Italgas Preferred Bidder in the tender for the privatization of DEPA Infrastructure S.A.

Milan, 9 September 2021 – Italgas announces that it has been selected as “Preferred Bidder” in the tender process for the acquisition of 100% of the share capital of DEPA Infrastructure S.A., currently owned by the Hellenic Republic Asset Development Fund S.A. (HRADF) and Hellenic Petroleum S.A. (HELPE).

 

DEPA Infrastructure holds a 51% stake in Thessaloniki – Thessalia Gas Distribution S.A. (EDA Thess), a 100% stake in Attiki Natural Gas Distribution Single Member Company S.A. (EDA Attikis) and a 100% stake in Public Gas Distribution Networks S.A. (DEDA), the three major gas distribution companies in Greece.

 

Italgas CEO Paolo Gallo commented:

 

“We are the ideal partner to support the Greek government in the development of a key energy infrastructure that will allow the country to rapidly proceed along the path of decarbonisation of the economy. Thanks to a new generation of «native digital» grids – extensive, flexible and smart – we will support the phase-out programme from coal and lignite via natural gas, while at the same time promoting the energy transition to renewable sources such as biomethane, e-gas and green hydrogen. We will bring to Greece the experience and implementation capability that we have gained in almost two centuries of history, together with the skills developed in the digital transformation of the network and the Digital Factory that today place the Italgas Group in a position of undisputed technological leadership in the sector worldwide”.

 

Alberto Dell’Acqua, Italgas Chairman, stated:

 

“I am proud of the result achieved, which rewards the Italian entrepreneurial capability as well as the technical and technological leadership of Italgas. In recent years, the company has been able to continue to grow and is now recognized as an international benchmark for the sector also in the perspective of energy transition”.

 

 

Italgas has agreed to pay a consideration equal to 733 million Euro for 100% of DEPA Infrastructure equity.

 

Italgas will fund the transaction via a fully committed financing package.

 

The signing of the agreements for the acquisition is subject to completion of further steps envisaged by the tender procedure and by local legislation, while the closing of the transaction is expected by year-end, once the required authorizations have been received (including anti-trust clearance).

 

Italgas has been assisted by J.P. Morgan as Sole Financial Advisor and Sole Underwriter of the financing, by Milbank and Karatzas and Partners as Legal Advisors, by Grant Thornton as Regulatory Advisor and by Mazars as Accounting and Tax Advisor.

 

Conference call 

At 3pm CET on Thursday September 16, 2021, a conference call will be held to present the transaction to financial analysts and investors. The presentation may be viewed, through audio webcasting, on the Company’s website (www.italgas.it). In conjunction with the conference call, the supporting material for the presentation will also be provided in the “Investor Relations/Presentations” section of the website.

Italgas and Salesforce: Strategic agreement for the development of a solution to digitally transform the Capital Deployment activity

Milan, July 29, 2021 – Italgas, Italy’s leading player in gas distribution and third in Europe, and Salesforce, global leader in Customer Relationship Management (CRM), signed a strategic agreement aimed at optimizing Italgas Capital Deployment through advanced digital solutions.

The agreement is part of a broader transformation journey launched in 2017 with over 2 billion Euros investment, which aims at enabling Italgas to become the world’s first utility with a fully digital network.

The agreement will see Bludigit, the Italgas Group’s IT new company, leverage the Salesforce platform to support capital deployment, create new ways of working and boost productivity across the Group, ensuring investments are effectively delivered on time and within budget. This includes:

  • optimizing each phase of capital deployment (from investment planning, to engineering design, permit requests to procurement, project execution to operations and maintenance), through the introduction of smart and flexible functionalities;
  • automating information exchange across the different design and execution phases;
  • providing end-to-end visibility across the entire investment deployment plan, to boost productivity and remove potential process bottlenecks.

 

“If I had to represent the digital transformation journey commented Italgas CEO Paolo Gallothe most faithful image would be like a continuous flow. It would be a paradox if we were to consider it a conclusive process because there are always new opportunities to simplify projects and daily operations and make them more efficient. The agreement with Salesforce will enable us to further improve the efficiency of our processes and give new boost to the achievement of the sustainability targets included in our Strategic Plan that will contribute to the energy transition and the net zero goals”.

 

“Salesforce is delighted to support Italgas on its digital transformation journey,” said Gavin Patterson, President and Chief Revenue Officer, Salesforce. “With the Salesforce Customer 360 platform, Italgas will be able to build a single source of truth across the entire capex cycle, breaking silos through effective data integration and visualization and creating a step change in process efficiency”.

