Snam Spa

Good morning. This is the Course Call Conference Operator. Welcome and thank you for joining the SNAM First Quarter 2024 Consolidated Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Francesca Pezzoli, Head of Investor Relations of SNAM. Please go ahead, madam.

Good morning, ladies and gentlemen, and welcome to SNAM Q1 2024 Consolidated Results. Today's presentation will be hosted by our CEO, Stefano Venier, and by our CFO, Luca Passa. In the presentation, Stefano will provide you an overview of the key highlights of the period. Luca will walk you through the financial performance. Then back to Stefano for closing remarks and finally the Q&A session. And now I will hand over to Stefano.

Good morning. Let me go through key highlights on page two. First quarter posted a strong performance with adjusted EBDA at $703 million. up 18% year-on-year, mainly thanks to the weighted average cost of capital uplift, the Ross effect, the RAB growth, and the output-based incentives. Adjusted income at 335 is up 11% year-on-year, while investments reached 462 million, up 48% versus Q1 2023. and the debt at 15.8 billion with 2.4% average net cost of debt. Gas demand declined by 2.6%. This, along with the well-supplied market and high gas storage level in Europe, contributed to keep average gas prices 50% below the same period of last year. In April, gas prices experienced some volatility due to the colder weather conditions and the continuous geopolitical tensions. As known, the annual weighted average cost of capital update triggered an uplift of 80 BPS on transport and 60 basis points on storage and LNG applied from January 24. The base ROS was applied to transport from 2024 with positive effect on fast low money accounting. We have been contributed to the working groups set by the Italian Ministry of Energy and Environment, which has the target to release the H2 strategy by the summer along with the National Energy Plan and to define the CCS framework by the autumn. The European Commission announced recently the results of the EU hydrogen bank auctions, awarding more than 700 million, corresponding to 90% of the total available subsidy pool to several renewable hydrogen production projects across different areas and sectors. Moving to our associates, we continue with our active portfolio management. As you know, we have exercised the preemption right to increase from 7.3% to 30% our stake in Adriatic LNG Regas unit terminal, following the signing by VTTI of the agreement to acquire a majority stake in the company. The closing of the transaction is expected by the year end. The deal will further strengthen our asset platform in the LNG sector up to 20 BCM. Moreover, we are in the exclusive negotiation until June with Edison for a potential acquisition of Edison Stock Agile. At the same time, our strategy is to extract value from existing portfolio and we are actively engaging with the Austrian regulator for the 2025-2027 tariff review. The new reference price methodology is under consultation and we expect the final determination by the end of May. It will provide volume risk of sterilization and increase in the visibility of the next three-year regulatory period. Turning to page three, we are progressing on our strategy to become a pan-European multi-molecular operator, leveraging on synergies between gas infrastructure and energy transition businesses. Becoming a pan-European multi-molecular operator, leveraging on synergies between gas infrastructure and energy transition businesses. Starting from gas infrastructure. First, the works for the first phase of the Adriatic corridor, the backbone to strengthen the south to north capacity, just started. And we are progressing with the works with the Aravena FSRU terminal. To the latter, the onshore segment is 70% complete, while the offshore part is at 30% and the platform construction started in these days. The storage level reached 60% at the end of the winter, well above the historical levels for this period of the year. It was also supported by 3 BCM of commercial reverse flow service that we delivered to the system. and it will be helped keeping under control grass prices volatility and making the infilling season smoother. Finally, 100% of the 12.4 BCM of storage capacity for the 2024-2025 thermal year was allocated, of which 6.4 BCM during auction in April. Let's now move into energy transition. The two projects, South H2 Corridor and the Callisto Mediterranean CCS in Ravenna, in which we are involved as a partner, as you know, have both been confirmed by the European Commission in the sixth list of projects of common interest. The market sound we launched to assess the artobade industry's appetite was completed with large participation with more than 150 companies responding to the questionnaire, And the pilot phase of the Ravenna CCS project is on track. The injection phase will start by summer. With respect to Renovit backlog, it is stable at 1.2 billion, while on biomethane, eight plants won tariff option, corresponding to 18 megawatts, of which two are already under upgrade construction to biomethane. Finally, moving to sustainability and governance, capex aligned to EU taxonomy and SDGs represent respectively 34% and 55% of the total in Q1 2024. Following an extensive engagement with the shareholder ad of the AGM, we have further improved the average approval rate at approximately 99% vis-a-vis the 97% of last year. According to the most recent A recent shareholder analysis carried out, ESG investors represent about 50% of our institutional investors base, well above sector and Italian average. Finally, net zero assessment assigned by Moody's to our emission targets confirm a trajectory in line with the Paris Agreement. On page four, you have a summary on gas demand and flows. In Q1 2024, demand was about 20 BCM, down 2.6% or 0.5 BCM vis-à-vis Q1 2023. In detail, the thermoelectric sector was down 4.8% year-on-year, driven by higher hydroelectric and renewable production, increasing net electricity imports due to larger availability of nuclear in France, that was partly offset by a lower utilization of coal and electricity demand increase. TVL sector contracted by around 0.2 BCM due to milder temperature, especially in March, and the impact of the energy efficiency. Whilst industrial sector was up 1.8%, and we expect further growth due to the gas price projections for the next month. Moving to the gas flows, energy import made about 20% of the total demand, also thanks to the operations of the Piombino plant from July 2023. Now I will turn to Luca for the financial results.