Ascopiave S.p.a. · MIL:ASC
Ascopiave — Italian Stock Market Opportunities Conference 2013
71 slides from Ascopiave's conference presentation, Sep 19, 2013
Slide 1: Italian Stock Market Opportunities Conference Group Presentation
Italian Stock Market Opportunities Conference Group Presentation Milan, September 19th 2013 Page 1
Slide 2: Contents
Contents Business Overview ............................................................................................ Pag. 3 History ................................................................................................................ Pag. 12 Gas distribution ...........................
Slide 3: Contents: Business Overview
Contents Business Overview → Group business activities .................................................................................. Pag. 4 → Competitive environment: the gas chain in Italy ............................................... Pag. 5 → Market positioning .............................
Slide 4: Group business activities
Group business activities p Ascopiave Group operates mainly in the gas sector. p Main Business Activities: p gas distribution (regulated activity / concessions awarded by municipalities) p gas sale to end customers (non regulated activity / free market) p Other Business Activities: heat management,
Slide 5: Competitive environment: the gas chain in Italy
Competitive environment: the gas chain in Italy Transport Distribution Regulated activities Import / via national Storage via local Sales production pipelines pipelines Liberalized activities Natural gas production Import of natural gas via Import of liquefied (in Italy or abroad) international pipe
Slide 6: Market positioning
Market positioning MAIN ITALIAN GAS DOWN-STREAM OPERATORS The Group has created an industrial pole that is a national player in the gas sector and a leading regional player in Triveneto VOLUMES OF GAS DISTRIBUTED (a): VOLUMES OF GAS SOLD (a): Vol. of gas Distribuited Vol. of gas sold in Italy Rankin
Slide 7: Ascopiave Group structure as of June 30th 2013
Ascopiave Group structure as of June, 30th 2013 57% p Ascopiave has been listed on the STAR division of the 89% 1% Italian Stock Exchange since (in liquidation) 12 December 2006 51% 1% p Ascopiave operates through 51% 1% several companies: (1) some of them are subsidiaries in which 100% 80% the Grou
Slide 8: Main financial data
Main financial data 2012 MAIN FINANCIAL DATA* INCOME Distribution Sales BALANCE SHEET 31/12/2012 Group STATEMENT SBU** SBU*** Revenues**** 1,078,038 95,424 1,055,448 Fixed assets 520.808 EBITDA 102,635 33,940 68,695 Net working capital 38.140 EBIT 73,027 15,352 57,675 TOTAL CAPITAL EMPLOYED 558.948
Slide 9: 2008-2012 EBITDA break-down by Strategic Business Unit
2008-2012 EBITDA break-down by Strategic Business Unit (Million of Euro) Distribution Sales INCOME STATEMENT Group % % SBU SBU Revenues 1.078,0 95,4 1.055,4 (Gas purchase costs) (689,4) 0,0 (689,4) (Other operating costs) (286,0) (61,5) (297,3) EBITDA 102,6 33,9 33,1% 68,7 66,9% Revenues 1.099,2 92,
Slide 10: Financial leverage comparison
Financial leverage comparison Financial leverage comparison LOCAL UTILITIES (**) FINANCIAL RATIOS (*) (Average data) ASCOPIAVE VAR. Financial leverage 1,35 0,44 -0,91 D/D+E 56,9% 30,4% -26,5% E/D+E 43,1% 69,6% 26,5% D/EBITDA 3,74 1,66 -2,08 Ascopiave financial leverage (0.44) is lower than those of
Slide 11: EIB Loan
EIB Loan EIB Loan EIB lends EUR 70 million to Ascopiave for gas grid in north-east of Italy In June 2013 the European Investment Bank (EIB) and Ascopiave have signed a EUR 70 million loan in support of investments to improve and expand gas distribution networks in the Veneto and Lombardy regions. Th
Slide 12: Contents: History
Contents History → Use of IPO proceeds ........................................................................................ Pag. 13 → Equity story after IPO (2007-2013) ................................................................... Pag. 14 → Growth in the gas down-stream market in 2007-2012
Slide 13: Use of IPO proceeds
Use of IPO proceeds Ascopiave has used the IPO proceeds to finance a series of investments pursuing the dimensional growth of the Group, both by internal lines (investments in gas distribution network and other capital expenditures) and by external lines (investments in firm / companies acquisitions
