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ENAV's Board of Directors approves the Preliminary Results at December 31, 2017 and the 2018-2022 Business Plan

  • En-route and terminal traffic in terms of service units up 4% and 3% respectively YoY
  • Consolidated Net revenue at 881.8 million euro (+1.9% YoY)
  • Consolidated EBITDA at 283.6 million euro (+11.3% YoY)
  • Consolidated Net Income reaches 101.5 million euro (+32.9% YoY)
  • 6.5 million euro bonus recognised by the Regulator, for punctuality achieved in 2017
  • Proposal for dividend distribution of 0.1864 euro per share, +6% vs. previous year
  • 2018 – 2022 Business Plan: new operating model, 650 million euro of investments in technology and innovation (separate PR)
  • 2017 Consolidated Non-Financial Statements approved
Rome, 12 March 2018 – The Board of Directors of ENAV S.p.A., held today, under the chairmanship of Mr. Roberto Scaramella, approved the stand-alone Financial Statements of the Company and the Consolidated Financial Statements of the Group at December 31, 2017, the 2018 – 2022 Business Plan and the 2017 Consolidated Non-Financial Statement.
The CEO Roberta Neri declared: Our 2017 results went beyond expectations. ENAV’s new operating procedures, such as Free Route, combined with quality of service delivered, allowed us to capture a significant number of air routes and to increase our revenues. The focus on cost efficiency and an optimum use of our people contributed to further improve our overall financial performance. Looking ahead, we believe that the new organizational model outlined in our Business Plan will provide significant momentum to the Italian air transport system, with clear benefits in terms performance, productivity and competitiveness. The introduction of new technologies will also further increase the professional service of our operational staff and provide professional growth and new career opportunities.
ENAV’s performance in 2017 was strong, with a record net profit driven by a material traffic increase (in terms of service units, a conventional weighted measurement unit based on the aircraft weight at take-off and, in case of en-route traffic, the distance run by an aircraft), partly attributable to the implementation of innovative air traffic management procedures such as Free Route, and the ongoing cost-efficiency improvements achieved through the optimisation of internal processes between the Group companies.
The Free Route procedures, which enable airlines to plan shorter routes, coupled with the quality performance of ENAV, in terms of punctuality, allowed the Company to attract, in 2017, many routes which did not cross the Italian airspace in 2016.
En-route traffic, in terms of service units, grew 4% vs. 2016. This result was achieved despite the ongoing limitations of the Libyan airspace, and is mainly attributable to an increase in the overflight component (i.e. aircraft crossing the airspace without taking off or landing in Italy), which was up 5.9%, as a result of increased traffic and the increased average distance travelled. Domestic and international traffic also delivered a solid growth in terms of service units, up 2.8% and 2.9% respectively.
Terminal traffic (i.e. take-off, approach and landing activities within a radius of 20 km from runway), increased by 3% in terms of service units compared to 2016. The increase was largely attributable to the growth in the international traffic component, up 3.9%, and solid traffic performance in main domestic airports.
Total consolidated net revenues at December 31, 2017 reached 881.8 million euro, up 1.9% vs. 31 December 2016, driven by the strong growth in revenues from operations, partially offset by a negative effect of the balance (the mechanism that allows ENAV to recover from, or return to carriers, the amounts resulting from the difference between the planned air traffic and the actual traffic, as well as the recovery of costs and traffic for services provided to Terminal Zone 3 airports – those with less than 70,000 movements per year).
Revenues from operations amounted to 863.2 million euro, rising 7.0% compared to 2016, as a result of revenues from en-route and terminal services - respectively growing 5.5% to 615.3 million euro and 12.4% to 219.6 million euro. In particular, the growth of revenues from terminal services was mainly driven by the traffic increase in most domestic airports and to the higher Terminal Zone 3 tariff applied.
The balance was negative for 17.2 million euro, compared to a positive balance of 16.4 million in 2016.
It is worth noting that the item ‘Balance’ includes 6.5 million euro of bonus received for our 2017 punctuality performance, which confirmed ENAV as one of the best performing service providers in Europe, with an average delay per controlled flight close to zero.
Non-regulated revenue, at 14.3 million euro, was substantially in line with the 14.6 million euro of 2016 on a reported basis. On a comparable basis, excluding 2.7 million euro of control tower services provided at a few low-traffic airports in 2016, and included in the Contratto di Programma in 2017, and 1 million euro related to a settlement between Techno Sky and Leonardo S.p.A. in 2016, the growth in non-regulated business is 32%.
