Elements of risk and uncertainty

This paragraph illustrates the main elements of uncertainty featured in the ordinary management of Snam’s operations. The risks identified are broken down into financial and non-financial risks. The latter are classified in the following categories:

• Strategic
• Legal and non-compliance
• Operating

Moreover, the disclosure below takes into account the impacts of Covid-19, set out in a specific paragraph of this section. Financial risks are illustrated in Note 26, “Financial risk management”, of the Notes to the consolidated financial statements.

Risks and uncertainties arising from the Covid-19 emergency

The evolution of the pandemic linked to the spread of SARS-CoV-19, if not adequately contained, may continue to have significant health, social and economic consequences worldwide.

Even with the lockdown measures in place, considerable risks remain, both from an economic and financial point of view and for people’s health. In addition to the worsening global macroeconomic scenario and the risk of deterioration in the credit profile of a considerable number of countries (including Italy), the risk of slowdowns in many commercial activities persists due to negative impacts on supply chains, commodity prices, flows and capital demand.

There is also significant uncertainty in financial markets both nationally and internationally with potential impacts on the business environment.

Snam, which has taken protective measures since February 2020, has taken all the necessary initiatives to protect the safety of its people, both in compliance with the lock-down measures and by taking further precautions. In particular, the company has set up an inter-functional team to manage the situation, in constant contact with the Civil Protection, with two fundamental objectives: the health and safety of its people and the continuity of the essential energy security service for the country.

As early as February 2020, Snam already ordered, as a precautionary measure, smart-working for workers whose activities did not require physical presence in the workplace, without prejudice to the necessary supervision of operational activities in the area and those relating to the dispatching of San Donato Milanese, the heart of Snam’s infrastructure.

With the gradual resumption of Snam’s activities, in line with the indications and provisions of the competent authorities, criteria and measures aimed at protecting the health and safety of workers in the workplace have been defined as a priority. These criteria and measures are updated according to the indications that are progressively communicated by the Institutions and Health Authorities, as well as according to the results of the monitoring of the measures adopted and the health status of the workers carried out by the competent figures. Starting from April, on-site work gradually resumed, with all the appropriate precautionary measures being adopted, and almost all the work fronts were gradually reinstated.

After a slow-down in the summer months, the infection curve began to rise again in various countries, particularly in Europe.

Therefore, at present the company is not able to reliably calculate the impact of Covid-19 on the targets for 2021 and future years.

However, based on the information available today, the company expects a limited impact relative to its targets in 2021. Any additional further impacts on economic/financial performance and on the Group’s equity situation, as well as on business development plans, will be evaluated in the light of the evolution and duration of the pandemic.

The same considerations apply in respect of any potential effects on the development initiatives and suppliers or customers deriving from the slow-down to business and the current macroeconomic context consequent to the international reach of the pandemic, that cannot yet be assessed. The same for the assets held by the Snam Group outside Italy, in particular in France, Austria, Greece, Albania and the United Kingdom.