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Italgas Earnings Release 2021
4178_10-q_2021-07-27_81038f3b-3c9d-4c58-b26f-027e3b8edf3a.pdf
Earnings Release
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1H 2021 RESULTS KEY HIGHLIGHTS
Despite the DL570 effects, strong and accelerating growth led by RAB increase, service to clients and costs control
(*) excluding post tax cost of bond buyback transaction finalised in February 2021 for €4.9mn
Capex up, led by digital transformation and network extension and repurposing effort
Cashflow generation improvement reflects positive working capital evolution
Net Debt under control, despite higher capex and dividend payment thanks to strong cashflow generation
CAPEX MIX HAS CHANGED AS EXPECTED
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1H 2021 €420.4mn +14.1% yoy
389km new networks pipes of which 52km in Sardinia
481k smart meters installed***
Note: capex including IFRS 16; (*) including metering (**) new networks only; (***) of which 201k related to the replacement of traditional meters excluding affiliates
* Gas and electricity; ** Leak detection Search Area
- - Gas supplied: 4.86 bil smc (+6%)
- - Gas for pre-heat: 5.9 mil smc (+2%)
- - 89% gas consumption used for pre-heat
- - Net electricity: 45,7 TJ (-6%)
1H 2021 RESULTS ESG PATH TO DE-CARBON
To achieve the targets set in the 2021-2027 Strategic Plan
-30% GHG emissions -25% net energy consumption (vs 2020 levels*)
…
Predictive maintenance on gas pipelines based on the results of the inspections with CRDS** technology in 2019-2020.
Efficient pre-heating systems starting from an assessment by Seaside to identify areas for energy efficiency improvements (replacement of obsolete boilers with state of the art systems …)
Self-production of electric energy with the operation of the cogeneration and turbo-expansion plants installed at the biggest city-gates
Energy-savvy offices leveraging Seaside's expertise with a deployment at scale of Savemixer*** and Savegas*** solutions on buildings
set of initiatives Training and awareness initiatives on energy management systems adoption (certification, offices, driving, …)
RESULTS 1H 2021 REPORTED VS ADJUSTED
Change 1H 2021 adjusted 1H 2021 reported
P&L, € mln
| Total Revenues | 665.4 | 665.4 | - |
|---|---|---|---|
| Operating expenses | - 176.3 | - 176.3 | - |
| EBITDA | 489.1 | 489.1 | - |
| Depreciation & amortisation | - 209.7 | - 209.7 | - |
| EBIT | 279.4 | 279.4 | - |
| Net interest income (expenses) | - 31.8 | - 25.4 | 6.4 |
| Net income from associates | 1.1 | 1.1 | - |
| EBT | 248.7 | 255.1 | 6.4 |
| Income taxes | - 68.7 | - 70.2 | - 1.5 |
| NET PROFIT before minorities | 180.0 | 184.9 | 4.9 |
| Minorities | - 8.8 | - 8.8 | - |
| NET PROFIT after minorities | 171.2 | 176.1 | 4.9 |
- 6.4mn cost of bond buyback transaction finalised in February
- 1.5mn fiscal impact of above mentioned non-recurring item
RESULTS 1H 2021 ADJUSTED
Change 1H 2021 adjusted 1H 2020 adjusted
P&L, € mln
| Total Revenues | 646.8 | 665.4 | 18.6 | |
|---|---|---|---|---|
| Operating expenses | - 185.0 | - 176.3 | 8.7 | |
| EBITDA | 461.8 | 489.1 | 27.3 | + 5.9% |
| Depreciation & amortisation | - 207.8 | - 209.7 | - 1.9 | |
| EBIT | 254.0 | 279.4 | 25.4 | + 10.0% |
| Net interest income (expenses) | - 26.4 | - 25.4 | 1.0 | |
| Net income from associates | 1.0 | 1.1 | 0.1 | |
| EBT | 228.6 | 255.1 | 26.5 | |
| Income taxes | - 65.0 | - 70.2 | - 5.2 | |
| NET PROFIT before minorities | 163.7 | 184.9 | 21.2 | |
| Minorities | - 9.4 | - 8.8 | 0.6 | |
| NET PROFIT after minorities | 154.3 | 176.1 | 21.8 | + 14.1% |
1H 2021
RESULTS Revenues +2.9% vs 1H 2020
(*) including tariff adjustments
RESULTS 1H 2021
1H 2020 1H 2021 Change
REVENUES, € mln
| Regulated revenues | 626.0 | 642.2 | 16.2 |
|---|---|---|---|
| Distribution | 590.1 | 595.5 | 5.4 |
| Tariff contribution for meters replacement | 5.2 | 6.1 | 0.9 |
| Other distribution revenues | 30.7 | 40.6 | 9.9 |
| Other revenues | 20.8 | 23.2 | 2.4 |
| TOTAL REVENUES | 646.8 | 665.4 | 18.6 |
1H 2021
RESULTS Operating expenses -4.7% vs 1H 2020
RESULTS 1H 2021
1H 2020 1H 2021 Change
OPERATING EXPENSES, € mln
| Distribution fixed costs | 128.5 | 119.9 | - 8.6 |
|---|---|---|---|
| Net labour cost | 73.6 | 67.7 | - 5.9 |
| Net external cost | 54.9 | 52.2 | - 2.7 |
| Other activities | 13.1 | 17.5 | 4.4 |
| Net labour cost | 1.8 | 2.5 | 0.7 |
| Net external cost | 11.3 | 15.0 | 3.7 |
| Other costs | 4.0 | 1.2 | - 2.8 |
| Tee | 4.9 | 3.0 | - 1.9 |
| Concessions fees | 34.5 | 34.7 | 0.2 |
| OPERATING EXPENSES | 185.0 | 176.3 | - 8.7 |
