The final rush for strategic companies
The game of appointments in state-owned companies is getting into full swing. By April 3, the Government must name new top management, or renew appointments. From Enel to Eni, from Leonardo to Poste Italiane, up to Terna, Enav and Mps. But also at stake are Fs Group‘s subsidiaries (more than 20 billion NRRP funds under management) and by 2023 at least 70 expiring boards of directors, it is more than 600 seats.
The Premiere explained in private she will decide on Eni and Enel. In public, she said she would like for the first time a woman as CEO of a leading company, perhaps Terna (Giuseppina Di Foggia, Nokia Italia, and Lucia Morselli, former Ilva, are mentioned).
There are few certainties. Claudio Descalzi will be reappointed as CEO of Eni. In his first months in government, Descalzi has developed a trusting relationship with Meloni.
At Enel Francesco Starace seems to have his bags packed. In pole is Stefano Donnarumma, current CEO at Terna. In recent days he has been seen with Paolo Scaroni, former CEO of Enel and Eni (sponsored by FI), who could be appointed president. For the CEO, the Lega is pushing for a different solution that is Flavio Cattaneo (Italo).
Leonardo is perhaps the most delicate match. Alessandro Profumo is to be replaced, after years of managers from sectors outside the company’s industrial perimeters. At first physicist Roberto Cingolani, a Minister in the Draghi Government and an adviser to Meloni, seemed projected toward the CEO position. Now his odds seem to have fallen in favor of Lorenzo Mariani, manager of European missile manufacturer Mbda, also controlled by Leonardo. Mariani is backed by Defense Minister Guido Crosetto, and is part of the rationale for returning the company to a manager who knows the industry well. The discussion between the three parties will have in the coming hours a second step during which they will also involve Poste Italiane where Matteo Del Fante should be reappointed.
he new heads of Fs’s two operating companies, Rfi and Trenitalia, choices over which former CEO Mauro Moretti still has considerable influence will need to be found. The game begins with the renewal of the board of Mps, Italy’s fourth-largest bank awaiting a larger partner. Rumors assure that CEO Luigi Lovaglio should be reappointed.
Meloni and the complication of appointments
It is the most disputedhence Meloni’s decision: advocating the Leonardo dossier, displeasing everyone, and calling into question even his first choice. Cingolani (at the suggestion of Claudio Descalzi, Eni’s sole undisputed manager) could be offered an equally prestigious role. There is talk of leading Eni Plenitude. The name of Ambassador Pontecorvo would be a serious option for Meloni. Ambassadors are the virtuous model of Undersecretary Giovanbattista Fazzolari. Managers desired by Meloni must be “immunized from supranational vanities,” and ambassadors, traveling the world, again for Fazzolari, are the few who are inoculated.
In recent weeks, a new, unanticipated player entered and he is also an old player, perhaps the most skilled in this game of appointments. He is Luigi Bisignani, a man of relations and an old friend of Gianni Letta. Since Berlusconi officially appointed Letta, 87, to deal on behalf of Forza Italia, it is as if Bisignani also received the mandate.
Berlusconi insists only on one name. It is that of Paolo Scaroni, destined to lead Enel, but he is a most unwieldy presence for any CEO. Indeed, the chairman sets the agendas of the board of directors and can be a countervailing power to the CEO if only that power can be wielded.
Scaroni is also blamed for his past relations with Russia. For Enel it has always been written that Meloni wants Stefano Donnarumma, formerly CEO of Terna. He could thus remain at Terna while at Enel move an expert such as Luigi Ferraris, a former Terna CEO, and current Ferrovie executive.
The Lega, from the split, seems instead destined for two public owned companies in addition to the presidency of Mps. It should go to Nicola Maione, a former outgoing councilor. Salvini wants to promote Igor De Biasio, who has two positions, member of the Rai Board of Directors and CEO of AreExpo. These are two positions whose compatibility is being debated. The loss of one role may open the way for him in a public participate company, strong with a solid bond with Salvini. The real manager, however, whom the Lega prides itself on and who is competing for a large investee is Enrico Pazzali, president of the Fiera Milano Foundation, a friend of Attilio Fontana.
