2. Vito Gamberale
2
TABLE OF CONTENTS
– Infrastructure networks in Italy Pg. 3
– F2i and the development of networks and industries Pg. 17
o Gas Pg. 24
o Water Pg. 31
o Renewables Pg. 35
o Airports Pg. 40
o TLC Pg. 45
o Highways Pg. 51
o Development of new industries Pg. 55
– Conclusions Pg. 59
4. Vito Gamberale
4
Infrastructure networks in Italy
●
Industry services offered to citizens inevitably imply the concept of
network.
●
Networks are necessary to reach the users in any location at any time, if
possible.
●
There are various types of networks and «networking companies»:
– infrastructures: for transportation (ports, airports, highways, railways,
etc.), energy (power, gas, district heating, etc.), supply/disposal (water,
sewage, waste, etc.), technology (telephone, internet, TV, satellite networks,
etc.).
– services (these usually make use of the infrastructure networks): mail,
logistics (transportation of people, goods, etc.), commercial/industrial
(distribution, supply chains, etc.).
5. Vito Gamberale
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Infrastructure networks in Italy
●
Networks of any kind are built on nodes and branches that link them
to each other.
●
In order for a network to be effective and efficient, it is necessary that:
– single nodes are functional: not only do unnecessary nodes prevent
improvement of the network performance, but they also generate additional
costs that lead to diseconomies
– branches link nodes rapidly and effectively, otherwise some nodes,
including important ones, could result in being inadequately connected.
●
As for infrastructure networks, today the representations of two
examples of European, and maybe worldwide, excellence are here:
highspeed railway network and power distribution network. Both are
managed by «national champions» that merge service, development
and profit!
6. Vito Gamberale
6
Infrastructure networks in Italy
●
Let’s focus on infrastructure networks, the area in which I operate. In Italy
there are still some critical situations, as some networks are
characterised today by:
– small nodes, that sometimes outnumber demand (e.g. airports)
and sometimes cannot fully supply demand (e.g. waste to
energy plants)
– a lack of modern and efficient branches (e.g. highways,
telecommunication networks).
7. Vito Gamberale
7
Infrastructure networks in Italy
Airports
– Thanks to 33 airports of
national/regional relevance,1
Italy is the first European
country for airport density on
the territory…
Regional/national airport density (n. of
airports/100,000 km2 - 2011)
1Airports with over 100,000 passengers/year.
Average number of passengers per airport – in
millions
(airports with over 100,000 passengers/year - 2011)
Source: Assaeroporti and the main airport associations
of the represented European countries.
– …these airports are usually small
compared to those of major
European countries…
4.50
9.01
3.54
6.18
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Italy Germany France Spain
11
6
8
7
0
2
4
6
8
10
12
Italy Germany France Spain
8. Vito Gamberale
8
Infrastructure networks in Italy
Airports
– …the gap widens if we consider the average traffic in the biggest
airports (>1 mil passengers/year):
Average number of passengers per airport –
in millions (airports with over 100,000
passengers/year – 2011)
Source: Assaeroporti and the main airport associations
of the represented European countries.
6.26
10.89
9.01
8.30
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Italy Germany France Spain
9. Vito Gamberale
9
− Italy still has few operating plants
compared to main European
countries…
− …and these plants are usually very
small.
Operating WTE plants
WTE plants average capacity
(thousands of tons of disposed solid urban
waste/year)
Infrastructure networks in Italy
Waste to energy plants
52
70
130
0
20
40
60
80
100
120
140
Italy Germany France
100
429
154
0
50
100
150
200
250
300
350
400
450
Italy Germany France
10. Vito Gamberale
10
− Given an average of 1kg/inhabitant of waste production per day, Germany and
France could dispose of almost their entire waste production with waste to energy
plants. Italy just one-fourth of it!!
●
The lack of WTE plants makes Italy, of all big European countries,
the country that most resorts to landfills for waste disposal (over
50% of its total solid urban waste production)!
Infrastructure networks in Italy
Waste to energy plants
WTE capacity per inhabitant
(kg/inhabitant/year)
86
367
309
0
50
100
150
200
250
300
350
400
Italy Germany France
11. Vito Gamberale
11
– Italy’s highway extension, compared to population, is much below the
European average:
European highway network – Density per inhabitant
(network km per million inhabitants)
Average = 179 km/mil inhabitants
Data: CIA The World Factbook 2010
●
This shows that Italy needs to develop over 4,000 km of new
highways to match the European average.
Infrastructure networks in Italy
Highways
111
156 166
328
-
50
100
150
200
250
300
350
Itlay Germany France Spain
12. Vito Gamberale
12
– Italy (excluding Milan, the best cabled city in Europe thanks to
Metroweb) is placed in the lower ranks in terms of broad band network
penetration (>1Mbit/s)…
Infrastructure networks in Italy
TLC networks
Source: Eurostat
23%
26%
41%
49%
49%
50%
51%
52%
54%
54%
54%
57%
57%
58%
61%
62%
64%
64%
67%
69%
70%
70%
70%
75%
76%
80%
80%
83%
0% 20% 40% 60% 80% 100%
Romania
Bulgaria
Greece
Slovakia
Italy
Portugal
Cyprus
Hungary
Lithuania
Czech Rep.
