and digitization to maximize our impacts and to obtain efficiency on the entire system.
Moving on to energy, if we look at the evolution of trends, even on a 15-year span to 2040, what we see is that energy consumption, or rather final energy consumption, will be reduced by 20%. An increasingly large of final consumption will be driven by electricity, both due to global warming and due to efficiency, and the trend we're seeing will be reduced. But in 15 years' time, we will still be facing a situation in which a third of the final consumption will be supported by gas and a further one-third by electricity. So basically, we are facing a major demand for energy efficiency, for decarbonization of consumption, and infrastructure which needs to be capable of dealing with the energy transition. Now, what is our strategy? When it comes to gas, we will continue to make sure networks are efficient.
We will continue to invest to make sure that they are up to par so that they can be ready to manage green gases, which are another new element in our networks which will help decarbonization, and when it comes to the electricity grids, we will be increasing our hosting capacity. During the business plan period, it will be up 30%, and with all of these investments, we will also be working to continue to improve efficiency in managing our infrastructure. When it comes to sales and our activities to support renewable energies, even here, we have a clear strategy. Namely, we want to continue to help our customers in their decarbonization path through offers regarding energy efficiency and regarding the development of renewables linked to consumption centers, with a focus on customers and consumption centers, which means to have proximity-driven plants.
What this means is that despite being owned by us, with long-term contracts, we can supply energy directly to one or two major industrial customers, and we are also going to implement CRM. When it comes to customer loyalty, we have a good service level, but our goal is to continue to improve services to customers, both when it comes to our physical networks, but we also want to improve our relations and marketing through the support of our artificial intelligence, something we're already using and we want to continue doing throughout the business plan years. Moving on to the waste business, you are well aware of the situation regarding infrastructure in Italy, and you also know that European directives are becoming increasingly stringent when it comes to the circular economy to boost reusing primary and secondary materials.
This, of course, gives us plenty of opportunities to expand along with the very fragmented sector. So our strategy is very straightforward. We want to expand our plant capacity so that we can expand our ability to treat waste in our plants. We want to continue to increase our intermediation activities on waste. Plus, we also want to explore new circular economy potentials along with continuing to improve our global waste management services, the ones we offer to our customers by increasing our activities portfolio and also expanding our customer base. Moving on to our strategic priorities, the ones that we want to focus on, there is a certain degree of continuity in our activities. We have a very strong focus on value creation. We want to make sure that our growth isn't purely based on volume. We also want to increase profitability.
At the same time, we also want to continue with our hedging model, allowing us to sterilize the impact of all external macros, such as inflation, the cost of money, the fluctuation in energy prices, which, due to how the business is made and due to our choices, we try to fully hedge, and our multi-business model is very helpful in this regard because, as I was saying earlier, we have different drivers leading to growth, and therefore we can allocate lower risk when it comes to the execution of the drivers. Although in the past, I think it's safe to say that we never had any major negative surprises on execution. Sustainability is also a theme which has always been a part of us, not as a cost, but as a further opportunity to create value.
Because in this regard, we want to take advantage of all of the new constraints and targets set by the European Union so that we can find the right space between obligations and incentives, allowing us to work in different sectors and supporting customers to find room for profitability in the development of our assets and in the things we want to do, which means that we will continue with these strategic priorities and we will continue to allow our business to evolve and grow. Now, let's take a look at what we intend to do when it comes to the three main pillars in our strategic priorities, beginning with value creation. On the left-hand side, we have the internal part of the company. On the right-hand side of the slide, you can see the effects in terms of total shareholder return.
Beginning with inside the company, you can note that our goal is to continue to have a 400 basis points spread, and the difference between our ROI in the sector is WACC, with a structural ROI growth. In 2024, we had an 8.8% ROI, which is the structural ROI net of the temporary opportunities contribution. So we want to have growth and structural profitability at a 25% growth in net invested capital, which means that these are the two levers we want to use to increase profitability. If we then look at the effects on total shareholders' return, structurally speaking, if you consider the structural EPS, we have a 6% growth and a yield on dividend per share, which is above 4% on average throughout the business plan, which means that we are confirming a double-digit TSR.
Moving on to the topic of resilience, you are familiar with our approach to hedging linked to the external macros, which may have an impact on our business. We want to have full control on the business. We don't want to be exposed to any volatility coming inside the company from the outside. We want to reduce how exposed we are. As an example, I can cite the hedging on commodities, especially energy, which, as you know, has proven to be very effective even in times in which prices went up in a major way.
When it comes to long-term risks linked to climate change, we have been working for quite some time on improving our assets and networks' resilience, and we will continue doing so because this helps us, on the one hand, to improve the overall profitability, and on the other, it reduces any potential impact there may be from any extreme events on our businesses, which gives us a double advantage in the future. If we turn to the topic of sustainability, we confirm that we will continue working on three macro axes: decarbonization, which means that we are confirming our path towards net zero in 2050, and even here, our goal is to work together with customers to extract value both for ourselves and for them throughout this process. EUR 1.3 billion of our investment plan, which accounts for EUR 5.5 billion totally, will be invested to improve this axis.
2 billion will be used to implement all of our goals linked to the circular economy, whereas EUR 2.6 billion will be focused on improving the resilience of our assets. I kept innovation as the last topic. Innovation, when it comes to strategic levers, is underlying in all businesses. And when it comes to innovation, we work in a number of different directions. On the one hand, we want to innovate our assets. Think of the frontier activities we're working on when it comes to carbon fiber or rigid plastics. We are basically opening up new business opportunities and growing volumes on that part of the market. We're also working on cutting-edge initiatives such as hydrogen. In this case, our investment is almost entirely financed by National Recovery and Resilience Plan funding. And next year, two of our plants will be up and running.
If we then focus on technology, in this case, this is a very broad world, of course, because in this case, we can use both traditional technology to improve the digitization of our assets and networks, which leads to us having two effects. On the one hand, we can better control our activities remotely by increasing the efficiency and effectiveness on our networks. But we also want to be able to acquire data sets that can help us evolve the business with prediction-based models. Along with these applications, which use more traditional technologies, but which we apply to make our business more digital, we also have innovation regarding certain types of equipment. We have patented our gas meter, which has safety features linked to earthquakes or a cut in gas in households.
It is able to detect gas leakages in the household to guarantee the safety of those who use gas. But we also have valves, which we use on our gas networks, which can be used remotely, allowing us to intercept gas leakages increasingly swiftly to improve safety, but also to reduce methane gas emissions. And then we also have devices that can help us measure climate change and rainfall levels to detect any possible landslides or land movements, which in the long run can lead to damage. And even in this field, we are investing so that our networks can be equipped with these types of devices and equipment. Finally, artificial intelligence can support our business.
In our networks, for instance, we use digitization and AI to create the digital twins of our networks, allowing us to better manage our flows, but also to identify damage and focus on predictive maintenance to reduce leakages, allowing us to increase efficiency, but so that we can also allocate capital in a more effective way, as we can do with our investments to renew our infrastructure. But we also have process applications, which we already use in certain areas, specifically the market.
