AB "Ignitis grupÄ--" 2021--2024 Strategic Plan Of Ab "Ignitis Grup " Group Of Companies Has Been Approved
February 26 2021 - 9:45AM
UK Regulatory
TIDMIGN
On 25 February 2021 the Supervisory Board of AB "Ignitis grup "
(hereinafter -- the Company) approved the Strategic Plan for 2021--2024
(hereinafter -- Strategic plan) of the Company's group of companies
(hereinafter -- the Group), which establishes the Group's ambition to
focus mainly on the Green Generation investments and Network
modernisation and digitisation in the following years. The Strategic
Plan describes the implementation of priorities and directions of the
updated long-term strategy of the Group, which was announced in June
2020, for the period of 2021--2024.
-- It is estimated that the Group's adjusted EBITDA in 2024 will reach EUR
350--390m. Average annual EBITDA growth during 2020--2024 is estimated to
be 4.7--7.5% -- it will be mostly affected by growth in Green Generation
segment
-- The Group over the period of 2021--2024 is planning to invest EUR
1.7--2.0bn
-- EUR 0.8--1.0bn of investments will be directed towards Green Generation
segment, in order to increase the installed green generation capacity to
1.8--2.0 GW by 2024
-- Investments into network digitisation and service quality and increasing
network efficiency and resilience over 2021--2024 will reach EUR
0.8--0.9bn
-- The Company is committed to its shareholders to ensure at least 3% annual
increase in dividends
-- Over the period of 2021--2024 net debt and adjusted EBITDA ratio is
expected to be less than four times, the investment-grade BBB+ rating
will also be maintained
-- The Group has integrated the environmental, social, and corporate
governance (ESG) principles in its objectives
Objectives promoting sustainable growth
The Group is planning to invest EUR 1.7--2.0 billion over the period of
2021--2024 in green generation development projects, new customer
connections, modernisation and upgrades in the electricity distribution
network and smart metering programme. 85--95% of the investments are
directed towards the implementation of projects which are directly or
indirectly related to the United Nations Sustainable Development Goals
(SDGs).
45--50% or EUR 0.8--1.0 billion of investments will be directed towards
the Green generation segment -- this will allow to increase the
installed green generation capacity to 1.8--2.0 GW by 2024. The current
Group's total installed capacity reaches 1.1 GW.
The Strategic Plan also established an aim to ensure the digitisation of
networks as well as to increase the service quality, network efficiency
and resilience, which will condition the energy transition. The
investments into the Network segment will reach EUR 0.8--0.9 billion or
45--50% of total planned investments by the Group in 2021--2024.
By the end of 2023, we aim to install smart meters for all business
customers and households consuming more than 1,000 kWh of electricity
per year. It is estimated that by 2024 there will be 1.2--1.3 million
smart meters deployed. Investments in Network segment will be directed
towards replacing overhead electricity distribution lines with
underground cables, facilitating grid connections and empowering
prosumers. Investments in service quality and network efficiency will
boost the network resilience, resulting in an expected decline of the
SAIFI indicator in 2024 by 3--13%, compared to 2020.
The remaining up to 5% share of investments will be directed towards the
segments of Flexible generation and Customers & solutions. Flexible
generation segment will aim to maintain the current installed capacity
of 1,1 GW by 2024 and remain the leader in the ancillary services market
in Lithuania as well as contribute towards the synchronisation with the
electricity network system of Continental Europe.
Customers & solutions segment aims to develop energy supply services in
Polish and Finnish markets, increase innovative energy product sales,
increase annual retail sales volumes of electricity as well as utilise
synergies with the Green generation segment. The compound annual growth
rate (CAGR) of electricity and gas retail sales volumes is estimated to
reach 2.6% by 2024.
Commitment to sustainability
Ignitis Group also includes the aspects of environmental, social
responsibility and corporate governance principles in the business goals
provided in the Strategic Plan. Set goals and target indicators include
a broad spectrum of topics and actions -- from one's with which the
Group aims to contribute to reducing the climate change to one's
increasing the sustainability of supply chain, ensuring employee health
and safety, increasing engagement and diversity.
