To invest and grow not only to consolidate our market positioning, but also to help transform the gas infrastructures in Italy, make our company increasingly efficient, invest in innovation to play our part in Italy’s digitisation: these are the priorities in our 2018-2024 Strategic Plan.
Our company’s return to the stock exchange at the end of 2016 marked a change in pace, imposing acceleration on all our activities. We announced a €5.6 billion investment programme for the period 2018-2024, with the goal of developing an increasingly efficient, technologically advanced network and strengthening our distribution leadership in Italy.
Our priorities are the development and improvement of the network, operating and financial efficiency and sector consolidation, mainly through calls for tender. In parallel, we’ll constantly be working on the digital innovation that will transform our network.
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The priorities of the Strategic Plan are organic growth supported by a robust investment plan, M&A transactions, improved competitiveness and quality of service provided to customers thanks to technological innovation programs.
Clear strategy up to 2024
Investments of 4 billion to sustain growth and M&A operations, 5.6 billion considering gas tenders
Over the course of the 2018-2024 Strategic Plan, we will dedicate €4 billion to our growth (including the acquisitions, but without taking into account gas tenders). This will allow the regulatory asset base (RAB) to grow by 3.2% per year on average (CAGR) over the period of the plan compared to 5.8 billion euros at the end of 2017, with an expected growth of over 5.3% if the expected evolution of the tenders is considered.
Development, renewal and improvement of the network: by the end of 2024 we will have dedicated €2 billion to grid replacement and modernization operations (in particular for the replacement of cast iron sections), as well as the extension of our network with new connections and the development of energy efficiency.
- Digitisation: we will invest around €800 million in digital innovation initiatives. In this context, 500 million will be dedicated to the traditional meter replacement program with smart meters for the Mass Market segment, which will be completed by the first half of 2020. We are also transforming our network, that will be gradually digitized with an investment of over €300 million. This will allow us manage our network according to innovative methods, criteria and algorithms that will make it unique in Europe. In November 2018, we completed the migration of our applications systems on the cloud and also launched the Digital Factory, the real engine for the digitalization of our business processes. Finally, we will invest an additional €300 million in initiatives instrumental to the remunerated distribution activity in the centralized RAB, especially for the cloud strategy.
- Sardinia metanisation: we have become the main operator of the island, acquiring the management of about a third of the 38 pools of users defined by regional subdivisions. Over the period of the plan, the investments planned for the methanisation of Sardinia are about 450 million euros, and we will simultaneously develop technological innovation programs in order to serve these areas with most advanced networks and services.
- Growth through M&A transactions: the 2018-2024 strategic plan expects to allocate approximately €420 million to new M&A initiatives to accelerate the growth and improvement of our competitive positioning. The acquisitions and related planned investments will allow us to bring the number of meters handled to about 7.1 million in 2024. Our M&A policy is driven by the desire to consolidate our presence in interesting ATEM and invest in areas of the country that do not benefit from natural gas infrastructure yet. This is the rational at the base of the acquisitions already realised in 2017 and over the course of 2018 in the North East, in Campania, Basilicata, Calabria and Sicily.
See the box dedicated to new technologies for more information about our innovation initiatives.
New efficiencies in operational and financial areas
- Operational efficiency: the plan launched at the beginning of 2017 has already reached a year earlier, with a year in advance, the objective of a reduction in operating costs of 15% compared to 2016. Within the 2018-2024 plan, we will continue focusing on operating costs optimization, with the aim of improving the efficiency targets set by the regulator. Our efficiency path will be supported by a continuous improvement program, which concerns in particular the review of purchasing strategies but also the adoption of new technologies for energy efficiency: in this way, we expect to improve the quality of services offered and the environmental impact. By the beginning of 2019, we will also provide for the complete replacement of the company fleet with vehicles powered by natural gas.
- Financial efficiency and capital structure: we have launched a medium-term and long-term issues programme and this has allowed us to make our financial structure even more solid and efficient. As part of the 2018-2024 plan, we will continue the actions aimed at optimizing our financial structure. We intend to preserve a cost of debt (currently just above 1%) at excellent level and the financial flexibility necessary for our development. Strong cash generation will allow us to maintain our credit rating at and cover the investment plan and shareholder remuneration.
Increase the market share through tenders
- A decisive role in the industry consolidation: tenders represent a further way to growth. Over the period of the plan, we will invest 1.6 billion euros to participate in the tenders that will be announced, of which 1.1 billion for the acquisition of third party networks in the areas where we will obtain the concessions, and 500 million dedicated to development, maintenance and efficiency of the networks acquired through the tender. Our goal is to increase our market share in terms of redelivery points from the current 30% to a share close to 40% at the end of the plan, moving from 6.6 million at the end of 2017 to around 8.5 million in 2024. Our strategy is supported and supported by the sustainability plan, which has defined 5 strategic pillars and 14 objectives to be achieved. Attention to our people, to the areas where we operate and to our customers permeates our actions, as well as the awareness of the key role of natural gas in the process of decarbonization.
New technologies to position us at the forefront in the sector
Digital innovation is a keyword and a priority for our management. Through new technologies we have the opportunity to give a “digital identity” to the network. This is the industrial Internet of Things (IoT): numerous sensors distributed across the network that can communicate and interact with each other and with the outside environment to provide information and make decisions, for example to regulate certain operating parameters. Digitisation will therefore allow predictive maintenance - acting before the problems arise - to be carried out, and also give the sales companies more information on gas consumption by the end customers. Digital technologies are also transforming how our technicians work. They can now perform a variety of activities in the field which until a short time ago required their presence in the office. We are taking our first steps into this realm, also profiting from benefits offered by the Public Cloud.
The Digital Factory, launched in November 2018, will be the real engine for the digitalization of business processes: multifunctional teams will develop IT solutions in Agile and Time-Boxed mode.
ultimo aggiornamento 02 April 2019 01:10 UTC