Atlantia’s sustainability and innovation push broadens the capital base
2020 will be remembered as the year of an awful human tragedy with dramatic economic consequences. That said, there is a silver lining: Major actors are doubling down on sustainability and innovation as urgent pathways going forward.
Atlantia is helping lead that important trend. We are intensifying our plan to achieve carbon neutrality, gear our increasing infrastructure maintenance efforts towards improvement, tapping digital technology to offer integrated services to our end users and partners, and sharpening our toolkit to promote and harness emerging synergies.
Large institutional investors know that our world is undergoing a tectonic reorganization, with sustainability the new watchword. This requires ever-smarter allocation of capital and resources, which is our strong suit in the world of rapidly-changing mobility.
The COVID-19 pandemic has had an extraordinary and unwelcome impact on global economies, societies and people’s everyday lives, and will cast a long shadow.
The impact was particularly deep in the transportation sector, and Atlantia’s 2020 financial results show the scar. Traffic fell by as much as 80 percent on some of our core motorway networks during the peak lockdown phase, while air travel collapsed in most of the world.
Atlantia has stepped up on all fronts to mitigate the havoc and assure efficient mobility services are available and that our employees are safe. Working with public authorities we have made a tangible contribution to emergency logistics operations, making sure our airports can assure the movement of goods and people amid the health emergency, rolling out extensive testing protocols for travelers, offering our facilities for community testing and vaccination services, and doing whatever it takes to backstop front-line healthcare efforts in the many countries where we operate as well as supporting communities with cash and food relief as well as assistance in keeping education systems active where schools were closed. We avoided layoffs, kept with our plan of promoting women and young adults, and extended new welfare initiatives to our staff.
All of these efforts are part of Atlantia’s equity story, which hinges on our focus on macro megatrends – notably globalization and digitalization but also emerging human and physical needs - that are reshaping the world of mobility.
Amid the pain, we also see a silver lining: the global pandemic underscored the importance of transport infrastructure, and boosted awareness of the need for agile, multi-stakeholder approaches to achieving goals and priorities. Atlantia’s Board of Directors has engaged in intense scrutiny – a veritable “re-reading” – of the strategic frameworks through which we can act as a multiplier of shared values and the sustainable success of all our stakeholders.
The Group is well placed to rise to the occasion of increasing technological impacts covering all aspects of how infrastructure is used and paid for. The demand for integrated solutions is proliferating as users seek simplified means to cover their gamut of needs, stretching from paying for car washes to sharing services destined to replace ownership models. Synergies are bound to rise, which is a reason we took a stake in Volocopter, a startup that will offer short-haul vertical transport for priority movements of people and goods.
Our principal objective today is to foster an increasingly sustainable, integrated, safe, innovative and efficient mobility to the greatest number of people. Future value-creation will be guided by the overarching agendas of innovation, sustainability and the simplification of everyday activities.
Environmental, social and governance factors – ESG – have thus become even more central and functional to our Company’s mission. We have identified specific ESG priority themes, all linked to the United Nations 2030 Sustainable Development Agenda, and are integrating them not only in our mobility systems but across all our areas of work, including our business model and infrastructure buildouts. We have concrete action plans to tackle climate change – including a commitment to achieve net carbon neutrality by 2040 – promote the circular economy, safeguard the natural environment, develop human capital in an inclusive and diversity-sensitive way, and bolster the trust undergirding our relationships with all partners.
In line with this new spirit, Atlantia is presenting for the first time an integrated Annual Report, a single document with financial and other results to tell the story of what we are doing, offering a better view of all the kinds of capital we allocate. By the way, management incentives are now fully bound to ESG metrics.
As noted, the financial results have a rough edge as a result of the temporary though sharp traffic falls. Our consolidated revenue fell by 3.3 billion euros or 29%, our EBITDA by 2.0 billion euros and we posted a significant net loss. Investors, aware of the prospect of a robust recovery when the pandemic is overcome, have not been fazed, and Group units have successfully placed more than 9 billion euros in new debt securities.
Let me emphasize that we are not engaging in austerity on our maintenance and safety outlays. Autostrade per l’Italia plans – this has yet to be approved by the Grantor - to invest 14.5 billion euros and spend 7 billion on maintenance through 2038, along with 3.4 billion in additional outlays in the wake of the 2018 tragedy of Genoa’s Morandi Bridge.
Nor have we lost sight of expansion opportunities. Abertis has made two recent acquisitions: Mexico’s Red de Carreteras de Occidente (RCO), which manages 876 kilometers of tollroads, and Elizabeth River Crossings (ERC), which operates a six-kilometer tunnel in Virginia. Atlantia has also deeply reorganized its management structure with an eye to allowing more autonomy to subsidiaries while simultaneously adding independent directors and bolstering governance of risk management, investments, remuneration and autonomous internal auditing.
We are certainly ready for the pandemic to end! We are also confident, given our solid fundamentals and new strategic priorities, that we have the vision and agility as well as the physical, human and financial assets to look into the future with optimism despite the instability and unpredictability marking the global outlook.