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

Good afternoon. It's 02:31 PM. And pursuant to Article 11.2 of the Articles of Association in my capacity as the Chairperson of the Board of Directors, I take the chair of today's ordinary shareholders' meeting and declare the proceedings open. With your consent, I call upon Notary Public, Carlo Marchetti to act as the Secretary. Are you all in favor? So I'm asking now the Notary Public to provide with the consent of those present, the information which is necessary to declare today's ordinary meeting constituted.

Thank you, Ms. Chairperson. First of all, the voting methods. At today's meeting, an electronic voting system was adopted using the so-called radio voter, aimed at reducing the duration of voting operations. So we would like to provide you with the necessary information for the correct use of the radio voter handed out upon registration. So you see in the slide how the voting process will be carried out, in favor, against, abstention and then the button okay. Accreditation to the shareholders' meeting takes place through the use of an electronic device consisting of a remote control called radio voter, to which the identification data of the person entitled to attend the meeting is associated as well as the number of voting rights. Here, shareholder represents by proxy. The radio voter is absolutely and strictly personal, it must not be given to others, left unattended or otherwise. Its custody is the personal responsibility of each proxyholder. Any loss must be promptly reported to the personnel at the stations in the accreditation areas. The radio voter has 3 functions. So identifying the participation of the person entitled to intervene in the meeting, recording both the number of votes of the person entitled to intervene and the number of votes attributed to him or her by each delegating person and sort of the legitimacy to book interventions and then the entitlement to vote in the manner referred afterwards. Entry, exit and re-entry into the room where the meeting is held shall be made after passing through the stations located at the entrance to the meeting room where the entry into meeting premises shall be recorded as well as the termination of participation in the event of the exit even temporary and the resumption of participation in the event of re-entry. So please note that you will be asked to cast your vote using the appropriate radio voter device given to you upon registration. When asked to proceed to the vote, you must express your vote by pressing only one of the buttons. So green in favor, red against, yellow abstention, and immediately afterwards, okay. As long as the okay button is not pressed, the voting intention may be changed by the other person, the vote of this caster will remain on the display until the end of each individual voting procedure after the vote has been cast. So please press the okay key. As long as this button is not pressed, the voting intention can be changed by you. The vote of this caster will be then recorded. Those that who don't cast the vote will be considered as non-voting. Votes may be cast within 1 minute from the beginning of each vote. After that time, the vote will be declared closed. I'd like to remind you that the representatives of several shareholders of trust companies wishing to vote differently within the proxies received must necessarily go to the assisted voting station. And I also would like to inform you that in compliance with the provisions in force, the notice of call of the shareholders' meeting was published entirely on the company's website on March 21, 2023 as well as again on March 21 in extracts in the daily newspapers in Il Sole 24 ORE and Financial Times as well as disseminated in the other ways prescribed by the regulations in force. So the agenda, financial statements, annual report, report of the directors, the board of statutory auditors and independent auditors, related and consequent resolutions; 2, allocation of the profit for the year and distribution of the dividend; 3, report of the remuneration policy and compensation paid, 3.1, approval of the remuneration policy to pursuant to Article 131 Paragraph 3B of legislative decree 58; 3.2 resolutions on the second section of the report; and #4, long-term incentive plan, '23-'25 related and consequent resolutions. In addition to the Chairperson, the CEO, Paolo Gallo and Claudio De Marco, Fabiola Mascardi, Gianmarco Montanari, Lorenzo Parola, Manuela Sabbatini, Qinjing Shen, Maria Sferruzza and Statutory Auditors, Giulia Pusterla, the Chairperson; Paola Maria Maiorana, Standing Auditor is the Auditor at present. Standing Auditor, Maurizio Di Marcotullio excused his absence. The share capital is EUR 1,003,227,568.76, divided into 810,745,220 shares with no par value. Each share gives the right to one vote to the company's ordinary shareholders' meeting, no categories of shares other than ordinary shares. So 839 people are present. 669,000 shares equal to 82.52% of the capital. Pursuant to Article 13 of the regulation and the protection and free movement of the personal data of natural persons in due regulations, I hereby inform you that the names are name, place of birth, the residence and professional qualifications of those attending the meeting have been and will be processed by Italgas as data controller in the forms and within the limits related to the obligations, tasks and purposes provided for by the applicable legislation specified in the information notice provided to those attending. The list with the names of the persons entitled to participate in personal or by proxy with the number of shares held by each and of -- if applicable, of the delegating shareholder is at your disposal and completed with the names of those who intervened subsequently or leave before its vote with an indication of the number of shares will be attached to the minutes. After each vote, the number of those voting in person or by proxy will be announced and the result will be announced. As recommended by Consob, the financial analysts, journalists and qualified experts are able to follow the proceedings of this meeting. Deloitte & Touche is also attending this meeting, Paoli Rolli. They are the company's auditing firm. And again, they are attending the meeting. Lawyer Germana Mentil, General Counsel is also attending the meeting. And pursuant to Article 5.2 of the Italgas S.p.A Shareholders' Meeting regulation, there is a Chairman's office with Germana Mentil, General Counsel assisted by Valentina Piacentini, Secretary, and they are present in Turin Largo Regio Parco 9. We have an audio-video recording system of the speeches for the sole purpose of facilitating the proceedings of the minutes. The recording will be available deferred by a few minutes with your consent on the company's website as per notice distributed. Pursuant to Article 4 of the regulations for shareholders' meetings, no recording devices of any kind other than those above-mentioned nor photographic or similar equipment may be used on the premises where the meeting has been held. There is also a simultaneous translation service from Italian into English. The headphones are available at the reception desk. I remind you that pursuant to Article 7 of the rules of procedure of the general meeting, request to speak may be submitted to the Chair's office from the moment the meeting is constituted under the discussion until the discussion of the relevant agenda item has been declared upon. So you have 5 minutes for each item. And well, during the discussion that will take place jointly for all the items on the agenda. Voting will then take place separately for the various items on the agenda. This allows all those entitled to speak and express their opinion in a fair time and also keeps the duration of the meeting within appropriate limits out of respect for all those present. There will be just one discussion, I'm against. No replies are allowed. And after the closing of the discussion, only brief explanations of vote are allowed, which is indicated by the President as 2 minutes of total time available to the individual person. Well, we may decide about the time if there are any specific requests. I also would like to highlight the following. In case of amendments to the proposals formulated by the board or in any case, in case of proposals other than those are formulated by the board, the board's proposal will be put to the vote first. And only if such proposal is rejected, further proposals will be put to the vote. Similarly, in case of presentation of points of order, on which there is, in any case, a debate, if the chairperson decides to put them to the vote, any proposals made by the Chairperson shall be put to the vote first. And only if rejected, shall the proposals of those present to be put to the vote. The proposals of those presents shall be put to the vote starting with the proposal submitted by those representing the largest percentage of capital. I'd like to inform you that in connection with today's meeting, the fulfillments required by civil law and the provisions and regulated markets have been carried out. So Ms. Chairperson, I give the floor back to you for your remarks.

