The power of numbers to show strength
Interview with Massimo Sonego, Atlantia Head of Corporate Finance and Investor Relations
Atlantia is the listed holding company that controls Autostrade per l’Italia and Aeroporti di Roma. The Company boasts it very own team of Investor Relations experts whose job is to ensure that the Group’s results and strategies are fully appreciated by financial analysts and the market.
In Greek mythology, Atlas was a Titan who had to bear all the weight of the sky on his shoulders. No small burden and, naturally, a great responsibility. The Atlas is also the first vertebra that supports and balances the weight of the skull, having been named after the above figure and the punishment inflicted by Zeus. These are just two of the many possible examples that help to give a precise meaning to the name of Atlantia, the listed holding company with a stock market capitalisation of €18.4 billion at the end of 2016.
“You need broad shoulders to support a sector, such as transport infrastructure, that is key to an entire country’s economy and its development,” says Massimo Sonego, Head of Corporate Finance and Investor Relations at Atlantia. “Modern, efficient airports and motorways require continuous upgrades in order to keep pace with the changing needs of the people who use them. This involves large-scale investment. You also have to have cutting-edge engineering expertise and an extremely solid financial structure. The ability to deliver complex projects, such as the new terminal wing for Fiumicino airport or the Variante di Valico, one of the largest infrastructure works ever built in Europe at a cost of over €4 billion, requires not only a reputation for reliability, but also financial strength.” In order to convince the markets to invest in projects offering returns over the longer term, it is necessary to provide them with up-to-date, transparent and convincing information, with “personalised” initiatives for each type of investor, from the small saver to the sovereign wealth fund. This is the role played day after day by our Investor Relations experts, who act as the “drive belt”, ensuring that the Group’s results and strategies are presented in such a way as to be fully appreciated by financial analysts and the market. “Financing projects such as motorways, airports, mountain crossings and tunnels requires deep pockets. The Atlantia Group has issued over 30 billion securities listed on regulated markets in the form of both shares and bonds. This means it is vital for us to maintain good relations with our investors: we need to reassure them of our ability to provide economic returns and a return on invested capital, and this is done by sharing our objectives, strategies and investment plans with the utmost transparency, as well as through regular reporting of our performance.” Atlantia is today one of Italy’s leading companies, a Group that is known for its strength, with annual turnover in excess of €5 billion in 2016 and plans to invest more than €25 billion in the coming years. Despite this, Atlantia’s communication is a subtle balancing act, with complex financial models on the one hand and the need to explain the Company’s vision on the other, in order to convince investors to bet on medium/long-term projects providing economic returns over an extended time horizon.
“Transparency is the key, but it isn’t enough on its own. Our first task is to ensure that we meet our reporting obligations to the financial community on the occasion of pre-planned events, such as the annual general meeting, the annual results announcement and the publication of quarterly reports on our performance in terms of traffic, passengers, operations and financial results. But we also need to enter into direct relationships with our investors and the rating agencies, via email, in conference calls or on the occasion of one-to-one meetings and roadshows. Whether a major investor or a small shareholder, we seek to provide everyone with the information they need. This is not only in terms of substance but also as regards form – something that is close to our hearts in Italy, and not always mistakenly so –, at the expense of sometimes appearing to take things to the extreme. The overall idea is to construct a forward-looking narrative: our vision of how we see the sector evolving, and of how transport, the economy and indeed the country as a whole will change in the next twenty to thirty years.” In the future, Atlantia plans to invest up to €15 billion in Italy’s motorways in order to clear the worst bottlenecks. This is in addition to the €12 billion already invested and another €10 billion that we intend to spend on expanding Fiumicino airport which, together with Ciampino (the two airports handled 41.7 and 5.4 million passengers in 2016), is managed by the Group’s other major subsidiary, Aeroporti di Roma.
“On the one hand, we want to improve traffic flow on the most congested sections of motorway or on those that we expect to become so, such as the Genoa Bypass. On the other, we need to respond to passenger growth, ensuring that Rome and the country as a whole are better connected to the rest of the world, with the expansion of Fiumicino playing a key role in achieving this aim.” To decide which projects to finance, it is essential to have a strategic vision. This is reflected in the fact that, having started out with the foundation of Autostrade Concessioni e Costruzioni SpA in 1950 (Atlantia didn’t yet exist), and having expanded our Italian operations to achieve our current size, the holding company has begun to export its know-how. Today, we operate more than 2,000 km of motorway in Brazil, India, Chile and Poland. At the same time, we are working on major investment projects in Santiago in Chile and in the area around Sao Paulo in Brazil.
“Our growth and diversification strategy is led by a number of readily apparent, global mega-trends, such as demographic growth, increasing per-capita wealth, the rate of motorisation and the presence of natural resources. This indicates that the fastest growing countries are beyond Europe, in Latin America or in Asia. To be able to explain to an investor what these countries have to offer, and to convince them to invest their capital outside Europe requires effective communication. We have to show that, having operated for many years in Italy, Atlantia is now capable of exporting its expertise to high-potential countries, where there is growing demand for mobility, significant demographic change and the kind of economic growth that developed nations can no longer hope to see.”
To channel economic resources towards developing countries, to assume responsibility for building up their transport networks and to thus support their economic growth: Atlantia the Titan has found its ... way ahead.