November 2015 THE SNAM SHAREHOLDER€¦ · REPORTED NET PROFIT million euro * 1,198 863 888...

THE SNAM SHAREHOLDERTHE GUIDE TO GETTING INVOLVED IN YOUR INVESTMENT

November 2015

Dear shareholders,

the purpose of this Guide is to provide both current and

potential owners of Snam shares with a summary of relevant

information. Starting from 2010, it is part of a series of

tools to enhance our communication with retail investors.

We believe that the trust you have showed us must be

cultivated through an increasingly effective dialogue.

The first part of the Guide outlines the Group’s

structure, its business and strategic guidelines.

The Guide also presents some key features about

Snam shares and practical information so that you

can really get involved in your role as a shareholder.

We hope that these pages will be easy and

interesting to read, as well as helpful.

By nature, this Guide is not an exhaustive

product. In order to obtain more complete

information we invite you to visit our

corporate website at www.snam.it or, for

specific requests, to contact the Investor

Relations department.

SnamMission 3

Snam Profile 4Governance 6

Management 7Milestones of a long path 8

Snam business 9Regulation 10

Snam: an investment in sustainability 11Snam strategy 12

European development 14

Snam on the Stock ExchangeSnam stock 17

Stock Market performance 18Shareholders 19

The bond market 20The Shareholder returns 21

Get involved in yourSnam Investment

The steps to investing 23How to attend the Shareholders’ Meeting 24

How to keep yourself informed and participate in corporate events 25Glossary 26

Mission

Snam is a European leader in the construction and integrated management of natural gas

infrastructure. It favours the right conditions for fair energy costs by managing the gas system

efficiently, developing infrastructure and providing integrated services for the market. It

promotes the integration of the European networks, including through strategic partnerships

with the biggest operators in the sector, along the main continental energy corridors.

Snam follows an ethical and socially responsible business model, capable of generating value for

the Company and for the community in which it operates, with acknowledged professionalism

and transparent dialogue with all its stakeholders, respecting the environment and the regions. A

clear and sustainable long-term development strategy, based on one of the most substantial

investment programmes in Italian industry, has enabled the Company to attract Italian and

foreign capital, boosting growth and employment.

With over 6,000 employees, Snam is active in natural gas transportation, storage, regasification

and urban distribution. Snam manages a national transportation network that is more than

32,000 km long, including eight storage facilities, one regasification plant and a local distribution

network that covers over 55,000 km in total.

SNAM SHAREHOLDER | 3

Snam profile

INTEGRATEDGROUP, OPERATINGIN THE REGULATEDGAS SECTOR INITALY

LEADER IN EUROPEIN TERMS OFREGULATORY ASSETBASE (RAB)

SUSTAINABILITYPROCESS ANDVALUE CREATIONARE BOTHSTRUCTURED ANDINTEGRATED IN THECOMPANY’SBUSINESS MODEL

LOW ANDDIVERSIFIED RISKPROFILE

4 | SNAM SHAREHOLDER

KEY-FIGURES

2014 9M2014 9M2015

GAS INJECTED INTO THE NATIONAL NETWORK bcm 62.28 47.13 49.86

TOTAL REVENUE million euro 3,566 2,648 2,748

EBITDA million euro 2,776 2,111 2,108

REPORTED NET PROFIT million euro * 1,198 863 888

OPERATING INVESTMENTS million euro 1,313 856 803

NET INVESTED CAPITAL billion euro 20.82 20.09 20.94

NET FINANCIAL DEBT billion euro 13.65 13.73 13.71

NET EQUITY billion euro 7.17 6.36 7.23

(*) Net profit is attributable to Snam


Governance

Snam’s standards of governance are always in-line with international bestpractices and with the Borsa Italiana’s Corporate Governance Code for listedcompanies. A clear and well-structured governance system assuresshareholders that the Company is managed and controlled efficiently.

Snam has adopted the traditional administration andcontrol system, which features three bodies: theShareholders’ Meeting, the Board of Directors and theBoard of Statutory Auditors. The Shareholders’ Meetingis the body through which shareholders take decisionsand appoints the Board of Directors, the Board ofStatutory Auditors and the Auditing firm. Pursuant toSnam’s Bylaws, in addition to the matters assigned to itby law, the Shareholders’ Meeting is also responsible forpassing resolutions concerning specific acts of sale,including within the scope of joint ventures, orsubjection to restrictions of the Company or of businessunits of strategic importance in relation to gastransportation and dispatching activities.

