Fitch Ratings (“Fitch”) affirms Italgas at ‘BBB+’, Stable Outlook

Milan, 29 November 2022 – The rating agency Fitch has affirmed today Italgas S.p.A long-term issuer default rating at ‘BBB+’, with Stable Outlook.

The rating affirmation is mainly based on the Company’s solid business profile, thus allowing Italgas to benefit from stable cash flows originating from regulated gas distribution activities in Italy and, to a lesser extent, in Greece as well as to mitigate the effect of higher energy prices and a rising interest rate and inflation environment.

The agency also focuses on the relevance of the Strategic Plan presented last June by the Company, which envisages 8.6 billion euros investments over the period 2022-2028, out of which 20% of the total will be earmarked for the upgrading and digitization of the Greek network, and a further 20% for participation in gas tenders planned from 2024 onwards.

Moreover, Fitch highlights that Italgas’ growing perspectives are further based on its solid operating performance realized as of Q3 2022, with EBITDA up to 4.9% year-on-year achieved through higher investments carried out in the regulated core business, energy efficiency business development as well as the first monthly contribution from DEPA that offset the negative effect of a lower WACC.

Italgas: Consolidated results for the first nine months and third quarter of 2022 approved

Milan, 27 October 2022 – Italgas’ Board of Directors, chaired by Benedetta Navarra, met yesterday and approved the consolidated results of the first nine months and third quarter of 2022.

Key figures1

Consolidated economic and financial highlights:

  • Total revenues: € 1,087.0 million (+8.1%)
  • Gross operating margin (EBITDA): € 785.4 million (+4.9%)
  • Operating profit (EBIT): € 454.9 million (+5.6%)
  • Adjusted net profit attributable to the Group: € 288.6 million (+5.5%)
  • Technical investments: € 546.7 million
  • Cash flow from operating activities: € 455.3 million
  • Net financial debt (excluding the effects pursuant to IFRS 16): € 6,027.9 million
  • Net financial debt: € 6,096.4 million

ESG – key indicators, Scope 1 and Scope 2 and energy consumption:

  • Net energy consumption: 372.7 TJ (-14.8%)
  • 100.0 103 tCO2 eq Scope 1 and 2 (-18.4%)
  • 66,167 km of network inspected (+17.8%)
  • Fugitive emissions/km investigated: 72.5 Sm3/km (-31.0%)

Operating highlights (including affiliates):

  • Municipalities in gas distribution concessions: 2,039
  • Number of active meters: 8.309 million
  • Gas distribution network: around 82,215 Km

The results of the Italgas Group in the first nine months of 2022 confirm the growth of the economic and financial indicators and the development of operational activities with the achievement of the sustainability targets which the 2022-2028 Strategic Plan, presented to the financial community on 15 June 2022, revised further upwards.

These results mainly leveraged the Group’s digital transformation, with significant investments in assets, processes and people, and confirm that the gas distribution sector can provide an important contribution to the process of ecological transition, reduction of consumption and increasing the efficiency of the country’s energy system.

In the period, € 546.7 million in investments were made, devoted primarily to the digital transformation, the natural gas distribution in Sardinia and the repurposing of the networks to enable them to distribute renewable gases (biomethane immediately and, in the medium term, hydrogen and synthetic methane).

In the first nine months of 2022, 272 km of new pipes were laid in Italy. In Sardinia, the creation of new fully digital networks reached a total length of 909 km out of a total to be developed of around 1,110 km. In addition, 11 new GNL storage and regasification plants were commissioned, for a total of [64] plants serving the basins under concession.

The net financial position as at 30 September 2022 was € 6,096.4 million (€ 4,980.0 million as at 31 December 2021). The net financial position amounted to € 6,027.9 million (€ 4,910.0 million as at 31 December 2021), net of financial liabilities pursuant to IFRS 16 of € 68.5 million (€ 70.0 million as at 31 December 2021).

The EBITDA for the first nine months of 2022 amounted to € 785.4 million (+4.9% compared to 30 September 2021) and adjusted net profit attributable to the Group was € 288.6 million (+5.5% compared to 30 September 2021).

