After having filed the acquisition of Veolia’s water assets, where, not surprisingly, the commitment will more than double to reach 400 million, Italgas unveils the moves of the new strategic plan to 2029 which fixes the objective of carbon neutrality and which envisages 7.8 billion in investments, of which the main portion (4.6 billion) is destined to strengthen and modernize the gas distribution network. The latter, in the intentions of CEO Paolo Gallo, will have to be completely digitized as early as 2024 and controlled remotely through a proprietary network (Dana, digital advanced network automation). The rest of the effort that the group promises to put in place over the next 7 years will have to serve to strengthen the Greek network, manned through Depa Infrastructure, also to improve its presence in the energy efficiency segment and to consolidate its commitment on the green gas front (from biomethane to hydrogen).
Gallo: the plan confirms us among the main industrial realities
In presenting the new plan to the financial community, Gallo reiterates the need for Europe, affected by the consequences of the war in Ukraine, to continue pursuing the ecological transition (“an always fundamental goal”), the achievement of which, however, the top manager points out , will have to be combined with two other elements: energy security and an adequate level of energy costs for households and businesses. As for the plan, the number one of Italgas underlines that, with the commitment put in place, «the group confirms itself among the main industrial companies capable of placing its design, investment and value creation capabilities at the service of the objectives sustainable development of the countries in which it operates”.
The focus on digitization
In detail, the plan allocates 1.6 billion euros (100 more than the previous strategy) to the digital transformation of the network which, as mentioned, will definitely have to shed its skin, following the path traced by Gallo since his arrival in 2016, at the helm of the group. The investments will thus help ensure that the two networks in the hands of Italgas, the Italian and Greek networks, are able to accommodate the connection of around 400 biomethane plants and to develop reverse flow technology to the transport network. The digitization effort will also serve to complete the development of a proprietary H2 ready meter, i.e. ready to welcome the development of hydrogen as well and whose industrial development will see the light in the next two years.
Nearly one billion euros for Greece
Another 2.9 billion will then be earmarked for upgrading, re-adapting and improving existing infrastructure, while 170 million will be reserved for completing the methane supply process in Sardinia. There is also room in the plan for further growth for external lines (100 million is the commitment put on paper between now and 2029 with a selective approach) and then there are 0.9 billion euros committed to the Greece chapter where the goal, with an eye to what the group is doing in Sardinia, is to extend the network from the current 7,491 km to around 11,000 km at the end of the plan. Eight hundred million will then be allocated for business diversification. While for tenders for gas distribution, the bar stands at 1.5 billion euro.
By 2029 expected turnover above 2.7 billion euros
Finally, the objectives and the dividend. For 2023, the group expects technical investments of around 900 million and revenues of over 1.75 billion euros, with an ebitda of around 1.8 billion and an ebit of 680 million. At the end of the plan, Italgas expects to achieve a turnover of more than 2.7 billion euro and an Ebitda of more than 1.8 billion with an average annual growth of around 8% in both indicators. As for the dividend policy, it is updated and extended to 2026. The new route therefore provides for the distribution of a coupon equal to the greater of the amount resulting from the 2022 DPS (dividend per share) of €0.317 increased by 4% per annum and the DPS equal to 65% of the adjusted earnings per share.