Italgas Spa · MIL:IG

Italgas Spa — FY2019 Earnings Presentation

30 slides from Italgas Spa's earnings presentation, Mar 11, 2020

  1. Slide 1: FY 2019 Consolidated Results

    FY 2019 Consolidated Results 11th March 2020, Milan

  2. Slide 2: 2019 … growing 3rd consecutive year

    2019 … growing 3rd consecutive year 2019 results came ahead of targets/guidance Digital transformation is a value creation We propose a DPS Sardinia ~ 590km of pipelines completed as of now* €0.256/share Toscana Energia and 3 tenders won +9,4% vs 2018 +23.1% vs 2017 Strong financial structure - best

  3. Slide 3: Impressive 2019 Capex

    Impressive 2019 Capex Sardinia Other 11,5% 13,2% Total network capex 63% of the total ~ 2,057,400 new 933 km of new lines smart meters built of which 440 km installed ** Metering €740 mn* in Sardinia at the end 24,3% of 2019 +41.6% yoy Development, maintenance Digitizati… 45,7% * It includes €24.7mn

  4. Slide 4: Sardinia - a strategic role

    Sardinia - a strategic role Today Tomorrow Potential market # customers ~ 45,000 ~200,000 ~ 2,000 Network km ~ 1,100 FULLY DIGITIZED Concessions LPG / LPG air LNG\Natural Gas Until natural gas is not in operation available in Sardinia Fuel Under LNG\Natural Gas construction n.a. ~ 590 Km completed a

  5. Slide 5: The digital transformation … speeding up

    The digital transformation … speeding up Asset Process (staff&ops) Workforce Digitization areas  Advanced Analytics /  Mixed Reality  Industrial IoT Machine Learning  Wearables Mixed Reality  Advanced Analytics  Bots / Digital  Bots / Digital Assistants / Big Data Assistants  Blockchain  60

  6. Slide 6: Control Room: new tools for emergency intervention

    Control Room : new tools for emergency intervention  Real-time network monitoring in enhanced Control Room Summary of alarms on the network  New network analytics and prediction tools for safety and efficiency Latest triggered alarms on the network  Emergency calls processing improvement and fast

  7. Slide 7: New remote construction sites supervision

    New remote construction sites supervision  New operating model for worksites supervision and progress tracking for continuous feedback from external contractors  Remote monitoring of safety and quality protocols  Automatic recognition of technical specs Main benefits  Reduction of validation pro

  8. Slide 8: New technologies and tools…. to scale up in 2020

    New technologies and tools…. to scale up in 2020 Augmented Reality devices for Enhanced dynamic dispatching remote support on the field of workers on the field  Vocal assistant in step-by-step  End-users experience guided procedures for enhancement through real-time maintenance monitoring and noti

  9. Slide 9: New regulatory period started in 2020

    New regulatory period started in 2020 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 V Regulatory Period (parameter set: beta, xfactor, reference opex) I WACC Period II WACC Period (parameters set: risk free rate, country risk premium, (parameters set: risk free rate, country

  10. Slide 10: Lean Corporate

    Lean Corporate 50% Equity method consolidation 45% Full consolidation perimeter 51.85% 100% 100% 100% 50.66% 51.85% 100% Corporate simplification completed 10 /

  11. Slide 11: 2019 … growing 3rd consecutive year

    2019 … growing 3rd consecutive year vs 2018 vs 2018 € mn  Revenue €1,257.9 6.8%  Operating cash €697.2 -3.0% flow  EBITDA Adj. €907.5 7.8%  Capex €740.0 41.6%  EBIT Adj €516.0 13.2%  Consolidated Net Debt * €4,410.6 596.3 mn  Net Profit Adj (after minorities) €345.2 9.4% (*) Excluding 74.7 mn

  12. Slide 12: Income Statement

    Income Statement 2018 2019 Change €mn Revenues 1,178.1 1,257.9 79.8 Operating expenses - 338.6 - 350.4 - 11.8 EBITDA 839.5 907.5 68.0 EBITDA adjusted 842.0 907.5 65.5 7.8% Depreciation & amortisation - 386.0 - 391.5 - 5.5 EBIT 453.5 516.0 62.5 EBIT adjusted 456.0 516.0 60.0 13.2% Net interest income

  13. Slide 13: Consolidated Revenues

    Consolidated Revenues €mn 2018 2019 Change Regulated revenues 1,145.0 1,198.0 53.0 Distribution 1,007.3 1,100.2 92.9 Tariff contribution for meters replacement 71.5 22.9 - 48.6 Other distribution revenues 66.2 74.9 8.7 Other revenues 33.1 59.9 26.8 TOTAL REVENUES 1,178.1 1,257.9 79.8 13 /

  14. Slide 14: Consolidated Revenues

    Consolidated Revenues €mn 11.1 32.5 (48.6) 34.5 50.4 1,257.9 1,178.1 2018 Incremental Toscana M&A Other Meters 2019 revenues distribution Energia replacement revenues revenues 4Q impact 14 /

