Financial Plan - Investor Relations Presentation_Powerpoint presentation.pdf

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1. TAG’S
BUDGET 2023
AND
FINANCIAL PLAN
2024-2027
Supervisory Board Meeting
Vienna, 1
st
December 2022
T R A N S A U S T R I A G A S L E I T U N G W W W . T A G G M B H . A T

2. T R A N S A U S T R I A G A S L E I T U N G / 2
“
OUR VISION
Connecting markets
by providing energy
for a lighter future…

3. AGENDA
General remarks, Market
and Capacity Scenario
01
Key Pillars, Main Assumptions
and Business Statements
02
Profit and Loss03
Capex Plan04
Financial Statements05
Sensitivities06
T R A N S A U S T R I A G A S L E I T U N G / 3

4. General remarks,
Market and Capacity
Scenario
01
T R A N S A U S T R I A G A S L E I T U N G / 4

5. GENERAL REMARKS
The outbreak of the conflict between Russia and Ukraine has
dramatically changed the energy market in Europe with an
unprecedent and unpredictable worsening of the economic
conditions in terms of commodity prices and gas flow configuration
TAG has been severely affected in 2022 by the new scenario
having faced a strong reduction in utilization from 29 bcmin 2021 to
an expected 13 bcmin 2022
From 2023 onwards the flow reduction from Russia will continue
in order to meet the EU Commission guidance to reduce the
dependence on Russian gas
The combination of the uncertain and unpredictable developments
in the gas flow scenarios and the expiry of the long term contracts
on 31st Dec 2022 is making any estimation hard to predict
Nevertheless, new opportunities have opened up for TAG , as its role
has been changed from a one -way transit system to an
interconnector (approx. 2,8 bcmin reverse flow in 2022), allowing for
security of supply and the north/south balancing on short term basis
T R A N S A U S T R I A G A S L E I T U N G / 5

6. MARKET SCENARIO
The gas demand in Italy will decrease more
quickly than expected (renewables) and will
mostly be covered by supply from the South
(Algeria/Libya, TAP) and LNG
Seasonal fluctuations will bring periods of
physical reverse flow, like in October 2022
TAG as key infrastructure to ensure the security
of supply and the adequation between the gas
market areas (access to Austrian storages from
the South, short term balancing due to particular
weather conditions, etc)
Prevalence of ST products vs LT products
TAG is actively involved in enabling the energy
transition by progressively repurposing its asset
for the decarbonized gasses (e.g. hydrogen)
MAIN ASSUMPTIONS FOR MTP MAIN ASSUMPTIONS FOR MTP
T R A N S A U S T R I A G A S L E I T U N G / 6

7. 2022
LT contracts booked on DZK basis do not actively contribute to transport , because
unbundled & little possibility of combination with SNAM capacity
Intense periods of DA&WD bookings , with spreads up to 30 €/MWh end of September
Monthly and quarterly bookings during summer. From October, mostly yearly capacity
bookings
2023
Most of the capacity already sold on yearly & quarterly basis up to the current SNAM
limitation (approx 195 GWh/d)
Marginal DA & WD capacity bookings, possibly combined with interruptible capacity on the
Italian side
2024 –2025
55 GWh/d already booked in yearly auction of July 2022 . Lower overall bookings expected
after first experience of reverse flow and better booking efficiency
2026 –2027
Increasing importance of reverse flow in duration (6 months vs 3) and volume
CAPACITY BOOKING AT ARNOLDSTEIN
ENTRY
KEY INFORMATION/ASSUMPTIONSKEY INFORMATION/ASSUMPTIONS
T R A N S A U S T R I A G A S L E I T U N G / 7

8. 2022
Strong decreaseof flow from RUwith a commercial flow of approx 13 Bcm(N)
for the wholeyear(previousMTP 27 Bcm(N))
Expiration of LT contractson 31.12.2022 (calendaryear)
2023
Transfer of LT contractsvia secondarymarketto stillactive shippers, enabling
shippersto avoidST multipliers.
Very high correlationof bookingsvs actualtransportation needs.
Quarterlybookingsin 2023 due to CAM NC marketing rulesand start of yearly
bookingsonlyon gas year(01.10.2023). Moreover, quarterly bookings remain a
good compromise to benefitfromlowmultipliers(1,15) whileallowingreduced
bookingsin the expectedreverse flow season(s) (storagefilling) and therefore
not replacedby yearlybookings
2024 ONWARDS
Very strong declineof forwardflow. LT contractscover the major part of the
capacityneeds, but have lowerattractivityon the secondarymarketdue to the
increasing«interconnector» behavior, whereshorter termproducts(Q, DA & WD)
enable a betteradequationof the bookingsdespitethe highermultipliers
CAPACITY BOOKING
AT ARNOLDSTEIN
EXIT
KEY INFORMATION/ASSUMPTIONSKEY INFORMATION/ASSUMPTIONS
T R A N S A U S T R I A G A S L E I T U N G / 8

