To estimate the credit trend for HERA S.P.A. from 2021 to 2022, we will apply the S&P methodologies, including the Regulated Utilities criteria and base corporate adjustments. 

**Step 1: Identify the relevant industry**
HERA S.P.A. is identified as an Italian multi-utility company, primarily falling under the **Regulated Utilities / Unregulated Power and Gas** sectors. The base corporate adjustments for computing Adjusted EBITDA, FFO, and Adjusted Debt apply directly. 

**Step 2: Estimate the 2021 Adjusted EBITDA**
* Profit/Loss From Operating Activities (EBIT): 611.7M EUR
* Amortisation, Depreciation And Provisions: 612.1M EUR
Adjusted EBITDA = 611.7M + 612.1M = **1,223.8M EUR**

**Step 3: Estimate the 2021 FFO**
* Cash Interest Paid: 96.2M EUR
* Cash Taxes Paid: 156.3M EUR
FFO = Adjusted EBITDA - Cash Interest - Cash Taxes 
FFO = 1,223.8M - 96.2M - 156.3M = **971.3M EUR**

**Step 4: Estimate the 2021 Adjusted Debt**
* Noncurrent Financial Liabilities: 3,716.0M EUR
* Current Financial Liabilities: 499.7M EUR
* Noncurrent Lease Liabilities: 53.2M EUR
* Current Lease Liabilities: 43.4M EUR
* Post-Retirement / Employee Benefits Provisions: 105.4M EUR
* Less: Cash And Cash Equivalents: 885.6M EUR
Adjusted Debt = (3,716.0M + 499.7M + 53.2M + 43.4M + 105.4M) - 885.6M = **3,532.1M EUR**

**Step 5: Calculate the 2021 Adjusted Debt / Adjusted EBITDA**
Leverage = 3,532.1M / 1,223.8M = **2.89x**

**Step 6: Calculate the 2021 FFO / Adjusted Debt**
Coverage = 971.3M / 3,532.1M = **0.275 (27.5%)**

**Step 7: Estimate the 2022 Adjusted EBITDA**
* Profit/Loss From Operating Activities (EBIT): 533.8M EUR
* Amortisation, Depreciation And Provisions: 667.1M EUR
Adjusted EBITDA = 533.8M + 667.1M = **1,200.9M EUR**

**Step 8: Estimate the 2022 FFO**
* Cash Interest Paid: 128.0M EUR
* Cash Taxes Paid: 165.9M EUR
FFO = 1,200.9M - 128.0M - 165.9M = **907.0M EUR**

**Step 9: Estimate the 2022 Adjusted Debt**
* Noncurrent Financial Liabilities: 5,689.9M EUR
* Current Financial Liabilities: 650.1M EUR
* Noncurrent Lease Liabilities: 55.1M EUR
* Current Lease Liabilities: 21.3M EUR
* Post-Retirement / Employee Benefits Provisions: 92.0M EUR
* Less: Cash And Cash Equivalents: 1,942.4M EUR
Adjusted Debt = (5,689.9M + 650.1M + 55.1M + 21.3M + 92.0M) - 1,942.4M = **4,566.0M EUR**
*(Note: A massive buildup in required working capital due to spikes in Europe's 2022 energy markets resulted in drastically heightened debt needs).*

**Step 10: Calculate the 2022 Adjusted Debt / Adjusted EBITDA**
Leverage = 4,566.0M / 1,200.9M = **3.80x**

**Step 11: Calculate the 2022 FFO / Adjusted Debt**
Coverage = 907.0M / 4,566.0M = **0.199 (19.9%)**

**Step 12: Classify the Year-on-Year Credit Trend**
* **Signal 1 (Leverage):** 3.80x - 2.89x = +0.91x (≥ +0.2x threshold) → **Deteriorating**
* **Signal 2 (Cash-flow Coverage):** 0.199 - 0.275 = -0.076 (≤ -0.03 threshold) → **Deteriorating**

Both signals point strictly to a deterioration in the issuer's credit capacity due to squeezed margins and significantly higher debt balances incurred to fund working capital.

<answer>Deteriorating</answer>