Snam’s Board of Directors holds the largest ordinary andextraordinary administrative powers, apart from the actsthat, by law and according to the statute, are theresponsibility of the AGM. At Snam, the Board approvesstrategic, commercial and financial plans. It defines thecorporate governance systems and regulations, thepolicies for remuneration of executives and managementwith strategic responsibilities, and guidelines for internalcontrol and risk management. The current Board consistsof: Lorenzo Bini Smaghi (Chairman), Carlo Malacarne(Chief Executive Officer), Sabrina Bruno, Alberto Clô,Francesco Gori, Yunpeng He, Andrea Novelli, Elisabetta

Oliveri and Pia Saraceno. Five out of nine members areindependent and the female ratio is represented by threemembers, which is more than the minimum required bythe existing legislation on gender balance. In 2014 theBoard met ten times, counting a presence of 93.3%.

The Board has established the following Committeesfor internal purposes with advisory and proactiveduties, as required by the Corporate GovernanceCode: (i) Audit and Risk Committee; (ii) RemunerationCommittee and (iii) Nomination Committee.

The Board of Statutory Auditors, the body overseeingcompliance with the law, consists of 3 standing auditorsand 2 alternate auditors. Massimo Gatto is theChairman, Leo Amato and Stefania Chiaruttini are theother two standing auditors; Maria Gimigliano and LuigiRinaldi are the two alternate auditors. The Board ofStatutory Auditors met 18 times in 2014, with anaverage attendance of 94.4%.

The Board and the Board of Statutory Auditors werenominated for three years, on the basis of listspresented by shareholders, from the AGM on 26March 2013 until the AGM that in 2016 will approvethe financial statements at 31 December 2015.


Lorenzo Bini SmaghiChairman

Carlo MalacarneCEO

At Snam the organisational structure is leanand functional, ensuring a clear distinction ofroles and responsibilities.The senior management, which consists of ateam of professionals with considerabletechnical and specialized experience, share astrong commitment to value creation.

Marco PorroInvestor Relations

Silvio BianchiInternal Audit

Agostino LimontaEnterprise risk management

Federico ErmoliBusiness development andinternational business

Patrizia RutiglianoPublic Affairs andCommunications

Marco ReggianiGeneral Counsel andCorporate Affairs

Sergio BusatoHuman Resources,Organization and Security

Antonio PacciorettiPlanning, Administration,Finance and Control

Gaetano MazzitelliRegulatory Affairs

Gloria GazzanoICT

Carlo Eligio GramolaHSEQ, Property andFacilities Management

Management


Milestones of a long path

1941 Snam is established, as integrated operator in gas supply, transport and sale.

1941˅

1999

In the following 60 years, Snam plays a leading role in Italy’s conversion tomethane. It builds an articulated National Network throughout the Italianterritory, while constructing import pipelines, allowing an effectivediversification of supply sources, thanks to gas coming from Russia, TheNetherlands, Algeria, North Sea and Libya. In 1971, Snam builds the first LNGregasification plant in Italy, in Panigaglia (La Spezia).

2000 In 2000, as per the Letta Decree (Legislative Decree 164/2000) that promotesthe gas market liberalisation, Snam Rete Gas is founded. The regulated assetsin the transportation, dispatching and LNG regasification activities areconferred to the new company.

2001˅

2011

On 6 December 2001, Snam Rete Gas begins its path as a listed company; overthe years, its shares consolidate a successful case history in the regulatedtransport sector. In 2009, the scope of operations widens: after the acquisitionof 100% of Stogit and Italgas from Eni, the Company becomes an integratedoperator in regulated activities, with a leading position on the entire EuropeanContinent.

2012 At the beginning of 2012, Snam Rete Gas modifies the company structure andchanges its name into Snam. It then transfers the gas transport business to anew subsidiary, which assumes the name Snam Rete Gas. In the followingOctober, also the ownership structure experiences major changes: CDPbecomes the main shareholder, buying from Eni 30% of Snam share capital.

2012˅

today

Over the past four years, Snam has taken a new role as a real Europeanoperator, by progressively expanding its activities on the international scene.The cooperation with Fluxys for the reverse-flow and the acquisition of equitystakes in TIGF, TAG and IUK today provide the Group with a strategic presenceon both the North-South and East-West gas corridors. Snam can thereforeactually promote the greater infrastructure interconnection needed to supportthe evolution of gas import


Snam businessGas plays a crucial role in Italian energy sector. Consumption has increased significantly, from 71

billion m3 in 2001 to approximately 83 billion in 2010. However, the current recession that hastaken place over the last years has resulted in a drop in consumption of natural gas: in 2014 it fell

to 61.9 billion m3, with a reduction of 8.1 billion m3 compared to 2013.

