Italgas: consolidated results as at 31 December 2023 approved

The board of directors has convened the shareholders’ meeting for 6 may 2024

Milan, 12 March 2024 - Italgas’ Board of Directors, chaired by Benedetta Navarra, met today and approved the consolidated results as at 31 December 2023 and resolved to propose to the Shareholders’ Meeting, called to meet on 6 May 2024, the distribution of a dividend of € 0.352 per share (+11% compared to 2022).

Highlights

• Adjusted total revenues: € 1,774.8 million (+15.4%)
• Adjusted EBITDA € 1,183.7 million (+9.3%)
• EBIT adjusted € 681.2 million (+9.4%)
• Adjusted net profit attributable to the Group: € 439.6 million (+11.1%)
• Technical investments: € 906.5 million (+11.3%)
• Cash flow from operating activities: € 555.2 million (€ 808.5 million, +22% net of ESCo flow)
• Net financial debt (excluding the effects pursuant to IFRS 16): € 6,555.2 million;
• Net financial debt: € 6,634.3 million;
• 3 10³ tCO₂ eq Scope 1 and 2, +1.5% on 2022¹;
• 0 10³ tCO₂ eq Scope 3 supply chain, -6.2% on 2022²;
• Net energy consumption: 425.0 TJ, -11.6% on 2022;

The results achieved in 2023 show all economic and financial indicators increasing and confirm the Group's growth path, uninterrupted since its return to the stock exchange in 2016, thanks to the strength of its performance and the effectiveness of the strategic choices made over time.

2023 was characterised by the intensification of operational activities aimed at achieving the targets of the 2023-2029 Strategic Plan and the Sustainable Value Creation Plan, with particular reference to the objectives of digital transformation of the network, the main enabler of the ecological transition, in a context characterised by strong international tensions, with the inevitable repercussions on the cost of energy and financial market trends.

On 30 September, in line with the corporate simplification objectives announced to the market and ahead of targets, the merger of EDA Thess and EDA Attikis into Enaon EDA (formerly DEDA) was finalised. As a result of the merger, Enaon EDA now operates 7,700 km of network with more than half a million customers served. In February 2024, the Greek Regulatory Authority for Energy, Waste and Water, (RAAEW) formalised the level of the WACC for the years 2024 to 2026, set at 8.38%, within the document on distribution tariffs.

October saw the completion of the acquisition of the business unit related to the water concessions held in Italy by the Veolia Environnement S.A. Group. The transaction and the subsequent acquisition of the stake in Acqua Campania position the group among the leading players in the sector in Italy with 6.2 million customers served directly and indirectly. The Italgas development strategy in the water sector hinges mainly on the digital transformation of water infrastructures with the aim of reducing network losses and improving service efficiency and quality levels. The water tariff method, approved in October by ARERA for the fourth regulatory period 2024-2029, supports this strategy.

In 2023, € 906.5 million of investments were made (an increase of 11.3% compared to 2022), which made it possible to lay an additional 965 km of pipelines (of which 724 km are in operation). The contribution of activities in Greece was significant, where, against an total investment of around € 106.7 million, some 600 kilometres of gas pipelines were also laid.

The adjusted EBITDA of 2023 amounted to € 1,183.7 million (+9.3% compared to 31 December 2022) and adjusted net profit attributable to the Group was € 439.6 million (+11.1% compared to 31 December 2022). This results in the proposed distribution of a dividend per share of € 0.352, equivalent to a 65% payout, up 11% from 2022, and higher than the 4% CAGR floor of 2022.

Cash flow from operating activities, net of the ESCo contribution, amounted to € 808.5 million and fully offset investments in gas distribution.

Net debt excluding IFRS effects reached € 6,555.2 million, up from last year mainly due to the increase in working capital related to ESCo's Superbonus activities, which will be reabsorbed in the coming years.

With reference to sustainability objectives, the many training, innovation, digitisation and energy efficiency initiatives implemented in both the industrial and civil sectors have allowed the Group to continue on its path towards reducing net energy consumption (-11.6%) and the ratio of fugitive emissions to kilometres of inspected network (-19.6%), even against the inclusion of the Enaon Group's contributions for 2023.

At the end of December 2023, the Group had 4,297 employees, 59 more than at 31 December 2022. The presence of women in the company reached 20.3%, with women in positions of responsibility representing 28.8% of the company personnel in this role. The investment in training amounted to 173,330 hours of training provided (+30.9% compared to 2022), equivalent to an average of 40 hours per employee, of which 27,133 hours were to support digitisation.

 Paolo Gallo, CEO of Italgas, commented:

 “28 quarters of uninterrupted growth is an extraordinary result, all the more so for a Company such as Italgas, which predominantly operates in a sector that in recent years has had to deal with a particularly unstable international environment.

 Over the past year, all major economic-financial indicators have grown significantly, with adjusted EBITDA rising 9.3%, almost reaching € 1.2 billion euros, and adjusted net profit attributable to the Group increasing 11% to € 439.6 million, resulting in a proposed dividend per share of € 0,352, up 11% from last year.

 With more than € 900 million in investments, almost € 100 million more than in 2022, we further boosted the implementation of our plans to extend, repurpose and digitise a network that is ready to accommodate renewable gas. A commitment that this year also involved the territories served in Greece with around 600 km of new "digital native" networks capable of accelerating the transition to a zero-carbon economy.

 And if 2022 marked the year of the Group's return abroad in the gas distribution sector, 2023 also saw it become one of the leading companies in the water sector with a presence stretching from Lazio to Campania and Sicily, totalling 6.2 million inhabitants served (directly or indirectly). A user basin that will soon experience the benefits of the technologies we are transferring from the gas sector with our execution capacity for an increasingly efficient service capable of returning value to the territories and communities.

With our vision of the future, based on drivers such as innovation, sustainability, circular economy and training, the Italgas Group is gradually taking the shape of a “network tech company”. In the space of just a few years, we have gone from being a gas company to also being a significant player in water, energy efficiency and IT, active in Italy and Greece, and considered a technology benchmark globally. An achievement made possible by the great commitment of our people and the desire to continue to be leaders of change”.

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¹Scope 2 market-based. With the same GWP of methane used for the year 2022, total emissions would have decreased by -3.9% (GWP of methane for the year 2023 equal to 29.8, according to the Sixth Assessment Report from the IPCC AR6, equal to 28 for the year 2022, according to the Fifth Assessment Report from the IPCC AR5).

²Values referring to Italian Scope