Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Italgas Full Year 2022 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 Anna Maria Scaglia, Head of IR. Please go ahead, madam.
Hi, good afternoon, everyone, and thank you for joining us. Today, we walk you through our full year 2023 results. I'm Anna Maria Scaglia, Head of IR, joined by Mr. Paolo Gallo, our CEO, and Mr. Gianfranco Amoroso, our CFO. We will address any questions you might have at the end of the presentation. I now leave the floor to our CEO, Mr. Gallo.
Good afternoon to everybody, and I'm very pleased today to share with you the Italgas 2023 results, that have been just approved a couple of hours ago by our board of directors. I believe that our numbers prove the and confirm the strong reliability and soundness of our business model, while understanding the fact that we are acting, as you know, in a very volatile environment, and still our regulation does not recognize, does not recognize because of the time, like, all the macro, the inflation, the deflator, and, and everything, interest rate, that has been in fact included in our 2023 results. The two elements that have been the driver of our growth are Greece, and we will talk in a moment, and the energy efficiency company.
Even though, relevant to this latest one, the energy efficiency company, we have had an impact, negative impact on our cash flow due to the Superbonus. It's something that we have gone through every quarter of 2023, and as we said in October, we have anticipated to you the possibility not to sell the related receivable due to the market condition. And in fact, we decided not to do that, because market conditions were not there, and therefore, we preferred to keep our receivable in our balance sheet. Even though we were able to bring our leverage regarding the regulated business below 65%, and I would like also to underline, I'm sure that we will talk more in details about the water business. As you know, we closed the Veolia acquisition, the Veolia assets.
We closed the acquisition of Veolia assets, and, we have already started working very, with a very intense way in order to bring our grid expertise also into the water sector. We will take a look at the sustainability numbers. Some of the 2028 and 2030 objectives been already achieved, so well in advance. We are very happy about that. And finally, I think it's important to recognize that in 2024, the new regulatory elements will, of course, bring to us what we have already, let me say, discounted in 2020, 2023. I'm referring to inflation, interest rate, and the other macro.
Finally, our board of directors will propose to the next general assembly, that will take place on May sixth, a dividend of 0.352 EUR per share, that represent an increase of more than 11% in respect of last year results. Let's go and look at line by line about the results. If we are on page three, revenues were up by more than 15%, but the focus on the cost have been extremely strong. We will see that on a like for like basis, we were able to, understanding inflation rate, it was significant, to reduce our cost in respect to 2022. Of course, the boost in revenues are coming from our energy efficiency activity and by the consolidation of our Greek operation for 12 months.
The company, I remind you, that has been renamed Enaon. EBITDA and EBIT were bang in line with the guidance. Overall, considering our cost of debt and the positive fiscal impact of the Patent Box, Gianfranco will explain later in details, we were able to achieve an adjusted net income growth of 11.1% in respect to the previous year. If we move on the next page, page four, as we have already done in the previous quarter, we are representing the operating cash flow, that is slightly below last year, but also the operating cash flow without the energy efficiency business. In fact, in that second situation, we have seen an increase, a significant increase in respect to the previous year... 22%, despite the negative impact of lower volume distributed.
The difference is driven by Geoside, was sold about a little bit more than EUR 250 million of operating cash flow. CAPEX that includes 12 months of Greece are higher than last year, have passed again the EUR 900 million. And as a result of the dividend paid in the second quarter of the CAPEX and the absorption of cash by Geoside, we closed the net financial position at EUR 6.5 billion. If we take a look at the CAPEX, the CAPEX shows that all the area has seen an increase, development and repurposing, digitization, and the others. I'm very pleased that digitization is still going, still increasing.
It is about 18% more than last year, but also we have nearly reached over 1,000 new kilometers, out of which, nearly 6,600 Km have been built and put in operation in Greece. As usual, the development and repurposing attracts the majority of the CAPEX. In these, Greek represent over 12% of the overall CAPEX, and there is also a significant development in Sardinia, that is relevant to the area that we are not completely, and in particular, to the acquisition of Janagas and the transformation of the existing net, of the previous network, based on energy, into a natural gas network. But now let's take a look about the result in the net energy consumption, that are extremely impressive.
