Italgas S.p.A. (IG) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas Full Year 2021 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Anna Maria Scaglia, Head of IR. Please go ahead, madam.

Hi. Good afternoon, ladies and gentlemen, and thank you for joining us. Today, we will walk you to Italgas full year 2021 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 leave now the floor to our CEO, Mr. Paolo Gallo.

Good afternoon, everybody. I'm happy to start the presentation with the key highlights of our 2021 results. As you have seen in our numbers that were presented this morning, the operating figure we reported for the 2021 were above the guidance that we provided to you last June. And I think what is most remarkable is that for the first time in our recent history, we exceed EUR 1 billion on EBITDA with a grow if we compare to 2016 of almost 50%. Also in terms of CapEx, we reached nearly EUR 900 million of investment, mainly focused on the network upgrade and digitization. We are going also to present to you our sustainability results. Sustainability focus is -- remain very strong. And in fact, the results that we have achieved our 2027 objectives were significant as well as the recognition that we received during the past year. This has been -- and it is a journey that never stop that is involved in today the whole organization. Regarding some news about DEPA. DEPA, we expect to close DEPA in the next coming weeks. And this will mark the start of an incredible and challenging journey in Greece. And finally, I would like to recall you the acquisition we recently made. It's a minority stake in Picarro, that if it's not very -- it's not a large acquisition, of course. But for us, it's an extremely important acquisition from a technological point of view, from an innovation point of view. Based on the results we achieved in 2021, yesterday, the Board of Directors is going to propose as proposed to the next general assembly that will take place on April 26 to distribute a dividend of EUR 0.295 per share. That represents an increase of 6.5% in respect of last year dividend per share. This shows that we are able, again, another time to record profit and therefore, dividends that are above the floor that we have established in our dividend policy being 5%. Let's move to the following, just to give you an overview of our results, despite the continuing effect of the delibera 570 that has -- represent for us a reduction in revenues of EUR 8 million relevant to the X factor. We reported a strong growth in 2021 that exceed our targets. And that is mainly driven by the upgrowth coming from the investment we made in 2020, higher revenues from the service to customers and a very strong contribution from our energy efficiency company. And thanks to the strict cost control and cost reduction, we were able also to pass the EUR 1 billion in EBITDA. Those results have been extremely remarkable, considering that we have booked very little tariff adjustment in 2021 compared to what we have booked last year in 2020. At the end of the day, the profit has grown by 6% in respect to the profit of last year, net income of last year restated because, as you know, we made a change in the booking of certain costs, and therefore, we restated the 2020 profit and loss. Otherwise, the increase would have been 6.5% similar to the increase of the dividend. But if we look at the CapEx. So moving into the next slide, Slide #4, CapEx were again, we recorded the highest number close to EUR 900 million, 11.5% higher than last year, mainly led by digital transformation and network repurposing efforts. Considering the operating cash, we have always said that the operating cash is around 10% of our RAB value, and we confirm that we reach EUR 832 million in the operating cash with an improvement in respect of the previous year of nearly EUR 100 million. Net debt increased by EUR 250 million to EUR 4.9 billion. And excluding the impact of the IFRS 16 for EUR 70 million. But later, Gianfranco will explain you more in detail. If we consider that the impact in our net debt, we reached EUR 4.98 billion, in line with the guidance given in November when we said that the net debt would have been below EUR 5 billion at the end of the year. If we look at the CapEx that is explained in detail in Page 5. As the previous quarter of 2021, you can see a change in the mix in our CapEx expenditure. We see a decrease in Sardinia because we are toward the end of the investment in Sardinia, we have reached 900 kilometers of native digital network, getting close to our targets of 1,100 kilometers. We have seen a decrease in the smart meter replacement. Again, we are very close to. We always said that we will completed the replacement of the traditional meter, but we are going closer and closer. The reason being is the latest -- or the -- the -- let me say, the latest traditional meter are the most difficult to replace. They are in the area where it's not reached to. We still have like 180,000 meters traditional still to be replaced. So the overall investment has been decreased. But on the contrary, you see that digitization CapEx has significantly increased in respect of last year, thanks to all digital transformation effort that we put in place on our network. Finally, let me underline that we added more than 700 kilometers of new pipe and we installed between replacement of traditional and replacement of the faulty smart meters, more than 800,000 smart meters. Before getting into the operating numbers, let me touch with 2 pages, the result we have achieved from a sustainability point of view. And the first one that we are going to present it is on Page 6 is the Scope 1 and 2 greenhouse gas emissions. If you remember, our target is to reduce by 30% our CO2 emissions by 2027 in respect of 2020. So we are comparing what we have achieved in 2021. That is 7.3%, mainly driven by the reduction of the fugitive emissions. We see an increase in terms of mission of vehicles. The reason being is that in 2020 due to the lockdown the kilometers of our operating vehicle has been significantly lower. So this year, we recover that situation. That's the reason why you see an increase in terms of emission that is fully aligned with the increase of kilometer travel. So we increased the emission by 12%, but the kilometers traveled were increased by 13%. Let me also underline the fact that thanks to the use of -- that is at 92% of the use of natural gas in fueling our cars, the particular went down by 18%. That is very significant considering the fact that our