Fincantieri S.p.A.

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the FinCAN TRE First Half 2024 Results Presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Pierroberto Folgiero, CEO and Managing Director of Fincantieri. Please go ahead, sir.

Good afternoon, ladies and gentlemen.

Thank you for joining us and welcome to Fincantieri First Half 2024 Results Conference Call. Let me begin by expressing our strong satisfaction for the successful completion of the €400 million rights issue we launched on June 24. We received an extraordinary reaction from the market with 99.2% of new shares offered, subscribed during the rights offer period, and the residual rights sold in the very first minutes of the auction session. A total of over 152 million new shares were subscribed paired with an equivalent number of warrants, giving the right to subscribe new shares in the ratio of five shares for every 34 warrants for an additional aggregate maximum counter value of about 100 million euro. I would like to thank all of the investors that believed in our equity story and strategy and supported us in this important process. As already communicated, The share capital increase of €500 million is intended to finance the acquisition of the Underwater Armament System Business Line, or UAS, from Leonardo. The total maximum value of the acquisition amounts to €415 million, consisting of €300 million as fixed enterprise value in addition to max €115 million as a variable component. based on growth assumption linked to UAS performance in 2024. The closing of the acquisition is expected by the beginning of 2025, subject to regulatory approval and customary closing conditions. Moving now to our first half 2024 performance on page five, we are very satisfied with the performance achieved and our results are fully in line with our growth expectation for 2024. Revenue stand at Euro 300, 681 million, substantially stable year-on-year with the offshore and equipment system and infrastructure divisions confirming the growth of the first quarter. And the production level in shipbuilding expected to accelerate in the second half of the year with the content for two PPA units for the Indonesian Ministry of Defense expected to be effective in the second semester. EBITDA is up 15.6% year-on-year, with the margin at 5.8%, up 80 basis points over first semester 2023, reflecting our focus on profitability in all our businesses, including cruise. Finally, Net financial position at 2 billion 42 euro improves versus first age 2023 and is in continuity with fiscal year 2023. On the commercial side, we achieved impressive results with order intake at 7.6 billion euro, 3.6 times the orders acquired during first age 2023. and higher than all the orders acquired in 2023, with a book to bill equal to 2.1 times fiscal year 2023 revenues. As a result, the backlog reached 27.4 billion euro, up 18.7% compared to December 21st, 2023. With the total backlog, sum of backlog and soft backlog, reaching an all-time record level of 41.1 billion euro, 5.4 times 2023 revenues, supported by a strong commercial acceleration in all business segments. The solid performance, supportive macro trends, and clear visibility we have on our business outlook allow us to confirm our 2024 targets for revenues, increasing to euro 8 billion and for EBITDA margin at around 6%. Our deleveraging process is well ahead of our business plan assumptions and is accelerating further, enabling us to improve our 2024 guidance of leverage net financial position to EBITDA to between 4.5 and 5.5 times, one turn better than the previous guidance of 5.5 to 6.5 times. Considering the temporary effect of the rights issue, the ratio would have been between 3.7 and 4.7 times. Our commercial performance in first six months of 2024 remains exceptionally strong, and our portfolio has benefited from a number of new orders, confirming Fincantieri's positioning at the forefront of novel technological progress as well as its global reach across all business segments. Let me share with you the most relevant achievements for each business segment. On the left, the six new next generation cruise ships for Norwegian Cruise Line Holding to be delivered between 2026 and 2031 represent the pinnacle of technological advancement and exemplify the commitment to environmental sustainability. On top of it, A few days ago, we closed the deal with Carnival for Three Ships, which will be the biggest ever built by Fincantieri in an Italian shipyard. In the middle, the next generation near future submarine program, where we are both design authority and prime contractor. The order for the fourth submarine of the program contributes to the strong commercial acceleration recorded in the defense and underwater domain. It also provides for the application of Fincantieri's new lithium battery system. Lastly, as for the offshore segment, we can highlight our success in penetrating new markets, such as the Asian one, and our ability to meet the growing international demand in this sector, which is experiencing a new pickup in oil and gas. Just a few comments on our order book on page nine. As you can see, we have a full slate of deliveries scheduled for the medium to long term up to 2032, offering a full visibility on our top line for the years to come. Considering also the recent order for Carnival, this timeline will extend to 2033. As of the end of June, Cruise accounts for 27 vessels in portfolio, the fence for 35 units, and offshore for 34 further vessels for a total of 96 ships in backlog. Overall, the commercial performance is strong in all segments with further significant opportunities coming from the other underwater domain and not only. Now, I will hand the call over to Giuseppe who will discuss our financial results. Please, Giuseppe.

