Integrated Annual Report 2021
| (€ million) | 2020 | 2020(**) restated | 2021 | Abs. change | Change % |
| Gas Distribution regulated revenues | 1,394.3 | 1,394.3 | 1,294.5 | (99.8) | (7.2) |
| of which distribution revenue | 1,183.7 | 1,183.7 | 1,200.1 | 16.4 | 1.4 |
| of which Other distribution revenue | 102.2 | 102.2 | 94.4 | (7.8) | (7.6) |
| of which special items | 108.4 | 108.4 | – | (108.4) | – |
| Adjusted gas distribution regulated revenue | 1,285.9 | 1,285.9 | 1,294.5 | 8.6 | 0.7 |
| Other revenues | 47.9 | 47.9 | 76.3 | 28.4 | 59.3 |
| Total revenues (*) | 1,442.2 | 1,442.2 | 1,370.8 | (71.4) | (5.0) |
| Adjusted total revenues | 1,333.8 | 1,333.8 | 1,370.8 | 37.0 | 2.8 |
| Operating costs | (414.3) | (416.1) | (361.9) | 54.2 | (13.0) |
| of which special items | (51.9) | (51.9) | – | 51.9 | – |
| Adjusted operating costs | (362.4) | (364.2) | (361.9) | 2.3 | (0.6) |
| EBITDA | 1,027.9 | 1,026.1 | 1,008.9 | (17.2) | (1.7) |
| Adjusted EBITDA | 971.4 | 969.6 | 1,008.9 | 39.3 | 4.1 |
| Amortisation, depreciation and impairment | (424.6) | (420.5) | (425.7) | (5.2) | 1.2 |
| EBIT | 603.3 | 605.6 | 583.2 | (22.4) | (3.7) |
| Adjusted EBIT | 546.8 | 549.1 | 583.2 | 34.1 | 6.2 |
| Net financial expense | (49.2) | (49.2) | (60.4) | (11.2) | 22.8 |
| of which special items | – | – | (6.4) | (6.4) | – |
| Adjusted net financial expense | (49.2) | (49.2) | (54.0) | (4.8) | 9.8 |
| Net income from equity investments | 1.5 | 1.5 | 2.5 | 1.0 | 66.7 |
| Gross profit | 555.6 | 557.9 | 525.3 | (32.6) | (5.8) |
| Adjusted gross profit | 499.1 | 501.4 | 531.7 | 30.3 | 6.0 |
| Income taxes | (152.0) | (152.7) | (141.9) | 10.8 | (7.1) |
| taxation related to special items | (16.9) | (16.9) | 1.5 | 18.4 | – |
| Adjusted income taxes | (135.1) | (135.8) | (143.4) | (7.6) | 5.6 |
| Net profit | 403.6 | 405.2 | 383.4 | (21.8) | (5.4) |
| Net profit attributable to the Group | 383.0 | 384.6 | 362.8 | (21.8) | (5.7) |
| Net profit attributable to minority shareholders | 20.6 | 20.6 | 20.6 | 0.0 | 0.0 |
| Adjusted net profit | 364.0 | 365.6 | 388.3 | 22.7 | 6.2 |
| Adjusted net profit attributable to the Group | 345.4 | 347.0 | 367.7 | 20.7 | 6.0 |
| Adjusted net profit attributable to minority interests | 18.6 | 18.6 | 20.6 | 2.0 | 10.8 |
(*) Unlike the legal statement, the reclassified income statement requires the listing of Total revenues and Operating costs net of the impact of IFRIC 12 “Serviceconcession agreements” (€ 772.0 and € 668.2 million respectively in 2021 and 2020), connection contributions (€ 19.6 and € 19.5 million respectively in 2021 and 2020)and other residual components (€ 0.8 and € 3.2 million respectively in 2021 and 2020).
(**) Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where suchdevices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongstoperating costs, in accordance with current accounting standards. In order to ensure comparability with the income statement items, the items relating to Operating costs(€ -1.8 million), Amortisation, depreciation and impairment (€ +4.1 million) and Income taxes (€ -0.7 million) were therefore adjusted as of 31 December 2020.
Adjusted operating profit (adjusted EBIT), net of non-recurring items, achieved in financial year 2021, amounted to € 583.2 million, with an increase of € 34.1 million compared to 31 December 2020 (+6.2%) due to higher adjusted total revenues (€ 37.0 million; +2.8%), lower adjusted operating costs (€ -2.3 million; -0.6%), partially offset by higher amortisation, depreciation and impairment (€ 5.2 million; +1.2%).