On 1 September 2022, in the context of the public tender called by the Greek government for privatisation of the gas distribution operator DEPA Infrastructure Single Member S.A, through its subsidiary Italgas Newco S.p.A., Italgas finalised the acquisition of 100% of DEPA Infrastructure S.A. from Hellenic Republic Asset Development Fund S.A. (HRADF) and Hellenic Petroleum Holding S.A. (HELPE). The consolidated balance sheet and income statement of the Italgas Group as at 30 September 2022 therefore reflects the effects of the first consolidation, starting on 1 September 2022, of DEPA Infrastructure Single Member S.A. and its subsidiaries Attiki Natural Gas Distribution Single Member Company S.A. (EDA Attikis), Public Gas Distribution Networks S.A. (DEDA) and Thessaloniki – Thessalia Gas Distribution S.A. (EDA Thess).

Italgas will thus make its experience and technological know-how available to the Greek market to build top-level infrastructures, and through this, it will contribute to achieving the targets for phasing out coal and lignite set by the government, in line with the targets set by the EU.

Paolo Gallo, CEO of Italgas, commented

With the third quarter of 2022 showing improvements in all income statement, cash flow, operational and sustainability results, there have been 23 quarters of consecutive growth: this demonstrates the Group’s soundness and determination in pursuing its objectives, despite the complexity of the geopolitical scenario and its impacts on Italy’s economic and social system.

In these nine months, the EBITDA has grown by around 5%, amounting to € 785.4 million. The adjusted net profit attributable to the Group, amounting to € 288.6 million, also grew by 5.5%. Investments – over € 546 million – were mainly dedicated to the digital transformation of assets and processes, as well as the repurposing of the networks to outfit them to distribute renewable gases.

In 2023, 90% of Italgas’ networks will be smart, digital and flexible, ready to absorb increasing quantities of biomethane and, subsequently, hydrogen and synthetic gases. This will enable new, more efficient approaches for operating and managing networks: they will be remote controlled, capable of warning of the occurrence of phenomena that could potentially cause anomalies, allowing us to plan predictive maintenance.

Over recent months we have worked tirelessly on energy efficiency, concentrating all of the Group’s business in a single new brand, Geoside, with the goal of making this company a top level player, and on our business in Greece. Immediately after we finalised the acquisition of DEPA Infrastructure S.A., we started numerous knowledge transfer and integration activities to make our experience and technological know how available, with the common goal of building cutting-edge infrastructure that contributes to achieving the energy transition targets set by the Greek government.

Technological innovation and digital transformation continue to be the common denominator in our development plans and all of our operating processes, the drivers that we use to get ahead of change, gradually improve our action and the level of quality of the services offered to the communities in which we operate. At the same time, it is also a factor that allows us to set increasingly important sustainability targets and to contribute to achieving the REPowerEU targets.

1The consolidated economic and financial highlights and operational highlights reflect the effects of the consolidation of the DEPA Infrastructure Group on 1 September 2022.

Depa Infrastructure (Italgas Group): signed a new Bond Loan with Eurobank for a total amount of up to 580 million euros

Milan, Athens, 3 October 2022 – Depa Infrastructure, the leading Greek gas distribution operator that recently became part of the Italgas’ Group, has signed a new Bond Loan Programme with Eurobank S.A., for a maximum nominal amount of up to 580 million euros, divided into 3 tranches with a maturity of up to 5,7 and 12 years respectively.

The Bond Loan will mainly be used to finance the investments envisaged in the infrastructure development plan of Depa Infrastructure and its subsidiaries in Greece.

“The loan, signed in less than one month after our entry into Depa Infrastructure,”said Paolo Gallo, Italgas’ CEO “confirms the appreciation of the financial system for the development vision that we intend to realise in Greece. Our smart, digital and flexible networks will be a driver for growth and produce a multiplier effect on wealth for the whole country, in addition to contributing to the rapid decarbonization of energy consumption, both moving to natural gas and by stimulating the production of renewable gases such as biomethane”.

The transaction, hold in the current international financial market volatility, aiming at providing the Depa Infrastructure with an adequate financial structure, among other factors, in terms of duration and type of financial instruments available.

Italgas: Moody’s Investors Service (Moody’s) affirms Rating and Outlook

Milan, 23 September 2022 – Moody’s Investors Service (Moody’s) has affirmed today Italgas S.p.A Long-Term Issuer Rating at ‘Baa2’, Negative Outlook. The rating affirmation is based on Italgas’ positioning in a sector characterized by a well-established regulatory framework, as well as on the ability to achieve operational efficiencies and respect the investment targets set out in the Strategic Plan; the Outlook reflects Italgas’ exposure to pressures linked to Italian sovereign credit quality worsening.

