Gruppo 1stH 2014 CONSOLIDATED RESULTS Conference Call 1
Contents Financial highlights Ascopiave Group structure as of June, 30th 2014 Application of IFRS 11 international accounting standard 1stH 2013 restated income statement Balance sheet at December, 31st 2013 restated FY 2013 restated income statement 1stH 2014 consolidated income statement Consolidated balance sheet at June, 30th 2014 Financial ratios Operating data Revenues and EBITDA Gross margin on gas and electricity activities and other net operating costs Personnel Capex Net Financial Position and cash flow 2
Ascopiave Group structure as of June, 30th 2014 100% 89% 100% 51% 48,86% 100% 48,999% 49% Until December, 31st 2013: Consolidated with proportionate consolidation method From January,1st 2014: Consolidated with full consolidation method 100% Companies consolidated with net equity consolidation method: 100% 30,94% 100% (in liquidation) Since year of registration: Sinergie Italiane From January, 1st 2014: - sale companies: Asm Set / Estenergy - distribution companies: Unigas Distribuzione 100% 80% Gas distribution Gas sales Other activities 3
Application of IFRS 11 international accounting standard In application of IFRS 11 international accounting standard, from January, 1st 2014 the jointly controlled companies are consolidated with net equity consolidation method. Until December, 31st 2013 they were consolidated with proportionate consolidation method. Company 1stH 2014 1stH 2013 Sinergie Italiane S.r.l. Net equity consolidation method Net equity consolidation method Veritas Energia S.r.l. Full consolidation method Proportionate consolidation method Asm Set S.r.l. Net equity consolidation method Proportionate consolidation method Estenergy S.p.A. Net equity consolidation method Proportionate consolidation method Unigas Distribuzione S.r.l. Net equity consolidation method Proportionate consolidation method = For having a comparable accounting situation: 1stH 2013 income statement has been reclassified (1stH 2013 restated); balance sheet at December, 31st 2013 has been reclassified (31/12/2013 restated); using the same consolidation principles in force in 2014. 4
1stH 2013 restated income statement (Thousand of Euro) 1stH 2013 Chg 1stH 2013 restated Revenues 518.173 (113.000) 405.174 (Cost of raw materials and consumables) (350.969) 64.218 (286.752) (Cost of services) (70.608) 31.019 (39.588) (Cost of personnel) (13.743) 2.195 (11.548) (Other operating costs) (11.828) 528 (11.300) Other operating income 694 (0) 694 EBITDA 71.719 (15.040) 56.679 (Depreciations and amortizations) (10.291) 1.094 (9.197) (Provisions) (5.451) 1.461 (3.990) EBIT 55.977 (12.485) 43.492 Financial income / (expenses) (2.977) 1.758 (1.219) Evaluation of companies with net assets method (188) 5.966 5.778 EBT 52.811 (4.761) 48.050 (Income taxes) (23.180) 4.761 (18.419) Earnings after taxes 29.632 (0) 29.632 (Net loss from discontinued operations) - - - Net income 29.632 (0) 29.632 (Net income of minorities) (1.869) - (1.869) Net income of the Group 27.762-27.762 5
Balance sheet at December, 31st 2013 restated (Thousand of Euro) 31/12/2013 Chg 31/12/2013 restated Tangible assets 39.277 (1.437) 37.840 Non tangible assets 447.898 (60.398) 387.500 Investments in associates 1 72.421 72.421 Other fixed assets 44.351 (4.664) 39.687 Fixed assets 531.527 5.922 537.449 Operating current assets 275.864 (71.799) 204.066 (Operating current liabilities) (211.986) 51.753 (160.234) (Operating non current liabilities) (61.126) 6.334 (54.792) Net working capital 2.752 (13.712) (10.960) Total capital employed 534.278 (7.790) 526.489 Group shareholders equity 397.689-397.689 Minorities 4.989-4.989 Net financial position 131.600 (7.790) 123.810 Total sources 534.278 (7.790) 526.489 6
