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Italgas presents the 2024-2030 Strategic Plan

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€15.6 billion of investment providing the country the European champion capable of building the gas industry of the future. These include the acquisition of 2i Rete Gas and the widespread application of AI – across gas, water, energy efficiency and information technology – which is expected to drive double-digit net income growth throughout the Plan period. The floor of the dividend policy to 2026 has also been improved. 

Milan, October 7, 2024 – The CEO of Italgas, Paolo Gallo, today presents the Group’s Strategic Plan for the period 2024-2030 to analysts and investors, approved by the Company’s Board of Directors chaired by Benedetta Navarra.

€15.6 billion are the expected investments over the plan period, with an increase of €7.5 billion (+92% compared to the previous plan) and aimed at the acquisition of 2i Rete Gas, interventions for the development of gas distribution in Italy and Greece, strengthening the presence in the water sector, and accelerating the growth in energy efficiency, with a strong commitment to achieving EU climate targets.

Italgas emphasizes its commitment to consolidating the gas distribution sector in Italy with the aim of multiplying synergies to ensure significant benefits for families and businesses in terms of safety, efficiency, service quality, decarbonization of end uses, and costs. The use of artificial intelligence across all Group activities will also enable a new phase of digital transformation, accelerating the ecological transition.

The Group will continue to benefit from a solid and efficient financial structure, with a commitment to maintaining the current credit rating. The expected synergies and operational efficiencies allow for a forecast of double-digit net income growth over the plan period1. Therefore, it has been possible to raise the floor of the dividend policy until 2026, ensuring a growth rate of 5% annually starting from the dividend 2023 of €0.352 per share2, while also confirming the 65% payout.

Highlights

  • Italgas is the European leader in gas distribution, with unique capabilities of innovation, digitalization and investment.
  • Acquisition of 2i Rete Gas for €5.3 billion of enterprise value, with a 4% premium on the 2025 expected RAB and closing expected within the 1H 2025.
  • Financing of the transaction through debt and a €1 billion capital increase, aimed at preserving the credit rating.
  • €15.6 billion of total investments for the acquisition of 2i Rete Gas, and for the development, digitalization, and repurposing of infrastructures in Italy and Greece.
  • €200 million in synergies from efficiencies, cost reductions, and AI, in addition to €80 million revenues from incremental investments in digitization on 2i Rete Gas network by 2030.
  • EPS accretion starting from 2026, including the expected capital increase, reaching approximately 15% in 2029.
  • Double-digit net income growth anticipated by 2030.
  • Dividend policy: confirmed the 65% payout and increased floor to 5% annual growth, now based on the 2023 DPS.
  • Confirmation of ESG targets also including the new perimeter and Net Zero goal by 2050.
  • Strong focus on people and the integration of resources from 2i Rete Gas, emphasizing training and promoting diversity, equal opportunities, and inclusion.

Italgas CEO Paolo Gallo stated:

“The Strategic Plan 2024-2030 will go down in Italgas’ history as the blueprint for creating the European champion in gas distribution, further reinforcing our commitment to the digital transformation of infrastructure, benefiting the entire country.

The new scale of the Group, combined with innovation and digital transformation, is the decisive factor in ensuring we meet the targets of the energy transition, the security of supply and the sustainability of energy costs for individuals and businesses.

An investment of €15.6 billion will provide a strong boost to our growth trajectory, with the largest share once again allocated to the development, digitization, and repurposing of the gas distribution network in both Italy and Greece. Our commitment to the widespread use of Artificial Intelligence will enable us to enter a new phase of digital transformation.

Digital transformation remains the primary strategic lever also for strengthening our activities in the water sector and energy efficiency. With €750 million, we will continue to work towards enhancing our role as a key player in water — which has long suffered from a lack of adequate smart investments in networks — and to grow in energy efficiency as an essential tool for achieving energy transition goals.

The figures in this Plan, with an average annual growth of 13% in EBITDA and net profit by 2030, demonstrate how the extraordinary capabilities of the women and men of Italgas and 2i Rete Gas can create value for shareholders and all stakeholders, leveraging efficiency, innovation, and sustainability.”

1Excluding the impact of the Purchase Price Allocation (PPA).

2Compared to the previous floor of 4% annual increase of 2022 dividend.

Changes to Italgas’ calendar of corporate events 2024 Presentation of the 2024-2030 Strategic Plan set for 7 October

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Milan, 5 October 2024 – Italgas announces that the publication of the press release relating the 2024-2030 Strategic Plan, initially scheduled for 12 June 2024, is now set for 7 October 2024, before the opening of the financial markets.

