Review of the year


In 2010 Snam Rete Gas generated a net profit of €1,106 million, up 51.1% on 2009. The increase was essentially due to the contribution of natural gas distribution and storage segments, which, for the entire year, benefited from the economic impact of consolidating Italgas and Stogit, against a six-month contribution reported in the previous year from 30 June 2009, the date on which the acquisition of the two companies was completed, and the significant improvement in the performance of the transportation business segment (+21.7%). Net profit related to the corresponding combined amount for the previous year, which was obtained by including Italgas and Stogit for all of 2009 in the scope of consolidation, was up 19.3%.

Cash flow (net cash flow from operating activities) totalled €1.8 billion making it possible to fully finance the significant capital expenditures for the period and to create a free cash flow of about €400 million. At 31 December 2010 leverage stood at 63.6%, unchanged from 31 December 2009.


Net profit and cash generation made it possible to distribute a dividend, subject to the approval of the Shareholders’ Meeting, of €0.23 per share, of which €0.09 per share was distributed in October 2010 as an interim payment, and the balance of €0.14 per share will be made payable as of 26 May 2011 (ex-dividend date of 23 May 2011). The payout was 70.3% (92.2%2 in 2009).

Natural gas transportation

A total of 83.32 billion cubic metres of gas was injected into the transportation network, an increase of 6.42 billion cubic metres (+8.3%) on 2009. The increase was mainly due to a recovery in natural gas demand in Italy (+6.4% compared with 2009) in all sectors, especially the residential and tertiary (+7.1%), industrial (+7%) and thermoelectric (+4.4%) sectors.

Regasification of liquefied natural gas (LNG)

A total of 1.98 billion cubic metres of LNG was regasified in 2010, an increase of 0.66 billion cubic metres, or 50%, compared with 2009. The increase was due to more plant activity as a result of a recovery in natural gas demand in Italy.

Natural gas storage

In 2010, 15.59 billion cubic metres of natural gas were moved through the group’s storage system, a decrease of 0.93 billion cubic metres from 2009 (-5.6%). This decrease was attributable essentially to the large withdrawals of gas from storage as a result of the Russian supply crisis in January 2009, which was partly offset by higher volumes injected to refill the space for shippers.

The available storage capacity at 31 December 2010 was around 9.2 billion cubic metres, an increase of 3.4% compared with the previous year.

Natural gas distribution

At 31 December 2010, there were 5.848 million active meters at end-customer gas redelivery points, an increase of 1.3% on 31 December 2009.


Investments amounted to €1,540 million (€1,254 million in 2009) and largely concerned upgrading infrastructure for the transportation, regasification, storage and distribution of natural gas.

Key figures

To improve the economic and financial review, in addition to conventional IAS/IFRS indicators and financial statements, the directors’ report also contains reclassified financial statements and several alternative performance indicators such as EBITDA, EBIT and net financial debt. The following tables, their explanatory notes and the reclassified financial statements illustrate these amounts; see the glossary for a definition of the terms used, where these are not specified.

Main income statement data (a)(€ million)200820092010
Core business revenue (b) 1,902 2,438 3,475
Core business revenue net of IFRIC 12 1,902 2,438 3,126
Operating costs (b) 399 581 968
Operating costs net of IFRIC 12 399 581 619
EBITDA 1,511 1,887 2,540
EBIT 1,022 1,274 1,862
Net profit (c) 530 732 1,106

(a) The 2009 income statement data include the impact of consolidating Italgas and Stogit from 30 June 2009, the date the acquisition transaction was completed. In order to provide a meaningful comparison between the 2010 and 2009 results, the section “Financial review” in this report also contains, in addition to comments on the main items, the consolidated combined income statement obtained by including Italgas and Stogit in the scope of consolidation for the entire year 2009..
(b) The items for 2010 include the effects of applying international accounting standard IFRIC 12, “Service Concession Arrangements”. Applying this interpretation had no effect on the group’s results, except for the equal recognition of revenue and costs relating to building and upgrading distribution infrastructures (€349 million). For more information on the accounting effects of applying this interpretation, see the section on “Basis of Presentation and Accounting Consolidation Principles” in the notes to the consolidated financial statements.
(c) Net profit is attributable to Snam Rete Gas.

Main balance sheet data(€ million)200820092010
Investments (a) 1,044 1,254 1,540
Net invested capital at 31 December 9,809 15,652 16,257
Shareholders’ equity including minority interests at 31 December 2010 3,573 5,703 5,916
Group shareholders’ equity at 31 December 3,573 5,702 5,915
Net financial debt at 31 December 6,236 9,949 10,341
Free Cash Flow (b) 32 (4,489) 382

(a) Investments for 2009 in the natural gas distribution and storage segments, which totalled €321 million, related to the period 1 July 2009 – 31 December 2009.
(b) Free cash flow for 2009 reflects the disbursement for the acquisition of Italgas and Stogit.