Slide 14: Equity story after IPO (2007-2013) (1)
Equity story after IPO (2007-2013) (1) Long-Term Gas Supply Increase of capital New Acquisitions: Agreement between SIN stake in Sinergie Edigas DG (100%) IT and Gazprom Italiane (SIN IT): (2009-2018) Edigas Due (100%) 27.601% (North-Western Italy) Company set up: Sinergie Italiane (SIN IT): 20.01%
Slide 15: Equity story after IPO (2007-2013) (2)
Equity story after IPO (2007-2013) (2) Coverage of SIN IT Ascopiave Group exits New Acquisitions: losses and shareholders gas trading and Unigas (48.86%) resolution for company wholesaling business Blue Meta (100%) voluntatary liquidation. (North-Western Italy) Current capital stake in Amgas Blu (80
Slide 16: Growth in the gas down-stream market in 2007-2012
Growth in the gas down-stream market in 2007–2012 Thanks to the company and firm acquisitions carried out in the last six years, Ascopiave Group has significantly increased its customer base, both in the gas sale and in the gas distribution business Number of gas sale customers (*) Number of users c
Slide 17: Contents: Gas distribution
Contents Gas distribution → Minimum territorial district public tenders deadlines .......................................... Pag. 18 → Ascopiave positioning in the gas distribution market ......................................... Pag. 19 → Regulation of the call of tenders ..........................
Slide 18: Minimum Territorial District public tenders deadlines
Minimum Territorial District public tenders deadlines p Gas distribution concessions must be awarded only via Minimum Territorial District public tenders, so public tenders can not be banished by a single municipality. p 175 Minimum Territorial Districts nationalwide. The following chart illustrates
Slide 19: Ascopiave positioning in the gas distribution market
Ascopiave positioning in the gas distribution market Ascopiave positioning in the minimum territorial districts set by the Government MINIMUM Total minimum Ascopiave Group Ascopiave Group Public tender TERRITORIAL territorial district % gas users share gas users deadline DISTRICT gas users (%) Trevi
Slide 20: Regulation of the call of tenders (1)
Regulation of the call of tenders (1) Standards to evaluate economic and technical offers A– Economic Offer B– Safety and service quality C– Development and maintenance of the distribution network A - Economic offer (maximum score: 28) p Discount on gas distribution tariffs paid by the end customers
Slide 21: Regulation of the call of tenders (2)
Regulation of the call of tenders (2) B - Offer concerning the safety and the service quality (maximum score: 27) p network inspections in order to prevent gas leaks (percentage of gas network annually checked) p performance of the emergency service p performance of the gas odorization service p imp
Slide 22: Residual Industrial Value of the Distribution Network
Residual Industrial Value of the Distribution Network In the event that should not be awarded the next public tenders for the concession of the distribution of gas must be paid to Ascopiave, as the current owner of the networks, a compensation, calculated in accordance with the terms of the agreemen
Slide 23: Tariff regulation: VRT breakdown
Tariff regulation: VRT breakdown 2012 VRT* (“Vincolo dei Ricavi Ammesso”, i.e. 2012 Total Revenue Constraint) 2012 VRT (Thousand of Euro) VRT = CO + AMM + CI x rd 2012 CO 22.160 where: 2012 AMM 17.038 2012 CI x rd 27.831 CO: represents the tariff quota covering Total 2012 VRT (*) 67.029 management o
Slide 24: SWOT analysis – Gas Distribution SBU
SWOT analysis – Gas Distribution SBU Strengths Weakness Dimensional level that allow exploitation of interesting Expiry of concessions and direct awards foresees by management economies of scale Law, in case of the most prudential and unfavourable interpretation of the actual regulation, in 2009-201
Slide 25: Contents: Gas sales
Contents Gas sales → Gas sales to end customers: market segmentation and selling prices ………….. Pag. 26 → Gas selling price to domestic end customers ..................................................... Pag. 27 → Gas purchasing costs / Gas trading business ...........................................