A treasure of appointments
Nearly 135 billion, about 22% of the entire stock market listing. That’s how much the capitalization of state-owned listed companies that are heading for the renewal of their top management and boards of directors amounts to. It starts on April 20, with Monte dei Paschi, Enav, and RaiWay, and closes by mid-May with Poste, Leonardo, Enel, Eni, and Terna. To date, the only manager who seems to have reappointment assured is Eni’s CEO Claudio Descalzi. For others, such as Enel’s Francesco Starace, there is talk of alternation with Terna’s Stefano Donnarumma, while for the post after Alessandro Profumo, at Leonardo, it would be a three-way race between former Minister Roberto Cingolani, helicopter chief Gian Piero Cutillo, and Mbda Italia’s CEO, Lorenzo Mariani. The latest news points to Rai‘s CEO, Carlo Fuortes, for the presidency of Poste, where there is now Maria Bianca Farina.
Including unlisted public owned companies and those that will have to renew only their board of auditors, there are 105 companies under the Ministry of Economy (19 directly controlled and 86 indirectly controlled) involved in the most anticipated game of the season. Drawing these conclusions there is the sixth edition of the CoMar report: there will be 142 corporate bodies to be reappointed, including as many as 94 boards of directors and 48 boards of auditors. It means removing, replacing, or confirming-re an army of 610 people, including 403 directors and 207 auditors. At the same round, three years ago, there were 550 seats to be filled. Growing numbers can be explained by the increase in state interventions.
By way of example, new companies have sprung up, such as Ita-Italia Trasporto Aereo, Holding Reti Autostradali, the National Strategic Pole, Dri d’Italia (in Invitalia, for the steel supply chain and the former Ilva redevelopment). Others have been added to follow the green transition, such as Green.It (Cdp with Eni) and Renovit (Cdp and Snam), while Infrastructure Milano Cortina 2020-2026 is functional for the Winter Olympic Games. Still, on the subject of big events, the newco Giubileo 2025 has been established, open to the participation of other companies as long as they are always an expression of the Mef.
Meloni and the doubts about Cattaneo
Claudio Descalzi hopes that the majority will identify a non-encumbering figure as Eni chairman. After Lucia Calvosa it may be another woman’s turn. Some mention Elisabetta Belloni, but she does not seem at all willing to move prematurely from the coordination of the intelligence services.
One of the key figures that could upset predictions, is Flavio Cattaneo. The well-informed claim that his heavyweight sponsors such as Ignazio La Russa and Francesco Gaetano Caltagirone have set their sights on him as Francesco Starace’s successor at Enel. His possibilities, however, have found opposition from Meloni. Meloni also believes that he is too close to a network that would range from Alessandro Daffina of Rothschild to Caltagirone, from Scaroni himself to foreign investment funds.
Fs’ CEO chosen by Draghi Luigi Ferraris is set to expire in 2024, and will not be changed. The Lega, however, will almost certainly name the new head of Rfi. Salvini has already met with “insiders” Vincenzo Macello and Umberto Lebruto. Experienced managers who are still in the Pioltello train disaster trial. In the meantime, the minister thinks of a top external figure and points to the number one of Trenitalia ( the name of Luigi Corradi is mentioned).
At Rai, Carlo Fuortes is still in the saddle, although some are certain that he will be replaced by the Roberto Sergio-Giampaolo Rossi duo as soon as Meloni finds him another suitable role (the superintendent of Milan’s La Scala Theater). While at Cassa Depositi e Prestiti the attack on the top management attempted a few months ago by Undersecretary Alessio Butti seems to have been shattered by Meloni. Palazzo Chigi will in all likelihood keep Dario Scannapieco in his role, hoping that the Draghian will be able to find the solution for the national fiber network game.