Thank you, Pierroberto, and good afternoon, everybody. I now move to slide 11. Of course, we already commented with a very strong order intake with a book to build that is in excess of two times revenues so far, and the contract with Norwegian Cruise Lines for six new ships, two new Constellation-class frigates, and the submarine. Of course, these figures do not include the 1.2 billion euros contract with Indonesia, which is expected to become effective in the second half of the year. Moving on to page 12. The total backlog is at all-time highs, 41.1 billion euros. And, of course, backlog increased to 27.4 billion euros with a soft backlog of 13.7. Of course, the soft backlog shows how the momentum, the commercial momentum is not ended yet, and still we expect further orders coming up in the next months. Of course, recently we announced the order for Carnival, which is a very important milestone for our company. Of course, with the new order acquisition, we extended our visibility, as we said before, now over in the fourth decade of this century. On page 13, revenues. Revenues at 3.7 billion euros almost in first half were substantially stable year over year. And shipbuilding revenues were slightly lower, but again, they will accelerate in the second half of the year in line with 2024 targets and expectations when the contracts for Indonesia will become effective towards the end of the third quarter of 2024. Shipbuilding accounted for almost 70% of group revenues. And within shipbuilding, of course, the contribution of crews is 46% and defense for almost 23%. Both offshore and specialized vessels and equipment systems and infrastructure segments grew substantially, 20%, in terms of revenue year over year. Of course, first of all, offshore confirms and consolidates the positive revenue growth trend that we have seen in the past years, mainly driven by the increasing demand in the market for offshore wind support equipment, even though we are seeing some signs of a pickup also in the more traditional vintage, I would say, offshore oil and gas business. Revenue growth in equipment systems and infrastructure comes from a solid performance in all clusters. The true drivers are deconsolidation of remittance group, roughly 46 million euros, and the growth in infrastructure. Moving on to page 14. EBDA reached 214 million euros, up 16% year over year, and a margin of 5.8%, significantly higher than the first six months of 2023. which were 5 percent. Shipbuilding has recorded a slight pickup in EBDA margin to 6.2 percent, with an EBDA of 172 million. And this is, you know, a proof of our focus in execution and profitability in this segment. Offshore improved to 4.5 percent, and this margin recovery path is in line with the targets set. by VARD and the business plan, and we will see further growth, of course, driven by the positive momentum in the offshore wind market. The equipment systems and infrastructure ABDA reached 14 million euros, and this is roughly six times the performance achieved last year, in the first six months of last year, and the ABDA margin is at 6.2%, both supported by the contribution in the mechatronics business, also thanks to the consolidation of Remezel, and the contribution of the infrastructure business. And this comes from two reasons. Of course, the contracts in the hospital sector and the break-even result on we are booking into the Miami terminal project. Net result, adjusted net result, NetOvox served page 15, of course. a net of extraordinary non-recurring items was negative for 10 million euros, mainly due to the increase in depreciation and amortization. And within this, we have the effect of the amortization of the purchase price allocation of Remezel. Of course, we have a pickup in net financial expenses, and the extraordinary items related to Osvestos claims and one-off costs in relation to M&A and capital increase. Asbestos claims are at 18 million euros lower than last year, and then we have five more million euros that are costs related to the M&A activity and the capital increase. On page 16, networking capital and net financial position. Here, you know, the name of the game is the leveraging is the plan of delivery is we are ahead. Of course, net financial position is still negative for 2.4 billion, but with the marked improvement compared to the first half of last year, and it slightly higher than the situation at the end of last year. Of course, this net financial position is still affected by the deferrals granted to clients after COVID-19. And as of the end of June, we have roughly 600 million of deferrals granted to clients. They were 630 million at the end of last year. The leverage ratio, we are at 5.7 times EBDA. As we said before, expectations are to further improve this leverage ratio. And we have upgraded our guidance for a leverage ratio between 4.5 and 5.5 times CBDA and the end of 2024. And this, of course, excludes the benefit that we received from the capital increase. Let's stay a little more on leverage and capital structure on page 17 right now. We confirm the quality, let me say, and the robustness of our situation as we do not have any significant debt maturities until 2027, and the debt maturities of 2024 are already refinanced. we do not have, therefore, any refinancing risk, but at the same time, we have no covenants in our financial liabilities and a low average interest rate compared to current market levels as we are edged for roughly 80% of our interest costs. And now back to Pierroberto for the market trends and concluding remarks.