Main share data 200820092010
Number of shares of share capital (millions) 1,956.4 3,570.8 3,570.8
Number of shares outstanding on 31 December (millions) 1,761.0 3,375.9 3,376.6
Average number of shares outstanding during the year (millions) 1,761.0 2,579.3 3,376.2
Year-end official share price (a) (€) 3.26 3.46 3.73
Average official share price for the year (a) (€) 3.45 3.22 3.59
Market capitalisation (b) (€ million) 7,009 11,681 12,595
Dividend per share (€ per share) 0.23 0.20 0.23
Dividends for applicable period (c) (€ million) 405 675 777
Dividends paid during the period (€ million) 387 450 776

(a) As required by the “Principles and Conventions” of Borsa Italiana, the official stock prices of Snam Rete Gas in 2008 were adjusted for the capital increase carried out to finance the acquisition of Italgas and Stogit completed on 30 June 2009.
(b) The product of the number of shares outstanding (exact number) multiplied by the year-end official stock price. The value for 2008 was calculated on the basis of the historical price (€3.98 per share) and does not reflect the price adjustment following the increase in share capital.
(c) The amount for 2010, representing the balance, was estimated on the basis of the number of shares outstanding on 31 December 2010.

Key profit and financial indicators 200820092010
EBIT per share (a) (b) (€) 0.58 0.49 0.55
Basic earnings per share (a) (b) (€) 0.30 0.28 0.33
Group shareholders’ equity per share (b) (€) 2.03 2.21 1.75
Leverage (net financial debt/net invested capital) % 63.6 63.6 63.6
Pay-out (Dividends for applicable period/Net profit) % 76.4 92.2 70.3
ROE (c) % 15.0 15.8 19.0
ROI (d) % 10.6 10.0 11.7
Dividend yield (Applicable dividend/Year-end official share price) (%) (e) % 5.8 5.8 6.2
Price/Book value (Average official price per share/Group shareholders’ equity per share) (e) (€) 2.04 1.46 2.05

(a) Profit in the natural gas distribution and storage segments for 2009 was for the period from 1 July 2009 to 31 December 2009.
(b) Calculated considering the average number of shares outstanding during the year.
(c) Return on equity (ROE) was calculated as the ratio of net profit to the average of beginning and ending shareholders’ equity for the period.
(d) Return on investment (ROI) was calculated as the ratio of EBIT to the average of beginning and ending net invested capital for the period.
(e) The 2008 stock prices are historical figures and thus do not reflect the price adjustment made following the share capital increase.

Key operating figures (a) 200820092010ChangeChange %
Natural gas transportation (b)
Natural gas injected in the gas transportation network (billions of cubic metres) 85.64 76.90 83.32 6.42 8.3
Transportation network (kilometres in use) 31,474 31,531 31,680 149 0.5
Liquefied Natural Gas (LNG) regasification (b)
LNG regasification (billions of cubic metres) 1.52 1.32 1.98 0.66 50.0
Natural gas storage (b)
Available storage capacity (billions of cubic metres) (c) 8.9 9.2 0.3 3.4
Natural gas moved through the storage system (billions of cubic metres) 16.52 15.59 (0.93) (5.6)
Natural gas distribution
Active meters (millions) 5.771 5.848 0.077 1.3
Distribution concessions (number) 1,441 1,448 7 0.5
Distribution network (kilometres) 49,973 50,307 334 0.7
Employees in service at year end (number) (d) 2,345 6,187 6,104 (83) (1.3)
by business segments:
- Transportation 2,252 2,254 2,636 382 16.9
- Regasification 93 87 70 (17) (19.5)
- Storage 301 279 (22) (7.3)
- Distribution 3,545 3,119 (426) (12.0)

(a) The changes indicated in the table, as well as those below in this report, must be considered changes from financial year 2009 to 2010. Percentage changes are calculated in relation to the data indicated in the related tables.
(b) Gas volumes are expressed in standard cubic metres (SCM) with an average higher heating value (HHV) of 38.1 and 39.4 MJ/SCM, respectively for the businesses of natural gas transportation, regasification and storage.
(c) Working gas capacity for modulation, mining and balancing services.
(d) Fully consolidated companies.

Net profit (millions of euros): 2008 - €530m, 2009 - €732m and 2010 - €1,106m.

EBIT (millions of euros): 2008 - €1,022m, 2009 - €1,274m and 2010 - €1,862m.

Leverage (%): 31 December 2008 - 63.6%, 31 December 2009 - 63.6% and 31 December 2010 - 63.6%.

Dividend yield (%): 31 December 2008 - 5.8%, 31 December 2009 - 5.8% and 31 December 2010 - 6.2%.