Slide 26: Gas sales to end customers: market segmentation and selling prices
Gas sales to end customers: market segmentation and selling prices Volumes of gas sold to end customers Pricing Market segmentation Mandatory maximum price level set by Domestic customers ~ 50% the Authority of Energy and Gas Small business Completely free prices; mainly price ~ 20% customers discou
Slide 27: Gas selling price to domestic end customers (1)
Gas selling price to domestic end customers (1) P P == CCI CCI ++ QTI QTI ++ QS QS ++ QOA QOA ++ TD TD ++ QVD QVD ++ GCT GCT ++ VAT VAT CCI = QE+QCI = wholesale cost of gas TD = Gas distribution tariff QTI = Gas transportation cost via national network QVD = Gas retail sale cost QS = storage cost of
Slide 28: Gas selling price to domestic end customers (2)
Gas selling price to domestic end customers (2) Gas selling price to domestic end customers: from 1stQ 2010 to 2ndQ 2013 National average price of natural gas for a family with autonomous heating and annual gas consumption of 1,400 scm. 91,24 92,78 90,22 88,93 86,38 87,92 84,07 79,70 76,52 74,13 74,
Slide 29: Gas purchasing costs / Gas trading business
Gas purchasing costs / Gas trading business Gas Purchasing Costs p Gas purchasing costs are negotiated on a free market p Incumbent shippers have strong market position Uses Sourcing Actually: annual contracts (thermal year) Sales to end customers ~ 100% Delivery: entry of local distribution network
Slide 30: Gas selling price up-date (Resolution AEEG n. 196/2013/R/gas)
Gas selling price up-date (Resolution AEEG n. 196/2013/R/gas) NEW REGULATION (Resolution AEEG n. 196/2013/R/gas) Resolution AEEG n. 196/2013/R/gas provides new rules to set up gas selling price to be applied to customers belonging to the protected market (domestic customers) since October 1st, 2013:
Slide 31: SWOT analysis – Gas Sales SBU
SWOT analysis – Gas Sales SBU Strengths Weakness Large end customer base Limited diffusion and knowledge of the brand outside of High per-capita consumption the region served Front offices capillarity Efficient customer care service Differentiation of offered services (dual fuel) Independence by big
Slide 32: Contents: Sinergie Italiane
Contents Sinergie Italiane → Sinergie Italiane ................................................................................................. Pag. 33 Page 32
Slide 33: Sinergie Italiane (1)
Sinergie Italiane (1) 30.94% 7.18% 30.94% 30.94% Sinergie Italiane has been established in 2008 to create a cooperation among downstream companies of the Italian energy sector (*), with the characteristic of a strong fidelized customer base and high local rooting. The company is based in Milan. (*)
Slide 34: Sinergie Italiane (2)
Sinergie Italiane (2) p March 13th, 2012 Sinergie Italiane board of directors approved the draft statutory financial statements at September 30th 2011, reporting a loss of Euro 92.2 million and a negative equity of Euro 88.7 million FY 2011 Ascopiave Group financial statement reported a financial ch
Slide 35: Sinergie Italiane (3)
Sinergie Italiane (3) The operation involved in a payment of 27,8 million of Euro which has not increased the value of the stake, but that has been expensed using partially the provision for risks and charges already allocated as of December 31st, 2011. For the start of restructuring process providi
Slide 36: Contents: Strategy
Contents Strategy → Strategic guidelines and objectives .................................................................... Pag. 37 → Growth in the down-stream market .................................................................... Pag. 38 Page 36
Slide 37: Strategic guidelines and objectives
Strategic guidelines and objectives Strategic guidelines p taking advantage of opportunities arising from the liberalisation of the gas market p consolidating its presence as a utility provider in northern Italy, by rationalising and optimising its operating process and increasing its efficiency thr
Slide 38: Growth in the down-stream market
Growth in the down-stream market Growth in size through a significant expansion of its customer base p Participation in competitive bidding for the award of contracts to manage the gas distribution service p Development of the electricity market as a tool to Increase Increase number number retain cu
Slide 39: Contents: Dividends
Contents Dividends → Dividend policy ................................................................................................. Pag. 40 Page 39
Slide 40: Dividend policy
Dividend policy Dividends payment sustainable with high return to shareholders Sustainability of the dividend policy: p stable cash flow p stable business profitability p well-balanced financial structure Dividend yield at the top of the listed italian utilities companies DIVIDENDS 2012 2011 2010 20
Slide 41: Annexes
ANNEXES Milan, September 19th 2013 Page 41
Slide 42: Contents: Annexes
Contents ANNEXES FY 2012 financial results → FY 2012 income statement ........................................................................ Pag. 43 → Balance sheet ............................................................................................ Pag. 44 → Volumes of gas distributed ...
