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Share Performance

share since IPO

After listing (placement price of€1.25), the shares registered constant growth, which began and coincided with the announcement of good results in 2003 (an increase in EBITDA of 25% with a 50% increase in net profit). The positive trend, often above the sector average, was supported by good financial statements and business plans marked by growth and mergers. The share price reached its highest value in 2007 of €3.4.

The world financial crisis, which begun the second half of 2008 (the collapse of Lehman Brothers) and continued for most of 2009, also had serious repercussions on global financial markets throughout 2010-2011 and created a great deal of uncertainty among operators. The crisis then turned into a sovereign debt problem in several nearby European countries which reached levels felt to be excessive, worrying investors; the crisis specifically affected Italy with a further negative emphasis in the second half of 2011. The joint actions of the Community institutions, together with rigorous financial policies implemented in the European countries involved, have still not managed to restore faith in the financial market with a return to normal conditions. In this difficult financial market context, the European utility sector suffered negative market trends in recent years, recording a performance that was slightly worse (around 5%) in 2011 as a result of factors specifically related to the sector (tax on nuclear fuel, the June referendum for the abolishment of the water tariff system in Italy and the increase in the Robin Hood Tax introduced by the Italian Government). These aspects also affected the Hera share price, in spite of the fact that their impact on the Groups’ fundamentals was less important, compared with that on other operators in the market, thanks to the prudent strategies pursued by the Group.

share in 2011

The FTSE Italia All Share Index closed 2011 with a performance down 24.3% compared with the start of the year, while the Italian Local Utility index closed in the same period down more than 32%. In 2011, but also for almost the entire ten-year period, Hera stock often fared better than local utilities, with an official price at the last trading session of the Stock Exchange in 2011 of €1.096, in other words a negative performance of -29.7%. Hera’s best relative performance (compared with the local utility sample) coincided with the publication of good results for quarterly financial statements and business plans. The average daily trading level stood at 1.3 million shares, with an average value of €1.8 million in 2011.

The Hera Group market valuation at the end of 2011 involved a 2011 EV/EBITDA multiple of 4.9, a 2011 P/E ratio of slightly more than 11 and a dividend yield of 8.4%. Market capitalisation, equal to 70% of the book value, does not seem to fully reflect the improved financial soundness of the Group compared with its competitors, the prospects for further growth forecast in the business plan and the opinions of financial analysts, who have expressed an average valuation approximately 36% higher than at the year end.

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