Latvia
Poland
Spain
Ireland
Average
Slovenia
Austria
Estonia
France
Malta
Luxembourg
UK
Belgium
Germany
Finnland
Netherlands
Denmark
Sweden
% of homes connected to Broad Band networks in Europe
(Dec. 2010)
13. Vito Gamberale
13
– …and average download speed is among the lowest of the most
developed countries:
Infrastructure networks in Italy
TLC networks
Mbit/s
Korea
Sweden
Netherlands
Switzerland
Taiwan
Denmark
Belgium
Norway
Portugal
Germany
Japan
France
USA
UK
Canada
Russia
Spain
Australia
Poland
Turkey
China
Brazil
Greece
Italy
Mexico
Argentina
SouthAfrica
India
Indonesia
Egypt
14. Vito Gamberale
14
Infrastructure networks in Italy
Gas distribution
●
Besides the examples presented above, another widespread feature
was the extremely limited dimension of the network operators for
local public services, that are characterised by low concentration and,
therefore, by small investments to provide a strictly standardised,
innovative and quality service.
●
Some examples: the gas distribution sector, with over 250 operators,
whose rationalisation F2i is contributing to (see later)…
Over 250 operators
22,6%
17,0%
6,5% 6,5% 6,1%
3,1%
2,3%
1,7%
F2i
Reti
Italia
23.1%
17.3%
6.5% 6.1% 5.9%
3.2%
2.3%
2.1%
ERG
10.1
%
2iG
3.2%
G6
4,0%
15. Vito Gamberale
15
Infrastructure networks in Italy
Water system
●
…and the water system, also characterised by limited concentration because of a
local (municipality/province) outreach of its managing companies:
15
MdA
RIE
Others1
342
95
125
122
Data from:
BCG
Data from: BCG
ITALY SPAIN FRANCE
First 3
operators
25.8%
Others
74.2%
Others
65.0%
Others
38.0% Others
30.0%
First 3
operators
35.0%
First 3
operators
62.0%
First 3
operators
70.0%
LISTED MULTI-UTILITY COMPANIES BIG MUNICIPALISED COMPANIES
About 3,000
other
operators
Market
share
1. Other minor subsidiaries: SAP, AM Ter, Idrotigullio, Acos and Asp (Piedmont), ASA Livorno (Monza), Astea (Marche), Aquenna (Sicily)
29.5%
24.3%
46.2%
16. Vito Gamberale
16
Infrastructure networks in Italy
●
Therefore, overall, Italy is characterised by an inefficient management of
some infrastructure networks, which determines a gap with Italy’s most
direct competitors in Europe (Germany, France, as well as Spain).
●
This gap has of course negative effects on other industry sectors as
well, for which infrastructures represent a connective tissue.
●
I developed my industrial expertise inside of big companies. This makes me
believe that infrastructures in Italy need big, credible and financially
solid entities in each sector, operating at a national level and capable of
providing significant investments to develop and innovate the
networks.
●
The government can no longer play this role nowadays because of a
lack of public financing that, in the past, was the engine of infrastructure
development. An efficient management of infrastructure can therefore
only be achieved through private financing, as long as this source of
funding remains healthy and non-speculative.
●
These are exactly the inputs that brought the concept of F2i, a
private, yet institutional fund, which can aggregate existing
infrastructures in industries using the funds from their asset
management to allow for their development.
18. Vito Gamberale
18
– Thanks to a fundraising of 1,852 mil€, F2i is the biggest fund operating in
Italy and counts among the biggest country infrastructure fund
worldwide.
– F2i was created as a private, yet institutional tool by high standing
sponsors, who contributed to the establishment of the Fund’s solid
reputation:
the government, through CDP
major Italian banks (Unicredit, Intesa SanPaolo)
an important international bank (Merrill Lynch – BoA)
the networks of former banking foundations and private welfare
funds
life insurance companies and pension funds.
F2i and the development of networks and industries
19. Vito Gamberale
31.7 mil € (1.9%)
26.8 mil € (1.6%)
19
F2i created 6 industries, reunited in a structured group, committing over
1,670 mil€ (90% of total fundraising).