FY 2013 restated income statement (Thousand of Euro) FY 2013 Chg FY 2013 restated Revenues 854.334 (186.496) 667.837 (Cost of raw materials and consumables) (574.518) 101.049 (473.469) (Cost of services) (133.442) 59.691 (73.751) (Cost of personnel) (27.280) 4.371 (22.909) (Other operating costs) (14.337) 1.672 (12.666) Other operating income 1.148 (2) 1.146 EBITDA 105.904 (19.716) 86.188 (Depreciations and amortizations) (20.570) 2.297 (18.273) (Provisions) (8.548) 2.509 (6.039) EBIT 76.787 (14.910) 61.877 Financial income / (expenses) (3.874) 2.447 (1.427) Evaluation of companies with net assets method (262) 6.730 6.468 EBT 72.651 (5.734) 66.917 (Income taxes) (31.541) 5.734 (25.807) Earnings after taxes 41.111 (0) 41.111 (Net loss from discontinued operations) (71) - (71) Net income 41.040 (0) 41.040 (Net income of minorities) (2.361) - (2.361) Net income of the Group 38.678-38.678 7
1stH 2014 consolidated income statement (Thousand of Euro) 1stH 2014 1stH 2013 restated Chg Chg % Revenues 337.085 405.174 (68.089) -16,8% (Cost of raw materials and consumables) (216.572) (286.752) 70.180-24,5% (Cost of services) (56.312) (39.588) (16.724) +42,2% (Cost of personnel) (12.606) (11.548) (1.058) +9,2% (Other operating costs) (6.397) (11.300) 4.903-43,4% Other operating income 11 694 (683) -98,4% EBITDA 45.209 56.679 (11.470) -20,2% (Depreciations and amortizations) (9.721) (9.197) (524) +5,7% (Provisions) (2.998) (3.990) 992-24,9% EBIT 32.491 43.492 (11.001) -25,3% Financial income / (expenses) (728) (1.219) 491-40,2% Evaluation of companies with net assets method (*) 3.805 5.778 (1.973) -34,1% EBT 35.567 48.050 (12.483) -26,0% (Income taxes) (12.892) (18.419) 5.527-30,0% Earnings after taxes 22.675 29.632 (6.957) -23,5% (Net loss from discontinued operations) - - - n.a. Net income 22.675 29.632 (6.957) -23,5% (Net income of minorities) (1.260) (1.869) 609-32,6% Net income of the Group 21.415 27.762 (6.348) -22,9% (*) Result of the companies consolidated with net equity consolidation method (data are considered pro-quota): sale companies, Euro 1,3 mln (Euro 5,4 mln in 1stH 2013 restated); distribution companies, Euro 0,5 mln (Euro 0,5 mln in 1stH 2013 restated); Sinergie Italiane, + Euro 2,1 mln (- Euro 0,1 mln in 1stH 2013 restated). 8
Consolidated balance sheet at June, 30th 2014 (Thousand of Euro) 30/06/2014 31/12/2013 restated Chg Chg % Tangible assets (*) 36.985 37.840 (855) -2,3% Non tangible assets (*) 392.757 387.500 5.257 +1,4% Investments in associates (**) 63.967 72.421 (8.454) -11,7% Other fixed assets 35.822 39.687 (3.865) -9,7% Fixed assets 529.532 537.449 (7.917) -1,5% Operating current assets 138.851 204.066 (65.215) -32,0% (Operating current liabilities) (115.454) (160.234) 44.780-27,9% (Operating non current liabilities) (56.624) (54.792) (1.831) +3,3% Net working capital (33.227) (10.960) (22.266) +203,2% Total capital employed 496.305 526.489 (30.184) -5,7% Group shareholders equity 391.355 397.689 (6.334) -1,6% Minorities 3.828 4.989 (1.161) -23,3% Net financial position 101.122 123.810 (22.688) -18,3% Total sources 496.305 526.489 (30.184) -5,7% (*) Applying IFRIC 12 involves categorising the infrastructures under concession from tangible to intangible assets; (**) Value of the associated companies consolidated with net equity consolidation method: sale companies, Euro 44,4 mln (Euro 52,1 mln at 31/12/2013 restated); distribution companies, Euro 19,5 mln (Euro 20,3 mln at 31/12/2013 restated). 9
Financial ratios (Thousand of Euro) 30/06/2014 30/06/2013 restated Var Var % Net Financial Position (NFP) (101.122) (76.245) (24.876) +32,6% EBITDA 45.209 56.679 (11.470) -20,2% Finance costs (FC) (728) (1.219) 491-40,2% EBITDA / FC 62 46 16 +33,5% Shareholders equity (EQUITY) 395.183 391.479 3.704 +0,9% NFP / EQUITY (Financial leverage) 0,26 0,19 0,06 +31,4% EBITDA / FC NFP / EQUITY 10
Contents Financial highlights Operating data Volumes of gas distributed Volumes of gas sold Volumes of electricity sold Revenues and EBITDA Gross margin on gas and electricity activities and other operating costs Personnel Capex Net Financial Position and cash flow 11