The rating agency highlights the Company’s strong track record on costs optimization, achieved through technological innovation and digitization activities, in addition to the ability to execute planned investments while maintaining an extremely low cost of debt, thanks to which the Company will be able to sustain its profitability and a robust cash flow generation.

Finally, Moody’s underlines the key relevance of DEPA Infrastructure acquisition, finalized last September 1st, 2022 through which Italgas will diversify its geographical footprint beyond Italy and will be able to carry out its know-how, particularly in terms of operating efficiency and cost optimization.

Italy: 150 million euros from the EIB to Italgas to promote energy efficiency

  • The EIB and Italgas will support energy efficiency projects in residential buildings throughout Italy.
  • It is estimated that the interventions will help to improve the energy efficiency of around 4,500 homes and that more than 1,500 jobs will be created during the project implementation phase.
  • The operation supports the directives of the Renovation Wave and the European Green Deal, as well as the Integrated National Energy and Climate Plan.

Milan, 20 September 2022 – Reducing environmental pollution through investments to improve the energy efficiency of residential buildings throughout Italy over the next three years. This is the main objective of the framework loan of 150 million euros granted by the European Investment Bank (EIB) to Italgas for interventions to be carried out in Italy through Seaside, the Group’s Energy Service Company.

The loan, called Climate Action Framework Loan, marks the EIB’s return to cooperation with the Italgas Group by activating the Bank’s investments in energy companies capable of contributing to the ecological transition path towards net zero.

The loan is intended to support the implementation of energy efficiency investments in Italy, mainly focused on the renovation of residential buildings, with the aim of reducing air pollution and producing health benefits, in line with the directives of the European Green Deal and the Renovation Wave, which aims to double the energy renovation rate of European buildings by 2030. It is estimated that the interventions financed by the EIB will help to improve the energy efficiency of around 4,500 homes and that the implementation phase of the project will create more than 1,500 new jobs.

The funding has a “Framework Loan” structure and envisages mechanisms for capital allocation and disbursement specifically conceived to support the implementation of a wide range of both small and medium-sized projects, offering particularly competitive terms and conditions.

“More than 85 per cent of Italian residential buildings are in energy class D or lower and require heavy investment. Projects such as the one signed today with Italgas are essential not only to reduce dependence on energy imports from third countries but also to lower energy consumption, hence the cost of Italian citizens’ bills”, said Gelsomina Vigliotti, EIB Vice-President.

Paolo Gallo, CEO of Italgas, commented: “The best energy is that is not wasted, and the EIB loan will enable us to further strengthen our commitment to energy efficiency and ecological transition, in line with the objectives of Italgas’ 2022-2028 Strategic Plan.  Through our ESCo Seaside and our in-house developed technologies we will offer the market and communities cutting-edge solutions, actively contributing to the achievement of Italy’s and the European Union’s climate targets”.

Seaside is the Italgas Group company active in the energy efficiency sector for condominiums, companies and public administration. With its proprietary technologies, it contributes to the achievement of national energy efficiency objectives and to the decarbonisation of consumption.

In addition to consolidating the excellent partnership between the EIB and Italgas, the transaction will further optimise the Italgas Group’s financial structure, both in terms of reducing the cost of funding and extending the average duration of debt, in support of the significant investment plan envisaged in the Company’s 2022-2028 Strategic Plan.

General Information

The European Investment Bank (EIB) is the long-term financial institution of the European Union and is owned by its Member States. It provides long-term funding for sound investments to contribute to the EU’s strategic objectives. The Bank finances projects in four priority areas: infrastructure, innovation, climate and environment, and small and medium-sized enterprises (SMEs). Between 2019 and 2021, the EIB Group lent more than EUR 36bn for projects in Italy.  

Italgas is Italy’s leading operator in gas distribution and the third in Europe. It operates a distribution network that extends for a total of about 75,000 kilometres through which, in the last year, it distributed approximately 9 billion cubic metres of gas to 7.8 million customers. The Group holds 1,899 concessions, with a historical presence in the country’s major cities including Turin, Venice, Florence and Rome. It is also present in Greece through its subsidiary Depa Infrastructure. In recent years Italgas has given a strong boost to its presence in the energy efficiency and innovation technology sectors.