Thank you very much. I therefore, declare today's shareholders' meeting validly constituted and able to pass resolutions on the items of the agenda. Please note that the company has not received any request to supplement the agenda and submit new resolution proposals pursuant to law in Article 126-bis of the Consolidation Financial Act, that based on the circumstances known to the company and the statements of those present and the legitimacy to vote of those present has been verified. In any case, I'd like those present to communicate pursuant to the provisions of law, regulations in force and bylaws, the existence of any situations of lack of legitimacy to vote or exclusion from voting as well as the existence of any shareholders' agreement. This in relation with respect to all voting procedures.

Thank you very much, Ms. Chairperson. So according to the shareholders' register at the record date and other available information, the shareholders directly or indirectly owning voting shares representing more than 3% of the total issued shares are; CDP through CDP Reti, 25.99%; through Snam, 13.47%, totally for a total of 39.47%. Lazard LLC, 10.4%; to Romano Minozzi through Granitifiandre 0.2; through Finanziaria Ceramica Castellarano, 0.22%; and through Iris Ceramica Group, 1.89%; owned shares at 2.14%. In total, Romano Minozzi owns 4.28%; Blackrock, 3.9%; Credit Agricole through Amundi, 3.5%. As for the shareholders' agreements relevant to pursuant to Article 122 of the consolidated law on finance, we note the following. The company has a shareholders' agreement between CDP Reti and Snam, concerning all the shares that each of them would hold in Italgas as a result of an effective -- as of the effective date of the partial and proportional demerger of Snam in favor of Italgas and the simultaneous listing of Italgas shares. The agreement, which came into force on the 7th of November, 2016, regulates the exercise of voting rights attached to the syndicated shares, the establishment of an advisory committee, the obligations and procedures are for the submission of a joint list for the appointment of members of the company's Board and certain restrictions on the sale and purchase of Italgas shares. The agreement was renewed on the 7th of November, 2019 and 2022 respectively. On the 21st of March, 2023, Snam and CDP Reti signed an agreement amending this agreement. Notice of this agreement was given as required by law, including to Consob pursuant to Article 122 and published on the company's website. As regards to the questions asked during the meeting, the following procedures shall apply. Answers will be given after the conclusion of all the speeches on the items of the agenda, and if necessary, after a short break, which is necessary to organically prepare the answers. At the end of the answers, the proposals, as we said on the agenda items will be put to the vote separately. I'd like to inform you that with respect to the right to ask questions, some questions have been received. The questions and the related answers have been published on the company's website. As required by law, the company has designated Computershare with full [ Giulia Favaro ] present here today as the party, the representative to whom those entitled to vote may give a proxy with voting instructions on all or some of the proposals on the agenda proxies that were actually granted to the representative.

Thank you very much. I declare the proceedings open. But before moving on to the agenda, I'd like to inform you that the reports by the board containing the proposed resolutions have been made available at the company's registered office on the company's website, www.italgas.it section Governance, Shareholders' Meeting, Shareholders' Meeting 2023 and at the authorized storage mechanism, E-MARKET STORAGE managed by Teleborsa within the terms of law. You were also handed out upon entering the meeting room the printed press booklet containing the aforementioned reports, the 2022 annual report, the report on the 2023 remuneration policy and the 2022 compensation policy, the report on corporate governance and ownership structures 2022 and the information document on the 2023-'25 long-term incentive plan. With respect to the type of items on the agenda, I propose to deal with the items 1 and 2 of the agenda jointly. Of course, votes will be held separately on each item of the agenda. As there are no objections, I proceed to the discussion of items 1 and 2 on the agenda of the shareholders' meeting. So I ask the notary with the consent of those present, to give some information regarding the fulfillment of the tasks of the auditing company.

There will be just one discussion. Now the board will report on items 1 and 2 of the agenda and then the others. So you said there are no objections, but I'd like to complain about the fact that there is just one single discussion on the first 2 items. I hereby inform that the auditing company spent 1,237 hours for a fee of EUR 75,512 for the auditing of the financial statements. And for periodic audits, 402 hours for a fee of EUR 18,340 for the consolidated financial statements audit.

Thank you very much, Mr. Notary Public. Let me now read out the letter to the shareholders. In an energy scenario character-wise, by a process of profound transformation, gas distributors play a crucial role in achieving the objective of energy security, supply diversification and decarbonization of consumption. A role that in the aftermath of the outbreak of war in Europe stores that has been even more specifically defined by REPowerEU. The European Commission document in fact indicating biomethane and hydrogen as sources destined to contribute the replacement of about 50% of the gas that EU imported from Russia, 155 billion cubic meters in 2021 and emphasized the extraordinary role of gas distribution networks as both carriers of these renewable gases and as a stimulus for their production. This is a logic choice since we can count on an extremely capillary network that in Europe stretches for about 2 million kilometers and which [indiscernible] transform is able to favor the progressive replacement of gas of fossil origin and the achievement of the net zero economy. In the scenario, the characteristic of capillarity makes these networks not only a driver for distribution, but also and especially for gas collection. Biomethane plant is much more likely to be located close to a distribution network than a transport network and feed-in is also easier due to lower operating pressures, as Italgas has demonstrated in recent years, working with 4 sites and vision on the digital transformation of assets and processes. The starting assumption is that digitalization must necessarily precede the energy transition. It is an infrastructural issue preparing assets to receive and manage multiple commodities, at the same time, to recognize in real time the types of gas that are being distributed and thus the quantity of energy to assess the correct network configuration at a given time and so on. Today, not only gas of fossil origins flow through our networks, the results of biomethane produced from the wet fraction of waste and agricultural residues. And in the near future, it will also be turn of hydrogen and synthetic methane. Consequently, the infrastructure must be intelligent, live, flexible and able to react to conditions that are not and will no longer be standard ones, precisely because of the arrival of different gases. Italgas has been working on this since 2017, a company and supporting this transformation with upskilling and reskilling activities to put its people in a position to discipline, to manage and anticipate change fast, but already by the end of 2023 will lead us to provide the country with an almost entirely digitalized network ready to welcome renewable gases and thus contribute to the achievement of climate targets. In this context, biomethane is crucial for the ecological transition of Italy and Europe. The potential is such that several studies agreed that the amount of biomethane that Italy could produce by building new plants and upgrading existing biogas plants which cannot be set into the grid due to its composition is about 8 billion cubic meters. 8 billion cubic meters corresponds to more than 10% of the country's current demand roughly. The amount that today brings TAP from Azerbaijan or twice as much as Greenstream from Libya to Italy. At a European level, the calculations are even more significant. The EU Commission estimates an annual production potential of between 25% and 30% of the Union's current gas consumption. From 2018 to 2021, installations in Europe almost tripled to 1,023 in 19 countries, and it is not a case that most of them are connected to the distribution networks in Italy. There are 54 biomethane plants for a capacity of 479 million cubic meters per year, so far from the Italian potential and that of other countries further ahead in the development of the sector, such as France with 365 and 620 million cubic meter produced, in Germany, 242 and 1.2 billion cubic meters. The margins for growth are wide, especially in Southern Italy, where by virtue of its agricultural obligation, indicate a production capacity of 2 billion, 3 billion cubic meters to be developed by 2030. Italgas is doing its part with more than EUR 100 million in investments to facilitate the connection of biomethane production plants to the distribution vector and to introduce reverse flow technology to the transport network so the quantity is not consumed locally can be accepted. However, there is a fact that needs to be stressed. Today, in Italy, most of the connection charges fall on the biomethane producer, while only 20% are borne by the system in the other EU countries. This ratio is often the opposite and this has been an important factor in their development. On both fronts, in