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Italgas: approved the consolidated results for the first nine months of 2017

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Milan, 23 October 2017 – Italgas’s Board of Directors met today under the chairmanship of Lorenzo Bini Smaghi, and approved the consolidated results for the first nine months and third quarter of 2017*.

Summary

Italgas confirms the growth objectives presented to the market, particularly with regards to the increase of 14.7% in EBIT and of 27.8% in net profit. The Group has continued with the implementation of the investment plan, which amounted to €346.5 million as at 30 September 2017 (+39.8% compared with the same period in 2016), and has confirmed the objective of a total of more than €500 million in investments by the end of 2017. Approximately half of these investments are for implementing the programme for the replacement of traditional meters with “smart” meters. In the first nine months of the year 1.1 million meters were added bringing the total of new meters installed to around 2.3 million –  equal to 35% of the total and in line with the goal of completing the plan between 2019 and 2020.

In the first nine months of 2017 the Group generated cash flow from operating activities of €375.1 million, which enabled the funding of the investment plan and the payment of a dividend for 2016 maintaining the net financial position as at 30 September 2017 at approximately €3.7 billion.

Paolo Gallo, CEO of Italgas, commented:

“The results confirm the positive growth trend registered since the beginning of the year thanks to the positive effect of the rationalisation process, the corporate restructuring, the control of operating costs and financial optimisation. All the main economic indicators demonstrate a double digit growth; in particular EBITDA rose by  20% and net profit by 28%. The implementation of our investment plan is progressing in line with the objectives presented to the market, and with a focus on the replacement of meters, network development and replacement initiatives, and the application of digital technological solutions which will continue to generate efficiencies and benefits for the entire Italian gas distribution system”.

Key figures Consolidated economic and financial highlights:

  • Total revenue: €835.0 million (+7.2%)
  • EBITDA: €577.9 million (+20.0%)
  • EBIT: €306.7 million (+14.7%)
  • Net profit: €213.3 million (+27.8%)
  • Technical investments: €346.5 million (+39.8%)
  • Net cash flow from operating activities: €375.1 million
  • Net financial debt: €3,728.3 million

Operating highlights including unconsolidated affiliates:  Gas concessions: 1,581

  • Number of active meters: 7.4 million
  • Gas distribution network: more than 65,000 Km

Italgas acquires 100% of Enerco Distribuzione S.p.A

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Milan, 19 October 2017 – Last night, Italgas signed a binding agreement with H2C SpA to acquire 100% of the subsidiary Enerco Distribuzione S.p.A., which is headquartered in Padua and active in the natural gas distribution sector in the Padua and Vicenza provinces.

Enerco Distribuzione has 27 concessions, operates a network of over 800 kilometers of pipelines, and supplies approximately 30 thousand customers.

The value of Enerco Distribuzione’s assets (enterprise value) was set at Euro 51 million. At the closing of the transaction, the sum will be paid entirely in cash, net of debt. The closing is expected by the end of 2017 and is subject to pre-closing requirements by H2C.

Paolo Gallo, Chief Executive of Italgas, commented: “The acquisition of Enerco is part of Italgas’ development strategies that we announced to the market. Through acquisitions of small and medium-sized operators, the Company is pursuing its goal of consolidating the gas distribution market ahead of the concession tenders. In what remains a fragmented market with over 200 companies in operation, Italgas plans to confirm its leading role in national consolidation, carrying out targeted transactions that create value for the its shareholders. The result of this process will benefit the entire Italian gas distribution system and generate important investments in the territory. The acquisition of Enerco, an efficient gas distribution operator, marks the first of a series of transactions in the coming months where Italgas will be the key player“.

Moody’s affirms Italgas at ‘Baa1’, Negative Outlook

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Milan, 12 October 2017 – Moody’s Investors Service (“Moody’s”) has affirmed Italgas S.p.A Long-Term Issuer Rating at ‘Baa1’ with Negative Outlook.

The rating affirmation reflects the Group’s strong focus on domestic low-risk gas distribution activities under a well-established and supportive regulatory framework.

Moody’s highlights Italgas’s strong cash flow generation and the good degree of operating efficiencies that would allow the Company to have a competitive advantage in the upcoming gas concession tenders.

