Eni S.p.a. · MIL:ENI
Eni — Merger or Acquisition (November 2002)
28 slides from Eni's merger presentation, Nov 26, 2002
Slide 1: A Transaction Marking a New Step in the Delivery of our G&P Strategy
A Transaction Marking a New Step in the Delivery of our G&P Strategy Presentation to the Financial Community November 26th, 2002
Slide 2: Not for Distribution in or into the United States
NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES This document does not constitute, or form part of, any offer or invitation to purchase, or any any solicitation solicitation of any offer to sell sell any securities in any jurisdiction, nor shall it (or any part of it) or or the fact fact of of its
Slide 3: Agenda
Agenda I. Transaction Highlights Mincato,, Chief Executive Officer Vittorio Mincato II. Background and Industrial Rationale of the Transaction Luciano Sgubini Sgubini,, Chief Operating Officer Gas&Power Division III. Financials and Structure Mangiagalli,, Chief Financial Officer Marco Mangiagalli IV
Slide 4: I. Transaction Highlights
I. Transaction Highlights Vittorio Mincato Chief Executive Officer November 26th, 2002
Slide 5: Summary Terms of the Offer
Summary Terms of the Offer ! Cash offer for all outstanding Italgas shares " Price: € 13.00 per share " Implied equity value of € 4.53 bn " Implied enterprise value of € 5.30 bn " Premium of 25.7% to weighted average share price over last month ! Closing expected in January 2003 ! Intention to de-li
Slide 6: A Strong Industrial and Financial Rationale To Maximize Value
A Strong Industrial and Financial Rationale Marking a new step in delivering our natural gas strategy, through: To ! A further step in the reorganization of the gas business, focused on commercial activity Maximize ! Establish a strong integrated commercial arm for the Value the Italian market ! Exp
Slide 7: Focused Strategy in Natural Gas since 1999
Focused Strategy in Natural Gas since 1999 STRATEGY ACHIEVEMENTS AND TARGETS ! Optimize sales and margins in ! Maintained attractive returns Italy in compliance with while reducing volumes supplied regulatory ceilings (from 83% in 2001 to 75% in 2002) ! Reduce presence in regulated ! Snam RG IPO in
Slide 8: II. Background and Industrial Rationale of the Transaction
II. Background and Industrial Rationale of the Transaction Luciano Sgubini Chief Operating Officer Gas & Power Division November 26th, 2002
Slide 9: A Transparent Regulatory Framework
A Transparent Regulatory Framework Italy is one of the most rapidly liberalising markets in Europe… ! Unbundling of supply and sales activities from transport and distribution ! TPA to infrastructures on equal terms and at regulated tariffs ! Sales activity fully liberalized from 1 January 2003 ! Re
Slide 10: Eni Current Position in the Italian Gas Market
Eni Current Position in the Italian Gas Market (2002E data) 100% 75% Regulatory ceiling final market Wholesales from 2003: 50% 39% Italgas End customers Italian gas Eni input in Eni in the final demand the system market Net of Eni gas self- self-consumption 10
Slide 11: Italgas: Leading Position in the Italian Market
Italgas: Leading Position in the Italian Market Turin ! Largest gas distributor in Italy with strong Venice commercial position and brand recognition 1,200 8.2 Municipalities 5.6 Florence Rome Sales (bcm) Customers (million) Naples ! Well positioned in international secondary distribution 4.6 1.3 Sa
Slide 12: Transaction Driven by Strong Industrial Rationale
Transaction Driven by Strong Industrial Rationale 1. A further step in the reorganization of the gas business, focused on commercial activity 2. Establish a strong integrated commercial arm for the Italian market 3. Exploit complementary Eni and Italgas skills in gas chain 4. Optimize asset base 12
Slide 13: 1. Reorganization of the Domestic Gas Business
1. Reorganization of the Domestic Gas Business Infrastructure Supply Sales (regulated business) Transmission Equity Gas Network and Dispatching (Eni / E&P (Snam RG) Division) Marketing (Eni / G&P Division) Storage (Stogit) Gas Purchases (Eni / G&P Distribution LNG Division) Residential Re-gasificati
Slide 14: 1998: Gas Equity Production Incorporation