cars are operating in inside the city. And finally, if you remember, last year, we recorded a number of leakages in percentage to the amount of natural gas delivery that was in the range of 1% -- 0.1%, sorry. And this year, we went down to 0.087% with a reduction of 13% in respect of the previous year. If we look at the same slide that is on Page #7 regarding the net energy consumption. Here, the objective is to reduce by 25% by 2027. We are slightly -- we have slightly increased the consumption in terms of net energy. That is mainly driven by the cars again. As you see, as we said, there is a 12% energy consumption that is the same of the emission growth because of the kilometers traveled. On the other hand, all the other components show a decrease in particularly a better management of the -- of our buildings, thanks to the renovation and upgrade from an energy efficiency point of view of our new buildings. And also from the consumption that we use to -- for the pre-heating system in our network. We are deploying more and more new equipment that is able to -- from a mechanism point of view is able to significantly reduce the amount of gas and energy consumed to pre-heat the gas, thanks to -- let me call it, an artificial intelligence that is built inside the mechanism. So now let's go back to the -- no, I have one more slide about the sustainability that this new one is we introduced just for the year-end that is regarding the people. As you know, in our internal objective, there were objective relevant to the number of women that are present in our total workforce and present in responsibility role. As you can see, a significant increase either in terms of total number, even more significant in responsibility role we have achieved in 2021. I would like also to point it out the significant increase of 48% in terms of number of hours of training that we dedicated to our personnel. A significant part of that has been dedicated to the digital transformation and the digitization of our network. And also on the frequency rate of accident considering not only our personnel, but also our contractor, we have seen a clear reduction from 2020, 2021, thanks to our attention to this extremely important situation. And thanks also to the numbers of training that we have done either to our personnel and to the personnel of our contractors. So now let's move to analyze in more details the results we have achieved in 2021 and we start from the profit and loss. Page #9 shows only the difference between the profit and loss reported and the profit and loss adjusted. There's only one difference that we have already described during the previous quarter that is relevant to the cost of the bond buyback that we have done back in February and the relevant fiscal impact of this transaction. From now on, we will only compare the 2021 adjusted number with the 2020 adjusted and restating number. So if we take a look at the result that is on Page 6 -- Page 10. As I said before, despite the effect of the x factor that is equal to EUR 8 million for the full year 2021, higher revenues are mainly driven by the RAB growth. We will see that the RAB growth has increased by EUR 20 million, the impact on the revenues, of course, client services by nearly EUR 9 million. And then we can always see a significant higher contribution coming from the energy efficiency company, the Seaside of more than EUR 28 million. Overall expenses decreased by EUR 2.3 million in respect of last year. We will comment later on cost. G&A was impacted, of course, by higher RAB and lower depreciation related to meter replacement plan. Gianfranco will explain later. Tax rate is in the range of 27%. Again, Gianfranco will give you more details and more flavor about that. And as we said before, profit increased by 6% in respect to the 2021 restated number, excluding the restated number, net growth would have been 6.5%. If we look at the revenues, and we are on Page 11. The revenues increased in the period of 2.8%. As I already said, you can see the different components. RAB growth and tariff components contributed for nearly EUR 40 million, EUR 28 million, as I said before, driven by the RAB growth. Service to clients EUR 8.5 million and more than EUR 28 million, driven by energy efficiencies by the ESCo. And then, as I mentioned before there is EUR 8 million due to the x factor, negative impact. As I said at the beginning, we recorded very little tariff adjustment of previous years, while in 2020, we recorded more than EUR 15 million. And then as the numbers of meter replaced significantly decreased in respect to 2020, there are more than EUR 16 million less revenue in terms of meter reduction. Let me say that from -- on the energy efficiency side, we have seen results above either our expectation, thanks to the effort made by Seaside, especially on the eco bonus or super bonus activity and the fact that Ceresa that was acquired contributed with 1 month of last year. In Page 12, you have a different point of view of the revenues, line-by-line, the differentiation between distribution, tariff contribution for meter replacement and other distribution revenues and the other revenues. In the other revenues are accounted the activity of the energy efficiency and [ tax ] the retail activities. If we take a look on the cost side, and we are on Page 13. As I said before, the overall cost decrease in respect of 2020 by EUR 2.3 million. And that is mainly driven by our like-for-like efficiency that represent nearly 5% reduction in respect of 2020, accounting for more than EUR 17 million. On the other hand, other cost significant increase because it is linked to the revenues that we have seen before. The ESCo business, Seaside and Ceresa, they've accounted for nearly EUR 24 million additional cost. The margin that is associated to the energy efficiency activity is significant for that industry. It's a margin that is a little bit above 20%. Finally, we have accounted lower cost for the energy efficiency certificate and other costs for almost EUR 9 million. In Page 14, you have another view of the cost divided between distribution, fixed cost, net labor, net external cost and other activities. I would like to underline that the personnel and the external cost of our distribution business dropped materially despite the ever-growing perimeter. And in the other activity, the personnel and the external costs significantly increase, as I said before, driven mainly by the ESCo activity and by [ tax ]. Now I leave the presentation of the other part to Gianfranco. Thank you.

