September 2020

The challenges generated by the Covid-19 pandemia in this first part of 2020 proved the resilience of Italgas business model, as well as the prompt response to the new operating conditions.

Italgas has guaranteed both the safety of the network and the continuity of gas distribution to all customers, while on 22 March 2020 a government decree stopped non-essential activities. The construction sites for laying new pipelines have resumed at the beginning of May, while activities to replace traditional meters with smart meters have resumed more slowly due to difficulties in accessing private buildings.

The results achieved in terms of operating performance, with the EBITDA increasing by 6.6% in the first six months of the year, are an eloquent witness to such resiliency.

Especially during the months with the strictest restrictions imposed to contain the Covid-19 spread, the Company firmly continued to leverage on two greatly valuable assets, innovation and digitization: competitive advantages in which Italgas continues to inves.

The digital transformation program, which started three years ago, has already brought visible benefits in terms of higher cost-efficiency, also providing better safety and flexibility during the pandemia. Counting on proprietary technologies developed inside its Digital Factory – Gas Leakage Detection, ShareView and WorkonSite – Italgas ensured continuity and safety of essential services in all the municipalities served. Moreover, in early May, the Company restarted works in several construction sites supported by its WorkOnSite App which allows, among other things, for remote verification of conformity of work-in-progress.

Generally, the wide use of digital tools by all employees, made it possible to move all employees to smart work modality while guaranteeing safety of people and security of data and information.

The strategy that drives Italgas has not changed: to create value, the priorities are still the achievement of new efficiencies and the deployment of the investment plan.

Even in the first half of 2020, Italgas has therefore continued to invest to fuel future growth.

Operating investments reached the record amount of 369.5 mn€, with the aim to develop and renew the network, as well as continue the digital transformation. This impressive level of investments was achieved despite the restrictions caused by the lockdown and marks a new record high for the group.

Moreover, through the allocation of resources coming from its cash generation, Italgas is always ready to play a key role by investing both in M&A deals and in the tenders for gas concessions, within a sector that in Italy has not found adequate concentration so far.

In the semester that has just ended, Italgas has been awarded the concession of the Belluno Atem, which brings 40 thousand new redelivery points immediately and additional 38 thousand in the future.

Even M&A continued with the acquisition of 15% of Reti di Distribuzione from AEG Coop. The Company operates in 49 municipalities in Piedmont, concentrated in the Ivrea area.

With the issue of a 500 mn€ 5-year bond – successfully concluded the last 17 June with an annual coupon of 0.250% and at a 99.205% price, against a demand that was four times the supply – Italgas proved that its access to the credit market has not been impacted amid a profoundly changed context. FitchRatings also confirmed its rating on Italgas debt at BBB+ despite the downgrade of Italian sovereign debt on 28 April 2020.

The 500 mn€ bond issue represents a pre-funding of the financial requirements related to the Group’s growth strategies.

Furthermore Italgas paid on 20 May 2020, a 2019 dividend of 0.256 euro per share, an increase of 9.4% compared to the 2018 dividend, in line with its stated dividend policy.