Italgas: a fixed rate bond issue successfully launched for a total amount of 500 million euro

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NOT TO BE PUBLISHED OR DISTRIBUTED IN THE UNITED STATES, AUSTRALIA, CANADA AND JAPAN

Milan, September 11, 2017 – Today Italgas SpA (rating BBB+ by Fitch, Baa1 by Moody’s) successfully launched a fixed rate note issue, with maturity 18 January 2029 for an amount of 500 million euro with an annual coupon of 1.625% under its EMTN Programme (Euro Medium Term Notes) which was approved by the Board of Directors on 18th October, 2016.

The issuance is aimed at further optimizing Italgas financial structure, in terms of Italgas short and medium-long term debt, extending the average duration of debt and increasing the fixed rate quota.

This bond represents the longest tranche ever issued by Italgas so far and the longest tenor issued in euro by an Italian issuer in 2017 year to date.

The transaction was more than 2.6 times oversubscribed with high quality and wide and geographical diversification of investors.
Joint Bookrunners of the placement, restricted to institutional investors only, were Banca IMI, BNP Paribas, Citi, J.P. Morgan, Mediobanca, Société Générale and UniCredit.

The bond will be listed on the Luxembourg Stock Exchange.

Details are as follows:

  • Amount: 500 million euro
  • Maturity: 18 January 2029
  • Annual coupon of 1.625%. The re-offer price is 99.746 (equivalent to a spread of 72 basis points over the reference mid-swap rate).

DISCLAIMER

This announcement (and the information contained therein) does not constitute or form part of any offer to sell nor a solicitation of any offer to buy any securities nor shall there be any offer of securities in any jurisdiction in which such offer or sale would be unlawful. It may be unlawful to distribute this announcement in certain jurisdictions. This announcement does not constitute an offer of securities for sale in the United States, in Australia, Canada and Japan and in any jurisdiction in which such offer or sale would be unlawful and is not for publication or distribution in any such jurisdictions. The securities referred to in this announcement have not been and will not be registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This announcement is not a public offer of financial products in Italy as per Article 1, para. 1, letter. t) of Legislative Decree no. 58 of February 24, 1998. The documentation relating to the offer has not been/will not be submitted to the approval of CONSOB.

Italgas finalises its First Euro Medium Term Notes Programme

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Milan, 21 November 2016 – Italgas has finalised a medium to long-term issuance programme (Euro Medium Term Note Programme), for a total of up to EUR 2.8 billion, further to the Board of Directors’ approval on 18 October 2016.

The programme envisages the issuance of one or more non-convertible bonds to institutional investors in Europe, issued in one or more tranches by 31 October 2017.

The issued securities will be listed on the Luxembourg Stock Exchange. Moody’s and Fitch credit rating agencies have assigned this programme a rating of “Baa1” Outlook Stable, and “BBB +” respectively.

“In line with our strategy and targets presented to the financial community during our Capital Market Day and the road show, we are laying the foundations to establish a solid and efficient financial structure – Paolo Gallo, CEO of Italgas, said – aiming to diversify our funding sources and reach an appropriate balance between fixed and floating rate at competitive costs”.

The prospectus of EMTN Programme is available on the Company’s website (www.italgas.it in the “Investors” – “Debt and Credit rating” section).

Italgas stock included in the FTSE4Good Index Series

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Milan, 4 August 2017 – A few months after its return to the Stock Exchange last November, Italgas stock has been included in the FTSE4Good Index Series.

Italgas has been independently assessed in the June 2017 review and has satisfied the requirements of the FTSE Environmental, Social, Governance (ESG) methodology.

This result reflects Italgas’ ongoing commitment to sustainable development based on company leadership in interaction with the social context, aimed at creating opportunities based on the principle of shared value.

Created by the global index company FTSE Russell, FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognised corporate responsibility standards. Companies in the FTSE4Good Index Series have met stringent environmental, social and governance criteria, and are positioned to capitalise on the benefits of responsible business practice.

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

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Milan, 4 August 2017 – Fitch has affirmed Italgas S.p.A Long-Term Issuer Default Rating (IDR) and senior unsecured rating at ‘BBB+’. The Outlook on the IDR is Stable.

The rating affirmation reflects Italgas’s updated 2017-2023 business plan, which clarifies medium-term strategic and financial targets of the Italgas Group.