Thank you, Giuseppe. Turning to the market trends on page 19, the momentum in cruise orders confirms the very strong rebound of the industry. The number of passengers in 2023 exceeded all expectations, reaching 31.7 million. CLIA also confirmed the 2027 forecast for more than 39 million passengers, a trend that would lead to about 46 million passengers in 2030. We are best positioned to capture further opportunities from the comeback and the green transition and digitalization of the whole cruise market. In this context, efficiency, sustainability, innovation, and collaboration across stakeholders are key. Global defense spending is expected to further accelerate in the coming years with the 2027 forecast revised upwards to $2.58 trillion. Underwater is becoming increasingly important due to the presence of critical infrastructure resources and assets. The main goal for the coming years is to strengthen product and business development for the subsea domain, targeting its security and fostering industrial and economic opportunities. And we will play a pivotal role in this market. Offshore market continues to display a high volume of new orders for SOV, CSOV units At the end of June, the SOB and SOB split amounted to 46 vessels and the order book to 59 vessels, with Fincantieri accounting for approximately one-third of the market. Moreover, more than 200 vessels are estimated to be required by 2030, supporting new building demand in the next three years. We confirm our relentless commitment to sustainability in the sector, and our performance is already well-recognized at the international level. As you can see from page 20, Sustanalytics included Fincantieri in the list of top-rated ESG companies, and we also received the Top Employers Italy 2024 certification from the Top Employers Institute. In July, the group received the travel risk management certification from RINA, being the first company in Italy to obtain it.

Before opening the floor to your question, let me wrap up our presentation with our key takeaways.

We continue to deliver the business plan with a strong top-line visibility and margins growth, thanks to our unique positioning and to favorable market conditions in all business segments. The last months marked a further acceleration in our commercial performance, thanks to the major cruise and defense orders already finalized and to a strong pipeline in all market segments. We are driving these results also thanks to our significant focus on green transition and on the digitalization of our business. Our deleveraging trajectory is well ahead of our business planning guidance for 2024. The execution of the group strategy in the underwater domain is also accelerating. The extraordinary market reaction to the rights issue shows that we are on the right path and that the investors appreciate the growth dynamics in a sector characterized by high margins and very promising intersectoral synergies. The acquisition of WAAS and Remazel, along with other commercial agreements signed over the last months in the underwater and naval defense sectors, place Fincantieri as the leading technological integrator at global level. All in all, thanks to the results achieved, we confirm our 2024 guidance for revenues and margins and improve our guidance for deleveraging to a net debt to EBITDA ratio in 2024 between 4.5 and 5.5 times, excluding the positive effect of the capital increase. This is all the more significant if compared to 2023-2027 business plan target for 2024 of six to seven times. We are now open to take your questions.

Thank you. This is the Chorus Call Conference operator, and we will now begin the question and answer session. Anyone who has a question may press star and 1 on their touch-tone telephone. To remove yourself from the question queue, please press star and 2. We kindly ask to use handsets when asking questions. Again, anyone who has a question may press star and 1 at this time. That's star and 1. We will pause for a moment while questioners join the queue. The first question is from Monica Bosio with Intesa San Paolo. Please go ahead.

Good afternoon, everyone, and thanks for taking my questions. I have three. The first one is a more general question. It's on the cruise business. With the resumption of the orders, what is now the pricing scenario in the segment As King & Carey is planning the deliveries of the new cruise orders in a disciplined way, and I understood that the group agreed with the customers, part of the delivery is beyond 2030. I was wondering if the lengthening of the time horizon for the deliveries is impacting on the pricing scenario, and if yes, how? My second question is on the defense business. Can you please give us any update on the cancellation program and on the expected evolution of the margins related to these programs from now on? And the very last is on the equipment system and service that meet my personal expectation. On the back also of the Remazel consolidation, what can we expect in terms of margins for the division by year end, and if you can give us any color on the evolution of the margins from 2025 onwards on this division? Thank you very much.

