F2i presentation March 2013 1F2i – Fondo Italiano per le InfrastruttureOverview of F2i and Second Fund F2iMarch 2013
F2i presentation March 2013 2Table of Contents‒ Overview of F2i Page 3‒ The Second F2i Fund Page 18‒ F2i I Investments – S...
F2i presentation March 2013 3Overview of F2i
F2i presentation March 2013 4F2i Background‒ In the early to mid-’90s, Italy launched a large privatisation programme, inv...
F2i presentation March 2013 5F2i position in the Italian infrastructure market‒ F2i was therefore created in 2007 by the m...
F2i presentation March 2013 6F2i position in the Italian infrastructure market‒ In less than four years, F2i I has investe...
F2i presentation March 2013 7Strong Capital Commitment and Endorsement‒ The two leading Italian banking groups, with moret...
F2i presentation March 2013 8F2i Sponsors and Investors in F2i ICDPF2i –Fondo Italiano perle Infrastrutture2 Banks(1 Core ...
F2i presentation March 2013 9F2i I Sponsors and Investors by typeInvestorsNumber ofentitiesAmounts(€ mln)% of the FundBank...
F2i presentation March 2013 10A Uniquely Qualified Team: Knowledge, Experience andRelationshipsMatteo Ambroggio –Partner:R...
F2i presentation March 2013 11Summary of Key Terms‒ Size: €1.85bn‒ Duration: Up to 15 (+3) years (expected average life7,5...
F2i presentation March 2013 12F2i I and F2i II Investment PortfolioCommitted(M€)Drawn(M€)%F2i I 75% 85,1% 100%100%100% 40,...
F2i presentation March 2013 13F2i’s strategy in its sectors of investmentF2i is focusing on key sectors of Italian infrast...
F2i presentation March 2013 14The F2i “Group”: Current PortfolioThe current F2i portfolio is performing in line or better ...
F2i presentation March 2013 15F2i’s Partners‒ During its first years of activity, F2i has built strong relationships and p...
F2i presentation March 2013 16F2i I: Dividends from Portfolio Companies(1) Calculated as the average of the valuation prov...
F2i presentation March 2013 17CapitalGainF2i I: Dividends to InvestorsInvestment in Enel Stoccaggi‒ Thanks to the dividend...
F2i presentation March 2013 18The Second F2i Fund
F2i presentation March 2013 19Pipeline and Investment OpportunitiesF2i believes that the Italian infrastructure market wil...
F2i presentation March 2013 202012 2013 2014 2015Highways Airports Gas distribution Electric grid Water distribution TLC W...
F2i presentation March 2013 21‒ In October 2012, F2i has therefore launched its Second Fund, in order to take advantage of...
F2i presentation March 2013 22‒ The First closing of the Second F2i Fund was achived with a group of Sponsors, includingex...
F2i presentation March 2013 23F2i II: TermsFund F2i II – Secondo Fondo Italiano per le InfrastruttureManagement Company F2...
F2i presentation March 2013 24F2i I and F2i II: Exit Strategy‒ F2i has a long term holding strategy for its participations...
F2i presentation March 2013 25Being a Core Investor in F2i II‒ Enter the infrastructure market of the third largest Europe...
F2i presentation March 2013 26Role of Core Investors in the F2i StrategyF2i Fund I F2i Fund II Core InvestorSponsorsInvest...
F2i presentation March 2013 27F2i I Investments – Selected Case Studies
F2i presentation March 2013 28Investments – Selected Case StudiesENEL RETE GAS 2i GAS (EX EON RETE)‒ Transaction date: May...
F2i presentation March 2013 29Ranking European LBOs in 2009ENEL Rete Gas has been the biggest LBO finalised in Continental...
F2i presentation March 2013 30ENEL RETE GAS – Summary Data‒ 2.256.000 Clients‒ 3.800 Mln mc of gas distributed (+17% since...
F2i presentation March 2013 312i GAS (EX EON RETE) – Summary Data2i Gas Enel Rete Gas + 2i Gas‒ 698.000 Clients‒ 1.200 Mln...
F2i presentation March 2013 32G6 RETE GAS – Summary DataG6 Rete Gas Enel Rete Gas + 2i Gas + G6 Rete Gas‒ 1.008.000 Client...
F2i presentation March 2013 3360 701301654222441108182009 2010 2011GrowthTransparencySafety and QualityImprovementTotal in...
F2i presentation March 2013 34Pipeline Inspection and Rapid Troubleshooting TimePipeline inspected (%) Average troubleshoo...
F2i presentation March 2013 35Technical QualityAEEG safety incentives(1) (€’000)(1) Refers to incentives distributed in 20...
F2i presentation March 2013 36Investments – Selected Case StudiesAirport sector investmentsGesac (Naples)Sea (Malpensa / L...
F2i presentation March 2013 37GESAC SEA‒ Acquisition of a 70% stake in Gesac‒ Transaction date: December 2010‒ Equity Stak...
F2i presentation March 2013 38Investments – Selected Case StudiesSAGAT‒ Acquisition of 50,8% stake in Sagat (with the poss...
F2i presentation March 2013 39Investments – Selected Case StudiesMETROWEB‒ Transaction date: 30 June 2011 (signing on 31 M...
F2i presentation March 2013 40F2i II Investments – Current Portfolio
F2i presentation March 2013 41F2i II Investment Portfolio44,3% (35,7% Fund I; 8,6% Fund II)60,0%100%49,0%345 87 25%* The c...
F2i presentation March 2013 42SEA S.p.A. – Milan Malpensa and Linate Airports4242Company Profile SEA holds the concession...
F2i presentation March 2013 43F2i’s investment in SEA4343 The disposal of 14,56% share in SEA has been started by ASAM fo...
F2i presentation March 2013 44F2i’s investment strategy in the airport sector4444TORMXPLINBERBRE VERTREVENCAGNAPGENFCOCIA...
F2i presentation March 2013 45TRM S.p.A. – Waste to energy plantPlant description Final rendering– The waste to energy pla...
F2i presentation March 2013 46PCPR REISTOTRM S.p.A. – Acquisition processDescription of the acquisition process TRM SpA’s ...
F2i presentation March 2013 47TRM S.p.A. – F2i’s investmentF2i’s expense– The F2i’s investment for the acquisition of 60% ...
F2i presentation March 2013 48TRM S.p.A. – Strategic considerations for F2iItalian market and F2i position Leading Italian...