It is the case in which we have already achieved the target set by 2028. If we look at the Italian network only, the drop in energy consumption was absolutely remarkable, -15%, and even adding the contribution of Greece, the drop is 12%. If we compare such a result with the 2028 objective, we are down by 31%. That is above the target of 27% that we set back in 2020. We are extremely pleased by this result, because it's demonstrated that the action that we put in place on a daily basis to control, to measure the energy consumed, has been extremely effective in bringing down the reduction. The main contribution are coming from the industrial gas consumption.
You see 24 terajoules lower, thanks to all the actions that we implemented in our treating system, but also the city consumption is significant, - 12 terajoules, thanks to the efficiency that we achieve in the management of the building, both in winter and in summer, but even more importantly, daily monitoring of the performance. And electricity consumption were also down, thanks to our water company, and thanks to the fact that with the treating system, we are producing also electricity that we use for our own consumption, self-consumption.
And finally, there is also a small reduction in the consumption of gasoline and natural gas for our fleet, thanks to the improved travel planning, but also thanks to the fact that, thanks to our remote control system, DANA, that has reduced significantly the number of on-field activity by our workforce. Subsequently, of the energy consumption, there is the CO2 emission. Everything that you have seen before about reducing energy consumption will translate into reduction in terms of CO2 emission, but as you know, the majority source of CO2 emission are the gas leaks. Gas leaks decrease by 11%, that is the one that you see in the first column, Gas Leak, with the unchanged global warming potential. Global warming potential has changed the parameter. So what does it mean?
It means that for each of cubic meter of CH4 emitted the corresponding CO2 emitted is higher than before, so they have adjusted the parameter. That's the reason why you see an increase of 7 kiloton of CO2. An increase due to the change of the parameter. Without that the gas leaks was reduced by 14 kiloton. We have been able to achieve this significant result in reducing further the gas leaks, thanks to the network, the number of network inspected, the kilometers of network inspected. We reach 120%, so not only we inspect the overall of the network, but we were able, during 2023, to inspect 20% more.
And so some of the portion of the area that we consider more, let me say, risky, we decided to inspect it 2 x during the year. What is important is that, the reduction in gas leaked per, kilometer surveyed dropped 23% in respect to last year. The remaining, you see, there are a reduction everywhere in, relevant to vehicles and gas consumption, and of course, there is the Greek perimeter that increase the overall, CO2, emission scope one and scope two by, 18, nearly 19, kiloton. In respect of the previous year, we have the full year consolidated in our, in our perimeter, while in 2022, only, four months were consolidated. So if we look at the overall numbers, CO2 emission are increasing by 1.5%, including Greece.
If you look Italy only, the reduction is nearly 7%. But ESG evaluation is not limited to that. We are all, we have also, we want also to present to you some other targets that are relevant to the training hours and the number of women in a role of responsibility. As you can see, we have already achieved, or we are very close to achieve the 2029 objective. If we look at the training hours, the number of hours averaged that we spent for each of the single employee increased from 35 hours per year to 40. Our target is 45, so I'm sure we will be reached earlier than expected. If you look at the overall numbers, we spend nearly 180,000 hours in training.
That is a huge number that you have to keep in mind. And if you look at the other element, the women in responsibility role, we have already reached 29%. This is higher and above the target that we set for 2029. Now, let's take a look at the more detail inside the numbers. So let's start with the revenues as usual. Revenues were up by more than 15% in respect of the previous year, mainly driven by, let's look one by one, RAB and growth, RAB growth and deflator, that are positive, as well as the inflation on net of X factor.
You know that during for 2022, the inflation recognized by the regulator was 3.98%, while the X Factor was 3.53%, so the inflation has been nearly completely offset by the X Factor. Negatively, there are the disposal and the M&A, in particular, EUR 87.2 million are relevant to the disposal of Naples, either in terms of capital gain, in terms of less revenue, that were reported last year in the Q4 of 2022. On top, there are also gas, Gaxa disposal and 2i Rete Gas acquisition. On the positive side, you have the contribution of the Greek activity, which about EUR 120 million in 2023.
