Our 2023-2026 Strategic Plan is addressing the challenges of the current energy market to deliver secure and sustainable energy to customers, while accelerating the path to net-zero. This section highlights Eni's value proposition.
To provide effective answers to the energy trilemma and contribute to providing abundant, affordable and environmentally sustainable energy, Eni has developed an innovative business and financial model that allows us to solve the problem of capital allocation, striking the right balance between investments and returns.
Claudio Descalzi
In order to address the challenges of the current energy market, Eni built a winning value proposition, detailed below:
*Share price closing as of 30 June 2023, calculated on announced dividend of 0.94 €/share and share buyback of €2.2 bln assuming a reference Brent price of 85 $/bbl.
Technology, and specifically, proprietary technology,is at the foundation of our strategy. This has been the case in the past, for our traditional businesses, and even more now to face the complexity of the energy transition.
Technology underpins the development of new businesses and allows us to be at the forefront of market change, so we can bring to scale and provide new solutions to customers more quickly, generating stronger returns. In line with this approach, we have decided to merge into a dedicated entity our biorefining business with the marketing of low carbon products and services for sustainable mobility, a winning customer-centric proposition along our downstream value chain.
In this context, a stakeholder alliance is a necessarycondition to effectively deploy the new models and the new technologies, removing barriers to change and involving everyone in the transformation of the energy system.
The new and innovative business structures that target challenges and opportunities of energy markets, have the following purposes:
1. Natural Resources: decarbonizing and enhancing the Upstream portfolio
BEST-IN-CLASS EXPLORATION FOR OVER A DECADE: leading the sector in value creation , feeding Upstream growth & value and focusing on efficiency with ~3.5 Time-to-market
SUPERIOR UPSTREAM PORTFOLIO: an high-quality and resilient portfolio, with lowest technical costs and impairments reported in the sector in the last 5 years
A RESILIENT AND RESHAPED GLOBAL GAS & LNG: a more diversified and flexible portfolio, with a larger equity component
RISING TO THE TRANSITION CHALLENGE: adding value to carbon neutrality with CCS and supporting Sustainable Mobility with Agri-hubs
2. Energy evolution: growing profitably while transforming
SUSTAINABLE MOBILITY: a winning multienergy & multiservice hub
TRADITIONAL & BIO REFINING SYSTEM FOOTPRINT: strategic presence with respect to end markets and supplies
PLENITUDE, A JOURNEY OF GROWTH: growing pipeline, financially strong, resilient & diversified
NEW ENERGY SOLUTIONS FOR THE SHORT-MEDIUM & LONG TERM: a portfolio of technologies to meet decarbonized energy needs
A STAR IN A BOTTLE: MAGNETIC FUSION: safe, sustainable, inexhaustible clean energy source - a breakthrough technology
3. Financials: aligning industrial and financial strategy
COMPELLING FINANCIAL STRATEGY: Growing returns with earnings & cashflow delivery
STRONG BALANCE SHEET: committed to shareholder return while preserving strong financials
DISTRIBUTION: a financial strategy committed to shareholders
SUSTAINABLE FINANCE: a structural core component in the execution of our plan
In addition to our 2022 dividend of 88c/share we repurchased 5.5% of shares in issuance for an average price of €12.3. This implies a total payout of 27% of our adjusted CFFO, entirely organically funded.
Our excellent financial and strategic progress provides scope to enhance and simplify our remuneration policy. Going forward we intend to distribute between 25%-30% of annual CFFO by way of a combination of dividend and share buyback. Expected underlying performance improvement and the buyback provides scope for the dividend to continue to rise in the coming years.
For 2023 the dividend expected to be paid is €0.94/share, a 7% increase on 2022. With our expectation for the scenario and the performance of the business we started our 2023 share repurchase program of €2.2bn from May. Against our previous policy this represents a doubling of the buyback at the same scenario. In conditions that exceed our scenario we expect to apply 35% of incremental cashflow to additional buybacks
Remuneration data exclude disposal plans; Share prices closing as of 30 June 2023.
Eni yield calculated on announced dividend and share buyback with a Brent 85 $/bbl scenario
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