We will have to push in this direction to support both our predictive models through machine learning, but also to use automation that we are going to implement increasingly throughout the business plan years so we can have pieces of our process which aren't supported by AI, but which are built with these agents so that we can further optimize our activities and be increasingly efficient and effective so that we can use our resources to improve performances or for investments. Moving on to our capital allocation strategy, our investments. We have a clear strategy, beginning with three priorities, which act in synergy between themselves. We allocate most of our development to our core businesses with the goal of increasing our investments to accelerate growth on core businesses.
The current investment plan, which is up compared to last year, compared to the previous five-year period, now envisages an investment level which is 40% higher, generally speaking. We also have the goal of keeping a balanced business portfolio because, as we explained earlier, this gives us a certain number of advantages and stability and predictability over time, which allows us to continue to be resilient and profitable in our business.
But it also allows us to maintain a good level of financial flexibility so that we can take advantage of any opportunities which are not included in the current business plan. I was mentioning the fact that our investment plan is worth EUR 5.5 billion, which includes EUR 0.5 billion, which is covered by financing, which don't have to be repaid. This goes to EUR 2.5 billion to maintain our infrastructure and the remaining amount to develop further our infrastructure.
2.6 billion is included in organic development. And in our business plan, we also have an M&A contribution, especially in the waste sector and in energy. 60% of our investments will go to regulated businesses. In this context, let's take a look at the evolution of the profitability of each individual business, taking into account that for the regulated businesses, we have included the evolution of the regulatory WACC, beginning with 2024 and a reduction we've seen in 2025 of the main businesses, which, as you can see, stand at around 6% recognized WACC. But we are also working on the liberalized businesses, especially when it comes to the treatment of industrial waste and waste more in general, which will increase its profitability based on our commercial development and of the new plans that we will be building, moving up from 11% to 13.6%.
Whereas for energy supply, structurally, in 2024, we had a 20% profitability, and we wish to confirm that profitability even in the future business scenario, with a profitability level that we feel is already at a good level and which we want to maintain. Let's move to the development brought about by the investment allocation on each individual business. As you can see, the structural growth of each business is in line in the business plan period so that at the end of the business plan, we will have an EBITDA contribution, which is very balanced between the three business areas. Moving on to a closer look at how we can generate and then allocate our cash flows. In this slide, you can see the various dynamics per business, beginning with waste, a business with a free cash flow equal to EUR 1.6 billion over the business plan period.
After net working capital and maintenance CapEx, we have a free cash flow worth EUR 0.8 billion before our development investments. In this case, we considered both the organic growth and the M&A contribution we've included in the business plan so that we will then be reinvesting the entire cash flow generated because this is the business that we have plenty of investment opportunities in with a good profitability. Energy. In this case, we generate EUR 2.3 billion in operating cash flow. Maintenance investment, in this case, is limited to EUR 600 million, with a free cash flow worth EUR 1.7 billion all in all. We mainly focus on sales to customers.
We have a development investment, which is very limited, and even the investment on renewables, along with the models we were mentioning earlier, which means that we have EUR 1.2 billion in cash flow that can be reallocated partly to support our dividend policy and partly to grow in networks which absorb more cash than what they generate, and therefore, the operating cash flow of the networks is in line with that of the energy sector. This is a very capital-intensive business, and therefore, the free cash flow stands at EUR 900 million, with a reinvestment on development worth EUR 1.4 billion, which leads to the growth of RAB, which means that we will be using the cash flows and we will be securitizing them in the businesses, the regulated businesses, which have major visibility for the future.
Not that we have any concerns for the others, but also because they are linked to our hedging policies, and we will continue to grow in this regard. But obviously, when it comes to maintaining a balanced portfolio, we are working to make sure that our networks grow even quicker than they would on a standalone basis. Now, we saw the overview with a business-by-business breakdown. We can now look at the group cash flows. We'll begin with EUR 6.2 billion in operating cash flow. And then, after having allocated all of the maintenance investments, we will have a free cash flow worth EUR 3.5 billion. EUR 1.4 billion will be used for dividends. EUR 2.5 billion will be used for development CapEx and for M&A.
Then EUR 300 million will be the debt that we will be consolidating for M&A, with an overall debt level which will be up EUR 700 million, which is in line with what we had forecast in the previous business plan, with a financial leverage level which stands at 2.6 times, which is consistent with the level that we expect to have at the end of 2025, which still guarantees a certain degree of financial flexibility for any further opportunities, both in terms of M&A, which still aren't obvious, but which do tend to come up with a certain degree of frequency, which will be focused on the main businesses,
with a very careful focus on prices so as to not dilute multiples, but also for any extra investments which may be authorized over the next 12 months, which would then be re-included in next year's business plan when we review it, which means that we have room for new initiatives and for further growth compared to what we have inserted.
We can now move on to the bottom line, the overall effects. Now, if we consider the growth of structural profit, you'll notice that CAGR stands at 6%, which is also linked to the major initiatives we're working on. Keep in mind that we only consider the structural part because, as usual, we don't include any contributions from temporary opportunities which aren't included in the development of the business plan. So we basically only look at the structural level of evolution of our business.
The good results we obtained in 2025 and the increase in our targets we expect to obtain in the business plan, along with the financial flexibility that we will have for the entire business plan period, allows us to be confident and to increase our commitment for future dividends. As you know, we guarantee a floor when it comes to our dividend policy, Euro cents per share.
This last year, we're expecting to have a level worth EUR 0.17, whereas at the end of this business plan period, we'll be up to EUR 0.19. In June, we'll be paying dividends for the 2025 results, and that will go up some 7% compared to what we had paid in 2024. Even in this case, we will continue to increase our profit and our overall dividend levels. We now have a few slides to focus on the industrial evolution of our main businesses, beginning with energy before I give the floor to Orazio. In energy, beginning with our main asset, our customers. In the business plan, we are confirming the evolution of our customer base, the one we expected. Based on that evolution, we will be maintaining a portfolio level equal to 4.5 million customers even at the end of the business plan period.
In this case, we begin with 4.6 million customers at the end of last year, with a significant one million customer growth. Here, we're still seeing a certain degree of return on STG. The temporary opportunities, of course, are linked to some supply points which won't be expected in the future. They will disappear. So we have a small contribution from our commercial activities and a contribution from the M&A activities that we expect to have in this sector. One of the challenges that we have proven to be able to meet is the series of value-added services that we've included throughout the supply chain, all the way from retail to the major industrial players, with a portfolio of solutions that can be either one-off or recurrent, and which we are offering to our customers with good feedback from them.
This is one of the assets where you can use, along with other levers, which allow us to increase the value of our customer asset. Let's now move on to the dynamics we're seeing financially. If we begin with 2024 and the EBITDA deriving from energy supply, it was very consistent. This was an EBITDA which, of course, also included the contribution of temporary opportunities worth some EUR 180 million. And as we're seeing, temporary opportunities will be completely removed throughout the business plan period. And therefore, the adjusted figures for 2024 were at around EUR 495 million compared to an adjusted level in 2023 when we had 3.6 million customers, which stood at EUR 381 million.
