Trends in financial position and cash flows

See the following table as regards the investments made in each Operating Segment.

(*) The value of investments in the area is inclusive of financed investments amounting to € 22.8 million.
(**) The value of investments in the area includes investments in discontinued operations for a value of € 16.0 million.

The Environment Segment made investments of € 36.1 million, which increased by € 12.6 million compared to 31 December 2020. These mainly concern investments made by Acea Ambiente (+€ 8.9 million) for works carried out: at the Orvieto plant (+€ 1.0 million), for the purchase of the Borgorose shed (+€ 2.4 million), for revamping work at the Aprilia plant (+€ 3.2 million) and for work at the San Vittore plant (+€ 0.9 million); Berg (+€ 1.4 million) for the construction of a concentrator. Finally, note that the change in scope contributes € 2.0 million, attributable mainly to Ferrocart.

The Commercial and Trading Segment recorded investments of € 49.4 million; the increase compared to 31 December 2020 (+€ 5.3 million) is mainly attributable to Acea Innovation for e-Efficiency projects. Investment in this segment relates mainly to Acea Energia and includes € 27.6 million for the cost of acquiring new customers in accordance with IFRS 15 and € 15.5 million for developments and upgrades to system extensions for the new CRM platform, as well as major improvements to support systems for the management of contact centre operational processes and the analysis and monitoring of customer margins.

The Overseas Segment showed an increase of € 1.5 million, mainly attributable to Aguas de San Pedro (€ 0.7 million). The change in the scope of consolidation contributed € 0.8 million due to the consolidation of Consorcio Lima Norte and Consorcio Acea.

The Water Segment realised total investments for € 522.1 million, increasing by € 46.1 million on the previous year, due to higher investments by Acea Ato2 (+€ 32.9 million), GORI (+€ 6.0 million) and AdF (+€ 2.9 million) partially offset by the lower investments of Acea Ato5 (-€ 6.3 million). The change in the consolidation scope refers to SII for € 8.5 million and to Adistribuzionegas Gas for € 2.5 million. The investments of the Segment refer mainly to extraordinary maintenance work, reconstruction, modernisation and expansion of plants and networks, the reclamation and expansion of water and sewer pipes of the various Municipalities and work on purification and transport plants (ducts and feeders).

The Energy Infrastructure Segment recorded a € 11.7 million decrease in investments. The investments in the period refer mainly to the expansion and upgrading of the grids at various voltage levels, the work on the primary stations, secondary substations and meters, the metering units and remote control equipment as part of the grid “Adequacy and Safety” and “Innovation and Digitalisation” projects. All investments were undertaken with a view to improving the quality of service and increasing resilience. Intangible investments refer to projects for the re-engineering of information and commercial systems.

The Generation Segment made investments of € 39.4 million, in line with 31 September 2020 and they refer to: (i) Acea Produzione (€ 17.5 million), mainly for the installation of the third engine at the Tor di Valle thermal power station, for the requalification work on the substations of the S. Angelo, Salisano and Orte Power Stations and for the extension and restoration of the district heating grid in the Mezzocammino district in the south of Rome; (ii) the investments made by Acea Solar (€ 10,5 million) developed by Aiem, Solarfields and Enertronica and by Fergas (20 MW) for the construction of photovoltaic plants on both agricultural and industrial land; and (iii) Fergas Solar (€10.4 million) for the Ferrandina plant.

The Engineering & Services Segment recorded investments of € 9.9 million; the change in the consolidation scope refers to SIMAM for € 0.8 million. The investments by Acea Elabori (€ 6.6 million) relate mainly to the design and implementation of processes and new systems, as well as extraordinary maintenance work on the Grottarossa site and equipment for the analysis laboratory.

The Corporate Segment made an increase in investments of € 5.9 million compared to 31 December 2020. The investments for the period refer to: (i) the purchase and upgrade of software to support the development of IT platform management, corporate security and administrative management systems; (ii) investments in company business premises and (iii) investments in hardware for technological development projects for the improvement and evolution of the IT network. Finally, during the year Acea purchased from ATAC SpA, for € 1.6 million, the land adjacent to its base in Piazzale Ostiense, for use as a car park. This acquisition was made on the basis of a competitive procedure.