1,668.1 mil €
GAS
RENEWABLES
TRANSPORTATION
WATER
AIRPORTS
TLC
Committed
436.4 mil € (26.2%)
272.9 mil € (16.4%)
129.5 mil € (7.8%)
489.2 mil € (29.3%)
228.1 mil € (13.7%)
53.5 mil € (3.2%)
Investments currently in the portfolio
+ Dismissions
+ Fund management costs
= COMMITTED TOTAL
F2i and the development of networks and industries
75% 85.1%
100%
100%
100% 40%
40%
100% 70%
29.8%
87.5% 61.4%
15.7%
100%
49.8%
26.3%
Water branch
Parma
Sasternet
F2i TLC Metroweb
Milan and Brescia
projects
Infracis
Alerion
CleanPower
F2i Renewable
Resources
HFV
F2i Airports GESAC
SEA
F2i
Reti Italia
ENEL
Rete Gas
2iGas
G6 Rete Gas
Mediterranea
delle Acque
F2i Rete
Idrica Italiana
1,609.6 mil € (96.5%)
20. Vito Gamberale
20
– As mentioned, some sectors in Italy are very fragmented and also
characterised by a localistic management approach.
– Many infrastructure assets have been created and managed according to
the (often political) needs of the local entities in which they are set, far
from a global vision of strategic network for a «country economic system».
– This is why many sectors are still very fragmented today, lacking a
reference «national champion» (following for example Veolia or GdF’s
example in France) and can hardly provide an adequate service and
operate on a larger number of international markets.
– Without a national strategy for infrastructure, the other countries’ «national
champions» (E.On, GdF, EdF, etc.) could acquire important Italian assets.
– To date the concepts of «network» and «industry» are still missing in
the various sectors.
F2i and the development of networks and industries
21. Vito Gamberale
2i Gas (formerly
E.On Rete)
21
ENEL Rete Gas
Alerion
HFV
Infracis
Mediterranea delle
Acque
Parma Water System
GESAC
SEA
Metroweb
Moon and Link Projects
SasterNet
GAS
RENEWABLES
HIGHWAYS
WATER
AIRPORTS
TLC
F2i acts as a true «public company»: each project develops with the
objective to create an industry within a specific sector, fostering
cooperation among subsidiaries and the integration of the managed
infrastructure networks:
F2i and the development of networks and industries
Objective: to represent an important independent manager of gas distribution
networks and to act as an aggregating entity in a currently strengthening
sector. Foresees independence between sales and distribution.
Objective: to develop two independent entities with authoritative
shareholders, managers and management. Today the renewable energy
sector is afflicted by contradicting regulations that prevent its future
development in Italy.
Objective: to access the closed sector of highways as reference
stakeholder for companies with extremely fragmented public
shareholders.
Objective: to create a «national champion» in a sector crucial to Italy,
which requires great investments to modernise the existing plants,
despite the demagogy created by the referendum in 2011.
Objective: to create an aggregation focus in a strongly fragmented
sector, characterised by a distorting and worrisome «low-cost»
predominance, mainly publicly-owned, with no specific strategy.
Objective: to facilitate the development of optic fibre in the most
populated and developed areas of Italy.
G6 Rete Gas
22. Vito Gamberale
F2i and the development of networks and industries
22
− Within four years, F2i managed to offer a new business model for
infrastructures in Italy by creating a structured group of companies
and company industries, each representing a benchmark in their
respective sector.
− The companies where F2i holds the share majority or plays an important
role in their governance, registered in 20111:
− aggregated turnover: 1,530 mil €
− EBITDA: 630 mil€ (EBITDA margin: 41%)
− employees: 8,130
− investments: 583 mil € (91% EBITDA)
1Aggregated closing data 2011. Referred to: ERG, 2i Gas, G6 Rete, Alerion CleanPower, HFV, Mediterranea delle
Acque, GESAC, SEA, Metroweb.
●
In 2011, F2i subsidiaries have invested over 90% of their EBITDA.
●
No infrastructure system invests such a high portion of their
EBITDA!
23. Vito Gamberale
F2i and the development of networks and industries
23
− Thanks to F2i, important assets managed by foreign companies have
returned, together with their cash flows, under Italian control:
●
E.On Rete Gas
− Gesac
− G6 Rete
− Metroweb
25. Vito Gamberale
F2i and the development of networks and industries
25
GAS
− F2i is in the gas distribution sector with the F2i Reti Italia Group,
generated through the acquisition of ENEL Rete Gas (2009), E.On Rete
(today 2i Gas ─ 2010) and, recently, of G6 (formerly GdF Group – 2011):
Enel Rete Gas
F2i Reti Italia
2i Gas*
14.9%
85.1%
100%
75% 25%
Managed by F2i since April 2011
In the future,
these three
companies will
merge in a
single
operational
centre
G6
100%
Managed by F2i since
September 2011
* Formerly E.On Rete
1Pro-forma consolidated data (2i
Gas and G6 are included on a 12
month basis), net of IFRIC 12
principle effects and extraordinary
gains and losses.
• Rab (mil €): 2,684
• Proceeds (mil €): 6051
• EBITDA (mil €): 3261 (54%)
• Investments (mil €): 189
• Employees (#): 2,112
• Customers (#): 3,820,000
• Managed network (km):
56,833
• Concessions (#): 1,970
F2i Reti Italia
54%
of the EBITDA
26. Vito Gamberale
F2i and the development of networks and industries
26
GAS
Capillary presence of F2i Reti Italia
on the territory
F2i Reti Italia
− By aggregating three important
networks, F2i Reti Italia
became, after just two years,
the second biggest national
player for market share in a still
very partitioned sector (over 250
operators).
