Outlook: expected performances

Although 2021 is still marked by the emergency state due to Coronavirus, we currently do not detect significantly negative impacts on development and investment initiatives linked to the deterioration of the macroeconomic context.

Based on the positive results achieved in 2021 and in the first quarter of 2022, marked by the constant growth of all the main economic indicators, we will continue to pursue our strategic objectives despite a context marked by the sharp rise in energy prices and the Russian-Ukrainian conflict.

The state of emergency declared by the Italian State for the health emergency due to the Coronavirus was formally concluded on March 31, 2022. As of today, we have not appreciated any significant negative impacts of the pandemic on development and investment initiatives.

With reference to the customer base/sales company and their solidity, we underline that the rules for user access to the gas distribution service are established by ARERA and are regulated in the Network Code. In this moment, we do not estimate any significant negative consequences on the expected receipts from gas sales companies that could affect our financial balance, as well as on the regularity of payments by counterparties.

 

With reference to the impacts, even potential ones, on revenues, costs, investments and expected cash flows deriving from the limitations imposed during the period by the mentioned health emergency, we have not found, and we do not find, evidence such as to predict significant negative effects on the year 2022. However, in May 2022 we are unable to estimate any material adverse effects on the economic, financial and equity prospects in the coming periods if the health emergency situation should recur in critical forms.

With regard to the Russia-Ukraine conflict, we confirm that we do not have production activities or personnel located in Russia, Ukraine or in countries geo-politically aligned with Russia, nor to entertain commercial and / or financial relationships with such countries.

However, in a market already characterized by restrictions and slowdowns in the supply chain, especially in relation to components, it is not excluded that the situation of political-economic tension induced by the conflict may exacerbate these difficulties and have repercussions, in a way that cannot be estimated or predictable, on the effectiveness and timeliness of the group’s ability to procure.

 

With reference to the risk of lower gas volumes entered into the national infrastructure, the current tariff regulation does not determine, as is known, an exposure for distributors to variations in the volumes of transported gas. In any case, the risk of a prolonged interruption of the natural gas injection into the distribution infrastructures, which could significantly negatively affect the Group’s business continuity, however it would be mitigated by the actions already in place and/or subject to observation at national and European level such as the optimization of storage, the diversification of supply sources, the increase in national production.

As regards the predictable evolution of the business, for 2022, technical investments of between 700 and 750 million euros and adjusted revenues of more than 1.4 billion euros are expected, with adjusted EBITDA of 1.00 to 1.03 billion euros and adjusted EBIT of between 570 and 590 million euros. These results do not consider the contribution of DEPA Infrastructure. Including the cost for the acquisition of DEPA Infrastructure and the impacts of IFRS 16, net debt at the end of 2022 is expected to be around 5.9 billion euros.

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