Group investments concerning shared IT infrastructure totalled € 32.5 million.

Equity investments and equity securities not constituting control, connection or joint control increased by € 15.8 million compared with 31 December 2020, net of the effect of the reclassification of the Belaria investment (€ 1.0 million) following the application of IFRS 5 (see the relevant paragraph for more information). The change was determined by the increase in the valuation of companies consolidated with the equity method (€ 20.5 million), offset by other decreases of € 4.6 million, related mainly to the distribution of dividends.

The stock of employee severance indemnity and other defined benefit plans reported an increase of € 1.9 million, mainly due to the drop in the rate used (from 0.35% at 31 December 2020 to 1% at 31 December 2021).

Provisions for risks and charges increased by 23.2% compared to the previous year. The details by nature of the provisions are presented below. The change relates mainly to the alteration of the consolidation scope owing to the recognition of the post mortem provisions of the new companies acquired at the end of 2021 in the Environment Segment. The provision for Deco amounts to € 18.1 million and the one for Ecologica Sangro totals € 17.5 million.

The change in net working capital compared to 31 December 2020 is attributable mainly to an increase in current receivables of € 90.1 million, the increase in other current assets (+€ 144.9 million) partially offset by the increase in current payables of € 79.2 million, and other current liabilities of € 94.6 million.

Receivables from users and customers, net of provisions for impairment of receivables, amounted to € 1,027.0 million (€ 934.2 million at the end of 2020) and are up by € 106.5 million compared to 31 December 2020. The following are noted: (i) a decrease in receivables in the Water Segment of € 43.5 million attributable mainly to GORI (-€ 13.9 million), Gesesa (-€ 8.4 million) and SII (-€ 5.6 million); (ii) an increase in receivables in the Energy Infrastructure Segment of € 18.6 million; iii) an increase in receivables in the Commercial and Trading Segment of € 115.0 million, attributable mainly to Acea Energia (+€ 101.3 million), to Umbria Energy (+€ 6.3 million) and Acea Innovation (+€ 5.7 million); iv) an increase in receivables in the Environment Segment of € 11.9 million, deriving mainly from the increase in receivables of Acea Ambiente (+€ 5.7 million), Cavallari and Ferrocart (totalling +€ 1.7 million).
The change in the consolidation scope accounts for € 12.2 million.

The decrease in provisions for the impairment of receivables was also due to the effects of the sale of non-performing receivables amounting to € 98.7 million at 31 December 2021. Receivables totalling € 1,463.9 million were transferred without recourse in 2021, of which € 195.1 million to the Public Administration.

As regards relations with Roma Capitale, the net balance at 31 December 2021, as highlighted in the table below was € 32.2 million payable by the Group (the payable balance at 31 December 2020 was € 28.6 million).

Trade and financial receivables suffered an overall decrease of € 42.3 million compared to the previous year (mainly due to the net balance between the accrual of receivables in the period and collections in the year). The main changes in the year are as follows:

• Higher receivables referable to Acea Ato2 for € 42.9 million; 
• Higher receivables referable to the Public Lighting service for € 37.2 million; 
• Collection of receivables relating to the Public Lighting service for € 75.3 million; 
• Collection of receivables relating to Acea Ato2 for € 44.9 million; 
• Collection of receivables relating to Acea Energia for € 2.1 million.

Payables decreased by € 38.7 million compared to the previous year; the main changes during the year are as follows: 

• Higher payables due to the recognition of share dividends totalling € 86.9 million, accrued by Acea in the 2020 financial statements. The dividend was approved by the Shareholders’ Meeting in April 2021; 
• Higher payables due to the recognition of the portion accrued in 2021 related to the Acea Ato2 concession fee, for € 25.3 million; 
• Higher payables due to the recognition of share dividends totalling € 2.2 million, accrued by Acea Ato2 in the 2020 financial statements. The dividend was approved by the Shareholders’ Meeting in April 2021; 
• Higher payables due to the recognition of the accrued portion of the Cosap debt for € 1.6 million; 
• Payment of Acea Ato2 debt obligations relating to concession fees from 2017 to 2020 for a total of € 49.9 million; 
• Payment of Acea Ato2 share dividends for 2018 and 2019 for a total of € 4.3 million; 
• Payment of Acea share dividends for 2018, 2019 and 2020 for a total of € 99.2 million; 
• Payment of electricity surcharges accrued up to 2011 for € 2.1 million.