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Overview of F2i and second fund F2i

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The document mentions the activities of F2i - Fondi italiani per le infrastrutture - one of the largest country focused infrastrutcture funds and deals with some case studies related to the First and Second Fund. F2i (Vito Gamberale CEO) was created in 2007 by the main italian public and private financial institutions to be the main investor in italian infrastructure

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Overview of F2i and second fund F2i

  1. 1. F2i presentation March 2013 1F2i – Fondo Italiano per le InfrastruttureOverview of F2i and Second Fund F2iMarch 2013
  2. 2. F2i presentation March 2013 2Table of Contents‒ Overview of F2i Page 3‒ The Second F2i Fund Page 18‒ F2i I Investments – Selected case studies Page 27‒ F2i II Investments – Current portfolio Page 40
  3. 3. F2i presentation March 2013 3Overview of F2i
  4. 4. F2i presentation March 2013 4F2i Background‒ In the early to mid-’90s, Italy launched a large privatisation programme, involving some ofthe most important manufacturing and infrastructure companies in the Country (food, oil &gas, telecoms, energy, airports and toll roads)‒ However, the outcome of the privatisation programme was mixed:‒ Privatisations through public share offerings have created large, efficient companiesthat are today among the most active players in the domestic and internationalmarkets (ENI, ENEL, Terna and Snam Rete Gas)‒ Privatisations through the sale to “strategic investors” ended up with a shareholderstructure skewed towards private families that failed to fully understand the “public”nature of infrastructures, reduced investments and eventually curtailed the growth ofthese companies (Telecom Italia, Autostrade, Aeroporti di Roma)‒ F2i was conceived by the sharing by the main Institutions in the Country and itsmanagement team of the conviction that a long-term, institutional, professionally managedinfrastructure fund could provide the ideal instrument to endow Italian infrastructurecompanies of a stable shareholding structure, that could pursue a coherent strategy:‒ Long term orientation‒ Focus on creation of large “national champions” that can re-invest cash flow for thedevelopment of infrastructure‒ Target maximum efficiency, quality of services, investments, long-term, growth andfinancial performance
  5. 5. F2i presentation March 2013 5F2i position in the Italian infrastructure market‒ F2i was therefore created in 2007 by the main Italian public and private financialinstitutions to be the main investor in Italian infrastructure‒ Its Sponsors include: State-owned bank Cassa Depositi e Prestiti; the twolargest Italian Banks (Banca Intesa San Paolo and Unicredit); some of thelargest Banking Foundations; two Italian Pension Funds‒ With a fund raising equal to €1,85 billion, F2i I is the largest Italian privateequity fund as well as one of the largest country focused infrastructure funds‒ The success of F2i’s proposition is supported by achievements on both sides:fund raising and investments‒ In raising capital, F2i was able to attract considerable private and public amountof money notwithstanding the severe international financial crisis (anti-cyclicaland defensive concept)‒ F2i is demonstrating to be seen as the flagship Italian Investor in strategicinfrastructure assets of the Country‒ F2i is now launching its Second Fund: on October 2nd, 2012, F2i achieved thefirst closing for €575MM (total Fund target size €1,2 billion).
  6. 6. F2i presentation March 2013 6F2i position in the Italian infrastructure market‒ In less than four years, F2i I has invested in 13 companies. After two disposals and the combination ofthree companies in the gas distribution sector, F2i currently has 9 investments (total investment around€1,85 billion, equal to the totality of the fund), in companies operating in six key infrastructure sectors:gas distribution, transportation (airports and motorways), water, renewable energies (windpower andphotovoltaic) and TLC‒ F2i has undertaken a consolidation / aggregation strategy in these sectors, aimed at creating first classnational operators of infrastructure‒ F2i adopts a balanced leverage strategy, in order to optimize the return on investment and to modulate thedraw-downs from investors‒ Current total draw-downs from investors amount to € 1.45 milion, representing 78% of the total amountof the fund‒ F2i has actively managed and rationalized its portfolio through the disposal (at a profit vs. cost) of thoseparticipations that could not be considered “core” any longer (e.g. logistics centre Interporto Rivalta Scriviaand gas storage greenfield Enel Stoccaggi)‒ Focus on investments with high cash generation and high dividend distribution potential. The firstdividend got paid to the investors 2 years in advance compared to the business plan of the fundo Dividends distributed to investors for over € 82 milion during 2010 and 2011 (“cash on cash” yieldof 4,8% and 4,1%)o F2i was able not to call the management fees from investors since the second semester of 2010‒ In October 2012, F2i has launched its Second F2i Fund, with commitments from its Sponsors of €575MM.The Fund has already started its investment activities, for up over €300MM:o Acquired 60% of TRM, a leading WTE plant in Turin (north west of Italy)o Ongoing negotiations for investment in waste treatment business of utility Ireno Acquired 8.6% of SEA (Milan airport) (F2i overall controls 44.3% of the Company)
  7. 7. F2i presentation March 2013 7Strong Capital Commitment and Endorsement‒ The two leading Italian banking groups, with morethan 10,000 branches in Italy and total assets over€1,500bn‒ The Italian Government through CDP (70%owned by the Italian Government), leader infinancing of local and regional governments in Italy,with 29% market share‒ One international financial player with strong andrecognized presence and experience in Italy‒ Qualified representatives of major institutionalinvestors in Italy (banking foundations andprofessional pension funds)‒ Sponsors providing €938 mlnto the First Fund (€575 mlnfor the Second Fund)‒ Total commitment for the FirstFund reached €1.85bn‒ Combination of localrelationships and globalexperience‒ F2i benefits from fullendorsement of its Sponsors‒ F2i is the leading partner forinfrastructure investments inItaly9 BankingFoundations2 Italian PensionFundsPart of GroupA Leading Group of Sponsors for F2i I:
  8. 8. F2i presentation March 2013 8F2i Sponsors and Investors in F2i ICDPF2i –Fondo Italiano perle Infrastrutture2 Banks(1 Core Investor)2 Major Italian Banks19 OtherFoundations(2 Core Investors)1 International Bank3 Insurance Companies(3 Core Investors)10 Social Security Institutions &Pension Funds(4 Core Investors)2 InstitutionalInvestors2 Other Banks(1 Core Investor)Italian Investors InternationalInvestors6 Major ItalianFoundations2 Pension FundsSGR’s Shareholders(General Partnersor Sponsors)(Limited Partners)
  9. 9. F2i presentation March 2013 9F2i I Sponsors and Investors by typeInvestorsNumber ofentitiesAmounts(€ mln)% of the FundBanks 7 593 32,02%Pension Funds 13 487 26,30%Banking Foundations 25 439 23,70%Insurance Companies 4 175 9,45%Sovereign Financial Institutions (CDP) 1 150 8,10%Sponsor & Management n.a. 8 0,43%Total 1.852 100%
