Rai Way S.p.A.

Good afternoon, this is the Coruscall Conference Operator. Welcome and thank you for joining the RightWay First Half 2020 Results Conference Call. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Giancarlo Benucci, Head of Corporate Development and IR of RightWay. Please go ahead, sir.

Thank you and good afternoon. Thank all of you for joining us today and welcome to our first of 2020 results presentation. As usual, Aldo will start driving you through the key facts and figures of the period, while Adalberto will present the financials more in depth. At the end, we will be at your disposal for the Q&A session. Let me now hand the call over to Aldo. Please, Aldo, go ahead.

Thank you Giancarlo and good afternoon to everyone. Let's start with the key messages arising from the first six months of this exceptional 2020. As already pointed out, commenting upon the first quarter, luckily enough, our company's operating environment, although not fully immune, has been only softly affected by the COVID-19 emergency. In addition, Up to now, we have been able to react quickly and manage the impacts effectively and in line with the already anticipated expectations. Basically, with no material impacts on the broadcasting and hosting activity and contracts already in place and offsetting the more gradual deployment of certain development activities, due to the restrictions we had in March, May period, so during the lockdown. First, the more gradual supply, not only for revenues, but also for the OPEX associated to the development activities. And secondly, a temporary OPEX reduction resulting from the COVID or from the measures implemented to face the same emergency. such as the broad deployment of the agile work models. And lastly, the benefits coming from other more sustainable saving initiatives. As a result, in the first half 2020, performances came in line or in same respect even slightly ahead of our expectations. confirming the solidity and the resilience of our business. And showing, in particular, a growth at top-line level, supported by new services for RISE, despite the more gradual contribution for the multiple discovery extension project. And a 3.5% rise in of adjusted EBITDA with profitability improving by 170 basis points at 61% and the ramp up of development investments driven by refining that will fuel for our future growth. Again, on the refining front, to provide you with an update on the regulatory steps, it's worth noting that last July, on July 24th, the Italian Regulatory Authority, so the RGCOM, launched a 60-day consultation on the criteria governing the auction for the two additional national multiplexes split in four half-multiplex slots. as I remind you, will finalize the definition of the digital terrestrial network configuration after the refining process or post-refining. The consultation is expected to be completed by the end of August and then the final criteria will follow and after that the tender. Let me point out a few interesting points emerging from the very detailed proposal of the authority. So first, the tender will be based on a single offer with no possibility to increase it. Two out of the four lots will be reserved to potential new entrants, to network operators currently managing only one multiplex. And also on procedure, with minimum value of the offer set at around 4 million euros. On the remaining two lots, these are open also to the big network operators, to the national network operators, meaning Rai, of course, and Mediaset through Elettronica Industriale, with minimum value of the offer set at 7.9 million euros. The awarding will be based for 70% of the score on technical criteria. Technical criteria is continuity of the service, experience as network operator, capacity to ensure spectral efficiency, and again, quality of distributed contents and coverage. So technical criteria for 70% of the score. and for the remaining 30% on the economic offer. The authority proposed also a new cap, the new cap on the number of multiplex managed by a single operator that should be set at three. And you remember that the current number is five. And finally, The duration of the write or the frequency's write of use confirmed at 10 years and could be potentially so renewable. So overall, looking at these criteria, we remain confident with our base case of three multiplex managed for write. Okay, let me remind you that the decision to participate or not is up to Rai. Obviously, having more capacity will give benefits to Blocaster, to Rai, to Blocaster for supporting HD offering. But at the same time, the agreement we signed last December already regulate all the different scenarios is a very good reflection for right-way, also in case of two multiplex. As you know, the reframing process involves also the local TV. So on the local TV reframing site, the tenders to award the regional multiplexes have been started in some areas, particularly in the north of Italy, so in Lombardia, Monte, Val d'Aosta, and in Trentino Alto Adige, and are currently underway. In this perspective, we confirm the selective approach foreseen in our new industrial plan with the focus on those areas offering a compelling risk-reward profile. So moving now to capital allocation, as you may remember, the capital allocation and the shareholders remuneration strategy in our recent industrial plan included together with the usual 100% dividend payout, also a buyback program to be launched in 2020 for an amount of 20 million. through the use of our available reserves. Now, in line with the recent approval of the shareholders meeting and following the dividend payment, we are ready to start this program in the beginning of August. Then, Alberto will add some technical details later on. Lastly, the positive evolution of the business observed so far allows us to keep the guidance for 2020 adjusted EBITDA unchanged while lowering our expectations on maintenance capex. On this topic, I will come back in a few minutes. Moving now to slide number five, I will comment on the highlights of the first half starting with core revenues. that reached 111.1 million euros, so up 0.7% compared to 2019, mainly as a result of rising contribution for new services to RARI, offsetting the MNO-driven pressure on third parties. So, a performance on revenues that, let me remind you, has been achieved despite First, substantially zero CPI contribution, and secondly, some COVID-related slowdown in commercial uptake. On the opposite, adjusted EBITDA at 67.9 million euros came out significantly higher than last year, benefiting from the slightly higher revenues and mainly, as commented before, from the low level of operating costs, boosting profitability above 61%. At the bottom line, one-off expenses and higher DNA impacted the 32.8 million euros net income, however, slightly up year on year. On the financial side, CAPEX in the first half totaled 19 million euros, an amount materially higher than last year. Its development component reaching 16 million compared to the 4.1 million of 2019 and mainly driven despite the well-known restrictions by the multiplexes coverage extension, as you know, part of our reforming project. Maintenance capex remains steady at low levels, reflecting once again our traditional seasonality of the investment activity. Moving on, the recorded net debt post IFRS at June 30th amounts to 32.5 million euros but this figure already includes as debt the 63.3 million impact of the dividend paid on July 29th, so after the end of the first half, but approved by the shareholders meeting in June. So to conclude, the cash conversion remained strong at 95.2% exceeding the first half 2019 figure, And I think now, Alberto, I will now hand over to you to provide with more details on the financial performance. So please, Alberto, the floor is yours.