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Italgas: approved results as at 31 December 2017
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Milan, 12 March 2018 - Italgas Board of Directors, which met today under the Chairmanship of Lorenzo Bini Smaghi, approved the results as at 31 December 2017 and resolved to propose to the Shareholders’ Meeting the distribution of a dividend of € 0.208 per share.
The double-digit growth of all margins, the amount of investments made which exceeded Euro 500 million, and the number of acquisitions made throughout 2017 are testimony to the success of the Industrial Plan, which was approved last May.
With more than 66 thousand kilometres of network managed, 7.5 million delivery points served in 1,609 concessions, Italgas confirms its leadership position in the sector in Italy, with a 34% market share, and the third largest in Europe.
The organic investments of 2017, amounting to 521.9 million euro (+38.1% compared to 2016) confirm Italgas' plan, which envisages putting investments of over 3 billion euro at the service of the Country by 2023 on the current operating perimeter. A significant part of the 2017 investments concerned the installation of smart meters to replace traditional meters: 1.66 million were installed, bringing the total number of new installed meters to about 2.8 million, equal to 35% of the total number of meters, in line with the objective of completing the plan at the beginning of 2020.
The smart meters installation plan is the first step in Italgas' network digitalisation programme, which began in 2017 and puts Italgas at the forefront of the European gas distributors' scenario. In addition to the digitization of the Italgas network, Italgas has launched an ambitious plan to review and digitise corporate processes, with the adoption of the Public Cloud, an infrastructural solution for information systems as the first enabling factor. With these objectives Italgas intends to maintain not only its current market leadership, but also to become a reference model in Italy and Europe in terms of customer service, efficiency and competitiveness.
The strategy of consolidation of the sector and growth outlined in the 2017-2023 Business Plan has been effectively pursued also through a series of corporate operations that have strengthened the presence in areas of interest to the Group, and created the conditions to extend the networks in areas of the Country still lacking service. In this regard, the acquisitions made in the North East, Campania, Basilicata, Calabria and Sicily have to be considered , as well as those operations that allowed the Group to gain in Sardinia the leadership role in the island's methanisation project.
The financial requirements related to the net investments of 2017 were fully covered by the positive cash flow from operating activities, amounting to €549.4 million with a Free Cash Flow, before the M&A transactions, of € 109.2 million and a net financial position of €3.7 billions, at 31 December 2017.
With regards to the economic results, the adjusted operating profit of 2017 amounted to €422.9 million (+17.9% compared to 2016), and the adjusted net profit amounted to €296.4 million (+34% compared with 2016).
Paolo Gallo, CEO of Italgas, commented:
“The start of the digitalisation process, the investments and the corporate acquisitions made, the reorganization completed and the economic-financial results show the great effort made by all Italgas people in carrying out ordinary and extraordinary activities. The main indicators, such as the EBITDA and the Net Profit showed a double digit growth, respectively of +14% and +34% and reflect the strong commitment to reducing costs so that it reached, a year earlier, the operational efficiency target set out for 2018. With more than €520 million in investments, a 38% growth compared to the previous year, Italgas has become one of the key players in the Country creating value for its shareholders and for the serviced regions. Today we are firmly committed to a great challenge: to complete an in-depth process for the digitalisation of the network and corporate processes. With the completion of the plan for the installation of the smart meters and the application of sensors throughout our network, we will be able to manage the entire infrastructure according to innovative methods, criteria and algorithms that will place Italgas in a unique position within the landscape of gas distributors at the European level”. The Chairman of Italgas, Lorenzo Bini Smaghi, highlighting the strong results, commented: “The positive results of the period allow the Company to propose to the next Shareholders' Meeting the distribution of a dividend of € 20,8 cents per share, a 4% increase from the dividend distributed in 2016 and in line with our dividend policy announced to the market last year, thus confirming our commitment to an attractive and sustainable remuneration policy”.
Consolidated economic and financial highlights:
- Total revenue: €1,124.2 million (+4.3%)
- Adjusted gross operating margin (adjusted EBITDA): €781.2 million (+14.1%)
- Adjusted EBIT: €422.9 million (+17.9%)
- Adjusted net profit: €296.4 million (+34%)
- Technical investments: €521.9 million (+38.1%)
- Net cash flow from operating activities: €549.4 million
- Net financial debt: €3,720.3 million
Operating highlights including affiliates’ data:
- Gas concessions: no. 1,609
- Number of active meters: 7.5 million
- Gas distribution network: more than 66,000 Km.