line with the objectives set by REPowerEU, the intervention of the European legislator and the national regulator would be desirable for the definition of a framework of rules to promote their effective development, counting also on the use of NRR funds, which has a relatively short time horizon. As for green hydrogen, according to our forecast, its era will not begin 4, 5, 7 years. The condition must be created for its cost to be competitive with our sources. And for this to happen, a large surplus of energy from renewable sources and the lower cost of electrolysis than at present are needed. In the meantime, however, many experiments are underway by operators in the sector and Italgas is also working to be ready. In Sardinia, we are implementing a pilot project based on power-to-gas, P2G technology, for the production of green hydrogen. The project is in partnership with important research institutions such as the Polytechnic of Turin and the research center of the Sardinian region and is in its final stages with regard to the administrative authorization to be obtained. The choice of the island is not random. It is the only region that did know the advantages of methane. Until 2020, Italgas is creating a network of native digital networks, the most vanguard in the country that has made it possible to win the natural gas challenge within 2 years and to attract new operators in the sector, re-activating an important economic sphere and energy system based on the state-of-the-art networks and cryogenic deposits of liquid-fine natural gas, then has made it possible to overcome the lack of pipeline in connection. A model that can also, thanks to P2G technology, highlight the contribution of sector coupling to the carbonization and energy diversification and security. This solution can be borrowed in all those areas where traditional supply is complex and non-economic such as in some areas of Greece where in 2022, Italgas completed the acquisition of 100% of DEPA Infrastructure and its distribution companies, EDA Thess, EDA Attikis. A process of sharing technical and technological know-how has already begun with them in support of the common goal to build an infrastructure of excellence that will contribute to achieve the phase out targets from coal and depleted set by the Greek government in line with the EU targets. It is precisely the capacity for technological innovation which has made Italgas a global benchmark that has enabled the company's daily operation and process management to be digitally transformed in recent years, starting with its network control and gas leakage prevention activities in this area. The definitive adoption of Picarro technology, the most advanced in the world in the field of preventing network monitoring has brought about a copernican revolution in the control of fugitive methane emissions to the point of reducing leakages from Italgas networks to less than 0.1%. Innovation is also at the heart of our presence in the energy efficiency sector where the Group offers advanced solutions and products that ensure systematic energy savings. Those same solutions that are proposed to the market have already been applied in our operations and have enabled us to achieve savings of over 20% in energy consumption, both electricity and gas over the past year. Together with technological innovation, decarbonization, the circular economy, the sustainability of its supply chain, asset safety, training, diversity inclusion are also strategic drivers through which Italgas intends to implement the 2022-2028 sustainable value creation plan approved last -- 14th December by Italgas Board of Directors, which is part of the trajectory of the EUR 8.6 billion strategic plan. A plan that has set 3 directions; planet, people and partnership for a sustainable future together to which correspond lines of action with clear commitments, measurable targets and expected medium and long-term results. Thanks to adjusted revenues of EUR 1,537.3 million, EUR 1,555.9 million in the reported configuration and adjusted net profit attributable to the Group of EUR 395.7 million. 2022 also confirmed the Group's growth trend, which has been constant and continues since its return to the stock market in 2016. These are results achieved with the contribution of all Italgas people who have combined change, innovation and improvement and which allow us to propose the distribution of a dividend of EUR 0.317, an increase of plus 7.5% compared to 2022 to the satisfaction of our shareholders. Pioneers by passion and builders by location, we offer all our energy to accelerate the ecological transition. We do it for us. We do it for everyone. I invite the CEO to illustrate the 2022 consolidated results by means of illustration and commentary on the slides that will be at your disposal.

Good morning, everyone. Many of the things that we will see now have been already well showed by the Chairperson, so I will try to stop over specific aspects. First of all, we are now on the first slide. I'd like to show you the main results of 2023. So starting from 1st January, 2017, we registered growth each quarter. So 24 quarters of consecutive growth, and this has been -- this is a huge result. And over the last years, we have seen many difficulties, for instance, the pandemic and war in Ukraine. In 2022, we've seen important topics, and I'd like to remind them. As the Chairperson said, the 1st of September, 2022, we closed Greece. In 2022, we have seen an expansion of the activity of our company. We have seen the EBITDA which tripled compared to the previous years. We consolidated our assets in Sardinia. And we hope we will conclude the agreement with Veolia for the acquisition of water distribution network in 3 Italian regions. This was our target we defined in the previous strategic plans and we didn't manage to achieve this goal because we had trouble with concessions. So this is important for us in a very important moment of Italy. We are in spring and we will have scarcity in water resources. So we have tried to develop these agreements. And we hope we will be able to improve in a significant way also the networks that we will manage after the agreement -- the definitive agreement with Veolia. If we look at the company structure as at the 31st of December, 2022, you'll see what we've done during these 7 years starting from November 2016 when the Group divided from Snam and came back to the stock exchange. So here, you'll see the figures. So you'll see we overcome 81,000 kilometers of networks. We have more or less 8 million customers in Italy and Greece. We are active on more than 2,000 municipalities. So if you remember where we were in 2016, you can understand that there has been a huge expansion and we will see also in terms of results of what we obtained. And over the years, the share grew a lot in the past and we achieved more or less plus 100% compared to the initial value. And so we are aligned more or less exception for some data to FTSE MIB and we are at a good level in performance. So we have done a great job over the last years. Before seeing the figures, I'd like just to stop a bit on the scenario we have in front of us now. The scenario has changed above all after the war that is currently ongoing in Ukraine. The energy transition was the only objective of the European Union in the past, but I believe that this is true now, but I don't think now this is the only objective. The security of supplies that was obvious in the past today is not so obvious. Now we have to take into account the importance of security. And the other point is that beyond what happened, we understood we could have a very difficult winter. And so we faced a huge increase in prices last year. So this is a trilemma. This means that energy has to be present, but we need to have it at competitive prices. And so these are the 2 main points we noticed in the past. So when we speak about energy transition, we have to consider security of distribution, cost of energy that has to be competitive for our industry. And if we see the evolution in 2022, it's very important and significant evolution because of the wait of Russia, the wait of supply from Russia has had huge effects. We are at plus 5% of supply from Russia. The average of the year was 16% in Europe and 18% in Italy and we have also Greece indicated since we are present there too. So it's important to notice that the supply has evolved over the year. So the big we can say that we have become a single-digit importing countries from Russia in terms of gas. And the topic of the war has pushed the European Commission to re-elaborate the Fit for 55 in vision of diversification of supplies. So the document that has been drawn in spring 2022 has been published is REPowerEU, and its objective is to make Europe independent from Russian gas supply. So we have seen the wait of Russian gas, so 155 cubic meters of gas imported from Russia mean a lot. So the European Commission has identified a series of intervention. There's not one -- only one solution. So the objective is to replace these importing activities. So here, we highlighted the most important ones for our company concerning the production of biomethane as the Chairperson mentioned before she said that 25% will be replaced by local production of biomethane and then we will see the positive aspects of production of biomethane with importing and local production of hydrogen and with upgrading and an improvement in the use of our facilities. So biomethane and hydrogen are important for our activity in the framework of energy efficiency. Focusing on biomethane, we see that biomethane is growing more in other European countries than in Italy actually. Hopefully, the EUR 2 billion funds within the framework of the national resilience and recovery plan for biomethane will act as a stimulus for further developing this natural resource, which