“We are embracing the challenges created by the energy transition with a distinctive and accretive strategy creating value while addressing energy security and affordability needs, and decarbonization goals. We are growing our cashflows significantly while also differentiating our sources of cash and lowering our risks, expanding into new areas of opportunity linked to the energy transition. To support this we are executing on our deep portfolio in a disciplined manner, balancing investment with enhanced shareholder returns. As a result, we are developing an even more profitable, well diversified and more resilient Eni, while also enhancing shareholder distributions. Ultimately, it’s evident that the energy Transition can only become real if it creates material and sustainable returns and enables new forms of profitable business. And that is what we are doing.
Our upstream businesses continue to grow and generate strong cashflow with CFFO per barrel expected to rise by more than 30% over the Plan. Natural gas will continue expanding its share of production and we remain focused on capturing full margin from our mainly equity sourced midstream activities. E&P is highly differentiated by the continuing success of our leading exploration business and how this integrates into a distinctive fast-track development approach delivering competitive growth and securing value. Transition related businesses are a significant opportunity and will become increasingly important delivering even greater growth for Eni both in terms of activity and earnings. Together, Enilive, Plenitude, CCS and our Novamont/biochemistry activities represent a portfolio of business solutions to address customer needs to cut emissions. As these become increasingly important contributors to Eni’s cashflows they will diversify and meaningfully enhance our value. Enilive and Plenitude have established themselves as important businesses for us while CCS and biochemical, with Novamont, are two further segments under rapid maturation where we have a leadership position. Each of the Transition businesses are ideal candidates for our satellite model, reducing the capital absorption and highlighting their differentiated value.
Our CFFO will grow by 30% over the 4-year Plan with Plenitude and Enilive accounting for over 20% of this growth. At the end of the Plan Eni will be larger and more profitable with a group of competitively positioned businesses offering continued further growth and highly attractive returns. Our development is supported by disciplined investment where we have been able to reduce spend in the next 4 years by €2 billion, and net capex is 20% lower than last year’s Plan, thanks also to a raised net M&A contribution of €8 billion, reflecting the depth and quality of our portfolio and the further development of the Satellite model. All economic and financial KPIs demonstrate progress and robustness with a compelling trend of value growth, upside leverage and resilient downside. This has enabled us to make substantial enhancements to our distribution policy. We are raising our payout commitment, the 2024 dividend associated with it, and materially increasing the upside participation. Our distribution policy is highly competitive, implying at the current share price a distribution yield of 9%”.
Claudio Descalzi, Eni CEO
Rome, 14 March 2024 – Claudio Descalzi, Chief Executive Officer of Eni, today presented the Company’s Strategic Plan for 2024-2027.
Eni’s distinctive strategy addresses the challenges and maximises the opportunities presented by the energy market. It is delivering full value from its traditional businesses and skills, and at the same time fast-tracking development of new, high-return, high growth activities related to energy transition. This balanced approach of delivering affordable, secure and sustainable energy supply to Eni’s customers also provides the opportunity to generate competitive growth and returns for the Company and its investors.
In Natural Resources, Eni will continue to leverage its leading exploration business and secure and enhance value in the Upstream through its differentiated fast-track development approach, while continuing to reduce operated emissions. The gas component in production will continue to grow and GGP will help in its commercialization, ensuring Eni captures the full available margin. Carbon capture and storage, in which Eni has a leading position, will emerge as an important new Transition business during the Plan with significant growth beyond 2027.
In Energy Evolution, Eni sees material opportunities to grow both activity and earnings from new forms of energy. Plenitude and Enilive are examples of how Eni can build scale in Transition businesses with high growth rates and attractive returns. They will contribute to a transformation in the overall scale, diversification and resilience of the Eni model.
Business performance improvement and efficiency measures will also play an important role in Eni’s strategy. Versalis will be restructured and transformed to return to sustainable profitability while the Company expects to benefit from efficiency and simplification initiatives in its corporate structure.
With this notable operational progress, Eni will also deliver leading operating cashflow growth from an increasingly high quality of business. This will be allied to disciplined capital investment and a greater level of portfolio activity both of which result from the depth of the current opportunity set. Value creation and capital efficiency will be highlighted further by the progress Eni expects to make in the investment of aligned capital into its Satellites, and supported by a robust financial framework.