  10. 10. F2i presentation March 2013 10A Uniquely Qualified Team: Knowledge, Experience andRelationshipsMatteo Ambroggio –Partner:Regulated utilitiesexpert and assetmanagementexperienceLaura Pascotto –Partner:Airport sectrorexpert and M&AtransactionexperienceCorrado Santini –Senior Partner:Head of Project andStructured Finance,BBVA Italy‒ Diversified and complementary experience in infrastructure‒ Proven track record in deal origination and execution‒ Strong network of relationship with key infrastructure players and counterparts in ItalyVito Gamberale – CEOOne of the top business leaders in Italy‒ CEO of Autostrade (2000–2006)‒ CEO of Telecom Italia Mobile (1995–1998)‒ General Manager of Telecom Italia (1991–1995)‒ CEO and Chairman of ENI Group Subsidiaries (1984-1991)Carlo Michelini –Senior Partner eCIO: InfrastructureCorporate Financeexperience as MD atMorgan StanleyMarcello Garolla–Senior Partner:OperationsSignificantexperience inBanca d’Italia andin Ernst € Young;former CEO ofAgoraInvestments SGRFabio Albano–Partner:Strong experiencein M&A, withspecial focus onmotorways andinfrastructuresGiuseppinaFalappa –Partner:Relevantexperience inassetmanagement,costmanagementand internal auditMauro Maia –Senior Partner:InfrastructureCorporate Financeexperience as MDat Mediobanca
  11. 11. F2i presentation March 2013 11Summary of Key Terms‒ Size: €1.85bn‒ Duration: Up to 15 (+3) years (expected average life7,5y)‒ Investment Period: 4 (+2) year‒ Legal Structure: Limited liability partnership‒ Management Company: F2i SGR‒ Greenfield limited to <20% of the fund‒ Single assets limited to <20% of the fund (25%with Advisory Board); 25% (30% with advisoryBoard) for regulated assets‒ Sponsors and Core Investors (>=60mln) have co-investment rightsSolid Target ReturnsFund CharacteristicsInvestment FocusDiversification Rules‒ Minimum Target Return(“hurdle rate”): IRR = 8%gross per year (onaverage)‒ Target gross returns: 12-15%‒ Annual cash distributionof 4-6% of investedcapitalCo-investment Rights‒ Italian infrastructure opportunitieso Power and gas infrastructureo Airportso Telecom infrastructureo Transportationo Environmental services (water, WTE, …)‒ Equity or quasi-equity‒ Majority or influencing minority stakes, playingan active investor role
  12. 12. F2i presentation March 2013 12F2i I and F2i II Investment PortfolioCommitted(M€)Drawn(M€)%F2i I 75% 85,1% 100%100%100% 40,0%100% 100% 70,0%44,3% (35,7% Fund I; 8,6% Fund II)67,7%53,8% 87,2%85,0%15,7%100%49,8%26,3%F2i II 100% 60,0%49,0%* Projects already approved by F2is Board of Directors, now ongoing** Including the participation in Software Design 2.027 1.445 71%*** Including shares of Equiter (put & call 2014), SAB (put 2014) and AviapartnersF 2i R eteIdrica ItalianaM editerranea delleA cque235 6 2%100%G6 R ete Gas 68 68 100%F 2iR eti ItaliaEN ELR ete Gas2i Gas 350 350M etro webItaliaM etro web 201 201 100%75%SEA (M alpensa /Linate / B ergamo )532 532 100%F 2i A ero po rtiF 2i SistemaA ero po rtualeC ampanoGESA C ** (N aples) 90 68Saster N et 18 18 100%A lerio nC lean P o wer78 64 82%SA GA T *** (T urin) 116 66 56%Iren A mbiente * 136 0 0%50 43 87%100%F 2iA mbienteT R M 122 0 0%F 2iEnergieR inno vabiliH F VInfracis 31 31GASDISTRIBUTIONWATERDISTRIBUTIONAIRPORTSTLCRENEWABLEENERGYTRANSPORTWASTE TOENERGY
  13. 13. F2i presentation March 2013 13F2i’s strategy in its sectors of investmentF2i is focusing on key sectors of Italian infrastructure, aiming at creating “national champions”through organic growth and M&A. F2i’s portfolio companies strive to be leaders in their sectors interms of size, efficiency, quality of services, investment plans and financial performanceGASBuild the largest European independent gas distribution operator and be aconsolidator in a sector undergoing a rationalisation processRENEWABLESCreate two strong independent players in the two main renewablessegments (wind and photovoltaic)TRANSPORTEnter the toll-road sector, and become a reference stakeholder forcompanies that have an extremely fragmented shareholding structureWATERCreate a “national champion” in a strategic sector that requiressignificant investment for the upgrade of the existing network as well asthe completion of the national water gridAIRPORTSPursue a consolidation strategy in a sector characterized by strongfragmentation and by a strong presence of the public sectorENEL Rete Gas2i Gas (ex E.On Rete)AlerionHFVInfracisMediterraneadelle AcqueGESACSEASAGATG6 Rete GasTELECOMSBuild upon the Milan broadband fibre optic network to increase thepenetration in the city (FTTH) and to replicate the same model in otherurban centresMetrowebSasternetProjects Moon e LinkWTE Create the third national operator and facilitate consolidation between themain players of the market in order to create a national championTRM
  14. 14. F2i presentation March 2013 14The F2i “Group”: Current PortfolioThe current F2i portfolio is performing in line or better than expectations. It is composed of companiesthat could generate by 2017 aggregate turnover of approximately €2.3 bn and EBITDA of over €1.1 blnF2iENELReteGas63,8%Metroweb46,9%GESAC70%HFVMdA40% 49,75%InfracisSEA44,3%(8,6%*)Alerion15,7%SAGAT50,8%TRM60%*Aggregated** Net of extraordinary items* Second Fund F2iRevenues2011602** 56 68 64 579 129 25 65Underconstruction1586EBITDA2011324 45 22 16 146 50 20 36 659Margin 53,8% 80,3% 32,3% 25,0% 25,2% 38,7% 80,0% 55,3% 41,5%Cap-ex2011189 12 23 10 101 33 168 57 593Personnel20112112 34 316 383 5090 412 10 103 8460
  15. 15. F2i presentation March 2013 15F2i’s Partners‒ During its first years of activity, F2i has built strong relationships and partnerships with Italian Institutionsand Italian and international operators and financial investorsEnel Rete GasMdASEAGesacSagatMetrowebTRMF2i’s Partners
  16. 16. F2i presentation March 2013 16F2i I: Dividends from Portfolio Companies(1) Calculated as the average of the valuation provided by the two appointed investment banks for ERG, Gesac, Mda, HFV and Alerion plus the historical cost ofall other investmentsAccording to its investment strategy, F2i made its main investments in brownfield assets, which wereable to generate important operating cashflows and, despite high level of capital expenditures, alreadycontributed sizeable dividends to the Fund. In particular, distributions from ENEL Rete Gas, Gesac andMediterranea delle Acque are illustrated in the table below:The high level of dividend distributed by ENEL Rete Gas (annual yield approx 19.0%) depends also byfinancial structure of the acquisition developed by F2i, which includes:‒ A Vendor Loan provided by the Seller ENEL Group at the time of the acquisition‒ A Loan Financing provided by a pool of international banks, which allows the company to makerelevant cash distributions to its shareholders while keeping investing in its core businessBook Value vs. Market Value of Portfolio CompaniesEquity Invested Dividends Yield2010 Enel Rete Gas 279,2 52,5 18,8%Yield totale 279,2 52,5 18,8%2011 Enel Rete Gas 279,2 53,3 19,1%MdA 177,1 11,8 6,7%Gesac 80,5 3,2 4,0%Total Yield 536,8 68,3 12,7%2012 Enel Rete Gas* 417,8 15,9 3,8%MdA 180,0 5,2 2,9%Gesac 80,5 4,0 5,0%Metroweb 114,4 1,2 1,0%Total Yield 792,7 26,3 3,3%
