snam.it
2014 Interim ReviewMilan, July 30th , 2014
2
Agenda
Highlights and operational performance
2014 1H Consolidated Results
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Highlights and operational performance
Carlo MalacarneChief Executive Officer
• Revenues 1,782 Up 0.4%
• Ebit 1,044 Up 2.4%
• Net income 561 Up 21.4%
• Capex 526 Up 7.3%
• Net debt 13,730
4
€m
Solid Results
1H 2014 Highlights
18.5 18.4
8.4 8.3
10.1 8.5
0.80.8
1H 2013 1H 2014 1H 2013 1H 2014
5
Residential & commercial
Industrial(*)
Thermoelectric
Other Sectors
Gas Consumption (Weather adj.)
-4.7%36.0
37.8
Gas injected into the network
-5.0%
32.834.5
(*) Includes: NGV, Agriculture and Non-Energy Use
Source: Italian Ministry of Economic Development and SRG estimates
Italian Gas Market in 1H 2014
6
2014 1H Consolidated ResultsAntonio PacciorettiChief Financial Officer
Income Statement
7
€m 1H 2013 1H 2014 Change
Revenues 1,775 1,782 +7
Operating expenses - 379 - 354 +25
EBITDA 1,396 1,428 +32
Depreciation & amortisation - 376 - 384 - 8
EBIT 1,020 1,044 +24
Net interest income (expenses) - 262 - 204 +58
Net income from associates 35 49 +14
EBT 793 889 +96
Income taxes - 331 - 328 +3
NET PROFIT 462 561 +99
Revenues
8
€m 1H 2013 1H 2014 Change
Regulated revenues 1,755 1,748 - 7
Transport 930 939 +9
Distribution 498 489 -9
Storage 236 243 +7
LNG 12 10 -2
Pass-through revenues 79 67 -12
Other revenues 20 34 +14
TOTAL REVENUES 1,775 1,782 +7
Operating expenses
9(*) net of pass-through costs
€m 1H 2013 1H 2014 Change
Regulated activities 360 341 - 19
Controllable fixed costs 228 225 -3
Variable costs 12 7 -5
Other costs 41 42 +1
Pass-through costs 79 67 -12
Non regulated activities 19 13 - 6
TOTAL COSTS 379 354 - 25
€m 1H 2013 1H 2014 Change
Cost breakdown by activity(*):
Transport 102 108 +6
LNG 7 7
Storage 32 30 -2
Distribution 151 133 -18
EBIT analysis
10
€m
+2.4%
2,0602,111
1,0201,044
5 324
(8)
800
900
1.000
1.100
1H 2013 Regulatedrevenues
Controllable fixedcosts
Depreciation &amortisation
Other 1H 2014
Net Profit analysis
11
+21.4%
€m
462
561
24
5814 3
200
300
400
500
600
700
1H 2013 EBIT Net interestincome
(expenses)
Net incomefrom associates
Incometaxes
1H 2014
12
Existing debt as at 30 June 2014 (bln €) Bond Maturity Profile (bln €) as at 30 June 2014 1H 2014 main actions
bln €
Pool banking facilites
Bilateral banking facilities
Debt Capital Market (nominal value)
Institutional lenders financing
Bond issuances (fixed and variable rate):
• 10y Bond: 600 m€ (Jan-14);
• 2y Bond FRN: 150 m€ (Jan-14);
• 5y Bond : 500 m€ (Apr-14);
Reduction of undrawn credit facilities
and bilateral facilities renegotiation
Renegotiation of 3.2 bln € pool banking
facilities (signing occurred in July)
Institutional lenders financing:
• «single signature» for 300 m€ of
existing EIB financing;
bln €
13.7
3.2
9.9
2.8
1.217.2
0
2
4
6
8
10
12
14
16
18
20
1H 2014 Net debt Total committed creditfacilities and bonds
0
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 2023 2024
Snam debt structure
-600
-400
-200
200
400
600
800
1.000
Cash flow
13
Netprofit
Change inworkingcapital
Net investments
Depreciation& other
non monetary items
Change in Net Debt1H 2014
-256
561
342
-404
104
€m
Cash Flowfrom
operation
-543647
FreeCash Flow
1H 2014
Cash flowfrom
shareholders’ equity
-508
Balance Sheet
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€m Dec, 31 2013
Jun, 30 2014 Change
Net invested capital 19,320 19,786 +466
Fixed capital 20,583 20,746 +163
Tangible fixed assets 14,847 15,003 +156
Intangible fixed assets 4,710 4,735 +25
Equity-accounted and other investments 1,026 1,008 -18
Net working capital -1,155 -850 +305
Receivables 2,708 2,343 -365
Liabilities -3,863 -3,193 +670
Provisions for employee benefits -124 -126 -2
Assets held for sale and directly related liabilities 16 16 -
Net financial debt 13,326 13,730 +404
Shareholders' equity 5,994 6,056 +62
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Q & A S e s s i o n
16
A n n e x e s
20
3786
143
6230
13
105
87
3959
55
240 118
28
107
15
4163
121
31
152
119
253
Capital Expenditure*
17
Transportand LNG
Storage
Distribution
1H 20141H 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 1H 2013 and 1H 2014 capex for € 3 million and € 2 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
1H 2013 1H 2014 ∆ %
Transport Gas injected into the network (bcm) 34.5 32.8 -5.0
Gas pipeline network (km in operation) 32,229 32,303 +0.2
Storage Storage capacity (bcm)•Modulation (*)
•Strategic
15.911.44.5
15.911.44.5
- -- -- -
Gas moved through storage system (bcm)•Injection•Withdrawal
11.243.887.36
9.514.754.76
-15.4+22.4-35.3
Distribution Gas distributed (bcm) 4.48 3.52 -21.4
Active Gas Metering at redelivery points (# million) 5.92 5.91 -0.1
18(*) Available capacity.
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Disclaimer
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 forthcorrespond to 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 operates 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 predictbecause they 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.Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, political, economic andregulatory developments 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.
snam.it
2014 Interim ReviewMilan, July 30th , 2014