Municipalities with Enel Rete Gas
Municipalities with E.on
Municipalities with G6
27. Vito Gamberale
F2i and the development of networks and industries
27
GAS
− The group dimensions allow significant investments that favour
development, innovation, efficiency and safety of the network:
Investments mil €
ERG + + +
189
93
108
54% of the
EBITDA
Other operators ~47
F21 Reti Italia
Group
~49
Benchmark €/customer
Others
Transparency, quality
and safety
Growth
28. Vito Gamberale
F2i and the development of networks and industries
28
− The absence of conflicts of interest allows for transparency (particularly
as to measurments) and efficiency towards customers:GAS
Inspected network (%) Actual average time for assistance
Source: AEEG
Year: 2010
AEEG1 request
~30’
F21 Reti Italia
Group
60’
Average
in Italy:
55%
1. Authority for Electricity and Gas.
78%
77%
63%
57%
54%
41%
36%
29%
Enel Rete Gas
Hera
A2A
Iren
G6 Rete Gas
Eni (Italgas)
E.On Rete
Toscana Energia
29. Vito Gamberale
F2i and the development of networks and industries
29
Incentives from AEEG for safety recovery(1) (k€)
(1) Includes incentives distributed during 2010 per number of odorisation measurements and dispersion in the network.
50%
22%
12%
2%
14%
% incentives
compared to total
% market
share
Others
5/30/135/30/13 5/30/13 17%
23%
2%
6%
52%
− The investment commitment creates a quality service, recognised and
awarded by the gas authority!GAS
844
114
696
1.314
273
30. Vito Gamberale
F2i and the development of networks and industries
30
− F2i Reti Italia Group represented the main innovation in the gas
distribution sector in 2000: the group fostered and guided the
concentration process of the market.
− The group’s acquisitions could bring back in Italy strategic
networks previously controlled by foreign companies.
− The presence of a big independent operator, which can rely on
solid investors, brings actual significant benefits to the gas
sector, by promoting efficiency and technological development to
the network.
− F2i Reti Italia aims to consolidate its role as a big independent
operator in gas distribution, capable of representing a safety,
transparency and efficiency benchmark for the authorities and
the entire sector.
GAS
32. Vito Gamberale
F2i and the development of networks and industries
32
WATER
− F2i approached the water system with the acquisition of 40% of
Mediterranea delle Acque (MdA) in 2010.
− The company manages the integrated water system of both municipality
and province of Genoa; it delivers water to about 875,000 inhabitants.
− It reports to the Iren Group, a multi-utility group in Genoa, Turin, Parma
and Piacenza, born from the merge of Iride and Enìa.
− Thanks to its long water network
of over 2,500 km and its long
sewage and depuration network
of 1,600 km, MdA delivers to the
network about 95 mil m3 of
drinkable water.
− Its current area plan includes
about 700 mil € of investments,
of which 600 mil € still to be
accomplished.
− MdA employs about 415 people.
100% 100%
60% 40%
49% 66.50%
IREN SpA
IREN Acqua e Gas SpA
MdA
F2i
F2i Rete Idrica Italiana
AM.TER. IDRO-TIGULLIO
33. Vito Gamberale
F2i and the development of networks and industries
33
WATER
− Following MdA’s successful case, F2i and Iren are currently and
progressively assigning the water activities of the Group to MdA in the
Emilia Romagna region (provinces of Piacenza, Reggio Emilia and
Parma).
− This operation rationale is to dimensionally increase MdA following, for
instance, a geographical proximity pattern.
− MdA’s dimensions (turnover and
EBITDA in 2011 were,
respectively, about 130 mil €
and 48.5 mil €) may actually
double at the completion of
the assignment.
− This operation will develop in
three different steps: each
will focus on assigning
activities in each of the three
provinces. Based on the
political opportunities
available, both partners
decided to start in the
province of Parma (this first
step – currently facing
opposition by the Water
System Agency of the Emilia
Water network Emilia
Romagna region
34. Vito Gamberale
F2i and the development of networks and industries
34
The objectives of F2i’s operations are:
− access a strategically crucial sector in Italy that requires important
investments and bringing fresh financial resources to develop
the managed assest
− create a partnership with IREN, the major operator in the utility
sector in Italy. This partnership scored a positive result with the MdA
operation and is currently further developing through the aggregation
of the IREN Group’s water system assets in the Emilia Romagna
Region
− use the growth and consolidation opportunities of a
fragmented sector, creating a «national champion».
To achieve this, F2i will operate on new initiatives with the objective
to aggregate some of the major national entities of this sector.
