Ascopiave S.p.a. · MIL:ASC
Ascopiave — Investor Presentation (May 2013)
68 slides from Ascopiave's investor presentation, May 9, 2013
Slide 1: Group Presentation
Group Presentation Milan, May 9th 2013 Page 1
Slide 2: Contents
Contents Business Overview ............................................................................................ Pag. 3 Gas distribution ................................................................................................. Pag. 17 Gas sales ........................................
Slide 3: Contents: Business Overview
Contents Business Overview → Group profile ..................................................................................................... Pag. 4 → Competitive environment: the gas chain in Italy ................................................ Pag. 5 → Business activities and main financial d
Slide 4: Group profile
Group profile p Ascopiave Group operates mainly in the gas sector p Its principal business activities are the distribution and sale of gas to end customers p In terms of both customer base and quantities of gas sold Ascopiave is currently one of the leading national players in the gas sector The Gro
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: Business activities and main financial data
Business activities and main financial data Main business activities Other business activities Gas sales Gas Heating Gas Electricity to end trading and services Cogeneration distribution sales customers wholesales management 2012 MAIN FINANCIAL DATA* EBIT 2012 BREAKDOWN Distribution Sales 21,0% Grou
Slide 7: Ascopiave Group structure as of December 31st 2012
Ascopiave Group structure as of December, 31st 2012 57% 89% 1% 51% 1% 51% 1% 100% 80% 100% 100% 100% 49% 100% 48,999% 100% 100% 100% Gas distribution (in liquidation) 48,86% Gas sales 30,94% (in liquidation) Other activities Page 7
Slide 8: Main operating data
Main operating data No. of inhabitants potentially served (mln) > 1.3 No. of users connected to the distribution network 499,094 GAS DISTRIBUTION No. of users - companies consolidated integrally 404,130 2012 KEY FIGURES* No. of users - companies consolidated proportionally 94,964 Length of gas distr
Slide 9: Use of IPO proceeds (1)
Use of IPO proceeds (1) 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 acquisit
Slide 10: Use of IPO proceeds (2)
Use of IPO proceeds (2) As described in the following slide, since the IPO Ascopiave has completed the acquisition of twelve firms / companies, three of which active in gas distribution business and nine active in gas and electricity sales business, investing 163.4 million of Euro. Moreover Ascopiav
Slide 11: Equity story after IPO (2007-2012)
Equity story after IPO (2007-2012) Coverage of SIN IT Long-Term Gas Supply losses and shareholders Agreement between SIN resolution for company IT and Gazprom (2009-2018) voluntatary liquidation. New Acquisitions: Increase of capital Current capital stake in Edigas DG (100%) stake in Sinergie SIN IT
Slide 12: Growth in the gas down-stream market in 2007–2012 (1)
Growth in the gas down-stream market in 2007–2012 (1) Number of gas sale customers ∆ = +538,022 +171,7% 49.435 851.377 76.751 -8.296 ITALY 62.287 22.720 31.987 2.200 26.708 244.777 29.453 313.355 Ascopiave Bimetano Estenergy ASM Set Edigas Due Metano Nove Veritas Energia Pasubio Servizi Blue Meta Am
Slide 13: Growth in the gas down-stream market in 2007–2012 (2)
Growth in the gas down-stream market in 2007–2012 (2) Volumes of gas sold (scm/mln) (*) ∆ = +1,574 +247,5% 616 2.209 ITALY 35 124 95 103 80 10 70 361 79 636 Ascopiave Bimetano Estenergy ASM Set Edigas Due Etra Energia Veritas Pasubio Servizi Blue Meta Amgas Blu Wholesaling Ascopiave 2006 Servizi (*)
Slide 14: Growth in the gas down-stream market in 2007–2012 (3)
Growth in the gas down-stream market in 2007–2012 (3) Number of gas users and RAB (Regulatory Asset Base) 2006 2011 * ∆ = +179,294 Lenght of gas distribution network 6,360 km 8,078 km +56,1% Uncapped RAB 223 mln 375 mln Uncapped RAB - before IPO consolidation area 317 mln Uncapped RAB - companies ac
Slide 15: Market positioning (1)
Market positioning (1) No. of gas sale customers in “Triveneto” No. of customers Pos. Operator % in “Triveneto” 1 Ascopiave (*) 685.000 26,1% 2 ENI 500.000 19,1% 3 Enel 160.000 6,1% 4 Trentino Servizi 130.000 5,0% 5 AGSM Verona 125.000 4,8% 6 AIM Vicenza 115.000 4,4% 7 AMGA Udine 100.000 3,8% 8 E.On
Slide 16: Market positioning (2)
Market positioning (2) Volumes of gas sold in Italy (a) Vol. of gas sold in Ranking Group % Italy (Mcm) 1 Eni 18,237 26.8% 2 Enel 8,035 11.8% 3 Edison 7,403 10.9% 4 Gdf Suez 4,847 7.1% 5 A2A 2,915 4.3% 6 E.On 2,708 4.0% 7 Hera 2,607 3.8% 8 Iren 2,317 3.4% 9 Ascopiave Group (b) 1,744 2.6% 10 Royal Du
Slide 17: Contents: Gas distribution
Contents Gas distribution → Expiring date of the ongoing gas distribution concessions ................................ Pag. 18 → Minimum territorial district awarding the next gas distribution concessions ....... Pag. 22 → Work force of the outgoing concession holder ................................