Slide 43: FY 2012 income statement
FY 2012 income statement (Thousand of Euro) 2012 2011 Chg Chg % Revenues 1.078.038 1.099.241 (21.203) -1,9% (Cost of raw materials and consumables) (780.822) (844.268) 63.445 -7,5% (Cost of services) (152.434) (124.572) (27.862) +22,4% (Cost of personnel) (25.442) (24.323) (1.119) +4,6% (Other opera
Slide 44: Balance sheet
Balance sheet (Thousand of Euro) 31/12/2012 31/12/2011 Chg Chg % Tangible assets (*) 40.534 61.983 (21.448) -34,6% Non tangible assets (*) 450.457 459.046 (8.589) -1,9% Other fixed assets 29.817 26.741 3.076 +11,5% Fixed assets 520.808 547.770 (26.962) -4,9% Operating current assets 363.436 381.684
Slide 45: Volumes of gas distributed
Volumes of gas distributed Volumes of gas distributed (Million of standard cubic meters) ∆ = -0,4 ∆ = +6,9 1.200 -0,05% 1.200 +4,6% 1.050 1.050 877,3 877,8 900 900 750 750 600 600 450 450 300 300 158,8 151,9 150 150 0 0 2012 2011 2012 2011 New consolidation area New consolidation area 2011 consolida
Slide 46: Volumes of gas sold to end customers
Volumes of gas sold to end customers Volumes of gas sold to end customers (Million of standard cubic meters) ∆ = -63,2 ∆ = -87,4 -5,6% -14,1% 1.400 1.400 1.200 1.122,3 1.059,2 1.200 1.000 25,8 1.000 800 800 621,7 600 600 534,4 1.033,4 400 400 200 200 0 0 2012 2011 2012 2011 New consolidation area (*
Slide 47: Volumes of gas sold on trading and wholesaling activities
Volumes of gas sold on trading and wholesaling activities Volumes of gas sold on trading and wholesaling activities (Million of standard cubic meters) ∆ = -537,4 -46,6% 1.400 1.153,1 1.200 1.000 800 615,7 600 400 200 0 2012 2011 Gas sold on trading and wholesaling activities Companies consolidated a
Slide 48: Revenues bridge
Revenues bridge Revenues bridge (Thousand of Euro) ∆ = -21.203 1.500.000 -1,9% 83.519 1.200.000 1.099.241 40.732 1.670 1.078.038 -147.125 900.000 600.000 300.000 0 2011 Revenues Revenues Revenues Other 2012 from gas from gas from revenues sales to end trading and electricity customers wholesaling sa
Slide 49: EBITDA bridge
EBITDA bridge EBITDA bridge (Thousand of Euro) ∆ = +9.466 140.000 +10,2% 120.000 3.546 15.899 102.635 100.000 93.169 -9.979 80.000 60.000 40.000 20.000 0 EBITDA 2011 Gross margin Gas distribution Other changes EBITDA 2012 on gas sales tariff revenues Page 49
Slide 50: Gas distribution tariff revenues
Gas distribution tariff revenues (Thousand of Euro) 2012 2011 Chg Chg % Tariffs applied to sales companies 63.708 63.547 161 +0,3% Equalization amount (+ / -) 6.523 3.138 3.385 +107,8% Gas distribution tariff revenues 70.231 66.685 3.546 +5,3% The increase of gas distribution tariff revenues (+ Euro
Slide 51: Gross margin on gas sales
Gross margin on gas sales (Thousand of Euro) 2012 2011 Chg Chg % Revenues from gas sales to end customers 713.446 630.068 83.379 +13,2% Revenues from gas trading and wholesaling 175.506 322.631 (147.125) -45,6% Revenues from gas sales 888.953 952.698 (63.746) -6,7% (Gas purchase costs) (689.410) (77
Slide 52: Other net operating costs
Other net operating costs Other net operating costs Change of other net operating costs: -€10,0M p Net operating costs of new consolidation area: -€0,7M p Increase of net operating costs of 2011 consolidation area: -€9,3M of which: Increase of gas distribution concession fees: -€2,9M Increase of per