Volumes of gas distributed Volumes of gas distributed (Million of standard cubic meters) = -101,3 = -11,3-20,3% -22,9% Companies consolidated with full consolidation method Companies consolidated with net equity consolidation method (*) (*) Data are considered pro-quota. 12
Volumes of gas sold 445,6 = -103,4-18,8% 549,1 Volumes of gas sold (Million of standard cubic meters) = -75,4-50,7% 148,6 73,2 Companies consolidated with full consolidation method Companies consolidated with net equity consolidation method (*) of which 15,8 mln of cm for enlargement of consolidation perimeter (**) Veritas Energia S.r.l.: from January, 1st 2014 the company has modified its consolidation criterion (from proportionate to full consolidation method). (*) Data are considered pro-quota; (**) Acquisition of 49% stake in Veritas Energia S.r.l. 13
Volumes of electricity sold 172,7 = +81,9 +90,3% Volumes of electricity sold (GWh) = -142,5(***) -73,6% 193,6 90,8 51,0 Companies consolidated with full consolidation method Companies consolidated with net equity consolidation method (*) of which 40,3 GWh for enlargement of consolidation perimeter (**) Veritas Energia S.r.l.: from January, 1st 2014 the company has modified its consolidation criterion (from proportionate to full consolidation method). (*) Data are considered pro-quota; (**) Acquisition of 49% stake in Veritas Energia S.r.l. (***) Reduction is mainly due to a rationalization of Estenergy customers portfolio and to a change in consolidation criterion of Veritas Energia. 14
Contents Financial highlights Operating data Revenues and EBITDA Revenues bridge EBITDA bridge EBITDA breakdown Gross margin on gas and electricity activities and other net operating costs Personnel Capex Net Financial Position and cash flow 15
16 Revenues bridge (1) Revenues bridge Companies consolidated with full consolidation method (Thousand of Euro) = -68.089-16,8%
17 Revenues bridge (2) Revenues bridge Companies consolidated with net equity consolidation method (*) (Thousand of Euro) = -58.451-51,7% (*) Sinergie Italiane excluded.
18 EBITDA bridge (1) EBITDA bridge Companies consolidated with full consolidation method (Thousand of Euro) = -11.470-20,2%
19 EBITDA bridge (2) EBITDA bridge Companies consolidated with net equity consolidation method (*) (Thousand of Euro) = -8.727-58,0% (*) Sinergie Italiane excluded.
EBITDA breakdown (1) (Thousand of Euro) EBITDA breakdown Companies consolidated with full consolidation method (Thousand of Euro) 1stH 2014 1stH 2013 Var Var % EBITDA 45.209 56.679 (11.470) -20,2% EBITDA - Sale 28.954 41.033 (12.079) -29,4% EBITDA - Distribution 16.255 15.646 609 +3,9% EBIT 32.491 43.492 (11.001) -25,3% EBIT - Sale 24.687 35.672 (10.985) -30,8% EBIT - Distribution 7.804 7.820 (16) -0,2% (*) (**) (*) (**) (*) Sale companies; (**) Distribution companies. 20
EBITDA breakdown (2) (Thousand of Euro) EBITDA breakdown Companies consolidated with net equity consolidation method (*) (Thousand of Euro) 1stH 2014 1stH 2013 Var Var % EBITDA 6.313 15.040 (8.727) -58,0% EBITDA - Sale 5.077 13.861 (8.785) -63,4% EBITDA - Distribution 1.236 1.179 57 +4,8% EBIT 4.006 12.485 (8.479) -67,9% EBIT - Sale 3.301 11.766 (8.465) -71,9% EBIT - Distribution 704 719 (15) -2,0% (*) (**) (*) (**) (*) Sinergie Italiane excluded; (**) Sale companies; (***) Distribution companies. 21
Contents Financial highlights Operating data Revenues and EBITDA Gross margin on gas and electricity activities and other net operating costs Gross margin on gas sales Gross margin on electricity sales Gas distribution tariff revenues Other net operating costs Personnel Capex Net Fincancial Position and cash flow 22