  17. 17. F2i presentation March 2013 17CapitalGainF2i I: Dividends to InvestorsInvestment in Enel Stoccaggi‒ Thanks to the dividends received from its portfolio companies, F2i was able not to call management fees frommid 2010 and to make significant distributions to its investors:Investment in Interporto Rivalta Scrivia (IRS)‒ On the other hand, the graphs below show draw down, capital gain and capital reimbursement related to theinvestments in IRS and ENEL Stoccaggi, which have been dismissed between the end of 2011 and the firstquarter of 201229,029,06,5+ 6,5 M€IRR: 8,9%Acquisition (May 2009) Disposal (October 2011)Year Amount DrawnDividends Disposals Dividends Disposals2008 116,22009 353,62010 39,6 53,0 23,42011 620,7 60,4 35,3 30 292012 89,9 21,3 2,4 * 8,7Total 1.220,0 134,7 37,7 53,4 37,7* Dividends of 2012 have been used to cover management fees and other operating costsProceeds to the Fund Distributions to investors1,91,90,6+ 0,6 M€IRR: 11,7%Acquisition (Oct 2008) Disposal (Feb 2012)Acquisition (Oct 2008) Disposal (Feb 2012)CapitalGain
  18. 18. F2i presentation March 2013 18The Second F2i Fund
  19. 19. F2i presentation March 2013 19Pipeline and Investment OpportunitiesF2i believes that the Italian infrastructure market will continue to offer significantinvestment opportunities due to: The increasing fiscal constraints on the public sector and in particular localauthorities, which will lead to a new wave of privatisations. F2i’s recent acquisitionof a 29% stake in SEA (Milan airports) from the Municipality of Milan is expected torepresent an important benchmark for other local authorities to privatise theirinfrastructure assets; The high leverage of Italian utilities, that is likely to lead them towards non coreasset disposals and spin-offs; The rationalisation and consolidation process within certain sectors with a highlevel of fragmentation of players (e.g. gas distribution, water, Waste to Energy); Need of improvement in efficiency and infrastructure upgrades, which fosterschange in shareholdings (for example, optical fiber broadband networks, mobiletowers, water); Capital requirements by existing infrastructure companies to finance newinvestments (e.g. toll roads)
  20. 20. F2i presentation March 2013 202012 2013 2014 2015Highways Airports Gas distribution Electric grid Water distribution TLC WTEPipeline and Investment OpportunitiesTotal 2012 - 2015: € 7.648 mln9323.2882.811617Investment opportunities (data in € mln)F2i I Residual toinvest : € 0 – 83 mlnF2i has conducted together with Boston Consulting Group an in-depth market study of Italianinfrastructures. The study, based on a bottom-up analysis of infrastructure players in the country, hasidentified an equity investment opportunity in excess of € 7.5 bn in the next four years, focusing onbrownfield only within the infrastructure sectors identified as targets by F2i.
  21. 21. F2i presentation March 2013 21‒ In October 2012, F2i has therefore launched its Second Fund, in order to take advantage ofthese significant and immediate investment opprtunities, in coordination with the portfolioachieved by Fund I:o Opportunities to increase the stake in companies where Fund I has invested, so as to achievemajority or strenghthen F2i’s governanceo Make new investments in F2i sub-sectors, so as to continue in the creation of infrastructuregroups able to be leaders in Italy within their industryo Invest in one/two new subsectors, focusing on core infrastructure- The Second Fund has target size of €1,2 billion, and has already raised €575 MM fromits Sponsors- It has already made two investments (WTE company TRM and Milan airportsconcessionaire SEA) and is negotiating the acquisition of a stake in waste treatmentand disposal company Iren AmbienteSupport the growth inselected , key portfoliocompaniesIncrease F2i presencein current sectorsEnter new sectorsFund II: Investment Strategy
  22. 22. F2i presentation March 2013 22‒ The First closing of the Second F2i Fund was achived with a group of Sponsors, includingexisting and new shareholders of F2i SGR:- F2i is planning to reach its target fund size of €1.2billion with a placement with LimitedPartners in Italy (€200-300MM) and an international fund raising (€300MM-400MM)F2i Fund II: First Closing and Plan of DistibutionCDP 100Banca Intesa San Paolo 100Unicredit 100Banks 300Fondazione Cariplo 10EnteCarifirenze 40FCR Lucca (15+15) 20Compagnia San Paolo 60FCR Cuneo 30FCR Sardegna 25Bank Foundations 185Cassa Geometri 30Inarcassa 60Pension Funds 90Total A Units 575Sponsor of Fund I participating in Fund IINuovi SponsorFund II (€ MM)AUnits - Sponsor
  23. 23. F2i presentation March 2013 23F2i II: TermsFund F2i II – Secondo Fondo Italiano per le InfrastruttureManagement Company F2i – Fondi Italiani per le Infrastrutture SGRInvestment Strategy Mainly brownfield infrastructure, through majority or relevantminority stakesCoordinated investment strategy vis-à-vis Fund I, with a view tocommon creation of value where possibleTarget Amount €1.2bnTerm 15 years from last closingInvestment Period 4 years from last closing (extendible 1+1)Brownfield / Greenfield 80% / 20%Limits:Single Investment 20% (25% with Advisory Board) approval; 25% (30% with AdvisoryBoard) for sectors with regulated tariffsForeign Investments Max 20% (European Union) (25% with Advisory Board approval)Listed Companies Max 20% (30% with Advisory Board approval)Commissions 90bpTarget Returns 12-15% grossHurdle Rate: 8%Carry (Sponsors and Management) 20%; catch up 80%Co-investment Rights Sponsors and Core Investors have co-investment rights
  24. 24. F2i presentation March 2013 24F2i I and F2i II: Exit Strategy‒ F2i has a long term holding strategy for its participations, aiming at growing theEBITDA by virtue of organic and external expansion, fostering efficiencies, andmanaging the capital structure with the objective to obtaining a stable dividend flow.‒ At the time of exit, F2i will look at various disposal alternatives for its participations inits Funds, including trade sales and IPOs.‒ However, F2i portfolio is emerging as a strong group of assets focused on key sectorsof the Italian infrastructure space, with important synergies and growth opportunitieswithin each individual sectors. The current portfolio of F2i I had in 2011 an aggregateEBITDA in excess of € 650 million, potentially growing to over € 1.1 billion by 2017.‒ One exit strategy could therefore involve the listing of the Fund, or the contribution ofall or part of its portfolio to a newly created company, that could be listed, thuscreating a new, major player in the European infrastructure sector, that could continuethe management and development philosophy of F2i:o Focus on operational excellenceo Growth orientation, through cap-ex explansion plans and M&Ao Synergies acros the various participations‒ At that point, investors in F2i Fund I and II may decide whether to liquidate theirinvestment, or become part of a core shareholder group of the newly created entity.The newly created entity should continue F2i’s strategy to grow its investments, actingas a consolidator in its sectors of activity and potentially expanding to other markets.