Thank you, Paolo. We are on Slide 15, where adjusted EBIT in 2021 amounted to EUR 583 million, marking an increase of more than 6%. This is the result of EUR 39 million increase in EBITDA, which was driven mainly by the remarkable increase of the revenues for EUR 37 million and lower cost for around EUR 2 million. On the other side, almost EUR 5 million of higher D&A, as we commented before, mainly driven by more than EUR 21 million for higher depreciation in connection with the CapEx executed in the last 12 months and a significant drop of around EUR 60 million in the depreciation accelerated for meter replacement. Consider that in 2021, this figure amounted only to EUR 1.5 million. Going to the next slide, Slide 16. Adjusted net profit after minorities reached the figure of EUR 368 million, up 6%. Out of that, the net adjusted financial expenses were EUR 54 million, net of the special item of EUR 6.4 million related to the buyback executed last February. This figure compared to the figure of EUR 49.2 million accounted last year. The increase is the result of our cost of debt, which is slightly below 1%. Combined with an higher average gross debt related to -- mainly to the prefunding activities that we carried out in 2021. I will explain better later. The contribution from associates increased by EUR 1 million, thanks to the positive result of [ Gesam ]. We accounted for EUR 143 million of adjusted income taxes, marking a tax rate of 27%, lower than the 27.4% that was reported last year. And this was due mainly to the positive impact of fiscal benefit on super and Ital depreciation and tax credit on investments. Moving to Slide 17 and talking about the cash flow. Our operational cash flow exceeded EUR 800 million and was able to fully cover the increased amount of CapEx that we executed in 2021. In addition to the net profit and depreciation and other noncash item for EUR 365 million, the net working capital brought a positive contribution for more than EUR 80 million. Working capital evolution during '21 has been positively impacted by a reduction of trade receivable, mainly for pass-through components and by the reimbursement for smart meters are Article 57. On the negative side, we reported lower payable for tax and sale. Cash out for M&A, mainly related to the acquisition of Ceresa for EUR 20 million and ESCo [ Fratelli ] for EUR 70 million, the latter included in the debt M&A pile in the graph. The cash outflow for shareholder equity is related to the payment of dividends for EUR 243 million and include also the dividend paid to Toscana Energia minorities for EUR 20 million net of the capital increase subscribed by our partner, Marguerite Medea. You will note the increase in net debt of EUR 243 million is strictly linked to this amount. Finally, I would also point out that the increase in net debt is in line with the one reported last year despite the increased CapEx effort during 2021. Let me now make an update of our debt structure at year-end. We are on Slide 18. First, I would like to recall the prefunding plan that we have carried out in 2021. In February 2021, we executed a liability management with an issue of 2 tranche of EUR 1 million, coupled with the buyback. This resulted in the net cash position of around EUR 750 million. Last October, we subscribed 2 term loans in ESG linked for a total of EUR 500 million at fixed rate and very competitive costs. Therefore, at the end of December, we had a significant amount of cash around EUR 1.4 billion available on bank accounts with leading financial institutions. In addition to that, we continue to leverage one of the lowest average cost of debt in the space of 1%. A very limited exposure to interest rate volatility, you see that 93% of our indebtedness is fixed and the average tenure is around 7 years. And I would say, substantially no refinancing risk for the next 24 months. [ Receipt ] to consider that the residual amount of 2022 bond has been already repaid in January. Let's move on the balance sheet on Slide 19, quickly net invested capital amounts to almost EUR 7 billion, with an increase of almost EUR 400 million compared to the end of 2020. Most of this is due to the fixed capital net increase of EUR 400 million, driven by the CapEx of EUR 865 million that we have already commented. On the liability side, consolidated net debt was EUR 4.980 billion, including IFRS 16 for EUR 70 million, with an increase of EUR 243 million compared to the year-end 2020. I leave now the floor back to Paolo for the conclusion and dividend.