Adjusted net profit for FY 2021, comes to € 388.3 million, was up by € 22.7 million, or +6.2%, on 2020 net profit.
Adjusted net profit attributable to the Group came to € 367.7 million and has increased on FY 2020 (€ 20.7 million; +6,0%).
Italgas’ management assesses Group performance on the basis of alternative performance indicators71 not envisaged by IFRS, obtained by excluding special items from EBIT and net profit.
The income components are classified as special items, if significant, when: (i) they result from non-recurring events or transactions or from transactions or events which do not occur frequently in the ordinary course of business; or (ii) they result from events or transactions which are not representative of the normal course of business.
The tax rate applied to the items excluded from the calculation of adjusted net profit is determined on the basis of the nature of each revenue item subject to exclusion. Adjusted EBIT and adjusted net profit are not provided for by either IFRS or other standard setters. These performance metrics allow for analysis of the business trends, making it easier to compare results. The NON-GAAP financial report must be considered complementary to and not replacing the reports prepared according to IFRS.
The income components classed among special items in 2021 referred to:
The effect on adjusted net profit was € 4.9 million in terms of lower expenses.
The income components classed among special items in 2020 referred to:
With reference to the higher revenues pursuant to Article 57, the Company has already recorded the effects on the 2020 financial statements by virtue of DCO no. 545/2020/R/gas, whereby the Authority announced its intention to amend the RTDG 2020-2025, proposing that disposals relating to meters up to class G6 be determined using the so-called regulatory FIFO method and that this criterion be extended to the disposals of traditional meters higher than class G6, thereby making the criterion for determining residual depreciation uniform for all meters disposed of under the Directives.
The greater contribution is also made up of the amount for the recovery of non-depreciation (so-called IRMA) relating to meters class G6 or lower replaced with the smart meters introduced by Resolution no. 570/2019/R/gas.
| (€ million) | 2020 | 2021 |
| Total revenue | 1,442.2 | 1,370.8 |
| Excluding special items | (108.4) | – |
| Adjusted total revenues | 1,333.8 | 1,370.8 |
| Total operating costs | (416.1) | (361.9) |
| Excluding special items | 51.9 | – |
| Adjusted total operating costs | (364.2) | (361.9) |
| EBITDA | 1,026.1 | 1,008.9 |
| Excluding special items | (56.5) | – |
| Adjusted EBITDA | 969.6 | 1,008.9 |
| EBIT | 605.6 | 583.2 |
| Excluding special items | (56.5) | – |
| Adjusted EBIT | 549.1 | 583.2 |
| Net financial expense | (49.2) | (60.4) |
| Excluding special items | – | 6.4 |
| Adjusted net financial expense | (49.2) | (54.0) |
| Net income from equity investments | 1.5 | 2.5 |
| Gross profit | 557.9 | 525.3 |
| Excluding special items | (56.5) | 6.4 |
| Adjusted gross profit | 501.4 | 531.7 |
| Income taxes | (152.7) | (141.9) |
| Excluding special items | 16.9 | (1.5) |
| Net profit (loss) | 405.2 | 383.4 |
| Net profit (loss) attributable to minority interests | 20.6 | 20.6 |
| Net profit (loss) attributable to the Group | 384.6 | 362.8 |
| Excluding special items | ||
| revenues pursuant to Article 57 (*) | (77.2) | – |
| financial expense from bond buyback (*) | – | 4.9 |
| expense for staff leaving incentives (*) | 9.7 | – |
| provision for faulty meters (*) | 27.6 | – |
| co-investment plans (*) | 0.3 | – |
| Adjusted net profit (loss) | 365.6 | 388.3 |
| Adjusted net profit (loss) attributable to minority interests | 18.6 | 20.6 |
| Adjusted net profit (loss) attributable to the Group | 347.0 | 367.7 |
(*) Net of the related tax effect.