  25. 25. F2i presentation March 2013 25Being a Core Investor in F2i II‒ Enter the infrastructure market of the third largest European economy through the mostimportant specialized player in the country‒ Benefit from the link with the institutional network of F2i’s Sponsors‒ Contribute to the growth of the unique existing asset portfolio, with growth prospects throughinternal growth and potential add-on acquisitions (cumulated organic capex of the portfoliocompanies in 2012-2022 almost € 5.0 bn)‒ Potential IPO of the Fund (possibly combining Fund I and Fund II) and consequentpossibility to become a cornerstone shareholder of one of the largest and most dynamicinfrastructure players listed in Italy (and one of the largest in Europe)‒ Co-investment rights in potential “jumbo” deals‒ Commission rebate of 40 bp after achievement of hurdle rate
  26. 26. F2i presentation March 2013 26Role of Core Investors in the F2i StrategyF2i Fund I F2i Fund II Core InvestorSponsorsInvestorsSponsorsInvestorsFocused Portfolio of Infrastructure InvestmentsInvestment in Units of the FundGasdistributionWater Airports Telecoms Renewables WTEPotential new sectorUnder review if CoreCo–Investments/lending
  27. 27. F2i presentation March 2013 27F2i I Investments – Selected Case Studies
  28. 28. F2i presentation March 2013 28Investments – Selected Case StudiesENEL RETE GAS 2i GAS (EX EON RETE)‒ Transaction date: May 2009‒ Equity Stake: 60%‒ Project Type: Brownfield‒ Partner: AXA Private Equity‒ Project EV: ~ €1,550MM‒ Acquisition of a 100% stake in E.OnRete alongside AXA PE‒ Transaction date: I quarter 2011‒ Equity Stake: 75%‒ Project Type: Brownfield‒ Partner: AXA Private Equity‒ Project EV: ~ €280MM‒ Acquisition of a 80% stake in EnelRete Gas alongside AXA PE‒ Second largest gas distributor with11% market share in terms of gasdistributed in 2009‒ 29,500 Km pipe network‒ Over 1,200 municipalities covered‒ Predictable revenue streams fromregulated activities‒ Strong cash generation‒ Seventh largest gas distributor with3.3% market share, in terms of gasdistributed in 2009‒ 9,000 Km pipe network‒ Over 300 municipalities covered‒ With this add on acquisition, F2ireached over 13% of the marketshare in the sector‒ Strong cash generationG6 RETE GAS‒ Acquisition of a 100% stake in G6Rete Gas alongside AXA PE‒ Transaction date: October 2011‒ Equity Stake: 75%‒ Project Type: Brownfield‒ Partner: AXA Private Equity‒ Project EV: ~ €770MM‒ Sixth largest gas distributor with 4.5%market share, in terms of gasdistributed‒ More that 990,000 clients served‒ Over 470 municipalities covered‒ With this add on acquisition, F2ireached over 17% of the market sharein the gas distribution sector‒ Strong cash generationConsolidated Revenues: € 609 mlnConsolidated EBITDA: € 331 mlnEBITDA Margin: 54%
  29. 29. F2i presentation March 2013 29Ranking European LBOs in 2009ENEL Rete Gas has been the biggest LBO finalised in Continental Europeduring the 2009 and deal of the year for the Project Finance Magazine (seeBloomberg table below):10 Largest LBO in Europe YTD
  30. 30. F2i presentation March 2013 30ENEL RETE GAS – Summary Data‒ 2.256.000 Clients‒ 3.800 Mln mc of gas distributed (+17% since 2009 - 3.233 Mln mc gas)‒ 33.090 Km of pipeline‒ RAB €1.645 MM‒Revenues 2010: €359MM‒ EBITDA 2010: €192MMPresence Previsional data for 2011
  31. 31. F2i presentation March 2013 312i GAS (EX EON RETE) – Summary Data2i Gas Enel Rete Gas + 2i Gas‒ 698.000 Clients‒ 1.200 Mln mc of gas distributed‒ 9.102 Km of pipeline‒ RAB €320MM‒ Revenues 2010: €99MM‒ EBITDA 2010: €49MM‒ 2.864.000 Clients‒ 5.000 Mln mc of gasdistributed‒ 42.102 Km of pipeline‒ RAB €1.965MM‒ Revenues 2010: €458MM‒ EBITDA 2010: €241MM+27% clients+32% volumes+27% pipeline+20% RAB+27% Revenues+26% EBITDAConsolidation as second national operator
  32. 32. F2i presentation March 2013 32G6 RETE GAS – Summary DataG6 Rete Gas Enel Rete Gas + 2i Gas + G6 Rete Gas‒ 1.008.000 Clients‒ 1.500 Mln mc of gas distributed‒ 15.309 Km of pipeline‒ RAB €771MM‒ Revenues 2010: €164MM‒ EBITDA 2010: €89MM‒ 3.872.000 Clients‒ 6.500 Mln mc of gasdistributed‒ 57.411 Km of pipeline‒ RAB €2.736 MM‒ Revenues2010: €622MM‒ EBITDA 2010: 330MM+72% clients+71%% volumes+74% pipeline+66% RAB+73% Revenues+72% EBITDAThe consequence of the acquisitions of 2i Gas (ex E.On Rete) and G6 isan important dimensional upgrade:Doble Volumes compared to those of Enel Rete Gas stand alone in 2009
  33. 33. F2i presentation March 2013 3360 701301654222441108182009 2010 2011GrowthTransparencySafety and QualityImprovementTotal investments of the Group F2i Rete ItaliaInvestments € mln Benchmark €/clientTot. 243Tot. 93Tot. 108+ + +Other operators ~47GroupF2i Rete Italia~63
  34. 34. F2i presentation March 2013 34Pipeline Inspection and Rapid Troubleshooting TimePipeline inspected (%) Average troubleshooting time (minutes)Fonte: AEEGAnno 2010AEEG targetrequirement~30’GroupF2i Rete Italia60’78%77%63%57%54%41%36%29%Enel Rete GasHeraA2AIrenG6 Rete GasEni (Italgas)E.On ReteToscana EnergiaMediaItalia: 55%
  35. 35. F2i presentation March 2013 35Technical QualityAEEG safety incentives(1) (€’000)(1) Refers to incentives distributed in 201050%22%12%2%14%% incentiveson totaldistributed% marketshare8441146961.314273Altri2.9632.311 379 17%29%2%5%47%
  36. 36. F2i presentation March 2013 36Investments – Selected Case StudiesAirport sector investmentsGesac (Naples)Sea (Malpensa / Linate / Bergamo)Sagat (Turin / Florence / Bologna)NAPTORMXPLINBERFIRControlling interest (>50%)Controlling interest (33.4%<>50%)BOLNoncontrolling interest