Slide 53: Capex and length of gas distribution network
Capex and length of gas distribution network Capex (*) and lenght of gas distribution network ∆ = -18.670 60.000 -44,7% 16% 50.000 22% 41.757 40.000 30.000 11% 23.087 (**) 20.000 10.000 (Thousand 8% of Euro) 0 2012 2011 12% ∆ = -70 -0,8% 11.000 31% 8.561 8.631 8.800 Connection of end customers to di
Slide 54: Net financial position and cash flow
Net financial position and cash flow ∆ = +31,1 60 (Million of Euro) -15,5% 40 20 0 -20 -40 -60 -80 -100 -120 +57,9 -140 -160 +20,4 -180 -15,5 +6,5 -170,1 -200 -30,4 -4,2 -3,7 -220 -201,2 -240 -260 -280 31/12/2011 C ash flow C apex C hange in net C hange in net C hange in Firm NFP from firm 31/12/201
Slide 55: Contents: 2008-2012 financial comparison
Contents ANNEXES FY 2012 financial results 2008-2012 financial comparison → 2008-2012 income statement .................................................................... Pag. 56 → Balance sheet ............................................................................................ Pag. 57 1st
Slide 56: 2008-2012 income statement
2008-2012 income statement (Thousand of Euro) 2012 2011 2010 2009 2008 cagr 08-12 Revenues 1.078.038 1.099.241 855.884 764.151 824.672 6,9% (Cost of raw materials and consumables) (780.822) (844.268) (660.030) (617.384) (703.872) 2,6% (Cost of services) (152.434) (124.572) (87.528) (58.888) (43.377)
Slide 57: Balance sheet
Balance sheet (Thousand of Euro) 31/12/2012 31/12/2011 31/12/2010 31/12/2009 * 31/12/2008 * cagr 08-12 Tangible assets 40.534 61.983 43.814 329.970 319.279 -40,3% Non tangible assets 450.457 459.046 410.765 114.542 92.776 48,4% Other fixed assets 29.817 26.741 16.133 15.418 13.860 21,1% Fixed assets
Slide 58: Contents: 1stH 2013 financial results
Contents ANNEXES FY 2012 financial results 2008-2012 financial comparison 1stH 2013 financial results → 1stH 2013 income statement ..................................................................... Pag. 59 → Balance sheet ...........................................................................
Slide 59: 1stH 2013 income statement
1stH 2013 income statement (Thousand of Euro) 1stH 2013 1stH 2012 Chg Chg % Revenues 518.173 556.975 (38.802) -7,0% (Cost of raw materials and consumables) (350.969) (407.551) 56.582 -13,9% (Cost of services) (70.608) (78.612) 8.004 -10,2% (Cost of personnel) (13.743) (12.959) (784) +6,0% (Other ope
Slide 60: Balance sheet
Balance sheet (Thousand of Euro) 30/06/2013 31/12/2012 Chg Chg % Tangible assets (*) 39.745 40.534 (789) -1,9% Non tangible assets (*) 447.516 450.457 (2.941) -0,7% Other fixed assets 30.307 29.817 490 +1,6% Fixed assets 517.568 520.808 (3.240) -0,6% Operating current assets 222.281 363.436 (141.155
Slide 61: Volumes of gas distributed
Volumes of gas distributed Volumes of gas distributed (Million of standard cubic meters) ∆ = -17,5 ∆ = +7,3 900 -3,4% 900 +7,8% 800 800 700 700 600 516,6 600 499,1 500 500 400 400 300 300 200 200 100,9 93,5 100 100 0 0 1stH 2013 1stH 2012 1stH 2013 1stH 2012 Gas distributed Gas distributed Companies
Slide 62: Volumes of gas sold to end customers