Fitch considers Italgas better placed for the current rating than last year due to a stronger cash flow generation and to the continuous implementation of the ambitious cost efficiency plan announced to the market by the management. Moreover, Italgas has been able to secure a low cost of funding having entirely built its debt structure also thanks to favourable market conditions.

For further information please visit https://www.fitchratings.com/site/pr/1027438

Italgas: co-optation of a director

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Milan, 28 July 2017 – The Board of Directors of Italgas S.p.A., on the proposal of the Appointments Committee, in compliance with the quota reserved for the less represented gender, has co-opted Federica Lolli as a non-executive director to replace the outgoing Barbara Borra.

The Board of Directors has ascertained the existence of the legal and independence requirements set forth in the Corporate Governance Code of Listed companies. The Board of Statutory Auditors has confirmed that the criteria and the ascertainment procedures adopted to assess the independence requirements have been correctly applied.

The co-opted Director, pursuant to art. 2386 of the Italian Civil Code, will remain in office until the next shareholders’ meeting.
The full text of the curriculum vitae of Federica Lolli is available at the registered offices and on the website of the Company www. in the section https://www.italgas.it/governance/consiglio-di-amministrazione/.

The Company specifies that, as far as it is aware, as of today Federica Lolli does not hold shares in Italgas S.p.A.

Italgas: approved results for the first half 2017

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Milan, 28 July 2017 – Italgas Board of Directors, met yesterday, approved the Consolidated Half-Year Report as at 30 June 2017*.

Key figures

Consolidated economic and financial highlights:

  • Total revenue: €565 million (+9.5%)
  • EBITDA: €390 million (+21.9%)
  • EBIT: €204 million (+14.6%)
  • Net profit: €140 million (+23.1%)
  • Net cash flow from operating activities: €329 million (+12.7%)
  • Technical investments: €243 million (+59.6%)
  • Net financial debt: €3,682 million

Operating highlights (including affiliates):

  • Gas concessions: 1,581
  • Number of active meters: 7.4 million
  • Gas distribution network: more than 65,000 Km

Paolo Gallo, CEO of Italgas, commented:
“We are closing the first half of 2017 with growth in all our economic and financial indicators, thanks to the positive effects of programmes to streamline processes, manage operating costs and optimise finances launched in recent months. This has resulted in increases of approximately 22% in EBITDA and 23% in net profit. These results enable us to pursue our strategic objectives with a commitment to sustainable and profitable growth for our stakeholders. In particular, we will continue with implementing the planned investments in the meter replacement, the network development and replacement initiatives and the application of digital technology solutions that will allow us to generate efficiencies and benefits for the entire Italian distribution gas system”.

*Subject to a limited audit

Summary

The results for the first half of 2017 are in line with stated market objectives and confirm that the Group has made good progress along its path of steady and profitable growth. The financial results show a 14.6% increase in EBIT and 23.1% in net profit, achieved through the optimisation of company structures and internal processes, the progress of efficiency gains, maintaining the cost of debt below 1%.

Technical investments made in the half totalled €243 million, a 60% increase compared with the same period in 2016, and in line with the objective of more than €500 million in investments by the end of 2017. Nearly 50% of the investment went towards the implementation of the replacement programme of traditional meters with electronic smart meters. In the first half of the year, over 800,000 smart meters were installed, accounting for 12% of the total meter of the Group. To date, following considerable technical, organisational and financial efforts, approximately 2 million smart meters were installed, with the aim of completing the replacement of all the meters between 2019 and 2020.

Operating free cash flow amounted to €329 million in H1, which supported the financing of the investment programme and the dividend payment for the 2016 fiscal year, while maintaining a net financial position below €3.7 billion as at 30 June 2017.

Italgas: Ms Barbara Borra resigned her office as member of Board of Directors

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Milan, 20 July 2017 – Italgas announces that as of today, the independent member of the Board of Directors of Italgas S.p.A., Ms Barbara Borra, resigned her office with immediate effect.

Ms Borra was also Chair of the Compensation Committee and was a member of the Control, Risk and related-party Transactions Committee of Italgas S.p.A.

The decision is due to supervening professional commitments, incompatible with the current office held on the Board.

As far as it is aware, the Company specifies that, as of today Ms Barbara Borra does not hold shares in Italgas.

The Company wishes to express its deep gratitude to Ms Barbara Borra for her hard work and the results achieved during her time in office.