With its 4 regulated business, Snam represents an integrated operator with a leader position inthe natural gas system infrastructure.


RegulationAlmost all Snam’s consolidated revenues are “regulated”. The Authority for Electricity, Gas andWater (AEEGSI) regulates the different tariff systems for transportation, storage, distribution andregasification services, defining the criteria for setting the tariffs in each regulatory period, whichnormally lasts four years.

The regulation ensures that the services are provided to third parties according to non-discriminatory criteria.

Operating in a business subject to regulation, Snam has the opportunity to rely on a clearframework both in managing each business and in planning new investments.

TRANSPORTATION * STORAGE * DISTRIBUTION * REGASIFICATION *

Calculation of net

invested capital

recognised for regulatory

purposes (RAB)

Revalued historical cost Revalued historical costDeduction of restoration

costs

Revalued historical costParametric method for

centralised assets

Revalued historical cost

Return on net invested

capital recognised for

regulatory purposes (pre-

tax WACC)

6.3% 2014-2015 6.7%

As of 1 January 2015: 6%

6.9% (distribution) 2014-

20157.2% (metering) 2014-

2015

7.3% 2014-2015

Extra return on new

investments

WACC +1% on new

investment carried outafter 31 December 2013 to

offset the regulatory lag

1% over 7 years (regional

network developmentinvestments)

1% over 10 years (national

network developmentinvestments)

2% over 10 years (entry

point developmentinvestments)

4% over 8 years (on

expansions of existingcapacity)

4% over 16 years (on the

development of newstorage fields).

As of 1 January 2015:retention for 8 years of

20% of new capacity

auction revenues over andabove the reference

revenues

Incentives relating toservice quality

WACC +1% on new

investment carried outafter 31 December 2013

to offset the regulatory lag

2% over 16 years (new

terminals or increasingcapacity at existing

terminals by more than30%)

Efficiencies

(X FACTOR)

2.4% on operating costs 0.6% on operting costs.

As of 1 January 2015:1.4% on operating costs

1.7% on distribution

operating costs0% on metering operating

costs

0% on operating costs

(*) With review of the exogenous variables under discussion and applied starting from January 2016


Also in 2015, the Snam continuous commitment to integratesustainability into corporate policies has led its shares to beincluded or confirmed into a progressively higher number ofspecialised indices, based on criteria assessing financial, socialand environmental performances.

Thanks to this index membership, Snam enjoys an ever growingvisibility among socially responsible investors and, moregenerally, within the entire financial community.

On 31 December 2014, according to the public informationavailable and to the most recent Shareholder Analysis, fundswhose investment process takes into account also SRI (SociallyResponsible Investing) criteria own approximately 4.4% of Snamshare capital, vs. 3% at the end of 2013.

In 2015 the Snam shares have been confirmed as components ofseveral indices: in the Dow Jones Sustainability World Index (forthe seventh year in a row), in the FTSE4Good index series, inwhich the Company has been listed since 2002, in the EthibelPioneer and Excellence indices, in the MSCI World and MSCIACWI ESG indices and, for the third consecutive year, in thesustainability CDP Italy 100 Climate Disclosure Leadership Index(CDLI), direct emanation of CDP, a non-profit organisationamong the most important entities at the international leveladdressing the climate change issue. Snam collaboration withCDP dates back to 2007.

Moreover, Snam is part of the Vigeo World 120 and VigeoEurope 120 indices, as well as of the United Nations GlobalCompact 100 (“GC 100”) Index, developed by the GlobalCompact of the United Nations, which includes the best 100companies that distinguished themselves on a global basis byattention paid to ESG issues and is listed in six among theleading ECPI indices, in the Stoxx Global ESG Leaders indices andin the Oekom Research index.

