Italgas: consolidated results of the first nine months and of the third quarter 2019 approved

Milan, 7 November 2019 - The Board of Directors of Italgas has met today under the chairmanship of Alberto Dell'Acqua and approved the consolidated results for the first nine months and the third quarter of 2019.

Key figures

Consolidated economic and financial highlights:

• Total revenues: € 916.9 million (+3.7%)

• EBITDA: € 660.7 million (+5.0%)

• EBIT: € 376.9 million (+12.9%)

• Net profit: € 262.6 million (+16.0%)

• Technical investments: € 495.3 million (+41.9%)
• Cash flow from operating activities: € 528.8 million

• Net financial debt: € 3,978.2 million

Operating highlights including affiliates:

• Municipalities in gas distribution concessions: 1,822

• Number of active meters: 7.617 million
• Gas distribution network: around 71,000 Km

For the 11th consecutive quarter, Italgas has improved all the main indicators, with double-digit growth for EBIT and Net Profit, showing its ability for continuous improvement.

With organic investments of € 495.3 million made in the period (+41.9%), Italgas continues to develop and modernise its networks and to implement their digital transformation. Around half of this sum was devoted to maintain and extend the network (258 km of new pipelines against 136 km in the corresponding period of 2018).

With 1.5 million smart meters installed, the replacement of all traditional meters continues, bringing the number of operational smart meters as at 30 September 2019 to around 6.2 million (corresponding to 73.1% of total meters, also considering affiliates).

The installation of the smart meters, which will be concluded in 2020, is part of a wider transformation project, whose objective is to digitalise the entire network. With regard to said project, in 2019, the technological upgrade of around 400 networks will be completed, in addition to the 50 upgraded in 2018.

In Sardinia, the construction of distribution networks continues well on track, and has generated around 600 new jobs. As at 30 September, with worksites operational in all of the Areas under concession to the Group, over 300 kilometres of network has been laid, and more than 18,000 applications for new connections have already been requested.

The requirements related to net investments for the first nine months of 2019 were fully covered by the net positive cash flow from operating activities, equal to € 528.8 million, with a Free Cash Flow - before M&A activities - of € 135.8 million.

The net financial position as at 30 September 2019 was € 3,978.2 million (€ 3,814.3 million as at 31 December 2018) net of financial payables pursuant to IFRS 16 of € 68.6 million (€ 49.9 million as at 31 December 2018).

The operating profit (EBIT) for the first nine months of 2019 amounted to € 376.9 million (+12.9% compared to 30 September 2018) and net profit was € 262.6 million (+16.0% compared to the same period of the previous year).

The development and growth confirmed by the economic and financial results are also due to the commitment and the increasing awareness of the issues of sustainability. The company's stock was reconfirmed in the FTSE4Good Index Series and, for the first time in its history, the company was included in the Dow Jones Sustainability Index World, which evaluates the ability of enterprises to tackle the most important issues of sustainability on a global level. Italgas is the only Italian utility company in the gas distribution industry included in the DJSI World, the third in the world with the Spanish Naturgy and the Japanese Osaka Gas.

Paolo Gallo, CEO of Italgas, commented:

«11 consecutive quarters of growth, double-digit increases for EBIT, +12.9% and Net Profit, +16% in the first nine months of 2019 demonstrate Italgas' ability to combine the solidity of a company with over 180 years of experience with a start-up approach to promote innovation, while keeping costs under control. A company model based on environmental, social and economic sustainability criteria, which enabled us to be included, for the first time in our history, in the Dow Jones Sustainability Index World. Investments continue to rise, +40% against last year, an increase that will see us exceeding € 700 million at year end: maintainance, development and digitization of the network are our 3 pillars. The Sardinia project obtained institutional recognition as the Marguerite Fund, a high profile European investor, is close to enter in the shareholder capital of the Sardinian company. We have already laid over 300 kilometres of 'native digital' pipeline on the island, the most modern in the country, receiving considerable interest from residents and businesses, a sign of the great expectations of the local community: in the next few months we will start to supply natural gas to the first customers. The acquisition of a majority shareholding in Toscana Energia will enable us to provide even more support to our affiliate in facing the challenges of tenders and digital transformation. Digital transformation continues to be our primary objective: just 1 year from its start-up, the Digital Factory has already produced a wide number of digital solutions that are changing the way we manage our network, with a significant improvement in service quality».