 

Italgas and Salesforce: Strategic agreement for the development of a solution to digitally transform the Capital Deployment activity

Sardinia: acquired from Conscoop the whole share capital of Isgas33

Milan, 13 July 2021 – Italgas today completed the acquisition of the whole share capital of Isgas33, the company holding the concession to manage the gas service in Basin 33 in Sardinia, from Conscoop, cooperative society based in Forlì.

The acquisition, announced on 28 January, was finalised following the fulfilment of the conditions set out in the sale and purchase agreement.

In particular, last January Isgas33 completed the conversion from propane air to natural gas of the distribution network in the municipalities of Quartu S. Elena, Monserrato, Quartucciu, Settimo S. Pietro and Sinnai.

More specifically, the company’s assets include:

– 242 km of network;

– Around 700 active PdR (redelivery points);

– 1 LNG plant with a capacity of 60 cubic metres.

The value of the transaction is EUR 25 million (enterprise value), equal to the estimated RAB for the company’s assets, adjusted for the value of the financial debt at closing.

With the completion of the transaction, the number of Basins in which Italgas is present in Sardinia through its subsidiary Medea has risen to 18 (out of 38). Furthermore, with the acquisition of this network, Italgas, through its subsidiary Medea, has: (i) approximately 1,400 km of networks for natural gas, two thirds of which are already in operation, (ii) about 250 km of LPG-fuelled networks whose conversion – in progress – will be completed by 2021 and (iii) approximately 600 km of propane-fuelled networks in the municipalities of Cagliari, Sassari, Nuoro and Oristano, which will be converted to natural gas. The end customers currently served are 50,000 with the aim of growing them to 150,000 over the next few years. All networks are and will be fully digitalised and equipped for the installation of fibre optics to serve local communities.

Bludigit announcement

Italgas announces the birth of Bludigit, the new company that brings together all the Information Technology activities of the Group. It will give a new boost to innovation and digital transformation.

The new organization, headed by Marco Barra Caracciolo, formerly CIO of Italgas, can rely on the skills of around 100 people and will allow both to increase the Group’s internal efficiency, making the digital transformation even more central, and to offer the market the new proprietary technological solutions.

Rome, 8 July 2021 – Bludigit S.p.A. is born, the new Italgas company in which all the Group’s Information Technology activities and the Digital Factory, the technological innovation hub created to develop digital solutions that enable business transformation, have been concentrated.

The new company, which can immediately rely on the skills of over one hundred people, controls assets worth around 100 million euros and more than 100 contracts for a total value of over 300 million euros.

Bludigit is the natural evolution of the digital transformation path started by Italgas in 2017 and will allow further rationalization of IT activities in terms of efficiency and internal cost control while developing new synergies inside and outside the Group in a service provider approach. Through the new company, the Group will offer cutting-edge proprietary digital solutions, making its in-house developed skills and applications available to other operators in the energy and infrastructure sector.

President and CEO of Bludigit is Marco Barra Caracciolo, formerly CIO of Italgas. With a degree in Electronic Engineering, 53 years old, Barra Caracciolo has a deep knowledge of the IT world, having held relevant positions in this sector.

Paolo Gallo, CEO of Italgas, affirmed: “Digital transformation is at the heart of our strategy, the main enabler of the growth path that will allow us also to support the energy transition to achieve the EU 2030 and 2050 targets. Four years ago, we started our digitalization process with a visionary choice, the adoption of the public cloud, and then we continued with a deep business transformation in the management of assets, processes, and people. And the evolution goes on. Today, with the birth of Bludigit, we aim to give a further boost to this path and to enhance the proprietary technologies developed in our Digital Factory by offering them also to operators from different sectors”.

Italgas acquires from CPL Concordia control of the company European Gas Network (‘EGN’)

Milan, 22 June 2018 – Italgas has signed today a binding agreement for the purchase from CPL Concordia of:

  • a 60% controlling stake in EGN (“European Gas Network”), which directly and indirectly[1] manages approximately 60,000 users and 37 concessions for the distribution of natural gas in Sicily, Calabria and Campania.
  • 100% of Naturgas S.r.l., operator of the natural gas distribution service in San Giuseppe Vesuviano (NA), with approximately 2,700 users served;
  • 100% of Fontenergia S.r.l., the gas service operator in the pools 22 of the Sardinia region, with over 7,000 users temporarily served by LPG.

 

The total valuation (enterprise value) of the companies involved in the agreement has been set at €116 million. At the closing of the transaction, the amount will be paid in full in cash, net of net financial debt, as at 30 June 2018.