Thank you for your question. If I properly understand your question on cruise, it's a kind of comment with respect to this big order intake and how this order intake is expected to be rolled out, rolled off, and also how this is going to affect the overall top line of the company. Let me say in our 2023-2027 business plan, we took the target in order to keep revenues in cruise segment with a continuity vis-a-vis the past. So one of the, I would say, trajectory for the new course is not to grow in term of production with respect to cruise. which is absolutely confirmed. So the order intake that we are securing are needed in order to feed our cruise shipyards in a way that is seamless vis-a-vis the past. So our objective in the cruise business is to work on optimization, is to work on saturation of fixed cost in a way that we can go in continuity with the initial level of the business. In absolute value, revenues are in the region of four billion, and this is the threshold that we are expected to keep throughout the business plan. So the order intake in cruise is big because the market is going very well, but we need those kind of developments in order to feed our shipyards at the level of the past. So I confirm that the target, the managerial objectives are to work on optimization of those revenues in order to increase margins, so marginality, quote-unquote, and cash conversion. We are collecting encouraging evidences that this optimization of top line into revenues the bottom line is going according to expectation, you can measure it also overall looking at the percentage margin in the cruise sector.

Sorry if I ask a follow-up. Is there any extra capacity from other players, other cruise manufacturers, in the industry because I'm just wondering the customer are putting the orders but a part of them will have to wait until 2013 maybe to have the ships. So I was just wondering if there's something that is changing in the dynamic of the industry.

No, no, no. Let me put it in a different way.

We are in a moment in which the availability of slots in shipyards is being particularly scarce, quote unquote.

Okay.

So now it's time to allocate them in an optimized way in order to go for saturation, as I told you before, in order to fit and to adjust all the available holes in the schedule in the production schedule in a very optimized way. This is the first macro trend in the industry. Our commercial policy is being to give space in the short term if you are a long-term partner. So we like to get into this commercial relationship whereby we give long-term visibility to our shipyards. And we take quote-unquote advantage today of today's conditions for a period as prolonged as possible. You know what I mean. So we are very happy to have such a long-term visibility because it is something that is accepted by our clients on the one hand. On the other hand, it's the best way for us to have to have certainties of volume, and to create also certainties in the supply chain with a long-term visibility, and therefore to negotiate at the best all the purchasing of the different equipments and components that you need on a ship. So, you know, market is made of ups and downs. We are on the right part of the cycle. It's very good that we, from this point, from this privileged point, we secure as much as possible long-term commitments because it's positive for our operations and it's very positive for our procurement activities.

Thank you very much.

But all in all, this is not going to increase our yearly revenues on cruise.

Very clear.

Moving to the defense and constellation class. I had other occasions and previous occasions to give you more color on what is the position of Fincantieri in U.S. and what's the role of Fincantieri in this kind of shipbuilding renaissance in U.S. Frigates are, along with air carriers and submarines, Frigates are one of the key components of a fleet. The program, it's a very long-term program for U.S. It's five plus five plus, I would say, up to 20 in term of long-term planning, up to 50 according to long-term strategy. So it's a long journey whereby our shipyard in Marinette is expected to be the shipyard for this program. And the strategy is to accelerate as much as possible along with the U.S. supply chain and along with the shipbuilding of U.S., the productivity, the progress, the production rates in order to achieve even two frigates per year. So this is the capacity of the shipyard. So it's a long-term relationship. very long-term relationship, which is very visible for the future, which will have to, you know, accelerate more and more depending on the availability of workers, depending on the availability of materials. So there are a number of ecosystem contributors to this acceleration. What is important for me and for you to appreciate is that the run rate will be and the faster, the higher is the productivity of the shipyard, the more fruitful will be the collaboration with U.S. So you have to assess this program as a long-term program. There is not zero opportunism, and it doesn't make sense to look at the photogram. You know what I mean? You need to assess the complete... the complete long-term study, which is definitely a success. On the third question about the equipment and other components, Giuseppe, I don't know if you want to add some comments. My comment from here, sorry, sorry, sorry for interrupting you, my fault. My comment from here is that it's a combination of different So to find a common macro trend is difficult. You know, infrastructure is there, which is, you know, a business that we are improving and strengthening the risking as per our original commitments. but you have also, for example, our components business, which is partially captive and partially not, which is getting along with the macro trend in the shipbuilding, for example, which is by definition different from infrastructure. Remazel is part of another value chain because it's part of the oil and gas at sea kind of value chain. So this is a common macro trend, and so a common tendency is peculiar. That's why I leave the floor to Giuseppe. Thank you.