1H 2021
RESULTS Ebit +10.0% vs 1H 2020
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€mn
1H 2021
RESULTS Adjusted Net Profit +14.1% vs 1H 2020
FINANCIAL STRATEGY A KEY SOURCE OF VALUE CREATION
Limited refinancing needs and liquidity buffer c€690mn
Low exposure to interest rates volatility and long debt tenor
Best in class cost of debt of ~1% in 1H 2021
Debt Maturities
1H 2021 Gross Debt Structure*
Institutional
(*) excluding IFRS16
EIB Bond
RESULTS 1H 2021 BALANCE SHEET
€ mln
| Net invested capital | 6,713.9 | 6,725.5 | 11.6 |
|---|---|---|---|
| Fixed capital | 6,707.2 | 6,909.6 | 202.4 |
| Tangible fixed assets | 369.9 | 374.6 | 4.7 |
| Net intangible fixed assets | 6,511.5 | 6,708.6 | 197.1 |
| Net payables investments | - 208.6 | - 207.6 | 1.0 |
| Equity-accounted and other investments | 34.4 | 34.0 | - 0.4 |
| Net working capital | 111.2 | - 79.5 | - 190.7 |
| Provisions for employee benefits | - 104.6 | - 100.0 | 4.6 |
| Assets held for sale and directly related liabilities | 0.1 | - 4.6 | - 4.7 |
| Net financial debt | 4,736.5 | 4,806.8 | 70.3 |
| Financial debt for operating leases (IFRS 16) | 76.3 | 69.8 | - 6.5 |
| Net financial debt ex operating leases | 4,660.2 | 4,737.0 | 76.8 |
| Shareholders' equity | 1,977.4 | 1,918.7 | - 58.7 |
1H 2021 CONCLUSION
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Despite the DL570 effects, 1H results show our capabilities as industrial operators: investments, services to customers and costs reduction
Strong focus on environmental performance
Submitted offer for DEPA in Greece on July 15th
Assessing consultation document of ARERA on allowed returns and preparing our response
RESULTS P&L QUARTERLY ADJUSTED 1Q 2021
2 1
2Q 2021 3Q 2021 4Q 2021
€ mln
| Total Revenues | 333.3 | 332.1 | |
|---|---|---|---|
| Operating expenses | - 98.9 | - 77.4 | |
| EBITDA | 234.4 | 254.7 | |
| Depreciation & amortisation | - 104.5 | - 105.2 | |
| EBIT | 129.9 | 149.5 | |
| Net interest income (expenses) | - 13.6 | - 11.8 | |
| Net income from associates | 0.6 | 0.5 | |
| EBT | 116.9 | 138.2 | |
| Income taxes | - 31.0 | - 39.2 | |
| NET PROFIT before minorities | 85.9 | 99.0 | |
| Minorities | - 4.7 | - 4.1 | |
| NET PROFIT after minorities | 81.2 | 94.9 |
RESULTS 2Q
2Q 2020 2Q 2021 Change
€ mln
| Total Revenues | 319.7 | 332.1 | 12.4 |
|---|---|---|---|
| Operating expenses | - 84.8 | - 77.4 | 7.4 |
| EBITDA | 234.9 | 254.7 | 19.8 |
| Depreciation & amortisation | - 104.4 | - 105.2 | - 0.8 |
| EBIT | 130.5 | 149.5 | 19.0 |
| Net interest income (expenses) | - 13.0 | - 11.8 | 1.2 |
| Net income from associates | 0.1 | 0.5 | 0.4 |
| EBT | 117.6 | 138.2 | 20.6 |
| Income taxes | - 34.9 | - 39.2 | - 4.3 |
| NET PROFIT before minorities | 82.8 | 99.0 | 16.2 |
| Minorities | - 3.8 | - 4.1 | - 0.3 |
| NET PROFIT after minorities | 79.0 | 94.9 | 15.9 |
MAIN NUMBERS
| E-MARKET SDIR |
|---|
| CERTIFIED |
| OPERATING HIGHLIGHTS (TOTAL) |
OF WHICH AFFILIATES |
|
|---|---|---|
| Network length | 73,590 km | 1,883 km |
| Municipalities | 1,888 | 61 |
| Redelivery Points | 7.745 mn | 0.153 mn |
| Market Share(1) | 35% | 0.1% |
DISCLAIMER
Italgas's Manager, Giovanni Mercante, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and information disclosures herewith set forth correspond to the company's evidence and accounting books and entries. This presentation contains forward-looking statements regarding future events and the future results of Italgas that are based on current expectations, estimates, forecasts, and projections about the industries in which Italgas operates and the beliefs and assumptions of the management of Italgas. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management are forward-looking in nature. Words such as 'expects', 'anticipates', 'targets', 'goals', 'projects', 'intends', 'plans', 'believes', 'seeks', 'estimates', variations of such words, and similar expressions are intended to identi1H such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Italgas's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, political, economic and regulatory developments in Italy and internationally. Any forward-looking statements made by or on behalf of Italgas speak only as of the date they are made. Italgas does not undertake to update forwardlooking statements to reflect any changes in Italgas's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Italgas may make in documents it files with the Italian Securities and Exchange Commission and with the Italian Stock Exchange.
IR contacts
Anna Maria Scaglia Armando Iobbi