Okay. Thank you, Gianfranco. I'm going just to close this consideration about what I have already anticipated before that is the dividend proposal made by our Board of Directors last -- yesterday. Thanks to the robust set of results, thanks to the result that we were able to achieve either on the revenue side and on the cost side. The proposal is to pay 0.295% (sic) [ EUR 0.295 ] and it will be submitted this proposal to the next January assembly. And if you compare this number with 2020, there is an increase of 6.5%. If you compare it with the previous year, 2019 increase is 15.2%. On June 15, we will present our strategic plan 2022-2028. That will be -- that we'll have and new components, big component that is the [indiscernible] from one side, so a positive one. And unfortunately, another new one that is the lower WACC that has been approved recently by the regulator. I would like now to open the floor for the questions, if you may have, and we are ready here, myself and Gianfranco to respond to you. Thank you.

[Operator Instructions] The first question is from Harry Wyburd with Bank of America.

Three of them. So firstly, on DEPA you mentioned, it's due to complete in the coming weeks. I wondered if you could, could you give us a rough indication of where your balance sheet ratios will be post that transaction? So the net debt to EBITDA or debt to RAB. And are you comfortable that those ratios still allow you a bit of headroom to continue with your strategic initiatives in Italy, so -- concessions and bolt-on M&A? And then secondly, on inflation, can you remind us what your current inflation assumption is within your business plan over the next few years? Because I think the breakevens in Italy, some market-implied inflation close to about 2.5% now. And it'd be interesting to know if you could give us any kind of rough sensitivity as to what an additional percentage point of inflation might do for your earnings, if that's possible. And then third one, very general question. Obviously, there's a lot of change going on in the wider EU energy sort of market structure right now and the EU this week published a set of plans to change things around in response to what's happened in Ukraine. I'd just be interested, very general question to you, what do you think the sort of opportunities or threats are to you from that document or whether you think that will change anything for Italgas?