So that at the end of the business plan period, we will be at EUR 607 million in terms of EBITDA, with a 4% structural growth, which begins on the evolution of the commodity margin, especially linked to a reduction in overall margins, linked to the normalization of certain trading margins and others linked to structured customers we have, which during the energy crisis were very satisfactory. Although with the normalization of prices and market oscillation, these will be reduced, also given the effects of competition. We also have a major contribution from the free market, also linked to the transformation of STG customers. Plus, we also expect to obtain a good contribution from customers thanks to our value-added services. Currently, they represent 7% of our customer base, and we expect that percentage to grow to 17% at the end of the business plan period.
Plus, we also have activity regarding public lighting points, and we also have a contribution from M&A, which brings us to the grand total of 607, so again, we have a number of drivers that can support this structural growth of ours. Even when it comes to generation, we expect to have a positive contribution here given the investments we're making on renewables, with a close focus on securing cash flows, with sales directly to customers, which means that we can build plants and then give them the plants or through assets we own, which will then supply energy to customers that we have already identified and signed contracts with. Let me now hand it over to our Chief Executive Officer for an overview on networks and waste.
Thank you, Cristian. Good afternoon. We are here to give you a briefing on our future activities. Let me begin with waste.
Waste has an exciting story. We are leaders on the market, and we have planned a number of actions that will allow us to have even greater returns for our shareholders with new solutions and new paths ahead. The waste treatment market is worth some 80 million tons per year, both for urban and industrial waste. We are the largest Italian player with a 10% market share. We are fully integrated. The fact that we are leaders despite only having 10% of the market share shows how fragmented the market is. There is a significant shortage in capacity, and we wish to consolidate our presence even in mediation activities, even with foreign countries. We want to focus on treating the material with the highest value added in our plans, but we also want to have increasingly large visibility on flows and on prices for the main European markets.
Now, this slide shows you how we are implementing our strategy. We want to continue expanding in our core segments, including treatment, recycling, and soil remediation. We expect to significantly expand our B2B activities, which will be accompanied by a significant return on invested capital thanks to greater efficiency, economies of scale, consolidation, and expanding our intermediation activities. This growth will be supported by four levers. The first driver is the organic development of our asset capacity. The second driver is the development of partnerships with foreign players. The third driver is the development of external lines. And the fourth is an increasingly visible contribution to the increase of margins stemming from our global waste management services. Now, let's focus on the individual businesses, beginning with treatment. We hold a 10% market share, which means that we have plenty of room for growth.
In this case, we are working to expand our assets. We have invested on the fourth line in Padua, which is the largest investment on waste-to-energy plants in Italy. This is an investment worth EUR 130 million. And we also have the waste-to-energy plant in Montale, Tuscany, which is a new element in this business plan. We are now managing that plant, and we will continue to invest in it to improve its efficiency and its profitability. We are developing infrastructure on treatment, including waste-to-energy plants. This will allow us to increase our treatment capacity by 800,000 tons per year. To that, we also have to add a further expansion worth 400,000 tons per year that will stem from our intermediation activity. And this is something we're doing to meet the demands from our customers and partners, including Eni and Fincantieri.
In 2026, as you already saw, we have already started using the lever through external lines. We will be becoming a leader in water treatment, and in this waste segment, we are seeing a significant growth in demand, beginning with our industrial partners, and it will continue to grow due to two reasons. First of all, the increasingly stringent directives and legislation, plus the water shortage, which will continue to increase, and therefore, we will have to invest to save water, to reuse water, and to treat it. This is yet another element which is important and strategic, which we are adding to our vertical integration plan, which is what we did also with the ACR company for soil remediation, which, as you know, is continuing to give us some very satisfying results. Moving on to recycling. In this case, we are leaders with a 20% market share.
This is a market with macro trends which are supported by the PPWR and SUP directives, which are increasing the demand for recycled plastic throughout the industry, for packaging, for food and beverage, for home personal care. So in this sector, we want to increase our asset base for low-density plastic. We also want to develop a new plant for rigid plastic. Plus, we want to make sure that our carbon fiber plant continues to work, with which we're creating a new market. So besides the increase of our productive capacity to intercept this increase in demand, we're also working on diversifying products while still maintaining a foothold in the high-quality sector, which makes us attractive to our customers. And our customers continue to be the very top customers.
So we will continue to focus very much on our European customers, which are more keen on a very careful circular management of waste. And in Europe, in fact, we are the second player in terms of turnover amongst the multi-polymer integrated players. And as far as this business is concerned, let me also add that we expect to grow externally by using our branch in Poland, also thanks to new projects that will allow us to intercept the increase in demand for recycled plastic in that country. And finally, the third axis is soil remediation. Even here, we have a good leadership which is growing very much thanks to the synergies that we're able to extract by integrating the ACR company I mentioned earlier, and which will continue to support the growth of soil remediation as a business and the increase in the volumes of soil treated.
Recently, in fact, the European Union has launched a strategy to regenerate soil with a goal to neutralize soil degradation by 2050. Environmental remediation is an essential tool to implement this strategy. The Ministry for the Environment has identified a number of sites which are in the national interest. 13,000 such sites have already been mapped for a total remediation value worth EUR 5 billion in terms of turnover. We wish to intercept this growth potential by supporting activities through major development of our plants, not just through organic growth, but also through M&A transactions. I'm sure you're aware of the Gerotto acquisition, which allows us to have robots and machines allowing us to be more efficient. To that, we also have to add the organic investments we're making, such as our new soil washing plant.
So this is the strategy that we expect to implement to increase our market share by leveraging in our leadership. And we'll see now how the strategy will create value. On the slide here, you can see the economic contribution of the strategy I mentioned. We have a structural growth with an 8% EBITDA growth. And if we compare that figure to 2024, which benefited from profits stemming from the sale of energy based on contracts with energy prices which still hadn't been normalized. And as you can see, the first column is worth some EUR 35 million . This growth is supported by a number of drivers, and it is also supported by the major investments Cristian mentioned, which are included in this business plan. If we only count development CapEx for this business, we're talking about EUR 800 million.
Our target EBITDA at the end of the business plan period is equal to EUR 481 million, which is supported by a major increase in volumes. I'm referring to the special waste volumes, which of course drive the growth, and they will go up to 4.6 million tons, with an almost 7% progression. We also have an increase in the recycled plastic volume equal to almost 150%. We also have the volumes generated by remediation. As you can see from the graph, growth is also supported by our external growth, which reached 50% of which was reached by Sostelia transaction, which was closed two days ago. We will continue to use this lever whenever the targets we appreciate become available, targets from which we can then extract value. When it comes to waste, this business plan is increasing our growth targets.