Snam: an investmentin sustainability


Snam StrategySnam, in the 2015-2018 period, presents a robust strategy, focusing on four strategic prioritiesthat preserve its low risk profile

SELECTIVEPORTFOLIOMANAGEMENT

Italy: aiming at high-quality investment opportunitiesEurope: focusing on two strategic gas corridors and providingcountry risk diversification

* Gross of subsides

FINANCIALDISCIPLINE

Managing capex to meet business environment requirementsMaintaining a solid and efficient capital structureM&A providing returns’ accretion

In the 2015-2018 period we are committed to:

a safe liquidity profilemaintain a solid investment grade profile and a significant fixed rate debt portionexploit potential opportunities from favourable market conditions and future refinancingexercisesmanage proactively the maturities


NEW SERVICESAREA NEW REVENUE STREAM

OPTIMAL EFFICIENCY LEVEL IN A GROWINGBUSINESS (Mn € controllable fixed costs,nominal value) KPI 2014-2018 CAGR

OPERATIONALMANAGEMENT

Progressing from asset owner to market facilitatorKeeping up with cost control actions

New services to enhance Snam's role as System Operator

ATTRACTIVE ANDSUSTAINABLERETURNS

2015 DPS guidance: € 25 cents


European development

The strategy outlined in the 2015-2018 plan is clear: focus on the two European gas corridorsconnected to the Italian infrastructure, in order to play a leading role in the integration ofEuropean gas infrastructure.

Snam aims to optimise the returns that its international shareholdings can generate. Withreference to the North-South corridor, Snam is committed to a close working relationship withFluxys in order to maximise the value of investment opportunities and commercial activities.Snam will also closely monitor the marketplace in order to capture possible opportunities tocomplete its exposure to the North-South and East-West corridors.

Snam has a 15.5% stake in Prisma, the European “capacity” IT platform aimed at promoting theharmonisation of access rules and service providing and facilitating the creation of a singleEuropean natural gas market.


STRATEGIC RATIONALE

The largest import pipeline bringing Russian gas fromAustrian/Slovak border to ItalyDiversification of regulatory and country riskIntegrating the East-West gas corridorStrategic opportunity to establish reverse flow capability toSouthern Germany and Eastern Europe

STRATEGIC RATIONALE

Key position along the East-West energy corridorDiversification of regulatory and country riskDevelopment opportunities:

Value creation from French gas areas unification withadditional incentivized investmentsIncrease of Storage competitivenessDe-bottlenecking of the Spanish gas grid

STRATEGIC RATIONALE

Represents last section of the South-North corridorconnecting to the continental grid one of the major Europeangas marketsBi-directional flow capacity provides flexibility anddiversification of supply sources to UK and ContinentalEurope


Snam on the Stock Exchange

Snam shares have returned great value

to shareholders over time.

From 6 December 2001, first trading day after

the IPO, to 31 October 2015: about +420%

Total Shareholder Return.

From 11.9 in 2012 to 16.5 billion euro

as of 31 October 2015 the increase

in market capitalisation.

Around 9.5 billion euro total amount

of dividends distributed for the fiscal

years from 2001 to 2014.

Snam stockSince the IPO on 6 December 2001, Snam stock has always been a blue chip in the Italian equitymarket, with a sizeable free float and a high daily traded volumes. Snam is currently one of the40 stocks in the FTSEMIB basket.

Improvements achieved in corporate responsibility have allowed the Snam's shares to beincluded in the two most important indices representing a benchmark for SRI investors,respectively in the FTSE4Good in 2002 and in the Dow Jones Sustainability Index in 2009, beingconfirmed in both of them in all the following years.

Over the years, Snam has built and consolidated a clear and consistent equity story, whichleverages on the Company’s commitment to create shareholder value. Good fundamentals havemoreover led to shareholder remuneration through an attractive and sustainable dividenddistribution over time.


STOCK PRICE

1 January 2015 - 30 October 2015 (BASE 1 JAN 2015=100)

Snam price as of 31 october 2015: 4.71 €

BROKER RECOMMENDATIONS

SNAM, DJSI, FTSE4GOOD AND EPCI

1 January 2015 - 30 October 2015 (BASE 1 JAN 2015=100)

Stock Market performanceIn the following graphs the Snam share is compared with the italian Stock Exchange and with theeuropean utility index. The share, in the second graph, is compared also with the mainsustainability indeces.


As of 31 December 2014 Snam share capital amounts to3,696,851,994 euro and is divided into 3,500,638,294ordinary shares, with no nominal value. Snam is one of thefew Italian listed companies whose floating capitalexceeds 50%. Snam’s shareholding structure is broad andwell-diversified, both by investor type and by geographicaldistribution.