1998: Gas Equity Production Incorporation Infrastructure Supply Sales (regulated business) Transmission Equity Gas Network and Dispatching (Eni / E&P (Snam RG) Division) Marketing (Eni / G&P Division) Storage (Stogit) Gas Purchases (Eni / G&P Distribution LNG Division) Residential Re-gasification Ne
Slide 15: 2000-2001: Unbundling of Marketing and Regulated Asset
2000-2001: Unbundling of Marketing and Regulated Asset Infrastructure Supply Sales (regulated business) Transmission Equity Gas Network and Dispatching (Eni / E&P (Snam RG) Division) Marketing (Eni / G&P Division) Storage (Stogit) Gas Purchases (Eni / G&P Distribution LNG Division) Residential Re-ga
Slide 16: 2001: Listing of Snam RG
2001: Listing of Snam RG Infrastructure Supply Sales (regulated business) Transmission Equity Gas Network and Dispatching (Eni / E&P (Snam RG) Division) Marketing (Eni / G&P Division) Storage (Stogit) Gas Purchases (Eni / G&P Distribution LNG Division) Residential Re-gasification Network (Italgas Pi
Slide 17: 2002: Creation of Gas and Power Division
2002: Creation of Gas and Power Division Infrastructure Supply Sales (regulated business) Transmission Equity Gas Network and Dispatching (Eni / E&P (Snam RG) Division) Marketing (Eni / G&P Division) Storage (Stogit) Gas Purchases (Eni / G&P Distribution LNG Division) Residential Re-gasification Net
Slide 18: 2002: a Further Step…
2002: a Further Step… Infrastructure Supply Sales (regulated business) Transmission Equity Gas Network and Dispatching (Eni / E&P (Snam RG) Division) Marketing (Eni / G&P Division) Storage (Stogit) Gas Purchases (Eni / G&P Distribution LNG Division) Residential Re-gasification Network (Italgas Più)
Slide 19: 2. Establish a Strong Integrated Commercial Arm for the Italian Market
2. Establish a Strong Integrated Commercial Arm for the Italian Market ! Integrate complementary skills available " Sourcing and contracting competences of Eni G&P " Commercial and marketing competences of Italgas ! Reach faster decision-making process through organizational streamlining ! Maximize
Slide 20: …a Market Segmentation Policy
…a Market Segmentation Policy Segments Characteristics Objectives ! Industrial ! Powergen ! Few consumers and multisite clients ! Synergy benefits ! Large commercial from integrated consumer ! Trend to centralized sale network purchase ! Centralized heating ! Tailored offer ! Sophisticated buyer ! P
Slide 21: 2. Managing Direct Access to Final Customers
2. Managing Direct Access to Final Customers ! Focus on most valuable customers ! Selected enlargement of client base ! Enhance offer of energy related services Fully Capturing the Value of Final Customers 21
Slide 22: 3. Excellent European Platform
3. Excellent European Platform Eni Gas & Power Italgas NORTH SEA Complementary Eni + Italgas Supply and Gas supply Customer Skills THE NETHERLANDS Gas & Power Trading JV EnBW- EnBW-Eni RUSSIA GVS Tigaz Adriaplin Galp Eni Españ España Snam Commercializadora Gas Trading Italgas Hellas NIGERIA ALGERIA
Slide 23: 4. The Future Evolution of our Asset Base will be in Line with our Stated Strategy
4. The Future Evolution of our Asset Base will be in Line with our Stated Strategy Strategic Target ! Italgas ! … but To reduce acquisition increases exposure temporarily Eni flexibility to regulated increases to optimize assets exposure its presence according to regulated in regulated to market bus
Slide 24: III. Financials and Structure
III. Financials and Structure Marco Mangiagalli Chief Financial Officer November 26th, 2002
Slide 25: Offer Terms
Offer Terms ! € 13.00 per Italgas share represents a premium of: " 19.1% to official price of November 22nd " 25.7% to weighted average share price over the last month " 24.3% to weighted average share price over the last six months " 10.4% to highest official price of Italgas shares (02/07/2002) !
Slide 26: Financial Impact
Financial Impact Deal Impact ! EPS and CFPS accretive from year P&L / Cash Flow one ! Transaction 100% debt-financed ! No impact expected on rating Balance Sheet ! No impact on dividends and share buy-back policy 26
Slide 27: An Expedited Timeline
An Expedited Timeline November 25th Mid December Announcement Beginning Offer Period Consob to Review Offer Document Expected Closing January 27
Slide 28: IV. Q & A
IV. Q & A November 26th, 2002