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2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A.

Snam S.p.A. · Dec 12, 2014 · 44 slides

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  1. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 1
    2014 Full Year Results & Strategy Update Milan, March 12th, 2015 snam.it
  2. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 2
    Outline Highlights and Operational Performance 2014 Consolidated Results 2015-2018 Strategy & Targets 2
  3. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 3
    2014 Highlights and Operational Performance Carlo Malacarne Chief Executive Officer 3
  4. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 4
    2014: Another Year of Positive Outcomes [ mn ] Revenues 3,566 Up 1.0% Solid Results Ebitda 2,776 Down 1.0% Net profit 1,198 Up 30.6% [ mn ] Total Investments 1,820 Capex 1,313 Sound Growth & Financial investments 507 Cash Flow…
  5. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 5
    2014 FY Consolidated Results Antonio Paccioretti Chief Financial Officer 5
  6. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 6
    Income Statement [ mn ] 2013 2014 Change Revenues 3,529 3,566 +37 Operating expenses - 726 - 790 - 64 EBITDA 2,803 2,776 - 27 Depreciation & amortisation - 769 - 803 - 34 EBIT 2,034 1,973 - 61 Net interest income (expenses) - 472…
  7. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 7
    Revenues [ mn ] 2013 2014 Change Regulated revenues 3,491 3,506 +15 Transport 1,878 1,895 +17 Distribution 1,008 1,017 +9 Storage 444 458 +14 LNG 22 19 -3 Pass-through revenues 139 117 -22 Other revenues 38 60 +22…
  8. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 8
    Operating Expenses mn ] [m 2013 2014 Change Regulated activities 682 750 +68 Controllable fixed costs 460 471 +11 Variable costs 18 8 -10 Other costs 65 154 +89 Pass-through costs 139 117 -22 Non regulated activities 44 40 -4…
  9. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 9
    EBIT Analysis [ mn ] 2.200 +0.4% net of one-off items 2.100 37 26 -3.0% reported 16 (11) 2.000 (34) (95) 1.900 1.800 2,034 1,973 1.700 1.600 1.500 EBIT Regulated Controllable Depreciation Other 2013 early 2014 one-off…
  10. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 10
    Income from Associates [ mn ] 2013 2014 Change Distribution in Italy 59 98 +39 AES Torino 36 20 -16 Toscana Energia 19 23 +4 Other equity interests 4 3 -1 Restatement of equity interest (AES Torino) - 52 +52 International…
  11. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 11
    Net Profit Analysis [ mn ] +281 mn; +30.6% reported 1.300 +144 mn; +15.4% adjusted 120 1.200 1.100 70 86 1.000 17 75 900 1,198 800 (87) 1,078 700 917 934 600 500 Net profit Early Adj. Net profit Adj. EBIT Net…
  12. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 12
    Main Financial Actions and Results in 2014 2014 Actions Results consistent with last years guidance New recourse to Debt Capital Significant cost of debt reduction Average tenor of M/L term debt: Market (1.75 billion) approx. 5…
  13. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 13
    Cash Flow from Operation and Net Investments Cash flow from operation Net investments [ mn ] [ mn ] -275 606 -505 502 1,529 1,198 -1,229 -1,232 Net profit Depreciation Change in Cash flow Net TAG Capital Net investments &…
  14. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 14
    Net financial Debt 2014 vs. 2013 [ mn ] +326 118 505 -1,529 1,232 13,652 13,326 2013 Cash flow Net investments Cash flow from AES debt 2014 from operation Shareholders consolidation equity and other (dividends)…
  15. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 15
    Balance Sheet Dec, 31 Dec, 31 [m mn] Change 2013 2014 Net invested capital 19,320 20,824 +1,504 Fixed capital 20,583 21,813 +1,230 Tangible fixed assets 14,847 15,335 +488 Intangible fixed assets 4,710 5,076 +366…
  16. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 16
    2015-2018 Retaining Focus on Sustainable Remuneration Carlo Malacarne Chief Executive Officer 16
  17. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 17
    A robust Strategy with a low-risk Profile Selective Italy: aiming at high-quality investment opportunities portfolio Europe: focusing on two strategic gas corridors and management providing country risk diversification…
  18. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 18
    Outline Business Environment Snam Business Development 18
  19. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 19
    Key European Gas Market Trends Gas demand in EU Gas supply reserves and flows [bcm] 600 North Sea 3.7 TCM Gas Reserves Russia 49.5 TCM Gas Reserves 400 Northern Europe 65% of additional import needs in 2020 Net import CAGR 13…
  20. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 20
    Seeking a New Equilibrium between Flexibility and Security of Supply 2013 storage capacity1 (bn cubic meters) Competition in the market has generated a surge in liquidity that eased a shift from take or pay to spot contracts 5.4…
  21. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 21
    The shifting Market Scenario Competition & new Gas demand contract terms Infrastructure Operators New services & activities Gas supply creates opportunities for infrastructure operators to provide new dedicated…
  22. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 22
    Italian Distribution Business moving towards Consolidation Streamlining of Italian operators Further concentration to come 730 Process supported by new legislative framework Concession areas reduced from 6,700 430 to 177…
  23. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 23