9. Key Pillars, Main
Assumptions and
Business
Statements
02
T R A N S A U S T R I A G A S L E I T U N G / 9

10. KEY
PILLARS
3
Strong commitment on
environmental sustainability:
27% CH4 reduction in
2025 vs avg 2015-2020
50% CO2 reduction in
2030 (anticipation in 2021
of 30% CO2 reduction
from 2022) vs avg 2015-
2020
4
Strong financial
discipline
1
A change in the
regulatory framework
has been considered
starting from 2025 (cost
plus methodology)
2
CAPEX focused on strong
selective criteria for future TAG
system utilization
Security of Supply and
System integrity for both
Austria and Italy
Net Zero commitments
(Methane emissions and CO2
reductions)
Gradual preparation of the
system for H
2transportation
T R A N S A U S T R I A G A S L E I T U N G / 1 0

11. FINANCE
Digitalisation of Finance functions: implementation of Vendor Invoice Management System in 2022 and further improvement in
the next years according to roadmap
The implementationof the Cash Dashboard for short cash planning was completed in 2021; starting from 2022 it is being
integrated with a long-term cash planning which is supposed to be implemented in 2023
Establishing Sustainability Report as requested by law (to be completed within 2024)
Despite of the conclusion of several credit agreements which terminate in 2023/2024 a further Re -Financing has to be established
as SSD will expire in 2025
IT
Main assumption on the IT CAPEX plan is that the CLOUD policy will be continued
NIS-regulationand ISMSrequirements increase also a focus on cybersecurity, which reflects the increasing CAPEX in IT
infrastructure and OT-security projects in upcoming years (related to measurements of NIS -report)
The digital transformation is ongoing. Commercial and Gas Measurement systems will be improved in 2023 after go -live this
September. Evaluation of CoDip successor has been started. Investments for expanding the Enterprise Document Management,
Permit to Work, Operational Reporting and other minor investments on the infrastructure along the pipeline are foreseen in 20 23
Preliminary works for a Big Data approach will be done to start companywide Data Analytics projects in 2023
SAP ERP and other SAP technologies lifecycle management: maintaining the technical functioning of the ERP systems over the
years, according to the product lifecycles and future evolution of the market
PERSONNEL
Maintaining and when necessary, adapting TAG structure, focusing on needed competences
Cost increase based on collective bargaining agreement forecast according to expectedly significantly higher inflation
rate
MAIN ASSUMPTIONS AND
BUSINESS STATEMENTS
T R A N S A U S T R I A G A S L E I T U N G / 1 1

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FINANCE
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IT
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PERSONNEL
A
B
C
MAIN ASSUMPTIONS AND
BUSINESS STATEMENTS
T R A N S A U S T R I A G A S L E I T U N G / 1 1

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FINANCE
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IT
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PERSONNEL
A
B
C
MAIN ASSUMPTIONS AND
BUSINESS STATEMENTS
T R A N S A U S T R I A G A S L E I T U N G / 1 1
Digitalisation of Finance functions: implementation of Vendor Invoice Management
System in 2022 and further improvement in the next years according to roadmap
Implementation of the Cash Dashboard for short cash planning completed in
2021; starting from 2022 it is being integrated with a long-term cash planning which is
supposed to be implemented in 2023
Establishing Sustainability Report as requested by law (to be completed within
2024)
Despite of the conclusion of several credit agreements which terminate in 2023/2024 a
further Re-Financing has to be established as SSD will expire in 2025

14. Profit &
Loss
03
T R A N S A U S T R I A G A S L E I T U N G / 1 4

15. Priority to projects ensuring system integrity and continuity of business (SCS Replacement,
Major Overhaul Valve Station, Corrosion Refurbishment, Valves Replacement)
Priority to projects fostering decarbonization process, by reducing emissions of natural gas,
CO2, and other pollutants (NOx, CO, chemicals) (Actuators Replacement)
Full reassessment of the transport reductions according to the new 360hrs/ year limitation
Redistribution of other type of projects in the following years, e.g. buildings, warehouses
Projects related to NIS certification and for strengthening the physical security (IT
infrastructure, Argus)
CAPEX PLAN / FINANCIAL PLAN 2023 -2027
Capex summary
T R A N S A U S T R I A G A S L E I T U N G / 1 5
has been driven by the following
criteria:
MTP 2024-2027
Replacement of station control system (SCS) and emergency shut down system (ESD) will be
implemented in CS-Baumgarten in 2023 and in CS-Rudenin 2026 (moved from 2023 to 2026)
and introduction in 2026 for Eggendorfand Weitendorf
Other project related with methane emission reduction, such as Repl OrifOper Met toUSM
will startin 2026
Project of ELCOs HMI CS-/B/E/G planned now in 2023 and 2024 and Cable Ways CS/B/G/R
from 2023-2026
Major overhauls of valve stations and refurbishments of pipeline insulation, corrosion
and dent defects are the pillars of the investment plan on the pipeline from 2023 -2026,
specifically for TAG I and TAG II
The initiative to replace valves and actuators will start in 2023 with the first phase in CS-
Baumgarten and in 2024 in CS -Grafendorf. It will continue in the following years in CS-B, CS-
G and CS-Ruden
ofthefinancialplanapproved:
Comparison with the
period 2023-2026

16. T R A N S A U S T R I A G A S L E I T U N G / 1 6