Eni: results for the third quarter and nine months of 2024

• Resilient financial performance, despite weaker trading environment, reflecting strength of our business model
• Significant strategic progress in delivering targeted growth across the businesses
• Satellite approach continues to evolve as KKR confirms €2.9 bln investment into Enilive; new UK E&P satellite created with Ithaca Energy
• Portfolio plan ahead of schedule in timing and value secured
• Competitive shareholder returns: further raising 2024 share buyback to €2 bln

San Donato Milanese, October 25, 2024 - Eni's Board of Directors, chaired by Giuseppe Zafarana, yesterday approved the unaudited consolidated results for the third quarter and nine months of 2024.

Eni CEO Claudio Descalzi said:

“In Q3, by delivering a performance ahead of expectations, we have again demonstrated the resilience of our business model thanks to our increasingly advantaged asset portfolio, stringent cost and capital discipline and strategic focus on growth and value creation. We delivered an excellent cash flow and profitability performance in a less supportive trading environment. Importantly, we maintained leverage at 22%, whilst also speeding up our buyback plans.

We continue to make clear strategic progress across our portfolio. We have increased our upstream production alongside investing for the next phase of growth, including gaining approval for the plan of development on our large Indonesian projects. Our satellite strategy continues to evolve and we are delighted to confirm the €2.9 bln investment by KKR into Enilive, which builds on the transaction concluded at Plenitude earlier in the year and demonstrates our ability to attract investment, confirming the value we are delivering. The creation of our new UK E&P satellite with Ithaca Energy is the next step to support our growth. We remain committed to supporting the energy transition: during the quarter, we advanced two milestone CCS projects of Ravenna in Italy and HyNet in the UK while Plenitude continues to grow renewable capacity and we are now active in building three new biorefineries in Italy, South Korea and Malaysia.

Alongside financial and project delivery we remain focused on portfolio high-grading, highlighting value and maintaining a robust balance sheet. In Upstream we continue our divestment programme and are also in the final stages of evaluating options to monetize recent material discoveries via our dual exploration model. Finally, we are committed to delivering competitive shareholder returns and reflecting our results, strategic progress and the prospects of significant balance sheet de-leveraging, we are pleased to announce an additional increase in the 2024 share buyback to €2 bln.”

Continued delivery of our strategy of valuable growth and portfolio upgrading. Several important milestones achieved to unlock future growth.

• Started in Italy, off Sicily, the Argo-Cassiopea gas development, the largest in years, expected to reach a peak production of 1.5 bcm and featuring net zero scope 1&2 emissions.
• Approval by Indonesian authorities of the PoD for the Northern Hub development that includes the Geng North discovery, and the Ganal PSC fields development that materially extends the production plateau of Jangkrik, the Southern hub.
• With the launch of two new floating vessels, the Baleine Phase 2 project offshore Cote d’Ivoire is on track to commence operations by end ‘24 as scheduled, in line with our fast-track approach, and complementing the success of Phase 1.
• Closed the divestiture of Nigerian onshore assets.
• Finalized the combination of our UK oil&gas assets with Ithaca Energy to create a new geographically-focused satellite in line with the successes of Vår Energi in Norway and Azule in Angola.
• FID taken to build a biorefinery in Malaysia with our joint venture partners Petronas and Euglena, with 650 ktons/y of advanced processing capacity. Works for converting Livorno into a biorefinery expected to begin shortly.
• Eni finalized its transformation, decarbonization and relaunch plan for its chemicals business first announced in March. Eni will invest in the development of new chemicals platforms in high value downstream activities such as renewables, circular and specialized products while reducing exposure to basic chemicals, thereby recovering profitability and supporting a positive impact on employment.
• First CO₂ injection at our flagship Ravenna CCS project offshore Italy. UK Government Funding secured for the Liverpool Bay Transport and Storage Project, a key milestone in the development of the HyNet CCS project.
• A new organizational set-up focused on 3 new business structures has been set-up to unlock the value of Eni’s satellites and complete Eni’s transformation leveraging our operational excellence and high-quality assets^[1]: i) “Chief Transition & Financial Officer” focused on maximizing the value of our transition-related businesses; ii) “Global Natural Resources” designated to fully capture the value across the oil & gas value chain and to monetize our traditional assets; iii) “Industrial Transformation” designated to accelerate the restructuring of our chemicals and downstream businesses.

Disciplined capital management to support deleveraging. Commitment to delivering competitive shareholder returns with buyback increased in 2024.

• Confirming investment by KKR into Enilive for a total €2.9 bln.
• Continued exploration success has created a number of material options for early monetization and realization of value.
• Better than expected progress in portfolio enabled the acceleration of the share buyback program in Q3 ‘24, raising the ’24 buyback to €2 bln from €1.6 bln in Q2 ‘24 to reflect the prospect of significantly lower balance sheet leverage.

