Rai Way S.p.A.

Good afternoon. This is the Curve Call Conference Operator. Welcome and thank you for joining the RightWave First Half 2024 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 Andrea Moretti, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator. Good afternoon to everybody and welcome to our first half 2024 results presentation. Today's speakers will be our CEO, Roberto Cecatto, our CFO, Adalberto Pellegrino, and Giancarlo Benucci, our Chief Corporate Development Officer. The presentation will cover results as of the 30th of June 2024, as well as an update about the projects included in the industrial plan that we presented last March. Let me therefore hand the call over to Mr. Cecatto. Please go ahead, sir.

Thank you, Andrea, and good afternoon to everyone. As usual, I will briefly comment on the main highlights of the period, while immediately after, Adalberto will run you through the details of our financial performance. Economic and financial results for the first half of the year confirmed the trajectory and growth trends observed in the first quarter. Revenues grew once again mainly driven by CPI, full contribution from broadcast services to regional broadcasters, and a positive dynamics in tower hosting volumes. In particular, the latter segment benefited from the contribution of customer categories such as fixed wireless access and radio broadcasts, also thanks to the extension of private DAB operators coverage. As for the OPEX trend, apart from the benefit already observed in the first quarter resulting from higher personnel capitalization, The rationalization efforts on several items more than offset the rising startup cost for diversification initiatives and the absence of the electricity incentives that had characterized the first half of 2023. Overall, therefore, adjusted EBITDA was up 3% in the health year, with an absolute growth recorded in the second quarter that, on an underlying basis, has been ever better than in the first one. Capital expenditures were basically in line with last year, consistently with the guidance, while looking at the development component alone, more than 50% was related to diversification projects. I am referring in particular to the completion of the first five-edge data center. The net financial position stood at €146 million, mainly reflecting recurring cash generation of €64 million, up 3.5% versus 2023, and €86.5 million in dividend payments. Numbers aside, during the presentation of the business plan, we had emphasized the focus we would place on execution. I repeat, the place, the focus on execution. And also, we have indicated the priorities. We are trying to keep our promises, and the first seven months have proven particularly intense and fruitful. Starting from one of the key neighbors, we have a profoundly revamped Raiways organizational structure, on which slide 5, as you see, focuses. We create three divisions, consistently with the markets in which the company operates media distribution and digital infrastructure, with an increasing focus on the latter items. The first division, broadcasting and media, includes broadcasting networks, TV and radio, but also CDN and transmission network. The second division, called infrastructure, includes power and real estate. The third division will manage our data center network. In addition, if you see, we have established what we have named operation structures, which include field force at regional level, as well as control, central control, and security, let me say, cybersecurity especially centers, and we provide the cross-functional support to all the three divisions. Thus, we have moved from a functional model that was ideal for a mono-business model to a divisional model which we believe is more focused and effective to support an increasing opening to new markets and new customers, and so to create value. Indeed, the new model identifies specific responsibilities and improves commitment to reach the planned targets, assigning all the relevant levers to the divisional managers. Finally, the reorganization allows internal people to grow and to freeze up resources to be redeployed in support of diversification. But please, going back to an overview in the slide four, let's now turn to the several updates related to the development initiatives. For the strengthening of the traditional business, The main drivers envisaged in the plan are those related to the further accession of the managed network, particularly radio, and the better utilization of existing assets like backbone and LANs, and the improvement of operational efficiency, also through the optimization of the real estate footprint. On the first point, we are already working on a project for the first adaptation of the DAB network in order to improve coverage of highways in major provinces. We are now developing the project and deepening the technical configuration to be shared with DRI, but the initiatives at its site are in line with the assumptions of our plan. On the real estate front, we are already actively working on the optimization of the real estate footprint in all the territories, starting also with the selection of the new headquarters, hopefully to be finalized soon. On the diversification initiatives side, the successful delivery of the first five edge data centers in Milan, Turin, Venice, Rome and Florence took place just in the last few days. Let's have an in-depth look thanks to the slide 6. The inauguration of the five facilities met the timeline indicated in the plan, making the first 1.6 MW of IT load ready for commercialization. As you can also appreciate from the pictures, they are extremely modern data centers, interconnected through their away proprietary backbone, and so smaller in size, they will be respecting high standards of security and redundancy, meeting the Tire Tree standard. From the commercial point of view, as you may have seen, we have announced the collaboration with Oracle, Precisely because of the proximity, security, and quality of our assets, Oracle has selected Rayway as a data center provider to propose to its customers in order to install their Edge Cloud solution and artificial intelligence services. At the same time, Rayway will be able to enrich each colocation offering by making Oracle a AI and cloud solution available to customers. So, let me say, it's not a sales contract, but it's a collaboration and what we might call a co-marketing agreement. This demonstrates the appeal of our assets ever for relevant players in the world of cloud services. In addition, this agreement is fully in line with our business strategy. which, as you may recall, included indirect channels such as private cloud providers or system integrators to address prospects as a corporation and public administration. For the implementation point of view, in the coming months, we will work on the extension of the network with the design of new edge of data center covering central southern Italy. And talking again about the data center, let's not forget the hyperscale project. In relation with the permitting front, the latest contacts with the relevant authorities make us optimists on the target of getting the final green light within the time frame assumed in the plan, meaning end of this year. We change subject, CDN. On the CDN-related activities, we are also fully on track at the moment with the functional trials that have started in the recent weeks, and we have involved all the major content providers in Italy. The performance test will follow starting from September. In terms of expectation for the full year, in light of the result and the progress just described, we can only confirm the indication of growth of our adjusted EBITDA compared to 2023, as I will explain more in detail at the end of the presentation. Going now back to the first semester performance on slide 7, you will find a summary of the main figures. I will skip it, as I've already briefly commented on them, and I will leave the floor to Adalberto, the CFO, for a closer look to results. Please, Adalberto, go ahead.