Italgas: Consolidated results as at 31 December 2022 approved

The Board of Directors has convened the Shareholders’ meeting for 20 April 2023

Milan, 9 March 2023 - Italgas’ Board of Directors, chaired by Benedetta Navarra, met today and approved the consolidated results as at 31 December 2022 and resolved to propose to the Shareholders’ Meeting, called to meet on 20 April 2023, the distribution of a dividend of € 0.317 per share (+7.5% compared to 2021).

Key figures¹

Consolidated economic and financial highlights:

• Adjusted total revenues: € 1,537.3 million (+12.1%)
• Adjusted EBITDA: € 1,082.7 million (+7.3%)
• Adjusted EBIT: € 622.8 million (+6.8%)
• Adjusted net profit attributable to the Group: € 395.7 million (+7.6%)
• Technical investments: € 814.3 million;
• Cash flow from operating activities: € 571.7 million;
• Net financial debt²: € 6,000.1 million;
• Net financial debt (excluding the effects pursuant to IFRS 16)³: € 5,928.1 million;

Operating highlights (including affiliates):

• Municipalities in gas distribution concessions: 2,044
• Number of active meters: 7.959 million
• Gas distribution network: 81,310 Km

Sustainability Highlights (Planet, People, Partnership)⁴: Planet

• 2 10³ tCO₂ eq Scope 1 and 2 (-12.1% on 2021);
• 5 10³ tCO₂ eq Scope 3 supply chain (-6.6% on 2021);
• Net energy consumption: 472.0 TJ (-21.0% on 2021);
• Volumes of gas distributed: 7,961.3 million Sm3 (-10.4% on 2021);
• Energy intensity⁵: 0.06 (in line with 2021);
• Gas leakage rate⁶: 0.087% (in line with 2021);
• Fugitive emissions (Sm3/km network): 90.5 (-15.2% on 2021);
• Sending 97.6% of waste produced by the Group and 94.5% of waste produced by contractors for recovery;

People

• 7% women in positions of responsibility (+2.7% on 2021);
• 8% women in the company (+1.4% on 2021);
• 129,700 hours of training delivered (+15.4% on 2021), of which 33,155 for topics relating to digitisation;

Partnership

• 286 innovative SMEs and start-ups involved in possible collaborations related to digitisation, technological innovation, energy efficiency, security and sustainability of Group processes;
• About 40% of strategic suppliers involved and trained on ESG issues.

The positive results achieved in 2022 are further confirmation of the strength of the Group, which has continued to grow even in a social, political and economic context that has been affected by the outbreak of war in Ukraine and the resulting effects on the energy markets.

Together with the growth of the economic and financial indicators and the development of operations, the sustainability targets, which had been further revised upwards in the 2022-2028 Strategic Plan, were also achieved.

Also in 2022, following on from previous years, digital transformation was at the centre of the Group's development strategies, with major investments in upgrading assets and processes as well as in upskilling and reskilling of people, in recognition of the strategic role of gas distribution networks in achieving the decarbonisation targets set for consumption.

In the period, € 814.3 million in investments were made, devoted mainly to the digital transformation, the natural gas distribution in Sardinia and the repurposing of the networks to enable them to distribute renewable gases (biomethane immediately and, in the medium term, hydrogen and synthetic methane).

In 2022, 332 km of new pipelines were laid throughout Italy. The construction of new "digital native" networks in Sardinia has, on the other hand, reached a total length of 909 km out of a total to be laid of about 1,110 km, and 13 new cryogenic LNG depots have been put into service for a total of 66 plants serving the Basins under concession.

The adjusted EBITDA at the end of 2022 amounted to € 1,082.7 million (+7.3% compared to 31 December 2021) and adjusted net profit attributable to the Group was € 395.7 million (+7.6% compared to 31 December 2021).

The consolidated balance sheet and income statement of the Italgas Group as at 31 December 2022 reflects the effects of the first consolidation, starting on 1 September 2022, of the acquisition of DEPA Infrastructure Single Member S.A. and its affiliates Attiki Natural Gas Distribution Single Member Company S.A. (EDA Attikis), Public Gas Distribution Networks S.A. (DEDA) and Thessaloniki – Thessalia Gas Distribution S.A. (EDA Thess).

