Seven billion investments per year for a total of twenty-seven billion by 2027 (-20% compared to the previous plan), a cash flow from operation before working capital of 62 billion over the four-year plan, enhanced remuneration for members and a portfolio management which will result in a net contribution in terms of cash of 8 billion. All in order to maximize the value of businesses in traditional energy sectors, develop new activities related to the energy transition, achieve returns and growth through organic investments and selective M&A initiatives, always keeping an eye on financial discipline. These are the cornerstones of new strategic plan 2024-2027 presented to the markets byCEO of Eni Claudio Descalzi.
“We address the challenges posed by the energy transition with our distinctive growth and value creation strategy, capable of responding to the needs of security and competitiveness of energy supplies, while achieving decarbonization objectives. We are significantly increasing our cash generation, including through source diversification, risk reduction and expansion into new transition-related opportunity areas. To support this, we are enhancing our broad portfolio of assets in a disciplined way, balancing investments with greater returns for shareholders,” said Descalzi, underlining that “Thanks to these actions, we are making Eni even more profitable, better diversified and with more solid fundamentals, enhancing remuneration to shareholders. In conclusion, we believe that the energy transition can be achievable if it generates adequate and sustainable returns, and lays the foundations for new and profitable forms of business. And that's exactly what we're doing."
Talking about the energy transition, the CEO of Eni underlined: “It is an irreversible process, but it must guarantee an adequate return on investments, sustainability must also be financial".
Eni: dividend rises, investments fall
For remuneration to shareholders, Eni (-2,58% on Piazza Affari) intends to distribute between 30%-35% of the annual Cffo (cash flow from operations) through dividends and buybacks, an increase compared to the previous 25%-30%. The proposed dividend for 2024 is equal to 1 euro per share, an increase of over 6% and the buyback is set at 1,1 billion. In the presence of upside, it is expected to allocate up to 60% of the incremental cash flows compared to the Plan, an increase compared to the previous 35 percent.
“All the main economic and financial indicators denote growth and solidity, thanks to our clear path of value generation which increases exposure to the positive phases of the cycle and is resilient in the negative ones. This allows us to substantially improve our remuneration policy – stated Descalzi – We increase the share of distribution to shareholders, the associated 2024 dividend and in the presence of upside we increase the share of incremental cash generation allocated to remuneration. Our remuneration policy is highly competitive, implying a return of 9% at the current share price."
As for the investments – 7 billion years, for a total of 27 billion over the plan period – the watchwords will be selection and efficiency at corporate level, characteristics that will guarantee a foperating cash flow before capital in circulation of 13,5 billion in 2024, with an average of 15 billion over the plan period. In a constant scenario, Eni estimates, the Cffo in 2027 will be more than 30% higher than that of 2024 or 45% per share and will be supported by all businesses, with Plenitude and Enilive playing the leading roles.
The 8 billion expected from portfolio management reflect the balance between disposals (the majority) and possible acquisitions. AND the leverage it is expected at 15-25%, with the range in the upper part at the beginning of the plan thanks to the boost ensured by key strategic acquisitions, and in the lower part at the end of the plan. The company ultimately plans to deliver 1,8 billion euros of reduction in corporate costs over the course of the plan, in line with the evolution of the strategy and with the opportunities deriving from the development of the satellite model, the one that gave life to Plenitude and Enilive.
Oil and gas production is growing
La upstream production it is expected to grow at an average annual rate of 3-4% until 2027, extending this growth by an additional year compared to the previous plan.
As regards the gas, according to Eni estimates, they speak of an EBIT of 800 million euros in 2024, a figure that reflects the forecasts of reduction in gas prices and lower volatility. In the chaos in which prices were to rise again, GGP could reach a pro-forma EBIT of over one billion euros, "in relation to the excellent positioning of the activities, which are able to seize the opportunities deriving from a possible return of volatility ” explains the group.
Ccs, Enilive, Plenitude and Versalis
La Ccs (carbon capture and storage) will become "one of the key platforms in Eni's portfolio oriented towards the energy transition", the company says. The gross unrisked storage capacity is approximately 3 GigaTons, while the goal is to reach a gross CO2 reinjection capacity of over 15 MTPA before 2030 and increasing to approximately 40 MTPA after 2030. Phase 1 of the Ravenna CCS project will start this year while the development of phase 2 is scheduled for 2027, and further development phases are possible. In the UK, the Hynet project is expected to be approved later this year at the same time as the emitters project.
“Enilive, Plenitude and Versalis, together with CCS, represent a business portfolio for the energy transition with prospects for strong growth and value creation,” explains Eni.
For Biorefining Enilive, a capacity of over 3 Mtpa (million tonnes per year) is expected in 2026 and over 5 Mtpa in 2030, with a growth rate of around 20%. From a financial point of view, Enilive estimates indicate a pro-forma ebida of 1 billion in 2024 and above 1,6 billion euros in 2027 thanks to the growth of biorefining capacity, the rebranding activities of service stations and the increase in the contribution of non-oil services, which is expected to be approximately 40% of the total results of retail activities by the end of the plan. While Enilive's investments will average 0,5 billion euros per year over the plan period.
Moving on to Fullness, installed renewable energy capacity will be 4 GW in 2024, over 8 GW in 2027, rising to over 15 GW by 2030. This growth is supported by a pipeline of 2 GW of projects in progress, 4 GW in high/medium maturity and an additional 15GW at low maturity. Charging points for electric vehicles will be around 24 thousand in 2024 and it is expected that they will double between 2023 and 2027. From a financial point of view, Plenitude is expected to have a pro-forma ebitda of 1 billion in 2024, increasing up to 2 billion in 2027. Investments will average around 1,4 billion per year over the plan period.
Finally there is Versalis. “Following the losses recorded in 2023, determined by the negative scenario of the global chemical market, particularly deteriorated in Europe, Eni intends to implement a restructuring plan”, announces the company, explaining that Versalis, also through the acquisition of control of Novamont in 2023 it is committed to a transformation and repositioning of its business towards specialized products such as bio-based chemistry and circularity, in line with the evolution of the strategic context of the business. These measures will allow EBITDA to break even in 2025 and a positive EBIT by 2026, with a significant improvement of over €600 million for the group.