It is marked by a limited risk profile because, as you can see from the slide here, we are diversified with plenty of drivers, and therefore, these goals are supported by our competitive advantage, which are solid in a market which, as I was mentioning earlier, is still very short. Moving on to networks. To us, networks are essential in our portfolio, and over the upcoming five-year period, when it comes to networks, we will be working on four axes, including the energy transition that our chairman already mentioned. We'll be focusing on efficiency. We'll be focusing on resilience, and all of this will be done through an intense use of innovation so that we can increase advanced levels of efficiency and security with a very broad use of artificial intelligence.
Now, in order to be more efficient, this strategy is also based on what we refer to as the extended model. In other words, we want to use our decision centers on our various territories, including customers and authorities, with the goal of creating development and value in a very visible amount of time. Now, the strategy that I announced will lead to a growth in all regulated businesses with a special contribution stemming from water. The first column in the graph, which is worth over 50% of the entire growth, water, our water business, of course, is the queen of our networks. Also, if you take into account the macro trends we mentioned earlier, these assets are strategic because the context we operate is marked by increasing water shortages. We also have a very high demand from the industry.
The water will be increasingly less available due to climate change, and therefore our strategy is based on an approach that can allow us to develop an industrial model, an extended model, a circular model which is efficient, safe, and innovative, and this strategy requires a major amount of investments which underpin the growth of our EBITDA with an increase in our RAB worth EUR 700 million. And we are convinced that this growth will continue even beyond 2029, and it will be accompanied by a constant increase in efficiency that we have grown used to so that we can continue guaranteeing the premiums from the regulator. The second column in the graph shows the contribution of gas networks, which is worth EUR 35 million. Even here, this is supported by a RAB increase worth EUR 300 million. Even here, we have an extended sustainable, efficient, and innovative model.
Nowadays, electricity produced by the gas molecule is still much larger than the electricity produced through electrons, and it will continue to be this way for many years. In Italy, the distribution networks' electrons will match gas molecules only beginning in 2030. That's why we need to have networks which are safe, adaptable to the energy transition so that they can host green gases. So in a nutshell, this is a sector which still requires plenty of CapEx. As we wait for the Totex, which we expect to have beginning 2028 for the gas networks, but already since 2025, we will continue to cover operating costs all the way up to 2027. This is something that ARERA has guaranteed to the major players in the sector. So this is a plus that we can benefit from following the TAR ruling pertaining to the 570 law for 2019.
Moving on to electricity distribution. In this case, we have a smaller contribution, obviously, also given the size of our business compared to others. Over the past three years in electricity, we have invested very well and very much, all the way to EUR 170 million per year compared to a market average of EUR 100 million. So we are solid. We're efficient. We are able to meet the increased demand for electrification. The business plan envisages a similar type of investment, which is required by the electrification of consumption phenomenon and by distributed generation.
Besides investments, we also have major contributions from the regulator, which has already introduced the Totex system in 2024 and which recently also confirmed the WACC for the regulatory period. As far as this business is concerned, let me also mention the contribution stemming from M&A, which we expect to be EUR 20 million, which is external growth.
Even this business plan confirms the fact that we wish to continue consolidating the sector, which is still extremely fragmented, beginning with the water sector. If we look to the highlights on the graph, the growth stems from efficiency, not just investments. We also want to reduce losses. We will be using up to 15% of the water resources that we manage. That's water reuse. We also will be using technology for the implementation of our predictive maintenance model to the entire group network so that we can be efficient at very high levels for all of the group's assets.
Then finally, as a way to safeguard our investment assets, which is worth EUR 1.5 billion on our gas assets, I also think it's worth mentioning that we are the very first in the sector to have experimented gas distribution with a 10% hydrogen blend, which has been recognized by the Ministry for the Environment and Energy Security, which means that our network is pretty much ready to host green gases. And therefore, regardless of how quickly these gases will develop, we are already leading thanks to our asset readiness project, which means that our network will be ready to take in these green gases. Moving on to the final slide, we've already seen what the growth drivers are. This is the CAPEX plan, which is worth 170% of the cash flow generated by the business itself. And we expect to reinvest even the liberalized part of the portfolio.
As Cristian said earlier, this will allow us to concentrate 60% of the group's CAPEX on networks, thereby promoting an increase of RAB up to 30%, all the way up to EUR 4.7 billion. You can see the distribution of the RAB businesses. Most of it is in water, which will be up to EUR 2.6 billion, which is plus EUR 700 million. The regulated return that we have factored in is shown at the bottom of the slide, and you'll see that the figures are stable for all of the years, also given the recent ARERA decision. So as you can see, we have a very resilient asset base vis-à-vis the macro variable component.
They continue to be at the very core of our business with very high value, with good returns, and with a low risk profile, and with a positive impact on the economic and financial profile of the entire group. Thank you very much. I will give the floor back to the chairman for some conclusions.
We went over the 2025 results, which are solid, which will allow us to continue on our structural growth path and to reduce the growth stemming from temporary opportunities. Our financial leverage profile is one marked by a debt-to-EBITDA ratio equal to 2.6 times, but at the end of the business plan, the structural TSR stands at around 10%.
We have a new dividend policy, and we also have the financial flexibility to look at any new and possible opportunities which still haven't been identified and therefore which haven't been included in the new business plan. So this is our business plan in a nutshell. We invested one hour of your time on illustrating it, and now we can open the floor for any questions or comments.
Good afternoon, Mr. Fabbri. Our first question is from Javier Suárez, Mediobanca.
Good afternoon, everybody.
Good afternoon, Javier.
I have three groups of questions. The first is on the financial structure of the company. Slide 15 shows that there is still opportunity for growth for the company. You have included these possibilities for M&A, which you define as visible. But in 2029, net debt-to-EBITDA will still stand at 2.6 times, which is a major difference compared to other players in the sector.
That is the maximum acceptable leverage for the company, as you define it. Now, besides the strategy of having an optimal balance sheet, which I agree with, but where are these opportunities? Are they in your reference business or your reference territory? Are these opportunities there, which means that you continue to have this major financial flexibility? Where do these opportunities lie? Is it still in the waste business and in your reference territory? Is it in the supply business where you may look into some targeted acquisitions? Where are you seeing these opportunities for M&A, or are you seeing other types of opportunities with this balance sheet which have nothing to do with acquisitions or in your reference businesses or your local territories? Just to understand how you build the business plan. The second question is on the supply sector.
The business plan is based on an assumption on what will be happening beginning in 2027 with the electricity customers you acquired. At one point, they will be going to the liberalized market. This will mean that there will be an increase in the profitability of these same customers. Is it safe to say that your business plan envisages a speeding up of the bottom line in the second part of the year, especially linked to the supply business with this dynamic? Or what other dynamics should we be looking at in the supply business? And the next group of questions is on a strategic update regarding the recent acquisition you made of Sostelia.
What is the strategic reasoning behind the acquisition, which operates in the water treatment sector, and how the acquisition of this company can be good in terms of extracting synergies and increasing the efficiency of your business? What about the AIMAG transaction? Do you still have an opportunity to take control of it? And finally, what are the assumptions regarding the renewal of the electricity concessions? Thank you.