And then the additional performance of our ESCo energy efficiency business of EUR 140 million incremental revenues, that are relating mainly to the Superbonus activity. That is the view of the revenues. If you look at the view of the operating expenses, on a like-for-like basis, as I told you, we were able to reduce the cost by EUR 6 million or 1.5%. That is an achievable numbers, considering the level of inflation that we have experienced in 2023. The disposal, the Gaxa Tech disposal and the Naples disposal account for EUR 7 million of less cost. And of course, we have the full 2023 of Enaon, the formerly DEPA Infrastructure that accounts for EUR 34 million.
The number that we have seen before about increasing revenues in the energy efficiency business also is being reflected into an additional cost of EUR 115 million. Let me say that on the energy efficiency, I think that we will talk in a moment with Gianfranco. We have kept the same EBITDA margin of 2022. So if we look, and then I will pass the floor to Gianfranco. If you look at the EBITDA numbers, the EBITDA grown more than 90% in respect of last year. The Italy distribution is negative by EUR 8.3 million, but it's negative because we have, as we said before, we have the disposal of Naples, and Naples represent both in term of capital gain and business activity. Otherwise, the Italy distribution would have been up of about EUR 60 million.
And then we have the contribution of Greece and the contribution of Geoside. So at the end of the day, our the picture that we represent about our EBITDA, the Italy distribution represents 86% of the total, while we, in respect of last year, we are seeing either data increasing and also Geoside increasing the number and the percentage on the overall EBITDA, on the overall EBITDA. I will leave now the floor to Gianfranco.
Thank you, Paolo. We are on slide 12, commenting the EBIT 2023, that reached EUR 681 million, marking an increase of more than 9%, the growth rate more or less in line with the growth rate of the EBITDA. In the period, we saw an increase in EBITDA of the Italian perimeter of about EUR 80 million, as a result of the variance of the revenues and costs already commented by Paolo, whereby the EBIT of the ESCo activity increased of EUR 26 million. On the column of the D&A, excluding Greece, the impact was negative of about EUR 16 million, and this impact is mainly related to the CAPEX that we have deployed in 2023, in addition to the carry-over impact of the CAPEX already executed in the year, in the previous year.
Consider please that in this figure, the disposal of Naples is neutral, as the activity of Naples has been discontinued the last year after the first quarter. EBIT incremental contribution of D&A is around EUR 57 million, also due to the full 12-month consolidation period. Moving now to the following slide about and commenting around the adjusted net profit, after my notice, that reached EUR 440 million, with a growth of 11.1% compared to the previous year. As the main element behind this growth, the net financial expenses were up almost EUR 42 million, mainly due to, first, the impact of the rising interest rate on our floating rate debt. In this respect, the percentage of floating rate debt was approximately 8% at the end of 2023.
On top of that, we had the rollover of the credit lines raised by Enaon by the end of 2022, and the full impact of the EIB loan executed in December 2022 for Geoside. Commenting on the new debt in 2023, we have accounted the new bond issued in June for EUR 500 million at a coupon of 4.125%. Finally, on the opposite direction, our liquidity position, because the market turned back to a positive remuneration on the liquidity, that has partially offset the negative impact that we have seen above. In the net financial expenses, we also accounted for a cost linked to the factoring of the AT receivables related to 2022 and the first quarter of 2023, generated by the bonus gap and other incentives to the benefit of final users.
Looking at the net contribution from associates, this increased by EUR 2.4 million. We have accounted for the contribution of the water asset acquired from Veolia for EUR 1.6 million. Please note that Siciliacque, the only company in which we are the majority stake as of today, is consolidated as equity. We will keep the equity accounting until the shareholder agreements currently in place are modified to get a line-by-line consolidation. Finally, we accounted for 120 million of income taxes, marking a decrease of 32 million versus previous year, due to a lower tax rate of 20%, as we book the other benefit of the Patent Box for EUR 39 million. This is a tax benefit schemes that is linked to the profit coming from certain well-identified IT projects internally developed by the company.
To this, we signed an agreement with the tax authority in Italy in 2023, and this agreement covers all the projects executed until 2023. For 2021, we will have one more year of Patent Box, and then this benefit will elapse and will be replaced by other incentives linked to IT projects. Moving to the following page, we can summarize what we said so far. These are figures adjusted without the one-off special items that I will comment shortly after. I will also remark that the EBITDA marks a growth as well as the EBIT of 9%, which is absolutely in line with the growth rate that we have shown in our strategic plan, on average 9% for seven years period.