Note also that in the course of the year, licence debts totalling € 15 million were paid by areti to the various municipalities.

In 2021, the following offset/payment transactions were made for a total of € 123.1 million. The main transactions are listed below: 

• March 2021: offsetting of receivables for € 18.6 million relating to the Public Lighting service for January-November 2020 fees, offsetting Acea’s share dividends for 2018; 
• June 2021: offsetting of receivables for € 8.9 million relating to receivables from water use for the period November - December 2020, offsetting the share dividends for the years 2018 and 2019, and the portion of the 2020 concession fee.
• July 2021: offsetting of receivables for € 11.9 million relating to water use for the period January-April 2021, offsetting a portion of the 2020 concession fee; 
• July 2021: offsetting of receivables for € 8.9 million relating to the Public Lighting service for the periods December 2020 and January-April 2021, offsetting Acea’s share dividends for 2019; 
• September 2021: offsetting of receivables for € 4.1 million relating to the Public Lighting service, offsetting Acea’s share dividends for 2018; 
• September 2021: offsetting of receivables for € 7.2 million relating to the Public Lighting service for the period May-August 2021, offsetting Acea’s share dividends for 2018; 
• October 2021: offsetting of receivables for €2.1 million relating to electricity users for the years 2015-2018, offsetting electricity surcharges accrued up to 2011; 
• October 2021: offsetting of receivables for € 7.2 million relating to the 2017 and 2018 Public Lighting service and street lighting works offsetting Acea’s share dividends for 2018; 
• November 2021: offsetting of receivables for € 29.0 million related to the Public Lighting service as an advance payment for the years 2016 to 2020, offsetting Acea’s share dividends (balance of 2018 and part of 2019); 
• December 2021: offsetting of receivables for € 24.0 million relating to water use for the period May-November 2020 and December 2018, offsetting Acea’s share dividends for 2019.

Recall that as part of the activities required for the first consolidation of the Acea Group in the 2018 Financial Statements of Roma Capitale, a round table was launched to reconcile the Roma Capitale Receivables and Payables. The Group companies chiefly concerned are Acea and Acea Ato2. After several meetings and communications, on 22 February 2019 the Technical Department of the Municipality (SIMU) in charge of the management of the contracts with the Acea Group communicated several objections relating to the supply of both works and services for the period 2008-2018. These objections were completely rejected by the Group. In order to arrive at a complete resolution of the differences during 2019 a specific Joint Technical Committee was set up with the Acea Group. Following several meetings, on 18 October 2019, the Joint Technical Committee drew up a report on the closure of the work, highlighting the results that emerged and proposing a favourable restart of the ordinary execution of the mutual obligations between the Acea Group and Roma Capitale. As a first step after the completion of the work, the parties took steps to implement the results that emerged from the discussions, restarting the payment of their respective receivables and payables. In 2020 at total of € 33.3 million of receivables referred to the aforementioned Report were settled in the Group.

In 2021 a new Public Lighting Technical Panel comprising Acea and Roma Capitale was set up with the intention of continuing the resolution of issues preventing the liquidation of receivables. As a result of this work, Roma Capitale paid Acea the Public Lighting receivables for € 75.3 thousand through offsets.

For the Public Lighting contract at the end of 2020 the AGCM made its position clear regarding the legitimacy of the existing contract, to this day a source of audits, works and joint investigation.
Among other things, the measure also gave rise to audits on the congruity of the prices applied. In February 2021, following the aforesaid feedback and works, Roma Capitale confirmed the absolute congruity and convenience of the current economic terms with respect to the CONSIP parameters. Therefore, also during 2021, while awaiting the conclusion and finalisation of these aspects, Acea regularly continued to provide the Public Lighting service. The service has therefore been invoiced and already partly paid for by Roma Capitale.