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Total gas distribution regulated revenue | 1,394.3 | 1,294.5 | (99.8) | (7.2) |
| Distribution revenue | 1,183.7 | 1,200.1 | 16.4 | 1.4 |
| Other distribution revenue | 102.2 | 94.4 | (7.8) | (7.6) |
| of which special items | 108.4 | – | (108.4) | – |
| Total adjusted gas distribution regulated revenue | 1,285.9 | 1,294.5 | 8.6 | 0.7 |
| Other revenue | 47.9 | 76.3 | 28.4 | 59.3 |
| Adjusted total revenue | 1,333.8 | 1,370.8 | 37.0 | 2.8 |
| Total revenue | 1,442.2 | 1,370.8 | (71.4) | (5.0) |
Adjusted total revenues for 2021 totalled € 1,370.8 million, up by € 37.0 million compared to 2020 (+2.8%).
Adjusted gas distribution regulated revenues increased by € 8.6 million compared to the same period of 2020 due to an increase in revenues from transmission (€ 16.4 million) offset by a reduction in other regulated gas distribution revenues (€ -7.8 million).
The increase in distribution revenue (€ 16.4 million), attributable to the increase in the RAB (€ 21.0 million), the effect of the deflator (€ 5.4 million), the contribution of the Sardinian networks (€ 8.1 million) and other regulation components (€ 4.8 million), mainly such as the tariff recognition of extra costs relating to the single asset fee (€ 1.9 million) and repayments for metrological checks (€ 2.2 million), more than offset the application of the X-factor according to the terms of ARERA Resolution 570/2019 (€ -7.9 million). Finally, lesser positive tariff balances are recorded than the previous year (€ -15.0 million).
The reduction of other regulated revenues (€ 7.8 million) is mainly linked to the lesser contribution pursuant to Article 57 of ARERA Resolution no. 367/14, as subsequently amended and supplemented, relative to the replacement of traditional meters with electronic ones (€ 13.9 million at 31 December 2021; € 30.2 million at 31 December 2020) partly offset by greater revenues from services to customers (€ 8.5 million), up on FY 2020 (very much impacted by the restrictive measures introduced as a result of the Covid-19 emergency).
Other revenues amounted to € 76.3 million as of 31 December 2021. The increase of € 28.4 million on the same period of 2020 is essentially linked to the increased activities in energy efficiency (€ 28.1 million) and revenues deriving from the sale of natural gas and LPG (€ 3.3 million), net of lesser revenues linked to sundry activities.
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Fixed gas distribution costs | 260.3 | 237.2 | (23.1) | (8.9) |
| net personnel cost | 146.3 | 137.9 | (8.4) | (5.7) |
| of which special items | 0.4 | – | (0.4) | – |
| net external costs | 114.0 | 99.3 | (14.7) | (12.9) |
| Adjusted Fixed gas distribution costs | 259.9 | 237.2 | (22.7) | (8.7) |
| Other assets | 24.9 | 53.5 | 28.6 | – |
| net personnel cost | 3.6 | 5.3 | 1.7 | 47.2 |
| net external costs | 21.3 | 48.2 | 26.9 | – |
| Other costs and provisions | 57.9 | 3.8 | (54.1) | (93.4) |
| of which special items | 51.5 | – | (51.5) | – |
| Other adjusted costs and provisions | 6.4 | 3.8 | (2.6) | (40.6) |
| EEC | 5.0 | (2.2) | (7.2) | – |
| Concession-related expenses | 68.0 | 69.6 | 1.6 | 2.4 |
| Adjusted operating costs | 364.2 | 361.9 | (2.3) | (0.6) |
| Operating costs | 416.1 | 361.9 | (54.2) | (13.0) |
Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the income statement items, the item relating to operating costs was adjusted as of 31 December 2020 (-€ 1.8 million).
Adjusted operating costs amounted to € 361.9 million. Compared with the same period in 2020, these have dropped by € 2.3 million due to the result of lesser i) net personnel costs (€ 6.3 million), ii) net costs in connection with Energy Efficiency Certificates (€ 7.2 million), iii) other costs and provisions (€ 2.6 million) and iv) net external costs of gas distribution (€ 14.7 million), partly offset by greater v) net external costs for energy efficiency and marketing of methane and other gases in Sardinia (€ 26.9 million) and vi) concession charges (€ 1.6 million).
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Amortisation and depreciation | 419.6 | 424.8 | 5.2 | 1.2 |
| Intangible assets IFRIC 12 | 339.8 | 344.8 | 5.0 | 1.5 |
| Other Intangible Assets | 43.5 | 40.9 | (2.6) | (6.0) |
| Property, plant and equipment | 36.3 | 39.1 | 2.8 | 7.7 |
| of which amortisation of Right of Use | 20.2 | 22.9 | 2.7 | 13.4 |
| Impairment | 0.9 | 0.9 | – | – |
| 420.5 | 425.7 | 5.2 | 1.2 |
Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the income statement items, the item relating to Amortisation, depreciation and impairment (+€ 4.1 million) was adjusted as of 31 December 2020.
