2014 first quarter consolidated results
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snam.it
2014 1Q Consolidated ResultsMay 6th, 2014
Agenda
2
Highlights and Operational Performance
1Q Consolidated Results
3
Highlights and Operational Performance
Carlo MalacarneChief Executive Officer
• Ebit 542 Up 2.1%
• Net income 292 Up 20.7%
• Net debt 13,120
• Capex 229
4
[ €m ]
SolidResults
Business Development
• MoU with Fluxys to combine international assets in Europe
• Swap agreement in AES Torino to focus on distribution assets
1Q 2014 Highlights
Integrated management of international assets with Fluxys paves the way for the creationof a leader in the European gas infrastructure sector
Snam-Fluxys MoU: international assets integrationin the North- South and East-West gas corridors
5
To exploit European gas market opportunities
To optimize the value of domestic asset throughintegrated management with international assets
To maximize gas volumes transported through ourassets in the North-South and East – West gascorridors, attracting new gas flows and linking newgas sources
To leverage financial strength and business scalein order to exploit further potential internationaldevelopment
To offer new integrated and cross border servicesin transport, storage and regasification
Main targets
TENP
Transitgas
TIGF
TAG*
Snam and Fluxys domestic networks
IUKBBL
Snam and Fluxys international pipelines
NEL
* In case of a positive completion of the acquisition from CdP
14.9 14.9
4.4 4.3
6.0 4.7
0.40.4
1Q 2013 1Q 2014 1Q 2013 1Q 2014
6
Residential & commercial
Industrial(*)
Thermoelectric
Other Sectors
Gas Consumption (Weather adj.)
-5.5%
24.325.7
Gas injected into the network
-12.7%
16.318.7
(*) Includes: NGV, Agriculture and Non-Energy Use
Source: Italian Ministry of Economic Development and SRG estimates
Italian Gas Market in 1Q 2014
7
2014 1Q Consolidated Results
Antonio PacciorettiChief Financial Officer
Income Statement
8
€m 1Q 2013 1Q 2014 Change
Revenues 896 907 +11
Operating expenses - 179 - 175 +4
EBITDA 717 732 +15
Depreciation & amortisation - 186 - 190 - 4
EBIT 531 542 +11
Net interest income (expenses) - 125 - 101 +24
Net income from associates 15 22 +7
EBT 421 463 +42
Income taxes - 179 - 171 +8
NET PROFIT 242 292 +50
Revenues
9
€m 1Q 2013 1Q 2014 Change
Regulated revenues 883 882 - 1
Transport 466 465 -1
Distribution 248 236 -12
Storage 136 142 +6
LNG 6 5 -1
Pass-through revenues 27 34 +7
Other revenues 13 25 +12
TOTAL REVENUES 896 907 +11
Operating expenses
10
€m 1Q 2013 1Q 2014 Change
Regulated activities 166 172 +6
Controllable fixed costs 117 117 -
Variable costs 3 4 +1
Other costs 19 17 -2
Pass-through costs 27 34 +7
Non regulated activities 13 3 - 10
TOTAL COSTS 179 175 - 4
€m 1Q 2013 1Q 2014 Change
Cost breakdown by activity*:
Transport 51 56 +5
LNG 3 4 +1
Storage 14 15 +1
Distribution 78 67 -11
(*) net of pass-through costs
EBIT analysis
11
€m
+2.1%
2,0602,111
531 542
23
(8)-
(4)
0
100
200
300
400
500
600
700
1Q 2013 Regulatedrevenues
Controllable fixedcosts
Depreciation &amortisation
Other 1Q 2014
Net Profit analysis
12
+20.7%
€m
242292
1124 7 8
0
100
200
300
400
Net profit1Q 2013
EBIT Net interestincome
(expenses)
Net incomefrom associates
Incometaxes
Net profit1Q 2014
13
Existing debt as at 31 March 2014 (bln €) Bond Maturity Profile (bln €) as at 31 Mar. 2014 1Q 2014 main actions
€ bln
Pool banking facilites
Bilateral banking facilities
Debt Capital Market
Institutional lenders financing
Bond issuances (fixed and variable rate):
• 10y Bond: 600 m€;
• 2y Bond FRN: 150 m€;
Reduction of undrawn credit facilities
and bilateral facilities renegotiation
Institutional lenders financing:
• «single signature» for 300 m€ of
existing EIB financing;
Snam debt structure
13.1
3.2
9.4
3.0
1.216.9
0
2
4
6
8
10
12
14
16
18
1Q 2014 Net Debt Total committed credit facilities & bonds0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2014 2015 2016 2017 2018 2019 2020 2021 2022 beyond2022
€ bln
-100
100
200
300
400
