Reclassified statement of financial position

The reclassified statement of financial position combines the assets and liabilities of the condensed statement based on how the business operates, conventionally split into the three basic functions: investment, operations and financing.

Management believes that this format presents useful information for investors as it allows identification of the sources of financing (equity and third-party funds) and the investment of financial resources in fixed and working capital.

The reclassified statement of financial position format is used by management to calculate the key leverage and profitability ratios.

Fixed capital (11,056 million euros) decreased by 552 million euros compared with 31 December 2019 mainly as a result of the reduction in financial assets (-767 million euros). This effect was partially offset by the increase in equity investments (216 million euros), mainly due to the subscription of the increase in the share capital in favour of Galaxy Pipeline Assets HoldCo Limited (221 million euros), following the purchase of ADNOC Gas Pipeline Assets LLC.

Equity investments

This item amounts of 6,761 million euros and is composed of equity investments in the following companies:

Financial assets

Financial assets stand at 4,268 million euros and relate to: (i) receivables from long-term loans, including the relative current portions, granted mainly to the subsidiaries Snam Rete Gas (3,135 million euros) and Stogit (676 million euros), (ii) the loan granted to the company under joint control OLT (303 million euros) and (iii) fair value measurement through OCI of the minority interests in the company Terminale GNL Adriatico S.r.l. and ITM Power Plc (112 million euros overall).

The reduction of 781 million euros compared with 31 December 2019 was mainly due to the closing and the simultaneous repayment of existing loans to Snam Rete Gas S.p.A. and Stogit S.p.A. (-1,148 million euros overall), partially offset by the taking over of the residual share of a shareholders’ loan from Iren S.p.A. in favour of OLT, against the acquisition of the 49.07% stake in the share capital of the company completed on 26 February 2020 (332 million euros; 303 million euros net of subsequent reimbursements).

Net working capital (-320 million euros) decreased by 14 million euros compared with 31 December 2019 mainly as a result of the reduction in liabilities for derivatives (+24 million euros) and the reduction in tax debts (+13 million euros), partly offset by changes in provisions for risks and charges (-17 million euros).

Net financial debt at 31 December 2020 was 6,173 million euros, a reduction of 701 million euros compared with 31 December 2019.

Financial and bond debts (15,972 million euros) are denominated in euros and relate mainly to bond loans (8,140 million euros; 51%) and bank loans (5,260 million euros, 33%, of which 1,620 million euros was provided by the European Investment Bank – EIB).

Long-term financial debt (10,309 million euros) represented around 65% of gross financial debt (around 72% at 31 December 2019).

The breakdown of debt by type of interest rate at 31 December 2020 is as follows:

The reduction in bond loans (908 million euros) compared to 31 December 2019, mainly relates to: (i) the repayment of a fixed rate bond maturing on 29 January 2020, for a nominal amount of 350 million euros; (ii) the repayment of a fixed rate bond loan maturing on 13 February 2020, of a nominal amount of 526 million euros; (iii) the repayment of a fixed rate bond maturing 25 October 2020, of a nominal amount of 500 million euros; (iv) the repurchase on the market of fixed-rate bonds for a total nominal value of 629 million euros with an average coupon of 0.62% and a residual duration of approximately 2.80 years. The total disbursement resulting from the buy back of securities as part of the Liability Management transaction, concluded in December 2020 stood at 651 million euros⁴², including the fees paid to intermediaries and accrued interest. These variations were partially offset by the issuing: (i) a Transition Bond, for a nominal amount of 500 million euros, at a fixed rate maturing on 17 June 2030; (ii) a Transition Bond, for a nominal amount of 600 million euros, at a fixed rate maturing on 7 December 2028.

The increase in bank loans (1,569 million euros) relates mainly to higher net utilisations of uncommitted credit lines (1,047 million euros) and the subscription of new Term Loans for an incremental nominal value of 590 million euros.

The Euro Commercial Papers (2,503 million euros) involve unsecured short-term securities issued on the money market and placed with institutional investors and recorded an increase of 502 million euros.

Short-term financial receivables (6,808 million euros) showed an increase of 1,688 million euros compared with 31 December 2019. The increase is essentially attributable to the greater net use of current account balances of the subsidiaries Snam Rete Gas and Stogit (1,540 million euros in total).

Cash and cash equivalents, standing at 2,991 million euros (2,805 million euros as at 31 December 2019) refer to current accounts and on-call bank deposits.

At 31 December 2020, Snam had unused committed long-term credit lines worth 3.2 billion euros.