Amortisation, depreciation and impairment (€ 425.7 million) increased by € 5.2 million (+1.2% compared to 31 December 2020) compared to the corresponding period of 2020, due mainly to the investments made in the previous financial year, offset by lower depreciation in relation to the replacement of traditional meters in view of the upcoming completion of the replacement plan (€ 1.5 million at 31 December 2021; € 17.7 million at 31 December 2020).
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Expense (income) on short-term and long-term financial debt | 48.9 | 56.1 | 7.2 | 14.7 |
| of which special items | – | 6.4 | 6.4 | – |
| Upfront fee | 4.8 | 6.3 | 1.5 | 31.3 |
| Other net financial expense (income) | (2.6) | (0.1) | 2.5 | (96.2) |
| Expenses (income) related to the discounting of environmental provisions and provisions for employee benefits | 2.0 | 1.1 | (0.9) | (45.0) |
| Other net financial expense (income) | (4.6) | (1.2) | 3.4 | (73.9) |
| Financial expense capitalised | (1.9) | (1.9) | – | – |
| Adjusted net financial expense | 49.2 | 54.0 | 4.8 | 9.8 |
| Net financial expense | 49.2 | 60.4 | 11.2 | 22.8 |
Adjusted net financial expense, i.e. net of the accounting effects of the bond buyback (€ 6.4 million) finalised in February 2021, amounted to € 54.0 million at 31 December 2021, up by € 4.8 million on FY 2020, mainly due to i) lesser other net financial income for € 3.4 million and ii) higher upfront fees connected with the 2021 bond issue for € 1.5 million.
Net income from equity investments, of € 2.5 million at 31 December 2021, increased by € 1.0 million on FY 2020, mainly due to the contribution made by affiliates, measured using the equity method.
| (€ million) | 2020 | 2021 | Abs. change | Change % |
| Current taxes | 186.2 | 154.6 | (31.6) | (17.0) |
| Net deferred taxes | (33.5) | (12.7) | 20.8 | (62.1) |
| Income taxes | 152.7 | 141.9 | (10.8) | (7.1) |
| taxation related to special items | (16.9) | 1.5 | 18.4 | – |
| Adjusted income taxes | 135.8 | 143.4 | 7.6 | 5.6 |
| Effective tax rate (%) | 27.4% | 27.0% | (0.4) | (1.3) |
| Adjusted effective tax rate (%) | 27.1% | 27.0% | (0.1) | (0.4) |
Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the income statement items, the item relating to Income taxes (-€ 0.7 million) was adjusted as of 31 December 2020
Income taxes came to € 141.9 million, down € 10.8 million compared to the same value of the previous year, essentially as a consequence of the lower period result. Note that the higher result for financial year 2020 was characterised by special items relative to the higher revenues associated with the Art. 57 contribution relative to the replacement of traditional meters with electric ones due to the change in methodology compared to previous years and the recovery of non-depreciation (so-called IRMA) pursuant to Consultation Document 545/2020/R/gas and Resolution no. 570/2019/R/gas, net of provisions for staff leaving incentives and recovery of metering instruments.
The tax rate was 27.0% (27.4% in 2020).
The reconciliation of the theoretical tax rate with the effective tax rate is described in the note “Income taxes” in the Notes to the consolidated financial statements.
The Reclassified Statement of Financial Position combines the assets and liabilities of the mandatory format included in the consolidated financial statements based on the criterion of how the business operates, conventionally split into the three basic functions of investment, operations and financing.
The statement provided represents useful information for the investor because it makes it possible to identify the sources of financial resources (own and third-party funds) and uses of financial resources in fixed and working capital.
