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ITEN

Growth Drivers

CONSOLIDATED CAPEX PLAN IN ITALY 2017-2021

Grafico Investimenti

* Total RAB evolution calculated assuming an average annual inflation rate of ~1% and according to current regulatory framework.
** Gross of subsides.

Excellence in operational efficiency

  • Extensive development of new technologies to strengthen our operational performance
    - Real time leak detection
    - Smart gas and augmented reality
  • Invest in people and processes to structurally upgrade our capabilities
    - Snam Academy, Lean programme, change management initiatives
    - New organization: from a Group of companies to an integrated player
  • Further enhance our corporate citizenship
    - Snam Foundation
    - First Italian company to join the Global Corporate Supporters Forum by Transparency international

Efficiency programme

  • Operations and maintenance:
    - Optimization of operating processes
    - Internalization of processes and review of make-or-buy mix
    - Energy efficiency initiatives
  • Corporate:
    - Renegotiation and optimization of IT infrastructure and application maintenance
    - Reduction of consultancy and advisory services
    - Re-engineering of processes of all key functions
  • Lean transformation across the Group:
    - Reshaping the way we work: faster & leaner, more effective
    - Creation of a new cross-functional team of internal change agents to ensure sustainability of new solutions and savings

We expect that these actions will lead to savings of more than 10 million already in 2017 and more than 25 million by end of plan.

Sound financial policy

  

Balance sheet solidity

  • Solid investment grade profile:
    - Firm commitment to current credit rating metrics (Net debt/RAB <60%; FFO/Net debt >11%)
    - Snam's metrics well within rating agencies thresholds
    - Fair balance between an adequate liquidity profile and commitment fees thanks to focused management of maturities
    - Fair and stable regulatory framework

Focus on debt optimisation

  • Further reduction in cost of debt, 2.2% in 2017
  • Cashflow from operations to cover capex and dividends

Financial flexibility: investment approach

  • Criteria:
    - Commitment to current credit rating metrics and risk profile
    - Accretive returns (risk adjusted returns at least in line with Italian regulated assets)
  • Industrial:
    - Enhance existing infrastructure
    - Leverage industrial capabilities
    - Unlock additional growth/optionality  
  • Financial:
    - Dividends
    - Buyback (duration to be extended)
 

New regulated services

    ALREADY LAUNCHED

  • New balancing regime incentives (Oct.16):
    - Demand forecast
    - TSO actions on spot market
    - System residual balancing
  • Supply of last resort

    UNDER DEVELOPMENT

  • Capacity products (e.g. oversubscription & buyback)
  • PSV transaction fee

Snam Global Solutions

  • New service platform created leveraging on Snam key competences
  • TAP contract award, €50m over three years
  • Services offered to third parties (incl. associates):
    - Project Management
    - Permitting services
    - Maintenance and dispatching services
    - IT services and Risk management
 

SUPERIOR LONG-TERM RETURNS WITH LOW RISK PROFILE

  • Growing organic capex plan with fair regulation
  • New stream of asset-light services
  • Operational excellence and efficiency
  • Well positioned to capture additional accretive opportunities

Strict financial discipline
       

Dividend policy confirmed

  • On the basis of the results achieved, Snam has paid in May 2017 a dividend, for the year 2016, of 0,21 euros per share.
  • Snam’s dividend policy provides for an average yearly increase of 2,5% until the dividend for the year 2018.

Starting from the dividend for the year 2017, Snam provides for a return to payment of an interim dividend (January 2018) and a final dividend (June 2018).

Buyback optionality

  • Up to 3.5% outstanding shares
  • Max amount: €500 mn
  • Execution flexibility based on evolution of financial performance and alternative investment opportunities
Page Alert
updated
20 July 2017 - 10:56 CEST