Alastair Syme, Citigroup. Al.
Thanks, John. I had a couple of questions on slide 21 on the cash flow growth, the 17 billion in 2030. Francesca, you made some comment about the cash tax rate. Could you tell us what rate we should assume in 2030 versus where it was in 2026? And then secondly, on slide 22, you've given all the cash in from the satellites over the period. Could you talk about how that's phased? Is there more of it coming in the back end of the profile?
About the cash tax rate. The tax rate that you have seen last year was in the range of 45%. You could expect this keeping a similar range in the coming two to three years, then dropping because the contribution from business combination clearly helps to reduce the tax rate. In terms of cash tax rate, the weight is in the range of 23%. Again, we will have a similar trend, relatively steady level and then dropping towards below 20% by the end of the plan.
It was really about the cash in from the satellites. You talk about a billion expected cash in?
The cash from the satellites. We were accumulating cash last year in the range of 2 billion, above 2 billion, through the dividend. By expanding the magnitude and the number of satellites, this will grow progressively. What we expect in the coming years is substantially to double that amount, that contribution, along the four-year plan.
Okay. So assume roughly 4 billion in 2030 then.
A good proxy. Yes. Clearly in our scenario.
Perfect. Sure. Great. Thank you.
Just for the question they made before on the cargos in the straits. We can say that Eni doesn't have any cargo now.
Okay. So hopefully that answered your question. We're going to move now to Alejandro Poggi at Mediobanca. Alejandro.
Good afternoon. Thank you for taking the questions. I have one on chemicals. I was wondering if you can give us perhaps new guidance on the break-even for the division. And the second question on cash flow guidance for 2026, if you can take us through the main moving parts for the 2026 guidance versus 2025.
Concerning the chemical scenario, compared to the previous one we have seen some deterioration, particularly stagnation in different markets and some lack of rebound of demand, in addition to a higher cost of feedstock for the chemical industry. This will have corresponded to two years of delay in our break-even of EBIT, but we are putting in place additional actions in order to mitigate one year at this moment, so we expect the break-even delayed by one year on the EBIT side. About the comparison between 2025 and 2026 cash flow from operations, we have to keep in mind that last year we benefited from a few one-off factors, mainly in Power, G&P, and E&P. This year we are also having the impact from the second half of the year of the 400 million of cash from operations that will be the net effect of moving Plenitude as a dividend contributor instead of cash flow from operations. For this reason we have raised the range in terms of distribution up to 45%. Overall, this year is actually an improvement like for like, removing all these one-off factors, by around 700 million versus last year.
Thank you, Alejandro. Thanks, Francesco. We're now going to move to Paul Redmond at BNP. Paul, if you're online.
Hi guys, thank you very much for your time. Two questions. First, on Eni Live, you've included a scenario assumption for refining margins which essentially fall and then plateau from 2028. Can you give me an update on your view on renewable fuel margins out to 2030 and whether that's different to what you're highlighting in your refining margin scenario? And then secondly on divestments. You're guiding to gross capex 29, net capex to 25 billion. That's 4 billion of divestments as I read it, with about 2 billion coming in 2026. Over the remaining four years you're not guiding to much in terms of divestment. How should we read that? Does that mean you're comfortable with where the portfolio stands?
Thanks for the question. On bio-refinery margin, we see increasing margins along the five-year business plan driven by strong fundamentals. Demand is expected to grow significantly, above 20 million in 2026, above 40 million in 2030, driven by policy. The Renewable Energy Directive number three from 14 to 29 is already in place, and in the US the RVO target is expected to increase by around 40%. We are already seeing market move upon expectations. REO is already $1.5 per gallon, pretty much a dollar above the level reached in the previous year, and margins are already significantly increasing. On the business plan, it's not just a matter of scenario but actually we are pulling all value creation levers to maximize results. It's capacity as a driver but also product optionality like SAF, feedstock flexibilization, maximizing the kind of feedstock we can process, and a strong contribution from agri production that gives us the unique competitive advantage of being fully integrated along the value chain. About the portfolio, this year we described a set of operations covering 2 billion as extra benefit but it doesn't include the benefit of the consolidation of Plenitude, which has a similar effect in terms of deleveraging. If you add that, the net effect for the year is more than doubling the amount of 2026. Similarly the amount over the plan will be almost double. We present every year a plan with a degree of visibility that progressively improves as a risked component, because we don't want to over-promise and instead we prefer to over-deliver. Through exploration and portfolio optimization we continue to generate optionality. So we are happy with our portfolio and also with the optionality embedded in it.
Thanks, Francesco. Thanks, Paul. We're now going to move to Matt Lofting at JP Morgan. Matt.
Thanks everybody for taking the questions. Congrats on the update. I think it's very reflective of the strength of strategic execution that Eni has delivered over the last few years. The 100% reserve replacement metric within the upgraded growth stands out. What are the key project FIDs or sanctions over the next few years that are required to deliver on that ratio, and whether there are particular projects that stand out disproportionately? And then secondly, it struck me that it was an important point on distributions, the rising quality of the dividend as cash break-evens fall. How are you thinking around the value proposition of buybacks as shares continue to re-rate, and to what extent is the move to 100% extra dividends above $90 reflective of that balance in terms of buyback versus dividend?