is a circular and renewable source of energy. We in Italy have a huge potential in this respect, which is still untapped. Just think about the fact that more than 2 billion cubic meters of gas are produced. And out of this, EUR 2.1 billion cubic meter could be actually used if all our plants were upgraded. And so we would have 2 billion cubic meters of biomethane immediately available. And while biomethane solves an important problem, which is that waste treatment, both agricultural and city waste and one of the byproducts are fertilizers. If you remember, when the war broke out, fertilizers were lacking. And then, well, if CO2 is sequestrated, it can be used in the agri-food sector. So we have a huge resource potential that would solve many problems and would allow us to start a strong and healthy circular economy. Just a couple of facts and figures concerning biogas and biomethane. You see that we have the potential. And according to our estimates from now to 2030, as you heard in our report, we could exceed with that production 10% of our consumption, but where if we have 8 billion to 10 billion cubic meters, and this would be a regasifier we would have millions of plants. And so the main topics that we have to deal with are, first of all, the authorization issue, and we know that this applies to all sources of energy, especially the renewable ones, but there are other issues that can foster the development of biomethane. First and foremost, as we said, we said that the system bears just a tiny part of the connection costs and this is a great hindrance because in the other countries of Europe, it's exactly the opposite. It's the system which bears most of the connection costs and producers will have just a tiny part of it. And the second issue is the flexibilization of the networks of the grids that will receive biomethane. We are doing a lot in this respect. We are investing a lot already to contribute to this development. Moving on to hydrogen. As we said before, well, I think we should rather focus on research and development now because hydrogen has a huge potential in terms of energy vector and in terms of energy storage, but costs are still not competitive compared to the energy costs today. We must invest a lot in research and development. We're not the only one to say so. And here, you see a map of all the development projects that are being carried out in Europe. Europe is actually the hub of development in the field of hydrogen production with impact on other sectors, transportation, for example, and other sectors that can hardly reduce their CO2 emissions. For these activities, the recovery fund money is really important for the development of the hydrogen technology. Only with that, we will be able in a few years to make hydrogen as an important energy vector that is also competitive. But we also have to play our role as distributors. We have to play this role both for biomethane and for hydrogen. This is a study within the framework of the project ready for hydrogen. And in this research study, the different distribution networks were analyzed at the famous 2 million kilometers available in Europe. And they analyzed their readiness to accept biomethane. 1/4 can be ready to accept hydrogen in a pure state. From now to 2040 with the upgrade and development of the networks, we will reach 2/3 of the grid ready for hydrogen. But I don't think we will be able to reach this situation because hydrogen will be most probably blended with other gases, for example, biomethane, but also synthetic gases because hydrogen can be easily transformed into a pure synthetic gas through the combination of hydrogen and CO2. In conclusion, we have been developing a strategy for many years. And this development strategy of Italgas is absolutely in line with the objectives of REPowerEU and is absolutely in compliance with the 3 aforementioned targets; security of power supply, ecologic transition and competitiveness of the energy sources. These are the core targets. I will not repeat them. If you follow the presentation of the strategic plans, you will certainly remember all this very well. Let's now focus on some numbers, both concerning the plan and concerning the year 2022 that has just closed. As far as investments are concerned, the plan that we submitted in June provides for EUR 8.6 billion for the planned period '22-'28. Please note we have Greece that accounts for EUR 1.8 billion; EUR 1 billion for the acquisition that was carried out, EUR 800,000 for the development of the distribution network in Greece, EUR 4.5 billion, slightly more than half of the funds. Therefore, the upgrade for the digitalization of the distribution network in Italy. And then we have about EUR 0.5 billion for the development of the energy efficiency and the water businesses. As far as the gas tenders are concerned, I will dwell on that later on. Let's see the breakdown of the investments. Out of the EUR 4.5 billion, slightly less than EUR 3 billion are for repurposing. That is, we have to prepare our networks for receiving without any problems methane, biomethane and hydrogen then extension, maintenance, innovation, technical innovation and the development of the energy efficiency of our networks, and this is the business of energy efficiency. So how will our networks look like in the future? Well, let's say, in the near future because this is already happening and will be completed by 2024. So our network will have 3 main features. They are digital, they are smart -- well, they are already smart, and they are smart because they're digital and they are flexible networks. They are digital networks because all the devices -- and we will see the progressive plan. So all the devices in the network are able to transfer information and receive instructions -- remote instructions. They are smart devices because -- smart networks because the data received from the devices are analyzed and used to react to contingencies and situations that may occur in the network. I will give you an example afterwards. They are or better. They will be flexible because they are able to reverse the flow and sell changing the typical way of working of a network -- of a distribution network that receives gas from transporter and transport it to the final user. We do this with an in-house system DANA, Digital Advanced Network Automation. And this DANA system allows us to remotely supervise our network, but also to react from remote if we have to adjust any parameters when needed. We have already a first example. In the past few weeks, we connected a biomethane plant, producing biomethane from [ CHNOPS ] waste. The producer is Bonollo, a spirit producer in the region of Veneto. And in a few months, we managed to connect this plant to our network. And it's a digital network and it has already shown its importance and relevance, because while connecting this biomethane plant, we managed to continuously supervise the content of biomethane. As you know, biomethane has to comply with the specific parameters in order to be put into the grid. We had tested that in a testing period. Production could not fully comply with the parameters. The valve was closed automatically and biomethane was transported back to the producer. This means that the digital connections allowed the remote control and allowed instantly react to any situations that cannot be acceptable in the grid. So just imagine, if we hadn't had remote control and an instant reaction, we would have introduced into our network, a biomethane that was not compliant with our characteristics and we would have realized that a few days afterwards. So this is just an example, but this is what happens on all our digital devices. This applies to system authorization, for example, to the system pressures to the pressure values at the end of the system. We are the only player worldwide developing such a digital network. We receive visits from Japan, from Australia, from the United States on a regular basis, people who came to see what we have managed to accomplish. And this is our plan, which is about to be completed for the asset digitalization. Smart meters, this is an issue that has already been accomplished. We are already thinking about introducing a second generation of smart meters, capitalizing on the experiences gathered on over 8 million smart meters installed, learning from the problems we had because we should not forget that this was a meter built when technology was not to the continent. We draw some lessons from this experience. And now we are developing a smart meter which will be proprietary, we will have the patent and will be installed starting from the end of 2025, both in Greece and progressively in Italy. So as soon as we replace existing meters, we will replace meters based on the need. We developed that type of meter in order to react to any possible service interruption of the GPS signal from telecommunication companies. So we will not wait till then, we will install these smart meters beforehand. So we don't -- we haven't only invested in smart meters, all devices are being transformed into digital technology. And apart from the meters, all these devices did not exist on the markets, we engineered them and we asked our suppliers to build them. The benefits of these digital transformation are besides the quality of service, the ability to provide immediate and concrete answers in the daily grid business. But we also have economic benefits, financial benefits, not only in the years to come, but these are benefits that we could already ripe. And according to our estimates, and actually, we underestimate that. So we will have EUR 300 million in the plan period. It's an under-estimation because nobody has done such things in the past. We are a benchmark for the market. We have no benchmarking. We have no parameters to compare with. And so we think that and we see that