Resilient results driven by effective strategy execution and financial discipline despite lower Brent prices, EUR strength, and weaker margins for refining and chemical products.

• In Q3 ’24 delivered Group proforma adjusted EBIT of €3.4 bln and adjusted net profit of €1.3 bln. In Q3 ’24 adjusted cash flow of €2.9 bln was underpinned by continuing progress in implementing our strategy, new project contributions, growth at the businesses related to the transition, and a focus on costs and financial discipline.
• Q3 ’24 E&P proforma adjusted EBIT of €3.2 bln was helped by the ramp-up of higher value barrels at new projects, strong execution, and cost control. It came despite weaker Brent prices and Euro appreciation impacting both y-o-y and sequential comparisons (down 5% and 9%, respectively). Q3 production was resilient (up 2% y-o-y) notwithstanding a sequential decline (down 3% q-o-q) due to the impact of maintenance on a larger North Sea base, hurricane effects in the GoM, divestments and lower activity in Libya.
• Q3 ’24 GGP proforma adjusted EBIT of €0.25 bln was up 65% y-o-y, optimizing the gas and LNG portfolio.
• Enilive proforma adjusted EBIT of €0.18 bln was helped by the marketing performance and partly offset by lower biofuels margins. In Q3 ’24 Plenitude earned a proforma adjusted EBIT of €0.13 bln, slightly down y-o-y, reflecting a typical return to normal seasonality and the decrease in gas sales as per market demand dynamics.
• Refining proforma adjusted EBIT was €0.03 bln, down both y-o-y and sequentially as the scenario deteriorated markedly (the SERM was down by over 80% in the quarter). The Chemicals again incurred a loss (€0.2 bln) due to continued industry headwinds: subdued demand, competitive pressure and the comparatively higher energy costs of operating in Europe.
• €10.7 bln of operating cash flow delivered in the nine months, largely covering the organic capex funding needs of €6.1 bln. Organic free funds “FCF” of €4.6 bln have been used to fuel shareholders cash returns of €3.4 bln and together with around €1.7 bln of disposals enabled the Company to maintain net borrowings to €12 bln, including the Neptune acquisition. This left Group leverage at 0.22, in line with Q2 ‘24 and well within the 0.15-0.25 guided range for 2024-27.

E&P results expected to meet expectations, with upside to GGP performance. Transition satellites performing well despite weaker market environment. Underlying financial performance seen as better than previous in a constant environment

• E&P: full-year hydrocarbon production is expected at around 1.70 mln boe/d at the forecast average Brent price of 83 $/bbl.
• GGP: expectation of proforma adjusted EBIT for the full year is raised to around €1.1 bln.
• Enilive and Plenitude:
            - confirmed proforma adjusted EBITDA of approximately €1 bln for each segment despite a lower market environment.
            - Installed renewable capacity to reach 4 GW by 2024 year-end (+30% vs the previous year).

Reaffirmed FY Group consolidated results expectations, net of scenario effects, and capex plan guidance

• Group consolidated results based on the Eni scenario^[2]: Accounting for a revised Brent scenario of 83 $/bbl (as well as other variables (weaker USD, SERM, etc.) the management is now expecting the FY Group proforma adjusted EBIT and the adjusted CFFO before working capital at €14 bln and €13.5 bln, respectively.
• Organic Capex projected at below €9 bln for the full year. On a proforma basis, capex net of proceeds from disposals is continued to be seen at below €6 bln.

Shareholder Returns: 2024 buyback increased by €0.4 bln. Interim dividend confirmed, up 6% on 2023

• Next quarterly dividend: following Shareholders' approval of a dividend of €1 per share for fiscal year 2024, a 6% increase over 2023, the second quarterly instalment of €0.25 per share is due to be paid on November 20, 2024, with November 18, 2024 being the ex-dividend date, as resolved by the Board of Directors yesterday.
• In consideration of the disposal plan progressing ahead of our initial plan, we confirm to further raise the 2024 share buyback. The 2024 buyback is now expected to be €2 bln, a 25% increase on the previous guidance of €1.6 bln and more than 80% higher than the original plan for the year. This will bring total distribution to around 38% of CFFO^[3].

Accelerated deleveraging supported by faster pace in disposal plan

• Leverage expected at year end on a proforma basis, considering the portfolio actions agreed but not closed, is expected to be towards the lower end of a possible 15%-20% range.
• The Group disposal plan is proceeding faster than expected with excellent visibility of almost all the €8 bln net disposal proceeds over the four-year plan.

The above-described outlook is a forward-looking statement based on information to date and management’s judgement and is subject to the potential risks and uncertainties of the scenario (see our disclaimer on page 18).

The full version of the Press Release is available in PDF format.