Let me just finish taking notes here. Now, beginning with the financial structure. Now, clearly, when it comes to the organic investments, we still have further room to increase organic investments in the regulated sectors because, as I was saying, we have opportunities in all phases of the water cycle beginning with the availability of water and securitizing the availability of water.
In the plan, we've also envisaged a number of initiatives to increase the amount available, which connects various procurement sources so we can create a more resilient structure, which in turn guarantees the availability for all parts of the network so that we can have an in-pool procurement for the local networks. We have to invest on water distribution in a major way so that we can reduce network leakages. In terms of linear leakages, linear leakages measure the quality of the network because leakages in percentage don't take into account the density of customers. In other words, how many kilometers of networks we have for each customer. Whereas when we measure linear leakages, what we see is that we are less than half of the Italian average. We're in line with the European average, and we still continue to invest.
When it comes to the sewage and purification system, we have a certain number of territories in which we are reviewing the sewage systems to take into account the greater intensity of rainfall, especially in those areas in which we have mixed sewage systems, which means that not only do they serve our water customer sewage systems, but they also collect rainfall, which means that we have to redesign and redefine a system which in some places dates back to the Middle Ages, which means that we have plenty of space for further investments, all the way up to purification. Even here, a very stringent legislation which goes beyond the business plan period, which still requires plenty of investments, so again, we have plenty of space for organic investments, which we are speeding up, but we can still do more.
Also, when it comes to networks, you mentioned our electricity networks in which we are working on enhancing the network, and we have plenty of room to do that, and when it comes to gas distribution, we currently have the need to invest in renewing our infrastructure. In 2040, this infrastructure will still continue to cover 30% of our end customers' needs. Obviously, therefore, the infrastructure needs to be kept efficient, safe, and it needs to be enhanced technologically, so in this sector, we still have plenty of room for major organic investment. When it comes to growth through external lines, well, the sectors that we have the most files on is waste, and just recently, we completed the acquisition of the Sostelia company. The whole process will be completed by the end of March, and its contribution covers already 20% of what we've included in the business plan.
But again, we have plenty of files that we're looking at, and the challenge here is to find a target which has the right price vis-à-vis the value we give to that target and what our expectations are regarding that business. And again, there are plenty of files. We are very selective, but there is a lot of excitement. And similarly, when it comes to energy supply and energy efficiency, we are striving for consolidation in a sector with plenty of players, and it is a sector with challenges which require dimensions which are more of the national on the national level. And therefore, that is a sector which also has plenty of opportunities. We've also included something when it comes to networks because even there, something seems to be changing, although very slowly and less intensely. So these are all the elements that we're looking at closely.
The size of these transactions may be smaller or larger, but that's the direction that we are continuing to head in. Again, going back to the Sostelia example, the Sostelia transaction is one that has many value creation opportunities from many different points of view, beginning with the water treatment business, and the water can be polluted either by the industry or by the integrated cycle, and in this context, we will be facing increasingly stringent legislation requiring major investments, and that is a sector which will require very high levels of management capabilities, which means that in this case, we can create synergies both in the waste sector and in the integrated water cycle.
So this is a strategy we have, and this is the visibility we're sharing with you in terms of how we're looking at the files we have, also given the fact that the sectors we operate in are still very fragmented and with plenty of opportunities for further consolidation. Again, in the waste business, we are the market leaders, and we only have a 10% market share. That is proof of the fact that there is plenty of space for further consolidation. When it comes to energy supply, we have plenty of different types of phenomena which intersect and which have different ways of developing throughout the business plan period. We're seeing a normalization on margins in certain customer segments that will lead to an overall reduction of the margin.
Then, we have the evolution of the margin with STG customers moving to the liberalized market, which is linked to the market margins. Many customers are already preferring initiatives and solutions which focus on decarbonization, or they're also looking at fixed prices given the major external uncertainties, and those aren't guaranteed to STG customers. So we're waiting for 2028 when that shift will happen. Then we have the normalization of the last resort market, which will continue throughout 2026, and that certainly has a negative trend. And then we have a progressive growth stemming from production and decarbonization services for customers. So these are the macro trends and moving parts we're seeing regarding the margin drivers in energy supply.
We also have other items which seem to be moving linked to adjustments in margins and other fine-tuning linked to the settlement sector, which we will continue to work on throughout the business plan period. Moving on to AIMAG, currently, the public shareholders are trying to understand what needs to be done to deal with all the open questions regarding the company's future. So basically, they're brainstorming to try to find a solution and give a future to the company. And regarding all of that, we will simply have to see what the timeline and the way to operate will be in the future. Now, the reasons which led to the agreement last year are still very reasonable, and we just have to find the right way forward, which is satisfactory and fully compliant.
As far as the renewal of concessions is concerned, we are in a condition of continuity everywhere because there are no conditions for tenders anywhere, even as far as electricity is concerned. We have included remunerated investments included in the RAB given the effect of the renewal of concessions. We're waiting to see what the regulatory news will be, so basically, we're in a condition of continuity. Also taking into account the fact that organizing a tender requires plenty of time, and today we have renewed all concessions either in the waste sector or in the waste collection, wherever there have been tenders, because based on our skills and on the experience that we have over 10 years experience, we were reconfirmed in the management of those services. I think I've covered all your questions. Hopefully, that answers everything.
Oh, and of course, Orazio wanted to add something regarding the industrial value of Sostelia.
Hello, Javier. You were asking us why we made that acquisition. Well, first of all, because it allowed us to tap into Sostelia's technical know-how. They are the only ones on the market, as far as we're concerned, who can design, build, and manage civilian and industrial water treatment assets. And that is related to the cost-efficiency efforts we're making. We are looking to subcontractors. We're working with industrial players, and therefore, we're able to use their very high-level industrial know-how with a tailor-made service. And this is a very high competitive advantage for us because, again, they are the only company which is fully integrated in designing, building, and managing. They are a full-service company.
As Cristian was saying, this gives us a further competitive advantage stemming from the synergies stemming from our industrial customer portfolio, simply by matching our databases, which means that we can sell services to Sostelia customers, the ones we already offer to our industrial customers, and vice versa. Our industrial customers will be able to take advantage of Sostelia's services. So this is the cross-selling approach, which will certainly give us major synergies, similarly to what the ACR company has given us in the remediation sector. So this is a vertical integration, which I'm sure will lead to a major growth in margins.
It's very interesting. Thank you.
The next question is by Emanuele Oggioni, Kepler Cheuvreux. Emanuele, over to you.
Good afternoon, and thank you for the presentation. I also have a few questions for you. The first is on the retail business.