By working towards these objectives the Group aims to get closer to the
companies leading in sustainability globally, therefore, it will compare
itself according to the assessment results measured by the leading
international rating agencies Sustainalytics and MSCI, which evaluate
ESG-related risks and their management. At the same time, Ignitis Group
is working to remain the leading example in the region and a leader in
Good Corporate Governance Index compiled by the Governance Coordination
Centre.
Financial discipline and shareholder return
Updated Strategic plan establishes aim to maintain strong financials. We
estimate that the adjusted EBITDA in 2024 will reach EUR 350--390
million. Average annual EBITDA growth during 2020--2024 is estimated to
be 4.7--7.5%, which will be mostly affected by growth in Green
generation segment. Return on capital employed (ROCE) over the period of
2021--2024 will reach 5.5--6.5%.
Ignitis Group also plans to maintain solid investment-grade BBB+ rating
over the period of 2021--2024. The net debt and adjusted EBITDA ratio
will not exceed four times.
The Company is committed to its shareholders to ensure at least 3%
annual increase in dividends starting with the proposed dividends of EUR
85 million for the financial year 2020. The minimum dividend per share
(DPS) in 2024 should be equal to or greater than 1.29.
It must be noted that the strategic objectives of the Group are aligned
with the United Nations Sustainable Development Goals, the Group is
committed to become net CO2 neutral by 2050. Activities provided in the
Strategic plan also contribute to the targets of National Energy
Independence Strategy.
Objectives of executive long-term incentive programme
The executive long-term incentive programme was
https://www.globenewswire.com/Tracker?data=dsk6KIBheDXo7uBfVDp3TRkRLydnRifytJA6AA3bgw-la_YNtjqwxA2pIeJ1T-Y3DvuJHN0rcu18fmvmjgrZaTaJ-GjGh8gY6Uj0JKGvc5MhjKZ-KwNAs_pTGVsRBpUMaiavQUZcufaYJQKB3ayK9QMIRJi9S2ZkOrgXt9S1i1g=
approved in accordance with good practices of linking long-term goals of
listed companies with executive incentives in order to increase loyalty,
pursuit of long-term sustainable results, motivation to increase the
share value growth. It must be noted that the long-term goals set in the
incentive programme for the executives who are eligible for the
incentive programme are linked to the objectives set out in the
Strategic plan of the Group.
Currently the Supervisory Board has already approved the long-term goals
of the incentive programme for 2023. The approval of goals for 2024 is
in the agenda of the next meeting of the Supervisory Board. The Company
will inform about it in a separate notice. All relevant information
about the Group Remuneration Policy and the annual and simultaneously
set long-term goals is available on the website of the Company (
https://www.globenewswire.com/Tracker?data=atnXkDAgRmzMX_Z-ycmgIJMXv9dDewBwWOEQ4GTTqaCvWuqxNDPNfcySOPEhKjVvIZOdcwEfR3a0-nhW4p5EQ3eTGUOc4VEYIWaUoFyRIXQ=
link).
Note: The provided activity projections of the Company and the Group
(including future projects, development opportunities, alternatives)
cannot be considered as final decisions or commitments to invest,
conclude contracts or perform other actions. Information about specific
decisions, if they must be disclosed publicly, will be disclosed in
accordance with the requirements of legal acts regulating the disclosure
of such information as well as will be provided by ensuring provision of
required, sufficient and detailed information and implementation of
principles of transparency.
---
Group's 4-year Strategic plan is published every year.
The Company has published the Strategic Plan 2021--2024 and previous
strategic plans on its website
https://www.globenewswire.com/Tracker?data=KvnaFJBwfzTmT1eBMC6yTx-ghumnY_gQj3xQtfW1wkOkGr8bIVSD1GoUqIEWrkKoRVJl_uhVaHYoj0Dp746Vbrz2Fa_ctaGXPLFO1BKzjYE1dwDqnIVAvy2W9QivhgYnrtqQA4Ewnri0jMmEv1p0GQ==
https://ignitisgrupe.lt/en/strategy
For additional information please contact:
Communication
Art ras Ketlerius
+370 620 76076
arturas.ketlerius@ignitis.lt
Investor relations
Ain Riffel-Grinkevičien
+370 643 14925
aine.riffel@ignitis.lt
(END) Dow Jones Newswires
February 26, 2021 09:45 ET (14:45 GMT)
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