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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.

Italgas: consolidated results as at 30 june 2024 approved

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Milan, 24 July 2024 – The Italgas’ Board of Directors, which met today chaired by Benedetta Navarra, has approved the consolidated results as at 30 June 2024.

Highlights1

  • Adjusted total revenues: € 872.3 million (-6.4% mainly attributable to the reduction in energy efficiency activities connected with the so-called Super Bonus)
  • Adjusted gas distribution regulated revenues: € 809.1 million (+12.0%)
  • EBITDA adjusted: € 671.2 million (+10.6%)
  • EBIT adjusted: € 401.8 million (+12.0%)
  • Adjusted net profit attributable to the Group: € 241.5 million (+13.3%)
  • Technical investments: € 353.7 million
  • Cash flow from operating activities: € 529.5 million
  • Net financial debt (excluding the effects pursuant to IFRS 16): € 6,731.4 million
  • Net financial debt: € 6,829.4 million
  • Net energy consumption: 225.2 TJ (-12.4%)
  • 73,059 km of network investigated (+35.9%)

 

Italgas’ economic and financial indicators for the first six months of 2024 show a growth trend that continues uninterruptedly since 2017 confirming the effectiveness of the strategic choices of digital transformation and innovation made over time.

With an adjusted net profit of € 241.5 million (+13.3%) the Group continues on the path of growth outlined in the 2023-2029 Strategic Plan.

Total adjusted revenues amounted to € 872.3 million. The increase in regulated gas distribution revenues (+12.0% compared to the corresponding period of 2023) and the contribution of Acqua Campania have partly offset the expected drop in revenues related to energy efficiency activities (end of the so-called ‘Superbonus’).

In the Italian gas distribution business, activities are continuing towards the repurposing and completing the digitisation of the network, the main enabler of the ecological transition as it allows for the acceptance of incremental quotas of renewable gas, such as biomethane and green hydrogen, in blending with gas of fossil origin; in Greece, the development of the network towards areas of the country not yet reached by methane continues, contributing, at the same time, to achieving the objectives of decarbonising consumption.

In the water sector, activities are underway to integrate recently acquired companies into the Group and to share technical and technological know-how aimed at fostering the development of a more efficient service, reducing losses and creating value for communities.

In the first half of 2024, technical investments in the amount of € 353.7 million were made, thanks to which a variety of interventions were carried out, including the installation of 354 kilometres of gas distribution pipelines.

Adjusted EBITDA for the first six months of 2024 came to € 671.2 million, up +10.6% compared to 30 June 2023, also thanks to cost containment and the improvement in the regulated gas distribution WACC in Italy.

Cash flow from operating activities amounted to € 529.5 million, an increase of € 210 million compared to the previous year, and enabled investments to be fully financed, generating a free cash flow, before M&A transactions, of € 139.4 million.

The Group’s commitment to continuous improvement in environmental performance continued, with a drop in net energy consumption of -12.4% in the half-year period. The trend in Scope 1 and 2 emissions (+11.1% in absolute volume) reflects the acceleration of leakage detection activities: the portion in kilometres of network investigated increased by 35.9% compared to the same period last year, while the rate of atmospheric leakage detected, measured as the ratio of volume of gas dispersed to kilometres of network investigated, fell significantly, by 17.4% for the Italian scope and 44.1% for the Greek scope.

 

Paolo Gallo, CEO of Italgas, commented:

 

 

“The results for the first half of 2024 confirm the solid performance of the Italgas Group and the clear vision for the future development of our activities.

 

The economic and financial indicators showed significant double-digit growth. The most important results include adjusted EBITDA, which increased by 10.6%, rising to € 671.2 million and Group Adjusted Net Profit, which exceeded € 240 million, up 13.3% compared to the first half of last year.

 

With more than € 350 million already invested, the development of networks and facilities to be made available for a sustainable, safe and competitive ecological transition for Italy and Greece is being strengthened. This share is expected to grow further in the second half of the year, with investments increasing according to a higher rate of progression.

 

Our commitment in the water sector has enabled us to achieve the first significant results in less than a year. We have made our execution capacity available to the authorities in the south of the country to mitigate the effects of the low rainfall. The application on water networks of the technologies developed for the gas network will allow us to recover efficiency and value for the territories served.

 

Innovation, sustainability, the circular economy and training remain the key points of our daily operations. We continue to work to contribute to the decarbonisation of consumption and favour the sustainable development of the territories”.

1 The consolidated balance sheet and income statement of the Italgas Group at 30 June 2024 reflects the effects of the first consolidation, starting 30 January 2024, of Acqua Campania and subsidiaries; instead, the data relating to Scope 1 and 2 emissions and net energy consumption does not include Acqua Campani

Italgas stock confirmed in the FTSE4Good Index Series for the eighth year in a row

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Milan, 9 July 2024 – Italgas stock has been confirmed for the eighth consecutive year as a constituent of the FTSE4Good Index Series, designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices.

The evaluations of FTSE Russell, among the most influential sustainability rating agencies, are based on the assessment of activities in areas such as corporate governance, health and safety, climate change, and anti-corruption efforts.

Companies included in the FTSE4Good Index Series meet a variety of environmental, social and governance criteria. Italgas confirmed this year the score of 4.3 out of a maximum of 5 points, positioning itself ahead of the industry average.

The achievement of this result once again reaffirms Italgas’ focus on sustainable development, aimed at creating opportunities based on the principle of shared value.