digitalization is providing us with benefits that we couldn't imagine. It's not by chance that we've managed to reduce our costs on a continuous basis by at least 5% on a year-to-year basis. So within this very beautiful and optimistic scenario, we must also consider the downsides. Well, this does not depend on us. And the downside are gas tenders. They should have been completed by 2018, but they're still lagging behind. We participated in some of them. We've won in most of them. We are envisaging to invest almost EUR 2 billion between new investments and acquisitions. But there's a good news there and there's a positive element, which is emerging. The new government, the new ministry is about to develop new guidelines for the calls for tenders. The criteria for winning tenders were actually established back in 2018 when digitalization and innovation were not such a priority, especially in our industry. And so now the ministry is reviewing the guidelines with the aim of rewarding digitalization, innovation and we are the only one pursuing these targets in Italy. And for this reason, now we are looking at these developments with the utmost interest because this will provide us with a competitive edge. Just a couple of words on Greece. The closing was finalized in September 2022. And in December, we took over 49% of EDA Thess that was owned by Eni. And now we have 100% of the Greek market through 3 distributors; one located in Athens, one based in Thessaloniki and the third one that will be in charge of developing the network in the remaining part of Greece because we are trying to transfer to Greece the skills, the competencies and innovations that we have achieved in Italy so that we can speed up the process and so that we can follow the same path as we did in Italy, maybe more quickly with the network digitalization, with the digital transformation of the company, the development and the development -- the support to the development of biomethane, green hydrogen. So all the topics that I mentioned before. And we can do so in a country where we have a long-term concession. It will expire in 2023, but will be renewed. And we are doing so in an ecosystem where development is key and new networks have to be built, and this is very similar to the process that we completed very successfully in Sardinia. Just one final word before going on with the income statement. By 2028, we foresee that our asset value, the RAB, -- well, RAB is also recognized by the authority. It's not an estimate. It's a valorization that we receive from a third-party entity. Over EUR 12 billion -- more than 12 million customers, end customers, both including Greece, the tenders and the organic development of our scope of activity. Well, before moving on to numbers, let me just spend a couple of words on 2 sectors, water and energy efficiency. As I said, in 2022, our [indiscernible] side more than tripled its results in terms of EBITDA and revenues. Our market share was very tiny and now increased to more than 2.5%. We aim at improving even further, especially by focusing on energy efficiency with great technology content. We do not want an energy efficiency as it is the case for many large players. We want to achieve the energy efficiency for all the industries, for all the sectors, whereby the content of technology and digitalization is very high, because in this area, we do not only have an issue with the market share, which is a secondary target, but we also have an issue with profitability, which is extremely high, 18% in 2022. We want to stick to within a range of 15% to 18% in terms of EBITDA. We have shown we are able to achieve these goals and we want to pursue this path. Well, of course, our main objective is the technology and innovation content that allows to keep such high margins. Revenues are less relevant in this business sector. Water, well, this is a target that we have set for many years. We have a small management company in the Province of Caserta. We are trying with the utmost effort to transform that type of management. Well, we can hardly obtain the authorization in order to intervene and improve the performance of the network. As I said, we have negotiated on an exclusive basis with Veolia in order to distribute water in 3 regions: Sicily in the Province of Latina, so Lazio and Campania. We hope we will be able to close the deal because I think that the 2 businesses are very [ synergistic ]. And well, in those areas, water leaks are over 50%. And nowadays, we have a problem with water scarcity. And I think that only digitalization can be the solution. If we take the network entities and by adding some smart technologies on it, we will be able to reduce water leaks by more than 15%, 20%. In order to reduce the leaks even further, we have to refurbish the network and replace some pipes that are really very old. And now very quickly, just a couple of financial data for 2022. And I'm about to conclude. Well, the figures are self-explanatory. If you look at the numbers that both adjusted and reported are increasing significantly versus 2021. The only issue we have to pay attention to our cash flows. We suffered from 2 elements that impacted on the cash flow. First, well, the energy efficiency business with the end of bonuses and concessions. Well, we obtained them from, well, within our company, and we got credits from within the company. We were planning to sell something, but we could not. And then the second element is the impact of the war in Ukraine, all the measures taken by the government for the end users and which have partly impacted on our financial position. We will certainly recover that. But for the time being, we've suffered in 2022 a lot. The cash flow in 2022 was lower than the cash flow we had in the previous years. If we look at numbers versus 2016, you see the progress achieved by this company, thanks to the commitment of the entire staff and the people working for Italgas. I will not comment on the individual figures, but if you look at them, they are really impressive. And please note that in this period, we have received from the authority, lower revenues by more than EUR 200 million. And in 2022, if compared with 2017, has revenues, let's say, in favor of the system, for EUR 115 million less, so just imagine the revenues we would have achieved without this regulation. But this makes us happy because it shows that part of our ability of being efficient and better than others was given back to the system through a reduction of distribution costs. So cumulative, we have given back to the system more than EUR 200 million. And I think we should be proud of that. Notwithstanding that, our investments have more than tripled in the past years, EUR 378 million in 2016, and now we are at EUR 1 billion more or less. From the viewpoint of debt, which is another element, we have to pay attention to, especially in the past 12 months, with the increase in interest rates. But luckily, since 2017 and well between 2017 and 2021, we had a wise interest rate policy, especially when the cost of money was equal to 0. As you see, the first deadlines will accrue in the next year for bonds, so EUR 400 million, and the rest are credit lines from banks. Well, our cost is relatively low now. It will increase in the years ahead. But 91% of our debt is fixed income debt, only minor part is variable rate. Both Moody's and Fitch have confirmed the rating value as of the end of 2022, and that's good news. But we do not only pay attention to the economic and financial situation. In the past 2 years, especially, we have focused on sustainability, which has become one of our pillars. I said if we want to focus on sustainability, just to fill out a couple of tables and to do some greenwashing, I don't care for sustainability, just a cost in that case without any impact. We instead adopted another type of attitude. We treat 1 kilo CO2 exactly as EUR 1 in our income statement. Every month when we look at the monthly results of the company, we also analyze our results in terms of CO2 emissions, energy consumption, waste processing, et cetera. And for this reason, in 2022, thanks to these analyses and thanks to the measures that we've put in place and that we've speed it up, we managed to achieve very positive results. In just 1 year, in 2022, we reduced by 21% our energy consumption in the broad sense of the world, so both gas and power consumption, and this is really huge. We, therefore, reduced CO2 emissions by 12% Scope 1 and 2. And within this path, we also obliged our suppliers to report on their CO2 emissions and energy consumptions as we do. And well, the numbers that we receive from them and this is the Scope 3 must be aligned to our standards, and that's the only way to proceed. Also people have been at the heart of our attention. If you consider the information we distributed also in complicated years, for instance, 2020, 2021 in the period of lockdown in a period that can be considered as complicated one. So in 2022, we doubled the hours of training compared to 2019, and we increased also the number of women in responsibility roles within the enterprise in general. We have a legacy that is extremely important, which comes from our history, from our sector. So we cannot change everything fortnight. So the path we are in will allow us to change anyway our mindset in a few years. I conclude with the proposition of the dividend. The Board of Directors on the 9th of March proposes to this assembly the distribution of EUR 0.317 per share. That is an increase compared to last year. And it is in line with the average growth from 2019. So we have an average CAG of 7.4%. So this is a sustainable growth. As you can see, it has been also the dividend plan is sustainable. And we have the higher between the payout and the growth rate. So thanks for the attention, and I give now the floor again to the Chairperson.