Commenting the following page, let me spend some words on the special items that we have booked in 2023. As you can see, there is not, they have no impact on the figures at the level of the EBIT. The explanation of that is that the resolution of the authority, number 737, has recognized the receivable value of the 40 smart meters built before 2016, and installed until 2018. So you see the effect in our revenues as a positive component in the OpEx and in the DNA for the related charges and impairment. Some comments on page sixteen about, around the performance of Geoside.
As expected, with the completion of all the projects within the timeline set by the government, the revenues reached the target of EUR 300 million, of course, mainly thanks to the traction of the Superbonus. These revenues were almost two times the level of last year, and the EBITDA has reached an impressive figure of EUR 54.6 million. Going now to the cash flow on slide 17. Let me say that in line with what we commented last October, to make more to increase the clarity about the representation and in consideration of the different types of our business, we have divided the cash flow of our distribution business from the operational cash flow coming from the ESCO activity.
Cash flow dynamics is core in helping you reconcile our full year net debt with the guidance, that as you will remember, assumed no working capital change for the ESCo business at the end of the year. So nothing about that should surprise you, as we anticipated the topic during the last call for the results at the end of September. While our distribution business remains strongly cash flow generative, covering the majority of the CapEx needs, Geoside has been absorbing cash for an amount of around EUR 250 million in 2023, due to the Superbonus related activity, was completed, as said, in line with the baseline.
More in detail, the distribution assets generated cash flow from operation of around EUR 800 million, despite working capital absorption of EUR 170 million in the period, mainly due to lower volumes distributed on the back of mild weather conditions. On the other side, as I said, Geoside cash generation was negative for around EUR 250 million, but consider that those receivables will be repaid through tax reduction in the four years following their generation, as I described you during the previous quarterly reporting. As already said by Paolo, taking into account the market condition, we have opted not to sell to the banks this Superbonus related receivables. Next June, as a consequence, our cash tax payment will be reduced by approximately EUR 130 million.
Finally, going back to the numbers, Netco has generated a cash outflow of almost EUR 800 million, and all this, coupled with the dividends and other payments of EUR 310 million, and the cash outflow mainly to the remaining activity, the acquisition of the Veolia asset, resulted in a net debt increase of approximately EUR 650 million. How our debt is composed, the... You will see it on, on slide 18. In February 2024, we issued a EUR 650 million bond, ten or five years, that will cover part of the financing needs of next year, this year, and the EUR 300 million bond expiring this month. You can reconcile this with the chart that you see in the, in this page.
We also signed last week a EUR 600 million sustainability-linked revolving credit facility to back up future financing needs for rating purposes. This sums to the bond that we issued last year in June 2022. As a consequence, our liquidity position can be considered adequate. In terms of cost, 2023, it reached 1.4%, mainly as a consequence of the bond of last June, and the bank facility subscribed, reflecting the rise in the short-term market rate. Consolidated net debt was EUR 6.6 billion, including IFRS 16 impact of approximately EUR 80 million. As far as the structure is concerned, our debt composition remains broadly unchanged, 8% floating and 92% fixed. I leave now the floor back to Paolo.
Thank you. Thank you, Gianfranco. I would like just to, let me say, close this presentation, with the outcome of the board of directors. We have Board of directors approved the proposal that will be submitted to the next general assembly of a dividend of EUR 3.52 per share. That is a significant increase in respect of the last year, is more than 11%, and is significantly above. the DPS policy that you remember was confirmed last year with the strategic plan, and the floor was set at 4%. So another time, has been the same for the last, since 2017, let me say. We were able to deliver a value for our shareholder higher than the floor that we have submitted.
Let me recall also that in June, we will present our strategic plan, and as always, during the strategic plan, we will give you the guidance for 2024. So please don't ask me the guidance of 2024 today, because I will not be able to respond to you. I will give the floor back to Anna Maria. Please, Anna Maria.
Yes. Thank you. Thank you, operator. We are ready now for the Q&A session.