This growth was mainly driven by international projects and services, i.e. the redesign of the airspace in the UAE, the services performed at the Air Traffic Control Centre of Kuala Lumpur in Malaysia, the beginning of the construction of the control tower and technical block of the Mitiga airport in Libya, the flight-inspection services provided in Saudi Arabia, and a study of instrumental flight procedures and an airspace design project in Morocco.
In 2017 ENAV continued its cost-efficiency efforts leading to an increase in margins through target initiatives on specific cost items and through the optimisation of processes between the Group companies. Operating costs were reduced by 2% year on year to 598.2 million euro. In particular, external operating costs saw a 7.8% reduction attributable to the renegotiation of certain contracts and to the insourcing of activities. The comparison includes the effect of 7.5 million euro of costs related to the IPO process in 2016, net of which the external operating costs declined by a solid 3.3% in 2017.
Personnel costs remained stable vs. 2016 at 478.4 million euro, with a 6.5% increase of the fixed and variable wage components – mainly attributable to additional overtime associated with the training of air traffic controllers for the implementation of the Free Route platform - offset by a headcount reduction of 46 average units.
In 2017, consolidated EBITDA grew 11.3% to 283.6 million euro, compared to 254.9 million euro in 2016, with an EBITDA margin increasing 2.7 percentage points to 32.2%.
Consolidated EBIT increased by 25.5% to 146.7 million euro vs. 116.9 million euro in 2016.
Consolidated net profit in 2017 grew 32.9% over the previous year, to 101.5 million euro, the strongest result in ENAV’s history.
As of December 31, 2017, net financial debt was equal to 117.5 million euro, 17.4 million euro above the level measured at 31 December 2016.
Dividend proposal
The Board of Directors of ENAV S.p.A resolved to propose to the AGM the distribution of a dividend of 0.1864 euro per share, amounting to 101 million euro, for the financial year 2017, which will be payable on May 23, 2018 (ex-dividend date on May 21, 2018 and record date on May 22, 2018).
Guidance for 2018
For 2018 the Company expects net revenue growth to be flat to ‘low-single digit’, as a result of the decrease in the performance plan regulated tariff of 2018 compensated by growth in traffic, and an EBITDA margin around 32%, in-line with 2017. In terms of Capex, the Company plans to invest approximately 125 million euro, higher than the 115 million euro recorded in 2017 mainly due to the start of certain infrastructure investments foreseen in our business plan. Thanks to the solidity of its balance sheet, ENAV expects to increase its dividend by 4% in 2019, in line with our dividend policy of paying out no less than 80% of equity free cash flow.
2017 Consolidated non-financial statement
Pursuant to Decree no. 254/2016, the Board of Directors also approved the 2017 consolidated non-financial statements, which include an overview of the Company’s model as well as the description of policies, performance levels and risks related to key environmental matters, social matters (the Group’s human resources), human rights, and the actions against active and passive corruption. The Free Route project is among the most significant projects developed by the Group in 2017 as it allowed airlines to annually save around 30 million kg of fuel, corresponding to a reduction of CO2 emissions of almost 95 million kg.
An ordinary Shareholders’ Meeting in single call will be held on April 27, 2018 to approve the yearly financial report at December 31, 2017.
Corporate Governance
In today’s meeting the Board of Directors approved a Corporate Governance and Ownership Structure Report, as prescribed by art. 123-bis of legislative decree no. 58 of 24 February 1998 ("Consolidated Act on Finance" or ‘TUF’). The Report was drafted as a separate document and will be disclosed on the dates and in the manner prescribed by the law. Its disclosure will also be made on the Company’s website www.enav.it, in the governance section.
The Board of Directors also approved a Remuneration Report, drafted in compliance with the requirements of art. 123-ter of TUF and art. 84-quater of the Regulations of the Italian Securities and Exchange Commission (Consob) approved by resolution no. 11971 of 14 May 1999 (the "Regulations for Issuers"). This report will be publicly disclosed on the dates and in the manner prescribed by the law, as well as on the Company’s website www.enav.it, in the
Share Buy-back
The Board of Directors of ENAV, having revoked the previous resolution to authorize a share buy-back taken by the Shareholders' Meeting of 28 April 2017, resolved today to submit a proposal to the Shareholders’ Meeting to authorize a buy-back of up to 1,200,000 own shares to be destined to the long term management incentive plan of the Company and/or its subsidiaries.
The request provides for an authorization to purchase, and also allows to operate on the stock market with a medium to long term investment view or, in any case, to capture the opportunities to maximize the value that can be derived from market outperformance.
The authorization for the purchase of own shares is requested for a maximum period of 18 months.