The Italgas’ Reclassified Statement of Financial Position as at 31 December 2021, compared with that as at 31 December 2020, is summarised below:
| (€ million) | 31.12.2020(**) | 31.12.2021 | Abs. change |
| Fixed capital (*) | 6,707.2 | 7,106.2 | 399.0 |
| Property, plant and equipment | 369.9 | 372.1 | 2.2 |
| Intangible assets | 6,511.5 | 6,938.1 | 426.6 |
| Equity investments | 34.2 | 35.1 | 0.9 |
| Financial receivables and securities instrumental to operations | 0.2 | 2.8 | 2.6 |
| Net payables related to investments | (208.6) | (241.9) | (33.3) |
| Net working capital | 111.2 | 109.7 | (1.5) |
| Provisions for employee benefits | (104.6) | (95.6) | 9.0 |
| Assets held for sale and directly related liabilities | 0.1 | 2.2 | 2.1 |
| NET INVESTED CAPITAL | 6,713.9 | 7,122.5 | 408.6 |
| Shareholders’ equity | 1,977.4 | 2,142.5 | 165.1 |
| attributable to the Italgas Group | 1,737.4 | 1,891.4 | 154.0 |
| attributable to minority shareholders | 240.0 | 251.1 | 11.1 |
| Net financial debt (***) | 4,736.5 | 4,980.0 | 243.5 |
| HEDGING | 6,713.9 | 7,122.5 | 408.6 |
(*) Net of the effects deriving from the application of IFRS 15.
(**) Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs,
where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the balance sheet items, the items relating to intangible assets (-€ 5.1 million), shareholders’ equity (-€ 3.6 million) and tax assets (+€ 1.5 million) were adjusted as of 31 December 2020.
(***) At 31 December 2021, the item did not consider liabilities for € 5.6 million due to Conscoop, consisting of shareholder loans disbursed by it to Isgastrentatrè, later incorporated into Medea, insofar as they were considered part of the deferred purchase price settlement.
The net invested capital at 31 December 2021 amounted to € 7,122.5 million and consists of the items outlined below.
The fixed capital (€ 7,106.2 million) increased by € 399.0 million compared to 31 December 2020, essentially due to the increase in tangible and intangible assets (€ 428.8 million), net of the increase in net payables related to investments (€ 33.3 million).
The intangible fixed assets (€ 6,938.1 million), which include assets for services in concession posted in the accounts pursuant to IFRIC 12, recorded an increase of € 426.6 million mainly following investments of € 778.5 million, net of contributions received and the change in the scope of consolidation for € 47.0 million, less amortisation, depreciation and impairment for € 386.6 million and disposals and sales of € 13.5 million.
The tangible fixed assets (€ 372.1 million), which mainly related to property, plant and equipment, recorded an increase of € 2.2 million principally due to the effect of investments of € 45.7 million, including € 14.9 million linked to the application of IFRS 16, net of depreciation of € 39.1 million, of which € 22.9 linked to the right of use pursuant to IFRS 16 and disposals and sales in the amount of € 3.9 million.
Below is an analysis of the change in Property, plant and equipment and Intangible assets:
| (€ million) | Property, plant and equipment | IFRIC 12 assets | Intangible assets | Total |
| Saldo al 3Balance at 31 December 20201 dicembre 2020 | 369.9 | 6,332.7 | 178.8 | 6,881.4 |
| Investments | 45.7 | 774.0 | 45.4 | 865.1 |
| of which IFRS 16 | 14.9 | – | – | 14.9 |
| Amortisation, depreciation and impairment | (39.1) | (344.5) | (42.1) | (425.7) |
| of which D&A pursuant to IFRS 16 | (22.9) | – | – | (22.9) |
| Acquisition of companies and business units and asset | 0.4 | 26.9 | 20.1 | 47.4 |
| Contributions received | – | (40.9) | – | (40.9) |
| Disposals and sales | (3.9) | (12.8) | (0.7) | (17.4) |
| Other changes | (0.9) | (3.4) | 4.6 | 0.3 |
| Balance at 31 December 2021 | 372.1 | 6,732.0 | 206.1 | 7,310.2 |
Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the balance sheet items, the item relating to intangible assets (-€ 5.1 million) was adjusted as of 31 December 2020.
The acquisition of companies and business units and asset item includes the effect of the purchases of assets of the Olevano sul Tusciano concession (€ 1.8 million), of the companies Ceresa (€ 20.3 million) and Isgastretantrè (€ 25.3 million).
Disposals and sales mainly include the effect of sales of real estate (€ 3.9 million) and the replacement of meters showing anomalies (€ 9.4 million).
Equity investments (€ 35.1 million) refer mainly to the companies Gesam Reti, Valdarno, Um- bria Distribuzione Gas, Metano S. Angelo Lodigiano, Enerpaper and Reti Distribuzione.
