Integrated Annual Report 2021
Italgas S.p.A. was incorporated on 1 June 2016 and listed on the Milan Stock Exchange from 7 November 2016.
In view of Italgas S.p.A.’s nature as an industrial investment holding, the following reclassified Income Statement has been prepared, which inverts the order of the income statement items under Leg. Decree 127/91, presenting first those which relate to the financial operations, as this is the most significant income component for those companies73.
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Income from investments | 239.7 | 264.1 | 24.4 | 10.2 |
| Interest income | 35.3 | 38.4 | 3.1 | 8.8 |
| of which special items | – | 2.9 | 2.9 | – |
| Interest expenses and other financial expenses | (52.8) | (61.5) | (8.7) | 16.5 |
| of which special items | – | (5.2) | (5.2) | – |
| Financial income and expenses | 222.2 | 241.0 | 18.8 | 8.5 |
| Adjusted financial income and expenses | 222.2 | 249.1 | 26.9 | 12.1 |
| Income from services | 104.1 | 102.2 | (1.9) | (1.8) |
| Other operating income | 104.1 | 102.2 | (1.9) | (1.8) |
| Other operating costs | ||||
| For staff | (59.9) | (48.8) | 11.1 | 18.5 |
| of which special items | 9.0 | – | (9.0) | – |
| For performance of non-financial services and other costs | (48.7) | (52.2) | (3.5) | (7.2) |
| Amortisation and depreciation | (6.6) | (5.3) | 1.3 | 19.7 |
| Total of other operating costs | (115.2) | (106.3) | 8.9 | 7.7 |
| Total of other operating costs – adjusted | (106.2) | (106.3) | (0.1) | (0.1) |
| Gross profit | 211.1 | 236.9 | 25.8 | 12.2 |
| Adjusted gross profit | 220.1 | 245.0 | 24.9 | 11.3 |
| Income taxes | 3.7 | 2.7 | (1.0) | (27.0) |
| taxation related to special items | (2.2) | (1.9) | 0.3 | (11.6) |
| Adjusted income taxes | 1.5 | 0.8 | (0.7) | (49.6) |
| Net profit | 214.8 | 239.6 | 24.8 | (11.5) |
| Adjusted net profit | 221.6 | 245.8 | 24.2 | (10.9) |
73 See Consob Communication 94001437 of 23 February 1994.
The net profit achieved in 2021 amounted to € 239.6 million, up by € 24.8 million from the corresponding value for 2020. Adjusted net profit came to € 245.8 million.
The income components classified as special items in 2021 regard i) lesser income (€ 2.9 million) supported for the renegotiation of a loan in respect of the subsidiary Medea, with effect as of 1 July 2021, net of the related taxation (€ 0.7 million) and ii) greater expense (€ 5.2 million) deriving from the bond buyback completed in February 2021, net of the related taxation (€ 1.3 million).
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Income from investments | 239.7 | 264.1 | 24.4 | 10.2 |
| Interest income | 35.3 | 38.4 | 3.1 | 8.8 |
| of which special items | – | 2.9 | 2.9 | |
| Interest expenses and other financial expenses | (52.8) | (61.5) | (8.7) | 16.5 |
| of which special items | – | (5.2) | (5.2) | – |
| Adjusted financial income and expenses | 222.2 | 249.1 | 18.8 | 8.5 |
| Total financial income and expenses | 222.2 | 241.0 | 26.9 | 12.1 |
Income from equity investments (€ 264.1 million) essentially includes the dividends distributed by Italgas Reti subsidiaries (€ 240.4 million) and Toscana Energia (€ 20.0 million).
Interest income (€ 38.4 million) essentially relates to income from the intragroup loans granted by Italgas to its subsidiaries.
Interest expense and other financial expense (€ 61.5 million) refers to the costs relating to financial debt, and essentially concerns bond loan expense74 (€ 54.6 million) and loans from banks (€ 6.6 million).
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Income from services | 104.1 | 102.2 | (1.9) | (1.9) |
| Other operating income | 104.1 | 102.2 | (1.9) | (1.9) |
74 The details of bond issues during the year and related terms are provided in the note “Short-term financial liabilities, long-term financial liabilities and short-term portions of long-term financial liabilities” in the Notes to the separate financial statements.
Other operating income (€ 102.2 million) refers mainly to chargebacks to subsidiaries of the costs incurred for the provision of services centrally managed by Italgas S.p.A. These services are regulated through agreements signed between Italgas S.p.A. and its subsidiaries and refer to the following areas: ICT, personnel and organisation, planning, administration, finance and control, procurement, general services, property and security services, legal and corporate affairs and compliance, health, safety and environment, institutional relations and regulation, external relations and communication, internal audit and Enterprise Risk Management (ERM).