The agreements for the acquisition of EGN provide a put and call option on the remaining 40% stake held by the seller, exercisable from the 6th month from the closing date of the transaction and at the same price per share set at the closing for the 60%, net of the the amount of dividends distributed by the company.

The transaction is expected to be completed by the end of 2018 and is subject to the fulfilment of certain conditions precedent.

Paolo Gallo, Chief Executive Officer of Italgas, commented as follows:

“As illustrated in the last few days during the presentation of the 2018-2024 Strategic Plan, M&A operations are one of Italgas’ areas of growth and consolidation in the sector: the 70,000 redelivery points acquired today demonstrate Italgas’ ability to achieve its objectives (110,000 new points in 2018). In one year, Italgas has acquired approximately 140,000 new active redelivery points and a portfolio of concessions with a high development potential. We continue to invest in areas of the country, such as Sardinia and Southern Italy, that need modern and technological infrastructure, thus creating the conditions to create value for all citizens, for our shareholders and for the Italian gas distribution system as a whole”.

[1] EGN in its turn controls 100% of the companies CPL Distribuzione S.r.l., Ischia Gas S.r.l. and Marigliano Gas S.r.l.

CEOs of EU leading gas distributors met Violeta Bulc, Commissioner in charge of Transports

Brussels, June 21st 2018 – Edouard Sauvage, CEO of GRDF (France), Dan Pantilie, CEO of Distrigaz Sud Retele (Romania), Gabriel Sousa, CEO of Galp Gás Natural Distribuição (Portugal), Nuria Rodriguez Peinado, CEO of Nedgia (Spain), Antoni Peris, Managing Director of Regulated Business of Gas Natural (Spain) and Paolo Gallo, CEO of Italgas (Italy) met today Violeta Bulc to present the benefits of natural and renewable gas for the decarbonisation of transport in Europe.

One day after a workshop organized by the GD4S coalition on the contribution from natural and renewable gas for the decarbonization of transports, CEOs seized this opportunity to present to Commissioner Violeta Bulc success stories of local authorities which choose gas solutions for their urban mobility. Gas solutions are already available all over Europe and represent a credible solution to decarbonize transports.

They urge the Commissioner to unleash the potential of natural and renewable gas to accelerate transport decarbonization and allow the EU to reach its climate targets. They present key requests:

  • The application in all policies of a technology neutrality approach to ensure an effective decarbonization of the transport sector: the whole fuel supply chain should be taken into account and all technologies should be treated on equal foot to ensure a more realistic comparison of the environmental impacts of the different fuels
  • The development of a well-to-wheel approach instead of a tailpipe emissions approach for the heavy-duty vehicles segment: it is fundamental to consider the entire fuel and vehicle supply chain – not to mention battery production and disposal – to address the full benefits of renewable fuels such as biomethane
  • A consistent approach between Energy and Mobility European legislations for the light-duty vehicles segment: ensuring a real consistency between clean mobility legislations and the Alternative Fuels Infrastructure Directive (Dafi) will strengthen the current framework and allow investments

The GD4S coalition believes in the potential of renewable gas as a credible solution for the future of clean mobility in the EU. Achieving the European climate targets for transport sector will not require a single solution but a pool of different and efficient tools which could integrate, e-mobility and gas solutions.

The Gas Distributors for Sustainability (GD4S coalition), brings together the five largest gas distribution system operators (DSOs) in France, Italy, Spain, Romania and Portugal. Together we have 86% of gas vehicles in the EU and our companies represent 25 million customers in Europe. Together, we are committed to participate in the EU clean energy and clean mobility and we aim at raising awareness on the potential of natural gas and biogas.

Italgas presents its 2018-2024 strategic plan

Milan, 13 June 2018 – Chief Executive Officer Paolo Gallo is today presenting to analysts and investors the Italgas Group’s Strategic Plan for the 2018-2024 period, which was approved yesterday by the Board of Directors chaired by Lorenzo Bini Smaghi.

Italgas’ growth objectives are based mainly on a significant programme of investment, significantly increased compared to the previous Plan, in a market that is still fragmented and which offers various opportunities for business development, leadership consolidation and the creation of value for shareholders.