Consequently, the conference call to present the Plan to investors and financial analysts will be held on 7 October 2024 at 3 pm CEST at Italgas headquarters via Carlo Bo 11 – Milan.

An invitation with details will follow.

Signed the sale and purchase agreement for the acquisition of 2i Rete Gas

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Milan, 5 October 2024 – Italgas announces that F2i SGR S.p.A. and Finavias S.à r.l. accepted the binding offer relating to the purchase of their shareholding in 2i Rete Gas S.p.A. and the related Share Purchase Agreement (SPA) has been signed. The positive outcome follows the negotiations disclosed to the market on May 13, 2024.

“With this transaction – commented Italgas CEO Paolo Gallo – Italgas Group marks a historic milestone in its long and prestigious history. The acquisition of 2i Rete Gas allows us to become the leading operator in Europe in the gas distribution sector, after being recognized as a global benchmark in terms of innovation and digitalization.

As the leading operator in Italy and Greece, Italgas — through this transaction — reinforces its commitment to achieving decarbonization goals, with resilient infrastructure and sustainable energy costs. Extending our digital applications across the entire network and adopting advanced technologies such as artificial intelligence will enable us to monitor and manage our infrastructure in real-time, improving operational efficiency while increasing safety and reliability. This will create value for our shareholders and all our stakeholders. We look forward with confidence to the next steps of the transaction to complete this significant project, in line with our strategic vision and the needs of the country within the framework of European goals.”

2i Rete Gas overview

2i Rete Gas is the second-largest gas distribution operator in Italy, present across most of the country, serving 4.9 million customers. In 2023 it recorded adjusted revenues of €815.0 million, an adjusted EBITDA of €546.3 million, an adjusted EBIT of €317.7 million, and an adjusted net profit of €181.3 million. In 2023 investments amounted to €372.2 million.

Terms of the Offer

The consideration (equity value) of the transaction is 2.060 billion euros. The net financial debt and other net liabilities as of December 31, 2023, amount to 3.246 billion euros.

The closing of the transaction is expected within the first half of 2025, subject to obtaining the necessary regulatory approvals.

Financing

Italgas will meet its financial needs through a “bridge” financing initially underwritten by J.P. Morgan and syndicated to a pool of lending banks including Banco BPM, BofA Securities, Citi, J.P. Morgan, Morgan Stanley, and Société Générale. This will also be refinanced through a rights issue amounting to 1 billion euros, aimed at maintaining the current credit rating profile. The terms and conditions of the capital increase will be defined later.

Advisors

J.P. Morgan acts as the financial advisor in the context of the transaction. Legance – Avvocati Associati serves as the legal advisor, and the firm Foglia & Partners is responsible for tax matters. J.P. Morgan, BofA Securities, and Jefferies have provided a fairness opinion to the Board of Directors of Italgas in relation to the transaction.

Italgas inaugurates the new Plant and Network Command and Control Center in Florence

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Florence, 3 October 2024 – Italgas today inaugurated the new Plant and Network Command and Control Center in Florence, an infrastructure based on a complex technological architecture that allows for the remote monitoring and management of the 74,000 kilometres of the Group’s gas distribution network, including the 8,000 kilometres of Toscana Energia networks.

The new Center, built in the building spaces of the associate Toscana Energia, operates in symbiosis with its “twin” in Turin and makes it possible to increase the availability of resources to remotely intervene on the network and plants, intensify monitoring activities, collect and analyse operating data, and refine predictive maintenance programs. Overall, the new Center will further increase the levels of security, service flexibility and timeliness of intervention – direct and remotely – 24 hours a day, every day of the year.

Present at the ribbon-cutting ceremony, together with Italgas CEO Paolo Gallo, were the Mayor of Florence, Sara Funaro, the President of the Region Eugenio Giani, the President of Toscana Energia Fabio Giorgetti, and the CEO of Toscana Energia, Bruno Burigana.

“With the ribbon-cutting ceremony of the new Command and Control Center in Florence, we are taking a big step forward in the technological innovation of the gas distribution service –
said Mayor Sara Funaro -. Remote monitoring and control will make it possible to put in place a service that is certainly increasingly efficient for citizens, allowing them to have a precise picture of how the network is working, but at the same time also sustainable: the use of the
most advanced technologies, in fact, is also decisive in environmental terms.Today we are reaching an important goal that puts our city even more in the vanguard”.