Consolidated net working capital at 31 December 2021 amounts to € 109.7 million and is bro- ken down as follows:
| (€ million) | 31.12.2020(**) | 31.12.2021 | Abs. change |
| Trade receivables | 462.2 | 388.6 | (73.6) |
| Inventories | 101.2 | 105.3 | 4.1 |
| Tax receivables | 64.4 | 71.6 | 7.2 |
| Accuals and deferrals from regulated activities | 202.8 | 115.8 | (87.0) |
| Other assets | 148.3 | 186.4 | 38.1 |
| Trade payables | (303.0) | (300.9) | 2.1 |
| Provisions for risks and charges | (202.6) | (159.5) | 43.1 |
| Deferred tax liabilities | (55.2) | (50.8) | 4.4 |
| Tax payables | (43.5) | (12.1) | 31.4 |
| Other liabilities | (263.4) | (234.7) | 28.7 |
| 111.2 | 109.7 | (1.5) |
Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the balance sheet items, the item relating to tax payables (-€ 1.5 million) was adjusted as of 31 December 2020.
Compared to 31 December 2020, net working capital fell by € 1.5 million due to: i) lower trade receivables (€ 73.6 million), mainly linked to the reduction of receivables due from the sales companies and the equalisation balance to CSEA; ii) an increase in inventories (€ 4.1 million) predominantly in relation to gas meters; iii) a decrease in net tax liabilities (€ 43.0 million) due mainly to the lower period taxable income; iv) a decrease in accruals and deferrals from regulated activities (€ 87.0 million) due to receivables relating to the contribution for meters pursuant to Art. 57 of ARERA Resolution no. 367/14 as amended, transferred to a factor; v) an increase in other assets (€ 38.1 million) mainly relating to the accessory billing components and receivables due from CSEA for safety incentives; vi) a decrease in trade payables (€ 2.1 million) relating to the equalisation balance due to CSEA; vii) a decrease in provisions for risks and charges (€ 43.1 million), mainly linked to the reduction of the reclamation provision (€ 25.5 million) and use of the provision for risks for operational restoration of metering instruments (€ 14.1 million); viii) a decrease in other liabilities for the period (€ 28.7 million), mainly for the accessory billing components, partly offset by the increase in payables for concession fees due to Municipalities.
It was pointed out that the Company had finalised factoring agreements with financial counterparties, on which basis the receivables claimed by the company could be transferred without recourse. In particular, transactions were completed for a total of € 306.2 million (2020: € 356.2 million) the factoring of receivables related to: i) trade receivables relating to distribution due on 31 December 2021 for € 66.6 million, ii) receivables due from CSEA for a total of € 182.9 million (additional components of € 44.3 million, cancellation of Energy Efficiency Certificates for € 37.9 million and contribution pursuant to Article 57 of ARERA Resolution no. 367/14 as subsequently amended and supplemented for € 100.7 million) and iii) other receivables for a total of € 56.7 million (tax, public grants).
| (€ million) | 31.12.2020 | 31.12.2021 | Abs. change |
| Financial and bond debt | 5,405.1 | 6,376.9 | 971.8 |
| Short-term financial debt (*) | 677.7 | 571.6 | (106.1) |
| Long-term financial debt | 4,651.1 | 5,735.3 | 1,084.2 |
| Finance lease payables – IFRS 16 | 76.3 | 70.0 | (6.3) |
| Financial receivables and cash and cash equivalents | (668.6) | (1,396.9) | (728.3) |
| Cash and cash equivalents | (663.5) | (1,391.8) | (728.3) |
| Financial receivables | (5.0) | (5.0) | – |
| Securities not instrumental to operations | (0.1) | (0.1) | – |
| Net financial debt (**) | 4,736.5 | 4,980.0 | 243.5 |
| Finance lease payables – IFRS 16 | 76.3 | 70.0 | (6.3) |
| Net financial debt (excluding the effects pursuant to IFRS 16) | 4,660.2 | 4,910.0 | 249.8 |
(*) These include the short-term portions of long-term financial debt
(**) At 31 December 2021, the item did not consider liabilities for € 5.6 million due to Conscoop, consisting of shareholder loans disbursed by it to Isgastrentatrè, later incorporated into Medea, insofar as they were considered part of the deferred purchase price settlement.