As we've highlighted today, we have the strongest, the largest, deepest, most diverse pipeline of projects in our history. This outstanding replacement ratio is driven by some super-major projects like Argentina LNG, Indonesia where we have just taken two very important FIDs, Ivory Coast, Mozambique, Nigeria, Angola, and Congo. Our proven reserve life index is about 11 years, but if we include probable reserves associated to projects under maturation, this reserve life far exceeds 20 years. It comes from exploration but also our ability to deliver cost-competitive projects. It's not enough just to discover, you have to turn resources into reserves, and we have turned more than 60% of our resources into reserves in the past year, with outstanding time to market and delivery on cost. Just recently, Wood Mackenzie issued a report where we are among the top leaders, the top in exploration and the top in the development of those resources.
If I can add something about the capability to put new projects in production. It's true we have been very fast so we increase the reserve replacement, but also that comes from our exploration strategy. Our exploration strategy is really to focus exploration, reducing the risk where we have facility installations, and that clearly reduces the cost but also the possibility to go through the replacement ourselves very quickly. Everything starts from the strategy we applied in exploration in the last more than 10 years. That is another reason for low cost and the rapidity through which we can get this life index and replacement ratio.
About the buyback versus the dividend or the scope for the buyback. It's been almost a few years where we prove we are keen and able to share any upside with our investors during the year. So we set at the beginning of the year a conservative approach towards distribution. This is a floor, a promise we recognize immediately, and then during the year we execute our plan. We improve, we do better in production, disposals, execution, and sometimes there is improvement of the scenario. Actually in the last two years the scenario dropped during the year and in any case we were able to distribute more through an increased share dedicated to the buyback. This year, due to the exceptional conditions we are facing in the market, there is a continuous potential improvement in the magnitude of the buyback, but the possibility to execute a buyback is becoming less and less effective as the amount of cash flow grows, because there is a limitation in terms of trading per day or share that you could buy. For this reason, in a scenario above $90 we will be able to distribute more. We thought a one-off payment in the fourth quarter, decided in the third quarter, would be a way to execute that additional distribution. Taking into account gearing and the overall strength of the company in terms of investment opportunity, the one-off special dividend would be the more appropriate solution for sharing that upside.
Thank you, Francesco. And thank you, Matt. We're now going to move to Lydia Rainforth at Barclays. Lydia, if you'd like to ask your question.
Thanks, John. Two questions please. Coming back to the impressive upstream portfolio. You've talked in the slides of the FID schedule slippage being 5% versus the industry average of 15%, the FID cost growth lower as well. Just as you're doing more and more projects, how do you make sure you can keep that discipline? And then the second one is probably more for Francesco, to help me with my math. We're talking about returning 100% of additional cash to shareholders in the form of extraordinary dividends above $90. You talked about that being a 14 billion euro cash flow from operations bit. But we do have higher natural gas prices and higher refining margins. So is it 100% of any additional cash flow over that 14 billion euro level that gets returned, even if oil price is a bit lower but gas is a bit higher?
On how we keep track of this record and discipline. I like this word discipline on the delivery. We are building on our track record. We have the skills, the competencies. We've said several times that we never laid off people. We always took in-house the core competencies: G&G, engineering, production. We've maintained these competencies. We have an edge on technology, on super-high computational computing, on geographical diversification and diversification of the production mix. In the last 10 years, we've been the second largest in terms of FPSO built, second to Petrobras. But comparing with our peers, we are by far the largest in FBSO and floating LNG. We've trained our organization to build these units all along the years, and what is in front of us is exactly the same. We have to continue building FBSOs and floating LNG.
I really share what Guido said. When you talk about training your company, Eni grew organically. We grew through our industrial actions, our projects. In the last 15 years we did it really differently because we insourced competencies, we increased technology, we invested in R&D, and we invested in our capability to grow organically. We have aspirations but also the development, and that is why in the last 10 years, from a time-to-market point of view and the number of projects, we are the first in the industry. Others may grow in one country, we are growing in at least six to seven different countries. At Eni we made clear choices at least 15 years ago, and now we are consistent. We don't change. That is one of the reasons why we are sure we can keep going with this kind of trend and positive results.
About the buyback versus the extra dividend. We're not limited. As we said during the presentation, the $90 is a trigger for the extra dividend, but potentially you could have a scenario where the average is 88 but on the other side you have a gas price or a refining margin that is much higher. Even in that case, we will distribute that excess cash flow 100% as extra dividend. Just to give you a ratio, it is substantially 50% above the current scenario, the current assumption in gas and Brent. It means $9 as a refining margin and around 54 euro per megawatt-hour for gas. These are the two equivalent numbers for the $90 Brent.
Thanks, Lydia. Just actually to add to what Claudio and Guido said, there was a nice stat in the slide pack: 90% of all the future production under development is either operated by Eni or one of Eni's affiliates. So the control over the pace of growth is very much in our own hands. Thank you, Lydia. We're going to move to Mark Wilson at Jefferies. Mark.
Thank you very much. On the growth to 2030 in the plan, the increased growth LNG, could I ask firstly, are both Argentina FLNG vessels included in that target? And I also note there has been talk of a third Mozambique FLNG vessel. Is that a potential, maybe not for 2030 but very close to it? And then secondly, about the business combination. I thought you said this included all of Petronas' production in Malaysia. Is that the case? And could you speak to how unprecedented it is for such a satellite setup with an experienced NOC like Petronas, and how the management will be set up?
