Business outlook

Thanks to its resilient business profile with respect to the Covid-19 pandemic, the Group will continue to pursue its growth path as set out in the latest industrial plan, which envisages significant investments, especially in the Networks and Environment divisions, in addition to investments to increase electricity generation capacity and extend the district heating network. The major investment plan in the regulated sectors to improve the quality of the service is therefore confirmed, especially in the water sector, where the goal is to increase purification capacity and reduce the use of the water resource.

With regard to the Waste Management segment, investments will be aimed at building the waste treatment and disposal plants envisaged in the industrial plan and at increasing the quality of the service by extending door-to-door collection and punctual pricing. These investments, together with the complete coverage of the waste cycle (from collection to treatment and disposal), will make it possible to increase the volume of recycled waste.

Iren therefore confirms sustainability as one of its main strategic pillars thanks to investments in projects linked to the Multi-circle Economy, amounting to about 60% of the investments envisaged in the industrial plan, such as material recovery, efficient use and protection of resources, combined with energy efficiency and reduction of emissions.

Regarding the energy activities, in 2021 the Group implemented a series of actions that will mitigate the impact of volatility in energy prices thanks to a hedging policy implemented with the goal of stabilising margins.

The Group therefore confirms its development prospects thanks to the aforementioned investments capable of sustaining organic growth, to a strong development of activities concerning energy efficiency projects in buildings (taking advantage of the opportunities offered by current legislation) and to a complete integration of the recently acquired companies in the Environment sector.

Moreover, the prospects for growth in profitability take into account the continuation of the Covid-19 emergency, which the Group estimates will have a negative effect on EBITDA of no more than € 10 million, additional provisions for bad debts of € 10 million (already set aside in the first half) and a partial re-absorption of € 20 million of the negative effect on net working capital recorded in 2020.