    Outline Business Environment Snam Business Development Capex in Italy Operational Management European Developments Financial Discipline Attractive Returns 23
  24. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 24
    Snam Investment Priorities in Italy: in line with market trends and consistent with EU and Italian legislation Transport & LNG Storage Distribution Selected projects to meet new Finalize capacity increase for: Development of new…
  25. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 25
    Consolidated Capex Plan in Italy 2015 2018 Capex in Italy Consolidated RAB1 Capex by remuneration type2 RAB with higher remuneration Base remuneration Higher remuneration RAB with base remuneration CAPEX IN ITALY 75% CAGR 1%…
  26. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 26
    Transport: main projects 2015 2016 2018 0.7 bn 2.4 bn Passo Gries Tarvisio CAPEX North gas market and IN ITALY reverse flow capacity developments 29% Main projects OPERATIONAL MANAGEMENT Po Valley Infrastructure (450 km ) 57%…
  27. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 27
    Gas Flow Trends in Italy Import transport capacity to accommodate Italian gas flows more diversified gas flows [Mscm/d] TARGET CAPACITY DEVELOPMENT [bcm] Import DERIVING FROM CAPEX BEYOND 2018 Gas Demand CAGR 14 25: CAGR 14 25:…
  28. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 28
    Storage: investments to ensure gas system liquidity 2015 2016 2018 Peak capacity Modulation capacity Key investment priorities 0.2 bn 0.3 bn [ Mscm/d ] [ bcm ] CAPEX IN ITALY Complete capacity development + 11% required by…
  29. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 29
    Distribution: selected investments 2015 2016 2018 Consolidated redelivery points (mn) Key investment priorities 0.4 bn 1.1 bn CAPEX IN ITALY Replacement of existing 6.6 6.4 pipes OPERATIONAL + 3% MANAGEMENT 29% New…
  30. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 30
    Italgas holds a Leading Position Concession area renewal Italgas to seek additional value schedule* Italgas positioning through tender process 96% 2016-2018 BZ BL UD1 SO BS1 TN2 PN CAPEX AO BI VB NO1 VA1…
  31. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 31
    New Services to enhance Snams Role as System Operator Several incentive schemes already identified New Service Areas New Revenue Stream TO SUPPORT REVENUE STREAM CAPEX IN ITALY Intensive cooperation with market operator OPERATIONAL…
  32. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 32
    Operational Efficiency: proven track record of controlling cost Optimal efficiency level in a growing business ( mn controllable fixed costs, nominal value) KPI 2014-2018 CAGR CAPEX 497 480 471 TRANSPORT IN ITALY 465 456 453…
  33. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 33
    European Development: focus on North-South and East-West corridors Key pillars Snams geographic footprint Optimize the return on current asset base CAPEX IN ITALY in a broader European context OPERATIONAL MANAGEMENT Integrated…
  34. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 34
    TIGF: a priority asset Strategic rationale Expected contribution since the acquisition Key position along the East-West energy corridor Yearly EPS accretion around 2% Diversification of regulatory and country risk over 2015-2018…
  35. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 35
    TAG: a perfect fit for Snams strategy Strategic rational Expected contribution since the acquisition The largest import pipeline bringing Russian gas Full visibility on revenues: from Austrian/Slovak border to Italy Regulated…
  36. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 36
    Net income from Associates 2014 2015E 2018E CAPEX IN ITALY 130 mn OPERATIONAL Growth MANAGEMENT 100 mn supported EUROPEAN 79* mn by TAG and DEVELOPMENTS TIGF FINANCIAL DISCIPLINE Net income ATTRACTIVE from Associates…
  37. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 37
    Balance Sheet Solidity and Financial Structure Efficiency Snams key credit metrics 2013 2014 A solid investment grade FFO / Net Debt 12% 13% profile Net Debt/(RAB+associates) 53% 52% CAPEX IN ITALY OPERATIONAL MANAGEMENT Focused…
  38. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 38
    to support a Sustainable Path Fixed rate bond roll-over (2015-18) Potential benefits From refinancing risk to cost savings opportunities [ Coupon % ] Open and deep financial markets with favorable interest 5,00% rates and credit…
  39. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 39
    In Summary Strong balance sheet Sound results further fuelled by International assets Constantly pursuing operational and financial efficiency CAPEX IN ITALY Restored financial flexibility OPERATIONAL MANAGEMENT Focus on customer…
  40. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 40
    Q & A Session 40
  41. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 41
    Annexes 41
  42. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 42
    Italian Gas Market in 2014 Gas Consumption (Weather adj.): -4.5% Gas injected into the network: -9.7% 70.1 69.0 67.0 Other Sectors 1.9 62.3 2.1 Thermoelectric 20.6 17.7 16.5 16.3 Industrial(*) Residential & commercial 31.1…
  43. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 43
    Operational Data 2013 2014 % Transport Gas injected into the network (bcm) 69.0 62.3 -9.7 Gas pipeline network (km in operation) 32,306 32,339 +0.1 Storage Storage capacity (bcm) 15.9 15.9 -- Modulation (*) 11.4 11.4 -- Strategic…
  44. 2014 FULL YEAR RESULTS & STRATEGY UPDATE MILAN – Snam S.p.A. – slide 44
    2014 Full Year Results & Strategy Update Milan, March 12th, 2015 snam.it

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