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Snam. Increased investments in the 2020-2024 plan

November, 2020

 

Snam CEO Marco Alverà presented the 2020-2024 plan with approx. € 7.4 billion in investments (compared to the € 6.5 billion of the 2019-2023 plan), approved by the Board of Directors chaired by Nicola Bedin.

Snam is committed to achieving carbon neutrality by 2040, in line with the 1.5° C containment target set by the Paris Agreement, also through the development of green gases.

Snam’s new capex plan envisages an increase in investments of almost € 1 billion compared to the € 6.5 billion of the 2019-2023 plan, reaching approximately € 7.4 billion in the 2020-2024 period. Compared to the previous plan, the growth is attributable to both the core business of regulated infrastructures and to the new businesses in the energy transition.

Net Zero Carbon and new ESG goals

  • Carbon neutrality target by 2040 (“Scope 1” and “Scope 2”)
  • 50% reduction of CO₂ eq. emissions “Scope 1” and “Scope 2” to 2030 vs 2018
  • New projects with subsidiaries and suppliers to reduce “Scope 3” emissions
  • More than 600,000 t of CO₂ eq. avoided in 2024 thanks to activities in the energy transition
  • Launch of a “scorecard” to measure performance across 13 ESG areas

Growing investments for system decarbonisation and long-term development

  • Total investments: approx. € 7.4 bn (approx. + € 1 bn vs € 6.5 bn of the 2019-2023 plan)
  • € 6.7 bn of investments in regulated energy infrastructure, focused on hydrogen ready replacements, digitalisation, decarbonisation and Sardinia
  • Investments almost doubled to € 720 mn in the businesses of the energy transition. In particular:
  • € 220 mn in biomethane infrastructure to reach a capacity of at least 64 MW
  • € 200 mn in energy efficiency to consolidate the national player position
  • € 150 mn in hydrogen for the start of projects for the conversion of railway lines and the installation of fuel cells in the Snam network
  • € 150 mn in mobility to expand the distribution infrastructure with a focus on LNG, and launch the first hydrogen distributors

International strategy:

  • Evolution towards portfolio management with a focus on the opportunities deriving from sector coupling, net zero policies and the growing centrality of green gases
  • Established presence in India following the entry into China
  • Development of a portfolio of services, leveraging on Snam’s distinctive competences in core business, digitalisation, technology and energy transition
  • International associates: stable contribution over the plan period, expected average annual cash return on the initial investment of 10% (from acquisition to the end of the plan)
  • TAP completed on schedule, commercial operations started last week

Growth of main indicators

  • RAB: >2.5% annual average in the period 2020-2024. The need to replace the grid implies a growth at least in line with this trend in the period 2024-2040
  • EBITDA of energy transition businesses: € 150 mn by 2024
  • Net profit: +2.5% annual average to 2024 (2019 base)
  • Net earnings per share: +3.2% annual average to 2024 (2019 base)
  • Dividend per share: 5% annual growth confirmed to 2022, with further 2.5% minimum growth in 2023 and 2024
  • 2021 net profit guidance: approximately + 3% compared to the 2020 guidance

Efficiency, flexibility and sustainable finance

  • Efficiency plan updated: € 70 mn in savings by 2022
  • Average cost of debt at 1.2% over the plan period (vs 1.4% of the previous plan)
  • Ambition to increase the weight of sustainable finance from the current 40% to over 60% of funding over the plan period
  • Debt/RAB ratio including associates below 60% over the plan period

Technological partnerships supporting the hydrogen strategy

  • Partnership with ITM Power, stake acquired for € 33 mn
  • Partnership with De Nora, 33% stake acquired
  • New investment platform on the energy transition launched in 2021

 

Read more in Snam website

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