Rai Way S.p.A.

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the RIVA Full Year 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 Mr. Giancarlo Benucci, Chief Corporate Development Officer of RiveA. Please go ahead, sir.

Thank you and good afternoon. Let me start thanking all of you for joining us today and welcome to our 2020 full year results presentation. As usual, Aldo will start with the highlights and figures of the period. Adalberto will then illustrate the financial details. And at the end, we will welcome your questions in the usual Q&A session. Let me now hand the call over to Aldo. Please, Aldo, go ahead.

Thanks, Giancarlo, and good afternoon to all of you. Today, we are presenting the activities and results of the year 2020, which will be remembered as one of the most peculiar and difficult experiences by all of us. Despite the negative context, Huawei has, however, been able to contain the growth path of its economic and financial results that has been uninterrupted since the IPO, and which we expect will continue and even accelerate in the future. In particular, let me point out the recurring cash generation that in 2020 was close to 90 million and which allows us to plan the development and diversification activities envisaged by our plan. Going now into the highlights in more detail, slide number 4, the economic results are also above the expectation at the beginning of the year. within an adjusted EBITDA up by about 4% to over 136 million. This number has undoubtedly benefited from a temporary reduction in operating costs due to the impact of safety and recovery measures introduced to react to the emergency of the pandemic. A reduction that more than offset the more gradual deployment of certain development activities in the March-May period due to the restrictions. But even excluding this temporary effect, the operating performance, as we will see in more detail shortly, remains very satisfactory. The development investments, which represent one of the engines of our future growth, have increased as expected thanks to the reforming activities but have been supported, as already commented, by a significant recurring cash generation. These results allow us to propose to our General Assembly also for this year a full distribution of the net profit equivalent to a dividend per share of €23.85 and a dividend yield of 5%. From a strategic and operational perspective, first of all, I would like to recall the presentation of the new industrial plan in March, which outlined a clear strategic direction for the near future. During the year, following the finalization of the agreement with RISE, we accelerated the activities related to the refunding, which must be progressively completed in the period between September 2021 and June 2022. At the same time, Looking at customers other than Rai, the commercial effort produced good results, probably not yet immediately evident in numbers, due to the anticipated pressure from MNOs. In reality, net of this segment, performance with third-party customers recorded mid-single-digit growth in revenues and volumes, driven by fixed wireless access operators. From a financial point of view 2020 saw the finalization of the new 170 million euros loan that will cover the financing needs related to the organic initiatives including the industrial plan 2020-2023 and the implementation of the buyback plan completed in November with the purchase of approximately 20 million euros of shares. We are also proud to share today The approval of the first right-way sustainability plan, which gives continuity to the company's straightened commitment to ESG and innovation issues, already started with the preliminary definition of some macro objectives within the industrial plan. We have now outlined new objectives, specific targets, and the portfolio actions, which, as we will see later on, have brought tangible benefits already in 2020. So, in terms of outlook, growth will not stop. Also, in 2021, despite the temporary FX recorded in 2020 have raised the basis of comparison, we expect a further increase in adjusted EBITDA levels. Apart from 2021, as previously mentioned in March of last year, probably in the worst period of the pandemic, we presented an industrial plan that outlined our idea and commitment to evolve our company through the technological update of the networks, the launch of new services, a new digital organization model, and the step up of the size scale through the expansion of the managed infrastructure. totally confirmed on which we are already working not only through the farming but also through the step up of all the other initiatives but before going into the details of the financial performance i would like to draw your attention to the positive behavior the performance that the digital dresser platform has shown in recent months so moving to slide number six. In fact, there is one thing that 2020 has confirmed. It's the resilience of the so-called traditional TV, in particular with high-lining the social role that together with the market structure, Italy, as you know, is mainly free-to-air, and the efficiency with respect to the video distribution typical of free-to-air broadcasters, linear distribution of live content addressing a wide audience represents one of the strengths and drivers of future sustainability of this platform. In particular, the strong push that the COVID emergency has brought on video consumption as a result of greater time spans at home and higher attention paid to information has in fact supported not only the uptake of the OTT platform, but also the use and audience of linear TV, intended, of course, as digital terrestrial platform. So, what's the message? It is likely that this period of marked growth will be transitory. However, it would not be fair to compare the trends of a mature platform with those of platforms that are in an early stage and uptake phase. But the message here is that we are not witnessing a replacement, but rather a complementary and coexistence of platform based on different uses on demand and on deferable on broadband, live and directly to a large concurrent audience on broadcast. Which is exactly the direction rebalancing but coexistence when fully operational envisaged in our industrial plan. And even some studies and surveys which begin to be more reliable and representative following the growth of the RTT subscriber base seem to confirm that this complementarity is valid for the vast majority of users. Moving now to slide number seven. This evidence is also consistent with the large amount of work that operators are making to upgrade the digital terrestrial networks ahead of the refinement. The refinement is a process that, among other things, will also allow an improvement in the quality of transmissions thanks to the higher capacity of the T2 technology and the greater compression of the HEVC standard. These large amounts of activities obviously concern also us. In particular, from the upgrade of the networks we manage for Rai, in addition to the new networks that we will manage at regional level, which will have to be completed progressively between September 2021 and June 2022. As you may recall, the agreement signed that we signed with Rai provides for investment of approximately 125 or 150 million, based on the number of multiplexes managed at full capacity, of which one third completed at the end of 2020, so bang in line with the plan. The activity started first with the extension of the coverage of the current national multiplex, one of which will be extended to be the new macro-regional multiplex. When fully operational, the number of equipment and sites will be increased from the original 400 to 1,000, and to date we have exceeded 900. On the other two macro projects, namely the macro-regional UHF T2 ready multiplex and the upgrade of national multiplex to BT2, We have started the installation of new antennas where necessary and of the T2 transmitters. In terms of regulatory steps, the only pending point is the awarding of the remaining four half multiplex. With current visibility, the auction should take place by this summer, so by third quarter 2021, following the rules already announced and commenced. Although we will not have the final confirmation until the outcome of the auction, our base game remains the one with three multiplex managed for RAI. A scenario implies 150 million investments and approximately 60 million euros of additional revenues. Moving now to slide number 8, you find as usual the financial highlights of the 2020. Starting from the core revenues, total 224.5 million euros up 1.4% compared to 2019, mainly as a result of the progressively growing contribution from new services to Rai in presence of a flat-tish CPI and the broadly stable level of third-party revenues with a more balanced customer mix. As already anticipated, adjusted EBITDA reached 136.1 million euros, so a 3.7% increase compared to 2019, bringing profitability above 60% level, 60.6% to be precise. Moving on, at the bottom line, one-off expenses and higher DNA linked to rising investment resulted in 64 million euros net income, so up 1% year-on-year. On the financial side, CapEx in the period grew to 60.6 million euros, boosted by the farming project and in particular by the multi-flex coverage at Centrum project. About net debt at December 30 amounts to 46.1 million euros and includes the effect of the buyback executed from August till November. This level reflects a very strong recurring cash conversion over the year, above 90% exceeding the 2019 figure by more than 5 percentage points. I leave the floor to Adalberto to tell you more on the financial performance. So please, Adalberto, the floor is yours.