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| For staff | (59.9) | (48.8) | 11.1 | 18.5 |
| of which special items | 9.0 | – | (9.0) | – |
| For performance of non-financial services and other costs | (48.7) | (52.2) | (3.5) | (7.2) |
| Amortisation and depreciation | (6.6) | (5.3) | 1.3 | 19.7 |
| Total of other operating costs – adjusted | (106.2) | (106.3) | (0.1) | (0.1) |
| Total of other operating costs | (115.2) | (106.3) | 8.9 | 7.7 |
Other operating expenses (€ 106.3 million) refer to personnel costs (€ 48.8 million) and costs for non-financial services, amortisation and other costs (€ 57.5 million). The latter includes costs for consulting and professional services (€ 8.3 million), ICT services (€ 22.2 million), costs relating to various service contracts (€ 10.7 million), other costs (€ 11.0 million).
Amortisation/depreciation (€ 5.3 million) reduces on 2020 following the transfer of IT assets to the subsidiary Bludigit.
| (€ million) | 31.12.2020 | 31.12.2021 | Abs, change |
| Fixed capital | 6,201.2 | 6,709.8 | 508.6 |
| Property, plant and equipment | 15.8 | 12.3 | (3.5) |
| Intangible assets | 13.5 | 0.4 | (13.1) |
| Equity investments | 2,994.6 | 3,010.4 | 15.8 |
| Financial receivables and securities instrumental to operations | 3,181.0 | 3,687.8 | 506.8 |
| Net payables (receivables) relating to investment activities | (3.7) | (1.1) | 2.6 |
| Net working capital | (31.6) | (10.8) | 20.8 |
| Provisions for employee benefits | (14.9) | (12.3) | 2.6 |
| NET INVESTED CAPITAL | 6,154.7 | 6,686.7 | 532.0 |
| Shareholders’ equity | 1,708.9 | 1,737.7 | 28.8 |
| Net financial debt | 4,445.8 | 4,949.0 | 503.2 |
| HEDGING | 6,154.7 | 6,686.7 | 532.0 |
Net invested capital amounted to € 6,686.7 million and rose by € 532.0 million compared to 31 December 2020, mainly as a result of the greater financial receivables instrumental to operations (€ 506.8 million).
Equity investments came to € 3,010.4 million and refer to the subsidiaries Italgas Reti, Italgas Acqua, Toscana Energia, Gaxa, Seaside, Italgas NewCo and Bludigit (€ 3,009.4 million) and joint ventures Umbria Distribuzione Gas and Metano S. Angelo Lodigiano (€ 1.0 million).
| (€ million) | 31.12.2020 | 31.12.2021 | Abs, change |
| Trade receivables | 49.1 | 37.2 | (11.9) |
| Tax receivables | 55.8 | 17.3 | (38.5) |
| Deferred tax assets | 9.0 | 4.7 | (4.3) |
| Other assets | 4.5 | 4.4 | (0.1) |
| Trade payables | (32.9) | (17.1) | 15.8 |
| Provisions for risks and charges | (8.4) | (8.0) | 0.4 |
| Tax payables | (74.7) | (31.2) | 43.5 |
| Other liabilities | (34.0) | (18.1) | 15.9 |
| (31.6) | (10.8) | 20.8 |
Net working capital (€ 10.8 million) dropped by € 20.8 million on 31 December 2020, mainly as a result of (i) the reduction in net tax items (€ 0.7 million), (ii) the reduction in trade receivables (€ 11.9 million) and trade payables (€ 15.8 million) mainly for IT services, a business held by Bludigit since July 2021, (iii) the reduction in other liabilities (€ 15.9 million) mainly connected to IRS hedging transactions.
| (€ million) | 31.12.2020 | 31.12.2021 | Abs. change |
| Financial and bond debt | 5,268.9 | 6,547.8 | 1,278.9 |
| Short-term financial debt (*) | 684.4 | 875.8 | 191.4 |
| Long-term financial debt | 4,571.6 | 5,662.5 | 1,090.9 |
| Finance lease payables – IFRS 16 | 12.9 | 9.5 | (3.4) |
| Financial receivables and cash and cash equivalents | (823.1) | (1,598.8) | (775.7) |
| Cash and cash equivalents | (657.1) | (1,384.6) | (727.5) |
| Financial receivables non-instrumental to operations | (166.0) | (214.2) | (48.2) |
| Net financial debt | 4,445.8 | 4,949.0 | 503.2 |
| Finance lease payables – IFRS 16 | 12.9 | 9.5 | (3.4) |
| Net financial debt (excluding the effects pursuant to IFRS 16) | 4,432.9 | 4,939.5 | 506.6 |
(*) Includes the short-term portion of long-term financial debt and financial debt to subsidiaries.
