Italgas Spa · MIL:IG

Italgas Spa — FY2018 Earnings Presentation

26 slides from Italgas Spa's earnings presentation, Feb 22, 2019

  1. Slide 1: 2018 FY Consolidated Results

    2018 FY Consolidated Results 22nd February 2019, Milan

  2. Slide 2: Italgas in Italy

    Italgas The in Italy leading Italian natural gas distributor Base Line Of which affiliates Network length 69,782 km 8,421 km Municipalities 1,808 108 Redelivery Points 7.56 mn 0.85 mn Market Share1 34.7% 3.9% Gas distributed2 9.1 Bcm 1.23 Bcm Employees 4,127 460 Note: (1) Calculated by redelivery po

  3. Slide 3: 2018 … another step forward

    2018 … another step forward  5 mln Smart Meters in operation INNOVATION  Innovation to boost Service Quality and Network Management SUCCESSFUL  7 transactions completed and 1 announced M&A CONTINUES 275€ mn deployed at RAB for 160k RdP  Capex over € 500 mln for the 2nd consecutive year RESULTS A

  4. Slide 4: 2018: strong performance delivery

    2018: strong performance delivery vs 2017 vs 2017 € mn  Revenues €1,176.2 4.6%  Operating cash €718.7 % flow 8.2%  Capex €522.7  EBITDA €839.5  Consolidated 8.5% Net Debt* €3,814.3  EBIT €453.5  Leverage** 59.6% 7.1%  Net Profit €313.7 * Excluding 49.9 mln for operating leases (IFRS 16) and

  5. Slide 5: Bolt on acquisition fueling RAB growth

    Bolt on acquisition fueling RAB growth From December 2017….. Aquamet & Mediterranea s.r.l Isgas Energit EGN Multiutilities Other Grids** Spending RAB* & Isgas 33 Medea (EV) ~ €315mn ~ €335 mn Network Existing Km PDR ~ 4,600 190K Fontenergia Portopalo * Includes Net Assets value of LPG networks under

  6. Slide 6: 2018: Consistent and significant capex delivery

    2018: Consistent and significant capex delivery TARGET CAPEX 2018 € mn > €0.5bn 521.9 522.7 8% 13% Distribution 2% 48% 51% Metering 44% Others 34% Driven by M&A 2017 2018 ~1,660,000 ~1,650,000 smart meters installed smart meters installed* * Of which ~1, 505,000 units related to the replacement of t

  7. Slide 7: Digital program deployment

    Digital program deployment PLAN PERIOD MIGRATION TO CLOUD OF IT SEPARATION OF ITALGAS APPLICATIVE MAP IT MAP RATIONALIZATION APPLICATIONS IN «GREEN DATA CENTER» DIGITAL FACTORY Transition to cloud completed on November 13th, 2018 Digital Factory in place since November 19th, 2018 7 /

  8. Slide 8: Digital Factory: First Outcomes

    Digital Factory: First Outcomes Room 1: Scheduling, dispatching Room 2: Integrated Control Room and consumer experience INTERVENTIONS SERVICE CONSUMER ON TIME QUALITY «CARE» ‘Pronto Intervento’ Advanced Grid  Automatically  Activities flexibile  Automatic and Optimization Monitoring suggested ide

  9. Slide 9: Corporate Structure

    Corporate Structure Consolidated perimeter – structure as of 31/12/2018 Further optimization opportunities Fully consolidation method  Put/call agreement for 40% of EGN Equity method Toscana Energia  Simplification of affiliates’ structure Umbria Distribuzione  Fontenergia S.r.l. and Fontenergia

  10. Slide 10: Consolidated Income Statement

    Consolidated Income Statement Change 2017 2018 2018 vs 2017 €mn Revenues 1,124.2 1,176.2 52.0 Operating expenses - 348.0 - 336.7 11.3 EBITDA 776.2 839.5 63.3 EBITDA adjusted 781.2 842.0 60.8 Depreciation & amortisation - 358.3 - 386.0 - 27.7 EBIT 417.9 453.5 35.6 EBIT adjusted 422.9 456.0 33.1 Net i

  11. Slide 11: Consolidated Revenues: +4.6% vs 2017

    Consolidated Revenues: +4.6% vs 2017 Revenues Change 2017 2018 2018 vs 2017 €mn Regulated revenues 1,096.8 1,143.1 46.3 Distribution 996.9 1,007.3 10.4 Tariff contribution for meters replacement 47.9 71.5 23.6 Other distribution revenues 52.0 64.3 12.3 Other revenues 27.4 33.1 5.7 TOTAL REVENUES 1,1

  12. Slide 12: Consolidated Opex: -3.2% vs 2017

    Opex Consolidated Opex: -3.2% vs 2017 Change 2017 2018 €mn 2018 vs 2017 Gas Distribution activities 337.8 316.8 - 21.0 Fixed costs 267.2 244.8 - 22.4 Net labour cost 139.1 140.9 1.8 Net external cost 128.1 103.9 - 24.2 Variable costs 3.4 4.8 1.4 Other costs 13.9 10.2 - 3.7 Tee 0.1 2.3 2.2 Concession