Net income at 5.4 billion euros, revenues, and investments grow
Despite the rather challenging historical context, Enel’s revenues, operating margin, and investments are growing, with a decisive advancement of the electrification and decarbonization process and a strong increase in new renewable capacity.
Enel Group revenues for 2022 were 140,517 million euros, an increase of 54,798 million euros (+63.9%) over 2021. EBITDA for 2022 amounted to 19,683 million euros, an increase of 473 million euros over 2021 (+2.5%). This is already an early example of a result above the Group’s guidance communicated to financial markets (of 19.0-19.6 billion euros).
Operating income amounted to 11,193 million euros, an increase of 3,642 million euros (+48.2%) compared to 2021, while net ordinary income amounted to 5,391 million euros, higher than the guidance communicated to the financial markets (of 5.0-5.3 billion euros). Also in line with strategic goals was net financial debt, which was 60,068 million euros. Investments increased to 14,347 million in 2022, +1,350 million over 2021 (+10.4%).
Eni pushing biofuels in Europe
If Germany suddenly refuses electric cars as the only technology on which to base the decarbonization process in the EU, the Italian Government with a letter that the Ministers of Transport, Matteo Salvini, Environment, Gilberto Pichetto Fratin, and Enterprise, Adolfo Urso, sent to Frans Timmermans, vice president of the European Commission and top manager of the Green Deal, asks for an exemption not only for e-fuels but also for biofuels.
Biofuels are liquid or gaseous energy carriers, suitable for use in motor vehicles, produced from biomass, i.e., from the waste and residues of agricultural and forestry activities and related processing (including plant and animal substances), as well as the biodegradable part of industrial and domestic wastes and effluents. Biofuels are considered a renewable resource, as their production is essentially based on raw materials that can regenerate and reproduce in a short time.
Italy, mainly thanks to Eni, is quite advanced in biofuel research and production. The Porto Marghera refinery was converted to bio in 2014, and the one in Gela in 2019. The plants convert used and fried vegetable oils, animal fats, and oils extracted from dedicated crops and not in competition with agricultural production into high-quality green fuel, Hvo (Hydrotreated Vegetable Oil). At the Livorno refinery, Eni produces biofuel for aircraft, Saf (Sustainable Aviation Fuel).
The Six-legged Dog aims to produce 2 million tons of biofuels per year in 2025 to 6 million per year in a decade. Mainly in Africa, currently in Kenya, Mozambique, and Congo, with large plantations called agri-hubs of oil crops. Recently, the first load of vegetable oil produced in the Makueni agri-hub arrived at the Gela biorefinery from Kenya. The goal is to cover 35% of Eni’s biorefinery supply by 2025. Just recently, distribution began at 50 Eni service stations – to later reach 150 outlets in Italy – of HVOlution, a biofuel that is produced from waste feedstocks and plant residues.
The Italian aerospace and defense group reported results from January 1 to December 31, 2022, approved by the Board of Directors chaired by Luciano Carta. Specifically, Leonardo reported a 58.5% increase in net income to 932 million. Revenues also increased by 4.8% to 14.7 billion, as did orders, at 17.3 billion (up 21%). In addition, the management of the company led by Alessandro Profumo announced financial estimates for 2023. The guidance for the current year includes orders at about 17 billion, revenues at 15-15.6 billion, EBITDA at 1.26-1.31 million, and debt at about 2.6 billion.
Atlantia becomes Mundys
Atlantia, the holding company controlled by the Benetton family, is changing its name and becoming Mundys. The announcement was made by Alessandro Benetton, chairman of Edizione, during the New Journey event dedicated to the company.
Mundys aims to become the world’s leading group in the infrastructure sector, investing in sustainability, innovation, and quality of passenger services. Mundys is present in 24 Countries where it manages the transit of 3 billion vehicles, 60 million airport passengers, and 7.5 million Telepass customers, as well as the traffic systems of more than 600 cities including London, Miami, Singapore, and Bogota each year.