500
600
Cash flow
14
Netprofit
Change inworkingcapital
Net investments
Depreciation& other
non monetary items
Change in Net Debt1Q 2014
36
292
169
206
-291
€m
Cash Flowfrom
operation
497
Balance Sheet
15
€m Dec, 31 2013
Mar, 31 2014 Change
Net invested capital 19,320 19,410 +90
Fixed capital 20,583 20,700 +117
Tangible fixed assets 14,847 14,951 +104
Intangible fixed assets 4,710 4,716 +6
Equity-accounted and other investments 1,026 1,033 +7
Net working capital -1,155 -1,181 -26
Receivables 2,708 2,602 -106
Liabilities -3,863 -3,783 +80
Provisions for employee benefits -124 -125 -1
Assets held for sale and directly related liabilities 16 16
Net financial debt 13,326 13,120 - 206
Shareholders' equity 5,994 6,290 +296
16
Q & A S e s s i o n
17
A n n e x e s
9
1743
69
2719
4
50
39
1320
2395
43
13
51
7
1330
57
14
71
50
107
Capital Expenditure*
18
Transportand LNG
Storage
Distribution
1Q 20141Q 2013 Expansion & new entry points:
+3% for 10 – 15 yrs
Regional & national development:+2% for 7 – 10 yrs
Safety: +1% for 5 yrs
Maintenance: Base remuneration 6.4%
Development of new fields: +4% for 16 yrs
Expansion of existing fields:+4% for 8 yrs
Maintenance: Base remuneration 6.7%
Substitution of cast iron pipes:+2% for 8 yrs
Metering: 8% allowed return
Other investments: Base remuneration 7.6%
[ €m ]
(*) Gross of subsidies. In 1Q 2013 and 1Q 2014 capex for € 2 million and € 1 million respectively was carried out by Snam S.p.A.
Expansion of existing fields+ 4% for 8 yrs
Development of new fields + 4% for 16 yrs
Others 6.7%
Metering7.2% remuneration
Distribution6.9% remuneration
Remuneration for new investments7.3%
Remuneration for new investments6.7%
Regional & national develop.+ 1% for 7 – 10 yrs
Import & export capacity develop.+ 2% for 10 yrs
Others 7.3%
Operational Data
19
1Q 2013 1Q 2014 ∆ %
Transport Gas injected into the network (bcm) 18.7 16.3 -12.7
Gas pipeline network (km in operation) 32,244 32,299 +0.2
Storage Storage capacity (bcm)•Modulation (*)
•Strategic
15.711.24.5
15.911.44.5
+1.3+1.8
-
Gas moved through storage system (bcm)•Injection•Withdrawal
6.970.016.96
4.840.084.76
-30.6n.m
-31.6
Distribution Gas distributed (bcm) 3.54 3.30 -6.9
Active Gas Metering at redelivery points (# mln) 5.91 5.92 +0.2
(*) Available capacity
20
Snam’s Chief Financial Officer, Antonio Paccioretti, in his position as manager responsible for the preparation of financial reports, certifiespursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and information disclosures herewith set forth correspondto the company’s evidence and accounting books and entries.
This presentation contains forward-looking statements regarding future events and the future results of Snam that are based on currentexpectations, estimates, forecasts, and projections about the industries in which Snam perates and the beliefs and assumptions of themanagement of Snam.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, andsimilar expressions are intended to identify such forward-looking statements.These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict becausethey relate to events and depend on circumstances that will occur in the future.Therefore, Snam’s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factorsthat might cause or contribute to such differences include, but are not limited to, economic conditions globally, political, economic and regulatorydevelopments in Italy and internationally.Any forward-looking statements made by or on behalf of Snam speak only as of the date they are made. Snam does not undertake to updateforward-looking statements to reflect any changes in Snam’s expectations with regard thereto or any changes in events, conditions orcircumstances on which any such statement is based.The reader should, however, consult any further disclosures Snam may make in documents it files with the Italian Securities and ExchangeCommission and with the Italian Stock Exchange.
Disclaimer
snam.it
2014 1Q Consolidated ResultsMay 6th, 2014