Thank you, Paolo. I ask the notary to proceed with the consent of those present, to read out the Board of Directors proposed resolution regarding items 1 and 2 on the agenda of the ordinary part of today's shareholders' meetings and to carry out the shareholder intervention. So item 1, considering having acknowledged the reports of the directors, the Board of Statutory Auditors and independent auditors and integrated annual report as at the 31st December 2022, you are invited to approve the financial statement at 31st December 2022 of Italgas, which is closed with a profit of EUR 259,813,111.40. And then the Board of Directors proposed to allocate EUR 400,000 to the legal reserve to allocate the shareholder a dividend per share EUR 0.317 in proportion to the shares outstanding on the ex-dividend date using the profit for the year, resulting from the financial statements of Italgas S.p.A. as of 31st December 2022, allocate a remaining amount to retained earnings to pay a dividend of EUR 0.317 per share as of 24th May 2023, with ex-dividend date set for 22nd May 2023 and record date on 23rd May 2023. I now turn to item 3 and I give the floor to the Chairperson of the Nomination and Remuneration Committee, Ms. Fabiola Mascardi, to read out the letter to stakeholders prepared by the Nomination and Remuneration Committee.

Thanks, Mr. Chairperson. Good evening, everyone. Dear shareholders, I'm pleased to present the report on the 2023 remuneration policy and 2022 compensation, a document with which we aim to transparently and comprehensively communicate Italgas remuneration policy and their link with the business and sustainability strategy, increasingly strengthening the constructive dialog with all stakeholders. The Nomination and Remuneration Committee established following the shareholders' meetings of 26th of April 2022 and to date, composed of in addition to the undersigned directors, Manuela Sabbatini, Claudio De Marco, and I thank them for their precious contribution, in the first year of its 3-year term of office and deems, and I believe it's important to thank the previous member of the committee for what has been achieved. Thanks to the listening to the main stakeholders and the analysis carried out by the independent consultants, the Nomination and Remuneration Committee was able to assert a general appreciation of Italgas remuneration policy, which was also reflected in the favorable votes cast by the shareholders' meeting for both sections of the report. The committee believes that the Group's remuneration policy still represents a pivotal element for the achievement of business and sustainability objectives in the medium, long run and for the creation of value for shareholders. Therefore, the activities and decisions of the Nomination and Remuneration Committee for this remuneration policy aim to ensure full alignment with the 2022-2028 strategic plan and with the value creation plan aiming at developing in a sustainable way, and on the other hand, to submit for shareholders' approval, a document consistent with the path taken by Italgas in the recent years, which has seen a progressive evolution both from a business and the remuneration policy perspective. 2022 has certainly been an important year in the history of Italgas. In fact, the Group played an increasingly leading role in the digitalization of the distribution network in Italy and in the development of the business related to energy efficiency and has led to the final closing of the acquisition of Depa Infrastructure in September with the related integration processes. And this has been well explained by our CEO. Italgas is therefore set to actively work outside its national borders exporting the high level of knowledge and expertise that the Group can boast in the gas sector and in the digitalization of the business. This will result in [indiscernible] and higher complexities and new challenges for the Group, which, however, has all the right measures to face them in the best possible way. This report on remuneration policy and the compensation paid has the aim of maintaining a constant alignment between Italgas business evolution and the remuneration strategy and the creation of sustainable value by the company for all its stakeholders. And this combined with the will to further improve transparency and the level of representation of all usable information. I think it's relevant to highlight a few elements that you will find described in the document. [Audio Gap] The representation of the different initiatives carried out in favor of all Italgas people is confirmed, thanks also to listening tools such as the climate survey with a view to support welfare and well being and in line with the objectives set out in the sustainable value creation plan. The 2023 remuneration policy is defined in continuity with the previous one and stems from a number of key principles, consistency, internal and external market analysis carried out in 2022 and sure full alignment with the main market and governance practices with the aim of ensuring proposals and decisions of the Board of Directors that are faithful to Italgas remuneration policy and to the approach that has always been communicated to stakeholders on remuneration issues. Listening, leveraging a constant and in that dialog with all internal and external stakeholders in order to ensure the full correspondence of remuneration policy with the key factors of the strategic plan and the creation of shareholder value. The committee welcomed the increase in positive votes at the 2022 shareholders' meeting. And once again, conducted with the support of human resources and organization function an in-depth analysis of the main evidence that emerged in order to identify the areas for improvement on which to intervene and which you will find in these documents. I believe it's extremely important to point out to the continuity in listening to Italgas people, stakeholders by excellence through a special climate survey conducted, which was also conducted in 2022 and in which 86% of Group employees in Italy and 80% of employees in Greece participated. And then sustainability and inclusion, the issues of sustainability inclusion as well as the remuneration to short, medium and long-term objectives, and the link to the share price are constantly at the heart of the Group's strategic decisions. And for instance, we can mention the incentive plans for the management, both in the short and in the long run, as mentioned, for the new [ ILT ] plan, ensuring a strong alignment with Italgas materiality and sustainability strategy. The overall alignment is also ensured by a structured process of assigning objectives with the various corporate functions, which determines a high level of commitment to the achievement of sustainability objectives set forth in Italgas strategic plan in relation to environment, social issues and governance issues, including network safety, on which the company, as always, focused its attention. This report highlights also the main results achieved in 2022, both in terms of environmental sustainability and in terms of inclusion and diversity. With regard to this last point, it's important to highlight the results that have been achieved in terms of presence of women in roles of responsibility, which reached 24.7% at the end of 2022. And this is a topic which is always a priority for the Group and it still remains a priority for 2023. The remuneration policy is also consistent with the company's vision, mission and purpose. And with the new leadership model developed by top management based on 3 main pillars: excellence, innovation and people. The values and principles are fully reflected in the policy and will be the basis for its further development. We believe that this approach can be positively assessed and reflects the expectation of all Italgas stakeholders while ensuring a remuneration policy aligned with national and international best practices. I'd like to take the chance to thank my colleagues, directors and members of the Nomination and Remuneration Committee, Manuela Sabbatini and Claudio De Marco for their passionate work together and the excellent start of the activities of this committee. And I'd like also to thank Lorenzo Parola who preceded me at the beginning of this term in the role of committee chairperson and the hope that this record represents an effective and exhaustive overview of Italgas remuneration policy. I'd like to thank you for your willingness to engage in discussion and for your support during the shareholders' meeting with a view to continue our dialog aiming at achieving common and ambitious goals.