WATER
36. Vito Gamberale
F2i and the development of networks and industries
36
RENEWABLES
− F2i accomplished one of its first actions of investment in the renewables
sector: Alerion CleanPower and HFV.
− F2i accessed this sector believing and following the opening of the
various governments towards renewable energy. F2i’s development
plans included a 7-fold increase of the fotovoltaic capacity by 2016
compared to 20101 and doubling the eolic capacity (in 2020 vs. 2010).
− Such plans however cannot currently find adequate support and have,
de facto, been stopped by new law regulations on the subject.
Evolution of the Italian capacity and development objectives by 2016 (fotovoltaic) and 2020 (eolic)
according to PANER and its updates
Fotovoltaic Eolic
12010 is a benchmark year for the National Action Plan for Renewable Energies (PANER) of the Italian Government.
690 797 913
1.255
1.718
2.123
2.726
3.736
4.850
5.814
6.878
12.680
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2020
37. Vito Gamberale
F2i and the development of networks and industries
37
RENEWABLES
− Alerion CleanPower
o Listed at the Milan Stock Exchange, Alerion operates since 2003 as an
investment company in turn-around operations in different sectors. In 2004
the company accessed the renewables sector, which has become today its
core business.
o This is the first greenfield investment made by F2i (agreed in March 2008),
which makes it major partner holding 15% in the framework of a trade union
agreement.
o Alerion has over 250 MW of operating resources (95% eolic) in 15 plants
(5 in Puglia, 4 in Sicily, 3 in Campania, 1 in Molise, 1 in Lazio, 1 in Bulgaria).
o Its plant portfolio includes about 100 authorised MW (in Romania). This sets
Alerion among the biggest 10 operators in the Italian sector of
renewables.
o Alerion employs about 100 employees and has invested over 500 mil €,
most of which in central and southern Italy.
o Thanks to Alerion, F2i accessed the eolic sector as an independent
operator with development potential while remaining a listed company.
o In Italy the company’s actions are extremely limited by recent
governmental regulations on the eolic sector. In view of these new market
conditions, the government should now promote and foster the
concentration of this sector in order to allow for operators of sufficient
dimension to be able to compete both in Italy and abroad.
38. Vito Gamberale
F2i and the development of networks and industries
38
RENEWABLES
− HFV
o Holding FotoVoltaica SpA (HFV) is a joint venture, born in 2009, of F2i
and the Portuguese investment company Novenergia II (institutional fund
specialised in renewable energies) with the objective to acquire fotovoltaic
plants and projects.
o The objective of HFV is to build and manage fotovoltaic plants by 2012 for
about 100 MW investing about 350 mil €.
o To date the HFV portfolio includes already operating MW, 95% of which
have been installed in the southern regions of Italy; after just two years the
company is one of the five biggest players on the market.
o The operating plants are distributed as follows:
o 12 ground plants in Puglia (9), Molise, Lazio and Sicily
o 5 plants in agriculture greenhouses in Calabria
o 1 roof plant in Emilia-Romagna.
o HFV employs about 25 people, including hired employees and technicians
that are responsible for the construction site project management and plant
maintenance.
o Management efficiency and the resources made available by the
shareholders allows HFV to reach its objectives despite the numerous
unfavourable regulations of the past three years in this sector.
39. Vito Gamberale
F2i and the development of networks and industries
39
F2i accessed the renewables sector with the objective to:
− foster the development of its subsidiaries, making them
independent first-level players both in Italy and Europe
− involve Italy’s depressed areas in this particular sector of
technical innovation, creating jobs, particularly for young
people.
− F2i’s strong commitment unfortunately clashed with ill-
conceived governmental measures in this sector:
o in the fotovoltaic industry, the regulations changed four times, in a
timespan of over just three years. The current rates represent ¼ of the 2009
rates, when HFV was founded1
o in the eolic industry, the current rates (from 90 to 125 €/MWh vs. 180
€/MWh in force at the time when Alerion was acquired) virtually obstruct new
investments, also in view of the average wind in Italy (<2,000 heq/y, vs.
2,200-2,500 in other big European countries).
RENEWABLES
1 For plants with capacity between 1 and 5 MW the planned rate in January 2013 will be 113 €/MWh vs. 360 €/MWh
+ EE cost as planned in the second Energy Account.
41. Vito Gamberale
F2i and the development of networks and industries
41
− At the end of 2010 F2i accessed the airport sector by acquiring 70% of
Gesac, the company managing the Naples airport, Capodichino, thanks
to a concession expiring in 2043.
− Gesac was founded in 1980 through the input of the Naples Municipality
and Province, and by Alitalia. In 1997, following the privatisation process,
the public bodies sold a participation of 70% to the UK Group BAA (later
purchased by the Spanish Group Ferrovial).
− The airbase spreads out on a 2.8 km2 ground with a 2,628 m long and
45 m large runway, including 27 airplane parking lots. It includes 56 check-
in desks and 15 gates.