Okay. I will start with the last question and then Gianfranco will respond to you with more details about the first 2 [indiscernible] inflation. On the third question, I mean it's difficult really to predict what is going to happen. But I will give you my -- let me say, my flavor about what I expect is going to happen in next month because of the crisis in Ukraine. I think there will be an acceleration in some of the area where we can -- that can be leveraged to partially replace or increase our independence from the Russian gas. I'm thinking about [indiscernible] that is local production that can be significant if we will accelerate the authorization process, I mean agriculture and agriculture waste and open waste can be used to produce [ value metal ]. So I'm expecting there will be some strong movement in the direction. You have read about the fact that the storage will become even more important to address these kind of issues. I'm expecting an increase also from the LNG side as another flow that can sustain an alternative flow coming -- of the gas coming from Russia. Let me say that in the first, as a biometer and also relevant to the LNG, Italgas is well positioned. Imagine all the work that we have done in Sardinia, the building LNG small tank to support and to distribute the natural gas into Sardinia is an element that is already there. It exists. So if the LNG flow will increase, we are ready to accept it on the biometer and we are working very hard in order to make the connection even more simple and less costly for any owner of the biomethane plant. So my reaction -- my first reaction to your question would have been that we will see more and more activities in the area where there is diversification in respect to the traditional flow of gas, then we will see what is going to happen in the next months. I will let the floor to Gianfranco to respond to the first 2 questions.

Yes. First question was regarding data impact on our balance sheet after the acquisition. We can give you some figures consider that we have at the end of last year, debt-to-RAB ratio slightly below 62%. And consider also that the RAB projection for 2022 for DEPA, as we commented last September was around EUR 790 million. If you consider the acquisition price, this will drive asset to a ratio in the region of 66%, 67% for the impact of the acquisition itself, then we will have also the cash generation of this year to arrive to the final number for 2022. And of course, this will be given to you later on this year as a guideline. Regarding inflation embedded in our business strategic plan of last June, we projected an average inflation of around 1.6%. And the deflator, which was 20 basis points higher on average, so around 1.8.

The next question is from Javier Suarez with Mediobanca.

Two or 3 questions on my side as well. The first one is on the measures taken by the government to accelerate gas auctions. So that the competition decree or the regulatory vehicle to make those actions more real or to see real action on the auction is taking more time than initially expected. So if you can give or share with us an -- of your latest view on the speed for the implementation of this measure and how high is in the priority of the government to grant that these measures on a complete Italgas can put capital at work within the country? That would be the first question. The second question is on the benefit from the recovery fund not just in Italy, but also in Greece. I just wanted to have your latest thoughts on the possible benefit that a company like Italgas may have on that recovery plan in your areas of reference? And the third question is on the performance of your energy efficiency business that has been quite impressive in 2021. So I would like to see if you can share with us any comment on the expectations for this activity for the next year.

On the first question, let me say the first part of your question, you also answered to you there is no news. So it's difficult to comment with there is no news about acceleration of the gas tender. What I can tell you regarding 2022 situation, we have in front of us 4 tenders at which we are going to participate. The items are called [ las bestias ], Rimini, [ Bella ] and [indiscernible]. So at least we have -- we are going to face this year 4 tenders. When I said the phase means that we are going to submit an offer for those 4. And then we have others that are under, say, qualification -- under qualification. So -- but those 4 are the 4 that we expect to submit our offer just for the name [ las bestias], Rimini, [ Bella ] and [indiscernible]. On the recovery front, second questions, Greece and Italy are very similar. Let me say that we would apply either in Greece or in Italy to the recovery fund for those projects that are not -- that are let me say project of innovation. So if we are talking about use of artificial intelligence, digital transformation. Those are all production of green hydrogen, like the project that we have in Sardinia. Those are the projects that will be submitted to be eligible for recovery fund. On the other side, if we are talking about digital transformation of the asset, that is something that you can understand is part of our RAB growth, and they are not -- we will not ask them to be supported by recovery funds. So our view of the recovery fund is that we would like to be eligible for project that are extremely innovative from that point of view. So either on the digital side or on the new let me say, gas is similar like synthetic gas or green hydrogen. Then on the third question, I will ask Gianfranco to help me.