Italgas’ Board of Directors approves the renewal of the EMTN programme

Milan, 15 September 2021 – Italgas’ Board of Directors, chaired by Benedetta Navarra, met today and approved the renewal of the EMTN Programme (Euro Medium Term Notes) with a maximum nominal amount of 6.5 billion euro.

As of today, under the current EMTN Programme the notes outstanding are in nominal amount equal to 4.48 billion euro.

The Board of Directors has also approved the issue of one or more bonds to be placed only with institutional investors within one year by the signing date of the Programme. The total amount of the bonds issued may not in any case exceed the abovementioned maximum amount. The newly bonds issued may be listed on the regulated markets.

Through the EMTN Programme the Company will still be enabled to issue also Sustainability-Linked Notes, in line with Italgas’ strategy of achieving the sustainability targets disclosed to the market during the Strategic Plan 2022-2028 presentation.

Depa Infrastructure: Shareholders’ Meeting appoints Chairman and new Board of Directors

Barbara Morgante appointed as CEO of the Company 

Athens, 1 settembre 2022 – The Shareholders’ Meeting of Depa Infrastructure, which met today following the completion of the acquisition by Italgas, approved the Company’s new Bylaws and appointed Nunzio Ferrulli as Chairman.

The Shareholders’ Meeting also appointed the Board of Directors, consisting of 5 members, in the persons of Nunzio Ferrulli, Barbara Morgante, Peter Durante, Theodoros Panagos e Spyridon Flogaitis.

The Board of Directors, during its first meeting held today, appointed Barbara Morgante as Chief Executive Officer of the Company.

Italgas: completed the acquisition of 100% of Depa Infrastructure S.A.

Athens, 1 September 2022 – The sale of Depa Infrastructure S.A., Greece’s leading gas distribution operator, was completed today in Athens. Depa Infrastructure S.A. was the subject of an international tender aimed at enhancing state assets and creating added value through their development.

With the completion of the transaction, Italgas acquires 100% of the Company from Hellenic Republic Asset Development Fund S.A. (HRADF) and Hellenic Petroleum S.A. (HELPE).

Italgas CEO, Paolo Gallo, commented: “Today we start writing an important page in the history of Italgas, which after nearly twenty years is returning to cross national borders and is enriched with new colleagues, a new language and new communities to serve. It has been a long journey that has brought us this far, but now begins a new phase of intense work and development, which we will tackle with our usual enthusiasm: we will put our experience and our technological know-how at the disposal of the country to build an infrastructure of excellence and with it contribute to achieving the coal and lignite phase-out targets set by the government, in line with those of the EU. In the European scenario, Italy and Greece can aim to become the benchmark for the strategic role of smart, digital and flexible gas networks fostering the energy transition. We are here to make this happen”. 

Dimitris Politis, CEO of HRADF commented: “The completion of the sale of DEPA Infrastructure to Italgas Group is one of the most important asset development projects carried out by HRADF, with significant benefits for the Greek economy and the Greek citizens. It represents a clear vote of confidence in Greece’s growth prospects, as it marks the return of Italgas to the international markets after almost two decades. DEPA Infrastructure is owned by a powerful shareholder, one of the leading energy groups in Europe. It is also an important step towards realizing the ambitious goals of our country’s energy transition by reducing greenhouse gas emissions and ensuring that the company will have plentiful access to financing for the expansion of the natural gas distribution networks”.

The transaction closing took place at the presence of the Greek Minister of Environment and Energy, Kostas Skrekas, the Italian Ambassador to Greece, Patrizia Falcinelli, and it was signed by Italgas CEO, Paolo Gallo, the Sole Director of the vehicle company Italgas Newco, Pier Lorenzo Dell’Orco, HRADF CEO, Dimitris Politis, HELPE General Manager of Strategic Planning and Group Development, George

Alexopoulos, and HELPE Group General Counsel, John Apsouris.

The transaction was finalized following the fulfilment of the conditions precedent set forth in the Sales and Purchase Agreement and was financed by Italgas through committed lines of credit.

