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Milan, 22 February 2019 - The Board of Directors of Italgas, which met today under the Chairmanship of Lorenzo Bini Smaghi, approved the results as at 31 December 2018 and resolved to propose to the Shareholders’ Meeting the distribution of a dividend of € 0.234 per share (+12,5% compared to 2017).

 

Key figures
Consolidated economic and financial highlights vs 2017:
  • Total revenue: €1,176.2 million (+4.6%)
  • EBITDA: €839.5 million (+8.2%)
  • EBIT: €453.5 million (+8.5%)
  • Net profit: €313.7 million (+7.1%)
  • Technical investments: €522.7 million (+0.1%)
  • Net cash flow from operating activities: €718.7 million (+30.8%)
  • Acquisitions: 7 transactions completed, 110.000 RdP, enterprise value of €215 million
  • Net financial debt[1]: €3,814.3 million (+2.5%)

 

Operating highlights including unconsolidated investee companies:
  • Municipalities in gas distribution concessions: 1,808
  • Number of active meters: 7.56 million
  • Gas distribution network: around 70 thousand Km

The economic-financial results obtained by Italgas in 2018, the amount of investments made, acceleration of the digitalisation project and the acquisitions completed provide an effective summary of the goals reached in conclusion of the company management first cycle, started in November 2016 with the company’s return to the Stock Market.

Organic investments in 2018, amounting to €522.7 million, provided a further boost to the attainment of the 2018-2024 Plan objectives: over €4 billion to be invested for the benefit of the entire Italian gas distribution system.

More than a third of investments in 2018 were dedicated to replace traditional meters with smart meters, one of the key elements of the networks digitalisation project launched in 2017.

Also considering the investee companies, 1.8 million smart meters were installed, bringing the total to around 5 million, equal to 59.1% of total meters[2], in line with the objective of completing the plan by the first few months of 2020.

The transfer of information systems to the Public Cloud, which took place in November, represented the enabling factor for the digitalisation of company processes too. The “digital transformation” will allow the Group to reinforce its market leading position and become a unique reference model in terms of the quality of customer service, efficiency and competitiveness in Italy and in Europe.

The corporate acquisitions made it possible to reach the objective of Group growth and sector consolidation established in the 2018-2024 Business Plan, also strengthening the company’s presence in the areas of interest of the Group and creating the conditions for extending the networks to areas still without service as of today. The corporate acquisitions made in Campania, Basilicata, Calabria and Sicily are incorporated in this context, as well as the acquisitions that allowed the Group to enter Sardinia, still lacking the infrastructures for gas distribution, a region for which the 2018-2024 Business Plan provides for a total investment of over €450 million.

The requirements related to the 2018 investments were fully met by the positive cash flow from operating activities, amounting to €718.7 million, with a Free Cash Flow, before the M&A transactions, of €247.4 million and a net financial position of €3.8 billion as at 31 December 2018, with a fixed rate percentage amounting to 85.6% of the total debt.

Careful operating management and continuous cost control allowed the Group to obtain significantly better economic results: operating profit in 2018 reached €453.5 million (+8.5% compared to 2017) and net profit totalled €313.7 million (+7.1% compared to 2017).

With roughly 70 thousand kilometres of managed network, 7.56 million redelivery points served and 1,808 concessions, Italgas further strengthens its leading position in Italy, with a market share of over 34%, in terms of number of managed RDPs, and the third largest operator in Europe[3].

 

Paolo Gallo, CEO of Italgas, commented:

“The excellent results achieved in 2018 are the outcome of the committment to pursue and improve the target set by the Strategic Plan and mark a path of growth that began in November 2016 with the return of the Company to the Stock Exchange that allows to create value for shareholders and for the communities we serve. The main figures, such as EBIT and Net Profit, show significant increases also for this year, equal to +8.5% and +7.1% respectively, and reflect the efficient operating management that led to a 3% reduction of costs compared to the previous year and 19% compared to 2016, for a total of about 80 million euro, despite an expansion of the Company business perimeter. Italgas Group further grew with the acquisitions made in the year, strengthening its presence in areas of the country that have a great development potential; areas where we expect significant results in the coming years. Through these transactions, we have acquired new distribution networks for a value of approximately 215 million euros and increased the number of redelivery points, exceeding the target set for 2018. More than 500 million euros of investments have been devoted to the development and improvement of the service, energy efficiency and technological innovation, as well as to the creation of a Digital Factory, which since last November has become the engine of the digital transformation of our business processes. In the next few years this Company will become a reference model for dynamism, attention to the environment, to quality of service and the energy needs of the communities. This will be achieved thanks to the daily commitment and value of the people who work with us”.

 

The Chairman of Italgas, Lorenzo Bini Smaghi, highlighting the robustness of the results, commented:

"The positive results achieved in the period allow us to propose to the next Shareholders' Meeting the distribution of a dividend of 0.234 euro per share, an increase of 12.5% compared to the dividend distributed for 2017. This  confirms our commitment to an increasingly attractive and sustainable remuneration policy".

 

[1] Excluding € 49.9 million of leases debt pursuant to IFRS 16 and € 21.0 million of EGN third party shareholder loan. For further information, plaese refer to the table on pag. 10.

[2] Excluding non-consolidated investees, in 2018 Italgas installed 1.65 million new meters, of which 1.50 million replaced traditional meters, bringing the current total of meters installed to 4.4 million, equal to 58.6% of all meters.

[3] Including unconsolidated investees

Italgas: approved results as at 31 December 2018

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