Slide 18: Expiring date of the ongoing gas distribution concessions (1)
Expiring date of the ongoing gas distribution concessions (1) Regulation concerning the expiring date of the ongoing gas distribution concessions has been modified several times during the last ten years: p Lgs. D. 164/2000 (so called Letta Decree) p Art. 1 Com. 69, L. 239/2004 (so called Marzano La
Slide 19: Expiring date of the ongoing gas distribution concessions (2)
Expiring date of the ongoing gas distribution concessions (2) About 44% of concessions from shareholder municipalities (a) (b) Number Populations Network (km) Awards from Asco Holding member municipalities 92 653.520 3.938 Concessions from other municipalities 117 679.446 4.542 Total 209 1.332.966 8
Slide 20: Expiring date of the ongoing gas distribution concessions (3)
Expiring date of the ongoing gas distribution concessions (3) New regulation provided by the Ministry of Economic Development (Decree January, 19th 2011 and Decree n. 226 November, 12th 2011) established that: p gas distribution concession must be awarded only via minimum territorial district public
Slide 21: Expiring date of the ongoing gas distribution concessions (4)
Expiring date of the ongoing gas distribution concessions (4) The following chart illustrates the Ascopiave Group gas users segmentation by minimum territorial district deadline: p 84.1% of users in Minimum territorial District with deadline beyond January, 1st 2015 p Treviso 2 and Treviso 1, summin
Slide 22: Minimum territorial districts awarding the next gas distribution concessions
Minimum territorial districts awarding the next gas distribution concessions Minimum territorial district - joining a pool of municipalities with a minimum number of users. Defined by the Ministry of Economic Development (jointly with other public authorities). Tasks: 1) Reducing the number of tende
Slide 23: Work force of the outgoing concession holder
Work force of the outgoing concession holder Employment of the work force of the outgoing concession holder – in the case it loose public tender awarding the concession Tasks: 1) Protecting the work force from unemployment risk 2) Continuity in the operating management practice Decree issued by Mini
Slide 24: Regulation of the call of tenders (1)
Regulation of the call of tenders (1) Regulation of the “call of tenders” provided by the Ministry of Economic Development (jointly with other public authorities). Main issues: 1) Value of the assets to be paid to the outgoing concession holder 2) Standards of economic and technical offer 3) Timing
Slide 25: Regulation of the call of tenders (2)
Regulation of the call of tenders (2) (2) 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 custo
Slide 26: Regulation of the call of tenders (3)
Regulation of the call of tenders (3) 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 27: D.Lgs. n. 93/11 – Reimbursement at the end of the concession period
D.Lgs. n. 93/11 – Reimbursement at the end of the concession period Article 24 of D.Lgs n. 93/11 provide a regulation about the Value of the Assets to be paid to the concession holder at the end of the concession awarded via minimum territorial district public tenders: 1) Value of the assets to be r
Slide 28: A new competitive scenario in the gas distribution sector
A new competitive scenario in the gas distribution sector Because of the new regulation, the competitive scenario in the gas distribution sector is markly changed: p Much less importance of the economic component of the offer (discount on tariffs and fee to be paid to municipalities). p Much more im
Slide 29: 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 30: Agreement to evaluate Residual Industrial Value of the Distribution Network
Agreement to evaluate Residual Industrial Value of the Distribution Network Agreement with 93 municipalities regarding a procedure to evaluate the Residual Industrial Value (RIV) of the Distribution Network p RIV: the amount that Ascopiave will be entitled to receive at the end of the contract perio
Slide 31: Tariff regulation: third regulatory period
Tariff regulation: third regulatory period Third regulatory period p Tariff regulation is provided by AEEG (national authority for the gas and electricity sectors) p Ongoing regulatory period: 2009-2012 p Evaluating system for the Regulatory Asset Base (Capital Invested): based on the network book v
Slide 32: 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 33: 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 34: Contents: Gas sales
Contents Gas sales → Volumes of gas sold by the Group ..................................................................... Pag. 35 → Gas sales to end customers: market segmentation and selling prices ............... Pag. 36 → Gas selling price to domestic end customers .............................
