Rai Way S.p.A.

Good afternoon. This is the Coruscall Conference Operator. Welcome and thank you for joining the RightWay 9-month 2020 Results Analyst Conference Call. 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 Giancarlo Benucci, head of corporate development. Please go ahead, sir.

Thank you. Good afternoon to all of you, and welcome to our 9-month 2020 results presentation. As usual, Aldo will start with the key facts and figures of the period. Adalberto will then illustrate all the financial details. And at the end of the call, we would welcome your questions in the usual Q&A session. Let me now hand the call over to Aldo. Please, Aldo, go ahead.

Thank you, Giancarlo, and good afternoon to everyone. The third quarter performance has been satisfactory and in line with our expectations, with an acceleration of the development activities in particular, but not only related to the reforming process. The period was also important for all the work that allowed us to reap the benefits in October with the new financing for the awarding in the context of the reforming of regional frequencies in some of the few areas we consider, in the north of Italy, we consider interesting. Obviously, the hope now is that the worsening of the pandemic trend will not derail the economy from the recovery path, although, as you will see later, we continue to see an impact on our business as extremely limited. Let's now go a bit more in detail through the main highlights of the period and the recent events impact our sector and therefore our company and summarize on slide number four. The nine-month results confirmed the resiliency of the business and the trends already anticipated. Very limited impact from the pandemic emergency, both from an operating and a financial perspective, with the marginally smoother profile of the new initiatives offset by a level of expenses favorably affected by the temporary safety measures and more sustainable cost savings. Looking more specifically at the third quarter performance, even when excluding some one-off items, the underlying growth at adjusted EBITDA level remains satisfactory at around 4%, supported by slightly accelerating top dynamic and an OPEX level that, although still favorably impacted by COVID-related measures, is moving back to more usual and recurring levels. The acceleration in the deployment of the development activities is also reflected in a level of related investment that is increasing quarter after quarter. Looking now at the main initiatives in the broadcasting segment, namely the reforming, the reforming process, while the operational activity for Rai progressing with the T2 ready extension in the thematic multiplexes, almost doubling the number of sites and gradually increasing populates coverage, the last few weeks have brought some interesting updates. At the national system level, where the last missing element is awarding of the four hubs multiplexes, Algicom has defined the criteria that will regulate the tender, with the final rules that largely reflect the document placed for consultation during the summer. Now, it's the Ministry of Economic Development's turn to define the timing of the auction. Just to remind you the main elements emerging from the criteria. The tender will be based on a single offer for each of the four lots with no possibility to increase it. The minimum value of the offer is set at 7.9 million euros per lot with payments in installments to be defined by the Ministry of Economic Development. The tender for one lot is reserved to potential new entrants and network operators currently managing one multiplexing DVDT with minimum value of the offer reduced to around 4 million euros. The tender for the second lot is reserved to the same players plus percedera as a compensation measure for the disadvantage at the time of the analog to digital switch off. and the minimum value of the offer, again, that's around 4 million. The tender for the remaining two lots is open also to the other big network operators, meaning Rai and Mediaset, with minimum value of the offers at 7.9 million euros. The awarding will be based for 80% of the score on technical criteria and for the remaining 20% on the economic offer. The new cap of the number of national multiplex managed by a single operator should be set at three from the current number is five. Finally, duration, the duration of the frequency's right of use that is confirmed at 10 years and potentially renewable. So overall, the criteria look consistent with our base case of full multiplex management for RISE, although it's fair to remind you that the decision to participate or not participate is up to RISE. At the regional system level, looking at the outcome of the tenders close to date, Raiway has been awarded with frequencies in two regions of Italy, so Lombardia and Piemonte, that are the two of the most interesting regions in terms of risk-reward considering the decent level of transmission capacity demand is expected from local broadcasters and the investment required for the network rollout. Let me also say that this outcome is fully in line with the assumptions of our industrial plan. While we speak, tenders are progressing in other regions and we confirm our extremely selective approach. As for the other initiatives of our industrial plan, the setup and the operating activities could be unbated. And now, no more on the financial side. As you know, back in August we launched a 20 million euros buyback program, under which at the end of September we have purchased 1.4 million shares for a total consideration of 7.7 million euros. As already disclosed in our monthly update including October total acquisition exceeds 12.5 million euros. And we are also pleased to share with you that in October the company has secured a 170 million euros loan that will cover all the financial needs related to the organic initiatives included in the industrial plan, in our industrial plan 2020-2023. So, Adalberto will provide you with technical details in a few minutes. Lastly, expectation for the rest of the year, we expect new national restrictions to have limited impact on the full year and therefore the company's expectation for for 2020 are confirmed. Now moving to slide number five. You find the usual snapshots on the financial highlights of the nine months. Core revenues total 168 million euros, up 1.4% compared to 2019. and this mainly as a result of the progressive growing contribution from new services for RAI in presence of reflective CPI and the stable level of third-party revenues although positively impacted by one-off items in the third quarter. As a result adjusted EBITDA reached 104.5 million euros a 3.9% increase compared to 2019, also benefiting from the low level of operating costs reported mainly in the second quarter, with a strong profitability at 62.2%. Moving on the bottom line. on one-off expenses and higher DNA resulted in 50.8 million euros net income up 2.3% year-on-year. And on the financial side, CAPEX in the period grew to 34.2 million euros boosted by the refining project and in particular by the multiplex coverage extension speeding up and pushing development capex at 28 million compared to the 5.8 million 2019. As anticipated in our call in July, maintenance capex figure is slightly behind 2019 level, a touch above 6 million euros. Net-debt post IFR assisting at September 30th amount to 40.6 million euros and include the effect of buyback executed from August till September. Lastly, recurring cash conversion remains strong at 93.6% exceeding the first half 2019 figure. That's all on my side for the moment. I'll leave the floor to Adalberto to tell you more on the financial performance. Please, Adalberto.