 

Highlight

 

  • Investment plan, including M&A, of EUR 4 billion
  • Additional investments of EUR 1.6 billion in the acquisition of third-party networks following gas tenders
  • Programme to digitise networks and processes and launch Digital Factory in 4thQ 2018
  • Dividends up to 4% per annum with upside potential to 60% of consolidated net income
  • Investment plan (without tenders) of EUR 4 billion

In the period 2018-2024 Italgas has an investment plan of €4 billion, an increase of more than 30% compared with the previous plan. This includes €2 billion for the development and improvement of the network, around €800 million for technological innovation and digitization (including the completion by 2020 of the installation plan for smart meters), approximately €450 million for the construction of gas networks in Sardinia and, finally, approximately €420 million in total for growth through M&A operations and the related technical investments to be made on the newly acquired networks. With the implementation of this Investment Plan, the number of meters managed will grow from approximately 6.6 million (at 31/12/17) to approximately 7.1 million at the end of the Plan (excluding affiliates).

 

In addition, a further growth option is represented by sector tenders with total investments estimated at approximately €1.6 billion, including both acquisitions of third-party networks and technical investments to be made in the areas awarded, with an increase in the number of meters that will reach 8.5 million (excluding affiliates) at the end of the Plan period.

 

  • Consolidated Rab: the implementation of the planned organic investments will increase the consolidated Rab by an average of 3.2% per annum over the period of the Plan and by an average of more than 5.3% per annum, considering the expected evolution of the tenders.
  • Operational efficiency: continuous focus on the optimisation of operating costs with the aim of improving the efficiency targets set by the Regulator.
  • Capital structure and financial efficiency: constant focus on optimisation of debt structure, with the objective of fully covering, thanks to the significant operating cash flow, both the investment plan and the return on risk capital guaranteeing also an appropriate financial flexibility to support development.
  • Dividend policy: for the years 2018-2019-2020 a dididend will be distributed equal to the higher of (i) the amount resulting from the 2017 DPS (€0.208) increased by 4% per annum and (ii) the DPS equivalent to 60% of the consolidated net income.

Paolo Gallo, CEO of Italgas, said:

“The priorities of the Industrial Plan are organic growth supported by a robust plan of investments, M&A operations, competitiveness improvement and quality of service provided to customers thanks to programmes of technological innovation. In this context, the plan to install smart meters, which represents the first step in the process of digitising networks and which we will complete in early 2020, is particularly important, as is the launch by the end of 2018 of the Digital Factory which will be the engine for the full digitization of business processes. The adoption of digital technologies will allow further improvements in operational efficiency and the improvement of services offered to commercial companies and end customers. The solid financial structure will allow us to take further opportunities to create value while maintaining financial conditions in line with our creditworthiness. The effect of these actions, which benefit the country and the entire Italian gas distribution system, also result in a strengthening of our dividend policy which, based on the 2017 dividend of €0.208, will see an increase of 4% for the next three years, but with a potential upside to a 60% of the consolidated net income”.

Italgas: completed the acquisition from CPL Concordia of 6 companies active in South of Italy

Milan, 31 May 2018 – Italgas has executed today the acquisition from CPL Concordia of a 98% stake in the capital of 6 companies operating in Southern Italy, which as a whole hold the concessions for the construction and management of the gas network in 16 municipalities.

The companies involved are Baranogas Reti, Ischia Reti Gas, Progas Metano, Grecanica Gas, Favaragas Reti and Siculianagas Reti. Concessions are already in operation in 4 municipalities, some of which are under construction, others to be built.

The overall value (Enterprise Value) of the assets involved in the transaction concluded today has been set at 16.7 million euros. Net of the debt, the amount paid to CPL Concordia for 98% of the share capital of the companies was 4.6 million euros.

The total investment for the construction of the networks amounts to approximately 95 million euros, partly financed by public subsidies. To date, works already carried out amount to approximately 32.5 million euros, gross of subsidies.

With today’s acquisition, 7 M&A operations have been completed between 2017 and 2018 – including the purchase of Seaside, one of the largest Italian Energy Service Companies – for a total of 138 new municipalities under concession, in line with the growth strategy announced to the market with the Strategic Plan 2017-2023 which, pending the launch of the tenders, provides for the development of the Group through the acquisition of small and medium-sized operators.