Thank you. This is the teleconference operator. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone with a question, may press star and one at this time. The first question is from John Campbell of Bank of America.
Hi, good afternoon. Thanks for taking my questions. The first one I wanted to start on is kind of a typical update on your views for allowed returns in Italy. Twenty twenty-five should see somewhat of a reset. Do you have a sort of a mark-to-market view? And then the second part to that question is, would 2027 ? Because theoretically, you'd like to have the, the allowed return locked in. So that was my first question. I'll let you answer that, and then I've got another one on, on taxes.
Yeah, thank you, John. You can tell us all the questions, please.
Sure thing. Yeah, sure. So, I'm trying to kind of perfectly understand your point about the Patent Box related to your P&L taxes. So it seems to have been some benefit for full year 2023. My impression, if I understood Mr. Amoroso properly, was that in 2024, there should also be some P&L benefit. I know you're not gonna release guidance, but is that correct? Just as a statement. And could you perhaps give some view on the benefit to cash tax, as I heard EUR 130 million, how long can we model that for going forward? Presumably, that might taper off in years to come. So those are all my questions. Thank you.
Okay. On the first one, I'm going to respond, and then I will leave to Gianfranco to answer to you about Patent Box and the tax benefit. Regarding 2025, let me say that the work that we expect, based on the number that we have and the forward curve that we have, is going to be in line more or less with the work that we have in 2024. So we do not expect significant different, as of today, based on the number that we have today. Regarding what is going to happen in 2026 and 2027, I... That is really my guess.
I would guess that the regulator will maintain this trigger mechanism, considering that up to now this mechanism has demonstrated to be able, even with a time lag, but that is normal in our regulation, to capture the different, let me say, phenomena that we have experienced. So I'm talking about inflation, I'm talking about interest rate. Inflation is on the other side, of course, interest rate, the country risk premium and all, all the other stuff, based on a forward-looking, not on the backward-looking. Let me say, the only element that is the fact that we recognize we have some time lag delay, but that is normal.
So if I have to guess, is that this trigger mechanism that has been in place for two years only, probably will continue to be applied also after 2026, but it is only my guess.
Going to your question about the, around the Patent Box. Yes, you are right. There is still one year to be covered, which is 2021. We are working now on the relevant documentation, and, hopefully, we will give you some more information in June, or let's say, later on in this year. But for sure, there will be something also in 2024. As far as the cash tax benefit that you mentioned, you can make a projection for 2024 going forward, 2025 and 2026, of an amount of around EUR 130 million, which is very straightforward. It's the wallet in terms of receivables that we have at the end of 2023.
In addition to that, the receivable value of the wallet of tax receivable in 2022.
Thank you both. That's all very clear. Thank you.
The next question is from Alessandro Di Vito, Mediobanca.
Hi, all. Thanks for taking my questions. I have three. The first one is related to the evolution of working capital. So I wanted to understand, what's your assumption on the reabsorption of the ESCO-related net working capital for the following years?
The second question is related to gas tenders, more regulatory related, gas tenders. So I wanted to understand what's your view on this matter, and if you believe that maybe this would be sufficient to speed up the delays in the gas distribution tenders? And the last one is on the Greek business. I wanted to have some color on, maybe have an operational update on the evolution of the Greek business, and maybe the next steps that you plan to implement. Thank you.
Yeah, maybe I will, also because your question is partially linked to the answer that I gave to the previous one. As explained, the amount of working capital will be, let's say, converted into cash, according to the profile that the law provides for this kind of receivable. So basically, you can consider a rate of cash generated by this working capital, around EUR 130 million per year, in this year and the following two years.
So in other terms, of course, considering that the Superbonus is complete, has been completed by the end of this year, there will be no more increase in working capital. But as Gianfranco said, there will be a year after year, if we don't decide to sell these receivables to the banks, there will be EUR 130 million every, let's say, May, June, when we pay the taxes that will become cash. Regarding the other two questions, the first one, I mean, we know and we have looked very positive about the consultation set by the regulator in order to simplify the tender process, especially from their side.