Yes. Regarding the Energy Efficiency segment, let me say that our ESCos, our companies because now we have acquired also a company, as you know, Ceresa, that was included 1 month in December last year. The group of the ESCo, I would say, posted a remarkable EUR 8 million EBITDA for 2021, corresponding to a margin of around 20% of the revenues. The interesting is that almost half of this figure has been accounted in the last quarter. This means that the activity is now peaking on the basis of the super bonus scheme that you know will last for 2022 this year and next year. Going forward, as you asked, the point is to secure a customer base that the companies are getting from this incentive scheme in order to have a platform of customers to sell their services going forward after the -- say, the termination of this -- of the duration of the super bonus mechanism.

The next question is from Enrico Bartoli with Stifel.

First one is related to the outlook for CapEx for 2022. If you can provide us what you expect guidance? And if you expect any, let's say, complication in the CapEx execution from some disruptions in the supply chains for raw materials, for electronic components that we are seeing as a result of the Ukrainian crisis? Second question, again about DEPA. If you can -- if you have any update on let's, say, the regulatory review that I think that was due at the end of 2021 and on the CapEx plan that you expect from -- in Greece from the company? And the last one is related to the regulatory view that was completed in Italy by the regulator at the end of last year. If you can give us some comments on what you expect in terms of impact on Italgas starting this year?

On the first one, regarding to CapEx, 2022, we will provide you the guidance in June. But as we -- and I'm connected to the third one, we are going to review our CapEx also considering the review of the reduction of the WACC. So it will be consistent. We have said that many times last year, and we are going to take a very close look. Regarding the CapEx, as relevant to the supply chain as of today, we don't have any -- we have not had any impact about our supply chain, mainly because we don't have a relationship with that area, Russia, Ukraine either in terms of supply or any other kind of relationship. We are investigated. We are currently investigated with our supplier if this crisis may impact them in some way. As you know, we have had some small problem about the supply of components that contain let me say, the chip and other things like that, but that was more linked to the high demand of those components all over the world, not on the Ukrainian crisis. Regarding DEPA, the regulatory review will happen at the end of this year, not last year. So the WACC will be reviewed and the new WACC will take place starting from January 1, 2023. So we will enter into the discussion with the Greek regulator probably in the second half of 2022. Regarding the CapEx plan of the 3 companies because we have not reached the closing yet. The funds has prevented us to get into detailed discussion with the 3 companies. So as soon as we get at the closing, we will immediately start reviewing the CapEx plan. We have already sent messages to the 3 companies. I'm talking to EDA Attikis, EDA Thess and DEDA to consider their CapEx deployment of the CapEx plan in line with what we are doing currently in Italy. So strong focus on digital transformation, strong focus on the development of new grades. So we expect to find when we will start the discussion with the 3 company, we expect to find the, let me say, the CapEx plan in line with those principles. Last question about the [ WACC ]. You remember that the impact of any 10 basis points is equal to EUR 8 million less revenues. So the [ WACC ] has been decreased by 70 basis points. So the impact is going to be EUR 56 million over the year.

The next question is from Stefano Gamberini with Equita.

A few questions also from my side. Coming back to the EU proposal of 2 days ago. Could you elaborate a little bit also about what could happen in 2030 if I'm not wrong, the EU proposed as a target to reduce the fossil gas consumption by 30% in 2030 with different measures? You already underlined what could happen immediately in order to offset the reduction of imports from Russia, but in this prospect, what could happen in your view, how this could be offset by other kind of gases? The second regarding the changes that are under discussion in the parliament regarding clearly the gas tender again. So could you -- do you think that these are -- could have a material effect on gas tenders? Or at the end of the day, also in this case, did you expect that also the introduction of these new changes, the new rules are not so important to accelerate the tenders? And the final one is regarding the investments in digitalization, if I'm not wrong, this could end in 2022 or 2023 and also the digitalization for the new meters are already at the end, you already stated that you will revise the [ trend ] of CapEx for coming years. Just to understand what are the main drivers from 2023 on most of your CapEx on the network? If these are related to the new tenders or some other drivers that could impact the investment 2023 onwards?