Gross margin on gas sales (Thousand of Euro) (*) 1stH 2014 1stH 2013 Chg Chg % Revenues from gas sales 242.070 312.633 (70.563) -22,6% (Gas purchase costs) (159.529) (208.104) 48.575-23,3% (Distribution costs) (44.821) (54.764) 9.942-18,2% Gross margin on gas sales (A) Company consolidated with full consolidation method 37.719 49.766 (12.046) -24,2% The decrease of gross margin on gas sales of the companies consolidated with full consolidation method is equal to - Euro 12,0 mln: - change on the same consolidation perimeter: - Euro 16,4 mln - change for full consolidation of Veritas Energia S.r.l.: + Euro 4,3 mln (Thousand of Euro) (*) Gross margin on gas sales (B) Company consolidated with net equity consolidation method 1stH 2014 1stH 2013 Chg Chg % 7.089 15.289 (8.199) (**) -53,6% Gross margin on gas sales (A+B) 44.809 65.054 (20.246) -31,1% (*) Economic data before elisions. (**) Change on the same consolidation perimeter: - Euro 5,1 mln / Change for deconsolidation of Veritas Energia S.r.l.: - Euro 3,1 mln 23
Gross margin on electricity sales (Thousand of Euro) (*) 1stH 2014 1stH 2013 Chg Chg % Revenues from elecricity sales 45.480 16.681 28.799 +172,6% (Electricity purchase costs) (25.474) (16.582) (8.892) +53,6% (Distribution costs) (16.976) - (16.976) n.a. Gross margin on electricity sales (A) Company consolidated with full consolidation method 3.029 99 2.930 +2963,5% The increase of gross margin on electricity sales of the companies consolidated with full consolidation method is equal to + Euro 2,9 mln: - change on the same consolidation perimeter: + Euro 0,5 mln - change for full consolidation on Veritas Energia S.r.l.: + Euro 2,4 mln (Thousand of Euro) (*) Gross margin on electricity sales (B) Company consolidated with net equity consolidation method 1stH 2014 1stH 2013 Chg Chg % 208 2.497 (2.289) (**) -91,7% Gross margin on electricity sales (A+B) 3.237 2.596 642 +24,7% (*) Economic data before elisions. (**) Change on the same consolidation perimeter: - Euro 0,4 mln / Change for deconsolidation of Veritas Energia S.r.l.: - Euro 1,9 mln 24
Gas distribution tariff revenues (Thousand of Euro) (*) The decrease of gas distribution tariff revenues of the companies consolidated with full consolidation method (- Euro 0,7 mln) is due to: 1) change of gas distribution tariffs applied to gas sales companies: - Euro 6,8 mln; 2) equalization amount: + Euro 6,1 mln. 1stH 2014 1stH 2013 Chg Chg % Tariffs applied to sales companies 26.872 33.666 (6.794) -20,2% Equalization amount (+ / -) 4.064 (2.044) 6.108-298,8% Gas distribution tariff revenues (A) Company consolidated with full consolidation method 30.936 31.622 (686) -2,2% (Thousand of Euro) (*) Gas distribution tariff revenues (B) Company consolidated with net equity consolidation method 1stH 2014 1stH 2013 Chg Chg % 2.821 2.853 (32) -1,1% Gas distribution tariff revenues (A+B) 33.757 34.475 (718) -2,1% (*) Economic data before elisions. 25
Other net operating costs (1) (Thousand of Euro) (*) 1stH 2014 1stH 2013 Chg Chg % Other revenues 22.040 27.856 (5.816) -20,9% Other costs of raw materials and services (35.910) (41.115) 5.206-12,7% Cost of personnel (12.606) (11.548) (1.058) +9,2% Other net operating costs (A) Company consolidated with full consolidation method (26.475) (24.808) (1.668) (**) +6,7% Increase of other net operating costs of the companies consolidated with full consolidation method: - Euro 1,7 mln of which: increase of gas distribution concession fees: - Euro 0,3 mln increase of cost of personnel: - Euro 1,1 mln increase of marketing and customers acquisition cost: - Euro 0,1 mln increase of margin on energy efficiency tasks management: + Euro 1,6 mln decrease of revenues for distribution network connection services (change in accounting method): - Euro 1,5 mln decrease of capital gain realized on the disposal of distribution plants: - Euro 0,7 mln other changes: + Euro 0,4 mln (*) Economic data before elisions. (**) Change on equal method / consolidation perimeter: + Euro 0,3 mln / Change for deconsolidation of Veritas Energia S.r.l.: - Euro 2,0 mln 26