  37. 37. F2i presentation March 2013 37GESAC SEA‒ Acquisition of a 70% stake in Gesac‒ Transaction date: December 2010‒ Equity Stake: 70%‒ Project Type: Brownfield‒ Partner: None‒ Project EV: ~ €230MM‒ Gesac holds the concession to manage the business of theCapodichino Airport until the year 2043‒ With 5.5 mln passengers transported in 2010, Capodichino isthe third Italian airport for number of passengers transported(excluding Rome and Milan hubs)‒ In 2009 the company signed a new contract with ENAC thatstates an increase up to 25% of the tariffs‒ Gesac represents the entry point in the airport sector for F2i‒ The majority stake acquisition will grant different exitstrategies‒ Acquisition of a 44,3% stake in SEA‒ Transaction date: December 2011 and December 2012‒ Equity Stake: 44,3%‒ Project Type: Brownfield‒ Partner: None‒ Project EV: ~ €1,830MM‒ SEA holds the concession of Milan Linate and MalpensaAirports until 2041. SEA also holds a 30% stake in BergamoAirport.‒ With over 28 mln passengers in 2011, the Milan hub representsthe second “airport system” in Italy after the Rome hub‒ In April 2012, SEA has obtained by the Ministry of theInfrastructure, Transport and Economy the approval for the newContratto di Programma (signed by ENAC in Sept 2011 andbecome law in Sept 2012), that has granted significant tariffincreases (+25%)‒ SEA represents a relevant step in F2i’s investment strategy inairports, as well as an important partnership with the MilanMunicipality, which might represent a benchmark for otherprivatisations in ItalyRevenues 2011: € 67 mlnEBITDA 2011: € 22 mlnEBITDA Margin: 33%Revenues 2011: € 571 mlnEBITDA 2011: € 146 mlnEBITDA Margin: 26%Investments – Selected Case Studies
  38. 38. F2i presentation March 2013 38Investments – Selected Case StudiesSAGAT‒ Acquisition of 50,8% stake in Sagat (with the possibility to increase until 69,3%)‒ Transaction date: December 2012‒ Equity Stake: 50,8%‒ Project Type: Brownfield‒ Partner: None (corporate agreements with Equiter, Finpiemonte, SAB andTecnoinvestimenti)‒ Project EV: ~ €118MM‒ Sagat has the concession to manage the Turin Airport until 2035. Furthermore,through Aeroporti Holding S.r.l. (of which it owns 55,45% stake), it controls33,4% in Aeroporto di Firenze S.p.A. and 7,21% in SAB S.p.A. – Aeroporto diBologna‒ The services offered by Sagat are mainly in the domestic sector (61,8%), whilethose in the international and charter flights sectors are respectively equal to33,6% and 4,6%. The busiest route is Turin-Rome, with almost 900k paxregistered in 2011, and the most requested airline is Alitalia, with 1mln pax.‒ The main flight reasons are: work (65%), tourism (29%) and other (6%)Revenues 2011: € 64,0 mlnEBITDA 2011: € 15,5 mlnEBITDA Margin: 24,2%
  39. 39. F2i presentation March 2013 39Investments – Selected Case StudiesMETROWEB‒ Transaction date: 30 June 2011 (signing on 31 May 2011)‒ Equity Stake: 46,9%‒ Project Type: Brownfield‒ Partner: IMI Investimenti‒ Project EV: ~ €436MM‒ The company manages a fiber optic network in the Milanmetropolitan area‒ 3,272 km of infrastructures‒ 7,254 km of cables‒ approximately 311,000 km of fiber optics‒ In addition, the company controls approximately another 13,000km of long distance cables.‒ Strong cash generation‒ Acquisition of a 87% stake in Metroweb. Subsequent co-investment by Fondo Strategico ItalianoMEDITERRANEA DELLE ACQUE‒ Transaction date: May 2010‒ Equity Stake: 40%‒ Project Type: Brownfield‒ Partner: None‒ Project EV: ~ €480MM‒ The company operates water services in Genova and in 39municipalities nearby.‒ As at December 2009, it provided water to approximately700,000 citizens‒ 1,700 Km water pipes‒ 1,200 Km sewage system‒ 72 mc of drinking water in 2009‒ Predictable revenue streams from regulated activities‒ Strong cash generation‒ Acquisition of a 40% stake in Mediterranea delle AcqueRevenues 2011: € 56 mlnEBITDA 2011: € 45 mlnEBITDA Margin: 80%Revenues 2011: € 157 mlnEBITDA 2011: € 47 mlnEBITDA Margin: 30%
  40. 40. F2i presentation March 2013 40F2i II Investments – Current Portfolio
  41. 41. F2i presentation March 2013 41F2i II Investment Portfolio44,3% (35,7% Fund I; 8,6% Fund II)60,0%100%49,0%345 87 25%* The commitment amount only represents the investment of the Fund II** Projects already approved by F2is Board of Directors, now ongoingImpegnato(€M)Erogato(€M)%SEA (M alpensa / Linate/ B ergamo ) *87 87 100%T R M 122 0 0%Iren A mbiente ** 136 0 0%F 2iA mbienteAIRPORTSWASTETOENERGY
  42. 42. F2i presentation March 2013 42SEA S.p.A. – Milan Malpensa and Linate Airports4242Company Profile SEA holds the concessions of Milan Linate and MilanMalpensa airports until 2041. SEA also owns a 30,98% stakein SACBO, company which manages the Bergamo airport (50km far from Milan center). In 2012, Linate and Malpensa airports have registered apassenger traffic over 28 mln, whereas Bergamo airport hashad around 9 mln passengers (total for «Milan Area» is about37 mln passengers). Lombardy is one of the region with the highest GDP per-capitain Europe, with a strong potential growth. Malpensa airport isapproximately 48 km far from Milan center, whereas Linateairport is only 8 km far (it is the closest European airport to thecity center, focused on a frequent flyer customer on domesticand intra-EU routes). As shown in the graph on the right, SEA has been able torespond to two significant shocks in 2008 and 2009 (Alitalia de-hubbing and the introduction of the high-speed rail on RM-MI),attracting new carriers and opening up new destinations(despite the negative situation of these last years). In 2012, SEA has had a turnover of € 600 mln and an EBITDAof € 145 mln. The new rates have become active on 24September 2012, allowing a substantial increase in profitability.Traffic DataKey Financials SEA Group7,8 8,8 8,9 9,1 9,7 9,9 9,3 8,3 8,3 9,1 9,217,317,5 18,4 19,521,623,819,017,4 18,7 19,1 18,32002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012PLinate Malpensa25,1 26,3 27,328,631,333,728,325,7 27,028,1 27,5Alitalia de-hubbing fromMalpensaHigh speed railintroduction on theMI-RM routeCAGR 2002-076,1% In 2013-2016, it is expected a significant increase of the Groupprofitability due both to the full implementation of the newcharges, stipulated in the “Contratto di Programma”, and to theexpected development plan (also with a view to the Expo 2015),with several investments in infrastructure, attraction of newinternational carriers and an efficiency increase.CAGR 2009-122,3%SEA€/mln 2010 2011 2012PCRevenues 550,2 579,3 601,7EBITDA 132,8 151,5 144,4EBITDA margin 24,1% 26,2% 24,0%Net Income 63,1 53,9 53,1Equity 393,8 242,8 283,5NFP 344,7 467,7 490,9