Thanks to a 60.85% free float, today the market controlsthe most relevant stake of Snam share capital.Institutional investors, who hold an overall 51.31% stake,are mostly international (96.7%). Retail investors, whohave always had a sizeable weight in Snam’s share capital,currently account for a 9.54% share.

CDP Reti is the shareholder controlling the single largeststake in Snam (28.98%), followed by Eni, who holds theshares underlying the 1.25 billion euro convertible bondexpiring on 18 January 2016.

Following the completion of the TAG’s stake acquisitionand the capital increase that took place in December2014, CDP Gas owns a 1.12% stake.

SHAREHOLDERS STRUCTURE

Updated to June 2015

SHAREHOLDINGGEOGRAPHICAL BREAKDOWN

Updated to June 2015

The "Italy" percentage figure includes theshares owned by retail investors and thetreasury shares

Shareholders


Since 2013 Snam has undertaken a process of financialoptimisation aimed to achieve a competitive cost of debtover time as well as to make the debt structure moreconsistent with business requirements, both in terms offinancing maturity and of exposure to changes in interestrates. Such activity resulted in the EMTN programmecontinuation and in the terms re-negotiation of certainpre-existing bank loans, as well as in the increasingcontribution of loans by ‘institutional lenders’ such as EIBand CDP.

On 22 June 2015 Snam’s Board of Directors has resolvedto renew the annual EMTN Programme started in 2012 fora maximum total amount confirmed at 12 billion euros.The Board of Directors has subsequently approved theissue by 30 June 2016, through the Programme, of one ormore additional bonds, for a maximum total amount of1.3 billion euros, to be placed with institutional investorsoperating principally in Europe.

DEBT BREAKDOWNBY MATURITY

Updated to 30 September 2015

DEBT BREAKDOWNBY TYPE OF INTEREST RATE

Updated to 30 September 2015

NET FINANCIAL DEBT AS OF30 SEPTEMBER 2015:13,709 MILLION EURO

The bond market

RATING


The shareholder returnsSnam dividend policy is characterised by an attractive level of yield and by the ability to sustainthat level over the years, thanks to highly visible financial results (strengthened by thecontribution from international associates), by the solidity of capital structure and by thecontinuous quest for operational and financial efficiencies.

On the back of those premises, the Snam Plan sets a guidance of dividend per share of 25 eurocents for the 2015 fiscal year. The goal of ensuring an attractive and sustainable shareholderremuneration remains a priority in the structure of Snam strategy as well as in the managementcommitment for an effective execution of the Plan.

DIVIDEND PER SHARE (€)

DIVIDEND YIELD (%)

On October 31st 2015 Dividend Yield is equal to 5.3%


Get involved in your Snam Investment

How do I become a shareholder?

The steps you need to take to invest are very easy:

you can find a description on page 23. Once you

have become a shareholder, you will automatically

receive a dividend when it is distributed.

How do I vote at the Shareholders' Meeting?

To vote means to get involved in your role

as a shareholder. It is your right to attend

the Shareholders' Meeting and to express

vote: we explain how to do it on page 24.

How to buy sharesIt is very easy to buy shares: all you need is tohave a bank account. You have to indicate howmany shares you want to buy and, ifappropriate, the price at which the transactionshould be completed.

To buy Snam shares you need to have an accountwith an authorized intermediary: a bank or a SIM.You can place the purchase order through theintermediary or through the online trading systemsthat the intermediaries make available for theirclients. In the purchase order you have to specify thenumber of shares you want to include in yourportfolio, indicating a price limit and a time limit forthe order’s validity, if appropriate. A market-to-limitorder will be executed buying the maximum numberof shares available at the lowest price at that time.The intermediary issues the “executed order” whencompleted. Shares listed on the stock market are“dematerialised” securities – therefore following thepurchase you will not receive any actual printed sharecertificate. The intermediary’s written confirmation isproof that the shares should be credited to theshareholder’s account.

How to collect dividendsOnce you have become a shareholder, thedividend will be paid automatically to youraccount.

Once you hold a certain number of shares, you do notneed to do anything in order to receive the respectivedividends. If you still own the shares when thecoupon is detached, on payment date the amountwill be directly paid to your account through thefinancial intermediary managing your brokerageaccount.

YOU CAN MONITOR THE PERFORMANCE OFYOUR INVESTMENT IN SNAM BY:

VISITING THE IR SECTION OF SNAMWEBSITE, WWW.SNAMRETEGAS.IT,SECTION INVESTOR RELATIONS/SNAMSTOCK;VISITING BORSA ITALIANA WEBSITE,WWW.BORSAITALIANA.IT, SECTIONQUOTES/STOCKS;CONSULTING LEADING FINANCIALNEWSPAPERS AND WEBSITES.