The 4.5 million customers at the end of the business plan are the same number you had in the previous business plan, except it moved a year forward. Although the EBITDA of the previous business plan to 2028 was at around EUR 586 million EBITDA, whereas in 2029, it is above EUR 600 million, and based on what you've already commented, you don't expect a general competitive pressure or a reduction in customer margins, something which other players mentioned in previous conference calls and in previous quarters, although not in a very transparent way, and there was the risk of further competitive pressure thanks to incoming players. Anni fa, anche se magari possono in larga perdita, ma non voglio dilungarmi su, and the move of customers from one company to another.
But based on your numbers, it would seem that given the same number of customers, you have a better mix and you're improving the absolute value of EBITDA throughout the business plan period. So that was my first question on retail. The second question is on waste. And then I have a third question of networks. But second question on waste, even here, we're seeing a growth in CAPEX from EUR 1.1 billion in the previous business plan to EUR 1.2 billion, which means that you have an extra EUR 100 million in terms of CAPEX, with an EBITDA which is flat for the most part, because at the end of the previous business plan, it stood at EUR 470 million EBITDA, whereas in 2029, we stand at EUR 480 million.
In your excellent slide on the return on invested capital, and the waste treatment and waste collection have returns which are in line, if not slightly above the ones you had in 2028, which was a previous target, the previous business plan target to 2028. So apparently, on the one hand, there was a higher return on invested capital, but on the other, in 2029, the EBITDA appeared to be flat compared to the previous business plan version, compared to a higher CAPEX. And then a third question on water. And the concept here is similar to what I already said for waste.
Even here, we have an increase in CAPEX, although the RAB stays flat, a rounded figure to EUR 2.6 billion at the end of the business plan period, which is what it was in the previous business plan, and it also has a flat EBITDA, roughly at around EUR 360 million in the old business plan to 2028, and it's similar in the new business plan. If I remember correctly, this can be partly explained by the different consolidation perimeter. In the previous business plan, you included AIMAG, which had a major share in network and water, whereas now AIMAG is no longer considered. So basically, there's a different perimeter you're considering when it's actually a different mix. And then one final question for the short term, for 2026, can you give us some moving parts?
I know you don't share figures, numbers, but I just wanted to know what the main moving parts are in terms of EBITDA by division compared to 2025, and then can you give us an update on the net profit year on year? Is it in line with the business plan trend? Equal to 6% or not? Thank you.
Thank you for the questions. Let me try to answer all your questions. To compare it with this business plan with the old one. Now, energy supply, there is competition. In the past, our growth targets and our growth results allow us to grow our customer base consistently, whereas this year, we consider the solution which was in line with what we had last year, meaning that our customer base is stable. That's the challenge we face.
Now, why is the overall business contribution up in this business plan compared to the last version of the business plan? Well, two things. The two most important things are, first of all, that the goal we've given ourselves is linked to the increase in value-added services, and we also expect to increase our renewables with a few extra million with this model. I'm saying this because last year, we were still seeing the last effects of the super eco bonus, and we had the need to basically reset all of our activities. So we were a lot more cautious in this regard, and with a few initiatives, some of which have already been concluded, others are being concluded, we're seeing the opportunity of investing on energy efficiency with multi-year contracts, which then guarantee that we can manage the business.
We can also develop the business in public lighting, where we are increasing the public lighting points that we serve progressively. So last year, excuse me, our M&A per business did take the AIMAG profile into account in the mix, with a higher percentage, and that led to a lower contribution in terms of energy supply and a higher contribution in terms of networks. In terms of the impact on EBITDA, but also more in general on RAB. Let me just try to go back to the numbers you mentioned. Last year, with AIMAG's contribution, we had a RAB worth EUR 4.5 billion. This year, our consolidated RAB is EUR 4.7 billion, which stems from having replaced the AIMAG RAB part with a new investment plan, which implements the growth of the overall RAB on the total numbers.
Regarding the EBITDA growth in networks, we have a visible growth compared to the figure we had seen last year, equal to EUR 17 million or EUR 18 million with a lower M&A contribution, and we can see that very clearly, and the waste business, let me just say something before I give the floor to Orazio. As far as the business plan is concerned, we have a growth in the contribution to 2029 compared to 2028, generally speaking, and as far as investments are concerned, besides the fact that the numbers are a little bit rounded up or down, over the five-year period, we're pretty much in line. I'm trying to find the right page. Your questions are very specific on figures, so I'm trying to give you the right ones. Last year, on development CAPEX and M&A, our investments were worth EUR 1.2 billion.
This year, we're a little higher than that, EUR 1.4 billion, but compared to last year's figures, which are pretty much the same. We also have to consider that as far as development CapEx is concerned, we also included the M&A debt, which means that when we consider M&A, we have the value of the cash used, which is higher for an extra EUR 150-160 million, and that justifies the difference you saw in terms of cash. These are the macro numbers on decimals, and then, of course, the numbers changed after the second dot after the billion, so it's a few dozen million, which aren't anything major compared to the overall changes in the numbers.
If we then look to the final contribution, Orazio, I'm sure, will have mentioned the fact that we also have a small contribution linked to the sale of energy produced, which is lower than what we had expected in last year's scenario, with a slightly lower contribution as far as this item is concerned.
Let me just add something on networks, and by the way, good afternoon, Emanuele. As far as networks, in 2023, which is what the previous business plan was based on, we didn't have the electricity ROSS, which then appeared in 2024, which, as to all the things Cristian was saying earlier, that we also have to consider that between 2023 and 2024, we also had the WACC update worth 80 to 90 basis points for electricity and gas, and it was worth 130 basis points for water.
We have the topic of the electricity ROSS, which only arrived in 2024. The beginning was slightly different. As far as waste is concerned, there is a reference to the electricity margin, the electricity generated by waste energy plants, which is something that we have to take into account. We have made forecasts which are slightly more conservative for the next few years in this business plan compared to the previous business plan. If we then look at the structural CAGR in waste, it's basically 8%, which is one point more compared to last year's, although the net numbers and the energy margin is one which stems from the different fixing values we use when we set the energy value, along with the hedging policies we implement every year.
We gave you a quick answer on these very specific numbers, but then, of course, with the IR's office, I'm sure you can get all the details. As you know, the size of these phenomena we're talking about is worth a few million. So with this quick answer, we just gave you the overall flavor, but then I'm sure that IR can give you all of the more accurate numbers. Thank you.
And there was one final question on 2026. Of course, I had ignored it on purpose. I was so focused on giving you the answers on all the numbers you asked about, so I subconsciously forgot that last question.
Well, as you know, we don't give any guidance.
But what we're seeing in 2026 compared to 2025 is that we have a further normalization of the contribution links to the last instance markets, which will be normalized from 2026 onward. We have some contribution stemming from the tariff increase, which was a one-off in 2025, which allowed us to grow in 2025. Then, of course, we're also seeing the evolution in organic growth, which is going in the opposite direction compared to the previous thing I mentioned. So there are a few elements that we're working on for 2026, and we're trying to do a good job on the dynamics we're seeing.
Thank you.
The next question is by Roberto Letizia. Equita SIM.
Sì, buon pomeriggio, grazie mille per la conferenza. Good afternoon, and thank you very much for the presentation. I'd like to go back to the extra options, and I'd like to focus on the re-leverage.