Slide 35: Volumes of gas sold by the Group
Volumes of gas sold by the Group Volumes of gas sold by the Group * 2012 data (scm/million) 2.000 To end customers of companies 72.1% 1,059.1 1.800 consolidated integrally (a) 1.600 1.400 1.200 To end customers of companies 1.000 534.4 1.594 27.9% consolidated proportionally 800 (b) 600 400 616 200
Slide 36: 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 37: Gas selling price to domestic end customers (1)
Gas selling price to domestic end customers (1) Gas price applicated to domestic end customers (protected market) is determinated by AEEG and is articolated in the following components, each of them destinated to remunerate a particular activity of the gas chain: CCI Tariff component relative to who
Slide 38: Gas selling price to domestic end customers (2)
Gas selling price to domestic end customers (2) P P == CCI CCI ++ QTI QTI ++ QS QS ++ QOA QOA ++ TD TD ++ QVD QVD ++ GCT GCT ++ VAT VAT CCI = wholesale cost of gas TD = Gas distribution tariff QTI = Gas transportation cost via national network QVD = Gas retail sale cost QS = storage cost of gas GCT
Slide 39: Gas purchasing costs
Gas purchasing costs Gas purchasing costs p Gas purchasing costs are negotiated on a free market p Incumbent shippers have strong market position p The shipping company Sinergie Italiane (30.94% Ascopiave) is the main gas supplier of the Group Uses Sourcing Actually: annual contracts (thermal year)
Slide 40: 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 41: Contents: Sinergie Italiane
Contents Sinergie Italiane → Sinergie Italiane ................................................................................................. Pag. 42 Page 41
Slide 42: 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 43: 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 44: 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 45: Contents: Strategy
Contents Strategy → Strategic guidelines and objectives .................................................................... Pag. 46 → Growth in the down-stream market .................................................................... Pag. 47 Page 45
Slide 46: 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 47: 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 48: Contents: Dividends
Contents Dividends → Dividend policy ................................................................................................. Pag. 49 Page 48
Slide 49: 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 50: Contents: Financials (FY 2012)
Contents Financials (FY 2012) FY 2012 financial results → FY 2012 income statement ........................................................................ Pag. 51 → Balance sheet ............................................................................................ Pag. 52 → Volumes of gas di
Slide 51: 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 52: 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 53: 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 54: 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 55: 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 56: 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 57: 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 57
Slide 58: 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 59: 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 60: 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 61: 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 62: 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 63: Contents: 2008-2012 financial comparison
Contents Financials (FY 2012) FY 2012 financial results 2008-2012 financial comparison → 2008-2012 income statement .................................................................... Pag. 64 → Balance sheet ...........................................................................................
Slide 64: 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 65: 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 66: 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 67: Main financial ratios
Main financial ratios Ascopiave Group main financial ratios FINANCIAL RATIOS 2012 2011 2010 2009 2008 2007 2006 AVG 06-12 Capital turnover 1,9 1,9 1,8 1,7 2,0 0,9 1,1 1,6 Return on sales 6,8% 6,1% 6,5% 5,4% 4,2% 7,5% 9,2% 6,5% Return on investment (ROI) 13,1% 11,8% 11,7% 9,1% 8,5% 7,1% 10,4% 10,2% F
Slide 68: Financial leverage comparison
Financial leverage comparison Financial leverage comparison LOCAL UTILITIES (**) FINANCIAL RATIOS (*) (Average data) ASCOPIAVE VAR. Financial leverage 1,36 0,44 -0,92 D/D+E 57,1% 30,4% -26,7% E/D+E 42,9% 69,6% 26,7% Ascopiave financial leverage (0.44) is lower than those of the Italian listed compet