Rai Way S.p.A.

Good evening, this is the Coruscant Conference Operator. Welcome and thank you for joining the Raiway First Hop 2025 Results Analyst Presentation. All participants are in listen-only mode and after the presentation there will be a Q&A session. At this time, I would like to turn the conference over to Mr. Andrea Moretti, Head of IR of Raiway. Please go ahead, sir.

Thank you, Operator, and good afternoon. Welcome, everybody, to our half-year financial results call. Today's speakers will be, as usual, our CEO, Roberto Cecatto, our CFO, Adalberto Pellegrino, and Giancarlo Venucci, our Chief Corporate Development Officer. Let's start with Mr. Cecatto. Please go ahead, sir.

Thank you, Andrea. Good afternoon to all of you. Let me start from positive news in terms of results that we are delivering. Revenues were up to 2%, accelerating from 1.7% performance in the first quarter, underpinned by both media distribution and digital infrastructure. Considering the CPI link contribution equal to 1.2%, the additional boost was provided by DAB coverage extension for RAI, rising tower hosting volumes, in particular from radio broadcaster, and the initial contribution from diversification initiatives. Adjusted EBITDA hit 96.3 million euros. up by 3%, also helped by some non-core items that Adalberto will cover in a while. Scrapping them at just every day underlining trend was in line with our expectation and full year guidance. providing for a constant growth in traditional business compensated by the startup operating expenses of diversification initiatives. Net profitability was in line with last year's ESWARE investments, but with a significant difference compared to the first semester of 2024. Out of 16.1 million euros capex in the first six months of 2025, the majority was represented by maintenance activities. Indeed, as anticipated during the last call, this year we are undergoing some extraordinary maintenance activities. And just to give you an example, in the Apulia region, we are investing 2.7 million, of which 1.5 already spent, on a crucial 70 years old transmission site in order to decommission two old transmission towers while building a brand new 120 meters high tower. one of the tallest and more modern railway has ever engineered. That we rationalize and renew one of our major infrastructural assets while enabling synergies and efficiencies and guaranteeing the continuity of the TV and radio content transmission in full security with higher quality standards. On top of that, the maintenance component of our CAPEX also reflects a phasing skewed in the first half of certain investment on the IP network. As for development component, the lower first half level reflects, first of all, the completion of the first phase of the rollout of diversification initiatives, and second, the current focus on marketing of the existing assets. And third, the design of new assets, in particular, the new edge data center in Bali, as well as also incorporated in the guidance, the slight shift to 2026 of certain activities related to various initiatives, mainly in the traditional business. Let me say that this must not be misunderstood. Our view of the markets we are investing in remains confirmed, as does the company commitment. Optimism and commitment are clearly reflected in our operational progress. In fact, in the last two, three years, the CDN market has experienced a very rapid evolution, also driven by consumption dynamics during the COVID period. In fact, after a phase of tremendous volume growth, followed by a period of traffic stabilization, but very high competition, The market is now approaching a new normal, let me say, with a more balanced supply and demand, and a more rational and stable progression in both volumes and price. On the one hand, this evolution has led to the acceleration of certain dynamics that we initially expected to be more gradual. But on the other hand, it has created a context in which, with decreasing competition, the performance and the quality of our solution can truly be a differentiating factor. To summarize, a more gradual growth curve, but with the same landing point in the long run and greater customer interest. Not surprisingly, from a commercial standpoint, we are reaching the players that we aim to reach. After a long trial period, which is normal for a newcomer, but let me say long trial, not so much long, because at the end is really a few months that we have the infrastructure already on running. Our network architecture, currently distributed across multiple distributed injection point and interconnected via a proprietary high-performance network, and the quality of our application partners have led to sign framework agreements with at least three of the main operators offering live streaming in Italy, with further negotiation underway. By allowing us to became one of the two, three CDNs used by each of these clients, these framework agreements will bring streaming traffic, that's revenues, on our network from now on. On the Azure Data Center side, we maintain the view of a growing regional leads of megawatt. today largely underserved or currently served from the Milan region due to the lack of high quality alternatives. Considering sites, location and features, our commercial sweet spot is represented by mid-size enterprise and digital players, which is exactly where we are focusing our efforts. In the region where we already operate, apart from Milan, that are Veneto, Liguria, Tuscany, Piedmont, and latter on parts of southern Italy, research estimates over 30 megawatts of additional demand in the coming years from this response. and we have to compare with 1-2 MW that we currently have available in the pipeline, with relatively limited competition. While receiving positive clients' feedback on proximity, quality, interconnection and national footprint, we keep working on few key points. particularly in terms of clients targeting, which might be consistent with the typical commercial footprint of an infrastructure company, and on the effectiveness on the go-to market. Apart from prescience, as many enterprise IT projects we see that have a long decision and implementation time, sometimes up to 12, 18 months, around half of the medium enterprise data center requirements originate from private cloud application application that luckily are largely channeled through system integrators and which we have chosen as our partners however system integrator integrated solution provided by private cloud operators who are the ones who ultimately decide where to place the servers. Therefore, this is an experience that we see in these past months of the approach in the market. So therefore, to avoid being disintermediated and better intercept this underlying demand, we are extending our offer to include IaaS services basically virtual machine for storage, and computing. Let me say still infrastructure-based, but with more value-added features. This solution became even more competitive. First, because when backed by a distributed interconnected network like ours, and second, when powered by smart, cost-effective software such as that of Cabit, an Italian cloud storage startup that will support our service under strategic business alliance. Going forward, we will therefore focus on expanding service range, growing partnership including private cloud players, and using our direct presence in a more targeted and effective way. Considering, on the other side, the hyperscale project, following the positive outcome of the so-called Conferenza dei Servizi, the last step is the signing of the concession with the municipalities, so the final authorization and the agreement with the municipalities. We have already finalized the draft document. Therefore, barring any unforeseen delays, we expect to sign the agreement within the next few weeks. Let me say, taking into consideration the upcoming summer breaks, let's say by September, more or less. Finally, putting us in the composition to move forward with the final design and procurement activities. But going now back to the numbers, I would also like to underline the financial performance resulting in the generation of more or less 63 millions in the semester. And let me say in line with the last year. The combined effect of free cash flow generation, investment activities, as well as the payout of dividends, drove our net debt at the end of June to around 178 million, which is less than our time our last 12 months every day. Looking ahead to the remainder of the year, we are pleased to rise our adjusted EBITDA guidance for the full year, together with the minor refacing of some investment that I mentioned earlier. But I will elaborate more on that at the end of this call. To conclude, I would also like to share a brief update on the analysis currently underway regarding the potential consolidation with data hours. To date, we have mainly worked on industrial aspects, and the activities are now progressing also on other relevant elements that you could easily imagine. Now it's time to deep dive in our first half of 2025 financial result, which will be discussed by our CFO. Please, Alberto, now the floor is yours.