After 20 years, Italgas aims to expand its national borders and increase the share of investments to 2028. These are the cornerstones of the 2022-2028 Strategic Plan presented by Italgas. In particular, it expects to invest 8,6 billion euros by 2028 (+700 million compared to 7,9 billion in 2021-2027 Plan), of these 4,5 billion net for the Italian gas distribution network, 1,8 billion for Atem tenders and 1,8 billion for Greece and 500 million for diversification (with 340 million, almost double compared to previous plan). At the moment the Italgas title gains 1,76% to 5,48 euros on the Stock Exchange.
The three main guidelines of the Italgas strategic plan
The Group's objective is “to complete the digital transformation of assets, give life to one of the main players at a national level in the sector ofenergy efficiency and continue to play a leading role in achieving the climate targets of the EU".
In detail, the 2022-2028 Plan focuses in particular on renewable gases (biomethane and hydrogen), intended, according to the REPowerEU plan to replace about 50% of Russian gas, equal to about 155 billion cubic meters in 2021. The company thus aims to be "the first gas utility in the world with a fully digitized network" and has allocated 4,5 billion euros to the Italian grid, of which 1,5 billion for the digital transformation programs of the grid, necessary to "effectively manage the distribution of renewable gases, mainly biomethane, synthetic methane and hydrogen". Over 100 million euros are allocated to the latter to facilitate the connection of production plants to the distribution network, introduce bidirectional flow technology and develop plants and components ready for hydrogen.
Italgas Strategic Plan: the 2022 objectives
For 2022 technical investments are expected to be between 700 and 750 million and adjusted revenues exceeding 1,4 billion, with an adjusted ebitda of 1,00-1,03 billion and an adjusted ebit between 570 and 590 million. These results do not take into account the contribution of Depa Infrastructure, a Greek gas network company for which Italgas had signed the contract for the purchase of 100% for 733 million last December. Including the cost foracquisition of Depa Infrastructure and the impacts of IFRS 16, net borrowing at the end of 2022 is expected to be approximately €5,9 billion. With the completion of the tenders, thanks to the contribution of Depa Infrastructure and the development of energy efficiency activities, the group estimates a turnover of more than 2028 billion by 2,6 with an estimated EBITDA margin of around 70%, while the financial leverage it should gradually decrease reaching around 61% at the end of the Plan.
Financial efficiency and capital structure
Driven by the Investment Plan, the consolidated RAB of gas distribution, considering the acquisition in Greece, is expected to grow at an average annual rate of around 4,5%, reaching 11,2 billion euros at the end of 2028. With the contribution of tenders the consolidated RAB is estimated at around 12,6 billion euro by 2028.
With the acquisition of DEPA Infrastructure, the group estimates the Debt to RAB ratio is close to 65%. During the plan period, thanks to the generation of cash flow, this ratio is expected to return to the 61% area, consistent with a solid investment grade area. The optimization of the financial structure will allow Italgas to support both the investment plan and the remuneration of the shareholders. Italgas will continue the actions aimed at optimizing its financial structure. Over the period of the plan, the cost of debt is expected to remain below 1,2% on average due to the changed market environment. The use of sustainable sources of financing to support Italgas' investments in the energy transition makes the plan consistent with EU objectives.
Dividend policy confirmed: +4% per year
As for the current dividend policy, according to a note from the group, it "reflects Italgas' commitment to guaranteeing shareholders an attractive, growing and sustainable remuneration". The 2020-2023 policy announced in October 2020 provides for the distribution of a dividend equal to the greater of the amount resulting from the 2019 dividend increased by 4% per annum or the dividend equal to 65% of the adjusted net income per share. The application of this policy for the 2021 financial year allowed for the distribution of a dividend of 0,295, up by 6,5% compared to the previous year.
Gallo (Ad Italgas): "After 20 years we are expanding the borders: 1,8 billion to Greece"
“In a European scenario that has in REPowerEU the new North Star to strengthen the resilience of the energy system and accelerate the ecological transition, Italgas can reap the fruits of a vision that had identified digital, flexible and intelligent networks as the main enabler of the decarbonisation of consumption", said the CEO of Italgas, Paolo Gallo, adding that "with 8,6 billion euro , with further growth compared to the investment program presented last year, the Group confirms its position as one of the main industrial companies capable of placing its design, expenditure and value creation capabilities at the service of the sustainable development objectives of the country and of the European Union.
As for Greece, Gallo expects "to complete the acquisition of DEPA Infrastructure over the next few months and thus be able to verify the correspondence of the investment programs of the three operating companies with our vision and the decarbonisation targets set within the framework of the REPowerEU. The role of energy efficiency in the Group's development programs is growing. With 340 million euros, almost double compared to the previous plan, we intend to create one of the main players".
