Creating economic, social and environmental value

Financial and operational excellence

Milestones 2016
  • Two bond issues totalling €1.25Bn (€750Mn (annual coupon of 1.375% maturing in 12 years), €500Mn (annual coupon of 0.75% maturing in 10 years)).
  • At 31 December 2016, the average maturity of debt was 6.3 years and there is no significant maturity until 2022. 
  • Standard & Poor’s has maintained Enagás’ long term rating at “A-”, with stable prospects and an “Excellent” business risk profile.
  •  Renovation of the EFQM+500 certification.
  • Introduction of the Programme for continuous improvement (Kaizen). 
  • Launch of the 2016 Ingenia Business initiative and development of business models linked to the 2015 edition of Ingenia Business.

Lines of progress 2017

  • Global consolidation of GNL Quintero from 1 January 2017.
  • Profit growth after tax ~ + 12% (includes the effect of revaluing the cost of the first acquisition of GNL Quintero (2012) to the acquisition cost of acquisitions made in 2016 amounting to ~ €29Mn). 
  • BDI stand alone growth: ~ 5.0% (GNL Quintero pro forma consolidated under the equity method).
  • FFO/DN stand alone higher at 15% (pro forma ratio with GNL Quintero under the equity method).
  • Dividends coming from affiliates ~€120M
  •   Forecast investments ~ €650M.
  •   Dividend €1.46/share (+5%). 
  •   Cost of stand alone net debt ~2.4%.
  • Finalise the expansion of the Kaizen continuous improvement programme to all work centres and launch Kaizen project by project.

Enagás’ net profit rose to €417.2Mn, 1.1% over the previous year. This increase was mainly possible thanks to improved financial results.

At year-end 2016, EBITDA had reached €882.6Mn, 2% lower than reported in 2015, in line with market guidance.

BDI grew 1.1% thanks to the contribution of the latest acquisitions (TGP, Saggas and GNL Quintero) from their respective closures and also to a better evolution of the other subsidiaries compared to the initial budget, not forgetting the contribution of an additional quarter in 2016 (vs. 2015) of the 10% BBG share, 30% of Saggas and 50% of Swedegas (integrated in the second quarter in 2015). It includes the effect of the financial update of the equity together with the reversal to a positive GSP contribution (€31.4Mn) to date.

 

 

Información Económico Financiera enagas 2016
See the Financial
Information section on
the corporate website

In €Mn

2015

2016

% Variation

Total revenue

1,221.6

1,218.3

-0.3%

EBITDA

900.5

882.6

-2.0%

EBIT

602.0

610.5

1.4%

Net Profit

412.7

417.2

1.1%

Enagás adapted to the new context arising from the crisis by reducing external bank borrowings and replacing this with another type of funding, such as bonds. This enabled it to achieve a more diversified structure.

Net Debt (€MN)

Net Debt (€MN)

Leverage and liquidity

In €Mn

2015

2016

Net Debt/EBITDA (adjusted)(*)

4.5x   

 5.2x

FFO/Net Debt

16.4%

15%

Cost of debt

2.7%

2.4%

Liquidity

 €2.268Bn   

€2.409Bn      

(*) EBITDA adjusted by dividends received from subsidiaries.

Debt structure

Debt structure

The scope of Enagás’ Efficiency Plan includes expenses associated with infrastructures and the company’s general expenses, encompassing approximately 100% of its operating expenses.

The main goal of Enagás’ 2015-2017 Efficiency Plan is to maintain the profit margin in Operation and Maintenance activities using measures among which the following are the most significant:

  • Reduction of own consumption through the installation of compressors, with the resulting reduction of associated CO2 emissions. (See the chapter on ‘Climate change and energy efficiency’).
  • Boosting the self-generation of electricity. Enagás’ goal is to self-generate 35% of the energy it uses by 2020. (See the chapter on ‘Climate change and energy efficiency’). 
  • Maintenance based on criticality matrices, adapting the frequency of maintenance schedules according to the criticality of the equipment and its failure probability.
  • Improvement in the management of electrical contracting.

The average annual savings associated with the implementation of this plan is expected to be €6.5Mn (including the reduction of self-consumption).

Enagás holds ISO 9001:2008 certification for its processes of Technical Systems Management, Asset Management, Infrastructure Development and Information Systems Management. Furthermore, Enagás has SSAE 16 certification for its processes of Capacity Management and Viability Analysis of the System, and Security of Supply in the System/ Technical Management of Underground Storages of the System. 

Enagás is working on a continuous improvement programme based on Kaizen methodology to generate and promote a culture of continuous improvement within the organisation, aligning it with corporate strategy and values.

The improvement programme is based on the training of professionals and the enhancement of teamwork to implement a culture of continuous improvement and problem solving, focusing on process improvement and cost efficiency. It is thus structured in three phases:

  • Training and skills training to ensure the implementation of a philosophy of continuous improvement and sustainability for the programme.
  • Development and implementation of a culture of improvement in daily operations with a focus on problem solving.
  • Creation of multidisciplinary groups aimed at developing specific improvement projects focusing on efficiency and process improvement.

Throughout this year the programme’s performance within the company’s infrastructures, started the previous year, has been continued and covers all regasification plants and underground storage as well as four transport zones.

Enagás aims to adapt the business to new operational and technological models in line with trends deriving from Industry 4.0 and is immersed in a process of digital transformation. Our vision of said transformation is for a holistic and transversal approach to be applied to the company. 

A function has therefore been designed to lead the transformational framework and execute the organisational and cultural change that will be at its core. Enagás is thus working on identifying opportunities to optimise and improve people management through the use of new technologies, taking into account aspects such as generational diversity.

In addition, processes have been re-engineered to optimise workflows and information sharing for the support processes (travel management, expenses, digital press, etc.). 

On the other hand, initiatives are being set up whose aim is to achieve operational excellence of the activities that make up Enagás’ core business (development of mobility tools for maintenance and operation processes, improvements to cybersecurity, digital signature, etc.).

Lastly, the Ingenia Business programme and other innovative company initiatives are in line with the opportunities offered by digitalisation such as collaborative technologies.

Enagás is carrying out a detailed analysis of opportunities and working on the development of partnerships with universities in order to open lines of research and collaboration in different spheres. In this regard, in 2016, a sponsorship agreement was signed with the ICAI Chair for Connected Industry made up of industrial and technological companies, and whose aim is to facilitate the digital transformation of the Spanish industry.

Likewise, initiatives are being implemented in order to develop a vision and transversal objectives for the whole company in the medium term.