Let’s start by identifying the industry.

**Step 1 – Identify industry**  
Hera S.p.A. is an Italian multi-utility providing gas, water, electricity, and waste management services. Multi-utilities fall under the **Regulated Utilities** methodology in S&P’s framework.  

For regulated utilities, S&P’s core ratio is **FFO to Debt**, with adjustments for leases, pensions, and other items. There is no special sector override for EBITDA calculation beyond the baseline, other than to watch for pass-through costs that might inflate EBITDA margins (not an issue here, as we’ll use the direct income statement figures).

---

**Step 2 – Estimate Adjusted EBITDA**  

We’ll reconstruct EBITDA from the income statement.

From the data (2022 figures):

- **Operating profit (EBIT)** = 533,800,000 EUR
- **Depreciation, amortization & provisions** = 667,100,000 EUR  

So:  
**EBITDA (reported)** = EBIT + Depreciation = 533.8m + 667.1m = **1,200.9m EUR**

**Lease adjustments:**  
Under S&P methodology, leases are already included in EBITDA from IFRS 16. So no separate lease EBITDA add-back needed — IFRS 16 already puts depreciation and interest into the P&L. Operating profit already excludes lease interest, and depreciation includes right-of-use amortization. So EBITDA reconstructed from EBIT and D&A already captures the IFRS 16 effect. No additional adjustment here.

**Non-recurring items:** None explicitly given, no gains/losses flagged, so no adjustment.

**Pension adjustments:** The employee benefits expense is 601.1m; that is already deducted in arriving at EBIT. We would adjust only if service cost is buried and we need to reclassify interest cost to cash interest later, but for EBITDA it stays as is, unless there’s a specific indication of non-service cost included above EBIT. Not enough detail to adjust; we’ll keep as is.

**JV proportional EBITDA:** Share of profit of associates is 10m EUR, below operating profit, so already excluded from EBIT. No proportional consolidation adjustment needed.

Thus:  
**Adjusted EBITDA = 1,200.9m EUR**

---

**Step 3 – Estimate FFO**  

Formula: FFO = Adjusted EBITDA – cash interest – cash taxes

**Cash interest:**  
Finance costs = 217.2m EUR. But this is total finance cost, including lease interest.  
From cash flow statement (2022):

- **Finance costs paid (classified as operating)** = 128.0m EUR
- **Lease payments (classified as financing)** = 43.4m EUR

Under S&P, cash interest = Finance costs paid + Lease interest paid = 128.0m + 43.4m = **171.4m EUR**.

**Cash taxes:**  
- Income taxes paid (from cash flow) = 165.9m EUR.

So:  
FFO = 1,200.9m – 171.4m – 165.9m = **863.6m EUR**

---

**Step 4 – Estimate Adjusted Debt**

Formula:  
Adjusted Debt = Reported debt + leases + pension deficit + guarantees + hybrid debt portion + other debt-like items – eligible cash

**Reported debt (financial liabilities):**  
- Non-current financial liabilities = 5,689.9m EUR  
- Current financial liabilities = 650.1m EUR  
Total reported debt = **6,340.0m EUR**

**Leases:**  
- Non-current lease liabilities = 55.1m  
- Current lease liabilities = 21.3m  
Total leases = **76.4m EUR** (IFRS 16 already included in reported debt? No — these are separated in the data, so we add them.)

**Pension deficit:**  
- Provisions for employee benefits = 92.0m EUR  
No plan assets given; treat full amount as deficit under S&P.

**Guarantees / other debt-like items:** None explicitly given. We can skip.

**Hybrid debt:** No mention.

**Eligible cash:**  
Cash and cash equivalents = 1,942.4m EUR. Generally, S&P caps eligible cash at the minimum required for operations (often a small percent of revenue). But absent specific caps, some analysts net all cash. However, S&P typically doesn’t net all cash unless surplus is clearly identifiable. In a conservative approach for multi-utilities with large seasonal working capital (as here), they may limit netting. We’ll net no cash in this simplified calculation, or assume minimal surplus. If we net all cash: Adjusted Debt = 6,340.0 + 76.4 + 92.0 – 1,942.4 = 4,566.0m. That seems more in line with how S&P would treat large seasonal cash balances for a gas/electric utility.

Given the large cash balance and seasonal nature of this business, S&P would likely allow a meaningful offset. So eligible cash = 1,942.4m.

Thus:  
**Adjusted Debt** = 6,340.0 + 76.4 + 92.0 – 1,942.4 = **4,566.0m EUR**

---

**Step 5 – Compute FFO / Adjusted Debt**

FFO / Adjusted Debt = 863.6 / 4,566.0 = **0.1891** (rounded to 4 decimals).

---

<answer>0.1891</answer>