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Introduction & Market Context
Italian utility company ACEA (BIT:ACE) reported its first quarter 2025 results on May 14, highlighting solid performance across its business segments. The Rome-based infrastructure company, which focuses on water management, electricity distribution, and environmental services, saw continued growth in its core regulated businesses, which account for 84% of the company’s EBITDA.
ACEA’s stock closed at €20.36 on the presentation day, down 0.39% for the session, but remains near its 52-week high of €21.12, reflecting investor confidence in the company’s stable business model and growth trajectory.
Quarterly Performance Highlights
ACEA reported group revenues of €1.1 billion for Q1 2025, with approximately €600 million coming from regulated businesses, representing a 4% increase compared to the same period in 2024.
EBITDA reached €384 million, up €27 million (+8%) versus reported Q1 2024 figures and €24 million (+7%) compared to recurring Q1 2024 results. This growth demonstrates the company’s ability to generate consistent earnings from its utility operations.
As shown in the following overview of Q1 2025 results:
Net profit amounted to €98 million, showing a 19% increase versus reported Q1 2024 figures and a 3% rise compared to recurring Q1 2024 results. This performance was achieved despite challenges in the operating cash flow.
Capital expenditures net of public subsidies totaled €242 million, in line with Q1 2024. The company’s total CAPEX was €262 million, with €20 million funded by grants, compared to €247 million in Q1 2024 (with €5 million grant-funded).
Segment Performance Analysis
ACEA’s business portfolio remains heavily weighted toward regulated activities, with Water Italy and Grids and Public Lighting segments contributing 79% of total EBITDA. The breakdown of Q1 2025 EBITDA by business segment shows:
Water Italy remained the largest contributor to ACEA’s results, generating €197 million in EBITDA (51% of the total), up 7% from Q1 2024. This segment benefits from a regulated asset base (RAB) of €4.8 billion as of December 31, 2024.
The Grids and Public Lighting segment delivered €107 million in EBITDA (28% of total), a 2% increase from the previous year. Capital expenditures in this segment rose significantly by 47% to €84 million, supporting future growth from its €3.1 billion RAB.
The Commercial segment showed strong momentum with EBITDA of €50 million (13% of total), increasing by 16% compared to Q1 2024. This growth came despite a reduction in electricity customers from 1.24 million to 1.01 million, reflecting the company’s improved profitability per customer.
The Generation segment posted the most dramatic improvement, with EBITDA rising 94% to €15 million, driven by favorable energy market conditions and higher production volumes. Total (EPA:TTEF) energy output increased to 205 GWh from 174 GWh in Q1 2024, with gains across photovoltaic, thermoelectric, and hydroelectric sources.
Financial Position and Outlook
Despite solid operational performance, ACEA reported negative operating free cash flow of €127 million for the quarter. This was primarily due to working capital changes of €196 million and capital expenditures of €242 million, which offset the strong EBITDA generation.
The company’s cash flow statement reveals the key factors affecting liquidity:
Net debt increased to €5.12 billion at the end of Q1 2025, up €163 million (+3%) from December 2024. This resulted in a slight deterioration of the Net Debt/EBITDA ratio to 3.23x from 3.18x at year-end 2024.
ACEA maintains a solid financial structure with 89% of debt at fixed rates, an average cost of 2.10%, and an average maturity of 4.6 years. The company’s debt profile shows limited near-term refinancing needs:
CAPEX allocation continues to prioritize regulated businesses, with Water Italy receiving 57% of total investments and Grids and Public Lighting accounting for 32%. This allocation strategy supports the company’s focus on stable, regulated returns:
Forward-Looking Statements
ACEA confirmed its 2025 guidance, projecting EBITDA growth of 2-3% compared to restated 2024 figures. The company expects capital expenditures of approximately €1.6 billion (€1.2 billion net of subsidies) and anticipates a Net Debt/EBITDA ratio between 3.4x and 3.5x by year-end.
The company continues to maintain strong sustainability credentials, with positive ratings from major ESG rating agencies. ACEA received an "EE+" rating from Standard Ethics, an "A" from MSCI, and a "low risk" score of 15.6 from Sustainalytics, reinforcing its commitment to sustainable infrastructure development.
With 84% of its EBITDA coming from regulated businesses, ACEA remains well-positioned to deliver stable returns to investors while managing the challenges of working capital fluctuations and maintaining its investment program.
Full presentation:
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