Volumes of gas sold to end customers Volumes of gas sold to end customers (Million of standard cubic meters) ∆ = -112,4 ∆ = -30,7 -17,0% -9,2% 900 900 800 800 700 661,5 700 600 549,1 600 500 500 400 400 331,7 301,0 300 300 200 200 100 100 0 0 1stH 2013 1stH 2012 1stH 2013 1stH 2012 Gas sold to end c
Slide 63: Volumes of gas sold on trading and wholesaling activities
Volumes of gas sold on trading and wholesaling activities Volumes of gas sold on trading and wholesaling activities (Million of standard cubic meters) ∆ = -134,5 -100,0% 700 600 500 400 300 200 134,5 100 0 0 1stH 2013 1stH 2012 Gas sold on trading and wholesaling activities Companies consolidated at
Slide 64: Revenues bridge
Revenues bridge Revenues bridge (Thousand of Euro) ∆ = -38.802 800.000 -7,0% 700.000 600.000 556.975 67.153 518.173 500.000 -39.051 -39.526 -27.377 400.000 300.000 200.000 100.000 0 1stH 2012 Revenues Revenues Revenues Other 1stH 2013 from gas from gas from revenues (*) sales to end trading and elec
Slide 65: EBITDA bridge
EBITDA bridge EBITDA bridge (Thousand of Euro) ∆ = +21.229 100.000 +42,0% 90.000 80.000 1.084 273 2.523 71.719 70.000 17.348 60.000 50.491 50.000 40.000 30.000 20.000 10.000 0 EBITDA 1stH Gross margin Gross margin Gas Other EBITDA 1stH 2012 on gas sales on electricity distribution changes 2013 sales
Slide 66: Gas distribution tariff revenues
Gas distribution tariff revenues (Thousand of Euro) 1stH 2013 1stH 2012 Chg Chg % Tariffs applied to sales companies 36.519 34.896 1.623 +4,6% Equalization amount (+ / -) (2.044) (695) (1.349) +194,3% Gas distribution tariff revenues (*) 34.475 34.202 273 +0,8% The increase of gas distribution tarif
Slide 67: Gross margin on gas sales
Gross margin on gas sales (Thousand of Euro) 1stH 2013 1stH 2012 Chg Chg % Revenues from gas sales to end customers 396.151 428.221 (32.070) -7,5% Revenues from gas trading and wholesaling - 39.526 (39.526) -100,0% Revenues from gas sales 396.151 467.747 (71.596) -15,3% (Gas purchase costs) (262.326
Slide 68: Gross margin on electricity sales
Gross margin on electricity sales (Thousand of Euro) 1stH 2013 1stH 2012 Chg Chg % Revenues from elecricity sales 49.119 73.050 (23.931) -32,8% (Elecricity purchase costs) (29.846) (46.003) 16.157 -35,1% (Distribution costs) (16.677) (25.536) 8.859 -34,7% Gross Margin on electricity sales (*) 2.596
Slide 69: Other net operating costs
Other net operating costs (Thousand of Euro) 1stH 2013 1stH 2012 Chg Chg % Other Revenues 20.684 17.278 3.406 +19,7% Other costs of raw materials and services (37.160) (37.061) (99) +0,3% Cost of Personnel (13.743) (12.959) (784) +6,0% Other Net Operating Costs (*) (30.220) (32.742) 2.523 -7,7% Decr
Slide 70: Capex and length of gas distribution network
Capex and length of gas distribution network Capex (*) and lenght of gas distribution network ∆ = +848 15.000 +8,6% 16% 12.000 10.709 9.861 (** ) 2% 9.000 6.000 47% 3.000 (Thousand of Euro) 0 24% 1stH 2013 1stH 2012 ∆ = +51 +0,5% 11.000 4% 7% 8.612 8.561 8.800 Connection of end customers to distribu
Slide 71: Net financial position and cash flow
Net financial position and cash flow ∆ = +77,4 60 (Million of Euro) -45,5% 40 20 0 -20 -40 +109,5 -60 -80 -100 -26,9 +45,4 -92,7 -120 -140 -6,3 -160 -180 -170,1 -44,3 -200 -220 -240 -260 -280 31/12/2012 C ash flow C apex C hange in net C hange in net C hange in 30/06/2013 working capital working cap
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