Other operating costs (2) (Thousand of Euro) (*) Other net operating costs (A) Company consolidated with full consolidation method Other net operating costs (B) Company consolidated with net equity consolidation method 1stH 2014 1stH 2013 Chg Chg % (26.475) (24.808) (1.668) +6,7% (3.805) (5.598) 1.793 (**) -32,0% Other net operating costs (A+B) (30.280) (30.405) 125-0,4% (*) Economic data before elisions; (**) Sinergie Italiane excluded. (**) Change on the same consolidation perimeter: + Euro 0,8 mln / Change for deconsolidation of Veritas Energia S.r.l.: + Euro 1,0 mln 27
Contents Financial highlights Operating data Revenues and EBITDA Gross margin on gas and electricity activities and other net operating costs Personnel Number of employees Consolidated cost of personnel Capex Net Financial Position and cash flow 28
Number of employees 477 Number of employees = +27 = -17 +6,0% -20,8% 450 66 83 Companies consolidated with full consolidation method Companies consolidated with net equity consolidation method (*) of which 15 employees for enlargement of consolidation perimeter (**) Veritas Energia S.r.l.: from January, 1st 2014 the company has modified its consolidation criterion (from proportionate to full consolidation method). (*) Data are considered pro-quota; (**) Acquisition of 49% stake in Veritas Energia S.r.l. 29
Consolidated cost of personnel Consolidated cost of personnel = +1.058 +9,2% (Thousand of Euro) Other changes: phantom stock options: Euro 0,6 mln change in consolidation criterion of Veritas Energia: 0,9 mln other: Euro 0,4 mln 1stH 2014 cost of personnel of the companies consolidated with net equity consolidation method (Sinergie Italiane excluded): Euro 1,8 mln (+1,6%). 30
Contents Financial highlights Operating data Revenues and EBITDA Gross margin on gas and electricity activities and other net operating costs Personnel Capex Net Financial Position and cash flow 31
Capex (**) = -731-7,7% Consolidated capex (*) (Thousand of Euro) Gas distribution systems: Euro 6,0 mln Gas meters: Euro 1,9 mln Other: Euro 0,8 mln 1stH 2014 investments of the companies consolidated with net equity consolidation method (Sinergie Italiane excluded): Euro 1,0 mln (-19,6%). (*) Excluding network extension in new urbanized areas that according to IAS are considerated as operating costs and not investments. (**) Investments in tangible assets: Euro 0,4 mln; investments in intangible assets: Euro 8,3 mln (excluded realizations of tangible and intangible assets and investments in associated). 32
Contents Financial highlights Operating data Revenues and EBITDA Gross margin on gas and electricity activities and other net operating costs Personnel Capex Net Financial Position and cash flow 33
Net Financial Position and cash flow (1) Net Financial Position and cash flow Companies consolidated with full consolidation method (Thousand of Euro) = +22.688-18,3% Change in consolidation criteria: Euro 5.801 thousand Enlargement of consolidation perimeter: Euro 5.573 thousand 34
Net Financial Position and cash flow (2) Net Financial Position and cash flow Companies consolidated with net equity consolidation method (*) (Thousand of Euro) = -1.412 +18,1% (*) Sinergie Italiane excluded. 35
Net Financial Position and cash flow (3) (Thousand of Euro) (*) 30/06/2014 31/12/2013 Var Var % Long term financial borrowings (>12 months) 58.227 63.201 (4.974) -7,9% Current position of long term financial borrowings 9.870 9.784 86 +0,9% Short term financial borrowings (<12 months) 41.878 67.814 (25.936) -38,2% Total financial debt 109.975 140.799 (30.824) -21,9% Fixed rate borrowings 1.058 1.304 (246) -18,9% Variable rate borrowings 108.917 139.495 (30.578) -21,9% 1stH 2014 average cost of debt: 1,36% (vs FY 2013 rate: 1,86%) (*) Data refers to only companies consolidated with full consolidation method. 36