Italgas: completed the acquisitions of Medea, the Sassari gas company

Milan, 6 April 2018Italgas has today completed the acquisition of 100% of Medea S.p.A., the gas distribution company of Sassari. The total value of the transaction has been set at EUR 24.1 million and has been paid cash in the amount of EUR 15.9 million and the remaining through taking charge of the debts of the Company.
Medea, based in the second largest city in Sardinia, currently serves around 13,000 customers, within a potential pool of around 30,000 users, and distributes on average every year a volume of gas exceeding 5 million cubic meters.
Sassari‘s distribution network, planned for easy conversion to natural gas, extends over 190 kilometres and is currently supplied with LPG.
Following its entry into the Italgas Group, Medea represents the main company base in Sardinia where Italgas presence also includes the assets of Ichnusa Gas, the recently acquired company that holds 12 concessions for the construction and operation of gas distribution networks in 81 municipalities on the island.
Paolo Gallo, CEO of Italgas, commented as follows:
In Sardinia we are implementing an important part of the growth strategy set out in the 2017-2023 Industrial Plan. With the 200 million euros of investments already planned for the coming years, the gas areas managed by us will be equipped with innovative networks and services. We will exploit the best solutions that technology now makes available during the construction phase: digitization of networks, interconnections between different pools, smart meters, extensive use of optical fibre for data transmission will allow us to manage the networks according to innovative methods and criteria, while waiting for the realization of the infrastructures identified by the National Energy Strategy to bring natural gas to the region”.

Italgas turns to Microsoft Cloud Computing for digitalizing networks and processes.

Milan, March 28, 2018Italgas, Italy’s leading company in the natural gas distribution sector and Europe’s third largest operator, officially announces its collaboration with Microsoft on a digital transformation project focused on Cloud Computing. As part of the 2017-2023 Industrial Plan, Italgas has, in fact, developed an innovation program that is unique in the gas sector and focuses on digitalizing assets and processes, on Industrial IoT and on dematerialization and automation.

At the heart of this plan is the cloud strategy and the decision to migrate the data center onto Microsoft Azure, as well as adopting the Office 365 productivity platform. The ambitious plan, now in its start-up phase, will be completed by August 2018, with the aim of managing the entire Italgas system in accordance with innovative criteria designed for achieving the highest levels of efficiency and flexibility.

Together with its subsidiaries, Italgas employs more than 4000 people, manages a network of around 66,000 Km – 7.5 million users served in 1600 municipalities – and has decided to turn to the public Cloud, preparing a new Infrastructure as a Service, migrating its previously on-premises applications and IT assets and setting up a new cloud-connected network. The reason for choosing Microsoft Azure is also because of its widespread availability – 140 countries and 17 languages – and the $14 billion investment that Microsoft dedicates to its global data center infrastructure to make it consistently reliable and state-of-the-art.

Microsoft’s public cloud platform offers massive computational and storage capacity that is suitable for managing the needs of a complex network and for supporting the company in a path of flexible growth, responding in a scalable way to the foreseeable peaks in demand associated with tendering for services assignment and optimizing IT costs. All of this comes with an assurance of security in terms of business continuity, a strategic element in a crucial sector such as that of energy, but also from the point of view of privacy, in line with the new European General Data Protection Regulation. Azure’s interoperability moreover ensures compatibility with the heterogeneous IT environment within Italgas, safeguarding previous investments in a logic of sustainable innovation. Azure was also chosen because of its capacity to support the company’s technological evolution, enabling the development of innovative solutions in the areas of Analytics, IoT and Big Data. In the long term, once the migration process is complete, Italgas could infact benefit from the functionality of remote monitoring and predictive maintenance and will, overall, be capable of further improving the quality of its service thanks to a more effective use of its data heritage.

Again, to increase efficiency and achieve operational excellence, another key element of Italgas digital transformation is the adoption of the cloud productivity platform Office 365, that will involve over 3,000 users by August. An opportunity to empower people and introduce a new way of collaborating keeping with the times. In a sector where working outside the office is common, Office 365 will make it possible to access data and applications securely, anywhere and at any time, contributing, with a greater empowerment of all the organization’s members, on the company’s journey towards growth.

Moving all our applications to the Cloudsays Francesca Vergara Caffarelli, CIO of Italgasis a key step in the digitization process that we are undertaking. In addition to the immediate benefits of increasing efficiency and reliability, it allows us to have access to all of Microsoft’s new technologies, both now and in the future, and to create the technological base required for transforming the corporate processes through the use of innovative technologies”.

We are proud to be working with a company like Italgas: innovation is an important component of the company’s strategic plan and we are certain that, thanks to the networks and processes’ digitization through the cloud, Italgas will be able to increase its efficiency and competitiveness. We hope that such an advanced digital transformation project in the world of Oil&Gas will inspire other companies, contributing to the socio-economic development of the country. Cloud computing can naturally make a difference in this way, by optimizing the processes, allowing flexible management of networks, facilitating the safe exchange of data and enabling new forms of collaboration and productivity. Opting for the Cloud means looking to the future and being ready to seize the new prospects associated with the Industrial IoT and Artificial Intelligence,says Vincenzo Esposito, Head of Enterprise Commercial Division, Microsoft Italy.

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