I will try to elaborate a little bit more what I've already answered about what can -- what could be the impact of the Russia crisis. I think as I said before, we will see an acceleration of some of the initiatives that were already in place, but probably with a very slow pace. As I said before, biomethane. Biomethane may represent a significant amount overall, our consumption. All numbers are showing a potential of more than 10% of our annual consumption up to 10 billion cubic meter. And this is something that can be developing let's say, 2, 3, 5 years' time, maximum. So it's there. I'm expecting some initiatives in order to promote such a local production that is also renewable. So you have not only a production that can -- that is locally but is also renewable stuff. On the other side, I will see also a significant push in the technological research relevant to the production of green hydrogen. Again, green hydrogen is coming from renewable, is something that can be blended relatively easy, low percentage into our network and replace again natural gas. So if maybe we have seen that perspective of green hydrogen in the next decade, as we have said in our strategic plan in June, maybe we can see some acceleration on that side. Remember also that the natural gas combined with CO2, produce synthetic natural gas. It is another project we have currently undergoing with [ boots ] emission, where we want to test together the recombination of the CO2 that -- [ boots ] emission has been able to capture with green hydrogen produced from renewables. So what I can see is an acceleration of all other -- of all initiatives that will bring an alternative to natural gas. So that is a good news from that point of view because people will invest more in that area. On the gas standard, Stefano, you have seen that many, many years. Sure, if some of the changes will be approved by the parliament, like the [indiscernible] for the [ community ], you remove 1 [ under ] block. But then at the end of the day, it's the willing of the -- of the [ stazione appaltante ] of the municipality to do the tender. If they are not willing to do it, it's difficult to force them. There is no legislation that we force them to do it. If we are going to have a 4 and maybe couple of more this year, it would be a great achievement. So we are working hard on that. Regarding the digital transformation, we confirm that by 2022, the majority of our network will be fully digitized. As similar to the smart meter that we are having difficulty in replacing the last traditional meter that are maybe located in a difficult area to be reached, we will have also by the end of the year, some of the equipment not yet replaced because maybe they are small, they are located in difficult area. But by the end of 2022, majority of our network will be fully digitized. Regarding the CapEx overall value, as I told you, we are going to revise our CapEx plan according to the news to the fact that we have DEPA, to the fact that the WACC has been reviewed -- has been reduced, but we will give you the guidance when we will present the plan. We will not give any guidance before that may be misinterpreted because the CapEx plan should be consistent with all the other macroeconomic elements with the perimeters that we are going to face in the next years.

Just a quick follow-up, if I may, regarding a previous question on the depth of RAB at the end of 2022, including the acquisition of DEPA. Is this 66 -- 67 level already include also the acquisition of minorities in 1 of the 3 networks by Eni or not?

Yes.

The next question is from [ Carlos Razuri ] with Schroders.

I have 2 questions. The first one is on DEPA. Can you remind us what will be the incremental EBITDA and debt once you consolidate DEPA financials? And secondly, can you elaborate on the initiatives taken to reduce fugitive cash emissions?

I will start with the second, I'm going to -- okay. I will give the floor to Gianfranco for DEPA.

Yes, for DEPA, I will remind that we have the possibility to give you the figure for 2020 and the EBITDA was EUR 81 million. In terms of revenue, EUR 129 million. In terms of RAB, the figure 2020 was EUR 664 million, while for the year 2022, as I said before, is EUR 793 million. And the debt is very limited in 2020. The 3 companies has a very low amount of debt, so negligible.

