Eni announce strategic plan for 2023-2026
The Plan presented today builds on Eni’s track-record of operating and financial performance and focusses on:
– energy security and affordability through geographical and technological diversification;
– emissions reduction;
– leveraging technology for today and for breakthrough opportunities;
– delivering value for our shareholders.
Eni confirms Scope 1, 2 and 3 emissions reduction targets versus 2018: 35% by 2030; 80% by 2040; and net zero by 2050.
Upstream production is expected to grow by a 3-4% CAGR through 2026, then plateau to 2030. Gas share of production will rise to 60% by 2030. Upstream net zero Scope 1 + 2 target by 2030 is confirmed.
Eni is securing gas supplies for its customers via a more diversified, flexible and integrated portfolio, and it expects to grow contracted LNG to over 18 MTPA by 2026, double that of 2022. The Company is raising the profit outlook for its re-shaped GGP business.
Eni is accelerating its ambition in biorefining, raising the target for Eni Sustainable Mobility to over 3 MTPA capacity by 2025 and over 5 MTPA by 2030. Pro-forma EBIT guidance for Downstream is raised to reflect this better outlook in ESM and the performance improvement very evident across our R&M business in 2022. Versalis’ transformation into a fully specialized and sustainable chemical company will move it to sustained profitability in the Plan period.
Eni sees Plenitude renewable generating capacity growing to over 7 GW by 2026 and over 15 GW by 2030. The Company targets to more than double its charging points by 2026 and Plenitude’s EBITDA is also expected to rise by 3 times by that date versus 2022.
At Eni Plan scenario, the Company will generate CFFO before working capital of over €17 billion in 2023 and over €69 billion over the Plan, a 25% increase in 2026 versus 2023 in a constant 2023 scenario. This organically funds investment and enhanced shareholder distributions while maintaining leverage in a 10-20% range
Underlying capex in the plan is 15% higher (vs the previous plan) in USD terms mainly as a result of incorporating new or larger identified, high quality opportunities
Shareholder remuneration policy is simplified and enhanced with 25-30% of CFFO to be distributed in dividends and buybacks. The proposed 2023 dividend is raised by 7% to €0.94 per share, and share buyback set at €2.2bn.
“The Plan presented today confirms the strength and effectiveness of our strategy. In 2014 we undertook an industrial and financial transformation path which progressively enabled us to create value even in difficult scenarios, delivering security of supplies and environmental sustainability. We have been focussing our exploration and production strategy mainly on gas, leveraging our own production and diversifying our investments across different countries. This has enabled us to put in place our Plan aimed at replacing 20 billion cubic meters of Russian gas by 2025. We have been transforming our downstream platform and invested in technology to create and grow our transition businesses aiming at net zero Scope 1, 2 and 3 emissions. This enables us today to fully confirm our decarbonization targets despite the current energy security scenario and the need to respond to a strong demand for traditional sources. Today we can clearly outline how the Company will be in 2030: our Upstream operations will no longer produce net emissions; our hydrocarbon production will be composed mainly by gas; our biofuel capacity will exceed 5 million tonnes per year; our renewable energy capacity will be more than 15 GW. And our investments in the most revolutionary technology linked to the energy transition – the magnetic confinement fusion – will be about to result in the first industrial plant.
Finally, we have deeply strengthened the Company from a financial point of view through optimization and rationalization of expenditures, and this allows us today to present our strong financial goals: a significant CFFO generated both from our traditional activities and with the contribution of transition-related businesses; a satellite business model which allows us to enhance the value of our businesses while freeing up additional resources for investment in transition; and a very low debt level. Our financial robustness enables us today to create increasing value for our shareholders and to enhance the remuneration policy” Claudio Descalzi, Eni CEO
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