Yes, good afternoon, Monica. On guidance, on equipment systems and services on a standalone basis without the consolidation of Ramazel and, of course, of UAS, we guide for 6% in 2024 and 7% in 2025. Ramazel on a standalone basis has targets of an EBDA margin of 15% for 2024 and 13% for 2025. And this is the latest guidance we published in the prospectus of the rights issue on Chapter 7.

Okay, thank you. I will have a look, sorry.

No updates with respect to that very recent, let me say, disclosure.

Okay, thank you very much.

You're welcome.

The next question is from Alessandro Pozzi with Mediobank. Please go ahead.

Good afternoon. I have a couple of questions. The first one is on the recent agreement you signed with Accenture for the digitalization of your operations. And I remember that digitalization was a key pillar of the strategy at the Capital Markets Day back in 2023. Can you give us an update on the progress, the tangible progress that you've made in the last year or so in terms of digitalization and how that could improve basically your margins and synergies within the group? The second question is on On defense, you recently signed an important order for the fourth submarine for the Italian Navy. Can you maybe tell us what potential other orders are in the pipeline for the Italian Navy in the next few quarters?

Thank you. On your first question, we are

working hard we have been working hard in order to deliver a fincantieri digital platform to be based upon our automation systems so we explained as clear as possible during the capital market day that we want to enlarge our i would say scope of work our scope of influence from the physical domain of the ship which is made of equipment, steel manufacturing, cables, and automation, so from the physical domain to the logical domain. And to do this, you need, first of all, a platform that is managing the industrial data of the ship, and then this industrial data of the ship should create, should contribute to a new layer on top of the automation layer, whereby you can have different vertical application for energy optimization, for preventive maintenance, for cyber security, for a number of other kinds of application, creating a kind of digital ecosystem, which is first of all, an internal one, so dealing with our vertical know-how and skills, and two third-party ones. We are building this infrastructure, so we are building this platform, and we want to join forces with someone that can be helpful in the development of the software. So there is a lot of technical skill. Then there is an architecture. There is an IT, IoT, telecom application. And then we need a partner that can help us in translate this architecture into products. So the relationship with Accenture, it is exactly in this direction. So we want to create a vehicle in which the skills, the key people in charge for developing the software applications are part of Fincantieri family. Because our ambition is to create a product that then will be sold by Fincantieri along with our ships to all our set of clients. So this is the strategy. Where we are? We are quite ahead because we are selecting the Companion of Journey for the implementation, for the software implementation. And we have already secured our first client. So we have already secured the client that will be the first not only buying a Fincantieri hardware, but buying a Fincantieri hardware plus software. What's the value of it? The value of it is first, is very intuitive, is to increase the distinctiveness of our product. So in a world that will never differentiate only on the cost competitiveness, we want to compete on the ability to differentiate our product from the others. So the first result of this new offering is to increase the distinctiveness. The second result of this offer is to shift gradually, so no magic sticks, but to shift gradually from a business model of seller of asset, producer, manufacturer of asset to a lifecycle partner. So to procure that our ship is also for the functions, for the characteristics, for the features, but our ship can also impact, optimize the operational costs of the ship. So we want to get into a business model whereby we have new sources of revenues that are recurring and that are functional to the management of the operating cost. So which is an evolution of the first objective. So the first objective is to compete on an NPV of CapEx plus OpEx. So the Fincantieri ship is a ship that does more things and therefore has some MPV in term of OPEX savings to be associated with the CAPEX for manufacturing the asset. The second ambition is to get into a space in which we sell also other kind of services which becomes extra revenues. This is something we already do in the defense business. So when we sell, in particularly, historically in Italy, and in particularly abroad, when we sell a ship, we don't limit ourselves to the sale of the ship, but we remain for the lifecycle management of the ship. So we know exactly what it means. We know exactly how to organize ourself. We know exactly how to manage the logistics, how to manage the maintenance engineering, for example. So it's an evolution of our business model. Again, it's not a revolution. It's an evolution of our business model. And we have very encouraging results that there is space, that there is need, thanks to our credentials, also thanks to our already existing defense experience in rendering these kinds of services. So we have very encouraging results. And moving to your second question.

Just before we move on, do you have a timeline for the next key milestone for this project or for when the software will be ready to be rolled out?

