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Letter to the Shareholders

Dear Shareholders,
We hereby submit the final financial statements of the company for its fourth year of operations
since its foundation.
Before illustrating the results achieved and the Group's development, I consider it my duty to
remind you that, unfortunately, the year was marked by a tragedy, caused by an explosion in the
gas network in the province of Bologna. To the families of the victims, we once again express our
sincere condolences from the entire company.
In 2006, the company is continuing in its commitment to realising the objectives of the Industrial
Plan, with the primary goal of further developing its services provided in the areas in which it
This translated into positive results as well as commercial growth, an intense search for
organisational efficiencies and the further expansion of the scope of operations, which resulted in
the results of these financial statements.
In the context of a sector marked by three fundamental features: the continuing process of
consolidation, with a constant reduction of the number of operators, the sharper and more complex
development of the regulatory framework and the sharp increase in competition, not only on the
national level, but also within the different levels of the value chain, Hera has not slowed in its
efforts to grow, or in the quality of its results achieved.
Following the considerable work dedicated to the process of organisational integration in the
Modena area, extraordinary operations were carried out to strengthen our territorial presence
(ASPES Pesaro, SAT Sassuolo and GAS Riccione) and, in terms of plants, the ENEL grid in the
province of Modena was acquired (for a total amount of Euro 183 million).
The level of investment (Euro 321 million) also remained high, and in line with the previous years.
The greatest share of investments were made in order to improve network infrastructures for the
integrated water service as well as waste management plants.
However, this has not affected the solid equity base of the Group, which is facing a year of
extraordinary commitments. In agreement with its shareholders, the Group intends to remain at the
cutting edge of its field, also through further consolidation in the utilities sector.
I would like to note that the company managed to further consolidate its transparent, continuing
relations with investors, not only due to the effects of the appreciation of our shares, which had a
highly positive trend also in 2006, and, thus, obtain the confidence and esteem of the market.
As regards services, this year was important due to the coming on stream of new methods for
customer relations, which had undergone difficulties linked to the profound change which was
necessary in the Group's IT structures following the company mergers. This process will conclude
in the middle of the year, with the unification of the management systems also in the Ferrara and
Modena areas.
More generally, the Group maintained its constant commitment to the principles of sustainability,
which were demonstrated through a significant series of initiatives which are catalogued in the
soon-to-be-published Sustainability Report.
I hope to have the support of all of our shareholders in the realisation of the current plans, and,
specifically, the complete execution of the plans for plant expansion, which have been defined for
some time. I would like to thank the Board of Directors, the Board of Statutory Auditors and all
employees who contributed to achieving the results for this year.