The gas distribution company led by Stefano Venier closes 2022 with a positive net income of 1.1 billion, basically holding up with the year before. The 2022 results were rated overall better than expected by leading investment houses. The group owned by Cdp Reti (31%) reported total revenues of 3.1 billion (up 11.1% from 2021), driven by growth in the energy efficiency business. As for adjusted Ebitda, which gives the company’s profitability figure, it came in at 2.23 billion (-0.6%). Snam expects Italian storage to be at 55% at the end of March. At the end of February, storage was at 60% versus 40% in 2021 and 45% between 2017 and 2021. 2022 storage volumes were well above 2021 and the historical average.
Terna approves the 2023 Development Plan
Enabling the achievement of the European objectives of the “Fit-for-55” package, fostering the integration of renewable sources, developing interconnections with foreign countries, increasing the level of security and resilience of the electricity system, and investing in the digitization of the grid. These are the cornerstones of the 2023 Development Plan for the national transmission grid presented today by Terna: more than 21 billion euros of investment over the next 10 years, 17% more than the previous Plan. Calculating the entire life of the works included in this Development Plan, beyond the 10-year horizon, the total amount of investments will exceed 30 billion euros.
The main new feature introduced by the 2023 Development Plan is the Hypergrid grid, which will exploit High Voltage Direct Current (HVDC) power transmission technologies to achieve energy transition and security goals. In addition to the development work already planned, Terna has planned five new power backbones, functional for the integration of renewable capacity, with a total value of about €11 billion. This is a massive modernization of existing power lines on the Tyrrhenian and Adriatic backbones of the peninsula and to the islands, which includes new 500 kV submarine connections, an element, the latter, that represents a first for the company.
In the new Development Plan, which has been published every two years since this year, Terna has included more than 30 infrastructure projects.
National Strategic Hub: Lazio Administrative Court rejects TIM’s bid
The Lazio Regional Administrative Court has declared inadmissible the bid submitted by the Temporary Grouping of Companies led by TIM in the procedure for awarding, through a public-private partnership contract, the construction and management of the National Strategic Hub (PSN). This was decided by administrative judges in a ruling handed down as part of the appeal brought by Rti Fastweb-Aruba. The realization of the infrastructure constitutes one of the cornerstones of Mission 1 of the NRRP. It is one of the three key objectives in the “Cloud Italy Strategy.”
At the end of the procedure, Difesa Servizi awarded it to Rti Fastweb-Aruba; subsequently, however, Rti TIM declared that it was availing itself of the envisaged pre-emption, committing itself without reservation to fulfill its contractual obligations under the same conditions as those offered by the successful bidder.
The Tar focused on compliance with the requirements concerning the distance between the two pairs of ‘Data centers (DCs)’ provided by the order. “The offer of Rti TIM,” the judgment reads, “introduced an impermissible modification to what was prescribed by the procedure. At this point, TIM will appeal Tar’s ruling. The Consiglio di Stato could overturn the verdict.
The competitive process to buy Netco
Green light from TIM‘s board of directors for the competitive process to purchase Netco. This is the ‘non-binding offer submitted by the consortium formed by CdP Equity and Macquarie Infrastructure and Real Assets (Europe) Limited, acting on behalf of a group of investment funds managed or assisted by the Macquarie Group for the purchase of a constituent company to which the management and infrastructure perimeter of the fixed network, including the assets and activities of FiberCop, as well as the stake in Sparkle, would essentially belong. For the board, the offer, like the one submitted by KKR, “does not reflect the value of the asset and TIM’s expectations.” To allow the two bidders to submit their improved offers, the board mandated the CEO, Pietro Labriola, to initiate a regulated process, transmitting to both bidders, through their advisors, a process letter indicating the terms under which they will be given access to additional specific information elements, the same for both bidders; the forms through which each of them can submit by the deadline of April 18, 2023, a non-binding improved offer.