Financial Markets Review (February 2015)

February 2015

Performance of the main stock indices

Source: Snam on the Bloomberg data

The financial markets pag. 1 The utility sector pag. 2

Snam shares and its peers pag. 3 2014 results pag. 4

The oil markets

Oil prices closed the month of February up,

in a very volatile environment. The increase

was limited for the US benchmark WTI

(+3.2%, closed at $49.8/barrel), but much

more pronounced for Brent (+21.8%, closed

at $61.8/barrel). Meanwhile, as the US crude

oil was partially hit by oversupply in the inter-

nal market in America, the Brent orders were

boosted by the sharp fall in petrol exports

from Libya and by signs of improvement in

the European economy

Snam S.p.A. Investor Relations

The financial markets

February registered growth across the stock

markets, with increases of 5.5% on the US

S&P500, of 6.4% on the European DJ Sto-

xx50, of 8.9% on the Italian FTSE MIB, and

of 0.6% on the DJ EuroStoxx Utilities sector

index. Stock markets, European ones in

particular, were influenced by the positive

atmosphere generated by the successful

conclusion of agreements on Greece’s eco-

nomic adjustment programme. Boosts also

came from positive signals about the Euro-

zone’s economic situation and expectations

for the start of the ECB’s quantitative easing

(expected at the beginning of March).

From a macroeconomic perspective, in the

US (with reference to January’s data, on a

monthly basis) there was a decline in factory

orders (-3.4%) and retail sales (-0.8%), and

a slight increase in industrial production

(+0.2%). Estimates for the performance of

US GDP were revised downwards in Q4

2014 (to +2.2%, from the previous +2.6%,

QoQ annualized). In the Eurozone (with

reference to December’s data, on a monthly

basis) retail sales improved (+0.3%) and

industrial production remained flat. European

GDP was better than expected in Q4 2014

(+0.9% QoQ).

17.5%

5.1%

13.2%

2.2%

8.9%

0.6%

6.4%

5.5%

-5% 0% 5% 10% 15% 20%

DJ Stoxx 50

S&P 500

DJ Euro Stoxx Utilities

FTSE MIB

February ‘15

YtD ‘15

The Snam stock closed up

A positive performance across equity markets, boosted by the favourable outcome of negotiations on Greece

Oil prices closed up

Like the markets, the sectors also registered

positive performances in February. The best

performers included the raw materials sec-

tor, boosted by an upswing in crude oil pri-

ces and a slight improvement in the Chinese

manufacturing PMI, and the construction

sector, which benefited from expectations for

positive results from a number of companies

in Q4 2014.

The utility sector registered a less significant

increase, reflecting the characteristics of an

anticyclical sector in the period just before

the start of the ECB’s QE programme.

In February, the utility sector registered

growth of 0.6%, boosted in particular by

integrated companies. Several companies in

North Europe saw positive performances,

having announced better than expected

annual results (Fortum +7.7%) as well as

having benefited from a small recovery in

electricity prices.

Strong growth registered by the “other utili-

ties”, bolstered by speculative movements

following potential M&A opportunities at

some companies (Drax, +14.7%).

The Utility sector in the Stock Market


Main sector performance, February 2015

Sector and subsector performance, February 2015

‐2.9%

6.3%

1.4%

0.6%

-5% 0% 5% 10%

Defensive Utilities

DJ Utility

Energy Utilities

Others

The utilities sector registered a less significant increase, reflecting the characteristics of an anticyclical sector in the period just before the start of the ECB’s QE programme

The Utility sector performance

Financial Markets Review February 2015 Snam S.p.A. Investor Relations

DJ Ut i l i t y ; 0,6%

DJ Insur ance; 4,4%

DJ T el ecom; 4,9%

DJ Heal th Car e; 5,2%

DJ M edi a; 6,1%

DJ Real Estate; 4,9%

DJ T r avel &Lei sur e; 3,3%

DJ Chemi cal s; 5,7%

DJ Food&Bev; 3,8%

DJ Const&M ater ; 10,6%

DJ Inds Good; 8,4%

DJ Oi l &Gas; 9,8%

DJ Per s&Househol ds; 6,1%

DJ Autopar ts; 9,8%

DJ T ech; 7,8%

DJ Fi nanci al Ser v i ces; 9,7%

DJ Retai l ; 7,3%

DJ Banks; 10,2%

DJ Basi c Resour ces; 3,4%

-5% 0% 5% 10% 15%

8,9%

7.2%

‐3.4%

10.3%

4.7%

4.0%

1.2%

3.3%

5.1%

17.5%

13.2%

‐2.4%

‐5.2%

‐5.6%

‐7.9%

4.3%

3.8%

0.8%

0.6%

6.4%

-10% -5% 0% 5% 10% 15% 20%

The Snam shares and its peers in the Stock Markets

The Snam stock closed the last session in

February at €4.52, registering a positive

performance compared to the previous

month (+4.3%).

