Green Network doubles its profit margin and looks forward to an IPO

Green Network “must reach an EBITDA of at least €100 million” before it is listed on the Milan stock exchange.

This is one of the essential requirements General Manager and CEO Giovanni Barberis specified to MF-Milano Finanza.

Green Network closed 2016 with €692.8m in sales, less than the figure of 1 billion registered at the end of 2015. However, this was more than double the EBITDA and EBIT figures, €32.3 and €23 million respectively (compared to €14.3 and €10 million in 2015), with a net profit of €6.8 million.

The drop-in revenues were caused “by getting rid of 80% of our B2C sales agencies”, and replacing them with more controlled agencies, “and giving up big but unprofitable customers” in B2B, explained the manager. The strategy marked a turning point, and so Green Network Energy decided to take a new path: cross-selling above all.

Green Network has signed a ten-year partnership agreement with Conad, which owners of the supermarket’s fidelity card will be able to activate commercial offers with the operator via web, and then receive coupons to spend in Conad supermarkets. More partnerships of this kind are due to be announced in the next few days with the involvement of banks and associations.

The results achieved so far is “just the starting point” in a process that will end with stock exchange listing in 2018-2019 (floating value of approximately 40%), EBITDA allowing. But growth also requires acquisitions (there are already a number of proposals on the table for assessment), fidelity programs and penetration of other markets.

In September, the Group became the first Italian energy company to go to the UK, in an anti-Brexit operation that “aims to obtain 100,000 customers by the end of the year [in a market] which there are 6 players offering reasonable rates.” So that companies offering highly competitive prices have a good chance of obtaining a good market share. Listing may also coincide with a renewed bonus distribution: so far, the company has not touched its gross profit of €13.2 million, because “along with a net financial position of close to 0, it allows us to obtain benefits by offering competitive rates”, explained Barberis.

Green Network has a clear goal for 2017: offering low rates with full transparency and to continue the process that should allow the Company to bring in a turnover of 1 billion by 2020.