As Javier was saying earlier, you have a net debt-to-EBITDA ratio equal to 2.6 times, but I think that the company, given the current market conditions, can stand three times that debt-to-EBITDA ratio, and you can even go above that temporarily, which means that you have, I'd say, EUR 800 million. With that even going into any extra leverage you can use, and with reasonable multiples, I think that's worth up to 10% of EBITDA.
But we're not seeing this in the business plan. So I just wanted to understand, qual è la probabilità di vedere, just to get an idea of how likely it is for you to spend that potential throughout the business plan period, and why aren't we seeing all that amount? We're only seeing EUR 100 million. EUR 20 million you've already spent, whereas the run rate we had in previous years was a lot higher than that.
So you're not spending the debt potential your company has. We're not seeing this option to re-leverage in the business plan. So how likely is it that we will be seeing this in the business plan period? What may lead to you using that leverage and we will not see any M&A? Will you actually consider turning to the shareholder with a more generous dividend policy or with a buyback policy? And then more specifically, referring to the contingencies you may have included in the business plan, and we talked about the energy prices with a very reasonable scenario, there has been a decrease in STG customers.
Regarding STG, why do you have this assumption that you will be losing customers if we consider the trend we saw in 2025, whereas you always said that you were very satisfied with the turnover of these customers out of the market, which was better than your initial expectations? Only part of those customers would only move to the liberalized market. Then specifically, how many megawatts in your solar development are destined to third parties? That's a more technical question. Thank you very much.
Let me begin with your last question. The question on the megawatts going directly to customers, so almost entirely for customers, some 200 out of the total 370 megawatts are the ones that we will be financing with our own resources. The remaining part will be development, we'll be doing together with customers.
Or we can just simply sell the initiative with a decarbonization approach and we'll consolidate the customer in the future. So that's a summary in terms of size. And the 200 megawatts, most of those 200 megawatts are used to serve those customers who will have long-term contracts for energy. So we already have a number of contracts which are up and running, and they go hand in hand with the development of our plans. Keep in mind that we are also developing some photovoltaic initiatives with certain customers with low soil consumption. So we're trying to basically fine-tune the opportunities we're seeing locally. Then you had a question on STG. We were forecasting a higher loss of customers, so our forecasts are in line with the expectations that we had mentioned during 2025. And please consider that these are expectations that also consider the next few years.
What we're seeing now is that these customers have a churn rate which is lower compared to the market average. So we are more than satisfied with the investment we've made with the churn rate for the customers compared to the business plan hypothesis. Then you had a question on how we will use our financial lever. I tried to already answer the question on leverage. When I answered a question Javier made, let me be a little bit more explicit. We certainly have room to grow even quicker when it comes to the organic part of the investment, and that's certainly one way of using the cash we have available. We didn't include it in the business plan because we wanted to hold on to a certain degree of financial flexibility, but it is an option.
If you consider that with this business plan, our level of investment compared to the previous business plan is EUR 250 million higher, and that's a lever we can still use. We included an amount of M&A for the time being, the size of which is almost organic to us. What do I mean by that? It means that we have already completed EUR 20 million of the EUR 100 million we've included in the business plan, and we'll continue to look at the targets to achieve that goal. So we included this number because statistically it's safe. It's statistically guaranteed. This is a number that is feasible and which only depends on our ability to achieve goals. Instead of 100, we could have added an extra 100 M&A. But of course, it really depends on the size of the deals we feel are most interesting.
Please consider that during 2025, we worked very intensely on a number of different files, which didn't have the right quality and price ratio, and therefore we didn't finalize those transactions, which goes to show that there are plenty of opportunities out there, but we just want to be very careful in choosing the right transactions. We don't want to grow in the short term without then extracting value, which is the ultimate goal we have. That's the challenge we face. Of course, we could have included something extra, but these are numbers which obviously also depend on the possibility for them to be successful, and they're also based on the opportunities.
Of course, if you're looking at more sizable transactions, of course, statistically there are fewer of them, so that's the reason why we didn't include extra opportunities, but of course, we do have room to speed up our investments and our growth opportunities even organically. So that's the approach we have with our business plan. We want to include initiatives which are visible and which are technically achievable in terms of our ability to execute them. So our investments are visible. The development of markets has to be visible and feasible. It's all part of the challenges we face from the industrial standpoint, and we have to be able to conclude them. But currently, adding an extra EUR 1 billion for M&A doesn't only depend on our capacities. It also depends on the targets.
Whereas the number we've included, which is EUR 100 million, is a number that we think is feasible also based on our track record, as you yourself, Emanuele, were saying.
Thank you very much.
The next question is by Francesco Sala, Banca Akros.
Sì, buonasera, grazie per la presentazione. Good afternoon, and thank you for the presentation and for giving us this opportunity. I have a first question on the retail market. Are there any significant differences between gas and electricity customers, and if in the former is the competitive pressure more limited? The second question is the 2% inflation, the inflation that also needs to be applied to the RAB throughout the business plan period. The third question is on the slight increase in the tax rate. What timeline does this have? And finally, se avete fatto. Is it linked to the 0.4% origin?
My fourth question is, are there any short to medium-term efficiency targets linked to the use of AI for the retail business? Thank you.
[Foreign language] as far as the competitive pressure we're seeing on the markets for gas and electricity customers, you should consider that currently our commercial structures operate with a dual-fuel approach, so it's the same pressure, basically. We've switched our portfolio from a mostly gas mix to a mostly electricity mix, with the idea of capturing the value linked to the consumption of end customers. On the one hand, gas customers, due to global warming, will decrease their consumption in the medium to long term, although you can't really appreciate these changes from one year to the next.
Although in the long term, we did switch our portfolio, and the STG tender allowed us to basically revert our customer mix. From this point of view, we're seeing a slight increase in consumption in electricity customers compared to a long-term decrease in gas consumption. That's why we reverted the mix and then you had a question on the impact of the tax rate, which is slightly up compared to what we had considered in the previous business plan, given the fact that some tax subsidies expired, but it's also due to the effect of the IRAP tax in certain regions. We have the question on the overall inflation rate. I can't remember exactly what our forecast for the evolution of the RAB is. Jens and Luca can send you the answer after the conference call.
I think it's similar, but the indicator level used in the evolution of the RAB changes from the water sector to the gas sector, so the updated approach is different depending on whether or not the year is even or odd. There's some technical issues, and therefore, in the various businesses, the figures are never the same. Now, I can't remember what the decimals were, but I think it's safe to say that it's roughly 2% for the business plan period. So that's the reference we used, generally speaking. As far as the impact of AI is concerned, on the market, what we're testing leads to a visible reduction in costs for those initiatives in which we considered that we have implemented technology. Think of CRM to be able to increase our contact millions per month.