Net financial debt as at 31 December 2021 amounted to € 4,980.0 million, up by 243.5 million euros compared to 31 December 2020. Excluding the effects deriving from the application of IFRS 16, (€ 70.0 million), the net financial debt came to € 4,910.0 million (€ 4,660.2 million at the end of 2020).
Gross financial and bond debt as of 31 December 2021, amounting to € 6,376.9 million (€ 5,405.1 million as of 31 December 2020), relates to bonds (€ 4,591.5 million), loan agreements concerning European Investment Bank (EIB) funding (€ 828.1 million), liabilities pursuant to IFRS 16 (€ 70.0 million) and bank loans (€ 887.3 million).
Cash, amounting to € 1,391.8 million, up by € 728.3 million compared to 31 December 2020, is held in current accounts immediately available with leading banks. The increase mainly stems from the funding generated by the bond issued in February 2021, with the aim of anticipating future financial needs.
The breakdown of gross financial debt by type of interest rate as at 31 December 2021 is as follows:
| (€ million) | 31.12.2020 | % | 31.12.2021 | % |
| Fixed rate | 4.676,3 | 86,5 | 5.910,9 | 92,7 |
| Floating rate | 728,8 | 13,5 | 466,0 | 7,3 |
| Gross financial debt | 5.405,1 | 100,0 | 6.376,9 | 100,0 |
Fixed-rate financial liabilities amounted to € 5,910.9 million and mainly refer to bonds (€ 4,591.5 million), EIB loans (€ 712.4 million), bank loans (€ 537.0 million) and financial liabilities pursuant to IFRS 16 (€ 70.0 million).
Fixed-rate financial liabilities increased by € 1,234.6 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. In view of the net liquidity from the “dual-tranche” bond issue, on 12 March 2021 Italgas cancelled the “Revolving Credit Facility” of € 500 million, maturing in October 2021 and completely unused.
Floating-rate financial liabilities were down by € 262.8 million due to the decreased use of bank credit lines, also thanks to the greater liquid funds available.
As at 31 December 2021, there were no loan agreements containing financial covenants and/ or secured by collateral, with the exception of an EIB loan for nominal € 90 million taken out by Toscana Energia, which requires compliance with certain financial covenants.
Some of these contracts provide, inter alia, for the following: (i) negative pledge commitments pursuant to which Italgas and its subsidiaries are subject to limitations on pledging real prop- erty 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 trans- actions that the Company and its subsidiaries may carry out. As at 31 December 2021, these commitments were respected.
| (€ million) | 2020 | 2021 |
| Net profit | 405.2 | 383.4 |
| Altre comOther comprehensive incomeponenti dell’utile complessivo | ||
| Components reclassifiable to the income statement: | ||
| Change in fair value of cash flow hedge derivatives (Effective portion) | (10.3) | 14.8 |
| Tax effect | 2.5 | (3.6) |
| (7.8) | 11.2 | |
| Components not reclassifiable to the income statement: | ||
| Actuarial gains (losses) from remeasurement of defined benefit plans for employees | (4.6) | 1.9 |
| Tax effect | 1.3 | (0.5) |
| (3.3) | 1.4 | |
| Total other components of comprehensive income, net of tax effect | (11.1) | 12.6 |
| Total comprehensive income for the year | 394.1 | 396.0 |
| Attributable to: | ||
| Italgas | 372.0 | 375.3 |
| Minority interests | 20.5 | 20.7 |
| 392.5 | 396.0 |
| (€ million) | 2021 |
| Shareholders’ equity as at 31 December 2020 | 1,977.4 |
| of which: | |
| Group shareholders’ equity | 1,737.4 |
| Shareholders’ equity of minority shareholders | 240.0 |
| Increase for: | |
| – 2021 comprehensive income | 383.4 |
| of which: | |
| Profit attributable to the Group | 362.8 |
| Profit attributable to minority shareholders | 20.6 |
| Stock grant reserve | 2.2 |
| IAS 19 valuation reserve | 1.4 |
| Cash Flow Hedge valuation reserve | 11.2 |
| Payment of share capital by minority shareholders | 11.3 |
| 409.5 | |
| Decrease for: | |
| – Italgas 2020 dividend distribution | (224.3) |
| – 2020 dividend distributed to minority shareholders* | (19.5) |
| (243.8) | |
| – Other changes | |
| of which: | |
| Attributable to the Group | 0.7 |
| Attributable to minority shareholders | 1.4 |
| Group shareholders’ equity | 1,891.4 |
| Shareholders’ equity of minority shareholders | 251.1 |
| Shareholders’ equity as at 31 December 2021 | 2,142.5 |
(*) This is the extraordinary dividend paid by Toscana Energia.
