Snam S.p.a. · MIL:SRG
Snam — Snam Rete Gas — Investor Presentation (December 2009)
25 slides from Snam's investor presentation, Dec 3, 2009
Slide 1: 2009 – 2012 Strategy Update
2009 – 2012 Strategy Update www.snamretegas.it
Slide 2: Disclaimer
Disclaimer Snam Rete Gas’s Chief Financial Officer, Antonio Paccioretti, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and information disclosures herewith set forth
Slide 3: Benefiting from Integration
Benefiting from Integration Carlo Malacarne Chief Executive Officer 3
Slide 4: Focus on Strategy to drive Performance
Focus on Strategy to drive Performance New Group CAPITAL EXPENDITURE EFFICIENCY LOW RISK PROFILE Short and Long ATTRACTIVE & SUSTAINABLE Term Value RETURNS TO SHAREHOLDERS 4
Slide 5: Agenda
Agenda Regulatory framework Capex plan Efficiency in the New Group Capital structure Final remarks 5
Slide 6: Agenda
Agenda Regulatory framework Capex plan Efficiency in the New Group Capital structure Final remarks 6
Slide 7: Transport: Outcome for the Third Regulatory Period
Transport: Outcome for the Third Regulatory Period 4-year regulatory period (from 2010 to 2013) Clear and stable Transparent methodology to calculate allowed revenues RAB based on “re-valuated historical cost” methodology Extra-return allowance on new investments Attractive Extra-efficienc
Slide 8: Transport: Main Figures for the Third Regulatory Period
Transport: Main Figures for the Third Regulatory Period 6.4% in real terms pre-tax 1% premium for 5 years for safety capex Return 2% premium for 7 - 10 years for capacity development capex on RAB 3% premium for 10 - 15 years for entry-capacity development capex Base rate and premium recogn
Slide 9: A Clear and Stable Regulatory Framework along the Integrated Gas Chain
A Clear and Stable Regulatory Framework along the Integrated Gas Chain TRANSPORT DISTRIBUTION STORAGE REGASIFICATION RAB Re-valued Re-valued Re-valued Re-valued methodology historical cost historical cost historical cost historical cost Parametric method for central assets WACC 6.4% (tra
Slide 10: Italgas & Stogit: Concession Framework
Italgas & Stogit: Concession Framework BRUGHERIO Stogit SERGNANO Not considerable 8 concession risk SETTALA MINERBIO BORDOLANO ALFONSINE RIPALTA SABBIONCELLO N° of Limited exposure to CORTEMAGGIORE concession risk/opportunities FIUME TRESTE to expire deriving from different ROMA value of gas res
Slide 11: Agenda
Agenda Regulatory Framework Capex plan Efficiency in the New Group Capital structure Final remarks 11
Slide 12: Optimization of Combined Investment Plan
Optimization of Combined Investment Plan Selected projects to meet capacity requirements and to Transport increase flexibility and security of supply & LNG Consistent commitment to improve service quality Constant effort to facilitate the development of a European gas hub Consolidate asset b
Slide 13: Snam Consolidated Capex Plan 2009 - 2012
Snam Consolidated Capex Plan 2009 - 2012 € 6.4 billion Spending* Consolidated RAB** RAB Breakdown € bn % 30 CAGR 4.5% 100% 25 14 16 80% € 1.4 bn € 5 bn 20 22 20 60% 15 40% 10 64 64 2009 2010 - 2012 20% 5 0 0% 2008E 2009E 2010E 2011E 2012E 2008 2012 RAB incentivized Transport Distribution Storage RAB
Slide 14: Capex Program Details
Capex Program Details Spending (*) 2009 – 2012 Incentive scheme Expansion & New entry points % 3% premium for 10 – 15 yrs 55 Regional & National Develop. 2% premium for 7 – 10 yrs Transport € ~0.9 bn € ~3.3 bn Safety 9 1% premium for 5 yrs 8 28 2009 2010 - 2012 Maintenance Base return: 6.4% Spending
Slide 15: Develop New System Requirements to Increase Flexibility and Security
Develop New System Requirements to Increase Flexibility and Security Transport Storage Mscm/d Bcm Km Mw 35000 + ~4% ~33,000 1000 350 20 31,474 + ~10% ~290 30000 300 262 ~855 900 830 + ~3% 250 15 25000 800 + ~30% ~11 200 20000 8.6 10 700 150 100 5 15000 600 50 10000 500 0 0 2008 2012 2008 2012 Networ
Slide 16: Agenda
Agenda Regulatory Framework Capex Plan Efficiency in the New Group Capital structure Final remarks 16
Slide 17: Savings from Cost Efficiency and Synergies
Savings from Cost Efficiency and Synergies Controllable fixed costs (in real terms) FY 2008 Annual Savings* €m Total amount*: € 500 mln % ~ 80 Labour cost 52 ~ 40 48 External costs 2010 2012 > 2012 * Pro-forma figure *Based on 2008 controllable fixed costs 2012 efficiency target announced in Febru
Slide 18: Delivering Value from Efficiency
Delivering Value from Efficiency Operations Shared Services Operational and maintenance best practices Centralization of services applied throughout the entire group Personnel Implementation of technological advanced Logistics standards Adminsitrative Real Estate Standardization of n
Slide 19: Agenda
Agenda Regulatory Framework Capex plan Efficiency in the New Group Capital structure Final Remarks 19
Slide 20: Solid and efficient Capital Structure
Solid and efficient Capital Structure 2009-2012 9M09 STRONG & Average Cost of debt Confirming leverage EFFICIENT targets in the Average 3.04% (D/RAB) BALANCE SHEET medium/long term Fixed Floating ~ 50% 4.36% 1.18% Fixed-rate debt Controlling P&L results LIMITED volatility in the medium EXPOSURE
Slide 21: Agenda
Agenda Regulatory Framework Capex plan Efficiency in the New Group Capital structure Final Remarks 21
Slide 22: Confirming Attractive Shareholder Returns
Confirming Attractive Shareholder Returns 2008-2012 ROBUST SHAREHOLDERS RETURNS IN A GROWING Estimated CAGR RAB 4.5% BUSINESS Expected incentivised RAB from 15% to 30% Savings in 2012 SIGNIFICANT VALUE CREATION THROUGH ~ € 80 mln* SYNERGIES FY 2009 DIVIDEND SUSTAINABILITY Expected FY 2009 DPS 3x Int
Slide 23: Driving Value Creation
Driving Value Creation CAPITAL EXPENDITURE To meet market needs in the long term To drive profitable long term growth To increase security and flexibility of the system EFFICIENCY Organizational & Operational Exploit synergy potential to strengthen SRG unique value creating track record Capi
Slide 24: Q & A Session
ia snamretegas ~ Q &A Session fre 20 ry
Slide 25: 2009 – 2012 Strategy Update
2009 – 2012 Strategy Update www.snamretegas.it
Snam Rete Gas — Investor Presentation (December 2009) on 6ix