The steps to investing

You can buy Snam shares on the stock market, through a financialintermediary: a bank or an authorized SIM (Società di IntermediazioneMobiliare, i.e. a broker).


How to monitor the call noticeThe Shareholders’ Meeting is called through a NOTICE,indicating the date, time and venue for the Meeting and theagenda. Within ten days after publication of the Notice,Shareholders who, even jointly, represent at least 2.5% of theshare capital may request the SUPPLEMENT to the list ofmatters to be discussed or may present proposals forresolution on items already on the agenda. Questions must besubmitted in writing by recorded delivery or by certified e-mail to [email protected], accompanied by adescription of the items requested for resolution or of thereasons for further proposals for resolution presented on itemsalready on the agenda.

How to communicate yourparticipationIn order to attend the Meeting, you have to ask the financialintermediary (bank or SIM) with whom the Snam shares aredeposited to issue a “Certification of attendance”, attestingyour possession of the right to participate, by the close ofbusiness of the seventh trading day preceding the Meeting.

The Certification must reach Snam by the end of the thirdmarket trading day before the date set for the only call of theMeeting. It makes sense to ask your financial intermediary toissue the certification some days in advance. Those who takepossession of shares after the record date shall not have aright to participate or to vote in the Meeting.

You are allowed to submit questions about subjects on theagenda even before the Meeting, having them reach theCompany by the end of the third market trading day beforethe date set for the first call of the Meeting:

1. By mail to the following addressSnam S.p.A. Legal, Corporate and ComplianceDepartment(Shareholders’ Meeting Questions)Piazza Santa Barbara, 7 - 20097 San Donato Milanese(MI) – Italy

2. By fax to the Snam Legal, Corporate and ComplianceDepartment at the n.+ 39 02 37037631;

3. By e-mail to [email protected];4. Using the appropriate section of the CompanyWebsite.

Questions will be answered no later than during the Meeting.Please check in advance whether the information you mean torequest is available or not in FAQ format in the appropriatesection of the corporate website.

How to attendYou can attend the Meeting in person, according to theprovisions of the Call Notice, or you can be represented bymeans of a written proxy.The proxy form can be downloaded from the Snam website, inthe sub-section Governance / Shareholders’ Meetings forparticipating and voting by proxy. Notification of proxydelegation may be sent:

1. By mail to the Registered Office of the Company:Snam S.p.A. Legal, Corporate and ComplianceDepartment(Shareholders’ Meeting proxies)Piazza Santa Barbara, 7 - 20097 San Donato Milanese(MI) – Italy

2. By certified e-mail to: [email protected] orto: [email protected]

3. By fax no. +39 02 37037631 - Legal, Corporate andCompliance Department of Snam.

Snam shareholders also have a DESIGNATEDREPRESENTATIVE, to whom they may delegate proxy withvoting instructions on any or all of the proposals in theagenda, free of charge.

The Ordinary Shareholders’ MeetingThe Ordinary Shareholders’ Meeting must be called at leastonce a year, within 180 days after the fiscal year ends, toapprove the financial statements of fiscal year ending on 31December; it also approves dividend distribution as proposedby the Board of Directors and, periodically, appoints membersof the Board and Statutory Auditors; it also determines theirremuneration.

The Extraordinary Shareholders’ MeetingThe Extraordinary Shareholders’ Meeting is called whenamendments to the Articles of Association are needed, orwhen extraordinary capital transactions need to be approved.

Documentation regarding the items on the agenda is availableat Snam’s registered office and at Borsa Italiana SpA. It is alsoavailable on the Company website. For additional informationconcerning the Meeting, please consult the appropriate sectionof the Company website, or send an e-mail to the [email protected]. The following are also inoperation: the toll-free number 800-360243 (calls from Italy),or phone number +39 02 37000890 and, lastly, the faxnumber +39 02 37037631.

How to attend the Shareholders'Meeting

TO LEARN MORE ABOUT SHAREHOLDERS’ MEETING PROCEDURES YOU CAN REFER TO THE “REGULATIONS OF MEETINGS”AVAILABLE AT WWW.SNAM.IT, SECTION GOVERNANCE/SOCIAL BODIES/SHAREHOLDER’S MEETINGS.