The stock’s performance, which outperfor-

med the utility sector, was boosted by the

Constitutional Court’s decision to declare

illegitimate the additional IRES (known as

the “Robin tax”) paid by oil companies and

companies in the energy sector, and by

positive views on the stock from several

brokers, as well as by the start of the ECB’s

quantitative easing programme (expected at

the beginning of March).

The average volumes traded in February

totaled 13.6 million units, up from 10.7 mil-

lion units in January.

Snam: Silver Class Award

Corporate News

Snam and its peers


YtD ‘15

February ‘15

FTSE MIB

Stoxx 50

DJ Utility

United Utilities

NG

Severn Trent

REE

Enagas

Snam

Terna

At the end of January RobecoSAM, one of

the world's most prominent Sustainability

Investment groups, has awarded Snam with

the Silver Class distinction in its "2015 Sustai-

nability Yearbook", a cluster which lists, within

Dow Jones Sustainability World Index, com-

panies outstanding in terms of Corporate

Sustainability. In the Gas Utilities sector,

Snam is one of the top scoring companies,

thus confirming its ability to combine business

goals and social responsibility.

This recognition follows the confirmation of

Snam in the Dow Jones Sustainability World

Index (DJSI World), one of the most impor-

tant and prestigious global stock exchange

indexes, which awards companies with

outstanding performance in terms of corpora-

te social responsibility worldwide.

On 27 February Snam, GIC and EDF Invest

finalized the entry of Crédit Agricole Assu-

rances into the share capital of TIGF with a

10% stake.

As a result, Snam, GIC, and EDF Invest

together with Crédit Agricole Assurances

hold respectively 40.5%, 31.5%, 18.0% and

10.0% of the share capital of TIGF indirectly.

With this investment, TIGF has a new share-

holder that will allow to further support its

development, while Crédit Agricole Assuran-

ces further strengthens its infrastructure

portfolio.


March

Agenda

12 Consolidated financial statement 2014 and Strategic plan 2015-2018. Press release and Strategy presentation

April 29 Shareholders’ meeting –single call Financial statements at December 31, 2014 - Dividend approval for 2014

Credit agricole Assurances in Tigf

Snam participated from 23 to 27 February

in third edition of “Social Media Week”, a

global event dedicated to new forms of

communication that took place in 7 cities

around the world: Milan, New York, Ban-

galore, Jakarta, Lagos, Copenhagen and

Hamburg. Cultural, social and economic

impacts of social media were examined

during meetings, roundtables and work-

shops.

Snam took part in two events: the

roundtable “Smart net-working. Big net-

works in motion”, that explored different

ways of applying mobile technologies to

industry and the benefits in terms of effi-

ciency and return on investment; and the

workshop “Sustainable Paths: Social

CSR and Shared Value” with bloggers

and influencers dedicated to sustainability

and nature.

Snam at Social Media Week

Snam and its peers: 2014 results

Snam and Terna will present the 2014 preliminary results on March

the 12th and the 26th

On 25th February Red Electrica presented the 2014 results

(million euro) 2013 2014 Change

Total revenue 1,758 1,847 +5%

EBITDA 1,302 1,385 +6,4%

EBIT 899 949 +5,6%

Net profit 529 718 +36%

Investments 596 956 +60%

Net debt 4,541 5,409 +19%

Financial Highlights

On 24th February Enagas presented the 2014 results

(million euro) 2013 2014 Change

Total revenue 1,262 1,224 (3,0%)

EBITDA 996 940 (5,6%)

EBIT 650 590 (9,3%)

Net profit 403 406 +0,8%

Net debt 3,773 4,059 +7,6%

Investments 531 625 +17%

Financial Highlights

Snam SpA

Piazza Santa Barbara 7 - 20097 S. Donato Milanese (Mi) Italia

www.snam.it — [email protected]

tel: +39 02 37037272- fax: +39 02 37037803


Economy & Finance

Financial Markets Review (February 2015)