Thanks, Fabiola. I ask the notary to proceed with the consent of those present, to read out the Board of Directors proposed resolutions regarding Item 3 on the agenda of the ordinary part of today's shareholders' meeting. There are 2 resolutions 3.1. So the ordinary shareholders meeting of Italgas S.p.A, having examined the report of the Board of Directors, drafted pursuant to Article 123-ter of Legislative Decrees #58 as amended for the purpose set forth in part of 3-ter of the aforesaid provision. And therefore, with binding resolution, deliberate to approve the remuneration policy illustrated in the first section of the report on the remuneration policy and compensation paid drafted pursuant Article 123-ter of Legislative Decree 58 as amended and other applicable regulations. And then the second part, the ordinary shareholders' meeting of Italgas S.p.A., having examined the report as amended for the purposes set forth in Paragraph 6 of the aforesaid provision, deliberate to approve the second section of the report on remuneration policy and compensation paid drafted pursuant to Article 123-ter of Legislative Decree 58 as amended. I can also read the deliberation for the last point, and then we can give the floor for discussion. So last point is following the shareholders' meeting of Italgas met in ordinary session having knowledge the proposal of the Board of Directors regarding the long-term incentive plan 2023, 2025. And having examined the illustrative report of the Board of Directors and the information document prepared by the Board of Directors pursuant to the provisions of Article 84-bis of the Issuers' Regulation, deliberate to approval pursuant to and for the purposes of Article 114-bis of the consolidated law on finance and agreeing with the reasons therefore, the 2023-2025 long-term incentive plan under the terms and conditions described in the information document attached to the Board of Directors' explanatory report to grant the Board of Directors and the Chief Executive Officer [indiscernible] with the express right to sub-delegate any and all powers necessary or appropriate to fully and completely implement the aforesaid 2023-2025 long-term incentive plan also through delegated person, including the powers of proceed with the annual allocation of the incentive in favor of the Chief Executive Officer. It being understood that any decision relating to the implementation of the plan in respect of the Chief Executive Officer remaining the sole responsibility of the Board of Directors, draft and approved the regulation of each annual allocation and making amendments and/or additions deemed necessary. It identified beneficiaries on the basis of the defined criteria, any other term and condition for the implementation of the 2023-2025 long-term incentive planning so far, and they do not conflict with the provisions of this resolution and provide for the disclosure to the market, the drafting and/or the finalization of any document necessary and appropriate in relation to the plan pursuant to applicable laws and regulation and the execution of this resolution. Thanks to the notary. So we have Bava Marco [ Geremia Carlo ] on item 1 of the agenda. So financial statements as at the 31st December, so approval of remuneration policy, incentive plan. So on all items on the agenda. I give you the floor.

I am Marco Bava. My Internet sites are the following: www.marcobava.it. And I declare that I do not want to make a suicide and accidents could be just casual ones. So I noticed that you were a bit deceived by some questions I asked. I remind you that the CT adds court affair for bribes and I asked during the assembly, if someone paid price at a personal level, I'm sorry, but I have to tell you this. I have a question concerning supply, my supply. And I know that Mr. Gallo already knows about it. Mr. Gallo says that in [indiscernible], there are 15 PDR that have not been set because of the impossibility to access my PDR that is in the bill has always been the same. Meters are not readable. I hope these meters will be readable in the future. I would like to test them. As far as the strategic issue is concerned about Italy and Greece, I've always said that I didn't rely on Russia, on gas. And according to me, gas would have always been more and more difficult in the future for this company. So hydrogen for me is also an alternative that is impossible for me. I've seen that there have been improvements towards shareholders, but I do not have time to deepen here. But it's simple. The hydrogen production compared to the energy value, the ratio is 2:1. And this is something clear. Hydrogen is a storage fuel, it is used for auto traction. It is used for storage in energy production in specific cases. But unfortunately, I do not have time to enter into details here. So this is [indiscernible] note on the page dedicated to hydrogen, use write a paragraph, which is extremely technical. Unfortunately, I do not have time to find it now. But anyway, I believe it is question #14. And you said that you produce hydrogen for distributors. So short pipelines, but you know that hydrogen need specific pipelines in stainless steel. But just for you to say to understand we have to think about hydrogen pipes from North Africa to Europe. It doesn't make sense to have pipelines for this. It's dangerous. It's not efficient from the point of view of cost. So it's obvious that we produce hydrogen through renewable energies. And so which is the sense of producing hydrogen in Africa and then to transfer it to Europe and then burn it in order to produce energy. So it's better to put energy in submarine cables. So there is the topic about maintenance to be taken into account. You know the level of the danger. Hydrogen is not gas, and you all understand the difference. So you confirm also this in your answers for question #14, the same for other topics. And then what about the future of Italgas? I have always spoken about water and Mr. Gallo mentioned it. We are thinking about it. We didn't already implemented something. But anyway, I want to ask you one thing. First, how much does it cost to acquire Veolia? And above all, what are the risks in this? You know you come from [indiscernible] I think. No, no, I come from Rome. I believe that [ Aquipotabili ] tried to do this in the southern part of Italy, but it failed and Romano, the President of Smart tried to work on that. I tried to tell him that this was absurd. And I tell you the same thing. Water is important but not in the South because people in the South do not pay for water. So it's obvious that we risk to have negative effects. And then last thing about information distribution, I just want to understand why our [ councillor ] and I will read your name maybe in the wrong pronunciation, Mr. Shell. Why your remuneration, fixed remuneration is higher compared to the remuneration of other [ councillors ]. And another thing, you made a list of bonds. Unfortunately, interest rates have not been indicated at least average rate. You didn't listen because I told you that the cost of debt is less than 1%. No, no, Mr. Gallo. This is one of the answers I read. I'm trying just to find it. In my questions, I asked that [indiscernible] is 5%. I don't find the answer now. And that is 1%. So congratulations, of course. But since you indicate many bonds, I'd like to know within those bonds, what is the interest rate. So you gave the right answer. This is positive, but I would like further details. Thank you. [indiscernible] So thank you very much. Well, there are no further questions as far as I know. We can answer the questions immediately without any break. Okay. So let's move forward without interrupting the proceedings. Well, I should apologize because apparently, I haven't been clear. It was not very clear when I talked about hydrogen. But let me just point out one thing. When I was very young, it was a little tight, so I don't remember that. But when gas was produced in the cities from the production of coal and coke, and it was stored in gasometers. where hydrogen reached almost 40% depending on the combustion process. And it flew through cast iron pipelines. So well, this was just incidentally to remind you of history. As we set out very clearly in our strategic plan, in our opinion, hydrogen will become cost effective as soon as we have a surplus of energy production from renewable sources of energy. So whenever we have a surplus, what does it happen, photovoltaic, wind, solar energy. Well, in that case, we have 2 options, either we switch off the plant and switching off plant for renewable sources of energy, you just have costs or you use that energy for other purposes. But as you may well realize, this energy has no value at all. Its value is nil. And so -- what is the dilemma of the producer of renewable sources of energy then, should I switch off the plant, thus generating costs? Or should I use that energy with a value equal to 0 for storage purposes? Well, storage is another dilemma. We do a store that energy in batteries, well, I think this is not a very wise decision or I transformed that into hydrogen and why that? Because hydrogen can be used for transportation, for the industry. I can put it into our pipelines, I can combine it with CO2, producing synthetic methane, and it can consume hydrogen and not only in the place of storage, but also in other places. So why is hydrogen now not cost effective? Well, if I have a plant producing from renewable sources of energy, there's no doubt. You should let energy flow into the grid. Well, that's quite obvious. You don't need any specific skills. But as plans foreseen, not only in Italy but throughout Europe. Well, in Italy, there will