PAPER COPIES OF THE ALL THE ABOVE MENTIONED DOCUMENTSARE AVAILABLE AT THE COMPANY’S REGISTERED OFFICE OR WITHBORSA ITALIANA SPA.

IF YOU WISH TO RECEIVE INFORMATION DOCUMENTS BY MAIL,PLEASE ASK THE INVESTOR RELATIONS DEPARTMENT. YOU CAN FINDTHEIR CONTACTS ON THE LAST PAGE OF THIS GUIDE.

How to keep yourself informedand participate in corporateevents

Snam makes a series of tools available to its current and future shareholders,through a variety of information channels. All documents are downloadablefrom the corporate website (www.snam.it).

Section “Snam stock”From the home page of the INVESTOR RELATIONS section you cango to the sub-section “SNAM STOCK”; there you can findinformation about Snam share price and volumes, interactivecharts that provide comparative performances of the Snam sharevis-à-vis its peers and with sector indices; you can even calculatethe return over a certain time span of the number of shares youhave purchased.

Investors publicationsAmong contents of its INVESTOR RELATIONS section Snamwebsite presents a subsection, "INVESTORS PUBLICATIONS", inwhich you can find the complete series of the issues of six differentproducts, aimed to keep shareholders informed about results andperspectives of Snam. Besides the issues of this Guide “The SnamShareholder”, you can read ‘online’, download or print the Factbook, the summary of facts, numbers and results which are usefulfor understanding the Company and its businesses; the FMR, amonthly publication on the stock market’s performance and itssectors, with a specific focus on the Utility sector and on Snam’sperformance. And also, the “News@facts” quarterly newsletter,that aims to show clearly and concisely the Company’s results, aswell as the performance and investments of its differentbusinesses; the "Corporate Social Responsibility Review", a half-yearly review which focuses on Corporate Social Responsibilitytopics, with a specific analysis of Social Responsible Investing (SRI).The review also shows exemplary CSR practices employed by otherItalian companies, an the latest sustainability news. The last one

is "Il metanino", an annual pubblication which provides an overviewon the main aspects and developments of the European andinternational gas market. The context in which Snam's energybusiness operates is outlined via the detailed data for singlecountries and geographical regions.

ReportsInside the INVESTOR RELATIONS section you also have access tothe REPORTS subsection; there you can find, starting from 2003,annual, interim and quarterly reports.

Press releasesInside the MEDIA section you can access Company PRESSRELEASES, starting from 2001. You can also use the E-mail alertservice to receive information about calendar events or newspublished on the website, by typing your personal details. Theregistration is free of charge.

Meetings’ minutes and documentsIn the GOVERNANCE section, inside the subsection SOCIALBODIES/SHAREHOLDERS’ MEETINGS, you can read or downloadthe Shareholders’ Meeting Regulations and a series of minutes anddocuments related to Meetings held starting from 2002: the noticeof call, the Board of Directors’ reports about the proposedresolutions presented to the Meeting, the minutes of the Meetingand the Meetings’ resolutions.

New information channels RSS e PodcastAmong the “utility buttons” at the top of each page of the Snamwebsite you can find the RSS (Really Simple Syndication) andPodcast services.

Snam AppsSnam has developed two apps, “The Snam Network App” and“Snam Reports”, for iPad and iPhone, which allow shareholders toreceive continuously updated information on latest Group news.The apps are downloadable for free.

The presence on social mediaTwitter is the first social network account opened by Snam; on thatchannel, the Company is increasingly active, posting andinteracting with stakeholders, especially during events and shows.You can learn more and follow news about Snam also on Facebook,LinkedIn and Wikipedia. Group videos and photos are shared onYouTube, Instagram and Flickr while presentations are available onSlideshare. Snam makes use of the google+ platform as a tool forits online conferences.


Economic-financial terms

Treasury sharesShares owned by the Company, which it has repurchased for avariety of objectives.

Capital gainIt measures the return of an equity investment linked to the cost, interms of the percentage ratio share price at the beginning ofthe period to share price at the end of the period.

Market capitalizationValue of a listed company which is obtained by multiplying theshare price by the number of outstanding shares.

Corporate governanceSet of rules that monitor and guide the companies’ managementand control. The corporate governance systems establish thesegregation of duties and rights amongst the corporate roles byassigning tasks, responsibilities and decision-making powers.