− In recent years, the company promoted a significant investment plan to
develop the airport infrastructures (over 190 mil € of cumulated Capex
between 1998 and 2009, compared to net cumulated gains of 47.6 mil €),
partly financed with public funds (63 mil €) and parlty self-financed.
− The investment plan for 2009-2012 amounts to a total of 90 mil €, of
which about 65 mil € have been accomplished by 2011.
− In 2011 Gesac managed a passenger traffic of 5.8 mil/passengers, and
employed about 300 people.
AIRPORTS
42. Vito Gamberale
F2i and the development of networks and industries
42
AIRPORTS
− At the end of 2011, F2i purchased 29.75% of SEA shares from the Milan
Municipality; SEA manages the airport network of Milan (Linate and
Malpensa airports) since 1948. The current 40-year agreement has been
undersigned alongside ENAC in 2001.
− SEA and the group companies provide all the related activities and
services, such as airplane landings and take-offs, airport security, the
activities related to passengers and the handling of goods, as well as
commercial services.
− Milan’s airport network is located in one of the most important areas
of economic development in Europe (Lombardy’s GDP exceeds the
national GDP by 20%) and represents a bridge between the Mediterranean
region and continental Europe.
− In 2011 Milan’s airport network registered 28.4 million passengers,
310,00 air flights and over 470,000 t of goods.
− Turnover is about 580 mil € (net profit 54 mil €); over 5,000 people
employed.
− Development plans include investments of about 600 mil € by 2015
(capacity increase, and a third runway at the Malpensa Airport,
enlargement of the Cargo area, etc.).
43. Vito Gamberale
F2i and the development of networks and industries
43
AIRPORTS
− Italy’s airport system is characterised by:
o an excessively large number of airports with low-specific traffic, particularly
in northern and southern Italy (lower concentration in the south)
o mainly public ownership
o uncertainty rate regulations
o lack of investments (no significant interventions in the main airports in
recent years).
PMO
CTA
TRN
CUF
MXP
VBS
LIN
BGY
BZO
TSF
TRS
VCE
VRN
PMF FRL
FLR
PEG
BLQ RMI
AOI
PSR
FCO CIA FOG
BRI
GOA
NAP BDS
SUF
CRV
TPS REG
AHO
OO
OLB
CAG
PSA
SIE
− SEA and Gesac represent two exceptions in
the national situation:
o SEA manages Milan’s airport system, the only
one, besides Rome, that has a truly
international dimension and is located in
Italy’s most developed area
o Capodichino is located in a «low-density»
airport area, even though it has a large pool of
potential users with a significant
development potential.
Together, these two companies managed 34.2
mil/passengers in 2011, which is about 23% of
the total Italian traffic.
Airports >10 mil passengers
Airports >5<10 mil passengers
Airports >2<5 mil passengers
Airports >0.25<2 mil passengers
Airports <0.25 mil passengers
High concentration area
44. Vito Gamberale
F2i and the development of networks and industries
44
− F2i started the airport industry with a particular know-how and track record,
and with a bright growth perspective:
o thanks to Gesac, F2i «brought back» the considerable cash flows
produced by the company to Italy and equipped them for growth and
development
o thanks to SEA, F2i recognised the needs of local bodies to sell Italy’s
strategic assets to reduce their debt and, again, prevent them from
going under foreign control.
− The long-term objective is to promote business and infrastructure
development, rationalisation and achievement of high profitability levels,
with benefits for satellite activities and for the socio-economic system.
− F2i pursues an investment strategy that aims to create a new airport
network: therefore, a concept of «national network» instead of
«runway-focused» system, which would favour aggregation, the
closing of unemployed airports, and a recognisable, modern airport
format of quality.
− Other possible privatisations in this sector act as drivers to develop this
strategy in the short run, also in view of the mainly public shareholders of
many airports. F2i focuses particularly on other important national airports
(Cagliari, Genoa, etc.)."
AIRPORTS
46. Vito Gamberale
TLC
F2i and the development of networks and industries
46
− Metroweb, founded in 1997, is the F2i controlled company with the largest
urban optic fibre network in Europe, with about 3,270 km of infrastructure
(lines) – corresponding to about 324,000 fibre.
− The company operates as a dark fibre provider: it rents its infrastructure
to TLC operators that subsequently implement their value-added
connection services in an autonomous way.
Infrastructure Dark Fibre Connectivity WEB IP-TV
Wireline -
Wireless
Business
Residential
Telecom Operators and Service Providers End Users
Infrastructure Dark Fibre Connectivity WEB IP-TV
Wireline -
Wireless
Business
Residential
Telecom Operators and Service Providers End Users
Value chain in the optic fibre sector
− In 2011 Metroweb generated about 56 mil € revenues, with operational
margins of about 80%. This company employs 34 people.
− Metroweb services, through Fastweb, initially addressed businesses.
At a second stage, also thanks to professionals who needed fast domestic
connections to work from home, the company’s offer extended to end
consumers.