be 6,000 megawatts of new plants installed on a yearly basis. So we will not need these plants for certain periods of time. I may switch them off or I can store energy for the use of hydrogen, and that's cost-effective because that energy has a 0 cost. But in the meantime, research and development will allow to reduce the cost for the electrolysis process, which is still very expensive today. I think we are aligned from this viewpoint. So we share the same opinion. Almost the same opinion. I said, almost, I do not want to express your opinion. This is what I said. So the definition of energy vector, but I do not want to open up a discussion within 2 people. We can discuss afterwards under full eyes and noticing the meeting. Well, the energy vector has a specific definition. Hydrogen does not exist in nature. It becomes energy vector because I can store energy and I can carry it around. Okay, that's the definition of vector. Maybe I was not clear. Veolia, now let me try and answer the question. Well, the transaction value, the deal value is a sensitive piece of information is confidential. It's still under negotiation. We will disclose that if and when we close the deal. Well, concerning what you said on [ Acquiportabili ], I do not want to give you an answer that gentleman is not, well, I do not want to express my opinion on him. But the difference between now and 10, 15 years ago, we said today, we have technologies allowing to overcome all the problems and issues you mentioned. Well, just as an example, we are installing smart meters that can be closed remotely that can be used from far away as we do for gas. So this applies to water as well. There are technologies in place that allow us to foresee or to react immediately in case of water leaks. Just to give you some numbers, the leaks that we record in our gas infrastructure are equal to 0.1%. And well, for water, we said 50, 60. So we have 2 completely different parameters. And with our technologies, we will be able to reduce leaks under 50% at least. I think only large players with large structures and with large abilities to deploy technologies and innovations as it is the case for Italgas can intervene also in Southern Italy in order to improve water distribution there as well. Then there was a question on bonds. Well, I mentioned the average cost of debt. If you want to know the cost of every individual bond, go to Page 103 of the financial statements, and you find the cost of all the bonds issued since 2017. Then there was another question on Board member Shen. So why is his fixed compensation higher? Well, you may say because he's better than the others, that's a joke, but simply because he worked the entire year. So he started as a Board member since the beginning of the year. The other Board members started in April. So he has more months seniority, let's say, so more months of seniority compared to the other Board members. That's the reason now for his higher compensation. As far as your personal meter is concerned, we will analyze that. Well, as far as we know, you meter was replaced. But you're right, if you complain because you cannot read it. We will we will analyze that in depth, maybe they forgot. So the Secretary is here, so maybe they forgot, but we're not doing so only for the shareholders attending the meeting. I often receive mails of people complaining about the poor service. Well, I think our main target is that of providing high-quality services. And so we will certainly analyze your case, and we will give you a precise answer. Well, the first meet is we installed ahead GPRS. These meters that we are installing right now have a UT narrowband technology. The new ones are even better. We are testing them right now. We should test about 20,000, but we will use your meter as a test meter as we have to test the 20,000 units. We will use your meter to test, well, this should happen at the end of 2024. So we will take your PDR and we will install this new generation meter, and you will tell us whether it works. [ Ilaria ] always tells the truth. All right. Okay. So just a second. I asked the chairperson's office considering that there is no other interventions. So we can now vote. So no replies are allowed, only 2 minute statements are allowed... Please. Well, it's difficult to start a dialog. But well, let me go straight to the point. No one knows the truth. But I have to acknowledge that compared to the past, many things have changed as to be inhabitant. And well, we both worked for Fiat. He was a manager and I was a complainant, let's say. But well, the positive thing is that you finally managed to increase the value of the Turin headquarters. We spent a lot of money. That's true, but this money was well spent because these headquarters will represent the history of this company. And you mentioned history. Well, I know he's sitting very well. I don't know if you know that, but the new university was built on the old gas meter area, where there was a landfill. But you [indiscernible] Chairperson, would civil or a criminal lawyer. Because if you are a lawyer, you usually very aware of what you do. But as far as hydrogen is concerned, I would say the future of hydrogen is locally and well, as Toyota prior testifies and shows that the future of hydrogen is transportation. Well, at the end of the day, hydrogen is produced through electrolyzers that are powered by power. And then as for the infrastructure, you're right when you mentioned the problems related to the infrastructures. But it doesn't make any sense to invest money, also European money in something that doesn't make any sense as simply to protect the positions of some people who supported gas previously and now support hydrogen. Of course, we are a special company. And even though we lose a huge amount of money as it was the case for Saipem, we do not pay the price personally. But at the end of the day, the money is still our money. The results achieved by Gallo trying to diversify the business, show that this company has a huge potential, capitalizing on its track record. So I urge you not to invest in hydrogen, so please consider that this so-called innovation through hydrogen doesn't make any sense. So it doesn't make any sense what Europe is trying to pursue. And then Gallo said something which is not completely true. Well, as soon as the hydrogen as a fuel will be used, hopefully, first in Italy and then in other countries, there will no longer be a surplus that can be used for hydrogen for 3, let's say. We will need all the energies to produce hydrogen, as you said, to store energy, to produce electricity at night when it snows when there's no renewable source. And then, well, hydrogen can be produced but in the power plant. And so the power plant needs a storage unit. And hydrogen is produced by the distributor. So Mr. Chairperson, this is a huge potential, huge business potential for Italgas if it is aware of that. Because just imagine all distributors and by the way, I have a bi-model project for gasoline and hydrogen, well, all distributors will have to go to move to hydrogen just to imagine the potential of center market and the need for locally produced hydrogen in the future, but I mean, months, not years. This being said, and just to give you a strong and clear sign, I will abstain from all the voting procedures, and I will trust you, Mr. Chairperson, I invite you to follow all these issues more directly with greater awareness and sensitivity. Well, no one is knowledgeable in all the different sectors, but you, in your role can urge and invite this Board to focus its attention on these specific items. Thank you very much. So I declare the discussion closed, and I invite the notary public to proceed with the note with the voting procedures.

Thank you very much. Let's start with Item #1. So 82.5% of the share capital is present, [indiscernible]. Now you can cast your vote with the televoter. So all people, have you all voted? In favor, 82.39% with the numbers that you will find in the minutes against. Sorry, 99.84% of the people present against 0.01 abstained 0.14%. So there are no non-voters or shares that were not counted. So the resolution on Item #1 is approved by majority. Now item #2, so concerning the profit, so in favor of Item #2, 99.99% of the shares are present at the meeting. No people against, abstained 36,256 shares, 0.05%. No non-voters and no shares that cannot be counted. And now voting procedure on 3.1, which is the voting procedure on the remuneration policy, Part 1. So the first part of the policy was approved by 92.85% of the shares present against 6.58% of the shares present, abstention 0.56% of the shares present, no non-voters or shares that were not counted. So the proposed resolution is approved. And now the resolution on 3.2 concerning the nonbinding resolution on the second section of the remuneration policy concerning the fees, the compensations. In favor, 94.56% of the votes against 4.9%, abstentions, 0.4%. The resolution is approved by a majority. And finally, the resolution on the fourth item on the agenda. The voting procedure is open. In favor, 98.77% of the shares against 1.2% abstentions, 3 shares, the number of voters has remained unchanged, as mentioned before, and the numbers and the list of the names of the voting of the voters will be attached to the minutes. There being no other business to be transacted, first of all, I would like to thank all the people who have contributed to the organization of this meeting, the entire Board of Directors, especially the shareholders, their businesses. And so I declare today's shareholders' meeting closed at half past 4, and I wish good luck to the company for the following year. Thank you.