  43. 43. F2i presentation March 2013 43F2i’s investment in SEA4343 The disposal of 14,56% share in SEA has been started by ASAM following the failure of the SEAs IPO. The purchaseprice of this 14,56% has considered the fair value identified in the IPO process and it amounted to € 147 mln,corresponding to approximately € 1,010 mln for 100% (vs. fair value range of € 970-1070 million) and representing anEV/EBITDA 2012 multiple of 8.3x (considering the EBITDA 2012 pro-forma to include the new rates for the entireyear). Then, the Second Fund’s commitment was around € 87 mln. SEA’s implicit value, recognised in this operation, is less then about 22% of that (€ 1.294 mln) recognised for the29,75% share, as the 14,56% share does not bear the governance rights. Recently, F2i has been in contact with the Milan’s Municipality in order to revise and extend the governance rightsrecognised on the 29,75% share and/or on the entire 44,3%. This should be also done in the context of newdevelopment and appreciation strategies of SEA, after the IPO failure. In the medium term, it cannot be excluded thatMunicipality decides to sell the SEAs majority: this investment opportunity should be valued by the Second Fund. In any case, this investment presents a possible high return, even only at a stand alone level, so without assumingthe joint exit with the First Fund F2i. In addition, for the Second Fund, it represents the launch of the investmentstrategy in the airport sector, where new exciting opportunities are growing up, as indicated in the slide below. Currently F2i SGR owns a 44,31% stake in SEA, partly by the First FundF2i (35,69%) and partly by the Second Fund F2i (8,62%). In particular: A first tranche (equal to 29,75%) has been bought at the end of 2011by the First Fund F2i from the Municipality of Milan (which still owns a54,81% stake in SEA). Referring to this share, the shareholdersagreement (F2i-Municipality) considers the right for F2i to nominatetwo directors (out of 7), included the vice-President, and the right ofco-sale (tag alone) in case of disposal of the majority by theMunicipality. A second tranche (equal to 14,56%) has been purchased at the end of2012 from ASAM S.p.A. (Province of Milan) partly by the First FundF2i (5,94%) and partly by the Second Fund F2i (8,62%).
  44. 44. F2i presentation March 2013 44F2i’s investment strategy in the airport sector4444TORMXPLINBERBRE VERTREVENCAGNAPGENFCOCIA SEA is the first investment of the Second Fund F2i in the airportsector, with the aim to pursue the strategy begun by F2i withthe First Fund and to take advantage of the new opportunitiesthat may arise, in order to develop this sector evenindependently from the First Fund. Currently, in addition to a 35,69% stake in SEA , the First FundF2i also owns a 70% stake in Gesac (Naples airport) and a50,8% stake in Sagat (Turin airport). SEA and SAGAT,respectively, hold a 30,98% stake in Bergamo airport and a33,4% stake in Florence one (as well as a noncontrollinginterest in Bologna airport equal to 7,21%). Overall, the marketshare of these six airports is equal to the 36,4% of the domestictraffic. After the takeover of a 8,62% stake in SEA (it has been a co-investment with the First Fund), further investment opportunitiesin the airport sector may include: (i) additional shares of SEA (ifthe Municipality of Milan decided to sell), Bologna, Catania,Palermo or Apulia airports, and also potentially the Veniceone. These airports have a market share equal to the 54,7% ofthe domestic traffic. The F2i strategy is supported, on the one hand, by the need torationalize the sector, in order to ensure a long-termcoordinated strategy to the entire system and, on the otherhand, by the expected privatizations of several airportcompanies, so as to allow their public shareholders to raisefunds for their needs.Airports directly holded by F2iAirports indirectly holded by F2iPossible target for F2i in the medium termTORMXPLINBERBRE VERTREVENCAGNAPGENFCOCIAFIRBOLCTPAADP
  45. 45. F2i presentation March 2013 45TRM S.p.A. – Waste to energy plantPlant description Final rendering– The waste to energy plant TRM is the fourth in Italy and oneof the most important on European level for dimension anddisposal capacity.– TRM has been realized in the south area of Turin, and it hasan authorized annual disposal capacity of 421.000tons/year– User base of more than 1,7 mln people– Authorized to treatment of RSU and RS notdangerous, produced in the Province of Turin– Currently the plant is in the final construction phases and itwill probably be operative in the first half of 2013– It will go full speed in 2014– The total investment for the plant realization will be overthan € 400 mln– The project has been supported by a pool of banks**via a project finance realized to cover up to the 80%of the total construction costs– TRM will generate revenues around € 100 mln with anEbitda margin of 60% ca.* It shows the plant’s electrical capacity in cogeneration mode (heat + power sale). In electric mode the maximum plant’s capacity would beof 65,5 Mwe** BNP Paribas SpA, UniCredit SpA, Banca Europea degli Investimenti, Banca Popolare di Vicenza SpA e Cariprato SpATechnical characteristics– Disposal Capacity 421.000 Tons/Year (RSU)– Type of technology Air-cooled mobile grate– Number of combustion lines 3– Electrical Capacity* 41 Mwe– Thermal Capacity 106 MWt– Housing units to be heated 17.000 ca.