47. Vito Gamberale
TLC
F2i and the development of networks and industries
47
− Metroweb was the engine that led to Milan’s leadership in the urban optic
fibre sector (the best cabled city in Europe). Ten years ago, Milan was the
sole pioneer worldwide in the new generation of networks.
− However, the other Italian regions are well behind the other European
countries as to ultra broad band availability (in addition, these regions do
not have alternative technologies to optic fibre, such as cable TV, which is
largely available in other countries):
% case
passed in
optic fibre
●
Italy’s current technological disadvantage is mainly due to the
incumbent operator, which should be the driver of the network
development but is, on the contrary, stuck with debts caused by
unsuccessful privatisation!
Germany France UK Italy Spain Netherlands Sweden
48. Vito Gamberale
The privatisation of Telecom Italia
– In September 1997 STET and Telecom Italia merged. The Treasury holds 45% of the
post-merge capital.
– Also in 1997, about 35% of the assets (about 13 bil €) were sold (through direct sales
and public offering).
– A «small but hard core» holding, just 6.6% of the shares, led by IFIL (FIAT) – which
holds only 0.6%! – overtook the control of the company and replaced the
management.
– Among all analised privatisations, this is the less profitable for the government:
the EV/EBITDA ratio, for example, is a 3.4-fold (compared to 7.2 of ENEL and 5.4
of ENI).
– After this, the company changed ownership many times (Colaninno, Pirelli, Telco,
Telefonica), which led to a heavy debt and the loss of the international prestige it had
acquired in the years of STET management.
– The government’s presence with Telecom Italia will persist until 2002 with the 5.2%
share held by the Treasury, and until 2006 with the 2.3% share held by the Bank of
TLC
F2i and the development of networks and industries
48
Company Year EV/EBITDA Price/PN
Nuovo Pignone 1994 7.39x 2.90x
ILVA 1995 4.03x 1.17x
ENI(average 5 tranche)1995 - 2001 5.40x 2.10x
ENEL(ony 1st tranche) 1999 7.20x 3.00x
Telecom Italia 1997 3.40x 1.70x
Autostrade 1999 9.40x 4.50x
49. Vito Gamberale
The privatisation of Telecom Italia
– The following leverage buy-out operations with Telecom led to a debt «explosion»,
lasting until today:
Among the biggest companies, Telecom Italia is the only privatisation that was a
true and complete failure, despite the concessors and private investors who
followed the process, and «massacred» the company with debts. Today, such
debts prevent the company from developing its own network and help the country
grow!
TLC
F2i and the development of networks and industries
49
Colaninno
and “Capitali
Coraggiosi”
acquisition
Telecom Italia – Net Financial Position variations/ EBITDA
Olimpia
(Pirelli and
others)
acquisition
Telefonica
enters the
company
0.7
1.5
1.6
2.4
2.3
2.0
3.2
2.9
3.2 3.1 3.1
2.8
2.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
50. Vito Gamberale
TLC
F2i and the development of networks and industries
50
●
Thanks to Metroweb, F2i brought back another strategic asset to Italy
(used as cash-cow by former foreign partners) using its cash flows to
foster development (also supported through some equities and
balanced debt).
●
F2i aims to leverage on the excellent quality of Metroweb’s
infrastructures, and its technological resources and management.
●
Its objective is to develop a long-term project in the TLC broad band
infrastructure sector in Milan and in other cities in Italy (starting with the
most economically-advanced, which have the highest demand).
●
The company could develop to rise from an urban champion to sector
national champion, and act as an aggregating centre for other existing
networks. F2i is already actively operating in this direction, with
operations in Genoa, Bergamo and Brescia.
52. Vito Gamberale
HIGHWAYS
F2i and the development of networks and industries
52
− Italy’s highway sector is quite closed off
to new players because of the presence
of two big private operators (Atlantia and
Gavio) and numerous public
concessions:
o the longitudinal highways are managed
by the Atlantia Group
o the main highways in the North-West
are managed by the Gavio Group
o in the Lombardy and Veneto regions,
the authorities are often managed by
very fragmented public share
ownerships
o the southern regions (the highways of
Salerno-Reggio Calabria, and
Autostrade Siciliane) are managed
directly by ANAS.
Italy’s highway networks
Other operators
●
Public authorities, in particular, come with numerous
partners (often with no reference stakeholder) and
differentiating issues that affect each other.
53. Vito Gamberale
HIGHWAYS
F2i and the development of networks and industries
53
− F2i is present in this sector since 2008, with about 26% shares of Infracis.
− Infracis is a holding with participation in important highway authorities in the
North-West regions: in important highway concessioners from the North-
East: the Brennero highway, the Brescia-Padova highway, Venete, Cisa’s
road for heavy traffic.
Infracis highway network
Highway networks of other authorities
− These authorities represent an
interconnected network in the
regions of Lombardy and Veneto,
about 780 km long (about 14% of
the entire toll network).