Again in 2021, reconciliation work continued between Acea Ato2 and Roma Capitale (SIMU Department) and a joint technical report was completed in December, largely overcoming and resolving the disputes affecting the 2019 Technical Panel. This report led to the write-off of the receivables in question through the use of the provision for impairment set aside for this purpose. The operation reduced receivables and provisions by approximately € 7.4 million.
Note that in September 2021 the Consolidated Financial Statements of Roma Capitale as at 31 December 2020 were approved.

The following table presents an analysis of receivables and payables, including those of a financial nature, between Acea Group and Roma Capitale, as regards both net credit exposure and debt exposure, including financial items.

Current payables rose due to the increase in the stock of payables to suppliers (+€ 102.7 million), net of the decrease in payables to the parent company Roma Capitale (-€ 25.2 million). The increase in trade payables was due in particular to the debts of Acea Energia and GORI, partially offset by the decrease in payables to areti and Acea Ato2.

Other Current Assets and Liabilities recorded an increase of € 144.9 million (of which € 6.9 million for change in scope) and € 94.6 million (of which € 6.1 million for change in scope) compared to last year. In detail, other assets rose as a result of the increase in tax receivables of € 19.1 million, in receivables for energy equalisation of € 58.3 million and receivables for commodity derivatives relating to Acea Energia for € 69.3 million.

As regards the increase in other current liabilities, Acea Ambiente’s payables increased by € 37.8 million as a result of the recognition of the payable for the purchase of the further 35% share in DECO and Acea Energia’s payables for commodity derivatives for € 44.6 million.

The shareholders’ equity amounted to € 2,516.4 million. The changes, amounting to € 193.2 million, are detailed in the relevant table and are basically due to the distribution of dividends, the accrual of 2021 profits, and the change in the cash flow hedge reserves and those formed by actuarial profits and losses as well as the change in the consolidation scope.

Group financial debt recorded an overall increase of € 436.4 million, going from € 3,552.0 million at the end of 2020 to € 3,988.4 million at 31 December 2021. As described above, the Net Financial Position continuing on from previous years amounts to € 3,977.2 million.

Non-current financial debt increased by € 637.7 million compared with the end of the 2020 financial year, due to an increase in bonds of € 888.5 million, partly offset by a reduction in medium and longterm debt of € 250.8 million (of which a decrease of € 19.6 million in debt for IFRS16), as shown in the table below:

Bonds of € 4,142.0 million increased by € 888.5 million mainly due to the placement of two Green Bonds issued in January 2021 by the Parent Company under the Euro Medium Term Notes (EMTN) programme. The amount of € 889.7 million includes the long-term portion and the arrangement costs.

Medium/long-term loans of € 650.0 million record a total decrease of € 250.8 million due mainly to the Parent Company (-€ 197.3 million) for the early repayment on the loan taken out in 2020 for € 100.0 million and the early repayment of principal for € 52.8 million for a portion of EIB funding taken up in 2014. The following table shows medium/long–term and short-term borrowings (excluding the portion due to application of IFRS 16) by term to maturity and type of interest rate.

Note that the fair value of Acquedotto del Fiora’s hedging derivatives was negative by € 1.9 million (it was negative by € 4.4 million at 31 December 2020), while Acea’s hedging instrument, negative by € 0.3 million at 31 December 2020, was extinguished.
Current financial debt is positive by € 803.5 million, increasing by € 201.3 million from the end of the 2020 financial year. Of this increase, € 148.7 million is attributable to the parent company, € 15.1 million to areti and € 20.9 million to the consolidation of Ecologica 32 Sangro. The higher cash and cash equivalents of the Parent Company are primarily generated by the issue of the bond loans.
Note that financial debt includes € 118.4 million in payables to Roma Capitale for dividends resolved to be distributed and does not include other payables of € 61.4 million relating to share purchase options.

At 31 December 2021 the Parent Company had unused committed credit lines of € 500.0 million, uncommitted lines of € 429.0 million of which € 21.1 million used, as well as unused and available medium/long term loan lines of € 250.0 million. No guarantees were granted in obtaining these lines.

It must be noted that the long-term Ratings assigned to Acea by the International Ratings Agencies were:

• Fitch “BBB+”;
• Moody’s “Baa2”.