  46. 46. F2i presentation March 2013 46PCPR REISTOTRM S.p.A. – Acquisition processDescription of the acquisition process TRM SpA’s acquisition structure– In August 2012, the Municipality of Turin has launched apublic tender procedure for the selection of an industrialprivate partner, at which sell the 80% stake in TRM SpA– The tender also provided the acquisition of 49%stake in AMIAT, a company operating in thecollection of municipal solid waste– F2i has partecipated to the public tender in partnershipwith Iren Group, an Italian multi-utility company alreadyoperative in the waste treatment and disposal sector in theProvinces of Parma, Piacenza and Reggio Emilia throughIren Ambiente SpA– Under the agreements, F2i would only invest in TRMand Iren would acquire the entire stake in AMIAT– At the end of the process, F2i and Iren have been thesuccessful bidders and, on 21 December 2012, they haveacquired the 80% stake in TRM SpA– The price paid by F2i and Iren for the 80% stake in TRMhas been equal to € 126 mln– The acquisition was completed by F2i and Irenthrough a corporate vehicle, participated by F2i for75% and by Iren for 25%– The F2i’s expense for the acquisition amounted toapprox. € 95 mlnCurrent presence of F2i – Iren joint ventureIren Group’s current presence inthe waste sector through IrenAmbiente SpAReference area of TRM SpATRM maintenancecontract assignedto Iren AmbienteIRENEmilia49%SPV1AMIAT100%IRENEnergiaDistrictheatingIRENAmbiente80%VehicleTRMTRM75%IRENEmiliaIRENEnergiaIRENSpAF2i25% 1 share 1 share 1 shareContractual carve-outfrom TRM to IREN
  47. 47. F2i presentation March 2013 47TRM S.p.A. – F2i’s investmentF2i’s expense– The F2i’s investment for the acquisition of 60% stake inTRM SpA has been of € 95 mln ca. (excluded transactioncosts)– F2i has totally funded this amount through a Bridge-to-Equity loan granted by Banca IMI and Unicredito Bullet repayment after 24 monthso Interest rate (average all-in): 4,7%– The actual draw-down of the F2i’s investors will coincidewith the start of the TRM’s dividend distribution allowedunder the project finance contractBoard of directors TRM Vehicle - 5 members- 3 members appointed by F2i, including the President- 2 members appointed by IrenBoard of directors TRM S.p.A. - 5 members- 2 members appointed by the Municipality of Turin, including thePresident- 2 members appointed by F2i- 1 member appointed by Iren (Managing Director)Key Managers TRM S.p.A.- CEO appointed by Iren- CFO appointed by F2i- Head of management audit appointed by F2iAgreement with IrenAcquisition structure– The F2i – Iren partnership in TRM is only a part of a widerco-operation project in the waste sector– In this context, F2i and Iren are negotiating the possibleentry of F2i (49%) in Iren Ambiente S.p.A. (“IAM”), theenvironmental division of Iren Group– In case of successful negotiation, TRM would be integratedin IAM– On the other hand, if the investment in IAM was not realized,F2i would have the right to transfer to Iren its TRM stake, ina predetermined date, at a specific price, consistent with theperformance goals of the FundTRMComune diTorino75%€ 95 mln25%€ 31 mln20%VeicoloTRM80%€ 126 mlnGruppo IrenF2i Ambiente SpABanca IMI -UnicreditFinanziamento BtE aF2i Ambiente SpAIren GroupF2i AmbienteSpAMunicipalityof TurinVehicleTRMBtE loan to F2iAmbiente SpA
  48. 48. F2i presentation March 2013 48TRM S.p.A. – Strategic considerations for F2iItalian market and F2i position Leading Italian operators– The national waste sector presents a high level offragmentation: in 2011, the first nine operators have onlymanaged the 7% of the total volumes– On the other hand, in the European waste managementsector, particularly in France, Germany and UK, there areseveral considerable operatorso France: extremely consolidated market where the first twooperators (Veolia and Sita Suez) control over than 60% of themarketo UK: the first five operators manage more than 60% of themarketo Germany: several large operators, as Remondis and Biffa,have started strategies for an international growth– The Italian market is in a transitional phase. Currently theleading operators are mainly operating on a regional and/orlocal level. Following the exemple of what happened in otherEuropean countries, they should expand their activities on anational and international level– TRM’s acquisition is only a first step for F2i. It will befollowed by further add-on acquisitions finalized to thecreation of a national operator, leader in the waste sector– In this context, the possible entry of F2i in the IrenAmbiente SpA’s capital, already F2i’s partner in TRM,could be the «platform» on which to consolidate thesector on a national basisLeading European operatorsSource: Annual Reports. Boston Consulting Group’s analysis3,42,81,81,51,10,60,3 0,2 0,1Hera A2A AMARomeIren Veolia Acea APSAcegasWasteItaliaACSMMln of tons processedMedia esclusoperimetroF2i: € 113 ton98115126103125ReaDalmineAcegasTriesteAcegasPadovaHeraFerraraTecnoborgoPiacenzaPIAM (49% F2i) TRM (60% F2i in trasparenza)Included TRM SpA, acquired in December 201260271813Veolia Remondis Sita Suez BiffaMln of tons processedSource: The Boston Consulting Group

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