54. Vito Gamberale
HIGHWAYS
F2i and the development of networks and industries
54
●
For F2i, Infracis represented an entry point in the highway
sector, with the objective of exploiting opportunities to
acquire further shares of the three highway networks in its
portfolio, or other assets.
●
New participations in strategic assets can be accomplished
in the future, with the objective to create a new national
private, yet institutional player and to stimulate a «network»
approach.
●
F2i presents itself as the reference private partner for
authorities still characterised by a very fragmented shared-
ownership and a massive public participation (especially in
industrially-strategic Italian regions, such as the Lombardy-
Veneto region).
56. Vito Gamberale
F2i and the development of networks and industries
Development of new industries
56
− In addition to what has already been accomplished, F2i could still launch
one or two new industries, folllowing the strategy of investing in existing
Italian infrastructures.
− Italy’s current economic-financial situation provides a particularly
favourable background for continuous new investment opportunities
for F2i, in particular:
− privatisation of infrastructures held/managed by local bodies
− network spin-off of the multi-utility companies
− sales of infrastructure assets – out of the core business – by big industrial
groups
− rationalisation and sector concentration processes imposed by recently
approved ministerial decrees (for example local authorities in the gas
distribution and water sectors)
− an upgrade need and improvement of efficiency of the infrastructure, leading
to changes in the ownership asset (broad band, TLC towers, water, WTE)
− capital need by existing infrastructures to finance important new projects
(highways).
57. Vito Gamberale
57
− An example of a new industry, in which F2i could invest, is the waste
disposal management (collection, treatment, disposal and energy
recovery).
– The national waste market presents high levels of «pulverisation»: in
2011 the nine main operators have managed only 7% of the total volumes:
Waste
management
Main operators on the Italian market – per volumes disposed
− On the contrary, the European waste management market – particularly in
France, Germany and UK – is made of large operators (Veolia, Remondis,
Sita Suez, Biffa).
F2i and the development of networks and industries
Development of new industries
Business model
Collection YES YES YES NO YES NO NO YES NO
Treatment YES YES YES NO YES NO NO NO NO
Waste to energy (WTE) plants YES YES YES YES YES YES YES YES YES
Landfills YES YES NO YES YES YES NO NO NO
3,382
2,800
1,800
1,100 1,017
600
331 208 90
0
1,000
2,000
3,000
4,000
Hera A2A AMA
Roma
Veolia Iren Acea APS
Acegas
Waste
Italia
ACSM
58. Vito Gamberale
58
− We have reasons to believe that the Italian waste management market
will have a concentration similar to the ones of our neighbouring
countries, to overcome its current inefficiency and the constant
environmental emergencies that it causes (Naples, Palermo, Lazio, etc.).
− Over the past two years, F2i has looked many times for an entry point in this
sector, analysing different previous opportunities that were not finalised
(HeraAmbiente, Acegas, Marcegaglia Group’s plants).
− Currently, the Fund is considering to acquire a significant share of Iren
Ambiente (the fifth biggest national operator), which operates in this sector
with two WTE plants, one landfill and 16 waste treatment plants.
− F2i and Iren would like to promote the company growth to a national
level, turning it into a «national champion» that could operate on the
market as a leader, together with Hera and A2A (currently the leaders in
this sector).
− Among the growth opportunities abroad, the most solid projects already
focus on established entities, still characterised by significant revamping
plans and projects for the development of new sites.
Waste
management
F2i and the development of networks and industries
Development of new industries
60. Vito Gamberale
60
F2i was created as a private, yet institutional investment tool to aggregate
existing infrastructures into industries in order to guarantee subsidiaries
with:
– operational effectiveness
– balanced financial management, preventing companies from
becoming poorer through exaggerated debts and extraordinary high
dividends
– focus on development, reinvesting a great part of the cash flows
generated by strengthening the managed networks and assets.
Conclusions
●
In a time of very poor public financing, the infrastructure gap –
both quantitative and technological – needs to be filled with the
modern finance model proposed by F2i: using resources from an
efficient management of existing infrastructures to finance the
development of new plants and works.
61. Vito Gamberale
61
– The efficiency in F2i work shows through the Fund virtually exhausting
its resources well before the earliest deadline of the investment period.
– This happend even though F2i operated with extreme caution in order
to avoid hasty operations in a time of great uncertainty and a progressively
worsening global crisis.
Conclusions
●
This achievement led F2i to launch a new Fund that will allow its
work to progress further.
62. Vito Gamberale
62
− The new Fund will allow F2i to:
− reinforce its presence wherever its participation was already
(capital injections to support development, acquisitions of new
partners, etc.)
− inject new investments in industries already established to
allow the development of infrastructure groups leaders in their
respective sectors
− initiate new industries also starting from the investment
opportunities determined by Italy’s current economic-financial
situation
− to develop:
− many small nodes from bigger nodes
− and
− healthy trees from certain dead branches.
Conclusions