Because the consultation was set in order to simplify all the responsibility or the activities to be performed by ARERA, in order to make the tenders the process of the tenders smoothly and quicker. I think that, and that is my point of view, that we will not see a significant increase in term of number of tenders to become. We still talking about 4 to 5 to 6 tender per year is maximum. So we don't ... I mean, everything that we like to make the process simple, and then, and then, it will like to have maybe some few tenders in addition to come.
But of course, you know, this process is complex, as we have already explained several times, and it relies on the, let me say, the goodwill of the local municipality to move it forward. Unfortunately, we have not seen over several years several modification of the current process. We have not seen a significant improvement in term of speed of producing these tenders. The other element that has to be considered is that the MASE, the ministry that is taking care of energy, that is taking care of this tender, is currently changing the parameters under which the tenders are evaluated.
And that, for us, is a good news because, of course, it focuses mainly on new technology, innovation, and digitalization. It should be approved by the, by the Ministry of Energy and by the Ministry of Regional Affairs, and then it will be, it will become law. So you will see new criteria to assign and to evaluate the different tenders. Last, on the Greek business, well, as we have already anticipated, during the presentation of the new branding in Greece, we are very pleased about the process of the reorganization from one side of the companies. As you know, there is only one DSO. We have been pleased by the fact that recently the regulator, the Greek regulator, has approved the new tariffs with the new WACC.
That will last until 2026, so we are fully covered for 2024, 2025, and 2026. And we are pleased also with our investment that are growing. If you look at 2023, the overall investment has been up in respect of 2021. That was the last year of full management by the previous shareholder of 78%. So operations are going well. The investment will even grow this year. We will mark a significant growth in 2024. So, as of today, we are doing better than what, than our acquisition plan in term of operation.
Very clear. Thank you.
Next question, please.
The next question is from Bartek Kubicki of Société Générale.
Hello, and good afternoon. Maybe three, three things from my side. I would like to elaborate a little bit more on CAPEX, and if you said operationally in Greece, you are doing better in 2023 versus your expectations.
But actually, if we look at the CapEx, if you can maybe mention the key sort of challenges you are seeing versus your original expectations in Greece. Secondly, perhaps if you can give us a little bit of the outlook on the non-regulated activities in 2024, following the expiration of the Superbonus. And lastly, on page 29 of your press release, where you mentioned different resolutions, in one of those, you are talking about the 6.5% allowed WACC for 2024, and there is a sentence saying that you have appealed against this resolution. So I wonder what is the basis for the appeal, and why you are not apparently satisfied with the 6.5% allowed WACC for 2024? Thank you.
Okay, I'm talking about the first question, CapEx in Greece. As I told you, 2023, we have increased our CapEx plan by 78% in respect of 2021. So that number show the different speed at which we are moving. Are we are fully satisfied? No, in a sense that we want, based on our plan, that is about EUR 900 million, that was our last, our last strategic plan, to be deployed in Greece. We want to even increase this number, so we expect by 2024 to be in the range of EUR 180 million of investment in Greece. The difficulties is always when you ramp the investment, is that you have the...
to have the full organization, that starts from the engineering, moves to procurement, and then to construction, to be fully aligned in order to achieve those results. 2023 has demonstrated that we are able to do that. We need to speed up even at higher speed, the CapEx. On 2024 ESCO, maybe Gianfranco can respond. I can tell you that we will see a significant drop in revenues, because of the Superbonus, but we are working on trying to give a different direction about the energy efficiency. Please.
Yeah. Basically, yes, thanks. The point for us is to, for the company, is to rebuild, let us say, a backlog of activity, after being deeply involved in the completion activity of all the works, that were to be completed within a date around the end of 2023. So the strategy of the company will be now more directed towards the so-called value-added services, and also the type of clients will change, moving, shifting to, let's say, large corporate clients, and not only the private individuals, as was the case for the Superbonus activity. So I can confirm there will be a decline, as expected, and also as projected in our strategic plan. Notwithstanding that, we will maintain our, let's say, profitability, choosing carefully all the business opportunities, and also on the profitability of the activity side.
Regarding the last question that you raised, I think, the synthetic language that we have used was not clear. We just read it that, and of course, your interpretation may be correct, but it's not. But not because of you, but because the language was not set properly. On the 6.5, we are okay, because it's just a matter of calculation. So we cannot, we have not appeal against the 6.5. The appeal has been done on some minor issues that were inside the resolution of the ARERA, so it's not relevant to the WACC.
