AB "Ignitis grupÄ--" 2021--2024 Strategic Plan Has Been Approved

 
TIDMIGN 
 
 
   2021--2024 Strategic Plan of AB "Ignitis grup " group of companies has 
been approved 
 
   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=BsW0tQVsWuK1enVC3A051nFY1SB541cBb_u18fcX8TFuFAOCOIoJxcJKJKc2FbSnwVQNYTab5NtRR4JOVlNwUAUTXUV6ieV0Cfmp4myNxojhCCL9D1aaTuYeMb2SKQGSHLV6h41_G6NP5Gw04PpWv0Ofw4eN_29MVoWHHzWhq5Y= 
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=9VRov53SGa8OCcnHiVEP6JLaPYLCKl9ox_b2V-jLkTkcGJ2HY5aOIrVVwRZ0l9GeHXNiguK-lpkXButotmdYIajdPgkh6apRTtFaF7KlhlU= 
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 
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https://ignitisgrupe.lt/en/strategy 
 
   For additional information please contact: 
 
   Communication 
 
   Art ras Ketlerius 
 
   [phone] 
 
   [e-mail] 
 
   Investor relations 
 
   Ain Riffel-Grinkevičien 
 
   [phone] 
 
   [e-mail] 
 
 
 
 
 
 

(END) Dow Jones Newswires

February 26, 2021 09:45 ET (14:45 GMT)

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