“Thanks to the new Control and Command Center for plants and networks – commented the President of the Tuscany Region, Eugenio Giani – Florence and Tuscany will become the heart, or more precisely the brain, of a digitalized national gas distribution network. The joint operation with the similar Center in Turin will bring significant innovation to the governance of this sector, better efficiency monitoring, and increased safety. The technological upgrades open up possibilities that were unthinkable just a few decades ago, enabling a more targeted service and increasingly comprehensive control of the network—improvements that benefit all of us and the environment.”

“The continuous pursuit of innovation – declared Paolo Gallo, Italgas CEO – has allowed Italgas and its subsidiaries to be recognised as industry benchmarks. The technological upgrade has triggered a Copernican revolution that has completely transformed our networks to the point of making them one of the driving forces behind the ecological transition to net zero and the sustainable development of our cities. With the new Center in Florence, we are also cutting another important milestone: we are getting closer and closer to the goal of a fully digitalised network, able to act like the nervous system of the human body, with the capacity to react at central and local level”.

The Piazza Mattei Center is located within an environment specially designed for the management of a state-of-the-art digital network.

The structure consists of two contiguous areas that operate in close connection: in one, the reports that reach the Emergency Service toll-free number converge – from the receipt of the request – to the indications to be put into practice immediately, to the service order to the technicians in the area for their direct intervention – in the other, the remote command and control takes place through the use of the proprietary software DANA (Digital Advanced Network Automation) which allows to act on sensors and actuators installed along the network. The environments are organised to facilitate sharing and collaboration on common topics as well as concentration on specific topics.

DANA is the proprietary application created in the Group’s Digital Factory and represents the heart of the technologies employed as it enables remote control and management, raising the efficiency levels of activities. In particular, the integrated mapping system makes it possible to intervene on the network, “interrogate” it and verify its status even in its individual segments, thus favouring an increasingly in-depth and comprehensive knowledge of the individual distribution systems.

Italgas: Moody’s Ratings (Moody’s) confirms rating and Outlook

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Milan, 01 October 2024 – The rating agency Moody’s confirmed today Italgas S.p.A Long-term Issuer rating at ‘Baa2’, Stable Outlook.

The Baa2 rating is supported by the Group’s focus on domestic low-risk gas distribution activities, which generate revenues under an established and supportive regulatory framework with a limited exposure to volume risk.

Furthermore, the rating reflects Italgas’ good operating efficiency, its solid cash flow generation, supported by efficiencies in operating spending and a low average cost of debt.

Moody’s highlights that Italgas’ rating remains constrained by the company’s exposure to macroeconomic, political, and regulatory risks in Italy (Baa3 stable).

Italgas: high demand for the reopening of the bond maturing in February 2029 (“TAP issue”) for an amount of 350 million euros

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Milan, September 24, 2024 – Italgas S.p.A. (rated BBB+ by Fitch, Baa2 by Moody’s) successfully completed today the reopening of bond issuance carried out on February 8, 2024.

The transaction recorded a demand exceeding three times the initial offer, allowing the amount offered to be increased to 350 million euros.

The proceeds of the issue will be used to refinance bank indebtedness soon to mature.

The placement, exclusively targeted to institutional investors, was organized and led, as Joint Bookrunners, by Banca Akros, BNP Paribas, BofA Securities, Citi, J.P. Morgan, Morgan Stanley and Société Générale.

The bond will be listed on the Luxembourg Stock Exchange.

Details are as follows:

Amount: 350 million euros

Maturity: February 8, 2029

Annual Coupon: 3.125%. The re-offer price is 99.683 (equivalent to a spread of 95 basis points over the reference mid-swap rate).

Italgas launches a new bond issuance for an amount of 250 million euros expected, reopening the bond expiring in February 2029 (“TAP Issue”)

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Milan, 24 September 2024 – Italgas S.p.A. (rated BBB+ by Fitch, Baa2 by Moody’s) launched this morning on the market a new bond issuance for 250 million euros expected, reopening the already outstanding bond of 650 million euros maturing in February 2029.

The proceeds of the issue will be used to refinance bank indebtedness soon to mature.

The placement, exclusively targeted to institutional investors, is organized and led, as Joint Bookrunners, by BNP Paribas, J.P. Morgan, Citi, Morgan Stanley, Société Générale, Bank of America e Banca Akros.