  13. Slide 13: Ebit Analysis: +8.5% vs 2017

    EbitEbit: Analysis +8.5% vs 2017 € mn (27.7) 63.3 Of which: • € 21 mn due to the 453.5 417.9 accelerated depreciation of meters to be replaced with smart ones by 2020 • € 7 mn leasing ex IFRS 16 Ebit FY 2017 Ebitda D&A Ebit FY 2018 13 /

  14. Slide 14: Consolidated Net Income: +7.1% vs 2017

    Consolidated Net Income:Net + Income 7.1% vs 2017 Tax rate 26.4% € mn (10.8) (3.0) 35.6 (0.9) 292.8 313.7 Net income FY Ebit Net Financial Income Income Net income FY 2017 Expenses from Taxes on EBT 2018 Associates 14 /

  15. Slide 15: Consolidated Cash Flow

    Consolidated Cash Consolidated Flow Cash Flow 11.6 (25.6) (0.4) (3.0) 66.3 488.7 € mn 338.7 (471.3) Technical Technical Subsidies Net Disposals capex w/o capex M&A payables M&A and investments Ifrs 16 718.7 313.7 (173.1) 247.4 74.3 (168.3) (94.0) * Net income Depreciation Change in Cash flow Net cap

  16. Slide 16: A solid, efficient and resilient debt structure

    A solid, efficient and resilient debt structure Debt Structure year end 2018 4.8 € bn No refinancing risks until 2022 Total Committed Credit Facilities and Bonds Fixed Floating ratio 900 800 700 14% 3% 600 21% 500 3.8 400 € bn 300 200 86% 76% 100 0  Fixed  Floating  Bond RCF 1.1€ bn  Institution

  17. Slide 17: Balance sheet

    Balance sheet 2017 2018 Change Dec, 31st Dec, 31st €mn Net invested capital 4.905.9 5.193.5 287.6 Fixed capital 4.950.9 5.284.1 333.2 Tangible fixed assets 224.6 259.2 34.6 Net intangible fixed assets 4.676.6 4.982.8 306.2 Net payables investments - 135.3 - 133.1 2.2 Equity-accounted and other inves

  18. Slide 18: Dividend policy

    Dividend policy … M&A activity Organic capex and operational excellence DPS 2018 proposal:* 0.234 € Innovation & + 12.5% vs digitization DPS 2017 Solid balance sheet ...delivers additional value to shareholders * Payable on May 22nd 2019 18 /

  19. Slide 19: From 2016 to 2018: impressive performances (1/2)

    From From 2016 2016 to to 2018 2018:(1) impressive performances (1/2) 2016 2017 2018 Change 2018vs2016 €mn  Revenues 1,077.9 1,124.2 1,176.2 +9.1%  Operating expenses (416.3) (348.0) (336.7) -19%  EBITDA(*) 684.4 781.2 842.0 +23.0%  EBIT (*) 358.8 422.9 456.0 +27.0%  NET PROFIT (*) 221.1 296.4

  20. Slide 20: From 2016 to 2018: impressive performances (2/2)

    From 2016 to 2018: impressive performances (2/2) 2016 2017 2018 Change 2018vs2016 €mn  Capex 378.0 521.9 522.7 +38.3%  Operating Cash Flow 498.5 (1) 549.4 718.7 +44.2%  Net debt 3,617.4 3,720.3 3,814.3 +5.4%  Leverage (2) 61.0% 61.4% 59.6%  Dividends FY 161.8 168.3 189.3 +17% (1) Adjusted (2) N

  21. Slide 21: », WGitaigas

    », WGitaigas

  22. Slide 22: Annexes

    2, WGitaigas

  23. Slide 23: Income statement

    Income statement 2018 2018 2018 2018 1st Quarter 2nd Quarter* 3rd Quarter 4th Quarter €mn Revenues 281.0 311.4 288.3 295.5 Operating expenses - 82.6 - 85.6 - 83.3 - 85.2 EBITDA 198.4 225.8 205.0 210.3 Depreciation & amortisation - 86.0 - 115.2 - 94.1 - 90.7 EBIT 112.4 110.6 110.9 119.6 Net interest

  24. Slide 24: Income statement

    Income statement 2017 2018 4th Quarter Change 4th Quarter €mn Revenues 289.2 295.5 6.3 Operating expenses - 91.0 - 85.2 5.8 EBITDA 198.2 210.3 12.1 Depreciation & amortisation - 87.2 - 90.7 - 3.5 EBIT 111.0 119.6 8.6 Net interest income (expenses) - 9.3 - 11.4 - 2.1 Net income from associates 7.1 -

  25. Slide 25: Disclaimer

    Disclaimer Italgas’s Manager, Giovanni Mercante, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and information disclosures herewith set forth correspond to the compan

  26. Slide 26: 2018 FY Consolidated Results

    2018 FY Consolidated Results 22nd February 2019, Milan

Italgas — FY2018 Earnings Presentation on 6ix