Okay, thank you.
The next question is from Stefano Gamberini of Equita.
Good afternoon, everybody, and thanks for taking my questions. The first, just, coming back to the Superbonus impact on net working capital. Do I understand correctly that the net working capital is the sum of these three installments, we can say, of savings in the payment of taxes in the region of $120 million per year for the next three years? Am I right or not? The second, regarding the tenders that you expect this year, are there some tenders that could arrive shortly in 2024, or at the end of the day, the situation is always the same, with continuous postponement? Then I have two curiosity.
The first, regarding the decision in Germany to introduce funded depreciation in order to depreciate the gas distribution by 2024-2045. I don't know if it is something on the table also in Italy or never discussed by the regulator. And very lastly, regarding the press release from F2i, where they declared that 2i Rete Gas is starting the process for listing. So this means that probably the fund will exit from this company. Could you just remind us when there were some rumors in the past of possible merger between Italgas and 2i Rete Gas, what were the oppositions from the antitrust, and if you think that these oppositions could still be actual? Many thanks.
Yeah, Berini, I think that we need to discuss about the numbers, because you only say three questions, and you-
Four.
Four. I don't know why.
Why is it that a clarification? One clarification, the first.
First one, I will give you, Gianfranco. First of all, it's EUR 130 million.
Yeah.
Not 1, 2, 0. Okay?
So that's right. You are right. You can make this calculation for these three years. Lastly, there will be a residual in 2027, but the methodology is correct.
So it's EUR 130 million by every years, 2024, 2025, 2026, and there is a residual in 2027. That is, how much is, is-
Around EUR 90 million.
EUR 890 million in 2027, to close the Superbonus. On the tender side, what we expect this year, we expect there will be around five to six new tenders, and, we expect, a couple of awards on the current tenders. So that is the range. So if you compare with 2023, well, we have the names, but, considering that some will be eventually delayed, it may happen. So that's the reason why we, we say this number. In this year, in 2024, it's slightly higher than 2023. So, we are moving a little bit, ahead of what we expected last year. On Germany, the question that you raised is becoming always difficult, in a sense that we don't know which is the status of these grids.
So I don't know why they are talking about accelerating the depreciation. So honestly, there are no discussions at all in Italy on that subject. So honestly, I cannot comment. I don't know which is the status in terms of physical status of those assets. Last question, it's really. I'm very happy that 2i Rete Gas will be quoted at the stock exchange, because there will be another gas ESCo quoted at the stock exchange. Regarding about the past discussion, those discussions were before I arrived in Italgas.
We are talking about something probably in 2015, something like that, because I arrived in mid-2016, and those discussions were not on the table anymore. So I cannot comment on merger opportunities that were back nearly ten years ago, and I don't know why it didn't end up with a positive result.
Thank you.
The next question, please.
The next question is from Davide Candela, Intesa Sanpaolo.
Hi, good afternoon, and thank you for taking my questions. I have three. First one is a clarification on the slide 17. I'm looking at the negative working capital aspect on the distribution activities. I was wondering if it is just related to the consolidation of the Greek assets, or there is something more inside those numbers? The second one is on M&A. I'm aware that you just closed an operation in Italy with regard to the water, but it's more broad, also involving gas distribution, also due to the fact that the e-gas and the processes are still lagging. And so the question is, if you are looking at something, if there are dossiers for both in gas distribution and water on the table.
The third one is, I was wondering if you can share your view about gas consumption in Italy in 2023. This declined again, and also due to a bit of slowdown of industrial activities. Looking at maybe a soft landing in 2024, I was wondering if you think that demand could pick up in this year or in the next year, and how you see the balances in terms of volumes? Thank you.
Your first question about the net working capital absorption in the, including the efficiency, the energy efficiency, this is mainly linked to, let's say, the usual mechanism of the receivables towards these companies, and towards the system, to the Cassa Conguaglio , and it's mainly linked to, say, a lower level of consumption, as I explained, due to milder weather conditions during the year.
