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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.”

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

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

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).

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.

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”.

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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

Milan, May 30^th 2024 – Italgas Board of Directors met under the chairmanship of Benedetta Navarra to examine the expected financial and operating performance of the Group in 2024 and approved the guidance of the year.

 

Guidance 2024

• Revenues: ~1.8 billion euros
• EBITDA: 1.32-1.35 billion euros
• EBIT: ~0.8 billion euros
• Technical Capex: ~0.9 billion euros
• Net Debt: ~6.6 billion euros ¹
• Leverage: below 64% ²

Italgas expects a recovery in adjusted revenues for remainder of the year with a final result in line with 2023.

 

Over the span of 2024, the overall revenues from gas distribution regulated activities are expected to grow double digit driven mainly by RAB growth in Italy and in Greece and by the growth in the allowed return in Italy. Those results, coupled with the contribution of Acqua Campania, compensate the lower contribution of the Group’s ESCo activities.

 

Cost control will continue to be central to achieve further operational efficiencies across all business lines and the integration process of the companies operating in the water business recently acquired will continue.

 

Italgas plans to invest the majority of capex in Italy, confirming the effort on repurposing and digital transformation of the network. In Greece the development of the distribution grid progressed in line with the investment

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¹ The net financial debt expected for 2024 excludes the financial debt for leasing pursuant to IFRS 16

² Gas distribution regulated activities

Milan, 16^th May 2024 – Following the announcement of last 13^th May of the start of a period of exclusivity for the acquisition of 100% of the share capital of 2i Rete Gas, Italgas informs that its major shareholder CDP Reti S.p.A. underlined in a letter that “considering the strategic role of the infrastructure and energy sectors, we look favorably on the possibility of the trasaction to take place, recognizing the potential industrial value”.

“In this perspective, as shareholders, we are willing to evaluate forms of support for the implementation of the potential transaction, once the information necessary to verify the existence of the prerequisites for our intervention has been acquired” and “in any case subject to the resolutions of the relevant corporate bodies”.

Milan, 14^th May 2024 – Italgas informs that following the announcement of the start of a period of exclusivity for the potential acquisition of 100% of the share capital of 2i Rete Gas, the presentation of the Strategic Plan 2024-2030, initially planned for June 12^th 2024, is postponed.

The new date will be promptly communicated to the financial community as soon as it is finalized.