Of course we have. Of course we have. Of course we have. Of course. I don't think it is going to change the face of 8 billion companies next year. So consider it a kind of evolution in the attractiveness and distinctiveness of Inca theory. So it is not that you're going to see an extra line in your Excel model where you can collect numbers next year it's an evolution for sure next year we will validate we are first client this this this platform will use it it will become operational so next year will be the year but again I don't want you to have expectations of that you will see something macroscopic in the top line. It is a way to enter a new business. It's a way to enlarge, again, our presence in the market. It's a way for us to be lifecycle partners of our clients. And it's a process that will be evolutionary.

Okay. So next year, stepping stone, and then it will grow over the years.

Okay.

Yes. Yes.

Then on your second question, defense, you have highlighted our order intake in the underwater, in the underwater, in the submarines. As anticipated in the past, we have a number of national and international possible acquisitions. From a national perspective with the Italian Navy, We are basically very close to the frigates. We call it Frem Evo, which is two extra frigates with new technologies on top, some initial new digital tools, plus other kind of ancillary equipment from the underwater, which will be progressively adopted as a kind of ancillary equipment to the mothership. So this is one, this is basically there. Then we have in Italy the DDX program, being the destroyer ship, the new destroyer ship of the Italian Navy, which is already envisaged in the investment program of the Italian Navy and is in the phase of the pre-engineering and engineering already. So that's the next in the pipe. And then there are, for 2025, other programs expected to be implemented by the Italian Navy. Then there is the international space. In the international space, we are very active, as you know, with Abu Dhabi, with Saudi, with other countries that we are developing in Middle East. So that's another possible source of good news in the next months. So in 2022, we made acquisition in the region of 300, 400 in the Navy. We are targeting something like 3 billion for this year. So just to tell you how steep is the curve and how nationally and internationally we are very well positioned.

Thank you very much.

The next question is from Gabriele Gambarova with Banca Acros. Please go ahead.

Good evening and thanks for taking my questions. The first one is on the guidance for net financial debt on EBITDA. Is it possible to understand what's behind? I mean, there is this big improvement around $480 million. Is it a matter of, I don't know, higher advance payment or some lower cap? I don't know. Could you tell me something more about this? Sure. Then on the constellation, again, understand that it's going to be, I mean, it's already a very important program and it's going to grow in size. Is it possible to have an idea of the margins that this program carries? And connected to this question, do you think you will have the opportunity to offer lifecycle support for the fleet or the constellation? Is this something possible? Thank you.

Thank you. Thank you for your question. I will start from the second. Obviously, we don't disclose margin on a single program, so it will be, I would say, uncommon and unfortunate for different perspectives. What I can tell you again is that it's an healthy program with an healthy client with very long-term perspective. So I don't know why among billions of orders we are focusing on constellation class. Maybe there is someone in U.S. that is worried, but known in Italy, known in Italy. moving to the and again to sticking to your second question on the life cycle absolutely yes so this is normal in the novel business again it is crucial in our business it is a kind of very very important component to the to the business model so we are not only ready, but we are already preparing ourselves in a dedicated place, which is Jacksonville in Florida, which is a kind of hotspot for repair and maintenance of the U.S. naval ships. So we already carry out that kind of activity over there, and not only for Constellation-class brigades, but we were also selected as provider of repair and maintenance service to the destroyer class of the US Navy. So I'm happy that on this second question, I can give you a more black and white and precise indication. On the net financial position to EBITDA, which are the On the consolation class, sorry, on the net financial position to EBITDA in the second age, as well as for the revenues, the development that is very, very close to happen is the effectiveness of the Indonesia contract which will be very important in term of revenue recognition because it's a sale of an existing ship. So as a sale of an existing ship, the trajectory of revenues is very fast and very accelerated. And accordingly, also the financial consequences of this entrance into effectiveness will be there. Then obviously there are other financial dynamics that are expected to take place in the second half, also connected to initial payments of certain new orders. But if I have to tell you what is making a little bit more of a difference, is the economic and financial consequences of the Indonesia project, whose effectiveness is driven by certain fulfillments, export license, just to tell you one of the most important. As soon as the export license will be there, financial effects and economics effects will be there. So we have been filing this kind of paperwork since the last months. Now we are very close to the finalization of this paperwork and therefore we have a very positive expectation in terms of securing revenues and cash from that contract in the months to come within the end of the year.

Okay, perfect.

Thank you very much.

For any further questions, please press star and 1 on your telephone.

Gentlemen, there are no more questions registered at this time. Thank you, ladies and gentlemen. Thank you very, very much. Thank you. Bye-bye.