The reclassified statement of cash flows provided below is the summary of the legally required cash flow statement. The reclassified statement of cash flows makes it possible to reconcile the change in cash and cash equivalents at the start and end of the period with the change in net financial debt at the start and end of the period. The measure which allows for the reconciliation between the two statements is the free cash flow72, i.e. the cash surplus or deficit remaining after the financing of investments.
| (€ million) | 2020(**) | 2021 |
| Net profit | 405.2 | 383.4 |
| Correction: | ||
| Depreciation and amortisation and other non-monetary components | 424.2 | 426.6 |
| Net capital losses (capital gains) on asset sales and eliminations | (1.1) | 3.6 |
| Interest and income taxes | 201.9 | 203.6 |
| Change in working capital due to operating activities | (110.8) | 76.5 |
| Dividends, interest and income taxes collected (paid) | (176.2) | (261.8) |
| Cash flow from operations (*) | 743.2 | 831.9 |
| Technical investments | (740.0) | (809.3) |
| Other changes related to investments activities | (5.2) | 14.6 |
| Divestments and other changes | 2.0 | 12.5 |
| Free cash flow before M&A transactions | – | 49.7 |
| Companies included in the scope of consolidation | (4.4) | (22.1) |
| Acquisition of business units and plants | (9.7) | (1.7) |
| Free cash flow | (14.1) | 25.9 |
| Change in short- and long-term financial debt and financial receivables | 657.3 | 955.7 |
| Reimbursements of financial liabilities for leased assets | (24.1) | (21.5) |
| Capital contribution from third parties | – | 11.3 |
| Equity cash flow | (211.4) | (243.1) |
| Net cash flow for the year | 407.7 | 728.3 |
(*) Net of the effects deriving from the application of IFRS 15.
(**) Up until 31 December 2020, the Group capitalised costs relating to the legally required periodic checks of volume conversion devices under operating costs, where such devices are present in the meters installed at the re-delivery points. At 31 December 2021, the Group retrospectively classified expenses relating to these checks amongst operating costs, in accordance with current accounting standards. In order to ensure comparability with the income statement items, the items relating to Operating costs (€ -1.8 million), Amortisation, depreciation and impairment (€ +4.1 million) and Income taxes (€ -1.5 million) were adjusted as of 31 December 2020.
| (€ million) | 2020(**) | 2021 |
| Free cash flow before M&A transactions | – | 49.7 |
| Change due to acquisitions of equity investments, business units and assets | (14.1) | (42.2) |
| Increase in finance lease payables | (25.7) | (15.2) |
| Equity cash flow | (211.4) | (243.1) |
| Capital contribution from third parties | – | 11.3 |
| Other changes (Difference between interest accounted for and paid) | – | (4.0) |
| Change in net financial debt | (251.2) | (243.5) |
The cash flow from operating activities at 31 December 2021 amounted to € 831.9 million, with an increase of € 85.3 million compared to the previous year (+11.4%). In view of the flow from net investments, totalling € 782.2 million, the company generated a free cash flow before M&A transactions of € 49.7 million. As of 31 December 2021, the cash outflow from M&A transactions amounted to € 23.8 million, bringing the free cash flow to € 25.9 million.
Taking into account payment of the dividend for € 243.1 million, net financial debt increased by € 243.5 million.
70 The paragraph “Comment on the economic and financial results” refers to the Italgas Group, which comprises: Italgas S.p.A., Italgas Reti S.p.A., Medea S.p.A., Gaxa S.p.A., Italgas Acqua S.p.A., Toscana Energia S.p.A., Seaside S.p.A., Bludigit S.p.A., Ceresa S.p.A. and Italgas NewCo S.r.l.
71 For the definition of alternative performance indicators, reference should be made to the chapter “Non-GAAP Measures” in this report.
72 The free cash flow alternatively closed: (i) the change in cash for the period, after the addition/subtraction of cash flows relating to financial payables/receivables (usage/repayment of financial receivables/payables) and equity (payment of dividends/capital contributions); (ii) the change in net financial debt for the period, after the addition/subtraction of flows of debt relating to equity (payment of dividends/capital contributions).