Okay. Regarding fugitive emission, I will start from the acquisition of minority stake. So we have become shareholders of Picarro. Picarro, they have a very innovative technology for the research of fugitive emissions. It has been proven to be extremely effective because we were -- this technology is able to detect particle of CH4 1 out of billion instead of the traditional one that is 1 out of million. So it's 10,000 -- it's 1,000 more powerful than the traditional one. Our last year as well as 2020, we have inspected 100% or nearly 100% of our network. Our target that this will be achieved probably in a couple of years' time is to expect twice a year the whole network. So we are going to increase the -- our activity in fugitive emissions research because they will provide us not only more accurate, even more accurate situation of the future of the leakages. But on the other hand, it will provide us billions of data that will be used by us to have a more -- to detect the situation of our network and to be able to have a more plan -- better plan intervention activity. So with all the data collected by the researcher by Picarro in addition to all the data collected by our digital equipment, merging those billions of data together, we will be able to have a clear full picture of the grid and ready to accept different kind of gases. So I'm referring to the previous questions about replacing natural gas because of the Russian crisis. To do that, we should have a network that is able to accept different kind of gases. We are probably the only one that by 2022, at the end of 2022, we'll be able to accept different kind of gases and with the data provided by our equipment and by the Picarro research that would be much easier than anyone else.

The next question is from Bartek Kubicki with Societe Generale.

Just a couple of things I would like to ask on Greece, please, mainly given the situation and the fact that Europe may want to diversify from Russian gas. Do you see any risks that actually Greece may decide to slow down the gasification process and the sort of transition from lignite to gas and they may simply stick to gas for longer, which could -- sorry, for lignite -- stick to lignite for longer, which could somehow endanger your investment plans? And then, of course, I agree with your view on biomethane, but I would like to know what is the status of the biomethane market in Greece, if you compare it to Italy? What are the opportunities there as well? And thirdly, if you look at the sort of quality of the Greek distribution networks, how it is in terms of the quality there versus the quality of the network you are having, especially in terms of sort of accepting biomethane, synthetic gas and hydrogen in the future into the network?

Very much appreciated that this set of question is on Greece. So finally, we are bringing Greece into our picture. So I'm very happy about those questions. The first one, first of all, you should consider the overall amount of gas consuming in Greece is very limited in comparison to the Italian one. So maybe their dependence on Russian gas is higher in percentage but in terms of absolute number is very low. You need to consider that in Greece that it is up, well, it is called different in Greece, but that is the initial part that up. So they have already a pipeline coming from their by f[indiscernible] from which they can get gas. And then there is a lot of initiative in order to exploit the LNG. And that is -- I mean that is fully understandable considering the more -- the geography of Greece itself. And then for us, it's positive because we know how to deal with LNG based on our experience in Sardinia. We can just bring this experience to Greece. So from that point of view, I don't see particularly problems in a sense that considering the overall amount of the gas consumed also in perspective, they can easily diversify the source of supply. Biomethane in Greece is probably at the same level of biomethane in Italy. So big opportunity, very little use of biomethane. I wanted just to compare, for example, the Italian, but similar to the Greek situation with the French situation, we know because we have daily contact with our colleagues in France, they have more than 300 biomethane plant connected to their network. So a huge potential. It's the same in Italy that there is a huge potential similar to Greece. So it's not being exploited out to now. But again, similar, we will see some growing opportunity in terms of biomethane development also in Greece. The quality of the network. The network is probably younger in terms of life than our network. Remember that the network in the north part of Greece, [indiscernible] was built based on our engineering. At this time, Italgas was a partner of the Greek government in [indiscernible]. So I can imagine that being younger, we should probably -- we need to make check, but the compatibility of the Greek network toward different kind of gases such as biomethane or hydrogen should be at the same level as the one as the compatibility that we have -- yet we have in Italy. But we need to check. So it's more a guess than not really some facts. Once that we'll be inside the 3 companies, we will immediately made a track of the material that they have used to build their network and see which kind of upgrade we need to put in place in order to make those network also compatible with other kind of gases.

[Operator Instructions] Ms. Scaglia, gentlemen, there are no more questions registered at this time.

I would like to thank everybody for participating to this conference call. And we will talk very soon. I remind you that we will have our general assembly on the 26th of April. And then we will have beginning of May, I don't remember exactly the date, the presentation of the first quarter results of 2022. Thank you to everybody. Have a nice day.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.