Well, let me say, let me add to this point. If we look at the numbers that to the market that we serve, the reduction has been down by nearly 8%, generally speaking, if you remember, 2023 has been in the first, let me say, first four months of the year, the consumption has been produced, thanks to the mild weather, that is true by Gianfranco, but also to the extraordinary action taken by the government at the time to reduce the consumption. Remember that the number of hours per day allowed for heating system was reduced. The temperature was reduced by one Celsius, and there was anticipated the closing of heating system at the end of March.
So all these measures, if you remember, we discussed that during the different quarters, contributed by about two-thirds of the reduction in the, in consumption, also boosted by the price. At that time, the gas was very high, but it is not true anymore. So 2023 has been affected by the first, let me say, four months of 2023, in terms of reduction of volume. Regarding our, so our, let me say, customer base, if you want, the reduction has been overall during the year, -8%. Regarding M&A, I forgot, I didn't take notes.
Sorry, was just a broad view-
Yeah.
About... Okay.
Please, please.
Okay.
Yeah.
A broad view about. Oh, sorry, sorry. Please.
No, no, go on, go on. If you do it, because I didn't take note about that. I remember it was your name, but I didn't take note about what you were asking, please. If you can repeat the question.
Okay, thanks. Okay, thanks. So was just a view about the M&A market in gas distribution and water in Italy, if you are looking at something, there is something on the table, and if the market is quite dynamic, also, especially looking at the gas distribution, that tenders are still lagging, and so if there is something that you can consolidate more. Thank you.
Well, you know, as we told you, we are looking, we are very, let me say, very disciplined in the M&A that we are doing. So any opportunity that we take a look, we take a look at the opportunity in term, which is finally the price, in a sense that we If there is a big difference between the, let me say, the owner would like to sell it there, we are not available to pay that. So we are very selective in that. Based on such a selection, we are looking around. We are always open to discuss opportunity. As of today, we don't have anything, real, that we are discussing in term of gas distribution.
On the gas consumption, that is your last question. I have already responded to you when we were talking about the working capital negative that you mentioned, and with the answer that Gianfranco gave to you. If you want to have more details or other stuff about gas consumption, please ask me.
Well, it's okay. Thank you.
The next question is from Alberto De Antonio, BNP Paribas.
Hello. Thank you so much for taking my questions. I have two. The first one is related to the water business. I wanted to know what's your expectations in terms of operational performance for the fiscal year 2024, and also, if you could give us some light in terms of financial performance. The second question will be relating to cost of debt. It has increased substantially during the fiscal year 2023. I wanted to know what's your view in the coming years, and if you can give us some guidance. Thank you.
Regarding the first question on the water, let me say that what we are doing right now, and we just started, as you know, we closed the acquisition of Siciliacque and Acqualatina, just end of October last year. So there are very few months that we are working, and we are working mainly focused on two things. The first one is, because both of the company receiving funds from the recovery and resilience from PNRR, I'm doing quite quicker resilience fund, we are supporting them in order to deploy this investment in time, because you, as you know, the plan should end by June 2026. So we are supporting them on the execution side.
On the other side, we are supporting them in implementing a digital transformation of the network and the digital application relevant to this transformation. So we are working on a daily basis with them, with the management of the two company, and we are supporting them in all the IT area, in the asset area, in term of transforming them with the object to significantly reduce the water leakages. Regarding the numbers, starting from the first quarter of 2024, we will present to you the full 100% result of the three companies together.
A nd of course, which is our pro forma based on the percentage that we own in all the three companies.
For the cost of debt and the evolution during 2024, I consider that we have already done one bond in February that give you the idea that refinancing the existing maturities cost more, of course, than in the past, because we issued the bond around 3%, and we have to repay the outstanding of a bond that was below 1%. This for the fixed rate. For the floating rate, we will follow as the market, we will expect a decrease potentially in the second half. And so compared to the rate that we had in 2023, we have some recovery in the second part of the year.
So, and on top of that, we in 2024, we will benefit from the trigger of the WACC with the 90 basis point more than in 2023. So I would expect some, let's say, trajectory increasing, but not of the same huge amount of 2023. Of course, we- I will be more precise in the strategic plan giving you some guidance for the year.
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