Transparency and Trust: Italgas Achieves ISO 37002 Certification for its Whistleblowing System

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Transparency and whistleblowing are crucial elements in building healthy organizations based on trust and responsible governance. In an increasingly complex corporate world, having tools that ensure the safe reporting of irregularities or misconduct becomes indispensable for promoting shared accountability and adherence to the rules. Whistleblowing embodies just that: a free voice that, in a protected context, helps companies improve and prevent critical situations, benefiting all stakeholders.

In this spirit, the Italgas Group – together with its main companies: Italgas S.p.A., Italgas Reti, Medea, Bludigit, Geoside, Toscana Energia, Nepta, and Metano Sant’Angelo Lodigiano – has achieved an important milestone: the certification of its whistleblowing management system by DNV, in accordance with the ISO 37002:2021 standard, “Whistleblowing Management Systems – Guidelines.” This recognition not only certifies compliance with regulations and best practices but also serves as a testament to the Group’s ongoing commitment to fostering a corporate culture grounded in transparency, ethical governance, and the prevention of misconduct.

To mark this significant achievement, today, Monday, September 23, the official ceremony for the delivery of the ISO 37002 compliance certification by the certifying body DNV took place at the Milan headquarters. The prestigious award was received by Germana Mentil, General Counsel of Italgas, together with the Legal Compliance and Anti-Corruption Team.

Indeed, Italgas’ whistleblowing management system has been designed to encourage the reporting of misconduct and ensure that such reports are handled with the utmost seriousness, transparency, and timeliness. In this way, not only are whistleblowers protected, but a stronger bond of trust is built between the company and its stakeholders, both internal and external. This open dialogue not only strengthens transparency but also fosters a culture of widespread accountability, where every individual feels actively involved in maintaining an ethical and law-abiding work environment.

Jasmine Paolini at Italgas Headquarters in Milan: A “Gift” for Italgas’ 187th Anniversary

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A surprise visit from the Olympic champion. Since last July, the Group has been by her side as she climbs to the top of the global tennis rankings.

Italgas has strengthened its long-standing commitment to supporting Italian tennis by partnering, since last July, with one of its brightest stars: Jasmine Paolini. This partnership quickly proved successful, with Jasmine achieving remarkable results, reaching two Grand Slam finals and securing a gold medal in women’s doubles at the Paris 2024 Olympics. Italgas is proud to support and accompany her on her journey to the pinnacle of world tennis.

The gold medal – the first in the history of Italian tennis at the Olympics – made its way to the Milan headquarters of Italgas, along with its rightful owner. A fortunate coincidence, as it falls in line with the Group’s 187th anniversary.

Jasmine Paolini is an extraordinary example of determination and passion, values that Italgas shares and draws inspiration from in its continuous growth and innovation. With her competitive spirit and dedication, she is the perfect ambassador for the Group’s energy.

We have always believed in the power of sports and in supporting talent. Since 2018, we have been backing Italian tennis: the tennis net and the gas network symbolically intertwine in this synergy, connecting play, strategy, mutual support, and teamwork. Promoting tennis and emerging talents like Jasmine is an integral part of our mission.

Celebrating 187 years of history and a new digital look

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Milan, September 12, 2024 – Since 1837 Italgas has been a constant reference for the social and economic life of the country. Italy before Italy, a Company that has made the continuous push for innovation the hallmark of its history and its ability to make the future present.

In Turin in the first half of the 19th century, when the streets were lit only by a few oil lamps, Italgas invested in innovative technology that would revolutionize the lives of millions of people. Since then, it has continued the same path of grasping people’s ‘new’ needs and adapting to a constantly changing environment. Each decade has seen Italgas take on new challenges, adopt cutting-edge technologies and improve its services while contributing to the growth and well-being of the community.

Today, on the 187th anniversary of its founding, the Company celebrates a past that straddles three centuries: a long history, always told and shared through the ‘media’ of the moment: from black-and-white periodicals to calendars, from the first simple advertisements, made up of an image and a slogan, to the Liebig figurines, makers of a historic “meat extract,” through which Italgas told of the advantages of gas. And then radio, TV, the web…

The new Italgas website that sees the light of day today represents both a technological upgrade and a tale in the concrete of a leadership that aims to drive a transition to net zero based on a sustainable and accessible model.

The new Italgas website, designed to meet the needs of the Group’s various stakeholders, is a tool for communication and engagement. With its intuitive structure, the new site encourages awareness of the Group’s activities and development projects, acting as a bridge between past and present, a symbol of a company in continuous evolution but firmly anchored to its roots.