DEPA Infrastructure currently holds 51% of Thessaloniki – Thessalia Gas Distribution S.A. (EDA Thess), 100% of Attiki Natural Gas Distribution Single Member Company S.A. (EDA Attikis) and 100% of Public Gas Distribution Networks S.A. (DEDA), the three main gas distribution operators in Greece, which together manage approximately 7,500 kilometers of network and about 600,000 redelivery points.

Italgas is the leading operator in Italy in the distribution of natural gas and the third in Europe. It manages a distribution network that extends a total of approximately 75,000 kilometers through which, during the last year, it distributed approximately 9 billion cubic meters of natural gas to 7.8 million customers. The Group holds 1,899 concessions, with a historical presence in major Italian cities including Turin, Venice, Florence, and Rome.

The Italgas Strategic Plan 2022-2028, presented to the market on 15 June, envisages a total of 1.8 billion euros in investments allocated to the acquisition of Depa Infrastructure, its consolidation, and the execution of development programs with particular attention to the digitalization of networks, renewable gases such as biomethane and hydrogen and, more generally, the consistency with the decarbonization objectives set by the Greek government and EU targets.

Moody’s Investors Service (Moody’s) affirms Italgas at ‘Baa2’, Outlook changed to Negative from Stable

Milan, 9 August 2022 – The rating agency Moody’s has affirmed today Italgas S.p.A Long-Term Issuer rating at ‘Baa2’, revising the Outlook to Negative from Stable.

The rating action follows the outlook change to Negative from Stable on the Italian government’s Baa3 debt rating, carried out by Moody’s last 5 August 2022 and reflect Italgas exposure to the pressures that accompany a decline in sovereign credit quality, considering that its activities are essentially concentrated in Italy. However, as stated by the agency, the rating confirmation attests to Italgas’ strategic position and leadership in the gas distribution sector in Italy and its fully regulated profile.

Italgas Group strengthens its presence in Sardinia: 12 new municipalities acquired

The agreement signed with the company Fiamma 2000 includes assets for over 430 km of networks serving 12,000 customers; the concessions also include Olbia, which joins the other large towns on the island managed by Medea.

Milan, 3 August 2022 – Yesterday, Italgas signed a binding agreement for the acquisition from Fiamma 2000 Group of the LPG distribution and sales business, with related networks and plants, managed in 12 municipalities in Sardinia.

The distribution network covered by the agreement, currently operated by Sarda Reti Gas (Fiamma Group) extends over a total of more than 430 kilometers and serves 12,000 customers in the municipalities of Olbia (Basin 5), Valledoria (3), Buddusò (10), Budoni (11), Sedilo (13), Genoni (17), Terralba (19) Simala (20), Arbus (24), Mandas and Siurgus Donigala (26), Santadi (35).

The enterprise value of the transaction (on a debt-free/cash-free basis) is 31.7 million euros, with the price to be paid entirely by cash, net of the debt related to the perimeter acquired. The closing is expected to take place in the second half of 2022, subject to the occurrence of certain conditions precedent, including the acquisition of the consent of the granting bodies and the successful completion of the notification procedure pursuant to Law Decree 21/2012 and Prime Ministerial Decree 179/2020 (Golden Power).

The Italgas Group is thus extending its presence in most of the 38 basins into which the island is divided and is preparing to convert the acquired networks to natural gas, as part of the broader project to build cutting-edge gas infrastructure to serve the region.

Italgas CEO, Paolo Gallo, commented: “With this acquisition, we are taking another important step in the direction of the methanization of Sardinia: with Olbia, all the main towns in the region are managed by Medea. It has been a journey that, in few years, has allowed the island to close a historical gap, becoming a model capable of attracting other operators in the sector and reactivating an integrated energy system for the benefit of communities. The region, moreover, is in a leading position both because it is equipped with digital networks capable of receive renewable gases such as biomethane and hydrogen in the near future, and because the supply is ensured only by liquefied natural gas. We continue to work to make our service even more efficient, extensive and widespread’.

The Italgas Group has a total or partial presence in 24 of the 38 basins in which Sardinia is divided. Its assets consist of around 1,400 km of “native digital” networks for natural gas. In addition, there are 600 km of propane-air-fueled networks in the municipalities of Cagliari, Sassari, Nuoro and Oristano and the over 430 km of LPG-fueled networks included in today’s agreement, which will all be converted to natural gas in the coming years. Currently, 76 towns on the island are served by natural gas, for a total of 1.2 million cubic meters distributed in the first six months of 2022.

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