Consistent with actions aimed at achieving a low-carbon economy, Italgas has decided to present its climate change strategy in a specific document: Driving innovation for energy transition⁷. In this document, following the recommendations from the Task Force on Climate-Related Financial Disclosure, the Group describes its strong commitment to the decarbonisation of both its business, with a “Net Zero Carbon Target” for 2050, and of the local areas it operates in, ensuring the best management of the risks and opportunities associated with climate change for its business. The document also covers additional targets, which the Group has set in the new 2022-2028 Sustainable Value Creation Plan⁸, which, fitting into the trajectory of the Strategic Plan, addresses business-related sustainability issues: as the Group’s every action produces impacts, we are committed to maximising the positive results and minimising the potential negative effects, generating virtuous impacts on tangible and intangible capital used in our processes.

Paolo Gallo, CEO of Italgas, commented:

Against the backdrop of a 2022 that was marked by the shock in the energy markets and the outbreak of war on Europe's doorstep, the results achieved by Italgas are further proof of the great strength of a Group capable of continuing to grow in a context conditioned by the sharp rise in the cost of raw materials and the need to meet the energy security objectives of the country.

In the past year, all key economic-financial indicators grew significantly, with adjusted EBITDA rising 7.3% to over € 1 billion, and adjusted net profit attributable to the Group increasing 7.6% to € 395.7 million: 24 consecutive quarters of growth is an achievement that only a Company with almost two hundred years of history like Italgas could achieve.

The investments, amounting to € 814.3 million, were mainly dedicated to the repurposing of the distribution network, which is now largely digital and therefore ready to accept renewable gases such as biomethane, which is already in the network, as well as hydrogen and synthetic methane, which will be introduced in the medium term. With a special focus on biomethane, Italgas is investing in facilitating the connection of production plants to distribution networks, introducing reverse flow technology to the transmission network in order to further increase the flexibility of the gas system. 

The goals set by the REPowerEU are also achievable through the contribution of energy efficiency. A sector in which we are represented by Geoside, an operator that offers technologically advanced proprietary solutions to the market that guarantee systematic energy savings; solutions that, applied to our activities, have allowed us to reduce our energy consumption by 21% in the last year. 

2022 was also the year in which Italgas made its historic return to foreign investment with the acquisition of the DEPA Infrastructure Group, alongside which we are committed to sharing our technical and technological expertise, which will be of great importance during the phase-out process, from coal and lignite, that the Greek government has decided to implement in line with EU climate targets.

Technological innovation and digitisation, the circular economy, education, diversity and inclusion are confirmed as strategic drivers to achieving the targets set in the Sustainable Value Creation Plan, which is part of the trajectory outlined in the 2022-2028 Strategic Plan in order to continue playing a leading role in the ecological transition process towards a net-zero economy.  

---

¹The consolidated economic and financial highlights and operational highlights reflect the effects of the consolidation of the DEPA Infrastructure Group on 1 September 2022.

²The item does not include liabilities for € 34.8 million consisting of the pro-rata share of the shareholder loan to Italgas Newco S.p.A, subordinated and convertible into shares, granted by the shareholder Phaeton Holding SA, which is considered not to be financial debt. In compliance with Consob Communication No. DEM/6064293 of 28 July 2006, the net financial debt including the effects of this shareholder loan as well as the effects of the debts pursuant to IFRS 16 is represented in the notes to the consolidated financial statements and amounts to € 6,034.9 million.

³The item shows net financial debt excluding the effects of the debts pursuant to IFRS 16 and Italgas Newco shareholder loan. See section 5.2.4 Reclassified statement of financial position.

⁴Highlights in reference to the Italian scope.

⁵Calculated as the ratio of total Group energy consumption and gas distributed.

⁶Volume of fugitive emissions of natural gas/volume of gas distributed.

⁷https://www.italgas.it/wp-content/uploads/sites/2/2022/10/2021-Driving-innovation-for-energy-transition.pdf

⁸https://www.italgas.it/wp-content/uploads/sites/2/2022/10/Sustainable-Value-Creation-Plan-2022-2028.pdf