As at 31 December 2021, net financial debt, including the impacts of financial liabilities pursuant to IFRS 16 of € 9.5 million (€ 12.9 million in the corresponding period of 2020), amounted to € 4,949.0 million, up by € 503.2 million from 31 December 2020 (€ 4,445.8 million). Net of the impact of the application of IFRS 16, net financial debt amounted to € 4,939.5 million (€ 4,432.9 million as at 31 December 2020).
Financial and bond debt as at 31 December 2021 totalled € 6,547.8 million (€ 5,268.9 million as at 31 December 2020) and refer mainly to: bonds (€ 4,591.5 million), loan agreements with the European Investment Bank (EIB) (€ 750.4 million), (iii) payables to banks (€ 850.0 million) and (iv) financial liabilities pursuant to IFRS 16 (€ 9.5 million).
As at 31 December 2021, the breakdown of debt by type of interest rate, inclusive of liabilities for leases pursuant to IFRS 16 was as follows:
| (€ million) | 31.12.2020 | % | 31.12.2021 | % |
| Fixed rate | 4,527.0 | 85.9 | 6,082.1 | 92.9 |
| Floating rate | 741.9 | 14.1 | 465.7 | 7.1 |
| Gross financial debt | 5,268.9 | 100.0 | 6,547.8 | 100.0 |
Fixed-rate financial liabilities amounted to € 6,082.1 million and refer to bonds (€ 4,591.5 million), financial liabilities pursuant to IFRS 16 (€ 9.5 million), two EIB loans (€ 634.7 million) and bank loans (€ 846.4 million).
Fixed-rate financial liabilities increased by € 1,555.1 million compared to 31 December 2020, primarily due to the “dual-tranche” bond issue maturing in February 2028 and February 2033 for an overall total of € 1,000 million, partially offset by the buyback of bonds maturing in January 2022 and March 2024, for a total of € 255.7 million and the October 2021 subscription of two bank loans for a total of € 500.0 million, with a term of 3 years at zero rate.
Floating-rate financial liabilities were down by € 276.2 million due to the decreased use of bank credit lines, also thanks to the greater liquid funds available.
As at 31 December 2021, there are no loan contracts in place containing financial covenants and/or backed by real guarantees. Some of these contracts require, inter alia, compliance with: (i) negative pledge commitments pursuant to which Italgas and its subsidiaries are subject to limitations on pledging real property rights or other restrictions on all or part of the respective assets, shares or merchandise; (ii) pari passu and change-of-control clauses; and (iii) limitations on certain extraordinary transactions that the Company and its subsidiaries may carry out. As at 31 December 2021, these commitments were respected.
| (€ million) | 2020 | 2021 |
| Net profit | 214.9 | 239.6 |
| Correction: | ||
| Depreciation and amortisation and other non-monetary components | 6.6 | 4.1 |
| Interest and income taxes | (225.9) | (240.9) |
| Change in working capital due to operating activities | 19.6 | (9.5) |
| Dividends, interest and income taxes collected (paid) | 206.5 | 244.1 |
| Cash flow from operating activities | 221.7 | 237.4 |
| Technical investments | (7.8) | (8.7) |
| Equity investments | – | (0.7) |
| Net financial investments instrumental to operations | (558.0) | (506.8) |
| Other changes related to investments activities | (2.6) | (2.6) |
| Divestments and other changes | – | 4.6 |
| Free cash flow | (346.7) | (276.8) |
| Change in financial receivables not related to operations | 252.9 | 48.3 |
| Change in current and non-current financial debt | 791.4 | 1,181.8 |
| Reimbursements of financial liabilities for leased assets | (2.3) | (2.2) |
| Equity cash flow | (207.1) | (223.6) |
| Other changes relating to non-monetary components | 19.1 | – |
| Cash flow for the year | 507.3 | 727.5 |
| (€ million) | 2020 | 2021 |
| Free cash flow | (346.7) | (276.8) |
| Equity cash flow | (207.1) | (223.6) |
| Other changes (Difference between interest accounted for and paid) | 19.1 | (3.9) |
| Increase in finance lease payables | (2.5) | 1.1 |
| Change in net financial debt | (537.2) | (503.2) |
