Rai Way S.p.A.

Good afternoon. This is a course called Conference Operator. Welcome, and thank you for joining the RyeWay First Half 2021 Results 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 Laiwe. Please go ahead, sir.

Thank you, operator. Good afternoon, and thanks to all of you for joining us today for our first 2021 results presentation. As usual, Aldo will begin to walk you through the key facts and figures of the period, while Adalberto will provide more financial details. At the end, we will be available for the Q&A session. Let me now hand the cover over to Aldo. Please, Aldo, the floor is yours.

Thank you, Giancarno, and good afternoon to everyone. We are very pleased with the positive results delivered in the first six months of the year, which are fully in line with our expectations, in particular with revenues which have grown even without the contribution of inflation being driven once again mainly by the expansion of the multiplex coverage. with EBITDA and profitability improving year on year, despite a tough comparison with the previous year due to the gradual fading of the COVID effects from which we had been benefiting, especially in the second quarter of 2020, as we had already anticipated in our previous touchpoints. With CAPEX in line with our full year guidance for 2021, in particular on the development side, boosted by the reforming project. On the operational front, good news came from the Ministry of Economic Development and the tendering process to allocate the additional capacity with one of the well-known lots of half multiplexes awarded to Rai, thus confirming our confidence that we would manage three multiplexes for Rai, and I will come back I will come back to this in more detail in a couple of minutes. But as you know, refining is not the only growth initiative you are working on. As the development of new services and the expansion of managed infrastructure play a central and strategic role in the trajectory for a custody in our industrial plan, here I can say that things are proceeding steadily with the setup activities now almost completed on the three main lines, namely the hyperscale data centers, edge data centers, and content delivery network. We are now evaluating the most appropriate strategies in terms of locations, authorizations, and permits that for this kind of assets have a significant impact on the overall business case. Indeed, this is why we have not yet got to the point of sharing more details. In the meantime, in order to be even more effective and focused on the upcoming implementation phase, we have created a dedicated organizational area which has full responsibility for the development of this new infrastructure and services and is bringing in the necessary specific skills And in this context, I'm also pleased to welcome Mr. Luca Beltramino, asset of the new area. Luca, who joined the REWEI team in July, has extensive international experience in data center and edge data center sector, have led, among other things, the development in Italy of the assets of some of the principal U.S. operators. I think this is also indicative of the validity of our project, and we are confident that his contribution will provide a boost to the implementation of our plans. Last but not least, let me also reaffirm, as a result of the performance recorded so far, our guidelines for the full year 2021, as we will see at the end of our presentation. Back, as promised, to the subject of re-farming. It is worth taking a snapshot of the progress of the project, where, as you know, we are engaged both at national and regional level. And slide number five will guide us through this, in particular. On the national side, the positive outcome of the tender for Rai is the best possible news on the regulatory front as it confirms our expectation on the three multiplexes managed by the way for Rai, removing most of the remaining uncertainties. As a result, the contract will step up in the fixed consideration paid by Rai equal to 15.8 million euros on an early basis is effective from July 1st last as provided for in the agreement with RAI. As you probably know, the regulatory level discussion are underway on the possibility to make the switchover process as smooth as possible for Italian households. I am referring here for example to the possible remodulation of the transitory period. Today, media talk about this concrete eventuality and lend to the slight postponement of the switchover to MPEG-4 and to the VBT-2 standard, but not without technical issues. In any case, from our and your point of view, we do not see risks to the deadline for the release of frequencies as you know, June 30, 2022, and to the technical characteristics of the network after the transitory period. Therefore, considering that we are ready to deliver the new networks also with the current roadmap, we do not foresee impacts on the agreement with RAI. Looking now at the operational front, The multiplex coverage extension project can be considered substantially completed. We have also installed the new MPEG-4 DTT platform here in Rome. In terms of the configuration of the new networks, namely the new macro-regionalized multiplex one and the two national multiplexes, we are fully on track to meet the switchover deadlines in the various technical areas that have been sequenced. Let me remind you that, as of today, we will see a first transition from MPEG-2 to MPEG-4 and a second transition from DVB-T to DVB-T2. All in all, roughly 65 million euros have been spent today on these projects out of the approximately 150 million of planet development investment devoted to refining. Finally, at regional level, in May, we share with you the assignment of tenders in six Italian areas, joined in the second quarter by the award of local frequencies also in Veneto, one of the richest regions in Italy, and with a compelling risk-reward profile. So, having recorded in this way 100% success rate in the areas where we competed, and we can definitely feel satisfied about the outcome of the tenders. Moving at slide number six, you find the usual highlights for the first half. Let's start with core revenues that reached €113.3 million, 2% higher than the first half of last year, thanks to the contribution of new services for RAI, more than offsetting, along with the very good performance of fixed wireless access clients, the slightly negative CPI trend recorded in 2020, and the MNOs dynamic. Then they adjusted EBITDA at 69.8 million euros, up 2.8% year-on-year, confirmed the strong profitability at 61.6%, growing quarter-on-quarter as well. On the bottom line, the net income was up 1.3% year-on-year at 33.2 million euros, benefiting from one million euro one-off tax relief related to COVID-19 already recorded in the first quarter, which offset the expected increase of DNA resulting from the development investments. In fact, development investments were relevant also in the second quarter, bringing the figure for the first six months to 23.7 million euros from the 16 million euros in 2020. On top of that, maintenance capex also accelerated up to 6.2 million euros in the first half, doubling the lower than usual value recorded in 2020, also as a result of a material project for the extension of our internal and monitoring and control network. As a result, also including the higher maintenance capex level in the period, cash conversions remained very high, above 90%. And lastly, net debt in June. came out at 84.5 million euros, reflecting the development investments, the 63.9 million euros dividend payment that occurred in the second quarter, and the usual solid recurring free cash flow generation. And with this, I'll hand over to Adalberto to provide you with details on the financial performance. Please, Adalberto, the floor is yours.