The Business Plan

On 20 March 2012, Terna approved the Terna Group Business Plan for the period 2012-2016; guidelines are set out below:

  • core business: over the next 5 years, €4.1 billion will be invested in the safety and modernisation of the electricity grid, of which 82% will be for the National Transmission Grid development with investments focused on maximizing the use of system capacity and reducing congestion, fostering the development of generation capacity from renewable sources;
  • non-core business: up to approximately €1 billion will be used for the development of battery accumulation systems for 240 MW, at present awaiting authorisation and in any case as long as suitable remuneration is obtained. Additionally, both in Italy and abroad, investments of up to 900 million are planned in projects for private customers, with a forecast return that exceeds that of regulated business. In thus doing, the objective expenditure in non-core business is doubled (up to €1.9 billion), with respect to the previous plan;
  • improved margins (EBITDA margin):it is expected that the increased revenue and the control of costs will allow to achieve an accumulated EBITDA over period 2012-16, up approximately 19% with respect to the previous five-year plan. Average annual growth in EBITDA goes from 5% to 7.5%, showing a consistent improvement in operative cash flow. At the end of the period, the EBITDA margin will exceed 80% increasing with respect to the previous target of 78%;
  • a sound capital structure: the commitment to strengthen equity coefficients continues. During the course of the plan, net debt is estimated as growing by approximately €1.6 billion to €6.7 billion, with a significant reduction of €1 billion with respect to the previous plan. The capital structure remains solid: during the plan, the ratio of net debt and RAB remains below 55% in all years of the plan and the ratio of net debt and EBITDA with respect to the 4.2 times of end 2011, remaining below the 4 times;
  • new dividends policy: as from 2012, a basic dividend is envisaged from core business amounting to 19 euro cents per share, in addition to the contribution of non-core business (payout of 60% on results and/or gains).