Integrated Annual Report 2018
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January

Naturgy issued Euros 850 million in 10-year bonds paying 1.5%, the proceeds from which were used to tender for Euros 916 million in bonds maturing between 2019 and 2023.

February

The Board of Directors of Naturgy appointed Mr Francisco Reynés Massanet to the post of Executive Chairman on 6 February 2018, following the resignations of Mr Isidro Fainé Casas from his role as Chairman of the Board of Directors, and of Mr Rafael Villaseca Marco from his position as Chief Executive Officer of the company. Mr Isidro Fainé was in turn made Honorary Chairman of Naturgy.

March

Naturgy, through subsidiary Global Power Generation (GPG), acquired two solar photovoltaic projects in Brazil in March 2018. The development of these projects, located in the state of Minas Gerais and with a total capacity of 83 MW, represented an investment of over Euros 95 million; they entered commercial operation on 12 December 2018.

On 19 March 2018, following approval by the competition authorities, a minority 20% stake in the company Holding de Negocios de Gas, S.A., which owns gas network assets in Spain, was sold to a consortium of long-term infrastructure investors comprising Allianz Capital Partners and Canada Pension Plan Investment Board for Euros 1.5 billion, resulting in a capital gain of Euros 1 billion.

May

In May, the 20.072% stake in share capital of Gas Natural SDG, S.A, belonging to Repsol, was sold to Rioja Bidco Shareholdings, S.L.U, a company owned by funds advised by CVC Capital Partners and Corporación Financiera Alba, S.A.

June

The Shareholders’ Meeting also approved the Strategic Plan2018-2022

Naturgy is launched, the group’s new brand. An international brand, adapted to global markets and which represents the values of the company’s transformation: simplicity, innovation, expertise and respect.

On 27 June 2018, the Shareholders’ Meeting approved the distribution of income consisting of allocating Euros 1,001 million out of 2017 income to dividends. That is a dividend of Euros 1 per share, of which Euros 0.33 per share was paid as an interim dividend in cash on 27 September 2017 and the remaining Euros 0.67 per share, also in cash, on 5 July 2018.

The General Meeting of Shareholders also approved reducing the number of members of the Board of Directors from 17 to 12. It also approved a new composition of the board, reflecting the shareholding restructure caused by the exit of Repsol and the entry of CVC and Corporación Financiera Alba into the share ownership.

September

In September 2018, Naturgy concluded the agreement to renew and extend the gas supply contract with Sonatrach to 2030 under better terms.

On 3 September 2018, Unión Fenosa Gas (UFG), the company that owns the Damietta plant in Egypt and is owned 50% by Naturgy, received an arbitration award in its favour from the International Centre for Settlement of Investment Disputes (ICSID), an agency of the World Bank, resolving the dispute presented in 2014; the arbitrators ruled against the Arab Republic of Egypt for failure to supply to UFG’s liquefaction facilities in Damietta.

On 11 September 2018, the Government of Victoria in Australia announced the award to GPG of a total of 180 MW of power generating capacity in a wind project located approximately 150 km from the city of Melbourne.

In September 2018, the Dow Jones Sustainability Index (DJSI) ranked Naturgy as the world leader in the Gas Utilities sector for the second consecutive year; the company was also certified as world leader in the multi-utilities segment by FTSE4GOOD.

October

The Solidarity Fund for Energy Rehabilitation was launched in October 2018; the funds were allocated to energy refurbishment of dwellings selected by NGOs with which the company has cooperation agreements.

December

On 6 December 2018, Compañía General de Electricidad, S.A., a subsidiary of Naturgy Energy Group, S.A. in Chile, completed a bond issue for a total of 5 million Unidades de Fomento (UF), equivalent to approximately Euros 176 million.

Financial performance

Revenue
Euros million
24,339
+4.9% vs. 2017
Ordinary net profit
Euros million
1,245
+57% vs. 2017
Capex
Euros million
2,321
+30.2% vs. 2017
Net financial debt (31/12)
Euros million
13,667
-9.8% vs. 2017
Free cash flow after minorities
Euros million
3,054
Investments
70%
in growth
Ordinary Ebitda
Euros million
4,413
+12% vs. 2017
Ordinary Ebitda by geography %


Ordinary Ebitda by geography

Ordinary Ebitda by business %

Ordinary Ebitda by business

Capital expenditure by business %

Capital expenditure by business

Leverage %
Leverage %
Ebitda / Net debt cost
Ebitda / Net debt cost
Net financial debt / Ebitda
Net financial debt / Ebitda
Net financial debt / Ebitda (IFRS 16)
Net financial debt / Ebitda (IFRS 16)
Share price at 31/12 in euros
Share price at 31/12
Market capitalisation at 31/12  Euros million
Market capitalisation at 31/12
Dividend paid in euros
Dividend paid
Dividend distributed per share in euros
Dividend distributed per share
Ordinary earnings per share in euros
1.25
Total No. of sharesen miles
1,000,689
1,000,689 vs. 2017

Operational performance

Distribution
Gas distribution
(GWh)

Spain: 197,313
Latin America: 251,946
Total: 449,259
Gas distribution network
(km)

Spain: 56,124
Latin America: 63,874
Total: 119,999
Gas distribution connections
(in thousands)

Spain: 5,403
Latin America: 5,202
Total: 10,605
Electricity distribution
(GWh)

Spain: 32,698
Latin America: 22,222
Total: 54,920
Electricity distribution network (km)

Spain: 113,567
Latin America: 101,965
Total: 215,532
Electricity connection points
(in thousands)

Spain: 3,740
Latin America: 3,829
Total: 7,569
Commercialisation
Gas commercialisation
(GWh)

Gas commercialisation

Electricity commercialisation
(GWh)
35,437
35,640 in 2017
Electricity generation
Total installed capacity (MW)
15.572
Installed capacity in Spain 12,479
Installed capacity in rest of world 3,093
Total net production (GWh)
46,658
Net production in Spain 28,307
Net production in rest of world 18,351

Environmental and social performance

Environment
Emission factor
(tCO2 /GWh)
342
388 in 2017
GHG emissions (M tCO2 eq)1
18.3
20.5 in 2017
Emissions-free installed capacity
(%)
27.5
26.4 in 2017
Net productionfree of emissions (%)
24.9
19.6 in 2017

1. GHG: greenhouse gases, measured as tCO2 equivalent (scope 1).

Health and safety
No. of accidents leading to days lost

No. of accidents leading to days lost

Interest in people
No. of employees2
12,700
14,718 in 2017

2. Does not include the number of employees at discontinued operations (786 persons in 2018 and 2,053 persons in 2017).

69%
men
71% en 2017
69% hombres
N.º de empleados al cierre del ejercicio 12.700
31% mujeres
31%
women
29% in 2017
Training hours per employee
49.9
38.4 in 2017
Commitment to society and integrity
Economic value distributed
(Euros million)
23,413
22.402 en 2017
No. of notifications received by the Ethics Committee
199
141 in 2017

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