Dividend yieldIt measures the yield of an equity investment linked to the dividenddistribution, in terms of percentage ratio of dividend for the fiscalyear to the year-end share price.

Ordinary and extraordinary dividendThe ordinary dividend stems from earning and is a share of theyear’s net profit. In the case of an extraordinary dividend, however,shareholders receive a part of the Company’s distributable reserves.This amount may come from provisions made in prior years, fromthe disposal of Company assets or from other corporate strategies.

Total shareholder return (TSR)It measures the overall percentage return of an equity investment,calculated on an annual basis, considering both capital gain anddividend yield, assuming that the distributed dividend is re-investedin the stock at the ex-dividend date.

Treasury sharesShares owned by the Company, which it has repurchased for avariety of objectives.

Regulatory terms

Regulated activitiesActivities subject to regulation by the Regulatory Authority forElectricity, Gas and Water. In the gas business transportation,distribution, storage and regasification are regulated activities.

Regulatory Asset Base (RAB)RAB value of net invested capital is calculated as per the criteriaestablished by the Regulatory Authority for Electricity, Gas andWater for companies operating in the transportation and dispatch ofnatural gas, LNG regasification, storage and distribution in order toset the reference revenue.

Regulatory periodPeriod of time for which the regulation is defined by the Authorityfor each different sector.

Technical terms

Compression StationsFacilities that increase the pressure of gas in the pipelines to bring itto the necessary level to ensure the required gas flows or facilitiesthat lower the gas pressure to allow the injection into storage fields.The Compression Stations are positioned along the National PipelineNetwork and generally comprise several compression units.

Dispatching centreOperating centre continuously controlled, which is responsible formonitoring, overseeing and remote control of the transportnetwork, receiving telecommunication information about the gaspressure, capacity and temperature as well as about the state of thevalves at the interception of the pipelines and of the CompressionStations. On the back of the information received and according totransport programs, the Dispatching Centre regulates gas flows,remotely controlling valves and compression units.

Liquefied natural gas (LNG)Natural gas, that has been liquefied by cooling at - 161°C undernormal atmospheric pressure in order to make it suitable fortransportation by special ships (tankers) or for storage in tanks. Inorder to be injected into the transportation network, the liquidproduct must first be reconverted into its gas state in regasificationplants and brought up to the pressure in the pipelines.

National Gas Pipeline NetworkThe network comprises pipelines and plants which are of the sizeneeded to meet the requirements for imports, exports and the mainnational production and storage facilities which transfer largequantities of gas from entry points to large areas of consumption.

Natural GasMixture of hydrocarbons, composed mainly of methane and withsome small amounts of ethane, propane and higher hydrocarbons.The natural gas injected into the pipeline network must respect aset quality so as to guarantee its compatibility with the gas alreadyin the pipelines.

National Gas Transportation NetworkThe network consists of pipelines, compression stations andinfrastructure, which work both at national and regional levels, toensure the transportation of gas by interconnections to theinternational networks, to production and storage facilities, to theredelivery points for gas distribution and consumption.

Regional Transportation NetworkThe network consists of a pipeline which allows natural gas to betransported across geographic areas, typically at a regional level.

Shipper or UserUser of the gas system. Shippers purchase natural gas fromproducers, importers or other Shippers and sell it to other Shippersor to final users, including electricity producers and industrial plants,which are usually connected to the Transport Network, or to theresidential and commercial clients, which are connected to the localdistribution network, or to other Shippers.

Glossary

At the top of any page of our website (www.snam.it), you can find a glossaryexplaining the meaning of economic and financial terms, technical terms andregulatory terms as well as the definition of units of measurement. Below wehave included the meaning of the terms presented in this Guide.


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Borsa Italiana

www.borsaitaliana.it

Entsog - European Network of Transmission System

Operators for Gas

www.entsog.eu

Electricity and Gas Authority (AEEG)

www.autorita.energia.it

Dow Jones Sustainability Index

www.sustainability-indices.com

Consob

www.consob.it

Ceer - Council of Europe on Energy Regulators

www.energy-regulators.eu

Erg - Energy Regulators Group

www.erg.eu.int

FTSE4Good Index Series

www.ftse.com/Indices/FTSE4Good_Index_Series/index.jsp

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November 2015 THE SNAM SHAREHOLDER€¦ · REPORTED NET PROFIT million euro * 1,198 863 888...

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Transcript of November 2015 THE SNAM SHAREHOLDER€¦ · REPORTED NET PROFIT million euro * 1,198 863 888...