  15. Slide 15: Consolidated Opex

    Consolidated Opex 2018 2019 Change €mn Gas Distribution activities 318.7 322.7 4.0 Fixed costs 246.7 240.5 - 6.2 Net labour cost 140.9 141.2 0.3 Net external cost 105.8 99.3 - 6.5 Variable costs 4.8 6.2 1.4 Other costs 10.2 5.5 - 4.7 Tee 2.3 7.8 5.5 Concessions fees 54.7 62.7 8.0 Other activities 19

  16. Slide 16: Consolidated Opex

    Consolidated Opex €mn 5.5 (12.2) 16.3 4.7 350.4 336.1 Total Costs Toscana M&A Tee Net Total Costs adj. 2018 Energia efficiencies 2019 16 /

  17. Slide 17: Ebit adj: +13.2% vs 2018

    Ebit adj: +13.2% vs 2018 €mn (5.5) 65.5 516.0 456.0 Ebit adj 2018 Ebitda adj D&A Ebit 2019 adj 17 /

  18. Slide 18: Net income adj: +9.4% vs 2018

    Net income adj: +9.4% vs 2018 Tax rate 26.7% €mn (4.0) (5.1) (14.8) 60.0 (6.4) 351.6 345.2 315.5 Net income Ebit adj Net Financial Income Income Net income Of which Net income adj Expenses from Taxes on adj minorities adj after 2018 adj Associates EBT adj 2019 minorities adj 2019 2019 Adjusted Net F

  19. Slide 19: Consolidated Cash Flow

    Consolidated Cash Flow €mn 28.8 244.8 (590.7) 697.2 423.6 35.8 (121.4) 106.5 (189.3) (186.9) (18.5) Net income Depreciation Change in Cash flow Net capex Free Cash Medea-Gaxa M&A Dividends Change in & other working from flow before disposal (*) Net Debt items capital operation M&A (*) €189.3 mn Divi

  20. Slide 20: Consolidate Net Debt

    Consolidate Net Debt €mn 409.4 186.9 4,410.6 3,814.3 2018 Net Debt * Cash flow ** Toscana Energia debt Net debt * consolidation *** * Excluding financial debts for operating leases (IFRS 16) ** including Toscana Energia 4Q cash flow 20 / *** Debt at 30 September 2019

  21. Slide 21: Debt Structure: solidity and efficiency

    Debt Structure: solidity and efficiency Buyback Further lengthen debt Dec. 2019 900 New Bond maturity in 4Q thanks to Dec. 2019 Gross Debt 800 liability management 700 • Bonds Buyback 600 9% 500  € 481.6 mn coupon 0.5%, 400 19% maturity 2022 300 200  € 169.1 mn coupon 100 1.125%, maturity 2024 0 7

  22. Slide 22: Balance Sheet

    Balance Sheet 2018 2019 €mn Change Dec, 31st Dec, 31st Net invested capital 5,193.5 6,280.2 1,086.7 Fixed capital 5,284.1 6,335.0 1,050.9 Tangible fixed assets 259.2 350.0 90.8 Net intangible fixed assets 4,982.8 6,176.1 1,193.3 Net payables investments - 133.1 - 225.0 - 91.9 Equity-accounted and ot

  23. Slide 23: Dividend Policy … delivers additional value to shareholders

    Dividend Policy … Organic Capex and M&A Digital Implies overall Transformation DPS 2019 cash DPS proposal:* payment 0.256 € of 207.1 € mn Operational + 9.4% vs 2018 in 2020 excellence Solid balance sheet ...delivers additional value to shareholders 23 / * Payable on May 20th 2020

  24. Slide 24: Q&A

    WG italgas Q&A

  25. Slide 25: Annexes

    WG italgas Annexes

  26. Slide 26: The leading Italian natural gas distributor

    The leading Italgas Italian natural gas distributor in Italy Base line Of w affiliates Network length 71,761 km 1,259 km Municipalities 1,830 14 Redelivery Points 8.597 mn 0.133 mn Market Share1 35% 0.1% Gas distributed2 8.9 Bcm 0.1 Bcm Employees 4,140 44 Note: (1) Calculated by redelivery points (2

  27. Slide 27: Income Statement

    Income Statement 2018 2019 Of whichToscana 4th Quarter Change Energia: 4th Quarter €mn Revenues 293.5 341.0 47.5 34.8 €mn Operating expenses - 83.2 - 94.2 - 11.0 -4.7 €mn EBITDA 210.3 246.8 36.5 Depreciation & amortisation - 90.7 - 107.7 - 17.0 -12.4 €mn EBIT 119.6 139.1 19.5 Net interest income (ex

  28. Slide 28: Income Statement

    Income Statement 2019 2019 2019 2019 €mn 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Revenues 310.8 298.6 307.5 341.0 Operating expenses - 91.6 - 83.9 - 80.7 - 94.2 EBITDA 219.2 214.7 226.8 246.8 Depreciation & amortisation - 95.6 - 96.7 - 91.5 - 107.7 EBIT 123.6 118.0 135.3 139.1 Net interest i

  29. Slide 29: 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

  30. Slide 30: FY 2019 Consolidated Results

    FY 2019 Consolidated Results 11th March 2020, Milan

Italgas — FY2019 Earnings Presentation on 6ix