A good part of these contacts refers to online services, which lead to non-real time, and su questo abbiamo creato—with non-real time tools. And we've created some automated tools that can support us in training our customers. I would rather not give you any numbers or the size that we've shared in numbers regarding market initiatives, of course, things that we've already activated in the past and which have given us some obvious benefits in terms of results and efficiency. But based on our experience, I think what we've been doing so far is quite positive, and therefore that's the path we will continue to head in. And then when it comes to networks, we have implemented some initiatives that have been giving us some good results. Something that neither I nor Orazio have mentioned is the fact that we have some new regulations on gas leakages from our networks.
Now, over the past few years, we started using AI tools to support our physical activities, both in our investment plans and in our operational costs to look for leakages on the local territories, and we used machine learning to use past events, mixing them with the age of the networks and the concentration of the various distribution points, so we were able to overlap these numbers, allowing us to reduce costs and to cut the amount of gas leakages by almost 50%, allowing us to obtain premiums, major premiums, in the sector, and in the future, we'll continue to use these tools even more and will be allocating our investments based on the statistical probability of damage on the networks so that we can work on predictive maintenance, but also on the district organization of our networks.
By using the data relating to increasingly small pieces of the network, we can also study consumption trends. By analyzing these trends with machine learning, say to analyze how much water is used in a specific territory, we can then identify leakages which are hidden, which aren't visible on the surface. This is allowing us to drastically reduce the leakages on the network, which leads to premiums, of course, and which increases the system's resilience. As far as predictive investments are concerned, it allows us to reduce OPEX regarding maintenance, which, of course, has an impact on our balance sheet.
Thank you very much.
The next question is by Davide Candela, Intesa Sanpaolo.
[Foreign language] Good afternoon. I have two questions. One is on M&A. [Foreign language]
I think there's an echo because your microphone is on.
Grazie. Torno sulla domanda con riferimento all'M&A. It's more on the concept rather than the impact. This year, you have implicit figures relating to multiples, which are equal to seven times. Last year, the implicit EBITDA multiple was equal to six times. Why is that? Is it due to the different mix in your assumptions? [Foreign language] Or is it linked to the targets you see on the market? Do they require higher multiples, or maybe was it the fact that last year's multiples were slightly lower? Just to have an idea of the rationale. And then a second question on the topic of capital allocation. You said that especially in water and waste, there would be the opportunity to grow more.
There are some topics regarding visibility. Do you have any constraints in terms of waste or tariffs, which don't allow you to do more, despite the fact that you do have room to grow? And also linked to capital allocation, for your dividend policy. In the final part of the business plan period, there's a higher growth compared to the beginning of the business plan period. The feeling is that you want to remunerate your shareholders more because you have more flexibility. Is that the reason, or is it because you wanted to give a more balanced outlook regarding the evolution of the dividend?
Well, first of all, let me congratulate all of you because in two hours you went into such details regarding the numbers. Now, let me begin with your question on the concept of value.
It's probably the same value, it's probably the same multiple, but maybe as we were rounding up or rounding down, we added or subtracted some EUR 10 million, and that changed the multiple. Although I think it was actually visible on one of the slides, pretty much. Maybe we included the investments on M&A, but then post-acquisition, we then invest on the acquired company. But in that case, they become organic development investments. But again, it's the same indicator theoretically compared to last year's. And maybe the only changes are due to figures which have been either rounded up or rounded down. So that's just a benchmark, of course. But then clearly, depending on the various mixes we're seeing in the sector, the numbers can change slightly, given the effect of the mix, but it's basically in line with what we saw in the past.
Moving on to your question on capital allocation. Well, for waste, we included everything which is in an advanced authorization phase or which has been fully authorized, which means that we are confident that that can be added to the business plan. What we didn't include is all of the initiatives which, for the time being, still aren't 100% sure they will be authorized, which is a condition we require. In the network sector, we are investing very much. There is room for further investment for the time being. The increase is limited, and this doesn't have an impact on the tariff constraints. It doesn't generate investments in working capital. It doesn't have an impact on future tariffs, so we didn't do this. There could be potential room to do that, but this is linked to a 40% increase in investments compared to the previous five-year period.
So basically, we're increasing things. And also consider that we have EUR 500 million in investments we make, which are entirely financed by funds that we don't have to reimburse. The largest portion of that is linked to the National Recovery and Resilience Plan, but we also have other types of funds as well. Now, what is the advantage of these investments? Well, for the group, that means that in regulated sectors, we can optimize costs which can be reduced through the effects of these investments, taking into account that some of these investments are aimed at reducing leakages in parts of the networks, and that will lead to benefits in terms of operational improvements. These investments also finance market activities, for example, rigid plastics and carbon fiber.
A part of those investments are covered by funds, which allows us to reduce our invested capital, and it also allows us to optimize the plant's yield. For example, in hydrogen, we are developing the sector, we are creating expertise, and our invested capital is next to zero, which means that we are benefiting by an almost full coverage when it comes to investment. So that's why we have a potential EUR 500 million of works that are included in the business plan, which don't absorb any cash, which gives us further room to do so in the next business plans. And we'll be also focusing on a further increase of the RAB. So that was the answer for their capital allocation question. Then you had a question on our dividend policy. Well, our reasoning was linked to two things.
On the one hand, we're confident regarding 2025 figures, despite the fact that they were a challenge, given the major amount of temporary opportunities, but also we had a positive leverage. We had a positive debt-to-EBITDA ratio. Then we also considered the fact that our targets are marked by better performance in the business plan period, and therefore we have an exclusively structural growth scenario. Therefore, we decided to increase dividends even more in the final part of the business plan period, also taking into account our financial flexibility and the fact that we will already have digested all the things we'll be doing in the next couple of years, the reduction in temporary opportunities, the fact that the STG scenario will be stabilized, and therefore we will have some things which will go on top of the structural growth.
Therefore, thanks to all that, we will be increasing the dividends in the same way. All of these things combined allow us to be very confident regarding the targets we'll be achieving. That's why we increased our dividend policy. As you know, this is a commitment regarding per share. Over the past years, whenever our results improved, we always increased our dividend. I was looking at the past three-year period. We had a growth in dividends which was well above 25% compared to the past, with an outlook featuring a further 27% increase over the next four-five-year business plan period. We are working to make sure that our profits grow.
Three years ago, when we presented the first business plan that Orazio and myself had drafted, we were very focused on creating value, profitability, and bringing the effects of development on the top line all the way down to the bottom line. And the track record we've achieved so far, I think, speaks for itself. And the projection for the future is headed in the same direction.
Thank you very much.
Mr. Fabbri, there are no further questions.
Well, I think you asked everything you could possibly ask, with plenty of details. But seriously, if you need any further feedback, please get in touch with Jens' office and with Luca Cimatti. And of course, we are always available for any extra questions. Thank you very much for making yourselves available. Thank you for this two-hour discussion on our business plan.
We will be going on our roadshow soon to meet with investors and discuss with them our industrial plan and the prospective future of the company. Grazie mille. Buona serata a questo punto. Ormai il pomeriggio è quasi finito. With them, we will have the possibility of further discussing the plan. Thank you.